<PAGE>
As filed with the Securities and Exchange Commission on August 13, 1997
Registration No. ________________
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
---------------------
CENTERPOINT PROPERTIES TRUST
(Exact name of registrant as specified in its charter)
MARYLAND 36-3910279*
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
401 NORTH MICHIGAN AVENUE
30TH FLOOR
CHICAGO, ILLINOIS 60611
(312) 346-5600
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
JOHN S. GATES, JR.
PRESIDENT
CENTERPOINT PROPERTIES TRUST
401 NORTH MICHIGAN AVENUE, 30TH FLOOR
CHICAGO, ILLINOIS 60611
(312) 346-5600
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
----------------------
COPIES OF ALL COMMUNICATIONS, INCLUDING COPIES OF COMMUNICATIONS
SENT TO AGENT FOR SERVICE, SHOULD ALSO BE SENT TO:
RICHARD A. UNGARETTI, ESQ.
JAMES T. EASTERLING, ESQ.
Ungaretti & Harris
Three First National Plaza, Suite 3500
Chicago, Illinois 60602
(312) 977-4400
----------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: UPON
CONSUMMATION OF THE MERGER DESCRIBED IN THIS REGISTRATION STATEMENT.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. / /
----------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES AMOUNT TO BE AGGREGATE OFFERING AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED (1) PRICE PER UNIT (2) OFFERING PRICE (2) FEE
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Shares of
Beneficial Interest, 16,751,556 $33.00 $552,801,348 $167,515.56
$.001 par value
per share ...........
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
</TABLE>
(1) Based upon 16,751,556 shares of Common Stock, par value $.001 per share
(the "Company Common Stock"), of CenterPoint Properties Corporation
outstanding at the close of business on August 11, 1997.
(2) Based upon the average of the high and low sales prices for shares of
Company Common Stock as reported on the New York Stock Exchange on
August 11, 1997 and estimated solely for the purpose of calculating
the registration fee pursuant to Rule 457 of the Securities Act of 1933, as
amended.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
*I.R.S. Employer Indemnication Number of CenterPoint Properties Corporation,
the predecessor to the Registrant prior to the reorganization desceribed
herein.
<PAGE>
CROSS REFERENCE SHEET
PURSUANT TO ITEM 501(b) OF REGULATION S-K
UNDER THE SECURITIES ACT OF 1933
ITEM IN PART I OF FORM S-4 CAPTION IN PROXY STATEMENT/PROSPECTUS
- -------------------------- -------------------------------------
1. Forepart of Registration
Statement and Outside
Front Cover Page of
Proxy Statement/Prospectus..... Facing Page of Registration
Statement; Outside Front
Cover Page of Statement/Prospectus
2. Inside Front and Outside
Back Cover Pages of Proxy
Statement/Prospectus........... Available Information;
Incorporation of Certain Documents
by Reference; Table of Contents
3. Risk Factors, Ratio of
Earnings to Fixed Charges and
Other Information(1)............. Summary; The Plan of Reorganization
4. Terms of the Transaction......... Summary; The Plan of Reorganization;
Description of Shares of Beneficial
Interest in the Trust
5. Pro Forma Financial Information.. Not Applicable
6. Material Contacts with the
Company Being Acquired........... Summary; The Plan of Reorganization
7. Additional Information Required
for Reoffering by Persons and
Parties Deemed to be
Underwriters..................... Not Applicable
8. Interests of Named Experts
and Counsel...................... Not Applicable
9. Disclosure of Commission
Position on Indemnification for
Securities Act Liabilities....... The Plan of Reorganization
10. Information with Respect
to S-3 Registrants............... Not Applicable
11. Incorporation of Certain
Information by Reference........ Not Applicable
12. Information with Respect to
S-2 or S-3 Registrants........... Not Applicable
13. Incorporation of Certain
Information by Reference........ Not Applicable
14. Information with Respect to
Registrants Other Than S-3 or
S-2 Registrants.................. Not Applicable
15. Information with respect to
Documents S-3 Companies.......... Incorporation of Certain by Reference
16. Information with respect to
S-2 or S-3 Companies............. Not Applicable
17. Information with respect to
Companies Other Than S-2 or S-3
Companies....................... Not Applicable
18. Information if Proxies,
Consents or Authorizations are
to be Solicited.................. Incorporation of Certain Documents
by Reference; Summary; Voting and
Proxies; The Plan of Reorganization;
Stockholder Proposals
19. Information if Proxies, Consents
or Authorizations are not to be
Solicited, or in an Exchange
Offer............................ Not Applicable
- ------------------------
(1) Parts (d)-(g) of Item 3 are not applicable.
<PAGE>
CENTERPOINT PROPERTIES CORPORATION
401 NORTH MICHIGAN AVENUE
30TH FLOOR
CHICAGO, ILLINOIS 60611
(312) 346-5600
, 1997
---------------
Dear Stockholder:
You are cordially invited to attend a Special Meeting of Stockholders
(the "Special Meeting") of CenterPoint Properties Corporation (the "Company")
which will be held at the Lower Level Conference Center, 401 North Michigan
Avenue, Chicago, Illinois on October 1, 1997 at 11:00 a.m., Central Daylight
Time.
At the Special Meeting, you will be asked to consider and vote upon (i)
a proposed Plan of Reorganization, dated _________, 1997 (the "Plan of
Reorganization"), by and between the Company and CenterPoint Properties Trust
(the "Trust") which provides for the reorganization of the Company from a
Maryland corporation into a Maryland real estate investment trust; and (ii)
such other matters as may properly come before the meeting or any
adjournment(s) or postponement(s) thereof. A complete description of the
Plan of Reorganization is set forth in the attached Proxy
Statement/Prospectus.
The Plan of Reorganization provides for the merger (the "Merger") of the
Company with and into the Trust, a Maryland real estate investment trust.
Pursuant to the Merger, the Trust will be the surviving entity, the separate
existence of the Company will terminate, each issued and outstanding share of
common stock of the Company (the "Company Common Stock") will be converted
into one common share of beneficial interest in the Trust (the "Trust
Shares"); each outstanding share of Class B Common Stock of the Company will
be converted into one Class B Common Share of beneficial interest in the
Trust; and the outstanding principal amount of the Company's 8.22%
Convertible Subordinated Debentures due 2004 (the "Company Debentures") will
be assumed by the Trust and converted into the same principal amount of 8.22%
Convertible Subordinated Debentures due 2004 of the Trust (the "Trust
Debentures").
The principal reason for the Plan of Reorganization is to eliminate the
obligation to pay substantial franchise taxes each year in the State of
Illinois, where most of the Company's properties are located. The State of
Illinois does not recognize a trust as an entity for purposes of imposing
franchise taxes, and, as a result, the Trust will not be liable for the
payment of Illinois franchise taxes.
The consummation of the Merger will be subject to a number of conditions
including, among others, the listing of the Trust Shares and the Trust
Debentures for trading on the New York Stock Exchange, Inc. (the "NYSE"). It
is expected that, upon approval of the Plan of Reorganization and the
consummation of the Merger, the Trust Shares and the Trust Debentures will
trade on the NYSE in the same manner as shares of Company Common Stock and
the Company Debentures, respectively, currently trade on the NYSE. Detailed
information concerning the Plan of Reorganization and the Merger is set forth
in the accompanying Proxy Statement/Prospectus.
<PAGE>
Your Board of Directors and management believe that the Plan of
Reorganization is in the best interests of the Company and its stockholders
because the consummation of the Merger will result in substantial economic
savings for the Company. THE BOARD OF DIRECTORS OF THE COMPANY UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" APPROVAL OF THE PLAN OF REORGANIZATION AT THE
SPECIAL MEETING.
The accompanying Proxy Statement/Prospectus is a proxy statement for the
Special Meeting of the Company's stockholders and a prospectus for the
issuance by the Trust of the Trust Shares to holders of Company Common Stock
upon consummation of the Merger. I urge you to give the information
contained in it your thoughtful consideration.
Please read the enclosed Proxy Statement/Prospectus, then complete, sign
and return the enclosed proxy card in the enclosed envelope.
Very truly yours,
John S. Gates, Jr.
President and Chief Executive
Officer
-2-
<PAGE>
CENTERPOINT PROPERTIES CORPORATION
401 NORTH MICHIGAN AVENUE
30TH FLOOR
CHICAGO, ILLINOIS 60611
----------------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD OCTOBER 1, 1997
NOTICE IS HEREBY GIVEN that the Special Meeting of Stockholders (the
"Special Meeting") of CenterPoint Properties Corporation (the "Company") will
be held at the Lower Level Conference Center, 401 North Michigan Avenue,
Chicago, Illinois on October 1, 1997 at 11:00 a.m., Central Daylight Time,
for the following purposes:
1. To consider and vote upon a proposal to approve the Plan of
Reorganization, dated _________, 1997 (the "Plan of
Reorganization"), by and between the Company and
CenterPoint Properties Trust (the "Trust") which
provides for the reorganization of the Company from a
Maryland corporation to a Maryland real estate investment
trust by means of the merger (the "Merger") of the
Company with and into the Trust, a Maryland real estate
investment trust newly formed by the Company. Pursuant
to the Merger, the Trust will be the surviving entity,
the separate existence of the Company will terminate and
each issued and outstanding share of common stock of the
Company will be converted into one common share of
beneficial interest in the Trust.
2. To transact such other business as may properly come before
the Special Meeting or any adjournment(s) or
postponement(s) thereof.
The Board of Directors has fixed August 27, 1997 as the record date for
the determination of the Company's stockholders entitled to vote at the
Special Meeting (the "Record Date"). Only those stockholders whose names
appear on record on the books of the Company at the close of business on the
Record Date are entitled to notice of, and to vote at, the Special Meeting
and any adjournment(s) or postponement(s) thereof.
APPROVAL OF THE PLAN OF REORGANIZATION REQUIRES THE AFFIRMATIVE VOTE OF
THE HOLDERS OF AT LEAST TWO-THIRDS OF THE SHARES OF THE COMPANY'S COMMON
STOCK OUTSTANDING ON THE RECORD DATE.
ALL STOCKHOLDERS OF THE COMPANY ARE CORDIALLY INVITED TO ATTEND THE
SPECIAL MEETING. WHETHER OR NOT YOU EXPECT TO ATTEND THE SPECIAL MEETING,
PLEASE DATE, COMPLETE AND SIGN THE ENCLOSED PROXY CARD AND RETURN IT AS
PROMPTLY AS POSSIBLE IN THE ENCLOSED POSTAGE PREPAID ENVELOPE. YOU MAY
REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED BY SUBMITTING ANOTHER PROXY
COVERING THE SAME SHARES BEARING A LATER DATE, FILING WITH THE SECRETARY OF
THE COMPANY A WRITTEN REVOCATION BEARING A LATER DATE OR BY VOTING IN PERSON
AT THE SPECIAL MEETING.
By Order of the Board of Directors,
Paul S. Fisher
SECRETARY
_______________, 1997
Chicago, Illinois
<PAGE>
SUBJECT TO COMPLETION, DATED AUGUST 13, 1997
CENTERPOINT PROPERTIES CORPORATION
PROXY STATEMENT
----------------------------------
CENTERPOINT PROPERTIES TRUST
PROSPECTUS
This Proxy Statement/Prospectus is being furnished to the holders of the
common stock, par value $.001 per share (the "Company Common Stock"), of
CenterPoint Properties Corporation, a Maryland corporation (the "Company"),
in connection with the solicitation of proxies by the Board of Directors of
the Company for use at the Special Meeting of Stockholders of the Company
(the "Special Meeting") to be held at the Lower Level Conference Center, 401
North Michigan Avenue, Chicago, Illinois on October 1, 1997 at 11:00 a.m.,
Central Daylight Time, and at any adjournment(s) or postponement(s) thereof.
At the Special Meeting, the Company's stockholders will consider and vote
upon a proposal to approve and adopt the Plan of Reorganization, dated
_______________, 1997 (the "Plan of Reorganization"), by and between the
Company and CenterPoint Properties Trust (the "Trust") pursuant to which the
Company will be reorganized from a Maryland corporation into a Maryland real
estate investment trust by means of a merger (the "Merger") of the Company
with and into the Trust, a newly formed Maryland real estate investment trust
wholly-owned by the Company, and the Trust will be the surviving entity. A
copy of the Plan of Reorganization is attached hereto as Exhibit A. Pursuant
to the Merger, each issued and outstanding share of Company Common Stock will
be converted into one common share of beneficial interest, par value $.001
per share, in the Trust (the "Trust Shares"); each outstanding share of Class
B Common Stock of the Company will be converted into one Class B Common Share
of beneficial interest in the Trust; and the outstanding principal amount of
the Company's 8.22% Convertible Subordinated Debentures due 2004 (the
"Company Debentures") will be assumed by the Trust and converted into the
same principal amount of 8.22% Convertible Subordinated Debentures due 2004
of the Trust (the "Trust Debentures"). The Company's successor, the Trust,
will be governed by Title 8 of the Corporations and Associations Article of
the Annotated Code of Maryland, the Maryland real estate investment trust
statute (the "Title 8").
The principal reason for the Plan of Reorganization is to eliminate the
obligation to pay substantial franchise taxes each year, calculated on the
basis of the Company's paid-in-capital, in the State of Illinois, where most
of the Company's properties are located. In fiscal years 1996, 1995 and
1994, the Company paid $396,418, $186,003 and $53,365, respectively, in
Illinois franchise taxes. The State of Illinois, however, does not recognize
a trust as an entity for purposes of imposing franchise taxes, and, as a
result, the Trust will not be liable for the payment of franchise taxes in
the State of Illinois. If the Plan of Reorganization is approved by the
stockholders of the Company and the Merger is consummated, the Company's
successor, the Trust, will save over a five year period, based on the
Company's paid-in-capital as of June 30, 1997, approximately $879,000 (or
$.045 per fully-diluted share), net of estimated expenses expected to be
incurred in connection with the reorganization (approximately $500,000).
Future increases in paid-in-capital, which could result from the sale of
additional shares or the conversion of Trust Debentures, would increase these
savings. See "The Plan of Reorganization--Principal Reasons for the Plan of
Reorganization."
-i-
<PAGE>
The consummation of the Merger will be subject to a number of conditions
including, among others, the listing of the Trust Shares and the Trust
Debentures for trading on the New York Stock Exchange, Inc. (the "NYSE"),
where the Company Common Stock and the Company Debentures are currently
traded. See "The Plan of Reorganization--Terms of the Plan of
Reorganization."
THE BOARD OF DIRECTORS HAS APPROVED THE PLAN OF REORGANIZATION, SUBJECT TO
STOCKHOLDER APPROVAL, AND BELIEVES THAT THE PLAN OF REORGANIZATION IS IN THE
BEST INTERESTS OF THE COMPANY AND ITS STOCKHOLDERS. THE BOARD RECOMMENDS
THAT YOU VOTE FOR THE PLAN OF REORGANIZATION.
This Proxy Statement/Prospectus also constitutes the Prospectus of the
Trust filed as part of a Registration Statement on Form S-4 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with the Securities and Exchange Commission (the
"Commission") covering an aggregate of 16,751,556 Trust Shares into which
the outstanding shares of Company Common Stock will be converted in
connection with the Merger, pursuant to the Plan of Reorganization.
The Board of Directors has fixed the close of business on August 27,
1997 as the record date for the determination of stockholders entitled to
receive notice of and vote at the Special Meeting (the "Record Date"). As of
the Record Date, the Company had outstanding ________ shares of Company
Common Stock. See "Voting and Proxies."
It is anticipated that this Proxy Statement/Prospectus and the enclosed
proxy card will be first mailed to holders of the Company Common Stock on the
Record Date on or about _________________, 1997.
THE SECURITIES OF THE TRUST DESCRIBED HEREIN HAVE NOT BEEN APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROXY
STATEMENT/PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The date of this Proxy Statement/Prospectus is _______________, 1997
-ii-
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and other
applicable legal or NYSE requirements and, in accordance therewith, files
reports, proxy statements and other information with the Commission. Such
reports, proxy statements and other information filed by the Company under
the Exchange Act can be inspected and copied without charge at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, and at its regional offices located at 7
World Trade Center, 13th Floor, New York, New York 10048 and Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. In addition, materials filed by the Company can be inspected at
the offices of the NYSE, 20 Broad Street, New York, New York 10005. Copies
of such materials can also be obtained at prescribed rates by writing to the
Securities and Exchange Commission, Public Reference Section, 450 Fifth
Street, N.W., Washington, D.C. 20549. Electronic filings made by the
Company through the Electronic Data Gathering, Analysis and Retrieval System
are publicly available through the Commission's Web Site (http://www.sec.gov).
The Trust has filed with the Commission the Registration Statement on
Form S-4 with respect to the Trust Shares to be issued upon consummation of
the Merger pursuant to the Plan of Reorganization described herein, and this
Proxy Statement/Prospectus constitutes the Prospectus of the Trust filed as
part of the Registration Statement. This Proxy Statement/Prospectus does not
contain all of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Copies of the Registration Statement and the
amendments and exhibits thereto may be inspected, without charge, at the
offices of the Commission referred to above, or obtained at prescribed rates
from the Public Reference Section of the Commission at the address set forth
above.
Statements contained in this Proxy Statement/Prospectus concerning the
contents of any contract or other document are not necessarily complete.
With respect to each contract or other document filed as an exhibit to the
Registration Statement, reference is hereby made to that exhibit for a more
complete description of the matter involved, and each such statement is
qualified in its entirety by reference to the full text of such contract or
document.
----------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS IN CONNECTION
WITH THE MATTERS REFERRED TO HEREIN AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR THE TRUST. THIS PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL ANY SECURITIES OTHER THAN THE REGISTERED SECURITIES TO WHICH IT
RELATES, OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES COVERED BY THIS PROXY STATEMENT/PROSPECTUS OR A SOLICITATION OF A
PROXY TO OR BY ANY PERSON IN ANY JURISDICTION WHERE SUCH OFFER OR
SOLICITATION WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROXY
STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF THE SECURITIES TO WHICH THIS
PROXY STATEMENT/PROSPECTUS RELATES SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE INFORMATION CONTAINED HEREIN
SINCE THE DATE HEREOF.
-iii-
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the
Commission pursuant to the Exchange Act are incorporated herein by reference:
(i) the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 and (ii) the Company's Quarterly Report on Form 10-Q for
the fiscal quarter ended March 31, 1997.
In addition, all documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Proxy Statement/Prospectus and prior to the termination of the offering of
all securities offered hereby shall be deemed to be incorporated by reference
in this Proxy Statement/Prospectus and to be a part hereof from the date of
filing of such documents. Any statement herein or in any document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for the purposes of this Proxy
Statement/Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed to constitute a
part of this Proxy Statement/Prospectus except as so modified or superseded.
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THE COMPANY WILL
PROVIDE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO
WHOM A COPY OF THIS PROXY STATEMENT/PROSPECTUS IS DELIVERED, UPON THE WRITTEN
OR ORAL REQUEST OF SUCH PERSON, A COPY OF ANY AND ALL OF THE DOCUMENTS THAT
HAVE BEEN OR MAY BE INCORPORATED HEREIN BY REFERENCE (EXCLUDING EXHIBITS TO
SUCH INFORMATION UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE INTO THE INFORMATION THAT THIS PROXY STATEMENT/PROSPECTUS
INCORPORATES). REQUESTS FOR SUCH INFORMATION SHOULD BE DIRECTED TO
CENTERPOINT PROPERTIES CORPORATION, 401 NORTH MICHIGAN, 30TH FLOOR, CHICAGO,
ILLINOIS 60611; ATTENTION: PAUL S. FISHER, SECRETARY, TELEPHONE (312)
346-5600.
-iv-
<PAGE>
TABLE OF CONTENTS
PAGE
----
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Date, Time, Place and Purpose of Special Meeting . . . 1
Stockholders Entitled to Vote . . . . . . . . . . . . 1
Vote Required; No Dissenters' Rights . . . . . . . . . 1
The Company and the Trust . . . . . . . . . . . . . . 1
The Plan of Reorganization . . . . . . . . . . . . . . 2
Recommendation of the Board of Directors . . . . . . . 9
VOTING AND PROXIES . . . . . . . . . . . . . . . . . . . . 9
Matters to be Considered at the Special Meeting . . . 9
Record Date and Outstanding Shares . . . . . . . . . . 9
Proxies and Votes Required . . . . . . . . . . . . . . 9
Solicitation of Proxies and Expenses . . . . . . . . . 10
THE PLAN OF REORGANIZATION . . . . . . . . . . . . . . . . 11
Principal Reasons for the Plan of Reorganization . . . 11
Terms of the Plan of Reorganization . . . . . . . . . 11
Comparison of Rights of Stockholders
of the Company and Shareholders of the Trust. . . 13
Limitation of Liability of Shareholders . . . . . . . 17
Limitation of Liability and Indemnification of
Directors and Trustees . . . . . . . . . . . . . 17
Certain Provisions of Maryland Law . . . . . . . . . . 19
Regulatory Requirements . . . . . . . . . . . . . . . 21
Accounting Treatment . . . . . . . . . . . . . . . . . 21
Certain Tax Consequences of the
Plan of Reorganization . . . . . . . . . . . . . 21
Stock Certificates and Debenture Certificates . . . . 21
DESCRIPTION OF SHARES OF BENEFICIAL OWNERSHIP
IN THE TRUST . . . . . . . . . . . . . . . . . . . . . . 22
General . . . . . . . . . . . . . . . . . . . . . . . 22
Trust Shares . . . . . . . . . . . . . . . . . . . . . 22
Class B Trust Shares . . . . . . . . . . . . . . . . . 22
Trust Preferred Shares . . . . . . . . . . . . . . . . 27
Restrictions on Ownership . . . . . . . . . . . . . . 27
DESCRIPTION OF TRUST DEBENTURES . . . . . . . . . . . . . . 28
General . . . . . . . . . . . . . . . . . . . . . . . 29
Conversion . . . . . . . . . . . . . . . . . . . . . . 30
Subordination of Debentures . . . . . . . . . . . . . 31
Optional Redemption . . . . . . . . . . . . . . . . . 32
Dividends, Distributions and Acquisitions
of Common Shares . . . . . . . . . . . . . . . . . . 32
-i-
<PAGE>
Merger, Consolidation, Sale or Conveyance . . . . . . . 33
Events of Default, Notice and Waiver . . . . . . . . . 33
Modification of the Indenture . . . . . . . . . . . . . 34
Effect of Plan of Reorganization on Holders
of Company Debentures . . . . . . . . . . . . . . . . 34
LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . 35
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . 35
OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . 35
SHAREHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . . 35
-ii-
<PAGE>
SUMMARY
THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED ELSEWHERE IN
THIS PROXY STATEMENT/PROSPECTUS. THIS SUMMARY DOES NOT CONTAIN A COMPLETE
STATEMENT OF ALL MATERIAL FEATURES OF THE PROPOSAL TO BE VOTED ON AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF THIS PROXY
STATEMENT/PROSPECTUS AND THE EXHIBITS HERETO. THE COMPANY'S STOCKHOLDERS ARE
URGED TO READ THIS PROXY STATEMENT/PROSPECTUS AND THE ACCOMPANYING EXHIBITS
IN THEIR ENTIRETY.
DATE, TIME, PLACE AND PURPOSE OF SPECIAL MEETING
The Special Meeting will be held at the Lower Level Conference Center,
401 North Michigan Avenue, Chicago, Illinois on October 1, 1997 at 11:00
a.m., Central Daylight Time, to approve the Plan of Reorganization which
provides for the reorganization of the Company from a Maryland corporation to
a Maryland real estate investment trust. See "The Plan of Reorganization."
STOCKHOLDERS ENTITLED TO VOTE
The Board of Directors has fixed the close of business on August 27,
1997 as the Record Date for the determination of stockholders entitled to
receive notice of and vote at the Special Meeting. As of the Record Date,
the Company had outstanding and entitled to vote ________ shares of Company
Common Stock. See "Voting and Proxies."
VOTE REQUIRED; NO DISSENTERS' RIGHTS
In accordance with the Maryland General Corporation Law (the "MGCL") and
the Company's Amended and Restated Articles of Incorporation (the "Articles
of Incorporation"), the affirmative vote of the holders of two-thirds of the
outstanding shares of Company Common Stock entitled to vote thereon will be
necessary for approval of the Plan of Reorganization. Under the MGCL, the
Company's stockholders will not be entitled to dissenters' rights of
appraisal in connection with the Merger. See "Voting and Proxies" and "The
Plan of Reorganization--Comparison of Rights of Stockholders of the Company
and Shareholders of the Trust."
THE COMPANY AND THE TRUST
The Company is a self-administered and self-managed real estate company
focused on the acquisition, development, redevelopment, management and
ownership of warehouse/industrial property located in metropolitan Chicago
(defined as the area within a 100-mile radius of Chicago), which, according
to a ranking of markets published by CB Commercial/Torto Wheaton Research, is
the largest warehouse/industrial market in the United States.
As of June 30, 1997, the Company owned and managed a portfolio of 79
warehouse/industrial properties, containing approximately 16.0 million square
feet of space. Based on published statistics regarding square feet of space
owned and managed by other firms and publicly available information filed with
the Commission, as well as its knowledge and experience in the market, the
Company believes it is the largest owner and operator of warehouse/industrial
property in metropolitan Chicago. The Company also owns and manages three
retail properties, one office property and one apartment property. The
Company's properties are currently 95% leased, with the warehouse/industrial
properties occupied by 133 tenants in diverse industries and no tenant
accounting for the lease of more than 5% of the total
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square footage of the Company's warehouse/industrial portfolio.
Substantially all of the Company's properties have been constructed or
renovated during the past ten years.
The Trust was organized as a Maryland real estate investment trust on
August 13, 1997 by the Company to succeed to and continue the business of the
Company upon consummation of the Merger of the Company with and into the
Trust pursuant to the Plan of Reorganization. The Trust has conducted no
business to date other than that incident to the Plan of Reorganization and
has no material assets or liabilities.
The Company filed with its 1994 Federal tax return an election for
qualification to be taxed as a real estate investment trust (a "REIT") under
Sections 856 through 858 of the Internal Revenue Code of 1986, as amended
(the "Code"), which election became effective as of January 1, 1994. The
consummation of the Merger should not adversely affect the ability of the
Trust, as successor to the Company, to qualify as a REIT under the Code.
Ungaretti & Harris, independent counsel to the Company and the Trust, has
delivered to the Company and the Trust an opinion to the effect that the
Trust, as successor to the Company, will qualify as a REIT under the Code.
See "The Plan of Reorganization--Certain Tax Consequences of the Plan of
Reorganization."
The consummation of the Merger will not cause any change in the
Company's management, business, assets or liabilities.
The principal executive offices of both the Company and the Trust are
located at 401 North Michigan Avenue, 30th Floor, Chicago, Illinois 60611,
telephone (312) 346-5600.
THE PLAN OF REORGANIZATION
PRINCIPAL REASONS FOR THE PLAN OF REORGANIZATION
The principal reason for the Plan of Reorganization is to eliminate the
obligation to pay substantial franchise taxes each year in the State of
Illinois. Most of the Company's properties are located in the State of
Illinois, and the Company is qualified as a foreign corporation to conduct
business in the State of Illinois and is subject to the Illinois franchise
tax. In fiscal years 1996, 1995 and 1994, the Company paid $396,418, $186,003
and $53,365, respectively, in annual franchise taxes to the State of
Illinois. The State of Illinois, however, does not recognize a trust as an
entity for purposes of imposing franchise taxes. As a result, the Trust will
not be liable for the payment of franchise taxes in the State of Illinois.
If the Plan of Reorganization is approved by the stockholders of the Company
and the Merger is consummated, the Company's successor, the Trust, will save
over a five year period, based on the Company's paid-in-capital as of June
30, 1997, approximately $879,000 (or $.045 per fully-diluted share), net of
estimated expenses expected to be incurred in connection with the
reorganization (approximately $500,000). There is no assurance, however,
that the State of Illinois will not amend its laws in the future to recognize
trusts as entities liable for the payment of franchise taxes.
In addition, the Trust will be governed under Maryland law by the real
estate investment trust statute, Title 8, which is specifically tailored for
REITs, and the Trust will continue to benefit from the favorable perception
held by the experienced REIT investor community of Maryland law as beneficial
to REITs.
For these reasons, the Board of Directors of the Company believes that
the Plan of Reorganization is in the best interests of the Company and its
stockholders. See "The Plan of
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<PAGE>
Reorganization--Principal Reasons for the Plan of Reorganization;" and
"--Comparison of Rights of Stockholders of the Company and Shareholders of
the Trust."
TERMS OF THE PLAN OF REORGANIZATION
The Plan of Reorganization will be effected through the Merger of the
Company with and into the Trust. As a result of the Merger, the Trust will
be the surviving entity, the separate existence of the Company will
terminate, each outstanding share of Company Common Stock will be converted
into one Trust Share, each outstanding share of Class B Common Stock of the
Company will be converted into one Class B Common Share of beneficial
interest in the Trust and the outstanding principal amount of the Company
Debentures will be assumed by the Trust and converted into the same principal
amount of Trust Debentures. As a consequence of the Merger, all properties,
assets, liabilities and obligations of the Company will become properties,
assets, liabilities and obligations of the Trust. Upon consummation of the
Merger, each of the persons who is then a director or officer of the Company
will continue as a trustee or officer, respectively, of the Trust, and the
shareholders of the Trust will be governed by the Trust's organizational
documents, the Declaration of Trust attached hereto as Exhibit B (the
"Declaration of Trust") and By-laws attached hereto as Exhibit C (the "Trust
By-laws"). See "The Plan of Reorganization--Comparison of Rights of
Stockholders of the Company and Shareholders of the Trust."
The Plan of Reorganization has been adopted by the Board of Directors of
the Company, subject to stockholder approval, pursuant to its authority under
the MGCL to cause a merger of the Company with and into a trust. The Merger
will become effective upon the latest of the following to occur: (i)
stockholder approval of the Plan of Reorganization in accordance with the
provisions of the MGCL; (ii) authorization of the Trust Shares and Trust
Debentures for listing on the NYSE, subject to official notice; and (iii) the
execution and filing of the Articles of Merger in accordance with the MGCL
and Title 8. It is expected that official notice of the listing of the Trust
Shares and the Trust Debentures on the NYSE will occur at the time of the
effectiveness of the Merger and that the listing of the Company Common Stock
and the Company Debentures on the NYSE will be simultaneously terminated.
The Trust Shares and the Trust Debentures will thereafter continue to be
listed on the NYSE in accordance with the applicable rules of the NYSE.
The Company anticipates that the Merger will become effective as
promptly as practicable following stockholder approval of the Plan of
Reorganization at the Special Meeting. The Plan of Reorganization provides
that the Merger may be abandoned by the Company or by the Trust at any time
prior to its effectiveness. The Company has no current intention of
abandoning or causing the Trust to abandon the Merger subsequent to the
Special Meeting if stockholder approval is obtained.
If the Plan of Reorganization is approved and the Merger is consummated,
the obligations of the Company under the Company's 1995 Director Stock Plan,
the 1995 Restricted Stock Incentive Plan and the 1993 Stock Option Plan and
option agreements will be assumed by the Trust, and all rights of the
participants therein to receive grants of Company Common Stock or options to
purchase shares of Company Common Stock on the terms and conditions of the
applicable Plans or option agreements will be converted into rights to
receive such grants of Trust Shares or options to purchase Trust Shares,
respectively, on the same terms and conditions.
See "The Plan of Reorganization--Terms of the Plan of Reorganization."
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<PAGE>
COMPARISON OF RIGHTS OF STOCKHOLDERS OF THE COMPANY AND SHAREHOLDERS OF
THE TRUST
The rights of stockholders of the Company are currently governed by the
Company's Articles of Incorporation, the Company's Amended and Restated
By-laws (the "Company By-laws") and the MGCL. If the Plan of Reorganization
is approved by the Company's stockholders and the Merger is consummated, the
Trust will be the surviving entity in the Merger and the rights of the
shareholders of the Trust will be governed by the Trust's organizational
documents, the Declaration of Trust and Trust By-laws, and by Title 8.
As a Maryland corporation, the Company is subject to the MGCL, a general
corporation statute which addresses a wide variety of corporate governance
matters. As a Maryland real estate investment trust, the Trust is subject to
Title 8, the statute governing Maryland real estate investment trusts. While
Title 8 covers some of the matters addressed in the MGCL, there are many
matters covered by the MGCL which are not addressed in Title 8. Accordingly,
it is the general practice for an entity organized as a Maryland real estate
investment trust to address a number of the matters covered by the MGCL but
not covered by Title 8 through provisions in its declaration of trust and
by-laws, the organizational documents of a trust analogous to a corporation's
articles of incorporation and by-laws. The Declaration of Trust and Trust
By-laws are intended to afford holders of Trust Shares rights substantially
similar to those of the Company's stockholders, although the reorganization
of the Company from a corporation to a real estate investment trust will
result in certain material differences in such rights.
The following table compares certain of the existing rights of
stockholders of the Company with those of shareholders of the Trust.
<TABLE>
<CAPTION>
PROVISION COMPANY TRUST
--------- ------- -----
<S> <C> <C>
Election of Directors/ Under the Articles of Under the Declaration of Trust,
Trustees Incorporation, stockholders elect shareholders elect trustees
directors at an annual meeting at an annual meeting.
Removal of Directors/ Under the Company By-laws, Under the Trust By-laws, holders
Trustees holders of a majority of the of a majority of the outstanding
outstanding shares of Company Trust Shares entitled to vote on
Common Stock entitled to vote on the matter may remove a trustee,
the matter may remove a director, with or without cause.
with or without cause.
Dividends Under the MGCL, stockholders are No limitations.
entitled to receive dividends as
and when declared by the Board of
Directors, provided that no
distribution on any class of
stock may be made if, after
giving effect to such
distribution, the Company would
not be able to pay its
indebtedness as it becomes due or
the Company's total assets would
be less than the sum of its
liabilities plus the amount that
would be needed to
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<PAGE>
<CAPTION>
PROVISION COMPANY TRUST
--------- ------- -----
<S> <C> <C>
satisfy preferential rights upon
dissolution of stockholders whose
preferential rights on
dissolution are superior to the
rights of the holders of such
class of stock.
Preferred Stock Under the MGCL, shares of Under Title 8, preferred shares
preferred stock may be issued of beneficial interest may be
from time to time in one or more issued from time to time in one
series as authorized by the Board or more series as authorized by
of Directors. the Board of Trustees.
Stockholder Action Under the MGCL, any stockholders' Under the Trust By-laws, any
Without a Meeting action may be effected by a shareholders' action may be
written consent signed by all of effected by a written consent
the stockholders entitled to vote signed by all of the shareholders
thereon. entitled to vote thereon.
Director/Trustee Action Under the MGCL, any directors' Under the Trust By-laws, any
Without a Meeting action may be effected by a trustees' action may be effected
written consent signed by all of by a written consent signed by
the directors. all of the trustees.
Amendment of Constitutional Under the MGCL, amendment of the Under Title 8, amendment of the
Documents Articles of Incorporation Declaration of Trust requires
requires approval by a majority approval by a majority of the
of the Board of Directors and the Board of Trustees and the
affirmative vote of the holders affirmative vote of the holders
of two-thirds of the outstanding of two-thirds of the outstanding
shares of Company Common Stock Trust Shares entitled to vote on
entitled to vote on the matter. the matter; however, the trustees
may amend the Declaration of
Amendment of the Company By-laws Trust by a two-thirds vote to
requires approval by a majority enable the Trust to qualify as a
of the Board of Directors, and real estate investment trust
any by-law adopted by the under the Internal Revenue Code
stockholders may be altered, or under Title 8.
amended or repealed by a majority
of the directors. Under the Declaration of Trust,
amendment of the Trust By-laws
requires approval by a majority
of the Board of Trustees, subject
to repeal or change of such
amendment by the affirmative vote
of a majority of the shareholders
entitled to vote on the matter.
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<PAGE>
<CAPTION>
PROVISION COMPANY TRUST
--------- ------- -----
<S> <C> <C>
Voting on Merger, Under the MGCL, a consolidation, Under Title 8, a merger of the
Consolidation or Sale of Assets merger, share exchange or Trust into another entity
transfer of all or substantially requires the approval of the
all of the Company's assets Board of Trustees and the holders
requires the approval of the of two-thirds of the outstanding
Board of Directors and the Trust Shares entitled to vote
holders of two-thirds of the thereon.
outstanding shares of Company
Common Stock entitled to vote Under the Declaration of Trust,
thereon. the consolidation or sale of all
or substantially all of the
Trust's assets requires the
approval of the holders of
two-thirds of the outstanding
Trust Shares entitled to vote
thereon.
Stockholders' Rights to Under the Company By-laws, the Under the Trust By-laws, the
Call Special Meeting holders of not less than 25% of holders of not less than 25% of
the outstanding shares of Company the outstanding Trust Shares
Common Stock entitled to vote on entitled to vote on a matter may
a matter may call a special call a special meeting.
meeting.
Share Ownership Limit The Articles of Incorporation The Declaration of Trust imposes
impose an Ownership Limit of 9.8% an Ownership Limit of 9.8% in
in value of the outstanding value of the outstanding Trust
shares of Company Common Stock by Shares by any holder to ensure
any holder to assure against against closely held REIT
closely held REIT disqualification, subject to
disqualification, subject to certain exceptions.
certain exceptions.
Dissolution Under the MGCL, the Company may Under the Declaration of Trust,
be dissolved by the vote of the the Trust may be dissolved or
holders of two-thirds of the terminated by the vote of the
shares of Company Common Stock holders of two-thirds of the
entitled to vote on the matter. Trust Shares entitled to vote on
the matter.
Advance Notice for Under the Articles of Under the Declaration of Trust,
Stockholder Nominations Incorporation, advance notice advance notice must be given by
and Proposals must be given by holders of holders of Trust Shares to
Company Common Stock to nominate nominate trustees or bring other
directors or bring other business business before an annual meeting
before an annual meeting of of shareholders.
stockholders.
Restrictions on Investment No restrictions on investment and Under Title 8, the Trust must
and Use of Assets use of assets. hold at least 75% of the value of
its assets in certain real estate
assets, government securities,
cash and cash items.
</TABLE>
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<PAGE>
As described above, the Declaration of Trust and the Trust By-laws
address many of the matters covered by the MGCL which are not addressed in
Title 8. However, unlike an amendment to the MGCL which must be approved by
legislative action of the State of Maryland, the Declaration of Trust may be
amended by the vote of a majority of the Board of Trustees and the vote of
two-thirds of the shareholders entitled to vote on a matter (except that an
amendment to the Declaration of Trust to enable the Trust to qualify the
Trust as a real estate investment trust under the Internal Revenue Code or
under Title 8 requires only the vote of two-thirds of the trustees) and the
Trust By-laws may be amended by the vote of a majority of the Board of
Trustees, subject to repeal or change of such amendment by the affirmative
vote of a majority of the shareholders of the Trust entitled to vote thereon.
See "The Plan of Reorganization--Comparison of Rights of Stockholders of the
Company and Shareholders of the Trust."
The discussion of the comparative rights of stockholders of Company and
shareholders of the Trust set forth above does not purport to be complete and
is subject to and qualified in its entirety by reference to the MGCL and
Title 8 and to the Articles of Incorporation and By-laws of the Company and
the Declaration of Trust and the Trust By-laws. Copies of these documents
have been filed as exhibits to the Registration Statement of which this Proxy
Statement/Prospectus is a part, and copies of the Declaration of Trust and
the Trust By-laws are attached to this Proxy Statement as Exhibits B and C,
respectively. See "Available Information."
LIMITATION OF LIABILITY OF SHAREHOLDERS
As stockholders of a corporation, holders of shares of the Company
Common Stock are generally not responsible for the Company's debts and
obligations. The Declaration of Trust similarly provides that no shareholder
of the Trust shall be liable for any debt, claim, demand, judgment or
obligation of any kind of, against or with respect to the Trust by reason of
his being a shareholder. Shareholders of the Trust are expressly granted
limited liability protection under the laws of the States of Maryland, where
the Trust is organized, and Illinois, where most of the Trust's properties
will be located, as well as certain other states. Under Maryland law,
shareholders of the Trust will not be held liable for the debts and
obligations of the Trust in the State of Maryland except (i) for actual
receipt of an improper personal benefit in money, property or services or
(ii) for active and deliberate dishonesty established by a final judgment as
being material to the cause of action. Under Illinois law, the shareholders
or beneficiaries of a real estate investment trust are not personally liable
for the obligations of the real estate investment trust.
Because not all states have statutes that recognize the legal existence
of business trusts and expressly acknowledge the limited liability of the
shareholders of such entities, it will be the Trust's policy, as provided in
the Declaration of Trust, to include in written agreements to which the Trust
becomes a party after the effective date of the Merger a provision that
shareholders assume no personal liability for obligations entered into on
behalf of the Trust. However, with respect to tort claims, contractual
claims where shareholder liability is not so negated (including certain
existing contractual obligations of the Company assumed by the Trust as a
consequence of the Merger), claims for taxes and certain statutory liability,
a shareholder of the Trust may, in some jurisdictions, be personally liable
to the extent that such claims are not satisfied by the Trust. Inasmuch as
the Trust will carry public liability insurance which it considers adequate,
any risk of personal liability to shareholders would be limited to situations
in which the Trust's assets together with its insurance coverage would be
insufficient to satisfy
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<PAGE>
the claims against the Trust and its shareholders. See "The Plan of
Reorganization--Limitation of Liability of Shareholders."
LIMITATION OF LIABILITY AND INDEMNIFICATION OF DIRECTORS AND TRUSTEES
Both the Articles of Incorporation and the Declaration of Trust contain
express provisions limiting the liability of the Company's directors and
officers and the Trust's trustees and officers, respectively, to the maximum
extent permitted by Maryland law. The Declaration of Trust also provides th
e trustees and officers of the Trust with limited liability in the absence of
any Maryland statute limiting the liability of the trustees and officers of
the Trust for money damages in a suit by or on behalf of the Trust or by any
shareholder thereof in certain circumstances. The MGCL and Title 8 permit
the charter and declaration of trust of a Maryland corporation or real estate
investment trust, respectively, to expand or limit the liability of the
corporation's directors and officers or the trust's trustees and officers
with certain exceptions. However, Title 8 also provides that, although
trustees and officers of a Maryland real estate investment trust are not
personally liable for the obligations of the trust, trustees are not relieved
from liability for any act that constitutes (a) bad faith, (b) willful
misfeasance, (c) gross negligence or (d) reckless disregard of the trustee's
duties.
In addition, both the Company's Articles of Incorporation and By-laws
and the Trust's Declaration of Trust and Trust By-laws authorize the Company
and the Trust, respectively, to indemnify their present and former directors
or trustees, as the case may be, and certain other persons to the maximum
extent permitted by Maryland law, subject to certain exceptions. See "The
Plan of Reorganization--Limitation of Liability and Indemnification of
Directors and Trustees."
REGULATORY REQUIREMENTS
Neither the Company nor the Trust is aware of any Federal, state or
local regulatory requirements that must be complied with or approvals that
must be obtained prior to consummation of the Merger pursuant to the Plan of
Reorganization, other than compliance with applicable Federal and state
securities laws and the filing of the articles of merger as required under
the MGCL and Title 8. See "The Plan of Reorganization--Regulatory
Requirements."
CERTAIN TAX CONSEQUENCES OF THE PLAN OF REORGANIZATION
Ungaretti & Harris, as independent tax counsel to the Company and the
Trust, has delivered to the Company an opinion (the "Tax Opinion") to the
effect that the Merger will be an "F reorganization" within the meaning of
the Code. As a consequence of such treatment, no gain or loss will be
recognized by the Company, the Trust or the stockholders in connection with
the exchange of shares of stock in the Company for shares of beneficial
interest in the Trust. Stockholders will receive shares of beneficial
interest in the Trust with the same basis and holding period for Federal
income tax purposes as the shares of stock surrendered in the exchange. The
Trust will succeed to the basis and holding period of the Company with
respect to assets the Trust receives in the Merger. The Tax Opinion also
concludes that the Merger will not adversely affect the Company's continued
qualification as a REIT. For Federal income tax reporting purposes, the
Trust will be considered the same entity as the Company. See "The Plan of
Reorganization--Certain Tax Consequences of the Plan of Reorganization."
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<PAGE>
RECOMMENDATION OF THE BOARD OF DIRECTORS
The Board of Directors of the Company unanimously recommends that the
Company's stockholders vote FOR the approval of the Plan of Reorganization
providing for the reorganization of the Company from a Maryland corporation
to a Maryland real estate investment trust.
VOTING AND PROXIES
This Proxy Statement/Prospectus is being furnished to holders of Company
Common Stock on the Record Date in connection with the solicitation of
proxies by the Company's Board of Directors for use at the Company's Special
Meeting of Stockholders to be held at the Lower Level Conference Center, 401
North Michigan Avenue, Chicago, Illinois on October 1, 1997 at 11:00 a.m.,
Central Daylight Time, or at any adjournment(s) or postponement(s) thereof,
for the purposes set forth herein and in the accompanying Notice of Special
Meeting of Stockholders of the Company.
This Proxy Statement/Prospectus and the accompanying proxy cards are
first being mailed to the Company's stockholders on or about ____________,
1997.
MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING
At the Special Meeting, stockholders of record as of the close of
business on the Record Date will be asked to consider and vote upon the
proposals (i) to approve the Plan of Reorganization and (ii) to transact such
other business as may properly come before the Special Meeting or any
adjournment(s) or postponement(s) thereof.
RECORD DATE AND OUTSTANDING SHARES
Only holders of record of Company Common Stock at the close of business
on the Record Date are entitled to notice of and to vote at the Special
Meeting. As of the Record Date, there were _________ shares of Company Common
Stock outstanding and entitled to vote held beneficially by approximately
_______ stockholders. Each stockholder of the Company is entitled to one
vote for each share of Company Common Stock held as of the close of business
on the Record Date.
As of the close of business on the Record Date, directors and executive
officers of the Company and their affiliates were beneficial owners of
approximately ______ shares of Company Common Stock, representing
approximately ____% of the outstanding shares of Company Common Stock
entitled to vote on the Plan of Reorganization, including 1,008,478 shares,
representing approximately 6% of the outstanding shares, held by
Capital and Regional Properties plc, of which Martin Barber, Chairman of
the Company's Board of Directors, is Chairman. All of such persons have
indicated their intent to vote in favor of approval of the Plan of
Reorganization. The officers and directors of the Company as of the date
of this Proxy Statement/Prospectus will be the officers and trustees of the
Trust upon the consummation of the Merger.
PROXIES AND VOTES REQUIRED
All proxies that are properly executed and returned, unless previously
revoked (or unless the person granting the proxy attends the meeting and
votes in person), will be voted at the Special Meeting in accordance with the
instructions indicated thereon, and proxy cards submitted without
specification will be voted FOR approval of the Plan of Reorganization. The
Company's management knows of no
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<PAGE>
matters other than the matters set forth in this Proxy Statement/Prospectus
to be submitted at the Special Meeting. However, if any other business not
specified in this Proxy Statement/Prospectus properly comes before the
Special Meeting, it is the intention of the persons named in the proxy to
vote in respect thereof in accordance with their best judgment. The
execution of a proxy will not affect a Company stockholder's right to attend
the Special Meeting and vote in person. A stockholder of the Company who has
given a proxy may revoke it at any time before it is exercised at the Special
Meeting by delivery to the Secretary of the Company of a written notice
stating that the proxy is revoked, by execution and delivery of a proxy
bearing a later date or by attending the Special Meeting and voting in
person. Attendance at the Special Meeting will not, by itself, revoke a
proxy.
A majority of the shares of Company Common Stock outstanding and
entitled to vote thereat will constitute a quorum at the Special Meeting. If
a share is represented for any purpose at the Special Meeting, it is deemed
present for all other matters thereat. Under the MGCL, the approval of the
Plan of Reorganization requires the affirmative vote of the holders of
two-thirds of the outstanding shares of Company Common Stock. A stockholder
who abstains from a vote on any matter by registering an abstention will be
deemed present at the Special Meeting for quorum purposes but will not be
deemed to have voted on that matter, and the abstentions will count as a vote
against the matter under consideration. Similarly, in the event a nominee
holding shares for beneficial owners votes on certain matters pursuant to
discretionary authority or instruction from the beneficial owners, but with
respect to one or more other matters does not receive instructions from the
beneficial owners and does not exercise discretionary authority (a so-called
"non-vote"), the shares held by the nominee will be deemed present at the
Special Meeting for quorum purposes but will not be deemed to have voted on
such other matters and will be deemed to have been voted as a vote against
the matter under consideration. Proxy cards submitted without specification
will be voted FOR approval of the Plan of Reorganization.
SOLICITATION OF PROXIES AND EXPENSES
The solicitation of proxies for the Special Meeting is being made by the
Board of Directors of the Company and will be done principally by mail. The
Company will bear the entire cost of solicitation of proxies from the
Company's stockholders and of preparing, assembling, printing and mailing
this Proxy Statement/Prospectus, the proxy and any additional information
furnished to the Company's stockholders. Copies of solicitation material
will be furnished to brokerage houses, banks, fiduciaries and other
custodians or nominees holding in their names shares of Company Common Stock
beneficially owned by others to forward to such beneficial owners. The
Company may reimburse persons representing owners of shares of Company Common
Stock for their expenses in forwarding solicitation material to such
beneficial owners. Original solicitation of proxies by mail may be
supplemented by telephone, telegram or personal solicitation by directors,
officers or other regular employees of the Company. In addition, the Company
has engaged Corporate Investor Communications, Inc. to furnish solicitation
services on its behalf. No additional compensation will be paid to
directors, officers or other regular employees for such services, but
Corporate Investor Communications, Inc. will be paid a fee for its services,
estimated to be approximately $6,000, plus reimbursement of its expenses.
THE COMPANY'S STOCKHOLDERS SHOULD NOT SEND ANY STOCK CERTIFICATES WITH
THEIR PROXY CARDS.
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<PAGE>
THE PLAN OF REORGANIZATION
PRINCIPAL REASONS FOR THE PLAN OF REORGANIZATION
The principal reason for the Plan of Reorganization is to eliminate the
obligation to pay substantial franchise tax liabilities each year in the
State of Illinois. The Company was originally organized under Maryland law
in order to take advantage of the common perception by the experienced REIT
investor community that Maryland law confers the most beneficial framework
within which REITs may operate and develop. Most of the Company's
properties, however, are located in the State of Illinois, and, as a result,
the Company is qualified as a foreign corporation to conduct business in the
State of Illinois and is subject to the Illinois franchise tax. The Illinois
franchise tax payable annually by foreign corporations is determined based on
the amount of the corporation's paid-in-capital, and the amount of the
franchise tax is increased by the issuance of additional shares. In fiscal
years 1996, 1995 and 1994, the Company paid $396,418, $186,003 and $53,365,
respectively, in annual franchise taxes to the State of Illinois.
The State of Illinois, however, does not recognize a trust as an entity
for purposes of imposing the annual franchise tax. If the Plan of
Reorganization is approved by the stockholders and the Merger is consummated,
the Company's successor, the Trust, will not be recognized as an entity in
the State of Illinois for purposes of imposing franchise tax liability and
will not be liable for the payment of Illinois franchise taxes. Management
believes that the savings from annual Illinois franchise taxes (based on the
amount of the Company's paid-in-capital as of June 30, 1997) over a five year
period will be approximately $879,000 (or $.045 per fully-diluted share), net
of estimated expenses expected to be incurred in connection with the
reorganization (approximately $500,000). Future increases in
paid-in-capital, which could result from the sale of additional shares or the
conversion of Trust Debentures, would increase these savings. There is no
assurance, however, that the State of Illinois will not amend its laws to
recognize trusts as entities liable for the payment of annual franchise taxes.
In addition, the Trust will be governed under Maryland law by the real
estate investment trust statute, Title 8, which is specifically tailored for
REITs, and the Trust will continue to benefit from the favorable perception
held by the experienced REIT investor community of Maryland law. See
"--Comparison of Rights of Stockholders of the Company and Shareholders of
the Trust."
For these reasons, the Board of Directors of the Company believes that
the Plan of Reorganization is in the best interests of the Company and its
stockholders.
TERMS OF THE PLAN OF REORGANIZATION
The following summary of the terms of the Plan of Reorganization is
qualified in its entirety by reference to the Plan of Reorganization, a copy
of which is attached as Exhibit A hereto and is incorporated by reference
herein. Stockholders of the Company are urged to review the Plan of
Reorganization in its entirety.
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<PAGE>
The Plan of Reorganization will be effected through the Merger of the
Company with and into the Trust, as a result of which the Trust will be the
surviving entity and the separate existence of the Company will terminate.
Upon the effectiveness of the Merger, each outstanding share of Company
Common Stock will be converted into one Trust Share, the Trust Share held by
the Company will be canceled and returned to the status of authorized but
unissued Trust Shares; each outstanding share of Class B Common Stock of the
Company will be converted into one Class B Common Share of Beneficial
Interest in the Trust, each share of capital stock of the Company held as
treasury shares will be canceled without any consideration therefor; and the
outstanding principal amount of the Company Debentures will be assumed by the
Trust and converted into the same principal amount of Trust Debentures. As a
consequence of the Merger, all properties, assets, liabilities and
obligations of the Company will become properties, assets, liabilities and
obligations of the Trust. For Federal income tax reporting purposes, the
Trust will be considered to be the same entity as the Company. See "The Plan
of Reorganization--Certain Tax Consequences of the Plan of Reorganization."
The Plan of Reorganization has been adopted by the Board of Directors of
the Company, subject to stockholder approval, pursuant to its authority under
the MGCL to cause a merger of the Company with and into a trust.
The Merger will become effective upon the latest of the following to
occur: (i) stockholder approval of the Plan of Reorganization in accordance
with the provisions of the MGCL, (ii) authorization of the Trust Shares and
Trust Debentures for listing on the NYSE, subject to official notice and
(iii) the execution and filing of the Articles of Merger in accordance with
the MGCL and Title 8. It is expected that official notice of the listing of
the Trust Shares and Trust Debentures on the NYSE will occur at the time of
the effectiveness of the Merger and that the listing of the Company Common
Stock and Company Debentures on the NYSE will be simultaneously terminated.
The Trust Shares and the Trust Debentures will thereafter continue to be
listed on the NYSE in accordance with the applicable rules of the NYSE. The
Company anticipates that the Merger will become effective as promptly as
practicable following stockholder approval of the Plan of Reorganization at
the Special Meeting. The Plan of Reorganization provides that the Merger may
be abandoned by the Company or by the Trust at any time prior to its
effectiveness. The Company has no current intention of abandoning or causing
the Trust to abandon the Merger subsequent to the Special Meeting if
stockholder approval is obtained.
Upon consummation of the Merger, the Trust and its shareholders will be
governed by the Trust's Declaration of Trust and Trust By-laws, copies of
which are attached hereto as Exhibits B and C, respectively. See
"--Comparison of Rights of Stockholders of the Company and Shareholders of
the Trust." In addition, on the effective date of the Merger, each of the
persons serving as a director and/or officer of the Company will continue as
a trustee and/or officer, respectively, of the Trust.
If the Plan of Reorganization is approved and the Merger is consummated,
the obligations of the Company under the Company's 1995 Director Stock Plan
and 1995 Restricted Stock Incentive Plan will be assumed by the Trust and all
rights of the participants therein to receive grants of Company Common Stock
on the terms and conditions of the applicable Plan will be converted into
rights to receive grants of Trust Shares on the same terms and conditions.
In addition, the obligations of the Company under the Company's 1993 Stock
Option Plan and option agreements will be assumed by the Trust and all rights
of the participants therein to receive grants of options to purchase shares
of Company Common Stock on the terms and conditions of the Stock Option Plan
or option agreements will be converted into rights to receive grants of
options to purchase Trust Shares on the same terms and conditions.
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At the effective date of the Merger, each certificate representing
shares of Company Common Stock will be deemed for all purposes to evidence
the same number of Trust Shares; each certificate representing shares of
Class B Common Stock of the Company will be deemed for all purposes to
evidence the same number of Class B Common Shares of beneficial interest of
the Trust; and each certificate representing the principal amount of
outstanding Company Debentures will be deemed for all purposes to evidence
the same principal amount of Trust Debentures. Holders of Company Common
Stock, Class B Common Stock and Company Debentures will not be required to
exchange their certificates for certificates representing Trust Shares, Class
B Common Shares or Trust Debentures, as the case may be, into which their
securities will have been converted in the Merger.
See "The Plan of Reorganization--Terms of the Plan of Reorganization."
COMPARISON OF RIGHTS OF STOCKHOLDERS OF THE COMPANY AND SHAREHOLDERS OF THE
TRUST
GENERAL
The rights of stockholders of the Company are currently governed by the
Company's Articles of Incorporation and By-laws and by the MGCL. If the Plan
of Reorganization is approved by the Company's stockholders and the Merger is
consummated, the Trust will be the surviving entity in the Merger, the
separate existence of the Company will terminate, each outstanding share of
Company Common Stock will be converted into one Trust Share; each outstanding
share of Class B Common Stock of the Company will be converted into one Class
B Common Share of the Trust; and the rights of the shareholders of the Trust
will be governed by the Trust's organizational documents, the Declaration of
Trust and the Trust By-laws, and by Title 8.
As a Maryland corporation, the Company is subject to the MGCL, a general
corporation statute which addresses a wide variety of corporate governance
matters. As a Maryland real estate investment trust, the Trust is subject to
Title 8, the statute governing Maryland real estate investment trusts. While
Title 8 covers some of the matters addressed in the MGCL, there are many
matters covered by the MGCL which are not addressed in Title 8. Accordingly,
it is the general practice for Maryland real estate investment trusts to
address a number of the matters covered by the MGCL but not covered by Title
8 through provisions in the declaration of trust and by-laws, the
organizational documents of a trust analogous to a corporation's articles of
incorporation and by-laws. The Declaration of Trust and Trust By-laws are
intended to afford holders of Trust Shares rights substantially similar to
the rights of the Company's stockholders, although the reorganization of the
Company from a corporation to a real estate investment trust will result in
certain material differences in such rights. See "--Amendment of
Constitutional Documents" and "The Plan of Reorganization--Limitation of
Liability of Shareholders;" and "--Limitation of Liability and
Indemnification of Directors and Trustees."
The following discussion compares certain of the existing rights of
stockholders of the Company with those of shareholders of the Trust. Such
discussion is qualified in its entirety by reference to the MGCL and Title 8,
and also to the Articles of Incorporation and By-laws of the Company and the
Declaration of Trust and the Trust By-laws. See "Available Information."
BOARD OF DIRECTORS AND BOARD OF TRUSTEES
The Articles of Incorporation provide that the number of directors of
the Company may be established by the Board of Directors but may not be fewer
than three nor more than ten, and, pursuant to the Company By-laws, a
majority of the Board of Directors must be independent. Under the Articles
of
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Incorporation, the stockholders of the Company elect all of the members of
the Board of Directors at the annual meeting of stockholders.
The Declaration of Trust provides that the number of trustees of the
Trust may be established by the Board of Trustees but may not be fewer than
three nor more than ten, and, pursuant to the Trust By-laws, a majority of
the Board of Trustees must be independent. Under the Declaration of Trust,
the shareholders of the Trust elect the members of the Board of Trustees at
the annual meeting of shareholders.
Any vacancy on the Board of Directors or Trustees will be filled at any
regular meeting or at any special meeting of shareholders called for that
purpose or by a majority of the remaining directors or trustees,
respectively, except that a vacancy resulting from an increase in the number
of directors or trustees, respectively, will be filled by a majority of the
entire Board. Neither holders of Company Common Stock nor holders of Trust
Shares will have any right to cumulative voting in the election of directors
or trustees, respectively. See "The Plan of Reorganization--Limitation of
Liability and Indemnification of Directors and Trustees."
REMOVAL OF DIRECTORS AND TRUSTEES
Pursuant to the MGCL and the Company's By-laws, the holders of a
majority of the outstanding shares of Company Common Stock entitled to vote
on the matter may remove a director, with or without cause. Similarly,
pursuant to Title 8 and the Trust By-laws, the holders of a majority of the
outstanding Trust Shares entitled to vote on the matter may remove a trustee,
with or without cause.
DIVIDENDS
Under the MGCL, holders of Company Common Stock are entitled to receive
dividends as and when declared by the Board of Directors, except that no
distribution may be made if, after giving effect to such distribution, the
Company would not be able to pay its indebtedness as it becomes due or the
Company's total assets would be less than the sum of its liabilities plus the
amount that would be needed to satisfy preferential rights of the
stockholders whose preferential rights on dissolution are superior. Title 8
contains no limitations on the payment of dividends or other distributions by
the Trust.
PREFERRED STOCK
The MGCL and the Company's Articles of Incorporation provide that shares
of preferred stock may be issued from time to time in one or more series as
authorized by the Board of Directors. Similarly, Title 8 and the Trust's
Declaration of Trust provide that preferred shares of beneficial interest may
be issued from time to time in one or more series as authorized by the Board
of Trustees. Neither the Company nor the Trust has issued any preferred
shares. See "Description of Shares of Beneficial Interest in the
Trust--Preferred Shares."
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STOCKHOLDER ACTION WITHOUT A MEETING
Pursuant to the MGCL and the Company's By-laws, the stockholders of the
Company may take any action without a meeting by consent in writing signed by
all of the stockholders entitled to vote on the matter and any stockholder
entitled to notice of a meeting of the stockholders (but not to vote thereat)
has waived any right to dissent from such action. Pursuant to the Trust
By-laws, the shareholders of the Trust may take any action without a meeting
by consent in writing signed by all of the shareholders entitled to vote on
the matter and any shareholder entitled to notice of a meeting of the
shareholders (but not to vote thereat) has waived any right to dissent from
such action.
DIRECTOR/TRUSTEE ACTION WITHOUT A MEETING
Pursuant to the MGCL and the Company's By-laws, the directors of the
Company may take any action without a meeting by consent in writing signed by
all of the directors. Similarly, pursuant to the Trust By-laws, the trustees
of the Trust may take any action without a meeting by consent in writing
signed by all of the trustees.
AMENDMENT OF CONSTITUTIONAL DOCUMENTS
An amendment to the Articles of Incorporation requires approval of a
majority of the Board of Directors and the affirmative vote of two thirds of
the outstanding shares of Company Common Stock entitled to vote on the
matter. An amendment to the By-laws of the Company requires the approval of
a majority of the Board of Directors, and any by-law adopted by the
stockholders may be altered, amended or repealed by a majority of the
directors.
The Declaration of Trust and the Trust By-laws address many of the
matters covered by the MGCL which are not addressed in Title 8. However,
unlike an amendment to the MGCL which must be approved by the legislature of
the State of Maryland, the Trust's Declaration of Trust may be amended by the
vote of a majority of the Board of Trustees and the vote of two-thirds of
shareholders entitled to be cast on the matter (provided the trustees may
amend the Declaration of Trust by a two-thirds vote to enable the Trust to
qualify as a real state investment trust under the Internal Revenue Code or
under Title 8), and the Trust By-laws may be amended by the vote of a
majority of the Board of Trustees, subject to repeal or change of such
amendment by the vote of a majority of the shareholders of the Trust entitled
to vote thereon.
MERGER, CONSOLIDATION OR SALE OF SUBSTANTIALLY ALL OF THE ASSETS
The MGCL provides that the Company's Board of Directors must approve a
consolidation, merger, share exchange or transfer by the Company of
substantially all of its assets, and that the holders of two-thirds of the
outstanding shares of Company Common Stock entitled to vote on the matter
must thereafter approve the transaction. Title 8 provides that a merger of
the Trust into another trust, corporation, limited partnership or limited
liability company must be approved by the Board of Trustees and the holders
of two-thirds of the outstanding Trust Shares entitled to vote on the matter.
Under the Declaration of Trust, the consolidation or sale of substantially
all of the Trust's assets requires the approval of the holders of two-thirds
of the outstanding Trust Shares entitled to vote thereon.
SHAREHOLDERS' RIGHTS TO CALL A SPECIAL MEETING
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Pursuant to the Company By-laws and the Trust By-laws, the holders of
not less than 25% of the outstanding shares of Company Common Stock or Trust
Shares, respectively, entitled to vote on the matter may call a special
meeting of shareholders.
SHARE OWNERSHIP LIMIT
Pursuant to the Articles of Incorporation of the Company and the
Declaration of Trust of the Trust, no holder may own more than 9.8% in value
of the outstanding Company Common Stock or Trust Shares, respectively,
subject to certain exceptions. See "Description of Shares of Beneficial
Interest in the Trust--Limitations on Ownership."
DISSOLUTION
Pursuant to the MGCL, the dissolution of the Company must be approved by
the affirmative vote of the holders of not less than two-thirds of the shares
of Company Common Stock entitled to vote on the matter. Under the
Declaration of Trust, the dissolution or termination of the Trust must be
approved by the affirmative vote of the holders of not less than two-thirds
of the Trust Shares entitled to vote on the matter.
ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND NEW BUSINESS
Both the Company's By-laws and the Trust's Declaration of Trust
establish an advance notice procedure for holders of Company Common Stock and
Trust Shares, respectively, to make nominations of candidates for election as
directors or trustees, respectively, or bring other business before an annual
meeting of shareholders ("Shareholder Notice Procedures").
The Shareholder Notice Procedures provide that (1) only persons who are
nominated by or at the direction of the Board of Directors or Trustees,
respectively, or by a shareholder who has given timely written notice
containing specified information to the Secretary of the Company or Trust,
respectively, prior to the meeting at which directors or trustees,
respectively, are to be elected, will be eligible for election as directors
or trustees, respectively, and (2) at an annual meeting only such business
may be conducted as has been brought before the meeting by or at the
direction of the Board of Directors or Trustees, respectively, or by a
shareholder who has given timely written notice to the Secretary of such
shareholder's intention to bring such business before the meeting. In
general, to be considered timely, notice of shareholder nominations to be
made or business to be conducted at an annual meeting must be received not
less than 60 days nor more than 90 days prior to the date set by the Board of
Directors or Trustees, respectively, for such meeting.
The purpose of requiring such advance notice by shareholders is to
provide the Board of Directors or Trustees, as the case may be, a meaningful
opportunity to consider the qualifications of the proposed nominees or the
advisability of the other proposed business and, to the extent deemed
necessary or advisable by the Board of Directors or Trustees, respectively,
to inform shareholders and make recommendations about such qualifications or
business, as well as to provide a more orderly procedure for conducting
meetings of shareholders. Although neither the Company's By-laws nor the
Trust's Declaration of Trust give the Board of Directors or Trustees,
respectively, any power to disapprove of shareholder nominations or proposals
for action, they may have the effect of precluding a contest for the election
of directors or trustees, respectively, or the consideration of shareholder
proposals if the proper procedures are not followed. In addition, the
Company's By-laws and the Trust's Declaration of Trust may discourage or
deter a third party from conducting a solicitation of proxies to
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elect its own slate of directors or trustees, respectively, or to approve its
own proposal, without regard to whether consideration of such nominees or
proposals might be harmful to or in the best interests of the Company or the
Trust, respectively, and its shareholders. The provisions in the Company's
By-laws and the Trust's Declaration of Trust regarding advance notice
provisions could have the effect of discouraging a takeover or other
transaction in which holders of some, or a majority, of the Company Common
Stock or Trust Shares, respectively, might receive a premium for their shares
over the then prevailing market price or which such holders might believe to
be otherwise in their best interests.
RESTRICTIONS ON INVESTMENT AND USE OF ASSETS
Title 8 provides that the Trust must hold at least 75% of the value of
its assets in real estate assets, government securities, cash and cash items
and may not use or apply land for farming, agriculture, horticulture or
similar purposes. The MGCL does not provide any comparable restrictions on
use of assets. See "The Plan of Reorganization--Certain Tax Consequences of
the Plan of Reorganization."
LIMITATION OF LIABILITY OF SHAREHOLDERS
Stockholders of a corporation, such as the holders of the Company Common
Stock and Class B Common Stock, are generally not personally liable for the
debts and obligations of the corporation. The Declaration of Trust similarly
provides that no shareholder of the Trust shall be liable for any debt,
claim, demand, judgment or obligation of any kind of, against or with respect
to the Trust by reason of his being a shareholder and that no shareholder
shall be subject to any person liability whatsoever to any person in
connection with property of the Trust or the affairs of the Trust. In
addition, shareholders of the Trust are expressly granted limited liability
protection under the laws of the States of Maryland, where the Trust is
organized, and Illinois, where most of the Trust's properties will be
located, as well as certain other states. Under Maryland law, shareholders of
the Trust will not be held liable for the debts and obligations of the Trust
in the State of Maryland except (i) for actual receipt of an improper
personal benefit in money, property or services or (ii) for active and
deliberate dishonesty established by a final judgment as being material to
the cause of action. Under Illinois law, the shareholders or beneficiaries
of a real estate investment trust are not personally liable for the
obligations of the real estate investment trust.
Because not all states have statutes that recognize the legal existence
of business trusts and expressly acknowledge the limited liability of such
entities' shareholders, it will be the Trust's policy, as provided in the
Declaration of Trust, to include in written agreements to which the Trust
becomes a party after the effective date of the Merger a provision that
shareholders assume no personal liability for obligations entered into on
behalf of the Trust. However, with respect to tort claims, contractual
claims where shareholder liability is not so negated (including certain
existing contractual obligations of the Company assumed by the Trust as a
consequence of the Merger), claims for taxes and certain statutory liability,
a shareholder of the Trust may, in some jurisdictions, be personally liable
to the extent that such claims are not satisfied by the Trust. Inasmuch as
the Trust will carry public liability insurance which it considers adequate,
any risk of personal liability to shareholders would be limited to situations
in which the Trust's assets together with its insurance coverage would be
insufficient to satisfy the claims against the Trust and its shareholders.
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LIMITATION OF LIABILITY AND INDEMNIFICATION OF DIRECTORS AND TRUSTEES
The Company's Articles of Incorporation state that no officer or director
of the Company shall be liable to the Company or its stockholders for money
damages to the maximum extent permitted by the MGCL. Similarly, the Declaration
of Trust provides that, to the maximum extent permitted by Maryland law from
time to time, no trustee or officer of the Trust shall be held liable to the
Trust or any shareholder thereof for monetary damages. The Declaration of Trust
also provides the trustees and officers of the Trust with limited liability in
the absence of any Maryland statute limiting their liability for money damages
in a suit by or on behalf of the Trust or by any shareholder thereof, except if
(i) the trustee or officer actually received an improper benefit or profit in
money, property or services, for the amount of the benefit actually received or
(ii) a judgment or other final adjudication adverse to the trustee or officer is
entered in a proceeding based on a finding in the proceeding that the trustee's
or officer'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 MGCL permits the charter of a Maryland corporation to expand or limit
the liability of the corporation's directors and officers, except to the extent
that (i) a director or officer actually receives an improper benefit or profit
in money, property or services or (ii) a judgment or other final adjudication
adverse to the director or officer is entered in a proceeding based on a finding
that the director's or officer'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. Similarly, Title 8, by reference to the Maryland
Courts and Judicial Proceedings Article, permits the declaration of trust of a
Maryland real estate investment trust to expand or limit the liability of its
trustees and officers, except to the extent that (x) the trustee or officer
actually receives an improper personal benefit in money, property or services or
(y) a judgment or other final adjudication adverse to the trustee or officer is
entered in a proceeding based on a finding that such 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. However, the Maryland Courts
and Judicial Proceedings Article also provides that, although trustees and
officers of a Maryland real estate investment trust are not personally liable
for the obligations of the trust, trustees are not relieved from liability for
any act that constitutes (a) bad faith, (b) willful misfeasance, (c) gross
negligence or (d) reckless disregard of the trustee's duties.
The Company's Articles of Incorporation and By-laws authorize the Company
to indemnify its present and former directors and officers and to pay or
reimburse expenses for such individuals in advance of the final disposition of a
proceeding to the maximum extent permitted by Maryland law. Similarly, the
Declaration of Trust and By-laws of the Trust authorize the Trust, to the
maximum extent permitted from time to time by Maryland law, to indemnify its
present and former trustees and officers and to pay or reimburse expenses for
such individuals in advance of the final disposition of a proceeding. Also,
both the Company's Articles of Incorporation and the Trust's Declaration of
Trust permit the Company and the Trust, respectively, to indemnify any
individual who, while a director of the Company, or a trustee of the Trust,
respectively, and at the request of the Company or the Trust, respectively,
serves or has served another corporation, trust, partnership, joint venture,
employee benefit plan or any other enterprise as a director, officer, partner or
trustee thereof. Furthermore, each of the Company's By-laws and the Trust's By-
laws specify that all persons entitled to indemnification by the Company or the
Trust, respectively, for expenses, judgments, fines and amounts paid in
settlement actually and reasonably incurred by them in connection with any
action, suit or proceeding must have acted in good faith and in a manner they
reasonably believed to be in or not opposed to the best interests of the Company
or the Trust, respectively, and, with respect to any criminal action or
proceeding, must have had no reasonable cause to believe their conduct was
unlawful.
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In addition, the By-laws of both the Company and the Trust By-laws
authorize the Company and the Trust, respectively, in certain circumstances, to
indemnify any party to an action or suit by or in the right of the Company or
the Trust, respectively, by reason of the fact that such person is or was a
director, officer, employee or agent of the Company, or a director, officer,
employee or agent of the Trust, respectively, or is or was serving at the
request of the Company or the Trust. respectively, as a director, trustee,
officer, employee or agent of another enterprise against expenses actually and
reasonably incurred by such person in connection with the defense or settlement
of such action or suit if such person acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Company
or the Trust, respectively, provided that no indemnification will be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable for negligence or misconduct in the performance of his
duties to the Company or the Trust, respectively, subject to certain exceptions.
Pursuant to each of the MGCL and Title 8, a Maryland corporation or real
estate investment trust, respectively, may indemnify its directors or trustees,
respectively, and officers in respect of any proceeding, except to the extent
that any director or trustee, respectively, or officer actually received an
improper benefit, whether or not involving action in his official capacity, in
which the director or trustee, respectively, or officer was adjudged to be
liable on the basis that personal benefit was improperly received. Each of the
MGCL and Title 8 permit a corporation or a real estate investment trust,
respectively, to indemnify its directors or trustees, respectively, and officers
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 to or at the request of the corporation
or trust, respectively, unless it is established that the act or omission of the
indemnified party was material to the matter giving rise to the proceeding and
(i) the act or omission was committed in bad faith or was the result of active
and deliberate dishonesty, (ii) the indemnified party actually received an
improper personal benefit or (iii) in the case of any criminal proceeding, the
indemnified party had reasonable cause to believe that the act or omission was
unlawful.
It is the position of the Securities and Exchange Commission that
indemnification of directors or trustees, as the case may be, and officers for
liabilities arising under the Securities Act is against public policy and is
unenforceable pursuant to Section 14 of the Securities Act.
CERTAIN PROVISIONS OF MARYLAND LAW
The following paragraphs summarize certain provisions of Maryland law
material to the rights of the Trust's shareholders. The following provisions
apply to both the Trust and the Company and, in the event of the consummation of
the Merger pursuant to the Plan of Reorganization, the rights of the Company's
stockholders as holders of Trust Shares under these provisions will remain the
same. The summary does not purport to be complete and is subject to and
qualified in its entirety by reference to Maryland law.
BUSINESS COMBINATIONS
As a Maryland real estate investment trust, the Trust is subject to certain
restrictions concerning certain "business combinations" (including a merger,
consolidation, share exchange, or, in certain circumstances, an asset transfer
or issuance or reclassification of equity securities) between the Trust and an
Interested Shareholder (defined as any person who beneficially owns 10% or more
of the voting power of the shares of beneficial interest in the Trust or an
affiliate of the Trust who, at any time within
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the two-year period prior to the date in question, was the beneficial owner
of 10% or more of the voting power of the then-outstanding voting shares of
beneficial interest in the Trust) or an affiliate thereof. Such business
combinations are prohibited for five years after the most recent date on
which the Interested Shareholder became an Interested Shareholder.
Thereafter, any such business combination must be recommended by the Board of
Trustees of the Trust and approved by the affirmative vote of at least 80% of
the votes entitled to be cast by holders of outstanding voting shares of
beneficial interest in the Trust voting together as a single group and of at
least two-thirds of the votes entitled to be cast by holders of voting shares
of beneficial interest in the Trust other than holders of such shares with
whom the business combination is to be effected, unless, among other things,
the holders of shares of beneficial interest in the Trust receive a "minimum
price" (as determined under Maryland law) for their shares and the
consideration is received in cash or in the same form as previously paid by
the Interested Stockholder for his or its shares. These provisions of
Maryland law do not apply, however, to business combinations that are
approved or exempted by the Board of Trustees of the Trust prior to the time
that the Interested Stockholder becomes an Interested Stockholder.
CONTROL SHARE ACQUISITIONS
Maryland law provides that "control shares" of a Maryland real estate
investment trust acquired in a "control share acquisition" have no voting
rights except to the extent approved by a vote of the holders of two-thirds
of the shares entitled to vote on the matter, excluding shares of beneficial
interest owned by the acquirer or by officers or trustees who are employees
of the trust. "Control shares" are voting shares which, if aggregated with
all other such shares previously acquired by such person, or in respect of
which such person is able to exercise or direct the exercise of voting power,
except solely by virtue of a revocable proxy, would entitle the acquirer,
directly or indirectly, to exercise voting power in electing trustees within
any one of the following ranges of voting power: (i) one-fifth or more but
less than one-third; (ii) one-third or more but less than a majority; or
(iii) a majority of all voting power. Control shares do not include shares
the acquiring person is then entitled to vote as a result of having
previously obtained shareholder approval. A "control share acquisition" means
the acquisition of control shares, subject to certain exceptions.
A person who has made or proposes to make a control share acquisition,
upon satisfaction of certain conditions (including an undertaking to pay
expenses), may compel the Board of Trustees to call a special meeting of
shareholders of the Trust to be held within 50 days of the demand to consider
the voting rights of the shares. If no request for a meeting is made, the
Trust may itself present the question at any meeting of shareholders of the
Trust.
If voting rights are not approved at the meeting or if the acquiring
person does not deliver an acquiring person statement as required by Maryland
law, then, subject to certain conditions and limitations, the Trust may
redeem any or all of the control shares (except those for which voting rights
have previously been approved) for fair value, determined without regard to
the absence of voting rights for control shares, as of the date of the last
control share acquisition or of any meeting of shareholders of the Trust at
which the voting rights of such shares are considered and not approved. If
voting rights for control shares are approved at a meeting of shareholders of
the Trust and the acquirer becomes entitled to vote a majority of the shares
entitled to vote, all other shareholders of the Trust may exercise appraisal
rights. The fair value of the shares determined for purposes of such
appraisal rights may not be less than the highest price per share paid in the
control share acquisition, and certain limitations and restrictions otherwise
applicable to the exercise of dissenter's rights do not apply in the context
of a control share acquisition.
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The control share acquisition provisions of Maryland law do not apply to
shares acquired in a merger, consolidation or share exchange if the Trust is
a party to the transaction, or to acquisitions which may be approved of or
exempted by the Declaration of Trust or By-laws of the Trust. No such
provisions are currently contained in the Trust's Declaration of Trust or
By-laws. There can be no assurance, however, that such provisions will not
be provided for in the future.
REGULATORY REQUIREMENTS
Neither the Company nor the Trust is aware of any Federal, state or
local regulatory requirements that must be complied with or approvals that
must be obtained prior to consummation of the Merger pursuant to the Plan of
Reorganization, other than compliance with applicable Federal and state
securities laws and the filing of the articles of merger as required under
the MGCL and Title 8.
ACCOUNTING TREATMENT
The accounting for the merger of the Trust into its parent, the Company,
will be accounted for as a transfer or exchange between enterprises under
common control. Therefore, the assets and liabilities so transferred will be
accounted for at historical cost in a manner similar to that in
pooling-of-interests accounting.
CERTAIN TAX CONSEQUENCES OF THE PLAN OF REORGANIZATION
FEDERAL INCOME TAXES
Ungaretti & Harris, as independent tax counsel to the Company and the
Trust, has delivered to the Company the Tax Opinion to the effect that the
Merger will be an "F reorganization" within the meaning of the Code. As a
consequence of such treatment, no gain or loss will be recognized by the
Company, the Trust or the stockholders in connection with the exchange of
shares of stock in the Company for shares of beneficial interest in the
Trust. Stockholders will receive shares of beneficial interest in the Trust
with the same basis and holding period for Federal income tax purposes as the
shares of stock surrendered in the exchange. The Trust will succeed to the
basis and holding period of the Company with respect to assets the Trust
receives in the Merger. The Tax Opinion also concludes that the Merger will
not adversely affect the Company's continued qualification as a REIT. For
Federal income tax reporting purposes, the Trust will be considered the same
entity as the Company.
STATE TAXES
Each stockholder is encouraged to consult with his or her own tax
advisor to determine the tax consequences, if any, that may result from the
Merger under the laws of any state having tax jurisdiction over such
stockholder.
STOCK CERTIFICATES AND DEBENTURE CERTIFICATES
At the effective date of the Merger, each certificate representing
shares of Company Common Stock will be deemed for all purposes to evidence
the same number of Trust Shares; each certificate representing shares of
Class B Common Stock of the Company will be deemed for all purposes to
evidence the same number of Class B Common Shares of the Trust; and each
certificate representing the outstanding principal amount of Company
Debentures will be deemed for all purposes to evidence the same principal
amount of Trust Debentures. Holders of Company Common Stock, Class B Common
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Stock or Company Debentures will not be required to exchange their
certificates for certificates representing Trust Shares, Class B Common
Shares or Trust Debentures, as the case may be, into which their securities
will be converted upon consummation of the Merger.
DESCRIPTION OF SHARES OF BENEFICIAL INTEREST IN THE TRUST
The following is a summary of the terms of the shares of beneficial
interest in the Trust. This summary does not purport to be complete and is
subject to and qualified in its entirety by reference to the Declaration of
Trust and Trust By-laws. See "Available Information."
GENERAL
The Declaration of Trust authorizes the issuance of up to 60,000,000
shares of beneficial interest in the Trust, of which 47,727,273 are common
shares, par value $.001 per share ("Trust Shares"), 2,272,727 are Class B
Common Shares, par value $.001 per share ("Class B Trust Shares"), and
10,000,000 are shares of Series Preferred Shares, par value $.001 per share
("Trust Preferred Shares"). Upon the consummation of the Merger, each
outstanding share of Company Common Stock will be converted into one Trust
Share, and each outstanding share of Class B Common Stock of the Company will
be converted into one Class B Trust Share.
TRUST SHARES
Holders of Trust Shares are entitled to receive dividends when and as
declared by the Board of Trustees out of funds legally available therefor
after payment of any preferential dividends to the holders of any series of
Trust Preferred Shares that may then be issued and outstanding. Upon any
liquidation, dissolution or winding up of the Trust, holders of Trust Shares
are entitled to receive ratably any assets remaining after payment in full of
all liabilities of the Trust and any preferential payments to the holders of
Trust Preferred Shares. The holders of Trust Shares are entitled to one vote
per share on all matters voted on by shareholders, including elections of
directors, and, except as otherwise required by law with respect to class
voting rights, or as granted to the holders of Class B Trust Shares, or
provided in any resolution adopted by the Board of Trustees with respect to
any series of Trust Preferred Shares establishing the powers, designations,
preferences and relative, participating, optional or other special rights of
such series, the holders of Trust Shares possess all voting powers. Holders
of Trust Shares do not possess preemptive rights to subscribe for additional
securities of the Trust or the right to cumulate their shares in the election
of trustees or in any other matter. All Trust Shares offered by the Trust
will be, and all issued and outstanding Trust Shares are, fully paid and
non-assessable. See "The Plan of Reorganization--Comparison of Rights of
Stockholders of the Company and Shareholders of the Trust."
The transfer agent and registrar for the Trust Shares is First Chicago
Trust Company of New York, Jersey City, New Jersey.
CLASS B TRUST SHARES
DIVIDENDS
Holders of Class B Trust Shares are entitled to receive, when and as
declared by the Board of Trustees, out of funds legally available therefor,
dividends PARI PASSU with any dividends paid on the Trust Shares, in an
amount per share equal to the Class B Trust Shares Common Dividend Amount as
in effect from time to time. Each calendar quarter is referred to as a
"Dividend Period." The amount of
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dividends payable with respect to each full Dividend Period is computed by
dividing the Class B Trust Shares Common Dividend Amount by four. The amount
of dividends on the Class B Trust Shares with respect to any Dividend Period
shorter or longer than a full Dividend Period is computed ratably on the
basis of the actual number of days in such Dividend Period. The initial
Class B Trust Shares Dividend Amount is $1.7268. Upon a change in the
quarterly cash dividend per share applicable to the Trust Shares, the
quarterly cash dividend per share of the Class B Trust Shares is adjusted for
the same Dividend Period by an amount computed by multiplying the amount of
the change in the Trust Shares dividend by the Conversion Ratio (as defined
below).
In the event that the Trust declares a distribution payable in (i)
securities of other persons, (ii) evidences of indebtedness issued by the
Trust or other persons, (iii) assets (excluding cash dividends) or (iv)
options or rights to purchase shares of beneficial interest or evidences of
indebtedness in the Trust or other persons, then the holders of Class B Trust
Shares will be entitled to a proportionate share of any such distribution as
though they were the holders of the number of Trust Shares into which their
Class B Trust Shares are or would be convertible (assuming such Class B Trust
Shares were then convertible) as of the record date fixed for determination
of the holders of Trust Shares entitled to receive such distribution.
LIQUIDATION RIGHTS
Subject to any prior rights of any other class or series of shares of
beneficial interest in the Trust, the holders of the Class B Trust Shares
will be entitled to receive the remaining assets of the Trust available for
distribution pro rata with the holders of Trust Shares as though they were
the holders of the number of Trust Shares into which their Class B Trust
Shares are or would be convertible (assuming such Class B Trust Shares were
then convertible) as of the record date applicable to such distribution.
Neither a consolidation or merger of the Trust with or into any other
entity, nor a merger of any other entity into the Trust, nor the purchase or
redemption of all or part of the outstanding shares of any class or classes
of shares of beneficial interest in the Trust, nor a sale or transfer of all
or any part of the Trust's assets, will be considered a liquidation,
dissolution or winding up of the Trust.
VOTING RIGHTS
The holders of Class B Trust Shares are not entitled to vote on any
matter on which the holders of Trust Shares are entitled to vote, except that
the holders of a majority of the Class B Trust Shares, voting as a separate
class, must approve (i) any material adverse change in the rights,
preferences or privileges of the Class B Trust Shares and (ii) any creation
of a new class of stock having rights, preferences or privileges senior to or
on a parity with the preferences or privileges of the Class B Trust Shares.
CONVERSION RIGHTS
Beginning on September 30, 1998, and at the end of each calendar quarter
thereafter, the number of Class B Trust Shares will mandatorily convert into
such number of Trust Shares as will result in the holders of the Class B
Trust Shares owning, in the aggregate, 4.9% of the then outstanding Trust
Shares; and if on any such date the total number of outstanding Class B Trust
Shares would not, upon conversion, result in the holders thereof owning, in
the aggregate, 4.9% of the then outstanding Trust Shares, then all such
outstanding Class B Trust Shares will mandatorily convert into Trust Shares.
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On May 22, 2006, each remaining Class B Trust Share which has not been
converted to Trust Shares will mandatorily convert to that number of
non-assessable Trust Shares equal to the Conversion Ratio, as adjusted,
regardless of the 4.9% limitation.
Beginning on September 21, 1998, the holders of Class B Trust Shares will
have the right, at their option, to convert each such Class B Trust Share, at
any time and from time to time, into one fully paid and non-assessable Trust
Share (the "Conversion Ratio," which is subject to adjustment as provided
below); PROVIDED, HOWEVER, that no holder of Class B Trust Shares will be
entitled to convert such Class B Trust Shares into Trust Shares pursuant to the
foregoing provision if, as a result of such conversion, such person would become
the Beneficial Owner of more than 4.9% of the outstanding Trust Shares.
"Beneficial Owner" has the meaning set forth in Rule 13d-3 under the Exchange
Act (or any successor provision thereto). Notwithstanding the foregoing, the
conversion right described above may be exercised at any time and irrespective
of the 4.9% limitation (and no such limit will apply) if any of the following
circumstances occurs:
(i) For any two consecutive fiscal quarters, the aggregate amount
outstanding as of the end of the quarter under (A) all mortgage
indebtedness of the Trust and its consolidated entities and (B) unsecured
indebtedness of the Trust and its consolidated entities for money borrowed
that has not been made generally subordinate to the other indebtedness for
borrowed money of the Trust or any consolidated entity exceeds 55% of the
Trust's total market capitalization, defined as the market value of all of
the Trust's outstanding shares of beneficial interest, assuming the
conversion of all outstanding convertible securities, including the Class B
Trust Shares, plus the amount of the Trust's total non-convertible
indebtedness; or
(ii) Fewer than three of John S. Gates, Jr., Robert M. Stovall,
Michael M. Mullen and Paul S. Fisher are continuing as Key Managers of the
Trust. (For purposes of this subparagraph (ii), a "Key Manager" means a
person who (A) is employed by the Trust and (B) actively participates as a
senior executive officer in the management of the Trust); or
(iii) If (A) the Trust is party to, or has announced or entered
into an agreement for, any transaction (including, without limitation, a
merger, consolidation, statutory share exchange or sale of all or
substantially all of its assets (each of the foregoing a "Transaction")),
in each case as a result of which Trust Shares have been or will be
converted into the right to receive stock, securities or other property
(including cash or any combination thereof) or which has resulted or will
result in the holders of Trust Shares immediately prior to the Transaction
owning less than 50% of the Trust Shares after the Transaction, or (B) a
"Change of Control" as defined in the next sentence occurs with respect to
the Trust. "Change of Control" means the acquisition (including by virtue
of a merger, share exchange or other business combination) by one
shareholder or a group of shareholders acting in concert of the power to
elect a majority of the Trust's Board of Trustees.
No fractional shares will be issued upon conversion of the Class B Trust
Shares into Trust Shares, and the number of Trust Shares to be issued will be
rounded to the nearest whole share.
The Conversion Ratio is subject to adjustment as follows:
(i) In the event that the Trust at any time (A) pays a dividend or
make a distribution to holders of Trust Shares in Trust Shares, (B)
subdivides its outstanding Trust Shares into a larger number of shares, (C)
combines its outstanding Trust Shares into a smaller number of
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shares, or (D) issues by reclassification of its Trust Shares any shares
of beneficial interest in the Trust, the Conversion Ratio in effect
immediately prior thereto will be adjusted as provided below so that the
holder of any Class B Trust Shares thereafter surrendered for conversion
will be entitled to receive the number of Trust Shares which such holder
would have owned or have been entitled to receive after the happening of
any of the events described above, had such Class B Trust Shares been
converted immediately prior to the happening of such event. Any
adjustment made pursuant to this subparagraph (i) will become effective
retroactively immediately after the record date in the case of a dividend
and will become effective immediately after the effective date in the
case of a subdivision, combination or reclassification.
(ii) In case the Trust issues rights or warrants to all holders of
Trust Shares entitling them to subscribe for or purchase Trust Shares at a
price per share less than the current market price (as hereinafter defined)
per share of Trust Shares at the record date mentioned below, the number of
Trust Shares into which each Class B Trust Share will thereafter be
convertible will be determined by multiplying the number of Trust Shares
into which such Class B Trust Share was theretofore convertible by a
fraction, of which the numerator will be the number of Trust Shares
outstanding on the date of issuance of such rights or warrants plus the
number of additional Trust Shares offered for subscription or purchase, and
of which the denominator will be the number of Trust Shares outstanding on
the date of issuance of such rights or warrants plus the number of Shares
which the aggregate offering price of the total number of Shares so offered
would purchase at such current market price. Such adjustment will be made
whenever such rights or warrants are issued, and will become effective
retroactively immediately after the record date for the determination of
shareholders entitled to receive such rights or warrants.
(iii) In case the Trust distributes to all holders of Trust Shares
evidences of its indebtedness or assets or rights or warrants to subscribe
for or purchase securities issued by the Trust or property of the Trust
(excluding those referred to in subparagraph (ii) above), then in each such
case the number of Trust Shares into which each Class B Trust Share will
thereafter be convertible will be determined by multiplying the number of
Trust Shares into which such Class B Trust Share was theretofore
convertible by a fraction, of which the numerator will be the current
market price per share of the Trust Shares, and of which the denominator
will be such current market price per share of Trust Shares, less the then
fair market value (as determined by the Board of Trustees of the Trust,
whose determination will be conclusive) of the portion of the assets or
evidence of indebtedness so distributed or of such rights or warrants
applicable to one share of the Trust Shares. Such adjustment will be made
whenever any such distribution is made, and will become effective
retroactively immediately after the record date for the determination of
shareholders entitled to receive such distribution.
(iv) If any such rights or warrants referred to above expires without
having been exercised, the Conversion Ratio as theretofore adjusted because
of the issue of such rights or warrants will forthwith be readjusted to the
Conversion Ratio which would have been in effect had an adjustment been
made on the basis that only the rights or warrants to issued or sold were
those rights or warrants actually exercised and that with respect to any
such rights or warrants to subscribe for or purchase securities issued by
the Trust, other than Trust Shares or property of the Trust, the fair
market value thereof will be the fair market value of the rights or
warrants actually exercised or warrants actually exercised.
For the purpose of any computation under these paragraphs (i)-(iv), the
current market price per Trust Share at any date will be deemed to be the
average of the daily closing prices for the 15
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consecutive business days commencing 30 business days before the day in
question. The closing price for each day will be the last reported sale
price regular way or, in the case no such reported sale takes place on such
day, the average of the reported closing bid and asked prices regular way, in
either case on the NYSE, or, if the Trust Shares are not listed or admitted
to trading on the NYSE, on any national securities exchange, designated by
the Board of Trustees, on which the Trust Shares are listed or admitted to
trading, or if not listed or admitted to trading on any national securities
exchange, the average of the closing bid and asked prices as furnished by any
NYSE firm selected from time to time by the Trust for such purpose.
No adjustment of the Conversion Ratio will be made as a result of or in
connection with the issuance of Trust Shares pursuant to options or share
purchase agreements now or hereafter granted or entered into with trustees,
officers or employees of the Trust 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:
(i) any capital reorganization of the Trust, or
(ii) the consolidation or merger of the Trust with or into another
entity, or
(iii) a statutory share exchange whereby the Trust Shares are
converted into property other than cash, or
(iv) the sale, transfer or other disposition of all or substantially
all of the property, assets or business of the Trust as a result of which
sale, transfer or other disposition property other than cash will be
payable or distributable to the holders of the Trust Shares,
then, in each such case, each Class B Trust Share will thereafter be
convertible into the number and class of shares or other securities or
property of the Trust, or of the entity resulting from such consolidation or
merger or with or to which such statutory share exchange, sale, transfer or
other disposition has been made, to which the Trust Shares otherwise issuable
upon conversion of such Class B Trust Share would have been entitled upon
such reorganization, consolidation, merger, statutory share exchange, or
sale, transfer or other disposition if outstanding at the time thereof; and
in any such case appropriate adjustment, as determined by the Board of
Trustees, will be made in the application of the provisions set forth in the
foregoing paragraph with respect to the conversion rights thereafter of the
holders of the Class B Trust Shares, to the end that such provisions will
thereafter be applicable, as nearly as reasonably may be, in relation to any
shares or securities or other property thereafter issuable or deliverable
upon the conversion of Class B Trust Shares. Proper provision will be made as
a part of the terms of any such reorganization, consolidation, merger,
statutory share exchange or sale, transfer or other disposition whereby the
conversion rights of the holders of Class B Trust Shares will be protected
and preserved in accordance with the provisions of this paragraph. The
provisions of this paragraph will similarly apply to successive capital
reorganizations, consolidations, mergers, statutory share exchanges, sales,
transfers or other dispositions of property as aforesaid.
Upon conversion of any Class B Trust Shares, no payment or adjustment
will 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
Trust Shares of record on a date prior to the date of conversion.
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If the Trust is party to any Transaction in each case as a result of which
Trust Shares will be converted into the right to receive securities or other
property (including cash or any combination thereof), the holder of each Class B
Trust Share will have the right after such Transaction to convert such share,
pursuant to the optional conversion provisions hereof, into the number and kind
of shares of stock or other securities and the amount and kind of property
receivable upon such Transaction by a holder of the number of Trust Shares
issuable upon conversion of such Class B Trust Share immediately prior to such
Transaction. The Trust will not be party to any Transaction unless the terms of
such Transaction are consistent with the provisions of this paragraph, and it
will not consent to or agree to the occurrence of any Transaction until the
Trust has entered into an agreement with the successor or purchasing entity, as
the case may be, for the benefit of the holders of the Class B Trust Shares,
thereby enabling the holders of the Class B Trust Shares to receive the benefits
of this paragraph and the other provisions of the Trust's Declaration of Trust
applicable to the Class B Trust Shares.
TRUST PREFERRED SHARES
Trust Preferred Shares may be issued from time to time, in one or more
series, as authorized by the Board of Trustees. Prior to issuance of shares of
each series, the Board is required to fix for each such series, subject to the
provisions of Maryland law and the Declaration of Trust, the powers,
designations, preferences and relative, participating, optional or other special
rights of such series and qualifications, limitations or restrictions thereof,
including such provisions as may be desired concerning voting, redemption,
dividends, dissolution or the distribution of assets, conversion or exchange,
and such other matters as may be fixed by resolution of the Board of Trustees or
a duly authorized committee thereof.
RESTRICTIONS ON OWNERSHIP
For the Trust to qualify as a REIT under the Code, Trust Shares must be
beneficially owned by 100 or more persons during at least 335 days of a taxable
year of 12 months (other than the first year for which REIT status is elected)
or during a proportionate part of a shorter taxable year. Also, not more than
50% of the value of the issued and outstanding shares of capital stock or
beneficial interest may be owned, directly or indirectly, by five or fewer
individuals (as defined in the Code to include certain entities) during the last
half of a taxable year (other than the first year for which REIT status is
elected) or during a proportionate part of a shorter taxable year. To ensure
compliance with these requirements, the Declaration of Trust contains provisions
restricting the ownership and acquisition of the Trust's shares of beneficial
interest, including any Trust Preferred Shares.
The Declaration of Trust, subject to an exception in favor of Capital and
Regional Properties, plc ("CRP-London"), provides that no holder may own, or be
deemed to own by virtue of the attribution provisions of the Code, more than
9.8% in value (the "Ownership Limit") of the issued and outstanding shares of
beneficial interest of the Trust (collectively, "Equity Shares"). The
constructive ownership rules are complex and may cause Equity Shares owned
directly or constructively by a group of related individuals and/or entities to
be deemed to be constructively owned by one individual or entity. As a result,
the acquisition of less than 9.8% of the Equity Shares (or the acquisition of an
interest in an entity which owns Equity Shares) by an individual or entity could
cause that individual or entity (or another individual or entity) to own
constructively in excess of 9.8% of the Equity Shares, and thus subject such
Equity Shares to the Ownership Limit. In addition, for these purposes, Trust
Shares that may be acquired upon conversion or exchange of convertible debt
securities directly or constructively held by an investor, but not necessarily
Trust Shares issuable with respect to convertible debt securities held by
others, will be deemed to be outstanding prior to conversion or exchange, for
purposes of determining the percentage
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of ownership of Equity Shares held by that investor. The Board of Trustees
may, upon the receipt of a ruling from the IRS or an opinion of counsel
satisfactory to it, waive the Ownership Limit with respect to a given holder
if such holder's ownership will not then or in the future jeopardize the
Trust's status as a REIT.
Recent tax legislation relaxed the rules concerning ownership of shares in
a REIT by certain domestic pension trusts. The Declaration of Trust does not
implement this change in the tax law. Under the Declaration of Trust, domestic
pension funds are subject to the restriction on ownership of more than 9.8% of
the value of the outstanding shares.
The Declaration of Trust contains a provision which limits the right of any
shareholder to transfer or otherwise dispose of his Equity Shares in a manner
which is contrary to the Ownership Limit. If any shareholder purports to
transfer his shares to another person and either the transfer would result in
the Trust failing to qualify as a REIT or such transfer would cause the
transferee to hold more than the Ownership Limit, the purported transfer will be
null and void and the shareholder will be deemed not to have transferred his
shares. Moreover, if any person holds shares in excess of the Ownership Limit,
such person will be deemed to hold those shares that cause such limit to be
exceeded solely in trust for the benefit of the Trust, and will not receive
distributions with respect to such shares or be entitled to vote such shares.
In such event, such person will be deemed to have offered to sell such excess
shares to the Trust for the lesser of the amount paid for such shares or the
market price of such shares, which offer the Trust can accept for a period of 90
days after the later of (i) the date of the transfer resulting in such excess
shares and (ii) the date the Trust's Board of Trustees determines that such
excess shares exist. In its sole discretion, the Trust may repurchase such
shares for cash. The Declaration of Trust provides that ownership restrictions
contained in the Declaration of Trust will not preclude the settlement of any
transaction entered into through the facilities of the NYSE or any other
national securities exchange or automated inter-dealer quotation system.
Federal income tax regulations require that the Trust demand within 30 days
after the end of each of its taxable years written statements from shareholders
of record holding more than a specified percentage of the Trust's shares of
beneficial interest, in which the shareholders set out information with respect
to their actual and constructive ownership of the Equity Shares and debt
securities. In addition, each shareholder must on demand disclose to the Trust
in writing such additional information as the Trust may request in order to
determine the effect of such shareholder's direct, indirect and constructive
ownership of such shares on the Trust's status as a REIT.
All certificates representing shares of beneficial interest in the Trust
will bear a legend referring to the restrictions on transfer described above.
These ownership limitations could have the effect of discouraging a
takeover or other transactions in which holders of some, or a majority, of
Equity Shares might receive a premium for their shares over the prevailing
market price or which such holders might believe to be otherwise in their best
interest.
DESCRIPTION OF TRUST DEBENTURES
The Company Debentures were issued under an Indenture dated as of December
10, 1993 (the "Original Indenture") between the Company and The First National
Bank of Chicago, Chicago, Illinois, as Trustee (the "Trustee"). The terms of
the Company Debentures include those stated in the Original Indenture and those
made part of the Original Indenture by reference to the Trust Indenture Act of
1939,
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as amended (the "Trust Indenture Act"). At the effective time of the Merger,
the outstanding principal amount of the Company Debentures will be assumed by
the Trust and converted into the same principal amount of Trust Debentures.
Such assumption will be effected pursuant to the First Supplemental Indenture
dated as of ___________, 1997 (the "First Supplemental Indenture") between
the Trust and the Trustee (the Original Indenture as supplemented by the
First Supplemental Indenture being referred to herein as the "Indenture").
Copies of the Original Indenture and the First Supplemental Indenture are
filed as exhibits to the Registration Statement and are incorporated herein
by reference. The terms and provisions of the Original Indenture and the
Company Debentures will not change as a result of the Plan of Reorganization,
except that the obligor will be the Trust rather than the Company. The
following is a summary of certain provisions of the Indenture and does not
purport to be complete and is qualified in its entirety by reference to the
detailed provisions of the Indenture, including the definitions of certain
terms therein to which reference is hereby made, for a complete statement of
such provisions. Wherever particular articles, provisions or sections of the
Indenture or terms defined therein are referred to herein, such provisions or
definitions are incorporated herein by reference.
GENERAL
The Trust Debentures will be unsecured general obligations and will mature
on January 15, 2004. The Company Debentures were limited to $58,500,000
aggregate principal amount, of which as of July 28, 1997 $11,790,000 remains
outstanding, and bear interest semiannually on January 15 and July 15 of each
year at 8.22%. The Trust will pay interest on the Trust Debentures to the
persons who are registered holders of Trust Debentures at the close of business
on the January 1 or July 1 preceding the interest payment date (Paragraphs 1 and
2 of the Trust Debentures). Principal (and premium, if any) and interest will
be payable, the Trust Debentures will be convertible and exchangeable, and
transfers thereof will be registerable, at the office or agency of the Trust
maintained for such purposes, initially at the offices of the Trustee. The
Trust may pay principal and interest by check and may mail an interest check to
a holder's registered address. Holders must surrender Trust Debentures to a
Paying Agent to collect final principal payments (Section 2.4).
The Company Debentures are, and the Trust Debentures will be, in fully
registered form in denominations of $1,000 principal amount or any integral
multiple thereof (Section 2.2). A holder may transfer or exchange Trust
Debentures in accordance with the Indenture. No service charge will be made for
any registration of transfer, exchange or conversion of Trust Debentures, except
for any tax or other governmental charges that may be imposed in connection
therewith. The Registrar need not transfer or exchange any Trust Debentures
selected for redemption, Also, in the event of a partial redemption, it need
not transfer or exchange any Trust Debentures for a period of 15 days before
selecting Trust Debentures to be redeemed (Section 2.6). The Indenture does not
contain any provision requiring the Trust to repurchase the Trust Debentures at
the option of the holders thereof in the event of a leveraged buyout,
recapitalization, merger or similar restructuring of the Trust, even though the
Trust's creditworthiness and the market value of the Trust Debentures may
decline significantly as a result of such transaction. The Indenture does not
protect holders of the Trust Debentures against any decline in credit quality,
whether resulting from any such transaction or from any other cause. The
registered holder of a Trust Debenture may be treated as its owner for all
purposes.
For purposes of application of the Ownership Limit on Common Shares, direct
or constructive ownership of Trust Debentures will be treated as ownership of
the Common Shares into which such Trust Debentures are convertible. As a
result, the Registrar may refuse to register the transfer of any Trust Debenture
if such transfer would, or in the determination of the Board of Trustees may,
(i) result in a single person owning (or upon conversion or exchange of any
Trust Debentures thereupon owning)
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directly or constructively more than 9.8% of the Trust's outstanding Trust
Shares (including Trust Shares reserved for issuance upon conversion or
exchange of such Trust Debentures) or (ii) cause the Trust to fail to meet
any requirement necessary for the continued qualification of the Trust as a
REIT under the Code. Moreover, if the transfer of any Trust Debenture would
cause either of the consequences described in the preceding sentence, then
such transfer will be null and void AB INITIO as to both the transferor and
the intended transferee, and the intended transferee will acquire no rights
or economic interests in the Trust Debentures.
The Trustee acts as Paying Agent, Registrar and Conversion Agent. The
Trust may change any Paying Agent, Registrar, Conversion Agent or co-registrar
upon prior written notice to the Trustee and may act in any such capacity itself
(Section 2.3).
CONVERSION
The holders of the Trust Debentures will be entitled at any time prior to
maturity, subject to prior redemption, to convert the Trust Debentures or
portions thereof (which are $1,000 or multiples thereof) into Trust Shares at an
initial conversion price of $18.25 at the time of the issuance of the Company
Debentures, subject to adjustment as described below (Section 11.1). No payment
or adjustment will be made for accrued interest on a converted Trust Debenture.
If any Trust Debenture not called for redemption is converted between a record
date for the payment of interest and the next succeeding interest payment date,
such Trust Debenture must be accompanied by funds equal to the interest payable
to the registered holder on such interest payment date on the principal amount
so converted (Section 11.3). The Trust will not issue fractional interests in
Trust Shares upon conversion of Trust Debentures and instead will deliver a
check for the fractional share based upon the market value of the Trust Shares
on the last trading day prior to the conversion date (Section 11.8). If the
Trust Debentures are called for redemption, conversion rights will expire at the
close of business on the redemption date, unless the Trust defaults in payment
due upon such redemption (Section 11.1).
To protect the Trust's status as a REIT, a holder may not convert any Trust
Debenture, and such Trust Debenture shall not be convertible by any holder, if
as a result of such conversion any person would then be deemed to beneficially
own, directly or indirectly, 9.8% or more of the Trust Shares. See "Description
of Trust Debentures--General."
The conversion price is subject to adjustments, as set forth in the
Indenture, in certain events, including (i) the payment of dividends or
distributions on any shares of beneficial interest, (ii) subdivisions,
combinations and reclassifications of the Trust Shares into a greater or smaller
number of shares, (iii) distribution of rights or warrants to substantially all
holders of Trust Shares entitling them to purchase Trust Shares at a price per
share (or having a conversion price per share) less than the then current market
price (as defined), and (iv) the distribution to substantially all holders of
Trust Shares of shares of any other class, or evidences of indebtedness or
assets (including securities, but excluding those rights, warrants, dividends
and distributions referred to above and dividends and distributions not
prohibited under the terms of the Indenture) of the Trust, subject to the
limitation that all adjustments by reason of any of the foregoing would not be
made until they result in a cumulative change in the conversion price of at
least 1%. A conversion price adjustment made according to the provisions of the
Trust Debentures (or the absence of provision for such an adjustment) might
result in a constructive distribution that would be subject to taxation as a
dividend to the holders of Trust Debentures or holders of shares. The Trust
may, at its option, make such reductions in the conversion price, in addition to
those set forth above, as its Board of Trustees deems advisable to avoid or
diminish any income tax to holders of Trust Shares resulting from any dividend
or distribution of equity securities (or rights to acquire
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equity securities) or from any event treated as such for income tax purposes
or for any other reason. The Board of Trustees of the Trust will also have
the power to resolve any ambiguity or correct any error in the provisions
relating to the adjustment of the conversion price of the Trust Debentures
and its actions in so doing shall be final and conclusive (Section 11.4).
If the Trust effects any capital reorganization or reclassification of its
Trust Shares or combines or merges with, or sells or transfers substantially all
of its assets to, another corporation or trust (other than a consolidation or
merger which does not result in any reclassification, conversion, exchange or
cancellation of the Trust's outstanding Trust Shares), the holders of the Trust
Debentures then outstanding will, if entitled to convert such Trust Debentures
at any time after such transaction, be entitled thereafter to convert such Trust
Debentures into the kind and amount of shares of capital stock, other
securities, cash or other assets which they would have owned immediately after
such event had such Trust Debentures been converted before the effective date of
the transaction (Section 11.10).
SUBORDINATION OF TRUST DEBENTURES
The indebtedness evidenced by the Trust Debentures is subordinated and
junior in right of payment to the extent set forth in the Indenture to the prior
payment in full of amounts then due on all Senior Indebtedness (as defined
below). No payment shall be made by the Trust on account of principal of (or
premium, if any) or interest on the Trust Debentures or on account of the
purchase or other acquisition of Trust Debentures, if there shall have occurred
and be continuing a default with respect to any Senior Indebtedness permitting
the holders to accelerate the maturity thereof, or with respect to the payment
of any Senior Indebtedness and such default shall be the subject of a judicial
proceeding or the Trust shall have received notice of such default from any
holder of Senior Indebtedness, unless and until the Trust receives written
notice that such default or event of default shall have been cured or waived or
shall have ceased to exist. By reason of these provisions, in the event of
default on any Senior Indebtedness, whether now outstanding or hereafter issued,
payments of principal of (and premium, if any) and interest on the Trust
Debentures may not be permitted to be made until such Senior Indebtedness is
paid in full, or the event of default on such Senior Indebtedness is cured or
waived (Section 10.2).
Upon any acceleration of the principal of the Trust Debentures or any
distribution of assets of the Trust upon any receivership, dissolution, winding
up, liquidation, reorganization, or similar proceedings of the Trust, whether
voluntary or involuntary, or in bankruptcy or insolvency, all amounts due or to
become due upon all Senior Indebtedness must be paid in full before the holders
of the Trust Debentures or the Trustee are entitled to receive or retain any
assets so distributed in respect of the Trust Debentures (Section 10.2). By
reason of this provision, in the event of insolvency, holders of the Trust
Debentures may recover less, ratably, than holders of Senior Indebtedness.
"Senior Indebtedness" is defined to mean the principal, premium, if any,
unpaid interest (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Trust whether or
not a claim for post-filing interest is allowed in such proceeding), fees,
charges, expenses, reimbursement and indemnification obligations, and all other
amounts payable under or in respect of Indebtedness (as defined) of the Trust
for money borrowed, whether any such Indebtedness exists as of the date of the
Indenture or is created, incurred, assumed or guaranteed after such date. At
June 30, 1997, Senior Indebtedness of the Company was approximately $154.4
million. There is no limit on the amount of Senior Indebtedness that the Trust
may incur (Section 1.1).
"Indebtedness" with respect to any Person is defined to mean:
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(i) all indebtedness for money borrowed whether or not evidenced by a
promissory note, draft or similar instrument;
(ii) that portion of obligations with respect to leases that is
properly classified as a liability on a balance sheet in accordance with
generally accepted accounting principles;
(iii) notes payable and drafts accepted representing extensions of
credit;
(iv) any balance owed for all or any part of the deferred purchase
price of property or services which purchase price is due more than six
months from the date of incurrence of the obligation in respect thereof
(except any such balance that constitutes (a) a trade payable or an accrued
liability arising in the ordinary course of business or (b) a trade draft
or note payable issued in the ordinary course of business in connection
with the purchase of goods or services), if and to the extent such debt
would appear as a liability upon a balance sheet of such Person prepared in
accordance with generally accepted accounting principles; and
(v) any deferral, amendment, renewal, extension, supplement or
refunding of any liability of the kind described in any of the preceding
clauses (i) through (iv); provided, however, that, in computing the
"Indebtedness" of any Person, there shall be excluded any particular
indebtedness if, upon or prior to the maturity thereof, there shall have
been deposited with a depository in trust money (or evidence of
indebtedness if permitted by the instrument creating such indebtedness) in
the necessary amount to pay, redeem or satisfy such indebtedness as it
becomes due, and the amount so deposited shall not be included in any
computation of the assets of such Person (Section 1.1).
OPTIONAL REDEMPTION
The Trust Debentures will be subject to redemption, as a whole or in part,
at any time or from time to time commencing January 15, 1999, at the option of
the Trust on at least 30 days' prior notice by mail at a redemption price equal
to 100% of the principal amount thereof, plus interest accrued to the date of
redemption. The Trust Debentures will not be redeemable prior to January 15,
1999; provided, however, the Trust Debentures will be subject to redemption, in
whole or in part, at any time for certain reasons intended to protect the
Trust's status as a REIT, at the option of the Trust on at least 30 days' prior
notice by mail at a redemption price equal to 100% of the principal amount, plus
interest accrued to the date of redemption (Section 3.1). The Trust may
exercise its redemption powers at any time with respect to the Trust Debentures
of the holder or holders which pose a threat to the Trust's REIT status to the
extent deemed necessary by the Trust's Board of Trustees to preserve such
status. (Paragraph 5 of the Trust Debentures).
DIVIDENDS, DISTRIBUTIONS, AND ACQUISITIONS OF COMMON SHARES
The Indenture provides that the Trust will not (i) declare or pay any
dividend, or make any distribution on its Trust Shares or to holders of its
Trust Shares or (ii) purchase, redeem, or otherwise acquire or retire for value
any of its Trust Shares, or any warrants, rights, or options to purchase or
acquire any shares of its Trust Shares (other than the Trust Debentures or any
other convertible indebtedness of the Trust that is neither secured nor
subordinated to the Trust Debentures), or permit any subsidiary to do so, if at
the time of such action an Event of Default has occurred and is continuing or
would exist immediately after such action (Section 4.6).
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MERGER, CONSOLIDATION, SALE OR CONVEYANCE
The Trust may merge or consolidate with, or sell or convey all or
substantially all of its assets to, any other corporation or entity, provided
that (i) either the Trust shall be the continuing entity, or the successor
entity (if other than the Trust) shall be an entity organized and existing under
the laws of the United States or a state thereof or the District of Columbia
(although it may, in turn, be owned by a foreign entity) and such entity shall
expressly assume by supplemental indenture all of the obligations of the Trust
under the Trust Debentures and the Indenture, (ii) immediately after giving
effect to such transactions no Default or Event of Default shall have occurred
and be continuing, and (iii) the Trust shall have delivered to the Trustee an
Officers' Certificate and opinion of counsel, stating that the transaction and
supplemental indenture comply with the Indenture (Section 5.1).
Except as described in the preceding paragraph, the Indenture under which
the Trust Debentures will be issued does not afford the holders of the Trust
Debentures any protection in the event of a highly leveraged transaction,
reorganization, restructuring, merger or similar transaction involving the Trust
that may adversely affect holders of the Trust Debentures.
EVENTS OF DEFAULT, NOTICE AND WAIVER
An Event of Default under the Indenture is (i) a default in the payment of
interest on the Trust Debentures when due and payable, which continues for 30
days; (ii) a default in the payment of principal of (and premium, if any) on the
Trust Debentures when due, at maturity, upon redemption or otherwise, which
continues for five Business Days; (iii) a failure to perform any other covenant
of the Trust contained in the Indenture or the Trust Debentures which continues
for 60 days after written notice to the Trust as provided in the Indenture; (iv)
a default under any bond, Trust Debenture, note or other Indebtedness of the
Trust or any subsidiary or under any mortgage, indenture or other instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness of the Trust, whether any such Indebtedness exists as of the
date of the Indenture or is thereafter created, if (a) either (1) such event of
default results from the failure to pay any such Indebtedness at maturity or (2)
as a result of such event of default, the maturity of such Indebtedness has been
accelerated prior to its expressed maturity provided that any such failure to
pay shall not be owed and any such failure to pay or acceleration shall not be
rescinded or annulled or the accelerated amount paid within ten days after
notice to the Trust of such failure to pay or acceleration, or such Indebtedness
having been discharged, and (b) the principal amount of such Indebtedness,
together with the principal amount of any other such Indebtedness in default for
failure to pay principal or interest thereon, or the maturity of which has been
so accelerated, aggregates $1,000,000 or more; and (v) certain events of
bankruptcy, insolvency or reorganization relating to the Trust (Section 6.1).
If an Event of Default shall occur and be continuing, the Trustee or the Holders
of a majority in aggregate principal amount of the outstanding Trust Debentures
may declare the Trust Debentures immediately due and payable (Section 6.2).
The Indenture provides that within 90 days after the occurrence of any
Default or Event of Default, the Trustee will give to the holders of Trust
Debentures notice of all uncured Defaults and Events of Default known to it, but
the Trustee shall be protected in withholding such notice if it in good faith
determines that the withholding of such notice is in the interest of such
holders, except in the case of a default in the payment of the principal of (or
premium, if any) or interest on any of the Trust Debentures (Section 7.5). The
Indenture provides that holders of a majority in aggregate principal amount of
the outstanding Trust Debentures may direct the time, method and place of
conducting any proceedings for any remedy available to the Trustee or exercising
any trust or power conferred on the
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Trustee (Section 6.5). The right of a holder to institute a proceeding with
respect to the Indenture is subject to certain conditions precedent including
notice and indemnity to the Trustee, but the holder has an absolute right to
receipt of principal of (and premium, if any) and interest on such holder's
Trust Debenture on or after the respective due dates expressed in the Trust
Debentures, and to institute suit for the enforcement of any such payments
(Section 6.6). A default in any Senior Indebtedness will not prevent a
holder of the Trust Debentures from instituting a proceeding under the
Indenture.
The holders of a majority in aggregate principal amount of the outstanding
Trust Debentures may on behalf of the holders of all Trust Debentures waive
certain past defaults, except a default in payment of the principal of (or
premium, if any) or interest on any Trust Debentures or in respect of certain
provisions of the Indenture which cannot be modified or amended without the
consent of the holder of each outstanding Trust Debenture affected thereby
(Section 6.4 and 9.2).
The Trust will be required to furnish to the Trustee annually a statement
of certain officers stating whether or not they know of any Default or Events of
Default and, if they have knowledge of a Default or Event of Default, a
description of the efforts to remedy the same (Section 4.5).
MODIFICATION OF THE INDENTURE
Under the Indenture, with certain exceptions, the Trust and the Trustee may
modify the Indenture or the Trust Debentures with the written consent of the
holders of 66-2/3% in principal amount of the outstanding Trust Debentures.
However, without the consent of each holder of a Trust Debenture affected, an
amendment, wavier or supplement may not (i) reduce the principal of, or rate of
interest on, any Trust Debenture, (ii) change the stated maturity date of the
principal of, or any installment of interest on any Trust Debenture, (iii) waive
a default in the payment of the principal amount of, or the interest on any
Trust Debenture, (iv) impair the right to institute suit for the enforcement of
any such payment when due, (v) adversely affect the right to convert any Trust
Debenture, (vi) reduce the amount of outstanding Trust Debentures necessary to
consent to an amendment or waiver provided for in the Indenture, or (vii) modify
any provisions of the Indenture relating to the modification, supplement and
amendment of the Indenture or waivers of past defaults, except as otherwise
specified (Section 9.2).
EFFECT OF PLAN OF REORGANIZATION OF THE COMPANY ON HOLDERS OF DEBENTURES
Under the Original Indenture, the Company is permitted to merge with the
Trust, provided the Trust expressly assumes by supplemental indenture all of the
obligations of the Company under the Company Debentures and the Indenture, (ii)
immediately after giving effect to such transactions no Default or Event of
Default shall have occurred and be continuing, and (iii) the Company delivers to
the Trustee an Officers' Certificate and opinion of counsel, stating that the
transaction and supplemental indenture comply with the Original Indenture
(Section 5.1). The Company and the Trust will satisfy all of the foregoing
requirements on or prior to the effective date of the Merger.
Upon consummation of the Merger, the holders of the Company Debentures then
outstanding will, if entitled to convert such Company Debentures at any time
after the Merger, be entitled thereafter to convert such Company Debentures into
the amount of Trust Shares which they would have owned immediately after such
event had such Company Debentures been converted before the effective date of
the Merger, pursuant to the provisions of Section 11.10 of the Original
Indenture.
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LEGAL MATTERS
The validity of the Trust Shares offered hereby, and certain other matters,
will be passed upon for the Trust by Ungaretti & Harris, Chicago, Illinois.
Ungaretti & Harris will rely on Gordon, Feinblatt, Rothman, Hoffberger &
Hollander, LLC, Baltimore, Maryland, as to certain matters of Maryland law.
EXPERTS
The financial statements and financial statement schedules included in the
Company's Annual Report on Form 10-K, incorporated by reference in this
Prospectus, to the extent and for the periods indicated in their report, have
been audited by Coopers & Lybrand L.L.P., independent accountants, and are
included herein in reliance upon the authority of those experts in giving their
report.
OTHER MATTERS
The Board of Directors of the Company knows of no other business to be
presented at the Special Meeting. In the event that other matters properly come
before the Special Meeting, the persons named as proxies will vote on them in
accordance with their best judgment.
SHAREHOLDER PROPOSALS
Shareholder proposals submitted for presentation at the 1998 Annual
Meeting of Shareholders of the Trust, in the event of the approval of the
Plan of Reorganization and the consummation of the Merger, or the Company, in
the event that the Plan of Reorganization is not approved by the Company's
stockholders, must be received at the Company's principal executive offices
no later than Monday, December 1, 1997, to be considered for inclusion in the
proxy statement relating to that meeting. All shareholder proposals should
be sent to CenterPoint Properties, 401 North Michigan Avenue, 30th Floor,
Chicago, Illinois 60611, Attention: Secretary.
IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, ALL STOCKHOLDERS
ARE URGED TO COMPLETE, SIGN, DATE AND RETURN THE ACCOMPANYING FORM OF PROXY IN
THE ENCLOSED ENVELOPE.
By Order of the Board of Directors,
Paul S. Fisher
SECRETARY
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EXHIBIT A
PLAN OF REORGANIZATION
THIS PLAN OF REORGANIZATION is made this ______ day of _____________,
1997, by and between CENTERPOINT PROPERTIES CORPORATION, a Maryland
corporation (the "Corporation"), and CENTERPOINT PROPERTIES TRUST, a Maryland
real estate investment trust (the "Trust").
W I T N E S S E T H:
WHEREAS, the Corporation is a corporation organized and existing under
the laws of the State of Maryland; and
WHEREAS, the total number of shares of capital stock which the
Corporation has authority to issue is 60,000,000, consisting of: 47,727,273
shares of voting Common Stock, par value $0.001 per share, of which 16,751,556
shares are issued and outstanding as of August 11, 1997; 2,272,727 shares of
non-voting Class B Common Stock, par value $0.001 per share, all of which are
issued and outstanding; and 10,000,000 shares of undesignated Series
Preferred Stock, par value $0.001 per share, none of which is issued and
outstanding; and
WHEREAS, the Trust is a real estate investment trust organized and
existing under the laws of the State of Maryland; and
WHEREAS, the total number of shares of beneficial interest which the
Trust has authority to issue is 60,000,000, consisting of: 47,727,273 voting
Common Shares, par value $0.001 per share, of which one Common Share is
issued and outstanding and owned by the Corporation; 2,272,727 non-voting
Class B Common Shares, par value $0.001 per share, none of which is issued
and outstanding; and 10,000,000 undesignated Series Preferred Shares, par
value $0.001 per share, none of which is issued and outstanding; and
WHEREAS, the Board of Directors of the Corporation (the "Directors") and
the Board of Trustees of the Trust (the "Trustees") have been advised by
legal counsel that a merger of a Maryland corporation such as the Corporation
into a Maryland real estate investment trust such as the Trust is
specifically permitted by Section 3-102(a)(3) of the Maryland General
Corporation Law ("MGCL") and Section 8-501.1(b) of Title 8 of the Maryland
Corporations and Associations Code ("Title 8"); and have accordingly
determined that such a merger is permitted by law and is consistent with the
provisions of the Articles of Incorporation of the Corporation as amended
(the "Articles") and the Declaration of Trust of the Trust (the
"Declaration"); and
WHEREAS, the Directors and the Trustees have determined that it is in
the best interests of the Corporation to merge with and into the Trust, on
the terms and conditions set forth herein, but subject to the prior
authorization of both the holders of at least two-thirds of the outstanding
Common Stock of the Corporation and of the sole shareholder of the Trust, all
under and pursuant to the Articles, the Declaration, the MGCL and Title 8;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, for the purpose of prescribing the
terms and conditions of the merger, the parties hereto agree as follows:
<PAGE>
SECTION 1
TERMS AND CONDITIONS
1.1 MERGER. At the Effective Date (as defined in Section 2), the
Corporation shall be merged with and into the Trust (the "Merger"), the Trust
shall be the surviving entity (the "Successor"), and the separate existence
of the Corporation shall cease.
1.2 SUCCESSOR. At and from the Effective Date, the Trust shall succeed
to all of the rights, powers and property of the Corporation and shall be
liable for all of the liabilities, debts and obligations of the Corporation,
in the manner of and as more fully set forth in Section 8-501.1(n) of Title 8.
The Articles of Merger evidencing the Merger shall also constitute and
evidence the sale, conveyance, transfer and assignment of all property of the
Corporation to the Trust and the Trust's assumption of all of the
liabilities, debts and obligations of the Corporation, including without
limitation, all employee benefit plans of the Corporation (and all
liabilities, debts and obligations of the Corporation thereunder) and
obligations to indemnify persons who are or may be entitled to
indemnification under the Articles and the Corporation's By-Laws, to the
extent that such persons are entitled to indemnification thereunder.
1.3 CONVERSION OF SHARES OF THE CORPORATION. At the Effective Date, by
virtue of the Merger and without any action on the part of the holder thereof:
1.3.1 Each share of the Common Stock of the Corporation
outstanding immediately prior thereto shall be converted into one fully
paid and nonassessable Common Share of the Trust; and each certificate
representing said shares of Common Stock shall continue to represent the
same number of Common Shares of the Trust.
1.3.2 Each share of the Class B Common Stock of the Corporation
outstanding immediately prior thereto shall be converted into one fully
paid and nonassessable Class B Common Share of the Trust; and each
certificate representing said shares of Class B Common Stock shall continue
to represent the same number of Class B Common Shares of the Trust.
1.4 COMMON SHARE OF THE TRUST. At the Effective Date, by virtue of the
Merger and without any action on the part of the Corporation, being the sole
holder thereof, the one Common Share of the Trust issued and outstanding
immediately prior thereto shall be canceled and returned to the status of
authorized but unissued shares.
SECTION 2
EFFECTIVE DATE
The Merger shall become effective on the day and at the time (the
"Effective Date") following the completion of the last of the following
actions: (i) this Plan of Reorganization shall have been authorized, in
accordance with the requirements of the laws of the State of Maryland, by the
affirmative vote of the holders of at least two-thirds of the aggregate
number of shares of the Common Stock of the Corporation then outstanding and
entitled to vote thereon, and shall have been authorized by the Corporation
as the sole shareholder of the Trust; (ii) the Common Shares of the Trust
issuable to the stockholders of the Corporation pursuant to this Agreement
and the 8.22% Convertible Subordinated Debentures due 2004 of the Trust (the
"Trust Debentures") issuable to the holders of the Corporation's
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8.22% Convertible Subordinated Debentures due 2004 (the "Corporation
Debentures") shall have been authorized for listing on the New York Stock
Exchange, upon official notice of issuance; and (iii) Articles of Merger
reflecting the Merger shall have been executed and filed in accordance with
Section 3-107 of the MGCL and Section 8-501.1(g) of Title 8.
SECTION 3
CHARTER DOCUMENTS, TRUSTEES, OFFICERS, STOCK RIGHTS AND DEBENTURES
3.1 DECLARATION AND BY-LAWS. The Declaration and By-Laws of the Trust
in effect on the Effective Date (a copy of each of which is attached hereto),
shall continue to be, respectively, the Declaration and By-Laws of the Trust
until changed, altered or amended as therein provided and in the manner
prescribed by the provisions of Title 8.
3.2 TRUSTEES. The persons who were at the Effective Date the Trustees
of the Trust shall continue to be the Trustees of the Trust, holding such
office until their respective Successors are elected or appointed and
qualified in accordance with the Declaration and By-Laws of the Trust.
3.3 OFFICERS. The officers of the Trust as at the Effective Date shall
continue to be the officers of the Trust, holding such offices in the Trust
until their respective Trusts are Successors or appointed and qualified in
accordance with the Declaration and By-Laws of the Trust.
3.4 RESTRICTED STOCK AWARD PLANS, STOCK OPTION PLAN AND OUTSTANDING
OPTIONS. As at and from the Effective Date, the Corporation's 1995 Director
Stock Plan and 1995 Restricted Stock Incentive Plan (collectively the "Stock
Award Plans"), together with the Corporation's 1993 Stock Option Plan (the
"Stock Option Plan") shall continue in full force and effect as plans of the
Trust under the same terms and conditions until such time as such plans may
be amended in accordance with the terms thereof; provided, however, that
references in such plans to the Corporation, its stock and its stockholders
shall be deemed to refer, respectively, to the Trust, its Common Shares and
the holders of such Common Shares. As at and from the Effective Date, all
obligations of the Corporation under the Stock Award Plans shall be assumed
by the Trust and all rights of the participants in the respective Stock Award
Plans to receive grants of the Common Stock of the Corporation on the terms
and conditions set forth in the Stock Award Plans thereupon shall be
converted into rights to receive grants of the Common Shares of the Trust on
the same terms and conditions. As at and from the Effective Date, all
obligations of the Corporation under the Stock Option Plan and option
agreements shall be assumed by the Trust and all rights of the participants
in the Stock Option Plan to receive grants of options to purchase shares of
the Common Stock of the Corporation and the right of the holder of any option
(whether or not granted pursuant to the Stock Option Plan) to exercise said
options on the terms and conditions set forth in the option agreement or the
Stock Option Plan, as the case may be, thereupon shall be converted into
rights to receive grants of options and to exercise said options to purchase
the Common Shares of the Trust on the same terms and conditions.
3.5 DEBENTURES. As at and from the Effective Date, the principal
amount of the Corporation's outstanding 8.22% Convertible Subordinated
Debentures Due 2004 (the "Corporation Debentures") shall be assumed by the
Trust and converted into the same principal amount of 8.22% Convertible
Subordinated Debentures Due 2004 of the Trust (the "Trust Debentures"), and
each certificate representing the outstanding principal amount of Corporation
Debentures shall continue to represent the same principal amount of Trust
Debentures.
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SECTION 4
MISCELLANEOUS
4.1 FURTHER ASSURANCES. From time to time to the extent possible, as
and when required by the Trust or by its successors and assigns, there shall
be executed and delivered on behalf of the Corporation such deeds and other
instruments, and there shall be taken or caused to be taken by it such
further and other action as shall be appropriate or necessary in order to
vest or perfect, or to conform of record or otherwise, in the Trust the title
to and possession of all the property, interests, assets, rights, privileges,
immunities, powers, franchises, and authority of the Corporation, and
otherwise to carry out the purposes of this Plan of Reorganization, and the
officers and Trustees of the Trust are fully authorized in the name of and on
behalf of the Corporation or otherwise to take any and all such action and to
execute and deliver any and all such deeds and other statements.
4.2 ABANDONMENT. At any time before the Effective Date, this Plan of
Reorganization may be terminated and the Merger may be abandoned by the
unanimous vote of the Directors of the Corporation.
4.3 COUNTERPARTS. This Plan of Reorganization may be executed in any
number of counterparts, each of which shall be deemed to be an original.
4.4 GOVERNING LAW. This Plan of Reorganization shall be governed by
and construed in accordance with the laws of the State of Maryland.
4.5 EFFECT. It is intended that the reorganization contemplated hereby
shall be a reorganization of the type described in Section 368(a)(1)(F) under
the Internal Revenue Code of 1986, as amended.
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<PAGE>
IN WITNESS WHEREOF, this Plan of Reorganization is hereby executed on
behalf of each of the parties hereto and attested by their respective
officers thereunto duly authorized.
CENTERPOINT PROPERTIES CORPORATION
a Maryland corporation
By:
---------------------------------------
John S. Gates, Jr., President
ATTEST:
- ----------------------------
Paul S. Fisher, Secretary
DATED: , 1997
-------------------
CENTERPOINT PROPERTIES TRUST
a Maryland real estate investment trust
By:
---------------------------------------
John S. Gates, Jr., President
ATTEST:
- ----------------------------
Paul S. Fisher, Secretary
DATED: , 1997
-------------------
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<PAGE>
EXHIBIT B
DECLARATION OF TRUST
OF
CENTERPOINT PROPERTIES TRUST
THIS DECLARATION OF TRUST is made as of August 12, 1997 by the
undersigned Trustees.
ARTICLE I
THE TRUST
Section 1.1. NAME. The name of the trust (hereinafter the "Trust") is:
CenterPoint Properties Trust
Section 1.2. PRINCIPAL OFFICE; RESIDENT AGENT. The post office
address of the principal office of the Trust in the State of Maryland is c/o
CSC-Lawyers Incorporating Service Company, 11 East Chase St., Baltimore,
Maryland 21202. The name of the resident agent of the Trust in the State of
Maryland is CSC-Lawyers Incorporating Service Company, 11 East Chase Street,
Baltimore, Maryland 21202. The resident agent is a Maryland corporation.
The Trust may have such offices or places of business within or without the
State of Maryland as the Trustees may from time to time determine.
Section 1.3. NATURE OF TRUST. The Trust is a real estate investment
trust within the meaning of Title 8 of the Corporations and Associations
Article of the Annotated Code of Maryland, as amended ("Title 8"), or any
successor statute. The Trust is not intended to be, shall not be deemed to
be, and shall not be treated as, a general partnership, limited partnership,
joint stock association or, except as contemplated in Section 9.1, a
corporation.
Section 1.4. POWERS. The Trust shall have all of the powers granted
to real estate investment trusts generally under Title 8 and shall have any
other and further powers as are not inconsistent with Title 8 or any other
applicable law.
Without limiting the generality of the foregoing, the Trust (i) may
continue the business of CenterPoint Properties Corporation, a Maryland
corporation (the "Predecessor Corporation"), with and into which the Trust
will be merged (the "Merger") with the Trust as the surviving entity and (ii)
may engage in business as a real estate investment trust under the Internal
Revenue Code of 1986, as amended, or any successor statute (the "Code"). For
purposes of this Declaration of Trust, the term "REIT" shall mean a real
estate investment trust as described in the Code.
Section 1.5. DURATION OF TRUST; SALE OF ASSETS. The Trust shall
continue perpetually unless terminated pursuant to any applicable provision
of Title 8. The Trust may be voluntarily dissolved or consolidated or its
existence terminated only by the affirmative vote of the holders of not less
than two-thirds of all of the shares of beneficial interest then outstanding
and entitled to vote on the matter. The Trust may sell or otherwise dispose
of all or substantially all of the real and personal property of the Trust
(the "Trust Property") only by the affirmative vote of the holders of not
less than two-thirds of all shares of beneficial interest then outstanding
and entitled to vote on the matter.
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ARTICLE II
TRUST SHARES
Section 2.1. AUTHORIZED SHARES. The total number of shares of
beneficial interest which the Trust has authority to issue is 60,000,000
shares (the "Shares"), of which 47,727,273 are Common Shares, par value $.001
per share ("Common Shares"), 2,272,727 are Class B Common Shares, par value
$.001 per share ("Class B Common Shares"), and 10,000,000 are Series
Preferred Shares, par value $.001 per share ("Preferred Shares"). The
aggregate par value of all authorized shares of beneficial interest having
par value is $60,000.
Section 2.2. VOTING RIGHTS. Subject to the provisions of Article IV
regarding Excess Shares (as such term is defined therein), each Common Share
shall entitle the holder thereof to one vote.
Section 2.3. ISSUANCE OF PREFERRED SHARES. The Preferred Shares may
be issued, from time to time, in one or more series as authorized by the
Board of Trustees. Prior to issuance of shares of each series of Preferred
Shares, the Board of Trustees by resolution shall designate that series to
distinguish it from all other series of Preferred Shares and classes of
shares of beneficial interest of the Trust, shall specify the number of
shares to be included in that series of Preferred Shares and, subject to the
provisions of Article IV regarding Excess Shares, shall set the terms,
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications and terms
or conditions of redemption.
Section 2.4. CLASSIFICATION OR RECLASSIFICATION OF UNISSUED SHARES.
Subject to the express terms of any series of Preferred Shares or any class
of Common Shares outstanding at the time and notwithstanding any other
provision of the Declaration of Trust, the Board of Trustees may increase or
decrease the number of, alter the designation of or classify or reclassify
any unissued Shares by setting or changing, in any one or more respects, from
time to time before issuing the Shares, and, subject to the provisions of
Article IV regarding Excess Shares, the terms, preferences, conversion and
other rights, voting powers, restrictions, limitations as to dividends or
other distributions, qualifications or terms or conditions of redemption of
any series or class of Shares.
Section 2.5. SALE OF SHARES. The Board of Trustees, in their
discretion, may from time to time issue or sell or contract to issue or sell
Shares, including Shares held in the treasury, to such party or parties and
for money or property actually received, as permitted under the laws of the
State of Maryland, at such time or times, and on such terms as the Trustees
deem appropriate. In connection with any issuance of Shares, the Trustees,
in their discretion, may provide for the issuance of fractional Shares.
Section 2.6. DECLARATION OF TRUST AND BY-LAWS. All persons who shall
acquire shares of beneficial interest in the Trust at any time and from time
to time shall acquire the same subject to the provisions of this Declaration
of Trust and the By-Laws of the Trust.
Section 2.7. CLASS B COMMON SHARES. The Class B Common Shares shall
have the following rights:
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(1) Dividend Rights.
(a) The holders of record of outstanding Class B Common
Shares shall be entitled to receive, when and as declared by the Board of
Trustees, out of funds legally available therefor, cash dividends which are
payable when, as and if authorized by the Board of Trustees, PARI PASSU
with any dividends paid on the Trust's Common Shares, in an amount per
share equal to the Class B Common Shares Common Dividend Amount, as in
effect from time to time. The initial per share Class B Common Shares
Common Dividend Amount per annum shall be equal to $1.7268. Each calendar
quarter after the effective date of the Merger (the "Effective Date") (or,
if the Effective Date is not on the first day of a calendar quarter, the
period beginning on the Effective Date and ending on the last day of the
calendar quarter in which the Merger shall have occurred) is referred to
hereinafter as a "Dividend Period." The amount of dividends payable with
respect to each full Dividend Period for the Class B Common Shares shall be
computed by dividing the Class B Common Shares Common Dividend Amount by
four. The amount of dividends on the Class B Common Shares payable with
respect to the initial Dividend Period shall be computed ratably on the
basis of the actual number of days in such Dividend Period and, if the
Effective Date is not on the first day of a calendar quarter, shall include
the amount of dividends payable with respect to the portion of the dividend
period of the Class B Common Stock of the Predecessor Corporation beginning
on the first day of calendar quarter of the Merger and ending on the day
immediately prior to the Effective Date computed ratably on the basis of
the actual number of days in such dividend period of the Predecessor
Corporation's Class B Common Stock. The amount of dividends on the Class B
Common Shares payable with respect to any other Dividend Period shorter or
longer than a full Dividend Period shall be computed ratably on the basis
of the actual number of days in such Dividend Period. In the event of any
change in the quarterly cash dividend per share applicable to the Common
Shares after the date of this Declaration of Trust, the quarterly cash
dividend per share of the Class B Common Shares shall be adjusted for the
same Dividend Period by an amount computed by multiplying the amount of the
change in the Common Shares dividend by the Conversion Ratio (as defined in
Section 2.7(3)(b)).
(b) In the event the Trust shall declare a distribution
payable in (i) securities of other persons, (ii) evidences of indebtedness
issued by the Trust or other persons, (iii) assets (excluding cash
dividends) or (iv) options or rights to purchase shares or evidences of
indebtedness in the Trust or other persons, then, in each such case for the
purpose of this Section 2.7(1), the holders of the Class B Common Shares
shall be entitled to a proportionate share of any such distribution as
though they were the holders of the number of Common Shares of the Trust
into which their shares of Class B Common Shares are or would be
convertible (assuming such shares of Class B Common Shares were then
convertible) as of the record date fixed for determination of the holders
of Common Shares of the Trust entitled to receive such distribution.
(2) Liquidation Rights.
(a) Subject to any prior rights of any other class or
series of shares, the holders of Class B Common Shares shall be entitled to
receive the remaining assets of the Trust available for distribution pro
rata with the other holders of shares of the Trust as though they were the
holders of the number of Common Shares of the Trust into which their Class
B Common Shares are or would be convertible (assuming such Class B Common
Shares were then convertible) as of the record date applicable to such
distribution.
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(b) Neither a consolidation or merger of the Trust with or
into any other trust or corporation, nor a merger of any other trust or
corporation into the Trust, nor the purchase or redemption of all or part
of any outstanding class or classes of shares of the Trust, nor a sale or
transfer of all or any part of its assets, shall be considered a
liquidation, dissolution or winding up of the Trust within the meaning of
this Section 2.7(2).
(3) Conversation Rights.
(a) MANDATORY CONVERSION INTO COMMON SHARES.
(i) Beginning on September 30, 1998, and at the end of each
calendar quarter thereafter, such number of shares of Class B Common Shares
will mandatorily convert into such number of Common Shares as will result
in the holders of the Class B Common Shares owning, in the aggregate, 4.9%
of the then outstanding Common Shares; and if on any such date the total
number of outstanding Class B Common Shares would not, upon conversion,
result in the holders thereof owning, in the aggregate, 4.9% of the then
outstanding Common Shares, then all such outstanding Class B Common Shares
will mandatorily convert into Common Shares. The Company will notify the
Investor in writing at least five (5) business days prior to the end of
each calendar quarter as to the number of Class B Common Shares subject to
mandatory conversion, which number will be revised, if necessary, as a
result of intervening events, no later than two (2) business days after the
end of the applicable quarter.
(ii) On September 21, 2005, each remaining Class B Common
Share which has not been converted to Common Shares shall mandatorily
convert to that number of fully paid and nonassessable Common Shares equal
to the Conversion Ratio, as adjusted, regardless of the 4.9% limitation
described in Section 2.7(3)(a)(i) above.
(iii) The Trust shall make such arrangements as it deems
appropriate for the issuance as soon as practicable of certificates
representing Common Shares issued upon the mandatory conversion of the
Class B Common Shares in exchange for and contingent upon surrender by the
holder of the certificate(s) representing such holder's Class B Common
Shares. From and after the date of mandatory conversion, certificates
representing Class B Common Shares shall be deemed to represent an equal
number of Common Shares.
(b) RIGHT TO CONVERT.
Beginning on September 21, 1998, the holders of Class B Common
Shares shall have the right, at their option, to convert each such share,
at any time and from time to time, into one fully paid and nonassessable
Common Share (the "Conversion Ratio," which is subject to adjustment as
provided below); PROVIDED, HOWEVER, that no holder of Class B Common Shares
shall be entitled to convert such Class B Common Shares into Common Shares
pursuant to the foregoing provision, if, as a result of such conversion,
such person would become the Beneficial Owner of more than 4.9% of the
Trust's outstanding Common Shares. "Beneficial Owner" shall have the
meaning set forth in Rule 13d-3 under the Securities and Exchange Act of
1934 (or any successor provision thereto). Notwithstanding the foregoing,
the foregoing
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conversion right may be exercised at any time after the Effective
Date and irrespective of the 4.9% limitation (and no such limit
shall apply) if any of the following circumstances occurs any time
after the Effective Date:
(i) For any two consecutive fiscal quarters, the aggregate
amount outstanding as of the end of the quarter under (1) all mortgage
indebtedness of the Trust and its consolidated entities and (2) unsecured
indebtedness of the Trust and its consolidated entities for money borrowed
that has not been made generally subordinate to the other indebtedness for
borrowed money of the Trust or any consolidated entity exceeds fifty-five
percent (55%) of the Trust's total market capitalization, defined as the
market value of all of the Trust's outstanding shares, assuming the
conversion of all outstanding convertible securities, including the Class B
Common Shares plus the amount of the Company's total non-convertible
indebtedness (all as such items of indebtedness and capitalization are
reported in consolidated financial statements contained in the Trust's Form
10-Ks and Form 10-Qs as filed with the Securities and Exchange Commission);
or
(ii) Fewer than three of John S. Gates, Jr., Robert M. Stovall,
Michael M. Mullen and Paul S. Fisher are continuing as Key Managers of the
Trust. (For purposes of this subparagraph (ii), a "Key Manager" shall mean
a Person who is (a) employed by the Trust and (b) actively participates as
a senior executive officer in the management of the Trust); or
(iii) If (A) the Trust shall be party to, or shall have
announced or entered into an agreement for, any transaction (including,
without limitation, a merger, consolidation, statutory share exchange or
sale of all or substantially all of its assets (each of the foregoing a
"Transaction")), in each case as a result of which Common Shares shall have
been or will be converted into the right to receive shares, securities or
other property (including cash or any combination thereof) or which has
resulted or will result in the holders of Common Shares immediately prior
to the Transaction owning less than 50% of the Common Shares after the
Transaction, or (b) a "change of control" as defined in the next sentence
occurs with respect to the Trust. A change of control shall mean the
acquisition (including by virtue of a merger, share exchange or other
business combination) by one shareholder or a group of shareholders acting
in concert with the power to elect a majority of the Trust's Board of
Trustees. The Trust shall notify the holders of Class B Common Shares
promptly if any of the events listed in this Section 2.7(3)(b)(iii) shall
occur.
(c) The Trust shall make such arrangements as it deems
appropriate for the issuance as soon as practicable of certificates
representing Common Shares issued upon the mandatory conversion of the
Class B Common Shares in exchange for and contingent upon surrender by the
holder of the certificate(s) representing such holder's Class B Common
Shares. From and after the date of mandatory conversion, certificates
representing Class B Common Shares shall be deemed to represent an equal
number of Common Shares.
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(d) PROCEDURE FOR CONVERSION. In order to exercise its right to
convert Class B Common Shares into Common Shares pursuant to Section
2.7(3)(b) above, the holder thereof shall surrender the certificate(s)
therefor, duly endorsed if the Trust shall so require, or accompanied by
appropriate instruments of transfer satisfactory to the Trust, at the
office of any transfer agent for the Class B Common Shares, or if there is
no such transfer agent, at the principal offices of the Trust, or at such
other office as may be designated by the Trust, together with written
notice that such holder elects to convert such shares. Such notice shall
also state the name(s) and address(es) in which such holder wishes the
certificate(s) for the Common Shares issuable upon conversion to be issued.
As soon as practicable after an optional conversion, the Trust shall issue
and deliver at said office a certificate or certificates for the number of
whole Common Shares issuable upon conversion of the Class B Common Shares
duly surrendered for conversion, to the person(s) entitled to receive the
same. Class B Common Shares shall be deemed to have been converted
immediately prior to the close of business on the date on which the
certificates therefor and notice of election to convert the same are duly
received by the Trust in accordance with the foregoing provisions, and the
person(s) entitled to receive the Common Shares issuable upon such
conversion shall be deemed for all purposes as record holder(s) of such
Common Shares as of the close of business on such date.
(e) NO FRACTIONAL SHARES. No fractional shares shall be issued
upon conversion of the Class B Common Shares into Common Shares, and the
number of Common Shares to be issued shall be rounded to the nearest whole
share. Whether or not fractional shares would be issuable upon such
conversion shall be determined on the basis of the total number of Class B
Common Shares the holder is at the time converting into Common Shares and
the number of Common Shares issuable upon such aggregate conversion. As to
any final fraction of a share which the holder of one or more Class B
Common Shares would be entitled to receive upon exercise of his conversion
right, the Trust shall pay a cash adjustment in an amount equal to the same
fraction of the last sale price (or bid price if there were no sales) per
share of Common Shares on the New York Stock Exchange on the business day
which next precedes the conversion date or, if such Common Shares is not
then listed or admitted to trading on such Exchange, on any national
securities exchange, of the market price per share (as determined in a
manner prescribed by the Board of Trustees of the Trust) at the close of
business on the business day which next precedes the conversion date.
(f) ADJUSTMENTS.
(i) The Conversion Ratio shall be subject to adjustment as
follows:
(A) In the event the Trust shall at any time (i) pay a dividend
or make a distribution to holders of Common Shares in shares, (ii)
subdivide its outstanding Common Shares into a larger number of shares,
(iii) combine its outstanding Common Shares into a smaller number of
shares, or (iv) issue by reclassification of its Common Shares any shares
of the Trust, the Conversion Ratio in effect immediately prior thereto
shall be adjusted as provided below so that the holder of any Class B
Common Shares thereafter surrendered for conversion shall be
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entitled to receive the number of shares of the Trust which such
holder would have owned or have been entitled to receive after the
happening of any of the events described above, had such Class B
Common Share been converted immediately prior to the happening of
such event. Any adjustment made pursuant to this subparagraph (a)
shall become effective retroactively immediately after the record
date in the case of a dividend and shall become effective
immediately after the effective date in the case of a subdivision,
combination or reclassification.
(B) In case the Trust shall issue rights or warrants to all
holders of its Common Shares entitling them to subscribe for or purchase
Common Shares at a price per share less than the current market price (as
hereinafter defined) per share of Common Shares at the record date
mentioned below, the number of Common Shares into which each Class B Common
Share shall thereafter be convertible shall be determined by multiplying
the number of Common Shares into which such Class B Common Share was
therefore convertible by a fraction, of which the numerator shall be the
number of Common Shares outstanding on the date of issuance of such rights
or warrants plus the number of additional Common Shares offered for
subscription or purchase, and of which the denominator shall be the number
of Common Shares outstanding on the date of issuance of such rights or
warrants plus the number of shares which the aggregate offering price of
the total number of shares so offered would purchase at such current market
price. Such adjustment shall be made whenever such rights or warrants are
issued, and shall become effective retroactively immediately after the
record date for the determination of shareholders entitled to receive such
rights or warrants.
(C) In case the Trust shall distribute to all holders of its
Common Shares evidences of its indebtedness or assets or rights or warrants
to subscribe for or purchase securities issued by the Trust or property of
the Trust (excluding those referred to in subparagraph (B) above), then in
each such case the number of Common Shares into which each Class B Common
Share shall thereafter be convertible shall be determined by multiplying
the number of Common Shares into which such Class B Common Share was
theretofore convertible by a fraction, of which the numerator shall be the
current market price per Common Share, and of which the denominator shall
be such current market price per Common Share, less the then fair market
value (as determined by the Board of Trustees of the Trust, whose
determination shall be conclusive) of the portion of the assets or evidence
of indebtedness so distributed or of such rights or warrants applicable to
one share of the Common Shares. Such adjustment shall be made whenever any
such distribution is made, and shall become effective retroactively
immediately after the record date for the determination of shareholders
entitled to receive such distribution.
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(D) If any such rights or warrants referred to above shall
expire without having been exercised, the Conversion Ratio as theretofore
adjusted because of the issue of such rights or warrants shall forthwith be
readjusted to the Conversion Ratio which would have been in effect had an
adjustment been made on the basis that only the rights or warrants so
issued or sold were those rights or warrants actually exercised and that
with respect to any such rights or warrants to subscribe for or purchase
securities issued by the Trust, other than Common Shares or property of the
Trust, the fair market value thereof shall be the fair market value of the
rights or warrants actually exercised. If any such rights or warrants
shall expire without having been exercised, the Conversion Ratio as
theretofore adjusted because of the issue of such rights or warrants shall
forthwith be readjusted to the Conversion Ratio which would have been in
effect had an adjustment been made on the basis that the only rights or
warrants, so issued or sold, were those rights or warrants actually
exercised and that with respect to any such rights or warrants to subscribe
for or purchase securities issued by the Trust, other than Common Shares,
or property of the Trust the fair market value thereof shall be the fair
market value of the rights or warrants actually exercised.
For the purpose of any computation under this paragraph (i) the
current market price per Common Share at any date shall be deemed to be the
average of the daily closing prices for the fifteen (15) consecutive
business days commencing thirty (30) business days before the day in
question. The closing price for each day shall be the last reported sale
price regular way or, in the case no such reported sale takes place on such
day, the average of the reported closing bid and asked prices regular way,
in either case on the New York Stock Exchange, or, if the Common Shares are
not listed or admitted to trading on such Exchange, on any national
securities exchange, designated by the Board of Trustees, on which the
Common Shares are listed or admitted to trading, or if not listed or
admitted to trading on any national securities exchange, the average of the
closing bid and asked prices as furnished by any New York Stock Exchange
firm selected from time to time by the Trust for the purpose.
All calculations under this paragraph (i) shall be made to the
nearest cent or to the nearest 1/100th of a share as the case may be.
(ii) No adjustment of the Conversion Ratio shall be made as a
result of or in connection with the issuance of Common Shares of the Trust
pursuant to options or stock purchase agreements now or hereafter granted
or entered into with directors, officers or employees of the Trust or its
subsidiaries in connection with their employment, whether entered into at
the beginning of the employment or at any time thereafter.
(iii) In case of:
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(A) any capital reorganization of the Trust, or
(B) the consolidation or merger of the Trust with or into another
trust or corporation, or
(C) a statutory share exchange whereby the Trust's Common Shares are
converted into property other than cash, or
(D) the sale, transfer or other disposition of all or substantially
all of the property, assets or business of the Trust as a result of which
sale, transfer or other disposition property other than cash shall be
payable or distributable to the holders of the Common Shares, then, in each
such case, each Class B Common Share shall thereafter be convertible into
the number and class of shares or other securities or property of the
Trust, or of the trust or corporation resulting from such consolidation or
merger or with or to which such statutory share exchange, sale, transfer or
other disposition shall have been made, to which the Common Shares
otherwise issuable upon conversion of such Class B Common Share would have
been entitled upon such reorganization, consolidation, merger, statutory
share exchange, or sale, transfer or other disposition if outstanding at
the time thereof; and in any such case appropriate adjustment, as
determined by the Board of Trustees, shall be made in the application of
the provisions set forth in this Section 2.7(f) with respect to the
conversion rights thereafter of the holders of the Class B Common Shares,
to the end that such provisions shall thereafter be applicable, as nearly
as reasonably may be, in relation to any shares or securities or other
property thereafter issuable or deliverable upon the conversion of Class B
Common Shares. Proper provision shall be made as a part of the terms of
any such reorganization, consolidation, merger, statutory share exchange or
sale, transfer or other disposition whereby the conversion rights of the
holders of Class B Common Shares shall be protected and preserved in
accordance with the provisions of this paragraph (iii). The provisions of
this paragraph (iii) shall similarly apply to successive capital
reorganizations, consolidations, merger, statutory share exchanges, sales,
transfers or other dispositions of property as aforesaid.
(iv) Upon conversion of any Class B Common Shares, 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 Shares of record on a date prior to the date of
conversion.
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(v) Whenever the Conversion Ratio shall be adjusted as herein
provided, the Trust shall cause to be mailed by first class mail, postage
prepaid, as soon as practicable to each holder of record of Class B Common
Shares a notice stating that the Conversion Ratio has been adjusted and
setting forth the adjusted Conversion Ratio, together with an explanation
of the calculation of the same.
(vi) If the Trust shall be party to any Transaction in each case
as a result of which Common Shares shall be converted into the right to
receive stock, securities or other property (including cash or any
combination thereof), the holder of each Class B Common Share shall have
the right after such Transaction to convert such share, pursuant to the
optional conversion provisions hereof, into the number and kind of shares
of stock or other securities and the amount and kind of property receivable
upon such Transaction by a holder of the number of Common Shares issuable
upon conversion of such Class B Common Share immediately prior to such
Transaction. The Trust shall not be party to any Transaction unless the
terms of such Transaction are consistent with the provisions of this
Section 2.7(3)(f)(vi), and it shall not consent to or agree to the
occurrence of any Transaction until the Trust has entered into an agreement
with the successor or purchasing entity, as the case may be, for the
benefit of the holders of the Class B Common Shares, thereby enabling the
holders of the Class B Common Shares to receive the benefits of this
Section 2.7(3)(f)(vi) and the other provisions of this Declaration of
Trust. Without limiting the generality of the foregoing, provision shall
be made for adjustments in the Conversion Ratio which shall be as nearly
equivalent as may be practicable to the adjustments provided for in Section
2.7(3)(f)(i). The provisions of this Section 2.7(3)(f)(vi) shall similarly
apply to successive Transactions.
(vii) In the event that the Trust shall propose to effect any
Transaction which would result in an adjustment under Section
2.7(3)(f)(vi), the Trust shall cause to be mailed to the holders of record
of Class B Common Shares at least twenty (20) days prior to the applicable
date hereinafter specified a notice stating the date on which such
Transaction is expected to become effective, and the date as of which it is
expected that holders of Common Shares of record shall be entitled to
exchange their shares of Common Shares for securities or other property
deliverable upon such Transaction. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such
Transaction.
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(g) OTHER.
(i) The Trust shall at all times reserve and keep available out
of its authorized but unissued Common Shares the maximum number of Common
Shares issuable upon the conversion of all Class B Common Shares then
outstanding, and if at any time the number of authorized but unissued
Common Shares shall not be sufficient to effect the conversion of all then
outstanding Class B Common Shares, in addition to such other remedies as
shall be available to the holder of such Class B Common Shares, the Trust
shall take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued Common Shares to such
number of shares as shall be sufficient for such purposes.
(ii) The Trust shall pay any taxes that may be payable in respect
of the issuance of Common Shares upon conversion of Class B Common Shares,
but the Trust shall not be required to pay any taxes which may be payable
in respect of any transfer of shares of Class B Common Shares or any
transfer involved in the issuance of Common Shares in a name other than
that in which the Class B Common Shares so converted are registered, and
the Trust shall not be required to transfer any such Class B Common Shares
or to issue or deliver any such Common Shares unless and until the
person(s) requesting such transfer or issuance shall have paid to the Trust
the amount of any such taxes, or shall have established to the satisfaction
of the Trust that such taxes have been paid.
(iii) The Trust will not, by amendment of the Declaration of
Trust or through any reorganization, recapitalization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any
other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by
the Trust, but will at all times in good faith assist in carrying out of
all the provisions of this Declaration of Trust and in the taking of all
such action as may be necessary or appropriate to protect the conversion
rights of the holders of the Class B Common Shares against impairment.
(iv) Holders of Class B Common Shares shall be entitled to
receive copies of all communications by the Trust to its holders of Common
Shares, concurrently with the distribution to such shareholders.
(v) All Common Shares issued upon conversion of shares of Class
B Common Shares shall upon issue be fully paid and nonassessable by the
Trust and free from original issue taxes.
(4) Voting Rights. The holders of record of Class B Common
Shares shall not be entitled to vote on any matter on which the holders of
record of Common Shares are
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entitled to vote, except that the holders of a majority of the
Class B Common Shares, voting as a separate class, shall be
required to vote on and approve: (a) any material adverse change
in the rights, preferences or privileges of the Class B Common
Shares and (b) any creation of a new class of stock having rights,
preferences or privileges senior to or in parity with the rights,
preferences or privileges of the Class B Common Shares.
(5) Reacquired Shares. Class B Common Shares converted,
redeemed or otherwise purchased or acquired by the Trust shall be restored
to the status of authorized but unissued Common Shares without designation
as to series.
ARTICLE III
PROVISIONS FOR DEFINING, LIMITING
AND REGULATING CERTAIN POWERS OF THE
TRUST AND OF THE SHAREHOLDERS AND TRUSTEES
Section 3.1. NUMBER AND CERTIFICATION. The number of trustees of the
Trust initially shall be seven (the "Trustees"), which number may be
increased or decreased pursuant to the By-Laws of the Trust; provided,
however, that (a) if there are shares outstanding and so long as there are
three or more shareholders, the number of Trustees shall never be less than
three and (b) if there are shares outstanding and so long as there are less
than three shareholders, the number of Trustees may be less than three but
not less than the number of shareholders. The names of the trustees who
shall serve effective immediately and until the first annual meeting of
shareholders and until their successors are duly elected and shall qualify
are:
Martin Barber
John S. Gates, Jr.
Robert L. Stovall
Nicholas C. Babson
Alan D. Feld
John J. Kinsella
Thomas E. Robinson
At the first annual meeting of shareholders, and at each annual
meeting thereafter, the shareholders shall elect the trustees, who shall serve
until their successors are duly elected and shall qualify.
Section 3.2. POWERS OF TRUSTEES. Subject to the express limitations
set forth herein or in the By-Laws, (i) the business and affairs of the Trust
shall be managed under the direction of the Board of
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Trustees and (ii) the Trustees shall have full, exclusive and absolute power,
control and authority over the Trust Property and over the business of the
Trust as if they, in their own right, were the sole owners thereof. The
Trustees may take any actions as in their sole judgment and discretion are
necessary or desirable to conduct the business of the Trust. This
Declaration of Trust shall be construed with a presumption in favor of the
grant of power and authority to the Trustees.
Section 3.3. RESIGNATION, REMOVAL AND DEATH. A Trustee may resign at
any time by giving written notice thereof in recordable form to the other
Trustees at the principal office of the Trust. A Trustee may be removed,
with or without cause, by the shareholders upon the affirmative vote of a
majority of all of the votes entitled to be cast for the election of
Trustees. A Trustee may be removed, with or without cause, by the Board of
Trustees upon the affirmative vote of a majority of the then acting Trustees.
A special meeting of the shareholders or the Board of Trustees may be
called, in accordance with the By-Laws of the Trust, for the purpose of
removing a Trustee. Upon the resignation or removal of any Trustee, or his
otherwise ceasing to be a Trustee, he shall automatically cease to have any
right, title or interest in and to the Trust Property and shall execute and
deliver such documents and render such accounting as the remaining Trustees
require and shall thereupon be discharged as Trustee. Upon the incapacity or
death of any Trustee, his status as a Trustee shall immediately terminate,
and his legal representatives shall perform the acts set forth in the
preceding sentence.
Section 3.4. AUTHORIZATION BY BOARD OF ISSUANCE OF SHARES OF
BENEFICIAL INTEREST. The Board of Trustees of the Trust may authorize the
issuance from time to time of shares of beneficial interest of the Trust of
any class, whether now or hereafter authorized, or securities convertible
into shares of beneficial interest of any class, whether now or hereafter
authorized, for such consideration as the Board of Trustees in its sole
discretion may deem advisable, subject to such restrictions or limitations,
if any, as may be set forth in this Declaration of Trust or the By-Laws of
the Trust or in the general laws of the State of Maryland.
Section 3.5. PREEMPTIVE RIGHTS AND APPRAISAL RIGHTS. Except as may be
provided by the Board of Trustees in authorizing the issuance of Preferred
Shares pursuant to Article II, Section 3, no holder of Shares shall, as such
holder, (i) have any preemptive right to purchase or subscribe for any
additional shares of beneficial interest of the Trust or any other security
of the Trust which it may issue or sell or (ii) except as expressly required
under Title 8, have any right to require the Trust to pay him the fair value
of his Shares in an appraisal or similar proceeding.
Section 3.6. INDEMNIFICATION. The Trust shall have the power, to the
maximum extent permitted by Maryland law in effect from time to time, to
obligate itself to indemnify, and to pay or reimburse expenses under the
procedure provided by such Maryland law in advance of final disposition of a
proceeding to, (i) any individual who is a present or former Trustee or
officer of the Trust or (ii) any individual who, while a Trustee of the Trust
and at the request of the Trust, serves or has served another trust,
partnership, joint venture, corporation, employee benefit plan or any other
enterprise as a trustee, officer, partner or trustee of such trust,
partnership, joint venture, corporation, employee benefit plan or other
enterprise. The Trust shall have the power, with the approval of its Board
of Trustees, to provide such indemnification and advancement of expenses to a
person who served a predecessor of the Trust, including, without limitation,
the Predecessor Corporation, in any of the capacities, or similar to the
capacities, described in (i) or (ii) above and to any employee or agent of
the Trust or a predecessor of the Trust, including, without limitation, the
Predecessor Corporation.
Section 3.7. ADVISOR AGREEMENTS. Subject to such approval of
shareholders and other conditions, if any, as may be required by any
applicable statute, rule or regulation, the Board of Trustees
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may authorize the execution and performance by the Trust of one or more
agreements with any person, association, company, trust, partnership (limited
or general) or other organization whereby, subject to the supervision and
control of the Board of Trustees, any such other person, association,
company, trust, partnership (limited or general) or other organization (the
"Advisor") shall render or make available to the Trust managerial,
investment, advisory and/or related services, office space and other services
and facilities (including, if deemed advisable by the Board of Trustees, the
management or supervision of the investments of the Trust) upon such terms
and conditions as may be provided in such agreement or agreements (including,
if deemed fair and equitable by the Board of Trustees, the compensation
payable thereunder by the Trust).
Section 3.8. RELATED PARTY TRANSACTIONS. Without limiting any other
procedures available by law or otherwise to the Trust, the Board of Trustees
may authorize any agreement of the character described in Section 3.7 or
other transaction with any person, association, company, trust, partnership
(limited or general) or other organization, although one or more of the
Trustees or officers of the Trust may be a party to any such agreement or an
officer, trustee, shareholder or member of such other party, and no such
agreement or transaction shall be invalidated or rendered void or voidable
solely by reason of the existence of any such relationship if the existence
is disclosed or known to the Board of Trustees, and the contract or
transaction is approved by the affirmative vote of a majority of the
disinterested Trustees, even if they constitute less than a quorum of the
Board. Any Trustee of the Trust who is also a trustee, officer, shareholder
or member of such other entity may be counted in determining the existence of
a quorum at any meeting of the Board of Trustees considering such matter.
Section 3.9. DETERMINATION BY BOARD. The determination as to any of
the following matters, made in good faith by or pursuant to the direction of
the Board of Trustees consistent with this Declaration of Trust and in the
absence of actual receipt of an improper benefit in money, property or
services or active and deliberate dishonesty established by a court, shall be
final and conclusive and shall be binding upon the Trust and every holder of
its shares: the amount of the net income of the Trust for any period and the
amount of assets at any time legally available for the payment of dividends,
redemption of its shares or the payment of other distributions on its shares;
the amount of paid-in surplus, net assets, other surplus, annual or other net
profit, net assets in excess of capital, undivided profits or excess of
profits over losses on sales of assets; 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 have been
paid or discharged); the fair value, or any sale, bid or asked price to be
applied in determining the fair value, of any asset owned or held by the
Trust, and any matters relating to the acquisition, holding and disposition
of any assets by the Trust. In performing his duties under this Declaration
of Trust, a Trustee is entitled to rely on any information, opinion, report
or statement, including any financial statement or other financial data,
prepared or presented by: (i) an officer or employee of the Trust whom the
Trustee reasonably believes to be reliable and competent in the matters
presented; (ii) a lawyer, public accountant or other person, as to a matter
which the Trustee reasonably believes to be within the person's professional
or expert competence; or (iii) a committee of the board on which the Trustee
does not serve, as to a matter within its designated authority, if the
Trustee reasonably believes the committee to merit confidence.
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Section 3.10. LEGAL TITLE. Legal title to all Trust Property shall be
vested in the Trust, but it may cause legal title to any Trust Property to be
held by or in the name of any or all of the Trustees or any other individual,
corporation, partnership, estate, trust, association or private foundation as
nominee. Any right, title or interest of the Trustees in and to the Trust
Property shall automatically vest in successor and additional Trustees upon
their qualification and acceptance of election or appointment as Trustees,
and they shall thereupon have all the rights and obligations of Trustees,
whether or not conveyancing documents have been executed and delivered
pursuant to Section 3.3 or otherwise. Written evidence of qualification and
acceptance of election or appointment of successor and additional Trustees
may be filed with the records of the Trust and in such other offices,
agencies or places as the Trust or Trustees may deem necessary or desirable.
Section 3.11. RESERVED POWERS OF BOARD. The enumeration and definition
of particular powers of the Board of Trustees included in this Article III
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 provision of this
Declaration of Trust, or construed or deemed by inference or otherwise in any
manner to exclude or limit the powers conferred upon the Board of Trustees
under the general laws of the State of Maryland as now or hereafter in force.
ARTICLE IV
RESTRICTION ON TRANSFER
ACQUISITION AND REDEMPTION OF SHARES
Section 4.1. DEFINITIONS. For the purpose of this Article IV, the
following terms shall have the following meanings:
"Act" means the Securities Act of 1933, as amended.
"Beneficial Ownership" shall mean ownership of Equity Shares (as
hereinafter defined) by a Person (as hereinafter defined) who would be
treated as an owner of such Equity Shares under Section 542(a)(2) of the Code
either directly or constructively through the application of Section 544 of
the Code, as modified by Section 856(h)(1)(B) of the Code but without regard
to Section 856(h)(3) of the Code. The terms "Beneficial Owner,"
"Beneficially Owns," "Beneficially Own" and "Beneficially Owned" shall have
the correlative meanings.
"Beneficiary" shall mean the beneficiary of the Special Trust (as
hereinafter defined) as determined pursuant to Section 4.19 of this Article IV.
"Debt" shall mean indebtedness of (i) the Trust or (ii) any
subsidiary thereof.
"Equity Shares" shall mean either Common Shares or Preferred Shares.
"Excess Shares" shall have the meaning set forth in Section 4.3.
"Existing Holder" shall mean Capital and Regional Properties plc, a
United Kingdom corporation.
"Existing Holder Limit" shall initially mean 18.0%, in number of
shares or value, of the outstanding Equity Shares of the Trust, and after any
adjustment as set forth in Section 4.10 of this
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Article IV, shall mean such greater percentage of the outstanding Equity
Shares as so adjusted. The number and value of shares of the outstanding
Equity Shares of the Trust shall be determined by the Board of Trustees in
good faith, which determination shall be conclusive for all purposes hereof.
"Market Price" shall mean the last reported sales price of Common
Shares or Preferred Shares, as the case may be, reported on any nationally
registered securities exchange on the trading day immediately preceding the
relevant date, or if not then traded on any such exchange, the last reported
sales price of the Common Shares or Preferred Shares, as the case may be, on
the trading day immediately preceding the relevant date as reported on any
exchange or quotation system over which the Common Shares or Preferred
Shares, as the case may be, may be traded, or if not then traded over any
exchange or quotation system, then the market price of the Common Shares or
Preferred Shares, as the case may be, on the relevant date as determined in
good faith by the Board of Trustees of the Trust.
"Ownership Limit" shall initially mean 9.8%, in number of shares or
value, of the outstanding Equity Shares of the Trust, and after any
adjustment as set forth in Section 4.10 of this Article IV, shall mean such
greater percentage of the outstanding Equity Shares as so adjusted. The
number and value of shares of the outstanding Equity Shares of the Trust
shall be determined by the Board of Trustees in good faith, which
determination shall be conclusive for all purposes hereof.
"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 or any successor statute, joint stock company or other entity; but does
not include an underwriter which participated in any public offering
registered under the Act of any shares of the Trust for a period of 30 days
following the purchase by such underwriter of the Common Shares and/or
Preferred Shares.
"Purported Beneficial Transferee" shall mean, with respect to any
purported Transfer which results in Excess Shares (as defined in Section 4.3
of this Article IV), the purported beneficial transferee for whom the
Purported Record Transferee (as hereinafter defined) would have acquired
shares of Equity Shares, if such transfer had been valid under Section 4.2 of
this Article IV.
"Purported Record Transferee" shall mean, with respect to any
purported Transfer which results in Excess Shares, the record Holder of the
Equity Shares if such transfer had been valid under Section 4.2 of this
Article IV.
"Restriction Termination Date" shall mean the first day on which
the Board of Trustees of the Trust determines that it is no longer in the
best interests of the Trust to attempt to, or continue to, qualify as a REIT.
"Special Trust" shall mean the trust created pursuant to Section
4.15 of this Article IV.
"Transfer" shall mean any sale, transfer, gift, assignment, devise
or other disposition of Equity Shares (including (i) the granting of any
option or entering into any agreement for the sale, transfer or other
disposition of Equity Shares or (ii) the sale, transfer, assignment or other
disposition of any securities or rights convertible into or exchangeable for
Equity Shares, but excluding the exchange of Debt for Equity Shares), whether
by operation of law or otherwise. The terms "Transfers" and "Transferred"
shall have the correlative meanings.
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"Trustee" shall mean the Trust as trustee for the Special Trust,
and any successor trustee appointed by the Trust.
Section 4.2. OWNERSHIP LIMITATION. (i) Except as provided in Section
4.12 of this Article IV, until the Restriction Termination Date, no Person
(other than an Existing Holder) shall Beneficially Own shares of Common
Shares and/or Preferred Shares in excess of the Ownership Limit and no
Existing Holder shall Beneficially Own Common Shares and/or Preferred Shares
in excess of the Existing Holder Limit for such Existing Holder.
(ii) Subject to Section 4.22, notwithstanding any other
provisions of this Article IV and except as provided in Sections 4.9 and 4.12
of this Article IV, until the Restriction Termination Date, any Transfer
that, if effective, would result in any Person (other than an Existing
Holder) Beneficially Owning Common Shares and/or Preferred Shares in excess
of the Ownership Limit shall be void AB INITIO as to the Transfer of such
Common Shares and/or Preferred Shares which would be otherwise Beneficially
Owned by such Person in excess of the Ownership Limit; and the intended
transferee shall acquire no rights in such Common Shares and/or Preferred
Shares.
(iii) Subject to Section 4.22, notwithstanding any other
provisions of this Article IV and except as provided in Sections 4.9 and 4.12
of this Article IV, until the Restriction Termination Date, any Transfer
that, if effective, would result in any Existing Holder Beneficially Owning
Common Shares and/or Preferred Shares in excess of the Existing Holder Limit
shall be void AB INITIO as to the Transfer of such Common Shares and/or
Preferred Shares which would be otherwise Beneficially Owned by such Existing
Holder in excess of the Existing Holder Limit; and such Existing Holder shall
acquire no rights in such Common Shares and/or Preferred Shares.
(iv) Subject to Section 4.22, notwithstanding any other
provisions of this Article IV and except as provided in Section 4.12 of this
Article IV, until the Restriction Termination Date, any Transfer that, if
effective, would result in the Common Shares and/or Preferred Shares being
Beneficially Owned by less than 100 Persons (determined without reference to
any rules of attribution) shall be void AB INITIO as to the Transfer of such
shares of Common Shares and/or Preferred Shares which would be otherwise
Beneficially Owned by the transferee; and the intended transferee shall
acquire no rights in such Common Shares and/or Preferred Shares.
(v) Until the Restriction Termination Date, any Transfer
that, if effective, would result in the Trust being "closely held" within the
meaning of Section 856(h) of the Code shall be void AB INITIO as to the
Transfer of the shares of Common Shares and/or Preferred Shares which would
cause the Trust to be "closely held" within the meaning of Section 856(h) of
the Code or any successor statute; and the intended transferee shall acquire
no rights in such Common Shares and/or Preferred Shares.
Section 4.3. EXCESS SHARES. (i) If, notwithstanding the other
provisions contained in this Article IV, at any time until the Restriction
Termination Date, there is a purported Transfer or other change in the
capital structure of the Trust such that any Person would Beneficially Own
Common Shares and/or Preferred Shares in excess of the Ownership Limit or
that the Existing Holder would Beneficially Own Common Shares and/or
Preferred Shares in excess of the Existing Holder Limit, then, except as
otherwise provided in Sections 4.9 and 4.12, such Common Shares and/or
Preferred Shares in excess of such Ownership Limit or Existing Holder Limit
(rounded up to the nearest whole share) shall constitute "Excess Shares" and
be treated as provided in this Article IV. Such designation and treatment
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shall be effective as of the close of business on the business day prior to
the date of the purported Transfer or change in capital structure.
(ii) If, notwithstanding the other provisions contained in
this Article IV, at any time until the Restriction Termination Date, there is
a purported Transfer or other change in the capital structure of the Trust
(except for a change resulting from the exchange of Debt for Equity Shares)
which, if effective, would cause the Trust to become "closely held" within
the meaning of Section 856(h) of the Code or any successor statute, then the
Common Shares and/or Preferred Shares being Transferred which would cause the
Trust to be "closely held" within the meaning of Section 856(h) of the Code
or any successor statute (rounded up to the nearest whole share) shall
constitute Excess Shares and be treated as provided in this Article IV. Such
designation and treatment shall be effective as of the close of business on
the business day prior to the date of the purported Transfer or change in
capital structure.
(iii) The Ownership Limit shall not apply to the
acquisition of Common Shares or Preferred Shares by an underwriter in a
public offering of such shares or in any transaction involving the issuance
of shares by the Trust in which the Board of Trustees determines that the
underwriter or another person initially acquiring such shares will timely
distribute such shares to others such that the following such distribution
none of such shares will be Excess Shares.
Section 4.4. PREVENTION OF TRANSFER. If the Board of Trustees or its
designee shall at any time determine in good faith that a Transfer has taken
place in violation of Section 4.2 of this Article IV or that a Person intends
to acquire or has attempted to acquire Beneficial Ownership of any shares of
the Trust in violation of Section 4.2 of this Article IV, the Board of
Trustees or its designee shall take such action as it deems advisable to
refuse to give effect to or to prevent such Transfer, including, but not
limited to, refusing to give effect to such Transfer on the books of the
Trust, directing the Trust's transfer agent and/or registrar to refuse to
give effect to such Transfer on the books of the Trust or instituting
proceedings to enjoin such Transfer; provided, however, that any Transfers or
attempted Transfers in violation of subparagraphs Section 4.2(ii), (iii) and
(iv) of this Article IV shall automatically result in the designation and
treatment described in Section 4.3 irrespective of any action (or non-action)
by the Board of Trustees or its designee.
Section 4.5. NOTICE TO TRUST. Any Person who acquires or attempts to
acquire shares in violation of Section 4.2 of this Article IV, or any Person
who is a transferee such that Excess Shares result under Section 4.3 of this
Article IV, shall immediately give written notice or, in the event of a
proposed or attempted Transfer, give at least 15 days prior written notice to
the Trust of such event and shall provide to the Trust such other information
as the Trust may request in order to determine the effect, if any, of such
Transfer or attempted Transfer on the Trust's status as a REIT.
Section 4.6. INFORMATION FOR TRUST. Until the Restriction Termination
Date:
(i) every Beneficial Owner of more than 5.0% (or such other
percentage, between 1/2 of 1% and 5%, as provided in the regulations of the
Internal Revenue Service promulgated under the Code) of the number or value
of outstanding Equity Shares of the Trust shall, within 30 days after January
1 of each year, give written notice to the Trust stating the name and address
of such Beneficial Owner, the number of shares Beneficially Owned, and a
description of how such shares are held. Each such Beneficial Owner shall
provide to the Trust such additional information as the Trust may reasonably
request in order to determine the effect, if any, of such Beneficial
Ownership on the Trust's status as a REIT; and
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(ii) each Person who is a Beneficial Owner of Common Shares
and/or Preferred Shares and each Person (including the shareholder of record)
who is holding Common Shares and/or Preferred Shares for a Beneficial Owner
shall provide to the Trust such information as the Trust may reasonably
request in order to determine the Trust's status as a REIT, to comply with
the requirements of any taxing authority or governmental agency or to
determine any such compliance.
Section 4.7. OTHER ACTION BY BOARD. Subject to Section 4.22,
notwithstanding any other provisions of this Article IV, nothing contained in
this Article IV shall limit the authority of the Board of Trustees to take
such other action as it deems necessary or advisable to protect the Trust and
the interests of its shareholders by preservation of the Trust's status as a
REIT.
Section 4.8. AMBIGUITIES. In the case of an ambiguity in the
application of any of the provisions of this Article IV, including any
definition contained in Section 4.1, the Board of Trustees shall have the
power to determine the application of the provisions of this Article IV with
respect to any situation based on the facts known to it.
Section 4.9. MODIFICATION OF EXISTING HOLDER LIMITS. Subject to the
limitations provided in Section 4.11 of this Article IV, an Existing Holder
may elect to participate in a dividend reinvestment plan approved by the
Board of Trustees of the Trust which results in Beneficial Ownership of
Common Shares and/or Preferred Shares by such participating Existing Holder.
Any such participation shall increase the Existing Holder Limit for the
affected Existing Holder to the maximum extent possible under Section 4.11 to
permit Beneficial Ownership of the Common Shares and/or Preferred Shares
acquired as a result of such participation.
Section 4.10. INCREASE IN OWNERSHIP LIMIT. Subject to the limitations
provided in Section 4.11 of this Article IV, the Board of Trustees may from
time to time increase the Ownership Limit.
Section 4.11. LIMITATIONS ON CHANGES IN OWNERSHIP LIMIT. (i) Neither
the Ownership Limit nor the Existing Holder Limit may be increased (nor may
any additional Existing Holder Limit be created) if, after giving effect to
such increase (or creation), five Beneficial Owners of Equity Shares
(including all of the then Existing Holders) could Beneficially Own, in the
aggregate, more than 50% in number or value of the outstanding Equity Shares.
(ii) Prior to the modification of the Ownership Limit or
Existing Holder Limit pursuant to Sections 4.9 or 4.10 of this Article IV,
the Board of Trustees of the Trust shall require such opinions of counsel,
affidavits, undertakings or agreements as it may deem necessary to advisable
in order to ensure the Trust's status as a REIT will not be affected.
(iii) No Existing Holder Limit shall be reduced to a
percentage which is less than the Ownership Limit.
Section 4.12. EXEMPTIONS BY BOARD. The Board of Trustees, upon receipt
of a ruling from the Internal Revenue Service or an opinion of counsel or
other evidence satisfactory to the Board of Trustees and upon at least 15
days written notice from a Transferee prior to a proposed Transfer which, if
consummated, would result in the intended Transferee owning shares in excess
of Ownership Limit or Existing Holder Limit, as the case may be, and upon
such other conditions as the Board of Trustees may direct, may exempt a
Person from the Ownership Limit or the Existing Holder Limit, as the case may
be.
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Section 4.13. LEGEND. Each certificate for Common Shares and for
Preferred Shares shall bear substantially the following legend:
The securities represented by this certificate are subject
to restrictions on transfer for the purpose of the Trust's
maintenance of its status as a real estate investment trust
under the Internal Revenue Code of 1986, as amended. Except
as otherwise provided pursuant to the Declaration of Trust
of the Trust, no Person may Beneficially Own Common Shares
and/or Preferred Shares in excess of 9.8% (or such greater
percentage as may be determined by the Board of Trustees of
the Trust) of the number or value of the outstanding Equity
Shares of the Trust (unless such Person is an Existing
Holder). Any Person who attempts or proposes to
Beneficially Own Common Shares and/or Preferred Shares in
excess of the above limitations must notify the Trust in
writing at least 15 days prior to such proposed or attempted
Transfer. All capitalized terms in this legend have the
meanings defined in the Declaration of Trust of the Trust, a
copy of which, including the restrictions on transfer, will
be sent without charge to each shareholder who so requests.
If the restrictions on transfer are violated, the securities
represented hereby will be designated and treated as Excess
Shares which will be held in trust by the Trust.
Section 4.14. SEVERABILITY. If any provision of this Article IV or any
application of any such provision is determined to be void, invalid or
unenforceable by any court having jurisdiction over the issue, the validity
and enforceability 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.
Section 4.15. SPECIAL TRUST FOR EXCESS SHARES. Upon any purported
Transfer that results in Excess Shares pursuant to Section 4.3 of this
Article IV, such Excess Shares shall be deemed to have been transferred to
the Trust, as Trustee of a Special Trust for the benefit of such Beneficiary
or Beneficiaries to whom an interest in such Excess Shares may later be
transferred pursuant to Section 4.18 of this Article IV. Excess Shares so
held in the Special Trust shall be issued and outstanding shares of the
Trust. The Purported Record Transferee shall have no rights in such Excess
Shares except the right to designate a transferee of such Excess Shares upon
the terms specified in Section 4.18 of this Article IV. The Purported
Beneficial Transferee shall have no rights in such Excess Shares except as
provided in Section 4.18 of this Article IV.
Section 4.16. NO DIVIDENDS OR DISTRIBUTIONS FOR EXCESS SHARES. Excess
Shares shall not be entitled to any distributions or dividends. Any dividend
or distribution paid prior to the discovery by the Trust that the Common
Shares and/or Preferred Shares have been Transferred so as to be deemed
Excess Shares shall be repaid to the Trust upon demand.
Section 4.17. LIQUIDATION DISTRIBUTIONS FOR EXCESS SHARES. Subject to
the preferential rights of the Preferred Shares, if any, as may be determined
by the Board of Trustees of the Trust, in the event of any voluntary or
involuntary liquidation, dissolution or winding up of, or any other
distribution of all or substantially all of the assets of, the Trust, each
holder of Excess Shares shall be entitled to receive, in the case of Excess
Shares constituting Preferred Shares, ratably with each other holder of
Preferred Shares and Excess Shares constituting Preferred Shares and, in the
case of Excess Shares constituting
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Common Shares, ratably with each other holder of Common Shares and Excess
Shares constituting Common Shares, that portion of the assets of the Trust
available for distribution to its shareholders as the number of Excess Shares
held by such holder bears to the total number of shares of (i) Preferred
Shares and Excess Shares then outstanding in the case of Excess Shares
constituting Preferred Shares and (ii) Common Shares and Excess Shares then
outstanding in the case of Excess Shares constituting Common Shares. The
Trust, as holder of the Excess Shares in the Special Trust, or if the Trust
shall have been dissolved, any trustee appointed by the Trust prior to its
dissolution, shall distribute ratably to the Beneficiaries of the Special
Trust, when determined, any such assets received in respect of the Excess
Shares in any liquidation, dissolution or winding up of, or any distribution
of the assets of the Trust.
Section 4.18. VOTING RIGHTS FOR EXCESS SHARES. The holders of Excess
Shares shall not be entitled to vote on any matter.
Section 4.19. NON-TRANSFERABILITY OF EXCESS SHARES. Subject to Section
4.22, Excess Shares shall not be transferable. The Purported Record
Transferee may freely designate a Beneficiary of an interest in the Special
Trust (representing the number of shares of Excess Shares held by the Special
Trust attributable to a purported Transfer that resulted in the Excess
Shares), if (i) the shares of Excess Shares held in the Special Trust would
not be Excess Shares in the hands of such Beneficiary and (ii) the Purported
Beneficial Transferee does not receive a price for designating such
Beneficiary that reflects a price per share for such Excess Shares that
exceeds (x) the price per share such Purported Beneficial Transferee paid for
the Common Shares and/or Preferred Shares, as the case may be, in the
purported Transfer that resulted in the Excess Shares, or (y) if the
Purported Beneficial Transferee did not give value for such Excess Shares
(through a gift, devise or other transaction), a price per share equal to the
Market Price for Excess Shares on the date of the purported Transfer that
resulted in the Excess Shares. Upon such transfer of an interest in the
Special Trust, the corresponding Excess Shares in the Special Trust shall be
automatically exchanged for an equal number of Common Shares and/or Preferred
Shares, as applicable, and such Common Shares and/or Preferred Shares, as
applicable, shall be transferred of record to the transferee of the interest
in the Special Trust if such Common Shares and/or Preferred Shares, as
applicable, would not be Excess Shares in the hands of such transferee.
Prior to any transfer of any interest in the Trust, the Purported Record
Transferee must give advance notice to the Special Trust of the intended
transfer and the Special Trust must have waived in writing its purchase
rights under Section 4.20 of this Article IV.
Notwithstanding the foregoing, if a Purported Beneficial Transferee
receives a price for designating a Beneficiary of an interest in the Special
Trust that exceeds the amounts allowable under this Section 4.19 of this
Article IV, such Purported Beneficial Transferee shall pay, or cause such
Beneficiary to pay such excess to the Trust.
If any of the foregoing restrictions on transfer of Excess Shares
are determined to be void, invalid or unenforceable by any court of competent
jurisdiction, then the Purported Record Transferee may be deemed, at the
option of the Company, to have acted as an agent of the Company in acquiring
such Excess Shares and to hold such Excess Shares on behalf of the Company.
Section 4.20. CALL BY TRUST ON EXCESS SHARES. Excess Shares shall be
deemed to have been offered for sale to the Trust, or its designee, at a
price per share equal to the lesser of (i) the price per share in the
transaction that created such Excess Shares, (or, in the case of a devise or
gift, the Market Price at the time of such devise or gift) and (ii) the
Market Price of the Common Shares or Preferred Shares to which such Excess
Shares relates on the date the Trust, or its designee, accepts such offer.
The Trust shall have the right to accept such offer for a period of ninety
days after the later of (i) the date of
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<PAGE>
the Transfer which resulted in such Excess Shares and (ii) the date the Board
of Trustees determines in good faith that a Transfer resulting in Excess
Shares has occurred, if the Trust does not receive a notice of such Transfer
pursuant to Section 4.5 of this Article IV but in no event later than a
permitted Transfer pursuant to and in compliance with the terms of Section
4.19 of this Article IV.
Section 4.21. INVALIDITY. If any provision of this Article IV or any
application of such provision is determined to be invalid by any federal or
state court having jurisdiction over the issue, the validity of the remaining
provisions shall not be affected except only to the extent necessary to
comply with the determination of such court.
Section 4.22. SETTLEMENTS ON A NATIONAL SECURITIES EXCHANGE. Nothing
in Article IV shall preclude the settlement of any transaction entered into
through the facilities of the New York Stock Exchange or any other national
securities exchange or automated inter-dealer quotation system. The
immediately foregoing sentence shall not limit the authority of the Board of
Trustees to take any and all actions it deems necessary or advisable to
protect the Trust and the interests of the Shareholders in preserving the
Trust status as a REIT, so long as such actions do not prohibit the
settlement of any transactions entered into through the facilities of the New
York Stock Exchange or any other national securities exchange or automated
inter-dealer quotation system. The fact that the settlement is so permitted
shall not negate the effect of any other provision of this Article IV, and
any transferee in such a transaction and the Shares so transferred shall be
subject to all of the provisions and limitations set forth in this Article IV.
ARTICLE V
AMENDMENTS
Section 5.1. POWER TO AMEND. The Trust reserves the right from time
to time to make any amendment to this Declaration of Trust, now or hereafter
authorized by law, including any amendment altering the terms or contract
rights, as expressly set forth in this Declaration of Trust, of any shares of
outstanding stock. All rights and powers conferred by this Declaration of
Trust on shareholders, Trustees and officers are granted subject to this
reservation.
Section 5.2. BY SHAREHOLDERS. Except as provided in Section 5.3
below, any amendment to this Declaration of Trust shall be valid only if such
amendment shall have been approved by the affirmative vote of two-thirds of
all the votes entitled to be cast on the matter except to the extent Maryland
law requires a higher vote.
Section 5.3. BY TRUSTEES. The Trustees, by a two-thirds vote, may
amend provisions of this Declaration of Trust from time to time to enable the
Trust to qualify as a real estate investment trust under the Code or under
Title 8.
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<PAGE>
ARTICLE VI
LIMITATION OF LIABILITY
Section 6.1. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY. No
shareholder or Trustee shall be liable for any debt, claim, demand, judgment or
obligation of any kind of, against or with respect to the Trust by reason of his
being a shareholder or Trustee, nor shall any shareholder or Trustee be subject
to any personal liability whatsoever, in tort, contract or otherwise, to any
person in connection with the Trust Property or the affairs of the Trust.
Section 6.2. LIMITATION OF TRUSTEE AND OFFICER LIABILITY. To the
maximum extent that Maryland law in effect from time to time permits
limitation of the liability of Trustees and officers of a real estate
investment trust, no Trustee or officer of the Trust shall be liable to the
Trust or to any shareholder for money damages. Neither the amendment nor
repeal of this Section, nor the adoption or amendment of any other provision
of this Declaration of Trust inconsistent with this Section, shall apply to
or affect in any respect the applicability of the preceding sentence with
respect to any act or failure to act which occurred prior to such amendment,
repeal or adoption. In the absence of any Maryland statute limiting the
liability of Trustees and officers of a Maryland real estate investment trust
for money damages in a suit by or on behalf of the Trust or by any
shareholder, no Trustee or officer of the Trust shall be liable to the Trust
or to any shareholder for money damages except to the extent that (a) the
Trustee or officer actually received an improper benefit or profit in money,
property or services, for the amount of the benefit or profit in money,
property or services actually received or (b) a judgment or other final
adjudication adverse to the Trustee or officer is entered in a proceeding
based on a finding in the proceeding that the Trustee's or officer'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.
Section 6.3. EXPRESS EXCULPATORY CLAUSES. Neither the shareholders
nor the Trustees, officers, employees or agents of the Trust shall be liable
under any written instrument creating an obligation of the Trust, and all
persons shall look solely to the property of the Trust for the payment of any
claim under or for the performance of that instrument. The omission of the
foregoing exculpatory language from any instrument shall not affect the
validity or enforceability of such instrument and shall not render any
shareholder, Trustee, officer, employee or agent liable thereunder to any
third party, nor shall the Trustees or any officer, employee or agent of the
Trust be liable to anyone for such omission.
ARTICLE VII
NOMINATION AND BUSINESS PROCEDURES
Section 7.1. GENERAL. At a meeting of the shareholders, no business
shall be conducted which has not been properly brought before the meeting as
set forth in this Article VII. To be property brought before a meeting,
business must be brought before the meeting by or at the direction of the
Board of Trustees or brought before the meeting by a shareholder. For
business to be properly brought before a meeting by a shareholder, the
Secretary of the Trust must have received written notice not less than sixty
(60) days nor more than ninety (90) days prior to the date fixed by the Board
of Trustees for such meeting; provided, however, that in the event that less
than seventy (70) days' notice or prior public disclosure is given or made to
shareholders of the date of such meeting, notice by a shareholder to be
timely made must be received no later than the close of business on the tenth
(10th) day following the day on which such notice of the date of the meeting
was mailed or the public disclosure was made.
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<PAGE>
Section 7.2. BOARD OF TRUSTEE NOMINATIONS. In the case of shareholder
nominations for election to the Board of Trustees, the notice set forth in
Section 7.1 shall set forth (i) the name, age, business address and, if
known, residence address of each nominee proposed in such notice, (ii) the
principal occupations or employment of each such nominee for the past five
(5) years, (iii), the number of shares of the Trust which are beneficially
owned by each such nominee, (iv) other trusteeships held by each such
nominee, (v) the names of business entities of which each such nominee owns a
ten percent (10%) or more beneficial interest, and (vi) all other information
with respect to the nominees required by the Federal proxy rules in effect at
the time the notice is submitted. In addition, such notice shall be
accompanied by a statement, over the signature of each proposed nominee, that
he consents to being a nominee, if elected he intends to serve as a Trustee,
and confirming the information with respect to him set forth in the notice.
Section 7.3. SHAREHOLDER PROPOSALS. In the case of shareholder
proposals or business other than the election of Trustees, the notice set
forth in Section 7.1 shall set forth (i) a brief description of the proposal
or business to be brought before the meeting, (ii) the name, age, business
and residence address of the shareholder submitting the proposal or business,
(iii) the principal occupation or employment of that shareholder, (iv) the
number of shares of the Trust which are beneficially owned by that
shareholder, and (v) any material interest of that shareholder in the
proposal or business to be brought before the meeting.
Section 7.4. DETERMINATIONS BY CHAIRMAN. The Chairman of any meeting
in respect of which a shareholder nomination or proposal has been submitted,
may, if the facts as determined by the Chairman in his sole discretion
warrant, determine and declare to the meeting that the shareholder nomination
or proposal was not made in accordance with the procedures set forth in this
Article VII, in which event the defective nomination or proposal shall not be
considered at such meeting and shall be disregarded and no votes cast either
for or against such nomination or proposal shall be counted or, in the event
votes have previously been cast for or against such nomination or proposal,
the duly appointed inspectors for such meeting shall disregard any such votes.
Section 7.5. EXCLUSIVITY. Notwithstanding anything in this
Declaration of Trust or the By-Laws of this Trust to the contrary, no
elections, proposals or other business shall be conducted at any meeting of
the shareholders except in accordance with the procedures set forth in this
Article VII.
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<PAGE>
ARTICLE VIII
QUORUM
At an annual meeting of the shareholders called for the sole purpose of
electing Trustees and ratifying the selection of the Trust's independent
public accountants, the holders of one-third of the outstanding shares of the
Trust entitled to vote, present in person or represented by proxy, shall
constitute a quorum at such annual meeting of shareholders; provided, if less
than one-third of the outstanding shares entitled to vote are represented at
said meeting, a majority of the shares so represented may adjourn the meeting
at any time without further notice. At any other annual meeting or any
special meeting of shareholders, the holders of a majority of the outstanding
shares of the Trust entitled to vote, present in person or represented by
proxy, shall constitute a quorum at such meeting of shareholders; provided,
if less than a majority of the outstanding shares entitled to vote are
represented at said meeting, a majority of the shares so represented may
adjourn the meeting at any time without further notice. If a quorum is
present at any meeting of the shareholders, the affirmative vote of the
majority of the shares entitled to vote represented at the meeting and
entitled to vote on the matter shall be the act of the shareholders, unless a
greater vote is required by this Declaration of Trust or Title 8. At any
adjourned meeting at which a quorum shall be present, any business may be
transacted which might have been transacted at the original meeting.
Withdrawal of shareholders from any meeting shall not cause failure of a duly
constituted quorum at that meeting.
ARTICLE IX
MISCELLANEOUS
Section 9.1. CONSTRUCTION. This Declaration of Trust shall be
construed in such a manner as to give effect to the intent and purposes of
the Trust and this Declaration of Trust. If any provisions hereof appear to
be in conflict, more specific provisions shall control over general
provisions. This Declaration of Trust shall govern all of the relationships
among the Trustees and shareholders of the Trust; and each provision hereof
shall be effective for all purposes and to all persons dealing with the Trust
to the fullest extent possible under applicable law in each jurisdiction in
which the Trust shall engage in business. In defining or interpreting the
powers and duties of the Trust and the Trustees and officers, reference may
be made, to the extent appropriate and not inconsistent with the Code or
Title 8, to Titles 1 through 3 of the Corporations and Associations Article
of the Annotated Code of Maryland. In furtherance and not in limitation of
the foregoing, in accordance with the provisions of Title 3, Subtitles 6 and
7, of the Corporations and Associations Article of the Annotated Code of
Maryland, the Trust shall be included within the definition of "corporation"
for purposes of such provisions.
Section 9.2. HEADINGS FOR REFERENCE ONLY. Headings preceding the
text, articles and sections hereof have been inserted solely for convenience
and reference, and shall not be construed to affect the meaning, construction
or effect of this Declaration of Trust.
Section 9.3. FILING AND RECORDING. This Declaration of Trust and any
amendment hereto shall be filed for record with the State Department of
Assessments and Taxation of Maryland and may also be filed or recorded in
such other places as the Trustees deem appropriate, but failure to file for
record this Declaration of Trust or any amendment hereto in any office other
than in the State of Maryland shall not affect or impair the validity or
effectiveness of this Declaration of Trust or any amendment hereto. An
amended Declaration of Trust shall, upon filing, be conclusive evidence of
all amendments contained therein and may thereafter be referred to in lieu of
the original Declaration of Trust and the various amendments thereto.
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<PAGE>
Section 9.4. APPLICABLE LAW. This Declaration of Trust has been
executed with reference to and its construction and interpretation shall be
governed by the laws of Maryland, and the rights of all parties and the
construction and effect of every provision hereof shall be subject to and
construed according to the laws of Maryland.
Section 9.5. CERTIFICATIONS. Any certificates signed by a person who,
according to the records of the State Department of Assessments and Taxation
of Maryland, appears to be a Trustee hereunder, shall be conclusive evidence
as to the matters so certified in favor of any person dealing with the Trust
or the Trustees or any one or more of them, and the successors or assigns of
such persons, which certificate may certify to any matter relating to the
affairs of the Trust, including but not limited to any of the following: a
vacancy among the Trustees; the number and identity of Trustees; this
Declaration of Trust and any amendments thereto, or any restated Declaration
of Trust and any amendments thereto, or that there are no amendments to the
Declaration of Trust or any restated Declaration of Trust; a copy of the
By-Laws of the Trust or any amendment thereto; the due authorization of the
execution of any instrument or writing; the vote at any meeting of Trustees
or a committee thereof or shareholders; the fact that the number of Trustees
present at any meeting or executing any written instrument satisfies the
requirements of the Declaration of Trust; a copy of any By-Law adopted by the
shareholders or the identity of any officer elected by the Trustees; or the
existence or nonexistence of any fact or facts which in any manner relate to
the affairs of the Trust. If the Declaration of Trust or any restated
Declaration of Trust is filed or recorded in any recording office other than
the State Department of Assessments and Taxation of Maryland, anyone dealing
with real estate so located that instruments affecting the same should be
filed or recorded in such recording office may rely conclusively upon any
certificate of the kind described above which is signed by a person who
according to the records of such recording office appears to be a Trustee
hereunder. In addition, the Secretary or any Assistant Secretary of the
Trust or any other officer of the Trust designated by the By-Laws or by
action of the Trustees may sign any certificate of the kind described in this
Section 9.5, and such certificate shall be conclusive evidence as to the
matters so certified in favor of any person dealing with the Trust, and the
successors and assigns of such person.
Section 9.6. SEVERABILITY. If any provision of the Declaration of
Trust shall be invalid or unenforceable, such invalidity or unenforceability
shall attach only to such provision and shall not in any manner affect or
render invalid or unenforceable any other provision of the Declaration of
Trust, and the Declaration of Trust shall be carried out, if possible, as if
such invalid or unenforceable provision were not contained therein.
Section 9.7. ANNUAL MEETING OF SHAREHOLDERS. An annual meeting of the
shareholders shall be held each year for the purpose of electing Trustees and
for the transaction of such other business as may come before the meeting.
The date of the annual meeting shall be set by the Board of Trustees on a
date following the availability of the trust's audited financial statements
of the preceding year but in no event later than May 31, after delivery of
the Trust's annual report. The annual meeting of shareholders shall be held
at a convenient location and on proper notice as provided in the By-Laws of
the Trust.
Section 9.8. BY-LAWS. The By-Laws of the Trust may be altered,
amended or repealed, and new By-Laws may be adopted, at any meeting of the
Board of Trustees of the Trust by a majority vote of the Trustees, subject to
repeal or change of any such amendment by the affirmative vote of a majority
of the shareholders of the Trust entitled to vote thereon.
Section 9.9. COUNTERPARTS. This Declaration of Trust may be executed
in any number of counterparts, all of which taken together shall constitute
one Declaration of Trust.
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<PAGE>
IN WITNESS WHEREOF, each of the undersigned has executed this
Declaration of Trust on this 12th day of August, 1997 and each of the
undersigned acknowledges the same to be his act.
/s/ Martin Barber
----------------------------------------
Martin Barber, Trustee
/s/ John S. Gates, Jr.
----------------------------------------
John S. Gates, Jr., Trustee
/s/ Robert L. Stovall
----------------------------------------
Robert L. Stovall, Trustee
/s/ Nichlas C. Babson
----------------------------------------
Nicholas C. Babson, Trustee
/s/ Alan D. Feld
----------------------------------------
Alan D. Feld, Trustee
/s/ John J. Kinsella
----------------------------------------
John J. Kinsella, Trustee
/s/ Thomas E. Robinson
----------------------------------------
Thomas E. Robinson, Trustee
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<PAGE>
<PAGE>
EXHIBIT C
BY-LAWS
OF
CENTERPOINT PROPERTIES TRUST
ARTICLE I
OFFICES
SECTION 1.1 MARYLAND REGISTERED OFFICE. The trust shall continuously
maintain in the State of Maryland a registered office and registered agent
whose office is identical with such registered office.
SECTION 1.2 OTHER OFFICES. The trust may have other offices within
any other state of the United States, including, without limitation, the
State of Illinois.
ARTICLE II
SHAREHOLDERS
SECTION 2.1 ANNUAL MEETING. An annual meeting of the shareholders
shall be held each year for the purpose of electing trustees and for the
transaction of such other business as may come before the meeting. The date
of the annual meeting shall be set by the board of trustees on a date
following the availability of the trust's audited financial statements of the
preceding year but in no event later than May 31.
SECTION 2.2 SPECIAL MEETINGS. Special meetings of the shareholders
may be called either by the President or the board of trustees. Special
meetings of shareholders shall also be called by the secretary upon the
written request of the holders of shares entitled to cast not less than 25%
of all the votes entitled to be cast at such meeting. Such request shall
state the purpose of such meeting and the matters proposed to be acted on at
such meeting. The secretary shall inform such shareholders of the reasonably
estimated cost of preparing and mailing notice of the meeting and, upon
payment by such shareholders to the trust of such costs, the secretary shall
give notice to each shareholder entitled to notice of the meeting. Unless
requested by shareholders entitled to cast a majority of all the votes
entitled to be cast at such meeting, a special meeting need not be called to
consider any matter which is substantially the same as a matter voted on at
any meeting of the shareholders held during the preceding twelve months.
SECTION 2.3 PLACE OF MEETING. The board of trustees may designate
any place the place of meeting for any annual meeting or for any special
meeting called by the board of trustees. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall be at the
main offices of the trust in Chicago, Illinois.
SECTION 2.4 INFORMAL ACTION BY SHAREHOLDERS. Any action required to
be taken at a meeting of the shareholders, or any other action which may be
taken at a meeting of the shareholders, if a consent in writing, setting
forth such action, is signed by each shareholder entitled to vote on the
matter and any other shareholder entitled to notice of a meeting of the
shareholders (but not to vote thereat) has
<PAGE>
waived in writing any right to dissent from such action, and such consent and
waiver are filed with the minutes of proceedings of the shareholders.
SECTION 2.5 NOTICE OF MEETINGS. Written notice stating the place,
date and hour of the meeting, and in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not
less than ten nor more than ninety days before the date of the meeting, or in
the case of a merger, consolidation, share exchange, dissolution or sale,
lease or exchange of assets, not less than twenty nor more than sixty days
before the meeting, either personally or by mail, by or at the direction of
the president, or the board of trustees, to each shareholder of record
entitled to vote at such meeting. If mailed, such notice shall be deemed to
be delivered when deposited with the United States Postal Service, addressed
to the shareholder at his address as it appears on the records of the trust,
with postage thereon prepaid. When a meeting is adjourned to another time or
place, notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken.
SECTION 2.6 FIXING OF RECORD DATE. For the purpose of determining
the shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or to receive payment of any
dividend, or any rights in respect of any change, conversion or exchange of
shares or for the purpose of any other lawful action, the board of trustees
of the trust may fix in advance a record date which shall not be more than
sixty days and, for a meeting of shareholders, not less than twenty days, or
in the case of a merger, consolidation, share exchange, dissolution or sale,
lease or exchange of assets, not less than twenty days, immediately preceding
the date of such meeting. If no record date is fixed, the record date for
the determination of shareholders entitled to notice of or to vote at a
meeting of shareholders shall be the date on which notice of the meeting is
mailed, and the record date for the determination of shareholders for any
other purpose shall be the date on which the board of trustees adopts the
resolution relating thereto. A determination of shareholders of record
entitled to notice of or to vote at a meeting of shareholders shall apply to
any adjournment of the meeting.
SECTION 2.7 SHAREHOLDERS' LIST. The officer or agent having charge
of the transfer books for shares of the trust shall make, within twenty days
after record date or twenty days before each meeting of shareholders,
whichever is earlier, a complete list of the shareholders entitled to vote at
such meeting, arranged in alphabetical order, showing the address of and the
number of shares registered in the name of the shareholder, which list, for a
period of twenty days prior to such meeting, shall be kept on file at the
registered office of the Trust and shall be open to inspection by any
shareholder for any purpose germane to the meeting, at any time during usual
business hours. Such list shall also be produced and kept open at the time
and place of the meeting and may be inspected by any shareholder during the
whole time of the meeting. The original share ledger or transfer book, or a
duplicate thereof kept in the State of Illinois, shall be prima facie
evidence as to who are the shareholders entitled to examine such list or
share ledger or transfer book or to vote at any meeting of shareholders.
SECTION 2.8 VOTING OF SHARES. A plurality of all the votes cast at a
meeting of shareholders duly called and at which a quorum is present shall be
sufficient to elect a trustee. Each share may be voted for as many
individuals as there are trustees to be elected and for whose election the
share is entitled to vote. No shareholder shall have the right to cumulate
his votes in elections for trustees. A majority of the votes cast at a
meeting of shareholders duly called and at which a quorum is present shall be
sufficient to approve any other matter which may properly come before the
meeting, unless a greater vote is required by statute or by the declaration
of trust. Except as otherwise provided in the declaration of trust or these
by-laws, each outstanding share, regardless of class, shall be entitled to
one vote upon each matter submitted to vote at a meeting of shareholders.
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SECTION 2.9 VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in
the name of another trust or corporation, domestic or foreign, may be voted
by such officer, agent, or proxy as the by-laws of such trust or corporation
may prescribe, or, in the absence of such provision, as the board of trustees
or directors of such trust may or corporation determine and under the law of
the state or organization of such trust or the state of incorporation of such
corporation.
(a) Shares standing in the name of a deceased person, a minor ward or
an incompetent person, may be voted by his administrator, executor, court
appointed guardian, or conservator, either in person or by proxy without a
transfer of such shares in the name of such administrator, executor, court
appointed guardian, or conservator. Shares standing in the name of a
trustee may be voted by him, either in person or by proxy.
(b) Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be
voted by such receiver without the transfer thereof into his name if
authority so to do be contained in an appropriate order of the court by
which such receiver was appointed.
(c) A shareholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred into the name of the
pledgee, and thereafter the pledgee shall be entitled to vote the shares so
transferred.
(d) Any number of shareholders may create a voting trust for the
purpose of conferring upon a trustee or trustees the right to vote or
otherwise represent their share, for a period not to exceed ten years, by
entering into a written voting trust agreement specifying the terms and
conditions of the voting trust, and by transferring their shares to such
trustee or trustees for the purpose of the agreement. Any such trust
agreement shall not become effective until a counterpart of the agreement
is deposited with the trust at its registered office. The counterpart of
the voting trust agreement so deposited with the trust shall be subject to
the same right of examination by a shareholder of the trust, in person or
by agent or attorney, as are the books and records of the trust, and shall
be subject to examination by any holder of a beneficial interest in the
voting trust, either in person or by agent or attorney, at any reasonable
time for any proper purpose.
(e) Shareholders may provide for the voting of their shares by
signing an agreement for that purpose. A voting agreement under this
subsection is not subject to the provisions of subsection (a) above.
(f) Shares of its own stock belonging to this trust shall not be
voted, directly or indirectly, at any meeting and shall not be counted in
determining the total number of outstanding shares at any given time, but
shares of its own stock held by it in a fiduciary capacity may be voted and
shall be counted in determining the total number of outstanding shares at
any given time.
SECTION 2.10 PROXIES. Each shareholder entitled to vote at a meeting
of shareholders or to express consent or dissent to corporate action in
writing without a meeting may authorize another person or persons to act for
him by proxy by signing an appointment form and delivering it to the person
so appointed, but no such proxy shall be valid after eleven months from the
date of its execution, unless otherwise provided in the proxy.
C-3
<PAGE>
SECTION 2.11 QUORUM. At an annual meeting of the shareholders called
for the sole purpose of electing trustees and ratifying the selection of the
trust's independent public accountants, the holders of one-third of the
outstanding shares of the trust entitled to vote, present in person or
represented by proxy, shall constitute a quorum at such annual meeting of
shareholders; provided that, if less than one-third of the outstanding shares
entitled to vote are represented at said meeting, a majority of the shares so
represented may adjourn the meeting at any time without further notice. At
any other annual meeting or any special meeting of shareholders, the holders
of a majority of the outstanding shares of the trust entitled to vote,
present in person or represented by proxy, shall constitute a quorum at such
meeting of shareholders; provided that, if less than a majority of the
outstanding shares entitled to vote are represented at said meeting, a
majority of the shares so represented may adjourn the meeting at any time
without further notice. If a quorum is present at any meeting of the
shareholders, the affirmative vote of the majority of the shares entitled to
vote represented at the meeting and entitled to vote on the matter shall be
the act of the shareholders, unless a greater vote is required under the
Declaration of Trust or Maryland law. At any adjourned meeting at which a
quorum shall be present, any business may be transacted which might have been
transacted at the original meeting. Withdrawal of shareholders from any
meeting shall not cause failure of a duly constituted quorum at that meeting.
SECTION 2.12 INSPECTORS. At any meeting of shareholders, the chairman
of the meeting may, or upon request of any shareholder shall, appoint one or
more persons as inspectors for such meeting.
(a) Such inspectors shall ascertain and report the number of shares
represented at the meeting, based upon their determination of the validity
and effect of proxies; count all votes and report the results; and do such
other acts as are proper to conduct the election and voting with
impartiality and fairness to all the shareholders.
(b) Each report of an inspector shall be in writing and signed by him
or by a majority of them if there be more than one inspector acting at such
meeting. If there is more than one inspector, the report of a majority
shall be the report of the inspectors. The report of the inspector or
inspectors on the number of shares represented at the meeting and the
results of the voting shall be prima facie evidence thereof.
SECTION 2.13 VOTING BY BALLOT. Voting on any question or in any
election may be by voice unless the presiding officer shall order or any
shareholder shall demand that voting be by ballot.
SECTION 2.14 REPORTS TO SHAREHOLDERS. Prior to the annual meeting of
shareholders each year, the trustees shall deliver or cause to be delivered a
report of the business and operations of the trust during such fiscal year to
the shareholders, containing a balance sheet and a statement of income and
surplus of the trust, accompanied by the certification of an independent
certified public accountant, and such further information as the trustees may
determine is required pursuant to any law or regulation to which the trust is
subject. A signed copy of the annual report and the accountant's certificate
shall be filed by the trustees with the State Department of Assessments and
Taxation of Maryland, and with such other governmental agencies as may be
required by law and as the trustees may deem appropriate.
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ARTICLE III
TRUSTEES
SECTION 3.1 GENERAL POWERS. The business and affairs of the trust
shall be managed by, or under the direction of, its board of trustees.
SECTION 3.2 NUMBER, TENURE AND QUALIFICATIONS. The number of
trustees of the trust shall be not less than three (3) and not more than ten
(10), as determined from time to time by the then acting board of trustees.
Each trustee shall hold office until the next annual meeting of shareholders,
thereafter, until his successor shall have been elected. Trustees need not
be residents of Maryland or Illinois or shareholders of the trust. The
number of trustees may be increased or decreased from time to time as
provided by the declaration of trust by the amendment of this section; but no
decrease shall have the effect of shortening the term of any incumbent
trustee. A trustee may resign at any time by giving written notice to the
board of trustees, its chairman, or to the president or secretary of the
trust. A resignation is effective when the notice is given unless the notice
specifies a future date. The pending vacancy may be filled before the
effective date, but the successor shall not take office until the effective
date. A majority of the number of trustees of the Board of Trustees shall be
independent (non-management) trustees of the trust.
SECTION 3.3 QUORUM. A majority of the number of trustees fixed by
these by-laws shall constitute a quorum for transaction of business at any
meeting of the board of trustees, provided that if less than a majority of
such number of trustees are present at said meeting, a majority of the
trustees present may adjourn the meeting at any time without further notice.
SECTION 3.4 MANNER OF ACTING. The act of the majority of the
trustees present at a meeting at which a quorum is present shall be the act
of the board of trustees, unless the act of a greater number is required by
statute, these by-laws, or the declaration of trust.
SECTION 3.5 REGULAR MEETINGS. A regular meeting of the board of
trustees shall be held without other notice than this By-Law, immediately
after the annual meeting of shareholders. The board of trustees may provide,
by resolution, the time and place for holding of additional regular meetings
without other notice than such resolution.
SECTION 3.6 SPECIAL MEETINGS. Special meetings of the board of
trustees may be called by or at the request of the president or any one or
more trustees. The person or persons authorized to call special meetings of
the board of trustees may fix any place as the place for holding any special
meeting of the board of trustees called by them.
SECTION 3.7 NOTICE. Notice of any special meeting shall be given at
least ten days previous thereto by written notice to each trustee at his
business address. If mailed, such notice shall be deemed to be delivered
when deposited with the United States Postal Service so addressed, with
postage thereon prepaid. If notice be given by telegram, such notice shall
be deemed to be delivered when the telegram is delivered to the telegram
company. The attendance of a trustee at any meeting shall constitute a
waiver of notice of such meeting, except where a trustee attends a meeting
for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business
to be transacted at, nor the purpose of, any regular or special meeting of
the board of trustees need be specified in the notice or waiver of notice of
such meeting.
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SECTION 3.8 VACANCIES. If for any reason any or all of the trustees
cease to be trustees, such event shall not terminate the trust or affect
these by-laws or the powers of the trustees remaining hereunder (even if
fewer than three trustees remain). Any vacancy occurring in the board of
trustees and any trusteeship to be filled by reason of an increase in the
number of trustees, may be filled by (1) election at an annual meeting or at
a special meeting of shareholders or (2) by the board of trustees remaining.
A trustee elected by the shareholders to fill a vacancy shall hold office for
the balance of the term for which he or she was elected. A trustee appointed
to fill a vacancy shall serve until the next meeting of shareholders at which
trustees are to be elected.
SECTION 3.9 REMOVAL OF TRUSTEES. One or more of the trustees may be
removed, with or without cause, at a meeting of shareholders by the
affirmative vote of the holders of a majority of the outstanding shares then
entitled to vote at an election of trustees, except as follows:
(a) No trustee shall be removed at a meeting of shareholders unless
the notice of such meeting shall state that a purpose of the meeting is to
vote upon the removal of one or more trustees named in the notice. Only
the named trustee or trustees may be removed at such meeting.
(b) If a trustee is elected by a class or series of shares, he or she
may be removed only by the shareholders of that class or series.
In addition, one or more of the trustees may be removed, with or without
cause, by the board of trustees upon the affirmative vote of a majority of
the then acting trustees.
SECTION 3.10 COMMITTEES OF TRUSTEES. The board of trustees may, by
resolution or resolutions adopted by a majority of the number of trustees
fixed by the by-laws or otherwise, designate one or more committees, each
committee to consist of one or more of the trustees of the trust. The board
may designate one or more trustees as alternate members of any committee, who
may replace any absent or disqualified member at any meeting of the
committee. Any such committee, to the extent provided in the resolution of
the board, shall have and may exercise all of the powers and authority of the
board of trustees in the management of the business and affairs of the trust,
and may authorize the seal of the trust to be affixed to all papers which may
require it; but no such committee shall have the power of authority in
reference to amending the declaration of trust; adopting an agreement of
merger or consolidation; recommending to the shareholders the sale, lease or
exchange of all or substantially all of the trust's property and assets;
recommending to the shareholders a dissolution of the trust or a revocation
of a dissolution; recommending to the shareholders any other action which
requires shareholder approval; amending the by-laws of the trust; declaring a
dividend or authorizing the issuance of distributions on stock; or issue
stock other than pursuant to a stock option or similar compensation plan.
Such committee or committees shall have such name or names as may be
determined by the board of trustees. The committees shall keep regular
minutes of their proceedings and report the same to the full board of
trustees when required.
SECTION 3.11 ACTION WITHOUT A MEETING. Unless specifically prohibited
by the declaration of trust or these by-laws, any action required to be taken
at a meeting of the board of trustees, or any other action which may be taken
at a meeting of the board of trustees, or of any committee thereof may be
taken without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all the trustees entitled to vote with respect to
the subject matter thereof, or by all the members of such committee, as the
case may be. Any such consent signed by all the trustees or all the members
of the committee shall have the same effect as a unanimous vote.
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SECTION 3.12 COMPENSATION. The board of trustees, by the affirmative
vote of a majority of trustees then in office, and irrespective of any
personal interest of any of its members, shall have authority to establish
reasonable compensation of all trustees for services to the trust as
trustees, officers, or otherwise. By resolution of the board of trustees,
the trustees may be paid their expenses, if any, of attendance at each
meeting of the board. No such payment previously mentioned in this section
shall preclude any trustee from serving the trust in any other capacity and
receiving compensation therefor. Members of committees of the board may be
allowed like compensation for attending committee meetings.
SECTION 3.13 PRESUMPTION OF ASSENT. A trustee of the trust who is
present at a meeting of the board of trustees at which action on any
corporate matter is taken shall be conclusively presumed to have assented to
the action taken unless his dissent shall be entered in the minutes of the
meeting or unless he shall file his written dissent to such action with the
person acting as the secretary of the meeting before the adjournment thereof
or shall forward such dissent by registered mail to the secretary of the
trust immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a trustee who voted in favor of such action.
SECTION 3.14 LOSS OF DEPOSITS. No trustee shall be liable for any
loss which may occur by reason of the failure of the bank, trust company,
savings and loan association or other institution with whom money or shares
have been deposited.
SECTION 3.15 SURETY BONDS. Unless required by law, no trustee shall
be obligated to give any bond or surety or other security for the performance
of any of his duties.
SECTION 3.16 RELIANCE. Each trustee, officer, employee and agent of
the trust shall, in the performance of his duties with respect to the trust,
be fully justified and protected with regard to any act or failure to act in
reliance in good faith upon the books of account or other records of the
trust, upon an opinion of counsel or upon reports made to the trust by any of
its officers or employees or consultants or by the adviser, accountants,
appraisers or other experts or consultants selected by the trustees or
officers of the trust, regardless of whether such counsel or expert may also
be a trustee.
SECTION 3.17 CERTAIN RIGHTS OF TRUSTEES. The trustees shall have no
responsibility to devote their full time to the affairs of the trust and may
engage in business activities similar to or in addition to those of or
relating to the trust.
ARTICLE IV
OFFICERS
SECTION 4.1 NUMBER. The officers of the trust shall be a chairman, a
president, a secretary, a treasurer, and any number of vice presidents (who
may be designated as executive vice presidents, senior vice presidents or
non-executive vice presidents), treasurers, assistant treasurers, assistant
secretaries or other officers as may be elected by the board of trustees or,
in the case of non-executive vice presidents, appointed by the president.
Any two or more offices may be held by the same person except that for the
offices of president and vice president.
SECTION 4.2 APPOINTMENT OR ELECTION AND TERM OF OFFICE.
Non-executive vice-presidents, if any, shall be appointed by the president
and shall serve at the pleasure of the president.
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The other officers of the trust shall be elected or appointed annually by the
board of trustees at the first meeting of the board of trustees held after
each annual meeting of shareholders. If the election of officers shall not
be held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Vacancies may be filled or new offices created and
filled at any meeting of the board of trustees. Each officer elected or
appointed by the Board shall hold office until his successor shall have been
duly elected and shall have qualified or until his death or until he shall
resign or shall have been removed in the manner hereinafter provided.
Election or appointment of an officer shall not of itself create contract
rights.
SECTION 4.3 REMOVAL. Any officer elected or appointed by the board
of trustees may be removed by the board of trustees whenever in its judgment
the best interests of the trust would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
SECTION 4.4 THE CHAIRMAN. The chairman shall be the chairman of the
board of trustees. He shall advise and counsel with the president and shall
assume such other duties as from time to time may be assigned by the board of
trustees. He shall preside at all meetings of the board of trustees and, in
the absence of the president or at the president's request, shall preside at
all meetings of the shareholders. He may execute for the trust certificates
for its shares, and any contracts, deeds, mortgages, bonds, or other
instruments which the board of trustees has authorized to be executed, and he
may accomplish such execution either under or without the seal of the trust
and either individually or with the secretary, any assistant secretary, or
any other officer thereunto authorized by the board of trustees, according to
the requirements of the form of the instrument.
SECTION 4.5 VICE CHAIRMAN. The vice chairman shall assist the
chairman in the discharge of his duties as the chairman may direct and shall
perform such other duties as from time to time may be assigned to him by the
chairman or by the board of trustees. In the absence of the chairman or in
the event of his inability or refusal to act, the vice chairman shall perform
the duties of the chairman, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the chairman. Except in those
instances in which the authority to execute is expressly delegated to another
officer or agent of the trust or a different mode of execution is expressly
prescribed by the board of trustees or these by-laws, the vice chairman may
execute for the trust certificates for its shares and any contracts, deeds,
mortgages, bonds or other instruments which the board of trustees has
authorized to be executed, and he may accomplish such execution either under
or without the seal of the trust and either individually or with the
secretary, any assistant secretary, or any other officer thereunto authorized
by the board of trustees, according to the requirements of the form of the
instrument.
SECTION 4.6 THE PRESIDENT. The president shall be the chief
executive officer of the trust. Subject to the direction and control of the
board of trustees, he shall be in charge of the business of the trust; he
shall see that the resolutions and directions of the board of trustees are
carried into effect except in those instances in which that responsibility is
specifically assigned to some other person by the board of trustees; and, in
general, he shall discharge all duties incident to the office of president
and such other duties as may be prescribed by the board of trustees from time
to time. He shall preside at all meetings of the shareholders and, in the
absence of the chairman, shall preside at all meetings of the board of
trustees. Except in those instances in which the authority to execute is
expressly delegated to another officer or agent of the trust or a different
mode of execution is expressly prescribed by the board of trustees or these
by-laws, he may execute for the trust certificates for its shares, and any
contracts, deeds, mortgages, bonds, or other instruments which the board of
trustees has authorized to be executed, and he may accomplish such execution
either under or without the seal of the trust and either individually or
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with the secretary, any assistant secretary, or any other officer thereunto
authorized by the board of trustees, according to the requirements of the
form of the instrument. He may vote all securities which the trust is
entitled to vote except as and to the extent such authority shall be vested
in a different officer or agent of the trust by the board of trustees.
SECTION 4.7 EXECUTIVE VICE-PRESIDENTS AND SENIOR VICE PRESIDENTS.
The executive vice-presidents and senior vice presidents, if any, shall
assist the president in the discharge of his duties as the president may
direct and shall perform such other duties as from time to time may be
assigned to them by the president or by the board of trustees. In the
absence of the president or in the event of his inability or refusal to act,
the executive vice-presidents (or in the event there be more than one
executive vice president, the executive vice-presidents in the order
designated by the board of trustees, or by the president if the board of
trustees has not made such a designation, or in the absence of any
designation, then in the order of seniority of tenure as executive vice
president) shall perform the duties of the president. In the absence or
inability or refusal to act of the president and any executive vice
presidents, the senior vice presidents in the order designated by the board
of trustees, or by the president if the board of trustees has not made such a
designation, or in the absence of any designation, then in the order of
seniority of tenure as senior vice president) shall perform the duties of the
president. When so acting, the executive vice presidents or senior vice
presidents, as the case may be, shall have all the powers of and be subject
to all the restrictions upon the president. Except in those instances in
which the authority to execute is expressly delegated to another officer or
agent of the trust or a different mode of execution is expressly prescribed
by the board of trustees or these by-laws, the executive vice presidents and
senior vice presidents may execute for the trust certificates for its shares
and any contracts, deeds, mortgages, bonds or other instruments which the
board of trustees has authorized to be executed, and they may accomplish such
execution either under or without the seal of the trust and either
individually or with the secretary, any assistant secretary, or any other
officer thereunto authorized by the board of trustees, according to the
requirements of the form of the instrument.
SECTION 4.8 NON-EXECUTIVE VICE PRESIDENTS. Non-executive vice
presidents shall assist the president in the discharge of his duties as the
president may direct, but shall not, unless specifically authorized by the
board of trustees, have any authority to bind or commit the trust.
SECTION 4.9 THE TREASURER. The treasurer shall be the chief
operating officer and principal accounting and financial officer of the
trust. He shall:
(a) have charge of and be responsible for the maintenance of adequate
books of account for the trust;
(b) have charge and custody of all funds and securities of the trust,
and be responsible therefore and for the receipt and disbursement thereof;
and
(c) perform all the duties incident to the office of treasurer and
such other duties as from time to time may be assigned to him by the
president or by the board of trustees.
If required by the board of trustees, the treasurer shall give a bond
for the faithful discharge of his duties in such sum and with such surety or
sureties as the board of trustees may determine.
SECTION 4.10 THE SECRETARY. The secretary shall:
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(a) record the minutes of the shareholders' and of the board of
trustees' meetings in one or more books provided for that purpose;
(b) see that all notices are duly given in accordance with the
provisions of these by-laws or as required by law;
(c) be custodian of the corporate records and of the seal of the
trust;
(d) keep a register of the post office address of each shareholder
which shall be furnished to the secretary by such shareholder;
(e) sign with the chairman, vice chairman, president, or an executive
vice-president or a senior vice president, or any other officer thereunto
authorized by the board of trustees, certificates for shares of the trust,
the issue of which shall have been authorized by the board of trustees, and
any contracts, deeds, mortgages, bonds, or other instruments which the
board of trustees has authorized to be executed, according to the
requirements of the form of the instrument, except when a different mode of
execution is expressly prescribed by the board of trustees or these by-
laws;
(f) otherwise certify that by-laws, resolutions of the shareholders
and board of trustees and committees thereof, and other documents of the
trust as true and correct copies thereof;
(g) have general charge of the share transfer books of the trust; and
(h) perform all duties incident to the office of secretary and such
other duties as from time to time may be assigned to him or her by the
president or by the board of trustees.
SECTION 4.11 ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The
assistant treasurers and assistant secretaries shall perform such duties as
shall be assigned to them by the treasurer or the secretary, respectively, or
by the president or the board of trustees. The assistant secretaries may
sign with the chairman, vice chairman, president, or an executive
vice-president or senior vice president, or any other officer thereunto
authorized by the board of trustees, certificates for shares of the trust,
the issue of which shall have been authorized by the board of trustees, and
any contracts, deeds, mortgages, bonds, or other instruments which the board
of trustees has authorized to be executed, according to the requirements of
the form of the instrument, except when a different mode of execution is
expressly prescribed by the board of trustees or these by-laws. The
assistant treasurers shall respectively, if required by the board of
trustees, give bonds for the faithful discharge of their duties in such sums
and with such sureties as the board of trustees shall determine.
SECTION 4.12 SALARIES. The salaries of the officers shall be fixed
from time to time by the board of trustees, and no officer shall be prevented
from receiving such salary by reason of the fact that he is also a trustee of
the trust.
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ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 5.1 CONTRACTS. The board of trustees may authorize any
officer or officers, agent or agents, to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the trust, and
such authority may be general or confined to specific instances.
SECTION 5.2 LOANS. No loans shall be contracted on behalf of the
trust and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the board of trustees. Such authority may be
general or confined to specific instances.
SECTION 5.3 CHECKS, DRAFTS, ETC. All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness issued in
the name of the trust shall be signed by such officer or officers, agent or
agents of the trust and in such manner as shall from time to time be
determined by resolution of the board of trustees.
SECTION 5.4 DEPOSITS. All funds of the trust not otherwise employed
shall be deposited from time to time to the credit of the trust in such
banks, trust companies or other depositories as the board of trustees may
select.
ARTICLE VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 6.1 CERTIFICATES FOR SHARES. Certificates representing
shares of the trust shall be signed by the chairman, vice chairman, president
or an executive vice-president or a senior vice president or by such officer
as shall be designated by resolution of the board of trustees and by the
secretary or an assistant secretary, and shall be sealed with the seal or a
facsimile of the seal of the trust. If both of the signatures of the
officers be by facsimile, the certificate shall be countersigned by the
trust's duly authorized registrar and transfer agent. Each certificate
representing shares shall be consecutively numbered or otherwise identified,
and shall also state the name of the person to whom issued, the number and
class of shares (with designation of series, if any), the date of issue, that
the trust is organized under Maryland law, and the par value or a statement
that the shares are without par value. If the trust is authorized and does
issue shares of more than one class or of series within a class, the
certificate shall also contain such information or statement as may be
required by law. The name and address of each shareholder, the number and
class of shares held and the date on which the certificates for the shares
were issued shall be entered on the books of the trust. The person in whose
name shares stand on the books of the trust shall be deemed the owner thereof
for all purposes as regard the trust.
SECTION 6.2 LOST CERTIFICATES. If a certificate representing shares
has allegedly been lost or destroyed the board of trustees may in its
discretion, except as may be required by law, direct that a new certificate
be issued upon such indemnification and other reasonable requirements as it
may impose.
SECTION 6.3 TRANSFERS OF SHARES. Transfers of shares of the trust
shall be recorded on the books of the trust and, except in the case of a lost
or destroyed certificate, on surrender for cancellation of the certificate
for such shares. A certificate presented for transfer must be duly endorsed
and accompanied by proper guaranty of signature and other appropriate
assurances that the endorsement is effective.
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SECTION 6.4 RESTRICTION ON TRANSFER OF SECURITIES. A restriction on
the transfer or registration of transfer of securities of the trust may be
imposed either under the declaration of trust or by these by-laws or by
agreement among any number of security holders or among such holders and the
trust. No restriction so imposed shall be binding with respect to securities
issued prior to the adoption of the restriction unless the holders of the
securities are parties to an agreement or voted in favor of the restriction.
A restriction on the transfer or registration of transfer of securities
of the trust is permitted if, without limitation, it:
(i) requires the trust or the holders of any class of securities of
the trust to consent to any proposed transfer of the restricted securities
or to approve the proposed transferee of the restricted securities; or
(ii) prohibits the transfer of the restricted securities to designated
persons or classes of persons with designation is not manifestly
unreasonable; or
(iii) restricts transfer or registration of transfer in any other
lawful manner.
Unless noted conspicuously on the security, a restriction, even though
permitted by this section, is ineffective except against a person with actual
knowledge of the restriction.
ARTICLE VII
FISCAL YEAR
SECTION 7.1 DESIGNATION OF FISCAL YEAR. The fiscal year of the trust
shall end on December 31 of each year.
ARTICLE VIII
DIVIDENDS
SECTION 8.1 DECLARED BY TRUSTEES. The board of trustees may from
time to time declare, and the trust may pay, dividends on its outstanding
shares in the manner and upon the terms and conditions provided by law and
its declaration of trust.
ARTICLE IX
SEAL
SECTION 9.1 SEAL. The trustees may authorize the adoption of a seal
by the trust. The seal shall have inscribed thereon the name of the trust
and the year of its organization. The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or in any manner reproduced.
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ARTICLE X
WAIVER OF NOTICE
SECTION 10.1 WAIVER IN LIEU OF NOTICE. Whenever any notice is
required to be given under the provisions of these by-laws or under the
provisions of the declaration of trust or under the provisions of Maryland
law, a waiver thereof in writing, signed by the person or persons entitled to
such notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Attendance at any meeting shall
constitute waiver of notice thereof unless the person at the meeting objects
to the holding of the meeting because notice was not given.
ARTICLE XI
AMENDMENTS
SECTION 11.1 DETERMINED BY TRUSTEES. Unless reserved to the
shareholders by the declaration of trust or required by law, the by-laws of
the trust may be made, altered, amended or repealed solely by the board of
trustees. The by-laws may contain any provisions for the regulation and
management of the affairs of the trust not inconsistent with law or the
declaration of trust.
ARTICLE XII
INDEMNIFICATION OF OFFICERS,
TRUSTEES, EMPLOYEES AND AGENTS
SECTION 12.1 POWER TO HOLD HARMLESS. The trust shall have the power
to indemnify any person to the full extent permitted by Maryland law in
effect from time to time. Without limiting the generality of the foregoing,
the trust shall have the power, unless limited from time to time by Maryland
law, to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the trust) by reason of the fact that he
or she is or was a trustee, officer, employee or agent of the trust, or who
is or was serving at the request of the trust as a trustee, officer, employee
or agent of another trust, partnership, joint venture, corporation or other
enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if such person acted in good
faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the trust, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The termination of any action, suit or proceeding by judgment or
settlement, conviction or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in
good faith and in a manner which he or she reasonably believed to be in or
not opposed to the best interest of the trust, or with respect to any
criminal action or proceeding, that the person had reasonable cause to
believe that his or her conduct was unlawful.
SECTION 12.2 POWER TO INDEMNIFY LITIGANT. The trust shall have power
to indemnify any person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the
right of the trust to procure a judgment in its favor by reason of the fact
that such person is or was a trustee, officer, employee or agent of the
trust, or is or was serving at the request of the trust as a trustee,
officer, employee or agent of another trust, partnership, joint venture,
corporation or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by such
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person in connection with the defense or settlement of such action or suit if
such person acted in good faith and in a manner he or she reasonably believed
to be in, or not opposed to the best interests of the trust, provided that no
indemnification shall be made in respect of any claim, issue or matter as to
which such persons shall have been adjudged to be liable for negligence or
misconduct in the performance of his or her duty to the trust, unless, and
only to the extent that the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses as the court shall deem
proper.
SECTION 12.3 REIMBURSEMENT AUTHORIZED. To the extent that a trustee,
officer, employee, or agent of a trust has been successful, on the merits or
otherwise, in defense of any action, suit or proceeding referred to Sections
12.1 and 12.2 above, or in defense of any claim, issue or matter therein,
such person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection therewith to the
extent not inconsistent with the Maryland General Trust Law.
SECTION 12.4 DETERMINATION IF REIMBURSEMENT IS PROPER. Any
indemnification under Sections 12.1 and 12.2 above (unless ordered by court)
shall be made by the trust only as authorized in the specific case, upon a
determination that indemnification of a trustee, officer, employee or agent
is proper in the circumstances because he or she has met the applicable
standard of conduct set forth in Section 12.1 or 12.2 above. Such
determination shall be made:
(a) by the board of trustees by a majority of a quorum consisting of
trustees who were not parties to such action, suit or proceeding, or
(b) if such a quorum is not obtainable, or, even if obtainable, a
quorum of disinterested trustees so directs, by independent legal counsel
in a written opinion, or
(c) by the shareholders.
SECTION 12.5 ADVANCE OF EXPENSES. Expenses incurred in defending a
civil or criminal action, suit or proceeding may be paid by the trust in
advance of the final disposition of such action, suit or proceeding, as
authorized by the board of trustees in the specific case, upon receipt of an
undertaking by or on behalf of the trustee, officer, employee or agent to
repay such amount, unless it shall ultimately be determined that he or she is
entitled to be indemnified by the trust as authorized in this Article.
SECTION 12.6 NON-EXCLUSIVITY. The indemnification provided by this
article shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any contract, agreement, vote of
shareholders or disinterested trustees, or otherwise, both as to action in
his or her official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
trustee, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
SECTION 12.7 RIGHT TO ACQUIRE INSURANCE. The trust shall have power
to purchase and maintain insurance on behalf of any person who is or was a
trustee, officer, employee or agent of the trust, or is or was serving at the
request of the trust, as a trustee, officer, employee or agent of another
trust, partnership, joint venture, trust or other enterprise, against any
liability asserted against such person and incurred by such person in any
such capacity, or arising out of his status as such, whether or not the
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<PAGE>
trust would have the power to indemnify him or her against such liability
under the provisions of this Article.
SECTION 12.8 NOTICE OF SHAREHOLDERS. If a trust has paid indemnity or
has advanced expenses to a trustee, officer, employee or agent, the trust
shall report the indemnification or advance in writing to the shareholders
with or before the notice of the next shareholders' meeting.
SECTION 12.9 "TRUST;" DEFINITION. For purposes of this Article,
references to "the Trust" shall include, in addition to the surviving
corporation or trust, any merging corporation or trust (including any
corporation or trust having merged with a merging corporation or trust)
absorbed in a merger which, if its separate existence had continued, would
have had the power and authority to indemnify its trustees, officers, and
employees or agents, so that any person who was a trustee, officer, employee
or agent of such merging corporation or trust, or was serving at the request
of such merging trust as a trustee, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall
stand in the same position under the provisions of this Article with respect
to the surviving corporation or trust as such person would have with respect
to such merging corporation or trust if its separate existence had continued.
SECTION 12.10 MISCELLANEOUS DEFINITIONS. For purposes of this Article,
references to "other enterprises" shall include employee benefit plans;
reference to "fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving at the
request of the trust" shall include any services as a trustee, officer,
employee or agent of the trust which imposes duties on, or involves services
by such trustee, officer, employee, or agent with respect to an employee
benefit plan, its participants, or beneficiaries. A person who acted in good
faith and in a manner he or she reasonably believed to be in the best
interests of the participants and beneficiaries of an employee benefit plan
shall be deemed to have acted in a manner "not opposed to the best interest
of the trust" as referred to in this Article.
ARTICLE XIII
REPAYMENT OF DISALLOWED DEDUCTION
SECTION 13.1 FULL REIMBURSEMENT BY OFFICERS. Any payments made to an
officer of the trust such as salary, commission, bonus, interest, rent,
medical reimbursement or entertainment expense incurred by him which, for
Federal income tax purposes, shall be disallowed in whole or in part as a
deductible expense by the Internal Revenue Service, shall be reimbursed by
such officer to the trust to the full extent of such disallowance.
SECTION 13.2 SECURITY FOR REPAYMENT. It shall be the duty of the
trustees, as a board, to enforce payment of such amount disallowed. In lieu
of payment by the officer, subject to the determination of the trustees,
proportionate amounts may be withheld from his future compensation payments
until the amount owed to the trust has been recovered.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF TRUSTEES AND OFFICERS.
The Declaration of Trust (the "Declaration of Trust") of CenterPoint
Properties Trust, a newly formed Maryland real estate investment trust (the
"Trust") wholly-owned by CenterPoint Properties Corporation (the "Company"),
provides that, to the maximum extent permitted by Maryland law from time to
time, no trustee or officer of the Trust shall be held liable to the Trust or
any shareholder thereof for monetary damages. The Declaration of Trust also
provides the trustees and officers of the Trust with limited liability in the
absence of any Maryland statute limiting the liability of the trustees and
officers of the Trust for money damages in a suit by or on behalf of the
Trust or by any shareholder thereof, except if (i) the trustee or officer
actually received an improper benefit or profit in money, property or
services, for the amount of the benefit actually received or (ii) a judgment
or other final adjudication adverse to the trustee or officer is entered in a
proceeding based on a finding in the proceeding that the trustee's or
officer'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.
Title 8 of the Corporations and Associations Article of the Annotated
Code of Maryland ("Title 8"), by reference to the Maryland Courts and
Judicial Proceedings Article, permits the declaration of trust of a Maryland
real estate investment trust to expand or limit the liability of its trustees
and officers, except to the extent that (x) the trustee or officer actually
receives an improper personal benefit in money, property or services or (y) a
judgment or other final adjudication adverse to the trustee or officer is
entered in a proceeding based on a finding that such 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. However,
Title 8 also provides that, although trustees and officers of a Maryland real
estate investment trust are not personally liable for the obligations of the
trust, trustees are not relieved from liability for any act that constitutes
(a) bad faith, (b) willful misfeasance, (c) gross negligence or (d) reckless
disregard of the trustee's duties.
The Declaration of Trust and By-laws of the Trust (the "Trust By-laws")
authorize the Trust, to the maximum extent permitted from time to time by
Maryland law, to indemnify its present and former trustees and officers and
to pay or reimburse expenses for such individuals in advance of the final
disposition of a proceeding. In addition, the Declaration of Trust permits
the Trust to indemnify any individual who, while a trustee of the Trust and
at the request of the Trust serves or has served another corporation, trust,
partnership, joint venture, employee benefit plan or any other enterprise as
a director, officer, partner or trustee thereof. Furthermore, the Trust
By-laws specify that all persons entitled to indemnification by the Trust for
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by them in connection with any action, suit or proceeding
must have acted in good faith and in a manner they reasonably believed to be
in or not opposed to the best interests of the Trust and, with respect to any
criminal action or proceeding, must have had no reasonable cause to believe
their conduct was unlawful.
In addition, the Trust By-laws authorize the Trust, in certain
circumstances, to indemnify any party to an action or suit by or in the right
of the Trust by reason of the fact that such person is or was a director,
officer, employee or agent of the Trust or is or was serving at the request
of the Trust as a director, trustee, officer, employee or agent of another
enterprise against expenses actually and reasonably incurred by such person
in connection with the defense or settlement of such action or suit if
II-1
<PAGE>
such person acted in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of the Trust, provided that no
indemnification will be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable for negligence or
misconduct in the performance of his duties to the Trust, subject to certain
exceptions.
Pursuant to Title 8, a trust may indemnify its trustees and officers in
respect of any proceeding, except to the extent that any trustee or officer
actually received an improper benefit, whether or not involving action in his
official capacity, in which the trustee or officer was adjudged to be liable
on the basis that personal benefit was improperly received. Title 8 permits
a Maryland real estate investment trust to indemnify its trustees and
officers 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 to or at the request of
the trust unless it is established that the act or omission of the
indemnified party was material to the matter giving rise to the proceeding
and (i) the act or omission was committed in bad faith or was the result of
active and deliberate dishonesty, (ii) the indemnified party actually
received an improper personal benefit or (iii) in the case of any criminal
proceeding, the indemnified party had reasonable cause to believe that the
act or omission was unlawful.
It is the position of the Securities and Exchange Commission (the
"Commission") that indemnification of trustees for liabilities arising under
the Securities Act of 1933, as amended (the "Securities Act"), is against
public policy and is unenforceable pursuant to Section 14 of the Securities
Act.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
------- -----------
<S> <C>
2 Plan of Reorganization by and between the Company and the Trust
*3.1 Amended and Restated Articles of Incorporation of the Company
3.2 Amended and Restated By-laws of the Company
3.3 Declaration of Trust of the Trust
3.4 By-laws of the Trust
**4.1 Form of certificate representing common shares of beneficial
interest in the Trust
**4.2 Form of certificate representing 8.22% Convertible Subordinated
Debentures of the Trust
***4.3 Form of Indenture
**4.4 Form of First Supplemental Indenture
**5 Form of Opinion of Ungaretti & Harris regarding the validity of
the securities being registered and certain other matters
**8 Form of Opinion of Ungaretti & Harris regarding certain tax matters
**23.1 Consent of Ungaretti & Harris (included as part of Exhibit 5)
23.2 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney (included on signature page)
99 Form of Proxy Card in connection with the Special Meeting of
Stockholders of the Company
___________________
* Incorporated by reference from the Company's Registration Statement
on Form S-3 (File No. 333-18235).
** To be filed by amendment.
*** Incorporated by reference from the Company's Registration Statement on
Form S-11 (File No. 33-69710).
</TABLE>
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<PAGE>
(b) Financial Statement Schedules:
Not applicable.
(c) Item 4(b) Information:
Not applicable.
ITEM 22. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) That, for purposes of determining any liability under the
Securities Act, each filing of the Registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as
amended, that is incorporated by reference in this 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.
(2) That, prior to any public reoffering of the securities
registered hereunder through the use of a prospectus which is a part of this
Registration Statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the Registrant undertakes that
such reoffering prospectus will contain the information called for by the
applicable registration form with respect to reofferings by persons who may
be deemed underwriters, in addition to other information called for by the
other Items of the applicable form.
(3) That every prospectus (i) that is filed pursuant to paragraph
(2) immediately preceding, or (ii) that purports to meet the requirements of
Section 10(a)(3) of the Securities Act and is used in connection with an
offering of securities subject to Rule 415, will be filed as part of an
amendment to this Registration Statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act, 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.
(4) To respond to requests for information that is incorporated by
reference into the Proxy Statement/Prospectus pursuant to Items 4, 10(b), 11
or 13 of this Registration Statement, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of this Registration Statement through
the date of responding to the request.
(5) To supply by means of a post-effective amendment all
information concerning a transaction, and the company being acquired involved
therein, that was not the subject of and included in this Registration
Statement when it became effective.
Insofar as indemnification for liabilities arising under the Securities
Act 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 Commission such indemnification
is against public policy as expressed in the Securities 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
II-3
<PAGE>
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 appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Chicago, State of
Illinois, on the 13th day of August, 1997.
CENTERPOINT PROPERTIES TRUST
By: /s/ John S. Gates, Jr.
---------------------------------
John S. Gates, Jr., President and
Chief Executive Officer
By: /s/ Paul S. Fisher
----------------------------------------
Paul S. Fisher, Executive Vice President
and Chief Financial Officer
(Principal Financial and Accounting
Officer)
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on
the date indicated. Each of the following persons does hereby authorize and
designate John S. Gates, Jr., Paul S. Fisher and Robert L. Stovall, or any of
them, as attorneys-in-fact with full power of substitution, to execute in the
name and on behalf of such person, individually and in each capacity stated
below, and to file any and all amendments to this Registration Statement,
including any and all pre-effective and post-effective amendments.
<TABLE>
<CAPTION>
Signature Name and Title Date
--------- -------------- ----
<S> <C> <C>
/s/ Martin Barber Martin Barber, Chairman and August 13, 1997
----------------- Trustee
/s/ John S. Gates, Jr. John S. Gates, Jr., President, Chief August 13, 1997
------------------ Executive Officer and Trustee
/s/ Robert L. Stovall Robert L. Stovall, Vice Chairman August 13, 1997
------------------ and Trustee
/s/ Nicholas C. Babson Nicholas C. Babson, August 13, 1997
------------------ Independent Trustee
/s/ Alan D. Feld Alan D. Feld, August 13, 1997
----------------- Independent Trustee
/s/ John J. Kinsella John J. Kinsella, August 13, 1997
----------------- Independent Trustee
Thomas E. Robinson,
----------------- Independent Trustee
</TABLE>
II-5
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ------- -----------
<S> <C>
2 Plan of Reorganization
*3.1 Amended and Restated Articles of Incorporation of the Company
3.2 Amended and Restated By-laws of the Company
3.3 Declaration of Trust of the Trust
3.4 By-laws of the Trust
**4.1 Form of certificate representing common shares of beneficial
interest in the Trust
**4.2 Form of certificate representing 8.22% Convertible Subordinated
Debentures
***4.3 Form of Indenture
**4.4 Form of First Supplemental Indenture
**5 Opinion of Ungaretti & Harris regarding the validity of the
securities being registered and certain other matters
**8 Opinion of Ungaretti & Harris regarding certain tax matters
**23.1 Consent of Ungaretti & Harris (included as part of Exhibit 5)
23.2 Consent of Coopers & Lybrand L.L.P.
24 Power of Attorney (included on signature page)
99 Form of Proxy Card in connection with the Special Meeting of
Stockholders of the Company
_______________________________
* Incorporated by reference from the Company's Registration Statement
on Form S-3 (File No. 333-18235).
** To be filed by amendment.
*** Incorporated by reference from the Company's Registration Statement
on Form S-11 (File No. 33-69710).
II-6
</TABLE>
<PAGE>
PLAN OF REORGANIZATION
THIS PLAN OF REORGANIZATION is made this ______ day of
_____________, 1997, by and between CENTERPOINT PROPERTIES CORPORATION, a
Maryland corporation (the "Corporation"), and CENTERPOINT PROPERTIES TRUST, a
Maryland real estate investment trust (the "Trust").
W I T N E S S E T H:
WHEREAS, the Corporation is a corporation organized and existing
under the laws of the State of Maryland; and
WHEREAS, the total number of shares of capital stock which the
Corporation has authority to issue is 60,000,000, consisting of:
47,727,273 shares of voting Common Stock, par value $0.001 per share, of which
16,751,556 shares are issued and outstanding as of August 11, 1997;
2,272,727 shares of non-voting Class B Common Stock, par value $0.001 per
share, all of which are issued and outstanding; and 10,000,000 shares of
undesignated Series Preferred Stock, par value $0.001 per share, none of
which is issued and outstanding; and
WHEREAS, the Trust is a real estate investment trust organized and
existing under the laws of the State of Maryland; and
WHEREAS, the total number of shares of beneficial interest which
the Trust has authority to issue is 60,000,000, consisting of: 47,727,273
voting Common Shares, par value $0.001 per share, of which one Common Share
is issued and outstanding and owned by the Corporation; 2,272,727 non-voting
Class B Common Shares, par value $0.001 per share, none of which is issued
and outstanding; and 10,000,000 undesignated Series Preferred Shares, par
value $0.001 per share, none of which is issued and outstanding; and
WHEREAS, the Board of Directors of the Corporation (the
"Directors") and the Board of Trustees of the Trust (the "Trustees") have
been advised by legal counsel that a merger of a Maryland corporation such as
the Corporation into a Maryland real estate investment trust such as the
Trust is specifically permitted by Section 3-102(a)(3) of the Maryland
General Corporation Law ("MGCL") and Section 8-501.1(b) of Title 8 of the
Maryland Corporations and Associations Code ("Title 8"); and have accordingly
determined that such a merger is permitted by law and is consistent with the
provisions of the Articles of Incorporation of the Corporation as amended
(the "Articles") and the Declaration of Trust of the Trust (the
"Declaration"); and
WHEREAS, the Directors and the Trustees have determined that it is
in the best interests of the Corporation to merge with and into the Trust, on
the terms and conditions set forth herein, but subject to the prior
authorization of both the holders of at least two-thirds of the outstanding
Common Stock of the Corporation and of the sole shareholder of the Trust, all
under and pursuant to the Articles, the Declaration, the MGCL and Title 8;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein contained, for the purpose of prescribing the
terms and conditions of the merger, the parties hereto agree as follows:
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<PAGE>
SECTION 1
TERMS AND CONDITIONS
1.1 MERGER. At the Effective Date (as defined in Section 2), the
Corporation shall be merged with and into the Trust (the "Merger"), the Trust
shall be the surviving entity (the "Successor"), and the separate existence
of the Corporation shall cease.
1.2 SUCCESSOR. At and from the Effective Date, the Trust shall
succeed to all of the rights, powers and property of the Corporation and
shall be liable for all of the liabilities, debts and obligations of the
Corporation, in the manner of and as more fully set forth in Section
8-501.1(n) of Title 8. The Articles of Merger evidencing the Merger shall
also constitute and evidence the sale, conveyance, transfer and assignment of
all property of the Corporation to the Trust and the Trust's assumption of
all of the liabilities, debts and obligations of the Corporation, including
without limitation, all employee benefit plans of the Corporation (and all
liabilities, debts and obligations of the Corporation thereunder) and
obligations to indemnify persons who are or may be entitled to
indemnification under the Articles and the Corporation's By-Laws, to the
extent that such persons are entitled to indemnification thereunder.
1.3 CONVERSION OF SHARES OF THE CORPORATION. At the Effective
Date, by virtue of the Merger and without any action on the part of the
holder thereof:
1.3.1 Each share of the Common Stock of the Corporation
outstanding immediately prior thereto shall be converted into one
fully paid and nonassessable Common Share of the Trust; and each
certificate representing said shares of Common Stock shall continue
to represent the same number of Common Shares of the Trust.
1.3.2 Each share of the Class B Common Stock of the
Corporation outstanding immediately prior thereto shall be
converted into one fully paid and nonassessable Class B Common
Share of the Trust; and each certificate representing said shares
of Class B Common Stock shall continue to represent the same number
of Class B Common Shares of the Trust.
1.4 COMMON SHARE OF THE TRUST. At the Effective Date, by virtue
of the Merger and without any action on the part of the Corporation, being
the sole holder thereof, the one Common Share of the Trust issued and
outstanding immediately prior thereto shall be canceled and returned to the
status of authorized but unissued shares.
SECTION 2
EFFECTIVE DATE
The Merger shall become effective on the day and at the time (the
"Effective Date") following the completion of the last of the following
actions: (i) this Plan of Reorganization shall have been authorized, in
accordance with the requirements of the laws of the State of Maryland, by the
affirmative vote of the holders of at least two-thirds of the aggregate
number of shares of the Common Stock of the Corporation then outstanding and
entitled to vote thereon, and shall have been authorized by the Corporation
as the sole shareholder of the Trust; (ii) the Common Shares of the Trust
issuable to the
A-2
<PAGE>
stockholders of the Corporation pursuant to this Agreement and the 8.22%
Convertible Subordinated Debentures due 2004 of the Trust (the "Trust
Debentures") issuable to the holders of the Corporation's 8.22% Convertible
Subordinated Debentures due 2004 (the "Corporation Debentures") shall have
been authorized for listing on the New York Stock Exchange, upon official
notice of issuance; and (iii) Articles of Merger reflecting the Merger shall
have been executed and filed in accordance with Section 3-107 of the MGCL and
Section 8-501.1(g) of Title 8.
SECTION 3
CHARTER DOCUMENTS, TRUSTEES, OFFICERS, STOCK RIGHTS AND DEBENTURES
3.1 DECLARATION AND BY-LAWS. The Declaration and By-Laws of the
Trust in effect on the Effective Date (a copy of each of which is attached
hereto), shall continue to be, respectively, the Declaration and By-Laws of
the Trust until changed, altered or amended as therein provided and in the
manner prescribed by the provisions of Title 8.
3.2 TRUSTEES. The persons who were at the Effective Date the
Trustees of the Trust shall continue to be the Trustees of the Trust, holding
such office until their respective Successors are elected or appointed and
qualified in accordance with the Declaration and By-Laws of the Trust.
3.3 OFFICERS. The officers of the Trust as at the Effective Date
shall continue to be the officers of the Trust, holding such offices in the
Trust until their respective Trusts are Successors or appointed and qualified
in accordance with the Declaration and By-Laws of the Trust.
3.4 RESTRICTED STOCK AWARD PLANS, STOCK OPTION PLAN AND
OUTSTANDING OPTIONS. As at and from the Effective Date, the Corporation's
1995 Director Stock Plan and 1995 Restricted Stock Incentive Plan
(collectively the "Stock Award Plans"), together with the Corporation's 1993
Stock Option Plan (the "Stock Option Plan") shall continue in full force and
effect as plans of the Trust under the same terms and conditions until such
time as such plans may be amended in accordance with the terms thereof;
provided, however, that references in such plans to the Corporation, its
stock and its stockholders shall be deemed to refer, respectively, to the
Trust, its Common Shares and the holders of such Common Shares. As at and
from the Effective Date, all obligations of the Corporation under the Stock
Award Plans shall be assumed by the Trust and all rights of the participants
in the respective Stock Award Plans to receive grants of the Common Stock of
the Corporation on the terms and conditions set forth in the Stock Award
Plans thereupon shall be converted into rights to receive grants of the
Common Shares of the Trust on the same terms and conditions. As at and from
the Effective Date, all obligations of the Corporation under the Stock Option
Plan and option agreements shall be assumed by the Trust and all rights of
the participants in the Stock Option Plan to receive grants of options to
purchase shares of the Common Stock of the Corporation and the right of the
holder of any option (whether or not granted pursuant to the Stock Option
Plan) to exercise said options on the terms and conditions set forth in the
option agreement or the Stock Option Plan, as the case may be, thereupon
shall be converted into rights to receive grants of options and to exercise
said options to purchase the Common Shares of the Trust on the same terms and
conditions.
3.5 DEBENTURES. As at and from the Effective Date, the principal
amount of the Corporation's outstanding 8.22% Convertible Subordinated
Debentures Due 2004 (the "Corporation Debentures") shall be assumed by the
Trust and converted into the same principal amount of 8.22% Convertible
Subordinated Debentures Due 2004 of the Trust (the "Trust Debentures"), and
each
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<PAGE>
certificate representing the outstanding principal amount of Corporation
Debentures shall continue to represent the same principal amount of Trust
Debentures.
SECTION 4
MISCELLANEOUS
4.1 FURTHER ASSURANCES. From time to time to the extent possible,
as and when required by the Trust or by its successors and assigns, there
shall be executed and delivered on behalf of the Corporation such deeds and
other instruments, and there shall be taken or caused to be taken by it such
further and other action as shall be appropriate or necessary in order to
vest or perfect, or to conform of record or otherwise, in the Trust the title
to and possession of all the property, interests, assets, rights, privileges,
immunities, powers, franchises, and authority of the Corporation, and
otherwise to carry out the purposes of this Plan of Reorganization, and the
officers and Trustees of the Trust are fully authorized in the name of and on
behalf of the Corporation or otherwise to take any and all such action and to
execute and deliver any and all such deeds and other statements.
4.2 ABANDONMENT. At any time before the Effective Date, this Plan
of Reorganization may be terminated and the Merger may be abandoned by the
unanimous vote of the Directors of the Corporation.
4.3 COUNTERPARTS. This Plan of Reorganization may be executed in
any number of counterparts, each of which shall be deemed to be an original.
4.4 GOVERNING LAW. This Plan of Reorganization shall be governed
by and construed in accordance with the laws of the State of Maryland.
4.5 EFFECT. It is intended that the reorganization contemplated
hereby shall be a reorganization of the type described in Section
368(a)(1)(F) under the Internal Revenue Code of 1986, as amended.
A-4
<PAGE>
IN WITNESS WHEREOF, this Plan of Reorganization is hereby executed
on behalf of each of the parties hereto and attested by their respective
officers thereunto duly authorized.
CENTERPOINT PROPERTIES CORPORATION
a Maryland corporation
By: ___________________________________
John S. Gates, Jr., President
ATTEST:
__________________________________
Paul S. Fisher, Secretary
DATED: ___________________, 1997
CENTERPOINT PROPERTIES TRUST
a Maryland real estate investment trust
By: ___________________________________
John S. Gates, Jr., President
ATTEST:
__________________________________
Paul S. Fisher, Secretary
DATED: ___________________, 1997
A-5
<PAGE>
AMENDED AND RESTATED BY-LAWS(1)
OF
CENTERPOINT PROPERTIES CORPORATION
ARTICLE I
OFFICES
SECTION 1.1 MARYLAND REGISTERED OFFICE. The corporation shall
continuously maintain in the State of Maryland a registered office and
registered agent whose office is identical with such registered office.
SECTION 1.2 OTHER OFFICES. The corporation may have other offices
within any other state of the United States, including, without limitation, the
State of Illinois.
ARTICLE II
STOCKHOLDERS
SECTION 2.1 ANNUAL MEETING. An annual meeting of the stockholders shall
be held each year for the purpose of electing directors and for the transaction
of such other business as may come before the meeting. Commencing with 1995,
the date of the annual meeting shall be set by the Board of Directors on a date
following the availability of the corporation's audited financial statements of
the preceding year but in no event later than May 31.
SECTION 2.2 SPECIAL MEETINGS. Special meetings of the stockholders may
be called either by the President or the board of directors or by stockholders
holding in the aggregate at least 25% of all the votes entitled to be cast at
the meeting.
SECTION 2.3 PLACE OF MEETING. The board of directors may designate any
place the place of meeting for any annual meeting or for any special meeting
called by the board of directors. If no designation is made, or if a special
meeting be otherwise called, the place of meeting shall be at the main offices
of the corporation in Chicago, Illinois.
SECTION 2.4 INFORMAL ACTION BY STOCKHOLDERS. Any action required to be
taken at a meeting of the stockholders, or any other action which may be taken
at a meeting of the stockholders, may be taken without a meeting whether by
consent of the stockholders or otherwise as provided by the Maryland General
Corporation Law.
- -------------------------
(1) As amended through July 31, 1997
<PAGE>
SECTION 2.5 NOTICE OF MEETINGS. Written notice stating the place, date
and hour of the meeting, and in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be delivered not less than 10
nor more than 90 days before the date of the meeting, or in the case of a
merger, consolidation, share exchange, dissolution or sale, lease or exchange of
assets, not less than twenty nor more than sixty days before the meeting, either
personally or by mail, by or at the direction of the president, or the board of
directors, to each stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited with the
United States Postal Service, addressed to the stockholder at his address as it
appears on the records of the corporation, with postage thereon prepaid. When a
meeting is adjourned to another time or place, notice need not be given of the
adjourned meeting if the time and place thereof are announced at the meeting at
which the adjournment is taken.
SECTION 2.6 FIXING OF RECORD DATE. For the purpose of determining the
stockholders entitled to notice of or to vote at any meeting of stockholders or
any adjournment thereof, or to receive payment of any dividend, or any rights in
respect of any change, conversion or exchange of shares or for the purpose of
any other lawful action, the board of directors of the corporation may fix in
advance a record date which shall not be more than sixty days and, for a meeting
of stockholders, not less than twenty days, or in the case of a merger,
consolidation, share exchange, dissolution or sale, lease or exchange of assets,
not less than twenty days, immediately preceding the date of such meeting. If
no record date is fixed, the record date for the determination of stockholders
entitled to notice of or to vote at a meeting of stockholders shall be the date
on which notice of the meeting is mailed, and the record date for the
determination of stockholders for any other purpose shall be the date on which
the board of directors adopts the resolution relating thereto. A determination
of stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting.
SECTION 2.7 STOCKHOLDERS' LIST. The officer or agent having charge of
the transfer books for shares of the corporation shall make, within twenty days
after record date or twenty days before each meeting of stockholders, whichever
is earlier, a complete list of the stockholders entitled to vote at such
meeting, arranged in alphabetical order, showing the address of and the number
of shares registered in the name of the stockholder, which list, for a period of
twenty days prior to such meeting, shall be kept on file at the registered
office of the Corporation and shall be open to inspection by any stockholder for
any purpose germane to the meeting, at any time during usual business hours.
Such list shall also be produced and kept open at the time and place of the
meeting and may be inspected by any stockholder during the whole time of the
meeting. The original share ledger or transfer book, or a duplicate thereof
kept in the State of Illinois, shall be prima facie evidence as to who are the
stockholders entitled to examine such list or share ledger or transfer book or
to vote at any meeting of stockholders.
SECTION 2.8 VOTING OF SHARES. Except as otherwise provided in the
articles of incorporation or these by-laws, each outstanding share, regardless
of class, shall be entitled to one vote upon each matter submitted to vote at a
meeting of stockholders.
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SECTION 2.9 VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing in the
name of another corporation, domestic or foreign, may be voted by such officer,
agent, or proxy as its by-laws of such corporation may prescribe, or, in the
absence of such provision, as the board of directors of such corporation may
determine and under the law of incorporation of such corporation.
(a) Shares standing in the name of a deceased person, a minor ward or
an incompetent person, may be voted by his administrator, executor, court
appointed guardian, or conservator, either in person or by proxy without a
transfer of such shares in the name of such administrator, executor, court
appointed guardian, or conservator. Shares standing in the name of a
trustee may be voted by him, either in person or by proxy.
(b) Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be
voted by such receiver without the transfer thereof into his name if
authority so to do be contained in an appropriate order of the court by
which such receiver was appointed.
(c) A stockholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred into the name of the
pledgee, and thereafter the pledgee shall be entitled to vote the shares so
transferred.
(d) Any number of stockholders may create a voting trust for the
purpose of conferring upon a trustee or trustees the right to vote or
otherwise represent their share, for a period not to exceed ten years, by
entering into a written voting trust agreement specifying the terms and
conditions of the voting trust, and by transferring their shares to such
trustee or trustees for the purpose of the agreement. Any such trust
agreement shall not become effective until a counterpart of the agreement
is deposited with the corporation at its registered office. The
counterpart of the voting trust agreement so deposited with the corporation
shall be subject to the same right of examination by a stockholder of the
corporation, in person or by agent or attorney, as are the books and
records of the corporation, and shall be subject to examination by any
holder of a beneficial interest in the voting trust, either in person or by
agent or attorney, at any reasonable time for any proper purpose.
(e) Stockholders may provide for the voting of their shares by
signing an agreement for that purpose. A voting agreement under this
subsection is not subject to the provisions of subsection (a) above.
(f) Shares of its own stock belonging to this corporation shall not
be voted, directly or indirectly, at any meeting and shall not be counted
in determining the total number of outstanding shares at any given time,
but shares of its own stock held by it in a fiduciary capacity may be voted
and shall be counted in determining the total number of outstanding shares
at any given time.
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SECTION 2.10 PROXIES. Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy by signing an appointment form and delivering it to the person so
appointed, but no such proxy shall be valid after eleven months from the date of
its execution, unless otherwise provided in the proxy.
SECTION 2.11 CUMULATIVE VOTING. Unless otherwise provided in the
articles of incorporation, in elections for directors, no stockholder shall have
the right to cumulate his votes.
SECTION 2.12 QUORUM. At an annual meeting of the stockholders called for
the sole purpose of electing directors and ratifying the selection of the
corporation's independent public accountants, the holders of one-third of the
outstanding shares of the corporation entitled to vote, present in person or
represented by proxy, shall constitute a quorum at such annual meeting of
stockholders; provided that, if less than one-third of the outstanding shares
entitled to vote are represented at said meeting, a majority of the shares so
represented may adjourn the meeting at any time without further notice. At any
other annual meeting or any special meeting of stockholders, the holders of a
majority of the outstanding shares of the corporation entitled to vote, present
in person or represented by proxy, shall constitute a quorum at such meeting of
stockholders; provided that, if less than a majority of the outstanding shares
entitled to vote are represented at said meeting, a majority of the shares so
represented may adjourn the meeting at any time without further notice. If a
quorum is present at any meeting of the stockholders, the affirmative vote of
the majority of the shares entitled to vote represented at the meeting and
entitled to vote on the matter shall be the act of the stockholders. At any
adjourned meeting at which a quorum shall be present, any business may be
transacted which might have been transacted at the original meeting. Withdrawal
of stockholders from any meeting shall not cause failure of a duly constituted
quorum at that meeting.
SECTION 2.13 INSPECTORS. At any meeting of stockholders, the chairman of
the meeting may, or upon request of any stockholder shall, appoint one or more
persons as inspectors for such meeting.
(a) Such inspectors shall ascertain and report the number of shares
represented at the meeting, based upon their determination of the validity
and effect of proxies; count all votes and report the results; and do such
other acts as are proper to conduct the election and voting with
impartiality and fairness to all the stockholders.
(b) Each report of an inspector shall be in writing and signed by him
or by a majority of them if there be more than one inspector acting at such
meeting. If there is more than one inspector, the report of a majority
shall be the report of the inspectors. The report of the inspector or
inspectors on the number of shares represented at the meeting and the
results of the voting shall be prima facie evidence thereof.
SECTION 2.14 VOTING BY BALLOT. Voting on any question or in any election
may be by voice unless the presiding officer shall order or any stockholder
shall demand that voting be by ballot.
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ARTICLE III
DIRECTORS
SECTION 3.1 GENERAL POWERS. The business and affairs of the
corporation shall be managed by, or under the direction of, its board of
directors.
SECTION 3.2 NUMBER, TENURE AND QUALIFICATIONS. The number of
directors of the corporation shall be not less than three (3) and not more
than ten (10), as determined from time to time by the then acting board of
directors. Each director shall hold office until the next annual meeting of
stockholders, thereafter, until his successor shall have been elected.
Directors need not be residents of Maryland or Illinois or stockholders of
the corporation. The number of directors may be increased or decreased from
time to time as provided by the Articles of Incorporation by the amendment of
this section; but no decrease shall have the effect of shortening the term of
any incumbent director. A director may resign at any time by giving written
notice to the board of directors, its chairman, or to the president or
secretary of the corporation. A resignation is effective when the notice is
given unless the notice specifies a future date. The pending vacancy may be
filled before the effective date, but the successor shall not take office
until the effective date. A majority of the number of directors of the Board
of Directors shall be independent (non-management) directors of the
corporation.
SECTION 3.3 QUORUM. A majority of the number of directors fixed by
these by-laws shall constitute a quorum for transaction of business at any
meeting of the board of directors, provided that if less than a majority of such
number of directors are present at said meeting, a majority of the directors
present may adjourn the meeting at any time without further notice.
SECTION 3.4 MANNER OF ACTING. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors, unless the act of a greater number is required by statute, these
by-laws, or the articles of incorporation.
SECTION 3.5 REGULAR MEETINGS. A regular meeting of the board of
directors shall be held without other notice than this by-law, immediately after
the annual meeting of stockholders. The board of directors may provide, by
resolution, the time and place for holding of additional regular meetings
without other notice than such resolution.
SECTION 3.6 SPECIAL MEETINGS. Special meetings of the board of
directors may be called by or at the request of the president or any one or more
directors. The person or persons authorized to call special meetings of the
board of directors may fix any place as the place for holding any special
meeting of the board of directors called by them.
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SECTION 3.7 NOTICE. Notice of any special meeting shall be given at
least ten days previous thereto by written notice to each director at his
business address. If mailed, such notice shall be deemed to be delivered when
deposited with the United States Postal Service so addressed, with postage
thereon prepaid. If notice be given by telegram, such notice shall be deemed to
be delivered when the telegram is delivered to the telegram company. The
attendance of a director at any meeting shall constitute a waiver of notice of
such meeting, 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. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the board of directors need be
specified in the notice or waiver of notice of such meeting.
SECTION 3.8 VACANCIES. Any vacancy occurring in the board of directors
and any directorship to be filled by reason of an increase in the number of
directors, may be filled by (1) election at an annual meeting or at a special
meeting of stockholders or (2) by the board of directors remaining. A director
elected by the stockholders to fill a vacancy shall hold office for the balance
of the term for which he or she was elected. A director appointed to fill a
vacancy shall serve until the next meeting of stockholders at which directors
are to be elected.
SECTION 3.9 REMOVAL OF DIRECTORS. One or more of the directors may be
removed, with or without cause, at a meeting of stockholders by the affirmative
vote of the holders of a majority of the outstanding shares then entitled to
vote at an election of directors, except as follows:
(a) No director shall be removed at a meeting of stockholders unless
the notice of such meeting shall state that a purpose of the meeting is to
vote upon the removal of one or more directors named in the notice. Only
the named director or directors may be removed at such meeting.
(b) In the case of a corporation having cumulative voting, if less
than the entire board is to be removed, no director may be removed, with or
without cause, if the votes cast against his or her removal would be
sufficient to elect him or her if then cumulatively voted at an election of
the entire board of directors.
(c) If a director is elected by a class or series of shares, he or
she may be removed only by the stockholders of that class or series.
In addition, one or more of the directors may be removed, with or without cause,
by the board of directors upon the affirmative vote of a majority of the then
acting directors.
SECTION 3.10 COMMITTEES OF DIRECTORS. The board of directors may, by
resolution or resolutions adopted by a majority of the number of directors
fixed by the by-laws or otherwise, designate one or more committees, each
committee to consist of one or more of the directors of the corporation. The
board may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting
of the committee. Any such committee, to the extent provided in the
resolution of the board,
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shall have and may exercise all of the powers and authority of the board of
directors in the management of the business and affairs of the corporation,
and may authorize the seal of the corporation to be affixed to all papers
which may require it; but no such committee shall have the power of authority
in reference to amending the articles of incorporation; adopting an agreement
of merger or consolidation; recommending to the stockholders the sale, lease
or exchange of all or substantially all of the corporation's property and
assets; recommending to the stockholders a dissolution of the corporation or
a revocation of a dissolution; recommending to the stockholders any other
action which requires stockholder approval; amending the by-laws of the
corporation; declaring a dividend or authorizing the issuance of
distributions on stock; or issue stock other than pursuant to a stock option
or similar compensation plan in accordance with Section 2-411 of the Maryland
General Corporation Law. Such committee or committees shall have such name
or names as may be determined by the board of directors. The committees
shall keep regular minutes of their proceedings and report the same to the
full board of directors when required.
SECTION 3.11 ACTION WITHOUT A MEETING. Unless specifically prohibited by
the articles of incorporation or these by-laws, any action required to be taken
at a meeting of the board of directors, or any other action which may be taken
at a meeting of the board of directors, or of any committee thereof may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all the directors entitled to vote with respect to the
subject matter thereof, or by all the members of such committee, as the case may
be. Any such consent signed by all the directors or all the members of the
committee shall have the same effect as a unanimous vote.
SECTION 3.12 COMPENSATION. The board of directors, by the affirmative
vote of a majority of directors then in office, and irrespective of any personal
interest of any of its members, shall have authority to establish reasonable
compensation of all directors for services to the corporation as directors,
officers, or otherwise. By resolution of the board of directors, the directors
may be paid their expenses, if any, of attendance at each meeting of the board.
No such payment previously mentioned in this section shall preclude any director
from serving the corporation in any other capacity and receiving compensation
therefor. Members of committees of the board may be allowed like compensation
for attending committee meetings.
SECTION 3.13 PRESUMPTION OF ASSENT. A director of the corporation who is
present at a meeting of the board of directors at which action on any corporate
matter is taken shall be conclusively presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the person acting
as the secretary of the meeting before the adjournment thereof or shall forward
such dissent by registered mail to the secretary of the corporation immediately
after the adjournment of the meeting. Such right to dissent shall not apply to
a director who voted in favor of such action.
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ARTICLE IV
OFFICERS
SECTION 4.1 NUMBER. The officers of the corporation shall be a
chairman, a vice chairman, a president, a secretary, a treasurer, and any number
of vice presidents (who may be designated as executive vice presidents, senior
vice presidents or non-executive vice presidents), treasurers, assistant
treasurers, assistant secretaries or other officers as may be elected by the
board of directors or, in the case of non-executive vice presidents, appointed
by the president. Any two or more offices may be held by the same person except
for the offices of president and vice president.
SECTION 4.2 APPOINTMENT OR ELECTION AND TERM OF OFFICE. Non-executive
vice presidents, if any, shall be appointed by the president and shall serve at
the pleasure of the president. The other officers of the corporation shall be
elected or appointed annually by the board of directors at the first meeting of
the board of directors held after each annual meeting of stockholders. If the
election of officers shall not be held at such meeting, such election shall be
held as soon thereafter as conveniently may be. Vacancies may be filled or new
offices created and filled at any meeting of the board of directors. Each
officer elected or appointed by the Board shall hold office until his successor
shall have been duly elected and shall have qualified or until his death or
until he shall resign or shall have been removed in the manner hereinafter
provided. Election or appointment of an officer shall not of itself create
contract rights.
SECTION 4.3 REMOVAL. Any officer elected or appointed by the board of
directors may be removed by the board of directors whenever in its judgment the
best interests of the corporation would be served thereby, but such removal
shall be without prejudice to the contract rights, if any, of the person so
removed.
SECTION 4.4 CHAIRMAN. The chairman shall be the chairman of the board
of directors. He shall advise and counsel with the president and shall assume
such other duties as from time to time may be assigned by the board of
directors. He shall preside at all meetings of the board of directors and, in
the absence of the president or at the president's request, shall preside at all
meetings of the stockholders. He may execute for the corporation certificates
for its shares, and any contracts, deeds, mortgages, bonds, or other instruments
which the board of directors has authorized to be executed, and he may
accomplish such execution either under or without the seal of the corporation
and either individually or with the secretary, any assistant secretary, or any
other officer thereunto authorized by the board of directors, according to the
requirements of the form of the instrument.
SECTION 4.5 VICE CHAIRMAN. The vice chairman shall assist the chairman
in the discharge of his duties as the chairman may direct and shall perform such
other duties as from time to time may be assigned to him by the chairman or by
the board of directors. In the absence of the chairman or in the event of his
inability or refusal to act, the vice chairman shall perform the duties of the
chairman, and when so acting, shall have all the powers of and be subject to all
the restrictions upon the chairman. Except in those instances in which the
authority to execute is
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expressly delegated to another officer or agent of the corporation or a
different mode of execution is expressly prescribed by the board of directors
or these by-laws, the vice chairman may execute for the corporation
certificates for its shares and any contracts, deeds, mortgages, bonds or
other instruments which the board of directors has authorized to be executed,
and he may accomplish such execution either under or without the seal of the
corporation and either individually or with the secretary, any assistant
secretary, or any other officer thereunto authorized by the board of
directors, according to the requirements of the form of the instrument.
SECTION 4.6 PRESIDENT. The president shall be the chief executive
officer of the corporation. Subject to the direction and control of the board
of directors, he shall be in charge of the business of the corporation; he shall
see that the resolutions and directions of the board of directors are carried
into effect except in those instances in which that responsibility is
specifically assigned to some other person by the board of directors; and, in
general, he shall discharge all duties incident to the office of president and
such other duties as may be prescribed by the board of directors from time to
time. He shall preside at all meetings of the stockholders and, in the absence
of the chairman, shall preside at all meetings of the board of directors.
Except in those instances in which the authority to execute is expressly
delegated to another officer or agent of the corporation or a different mode of
execution is expressly prescribed by the board of directors or these by-laws, he
may execute for the corporation certificates for its shares, and any contracts,
deeds, mortgages, bonds, or other instruments which the board of directors has
authorized to be executed, and he may accomplish such execution either under or
without the seal of the corporation and either individually or with the
secretary, any assistant secretary, or any other officer thereunto authorized by
the board of directors, according to the requirements of the form of the
instrument. He may vote all securities which the corporation is entitled to
vote except as and to the extent such authority shall be vested in a different
officer or agent of the corporation by the board of directors.
SECTION 4.7 EXECUTIVE VICE PRESIDENTS AND SENIOR VICE PRESIDENTS. The
executive vice-presidents and senior vice presidents, if any, shall assist the
president in the discharge of his duties as the president may direct and shall
perform such other duties as from time to time may be assigned to them by the
president or by the board of directors. In the absence of the president or in
the event of his inability or refusal to act, the executive vice-presidents (or
in the event there be more than one executive vice president, the executive
vice-presidents in the order designated by the board of directors, or by the
president if the board of directors has not made such a designation, or in the
absence of any designation, then in the order of seniority of tenure as
executive vice president) shall perform the duties of the president. In the
absence or inability or refusal to act of the president and any executive vice
presidents, the senior vice presidents in the order designated by the board of
directors, or by the president if the board of directors has not made such a
designation, or in the absence of any designation, then in the order of
seniority of tenure as senior vice president) shall perform the duties of the
president. When so acting, the executive vice presidents or senior vice
presidents, as the case may be, shall have all the powers of and be subject to
all the restrictions upon the president. Except in those instances in which the
authority to execute is expressly delegated to another officer or agent of the
corporation or a different mode of execution is expressly prescribed by the
board of directors or these by-laws, the executive vice presidents and senior
vice presidents may execute for the
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corporation certificates for its shares and any contracts, deeds, mortgages,
bonds or other instruments which the board of directors has authorized to be
executed, and they may accomplish such execution either under or without the
seal of the corporation and either individually or with the secretary, any
assistant secretary, or any other officer thereunto authorized by the board
of directors, according to the requirements of the form of the instrument.
SECTION 4.8 NON-EXECUTIVE VICE PRESIDENTS. Non-executive vice
presidents shall assist the president in the discharge of his duties as the
president may direct, but shall not, unless specifically authorized by the board
of directors, have any authority to bind or commit the corporation.
SECTION 4.9 THE TREASURER. The treasurer shall be the chief operating
officer and principal accounting and financial officer of the corporation. He
shall:
(a) have charge of and be responsible for the maintenance of adequate
books of account for the corporation;
(b) have charge and custody of all funds and securities of the
corporation, and be responsible therefore and for the receipt and
disbursement thereof; and
(c) perform all the duties incident to the office of treasurer and
such other duties as from time to time may be assigned to him by the
president or by the board of directors.
If required by the board of directors, the treasurer shall give a bond for
the faithful discharge of his duties in such sum and with such surety or
sureties as the board of directors may determine.
SECTION 4.10 THE SECRETARY. The secretary shall:
(a) record the minutes of the stockholders' and of the board of
directors' meetings in one or more books provided for that purpose;
(b) see that all notices are duly given in accordance with the
provisions of these by-laws or as required by law;
(c) be custodian of the corporate records and of the seal of the
corporation;
(d) keep a register of the post office address of each stockholder
which shall be furnished to the secretary by such stockholder;
(e) sign with the chairman, vice chairman, president, or an executive
vice president or a senior vice president, or any other officer thereunto
authorized by the board of directors, certificates for shares of the
corporation, the issue of which shall have been authorized by the board of
directors, and any contracts, deeds, mortgages, bonds, or other
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instruments which the board of directors has authorized to be executed,
according to the requirements of the form of the instrument, except
when a different mode of execution is expressly prescribed by the
board of directors or these by-laws;
(f) otherwise certify that by-laws, resolutions of the stockholders
and board of directors and committees thereof, and other documents of the
corporation as true and correct copies thereof;
(g) have general charge of the stock transfer books of the
corporation; and
(h) perform all duties incident to the office of secretary and such
other duties as from time to time may be assigned to him or her by the
president or by the board of directors.
SECTION 4.11 ASSISTANT TREASURERS AND ASSISTANT SECRETARIES. The
assistant treasurers and assistant secretaries shall perform such duties as
shall be assigned to them by the treasurer or the secretary, respectively, or by
the president or the board of directors. The assistant secretaries may sign
with the chairman, vice chairman, president, or an executive vice president or a
senior vice president, or any other officer thereunto authorized by the board of
directors, certificates for shares of the corporation, the issue of which shall
have been authorized by the board of directors, and any contracts, deeds,
mortgages, bonds, or other instruments which the board of directors has
authorized to be executed, according to the requirements of the form of the
instrument, except when a different mode of execution is expressly prescribed by
the board of directors or these by-laws. The assistant treasurers shall
respectively, if required by the board of directors, give bonds for the faithful
discharge of their duties in such sums and with such sureties as the board of
directors shall determine.
SECTION 4.12 SALARIES. The salaries of the officers shall be fixed from
time to time by the board of directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a director of the
corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 5.1 CONTRACTS. The board of directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the corporation, and such
authority may be general or confined to specific instances.
SECTION 5.2 LOANS. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the board of directors. Such authority may be
general or confined to specific instances.
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SECTION 5.3 CHECKS, DRAFTS, ETC. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
determined by resolution of the board of directors.
SECTION 5.4 DEPOSITS. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositories as the board of directors
may select.
ARTICLE VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 6.1 CERTIFICATES FOR SHARES. Certificates representing shares
of the corporation shall be signed by the chairman, vice chairman, president or
an executive vice president or a senior vice president, or by such officer as
shall be designated by resolution of the board of directors and by the secretary
or an assistant secretary, and shall be sealed with the seal or a facsimile of
the seal of the corporation. If both of the signatures of the officers be by
facsimile, the certificate shall be countersigned by the corporation's duly
authorized registrar and transfer agent. Each certificate representing shares
shall be consecutively numbered or otherwise identified, and shall also state
the name of the person to whom issued, the number and class of shares (with
designation of series, if any), the date of issue, that the corporation is
organized under Maryland law, and the par value or a statement that the shares
are without par value. If the corporation is authorized and does issue shares
of more than one class or of series within a class, the certificate shall also
contain such information or statement as may be required by law. The name and
address of each stockholder, the number and class of shares held and the date on
which the certificates for the shares were issued shall be entered on the books
of the corporation. The person in whose name shares stand on the books of the
corporation shall be deemed the owner thereof for all purposes as regard the
corporation.
SECTION 6.2 LOST CERTIFICATES. If a certificate representing shares has
allegedly been lost or destroyed the board of directors may in its discretion,
except as may be required by law, direct that a new certificate be issued upon
such indemnification and other reasonable requirements as it may impose.
SECTION 6.3 TRANSFERS OF SHARES. Transfers of shares of the corporation
shall be recorded on the books of the corporation and, except in the case of a
lost or destroyed certificate, on surrender for cancellation of the certificate
for such shares. A certificate presented for transfer must be duly endorsed and
accompanied by proper guaranty of signature and other appropriate assurances
that the endorsement is effective.
SECTION 6.4 RESTRICTION ON TRANSFER OF SECURITIES. A restriction on the
transfer or registration of transfer of securities of the corporation may be
imposed either under the articles of incorporation or by these by-laws or by
agreement among any number of security holders or among such holders and the
corporation. No restriction so imposed shall be binding
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with respect to securities issued prior to the adoption of the restriction
unless the holders of the securities are parties to an agreement or voted in
favor of the restriction.
A restriction on the transfer or registration of transfer of securities of
the corporation is permitted if, without limitation, it:
(i) requires the corporation or the holders of any class of
securities of the corporation to consent to any proposed transfer of the
restricted securities or to approve the proposed transferee of the
restricted securities; or
(ii) prohibits the transfer of the restricted securities to designated
persons or classes of persons with designation is not manifestly
unreasonable; or
(iii) restricts transfer or registration of transfer in any other
lawful manner.
Unless noted conspicuously on the security, a restriction, even though
permitted by this section, is ineffective except against a person with actual
knowledge of the restriction.
ARTICLE VII
FISCAL YEAR
SECTION 7.1 RESOLUTION OF DIRECTORS. The fiscal year of the corporation
shall end on December 31 of each year.
ARTICLE VIII
DIVIDENDS
SECTION 8.1 DECLARED BY DIRECTORS. The board of directors may from time
to time declare, and the corporation may pay, dividends on its outstanding
shares in the manner and upon the terms and conditions provided by law and its
articles of incorporation.
ARTICLE IX
SEAL
SECTION 9.1 SUBSCRIPTION. The corporate seal, if any, shall have
inscribed thereon the name of the corporation and the words "Corporate Seal,
Maryland." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any manner reproduced.
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ARTICLE X
WAIVER OF NOTICE
SECTION 10.1 WAIVER IN LIEU OF NOTICE. Whenever any notice is required
to be given under the provisions of these by-laws or under the provisions of the
articles of incorporation or under the provisions of Maryland law, a waiver
thereof in writing, signed by the person or persons entitled to such notice,
whether before or after the time stated therein, shall be deemed equivalent to
the giving of such notice. Attendance at any meeting shall constitute waiver of
notice thereof unless the person at the meeting objects to the holding of the
meeting because notice was not given.
ARTICLE XI
AMENDMENTS
SECTION 11.1 DETERMINED BY DIRECTORS. Unless reserved to the
stockholders by the articles of incorporation or required by law, the by-laws of
the corporation may be made, altered, amended or repealed solely by the board of
directors. Any by-law adopted by the stockholders may be altered, amended or
repealed by the board of directors. The by-laws may contain any provisions for
the regulation and management of the affairs of the corporation not inconsistent
with law or the articles of incorporation.
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ARTICLE XII
INDEMNIFICATION OF OFFICERS,
DIRECTORS, EMPLOYEES AND AGENTS
SECTION 12.1 POWER TO HOLD HARMLESS. The corporation shall have the
power to indemnify any person to the full extent specified in Section 2-418 of
the Maryland General Corporation Law. Without limiting the generality of the
foregoing, the corporation shall have the power, unless limited from time to
time by the Maryland General Corporation Law, to indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he or she is or was a director, officer, employee or
agent of the corporation, or who is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if such person acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful. The termination of
any action, suit or proceeding by judgment or settlement, conviction or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
or she reasonably believed to be in or not opposed to the best interest of the
corporation, or with respect to any criminal action or proceeding, that the
person had reasonable cause to believe that his or her conduct was unlawful.
SECTION 12.2 POWER TO INDEMNIFY LITIGANT. The corporation shall have
power to indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor by reason of the
fact that such person is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection with the defense
or settlement of such action or suit if such person acted in good faith and in a
manner he or she reasonably believed to be in, or not opposed to the best
interests of the corporation, provided that no indemnification shall be made in
respect of any claim, issue or matter as to which such persons shall have been
adjudged to be liable for negligence or misconduct in the performance of his or
her duty to the corporation, unless, and only to the extent that the court in
which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses as the court shall deem proper.
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SECTION 12.3 REIMBURSEMENT AUTHORIZED. To the extent that a director,
officer, employee, or agent of a corporation has been successful, on the merits
or otherwise, in defense of any action, suit or proceeding referred to Sections
12.1 and 12.2 above, or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him or her in connection therewith to the
extent not inconsistent with the Maryland General Corporation Law.
SECTION 12.4 DETERMINATION IF REIMBURSEMENT IS PROPER. Any
indemnification under Sections 12.1 and 12.2 above (unless ordered by court)
shall be made by the corporation only as authorized in the specific case, upon a
determination that indemnification of a director, officer, employee or agent is
proper in the circumstances because he or she has met the applicable standard of
conduct set forth in Section 12.1 or 12.2 above. Such determination shall be
made:
(a) by the board of directors by a majority of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or
(b) if such a quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal counsel
in a written opinion, or
(c) by the stockholders.
SECTION 12.5 ADVANCE OF EXPENSES. Expenses incurred in defending a civil
or criminal action, suit or proceeding may be paid by the corporation in advance
of the final disposition of such action, suit or proceeding, as authorized by
the board of directors in the specific case, upon receipt of an undertaking by
or on behalf of the director, officer, employee or agent to repay such amount,
unless it shall ultimately be determined that he or she is entitled to be
indemnified by the corporation as authorized in this Article.
SECTION 12.6 NON-EXCLUSIVITY. The indemnification provided by this
article shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any contract, agreement, vote of stockholders
or disinterested directors, or otherwise, both as to action in his or her
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
SECTION 12.7 RIGHT TO ACQUIRE INSURANCE. The corporation shall have
power to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation, as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against such person and incurred by such person
in any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him or her against such liability
under the provisions of this Article.
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SECTION 12.8 NOTICE OF STOCKHOLDERS. If a corporation has paid indemnity
or has advanced expenses to a director, officer, employee or agent, the
corporation shall report the indemnification or advance in writing to the
stockholders with or before the notice of the next stockholders' meeting.
SECTION 12.9 "CORPORATION;" DEFINITION. For purposes of this Article,
references to "the Corporation" shall include, in addition to the surviving
corporation, any merging corporation (including any corporation having merged
with a merging corporation) absorbed in a merger which, if its separate
existence had continued, would have had the power and authority to indemnify its
directors, officers, and employees or agents, so that any person who was a
director, officer, employee or agent of such merging corporation, or was serving
at the request of such merging corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under the provisions of this
Article with respect to the surviving corporation as such person would have with
respect to such merging corporation if its separate existence had continued.
SECTION 12.10 MISCELLANEOUS DEFINITIONS. For purposes of this Article,
references to "other enterprises" shall include employee benefit plans;
reference to "fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving at the request
of the corporation" shall include any services as a director, officer, employee
or agent of the corporation which imposes duties on, or involves services by
such director, officer, employee, or agent with respect to an employee benefit
plan, its participants, or beneficiaries. A person who acted in good faith and
in a manner he or she reasonably believed to be in the best interests of the
participants and beneficiaries of an employee benefit plan shall be deemed to
have acted in a manner "not opposed to the best interest of the corporation" as
referred to in this Article.
ARTICLE XIII
REPAYMENT OF DISALLOWED DEDUCTION
SECTION 13.1 FULL REIMBURSEMENT BY OFFICERS. Any payments made to an
officer of the corporation such as salary, commission, bonus, interest, rent,
medical reimbursement or entertainment expense incurred by him which, for
Federal income tax purposes, shall be disallowed in whole or in part as a
deductible expense by the Internal Revenue Service, shall be reimbursed by such
officer to the corporation to the full extent of such disallowance.
SECTION 13.2 SECURITY FOR REPAYMENT. It shall be the duty of the
directors, as a board, to enforce payment of such amount disallowed. In lieu of
payment by the officer, subject to the determination of the directors,
proportionate amounts may be withheld from his future compensation payments
until the amount owed to the corporation has been recovered.
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DECLARATION OF TRUST
OF
CENTERPOINT PROPERTIES TRUST
THIS DECLARATION OF TRUST is made as of August 12, 1997 by the
undersigned Trustees.
ARTICLE I
THE TRUST
Section 1.1. NAME. The name of the trust (hereinafter the
"Trust") is:
CenterPoint Properties Trust
Section 1.2. PRINCIPAL OFFICE; RESIDENT AGENT. The post office
address of the principal office of the Trust in the State of Maryland is c/o
CSC-Lawyers Incorporating Service Company, 11 East Chase St., Baltimore,
Maryland 21202. The name of the resident agent of the Trust in the State of
Maryland is CSC-Lawyers Incorporating Service Company, 11 East Chase Street,
Baltimore, Maryland 21202. The resident agent is a Maryland corporation.
The Trust may have such offices or places of business within or without the
State of Maryland as the Trustees may from time to time determine.
Section 1.3. NATURE OF TRUST. The Trust is a real estate
investment trust within the meaning of Title 8 of the Corporations and
Associations Article of the Annotated Code of Maryland, as amended ("Title
8"), or any successor statute. The Trust is not intended to be, shall not be
deemed to be, and shall not be treated as, a general partnership, limited
partnership, joint stock association or, except as contemplated in Section
9.1, a corporation.
Section 1.4. POWERS. The Trust shall have all of the powers
granted to real estate investment trusts generally under Title 8 and shall
have any other and further powers as are not inconsistent with Title 8 or any
other applicable law.
Without limiting the generality of the foregoing, the Trust (i) may
continue the business of CenterPoint Properties Corporation, a Maryland
corporation (the "Predecessor Corporation"), with and into which the Trust
will be merged (the "Merger") with the Trust as the surviving entity and (ii)
may engage in business as a real estate investment trust under the Internal
Revenue Code of 1986, as amended, or any successor statute (the "Code"). For
purposes of this Declaration of Trust, the term "REIT" shall mean a real
estate investment trust as described in the Code.
Section 1.5. DURATION OF TRUST; SALE OF ASSETS. The Trust shall
continue perpetually unless terminated pursuant to any applicable provision
of Title 8. The Trust may be voluntarily dissolved or consolidated or its
existence terminated only by the affirmative vote of the holders of not less
than two-thirds of all of the shares of beneficial interest then outstanding
and entitled to vote on the matter. The Trust may sell or otherwise dispose
of all or substantially all of the real and personal property of the Trust
(the "Trust Property") only by the affirmative vote of the holders of not
less than two-thirds of all shares of beneficial interest then outstanding
and entitled to vote on the matter.
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ARTICLE II
TRUST SHARES
Section 2.1. AUTHORIZED SHARES. The total number of shares of
beneficial interest which the Trust has authority to issue is 60,000,000
shares (the "Shares"), of which 47,727,273 are Common Shares, par value $.001
per share ("Common Shares"), 2,272,727 are Class B Common Shares, par value
$.001 per share ("Class B Common Shares"), and 10,000,000 are Series
Preferred Shares, par value $.001 per share ("Preferred Shares"). The
aggregate par value of all authorized shares of beneficial interest having
par value is $60,000.
Section 2.2. VOTING RIGHTS. Subject to the provisions of Article
IV regarding Excess Shares (as such term is defined therein), each Common
Share shall entitle the holder thereof to one vote.
Section 2.3. ISSUANCE OF PREFERRED SHARES. The Preferred Shares
may be issued, from time to time, in one or more series as authorized by the
Board of Trustees. Prior to issuance of shares of each series of Preferred
Shares, the Board of Trustees by resolution shall designate that series to
distinguish it from all other series of Preferred Shares and classes of
shares of beneficial interest of the Trust, shall specify the number of
shares to be included in that series of Preferred Shares and, subject to the
provisions of Article IV regarding Excess Shares, shall set the terms,
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications and terms
or conditions of redemption.
Section 2.4. CLASSIFICATION OR RECLASSIFICATION OF UNISSUED
SHARES. Subject to the express terms of any series of Preferred Shares or any
class of Common Shares outstanding at the time and notwithstanding any other
provision of the Declaration of Trust, the Board of Trustees may increase or
decrease the number of, alter the designation of or classify or reclassify
any unissued Shares by setting or changing, in any one or more respects, from
time to time before issuing the Shares, and, subject to the provisions of
Article IV regarding Excess Shares, the terms, preferences, conversion and
other rights, voting powers, restrictions, limitations as to dividends or
other distributions, qualifications or terms or conditions of redemption of
any series or class of Shares.
Section 2.5. SALE OF SHARES. The Board of Trustees, in their
discretion, may from time to time issue or sell or contract to issue or sell
Shares, including Shares held in the treasury, to such party or parties and
for money or property actually received, as permitted under the laws of the
State of Maryland, at such time or times, and on such terms as the Trustees
deem appropriate. In connection with any issuance of Shares, the Trustees,
in their discretion, may provide for the issuance of fractional Shares.
Section 2.6. DECLARATION OF TRUST AND BY-LAWS. All persons who
shall acquire shares of beneficial interest in the Trust at any time and from
time to time shall acquire the same subject to the provisions of this
Declaration of Trust and the By-Laws of the Trust.
Section 2.7. CLASS B COMMON SHARES. The Class B Common Shares
shall have the following rights:
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(1) Dividend Rights.
(a) The holders of record of outstanding Class B Common
Shares shall be entitled to receive, when and as declared by the Board
of Trustees, out of funds legally available therefor, cash dividends
which are payable when, as and if authorized by the Board of Trustees,
pari passu with any dividends paid on the Trust's Common Shares, in an
amount per share equal to the Class B Common Shares Common Dividend
Amount, as in effect from time to time. The initial per share Class B
Common Shares Common Dividend Amount per annum shall be equal to
$1.7268. Each calendar quarter after the effective date of the Merger
(the "Effective Date") (or, if the Effective Date is not on the first
day of a calendar quarter, the period beginning on the Effective Date
and ending on the last day of the calendar quarter in which the Merger
shall have occurred) is referred to hereinafter as a "Dividend Period."
The amount of dividends payable with respect to each full Dividend
Period for the Class B Common Shares shall be computed by dividing the
Class B Common Shares Common Dividend Amount by four. The amount of
dividends on the Class B Common Shares payable with respect to the
initial Dividend Period shall be computed ratably on the basis of the
actual number of days in such Dividend Period and, if the Effective Date
is not on the first day of a calendar quarter, shall include the amount
of dividends payable with respect to the portion of the dividend period
of the Class B Common Stock of the Predecessor Corporation beginning on
the first day of calendar quarter of the Merger and ending on the day
immediately prior to the Effective Date computed ratably on the basis of
the actual number of days in such dividend period of the Predecessor
Corporation's Class B Common Stock. The amount of dividends on the
Class B Common Shares payable with respect to any other Dividend Period
shorter or longer than a full Dividend Period shall be computed ratably
on the basis of the actual number of days in such Dividend Period. In
the event of any change in the quarterly cash dividend per share
applicable to the Common Shares after the date of this Declaration of
Trust, the quarterly cash dividend per share of the Class B Common
Shares shall be adjusted for the same Dividend Period by an amount
computed by multiplying the amount of the change in the Common Shares
dividend by the Conversion Ratio (as defined in Section 2.7(3)(b)).
(b) In the event the Trust shall declare a distribution
payable in (i) securities of other persons, (ii) evidences of
indebtedness issued by the Trust or other persons, (iii) assets
(excluding cash dividends) or (iv) options or rights to purchase shares
or evidences of indebtedness in the Trust or other persons, then, in
each such case for the purpose of this Section 2.7(1), the holders of
the Class B Common Shares shall be entitled to a proportionate share of
any such distribution as though they were the holders of the number of
Common Shares of the Trust into which their shares of Class B Common
Shares are or would be convertible (assuming such shares of Class B
Common Shares were then convertible) as of the record date fixed for
determination of the holders of Common Shares of the Trust entitled to
receive such distribution.
(2) Liquidation Rights.
(a) Subject to any prior rights of any other class
or series of shares, the holders of Class B Common Shares shall be
entitled to receive the remaining assets of the Trust available for
distribution pro rata with the other holders of shares of the Trust as
though they were the holders of the number of Common Shares of the Trust
into which their Class B Common Shares are or would be convertible
(assuming such Class B Common Shares were then convertible) as of the
record date applicable to such distribution.
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(b) Neither a consolidation or merger of the Trust with or
into any other trust or corporation, nor a merger of any other trust or
corporation into the Trust, nor the purchase or redemption of all or
part of any outstanding class or classes of shares of the Trust, nor a
sale or transfer of all or any part of its assets, shall be considered a
liquidation, dissolution or winding up of the Trust within the meaning
of this Section 2.7(2).
(3) Conversation Rights.
(a) MANDATORY CONVERSION INTO COMMON SHARES.
(i) Beginning on September 30, 1998, and at the end of
each calendar quarter thereafter, such number of shares of Class B
Common Shares will mandatorily convert into such number of Common Shares
as will result in the holders of the Class B Common Shares owning, in
the aggregate, 4.9% of the then outstanding Common Shares; and if on any
such date the total number of outstanding Class B Common Shares would
not, upon conversion, result in the holders thereof owning, in the
aggregate, 4.9% of the then outstanding Common Shares, then all such
outstanding Class B Common Shares will mandatorily convert into Common
Shares. The Company will notify the Investor in writing at least five
(5) business days prior to the end of each calendar quarter as to the
number of Class B Common Shares subject to mandatory conversion, which
number will be revised, if necessary, as a result of intervening events,
no later than two (2) business days after the end of the applicable
quarter.
(ii) On September 21, 2005, each remaining Class B Common
Share which has not been converted to Common Shares shall mandatorily
convert to that number of fully paid and nonassessable Common Shares
equal to the Conversion Ratio, as adjusted, regardless of the 4.9%
limitation described in Section 2.7(3)(a)(i) above.
(iii) The Trust shall make such arrangements as it deems
appropriate for the issuance as soon as practicable of certificates
representing Common Shares issued upon the mandatory conversion of the
Class B Common Shares in exchange for and contingent upon surrender by
the holder of the certificate(s) representing such holder's Class B
Common Shares. From and after the date of mandatory conversion,
certificates representing Class B Common Shares shall be deemed to
represent an equal number of Common Shares.
(b) RIGHT TO CONVERT.
Beginning on September 21, 1998, the holders of Class B Common
Shares shall have the right, at their option, to convert each such
share, at any time and from time to time, into one fully paid and
nonassessable Common Share (the "Conversion Ratio," which is subject to
adjustment as provided below); provided, however, that no holder of
Class B Common Shares shall be entitled to convert such Class B Common
Shares into Common Shares pursuant to the foregoing provision, if, as a
result of such conversion, such person would become the Beneficial Owner
of more than 4.9% of the Trust's outstanding Common Shares. "Beneficial
Owner" shall have the meaning set forth in Rule 13d-3 under the
Securities and Exchange Act of 1934 (or any successor provision
thereto). Notwithstanding the foregoing,
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the foregoing conversion right may be exercised at any time after the
Effective Date and irrespective of the 4.9% limitation (and no such
limit shall apply) if any of the following circumstances occurs any time
after the Effective Date:
(i) For any two consecutive fiscal quarters, the
aggregate amount outstanding as of the end of the quarter under (1)
all mortgage indebtedness of the Trust and its consolidated
entities and (2) unsecured indebtedness of the Trust and its
consolidated entities for money borrowed that has not been made
generally subordinate to the other indebtedness for borrowed money
of the Trust or any consolidated entity exceeds fifty-five percent
(55%) of the Trust's total market capitalization, defined as the
market value of all of the Trust's outstanding shares, assuming the
conversion of all outstanding convertible securities, including the
Class B Common Shares plus the amount of the Company's total
non-convertible indebtedness (all as such items of indebtedness and
capitalization are reported in consolidated financial statements
contained in the Trust's Form 10-Ks and Form 10-Qs as filed with
the Securities and Exchange Commission); or
(ii) Fewer than three of John S. Gates, Jr., Robert M.
Stovall, Michael M. Mullen and Paul S. Fisher are continuing as Key
Managers of the Trust. (For purposes of this subparagraph (ii), a
"Key Manager" shall mean a Person who is (a) employed by the Trust
and (b) actively participates as a senior executive officer in the
management of the Trust); or
(iii) If (A) the Trust shall be party to, or shall have
announced or entered into an agreement for, any transaction
(including, without limitation, a merger, consolidation, statutory
share exchange or sale of all or substantially all of its assets
(each of the foregoing a "Transaction")), in each case as a result
of which Common Shares shall have been or will be converted into
the right to receive shares, securities or other property
(including cash or any combination thereof) or which has resulted
or will result in the holders of Common Shares immediately prior to
the Transaction owning less than 50% of the Common Shares after the
Transaction, or (b) a "change of control" as defined in the next
sentence occurs with respect to the Trust. A change of control
shall mean the acquisition (including by virtue of a merger, share
exchange or other business combination) by one shareholder or a
group of shareholders acting in concert with the power to elect a
majority of the Trust's Board of Trustees. The Trust shall notify
the holders of Class B Common Shares promptly if any of the events
listed in this Section 2.7(3)(b)(iii) shall occur.
(c) The Trust shall make such arrangements as it deems
appropriate for the issuance as soon as practicable of certificates
representing Common Shares issued upon the mandatory conversion of the
Class B Common Shares in exchange for and contingent upon surrender by
the holder of the certificate(s) representing such holder's Class B
Common Shares. From and after the date of mandatory conversion,
certificates representing Class B Common Shares shall be deemed to
represent an equal number of Common Shares.
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(d) PROCEDURE FOR CONVERSION. In order to exercise its right
to convert Class B Common Shares into Common Shares pursuant to Section
2.7(3)(b) above, the holder thereof shall surrender the certificate(s)
therefor, duly endorsed if the Trust shall so require, or accompanied by
appropriate instruments of transfer satisfactory to the Trust, at the
office of any transfer agent for the Class B Common Shares, or if there
is no such transfer agent, at the principal offices of the Trust, or at
such other office as may be designated by the Trust, together with
written notice that such holder elects to convert such shares. Such
notice shall also state the name(s) and address(es) in which such holder
wishes the certificate(s) for the Common Shares issuable upon conversion
to be issued. As soon as practicable after an optional conversion, the
Trust shall issue and deliver at said office a certificate or
certificates for the number of whole Common Shares issuable upon
conversion of the Class B Common Shares duly surrendered for conversion,
to the person(s) entitled to receive the same. Class B Common Shares
shall be deemed to have been converted immediately prior to the close of
business on the date on which the certificates therefor and notice of
election to convert the same are duly received by the Trust in
accordance with the foregoing provisions, and the person(s) entitled to
receive the Common Shares issuable upon such conversion shall be deemed
for all purposes as record holder(s) of such Common Shares as of the
close of business on such date.
(e) NO FRACTIONAL SHARES. No fractional shares shall be
issued upon conversion of the Class B Common Shares into Common Shares,
and the number of Common Shares to be issued shall be rounded to the
nearest whole share. Whether or not fractional shares would be issuable
upon such conversion shall be determined on the basis of the total
number of Class B Common Shares the holder is at the time converting
into Common Shares and the number of Common Shares issuable upon such
aggregate conversion. As to any final fraction of a share which the
holder of one or more Class B Common Shares would be entitled to receive
upon exercise of his conversion right, the Trust shall pay a cash
adjustment in an amount equal to the same fraction of the last sale
price (or bid price if there were no sales) per share of Common Shares
on the New York Stock Exchange on the business day which next precedes
the conversion date or, if such Common Shares is not then listed or
admitted to trading on such Exchange, on any national securities
exchange, of the market price per share (as determined in a manner
prescribed by the Board of Trustees of the Trust) at the close of
business on the business day which next precedes the conversion date.
(f) ADJUSTMENTS.
(i) The Conversion Ratio shall be subject to adjustment
as follows:
(A) In the event the Trust shall at any time (i)
pay a dividend or make a distribution to holders of Common Shares
in shares, (ii) subdivide its outstanding Common Shares into a
larger number of shares, (iii) combine its outstanding Common
Shares into a smaller number of shares, or (iv) issue by
reclassification of its Common Shares any shares of the Trust, the
Conversion Ratio in effect immediately prior thereto shall be
adjusted as provided below so that the holder of any Class B Common
Shares thereafter surrendered for conversion shall be
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entitled to receive the number of shares of the Trust which such
holder would have owned or have been entitled to receive after the
happening of any of the events described above, had such Class B
Common Share been converted immediately prior to the happening of
such event. Any adjustment made pursuant to this subparagraph (a)
shall become effective retroactively immediately after the record
date in the case of a dividend and shall become effective
immediately after the effective date in the case of a subdivision,
combination or reclassification.
(B) In case the Trust shall issue rights or
warrants to all holders of its Common Shares entitling them to
subscribe for or purchase Common Shares at a price per share less
than the current market price (as hereinafter defined) per share of
Common Shares at the record date mentioned below, the number of
Common Shares into which each Class B Common Share shall thereafter
be convertible shall be determined by multiplying the number of
Common Shares into which such Class B Common Share was therefore
convertible by a fraction, of which the numerator shall be the
number of Common Shares outstanding on the date of issuance of such
rights or warrants plus the number of additional Common Shares
offered for subscription or purchase, and of which the denominator
shall be the number of Common Shares outstanding on the date of
issuance of such rights or warrants plus the number of shares which
the aggregate offering price of the total number of shares so
offered would purchase at such current market price. Such
adjustment shall be made whenever such rights or warrants are
issued, and shall become effective retroactively immediately after
the record date for the determination of shareholders entitled to
receive such rights or warrants.
(C) In case the Trust shall distribute to all
holders of its Common Shares evidences of its indebtedness or
assets or rights or warrants to subscribe for or purchase
securities issued by the Trust or property of the Trust (excluding
those referred to in subparagraph (B) above), then in each such
case the number of Common Shares into which each Class B Common
Share shall thereafter be convertible shall be determined by
multiplying the number of Common Shares into which such Class B
Common Share was theretofore convertible by a fraction, of which
the numerator shall be the current market price per Common Share,
and of which the denominator shall be such current market price per
Common Share, less the then fair market value (as determined by the
Board of Trustees of the Trust, whose determination shall be
conclusive) of the portion of the assets or evidence of
indebtedness so distributed or of such rights or warrants
applicable to one share of the Common Shares. Such adjustment
shall be made whenever any such distribution is made, and shall
become effective retroactively immediately after the record date
for the determination of shareholders entitled to receive such
distribution.
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(D) If any such rights or warrants referred to
above shall expire without having been exercised, the Conversion
Ratio as theretofore adjusted because of the issue of such rights
or warrants shall forthwith be readjusted to the Conversion Ratio
which would have been in effect had an adjustment been made on the
basis that only the rights or warrants so issued or sold were those
rights or warrants actually exercised and that with respect to any
such rights or warrants to subscribe for or purchase securities
issued by the Trust, other than Common Shares or property of the
Trust, the fair market value thereof shall be the fair market value
of the rights or warrants actually exercised. If any such rights
or warrants shall expire without having been exercised, the
Conversion Ratio as theretofore adjusted because of the issue of
such rights or warrants shall forthwith be readjusted to the
Conversion Ratio which would have been in effect had an adjustment
been made on the basis that the only rights or warrants, so issued
or sold, were those rights or warrants actually exercised and that
with respect to any such rights or warrants to subscribe for or
purchase securities issued by the Trust, other than Common Shares,
or property of the Trust the fair market value thereof shall be the
fair market value of the rights or warrants actually exercised.
For the purpose of any computation under this
paragraph (i) the current market price per Common Share at any date
shall be deemed to be the average of the daily closing prices for
the fifteen (15) consecutive business days commencing thirty (30)
business days before the day in question. The closing price for
each day shall be the last reported sale price regular way or, in
the case no such reported sale takes place on such day, the average
of the reported closing bid and asked prices regular way, in either
case on the New York Stock Exchange, or, if the Common Shares are
not listed or admitted to trading on such Exchange, on any national
securities exchange, designated by the Board of Trustees, on which
the Common Shares are listed or admitted to trading, or if not
listed or admitted to trading on any national securities exchange,
the average of the closing bid and asked prices as furnished by any
New York Stock Exchange firm selected from time to time by the
Trust for the purpose.
All calculations under this paragraph (i) shall be
made to the nearest cent or to the nearest 1/100th of a share as
the case may be.
(ii) No adjustment of the Conversion Ratio shall be made
as a result of or in connection with the issuance of Common Shares of
the Trust pursuant to options or stock purchase agreements now or
hereafter granted or entered into with directors, officers or employees
of the Trust or its subsidiaries in connection with their employment,
whether entered into at the beginning of the employment or at any time
thereafter.
(iii) In case of:
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(A) any capital reorganization of the Trust, or
(B) the consolidation or merger of the Trust with
or into another trust or corporation, or
(C) a statutory share exchange whereby the Trust's
Common Shares are converted into property other than cash, or
(D) the sale, transfer or other disposition of all
or substantially all of the property, assets or business of the
Trust as a result of which sale, transfer or other disposition
property other than cash shall be payable or distributable to the
holders of the Common Shares, then, in each such case, each Class B
Common Share shall thereafter be convertible into the number and
class of shares or other securities or property of the Trust, or of
the trust or corporation resulting from such consolidation or
merger or with or to which such statutory share exchange, sale,
transfer or other disposition shall have been made, to which the
Common Shares otherwise issuable upon conversion of such Class B
Common Share would have been entitled upon such reorganization,
consolidation, merger, statutory share exchange, or sale, transfer
or other disposition if outstanding at the time thereof; and in any
such case appropriate adjustment, as determined by the Board of
Trustees, shall be made in the application of the provisions set
forth in this Section 2.7(f) with respect to the conversion rights
thereafter of the holders of the Class B Common Shares, to the end
that such provisions shall thereafter be applicable, as nearly as
reasonably may be, in relation to any shares or securities or other
property thereafter issuable or deliverable upon the conversion of
Class B Common Shares. Proper provision shall be made as a part of
the terms of any such reorganization, consolidation, merger,
statutory share exchange or sale, transfer or other disposition
whereby the conversion rights of the holders of Class B Common
Shares shall be protected and preserved in accordance with the
provisions of this paragraph (iii). The provisions of this
paragraph (iii) shall similarly apply to successive capital
reorganizations, consolidations, merger, statutory share exchanges,
sales, transfers or other dispositions of property as aforesaid.
(iv) Upon conversion of any Class B Common Shares, 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 Shares of record on a date
prior to the date of conversion.
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(v) Whenever the Conversion Ratio shall be adjusted as
herein provided, the Trust shall cause to be mailed by first class mail,
postage prepaid, as soon as practicable to each holder of record of
Class B Common Shares a notice stating that the Conversion Ratio has
been adjusted and setting forth the adjusted Conversion Ratio, together
with an explanation of the calculation of the same.
(vi) If the Trust shall be party to any Transaction in
each case as a result of which Common Shares shall be converted into the
right to receive stock, securities or other property (including cash or
any combination thereof), the holder of each Class B Common Share shall
have the right after such Transaction to convert such share, pursuant to
the optional conversion provisions hereof, into the number and kind of
shares of stock or other securities and the amount and kind of property
receivable upon such Transaction by a holder of the number of Common
Shares issuable upon conversion of such Class B Common Share immediately
prior to such Transaction. The Trust shall not be party to any
Transaction unless the terms of such Transaction are consistent with the
provisions of this Section 2.7(3)(f)(vi), and it shall not consent to or
agree to the occurrence of any Transaction until the Trust has entered
into an agreement with the successor or purchasing entity, as the case
may be, for the benefit of the holders of the Class B Common Shares,
thereby enabling the holders of the Class B Common Shares to receive the
benefits of this Section 2.7(3)(f)(vi) and the other provisions of this
Declaration of Trust. Without limiting the generality of the foregoing,
provision shall be made for adjustments in the Conversion Ratio which
shall be as nearly equivalent as may be practicable to the adjustments
provided for in Section 2.7(3)(f)(i). The provisions of this Section
2.7(3)(f)(vi) shall similarly apply to successive Transactions.
(vii) In the event that the Trust shall propose to
effect any Transaction which would result in an adjustment under Section
2.7(3)(f)(vi), the Trust shall cause to be mailed to the holders of
record of Class B Common Shares at least twenty (20) days prior to the
applicable date hereinafter specified a notice stating the date on which
such Transaction is expected to become effective, and the date as of
which it is expected that holders of Common Shares of record shall be
entitled to exchange their shares of Common Shares for securities or
other property deliverable upon such Transaction. Failure to give such
notice, or any defect therein, shall not affect the legality or validity
of such Transaction.
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(g) Other.
(i) The Trust shall at all times reserve and keep
available out of its authorized but unissued Common Shares the
maximum number of Common Shares issuable upon the conversion of all
Class B Common Shares then outstanding, and if at any time the
number of authorized but unissued Common Shares shall not be
sufficient to effect the conversion of all then outstanding Class B
Common Shares, in addition to such other remedies as shall be
available to the holder of such Class B Common Shares, the Trust
shall take such corporate action as may, in the opinion of its
counsel, be necessary to increase its authorized but unissued
Common Shares to such number of shares as shall be sufficient for
such purposes.
(ii) The Trust shall pay any taxes that may be
payable in respect of the issuance of Common Shares upon conversion
of Class B Common Shares, but the Trust shall not be required to
pay any taxes which may be payable in respect of any transfer of
shares of Class B Common Shares or any transfer involved in the
issuance of Common Shares in a name other than that in which the
Class B Common Shares so converted are registered, and the Trust
shall not be required to transfer any such Class B Common Shares or
to issue or deliver any such Common Shares unless and until the
person(s) requesting such transfer or issuance shall have paid to
the Trust the amount of any such taxes, or shall have established
to the satisfaction of the Trust that such taxes have been paid.
(iii) The Trust will not, by amendment of the
Declaration of Trust or through any reorganization,
recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed hereunder by the Trust,
but will at all times in good faith assist in carrying out of all
the provisions of this Declaration of Trust and in the taking of
all such action as may be necessary or appropriate to protect the
conversion rights of the holders of the Class B Common Shares
against impairment.
(iv) Holders of Class B Common Shares shall be
entitled to receive copies of all communications by the Trust to
its holders of Common Shares, concurrently with the distribution to
such shareholders.
(v) All Common Shares issued upon conversion of
shares of Class B Common Shares shall upon issue be fully paid and
nonassessable by the Trust and free from original issue taxes.
(4) Voting Rights. The holders of record of Class B Common Shares
shall not be entitled to vote on any matter on which the holders of
record of Common Shares are
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entitled to vote, except that the holders of a majority of the Class B
Common Shares, voting as a separate class, shall be required to vote on
and approve: (a) any material adverse change in the rights, preferences
or privileges of the Class B Common Shares and (b) any creation of a new
class of stock having rights, preferences or privileges senior to or in
parity with the rights, preferences or privileges of the Class B Common
Shares.
(5) Reacquired Shares. Class B Common Shares converted, redeemed
or otherwise purchased or acquired by the Trust shall be restored to the
status of authorized but unissued Common Shares without designation as
to series.
ARTICLE III
PROVISIONS FOR DEFINING, LIMITING
AND REGULATING CERTAIN POWERS OF THE
TRUST AND OF THE SHAREHOLDERS AND TRUSTEES
Section 3.1. NUMBER AND CERTIFICATION. The number of trustees of
the Trust initially shall be seven (the "Trustees"), which number may be
increased or decreased pursuant to the By-Laws of the Trust; provided,
however, that (a) if there are shares outstanding and so long as there are
three or more shareholders, the number of Trustees shall never be less than
three and (b) if there are shares outstanding and so long as there are less
than three shareholders, the number of Trustees may be less than three but
not less than the number of shareholders. The names of the trustees who
shall serve effective immediately and until the first annual meeting of
shareholders and until their successors are duly elected and shall qualify
are:
Martin Barber
John S. Gates, Jr.
Robert L. Stovall
Nicholas C. Babson
Alan D. Feld
John J. Kinsella
Thomas E. Robinson
At the first annual meeting of shareholders, and at each annual
meeting thereafter, the shareholders shall elect the trustees, who shall serve
until their successors are duly elected and shall qualify.
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Section 3.2. POWERS OF TRUSTEES. Subject to the express
limitations set forth herein or in the By-Laws, (i) the business and affairs
of the Trust shall be managed under the direction of the Board of Trustees
and (ii) the Trustees shall have full, exclusive and absolute power, control
and authority over the Trust Property and over the business of the Trust as
if they, in their own right, were the sole owners thereof. The Trustees may
take any actions as in their sole judgment and discretion are necessary or
desirable to conduct the business of the Trust. This Declaration of Trust
shall be construed with a presumption in favor of the grant of power and
authority to the Trustees.
Section 3.3. RESIGNATION, REMOVAL AND DEATH. A Trustee may
resign at any time by giving written notice thereof in recordable form to the
other Trustees at the principal office of the Trust. A Trustee may be
removed, with or without cause, by the shareholders upon the affirmative vote
of a majority of all of the votes entitled to be cast for the election of
Trustees. A Trustee may be removed, with or without cause, by the Board of
Trustees upon the affirmative vote of a majority of the then acting Trustees.
A special meeting of the shareholders or the Board of Trustees may be
called, in accordance with the By-Laws of the Trust, for the purpose of
removing a Trustee. Upon the resignation or removal of any Trustee, or his
otherwise ceasing to be a Trustee, he shall automatically cease to have any
right, title or interest in and to the Trust Property and shall execute and
deliver such documents and render such accounting as the remaining Trustees
require and shall thereupon be discharged as Trustee. Upon the incapacity or
death of any Trustee, his status as a Trustee shall immediately terminate,
and his legal representatives shall perform the acts set forth in the
preceding sentence.
Section 3.4. AUTHORIZATION BY BOARD OF ISSUANCE OF SHARES OF
BENEFICIAL INTEREST. The Board of Trustees of the Trust may authorize the
issuance from time to time of shares of beneficial interest of the Trust of
any class, whether now or hereafter authorized, or securities convertible
into shares of beneficial interest of any class, whether now or hereafter
authorized, for such consideration as the Board of Trustees in its sole
discretion may deem advisable, subject to such restrictions or limitations,
if any, as may be set forth in this Declaration of Trust or the By-Laws of
the Trust or in the general laws of the State of Maryland.
Section 3.5. PREEMPTIVE RIGHTS AND APPRAISAL RIGHTS. Except as
may be provided by the Board of Trustees in authorizing the issuance of
Preferred Shares pursuant to Article II, Section 3, no holder of Shares
shall, as such holder, (i) have any preemptive right to purchase or subscribe
for any additional shares of beneficial interest of the Trust or any other
security of the Trust which it may issue or sell or (ii) except as expressly
required under Title 8, have any right to require the Trust to pay him the
fair value of his Shares in an appraisal or similar proceeding.
Section 3.6. INDEMNIFICATION. The Trust shall have the power, to
the maximum extent permitted by Maryland law in effect from time to time, to
obligate itself to indemnify, and to pay or reimburse expenses under the
procedure provided by such Maryland law in advance of final disposition of a
proceeding to, (i) any individual who is a present or former Trustee or
officer of the Trust or (ii) any individual who, while a Trustee of the Trust
and at the request of the Trust, serves or has served another trust,
partnership, joint venture, corporation, employee benefit plan or any other
enterprise as a trustee, officer, partner or trustee of such trust,
partnership, joint venture, corporation, employee benefit plan or other
enterprise. The Trust shall have the power, with the approval of its Board
of Trustees, to provide such indemnification and advancement of expenses to a
person who served a predecessor of the Trust, including, without limitation,
the Predecessor Corporation, in any of the capacities, or similar to the
capacities, described in (i) or (ii) above and to any employee or agent of
the Trust or a predecessor of the Trust, including, without limitation, the
Predecessor Corporation.
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Section 3.7. ADVISOR AGREEMENTS. Subject to such approval of
shareholders and other conditions, if any, as may be required by any
applicable statute, rule or regulation, the Board of Trustees may authorize
the execution and performance by the Trust of one or more agreements with any
person, association, company, trust, partnership (limited or general) or
other organization whereby, subject to the supervision and control of the
Board of Trustees, any such other person, association, company, trust,
partnership (limited or general) or other organization (the "Advisor") shall
render or make available to the Trust managerial, investment, advisory and/or
related services, office space and other services and facilities (including,
if deemed advisable by the Board of Trustees, the management or supervision
of the investments of the Trust) upon such terms and conditions as may be
provided in such agreement or agreements (including, if deemed fair and
equitable by the Board of Trustees, the compensation payable thereunder by
the Trust).
Section 3.8. RELATED PARTY TRANSACTIONS. Without limiting any
other procedures available by law or otherwise to the Trust, the Board of
Trustees may authorize any agreement of the character described in Section
3.7 or other transaction with any person, association, company, trust,
partnership (limited or general) or other organization, although one or more
of the Trustees or officers of the Trust may be a party to any such agreement
or an officer, trustee, shareholder or member of such other party, and no
such agreement or transaction shall be invalidated or rendered void or
voidable solely by reason of the existence of any such relationship if the
existence is disclosed or known to the Board of Trustees, and the contract or
transaction is approved by the affirmative vote of a majority of the
disinterested Trustees, even if they constitute less than a quorum of the
Board. Any Trustee of the Trust who is also a trustee, officer, shareholder
or member of such other entity may be counted in determining the existence of
a quorum at any meeting of the Board of Trustees considering such matter.
Section 3.9. DETERMINATION BY BOARD. The determination as to any
of the following matters, made in good faith by or pursuant to the direction
of the Board of Trustees consistent with this Declaration of Trust and in the
absence of actual receipt of an improper benefit in money, property or
services or active and deliberate dishonesty established by a court, shall be
final and conclusive and shall be binding upon the Trust and every holder of
its shares: the amount of the net income of the Trust for any period and the
amount of assets at any time legally available for the payment of dividends,
redemption of its shares or the payment of other distributions on its shares;
the amount of paid-in surplus, net assets, other surplus, annual or other net
profit, net assets in excess of capital, undivided profits or excess of
profits over losses on sales of assets; 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 have been
paid or discharged); the fair value, or any sale, bid or asked price to be
applied in determining the fair value, of any asset owned or held by the
Trust, and any matters relating to the acquisition, holding and disposition
of any assets by the Trust. In performing his duties under this Declaration
of Trust, a Trustee is entitled to rely on any information, opinion, report
or statement, including any financial statement or other financial data,
prepared or presented by: (i) an officer or employee of the Trust whom the
Trustee reasonably believes to be reliable and competent in the matters
presented; (ii) a lawyer, public accountant or other person, as to a matter
which the Trustee reasonably believes to be within the person's professional
or expert competence; or (iii) a committee of the board on which the Trustee
does not serve, as to a matter within its designated authority, if the
Trustee reasonably believes the committee to merit confidence.
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Section 3.10. LEGAL TITLE. Legal title to all Trust Property
shall be vested in the Trust, but it may cause legal title to any Trust
Property to be held by or in the name of any or all of the Trustees or any
other individual, corporation, partnership, estate, trust, association or
private foundation as nominee. Any right, title or interest of the Trustees
in and to the Trust Property shall automatically vest in successor and
additional Trustees upon their qualification and acceptance of election or
appointment as Trustees, and they shall thereupon have all the rights and
obligations of Trustees, whether or not conveyancing documents have been
executed and delivered pursuant to Section 3.3 or otherwise. Written
evidence of qualification and acceptance of election or appointment of
successor and additional Trustees may be filed with the records of the Trust
and in such other offices, agencies or places as the Trust or Trustees may
deem necessary or desirable.
Section 3.11. RESERVED POWERS OF BOARD. The enumeration and
definition of particular powers of the Board of Trustees included in this
Article III 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 provision
of this Declaration of Trust, or construed or deemed by inference or
otherwise in any manner to exclude or limit the powers conferred upon the
Board of Trustees under the general laws of the State of Maryland as now or
hereafter in force.
ARTICLE IV
RESTRICTION ON TRANSFER
ACQUISITION AND REDEMPTION OF SHARES
Section 4.1. DEFINITIONS. For the purpose of this Article IV,
the following terms shall have the following meanings:
"Act" means the Securities Act of 1933, as amended.
"Beneficial Ownership" shall mean ownership of Equity Shares
(as hereinafter defined) by a Person (as hereinafter defined) who would be
treated as an owner of such Equity Shares under Section 542(a)(2) of the Code
either directly or constructively through the application of Section 544 of
the Code, as modified by Section 856(h)(1)(B) of the Code but without regard
to Section 856(h)(3) of the Code. The terms "Beneficial Owner,"
"Beneficially Owns," "Beneficially Own" and "Beneficially Owned" shall have
the correlative meanings.
"Beneficiary" shall mean the beneficiary of the Special Trust
(as hereinafter defined) as determined pursuant to Section 4.19 of this
Article IV.
"Debt" shall mean indebtedness of (i) the Trust or (ii) any
subsidiary thereof.
"Equity Shares" shall mean either Common Shares or Preferred
Shares.
"Excess Shares" shall have the meaning set forth in Section
4.3.
"Existing Holder" shall mean Capital and Regional Properties
plc, a United Kingdom corporation.
"Existing Holder Limit" shall initially mean 18.0%, in number
of shares or value, of the outstanding Equity Shares of the Trust, and after
any adjustment as set forth in Section 4.10 of this
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Article IV, shall mean such greater percentage of the outstanding Equity
Shares as so adjusted. The number and value of shares of the outstanding
Equity Shares of the Trust shall be determined by the Board of Trustees in
good faith, which determination shall be conclusive for all purposes hereof.
"Market Price" shall mean the last reported sales price of
Common Shares or Preferred Shares, as the case may be, reported on any
nationally registered securities exchange on the trading day immediately
preceding the relevant date, or if not then traded on any such exchange, the
last reported sales price of the Common Shares or Preferred Shares, as the
case may be, on the trading day immediately preceding the relevant date as
reported on any exchange or quotation system over which the Common Shares or
Preferred Shares, as the case may be, may be traded, or if not then traded
over any exchange or quotation system, then the market price of the Common
Shares or Preferred Shares, as the case may be, on the relevant date as
determined in good faith by the Board of Trustees of the Trust.
"Ownership Limit" shall initially mean 9.8%, in number of
shares or value, of the outstanding Equity Shares of the Trust, and after any
adjustment as set forth in Section 4.10 of this Article IV, shall mean such
greater percentage of the outstanding Equity Shares as so adjusted. The
number and value of shares of the outstanding Equity Shares of the Trust
shall be determined by the Board of Trustees in good faith, which
determination shall be conclusive for all purposes hereof.
"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 or any successor statute, joint stock company or other entity; but does
not include an underwriter which participated in any public offering
registered under the Act of any shares of the Trust for a period of 30 days
following the purchase by such underwriter of the Common Shares and/or
Preferred Shares.
"Purported Beneficial Transferee" shall mean, with respect to
any purported Transfer which results in Excess Shares (as defined in Section
4.3 of this Article IV), the purported beneficial transferee for whom the
Purported Record Transferee (as hereinafter defined) would have acquired
shares of Equity Shares, if such transfer had been valid under Section 4.2 of
this Article IV.
"Purported Record Transferee" shall mean, with respect to any
purported Transfer which results in Excess Shares, the record Holder of the
Equity Shares if such transfer had been valid under Section 4.2 of this
Article IV.
"Restriction Termination Date" shall mean the first day on
which the Board of Trustees of the Trust determines that it is no longer in
the best interests of the Trust to attempt to, or continue to, qualify as a
REIT.
"Special Trust" shall mean the trust created pursuant to
Section 4.15 of this Article IV.
"Transfer" shall mean any sale, transfer, gift, assignment,
devise or other disposition of Equity Shares (including (i) the granting of
any option or entering into any agreement for the sale, transfer or other
disposition of Equity Shares or (ii) the sale, transfer, assignment or other
disposition of any securities or rights convertible into or exchangeable for
Equity Shares, but excluding the exchange of Debt for Equity Shares), whether
by operation of law or otherwise. The terms "Transfers" and "Transferred"
shall have the correlative meanings.
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"Trustee" shall mean the Trust as trustee for the Special
Trust, and any successor trustee appointed by the Trust.
Section 4.2. OWNERSHIP LIMITATION. (i) Except as provided in
Section 4.12 of this Article IV, until the Restriction Termination Date, no
Person (other than an Existing Holder) shall Beneficially Own shares of
Common Shares and/or Preferred Shares in excess of the Ownership Limit and no
Existing Holder shall Beneficially Own Common Shares and/or Preferred Shares
in excess of the Existing Holder Limit for such Existing Holder.
(ii) Subject to Section 4.22, notwithstanding any other
provisions of this Article IV and except as provided in Sections 4.9 and 4.12
of this Article IV, until the Restriction Termination Date, any Transfer
that, if effective, would result in any Person (other than an Existing
Holder) Beneficially Owning Common Shares and/or Preferred Shares in excess
of the Ownership Limit shall be void ab initio as to the Transfer of such
Common Shares and/or Preferred Shares which would be otherwise Beneficially
Owned by such Person in excess of the Ownership Limit; and the intended
transferee shall acquire no rights in such Common Shares and/or Preferred
Shares.
(iii) Subject to Section 4.22, notwithstanding any other
provisions of this Article IV and except as provided in Sections 4.9 and 4.12
of this Article IV, until the Restriction Termination Date, any Transfer
that, if effective, would result in any Existing Holder Beneficially Owning
Common Shares and/or Preferred Shares in excess of the Existing Holder Limit
shall be void AB INITIO as to the Transfer of such Common Shares and/or
Preferred Shares which would be otherwise Beneficially Owned by such Existing
Holder in excess of the Existing Holder Limit; and such Existing Holder shall
acquire no rights in such Common Shares and/or Preferred Shares.
(iv) Subject to Section 4.22, notwithstanding any other
provisions of this Article IV and except as provided in Section 4.12 of this
Article IV, until the Restriction Termination Date, any Transfer that, if
effective, would result in the Common Shares and/or Preferred Shares being
Beneficially Owned by less than 100 Persons (determined without reference to
any rules of attribution) shall be void AB INITIO as to the Transfer of such
shares of Common Shares and/or Preferred Shares which would be otherwise
Beneficially Owned by the transferee; and the intended transferee shall
acquire no rights in such Common Shares and/or Preferred Shares.
(v) Until the Restriction Termination Date, any Transfer
that, if effective, would result in the Trust being "closely held" within the
meaning of Section 856(h) of the Code shall be void AB INITIO as to the
Transfer of the shares of Common Shares and/or Preferred Shares which would
cause the Trust to be "closely held" within the meaning of Section 856(h) of
the Code or any successor statute; and the intended transferee shall acquire
no rights in such Common Shares and/or Preferred Shares.
Section 4.3. EXCESS SHARES. (i) If, notwithstanding the other
provisions contained in this Article IV, at any time until the Restriction
Termination Date, there is a purported Transfer or other change in the
capital structure of the Trust such that any Person would Beneficially Own
Common Shares and/or Preferred Shares in excess of the Ownership Limit or
that the Existing Holder would Beneficially Own Common Shares and/or
Preferred Shares in excess of the Existing Holder Limit, then, except as
otherwise provided in Sections 4.9 and 4.12, such Common Shares and/or
Preferred Shares in excess of such Ownership Limit or Existing Holder Limit
(rounded up to the nearest whole share) shall constitute "Excess Shares" and
be treated as provided in this Article IV. Such designation and treatment
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shall be effective as of the close of business on the business day prior to
the date of the purported Transfer or change in capital structure.
(ii) If, notwithstanding the other provisions contained
in this Article IV, at any time until the Restriction Termination Date, there
is a purported Transfer or other change in the capital structure of the Trust
(except for a change resulting from the exchange of Debt for Equity Shares)
which, if effective, would cause the Trust to become "closely held" within
the meaning of Section 856(h) of the Code or any successor statute, then the
Common Shares and/or Preferred Shares being Transferred which would cause the
Trust to be "closely held" within the meaning of Section 856(h) of the Code
or any successor statute (rounded up to the nearest whole share) shall
constitute Excess Shares and be treated as provided in this Article IV. Such
designation and treatment shall be effective as of the close of business on
the business day prior to the date of the purported Transfer or change in
capital structure.
(iii) The Ownership Limit shall not apply to the
acquisition of Common Shares or Preferred Shares by an underwriter in a
public offering of such shares or in any transaction involving the issuance
of shares by the Trust in which the Board of Trustees determines that the
underwriter or another person initially acquiring such shares will timely
distribute such shares to others such that the following such distribution
none of such shares will be Excess Shares.
Section 4.4. PREVENTION OF TRANSFER. If the Board of Trustees or
its designee shall at any time determine in good faith that a Transfer has
taken place in violation of Section 4.2 of this Article IV or that a Person
intends to acquire or has attempted to acquire Beneficial Ownership of any
shares of the Trust in violation of Section 4.2 of this Article IV, the Board
of Trustees or its designee shall take such action as it deems advisable to
refuse to give effect to or to prevent such Transfer, including, but not
limited to, refusing to give effect to such Transfer on the books of the
Trust, directing the Trust's transfer agent and/or registrar to refuse to
give effect to such Transfer on the books of the Trust or instituting
proceedings to enjoin such Transfer; provided, however, that any Transfers or
attempted Transfers in violation of subparagraphs Section 4.2(ii), (iii) and
(iv) of this Article IV shall automatically result in the designation and
treatment described in Section 4.3 irrespective of any action (or non-action)
by the Board of Trustees or its designee.
Section 4.5. NOTICE TO TRUST. Any Person who acquires or
attempts to acquire shares in violation of Section 4.2 of this Article IV, or
any Person who is a transferee such that Excess Shares result under Section
4.3 of this Article IV, shall immediately give written notice or, in the
event of a proposed or attempted Transfer, give at least 15 days prior
written notice to the Trust of such event and shall provide to the Trust such
other information as the Trust may request in order to determine the effect,
if any, of such Transfer or attempted Transfer on the Trust's status as a
REIT.
Section 4.6. INFORMATION FOR TRUST. Until the Restriction
Termination Date:
(i) every Beneficial Owner of more than 5.0% (or such
other percentage, between 1/2 of 1% and 5%, as provided in the regulations of
the Internal Revenue Service promulgated under the Code) of the number or
value of outstanding Equity Shares of the Trust shall, within 30 days after
January 1 of each year, give written notice to the Trust stating the name and
address of such Beneficial Owner, the number of shares Beneficially Owned,
and a description of how such shares are held. Each such Beneficial Owner
shall provide to the Trust such additional information as the Trust may
reasonably request in order to determine the effect, if any, of such
Beneficial Ownership on the Trust's status as a REIT; and
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(ii) each Person who is a Beneficial Owner of Common
Shares and/or Preferred Shares and each Person (including the shareholder of
record) who is holding Common Shares and/or Preferred Shares for a Beneficial
Owner shall provide to the Trust such information as the Trust may reasonably
request in order to determine the Trust's status as a REIT, to comply with
the requirements of any taxing authority or governmental agency or to
determine any such compliance.
Section 4.7. OTHER ACTION BY BOARD. Subject to Section 4.22,
notwithstanding any other provisions of this Article IV, nothing contained in
this Article IV shall limit the authority of the Board of Trustees to take
such other action as it deems necessary or advisable to protect the Trust and
the interests of its shareholders by preservation of the Trust's status as a
REIT.
Section 4.8. AMBIGUITIES. In the case of an ambiguity in the
application of any of the provisions of this Article IV, including any
definition contained in Section 4.1, the Board of Trustees shall have the
power to determine the application of the provisions of this Article IV with
respect to any situation based on the facts known to it.
Section 4.9. MODIFICATION OF EXISTING HOLDER LIMITS. Subject to
the limitations provided in Section 4.11 of this Article IV, an Existing
Holder may elect to participate in a dividend reinvestment plan approved by
the Board of Trustees of the Trust which results in Beneficial Ownership of
Common Shares and/or Preferred Shares by such participating Existing Holder.
Any such participation shall increase the Existing Holder Limit for the
affected Existing Holder to the maximum extent possible under Section 4.11 to
permit Beneficial Ownership of the Common Shares and/or Preferred Shares
acquired as a result of such participation.
Section 4.10. INCREASE IN OWNERSHIP LIMIT. Subject to the
limitations provided in Section 4.11 of this Article IV, the Board of
Trustees may from time to time increase the Ownership Limit.
Section 4.11. LIMITATIONS ON CHANGES IN OWNERSHIP LIMIT. (i)
Neither the Ownership Limit nor the Existing Holder Limit may be increased
(nor may any additional Existing Holder Limit be created) if, after giving
effect to such increase (or creation), five Beneficial Owners of Equity
Shares (including all of the then Existing Holders) could Beneficially Own,
in the aggregate, more than 50% in number or value of the outstanding Equity
Shares.
(ii) Prior to the modification of the Ownership Limit or
Existing Holder Limit pursuant to Sections 4.9 or 4.10 of this Article IV,
the Board of Trustees of the Trust shall require such opinions of counsel,
affidavits, undertakings or agreements as it may deem necessary to advisable
in order to ensure the Trust's status as a REIT will not be affected.
(iii) No Existing Holder Limit shall be reduced to a
percentage which is less than the Ownership Limit.
Section 4.12. EXEMPTIONS BY BOARD. The Board of Trustees, upon
receipt of a ruling from the Internal Revenue Service or an opinion of
counsel or other evidence satisfactory to the Board of Trustees and upon at
least 15 days written notice from a Transferee prior to a proposed Transfer
which, if consummated, would result in the intended Transferee owning shares
in excess of Ownership Limit or Existing Holder Limit, as the case may be,
and upon such other conditions as the Board of Trustees may direct, may
exempt a Person from the Ownership Limit or the Existing Holder Limit, as the
case may be.
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Section 4.13. LEGEND. Each certificate for Common Shares and for
Preferred Shares shall bear substantially the following legend:
The securities represented by this certificate are subject
to restrictions on transfer for the purpose of the Trust's
maintenance of its status as a real estate investment trust
under the Internal Revenue Code of 1986, as amended. Except
as otherwise provided pursuant to the Declaration of Trust
of the Trust, no Person may Beneficially Own Common Shares
and/or Preferred Shares in excess of 9.8% (or such greater
percentage as may be determined by the Board of Trustees of
the Trust) of the number or value of the outstanding Equity
Shares of the Trust (unless such Person is an Existing
Holder). Any Person who attempts or proposes to
Beneficially Own Common Shares and/or Preferred Shares in
excess of the above limitations must notify the Trust in
writing at least 15 days prior to such proposed or attempted
Transfer. All capitalized terms in this legend have the
meanings defined in the Declaration of Trust of the Trust, a
copy of which, including the restrictions on transfer, will
be sent without charge to each shareholder who so requests.
If the restrictions on transfer are violated, the securities
represented hereby will be designated and treated as Excess
Shares which will be held in trust by the Trust.
Section 4.14. SEVERABILITY. If any provision of this Article IV
or any application of any such provision is determined to be void, invalid or
unenforceable by any court having jurisdiction over the issue, the validity
and enforceability 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.
Section 4.15. SPECIAL TRUST FOR EXCESS SHARES. Upon any purported
Transfer that results in Excess Shares pursuant to Section 4.3 of this
Article IV, such Excess Shares shall be deemed to have been transferred to
the Trust, as Trustee of a Special Trust for the benefit of such Beneficiary
or Beneficiaries to whom an interest in such Excess Shares may later be
transferred pursuant to Section 4.18 of this Article IV. Excess Shares so
held in the Special Trust shall be issued and outstanding shares of the
Trust. The Purported Record Transferee shall have no rights in such Excess
Shares except the right to designate a transferee of such Excess Shares upon
the terms specified in Section 4.18 of this Article IV. The Purported
Beneficial Transferee shall have no rights in such Excess Shares except as
provided in Section 4.18 of this Article IV.
Section 4.16. NO DIVIDENDS OR DISTRIBUTIONS FOR EXCESS SHARES.
Excess Shares shall not be entitled to any distributions or dividends. Any
dividend or distribution paid prior to the discovery by the Trust that the
Common Shares and/or Preferred Shares have been Transferred so as to be
deemed Excess Shares shall be repaid to the Trust upon demand.
Section 4.17. LIQUIDATION DISTRIBUTIONS FOR EXCESS SHARES.
Subject to the preferential rights of the Preferred Shares, if any, as may be
determined by the Board of Trustees of the Trust, in the event of any
voluntary or involuntary liquidation, dissolution or winding up of, or any
other distribution of all or substantially all of the assets of, the Trust,
each holder of Excess Shares shall be entitled to receive, in the case of
Excess Shares constituting Preferred Shares, ratably with each other holder
of Preferred Shares and Excess Shares constituting Preferred Shares and, in
the case of Excess Shares constituting
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Common Shares, ratably with each other holder of Common Shares and Excess
Shares constituting Common Shares, that portion of the assets of the Trust
available for distribution to its shareholders as the number of Excess Shares
held by such holder bears to the total number of shares of (i) Preferred
Shares and Excess Shares then outstanding in the case of Excess Shares
constituting Preferred Shares and (ii) Common Shares and Excess Shares then
outstanding in the case of Excess Shares constituting Common Shares. The
Trust, as holder of the Excess Shares in the Special Trust, or if the Trust
shall have been dissolved, any trustee appointed by the Trust prior to its
dissolution, shall distribute ratably to the Beneficiaries of the Special
Trust, when determined, any such assets received in respect of the Excess
Shares in any liquidation, dissolution or winding up of, or any distribution
of the assets of the Trust.
Section 4.18. VOTING RIGHTS FOR EXCESS SHARES. The holders of
Excess Shares shall not be entitled to vote on any matter.
Section 4.19. NON-TRANSFERABILITY OF EXCESS SHARES. Subject to
Section 4.22, Excess Shares shall not be transferable. The Purported Record
Transferee may freely designate a Beneficiary of an interest in the Special
Trust (representing the number of shares of Excess Shares held by the Special
Trust attributable to a purported Transfer that resulted in the Excess
Shares), if (i) the shares of Excess Shares held in the Special Trust would
not be Excess Shares in the hands of such Beneficiary and (ii) the Purported
Beneficial Transferee does not receive a price for designating such
Beneficiary that reflects a price per share for such Excess Shares that
exceeds (x) the price per share such Purported Beneficial Transferee paid for
the Common Shares and/or Preferred Shares, as the case may be, in the
purported Transfer that resulted in the Excess Shares, or (y) if the
Purported Beneficial Transferee did not give value for such Excess Shares
(through a gift, devise or other transaction), a price per share equal to the
Market Price for Excess Shares on the date of the purported Transfer that
resulted in the Excess Shares. Upon such transfer of an interest in the
Special Trust, the corresponding Excess Shares in the Special Trust shall be
automatically exchanged for an equal number of Common Shares and/or Preferred
Shares, as applicable, and such Common Shares and/or Preferred Shares, as
applicable, shall be transferred of record to the transferee of the interest
in the Special Trust if such Common Shares and/or Preferred Shares, as
applicable, would not be Excess Shares in the hands of such transferee.
Prior to any transfer of any interest in the Trust, the Purported Record
Transferee must give advance notice to the Special Trust of the intended
transfer and the Special Trust must have waived in writing its purchase
rights under Section 4.20 of this Article IV.
Notwithstanding the foregoing, if a Purported Beneficial
Transferee receives a price for designating a Beneficiary of an interest in
the Special Trust that exceeds the amounts allowable under this Section 4.19
of this Article IV, such Purported Beneficial Transferee shall pay, or cause
such Beneficiary to pay such excess to the Trust.
If any of the foregoing restrictions on transfer of Excess
Shares are determined to be void, invalid or unenforceable by any court of
competent jurisdiction, then the Purported Record Transferee may be deemed,
at the option of the Company, to have acted as an agent of the Company in
acquiring such Excess Shares and to hold such Excess Shares on behalf of the
Company.
Section 4.20. CALL BY TRUST ON EXCESS SHARES. Excess Shares shall
be deemed to have been offered for sale to the Trust, or its designee, at a
price per share equal to the lesser of (i) the price per share in the
transaction that created such Excess Shares, (or, in the case of a devise or
gift, the Market Price at the time of such devise or gift) and (ii) the
Market Price of the Common Shares or Preferred Shares to which such Excess
Shares relates on the date the Trust, or its designee, accepts such offer.
The Trust shall have the right to accept such offer for a period of ninety
days after the later of (i) the date of
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the Transfer which resulted in such Excess Shares and (ii) the date the Board
of Trustees determines in good faith that a Transfer resulting in Excess
Shares has occurred, if the Trust does not receive a notice of such Transfer
pursuant to Section 4.5 of this Article IV but in no event later than a
permitted Transfer pursuant to and in compliance with the terms of Section
4.19 of this Article IV.
Section 4.21. INVALIDITY. If any provision of this Article IV or
any application of such provision is determined to be invalid by any federal
or state court having jurisdiction over the issue, the validity of the
remaining provisions shall not be affected except only to the extent
necessary to comply with the determination of such court.
Section 4.22. SETTLEMENTS ON A NATIONAL SECURITIES EXCHANGE.
Nothing in Article IV shall preclude the settlement of any transaction
entered into through the facilities of the New York Stock Exchange or any
other national securities exchange or automated inter-dealer quotation
system. The immediately foregoing sentence shall not limit the authority of
the Board of Trustees to take any and all actions it deems necessary or
advisable to protect the Trust and the interests of the Shareholders in
preserving the Trust status as a REIT, so long as such actions do not
prohibit the settlement of any transactions entered into through the
facilities of the New York Stock Exchange or any other national securities
exchange or automated inter-dealer quotation system. The fact that the
settlement is so permitted shall not negate the effect of any other provision
of this Article IV, and any transferee in such a transaction and the Shares
so transferred shall be subject to all of the provisions and limitations set
forth in this Article IV.
ARTICLE V
AMENDMENTS
Section 5.1. POWER TO AMEND. The Trust reserves the right from
time to time to make any amendment to this Declaration of Trust, now or
hereafter authorized by law, including any amendment altering the terms or
contract rights, as expressly set forth in this Declaration of Trust, of any
shares of outstanding stock. All rights and powers conferred by this
Declaration of Trust on shareholders, Trustees and officers are granted
subject to this reservation.
Section 5.2. BY SHAREHOLDERS. Except as provided in Section 5.3
below, any amendment to this Declaration of Trust shall be valid only if such
amendment shall have been approved by the affirmative vote of two-thirds of
all the votes entitled to be cast on the matter except to the extent Maryland
law requires a higher vote.
Section 5.3. BY TRUSTEES. The Trustees, by a two-thirds vote,
may amend provisions of this Declaration of Trust from time to time to enable
the Trust to qualify as a real estate investment trust under the Code or
under Title 8.
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ARTICLE VI
LIMITATION OF LIABILITY
Section 6.1. LIMITATION OF SHAREHOLDER AND TRUSTEE LIABILITY. No
shareholder or Trustee shall be liable for any debt, claim, demand, judgment
or obligation of any kind of, against or with respect to the Trust by reason
of his being a shareholder or Trustee, nor shall any shareholder or Trustee
be subject to any personal liability whatsoever, in tort, contract or
otherwise, to any person in connection with the Trust Property or the affairs
of the Trust.
Section 6.2. LIMITATION OF TRUSTEE AND OFFICER LIABILITY. To the
maximum extent that Maryland law in effect from time to time permits
limitation of the liability of Trustees and officers of a real estate
investment trust, no Trustee or officer of the Trust shall be liable to the
Trust or to any shareholder for money damages. Neither the amendment nor
repeal of this Section, nor the adoption or amendment of any other provision
of this Declaration of Trust inconsistent with this Section, shall apply to
or affect in any respect the applicability of the preceding sentence with
respect to any act or failure to act which occurred prior to such amendment,
repeal or adoption. In the absence of any Maryland statute limiting the
liability of Trustees and officers of a Maryland real estate investment trust
for money damages in a suit by or on behalf of the Trust or by any
shareholder, no Trustee or officer of the Trust shall be liable to the Trust
or to any shareholder for money damages except to the extent that (a) the
Trustee or officer actually received an improper benefit or profit in money,
property or services, for the amount of the benefit or profit in money,
property or services actually received or (b) a judgment or other final
adjudication adverse to the Trustee or officer is entered in a proceeding
based on a finding in the proceeding that the Trustee's or officer'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.
Section 6.3. EXPRESS EXCULPATORY CLAUSES. Neither the
shareholders nor the Trustees, officers, employees or agents of the Trust
shall be liable under any written instrument creating an obligation of the
Trust, and all persons shall look solely to the property of the Trust for the
payment of any claim under or for the performance of that instrument. The
omission of the foregoing exculpatory language from any instrument shall not
affect the validity or enforceability of such instrument and shall not render
any shareholder, Trustee, officer, employee or agent liable thereunder to any
third party, nor shall the Trustees or any officer, employee or agent of the
Trust be liable to anyone for such omission.
ARTICLE VII
NOMINATION AND BUSINESS PROCEDURES
Section 7.1. GENERAL. At a meeting of the shareholders, no
business shall be conducted which has not been properly brought before the
meeting as set forth in this Article VII. To be property brought before a
meeting, business must be brought before the meeting by or at the direction
of the Board of Trustees or brought before the meeting by a shareholder. For
business to be properly brought before a meeting by a shareholder, the
Secretary of the Trust must have received written notice not less than sixty
(60) days nor more than ninety (90) days prior to the date fixed by the Board
of Trustees for such meeting; provided, however, that in the event that less
than seventy (70) days' notice or prior public disclosure is given or made to
shareholders of the date of such meeting, notice by a shareholder to be
timely made must be received no later than the close of business on the tenth
(10th) day following the day on which such notice of the date of the meeting
was mailed or the public disclosure was made.
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Section 7.2. BOARD OF TRUSTEE NOMINATIONS. In the case of
shareholder nominations for election to the Board of Trustees, the notice set
forth in Section 7.1 shall set forth (i) the name, age, business address and,
if known, residence address of each nominee proposed in such notice, (ii) the
principal occupations or employment of each such nominee for the past five
(5) years, (iii), the number of shares of the Trust which are beneficially
owned by each such nominee, (iv) other trusteeships held by each such
nominee, (v) the names of business entities of which each such nominee owns a
ten percent (10%) or more beneficial interest, and (vi) all other information
with respect to the nominees required by the Federal proxy rules in effect at
the time the notice is submitted. In addition, such notice shall be
accompanied by a statement, over the signature of each proposed nominee, that
he consents to being a nominee, if elected he intends to serve as a Trustee,
and confirming the information with respect to him set forth in the notice.
Section 7.3. SHAREHOLDER PROPOSALS. In the case of shareholder
proposals or business other than the election of Trustees, the notice set
forth in Section 7.1 shall set forth (i) a brief description of the proposal
or business to be brought before the meeting, (ii) the name, age, business
and residence address of the shareholder submitting the proposal or business,
(iii) the principal occupation or employment of that shareholder, (iv) the
number of shares of the Trust which are beneficially owned by that
shareholder, and (v) any material interest of that shareholder in the
proposal or business to be brought before the meeting.
Section 7.4. DETERMINATIONS BY CHAIRMAN. The Chairman of any
meeting in respect of which a shareholder nomination or proposal has been
submitted, may, if the facts as determined by the Chairman in his sole
discretion warrant, determine and declare to the meeting that the shareholder
nomination or proposal was not made in accordance with the procedures set
forth in this Article VII, in which event the defective nomination or
proposal shall not be considered at such meeting and shall be disregarded and
no votes cast either for or against such nomination or proposal shall be
counted or, in the event votes have previously been cast for or against such
nomination or proposal, the duly appointed inspectors for such meeting shall
disregard any such votes.
Section 7.5. EXCLUSIVITY. Notwithstanding anything in this
Declaration of Trust or the By-Laws of this Trust to the contrary, no
elections, proposals or other business shall be conducted at any meeting of
the shareholders except in accordance with the procedures set forth in this
Article VII.
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ARTICLE VIII
QUORUM
At an annual meeting of the shareholders called for the sole purpose of
electing Trustees and ratifying the selection of the Trust's independent
public accountants, the holders of one-third of the outstanding shares of the
Trust entitled to vote, present in person or represented by proxy, shall
constitute a quorum at such annual meeting of shareholders; provided, if less
than one-third of the outstanding shares entitled to vote are represented at
said meeting, a majority of the shares so represented may adjourn the meeting
at any time without further notice. At any other annual meeting or any
special meeting of shareholders, the holders of a majority of the outstanding
shares of the Trust entitled to vote, present in person or represented by
proxy, shall constitute a quorum at such meeting of shareholders; provided,
if less than a majority of the outstanding shares entitled to vote are
represented at said meeting, a majority of the shares so represented may
adjourn the meeting at any time without further notice. If a quorum is
present at any meeting of the shareholders, the affirmative vote of the
majority of the shares entitled to vote represented at the meeting and
entitled to vote on the matter shall be the act of the shareholders, unless a
greater vote is required by this Declaration of Trust or Title 8. At any
adjourned meeting at which a quorum shall be present, any business may be
transacted which might have been transacted at the original meeting.
Withdrawal of shareholders from any meeting shall not cause failure of a duly
constituted quorum at that meeting.
ARTICLE IX
MISCELLANEOUS
Section 9.1. CONSTRUCTION. This Declaration of Trust shall be
construed in such a manner as to give effect to the intent and purposes of
the Trust and this Declaration of Trust. If any provisions hereof appear to
be in conflict, more specific provisions shall control over general
provisions. This Declaration of Trust shall govern all of the relationships
among the Trustees and shareholders of the Trust; and each provision hereof
shall be effective for all purposes and to all persons dealing with the Trust
to the fullest extent possible under applicable law in each jurisdiction in
which the Trust shall engage in business. In defining or interpreting the
powers and duties of the Trust and the Trustees and officers, reference may
be made, to the extent appropriate and not inconsistent with the Code or
Title 8, to Titles 1 through 3 of the Corporations and Associations Article
of the Annotated Code of Maryland. In furtherance and not in limitation of
the foregoing, in accordance with the provisions of Title 3, Subtitles 6 and
7, of the Corporations and Associations Article of the Annotated Code of
Maryland, the Trust shall be included within the definition of "corporation"
for purposes of such provisions.
Section 9.2. HEADINGS FOR REFERENCE ONLY. Headings preceding the
text, articles and sections hereof have been inserted solely for convenience
and reference, and shall not be construed to affect the meaning, construction
or effect of this Declaration of Trust.
Section 9.3. FILING AND RECORDING. This Declaration of Trust and any
amendment hereto shall be filed for record with the State Department of
Assessments and Taxation of Maryland and may also be filed or recorded in
such other places as the Trustees deem appropriate, but failure to file for
record this Declaration of Trust or any amendment hereto in any office other
than in the State of Maryland shall not affect or impair the validity or
effectiveness of this Declaration of Trust or any amendment hereto. An
amended Declaration of Trust shall, upon filing, be conclusive evidence of all
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amendments contained therein and may thereafter be referred to in lieu of the
original Declaration of Trust and the various amendments thereto.
Section 9.4. APPLICABLE LAW. This Declaration of Trust has been
executed with reference to and its construction and interpretation shall be
governed by the laws of Maryland, and the rights of all parties and the
construction and effect of every provision hereof shall be subject to and
construed according to the laws of Maryland.
Section 9.5. CERTIFICATIONS. Any certificates signed by a person who,
according to the records of the State Department of Assessments and Taxation
of Maryland, appears to be a Trustee hereunder, shall be conclusive evidence
as to the matters so certified in favor of any person dealing with the Trust
or the Trustees or any one or more of them, and the successors or assigns of
such persons, which certificate may certify to any matter relating to the
affairs of the Trust, including but not limited to any of the following: a
vacancy among the Trustees; the number and identity of Trustees; this
Declaration of Trust and any amendments thereto, or any restated Declaration
of Trust and any amendments thereto, or that there are no amendments to the
Declaration of Trust or any restated Declaration of Trust; a copy of the
By-Laws of the Trust or any amendment thereto; the due authorization of the
execution of any instrument or writing; the vote at any meeting of Trustees
or a committee thereof or shareholders; the fact that the number of Trustees
present at any meeting or executing any written instrument satisfies the
requirements of the Declaration of Trust; a copy of any By-Law adopted by the
shareholders or the identity of any officer elected by the Trustees; or the
existence or nonexistence of any fact or facts which in any manner relate to
the affairs of the Trust. If the Declaration of Trust or any restated
Declaration of Trust is filed or recorded in any recording office other than
the State Department of Assessments and Taxation of Maryland, anyone dealing
with real estate so located that instruments affecting the same should be
filed or recorded in such recording office may rely conclusively upon any
certificate of the kind described above which is signed by a person who
according to the records of such recording office appears to be a Trustee
hereunder. In addition, the Secretary or any Assistant Secretary of the Trust
or any other officer of the Trust designated by the By-Laws or by action of
the Trustees may sign any certificate of the kind described in this Section
9.5, and such certificate shall be conclusive evidence as to the matters so
certified in favor of any person dealing with the Trust, and the successors
and assigns of such person.
Section 9.6. SEVERABILITY. If any provision of the Declaration of
Trust shall be invalid or unenforceable, such invalidity or unenforceability
shall attach only to such provision and shall not in any manner affect or
render invalid or unenforceable any other provision of the Declaration of
Trust, and the Declaration of Trust shall be carried out, if possible, as if
such invalid or unenforceable provision were not contained therein.
Section 9.7. ANNUAL MEETING OF SHAREHOLDERS. An annual meeting of the
shareholders shall be held each year for the purpose of electing Trustees and
for the transaction of such other business as may come before the meeting.
The date of the annual meeting shall be set by the Board of Trustees on a
date following the availability of the trust's audited financial statements
of the preceding year but in no event later than May 31, after delivery of
the Trust's annual report. The annual meeting of shareholders shall be held
at a convenient location and on proper notice as provided in the By-Laws of
the Trust.
Section 9.8. BY-LAWS. The By-Laws of the Trust may be altered,
amended or repealed, and new By-Laws may be adopted, at any meeting of the
Board of Trustees of the Trust by a majority vote of the Trustees, subject to
repeal or change of any such amendment by the affirmative vote of a majority
of the shareholders of the Trust entitled to vote thereon.
Section 9.9. COUNTERPARTS. This Declaration of Trust may be executed
in any number of counterparts, all of which taken together shall constitute
one Declaration of Trust.
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IN WITNESS WHEREOF, each of the undersigned has executed this
Declaration of Trust on this 12th day of August, 1997 and each of the
undersigned acknowledges the same to be his act.
/s/ Martin Barber
--------------------------------
Martin Barber, Trustee
/s/ John S. Gates, Jr.
--------------------------------
John S. Gates, Jr., Trustee
/s/ Robert L. Stovall
--------------------------------
Robert L. Stovall, Trustee
/s/ Nichlas C. Babson
--------------------------------
Nicholas C. Babson, Trustee
/s/ Alan D. Feld
--------------------------------
Alan D. Feld, Trustee
/s/ John J. Kinsella
--------------------------------
John J. Kinsella, Trustee
/s/ Thomas E. Robinson
--------------------------------
Thomas E. Robinson, Trustee
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BY-LAWS
OF
CENTERPOINT PROPERTIES TRUST
ARTICLE I
OFFICES
SECTION 1.1 MARYLAND REGISTERED OFFICE. The trust shall
continuously maintain in the State of Maryland a registered office and
registered agent whose office is identical with such registered office.
SECTION 1.2 OTHER OFFICES. The trust may have other offices
within any other state of the United States, including, without limitation,
the State of Illinois.
ARTICLE II
SHAREHOLDERS
SECTION 2.1 ANNUAL MEETING. An annual meeting of the
shareholders shall be held each year for the purpose of electing trustees and
for the transaction of such other business as may come before the meeting.
The date of the annual meeting shall be set by the board of trustees on a
date following the availability of the trust's audited financial statements
of the preceding year but in no event later than May 31.
SECTION 2.2 SPECIAL MEETINGS. Special meetings of the
shareholders may be called either by the President or the board of trustees.
Special meetings of shareholders shall also be called by the secretary upon
the written request of the holders of shares entitled to cast not less than
25% of all the votes entitled to be cast at such meeting. Such request shall
state the purpose of such meeting and the matters proposed to be acted on at
such meeting. The secretary shall inform such shareholders of the reasonably
estimated cost of preparing and mailing notice of the meeting and, upon
payment by such shareholders to the trust of such costs, the secretary shall
give notice to each shareholder entitled to notice of the meeting. Unless
requested by shareholders entitled to cast a majority of all the votes
entitled to be cast at such meeting, a special meeting need not be called to
consider any matter which is substantially the same as a matter voted on at
any meeting of the shareholders held during the preceding twelve months.
SECTION 2.3 PLACE OF MEETING. The board of trustees may
designate any place the place of meeting for any annual meeting or for any
special meeting called by the board of trustees. If no designation is made,
or if a special meeting be otherwise called, the place of meeting shall be at
the main offices of the trust in Chicago, Illinois.
SECTION 2.4 INFORMAL ACTION BY SHAREHOLDERS. Any action
required to be taken at a meeting of the shareholders, or any other action
which may be taken at a meeting of the shareholders, if a consent in writing,
setting forth such action, is signed by each shareholder entitled to vote on
the matter and any other shareholder entitled to notice of a meeting of the
shareholders (but not to vote thereat) has
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waived in writing any right to dissent from such action, and such consent and
waiver are filed with the minutes of proceedings of the shareholders.
SECTION 2.5 NOTICE OF MEETINGS. Written notice stating the
place, date and hour of the meeting, and in the case of a special meeting,
the purpose or purposes for which the meeting is called, shall be delivered
not less than ten nor more than ninety days before the date of the meeting,
or in the case of a merger, consolidation, share exchange, dissolution or
sale, lease or exchange of assets, not less than twenty nor more than sixty
days before the meeting, either personally or by mail, by or at the direction
of the president, or the board of trustees, to each shareholder of record
entitled to vote at such meeting. If mailed, such notice shall be deemed to
be delivered when deposited with the United States Postal Service, addressed
to the shareholder at his address as it appears on the records of the trust,
with postage thereon prepaid. When a meeting is adjourned to another time or
place, notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment is taken.
SECTION 2.6 FIXING OF RECORD DATE. For the purpose of
determining the shareholders entitled to notice of or to vote at any meeting
of shareholders or any adjournment thereof, or to receive payment of any
dividend, or any rights in respect of any change, conversion or exchange of
shares or for the purpose of any other lawful action, the board of trustees
of the trust may fix in advance a record date which shall not be more than
sixty days and, for a meeting of shareholders, not less than twenty days, or
in the case of a merger, consolidation, share exchange, dissolution or sale,
lease or exchange of assets, not less than twenty days, immediately preceding
the date of such meeting. If no record date is fixed, the record date for
the determination of shareholders entitled to notice of or to vote at a
meeting of shareholders shall be the date on which notice of the meeting is
mailed, and the record date for the determination of shareholders for any
other purpose shall be the date on which the board of trustees adopts the
resolution relating thereto. A determination of shareholders of record
entitled to notice of or to vote at a meeting of shareholders shall apply to
any adjournment of the meeting.
SECTION 2.7 SHAREHOLDERS' LIST. The officer or agent having
charge of the transfer books for shares of the trust shall make, within
twenty days after record date or twenty days before each meeting of
shareholders, whichever is earlier, a complete list of the shareholders
entitled to vote at such meeting, arranged in alphabetical order, showing the
address of and the number of shares registered in the name of the
shareholder, which list, for a period of twenty days prior to such meeting,
shall be kept on file at the registered office of the Trust and shall be open
to inspection by any shareholder for any purpose germane to the meeting, at
any time during usual business hours. Such list shall also be produced and
kept open at the time and place of the meeting and may be inspected by any
shareholder during the whole time of the meeting. The original share ledger
or transfer book, or a duplicate thereof kept in the State of Illinois, shall
be prima facie evidence as to who are the shareholders entitled to examine
such list or share ledger or transfer book or to vote at any meeting of
shareholders.
SECTION 2.8 VOTING OF SHARES. A plurality of all the votes
cast at a meeting of shareholders duly called and at which a quorum is
present shall be sufficient to elect a trustee. Each share may be voted for
as many individuals as there are trustees to be elected and for whose
election the share is entitled to vote. No shareholder shall have the right
to cumulate his votes in elections for trustees. A majority of the votes
cast at a meeting of shareholders duly called and at which a quorum is
present shall be sufficient to approve any other matter which may properly
come before the meeting, unless a greater vote is required by statute or by
the declaration of trust. Except as otherwise provided in the declaration of
trust or these by-laws, each outstanding share, regardless of class, shall be
entitled to one vote upon each matter submitted to vote at a meeting of
shareholders.
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SECTION 2.9 VOTING OF SHARES BY CERTAIN HOLDERS. Shares
standing in the name of another trust or corporation, domestic or foreign,
may be voted by such officer, agent, or proxy as the by-laws of such trust or
corporation may prescribe, or, in the absence of such provision, as the board
of trustees or directors of such trust may or corporation determine and under
the law of the state or organization of such trust or the state of
incorporation of such corporation.
(a) Shares standing in the name of a deceased person, a
minor ward or an incompetent person, may be voted by his administrator,
executor, court appointed guardian, or conservator, either in person or by
proxy without a transfer of such shares in the name of such administrator,
executor, court appointed guardian, or conservator. Shares standing in the
name of a trustee may be voted by him, either in person or by proxy.
(b) Shares standing in the name of a receiver may be voted
by such receiver, and shares held by or under the control of a receiver may
be voted by such receiver without the transfer thereof into his name if
authority so to do be contained in an appropriate order of the court by
which such receiver was appointed.
(c) A shareholder whose shares are pledged shall be
entitled to vote such shares until the shares have been transferred into
the name of the pledgee, and thereafter the pledgee shall be entitled to
vote the shares so transferred.
(d) Any number of shareholders may create a voting trust
for the purpose of conferring upon a trustee or trustees the right to vote
or otherwise represent their share, for a period not to exceed ten years,
by entering into a written voting trust agreement specifying the terms and
conditions of the voting trust, and by transferring their shares to such
trustee or trustees for the purpose of the agreement. Any such trust
agreement shall not become effective until a counterpart of the agreement
is deposited with the trust at its registered office. The counterpart of
the voting trust agreement so deposited with the trust shall be subject to
the same right of examination by a shareholder of the trust, in person or
by agent or attorney, as are the books and records of the trust, and shall
be subject to examination by any holder of a beneficial interest in the
voting trust, either in person or by agent or attorney, at any reasonable
time for any proper purpose.
(e) Shareholders may provide for the voting of their shares
by signing an agreement for that purpose. A voting agreement under this
subsection is not subject to the provisions of subsection (a) above.
(f) Shares of its own stock belonging to this trust shall
not be voted, directly or indirectly, at any meeting and shall not be
counted in determining the total number of outstanding shares at any given
time, but shares of its own stock held by it in a fiduciary capacity may be
voted and shall be counted in determining the total number of outstanding
shares at any given time.
SECTION 2.10 PROXIES. Each shareholder entitled to vote at a
meeting of shareholders or to express consent or dissent to corporate action
in writing without a meeting may authorize another person or persons to act
for him by proxy by signing an appointment form and delivering it to the
person so appointed, but no such proxy shall be valid after eleven months
from the date of its execution, unless otherwise provided in the proxy.
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SECTION 2.11 QUORUM. At an annual meeting of the shareholders
called for the sole purpose of electing trustees and ratifying the selection
of the trust's independent public accountants, the holders of one-third of
the outstanding shares of the trust entitled to vote, present in person or
represented by proxy, shall constitute a quorum at such annual meeting of
shareholders; provided that, if less than one-third of the outstanding shares
entitled to vote are represented at said meeting, a majority of the shares so
represented may adjourn the meeting at any time without further notice. At
any other annual meeting or any special meeting of shareholders, the holders
of a majority of the outstanding shares of the trust entitled to vote,
present in person or represented by proxy, shall constitute a quorum at such
meeting of shareholders; provided that, if less than a majority of the
outstanding shares entitled to vote are represented at said meeting, a
majority of the shares so represented may adjourn the meeting at any time
without further notice. If a quorum is present at any meeting of the
shareholders, the affirmative vote of the majority of the shares entitled to
vote represented at the meeting and entitled to vote on the matter shall be
the act of the shareholders, unless a greater vote is required under the
Declaration of Trust or Maryland law. At any adjourned meeting at which a
quorum shall be present, any business may be transacted which might have been
transacted at the original meeting. Withdrawal of shareholders from any
meeting shall not cause failure of a duly constituted quorum at that meeting.
SECTION 2.12 INSPECTORS. At any meeting of shareholders, the
chairman of the meeting may, or upon request of any shareholder shall,
appoint one or more persons as inspectors for such meeting.
(a) Such inspectors shall ascertain and report the number
of shares represented at the meeting, based upon their determination of the
validity and effect of proxies; count all votes and report the results; and
do such other acts as are proper to conduct the election and voting with
impartiality and fairness to all the shareholders.
(b) Each report of an inspector shall be in writing and
signed by him or by a majority of them if there be more than one inspector
acting at such meeting. If there is more than one inspector, the report of
a majority shall be the report of the inspectors. The report of the
inspector or inspectors on the number of shares represented at the meeting
and the results of the voting shall be prima facie evidence thereof.
SECTION 2.13 VOTING BY BALLOT. Voting on any question or in any
election may be by voice unless the presiding officer shall order or any
shareholder shall demand that voting be by ballot.
SECTION 2.14 REPORTS TO SHAREHOLDERS. Prior to the annual
meeting of shareholders each year, the trustees shall deliver or cause to be
delivered a report of the business and operations of the trust during such
fiscal year to the shareholders, containing a balance sheet and a statement
of income and surplus of the trust, accompanied by the certification of an
independent certified public accountant, and such further information as the
trustees may determine is required pursuant to any law or regulation to which
the trust is subject. A signed copy of the annual report and the
accountant's certificate shall be filed by the trustees with the State
Department of Assessments and Taxation of Maryland, and with such other
governmental agencies as may be required by law and as the trustees may deem
appropriate.
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ARTICLE III
TRUSTEES
SECTION 3.1 GENERAL POWERS. The business and affairs of the
trust shall be managed by, or under the direction of, its board of trustees.
SECTION 3.2 NUMBER, TENURE AND QUALIFICATIONS. The number of
trustees of the trust shall be not less than three (3) and not more than ten
(10), as determined from time to time by the then acting board of trustees.
Each trustee shall hold office until the next annual meeting of shareholders,
thereafter, until his successor shall have been elected. Trustees need not
be residents of Maryland or Illinois or shareholders of the trust. The
number of trustees may be increased or decreased from time to time as
provided by the declaration of trust by the amendment of this section; but no
decrease shall have the effect of shortening the term of any incumbent
trustee. A trustee may resign at any time by giving written notice to the
board of trustees, its chairman, or to the president or secretary of the
trust. A resignation is effective when the notice is given unless the notice
specifies a future date. The pending vacancy may be filled before the
effective date, but the successor shall not take office until the effective
date. A majority of the number of trustees of the Board of Trustees shall be
independent (non-management) trustees of the trust.
SECTION 3.3 QUORUM. A majority of the number of trustees fixed
by these by-laws shall constitute a quorum for transaction of business at any
meeting of the board of trustees, provided that if less than a majority of
such number of trustees are present at said meeting, a majority of the
trustees present may adjourn the meeting at any time without further notice.
SECTION 3.4 MANNER OF ACTING. The act of the majority of the
trustees present at a meeting at which a quorum is present shall be the act
of the board of trustees, unless the act of a greater number is required by
statute, these by-laws, or the declaration of trust.
SECTION 3.5 REGULAR MEETINGS. A regular meeting of the board
of trustees shall be held without other notice than this By-Law, immediately
after the annual meeting of shareholders. The board of trustees may provide,
by resolution, the time and place for holding of additional regular meetings
without other notice than such resolution.
SECTION 3.6 SPECIAL MEETINGS. Special meetings of the board of
trustees may be called by or at the request of the president or any one or
more trustees. The person or persons authorized to call special meetings of
the board of trustees may fix any place as the place for holding any special
meeting of the board of trustees called by them.
SECTION 3.7 NOTICE. Notice of any special meeting shall be
given at least ten days previous thereto by written notice to each trustee at
his business address. If mailed, such notice shall be deemed to be delivered
when deposited with the United States Postal Service so addressed, with
postage thereon prepaid. If notice be given by telegram, such notice shall
be deemed to be delivered when the telegram is delivered to the telegram
company. The attendance of a trustee at any meeting shall constitute a
waiver of notice of such meeting, except where a trustee attends a meeting
for the express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business
to be transacted at, nor the purpose of, any regular or special meeting of
the board of trustees need be specified in the notice or waiver of notice of
such meeting.
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SECTION 3.8 VACANCIES. If for any reason any or all of the
trustees cease to be trustees, such event shall not terminate the trust or
affect these by-laws or the powers of the trustees remaining hereunder (even
if fewer than three trustees remain). Any vacancy occurring in the board of
trustees and any trusteeship to be filled by reason of an increase in the
number of trustees, may be filled by (1) election at an annual meeting or at
a special meeting of shareholders or (2) by the board of trustees remaining.
A trustee elected by the shareholders to fill a vacancy shall hold office for
the balance of the term for which he or she was elected. A trustee appointed
to fill a vacancy shall serve until the next meeting of shareholders at which
trustees are to be elected.
SECTION 3.9 REMOVAL OF TRUSTEES. One or more of the trustees
may be removed, with or without cause, at a meeting of shareholders by the
affirmative vote of the holders of a majority of the outstanding shares then
entitled to vote at an election of trustees, except as follows:
(a) No trustee shall be removed at a meeting of
shareholders unless the notice of such meeting shall state that a purpose
of the meeting is to vote upon the removal of one or more trustees named in
the notice. Only the named trustee or trustees may be removed at such
meeting.
(b) If a trustee is elected by a class or series of shares,
he or she may be removed only by the shareholders of that class or series.
In addition, one or more of the trustees may be removed, with or without
cause, by the board of trustees upon the affirmative vote of a majority of
the then acting trustees.
SECTION 3.10 COMMITTEES OF TRUSTEES. The board of trustees may,
by resolution or resolutions adopted by a majority of the number of trustees
fixed by the by-laws or otherwise, designate one or more committees, each
committee to consist of one or more of the trustees of the trust. The board
may designate one or more trustees as alternate members of any committee, who
may replace any absent or disqualified member at any meeting of the
committee. Any such committee, to the extent provided in the resolution of
the board, shall have and may exercise all of the powers and authority of the
board of trustees in the management of the business and affairs of the trust,
and may authorize the seal of the trust to be affixed to all papers which may
require it; but no such committee shall have the power of authority in
reference to amending the declaration of trust; adopting an agreement of
merger or consolidation; recommending to the shareholders the sale, lease or
exchange of all or substantially all of the trust's property and assets;
recommending to the shareholders a dissolution of the trust or a revocation
of a dissolution; recommending to the shareholders any other action which
requires shareholder approval; amending the by-laws of the trust; declaring a
dividend or authorizing the issuance of distributions on stock; or issue
stock other than pursuant to a stock option or similar compensation plan.
Such committee or committees shall have such name or names as may be
determined by the board of trustees. The committees shall keep regular
minutes of their proceedings and report the same to the full board of
trustees when required.
SECTION 3.11 ACTION WITHOUT A MEETING. Unless specifically
prohibited by the declaration of trust or these by-laws, any action required
to be taken at a meeting of the board of trustees, or any other action which
may be taken at a meeting of the board of trustees, or of any committee
thereof may be taken without a meeting if a consent in writing, setting forth
the action so taken, shall be signed by all the trustees entitled to vote
with respect to the subject matter thereof, or by all the members of such
committee, as the case may be. Any such consent signed by all the trustees or
all the members of the committee shall have the same effect as a unanimous
vote.
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SECTION 3.12 COMPENSATION. The board of trustees, by the
affirmative vote of a majority of trustees then in office, and irrespective
of any personal interest of any of its members, shall have authority to
establish reasonable compensation of all trustees for services to the trust
as trustees, officers, or otherwise. By resolution of the board of trustees,
the trustees may be paid their expenses, if any, of attendance at each
meeting of the board. No such payment previously mentioned in this section
shall preclude any trustee from serving the trust in any other capacity and
receiving compensation therefor. Members of committees of the board may be
allowed like compensation for attending committee meetings.
SECTION 3.13 PRESUMPTION OF ASSENT. A trustee of the trust who
is present at a meeting of the board of trustees at which action on any
corporate matter is taken shall be conclusively presumed to have assented to
the action taken unless his dissent shall be entered in the minutes of the
meeting or unless he shall file his written dissent to such action with the
person acting as the secretary of the meeting before the adjournment thereof
or shall forward such dissent by registered mail to the secretary of the
trust immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a trustee who voted in favor of such action.
SECTION 3.14 LOSS OF DEPOSITS. No trustee shall be liable for
any loss which may occur by reason of the failure of the bank, trust company,
savings and loan association or other institution with whom money or shares
have been deposited.
SECTION 3.15 SURETY BONDS. Unless required by law, no trustee
shall be obligated to give any bond or surety or other security for the
performance of any of his duties.
SECTION 3.16 RELIANCE. Each trustee, officer, employee and
agent of the trust shall, in the performance of his duties with respect to
the trust, be fully justified and protected with regard to any act or failure
to act in reliance in good faith upon the books of account or other records
of the trust, upon an opinion of counsel or upon reports made to the trust by
any of its officers or employees or consultants or by the adviser,
accountants, appraisers or other experts or consultants selected by the
trustees or officers of the trust, regardless of whether such counsel or
expert may also be a trustee.
SECTION 3.17 CERTAIN RIGHTS OF TRUSTEES. The trustees shall
have no responsibility to devote their full time to the affairs of the trust
and may engage in business activities similar to or in addition to those of
or relating to the trust.
ARTICLE IV
OFFICERS
SECTION 4.1 NUMBER. The officers of the trust shall be a
chairman, a president, a secretary, a treasurer, and any number of vice
presidents (who may be designated as executive vice presidents, senior vice
presidents or non-executive vice presidents), treasurers, assistant
treasurers, assistant secretaries or other officers as may be elected by the
board of trustees or, in the case of non-executive vice presidents, appointed
by the president. Any two or more offices may be held by the same person
except that for the offices of president and vice president.
SECTION 4.2 APPOINTMENT OR ELECTION AND TERM OF OFFICE.
Non-executive vice-presidents, if any, shall be appointed by the president
and shall serve at the pleasure of the president.
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The other officers of the trust shall be elected or appointed annually by the
board of trustees at the first meeting of the board of trustees held after
each annual meeting of shareholders. If the election of officers shall not
be held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Vacancies may be filled or new offices created and
filled at any meeting of the board of trustees. Each officer elected or
appointed by the Board shall hold office until his successor shall have been
duly elected and shall have qualified or until his death or until he shall
resign or shall have been removed in the manner hereinafter provided.
Election or appointment of an officer shall not of itself create contract
rights.
SECTION 4.3 REMOVAL. Any officer elected or appointed by the
board of trustees may be removed by the board of trustees whenever in its
judgment the best interests of the trust would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the
person so removed.
SECTION 4.4 THE CHAIRMAN. The chairman shall be the chairman
of the board of trustees. He shall advise and counsel with the president and
shall assume such other duties as from time to time may be assigned by the
board of trustees. He shall preside at all meetings of the board of trustees
and, in the absence of the president or at the president's request, shall
preside at all meetings of the shareholders. He may execute for the trust
certificates for its shares, and any contracts, deeds, mortgages, bonds, or
other instruments which the board of trustees has authorized to be executed,
and he may accomplish such execution either under or without the seal of the
trust and either individually or with the secretary, any assistant secretary,
or any other officer thereunto authorized by the board of trustees, according
to the requirements of the form of the instrument.
SECTION 4.5 VICE CHAIRMAN. The vice chairman shall assist the
chairman in the discharge of his duties as the chairman may direct and shall
perform such other duties as from time to time may be assigned to him by the
chairman or by the board of trustees. In the absence of the chairman or in
the event of his inability or refusal to act, the vice chairman shall perform
the duties of the chairman, and when so acting, shall have all the powers of
and be subject to all the restrictions upon the chairman. Except in those
instances in which the authority to execute is expressly delegated to another
officer or agent of the trust or a different mode of execution is expressly
prescribed by the board of trustees or these by-laws, the vice chairman may
execute for the trust certificates for its shares and any contracts, deeds,
mortgages, bonds or other instruments which the board of trustees has
authorized to be executed, and he may accomplish such execution either under
or without the seal of the trust and either individually or with the
secretary, any assistant secretary, or any other officer thereunto authorized
by the board of trustees, according to the requirements of the form of the
instrument.
SECTION 4.6 THE PRESIDENT. The president shall be the chief
executive officer of the trust. Subject to the direction and control of the
board of trustees, he shall be in charge of the business of the trust; he
shall see that the resolutions and directions of the board of trustees are
carried into effect except in those instances in which that responsibility is
specifically assigned to some other person by the board of trustees; and, in
general, he shall discharge all duties incident to the office of president
and such other duties as may be prescribed by the board of trustees from time
to time. He shall preside at all meetings of the shareholders and, in the
absence of the chairman, shall preside at all meetings of the board of
trustees. Except in those instances in which the authority to execute is
expressly delegated to another officer or agent of the trust or a different
mode of execution is expressly prescribed by the board of trustees or these
by-laws, he may execute for the trust certificates for its shares, and any
contracts, deeds, mortgages, bonds, or other instruments which the board of
trustees has authorized to be executed, and he may accomplish such execution
either under or without the seal of the trust and either individually or
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with the secretary, any assistant secretary, or any other officer thereunto
authorized by the board of trustees, according to the requirements of the
form of the instrument. He may vote all securities which the trust is
entitled to vote except as and to the extent such authority shall be vested
in a different officer or agent of the trust by the board of trustees.
SECTION 4.7 EXECUTIVE VICE-PRESIDENTS AND SENIOR VICE
PRESIDENTS. The executive vice-presidents and senior vice presidents, if
any, shall assist the president in the discharge of his duties as the
president may direct and shall perform such other duties as from time to time
may be assigned to them by the president or by the board of trustees. In the
absence of the president or in the event of his inability or refusal to act,
the executive vice-presidents (or in the event there be more than one
executive vice president, the executive vice-presidents in the order
designated by the board of trustees, or by the president if the board of
trustees has not made such a designation, or in the absence of any
designation, then in the order of seniority of tenure as executive vice
president) shall perform the duties of the president. In the absence or
inability or refusal to act of the president and any executive vice
presidents, the senior vice presidents in the order designated by the board
of trustees, or by the president if the board of trustees has not made such a
designation, or in the absence of any designation, then in the order of
seniority of tenure as senior vice president) shall perform the duties of the
president. When so acting, the executive vice presidents or senior vice
presidents, as the case may be, shall have all the powers of and be subject
to all the restrictions upon the president. Except in those instances in
which the authority to execute is expressly delegated to another officer or
agent of the trust or a different mode of execution is expressly prescribed
by the board of trustees or these by-laws, the executive vice presidents and
senior vice presidents may execute for the trust certificates for its shares
and any contracts, deeds, mortgages, bonds or other instruments which the
board of trustees has authorized to be executed, and they may accomplish such
execution either under or without the seal of the trust and either
individually or with the secretary, any assistant secretary, or any other
officer thereunto authorized by the board of trustees, according to the
requirements of the form of the instrument.
SECTION 4.8 NON-EXECUTIVE VICE PRESIDENTS. Non-executive vice
presidents shall assist the president in the discharge of his duties as the
president may direct, but shall not, unless specifically authorized by the
board of trustees, have any authority to bind or commit the trust.
SECTION 4.9 THE TREASURER. The treasurer shall be the chief
operating officer and principal accounting and financial officer of the
trust. He shall:
(a) have charge of and be responsible for the maintenance
of adequate books of account for the trust;
(b) have charge and custody of all funds and securities of
the trust, and be responsible therefore and for the receipt and
disbursement thereof; and
(c) perform all the duties incident to the office of
treasurer and such other duties as from time to time may be assigned to him
by the president or by the board of trustees.
If required by the board of trustees, the treasurer shall give a
bond for the faithful discharge of his duties in such sum and with such
surety or sureties as the board of trustees may determine.
SECTION 4.10 THE SECRETARY. The secretary shall:
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(a) record the minutes of the shareholders' and of the board of
trustees' meetings in one or more books provided for that purpose;
(b) see that all notices are duly given in accordance with the
provisions of these by-laws or as required by law;
(c) be custodian of the corporate records and of the seal of the
trust;
(d) keep a register of the post office address of each shareholder
which shall be furnished to the secretary by such shareholder;
(e) sign with the chairman, vice chairman, president, or an
executive vice-president or a senior vice president, or any other officer
thereunto authorized by the board of trustees, certificates for shares of
the trust, the issue of which shall have been authorized by the board of
trustees, and any contracts, deeds, mortgages, bonds, or other instruments
which the board of trustees has authorized to be executed, according to the
requirements of the form of the instrument, except when a different mode of
execution is expressly prescribed by the board of trustees or these by-laws;
(f) otherwise certify that by-laws, resolutions of the shareholders
and board of trustees and committees thereof, and other documents of the
trust as true and correct copies thereof;
(g) have general charge of the share transfer books of the trust;
and
(h) perform all duties incident to the office of secretary and such
other duties as from time to time may be assigned to him or her by the
president or by the board of trustees.
SECTION 4.11 ASSISTANT TREASURERS AND ASSISTANT SECRETARIES.
The assistant treasurers and assistant secretaries shall perform such duties
as shall be assigned to them by the treasurer or the secretary, respectively,
or by the president or the board of trustees. The assistant secretaries may
sign with the chairman, vice chairman, president, or an executive
vice-president or senior vice president, or any other officer thereunto
authorized by the board of trustees, certificates for shares of the trust,
the issue of which shall have been authorized by the board of trustees, and
any contracts, deeds, mortgages, bonds, or other instruments which the board
of trustees has authorized to be executed, according to the requirements of
the form of the instrument, except when a different mode of execution is
expressly prescribed by the board of trustees or these by-laws. The
assistant treasurers shall respectively, if required by the board of
trustees, give bonds for the faithful discharge of their duties in such sums
and with such sureties as the board of trustees shall determine.
SECTION 4.12 SALARIES. The salaries of the officers shall be
fixed from time to time by the board of trustees, and no officer shall be
prevented from receiving such salary by reason of the fact that he is also a
trustee of the trust.
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ARTICLE V
CONTRACTS, LOANS, CHECKS AND DEPOSITS
SECTION 5.1 CONTRACTS. The board of trustees may authorize any
officer or officers, agent or agents, to enter into any contract or execute
and deliver any instrument in the name of and on behalf of the trust, and
such authority may be general or confined to specific instances.
SECTION 5.2 LOANS. No loans shall be contracted on behalf of
the trust and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the board of trustees. Such authority may be
general or confined to specific instances.
SECTION 5.3 CHECKS, DRAFTS, ETC. All checks, drafts or other
orders for the payment of money, notes or other evidences of indebtedness
issued in the name of the trust shall be signed by such officer or officers,
agent or agents of the trust and in such manner as shall from time to time be
determined by resolution of the board of trustees.
SECTION 5.4 DEPOSITS. All funds of the trust not otherwise
employed shall be deposited from time to time to the credit of the trust in
such banks, trust companies or other depositories as the board of trustees
may select.
ARTICLE VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 6.1 CERTIFICATES FOR SHARES. Certificates representing
shares of the trust shall be signed by the chairman, vice chairman, president
or an executive vice-president or a senior vice president or by such officer
as shall be designated by resolution of the board of trustees and by the
secretary or an assistant secretary, and shall be sealed with the seal or a
facsimile of the seal of the trust. If both of the signatures of the
officers be by facsimile, the certificate shall be countersigned by the
trust's duly authorized registrar and transfer agent. Each certificate
representing shares shall be consecutively numbered or otherwise identified,
and shall also state the name of the person to whom issued, the number and
class of shares (with designation of series, if any), the date of issue, that
the trust is organized under Maryland law, and the par value or a statement
that the shares are without par value. If the trust is authorized and does
issue shares of more than one class or of series within a class, the
certificate shall also contain such information or statement as may be
required by law. The name and address of each shareholder, the number and
class of shares held and the date on which the certificates for the shares
were issued shall be entered on the books of the trust. The person in whose
name shares stand on the books of the trust shall be deemed the owner thereof
for all purposes as regard the trust.
SECTION 6.2 LOST CERTIFICATES. If a certificate representing
shares has allegedly been lost or destroyed the board of trustees may in its
discretion, except as may be required by law, direct that a new certificate
be issued upon such indemnification and other reasonable requirements as it
may impose.
SECTION 6.3 TRANSFERS OF SHARES. Transfers of shares of the
trust shall be recorded on the books of the trust and, except in the case of
a lost or destroyed certificate, on surrender for cancellation of the
certificate for such shares. A certificate presented for transfer must be
duly endorsed and accompanied by proper guaranty of signature and other
appropriate assurances that the endorsement is effective.
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SECTION 6.4 RESTRICTION ON TRANSFER OF SECURITIES. A
restriction on the transfer or registration of transfer of securities of the
trust may be imposed either under the declaration of trust or by these
by-laws or by agreement among any number of security holders or among such
holders and the trust. No restriction so imposed shall be binding with
respect to securities issued prior to the adoption of the restriction unless
the holders of the securities are parties to an agreement or voted in favor
of the restriction.
A restriction on the transfer or registration of transfer of
securities of the trust is permitted if, without limitation, it:
(i) requires the trust or the holders of any class of securities of
the trust to consent to any proposed transfer of the restricted securities
or to approve the proposed transferee of the restricted securities; or
(ii) prohibits the transfer of the restricted securities to
designated persons or classes of persons with designation is not manifestly
unreasonable; or
(iii) restricts transfer or registration of transfer in any other
lawful manner.
Unless noted conspicuously on the security, a restriction, even
though permitted by this section, is ineffective except against a person with
actual knowledge of the restriction.
ARTICLE VII
FISCAL YEAR
SECTION 7.1 DESIGNATION OF FISCAL YEAR. The fiscal year of the
trust shall end on December 31 of each year.
ARTICLE VIII
DIVIDENDS
SECTION 8.1 DECLARED BY TRUSTEES. The board of trustees may
from time to time declare, and the trust may pay, dividends on its
outstanding shares in the manner and upon the terms and conditions provided
by law and its declaration of trust.
ARTICLE IX
SEAL
SECTION 9.1 SEAL. The trustees may authorize the adoption of a
seal by the trust. The seal shall have inscribed thereon the name of the
trust and the year of its organization. The seal may be used by causing it
or a facsimile thereof to be impressed or affixed or in any manner reproduced.
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ARTICLE X
WAIVER OF NOTICE
SECTION 10.1 WAIVER IN LIEU OF NOTICE. Whenever any notice is
required to be given under the provisions of these by-laws or under the
provisions of the declaration of trust or under the provisions of Maryland
law, a waiver thereof in writing, signed by the person or persons entitled to
such notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Attendance at any meeting shall
constitute waiver of notice thereof unless the person at the meeting objects
to the holding of the meeting because notice was not given.
ARTICLE XI
AMENDMENTS
SECTION 11.1 DETERMINED BY TRUSTEES. Unless reserved to the
shareholders by the declaration of trust or required by law, the by-laws of
the trust may be made, altered, amended or repealed solely by the board of
trustees. The by-laws may contain any provisions for the regulation and
management of the affairs of the trust not inconsistent with law or the
declaration of trust.
ARTICLE XII
INDEMNIFICATION OF OFFICERS,
TRUSTEES, EMPLOYEES AND AGENTS
SECTION 12.1 POWER TO HOLD HARMLESS. The trust shall have the
power to indemnify any person to the full extent permitted by Maryland law in
effect from time to time. Without limiting the generality of the foregoing,
the trust shall have the power, unless limited from time to time by Maryland
law, to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the trust) by reason of the fact that he
or she is or was a trustee, officer, employee or agent of the trust, or who
is or was serving at the request of the trust as a trustee, officer, employee
or agent of another trust, partnership, joint venture, corporation or other
enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if such person acted in good
faith and in a manner he or she reasonably believed to be in or not opposed
to the best interests of the trust, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his or her conduct was
unlawful. The termination of any action, suit or proceeding by judgment or
settlement, conviction or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in
good faith and in a manner which he or she reasonably believed to be in or
not opposed to the best interest of the trust, or with respect to any
criminal action or proceeding, that the person had reasonable cause to
believe that his or her conduct was unlawful.
SECTION 12.2 POWER TO INDEMNIFY LITIGANT. The trust shall have
power to indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action or suit by or in
the right of the trust to procure a judgment in its favor by reason of the
fact that such person is or was a trustee, officer, employee or agent of the
trust, or is or was serving at the request of the trust as a trustee,
officer, employee or agent of another trust, partnership, joint venture,
corporation or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by such
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person in connection with the defense or settlement of such action or suit if
such person acted in good faith and in a manner he or she reasonably believed
to be in, or not opposed to the best interests of the trust, provided that no
indemnification shall be made in respect of any claim, issue or matter as to
which such persons shall have been adjudged to be liable for negligence or
misconduct in the performance of his or her duty to the trust, unless, and
only to the extent that the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses as the court shall deem
proper.
SECTION 12.3 REIMBURSEMENT AUTHORIZED. To the extent that a
trustee, officer, employee, or agent of a trust has been successful, on the
merits or otherwise, in defense of any action, suit or proceeding referred to
Sections 12.1 and 12.2 above, or in defense of any claim, issue or matter
therein, such person shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him or her in connection
therewith to the extent not inconsistent with the Maryland General Trust Law.
SECTION 12.4 DETERMINATION IF REIMBURSEMENT IS PROPER. Any
indemnification under Sections 12.1 and 12.2 above (unless ordered by court)
shall be made by the trust only as authorized in the specific case, upon a
determination that indemnification of a trustee, officer, employee or agent
is proper in the circumstances because he or she has met the applicable
standard of conduct set forth in Section 12.1 or 12.2 above. Such
determination shall be made:
(a) by the board of trustees by a majority of a quorum
consisting of trustees who were not parties to such action, suit or
proceeding, or
(b) if such a quorum is not obtainable, or, even if
obtainable, a quorum of disinterested trustees so directs, by independent
legal counsel in a written opinion, or
(c) by the shareholders.
SECTION 12.5 ADVANCE OF EXPENSES. Expenses incurred in
defending a civil or criminal action, suit or proceeding may be paid by the
trust in advance of the final disposition of such action, suit or proceeding,
as authorized by the board of trustees in the specific case, upon receipt of
an undertaking by or on behalf of the trustee, officer, employee or agent to
repay such amount, unless it shall ultimately be determined that he or she is
entitled to be indemnified by the trust as authorized in this Article.
SECTION 12.6 NON-EXCLUSIVITY. The indemnification provided by
this article shall not be deemed exclusive of any other rights to which those
indemnified may be entitled under any contract, agreement, vote of
shareholders or disinterested trustees, or otherwise, both as to action in
his or her official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
trustee, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
SECTION 12.7 RIGHT TO ACQUIRE INSURANCE. The trust shall have
power to purchase and maintain insurance on behalf of any person who is or
was a trustee, officer, employee or agent of the trust, or is or was serving
at the request of the trust, as a trustee, officer, employee or agent of
another trust, partnership, joint venture, trust or other enterprise, against
any liability asserted against such person and incurred by such person in any
such capacity, or arising out of his status as such, whether or not the
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trust would have the power to indemnify him or her against such liability
under the provisions of this Article.
SECTION 12.8 NOTICE OF SHAREHOLDERS. If a trust has paid
indemnity or has advanced expenses to a trustee, officer, employee or agent,
the trust shall report the indemnification or advance in writing to the
shareholders with or before the notice of the next shareholders' meeting.
SECTION 12.9 "TRUST;" DEFINITION. For purposes of this Article,
references to "the Trust" shall include, in addition to the surviving
corporation or trust, any merging corporation or trust (including any
corporation or trust having merged with a merging corporation or trust)
absorbed in a merger which, if its separate existence had continued, would
have had the power and authority to indemnify its trustees, officers, and
employees or agents, so that any person who was a trustee, officer, employee
or agent of such merging corporation or trust, or was serving at the request
of such merging trust as a trustee, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall
stand in the same position under the provisions of this Article with respect
to the surviving corporation or trust as such person would have with respect
to such merging corporation or trust if its separate existence had continued.
SECTION 12.10 MISCELLANEOUS DEFINITIONS. For purposes of this
Article, references to "other enterprises" shall include employee benefit
plans; reference to "fines" shall include any excise taxes assessed on a
person with respect to an employee benefit plan; and references to "serving
at the request of the trust" shall include any services as a trustee,
officer, employee or agent of the trust which imposes duties on, or involves
services by such trustee, officer, employee, or agent with respect to an
employee benefit plan, its participants, or beneficiaries. A person who
acted in good faith and in a manner he or she reasonably believed to be in
the best interests of the participants and beneficiaries of an employee
benefit plan shall be deemed to have acted in a manner "not opposed to the
best interest of the trust" as referred to in this Article.
ARTICLE XIII
REPAYMENT OF DISALLOWED DEDUCTION
SECTION 13.1 FULL REIMBURSEMENT BY OFFICERS. Any payments made
to an officer of the trust such as salary, commission, bonus, interest, rent,
medical reimbursement or entertainment expense incurred by him which, for
Federal income tax purposes, shall be disallowed in whole or in part as a
deductible expense by the Internal Revenue Service, shall be reimbursed by
such officer to the trust to the full extent of such disallowance.
SECTION 13.2 SECURITY FOR REPAYMENT. It shall be the duty of
the trustees, as a board, to enforce payment of such amount disallowed. In
lieu of payment by the officer, subject to the determination of the trustees,
proportionate amounts may be withheld from his future compensation payments
until the amount owed to the trust has been recovered.
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CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in registration statement on
Form S-4 of our report dated February 13, 1997, except for Notes 17 and 18,
as to which the date is March 6, 1997 on our audits of the consolidated
financial statements and financial statement schedules of CenterPoint
Properties Corporation and Subsidiaries as of December 31, 1996 and 1995 and
for each of the three years in the period ended December 31, 1996, which
report is included in the Annual Report on Form 10-K.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
August 4, 1997
<PAGE>
CENTERPOINT PROPERTIES CORPORATION
401 N. Michigan Avenue PROXY
Chicago, Illinois 60611
- ------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
CENTERPOINT PROPERTIES CORPORATION FOR THE
SPECIAL MEETING OF STOCKHOLDERS ON OCTOBER 1, 1997.
The undersigned hereby appoints Martin Barber, John S. Gates, Jr.
and Paul S. Fisher, or any of them, jointly and severally, as Proxies each
with the power to appoint his substitute, and hereby authorizes them to
represent and to vote, as designated on the reverse side, all shares of the
Company's Common Stock held in the undersigned's name and shares held by the
agent in the Plan, hereafter described, subject to the voting direction of
the undersigned at the Special Meeting of Stockholders to be held at the
Lower Level Conference Center, 401 N. Michigan Avenue, Chicago, Illinois on
Wednesday, October 1, 1997, or any adjournment thereof and, in the Proxies'
discretion, to vote upon such other business as may properly come before the
meeting, all as more fully set forth in the Proxy Statement/Prospectus
related to such meeting, receipt of which is hereby acknowledged.
ALL SHARES OF COMMON STOCK TO BE VOTED HEREBY BY THE UNDERSIGNED
INCLUDE SHARES, IF ANY, HELD IN THE NAME OF THE AGENT, FOR THE BENEFIT OF THE
UNDERSIGNED, IN THE COMPANY'S DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN.
Comments/Change of Address:
____________________________________________________ PLEASE SEE
REVERSE SIDE
____________________________________________________
<PAGE>
/X/ PLEASE MARK YOUR
VOTES AS IN THIS
EXAMPLE
6231
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN. IF NO DIRECTION IS MADE, IT WILL BE VOTED FOR THE APPROVAL OF
THE PLAN OF REORGANIZATION.
Approval of FOR AGAINST ABSTAIN
Plan of Reorganization / / / / / /
The signer hereby revokes
SIGNATURE(S)___________________ DATE____________ all proxies heretofore
given by the signer to
vote at said meeting or
any adjournments thereof.
NOTE: Please sign exactly as name appears hereon.
Joint owners should each sign. When signing
as attorney, executor, administrator, trustee or
guardian, please give full title as such.
