================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
- --------------------------------------------------------------------------------
FORM 10-Q
- --------------------------------------------------------------------------------
{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
--------------------------------------------
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ---------------- to ----------------
Commission file number 1-11550
-----------------------------------------------
Wellsford Residential Property Trust
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(Exact name of registrant as specified in its charter)
Maryland 13-3675988
- -------------------------------------- -----------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
610 Fifth Avenue, New York, NY 10020
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(Address of principal executive offices)
(Zip Code)
(212) 333-2300
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--------- --------
Number of common shares of beneficial interest, $.01 par value, outstanding as
of November 15, 1996: 17,104,359
================================================================================
<PAGE>
WELLSFORD RESIDENTIAL PROPERTY TRUST
FORM 10-Q
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INDEX
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Page
Number
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of
September 30, 1996 (unaudited)
and December 31, 1995 ...................................... 3
Consolidated Statements of Operations
(unaudited) for the three
and nine months ended September 30, 1996 and 1995 .......... 4
Consolidated Statements of Cash Flows (unaudited) for
the nine months ended September 30, 1996 and 1995 .......... 5
Notes to Consolidated Financial Statements (unaudited) ..... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ........................ 8
PART II. OTHER INFORMATION .......................................... 11
SIGNATURES ................................................. 12
2
<PAGE>
WELLSFORD RESIDENTIAL PROPERTY TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
1996 1995
------------- ------------
ASSETS (Unaudited)
Real estate assets, at cost:
Land .................................... $ 107,724,296 $ 105,121,296
Buildings and improvements .............. 621,593,451 605,087,385
------------- -------------
729,317,747 710,208,681
Less, accumulated depreciation ....... (77,391,952) (58,490,833)
------------- -------------
651,925,795 651,717,848
Construction in progress ................ 44,152,513 26,189,876
------------- -------------
696,078,308 677,907,724
Cash and cash equivalents .................. 7,979,044 29,444,008
Restricted cash ............................ 9,812,876 12,916,328
Note receivable ............................ 17,800,000 --
Deferred financing costs ................... 5,092,396 5,928,869
Prepaid and other assets ................... 3,060,521 3,441,408
------------- -------------
Total Assets ............................... $ 739,823,145 $ 729,638,337
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Senior unsecured notes .................. $ 223,446,986 $ 223,306,778
Mortgage notes payable .................. 83,299,168 77,136,941
Unsecured credit facilities ............. 26,000,000 --
Accrued expenses and other liabilities .. 10,812,069 16,403,724
Dividends payable ....................... 11,430,568 11,310,053
Security deposits ....................... 3,130,949 3,122,229
------------- -------------
Total Liabilities .......................... 358,119,740 331,279,725
------------- -------------
Commitments and contingencies .............. -- --
Shareholders' Equity:
Shares of beneficial interest,
100,000,000 shares authorized -
3,999,800 Series A Convertible
Preferred Shares, $.01 par value
per share, liquidation preference
$25 per share, issued and
outstanding; ......................... 39,998 39,998
2,300,000 Series B Preferred Shares,
$.01 par value per share, liquidation
preference $25 per share,
issued and outstanding; .............. 23,000 23,000
17,099,935 and 17,026,342 Common
Shares, $.01 par value per share,
issued and outstanding at September
30, 1996 and December 31, 1995,
respectively ......................... 170,999 170,264
Paid in capital in excess of par value .. 461,298,347 459,634,825
Distributions in excess of net income ... (72,544,562) (55,284,084)
Deferred compensation and shareholder
loans receivable ........................ (7,284,377) (6,225,391)
------------- -------------
Total Shareholders' Equity ................. 381,703,405 398,358,612
------------- -------------
Total Liabilities and Shareholders' Equity . $ 739,823,145 $ 729,638,337
============= =============
See accompanying notes.
3
<PAGE>
<TABLE>
WELLSFORD RESIDENTIAL PROPERTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Rental income .................. $ 30,867,109 $ 30,412,342 $ 91,927,097 $ 92,729,331
Other income ................... 1,422,872 1,256,973 4,188,626 3,925,625
Interest income ................ 462,684 997,042 1,036,639 1,407,961
------------ ------------ ------------ ------------
Total Revenue 32,752,665 32,666,357 97,152,362 98,062,917
------------ ------------ ------------ ------------
EXPENSES
Property operating and
maintenance ................. 10,572,609 10,946,077 30,476,387 30,416,293
Real estate taxes .............. 2,209,733 2,223,406 7,071,939 7,225,919
Depreciation and amortization .. 6,613,789 6,686,373 19,630,133 20,173,985
Property management ............ 1,078,700 1,212,780 3,450,957 3,765,085
Interest ....................... 5,745,851 7,164,290 16,908,535 21,358,191
General and administrative ..... 783,837 623,840 2,592,795 3,067,707
------------ ------------ ------------ ------------
Total Expenses .............. 27,004,519 28,856,766 80,130,746 86,007,180
------------ ------------ ------------ ------------
Gain(loss) on sale of communities . -- (162,849) -- 515,769
(Loss) on JV communities .......... (16,334) (71,154) (52,639) (300,174)
------------ ------------ ------------ ------------
Net income before extraordinary
items .......................... 5,731,812 3,575,588 16,968,977 12,271,332
Extraordinary item - (loss) on
early extinguishment of debt ... -- (5,129,364) -- (5,129,364)
------------ ------------ ------------ ------------
Net income (loss) after
extraordinary items ............ 5,731,812 (1,553,776) 16,968,977 7,141,968
Preferred dividends ............... 3,137,100 2,335,580 9,411,300 5,835,580
------------ ------------ ------------ ------------
Income (loss) available for
common shareholders ........... $ 2,594,712 $ (3,889,356) $ 7,557,677 $ 1,306,388
============ ============ ============ ============
Net income (loss) per common share
before extraordinary items .... $ 0.15 $ 0.07 $ 0.44 $ 0.38
============ ============ ============ ============
Net income (loss) per common share
after extraordinary items ..... $ 0.15 $ (0.23) $ 0.44 $ 0.08
============ ============ ============ ============
Weighted average number of common
shares outstanding ............ 17,053,683 16,944,495 17,041,029 16,921,199
============ ============ ============ ============
Cash dividends declared per common
share ......................... $ 0.485 $ 0.480 $ 1.455 $ 1.440
============ ============ ============ ============
See accompanying notes.
</TABLE>
4
<PAGE>
WELLSFORD RESIDENTIAL PROPERTY TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended September 30,
-------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES: 1996 1995
------------ ------------
Net income .............................. $ 16,968,977 $ 7,141,968
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization ........ 20,123,736 22,552,596
Amortization of deferred
compensation and shareholder loans
receivable ........................... 191,014 389,942
(Gain) loss on sale of communities ... -- (515,769)
Non-cash loss on early extinguishment
of debt .............................. -- 3,950,399
Decrease (increase) in assets
Escrow cash ....................... 59,106 1,416,760
Debt service reserve .............. 3,044,346 (1,077,327)
Rent receivables .................. (176,465) 263,266
Prepaid and other assets ......... 222,482 90,457
(Decrease) increase in liabilities
Accounts payable .................. (1,796,054) 932,170
Accrued expenses and other
liabilities ....................... (3,795,601) (2,406,278)
Security deposits ................. 8,720 29,107
------------ ------------
Net cash provided by operating
activities ........................... 34,850,261 32,767,291
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from sale of real estate
assets .................................. -- 16,633,289
Investment in real estate assets ........ (25,671,703) (16,571,243)
Investment in note receivable ........... (17,800,000) --
------------ ------------
Net cash provided by (used in)
investing activities ................. (43,471,703) 62,046
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from mortgage notes payable .... -- 794,971
Net proceeds from senior
unsecured notes.......................... -- 223,205,050
Net proceeds (payment) from credit
facilities .............................. 26,000,000 (140,000,000)
Payment of deferred financing costs ..... (96,783) (4,362,601)
Principal payments on mortgage notes .... (5,052,056) (145,547,966)
Distributions to shareholders ........... (34,108,941) (29,092,331)
Net proceeds from dividend
reinvestment plan ....................... 404,788 784,261
Net proceeds from preferred equity
offering ................................ -- 55,426,733
Net proceeds from exercise of options ... 9,470 --
------------ ------------
Net cash provided by (used in)
financing activities ................. (12,843,522) (38,791,883)
------------ ------------
Net (decrease) in cash and cash
equivalents ............................. (21,464,964) (5,962,546)
Cash and cash equivalents, beginning
of period ............................... 29,444,008 13,152,692
------------ ------------
Cash and cash equivalents, end of
period .................................. $ 7,979,044 $ 7,190,146
============ ============
SUPPLEMENTAL INFORMATION:
Cash paid during the period for
interest ................................ $ 22,123,549 $ 18,002,168
Third quarter dividends declared ........ $ 11,430,568 $ 10,471,197
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Cost of assets acquired ................. $ 17,512,162 $ --
Net cash paid ........................... (6,312,162) --
------------ ------------
Purchase money and other mortgage
notes assumed ........................... $ 11,200,000 $ --
============ ============
Net sales price of assets sold .......... $ -- $ 29,198,289
Net cash received ....................... -- (16,633,289)
------------ ------------
Note receivable ......................... $ -- $ 12,565,000
============ ============
See accompanying notes.
5
<PAGE>
WELLSFORD RESIDENTIAL PROPERTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
Wellsford Residential Property Trust and Subsidiaries (the "Company") is a
fully integrated and self administered equity real estate investment trust
("REIT") engaged in the acquisition, development and operation of
multifamily communities located in the Southwest and Pacific Northwest
regions of the United States. At September 30, 1996, the Company owned 75
multifamily communities containing 18,576 units. After the developments
completed in October 1996, described in Note 2, the Company owns 18,974
units.
The accompanying financial statements and related notes of the Company
have been prepared in accordance with generally accepted accounting
principles for interim financial reporting and the instructions to Form
10-Q and Rule 10-01 of Regulation S-X. Accordingly, certain information
and footnote disclosures normally included in financial statements
prepared under generally accepted accounting principles have been
condensed or omitted pursuant to such rule. In the opinion of management,
all adjustments considered necessary for a fair presentation of the
Company's financial position, results of operations and cash flows have
been included and are of a normal and recurring nature. These financial
statements should be read in conjunction with the Company's Annual Report
on Form 10-K for the year ended December 31, 1995.
2. Real Estate Investments
In October 1996, the Company completed two development projects. The
Village at Bear Creek II, a Denver, Colorado apartment community
contiguous to the Company's existing Bear Creek community, contains 216
units and was developed at a cost of $18.8 million, including settlement
of the developer's fixed price contract. The operations of the two Bear
Creek communities have been combined. Seeley Lake III, a Tacoma,
Washington apartment community developed as an expansion to the Company's
Village at Seeley Lake community, contains 182 units and was developed at
a cost of $9.5 million.
In July 1996, the Company originated a $17.8 million mortgage on a 344
unit, newly constructed community in Tucson, Arizona known as Sonterra at
Williams Centre (the "Sonterra Mortgage"). The Sonterra Mortgage bears
interest at 9% per annum, matures in June 1999 and provides the Company
with the exclusive option to purchase the community for $20.5 million
through December 1997 and $21 million until December 1998.
In May 1996, the Company purchased a parcel of land in Denver, Colorado
for $2.1 million. The land is located contiguous to the Company's Blue
Ridge development and will represent the second phase of the Company's
Palomino Park project.
In April 1996, the Company, through a wholly-owned subsidiary, acquired
Marks West, a multifamily community containing 280 units located in
Denver, Colorado, for approximately $18 million including the estimated
cost for certain capital improvements. The acquisition was funded from
cash on hand and the assumption of $11.2 million of tax-exempt bond
financing. During October 1996, the Company remarketed the bonds which now
bear interest at 6.65% and have a term of 30 years. The community's
operations have been combined with those of The Marks, an existing
community located contiguous to Marks West.
6
<PAGE>
WELLSFORD RESIDENTIAL PROPERTY TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. Capitalization
In October 1996, the Company drew $20 million on its unsecured credit
facility with The First National Bank of Boston (the "Bank of Boston
Credit Facility"), primarily to settle the developer's fixed price
contract on the Company's Village at Bear Creek II development upon its
completion.
In September 1996, three shareholders who are officers of the Company
purchased 54,052 of the Company's common shares at the average market
price of $23.125 per share. The Company financed these purchases with
loans that are secured by the shares, bear no interest and mature in ten
years. One twentieth of each loan will be forgiven each year for ten years
so long as the officer is still employed by the Company.
During the second and third quarters of 1996, the Company drew $26.0
million on the Bank of Boston Credit Facility to purchase a parcel of
land, fund the Sonterra Mortgage and fund certain developments.
In June 1996, the Company's Board of Trustees approved a stock repurchase
plan which authorizes the Company to repurchase up to two million common
shares. No shares have been repurchased through September 30, 1996.
In January 1996, the Company prepaid it's $4.9 million mortgage on the
community known as Parkwood East from cash on hand. This mortgage bore
interest at 9.625% and would have matured March 1996.
4. Earnings Per Share
Net income per share was calculated using the weighted average number of
shares outstanding of 17,038,070 and 16,921,199 for the nine months ended
September 30,1996 and 1995, respectively. The Company declared a common
dividend of $0.485 per common share, a Series A preferred dividend of
$0.4375 per share, and a Series B preferred dividend of $0.603125 per
share on September 17, 1996 payable to shareholders of record on September
27, 1996.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
1. General
The Company's operations consist of acquiring, developing and operating
residential multifamily communities located in the Southwest and Pacific
Northwest regions of the United States. At September 30, 1996, the Company
owned 75 multifamily communities containing 18,576 units.
Decreases in revenues and expenses in the periods compared below were due
primarily to the dispositions of seven communities containing a total of
2,245 units during 1995 (the "Disposition Communities"), offset by the
acquisition of one community in April 1996. Certain comparisons between
periods have been made on an actual basis as well as on a weighted average
per unit basis, a technique which adjusts for certain increases in
existing communities and increases or decreases related to the acquisition
or disposition of communities.
The Company currently has the following four development projects on which
it has spent $44.2 million through September 30, 1996:
Number Estimated Estimated
Name of Units Location Total Cost Completion Date
--------------- -------- -------- ------------- ----------------
Summit 150 Seattle $16.0 million December 1996
Seeley Lake III 182 Tacoma 9.5 million October 1996*
Bear Creek II 216 Denver 18.8 million October 1996*
Blue Ridge 456 Denver 42.5 million October 1997
----- ------------
1,004 $86.8 million
===== ============
* Completed in October 1996.
Two of these projects, Blue Ridge and Bear Creek Run II, are being
developed pursuant to fixed-price contracts. The Company is committed to
purchase 100% of these projects upon completion and the achievement of
certain occupancy levels, which is anticipated to occur at the dates
disclosed above.
Risks Associated with Forward-Looking Statements
------------------------------------------------
This Form 10-Q, together with other statements and information publicly
disseminated by the Company, contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Such statements are based on current expectations which involve a
number of risk factors and uncertainties, including, but not limited to,
risks associated with the acquisition, construction and development of
multifamily communities, including the risk of an over-supply of apartment
units or a reduction in the demand for such units, risks associated with
construction and lease-up delays, budget over-runs, risks that the
Company's acquisition and development communities will fail to perform as
expected, financing risks, such as the availability of debt or equity
financing in the future and the risk of increasing costs of such
financing, as well as other risks listed from time to time in the
Company's reports filed with the SEC. Therefore, actual results could
differ materially from those projected in such statements.
8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
2. Results of Operations
Comparison of the nine months ended September 30, 1996 to the nine months
ended September 30, 1995.
Rental income decreased by $0.8 million or 1%. $3.9 million of decrease
represents 1995 rental income from the Disposition Communities, which is
offset by $0.9 million of rental income from the community acquired in
1996 and by occupancy and rental rate increases on other communities. On a
per unit basis, rental income increased from $4,708 to $4,998 or 6% due
primarily to increases in rental rates and dispositions of communities
with lower per unit rents than the currently owned communities. Revenues
for the 75 communities which were owned during the first nine months of
1995 and 1996 increased by 3%. Average occupancy increased from 94.0% to
94.7%. Occupancy for the 75 communities owned during the first nine months
of both 1995 and 1996 decreased from 95.0% to 94.7%.
Other income increased by $0.3 million or 7%. $0.1 million of decrease
represents 1995 other income from the Disposition Communities. On a per
unit basis, other income increased from $199 to $228 or 15%, due primarily
to increases in lease cancellation fees related to residents leaving to
acquire homes.
Interest income decreased by $0.4 million due primarily to higher cash
balances in the third quarter of 1995, when proceeds of the Company's
senior unsecured notes issued in August 1995 were temporarily invested.
As a result of the above changes, total revenues decreased from $98.1
million to $97.2 million or 1%. On a per unit basis, total revenue
increased from $4,979 to $5,282 (or from $553 to $587 per unit per month)
or 6%.
Property operating and maintenance expenses increased by $0.1 million or
less than 1%. $2.0 million of increase is a result of increased turnover
costs and repair and maintenance costs. The overall increase is net of
$1.9 million of decrease which represents 1995 property operating and
maintenance expenses from the Disposition Communities. On a per unit
basis, these expenses increased from $1,544 to $1,657 or 7% due primarily
to the sale of communities having lower per unit operating costs than the
currently owned communities, as well as the increased costs just
described.
Real estate taxes decreased by $0.2 million or 2%. This decrease is
primarily attributable to the sale of the Disposition Communities. On a
per unit basis, real estate taxes increased from $367 to $384 or 5% due
primarily to increases in assessed values in certain cities.
Property management expense decreased by $0.3 million or 8%. $0.2 million
of decrease represents 1995 property management expense related to the
Disposition Communities. On a per unit basis, property management expense
decreased from $191 to $188 or 2% due primarily to lower costs associated
with the internalization of the Company's property management services,
which were previously contracted out to third parties.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
Interest expense decreased by $4.4 million or 21%. This decrease is
primarily the result of reduced interest from the repayment of debt with
proceeds of the Series B Preferred Share issuance and with proceeds from
the sales of the Disposition Communities during 1995.
General and administrative expenses decreased by $0.5 million. On a per
unit basis, this expense decreased from $156 to $141 or 10%. This decrease
is primarily the result of decreased compensation for certain executive
officers.
Depreciation and amortization decreased by $0.5 million or 3% due
primarily to the disposition of communities.
3. Liquidity and Capital Resources
The Company expects to meet its short-term liquidity requirements
generally through its working capital and cash flow provided by
operations. The Company considers its ability to generate cash to be
adequate and expects it to continue to be adequate to meet operating
requirements and shareholder distributions in accordance with REIT
requirements both in the short and long terms.
The Company expects to meet its long-term liquidity requirements such as
refinancing mortgages, financing acquisitions and development, and
financing capital improvements by long-term borrowings through the
issuance of debt and the offering of additional debt and equity
securities.
The Company has a $150 million unsecured revolving credit facility from
The First National Bank of Boston (the "Bank of Boston Credit Facility").
At September 30, 1996, $26 million was outstanding on the Bank of Boston
Credit Facility leaving $124 million undrawn. A net additional $17
million was drawn through November 14 leaving $107 million undrawn. The
Bank of Boston Credit Facility may be used for financing acquisitions,
development, capital expenditures, repayment of indebtedness and working
capital purposes.
The Company has received a ruling from the Internal Revenue Service
allowing participants in the Company's Dividend Reinvestment and Share
Purchase Plan ("DRIP") to make optional cash purchases of the Company's
common shares at a 3% discount from Market Price (as defined in the DRIP).
10
<PAGE>
PART II.
OTHER INFORMATION
Item 1:Legal Proceedings-Not Applicable.
Item 2:Changes in Securities-Not Applicable.
Item 3:Defaults upon Senior Securities-Not Applicable.
Item 4:Submission of Matters to a Vote of Security Holders-Not Applicable.
Item 5:Other Information-Not Applicable.
Item 6:Exhibits and Reports on Form 8-K
(a) Exhibits filed with this Form 10-Q:
3.1 Amended and Restated Bylaws
27.1 Financial Data Schedule (EDGAR Filing Only)
(b) No report on Form 8-K was filed by the registrant
during its fiscal quarter ended September 30, 1996.
11
<PAGE>
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 thereunto duly authorized.
WELLSFORD RESIDENTIAL PROPERTY TRUST
By: /s/ Jeffrey H. Lynford
-------------------------------------------------------------
Jeffrey H. Lynford, Chairman of the Board
/s/ Gregory F. Hughes
-------------------------------------------------------------
Gregory F. Hughes, Vice President and Chief Financial Officer
Dated: November 15, 1996
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from
the consolidated balance sheets and consolidated statements of operations
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000892291
<NAME> Wellsford Residential Property Trust
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 17,791,920
<SECURITIES> 0
<RECEIVABLES> 625,009
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 20,852,441
<PP&E> 773,470,260
<DEPRECIATION> 77,391,952
<TOTAL-ASSETS> 739,823,145
<CURRENT-LIABILITIES> 25,373,586
<BONDS> 332,746,154
0
62,998
<COMMON> 170,999
<OTHER-SE> 381,469,408
<TOTAL-LIABILITY-AND-EQUITY> 739,823,145
<SALES> 0
<TOTAL-REVENUES> 97,152,362
<CGS> 0
<TOTAL-COSTS> 40,999,283
<OTHER-EXPENSES> 19,682,772
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 16,908,535
<INCOME-PRETAX> 16,968,977
<INCOME-TAX> 0
<INCOME-CONTINUING> 16,968,977
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,968,977
<EPS-PRIMARY> 0.44
<EPS-DILUTED> 0.44
</TABLE>
WELLSFORD RESIDENTIAL PROPERTY TRUST
AMENDED AND RESTATED BYLAWS
----------------------------
Dated: June 19, 1996
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office of the Trust
shall be located at such place or places as the Trustees may designate.
Section 2. ADDITIONAL OFFICES. The Trust may have additional
offices at such places as the Trustees may from time to time determine or the
business of the Trust may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE. All meetings of shareholders shall be held at the
principal office of the Trust or at such other place within the United States
as shall be stated in the notice of the meeting.
Section 2. ANNUAL MEETING. An annual meeting of the shareholders
for the election of Trustees and the transaction of any business within the
powers of the Trust shall be held during the second calendar quarter of each
year on a date and at the time set by the Trustees, beginning with the year
1993.
Section 3. SPECIAL MEETINGS. The chairman of the board or the
president or one-third of the Trustees may call special meetings of the
shareholders. Special meetings of shareholders shall also be called by the
secretary upon the written request of the holders of shares entitled to cast
not less than a majority of all the votes entitled to be cast at such meeting.
Such request shall state the purpose of such meeting and the matters proposed
to be acted on at such meeting. The secretary shall inform such shareholders
of the reasonably estimated cost of preparing and mailing notice of the meeting
and, upon payment to the Trust of such costs, the secretary shall give notice
to each shareholder entitled to notice of the meeting. Unless requested by
shareholders entitled to cast a majority of all the votes entitled to be cast
at such meeting, a special meeting need not be called to consider any matter
which is substantially the same as a matter voted on at any special meeting of
the shareholders held during the preceding twelve months.
Section 4. NOTICE. Not less than ten nor more than 90 days before
each meeting of shareholders, the secretary shall give to each shareholder
entitled to vote at such meeting and to each shareholder not
entitled to vote who is entitled to notice of the meeting written or printed
notice stating the time and place of the meeting and, in the case of a special
meeting or as otherwise may be required by statute, the purpose for which the
meeting is called, either by mail or by presenting it to such shareholder
personally or by leaving it at his residence or usual place of business. If
mailed, such notice shall be deemed to be given when deposited in the United
States mail addressed to the shareholder at his post office address as it
appears on the records of the Trust, with postage thereon prepaid.
Section 5. SCOPE OF NOTICE. Any business of the Trust may be
transacted at an annual meeting of shareholders without being specifically
designated in the notice, except such business as is required by statute to be
stated in such notice. No business shall be transacted at a special meeting of
shareholders except as specifically designated in the notice.
Section 6. QUORUM. At any meeting of shareholders, the presence in
person or by proxy of shareholders entitled to cast a majority of all the votes
entitled to be cast at such meeting shall constitute a quorum; but this section
shall not affect any requirement under any statute or the Declaration of Trust
for the vote necessary for the adoption of any measure. If, however, such
quorum shall not be present at any meeting of the shareholders, the
shareholders entitled to vote at such meeting, present in person or by proxy,
shall have power to adjourn the meeting from time to time to a date not more
than 120 days after the original record date without notice other than
announcement at the meeting. At such adjourned meeting at which a quorum shall
be present, any business may be transacted which might have been transacted at
the meeting as originally notified.
Section 7. VOTING. A plurality of all the votes cast at a meeting
of shareholders duly called and at which a quorum is present shall be
sufficient to elect a Trustee. Each share may be voted for as many individuals
as there are Trustees to be elected and for whose election the share is
entitled to be voted. A majority of the votes cast at a meeting of
shareholders duly called and at which a quorum is present shall be sufficient
to approve any other matter which may properly come before the meeting, unless
more than a majority of the votes cast is required by statute or by the
Declaration of Trust. Unless otherwise provided in the Declaration of Trust,
each outstanding share, regardless of class, shall be entitled to one vote on
each matter submitted to a vote at a meeting of shareholders.
Section 8. PROXIES. A shareholder may vote the shares owned of
record by him, either in person or by proxy executed in writing by the
shareholder or by his duly authorized attorney in fact. Such proxy shall be
filed with the secretary of the Trust before or at the time of the meeting. No
proxy shall be valid after eleven months from the date of its execution, unless
otherwise provided in the proxy.
Section 9. VOTING OF SHARES BY CERTAIN HOLDERS. Shares registered
in the name of a corporation, partnership, trust or other entity, if entitled
to be voted, may be voted by the president or a vice president, a general
partner or trustee thereof, as the case may be, or a proxy appointed by any of
the foregoing individuals, unless some other person who has been appointed to
vote such shares pursuant to a bylaw or a resolution of the board of directors
of such corporation or other entity presents a certified copy of such bylaw or
resolution, in which case such person may vote such shares. Any trustee or
other fiduciary may vote shares registered in his name as such fiduciary,
either in person or by proxy.
Shares of the Trust directly or indirectly owned by it shall not be
voted at any meeting and shall not be counted in determining the total number
of outstanding shares entitled to be voted at any given time, unless they are
held by it in a fiduciary capacity, in which case they may be voted and shall
be counted in determining the total number of outstanding shares at any given
time.
The Trustees may adopt by resolution a procedure by which a
shareholder may certify in writing to the Trust that any shares registered in
the name of the shareholder are held for the account of a specified person
other than the shareholder. The resolution shall set forth the class of
shareholders who may make the certification, the purpose for which the
certification may be made, the form of certification and the information to be
contained in it; if the certification is with respect to a record date or
closing of the share transfer books, the time after the record date or closing
of the share transfer books within which the certification must be received by
the Trust; and any other provisions with respect to the procedure which the
Trustees consider necessary or desirable. On receipt of such certification,
the person specified in the certification shall be regarded as, for the
purposes set forth in the certification, the shareholder of record of the
specified shares in place of the shareholder who makes the certification.
Notwithstanding any other provision of the Declaration of Trust or
these Bylaws, Title 3, Subtitle 7 of the Corporations and Associations Article
of the Annotated Code of Maryland (or any successor statute) shall not apply to
any acquisition by any person of shares of beneficial interest of the Trust.
Section 10. INSPECTORS. At any meeting of shareholders, the
chairman of the meeting may, or upon the request of any shareholder shall,
appoint one or more persons as inspectors for such meeting. Such inspectors
shall ascertain and report the number of shares represented at the meeting
based upon their determination of the validity and effect of proxies, count all
votes, report the results and perform such other acts as are proper to conduct
the election and voting with impartiality and fairness to all the shareholders.
Each report of an inspector shall be in writing and signed by him or
by a majority of them if there is more than one inspector acting at such
meeting. If there is more than one inspector, the report of a majority shall
be the report of the inspectors. The report of the inspector or inspectors on
the number of shares represented at the meeting and the results of the voting
shall be prima facie evidence thereof.
Section 11. REPORTS TO SHAREHOLDERS.
(a) At or before the convening of the annual meeting of the Trust's
shareholders, the Trustees shall deliver or cause to be delivered a report of
the business and operations of the Trust during such fiscal year to the
shareholders, containing a balance sheet and a statement of income and surplus
of the Trust, accompanied by the certification of an independent certified
public accountant, and such further information as the Trustees may determine
is required pursuant to any law or regulation to which the Trust is subject.
Not later than the earlier of 20 days after the annual meeting of shareholders
or 120 days after the end of the fiscal year, the Trust shall file a copy of
such annual report at the Trust's principal office.
(b) Not later than 45 days after the end of each of the first three
quarterly periods of each fiscal year, the Trustees shall deliver or cause to
be delivered an interim report to the shareholders containing unaudited
financial statements for such quarter and for the period from the beginning of
the fiscal year to the end of such quarter, and such further information as the
Trustees may determine is required pursuant to any law or regulation to which
the Trust is subject.
Section 12. NOMINATIONS AND SHAREHOLDER BUSINESS.
(a) Annual Meetings of Shareholders. (1) Nominations of persons
for election to the Board of Trustees and the proposal of business to be
considered by the shareholders may be made at an annual meeting of shareholders
(i) pursuant to the Trust's notice of meeting, (ii) by or at the direction of
the Trustees or (iii) by any shareholder of the Trust who was a shareholder of
record at the time of giving of notice provided for in this Section 12(a), who
is entitled to vote at the meeting and who complied with the notice procedures
set forth in this Section 12(a).
(2) For nominations or other business to be properly brought
before an annual meeting by a shareholder pursuant to clause (iii) of paragraph
(a)(1) of this Section 12, the shareholder must have given timely notice
thereof in writing to the secretary of the Trust. To be timely, a
shareholder's notice shall be delivered to the secretary at the principal
executive offices of the Trust not less than 60 days nor more than 90 days
prior to the first anniversary of the preceding year's annual meeting;
provided, however, that in the event that the date of the annual meeting is
advanced by more than 30 days or delayed by more than 60 days from such
anniversary date, notice by the shareholder to be timely must be so delivered
not earlier than the 90th day prior to such annual meeting and not later than
the close of business on the later of the 60th day prior to such annual meeting
or the tenth day following the day on which public announcement of the date of
such meeting is first made. Such shareholder's notice shall set forth (i) as
to each person whom the shareholder proposes to nominate for election or
reelection as a Trustee all information relating to such person that is
required to be disclosed in solicitations of proxies for election of Trustees,
or is otherwise required, in each case pursuant to Regulation 14A under the
Exchange Act (including such person's written consent to being named in the
proxy statement as a nominee and to serving as a Trustee if elected); (ii) as
to any other business that the shareholder proposes to bring before the
meeting, a brief description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting and any
material interest in such business of such shareholder and of the beneficial
owner, if any, on whose behalf the proposal is made; and (iii) as to the
shareholder giving the notice and the beneficial owner, if any, on whose behalf
the nomination or proposal is made, (x) the name and address of such
shareholder, as they appear on the Trust's books, and of such beneficial owner
and (y) the class and number of shares of the Trust which are owned
beneficially and of record by such shareholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of
paragraph (a)(2) of this Section 12 to the contrary, in the event that the
number of Trustees to be elected to the Board of Trustees is increased and
there is no public announcement naming all of the nominees for Trustee or
specifying the size of the increased Board of Trustees made by the Trust at
least 70 days prior to the first anniversary of the preceding year's annual
meeting, a shareholder's notice required by this Section 12(a) shall also be
considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the secretary at the
principal executive offices of the Trust not later than the close of business
on the tenth day following the day on which such public announcement is first
made by the Trust.
(b) Special Meetings of Shareholders. Only such business shall be
conducted at a special meeting of shareholders as shall have been brought
before the meeting pursuant to the Trust's notice of meeting. Nominations of
persons for election to the Board of Trustees may be made at a special meeting
of shareholders at which Trustees are to be elected pursuant to the Trust's
notice of meeting (i) by or at the direction of the Board of Trustees or (ii)
provided that the Board of Trustees has determined that Trustees shall be
elected at such special meeting, by any shareholder of the Trust who is a
shareholder of record at the time of giving of notice provided for in this
Section 12(b), who is entitled to vote at the meeting and who complied with the
notice procedures set forth in this Section 12(b). In the event the Trust
calls a special meeting of shareholders of the purpose of electing one or more
Trustees to the Board of Trustees, any such shareholder may nominate a person
or persons (as the case may be) for election to such position as specified in
the Trust's notice of meeting, if the shareholder's notice required by
paragraph (a)(2) of this Section 12(b) shall be delivered to the secretary at
the principal executive offices of the Trust not earlier than the 90th day
prior to such special meeting and not later than the close of business on the
later of the 60th day prior to such special meeting or the tenth day following
the day on which public announcement is first made of the date of the special
meeting and of the nominees proposed by the Trustees to be elected at such
meeting.
(c) General. (1) Only such persons who are nominated in accordance
with the procedures set forth in this Section 12 shall be eligible to serve as
Trustees and only such business shall be conducted at a meeting of shareholders
as shall have been brought before the meeting in accordance with the procedures
set forth in this Section 12. The presiding officer of the meeting shall have
the power and duty to determine whether a nomination or any business proposed
to be brought before the meeting was made in accordance with the procedures set
forth in this Section 12 and, if any proposed nomination or business is not in
compliance with this Section 12, to declare that such defective nomination or
proposal be disregarded.
(2) For purposes of this Section 12, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones New Service,
Associated Press or comparable news service or in a document publicly filed by
the Trust with the Securities and Exchange Commission pursuant to Sections 13,
14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section
12, a shareholder shall also comply with all applicable requirements of state
law and of the Exchange Act and the rules and regulations thereunder with
respect to the matters set forth in this Section 12. Nothing in this Section
12 shall be deemed to affect any rights of shareholders to request inclusion of
proposals in the Trust's proxy statement pursuant to Rule 14a-8 under the
Exchange Act.
Section 13. INFORMAL ACTION BY SHAREHOLDERS. Any action required or
permitted to be taken at a meeting of shareholders may be taken without a
meeting if a consent in writing, setting forth such action, is signed by each
shareholder entitled to vote on the matter and any other shareholder entitled
to notice of a meeting of shareholders (but not to vote thereat) has waived in
writing any right to dissent from such action, and such consent and waiver are
filed with the minutes of proceedings of the shareholders.
Section 14. VOTING BY BALLOT. Voting on any question or in any
election may be viva voce unless the presiding officer shall order or any
shareholder shall demand that voting be by ballot.
ARTICLE III
TRUSTEES
Section 1. GENERAL POWERS; QUALIFICATIONS. The business and affairs
of the Trust shall be managed under the direction of its Board of Trustees. A
Trustee shall be an individual at least 21 years of age who is not under legal
disability.
Section 2. ANNUAL AND REGULAR MEETINGS. An annual meeting of the
Trustees shall be held immediately after and at the same place as the annual
meeting of shareholders, no notice other than this Bylaw being necessary. The
Trustees may provide, by resolution, the time and place, either within or
without the State of Maryland, for the holding of regular meetings of the
Trustees without other notice than such resolution.
Section 3. SPECIAL MEETINGS. Special meetings of the Trustees may
be called by or at the request of the chairman of the board or the president or
by a majority of the Trustees then in office. The person or persons authorized
to call special meetings of the Trustees may fix any place, either within or
without the State of Maryland, as the place for holding any special meeting of
the Trustees called by them.
Section 4. NOTICE. Notice of any special meeting shall be given by
written notice delivered personally, telegraphed or mailed to each Trustee at
his business or residence address or by telephone. Personally delivered or
telegraphed notices shall be given at least two days prior to the meeting.
Notice by mail shall be given at least five days prior to the meeting.
Telephone notice shall be given at least 24 hours prior to the meeting. If
mailed, such notice shall be deemed to be given when deposited in the United
States mail properly addressed, with postage thereon prepaid. If given by
telegram, such notice shall be deemed to be given when the telegram is
delivered to the telegraph company. Telephone notice shall be deemed given
when the Trustee is personally given such notice in a telephone call to which
he is a party. Neither the business to be transacted at, nor the purpose of,
any annual, regular or special meeting of the Trustees need be stated in the
notice unless specifically required by statute or these Bylaws.
Section 5. QUORUM. A majority of the Trustees shall constitute a
quorum for transaction of business at any meeting of the Trustees, provided
that, if less than a majority of such Trustees are present at said meeting, a
majority of the Trustees present may adjourn the meeting from time to time
without further notice, and provided further that if, pursuant to the
Declaration of Trust or these Bylaws, the vote of a majority of a particular
group of Trustees is required for action, a quorum must also include a majority
of such group.
The Trustees present at a meeting which has been duly called and
convened may continue to transact business until adjournment, notwithstanding
the withdrawal of enough Trustees to leave less than a quorum.
Section 6. VOTING. The action of the majority of the Trustees
present at a meeting at which a quorum is present shall be the action of the
Trustees, unless the concurrence of a greater proportion is required for such
action by applicable statute.
Section 7. TELEPHONE MEETINGS. Trustees may participate in a
meeting by means of a conference telephone or similar communications equipment
if all persons participating in the meeting can hear each other at the same
time. Participation in a meeting by these means shall constitute presence in
person at the meeting.
Section 8. INFORMAL ACTION BY TRUSTEES. Any action required or
permitted to be taken at any meeting of the Trustees may be taken without a
meeting, if a consent in writing to such action is signed by each Trustee and
such written consent is filed with the minutes of proceedings of the Trustees.
Section 9. VACANCIES. If for any reason any or all of the Trustees
cease to be Trustees, such event shall not terminate the Trust or affect these
Bylaws or the powers of the remaining Trustees hereunder (even if fewer than
three Trustees remain). Any vacancy (including a vacancy created by an
increase in the number of Trustees) shall be filled, at any regular meeting or
at any special meeting called for that purpose, by a majority of the Trustees.
Any individual so elected as Trustee shall hold office for the unexpired term
of the Trustee he is replacing.
Section 10. COMPENSATION. Trustees shall not receive any stated
salary for their services as Trustees but, by resolution of the Trustees, fixed
sums per year and/or per meeting. Expenses of attendance, if any, may be
allowed to Trustees for attendance at each annual, regular or special meeting
of the Trustees or of any committee thereof; but nothing herein contained shall
be construed to preclude any Trustees from serving the Trust in any other
capacity and receiving compensation therefor.
Section 11. REMOVAL OF TRUSTEES. The shareholders may, at any time,
remove any Trustee in the manner provided in the Declaration of Trust.
Section 12. LOSS OF DEPOSITS. No Trustee shall be liable for any
loss which may occur by reason of the failure of the bank, trust company,
savings and loan association, or other institution with whom moneys or shares
have been deposited.
Section 13. SURETY BONDS. Unless required by law, no Trustee shall
be obligated to give any bond or surety or other security for the performance
of any of his duties.
Section 14. RELIANCE. Each Trustee, officer, employee and agent of
the Trust shall, in the performance of his duties with respect to the Trust, be
fully justified and protected with regard to any act or failure to act in
reliance in good faith upon the books of account or other records of the Trust,
upon an opinion of counsel or upon reports made to the Trust by any of its
officers or employees or by the adviser, accountants, appraisers or other
experts or consultants selected by the Trustees or officers of the Trust,
regardless of whether such counsel or expert may also be a Trustee.
Section 15. CERTAIN RIGHTS OF TRUSTEES, OFFICERS, EMPLOYEES AND
AGENTS. The Trustees shall have no responsibility to devote their full time to
the affairs of the Trust. Any Trustee or officer, employee or agent of the
Trust, in his personal capacity or in a capacity as an affiliate, employee, or
agent of any other person, or otherwise, may have business interests and engage
in business activities similar to or in addition to those of or relating to the
Trust.
ARTICLE IV
COMMITTEES
Section 1. NUMBER, TENURE AND QUALIFICATIONS. The Trustees may
appoint from among its members an Executive Committee, an Audit Committee and
other committees, composed of two or more Trustees, to serve at the pleasure of
the Trustees.
Section 2. POWERS. The Trustees may delegate to committees
appointed under Section 1 of this Article any of the powers of the Trustees,
except as prohibited by law.
Section 3. MEETINGS. In the absence of any member of any such
committee, the members thereof present at any meeting, whether or not they
constitute a quorum, may appoint another Trustee to act in the place of such
absent member.
Section 4. TELEPHONE MEETINGS. Members of a committee of the
Trustees may participate in a meeting by means of a conference telephone or
similar communications equipment if all persons participating in the meeting
can hear each other at the same time. Participation in a meeting by these
means shall constitute presence in person at the meeting.
Section 5. INFORMAL ACTION BY COMMITTEES. Any action required or
permitted to be taken at any meeting of a committee of the Trustees may be
taken without a meeting, if a consent in writing to such action is signed by
each member of the committee and such written consent is filed with the minutes
of proceedings of such committee.
ARTICLE V
OFFICERS
Section 1. GENERAL PROVISIONS. The officers of the Trust may
consist of a chairman of the board, a vice chairman of the board, a president,
one or more vice presidents, a treasurer, one or more assistant treasurers, a
secretary, and one or more assistant secretaries. In addition, the Trustees
may from time to time appoint such other officers with such powers and duties
as they shall deem necessary or desirable. The officers of the Trust shall be
elected annually by the Trustees at the first meeting of the Trustees held
after each annual meeting of shareholders. If the election of officers shall
not be held at such meeting, such election shall be held as soon thereafter as
may be convenient. Each officer shall hold office until his successor is
elected and qualifies or until his death, resignation or removal in the manner
hereinafter provided. Any two or more offices except president and vice
president may be held by the same person. In their discretion, the Trustees
may leave unfilled any office except that of president and secretary. Election
of an officer or agent shall not of itself create contract rights between the
Trust and such officer or agent.
Section 2. REMOVAL AND RESIGNATION. Any officer or agent of the
Trust may be removed by the Trustees if in their judgment the best interests of
the Trust would be served thereby, but such removal shall be without prejudice
to the contract rights, if any, of the person so removed. Any officer of the
Trust may resign at any time by giving written notice of his resignation to the
Trustees, the chairman of the board, the president or the secretary. Any
resignation shall take effect at any time subsequent to the time specified
therein or, if the time when it shall become effective is not specified
therein, immediately upon its receipt. The acceptance of a resignation shall
not be necessary to make it effective unless otherwise stated in the
resignation.
Section 3. VACANCIES. A vacancy in any office may be filled by the
Trustees for the balance of the term.
Section 4. CHIEF EXECUTIVE OFFICER. The Trustees may designate a
chief executive officer from among the elected officers. The chief executive
officer shall have responsibility for implementation of the policies of the
Trust, as determined by the Trustees, and for the administration of the
business affairs of the Trust.
Section 5. CHIEF OPERATING OFFICER. The Trustees may designate a
chief operating officer from among the elected officers. Said officer will
have the responsibilities and duties as set forth by the Trustees or the chief
executive officer.
Section 6. CHIEF FINANCIAL OFFICER. The Trustees may designate a
chief financial officer from among the elected officers. Said officer will
have the responsibilities and duties as set forth by the Trustees or the chief
executive officer.
Section 7. CHAIRMAN AND VICE CHAIRMAN OF THE BOARD. The chairman of
the board shall preside over the meetings of the Trustees and of the
shareholder at which he shall be present and shall in general oversee all of
the business and affairs of the Trust. In the absence of the chairman of the
board, the vice chairman of the board shall preside at such meetings at which
he shall be present. The chairman and the vice chairman of the board may
execute any deed, mortgage, bond, contract or other instrument, except in cases
where the execution thereof shall be expressly delegated by the Trustees or by
these Bylaws to some other officer or agent of the Trust or shall be required
by law to be otherwise executed. The chairman of the board and the vice
chairman of the board shall perform such other duties as may be assigned to him
or them by the Trustees.
Section 8. PRESIDENT. In the absence of both the chairman and the
vice chairman of the board, the president shall preside over the meetings of
the Trustees and of the shareholders at which he shall be present. In the
absence of a designation of a chief executive officer by the Trustees, the
president shall be the chief executive officer and shall be ex officio a member
of all committees that may, from time to time, be constituted by the Trustees.
The president may execute any deed, mortgage, bond, contract or other
instrument, except in cases where the execution thereof shall be expressly
delegated by the Trustees or by these Bylaws to some other officer or agent of
the Trust or shall be required by law to be otherwise executed; and in general
shall perform all duties incident to the office of president and such other
duties as may be prescribed by the Trustees from time to time.
Section 9. VICE PRESIDENTS. In the absence of the president or in
the event of a vacancy in such office, the vice president (or in the event
there be more than one vice president, the vice presidents in the order
designated at the time of their election or, in the absence of any designation,
then in the order of their election) shall perform the duties of the president
and when so acting shall have all the powers of and be subject to all the
restrictions upon the president; and shall perform such other duties as from
time to time may be assigned to him by the president or by the Trustees. The
Trustees may designate one or more vice presidents as executive vice president
or as vice president for particular areas of responsibility.
Section 10. SECRETARY. The secretary shall (a) keep the minutes of
the proceedings of the shareholders, the Trustees and committees of the
Trustees in one or more books provided for that purpose; (b) see that all
notices are duly given in accordance with the provisions of these Bylaws or as
required by law; (c) be custodian of the trust records and of the seal of the
Trust; (d) keep a register of the post office address of each shareholder which
shall be furnished to the secretary by such shareholder; (e) have general
charge of the share transfer books of the Trust; and (f) in general perform
such other duties as from time to time may be assigned to him by the president
or by the Trustees.
Section 11. TREASURER. The treasurer shall have the custody of the
funds and securities of the Trust and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Trust and shall deposit
all moneys and other valuable effects in the name and to the credit of the
Trust in such depositories as may be designated by the Trustees.
He shall disburse the funds of the Trust as may be ordered by the
Trustees, taking proper vouchers for such disbursements, and shall render to
the president and Trustees, at the regular meetings of the Trustees or whenever
they may require it, an account of all his transactions as treasurer and of the
financial condition of the Trust.
If required by the Trustees, he shall give the Trust a bond in such
sum and with such surety or sureties as shall be satisfactory to the Trustees
for the faithful performance of the duties of his office and for the
restoration to the Trust, in case of his death, resignation, retirement or
removal from office, all books, papers, vouchers, moneys and other property of
whatever kind in his possession or under his control belonging to the Trust.
Section 12. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The
assistant secretaries and assistant treasurers, in general, shall perform such
duties as shall be assigned to them by the secretary or treasurer,
respectively, or by the president or the Trustees. The assistant treasurer
shall, if required by the Trustees, give bonds for the faithful performance of
their duties in such sums and with such surety or sureties as shall be
satisfactory to the Trustees.
Section 13. SALARIES. The salaries of the officers shall be fixed
from time to time by the Trustees and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a Trustee.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. CONTRACTS. The Trustees may authorize any officer or
agent to enter into any contract or to execute and deliver any instrument in
the name of and on behalf of the Trust and such authority may be general or
confined to specific instances. Any agreement, deed, mortgage, lease or other
document executed by one or more of the Trustees or by an authorized person
shall be valid and binding upon the Trustees and upon the Trust when authorized
or ratified by action of the Trustees.
Section 2. CHECKS AND DRAFTS. All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness issued in
the name of the Trust shall be signed by such officer or officers, agent or
agents of the Trust and in such manner as shall from time to time be determined
by the Trustees.
Section 3. DEPOSITS. All funds of the Trust not otherwise employed
shall be deposited from time to time to the credit of the Trust in such banks,
trust companies or other depositories as the Trustees may designate.
ARTICLE VII
SHARES
Section 1. CERTIFICATES. Each shareholder shall be entitled to a
certificate or certificates which shall represent and certify the number of
shares of each class of beneficial interests held by him in the Trust. Each
certificate shall be signed by the president or a vice president and
countersigned by the secretary or an assistant secretary or the treasurer or an
assistant treasurer and may be sealed with the seal, if any, of the Trust. The
signatures may be either manual or facsimile. Certificates shall be
consecutively numbered; and if the Trust shall, from time to time, issue
several classes of shares, each class may have its own number series. A
certificate is valid and may be issued whether or not an officer who signed it
is still an officer when it is issued. Each certificate representing shares
which are restricted as to their transferability or voting powers, which are
preferred or limited as to their dividends or as to their allocable portion of
the assets upon liquidation or which are redeemable at the option of the Trust,
shall have a statement of such restriction, limitation, preference or
redemption provision, or a summary thereof, plainly stated on the certificate.
In lieu of such statement or summary, the Trust may set forth upon the face or
back of the certificate a statement that the Trust will furnish to any
shareholder, upon request and without charge, a full statement of such
information.
Section 2. TRANSFERS. Certificates shall be treated as negotiable
and title thereto and to the shares they represent shall be transferred by
delivery thereof to the same extent as those of a Maryland stock corporation.
Upon surrender to the Trust or the transfer agent of the Trust of a share
certificate duly endorsed or accompanied by proper evidence of succession,
assignment or authority to transfer, the Trust shall issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
The Trust shall be entitled to treat the holder of record of any
share or shares as the holder in fact thereof and, accordingly, shall not be
bound to recognize any equitable or other claim to or interest in such share on
the part of any other person, whether or not it shall have express or other
notice thereof, except as otherwise provided by the laws of the State of
Maryland.
Section 3. LOST CERTIFICATE. The Trustees may direct a new
certificate to be issued in place of any certificate previously issued by the
Trust alleged to have been lost, stolen or destroyed upon the making of an
affidavit of that fact by the person claiming the certificate to be lost,
stolen or destroyed. When authorizing the issuance of a new certificate, the
Trustees may, in their discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, stolen or destroyed certificate or his
legal representative to advertise the same in such manner as they shall require
and/or to give bond, with sufficient surety, to the Trust to indemnify it
against any loss or claim which may arise as a result of the issuance of a new
certificate.
Section 4. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. The
Trustees may set, in advance, a record date for the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders,
or shareholders entitled to receive payment of any dividend or the allotment of
any other rights, or in order to make a determination of shareholders for any
other proper purpose. Such date, in any case, shall not be prior to the close
of business on the day the record date is fixed and shall be not more than 90
days and, in the case of a meeting of shareholders not less than ten days,
before the date on which the meeting or particular action requiring such
determination of shareholders is to be held or taken.
In lieu of fixing a record date, the Trustees may provide that the
share transfer books shall be closed for a stated period but not longer than 20
days. If the share transfer books are closed for the purpose of determining
shareholders entitled to notice of or to vote at a meeting of shareholders,
such books shall be closed for at least ten days before the date of such
meeting.
If no record date is fixed and the share transfer books are not
closed for the determination of shareholders, (a) the record date for the
determination of shareholders entitled to notice of or to vote at a meeting of
shareholders shall be at the close of business on the day on which the notice
of meeting is mailed or the 30th day before the meeting, whichever is the
closer date to the meeting; and (b) the record date for the determination of
shareholders entitled to receive payment of a dividend or an allotment of any
other rights shall be the close of business on the day on which the resolution
of the directors, declaring the dividend or allotment of rights, is adopted.
When a determination of shareholders entitled to vote at any meeting
of shareholders has been made as provided in this section, such determination
shall apply to any adjournment thereof, except where the determination has been
made through the closing of the transfer books and the stated period of closing
has expired.
Section 5. STOCK LEDGER. The Trust shall maintain at its principal
office or at the office of its counsel, accountants or transfer agent, an
original or duplicate share ledger containing the name and address of each
shareholder and the number of shares of each class held by such shareholder.
Section 6. FRACTIONAL SHARES; ISSUANCE OF UNITS. The Trustees may
issue fractional shares or provide for the issuance of scrip, all on such terms
and under such conditions as they may determine. Notwithstanding any other
provision of the Declaration of Trust or these Bylaws, the Trustees may issue
units consisting of different securities of the Trust. Any security issued in
a unit shall have the same characteristics as any identical securities issued
by the Trust, except that the Trustees may provide that for a specified period
securities of the Trust issued in such unit may be transferred on the books of
the Trust only in such unit.
ARTICLE VIII
ACCOUNTING YEAR
The Trustees shall have the power, from time to time, to fix the
fiscal year of the Trust by a duly adopted resolution.
ARTICLE IX
DIVIDENDS
Section 1. DECLARATION. Dividends upon the shares of the Trust may
be declared by the Trustees, subject to the provisions of law and the
Declaration of Trust. Dividends may be paid in cash, property or shares of the
Trust, subject to the provisions of law and the Declaration of Trust.
Section 2. CONTINGENCIES. Before payment of any dividends, there
may be set aside out of any funds of the Trust available for dividends such sum
or sums as the Trustees may from time to time, in its absolute discretion,
think proper as a reserve fund for contingencies, for equalizing dividends, for
repairing or maintaining any property of the Trust or for such other purpose as
the Trustees shall determine to be in the best interest of the Trust, and the
Trustees may modify or abolish any such reserve in the manner in which it was
created.
ARTICLE X
PROHIBITED INVESTMENTS AND ACTIVITIES
Notwithstanding anything to the contrary in the Declaration of Trust,
the Trust shall not make any acquisition which it does not believe is in the
best interests of the Trust, and will not, without the approval of a majority
of the disinterested Trustees, (i) acquire from or sell to any Trustee, officer
or employee of the Trust, any corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise in which a Trustee, officer or
employee of the Trust owns more than a one percent interest or any affiliate of
any of the foregoing, any of the assets or other property of the Trust, except
for the acquisition of certain properties in connection with the initial public
offering of shares by the Trust, which properties shall be described in the
prospectus relating to such initial public offering, (ii) make any loan to or
borrow from any of the foregoing persons or (iii) engage in any other
transaction with any of the foregoing persons. Each such transaction will be
in all respects on such terms as are, at the time of the transaction and under
the circumstances then prevailing, fair and reasonable to the Trust.
ARTICLE XI
SEAL
Section 1. SEAL. The Trustees may authorize the adoption of a seal
by the Trust. The seal shall have inscribed thereon the name of the Trust and
the year of its organization. The Trustees may authorize one or more duplicate
seals and provide for the custody thereof.
Section 2. AFFIXING SEAL. Whenever the Trust is required to place
its seal to a document, it shall be sufficient to meet the requirements of any
law, rule or regulation relating to a seal to place the word "(SEAL)" adjacent
to the signature of the person authorized to execute the document on behalf of
the Trust.
ARTICLE XII
INDEMNIFICATION
To the maximum extent permitted by Maryland law in effect from time
to time, the Trust, without requiring a preliminary determination of the
ultimate entitlement to indemnification, shall indemnify (a) any Trustee,
officer or shareholder or any former Trustee, officer or shareholder (including
among the foregoing, for all purposes of this Article XII and without
limitation, any individual who, while a Trustee and at the request of the
Trust, serves or has served another corporation, partnership, joint venture,
trust, employee benefit plan or any other enterprise as a director, officer,
partner or trustee of such corporation, partnership, joint venture, trust
employee benefit plan or other enterprise), who has been successful, on the
merits or otherwise, in the defense of a proceeding to which he was made a
party by reason of such status, against reasonable expenses incurred by him in
connection with the proceeding, (b) any Trustee or officer or any former
Trustee or officer against any claim or liability to which he may become
subject by reason of such status unless it is established that (i) his act or
omission was committed in bad faith or was the result of active and deliberate
dishonesty, (ii) he actually received an improper personal benefit in money,
property or services or (iii) in the case of a criminal proceeding, he had
reasonable cause to believe that his act or omission was unlawful and (c) each
shareholder or former shareholder against any claim or liability to which he
may become subject by reason of his status as a shareholder or former
shareholder. In addition, the Trust shall pay or reimburse, in advance of
final disposition of a proceeding, reasonable expenses incurred by a Trustee,
officer or shareholder or former Trustee, officer or shareholder made a party
to a proceeding by reason of his status as a Trustee, officer or shareholder
provided that, in the case of a Trustee or officer, the Trust shall have
received (i) a written affirmation by the Trustee or officer of his good faith
belief that he has met the applicable standard of conduct necessary for
indemnification by the Trust as authorized by these Bylaws and (ii) a written
undertaking by or on his behalf to repay the amount paid or reimbursed by the
Trust if it shall ultimately be determined that the applicable standard of
conduct was not met. The Trust may, with the approval of its Trustees, provide
such indemnification and payment or reimbursement of expenses to any Trustee,
officer or shareholder or any former Trustee, officer or shareholder who served
a predecessor of the Trust and to any employee or agent of the Trust or a
predecessor of the Trust. Neither the amendment nor repeal of this Section,
nor the adoption or amendment of any other provision of the Declaration of
Trust or these Bylaws inconsistent with this Section, shall apply to or affect
in any respect the applicability of this paragraph with respect to any act or
failure to act which occurred prior to such amendment, repeal or adoption. Any
indemnification or payment or reimbursement of the expenses permitted by these
Bylaws shall be furnished in accordance with the procedures provided for
indemnification and payment or reimbursement of expenses under Section 2-418 of
the Maryland General Corporation Law (the "MGCL") for directors of Maryland
corporations. The Trust may provide to Trustees, officers and shareholders
such other and further indemnification or payment or reimbursement of expenses
as may be permitted by the MGCL, as in effect from time to time, for directors
of Maryland corporations.
ARTICLE XIII
WAIVER OF NOTICE
Whenever any notice is required to be given pursuant to the
Declaration of Trust or Bylaws or pursuant to applicable law, a waiver thereof
in writing, signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to the
giving of such notice. Neither the business to be transacted at nor the
purpose of any meeting need be set forth in the waiver of notice, unless
specifically required by statute. The attendance of any person at any meeting
shall constitute a waiver of notice of such meeting, except where such person
attends a meeting for the express purpose of objecting to the transaction of
any business on the ground that the meeting is not lawfully called or convened.
ARTICLE XIV
AMENDMENT OF BYLAWS
The Trustees shall have the exclusive power to adopt, alter or repeal
any provision of these Bylaws and to make new Bylaws.
