As filed with the Securities and Exchange Commission on August 9, 1996
Registration No. 333-06933
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 1
ON
FORM S-8
TO FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933*
SIMON DEBARTOLO GROUP, INC.
(formerly Simon Property Group, Inc.)
(Exact name of registrant as specified in its charter)
MARYLAND 35-1901999
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
NATIONAL CITY CENTER
115 WEST WASHINGTON STREET, SUITE 15 EAST
INDIANAPOLIS, IN 46204
(317) 636-1600
(Address and Telephone Number of Principal Executive Offices)
SIMON DEBARTOLO GROUP, INC.
STOCK INCENTIVE PLAN
(formerly known as the DeBartolo Realty Corporation 1994 Stock Incentive Plan)
(Full title of the plan)
COPY TO:
JAMES M. BARKLEY, ESQ. EDWIN S. MAYNARD, ESQ.
SIMON DEBARTOLO GROUP, INC. PAUL, WEISS, RIFKIND, WHARTON & GARRISON
115 WEST WASHINGTON STREET,SUITE 15 EAST 1285 AVENUE OF THE AMERICAS
INDIANAPOLIS, IN 46204 NEW YORK, NY 10019-6064
(Name and address of agent for service) (212) 373-3024
(317) 667-1600
(Telephone number of agent for service)
_____
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
<S> <C> <C> <C> <C>
Title of Each Class of Amount to be Proposed Maximum Offering Proposed Maximum Aggregate Amount of
Securities to be Registered Registered Price Per Share(1) Offering Price(1) Registration Fee
Common Stock, par value
$.0001 per share 1,828,394 (1) (2) (2) (2)
</TABLE>
(1) Consisting of, on an as converted basis, 2,688,816 shares of
common stock, par value $.01 per share, of DeBartolo Realty Corporation ("DRC
Shares") reserved for issuance under the DeBartolo Realty Corporation 1994
Stock Incentive Plan (the "Plan") or issuable upon the exercise of stock
options granted thereunder (the "Stock Options"). At the effective time of
the Merger (as defined below), the Plan and the Stock Options were assumed by
the Registrant, the name of the Plan was changed to the Simon DeBartolo Group,
Inc. Stock Incentive Plan and each DRC Share issuable under the Plan or upon
exercise of the Stock Options was converted into such number of shares of
common stock, par value $.0001 per share, of the Registrant (the "Common
Stock") as specified in the Merger Agreement (as defined below).
(2) Not Applicable. All filing fees payable in connection with the
issuance of these securities were paid in connection with the filing of (a)
preliminary proxy materials on Schedule 14A filed by the Registrant on May 8,
1996 and (b) the Registrant's Form S-4 Registration Statement No. 333-06933
filed June 27, 1996.
* Filed as a Post-Effective Amendment on Form S-8 to such Form S-4
Registration Statement pursuant to the procedure described herein in the
section captioned "Introductory Statement".
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
INTRODUCTORY STATEMENT
Simon DeBartolo Group, Inc. (the "Company" or the "Registrant") ,
formerly Simon Property Group, Inc., hereby amends its Registration Statement
on Form S-4 (No. 333-06933) (the "Form S-4") by filing this Post-Effective
Amendment No. 1 on Form S-8 ("Post-Effective Amendment No. 1") relating to up
to 1,828,394 shares of Common Stock issuable under the Plan and upon exercise
of the Stock Options. All such shares of Common Stock were previously
included in the Form S-4.
Pursuant to an Agreement and Plan of Merger dated as of March 28,
1996, as amended, among the Company, Day Acquisition Corp., an Ohio
corporation and subsidiary of the Company ("Day"), and DeBartolo Realty
Corporation, an Ohio corporation ("DRC"), Day was merged with and into DRC on
August 9, 1996 (the "Merger"). Pursuant to the Merger, DRC became a
subsidiary of the Company and the Company assumed the Plan and Stock Options.
As a result of the Merger, shares of DRC Common Stock are no longer
issuable under the Plan or upon exercise of the Stock Options. Instead, in
accordance with the exchange ratio set forth in the Merger Agreement, the
Company has provided for the issuance of shares of Common Stock in lieu of the
shares of DRC Common Stock reserved for issuance under the Plan.
Specifically, each DRC Share issuable under the Plan was converted into the
right to receive from the Company sixty-eight one hundredths (.68) of a share
of Common Stock.
Also as a result of the Merger, each Stock Option was deemed to
constitute an option to acquire the same number of shares of Common Stock as
the holder thereof would have been entitled to receive pursuant to the Merger
had such holder exercised such option in full immediately prior to the
effective time of the Merger at a price per share equal to the aggregate
exercise price for the shares subject to such option divided by the number of
full shares of Common Stock deemed to be purchasable pursuant to such option.
The designation of Post-Effective Amendment No. 1 as Registration
No. 333-06933 denotes that Post-Effective Amendment No. 1 relates only to the
Common Stock issuable pursuant to the Plan or upon the exercise of the Stock
Options and that this is the first Post-Effective Amendment to the S-4 filed
with respect to such shares.
Item 3. Incorporation of Documents by Reference
The following documents filed by the Company with the Securities and
Exchange Commission (the "Commission") (File No. 1-12618) pursuant to the
Securities and Exchange Act of 1934 (the "1934 Act") are incorporated herein
by reference and shall be deemed a part hereof:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995, as amended by Form 10-K/A-1 (filed on April 29,
1996);
2. The Company's Quarterly Report on Form 10-Q for the calendar
quarter ended March 31, 1996, as amended by Form 10-Q/A-1 (filed on June 27,
1996);
3. The Company's Current Report on Form 8-K dated March 26, 1996;
4. The Company's Current Report on Form 8-K dated August 9, 1996;
and
<PAGE>
2
5. The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A/A, filed with the Commission on
August 9, 1996.
All other documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the 1934 Act, subsequent to the date of this
registration statement and prior to the filing of a post-effective amendment
which indicates that all securities registered hereby have been sold or which
deregisters all securities then remaining unsold (such documents and the
documents enumerated above being referred to hereinafter as "Incorporated
Documents"), shall be deemed to be incorporated by reference in this
registration statement and to be part hereof from the date of filing of such
documents.
Any statement contained in an Incorporated Document shall be deemed
to be modified or superseded for purposes of this Registration Statement to
the extent that a statement contained herein (including for this purpose any
statement contained in the Form S-4) or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or so superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
The Registrant's officers and directors are and will be indemnified
under Maryland law, the Articles of Incorporation of the Registrant, the
Agreement of Limited Partnership of Simon Property Group, L.P., as amended
(the "Simon Partnership Agreement") and the Agreement of Limited Partnership
of Simon-DeBartolo Group, L.P., as amended (the "Simon-DeBartolo Partnership
Agreement," and together with the Simon Partnership Agreement, the
"Partnership Agreements") against certain liabilities. The Articles of
Incorporation require the Registrant to indemnify its directors and officers
to the fullest extent permitted from time to time by the laws of Maryland.
The Bylaws of the Registrant contain provisions which implement the
indemnification provisions of the Articles of Incorporation.
The Maryland General Corporation Law (the "MGCL") permits a
corporation to indemnify its directors and officers, among others, against
judgments, penalties, fines, settlements and reasonable expenses actually
incurred by them in connection with any proceeding to which they may be made a
party by reason of their service in those or other capacities unless it is
established that the act or omission of the director or officer was material
to the matter giving rise to the proceeding and was committed in bad faith or
was the result of active and deliberate dishonesty, or the director or officer
actually received an improper personal benefit in money, property or services,
or in the case of any criminal proceeding, the director or officer had
reasonable cause to believe that the act or omission was unlawful. No
amendment of the Articles of Incorporation of the Registrant may limit or
eliminate the right to indemnification provided with respect to acts or
omissions occurring prior to such amendment or repeal. Maryland law
<PAGE>
3
permits the Registrant to provide indemnification to an officer to the same
extent as a director, although additional indemnification may be provided
if such officer is not also a director.
The MGCL permits the articles of incorporation of a Maryland
corporation to include a provision limiting the liability of its directors and
officers to the corporation and its stockholder for money damages, subject to
specified restrictions. The MGCL does not, however, permit the liability of
directors and officers to the corporation or its stockholders to be limited to
the extent that (1) it is proved that the person actually received an improper
benefit or profit in money, property or services (to the extent such benefit
or profit was received) or (2) a judgment or other final adjudication adverse
to such person is entered in a proceeding based on a finding that the person's
action, or failure to act, was the result of active and deliberate dishonesty
and was material to the cause of action adjudicated in the proceeding. The
Articles of Incorporation of the Registrant contain a provision consistent
with the MGCL. No amendment of the Articles of Incorporation of the
Registrant shall limit or eliminate the limitation of liability with respect
to acts or omissions occurring prior to such amendment or repeal.
The Partnership Agreements also provide for indemnification of the
Registrant and its officers and directors to the same extent indemnification
is provided to officers and directors of the Company in its Articles of
Incorporation, and limit the liability of the Registrant and its officers and
directors to such partnerships and their partners to the same extent liability
of officers and directors of the Registrant to the Registrant and its
stockholders is limited under the Registrant's Articles of Incorporation.
The Registrant has entered into indemnification agreements with its
directors and officers. The indemnification agreements require, among other
things, that the Company indemnify its directors and officers to the fullest
extent permitted by law, and advance to the directors and officers all related
expenses, subject to reimbursement if it is subsequently determined that
indemnification is not permitted. The Registrant also must indemnify and
advance all expenses incurred by directors and officers seeking to enforce
their rights under the indemnification agreements, and cover each director and
officer if the Registrant obtains directors' and officers' liability
insurance. Although the form of indemnification agreement offers
substantially the same scope of coverage afforded by provisions in the
Articles of Incorporation and the Bylaws and the Partnership Agreements, it
provides greater assurance to directors and officers that indemnification will
be available, because, as a contract, it cannot be modified unilaterally in
the future by the Board of Directors or by the stockholders to eliminate the
rights it provides.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
The exhibits to this Post-Effective Amendment No. 1 are listed on
the Exhibit Index on page 9 hereto.
Item 9. Undertakings
The Registrant hereby undertakes:
<PAGE>
4
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than 20 percent change in the maximum aggregate offering price set forth
in the "Calculation of Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report pursuant
to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant
to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated
by reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of
<PAGE>
5
appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
<PAGE>
6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Indianapolis, State of Indiana, on
August 9, 1996.
SIMON DEBARTOLO GROUP, INC.
By: /s/ DAVID SIMON
------------------------------
David Simon
(Chief Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.
Name Title Date
* Co-Chairman of the Board
- ------------------------ of Director
MELVIN SIMON
* Co-Chairman of the Board
- ------------------------ of Directors
HERBERT SIMON
<PAGE>
7
Name Title Date
Chief Executive Officer
/s/ DAVID SIMON and Director (Principal August 9, 1996
- ------------------------- Executive Officer,
DAVID SIMON Principal Financial Officer
and Accounting Officer)
President, Chief Operating
- -------------------------- Officer and Director
RICHARD S. SOKOLOV
* Director
- --------------------------
BIRCH BAYH
Director
- ---------------------------
EDWARD J. DEBARTOLO, JR.
* Director
- ---------------------------
WILLIAM DILLARD, II
- --------------------------- Director
G. WILLIAM MILLER
- --------------------------- Director
FREDERIC W. PETRI
* Director
- ---------------------------
TERRY S. PRINDIVILLE
* Director
- ----------------------------
J. ALBERT SMITH JR.
Director
- ----------------------------
PHILLIP J. WARD
_____________________________ Director
MARIE DENISE DEBARTOLO YORK
<PAGE>
8
Name Title Date
By: /s/ DAVID SIMON August 9, 1996
- ---------------------------
(David Simon)
as Attorney-in-fact
<PAGE>
9
EXHIBIT INDEX
Exhibit Sequentially
Number Numbered Page
3.1 Articles of Incorporation, as amended, of the Registrant
3.2 By-laws, as amended, of the Registrant
5.1 Opinion of Piper & Marbury, as to the legality of the
Common Stock being registered hereby {1/}
8.1 Opinions of Paul, Weiss, Rifkind, Wharton & Garrison
8.2 Opinion of Willkie Farr & Gallagher
23.1 Consent of Arthur Andersen LLP
23.2 Consent of Piper & Marbury{2/}
99.1 Simon DeBartolo Group, Inc. Stock Incentive Plan
99.2 Severance Program of DeBartolo Realty Corporation and
DeBartolo Properties Management, Inc.{3/}
- ---------------------
{1/} Incorporated by reference to the corresponding exhibit to the
Company's Registration Statement on Form S-4 filed June 27, 1996
(Registration No. 333-06933).
{2/} Included in Exhibit 5.1 to this Post-Effective Amendment No. 1.
{3/} Incorporated by reference to the Company's Quarterly Report on Form
10-Q for the calendar quarter ended March 31, 1996, as amended by Form
10-Q/A-1 (filed on June 27, 1996).
SIMON PROPERTY GROUP, INC.
ARTICLES OF AMENDMENT AND RESTATEMENT
SIMON PROPERTY GROUP, INC., a Maryland corporation, having its
principal office in Baltimore City, Maryland (which is hereinafter called
the "Corporation"), hereby certifies to the State Department of
Assessments and Taxation of Maryland that:
FIRST: The name of the Corporation is hereby changed and the
Charter of the Corporation is hereby amended and restated to read in its
entirety as follows:
SIMON DeBARTOLO GROUP, INC.
AMENDED AND RESTATED ARTICLES OF INCORPORATION
FIRST: THE UNDERSIGNED, James J. Winn, Jr., whose address is
Charles Center South, 36 South Charles Street, Baltimore, Maryland 21201,
being at least eighteen years of age, acting as incorporator, does hereby
form a corporation under the General Laws of the State of Maryland.
SECOND: The name of the corporation (which is hereinafter called
the "Corporation") is:
Simon DeBartolo Group, Inc.
THIRD: (a) The purposes for which and any of which the Corporation
is formed and the business and objects to be carried on and promoted by
it are:
(1) To engage in the business of a real estate investment
trust ("REIT") as that phrase is defined in the Internal
Revenue Code of 1986, as amended (the "Code"), and to engage in
any lawful act or activity for which corporations may be
organized under the Maryland General Corporation Law.
(2) To engage in any one or more businesses or
transactions, or to acquire all or any portion of any entity
engaged in any one or more businesses or transactions, which
the Board of Directors may from time to time authorize or
approve, whether or not related to the business described
elsewhere in this Article or to any other business at the time
or theretofore engaged in by the Corporation.
(b) The foregoing enumerated purposes and objects shall be in
no way limited or restricted by reference to, or inference from, the
terms of any other clause of this or any other Article of the Charter of
the Corporation, and each shall be regarded as independent; and they are
intended to be and shall be construed as powers as well as purposes and
objects of the Corporation and shall be in addition to and not in
limitation of the general powers of corporations under the General Laws
of the State of Maryland.
FOURTH: The present address of the principal office of the
Corporation in the State of Maryland is c/o The Corporation Trust
Incorporated, 32 South Street, Baltimore, Maryland 21202.
<PAGE>
2
FIFTH: The name and address of the resident agent of the
Corporation in this State is The Corporation Trust Incorporated, 32 South
Street, Baltimore, Maryland 21202. Said resident agent is a Maryland
corporation.
SIXTH: (a) The total number of shares of stock of all classes
which the Corporation has authority to issue is 650,000,000 shares of
capital stock (par value $.0001 per share), amounting in aggregate par
value to $65,000.00, of which shares 383,996,000 are classified as
"Common Stock", 12,000,000 are classified as "Class B Common Stock",
4,000 are classified as "Class C Common Stock," 4,000,000 are classified
as "Series A Preferred Stock," and 250,000,000 are classified as "Excess
Stock". The Board of Directors may classify and reclassify any unissued
shares of capital stock by setting or changing in any one or more
respects the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications or terms or
conditions of redemption of such shares of stock.
(b) The following is a description of the preferences,
conversion and other rights, voting powers, restrictions, limitations as
to dividends, qualifications and terms and conditions of redemption of
the Common Stock of the Corporation:
(1) Each share of Common Stock shall have one vote, and,
except as otherwise provided in respect of any class of stock
hereafter classified or reclassified, and except as otherwise
provided with respect to directors elected by the holders of
the Class B Common Stock or of the Class C Common Stock, each
voting as a separate class, the exclusive voting power for all
purposes shall be vested in the holders of the Common Stock,
the Class B Common Stock, the Class C Common Stock, and the
Series A Preferred Stock, voting together as a single class.
Shares of Common Stock shall not have cumulative voting rights.
(2) Subject to the provisions of law and any preferences
of any class of stock hereafter classified or reclassified,
dividends, or other distributions, including dividends or other
distributions payable in shares of another class of the
Corporation's stock, may be paid ratably on the Common Stock at
such time and in such amounts as the Board of Directors may
deem advisable, but only if at the same time, dividends are
paid on outstanding shares of Class B Common Stock and Class C
Common Stock in accordance with subparagraphs (c)(2) and (c-
1)(2), respectively, of this Article Sixth.
(3) In the event of any liquidation, dissolution or
winding up of the Corporation, whether voluntary or
involuntary, the holders of the Common Stock shall be entitled,
together with the holders of Class B Common Stock, Class C
Common Stock, Excess Stock and any other class of stock
hereafter classified or reclassified not having a preference on
distributions in the liquidation, dissolution or winding up of
the Corporation, to share ratably in the net assets of the
Corporation remaining, after payment or provision for payment
of the debts and other
<PAGE>
3
liabilities of the Corporation and the
amount to which the holders of any class of stock hereafter
classified or reclassified having a preference on distributions
in the liquidation, dissolution or winding up of the
Corporation shall be entitled.
(4) Each share of Common Stock is convertible into Excess
Stock as provided in Article NINTH hereof.
(c) The following is a description (which should be read in
conjunction with paragraph (c-1) of this Article SIXTH) of the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption of the Class B Common Stock of the Corporation:
(1) Each share of Class B Common Stock shall have one
vote, and, except as otherwise provided in respect of any class
of stock hereafter classified or reclassified and except as
otherwise provided in this paragraph (c) and in paragraph (c-
1), the exclusive voting power for all purposes shall be vested
in the holders of the Class B Common Stock, the Class C Common
Stock, the Common Stock, and the Series A Preferred Stock
voting together as a single class. Shares of Class B Common
Stock shall not have cumulative voting rights. The holders of
the shares of Class B Common Stock shall have the right, voting
as a separate class, to elect four directors of the Corporation
and shall vote with the holders of the Class C Common Stock,
the Common Stock, and the Series A Preferred Stock (voting
together as a single class) to elect the remaining directors
(other than the director or directors to be elected by the
holders of the Class C Common Stock voting as a separate
class); provided that if the Simon Family Group (as defined in
Article NINTH) shall sell or transfer a portion of their Common
Stock, Class B Common Stock and Units (as defined in Article
NINTH) so as to reduce their Aggregate Assumed Equity Interest
in the Corporation (as defined in Article NINTH) to less than
50% of the Simon Family Group Initial Aggregate Assumed Equity
Interest (as defined in Article NINTH) in the Corporation, from
and after the date of such reduction the holders of the shares
of Class B Common Stock shall have the right, voting as a
separate class, to elect two directors of the Corporation. For
purposes of this subparagraph, shares held in a voting trust
shall be deemed owned by the beneficiaries of the voting trust.
(2) Subject to the provisions of law and the preferences
of the Series A Preferred Stock and of any class of stock
hereafter classified or reclassified, dividends or other
distributions, including dividends or other distributions
payable in shares of another class of the Corporation's stock,
may be paid ratably on the Class B Common Stock at such time
and in such amounts as the Board of Directors may deem
advisable; provided that cash dividends or other distributions
shall be paid on each share of Class B Common Stock at the same
time as cash dividends or other
<PAGE>
4
distributions are paid on
Common Stock or Class C Common Stock and in an amount equal to
the amount payable on the number of shares of Common Stock into
which each share of Class B Common Stock is then convertible;
provided further that non-cash dividends or other non-cash
distributions (including the issuance of warrants or rights to
acquire securities of the Corporation) shall be distributed on
each share of Class B Common Stock at the same time as such
non-cash dividends or other non-cash distributions are
distributed on Common Stock or Class C Common Stock and in an
amount equal to the amount distributable on the number of
shares of Common Stock into which each share of Class B Common
Stock is then convertible; provided further that any dividends
or other distributions payable otherwise on the Class B Common
Stock shall be paid in shares of Common Stock or securities
convertible or exchangeable into Common Stock (or warrants or
rights issued to acquire Common Stock or securities convertible
or exchangeable into Common Stock).
(3) (A) Each share of Class B Common Stock is
convertible into Excess Stock as provided in Article NINTH
hereof. Each share of Class B Common Stock may be converted at
the option of the holder thereof into one share of Common
Stock. Immediately and automatically each share of Class B
Common Stock shall be converted into one share of Common Stock
(i) if the Aggregate Assumed Equity Interest in the Corporation
of the Simon Family Group is for any reason reduced to less
than 5% of the Aggregate Assumed Equity Interest in the
Corporation or (ii) if such share of Class B Common Stock is
otherwise sold or otherwise transferred to or is otherwise held
by anyone other than a member of the Simon Family Group. For
purposes of this subparagraph, shares held in a voting trust
shall be deemed owned by the beneficiaries of the voting trust.
(B) The Corporation may not subdivide its
outstanding shares of Common Stock, combine its outstanding
shares of Common Stock into a smaller number of shares, or
issue by reclassification of its shares of Common Stock any
shares of the Corporation without making the same adjustment to
the Class B Common Stock. The Corporation shall not distribute
to all holders of its Common Stock evidences of its
indebtedness or assets (excluding cash dividends or other
distributions to the extent permitted by subparagraph (c)(2) of
this Article SIXTH) or rights or warrants to subscribe for or
purchase securities issued by the Corporation or property of
the Corporation (excluding those referred to in subparagraph
(c)(2) of this Article SIXTH), without making the same
distribution to all holders of its Class B Common Stock. No
adjustment of the conversion rate shall be made as a result of
or in connection with the issuance of Common Stock of the
Corporation pursuant to options or stock purchase agreements
now or hereafter granted or entered into with officers or
employees of the Corporation or its subsidiaries in connection
<PAGE>
5
with their employment, whether entered into at the beginning of
the employment or at any time thereafter. In case of any
capital reorganization of the Corporation, or the consolidation
or merger of the Corporation with or into another corporation,
or a statutory share exchange, or the sale, transfer or other
disposition of all or substantially all of the property, assets
or business of the Corporation then, in each such case, each
share of Common Stock and each share of Class B Common Stock
shall be treated the same.
(C) Upon conversion of any shares of Class B Common
Stock, no payment or adjustment shall be made on account of
dividends accrued, whether or not in arrears, on such shares or
on account of dividends declared and payable to holders of
Common Stock of record on a date prior to the date of
conversion.
(D) Except with respect to shares of Class B Common
Stock which have been deemed to have been automatically
converted into Common Stock pursuant to subparagraph (c)(3)(A)
of this Article SIXTH, in order to convert shares of Class B
Common Stock into Common Stock the holder thereof shall
surrender at the office of the Transfer Agent the certificate
or certificates therefor, duly endorsed to the Corporation or
in blank, and give written notice to the Corporation at said
office that he elects to convert such shares and shall state in
writing therein the name or names (with addresses) in which he
wishes the certificate or certificates for Common Stock to be
issued. Shares of Class B Common Stock shall be deemed to have
been converted on the date of the surrender of such certificate
or certificates for shares for conversion as provided above,
and the person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes
as the record holder or holders of such Common Stock on such
date. As soon as practicable on or after the date of
conversion as aforesaid, the Corporation will issue and deliver
at said office a certificate or certificates for the number of
full shares of Common Stock issuable upon such conversion,
together with cash for any fraction of a share, as provided in
subparagraph (c)(3)(F) of this Article SIXTH, to the person or
persons entitled to receive the same. The Corporation will pay
any and all federal original issue taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on
conversion of shares of Class B Common Stock pursuant hereto.
The Corporation shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock in a name other
than that in which the shares of Class B Common Stock so
converted were registered, and no issue or delivery shall be
made unless and until the person requesting such issue has paid
to the Corporation the amount of any such tax, or has
established to the satisfaction of the Corporation either that
such tax has been paid or that no such tax is payable.
<PAGE>
6
(E) All shares of Class B Common Stock converted
into Common Stock shall be retired and canceled and shall not
be reissued as Class B Common Stock but such shares so retired
and canceled shall resume the status of authorized and
unclassified shares of Common Stock.
(F) The Corporation shall not issue fractional
shares of Common Stock upon any conversion of shares of Class B
Common Stock. As to any final fraction of a share which the
holder of one or more shares of Class B Common Stock would be
entitled to receive upon exercise of such holder's conversion
right the Corporation shall pay a cash adjustment in an amount
equal to the same fraction of the Market Price (as defined in
Article NINTH) for the date of exercise.
(G) The Corporation shall at all times have
authorized and unissued a number of shares of Common Stock
sufficient for the conversion of all shares of Class B Common
Stock at the time outstanding. If any shares of Common Stock
require registration with or approval of any governmental
authority under any Federal or State law, before such shares
may be validly issued upon conversion, then the Corporation
will in good faith and as expeditiously as possible endeavor to
secure such registration or approval as the case may be. The
Corporation warrants that all Common Stock issued upon
conversion of shares of Class B Common Stock will upon issue be
fully paid and nonassessable by the Corporation and free from
original issue taxes.
(4) Subject to the provisions of law and the preferences
of the Series A Preferred Stock and of any class of stock
hereafter classified or reclassified, in the event of any
liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the holders of Class B Common
Stock shall be entitled, together with the holders of Class C
Common Stock, Common Stock, Excess Stock and any other class of
stock hereafter classified or reclassified not having a
preference on distributions in the liquidation, dissolution or
winding up of the Corporation, to share ratably in the net
assets of the Corporation remaining, after payment or provision
for payment of the debts and other liabilities of the
Corporation and the amount to which the holders of the Series A
Preferred Stock and of any class of stock hereafter classified
or reclassified having a preference on distributions in the
liquidation, dissolution or winding up of the Corporation shall
be entitled.
(c-1) The following is a description (which should be read in
conjunction with paragraph (c) of this Article SIXTH) of the preferences,
conversion and other rights, voting powers, restrictions, limitations as
to dividends, qualifications and terms and conditions of redemption of
the Class C Common Stock of the Corporation:
(1) Each share of Class C Common Stock shall have one
vote, and, except as otherwise provided in respect of any class
of stock
<PAGE>
7
hereafter classified or reclassified and except as
otherwise provided in this paragraph (c-1) and in paragraph
(c), the exclusive voting power for all purposes shall be
vested in the holders of the Class C Common Stock, the Class B
Common Stock, the Common Stock, and the Series A Preferred
Stock voting together as a single class. Shares of Class C
Common Stock shall not have cumulative voting rights. Subject
to paragraph (b) of Article SEVENTH, the holders of the shares
of Class C Common Stock shall have the right, voting as a
separate class, to elect two directors of the Corporation and
shall vote with the holders of the Class B Common Stock, the
Common Stock, and the Series A Preferred Stock (voting together
as a single class) to elect the remaining directors (other than
the directors to be elected by the holders of the Class B
Common Stock voting as a separate class); provided that if the
DeBartolo Family Group (as defined in Article NINTH) shall sell
or transfer a portion of their Common Stock, Class C Common
Stock and Units (as defined in Article NINTH) so as to reduce
their Aggregate Assumed Equity Interest in the Corporation (as
defined in Article NINTH) to less than 50% of the DeBartolo
Family Group Initial Aggregate Assumed Equity Interest (as
defined in Article NINTH) in the Corporation, from and after
the date of such reduction the holders of the shares of Class C
Common Stock shall have the right, voting as a separate class,
to elect one director of the Corporation. For purposes of this
subparagraph, shares held in a voting trust shall be deemed
owned by the beneficiaries of the voting trust.
(2) Subject to the provisions of law and the preferences
of the Series A Preferred Stock and of any class of stock
hereafter classified or reclassified, dividends or other
distributions, including dividends or other distributions
payable in shares of another class of the Corporation's stock,
may be paid ratably on the Class C Common Stock at such time
and in such amounts as the Board of Directors may deem
advisable; provided that cash dividends or other distributions
shall be paid on each share of Class C Common Stock at the same
time as cash dividends or other distributions are paid on
Common Stock or Class B Common Stock and in an amount equal to
the amount payable on the number of shares of Common Stock into
which each share of Class C Common Stock is then convertible;
provided further that non-cash dividends or other non-cash
distributions (including the issuance of warrants or rights to
acquire securities of the Corporation) shall be distributed on
each share of Class C Common Stock at the same time as such
non-cash dividends or other non-cash distributions are
distributed on Common Stock or Class B Common Stock and in an
amount equal to the amount distributable on the number of
shares of Common Stock into which each share of Class C Common
Stock is then convertible; provided further that any dividends
or other distributions payable otherwise on the Class C Common
Stock shall be paid in shares of Common Stock or securities
convertible or exchangeable into Common Stock (or warrants or
rights issued to acquire
<PAGE>
8
Common Stock or securities convertible or exchangeable into Common
Stock).
(3) (A) Each share of Class C Common Stock is
convertible into Excess Stock as provided in Article NINTH
hereof. Each share of Class C Common Stock may be converted at
the option of the holder thereof into one share of Common
Stock. Immediately and automatically each share of Class C
Common Stock shall be converted into one share of Common Stock
(i) if the Aggregate Assumed Equity Interest in the Corporation
of the DeBartolo Family Group is for any reason reduced to less
than 5% of the Aggregate Assumed Equity Interest in the
Corporation or (ii) if such share of Class C Common Stock is
otherwise sold or otherwise transferred to or is otherwise held
by anyone other than a member of the DeBartolo Family Group.
For purposes of this subparagraph, shares held in a voting
trust shall be deemed owned by the beneficiaries of the voting
trust.
(B) The Corporation may not subdivide its
outstanding shares of Common Stock, combine its outstanding
shares of Common Stock into a smaller number of shares, or
issue by reclassification of its shares of Common Stock any
shares of the Corporation without making the same adjustment to
the Class C Common Stock. The Corporation shall not distribute
to all holders of its Common Stock evidences of its
indebtedness or assets (excluding cash dividends or other
distributions to the extent permitted by subparagraph (c-1)(2)
of this Article SIXTH) or rights or warrants to subscribe for
or purchase securities issued by the Corporation or property of
the Corporation (excluding those referred to in subparagraph
(c-1)(2) of this Article SIXTH), without making the same
distribution to all holders of its Class C Common Stock. No
adjustment of the conversion rate shall be made as a result of
or in connection with the issuance of Common Stock of the
Corporation pursuant to options or stock purchase agreements
now or hereafter granted or entered into with officers or
employees of the Corporation or its subsidiaries in connection
with their employment, whether entered into at the beginning of
the employment or at any time thereafter. In case of any
capital reorganization of the Corporation, or the consolidation
or merger of the Corporation with or into another corporation,
or a statutory share exchange, or the sale, transfer or other
disposition of all or substantially all of the property, assets
or business of the Corporation then, in each such case, each
share of Common Stock and each share of Class C Common Stock
shall be treated the same.
(C) Upon conversion of any shares of Class C Common
Stock, no payment or adjustment shall be made on account of
dividends accrued, whether or not in arrears, on such shares or
on account of dividends declared and payable to holders of
Common Stock of record on a date prior to the date of
conversion.
<PAGE>
9
(D) Except with respect to shares of Class C Common
Stock which have been deemed to have been automatically
converted into Common Stock pursuant to subparagraph (c-
1)(3)(A) of this Article SIXTH, in order to convert shares of
Class C Common Stock into Common Stock the holder thereof shall
surrender at the office of the Transfer Agent the certificate
or certificates therefor, duly endorsed to the Corporation or
in blank, and give written notice to the Corporation at said
office that he elects to convert such shares and shall state in
writing therein the name or names (with addresses) in which he
wishes the certificate or certificates for Common Stock to be
issued. Shares of Class C Common Stock shall be deemed to have
been converted on the date of the surrender of such certificate
or certificates for shares for conversion as provided above,
and the person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes
as the record holder or holders of such Common Stock on such
date. As soon as practicable on or after the date of
conversion as aforesaid, the Corporation will issue and deliver
at said office a certificate or certificates for the number of
full shares of Common Stock issuable upon such conversion,
together with cash for any fraction of a share, as provided in
subparagraph (c-1)(3)(F) of this Article SIXTH, to the person
or persons entitled to receive the same. The Corporation will
pay any and all federal original issue taxes that may be
payable in respect of the issue or delivery of shares of Common
Stock on conversion of shares of Class C Common Stock pursuant
hereto. The Corporation shall not, however, be required to pay
any tax which may be payable in respect of any transfer
involved in the issue and delivery of shares of Common Stock in
a name other than that in which the shares of Class C Common
Stock so converted were registered, and no issue or delivery
shall be made unless and until the person requesting such issue
has paid to the Corporation the amount of any such tax, or has
established to the satisfaction of the Corporation either that
such tax has been paid or that no such tax is payable.
(E) All shares of Class C Common Stock converted
into Common Stock shall be retired and canceled and shall not
be reissued as Class C Common Stock but such shares so retired
and canceled shall resume the status of authorized and
unclassified shares of Common Stock.
(F) The Corporation shall not issue fractional
shares of Common Stock upon any conversion of shares of Class C
Common Stock. As to any final fraction of a share which the
holder of one or more shares of Class C Common Stock would be
entitled to receive upon exercise of such holder's conversion
right the Corporation shall pay a cash adjustment in an amount
equal to the same fraction of the Market Price (as defined in
Article NINTH) for the date of exercise.
<PAGE>
10
(G) The Corporation shall at all times have
authorized and unissued a number of shares of Common Stock
sufficient for the conversion of all shares of Class C Common
Stock at the time outstanding. If any shares of Common Stock
require registration with or approval of any governmental
authority under any Federal or State law, before such shares
may be validly issued upon conversion, then the Corporation
will in good faith and as expeditiously as possible endeavor to
secure such registration or approval as the case may be. The
Corporation warrants that all Common Stock issued upon
conversion of shares of Class C Common Stock will upon issue be
fully paid and nonassessable by the Corporation and free from
original issue taxes.
(4) Subject to the provisions of law and the preferences
of the Series A Preferred Stock and of any class of stock
hereafter classified or reclassified, in the event of any
liquidation, dissolution or winding up of the Corporation,
whether voluntary or involuntary, the holders of Class C Common
Stock shall be entitled, together with the holders of Class B
Common Stock, Common Stock, Excess Stock and any other class of
stock hereafter classified or reclassified not having a
preference on distributions in the liquidation, dissolution or
winding up of the Corporation, to share ratably in the net
assets of the Corporation remaining, after payment or provision
for payment of the debts and other liabilities of the
Corporation and the amount to which the holders of the Series A
Preferred Stock and any class of stock hereafter classified or
reclassified having a preference on distributions in the
liquidation, dissolution or winding up of the Corporation shall
be entitled.
(c-2) Subject in all cases to the provisions of Article NINTH
with respect to Excess Stock, the following is a description of the
preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends, qualifications and terms and conditions of
redemption of the Series A Preferred Stock of the Corporation:
(1) All shares of Series A Preferred Stock redeemed,
purchased, exchanged or otherwise acquired by the Corporation
as provided in this paragraph (c-2) shall be retired and
canceled and, upon the taking of any action required by
applicable law, shall be restored to the status of authorized
but unissued shares of capital stock and reclassified as Common
Stock, and may thereafter be issued or reclassified, but not as
Series A Preferred Stock.
(2) The Series A Preferred Stock shall, with respect to
dividend rights, rights upon liquidation, winding up or
dissolution, and redemption rights, rank (A) junior to any
other class or series of preferred stock hereafter duly
established by the Board of Directors of the Corporation, the
terms of which shall specifically provide that such series
shall rank prior to the Series A Preferred Stock as to the
payment of dividends and distribution of assets upon
liquidation (the "Senior Preferred Stock"), (B)
<PAGE>
11
PARI PASSU with
any other class or series of preferred stock hereafter duly
established by the Board of Directors of the Corporation, the
terms of which shall specifically provide that such class or
series shall rank PARI PASSU with the Series A Preferred Stock
as to the payment of dividends and distribution of assets upon
liquidation (the "Parity Preferred Stock") and (C) prior to any
other class or series of preferred stock or other class or
series of capital stock of or other equity interests in the
Corporation, including, without limitation, all classes of the
common stock of the Corporation, whether now existing or
hereafter created (all of such classes or series of capital
stock and other equity interests of the Corporation, including,
without limitation, the Common Stock, the Class B Common Stock,
and the Class C Common Stock, all $0.0001 par value, of the
Corporation are collectively referred to herein as the "Junior
Securities").
(3) (A) Except as may be required by law or as otherwise
expressly provided in this subparagraph (c-2)(3), on all
matters upon which the holders of shares of Common Stock shall
be entitled to vote, the shares of Common Stock and Series A
Preferred Stock shall be voted together as a single class, and
each share of Series A Preferred Stock shall be entitled to one
vote (or fraction thereof) for each share (or fraction thereof)
of Common Stock issuable upon conversion, pursuant to
subparagraph (c-2)(5), of such share of Series A Preferred
Stock, determined as of the close of business on the record
date established by the Board of Directors of the Corporation
for the purpose of voting on such matter.
(B) If, and whenever, at any time or times,
dividends payable on shares of Series A Preferred Stock shall
have been in arrears and unpaid (whether or not declared and
whether or not there are funds of the Corporation legally
available for the payment of dividends) for four consecutive
quarterly dividend periods, then the holders of record of
shares of Series A Preferred Stock, as reflected in the stock
transfer records of the Corporation (the "Holders") shall, in
addition to any other voting rights, have the right to vote
separately as a single class with respect to (i) any
acquisition of the Corporation by another entity by means of
any transaction or series of related transactions (including,
without limitation, any reorganization, merger or
consolidation, but excluding any merger effected exclusively
for the purpose of changing the domicile of the Corporation) or
(ii) any sale of all or substantially all of the assets of the
Corporation; UNLESS, in each such case, either (A) the Holders
of record of the Corporation's securities as constituted
immediately prior to such acquisition or sale will, immediately
after such acquisition or sale (by virtue of securities issued
as consideration for such acquisition or sale or otherwise),
hold at least 50% of the aggregate voting power of all classes
of voting securities of the surviving or acquiring entity or
(B) the terms of such acquisition or sale require, as a
condition precedent to the consummation thereof, the payment in
full of all accrued
<PAGE>
12
and unpaid dividends (whether or not
declared and whether or not there are funds of the Corporation
legally available for the payment of dividends) on the Series A
Preferred Stock.
(C) So long as any shares of Series A Preferred
Stock are outstanding, the Corporation will not, without the
affirmative vote of at least 80% of the outstanding shares of
Series A Preferred Stock (or such greater number as may be
required by law), voting separately as a single class, in
person or by proxy, at a special or annual meeting called for
the purpose, or by unanimous written consent in lieu of a
meeting: (i) effect or allow any amendment, alteration or
repeal of any of the provisions of the Charter of the
Corporation or of any articles amendatory thereof or supplement
thereto which in any manner would adversely affect, alter or
change the powers, preferences or rights of any share of Series
A Preferred Stock; or (ii) create, authorize or issue any class
or series of Senior Preferred Stock.
(4) (A) The Holders of shares of Series A Preferred
Stock shall be entitled to receive, when and as declared by the
Board of Directors of the Corporation, quarterly dividends on
the shares of Series A Preferred Stock, cumulative from the
initial date of issuance of such shares (the "Issue Date"), in
an amount equal to the greater of (i) $0.5078125 per share per
calendar quarter or (ii) an amount per share equal to the
dividends paid since the last Dividend Payment Date (as
hereinafter defined) with respect to the number of shares of
Common Stock then issuable upon conversion of a share of Series
A Preferred Stock. Dividends on the shares of Series A
Preferred Stock shall be payable on the last Business Day (as
hereinafter defined) of each calendar quarter, commencing on
the last Business Day of the fourth calendar quarter of 1995
(each such last Business Day of a calendar quarter being a
"Dividend Payment Date"). Such dividends shall be paid to the
Holders of record at the close of business on the record date
specified by the Board of Directors of the Corporation at the
time such dividend is declared; PROVIDED, HOWEVER, that such
record date shall not be more than 60 days nor less than 10
days prior to the respective Dividend Payment Date. Dividends
on the shares of Series A Preferred Stock shall be fully
cumulative and shall accrue (whether or not declared and
whether or not there are funds of the Corporation legally
available for the payment of dividends) from the Issue Date,
based on a 91-day quarter and the actual number of days
elapsed. As used in this paragraph (c-2), "Business Day" shall
mean any day (other than a day which is a Saturday, Sunday or
legal holiday in the State of New York) on which banks are
authorized to be open for business in New York City.
(B) Any dividend payment made on shares of Series A
Preferred Stock shall first be credited against the dividends
accrued with
<PAGE>
13
respect to the earliest quarterly period for which
dividends have not been paid.
(C) All dividends paid with respect to shares of
Series A Preferred Stock pursuant to this subparagraph (c-2)(4)
shall be paid pro rata to the Holders entitled thereto.
(5) The Holders of shares of Series A Preferred Stock
shall have the right, at their option, to convert such shares
into shares of Common Stock at any time on or after the second
anniversary of the Issue Date, subject to the following terms
and conditions:
(A) Each share of Series A Preferred Stock shall be
convertible, at the option of the Holder thereof, into such
number of fully paid and nonassessable shares of Common Stock
of the Corporation equal to $25.00 divided by the Conversion
Price (as hereinafter defined) in effect at the time of
conversion. The price at which shares of Common Stock shall be
delivered upon conversion (herein called the "Conversion
Price") shall be initially $26.25 per share of Common Stock.
The Conversion Price shall be reduced and increased in certain
instances as provided in subparagraph (c-2)(7) below. The
number of shares of Common Stock into which each share of
Series A Preferred Stock is convertible on the Issue Date is
0.9523809.
(B) In order to convert shares of Series A Preferred
Stock into Common Stock the Holder thereof shall surrender to
the Corporation the certificate or certificates therefor, duly
endorsed or assigned to the Corporation or in blank, and give
written notice to the Corporation that such Holder elects to
convert such shares. No payment or adjustment shall be made
upon any conversion on account of any dividends accrued on the
shares of Series A Preferred Stock being surrendered for
conversion or on account of any dividends on the Common Stock
issued upon such conversion.
(C) Shares of Series A Preferred Stock shall be
deemed to have been converted immediately prior to the close of
business on the day of the surrender of such shares for
conversion in accordance with subsection (c-2)(5)(B) above, and
the person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes
as the records holder or holders of such Common Stock at such
time. As promptly as practicable on or after the conversion
date, the Corporation shall issue and deliver a certificate or
certificates for the number of full shares of Common Stock
issuable upon such conversion, together with payment in lieu of
any fraction of a share, as hereinafter provided, to the person
or persons entitled to receive the same. In case shares of
Series A Preferred Stock are called for redemption, the right
to convert such shares shall cease and terminate at the close
of business on
<PAGE>
14
the date fixed for redemption, unless default
shall be made in payment of the redemption price on the
redemption date.
(D) No fractional shares of Common Stock shall be
issued upon conversion of any shares of Series A Preferred
Stock, but, instead of any fraction of a share which would
otherwise be issuable, the Corporation shall pay a cash
adjustment in respect of such fraction in an amount equal to
the same fraction of the Average Trading Price (as hereinafter
defined) of the Common Stock for the ten (10) trading days
ending on the day of conversion if the day of conversion is a
trading day (as hereinafter defined) or, if such day is not a
trading day, the most recent trading day immediately preceding
the day of conversion. As used in this paragraph (c-2), (i)
"Average Trading Price" shall mean the average of the Closing
Sale Price (as hereafter defined) reported for each trading day
within the period; (ii) "Closing Sale Price" on any trading day
shall mean, with respect to one share of Common Stock, the last
reported sale price regular way or, in case no such reported
sale takes place on such day, the average of the closing bid
and asked prices regular way for such day, in each case on the
New York Stock Exchange, or, if the Common Stock is not listed
or admitted to trading on such exchange, on the principal
national securities exchange on which the Common Stock is
listed or admitted to trading, or, if the Common Stock is not
listed or admitted to trading on any national securities
exchange, the average of the highest reported bid and lowest
reported asked prices as furnished by the National Association
of Securities Dealers, Inc. through NASDAQ or a similar
organization if NASDAQ is no longer reporting such information.
If on any such trading day the shares of Common Stock are not
quoted by any such organization, the Closing Sale Price of one
share on such day shall be the fair market value of one share
of Common Stock on such day, as determined in good faith by the
Board of Directors of the Corporation, whose determination
shall be evidenced by a duly adopted resolution of the Board of
Directors and shall be conclusive; and (iii) "Trading Day"
shall mean a day on which the New York Stock Exchange, or, if
the Common Stock is not listed or admitted to trading on such
exchange, such other exchange or market upon which the Closing
Sale Price is to be determined as hereinabove provided, is open
for trading.
(E) The Corporation shall at all times reserve and
keep available, free from pre-emptive rights, out of its
authorized but unissued Common Stock, for the purposes of
effecting the conversion of shares of Series A Preferred Stock,
the full number of shares of Common Stock then deliverable upon
the conversion of all shares of Series A Preferred Stock then
outstanding.
(F) Each share of Series A Preferred Stock is
convertible into Excess Stock as provided in Article NINTH.
<PAGE>
15
(6) (A) Upon a liquidation, dissolution or winding up of
the affairs of the Corporation, whether voluntary or
involuntary, the Holders of Series A Preferred Stock shall be
entitled, before any assets of the Corporation shall be
distributed among or paid over the holders of any Junior
Securities, but after distributions of such assets among, or
payment thereof over to, creditors of the Corporation and to
Holders of any Senior Preferred Stock, to receive from the
assets of the Corporation available for distribution to
stockholders an amount in cash or property (valued at its fair
market value), or a combination thereof, equal to $25.00 per
share (prorated for fractional shares), plus, in each such
case, an amount in cash or property (valued at its fair market
value) equal to all accrued and unpaid dividends thereon
(whether or not declared and whether or not there are funds of
the Corporation legally available for the payment of dividends)
to and including the date of final distribution. After any
such payment in full, the Holders of Series A Preferred Stock
shall not, as such, be entitled to any further participation in
any distribution of assets of the Corporation. As used in this
subparagraph (c-2)(6), the terms "liquidation preference" and
"liquidation value" (and other terms of similar import) shall
mean $25.00 per share.
(B) Neither the merger or consolidation of the
Corporation into or with any other corporation or the merger or
consolidation of any other corporation into or with the
Corporation, nor the sale of all or substantially all the
assets of the Corporation, shall be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, for the
purposes of this subparagraph (c-2)(6).
(C) If, upon any such liquidation, dissolution or
winding up of the Corporation, whether voluntary or
involuntary, the assets of the Corporation shall be
insufficient to make the full payments required by subparagraph
(c-2)(6)(A) and all full distributions with respect to all
Parity Preferred Stock, no such distribution shall be made on
account of any shares of any Parity Preferred Stock or Series A
Preferred Stock unless proportionate distributive amounts shall
be paid on account of the shares of Series A Preferred Stock
and Parity Preferred Stock, ratably, in proportion to the full
distributable amounts to which Holders of the Series A
Preferred Stock and holders of all such Parity Preferred Stock
are respectively entitled upon such dissolution, liquidation or
winding up.
(7) Shares of Series A Preferred Stock shall be
redeemable by the Corporation as provided below (with all
references in this subparagraph (c-2)(7) to a redemption price
per share to be adjusted proportionally in respect of
fractional shares):
(A)(i) At the option of the Corporation, shares of
Series A Preferred Stock may be redeemed, as a whole or from
time to time in part, at any time from and after the fifth
anniversary of the Issue Date, at
<PAGE>
16
the following redemption
prices per share: If redeemed during the 12-month period
beginning on the anniversary date of the Issue Date indicated,
REDEMPTION REDEMPTION
ANNIVERSARY PRICE ANNIVERSARY PRICE
Fifth $26.75 Ninth $25.75
Sixth $26.50 Tenth $25.50
Seventh $26.25 Eleventh $25.25
Eighth $26.00
and thereafter at a redemption price of $25.00 per share, in
each case payable in cash.
(ii) At the option of any Holder, at any time
specified by such Holder upon not less than 10 days notice
after receiving 60 days prior written notice of the Corporation
stating that the Corporation intends to issue shares of Common
Stock or other equity securities of the Corporation to any
"foreign person" (as such term is used in Section 897(h)(4)(B)
of the Internal Revenue Code of 1986, as amended, or any
successor provision), directly or indirectly, if such issuance
would result in ownership of 48% or more of the value of all
outstanding shares of Common Stock and other equity securities
of the Corporation, directly or indirectly, by "foreign
persons". The redemption price shall equal $25.00 per share
plus all accrued and unpaid dividends (whether or not declared
and whether or not there are funds of the Corporation legally
available for the payment of dividends) on such share.
(B) In addition to the redemption option set forth
in subparagraph (c-2)(7)(A) above, at the option of the
Corporation, shares of Series A Preferred Stock may be
redeemed, as a whole or from time to time in part, from and
after the second anniversary of the Issue Date and during any
period that the Closing Sale Price of the Common Stock exceeds
120% of the Conversion Price for any 20 trading days within a
period of 30 consecutive trading days, at a redemption price,
payable in shares of Common Stock, equal to that number of
shares of Common Stock then issuable upon conversion, pursuant
to subparagraph (c-2)(5) above, of the shares of Series A
Preferred Stock to be redeemed.
(C) The Corporation shall not redeem any shares of
Series A Preferred Stock pursuant to subparagraph (c-
2)(7)(A)(i) or subparagraph (c-2)(7)(B) above, unless and until
all accrued and unpaid dividends (whether or not declared and
whether or not there are funds of the Corporation legally
available for the payment of dividends) on the Series
<PAGE>
17
A Preferred Stock have been or contemporaneously are declared and
paid in full.
(D) Whenever shares of Series A Preferred Stock are
to be redeemed pursuant to subparagraph (c-2)(7)(A)(i) or
subparagraph (c-2)(7)(B) above, a notice of such redemption
shall be mailed, addressed to each Holder of the shares to be
redeemed, by first class mail, postage prepaid, or delivered to
each Holder of the shares to be redeemed at such Holder's
address as the same appears on the stock transfer records of
the Corporation. Such notice shall be mailed or delivered (i)
in the case of a redemption pursuant to subparagraph (c-
2)(7)(A)(i) above, not less than 60 days prior to the date
fixed for redemption or (ii) in the case of a redemption
pursuant to subparagraph (c-2)(7)(B) above, not less than 10
days prior to the date fixed for redemption. Each such notice
shall state: (i) the date fixed for redemption; (ii) the number
of shares to be redeemed; (iii) the redemption price; (iv) the
place or places where such shares are to be surrendered for
payment of the redemption price; and (v) that dividends on the
shares to be redeemed will cease to accrue on such date fixed
for redemption unless default shall be made in payment of the
redemption price on such date. If fewer than all shares of
Series A Preferred Stock held by a Holder are to be redeemed,
the notice mailed to such Holder shall specify the number of
shares to be redeemed from such Holder.
(E) Notice having been given as provided in
subparagraph (c-2)(7)(A)(ii) or subparagraph (c-2)(7)(D) above,
as applicable:
(i) in the case of a redemption pursuant to
subparagraphs (c-2)(7)(A)(i) or (ii) above, if on or before the
redemption date specified in such notice an amount in cash
sufficient to redeem in full, on the redemption date and at the
applicable redemption price, all shares of Series A Preferred
Stock called for redemption shall have been set apart and
deposited in trust so as to be available for such purpose and
only for such purpose, or shall have been paid to the Holders
thereof, then effective as of the close of business on such
redemption date, the shares of Series A Preferred Stock so
called for redemption shall cease to accrue dividends, and said
shares shall no longer be deemed to be outstanding and shall
have the status of authorized but unissued shares of capital
stock and be reclassified as Common Stock of the Corporation,
and all rights of the Holders thereof, as such as stockholders
of the Corporation (except the right to receive from the
Corporation the redemption price) shall cease;
(ii) in the case of redemption pursuant to
subparagraph (c-2)(7)(B) above, all shares of Series A
Preferred Stock called for redemption shall be deemed to have
been converted into shares of Common Stock in accordance with
subparagraph (c-2)(5) above immediately prior to the close of
business on the redemption date specified
<PAGE>
18
in such notice, and
the person or persons entitled to receive the Common Stock
issuable upon such conversion shall be treated for all purposes
as the record holder or holders of such Common Stock at such
time; and effective as of the close of business on such
redemption date, the shares of Series A Preferred Stock so
called for redemption shall cease to accrue dividends, and said
shares shall no longer be deemed to be outstanding and shall
have the status of authorized but unissued shares of Common
Stock of the Corporation, and all rights of the Holders
thereof, as such as stockholders of the Corporation (except the
right to receive from the Corporation the redemption price)
shall cease; and
(iii) in either such case, upon surrender in
accordance with said notice of the certificates for any shares
so redeemed (properly endorsed or assigned for transfer, if the
notice shall so state), such shares shall be redeemed by the
Corporation at the redemption price as aforesaid. In the case
of redemption pursuant to subparagraph (c-2)(7)(B) above, as
promptly as practicable on or after the date of such surrender,
the Corporation shall issue and deliver a certificate or
certificates for the number of full shares of Common Stock
issuable upon such redemption, together with payment in lieu of
any fraction of a share, to the person or persons entitled to
receive the same, all in accordance with the provisions of
subparagraph (c-2)(5) above. In case fewer than all the shares
of Series A Preferred Stock represented by any certificate so
surrendered are redeemed, a new certificate of like terms and
having the same date of original issuance shall be issued
representing the unredeemed shares of Series A Preferred Stock
without cost to the Holder thereof.
(F) In the event that fewer than all the shares of
Series A Preferred Stock are to be redeemed pursuant to
subparagraph (c-2)(7)(A)(i) or subparagraph (c-2)(7)(B) above,
the Corporation shall redeem shares of Series A Preferred Stock
pro rata among the Holders, based on the number of shares of
Series A Preferred Stock held by each Holder.
(G) Nothing contained in this subparagraph (c-2)(7)
shall limit any legal right of the Corporation to purchase or
otherwise acquire any shares of Series A Preferred Stock at any
price, whether higher or lower than the redemption price.
(8) (A) The Conversion Price and the number of shares of
Common Stock issuable upon the conversion of shares of Series A
Preferred Stock shall be subject to adjustment in case the
Corporation shall at any time after the Issue Date (i) pay a
dividend or make any other distribution to all holders of its
outstanding Common Stock, Class B Common Stock, or Class C
Common Stock in shares of Common Stock, Class B Common Stock,
or Class C Common Stock such that the total number of shares of
Common Stock, Class B Common Stock, and Class
<PAGE>
19
C Common Stock
outstanding is increased; (ii) subdivide or split-up its
outstanding shares of Common Stock, Class B Common Stock, or
Class C Common Stock into a greater total number of shares of
Common Stock, Class B Common Stock, and Class C Common Stock;
(iii) combine its outstanding shares of Common Stock, Class B
Common Stock, or Class C Common Stock into a smaller total
number of shares of Common Stock, Class B Common Stock, and
Class C Common Stock; (iv) issue by reclassification of its
shares of Common Stock, Class B Common Stock, or Class C Common
Stock other shares of capital stock of the Corporation; (v)
issue rights or warrants to all holders of its outstanding
Common Stock, Class B Common Stock, or Class C Common Stock
entitling them to subscribe for or purchase shares of Common
Stock, Class B Common Stock, or Class C Common Stock at a price
per share less than the Closing Sale Price of the Common Stock
on the trading day preceding the record date of such issuance
or (vi) in case the Corporation shall distribute to all holders
of its outstanding Common Stock, Class B Common Stock, or Class
C Common Stock evidences of its indebtedness or assets
(excluding cash dividends, dividends or distributions in shares
of Common Stock, Class B Common Stock, or Class C Common Stock
or rights or warrants to subscribe for or purchase securities
referred to in the preceding clause (v)). In any such event,
the number of shares of Common Stock issuable upon conversion
of each share of Series A Preferred Stock immediately prior
thereto shall be adjusted so that the Holder thereof shall be
entitled to receive the kind and number of shares of Common
Stock or other securities of the Corporation that such Holder
would have owned or would have been entitled to receive after
the happening of any of the events described above had such
share of Series A Preferred Stock been converted immediately
prior to the happening of such event or any record date with
respect thereto. An adjustment made pursuant to this
subparagraph (c-2)(8)(A) shall become effective immediately
after the effective date of such event, retroactive to the
record date, if any, for such event.
(B) Whenever the number of shares of Common Stock
issuable upon the conversion of shares of Series A Preferred
Stock is adjusted, as provided in subparagraph (c-2)(8)(A)
above, the Conversion Price shall be adjusted (calculated to
the nearest $.0001) by multiplying such Conversion Price
immediately prior to such adjustment by a fraction, the
numerator of which shall be the number of shares of Common
Stock issuable upon conversion of each share of Series A
Preferred Stock immediately prior to such adjustment, and the
denominator of which shall be the number of shares of Common
Stock so issuable immediately thereafter.
(C) Notwithstanding anything in this subparagraph
(c-2)(8), in no event will any adjustment be made to the
Conversion Price or the number of shares of Common Stock
issuable upon the conversion of
<PAGE>
20
shares of Series A Preferred
Stock solely as a result of any conversion of any shares of
Class B Common Stock or Class C Common Stock into shares of
Common Stock on a one-for-one basis.
(D) For purposes of this subparagraph (c-2)(8), the
term "shares of Common Stock" shall mean the class of stock
designated as the Common Stock of the Corporation at the Issue
Date. In the event that at any time, as a result of an
adjustment made pursuant to subparagraph (c-2)(8)(A) above, the
shares of Series A Preferred Stock shall become convertible
into any securities of the Corporation other than shares of
Common Stock, thereafter the number of such other securities so
issuable upon such conversion and the Conversion Price of such
securities shall be subject to adjustment from time to time in
a manner and on terms as nearly equivalent as practicable to
the provisions with respect to the shares of Common Stock.
(9) In case at any time:
(A) the Corporation shall set a record date for the
purpose of declaring a dividend (or any other distribution) on
the Common Stock, Class B Common Stock, or Class C Common Stock
payable otherwise than in cash out of its retained earnings; or
(B) the Corporation shall set a record date for the
granting to the holders of the Common Stock, Class B Common
Stock, or Class C Common Stock of rights or warrants to
subscribe for or purchase any shares of capital stock of any
class or of any other rights; or
(C) of any reclassification of the capital stock of
the Corporation (other than a subdivision or combination of its
outstanding shares of Common Stock, Class B Common Stock, or
Class C Common Stock), or of any consolidation or merger to
which the Corporation is a party and for which approval of any
stockholders of the Corporation is required, or of the sale or
transfer of all or substantially all of the assets of the
Corporation;
then, in any such case, the Corporation shall cause to be
mailed to the Holders of the Series A Preferred Stock, at least
20 days (or 10 days in any case specified in subparagraphs (c-
2)(9)(A) or (B) above) prior to the applicable record or
effective date hereinafter specified, a notice stating (i) the
date on which a record is to be taken for the purpose of such
dividend, distribution, rights or warrants, or, if a record is
not to be taken, the date as of which the holders of Common
Stock, Class B Common Stock, or Class C Common Stock of record
to be entitled to such dividend, distribution, rights or
warrants are to be determined, or (ii) the date on which such
reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become
<PAGE>
21
effective, and the date as of which it is expected that holders
of Common Stock, Class B Common Stock, or Class C Common Stock
of record shall be entitled to exchange their shares of Common
Stock, Class B Common Stock, or Class C Common Stock for
securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. In no event shall the
giving of such notice limit the Corporation's obligations to
adjust the Conversion Price and number of shares of Common
Stock issuable upon the conversion of shares of Series A
Preferred Stock upon the occurrence of the events specified in
subparagraph (c-2)(8) above.
(d) A description of the preferences, conversion and other
rights, voting powers, restrictions, limitations as to dividends,
qualifications and terms and conditions of redemption of the Excess Stock
of the Corporation is set forth in Article NINTH hereof.
(e) Subject to the foregoing, the power of the Board of
Directors to classify and reclassify any of the shares of capital stock
shall include, without limitation, subject to the provisions of the
Charter, authority to classify or reclassify any unissued shares of such
stock into a class or classes of preferred stock, preference stock,
special stock or other stock, and to divide and classify shares of any
class into one or more series of such class, by determining, fixing, or
altering one or more of the following:
(1) The distinctive designation of such class or series
and the number of shares to constitute such class or series;
provided that, unless otherwise prohibited by the terms of such
or any other class or series, the number of shares of any class
or series may be decreased by the Board of Directors in
connection with any classification or reclassification of
unissued shares and the number of shares of such class or
series may be increased by the Board of Directors in connection
with any such classification or reclassification, and any
shares of any class or series which have been redeemed,
purchased, otherwise acquired or converted into shares of
Common Stock or any other class or series shall become part of
the authorized capital stock and be subject to classification
and reclassification as provided in this subparagraph.
(2) Whether or not and, if so, the rates, amounts and
times at which, and the conditions under which, dividends shall
be payable on shares of such class or series, whether any such
dividends shall rank senior or junior to or on a parity with
the dividends payable on any other class or series of stock,
and the status of any such dividends as cumulative, cumulative
to a limited extent or non- cumulative and as participating or
non-participating.
(3) Whether or not shares of such class or series shall
have voting rights, in addition to any voting rights provided
by law and, if so, the terms of such voting rights provided
that, there shall be no increase in the
<PAGE>
22
number of directors
except as set forth in paragraph (a) of Article SEVENTH and
such voting rights shall not effect the rights of the holders
of the Class B Common Stock or the Class C Common Stock with
respect to the election of directors.
(4) Whether or not shares of such class or series shall
have conversion or exchange privileges and, if so, the terms
and conditions thereof, including provision for adjustment of
the conversion or exchange rate in such events or at such times
as the Board of Directors shall determine.
(5) Whether or not shares of such class or series shall
be subject to redemption and, if so, the terms and conditions
of such redemption, including the date or dates upon or after
which they shall be redeemable and the amount per share payable
in case of redemption, which amount may vary under different
conditions and at different redemption dates; and whether or
not there shall be any sinking fund or purchase account in
respect thereof, and if so, the terms thereof.
(6) The rights of the holders of shares of such class or
series upon the liquidation, dissolution or winding up of the
affairs of, or upon any distribution of the assets of, the
Corporation, which rights may vary depending upon whether such
liquidation, dissolution or winding up is voluntary or
involuntary and, if voluntary, may vary at different dates, and
whether such rights shall rank senior or junior to or on a
parity with such rights of any other class or series of stock.
(7) Whether or not there shall be any limitations
applicable, while shares of such class or series are
outstanding, upon the payment of dividends or making of
distributions on, or the acquisition of, or the use of moneys
for purchase or redemption of, any stock of the Corporation, or
upon any other action of the Corporation, including action
under this subparagraph, and, if so, the terms and conditions
thereof.
(8) Any other preferences, rights, restrictions,
including restrictions on transferability, and qualifications
of shares of such class or series, not inconsistent with law
and the Charter of the Corporation.
(f) For the purposes hereof and of any articles supplementary
to the Charter providing for the classification or reclassification of
any shares of capital stock or of any other charter document of the
Corporation (unless otherwise provided in any such articles or document),
any class or series of stock of the Corporation shall be deemed to rank:
(1) prior to another class or series either as to
dividends or upon liquidation, if the holders of such class or
series shall be entitled to the receipt of dividends or of
amounts distributable on liquidation, dissolution
<PAGE>
23
or winding
up, as the case may be, in preference or priority to holders of
such other class or series;
(2) on a parity with another class or series either as to
dividends or upon liquidation, whether or not the dividend
rates, dividend payment dates or redemption or liquidation
price per share thereof be different from those of such others,
if the holders of such class or series of stock shall be
entitled to receipt of dividends or amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in
proportion to their respective dividend rates or redemption or
liquidation prices, without preference or priority over the
holders of such other class or series; and
(3) junior to another class or series either as to
dividends or upon liquidation, if the rights of the holders of
such class or series shall be subject or subordinate to the
rights of the holders of such other class or series in respect
of the receipt of dividends or the amounts distributable upon
liquidation, dissolution or winding up, as the case may be.
SEVENTH: (a) The business and affairs of the Corporation shall be
managed under the direction of the Board of Directors. The number of
directors of the Corporation shall never be less than the minimum number
permitted by the General Laws of the State of Maryland now or hereafter
in force and:
(1) so long as any shares of both Class B Common Stock
and Class C Common Stock are outstanding, the number of
directors of the Corporation shall be thirteen;
(2) so long as any shares of Class B Common Stock (but no
Class C Common Stock) are outstanding, the number of directors
of the Corporation shall be nine; and
(3) so long as any shares of Class C Common Stock (but no
Class B Common Stock) are outstanding, the number of directors
of the Corporation shall be nine.
At least a majority of the directors shall be Independent Directors (as
defined in Article NINTH).
(b) Subject to the rights of the holders of any class of
Preferred Stock then outstanding, newly created directorships resulting
from any increase in the authorized number of directors shall be filled
by a vote of the stockholders or a majority of the entire Board of
Directors, and any vacancies on the Board of Directors resulting from
death, disability ("disability," which for purposes of this paragraph (b)
shall mean illness, physical or mental disability or other incapacity),
resignation, retirement, disqualification, removal from office, or other
cause shall be filled by a vote of the stockholders or a majority of the
directors then in office; provided that
<PAGE>
24
(1) any vacancies on the Board of Directors resulting
from death, disability, resignation, retirement,
disqualification, removal from office, or other cause of a
director elected by the holders of Class B Common Stock shall
be filled by a vote of the holders of Class B Common Stock; and
(2) any vacancies on the Board of Directors with respect
to a director elected by the holders of Class C Common Stock
shall be filled as follows:
(A) at any time after the closing date of the
Merger, any vacancy resulting from death or disability shall be
filled by holders of Class C Common Stock, voting as a separate
class to elect as a replacement director a candidate who (i) is
the Chief Executive Officer of The Edward J. DeBartolo
Corporation (or any successor to such corporation), PROVIDED
that the right granted pursuant to this subparagraph
(b)(2)(A)(i) may be exercised only once and may only be
exercised to fill a vacancy resulting from the death or
disability of Edward J. DeBartolo, Jr. or Marie Denise
DeBartolo York, or (ii) has similar experience and standing in
the business community to the Independent Directors and who has
been approved by a majority of the Independent Directors
elected by the holders of Common Stock and other capital stock
entitled to vote with the Common Stock as a single class. If
such Independent Directors do not approve such candidate, the
holders of Class C Common Stock may propose another candidate
for approval by a majority of the Independent Directors. The
right of holders of Class C Common Stock to propose candidates
to the Independent Directors shall continue until one such
candidate is approved by a majority of the Independent
Directors;
(B) at any time prior to the fourth anniversary of
the closing date of the Merger, any vacancy other than one
resulting from a death or disability shall, subparagraph (c-
1)(1) of Article SIXTH notwithstanding, reduce by such vacancy
an equivalent number of the directors that holders of Class C
Common Stock may, voting as a separate class, elect, and such a
vacancy shall be filled by a majority of the entire Board of
Directors. If as a result of this subparagraph (b)(2)(B) the
number of directors that holders of Class C Common Stock may
elect is reduced to zero, then immediately and automatically
each share of Class C Common Stock shall be converted into one
share of Common Stock;
(C) at any time during the period from and including
the fourth anniversary to but not including the fifth
anniversary of the closing date of the Merger, any vacancy
other than one resulting from a death or disability shall be
filled by holders of Class C Common Stock, voting as a separate
class, to elect as a replacement director a candidate who meets
the qualifications and has been selected in accordance with the
procedures set forth in subparagraph (b)(2)(A)(ii) above;
PROVIDED if during such
<PAGE>
25
period vacancies result other than from
death or disability with respect to both of the directors who
were directors on the fourth anniversary date, then,
subparagraph (c-1)(1) of Article SIXTH notwithstanding, the
number of directors that the holders of Class C Common Stock
may, voting as a separate class, elect shall be reduced to one,
and the vacancy with respect to the second resigned director
shall be filled by a majority of the entire Board of Directors;
and
(D) at any time after the fifth anniversary of the
closing date of the Merger, any vacancy other than one
resulting from a death or disability shall be filled by holders
of Class C Common Stock, voting as a separate class, to elect
as a replacement director a candidate who meets the
qualifications and has been selected in accordance with the
procedures set forth in subparagraph (b)(2)(A)(ii) above.
No decrease in the number of directors constituting the Board of
Directors shall affect the tenure of office of any director.
(c) Whenever the holders of any one or more series of
Preferred Stock of the Corporation shall have the right, voting
separately as a class, to elect one or more directors of the Corporation,
the Board of Directors shall consist of said directors so elected in
addition to the number of directors fixed as provided in paragraph (a) of
this Article SEVENTH or in the By-Laws; provided that if any shares of
Class B Common Stock or Class C Common Stock are outstanding, the
election of one or more directors by such holders of Preferred Stock will
eliminate the corresponding number a directors to be elected by the
combined holders of the Common Stock, the Class B Common Stock, the Class
C Common Stock, and the Series A Preferred Stock voting together as a
single class, and will neither increase the size of the Board of
Directors nor eliminate the seat or seats of directors elected by the
holders of the Class B Common Stock or of the Class C Common Stock, each
voting as a separate class. Notwithstanding the foregoing, and except as
otherwise may be required by law, whenever the holders of any one or more
series of Preferred Stock of the Corporation shall have the right, voting
separately as a class, to elect one or more directors of the Corporation,
the terms of the director or directors elected by such holders shall
expire at the next succeeding annual meeting of stockholders.
(d) Subject to the rights of the holders of any class
separately entitled to elect one or more directors, any director, or the
entire Board of Directors, may be removed from office at any time, but
only for cause and then only by the affirmative vote of the holders of at
least a majority of the combined voting power of all classes of shares of
capital stock entitled to vote in the election for directors voting
together as a single class.
(e) The following are the names of the current directors of
the Corporation, each of whom shall serve until the annual meeting of
stockholders indicated next to his or her name, and who thereafter will
serve (or whose replacement will serve) until the next following annual
meeting of stockholders.
<PAGE>
26
<TABLE>
<CAPTION>
NAME OF CURRENT DIRECTOR STOCK CLASSES ENTITLED TO ELECT DIRECTOR CLASS CURRENT TERM ENDS
WITH ELECTION AT
ANNUAL MEETING IN:
<S> <C> <C> <C>
Birch Bayh Common Stock, Class B Common A 1997
Stock, Class C Common Stock,
Series A Preferred Stock
G. William Miller Common Stock, Class B Common A 1998
Stock, Class C Common Stock,
Series A Preferred Stock
William T. Dillard, II Common Stock, Class B Common A 1998
Stock, Class C Common Stock,
Series A Preferred Stock
Terry S. Prindiville Common Stock, Class B Common A 1998
Stock, Class C Common Stock,
Series A Preferred Stock
Fredrick W. Petri Common Stock, Class B Common A 1999
Stock, Class C Common Stock,
Series A Preferred Stock
Philip J. Ward Common Stock, Class B Common A 1999
Stock, Class C Common Stock,
Series A Preferred Stock
J. Albert Smith, Jr. Common Stock, Class B Common A 1999
Stock, Class C Common Stock,
Series A Preferred Stock
Melvin Simon Class B Common Stock B 1997
Herbert Simon Class B Common Stock B 1997
David Simon Class B Common Stock B 1997
Richard S. Sokolov Class B Common Stock B 1997
(Vacant) Class C Common Stock C 1997
(Vacant) Class C Common Stock C 1997
</TABLE>
(f) Any action by the Corporation relating to (1) transactions
between the Corporation and M.S. Management Associates, Inc., Simon MOA
Management Company, Inc., DeBartolo Properties Management, Inc. and/or
M.S. Management Associates (Indiana), Inc. or (2) transactions involving
the Corporation, individually or in its capacity as general partner
(whether directly or indirectly through another entity) of Simon
DeBartolo Group, L.P., in which the Simon Family Group or the DeBartolo
<PAGE>
27
Family Group or any member or affiliate of any member of the Simon Family
Group or DeBartolo Family Group has an interest (other than through
ownership interests in the Corporation or Simon DeBartolo Group, L.P.),
shall, in addition to such other vote that may be required, require the
prior approval of a majority of the Independent Directors.
EIGHTH: (a) The following provisions are hereby adopted for the
purpose of defining, limiting, and regulating the powers of the
Corporation and of the directors and the stockholders:
(1) The Board of Directors is hereby empowered to
authorize the issuance from time to time of shares of its stock
of any class, whether now or hereafter authorized, or
securities convertible into shares of its stock of any class or
classes, whether now or hereafter authorized, for such
consideration as may be deemed advisable by the Board of
Directors and without any action by the stockholders.
(2) No holder of any stock or any other securities of the
Corporation, whether now or hereafter authorized, shall have
any preemptive right to subscribe for or purchase any stock or
any other securities of the Corporation other than such, if
any, as the Board of Directors, in its sole discretion, may
determine and at such price or prices and upon such other terms
as the Board of Directors, in its sole discretion, may fix; and
any stock or other securities which the Board of Directors may
determine to offer for subscription may, as the Board of
Directors in its sole discretion shall determine, be offered to
the holders of any class, series or type of stock or other
securities at the time outstanding to the exclusion of the
holders of any or all other classes, series or types of stock
or other securities at the time outstanding.
(3) The Board of Directors of the Corporation shall,
consistent with applicable law, have power in its sole
discretion to determine from time to time in accordance with
sound accounting practice or other reasonable valuation methods
what constitutes annual or other net profits, earnings,
surplus, or net assets in excess of capital; to fix and vary
from time to time the amount to be reserved as working capital,
or determine that retained earnings or surplus shall remain in
the hands of the Corporation; to set apart out of any funds of
the Corporation such reserve or reserves in such amount or
amounts and for such proper purpose or purposes as it shall
determine and to abolish any such reserve or any part thereof;
to redeem or purchase its stock or to distribute and pay
distributions or dividends in stock, cash or other securities
or property, out of surplus or any other funds or amounts
legally available therefor, at such times and to the
stockholders of record on such dates as it may, from time to
time, determine; to determine the amount, purpose, time of
creation, increase or decrease, alteration or cancellation of
any reserves or charges and the propriety thereof (whether or
not any obligation or liability for which such reserves or
charges shall have been created shall
<PAGE>
28
have been paid or
discharged); to determine the fair value and any matters
relating to the acquisition, holding and disposition of any
assets by the Corporation; and to determine whether and to what
extent and at what times and places and under what conditions
and regulations the books, accounts and documents of the
Corporation, or any of them, shall be open to the inspection of
stockholders, except as otherwise provided by statute or by the
By-Laws, and, except as so provided, no stockholder shall have
any right to inspect any book, account or document of the
Corporation unless authorized so to do by resolution of the
Board of Directors.
(4) The Board of Directors shall, in connection with the
exercise of its business judgment involving a Business
Combination (as defined in Section 3-601 of the Corporations
and Associations Article of the Annotated Code of Maryland) or
any actual or proposed transaction which would or may involve a
change in control of the Corporation (whether by purchases of
shares of stock or any other securities of the Corporation in
the open market, or otherwise, tender offer, merger,
consolidation, dissolution, liquidation, sale of all or
substantially all of the assets of the Corporation, proxy
solicitation or otherwise), in determining what is in the best
interests of the Corporation and its stockholders and in making
any recommendation to its stockholders, give due consideration
to all relevant factors, including, but not limited to (A) the
economic effect, both immediate and long-term, upon the
Corporation's stockholders, including stockholders, if any, who
do not participate in the transaction; (B) the social and
economic effect on the employees, customers of, and others
dealing with, the Corporation and its subsidiaries and on the
communities in which the Corporation and its subsidiaries
operate or are located; (C) whether the proposal is acceptable
based on the historical and current operating results or
financial condition of the Corporation; (D) whether a more
favorable price could be obtained for the Corporation's stock
or other securities in the future; (E) the reputation and
business practices of the offeror and its management and
affiliates as they would affect the employees of the
Corporation and its subsidiaries; (F) the future value of the
stock or any other securities of the Corporation; (G) any
antitrust or other legal and regulatory issues that are raised
by the proposal; and (H) the business and financial condition
and earnings prospects of the acquiring person or entity,
including, but not limited to, debt service and other existing
financial obligations, financial obligations to be incurred in
connection with the acquisition, and other likely financial
obligations of the acquiring person or entity. If the Board of
Directors determines that any proposed Business Combination (as
defined in Section 3-601 of the Corporations and Associations
Article of the Annotated Code of Maryland) or actual or
proposed transaction which would or may involve a change in
control of the Corporation should be rejected, it may take any
lawful action to defeat such transaction, including, but not
limited to, any or all of the following: advising stockholders
not to accept the proposal; instituting litigation against the
party making the proposal; filing
<PAGE>
29
complaints with governmental
and regulatory authorities; acquiring the stock or any of the
securities of the Corporation; selling or otherwise issuing
authorized but unissued stock, other securities or granting
options or rights with respect thereto; acquiring a company to
create an antitrust or other regulatory problem for the party
making the proposal; and obtaining a more favorable offer from
another individual or entity.
(5) The Corporation shall provide any indemnification
permitted by the laws of Maryland and shall indemnify
directors, officers, agents and employees as follows: (A) the
Corporation shall indemnify its directors and officers, whether
serving the Corporation or at its request any other entity, to
the full extent required or permitted by the General Laws of
the State of Maryland now or hereafter in force, including the
advance of expenses under the procedures and to the full extent
permitted by law and (B) the Corporation shall indemnify other
employees and agents, whether serving the Corporation or at its
request any other entity, to such extent as shall be authorized
by the Board of Directors or the Corporation's By-Laws and be
permitted by law. The foregoing rights of indemnification
shall not be exclusive of any other rights to which those
seeking indemnification may be entitled. The Board of
Directors may take such action as is necessary to carry out
these indemnification provisions and is expressly empowered to
adopt, approve and amend from time to time such by-laws,
resolutions or contracts implementing such provisions or such
further indemnification arrangements as may be permitted by
law. No amendment of the Charter of the Corporation or repeal
of any of its provisions shall limit or eliminate the right to
indemnification provided hereunder with respect to acts or
omissions occurring prior to such amendment or repeal or shall
limit or eliminate the rights granted under indemnification
agreements entered into by the Corporation and its directors,
officers, agents and employees.
(6) To the fullest extent permitted by Maryland statutory
or decisional law, as amended or interpreted, no director or
officer of the Corporation shall be personally liable to the
Corporation or its stockholders for money damages. No
amendment of the Charter of the Corporation or repeal of any of
its provisions shall limit or eliminate the benefits provided
to directors and officers under this provision with respect to
any act or omission which occurred prior to such amendment or
repeal.
(7) For any stockholder proposal to be presented in
connection with an annual meeting of stockholders of the
Corporation, including any proposal relating to the nomination
of a director to be elected to the Board of Directors of the
Corporation, the stockholders must have given timely written
notice thereof in writing to the Secretary of the Corporation
in the manner and containing the information required by the
By-Laws. Stockholder proposals to be presented in connection
with a special meeting
<PAGE>
30
of stockholders will be presented by the
Corporation only to the extent required by Section 2-502 of the
Corporations and Associations Article of the Annotated Code of
Maryland.
(b) The Corporation reserves the right to amend, alter, change
or repeal any provision contained in the Charter, including any
amendments changing the terms or contract rights, as expressly set forth
in the Charter, of any of its outstanding stock by classification,
reclassification or otherwise, by a majority of the directors (including
a majority of the Independent Directors, a majority of the directors
elected by the holders of the Class B Common Stock and one director
elected by the holders of the Class C Common Stock, if such Class B
Common Stock and Class C Common Stock have at that time elected
directors) adopting a resolution setting forth the proposed change,
declaring its advisability, and either calling a special meeting of the
stockholders certified to vote on the proposed change, or directing the
proposed change to be considered at the next annual stockholders meeting.
Unless otherwise provided herein, the proposed change will be effective
only if it is adopted upon the affirmative vote of the holders of not
less than a majority of the aggregate votes entitled to be cast thereon
(considered for this purpose as a single class); provided however, that
any amendment to, repeal of or adoption of any provision inconsistent
with subparagraphs (a)(4), (a)(6) or (a)(7) or this paragraph (b) of
Article EIGHTH will be effective only if it is adopted upon the
affirmative vote of not less than 80% of the aggregate votes entitled to
be cast thereon (considered for this purpose as a single class) and any
amendment to, repeal of, or adoption of any provision inconsistent with
paragraphs (c) or (c-1) of Article SIXTH or Article SEVENTH will be
effective only if it is adopted upon both (1) the affirmative vote of not
less than 80% of the aggregate votes entitled to be cast thereon
(considered for this purpose as a single class) and (2) the affirmative
vote of not less than a majority of the aggregate votes entitled to be
cast by the holders of the Class B Common Stock (in the case of paragraph
(c) of Article SIXTH or Article SEVENTH) or by the holders of the Class C
Common Stock (in the case of paragraph (c-1) of Article SIXTH or Article
SEVENTH).
(c) In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly authorized to
make, alter or repeal the By-Laws of the Corporation.
(d) The enumeration and definition of particular powers of the
Board of Directors included in the foregoing shall in no way be limited
or restricted by reference to or inference from the terms of any other
clause of this or any other Article of the Charter of the Corporation, or
construed as or deemed by inference or otherwise in any manner to exclude
or limit any powers conferred upon the Board of Directors under the
General Laws of the State of Maryland now or hereafter in force.
NINTH: (a) (1) The following terms shall have the following
meaning:
"Aggregate Assumed Equity Interest in the Corporation"
shall mean the aggregate equity interest in the Corporation
represented by the Common Stock, the Class B Common Stock, the
Class C Common Stock
<PAGE>
31
and the Units on the assumption that all
shares of Class B Common Stock and Class C Common Stock and all
such Units are exchanged for Common Stock
"Beneficial Ownership" shall mean ownership of Capital
Stock by a Person who would be treated as an owner of such
shares of Capital Stock either directly or indirectly through
the application of Section 544 of the Code, as modified by
Section 856(h)(1)(B) of the Code, and any comparable successor
provisions thereto. The terms "Beneficial Owner,"
"Beneficially Owns" and "Beneficially Owned" shall have
correlative meanings.
"Beneficiary" shall mean any Qualified Charitable
Organization which, from time to time, is designated by the
Corporation to be a beneficiary of the Trust.
"Board of Directors" shall mean the Board of Directors of
the Corporation.
"By-Laws" shall mean the By-Laws of the Corporation.
"Capital Stock" shall mean stock that is Common Stock,
Class B Common Stock, Class C Common Stock, Excess Stock or
Preferred Stock.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Constructive Ownership" shall mean ownership of Capital
Stock by a Person who would be treated as an owner of such
shares of Capital Stock either directly or indirectly through
the application of Section 318 of the Code, and any comparable
successor provisions thereto, as modified by Section 856(d)(5)
of the Code. The terms "Constructive Owner," "Constructively
Owns" and "Constructively Owned" shall have correlative
meanings.
"DeBartolo Family Group" shall mean the Estate of Edward
J. DeBartolo, Sr., Edward J. DeBartolo, Jr. and Marie Denise
DeBartolo York, other members of the immediate family of any of
the foregoing, any other lineal descendants of any of the
foregoing, any estates of any of the foregoing, any trusts
established for the benefit of any of the foregoing, and any
other entity controlled by any of the foregoing.
"DeBartolo Family Group Initial Aggregate Assumed Equity
Interest in the Corporation" shall mean the portion of the
Aggregate Assumed Equity Interest in the Corporation owned by
the DeBartolo Family Group immediately following the closing of
the Merger.
<PAGE>
32
"Exchange Rights" shall mean any rights granted to limited
partners of Simon DeBartolo Group, L.P., a Delaware limited
partnership (including pursuant to an Exchange Rights
Agreement) and Simon Property Group L.P., a Delaware limited
partnership, to exchange (subject to the Ownership Limit)
limited partnership interests in such Partnership for shares of
Capital Stock.
"Independent Director" shall mean a director of the
Corporation who is neither employed by the Corporation nor a
member (or an affiliate of a member) of the Simon Family Group
or the DeBartolo Family Group.
"Market Price" of any class of Capital Stock on any date
shall mean the average of the Closing Price for the five
consecutive Trading Days ending on such date, or if such date
is not a Trading Date, the five consecutive Trading Days
preceding such date. The "Closing Price" on any date shall
mean (i) the last sale price, regular way, or, in case no such
sale takes place on such day, the average of the closing bid
and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New
York Stock Exchange, or (ii) if such class of Capital Stock is
not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the
principal national securities exchange on which such class of
capital stock is listed or admitted to trading, or (iii) if
such class of capital stock is not listed or admitted to
trading on any national securities exchange, the last quoted
price, or if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated
Quotation System or, if such system is no longer in use, the
principal other automated quotations systems that may then be
in use, or (iv) if such class of Capital Stock is not quoted by
any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in such class of Capital Stock selected by the Board of
Directors.
"Merger" shall mean the merger, pursuant to the Agreement
and Plan of Merger dated March 26, 1996, among the Corporation,
Day Acquisition Corp., an Ohio corporation and a wholly owned
subsidiary of the Corporation ("Sub"), and DeBartolo Realty
Corporation, an Ohio corporation ("DeBartolo"), pursuant to
which merger Sub shall be merged with and into DeBartolo.
"Option" shall mean any options, rights, warrants or
convertible or exchangeable securities containing the right to
subscribe for, purchase or receive upon exchange or conversion
shares of Capital Stock.
<PAGE>
33
"Ownership Limit" shall mean (x) in the case of any member
of the Simon Family Group, 24%, and (y) in the case of any
other Person, 6%, in each case, of any class of Capital Stock,
or any combination thereof, determined by (i) number of shares
outstanding, (ii) voting power or (iii) value (as determined by
the Board of Directors), whichever produces the smallest
holding of Capital Stock under the three methods, computed with
regard to all outstanding shares of Capital Stock and, to the
extent provided by the Code, all shares of Capital Stock
issuable under outstanding Options and Exchange Rights that
have not been exercised.
"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, association,
private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity and also includes a
group as the term is used for purposes of Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended.
"Purported Beneficial Holder" shall mean, with respect to
any event (other than a purported Transfer) which results in
Excess Stock, the Person for whom the Purported Record Holder
held shares that were, pursuant to subparagraph (a)(3) of this
article NINTH, automatically converted into Excess Stock upon
the occurrence of such event.
"Purported Beneficial Transferee" shall mean, with respect
to any purported Transfer which results in Excess Stock, the
purported beneficial transferee for whom the Purported Record
Transferee would have acquired shares of Common Stock or
Preferred Stock if such Transfer had been valid under
subparagraph (a)(2) of this Article NINTH.
"Purported Record Holder" shall mean, with respect to any
event (other than a purported Transfer) which results in Excess
Stock, the record holder of the shares that were, pursuant to
subparagraph (a)(3) of this Article NINTH, automatically
converted into Excess Stock upon the occurrence of such event.
"Purported Record Transferee" shall mean, with respect to
any purported Transfer which results in Excess Stock, the
record holder of the Common Stock or the Preferred Stock if
such Transfer had been valid under subparagraph (a)(2) of this
Article NINTH.
"Qualified Charitable Organization" shall mean (i) any
entity which would be exempt from federal income under Section
501(c)(3) of the Code and to which contributions are deductible
under Section 170 of the Code or (ii) any federal, state or
local government entity.
<PAGE>
34
"REIT" shall mean a real estate investment trust under
Section 856 of the Code.
"Restriction Termination Date" shall mean the first day
after the effective date of the Merger on which the
Corporation's status as a REIT shall have been terminated by
the Board of Directors and the stockholders of the Corporation.
"Simon Family Group" shall mean Melvin Simon, Herbert
Simon and David Simon, other members of the immediate family of
any of the foregoing, any other lineal descendants of any of
the foregoing, any estates of any of the foregoing, any trust
established for the benefit of any of the foregoing, and any
other entity controlled by any of the foregoing.
"Simon Family Group Initial Aggregate Assumed Equity
Interest in the Corporation" shall mean the portion of the
Aggregate Assumed Equity Interest in the Corporation owned by
the Simon Family Group immediately following the closing of the
Merger.
"Trading Day" shall mean, with respect to any class of
Capital Stock, a day on which the principal national securities
exchange on which such class of Capital Stock is listed or
admitted to trading is open for the transaction of business or,
if such class of Capital Stock is not listed or admitted to
trading on any national securities exchange, shall mean any day
other than a Saturday, a Sunday or a day on which banking
institutions in the State of New York are authorized or
obligated by law or executive order to close.
"Transfer" shall mean any sale, transfer, gift,
hypothecation, pledge, assignment, devise or other disposition
of Capital Stock (including (i) the granting of any option
(including an option to acquire an Option or any series of such
options) or entering into any agreement for the sale, transfer
or other disposition of Capital Stock or (ii) the sale,
transfer, assignment or other disposition of any securities or
rights convertible into or exchangeable for Capital Stock),
whether voluntary or involuntary, whether of record,
constructively or beneficially and whether by operation of law
or otherwise.
"Trust" shall mean the trust created pursuant to
subparagraph (b)(1) of this Article NINTH.
"Trustee" shall mean any trustee for the Trust (or any
successor trustee) appointed from time to time by the
Corporation; provided, however, during any period in which
Excess Stock is issued and outstanding the Corporation shall
undertake to appoint trustees of the Trust which trustees are
unaffiliated with the Corporation.
<PAGE>
35
"Undesignated Excess Stock" shall have the meaning set
forth in subparagraph (b)(3) of this Article NINTH.
"Units" shall mean units representing limited partnership
interests in Simon Property Group, L.P. or DeBartolo Realty
Partnership L.P.
(2) (A) Except as provided in subparagraph (a)(9) of
this Article NINTH, from the effective date of the Merger and
prior to the Restriction Termination Date, no Person shall
Beneficially Own or Constructively Own shares of the
outstanding Capital Stock in excess of the Ownership Limit.
(B) Except as provided in subparagraph (a)(9) of
this Article NINTH, from the effective date of the Merger and
prior to the Restriction Termination Date, any Transfer that,
if effective, would result in any Person Beneficially Owning or
Constructively Owning Capital Stock in excess of the Ownership
Limit shall be void AB INITIO as to the Transfer of that number
of shares of Capital Stock which would be otherwise
Beneficially or Constructively Owned by such Person in excess
of the Ownership Limit; and the intended transferee shall
acquire no rights in such shares of Common Stock or Preferred
Stock in excess of the Ownership Limit.
(C) Except as provided in subparagraph (a)(9) of
this Article NINTH, from the effective date of the Merger and
prior to the Restriction Termination Date, any Transfer that,
if effective, would result in the Capital Stock being
Beneficially Owned by fewer than 100 Persons (determined
without reference to any rules of attribution) shall be void AB
INITIO; and the intended transferee shall acquire no rights in
such shares of Common Stock or Preferred Stock.
(D) Except as provided in subparagraph (a)(9) of
this Article NINTH, from the effective date of the Merger and
prior to the Restriction Termination Date, any Transfer of
shares or other event or transaction involving Capital Stock
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 that number of
shares or other event or transaction of Capital Stock 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 shares of Common
Stock or Preferred Stock in excess of the Ownership Limit.
(3) (A) If, notwithstanding the other provisions
contained in this Article NINTH, at any time after the
effective date of the Merger and prior to the Restriction
Termination Date, there is a purported Transfer or other event
such that any Person would Beneficially Own or
<PAGE>
36
Constructively
Own Capital Stock in excess of the Ownership Limit, then,
except as otherwise provided in subparagraph (a)(9), each such
share of Common Stock or Preferred Stock which, when taken
together with all other Capital Stock, would be in excess of
the Ownership Limit (rounded up to the nearest whole share),
shall automatically be converted into one share of Excess
Stock, as further described in subparagraph (a)(3)(C) below and
such shares of Excess Stock shall be automatically transferred
to the Trustee as trustee for the Trust. The Corporation shall
issue fractional shares of Excess Stock if required by such
conversion ratio. Such conversion shall be effective as of the
close of business on the business day prior to the date of the
Transfer or other event.
(B) If, notwithstanding the other provisions
contained in this Article NINTH, at any time after the
effective date of the Merger and prior to the Restriction
Termination Date, there is a purported Transfer or other event
which, if effective, would cause the Corporation to become
"closely held" within the meaning of Section 856(h) of the
Code, then each share of Common Stock or Preferred Stock being
Transferred or which are otherwise affected by such event and
which, in either case, would cause, when taken together with
all other Capital Stock, the Corporation to be "closely held"
within the meaning of Section 856(h) of the Code (rounded up to
the nearest whole share) shall automatically be converted into
one share of Excess Stock, as further described in subparagraph
(a)(3)(C) of this Article NINTH, and such shares of Excess
Stock shall be automatically transferred to Trustee as trustee
for the Trust. The Corporation shall issue fractional shares
of Excess Stock if required by such conversion ratio. Such
conversion shall be effective as of the close of business on
the business day prior to the date of the Transfer or other
event.
(C) Upon conversion of Common Stock or Preferred
Stock into Excess Stock pursuant to this subparagraph (a)(3) of
this Article NINTH, Common Stock shall be converted into Excess
Common Stock and Preferred Stock shall be converted into Excess
Preferred Stock.
(4) If the Board of Directors or its designees shall at
any time determine in good faith that a Transfer or other event
has taken place in violation of subparagraph (a)(2) of this
Article NINTH or that a Person intends to acquire or has
attempted to acquire Beneficial Ownership or Constructive
Ownership of any shares of Capital Stock in violation of
subparagraph (a)(2) of this Article NINTH, the Board of
Directors or its designees may take such action as it or they
deem advisable to refuse to give effect to or to prevent such
Transfer or other event, including, but not limited to,
refusing to give effect to such Transfer or other event on the
books of the Corporation or instituting proceedings to enjoin
such Transfer or other event or transaction; PROVIDED, HOWEVER,
that any Transfers or attempted Transfers (or, in the case of
events other than a
<PAGE>
37
Transfer, Beneficial Ownership or
Constructive Ownership) in violation of subparagraphs
(a)(2)(A), (B), (C) and (D) of this Article NINTH shall be void
AB INITIO and any Transfers or attempted Transfers (or, in the
case of events other than a Transfer, Beneficial Ownership or
Constructive Ownership) in violation of subparagraphs
(a)(2)(A), (B), and (D) shall automatically result in the
conversion described in subparagraph (a)(3), irrespective of
any action (or non-action) by the Board of Directors or its
designees.
(5) Any Person who acquires or attempts to acquire shares
of Capital Stock in violation of subparagraph (a)(2) of this
Article NINTH, or any Person who is a transferee such that
Excess Stock results under subparagraph (a)(3) of this Article
NINTH, 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.
(6) From the effective date of the Merger and prior to
the Restriction Termination Date:
(A) Every Beneficial Owner or Constructive Owner of
more than 5%, or such lower percentages as required pursuant to
regulations under the Code, of the outstanding Capital Stock of
the Corporation shall, before January 30 of each year, give
written notice to the Corporation stating the name and address
of such Beneficial Owner or Constructive Owner, the general
ownership structure of such Beneficial Owner or Constructive
Owner, the number of shares of each class of Capital Stock
Beneficially Owned or Constructively Owned, and a description
of how such shares are held.
(B) Each Person who is a Beneficial Owner or
Constructive Owner of Capital Stock and each Person (including
the stockholder of record) who is holding Capital Stock for a
Beneficial Owner or Constructive Owner shall provide on demand
to the Corporation such information as the Corporation may
request from time to time in order to determine the
Corporation's status as a REIT and to ensure compliance with
the Ownership Limit.
(7) Subject to subparagraph (a)(12) of this Article
NINTH, nothing contained in this Article NINTH 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 stockholders by preservation of the
Corporation's status as REIT and to ensure compliance with the
Ownership Limit.
<PAGE>
38
(8) In the case of an ambiguity in the application of any
of the provisions of subparagraph (a) of this Article NINTH,
including any definition contained in subparagraph (a)(1), the
Board of Directors shall have the power to determine the
application of the provisions of this subparagraph (a) with
respect to any situation based on the facts known to it.
(9) The Board of Directors upon receipt of a ruling from
the Internal Revenue Service or an opinion of tax counsel in
each case to the effect that the restrictions contained in
subparagraphs (a)(2)(A), (B), (C) and (D) of this Article NINTH
will not be violated, may exempt a Person from the Ownership
Limit:
(A)(i) if such Person is not an individual for
purposes of Section 542(a)(2) of the Code, or (ii) if such
Person is an underwriter which participates in a public
offering of Common Stock or Preferred Stock for a period of 90
days following the purchase by such underwriter of the Common
Stock or Preferred Stock, or (iii) in such other circumstances
which the Board of Directors determines are appropriately
excepted from the Ownership Limit, and
(B) the Board of Directors obtains such
representations and undertakings from such Person as are
reasonably necessary to ascertain that no individual's
Beneficial Ownership and Constructive Ownership of Capital
Stock will violate the Ownership Limit and agrees that any
violation or attempted violation will result in such Common
Stock or Preferred Stock being converted into shares of Excess
Stock in accordance with subparagraph (a)(3) of this Article
NINTH.
(10) From the effective date of the Merger and until the
Restriction Terminate Date, each certificate for the respective
class of Capital Stock shall bear the following legend:
The shares of Capital Stock 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 from time to time (the
"Code"). Transfers in contravention of such restrictions
shall be void AB INITIO. Unless excepted by the Board of
Directors of the Corporation, no Person may (1)
Beneficially Own or Constructively Own shares of Capital
Stock in excess of 6% (other than members of the Simon
Family Group, whose relevant percentage is 24%) of the
value of any class of outstanding Capital Stock of the
Corporation, or any combination thereof, determined as
provided in the Corporation's Charter, as the same may be
amended from time to time (the "Charter"), and computed
with regard to all outstanding shares of Capital Stock
<PAGE>
39
and, to the extent provided by the Code, all shares of
Capital Stock issuable under existing Options and Exchange
Rights that have not been exercised; or (2) Beneficially
Own Capital Stock which would result in the Corporation
being "closely held" under Section 856(h) of the Code.
Unless so excepted, any acquisition of Capital Stock and
continued holding of ownership constitutes a continuous
representation of compliance with the above limitations,
and any Person who attempts to Beneficially Own or
Constructively Own shares of Capital Stock in excess of
the above limitations has an affirmative obligation to
notify the Corporation immediately upon such attempt. If
the restrictions on transfer are violated, the transfer
will be void AB INITIO and the shares of Capital Stock
represented hereby will be automatically converted into
shares of Excess Stock and will be transferred to the
Trustee to be held in trust for the benefit of one or more
Qualified Charitable Organizations, whereupon such Person
shall forfeit all rights and interests in such Excess
Stock. In addition, certain Beneficial Owners or
Constructive Owners must give written notice as to certain
information on demand and on an annual basis. All
capitalized terms in this legend have the meanings defined
in the Charter. The Corporation will mail without charge
to any requesting stockholder a copy of the Charter,
including the express terms of each class and series of
the authorized capital stock of the Corporation, within
five days after receipt of a written request therefor.
(11) If any provision of this Article NINTH or any
application of any such provision is determined to be invalid
by any federal or state court having jurisdiction over the
issues, the validity of the remaining provisions shall not be
affected, and other applications of such provision shall be
affected only to the extent necessary to comply with the
determination of such court.
(12) Nothing in this Article NINTH shall preclude the
settlement of any transaction entered into through the
facilities of the New York Stock Exchange.
(b) (1) Upon any purported Transfer or other event that
results in Excess Stock pursuant to subparagraph (a)(3) of this Article
NINTH, such Excess Stock shall be deemed to have been transferred to the
Trustee as trustee of the Trust for the exclusive benefit of one or more
Qualifying Charitable Organizations as are designated from time to time
by the Board of Directors with respect to such Excess Stock. Shares of
Excess Stock held in trust shall be issued and outstanding stock of the
Corporation. The Purported Record Transferee or Purported Record Holder
and the Purported Beneficial Transferee or Purported Beneficial Holder
shall have no rights in such Excess Stock, except such rights to certain
proceeds upon Transfer of shares of Excess Stock or
<PAGE>
40
upon any voluntary or
involuntary liquidation, dissolution or winding up of, or any
distribution of the assets of, the Corporation as are expressly set forth
herein.
(2) Excess Stock shall be entitled to dividends in an
amount equal to any dividends which are declared and paid with
respect to shares of Common Stock or Preferred Stock from which
such shares of Excess Stock were converted. Any dividend or
distribution paid prior to discovery by the Corporation that
shares of Common Stock or Preferred Stock have been converted
into Excess Stock shall be repaid to the Corporation upon
demand for delivery to the Trustee. The recipient of such
dividend shall be personally liable to the Trust for such
dividend. Any dividend or distribution declared but unpaid
shall be rescinded as void AB INITIO with respect to such
shares of Common Stock or Preferred Stock and shall
automatically be deemed to have been declared and paid with
respect to the shares of Excess Stock into which such shares of
Common Stock or Preferred Stock shall have been converted.
(3) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of, or any distribution
of the assets of, the Corporation, (i) subject to the
preferential rights of the Preferred Stock, if any, as may be
determined by the Board of Directors and the preferential
rights of the Excess Preferred Stock, if any, each holder of
shares of Excess Common Stock shall be entitled to receive,
ratably with each other holder of Common Stock and Excess
Common Stock that portion of the assets of the Corporation
available for distribution to the holders of Common Stock or
Excess Common Stock as the number of shares of the Excess
Common Stock held by such holder bears to the total number of
shares of Common Stock and the number of shares of Excess
Common Stock then outstanding and (ii) each holder of shares of
Excess Preferred Stock shall be entitled to receive that
portion of the assets of the Corporation which a holder of the
shares of Preferred Stock that were converted into such shares
of Excess Preferred Stock would have been entitled to receive
had such shares of Preferred Stock remained outstanding.
Notwithstanding the foregoing, distributions shall not be made
to holders of Excess Stock except in accordance with the
following sentence. The Corporation shall distribute to the
Trustee, as holder of the Excess Stock in trust, on behalf of
the Beneficiaries any such assets received in respect of the
Excess Stock in any liquidation, dissolution or winding up of,
or any distribution of the assets of the Corporation.
Following any such distribution, the Trustee shall distribute
such proceeds between the Purported Record Transferee or
Purported Record Holder, as appropriate, and the Qualified
Charitable Organizations which are Beneficiaries in accordance
with procedure for distribution of proceeds upon Transfer of
Excess Stock set forth in subparagraph (b)(5) of this Article
NINTH; PROVIDED, HOWEVER, that with respect to any Excess Stock
as to which no Beneficiary shall have been determined within 10
days following the date upon which the Corporation is prepared
to distribute
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41
assets ("Undesignated Excess Stock"), any assets
that would have been distributed on account of such
Undesignated Excess Stock had a Beneficiary been determined
shall be distributed to the holders of Common Stock and the
Beneficiaries of the Trust designated with respect to shares of
Excess Common Stock, or to the holders of Preferred Stock and
the Beneficiaries of the Trust designated with respect to
shares of Excess Preferred Stock as determined in the sole
discretion of the Board of Directors.
(4) Excess Stock shall be entitled to such voting rights
as are ascribed to shares of Common Stock or Preferred Stock
from which such shares of Excess Stock were converted. Any
voting rights exercised prior to discovery by the Corporation
that shares of Common Stock or Preferred Stock have been
converted into Excess Stock shall be rescinded and recast as
determined by the Trustee.
(5) (A) Following the expiration of the ninety day
period referred to in subparagraph (b)(6) of this Article
NINTH, Excess Stock shall be transferable by the Trustee to any
Person whose Beneficial Ownership or Constructive Ownership of
shares of Capital Stock outstanding, after giving effect to
such Transfer, would not result in the shares of Excess Stock
proposed to be transferred constituting Excess Stock in the
hands of the proposed transferee. A Purported Record
Transferee or, in the case of Excess Stock resulting from any
event other than a purported Transfer, the Purported Record
Holder shall have no rights whatsoever in such Excess Stock,
except that such Purported Record Transferee or, in the case of
Excess Stock resulting from any event other than a purported
Transfer, the Purported Record Holder, upon completion of such
Transfer, shall be entitled to receive the lesser of a price
per share for such Excess Stock not in excess (based on the
information provided to the Corporation in the notice given
pursuant to this subparagraph (b)(5)(A)) of (x) the price per
share such Purported Beneficial Transferee paid for the Common
Stock or Preferred Stock in the purported Transfer that
resulted in the Excess Stock, or (y) if the Purported
Beneficial Transferee did not give value for such shares of
Excess Stock (through a gift, devise or other transaction), a
price per share of Excess Stock equal to the Market Price of
the Common Stock or Preferred Stock on the date of the
purported Transfer that resulted in the Excess Stock. Upon
such transfer of any interest in Excess Stock held by the
Trust, the corresponding shares of Excess Stock in the Trust
shall be automatically converted into such number of shares of
Common Stock or Preferred Stock (of the same class as the
shares that were converted into such Excess Stock) as is equal
to the number of shares of Excess Stock, and such shares of
Common Stock or Preferred Stock (of the same class as the
shares that were converted into such Excess Stock) as is equal
to the number o shares of Excess Stock, and such shares of
Common Stock or Preferred Stock shall be transferred of record
to the proposed transferee
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42
of the Excess Stock. If,
notwithstanding the provisions of this Article NINTH, under any
circumstances, a Purported Transferee receives an amount for
shares of Excess Stock that exceeds the amount provided by the
formula set forth above, the Purported Transferee must pay the
excess to the Trust. Prior to any transfer resulting in Common
Stock or Preferred Stock being converted into Excess Stock, the
Purported Record Transferee and Purported Beneficial
Transferee, jointly, or Purported Record Holder and Purported
Beneficial Holder, jointly, must give written notice to the
Corporation of the date and sale price of the purported
Transfer that resulted in Excess Stock or the Market Price on
the date of the other event that resulted in Excess Stock.
Prior to a Transfer by the Trustee of any shares of Excess
Stock, the intended transferee must give advance notice to the
Corporation of the information (after giving effect to the
intended Transfer) required under subparagraph (a)(6), and the
Corporation must have waived in writing its purchase rights, if
any, under subparagraph (b)(6) of this Article NINTH. The
Board of Directors may waive the notice requirements of this
subparagraph in such circumstances as it deems appropriate.
(B) Notwithstanding the foregoing, if the provisions
of paragraph (b)(5) of this Article NINTH are determined to be
void or invalid by virtue of any legal decision, statue, rule
or regulation, then the Purported Beneficial Transferee or
Purported Beneficial Holder of any shares of Excess Stock may
be deemed, at the option of the Corporation, to have acted as
an agent on behalf of the Trust, in acquiring or holding such
shares of Excess Stock and to hold such shares of Excess Stock
in trust on behalf of the Trust.
(6) Shares of Excess Stock shall be deemed to have been
offered for sale by the Trust to the Corporation, or its
designee, at a price per share of Excess Stock equal to the
lesser of:
(A)(i) in the case of Excess Stock resulting from a
purported Transfer, (x) the price per share of the Common Stock
or Preferred Stock in the transaction that created such Excess
Stock (or, in the case of devise or gift, the Market Price of
the Common Stock or Preferred Stock at the time of such devise
or gift), or (y) in the absence of a notice from the Purported
Record Transferee or Purported Record Holder and Purported
Beneficial Transferee to the Corporation within ten days after
request therefor, such price as may be determined by the Board
of Directors in its sole discretion, which price per share of
Excess Stock shall be equal to the lowest Market Price of
Common Stock or Preferred Stock (whichever resulted in Excess
Stock) at any time prior to the date the Corporation, or its
designee, accepts such offer; or
(ii) in the case of Excess Stock resulting from an
event other than a Purported Transfer, (x) the Market Price of
the
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43
Common Stock or Preferred Stock on the date of such event,
or (y) in the absence of a notice from the Purported Record
Holder and Purported Beneficial Holder to the Corporation
within ten days after request therefor, such price as may be
determined, by the Board of Directors in its sole discretion,
which price shall be the lowest Market Price for shares of
Common Stock or Preferred Stock (whichever resulted in Excess
Stock) at any time from the date of the event resulting in
Excess Stock and prior to the date the Corporation, or its
designee, accepts such offer, and
(B) the Market Price of the Common Stock or
Preferred Stock 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 the Transfer which resulted in such shares
of Excess Stock and (ii) the date the Board of Directors
determines in good faith that a Transfer or other event
resulting in shares of Excess Stock has occurred, if the
Corporation does not receive a notice of such Transfer or other
event pursuant to subparagraph (a)(5) of this Article NINTH.
TENTH: Whenever the Corporation shall have the obligation to
purchase Units and shall have the right to choose to satisfy such
obligation by purchasing such Units either with cash or with Common
Stock, the determination whether to utilize cash or Common Stock to
effect such purchase shall be made by majority vote of the Independent
Directors.
ELEVENTH: The duration of the Corporation shall be perpetual. The
Corporation shall be subject to termination at any time by the vote of
the holders of a majority of the outstanding shares of Common Stock,
Class B Common Stock, Class C Common Stock, and Series A Preferred Stock
entitled to vote thereon.
TWELFTH: In the event any term, provision, sentence or paragraph of
the Charter of the Corporation is declared by a court of competent
jurisdiction to be invalid or unenforceable, such term, provision,
sentence or paragraph shall be deemed severed from the remainder of the
Charter, and the balance of the Charter shall remain in effect and be
enforced to the fullest extent permitted by law and shall be construed to
preserve the intent and purposes of the Charter. Any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such term, provision, sentence or paragraph of the Charter
in any other jurisdiction.
IN WITNESS WHEREOF, I have signed these Articles of Incorporation,
acknowledging the same to be my act, on September 14, 1993.
Witness:
/S/ ELIZABETH MONETTI /S/ JAMES J. WINN, JR.
- --------------------- -----------------------
Elizabeth Monetti James J. Winn, Jr.
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44
SECOND: (a) As of immediately before the amendment the total number
of shares of stock of all classes which the Corporation has authority to
issue is 412,000,000 shares, of which shares 246,000,000 are Common
Stock, 12,000,000 are Class B Common Stock, 4,000,000 are Series A
Preferred Stock, and 150,000,000 are Excess Stock.
(b) As amended the total number of shares of stock of all
classes which the Corporation has authority to issue is 650,000,000
shares, of which 383,996,000 shares are Common Stock (par value $.0001
per share), 12,000,000 shares are Class B Common Stock (par value $.0001
per share), 4,000 shares are Class C Common Stock (par value $.0001 per
share), 4,000,000 shares are Series A Preferred Stock (par value $.0001
per share), and 250,000,000 shares are Excess Stock (par value $.0001 per
share).
(c) The aggregate par value of all shares having a par
value is $41,200.00 before the amendment and $65,000.00 as amended.
(d) The shares of stock of the Corporation are divided
into classes, and the amendment contains a description, as amended, of
each class, including the preferences, conversion and other rights,
voting powers, restrictions, limitations as to dividends, qualifications,
and terms and conditions of redemption.
THIRD: The foregoing amendment to the Charter of the Corporation
has been approved by a majority of the entire Board of Directors and by
the requisite number of shares entitled to vote on the matter.
IN WITNESS WHEREOF, SIMON PROPERTY GROUP, INC. has caused these
presents to be signed in its name and on its behalf by its President and
witnessed by its Secretary on August 7, 1996.
WITNESS: SIMON PROPERTY GROUP, INC.
/S/ JAMES M. BARKLEY By /S/ DAVID SIMON
- --------------------- --------------------
James M. Barkley, Secretary David Simon, President
THE UNDERSIGNED, President of SIMON PROPERTY GROUP, INC., who executed
on behalf of the Corporation the foregoing Articles of Amendment and
Restatement of which this certificate is made a part, hereby acknowledges
in the name and on behalf of said Corporation the foregoing Articles of
Amendment and Restatement to be the corporate act of said Corporation and
hereby certifies that to the best of his knowledge, information, and
belief the matters and facts set forth therein with respect to the
authorization and approval thereof are true in all material respects
under the penalties of perjury.
By /S/ DAVID SIMON
--------------------------
David Simon, President
SIMON DEBARTOLO GROUP, INC.
AMENDED AND RESTATED BY-LAWS
ARTICLE I.
STOCKHOLDERS
SECTION 1.01. ANNUAL MEETING. The Corporation shall hold an annual
meeting of its stockholders to elect directors and transact any other
business within its powers, either at 10:00 a.m. on the second Wednesday
of May in each year if not a legal holiday, or at such other time on such
other day falling on or before the 30th day thereafter as shall be set by
the Board of Directors. Except as the Charter or statute provides
otherwise, any business may be considered at an annual meeting without
the purpose of the meeting having been specified in the notice. Failure
to hold an annual meeting does not invalidate the Corporation's existence
or affect any otherwise valid corporate acts.
SECTION 1.02. SPECIAL MEETING. At any time in the interval between
annual meetings, a special meeting of the stockholders may be called by
the Chairman of the Board or the President or by a majority of the Board
of Directors by vote at a meeting or in writing (addressed to the
Secretary of the Corporation) with or without a meeting; provided that a
special meeting of holders of the Class B Common Stock or Class C Common
Stock shall be called by the President in the event a vacancy occurs on
the Board from any cause among the directors elected by the holders of
the Class B Common Stock or Class C Common Stock, as the case may be, and
that a special meeting of holders of the Series A Preferred Stock, the
Common Stock, the Class C Common Stock and the Class B Common Stock shall
be called by the President in the event a vacancy occurs on the Board
from any cause among the directors elected by the holders of the Series A
Preferred Stock, the Common Stock, the Class C Common Stock and the Class
B Common Stock (voting together as a single class) and is not filled by
the directors within 30 days after the vacancy occurs. Special meetings
of the stockholders shall be called at the request of the stockholders as
may be required by law.
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SECTION 1.03. PLACE OF MEETINGS. Meetings of stockholders shall be
held at such place in the United States as is set from time to time by
the Board of Directors.
SECTION 1.04. NOTICE OF MEETINGS; WAIVER OF NOTICE. Not less than
ten nor more than 90 days before each stockholders' meeting, the
Secretary shall give written notice of the meeting to each stockholder
entitled to vote at the meeting and each other stockholder entitled to
notice of the meeting. The notice shall state the time and place of the
meeting and, if the meeting is a special meeting or notice of the purpose
is required by statute, the purpose of the meeting. Notice is given to a
stockholder when it is personally delivered to him, left at his residence
or usual place of business, or mailed to him at his address as it appears
on the records of the Corporation. Notwithstanding the foregoing
provisions, each person who is entitled to notice waives notice if he or
she before or after the meeting signs a waiver of the notice which is
filed with the records of stockholders' meetings, or is present at the
meeting in person or by proxy.
SECTION 1.05. QUORUM; VOTING. Unless any statute or the Charter
provides otherwise, at a meeting of stockholders the presence in person
or by proxy of stockholders entitled to cast a majority of all the votes
entitled to be cast at the meeting constitutes a quorum, and a majority
of all the votes cast at a meeting at which a quorum is present is
sufficient to approve any matter which properly comes before the meeting,
except that a plurality of all the votes cast at a meeting at which a
quorum is present is sufficient to elect a director.
SECTION 1.06. ADJOURNMENTS. Whether or not a quorum is present, a
meeting of stockholders convened on the date for which it was called may
be adjourned from time to time without further notice by a majority vote
of the stockholders present in person or by proxy to a date not more than
120 days after the original record date. Any business which might have
been transacted at the meeting as originally notified may be deferred and
transacted at any such adjourned meeting at which a quorum shall be
present.
SECTION 1.07. GENERAL RIGHT TO VOTE; PROXIES. Unless the Charter
provides otherwise, each outstanding share of stock, regardless of class,
is entitled to one vote on each matter submitted to a vote at a meeting
of stockholders. In all elections for directors, each share of stock
entitled to vote may be voted for as many individuals as there are
directors to be elected and for whose election the share is entitled to
be voted. A stockholder may vote the stock he or she owns of record
either in person or by written
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proxy signed by the stockholder or by his
or her duly authorized attorney in fact. Unless a proxy provides
otherwise, it is not valid more than 11 months after its date.
SECTION 1.08. LIST OF STOCKHOLDERS. At each meeting of
stockholders, a full, true and complete list of all stockholders entitled
to vote at such meeting, showing the number and class of shares held by
each and certified by the transfer agent for such class or by the
Secretary, shall be furnished by the Secretary.
SECTION 1.09. CONDUCT OF BUSINESS. Nominations of persons for
election to the Board of Directors and the proposal of business to be
considered by the stockholders may be made at an annual meeting of
stockholders (a) pursuant to the Corporation's notice of meeting, (b) by
or at the direction of the Board of Directors or (c) by any stockholder
of the Corporation who was a stockholder of record at the time of giving
notice provided for in Section 1.12, who is entitled to vote at the
meeting and who complied with the notice procedures set forth in Section
1.12. The chairman of the meeting shall have the power and duty to
determine whether a nomination or any business proposed to be brought
before the meeting was made in accordance with the procedures set forth
in this Section and Section 1.12 and, if any proposed nomination or
business is not in compliance with this Section and Section 1.12, to
declare that such defective nomination or proposal be disregarded.
SECTION 1.10. CONDUCT OF VOTING. At all meetings of stockholders,
unless the voting is conducted by inspectors, the proxies and ballots
shall be received, and all questions touching the qualification of voters
and the validity of proxies, the acceptance or rejection of votes and
procedures for the conduct of business not otherwise specified by these
By-Laws, the Charter or law, shall be decided or determined by the
chairman of the meeting. If demanded by stockholders, present in person
or by proxy, entitled to cast 10% in number of votes entitled to be cast,
or if ordered by the chairman, the vote upon any election or question
shall be taken by ballot and, upon like demand or order, the voting shall
be conducted by two inspectors, in which event the proxies and ballots
shall be received, and all questions touching the qualification of voters
and the validity of proxies and the acceptance or rejection of votes
shall be decided, by such inspectors. Unless so demanded or ordered, no
vote need be by ballot and voting need not be conducted by inspectors.
The stockholders at any meeting may choose an inspector or inspectors to
act at such meeting, and in default of such election the chairman of the
meeting may appoint an inspector or inspectors. No candidate for
election as a director at a meeting shall serve as an inspector thereat.
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SECTION 1.11. INFORMAL ACTION BY STOCKHOLDERS. Any action required
or permitted to be taken at a meeting of stockholders may be taken
without a meeting if there is filed with the records of stockholders
meetings an unanimous written consent which sets forth the action and is
signed by each stockholder entitled to vote on the matter and a written
waiver of any right to dissent signed by each stockholder entitled to
notice of the meeting but not entitled to vote at it.
SECTION 1.12. STOCKHOLDER PROPOSALS. For any stockholder proposal
to be presented in connection with an annual meeting of stockholders of
the Corporation, including any proposal relating to the nomination of a
director to be elected to the Board of Directors of the Corporation, the
stockholders must have given timely notice thereof in writing to the
Secretary of the Corporation. To be timely, a stockholder's notice shall
be delivered to the Secretary at the principal executive offices of the
Corporation not less than 60 days nor more than 90 days prior to the
first anniversary of the preceding year's annual meeting; provided,
however, that in the event that the date of the annual meeting is
advanced by more than 30 days or delayed by more than 60 days from such
anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the 90th day prior to such annual meeting and
not later than the close of business on the later of the 60th day prior
to such annual meeting or the tenth day following the day on which public
announcement of the date of such meeting is first made. Such
stockholder's notice shall set forth (a) as to each person whom the
stockholder proposes to nominate for election or reelection as a director
all information relating to such person that is required to be disclosed
in solicitations of proxies for election of directors, or is otherwise
required, in each case pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") (including such
person's written consent to being named in the proxy statement as a
nominee and to serving as a director if elected); (b) as to any other
business that the stockholder proposes to bring before the meeting, a
brief description of the business desired to be brought before the
meeting, the reasons for conducting such business at the meeting and any
material interest in such business of such stockholder and of the
beneficial owner, if any, on whose behalf the proposal is made; and (c)
as to the stockholder giving the notice and the beneficial owner, if any,
on whose behalf the nomination or proposal is made, (i) the name and
address of such stockholder, as they appear on the Corporation's books,
and of such beneficial owner and (ii) the class and number of shares of
stock of the Corporation which are owned beneficially and of record by
such stockholders and such beneficial owner.
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ARTICLE II.
BOARD OF DIRECTORS
SECTION 2.01. FUNCTION OF DIRECTORS. The business and affairs of
the Corporation shall be managed under the direction of its Board of
Directors. All powers of the Corporation may be exercised by or under
authority of the Board of Directors, except as conferred on or reserved
to the stockholders by statute or by the Charter or By-Laws.
SECTION 2.02. NUMBER OF DIRECTORS. The Corporation shall have that
number of directors as provided in paragraph (a) of Article SEVENTH of
the Charter.
SECTION 2.03. ELECTION AND TENURE OF DIRECTORS. Subject to the
rights of holders of Class B Common Stock and Class C Common Stock, and
subject to paragraph (e) of Article SEVENTH of the Charter, at each
annual meeting the stockholders shall elect directors to hold office
until the next annual meeting and until their successors are elected and
qualify.
SECTION 2.04. REMOVAL OF DIRECTOR. Any director or the entire
Board of Directors may be removed only in accordance with the provisions
of the Charter.
SECTION 2.05. VACANCY ON BOARD. Subject to the rights of the
holders of any class of Preferred Stock then outstanding, newly created
directorships resulting from any increase in the authorized number of
directors shall be filled by a vote of the stockholders or a majority of
the entire Board of Directors, and any vacancies on the Board of
Directors resulting from death, resignation, retirement,
disqualification, removal from office, or other cause shall be filled in
accordance with paragraph (b) of Article SEVENTH of the Charter. A
director elected by the stockholders to fill a vacancy which results from
the removal of a director serves for the balance of the term of the
removed director. A director elected by the Board of Directors to fill a
vacancy serves until the next annual meeting of stockholders and until
his successor is elected and qualifies.
SECTION 2.06. REGULAR MEETINGS. After each meeting of stockholders
at which directors shall have been elected, the Board of Directors shall
meet as soon as practicable for the purpose of organization and the
transaction of other business. In the
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event that no other time and place
are specified by resolution of the Board, the President or the Chairman,
with notice in accordance with Section 2.08, the Board of Directors shall
meet immediately following the close of, and at the place of, such
stockholders' meeting. Any other regular meeting of the Board of
Directors shall be held on such date and at any place as may be
designated from time to time by the Board of Directors.
SECTION 2.07. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board or the
President or by a majority of the Board of Directors by vote at a
meeting, or in writing with or without a meeting. A special meeting of
the Board of Directors shall be held on such date and at any place as may
be designated from time to time by the Board of Directors. In the
absence of designation such meeting shall be held at such place as may be
designated in the call.
SECTION 2.08. NOTICE OF MEETING. Except as provided in Section
2.06, the Secretary shall give notice to each director of each regular
and special meeting of the Board of Directors. The notice shall state
the time and place of the meeting. Notice is given to a director when it
is delivered personally to him, left at his residence or usual place of
business, or sent by telegraph, facsimile transmission or telephone, at
least 24 hours before the time of the meeting or, in the alternative by
mail to his address as it shall appear on the records of the Corporation,
at least 72 hours before the time of the meeting. Unless the By-Laws or
a resolution of the Board of Directors provides otherwise, the notice
need not state the business to be transacted at or the purposes of any
regular or special meeting of the Board of Directors. No notice of any
meeting of the Board of Directors need be given to any director who
attends except where a director attends a meeting for the express purpose
of objecting to the transaction of any business because the meeting is
not lawfully called or convened, or to any director who, in writing
executed and filed with the records of the meeting either before or after
the holding thereof, waives such notice. Any meeting of the Board of
Directors, regular or special, may adjourn from time to time to reconvene
at the same or some other place, and no notice need be given of any such
adjourned meeting other than by announcement.
SECTION 2.09. ACTION BY DIRECTORS. Unless statute or the Charter
or By-Laws requires a greater proportion, the action of a majority of the
directors present at a meeting at which a quorum is present is action of
the Board of Directors. A majority of the entire Board of Directors
shall constitute a quorum for the transaction of business. In addition,
the affirmative vote of least [six] of the Independent Directors is
necessary to cause any partnership in which the Corporation acts,
directly or indirectly, as a general partner to
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sell any property owned
by such partnership in accordance with the terms of the partnership
agreement of such partnership. In the absence of a quorum, the directors
present by majority vote and without notice other than by announcement
may adjourn the meeting from time to time until a quorum shall attend.
At any such adjourned meeting at which a quorum shall be present, any
business may be transacted which might have been transacted at the
meeting as originally notified. Any action required or permitted to be
taken at a meeting of the Board of Directors may be taken without a
meeting, if an unanimous written consent which sets forth the action is
signed by each member of the Board and filed with the minutes of
proceedings of the Board.
SECTION 2.10. MEETING BY CONFERENCE TELEPHONE. Members of the
Board of Directors may participate in a meeting by means of a conference
telephone or similar communications equipment if all persons
participating in the meeting can hear each other at the same time.
Participation in a meeting by these means constitutes presence in person
at a meeting.
SECTION 2.11. COMPENSATION. By resolution of the Board of
Directors a fixed sum and expenses, if any, for attendance at each
regular or special meeting of the Board of Directors or of committees
thereof, and other compensation for their services as such or on
committees of the Board of Directors, may be paid to directors.
Directors who are full-time employees of the Corporation need not be paid
for attendance at meetings of the board or committees thereof for which
fees are paid to other directors. A director who serves the Corporation
in any other capacity also may receive compensation for such other
services, pursuant to a resolution of the directors.
SECTION 2.12. ADVISORY DIRECTORS. The Board of Directors may by
resolution appoint advisory directors to the Board, who may also serve as
directors emeriti, and shall have such authority and receive such
compensation and reimbursement as the Board of Directors shall provide.
Advisory directors or directors emeriti shall not have the authority to
participate by vote in the transaction of business.
SECTION 2.13. LOSS OF DEPOSITS. No director shall be liable for
any loss which may occur by reason of the failure of any bank, trust
company, savings and loan association, or other institution with whom
moneys or stock of the Corporation have been deposited.
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SECTION 2.14. SURETY BONDS. Unless required by law, no director
shall be obligated to give any bond or surety or other security for the
performance of any of his or her duties.
ARTICLE III.
COMMITTEES
SECTION 3.01. COMMITTEES. The Board of Directors may appoint from
among its members an Executive Committee, an Audit Committee, a
Compensation Committee, a Nominating Committee and other committees
composed of two or more directors and delegate to these committees any of
the powers of the Board of Directors, except the power to declare
dividends or other distributions on stock, elect directors, issue stock
other than as provided in the next sentence, recommend to the
stockholders any action which requires stockholder approval, amend the
By-Laws, or approve any merger or share exchange which does not require
stockholder approval. Each committee except the Audit Committee and the
Nominating Committee shall have as a member at least one director elected
by the Class B Common Stock and at least one elected by the Class C
Common Stock. The entire Audit Committee and a majority of the
Compensation Committee shall be Independent Directors. The Nominating
Committee shall have five members, with two being Independent Directors,
two elected by the Class B Common Stock, and one elected by the Class C
Common Stock, and, except as otherwise provided in paragraph (b) of
Article SEVENTH of the Charter, only those members of the Nominating
Committee elected by the Class B Common Stock or the Class C Common Stock
shall nominate the persons to be elected to serve as directors by the
holders of Class B Common Stock or Class C Common Stock, respectively.
If the Board of Directors has given general authorization for the
issuance of stock, a committee of the Board, in accordance with a general
formula or method specified by the Board by resolution or by adoption of
a stock option or other plan, may fix the terms of stock subject to
classification or reclassification and the terms on which any stock may
be issued, including all terms and conditions required or permitted to be
established or authorized by the Board of Directors.
SECTION 3.02. COMMITTEE PROCEDURE. Each committee may fix rules of
procedure for its business. A majority of the members of a committee
shall constitute a quorum for the transaction of business and the act of
a majority of those present at a
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meeting at which a quorum is present
shall be the act of the committee. Any action required or permitted to
be taken at a meeting of a committee may be taken without a meeting, if
an unanimous written consent which sets forth the action is signed by
each member of the committee and filed with the minutes of the committee.
The members of a committee may conduct any meeting thereof by conference
telephone in accordance with the provisions of Section 2.10.
ARTICLE IV.
OFFICERS
SECTION 4.01. EXECUTIVE AND OTHER OFFICERS. The Corporation shall
have a President, a Secretary, and a Treasurer. The Corporation may also
have a Chairman of the Board, a Chief Executive Officer, one or more
Vice-Presidents, assistant officers, and subordinate officers as may be
established by the Board of Directors. A person may hold more than one
office in the Corporation except that no person may serve concurrently as
both President and Vice-President of the Corporation. The Chairman of
the Board shall be a director; the other officers may be directors.
SECTION 4.02. CHAIRMAN OF THE BOARD. The Chairman of the Board, if
one be elected, shall preside at all meetings of the Board of Directors
and of the stockholders at which he or she shall be present. In general,
the Chairman of the Board shall perform all such duties as are from time
to time assigned to him or her by the Board of Directors.
SECTION 4.03. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer
shall be the principal executive officer of the Corporation and, subject
to the control of the Board of Directors and with the President, shall in
general supervise and control all of the business and affairs of the
Corporation. In general, he or she shall perform such other duties
usually performed by a chief executive officer of a corporation and such
other duties as are from time to time assigned to him or her by the Board
of Directors of the Corporation. Unless otherwise provided by resolution
of the Board of Directors, the Chief Executive Officer, if one be
elected, in the absence of the Chairman of the Board, shall preside at
all meetings of the Board of Directors and of the stockholders at which
he or she shall be present.
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SECTION 4.04. PRESIDENT. Unless otherwise specified by the Board
of Directors, the President shall be the chief operating officer of the
Corporation and perform the duties customarily performed by a chief
operating officer of a corporation. If no Chief Executive Officer is
appointed, he or she shall also serve as the Chief Executive Officer of
the Corporation. The President may sign and execute, in the name of the
Corporation, all authorized deeds, mortgages, bonds, contracts or other
instruments, except in cases in which the signing and execution thereof
shall have been expressly delegated to some other officer or agent of the
Corporation. In general, he or she shall perform such other duties
usually performed by a president of a corporation and such other duties
as are from time to time assigned to him or her by the Board of Directors
or the Chief Executive Officer of the Corporation. Unless otherwise
provided by resolution of the Board of Directors, the President, in the
absence of the Chairman of the Board and the Chief Executive Officer,
shall preside at all meetings of the Board of Directors and of the
stockholders at which he or she shall be present.
SECTION 4.05. VICE-PRESIDENTS. The Vice-President or Vice-
Presidents, at the request of the Chief Executive Officer or the
President, or in the President's absence or during his inability to act,
shall perform the duties and exercise the functions of the President, and
when so acting shall have the powers of the President. If there be more
than one Vice-President, the Board of Directors may determine which one
or more of the Vice-Presidents shall perform any of such duties or
exercise any of such functions, or if such determination is not made by
the Board of Directors, the Chief Executive Officer, or the President may
make such determination; otherwise any of the Vice-Presidents may perform
any of such duties or exercise any of such functions. The Vice-President
or Vice-Presidents shall have such other powers and perform such other
duties, and have such additional descriptive designations in their titles
(if any), as are from time to time assigned to them by the Board of
Directors, the Chief Executive Officer, or the President.
SECTION 4.06. SECRETARY. The Secretary shall keep the minutes of
the meetings of the stockholders, of the Board of Directors and of any
committees, in books provided for the purpose; he or she shall see that
all notices are duly given in accordance with the provisions of the By-
Laws or as required by law; he or she shall be custodian of the records
of the Corporation; he or she may witness any document on behalf of the
Corporation, the execution of which is duly authorized, see that the
corporate seal is affixed where such document is required or desired to
be under its seal, and, when so affixed, may attest the same; and, in
general, the Secretary shall perform all duties incident to the office of
a secretary of a corporation, and such other duties as are from
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time to time assigned to him or her by the Board of Directors, the
Chief Executive Officer, or the President.
SECTION 4.07. TREASURER. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit, or cause to be deposited, in the name of
the Corporation, all moneys or other valuable effects in such banks,
trust companies or other depositories as shall, from time to time, be
selected by the Board of Directors; he or she shall render to the
President and to the Board of Directors, whenever requested, an account
of the financial condition of the Corporation; and, in general, the
Treasurer shall perform all the duties incident to the office of a
treasurer of a corporation, and such other duties as are from time to
time assigned to him or her by the Board of Directors, the Chief
Executive Officer, or the President.
SECTION 4.08. ASSISTANT AND SUBORDINATE OFFICERS. The assistant
and subordinate officers of the Corporation are all officers below the
office of Vice-President, Secretary, or Treasurer. The assistant or
subordinate officers shall have such duties as are from time to time
assigned to them by the Board of Directors, the Chief Executive Officer,
or the President.
SECTION 4.09. ELECTION, TENURE AND REMOVAL OF OFFICERS. The Board
of Directors shall elect the officers. The Board of Directors may from
time to time authorize any committee or officer to appoint assistant and
subordinate officers. Election or appointment of an officer, employee or
agent shall not of itself create contract rights. All officers shall be
appointed to hold their offices, respectively, during the pleasure of the
Board. The Board of Directors (or, as to any assistant or subordinate
officer, any committee or officer authorized by the Board) may remove an
officer at any time. The removal of an officer does not prejudice any of
his contract rights. The Board of Directors (or, as to any assistant or
subordinate officer, any committee or officer authorized by the Board)
may fill a vacancy which occurs in any office for the unexpired portion
of the term.
SECTION 4.10. COMPENSATION. The Board of Directors shall have
power to fix the salaries and other compensation and remuneration, of
whatever kind, of all officers of the Corporation. No officer shall be
prevented from receiving such salary by reason of the fact that he or she
is also a director of the Corporation. The Board of Directors may
authorize any committee or officer, upon whom the power of appointing
assistant and
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subordinate officers may have been conferred, to fix the
salaries, compensation and remuneration of such assistant and subordinate
officers.
ARTICLE V.
DIVISIONAL TITLES
SECTION 5.01. CONFERRING DIVISIONAL TITLES. The Board of Directors
may from time to time confer upon any employee of a division of the
Corporation the title of President, Vice President, Treasurer or
Controller of such division or any other title or titles deemed
appropriate, or may authorize the Chairman of the Board or the President
to do so. Any such titles so conferred may be discontinued and withdrawn
at any time by the Board of Directors, or by the Chairman of the Board or
the President if so authorized by the Board of Directors. Any employee
of a division designated by such a divisional title shall have the powers
and duties with respect to such division as shall be prescribed by the
Board of Directors, the Chairman of the Board or the President.
SECTION 5.02. EFFECT OF DIVISIONAL TITLES. The conferring of
divisional titles shall not create an office of the Corporation under
Article IV unless specifically designated as such by the Board of
Directors; but any person who is an officer of the Corporation may also
have a divisional title.
ARTICLE VI.
STOCK
SECTION 6.01. CERTIFICATES FOR STOCK. Each stockholder is entitled
to certificates which represent and certify the shares of stock he or she
holds in the Corporation. Each stock certificate shall include on its
face the name of the Corporation, the name of the stockholder or other
person to whom it is issued, and the class of stock and number of shares
it represents. It shall be in such form, not inconsistent with law or
with the Charter, as shall be approved by the Board of Directors or any
officer or officers designated for such purpose by resolution of the
Board of Directors. Each stock certificate shall be signed by the
Chairman of the Board, the President, or a Vice-President, and
countersigned by the Secretary, an Assistant Secretary, the Treasurer, or
an Assistant Treasurer. Each certificate may be sealed with the actual
corporate seal or a
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facsimile of it or in any other form and the
signatures may be either manual or facsimile signatures. A certificate
is valid and may be issued whether or not an officer who signed it is
still an officer when it is issued. A certificate may not be issued
until the stock represented by it is fully paid.
SECTION 6.02. TRANSFERS. The Board of Directors shall have power
and authority to make such rules and regulations as it may deem expedient
concerning the issue, transfer and registration of certificates of stock;
and may appoint transfer agents and registrars thereof. The duties of
transfer agent and registrar may be combined.
SECTION 6.03. RECORD DATES AND CLOSING OF TRANSFER BOOKS. The
Board of Directors may set a record date or direct that the stock
transfer books be closed for a stated period for the purpose of making
any proper determination with respect to stockholders, including which
stockholders are entitled to notice of a meeting, vote at a meeting,
receive a dividend, or be allotted other rights. The record date may not
be prior to the close of business on the day the record date is fixed
nor, subject to Section 1.06, more than 90 days before the date on which
the action requiring the determination will be taken; the transfer books
may not be closed for a period longer than 20 days; and, in the case of a
meeting of stockholders, the record date or the closing of the transfer
books shall be at least ten days before the date of the meeting.
SECTION 6.04. STOCK LEDGER. The Corporation shall maintain a stock
ledger which contains the name and address of each stockholder and the
number of shares of stock of each class which the stockholder holds. The
stock ledger may be in written form or in any other form which can be
converted within a reasonable time into written form for visual
inspection. The original or a duplicate of the stock ledger shall be
kept at the offices of a transfer agent for the particular class of
stock, or, if none, at the principal office in the State of Maryland or
the principal executive offices of the Corporation.
SECTION 6.05. CERTIFICATION OF BENEFICIAL OWNERS. The Board of
Directors may adopt by resolution a procedure by which a stockholder of
the Corporation may certify in writing to the Corporation that any shares
of stock registered in the name of the stockholder are held for the
account of a specified person other than the stockholder. The resolution
shall set forth the class of stockholders who may certify; the purpose
for which the certification may be made; the form of certification and
the information to be contained in it; if the certification is with
respect to a record date or closing of the stock transfer books, the time
after the record date or closing of the stock transfer books within
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<PAGE>
which
the certification must be received by the Corporation; and any other
provisions with respect to the procedure which the Board considers
necessary or desirable. On receipt of a certification which complies
with the procedure adopted by the Board in accordance with this Section,
the person specified in the certification is, for the purpose set forth
in the certification, the holder of record of the specified stock in
place of the stockholder who makes the certification.
SECTION 6.06. LOST STOCK CERTIFICATES. The Board of Directors of
the Corporation may determine the conditions for issuing a new stock
certificate in place of one which is alleged to have been lost, stolen,
or destroyed, or the Board of Directors may delegate such power to any
officer or officers of the Corporation. In their discretion, the Board
of Directors or such officer or officers may refuse to issue such new
certificate save upon the order of some court having jurisdiction in the
premises.
SECTION 6.07. EXEMPTION FROM CONTROL SHARE ACQUISITION STATUTE. The
provisions of Sections 3-701 to 3-709 of the Corporations and
Associations Article of the Annotated Code of Maryland shall not apply to
any share of the capital stock of the Corporation and such shares of
capital stock are exempted from such Sections to the fullest extent
permitted by Maryland law.
ARTICLE VII.
FINANCE
SECTION 7.01. CHECKS, DRAFTS, ETC. All checks, drafts and orders
for the payment of money, notes and other evidences of indebtedness,
issued in the name of the Corporation, shall, unless otherwise provided
by resolution of the Board of Directors, be signed by the Chief Executive
Officer, the President, a Vice-President or an Assistant Vice-President
and countersigned by the Treasurer, an Assistant Treasurer, the Secretary
or an Assistant Secretary.
SECTION 7.02. ANNUAL STATEMENT OF AFFAIRS. The President or chief
accounting officer shall prepare annually a full and correct statement of
the affairs of the Corporation, to include a balance sheet and a
financial statement of operations for the preceding fiscal year. The
statement of affairs shall be submitted at the annual meeting
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<PAGE>
of the stockholders and, within 20 days after the meeting, placed on file
at the Corporation's principal office.
SECTION 7.03. FISCAL YEAR. The fiscal year of the Corporation
shall be the twelve calendar months period ending December 31 in each
year, unless otherwise provided by the Board of Directors.
SECTION 7.04. DIVIDENDS. If declared by the Board of Directors at
any meeting thereof, the Corporation may pay dividends on its shares in
cash, property, or in shares of the capital stock of the Corporation,
unless such dividend is contrary to law or to a restriction contained in
the Charter.
SECTION 7.05. CONTRACTS. To the extent permitted by applicable
law, and except as otherwise prescribed by the Charter or these By-Laws
with respect to certificates for shares, the Board of Directors may
authorize any officer, employee, or agent of the Corporation to enter
into any contract or execute and deliver any instrument in the name of
and on behalf of the Corporation. Such authority may be general or
confined to specific instances.
ARTICLE VIII.
INDEMNIFICATION
SECTION 8.01. PROCEDURE. Any indemnification, or payment of
expenses in advance of the final disposition of any proceeding, shall be
made promptly, and in any event within 60 days, upon the written request
of the director or officer entitled to seek indemnification (the
"Indemnified Party"). The right to indemnification and advances
hereunder shall be enforceable by the Indemnified Party in any court of
competent jurisdiction, if (i) the Corporation denies such request, in
whole or in part, or (ii) no disposition thereof is made within 60 days.
The Indemnified Party's costs and expenses incurred in connection with
successfully establishing his right to indemnification, in whole or in
part, in any such action shall also be reimbursed by the Corporation. It
shall be a defense to any action for advance for expenses that (a) a
determination has been made that the facts then known to those making the
determination would preclude indemnification or (b) the Corporation has
not received both (i) an undertaking as required by law to repay such
advances in the event it shall ultimately be determined that
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<PAGE>
the standard
of conduct has not been met and (ii) a written affirmation by the
Indemnified Party of such Indemnified Party's good faith belief that the
standard of conduct necessary for indemnification by the Corporation has
been met.
SECTION 8.02. EXCLUSIVITY, ETC. The indemnification and advance of
expenses provided by the Charter and these By-Laws shall not be deemed
exclusive of any other rights to which a person seeking indemnification
or advance of expenses may be entitled under any law (common or
statutory), or any agreement, vote of stockholders or disinterested
directors or other provision that is consistent with law, both as to
action in his official capacity and as to action in another capacity
while holding office or while employed by or acting as agent for the
Corporation, shall continue in respect of all events occurring while a
person was a director or officer after such person has ceased to be a
director or officer, and shall inure to the benefit of the estate, heirs,
executors and administrators of such person. All rights to
indemnification and advance of expenses under the Charter of the
Corporation and hereunder shall be deemed to be a contract between the
Corporation and each director or officer of the Corporation who serves or
served in such capacity at any time while this By-Law is in effect.
Nothing herein shall prevent the amendment of this By-Law, provided that
no such amendment shall diminish the rights of any person hereunder with
respect to events occurring or claims made before its adoption or as to
claims made after its adoption in respect of events occurring before its
adoption. Any repeal or modification of this By-Law shall not in any way
diminish any rights to indemnification or advance of expenses of such
director or officer or the obligations of the Corporation arising
hereunder with respect to events occurring, or claims made, while this
By-Law or any provision hereof is in force.
SECTION 8.03. SEVERABILITY; DEFINITIONS. The invalidity or
unenforceability of any provision of this Article VIII shall not affect
the validity or enforceability of any other provision hereof. The phrase
"this By-Law" in this Article VIII means this Article VIII in its
entirety.
ARTICLE IX.
SUNDRY PROVISIONS
SECTION 9.01. BOOKS AND RECORDS. The Corporation shall keep
correct and complete books and records of its accounts and transactions
and minutes of the
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<PAGE>
proceedings of its stockholders and Board of Directors
and of any executive or other committee when exercising any of the powers
of the Board of Directors. The books and records of a Corporation may be
in written form or in any other form which can be converted within a
reasonable time into written form for visual inspection. Minutes shall
be recorded in written form but may be maintained in the form of a
reproduction. The original or a certified copy of the By-Laws shall be
kept at the principal office of the Corporation.
SECTION 9.02. CORPORATE SEAL. The Board of Directors shall provide
a suitable seal, bearing the name of the Corporation, which shall be in
the charge of the Secretary. The Board of Directors may authorize one or
more duplicate seals and provide for the custody thereof. If the
Corporation is required to place its corporate seal to a document, it is
sufficient to meet the requirement of any law, rule, or regulation
relating to a corporate seal to place the word "Seal" adjacent to the
signature of the person authorized to sign the document on behalf of the
Corporation.
SECTION 9.03. BONDS. The Board of Directors may require any
officer, agent or employee of the Corporation to give a bond to the
Corporation, conditioned upon the faithful discharge of his duties, with
one or more sureties and in such amount as may be satisfactory to the
Board of Directors.
SECTION 9.04. VOTING UPON SHARES IN OTHER CORPORATIONS. Stock of
other corporations or associations, registered in the name of the
Corporation, may be voted by the President, a Vice-President, or a proxy
appointed by either of them. The Board of Directors, however, may by
resolution appoint some other person to vote such shares, in which case
such person shall be entitled to vote such shares upon the production of
a certified copy of such resolution.
SECTION 9.05. MAIL. Any notice or other document which is required
by these By-Laws to be mailed shall be deposited in the United States
mails, postage prepaid.
SECTION 9.06. EXECUTION OF DOCUMENTS. A person who holds more than
one office in the Corporation may not act in more than one capacity to
execute, acknowledge, or verify an instrument required by law to be
executed, acknowledged, or verified by more than one officer.
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<PAGE>
SECTION 9.07. RELIANCE. Each director, officer, employee and agent
of the Corporation shall, in the performance of his or her duties with
respect to the Corporation, be fully justified and protected with regard
to any act or failure to act in reliance in good faith upon the books of
account or other records of the Corporation, upon an opinion of counsel
or upon reports made to the Corporation by any of its officers or
employees or by the adviser, accountants, appraisers or other experts or
consultants selected by the Board of Directors or officers of the
Corporation, regardless of whether such counsel or expert may also be a
director.
SECTION 9.08. CERTAIN RIGHTS OF DIRECTORS, OFFICERS, EMPLOYEES AND
AGENTS. The directors shall have no responsibility to devote their full
time to the affairs of the Corporation. Any director or officer,
employee or agent of the Corporation, in his or her personal capacity or
in a capacity as an affiliate, employee, or agent of any other person, or
otherwise, may have business interests and engage in business activities
similar to or in addition to those of or relating to the Corporation.
SECTION 9.09. AMENDMENTS. Subject to the special provisions of
Section 2.02, in accordance with the Charter, these By-Laws may be
repealed, altered, amended or rescinded (a) by the stockholders of the
Corporation (considered for this purpose as one class) by the affirmative
vote of not less than 80% of all the votes entitled to be cast generally
in the election of directors which are cast on the matter at any meeting
of the stockholders called for that purpose (provided that notice of such
proposed repeal, alteration, amendment or rescission is included in the
notice of such meeting) or (b) except for the provision of Section 2.09
which relates to the sale of property owned by partnerships in which the
Corporation acts as a general partner, by vote of two-thirds of the Board
of Directors (including at least a majority of the directors elected by
the Class B Common Stock and at least one director elected by Class C
Common Stock) at a meeting held in accordance with the provisions of
these By-Laws.
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Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, N.Y. 10019-6064
(212) 373-3000 August 9, 1996
Simon Property Group, Inc
115 West Washington Street
Indianapolis, Indiana 45204
Dear Ladies and Gentlemen:
This opinion is being furnished to you pursuant to Section
6.2(d) of the Agreement and Plan of Merger dated as of March 26, 1996
(the "Merger Agreement"), between Simon Property Group, Inc., a Maryland
corporation ("SPG"), Day Acquisition Corp., an Ohio corporation ("Sub"),
and DeBartolo Realty Corporation, an Ohio corporation ("DRC"). All
capitalized terms used herein have their respective meanings set forth in
the Form S-4, filed with the Securities and Exchange Commission on June
26, 1996 (the "Registration Statement") unless otherwise stated.
In rendering the opinions expressed herein, we have examined
and, with your consent, relied upon the following: (i) the Registration
Statement and all amendments to date; (ii) the Merger Agreement; (iii)
the SPG Partnership Agreement and the Amended Operating Partnership
Agreement; (iv) the partnership agreements of the partnerships which SPG,
DRC, the SPG Operating Partnership or the Operating Partnership, directly
or indirectly, owns in whole or in part (the "Subsidiary Partnerships");
(v) an opinion of Willkie Farr & Gallagher ("WF&G") dated the date
hereof, addressed to SPG that DRC has qualified as a REIT from the
taxable year ended December 31, 1994 until the Effective Time of the
Merger; (vi) an opinion of WF&G dated the date hereof, addressed to SPG
that the DRC Operating Partnership and each partnership, LLC, joint
venture or business trust in which DRC or the DRC
<PAGE>
Simon Property Group, Inc 2
Operating Partnership,
directly or indirectly, owns an interest have qualified as partnerships
and not as corporations or associations taxable as corporations from the
beginning of the taxable year ended December 31, 1994 until the Effective
Time of the Merger; and (vii) such other documents, records and
instruments as we have deemed necessary in order to enable us to render
the opinions expressed herein.
In our examination of documents, we have assumed, with your
consent, (i) that all documents submitted to us are authentic originals,
or if submitted as photocopies, that they faithfully reproduce the
originals thereof; (ii) that all such documents have been or will be duly
executed to the extent required; (iii) that all representations and
statements set forth in such documents are true and correct; (iv) that
any representation or statement made as a belief or made "to the
knowledge of," or similarly qualified is correct and accurate without
such qualification; (v) that all obligations imposed by any such
documents on the parties thereto have been or will be performed or
satisfied in accordance with their terms; and (vi) that the Simon
DeBartolo Group, the Surviving Subsidiary Corporation, the SPG Operating
Partnership, the Operating Partnership, the Management Companies and the
Subsidiary Partnerships at all times will be organized and operated in
accordance with the terms of such documents. We have further assumed
that the statements and descriptions of the Simon DeBartolo Group's, the
Surviving Subsidiary Corporation's, the SPG Operating Partnership's, the
Operating Partnership's, the Management Companies' and the Subsidiary
Partnerships' businesses, properties, and intended activities as
described in the Registration Statement are accurate and that all actions
contemplated in the Registration Statement with respect to the
organization of the Simon DeBartolo Group and the Surviving Subsidiary
Corporation as real estate investment trusts ("REITs") have been or will
be completed in a timely fashion.
For purposes of rendering the opinions expressed herein, we
also have assumed, with your consent, the accuracy of the representations
contained in the letter from SPG addressed to us dated June 25, 1996 and
the letter from DRC addressed to us dated June 25, 1996. These
representations relate to the classification and operation of SPG, Simon
DeBartolo Group and the Surviving Subsidiary Corporation as REITs and the
organization and operation of the SPG Operating Partnership, the
Operating Partnership and the Management Companies. We have also relied
on the officer's certificate from SPG dated the date hereof and the
officer's certificate from DRC dated the date hereof, which both certify
that the aforementioned representations continue to be true and correct
until the date hereof. In addition, we have assumed that SPG has
operated and that the Simon DeBartolo Group and the Surviving Subsidiary
Corporation will operate in accordance with the methods of operation
described in the Registration Statement.
<PAGE>
Simon Property Group, Inc 3
Based upon and subject to the foregoing, we are of the
following opinions:
1. Commencing with the taxable year ended December 31, 1994,
SPG has been organized in conformity with the requirements for
qualification as a REIT under the Code, and SPG's, the SPG
Operating Partnership's and the SPG Management Company's
methods of operation as described in the Registration Statement
and as represented by SPG, have permitted, and will continue to
permit SPG to continue to so qualify for its current taxable
year.
2. Commencing with the Effective Time, the Simon DeBartolo
Group and the Surviving Subsidiary Corporation will be
organized in conformity with the requirements for qualification
as a REIT under the Code, and the Simon DeBartolo Group's, the
Surviving Subsidiary Corporation's, the SPG Operating
Partnership's, the Operating Partnership's and the Management
Companies' methods of operation as described in the
Registration Statement and as represented by SPG and by DRC,
will permit the Simon DeBartolo Group and the Surviving
Subsidiary Corporation to so qualify for its current and
subsequent taxable years.
3. Commencing with the taxable year ended December 31, 1994,
the SPG Operating Partnership and each partnership in which SPG
or the SPG Operating Partnership, directly or indirectly, owns
an interest, have been and will continue to be treated as
partnerships and not as corporations or associations taxable as
corporations, for federal income tax purposes.
4. Commencing with the Effective Time, the Operating
Partnership and each of the Subsidiary Partnerships will be
treated as partnerships and not as corporations or associations
taxable as corporations, for federal income tax purposes.
This opinion is given as of the date hereof and is based on
various statutory provisions, regulations promulgated thereunder and
interpretations thereof by the Internal Revenue Service and the courts
having jurisdiction over such matters, all of which are subject to change
either prospectively or retroactively. Further, any variation or
difference in the facts from those set forth in the Registration
Statement
<PAGE>
Simon Property Group, Inc 4
may affect the conclusions stated herein. Moreover, the Simon
DeBartolo Group's and the Surviving Subsidiary Corporation's
qualifications and taxation as REITs depend upon the Simon DeBartolo
Group's and the Surviving Subsidiary Corporation's abilities to meet --
through actual annual operating results -- requirements under the Code
regarding income, distributions and diversity of stock ownership.
Because the Simon DeBartolo Group's and the Surviving Subsidiary
Corporation's satisfaction of these requirements will depend upon future
events, no assurance can be given that the actual results of the Simon
DeBartolo Group's and the Surviving Subsidiary Corporation's operations
for any one taxable year will satisfy the tests necessary to qualify as
or be taxed as a REIT under the Code.
We express no opinion as to any federal income tax issue or
other matter except those set forth or confirmed above.
This letter is furnished by us solely for your benefit in
connection with the transactions referred to in the Merger Agreement and
may not be circulated to, or relied upon by, any other party.
Very truly yours,
/s/ Paul, Weiss, Rifkind, Wharton & Garrison
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
<PAGE>
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, N.Y. 10019-6064
(212) 373-3000 August 9, 1996
DeBartolo Realty Corp.
7655 Market Street
P.O. Box 3287
Youngstown, OH 44513-3287
Dear Ladies and Gentlemen:
We have acted as counsel to Simon Property Group, Inc., a
Maryland corporation ("SPG"). This opinion is being furnished to you
pursuant to Section 6.3(d) and 6.3(e) of the Agreement and Plan of Merger
dated as of March 26, 1996, as amended (the "Merger Agreement"), between
Simon Property Group, Inc., a Maryland corporation ("SPG"), Day
Acquisition Corp., an Ohio corporation ("Sub"), and DeBartolo Realty
Corporation, an Ohio corporation ("DRC"). All capitalized terms used
herein have their respective meanings set forth in the Form S-4, filed
with the Securities and Exchange Commission on June 26, 1996 (the
"Registration Statement") unless otherwise stated.
In rendering the opinions expressed herein, we have examined
and, with your consent, relied upon the following: (i) the Registration
Statement and all amendments to date; (ii) the Merger Agreement; (iii)
the SPG Partnership Agreement and the Amended Operating Partnership
Agreement; (iv) the partnership agreements of the partnerships which SPG,
DRC, the SPG Operating Partnership or the Operating Partnership, directly
or indirectly, owns in whole or in part (the "Subsidiary Partnerships");
(v) an opinion of Willkie Farr & Gallagher ("WF&G") dated the date
hereof, addressed to SPG that the Merger qualifies as a reorganization
under Section 368(a) of the Code; (vi) an opinion of WF&G dated the date
hereof, addressed to SPG that DRC has qualified as a REIT from the
taxable year ended December 31, 1994 until the Effective Time of the
Merger; (vii) an opinion of WF&G dated the
<PAGE>
DeBartolo Realty Corp. 2
date hereof, addressed to SPG
that the DRC Operating Partnership and each partnership, LLC, joint
venture or business trust in which DRC or the DRC Operating Partnership,
directly or indirectly, owns an interest have qualified as partnerships
and not as corporations or associations taxable as corporations from the
beginning of the taxable year ended December 31, 1994 until the Effective
Time of the Merger; and (viii) such other documents, records and
instruments as we have deemed necessary in order to enable us to render
the opinions expressed herein.
In our examination of documents, we have assumed, with your
consent, (i) that all documents submitted to us are authentic originals,
or if submitted as photocopies, that they faithfully reproduce the
originals thereof; (ii) that all such documents have been or will be duly
executed to the extent required; (iii) that all representations and
statements set forth in such documents are true and correct; (iv) that
any representation or statement made as a belief or made "to the
knowledge of," or similarly qualified is correct and accurate without
such qualification; (v) that all obligations imposed by any such
documents on the parties thereto have been or will be performed or
satisfied in accordance with their terms; and (vi) that the Simon
DeBartolo Group, the Surviving Subsidiary Corporation, the SPG Operating
Partnership, the Operating Partnership, the Management Companies and the
Subsidiary Partnerships at all times will be organized and operated in
accordance with the terms of such documents. We have further assumed
that the statements and descriptions of the Simon DeBartolo Group's, the
Surviving Subsidiary Corporation's, the SPG Operating Partnership's, the
Operating Partnership's, the Management Companies' and the Subsidiary
Partnerships' businesses, properties, and intended activities as
described in the Registration Statement are accurate and that all actions
contemplated in the Registration Statement with respect to the
organization of the Simon DeBartolo Group and the Surviving Subsidiary
Corporation as real estate investment trusts ("REITs") have been or will
be completed in a timely fashion.
For purposes of rendering the opinions expressed herein, we
also have assumed, with your consent, the accuracy of the representations
contained in the letter from SPG addressed to us dated June 25, 1996 and
the letter from DRC addressed to us dated June 25, 1996. These
representations relate to the classification and operation of SPG, Simon
DeBartolo Group and the Surviving Subsidiary Corporation as REITs and the
organization and operation of the SPG Operating Partnership, the
Operating Partnership and the Management Companies. We have also relied
on the officer's certificate from SPG dated the date hereof and the
officer's certificate from DRC dated the date hereof, which both certify
that the aforementioned representations continue to be true and correct
until the date hereof. In addition, we have assumed that SPG has
operated and that the Simon DeBartolo Group and the Surviving
<PAGE>
DeBartolo Realty Corp. 3
Subsidiary Corporation will operate in accordance with the methods of
operation described in the Registration Statement.
Furthermore, we have assumed, with your consent, the accuracy
of the representations contained in the Officer's Certificates from SPG
and from DRC dated the date hereof. These representations relate to the
Merger and its qualification as a Reorganization.
Based upon and subject to the foregoing, we are of the
following opinions:
1. Commencing with the taxable year ended December 31, 1994,
SPG has been organized in conformity with the requirements for
qualification as a REIT under the Code, and SPG's, the SPG
Operating Partnership's and the SPG Management Company's
methods of operation as described in the Registration Statement
and as represented by SPG, have permitted, and will continue to
permit SPG to continue to so qualify for its current taxable
year.
2. Commencing with the Effective Time, the Simon DeBartolo
Group and the Surviving Subsidiary Corporation will be
organized in conformity with the requirements for qualification
as a REIT under the Code, and the Simon DeBartolo Group's, the
Surviving Subsidiary Corporation's, the SPG Operating
Partnership's, the Operating Partnership's and the Management
Companies' methods of operation as described in the
Registration Statement and as represented by SPG and by DRC,
will permit the Simon DeBartolo Group and the Surviving
Subsidiary Corporation to so qualify for its current and
subsequent taxable years.
3. Commencing with the taxable year ended December 31, 1994,
the SPG Operating Partnership and each partnership in which SPG
or the SPG Operating Partnership, directly or indirectly, owns
an interest, have been and will continue to be treated as
partnerships and not as corporations or associations taxable as
corporations, for federal income tax purposes.
4. Commencing with the Effective Time, the Operating
Partnership and each of the Subsidiary Partnerships will be
treated as partnerships
<PAGE>
DeBartolo Realty Corp. 4
and not as corporations or associations taxable as corporations,
for federal income tax purposes.
5. The Merger will qualify as a reorganization within the
meaning of Section 368(a) of the Code.
This opinion is given as of the date hereof and is based on
various statutory provisions, regulations promulgated thereunder and
interpretations thereof by the Internal Revenue Service and the courts
having jurisdiction over such matters, all of which are subject to change
either prospectively or retroactively. Further, any variation or
difference in the facts from those set forth in the Registration
Statement may affect the conclusions stated herein. Moreover, the Simon
DeBartolo Group's and the Surviving Subsidiary Corporation's
qualifications and taxation as REITs depend upon the Simon DeBartolo
Group's and the Surviving Subsidiary Corporation's abilities to meet --
through actual annual operating results -- requirements under the Code
regarding income, distributions and diversity of stock ownership.
Because the Simon DeBartolo Group's and the Surviving Subsidiary
Corporation's satisfaction of these requirements will depend upon future
events, no assurance can be given that the actual results of the Simon
DeBartolo Group's and the Surviving Subsidiary Corporation's operations
for any one taxable year will satisfy the tests necessary to qualify as
or be taxed as a REIT under the Code.
We express no opinion as to any federal income tax issue or
other matter except those set forth or confirmed above.
This letter is furnished by us solely for your benefit in
connection with the transactions referred to in the Merger Agreement and
may not be circulated to, or relied upon by, any other party.
Very truly yours,
/s/ Paul, Weiss, Rifkind, Wharton & Garrison
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
[WILLKIE FARR & GALLAGHER LETTERHEAD]
August 9, 1996
Simon Property Group, Inc.
115 West Washington Street
Indianapolis, Indiana 46204
Day Acquisition Corp.
115 West Washington Street
Indianapolis, Indiana 46204
Ladies and Gentlemen:
We have acted as counsel to DeBartolo Realty Corporation, an
Ohio corporation ("DRC"). This opinion is being furnished to you
pursuant to Sections 6.2(d)(i) and 6.2(e) of the Agreement and Plan of
Merger dated as of March 26, 1996, as amended (the "Merger Agreement"),
between Simon Property Group, Inc., a Maryland corporation ("SPG"), Day
Acquisition Corp., an Ohio corporation ("Sub") and DRC. Pursuant to the
Merger Agreement, Sub will merge with and into DRC (the "Merger") and DRC
will become a subsidiary of SPG.
Except as otherwise provided, capitalized terms referred to
herein have the meanings ascribed to them in the Form S-4 filed with the
Securities and Exchange Commission on June 26, 1996 (the "Registration
Statement"). All section references are to the Internal Revenue Code of
1986, as amended (the "Code").
<PAGE>
In rendering the opinions expressed herein, we have examined
and, with your consent, relied upon (without any independent
investigation thereof) statements and representations in the following
documents (including all schedules and exhibits thereto): (i) the Merger
Agreement; (ii) the Registration Statement; (iii) the organizational
documents of the DRC Operating Partnership and each entity in which DRC
or the DRC Operating Partnership has an interest; (iv) an opinion of
Paul, Weiss, Rifkind, Wharton & Garrison ("PWRW&G") dated the date
hereof, addressed to DRC that the Merger qualifies as a reorganization
under section 368(a) of the Code; (v) an opinion of PWRW&G dated the date
hereof, addressed to DRC that SPG has qualified as a real estate
investment trust commencing with the taxable year ended December 31, 1994
until the Effective Time; (vi) an opinion of PWRW&G dated the date
hereof, addressed to DRC that the SPG Operating Partnership and each
partnership, limited liability company, joint venture or trust in which
SPG or the SPG Operating Partnership, directly or indirectly owns an
interest have qualified and continue to qualify as partnerships and not
as corporations or associations taxable as corporations commencing with
the taxable year ended December 31, 1994 until the Effective Time; and
(vii) such other instruments, documents and records as we have deemed
necessary in order to enable us to render the opinions expressed herein.
In our examination of the foregoing documents, we have assumed,
with your consent: (i) that original documents (including signatures) are
authentic, documents submitted to us as copies conform to the original
documents, and there has been (or will be by the Effective Time) due
execution and delivery of all documents where due execution and delivery
are prerequisites to the effectiveness thereof; (ii) that all
representations and statements set forth in such documents are true and
correct; (iii) that any representation or statement made "to the
knowledge of" or similarly qualified is correct and accurate without such
qualification; (iv) that all obligations imposed by any such documents on
the parties thereto have been or will be performed or satisfied in
accordance with their terms; and (v) that DRC, the DRC Operating
Partnership and each partnership, limited liability company, joint
venture or trust in which DRC or the DRC Operating Partnership, directly
or indirectly owns an interest have at all times been organized and
operated in accordance with the terms of their respective organizational
documents and in accordance with all applicable laws.
<PAGE>
For purposes of rendering the opinions expressed herein, we also
have assumed, with your consent, the accuracy of the representations
contained in the letter from DRC addressed to us dated June 25, 1996.
These representations relate to the classification and operation of DRC
as a real estate investment trust and the organization and operation of
the DRC Operating Partnership. We have also relied on an Officer's
Certificate from DRC dated the date hereof which certifies that the
aforementioned representations continue to be true and correct.
Furthermore, we have assumed, with your consent, the accuracy of
the representations contained in the Officer's Certificates from DRC and
SPG and Sub dated the date hereof. These representations relate to the
Merger and its qualification as a reorganization under the Code.
Based on such facts, assumptions and representations and subject
to the qualifications stated below, we are of the following opinions:
(i) the Merger will qualify as a reorganization within the
meaning of section 368(a) of the Code;
(ii) commencing with the taxable year ended December 31,
1994 and until the date hereof, (1) DRC was organized and has operated in
conformity with the requirements for qualification as a real estate
investment trust within the meaning of the Code, and (2) the DRC
Operating Partnership and each partnership, limited liability company,
joint venture or trust in which DRC or the DRC Operating Partnership
directly or indirectly owns an interest has been treated, for federal
income tax purposes, as a partnership and not as a corporation or an
association taxable as a corporation.
These opinions are given as of the date hereof and are based on
various statutory provisions, regulations promulgated thereunder and
interpretations thereof by the Internal Revenue Service and the courts
having jurisdiction over such matters, all of which are subject to change
either prospectively or retroactively. Further, any variation or
difference in the facts from those set forth in the Registration
Statement may affect the conclusions stated herein. Moreover, the Simon
DeBartolo Group's and the Surviving Subsidiary Corporation's
qualification and
<PAGE>
taxation as real estate investment trusts depend on
their ability to meet -- through actual operating and other results --
certain requirements under the Code regarding income, distributions and
diversity of stock ownership. As Willkie Farr & Gallagher will not
review annually whether the Simon DeBartolo Group and the Surviving
Subsidiary Corporation have fulfilled these requirements, no assurance
can be given that the actual results of the Simon DeBartolo Group's and
the Surviving Subsidiary Corporation's operation and other activities for
any one or more taxable years will satisfy the tests necessary to qualify
or be taxed as a real estate investment trust under the Code.
We express no opinion as to any federal income tax issue or
other matter except those set forth or confirmed above.
This opinion is furnished by us solely for your benefit in
connections with the transactions referred to in the Merger Agreement and
may not be relied upon by any other party.
Very truly yours,
/s/ Willkie Farr & Gallagher
WILLKIE FARR & GALLAGHER
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our reports dated February
14, 1996 included in Simon Property Group, Inc.'s Form 10-K for the year
ended December 31, 1995, as amended on April 29, 1996, and to all
references to our Firm included in this registration statement.
/S/ ARTHUR ANDERSEN LLP
-----------------------
ARTHUR ANDERSEN LLP
Indianapolis, Indiana
August 7, 1996
SIMON DEBARTOLO GROUP, INC.
STOCK INCENTIVE PLAN
As Amended, Effective August 9, 1996
<PAGE>
SECTION 1.PURPOSE; DEFINITIONS.
The purpose of the Plan is to give the Company a significant
advantage in attracting, retaining and motivating officers, employees and
directors and to provide the Company and its Subsidiaries with the
ability to provide incentives more directly linked to the profitability
of the Company's businesses and increases in stockholder value.
For purposes of the Plan, the following terms are defined as
set forth below:
"AFFILIATE" means [DeBartolo Properties Management, Inc.], and
any other corporation or other entity in which the Company has a
substantial direct or indirect ownership interest and designated by the
Committee as such.
"AWARD" means a Stock Option or Deferred Stock.
"BOARD" means the Board of Directors of the Company.
"CAUSE" has the meaning set forth in Section 5(i).
"CHANGE IN CONTROL" and "CHANGE IN CONTROL PRICE" have the
meanings set forth in Sections 7(b) and (c), respectively.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor thereto.
"COMMISSION" means the Securities and Exchange Commission or
any successor agency.
"COMMITTEE" means the Committee referred to in Section 2.
"COMMON STOCK" means common stock, without par value, of the
Company.
"COMPANY" means Simon DeBartolo Group, Inc., a Maryland
corporation.
"DEFERRED STOCK" means an award granted under Section 6.
"DISABILITY" means permanent and total disability as determined
under procedures established by the Committee for purposes of the Plan.
"DISINTERESTED PERSON" shall mean a member of the Board who
qualifies as a disinterested person as defined in Rule 16b-3(c)(2), as
promulgated by the
<PAGE>
2
Commission under the Exchange Act, or any successor definition adopted by
the Commission.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.
"FAIR MARKET VALUE" means, as of any given date, the mean
between the highest and lowest reported sales prices of the Common Stock
on the New York Stock Exchange Composite Tape or, if not listed on such
exchange, on any other national securities exchange on which the Common
Stock is listed or on NASDAQ. If there is no regular public trading
market for such Common Stock, the Fair Market Value of the Common Stock
shall be determined by the Committee in good faith.
"INCENTIVE STOCK OPTION" means any Stock Option intended to be
and designated as an "incentive stock option" within the meaning of
Section 422 of the Code.
"NON-QUALIFIED STOCK OPTION" means any Stock Option that is not
an Incentive Stock Option.
"PLAN" means the Simon DeBartolo Group, Inc. Stock Incentive
Plan, formerly the DeBartolo Realty Corporation 1994 Stock Incentive
Plan, as set forth herein and as hereinafter amended from time to time.
"RETIREMENT" means retirement from active employment in
accordance with such policies as may be adopted by the Committee from
time to time.
"RULE 16B-3" means Rule 16b-3, as promulgated by the Commission
under Section 16(b) of the Exchange Act, as amended from time to time.
"SD PROPERTY GROUP" means SD Property Group, Inc., an [Ohio]
corporation.
"STOCK OPTION" or "OPTION" means an option granted under
Section 5.
"SUBSIDIARY" means a "subsidiary corporation" within the
meaning of Section 424(f) of the Code, including but not limited to SD
Property Group.
"TERMINATION OF EMPLOYMENT" means the termination of the
participant's employment with the Company or any Subsidiary or Affiliate.
A participant employed by a Subsidiary or an Affiliate shall also be
deemed to incur a Termination of Employment if the Subsidiary or
Affiliate ceases to be such a Subsidiary or Affiliate, as the case may
be, and the participant does not immediately thereafter become an
employee of the Company or another Subsidiary or Affiliate.
<PAGE>
3
In addition, certain other terms used herein have definitions
given to them in the first place in which they are used.
SECTION 2.ADMINISTRATION.
The Plan shall be administered by the Compensation Committee of
the Board or such other committee of the Board, composed of not less than
two Disinterested Persons, each of whom shall be appointed by and serve
at the pleasure of the Board (the "Committee"). If at any time no
Committee shall be in office, the functions of the Committee specified in
the Plan shall be exercised by the Board.
Subject to Section 13 hereof, the Committee shall have plenary
authority to grant Awards pursuant to the terms of the Plan to officers,
employees and directors of the Company and its Subsidiaries and
Affiliates.
Among other things, the Committee shall have the authority,
subject to the terms of the Plan:
(a) to select the officers, employees and directors to
whom Awards may from time to time be granted; provided that awards to
non-employee directors shall be made only in accordance with Section 12;
(b) to determine whether and to what extent Incentive
Stock Options, Non-Qualified Stock Options and Deferred Stock or any
combination thereof are to be granted hereunder;
(c) to determine the number of shares of Common Stock to
be covered by each Award granted hereunder;
(d) to determine the terms and conditions of any Award
granted hereunder (including, but not limited to, subject to Section
5(a), the option price, any vesting restriction or limitation and any
vesting acceleration or forfeiture waiver regarding any Award and the
shares of Common Stock relating thereto, based on such factors as the
Committee shall determine);
(e) to modify, amend or adjust the terms and conditions
of any Award, at any time or from time to time, including, but not
limited to, with respect to performance goals and measurements applicable
to performance-based Awards pursuant to the terms of the Plan;
(f) to determine to what extent and under what
circumstances Common Stock and other amounts payable with respect to an
Award shall be deferred; and
<PAGE>
4
(g) to determine under what circumstances a Stock Option
may be settled in cash or Common Stock under Section 5(j).
The Committee shall have the authority to adopt, alter and
repeal such administrative rules, guidelines and practices governing the
Plan as it shall, from time to time, deem advisable, to interpret the
terms and provisions of the Plan and any Award issued under the Plan (and
any agreement relating thereto) and to otherwise supervise the
administration of the Plan.
The Committee may act with respect to the Plan only by a
majority of its members then in office, except that the members thereof
may authorize any one or more of their number or any officer of the
Company to execute and deliver documents on behalf of the Committee.
Any determination made by the Committee or pursuant to
delegated authority pursuant to the provisions of the Plan with respect
to any Award shall be made in the sole discretion of the Committee or
such delegate at the time of the grant of the Award or, unless in
contravention of any express term of the Plan, at any time thereafter.
All decisions made by the Committee or any appropriately delegated
officer pursuant to the provisions of the Plan shall be final and binding
on all persons, including the Company and Plan participants.
SECTION 3.COMMON STOCK SUBJECT TO PLAN.
Subject to adjustment as provided herein, the total number of
shares of Common Stock available for distribution pursuant to Awards
under the Plan shall be 2,108,000 shares of Common Stock. Shares subject
to an Award under the Plan may be authorized and unissued shares or may
be treasury shares.
In the event of any merger, reorganization, consolidation,
recapitalization, stock dividend, stock split, extraordinary distribution
with respect to the Common Stock or other change in corporate structure
affecting the Common Stock, the Committee or Board may make such
substitution or adjustments in the aggregate number and kind of shares
reserved for issuance under the Plan, in the number, kind and option
price of shares subject to outstanding Stock Options, in the number and
kind of shares subject to other outstanding Awards granted under the Plan
and/or such other substitution or adjustments in the consideration
receivable upon exercise as it may determine to be appropriate in its
sole discretion; provided, however, that the number of shares subject to
any Award shall always be a whole number.
<PAGE>
5
SECTION 4.ELIGIBILITY.
Officers, employees and directors of the Company, its
Subsidiaries and Affiliates who are responsible for or contribute to the
management, growth and profitability of the business of the Company, its
Subsidiaries and Affiliates are eligible to be granted Awards under the
Plan. Except as expressly authorized by Section 12 of the Plan, however,
no grant shall be made to a director who is not an officer or a salaried
employee of the Company of one of its Subsidiaries or Affiliates.
SECTION 5.STOCK OPTIONS.
Stock Options may be granted alone or in addition to other
Awards granted under the Plan and may be of two types: Incentive Stock
Options and Non-Qualified Stock Options. Any Stock Option granted under
the Plan shall be in such form as the committee may from time to time
approve.
The Committee shall have the authority to grant to any eligible
person Incentive Stock Options, Non-Qualified Stock Options or both types
of Stock Options. Incentive Stock Options may be granted only to
employees of the Company and its Subsidiaries. To the extent that any
Stock Option is not designated as an Incentive Stock Option or even if so
designated does not qualify as an Incentive Stock Option, it shall
constitute a Non-Qualified Stock Option.
Stock Options shall be evidenced by option agreements, the
terms and provisions of which may differ. An option agreement shall
indicate on its face whether it is intended to be an agreement for an
Incentive Stock Option or a Non-Qualified Stock Option. The grant of a
Stock Option shall occur on the date the Committee by resolution selects
an individual to be a participant in any grant of a Stock Option,
determines the number of shares of Stock to be subject to such Stock
Option to be granted to such individual and specifies the terms and
provisions of the Stock Option. The Company shall notify a participant
of any grant of a Stock Option, and a written option agreement or
agreements shall be duly executed and delivered by the Company to the
participant. Such agreement or agreements shall become effective upon
execution by the participant.
Anything in the Plan to the contrary notwithstanding, no term
of the Plan relating to Incentive Stock Options shall be interpreted,
amended or altered nor shall any discretion or authority granted under
the Plan be exercised so as to disqualify the Plan under Section 422 of
the Code or, without the consent of the optionee affected, to disqualify
any Incentive Stock Option under such Section 422.
During the life of the Plan, in no event shall any one
participant be granted stock options for more than 136,000 shares of
Common Stock.
<PAGE>
6
Stock Options granted under the Plan shall be subject to the
following terms and conditions and shall contain such additional terms
and conditions as the Committee shall deem desirable:
(a) OPTION PRICE. The option price per share of Common
Stock purchasable under a Stock Option (i) shall be determined by the
Committee and set forth in the option agreement, (ii) shall not be less
than the Fair Market Value of the Common Stock subject to the Stock
Option on the date of grant and (iii) in the case of an Incentive Stock
Option granted to an optionee who owns stock representing more than 10%
of the voting power of all classes of stock of the Company or any
subsidiary of the Company, shall not be less than 110% of the Fair Market
Value of the Common Stock subject to the Incentive Stock Option on the
date of grant.
(b) OPTION TERM. The term of each Stock Option shall be
fixed by the Committee, but (i) no Stock Option shall be exercisable more
than 10 years after the date the Stock Option is granted and (ii) no
Incentive Stock Option granted to an optionee who owns stock representing
more than 10% of the voting power of all classes of stock of the Company
or any Subsidiary shall be exercisable more than five years after the
date of the Stock Option is granted.
(c) EXERCISABILITY. Except as otherwise provided
herein, Stock Options shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the
Committee. If the Committee provides that any Stock Option is
exercisable only in installments, the Committee may at any time waive
such installment exercise provisions, in whole or in part, based on such
factors as the Committee may determine. In addition, the Committee may
at any time, in whole or in part, accelerate the exercisability of any
Stock Option. Notwithstanding any other provision hereof, the aggregate
Fair Market Value, determined on the date of award, of Common Stock with
respect to which Incentive Stock Options are exercisable by an optionee
for the first time during any calendar year under all stock option plans
of the Company and any Subsidiary of the Company shall not exceed
$100,000.
(d) METHOD OF EXERCISE. Subject to the provisions of
this Section 5, Stock Options may be exercised, in whole or in part, at
any time during the option term by giving written notice of exercise to
the Company specifying the number of shares of Common Stock subject to
the Stock Option to be purchased.
The option price of Common Stock to be purchased upon
exercise of any Option shall be paid in full in cash (by certified or
bank check or such other instrument as the company may accept) or, if and
to the extent set forth in the option agreement, may also be paid by one
or more of the following: (i) in the form of unrestricted Common Stock
already owned by the optionee based in any such instance on the Fair
Market Value of the Common Stock on the date the Stock Option is
exercised; provided, however, that, in the case of an Incentive Stock
Option, the
<PAGE>
7
right to make a payment in the form of already owned shares
of Common Stock may be authorized only at the time the Stock Option is
granted; (ii) by requesting the Company to withhold from the number of
shares of Common Stock otherwise issuable upon exercise of the Stock
Option that number of shares having an aggregate Fair Market Value on the
date of exercise equal to the exercise price for all of the shares of
Common Stock subject to such exercise; or (iii) by a combination thereof,
in each case in the manner provided in the option agreement. In
addition, the option price may be paid in shares of Common Stock which
were received by the optionee upon exercise of one more Incentive Stock
Options, but only if such Common Stock has been held by the participant
for at least the greater of (i) two years from the date the Incentive
Stock Options were granted or (ii) one year after the transfer of shares
of Common Stock to the optionee.
In the discretion of the Committee, payment for any shares
subject to a Stock Option may also be made by delivering a properly
executed exercise notice to the Company, together with a copy of
irrevocable instructions to a broker to deliver promptly to the Company
the amount of sale or loan proceeds to pay the purchase price. To
facilitate the foregoing, the Company may enter into agreements for
coordinated procedures with one or more brokerage firms.
(e) NON-TRANSFERABILITY OF STOCK OPTIONS. No Stock
Option shall be transferable by the optionee other than (i) by will or by
the laws of descent and distribution or (ii) pursuant to a qualified
domestic relations order (as defined in the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder). All Stock Options shall be exercisable, during the
optionee's lifetime, only by the optionee or by the guardian or legal
representative of the optionee or by an alternate payee pursuant to such
qualified domestic relations order, it being understood that the terms
"holder" and "optionee" include the guardian and legal representative of
the optionee named in the option agreement and any person to whom an
option is transferred by will or the laws of descent and distribution or
pursuant to a qualified domestic relations order.
(f) TERMINATION BY DEATH. If an optionee's employment
terminates by reason of death, any Stock Option held by such optionee may
thereafter be exercised, to the extent then exercisable, or on such
accelerated basis as the Committee may determine, for a period of one
year (or such other period as the Committee may specify in the option
agreement) from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter. In
the event of termination of employment due to death, if an Incentive
Stock Option is exercised after the expiration of the exercise periods
that apply for purposes of Section 422 of the Code, such Stock Option
will thereafter be treated as a Non-Qualified Stock Option.
(g) TERMINATION BY REASON OF DISABILITY. If an
optionee's employment terminates by reason of Disability, any Stock
Option held by such
<PAGE>
8
optionee may thereafter be exercised by the optionee,
to the extent it was exercisable at the time of termination, or on such
accelerated basis as the Committee may determine, for a period of three
years (or such shorter period as the Committee may specify in the option
agreement) from the date of such termination of employment or until the
expiration of the stated term of such Stock Option, whichever period is
the shorter; provided, however, that if the optionee dies within such
three-year period (or such shorter period), any unexercised Stock Option
held by such optionee shall, notwithstanding the expiration of such
three-year (or such shorter) period, continue to be exercisable to the
extent to which it was exercisable at the time of death for a period of
one year from the date of such death or until the expiration of the
stated term of such Stock Option, whichever period is the shorter. In
the event of termination of employment by reason of Disability, if an
Incentive Stock Option is exercised after the expiration of the exercise
periods that apply for purposes of Section 422 of the Code, such Stock
Option will thereafter be treated as a Non-Qualified Stock Option.
(h) TERMINATION BY REASON OF RETIREMENT. If an
optionee's employment terminates by reason of Retirement, any Non-
Qualified Stock Option held by such optionee may thereafter be exercised
by the optionee, to the extent it was exercisable at the time of such
Retirement or on such accelerated basis as the Committee may determine,
for a period of three years (or such shorter period as the Committee may
specify in the option agreement) from the date of such termination of
employment or until the expiration of the stated term of such Non-
Qualified Stock Option, whichever period is the shorter; provided,
however, that if the optionee dies within such three-year (or such
shorter) period, any unexercised Non-Qualified Stock Option held by such
optionee shall, notwithstanding the expiration of such three-year (or
such shorter) period, continue to be exercisable to the extent to which
it was exercisable at the time of death for a period of one year from the
date of such death or until the expiration of the stated term of such
Non-Qualified Stock Option, whichever period is the shorter. In the
event of termination of employment by reason of Retirement, an Incentive
Stock Option may be exercised by the optionee to the extent it was
exercisable at the time of such Retirement or on such accelerated basis
as the Committee may determine, only within a period of three months
thereafter or prior to the expiration of the stated term of such
Incentive Stock Option, whichever period is the shorter; provided
however, that if the optionee dies within such three-month period, any
unexercised Incentive Stock Option held by such optionee shall,
notwithstanding the expiration of such three-month period, continue to be
exercisable to the extent to which it was exercisable at the time of
death for a period of one year from the date of such death or until the
expiration of the stated term of such Incentive Stock Option, whichever
period is the shorter.
(i) OTHER TERMINATION. Unless otherwise determined by
the Committee, if there occurs a Termination of Employment for any reason
other than death, Disability, Retirement or Cause, any Stock Options held
by such Optionee shall thereupon terminate, except that such Stock
Option, to the extent then exercisable, or
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9
on such accelerated basis as
the Committee may determine, may, if such Termination of Employment is
without Cause, be exercised for the lesser of (A) in the case of a Non-
Qualified Stock Option, one year from the date of such Termination of
Employment or the balance of such Stock Option's term and (B) in the case
of an Incentive Stock Option, three months from the date of such
Termination of Employment or the balance of such Stock Option's term;
provided, however, that if the optionee dies within such one-year or
three-month period, any unexercised Stock Option held by such optionee
shall notwithstanding the expiration of such one-year or three-month
period, continue to be exercisable to the extent to which it was
exercisable at the time of death for a period of one year from the date
of such death or until the expiration of the stated term of such Stock
Option, whichever period is the shorter.
(j) TERMINATION FOR CAUSE. In the event of Termination
of Employment for Cause, any unexercised Stock Option held by such
optionee shall expire immediately upon the giving to the optionee of
notice of such Termination of Employment. Unless otherwise determined by
the Committee, for the purposes of the Plan, "Cause" shall mean (i) the
conviction of the optionee for committing a felony under Federal law or
the law of the state in which such action occurred, (ii) dishonesty in
the course of fulfilling the optionee's employment duties or
(iii) willful and deliberate failure on the part of the optionee to
perform his employment duties in any material respect.
(k) CASHING OUT OF STOCK OPTION. On receipt of written
notice of exercise, the committee may elect to cash out all or any part
of the shares of Common Stock for which a Stock Option is being exercised
by paying the optionee an amount, in cash or Common Stock, equal to the
excess of the Fair Market Value of the Common Stock over the option price
times the number of shares of Common Stock for which the Stock Option is
being exercised on the effective date of such cash out.
Cash outs pursuant to this Section 5(k) relating to
options held by optionees who are actually or potentially subject to
Section 16(b) of the Exchange Act shall comply with the "window period"
provisions of Rule 16b-3(e), to the extent applicable.
(l) CHANGE IN CONTROL CASH OUT. Notwithstanding any
other provision of the Plan, during the 60-day period from and after a
Change in Control (the "Exercise Period"), unless the Committee shall
determine otherwise at the time of grant, an optionee shall have the
right, whether or not the Stock Option is fully exercisable and in lieu
of the payment of the exercise price for the shares of Common Stock being
purchased under the Stock Option and by giving notice to the Company, to
elect (within the Exercise Period) to surrender all or part of the Stock
Option to the Company and to receive cash, within 30 days of such notice,
in an amount equal to the amount by which the Change in Control Price per
share of
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10
Common Stock on the date of such election shall exceed the
exercise price per share of Common Stock under the Stock Option (the
"Spread") multiplied by the number of shares of Common Stock granted
under the Stock Option as to which the right granted under this
Section 4(l) shall have been exercised; provided, however, that if the
Change in Control is within six months of the date of grant of a
particular Stock Option held by an optionee who is an officer or director
of the Company and is subject to Section 16(b) of the Exchange Act no
such election shall be made by such optionee with respect to such Stock
Option prior to six months from the date of grant. Notwithstanding any
other provision hereof, if the end of such 60-day period from and after a
Change in Control is within six months of the date of grant of a Stock
Option held by an optionee who is an officer or director of the Company
and is subject to Section 16(b) of the Exchange Act, such Stock Option
shall be canceled in exchange for a cash payment to the optionee,
effected on the day which is six months and one day after the date of
grant of such Option, equal to the Spread multiplied by the number of
shares of Common Stock granted under the Stock Option.
SECTION 6.DEFERRED STOCK.
(a) ADMINISTRATION. Deferred Stock may be awarded
either alone, in addition to, or in tandem with other Awards granted
under the Plan. The Committee shall determine the eligible persons to
whom and the time or times at which Deferred Stock shall be awarded, the
number of shares of Deferred Stock to be awarded, the number of shares of
Deferred Stock to be awarded to any person, the duration of the period
(the "Deferral Period") during which, and the conditons under which
receipt of the Common Stock will be deferred, and the other terms and
conditions of the Award in addition to those set forth in Section 6(b).
The Committee may condition the grant of Deferred Stock
upon the attainment of specified performance goals or such other factors
or criteria as the Committee shall determine, in its sole discretion.
The provisions of Deferred Stock awards need not be the
same with respect to each recipient.
(b) TERMS AND CONDITIONS. The shares of Deferred Stock
awarded pursuant to this Section 6 may, in the sole discretion of the
Committee, be subject to any of the following terms and conditions:
(i) Except as otherwise provided in this Plan and
the Award agreement referred to in Section 6(b)(v) below, Deferred
Stock Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered during the Deferral Period. At the expiration
of the Deferral Period, certificates for shares of Common Stock
shall be delivered to the participant, or his or her legal
representative, in a number equal to the shares covered by the
Deferred Stock Award.
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11
(ii) Unless otherwise determined by the Committee
at grant, amounts equal to any dividends declared during the
Deferral Period with respect to the number of shares covered by a
Deferred Stock Award will be paid to the participant currently, or
deferred and deemed to be reinvested in additional Deferred Stock,
or otherwise reinvested, all as determined at or after the time of
the Award by the Committee.
(iii) Subject to the provisions of the Award
agreement and this Section 6, upon termination of a participant's
employment with the Company and any Subsidiary or Affiliate for any
reason during the Deferral Period for a given Award, the Deferred
Stock in question will vest, or be forfeited, in accordance with the
terms and conditions established by the Committee at grant.
(iv) The Committee may, at or after grant,
accelerate the vesting of all or any part of any Deferred Stock
Award or waive the deferral limitations for all or any part of such
Award.
(v) Each Deferred Stock Award shall be confirmed
by, and subject to the terms of, a Deferred Stock agreement executed
by the Company and the participant.
SECTION 7.CHANGE IN CONTROL PROVISIONS.
(a) IMPACT OF EVENT. Notwithstanding any other
provision of the Plan to the contrary, in the event of a Change in
Control:
(i) Any Stock Options outstanding as of the date
such Change in Control is determined to have occurred and not then
exercisable and vested shall become fully exercisable and vested to
the full extent of the original grant.
(ii) Any Deferred Stock Awards outstanding shall
vest and certificates for shares of Common Stock shall be issued to
participants in a number equal to the shares covered by each such
participant's Deferred Stock Award.
(b) DEFINITION OF CHANGE IN CONTROL. For purposes of
the Plan, a "Change in Control" shall mean the happening of any of the
following events:
(i) An acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either (1) the then outstanding shares of Common Stock (the
"Outstanding Common Stock") or
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12
(2) the combined voting power of the
then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Voting
Securities"); excluding, however, the following: (1) any
acquisition directly from the Company, other than an acquisition by
virtue of the exercise of a conversion privilege unless the security
being so converted was itself acquired directly from the Company,
(2) any acquisition by the Company, or members of the Company's
management, or any combination thereof, (3) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company or (4) any
acquisition by any Person pursuant to a transaction which complies
with clauses (1), (2) and (3) of subsection (iii) of this
Section 7(b); or
(ii) A change in the composition of the Board such
that the individuals who, as of the effective date of the Plan,
constitute the Board (such Board shall be hereinafter referred to as
the "Incumbent Board") cease for any reason to constitute at least a
majority of the board; provided, however, for the purposes of this
Section 7(b), that any individual who becomes a member of the Board
subsequent to such effective date, whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at
least a majority of those individuals who are members of the Board
and who were also members of the Incumbent Board (or deemed to be
such pursuant to this proviso) shall be considered as though such
individual were a member of the Incumbent Board; but, provided
further, that any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board shall not be so considered as a member of the
Incumbent Board; or
(iii) The approval by the shareholder of the Company
of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company
("Corporate Transaction"); excluding, however, such a Corporate
Transaction pursuant to which (1) all or substantially all of the
individuals and entities who are the beneficial owners,
respectively, of the Outstanding Common Stock and Outstanding Voting
Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of,
respectively, the outstanding shares of common stock, and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Corporate Transaction
(including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more
Subsidiaries) in substantially the same proportions as their
ownership, immediately prior to
<PAGE>
13
such Corporate Transaction, of the
Outstanding Common Stock and Outstanding Voting Securities, as the
case may be, (2) no Person (other than the Company, any employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or such
corporation resulting from such Corporate Transaction) will
beneficially own, directly or indirectly, 20% or more of,
respectively, the outstanding shares of common stock of the
corporation resulting from such Corporate Transaction or the
combined voting power of the outstanding voting securities of such
corporation entitled to vote generally in the election of directors
except to the extent that such ownership existed with respect to the
Company prior to the Corporate Transaction and (3) individuals who
were members of the Incumbent Board will constitute at least a
majority of the members of the board of directors of the corporation
resulting from such Corporate Transaction; or
(iv) The approval by the shareholders of the
Company of a complete liquidation or dissolution of the Company.
(c) CHANGE IN CONTROL PRICE. For purposes of the Plan,
"Change in Control Price" means the higher of (i) the highest reported
sales price, regular way, of a share of Common Stock in any transaction
reported on the New York Stock Exchange Composite Tape or any other
national securities exchange on which such shares are listed or on
NASDAQ, as applicable, during the 60-day period prior to and including
the date of a Change in Control and (ii) if the Change in Control is the
result of a tender or exchange offer or a Corporate Transaction, the
highest price per share of Common Stock paid in such tender or exchange
offer or Corporate Transaction; provided, however, that (x) in the case
of a Stock Option which (A) is held by an optionee who is an officer or
director of the Company and is subject to Section 16(b) of the Exchange
Act and (B) was granted within 240 days of the Change in Control, then
the Change in Control Price for such Stock Option shall be the Fair
Market Value of the common Stock on the date such Stock Option is
exercised or canceled and (y) in the case of Incentive Stock Options, the
Change in Control Price shall be in all cases the Fair Market Value of
the Common Stock on the date such Incentive Stock Option is exercised.
To the extent that the consideration paid in any such transaction
described above consist all or in part of securities or other non-cash
consideration, the value of such securities or other non-cash
consideration shall be determined in the sole discretion of the Board.
SECTION 8.TERM, AMENDMENT AND TERMINATION.
The Plan will terminate on the tenth anniversary of its
adoption by the Board. Under the Plan, awards outstanding as of the date
of such termination shall not be affected or impaired by the termination
of the Plan.
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14
The Board may amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuation shall be made which would
(i) impair the rights of an optionee under a Stock Option or a recipient
of a Deferred Stock Award theretofore granted without the optionee's or
recipient's consent, except such an amendment made to cause the Plan to
qualify for the exemption provided by Rule 16b-3, or (ii) disqualify the
Plan from the exemption provided by Rule 16b-3. In addition, no such
amendment shall be made without the approval of the Company's
stockholders to the extent such approval is required by law or agreement.
The Committee may amend the terms of any Stock Option or other
Award theretofore granted, prospectively or retroactively, but no such
amendment shall impair the rights of any holder without the holder's
consent except such an amendment made to cause the Plan or Award to
qualify for the exemption provided by Rule 16b-3.
Subject to the above provisions, the Board shall have authority
to amend the Plan to take into account changes in law and tax and
accounting rules, as well as other developments and to grant Awards which
qualify for beneficial treatment under such rules without stockholder
approval.
SECTION 9.UNFUNDED STATUS OF PLAN.
It is presently intended that the Plan constitute an "unfunded"
plan for incentive and deferred compensation. The Committee may
authorize the creation of trusts or other arrangements to meet the
obligations created under the Plan to deliver Common Stock or make
payments; provided, however, that, unless the Committee otherwise
determines, the existence of such trusts or other arrangements is
consistent with the "unfunded" status of the Plan.
SECTION 10.GENERAL PROVISIONS.
(a) The Committee may require each person purchasing or
receiving shares pursuant to an Award to represent to and agree with the
Company in writing that such person is acquiring the shares without a
view to the distribution thereof. The certificates for such shares may
include any legend which the Committee deems appropriate to reflect any
restrictions on transfer.
All certificates for shares of Common Stock or other
securities delivered under the Plan shall be subject to such stock
transfer orders and other restrictions as the Committee may deem
advisable under the rules, regulations and other requirements of the
Commission, any stock exchange upon which the Common Stock is then listed
and any applicable Federal or state securities law, and the Committee may
cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.
<PAGE>
15
Anything in this Plan to the contrary notwithstanding, the
Company shall not be obligated to issue or sell any shares of Common
Stock until they have been listed on each securities exchange on which
the Common Stock may then be listed and until and unless, in the opinion
of counsel to the Company, the Company may issue such shares pursuant to
a qualification or an effective registration statement, or an exemption
from registration, under such state and federal laws, rules or
regulations as such counsel may deem applicable. The Company shall use
reasonable efforts to effect such listing, qualification and
registration, as the case may be.
(b) Nothing contained in the Plan shall prevent the
Company or any Subsidiary or Affiliate from adopting other or additional
compensation arrangements for its employees.
(c) The adoption of the Plan shall not confer upon any
employee any right to continued employment nor shall it interfere in any
way with the right of the Company or any Subsidiary or Affiliate to
terminate the employment of any employee at any time.
(d) No later than the date as of which an amount first
becomes includible in the gross income of the participant for Federal
income tax purposes with respect to any Award under the Plan, the
participant shall pay to the Company, or make arrangements satisfactory
to the Company regarding the payment of, any Federal, state, local or
foreign taxes of any kind required by law to be withheld with respect to
such amount. If so determined by the Committee, withholding obligations
may be settled with Common Stock, including Common Stock that is part of
the Award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional on such
payment or arrangements, and the Company, its Subsidiaries and its
Affiliates shall, to the extent permitted by law, have the right to
deduct any such taxes from any payment otherwise due to the participant.
The Committee may establish such procedures as it deems appropriate,
including the making of irrevocable elections, for the settlement of
withholding obligations with Common Stock.
(e) At the time of grant, the Committee may provide in
connection with any grant made under the Plan that the shares of Common
Stock received as a result of such grant shall be subject to a right of
first refusal pursuant to which the participant shall be required to
offer to the Company any shares that the participant wishes to sell at
the then Fair Market Value of the Common Stock, subject to such other
terms and conditons as the Committee may specify at the time of grant.
(f) The Committee shall establish such procedures as it
deems appropriate for a participant to designate a beneficiary to whom
any amounts payable in the event of the participant's death are to be
paid.
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16
(g) The Plan and all Awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws
of the State of [Maryland].
SECTION 11.EFFECTIVE DATE OF PLAN.
The Plan shall be effective on the later of (a) the date it is
approved by the shareholders of the Company and (b) the date, if any,
specified by the Board at the time it is approved by the Board.
SECTION 12.DIRECTOR STOCK OPTIONS.
(a) Each director of the Company who is not otherwise an
employee of the Company or any Subsidiary or Affiliate from and after the
effective date of the Plan shall, on each December 31 during such
director's term commencing with December 31, 1994, automatically be
granted Non-Qualified Stock Options to purchase 400 shares of Common
Stock having an exercise price per share equal to 100% of the Fair Market
Value of the Common Stock at the date of grant of such Non-Qualified
Stock Option. Each such director, upon joining the Board, shall also be
awarded Non-Qualified Stock Options to purchase 1,000 shares of Common
Stock having an exercise price equal to 100% of the Fair Market Value of
the Common Stock on the date of grant, PROVIDED, HOWEVER, that no
additional options will be granted on or after August 9, 1996.
(b) An automatic director Stock Option shall be granted
hereunder only if as of each date of grant (or, in the case of any
initial grant, from and after the effective date of the Plan) the
director (i) is not otherwise an employee of the Company or any
Subsidiary or Affiliate, (ii) has not been an employee of the Company or
any Subsidiary or Affiliate for any part of the preceding fiscal year and
(iii) has served on the Board continuously since the commencement of his
term.
(c) Each holder of a Stock Option granted pursuant to
this Section 12 shall also have the rights specified in Section 5(k).
(d) In the event that the number of shares of Common
Stock available for future grant under the Plan is insufficient to make
all automatic grants required to be made on such date, then all non-
employee directors entitled to a grant on such date shall share ratably
in the number of options on shares available for grant under the Plan.
(e) The provisions of paragraph (a) of this Section 12
may not be amended more often than once every six months other than to
comport with changes in the Code, the Employee Retirement Income Security
Act of 1974, and the regulations thereunder. Except as expressly
provided in this Section 12, any Stock
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17
Option granted hereunder shall be
subject to the terms and conditons of the Plan as if the grant were made
pursuant to Section 5 hereof.
SECTION 13.AWARD LIMITATION.
Any provision of this Plan to the contrary notwithstanding, in
no event shall any Award of Deferred Stock be made, and in no event shall
any Option be granted or exercised, if the grant or exercise of such
Award or Option would result in a violation of the Common Stock ownership
limits necessary for qualification of the Company as a "real estate
investment trust" for federal income tax purposes. For purposes of the
Plan, in determining whether such limits would be violated, participants
shall be deemed to own beneficially any shares of Common Stock subject to
unexercised Options, whether or not vested. Any such Award or grant or
exercise of Options, if made, shall be null and void and shall have no
legal effect. In addition, the Plan and any grants of Deferred Stock or
Options hereunder shall in all events be subject to the "Ownership Limit"
set forth in Company's Amended and Restated Articles of Incorporation.
