<PAGE> 1
UNITED STATES
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, 1999
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 1-11690
-------------
DEVELOPERS DIVERSIFIED REALTY CORPORATION
-----------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 34-1723097
---- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3300 Enterprise Parkway, Beachwood, Ohio 44122
----------------------------------------------
(Address of principal executive offices - zip code)
(216) 755-5500
--------------
(Registrant's telephone number, including area code)
-------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicated by check |X| 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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common shares as of the latest practicable date.
59,764,989 shares outstanding as of November 12, 1999
---------- -----------------
-1-
<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of September 30, 1999 and December 31,
1998.
Condensed Consolidated Statements of Operations for the Three Month Periods
ended September 30, 1999 and 1998.
Condensed Consolidated Statement of Operations for the Nine Month Periods ended
September 30, 1999 and 1998.
Condensed Consolidated Statements of Cash Flows for the Nine Month Periods ended
September 30, 1999 and 1998.
Notes to Condensed Consolidated Financial Statements.
-2-
<PAGE> 3
DEVELOPERS DIVERSIFIED REALTY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
<S> <C> <C>
ASSETS
Real estate rental property:
Land $ 342,169 $ 317,823
Buildings 1,501,607 1,404,734
Fixtures and tenant improvements 32,693 24,131
Land under development 12,556 34,534
Construction in progress 119,140 115,541
----------- -----------
2,008,165 1,896,763
Less accumulated depreciation (238,810) (203,097)
----------- -----------
Real estate, net 1,769,355 1,693,666
Cash and cash equivalents 1,461 2,260
Investments in and advances to joint ventures 304,155 266,257
Minority equity investment 137,970 80,710
Notes receivable 5,954 49,008
Other assets 48,489 34,623
----------- -----------
$ 2,267,384 $ 2,126,524
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Unsecured indebtedness:
Fixed rate senior notes $ 592,272 $ 592,154
Revolving credit facility 233,000 132,000
Subordinated convertible debentures -- 40,065
----------- -----------
825,272 764,219
Mortgage indebtedness 256,603 236,262
----------- -----------
Total indebtedness 1,081,875 1,000,481
Accounts payable and accrued expenses 52,659 50,380
Dividends payable 21,460 20,072
Other liabilities 11,274 11,878
----------- -----------
1,167,268 1,082,811
----------- -----------
Minority equity interest 8,202 8,177
Preferred operating partnership interests 104,776 32,101
Operating partnership minority interests 102,956 100,650
Commitments and contingencies
Shareholders' equity:
Class A - 9.5% cumulative redeemable preferred shares, without par value,
$250 liquidation value; 750,000 shares authorized; 421,500 shares
issued and outstanding at September 30, 1999 and December 31, 1998 105,375 105,375
Class B - 9.44% cumulative redeemable preferred shares, without par value,
$250 liquidation value; 750,000 shares authorized; 177,500 shares
issued and outstanding at September 30, 1999 and December 31, 1998 44,375 44,375
Class C - 8.375% cumulative redeemable preferred shares, without par value,
$250 liquidation value; 750,000 shares authorized; 400,000 shares issued
and outstanding at September 30, 1999 and December 31, 1998 100,000 100,000
Class D- 8.68% cumulative redeemable preferred shares, without par value,
$250 liquidation value; 750,000 shares authorized; 216,000 shares issued
and outstanding at September 30, 1999 and December 31, 1998 54,000 54,000
Common shares, without par value, $.10 stated value; 100,000,000 shares
authorized; 61,313,218 and 61,289,186 shares issued and outstanding at
September 30, 1999 and December 31, 1998, respectively 6,131 6,129
Paid-in-capital 674,320 673,910
Accumulated dividends in excess of net income (99,866) (80,697)
----------- -----------
884,335 903,092
Less: Unearned compensation - restricted stock (153) (307)
----------- -----------
884,182 902,785
----------- -----------
$ 2,267,384 $ 2,126,524
=========== ===========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-3-
<PAGE> 4
DEVELOPERS DIVERSIFIED REALTY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTH PERIOD ENDED SEPTEMBER 30,
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
-------- ---------
<S> <C> <C>
Revenues from operations:
Minimum rents $ 48,314 $ 47,607
Percentage and overage rents 616 324
Recoveries from tenants 11,709 11,970
Management fee income 1,268 964
Interest income 1,100 1,376
Other 3,219 1,153
-------- --------
66,226 63,394
-------- --------
Rental operation expenses:
Operating and maintenance 6,004 5,861
Real estate taxes 6,645 7,248
General and administrative 4,037 3,244
Interest 16,728 17,149
Depreciation and amortization 13,324 12,417
-------- --------
46,738 45,919
-------- --------
Income before equity in net income of joint
ventures, minority equity investment, minority
interests and loss on disposition of real estate 19,488 17,475
Equity in net income of joint ventures 4,599 4,457
Equity in net income from minority equity investment 1,478 154
Minority interests (2,928) (1,338)
Loss on disposition of real estate -- (36)
-------- --------
Net income $ 22,637 $ 20,712
======== ========
Net income applicable to common shareholders $ 15,821 $ 14,702
======== ========
Per share data:
Earnings per common share -
Basic $ 0.26 $ 0.26
======== ========
Diluted $ 0.25 $ 0.25
======== ========
Dividends declared $ 0.35 $ 0.3275
======== ========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-4-
<PAGE> 5
DEVELOPERS DIVERSIFIED REALTY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30,
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
--------- ----------
<S> <C> <C>
Revenues from operations:
Minimum rents $ 141,148 $ 123,453
Percentage and overage rents 3,191 2,251
Recoveries from tenants 34,701 30,797
Management fee income 3,875 2,570
Interest income 4,815 3,078
Other 7,948 3,766
--------- ---------
195,678 165,915
--------- ---------
Rental operation expenses:
Operating and maintenance 17,376 14,167
Real estate taxes 19,614 19,742
General and administrative 13,244 9,247
Interest 50,081 41,917
Depreciation and amortization 39,110 31,638
--------- ---------
139,425 116,711
--------- ---------
Income before equity in net income of joint
ventures, minority equity investment, minority interests,
loss on disposition of real estate and extraordinary item 56,253 49,204
Equity in net income of joint ventures 13,940 10,169
Equity in net income from minority equity investment 4,925 154
Minority interests (7,718) (1,628)
Loss on disposition of real estate (1,753) (36)
--------- ---------
Income before extraordinary item 65,647 57,863
Extraordinary item -- (882)
--------- ---------
Net income $ 65,647 $ 56,981
========= =========
Net income applicable to common shareholders $ 45,200 $ 43,872
========= =========
Per share data:
Earnings per common share - basic:
Income before extraordinary item $ 0.74 $ 0.79
Extraordinary item -- (0.01)
--------- ---------
Net income $ 0.74 $ 0.78
========= =========
Earnings per common share - diluted:
Income before extraordinary item $ 0.71 $ 0.76
Extraordinary item -- (0.01)
--------- ---------
Net income $ 0.71 $ 0.75
========= =========
Dividends declared $ 1.05 $ 0.9825
========= =========
</TABLE>
ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-5-
<PAGE> 6
DEVELOPERS DIVERSIFIED REALTY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30,
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
1999 1998
--------- ---------
<S> <C> <C>
Net cash flow provided by operating activities $ 107,858 $ 99,755
--------- ---------
Cash flow provided by (used for) investing activities:
Real estate developed or acquired (117,803) (525,125)
Investments in and advances to joint ventures and minority
equity investment, net (121,099) (73,677)
Acquisition of minority equity interest -- (16,293)
Repayment (issuance) of notes receivable, net 5,130 (25,801)
Proceeds from transfer of properties to joint ventures and repayment of
advances from affiliates 66,150 234,377
Proceeds from disposition of real estate 11,211 5,007
--------- ---------
Net cash flow used for investing activities (156,411) (401,512)
--------- ---------
Cash flow provided by (used for) financing activities:
Proceeds from (Repayment of) revolving credit facilities, net 101,000 (25,700)
Proceeds from construction loans and other mortgage debt 37,010 20,311
Principal payments on rental property debt (34,670) (15,669)
Repayment of convertible debentures (40,040) --
Proceeds from issuance of Medium Term Notes, net of underwriting commission,
and $459 of offering expenses paid in 1998 -- 197,910
Proceeds from issuance of common shares, net of underwriting
commissions and $26 of offering expenses paid in 1998 -- 25,234
Payment of deferred finance costs (360) (469)
Proceeds from issuance of Class C and D preferred shares, net of
underwriting commissions and $869 of offering expenses paid in 1998 -- 148,280
Proceeds from issuance of preferred partnership units net of $450 of offering
expenses paid 72,675 --
Proceeds from issuance of common shares in conjunction with
exercise of stock options, the Company's 401(k) plan, dividend reinvestment
plan and restricted stock plan 494 2,691
Payment of distributions to operating partnership minority interests (4,927) --
Dividends paid (83,428) (49,158)
--------- ---------
Net cash flow provided by financing activities 47,754 303,430
--------- ---------
(Decrease) increase in cash and cash equivalents (799) 1,673
Cash and cash equivalents, beginning of period 2,260 18
--------- ---------
Cash and cash equivalents, end of period $ 1,461 $ 1,691
========= =========
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
THESE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
-6-
<PAGE> 7
Supplemental disclosure of non cash investing and financing activities:
In conjunction with the acquisition of certain shopping centers, the Company
assumed mortgage debt of approximately $18.0 million and recorded minority
equity interests aggregating approximately $2.7 million during the nine month
period ended September 30, 1999. Also, the Company applied the balance of
approximately $22.0 million of notes receivable towards the acquisition of one
shopping center in Phoenix, Arizona and additional shares of American Industrial
Properties and transferred $21.2 million of development costs in connection with
the formation of three joint ventures. In addition, included in accounts payable
was approximately $0.2 million relating to construction in progress and $21.5
million of dividends declared at September 30, 1999. The foregoing transactions
did not provide for or require the use of cash.
In conjunction with the acquisition of certain shopping centers, the Company
assumed mortgage debt and liabilities aggregating $137.0 million and recorded
minority equity interest aggregating approximately $96.7 million during the nine
month period ended September 30, 1998. The Company also had approximately $6.1
million of debentures converted into common shares of the Company. The Company
also issued approximately 29 million common shares pursuant to the Company's
two-for-one stock split, resulting in the reclassification of approximately $2.9
million from paid-in-capital to common shares. In addition, included in accounts
payable was approximately $0.2 million relating to construction in progress and
$19.1 million of dividends declared. Also, in conjunction with the acquisition
of a minority equity investment, the Company transferred land and buildings with
a net book value of $7.4 million in exchange for approximately 1.3 million
common shares of American Industrial Properties. Similarly, in conjunction with
the formation of a joint venture, the Company transferred property to the joint
venture with a net book value, after reduction for cash received, of $27.6
million in exchange for a 50% equity interest. The foregoing transactions did
not provide for or require the use of cash.
-7-
<PAGE> 8
DEVELOPERS DIVERSIFIED REALTY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF BUSINESS AND FINANCIAL STATEMENT PRESENTATION
Developers Diversified Realty Corporation, and its subsidiaries,
(collectively, the "Company" or "DDR"), related real estate joint ventures and
its minority equity investment are engaged in the business of acquiring,
expanding, owning, developing, managing and operating neighborhood and community
shopping centers, enclosed malls and business centers.
Reclassifications
Certain reclassifications have been made to the 1998 financial
statements to conform to the 1999 presentation.
Share Split
Effective August 3, 1998, the Company effected a two for one share
split to shareholders of record on July 27, 1998 in the form of a share
dividend. All per share amounts and the number of common shares outstanding
reflect this split, unless otherwise indicated.
Use of Estimates
The preparation of financial statements in accordance with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities,
disclosure of contingent assets and liabilities at the date of the financial
statements and reported amounts of revenues and expenses during the reporting
period. Actual results could differ from these estimates.
New Accounting Standard
In June 1998, the FASB issued SFAS No. 133 - Accounting for Derivative
Instruments and Hedging Activities. This statement requires fair value
accounting for all derivatives including recognizing all such instruments on the
balance sheet with an offsetting amount recorded in the income statement or as
part of comprehensive income. The new standard becomes effective for the Company
for the year ending December 31, 2001 (SFAS No. 137 deferred the effective date
from December 31, 2000). The Company does not expect this pronouncement to have
a material impact on the Company's financial position or cash flows.
-8-
<PAGE> 9
Unaudited Interim Financial Statements
The accompanying unaudited condensed consolidated financial statements
include the accounts of the Company and all majority owned subsidiaries and
investees where the Company has financial and operating control. Investments in
real estate joint ventures and companies for which the Company has the ability
to exercise significant influence over but does not have financial and operating
control are accounted for using the equity method of accounting.
These financial statements have been prepared by the Company in
accordance with generally accepted accounting principles for interim financial
information and the applicable rules and regulations of the Securities and
Exchange Commission. Accordingly, they do not include all information and
footnotes required by generally accepted accounting principles for complete
financial statements. However, in the opinion of management, the interim
financial statements include all adjustments, consisting of only normal
recurring adjustments, necessary for a fair presentation of the results of the
periods presented. The results of the operations for the nine months ended
September 30, 1999 and 1998 are not necessarily indicative of the results that
may be expected for the full year. These condensed consolidated financial
statements should be read in conjunction with the Company's audited financial
statements and notes thereto included in the Company's Annual Report on Form
10-K for the year ended December 31, 1998.
2. EQUITY INVESTMENTS IN JOINT VENTURES:
The Company's equity investments in joint ventures at September 30, 1999
consisted of the following:
o A 50% joint venture interest in 24 operating shopping centers (one
of which was acquired in 1999 and three of which were acquired in
1998);
o A 35% joint venture interest in one operating shopping center;
o A 57% joint venture interest in one shopping center which is under
development;
o A 50% interest in eight joint ventures each of which is developing a
shopping center;
o A 25% interest in one joint venture which is developing a shopping center;
o An 80% joint venture interest in two operating shopping center properties
acquired in 1998;
o A 50% joint venture interest in a real estate management company and a
development company, both acquired in 1998;
o A 50% joint venture interest in a limited partnership acquired in 1998
which is developing six shopping centers;
o A 95% economic interest in a management service subsidiary formed in 1998
of which the Company owns 1% of the voting and 100% of the non-voting
common stock. This entity owns a 25% joint venture interest in an
opportunity fund formed in 1998 which has acquired a retail site in
Longbeach, CA, which is being redeveloped, and retail sites in Kansas
City, KS a 75% joint venture interest which owns 13 retail sites formerly
occupied by Best Products, and a 12.5% interest in a joint venture
interest which is developing a shopping center;
o An 81% economic interest in a management service subsidiary formed in 1998
of which the Company owns 9% of the voting and 100% of the non-voting
common stock.
-9-
<PAGE> 10
Summarized combined financial information of the Company's joint venture
investments is as follows (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
<S> <C> <C>
Combined Balance Sheets:
Land $ 235,867 $ 232,105
Buildings 842,487 826,521
Fixtures and tenant improvements 4,465 2,467
Construction in progress 211,560 67,898
----------- -----------
1,294,379 1,128,991
Less accumulated depreciation (76,103) (59,580)
----------- -----------
Real estate, net 1,218,276 1,069,411
Other assets 83,025 57,527
----------- -----------
$ 1,301,301 $ 1,126,938
=========== ===========
Mortgage debt $ 790,043 $ 718,846
Amounts payable to DDR 126,357 85,846
Other liabilities 85,555 21,193
----------- -----------
1,001,955 825,885
Accumulated equity 299,346 301,053
----------- -----------
$ 1,301,301 $ 1,126,938
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
Three Month Period Nine Month Period
Ended September 30, Ended September 30,
1999 1998 1999 1998
------- ------- -------- -------
<S> <C> <C> <C> <C>
Combined Statements of Operations:
Revenues from operations $41,365 $29,287 $121,934 $74,233
------- ------- -------- -------
Rental operation expenses 12,689 7,240 36,713 17,770
Depreciation and amortization expense
of real estate investments 5,748 4,081 16,949 10,618
Interest expense 14,547 10,548 43,142 28,190
------- ------- -------- -------
32,984 21,869 96,804 56,578
------- ------- -------- -------
Income before gain on sale of real estate 8,381 7,418 25,130 17,655
Gain on sale of real estate -- 5,897 344 8,710
------- ------- -------- -------
Net income $ 8,381 $13,315 $ 25,474 $26,365
======= ======= ======== =======
</TABLE>
Included in management fee income for the nine month period ended
September 30, 1999 and 1998, is approximately $3.6 and $2.1 million,
respectively, of management fees earned by the Company for services rendered to
the joint ventures. Similarly, other income for the nine month period ended
September 30, 1999 and 1998, includes $2.2 million and $1.3 million,
respectively, of development fee income and commissions for services rendered to
the joint ventures, net of amounts eliminated related to the Company's
proportionate share.
In the second and third quarters of 1999, the Company entered into
agreements with Prudential/DDR Retail Value Fund (the "Fund"), a joint venture
in which the Company effectively owns a 25% interest, agreed to acquire the
Company's 50% joint venture interests relating to the development of six
shopping centers. The Company was reimbursed approximately $74.3 million,
-10-
<PAGE> 11
relating to advances previously made to these joint ventures, associated with
development costs incurred on each of these projects. In addition, the Company
transferred its interest in a shopping center under development in Coon Rapids,
MN, a suburb of Minneapolis, to a joint venture in which the Company retained a
25% interest and was reimbursed $2.5 million relating to development costs
previously incurred on this project.
In June 1999, DD Development Company, a company in which DDR owns an
equity ownership interest, acquired Prudential Real Estate Investors' ("PREI")
limited partnership interest in a joint venture, Hendon/DDR/BP, LLC, which owned
15 sites formerly occupied by Best Products at a cost of approximately $29.7
million. As a result, the Company's aggregate investment in the joint venture
increased to approximately $36 million. Ten of the sites are leased as of
September 30, 1999 and two were sold as of September 30, 1999. In addition, in
June 1999, Hendon/DDR/BP, LLC, entered into a $25 million mortgage, with a
financial institution secured by the leased sites. The net financing proceeds
were used to repay advances made by the Company to the joint venture.
In April 1999, the Company acquired a 50% interest in a 206,000 square
foot shopping center in St. Louis, MO. The joint venture's aggregate purchase
price was $16.6 million.
In January 1999, the Company repaid a third party mortgage of a 50%
owned joint venture partnership aggregating approximately $49.2 million. The
joint venture entered into a corresponding mortgage note payable to the Company
bearing an interest rate of LIBOR plus 2.75%. In addition, the Company received
a loan origination fee for this transaction of $0.4 million. In March 1999, the
joint venture obtained a bridge loan, which was converted into a permanent
mortgage in June 1999, and used the proceeds to repay the mortgage note to the
Company.
3. MINORITY EQUITY INVESTMENT:
On August 4, 1998, the Company announced the execution of a definitive
agreement providing for the strategic investment in American Industrial
Properties REIT (NYSE: IND) ("AIP") by the Company. At December 31, 1998, the
Company owned 5,891,196 common shares of AIP, representing 34.5% of AIP's total
outstanding common shares. In January 1999, the Company acquired 1,543,005
common shares of AIP at a price of $15.50 per share and 1,867,610 common shares
of AIP at a price of $14.93 per common share. In August 1999, the Company
acquired 354,839 common shares of AIP at a price of $15.50 per share. At
September 30, 1999, the Company owned 9,656,650 common shares in AIP
representing approximately 46.0% of AIP's total outstanding common shares.
-11-
<PAGE> 12
Summarized financial information of AIP is as follows (in thousands):
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- ------------
<S> <C> <C>
Balance Sheet:
Land $ 161,916 $ 108,891
Buildings 482,988 396,241
--------- ---------
644,904 505,132
Less accumulated depreciation (42,862) (33,449)
--------- ---------
Real estate, net 602,042 471,683
Other assets 31,602 28,647
--------- ---------
$ 633,644 $ 500,330
========= =========
Mortgage debt $ 346,107 $ 252,481
Other liabilities 28,654 42,270
--------- ---------
374,761 294,751
Accumulated equity 258,883 205,579
--------- ---------
$ 633,644 $ 500,330
========= =========
</TABLE>
<TABLE>
<CAPTION>
Three month Nine month For the period
period ended period ended July 30, 1998 to
September 30, 1999 September 30, 1999 September 30, 1998
------------------ ------------------ ------------------
<S> <C> <C> <C>
Statement of Operations:
Revenues from operations $ 22,329 $ 64,173 $ 8,720
-------- -------- -------
Rental operation expenses 7,824 22,665 3,380
Depreciation and amortization
Expense 3,370 9,993 1,632
Interest expense 6,884 19,718 2,738
-------- -------- -------
18,078 52,376 7,750
-------- -------- -------
4,251 11,797 970
Minority interests (89) (260) (39)
Loss on sale of real estate (113) (75) --
-------- -------- -------
Income before extraordinary item 4,049 11,462 931
Extraordinary item (585) (585) --
-------- -------- -------
Net Income $ 3,464 $ 10,877 $ 931
======== ======== =======
</TABLE>
4. PRO FORMA FINANCIAL INFORMATION
The following unaudited supplemental pro forma operating data is
presented for the nine month period ended September 30, 1998 as if each of the
following transactions had occurred on January 1, 1998; (i) the acquisition of
all properties acquired, or interests therein, by the Company in 1998 and 1999;
(ii) the completion of the sale by the Company of 669,639 common shares
(pre-split) in April 1998 and 1999; (iii) the completion of the sale by the
Company of $200 million of Medium Term Notes in January and July 1998; (iv) the
purchase by the Company of the minority interest of a shopping center in
Cleveland, Ohio in March 1998; (v) the completion of the sale by the Company of
4,000,000 Class C Depositary shares in July 1998 each representing 1/10 of a
Class C Preferred Share; (vi) the completion of the sale by the Company of
2,160,000 Class D Depositary shares in August and
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<PAGE> 13
September 1998 each representing 1/10 of a Class D Preferred Share; (vii) the
transfer of six properties owned by the Company into a 50% owned joint venture
in September 1998, and (viii) the completion of the sale by the Company of
3,000,000 common shares in December 1998 (in thousands, except per share).
<TABLE>
<CAPTION>
Nine Month Period
Ended September 30,
1998
-------------------
<S> <C>
Pro forma revenues $ 167,292
=========
Pro forma income before extraordinary item $ 60,054
=========
Pro forma net income applicable
to common shareholders $ 41,450
=========
Per share data:
Earnings per common share - basic:
Income before extraordinary item $ 0.74
Extraordinary item (0.02)
---------
Net income $ 0.72
=========
Earnings per common share - diluted:
Income before extraordinary item $ 0.71
Extraordinary item (0.02)
---------
Net income $ 0.69
=========
</TABLE>
The 1998 pro forma information above does not include revenues and
expenses for seven of the 41 properties acquired by the Company in 1998, the one
property acquired in 1999 and the one joint venture entered into in 1999 prior
to their respective acquisition dates because these shopping centers were either
under development or in the lease-up phase and, accordingly, the related
operating information for such centers either does not exist or would not be
meaningful. In addition, the 1998 pro forma information does not include the
results of shopping center expansions occurring at five of the shopping centers
acquired by the Company.
5. SHAREHOLDERS' EQUITY AND OPERATING PARTNERSHIP UNITS:
The following table summarizes the changes in shareholders' equity
since December 31, 1998 (in thousands):
<TABLE>
<CAPTION>
Preferred Common Accumulated Unearned
Shares ($250 Shares Dividends in Compensation
Stated ($.10 stated Paid-in Excess of Restricted
Value) Value) Capital Net Income Stock Total
------------ ------------- ------- ------------ ------------- -----
<S> <C> <C> <C> <C> <C> <C>
Balance December 31, 1998 $ 303,750 $ 6,129 $673,910 $(80,697) $(307) $902,785
Net income 65,647 65,647
Dividends declared -
Common Shares (64,369) (64,369)
Dividends declared -
Preferred Shares (20,447) (20,447)
Vesting of restricted stock 154 154
Conversion of Debentures 25 25
Conversion of OP Units 46 46
Issuance of common shares
related to exercise of stock
options, employee 401(k) plan
and dividend reinvestment plan 2 339 341
--------- -------- -------- -------- ----- --------
Balance September 30, 1999 $ 303,750 $ 6,131 $674,320 $(99,866) $(153) $884,182
========= ======== ======== ======== ===== ========
</TABLE>
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<PAGE> 14
During the nine month period ended September 30, 1999, in conjunction
with certain earnouts relating to the acquisition of two shopping centers which
were initially purchased in 1998 and the purchase of joint venture interests,
the Company issued operating partnership units ("OP Units") which are
exchangeable, under certain circumstances and at the option of the Company, into
139,276 of the Company's common shares or for cash.
6. REVOLVING CREDIT FACILITIES:
The Company maintains a $375 million unsecured revolving credit
facility with a syndicate of financial institutions, for which Bank One, NA
serves as the administrative agent (the "Unsecured Credit Facility"), for a term
through April 2001. The Unsecured Credit Facility includes a competitive bid
option for up to 50% of the facility amount. The Company's borrowings under this
facility bear interest at variable rates based on the prime rate or LIBOR plus a
specified spread (currently 0.85%), depending on the Company's long term senior
unsecured debt rating from Standard and Poor's and Moody's Investors Service.
The Unsecured Credit Facility is used to finance the acquisition and development
of properties, to provide working capital and for general corporate purposes. At
September 30, 1999, $233.0 million was outstanding under this facility with a
weighted average interest rate of 6.2%.
In March 1999, the Company amended its other unsecured revolving credit
facility with National City Bank to increase the available borrowings to $25
million from $20 million and to convert it to a secured revolving credit
facility. This credit facility is secured by certain partnership investments.
The Company maintains the right to reduce this facility to $20 million and to
convert the borrowings to an unsecured revolving credit facility. Borrowings
under this facility continue to bear interest at variable rates based on the
prime rate or LIBOR plus a specified spread (currently 0.85%) depending on the
Company's long term senior unsecured debt rating from Standard and Poor's and
Moody's Investors Service. At September 30, 1999, there were no borrowings
outstanding under this facility.
7. RELATED PARTY TRANSACTIONS
In September 1999, the Company transferred its interest in a shopping
center under development in Coon Rapids, MN, a suburb of Minneapolis, to a joint
venture in which the Company retained a 25% interest. The remaining 75% interest
is held by an entity owned in part by a director of the Company. The Company was
reimbursed $2.5 million by the joint venture partner relating to development
costs previously incurred on this development. In addition, the Company received
a development fee of approximately $0.5 million during the three month period
ended September 30, 1999 from the entity owned in part by a director of the
Company.
In February 1998, the Company acquired a shopping center located in
Idaho Falls, Idaho from a limited partnership in which the Company's Chairman
Emeritus, Chairman of the Board and Chief Executive Officer, Vice-Chairman of
the Board and the Chief Investment Officer owned, in the aggregate, through a
separate partnership, a 1% general partnership interest. The shopping center
aggregates approximately 0.2 million square feet of Company GLA. The initial
purchase price of the property was approximately $6.5 million. In 1999, the
Company paid the seller an additional $0.6 million upon the leasing of vacant
space.
During 1999, the Company periodically advanced funds to the Chairman of
the Board and Chief Executive Officer in amounts up to $0.1 million. The
advances, which were made to reduce the
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<PAGE> 15
outstanding principal balance of, and to prevent the sale of common shares in
the Company from, a margin account loan, were outstanding for a period of up to
40 days with an interest rate of LIBOR plus 0.85%.
During 1999, the Company paid approximately $0.1 million to a Company
owned by brother-in-law of the Chairman of the Board relating to fees and
commissions on the acquisitions of several shopping centers in 1998.
In conjunction with the establishment of DDR's equity investment in
certain entities, the Company's Chairman and Chief Executive Officer owns voting
stock in these entities in order to comply with certain REIT qualification
requirements.
8. EARNINGS AND DIVIDENDS PER SHARE
Earnings Per Share (EPS) have been computed pursuant to the provisions
of Statement of Financial Accounting Standards No. 128.
The following table provides a reconciliation of both income before
extraordinary item and the number of common shares used in the computations of
"basic" EPS, which utilized the weighted average number of common shares
outstanding without regard to dilutive potential common shares, and "diluted"
EPS, which includes all such shares.
<TABLE>
<CAPTION>
Three Month Period Nine Month Period
Ended September 30, Ended September 30,
-------------------------- --------------------------
(in thousands, except per share amounts)
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Income before extraordinary item $ 22,637 $ 20,712 $ 65,647 $ 57,863
Less: Preferred stock dividend (6,816) (6,010) (20,447) (13,109)
-------- -------- -------- --------
Basic - Income before
extraordinary item applicable to
common shareholders 15,821 14,702 45,200 44,754
Effect of dilutive securities:
Joint venture partnerships 132 (141) -- (640)
-------- -------- -------- --------
Diluted - Income before
extraordinary item applicable to
common shareholders plus
assumed conversions $ 15,953 $ 14,561 $ 45,200 $ 44,114
======== ======== ======== ========
NUMBER OF SHARES:
Basic - average shares outstanding 61,327 57,257 61,314 56,500
Effect of dilutive securities:
Joint venture partnerships 2,978 778 2,147 479
Stock options 113 730 176 876
Performance Units 30 -- 83 --
Restricted stock -- -- 4 --
-------- -------- -------- --------
Diluted - average shares outstanding 64,448 58,765 63,724 57,855
======== ======== ======== ========
PER SHARE AMOUNT:
Income before extraordinary item
Basic $ 0.26 $ 0.26 $ 0.74 $ 0.79
======== ======== ======== ========
Diluted $ 0.25 $ 0.25 $ 0.71 $ 0.76
======== ======== ======== ========
</TABLE>
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<PAGE> 16
The conversion of the following potentially dilutive securities into
the Company's common shares were not included in the computation of diluted EPS
for the periods presented because the effect was antidilutive: debentures
(matured August 15, 1999), the Company's joint venture partner's interest in the
San Antonio, Merriam (dilutive three months ended September 30, 1999 and 1998
and for the nine months ended September 30, 1998), Community Centers, DDRA V and
DDRA VI (1999 only; dilutive three months ended September 30, 1999) joint
ventures, a joint venture with two operating properties, a joint venture in one
operating property (1999 only), minority interests (OP Units) and the redemption
of preferred units through the exercise of a warrant (1999 only).
9. DISPOSITION OF REAL ESTATE
The loss on disposition of real estate aggregating $1.8 million relates
to the sale of residual land and redevelopment of the undepreciated portion of a
shopping center in Pensacola, Florida. The majority of the center was vacant
prior to redevelopment. The real estate was sold to a major retailer for
approximately $4.7 million.
10. SUBSEQUENT EVENTS
Commencing in October 1999 through November 12, 1999, the Company
purchased in open market transactions, 1,550,500 of its common shares, at prices
ranging from $13.44 to $14.00, for an aggregate purchase price of approximately
$21.6 million. In February and August 1999, the Company's Board of Directors
authorized the officers of the Company to implement a common share repurchase
program in response to what the Company believed was a distinct undervaluation
of the Company's common shares in the public market. Under the terms authorized
by the Company's Board, as amended in November 1999, the Company may purchase in
the open market, subject to certain requirements, common shares of the Company,
up to a maximum value of $200 million. The Company may invest proceeds from the
sale of assets to purchase these shares. It is not the Company's intention to
increase the leverage on its balance sheet to implement this stock repurchase
program.
In November 1999, the Company acquired, through a 50% owned joint
venture, the fourth phase of a shopping center in Phoenix, AZ which aggregates
125,000 square feet. The total purchase price for the fourth phase of this
center aggregated approximately $15.5 million.
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<PAGE> 17
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
consolidated financial statements and the notes thereto. Historical results and
percentage relationships set forth in the consolidated financial statements,
including trends which might appear, should not be taken as indicative of future
operations. The Company considers portions of this information to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Exchange Act of 1933 and Section 21E of the Securities Exchange Act of 1934,
both as amended, with respect to the Company's expectations for future periods.
Forward-looking statements include, without limitation, statements related to
acquisitions (including any related pro forma financial information) and other
business development activities, future capital expenditures, financing sources
and availability, the effects of environmental and other regulations, as well as
the costs, timing and effectiveness of year 2000 readiness. Although the Company
believes that the expectations reflected in those forward-looking statements are
based upon reasonable assumptions, it can give no assurance that its
expectations will be achieved. For this purpose, any statements contained herein
that are not statements of historical fact may be deemed to be forward-looking
statements. Without limiting the foregoing, the words "believes", "anticipates",
"plans", "expects", "seeks", "estimates", and similar expressions are intended
to identify forward-looking statements. Readers should exercise caution in
interpreting and relying on forward-looking statements since they involve known
and unknown risks, uncertainties and other factors which are, in some cases,
beyond the Company's control and could materially affect the Company's actual
results, performance or achievements.
Factors that could cause actual results, performance or achievements to
differ materially from those expressed or implied by forward-looking statements
include, but are not limited to, the following:
o The Company is subject to general risks affecting the real estate
industry, including the need to enter into new leases or renew leases on
favorable terms to generate rental revenues;
o The Company is subject to competition for tenants from other owners of
retail properties and its tenants are subject to competition from other
retailers and methods of distribution. The Company is dependent upon the
successful operations and financial condition of its tenants,
particularly certain of its major tenants, and could be adversely
affected by the bankruptcy of those tenants;
o The Company may fail to anticipate the effects on its properties of
changes in consumer buying practices and the resulting retailing
practices and space needs of its tenants;
o The Company may fail to identify, acquire, construct or develop
additional properties, the Company may develop or acquire properties
that do not produce a desired yield on invested capital, or the Company
may fail to effectively integrate acquisitions of properties or
portfolios of properties;
o Debt and equity financing may not be available, or may not be available
on favorable terms, for the Company to continue to grow and operate
its business;
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<PAGE> 18
o The Company must make distributions to shareholders to continue to
qualify as a REIT, and if the Company borrows funds to make
distributions then those borrowings may not be available on favorable
terms;
o The Company could be adversely affected by changes in the local markets
where its properties are located, as well as by adverse changes in
national economic and market conditions;
o The Company is subject to potential environmental liabilities;
o The Company is subject to complex regulations related to its status as a
real estate investment trust ("REIT") and would be adversely affected if
it failed to qualify as a REIT;
o The Company could be adversely affected by changes in government
regulations, including changes in environmental, zoning, tax and other
regulations;
o The Company, its tenants and its suppliers may experience unanticipated
delays or expenses related to achieving year 2000 readiness or resulting
from year 2000 related problems; and
o Changes in interest rates could adversely affect the market price for
the Company's common shares, as well as its performance and cash flow.
RESULTS OF OPERATIONS
Revenues from Operations
Total revenues increased $2.8 million, or 4.5%, to $66.2 million for
the three month period ended September 30, 1999 from $63.4 million for the same
period in 1998. Total revenues increased $29.8 million, or 17.9%, to $195.7
million for the nine month period ended September 30, 1999 from $165.9 million
for the same period in 1998. Base and percentage rents for the three month
period ended September 30, 1999 increased $1.0 million, or 2.1%, to $48.9
million as compared to $47.9 million for the same period in 1998. Base and
percentage rents increased $18.6 million, or 14.8%, to $144.3 million for the
nine month period ended September 30, 1999 from $125.7 million for the same
period in 1998.
Approximately $5.0 million of the increase in base and percentage
rental income, for the nine month period ended September 30, 1999 is the result
of new leasing, re-tenanting and expansion of the Core Portfolio Properties
(shopping center properties owned as of January 1, 1998), an increase of 5.8%
over 1998 revenues from Core Portfolio Properties. The 35 shopping centers
acquired by the Company in 1999 and 1998 contributed $27.1 million of additional
base and percentage rental revenue and seven new shopping center developments
contributed $2.9 million. These increases were offset by a decrease of $16.4
million relating to the transfer of six shopping center properties into a joint
venture in September 1998 and the transfer of five business center properties to
American Industrial Properties (NYSE: IND) ("AIP") in August 1998.
At September 30, 1999, the in-place occupancy rate of the Company's
portfolio stood at 95.6% as compared to 95.9% at September 30, 1998. The average
annualized base rent per leased square foot, including those properties owned
through joint ventures, was $9.02 at September 30, 1999 as compared
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<PAGE> 19
to $8.79 at September 30, 1998. Same store sales, for those tenants required to
report such information, representing approximately 18.8 million square feet,
increased 3.2% to $233 per square foot for the twelve month period.
The increase in recoveries from tenants of $3.9 million for the nine
months ended September 30, 1999 is directly related to the increase in operating
and maintenance expenses and real estate taxes primarily associated with the
1999 and 1998 shopping center acquisitions and developments. Recoveries were
approximately 93.8% of operating expenses and real estate taxes for the nine
month period ended September 30, 1999 as compared to 91.1% for the same period
in 1998. This increase is generally associated with increased occupancy.
Management fee income increased by approximately $1.3 million for the nine month
period ended September 30, 1999 compared to the same period in 1998, primarily
associated with the formation of new joint ventures in 1998. Interest income
increased $1.7 million, for the nine month period ended September 30, 1999
compared to the same period in 1998, primarily associated with advances made to
certain joint ventures. Other income increased by approximately $4.2 million
which generally reflects an increase in lease termination's and development,
leasing and financing fees, from the Company's joint ventures, relating to the
ownership interest held by third party investors.
Other income was comprised of the following (in thousands):
<TABLE>
<CAPTION>
Three Month Period Nine Month Period
Ended September 30, Ended September 30,
1999 1998 1999 1998
------ ------ ------ ------
<S> <C> <C> <C> <C>
Temporary tenant rentals (Kiosks) $ 129 $ 135 $ 315 $ 360
Lease termination fees 2,014 233 2,552 1,130
Development fees 911 431 3,526 1,188
Other 165 354 1,555 1,088
------ ------ ------ ------
$3,219 $1,153 $7,948 $3,766
====== ====== ====== ======
</TABLE>
Expenses from Operations
Rental operating and maintenance expenses for the three month period
ended September 30, 1999 increased $0.1 million, or 2.4%, to $6.0 million as
compared to $5.9 million for the same period in 1998. Rental operating and
maintenance expenses increased $3.2 million, or 22.7%, to $17.4 million for the
nine month period ended September 30, 1999 from $14.2 million for the same
period in 1998. For the nine month period ended September 30, 1999, an increase
of $2.9 million is attributable to the 42 shopping centers acquired and
developed in 1999 and 1998 and $1.7 million in the Core Portfolio Properties is
primarily attributable to an increase in snow removal costs and other
maintenance related costs. These increases were offset by a decrease of $1.4
million relating to the transfer of six shopping center properties into a joint
venture in September 1998 and the transfer of five business center properties to
AIP in August 1998.
Real estate taxes for the three month period ended September 30, 1999
decreased $0.6 million, or 8.3%, to $6.6 million as compared to $7.2 million for
the same period in 1998. Real estate taxes decreased $0.1 million, or 0.7%, to
$19.6 million for the nine month period ended September 30, 1999 from $19.7
million for the same period in 1998. An increase of $3.2 million is related to
the 42 shopping centers acquired and developed in 1999 and 1998 and $0.4 million
in the Core Portfolio Properties. These increases were offset by a decrease of
$3.7 million relating to the transfer of six shopping center properties into a
joint venture in September 1998 and the transfer of five business center
properties to AIP in August 1998.
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<PAGE> 20
General and administrative expenses increased $0.8 million, or 24.5%,
to $4.0 million for the three month period ended September 30, 1999 as compared
to $3.2 million in 1998. General and administrative expenses increased $4.0
million, or 43.2%, to $13.2 million for the nine month period ended September
30, 1999 from $9.2 million for the same period in 1998. Total general and
administrative expenses were approximately 4.2% (3.9% after excluding the
severance charge) and 3.9% of total revenues, including total revenues of joint
ventures, for the nine month period ended September 30, 1999 and 1998,
respectively.
The increase in general and administrative expenses is attributable to
the growth of the Company primarily related to acquisitions, expansions and
developments, relocation of the Company Headquarters to a new office, additional
consulting costs, professional services, several new key executives, and a
severance charge of $0.8 million. The increase was offset by adjustments to
certain variable rate executive incentive compensation accruals of approximately
$0.9 million. The Company continues to maintain a conservative policy with
regard to the expensing of all internal leasing salaries, legal salaries and
related expenses associated with the leasing and re-leasing of existing space.
Depreciation and amortization expense increased $0.9 million, or 7.3%,
to $13.3 million for the three month period ended September 30, 1999 as compared
to $12.4 million for the same period in 1998. Depreciation and amortization
increased $7.5 million, or 23.6%, to $39.1 million for the nine month period
ended September 30, 1999 from $31.6 million for the same period in 1998. An
increase of $9.7 million is related to the 42 shopping centers acquired and
developed in 1999 and 1998, $1.5 million is related to Core Portfolio Properties
and $0.3 million is related to personal property. These increases were offset by
a decrease of $4.0 million relating to the transfer of six shopping center
properties into a joint venture in September 1998 and the transfer of five
business center properties to AIP in August 1998.
Interest expense decreased $0.4 million, or 2.5%, to $16.7 million for
the three month period ended September 30, 1999, as compared to $17.1 million
for the same period in 1998. Interest expense increased $8.2 million, or 19.5%,
to $50.1 million for the nine month period ended September 30, 1999 from $41.9
million for the same period in 1998 and 1999. The overall increase in interest
expense for the nine month period ended September 30, 1999 as compared to the
same period in 1998 is primarily related to the acquisition and development of
shopping centers during 1999 and 1998.
The weighted average debt outstanding during the nine month period
ended September 30, 1999 and related weighted average interest rate was $1.1
billion and 7.2%, respectively, compared to $872.3 million and 7.4%,
respectively, for the same period in 1998. The increase in the weighted average
debt is primarily attributable to the acquisitions, developments and expansions
in 1999 and 1998. Interest costs capitalized, in conjunction with development,
expansion projects and development joint venture interests, were $3.7 million
and $10.4 million for the three and nine month periods ended September 30, 1999,
as compared to $3.3 million and $6.6 million for the same periods in 1998.
Equity in net income of joint ventures increased $0.1 million, or 3.2%,
to $4.6 million for the three month period ended September 30, 1999 as compared
to $4.5 million for the same period in 1998. Equity in net income of joint
ventures increased $3.8 million, or 37.1%, to $13.9 million for the nine month
period ended September 30, 1999 from $10.1 million for the same period in 1998.
This increase is primarily attributable to approximately $4.9 million of income
from the Company's thirteen joint
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<PAGE> 21
venture interests acquired/formed during 1998 and 1999. This increase is offset
by a $1.1 million decrease relating primarily to the reduction of lease
termination income from the Company's Community Center Joint Venture.
Equity in net income of minority equity investment increased $1.3
million, to $1.5 million for the three month period ended September 30, 1999, as
compared to $0.2 million for the same period in 1998. Equity in net income of
minority equity investment increased $4.7 million, to $4.9 million for the nine
month period ended September 30, 1999, as compared to $0.2 million for the same
period in 1998. This increase relates to the Company's investment in AIP which
commenced in August 1998.
The minority equity interest expense increased $1.6 million, to $2.9
million for the three month period ended September 30, 1999, as compared to $1.3
million for the same period in 1998. The minority equity interest expense
increased $6.1 million, to $7.7 million for the nine month period ended
September 30, 1999, as compared to $1.6 million for the same period in 1998.
This increase relates to the Company's purchase of 22 shopping centers in 1998
and 1999 and as consideration, the related issuance of operating partnership
units ("OP Units") which are exchangeable, in certain circumstances and at the
option of the Company, into 4.7 million common shares of the Company or for cash
and the issuance of preferred operating partnership units in December 1998 and
September 1999. This expense represents the income allocation associated with
the priority distributions associated with the minority equity interests.
The loss on disposition of real estate aggregating $1.8 million relates
to the sale of residual land and redevelopment of the undepreciated portion of a
shopping center in Pensacola, Florida. The majority of the center was vacant
prior to redevelopment. The real estate was sold to a major retailer for
approximately $4.7 million.
The extraordinary item, which aggregated $0.9 million for the nine
month period ended September 30, 1998, relates to the write-off of unamortized
deferred finance costs associated with the amended and restated $375 million
unsecured revolving credit facility.
Net Income
Net income increased $1.9 million, or 9.3%, to $22.6 million for the
three month period ended September 30, 1999, as compared to net income of $20.7
million for the same period in 1998. Net income increased $8.6 million, or
15.2%, to $65.6 million for the nine month period ended September 30, 1999, as
compared to $57.0 million for the same period in 1998. The increase in net
income of $8.6 million is primarily attributable to increases in net operating
revenues (total revenues less operating and maintenance, real estate taxes and
general and administrative expense) aggregating $22.7 million, resulting from
new leasing, retenanting and expansion of Core Portfolio Properties and the 42
shopping centers acquired and developed in 1999 and 1998, an increase of $8.5
million relating to equity in net income from joint ventures and minority equity
investment and an increase of $0.9 million relating to the 1998 extraordinary
item. The aggregate increase in net operating revenues, equity in net income
from joint ventures and minority equity investment and extraordinary item was
offset by increases in depreciation, interest, minority interest expense and a
loss on sale of real estate of $7.5 million, $8.2 million, $6.1 million and $1.7
million, respectively.
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<PAGE> 22
FUNDS FROM OPERATIONS
Management believes that funds from operations ("FFO") provides an
additional indicator of the financial performance of a Real Estate Investment
Trust. FFO is defined generally as net income applicable to common shareholders
excluding gains (losses) on sale of property, nonrecurring and extraordinary
items, adjusted for certain non-cash items, principally real property
depreciation and equity income (loss) from its joint ventures and adding the
Company's proportionate share of FFO of its unconsolidated joint ventures,
determined on a consistent basis. The Company calculates FFO in accordance with
the foregoing definition, which is substantially the same as the definition
currently used by the National Association of Real Estate Investment Trusts
("NAREIT"). Certain other real estate companies may calculate FFO in a different
manner. For the three month period ended September 30, 1999, FFO increased $5.3
million, or 17.6%, to $35.4 million as compared to $30.1 million for the same
period in 1998. For the nine month period ended September 30, 1999, FFO
increased $22.2 million, or 27.1%, to $104.1 million as compared to $81.9
million for the same period in 1998. The increase is attributable to increases
in revenues from Core Portfolio Properties, acquisitions and developments. The
Company's calculation of FFO is as follows (in thousands):
<TABLE>
<CAPTION>
Three Month Period Nine Month Period
Ended September 30, Ended September 30,
1999 1998 1999 1998
-------- --------- --------- --------
<S> <C> <C> <C> <C> <C>
Net income applicable to
common shareholders (1) $15,821 $14,702 $ 45,200 $ 43,872
Depreciation of real estate investments 13,034 12,274 38,416 31,243
Equity in net income of joint ventures (4,599) (4,457) (13,940) (10,169)
Equity in net income of minority equity investment (1,478) (154) (4,925) (154)
Joint Ventures' FFO (2) 7,661 5,940 22,437 14,377
Minority equity investment FFO 3,326 428 9,493 428
Minority interest expense (OP Units) 1,646 1,300 4,895 1,411
Loss on sale of real estate -- 36 1,753 36
Extraordinary and non-recurring items -- -- 802 882
------- ------- -------- --------
$35,411 $30,069 $104,131 $ 81,926
======= ======= ======== ========
</TABLE>
(1) Includes straight line rental revenues of approximately $1.1
million and $1.0 million for the three month periods ended September 30, 1999
and 1998, respectively, and approximately $3.2 million and $2.5 million for the
nine month periods ended September 30, 1999 and 1998, respectively, primarily
related to recent acquisitions and new developments.
(2) Joint Ventures' Funds From Operations are summarized as follows:
<TABLE>
<CAPTION>
Three Month Period Nine Month Period
Ended September 30, Ended September 30,
1999 1998 1999 1998
------- -------- -------- --------
<S> <C> <C> <C> <C>
Net income (a) $ 8,381 $13,315 $25,474 $26,365
Gain on sales of real estate -- (5,897) (344) (8,709)
Depreciation of real estate investments 5,748 4,081 16,949 10,618
------- ------- ------- -------
$14,129 $11,499 $42,079 $28,274
======= ======= ======= =======
DDRC Ownership interests (b) $ 7,661 $ 5,940 $22,437 $14,377
======= ======= ======= =======
</TABLE>
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<PAGE> 23
(a) Revenues for the three month periods ended September 30, 1999 and
1998 include approximately $1.0 million and $0.8 million,
respectively, resulting from the recognition of straight line
rents of which the Company's proportionate share is $0.5 million
and $0.4 million, respectively. Revenue for the nine month period
ended September 30, 1999 and 1998, include approximately $3.1
million, and $2.1 million, respectively, resulting from the
recognition of straight line rents of which the Company's
proportionate share is $1.5 million and $1.0 million,
respectively.
(b) At September 30, 1999, the Company owned joint venture interests
relating to 27 operating shopping center properties, a 25%
interest in the Prudential Retail Value Fund and a 50% joint
venture in a real estate management company. At September 30,
1998, the Company owned joint venture interests in 25 operating
shopping center properties.
LIQUIDITY AND CAPITAL RESOURCES
The Company anticipates that cash flow from operating activities will
continue to provide adequate capital for all principal payments, recurring
tenant improvements, as well as dividend payments in accordance with REIT
requirements and that cash on hand, borrowings available under its existing
revolving credit facilities, as well as other debt and equity alternatives,
including the issuance of OP Units and joint venture capital, will provide the
necessary capital to achieve continued growth. Cash flow from operating
activities for the nine month period ended September 30, 1999 increased to
$107.9 million as compared to $99.8 million for the same period in 1998. The
increase is attributable to the 42 shopping center acquisitions and developments
completed in 1999 and 1998, new leasing, expansion and re-tenanting of the core
portfolio properties.
An increase in the 1999 quarterly dividend per common share to $0.35
from $0.3275 was approved in February 1999 by the Company's Board of Directors.
The Company's common share dividend payout ratio for the first three quarters of
1999 approximated 61.8% of the actual FFO as compared to 67.9% for the same
period in 1998. It is anticipated that the current dividend level will result in
a more conservative payout ratio as compared to prior years. A lower payout
ratio will enable the Company to retain more capital which will be utilized for
attractive investment opportunities in the development, acquisition and
expansion of portfolio properties.
During the nine month period ended September 30, 1999, the Company and
its joint ventures invested $237.7 million, net, to acquire, develop, expand,
improve and re-tenant its properties. The Company's expansion acquisition and
development activity is summarized below:
Expansions:
During 1999, the Company and its joint ventures have completed ten
expansion projects at an aggregate cost of $49.6 million. The Company is
currently expanding/redeveloping seven of its shopping centers. The Company is
also scheduled to commence expansion/redevelopment projects at six additional
shopping centers.
Acquisitions:
In July 1999, the Company acquired Deer Valley Towne Center, a 198,000
square foot shopping center in Phoenix, Arizona, for an aggregate purchase price
of $25.8 million.
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<PAGE> 24
In June 1999, DD Development Company, a Company in which DDR owns an
equity ownership interest, acquired Prudential Real Estate Investors' ("PREI")
limited partnership interest in a joint venture, Hendon/DDR/BP, LLC, which owned
15 sites formerly occupied by Best Products at a cost of approximately $29.7
million. As a result, the Company's aggregate investment in the joint venture
increased to approximately $36 million. Ten of the sites are leased as of
September 30, 1999 and two were sold as of September 30, 1999. In addition, in
June 1999, Hendon/DDR/BP, LLC, entered into a $25 million mortgage, with a
financial institution secured by the leased sites. The net financing proceeds
were used to repay advances made by the Company to the joint venture.
In April 1999, the Company acquired a 50% interest in a 206,000 square
foot shopping center in St. Louis, MO. The joint venture's aggregate purchase
price was $16.6 million and included the assumption of debt aggregating $13.0
million.
In August 1998, the Company announced a strategic investment in AIP.
Through December 31, 1998, the Company acquired 5,891,196 common shares of AIP
at aggregate cost of $91.3 million. In January 1999, the Company acquired 3.4
million additional common shares of AIP for approximately $51.8 million. In
August 1999, the Company purchased an additional 354,839 common shares of AIP
for approximately $5.5 million. At September 30, 1999, the Company's investment
in AIP approximated $138.0 million. The Company currently holds approximately
46.0% of the outstanding common shares of AIP.
Development (Wholly Owned):
Through the first nine months of 1999, the Company completed
construction of the following two shopping centers:
o A 185,000 square foot shopping center in Solon, Ohio, which is anchored
by Borders, Bed Bath & Beyond, Mustard Seed (a gourmet grocery store),
Old Navy, Talbots, Pier I and Newman Outfitters.
o A 200,000 square foot second phase of its Erie, Pennsylvania center
anchored by Home Depot (not owned by the Company), PETsMART and Circuit
City.
The Company has three shopping centers under construction and scheduled for
completion in 2000:
o A 280,000 square foot shopping center in Toledo, Ohio, anchored by
Kohl's (which opened in the fourth quarter of 1998), Gander Mountain,
Bed Bath & Beyond and Babies R Us (all of which opened this fall).
o A 210,000 square foot shopping center in Oviedo, Florida (a suburb of
Orlando), Phase I of this project includes Office Max, Michael's, Ross
Dress for Less and Shoe Carnival (all of which opened this fall).
o A 416,000 square foot shopping center in Meridian, Idaho (a suburb of
Boise), which is scheduled for completion in 2000 and is expected to be
anchored by Wal-Mart (not owned by the Company), Shepler's, Shopko, Bed
Bath & Beyond, Office Depot and Old Navy.
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<PAGE> 25
o The Company is also in the initial phase of development relating to a
shopping center located in Riverdale, UT.
Development (Joint Venture):
Through the first nine months of 1999 the Company and its joint
ventures completed construction of the following two shopping centers:
o The Village Shoppes of Salem, a 170,278 square foot shopping center in
Salem, New Hampshire, which is anchored by Best Buy, Linens N' Things,
MVP Sports, Comp USA, Michael's and Big Party.
o Phase I of The Commons, a 310,475 square foot shopping center in
Salisbury, Maryland. Phase I is anchored by Michael's, Office Max,
PETsMART, Home Depot (not owned) and Target (not owned).
During 1998 and 1999, the Company entered into joint venture
development agreements on an additional eight shopping center projects with
various regional developers. These eight projects have an aggregate projected
cost of approximately $342.2 million. Several of these projects have commenced
development and are currently scheduled for completion in 1999 and 2000. The
Company is currently financing the projects located in Round Rock, TX; Everett,
MA; Hagerstown, MD; Deer Park, IL and Plainville, CT through the Prudential/DDR
Retail Value Fund and also intends to finance its investment in the Fenton, MO
project through this Fund.
During the third quarter of 1999, the Company entered into a joint
venture relating to the 642,000 square foot shopping center in Coon Rapids,
Minnesota, the initial phase of which is scheduled to be completed in December
1999 and is anchored by a Kohl's and Jo-Ann, ETC. The Company will own a 25%
equity interest.
The Company, through its affiliate DDR Oliver McMillan, continues to
pursue six urban entertainment and retail projects aggregating 1.2 million
square feet of GLA at a projected cost of approximately $233 million. Two of
these projects are under construction. The remaining projects are scheduled to
commence in 2000 with completion in 2000 and 2001.
FINANCING ACTIVITIES
The acquisitions, developments and expansions in 1999 and 1998 were
financed through cash provided from operating activities, revolving credit
facilities, mortgage debt assumed, construction loans, sale of property,
issuance of OP Units and other joint venture capital. Total debt outstanding at
September 30, 1999 was $1.1 billion compared to $1.0 billion at December 31,
1998.
Commencing in October 1999 through November 12, 1999, the Company
purchased in open market transactions, 1,550,500 of its common shares, at prices
ranging from $13.44 to $14.00, for an aggregate purchase price of approximately
$21.6 million. In February and August 1999, the Company's Board of Directors
authorized the officers of the Company to implement a common share repurchase
program in response to what the Company believed was a distinct undervaluation
of the Company's common shares in the public market. Under the terms authorized
by the Company's Board, as amended in November 1999, the Company may purchase in
the open market, subject to certain requirements, common shares of the Company,
up to a maximum value of $200 million. The Company
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<PAGE> 26
may invest proceeds from the sale of assets to purchase these shares. It is not
the Company's intention to increase the leverage on its balance sheet to
implement this stock repurchase program.
During the second and third quarters of 1999, the Prudential/DDR Retail
Value Fund ("Fund"), a joint venture in which the Company effectively owns a 25%
interest, agreed to acquire the Company's 50% joint venture interests relating
to the development of six shopping centers. The Company was reimbursed by the
Fund approximately $74.3 million associated with development costs incurred on
each of these projects. In addition, the Company transferred its interest in a
shopping center under development in Coon Rapids, MN, a suburb of Minneapolis,
to a joint venture in which the Company retained a 25% interest and was
reimbursed $2.5 million relating to development costs previously incurred on
this project. The Company also sold certain land parcels adjacent to its
shopping center in Wilmington, NC and received aggregate proceeds of
approximately $6.1 million.
In September 1999, the Company completed a $75 million private
placement of 300,000, 8.875% perpetual preferred "down-REIT" preferred
partnership units with an institutional investor. The units are exchangeable,
under certain circumstances, for Class K, 8.875% cumulative preferred shares.
The units may be exchanged into common shares if the Company fails to pay
dividends for six consecutive quarters. The net proceeds of approximately $73.1
million were effectively used to repay approximately $25.8 million in mortgage
indebtedness and $40.1 million in convertible debentures which matured on
August 15, 1999. The balance of these proceeds was used to repay variable rate
borrowings under the Company's revolving credit facilities.
During the nine month period ended September 30, 1999, the Company
issued $2.7 million in OP Units in conjunction with the purchase of certain
expansion areas at two recently acquired shopping centers and the purchase of
joint venture interests. These OP Units are, in certain circumstances and at the
election of the Company, exchangeable into approximately 139,000 common shares
of the Company or for cash.
In January 1999, the Company repaid a third party mortgage of a 50%
owned joint venture partnership aggregating approximately $49.2 million. In
return, the joint venture entered into a corresponding mortgage note payable to
the Company bearing an interest rate of LIBOR plus 2.75%. In addition, the
Company received a loan origination fee for this transaction of $0.4 million. In
March 1999, the joint venture obtained a bridge loan and used the proceeds to
repay the mortgage note to the Company. In June 1999, the joint venture entered
into a 10 year, fixed rate mortgage for $55.5 million at 7.31%.
In March 1999, the Company filed a $750 million shelf registration
statement with the SEC in which the Company may issue common shares, preferred
shares, warrants for common shares or debt.
In March 1999, the Company amended its revolving credit facility with
National City Bank to increase the available borrowings to $25 million from $20
million and to convert it to a secured facility. The credit facility is secured
by certain partnership investments. The Company also maintains the right to
convert the credit facility back to an unsecured credit facility and to reduce
the credit facility amount to $20 million.
At September 30, 1999, the Company's capitalization consisted of $1.1
billion of debt (excluding the Company's proportionate share of joint venture
mortgage debt aggregating $430.0 million), $413.8 million of preferred shares
and preferred partnership units and $924.2 million of market equity (market
equity is defined as common shares and OP Units outstanding multiplied by the
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<PAGE> 27
closing price per common share on the New York Stock Exchange at September 30,
1999 of $14.00), resulting in a debt to total market capitalization ratio of
0.45 to 1. At September 30, 1999, the Company's total debt consisted of $791.9
million of fixed rate debt and $290.0 million of variable rate debt.
It is management's intention that the Company have access to the
capital resources necessary to expand and develop its business. Accordingly, the
Company may seek to obtain funds through additional equity offerings or debt
financing or joint venture capital in a manner consistent with its intention to
operate with a conservative debt capitalization policy and maintain its
investment grade ratings with Moody's Investor Services and Standard and Poor's.
As of September 30, 1999, the Company had $750.0 million available under its
shelf registration statement. In addition, as of September 30, 1999, the Company
had cash of $1.5 million and $167 million available under its $400 million of
revolving credit facilities. On September 30, 1999, the Company also had 113
operating properties with $146.9 million, or 71.4%, of the total revenue for the
nine month period ended September 30, 1999 which were unencumbered, thereby
providing a potential collateral base for future borrowings.
INFLATION
Substantially all of the Company's long-term leases contain provisions
designed to mitigate the adverse impact of inflation. Such provisions include
clauses enabling the Company to receive percentage rentals based on tenants'
gross sales, which generally increase as prices rise, and/or escalation clauses,
which generally increase rental rates during the terms of the leases. Such
escalation clauses are often related to increases in the consumer price index or
similar inflation indices. In addition, many of the Company's leases provide for
fixed rate rental increases or are for terms of less than ten years, which
permits the Company to seek increased rents upon re-rental at market rates. Most
of the Company's leases require the tenants to pay their share of operating
expenses, including common area maintenance, real estate taxes, insurance and
utilities, thereby reducing the Company's exposure to increases in costs and
operating expenses resulting from inflation.
ECONOMIC CONDITIONS
Historically, real estate has been subject to a wide range of cyclical
economic conditions which affect various real estate sectors and geographic
regions with differing intensities and at different times. Adverse changes in
general or local economic conditions, could result in the inability of some
existing tenants of the Company to meet their lease obligations and could
otherwise adversely affect the Company's ability to attract or retain tenants.
The shopping centers are typically anchored by discount department stores
(usually Wal-Mart, Kmart or J.C. Penney), supermarkets, and drug stores which
usually offer day-to-day necessities, rather than high-priced luxury items.
Since these merchants typically perform better in an economic recession than
those who market high priced luxury items, the percentage rents received by the
Company have remained relatively stable. In addition, the Company seeks to
reduce its operating and leasing risks through ownership of a portfolio of
properties with a diverse geographic and tenant base.
YEAR 2000
The Year 2000 issue ("Year 2000") is the result of computer programs
being written using two digits rather than four to define the applicable year.
If not corrected, computer programs that have
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<PAGE> 28
time-sensitive hardware and software may interpret a date using "00" as the year
1900 rather than the year 2000. This situation could result in a system failure
or erroneous results.
The Company believes that it has identified all of its information
technology ("IT") and non-IT systems to assess their Year 2000 readiness.
Critical IT systems include: accounts receivable and rent collections, accounts
payable and general ledger, human resources and payroll (both property and
corporate levels), cash management, fixed assets and computer equipment
(including desktop/laptop computers and data networking equipment). Critical
non-IT systems include property environmental, health safety and security
systems (including elevators and alarm systems) as well as telephone systems,
fax machines and copy machines.
The Company has completed an assessment of its critical IT systems.
Based on that assessment and the assurances of third party software and hardware
system providers, the Company's critical IT systems have been remediated, and
the Company believes that these systems are Year 2000 compliant as of September
30, 1999. The Company has determined its exposure to non-IT systems that are not
Year 2000 compliant and believes that all such systems have been identified and
evaluated. Written confirmation of Year 2000 compliance has been received from
most vendors of non-IT equipment and services; written confirmation of
compliance from some utility service providers is still pending as of September
30, 1999. The Company expects to obtain the remaining written confirmations of
compliance during the fourth quarter of 1999.
To date, the Company has expended approximately $76,000 and expects to
expend an additional $34,000 in connection with upgrading building management,
mechanical and computer systems. The costs of the project and the date on which
the Company believes it will achieve complete Year 2000 compliance are based on
management's best estimates, which were derived utilizing numerous assumptions
of future events, including the continued availability of certain resources and
other factors. However, there can be no guarantee that these estimates will be
achieved and actual results could differ materially from those anticipated.
To date, the Company is not aware of any significant suppliers or
vendors with a Year 2000 issue that would materially impact the Company's
results of operations, liquidity, or capital resources. However, there can be no
assurances that the systems of other companies, on which the Company's systems
rely, will be timely converted and would not have an adverse effect on the
Company's systems.
The Company believes it has an effective program in place that will
resolve the Year 2000 issue in a timely manner. Aside from catastrophic failure
of banks, utilities, or governmental agencies, the Company believes that it
could continue its normal business operations if compliance by the Company is
delayed. The Company does not intend to develop a formal contingency plan, as
the Company believes that all critical systems will be Year 2000 compliant. The
Company does not believe that the Year 2000 issue with materially impact its
results of operations, liquidity or capital resources.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
At September 30, 1999, approximately 73.2% of the Company's debt (not
including joint venture debt) bore interest at fixed rates with a weighted
average maturity of approximately 7.2 years and a weighted average interest rate
of approximately 7.5%. The remainder of the Company's debt bears interest at
variable rates, with a weighted average maturity of approximately 1.5 years and
a weighted average interest rate of approximately 6.4%. As of September 30,
1999, the Company's aggregate joint ventures indebtedness, excluding the
minority equity investment, aggregated $702.5
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<PAGE> 29
million of fixed rate debt, of which the Company's proportionate share was
$354.8 million, and $147.1 million of variable rate debt, of which the Company's
proportionate share was $75.2 million. The Company intends to utilize variable
rate indebtedness available under its revolving credit facilities to initially
fund future acquisitions and developments. Thus, to the extent that the Company
incurs additional variable rate indebtedness, its exposure to increases in
interest rates in an inflationary period would increase. The Company believes,
however, that increases in interest expense as a result of inflation would not
significantly impact the Company's distributable cash flow.
At September 30, 1999, the fair value of the Company's fixed rate debt
amounted to a liability of $769.4 million (excluding joint venture debt)
compared to its carrying amount of $791.9 million. The fair value of the
Company's proportionate share of joint venture fixed rate debt was $338.0
million compared to its carrying amount of $354.8 million. The Company estimates
that a 100 basis point decrease in market interest rates at September 30, 1999
would have changed the fair value of the Company's fixed rate debt and
proportionate share of joint ventures fixed rate debt to a liability of $807.1
million and $350.7 million, respectively. The sensitivity to changes in interest
rate of the Company's fixed rate debt was determined with a valuation model
based upon changes that measure the net present value of such obligations which
arise from the hypothetical estimate discussed above.
The Company intends to continuously monitor and actively manage
interest costs on its variable rate debt portfolio and may enter into swap
positions based on market fluctuations. In addition, the Company believes that
it has the ability to obtain funds through additional equity and/or debt
offerings, including the issuance of medium term notes and joint venture
capital. Accordingly, the cost of obtaining such protection agreements in
relation to the Company's access to capital markets will continue to be
evaluated.
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<PAGE> 30
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Other than routine litigation and administrative proceedings arising in
the ordinary course of business, the Company is not presently involved in any
litigation nor, to its knowledge, is any litigation threatened against the
Company or its properties, which is reasonably likely to have a material adverse
effect on the liquidity or results of operations of the Company.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
In September 1999, the Company issued 300,000 preferred partnership
units which are exchangeable, under certain circumstances, into Class K, 8.875%
cumulative preferred shares. The units are exchangeable for the Company's common
shares if the Partnership fails to make distributions for six consecutive
quarters. This transaction was conducted as a private placement in reliance on
the exemption from registrations provided by Section 4(2) of the securities Act
of 1933, as amended.
In July 1999, the Company issued limited partnership units (the
"Units") which are redeemable for an amount equal to the value of approximately
47,190 of the Company's common shares. The Units are redeemable, subject to the
Company's right to purchase such units for cash or for Company common shares on
a one-for-one basis. This transaction was conducted as a private placement in
reliance on the exemption from registrations provided by Section 4(2) of the
securities Act of 1933, as amended.
ITEM 3. DEFAULTS ON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
3(i) Company's amended articles of corporation
10.1 Employment Agreement, dated April 2, 1999, between the Company and
Scott A. Wolstein
10.2 Employment Agreement, dated April 2, 1999, between the Company and
James A. Schoff
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<PAGE> 31
a) Exhibits -
27 (a) Financial Data Schedule
(b) Date of Report Items Reported
April 23, 1999 Item 5. Other Events
Item 7. Financial Statements,
Proforma Financial Information and
Exhibits
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<PAGE> 32
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 thereunto duly authorized.
DEVELOPERS DIVERSIFIED REALTY CORPORATION
November 15, 1999 /s/ Scott A. Wolstein
----------------- ----------------------------------------
(Date) Scott A. Wolstein, Chairman of the Board
and Chief Executive Officer
November 15, 1999 /s/ William H. Schafer
----------------- -----------------------------------------
(Date) William H. Schafer, Chief Financial Officer
(Principal Financial Officer and Principal
Accounting Officer)
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<PAGE> 1
EXHIBIT 3.1
CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
DEVELOPERS DIVERSIFIED REALTY CORPORATION
WILLIAM H. SCHAFER, Vice President, and JOAN U. ALLGOOD, Secretary, of
Developers Diversified Realty Corporation, an Ohio corporation (the
"Corporation"), do hereby certify that the following resolution to amend the
Amended and Restated Articles of Incorporation of the Corporation was adopted by
a majority vote of the Board of Directors of the Corporation at a meeting held
on August 31, 1999, no greater vote being required by the Amended and Restated
Articles of Incorporation of the Corporation, and pursuant to the authority of
Section 1701.70(B)(1) and 1701.73(A) of the Ohio Revised Code:
RESOLVED, that the Amended and Restated Articles of
Incorporation of the Corporation be amended by adding at the end of
Division A-XI of Article FOURTH thereof a new Section 6 reading as
follows:
Section 6. 8 7/8 % Class K Cumulative Redeemable Preferred
Shares. Of the 750,000 authorized Class K Shares, 350,000 shares are
designated as a series entitled "8 7/8 % Class K Cumulative Redeemable
Preferred Shares" (hereinafter called "8 7/8 % Class K Preferred
Shares"). The 8 7/8 % Class K Preferred Shares shall have the express
terms set forth in this Division as being applicable to all Class K
Preferred Shares as a class and, in addition, the following express
terms applicable to all 8 7/8 % Class K Preferred Shares as a series of
Class K Shares:
(a) The annual dividend rate of the 8 7/8 % Class K Preferred Shares
shall be 8 7/8 % of the liquidation preference of $250.00 per share.
(b) Dividends on the 8 7/8 % Class K Preferred Shares shall be payable,
if declared, quarterly on or about the fifteenth day of January, April,
July and October. The dividends payable for each full quarterly
dividend period on each 8 7/8 % Class K Preferred Shares shall be
$5.546875. Dividends for any period shorter or longer than a full
dividend period on the 8 7/8 % Class K Preferred Shares, shall be
computed on the basis of a 360-day year consisting of twelve 30-day
months. The aggregate dividend payable quarterly to each holder of 8
7/8 % Class K Preferred Shares shall be rounded to the nearest one
one-hundredth of one cent with $.00005 being rounded upward. Each
dividend shall be payable to the holders of record on such record date,
no less than 10 nor more than 30 days preceding the payment date
thereof, as shall be fixed from time to time by the Corporation's Board
of Directors.
<PAGE> 2
(c) Dividends on 8 7/8 % Class K Preferred Shares shall be cumulative
as follows:
(1) With respect to shares included in the initial issue of
8 7/8 % Class K Preferred Shares and shares issued any time
thereafter up to and including the record date for the payment
of the first dividend on the initial issue of 8 7/8 % Class K
Preferred Shares, dividends shall be cumulative from the date
of the initial issue of 8 7/8 % Class K Preferred Shares; and
(2) With respect to shares issued any time after the aforesaid
record date, dividends shall be cumulative from the dividend
payment date next preceding the date of issue of such shares,
except that if such shares are issued during the period
commencing the day after the record date for the payment of a
dividend on 8 7/8 % Class K Preferred Shares and ending on the
payment date of that dividend, dividends with respect to such
shares shall be cumulative from that dividend payment date.
(d) The Corporation may, at any time or from time to time on, at its
option upon not less than thirty (30) nor more than sixty (60) days'
written notice, may redeem all or any part of the 8 7/8 % Class K
Preferred Shares at a redemption price of $250.00 per share plus, in
each case, an amount equal to all dividends accrued and unpaid thereon
to the redemption date, without interest. The redemption price (other
than the portion thereof consisting of accrued and unpaid dividends) is
payable solely out of the sale proceeds of other capital shares of the
Corporation, which may include any equity securities (including common
shares and preferred shares), shares, interests, participation or other
ownership interests (however designated) and any rights (other than
debt securities convertible into or exchangeable for equity
securities), or options to purchase any of the foregoing.
(e) The amount payable per 8 7/8 % Class K Preferred Share in the event
of any voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the Corporation shall be $250.00, plus an amount
equal to all dividends accrued and unpaid thereon to the date of
payment.
(f) The affirmative vote of the holders of at least two-thirds of the
Class K Preferred Shares at the time outstanding, voting separately as
a class, given in person or by proxy either in writing or at a meeting
called for the purpose, shall be necessary to effect the authorization,
creation, increase in the authorized number of or issuance of any
shares, or any security convertible into or exchangeable for shares, in
any such case ranking prior to such series of Class K Preferred Shares
in dividends, distributions or rights upon liquidation, dissolution or
winding up.
<PAGE> 3
IN WITNESS WHEREOF, we have executed this instrument in one or
more counterparts as of the 2nd day of September, 1999.
------------------------------
Name:
Title:
-----------------------------
Name: Joan U. Allgood
Title: Secretary
<PAGE> 4
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
DEVELOPERS DIVERSIFIED CORPORATION
The undersigned, desiring to form a corporation for profit
under Sections 1701.01 to 1701.98, inclusive, of the Ohio Revised Code, does
hereby certify:
FIRST: The name of the Corporation shall be Developers Diversified
Realty Corporation.
SECOND: The place in the State of Ohio where the principal office of
the Corporation is located is Moreland Hills, Cuyahoga County.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be formed under Sections 1701.01 to 1701.98,
inclusive of the Ohio Revised Code.
FOURTH: The authorized number of shares of the Corporation is
109,000,000, consisting of 100,000,000 Common Shares, without par value
(hereinafter called "Common Shares"), 1,500,000 Class A Cumulative Preferred
Shares, without par value (hereinafter called "Class A Shares"), 1,500,000 Class
B Cumulative Preferred Shares, without par value (hereinafter called "Class B
Shares"), 1,500,000 Class C Cumulative Preferred Shares, without par value
(hereinafter called "Class C Shares"), 1,500,000 Class D Cumulative Preferred
Shares, without par value (hereinafter called "Class D Shares"), 1,500,000 Class
E Cumulative Preferred Shares, without par value (hereinafter called "Class E
Shares"), and 1,500,000 Noncumulative Preferred Shares, without par value
(hereinafter called "Noncumulative Shares").
DIVISION A
I. The Class A Cumulative Preferred Shares. The Class A Shares shall
have the following express terms:
Section 1. Series. The Class A Shares may be issued from time
to time in one or more series. All Class A Shares shall be of
equal rank and shall be identical, except in respect of the
matters that may be fixed by the Board of Directors as
hereinafter provided, and each share of a series shall be
identical with all other shares of such series, except as to
the dates from which dividends shall accrue and be cumulative.
All Class A Shares shall rank on a parity with the Class B
Shares, the Class C Shares, the Class D Shares, the Class E
Shares and the Noncumulative Shares and shall be identical to
all Class B Shares, Class C Shares, Class D Shares, Class E
Shares and Noncumulative Shares except (1) in respect of the
matters that may be fixed by the Board of Directors as
provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on Class A Shares,
<PAGE> 5
Class B Shares, Class C Shares, Class D Shares and Class E
Shares shall be cumulative as set forth herein. Subject to the
provisions of Sections 2 through 5, both inclusive, and Item
VII of this Division, which provisions shall apply to all
Class A Shares, the Board of Directors hereby is authorized to
cause such shares to be issued in one or more series and, with
respect to each such series to determine and fix prior to the
issuance thereof (and thereafter, to the extent provided in
clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item I) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Page 2
<PAGE> 6
Section 2. Dividends.
(a) The holders of Class A Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class A Shares, shall be
entitled to receive out of any funds legally available
therefor, and when and as declared by the Board of Directors,
dividends in cash at the rate or rates for such series fixed
in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such
dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be
paid upon or declared or set apart for any series of the Class
A Shares for any dividend period unless at the same time (i) a
like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in
proportion to the respective annual dividend rates fixed
therefor, shall have been paid upon or declared or set apart
for all Class A Shares of all series then issued and
outstanding and entitled to receive such dividend and (ii) the
dividends payable for the dividend periods terminating on the
same or any earlier date (but, with respect to Noncumulative
Shares, only with respect to the then current dividend
period), ratably in proportion to the respective dividend
rates fixed therefor, shall have been paid upon or declared or
set apart for all Class B Shares, Class C Shares, Class D
Shares, Class E Shares and Noncumulative Shares then issued
and outstanding and entitled to receive such dividends.
(b) So long as any Class A Shares shall be outstanding no
dividend, except a dividend payable in Common Shares or other
shares ranking junior to the Class A Shares, shall be paid or
declared or any distribution be made, except as aforesaid, in
respect of the Common Shares or any other shares ranking
junior to the Class A Shares, nor shall any Common Shares or
any other shares ranking junior to the Class A Shares be
purchased, retired or otherwise acquired by the Corporation,
except out of the proceeds of the sale of Common Shares or
other shares of the Corporation ranking junior to the Class A
Shares received by the Corporation subsequent to the date of
first issuance of Class A Shares of any series, unless:
(1) All accrued and unpaid dividends on Class A
Shares, Class B Shares, Class C Shares, Class D Shares and
Class E Shares including the full dividends for all current
dividend periods, shall have been declared and paid or a sum
sufficient for payment thereof set apart;
(2) All unpaid dividends on Noncumulative Shares for
the then current dividend period shall have been declared and
paid or a sum sufficient for payment therefor set apart; and
(3) There shall be no arrearages with respect to the
redemption of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares of any
series from any sinking fund provided for shares of such
series in accordance with the provisions of Section 1 of this
Item I.
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(c) The foregoing restrictions on the payment of dividends or
other distributions on, or on the purchase, redemption
retirement or other acquisition of, Common Shares or any other
shares ranking on a parity with or junior to the Class A
Shares shall be inapplicable to (i) any payments in lieu of
issuance of fractional shares thereof, whether upon any
merger, conversion, stock dividend or otherwise, (ii) the
conversion of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares into
Common Shares, or (iii) the exercise by the Corporation of its
rights pursuant to Item VIII(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital
stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects to
designate as "capital gain dividends" (as defined in Section
857 of the Code), any portion (the "Capital Gains Amount") of
the dividends paid or made available for the year to holders
of all classes of stock (the "Total Dividends"), then, to the
extent permissible under the Code and to the extent it does
not cause any dividends to fail to qualify for the dividends
paid deduction under Section 561 of the Code, the portion of
the Capital Gains Amount that shall be allocable to holders of
the Class A Shares shall be the amount that the total
dividends paid or made available to the holders of the Class A
Shares for the year bears to the Total Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of the Board
of Directors, redeem all or any part of any redeemable series
of Class A Shares at the time outstanding at the applicable
redemption price for such series fixed in accordance with the
provisions of Section 1 of this Item I; and
(2) Shall, from time to time, make such redemptions
of each series of Class A Shares as may be required to fulfill
the requirements of any sinking fund provided for shares of
such series at the applicable sinking fund redemption price
fixed in accordance with the provisions of Section 1 of this
Item I; and shall in each case pay all accrued and unpaid
dividends to the redemption date.
(b) (1) Notice of every such redemption shall be mailed,
postage prepaid, to the holders of record of the Class A
Shares to be redeemed at their respective addresses then
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Item I prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
Corporation may deposit the aggregate redemption price of
Class A Shares to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, with any bank
or trust company in Cleveland, Ohio, or New York, New York,
having capital and
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surplus of not less than $100,000,000, named in such notice
and direct that there be paid to the respective holders of the
Class A Shares so to be redeemed amounts equal to the
redemption price of the Class A Shares so to be redeemed,
together with such accrued and unpaid dividends thereon, on
surrender of the share certificate or certificates held by
such holders; and upon the deposit of such notice in the mail
and the making of such deposit of money with such bank or
trust company, such holders shall cease to be shareholders
with respect to such shares; and from and after the time such
notice shall have been so deposited and such deposit of money
shall have been so made, such holders shall have no rights or
claim against the Corporation with respect to such shares,
except only the right to receive such money from such bank or
trust company without interest or to exercise before the
redemption date any unexpired privileges of conversion. In the
event less than all of the outstanding Class A Shares are to
be redeemed, the Corporation shall select by lot the shares so
to be redeemed in such manner as shall be prescribed by the
Board of Directors.
(2) If the holders of Class A Shares which have been
called for redemption shall not within six years after such
deposit claim the amount deposited for the redemption thereof,
any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank
or trust company and the Corporation shall be relieved of all
responsibility in respect thereof and to such holders.
(c) Any Class A Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series, (3) converted
in accordance with the express terms thereof, or (4) otherwise
acquired by the Corporation, shall resume the status of
authorized but unissued Class A Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item VIII of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital stock hereafter created or
authorized, the Corporation may not purchase or redeem (for
sinking fund purposes or otherwise) less than all of the Class
A Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Class A
Shares, unless all dividends on all Class A Shares then
outstanding for all previous and current dividend periods
shall have been declared and paid or funds therefor set apart
and all accrued sinking fund obligations applicable thereto
shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class A Shares of any series shall
be entitled to receive in full out of the assets of the
Corporation,
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including its capital, before any amount shall be paid or
distributed among the holders of the Common Shares or any
other shares ranking junior to the Class A Shares, the amounts
fixed with respect to shares of such series in accordance with
Section 1 of this Item I, plus an amount equal to all
dividends accrued and unpaid thereon to the date of payment of
the amount due pursuant to such liquidation, dissolution or
winding up of the affairs of the Corporation. In the event the
net assets of the Corporation legally available therefor are
insufficient to permit the payment upon all outstanding Class
A Shares, Class B Shares, Class C Shares, Class D Shares,
Class E Shares and Noncumulative Shares of the full
preferential amount to which they are respectively entitled,
then such net assets shall be distributed ratably upon all
outstanding Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares and Noncumulative Shares in
proportion to the full preferential amount to which each such
share is entitled.
(2) After payment to the holders of Class A Shares of
the full preferential amounts as aforesaid, the holders of
Class A Shares, as such, shall have no right or claim to any
of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or
with any other Corporation, the merger of any other
Corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Class A Shares shall have no voting rights,
except as provided in this Section or required by law.
(b) (1) If, and so often as, the Corporation shall be in
default in the payment of dividends on any series of Class A
Shares at the time outstanding, whether or not earned or
declared, for a number of consecutive dividend payment periods
which in the aggregate contain at least 540 days, all holders
of such Class A Shares, voting separately as a class, together
with all Class B Shares, Class C Shares, Class D Shares, Class
E Shares and Noncumulative Shares upon which like voting
rights have been conferred and are exercisable under the
circumstances described in Subsection 5(c), shall be entitled
to elect, as herein provided, a total of two members of the
Board of Directors of the Corporation; provided, however, that
the holders of such Class A Shares shall not exercise such
special class voting rights except at meetings of such
shareholders for the election of directors at which the
holders of not less than 50% of such Class A Shares are
present in person or by proxy; and provided further, that the
special class voting rights provided for in this paragraph
when the same shall have become vested shall remain so vested
until all accrued and unpaid dividends on such Class A Shares
then outstanding shall have been paid or declared and a sum
sufficient for the payment thereof set aside for payment,
whereupon the holders of such Class A Shares shall be divested
of their special class voting rights in respect of
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subsequent elections of directors, subject to the revesting of
such special class voting rights in the event above specified
in this paragraph.
(2) In the event of default entitling holders of
Class A Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting of such
holders for the purpose of electing such directors shall be
called by the Secretary of the Corporation upon written
request of, or may be called by, the holders of record of at
least 10% of the Class A Shares upon which such default in the
payment of dividends exists and notice thereof shall be given
in the same manner as that required for the annual meeting of
shareholders; provided, however, that the Corporation shall
not be required to call such special meeting if the annual
meeting of shareholders shall be called to be held within 90
days after the date of receipt of the foregoing written
request from the holders of Class A Shares. At any meeting at
which such holders of Class A Shares shall be entitled to
elect directors, holders of 50% of such Class A Shares,
present in person or by proxy, shall be sufficient to
constitute a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at which there
shall be such a quorum shall be sufficient to elect the
members of the Board of Directors which such holders of Class
A Shares are entitled to elect as herein provided.
Notwithstanding any provision of these Amended and Restated
Articles of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by the
holders of any class of shares fixing the number of directors
of the Corporation, the two directors who may be elected by
such holders of Class A Shares pursuant to this Subsection
shall serve in addition to any other directors then in office
or proposed to be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent any
change otherwise permitted in the total number of or
classifications of directors of the Corporation or require the
resignation of any director elected otherwise than pursuant to
this Subsection. Notwithstanding any classification of the
other directors of the Corporation, the two directors elected
by such holders of Class A Shares shall be elected annually
for terms expiring at the next succeeding annual meeting of
shareholders.
(3) Upon any divesting of the special class voting
rights of the holders of the Class A Shares in respect of
elections of directors as provided in this Subsection, the
terms of office of all directors then in office elected by
such holders shall terminate immediately thereupon. If the
office of any director elected by such holders voting as a
class becomes vacant by reason of death, resignation, removal
from office or otherwise, the remaining director elected by
such holders voting as a class may elect a successor who shall
hold office for the unexpired term in respect of which such
vacancy occurred.
(c) If at any time when the holders of Class A Shares are
entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any Class B Shares,
Class C Shares, Class D Shares, Class E Shares or
Noncumulative Shares are entitled to elect directors pursuant
hereto by reason of any default in the payment of dividends
thereon, then the voting rights of the Class A Shares, the
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Class B Shares, the Class C Shares, the Class D Shares, the
Class E Shares and the Noncumulative Shares then entitled to
vote shall be combined (with each class of shares having a
number of votes proportional to the aggregate liquidation
preference of its outstanding shares). In such case, the
holders of Class A Shares and of all such other shares then
entitled so to vote, voting as a class, shall elect such
directors. If the holders of any such other shares have
elected such directors prior to the happening of the default
or event permitting the holders of Class A Shares to elect
directors, or prior to a written request for the holding of a
special meeting being received by the Secretary of the
Corporation as required above, then a new election shall be
held with all such other shares and the Class A Shares voting
together as a single class for such directors, resulting in
the termination of the term of such previously elected
directors upon the election of such new directors.
(d) The affirmative vote of the holders of at least two-thirds
of the Class A Shares at the time outstanding, voting
separately as a class, given in person or by proxy either in
writing or at a meeting called for the purpose, shall be
necessary to effect either of the following:
(1) Any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of Class A Shares which
are set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class A Shares
or of any shares ranking on a parity with or junior to the
Class A Shares nor the amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially preferences or voting or other rights
of the holders of Class A Shares; or
(2) The authorization, creation or increase in the
authorized number of any shares, or any security convertible
into shares, in either case ranking prior to such series of
Class A Shares.
(e) In the event, and only to the extent, that (1) Class A
Shares are issued in more than one series and (2) Ohio law
permits the holders of a series of a class of capital stock to
vote separately as a class, the affirmative vote of the
holders of at least two-thirds of each series of Class A
Shares at the time outstanding, voting separately as a class,
given in person or by proxy either in writing or at a meeting
called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of these Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of
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such series which are set forth in these Amended and Restated
Articles of Incorporation, as amended; provided, however,
neither the amendment of these Amended and Restated Articles
of Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class A Shares
or of any shares ranking on a parity with or junior to the
Class A Shares nor the Amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially the preferences or voting or other
rights of the holders of such series.
Section 6. 9 1/2% Class A Cumulative Redeemable Preferred
Shares. Of the 1,500,000 authorized Class A Shares, 460,000
shares are designated as a series entitled "9 1/2% Class A
Cumulative Redeemable Preferred Shares" (hereinafter called
"9 1/2% Class A Preferred Shares"). The 9 1/2% Class A
Preferred Shares shall have the express terms set forth in
this Item I as being applicable to all Class A Shares as a
class and, in addition, the following express terms applicable
to all 9 1/2% Class A Preferred Shares as a series of Class A
Shares:
(a) The annual dividend rate of the 9 1/2% Class A
Preferred Shares shall be 9 1/2% of the liquidation preference
of $250.00 per share.
(b) Dividends on the 9 1/2% Class A Preferred Shares
shall be payable, if declared, quarterly on or about the 15th
day of March, June, September, and December each year, the
first quarterly dividend being payable, if declared, on
December 15, 1995. The dividends payable for each full
quarterly dividend period on each 9 1/2% Class A Preferred
Shares shall be $5.94.
Dividends for the initial dividend period on the
9 1/2% Class A Preferred Shares, or for any period shorter or
longer than a full dividend period on the 9 1/2% Class A
Preferred Shares, shall be computed on the basis of a 360-day
year consisting of twelve 30-day months. The aggregate
dividend payable quarterly to each holder of 9 1/2% Class A
Preferred Shares shall be rounded to the nearest one
one-hundredth of one cent with $.00005 being rounded upward.
Each dividend shall be payable to the holders of record on
such record date, no less than 10 nor more than 30 days
preceding the payment date thereof, as shall be fixed from
time to time by the Corporation's Board of Directors.
(c) Dividends on 9 1/2% Class A Preferred Shares
shall be cumulative as follows:
(1) With respect to shares included in the
initial issue of 9 1/2% Class A Preferred Shares and
shares issued any time thereafter up to and including
the record date for the payment of the first dividend
on the initial issue of 9 1/2% Class A Preferred
Shares, dividends shall be cumulative from the date
of the initial issue of 9 1/2% Class A Preferred
Shares; and
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(2) With respect to shares issued any time
after the aforesaid record date, dividends shall be
cumulative from the dividend payment date next
preceding the date of issue of such shares, except
that if such shares are issued during the period
commencing the day after the record date for the
payment of a dividend on 9 1/2% Class A Preferred
Shares and ending on the payment date of that
dividend, dividends with respect to such shares shall
be cumulative from that dividend payment date.
(d) Except as required to preserve the Corporation's
status as a real estate investment trust under the Internal
Revenue Code of 1986, as amended, the 9 1/2% Class A Preferred
Shares may not be redeemed prior to November 15, 2000. At any
time or from time to time on and after November 15, 2000 the
Corporation, at its option upon not less than thirty (30) nor
more than sixty (60) days' written notice, may redeem all or
any part of the 9 1/2% Class A Preferred Shares at a
redemption price of $250.00 per share plus, in each case, an
amount equal to all dividends accrued and unpaid thereon to
the redemption date, without interest. The redemption price
(other than the portion thereof consisting of accrued and
unpaid dividends) is payable solely out of the sale proceeds
of other capital shares of the Corporation, which may include
any equity securities (including common shares and preferred
shares), shares, interests, participation or other ownership
interests (however designated) and any rights (other than debt
securities convertible into or exchangeable for equity
securities), or options to purchase any of the foregoing.
(e) The amount payable per 9 1/2% Class A Preferred
Share in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation shall be $250.00, plus an amount equal to all
dividends accrued and unpaid thereon to the date of payment.
(f) All dividend payments made on the 9 1/2% Class A
Preferred Shares, at any time during which the Corporation is
in default in the payment of dividends on such 9 1/2% Class A
Preferred Shares for any dividend period, shall, for the
purposes of Section 5(b)(1) of this Item I, be deemed to be
made in respect of the earliest dividend period with respect
to which the Corporation is in default.
II. The Class B Cumulative Preferred Shares. The Class B Cumulative
Preferred Shares shall have the following express terms:
Section 1. Series. The Class B Shares may be issued from time
to time in one or more series. All Class B Shares shall be of
equal rank and shall be identical, except in respect of the
matters that may be fixed by the Board of Directors as
hereinafter provided, and each share of a series shall be
identical with all other shares of such series, except as to
the dates from which dividends shall accrue and be cumulative.
All Class B Shares shall rank on a parity with the Class A
Shares, the Class C Shares, the Class D Shares, the Class E
Shares and the Noncumulative Shares and shall be identical to
all Class A Shares, Class C Shares, Class D Shares, Class E
Shares and Noncumulative Shares except (1) in respect of the
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matters that may be fixed by the Board of Directors as
provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on the Class A Shares, the
Class B Shares, the Class C Shares, the Class D Shares and the
Class E Shares are cumulative as set forth herein. Subject to
the provisions of Sections 2 through 5, both inclusive, and
Item VII of this Division, which provisions shall apply to all
Class B Shares, the Board of Directors hereby is authorized to
cause such shares to be issued in one or more series and with
respect to each such series to determine and fix prior to the
issuance thereof (and thereafter, to the extent provided in
clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item II) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), both inclusive, of this Section and is
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authorized to take such actions with respect thereto as may be required by law
in order to effect such amendments.
Section 2. Dividends.
(a) The holders of Class B Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class B Shares, shall be
entitled to receive out of any funds legally available
therefor, and when and as declared by the Board of Directors,
dividends in cash at the rate or rates for such series fixed
in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such
dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be
paid upon or declared or set apart for any series of the Class
B Shares for any dividend period unless at the same time (i) a
like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in
proportion to the respective annual dividend rates fixed
therefor, shall have been paid upon or declared or set apart
for all Class B Shares of all series then issued and
outstanding and entitled to receive such dividend and (ii) the
dividends payable for the dividend periods terminating on the
same or any earlier date (but, with respect to the
Noncumulative Shares, only with respect to the then current
dividend period), ratably in proportion to the respective
dividend rates fixed therefor, shall have been paid upon or
declared or set apart for all Class A Shares, Class C Shares,
Class D Shares, Class E Shares and Noncumulative Shares then
issued and outstanding and entitled to receive such dividends.
(b) So long as any Class B Shares shall be outstanding no
dividend, except a dividend payable in Common Shares or other
shares ranking junior to the Class B Shares, shall be paid or
declared or any distribution be made, except as aforesaid, in
respect of the Common Shares or any other shares ranking
junior to the Class B Shares, nor shall any Common Shares or
any other shares ranking junior to the Class B Shares be
purchased, retired or otherwise acquired by the Corporation,
except out of the proceeds of the sale of Common Shares or
other shares of the Corporation ranking junior to the Class B
Shares received by the Corporation subsequent to the date of
first issuance of Class B Shares of any series, unless:
(1) All accrued and unpaid dividends on Class A
Shares, Class B Shares, Class C Shares, Class D Shares and
Class E Shares including the full dividends for all current
dividend periods, shall have been declared and paid or a sum
sufficient for payment thereof set apart;
(2) All unpaid dividends on Noncumulative Shares for
the then current dividend period shall have been declared and
paid or a sum sufficient for payment thereof set apart; and
(3) There shall be no arrearages with respect to the
redemption of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or
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Noncumulative Shares of any series from any sinking fund
provided for shares of such series in accordance with the
provisions of Section 1 of this Item II.
(c) The foregoing restrictions on the payment of dividends or
other distributions on, or on the purchase, redemption,
retirement or other acquisition of, Common Shares or any other
shares ranking on a parity with or junior to the Class B
Shares shall be inapplicable to (i) any payments in lieu of
issuance of fractional shares thereof, whether upon any
merger, conversion, stock dividend or otherwise, (ii) the
conversion of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares into
Common Shares or (iii) the exercise by the Corporation of its
rights pursuant to Item VIII(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital
stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects to
designate as "capital gain dividends" (as defined in Section
857 of the Code), any portion (the "Capital Gains Amount") of
the dividends paid or made available for the year to holders
of all classes of stock (the "Total Dividends"), then, to the
extent permissible under the Code and to the extent that it
does not cause any dividends to fail to qualify for the
dividends paid deduction under Section 561 of the Code, the
portion of the Capital Gains Amount that shall be allocable to
holders of the Class B Shares shall be the amount that the
total dividends paid or made available to the holders of the
Class B Shares for the year bears to the Total Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of the Board
of Directors, redeem all or any part of any redeemable series
of Class B Shares at the time outstanding at the applicable
redemption price for such series fixed in accordance with the
provisions of Section 1 of this Item II; and
(2) Shall, from time to time, make such redemptions
of each series of Class B Shares as may be required to fulfill
the requirements of any sinking fund provided for shares of
such series at the applicable sinking fund redemption price
fixed in accordance with the provisions of Section 1 of this
Item II; and shall in each case pay all accrued and unpaid
dividends to the redemption date.
(b) (1) Notice of every such redemption shall be mailed,
postage prepaid, to the holders of record of the Class B
Shares to be redeemed at their respective addresses then
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Item II prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
Corporation may deposit the
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aggregate redemption price of Class B Shares to be redeemed,
together with accrued and unpaid dividends thereon to the
redemption date, with any bank or trust company in Cleveland,
Ohio, or New York, New York, having capital and surplus of not
less than $100,000,000, named in such notice and direct that
there be paid to the respective holders of the Class B Shares
so to be redeemed amounts equal to the redemption price of the
Class B Shares so to be redeemed, together with such accrued
and unpaid dividends thereon, on surrender of the share
certificate or certificates held by such holders; and upon the
deposit of such notice in the mail and the making of such
deposit of money with such bank or trust company, such holders
shall cease to be shareholders with respect to such shares;
and from and after the time such notice shall have been so
deposited and such deposit of money shall have been so made,
such holders shall have no rights or claim against the
Corporation with respect to such shares, except only the right
to receive such money from such bank or trust company without
interest or to exercise before the redemption date any
unexpired privileges of conversion. In the event less than all
of the outstanding Class B Shares are to be redeemed, the
Corporation shall select by lot the shares so to be redeemed
in such manner as shall be prescribed by the Board of
Directors.
(2) If the holders of Class B Shares which have been
called for redemption shall not within six years after such
deposit claim the amount deposited for the redemption thereof,
any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank
or trust company and the Corporation shall be relieved of all
responsibility in respect thereof and to such holders.
(c) Any Class B Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series, (3) converted
in accordance with the express terms thereof, or (4) otherwise
acquired by the Corporation, shall resume the status of
authorized but unissued Class B Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item VIII of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital stock hereafter created or
authorized, the Corporation may not purchase or redeem (for
sinking fund purposes or otherwise) less than all of the Class
B Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Class B
Shares, unless all dividends on all Class B Shares then
outstanding for all previous and current dividend periods
shall have been declared and paid or funds therefor set apart
and all accrued sinking fund obligations applicable thereto
shall have been complied with.
Section 4. Liquidation.
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(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class B Shares of any series shall
be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be
paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Class B Shares, the
amounts fixed with respect to shares of such series in
accordance with Section 1 of this Item II, plus an amount
equal to all dividends accrued and unpaid thereon to the date
of payment of the amount due pursuant to such liquidation,
dissolution or winding up of the affairs of the Corporation.
In the event the net assets of the Corporation legally
available therefor are insufficient to permit the payment upon
all outstanding Class A Shares, Class B Shares, Class C
Shares, Class D Shares, Class E Shares and Noncumulative
Shares of the full preferential amount to which they are
respectively entitled, then such net assets shall be
distributed ratably upon all outstanding Class A Shares, Class
B Shares, Class C Shares, Class D Shares, Class E Shares and
Noncumulative Shares in proportion to the full preferential
amount to which each such share is entitled.
(2) After payment to the holders of Class B Shares of
the full preferential amounts as aforesaid, the holders of
Class B Shares, as such, shall have no right or claim to any
of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or
with any other Corporation, the merger of any other
corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Class B Shares shall have no voting rights,
except as provided in this Section or required by law.
(b) (1) If, and so often as, the Corporation shall be in
default in the payment of dividends on any series of Class B
Shares at the time outstanding, whether or not earned or
declared, for a number of consecutive dividend payment periods
which in the aggregate contain at least 540 days, all holders
of Class B Shares, voting separately as a class, together with
all Class A Shares, Class C Shares, Class D Shares, Class E
Shares and Noncumulative Shares upon which like voting rights
have been conferred and are exercisable under the
circumstances described in Subsection 5(c), shall be entitled
to elect, as herein provided, a total of two members of the
Board of Directors of the Corporation; provided, however, that
the holders of such Class B Shares shall not exercise such
special class voting rights except at meetings of such
shareholders for the election of directors at which the
holders of not less than 50% of such Class B Shares are
present in person or by proxy; and provided further, that the
special class voting rights provided for in this paragraph
when the same shall have become vested shall remain so vested
until all accrued and unpaid dividends on such Class B Shares
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then outstanding shall have been paid or declared and a sum
sufficient therefor set aside for payment, whereupon the
holders of such Class B Shares shall be divested of their
special class voting rights in respect of subsequent elections
of directors, subject to the revesting of such special class
voting rights in the event above specified in this paragraph.
(2) In the event of default entitling holders of
Class B Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting of such
holders for the purpose of electing such directors shall be
called by the Secretary of the Corporation upon written
request of, or may be called by, the holders of record of at
least 10% of the Class B Shares upon which such default in the
payment of dividends exists and notice thereof shall be given
in the same manner as that required for the annual meeting of
shareholders; provided, however, that the Corporation shall
not be required to call such special meeting if the annual
meeting of shareholders shall be called to be held within 90
days after the date of receipt of the foregoing written
request from the holders of Class B Shares. At any meeting at
which such holders of Class B Shares shall be entitled to
elect directors, holders of 50% of such Class B Shares,
present in person or by proxy, shall be sufficient to
constitute a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at which there
shall be such a quorum shall be sufficient to elect the
members of the Board of Directors which such holders of Class
B Shares are entitled to elect as herein provided.
Notwithstanding any provision of these Amended and Restated
Articles of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by the
holders of any class of shares fixing the number of directors
of the Corporation, the two directors who may be elected by
such holders of Class B Shares pursuant to this Subsection
shall serve in addition to any other directors then in office
or proposed to be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent any
change otherwise permitted in the total number of or
classifications of directors of the Corporation nor require
the resignation of any director elected otherwise than
pursuant to this Subsection. Notwithstanding any
classification of the other directors of the Corporation, the
two directors elected by such holders of Class B Shares shall
be elected annually for terms expiring at the next succeeding
annual meeting of shareholders.
(3) Upon any divesting of the special class voting
rights of the holders of the Class B Shares in respect of
elections of directors as provided in this Subsection, the
terms of office of all directors then in office elected by
such holders shall terminate immediately thereupon. If the
office of any director elected by such holders voting as a
class becomes vacant by reason of death, resignation, removal
from office or otherwise, the remaining director elected by
such holders voting as a class may elect a successor who shall
hold office for the unexpired term in respect of which such
vacancy occurred.
(c) If at any time when the holders of Class B Shares are
entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any
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Class A Shares, Class C Shares, Class D Shares, Class E Shares
or Noncumulative Shares are entitled to elect directors
pursuant hereto by reason of any default in the payment of
dividends thereon, then the voting rights of the Class A
Shares, the Class B Shares, the Class C Shares, the Class D
Shares, the Class E Shares and the Noncumulative Shares then
entitled to vote shall be combined (with class of shares
having a number of votes proportional to the aggregate
liquidation preference of its outstanding shares). In such
case, the holders of Class B Shares and of all such other
shares then entitled so to vote, voting as a class, shall
elect such directors. If the holders of any such other shares
have elected such directors prior to the happening of the
default or event permitting the holders of Class B Shares to
elect directors, or prior to a written request for the holding
of a special meeting being received by the Secretary of the
Corporation as required above, then a new election shall be
held with all such other shares and the Class B Shares voting
together as a single class for such directors, resulting in
the termination of the term of such previously elected
directors upon the election of such new directors.
(d) The affirmative vote of the holders of at least two-thirds
of the Class B Shares at the time outstanding, voting
separately as a class, given in person or by proxy either in
writing or at a meeting called for the purpose, shall be
necessary to effect either of the following:
(1) Any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of Class B Shares which
are set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class B Shares
or of any shares ranking on a parity with or junior to the
Class B Shares nor the amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially preferences or voting or other rights
of the holders of Class B Shares; or
(2) The authorization, creation or increase in the
authorized number of any shares, or any security convertible
into shares, in either case ranking prior to such Class B
Shares.
(e) In the event, and only to the extent, that (1) Class B
Shares are issued in more than one series and (2) Ohio law
permits the holders of a series of a class of capital stock to
vote separately as a class, the affirmative vote of the
holders of at least two-thirds of each series of Class B
Shares at the time outstanding, voting separately as a class,
given in person or by proxy either in writing or at a meeting
called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise,
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of any of the provisions of these Amended and Restated
Articles of Incorporation, as amended, or of the Code of
Regulations of the Corporation which affects adversely and
materially the preferences or voting or other rights of the
holders of such series which are set forth in these Amended
and Restated Articles of Incorporation, as amended; provided,
however, neither the amendment of these Amended and Restated
Articles of Incorporation, as amended, so as to authorize,
create or change the authorized or outstanding number of Class
B Shares or of any shares remaining on a parity with or junior
to the Class B Shares nor the amendment of the provisions of
the Code of Regulations so as to change the number of
classification of directors of the Corporation shall be deemed
to affect adversely and materially preferences or voting or
other rights of the holders of such series.
Section 6. 9.44% Class B Cumulative Redeemable Preferred
Shares. Of the 1,500,000 authorized Class B Shares, 177,500
shares are designated as a series entitled "9.44% Class B
Cumulative Redeemable Preferred Shares" (hereinafter called
"9.44% Class B Preferred Shares"). The 9.44% Class B Preferred
Shares shall have the express terms set forth in this Item II
as being applicable to all Class B Shares as a class and, in
addition, the following express terms applicable to all 9.44%
Class B Preferred Shares as a series of Class B Shares:
(a) The annual dividend rate of the 9.44% Class B
Preferred Shares shall be 9.44% of the liquidation preference
of $250.00 per share.
(b) Dividends on the 9.44% Class B Preferred Shares
shall be payable, if declared, quarterly on or about the 15th
day of March, June, September, and December each year, the
first quarterly dividend being payable, if declared, on March
15, 1996. The dividends payable for each full quarterly
dividend period on each 9.44% Class B Preferred Shares shall
be $5.90.
Dividends for the initial dividend period on the
9.44% Class B Preferred Shares, or for any period shorter or
longer than a full dividend period on the 9.44% Class B
Preferred Shares, shall be computed on the basis of a 360-day
year consisting of twelve 30-day months. The aggregate
dividend payable quarterly to each holder of 9.44% Class B
Preferred Shares shall be rounded to the nearest one
one-hundredth of one cent with $.00005 being rounded upward.
Each dividend shall be payable to the holders of record on
such record date, no less than 10 nor more than 30 days
preceding the payment date thereof, as shall be fixed from
time to time by the Corporation's Board of Directors.
(c) Dividends on 9.44% Class B Preferred Shares shall
be cumulative as follows:
(1) With respect to shares included in the initial
issue of 9.44% Class B Preferred Shares and shares
issued any time thereafter up to and including the
record date for the payment of the first dividend on
the initial issue of 9.44% Class B Preferred Shares,
dividends shall be
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cumulative from the date of the initial issue of
9.44% Class B Preferred Shares; and
(2) With respect to shares issued any time after the
aforesaid record date, dividends shall be cumulative
from the dividend payment date next preceding the
date of issue of such shares, except that if such
shares are issued during the period commencing the
day after the record date for the payment of a
dividend on 9.44% Class B Preferred Shares and ending
on the payment date of that dividend, dividends with
respect to such shares shall be cumulative from that
dividend payment date.
(d) Except as required to preserve the Corporation's
status as a real estate investment trust under the Internal
Revenue Code of 1986, as amended, the 9.44% Class B Preferred
Shares may not be redeemed prior to December 26, 2000. At any
time or from time to time on and after December 26, 2000 the
Corporation, at its option upon not less than thirty (30) nor
more than sixty (60) days' written notice, may redeem all or
any part of the 9.44% Class B Preferred Shares at a redemption
price of $250.00 per share plus, in each case, an amount equal
to all dividends accrued and unpaid thereon to the redemption
date, without interest. The redemption price (other than the
portion thereof consisting of accrued and unpaid dividends) is
payable solely out of the sale proceeds of other capital
shares of the Corporation, which may include any equity
securities (including common shares and preferred shares),
shares, interests, participation or other ownership interests
(however designated) and any rights (other than debt
securities convertible into or exchangeable for equity
securities), or options to purchase any of the foregoing.
(e) The amount payable per 9.44% Class B Preferred
Share in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation shall be $250.00, plus an amount equal to all
dividends accrued and unpaid thereon to the date of payment.
(f) All dividend payments made on the 9.44% Class B
Preferred Shares, at any time during which the Corporation is
in default in the payment of dividends on such 9.44% Class B
Preferred Shares for any dividend period, shall, for the
purposes of Section 5(b)(1) of this Item II, be deemed to be
made in respect of the earliest dividend period with respect
to which the Corporation is in default.
III. The Class C Cumulative Preferred Shares. The Class C Shares shall
have the following express terms:
Section 1. Series. The Class C Shares may be issued from time
to time in one or more series. All Class C Shares shall be of
equal rank and shall be identical, except in respect of the
matters that may be fixed by the Board of Directors as
hereinafter provided, and each share of a series shall be
identical with all other shares of such series, except as to
the dates from which dividends shall accrue and
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be cumulative. All Class C Shares shall rank on a parity with
the Class A Shares, the Class B Shares, the Class D Shares,
the Class E Shares and the Noncumulative Shares and shall be
identical to all Class A Shares, Class B Shares, Class D
Shares, Class E Shares and Noncumulative Shares except (1) in
respect of the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), inclusive,
of this Section 1 and (2) only dividends on Class A Shares,
Class B Shares, Class C Shares, Class D Shares and Class E
Shares shall be cumulative as set forth herein. Subject to the
provisions of Sections 2 through 5, both inclusive, and Item
VII of this Division, which provisions shall apply to all
Class C Shares, the Board of Directors hereby is authorized to
cause such shares to be issued in one or more series and, with
respect to each such series to determine and fix prior to the
issuance thereof (and thereafter, to the extent provided in
clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item III) on the issuance of
shares of the same series or of any other class or series.
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The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class C Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class C Shares, shall be
entitled to receive out of any funds legally available
therefor, and when and as declared by the Board of Directors,
dividends in cash at the rate or rates for such series fixed
in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such
dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be
paid upon or declared or set apart for any series of the Class
C Shares for any dividend period unless at the same time (i) a
like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in
proportion to the respective annual dividend rates fixed
therefor, shall have been paid upon or declared or set apart
for all Class C Shares of all series then issued and
outstanding and entitled to receive such dividend and (ii) the
dividends payable for the dividend periods terminating on the
same or any earlier date (but, with respect to Noncumulative
Shares, only with respect to the then current dividend
period), ratably in proportion to the respective dividend
rates fixed therefor, shall have been paid upon or declared or
set apart for all Class A Shares, Class B Shares, Class D
Shares, Class E Shares and Noncumulative Shares then issued
and outstanding and entitled to receive such dividends.
(b) So long as any Class C Shares shall be outstanding no
dividend, except a dividend payable in Common Shares or other
shares ranking junior to the Class C Shares, shall be paid or
declared or any distribution be made, except as aforesaid, in
respect of the Common Shares or any other shares ranking
junior to the Class C Shares, nor shall any Common Shares or
any other shares ranking junior to the Class C Shares be
purchased, retired or otherwise acquired by the Corporation,
except out of the proceeds of the sale of Common Shares or
other shares of the Corporation ranking junior to the Class C
Shares received by the Corporation subsequent to the date of
first issuance of Class C Shares of any series, unless:
(1) All accrued and unpaid dividends on Class A
Shares, Class B Shares, Class C Shares, Class D Shares and
Class E Shares including the full dividends for all current
dividend periods, shall have been declared and paid or a sum
sufficient for payment thereof set apart;
(2) All unpaid dividends on Noncumulative Shares for
the then current dividend period shall have been declared and
paid or a sum sufficient for payment therefor set apart; and
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(3) There shall be no arrearages with respect to the
redemption of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares of any
series from any sinking fund provided for shares of such
series in accordance with the provisions of Section 1 of this
Item III.
(c) The foregoing restrictions on the payment of dividends or
other distributions on, or on the purchase, redemption
retirement or other acquisition of, Common Shares or any other
shares ranking on a parity with or junior to the Class C
Shares shall be inapplicable to (i) any payments in lieu of
issuance of fractional shares thereof, whether upon any
merger, conversion, stock dividend or otherwise, (ii) the
conversion of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares into
Common Shares, or (iii) the exercise by the Corporation of its
rights pursuant to Item VIII(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital
stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects to
designate as "capital gain dividends" (as defined in Section
857 of the Code), any portion (the "Capital Gains Amount") of
the dividends paid or made available for the year to holders
of all classes of stock (the "Total Dividends"), then, to the
extent permissible under the Code and to the extent it does
not cause any dividends to fail to qualify for the dividends
paid deduction under Section 561 of the Code, the portion of
the Capital Gains Amount that shall be allocable to holders of
the Class C Shares shall be the amount that the total
dividends paid or made available to the holders of the Class C
Shares for the year bears to the Total Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of the Board
of Directors, redeem all or any part of any redeemable series
of Class C Shares at the time outstanding at the applicable
redemption price for such series fixed in accordance with the
provisions of Section 1 of this Item III; and
(2) Shall, from time to time, make such redemptions
of each series of Class C Shares as may be required to fulfill
the requirements of any sinking fund provided for shares of
such series at the applicable sinking fund redemption price
fixed in accordance with the provisions of Section 1 of this
Item III; and shall in each case pay all accrued and unpaid
dividends to the redemption date.
(b) (1) Notice of every such redemption shall be mailed,
postage prepaid, to the holders of record of the Class C
Shares to be redeemed at their respective addresses then
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to
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Section 1 of this Item III prior to the issuance thereof. At
any time after notice as provided above has been deposited in
the mail, the Corporation may deposit the aggregate redemption
price of Class C Shares to be redeemed, together with accrued
and unpaid dividends thereon to the redemption date, with any
bank or trust company in Cleveland, Ohio, or New York, New
York, having capital and surplus of not less than
$100,000,000, named in such notice and direct that there be
paid to the respective holders of the Class C Shares so to be
redeemed amounts equal to the redemption price of the Class C
Shares so to be redeemed, together with such accrued and
unpaid dividends thereon, on surrender of the share
certificate or certificates held by such holders; and upon the
deposit of such notice in the mail and the making of such
deposit of money with such bank or trust company, such holders
shall cease to be shareholders with respect to such shares;
and from and after the time such notice shall have been so
deposited and such deposit of money shall have been so made,
such holders shall have no rights or claim against the
Corporation with respect to such shares, except only the right
to receive such money from such bank or trust company without
interest or to exercise before the redemption date any
unexpired privileges of conversion. In the event less than all
of the outstanding Class C Shares are to be redeemed, the
Corporation shall select by lot the shares so to be redeemed
in such manner as shall be prescribed by the Board of
Directors.
(2) If the holders of Class C Shares which have been
called for redemption shall not within six years after such
deposit claim the amount deposited for the redemption thereof,
any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank
or trust company and the Corporation shall be relieved of all
responsibility in respect thereof and to such holders.
(c) Any Class C Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series, (3) converted
in accordance with the express terms thereof, or (4) otherwise
acquired by the Corporation, shall resume the status of
authorized but unissued Class C Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item VIII of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital stock hereafter created or
authorized, the Corporation may not purchase or redeem (for
sinking fund purposes or otherwise) less than all of the Class
C Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Class C
Shares, unless all dividends on all Class C Shares then
outstanding for all previous and current dividend periods
shall have been declared and paid or funds therefor set apart
and all accrued sinking fund obligations applicable thereto
shall have been complied with.
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Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class C Shares of any series shall
be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be
paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Class C Shares, the
amounts fixed with respect to shares of such series in
accordance with Section 1 of this Item III, plus an amount
equal to all dividends accrued and unpaid thereon to the date
of payment of the amount due pursuant to such liquidation,
dissolution or winding up of the affairs of the Corporation.
In the event the net assets of the Corporation legally
available therefor are insufficient to permit the payment upon
all outstanding Class A Shares, Class B Shares, Class C
Shares, Class D Shares, Class E Shares and Noncumulative
Shares of the full preferential amount to which they are
respectively entitled, then such net assets shall be
distributed ratably upon all outstanding Class A Shares, Class
B Shares, Class C Shares, Class D Shares, Class E Shares and
Noncumulative Shares in proportion to the full preferential
amount to which each such share is entitled.
(2) After payment to the holders of Class C Shares of
the full preferential amounts as aforesaid, the holders of
Class C Shares, as such, shall have no right or claim to any
of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or
with any other Corporation, the merger of any other
Corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Class C Shares shall have no voting rights,
except as provided in this Section or required by law.
(b) (1) If, and so often as, the Corporation shall be in
default in the payment of dividends on any series of Class C
Shares at the time outstanding, whether or not earned or
declared, for a number of consecutive dividend payment periods
which in the aggregate contain at least 540 days, all holders
of such Class C Shares, voting separately as a class, together
with all Class A Shares, Class B Shares, Class D Shares, Class
E Shares and Noncumulative Shares upon which like voting
rights have been conferred and are exercisable under the
circumstances described in Subsection 5(c), shall be entitled
to elect, as herein provided, a total of two members of the
Board of Directors of the Corporation; provided, however, that
the holders of such Class C Shares shall not exercise such
special class voting rights except at meetings of such
shareholders for the election of directors at which the
holders of not less than 50% of such Class C Shares are
present in person or by proxy; and provided further, that the
special class voting rights
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provided for in this paragraph when the same shall have become
vested shall remain so vested until all accrued and unpaid
dividends on such Class C Shares then outstanding shall have
been paid or declared and a sum sufficient for the payment
thereof set aside for payment, whereupon the holders of such
Class C Shares shall be divested of their special class voting
rights in respect of subsequent elections of directors,
subject to the revesting of such special class voting rights
in the event above specified in this paragraph. All dividend
payments made on the Class C Shares, at any time during which
the Corporation is in default in the payment of dividends on
such Class C Shares for any dividend period, shall be deemed
to be made in respect of the earliest dividend period with
respect to which the Corporation is in default.
(2) In the event of default entitling holders of
Class C Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting of such
holders for the purpose of electing such directors shall be
called by the Secretary of the Corporation upon written
request of, or may be called by, the holders of record of at
least 10% of the Class C Shares upon which such default in the
payment of dividends exists and notice thereof shall be given
in the same manner as that required for the annual meeting of
shareholders; provided, however, that the Corporation shall
not be required to call such special meeting if the annual
meeting of shareholders shall be called to be held within 90
days after the date of receipt of the foregoing written
request from the holders of Class C Shares. At any meeting at
which such holders of Class C Shares shall be entitled to
elect directors, holders of 50% of such Class C Shares,
present in person or by proxy, shall be sufficient to
constitute a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at which there
shall be such a quorum shall be sufficient to elect the
members of the Board of Directors which such holders of Class
C Shares are entitled to elect as herein provided.
Notwithstanding any provision of these Amended and Restated
Articles of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by the
holders of any class of shares fixing the number of directors
of the Corporation, the two directors who may be elected by
such holders of Class C Shares pursuant to this Subsection
shall serve in addition to any other directors then in office
or proposed to be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent any
change otherwise permitted in the total number of or
classifications of directors of the Corporation or require the
resignation of any director elected otherwise than pursuant to
this Subsection. Notwithstanding any classification of the
other directors of the Corporation, the two directors elected
by such holders of Class C Shares shall be elected annually
for terms expiring at the next succeeding annual meeting of
shareholders.
(3) Upon any divesting of the special class voting
rights of the holders of the Class C Shares in respect of
elections of directors as provided in this Subsection, the
terms of office of all directors then in office elected by
such holders shall terminate immediately thereupon. If the
office of any director elected by such holders voting as a
class becomes vacant by reason of death,
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resignation, removal from office or otherwise, the remaining
director elected by such holders voting as a class may elect a
successor who shall hold office for the unexpired term in
respect of which such vacancy occurred.
(c) If at any time when the holders of Class C Shares are
entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any Class A Shares,
Class B Shares, Class D Shares, Class E Shares or
Noncumulative Shares are entitled to elect directors pursuant
hereto by reason of any default in the payment of dividends
thereon, then the voting rights of the Class A Shares, the
Class B Shares, the Class C Shares, the Class D Shares, the
Class E Shares and the Noncumulative Shares then entitled to
vote shall be combined (with each class of shares having a
number of votes proportional to the aggregate liquidation
preference of its outstanding shares). In such case, the
holders of Class C Shares and of all such other shares then
entitled so to vote, voting as a class, shall elect such
directors. If the holders of any such other shares have
elected such directors prior to the happening of the default
or event permitting the holders of Class C Shares to elect
directors, or prior to a written request for the holding of a
special meeting being received by the Secretary of the
Corporation as required above, then a new election shall be
held with all such other shares and the Class C Shares voting
together as a single class for such directors, resulting in
the termination of the term of such previously elected
directors upon the election of such new directors.
(d) The affirmative vote of the holders of at least two-thirds
of the Class C Shares at the time outstanding, voting
separately as a class, given in person or by proxy either in
writing or at a meeting called for the purpose, shall be
necessary to effect either of the following:
(1) Any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of Class C Shares which
are set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class C Shares
or of any shares ranking on a parity with or junior to the
Class C Shares nor the amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially preferences or voting or other rights
of the holders of Class C Shares; or
(2) The authorization, creation or increase in the
authorized number of any shares, or any security convertible
into shares, in either case ranking prior to such series of
Class C Shares.
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(e) In the event, and only to the extent, that (1) Class C
Shares are issued in more than one series and (2) Ohio law
permits the holders of a series of a class of capital stock to
vote separately as a class, the affirmative vote of the
holders of at least two-thirds of each series of Class C
Shares at the time outstanding, voting separately as a class,
given in person or by proxy either in writing or at a meeting
called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of these Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of such series which are
set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class C Shares
or of any shares ranking on a parity with or junior to the
Class C Shares nor the Amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially the preferences or voting or other
rights of the holders of such series.
Section 6. 8 3/8% Class C Cumulative Redeemable Preferred
Shares. Of the 1,500,000 authorized Class C Shares, 400,000 shares are
designated as a series entitled "8 3/8% Class C Cumulative Redeemable Preferred
Shares" (hereinafter called "8 3/8% Class C Preferred Shares"). The 8 3/8% Class
C Preferred Shares shall have the express terms set forth in this Division as
being applicable to all Class C Shares as a class and, in addition, the
following express terms applicable to all 8 3/8% Class C Preferred Shares as a
series of Class C Shares:
(a) The annual dividend rate of the 8 3/8% Class C Preferred Shares
shall be 8 3/8% of the liquidation preference of $250.00 per share.
(b) Dividends on the 8 3/8% Class C Preferred Shares shall be payable,
if declared, quarterly on or about the fifteenth day of March, June,
September, and December each year, the first quarterly dividend being
payable, if declared, on September 15, 1998. The dividends payable for
each full quarterly dividend period on each 8 3/8% Class C Preferred
Shares shall be $5.234375.
Dividends for the initial dividend period on the 8 3/8% Class
C Preferred Shares, or for any period shorter or longer than a
full dividend period on the 8 3/8% Class C Preferred Shares,
shall be computed on the basis of a 360-day year consisting of
twelve 30-day months. The aggregate dividend payable quarterly
to each holder of 8 3/8% Class C Preferred Shares shall be
rounded to the nearest one one-hundredth of one cent with
$.00005 being rounded upward. Each dividend shall be payable
to the holders of record on such record date, no less than 10
nor more than 30 days preceding the payment date thereof, as
shall be fixed from time to time by the Corporation's Board of
Directors.
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(c) Dividends on 8 3/8% Class C Preferred Shares shall be cumulative as
follows:
(1) With respect to shares included in the initial issue of
8 3/8% Class C Preferred Shares and shares issued any time
thereafter up to and including the record date for the payment
of the first dividend on the initial issue of 8 3/8% Class C
Preferred Shares, dividends shall be cumulative from the date
of the initial issue of 8 3/8% Class C Preferred Shares; and
(2) With respect to shares issued any time after the aforesaid
record date, dividends shall be cumulative from the dividend
payment date next preceding the date of issue of such shares,
except that if such shares are issued during the period
commencing the day after the record date for the payment of a
dividend on 8 3/8% Class C Preferred Shares and ending on the
payment date of that dividend, dividends with respect to such
shares shall be cumulative from that dividend payment date.
(d) Except as required to preserve the Corporation's status as a real
estate investment trust under the Internal Revenue Code of 1986, as
amended, the 8 3/8% Class C Preferred Shares may not be redeemed prior
to July 7, 2003. At any time or from time to time on and after July 7,
2003 the Corporation, at its option upon not less than thirty (30) nor
more than sixty (60) days' written notice, may redeem all or any part
of the 8 3/8% Class C Preferred Shares at a redemption price of $250.00
per share plus, in each case, an amount equal to all dividends accrued
and unpaid thereon to the redemption date, without interest. The
redemption price (other than the portion thereof consisting of accrued
and unpaid dividends) is payable solely out of the sale proceeds of
other capital shares of the Corporation, which may include any equity
securities (including common shares and preferred shares), shares,
interests, participation or other ownership interests (however
designated) and any rights (other than debt securities convertible into
or exchangeable for equity securities), or options to purchase any of
the foregoing.
(e) The amount payable per 8 3/8% Class C Preferred Share in the event
of any voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the Corporation shall be $250.00, plus an amount
equal to all dividends accrued and unpaid thereon to the date of
payment.
(f) All dividend payments made on the 8 3/8% Class C Preferred Shares,
at any time during which the Corporation is in default in the payment
of dividends on such 8 3/8% Class C Preferred Shares for any dividend
period, shall, for the purposes of Section 5(b)(1) of this Division
A-III, be deemed to be made in respect of the earliest dividend period
with respect to which the Corporation is in default.
IV. The Class D Cumulative Preferred Shares. The Class D Shares shall
have the following express terms:
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Section 1. Series. The Class D Shares may be issued from time
to time in one or more series. All Class D Shares shall be of
equal rank and shall be identical, except in respect of the
matters that may be fixed by the Board of Directors as
hereinafter provided, and each share of a series shall be
identical with all other shares of such series, except as to
the dates from which dividends shall accrue and be cumulative.
All Class D Shares shall rank on a parity with the Class A
Shares, the Class B Shares, the Class C Shares, the Class E
Shares and the Noncumulative Shares and shall be identical to
all Class A Shares, Class B Shares, Class C Shares, Class E
Shares and Noncumulative Shares except (1) in respect of the
matters that may be fixed by the Board of Directors as
provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on Class A Shares, Class B
Shares, Class C Shares, Class D Shares and Class E Shares
shall be cumulative as set forth herein. Subject to the
provisions of Sections 2 through 5, both inclusive, and Item
VII of this Division, which provisions shall apply to all
Class D Shares, the Board of Directors hereby is authorized to
cause such shares to be issued in one or more series and, with
respect to each such series to determine and fix prior to the
issuance thereof (and thereafter, to the extent provided in
clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price
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or prices, any adjustments thereof and all other terms and
conditions upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item IV) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class D Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class D Shares, shall be
entitled to receive out of any funds legally available
therefor, and when and as declared by the Board of Directors,
dividends in cash at the rate or rates for such series fixed
in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such
dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be
paid upon or declared or set apart for any series of the Class
D Shares for any dividend period unless at the same time (i) a
like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in
proportion to the respective annual dividend rates fixed
therefor, shall have been paid upon or declared or set apart
for all Class D Shares of all series then issued and
outstanding and entitled to receive such dividend and (ii) the
dividends payable for the dividend periods terminating on the
same or any earlier date (but, with respect to Noncumulative
Shares, only with respect to the then current dividend
period), ratably in proportion to the respective dividend
rates fixed therefor, shall have been paid upon or declared or
set apart for all Class A Shares, Class B Shares, Class C
Shares, Class E Shares and Noncumulative Shares then issued
and outstanding and entitled to receive such dividends.
(b) So long as any Class D Shares shall be outstanding no
dividend, except a dividend payable in Common Shares or other
shares ranking junior to the Class D Shares, shall be paid or
declared or any distribution be made, except as aforesaid, in
respect of the Common Shares or any other shares ranking
junior to the Class D Shares, nor shall any Common Shares or
any other shares ranking junior to the Class D Shares be
purchased, retired or otherwise acquired by the Corporation,
except out of the proceeds of the sale of Common Shares or
other shares of the Corporation ranking junior to the Class D
Shares received by the Corporation subsequent to the date of
first issuance of Class D Shares of any series, unless:
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(1) All accrued and unpaid dividends on Class A
Shares, Class B Shares, Class C Shares, Class D Shares and
Class E Shares, including the full dividends for all current
dividend periods, shall have been declared and paid or a sum
sufficient for payment thereof set apart;
(2) All unpaid dividends on Noncumulative Shares for
the then current dividend period shall have been declared and
paid or a sum sufficient for payment therefor set apart; and
(3) There shall be no arrearages with respect to the
redemption of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares of any
series from any sinking fund provided for shares of such
series in accordance with the provisions of Section 1 of this
Item IV.
(c) The foregoing restrictions on the payment of dividends or
other distributions on, or on the purchase, redemption
retirement or other acquisition of, Common Shares or any other
shares ranking on a parity with or junior to the Class D
Shares shall be inapplicable to (i) any payments in lieu of
issuance of fractional shares thereof, whether upon any
merger, conversion, stock dividend or otherwise, (ii) the
conversion of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares into
Common Shares, or (iii) the exercise by the Corporation of its
rights pursuant to Item VIII(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital
stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects to
designate as "capital gain dividends" (as defined in Section
857 of the Code), any portion (the "Capital Gains Amount") of
the dividends paid or made available for the year to holders
of all classes of stock (the "Total Dividends"), then, to the
extent permissible under the Code and to the extent it does
not cause any dividends to fail to qualify for the dividends
paid deduction under Section 561 of the Code, the portion of
the Capital Gains Amount that shall be allocable to holders of
the Class D Shares shall be the amount that the total
dividends paid or made available to the holders of the Class D
Shares for the year bears to the Total Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of the Board
of Directors, redeem all or any part of any redeemable series
of Class D Shares at the time outstanding at the applicable
redemption price for such series fixed in accordance with the
provisions of Section 1 of this Item IV; and
(2) Shall, from time to time, make such redemptions
of each series of Class D Shares as may be required to fulfill
the requirements of any sinking fund provided for shares of
such series at the applicable sinking fund redemption price
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fixed in accordance with the provisions of Section 1 of this
Item IV; and shall in each case pay all accrued and unpaid
dividends to the redemption date.
(b) (1) Notice of every such redemption shall be mailed,
postage prepaid, to the holders of record of the Class D
Shares to be redeemed at their respective addresses then
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Item IV prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
Corporation may deposit the aggregate redemption price of
Class D Shares to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, with any bank
or trust company in Cleveland, Ohio, or New York, New York,
having capital and surplus of not less than $100,000,000,
named in such notice and direct that there be paid to the
respective holders of the Class D Shares so to be redeemed
amounts equal to the redemption price of the Class D Shares so
to be redeemed, together with such accrued and unpaid
dividends thereon, on surrender of the share certificate or
certificates held by such holders; and upon the deposit of
such notice in the mail and the making of such deposit of
money with such bank or trust company, such holders shall
cease to be shareholders with respect to such shares; and from
and after the time such notice shall have been so deposited
and such deposit of money shall have been so made, such
holders shall have no rights or claim against the Corporation
with respect to such shares, except only the right to receive
such money from such bank or trust company without interest or
to exercise before the redemption date any unexpired
privileges of conversion. In the event less than all of the
outstanding Class D Shares are to be redeemed, the Corporation
shall select by lot the shares so to be redeemed in such
manner as shall be prescribed by the Board of Directors.
(2) If the holders of Class D Shares which have been
called for redemption shall not within six years after such
deposit claim the amount deposited for the redemption thereof,
any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank
or trust company and the Corporation shall be relieved of all
responsibility in respect thereof and to such holders.
(c) Any Class D Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series, (3) converted
in accordance with the express terms thereof, or (4) otherwise
acquired by the Corporation, shall resume the status of
authorized but unissued Class D Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item VIII of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital
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stock hereafter created or authorized, the Corporation may not
purchase or redeem (for sinking fund purposes or otherwise)
less than all of the Class D Shares then outstanding except in
accordance with a stock purchase offer made to all holders of
record of Class D Shares, unless all dividends on all Class D
Shares then outstanding for all previous and current dividend
periods shall have been declared and paid or funds therefor
set apart and all accrued sinking fund obligations applicable
thereto shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class D Shares of any series shall
be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be
paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Class D Shares, the
amounts fixed with respect to shares of such series in
accordance with Section 1 of this Item IV, plus an amount
equal to all dividends accrued and unpaid thereon to the date
of payment of the amount due pursuant to such liquidation,
dissolution or winding up of the affairs of the Corporation.
In the event the net assets of the Corporation legally
available therefor are insufficient to permit the payment upon
all outstanding Class A Shares, Class B Shares, Class C
Shares, Class D Shares, Class E Shares and Noncumulative
Shares of the full preferential amount to which they are
respectively entitled, then such net assets shall be
distributed ratably upon all outstanding Class A Shares, Class
B Shares, Class C Shares, Class D Shares, Class E Shares and
Noncumulative Shares in proportion to the full preferential
amount to which each such share is entitled.
(2) After payment to the holders of Class D Shares of
the full preferential amounts as aforesaid, the holders of
Class D Shares, as such, shall have no right or claim to any
of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or
with any other Corporation, the merger of any other
Corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Class D Shares shall have no voting rights,
except as provided in this Section or required by law.
(b) (1) If, and so often as, the Corporation shall be in
default in the payment of dividends on any series of Class D
Shares at the time outstanding, whether or not earned or
declared, for a number of consecutive dividend payment periods
which in the aggregate contain at least 540 days, all holders
of such Class D Shares, voting separately as a class, together
with all Class A Shares, Class B Shares,
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Class C Shares, Class E Shares and Noncumulative Shares upon
which like voting rights have been conferred and are
exercisable under the circumstances described in Subsection
5(c), shall be entitled to elect, as herein provided, a total
of two members of the Board of Directors of the Corporation;
provided, however, that the holders of such Class D Shares
shall not exercise such special class voting rights except at
meetings of such shareholders for the election of directors at
which the holders of not less than 50% of such Class D Shares
are present in person or by proxy; and provided further, that
the special class voting rights provided for in this paragraph
when the same shall have become vested shall remain so vested
until all accrued and unpaid dividends on such Class D Shares
then outstanding shall have been paid or declared and a sum
sufficient for the payment thereof set aside for payment,
whereupon the holders of such Class D Shares shall be divested
of their special class voting rights in respect of subsequent
elections of directors, subject to the revesting of such
special class voting rights in the event above specified in
this paragraph. All dividend payments made on the Class D
Shares, at any time during which the Corporation is in default
in the payment of dividends on such Class D Shares for any
dividend period, shall be deemed to be made in respect of the
earliest dividend period with respect to which the Corporation
is in default.
(2) In the event of default entitling holders of
Class D Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting of such
holders for the purpose of electing such directors shall be
called by the Secretary of the Corporation upon written
request of, or may be called by, the holders of record of at
least 10% of the Class D Shares upon which such default in the
payment of dividends exists and notice thereof shall be given
in the same manner as that required for the annual meeting of
shareholders; provided, however, that the Corporation shall
not be required to call such special meeting if the annual
meeting of shareholders shall be called to be held within 90
days after the date of receipt of the foregoing written
request from the holders of Class D Shares. At any meeting at
which such holders of Class D Shares shall be entitled to
elect directors, holders of 50% of such Class D Shares,
present in person or by proxy, shall be sufficient to
constitute a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at which there
shall be such a quorum shall be sufficient to elect the
members of the Board of Directors which such holders of Class
D Shares are entitled to elect as herein provided.
Notwithstanding any provision of these Amended and Restated
Articles of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by the
holders of any class of shares fixing the number of directors
of the Corporation, the two directors who may be elected by
such holders of Class D Shares pursuant to this Subsection
shall serve in addition to any other directors then in office
or proposed to be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent any
change otherwise permitted in the total number of or
classifications of directors of the Corporation or require the
resignation of any director elected otherwise than pursuant to
this Subsection. Notwithstanding any classification of the
other directors of the Corporation, the two directors elected
by such holders of Class D Shares shall be
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elected annually for terms expiring at the next succeeding
annual meeting of shareholders.
(3) Upon any divesting of the special class voting
rights of the holders of the Class D Shares in respect of
elections of directors as provided in this Subsection, the
terms of office of all directors then in office elected by
such holders shall terminate immediately thereupon. If the
office of any director elected by such holders voting as a
class becomes vacant by reason of death, resignation, removal
from office or otherwise, the remaining director elected by
such holders voting as a class may elect a successor who shall
hold office for the unexpired term in respect of which such
vacancy occurred.
(c) If at any time when the holders of Class D Shares are
entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any Class A Shares,
Class B Shares, Class C Shares, Class E Shares or
Noncumulative Shares are entitled to elect directors pursuant
hereto by reason of any default in the payment of dividends
thereon, then the voting rights of the Class A Shares, the
Class B Shares, the Class C Shares, the Class D Shares, the
Class E Shares and the Noncumulative Shares then entitled to
vote shall be combined (with each class of shares having a
number of votes proportional to the aggregate liquidation
preference of its outstanding shares). In such case, the
holders of Class D Shares and of all such other shares then
entitled so to vote, voting as a class, shall elect such
directors. If the holders of any such other shares have
elected such directors prior to the happening of the default
or event permitting the holders of Class D Shares to elect
directors, or prior to a written request for the holding of a
special meeting being received by the Secretary of the
Corporation as required above, then a new election shall be
held with all such other shares and the Class D Shares voting
together as a single class for such directors, resulting in
the termination of the term of such previously elected
directors upon the election of such new directors.
(d) The affirmative vote of the holders of at least two-thirds
of the Class D Shares at the time outstanding, voting
separately as a class, given in person or by proxy either in
writing or at a meeting called for the purpose, shall be
necessary to effect either of the following:
(1) Any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of Class D Shares which
are set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class D Shares
or of any shares ranking on a parity with or junior to the
Class D Shares nor the amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the
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Corporation shall be deemed to affect adversely and materially
preferences or voting or other rights of the holders of Class
D Shares; or
(2) The authorization, creation or increase in the
authorized number of any shares, or any security convertible
into shares, in either case ranking prior to such series of
Class D Shares.
(e) In the event, and only to the extent, that (1) Class D
Shares are issued in more than one series and (2) Ohio law
permits the holders of a series of a class of capital stock to
vote separately as a class, the affirmative vote of the
holders of at least two-thirds of each series of Class D
Shares at the time outstanding, voting separately as a class,
given in person or by proxy either in writing or at a meeting
called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of these Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of such series which are
set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class D Shares
or of any shares ranking on a parity with or junior to the
Class D Shares nor the Amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially the preferences or voting or other
rights of the holders of such series.
Section 6. 8.68% Class D Cumulative Redeemable Preferred
Shares. Of the 1,500,000 authorized Class D Shares, 230,000 shares are
designated as a series entitled "8.68% Class D Cumulative Redeemable Preferred
Shares" (hereinafter called "8.68% Class D Preferred Shares"). The 8.68% Class D
Preferred Shares shall have the express terms set forth in this Division as
being applicable to all Class D Shares as a class and, in addition, the
following express terms applicable to all 8.68% Class D Preferred Shares as a
series of Class D Shares:
(a) The annual dividend rate of the 8.68 % Class D Preferred Shares
shall be 8.68 % of the liquidation preference of $250.00 per share.
(b) Dividends on the 8.68 % Class D Preferred Shares shall be payable,
if declared, quarterly on or about the fifteenth day of March, June,
September, and December each year, the first quarterly dividend being
payable, if declared, on December 15, 1998 The dividends payable for
each full quarterly dividend period on each 8.68 % Class D Preferred
Shares shall be $5.425.
Dividends for the initial dividend period on the 8.68 % Class D Preferred
Shares, or for any period shorter or longer than a full dividend period on the
8.68 % Class D Preferred Shares, shall be computed on the basis of a 360-day
year consisting of twelve 30-day months. The aggregate
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dividend payable quarterly to each holder of 8.68 % Class D Preferred Shares
shall be rounded to the nearest one one-hundredth of one cent with $.00005 being
rounded upward. Each dividend shall be payable to the holders of record on such
record date, no less than 10 nor more than 30 days preceding the payment date
thereof, as shall be fixed from time to time by the Corporation's Board of
Directors.
(c) Dividends on 8.68 % Class D Preferred Shares shall be cumulative as
follows:
(1) With respect to shares included in the initial issue of
8.68 % Class D Preferred Shares and shares issued any time
thereafter up to and including the record date for the payment
of the first dividend on the initial issue of 8.68 % Class D
Preferred Shares, dividends shall be cumulative from the date
of the initial issue of 8.68 % Class D Preferred Shares; and
(2) With respect to shares issued any time after the aforesaid
record date, dividends shall be cumulative from the dividend
payment date next preceding the date of issue of such shares,
except that if such shares are issued during the period
commencing the day after the record date for the payment of a
dividend on 8.68 % Class D Preferred Shares and ending on the
payment date of that dividend, dividends with respect to such
shares shall be cumulative from that dividend payment date.
(d) Except as required to preserve the Corporation's status as a real
estate investment trust under the Internal Revenue Code of 1986, as
amended, the 8.68 % Class D Preferred Shares may not be redeemed prior
to August 20, 2003. At any time or from time to time on and after
August 20, 2003 the Corporation, at its option upon not less than
thirty (30) nor more than sixty (60) days' written notice, may redeem
all or any part of the 8.68 % Class D Preferred Shares at a redemption
price of $250.00 per share plus, in each case, an amount equal to all
dividends accrued and unpaid thereon to the redemption date, without
interest. The redemption price (other than the portion thereof
consisting of accrued and unpaid dividends) is payable solely out of
the sale proceeds of other capital shares of the Corporation, which may
include any equity securities (including common shares and preferred
shares), shares, interests, participation or other ownership interests
(however designated) and any rights (other than debt securities
convertible into or exchangeable for equity securities), or options to
purchase any of the foregoing.
(e) The amount payable per 8.68 % Class D Preferred Share in the event
of any voluntary or involuntary liquidation, dissolution or winding up
of the affairs of the Corporation shall be $250.00, plus an amount
equal to all dividends accrued and unpaid thereon to the date of
payment.
(f) All dividend payments made on the 8.68 % Class D Preferred Shares,
at any time during which the Corporation is in default in the payment
of dividends on such 8.68 % Class D Preferred Shares for any dividend
period, shall, for the purposes of Section 5(b)(1) of this Division
A-IV, be deemed to be made in respect of the earliest dividend period
with respect to which the Corporation is in default.
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V. The Class E Cumulative Preferred Shares. The Class E Shares shall
have the following express terms:
Section 1. Series. The Class E Shares may be issued from time
to time in one or more series. All Class E Shares shall be of
equal rank and shall be identical, except in respect of the
matters that may be fixed by the Board of Directors as
hereinafter provided, and each share of a series shall be
identical with all other shares of such series, except as to
the dates from which dividends shall accrue and be cumulative.
All Class E Shares shall rank on a parity with the Class A
Shares, the Class B Shares, the Class C Shares, the Class D
Shares and the Noncumulative Shares and shall be identical to
all Class A Shares, Class B Shares, Class C Shares, Class D
Shares and Noncumulative Shares except (1) in respect of the
matters that may be fixed by the Board of Directors as
provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on Class A Shares, Class B
Shares, Class C Shares, Class D Shares and Class E Shares
shall be cumulative as set forth herein. Subject to the
provisions of Sections 2 through 5, both inclusive, and Item
VII of this Division, which provisions shall apply to all
Class E Shares, the Board of Directors hereby is authorized to
cause such shares to be issued in one or more series and, with
respect to each such series to determine and fix prior to the
issuance thereof (and thereafter, to the extent provided in
clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
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(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item V) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class E Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class E Shares, shall be
entitled to receive out of any funds legally available
therefor, and when and as declared by the Board of Directors,
dividends in cash at the rate or rates for such series fixed
in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such
dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be
paid upon or declared or set apart for any series of the Class
E Shares for any dividend period unless at the same time (i) a
like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in
proportion to the respective annual dividend rates fixed
therefor, shall have been paid upon or declared or set apart
for all Class E Shares of all series then issued and
outstanding and entitled to receive such dividend and (ii) the
dividends payable for the dividend periods terminating on the
same or any earlier date (but, with respect to Noncumulative
Shares, only with respect to the then current dividend
period), ratably in proportion to the respective dividend
rates fixed therefor, shall have been paid upon or declared or
set apart for all Class A Shares, Class B Shares, Class C
Shares, Class D Shares and Noncumulative Shares then issued
and outstanding and entitled to receive such dividends.
(b) So long as any Class E Shares shall be outstanding no
dividend, except a dividend payable in Common Shares or other
shares ranking junior to the Class E Shares, shall be paid or
declared or any distribution be made, except as aforesaid, in
respect of the Common Shares or any other shares ranking
junior to the Class E Shares, nor shall any Common Shares or
any other shares ranking junior to the Class E Shares be
purchased, retired or otherwise acquired by the Corporation,
except out of the proceeds of the sale of Common Shares or
other shares of the Corporation ranking junior to the Class E
Shares received by the Corporation subsequent to the date of
first issuance of Class E Shares of any series, unless:
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(1) All accrued and unpaid dividends on Class A
Shares, Class B Shares, Class C Shares, Class D Shares and
Class E Shares, including the full dividends for all current
dividend periods, shall have been declared and paid or a sum
sufficient for payment thereof set apart;
(2) All unpaid dividends on Noncumulative Shares for
the then current dividend period shall have been declared and
paid or a sum sufficient for payment therefor set apart; and
(3) There shall be no arrearages with respect to the
redemption of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares of any
series from any sinking fund provided for shares of such
series in accordance with the provisions of Section 1 of this
Item V.
(c) The foregoing restrictions on the payment of dividends or
other distributions on, or on the purchase, redemption
retirement or other acquisition of, Common Shares or any other
shares ranking on a parity with or junior to the Class E
Shares shall be inapplicable to (i) any payments in lieu of
issuance of fractional shares thereof, whether upon any
merger, conversion, stock dividend or otherwise, (ii) the
conversion of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares into
Common Shares, or (iii) the exercise by the Corporation of its
rights pursuant to Item VIII(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital
stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects to
designate as "capital gain dividends" (as defined in Section
857 of the Code), any portion (the "Capital Gains Amount") of
the dividends paid or made available for the year to holders
of all classes of stock (the "Total Dividends"), then, to the
extent permissible under the Code and to the extent it does
not cause any dividends to fail to qualify for the dividends
paid deduction under Section 561 of the Code, the portion of
the Capital Gains Amount that shall be allocable to holders of
the Class E Shares shall be the amount that the total
dividends paid or made available to the holders of the Class E
Shares for the year bears to the Total Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of the Board
of Directors, redeem all or any part of any redeemable series
of Class E Shares at the time outstanding at the applicable
redemption price for such series fixed in accordance with the
provisions of Section 1 of this Item V; and
(2) Shall, from time to time, make such redemptions
of each series of Class E Shares as may be required to fulfill
the requirements of any sinking fund provided for shares of
such series at the applicable sinking fund redemption price
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fixed in accordance with the provisions of Section 1 of this
Item V; and shall in each case pay all accrued and unpaid
dividends to the redemption date.
(b) (1) Notice of every such redemption shall be mailed,
postage prepaid, to the holders of record of the Class E
Shares to be redeemed at their respective addresses then
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Item V prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
Corporation may deposit the aggregate redemption price of
Class E Shares to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, with any bank
or trust company in Cleveland, Ohio, or New York, New York,
having capital and surplus of not less than $100,000,000,
named in such notice and direct that there be paid to the
respective holders of the Class E Shares so to be redeemed
amounts equal to the redemption price of the Class E Shares so
to be redeemed, together with such accrued and unpaid
dividends thereon, on surrender of the share certificate or
certificates held by such holders; and upon the deposit of
such notice in the mail and the making of such deposit of
money with such bank or trust company, such holders shall
cease to be shareholders with respect to such shares; and from
and after the time such notice shall have been so deposited
and such deposit of money shall have been so made, such
holders shall have no rights or claim against the Corporation
with respect to such shares, except only the right to receive
such money from such bank or trust company without interest or
to exercise before the redemption date any unexpired
privileges of conversion. In the event less than all of the
outstanding Class E Shares are to be redeemed, the Corporation
shall select by lot the shares so to be redeemed in such
manner as shall be prescribed by the Board of Directors.
(2) If the holders of Class E Shares which have been
called for redemption shall not within six years after such
deposit claim the amount deposited for the redemption thereof,
any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank
or trust company and the Corporation shall be relieved of all
responsibility in respect thereof and to such holders.
(c) Any Class E Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series, (3) converted
in accordance with the express terms thereof, or (4) otherwise
acquired by the Corporation, shall resume the status of
authorized but unissued Class E Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item VIII of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital
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stock hereafter created or authorized, the Corporation may not
purchase or redeem (for sinking fund purposes or otherwise)
less than all of the Class E Shares then outstanding except in
accordance with a stock purchase offer made to all holders of
record of Class E Shares, unless all dividends on all Class E
Shares then outstanding for all previous and current dividend
periods shall have been declared and paid or funds therefor
set apart and all accrued sinking fund obligations applicable
thereto shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class E Shares of any series shall
be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be
paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Class E Shares, the
amounts fixed with respect to shares of such series in
accordance with Section 1 of this Item V, plus an amount equal
to all dividends accrued and unpaid thereon to the date of
payment of the amount due pursuant to such liquidation,
dissolution or winding up of the affairs of the Corporation.
In the event the net assets of the Corporation legally
available therefor are insufficient to permit the payment upon
all outstanding Class A Shares, Class B Shares, Class C
Shares, Class D Shares, Class E Shares and Noncumulative
Shares of the full preferential amount to which they are
respectively entitled, then such net assets shall be
distributed ratably upon all outstanding Class A Shares, Class
B Shares, Class C Shares, Class D Shares, Class E Shares and
Noncumulative Shares in proportion to the full preferential
amount to which each such share is entitled.
(2) After payment to the holders of Class E Shares of
the full preferential amounts as aforesaid, the holders of
Class E Shares, as such, shall have no right or claim to any
of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or
with any other Corporation, the merger of any other
Corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Class E Shares shall have no voting rights,
except as provided in this Section or required by law.
(b) (1) If, and so often as, the Corporation shall be in
default in the payment of dividends on any series of Class E
Shares at the time outstanding, whether or not earned or
declared, for a number of consecutive dividend payment periods
which in the aggregate contain at least 540 days, all holders
of such Class E Shares, voting separately as a class, together
with all Class A Shares, Class B Shares,
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Class C Shares, Class D Shares and Noncumulative Shares upon
which like voting rights have been conferred and are
exercisable under the circumstances described in Subsection
5(c), shall be entitled to elect, as herein provided, a total
of two members of the Board of Directors of the Corporation;
provided, however, that the holders of such Class E Shares
shall not exercise such special class voting rights except at
meetings of such shareholders for the election of directors at
which the holders of not less than 50% of such Class E Shares
are present in person or by proxy; and provided further, that
the special class voting rights provided for in this paragraph
when the same shall have become vested shall remain so vested
until all accrued and unpaid dividends on such Class E Shares
then outstanding shall have been paid or declared and a sum
sufficient for the payment thereof set aside for payment,
whereupon the holders of such Class E Shares shall be divested
of their special class voting rights in respect of subsequent
elections of directors, subject to the revesting of such
special class voting rights in the event above specified in
this paragraph. All dividend payments made on the Class E
Shares, at any time during which the Corporation is in default
in the payment of dividends on such Class E Shares for any
dividend period, shall be deemed to be made in respect of the
earliest dividend period with respect to which the Corporation
is in default.
(2) In the event of default entitling holders of
Class E Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting of such
holders for the purpose of electing such directors shall be
called by the Secretary of the Corporation upon written
request of, or may be called by, the holders of record of at
least 10% of the Class E Shares upon which such default in the
payment of dividends exists and notice thereof shall be given
in the same manner as that required for the annual meeting of
shareholders; provided, however, that the Corporation shall
not be required to call such special meeting if the annual
meeting of shareholders shall be called to be held within 90
days after the date of receipt of the foregoing written
request from the holders of Class E Shares. At any meeting at
which such holders of Class E Shares shall be entitled to
elect directors, holders of 50% of such Class E Shares,
present in person or by proxy, shall be sufficient to
constitute a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at which there
shall be such a quorum shall be sufficient to elect the
members of the Board of Directors which such holders of Class
E Shares are entitled to elect as herein provided.
Notwithstanding any provision of these Amended and Restated
Articles of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by the
holders of any class of shares fixing the number of directors
of the Corporation, the two directors who may be elected by
such holders of Class E Shares pursuant to this Subsection
shall serve in addition to any other directors then in office
or proposed to be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent any
change otherwise permitted in the total number of or
classifications of directors of the Corporation or require the
resignation of any director elected otherwise than pursuant to
this Subsection. Notwithstanding any classification of the
other directors of the Corporation, the two directors elected
by such holders of Class E Shares shall be
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elected annually for terms expiring at the next succeeding
annual meeting of shareholders.
(3) Upon any divesting of the special class voting
rights of the holders of the Class E Shares in respect of
elections of directors as provided in this Subsection, the
terms of office of all directors then in office elected by
such holders shall terminate immediately thereupon. If the
office of any director elected by such holders voting as a
class becomes vacant by reason of death, resignation, removal
from office or otherwise, the remaining director elected by
such holders voting as a class may elect a successor who shall
hold office for the unexpired term in respect of which such
vacancy occurred.
(c) If at any time when the holders of Class E Shares are
entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any Class A Shares,
Class B Shares, Class C Shares, Class D Shares or
Noncumulative Shares are entitled to elect directors pursuant
hereto by reason of any default in the payment of dividends
thereon, then the voting rights of the Class A Shares, the
Class B Shares, the Class C Shares, the Class D Shares, the
Class E Shares and the Noncumulative Shares then entitled to
vote shall be combined (with each class of shares having a
number of votes proportional to the aggregate liquidation
preference of its outstanding shares). In such case, the
holders of Class E Shares and of all such other shares then
entitled so to vote, voting as a class, shall elect such
directors. If the holders of any such other shares have
elected such directors prior to the happening of the default
or event permitting the holders of Class E Shares to elect
directors, or prior to a written request for the holding of a
special meeting being received by the Secretary of the
Corporation as required above, then a new election shall be
held with all such other shares and the Class E Shares voting
together as a single class for such directors, resulting in
the termination of the term of such previously elected
directors upon the election of such new directors.
(d) The affirmative vote of the holders of at least two-thirds
of the Class E Shares at the time outstanding, voting
separately as a class, given in person or by proxy either in
writing or at a meeting called for the purpose, shall be
necessary to effect either of the following:
(1) Any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of Class E Shares which
are set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class E Shares
or of any shares ranking on a parity with or junior to the
Class E Shares nor the amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the
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Corporation shall be deemed to affect adversely and materially
preferences or voting or other rights of the holders of Class
E Shares; or
(2) The authorization, creation or increase in the
authorized number of any shares, or any security convertible
into shares, in either case ranking prior to such series of
Class E Shares.
(e) In the event, and only to the extent, that (1) Class E
Shares are issued in more than one series and (2) Ohio law
permits the holders of a series of a class of capital stock to
vote separately as a class, the affirmative vote of the
holders of at least two-thirds of each series of Class E
Shares at the time outstanding, voting separately as a class,
given in person or by proxy either in writing or at a meeting
called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of these Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of such series which are
set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class E Shares
or of any shares ranking on a parity with or junior to the
Class E Shares nor the Amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially the preferences or voting or other
rights of the holders of such series.
VI. The Noncumulative Preferred Shares. The Noncumulative Preferred
Shares shall have the following express terms:
Section 1. Series. The Noncumulative Shares may be issued from
time to time in one or more series. All Noncumulative Shares
shall be of equal rank and shall be identical, except in
respect of the matters that may be fixed by the Board of
Directors as hereinafter provided, and each share of a series
shall be identical with all other shares of such series,
except as to the dates on which and the periods for which
dividends may be payable. All Noncumulative Shares shall rank
on a parity with the Class A Shares, the Class B Shares, the
Class C Shares, the Class D Shares and the Class E Shares, and
shall be identical to all Class A Shares, Class B Shares,
Class C Shares, Class D Shares and Class E Shares, except (1)
in respect of the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), inclusive,
of this Section 1 and (2) only dividends on the Noncumulative
Shares are noncumulative as set forth herein. Subject to the
provisions of Sections 2 through 5, inclusive, and Item VII of
this Division, which provisions shall apply to all
Noncumulative Shares, the Board of Directors hereby is
authorized to cause such shares to be issued in one or more
series, and with respect to each such series, to determine and
fix prior to the issuance thereof (and thereafter, to the
extent provided in clause (b) of this Section) the following:
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(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The dates on which and the period or periods for
which dividends, if declared, shall be payable, including the
means by which such dates and periods may be established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item VI) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), both inclusive, of this Section and is authorized to take such
actions with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Noncumulative Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Noncumulative Shares,
shall be entitled to receive out of any funds legally
available therefor, if, when and as declared by the Board of
Directors, dividends in cash at the rate or rates for such
series fixed in accordance with the provisions of Section 1
above and no more, payable on the dates fixed for such series.
Such
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dividends shall accrue, in the case of shares of each
particular series, from and after the date or dates fixed with
respect to such series; provided, however, that if the Board
of Directors fails to declare a dividend payable on a dividend
payment date on any Noncumulative Shares, the holders of the
Noncumulative Shares shall have no right to receive a dividend
in respect of the dividend period ending on such dividend
payment date, and the Corporation shall have no obligation to
pay the dividend accrued for such period, whether or not
dividends on such Noncumulative Shares are declared payable on
any future dividend payment date. No dividends shall be paid
upon or declared or set apart for any series of the
Noncumulative Shares for any dividend period unless at the
same time (i) a like proportionate dividend for the then
current dividend period, ratably in proportion to the
respective annual dividend rates fixed therefor, shall have
been paid upon or declared or set apart for all Noncumulative
Shares of all series then issued and outstanding and entitled
to receive such dividend and (ii) the dividends payable for
the dividend periods terminating on the same or any earlier
date, ratably in proportion to the respective dividend rates
fixed therefor, shall have been paid upon or declared or set
apart for all Class A Shares, Class B Shares, Class C Shares,
Class D Shares and Class E Shares then issued and outstanding
and entitled to receive such dividends.
(b) So long as any Noncumulative Shares shall be outstanding
no dividend, except a dividend payable in Common Shares or
other shares ranking junior to the Noncumulative Shares, shall
be paid or declared or any distribution be made, except as
aforesaid, in respect of the Common Shares or any other shares
ranking junior to the Noncumulative Shares, nor shall any
Common Shares or any other shares ranking junior to the
Noncumulative Shares be purchased, retired or otherwise
acquired by the Corporation, except out of the proceeds of the
sale of Common Shares or other shares of the Corporation
ranking junior to the Noncumulative Shares received by the
Corporation subsequent to the date of first issuance of
Noncumulative Shares of any series, unless:
(1) All accrued and unpaid dividends on Class A
Shares, Class B Shares, Class C Shares, Class D Shares and
Class E Shares including the full dividends for all current
dividend periods, shall have been declared and paid or a sum
sufficient for payment thereof set apart;
(2) All unpaid dividends on Noncumulative Shares for
the then current dividend period shall have been declared and
paid or a sum sufficient for payment therefor set apart; and
(3) There shall be no arrearages with respect to the
redemption of Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares or Noncumulative Shares of any
series from any sinking fund provided for shares of such
series in accordance with the provisions of Section 1 of this
Item VI.
(c) The foregoing restrictions on the payment of dividends or
other distributions on, or on the purchase, redemption
retirement or other acquisition of, Common
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Shares or any other shares ranking on a parity with or junior
to the Noncumulative Shares shall be inapplicable to (i) any
payments in lieu of issuance of fractional shares thereof,
whether upon any merger, conversion, stock dividend or
otherwise, (ii) the conversion of Class A Shares, Class B
Shares, Class C Shares, Class D Shares, Class E Shares or
Noncumulative Shares into Common Shares or (iii) the exercise
by the Corporation of its rights pursuant to Item VIII(d) of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation with respect to any other class or
series of capital stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects to
designate as "capital gain dividends" (as defined in Section
857 of the Code), any portion (the "Capital Gains Amount") of
the dividends paid or made available for the year to holders
of all classes of stock (the "Total Dividends"), then, to the
extent permissible under the Code and to the extent it does
not cause any dividends to fail to qualify for the dividends
paid deduction under Section 561 of the Code, the portion of
the Capital Gains Amount that shall be allocable to holders of
the Noncumulative Shares shall be the amount that the total
dividends paid or made available to the holders of the
Noncumulative Shares for the year bears to the Total
Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of the Board
of Directors, redeem all or any part of any redeemable series
of Noncumulative Shares at the time outstanding at the
applicable redemption price for such series fixed in
accordance with the provisions of Section 1 of this Item VI;
and
(2) Shall, from time to time, make such redemptions
of each series of Noncumulative Shares as may be required to
fulfill the requirements of any sinking fund provided for
shares of such series at the applicable sinking fund
redemption price fixed in accordance with the provisions of
Section 1 of this Item VI; and shall, in each case, pay all
unpaid dividends for the then current dividend period to the
redemption date.
(b) (1) Notice of every such redemption shall be mailed,
postage prepaid, to the holders of record of the Noncumulative
Shares to be redeemed at their respective addresses then
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Item VI prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
Corporation may deposit the aggregate redemption price of
Noncumulative Shares to be redeemed, together with accrued and
unpaid dividends thereon for the then current dividend period
to the redemption date, with any bank or trust company in
Cleveland, Ohio, or New York, New York, having capital and
surplus of not less than $100,000,000, named
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in such notice and direct that there be paid to the respective
holders of the Noncumulative Shares so to be redeemed amounts
equal to the redemption price of the Noncumulative Shares so
to be redeemed together with such accrued and unpaid dividends
thereon for the then current dividend period, on surrender of
the share certificate or certificates held by such holders;
and upon the deposit of such notice in the mail and the making
of such deposit of money with such bank or trust company, such
holders shall cease to be shareholders with respect to such
shares; and from and after the time such notice shall have
been so deposited and such deposit of money shall have been so
made, such holders shall have no rights or claim against the
Corporation with respect to such shares, except only the right
to receive such money from such bank or trust company without
interest or to exercise before the redemption date any
unexpired privileges of conversion. In the event less than all
of the outstanding Noncumulative Shares are to be redeemed,
the Corporation shall select by lot the shares so to be
redeemed in such manner as shall be prescribed by the Board of
Directors.
(2) If the holders of Noncumulative Shares which have
been called for redemption shall not within six years after
such deposit claim the amount deposited for the redemption
thereof, any such bank or trust company shall, upon demand,
pay over to the Corporation such unclaimed amounts and
thereupon such bank or trust company and the Corporation shall
be relieved of all responsibility in respect thereof and to
such holders.
(c) Any Noncumulative Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series, (3) converted
in accordance with the express terms thereof, or (4) otherwise
acquired by the Corporation, shall resume the status of
authorized but unissued Noncumulative Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item VIII of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital stock hereafter created or
authorized, the Corporation may not purchase or redeem (for
sinking fund purposes or otherwise) of less than all of the
Noncumulative Shares then outstanding except in accordance
with a stock purchase offer made to all holders of record of
Noncumulative Shares, unless all dividends on all
Noncumulative Shares then outstanding for the then current
dividend period shall have been declared and paid or funds
therefor set apart and all accrued sinking fund obligations
applicable thereto shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Noncumulative Shares of any series
shall be entitled to receive in full out of the assets of the
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Corporation, including its capital, before any amount shall be
paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Noncumulative Shares,
the amounts fixed with respect to shares of such series in
accordance with Section 1 of this Item VI, plus an amount
equal to all dividends accrued and unpaid thereon for the then
current dividend period to the date of payment of the amount
due pursuant to such liquidation, dissolution or winding up of
the affairs of the Corporation. In the event the net assets of
the Corporation legally available therefor are insufficient to
permit the payment upon all outstanding Class A Shares, Class
B Shares, Class C Shares, Class D Shares, Class E Shares and
Noncumulative Shares of the full preferential amount to which
they are respectively entitled, then such net assets shall be
distributed ratably upon all outstanding Noncumulative Shares
in proportion to the full preferential amount to which each
such share is entitled.
(2) After payment to the holders of Noncumulative
Shares of the full preferential amounts as aforesaid, the
holders of Noncumulative Shares, as such, shall have no right
or claim to any of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into or
with any other Corporation, the merger of any other
Corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Noncumulative Shares shall have no voting
rights, except as provided in this Section or required by law.
(b)(1) If, and so often as, the Corporation shall not have
fully paid, or shall not have declared and set aside a sum
sufficient for the payment of, dividends on any series of
Noncumulative Shares at the time outstanding, for a number of
consecutive dividend payment periods which in the aggregate
contain at least 540 days, the holders of such Noncumulative
Shares, voting separately as a class, together with all Class
A Shares, Class B Shares, Class C Shares, Class D Shares and
Class E Shares upon which like voting rights have been
conferred and are exercisable, shall be entitled to elect, as
herein provided, two members of the Board of Directors of the
Corporation; provided, however, that the holders of such
Noncumulative Shares shall not exercise such special class
voting rights except at meetings of such shareholders for the
election of directors at which the holders of not less than
50% of such Noncumulative Shares are present in person or by
proxy; and provided further, that the special class voting
rights provided for in this paragraph when the same shall have
become vested shall remain so vested until the Corporation
shall have fully paid, or shall have set aside a sum
sufficient for the payment of, dividends on such Noncumulative
Shares then outstanding for a number of consecutive dividend
payment periods which in the aggregate contain at least 360
days, whereupon the holders of such Noncumulative Shares shall
be
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divested of their special class voting rights in respect of
subsequent elections of directors, subject to the revesting of
such special class voting rights in the event above specified
in this paragraph.
(2) In the event of default entitling holders of
Noncumulative Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting of such
holders for the purpose of electing such directors shall be
called by the Secretary of the Corporation upon written
request of, or may be called by, the holders of record of at
least 10% of the Noncumulative Shares upon which such default
in the payment of dividends exists and notice thereof shall be
given in the same manner as that required for the annual
meeting of shareholders; provided, however, that the
Corporation shall not be required to call such special meeting
if the annual meeting of shareholders shall be called to be
held within 90 days after the date of receipt of the foregoing
written request from the holders of Noncumulative Shares. At
any meeting at which such holders of Noncumulative Shares
shall be entitled to elect directors, holders of 50% of such
Noncumulative Shares, present in person or by proxy, shall be
sufficient to constitute a quorum, and the vote of the holders
of a majority of such shares so present at any such meeting at
which there shall be such a quorum shall be sufficient to
elect the members of the Board of Directors which such holders
of Noncumulative Shares are entitled to elect as herein
provided. Notwithstanding any provision of these Amended and
Restated Articles of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by the
holders of any class of shares fixing the number of directors
of the Corporation, the two directors who may be elected by
such holders of Noncumulative Shares pursuant to this
Subsection shall serve in addition to any other directors then
in office or proposed to be elected otherwise than pursuant to
this Subsection. Nothing in this Subsection shall prevent any
change otherwise permitted in the total number of or
classifications of directors of the Corporation nor require
the resignation of any director elected otherwise than
pursuant to this Subsection. Notwithstanding any
classification of the other directors of the Corporation, the
two directors elected by such holders of Noncumulative Shares
shall be elected annually for terms expiring at the next
succeeding annual meeting of shareholders.
(3) Upon any divesting of the special class voting
rights of the holders of the Noncumulative Shares in respect
of elections of directors as provided in this Subsection, the
terms of office of all directors then in office elected by
such holders shall terminate immediately thereupon. If the
office of any director elected by such holders voting as a
class becomes vacant by reason of death, resignation, removal
from office or otherwise, the remaining director elected by
such holders voting as a class may elect a successor who shall
hold office for the unexpired term in respect of which such
vacancy occurred.
(c) If at any time when the holders of Noncumulative Shares
are entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any Class A Shares,
Class B Shares, Class C Shares, Class D Shares and Class E
Shares, are entitled to elect directors pursuant hereto by
reason of any default in
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the payment of dividends thereon, then the voting rights of
the Class A Shares, the Class B Shares, the Class C Shares,
the Class D Shares, the Class E Shares and Noncumulative
Shares then entitled to vote shall be combined (with class of
shares having a number of votes proportional to the aggregate
liquidation preference of its outstanding shares). In such
case, the holders of Noncumulative Shares and of all such
other shares then entitled so to vote, voting as a class,
shall elect such directors. If the holders of any such other
shares have elected such directors prior to the happening of
the default or event permitting the holders of Noncumulative
Shares to elect directors, or prior to a written request for
the holding of a special meeting being received by the
Secretary of the Corporation as required above, then a new
election shall be held with all such other shares and the
Noncumulative Shares voting together as a single class for
such directors, resulting in the termination of the term of
such previously elected directors upon the election of such
new directors.
(d) The affirmative vote of the holders of at least two-thirds
of the Noncumulative Shares at the time outstanding, voting
separately as a class, given in person or by proxy either in
writing or at a meeting called for the purpose, shall be
necessary to effect either of the following:
(1) Any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of the Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of Noncumulative Shares
which are set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Noncumulative
Shares or of any shares ranking on a parity with or junior to
the Noncumulative Shares nor the amendment of the provisions
of the Code of Regulations so as to change the number or
classification of directors of the Corporation shall be deemed
to affect adversely and materially preferences or voting or
other rights of the holders of Noncumulative Shares; or
(2) The authorization, creation or increase in the
authorized number of any shares, or any security convertible
into shares, in either case ranking prior to such
Noncumulative Shares.
(e) In the event, and only to the extent, that (1)
Noncumulative Shares are issued in more than one series and
(2) Ohio law permits the holders of a series of a class of
capital stock to vote separately as a class, the affirmative
vote of the holders of at least two-thirds of each series of
the Noncumulative Shares at the time outstanding, voting
separately as a class, given in person or by proxy either in
writing or at a meeting called for the purpose of voting on
such matters, shall be required for any amendment, alteration
or repeal, whether by merger, consolidation or otherwise, of
any of the provisions of these Amended and Restated Articles
of Incorporation, as amended, or of the Code of Regulations of
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the Corporation which affects adversely and materially the
preferences or voting or other rights of the holders of such
series which are set forth in these Amended and Restated
Articles of Incorporation, as amended; provided, however,
neither the amendment of these Amended and Restated Articles
of Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Noncumulative
Shares or of any shares remaining on a parity with or junior
to the Noncumulative Shares nor the amendment of the
provisions of the Code of Regulations so as to change the
number or classification of directors of the Corporation shall
be deemed to affect adversely and materially preferences or
voting or other rights of the holder of such series.
VII. Definitions. For the purposes of this Division:
(a) Whenever reference is made to shares "ranking prior to"
Class A Shares, Class B Shares, Class C Shares, Class D
Shares, Class E Shares or Noncumulative Shares, such reference
shall mean and include all shares of the Corporation in
respect of which the rights of the holders thereof as to the
payment of dividends or as to distributions in the event of a
voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation are given preference over
the rights of the holders of Class A Shares, Class B Shares,
Class C Shares, Class D Shares, Class E Shares or
Noncumulative Shares, as the case may be;
(b) Whenever reference is made to shares "on a parity with"
Class A Shares, Class B Shares, Class C Shares, Class D
Shares, Class E Shares or Noncumulative Shares, such reference
shall mean and include all shares of the Corporation in
respect of which the rights of the holders thereof as to the
payment of dividends or as to distributions in the event of a
voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the Corporation rank equally (except as
to the amounts fixed therefor) with the rights of the holders
of Class A Shares, Class B Shares, Class C Shares, Class D
Shares, Class E Shares or Noncumulative Shares, as the case
may be; and
(c) Whenever reference is made to shares "ranking junior to"
Class A Shares, Class B Shares, Class C Shares, Class D
Shares, Class E Shares or Noncumulative Shares, such reference
shall mean and include all shares of the Corporation other
than those defined under Subsections (a) and (b) of this
Section as shares "ranking prior to" or "on a parity with"
Class A Shares, Class B Shares, Class C Shares, Class D
Shares, Class E Shares or Noncumulative Shares, as the case
may be.
VIII. Restrictions on Transfer to Preserve Tax Benefit; Shares Subject
to Redemption.
(a) Definitions. For the purposes of this Item VIII of this
Division A of this Article FOURTH, the following terms shall
have the following meanings:
"Beneficial Ownership" shall mean ownership of Preferred
Shares by a Person who would be treated as an owner of such
Preferred Shares either directly or constructively through the
application of Section 544 of the Code, as modified by
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Section 856(h) of the Code. The terms "Beneficial Owner,"
"Beneficially Owns" and "Beneficially Owned" shall have the
correlative meanings.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Constructive Ownership" shall mean ownership of Preferred
Shares by a Person who would be treated as an owner of such
Preferred Shares either directly or constructively through the
application of Section 318 of the Code, as modified by Section
856(d)(5) of the Code. The terms "Constructive Owner,"
"Constructively Owns" and "Constructively Owned" shall have
the correlative meanings.
"Excess Preferred Shares" shall mean any Preferred Shares (i)
acquired or proposed to be acquired by any Person pursuant to
a Transfer to the extent that, if effective, such Transfer
would result in the transferee either Beneficially Owning
Preferred Shares or Constructively Owning Preferred Shares in
excess of the Ownership Limit, or (ii) which are the subject
of a Transfer that, if effective, which would result in the
Corporation being "closely held" within the meaning of Section
856(h) of the Code.
"Market Price" shall mean, with respect to any series of any
class of Preferred Shares, the last reported sales price of
such series reported on the New York Stock Exchange on the
trading day immediately preceding the relevant date or, if
shares of such series are not then traded on the New York
Stock Exchange, the last reported sales price of shares of
such series on the trading day immediately preceding the
relevant date as reported on any exchange or quotation system
over which the shares of such series may be traded, or if
shares of such series are not then traded over any exchange or
quotation system, then the market price of shares of such
series on the relevant date as determined in good faith by the
Board of Directors of the Corporation.
"Ownership Limit" shall mean, with respect to each series of
each class of Preferred Shares, 9.8% of the outstanding shares
of such series.
"Person" shall mean an individual, corporation, partnership,
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, an
association, a private foundation within the meaning of
Section 509(a) of the Code, a joint stock company, other
entity or a group as that term is used for purposes of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended;
provided, however, that a "person" does not mean an
underwriter which participates in a public offering of
Preferred Shares, for a period of 35 days following the
purchase by such underwriter of such Preferred Shares.
"Preferred Shares" shall mean, collectively, Class A Shares,
Class B Shares, Class C Shares, Class D Shares, Class E Shares
and Noncumulative Shares.
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"REIT" shall mean a Real Estate Investment Trust under Section
856 of the Code.
"Transfer" shall mean any sale, transfer, gift, assignment,
devise or other disposition of Preferred Shares (including,
without limitation, (i) the granting of any option or entering
into any agreement for the sale, transfer or other disposition
of Preferred Shares or (ii) the sale, transfer, assignment or
other disposition of any securities or rights convertible into
or exchangeable for Preferred Shares), whether voluntary or
involuntary, whether of record or beneficially and whether by
operation of law or otherwise.
(b) Restrictions on Transfers.
(i) Except as provided in Section (i) of this Item
VIII of this Division A of this Article FOURTH, no Person
shall Beneficially Own or Constructively Own shares of any
series of any class of Preferred Shares in excess of the
Ownership Limit applicable to such series.
(ii) Except as provided in Section (i) of this Item
VIII of this Division A of this Article FOURTH, any Transfer
that, if effective, would result in any Person Beneficially
Owning shares of any series of any class of Preferred Shares
in excess of the Ownership Limit applicable to such series
shall be void ab initio as to the Transfer of such Preferred
Shares which would be otherwise Beneficially Owned by such
Person in excess of such Ownership Limit, and the intended
transferee shall acquire no rights in such Preferred Shares.
(iii) Except as provided in Section (i) of this Item
VIII of this Division A of this Article FOURTH, any Transfer
that, if effective, would result in any Person Constructively
Owning shares of any series of any class of Preferred Shares
in excess of the Ownership Limit applicable to such series
shall be void ab initio as to the Transfer of such Preferred
Shares which would be otherwise Constructively Owned by such
Person in excess of such amount, and the intended transferee
shall acquire no rights in such Preferred Shares.
(iv) Notwithstanding any other provisions contained
in this Item VIII, any Transfer (whether or not such Transfer
is the result of a transaction entered into through the
facilities of the New York Stock Exchange) or other event
that, if effective, would result in the Corporation being
"closely held" within the meaning of Section 856(h) of the
Code, or would otherwise result in the Corporation failing
to qualify as a REIT (including, but not limited to, a
Transfer or other event that would result in the Corporation
owning (directly or Constructively) an interest in a tenant
that is described in Section 856(d)(2)(B) of the Code if the
income derived by the Corporation from such tenant would cause
the Corporation to fail to satisfy any of the gross income
requirement of Section 856(c) of the Code) shall be void ab
initio as to the Transfer of the Preferred Shares or other
event which would cause the Corporation to be "closely held"
within the meaning of Section 856(h) of the Code or would
otherwise result in the Corporation failing
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to qualify as a REIT; and the intended transferee or owner or
Constructive or Beneficial Owner shall acquire or retain no
rights in such Preferred Shares.
(v) For purposes of construing the foregoing
provisions, any attempt to transfer Preferred Shares in
violation of the Ownership Limit applicable to the series of
the class of such Preferred Shares (as such Ownership Limit
may be modified by the Board of Directors pursuant to Section
(h) of Item VIII) shall be construed as causing such Preferred
Shares to be transferred by operation of law to the
Corporation as trustee of a trust for the exclusive benefit of
the person or persons to whom such Preferred Shares can
ultimately be transferred without violating the Ownership
Limit and any Excess Preferred Shares while held in such trust
shall not have any voting rights, shall not be considered for
purposes of any shareholder vote or for determining a quorum
for such a vote, and shall not be entitled to any dividends or
other distributions.
(c) Remedies for Breach. If the Board of Directors or its
designees shall at any time determine in good faith that a
Transfer has taken place in violation of Section (b) of Item
VIII of this Division A of this Article FOURTH or that a
Person intends to acquire or has attempted to acquire
beneficial ownership (determined without reference to any
rules of attribution), Beneficial Ownership or Constructive
Ownership of any Preferred Shares of the Corporation in
violation of Section (b) of Item VIII of this Division A of
this Article FOURTH, or that any such Transfer, intended or
attempted acquisition or acquisition would jeopardize the
status of the Corporation as a REIT under the Code, the Board
of Directors or its designees shall take such actions as it
deems advisable to refuse to give effect or to prevent such
Transfer, including, but not limited to, refusing to give
effect to such Transfer on the books of the Corporation or
instituting proceedings to enjoin such Transfer and, in
addition, exercising its rights under Section (d) of Item VIII
of this Division A of Article FOURTH.
(d) Purchase Right in Excess Preferred Shares. Beginning on
the date of the occurrence of a Transfer which, if
consummated, in the good faith judgment of the Board of
Directors of the Corporation, could result in Excess Preferred
Shares the Excess Preferred Shares, subject to such transfer
shall be deemed to have been offered for sale to the
Corporation, or its designee, at a price per share equal to
the lesser of (i) the price per share in the transaction that
created such Excess Preferred Shares (or, in the case of a
devise or gift, the Market Price at the time of such devise or
gift) and (ii) the Market Price on the date the Corporation,
or its designee, accepts such offer. The Corporation shall
have the right to accept such offer for a period of 90 days
after the later of (i) the date of such Transfer and (ii) if
the Corporation does not receive a notice of such Transfer
pursuant to Section (e) of Item VIII of this Division A of
this Article FOURTH, the date the Board of Directors
determines in good faith that such Transfer has occurred.
Prompt payment of the purchase price shall be made in such
reasonable manner as may be determined by the Corporation.
From and after the date fixed for purchase by the Corporation,
and so long as payment of the purchase price for the Excess
Preferred Shares to be so purchased shall have been made or
duly provided for,
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the holder of any Excess Preferred Shares so called for
purchase shall cease to be entitled to dividends,
distributions, voting rights and other benefits with respect
to such Excess Preferred Shares, excepting only the right to
payment of the purchase price fixed as aforesaid. Any dividend
or distribution paid to a proposed transferee of Excess
Preferred Shares prior to the discovery by the Corporation
that the Excess Preferred Shares have been transferred in
violation of Section (b) of Item VIII of this Division A of
this Article FOURTH shall be repaid to the Corporation upon
demand. If the foregoing provisions are determined to be void
or invalid by virtue of any legal decision, statute, rule or
regulation, then the intended transferee of such Excess
Preferred Shares shall be deemed, at the option of the
Corporation, to have acted as agent on behalf of the
Corporation in acquiring such Excess Preferred Shares and to
hold such Excess Preferred Shares on behalf of the
Corporation.
(e) Notice of Restricted Transfer. Any Person who acquires or
attempts to acquire Preferred Shares or other securities in
violation of subparagraph (b) of this Item VIII, or any Person
who owns or will own Excess Preferred Shares as a result of an
event under subparagraph (b) of this Item VIII, shall
immediately give written notice to the Corporation of such
event and shall provide to the Corporation such other
information as the Corporation may request in order to
determine the effect, if any, of such Transfer or attempted
Transfer or other event on the Corporation's status as a REIT.
(f) Owners Required to Provide Information. From and after the
date of the Initial Public Offering:
(i) every Beneficial Owner of more than 5.0% (or such
other percentage, between 0.5% and 5.0%, as provided in the
regulations promulgated pursuant to the Code) of the
outstanding Preferred Shares of the Corporation shall, within
30 days after January 1 of each year, give written notice to
the Corporation stating the name and address of such
Beneficial Owner, the number of shares Beneficially Owned, and
description of how such shares are held. Each such Beneficial
Owner shall provide to the Corporation such additional
information as the Corporation may request in order to
determine the effect, if any, of such Beneficial Ownership on
the Corporation's status as a REIT.
(ii) each Person who is a Beneficial Owner or
Constructive Owner of Preferred Shares and each Person
(including the shareholder of record) who is holding Preferred
Shares for a Beneficial Owner or Constructive Owner shall
provide to the Corporation such information that the
Corporation may request, in good faith, in order to determine
the Corporation's status as a REIT.
(g) Remedies Not Limited. Nothing contained in this Division A
of this Article FOURTH shall limit the authority of the Board
of Directors to take such other action as it deems necessary
or advisable to protect the Corporation and the interests of
its shareholders by preservation of the Corporation's status
as a REIT.
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(h) Ambiguity. In the case of an ambiguity in the application
of any of the provisions of Item VIII of this Division A of
this Article FOURTH, including any definition contained in
Section (a) of Item VIII, the Board of Directors shall have
the power to determine the application of the provisions of
this Item VIII with respect to any situation based on the
facts known to it.
(i) Exceptions.
(i) Subject to Section (b)(iv) of this Item VIII of
this Division A, the Board of Directors may exempt a Person
from the Ownership Limit applicable to a series of a class of
Preferred Shares if such Person is not an individual (other
than pension plans described in Section 856(h)(3)) for
purposes of Section 542(a)(2) of the Code if the Board of
Directors obtains such representations and undertakings from
such Person as are reasonably necessary to ascertain that no
individual's Beneficial Ownership of such Preferred Shares
will violate the Ownership Limit, and agrees that any
violation or attempted violation will result in such Preferred
Shares in excess of the Ownership Limit being subject to
repurchase by the Corporation as set forth in Section (d) of
Item VIII of this Division A of this Article FOURTH.
(ii) The Board of Directors may exempt a Person from
the limitation on such Person Constructively Owning Preferred
Shares in excess of the Ownership Limit applicable to a series
of a class of such Preferred Shares if such Person does not
own and represents that it will not own, directly or
constructively (by virtue of the application of Section 318 of
the Code, as modified by Section 856(d)(5) of the Code), more
than a 9.8% interest (as set forth in Section 856(d)(2)(B)) in
a tenant of any real property owned or leased by the
Corporation, if the Board of Directors obtains such
representations and undertakings from such Person as are
reasonably necessary to ascertain this fact and agrees that
any violation or attempted violation will result in such
Preferred Shares in excess of the Ownership Limit being deemed
to be Excess Preferred Shares and subject to repurchase by the
Corporation as set forth in Section (d) of Item VIII of this
Division A of this Article FOURTH.
IX. Legend. Each certificate for Preferred Shares shall bear the
following legend:
"The Preferred Shares represented by this certificate are subject to
restrictions on transfer for the purpose of the corporation's maintenance of its
status as a Real Estate Investment Trust under the Internal Revenue Code of
1986, as amended. Subject to certain provisions of the Corporation's Articles of
Incorporation, no Person may Beneficially Own or Constructively Own shares of
any series of any class of Preferred Shares in excess of 9.8% of the outstanding
Preferred Shares of such series. Any Person who attempts to Beneficially Own or
Constructively Own shares of any series of any class of Preferred Shares in
excess of the above limitations must immediately notify the Corporation. All
capitalized terms in this legend have the meanings defined in the Corporation's
Articles of Incorporation, a copy of which, including the restrictions on
transfer, will be sent without charge to each shareholder who so requests. If
the restrictions on transfer are violated, certain of the Preferred Shares
represented hereby may be subject to
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repurchase by the Corporation on the terms and conditions set forth in the
Corporation's Articles of Incorporation.
DIVISION B
Subject to the terms of the Class A Cumulative Preferred Shares, the
Class B Cumulative Preferred Shares, the Class C Cumulative Preferred Shares,
the Class D Cumulative Preferred Shares, the Class E Cumulative Preferred Shares
and the Noncumulative Preferred Shares, the Common Shares shall have the
following express terms:
Section 1. Dividend Rights. The holders of Common Shares shall be
entitled to receive, when, as and if declared by the Board of Directors of the
Corporation, out of the assets of the Corporation which are by law available
therefor, dividends or distributions payable in cash, in property or in
securities of the Corporation.
Section 2. Rights Upon Liquidation. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of, or any distribution of
the assets of, the Corporation, each holder of Common Shares shall be entitled
to receive, ratably with each other holder of Common Shares, that portion of the
assets of the Corporation available for distribution to its shareholders as the
number of Common Shares held by such holder bears to the total number of Common
Shares then outstanding.
Section 3. Voting Rights. The holders of Common Shares shall be
entitled to vote on all matters (for which holders of Common Shares shall be
entitled to vote thereon) at all meetings of the shareholders of the
Corporation, and shall be entitled to one vote for each Common Share entitled to
vote at such meeting.
Section 4. Restrictions on Transfer to Preserve Tax Benefit; Common
Shares Subject to Redemption.
(a) Definitions. For the purposes of this Section 4 of this
Division B of this Article FOURTH, the following terms shall
have the following meanings:
"Beneficial Ownership" shall mean ownership of Common Shares
by a Person who would be treated as an owner of such Common
Shares either directly or constructively 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 the
correlative meanings.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Constructive Ownership" shall mean ownership of Common Shares
by a Person who would be treated as an owner of such Common
Shares either directly or Constructively through the
application of Section 318 of the Code, as modified by Section
856(d)(5) of the Code. The terms "Constructive Owner,"
"Constructively Owns" and "Constructively Owned" shall have
the correlative meanings.
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"Excess Shares" shall mean any Common Shares (i) acquired or
proposed to be acquired by any Person (other than an Existing
Holder) pursuant to a Transfer to the extent that, if
effective, such Transfer would result in the transferee either
(A) Beneficially Owning Common Shares in excess of the
Ownership Limit or (B) Constructively Owning Common Shares in
excess of the Related Party Limit, (ii) acquired or proposed
to be acquired by an Existing Holder pursuant to a Transfer to
the extent that, if effective, such Transfer would result in
such Existing Holder Beneficially Owning Common Shares in
excess of the Existing Holder Limit for such Existing Holder,
or (iii) which are the subject of a Transfer that, if
effective, which would result in (A) the Common Shares being
owned by fewer than 100 Persons (determined without reference
to any rules of attribution), or (B) the Corporation being
"closely held" within the meaning of Section 856(h) of the
Code.
"Existing Holder" shall mean (i) Bert L. Wolstein, (ii) Scott
A. Wolstein, (iii) James A. Schoff, and (iv) any Person to
whom an Existing Holder Transfers Beneficial Ownership of
Common Shares causing such transferee to Beneficially Own
Common Shares in excess of the Ownership Limit.
"Existing Holder Limit" (i) for any Existing Holder who is an
Existing Holder by virtue of clause (i), (ii) or (iii) of the
definition thereof, shall mean, initially, the percentage of
the outstanding Common Shares Beneficially Owned by such
Existing Holder upon the consummation of the Initial Public
Offering, and after any adjustment pursuant to Section (4)(i)
of this Division B of this Article FOURTH, shall mean such
percentage of the outstanding Common Shares as so adjusted;
and (ii) for any Existing Holder who becomes an Existing
Holder by virtue of clause (iv) of the definition thereof,
shall mean, initially, the percentage of the outstanding
Common Shares Beneficially Owned by such Existing Holder at
the time that such Existing Holder becomes an Existing Holder,
and after any adjustment pursuant to Section 4(i) of this
Division B of this Article FOURTH, shall mean such percentage
of the outstanding Common Shares as so adjusted. From and
after the date of the Initial Public Offering, the secretary
of the Corporation shall maintain and, upon request, make
available to each Existing Holder, a schedule which sets forth
the then current Existing Holder Limits for each Existing
Holder.
"Initial Public Offering" means the sale of Common Shares
pursuant to the Corporation's first effective registration
statement for such Common Shares filed under the Securities
Act of 1933, as amended.
"Market Price" shall mean the last reported sales price of
Common Shares reported on the New York Stock Exchange on the
trading day immediately preceding the relevant date or, if the
Common Shares are not then traded on the New York Stock
Exchange, the last reported sales price of the Common Shares
on the trading day immediately preceding the relevant date as
reported on any exchange or quotation system over which the
Common Shares may be traded, or if the Common Shares are not
then traded over any exchange or quotation system,
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then the market price of the Common Shares on the relevant
date as determined in good faith by the Board of Directors of
the Corporation.
"Ownership Limit" shall mean 5.0% of the outstanding Common
Shares of the Corporation.
"Person" shall mean an individual, corporation, partnership,
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, an
association, a private foundation within the meaning of
Section 509(a) of the Code, a joint stock company, other
entity or a group as that term is used for purposes of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended;
provided, however, that a "Person" does not mean an
underwriter which participates in a public offering of the
Common Shares, for a period of 35 days following the purchase
by such underwriter of the Common Shares.
"REIT" shall mean a Real Estate Investment Trust under Section
856 of the Code.
"Related Party Limit" shall mean 9.8% of the outstanding
Common Shares of the Corporation.
"Transfer" shall mean any sale, transfer, gift, assignment,
devise or other disposition of Common Shares (including,
without limitation, (i) the granting of any option or entering
into any agreement for the sale, transfer or other disposition
of Common Shares or (ii) the sale, transfer, assignment or
other disposition of any securities or rights convertible into
or exchangeable for Common Shares), whether voluntary or
involuntary, whether of record or beneficially and whether by
operation of law or otherwise.
(b) Restrictions on Transfers.
(i) Except as provided in Section 4(i) of this
Division B of this Article FOURTH, from and after the date of
the Initial Public Offering, no Person (other than an Existing
Holder) shall Beneficially Own Common Shares in excess of the
Ownership Limit and no Existing Holder shall Beneficially Own
Common Shares in excess of the Existing Holder Limit for such
Existing Holder.
(ii) Except as provided in Section 4(i) of this
Division B of this Article FOURTH, from and after the date of
the Initial Public Offering, any Transfer that, if effective,
would result in any Person (other than an Existing Holder)
Beneficially Owning Common Shares in excess of the Ownership
Limit shall be void ab initio as to the Transfer of such
Common Shares which would be otherwise Beneficially Owned by
such Person in excess of the Ownership Limit, and the intended
transferee shall acquire no rights in such Common Shares.
(iii) Except as provided in Section 4(i) of this
Division B of this Article FOURTH, from and after the date of
the Initial Public Offering, any Transfer that,
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if effective, would result in any Existing Holder Beneficially
Owning Common Shares in excess of the applicable Existing
Holder Limit shall be void ab initio as to the Transfer of
such Common Shares which would be otherwise Beneficially Owned
by such Existing Holder in excess of the applicable Existing
Holder Limit, and such Existing Holder shall acquire no rights
in such Common Shares.
(iv) Except as provided in Section 4(i) of this
Division B of this Article FOURTH, from and after the date of
the Initial Public Offering, any Transfer that, if effective,
would result in any Person Constructively Owning Common Shares
in excess of the Related Party Limit shall be void ab initio
as to the Transfer of such Common Shares which would be
otherwise Constructively Owned by such Person in excess of
such amount, and the intended transferee shall acquire no
rights in such Common Shares.
(v) Except as provided in Section 4(i) of this
Division B of this Article FOURTH, from and after the date of
the Initial Public Offering, any Transfer that, if effective,
would result in the Common Shares being beneficially owned by
less than 100 Persons (determined without reference to any
rules of attribution) shall be void ab initio as to the
Transfer of such Common Shares which would be otherwise
beneficially owned by the transferee, and the intended
transferee shall acquire no rights in such Common Shares.
(vi) From and after the date of the Initial Public
Offering, any Transfer that, if effective, would result in the
Corporation being "closely held" within the meaning of Section
856(h) of the Code shall be void ab initio as to the Transfer
of the Common Shares which would cause the Corporation to be
"closely held" within the meaning of Section 856(h) of the
Code, and the intended transferee shall acquire no rights in
such Common Shares.
(c) Remedies for Breach. If the Board of Directors or its
designees shall at any time determine in good faith that a
Transfer has taken place in violation of Section 4(b) of this
Division B of this Article FOURTH or that a Person intends to
acquire or has attempted to acquire beneficial ownership
(determined without reference to any rules of attribution),
Beneficial Ownership or Constructive Ownership of any Common
Shares of the Corporation in violation of Section 4(b) of this
Division B of this Article FOURTH, or that any such Transfer,
intended or attempted acquisition or acquisition would
jeopardize the status of the Corporation as a REIT under the
Code, the Board of Directors or its designees shall take such
actions as it deems advisable to refuse to give effect or to
prevent such Transfer, including, but not limited to, refusing
to give effect to such Transfer on the books of the
Corporation or instituting proceedings to enjoin such Transfer
and, in addition, exercising its rights under Section 4(d) of
this Division B of this Article FOURTH.
(d) Purchase Right in Excess Shares. Beginning on the date of
the occurrence of a Transfer which, if consummated, in the
good faith judgment of the Board of Directors of the
Corporation, could result in Excess Shares, such Excess Shares
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shall be deemed to have been offered for sale to the
Corporation, or its designee, at a price per share equal to
the lesser of (i) the price per share in the transaction that
created such Excess Shares (or, in the case of a devise or
gift, the Market Price at the time of such devise or gift) and
(ii) the Market Price on the date the Corporation, or its
designee, accepts such offer. The Corporation shall have the
right to accept such offer for a period of ninety days after
the later of (i) the date of such Transfer and (ii) if the
Corporation does not receive a notice of such Transfer
pursuant to Section 4(e) of this Division B of this Article
FOURTH, the date the Board of Directors determines in good
faith that such Transfer has occurred. Prompt payment of the
purchase price shall be made in such reasonable manner as may
be determined by the Corporation. From and after the date
fixed for purchase by the Corporation, and so long as payment
of the purchase price for the Excess Shares to be so purchased
shall have been made or duly provided for, the holder of any
Excess Shares so called for purchase shall cease to be
entitled to dividends, distributions, voting rights and other
benefits with respect to such Excess Shares, excepting only
the right to payment of the purchase price fixed as aforesaid.
Any dividend or distribution paid to a proposed transferee of
Excess Shares prior to the discovery by the Corporation that
the Excess Shares have been transferred in violation of
Section 4(b) of this Division B of this Article FOURTH shall
be repaid to the Corporation upon demand. If the foregoing
provisions are determined to be void or invalid by virtue of
any legal decision, statute, rule or regulation, then the
intended transferee of such Excess Shares shall be deemed, at
the option of the Corporation, to have acted as agent on
behalf of the Corporation in acquiring such Excess Shares and
to hold such Excess Shares on behalf of the Corporation.
(e) Notice of Restricted Transfer. Any Person who acquires or
intends to acquire shares in violation of Section 4(b) of this
Division B of this Article FOURTH or any Person who is a
transferee of Excess Shares shall immediately give written
notice to the Corporation of such event and shall provide to
the Corporation such other information as the Corporation may
request in order to determine the effect, if any, of such
Transfer or intended Transfer on the Corporation's status as a
REIT.
(f) Owners Required to Provide Information. From and after the
date of the Initial Public Offering:
(i) every Beneficial Owner of more than 5.0% (or such
other percentage, between 0.5% and 5.0%, as provided in the
regulations promulgated pursuant to the Code) of the
outstanding Common Shares of the Corporation shall, within 30
days after January 1 of each year, give written notice to the
Corporation stating the name and address of such Beneficial
Owner, the number of shares Beneficially Owned, and
description of how such shares are held. Each such Beneficial
Owner shall provide to the Corporation such additional
information as the Corporation may request in order to
determine the effect, if any, of such Beneficial Ownership on
the Corporation's status as a REIT.
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(ii) each Person who is a Beneficial Owner or
Constructive Owner of Common Shares and each Person (including
the shareholder of record) who is holding Common Shares for a
Beneficial Owner or Constructive Owner shall provide to the
Corporation such information that the Corporation may request,
in good faith, in order to determine the Corporation's status
as a REIT.
(g) Remedies Not Limited. Nothing contained in this Division B
of this Article FOURTH shall limit the authority of the Board
of Directors to take such other action as it deems necessary
or advisable to protect the Corporation and the interests of
its shareholders by preservation of the Corporation's status
as a REIT.
(h) Ambiguity. In the case of an ambiguity in the application
of any of the provisions of Section 4 of this Division B of
this Article FOURTH, including any definition contained in
Section 4(a), the Board of Directors shall have the power to
determine the application of the provisions of this Section 4
with respect to any situation based on the facts known to it.
(i) Modification of Existing Holder Limits. Subject to the
provisions of Section 4(k) of this Division B, the Existing
Holder Limits may be modified as follows:
(i) Subject to the limitations provided in Section
4(k), any Existing Holder may Transfer Common Shares to a
Person who is already an Existing Holder up to the number of
Common Shares Beneficially Owned by such transferor Existing
Holder in excess of the Ownership Limit. Any such Transfer
will decrease the Existing Holder Limit for such transferor
Existing Holder and increase the Existing Holder Limit for
such transferee Existing Holder by the percentage of the
outstanding Common Shares so Transferred. The transferor
Existing Holder shall give the Board of Directors of the
Corporation prior written notice of any such Transfer.
(ii) Any grant of a stock option pursuant to a stock
option plan approved by the shareholders of the Corporation
shall increase the Existing Holder Limit for the affected
Existing Holder to the maximum extent possible under Section
4(k) to permit the Beneficial Ownership of the Common Shares
issuable upon the exercise of such stock option.
(iii) The Board of Directors may reduce the Existing
Holder Limit for any Existing Holder, with the written consent
of such Existing Holder, after any Transfer permitted in this
Section 4 by such Existing Holder to a Person other than an
Existing Holder or after the lapse (without exercise) of a
stock option described in Section 4(i)(ii).
(iv) Any Common Shares issued to an Existing Holder
pursuant to a dividend reinvestment plan adopted by the
Corporation shall increase the Existing Holder Limit for the
Existing Holder to the maximum extent possible under Section
4(k) to permit the Beneficial Ownership of such Common Shares.
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(j) Modification of Ownership Limit. Subject to the
limitations provided in Section 4(k) of this Division B, the
Board of Directors may from time to time increase the
Ownership Limit.
(k) Limitations on Modifications. Notwithstanding any other
provision of this Division B of this Article FOURTH:
(i) Neither the Ownership Limit nor any Existing
Holder Limit may be increased (nor may any additional Existing
Holder Limit be created) if, after giving effect to such
increase (or creation), five Beneficial Owners of Common
Shares (including all of the then Existing Holders) could
Beneficially Own, in the aggregate, more than 49.6% of the
outstanding Common Shares.
(ii) Prior to the modification of any Existing Holder
Limit or Ownership Limit pursuant to Section 4(i) or Section
4(j) of this Division B of this Article FOURTH, the Board of
Directors of the Corporation may require such opinions of
counsel, affidavits, undertakings or agreements as it may deem
necessary or advisable in order to determine or ensure the
Corporation's status as a REIT.
(iii) No Existing Holder Limit shall be reduced to a
percentage which is less than the Ownership Limit.
(iv) The Ownership Limit may not be increased to a
percentage which is greater than 9.8%.
(v) The Related Party Limit may not be increased to a
percentage which is greater than 9.8%.
(l) Exceptions.
(i) The Board of Directors, with a ruling from the
Internal Revenue Service or an opinion of counsel, may exempt
a Person from the Ownership Limits or the Existing Holder
Limits, as the case may be, if such Person is not an
individual for purposes of Section 542(a)(2) of the Code and
the Board of Directors obtains such representations and
undertakings from such Person as are reasonably necessary to
ascertain that no individual's Beneficial Ownership of such
Common Shares will violate the Ownership Limit or the
applicable Existing Holder Limit, as the case may be, and
agrees that any violation or attempted violation will result
in such Common Shares in excess of 5.0% of the outstanding
Common Shares being deemed to be Excess Shares and subject to
repurchase by the Corporation as set forth in Section 4(d) of
this Division B of this Article FOURTH.
(ii) The Board of Directors, with a ruling from the
Internal Revenue Service or an opinion of counsel, may exempt
a Person from the limitation on such Person Constructively
Owning Common Shares in excess of the Related Party Limit if
such Person does not own and represents that it will not own,
directly or constructively (by virtue of the application of
Section 318 of the Code,
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as modified by Section 856(d)(5) of the Code), more than a
9.9% interest (as set forth in Section 856(d)(2)(B) in a
tenant of any real property owned or leased by the
Corporation, and the Corporation obtains such representations
and undertakings from such Person as are reasonably necessary
to ascertain this fact and agrees that any violation or
attempted violation will result in such Common Shares in
excess of 9.8% being deemed to be Excess Shares and subject to
repurchase by the Corporation as set forth in Section 4(d) of
this Division B of this Article FOURTH.
Section 5. Legend. Each certificate for Common Shares shall bear the
following legend:
"The Common Shares represented by this certificate are subject to
restrictions on transfer for the purpose of the Corporation's maintenance of its
status as a Real Estate Investment Trust under the Internal Revenue Code of
1986, as amended. Subject to certain provisions of the Corporation's Articles of
Incorporation, no Person may Beneficially Own Common Shares in excess of 5.0% of
the outstanding Common Shares of the Corporation (unless such Person is an
Existing Holder) and no Person (other than an Existing Holder who Constructively
Owns in excess of 9.8% of the Common Shares immediately following the
consummation of the Initial Public Offering) may Constructively Own Common
Shares in excess of 9.8% of the outstanding Common Shares of the Corporation.
Any Person who attempts to Beneficially Own or Constructively Own Common Shares
in excess of the above limitations must immediately notify the Corporation. All
capitalized items in this legend have the meanings defined in the Corporation's
Articles of Incorporation, a copy of which, including the restrictions on
transfer, will be sent without charge to each shareholder who so requests. If
the restrictions on transfer are violated, certain of the Common Shares
represented may be subject to repurchase by the Corporation on the terms and
conditions set forth in the Corporation's Articles of Incorporation."
Section 6. Securities Exchange Transactions. Notwithstanding any
provision contained herein to the contrary, nothing in these Amended and
Restated Articles of Incorporation shall preclude the settlement of any
transaction entered into through the facilities of the New York Stock Exchange.
FIFTH: At all times following the consummation of the Initial Public
offering (as defined in Article FOURTH), at least a majority of the members of
the Board of Directors shall, except during the period of a vacancy or vacancies
therein, be Independent Directors. An "Independent Director" shall mean a person
who is not (i) employed by the Corporation or (ii) an "affiliate" (as defined in
Rule 405 under the Securities Act of 1933, as amended) of (A) any entity which
is part of the Developers Diversified Group, including, without limitation,
Developers Diversified Limited Partnership, an Ohio limited partnership,
Developers Diversified, Ltd., an Ohio limited partnership, W & M Properties, an
Ohio general partnership, W & Z Properties, Ltd., an Ohio limited partnership,
and DE Properties Corporation, an Ohio corporation, or (B) any partnership which
is an affiliate (as declined above) of any entity listed in clause (A) of this
Article FIFTH.
SIXTH: No holder of shares of the corporation of any class shall be
entitled as such, as a matter of right, to subscribe for or purchase shares of
any class, now or hereafter authorized, or to subscribe for or purchase
securities convertible into or exchangeable for shares of the corporation or to
which shall be attached or appertain any warrants or rights entitling the holder
thereof to subscribe for or purchase
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shares, except such rights of subscription or purchase, if any, for such
considerations and upon such terms and conditions as its Board of Directors from
time to time may determine.
SEVENTH: Notwithstanding any provision of Sections 1701.01 to 1701.98,
inclusive, of the Ohio Revised Code, or any successor statutes now or hereafter
in force, requiring for the authorization or taking of any action the vote or
consent of the holders of shares entitling them to exercise two-thirds or any
other proportion of the voting power of the corporation or of any class or
classes of shares thereof, such action, unless otherwise expressly required by
law or these Articles of Incorporation, may be authorized or taken by the vote
or consent of the holders of shares entitling them to exercise a majority of the
voting power of the corporation or of such class or classes of shares thereof.
EIGHTH: To the extent permitted by law, the corporation, by action of
its Board of Directors, may purchase or otherwise acquire shares of any class
issued by it at such times, for such consideration and upon such terms and
conditions as its Board of Directors may determine.
NINTH: The provisions of Chapter 1701.831 of the Ohio Revised Code
shall not apply to the Corporation.
TENTH: The provisions of Chapter 1707.043 of the Ohio Revised Code
shall not apply to the Corporation.
ELEVENTH: If any provision (or portion thereof) of these Articles of
Incorporation shall be found to be invalid, prohibited, or unenforceable for any
reason, the remaining provisions (or portions thereof) of these Articles of
Incorporation shall be deemed to remain in full force and effect, and shall be
construed as if such invalid prohibited, or unenforceable provision had been
stricken herefrom or otherwise rendered inapplicable, it being the intent of the
Corporation and its shareholders that each such remaining provision (or portion
thereof) of these Articles of Incorporation remain, to the fullest extent
permitted by law, applicable and enforceable as to all shareholders,
notwithstanding any such finding.
TWELFTH: No shareholder of the Corporation may cumulate his voting
power in the election of directors.
THIRTEENTH: The Corporation reserves the right to amend, alter, change
or repeal any provision contained in these Articles of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
shareholders herein are granted subject to this reservations.
FOURTEENTH: These Amended and Restated Articles of Incorporation shall
take the place of and supersede the Corporation's existing Articles of
Incorporation.
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CERTIFICATE OF AMENDMENT
TO
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
DEVELOPERS DIVERSIFIED REALTY CORPORATION
SCOTT A. WOLSTEIN, Chairman of the Board of Directors and
Chief Executive Officer, and JOAN U. ALLGOOD, Secretary, of Developers
Diversified Realty Corporation, an Ohio corporation (the "Corporation"), do
hereby certify that a meeting of the shareholders of the Corporation was duly
called and held on May 18, 1999, at which meeting a quorum of the shareholders
was present in person or by proxy, and by the affirmative vote of the holders of
shares entitling them to exercise a majority of the voting power of the
Corporation on a proposal to amend the Corporation's Amended and Restated
Articles of Incorporation, as amended, the resolutions attached hereto as
Exhibit A was duly adopted; and that said resolution is valid and binding, has
not been amended, modified or rescinded, and is in full force and effect on the
date hereof.
IN WITNESS WHEREOF, Scott A. Wolstein, Chairman of the Board
of Directors and Chief Executive Officer, and Joan U. Allgood, Secretary, of
Developers Diversified Realty Corporation acting for and on its behalf, do
hereunto subscribe their names this 18th day of May, 1999.
/s/ Scott A. Wolstein
--------------------------------------------
Scott A. Wolstein, Chairman of the Board of
Directors and Chief Executive Officer
/s/ Joan U. Allgood
--------------------------------------------
Joan U. Allgood, Secretary
<PAGE> 72
EXHIBIT A
RESOLVED, that Article FOURTH of the Corporation's Amended and Restated
Articles of Incorporation, as amended, be, and the same hereby is, deleted in
its entirety and there is substituted therefor the following:
FOURTH: The authorized number of shares of the Corporation is
109,000,000, consisting of 100,000,000 Common Shares, without par value
(hereinafter called "Common Shares"), 750,000 Class A Cumulative Preferred
Shares, without par value (hereinafter called "Class A Shares"), 750,000 Class B
Cumulative Preferred Shares, without par value (hereinafter called "Class B
Shares"), 750,000 Class C Cumulative Preferred Shares, without par value
(hereinafter called "Class C Shares"), 750,000 Class D Cumulative Preferred
Shares, without par value (hereinafter called "Class D Shares"), 750,000 Class E
Cumulative Preferred Shares, without par value (hereinafter called "Class E
Shares"), 750,000 Class F Cumulative Preferred Shares, without par value
(hereinafter called "Class G Shares"), 750,000 Class G Cumulative Preferred
Shares, without par value (hereinafter called "Class G Shares"), 750,000 Class H
Cumulative Preferred Shares, without par value (hereinafter called "Class H
Shares"), 750,000 Class I Cumulative Preferred Shares, without par value
(hereinafter called "Class I Shares"), 750,000 Class J Cumulative Preferred
Shares, without par value (hereinafter called "Class J Shares"), 750,000 Class K
Cumulative Preferred Shares, without par value (hereinafter called "Class K
Shares"), and 750,000 Noncumulative Preferred Shares, without par value
(hereinafter called "Noncumulative Shares"). The Class A Shares, Class B Shares,
Class C Shares, Class D Shares, Class E Shares, the Class F Shares, the Class G
Shares, the Class H Shares, the Class I Shares, the Class J Shares and the Class
K Shares are sometimes collectively referred to herein as the "Cumulative
Shares."
DIVISION A
I. The Class A Cumulative Preferred Shares. The Class A Shares shall
have the following express terms:
Section 1. Series. The Class A Shares may be issued from time
to time in one or more series. All Class A Shares shall be of equal
rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Class A Shares shall rank on a parity with the Class B
Shares, the Class C Shares, the Class D Shares, the Class E Shares, the
Class F Shares, the Class G Shares, the Class H Shares, the Class I
Shares, the Class J Shares, the Class K Shares and the Noncumulative
Shares and shall be identical to all Class B Shares, Class C Shares,
Class D Shares, Class E Shares, the Class F Shares, the Class G Shares,
the Class H Shares, the Class I Shares, the Class J Shares, the Class K
Shares and Noncumulative Shares except (1) in respect of the matters
that may be fixed by the Board of Directors as provided in clauses (a)
through (i), inclusive, of this Section 1 and (2) only dividends on the
Cumulative Shares, shall be cumulative as set forth herein. Subject to
the provisions of Sections 2 through 5, both inclusive, and Item XIII
of this Division, which provisions shall apply to all Class A Shares,
the Board of Directors hereby is authorized to cause such shares to be
issued in one or more series and, with respect to each such series to
determine and fix prior to the issuance thereof (and thereafter, to the
extent provided in clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
<PAGE> 73
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item I) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class A Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class A Shares, shall be
entitled to receive out of any funds legally available
therefor, and when and as declared by the Board of Directors,
dividends in cash at the rate or rates for such series fixed
in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such
dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be
paid upon or declared or set apart for any series of the Class
A Shares for any dividend period unless at the same time (i) a
like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in
proportion to the respective annual dividend rates fixed
therefor, shall have been paid upon or declared or set apart
for all Class A Shares of all series then issued and
outstanding and entitled to receive such dividend and (ii) the
dividends payable for the dividend periods terminating on the
same or any earlier date (but, with respect to Noncumulative
Shares, only with respect to the then current dividend
period), ratably in proportion to the respective dividend
rates fixed therefor, shall have been paid upon or declared or
set apart for all Class B Shares, Class C Shares, Class D
Shares, Class E Shares, Class F Shares,
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Class G Shares, Class H Shares, Class I Shares, Class J
Shares, Class K Shares and Noncumulative Shares then issued
and outstanding and entitled to receive such dividends.
(b) So long as any Class A Shares shall be
outstanding no dividend, except a dividend payable in Common
Shares or other shares ranking junior to the Class A Shares,
shall be paid or declared or any distribution be made, except
as aforesaid, in respect of the Common Shares or any other
shares ranking junior to the Class A Shares, nor shall any
Common Shares or any other shares ranking junior to the Class
A Shares be purchased, retired or otherwise acquired by the
Corporation, except out of the proceeds of the sale of Common
Shares or other shares of the Corporation ranking junior to
the Class A Shares received by the Corporation subsequent to
the date of first issuance of Class A Shares of any series,
unless:
(1) All accrued and unpaid dividends on
Cumulative Shares including the full dividends for
all current dividend periods, shall have been
declared and paid or a sum sufficient for payment
thereof set apart;
(2) All unpaid dividends on Noncumulative
Shares for the then current dividend period shall
have been declared and paid or a sum sufficient for
payment therefor set apart; and
(3) There shall be no arrearages with
respect to the redemption of Cumulative Shares or
Noncumulative Shares of any series from any sinking
fund provided for shares of such series in accordance
with the provisions of Section 1 of this Item I.
(c) The foregoing restrictions on the payment of
dividends or other distributions on, or on the purchase,
redemption retirement or other acquisition of, Common Shares
or any other shares ranking on a parity with or junior to the
Class A Shares shall be inapplicable to (i) any payments in
lieu of issuance of fractional shares thereof, whether upon
any merger, conversion, stock dividend or otherwise, (ii) the
conversion of Cumulative Shares or Noncumulative Shares into
Common Shares, or (iii) the exercise by the Corporation of its
rights pursuant to Item XIV(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital
stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects
to designate as "capital gain dividends" (as defined in
Section 857 of the Code), any portion (the "Capital Gains
Amount") of the dividends paid or made available for the year
to holders of all classes of stock (the "Total Dividends"),
then, to the extent permissible under the Code and to the
extent it does not cause any dividends to fail to qualify for
the dividends paid deduction under Section 561 of the Code,
the portion of the Capital Gains Amount that shall be
allocable to holders of the Class A Shares shall be the amount
that the total dividends paid or made available to the holders
of the Class A Shares for the year bears to the Total
Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
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<PAGE> 75
(1) May, from time to time at the option of
the Board of Directors, redeem all or any part of any
redeemable series of Class A Shares at the time
outstanding at the applicable redemption price for
such series fixed in accordance with the provisions
of Section 1 of this Item I; and
(2) Shall, from time to time, make such
redemptions of each series of Class A Shares as may
be required to fulfill the requirements of any
sinking fund provided for shares of such series at
the applicable sinking fund redemption price fixed in
accordance with the provisions of Section 1 of this
Item I; and shall in each case pay all accrued and
unpaid dividends to the redemption date.
(b) (1) Notice of every such redemption shall be
mailed, postage prepaid, to the holders of record of the Class
A Shares to be redeemed at their respective addresses then
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Item I prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
Corporation may deposit the aggregate redemption price of
Class A Shares to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, with any bank
or trust company in Cleveland, Ohio, or New York, New York,
having capital and surplus of not less than $100,000,000,
named in such notice and direct that there be paid to the
respective holders of the Class A Shares so to be redeemed
amounts equal to the redemption price of the Class A Shares so
to be redeemed, together with such accrued and unpaid
dividends thereon, on surrender of the share certificate or
certificates held by such holders; and upon the deposit of
such notice in the mail and the making of such deposit of
money with such bank or trust company, such holders shall
cease to be shareholders with respect to such shares; and from
and after the time such notice shall have been so deposited
and such deposit of money shall have been so made, such
holders shall have no rights or claim against the Corporation
with respect to such shares, except only the right to receive
such money from such bank or trust company without interest or
to exercise before the redemption date any unexpired
privileges of conversion. In the event less than all of the
outstanding Class A Shares are to be redeemed, the Corporation
shall select by lot the shares so to be redeemed in such
manner as shall be prescribed by the Board of Directors.
(2) If the holders of Class A Shares which
have been called for redemption shall not within six
years after such deposit claim the amount deposited
for the redemption thereof, any such bank or trust
company shall, upon demand, pay over to the
Corporation such unclaimed amounts and thereupon such
bank or trust company and the Corporation shall be
relieved of all responsibility in respect thereof and
to such holders.
(c) Any Class A Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series, (3) converted
in accordance with the express terms thereof, or (4) otherwise
acquired by the Corporation, shall resume the status of
authorized but unissued Class A Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item XIV of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as
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<PAGE> 76
amended, with respect to any other class or series of capital
stock hereafter created or authorized, the Corporation may not
purchase or redeem (for sinking fund purposes or otherwise)
less than all of the Class A Shares then outstanding except in
accordance with a stock purchase offer made to all holders of
record of Class A Shares, unless all dividends on all Class A
Shares then outstanding for all previous and current dividend
periods shall have been declared and paid or funds therefor
set apart and all accrued sinking fund obligations applicable
thereto shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class A Shares of any series shall
be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be
paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Class A Shares, the
amounts fixed with respect to shares of such series in
accordance with Section 1 of this Item I, plus an amount equal
to all dividends accrued and unpaid thereon to the date of
payment of the amount due pursuant to such liquidation,
dissolution or winding up of the affairs of the Corporation.
In the event the net assets of the Corporation legally
available therefor are insufficient to permit the payment upon
all outstanding Cumulative Shares and Noncumulative Shares of
the full preferential amount to which they are respectively
entitled, then such net assets shall be distributed ratably
upon all outstanding Cumulative Shares and Noncumulative
Shares in proportion to the full preferential amount to which
each such share is entitled.
(2) After payment to the holders of Class A
Shares of the full preferential amounts as aforesaid,
the holders of Class A Shares, as such, shall have no
right or claim to any of the remaining assets of the
Corporation.
(b) The merger or consolidation of the Corporation
into or with any other Corporation, the merger of any other
Corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Class A Shares shall have no
voting rights, except as provided in this Section or required
by law.
(b) (1) If, and so often as, the Corporation shall be
in default in the payment of dividends on any series of Class
A Shares at the time outstanding, whether or not earned or
declared, for a number of dividend payment periods, whether
consecutive or not, which in the aggregate contain at least
540 days, all holders of such Class A Shares, voting
separately as a class, together with all Class B Shares, Class
C Shares, Class D Shares, Class E Shares, Class F Shares,
Class G Shares, Class H Shares, Class I Shares, Class J
Shares, Class K Shares and Noncumulative Shares upon which
like voting rights have been conferred and are exercisable
under the circumstances described in Subsection 5(c), shall be
entitled to elect, as herein provided, a total of two members
of the Board of Directors of the Corporation; provided,
however, that the holders of such Class A Shares shall not
exercise such special class voting rights except at meetings
of such shareholders for the election of directors at which
the holders of not less than 50% of such Class A
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<PAGE> 77
Shares are present in person or by proxy; and provided
further, that the special class voting rights provided for in
this paragraph when the same shall have become vested shall
remain so vested until all accrued and unpaid dividends on
such Class A Shares then outstanding shall have been paid or
declared and a sum sufficient for the payment thereof set
aside for payment, whereupon the holders of such Class A
Shares shall be divested of their special class voting rights
in respect of subsequent elections of directors, subject to
the revesting of such special class voting rights in the event
above specified in this paragraph.
(2) In the event of default entitling
holders of Class A Shares to elect two directors as
specified in paragraph (1) of this Subsection, a
special meeting of such holders for the purpose of
electing such directors shall be called by the
Secretary of the Corporation upon written request of,
or may be called by, the holders of record of at
least 10% of the Class A Shares upon which such
default in the payment of dividends exists and notice
thereof shall be given in the same manner as that
required for the annual meeting of shareholders;
provided, however, that the Corporation shall not be
required to call such special meeting if the annual
meeting of shareholders shall be called to be held
within 90 days after the date of receipt of the
foregoing written request from the holders of Class A
Shares. At any meeting at which such holders of Class
A Shares shall be entitled to elect directors,
holders of 50% of such Class A Shares, present in
person or by proxy, shall be sufficient to constitute
a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at
which there shall be such a quorum shall be
sufficient to elect the members of the Board of
Directors which such holders of Class A Shares are
entitled to elect as herein provided. Notwithstanding
any provision of these Amended and Restated Articles
of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by
the holders of any class of shares fixing the number
of directors of the Corporation, the two directors
who may be elected by such holders of Class A Shares
pursuant to this Subsection shall serve in addition
to any other directors then in office or proposed to
be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent
any change otherwise permitted in the total number of
or classifications of directors of the Corporation or
require the resignation of any director elected
otherwise than pursuant to this Subsection.
Notwithstanding any classification of the other
directors of the Corporation, the two directors
elected by such holders of Class A Shares shall be
elected annually for terms expiring at the next
succeeding annual meeting of shareholders.
(3) Upon any divesting of the special class
voting rights of the holders of the Class A Shares in
respect of elections of directors as provided in this
Subsection, the terms of office of all directors then
in office elected by such holders shall terminate
immediately thereupon. If the office of any director
elected by such holders voting as a class becomes
vacant by reason of death, resignation, removal from
office or otherwise, the remaining director elected
by such holders voting as a class may elect a
successor who shall hold office for the unexpired
term in respect of which such vacancy occurred.
(c) If at any time when the holders of Class A Shares
are entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any Class B Shares,
Class C Shares, Class D Shares, Class E Shares, Class F
Shares, Class G Shares,
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<PAGE> 78
Class H Shares, Class I Shares, Class J Shares, Class K Shares
or Noncumulative Shares are entitled to elect directors
pursuant hereto by reason of any default in the payment of
dividends thereon, then the voting rights of the Class A
Shares, the Class B Shares, the Class C Shares, the Class D
Shares, the Class E Shares, Class F Shares, Class G Shares,
Class H Shares, Class I Shares, Class J Shares, Class K Shares
and the Noncumulative Shares then entitled to vote shall be
combined (with each class of shares having a number of votes
proportional to the aggregate liquidation preference of its
outstanding shares). In such case, the holders of Class A
Shares and of all such other shares then entitled so to vote,
voting as a class, shall elect such directors. If the holders
of any such other shares have elected such directors prior to
the happening of the default or event permitting the holders
of Class A Shares to elect directors, or prior to a written
request for the holding of a special meeting being received by
the Secretary of the Corporation as required above, then a new
election shall be held with all such other shares and the
Class A Shares voting together as a single class for such
directors, resulting in the termination of the term of such
previously elected directors upon the election of such new
directors.
(d) The affirmative vote of the holders of at least
two-thirds of the Class A Shares at the time outstanding,
voting separately as a class, given in person or by proxy
either in writing or at a meeting called for the purpose,
shall be necessary to effect either of the following:
(1) Any amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of any
of the provisions of the Amended and Restated
Articles of Incorporation, as amended, or of the Code
of Regulations of the Corporation which affects
adversely and materially the preferences or voting or
other rights of the holders of Class A Shares which
are set forth in these Amended and Restated Articles
of Incorporation, as amended; provided, however,
neither the amendment of these Amended and Restated
Articles of Incorporation, as amended, so as to
authorize, create or change the authorized or
outstanding number of Class A Shares or of any shares
ranking on a parity with or junior to the Class A
Shares nor the amendment of the provisions of the
Code of Regulations so as to change the number or
classification of directors of the Corporation shall
be deemed to affect adversely and materially
preferences or voting or other rights of the holders
of Class A Shares; or
(2) The authorization, creation or increase in the
authorized number of any shares, or any security convertible
into shares, in either case ranking prior to such series of
Class A Shares.
(e) In the event, and only to the extent, that (1)
Class A Shares are issued in more than one series and (2) Ohio
law permits the holders of a series of a class of capital
stock to vote separately as a class, the affirmative vote of
the holders of at least two-thirds of each series of Class A
Shares at the time outstanding, voting separately as a class,
given in person or by proxy either in writing or at a meeting
called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of these Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of such series which are
set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as
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to authorize, create or change the authorized or outstanding
number of Class A Shares or of any shares ranking on a parity
with or junior to the Class A Shares nor the Amendment of the
provisions of the Code of Regulations so as to change the
number or classification of directors of the Corporation shall
be deemed to affect adversely and materially the preferences
or voting or other rights of the holders of such series.
Section 6. 9 1/2% Class A Cumulative Redeemable Preferred
Shares. Of the 1,500,000 authorized Class A Shares, 460,000 shares are
designated as a series entitled "9 1/2% Class A Cumulative Redeemable
Preferred Shares" (hereinafter called "9 1/2% Class A Preferred
Shares"). The 9 1/2% ClasS A Preferred Shares shall have the express
terms set forth in this Item I as being applicable to all Class A
Shares as a class and, in addition, the following express terms
applicable to all 9 1/2% Class A Preferred Shares as a series of Class
A Shares:
(a) The annual dividend rate of the 9 1/2% Class A
Preferred Shares shall be 9 1/2% of the liquidation preference
of $250.00 per share.
(b) Dividends on the 9 1/2% Class A Preferred Shares
shall be payable, if declared, quarterly on or about the 15th
day of March, June, September, and December each year, the
first quarterly dividend being payable, if declared, on
December 15, 1995. The dividends payable for each full
quarterly dividend period on each 9 1/2% Class A Preferred
Shares shall be $5.94.
Dividends for the initial dividend period on the 9
1/2% Class A Preferred Shares, or for any period shorter or
longer than a full dividend period on the 9 1/2% Class A
Preferred Shares, shall be computed on the basis of a 360-day
year consisting of twelve 30-day months. The aggregate
dividend payable quarterly to each holder of 9 1/2% Class A
Preferred Shares shall be rounded to the nearest one
one-hundredth of one cent with $.00005 being rounded upward.
Each dividend shall be payable to the holders of record on
such record date, no less than 10 nor more than 30 days
preceding the payment date thereof, as shall be fixed from
time to time by the Corporation's Board of Directors.
(c) Dividends on 9 1/2% Class A Preferred Shares
shall be cumulative as follows:
(1) With respect to shares included in the
initial issue of 9 1/2% Class A Preferred Shares and
shares issued any time thereafter up to and including
the record date for the payment of the first dividend
on the initial issue of 9 1/2% Class A PreferrEd
Shares, dividends shall be cumulative from the date
of the initial issue of 9 1/2% Class A Preferred
Shares; and
(2) With respect to shares issued any time
after the aforesaid record date, dividends shall be
cumulative from the dividend payment date next
preceding the date of issue of such shares, except
that if such shares are issued during the period
commencing the day after the record date for the
payment of a dividend on 9 1/2% Class A Preferred
Shares and ending on the payment date of that
dividend, dividends with respect to such shares shall
be cumulative from that dividend payment date.
(d) Except as required to preserve the Corporation's
status as a real estate investment trust under the Internal
Revenue Code of 1986, as amended, the 9 1/2% Class A Preferred
Shares may not be redeemed prior to November 15, 2000. At any
time or from
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<PAGE> 80
time to time oN and after November 15, 2000 the Corporation,
at its option upon not less than thirty (30) nor more than
sixty (60) days' written notice, may redeem all or any part of
the 9 1/2% Class A Preferred Shares at a redemption price of
$250.00 per share plus, in each case, an amount equal to all
dividends accrued and unpaid thereon to the redemption date,
without interest. The redemption price (other than the portion
thereof consisting of accrued and unpaid dividends) is payable
solely out of the sale proceeds of other capital shares of the
Corporation, which may include any equity securities
(including common shares and preferred shares), shares,
interests, participation or other ownership interests (however
designated) and any rights (other than debt securities
convertible into or exchangeable for equity securities), or
options to purchase any of the foregoing.
(e) The amount payable per 9 1/2% Class A Preferred
Share in the event of any voluntary or involuntary
liquidation, dissolutioN or winding up of the affairs of the
Corporation shall be $250.00, plus an amount equal to all
dividends accrued and unpaid thereon to the date of payment.
(f) All dividend payments made on the 9 1/2% Class A
Preferred Shares, at any time during which the Corporation is
in default In the payment of dividends on such 9 1/2% Class A
Preferred Shares for any dividend period, shall, for the
purposes of Section 5(b)(1) of this Item I, be deemed to be
made in respect of the earliest dividend period with respect
to which the Corporation is in default.
II. The Class B Cumulative Preferred Shares. The Class B Cumulative
Preferred Shares shall have the following express terms:
Section 1. Series. The Class B Shares may be issued from time
to time in one or more series. All Class B Shares shall be of equal
rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Class B Shares shall rank on a parity with the Class A
Shares, the Class C Shares, the Class D Shares, the Class E Shares,
Class F Shares, Class G Shares, Class H Shares, Class I Shares, Class J
Shares, Class K Shares and the Noncumulative Shares and shall be
identical to all Class A Shares, Class C Shares, Class D Shares, Class
E Shares, Class F Shares, Class G Shares, Class H Shares, Class I
Shares, Class J Shares, Class K Shares and Noncumulative Shares except
(1) in respect of the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on the Cumulative Shares are
cumulative as set forth herein. Subject to the provisions of Sections 2
through 5, both inclusive, and Item XIII of this Division, which
provisions shall apply to all Class B Shares, the Board of Directors
hereby is authorized to cause such shares to be issued in one or more
series and with respect to each such series to determine and fix prior
to the issuance thereof (and thereafter, to the extent provided in
clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
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<PAGE> 81
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item II) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), both inclusive, of this Section and is authorized to take such
actions with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class B Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class B Shares, shall be
entitled to receive out of any funds legally available
therefor, and when and as declared by the Board of Directors,
dividends in cash at the rate or rates for such series fixed
in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such
dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be
paid upon or declared or set apart for any series of the Class
B Shares for any dividend period unless at the same time (i) a
like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in
proportion to the respective annual dividend rates fixed
therefor, shall have been paid upon or declared or set apart
for all Class B Shares of all series then issued and
outstanding and entitled to receive such dividend and (ii) the
dividends payable for the dividend periods terminating on the
same or any earlier date (but, with respect to the
Noncumulative Shares, only with respect to the then current
dividend period), ratably in proportion to the respective
dividend rates fixed therefor, shall have been paid upon or
declared or set apart for all Class A Shares, Class C Shares,
Class D Shares, Class E Shares, Class F Shares, Class G
Shares, Class H Shares, Class I Shares, Class J Shares, Class
K Shares and Noncumulative Shares then issued and outstanding
and entitled to receive such dividends.
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<PAGE> 82
(b) So long as any Class B Shares shall be
outstanding no dividend, except a dividend payable in Common
Shares or other shares ranking junior to the Class B Shares,
shall be paid or declared or any distribution be made, except
as aforesaid, in respect of the Common Shares or any other
shares ranking junior to the Class B Shares, nor shall any
Common Shares or any other shares ranking junior to the Class
B Shares be purchased, retired or otherwise acquired by the
Corporation, except out of the proceeds of the sale of Common
Shares or other shares of the Corporation ranking junior to
the Class B Shares received by the Corporation subsequent to
the date of first issuance of Class B Shares of any series,
unless:
(1) All accrued and unpaid dividends on
Cumulative Shares, including the full dividends for
all current dividend periods, shall have been
declared and paid or a sum sufficient for payment
thereof set apart;
(2) All unpaid dividends on Noncumulative
Shares for the then current dividend period shall
have been declared and paid or a sum sufficient for
payment thereof set apart; and
(3) There shall be no arrearages with
respect to the redemption of Cumulative Shares or
Noncumulative Shares of any series from any sinking
fund provided for shares of such series in accordance
with the provisions of Section 1 of this Item II.
(c) The foregoing restrictions on the payment of
dividends or other distributions on, or on the purchase,
redemption, retirement or other acquisition of, Common Shares
or any other shares ranking on a parity with or junior to the
Class B Shares shall be inapplicable to (i) any payments in
lieu of issuance of fractional shares thereof, whether upon
any merger, conversion, stock dividend or otherwise, (ii) the
conversion of Cumulative Shares or Noncumulative Shares into
Common Shares or (iii) the exercise by the Corporation of its
rights pursuant to Item XIV(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital
stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects
to designate as "capital gain dividends" (as defined in
Section 857 of the Code), any portion (the "Capital Gains
Amount") of the dividends paid or made available for the year
to holders of all classes of stock (the "Total Dividends"),
then, to the extent permissible under the Code and to the
extent that it does not cause any dividends to fail to qualify
for the dividends paid deduction under Section 561 of the
Code, the portion of the Capital Gains Amount that shall be
allocable to holders of the Class B Shares shall be the amount
that the total dividends paid or made available to the holders
of the Class B Shares for the year bears to the Total
Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of
the Board of Directors, redeem all or any part of any
redeemable series of Class B Shares at the time
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<PAGE> 83
outstanding at the applicable redemption price for
such series fixed in accordance with the provisions
of Section 1 of this Item II; and
(2) Shall, from time to time, make such
redemptions of each series of Class B Shares as may
be required to fulfill the requirements of any
sinking fund provided for shares of such series at
the applicable sinking fund redemption price fixed in
accordance with the provisions of Section 1 of this
Item II; and shall in each case pay all accrued and
unpaid dividends to the redemption date.
(b) (1) Notice of every such redemption shall be
mailed, postage prepaid, to the holders of record of the Class
B Shares to be redeemed at their respective addresses then
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Item II prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
Corporation may deposit the aggregate redemption price of
Class B Shares to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, with any bank
or trust company in Cleveland, Ohio, or New York, New York,
having capital and surplus of not less than $100,000,000,
named in such notice and direct that there be paid to the
respective holders of the Class B Shares so to be redeemed
amounts equal to the redemption price of the Class B Shares so
to be redeemed, together with such accrued and unpaid
dividends thereon, on surrender of the share certificate or
certificates held by such holders; and upon the deposit of
such notice in the mail and the making of such deposit of
money with such bank or trust company, such holders shall
cease to be shareholders with respect to such shares; and from
and after the time such notice shall have been so deposited
and such deposit of money shall have been so made, such
holders shall have no rights or claim against the Corporation
with respect to such shares, except only the right to receive
such money from such bank or trust company without interest or
to exercise before the redemption date any unexpired
privileges of conversion. In the event less than all of the
outstanding Class B Shares are to be redeemed, the Corporation
shall select by lot the shares so to be redeemed in such
manner as shall be prescribed by the Board of Directors.
(2) If the holders of Class B Shares which
have been called for redemption shall not within six
years after such deposit claim the amount deposited
for the redemption thereof, any such bank or trust
company shall, upon demand, pay over to the
Corporation such unclaimed amounts and thereupon such
bank or trust company and the Corporation shall be
relieved of all responsibility in respect thereof and
to such holders.
(c) Any Class B Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series, (3) converted
in accordance with the express terms thereof, or (4) otherwise
acquired by the Corporation, shall resume the status of
authorized but unissued Class B Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item XIV of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital stock hereafter created or
authorized, the Corporation may not purchase or redeem (for
sinking fund purposes or
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<PAGE> 84
otherwise) less than all of the Class B Shares then
outstanding except in accordance with a stock purchase offer
made to all holders of record of Class B Shares, unless all
dividends on all Class B Shares then outstanding for all
previous and current dividend periods shall have been declared
and paid or funds therefor set apart and all accrued sinking
fund obligations applicable thereto shall have been complied
with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class B Shares of any series shall
be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be
paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Class B Shares, the
amounts fixed with respect to shares of such series in
accordance with Section 1 of this Item II, plus an amount
equal to all dividends accrued and unpaid thereon to the date
of payment of the amount due pursuant to such liquidation,
dissolution or winding up of the affairs of the Corporation.
In the event the net assets of the Corporation legally
available therefor are insufficient to permit the payment upon
all outstanding Cumulative Shares and Noncumulative Shares of
the full preferential amount to which they are respectively
entitled, then such net assets shall be distributed ratably
upon all outstanding Cumulative Shares and Noncumulative
Shares in proportion to the full preferential amount to which
each such share is entitled.
(2) After payment to the holders of Class B
Shares of the full preferential amounts as aforesaid,
the holders of Class B Shares, as such, shall have no
right or claim to any of the remaining assets of the
Corporation.
(b) The merger or consolidation of the Corporation
into or with any other Corporation, the merger of any other
corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Class B Shares shall have no
voting rights, except as provided in this Section or required
by law.
(b) (1) If, and so often as, the Corporation shall be
in default in the payment of dividends on any series of Class
B Shares at the time outstanding, whether or not earned or
declared, for a number of dividend payment periods, whether
consecutive or not, which in the aggregate contain at least
540 days, all holders of Class B Shares, voting separately as
a class, together with all Class A Shares, Class C Shares,
Class D Shares, Class E Shares, Class F Shares, Class G
Shares, Class H Shares, Class I Shares, Class J Shares, Class
K Shares and Noncumulative Shares upon which like voting
rights have been conferred and are exercisable under the
circumstances described in Subsection 5(c), shall be entitled
to elect, as herein provided, a total of two members of the
Board of Directors of the Corporation; provided, however, that
the holders of such Class B Shares shall not exercise such
special class voting rights except at meetings of such
shareholders for the election of directors at which the
holders of not less than 50% of such Class B Shares are
present in person or by proxy; and provided further, that the
special class voting rights provided for in this paragraph
when the same shall have become vested
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<PAGE> 85
shall remain so vested until all accrued and unpaid dividends
on such Class B Shares then outstanding shall have been paid
or declared and a sum sufficient therefor set aside for
payment, whereupon the holders of such Class B Shares shall be
divested of their special class voting rights in respect of
subsequent elections of directors, subject to the revesting of
such special class voting rights in the event above specified
in this paragraph.
(2) In the event of default entitling
holders of Class B Shares to elect two directors as
specified in paragraph (1) of this Subsection, a
special meeting of such holders for the purpose of
electing such directors shall be called by the
Secretary of the Corporation upon written request of,
or may be called by, the holders of record of at
least 10% of the Class B Shares upon which such
default in the payment of dividends exists and notice
thereof shall be given in the same manner as that
required for the annual meeting of shareholders;
provided, however, that the Corporation shall not be
required to call such special meeting if the annual
meeting of shareholders shall be called to be held
within 90 days after the date of receipt of the
foregoing written request from the holders of Class B
Shares. At any meeting at which such holders of Class
B Shares shall be entitled to elect directors,
holders of 50% of such Class B Shares, present in
person or by proxy, shall be sufficient to constitute
a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at
which there shall be such a quorum shall be
sufficient to elect the members of the Board of
Directors which such holders of Class B Shares are
entitled to elect as herein provided. Notwithstanding
any provision of these Amended and Restated Articles
of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by
the holders of any class of shares fixing the number
of directors of the Corporation, the two directors
who may be elected by such holders of Class B Shares
pursuant to this Subsection shall serve in addition
to any other directors then in office or proposed to
be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent
any change otherwise permitted in the total number of
or classifications of directors of the Corporation
nor require the resignation of any director elected
otherwise than pursuant to this Subsection.
Notwithstanding any classification of the other
directors of the Corporation, the two directors
elected by such holders of Class B Shares shall be
elected annually for terms expiring at the next
succeeding annual meeting of shareholders.
(3) Upon any divesting of the special class
voting rights of the holders of the Class B Shares in
respect of elections of directors as provided in this
Subsection, the terms of office of all directors then
in office elected by such holders shall terminate
immediately thereupon. If the office of any director
elected by such holders voting as a class becomes
vacant by reason of death, resignation, removal from
office or otherwise, the remaining director elected
by such holders voting as a class may elect a
successor who shall hold office for the unexpired
term in respect of which such vacancy occurred.
(c) If at any time when the holders of Class B Shares
are entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any Class A Shares,
Class C Shares, Class D Shares, Class E Shares, Class F
Shares, Class G Shares, Class H Shares, Class I Shares, Class
J Shares, Class K Shares or Noncumulative Shares are entitled
to elect directors pursuant hereto by reason of any default in
the payment of dividends thereon, then the voting rights of
the Cumulative Shares and the
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<PAGE> 86
Noncumulative Shares then entitled to vote shall be combined
(with class of shares having a number of votes proportional to
the aggregate liquidation preference of its outstanding
shares). In such case, the holders of Class B Shares and of
all such other shares then entitled so to vote, voting as a
class, shall elect such directors. If the holders of any such
other shares have elected such directors prior to the
happening of the default or event permitting the holders of
Class B Shares to elect directors, or prior to a written
request for the holding of a special meeting being received by
the Secretary of the Corporation as required above, then a new
election shall be held with all such other shares and the
Class B Shares voting together as a single class for such
directors, resulting in the termination of the term of such
previously elected directors upon the election of such new
directors.
(d) The affirmative vote of the holders of at least
two-thirds of the Class B Shares at the time outstanding,
voting separately as a class, given in person or by proxy
either in writing or at a meeting called for the purpose,
shall be necessary to effect either of the following:
(1) Any amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of any
of the provisions of the Amended and Restated
Articles of Incorporation, as amended, or of the Code
of Regulations of the Corporation which affects
adversely and materially the preferences or voting or
other rights of the holders of Class B Shares which
are set forth in these Amended and Restated Articles
of Incorporation, as amended; provided, however,
neither the amendment of these Amended and Restated
Articles of Incorporation, as amended, so as to
authorize, create or change the authorized or
outstanding number of Class B Shares or of any shares
ranking on a parity with or junior to the Class B
Shares nor the amendment of the provisions of the
Code of Regulations so as to change the number or
classification of directors of the Corporation shall
be deemed to affect adversely and materially
preferences or voting or other rights of the holders
of Class B Shares; or
(2) The authorization, creation or increase
in the authorized number of any shares, or any
security convertible into shares, in either case
ranking prior to such Class B Shares.
(e) In the event, and only to the extent, that (1)
Class B Shares are issued in more than one series and (2) Ohio
law permits the holders of a series of a class of capital
stock to vote separately as a class, the affirmative vote of
the holders of at least two-thirds of each series of Class B
Shares at the time outstanding, voting separately as a class,
given in person or by proxy either in writing or at a meeting
called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of these Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of such series which are
set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class B Shares
or of any shares remaining on a parity with or junior to the
Class B Shares nor the amendment of the provisions of the Code
of Regulations so as to change the number of classification of
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<PAGE> 87
directors of the Corporation shall be deemed to affect
adversely and materially preferences or voting or other rights
of the holders of such series.
Section 6. 9.44% Class B Cumulative Redeemable Preferred
Shares. Of the 1,500,000 authorized Class B Shares, 177,500 shares are
designated as a series entitled "9.44% Class B Cumulative Redeemable
Preferred Shares" (hereinafter called "9.44% Class B Preferred
Shares"). The 9.44% Class B Preferred Shares shall have the express
terms set forth in this Item II as being applicable to all Class B
Shares as a class and, in addition, the following express terms
applicable to all 9.44% Class B Preferred Shares as a series of Class B
Shares:
(a) The annual dividend rate of the 9.44% Class B
Preferred Shares shall be 9.44% of the liquidation preference
of $250.00 per share.
(b) Dividends on the 9.44% Class B Preferred Shares
shall be payable, if declared, quarterly on or about the 15th
day of March, June, September, and December each year, the
first quarterly dividend being payable, if declared, on March
15, 1996. The dividends payable for each full quarterly
dividend period on each 9.44% Class B Preferred Shares shall
be $5.90.
Dividends for the initial dividend period on the
9.44% Class B Preferred Shares, or for any period shorter or
longer than a full dividend period on the 9.44% Class B
Preferred Shares, shall be computed on the basis of a 360-day
year consisting of twelve 30-day months. The aggregate
dividend payable quarterly to each holder of 9.44% Class B
Preferred Shares shall be rounded to the nearest one
one-hundredth of one cent with $.00005 being rounded upward.
Each dividend shall be payable to the holders of record on
such record date, no less than 10 nor more than 30 days
preceding the payment date thereof, as shall be fixed from
time to time by the Corporation's Board of Directors.
(c) Dividends on 9.44% Class B Preferred Shares shall
be cumulative as follows:
(1) With respect to shares included in the
initial issue of 9.44% Class B Preferred Shares and
shares issued any time thereafter up to and including
the record date for the payment of the first dividend
on the initial issue of 9.44% Class B Preferred
Shares, dividends shall be cumulative from the date
of the initial issue of 9.44% Class B Preferred
Shares; and
(2) With respect to shares issued any time
after the aforesaid record date, dividends shall be
cumulative from the dividend payment date next
preceding the date of issue of such shares, except
that if such shares are issued during the period
commencing the day after the record date for the
payment of a dividend on 9.44% Class B Preferred
Shares and ending on the payment date of that
dividend, dividends with respect to such shares shall
be cumulative from that dividend payment date.
(d) Except as required to preserve the Corporation's
status as a real estate investment trust under the Internal
Revenue Code of 1986, as amended, the 9.44% Class B Preferred
Shares may not be redeemed prior to December 26, 2000. At any
time or from time to time on and after December 26, 2000 the
Corporation, at its option upon not less than thirty (30) nor
more than sixty (60) days' written notice, may redeem all or
any part of the 9.44% Class B Preferred Shares at a redemption
price of $250.00 per share
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plus, in each case, an amount equal to all dividends accrued
and unpaid thereon to the redemption date, without interest.
The redemption price (other than the portion thereof
consisting of accrued and unpaid dividends) is payable solely
out of the sale proceeds of other capital shares of the
Corporation, which may include any equity securities
(including common shares and preferred shares), shares,
interests, participation or other ownership interests (however
designated) and any rights (other than debt securities
convertible into or exchangeable for equity securities), or
options to purchase any of the foregoing.
(e) The amount payable per 9.44% Class B Preferred
Share in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation shall be $250.00, plus an amount equal to all
dividends accrued and unpaid thereon to the date of payment.
(f) All dividend payments made on the 9.44% Class B
Preferred Shares, at any time during which the Corporation is
in default in the payment of dividends on such 9.44% Class B
Preferred Shares for any dividend period, shall, for the
purposes of Section 5(b)(1) of this Item II, be deemed to be
made in respect of the earliest dividend period with respect
to which the Corporation is in default.
III. The Class C Cumulative Preferred Shares. The Class C Shares shall
have the following express terms:
Section 1. Series. The Class C Shares may be issued from time
to time in one or more series. All Class C Shares shall be of equal
rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Class C Shares shall rank on a parity with the Class A
Shares, the Class B Shares, the Class D Shares, the Class E Shares,
Class F Shares, Class G Shares, Class H Shares, Class I Shares, Class J
Shares, Class K Shares and the Noncumulative Shares and shall be
identical to all Class A Shares, Class B Shares, Class D Shares, Class
E Shares, Class F Shares, Class G Shares, Class H Shares, Class I
Shares, Class J Shares, Class K Shares and Noncumulative Shares except
(1) in respect of the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on Cumulative Shares shall be
cumulative as set forth herein. Subject to the provisions of Sections 2
through 5, both inclusive, and Item XIII of this Division, which
provisions shall apply to all Class C Shares, the Board of Directors
hereby is authorized to cause such shares to be issued in one or more
series and, with respect to each such series to determine and fix prior
to the issuance thereof (and thereafter, to the extent provided in
clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
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(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item III) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class C Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class C Shares, shall be
entitled to receive out of any funds legally available
therefor, and when and as declared by the Board of Directors,
dividends in cash at the rate or rates for such series fixed
in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such
dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be
paid upon or declared or set apart for any series of the Class
C Shares for any dividend period unless at the same time (i) a
like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in
proportion to the respective annual dividend rates fixed
therefor, shall have been paid upon or declared or set apart
for all Class C Shares of all series then issued and
outstanding and entitled to receive such dividend and (ii) the
dividends payable for the dividend periods terminating on the
same or any earlier date (but, with respect to Noncumulative
Shares, only with respect to the then current dividend
period), ratably in proportion to the respective dividend
rates fixed therefor, shall have been paid upon or declared or
set apart for all Class A Shares, Class B Shares, Class D
Shares, Class E Shares, Class F Shares, Class G Shares, Class
H Shares, Class I Shares, Class J Shares, Class K Shares and
Noncumulative Shares then issued and outstanding and entitled
to receive such dividends.
(b) So long as any Class C Shares shall be
outstanding no dividend, except a dividend payable in Common
Shares or other shares ranking junior to the Class C Shares,
shall be paid or declared or any distribution be made, except
as aforesaid, in respect of the Common Shares or any other
shares ranking junior to the Class C Shares, nor shall
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<PAGE> 90
any Common Shares or any other shares ranking junior to the
Class C Shares be purchased, retired or otherwise acquired by
the Corporation, except out of the proceeds of the sale of
Common Shares or other shares of the Corporation ranking
junior to the Class C Shares received by the Corporation
subsequent to the date of first issuance of Class C Shares of
any series, unless:
(1) All accrued and unpaid dividends on
Cumulative Shares including the full dividends for
all current dividend periods, shall have been
declared and paid or a sum sufficient for payment
thereof set apart;
(2) All unpaid dividends on Noncumulative
Shares for the then current dividend period shall
have been declared and paid or a sum sufficient for
payment therefor set apart; and
(3) There shall be no arrearages with
respect to the redemption of Cumulative Shares or
Noncumulative Shares of any series from any sinking
fund provided for shares of such series in accordance
with the provisions of Section 1 of this Item III.
(c) The foregoing restrictions on the payment of
dividends or other distributions on, or on the purchase,
redemption retirement or other acquisition of, Common Shares
or any other shares ranking on a parity with or junior to the
Class C Shares shall be inapplicable to (i) any payments in
lieu of issuance of fractional shares thereof, whether upon
any merger, conversion, stock dividend or otherwise, (ii) the
conversion of Cumulative Shares or Noncumulative Shares into
Common Shares, or (iii) the exercise by the Corporation of its
rights pursuant to Item XIV(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital
stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects
to designate as "capital gain dividends" (as defined in
Section 857 of the Code), any portion (the "Capital Gains
Amount") of the dividends paid or made available for the year
to holders of all classes of stock (the "Total Dividends"),
then, to the extent permissible under the Code and to the
extent it does not cause any dividends to fail to qualify for
the dividends paid deduction under Section 561 of the Code,
the portion of the Capital Gains Amount that shall be
allocable to holders of the Class C Shares shall be the amount
that the total dividends paid or made available to the holders
of the Class C Shares for the year bears to the Total
Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of
the Board of Directors, redeem all or any part of any
redeemable series of Class C Shares at the time
outstanding at the applicable redemption price for
such series fixed in accordance with the provisions
of Section 1 of this Item III; and
(2) Shall, from time to time, make such
redemptions of each series of Class C Shares as may
be required to fulfill the requirements of any
sinking fund
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provided for shares of such series at the applicable
sinking fund redemption price fixed in accordance
with the provisions of Section 1 of this Item III;
and shall in each case pay all accrued and unpaid
dividends to the redemption date.
(b) (1) Notice of every such redemption shall be
mailed, postage prepaid, to the holders of record of the Class
C Shares to be redeemed at their respective addresses then
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Item III prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
Corporation may deposit the aggregate redemption price of
Class C Shares to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, with any bank
or trust company in Cleveland, Ohio, or New York, New York,
having capital and surplus of not less than $100,000,000,
named in such notice and direct that there be paid to the
respective holders of the Class C Shares so to be redeemed
amounts equal to the redemption price of the Class C Shares so
to be redeemed, together with such accrued and unpaid
dividends thereon, on surrender of the share certificate or
certificates held by such holders; and upon the deposit of
such notice in the mail and the making of such deposit of
money with such bank or trust company, such holders shall
cease to be shareholders with respect to such shares; and from
and after the time such notice shall have been so deposited
and such deposit of money shall have been so made, such
holders shall have no rights or claim against the Corporation
with respect to such shares, except only the right to receive
such money from such bank or trust company without interest or
to exercise before the redemption date any unexpired
privileges of conversion. In the event less than all of the
outstanding Class C Shares are to be redeemed, the Corporation
shall select by lot the shares so to be redeemed in such
manner as shall be prescribed by the Board of Directors.
(2) If the holders of Class C Shares which
have been called for redemption shall not within six
years after such deposit claim the amount deposited
for the redemption thereof, any such bank or trust
company shall, upon demand, pay over to the
Corporation such unclaimed amounts and thereupon such
bank or trust company and the Corporation shall be
relieved of all responsibility in respect thereof and
to such holders.
(c) Any Class C Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series, (3) converted
in accordance with the express terms thereof, or (4) otherwise
acquired by the Corporation, shall resume the status of
authorized but unissued Class C Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item XIV of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital stock hereafter created or
authorized, the Corporation may not purchase or redeem (for
sinking fund purposes or otherwise) less than all of the Class
C Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Class C
Shares, unless all dividends on all Class C Shares then
outstanding for all previous and current dividend periods
shall have been declared and paid or funds therefor set apart
and all accrued sinking fund obligations applicable thereto
shall have been complied with.
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Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class C Shares of any series shall
be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be
paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Class C Shares, the
amounts fixed with respect to shares of such series in
accordance with Section 1 of this Item III, plus an amount
equal to all dividends accrued and unpaid thereon to the date
of payment of the amount due pursuant to such liquidation,
dissolution or winding up of the affairs of the Corporation.
In the event the net assets of the Corporation legally
available therefor are insufficient to permit the payment upon
all outstanding Cumulative Shares and Noncumulative Shares of
the full preferential amount to which they are respectively
entitled, then such net assets shall be distributed ratably
upon all outstanding Cumulative Shares and Noncumulative
Shares in proportion to the full preferential amount to which
each such share is entitled.
(2) After payment to the holders of Class C
Shares of the full preferential amounts as aforesaid,
the holders of Class C Shares, as such, shall have no
right or claim to any of the remaining assets of the
Corporation.
(b) The merger or consolidation of the Corporation
into or with any other Corporation, the merger of any other
Corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Class C Shares shall have no
voting rights, except as provided in this Section or required
by law.
(b) (1) If, and so often as, the Corporation shall be
in default in the payment of dividends on any series of Class
C Shares at the time outstanding, whether or not earned or
declared, for a number of dividend payment periods, whether
consecutive or not, which in the aggregate contain at least
540 days, all holders of such Class C Shares, voting
separately as a class, together with all Class A Shares, Class
B Shares, Class D Shares, Class E Shares, Class F Shares,
Class G Shares, Class H Shares, Class I Shares, Class J
Shares, Class K Shares and Noncumulative Shares upon which
like voting rights have been conferred and are exercisable
under the circumstances described in Subsection 5(c), shall be
entitled to elect, as herein provided, a total of two members
of the Board of Directors of the Corporation; provided,
however, that the holders of such Class C Shares shall not
exercise such special class voting rights except at meetings
of such shareholders for the election of directors at which
the holders of not less than 50% of such Class C Shares are
present in person or by proxy; and provided further, that the
special class voting rights provided for in this paragraph
when the same shall have become vested shall remain so vested
until all accrued and unpaid dividends on such Class C Shares
then outstanding shall have been paid or declared and a sum
sufficient for the payment thereof set aside for payment,
whereupon the holders of such Class C Shares shall be divested
of their special class voting rights in respect of subsequent
elections of directors, subject to the revesting of such
special class voting rights in the event above specified in
this paragraph. All dividend payments made on the Class C
Shares, at any time during which
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the Corporation is in default in the payment of dividends on
such Class C Shares for any dividend period, shall be deemed
to be made in respect of the earliest dividend period with
respect to which the Corporation is in default.
(2) In the event of default entitling
holders of Class C Shares to elect two directors as
specified in paragraph (1) of this Subsection, a
special meeting of such holders for the purpose of
electing such directors shall be called by the
Secretary of the Corporation upon written request of,
or may be called by, the holders of record of at
least 10% of the Class C Shares upon which such
default in the payment of dividends exists and notice
thereof shall be given in the same manner as that
required for the annual meeting of shareholders;
provided, however, that the Corporation shall not be
required to call such special meeting if the annual
meeting of shareholders shall be called to be held
within 90 days after the date of receipt of the
foregoing written request from the holders of Class C
Shares. At any meeting at which such holders of Class
C Shares shall be entitled to elect directors,
holders of 50% of such Class C Shares, present in
person or by proxy, shall be sufficient to constitute
a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at
which there shall be such a quorum shall be
sufficient to elect the members of the Board of
Directors which such holders of Class C Shares are
entitled to elect as herein provided. Notwithstanding
any provision of these Amended and Restated Articles
of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by
the holders of any class of shares fixing the number
of directors of the Corporation, the two directors
who may be elected by such holders of Class C Shares
pursuant to this Subsection shall serve in addition
to any other directors then in office or proposed to
be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent
any change otherwise permitted in the total number of
or classifications of directors of the Corporation or
require the resignation of any director elected
otherwise than pursuant to this Subsection.
Notwithstanding any classification of the other
directors of the Corporation, the two directors
elected by such holders of Class C Shares shall be
elected annually for terms expiring at the next
succeeding annual meeting of shareholders.
(3) Upon any divesting of the special class
voting rights of the holders of the Class C Shares in
respect of elections of directors as provided in this
Subsection, the terms of office of all directors then
in office elected by such holders shall terminate
immediately thereupon. If the office of any director
elected by such holders voting as a class becomes
vacant by reason of death, resignation, removal from
office or otherwise, the remaining director elected
by such holders voting as a class may elect a
successor who shall hold office for the unexpired
term in respect of which such vacancy occurred.
(c) If at any time when the holders of Class C Shares
are entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any Class A Shares,
Class B Shares, Class D Shares, Class E Shares, Class F
Shares, Class G Shares, Class H Shares, Class I Shares, Class
J Shares, Class K Shares or Noncumulative Shares are entitled
to elect directors pursuant hereto by reason of any default in
the payment of dividends thereon, then the voting rights of
the Cumulative Shares and the Noncumulative Shares then
entitled to vote shall be combined (with each class of shares
having a number of votes proportional to the aggregate
liquidation preference of its
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outstanding shares). In such case, the holders of Class C
Shares and of all such other shares then entitled so to vote,
voting as a class, shall elect such directors. If the holders
of any such other shares have elected such directors prior to
the happening of the default or event permitting the holders
of Class C Shares to elect directors, or prior to a written
request for the holding of a special meeting being received by
the Secretary of the Corporation as required above, then a new
election shall be held with all such other shares and the
Class C Shares voting together as a single class for such
directors, resulting in the termination of the term of such
previously elected directors upon the election of such new
directors.
(d) The affirmative vote of the holders of at least
two-thirds of the Class C Shares at the time outstanding,
voting separately as a class, given in person or by proxy
either in writing or at a meeting called for the purpose,
shall be necessary to effect either of the following:
(1) Any amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of any
of the provisions of the Amended and Restated
Articles of Incorporation, as amended, or of the Code
of Regulations of the Corporation which affects
adversely and materially the preferences or voting or
other rights of the holders of Class C Shares which
are set forth in these Amended and Restated Articles
of Incorporation, as amended; provided, however,
neither the amendment of these Amended and Restated
Articles of Incorporation, as amended, so as to
authorize, create or change the authorized or
outstanding number of Class C Shares or of any shares
ranking on a parity with or junior to the Class C
Shares nor the amendment of the provisions of the
Code of Regulations so as to change the number or
classification of directors of the Corporation shall
be deemed to affect adversely and materially
preferences or voting or other rights of the holders
of Class C Shares; or
(2) The authorization, creation or increase
in the authorized number of any shares, or any
security convertible into shares, in either case
ranking prior to such series of Class C Shares.
(e) In the event, and only to the extent, that (1)
Class C Shares are issued in more than one series and (2) Ohio
law permits the holders of a series of a class of capital
stock to vote separately as a class, the affirmative vote of
the holders of at least two-thirds of each series of Class C
Shares at the time outstanding, voting separately as a class,
given in person or by proxy either in writing or at a meeting
called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of these Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of such series which are
set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class C Shares
or of any shares ranking on a parity with or junior to the
Class C Shares nor the Amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially the preferences or voting or other
rights of the holders of such series.
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Section 6. 8 3/8% Class C Cumulative Redeemable Preferred
Shares. Of the 1,500,000 authorized Class C Shares, 400,000 shares are
designated as a series entitled "8 3/8% Class C Cumulative Redeemable
Preferred Shares" (hereinafter called "8 3/8% Class C Preferred
Shares"). The 8 3/8% Class C Preferred Shares shall have the express
terms set forth in this Division as being applicable to all Class C
Shares as a class and, in addition, the following express terms
applicable to all 8 3/8% Class C Preferred Shares as a series of Class
C Shares:
(a) The annual dividend rate of the 8 3/8% Class C
Preferred Shares shall be 8 3/8% of the liquidation preference
of $250.00 per share.
(b) Dividends on the 8 3/8% Class C Preferred Shares
shall be payable, if declared, quarterly on or about the
fifteenth day of March, June, September, and December each
year, the first quarterly dividend being payable, if declared,
on September 15, 1998. The dividends payable for each full
quarterly dividend period on each 8 3/8% Class C Preferred
Shares shall be $5.234375.
Dividends for the initial dividend period on the 8
3/8% Class C Preferred Shares, or for any period shorter or
longer than a full dividend period on the 8 3/8% Class C
Preferred Shares, shall be computed on the basis of a 360-day
year consisting of twelve 30-day months. The aggregate
dividend payable quarterly to each holder of 8 3/8% Class C
Preferred Shares shall be rounded to the nearest one
one-hundredth of one cent with $.00005 being rounded upward.
Each dividend shall be payable to the holders of record on
such record date, no less than 10 nor more than 30 days
preceding the payment date thereof, as shall be fixed from
time to time by the Corporation's Board of Directors.
(c) Dividends on 8 3/8% Class C Preferred Shares
shall be cumulative as follows:
(1) With respect to shares included in the
initial issue of 8 3/8% Class C Preferred Shares and
shares issued any time thereafter up to and including
the record date for the payment of the first dividend
on the initial issue of 8 3/8% Class C Preferred
Shares, dividends shall be cumulative from the date
of the initial issue of 8 3/8% Class C Preferred
Shares; and
(2) With respect to shares issued any time
after the aforesaid record date, dividends shall be
cumulative from the dividend payment date next
preceding the date of issue of such shares, except
that if such shares are issued during the period
commencing the day after the record date for the
payment of a dividend on 8 3/8% Class C Preferred
Shares and ending on the payment date of that
dividend, dividends with respect to such shares shall
be cumulative from that dividend payment date.
(d) Except as required to preserve the Corporation's
status as a real estate investment trust under the Internal
Revenue Code of 1986, as amended, the 8 3/8% Class C Preferred
Shares may not be redeemed prior to July 7, 2003. At any time
or from time to time on and after July 7, 2003 the
Corporation, at its option upon not less than thirty (30) nor
more than sixty (60) days' written notice, may redeem all or
any part of the 8 3/8% Class C Preferred Shares at a
redemption price of $250.00 per share plus, in each case, an
amount equal to all dividends accrued and unpaid thereon to
the redemption date, without interest. The redemption price
(other than the portion thereof consisting of accrued and
unpaid dividends) is payable solely out of the sale proceeds
of other capital
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shares of the Corporation, which may include any equity
securities (including common shares and preferred shares),
shares, interests, participation or other ownership interests
(however designated) and any rights (other than debt
securities convertible into or exchangeable for equity
securities), or options to purchase any of the foregoing.
(e) The amount payable per 8 3/8% Class C Preferred
Share in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation shall be $250.00, plus an amount equal to all
dividends accrued and unpaid thereon to the date of payment.
(f) All dividend payments made on the 8 3/8% Class C
Preferred Shares, at any time during which the Corporation is
in default in the payment of dividends on such 8 3/8% Class C
Preferred Shares for any dividend period, shall, for the
purposes of Section 5(b)(1) of this Division A-III, be deemed
to be made in respect of the earliest dividend period with
respect to which the Corporation is in default.
IV. The Class D Cumulative Preferred Shares. The Class D Shares shall
have the following express terms:
Section 1. Series. The Class D Shares may be issued from time
to time in one or more series. All Class D Shares shall be of equal
rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Class D Shares shall rank on a parity with the Class A
Shares, the Class B Shares, the Class C Shares, the Class E Shares,
Class F Shares, Class G Shares, Class H Shares, Class I Shares, Class J
Shares, Class K Shares and the Noncumulative Shares and shall be
identical to all Class A Shares, Class B Shares, Class C Shares, Class
E Shares, Class F Shares, Class G Shares, Class H Shares, Class I
Shares, Class J Shares, Class K Shares and Noncumulative Shares except
(1) in respect of the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on Cumulative Shares shall be
cumulative as set forth herein. Subject to the provisions of Sections 2
through 5, both inclusive, and Item XIII of this Division, which
provisions shall apply to all Class D Shares, the Board of Directors
hereby is authorized to cause such shares to be issued in one or more
series and, with respect to each such series to determine and fix prior
to the issuance thereof (and thereafter, to the extent provided in
clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
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(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item IV) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class D Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class D Shares, shall be
entitled to receive out of any funds legally available
therefor, and when and as declared by the Board of Directors,
dividends in cash at the rate or rates for such series fixed
in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such
dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be
paid upon or declared or set apart for any series of the Class
D Shares for any dividend period unless at the same time (i) a
like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in
proportion to the respective annual dividend rates fixed
therefor, shall have been paid upon or declared or set apart
for all Class D Shares of all series then issued and
outstanding and entitled to receive such dividend and (ii) the
dividends payable for the dividend periods terminating on the
same or any earlier date (but, with respect to Noncumulative
Shares, only with respect to the then current dividend
period), ratably in proportion to the respective dividend
rates fixed therefor, shall have been paid upon or declared or
set apart for all Class A Shares, Class B Shares, Class C
Shares, Class E Shares, Class F Shares, Class G Shares, Class
H Shares, Class I Shares, Class J Shares, Class K Shares and
Noncumulative Shares then issued and outstanding and entitled
to receive such dividends.
(b) So long as any Class D Shares shall be
outstanding no dividend, except a dividend payable in Common
Shares or other shares ranking junior to the Class D Shares,
shall be paid or declared or any distribution be made, except
as aforesaid, in respect of the Common Shares or any other
shares ranking junior to the Class D Shares, nor shall any
Common Shares or any other shares ranking junior to the Class
D Shares be purchased, retired or otherwise acquired by the
Corporation, except out of the proceeds of the sale of Common
Shares or other shares of the Corporation ranking junior to
the Class
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<PAGE> 98
D Shares received by the Corporation subsequent to the date of
first issuance of Class D Shares of any series, unless:
(1) All accrued and unpaid dividends on
Cumulative Shares, including the full dividends for
all current dividend periods, shall have been
declared and paid or a sum sufficient for payment
thereof set apart;
(2) All unpaid dividends on Noncumulative
Shares for the then current dividend period shall
have been declared and paid or a sum sufficient for
payment therefor set apart; and
(3) There shall be no arrearages with
respect to the redemption of Cumulative Shares or
Noncumulative Shares of any series from any sinking
fund provided for shares of such series in accordance
with the provisions of Section 1 of this Item IV.
(c) The foregoing restrictions on the payment of
dividends or other distributions on, or on the purchase,
redemption retirement or other acquisition of, Common Shares
or any other shares ranking on a parity with or junior to the
Class D Shares shall be inapplicable to (i) any payments in
lieu of issuance of fractional shares thereof, whether upon
any merger, conversion, stock dividend or otherwise, (ii) the
conversion of Cumulative Shares or Noncumulative Shares into
Common Shares, or (iii) the exercise by the Corporation of its
rights pursuant to Item XIV(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital
stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects
to designate as "capital gain dividends" (as defined in
Section 857 of the Code), any portion (the "Capital Gains
Amount") of the dividends paid or made available for the year
to holders of all classes of stock (the "Total Dividends"),
then, to the extent permissible under the Code and to the
extent it does not cause any dividends to fail to qualify for
the dividends paid deduction under Section 561 of the Code,
the portion of the Capital Gains Amount that shall be
allocable to holders of the Class D Shares shall be the amount
that the total dividends paid or made available to the holders
of the Class D Shares for the year bears to the Total
Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of
the Board of Directors, redeem all or any part of any
redeemable series of Class D Shares at the time
outstanding at the applicable redemption price for
such series fixed in accordance with the provisions
of Section 1 of this Item IV; and
(2) Shall, from time to time, make such
redemptions of each series of Class D Shares as may
be required to fulfill the requirements of any
sinking fund provided for shares of such series at
the applicable sinking fund redemption price fixed in
accordance with the provisions of Section 1 of this
Item IV; and shall in each case pay all accrued and
unpaid dividends to the redemption date.
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(b) (1) Notice of every such redemption shall be
mailed, postage prepaid, to the holders of record of the Class
D Shares to be redeemed at their respective addresses then
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Item IV prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
Corporation may deposit the aggregate redemption price of
Class D Shares to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, with any bank
or trust company in Cleveland, Ohio, or New York, New York,
having capital and surplus of not less than $100,000,000,
named in such notice and direct that there be paid to the
respective holders of the Class D Shares so to be redeemed
amounts equal to the redemption price of the Class D Shares so
to be redeemed, together with such accrued and unpaid
dividends thereon, on surrender of the share certificate or
certificates held by such holders; and upon the deposit of
such notice in the mail and the making of such deposit of
money with such bank or trust company, such holders shall
cease to be shareholders with respect to such shares; and from
and after the time such notice shall have been so deposited
and such deposit of money shall have been so made, such
holders shall have no rights or claim against the Corporation
with respect to such shares, except only the right to receive
such money from such bank or trust company without interest or
to exercise before the redemption date any unexpired
privileges of conversion. In the event less than all of the
outstanding Class D Shares are to be redeemed, the Corporation
shall select by lot the shares so to be redeemed in such
manner as shall be prescribed by the Board of Directors.
(2) If the holders of Class D Shares which
have been called for redemption shall not within six
years after such deposit claim the amount deposited
for the redemption thereof, any such bank or trust
company shall, upon demand, pay over to the
Corporation such unclaimed amounts and thereupon such
bank or trust company and the Corporation shall be
relieved of all responsibility in respect thereof and
to such holders.
(c) Any Class D Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series, (3) converted
in accordance with the express terms thereof, or (4) otherwise
acquired by the Corporation, shall resume the status of
authorized but unissued Class D Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item XIV of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital stock hereafter created or
authorized, the Corporation may not purchase or redeem (for
sinking fund purposes or otherwise) less than all of the Class
D Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Class D
Shares, unless all dividends on all Class D Shares then
outstanding for all previous and current dividend periods
shall have been declared and paid or funds therefor set apart
and all accrued sinking fund obligations applicable thereto
shall have been complied with.
Section 4. Liquidation.
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<PAGE> 100
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class D Shares of any series shall
be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be
paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Class D Shares, the
amounts fixed with respect to shares of such series in
accordance with Section 1 of this Item IV, plus an amount
equal to all dividends accrued and unpaid thereon to the date
of payment of the amount due pursuant to such liquidation,
dissolution or winding up of the affairs of the Corporation.
In the event the net assets of the Corporation legally
available therefor are insufficient to permit the payment upon
all outstanding Cumulative Shares and Noncumulative Shares of
the full preferential amount to which they are respectively
entitled, then such net assets shall be distributed ratably
upon all outstanding Cumulative Shares and Noncumulative
Shares in proportion to the full preferential amount to which
each such share is entitled.
(2) After payment to the holders of Class D
Shares of the full preferential amounts as aforesaid,
the holders of Class D Shares, as such, shall have no
right or claim to any of the remaining assets of the
Corporation.
(b) The merger or consolidation of the Corporation
into or with any other Corporation, the merger of any other
Corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Class D Shares shall have no
voting rights, except as provided in this Section or required
by law.
(b) (1) If, and so often as, the Corporation shall be
in default in the payment of dividends on any series of Class
D Shares at the time outstanding, whether or not earned or
declared, for a number of dividend payment periods, whether
consecutive or not, which in the aggregate contain at least
540 days, all holders of such Class D Shares, voting
separately as a class, together with all Class A Shares, Class
B Shares, Class C Shares, Class E Shares, Class F Shares,
Class G Shares, Class H Shares, Class I Shares, Class J
Shares, Class K Shares and Noncumulative Shares upon which
like voting rights have been conferred and are exercisable
under the circumstances described in Subsection 5(c), shall be
entitled to elect, as herein provided, a total of two members
of the Board of Directors of the Corporation; provided,
however, that the holders of such Class D Shares shall not
exercise such special class voting rights except at meetings
of such shareholders for the election of directors at which
the holders of not less than 50% of such Class D Shares are
present in person or by proxy; and provided further, that the
special class voting rights provided for in this paragraph
when the same shall have become vested shall remain so vested
until all accrued and unpaid dividends on such Class D Shares
then outstanding shall have been paid or declared and a sum
sufficient for the payment thereof set aside for payment,
whereupon the holders of such Class D Shares shall be divested
of their special class voting rights in respect of subsequent
elections of directors, subject to the revesting of such
special class voting rights in the event above specified in
this paragraph. All dividend payments made on the Class D
Shares, at any time during which the Corporation is in default
in the payment of dividends on such Class D Shares for any
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<PAGE> 101
dividend period, shall be deemed to be made in respect of the
earliest dividend period with respect to which the Corporation
is in default.
(2) In the event of default entitling
holders of Class D Shares to elect two directors as
specified in paragraph (1) of this Subsection, a
special meeting of such holders for the purpose of
electing such directors shall be called by the
Secretary of the Corporation upon written request of,
or may be called by, the holders of record of at
least 10% of the Class D Shares upon which such
default in the payment of dividends exists and notice
thereof shall be given in the same manner as that
required for the annual meeting of shareholders;
provided, however, that the Corporation shall not be
required to call such special meeting if the annual
meeting of shareholders shall be called to be held
within 90 days after the date of receipt of the
foregoing written request from the holders of Class D
Shares. At any meeting at which such holders of Class
D Shares shall be entitled to elect directors,
holders of 50% of such Class D Shares, present in
person or by proxy, shall be sufficient to constitute
a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at
which there shall be such a quorum shall be
sufficient to elect the members of the Board of
Directors which such holders of Class D Shares are
entitled to elect as herein provided. Notwithstanding
any provision of these Amended and Restated Articles
of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by
the holders of any class of shares fixing the number
of directors of the Corporation, the two directors
who may be elected by such holders of Class D Shares
pursuant to this Subsection shall serve in addition
to any other directors then in office or proposed to
be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent
any change otherwise permitted in the total number of
or classifications of directors of the Corporation or
require the resignation of any director elected
otherwise than pursuant to this Subsection.
Notwithstanding any classification of the other
directors of the Corporation, the two directors
elected by such holders of Class D Shares shall be
elected annually for terms expiring at the next
succeeding annual meeting of shareholders.
(3) Upon any divesting of the special class
voting rights of the holders of the Class D Shares in
respect of elections of directors as provided in this
Subsection, the terms of office of all directors then
in office elected by such holders shall terminate
immediately thereupon. If the office of any director
elected by such holders voting as a class becomes
vacant by reason of death, resignation, removal from
office or otherwise, the remaining director elected
by such holders voting as a class may elect a
successor who shall hold office for the unexpired
term in respect of which such vacancy occurred.
(c) If at any time when the holders of Class D Shares
are entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any Class A Shares,
Class B Shares, Class C Shares, Class E Shares, Class F
Shares, Class G Shares, Class H Shares, Class I Shares, Class
J Shares, Class K Shares or Noncumulative Shares are entitled
to elect directors pursuant hereto by reason of any default in
the payment of dividends thereon, then the voting rights of
the Cumulative Shares and the Noncumulative Shares then
entitled to vote shall be combined (with each class of shares
having a number of votes proportional to the aggregate
liquidation preference of its outstanding shares). In such
case, the holders of Class D Shares and of all such other
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<PAGE> 102
shares then entitled so to vote, voting as a class, shall
elect such directors. If the holders of any such other shares
have elected such directors prior to the happening of the
default or event permitting the holders of Class D Shares to
elect directors, or prior to a written request for the holding
of a special meeting being received by the Secretary of the
Corporation as required above, then a new election shall be
held with all such other shares and the Class D Shares voting
together as a single class for such directors, resulting in
the termination of the term of such previously elected
directors upon the election of such new directors.
(d) The affirmative vote of the holders of at least
two-thirds of the Class D Shares at the time outstanding,
voting separately as a class, given in person or by proxy
either in writing or at a meeting called for the purpose,
shall be necessary to effect either of the following:
(1) Any amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of any
of the provisions of the Amended and Restated
Articles of Incorporation, as amended, or of the Code
of Regulations of the Corporation which affects
adversely and materially the preferences or voting or
other rights of the holders of Class D Shares which
are set forth in these Amended and Restated Articles
of Incorporation, as amended; provided, however,
neither the amendment of these Amended and Restated
Articles of Incorporation, as amended, so as to
authorize, create or change the authorized or
outstanding number of Class D Shares or of any shares
ranking on a parity with or junior to the Class D
Shares nor the amendment of the provisions of the
Code of Regulations so as to change the number or
classification of directors of the Corporation shall
be deemed to affect adversely and materially
preferences or voting or other rights of the holders
of Class D Shares; or
(2) The authorization, creation or increase
in the authorized number of any shares, or any
security convertible into shares, in either case
ranking prior to such series of Class D Shares.
(e) In the event, and only to the extent, that (1)
Class D Shares are issued in more than one series and (2) Ohio
law permits the holders of a series of a class of capital
stock to vote separately as a class, the affirmative vote of
the holders of at least two-thirds of each series of Class D
Shares at the time outstanding, voting separately as a class,
given in person or by proxy either in writing or at a meeting
called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of these Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of such series which are
set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class D Shares
or of any shares ranking on a parity with or junior to the
Class D Shares nor the Amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially the preferences or voting or other
rights of the holders of such series.
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Section 6. 8.68% Class D Cumulative Redeemable Preferred
Shares. Of the 1,500,000 authorized Class D Shares, 230,000 shares are
designated as a series entitled "8.68% Class D Cumulative Redeemable
Preferred Shares" (hereinafter called "8.68% Class D Preferred
Shares"). The 8.68% Class D Preferred Shares shall have the express
terms set forth in this Division as being applicable to all Class D
Shares as a class and, in addition, the following express terms
applicable to all 8.68% Class D Preferred Shares as a series of Class D
Shares:
(a) The annual dividend rate of the 8.68% Class D
Preferred Shares shall be 8.68 % of the liquidation preference
of $250.00 per share.
(b) Dividends on the 8.68% Class D Preferred Shares
shall be payable, if declared, quarterly on or about the
fifteenth day of March, June, September, and December each
year, the first quarterly dividend being payable, if declared,
on December 15, 1998 The dividends payable for each full
quarterly dividend period on each 8.68 % Class D Preferred
Shares shall be $5.425.
Dividends for the initial dividend period on the
8.68% Class D Preferred Shares, or for any period shorter or
longer than a full dividend period on the 8.68% Class D
Preferred Shares, shall be computed on the basis of a 360-day
year consisting of twelve 30-day months. The aggregate
dividend payable quarterly to each holder of 8.68% Class D
Preferred Shares shall be rounded to the nearest one
one-hundredth of one cent with $.00005 being rounded upward.
Each dividend shall be payable to the holders of record on
such record date, no less than 10 nor more than 30 days
preceding the payment date thereof, as shall be fixed from
time to time by the Corporation's Board of Directors.
(c) Dividends on 8.68 % Class D Preferred Shares
shall be cumulative as follows:
(1) With respect to shares included in the
initial issue of 8.68% Class D Preferred Shares and
shares issued any time thereafter up to and including
the record date for the payment of the first dividend
on the initial issue of 8.68% Class D Preferred
Shares, dividends shall be cumulative from the date of
the initial issue of 8.68 % Class D Preferred Shares;
and
(2) With respect to shares issued any time
after the aforesaid record date, dividends shall be
cumulative from the dividend payment date next
preceding the date of issue of such shares, except
that if such shares are issued during the period
commencing the day after the record date for the
payment of a dividend on 8.68 % Class D Preferred
Shares and ending on the payment date of that
dividend, dividends with respect to such shares shall
be cumulative from that dividend payment date.
(d) Except as required to preserve the Corporation's
status as a real estate investment trust under the Internal
Revenue Code of 1986, as amended, the 8.68% Class D Preferred
Shares may not be redeemed prior to August 20, 2003. At any
time or from time to time on and after August 20, 2003 the
Corporation, at its option upon not less than thirty (30) nor
more than sixty (60) days' written notice, may redeem all or
any part of the 8.68% Class D Preferred Shares at a redemption
price of $250.00 per share plus, in each case, an amount equal
to all dividends accrued and unpaid thereon to the redemption
date, without interest. The redemption price (other than the
portion thereof consisting of accrued and unpaid dividends) is
payable solely out of the sale proceeds of other capital
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shares of the Corporation, which may include any equity
securities (including common shares and preferred shares),
shares, interests, participation or other ownership interests
(however designated) and any rights (other than debt
securities convertible into or exchangeable for equity
securities), or options to purchase any of the foregoing.
(e) The amount payable per 8.68% Class D Preferred
Share in the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation shall be $250.00, plus an amount equal to all
dividends accrued and unpaid thereon to the date of payment.
(f) All dividend payments made on the 8.68% Class D
Preferred Shares, at any time during which the Corporation is
in default in the payment of dividends on such 8.68 % Class D
Preferred Shares for any dividend period, shall, for the
purposes of Section 5(b)(1) of this Division A-IV, be deemed
to be made in respect of the earliest dividend period with
respect to which the Corporation is in default.
V. The Class E Cumulative Preferred Shares. The Class E Shares shall
have the following express terms:
Section 1. Series. The Class E Shares may be issued from time
to time in one or more series. All Class E Shares shall be of equal
rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Class E Shares shall rank on a parity with the Class A
Shares, the Class B Shares, the Class C Shares, the Class D Shares,
Class F Shares, Class G Shares, Class H Shares, Class I Shares, Class J
Shares, Class K Shares and the Noncumulative Shares and shall be
identical to all Class A Shares, Class B Shares, Class C Shares, Class
D Shares, Class F Shares, Class G Shares, Class H Shares, Class I
Shares, Class J Shares, Class K Shares and Noncumulative Shares except
(1) in respect of the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on Cumulative Shares shall be
cumulative as set forth herein. Subject to the provisions of Sections 2
through 5, both inclusive, and Item XIII of this Division, which
provisions shall apply to all Class E Shares, the Board of Directors
hereby is authorized to cause such shares to be issued in one or more
series and, with respect to each such series to determine and fix prior
to the issuance thereof (and thereafter, to the extent provided in
clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
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<PAGE> 105
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item V) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class E Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class E Shares, shall be
entitled to receive out of any funds legally available
therefor, and when and as declared by the Board of Directors,
dividends in cash at the rate or rates for such series fixed
in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such
dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be
paid upon or declared or set apart for any series of the Class
E Shares for any dividend period unless at the same time (i) a
like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in
proportion to the respective annual dividend rates fixed
therefor, shall have been paid upon or declared or set apart
for all Class E Shares of all series then issued and
outstanding and entitled to receive such dividend and (ii) the
dividends payable for the dividend periods terminating on the
same or any earlier date (but, with respect to Noncumulative
Shares, only with respect to the then current dividend
period), ratably in proportion to the respective dividend
rates fixed therefor, shall have been paid upon or declared or
set apart for all Class A Shares, Class B Shares, Class C
Shares, Class D Shares, Class F Shares, Class G Shares, Class
H Shares, Class I Shares, Class J Shares, Class K Shares and
Noncumulative Shares then issued and outstanding and entitled
to receive such dividends.
(b) So long as any Class E Shares shall be
outstanding no dividend, except a dividend payable in Common
Shares or other shares ranking junior to the Class E Shares,
shall be paid or declared or any distribution be made, except
as aforesaid, in respect of the Common Shares or any other
shares ranking junior to the Class E Shares, nor shall any
Common Shares or any other shares ranking junior to the Class
E Shares be purchased, retired or otherwise acquired by the
Corporation, except out of the proceeds of the sale of Common
Shares or other shares of the Corporation ranking junior to
the Class
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<PAGE> 106
E Shares received by the Corporation subsequent to the date of
first issuance of Class E Shares of any series, unless:
(1) All accrued and unpaid dividends on
Cumulative Shares, including the full dividends for
all current dividend periods, shall have been
declared and paid or a sum sufficient for payment
thereof set apart;
(2) All unpaid dividends on Noncumulative
Shares for the then current dividend period shall
have been declared and paid or a sum sufficient for
payment therefor set apart; and
(3) There shall be no arrearages with
respect to the redemption of Cumulative Shares or
Noncumulative Shares of any series from any sinking
fund provided for shares of such series in accordance
with the provisions of Section 1 of this Item V.
(c) The foregoing restrictions on the payment of
dividends or other distributions on, or on the purchase,
redemption retirement or other acquisition of, Common Shares
or any other shares ranking on a parity with or junior to the
Class E Shares shall be inapplicable to (i) any payments in
lieu of issuance of fractional shares thereof, whether upon
any merger, conversion, stock dividend or otherwise, (ii) the
conversion of Cumulative Shares or Noncumulative Shares into
Common Shares, or (iii) the exercise by the Corporation of its
rights pursuant to Item XIV(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital
stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects
to designate as "capital gain dividends" (as defined in
Section 857 of the Code), any portion (the "Capital Gains
Amount") of the dividends paid or made available for the year
to holders of all classes of stock (the "Total Dividends"),
then, to the extent permissible under the Code and to the
extent it does not cause any dividends to fail to qualify for
the dividends paid deduction under Section 561 of the Code,
the portion of the Capital Gains Amount that shall be
allocable to holders of the Class E Shares shall be the amount
that the total dividends paid or made available to the holders
of the Class E Shares for the year bears to the Total
Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of
the Board of Directors, redeem all or any part of any
redeemable series of Class E Shares at the time
outstanding at the applicable redemption price for
such series fixed in accordance with the provisions
of Section 1 of this Item V; and
(2) Shall, from time to time, make such
redemptions of each series of Class E Shares as may
be required to fulfill the requirements of any
sinking fund provided for shares of such series at
the applicable sinking fund redemption price fixed in
accordance with the provisions of Section 1 of this
Item V; and shall in each case pay all accrued and
unpaid dividends to the redemption date.
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<PAGE> 107
(b) (1) Notice of every such redemption shall be
mailed, postage prepaid, to the holders of record of the Class
E Shares to be redeemed at their respective addresses then
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Item V prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
Corporation may deposit the aggregate redemption price of
Class E Shares to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, with any bank
or trust company in Cleveland, Ohio, or New York, New York,
having capital and surplus of not less than $100,000,000,
named in such notice and direct that there be paid to the
respective holders of the Class E Shares so to be redeemed
amounts equal to the redemption price of the Class E Shares so
to be redeemed, together with such accrued and unpaid
dividends thereon, on surrender of the share certificate or
certificates held by such holders; and upon the deposit of
such notice in the mail and the making of such deposit of
money with such bank or trust company, such holders shall
cease to be shareholders with respect to such shares; and from
and after the time such notice shall have been so deposited
and such deposit of money shall have been so made, such
holders shall have no rights or claim against the Corporation
with respect to such shares, except only the right to receive
such money from such bank or trust company without interest or
to exercise before the redemption date any unexpired
privileges of conversion. In the event less than all of the
outstanding Class E Shares are to be redeemed, the Corporation
shall select by lot the shares so to be redeemed in such
manner as shall be prescribed by the Board of Directors.
(2) If the holders of Class E Shares which have
been called for redemption shall not within six years
after such deposit claim the amount deposited for the
redemption thereof, any such bank or trust company
shall, upon demand, pay over to the Corporation such
unclaimed amounts and thereupon such bank or trust
company and the Corporation shall be relieved of all
responsibility in respect thereof and to such
holders.
(c) Any Class E Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series, (3) converted
in accordance with the express terms thereof, or (4) otherwise
acquired by the Corporation, shall resume the status of
authorized but unissued Class E Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item XIV of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital stock hereafter created or
authorized, the Corporation may not purchase or redeem (for
sinking fund purposes or otherwise) less than all of the Class
E Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Class E
Shares, unless all dividends on all Class E Shares then
outstanding for all previous and current dividend periods
shall have been declared and paid or funds therefor set apart
and all accrued sinking fund obligations applicable thereto
shall have been complied with.
Section 4. Liquidation.
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<PAGE> 108
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class E Shares of any series shall
be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be
paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Class E Shares, the
amounts fixed with respect to shares of such series in
accordance with Section 1 of this Item V, plus an amount equal
to all dividends accrued and unpaid thereon to the date of
payment of the amount due pursuant to such liquidation,
dissolution or winding up of the affairs of the Corporation.
In the event the net assets of the Corporation legally
available therefor are insufficient to permit the payment upon
all outstanding Cumulative Shares and Noncumulative Shares of
the full preferential amount to which they are respectively
entitled, then such net assets shall be distributed ratably
upon all outstanding Cumulative Shares and Noncumulative
Shares in proportion to the full preferential amount to which
each such share is entitled.
(2) After payment to the holders of Class E
Shares of the full preferential amounts as aforesaid,
the holders of Class E Shares, as such, shall have no
right or claim to any of the remaining assets of the
Corporation.
(b) The merger or consolidation of the Corporation
into or with any other Corporation, the merger of any other
Corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Class E Shares shall have no
voting rights, except as provided in this Section or required
by law.
(b) (1) If, and so often as, the Corporation shall be
in default in the payment of dividends on any series of Class
E Shares at the time outstanding, whether or not earned or
declared, for a number of dividend payment periods, whether
consecutive or not, which in the aggregate contain at least
540 days, all holders of such Class E Shares, voting
separately as a class, together with all Class A Shares, Class
B Shares, Class C Shares, Class D Shares, Class F Shares,
Class G Shares, Class H Shares, Class I Shares, Class J
Shares, Class K Shares and Noncumulative Shares upon which
like voting rights have been conferred and are exercisable
under the circumstances described in Subsection 5(c), shall be
entitled to elect, as herein provided, a total of two members
of the Board of Directors of the Corporation; provided,
however, that the holders of such Class E Shares shall not
exercise such special class voting rights except at meetings
of such shareholders for the election of directors at which
the holders of not less than 50% of such Class E Shares are
present in person or by proxy; and provided further, that the
special class voting rights provided for in this paragraph
when the same shall have become vested shall remain so vested
until all accrued and unpaid dividends on such Class E Shares
then outstanding shall have been paid or declared and a sum
sufficient for the payment thereof set aside for payment,
whereupon the holders of such Class E Shares shall be divested
of their special class voting rights in respect of subsequent
elections of directors, subject to the revesting of such
special class voting rights in the event above specified in
this paragraph. All dividend payments made on the Class E
Shares, at any time during which the Corporation is in default
in the payment of dividends on such Class E Shares for any
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dividend period, shall be deemed to be made in respect of the
earliest dividend period with respect to which the Corporation
is in default.
(2) In the event of default entitling
holders of Class E Shares to elect two directors as
specified in paragraph (1) of this Subsection, a
special meeting of such holders for the purpose of
electing such directors shall be called by the
Secretary of the Corporation upon written request of,
or may be called by, the holders of record of at
least 10% of the Class E Shares upon which such
default in the payment of dividends exists and notice
thereof shall be given in the same manner as that
required for the annual meeting of shareholders;
provided, however, that the Corporation shall not be
required to call such special meeting if the annual
meeting of shareholders shall be called to be held
within 90 days after the date of receipt of the
foregoing written request from the holders of Class E
Shares. At any meeting at which such holders of Class
E Shares shall be entitled to elect directors,
holders of 50% of such Class E Shares, present in
person or by proxy, shall be sufficient to constitute
a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at
which there shall be such a quorum shall be
sufficient to elect the members of the Board of
Directors which such holders of Class E Shares are
entitled to elect as herein provided. Notwithstanding
any provision of these Amended and Restated Articles
of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by
the holders of any class of shares fixing the number
of directors of the Corporation, the two directors
who may be elected by such holders of Class E Shares
pursuant to this Subsection shall serve in addition
to any other directors then in office or proposed to
be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent
any change otherwise permitted in the total number of
or classifications of directors of the Corporation or
require the resignation of any director elected
otherwise than pursuant to this Subsection.
Notwithstanding any classification of the other
directors of the Corporation, the two directors
elected by such holders of Class E Shares shall be
elected annually for terms expiring at the next
succeeding annual meeting of shareholders.
(3) Upon any divesting of the special class
voting rights of the holders of the Class E Shares in
respect of elections of directors as provided in this
Subsection, the terms of office of all directors then
in office elected by such holders shall terminate
immediately thereupon. If the office of any director
elected by such holders voting as a class becomes
vacant by reason of death, resignation, removal from
office or otherwise, the remaining director elected
by such holders voting as a class may elect a
successor who shall hold office for the unexpired
term in respect of which such vacancy occurred.
(c) If at any time when the holders of Class E Shares
are entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any Class A Shares,
Class B Shares, Class C Shares, Class D Shares, Class F
Shares, Class G Shares, Class H Shares, Class I Shares, Class
J Shares, Class K Shares or Noncumulative Shares are entitled
to elect directors pursuant hereto by reason of any default in
the payment of dividends thereon, then the voting rights of
the Cumulative Shares and the Noncumulative Shares then
entitled to vote shall be combined (with each class of shares
having a number of votes proportional to the aggregate
liquidation preference of its outstanding shares). In such
case, the holders of Class E Shares and of all such other
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<PAGE> 110
shares then entitled so to vote, voting as a class, shall
elect such directors. If the holders of any such other shares
have elected such directors prior to the happening of the
default or event permitting the holders of Class E Shares to
elect directors, or prior to a written request for the holding
of a special meeting being received by the Secretary of the
Corporation as required above, then a new election shall be
held with all such other shares and the Class E Shares voting
together as a single class for such directors, resulting in
the termination of the term of such previously elected
directors upon the election of such new directors.
(d) The affirmative vote of the holders of at least
two-thirds of the Class E Shares at the time outstanding,
voting separately as a class, given in person or by proxy
either in writing or at a meeting called for the purpose,
shall be necessary to effect either of the following:
(1) Any amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of any
of the provisions of the Amended and Restated
Articles of Incorporation, as amended, or of the Code
of Regulations of the Corporation which affects
adversely and materially the preferences or voting or
other rights of the holders of Class E Shares which
are set forth in these Amended and Restated Articles
of Incorporation, as amended; provided, however,
neither the amendment of these Amended and Restated
Articles of Incorporation, as amended, so as to
authorize, create or change the authorized or
outstanding number of Class E Shares or of any shares
ranking on a parity with or junior to the Class E
Shares nor the amendment of the provisions of the
Code of Regulations so as to change the number or
classification of directors of the Corporation shall
be deemed to affect adversely and materially
preferences or voting or other rights of the holders
of Class E Shares; or
(2) The authorization, creation or increase
in the authorized number of any shares, or any
security convertible into shares, in either case
ranking prior to such series of Class E Shares.
(e) In the event, and only to the extent, that (1)
Class E Shares are issued in more than one series and (2) Ohio
law permits the holders of a series of a class of capital
stock to vote separately as a class, the affirmative vote of
the holders of at least two-thirds of each series of Class E
Shares at the time outstanding, voting separately as a class,
given in person or by proxy either in writing or at a meeting
called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of these Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of such series which are
set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class E Shares
or of any shares ranking on a parity with or junior to the
Class E Shares nor the Amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially the preferences or voting or other
rights of the holders of such series.
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VI. The Class F Cumulative Preferred Shares. The Class F Shares shall
have the following express terms:
Section 1. Series. The Class F Shares may be issued from time
to time in one or more series. All Class F Shares shall be of equal
rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Class F Shares shall rank on a parity with the Class A
Shares, the Class B Shares, the Class C Shares, the Class D Shares,
Class E Shares, Class G Shares, Class H Shares, Class I Shares, Class J
Shares, Class K Shares and the Noncumulative Shares and shall be
identical to all Class A Shares, Class B Shares, Class C Shares, Class
D Shares, Class E Shares, Class G Shares, Class H Shares, Class I
Shares, Class J Shares, Class K Shares and Noncumulative Shares except
(1) in respect of the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on Cumulative Shares shall be
cumulative as set forth herein. Subject to the provisions of Sections 2
through 5, both inclusive, and Item XIII of this Division, which
provisions shall apply to all Class F Shares, the Board of Directors
hereby is authorized to cause such shares to be issued in one or more
series and, with respect to each such series to determine and fix prior
to the issuance thereof (and thereafter, to the extent provided in
clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item VI) on the issuance of
shares of the same series or of any other class or series.
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The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class F Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class F Shares, shall be
entitled to receive out of any funds legally available
therefor, and when and as declared by the Board of Directors,
dividends in cash at the rate or rates for such series fixed
in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such
dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be
paid upon or declared or set apart for any series of the Class
F Shares for any dividend period unless at the same time (i) a
like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in
proportion to the respective annual dividend rates fixed
therefor, shall have been paid upon or declared or set apart
for all Class F Shares of all series then issued and
outstanding and entitled to receive such dividend and (ii) the
dividends payable for the dividend periods terminating on the
same or any earlier date (but, with respect to Noncumulative
Shares, only with respect to the then current dividend
period), ratably in proportion to the respective dividend
rates fixed therefor, shall have been paid upon or declared or
set apart for all Class A Shares, Class B Shares, Class C
Shares, Class D Shares, Class E Shares, Class G Shares, Class
H Shares, Class I Shares, Class J Shares, Class K Shares and
Noncumulative Shares then issued and outstanding and entitled
to receive such dividends.
(b) So long as any Class F Shares shall be
outstanding no dividend, except a dividend payable in Common
Shares or other shares ranking junior to the Class F Shares,
shall be paid or declared or any distribution be made, except
as aforesaid, in respect of the Common Shares or any other
shares ranking junior to the Class F Shares, nor shall any
Common Shares or any other shares ranking junior to the Class
F Shares be purchased, retired or otherwise acquired by the
Corporation, except out of the proceeds of the sale of Common
Shares or other shares of the Corporation ranking junior to
the Class F Shares received by the Corporation subsequent to
the date of first issuance of Class F Shares of any series,
unless:
(1) All accrued and unpaid dividends on
Cumulative Shares, including the full dividends for
all current dividend periods, shall have been
declared and paid or a sum sufficient for payment
thereof set apart;
(2) All unpaid dividends on Noncumulative
Shares for the then current dividend period shall
have been declared and paid or a sum sufficient for
payment therefor set apart; and
(3) There shall be no arrearages with
respect to the redemption of Cumulative Shares or
Noncumulative Shares of any series from any sinking
fund provided for shares of such series in accordance
with the provisions of Section 1 of this Item VI.
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(c) The foregoing restrictions on the payment of
dividends or other distributions on, or on the purchase,
redemption retirement or other acquisition of, Common Shares
or any other shares ranking on a parity with or junior to the
Class F Shares shall be inapplicable to (i) any payments in
lieu of issuance of fractional shares thereof, whether upon
any merger, conversion, stock dividend or otherwise, (ii) the
conversion of Cumulative Shares or Noncumulative Shares into
Common Shares, or (iii) the exercise by the Corporation of its
rights pursuant to Item XIV(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital
stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects
to designate as "capital gain dividends" (as defined in
Section 857 of the Code), any portion (the "Capital Gains
Amount") of the dividends paid or made available for the year
to holders of all classes of stock (the "Total Dividends"),
then, to the extent permissible under the Code and to the
extent it does not cause any dividends to fail to qualify for
the dividends paid deduction under Section 561 of the Code,
the portion of the Capital Gains Amount that shall be
allocable to holders of the Class F Shares shall be the amount
that the total dividends paid or made available to the holders
of the Class F Shares for the year bears to the Total
Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of
the Board of Directors, redeem all or any part of any
redeemable series of Class F Shares at the time
outstanding at the applicable redemption price for
such series fixed in accordance with the provisions
of Section 1 of this Item VI; and
(2) Shall, from time to time, make such
redemptions of each series of Class F Shares as may
be required to fulfill the requirements of any
sinking fund provided for shares of such series at
the applicable sinking fund redemption price fixed in
accordance with the provisions of Section 1 of this
Item VI; and shall in each case pay all accrued and
unpaid dividends to the redemption date.
(b) (1) Notice of every such redemption shall be
mailed, postage prepaid, to the holders of record of the Class
F Shares to be redeemed at their respective addresses then
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Item VI prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
Corporation may deposit the aggregate redemption price of
Class F Shares to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, with any bank
or trust company in Cleveland, Ohio, or New York, New York,
having capital and surplus of not less than $100,000,000,
named in such notice and direct that there be paid to the
respective holders of the Class F Shares so to be redeemed
amounts equal to the redemption price of the Class F Shares so
to be redeemed, together with such accrued and unpaid
dividends thereon, on surrender of the share certificate or
certificates held by such holders; and upon the deposit of
such notice in the mail and the making of such deposit of
money with such bank or trust company, such holders shall
cease to be
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shareholders with respect to such shares; and from and after
the time such notice shall have been so deposited and such
deposit of money shall have been so made, such holders shall
have no rights or claim against the Corporation with respect
to such shares, except only the right to receive such money
from such bank or trust company without interest or to
exercise before the redemption date any unexpired privileges
of conversion. In the event less than all of the outstanding
Class F Shares are to be redeemed, the Corporation shall
select by lot the shares so to be redeemed in such manner as
shall be prescribed by the Board of Directors.
(2) If the holders of Class F Shares which have
been called for redemption shall not within six years
after such deposit claim the amount deposited for the
redemption thereof, any such bank or trust company
shall, upon demand, pay over to the Corporation such
unclaimed amounts and thereupon such bank or trust
company and the Corporation shall be relieved of all
responsibility in respect thereof and to such
holders.
(c) Any Class F Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series, (3) converted
in accordance with the express terms thereof, or (4) otherwise
acquired by the Corporation, shall resume the status of
authorized but unissued Class F Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item XIV of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital stock hereafter created or
authorized, the Corporation may not purchase or redeem (for
sinking fund purposes or otherwise) less than all of the Class
F Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Class F
Shares, unless all dividends on all Class F Shares then
outstanding for all previous and current dividend periods
shall have been declared and paid or funds therefor set apart
and all accrued sinking fund obligations applicable thereto
shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class F Shares of any series shall
be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be
paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Class F Shares, the
amounts fixed with respect to shares of such series in
accordance with Section 1 of this Item VI, plus an amount
equal to all dividends accrued and unpaid thereon to the date
of payment of the amount due pursuant to such liquidation,
dissolution or winding up of the affairs of the Corporation.
In the event the net assets of the Corporation legally
available therefor are insufficient to permit the payment upon
all outstanding Cumulative Shares and Noncumulative Shares of
the full preferential amount to which they are respectively
entitled, then such net assets shall be distributed ratably
upon all outstanding Cumulative Shares and Noncumulative
Shares in proportion to the full preferential amount to which
each such share is entitled.
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(2) After payment to the holders of Class F
Shares of the full preferential amounts as aforesaid,
the holders of Class F Shares, as such, shall have no
right or claim to any of the remaining assets of the
Corporation.
(b) The merger or consolidation of the Corporation
into or with any other Corporation, the merger of any other
Corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Class F Shares shall have no
voting rights, except as provided in this Section or required
by law.
(b) (1) If, and so often as, the Corporation shall be
in default in the payment of dividends on any series of Class
F Shares at the time outstanding, whether or not earned or
declared, for a number of dividend payment periods, whether
consecutive or not, which in the aggregate contain at least
540 days, all holders of such Class F Shares, voting
separately as a class, together with all Class A Shares, Class
B Shares, Class C Shares, Class D Shares, Class E Shares,
Class G Shares, Class H Shares, Class I Shares, Class J
Shares, Class K Shares and Noncumulative Shares upon which
like voting rights have been conferred and are exercisable
under the circumstances described in Subsection 5(c), shall be
entitled to elect, as herein provided, a total of two members
of the Board of Directors of the Corporation; provided,
however, that the holders of such Class F Shares shall not
exercise such special class voting rights except at meetings
of such shareholders for the election of directors at which
the holders of not less than 50% of such Class F Shares are
present in person or by proxy; and provided further, that the
special class voting rights provided for in this paragraph
when the same shall have become vested shall remain so vested
until all accrued and unpaid dividends on such Class F Shares
then outstanding shall have been paid or declared and a sum
sufficient for the payment thereof set aside for payment,
whereupon the holders of such Class F Shares shall be divested
of their special class voting rights in respect of subsequent
elections of directors, subject to the revesting of such
special class voting rights in the event above specified in
this paragraph. All dividend payments made on the Class F
Shares, at any time during which the Corporation is in default
in the payment of dividends on such Class F Shares for any
dividend period, shall be deemed to be made in respect of the
earliest dividend period with respect to which the Corporation
is in default.
(2) In the event of default entitling holders of
Class F Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting
of such holders for the purpose of electing such
directors shall be called by the Secretary of the
Corporation upon written request of, or may be called
by, the holders of record of at least 10% of the
Class F Shares upon which such default in the payment
of dividends exists and notice thereof shall be given
in the same manner as that required for the annual
meeting of shareholders; provided, however, that the
Corporation shall not be required to call such
special meeting if the annual meeting of shareholders
shall be called to be held within 90 days after the
date of receipt of the foregoing written request from
the holders of Class F Shares. At any meeting at
which such holders of Class F Shares shall be
entitled to elect directors, holders of 50% of such
Class F Shares, present in person or by proxy, shall
be sufficient to constitute a quorum, and the vote of
the holders of a
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<PAGE> 116
majority of such shares so present at any such
meeting at which there shall be such a quorum shall
be sufficient to elect the members of the Board of
Directors which such holders of Class F Shares are
entitled to elect as herein provided. Notwithstanding
any provision of these Amended and Restated Articles
of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by
the holders of any class of shares fixing the number
of directors of the Corporation, the two directors
who may be elected by such holders of Class F Shares
pursuant to this Subsection shall serve in addition
to any other directors then in office or proposed to
be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent
any change otherwise permitted in the total number of
or classifications of directors of the Corporation or
require the resignation of any director elected
otherwise than pursuant to this Subsection.
Notwithstanding any classification of the other
directors of the Corporation, the two directors
elected by such holders of Class F Shares shall be
elected annually for terms expiring at the next
succeeding annual meeting of shareholders.
(3) Upon any divesting of the special class
voting rights of the holders of the Class F Shares in
respect of elections of directors as provided in this
Subsection, the terms of office of all directors then
in office elected by such holders shall terminate
immediately thereupon. If the office of any director
elected by such holders voting as a class becomes
vacant by reason of death, resignation, removal from
office or otherwise, the remaining director elected
by such holders voting as a class may elect a
successor who shall hold office for the unexpired
term in respect of which such vacancy occurred.
(c) If at any time when the holders of Class F Shares
are entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any Class A Shares,
Class B Shares, Class C Shares, Class D Shares, Class E
Shares, Class G Shares, Class H Shares, Class I Shares, Class
J Shares, Class K Shares or Noncumulative Shares are entitled
to elect directors pursuant hereto by reason of any default in
the payment of dividends thereon, then the voting rights of
the Cumulative Shares and the Noncumulative Shares then
entitled to vote shall be combined (with each class of shares
having a number of votes proportional to the aggregate
liquidation preference of its outstanding shares). In such
case, the holders of Class F Shares and of all such other
shares then entitled so to vote, voting as a class, shall
elect such directors. If the holders of any such other shares
have elected such directors prior to the happening of the
default or event permitting the holders of Class F Shares to
elect directors, or prior to a written request for the holding
of a special meeting being received by the Secretary of the
Corporation as required above, then a new election shall be
held with all such other shares and the Class F Shares voting
together as a single class for such directors, resulting in
the termination of the term of such previously elected
directors upon the election of such new directors.
(d) The affirmative vote of the holders of at least
two-thirds of the Class F Shares at the time outstanding,
voting separately as a class, given in person or by proxy
either in writing or at a meeting called for the purpose,
shall be necessary to effect either of the following:
(1) Any amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of any
of the provisions of the Amended and Restated
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<PAGE> 117
Articles of Incorporation, as amended, or of the Code
of Regulations of the Corporation which affects
adversely and materially the preferences or voting or
other rights of the holders of Class F Shares which
are set forth in these Amended and Restated Articles
of Incorporation, as amended; provided, however,
neither the amendment of these Amended and Restated
Articles of Incorporation, as amended, so as to
authorize, create or change the authorized or
outstanding number of Class F Shares or of any shares
ranking on a parity with or junior to the Class F
Shares nor the amendment of the provisions of the
Code of Regulations so as to change the number or
classification of directors of the Corporation shall
be deemed to affect adversely and materially
preferences or voting or other rights of the holders
of Class F Shares; or
(2) The authorization, creation or increase
in the authorized number of any shares, or any
security convertible into shares, in either case
ranking prior to such series of Class F Shares.
(e) In the event, and only to the extent, that (1)
Class F Shares are issued in more than one series and (2) Ohio
law permits the holders of a series of a class of capital
stock to vote separately as a class, the affirmative vote of
the holders of at least two-thirds of each series of Class F
Shares at the time outstanding, voting separately as a class,
given in person or by proxy either in writing or at a meeting
called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of these Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of such series which are
set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class F Shares
or of any shares ranking on a parity with or junior to the
Class F Shares nor the Amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially the preferences or voting or other
rights of the holders of such series.
VII. The Class G Cumulative Preferred Shares. The Class G Shares shall
have the following express terms:
Section 1. Series. The Class G Shares may be issued from time
to time in one or more series. All Class G Shares shall be of equal
rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Class G Shares shall rank on a parity with the Class A
Shares, the Class B Shares, the Class C Shares, the Class D Shares,
Class E Shares, Class F Shares, Class H Shares, Class I Shares, Class J
Shares, Class K Shares and the Noncumulative Shares and shall be
identical to all Class A Shares, Class B Shares, Class C Shares, Class
D Shares, Class E Shares, Class F Shares, Class H Shares, Class I
Shares, Class J Shares, Class K Shares and Noncumulative Shares except
(1) in respect of the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on Cumulative Shares shall be
cumulative as set forth herein. Subject to the provisions of Sections 2
through 5, both inclusive, and Item XIII of this Division, which
provisions shall apply to all Class G Shares, the Board of Directors
hereby is authorized to cause such shares to be
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issued in one or more series and, with respect to each such series to
determine and fix prior to the issuance thereof (and thereafter, to the
extent provided in clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item VII) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class G Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class G Shares, shall be
entitled to receive out of any funds legally available
therefor, and when and as declared by the Board of Directors,
dividends in cash at the rate or rates for such series fixed
in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such
dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be
paid upon or declared or set apart for any series of the Class
G Shares for any dividend period unless at the same time (i) a
like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in
proportion
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to the respective annual dividend rates fixed therefor, shall
have been paid upon or declared or set apart for all Class G
Shares of all series then issued and outstanding and entitled
to receive such dividend and (ii) the dividends payable for
the dividend periods terminating on the same or any earlier
date (but, with respect to Noncumulative Shares, only with
respect to the then current dividend period), ratably in
proportion to the respective dividend rates fixed therefor,
shall have been paid upon or declared or set apart for all
Class A Shares, Class B Shares, Class C Shares, Class D
Shares, Class E Shares, Class F Shares, Class H Shares, Class
I Shares, Class J Shares, Class K Shares and Noncumulative
Shares then issued and outstanding and entitled to receive
such dividends.
(b) So long as any Class G Shares shall be
outstanding no dividend, except a dividend payable in Common
Shares or other shares ranking junior to the Class G Shares,
shall be paid or declared or any distribution be made, except
as aforesaid, in respect of the Common Shares or any other
shares ranking junior to the Class G Shares, nor shall any
Common Shares or any other shares ranking junior to the Class
G Shares be purchased, retired or otherwise acquired by the
Corporation, except out of the proceeds of the sale of Common
Shares or other shares of the Corporation ranking junior to
the Class G Shares received by the Corporation subsequent to
the date of first issuance of Class G Shares of any series,
unless:
(1) All accrued and unpaid dividends on
Cumulative Shares, including the full dividends for
all current dividend periods, shall have been
declared and paid or a sum sufficient for payment
thereof set apart;
(2) All unpaid dividends on Noncumulative
Shares for the then current dividend period shall
have been declared and paid or a sum sufficient for
payment therefor set apart; and
(3) There shall be no arrearages with
respect to the redemption of Cumulative Shares or
Noncumulative Shares of any series from any sinking
fund provided for shares of such series in accordance
with the provisions of Section 1 of this Item VII.
(c) The foregoing restrictions on the payment of
dividends or other distributions on, or on the purchase,
redemption retirement or other acquisition of, Common Shares
or any other shares ranking on a parity with or junior to the
Class G Shares shall be inapplicable to (i) any payments in
lieu of issuance of fractional shares thereof, whether upon
any merger, conversion, stock dividend or otherwise, (ii) the
conversion of Cumulative Shares or Noncumulative Shares into
Common Shares, or (iii) the exercise by the Corporation of its
rights pursuant to Item XIV(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital
stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects
to designate as "capital gain dividends" (as defined in
Section 857 of the Code), any portion (the "Capital Gains
Amount") of the dividends paid or made available for the year
to holders of all classes of stock (the "Total Dividends"),
then, to the extent permissible under the Code and to the
extent it does not cause any dividends to fail to qualify for
the dividends paid deduction under Section 561 of the Code,
the portion of the Capital Gains Amount that shall be
allocable to holders of the Class G Shares shall be the amount
that the total dividends
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<PAGE> 120
paid or made available to the holders of the Class G Shares
for the year bears to the Total Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of
the Board of Directors, redeem all or any part of any
redeemable series of Class G Shares at the time
outstanding at the applicable redemption price for
such series fixed in accordance with the provisions
of Section 1 of this Item VII; and
(2) Shall, from time to time, make such
redemptions of each series of Class G Shares as may
be required to fulfill the requirements of any
sinking fund provided for shares of such series at
the applicable sinking fund redemption price fixed in
accordance with the provisions of Section 1 of this
Item VII; and shall in each case pay all accrued and
unpaid dividends to the redemption date.
(b) (1) Notice of every such redemption shall be
mailed, postage prepaid, to the holders of record of the Class
G Shares to be redeemed at their respective addresses then
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Item VII prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
Corporation may deposit the aggregate redemption price of
Class G Shares to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, with any bank
or trust company in Cleveland, Ohio, or New York, New York,
having capital and surplus of not less than $100,000,000,
named in such notice and direct that there be paid to the
respective holders of the Class G Shares so to be redeemed
amounts equal to the redemption price of the Class G Shares so
to be redeemed, together with such accrued and unpaid
dividends thereon, on surrender of the share certificate or
certificates held by such holders; and upon the deposit of
such notice in the mail and the making of such deposit of
money with such bank or trust company, such holders shall
cease to be shareholders with respect to such shares; and from
and after the time such notice shall have been so deposited
and such deposit of money shall have been so made, such
holders shall have no rights or claim against the Corporation
with respect to such shares, except only the right to receive
such money from such bank or trust company without interest or
to exercise before the redemption date any unexpired
privileges of conversion. In the event less than all of the
outstanding Class G Shares are to be redeemed, the Corporation
shall select by lot the shares so to be redeemed in such
manner as shall be prescribed by the Board of Directors.
(2) If the holders of Class G Shares which have
been called for redemption shall not within six years
after such deposit claim the amount deposited for the
redemption thereof, any such bank or trust company
shall, upon demand, pay over to the Corporation such
unclaimed amounts and thereupon such bank or trust
company and the Corporation shall be relieved of all
responsibility in respect thereof and to such
holders.
(c) Any Class G Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking
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fund requirements provided for shares of such series, (3)
converted in accordance with the express terms thereof, or (4)
otherwise acquired by the Corporation, shall resume the status
of authorized but unissued Class G Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item XIV of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital stock hereafter created or
authorized, the Corporation may not purchase or redeem (for
sinking fund purposes or otherwise) less than all of the Class
G Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Class G
Shares, unless all dividends on all Class G Shares then
outstanding for all previous and current dividend periods
shall have been declared and paid or funds therefor set apart
and all accrued sinking fund obligations applicable thereto
shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class G Shares of any series shall
be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be
paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Class G Shares, the
amounts fixed with respect to shares of such series in
accordance with Section 1 of this Item VII, plus an amount
equal to all dividends accrued and unpaid thereon to the date
of payment of the amount due pursuant to such liquidation,
dissolution or winding up of the affairs of the Corporation.
In the event the net assets of the Corporation legally
available therefor are insufficient to permit the payment upon
all outstanding Cumulative Shares and Noncumulative Shares of
the full preferential amount to which they are respectively
entitled, then such net assets shall be distributed ratably
upon all outstanding Cumulative Shares and Noncumulative
Shares in proportion to the full preferential amount to which
each such share is entitled.
(2) After payment to the holders of Class G
Shares of the full preferential amounts as aforesaid,
the holders of Class G Shares, as such, shall have no
right or claim to any of the remaining assets of the
Corporation.
(b) The merger or consolidation of the Corporation
into or with any other Corporation, the merger of any other
Corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Class G Shares shall have no
voting rights, except as provided in this Section or required
by law.
(b) (1) If, and so often as, the Corporation shall be
in default in the payment of dividends on any series of Class
G Shares at the time outstanding, whether or not earned or
declared, for a number of dividend payment periods, whether
consecutive or not, which in the aggregate contain at least
540 days, all holders of such Class G Shares, voting
separately as a class, together with all Class A Shares, Class
B Shares, Class C
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Shares, Class D Shares, Class E Shares, Class F Shares, Class
H Shares, Class I Shares, Class J Shares, Class K Shares and
Noncumulative Shares upon which like voting rights have been
conferred and are exercisable under the circumstances
described in Subsection 5(c), shall be entitled to elect, as
herein provided, a total of two members of the Board of
Directors of the Corporation; provided, however, that the
holders of such Class G Shares shall not exercise such special
class voting rights except at meetings of such shareholders
for the election of directors at which the holders of not less
than 50% of such Class G Shares are present in person or by
proxy; and provided further, that the special class voting
rights provided for in this paragraph when the same shall have
become vested shall remain so vested until all accrued and
unpaid dividends on such Class G Shares then outstanding shall
have been paid or declared and a sum sufficient for the
payment thereof set aside for payment, whereupon the holders
of such Class G Shares shall be divested of their special
class voting rights in respect of subsequent elections of
directors, subject to the revesting of such special class
voting rights in the event above specified in this paragraph.
All dividend payments made on the Class G Shares, at any time
during which the Corporation is in default in the payment of
dividends on such Class G Shares for any dividend period,
shall be deemed to be made in respect of the earliest dividend
period with respect to which the Corporation is in default.
(2) In the event of default entitling holders of
Class G Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting
of such holders for the purpose of electing such
directors shall be called by the Secretary of the
Corporation upon written request of, or may be called
by, the holders of record of at least 10% of the
Class G Shares upon which such default in the payment
of dividends exists and notice thereof shall be given
in the same manner as that required for the annual
meeting of shareholders; provided, however, that the
Corporation shall not be required to call such
special meeting if the annual meeting of shareholders
shall be called to be held within 90 days after the
date of receipt of the foregoing written request from
the holders of Class G Shares. At any meeting at
which such holders of Class G Shares shall be
entitled to elect directors, holders of 50% of such
Class G Shares, present in person or by proxy, shall
be sufficient to constitute a quorum, and the vote of
the holders of a majority of such shares so present
at any such meeting at which there shall be such a
quorum shall be sufficient to elect the members of
the Board of Directors which such holders of Class G
Shares are entitled to elect as herein provided.
Notwithstanding any provision of these Amended and
Restated Articles of Incorporation, as amended, or
the Code of Regulations of the Corporation or any
action taken by the holders of any class of shares
fixing the number of directors of the Corporation,
the two directors who may be elected by such holders
of Class G Shares pursuant to this Subsection shall
serve in addition to any other directors then in
office or proposed to be elected otherwise than
pursuant to this Subsection. Nothing in this
Subsection shall prevent any change otherwise
permitted in the total number of or classifications
of directors of the Corporation or require the
resignation of any director elected otherwise than
pursuant to this Subsection. Notwithstanding any
classification of the other directors of the
Corporation, the two directors elected by such
holders of Class G Shares shall be elected annually
for terms expiring at the next succeeding annual
meeting of shareholders.
(3) Upon any divesting of the special class
voting rights of the holders of the Class G Shares in
respect of elections of directors as provided in this
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<PAGE> 123
Subsection, the terms of office of all directors then
in office elected by such holders shall terminate
immediately thereupon. If the office of any director
elected by such holders voting as a class becomes
vacant by reason of death, resignation, removal from
office or otherwise, the remaining director elected
by such holders voting as a class may elect a
successor who shall hold office for the unexpired
term in respect of which such vacancy occurred.
(c) If at any time when the holders of Class G Shares
are entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any Class A Shares,
Class B Shares, Class C Shares, Class D Shares, Class E
Shares, Class F Shares, Class H Shares, Class I Shares, Class
J Shares, Class K Shares or Noncumulative Shares are entitled
to elect directors pursuant hereto by reason of any default in
the payment of dividends thereon, then the voting rights of
the Cumulative Shares and the Noncumulative Shares then
entitled to vote shall be combined (with each class of shares
having a number of votes proportional to the aggregate
liquidation preference of its outstanding shares). In such
case, the holders of Class G Shares and of all such other
shares then entitled so to vote, voting as a class, shall
elect such directors. If the holders of any such other shares
have elected such directors prior to the happening of the
default or event permitting the holders of Class G Shares to
elect directors, or prior to a written request for the holding
of a special meeting being received by the Secretary of the
Corporation as required above, then a new election shall be
held with all such other shares and the Class G Shares voting
together as a single class for such directors, resulting in
the termination of the term of such previously elected
directors upon the election of such new directors.
(d) The affirmative vote of the holders of at least
two-thirds of the Class G Shares at the time outstanding,
voting separately as a class, given in person or by proxy
either in writing or at a meeting called for the purpose,
shall be necessary to effect either of the following:
(1) Any amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of any
of the provisions of the Amended and Restated
Articles of Incorporation, as amended, or of the Code
of Regulations of the Corporation which affects
adversely and materially the preferences or voting or
other rights of the holders of Class G Shares which
are set forth in these Amended and Restated Articles
of Incorporation, as amended; provided, however,
neither the amendment of these Amended and Restated
Articles of Incorporation, as amended, so as to
authorize, create or change the authorized or
outstanding number of Class G Shares or of any shares
ranking on a parity with or junior to the Class G
Shares nor the amendment of the provisions of the
Code of Regulations so as to change the number or
classification of directors of the Corporation shall
be deemed to affect adversely and materially
preferences or voting or other rights of the holders
of Class G Shares; or
(2) The authorization, creation or increase
in the authorized number of any shares, or any
security convertible into shares, in either case
ranking prior to such series of Class G Shares.
(e) In the event, and only to the extent, that (1)
Class G Shares are issued in more than one series and (2) Ohio
law permits the holders of a series of a class of capital
stock to vote separately as a class, the affirmative vote of
the holders of at least
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two-thirds of each series of Class G Shares at the time
outstanding, voting separately as a class, given in person or
by proxy either in writing or at a meeting called for the
purpose of voting on such matters, shall be required for any
amendment, alteration or repeal, whether by merger,
consolidation or otherwise, of any of the provisions of these
Amended and Restated Articles of Incorporation, as amended, or
of the Code of Regulations of the Corporation which affects
adversely and materially the preferences or voting or other
rights of the holders of such series which are set forth in
these Amended and Restated Articles of Incorporation, as
amended; provided, however, neither the amendment of these
Amended and Restated Articles of Incorporation, as amended, so
as to authorize, create or change the authorized or
outstanding number of Class G Shares or of any shares ranking
on a parity with or junior to the Class G Shares nor the
Amendment of the provisions of the Code of Regulations so as
to change the number or classification of directors of the
Corporation shall be deemed to affect adversely and materially
the preferences or voting or other rights of the holders of
such series.
VIII. The Class H Cumulative Preferred Shares. The Class H Shares shall
have the following express terms:
Section 1. Series. The Class H Shares may be issued from time
to time in one or more series. All Class H Shares shall be of equal
rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Class H Shares shall rank on a parity with the Class A
Shares, the Class B Shares, the Class C Shares, the Class D Shares,
Class E Shares, Class F Shares, Class G Shares, Class I Shares, Class J
Shares, Class K Shares and the Noncumulative Shares and shall be
identical to all Class A Shares, Class B Shares, Class C Shares, Class
D Shares, Class E Shares, Class F Shares, Class G Shares, Class I
Shares, Class J Shares, Class K Shares and Noncumulative Shares except
(1) in respect of the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on Cumulative Shares shall be
cumulative as set forth herein. Subject to the provisions of Sections 2
through 5, both inclusive, and Item XIII of this Division, which
provisions shall apply to all Class H Shares, the Board of Directors
hereby is authorized to cause such shares to be issued in one or more
series and, with respect to each such series to determine and fix prior
to the issuance thereof (and thereafter, to the extent provided in
clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
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(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item VIII) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class H Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class H Shares, shall be
entitled to receive out of any funds legally available
therefor, and when and as declared by the Board of Directors,
dividends in cash at the rate or rates for such series fixed
in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such
dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be
paid upon or declared or set apart for any series of the Class
H Shares for any dividend period unless at the same time (i) a
like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in
proportion to the respective annual dividend rates fixed
therefor, shall have been paid upon or declared or set apart
for all Class H Shares of all series then issued and
outstanding and entitled to receive such dividend and (ii) the
dividends payable for the dividend periods terminating on the
same or any earlier date (but, with respect to Noncumulative
Shares, only with respect to the then current dividend
period), ratably in proportion to the respective dividend
rates fixed therefor, shall have been paid upon or declared or
set apart for all Class A Shares, Class B Shares, Class C
Shares, Class D Shares, Class E Shares, Class F Shares, Class
G Shares, Class I Shares, Class J Shares, Class K Shares and
Noncumulative Shares then issued and outstanding and entitled
to receive such dividends.
(b) So long as any Class H Shares shall be
outstanding no dividend, except a dividend payable in Common
Shares or other shares ranking junior to the Class H Shares,
shall be paid or declared or any distribution be made, except
as aforesaid, in respect of the Common Shares or any other
shares ranking junior to the Class H Shares, nor shall any
Common Shares or any other shares ranking junior to the Class
H Shares be purchased, retired or otherwise acquired by the
Corporation, except out of the proceeds of the sale of Common
Shares or other shares of the Corporation ranking junior to
the Class H Shares received by the Corporation subsequent to
the date of first issuance of Class H Shares of any series,
unless:
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(1) All accrued and unpaid dividends on
Cumulative Shares, including the full dividends for
all current dividend periods, shall have been
declared and paid or a sum sufficient for payment
thereof set apart;
(2) All unpaid dividends on Noncumulative
Shares for the then current dividend period shall
have been declared and paid or a sum sufficient for
payment therefor set apart; and
(3) There shall be no arrearages with
respect to the redemption of Cumulative Shares or
Noncumulative Shares of any series from any sinking
fund provided for shares of such series in accordance
with the provisions of Section 1 of this Item VIII.
(c) The foregoing restrictions on the payment of
dividends or other distributions on, or on the purchase,
redemption retirement or other acquisition of, Common Shares
or any other shares ranking on a parity with or junior to the
Class H Shares shall be inapplicable to (i) any payments in
lieu of issuance of fractional shares thereof, whether upon
any merger, conversion, stock dividend or otherwise, (ii) the
conversion of Cumulative Shares or Noncumulative Shares into
Common Shares, or (iii) the exercise by the Corporation of its
rights pursuant to Item XIV(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital
stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects
to designate as "capital gain dividends" (as defined in
Section 857 of the Code), any portion (the "Capital Gains
Amount") of the dividends paid or made available for the year
to holders of all classes of stock (the "Total Dividends"),
then, to the extent permissible under the Code and to the
extent it does not cause any dividends to fail to qualify for
the dividends paid deduction under Section 561 of the Code,
the portion of the Capital Gains Amount that shall be
allocable to holders of the Class H Shares shall be the amount
that the total dividends paid or made available to the holders
of the Class H Shares for the year bears to the Total
Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of
the Board of Directors, redeem all or any part of any
redeemable series of Class H Shares at the time
outstanding at the applicable redemption price for
such series fixed in accordance with the provisions
of Section 1 of this Item VIII; and
(2) Shall, from time to time, make such
redemptions of each series of Class H Shares as may
be required to fulfill the requirements of any
sinking fund provided for shares of such series at
the applicable sinking fund redemption price fixed in
accordance with the provisions of Section 1 of this
Item VIII; and shall in each case pay all accrued and
unpaid dividends to the redemption date.
(b) (1) Notice of every such redemption shall be
mailed, postage prepaid, to the holders of record of the Class
H Shares to be redeemed at their respective addresses then
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<PAGE> 127
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Item VIII prior to the issuance thereof. At any time
after notice as provided above has been deposited in the mail,
the Corporation may deposit the aggregate redemption price of
Class H Shares to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, with any bank
or trust company in Cleveland, Ohio, or New York, New York,
having capital and surplus of not less than $100,000,000,
named in such notice and direct that there be paid to the
respective holders of the Class H Shares so to be redeemed
amounts equal to the redemption price of the Class H Shares so
to be redeemed, together with such accrued and unpaid
dividends thereon, on surrender of the share certificate or
certificates held by such holders; and upon the deposit of
such notice in the mail and the making of such deposit of
money with such bank or trust company, such holders shall
cease to be shareholders with respect to such shares; and from
and after the time such notice shall have been so deposited
and such deposit of money shall have been so made, such
holders shall have no rights or claim against the Corporation
with respect to such shares, except only the right to receive
such money from such bank or trust company without interest or
to exercise before the redemption date any unexpired
privileges of conversion. In the event less than all of the
outstanding Class H Shares are to be redeemed, the Corporation
shall select by lot the shares so to be redeemed in such
manner as shall be prescribed by the Board of Directors.
(2) If the holders of Class H Shares which have
been called for redemption shall not within six years
after such deposit claim the amount deposited for the
redemption thereof, any such bank or trust company
shall, upon demand, pay over to the Corporation such
unclaimed amounts and thereupon such bank or trust
company and the Corporation shall be relieved of all
responsibility in respect thereof and to such
holders.
(c) Any Class H Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series, (3) converted
in accordance with the express terms thereof, or (4) otherwise
acquired by the Corporation, shall resume the status of
authorized but unissued Class H Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item XIV of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital stock hereafter created or
authorized, the Corporation may not purchase or redeem (for
sinking fund purposes or otherwise) less than all of the Class
H Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Class H
Shares, unless all dividends on all Class H Shares then
outstanding for all previous and current dividend periods
shall have been declared and paid or funds therefor set apart
and all accrued sinking fund obligations applicable thereto
shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class H Shares of any series shall
be entitled to receive in full out of the assets of the
Corporation, including its
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capital, before any amount shall be paid or distributed among
the holders of the Common Shares or any other shares ranking
junior to the Class H Shares, the amounts fixed with respect
to shares of such series in accordance with Section 1 of this
Item VIII, plus an amount equal to all dividends accrued and
unpaid thereon to the date of payment of the amount due
pursuant to such liquidation, dissolution or winding up of the
affairs of the Corporation. In the event the net assets of the
Corporation legally available therefor are insufficient to
permit the payment upon all outstanding Cumulative Shares and
Noncumulative Shares of the full preferential amount to which
they are respectively entitled, then such net assets shall be
distributed ratably upon all outstanding Cumulative Shares and
Noncumulative Shares in proportion to the full preferential
amount to which each such share is entitled.
(2) After payment to the holders of Class H
Shares of the full preferential amounts as aforesaid,
the holders of Class H Shares, as such, shall have no
right or claim to any of the remaining assets of the
Corporation.
(b) The merger or consolidation of the Corporation
into or with any other Corporation, the merger of any other
Corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Class H Shares shall have no
voting rights, except as provided in this Section or required
by law.
(b) (1) If, and so often as, the Corporation shall be
in default in the payment of dividends on any series of Class
H Shares at the time outstanding, whether or not earned or
declared, for a number of dividend payment periods, whether
consecutive or not, which in the aggregate contain at least
540 days, all holders of such Class H Shares, voting
separately as a class, together with all Class A Shares, Class
B Shares, Class C Shares, Class D Shares, Class E Shares,
Class F Shares, Class G Shares, Class I Shares, Class J
Shares, Class K Shares and Noncumulative Shares upon which
like voting rights have been conferred and are exercisable
under the circumstances described in Subsection 5(c), shall be
entitled to elect, as herein provided, a total of two members
of the Board of Directors of the Corporation; provided,
however, that the holders of such Class H Shares shall not
exercise such special class voting rights except at meetings
of such shareholders for the election of directors at which
the holders of not less than 50% of such Class H Shares are
present in person or by proxy; and provided further, that the
special class voting rights provided for in this paragraph
when the same shall have become vested shall remain so vested
until all accrued and unpaid dividends on such Class H Shares
then outstanding shall have been paid or declared and a sum
sufficient for the payment thereof set aside for payment,
whereupon the holders of such Class H Shares shall be divested
of their special class voting rights in respect of subsequent
elections of directors, subject to the revesting of such
special class voting rights in the event above specified in
this paragraph. All dividend payments made on the Class H
Shares, at any time during which the Corporation is in default
in the payment of dividends on such Class H Shares for any
dividend period, shall be deemed to be made in respect of the
earliest dividend period with respect to which the Corporation
is in default.
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(2) In the event of default entitling
holders of Class H Shares to elect two directors as
specified in paragraph (1) of this Subsection, a
special meeting of such holders for the purpose of
electing such directors shall be called by the
Secretary of the Corporation upon written request of,
or may be called by, the holders of record of at
least 10% of the Class H Shares upon which such
default in the payment of dividends exists and notice
thereof shall be given in the same manner as that
required for the annual meeting of shareholders;
provided, however, that the Corporation shall not be
required to call such special meeting if the annual
meeting of shareholders shall be called to be held
within 90 days after the date of receipt of the
foregoing written request from the holders of Class H
Shares. At any meeting at which such holders of Class
H Shares shall be entitled to elect directors,
holders of 50% of such Class H Shares, present in
person or by proxy, shall be sufficient to constitute
a quorum, and the vote of the holders of a majority
of such shares so present at any such meeting at
which there shall be such a quorum shall be
sufficient to elect the members of the Board of
Directors which such holders of Class H Shares are
entitled to elect as herein provided. Notwithstanding
any provision of these Amended and Restated Articles
of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by
the holders of any class of shares fixing the number
of directors of the Corporation, the two directors
who may be elected by such holders of Class H Shares
pursuant to this Subsection shall serve in addition
to any other directors then in office or proposed to
be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent
any change otherwise permitted in the total number of
or classifications of directors of the Corporation or
require the resignation of any director elected
otherwise than pursuant to this Subsection.
Notwithstanding any classification of the other
directors of the Corporation, the two directors
elected by such holders of Class H Shares shall be
elected annually for terms expiring at the next
succeeding annual meeting of shareholders.
(3) Upon any divesting of the special class
voting rights of the holders of the Class H Shares in
respect of elections of directors as provided in this
Subsection, the terms of office of all directors then
in office elected by such holders shall terminate
immediately thereupon. If the office of any director
elected by such holders voting as a class becomes
vacant by reason of death, resignation, removal from
office or otherwise, the remaining director elected
by such holders voting as a class may elect a
successor who shall hold office for the unexpired
term in respect of which such vacancy occurred.
(c) If at any time when the holders of Class H Shares
are entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any Class A Shares,
Class B Shares, Class C Shares, Class D Shares, Class E
Shares, Class F Shares, Class G Shares, Class I Shares, Class
J Shares, Class K Shares or Noncumulative Shares are entitled
to elect directors pursuant hereto by reason of any default in
the payment of dividends thereon, then the voting rights of
the Cumulative Shares and the Noncumulative Shares then
entitled to vote shall be combined (with each class of shares
having a number of votes proportional to the aggregate
liquidation preference of its outstanding shares). In such
case, the holders of Class H Shares and of all such other
shares then entitled so to vote, voting as a class, shall
elect such directors. If the holders of any such other shares
have elected such directors prior to the happening of the
default or event permitting the holders of Class H Shares to
elect directors, or prior to a written
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request for the holding of a special meeting being received by
the Secretary of the Corporation as required above, then a new
election shall be held with all such other shares and the
Class H Shares voting together as a single class for such
directors, resulting in the termination of the term of such
previously elected directors upon the election of such new
directors.
(d) The affirmative vote of the holders of at least
two-thirds of the Class H Shares at the time outstanding,
voting separately as a class, given in person or by proxy
either in writing or at a meeting called for the purpose,
shall be necessary to effect either of the following:
(1) Any amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of any
of the provisions of the Amended and Restated
Articles of Incorporation, as amended, or of the Code
of Regulations of the Corporation which affects
adversely and materially the preferences or voting or
other rights of the holders of Class H Shares which
are set forth in these Amended and Restated Articles
of Incorporation, as amended; provided, however,
neither the amendment of these Amended and Restated
Articles of Incorporation, as amended, so as to
authorize, create or change the authorized or
outstanding number of Class H Shares or of any shares
ranking on a parity with or junior to the Class H
Shares nor the amendment of the provisions of the
Code of Regulations so as to change the number or
classification of directors of the Corporation shall
be deemed to affect adversely and materially
preferences or voting or other rights of the holders
of Class H Shares; or
(2) The authorization, creation or increase
in the authorized number of any shares, or any
security convertible into shares, in either case
ranking prior to such series of Class H Shares.
(e) In the event, and only to the extent, that (1)
Class H Shares are issued in more than one series and (2) Ohio
law permits the holders of a series of a class of capital
stock to vote separately as a class, the affirmative vote of
the holders of at least two-thirds of each series of Class H
Shares at the time outstanding, voting separately as a class,
given in person or by proxy either in writing or at a meeting
called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of these Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of such series which are
set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class H Shares
or of any shares ranking on a parity with or junior to the
Class H Shares nor the Amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially the preferences or voting or other
rights of the holders of such series.
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IX. The Class I Cumulative Preferred Shares. The Class I Shares shall
have the following express terms:
Section 1. Series. The Class I Shares may be issued from time
to time in one or more series. All Class I Shares shall be of equal
rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Class I Shares shall rank on a parity with the Class A
Shares, the Class B Shares, the Class C Shares, the Class D Shares,
Class E Shares, Class F Shares, Class G Shares, Class H Shares, Class J
Shares, Class K Shares and the Noncumulative Shares and shall be
identical to all Class A Shares, Class B Shares, Class C Shares, Class
D Shares, Class E Shares, Class F Shares, Class G Shares, Class H
Shares, Class J Shares, Class K Shares and Noncumulative Shares except
(1) in respect of the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on Cumulative Shares shall be
cumulative as set forth herein. Subject to the provisions of Sections 2
through 5, both inclusive, and Item XIII of this Division, which
provisions shall apply to all Class I Shares, the Board of Directors
hereby is authorized to cause such shares to be issued in one or more
series and, with respect to each such series to determine and fix prior
to the issuance thereof (and thereafter, to the extent provided in
clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item IX) on the issuance of
shares of the same series or of any other class or series.
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<PAGE> 132
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class I Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class I Shares, shall be
entitled to receive out of any funds legally available
therefor, and when and as declared by the Board of Directors,
dividends in cash at the rate or rates for such series fixed
in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such
dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be
paid upon or declared or set apart for any series of the Class
I Shares for any dividend period unless at the same time (i) a
like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in
proportion to the respective annual dividend rates fixed
therefor, shall have been paid upon or declared or set apart
for all Class I Shares of all series then issued and
outstanding and entitled to receive such dividend and (ii) the
dividends payable for the dividend periods terminating on the
same or any earlier date (but, with respect to Noncumulative
Shares, only with respect to the then current dividend
period), ratably in proportion to the respective dividend
rates fixed therefor, shall have been paid upon or declared or
set apart for all Class A Shares, Class B Shares, Class C
Shares, Class D Shares, Class E Shares, Class F Shares, Class
G Shares, Class H Shares, Class J Shares, Class K Shares and
Noncumulative Shares then issued and outstanding and entitled
to receive such dividends.
(b) So long as any Class I Shares shall be
outstanding no dividend, except a dividend payable in Common
Shares or other shares ranking junior to the Class I Shares,
shall be paid or declared or any distribution be made, except
as aforesaid, in respect of the Common Shares or any other
shares ranking junior to the Class I Shares, nor shall any
Common Shares or any other shares ranking junior to the Class
I Shares be purchased, retired or otherwise acquired by the
Corporation, except out of the proceeds of the sale of Common
Shares or other shares of the Corporation ranking junior to
the Class I Shares received by the Corporation subsequent to
the date of first issuance of Class I Shares of any series,
unless:
(1) All accrued and unpaid dividends on
Cumulative Shares, including the full dividends for
all current dividend periods, shall have been
declared and paid or a sum sufficient for payment
thereof set apart;
(2) All unpaid dividends on Noncumulative
Shares for the then current dividend period shall
have been declared and paid or a sum sufficient for
payment therefor set apart; and
(3) There shall be no arrearages with
respect to the redemption of Cumulative Shares or
Noncumulative Shares of any series from any sinking
fund provided for shares of such series in accordance
with the provisions of Section 1 of this Item IX.
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(c) The foregoing restrictions on the payment of
dividends or other distributions on, or on the purchase,
redemption retirement or other acquisition of, Common Shares
or any other shares ranking on a parity with or junior to the
Class I Shares shall be inapplicable to (i) any payments in
lieu of issuance of fractional shares thereof, whether upon
any merger, conversion, stock dividend or otherwise, (ii) the
conversion of Cumulative Shares or Noncumulative Shares into
Common Shares, or (iii) the exercise by the Corporation of its
rights pursuant to Item XIV(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital
stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects
to designate as "capital gain dividends" (as defined in
Section 857 of the Code), any portion (the "Capital Gains
Amount") of the dividends paid or made available for the year
to holders of all classes of stock (the "Total Dividends"),
then, to the extent permissible under the Code and to the
extent it does not cause any dividends to fail to qualify for
the dividends paid deduction under Section 561 of the Code,
the portion of the Capital Gains Amount that shall be
allocable to holders of the Class I Shares shall be the amount
that the total dividends paid or made available to the holders
of the Class I Shares for the year bears to the Total
Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of
the Board of Directors, redeem all or any part of any
redeemable series of Class I Shares at the time
outstanding at the applicable redemption price for
such series fixed in accordance with the provisions
of Section 1 of this Item IX; and
(2) Shall, from time to time, make such
redemptions of each series of Class I Shares as may
be required to fulfill the requirements of any
sinking fund provided for shares of such series at
the applicable sinking fund redemption price fixed in
accordance with the provisions of Section 1 of this
Item IX; and shall in each case pay all accrued and
unpaid dividends to the redemption date.
(b) (1) Notice of every such redemption shall be
mailed, postage prepaid, to the holders of record of the Class
I Shares to be redeemed at their respective addresses then
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Item IX prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
Corporation may deposit the aggregate redemption price of
Class I Shares to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, with any bank
or trust company in Cleveland, Ohio, or New York, New York,
having capital and surplus of not less than $100,000,000,
named in such notice and direct that there be paid to the
respective holders of the Class I Shares so to be redeemed
amounts equal to the redemption price of the Class I Shares so
to be redeemed, together with such accrued and unpaid
dividends thereon, on surrender of the share certificate or
certificates held by such holders; and upon the deposit of
such notice in the mail and the making of such deposit of
money with such bank or trust company, such holders shall
cease to be
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shareholders with respect to such shares; and from and after
the time such notice shall have been so deposited and such
deposit of money shall have been so made, such holders shall
have no rights or claim against the Corporation with respect
to such shares, except only the right to receive such money
from such bank or trust company without interest or to
exercise before the redemption date any unexpired privileges
of conversion. In the event less than all of the outstanding
Class I Shares are to be redeemed, the Corporation shall
select by lot the shares so to be redeemed in such manner as
shall be prescribed by the Board of Directors.
(2) If the holders of Class I Shares which
have been called for redemption shall not within six
years after such deposit claim the amount deposited
for the redemption thereof, any such bank or trust
company shall, upon demand, pay over to the
Corporation such unclaimed amounts and thereupon such
bank or trust company and the Corporation shall be
relieved of all responsibility in respect thereof and
to such holders.
(c) Any Class I Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series, (3) converted
in accordance with the express terms thereof, or (4) otherwise
acquired by the Corporation, shall resume the status of
authorized but unissued Class I Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item XIV of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital stock hereafter created or
authorized, the Corporation may not purchase or redeem (for
sinking fund purposes or otherwise) less than all of the Class
I Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Class I
Shares, unless all dividends on all Class I Shares then
outstanding for all previous and current dividend periods
shall have been declared and paid or funds therefor set apart
and all accrued sinking fund obligations applicable thereto
shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class I Shares of any series shall
be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be
paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Class I Shares, the
amounts fixed with respect to shares of such series in
accordance with Section 1 of this Item IX, plus an amount
equal to all dividends accrued and unpaid thereon to the date
of payment of the amount due pursuant to such liquidation,
dissolution or winding up of the affairs of the Corporation.
In the event the net assets of the Corporation legally
available therefor are insufficient to permit the payment upon
all outstanding Cumulative Shares and Noncumulative Shares of
the full preferential amount to which they are respectively
entitled, then such net assets shall be distributed ratably
upon all outstanding Cumulative Shares and Noncumulative
Shares in proportion to the full preferential amount to which
each such share is entitled.
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(2) After payment to the holders of Class I
Shares of the full preferential amounts as aforesaid,
the holders of Class I Shares, as such, shall have no
right or claim to any of the remaining assets of the
Corporation.
(b) The merger or consolidation of the Corporation
into or with any other Corporation, the merger of any other
Corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Class I Shares shall have no
voting rights, except as provided in this Section or required
by law.
(b) (1) If, and so often as, the Corporation shall be
in default in the payment of dividends on any series of Class
I Shares at the time outstanding, whether or not earned or
declared, for a number of dividend payment periods, whether
consecutive or not, which in the aggregate contain at least
540 days, all holders of such Class I Shares, voting
separately as a class, together with all Class A Shares, Class
B Shares, Class C Shares, Class D Shares, Class E Shares,
Class F Shares, Class G Shares, Class H Shares, Class J
Shares, Class K Shares and Noncumulative Shares upon which
like voting rights have been conferred and are exercisable
under the circumstances described in Subsection 5(c), shall be
entitled to elect, as herein provided, a total of two members
of the Board of Directors of the Corporation; provided,
however, that the holders of such Class I Shares shall not
exercise such special class voting rights except at meetings
of such shareholders for the election of directors at which
the holders of not less than 50% of such Class I Shares are
present in person or by proxy; and provided further, that the
special class voting rights provided for in this paragraph
when the same shall have become vested shall remain so vested
until all accrued and unpaid dividends on such Class I Shares
then outstanding shall have been paid or declared and a sum
sufficient for the payment thereof set aside for payment,
whereupon the holders of such Class I Shares shall be divested
of their special class voting rights in respect of subsequent
elections of directors, subject to the revesting of such
special class voting rights in the event above specified in
this paragraph. All dividend payments made on the Class I
Shares, at any time during which the Corporation is in default
in the payment of dividends on such Class I Shares for any
dividend period, shall be deemed to be made in respect of the
earliest dividend period with respect to which the Corporation
is in default.
(2) In the event of default entitling holders of
Class I Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting
of such holders for the purpose of electing such
directors shall be called by the Secretary of the
Corporation upon written request of, or may be called
by, the holders of record of at least 10% of the
Class I Shares upon which such default in the payment
of dividends exists and notice thereof shall be given
in the same manner as that required for the annual
meeting of shareholders; provided, however, that the
Corporation shall not be required to call such
special meeting if the annual meeting of shareholders
shall be called to be held within 90 days after the
date of receipt of the foregoing written request from
the holders of Class I Shares. At any meeting at
which such holders of Class I Shares shall be
entitled to elect directors, holders of 50% of such
Class I Shares, present in person or by proxy, shall
be sufficient to constitute a quorum, and the vote of
the holders of a
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majority of such shares so present at any such
meeting at which there shall be such a quorum shall
be sufficient to elect the members of the Board of
Directors which such holders of Class I Shares are
entitled to elect as herein provided. Notwithstanding
any provision of these Amended and Restated Articles
of Incorporation, as amended, or the Code of
Regulations of the Corporation or any action taken by
the holders of any class of shares fixing the number
of directors of the Corporation, the two directors
who may be elected by such holders of Class I Shares
pursuant to this Subsection shall serve in addition
to any other directors then in office or proposed to
be elected otherwise than pursuant to this
Subsection. Nothing in this Subsection shall prevent
any change otherwise permitted in the total number of
or classifications of directors of the Corporation or
require the resignation of any director elected
otherwise than pursuant to this Subsection.
Notwithstanding any classification of the other
directors of the Corporation, the two directors
elected by such holders of Class I Shares shall be
elected annually for terms expiring at the next
succeeding annual meeting of shareholders.
(3) Upon any divesting of the special class
voting rights of the holders of the Class I Shares in
respect of elections of directors as provided in this
Subsection, the terms of office of all directors then
in office elected by such holders shall terminate
immediately thereupon. If the office of any director
elected by such holders voting as a class becomes
vacant by reason of death, resignation, removal from
office or otherwise, the remaining director elected
by such holders voting as a class may elect a
successor who shall hold office for the unexpired
term in respect of which such vacancy occurred.
(c) If at any time when the holders of Class I Shares
are entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any Class A Shares,
Class B Shares, Class C Shares, Class D Shares, Class E
Shares, Class F Shares, Class G Shares, Class H Shares, Class
J Shares, Class K Shares or Noncumulative Shares are entitled
to elect directors pursuant hereto by reason of any default in
the payment of dividends thereon, then the voting rights of
the Cumulative Shares and the Noncumulative Shares then
entitled to vote shall be combined (with each class of shares
having a number of votes proportional to the aggregate
liquidation preference of its outstanding shares). In such
case, the holders of Class I Shares and of all such other
shares then entitled so to vote, voting as a class, shall
elect such directors. If the holders of any such other shares
have elected such directors prior to the happening of the
default or event permitting the holders of Class I Shares to
elect directors, or prior to a written request for the holding
of a special meeting being received by the Secretary of the
Corporation as required above, then a new election shall be
held with all such other shares and the Class I Shares voting
together as a single class for such directors, resulting in
the termination of the term of such previously elected
directors upon the election of such new directors.
(d) The affirmative vote of the holders of at least
two-thirds of the Class I Shares at the time outstanding,
voting separately as a class, given in person or by proxy
either in writing or at a meeting called for the purpose,
shall be necessary to effect either of the following:
(1) Any amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of any
of the provisions of the Amended and Restated
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Articles of Incorporation, as amended, or of the Code
of Regulations of the Corporation which affects
adversely and materially the preferences or voting or
other rights of the holders of Class I Shares which
are set forth in these Amended and Restated Articles
of Incorporation, as amended; provided, however,
neither the amendment of these Amended and Restated
Articles of Incorporation, as amended, so as to
authorize, create or change the authorized or
outstanding number of Class I Shares or of any shares
ranking on a parity with or junior to the Class I
Shares nor the amendment of the provisions of the
Code of Regulations so as to change the number or
classification of directors of the Corporation shall
be deemed to affect adversely and materially
preferences or voting or other rights of the holders
of Class I Shares; or
(2) The authorization, creation or increase
in the authorized number of any shares, or any
security convertible into shares, in either case
ranking prior to such series of Class I Shares.
(e) In the event, and only to the extent, that (1)
Class I Shares are issued in more than one series and (2) Ohio
law permits the holders of a series of a class of capital
stock to vote separately as a class, the affirmative vote of
the holders of at least two-thirds of each series of Class I
Shares at the time outstanding, voting separately as a class,
given in person or by proxy either in writing or at a meeting
called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of these Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of such series which are
set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class I Shares
or of any shares ranking on a parity with or junior to the
Class I Shares nor the Amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially the preferences or voting or other
rights of the holders of such series.
X. The Class J Cumulative Preferred Shares. The Class J Shares shall
have the following express terms:
Section 1. Series. The Class J Shares may be issued from time
to time in one or more series. All Class J Shares shall be of equal
rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Class J Shares shall rank on a parity with the Class A
Shares, the Class B Shares, the Class C Shares, the Class D Shares,
Class E Shares, Class F Shares, Class G Shares, Class H Shares, Class I
Shares, Class K Shares and the Noncumulative Shares and shall be
identical to all Class A Shares, Class B Shares, Class C Shares, Class
D Shares, Class E Shares, Class F Shares, Class G Shares, Class H
Shares, Class I Shares, Class K Shares and Noncumulative Shares except
(1) in respect of the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on Cumulative Shares shall be
cumulative as set forth herein. Subject to the provisions of Sections 2
through 5, both inclusive, and Item XIII of this Division, which
provisions shall apply to all Class J Shares, the Board of Directors
hereby is authorized to cause such shares to be
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issued in one or more series and, with respect to each such series to
determine and fix prior to the issuance thereof (and thereafter, to the
extent provided in clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item X) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class J Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class J Shares, shall be
entitled to receive out of any funds legally available
therefor, and when and as declared by the Board of Directors,
dividends in cash at the rate or rates for such series fixed
in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such
dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be
paid upon or declared or set apart for any series of the Class
J Shares for any dividend period unless at the same time (i) a
like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in
proportion
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to the respective annual dividend rates fixed therefor, shall
have been paid upon or declared or set apart for all Class J
Shares of all series then issued and outstanding and entitled
to receive such dividend and (ii) the dividends payable for
the dividend periods terminating on the same or any earlier
date (but, with respect to Noncumulative Shares, only with
respect to the then current dividend period), ratably in
proportion to the respective dividend rates fixed therefor,
shall have been paid upon or declared or set apart for all
Class A Shares, Class B Shares, Class C Shares, Class D
Shares, Class E Shares, Class F Shares, Class G Shares, Class
H Shares, Class I Shares, Class K Shares and Noncumulative
Shares then issued and outstanding and entitled to receive
such dividends.
(b) So long as any Class J Shares shall be
outstanding no dividend, except a dividend payable in Common
Shares or other shares ranking junior to the Class J Shares,
shall be paid or declared or any distribution be made, except
as aforesaid, in respect of the Common Shares or any other
shares ranking junior to the Class J Shares, nor shall any
Common Shares or any other shares ranking junior to the Class
J Shares be purchased, retired or otherwise acquired by the
Corporation, except out of the proceeds of the sale of Common
Shares or other shares of the Corporation ranking junior to
the Class J Shares received by the Corporation subsequent to
the date of first issuance of Class J Shares of any series,
unless:
(1) All accrued and unpaid dividends on
Cumulative Shares, including the full dividends for
all current dividend periods, shall have been
declared and paid or a sum sufficient for payment
thereof set apart;
(2) All unpaid dividends on Noncumulative
Shares for the then current dividend period shall
have been declared and paid or a sum sufficient for
payment therefor set apart; and
(3) There shall be no arrearages with
respect to the redemption of Cumulative Shares or
Noncumulative Shares of any series from any sinking
fund provided for shares of such series in accordance
with the provisions of Section 1 of this Item X.
(c) The foregoing restrictions on the payment of
dividends or other distributions on, or on the purchase,
redemption retirement or other acquisition of, Common Shares
or any other shares ranking on a parity with or junior to the
Class J Shares shall be inapplicable to (i) any payments in
lieu of issuance of fractional shares thereof, whether upon
any merger, conversion, stock dividend or otherwise, (ii) the
conversion of Cumulative Shares or Noncumulative Shares into
Common Shares, or (iii) the exercise by the Corporation of its
rights pursuant to Item XIV(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital
stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects
to designate as "capital gain dividends" (as defined in
Section 857 of the Code), any portion (the "Capital Gains
Amount") of the dividends paid or made available for the year
to holders of all classes of stock (the "Total Dividends"),
then, to the extent permissible under the Code and to the
extent it does not cause any dividends to fail to qualify for
the dividends paid deduction under Section 561 of the Code,
the portion of the Capital Gains Amount that shall be
allocable to holders of the Class J Shares shall be the amount
that the total dividends paid
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or made available to the holders of the Class J Shares for the
year bears to the Total Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of
the Board of Directors, redeem all or any part of any
redeemable series of Class J Shares at the time
outstanding at the applicable redemption price for
such series fixed in accordance with the provisions
of Section 1 of this Item X; and
(2) Shall, from time to time, make such
redemptions of each series of Class J Shares as may
be required to fulfill the requirements of any
sinking fund provided for shares of such series at
the applicable sinking fund redemption price fixed in
accordance with the provisions of Section 1 of this
Item X; and shall in each case pay all accrued and
unpaid dividends to the redemption date.
(b) (1) Notice of every such redemption shall be
mailed, postage prepaid, to the holders of record of the Class
J Shares to be redeemed at their respective addresses then
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Item X prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
Corporation may deposit the aggregate redemption price of
Class J Shares to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, with any bank
or trust company in Cleveland, Ohio, or New York, New York,
having capital and surplus of not less than $100,000,000,
named in such notice and direct that there be paid to the
respective holders of the Class J Shares so to be redeemed
amounts equal to the redemption price of the Class J Shares so
to be redeemed, together with such accrued and unpaid
dividends thereon, on surrender of the share certificate or
certificates held by such holders; and upon the deposit of
such notice in the mail and the making of such deposit of
money with such bank or trust company, such holders shall
cease to be shareholders with respect to such shares; and from
and after the time such notice shall have been so deposited
and such deposit of money shall have been so made, such
holders shall have no rights or claim against the Corporation
with respect to such shares, except only the right to receive
such money from such bank or trust company without interest or
to exercise before the redemption date any unexpired
privileges of conversion. In the event less than all of the
outstanding Class J Shares are to be redeemed, the Corporation
shall select by lot the shares so to be redeemed in such
manner as shall be prescribed by the Board of Directors.
(2) If the holders of Class J Shares which have
been called for redemption shall not within six years
after such deposit claim the amount deposited for the
redemption thereof, any such bank or trust company
shall, upon demand, pay over to the Corporation such
unclaimed amounts and thereupon such bank or trust
company and the Corporation shall be relieved of all
responsibility in respect thereof and to such
holders.
(c) Any Class J Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking
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fund requirements provided for shares of such series, (3)
converted in accordance with the express terms thereof, or (4)
otherwise acquired by the Corporation, shall resume the status
of authorized but unissued Class J Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item XIV of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital stock hereafter created or
authorized, the Corporation may not purchase or redeem (for
sinking fund purposes or otherwise) less than all of the Class
J Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Class J
Shares, unless all dividends on all Class J Shares then
outstanding for all previous and current dividend periods
shall have been declared and paid or funds therefor set apart
and all accrued sinking fund obligations applicable thereto
shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class J Shares of any series shall
be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be
paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Class J Shares, the
amounts fixed with respect to shares of such series in
accordance with Section 1 of this Item X, plus an amount equal
to all dividends accrued and unpaid thereon to the date of
payment of the amount due pursuant to such liquidation,
dissolution or winding up of the affairs of the Corporation.
In the event the net assets of the Corporation legally
available therefor are insufficient to permit the payment upon
all outstanding Cumulative Shares and Noncumulative Shares of
the full preferential amount to which they are respectively
entitled, then such net assets shall be distributed ratably
upon all outstanding Cumulative Shares and Noncumulative
Shares in proportion to the full preferential amount to which
each such share is entitled.
(2) After payment to the holders of Class J
Shares of the full preferential amounts as aforesaid,
the holders of Class J Shares, as such, shall have no
right or claim to any of the remaining assets of the
Corporation.
(b) The merger or consolidation of the Corporation
into or with any other Corporation, the merger of any other
Corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Class J Shares shall have no
voting rights, except as provided in this Section or required
by law.
(b) (1) If, and so often as, the Corporation shall be
in default in the payment of dividends on any series of Class
J Shares at the time outstanding, whether or not earned or
declared, for a number of dividend payment periods, whether
consecutive or not, which in the aggregate contain at least
540 days, all holders of such Class J Shares, voting
separately as a class, together with all Class A Shares, Class
B Shares, Class C
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Shares, Class D Shares, Class E Shares, Class F Shares, Class
G Shares, Class H Shares, Class I Shares, Class K Shares and
Noncumulative Shares upon which like voting rights have been
conferred and are exercisable under the circumstances
described in Subsection 5(c), shall be entitled to elect, as
herein provided, a total of two members of the Board of
Directors of the Corporation; provided, however, that the
holders of such Class J Shares shall not exercise such special
class voting rights except at meetings of such shareholders
for the election of directors at which the holders of not less
than 50% of such Class J Shares are present in person or by
proxy; and provided further, that the special class voting
rights provided for in this paragraph when the same shall have
become vested shall remain so vested until all accrued and
unpaid dividends on such Class J Shares then outstanding shall
have been paid or declared and a sum sufficient for the
payment thereof set aside for payment, whereupon the holders
of such Class J Shares shall be divested of their special
class voting rights in respect of subsequent elections of
directors, subject to the revesting of such special class
voting rights in the event above specified in this paragraph.
All dividend payments made on the Class J Shares, at any time
during which the Corporation is in default in the payment of
dividends on such Class J Shares for any dividend period,
shall be deemed to be made in respect of the earliest dividend
period with respect to which the Corporation is in default.
(2) In the event of default entitling holders of
Class J Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting
of such holders for the purpose of electing such
directors shall be called by the Secretary of the
Corporation upon written request of, or may be called
by, the holders of record of at least 10% of the
Class J Shares upon which such default in the payment
of dividends exists and notice thereof shall be given
in the same manner as that required for the annual
meeting of shareholders; provided, however, that the
Corporation shall not be required to call such
special meeting if the annual meeting of shareholders
shall be called to be held within 90 days after the
date of receipt of the foregoing written request from
the holders of Class J Shares. At any meeting at
which such holders of Class J Shares shall be
entitled to elect directors, holders of 50% of such
Class J Shares, present in person or by proxy, shall
be sufficient to constitute a quorum, and the vote of
the holders of a majority of such shares so present
at any such meeting at which there shall be such a
quorum shall be sufficient to elect the members of
the Board of Directors which such holders of Class J
Shares are entitled to elect as herein provided.
Notwithstanding any provision of these Amended and
Restated Articles of Incorporation, as amended, or
the Code of Regulations of the Corporation or any
action taken by the holders of any class of shares
fixing the number of directors of the Corporation,
the two directors who may be elected by such holders
of Class J Shares pursuant to this Subsection shall
serve in addition to any other directors then in
office or proposed to be elected otherwise than
pursuant to this Subsection. Nothing in this
Subsection shall prevent any change otherwise
permitted in the total number of or classifications
of directors of the Corporation or require the
resignation of any director elected otherwise than
pursuant to this Subsection. Notwithstanding any
classification of the other directors of the
Corporation, the two directors elected by such
holders of Class J Shares shall be elected annually
for terms expiring at the next succeeding annual
meeting of shareholders.
(3) Upon any divesting of the special class
voting rights of the holders of the Class J Shares in
respect of elections of directors as provided in this
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Subsection, the terms of office of all directors then
in office elected by such holders shall terminate
immediately thereupon. If the office of any director
elected by such holders voting as a class becomes
vacant by reason of death, resignation, removal from
office or otherwise, the remaining director elected
by such holders voting as a class may elect a
successor who shall hold office for the unexpired
term in respect of which such vacancy occurred.
(c) If at any time when the holders of Class J Shares
are entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any Class A Shares,
Class B Shares, Class C Shares, Class D Shares, Class E
Shares, Class F Shares, Class G Shares, Class H Shares, Class
I Shares, Class K Shares or Noncumulative Shares are entitled
to elect directors pursuant hereto by reason of any default in
the payment of dividends thereon, then the voting rights of
the Cumulative Shares and the Noncumulative Shares then
entitled to vote shall be combined (with each class of shares
having a number of votes proportional to the aggregate
liquidation preference of its outstanding shares). In such
case, the holders of Class J Shares and of all such other
shares then entitled so to vote, voting as a class, shall
elect such directors. If the holders of any such other shares
have elected such directors prior to the happening of the
default or event permitting the holders of Class J Shares to
elect directors, or prior to a written request for the holding
of a special meeting being received by the Secretary of the
Corporation as required above, then a new election shall be
held with all such other shares and the Class J Shares voting
together as a single class for such directors, resulting in
the termination of the term of such previously elected
directors upon the election of such new directors.
(d) The affirmative vote of the holders of at least
two-thirds of the Class J Shares at the time outstanding,
voting separately as a class, given in person or by proxy
either in writing or at a meeting called for the purpose,
shall be necessary to effect either of the following:
(1) Any amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of any
of the provisions of the Amended and Restated
Articles of Incorporation, as amended, or of the Code
of Regulations of the Corporation which affects
adversely and materially the preferences or voting or
other rights of the holders of Class J Shares which
are set forth in these Amended and Restated Articles
of Incorporation, as amended; provided, however,
neither the amendment of these Amended and Restated
Articles of Incorporation, as amended, so as to
authorize, create or change the authorized or
outstanding number of Class J Shares or of any shares
ranking on a parity with or junior to the Class J
Shares nor the amendment of the provisions of the
Code of Regulations so as to change the number or
classification of directors of the Corporation shall
be deemed to affect adversely and materially
preferences or voting or other rights of the holders
of Class J Shares; or
(2) The authorization, creation or increase
in the authorized number of any shares, or any
security convertible into shares, in either case
ranking prior to such series of Class J Shares.
(e) In the event, and only to the extent, that (1)
Class J Shares are issued in more than one series and (2) Ohio
law permits the holders of a series of a class of capital
stock to vote separately as a class, the affirmative vote of
the holders of at least two-thirds of
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each series of Class J Shares at the time outstanding, voting
separately as a class, given in person or by proxy either in
writing or at a meeting called for the purpose of voting on
such matters, shall be required for any amendment, alteration
or repeal, whether by merger, consolidation or otherwise, of
any of the provisions of these Amended and Restated Articles
of Incorporation, as amended, or of the Code of Regulations of
the Corporation which affects adversely and materially the
preferences or voting or other rights of the holders of such
series which are set forth in these Amended and Restated
Articles of Incorporation, as amended; provided, however,
neither the amendment of these Amended and Restated Articles
of Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class J Shares
or of any shares ranking on a parity with or junior to the
Class J Shares nor the Amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially the preferences or voting or other
rights of the holders of such series.
XI. The Class K Cumulative Preferred Shares. The Class K Shares shall
have the following express terms:
Section 1. Series. The Class K Shares may be issued from time
to time in one or more series. All Class K Shares shall be of equal
rank and shall be identical, except in respect of the matters that may
be fixed by the Board of Directors as hereinafter provided, and each
share of a series shall be identical with all other shares of such
series, except as to the dates from which dividends shall accrue and be
cumulative. All Class K Shares shall rank on a parity with the Class A
Shares, the Class B Shares, the Class C Shares, the Class D Shares,
Class E Shares, Class F Shares, Class G Shares, Class H Shares, Class I
Shares, Class J Shares and the Noncumulative Shares and shall be
identical to all Class A Shares, Class B Shares, Class C Shares, Class
D Shares, Class E Shares, Class F Shares, Class G Shares, Class H
Shares, Class I Shares, Class J Shares and Noncumulative Shares except
(1) in respect of the matters that may be fixed by the Board of
Directors as provided in clauses (a) through (i), inclusive, of this
Section 1 and (2) only dividends on Cumulative Shares shall be
cumulative as set forth herein. Subject to the provisions of Sections 2
through 5, both inclusive, and Item XIII of this Division, which
provisions shall apply to all Class K Shares, the Board of Directors
hereby is authorized to cause such shares to be issued in one or more
series and, with respect to each such series to determine and fix prior
to the issuance thereof (and thereafter, to the extent provided in
clause (b) of this Section) the following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The date or dates from which dividends shall
accrue and be cumulative and the dates on which and the period
or periods for which dividends, if declared, shall be payable,
including the means by which such dates and periods may be
established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
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(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item XI) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), inclusive, of this Section and is authorized to take such actions
with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
(a) The holders of Class K Shares of each series, in
preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class K Shares, shall be
entitled to receive out of any funds legally available
therefor, and when and as declared by the Board of Directors,
dividends in cash at the rate or rates for such series fixed
in accordance with the provisions of Section 1 above and no
more, payable on the dates fixed for such series. Such
dividends shall accrue and be cumulative, in the case of
shares of each particular series, from and after the date or
dates fixed with respect to such series. No dividends shall be
paid upon or declared or set apart for any series of the Class
K Shares for any dividend period unless at the same time (i) a
like proportionate dividend for the dividend periods
terminating on the same or any earlier date, ratably in
proportion to the respective annual dividend rates fixed
therefor, shall have been paid upon or declared or set apart
for all Class K Shares of all series then issued and
outstanding and entitled to receive such dividend and (ii) the
dividends payable for the dividend periods terminating on the
same or any earlier date (but, with respect to Noncumulative
Shares, only with respect to the then current dividend
period), ratably in proportion to the respective dividend
rates fixed therefor, shall have been paid upon or declared or
set apart for all Class A Shares, Class B Shares, Class C
Shares, Class D Shares, Class E Shares, Class F Shares, Class
G Shares, Class H Shares, Class I Shares, Class J Shares and
Noncumulative Shares then issued and outstanding and entitled
to receive such dividends.
(b) So long as any Class K Shares shall be
outstanding no dividend, except a dividend payable in Common
Shares or other shares ranking junior to the Class K Shares,
shall be paid or declared or any distribution be made, except
as aforesaid, in respect of the Common Shares or any other
shares ranking junior to the Class K Shares, nor shall any
Common Shares or any other shares ranking junior to the Class
K Shares be purchased, retired or otherwise acquired by the
Corporation, except out of the proceeds of the sale of Common
Shares or other shares of the Corporation ranking junior to
the Class K Shares received by the Corporation subsequent to
the date of first issuance of Class K Shares of any series,
unless:
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(1) All accrued and unpaid dividends on
Cumulative Shares, including the full dividends for
all current dividend periods, shall have been
declared and paid or a sum sufficient for payment
thereof set apart;
(2) All unpaid dividends on Noncumulative
Shares for the then current dividend period shall
have been declared and paid or a sum sufficient for
payment therefor set apart; and
(3) There shall be no arrearages with
respect to the redemption of Cumulative Shares or
Noncumulative Shares of any series from any sinking
fund provided for shares of such series in accordance
with the provisions of Section 1 of this Item XI.
(c) The foregoing restrictions on the payment of
dividends or other distributions on, or on the purchase,
redemption retirement or other acquisition of, Common Shares
or any other shares ranking on a parity with or junior to the
Class K Shares shall be inapplicable to (i) any payments in
lieu of issuance of fractional shares thereof, whether upon
any merger, conversion, stock dividend or otherwise, (ii) the
conversion of Cumulative Shares or Noncumulative Shares into
Common Shares, or (iii) the exercise by the Corporation of its
rights pursuant to Item XIV(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation, as
amended, with respect to any other class or series of capital
stock hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects
to designate as "capital gain dividends" (as defined in
Section 857 of the Code), any portion (the "Capital Gains
Amount") of the dividends paid or made available for the year
to holders of all classes of stock (the "Total Dividends"),
then, to the extent permissible under the Code and to the
extent it does not cause any dividends to fail to qualify for
the dividends paid deduction under Section 561 of the Code,
the portion of the Capital Gains Amount that shall be
allocable to holders of the Class K Shares shall be the amount
that the total dividends paid or made available to the holders
of the Class K Shares for the year bears to the Total
Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of
the Board of Directors, redeem all or any part of any
redeemable series of Class K Shares at the time
outstanding at the applicable redemption price for
such series fixed in accordance with the provisions
of Section 1 of this Item XI; and
(2) Shall, from time to time, make such
redemptions of each series of Class K Shares as may
be required to fulfill the requirements of any
sinking fund provided for shares of such series at
the applicable sinking fund redemption price fixed in
accordance with the provisions of Section 1 of this
Item XI; and shall in each case pay all accrued and
unpaid dividends to the redemption date.
(b) (1) Notice of every such redemption shall be
mailed, postage prepaid, to the holders of record of the Class
K Shares to be redeemed at their respective addresses then
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<PAGE> 147
appearing on the books of the Corporation, not less than 30
days nor more than 60 days prior to the date fixed for such
redemption, or such other time prior thereto as the Board of
Directors shall fix for any series pursuant to Section 1 of
this Item XI prior to the issuance thereof. At any time after
notice as provided above has been deposited in the mail, the
Corporation may deposit the aggregate redemption price of
Class K Shares to be redeemed, together with accrued and
unpaid dividends thereon to the redemption date, with any bank
or trust company in Cleveland, Ohio, or New York, New York,
having capital and surplus of not less than $100,000,000,
named in such notice and direct that there be paid to the
respective holders of the Class K Shares so to be redeemed
amounts equal to the redemption price of the Class K Shares so
to be redeemed, together with such accrued and unpaid
dividends thereon, on surrender of the share certificate or
certificates held by such holders; and upon the deposit of
such notice in the mail and the making of such deposit of
money with such bank or trust company, such holders shall
cease to be shareholders with respect to such shares; and from
and after the time such notice shall have been so deposited
and such deposit of money shall have been so made, such
holders shall have no rights or claim against the Corporation
with respect to such shares, except only the right to receive
such money from such bank or trust company without interest or
to exercise before the redemption date any unexpired
privileges of conversion. In the event less than all of the
outstanding Class K Shares are to be redeemed, the Corporation
shall select by lot the shares so to be redeemed in such
manner as shall be prescribed by the Board of Directors.
(2) If the holders of Class K Shares which have
been called for redemption shall not within six years
after such deposit claim the amount deposited for the
redemption thereof, any such bank or trust company
shall, upon demand, pay over to the Corporation such
unclaimed amounts and thereupon such bank or trust
company and the Corporation shall be relieved of all
responsibility in respect thereof and to such
holders.
(c) Any Class K Shares which are (1) redeemed by the
Corporation pursuant to the provisions of this Section, (2)
purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of such series, (3) converted
in accordance with the express terms thereof, or (4) otherwise
acquired by the Corporation, shall resume the status of
authorized but unissued Class K Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item XIV of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital stock hereafter created or
authorized, the Corporation may not purchase or redeem (for
sinking fund purposes or otherwise) less than all of the Class
K Shares then outstanding except in accordance with a stock
purchase offer made to all holders of record of Class K
Shares, unless all dividends on all Class K Shares then
outstanding for all previous and current dividend periods
shall have been declared and paid or funds therefor set apart
and all accrued sinking fund obligations applicable thereto
shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Class K Shares of any series shall
be entitled to receive in full out of the assets of the
Corporation, including its
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capital, before any amount shall be paid or distributed among
the holders of the Common Shares or any other shares ranking
junior to the Class K Shares, the amounts fixed with respect
to shares of such series in accordance with Section 1 of this
Item XI, plus an amount equal to all dividends accrued and
unpaid thereon to the date of payment of the amount due
pursuant to such liquidation, dissolution or winding up of the
affairs of the Corporation. In the event the net assets of the
Corporation legally available therefor are insufficient to
permit the payment upon all outstanding Cumulative Shares and
Noncumulative Shares of the full preferential amount to which
they are respectively entitled, then such net assets shall be
distributed ratably upon all outstanding Cumulative Shares and
Noncumulative Shares in proportion to the full preferential
amount to which each such share is entitled.
(2) After payment to the holders of Class K
Shares of the full preferential amounts as aforesaid,
the holders of Class K Shares, as such, shall have no
right or claim to any of the remaining assets of the
Corporation.
(b) The merger or consolidation of the Corporation
into or with any other Corporation, the merger of any other
Corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Class K Shares shall have no
voting rights, except as provided in this Section or required
by law.
(b) (1) If, and so often as, the Corporation shall be
in default in the payment of dividends on any series of Class
K Shares at the time outstanding, whether or not earned or
declared, for a number of dividend payment periods, whether
consecutive or not, which in the aggregate contain at least
540 days, all holders of such Class K Shares, voting
separately as a class, together with all Class A Shares, Class
B Shares, Class C Shares, Class D Shares, Class E Shares,
Class F Shares, Class G Shares, Class H Shares, Class I
Shares, Class J Shares and Noncumulative Shares upon which
like voting rights have been conferred and are exercisable
under the circumstances described in Subsection 5(c), shall be
entitled to elect, as herein provided, a total of two members
of the Board of Directors of the Corporation; provided,
however, that the holders of such Class K Shares shall not
exercise such special class voting rights except at meetings
of such shareholders for the election of directors at which
the holders of not less than 50% of such Class K Shares are
present in person or by proxy; and provided further, that the
special class voting rights provided for in this paragraph
when the same shall have become vested shall remain so vested
until all accrued and unpaid dividends on such Class K Shares
then outstanding shall have been paid or declared and a sum
sufficient for the payment thereof set aside for payment,
whereupon the holders of such Class K Shares shall be divested
of their special class voting rights in respect of subsequent
elections of directors, subject to the revesting of such
special class voting rights in the event above specified in
this paragraph. All dividend payments made on the Class K
Shares, at any time during which the Corporation is in default
in the payment of dividends on such Class K Shares for any
dividend period, shall be deemed to be made in respect of the
earliest dividend period with respect to which the Corporation
is in default.
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(2) In the event of default entitling holders of
Class K Shares to elect two directors as specified in
paragraph (1) of this Subsection, a special meeting
of such holders for the purpose of electing such
directors shall be called by the Secretary of the
Corporation upon written request of, or may be called
by, the holders of record of at least 10% of the
Class K Shares upon which such default in the payment
of dividends exists and notice thereof shall be given
in the same manner as that required for the annual
meeting of shareholders; provided, however, that the
Corporation shall not be required to call such
special meeting if the annual meeting of shareholders
shall be called to be held within 90 days after the
date of receipt of the foregoing written request from
the holders of Class K Shares. At any meeting at
which such holders of Class K Shares shall be
entitled to elect directors, holders of 50% of such
Class K Shares, present in person or by proxy, shall
be sufficient to constitute a quorum, and the vote of
the holders of a majority of such shares so present
at any such meeting at which there shall be such a
quorum shall be sufficient to elect the members of
the Board of Directors which such holders of Class K
Shares are entitled to elect as herein provided.
Notwithstanding any provision of these Amended and
Restated Articles of Incorporation, as amended, or
the Code of Regulations of the Corporation or any
action taken by the holders of any class of shares
fixing the number of directors of the Corporation,
the two directors who may be elected by such holders
of Class K Shares pursuant to this Subsection shall
serve in addition to any other directors then in
office or proposed to be elected otherwise than
pursuant to this Subsection. Nothing in this
Subsection shall prevent any change otherwise
permitted in the total number of or classifications
of directors of the Corporation or require the
resignation of any director elected otherwise than
pursuant to this Subsection. Notwithstanding any
classification of the other directors of the
Corporation, the two directors elected by such
holders of Class K Shares shall be elected annually
for terms expiring at the next succeeding annual
meeting of shareholders.
(3) Upon any divesting of the special class
voting rights of the holders of the Class K Shares in
respect of elections of directors as provided in this
Subsection, the terms of office of all directors then
in office elected by such holders shall terminate
immediately thereupon. If the office of any director
elected by such holders voting as a class becomes
vacant by reason of death, resignation, removal from
office or otherwise, the remaining director elected
by such holders voting as a class may elect a
successor who shall hold office for the unexpired
term in respect of which such vacancy occurred.
(c) If at any time when the holders of Class K Shares
are entitled to elect directors pursuant to the foregoing
provisions of this Section the holders of any Class A Shares,
Class B Shares, Class C Shares, Class D Shares, Class E
Shares, Class F Shares, Class G Shares, Class H Shares, Class
I Shares, Class J Shares or Noncumulative Shares are entitled
to elect directors pursuant hereto by reason of any default in
the payment of dividends thereon, then the voting rights of
the Cumulative Shares and the Noncumulative Shares then
entitled to vote shall be combined (with each class of shares
having a number of votes proportional to the aggregate
liquidation preference of its outstanding shares). In such
case, the holders of Class K Shares and of all such other
shares then entitled so to vote, voting as a class, shall
elect such directors. If the holders of any such other shares
have elected such directors prior to the happening of the
default or event permitting the holders of Class K Shares to
elect directors, or prior to a written
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request for the holding of a special meeting being received by
the Secretary of the Corporation as required above, then a new
election shall be held with all such other shares and the
Class K Shares voting together as a single class for such
directors, resulting in the termination of the term of such
previously elected directors upon the election of such new
directors.
(d) The affirmative vote of the holders of at least
two-thirds of the Class K Shares at the time outstanding,
voting separately as a class, given in person or by proxy
either in writing or at a meeting called for the purpose,
shall be necessary to effect either of the following:
(1) Any amendment, alteration or repeal,
whether by merger, consolidation or otherwise, of any
of the provisions of the Amended and Restated
Articles of Incorporation, as amended, or of the Code
of Regulations of the Corporation which affects
adversely and materially the preferences or voting or
other rights of the holders of Class K Shares which
are set forth in these Amended and Restated Articles
of Incorporation, as amended; provided, however,
neither the amendment of these Amended and Restated
Articles of Incorporation, as amended, so as to
authorize, create or change the authorized or
outstanding number of Class K Shares or of any shares
ranking on a parity with or junior to the Class K
Shares nor the amendment of the provisions of the
Code of Regulations so as to change the number or
classification of directors of the Corporation shall
be deemed to affect adversely and materially
preferences or voting or other rights of the holders
of Class K Shares; or
(2) The authorization, creation or increase
in the authorized number of any shares, or any
security convertible into shares, in either case
ranking prior to such series of Class K Shares.
(e) In the event, and only to the extent, that (1)
Class K Shares are issued in more than one series and (2) Ohio
law permits the holders of a series of a class of capital
stock to vote separately as a class, the affirmative vote of
the holders of at least two-thirds of each series of Class K
Shares at the time outstanding, voting separately as a class,
given in person or by proxy either in writing or at a meeting
called for the purpose of voting on such matters, shall be
required for any amendment, alteration or repeal, whether by
merger, consolidation or otherwise, of any of the provisions
of these Amended and Restated Articles of Incorporation, as
amended, or of the Code of Regulations of the Corporation
which affects adversely and materially the preferences or
voting or other rights of the holders of such series which are
set forth in these Amended and Restated Articles of
Incorporation, as amended; provided, however, neither the
amendment of these Amended and Restated Articles of
Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Class K Shares
or of any shares ranking on a parity with or junior to the
Class K Shares nor the Amendment of the provisions of the Code
of Regulations so as to change the number or classification of
directors of the Corporation shall be deemed to affect
adversely and materially the preferences or voting or other
rights of the holders of such series.
XII. The Noncumulative Preferred Shares. The Noncumulative Preferred
Shares shall have the following express terms:
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Section 1. Series. The Noncumulative Shares may be issued from
time to time in one or more series. All Noncumulative Shares shall be
of equal rank and shall be identical, except in respect of the matters
that may be fixed by the Board of Directors as hereinafter provided,
and each share of a series shall be identical with all other shares of
such series, except as to the dates on which and the periods for which
dividends may be payable. All Noncumulative Shares shall rank on a
parity with the Cumulative Shares, and shall be identical to all
Cumulative Shares, except (1) in respect of the matters that may be
fixed by the Board of Directors as provided in clauses (a) through (i),
inclusive, of this Section 1 and (2) only dividends on the
Noncumulative Shares are noncumulative as set forth herein. Subject to
the provisions of Sections 2 through 5, inclusive, and Item XIII of
this Division, which provisions shall apply to all Noncumulative
Shares, the Board of Directors hereby is authorized to cause such
shares to be issued in one or more series, and with respect to each
such series, to determine and fix prior to the issuance thereof (and
thereafter, to the extent provided in clause (b) of this Section) the
following:
(a) The designation of the series, which may be by
distinguishing number, letter or title;
(b) The authorized number of shares of the series,
which number the Board of Directors may (except where
otherwise provided in the creation of the series) increase or
decrease from time to time before or after the issuance
thereof (but not below the number of shares thereof then
outstanding);
(c) The dividend rate or rates of the series,
including the means by which such rates may be established;
(d) The dates on which and the period or periods for
which dividends, if declared, shall be payable, including the
means by which such dates and periods may be established;
(e) The redemption rights and price or prices, if
any, for shares of the series;
(f) The terms and amount of the sinking fund, if any,
for the purchase or redemption of shares of the series;
(g) The amounts payable on shares of the series in
the event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation;
(h) Whether the shares of the series shall be
convertible into Common Shares or shares of any other class
and, if so, the conversion rate or rates or price or prices,
any adjustments thereof and all other terms and conditions
upon which such conversion may be made; and
(i) Restrictions (in addition to those set forth in
Subsection 5(d) or 5(e) of this Item XII) on the issuance of
shares of the same series or of any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Amended and Restated Articles of Incorporation, as amended,
fixing, with respect to each such series, the matters described in clauses (a)
through (i), both inclusive, of this Section and is authorized to take such
actions with respect thereto as may be required by law in order to effect such
amendments.
Section 2. Dividends.
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(a) The holders of Noncumulative Shares of each
series, in preference to the holders of Common Shares and of
any other class of shares ranking junior to the Noncumulative
Shares, shall be entitled to receive out of any funds legally
available therefor, if, when and as declared by the Board of
Directors, dividends in cash at the rate or rates for such
series fixed in accordance with the provisions of Section 1
above and no more, payable on the dates fixed for such series.
Such dividends shall accrue, in the case of shares of each
particular series, from and after the date or dates fixed with
respect to such series; provided, however, that if the Board
of Directors fails to declare a dividend payable on a dividend
payment date on any Noncumulative Shares, the holders of the
Noncumulative Shares shall have no right to receive a dividend
in respect of the dividend period ending on such dividend
payment date, and the Corporation shall have no obligation to
pay the dividend accrued for such period, whether or not
dividends on such Noncumulative Shares are declared payable on
any future dividend payment date. No dividends shall be paid
upon or declared or set apart for any series of the
Noncumulative Shares for any dividend period unless at the
same time (i) a like proportionate dividend for the then
current dividend period, ratably in proportion to the
respective annual dividend rates fixed therefor, shall have
been paid upon or declared or set apart for all Noncumulative
Shares of all series then issued and outstanding and entitled
to receive such dividend and (ii) the dividends payable for
the dividend periods terminating on the same or any earlier
date, ratably in proportion to the respective dividend rates
fixed therefor, shall have been paid upon or declared or set
apart for all Class A Shares, Class B Shares, Class C Shares,
Class D Shares and Class E Shares then issued and outstanding
and entitled to receive such dividends.
(b) So long as any Noncumulative Shares shall be
outstanding no dividend, except a dividend payable in Common
Shares or other shares ranking junior to the Noncumulative
Shares, shall be paid or declared or any distribution be made,
except as aforesaid, in respect of the Common Shares or any
other shares ranking junior to the Noncumulative Shares, nor
shall any Common Shares or any other shares ranking junior to
the Noncumulative Shares be purchased, retired or otherwise
acquired by the Corporation, except out of the proceeds of the
sale of Common Shares or other shares of the Corporation
ranking junior to the Noncumulative Shares received by the
Corporation subsequent to the date of first issuance of
Noncumulative Shares of any series, unless:
(1) All accrued and unpaid dividends on
Cumulative Shares including the full dividends for
all current dividend periods, shall have been
declared and paid or a sum sufficient for payment
thereof set apart;
(2) All unpaid dividends on Noncumulative
Shares for the then current dividend period shall
have been declared and paid or a sum sufficient for
payment therefor set apart; and
(3) There shall be no arrearages with
respect to the redemption of Cumulative Shares or
Noncumulative Shares of any series from any sinking
fund provided for shares of such series in accordance
with the provisions of Section 1 of this Item XII.
(c) The foregoing restrictions on the payment of
dividends or other distributions on, or on the purchase,
redemption retirement or other acquisition of, Common Shares
or any other shares ranking on a parity with or junior to the
Noncumulative Shares shall be inapplicable to (i) any payments
in lieu of issuance of fractional shares thereof, whether
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upon any merger, conversion, stock dividend or otherwise, (ii)
the conversion of Cumulative Shares or Noncumulative Shares
into Common Shares or (iii) the exercise by the Corporation of
its rights pursuant to Item XIV(d) of this Division A, Section
4(d) of Division B or any similar Section hereafter contained
in these Amended and Restated Articles of Incorporation with
respect to any other class or series of capital stock
hereafter created or authorized.
(d) If, for any taxable year, the Corporation elects
to designate as "capital gain dividends" (as defined in
Section 857 of the Code), any portion (the "Capital Gains
Amount") of the dividends paid or made available for the year
to holders of all classes of stock (the "Total Dividends"),
then, to the extent permissible under the Code and to the
extent it does not cause any dividends to fail to qualify for
the dividends paid deduction under Section 561 of the Code,
the portion of the Capital Gains Amount that shall be
allocable to holders of the Noncumulative Shares shall be the
amount that the total dividends paid or made available to the
holders of the Noncumulative Shares for the year bears to the
Total Dividends.
Section 3. Redemption.
(a) Subject to the express terms of each series, the
Corporation:
(1) May, from time to time at the option of
the Board of Directors, redeem all or any part of any
redeemable series of Noncumulative Shares at the time
outstanding at the applicable redemption price for
such series fixed in accordance with the provisions
of Section 1 of this Item XII; and
(2) Shall, from time to time, make such
redemptions of each series of Noncumulative Shares as
may be required to fulfill the requirements of any
sinking fund provided for shares of such series at
the applicable sinking fund redemption price fixed in
accordance with the provisions of Section 1 of this
Item XII; and shall, in each case, pay all unpaid
dividends for the then current dividend period to the
redemption date.
(b) (1) Notice of every such redemption shall be
mailed, postage prepaid, to the holders of record of the
Noncumulative Shares to be redeemed at their respective
addresses then appearing on the books of the Corporation, not
less than 30 days nor more than 60 days prior to the date
fixed for such redemption, or such other time prior thereto as
the Board of Directors shall fix for any series pursuant to
Section 1 of this Item XII prior to the issuance thereof. At
any time after notice as provided above has been deposited in
the mail, the Corporation may deposit the aggregate redemption
price of Noncumulative Shares to be redeemed, together with
accrued and unpaid dividends thereon for the then current
dividend period to the redemption date, with any bank or trust
company in Cleveland, Ohio, or New York, New York, having
capital and surplus of not less than $100,000,000, named in
such notice and direct that there be paid to the respective
holders of the Noncumulative Shares so to be redeemed amounts
equal to the redemption price of the Noncumulative Shares so
to be redeemed together with such accrued and unpaid dividends
thereon for the then current dividend period, on surrender of
the share certificate or certificates held by such holders;
and upon the deposit of such notice in the mail and the making
of such deposit of money with such bank or trust company, such
holders shall cease to be shareholders with respect to such
shares; and from and after the time such notice shall have
been so deposited and such deposit of
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money shall have been so made, such holders shall have no
rights or claim against the Corporation with respect to such
shares, except only the right to receive such money from such
bank or trust company without interest or to exercise before
the redemption date any unexpired privileges of conversion. In
the event less than all of the outstanding Noncumulative
Shares are to be redeemed, the Corporation shall select by lot
the shares so to be redeemed in such manner as shall be
prescribed by the Board of Directors.
(2) If the holders of Noncumulative Shares which
have been called for redemption shall not within six
years after such deposit claim the amount deposited
for the redemption thereof, any such bank or trust
company shall, upon demand, pay over to the
Corporation such unclaimed amounts and thereupon such
bank or trust company and the Corporation shall be
relieved of all responsibility in respect thereof and
to such holders.
(c) Any Noncumulative Shares which are (1) redeemed
by the Corporation pursuant to the provisions of this Section,
(2) purchased and delivered in satisfaction of any sinking
fund requirements provided for shares of such series, (3)
converted in accordance with the express terms thereof, or (4)
otherwise acquired by the Corporation, shall resume the status
of authorized but unissued Noncumulative Shares without serial
designation.
(d) Except in connection with the exercise of the
Corporation's rights pursuant to Section (d) of Item XIV of
this Division A, Section 4(d) of Division B or any similar
Section hereafter contained in these Amended and Restated
Articles of Incorporation, as amended, with respect to any
other class or series of capital stock hereafter created or
authorized, the Corporation may not purchase or redeem (for
sinking fund purposes or otherwise) of less than all of the
Noncumulative Shares then outstanding except in accordance
with a stock purchase offer made to all holders of record of
Noncumulative Shares, unless all dividends on all
Noncumulative Shares then outstanding for the then current
dividend period shall have been declared and paid or funds
therefor set apart and all accrued sinking fund obligations
applicable thereto shall have been complied with.
Section 4. Liquidation.
(a) (1) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, the holders of Noncumulative Shares of any series
shall be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be
paid or distributed among the holders of the Common Shares or
any other shares ranking junior to the Noncumulative Shares,
the amounts fixed with respect to shares of such series in
accordance with Section 1 of this Item XII, plus an amount
equal to all dividends accrued and unpaid thereon for the then
current dividend period to the date of payment of the amount
due pursuant to such liquidation, dissolution or winding up of
the affairs of the Corporation. In the event the net assets of
the Corporation legally available therefor are insufficient to
permit the payment upon all outstanding Cumulative Shares and
Noncumulative Shares of the full preferential amount to which
they are respectively entitled, then such net assets shall be
distributed ratably upon all outstanding Noncumulative Shares
in proportion to the full preferential amount to which each
such share is entitled.
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(2) After payment to the holders of Noncumulative
Shares of the full preferential amounts as aforesaid,
the holders of Noncumulative Shares, as such, shall
have no right or claim to any of the remaining assets
of the Corporation.
(b) The merger or consolidation of the Corporation
into or with any other Corporation, the merger of any other
Corporation into it, or the sale, lease or conveyance of all
or substantially all the assets of the Corporation, shall not
be deemed to be a dissolution, liquidation or winding up for
the purposes of this Section.
Section 5. Voting.
(a) The holders of Noncumulative Shares shall have no
voting rights, except as provided in this Section or required
by law.
(b)(1) If, and so often as, the Corporation shall not
have fully paid, or shall not have declared and set aside a
sum sufficient for the payment of, dividends on any series of
Noncumulative Shares at the time outstanding, for a number of
dividend payment periods, whether consecutive or not, which in
the aggregate contain at least 540 days, the holders of such
Noncumulative Shares, voting separately as a class, together
with all Cumulative Shares upon which like voting rights have
been conferred and are exercisable, shall be entitled to
elect, as herein provided, two members of the Board of
Directors of the Corporation; provided, however, that the
holders of such Noncumulative Shares shall not exercise such
special class voting rights except at meetings of such
shareholders for the election of directors at which the
holders of not less than 50% of such Noncumulative Shares are
present in person or by proxy; and provided further, that the
special class voting rights provided for in this paragraph
when the same shall have become vested shall remain so vested
until the Corporation shall have fully paid, or shall have set
aside a sum sufficient for the payment of, dividends on such
Noncumulative Shares then outstanding for a number of
consecutive dividend payment periods which in the aggregate
contain at least 360 days, whereupon the holders of such
Noncumulative Shares shall be divested of their special class
voting rights in respect of subsequent elections of directors,
subject to the revesting of such special class voting rights
in the event above specified in this paragraph.
(2) In the event of default entitling holders of
Noncumulative Shares to elect two directors as
specified in paragraph (1) of this Subsection, a
special meeting of such holders for the purpose of
electing such directors shall be called by the
Secretary of the Corporation upon written request of,
or may be called by, the holders of record of at
least 10% of the Noncumulative Shares upon which such
default in the payment of dividends exists and notice
thereof shall be given in the same manner as that
required for the annual meeting of shareholders;
provided, however, that the Corporation shall not be
required to call such special meeting if the annual
meeting of shareholders shall be called to be held
within 90 days after the date of receipt of the
foregoing written request from the holders of
Noncumulative Shares. At any meeting at which such
holders of Noncumulative Shares shall be entitled to
elect directors, holders of 50% of such Noncumulative
Shares, present in person or by proxy, shall be
sufficient to constitute a quorum, and the vote of
the holders of a majority of such shares so present
at any such meeting at which there shall be such a
quorum shall be sufficient to elect the members of
the Board of Directors which such holders of
Noncumulative Shares are entitled to elect as herein
provided. Notwithstanding any provision of these
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Amended and Restated Articles of Incorporation, as
amended, or the Code of Regulations of the
Corporation or any action taken by the holders of any
class of shares fixing the number of directors of the
Corporation, the two directors who may be elected by
such holders of Noncumulative Shares pursuant to this
Subsection shall serve in addition to any other
directors then in office or proposed to be elected
otherwise than pursuant to this Subsection. Nothing
in this Subsection shall prevent any change otherwise
permitted in the total number of or classifications
of directors of the Corporation nor require the
resignation of any director elected otherwise than
pursuant to this Subsection. Notwithstanding any
classification of the other directors of the
Corporation, the two directors elected by such
holders of Noncumulative Shares shall be elected
annually for terms expiring at the next succeeding
annual meeting of shareholders.
(3) Upon any divesting of the special class
voting rights of the holders of the Noncumulative
Shares in respect of elections of directors as
provided in this Subsection, the terms of office of
all directors then in office elected by such holders
shall terminate immediately thereupon. If the office
of any director elected by such holders voting as a
class becomes vacant by reason of death, resignation,
removal from office or otherwise, the remaining
director elected by such holders voting as a class
may elect a successor who shall hold office for the
unexpired term in respect of which such vacancy
occurred.
(c) If at any time when the holders of Noncumulative
Shares are entitled to elect directors pursuant to the
foregoing provisions of this Section the holders of any
Cumulative Shares, are entitled to elect directors pursuant
hereto by reason of any default in the payment of dividends
thereon, then the voting rights of the Cumulative Shares and
Noncumulative Shares then entitled to vote shall be combined
(with class of shares having a number of votes proportional to
the aggregate liquidation preference of its outstanding
shares). In such case, the holders of Noncumulative Shares and
of all such other shares then entitled so to vote, voting as a
class, shall elect such directors. If the holders of any such
other shares have elected such directors prior to the
happening of the default or event permitting the holders of
Noncumulative Shares to elect directors, or prior to a written
request for the holding of a special meeting being received by
the Secretary of the Corporation as required above, then a new
election shall be held with all such other shares and the
Noncumulative Shares voting together as a single class for
such directors, resulting in the termination of the term of
such previously elected directors upon the election of such
new directors.
(d) The affirmative vote of the holders of at least
two-thirds of the Noncumulative Shares at the time
outstanding, voting separately as a class, given in person or
by proxy either in writing or at a meeting called for the
purpose, shall be necessary to effect either of the following:
(1) Any amendment, alteration or repeal, whether
by merger, consolidation or otherwise, of any of the
provisions of the Amended and Restated Articles of
Incorporation, as amended, or of the Code of
Regulations of the Corporation which affects
adversely and materially the preferences or voting or
other rights of the holders of Noncumulative Shares
which are set forth in these Amended and Restated
Articles of Incorporation, as amended; provided,
however, neither the amendment of these Amended and
Restated Articles of Incorporation, as amended, so as
to authorize, create or change the authorized or
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outstanding number of Noncumulative Shares or of any
shares ranking on a parity with or junior to the
Noncumulative Shares nor the amendment of the
provisions of the Code of Regulations so as to change
the number or classification of directors of the
Corporation shall be deemed to affect adversely and
materially preferences or voting or other rights of
the holders of Noncumulative Shares; or
(2) The authorization, creation or increase in
the authorized number of any shares, or any security
convertible into shares, in either case ranking prior
to such Noncumulative Shares.
(e) In the event, and only to the extent, that (1)
Noncumulative Shares are issued in more than one series and
(2) Ohio law permits the holders of a series of a class of
capital stock to vote separately as a class, the affirmative
vote of the holders of at least two-thirds of each series of
the Noncumulative Shares at the time outstanding, voting
separately as a class, given in person or by proxy either in
writing or at a meeting called for the purpose of voting on
such matters, shall be required for any amendment, alteration
or repeal, whether by merger, consolidation or otherwise, of
any of the provisions of these Amended and Restated Articles
of Incorporation, as amended, or of the Code of Regulations of
the Corporation which affects adversely and materially the
preferences or voting or other rights of the holders of such
series which are set forth in these Amended and Restated
Articles of Incorporation, as amended; provided, however,
neither the amendment of these Amended and Restated Articles
of Incorporation, as amended, so as to authorize, create or
change the authorized or outstanding number of Noncumulative
Shares or of any shares remaining on a parity with or junior
to the Noncumulative Shares nor the amendment of the
provisions of the Code of Regulations so as to change the
number or classification of directors of the Corporation shall
be deemed to affect adversely and materially preferences or
voting or other rights of the holder of such series.
XIII. Definitions. For the purposes of this Division:
(a) Whenever reference is made to shares "ranking
prior to" Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares, Class F Shares, Class G
Shares, Class H Shares, Class I Shares, Class J Shares, Class
K Shares or Noncumulative Shares, such reference shall mean
and include all shares of the Corporation in respect of which
the rights of the holders thereof as to the payment of
dividends or as to distributions in the event of a voluntary
or involuntary liquidation, dissolution or winding up of the
affairs of the Corporation are given preference over the
rights of the holders of Class A Shares, Class B Shares, Class
C Shares, Class D Shares, Class E Shares, Class F Shares,
Class G Shares, Class H Shares, Class I Shares, Class J
Shares, Class K Shares or Noncumulative Shares, as the case
may be;
(b) Whenever reference is made to shares "on a parity
with" Class A Shares, Class B Shares, Class C Shares, Class D
Shares, Class E Shares, Class F Shares, Class G Shares, Class
H Shares, Class I Shares, Class J Shares, Class K Shares or
Noncumulative Shares, such reference shall mean and include
all shares of the Corporation in respect of which the rights
of the holders thereof as to the payment of dividends or as to
distributions in the event of a voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation rank equally (except as to the amounts fixed
therefor) with the rights of the holders of Class A Shares,
Class B Shares, Class C Shares, Class D
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Shares, Class E Shares, Class F Shares, Class G Shares, Class
H Shares, Class I Shares, Class J Shares, Class K Shares or
Noncumulative Shares, as the case may be; and
(c) Whenever reference is made to shares "ranking
junior to" Class A Shares, Class B Shares, Class C Shares,
Class D Shares, Class E Shares, Class F Shares, Class G
Shares, Class H Shares, Class I Shares, Class J Shares, Class
K Shares or Noncumulative Shares, such reference shall mean
and include all shares of the Corporation other than those
defined under Subsections (a) and (b) of this Section as
shares "ranking prior to" or "on a parity with" Class A
Shares, Class B Shares, Class C Shares, Class D Shares, Class
E Shares, Class F Shares, Class G Shares, Class H Shares,
Class I Shares, Class J Shares, Class K Shares or
Noncumulative Shares, as the case may be.
XIV. Restrictions on Transfer to Preserve Tax Benefit; Shares Subject
to Redemption.
(a) Definitions. For the purposes of this Item XIV of
this Division A of this Article FOURTH, the following terms
shall have the following meanings:
"Beneficial Ownership" shall mean ownership of
Preferred Shares by a Person who would be treated as an owner
of such Preferred Shares either directly or constructively
through the application of Section 544 of the Code, as
modified by Section 856(h) of the Code. The terms "Beneficial
Owner," "Beneficially Owns" and "Beneficially Owned" shall
have the correlative meanings.
"Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
"Constructive Ownership" shall mean ownership of
Preferred Shares by a Person who would be treated as an owner
of such Preferred Shares either directly or constructively
through the application of Section 318 of the Code, as
modified by Section 856(d)(5) of the Code. The terms
"Constructive Owner," "Constructively Owns" and
"Constructively Owned" shall have the correlative meanings.
"Excess Preferred Shares" shall mean any Preferred
Shares (i) acquired or proposed to be acquired by any Person
pursuant to a Transfer to the extent that, if effective, such
Transfer would result in the transferee either Beneficially
Owning Preferred Shares or Constructively Owning Preferred
Shares in excess of the Ownership Limit, or (ii) which are the
subject of a Transfer that, if effective, which would result
in the Corporation being "closely held" within the meaning of
Section 856(h) of the Code.
"Market Price" shall mean, with respect to any series
of any class of Preferred Shares, the last reported sales
price of such series reported on the New York Stock Exchange
on the trading day immediately preceding the relevant date or,
if shares of such series are not then traded on the New York
Stock Exchange, the last reported sales price of shares of
such series on the trading day immediately preceding the
relevant date as reported on any exchange or quotation system
over which the shares of such series may be traded, or if
shares of such series are not then traded over any exchange or
quotation system, then the market price of shares of such
series on the relevant date as determined in good faith by the
Board of Directors of the Corporation.
"Ownership Limit" shall mean, with respect to each
series of each class of Preferred Shares, 9.8% of the
outstanding shares of such series.
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"Person" shall mean an individual, corporation,
partnership, 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, an
association, a private foundation within the meaning of
Section 509(a) of the Code, a joint stock company, other
entity or a group as that term is used for purposes of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended;
provided, however, that a "person" does not mean an
underwriter which participates in a public offering of
Preferred Shares, for a period of 35 days following the
purchase by such underwriter of such Preferred Shares.
"Preferred Shares" shall mean, collectively, Class A
Shares, Class B Shares, Class C Shares, Class D Shares, Class
E Shares, Class F Shares, Class G Shares, Class H Shares,
Class I Shares, Class J Shares, Class K Shares and
Noncumulative Shares.
"REIT" shall mean a Real Estate Investment Trust
under Section 856 of the Code.
"Transfer" shall mean any sale, transfer, gift,
assignment, devise or other disposition of Preferred Shares
(including, without limitation, (i) the granting of any option
or entering into any agreement for the sale, transfer or other
disposition of Preferred Shares or (ii) the sale, transfer,
assignment or other disposition of any securities or rights
convertible into or exchangeable for Preferred Shares),
whether voluntary or involuntary, whether of record or
beneficially and whether by operation of law or otherwise.
(b) Restrictions on Transfers.
(i) Except as provided in Section (i) of
this Item XIV of this Division A of this Article
FOURTH, no Person shall Beneficially Own or
Constructively Own shares of any series of any class
of Preferred Shares in excess of the Ownership Limit
applicable to such series.
(ii) Except as provided in Section (i) of
this Item XIV of this Division A of this Article
FOURTH, any Transfer that, if effective, would result
in any Person Beneficially Owning shares of any
series of any class of Preferred Shares in excess of
the Ownership Limit applicable to such series shall
be void ab initio as to the Transfer of such
Preferred Shares which would be otherwise
Beneficially Owned by such Person in excess of such
Ownership Limit, and the intended transferee shall
acquire no rights in such Preferred Shares.
(iii) Except as provided in Section (i) of
this Item XIV of this Division A of this Article
FOURTH, any Transfer that, if effective, would result
in any Person Constructively Owning shares of any
series of any class of Preferred Shares in excess of
the Ownership Limit applicable to such series shall
be void ab initio as to the Transfer of such
Preferred Shares which would be otherwise
Constructively Owned by such Person in excess of such
amount, and the intended transferee shall acquire no
rights in such Preferred Shares.
(iv) Notwithstanding any other provisions
contained in this Item XIV, any Transfer (whether or
not such Transfer is the result of a transaction
entered into through the facilities of the New York
Stock Exchange) or other event that,
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if effective, would result in the Corporation being
"closely held" within the meaning of Section 856(h)
of the Code, or would otherwise result in the
Corporation failing to qualify as a REIT (including,
but not limited to, a Transfer or other event that
would result in the Corporation owning (directly or
Constructively) an interest in a tenant that is
described in Section 856(d)(2)(B) of the Code if the
income derived by the Corporation from such tenant
would cause the Corporation to fail to satisfy any of
the gross income requirement of Section 856(c) of the
Code) shall be void ab initio as to the Transfer of
the Preferred Shares or other event which would cause
the Corporation to be "closely held" within the
meaning of Section 856(h) of the Code or would
otherwise result in the Corporation failing to
qualify as a REIT; and the intended transferee or
owner or Constructive or Beneficial Owner shall
acquire or retain no rights in such Preferred Shares.
(v) For purposes of construing the foregoing
provisions, any attempt to transfer Preferred Shares
in violation of the Ownership Limit applicable to the
series of the class of such Preferred Shares (as such
Ownership Limit may be modified by the Board of
Directors pursuant to Section (h) of Item XIV) shall
be construed as causing such Preferred Shares to be
transferred by operation of law to the Corporation as
trustee of a trust for the exclusive benefit of the
person or persons to whom such Preferred Shares can
ultimately be transferred without violating the
Ownership Limit and any Excess Preferred Shares while
held in such trust shall not have any voting rights,
shall not be considered for purposes of any
shareholder vote or for determining a quorum for such
a vote, and shall not be entitled to any dividends or
other distributions.
(c) Remedies for Breach. If the Board of Directors or
its designees shall at any time determine in good faith that a
Transfer has taken place in violation of Section (b) of Item
XIV of this Division A of this Article FOURTH or that a Person
intends to acquire or has attempted to acquire beneficial
ownership (determined without reference to any rules of
attribution), Beneficial Ownership or Constructive Ownership
of any Preferred Shares of the Corporation in violation of
Section (b) of Item XIV of this Division A of this Article
FOURTH, or that any such Transfer, intended or attempted
acquisition or acquisition would jeopardize the status of the
Corporation as a REIT under the Code, the Board of Directors
or its designees shall take such actions as it deems advisable
to refuse to give effect or to prevent such Transfer,
including, but not limited to, refusing to give effect to such
Transfer on the books of the Corporation or instituting
proceedings to enjoin such Transfer and, in addition,
exercising its rights under Section (d) of Item XIV of this
Division A of Article FOURTH.
(d) Purchase Right in Excess Preferred Shares.
Beginning on the date of the occurrence of a Transfer which,
if consummated, in the good faith judgment of the Board of
Directors of the Corporation, could result in Excess Preferred
Shares the Excess Preferred Shares, subject to such transfer
shall be deemed to have been offered for sale to the
Corporation, or its designee, at a price per share equal to
the lesser of (i) the price per share in the transaction that
created such Excess Preferred Shares (or, in the case of a
devise or gift, the Market Price at the time of such devise or
gift) and (ii) the Market Price on the date the Corporation,
or its designee, accepts such offer. The Corporation shall
have the right to accept such offer for a period of 90 days
after the later of (i) the date of such Transfer and (ii) if
the Corporation does not receive a notice of such Transfer
pursuant to Section (e) of Item XIV of this Division A of this
Article FOURTH, the date
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the Board of Directors determines in good faith that such
Transfer has occurred. Prompt payment of the purchase price
shall be made in such reasonable manner as may be determined
by the Corporation. From and after the date fixed for purchase
by the Corporation, and so long as payment of the purchase
price for the Excess Preferred Shares to be so purchased shall
have been made or duly provided for, the holder of any Excess
Preferred Shares so called for purchase shall cease to be
entitled to dividends, distributions, voting rights and other
benefits with respect to such Excess Preferred Shares,
excepting only the right to payment of the purchase price
fixed as aforesaid. Any dividend or distribution paid to a
proposed transferee of Excess Preferred Shares prior to the
discovery by the Corporation that the Excess Preferred Shares
have been transferred in violation of Section (b) of Item XIV
of this Division A of this Article FOURTH shall be repaid to
the Corporation upon demand. If the foregoing provisions are
determined to be void or invalid by virtue of any legal
decision, statute, rule or regulation, then the intended
transferee of such Excess Preferred Shares shall be deemed, at
the option of the Corporation, to have acted as agent on
behalf of the Corporation in acquiring such Excess Preferred
Shares and to hold such Excess Preferred Shares on behalf of
the Corporation.
(e) Notice of Restricted Transfer. Any Person who
acquires or attempts to acquire Preferred Shares or other
securities in violation of subparagraph (b) of this Item XIV,
or any Person who owns or will own Excess Preferred Shares as
a result of an event under subparagraph (b) of this Item XIV,
shall immediately give written notice to the Corporation of
such event and shall provide to the Corporation such other
information as the Corporation may request in order to
determine the effect, if any, of such Transfer or attempted
Transfer or other event on the Corporation's status as a REIT.
(f) Owners Required to Provide Information. From and
after the date of the Initial Public Offering:
(i) every Beneficial Owner of more than 5.0%
(or such other percentage, between 0.5% and 5.0%, as
provided in the regulations promulgated pursuant to
the Code) of the outstanding Preferred Shares of the
Corporation shall, within 30 days after January 1 of
each year, give written notice to the Corporation
stating the name and address of such Beneficial
Owner, the number of shares Beneficially Owned, and
description of how such shares are held. Each such
Beneficial Owner shall provide to the Corporation
such additional information as the Corporation may
request in order to determine the effect, if any, of
such Beneficial Ownership on the Corporation's status
as a REIT.
(ii) each Person who is a Beneficial Owner
or Constructive Owner of Preferred Shares and each
Person (including the shareholder of record) who is
holding Preferred Shares for a Beneficial Owner or
Constructive Owner shall provide to the Corporation
such information that the Corporation may request, in
good faith, in order to determine the Corporation's
status as a REIT.
(g) Remedies Not Limited. Nothing contained in this
Division A of this Article FOURTH shall limit the authority of
the Board of Directors to take such other action as it deems
necessary or advisable to protect the Corporation and the
interests of its shareholders by preservation of the
Corporation's status as a REIT.
(h) Ambiguity. In the case of an ambiguity in the
application of any of the provisions of Item XIV of this
Division A of this Article FOURTH, including any
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definition contained in Section (a) of Item XIV, the Board of
Directors shall have the power to determine the application of
the provisions of this Item XIV with respect to any situation
based on the facts known to it.
(i) Exceptions.
(i) Subject to Section (b)(iv) of this Item
XIV of this Division A, the Board of Directors may
exempt a Person from the Ownership Limit applicable
to a series of a class of Preferred Shares if such
Person is not an individual (other than pension plans
described in Section 856(h)(3)) for purposes of
Section 542(a)(2) of the Code if the Board of
Directors obtains such representations and
undertakings from such Person as are reasonably
necessary to ascertain that no individual's
Beneficial Ownership of such Preferred Shares will
violate the Ownership Limit, and agrees that any
violation or attempted violation will result in such
Preferred Shares in excess of the Ownership Limit
being subject to repurchase by the Corporation as set
forth in Section (d) of Item XIV of this Division A
of this Article FOURTH.
(ii) The Board of Directors may exempt a
Person from the limitation on such Person
Constructively Owning Preferred Shares in excess of
the Ownership Limit applicable to a series of a class
of such Preferred Shares if such Person does not own
and represents that it will not own, directly or
constructively (by virtue of the application of
Section 318 of the Code, as modified by Section
856(d)(5) of the Code), more than a 9.8% interest (as
set forth in Section 856(d)(2)(B)) in a tenant of any
real property owned or leased by the Corporation, if
the Board of Directors obtains such representations
and undertakings from such Person as are reasonably
necessary to ascertain this fact and agrees that any
violation or attempted violation will result in such
Preferred Shares in excess of the Ownership Limit
being deemed to be Excess Preferred Shares and
subject to repurchase by the Corporation as set forth
in Section (d) of Item XIV of this Division A of this
Article FOURTH.
XV. Legend. Each certificate for Preferred Shares shall bear the
following legend:
"The Preferred Shares represented by this certificate are subject to
restrictions on transfer for the purpose of the corporation's maintenance of its
status as a Real Estate Investment Trust under the Internal Revenue Code of
1986, as amended. Subject to certain provisions of the Corporation's Articles of
Incorporation, no Person may Beneficially Own or Constructively Own shares of
any series of any class of Preferred Shares in excess of 9.8% of the outstanding
Preferred Shares of such series. Any Person who attempts to Beneficially Own or
Constructively Own shares of any series of any class of Preferred Shares in
excess of the above limitations must immediately notify the Corporation. All
capitalized terms in this legend have the meanings defined in the Corporation's
Articles of Incorporation, a copy of which, including the restrictions on
transfer, will be sent without charge to each shareholder who so requests. If
the restrictions on transfer are violated, certain of the Preferred Shares
represented hereby may be subject to repurchase by the Corporation on the terms
and conditions set forth in the Corporation's Articles of Incorporation.
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DIVISION B
Subject to the terms of the Cumulative Shares and the Noncumulative
Preferred Shares, the Common Shares shall have the following express terms:
Section 1. Dividend Rights. The holders of Common Shares shall be
entitled to receive, when, as and if declared by the Board of Directors of the
Corporation, out of the assets of the Corporation which are by law available
therefor, dividends or distributions payable in cash, in property or in
securities of the Corporation.
Section 2. Rights Upon Liquidation. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of, or any distribution of
the assets of, the Corporation, each holder of Common Shares shall be entitled
to receive, ratably with each other holder of Common Shares, that portion of the
assets of the Corporation available for distribution to its shareholders as the
number of Common Shares held by such holder bears to the total number of Common
Shares then outstanding.
Section 3. Voting Rights. The holders of Common Shares shall be
entitled to vote on all matters (for which holders of Common Shares shall be
entitled to vote thereon) at all meetings of the shareholders of the
Corporation, and shall be entitled to one vote for each Common Share entitled to
vote at such meeting.
Section 4. Restrictions on Transfer to Preserve Tax Benefit; Common
Shares Subject to Redemption.
(a) Definitions. For the purposes of this Section 4
of this Division B of this Article FOURTH, the following terms
shall have the following meanings:
"Beneficial Ownership" shall mean ownership of Common
Shares by a Person who would be treated as an owner of such
Common Shares either directly or constructively 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 the
correlative meanings.
"Code" shall mean the Internal Revenue Code of 1986,
as amended from time to time.
"Constructive Ownership" shall mean ownership of
Common Shares by a Person who would be treated as an owner of
such Common Shares either directly or Constructively through
the application of Section 318 of the Code, as modified by
Section 856(d)(5) of the Code. The terms "Constructive Owner,"
"Constructively Owns" and "Constructively Owned" shall have
the correlative meanings.
"Excess Shares" shall mean any Common Shares (i)
acquired or proposed to be acquired by any Person (other than
an Existing Holder) pursuant to a Transfer to the extent that,
if effective, such Transfer would result in the transferee
either (A) Beneficially Owning Common Shares in excess of the
Ownership Limit or (B) Constructively Owning Common Shares in
excess of the Related Party Limit, (ii) acquired or proposed
to be acquired by an Existing Holder pursuant to a Transfer to
the extent that, if effective, such Transfer would result in
such Existing Holder Beneficially Owning Common Shares in
excess of the Existing Holder Limit for such Existing Holder,
or (iii) which are the subject of a Transfer that, if
effective, which would result in (A) the
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Common Shares being owned by fewer than 100 Persons
(determined without reference to any rules of attribution), or
(B) the Corporation being "closely held" within the meaning of
Section 856(h) of the Code.
"Existing Holder" shall mean (i) Bert L. Wolstein,
(ii) Scott A. Wolstein, (iii) James A. Schoff, and (iv) any
Person to whom an Existing Holder Transfers Beneficial
Ownership of Common Shares causing such transferee to
Beneficially Own Common Shares in excess of the Ownership
Limit.
"Existing Holder Limit" (i) for any Existing Holder
who is an Existing Holder by virtue of clause (i), (ii) or
(iii) of the definition thereof, shall mean, initially, the
percentage of the outstanding Common Shares Beneficially Owned
by such Existing Holder upon the consummation of the Initial
Public Offering, and after any adjustment pursuant to Section
(4)(i) of this Division B of this Article FOURTH, shall mean
such percentage of the outstanding Common Shares as so
adjusted; and (ii) for any Existing Holder who becomes an
Existing Holder by virtue of clause (iv) of the definition
thereof, shall mean, initially, the percentage of the
outstanding Common Shares Beneficially Owned by such Existing
Holder at the time that such Existing Holder becomes an
Existing Holder, and after any adjustment pursuant to Section
4(i) of this Division B of this Article FOURTH, shall mean
such percentage of the outstanding Common Shares as so
adjusted. From and after the date of the Initial Public
Offering, the secretary of the Corporation shall maintain and,
upon request, make available to each Existing Holder, a
schedule which sets forth the then current Existing Holder
Limits for each Existing Holder.
"Initial Public Offering" means the sale of Common
Shares pursuant to the Corporation's first effective
registration statement for such Common Shares filed under the
Securities Act of 1933, as amended.
"Market Price" shall mean the last reported sales
price of Common Shares reported on the New York Stock Exchange
on the trading day immediately preceding the relevant date or,
if the Common Shares are not then traded on the New York Stock
Exchange, the last reported sales price of the Common Shares
on the trading day immediately preceding the relevant date as
reported on any exchange or quotation system over which the
Common Shares may be traded, or if the Common Shares are not
then traded over any exchange or quotation system, then the
market price of the Common Shares on the relevant date as
determined in good faith by the Board of Directors of the
Corporation.
"Ownership Limit" shall mean 5.0% of the outstanding
Common Shares of the Corporation.
"Person" shall mean an individual, corporation,
partnership, 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, an
association, a private foundation within the meaning of
Section 509(a) of the Code, a joint stock company, other
entity or a group as that term is used for purposes of Section
13(d)(3) of the Securities Exchange Act of 1934, as amended;
provided, however, that a "Person" does not mean an
underwriter which participates in a public offering of the
Common Shares, for a period of 35 days following the purchase
by such underwriter of the Common Shares.
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"REIT" shall mean a Real Estate Investment Trust
under Section 856 of the Code.
"Related Party Limit" shall mean 9.8% of the
outstanding Common Shares of the Corporation.
"Transfer" shall mean any sale, transfer, gift,
assignment, devise or other disposition of Common Shares
(including, without limitation, (i) the granting of any option
or entering into any agreement for the sale, transfer or other
disposition of Common Shares or (ii) the sale, transfer,
assignment or other disposition of any securities or rights
convertible into or exchangeable for Common Shares), whether
voluntary or involuntary, whether of record or beneficially
and whether by operation of law or otherwise.
(b) Restrictions on Transfers.
(i) Except as provided in Section 4(i) of
this Division B of this Article FOURTH, from and
after the date of the Initial Public Offering, no
Person (other than an Existing Holder) shall
Beneficially Own Common Shares in excess of the
Ownership Limit and no Existing Holder shall
Beneficially Own Common Shares in excess of the
Existing Holder Limit for such Existing Holder.
(ii) Except as provided in Section 4(i) of
this Division B of this Article FOURTH, from and
after the date of the Initial Public Offering, any
Transfer that, if effective, would result in any
Person (other than an Existing Holder) Beneficially
Owning Common Shares in excess of the Ownership Limit
shall be void ab initio as to the Transfer of such
Common Shares which would be otherwise Beneficially
Owned by such Person in excess of the Ownership
Limit, and the intended transferee shall acquire no
rights in such Common Shares.
(iii) Except as provided in Section 4(i) of
this Division B of this Article FOURTH, from and
after the date of the Initial Public Offering, any
Transfer that, if effective, would result in any
Existing Holder Beneficially Owning Common Shares in
excess of the applicable Existing Holder Limit shall
be void ab initio as to the Transfer of such Common
Shares which would be otherwise Beneficially Owned by
such Existing Holder in excess of the applicable
Existing Holder Limit, and such Existing Holder shall
acquire no rights in such Common Shares.
(iv) Except as provided in Section 4(i) of
this Division B of this Article FOURTH, from and
after the date of the Initial Public Offering, any
Transfer that, if effective, would result in any
Person Constructively Owning Common Shares in excess
of the Related Party Limit shall be void ab initio as
to the Transfer of such Common Shares which would be
otherwise Constructively Owned by such Person in
excess of such amount, and the intended transferee
shall acquire no rights in such Common Shares.
(v) Except as provided in Section 4(i) of
this Division B of this Article FOURTH, from and
after the date of the Initial Public Offering, any
Transfer that, if effective, would result in the
Common Shares being beneficially owned by less than
100 Persons (determined without reference to any
rules of
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attribution) shall be void ab initio as to the
Transfer of such Common Shares which would be
otherwise beneficially owned by the transferee, and
the intended transferee shall acquire no rights in
such Common Shares.
(vi) From and after the date of the Initial
Public Offering, any Transfer that, if effective,
would result in the Corporation being "closely held"
within the meaning of Section 856(h) of the Code
shall be void ab initio as to the Transfer of the
Common Shares which would cause the Corporation to be
"closely held" within the meaning of Section 856(h)
of the Code, and the intended transferee shall
acquire no rights in such Common Shares.
(c) Remedies for Breach. If the Board of Directors or
its designees shall at any time determine in good faith that a
Transfer has taken place in violation of Section 4(b) of this
Division B of this Article FOURTH or that a Person intends to
acquire or has attempted to acquire beneficial ownership
(determined without reference to any rules of attribution),
Beneficial Ownership or Constructive Ownership of any Common
Shares of the Corporation in violation of Section 4(b) of this
Division B of this Article FOURTH, or that any such Transfer,
intended or attempted acquisition or acquisition would
jeopardize the status of the Corporation as a REIT under the
Code, the Board of Directors or its designees shall take such
actions as it deems advisable to refuse to give effect or to
prevent such Transfer, including, but not limited to, refusing
to give effect to such Transfer on the books of the
Corporation or instituting proceedings to enjoin such Transfer
and, in addition, exercising its rights under Section 4(d) of
this Division B of this Article FOURTH.
(d) Purchase Right in Excess Shares. Beginning on the
date of the occurrence of a Transfer which, if consummated, in
the good faith judgment of the Board of Directors of the
Corporation, could result in Excess Shares, such Excess Shares
shall be deemed to have been offered for sale to the
Corporation, or its designee, at a price per share equal to
the lesser of (i) the price per share in the transaction that
created such Excess Shares (or, in the case of a devise or
gift, the Market Price at the time of such devise or gift) and
(ii) the Market Price on the date the Corporation, or its
designee, accepts such offer. The Corporation shall have the
right to accept such offer for a period of ninety days after
the later of (i) the date of such Transfer and (ii) if the
Corporation does not receive a notice of such Transfer
pursuant to Section 4(e) of this Division B of this Article
FOURTH, the date the Board of Directors determines in good
faith that such Transfer has occurred. Prompt payment of the
purchase price shall be made in such reasonable manner as may
be determined by the Corporation. From and after the date
fixed for purchase by the Corporation, and so long as payment
of the purchase price for the Excess Shares to be so purchased
shall have been made or duly provided for, the holder of any
Excess Shares so called for purchase shall cease to be
entitled to dividends, distributions, voting rights and other
benefits with respect to such Excess Shares, excepting only
the right to payment of the purchase price fixed as aforesaid.
Any dividend or distribution paid to a proposed transferee of
Excess Shares prior to the discovery by the Corporation that
the Excess Shares have been transferred in violation of
Section 4(b) of this Division B of this Article FOURTH shall
be repaid to the Corporation upon demand. If the foregoing
provisions are determined to be void or invalid by virtue of
any legal decision, statute, rule or regulation, then the
intended transferee of such Excess Shares shall be deemed, at
the option of the Corporation, to have acted as agent on
behalf of the Corporation in acquiring such Excess Shares and
to hold such Excess Shares on behalf of the Corporation.
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(e) Notice of Restricted Transfer. Any Person who
acquires or intends to acquire shares in violation of Section
4(b) of this Division B of this Article FOURTH or any Person
who is a transferee of Excess Shares shall immediately give
written notice to the Corporation of such event and shall
provide to the Corporation such other information as the
Corporation may request in order to determine the effect, if
any, of such Transfer or intended Transfer on the
Corporation's status as a REIT.
(f) Owners Required to Provide Information. From and
after the date of the Initial Public Offering:
(i) every Beneficial Owner of more than 5.0%
(or such other percentage, between 0.5% and 5.0%, as
provided in the regulations promulgated pursuant to
the Code) of the outstanding Common Shares of the
Corporation shall, within 30 days after January 1 of
each year, give written notice to the Corporation
stating the name and address of such Beneficial
Owner, the number of shares Beneficially Owned, and
description of how such shares are held. Each such
Beneficial Owner shall provide to the Corporation
such additional information as the Corporation may
request in order to determine the effect, if any, of
such Beneficial Ownership on the Corporation's status
as a REIT.
(ii) each Person who is a Beneficial Owner
or Constructive Owner of Common Shares and each
Person (including the shareholder of record) who is
holding Common Shares for a Beneficial Owner or
Constructive Owner shall provide to the Corporation
such information that the Corporation may request, in
good faith, in order to determine the Corporation's
status as a REIT.
(g) Remedies Not Limited. Nothing contained in this
Division B of this Article FOURTH shall limit the authority of
the Board of Directors to take such other action as it deems
necessary or advisable to protect the Corporation and the
interests of its shareholders by preservation of the
Corporation's status as a REIT.
(h) Ambiguity. In the case of an ambiguity in the
application of any of the provisions of Section 4 of this
Division B of this Article FOURTH, including any definition
contained in Section 4(a), the Board of Directors shall have
the power to determine the application of the provisions of
this Section 4 with respect to any situation based on the
facts known to it.
(i) Modification of Existing Holder Limits. Subject
to the provisions of Section 4(k) of this Division B, the
Existing Holder Limits may be modified as follows:
(i) Subject to the limitations provided in
Section 4(k), any Existing Holder may Transfer Common
Shares to a Person who is already an Existing Holder
up to the number of Common Shares Beneficially Owned
by such transferor Existing Holder in excess of the
Ownership Limit. Any such Transfer will decrease the
Existing Holder Limit for such transferor Existing
Holder and increase the Existing Holder Limit for
such transferee Existing Holder by the percentage of
the outstanding Common Shares so Transferred. The
transferor Existing Holder shall give the Board of
Directors of the Corporation prior written notice of
any such Transfer.
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(ii) Any grant of a stock option pursuant to
a stock option plan approved by the shareholders of
the Corporation shall increase the Existing Holder
Limit for the affected Existing Holder to the maximum
extent possible under Section 4(k) to permit the
Beneficial Ownership of the Common Shares issuable
upon the exercise of such stock option.
(iii) The Board of Directors may reduce the
Existing Holder Limit for any Existing Holder, with
the written consent of such Existing Holder, after
any Transfer permitted in this Section 4 by such
Existing Holder to a Person other than an Existing
Holder or after the lapse (without exercise) of a
stock option described in Section 4(i)(ii).
(iv) Any Common Shares issued to an Existing
Holder pursuant to a dividend reinvestment plan
adopted by the Corporation shall increase the
Existing Holder Limit for the Existing Holder to the
maximum extent possible under Section 4(k) to permit
the Beneficial Ownership of such Common Shares.
(j) Modification of Ownership Limit. Subject to the
limitations provided in Section 4(k) of this Division B, the
Board of Directors may from time to time increase the
Ownership Limit.
(k) Limitations on Modifications. Notwithstanding any
other provision of this Division B of this Article FOURTH:
(i) Neither the Ownership Limit nor any
Existing Holder Limit may be increased (nor may any
additional Existing Holder Limit be created) if,
after giving effect to such increase (or creation),
five Beneficial Owners of Common Shares (including
all of the then Existing Holders) could Beneficially
Own, in the aggregate, more than 49.6% of the
outstanding Common Shares.
(ii) Prior to the modification of any
Existing Holder Limit or Ownership Limit pursuant to
Section 4(i) or Section 4(j) of this Division B of
this Article FOURTH, the Board of Directors of the
Corporation may require such opinions of counsel,
affidavits, undertakings or agreements as it may deem
necessary or advisable in order to determine or
ensure the Corporation's status as a REIT.
(iii) No Existing Holder Limit shall be
reduced to a percentage which is less than the
Ownership Limit.
(iv) The Ownership Limit may not be
increased to a percentage which is greater than 9.8%.
(v) The Related Party Limit may not be
increased to a percentage which is greater than 9.8%.
(l) Exceptions.
(i) The Board of Directors, with a ruling
from the Internal Revenue Service or an opinion of
counsel, may exempt a Person from the Ownership
Limits or the Existing Holder Limits, as the case may
be, if such Person is not an individual for purposes
of Section 542(a)(2) of the Code and the Board of
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Directors obtains such representations and
undertakings from such Person as are reasonably
necessary to ascertain that no individual's
Beneficial Ownership of such Common Shares will
violate the Ownership Limit or the applicable
Existing Holder Limit, as the case may be, and agrees
that any violation or attempted violation will result
in such Common Shares in excess of 5.0% of the
outstanding Common Shares being deemed to be Excess
Shares and subject to repurchase by the Corporation
as set forth in Section 4(d) of this Division B of
this Article FOURTH.
(ii) The Board of Directors, with a ruling
from the Internal Revenue Service or an opinion of
counsel, may exempt a Person from the limitation on
such Person Constructively Owning Common Shares in
excess of the Related Party Limit if such Person does
not own and represents that it will not own, directly
or constructively (by virtue of the application of
Section 318 of the Code, as modified by Section
856(d)(5) of the Code), more than a 9.9% interest (as
set forth in Section 856(d)(2)(B) in a tenant of any
real property owned or leased by the Corporation, and
the Corporation obtains such representations and
undertakings from such Person as are reasonably
necessary to ascertain this fact and agrees that any
violation or attempted violation will result in such
Common Shares in excess of 9.8% being deemed to be
Excess Shares and subject to repurchase by the
Corporation as set forth in Section 4(d) of this
Division B of this Article FOURTH.
Section 5. Legend. Each certificate for Common Shares shall bear the
following legend:
"The Common Shares represented by this certificate are subject to
restrictions on transfer for the purpose of the Corporation's maintenance of its
status as a Real Estate Investment Trust under the Internal Revenue Code of
1986, as amended. Subject to certain provisions of the Corporation's Articles of
Incorporation, no Person may Beneficially Own Common Shares in excess of 5.0% of
the outstanding Common Shares of the Corporation (unless such Person is an
Existing Holder) and no Person (other than an Existing Holder who Constructively
Owns in excess of 9.8% of the Common Shares immediately following the
consummation of the Initial Public Offering) may Constructively Own Common
Shares in excess of 9.8% of the outstanding Common Shares of the Corporation.
Any Person who attempts to Beneficially Own or Constructively Own Common Shares
in excess of the above limitations must immediately notify the Corporation. All
capitalized items in this legend have the meanings defined in the Corporation's
Articles of Incorporation, a copy of which, including the restrictions on
transfer, will be sent without charge to each shareholder who so requests. If
the restrictions on transfer are violated, certain of the Common Shares
represented may be subject to repurchase by the Corporation on the terms and
conditions set forth in the Corporation's Articles of Incorporation."
Section 6. Securities Exchange Transactions. Notwithstanding any
provision contained herein to the contrary, nothing in these Amended and
Restated Articles of Incorporation shall preclude the settlement of any
transaction entered into through the facilities of the New York Stock Exchange.
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CERTIFICATE OF AMENDMENT
TO THE
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
DEVELOPERS DIVERSIFIED REALTY CORPORATION
Scott A. Wolstein, Chairman of the Board of Directors and
Chief Executive Officer, and Joan U. Allgood, Secretary, of Developers
Diversified Realty Corporation, an Ohio corporation (the "Company"), do hereby
certify that at a meeting of the Board of Directors of the Company held on May
26, 1999, the following resolution to amend the Amended and Restated Articles of
Incorporation, as amended, of the Company was adopted pursuant to the authority
granted by Section 1701.70(B)(1) of the Ohio Revised Code:
RESOLVED, that the Amended and Restated Articles of
Incorporation, as amended, of the Company be, and they hereby are, amended by
adding at the end of Division A-V of Article FOURTH a new Section 6 that reads
as follows:
SECTION 6. CLASS E SERIES I CUMULATIVE PREFERRED SHARES.
(a) DESIGNATION AND AMOUNT. Of the 750,000 authorized Class E
Cumulative Preferred Shares, without par value, 750,000 are designated as a
series designated as "Class E Series I Cumulative Preferred Shares" (the "Series
I Preferred Shares"). The Series I Preferred Shares have the express terms set
forth in this Division as being applicable to all Preferred Shares as a class
and, in addition, the following express terms applicable to all Series I
Preferred Shares as a series of Preferred Shares. The number of Series I
Preferred Shares may be increased or decreased by resolution of the Board of
Directors and by the filing of a certificate of amendment pursuant to the
provisions of the General Corporation Law of the State of Ohio stating that such
increase or reduction has been so authorized; however, no decrease shall reduce
the number of Series I Preferred Shares to a number less than that of the Series
I Preferred Shares then outstanding plus the number of Series I Preferred Shares
issuable upon exercise of outstanding rights, options or warrants or upon
conversion of outstanding securities issued by the Company.
(b) DIVIDENDS AND DISTRIBUTIONS.
(1)(i) Subject to the rights of the holders of any series of
preferred shares (or any similar shares) ranking prior to the Series I
Preferred Shares with respect to dividends, the holders of Series I
Preferred Shares, in preference to the holders of Common Shares and of
any other junior shares, will be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the fifteenth day
of March, June, September and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a Series I Preferred Share or fraction thereof, in an
amount per share (rounded to the nearest cent) equal to the greater of
(a) $10.00 or (b) subject to the provisions for
<PAGE> 171
adjustment hereinafter set forth, 10,000 times the aggregate per share
amount of all cash dividends, and 10,000 times the aggregate per share
amount (payable in kind) of all noncash dividends or other
distributions other than a dividend payable in Common Shares or a
subdivision of the outstanding Common Shares (by reclassification or
otherwise), declared on the Common Shares after the immediately
preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, after the first issuance of any
Series I Preferred Share or fraction thereof. The multiple of cash and
noncash dividends declared on the Common Shares to which holders of the
Series I Preferred Shares are entitled, which is 10,000 initially but
which will be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Dividend Multiple." If the Company at
any time after May 26, 1999 (the "Rights Declaration Date"): (i)
declares or pays any dividend on the Common Shares payable in Common
Shares, or (ii) effects a subdivision or combination or consolidation
of the outstanding Common Shares (by reclassification or otherwise than
by payment of a dividend in Common Shares) into a greater or lesser
number of Common Shares, then in each such case the Dividend Multiple
thereafter applicable to the determination of the amount of dividends
that holders of Series I Preferred Shares are entitled to receive will
be the Dividend Multiple applicable immediately prior to that event
multiplied by a fraction, the numerator of which is the number of
Common Shares outstanding immediately after that event and the
denominator of which is the number of Common Shares that were
outstanding immediately prior to that event.
(ii) Notwithstanding anything else contained in this paragraph
(1), the Company shall, out of funds legally available for that
purpose, declare a dividend or distribution on the Series I Preferred
Shares as provided in this paragraph (1) immediately after it declares
a dividend or distribution on the Common Shares (other than a dividend
payable in Common Shares); but if no dividend or distribution has been
declared on the Common Shares during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $10.00 per share on the Series I Preferred
Shares shall nevertheless accrue on such subsequent Quarterly Dividend
Payment Date.
(2) Dividends will begin to accrue and be cumulative on
outstanding Series I Preferred Shares from the Quarterly Dividend Payment Date
next preceding the date of issue of such Series I Preferred Shares, unless the
date of issue of such shares is prior to the record date for the first Quarterly
Dividend Payment Date, in which case dividends on such shares will begin to
accrue from the date of issue of such shares, or unless the date of issue is a
Quarterly Dividend Payment Date or is a date after the record date for the
determination of holders of Series I Preferred Shares entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends will begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends will not bear
interest. Dividends paid on the Series I Preferred Shares in an amount less than
the total amount of such dividends at the time accrued and payable on such
shares will be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix in accordance
with applicable law a record date for the determination of holders of Series I
Preferred Shares entitled to receive payment of a dividend or distribution
declared thereon,
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<PAGE> 172
which record date will be not more than such number of days prior to the date
fixed for the payment thereof as may be allowed by applicable law.
(c) REACQUIRED SHARES. Any Series I Preferred Shares purchased
or otherwise acquired by the Company in any manner whatsoever will be retired
and canceled promptly after the acquisition thereof. All such shares will upon
their cancellation become authorized but unissued preferred shares and may be
reissued as part of a new series of Preferred Shares to be created by resolution
or resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
(d) LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the Company,
no distribution may be made (x) to the holders of shares ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the Series I
Preferred Shares unless, prior thereto, the holders of Series I Preferred Shares
shall have received an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment,
plus an amount equal to the greater of (1) $10,000.00 per share or (2) an
aggregate amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 10,000 times the aggregate amount to be distributed per
share to holders of Common Shares, or (y) to the holders of shares ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series I Preferred Shares, except distributions made ratably on the
Series I Preferred Shares and all other such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. If the Company at any time after the
Rights Declaration Date (i) declares or pays any dividend on Common Shares
payable in Common Shares, or (ii) effects a subdivision or combination or
consolidation of the outstanding Common Shares (by reclassification or otherwise
than by payment of a dividend in Common Shares) into a greater or lesser number
of Common Shares, then in each such case the aggregate amount per share to which
holders of Series I Preferred Shares were entitled immediately prior to such
event under clause (x) of the preceding sentence will be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of Common Shares
outstanding immediately after such event and the denominator of which is the
number of Common Shares that were outstanding immediately prior to such event.
Neither the consolidation of nor merging of the Company with
or into any other corporation or corporations, nor the sale or other transfer of
all or substantially all of the assets of the Company, will be considered to be
a liquidation, dissolution or winding up of the Company within the meaning of
this paragraph (d).
(e) CONSOLIDATION, MERGER, ETC. If the Company shall enter
into any consolidation, merger, combination or other transaction in which the
Common Shares are exchanged for or changed into other shares, stock or
securities, cash or any other property, then in any such case the Series I
Preferred Shares will at the same time be similarly exchanged or changed in an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 10,000 times the aggregate amount of shares, stock, securities, or
other property, as the case may be, into which or for which each Common Share is
changed or exchanged, plus accrued and unpaid dividends, if any, payable with
respect to the Series I Preferred Shares. If the
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Company at any time after the Rights Declaration Date (i) declares or pays any
dividend on Common Shares payable in Common Shares, or (ii) effects a
subdivision or combination or consolidation of the outstanding Common Shares (by
reclassification or otherwise than by payment of a dividend in Common Shares)
into a greater or lesser number of Common Shares, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or
change of Series I Preferred Shares will be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of Common Shares outstanding
immediately after such event and the denominator of which is the number of
Common Shares that were outstanding immediately prior to such event.
(f) REDEMPTION. The Series I Preferred Shares are not
redeemable, but the foregoing does not limit the ability of the Company to
purchase or otherwise deal in the Series I Preferred Shares to the extent
otherwise permitted hereby and by law.
(g) AMENDMENT. The Amended and Restated Articles of
Incorporation of the Company, as amended, may not be amended in any manner that
would materially alter or change the powers, preferences or special rights of
the Series I Preferred Shares so as to affect them adversely without the
affirmative vote of the holders of at least two-thirds of the outstanding Series
I Preferred Shares, voting separately as a class.
(h) FRACTIONAL SHARES. SERIES I Preferred Shares may be issued
in whole shares or in any fraction of a share that is one ten-thousandth
(1/10,000th) of a share or any integral multiple of such fraction, which will
entitle the holder, in proportion to such holder's fractional shares, to
exercise voting rights, receive dividends, participate in distributions and have
the benefit of all other rights of holders of Series I Preferred Shares. In lieu
of fractional shares, the Company may elect to make a cash payment as provided
in that certain Rights Agreement dated as of May 26, 1999, between the Company
and National City Bank, a national banking association, as rights agent, for
fractions of a share smaller than one ten-thousandth (1/10,000th) of a share or
any integral multiple thereof.
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IN WITNESS WHEREOF, we have executed this instrument in one or
more counterparts as of May 31, 1999.
DEVELOPERS DIVERSIFIED REALTY
CORPORATION, an Ohio corporation
/s/ Scott A. Wolstein
Scott A. Wolstein, Chairman of the Board
of Directors and Chief Executive Officer
/s/ Joan U. Allgood
Joan U. Allgood, Secretary
<PAGE> 1
Exhibit 10.1
EMPLOYMENT AGREEMENT
BETWEEN
DEVELOPERS DIVERSIFIED REALTY CORPORATION
AND
SCOTT A. WOLSTEIN
<PAGE> 2
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT is entered into as of the 2nd day of
April 1999, between Developers Diversified Realty Corporation, an Ohio
corporation ("the Company"), and Scott A. Wolstein (the "Executive").
W I T N E S S E T H :
---------------------
WHEREAS, the Company desires to employ the Executive, and the
Executive desires to be employed by the Company, on the terms and subject to the
conditions set forth herein;
WHEREAS, the Company and the Executive desire for this
Agreement to amend and supercede the Employment Agreement, dated as of January
1, 1993, between the Company and the Executive;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:
1. EMPLOYMENT.
(a) The Company hereby employs the Executive as its
Chief Executive Officer and the Executive hereby accepts such employment, on the
terms and subject to the conditions hereinafter set forth.
(b) During the term of this Employment Agreement and
any renewal hereof (all references herein to the term of this Employment
Agreement shall include references to the period of renewal hereof, if any), the
Executive shall be and have the title of Chief Executive Officer and shall
devote substantially all of his business time and all reasonable efforts to his
employment and perform diligently such duties as are customarily performed by
Chief Executive Officers of companies similar in size to the Company, together
with such other duties as may be reasonably requested from time to time by the
Board of Directors of the Company (the "Board"), which duties shall be
consistent with his positions as set forth above and as provided in Paragraph 2.
2. TERM AND POSITIONS.
(a) Subject to the provisions for renewal and
termination hereinafter provided, (i) the term of this Employment Agreement
shall begin on the date hereof and shall continue for the current "fiscal year"
(as hereinafter defined) and for the succeeding two fiscal years and (ii) as of
December 31, 2001, and the first day of each succeeding fiscal year thereafter,
such term automatically shall be extended for one (1) additional fiscal year,
beginning with the fiscal year commencing January 1, 2002, and continuing
thereafter. This Employment Agreement may be terminated at any time as provided
in Paragraph 5 or by either the Company or the Executive upon one fiscal year's
prior written notice of termination of this Employment Agreement given to the
other at least thirty (30) days before January 1, 2000, or the beginning of any
such succeeding fiscal year (for example, unless such written notice of
termination is given on or prior to December 2, 1999, the term of this
Employment Agreement
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<PAGE> 3
automatically will be extended, effective January 1, 2000, until the end of the
second fiscal year succeeding the fiscal year including such date). The term
"fiscal year" means the period beginning on the day after the Saturday closest
to January 1, in one year and ending on the Saturday closest to December 31 in
the next year.
(b) The Executive shall be entitled to serve as the
Chief Executive Officer of the Company. Without limiting the generality of any
of the foregoing, except as hereafter expressly agreed in writing by the
Executive: (i) the Executive shall not be required to report to any single
individual and shall report only to the Board as an entire body, (ii) no other
individual shall be elected or appointed as Chief Executive Officer of the
Company, (iii) the President of the Company shall report to no individual other
than the Executive, and (iv) no individual or group of individuals (including a
committee established or other designee appointed by the Board) shall have any
authority over or equal to the authority of the Executive in his role as Chief
Executive Officer, and neither the Company, the Board, nor any member of the
Board shall take any action which will or could have the effect of, or appear to
have the effect of, giving such authority to any such individual or group. For
service as a director, officer and employee of the Company, the Executive shall
be entitled to the full protection of the applicable indemnification provisions
of the articles of incorporation and code of regulations of the Company, as the
same may be amended from time to time.
(c) If:
(i) the Company materially changes the
Executive's duties and responsibilities as set forth in
Paragraphs 1(b) and 2(b) without his consent (including,
without limitation, by violating any of the provisions of
clauses (i), (ii), (iii) and (iv) of Paragraph 2(b));
(ii) the Executive's place of employment or
the principal executive offices of the Company are located
more than fifty (50) miles from the geographical center of
Cleveland, Ohio; or
(iii) there occurs a material breach by the
Company of any of its obligations under this Employment
Agreement, which breach has not been cured in all material
respects within ten (10) days after the Executive gives notice
thereof to the Company,
then in any such event the Executive shall have the right to terminate his
employment with the Company, but such termination shall not be considered a
voluntary resignation or termination of such employment or of this Employment
Agreement by the Executive but rather a discharge of the Executive by the
Company without "cause" (as defined in Paragraph 5(a)(ii)).
(d) The Executive shall be deemed not to have
consented to any written proposal calling for a material change in his duties
and responsibilities unless he shall give written notice of his consent thereto
to the Board within fifteen (15) days after receipt of such written proposal. If
the Executive shall not have given such consent, the Company shall have the
opportunity to withdraw such proposed material change by written notice to the
Executive given within ten (10) days after the end of said fifteen (15) day
period.
(e) At all times during the term of his employment
hereunder, the Executive shall be entitled to nominate himself to the Board, and
the Company shall take all actions required for the Executive to be elected to
the Board.
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<PAGE> 4
3. COMPENSATION.
During the term of this Employment Agreement the
Company shall pay or provide, as the case may be, to the Executive the
compensation and other benefits and rights set forth in this paragraph 3.
(a) The Company shall pay to the Executive a base
salary payable in accordance with the Company's usual pay practices (and in any
event no less frequently than monthly) of not less than Five Hundred Thousand
Dollars ($500,000) per annum.
(b) The Company shall pay to the Executive bonus
compensation for each fiscal year of the Company, not later than 60 days
following the end of each fiscal year or the termination of the employment, as
the case may be, prorated on a per diem basis for partial fiscal years,
determined and calculated in a manner set forth on Exhibit A attached hereto.
(c) The Company shall provide to the Executive such
life, medical, hospitalization and dental insurance for himself, his spouse and
eligible family members as may be determined by its Board to be consistent with
industry standards.
(d) The Company shall provide to the Executive a
suitable new, air-conditioned, full-sized automobile, or other automobile of
equal or lesser value of the Executive's choice, for the exclusive use of the
Executive, together with automobile theft, casualty, and liability insurance,
and payment or reimbursement of the Executive for all maintenance, repair and
gasoline or, in lieu of the foregoing automobile, an automobile allowance as
exists from time to time under Company policy, the dollar amount of which shall
be substantially commensurate with the cost for such automobile, together with
insurance costs, maintenance, repairs and gasoline for Executive's personal
vehicle used in lieu thereof.
(e) The Executive shall participate in all retirement
and other benefit plans of the Company generally available from time to time to
employees of the Company and for which the Executive qualifies under the terms
thereof (and nothing in this Agreement shall or shall be deemed to in any way
effect the Executive's right and benefits thereunder except as expressly
provided herein).
(f) The Executive shall be entitled to such periods
of vacation and sick leave allowance each year as are determined by the
Executive in his reasonable and good faith discretion, which in any event shall
be not less than as provided under the Company's vacation and sick leave policy
for executive officers.
(g) The Executive shall be entitled to participate in
any equity or other employee benefit plan that is generally available to senior
executive officers, as distinguished from general management, of the Company.
The Executive's participation in and benefits under any such plan shall be on
the terms and subject to the conditions specified in the governing document of
the particular plan.
(h) The Company shall, on the Executive's behalf,
bear the cost of initiation and regular membership fees, assessments and dues,
incurred during the term of this Employment Agreement, for one (1) golf club and
one (1) downtown business club, and shall reimburse the Executive the amount of
any charges actually and reasonably incurred at such clubs in the conduct of the
Company's business.
(i) Beginning on the day after the cessation of the
Executive's employment with the Company, except in the case of termination of
the Executive's employment for cause under
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<PAGE> 5
Paragraph 5, and continuing until the earlier of (A) the Executive's death, (B)
the date, if ever, on which the Executive begins full time employment with
another employer or (C) the fifth anniversary of the date of such cessation of
employment, the Company shall provide to the Executive at no cost to the
Executive office space at a location (other than the executive offices of the
Company) suitable to the Executive's status as the former Chief Executive
Officer of the Company, a full-time secretary and other customary office support
functions.
(j) The Company shall reimburse the Executive or
provide him with an expense allowance during the term of this Employment
Agreement for travel, entertainment and other expenses reasonably and
necessarily incurred by the Executive in connection with the Company's business.
The Executive shall furnish such documentation with respect to reimbursement to
be paid hereunder as the Company shall reasonably request.
(k) The Company shall reimburse the Executive or
provide him with an expense allowance during the term of this Employment
Agreement of up to $10,000 per annum for financial planning, tax return and
financial statement preparation services.
4. PAYMENT IN THE EVENT OF DEATH OR PERMANENT DISABILITY.
(a) In the event of the Executive's death or
"permanent disability" (as hereinafter defined) during the term of this
Employment Agreement, the Company shall pay to the Executive (or his successors
and assigns in the event of his death) an amount equal to two (2) times the
Executive's then effective per annum rate of salary, as determined under
Paragraph 3(a), plus a pro rata portion of the bonus applicable to the fiscal
year in which such death or permanent disability occurs, as such bonus is
determined under Paragraph 3(b).
(b) The pro rata portion of the bonus described in
Paragraph 4(a) shall be paid when and as provided in Paragraph 3(b). The
remainder of the benefit to be paid pursuant to Paragraph 4(a) shall be paid
within ninety (90) days after the date of death or permanent disability, as the
case may be.
(c) Except as otherwise provided in Paragraphs 3(e),
3(i) (in the event of permanent disability only) and 4(a), in the event of the
Executive's death or permanent disability the Executive's employment hereunder
shall terminate and the Executive shall be entitled to no further compensation
or other benefits under this Employment Agreement, except as to that portion of
any unpaid salary and other benefits accrued and earned by him hereunder up to
and including the date of such death or permanent disability, as the case may
be.
(d) For purposes of this Employment Agreement, the
Executive's "permanent disability" shall be deemed to have occurred after one
hundred twenty (120) days in the aggregate during any consecutive twelve (12)
month period, or after ninety (90) consecutive days, during which one hundred
twenty (120) or ninety (90) days, as the case may be, the Executive, by reason
of his physical or mental disability or illness, shall have been unable to
discharge his duties under this Employment Agreement. The date of permanent
disability shall be such one hundred twentieth (120th) or ninetieth (90th) day,
as the case may be. In the event either the Company or the Executive, after
receipt of notice of the Executive's permanent disability from the other,
dispute that the Executive's permanent disability shall have occurred, the
Executive shall promptly submit to a physical examination by the chief of
medicine of any major accredited hospital in the Cleveland, Ohio, area and,
unless such physician shall issue his written statement to the effect that in
his opinion, based on his diagnosis, the Executive is capable of resuming his
employment and devoting his full time and energy to discharging his duties
within thirty (30) days after the date of such statement, such permanent
disability shall be deemed to have occurred.
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<PAGE> 6
5. TERMINATION.
(a) The employment of the Executive under this
Employment Agreement, and the term hereof, may be terminated by the Company:
(i) on the death or permanent disability
(as defined below) of the Executive, or
(ii) for cause at any time by action of the
Board. For purposes hereof, the term "cause" shall mean:
(A) The Executive's fraud,
commission of a felony or of an act or series of acts
which result in material injury to the business
reputation of the Company, commission of an act or
series of repeated acts of dishonesty which are
materially inimical to the best interests of the
Company, or the Executive's willful and repeated
failure to perform his duties under this Employment
Agreement, which failure has not been cured within
fifteen (15) days after the Company gives notice
thereof to the Executive; or
(B) The Executive's material breach
of any material provision of this Employment
Agreement, which breach has not been cured in all
substantial respects within ten (10) days after the
Company gives notice thereof to the Executive.
The exercise by the Company of its rights of termination under this Paragraph 5
shall be the Company's sole remedy in the event of the occurrence of the event
as a result of which such right to terminate arises. Upon any termination of
this Employment Agreement, the Executive shall be deemed to have resigned from
all offices and directorships held by the Executive in the Company.
(b) In the event of a termination claimed by the
Company to be for "cause" pursuant to Paragraph 5(a)(ii), the Executive shall
have the right to have the justification for said termination determined by
arbitration in Cleveland, Ohio. In order to exercise such right, the Executive
shall serve on the Company within thirty (30) days after termination a written
request for arbitration. The Company immediately shall request the appointment
of an arbitrator by the American Arbitration Association and thereafter the
question of "cause" shall be determined under the rules of the American
Arbitration Association, and the decision of the arbitrator shall be final and
binding on both parties. The parties shall use all reasonable efforts to
facilitate and expedite the arbitration and shall act to cause the arbitration
to be completed as promptly as possible. During the pendency of the arbitration,
the Executive shall continue to receive all compensation and benefits to which
he is entitled hereunder, and if at any time during the pendency of such
arbitration the Company fails to pay and provide all compensation and benefits
to the Executive in a timely manner the Company shall be deemed to have
automatically waived whatever rights it then may have had to terminate the
Executive's employment for cause. Expenses of the arbitration shall be borne
equally by the parties.
(c) In the event of termination for any of the
reasons set forth in subparagraph (a) of this Paragraph 5, except as otherwise
provided in Paragraphs 3(e), 3(i) (in the case of permanent disability only) and
4(a), the Executive shall be entitled to no further compensation or other
benefits under this Employment Agreement, except as to that portion of any
unpaid salary and other benefits accrued and earned by him hereunder up to and
including the effective date of such termination.
(d) If there shall occur a "Change in Control" and a
"Triggering Event" (as those terms are defined in the Change in Control
Agreement, dated April 2, 1999, between the Company
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<PAGE> 7
and the Executive (the "Change in Control Agreement")), then the Company or the
Executive shall have the right to terminate the employment of the Executive with
the Company and, in the event of such termination, the payments to be made to
the Executive in connection therewith shall be governed by the Change of Control
Agreement and the Executive shall be entitled to no further compensation or
other benefits under this Employment Agreement, except as to that portion of any
unpaid salary and other benefits accrued and earned by him hereunder up to and
including the effective date of such termination.
6. COVENANTS AND CONFIDENTIAL INFORMATION.
(a) The Executive acknowledges the Company's reliance
and expectation of the Executive's continued commitment to performance of his
duties and responsibilities during the term of this Employment Agreement. In
light of such reliance and expectation on the part of the Company, during the
term of this Employment Agreement and for a period of two (2) years thereafter
(and, as to clause (ii) of this subparagraph (a), at any time during and after
the term of this Employment Agreement), the Executive shall not, directly or
indirectly, do or suffer either of the following:
(i) Own, manage, control or participate in
the ownership, management, or control of, or be employed or
engaged by or otherwise affiliated or associated as a
consultant, independent contractor or otherwise with, any
other corporation, partnership, proprietorship, firm,
association or other business entity engaged in the business
of, or otherwise engage in the business of, acquiring, owning,
developing or managing commercial shopping centers; provided,
however, that the ownership of not more than one percent (1%)
of any class of publicly traded securities of any entity shall
not be deemed a violation of this covenant; or
(ii) Disclose, divulge, discuss, copy or
otherwise use or suffer to be used in any manner, in
competition with, or contrary to the interests of, the
Company, any confidential information relating to the
Company's operations, properties or otherwise to its
particular business or other trade secrets of the Company, it
being acknowledged by the Executive that all such information
regarding the business of the Company compiled or obtained by,
or furnished to, the Executive while the Executive shall have
been employed by or associated with the Company is
confidential information and the Company's exclusive property;
provided, however, that the foregoing restrictions shall not
apply to the extent that such information. (A) is clearly
obtainable in the public domain, (B) becomes obtainable in the
public domain, except by reason of the breach by the Executive
of the terms hereof, (C) was not acquired by the Executive in
connection with his employment or affiliation with the
Company, (D) was not acquired by the Executive from the
Company or its representatives, or (E) is required to be
disclosed by rule of law or by order of a court or
governmental body or agency.
(b) The Executive agrees and understands that the
remedy at law for any breach by him of this Paragraph 6 will be inadequate and
that the damages flowing from such breach are not readily susceptible to being
measured in monetary terms. Accordingly, it is acknowledged that, upon adequate
proof of the Executive's violation of any legally enforceable provision of this
Paragraph 6, the Company shall be entitled to immediate injunctive relief and
may obtain a temporary order restraining any threatened or further breach.
Nothing in this Paragraph 6 shall be deemed to limit the Company's remedies at
law or in equity for any breach by the Executive of any of the provisions of
this Paragraph 6 which may be pursued or availed of by the Company.
(c) The Executive has carefully considered the nature
and extent of the restrictions upon him and the rights and remedies conferred
upon the Company under this Paragraph 6, and hereby acknowledges and agrees that
the same are reasonable in time and territory, are designed to
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<PAGE> 8
eliminate competition which otherwise would be unfair to the Company, do not
stifle the inherent skill and experience of the Executive, would not operate as
a bar to the Executive's sole means of support, are fully required to protect
the legitimate interests of the Company and do not confer a benefit upon the
Company disproportionate to the detriment to the Executive.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Ohio, and
has all requisite corporate power and authority to enter into, execute and
deliver this Employment Agreement, fulfill its obligations hereunder and
consummate the transactions contemplated hereby.
(b) The execution and delivery of, performance of
obligations under, and consummation of the transactions contemplated by, this
Employment Agreement have been duly authorized and approved by all requisite
corporate action by or in respect of the Company, and this Employment Agreement
constitutes the legally valid and binding obligation of the Company, enforceable
by the Executive in accordance with its terms.
(c) No provision of the Company's governing documents
or any agreement to which its is a party or by which it is bound or of any
material law or regulation of the kind usually applicable and binding upon the
Company prohibits or limits its ability to enter into, execute and deliver this
Employment Agreement, fulfill its respective obligations hereunder and
consummate the transactions contemplated hereby.
8. MISCELLANEOUS.
(a) The Executive represents and warrants that he is
not a party to any agreement, contract or understanding, whether employment or
otherwise, which would restrict or prohibit him from undertaking or performing
employment in accordance with the terms and conditions of this Employment
Agreement.
(b) The provisions of this Employment Agreement are
severable and if any one or more provisions may be determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions and any
partially unenforceable provision to the extent enforceable in any jurisdiction
nevertheless shall be binding and enforceable.
(c) The rights and obligations of the Company under
this Employment Agreement shall inure to the benefit of, and shall be binding
on, the Company and its successors and assigns, and the rights and obligations
(other than obligations to perform services) of the Executive under this
Employment Agreement shall inure to the benefit of, and shall be binding upon,
the Executive and his heirs, personal representatives and assigns.
(d) Any controversy or claim arising out of or
relating to this Employment Agreement, or the breach thereof, shall be settled
by arbitration in accordance with the Rules of the American Arbitration
Association then pertaining in the City of Cleveland, Ohio, and judgment upon
the award rendered by the arbitrator or arbitrators may be entered in any court
having jurisdiction thereof. The arbitrator or arbitrators shall be deemed to
possess the powers to issue mandatory orders and restraining orders in
connection with such arbitration; provided, however, that nothing in this
Paragraph 8(d) shall be construed so as to deny the Company the right and power
to seek and obtain injunctive relief in a court of equity for any breach or
threatened breach by the Executive of any of his covenants contained in
Paragraph 8 hereof.
- --------------------------------------------------------------------------------
Page 8
<PAGE> 9
(e) Any notice to be given under this Employment
Agreement shall be personally delivered in writing or shall have been deemed
duly given when received after it is posted in the United States mail, postage
prepaid, registered or certified, return receipt requested, and if mailed to the
Company, shall be addressed to its principal place of business, attention:
General Counsel, and if mailed to the Executive, shall be addressed to him at
his home address last known on the records of the Company, or at such other
address or addresses as either the Company or the Executive may hereafter
designate in writing to the other.
(f) The failure of either party to enforce any
provision or provisions of this Employment Agreement shall not in any way be
construed as a waiver of any such provision or provisions as to any future
violations thereof, nor prevent that party thereafter from enforcing each and
every other provision of this Employment Agreement. The rights granted the
parties herein are cumulative and the waiver of any single remedy shall not
constitute a waiver of such party's right to assert all other legal remedies
available to it under the circumstances.
(g) This Employment Agreement supersedes all prior
agreements and understandings between the parties and may not be modified or
terminated orally. No modification, termination or attempted waiver shall be
valid unless in writing and signed by the party against whom the same is sought
to be enforced.
(h) This Employment Agreement shall be governed by
and construed according to the laws of the State of Ohio.
(i) Captions and paragraph headings used herein are
for convenience and are not a part of this Employment Agreement and shall not be
used in construing it.
(j) Where necessary or appropriate to the meaning
hereof, the singular and plural shall be deemed to include each other, and the
masculine, feminine and neuter shall be deemed to include each other.
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement on the day and year first set forth above.
DEVELOPERS DIVERSIFIED REALTY
CORPORATION, an Ohio corporation
/s/ James A. Schoff
By:___________________________________________
James A. Schoff, Chief Investment Officer
/s/ Scott A. Wolstein
___________________________________________
SCOTT A. WOLSTEIN
- --------------------------------------------------------------------------------
Page 9
<PAGE> 10
EXHIBIT A
---------
I. INCENTIVE OPPORTUNITY
BONUS AS
% OF SALARY
-----------
THRESHOLD TARGET MAXIMUM
--------- ------ -------
50% 75% 125%
- --------------------------------------------------------------------------------
Page 10
<PAGE> 1
Exhibit 10.2
EMPLOYMENT AGREEMENT
BETWEEN
DEVELOPERS DIVERSIFIED REALTY CORPORATION
AND
JAMES A. SCHOFF
<PAGE> 2
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT is entered into as of the 2nd day of
April, 1999 between Developers Diversified Realty Corporation, an Ohio
corporation ("the Company"), and James A. Schoff (the "Executive").
W I T N E S S E T H :
---------------------
WHEREAS, the Company desires to employ the Executive, and the
Executive desires to be employed by the Company, on the terms and subject to the
conditions set forth herein;
WHEREAS, the Company and the Executive desire for this
Agreement to amend and supercede the Employment Agreement, dated as of January
1, 1993, between the Company and the Executive;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties agree as follows:
1. EMPLOYMENT.
(a) The Company hereby employs the Executive as its
Chief Investment Officer and the Executive hereby accepts such employment, on
the terms and subject to the conditions hereinafter set forth.
(b) During the term of this Employment Agreement and
any renewal hereof (all references herein to the term of this Employment
Agreement shall include references to the period of renewal hereof, if any), the
Executive shall be and have the title of Chief Investment Officer and shall
devote substantially all of his business time and all reasonable efforts to his
employment and perform diligently such duties as are customarily performed by
Chief Investment Officers of companies similar in size to the Company, together
with such other duties as may be reasonably requested from time to time by the
Board of Directors of the Company (the "Board"), which duties shall be
consistent with his positions as set forth above and as provided in Paragraph 2.
2. TERM AND POSITIONS.
(a) Subject to the provisions for renewal and
termination hereinafter provided, (i) the term of this Employment Agreement
shall begin on the date hereof and shall continue for the current "fiscal year"
(as hereinafter defined) and for the succeeding two fiscal years and (ii) as of
December 31, 2001, and the first day of each succeeding fiscal year thereafter,
such term automatically shall be extended for one (1) additional fiscal year,
beginning with the fiscal year commencing January 1, 2002, and continuing
thereafter. This Employment Agreement may be terminated at any time as provided
in Paragraph 5 or by either the Company or the Executive upon one fiscal year's
prior written notice of termination of this Employment Agreement given to the
other at least thirty (30) days before January 1, 2000, or the beginning of any
such succeeding fiscal year (for example, unless such written notice of
termination is given on or prior to December 2, 1999, the term of this
Employment Agreement automatically will be extended, effective January 1, 2000,
until the end of the second fiscal year succeeding the fiscal year including
such date). The term "fiscal year" means the period beginning on the
- --------------------------------------------------------------------------------
Page 2
<PAGE> 3
day after the Saturday closest to January 1, in one year and ending on the
Saturday closest to December 31 in the next year.
(b) The Executive shall be entitled to serve as the
Chief Investment Officer of the Company. For service as a director, officer and
employee of the Company, the Executive shall be entitled to the full protection
of the applicable indemnification provisions of the articles of incorporation
and code of regulations of the Company, as the same may be amended from time to
time.
(c) If:
(i) the Company materially changes the Executive's
duties and responsibilities as set forth in Paragraphs 1(b)
and 2(b) without his consent;
(ii) the Executive's place of employment or the
principal executive offices of the Company are located more
than fifty (50) miles from the geographical center of
Cleveland, Ohio; or
(iii) there occurs a material breach by the Company
of any of its obligations under this Employment Agreement,
which breach has not been cured in all material respects
within ten (10) days after the Executive gives notice thereof
to the Company.
then in any such event the Executive shall have the right to terminate his
employment with the Company, but such termination shall not be considered a
voluntary resignation or termination of such employment or of this Employment
Agreement by the Executive but rather a discharge of the Executive by the
Company without "cause" (as defined in Paragraph 5(a)(ii)).
(d) The Executive shall be deemed not to have
consented to any written proposal calling for a material change in his duties
and responsibilities unless he shall give written notice of his consent thereto
to the Board within fifteen (15) days after receipt of such written proposal. If
the Executive shall not have given such consent, the Company shall have the
opportunity to withdraw such proposed material change by written notice to the
Executive given within ten (10) days after the end of said fifteen (15) day
period.
(e) At all times during the term of his employment
hereunder, the Executive shall be entitled to nominate himself to the Board, and
the Company shall take all actions required for the Executive to be elected to
the Board.
3. COMPENSATION.
During the term of this Employment Agreement the
Company shall pay or provide, as the case may be, to the Executive the
compensation and other benefits and rights set forth in this paragraph 3.
(a) The Company shall pay to the Executive a base
salary payable in accordance with the Company's usual pay practices (and in any
event no less frequently than monthly) of not less than Three Hundred
Twenty-Five Thousand Dollars ($325,000) per annum.
(b) The Company shall pay to the Executive bonus
compensation for each fiscal year of the Company, not later than 60 days
following the end of each fiscal year or the termination of the employment, as
the case may be, prorated on a per diem basis for partial fiscal years,
determined and calculated in a manner set forth on Exhibit A attached hereto.
- --------------------------------------------------------------------------------
Page 2
<PAGE> 4
(c) The Company shall provide to the Executive life,
medical, hospitalization and dental insurance for himself, his spouse and
eligible family members as may be determined by the Board to be consistent with
industry standards.
(d) The Company shall provide to the Executive a
suitable new, air-conditioned, full-sized automobile, or other automobile of
equal or lesser value of the Executive's choice, for the exclusive use of the
Executive, together with automobile theft, casualty, and liability insurance,
and payment or reimbursement of the Executive for all maintenance, repair and
gasoline or, in lieu of the foregoing automobile, an automobile allowance as
exists from time to time under Company policy, the dollar amount of which shall
be substantially commensurate with the cost for such automobile, together with
insurance costs, maintenance, repairs and gasoline for Executive's personal
vehicle used in lieu thereof.
(e) The Executive shall participate in all retirement
and other benefit plans of the Company generally available from time to time to
employees of the Company and for which the Executive qualifies under the terms
thereof (and nothing in this Agreement shall or shall be deemed to in any way
effect the Executive's right and benefits thereunder except as expressly
provided herein).
(f) The Executive shall be entitled to such periods
of vacation and sick leave allowance each year as are determined by the
Executive in his reasonable and good faith discretion, which in any event shall
be not less than as provided under the Company's vacation and sick leave policy
for executive officers.
(g) The Executive shall be entitled to participate in
any equity or other employee benefit plan that is generally available to senior
executive officers, as distinguished from general management, of the Company.
The Executive's participation in and benefits under any such plan shall be on
the terms and subject to the conditions specified in the governing document of
the particular plan.
(h) The Company shall, on the Executive's behalf,
bear the cost of initiation and regular membership fees, assessments and dues,
incurred during the term of this Employment Agreement, for one (1) golf club and
one (1) downtown business club, and shall reimburse the Executive the amount of
any charges actually and reasonably incurred at such clubs in the conduct of the
Company's business.
(i) Beginning on the day after the cessation of the
Executive's employment with the Company, except in the case of termination of
the Executive's employment for cause under Paragraph 5, and continuing until the
earlier of (A) the Executive's death, (B) the date, if ever, on which the
Executive begins full time employment with another employer or (C) the fifth
anniversary of the date of such cessation of employment, the Company shall
provide to the Executive at no cost to the Executive office space at a location
(other than the executive offices of the Company) suitable to the Executive's
status as the former Chief Investment Officer of the Company, a full-time
secretary and other customary office support functions.
(j) The Company shall reimburse the Executive or
provide him with an expense allowance during the term of this Employment
Agreement for travel, entertainment and other expenses reasonably and
necessarily incurred by the Executive in connection with the Company's business.
The Executive shall furnish such documentation with respect to reimbursement to
be paid hereunder as the Company shall reasonably request.
- --------------------------------------------------------------------------------
Page 3
<PAGE> 5
(k) The Company shall reimburse the Executive or
provide him with an expense allowance during the term of this Employment
Agreement of up to $10,000 per annum for financial planning, tax return and
financial statement preparation services.
4. PAYMENT IN THE EVENT OF DEATH OR PERMANENT DISABILITY.
(a) In the event of the Executive's death or
"permanent disability" (as hereinafter defined) during the term of this
Employment Agreement, the Company shall pay to the Executive (or his successors
and assigns in the event of his death) an amount equal to two (2) times the
Executive's then effective per annum rate of salary, as determined under
Paragraph 3(a), plus a pro rata portion of the bonus applicable to the fiscal
year in which such death or permanent disability occurs, as such bonus is
determined under Paragraph 3(b).
(b) The pro rata portion of the bonus described in
Paragraph 4(a) shall be paid when and as provided in Paragraph 3(b). The
remainder of the benefit to be paid pursuant to Paragraph 4(a) shall be paid
within ninety (90) days after the date of death or permanent disability, as the
case may be.
(c) Except as otherwise provided in Paragraphs 3(e),
3(i) (in the event of permanent disability only) and 4(a), in the event of the
Executive's death or permanent disability the Executive's employment hereunder
shall terminate and the Executive shall be entitled to no further compensation
or other benefits under this Employment Agreement, except as to that portion of
any unpaid salary and other benefits accrued and earned by him hereunder up to
and including the date of such death or permanent disability, as the case may
be.
(d) For purposes of this Employment Agreement, the
Executive's "permanent disability" shall be deemed to have occurred after one
hundred twenty (120) days in the aggregate during any consecutive twelve (12)
month period, or after ninety (90) consecutive days, during which one hundred
twenty (120) or ninety (90) days, as the case may be, the Executive, by reason
of his physical or mental disability or illness, shall have been unable to
discharge his duties under this Employment Agreement. The date of permanent
disability shall be such one hundred twentieth (120th) or ninetieth (90th) day,
as the case may be. In the event either the Company or the Executive, after
receipt of notice of the Executive's permanent disability from the other,
dispute that the Executive's permanent disability shall have occurred, the
Executive shall promptly submit to a physical examination by the chief of
medicine of any major accredited hospital in the Cleveland, Ohio, area and,
unless such physician shall issue his written statement to the effect that in
his opinion, based on his diagnosis, the Executive is capable of resuming his
employment and devoting his full time and energy to discharging his duties
within thirty (30) days after the date of such statement, such permanent
disability shall be deemed to have occurred.
5. TERMINATION.
(a) The employment of the Executive under this
Employment Agreement, and the term hereof, may be terminated by the Company:
(i) on the death or permanent disability (as
defined below) of the Executive, or
(ii) for cause at any time by action of the
Board. For purposes hereof, the term "cause" shall mean:
- --------------------------------------------------------------------------------
Page 4
<PAGE> 6
(A) The Executive's fraud,
commission of a felony or of an act or series of acts
which result in material injury to the business
reputation of the Company, commission of an act or
series of repeated acts of dishonesty which are
materially inimical to the best interests of the
Company, or the Executive's willful and repeated
failure to perform his duties under this Employment
Agreement, which failure has not been cured within
fifteen (15) days after the Company gives notice
thereof to the Executive; or
(B) The Executive's material breach
of any material provision of this Employment
Agreement, which breach has not been cured in all
substantial respects within ten (10) days after the
Company gives notice thereof to the Executive.
The exercise by the Company of its rights of termination under this Paragraph 5
shall be the Company's sole remedy in the event of the occurrence of the event
as a result of which such right to terminate arises. Upon any termination of
this Employment Agreement, the Executive shall be deemed to have resigned from
all offices and directorships held by the Executive in the Company.
(b) In the event of a termination claimed by the
Company to be for "cause" pursuant to Paragraph 5(a)(ii), the Executive shall
have the right to have the justification for said termination determined by
arbitration in Cleveland, Ohio. In order to exercise such right, the Executive
shall serve on the Company within thirty (30) days after termination a written
request for arbitration. The Company immediately shall request the appointment
of an arbitrator by the American Arbitration Association and thereafter the
question of "cause" shall be determined under the rules of the American
Arbitration Association, and the decision of the arbitrator shall be final and
binding on both parties. The parties shall use all reasonable efforts to
facilitate and expedite the arbitration and shall act to cause the arbitration
to be completed as promptly as possible. During the pendency of the arbitration,
the Executive shall continue to receive all compensation and benefits to which
he is entitled hereunder, and if at any time during the pendency of such
arbitration the Company fails to pay and provide all compensation and benefits
to the Executive in a timely manner the Company shall be deemed to have
automatically waived whatever rights it then may have had to terminate the
Executive's employment for cause. Expenses of the arbitration shall be borne
equally by the parties.
(c) In the event of termination for any of the
reasons set forth in subparagraph (a) of this Paragraph 5, except as otherwise
provided in Paragraphs 3(e), 3(i) (in the case of permanent disability only) and
4(a), the Executive shall be entitled to no further compensation or other
benefits under this Employment Agreement, except as to that portion of any
unpaid salary and other benefits accrued and earned by him hereunder up to and
including the effective date of such termination.
(d) If there shall occur a "Change in Control" and a
"Triggering Event" (as those terms are defined in the Change in Control
Agreement, dated April 2, 1999, between the Company and the Executive (the
"Change in Control Agreement")), then the Company or the Executive shall have
the right to terminate the employment of the Executive with the Company and, in
the event of such termination, the payments to be made to the Executive in
connection therewith shall be governed by the Change of Control Agreement and
the Executive shall be entitled to no further compensation or other benefits
under this Employment Agreement, except as to that portion of any unpaid salary
and other benefits accrued and earned by him hereunder up to and including the
effective date of such termination.
6. COVENANTS AND CONFIDENTIAL INFORMATION.
(a) The Executive acknowledges the Company's reliance
and expectation of the Executive's continued commitment to performance of his
duties and responsibilities during the term
- --------------------------------------------------------------------------------
Page 5
<PAGE> 7
of this Employment Agreement. In light of such reliance and expectation on the
part of the Company, during the term of this Employment Agreement and for a
period of two (2) years thereafter (and, as to clause (ii) of this subparagraph
(a), at any time during and after the term of this Employment Agreement), the
Executive shall not, directly or indirectly, do or suffer either of the
following:
(i) Own, manage, control or participate in
the ownership, management, or control of, or be employed or
engaged by or otherwise affiliated or associated as a
consultant, independent contractor or otherwise with, any
other corporation, partnership, proprietorship, firm,
association or other business entity engaged in the business
of, or otherwise engage in the business of, acquiring, owning,
developing or managing commercial shopping centers; provided,
however, that the ownership of not more than one percent (1%)
of any class of publicly traded securities of any entity shall
not be deemed a violation of this covenant; or
(ii) Disclose, divulge, discuss, copy or
otherwise use or suffer to be used in any manner, in
competition with, or contrary to the interests of, the
Company, any confidential information relating to the
Company's operations, properties or otherwise to its
particular business or other trade secrets of the Company, it
being acknowledged by the Executive that all such information
regarding the business of the Company compiled or obtained by,
or furnished to, the Executive while the Executive shall have
been employed by or associated with the Company is
confidential information and the Company's exclusive property;
provided, however, that the foregoing restrictions shall not
apply to the extent that such information. (A) is clearly
obtainable in the public domain, (B) becomes obtainable in the
public domain, except by reason of the breach by the Executive
of the terms hereof, (C) was not acquired by the Executive in
connection with his employment or affiliation with the
Company, (D) was not acquired by the Executive from the
Company or its representatives, or (E) is required to be
disclosed by rule of law or by order of a court or
governmental body or agency.
(b) The Executive agrees and understands that the
remedy at law for any breach by him of this Paragraph 6 will be inadequate and
that the damages flowing from such breach are not readily susceptible to being
measured in monetary terms. Accordingly, it is acknowledged that, upon adequate
proof of the Executive's violation of any legally enforceable provision of this
Paragraph 6, the Company shall be entitled to immediate injunctive relief and
may obtain a temporary order restraining any threatened or further breach.
Nothing in this Paragraph 6 shall be deemed to limit the Company's remedies at
law or in equity for any breach by the Executive of any of the provisions of
this Paragraph 6 which may be pursued or availed of by the Company.
(c) The Executive has carefully considered the nature
and extent of the restrictions upon him and the rights and remedies conferred
upon the Company under this Paragraph 6, and hereby acknowledges and agrees that
the same are reasonable in time and territory, are designed to eliminate
competition which otherwise would be unfair to the Company, do not stifle the
inherent skill and experience of the Executive, would not operate as a bar to
the Executive's sole means of support, are fully required to protect the
legitimate interests of the Company and do not confer a benefit upon the Company
disproportionate to the detriment to the Executive.
7. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
(a) The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Ohio, and
has all requisite corporate power and authority to enter into, execute and
deliver this Employment Agreement, fulfill its obligations hereunder and
consummate the transactions contemplated hereby.
- --------------------------------------------------------------------------------
Page 6
<PAGE> 8
(b) The execution and delivery of, performance of
obligations under, and consummation of the transactions contemplated by, this
Employment Agreement have been duly authorized and approved by all requisite
corporate action by or in respect of the Company, and this Employment Agreement
constitutes the legally valid and binding obligation of the Company, enforceable
by the Executive in accordance with its terms.
(c) No provision of the Company's governing documents
or any agreement to which its is a party or by which it is bound or of any
material law or regulation of the kind usually applicable and binding upon the
Company prohibits or limits its ability to enter into, execute and deliver this
Employment Agreement, fulfill its respective obligations hereunder and
consummate the transactions contemplated hereby.
8. MISCELLANEOUS.
(a) The Executive represents and warrants that he is
not a party to any agreement, contract or understanding, whether employment or
otherwise, which would restrict or prohibit him from undertaking or performing
employment in accordance with the terms and conditions of this Employment
Agreement.
(b) The provisions of this Employment Agreement are
severable and if any one or more provisions may be determined to be illegal or
otherwise unenforceable, in whole or in part, the remaining provisions and any
partially unenforceable provision to the extent enforceable in any jurisdiction
nevertheless shall be binding and enforceable.
(c) The rights and obligations of the Company under
this Employment Agreement shall inure to the benefit of, and shall be binding
on, the Company and its successors and assigns, and the rights and obligations
(other than obligations to perform services) of the Executive under this
Employment Agreement shall inure to the benefit of, and shall be binding upon,
the Executive and his heirs, personal representatives and assigns.
(d) Any controversy or claim arising out of or
relating to this Employment Agreement, or the breach thereof, shall be settled
by arbitration in accordance with the Rules of the American Arbitration
Association then pertaining in the City of Cleveland, Ohio, and judgment upon
the award rendered by the arbitrator or arbitrators may be entered in any court
having jurisdiction thereof. The arbitrator or arbitrators shall be deemed to
possess the powers to issue mandatory orders and restraining orders in
connection with such arbitration; provided, however, that nothing in this
Paragraph 8(d) shall be construed so as to deny the Company the right and power
to seek and obtain injunctive relief in a court of equity for any breach or
threatened breach by the Executive of any of his covenants contained in
Paragraph 8 hereof.
(e) Any notice to be given under this Employment
Agreement shall be personally delivered in writing or shall have been deemed
duly given when received after it is posted in the United States mail, postage
prepaid, registered or certified, return receipt requested, and if mailed to the
Company, shall be addressed to its principal place of business, attention:
General Counsel, and if mailed to the Executive, shall be addressed to him at
his home address last known on the records of the Company, or at such other
address or addresses as either the Company or the Executive may hereafter
designate in writing to the other.
(f) The failure of either party to enforce any
provision or provisions of this Employment Agreement shall not in any way be
construed as a waiver of any such provision or provisions as to any future
violations thereof, nor prevent that party thereafter from enforcing each and
every other provision of this Employment Agreement. The rights granted the
parties herein are
- --------------------------------------------------------------------------------
Page 7
<PAGE> 9
cumulative and the waiver of any single remedy shall not constitute a waiver of
such party's right to assert all other legal remedies available to it under the
circumstances.
(g) This Employment Agreement supersedes all prior
agreements and understandings between the parties and may not be modified or
terminated orally. No modification, termination or attempted waiver shall be
valid unless in writing and signed by the party against whom the same is sought
to be enforced.
(h) This Employment Agreement shall be governed by
and construed according to the laws of the State of Ohio.
(i) Captions and paragraph headings used herein are
for convenience and are not a part of this Employment Agreement and shall not be
used in construing it.
(j) Where necessary or appropriate to the meaning
hereof, the singular and plural shall be deemed to include each other, and the
masculine, feminine and neuter shall be deemed to include each other.
IN WITNESS WHEREOF, the parties have executed this Employment
Agreement on the day and year first set forth above.
DEVELOPERS DIVERSIFIED REALTY
CORPORATION, an Ohio corporation
/s/ Scott A. Wolstein
By_____________________________________________
Scott A. Wolstein, Chief Executive Officer
/s/ James A. Schoff
_____________________________________________
JAMES A. SCHOFF
- --------------------------------------------------------------------------------
Page 8
<PAGE> 10
EXHIBIT A
---------
I. INCENTIVE OPPORTUNITY
BONUS AS
% OF SALARY
-----------
THRESHOLD TARGET MAXIMUM
--------- ------ -------
25% 50% 100%
- --------------------------------------------------------------------------------
Page 9
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<EXCHANGE-RATE> 1
<CASH> 1,461
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 2,008,165
<DEPRECIATION> (238,810)
<TOTAL-ASSETS> 2,267,384
<CURRENT-LIABILITIES> 0
<BONDS> 1,018,875
0
303,750
<COMMON> 6,131
<OTHER-SE> 574,301
<TOTAL-LIABILITY-AND-EQUITY> 2,267,384
<SALES> 0
<TOTAL-REVENUES> 195,678
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 89,344
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 50,081
<INCOME-PRETAX> 65,647
<INCOME-TAX> 0
<INCOME-CONTINUING> 65,647
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 65,647
<EPS-BASIC> 0.74
<EPS-DILUTED> 0.71
</TABLE>
