SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) March 17, 1998
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PS Business Parks, Inc.
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(Exact name of registrant as specified in its charter)
California 1-10709 95-4300881
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(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification No.)
701 Western Avenue, Glendale, California 91201-2397
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(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code (818) 244-8080
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Public Storage Properties XI, Inc.
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(Former name or former address, if changed since last report)
Item 2. Acquisition or Disposition of Assets.
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On March 17, 1998, American Office Park Properties, Inc. ("AOPP")
merged into the Registrant (the "Merger") pursuant to an Amended and Restated
Agreement and Plan of Reorganization dated as of December 17, 1997 among the
Registrant, AOPP and Public Storage, Inc. ("PSI"). In connection with the
Merger, (i) of the 1,819,937 outstanding shares of the Registrant's Common Stock
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Series A, based upon elections made by the shareholders, 106,155 shares were
converted into $2,176,177.50 in cash (at the rate of $20.50 per share) and
1,713,782 shares continue to be owned by the shareholders, (ii) of the 707,071
shares of the Registrant's Common Stock Series B and Common Stock Series C,
47,824 shares of Common Stock Series C were cancelled prior to the Merger, and
659,247 shares of Common Stock Series B and C were converted into 569,656 shares
of the Registrant's Common Stock Series A (at the rate of 0.8641 shares of
Common Stock Series A per share of Common Stock Series B and C), (iii)
11,737,527 shares of the Registrant's Common Stock Series A were issued to the
holders of AOPP common stock (at the rate of 1.18 shares of the Registrant's
Common Stock Series A per share of AOPP common stock, (iv) the Registrant
changed its name from Public Storage Properties XI, Inc. to PS Business Parks,
Inc., (v) the Registrant's Common Stock Series A was reconstituted as Common
Stock and (vi) the Registrant became the general partner of American Office Park
Properties, L.P., a California limited partnership (the "Operating
Partnership"), which changed its name to PS Business Parks, L.P. Concurrently
with the Merger, the Registrant exchanged 13 predominantly mini-warehouse
properties for 11 commercial properties owned by PSI. After the Merger, the
Registrant has 14,020,965 shares of Common Stock issued, with approximately an
additional 7,438,000 shares reserved for issuance upon conversion of partnership
interests of the Operating Partnership into shares of Common Stock of the
Registrant.
Item 5. Other Events.
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Directors and Executive Officers After the Merger
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Set forth below is information regarding the current directors and
executive officers of the Registrant:
Name Positions
---- ---------
Ronald L. Havner, Jr. Chairman of the Board, Chief Executive
Officer, President, Chief Financial
Officer and Secretary
Mary Jayne Howard Executive Vice President
Harvey Lenkin Director
Vern O. Curtis Director
Arthur M. Friedman Director
James H. Kropp Director
Alan K. Pribble Director
Jack D. Steele Director
Ronald L. Havner, Jr., age 40, a certified public accountant, became a
director of the Registrant on March 16, 1998 and became Chairman, Chief
Executive Officer, President, Chief Financial Officer and Secretary of the
Registrant on March 17, 1998. Mr. Havner was Chairman, Chief Executive Officer,
President, Chief Financial Officer and Secretary of AOPP from December 1996
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until March 17, 1998. He was Senior Vice President and Chief Financial Officer
of PSI and Vice President of the Registrant and certain other REITs affiliated
with PSI until December 1996.
Mary Jayne Howard, 52 years old, became Executive Vice President of the
Registrant on March 17, 1998 with overall responsibility for property
operations. She was a senior officer of AOPP from December 1985 until March 17,
1998 with overall responsibility for property operations and was a Senior Vice
President of PSI from November 1995 until December 1996.
Harvey Lenkin, age 61, became a director of the Registrant on March 16,
1998 and was President of the Registrant from its inception in 1990 until March
16, 1998. Mr. Lenkin has been employed by PSI for 20 years and has been
President and a director of PSI since November 1991. He was a director of AOPP
from December 1997 until March 17, 1998. He has been President since 1990 of
Public Storage Properties XX, Inc. ("PSP20"), a REIT affiliated with PSI. From
1989-90 until the respective dates of merger, Mr. Lenkin was President of 17
affiliated REITs that were merged into PSI between September 1994 and June 1997
(the "Merged Public Storage REITs"), and he was also a director of one of the
Merged Public Storage REITs. Mr. Lenkin is a director of the National
Association of Real Estate Investment Trusts (NAREIT).
Vern O. Curtis, age 63, Chairman of the Audit Committee, is a private
investor. Mr. Curtis has been a director of the Registrant since its inception
in 1990. Mr. Curtis has also been a director of PSP20 since 1990. Mr. Curtis is
also a director of the Pimco Funds, Pimco Commercial Mortgage Securities Trust,
Inc. and Fresh Choice, Inc. From 1989-90 until the respective dates of merger,
he was a director of the Merged Public Storage REITs. Mr. Curtis was Dean of
Business School of Chapman College from 1988 to 1990 and President and Chief
Executive Officer of Denny's, Inc. from 1980 to 1987.
Arthur M. Friedman, age 61, a member of the Audit Committee, became a
director of the Registrant on March 16, 1998. Mr. Friedman, a certified public
accountant, has been an independent business and tax consultant since September
1995. He was a partner of Arthur Andersen from 1968 until August 1995. During
his 38-year career in public accounting, he specialized in tax consultation. He
was a member of the Andersen Board of Partners from 1980-1988.
James H. Kropp, age 48, became a director of the Registrant on March
16, 1998. Mr. Kropp has been Director of Investment Management and Banking of
Christopher Weil & Company, Inc. ("CWC"), a securities broker-dealer and
registered investment adviser, since April 1995. CWC has rendered, and is
expected to continue to render, financial advisory and securities brokerage
services for PSI and its affiliates. Mr. Kropp was a director of AOPP from
December 1996 until December 1997. From July 1994 to November 1994, he was
Executive Vice President and Chief Financial Officer of Hospitality Investment
Trust, a REIT. From 1989 to July 1994, he was Managing Director of MECA
Associates USA, a real estate advisory and asset management company serving
institutional property owners.
Alan K. Pribble, age 55, became a director of the Registrant on March
16, 1998. He has been an independent business consultant since June 1997. Mr.
Pribble was employed by Wells Fargo Bank, N.A. for 30 years until June 1997. He
was a Senior Vice President of Wells Fargo from 1984 until June 1997. In 1992,
Mr. Pribble opened a commercial finance division for Wells Fargo and was
involved in its operations until June 1997. From 1988 until 1992, he was a
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Senior Vice President and Regional Manager, and from 1984 until 1988, Mr.
Pribble was a Senior Credit Officer, for Wells Fargo.
Jack D. Steele, age 74, a member of the Audit Committee, has been a
director of the Registrant since its inception in 1990. Mr. Steele has also been
a director of PSP20 since 1990. He is also a director of M.C. Gill and CRG
Compensation Resource Group. Mr. Steele is a business consultant. From 1989-90
until the respective dates of merger, he was a director of the Merged Public
Storage REITs. Mr. Steele was Chairman - Board Services of Korn/Ferry
International from 1986 to 1988 and Dean of School of Business and Professor at
the University of Southern California from 1975 to 1986.
Compensation of Directors After the Merger
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Each of the Registrant's directors, other than Ronald L. Havner, Jr.,
receives directors' fees of $10,000 per year plus $200 for each meeting
attended. In addition, each of the members of the Audit Committee receives $100
for each meeting of the Audit Committee attended. Directors who are not officers
or employees of the Registrant ("Outside Directors") also receive automatic
grants of options under the 1997 Stock Option and Incentive Plan (the "Plan"),
and Ronald L. Havner, Jr. is eligible to receive discretionary grants of options
and/or restricted stock thereunder. Under the Plan, (i) on March 16, 1998,
following the Registrant's annual meeting of shareholders, each Outside Director
was automatically granted a non-qualified option to purchase 5,000 shares of the
Registrant's Common Stock and (ii) thereafter, each new Outside Director will,
upon the date of his or her initial election to serve as an Outside Director,
automatically be granted a non-qualified option to purchase 5,000 shares of the
Registrant's Common Stock. In addition, after each subsequent annual meeting of
shareholders, each Outside Director then duly elected and serving will
automatically be granted, as of the date of such annual meeting, a non-qualified
option to purchase 1,000 shares of the Registrant's Common Stock.
Compensation of Executive Officers After the Merger
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After the Merger, the Registrant pays annual base compensation of its
executive officers as follows: Ronald L. Havner, Jr. ($185,000) and Mary Jayne
Howard ($165,000). In addition to these minimum annual salaries, the executive
officers receive discretionary bonuses and discretionary awards under the Plan.
Employment Agreements. In December 1997, Ronald L. Havner, Jr. and Mary
Jayne Howard each entered into an employment agreement with AOPP, which
agreements were assumed by the Registrant in the Merger. Mr. Havner's employment
agreement is for a term of two years and provides for an annual base salary of
$185,000 and a discretionary annual bonus. Ms. Howard's employment agreement is
for a term of one year and provides for an annual base salary of $165,000 and a
discretionary annual bonus. The agreements include provisions restricting Mr.
Havner and Ms. Howard from competing with the Registrant during employment. In
the event of termination of an agreement by the Registrant without cause,
termination by the employee with cause or a merger or consolidation in which the
Registrant is not the surviving corporation, or a transfer of all or
substantially all of the assets of the Registrant (other than the Merger or any
other merger approved by Mr. Havner in which the agreement is assumed by the
surviving corporation), each agreement provides for the following payments: (i)
the present value of the employee's annual base salary for the remainder of the
term of the agreement (based on a discount rate of 5%), (ii) a prorated portion
of the employee's last annual bonus, but in no event less than the employee's
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annual base salary and (iii) the acceleration of the vesting of the employee's
stock options so that all of the employee's outstanding stock options will be
exercisable during a specified period.
Security Ownership of Certain Beneficial Owners After the Merger
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The following table sets forth information as of the date indicated
with respect to the persons known to the Registrant to be the beneficial owners
of more than 5% of the outstanding shares of the Registrant's Common Stock:
Shares of Common Stock
Beneficially Owned
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Name and Address Number of Shares Percent
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PSI, PS Texas Holdings, Ltd.,
PS GPT Properties, Inc. 4,914,428 35.1%
701 Western Avenue
Glendale, California 91201-2397(1)
Acquiport Two Corporation 5,289,765 37.7%
c/o Heitman Capital Management
Corporation
180 North LaSalle Street
Chicago, Illinois 60601,
New York State Common Retirement Fund
633 Third Avenue, 31st Floor
New York, New York 10017-6754(2)
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(1) This information is as of March 17, 1998. The reporting persons listed above
have filed a joint Schedule 13D, amended as of March 17, 1998. The 4,914,428
shares of Common Stock beneficially owned by the reporting persons include (i)
4,533,367 shares as to which PSI has sole voting and dispositive power, (ii)
114,355 shares which PSI has an option to acquire (together with other
securities) from B. Wayne Hughes as trustee of the B.W. Hughes Living Trust and
as to which PSI has sole voting power (pursuant to an irrevocable proxy) and no
dispositive power and (iii) 266,706 shares held of record by PS Texas Holdings,
Ltd., a Texas limited partnership, as to which (a) PS GPT Properties, Inc., the
sole general partner of PS Texas Holdings, Ltd. and a wholly-owned subsidiary of
PSI, and (b) PSI, share voting and dispositive power.
(2) This information is as of March 17, 1998. The reporting persons listed above
have filed a joint Schedule 13D dated March 17, 1998. The 5,289,765 shares of
Common Stock beneficially owned by the reporting persons are held of record by
Acquiport Two Corporation. New York State Common Retirement Fund, as the sole
stockholder of Acquiport Two Corporation, shares voting and dispositive power
with respect to the 5,289,765 shares.
Security Ownership of Management After the Merger
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The following table sets forth information as of March 24, 1998
concerning the beneficial ownership of the Registrant's Common Stock of each
director of the Registrant, B. Wayne Hughes (who was the Registrant's chief
executive officer on December 31, 1997) and all directors and executive officers
as a group:
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Shares of Common Stock:
Beneficially Owned (1)
Shares Subject to Options (2)
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Name Number of Shares Percent
- ---- ---------------- -------
Ronald L. Havner, Jr. 71,448(1)(3) 0.5%
25,945(2) 0.2%
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97,393 0.7%
Harvey Lenkin 60(1)(4) *
3,995(2) *
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4,055 *
Vern O. Curtis 2,000(1) *
Arthur M. Friedman 100(1)(5) *
James H. Kropp 8,391(1)(6) *
Alan K. Pribble 2,000(1) *
Jack D. Steele 1,100(1)(7) *
B. Wayne Hughes 114,355(1)(8) 0.8%
All Directors and Executive Officers
as a Group (eight persons) 85,159(1)(3)(4) 0.6%
(5)(6)(7)(8)
45,922(2) 0.3%
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131,081 0.9%
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* Less than 0.1%.
(1) Shares of Common Stock beneficially owned as of March 24, 1998. Except as
otherwise indicated and subject to applicable community property and similar
statutes, the persons listed as beneficial owners of the shares have sole voting
and investment power with respect to such shares.
(2) Represents vested portion as of March 24, 1998, and portion of which will be
vested within 60 days of March 24, 1998, of shares of Common Stock subject to
options under the Plan which were assumed by the Registrant in the Merger.
(3) Includes 500 shares held by a custodian of an IRA for Mrs. Havner as to
which she has investment power.
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(4) Includes 30 shares held by Mrs. Lenkin as to which she has investment power.
(5) Shares held by Mr. Friedman as trustee of Friedman Living Trust.
(6) Shares held by a custodian of an IRA for Mr. Kropp as to which he has
investment power.
(7) Shares held by a custodian of a simplified employee pension for Mr. Steele
as to which he has investment power.
(8) Shares owned by B. Wayne Hughes as trustee of the B.W. Hughes Living Trust
as to Mr. Hughes has sole dispositive power and no voting power; PSI has an
option to acquire these shares and an irrevocable proxy to vote these shares.
Item 7. Financial Statements and Exhibits.
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(a) Financial Statements.
AOPP Pro Forma Consolidated Financial Statements. Filed with
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1997 and incorporated herein by reference.
(b) Exhibits.
2.1 Amended and Restated Agreement and Plan of Reorganization
among Registrant, AOPP and PSI dated as of December 17, 1997.
Filed with Registrant's Registration Statement No. 333-45405 and
incorporated herein by reference.
3.1 Restated Articles of Incorporation. Filed herewith.
3.2 Restated Bylaws. Filed herewith.
*10.1 Registrant's 1997 Stock Option and Incentive Plan. Filed
with Registrant's Registration Statement No. 333-48313 and
incorporated herein by reference.
10.2 Second Amended and Restated Agreement of Limited Partnership
of the Operating Partnership. Filed with Registrant's Annual
Report on Form 10-K for the year ended December 31, 1997 and
incorporated herein by reference.
**10.3 Employment Agreement between AOPP and Ronald L. Havner,
Jr. dated as of December 23, 1997. Filed with Registrant's
Registration Statement No. 333-45405 and incorporated herein by
reference.
**10.4 Employment Agreement between AOPP and Mary Jayne Howard
dated as of December 23, 1997. Filed with Registrant's
Registration Statement No. 333-45405 and incorporated herein by
reference.
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* Compensatory benefit plan.
** Management contract.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
PS BUSINESS PARKS, INC.
By: /S/ DAVID GOLDBERG
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David Goldberg
Vice President
Date: April 1, 1998
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Exhibit 3.1
RESTATED ARTICLES OF INCORPORATION
OF
PUBLIC STORAGE PROPERTIES XI, INC.
[As Filed in the office of the Secretary of State
of the State of California March 17, 1998]
David Goldberg and David P. Singelyn certify that:
1. They are the Vice President and Assistant Secretary, respectively,
of Public Storage Properties XI, Inc., a California corporation (the
"Corporation").
2. The Articles of Incorporation of this Corporation are amended and
restated to read in full as follows:
I
The name of this corporation is PS BUSINESS PARKS, INC.
II
The purpose of this corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of California other than the banking business, the trust company business or
the practice of a profession permitted to be incorporated by the California
Corporations Code.
III
3.01 This corporation is authorized to issue only three classes of
shares to be designated respectively "Preferred Stock," "Common Stock" and
"Equity Stock" and referred to herein either as Preferred Stock or Preferred
shares, Common Stock or Common shares or Equity Stock or Equity shares. The
total number of shares which this corporation is authorized to issue is Two
Hundred Fifty Million (250,000,000); the number of Preferred shares shall be
Fifty Million (50,000,000) of the par value of One Cent ($.01) each, the number
of Common shares shall be One Hundred Million (100,000,000) of the par value of
One Cent ($.01) each and the number of Equity shares shall be One Hundred
Million (100,000,000) of the par value of One Cent ($.01) each. Upon the
amendment of this article to read as herein set forth, each outstanding share of
Common Stock Series A is converted into or reconstituted as one share of Common
Stock.
3.02 The Preferred shares may be issued from time to time in one or
more series. The Board of Directors is authorized to fix the number of shares of
any series of Preferred shares and to determine the designation of any such
series. The Board of Directors is also authorized to determine or alter the
rights granted to or imposed upon any wholly unissued series of Preferred shares
including the dividend rights, dividend rate, conversion rights, voting rights,
rights and terms of redemption (including sinking fund provisions), the
redemption price or prices and the liquidation preference, and, within the
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limits and restrictions stated in any resolution or resolutions of the Board of
Directors originally fixing the number of shares constituting any series, to
increase or decrease (but not below the number of shares then outstanding) the
number of shares of any such series subsequent to the issue of shares of that
series. In case the number of shares of any series shall be so decreased, the
shares constituting such decrease shall resume the status which they had prior
to the adoption of the resolution originally fixing the number of shares of such
series.
3.03 (a) Subject to any preference with respect to the Preferred shares
or the Equity shares, the Common shares shall be entitled to distributions out
of funds legally available therefor, when, as and if declared by the Board of
Directors.
(b) In the event of any liquidation, dissolution or winding up of
this corporation, whether voluntary or involuntary, subject to any preference
with respect to the Preferred shares or the Equity shares, the entire assets of
this corporation available for distribution to shareholders shall be distributed
ratably among the Common shares.
3.04 The Equity shares may be issued from time to time in one or more
series. The Board of Directors is authorized to fix the number of shares of any
series of Equity shares and to determine the designation of any such series. The
Board of Directors is also authorized to determine or alter the rights granted
to or imposed upon any wholly unissued series of Equity shares including the
dividend rights, dividend rate, conversion rights, voting rights, rights and
terms of redemption (including sinking fund provisions), the redemption price or
prices and the liquidation rights, and, within the limits and restrictions
stated in any resolution or resolutions of the Board of Directors originally
fixing the number of shares constituting any series, to increase or decrease
(but not below the number of shares then outstanding) the number of shares of
any such series subsequent to the issue of shares of that series. In case the
number of shares of any series shall be so decreased, the shares constituting
such decrease shall resume the status which they had prior to the adoption of
the resolution originally fixing the number of shares of such series. The
dividend and liquidation rights of the Equity shares shall be junior to the
Preferred shares and may be senior to, junior to, or pari passu with, the Common
shares.
IV
4.01 Ownership Limitations
(a) Basic Ownership Limits. Except as provided in Section 4.01(b)
and Section 4.03, no Person shall Beneficially Own shares of Common Stock or any
series of Preferred Stock or Equity Stock in excess of the Ownership Limit set
forth in this Section 4.01(a). In the case of Common Stock, the Ownership Limit
is 2.0% of the outstanding shares of Common Stock. In the case of any series of
Preferred Stock or Equity Stock, the Ownership Limit is 9.9% of the outstanding
shares of such series of Preferred Stock or Equity Stock.
(b) Certain Exceptions. The limitation set forth in Section
4.01(a) shall apply only to a Transfer of Stock or other event with respect to
Stock occurring subsequent to the effective date of the merger of American
Office Park Properties, Inc. with and into this corporation. Notwithstanding
anything to the contrary in this Section 4.01, no Person shall be deemed to
exceed the Ownership Limit set forth in Section 4.01(a) solely by reason of the
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Beneficial Ownership of shares of any class of Stock to the extent such shares
of Stock were Beneficially Owned by such Person on the effective date of the
merger of American Office Park Properties, Inc. with and into this corporation
(but the Beneficial Ownership of any such shares of Stock shall be taken into
account in determining whether any subsequent Transfer or other event violates
Section 4.01(a)). For purposes of the preceding sentence, in evaluating
Beneficial Ownership of any Person on the effective date of the merger, there
shall also be taken into account Beneficial Ownership of any shares that would
have been Beneficially Owned on that date if redemption rights provided in the
Operating Partnership Agreement had been exercised at that time (whether or not
then exercisable) resulting in an exchange of partnership units for shares. In
addition, no Person shall be deemed to exceed the Ownership Limit set forth in
Section 4.01(a) solely by reason of the Beneficial Ownership of shares of any
class of Stock that are treated as owned because of such Person's actual or
Beneficial Ownership of shares of Public Storage, Inc., to the extent that such
Person's actual or Beneficial Ownership of shares of Public Storage, Inc.
complies with the ownership restrictions applicable to shareholders of Public
Storage, Inc. (but the Beneficial Ownership of any such shares of Stock because
of such Person's actual or Beneficial Ownership of shares of Public Storage,
Inc. shall be taken into account in determining whether any other Transfer,
Acquisition or other event violates Section 4.01(a)).
(c) No Ownership Producing "Closely Held" Status. Notwithstanding
any other provisions contained in the corporation's Articles of Incorporation,
no Person shall Beneficially Own shares of any class of Stock of this
corporation to the extent that, if effective, such Beneficial Ownership would
result in this corporation being "closely held" within the meaning of Section
856(h) of the Code (without regard to whether the ownership interest is
purportedly held during the second half of a taxable year) or otherwise would
result in this corporation failing to qualify as a REIT.
(d) Application to Partnership Exchange Rights. It is expressly
intended that the restrictions on ownership and transfer described in this
Article IV shall apply to the redemption rights provided in the Operating
Partnership Agreement. Notwithstanding any provisions of the Operating
Partnership Agreement or any related agreements to the contrary, partners of the
Partnership shall not be entitled to exchange interests in the Partnership for
Stock to the extent the Beneficial Ownership of those shares would violate the
restrictions otherwise contained in this Article IV (taking into account the
provisions of Section 4.01(b)).
4.02 Remedies
(a) Transfers in Trust. If, notwithstanding the other provisions
contained in this Article IV, at any time after the effective date of the merger
of American Office Park Properties, Inc. with and into this corporation, there
is a purported Transfer or other event that, if effective, would result in the
violation of one or more of the restrictions on ownership and transfer described
in Section 4.01, then that number of shares of Stock the Beneficial Ownership of
which otherwise would cause such Person to violate Section 4.01 (rounded up to
the next whole share) shall be automatically transferred to a Charitable Trust
for the benefit of a Charitable Beneficiary, as described in Section 4.08,
effective as of the close of business on the day immediately prior to the date
of such purported Transfer or other event, and such Person shall acquire no
rights in such shares of Stock.
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(b) Void Ab Initio. If the transfer to the Charitable Trust
described in Section 4.02(a) would not be effective for any reason to prevent
any Person from Beneficially Owning Stock in violation of Section 4.01, then the
Transfer or other event that would otherwise cause such Person to violate
Section 4.01 shall be void ab initio.
(c) No Ownership by Less than 100 Persons. Notwithstanding any
other provision of the corporation's Articles of Incorporation, any Transfer of
shares of Stock (whether or not such Transfer is the result of a transaction
engaged in through the facilities of the Exchange or any other automated
inter-dealer quotation system) that, if effective, would result in the Stock
being owned beneficially by less than 100 persons (determined under the
principles of Section 856(a)(5) of the Code) shall be void ab initio, and the
intended transferee shall acquire no rights in such shares of Stock.
(d) Other Actions. In addition to, and without limitation by,
Section 4.02(a) through (c) above, if the Board of Directors or its designees
shall at any time determine in good faith that a Transfer or other event has
taken place in violation of Article IV or that a Person intends to acquire or
has attempted to acquire, ownership, beneficial ownership (determined under the
principles of Section 856(a)(5) of the Code) or Beneficial Ownership of any
Stock in violation of Article IV (whether or not the violation is intended), the
Board of Directors or its designees shall take such action as it deems advisable
to refuse to give effect to or to prevent such Transfer or other event,
including, but not limited to, causing this corporation to redeem Stock, refuse
to give effect to such Transfer or other event on the books of this corporation
or instituting proceedings to enjoin such Transfer or other event; provided,
however, that any Transfer or attempted Transfer or other event in violation of
Section 4.01 shall automatically result in the transfer to the Charitable Trust
described in Section 4.02(a), without regard to any action (or non-action) by
the Board of Directors, and if applicable, such Transfer or other event shall be
void ab initio as provided above without regard to any action or inaction by the
Board of Directors or its designees.
(e) No Limit on Authority. Nothing contained in this Section 4.02
shall limit the authority of the Board of Directors to take such other action as
it deems necessary or advisable to protect this corporation and the interests of
its stockholders by preservation of this corporation's status as a REIT.
4.03 Waivers and Exceptions
(a) Board May Grant Exceptions. Subject to Section 4.01(c), the
Board of Directors, in its sole and absolute discretion, may grant to any Person
an exception to the Ownership Limit set forth in Section 4.01(a) with respect to
Common Stock or any series of Preferred Stock or Equity Stock if the Board of
Directors shall have determined that this corporation would not be "closely
held" within the meaning of Section 856(h) of the Code (without regard to
whether the purported Acquisition, Transfer or other event takes place during
the second half of a taxable year) and would not otherwise fail to qualify as a
REIT, after giving effect to an acquisition by such Person of Beneficial
Ownership of the maximum amount of Common Stock, Preferred Stock and Equity
Stock permitted as a result of the exception to be granted, and taking into
account the existing and permitted ownership by other Persons of the Stock of
this corporation (taking into account any other exceptions granted under this
Section 4.03(a)). If a member of the Board of Directors requests that the Board
of Directors grant an exception to the Ownership Limit with respect to such
member or with respect to any other Person if such member of the Board of
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Directors would be considered to be the Beneficial Owner of shares of Stock
owned by such Person, such member of the Board of Directors shall not
participate in the decision of the Board of Directors as to whether to grant any
such exception.
(b) Conditions to Exceptions. As a condition to the granting of an
exception under Section 4.03(a) to any Person, the Board of Directors may
require such Person to provide the Board of Directors such representations and
undertakings as the Board of Directors may, in its sole and absolute discretion,
require (including, without limitation, an agreement as to a reduced Ownership
Limit for such Person with respect to the Beneficial Ownership of one or more
other classes of Stock not subject to the exception), and such Person must agree
that any violation of such representations and undertakings or attempted
violations will result in the application of the remedies set forth in Section
4.02 with respect to shares of Stock producing the violation or attempted
violation. In addition, prior to granting any exception, the Board of Directors
may require a ruling from the IRS or an opinion of counsel, in either case in
form and substance satisfactory to the Board of Directors, in its sole and
absolute discretion as it may deem necessary or advisable in order to determine
or ensure this corporation's status as a REIT, provided, however, that obtaining
a favorable ruling or opinion shall not be required for the Board of Directors
to grant an exception.
4.04 Certain Definitions
Unless the context otherwise requires, the terms defined in this
Section 4.04 shall have, for all purposes, the meanings specified below (with
terms defined in the singular having comparable meanings when used in the
plural).
"Beneficial Ownership" shall mean ownership of Common Stock or
Preferred Stock or Equity Stock by a Person, whether the interest in the shares
of Stock is held directly or indirectly (including by a nominee), and shall
include interests that would be treated as owned through the application of
Section 544 of the Code, as modified by Section 856(h)(1)(B) of the Code. The
terms "Beneficial Owner," "Beneficially Owns," and "Beneficially Owned" shall
have correlative meanings.
"Charitable Beneficiary" shall mean one or more beneficiaries of the
Charitable Trust as determined pursuant to Section 4.08, provided that each such
organization must be described in Section 501(c)(3) of the Code and
contributions to each such organization must be eligible for deduction under
each of Sections 170(b)(1)(A), 2055, and 2522 of the Code.
"Charitable Trust" shall mean the trust created pursuant to Section
4.08(a).
"Charitable Trustee" shall mean the Person that is initially appointed
by this corporation, or any successor subsequently designated by this
corporation, to serve as trustee of the Charitable Trust provided that such
Person is unaffiliated with this corporation or the Purported Owner.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Exchange" shall mean the New York Stock Exchange or the American Stock
Exchange.
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"IRS" shall mean the United States Internal Revenue Service.
"Market Price" shall mean, with respect to any class or series of
Stock, the last reported sales price on the Exchange of such shares on the day
immediately preceding the relevant date, or if such shares are not then traded
on the Exchange, the last reported sales price of such shares on the day
immediately preceding the relevant date as reported on any exchange or quotation
system or for which such shares may be traded, provided, however, that if the
Board of Directors determines in good faith that a lower price is appropriate,
then the Market Price shall be such lower price as determined in good faith by
the Board of Directors, or if such shares are not then traded over any exchange
or quotation system, the Market Price shall be the price determined in good
faith by the Board of Directors of this corporation as the fair market value of
shares on the relevant date.
"Operating Partnership Agreement" shall mean that certain Agreement of
Limited Partnership of American Office Park Properties, L.P. dated January 1,
1997, as amended from time to time.
"Ownership Limit" shall mean the maximum amount of Common Stock and/or
Preferred Stock and/or Equity Stock that may be Beneficially Owned by a Person
under Section 4.01(a), determined without regard to any exception or waiver that
may be granted under Section 4.03 (but taking into account ownership permitted
under Section 4.01(b)).
"Person" shall mean an individual, corporation, partnership, limited
liability company, estate, trust (including a trust qualified under Section
401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside
for or to be used exclusively for the purposes described in Section 642(c) of
the Code, association, private foundation within the meaning of Section 509(a)
of the Code, joint stock company or other entity; but does not include, to the
extent appropriate to facilitate a public offering or private placement of
Stock, an underwriter that participates in such a public offering or private
placement provided that the ownership of Stock by such underwriter would not
result in this corporation being "closely held" within the meaning of Section
856(h) of the Code and would not otherwise result in this corporation failing to
qualify as a REIT.
"Purported Owner" shall mean, with respect to any purported Acquisition
that would result in a violation of the limitations in Section 4.01, the Person
who would have owned shares of Stock if such Acquisition had been valid under
Section 4.01 and, if appropriate in the context, shall also mean any Person who
would have been the record owner of the shares that the Purported Owner would
have so owned.
"REIT" shall mean a "real estate investment trust" within the meaning
of Section 856 of the Code.
"Stock" shall mean shares of stock of this corporation that are Common
Stock or Preferred Stock or Equity Stock.
"Transfer" shall mean any issuance, sale, transfer, gift, assignment,
devise or other disposition of Stock, as well as any other event that causes a
Person to acquire Beneficial Ownership, including (i) the granting or exercise
of any option or warrant, convertible security, pledge, security interest, or
similar right to acquire Stock or entering into any agreement for the sale,
transfer or other disposition of Stock or (ii) the sale, transfer, assignment or
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other disposition of any securities (or rights convertible into or exchangeable
for Stock), (iii) a change in the capital structure of the corporation, (iv) a
change in the relationship between two or more Persons that causes a change in
ownership of Stock by application of Section 544 of the Code, as modified by
Section 856(h), or (v) Transfers of interests in other entities that result in
changes in Beneficial Ownership of Stock; in each case, whether voluntarily or
involuntarily, whether owned of record or beneficially or Beneficially, and
whether by operation of law or otherwise. (For purposes of this Article 4, the
right of a limited partner under the Operating Partnership Agreement to require
the partnership to redeem the partner's limited partnership units shall not be
considered to be an option or similar right to acquire Stock.)
4.05 Reporting of Transfers and Ownership
(a) Notice of Restricted Transfers. Any Person who acquires or attempts
or intends to acquire Stock or other securities in violation of Article IV or
any Person who is a transferee in a Transfer or is otherwise affected by an
event other than a Transfer that results in a violation of Article IV, shall
immediately give written notice to this corporation of such event, or in the
case of such a proposed or attempted event, give at least 15 days prior written
notice to this corporation of such event, and shall provide to this corporation
such other information as this corporation may request in order to determine the
effect, if any, of such acquisition, ownership or other event on this
corporation's status as a REIT and to ensure compliance with the limitations set
forth in this Article IV.
(b) Owners Required to Provide Information. From and after the
effective date of the merger of American Office Park Properties, Inc. with and
into this corporation, each Person who is a beneficial owner or Beneficial Owner
of Stock and each Person (including the stockholder of record) who is holding
Stock for a Beneficial Owner shall provide to this corporation such information
as this corporation may request, in good faith, in order to determine this
corporation's status as a REIT, to ensure compliance with the limitations set
forth in this Article IV, to comply with the requirements of any taxing
authority or governmental agency, or to determine any such compliance.
4.06 Ambiguity
In the case of an ambiguity or uncertainty in the interpretation or
application of any of the provisions of this Article IV, including any
definition contained in Section 4.04, the Board of Directors shall have the
power to determine the interpretation or application of the provisions with
respect to any situation based on the facts known to it. The value of
outstanding shares of any class or series of the Stock of the Corporation may be
determined by the Board of Directors in good faith, and any such determination
shall be conclusive. If any provision of Article IV requires an action by the
Board of Directors but does not provide specific guidance with respect to such
action, the Board of Directors shall have the power to determine the action to
be taken so long as such action is not contrary to the provisions of Article IV.
4.07 Legend
Each certificate for shares of any class of Stock shall bear
substantially the following legend or such other legend as the corporation may
from time-to-time determine to be appropriate:
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"The shares of Stock represented by this certificate are subject to
restrictions on ownership and transfer for the purpose of assisting
this corporation to maintain its status as a Real Estate Investment
Trust under the Internal Revenue Code of 1986, as amended. Except as
set forth in Article IV of this corporation's Articles of
Incorporation, no person may Beneficially Own (i) more than 2.0% of the
outstanding shares of Common Stock of this corporation, or (ii) more
than 9.9% of the outstanding shares of any series of Preferred Stock or
Equity Stock of this corporation, with certain further restrictions and
exceptions as are set forth in this corporation's Articles of
Incorporation. Any Person who attempts to own or Beneficially Own Stock
in excess of the above limitations must notify this corporation in
writing at least 15 days prior to such attempt. If any of the
restrictions on transfer or ownership set forth in Article IV of the
Articles of Incorporation are violated, the Stock represented hereby
will be automatically transferred to the Charitable Trustee of a
Charitable Trust for the benefit of a Charitable Beneficiary pursuant
to the terms of Article IV of the Articles of Incorporation. In
addition, attempted transfers of Stock in violation of the limitations
described above (as modified or expanded upon in Article IV of the
Articles of Incorporation), may be void ab initio. All capitalized
terms in this legend have the meanings defined in this corporation's
Articles of Incorporation, as the same may be amended from time to
time. This corporation will furnish to the holder hereof, upon request
and without charge, a complete written statement of the terms and
conditions of Article IV of the Articles of Incorporation. Requests for
such documents may be directed to the corporate secretary."
4.08 Transfer of Stock in Trust
(a) Ownership in Trust; Status of Shares Held in Charitable Trust. Upon
any purported Transfer (whether or not such Transfer is the result of a
transaction engaged in through the facilities of the Exchange or any other
automated inter-dealer quotation system) or other event that results in the
transfer of Stock to a Charitable Trust pursuant to Section 4.02, such shares of
Stock shall be deemed to have been transferred to the Charitable Trustee in its
capacity as Charitable Trustee for the exclusive benefit of one or more
Charitable Beneficiaries. Each Charitable Beneficiary shall be designated by
this corporation as provided in Section 4.08(f). Shares of Stock so held in
Charitable Trust shall remain issued and outstanding shares of Stock of the
Corporation and shall be entitled to the same rights and privileges on identical
terms and conditions as are all other issued and outstanding shares of Stock of
the same class and series.
The Purported Owner shall not benefit economically from ownership of
any shares of Stock held in Charitable Trust by the Charitable Trustee, shall
have no rights to dividends and shall not possess any rights to vote or other
rights attributable to the shares held in Charitable Trust. The Purported Owner
of shares of Stock in violation of Section 4.01 shall have no claim, cause of
action, or any other recourse whatsoever against the purported transferor of
such shares.
(b) Distribution and Dividend Rights. The Charitable Trustee shall have
all rights to distributions and dividends with respect to shares of Stock held
in the Charitable Trust, which rights shall be exercised for the exclusive
benefit of the Charitable Beneficiary. Any distributions or dividend declared
but unpaid shall be paid when due to the Charitable Trustee. Any distributions
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or dividends paid prior to the discovery by this corporation that the shares of
Stock have been transferred to the Charitable Trustee with respect to such
shares shall be paid over to the Charitable Trustee by the recipient upon
demand. The corporation may take all measures that it determines reasonably
necessary to recover the amount of any such distribution, including, if
necessary, withholding any portion of future distributions payable on shares of
Stock of the Purported Owner or amounts otherwise payable to the Purported Owner
(such as pursuant to Section 4.08(d)); and, as soon as reasonably practicable
following the corporation's receipt or withholding thereof, shall pay over to
the Charitable Trustee, the distributions so received or withheld, as the case
may be. Any distributions or dividends so paid over to the Charitable Trustee
shall be held in trust for the Charitable Beneficiary.
(c) Rights upon Liquidation. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of or any distribution of the
assets of this corporation, the Charitable Trustee shall be entitled to receive,
ratably with each other holder of Stock of the class or series of Stock that is
held in the Charitable Trust, that portion of the assets of this corporation
available for distribution to the holders of such class or series (determined
based upon the ratio that the number of shares of such class or series of Stock
held by the Charitable Trustee bears to the total number of shares of such class
or series of Stock then outstanding). The Charitable Trustee shall distribute
any such assets received in respect of the Stock held in the Charitable Trust in
any liquidation, dissolution or winding up of, or distribution of the assets of
the Corporation in accordance with Section 4.08(d).
(d) Sale of Shares by Charitable Trustee. As reasonably promptly as
possible after receiving notice from this corporation that shares of Stock have
been transferred to the Charitable Trust, in an orderly fashion so as not to
affect the Market Price of the shares held in the Charitable Trust materially
and adversely, the Charitable Trustee shall sell the shares held in Charitable
Trust to a Person, designated by the Charitable Trustee, whose ownership of the
shares of Stock held in the Charitable Trust would not violate the ownership
limitations set forth in Section 4.01. Upon such sale, the interest of the
Charitable Beneficiary in the shares sold shall terminate and the Charitable
Trustee shall distribute the net proceeds of the sale to the Purported Owner and
to the Charitable Beneficiary as provided in this Section 4.08(d).
The Charitable Trustee shall first pay all reasonable expenses of the
Charitable Trust and of the corporation incurred in connection with the
formation of the Charitable Trust and disposition of the shares. The Purported
Owner shall receive out of any excess the lesser of (1) (x) the price per share
such Purported Owner paid for the Stock in the purported Transfer that resulted
in the transfer of shares of Stock to the Charitable Trust, or (y) if the
Transfer or other event that resulted in the transfer of shares of Stock to the
Charitable Trust was not a transaction in which the Purported Owner gave full
value for such shares of Stock, a price per share equal to the Market Price on
the date of the purported Transfer or other event that resulted in the transfer
of such shares of Stock to the Charitable Trust and (2) the price per share
received by the Charitable Trustee from the sale or other disposition of the
shares held in the Charitable Trust. Any net sales proceeds in excess of the
amount payable to the Purported Owner shall be immediately paid to the
Charitable Beneficiary.
If, prior to the discovery by this corporation that shares of Stock
have been transferred to the Charitable Trustee, such shares are sold by the
Purported Owner, then (i) such shares shall be deemed to have been sold on
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behalf of the Charitable Trust and (ii) to the extent that the Purported Owner
received an amount for such shares that exceeds the amount such Purported Owner
was entitled to receive pursuant to this Section 4.08(d), such excess shall be
paid to the Charitable Trustee upon demand.
The Charitable Trustee shall have the right and power (but not the
obligation) to offer any share of Stock held in the Charitable Trust for sale to
this corporation on such terms and conditions as the Charitable Trustee shall
determine appropriate.
Each Charitable Beneficiary and Purported Owner waive any and all
claims that they may have against the Charitable Trustee and the corporation
arising out of the disposition of shares, except for claims arising out of the
gross negligence or willful misconduct of such Charitable Trustee or the
corporation, or the Charitable Trustee's or the corporation's failure to make
payments in accordance with Section 4.08.
(e) Voting and Notice Rights. The Charitable Trustee shall have all
voting rights and rights to receive any notice of any meetings, which rights
shall be exercised for the exclusive benefit of the Charitable Beneficiary. The
Purported Owner shall have no voting rights with respect to shares held in
Charitable Trust. Any vote by or on behalf of a Purported Owner as a holder of
shares of Stock prior to the discovery by the corporation that the shares of
Stock have been transferred to the Charitable Trust shall be subject to
rescission by the Charitable Trustee if the rescission is permitted by
applicable law and the Board of Directors concludes that the rescission will not
materially and adversely affect the corporation. In the case of any such
rescission, to the extent permitted by applicable law, any such votes shall be
void ab initio with respect to the shares held by the Charitable Trustee.
Notwithstanding the provisions of this Article IV, until the
corporation has received notification that shares of Stock have been transferred
to the Charitable Trustee, the corporation shall be entitled to rely on its
share transfer and other stockholder records for purposes of preparing lists of
stockholders entitled to vote at meetings, determining the validity and
authority of proxies and otherwise conducting votes of stockholders.
(f) Designation of Charitable Beneficiary(ies). By written notice to
the Charitable Trustee, this corporation shall designate one or more nonprofit
organizations to be the Charitable Beneficiary of the interest in the Charitable
Trust such that (1) the shares of Stock held in the Charitable Trust would not
violate the restrictions set forth in Section 4.01 in the hands of such
Charitable Beneficiary and (2) each Charitable Beneficiary is described in
Section 501(c)(3) of the Code and contributions to each such organization must
be eligible for deduction under each of Sections 170(b)(1)(A), 2055, and 2522 of
the Code.
4.09 Settlement
Nothing in this Article IV shall preclude the settlement of any
transaction entered into through the facilities of the Exchange (but the fact
that settlement of a transaction is permitted shall not negate the effect of any
other provision and all of the provisions shall apply to the purported
transferee of the shares of Stock in such transaction).
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V
The liability of directors of the corporation for monetary damages
shall be eliminated to the fullest extent permissible under California law.
VI
The corporation is authorized to provide indemnification of agents (as
defined in Section 317 of the California Corporations Code) through bylaw
provisions, agreements with agents, vote of shareholders or disinterested
directors or otherwise, in excess of the indemnification otherwise permitted by
Section 317 of the California Corporations Code, subject only to the applicable
limits set forth in Section 204 of the California Corporations Code with respect
to actions for breach of duty to the corporation and its shareholders.
3. The foregoing amendment has been approved by the Board of Directors
of the Corporation.
4. The foregoing amendment has been approved by the required vote of
the shareholders of the Corporation in accordance with Section 902 of the
General Corporation Law of California. The total number of outstanding shares
entitled to vote with respect to the foregoing amendment was 1,819,937 shares of
Common Stock Series A, 184,453 shares of Common Stock Series B and 522,618
shares of Common Stock Series C. The number of shares voting in favor of the
foregoing amendment equaled or exceeded the vote required; such required vote
being a majority of the combined outstanding shares of Common Stock Series A,
Common Stock Series B and Common Stock Series C voting together as a single
class, and a majority of the outstanding shares of Common Stock Series A voting
as a separate class.
5. Subsequent to the vote of the corporation's shareholders, all of the
outstanding shares of Common Stock Series B and Common Stock Series C were
cancelled or converted into Common Stock Series A.
We further declare under penalty of perjury under the laws of the State
of California that the matters set forth in this Certificate are true and
correct of our own knowledge.
Date: March 17, 1998
/s/ DAVID GOLDBERG
--------------------------------------
David Goldberg, Vice President
/S/ DAVID P. SINGELYN
--------------------------------------
David P. Singelyn, Assistant Secretary
11
Exhibit 3.2
RESTATED BYLAWS
OF PS BUSINESS PARKS, INC.
ADOPTED ON MARCH 17, 1998
ARTICLE I
Definitions
Section 1. "Bylaws" shall mean these bylaws as amended, restated or
modified from time to time. References in these bylaws to "hereof," "herein" and
"hereunder" shall be deemed to refer to these bylaws and shall not be limited to
the particular article or section in which such words appear.
Section 2. "Code" shall mean the Internal Revenue Code of 1986, as now
enacted or hereafter amended, or successor statutes and regulations promulgated
thereunder.
Section 3. "Independent Directors" shall mean directors who are not
affiliated with the corporation or any of its affiliates (other than by reason
of the person's status as a director of the corporation), whether by ownership
of, ownership interest in, employment by, service as an officer of, or material
business or professional relationship with the corporation or its affiliates.
Section 4. "REIT" and "real estate investment trust" shall mean a real
estate investment trust as defined in Sections 856 to 860 of the Code.
Section 5. "Securities of the corporation" shall mean any securities
issued by the corporation.
Section 6. "Shareholders" shall mean, as of any particular time, all
holders of record of outstanding shares at such time.
Section 7. "shares" shall mean shares of the common stock of the
corporation.
Section 8. General. Whenever a term is defined in these bylaws in the
singular, the plural of such term may also be used in these bylaws as a defined
term and, similarly, whenever a term is defined in the plural, the singular of
such term may also be used as a defined term hereunder.
ARTICLE II
Offices
Section 1. Principal Executive Office. The principal executive office
for the transaction of the business of the corporation is hereby fixed and
located at 701 Western Avenue, in the City of Glendale, County of Los Angeles,
State of California. The Board of Directors may change the principal executive
office from one location to another. Any such change shall be noted on the
bylaws opposite this section, or this section may be amended to state the new
location.
<PAGE>
Section 2. Other Offices. The board of directors may at any time
establish branch or subordinate offices at any place or places where the
corporation is qualified to do business.
ARTICLE III
Meetings of Shareholders
Section 1. Place of Meetings. Meetings of shareholders shall be held at
any place within or outside the State of California designated by the board of
directors. In the absence of any such designation, shareholders' meetings shall
be held at the principal executive office of the corporation.
Section 2. Annual Meeting. The annual meeting of shareholders shall be
held each year on a date and at a time designated by the board of directors. The
date so designated shall be within fifteen (15) months after the last annual
meeting. At each annual meeting directors shall be elected and any other proper
business may be transacted.
Section 3. Special Meeting. A special meeting of the shareholders may
be called at any time by the board of directors, or by the chairman of the
board, or by the president, or by one or more shareholders holding shares in the
aggregate entitled to cast not less than ten percent (10%) of the votes at that
meeting.
If a special meeting is called by any person or persons other than the
board of directors, the request shall be in writing, specifying the time of such
meeting and the general nature of the business proposed to be transacted, and
shall be delivered personally or sent by registered mail or by telegraphic or
other facsimile transmission to the chairman of the board, the president, any
vice president or the secretary of the corporation. The officer receiving the
request shall cause the notice to be promptly given to the shareholders entitled
to vote, in accordance with the provisions of Sections 4 and 5 of this Article
III, that a meeting will be held at the time requested by the person or persons
calling the meeting not less than thirty-five (35) nor more than sixty (60) days
after the receipt of the request. If the notice is not given within twenty (20)
days after receipt of the request, the person or persons requesting the meeting
may give the notice. Nothing contained in this paragraph of this Section 3 shall
be construed as limiting, fixing or affecting the time when a meeting of
shareholders called by action of the board of directors may be held.
Section 4. Notice of Shareholders' Meetings. All notices of meetings of
shareholders shall be sent or otherwise given in accordance with Section 5 of
this Article III not less than ten (10) nor more than sixty (60) days before the
date of the meeting. The notice shall specify the place, date and hour of the
meeting and (i) in the case of a special meeting, the general nature of the
business to be transacted, or (ii) in the case of the annual meeting, those
matters which the board of directors, at the time of giving notice, intends to
present for action by the shareholders. The notice of any meeting at which
directors are to be elected shall include the name of any nominee or nominees
whom, at the time of the notice, management intends to present for election.
If action is proposed to be taken at any meeting for approval of (i) a
contract or transaction in which a director has a direct or indirect financial
interest within the meaning of Section 310 of the Corporations Code of
California, (ii) an amendment of the articles of incorporation pursuant to
Section 902 of the Code, (iii) a reorganization of the corporation pursuant to
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Section 1201 of that Code, (iv) a voluntary dissolution of the corporation
pursuant to Section 1900 of that Code, or (v) a distribution in dissolution
other than in accordance with the rights of outstanding preferred shares
pursuant to Section 2007 of that Code, the notice shall also state the general
nature of that proposal.
Section 5. Manner of Giving Notice; Affidavit of Notice. Notice of any
meeting of shareholders shall be given either personally or by first-class mail
or telegraphic or other written communication, charges prepaid, addressed to the
shareholder at the address of that shareholder appearing on the books of the
corporation or given by the shareholder to the corporation for the purpose of
notice. If no such address appears on the corporation's books or is so given,
notice shall be deemed to have been given if sent to that shareholder by
first-class mail or telegraphic or other written communication to the
corporation's principal executive office, or if published at least once in a
newspaper of general circulation in the county where that office is located.
Notice shall be deemed to have been given at the time when delivered personally
or deposited in the mail or sent by telegram or other means of written
communication.
If any notice addressed to a shareholder at the address of that
shareholder appearing on the books of the corporation is returned to the
corporation by the United States Postal Service marked to indicate that the
United States Postal Service is unable to deliver the notice to the shareholder
at that address, all future notices or reports shall be deemed to have been duly
given without further mailing if these shall be available to the shareholder on
written demand of the shareholder at the principal executive office of the
corporation for a period of one (1) year from the date of the giving of the
notice.
An affidavit of the mailing or other means of giving any notice of any
shareholders' meeting shall be executed by the secretary, assistant secretary or
any transfer agent of the corporation giving the notice, and shall be filed and
maintained in the minute book of the corporation.
Section 6. Quorum. The presence in person or by proxy of the holders of
a majority of the shares entitled to vote in any meeting of shareholders shall
constitute a quorum for the transaction of business. The shareholders present at
a duly called or held meeting at which a quorum is present may continue to do
business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum, if any action taken (other than
adjournment) is approved by at least a majority of the shares required to
constitute a quorum.
Section 7. Adjourned Meeting; Notice. Any shareholders' meeting, annual
or special, whether or not a quorum is present, may be adjourned from time to
time by the vote of the majority of the shares represented at that meeting,
either in person or by proxy, but in the absence of a quorum, no other business
may be transacted at that meeting, except as provided in Section 6 of this
Article III.
When any meeting of shareholders, either annual or special, is
adjourned to another time or place, notice need not be given of the adjourned
meeting if the time and place are announced at a meeting at which the
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adjournment is taken, unless a new record date for the adjourned meeting is
fixed, or unless the adjournment is for more than forty-five (45) days from the
date set for the original meeting, in which case the board of directors shall
set a new record date. Notice of any such adjourned meeting shall be given to
each shareholder of record entitled to vote at the adjourned meeting in
accordance with the provisions of Sections 4 and 5 of this Article III. At any
adjourned meeting the corporation may transact any business which might have
been transacted at the original meeting.
Section 8. Voting. The shareholders entitled to vote at any meeting of
shareholders shall be determined in accordance with the provisions of Section 11
of this Article III, subject to the provisions of Sections 702 to 704,
inclusive, of the Corporations Code of California (relating to voting shares
held by a fiduciary, in the name of a corporation or in joint ownership). The
shareholders' vote may be by voice vote or by ballot; provided, however, that
any election for directors must be by ballot if demanded by any shareholder
before the voting has begun. On any matter other than elections of directors,
any shareholder may vote part of the shares in favor of the proposal and refrain
from voting the remaining shares or vote them against the proposal, but, if the
shareholder fails to specify the number of shares which the shareholder is
voting affirmatively, it will be conclusively presumed that the shareholder's
approving vote is with respect to all shares that the shareholder is entitled to
vote. If a quorum is present, the affirmative vote of the majority of the shares
represented at the meeting and entitled to vote on any matter (other than the
election of directors) shall be the act of the shareholders, unless the vote of
a greater number or voting by classes is required by California General
Corporation Law or by the articles of incorporation or by these bylaws.
At a shareholders' meeting at which directors are to be elected, no
shareholder shall be entitled to cumulate votes (i.e., cast for any one or more
candidates a number of votes greater than the number of the shareholder's
shares) unless the candidates' names have been placed in nomination prior to
commencement of the voting and a shareholder has given notice prior to
commencement of the voting of the shareholder's intention to cumulate votes. If
any shareholder has given such a notice, then every shareholder entitled to vote
may cumulate votes for candidates in nomination and give one candidate a number
of votes equal to the number of directors to be elected multiplied by the number
of votes to which that shareholder's shares are entitled, or distribute the
shareholder's votes on the same principle among any or all of the candidates, as
the shareholder thinks fit. The candidates receiving the highest number of
votes, up to the number of directors to be elected, shall be elected.
Section 9. Waiver of Notice of Consent by Absent Shareholders. The
transactions of any meeting of shareholders, either annual or special, however
called and noticed and wherever held, shall be as valid as though had a meeting
duly held after regular call and notice, if a quorum be present either in person
or by proxy, and if, either before or after the meeting, each person entitled to
vote who was not present in person or by proxy, or who, though present, has at
the beginning of the meeting properly objected to the transaction of any
business because the meeting was not lawfully called or convened, or to
particular matters of business legally required to be included in the notice but
not so included, signs a written waiver of notice or a consent to a holding of
the meeting or an approval of the minutes. The waiver of notice or consent need
not specify either the business to be transacted or the purpose of any annual or
special meeting of shareholders, except that if action is taken or proposed to
be taken for approval of any of those matters specified in the second paragraph
of Section 4 of this Article III, the waiver of notice or consent shall state
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the general nature of the proposal. All such waivers, consents or approvals
shall be filed with the corporate records or made a part of the minutes of the
meeting.
Section 10. Shareholder Action by Written Consent Without a Meeting.
Any action which may be taken at any annual or special meeting of shareholders
may be taken without a meeting and without prior notice if a consent, in
writing, setting forth the action so taken is signed by the holders of
outstanding shares having not less than the minimum number of votes that would
be necessary to authorize or take that action at a meeting at which all shares
entitled to vote on that action were present and voted. In the case of election
of directors, such a consent shall be effective only if signed by the holders of
all outstanding shares entitled to vote for the election of directors; provided,
however, that a director may be elected at any time to fill a vacancy on the
board of directors that has not been filled by the directors by the written
consent of the holders of a majority of the outstanding shares entitled to vote
for the election of directors. All such consents shall be filed with the
secretary of the corporation and shall be maintained in the corporate records.
Any shareholder giving a written consent, or the shareholder's proxy holders, or
a transferee of the shares, or a personal representative of the shareholder or
their respective proxy holders may revoke the consent by a writing received by
the secretary of the corporation before written consents of the number of shares
required to authorize the proposed action have been filed with the secretary.
If the consents of all shareholders entitled to vote have not been
solicited in writing and if the unanimous written consent of all such
shareholders shall not have been received, the secretary shall give prompt
notice of the corporate action approved by the shareholders without a meeting.
This notice shall be given in the manner specified in Section 5 of this Article
III. In the case of approval of (i) contracts or transactions in which a
director has a direct or indirect financial interest pursuant to Section 310 of
the Corporations Code of California, (ii) indemnification of agents of the
corporation pursuant to Section 317 of that Code, (iii) a reorganization of the
corporation pursuant to Section 1201 of that Code, and (iv) a distribution in
dissolution other than in accordance with the rights of outstanding preferred
shares pursuant to Section 2007 of that Code, the notice shall be given at least
ten (10) days before the consummation of any action authorized by that approval.
Section 11. Record Date for Shareholder Notice, Voting, and Giving
Consents. For purposes of determining the shareholders entitled to notice of any
meeting or to vote or entitled to give consent to corporate action without a
meeting, the board of directors may fix, in advance, a record date which shall
not be more than sixty (60) days nor less than ten (10) days before the date of
any such meeting nor more than sixty (60) days before any such action without a
meeting, and in this event only shareholders of record on the date so fixed are
entitled to notice and to vote or to give consents, as the case may be,
notwithstanding any transfer of any shares on the books of the corporation after
the record date, except as otherwise provided in the California General
Corporation Law.
If the board of directors does not so fix a record date:
(a) The record date for determining shareholders entitled to notice of
or to vote at a meeting of shareholders shall be at the close of business on the
business day next preceding the day on which notice is given or, if notice is
waived, at the close of business on the business day next preceding the day on
which the meeting is held.
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(b) The record date for determining shareholders entitled to give
consent to corporate action in writing without a meeting (i) when no prior
action by the board has been taken, shall be the day on which the first written
consent is given, or (ii) when prior action of the board has been taken, shall
be at the close of business on the day on which the board adopts the resolution
relating to that action, or the sixtieth (60th) day before the date of such
other action, whichever is later.
Section 12. Proxies. Every person entitled to vote for directors or on
any other matter shall have the right to do so either in person or by one or
more agents authorized by a written proxy signed by the person and filed with
the secretary of the corporation. A proxy shall be deemed signed if the
shareholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission or otherwise) by the shareholder or the
shareholder's attorney-in-fact. A validly executed proxy which does not state
that it is irrevocable shall continue in full force and effect unless (i)
revoked by the person executing it, before the vote pursuant to that proxy, by a
writing delivered to the corporation stating that the proxy is revoked, or by a
subsequent proxy executed by, or attendance at the meeting and voting in person
by, the person executing the proxy; or (ii) written notice of the death or
incapacity of the maker of that proxy is received by the corporation before the
vote pursuant to that proxy is counted; provided, however, that no proxy shall
be valid after the expiration of eleven (11) months from the date of the proxy
unless otherwise provided in the proxy. The revocability of a proxy that states
on its face that it is irrevocable shall be governed by the provisions of
Sections 705(e) and 705(f) of the Corporations Code of California.
Section 13. Inspectors of Election. Before any meeting of shareholders,
the board of directors may appoint any persons other than nominees for office to
act as inspectors of election at the meeting or its adjournment. If no
inspectors of election are so appointed, the chairman of the meeting may, and on
the request of any shareholder or a shareholder's proxy shall, appoint
inspectors of election at the meeting. The number of inspectors shall be either
one (1) or three (3). If inspectors are appointed at a meeting on the request of
one or more shareholders or proxies, the holders of a majority of shares or
their proxies present at the meeting shall determine whether one (1) or three
(3) inspectors are to be appointed. If any person appointed as inspector fails
to appear or fails or refuses to act, the chairman of the meeting may, and upon
the request of any shareholder or a shareholder's proxy shall, appoint a person
to fill that vacancy.
These inspectors shall:
(a) determine the number of shares outstanding and the voting
power of each, the shares represented at the meeting, the existence of
a quorum, and the authenticity, validity and effect of proxies;
(b) receive votes, ballots or consents;
(c) hear and determine all challenges and questions in any way
arising in connection with the right to vote;
(d) count and tabulate all votes or consents;
(e) determine when the polls shall close;
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(f) determine the result; and
(g) do any other acts that may be proper to conduct the election
or vote with fairness to all shareholders.
ARTICLE IV
Directors
Section 1. Powers. Subject to the provisions of the California General
Corporation Law and any limitations in the articles of incorporation and these
bylaws relating to action required to be approved by the shareholders or by the
outstanding shares, the business and affairs of the corporation shall be managed
and all corporate powers shall be exercised by or under the direction of the
board of directors.
Without prejudice to these general powers and subject to the same
limitations, the directors shall have the power to:
(a) select and remove all officers, agents and employees of the
corporation; prescribe any powers and duties for them that are
consistent with law, with the articles of incorporation and with these
bylaws; fix their compensation; and require from them security for
faithful service.
(b) change the principal executive office or the principal
business office in the State of California from one location to
another; cause the corporation to be qualified to do business in any
other state, territory, dependency or country and conduct business
within or without the State of California; and designate any place
within or without the State of California for the holding of any
shareholders' meeting or meetings, including annual meetings.
(c) adopt, make and use a corporate seal; prescribe the forms of
certificates of stock; and alter the form of the seal and certificates.
(d) authorize the issuance of shares of stock of the corporation
on any lawful terms, in consideration of money paid, labor done,
services actually rendered, debts or securities cancelled, or tangible
or intangible property actually received.
(e) borrow money and incur indebtedness on behalf of the
corporation and cause to be executed and delivered for the
corporation's purposes, in the corporate name, promissory notes, bonds,
debentures, deeds of trust, mortgages, pledges, hypothecations and
other evidences of debt and securities.
Section 2. Number and Qualification of Directors. The number of
directors of the corporation shall be not less than five (5) nor more than nine
(9). The exact number of directors shall be seven (7) until changed, within the
limits specified above, by a bylaw amending this Section 2, duly adopted by the
board of directors or by the shareholders. The indefinite number of directors
may be changed, or a definite number fixed without provision for an indefinite
number, by a duly adopted amendment to the articles of incorporation or by an
amendment to this bylaw duly adopted by the vote or written consent of holders
of a majority of the outstanding shares entitled to vote; subject, however, to
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such additional voting requirement or limitation as is imposed under applicable
law in the case of an amendment reducing the number of directors to a number
less than five (5).
Section 3. Independent Directors. A majority of directors of the
corporation shall be Independent Directors, except for a period of 90 days after
the death, removal or resignation of an Independent Director.
Section 4. Election and Term of Office of Directors. Directors shall be
elected at each annual meeting of the shareholders to hold office until the next
annual meeting. Each director, including a director elected to fill a vacancy,
shall hold office until the expiration of the term for which elected and until a
successor has been elected and qualified.
Section 5. Vacancies. Except as otherwise agreed by the corporation,
vacancies in the board of directors may be filled by a majority of the remaining
directors, though less than a quorum, or by a sole remaining director, except
that a vacancy created by the removal of a director by the vote or written
consent of the shareholders or by court order may be filled only by the vote of
a majority of the shares entitled to vote represented at a duly held meeting at
which a quorum is present, or by the written consent of holders of a majority of
the outstanding shares entitled to vote. Each director so elected shall hold
office until the next annual meeting of the shareholders and until a successor
has been elected and qualified.
A vacancy or vacancies in the board of directors shall be deemed to
exist in the event of the death, resignation or removal of any director, or if
the board of directors by resolution declares vacant the office of a director
who has been declared of unsound mind by an order of court or convicted of a
felony, or if the authorized number of directors is increased, or if the
shareholders fail, at any meeting of shareholders at which any director or
directors are elected, to elect the number of directors to be voted for at that
meeting.
The shareholders may elect a director or directors at any time to fill
any vacancy or vacancies not filled by the directors, but any such election by
written consent shall require the consent of a majority of the outstanding
shares entitled to vote.
Any director may resign effective on giving written notice to the
chairman of the board, the president, the secretary or the board of directors,
unless the notice specifies a later time for that resignation to become
effective. If the resignation of a director is effective at a future time, the
board of directors may elect a successor to take office when the resignation
becomes effective.
No reduction of the authorized number of directors shall have the
effect of removing any director before that director's term of office expires.
Section 6. Place of Meetings and Meetings by Telephone. Regular
meetings of the board of directors may be held at any place within or outside
the State of California that has been designated from time to time by resolution
of the board. In the absence of such a designation, regular meetings shall be
held at the principal executive office of the corporation. Special meetings of
the board shall be held at any place within or outside the State of California
that has been designed in the notice of the meeting or, if not stated in the
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notice or there is no notice, at the principal executive office of the
corporation. Any meeting, regular or special, may be held by conference
telephone or similar communication equipment, so long as all directors
participating in the meeting can hear one another, and all such directors shall
be deemed to be present in person at the meeting.
Section 7. Annual Meeting. Immediately following each annual meeting of
shareholders, the board of directors shall hold a regular meeting for the
purpose of organization, any desired election of officers and the transaction of
other business. Notice of this meeting shall not be required.
Section 8. Other Regular Meetings. Other regular meetings of the board
of directors shall be held without call at such time as shall from time to time
be fixed by the board of directors. Such regular meetings may be held without
notice.
Section 9. Special Meetings. Special meetings of the board of directors
for any purpose or purposes may be called at any time by the chairman of the
board or the president or any vice president or the secretary or any two
directors.
Notice of the time and place of special meetings shall be delivered
personally or by telephone to each director or sent by first class mail or
telegram, charges prepaid, addressed to each director at that director's address
as it is shown on the records of the corporation. In case the notice is mailed,
it shall be deposited in the United States mail at least four (4) days before
the time of the holding of the meeting. In case the notice is delivered
personally or by telephone or telegram, it shall be delivered personally or by
telephone or to the telegraph company at least forty-eight (48) hours before the
time of the holding of the meeting. Any oral notice given personally or by
telephone may be communicated either to the director or to a person at the
office of the director who the person giving the notice has reason to believe
will promptly communicate it to the director. The notice need not specify the
purpose of the meeting. In addition, the place of the meeting need not be
specified if it is to be held at the principal executive office of the
corporation.
Section 10. Quorum. A majority of the authorized number of directors
shall constitute a quorum for the transaction of business, except to adjourn as
provided in Section 12 of this Article IV. Every act or decision done or made by
a majority of the directors present at a meeting duly held at which a quorum is
present shall be regarded as the act of the board of directors, subject to the
provisions of Section 310 of the Corporations Code of California (as to approval
of contracts or transactions in which a director has a direct or indirect
material financial interest), Section 311 of that Code (as to appointment of
committees), and Section 317(e) of that Code (as to indemnification of
directors). A meeting at which a quorum is initially present may continue to
transact business notwithstanding the withdrawal of directors, if any action
taken is approved by at least a majority of the required quorum for that
meeting.
Section 11. Waiver of Notice. The transactions of any meeting of the
board of directors, however called and noticed or wherever held, shall be as
valid as though had at a meeting duly held after regular call and notice if a
quorum is present and if, either before or after the meeting, each of the
directors not present or who though present or who though present has prior to
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the meeting or at its commencement protested the lack of proper notice to him,
signs a written waiver of notice, a consent to holding the meeting or an
approval of the minutes. The waiver of notice or consent need not specify the
purpose of the meeting. All such waivers, consents and approvals shall be filed
with the corporate records or made a part of the minutes of the meeting.
Section 12. Adjournment. A majority of the directors present, whether
or not constituting a quorum, may adjourn any meeting to another time and place.
Section 13. Notice of Adjournment. Notice of the time and place of
holding an adjourned meeting need not be given unless the meeting is adjourned
for more than twenty-four (24) hours, in which case notice of the time and place
shall be given before the time of the adjourned meeting in the manner specified
in Section 9 of this Article IV to the directors who were not present at the
time of the adjournment.
Section 14. Action Without Meetings. Any action required or permitted
to be taken by the board of directors may be taken without a meeting if all
members of the board shall individually or collectively consent in writing to
that action. Such action by written consent shall have the same force and effect
as a unanimous vote of the board of directors. Such written consent or consents
shall be filed with the minutes of the proceedings of the board.
Section 15. Fees and Compensation of Directors. Directors and members
of committees may receive such compensation, if any, for their services and such
reimbursement of expenses as may be fixed or determined by resolution of the
board of directors. This Section 15 shall not be construed to preclude any
director from serving the corporation in any other capacity as an officer,
agent, employee or otherwise, and receiving compensation for those services.
ARTICLE V
Committees
Section 1. Committees Of Directors. The board of directors may, by
resolution adopted by a majority of the authorized number of directors,
designate one or more committees, each consisting of two or more directors, to
serve at the pleasure of the board. The board may designate one or more
directors as alternate members of any committee who may replace any absent
member at any meeting of the committee. Any committee, to the extent provided in
the resolution of the board, shall have all the authority of the board, except
with respect to:
(a) the approval of any action which, under the General
Corporation Law of California, also requires shareholders' approval or
approval of the outstanding shares;
(b) the filling of vacancies on the board of directors or in any
committee;
(c) the fixing of compensation of the directors for serving on
the board or on any committee;
(d) the amendment or repeal of bylaws or the adoption of new
bylaws;
(e) the amendment or repeal of any resolution of the board of
directors which by its express terms is not so amendable or repealable;
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(f) a distribution to the shareholders of the corporation,
except at a rate or in a periodic amount or within a price range
determined by the board of directors; or
(g) the appointment of any other committees of the board of
directors or the members of these committees.
Section 2. Meetings and Action of Committees. Meetings and action of
committees shall be governed by, and held and taken in accordance with, the
provisions of Article IV of these bylaws, Sections 6 (place of meetings), 8
(regular meetings), 9 (special meetings and notice), 10 (quorum), 11 (waiver of
notice), 12 (adjournment), 13 (notice of adjournment), and 14 (action without
meeting), with such changes in the context of those bylaws as are necessary to
substitute the committee and its members for the board of directors and its
members, except that the time of regular meetings of committees may be
determined either by resolution of the board of directors or by resolution of
the committee; special meetings of committees may also be called by resolution
of the board of directors; and notice of special meetings of committees shall
also be given to all alternate members who shall have the right to attend all
meetings of the committee. The board of directors may adopt rules for the
government of any committee not inconsistent with the provisions of these
bylaws.
ARTICLE VI
Officers
Section 1. Officers. The officers of the corporation shall include a
president, a secretary and a chief financial officer. The corporation may also
have, at the discretion of the board of directors, a chairman of the board, one
or more vice presidents, a treasurer, one or more assistant secretaries, one or
more assistant treasurers and such other officers as may be appointed in
accordance with the provisions of Section 3 of this Article VI. If there is a
treasurer, he shall be the chief financial officer unless some other person is
so appointed by the board of directors. Any number of offices may be held by the
same person.
Section 2. Election of Officers. The officers of the corporation,
except such officers as may be appointed in accordance with the provisions of
Section 3 or Section 5 of this Article VI, shall be chosen by the board of
directors, and each shall service at the pleasure of the board, subject to the
rights, if any, of an officer under any contract of employment.
Section 3. Subordinate Officers. The board of directors may appoint,
and may empower the chairman of the board or president to appoint, such other
officers as the business of the corporation may require, each of whom shall hold
office for such period, have such authority and perform such duties as are
provided in the bylaws or as the board of directors may from time to time
determine.
Section 4. Removal and Resignation of Officer. Subject to the rights,
if any, of an officer under any contract of employment, any officer may be
removed, either with or without cause, by the board of directors, at any regular
or special meeting of the board or, except in case of an officer chosen by the
board of directors, by an officer upon whom such power of removal may be
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conferred by the board of directors. Any officer may resign at any time by
giving written notice to the corporation. Any resignation shall take effect at
the date of the receipt of that notice or at any later time specified in that
notice; and, unless otherwise specified in that notice, the acceptance of the
resignation shall not be necessary to make it effective. Any resignation is
without prejudice to the rights, if any, of the corporation under any contract
to which the officer is a party.
Section 5. Vacancies in Offices. A vacancy in any office because of
death, resignation, removal, disqualification or any other cause shall be filled
in the manner prescribed in these bylaws for regular appointments to that
office.
Section 6. Chairman of the Board. The chairman of the board, if such an
officer be elected, shall, if present, preside at meetings of the board of
directors and exercise and perform such other powers and duties as may be from
time to time assigned to him by the board of directors or prescribed by the
bylaws. If there is no president, the chairman of the board shall in addition be
the chief executive officer of the corporation and shall have the powers and
duties prescribed in Section 7 of this Article VI. The chairman of the board may
be the chief executive officer of the corporation, notwithstanding that there is
a president, if the board of directors so determines.
Section 7. President. Subject to such supervisory powers, if any, as
may be given by the board of directors to the chairman of the board, if there be
such an officer, the president shall, subject to the control of the board of
directors, have general supervision, direction and control of the business and
the officers of the corporation. In the absence of the chairman of the board, or
if there be none, he shall preside at all meetings of the shareholders and at
all meetings of the board of directors. He shall have the general powers and
duties of management usually vested in the office of president of a corporation
and shall have such powers and duties as may be prescribed by the board of
directors or the bylaws. The president shall be the chief executive officer of
the corporation unless the chairman of the board, if any, is so designated.
Section 8. Vice Presidents. In the absence or disability of the
president, the vice presidents, if any, in order of their rank as fixed by the
board of directors or, if not ranked, a vice president designated by the board
of directors, shall perform all duties of the president, and when so acting
shall have all the powers of, and be subject to all the restrictions upon, the
president. The vice presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them respectively by the
board of directors or the bylaws and the president or the chairman of the board.
Section 9. Secretary. The secretary shall keep or cause to be kept, at
the principal executive office or such other place as the board of directors may
direct, a book of minutes of all meetings and actions of directors, committees
of directors and shareholders, with the time and place of holding, whether
regular or special and, if special, how authorized, the notice given, the names
of those present at directors' meetings or committee meetings, the number of
shares present or represented at shareholders' meetings and the proceedings.
The secretary shall keep, or cause to be kept, at the principal
executive office or at the office of the corporation's transfer agent or
registrar, as determined by resolution of the board of directors, a share
register, or a duplicate share register, showing the names of shareholders and
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their addresses, the number and classes of shares held by each, the number and
date of certificates issued for the same, and the number and date of
cancellation of every certificate surrendered for cancellation.
The secretary shall give, or cause to be given, notice of all meetings
of the shareholders and of the board of directors required by the bylaws or by
law to be given, and he shall keep the seal of the corporation if one be
adopted, in safe custody, and shall have such other powers and perform such
other duties as may be prescribed by the board of directors or by the bylaws.
Section 10. Chief Financial Officer. The chief financial officer shall
keep and maintain, or cause to be kept and maintained, adequate and correct
books and records of accounts of the properties and business transactions of the
corporation, including accounts of its assets, liabilities, receipts,
disbursements, gains, losses, capital, retained earnings and shares. The books
of account shall at all reasonable times be open to inspection by any director.
The chief financial officer shall deposit all moneys and other
valuables in the name and to the credit of the corporation with such
depositories as may be designated by the board of directors. He shall disburse
the funds of the corporation as may be ordered by the board of directors, shall
render to the president and directors, whenever they request it, an account of
all of his transactions as chief financial officer and of the financial
condition of the corporation, and shall have other powers and perform such other
duties as may be prescribed by the board of directors or the bylaws.
ARTICLE VII
Indemnification
Section 1. Indemnification of Directors, Officers, Employees and Other
Agents. The corporation shall indemnify each of its agents to the maximum extent
permitted by the California General Corporation Law, as the same exists on the
date of adoption of this Article VII or may hereafter be amended or interpreted
(but in the case of any such amendment or interpretation, only to the extent
that such amendment or interpretation permits the corporation to provide broader
indemnification rights than were permitted prior to such amendment or
interpretation), against expenses, judgments, fines, settlements and other
amounts actually and reasonably incurred in connection with any proceeding
arising by reason of the fact any such person is or was an agent of the
corporation. For purposes of this Article, an "agent" of the corporation
includes any person who is or was a director, officer, employee, or other agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise, or was a director, officer, employee or
agent of a corporation which was a predecessor corporation of the corporation or
of another enterprise at the request of such predecessor corporation.
Section 2. Insurance. Upon and in the event of a determination by the
board of directors of this corporation to purchase such insurance, this
corporation shall purchase and maintain insurance on behalf of any agent of the
corporation against any liability asserted against or incurred by the agent in
such capacity or arising out of the agent's status as such whether or not this
corporation would have the obligation to indemnify the agent against that
liability under the provisions of this Article VII.
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ARTICLE VIII
Records and Reports
Section 1. Maintenance and Inspection of Share Register. The
corporation shall keep at its principal executive office, or at the office of
its transfer agent or registrar, if either be appointed and as determined by
resolution of the board of directors, a record of its shareholders, giving the
names and addresses of all shareholders, the number of shares and the class or
series of shares held by each shareholder and the number of certificates, if
any, representing the shares.
A shareholder or shareholders of the corporation holding at least five
percent (5%) in the aggregate of the outstanding voting shares of the
corporation may (i) inspect and copy the records of shareholders' names and
addresses and shareholdings during usual business hours on five (5) days prior
written demand on the corporation, and (ii) obtain from the transfer agent of
the corporation, on written demand and on the tender of such transfer agent's
usual charges for such list, a list of the shareholders' name and addresses who
are entitled to vote for the election of directors and their shareholdings as of
the most recent record date for which that list has been compiled or as of a
date specified by the shareholder after the date of demand. This list shall be
made available to any such shareholder by the transfer agent on or before the
later of five (5) days after the demand is received or the date specified in the
demand as the date as of which the list is to be compiled. The record of
shareholders shall also be open to inspection on the written demand of any
shareholder or holder of a voting trust certificate, at any time during usual
business hours, for a purpose reasonably related to the holder's interests as a
shareholder or as the holder of a voting trust certificate. Any inspection and
copying under this Section 1 may be made in person or by an agent or attorney of
the shareholder or holder of a voting trust certificate making the demand.
Section 2. Maintenance and Inspection of Bylaws. The corporation shall
keep at its principal executive office, or if its principal executive office is
not in the State of California, at its principal business office in this state,
the original or a copy of the bylaws as amended to date, which shall be open to
inspection by the shareholders at all reasonable times during office hours. If
the principal executive office of the corporation is outside the State of
California and the corporation has no principal business office in this state,
the secretary shall, upon the written request of any shareholder, furnish to
that shareholder a copy of the bylaws as amended to date.
Section 3. Maintenance and Inspection of Other Corporate Records. The
accounting books and records and minutes of proceedings of the shareholders and
the board of directors and any committee or committees of the board of directors
shall be kept at such place or places designated by the board of directors or,
in the absence of such designation, at the principal executive office of the
corporation. The minutes shall be kept in written form and the accounting books
and records shall be kept either in written form or in any other form capable of
being converted into written form. The minutes and accounting books and records
shall be open to inspection upon the written demand of any shareholder or holder
of a voting trust certificate, at any reasonable time during usual business
hours, for a purpose reasonably related to the holder's interests as a
shareholder or as the holder of a voting trust certificate. The inspection may
be made in person or by an agent or attorney and shall include the right to copy
and make extracts. These rights of inspection shall extend to the records of
each subsidiary corporation of the corporation.
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Section 4. Inspection by Director. Every director shall have the
absolute right at any reasonable time to inspect all books, records and
documents of every kind and the physical properties of the corporation and each
of its subsidiary corporations. This inspection by a director may be made in
person or by an agent or attorney and the right of inspection includes the right
to copy and make extracts of documents.
Section 5. Annual Report to Shareholders. The board of directors shall
cause an annual report to be sent to the shareholders not later than one hundred
twenty (120) days after the close of the fiscal year adopted by the corporation.
This report shall be sent at least fifteen (15) (or if sent by third-class mail,
thirty-five (35)) days before the annual meeting of shareholders to be held
during the next fiscal year and in the manner specified in Section 5 of Article
III of these bylaws for giving notice to shareholders of the corporation. The
annual report shall contain a balance sheet as of the end of the fiscal year and
an income statement and statement of changes in financial position for the
fiscal year, prepared in accordance with generally accepted accounting
principles applied on a consistent basis and accompanied by any report of
independent accountants.
Section 6. Disclosure on Distribution. Any distribution of income or
capital assets of the corporation to holders of securities of the corporation
other than its promissory notes shall be accompanied by a written statement
disclosing the source of the funds distributed. If, at the time of distribution,
this information is not available, a written explanation of the relevant
circumstances shall accompany the distribution and the written, statement
disclosing the source of the funds distributed shall be sent to such holders not
later than seventy-five (75) days after the close of the fiscal year in which
the distribution was made.
Section 7. Financial Statements. A copy of any annual financial
statement and any income statement of the corporation for each quarterly period
of each fiscal year and any accompanying balance sheet of the corporation as of
the end of each such period that has been prepared by the corporation shall be
kept on file in the principal executive office of the corporation for twelve
(12) months, and each such statement shall be exhibited at all reasonable times
to any shareholder demanding an examination of any such statement or a copy
shall be mailed to any such shareholder.
If a shareholder or shareholders holding at least five percent (5%) of
the outstanding shares of any class of stock of the corporation makes a written
request to the corporation for an income statement of the corporation for the
three-month, six-month or nine-month period of the then current fiscal year
ended more than thirty (30) days before the date of the request, and a balance
sheet of the corporation as of the end of that period, the chief financial
officer shall cause that statement to be prepared, if not already prepared, and
shall deliver personally or mail that statement or statements to the person
making the request within thirty (30) days after the receipt of the request. If
the corporation has not sent to the shareholders its annual report for the last
fiscal year, this report shall likewise be delivered or mailed to the
shareholder or shareholders within thirty (30) days after the request.
The corporation shall also, on the written request of any shareholder,
mail to the shareholder a copy of the last annual, semi-annual or quarterly
income statement which it has prepared, and a balance sheet as of the end of
that period.
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The quarterly income statements and balance sheets referred to in this
section shall be accompanied by the report, if any, of any independent
accountants engaged by the corporation or the certificate of an authorized
officer of the corporation that the financial statements were prepared without
audit from the books and records of the corporation.
Section 8. Annual Statement of General Information. The corporation
shall, during the period commencing on January 1st and ending on June 30th in
each year, file with the Secretary of State of the State of California, on the
prescribed form, a statement setting forth the authorized number of directors,
the number of vacancies on the board of directors the names and complete
business or residence addresses of all incumbent directors, the names and
complete business or residence addresses of the chief executive officer,
secretary and chief financial officer, the street address of its principal
executive office or principal business office in this state, and the general
type of business constituting the principal business activity of the
corporation, together with a designation of the agent of the corporation for the
purpose of service of process, all in compliance with Section 1502 of the
Corporations Code of California.
ARTICLE IX
General Corporate Matters
Section 1. Record Date for Purposes Other than Notice and Voting. For
purposes of determining the shareholders entitled to receive payment of any
dividend or other distribution or allotment of any rights or entitled to
exercise any rights in respect of any other lawful action (other than action by
shareholders by written consent without a meeting), the board of directors may
fix, in advance, a record date which shall not be more than sixty (60) days
before any such action, and in that case only shareholders of record on the date
so fixed are entitled to receive the dividend, distribution or allotment of
rights or to exercise the rights, as the case may be, notwithstanding any
transfer of any shares on the books of the corporation after the record date so
fixed, except as otherwise provided in the California General Corporation law.
If the board of directors does not so fix a record date, the record
date for determining shareholders for any such purpose shall be at the close of
business on the day on which the board adopts the applicable resolution or the
sixtieth (60th) day before the date of that action, whichever is later.
Section 2. Checks, Drafts, Evidence of Indebtedness. All checks, drafts
or other orders for payment of money, notes or other evidences of indebtedness,
issued in the name of or payable to the corporation, shall be signed or endorsed
by such person or persons and in such manner as set from time to time shall be
determined by resolution of the board of directors.
Section 3. Corporate Contracts and Instruments; How Executed. The board
of directors, except as otherwise provided in these bylaws, may authorize any
officer or officers, agent or agents, to enter into any contract or execute any
instrument in the name of and on behalf of the corporation, and this authority
may be general or confined to specific instances; and, unless so authorized or
ratified by the board of directors or within the agency power of an officer, no
officer, agent or employee shall have any power or authority to bind the
corporation by any contract or engagement or to pledge its credit or to render
it liable for any purpose or for any amount.
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Section 4. Certificates for Shares. Each shareholder shall be entitled
to a certificate or certificates for shares of the capital stock of the
corporation signed in the name of the corporation by the chairman of the board
or vice chairman of the board, or the president or vice president, and by the
chief financial officer or an assistant treasurer or the secretary or any
assistant secretary, certifying the number of shares and the class or series of
shares owned by the shareholder. Any or all of the signatures on the certificate
may be facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed on a certificate shall have
ceased to be that officer, transfer agent or registrar before that certificate
is issued, it may be issued by the corporation with the same effect as if that
person were an officer, transfer agent or registrar at the date of issue.
Section 5. Lost Certificates. Except as provided in this Section 5, no
new certificates for shares shall be issued to replace an old certificate unless
the latter is surrendered to the corporation and cancelled at the same time. The
board of directors may, in case any share certificate or certificate for any
other security is lost, stolen, or destroyed, authorize the issuance of a
replacement certificate on such terms and conditions as the board may require,
including provision for indemnification of the corporation secured by a bond or
other adequate security sufficient to protect the corporation against any claim
that may be made against it, including any expense or liability, on account of
the alleged loss, theft or destruction of the certificate or the issuance of the
replacement certificate.
Section 6. Representation of Shares of Other Corporations. The chairman
of the board, the president or any vice president, or any other person
authorized by resolution of the board of directors or by any of the foregoing
designated officers, is authorized to vote on behalf of the corporation any and
all shares of any other corporation or corporations, foreign or domestic,
standing in the name of the corporation. The authority granted to these officers
to vote or represent on behalf of the corporation any and all shares held by the
corporation in any other corporation or corporations may be exercised by any of
these officers in person or by any person authorized to do so by a proxy duly
executed by these officers.
Section 7. Restrictions on Transactions with Affiliates. The
corporation may engage in transactions with affiliates provided that a purchase
or sale transaction with an affiliate is (i) approved by a majority of the
corporation's Independent Directors and (ii) fair to the corporation based on an
independent appraisal or fairness opinion.
Section 8. Repurchase of Shares. The corporation may purchase or
reacquire its shares and invest its assets in its own shares, provided that in
each case the consent of the board of directors shall have been obtained.
Section 9. Provisions in Conflict with Law or Regulations. The
provisions of these bylaws are severable, and if the directors shall determine,
with the advice of counsel, that any one or more of such provisions (the
"Conflicting Provisions") are in conflict with the provisions of Section 850
through 860 of the Code or with other applicable federal or California laws and
regulations, the Conflicting Provisions shall be deemed never to have
constituted a part of these bylaws; provided, however, that such determination
by the directors shall not affect or impair any of the remaining provisions of
these bylaws or render invalid or improper any action taken or omitted
(including but not limited to the election of directors) prior to such
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determination. Such determination shall become effective when a certificate
signed by a majority of the directors setting forth any such determination and
reciting that it was duly adopted by the directors, shall be filed with the
books and records of the corporation. The directors shall not be liable for
failure to make any determination under this Section. Nothing in this Section
shall in any way limit or affect the right of the directors or the shareholders
to amend these bylaws.
Section 10. Construction. Unless the context requires otherwise, the
general provisions, rules of construction and definitions in the California
General Corporation Law shall govern the construction of these bylaws.
Section 11. Proposal for Sale or Financing of Properties. During 1997,
unless shareholders had previously approved such a proposal, the shareholders
will be presented with a proposal to approve or disapprove (a) the sale or
financing of all or substantially all of the corporation's properties and (b)
the distribution of the proceeds from such transaction and, in the case of a
sale, the liquidation of the corporation, unless the proceeds of such sale
include deferred payments, in which case the corporation would be liquidated
following receipt of all deferred payments; provided, however, that this
provision shall not be applicable if the merger of American Office Park
Properties, Inc. into the corporation is completed. This provision may not be
amended or repealed without the vote or written consent of holders of a majority
of the outstanding shares entitled to vote.
ARTICLE X
Investment Policy
Section 1. Statement of Investment Policy. The general investment
policy of the corporation shall be to engage in any lawful activity for which a
corporation may be organized under applicable law.
ARTICLE XI
Amendments
Section 1. Amendment by Shareholders. New bylaws may be adopted or
these bylaws may be amended or repealed by the vote or written consent of
holders of a majority of the outstanding shares entitled to vote; provided,
however, that if the articles of incorporation of the corporation are amended in
accordance with Section 2302 of the Corporations Code of California and if such
articles of incorporation thereafter set forth the number of authorized
directors of the corporation, the authorized number of directors may be changed
only by an amendment of the articles of incorporation.
Section 2. Amendment by Directors. Subject to the rights of the
shareholders as provided in Section 1 of this Article XI, to adopt, amend or
repeal bylaws, bylaws may be adopted, amended or repealed by the board of
directors; provided, however, that after the issuance of shares, the board of
directors may adopt a bylaw or amendment of a bylaw changing the authorized
number of directors only for the purpose of fixing the exact number of directors
within the limits specified in the articles of incorporation or in Section 2 of
Article IV of these bylaws, and provided further that bylaws relating to the
corporation's qualification as a real estate investment trust (Section 9 of
Article IX), bylaws requiring that a majority of the directors be Independent
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Directors (Section 3 of Article IV), bylaws relating to restrictions on
transactions with affiliates (Section 7 of Article IX) and bylaws relating to
restrictions on the repurchase by the corporation of its shares (Section 8 of
Article IX), may not be amended or repealed without the vote or written consent
of holders of a majority of the outstanding shares entitled to vote.
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