SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES PURSUANT TO
SECTION 12(b) or (g) OF THE SECURITIES EXCHANGE ACT OF 1934
_______________________________
WALDEN RESIDENTIAL PROPERTIES, INC.
(Exact name of registrant as specified in its charter)
Maryland
(State of incorporation or
organization)
75-2506197
(I.R.S. Employer Identification No.)
One Lincoln Centre
5400 LBJ Freeway, Suite 400
Dallas, Texas 75240
(Address of principal executive offices) (Zip code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class to be so
registered
9.00% Redeemable Preferred
Stock, $0.01 par value
Name of each exchange on which
each class is to be registered
New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Item 1. Description of Registrant's Securities to be Registered.
Under its Articles of Incorporation (the "Articles"), Walden
Residential Properties, Inc., a Maryland corporation (the
"Company"), has authority to issue 10,000,000 shares of preferred
stock, par value $.01 per share. The Company has authorized the
issuance of 2,000,000 shares of preferred stock as the 9.00%
Redeemable Preferred Stock (the "Redeemable Preferred Stock"). The
Company has applied for listing of the Redeemable Preferred Stock
on the New York Stock Exchange. Set forth below are the terms of
the Redeemable Preferred Stock.
Dividends. Subject to the preferential rights of any other
series of stock ranking senior as to dividends to the Redeemable
Preferred Stock and to the provisions of the Articles relating to
rights of holders of shares of Excess Stock (as defined in the
Articles), the record holders of Redeemable Preferred Stock is
entitled to receive dividends, when and as declared by the Board of
Directors of the Corporation out of funds legally available for
payment of dividends. Such dividends are payable by the
Corporation in cash at the rate of $2.25 per annum per share.
Dividends on shares of Redeemable Preferred Stock accrue and
be cumulative from the date of issuance of the Redeemable Preferred
Stock. Dividends are payable quarterly in arrears when and as
declared by the Board of Directors of the Corporation in March,
June, September and December of each year (on the same dates as
dividends are paid on shares of the Corporation's common stock, par
value $.01 per share (the "Common Stock")) (each, a "Preferred
Dividend Payment Date"), commencing on the first Preferred Dividend
Payment Date following the date of issuance of the Redeemable
Preferred Stock. If any Preferred Dividend Payment Date occurs on
a day that is not a day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in
New York City are authorized or required by law, regulation or
executive order to close (a "Business Day"), any accrued dividends
otherwise payable on such Preferred Dividend Payment Date are paid
on the next succeeding Business Day. The amount of dividends
payable on the Redeemable Preferred Stock for each full quarterly
period from, and including, any Preferred Dividend Payment Date to,
but not including, the next Preferred Dividend Payment Date (the
"Dividend Period") are computed by dividing by four (4) the annual
dividend rate of $2.25. Dividends payable in respect of any
Dividend Period (other than the initial Dividend Period) which is
less than a full Dividend Period in length will be computed from
the immediately preceding Dividend Payment Date to, but not
including, the date on which dividends are paid on the basis of a
360-day year consisting of twelve 30-day months. Dividends are
paid to the holders of record of the Redeemable Preferred Stock as
their names appear on the stock transfer records of the Corporation
at the close of business on the date designated by the Board of
Directors of the Corporation at the time a dividend is declared as
the date for determining holders of record entitled to such
dividend (the "Record Date"). Dividends in respect of any past
Dividend Period that is in arrears may be declared and paid at any
time to holders of record on the Record Date for such payment. Any
dividend payment made on shares of Redeemable Preferred Stock are
first credited against the earliest accrued but unpaid dividend due
which remains payable. No interest, or sum of money in lieu of
interest, are payable in respect of any dividend payment or
payments on the Redeemable Preferred Stock which may be in arrears.
Notwithstanding anything contained herein to the contrary, no
dividends on shares of Redeemable Preferred Stock are declared by
the Board of Directors of the Corporation or paid or set apart for
payment by the Corporation at such time as, and to the extent that,
the terms and provisions of any agreement of the Corporation,
including any agreement relating to its indebtedness, or any
provisions of the Articles relating to any series of preferred
stock, par value $.01 per share, of the Corporation (the "Preferred
Stock") ranking senior to the Redeemable Preferred Stock, prohibits
such declaration, payment or setting apart for payment or provides
that such declaration, payment or setting apart for payment would
constitute a breach thereof or a default thereunder, or if such
declaration or payment are restricted or prohibited by law.
If any shares of Redeemable Preferred Stock are outstanding,
no full dividends are declared or paid or set apart for payment on
any series of capital stock of the Company ranking junior to or on
a parity with the Redeemable Preferred Stock as to dividends
(including the Corporation's 9.16% Series A Convertible Redeemable
Preferred Stock and the Corporation's Series B Convertible
Redeemable Preferred Stock (the "Series B Preferred Stock")) for
any period unless full cumulative dividends have been or
contemporaneously are declared and paid in cash or declared and a
sum in cash sufficient for the payment thereof set apart for such
payment on the Redeemable Preferred Stock for all past Dividend
Periods and the then current Dividend Period. When dividends are
not paid in full (or a sum in cash sufficient for such full payment
is not so set apart) upon the shares of Redeemable Preferred Stock
and the shares of any series of Preferred Stock ranking on a parity
as to dividends with the Redeemable Preferred Stock, all dividends
declared upon the shares of Redeemable Preferred Stock and any
other such series of Preferred Stock ranking on a parity as to
dividends with the Redeemable Preferred Stock are declared pro rata
so that the amount of dividends declared per share on the
Redeemable Preferred Stock and such other series of Preferred Stock
in all cases bear to each other the same ratio that accrued and
unpaid dividends per share on the shares of Redeemable Preferred
Stock and such other series of Preferred Stock bear to each other.
Except as provided in above, unless full cumulative dividends
on the Redeemable Preferred Stock have been or contemporaneously
are declared and paid in cash or declared and a sum in cash
sufficient for the payment thereof set apart for payment for all
past Dividend Periods and the then current Dividend Period, no
dividends (other than dividends payable in Common Stock or other
capital stock of the Corporation ranking junior to the Redeemable
Preferred Stock as to dividends and upon liquidation, dissolution
and winding up) will be declared or paid or set aside for payment
or other distribution are declared or made upon any series of
capital stock of the Corporation ranking junior to or on a parity
with the Redeemable Preferred Stock as to dividends nor, subject to
the Corporation's right to purchase Excess Stock as set forth in
the Articles, shall shares of any series of capital stock of the
Corporation ranking junior to or on a parity with the Redeemable
Preferred Stock upon liquidation, dissolution or winding up be
redeemed, purchased or otherwise acquired for any consideration (or
any moneys be paid to or made available for a sinking fund for the
redemption of any shares of any series of capital stock of the
Corporation ranking junior to or on a parity with the Redeemable
Preferred Stock) by the Corporation (except by conversion into or
exchange for other capital stock of the Corporation ranking junior
to the Redeemable Preferred Stock as to dividends and upon
liquidation, dissolution and winding up).
Notwithstanding anything contained herein to the contrary,
dividends on the Redeemable Preferred Stock, if not paid on a
Preferred Dividend Payment Date, will accrue whether or not
dividends are declared for such Preferred Dividend Payment Date,
whether or not the Corporation has earnings and whether or not
there are funds legally available for the payment of such
dividends. Any dividend payment made on shares of Redeemable
Preferred Stock shall first be credited against the earliest
accrued but unpaid dividend due with respect to shares of such
Redeemable Preferred Stock which remains payable.
Liquidation Rights. Upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the
Corporation, subject to the prior preferences and other rights of
any series of capital stock of the Corporation ranking senior to
the Redeemable Preferred Stock upon liquidation, dissolution or
winding up of the Corporation, but before any distribution or
payment are made to the holders of capital stock of the Corporation
ranking junior to the Redeemable Preferred Stock in the
distribution of assets upon liquidation, dissolution or winding up
of the Corporation, the holders of Redeemable Preferred Stock are
entitled to receive out of the assets of the Corporation legally
available for distribution to its stockholders liquidating
distributions in cash or property at its fair market value as
determined by the Board of Directors of the Corporation in the
amount of $25.00 per share, plus an amount in cash equal to any
accrued or unpaid dividends on any such share of Redeemable
Preferred Stock to the date of liquidation, dissolution or winding
up (including an amount equal to a prorated dividend for the period
extending from the last Preferred Dividend Payment Date to the date
of liquidation, dissolution or winding up) (the "Liquidation
Preference"). After payment of the full amount of the liquidating
distributions to which they are entitled, the holders of Redeemable
Preferred Stock have no right or claim to any of the remaining
assets of the Corporation and are not be entitled to any other
distribution in the event of liquidation, dissolution or winding up
of the affairs of the Corporation.
In the event that, upon any such voluntary or involuntary
liquidation, dissolution or other winding up, the legally available
assets of the Corporation are insufficient to pay the amount of the
Liquidation Preference per share and the corresponding amounts
payable on all shares of capital stock of the Corporation ranking
on a parity with the Redeemable Preferred Stock in the distribution
of assets upon liquidation, dissolution or winding up, then the
holders of the Redeemable Preferred Stock and all such other
capital stock shares ratably in any such distribution of assets in
proportion to the full liquidating distributions to which they
would otherwise be respectively entitled.
Neither the consolidation or merger of the Corporation into or
with another corporation or any other entity nor the sale, lease,
transfer or conveyance of all or substantially all of the assets of
the Corporation to another corporation or any other entity are
deemed to constitute a liquidation, dissolution or winding up of
the Corporation.
Redemption. The Redeemable Preferred Stock may be redeemed,
in whole or from time to time in part, at any time on and after
January 1, 2008 at the option of the Corporation at the price of
$25.00 per share (the "Preferred Redemption Price"), plus all
accrued and unpaid dividends thereon to the Preferred Redemption
Date (defined below), except as may be provided below, without
interest.
Each date fixed for redemption as set forth below is called a
"Preferred Redemption Date." If the Preferred Redemption Date is
after a Record Date and before the related Preferred Dividend
Payment Date, the dividend payable on such Preferred Dividend
Payment Date are paid to the holder in whose name the Redeemable
Preferred Stock to be redeemed is registered at the close of
business on such Record Date notwithstanding the redemption thereof
between such Record Date and the related Preferred Dividend Payment
Date or the Corporation's default in the payment of the dividend
due.
In case of redemption of less than all shares of Redeemable
Preferred Stock at the time outstanding, the shares to be redeemed
are selected pro rata from the holders of record of such shares in
proportion to the number of shares held by such holders (with
adjustments to avoid redemption of fractional shares) or by any
other equitable method determined by the Corporation, to the extent
practicable, that will not result in a violation of the Ownership
Limit (as defined in the Articles).
Notice of any redemption will be given by publication in a
newspaper of general circulation in the City of New York, such
publication to be made once a week for two successive weeks
commencing not less than 30 nor more than 60 days prior to the
Preferred Redemption Date. A similar notice will be mailed by the
Corporation, postage prepaid, not less than 30 nor more than 60
days prior to the Preferred Redemption Date, addressed to the
respective holders of record of the Redeemable Preferred Stock to
be redeemed at their respective addresses as they appear on the
stock transfer records of the Corporation. No failure to give such
notice or any defect therein or in the mailing thereof shall affect
the validity of the proceedings for the redemption of any shares of
Redeemable Preferred Stock except as to the holder to whom the
Corporation has failed to give notice or except as to the holder to
whom notice was defective. In addition to any information required
by law or by the applicable rules of any exchange upon which the
Redeemable Preferred Stock may be listed or admitted to trading,
such notice shall state: (i) the Preferred Redemption Date; (ii)
the Preferred Redemption Price; (iii) whether all or less than all
the outstanding shares of Redeemable Preferred Stock are to be
redeemed and the aggregate number of shares of Redeemable Preferred
Stock to be redeemed and, if less than all shares held by such
holder are to be redeemed, the number of such shares to be
redeemed; (iv) the place or places where certificates for such
shares are to be surrendered for payment of the Preferred
Redemption Price; and (v) that dividends on the shares to be
redeemed will cease to accrue on the Preferred Redemption Date.
If notice has been mailed as set forth above and provided that
on or before the Preferred Redemption Date specified in such notice
all funds necessary for such redemption shall have been set aside
by the Corporation, separate and apart from its other funds in
trust for the pro rata benefit of the holders of the shares so
called for redemption, so as to be and to continue to be available
therefor, then, from and after the Preferred Redemption Date,
dividends on the shares of the Redeemable Preferred Stock so called
for redemption cease to accrue, and such shares shall no longer be
deemed to be outstanding and shall not have the status of shares of
Redeemable Preferred Stock, and all rights of the holders thereof
as stockholders of the Corporation (except the right to receive
from the Corporation the Preferred Redemption Price) shall cease.
Notwithstanding the foregoing, upon the Corporation's default in
the payment of the dividend due, the holders of Redeemable
Preferred Stock at the close of business on any Record Date will be
entitled to receive the dividend payable with respect to such
Redeemable Preferred Stock on the corresponding Preferred Dividend
Payment Date, although such Redeemable Preferred Stock shall have
been redeemed between such Record Date and such corresponding
Preferred Dividend Payment Date. Upon surrender, in accordance
with the redemption notice, of the certificates for any shares of
Redeemable Preferred Stock so redeemed (properly endorsed or
assigned for transfer, if the Corporation shall so require and the
notice shall so state), such shares are redeemed by the Corporation
at the Preferred Redemption Price. In case fewer than all the
shares represented by any such certificate are redeemed, a new
certificate or certificates are issued representing the unredeemed
shares without cost to the holder thereof.
Any deposit of funds with a bank or trust company for the
purpose of redeeming Redeemable Preferred Stock are irrevocable
except that: the Corporation are entitled to receive from such bank
or trust company the interest or other earnings, if any, earned on
any money so deposited in trust, and the holders of any shares
redeemed have no claim to such interest or other earnings; and any
balance of monies so deposited by the Corporation and unclaimed by
the holders of the Redeemable Preferred Stock entitled thereto at
the expiration of two (2) years after the applicable Preferred
Redemption Date are repaid, together with any interest or other
earnings earned thereon, to the Corporation, and after such
repayment, the holders of the shares entitled to the funds so
repaid to the Corporation shall look only to the Corporation for
payment without interest or other earnings.
No Redeemable Preferred Stock may be redeemed except with
funds legally available for the payment of the Preferred Redemption
Price.
Unless full cumulative dividends on all shares of Redeemable
Preferred Stock have been or contemporaneously are declared and
paid in cash or declared and a sum in cash sufficient for the
payment thereof set apart for payment for all past Dividend Periods
and the then current Dividend Period, no shares of any Redeemable
Preferred Stock are redeemed unless all outstanding shares of
Redeemable Preferred Stock are simultaneously redeemed; provided,
however, that the foregoing shall not prevent the purchase or
acquisition of shares of Redeemable Preferred Stock pursuant to a
purchase or exchange offer made on the same terms to holders of all
outstanding shares of Redeemable Preferred Stock; and unless full
cumulative dividends on all outstanding shares of Redeemable
Preferred Stock have been or contemporaneously are declared and
paid in cash or declared and a sum in cash sufficient for the
payment thereof set apart for payment for all past Dividend Periods
and the then current Dividend Period, the Corporation shall not
purchase or otherwise acquire directly or indirectly, through a
subsidiary or otherwise, any shares of Redeemable Preferred Stock
(except by conversion into or exchange for capital stock of the
Corporation ranking junior to the Redeemable Preferred Stock as to
dividends and upon liquidation, dissolution and winding up of the
Corporation).
All shares of Redeemable Preferred Stock redeemed pursuant to
this section are retired and are restored to the status of
authorized and unissued shares of Preferred Stock, without
designation as to series, and subject to the applicable limitations
set forth herein may thereafter be reissued as shares of any series
of Preferred Stock.
Voting Rights. The holders of record of shares of Redeemable
Preferred Stock are not entitled to any voting rights except as
hereinafter provided herein or as otherwise provided by law. The
Corporation shall not (i) without the affirmative vote or consent
of the holders of at least a majority of the shares of the
Redeemable Preferred Stock outstanding at the time, given in person
or by proxy, either in writing or at a meeting (such Redeemable
Preferred Stock voting separately as a class), authorize, create or
issue, or increase the authorized or issued amount of, any class or
series of capital stock ranking senior to the Redeemable Preferred
Stock as to dividends or upon liquidation, dissolution or winding
up of the Corporation or reclassify any authorized capital stock of
the Corporation into any such senior stock, or create, authorize or
issue any obligation or security convertible into or evidencing the
right to purchase any such capital stock; or (ii) without the
affirmative vote or consent of at least two-thirds of the shares of
the Redeemable Preferred Stock outstanding at the time, given in
person or by proxy, either in writing or at a meeting (such
Redeemable Preferred Stock voting separately or as a class), amend,
alter or repeal the provisions of the Articles (including these
Articles Supplementary), whether by merger, consolidation or
otherwise, so as to materially and adversely affect any right,
preference, privilege or voting power of the Redeemable Preferred
Stock or the holders thereof; provided, however, that any increase
in the amount of the authorized Preferred Stock or the creation or
issuance of any other series of Preferred Stock, or any increase in
the amount of authorized shares of the Redeemable Preferred Stock
or any other series of Preferred Stock, in each case ranking on a
parity with or junior to the Redeemable Preferred Stock with
respect to payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up, shall not be deemed to
materially and adversely affect such rights, preferences,
privileges or voting powers.
If and whenever dividends payable on the Redeemable Preferred
Stock are or have been in arrears for six (6) or more quarterly
periods (regardless of whether such periods are consecutive), then
the holders of Redeemable Preferred Stock, voting separately as a
class, are entitled at the next annual meeting of the stockholders
or at any special meeting called as hereinafter provided to elect
two (2) additional directors. Upon election, such directors become
additional directors of the Corporation and the authorized number
of directors of the Corporation shall thereupon be automatically
increased by such number of directors.
Whenever the voting right described above become exercisable,
such right may be exercised initially either at a special meeting
of the holders of Redeemable Preferred Stock, called as hereinafter
provided, or at any annual meeting of stockholders held for the
purpose of electing directors, and thereafter at such annual
meetings or by the written consent of holders of Redeemable
Preferred Stock. Such right of the holders of Redeemable Preferred
Stock to elect directors may be exercised until all dividends to
which the holders of Redeemable Preferred Stock shall have been
entitled for all previous Dividend Periods and the current Dividend
Period shall have been paid in cash in full or declared and a sum
of money in cash sufficient for the payment thereof set aside for
payment, at which time the right of the holders of Redeemable
Preferred Stock to elect such number of directors shall cease, the
term of such directors previously elected shall thereupon
terminate, and the authorized number of directors of the
Corporation shall thereupon return to the number of authorized
directors otherwise in effect, but subject always to the same
provisions for the renewal and divestment of such special voting
rights in the case of any such future dividend default or defaults.
At any time when the voting right described above become
exercisable in the holders of Redeemable Preferred Stock and if
such right has not already been initially exercised, a proper
officer of the Corporation shall, upon the written request of
holders of record of at least ten percent (10%) of the shares of
Redeemable Preferred Stock then outstanding, addressed to the
Secretary of the Corporation, call a special meeting of holders of
Redeemable Preferred Stock. Such meeting are held at the earliest
practicable date upon the notice required for annual meetings of
stockholders at the place for holding annual meetings of
stockholders of the Corporation or, if none, at a place designated
by the Secretary of the Corporation. If such meeting has not be
called by the proper officers of the Corporation within thirty (30)
days after the personal service of such written request upon the
Secretary of the Corporation, or within thirty (30) days after
mailing the same within the United States, by registered mail,
addressed to the Secretary of the Corporation at its principal
office (such mailing to be evidenced by the registry receipt issued
by the postal authorities), then the holders of record of at least
ten percent (10%) of the shares of Redeemable Preferred Stock then
outstanding may designate in writing a holder of Redeemable
Preferred Stock or such other Preferred Stock to call such meeting
at the expense of the Corporation, and such meeting may be called
by such person so designated upon the notice required for annual
meetings of stockholders and are held at the place of holding
annual meetings of the Corporation or, if none, at a place
designated by such holder. Any holder of Redeemable Preferred
Stock that would be entitled to vote at such meeting shall have
access to the stock books of the Corporation for the purpose of
causing a meeting of stockholders to be called pursuant to the
provisions of this section. Notwithstanding the provisions of this
section, however, no such special meeting are called if any such
request is received less than 90 days before the date fixed for
the next ensuing annual or special meeting of stockholders.
If any director so elected by the holders of Redeemable
Preferred Stock shall cease to serve as a director before such
director's term shall expire, the holders of Redeemable Preferred
Stock then outstanding may, at a special meeting of the holders
called as provided above, elect a successor to hold office for the
unexpired term of the director whose place are vacant.
Subject to the provisions above and the provisions of the
Articles relating to the rights of holders of Excess Stock, in any
matter in which the Redeemable Preferred Stock may vote, including
any action by written consent, each share of Redeemable Preferred
Stock are entitled to one (1) vote (except as expressly provided
herein or as may be required by law).
Except as required by law, the foregoing voting provisions
shall not apply if, at or prior to the time when the act with
respect to which such vote would otherwise be required are
effected, all outstanding shares of the Redeemable Preferred Stock
shall have been redeemed or shall have been called for redemption
upon proper notice and sufficient funds shall have been deposited
in trust to effect such redemption.
Rank. The Redeemable Preferred Stock, with respect to
dividend rights and distributions upon liquidation, dissolution and
winding up of the Corporation, ranks (i) senior to the Common
Stock, any shares of Excess Stock (except as provided in the last
sentence of this section) and shares of all other series of capital
stock issued from time to time by the Corporation other than any
series of capital stock the terms of which specifically provide
that the capital stock of such series rank senior to or on parity
with the Redeemable Preferred Stock with respect to dividend rights
or distributions upon liquidation, dissolution or winding up of the
Corporation; (ii) on a parity with the Series B Preferred Stock and
all other shares of all other capital stock issued by the
Corporation the terms of which specifically provide that such
shares rank on a parity with the Redeemable Preferred Stock with
respect to dividends and distributions upon liquidation,
dissolution or winding up of the Corporation or make no specific
provisions as to their ranking; and (iii) junior to the
Corporation's 9.20% Senior Preferred Stock, and all other capital
stock issued by the Corporation the terms of which specifically
provide that the shares rank senior to the Redeemable Preferred
Stock with respect to dividends and distributions upon liquidation,
dissolution or winding up of the Corporation (the issuance of which
must have been approved by a vote of at least a majority of the
outstanding shares of Redeemable Preferred Stock). The Redeemable
Preferred Stock ranks on a parity with the shares of Redeemable
Preferred Stock that are Excess Stock with respect to distributions
upon liquidation, dissolution or winding up of the Corporation.
Restrictions on Transfer. The shares of Redeemable Preferred
Stock are generally transferable. The Articles, however, contain
certain restrictions on the number of shares of Stock, defined to
include all classes of capital stock that the Company shall have
authority to issue, including the Redeemable Preferred Stock, other
series of Preferred Stock and the Common Stock, that stockholders
may own. For the Company to qualify as a REIT under the Code,
shares of Stock must be beneficially owned by 100 or more persons
during at least 335 days of a taxable year of twelve months or
during a proportionate part of a shorter taxable year. Further,
not more than 50% of the value of the issued and outstanding shares
of Stock (including the Redeemable Preferred Stock) may be owned,
directly or indirectly, by five or fewer individuals (as defined in
the Internal Revenue Code of 1986, as amended (the "Code"), to
include, except in limited circumstances, certain entities such as
qualified private pension plans) during the last half of a taxable
year or during a proportionate part of a shorter taxable year.
Since the Board of Directors believes it is essential for the
Company to maintain its status as a REIT under the Code, the
Articles provide that no person, except Mr. Don R. Daseke, Chairman
of the Board of Directors and Chief Executive Officer of the
Company, may own or be deemed to own by virtue of the attribution
provisions of the Code, more than 9.0% (the "Ownership Limit") of
the aggregate value of all outstanding shares of Stock (including
the Redeemable Preferred Stock); provided, however, that Mr. Daseke
may not own, directly or indirectly, more than 13.0% of the
aggregate value of all outstanding shares of Stock (the "Existing
Holder Limit"). The Board of Directors, upon receipt of evidence
and assurances satisfactory to the Board of Directors, may also
exempt a proposed transferee from the Ownership Limit or Existing
Holder Limit. In connection therewith, the Board of Directors may
require opinions of counsel, affidavits, undertakings or agreements
as it may deem necessary or advisable in order to determine or
ensure the Company's status as a real estate investment trust (a
"REIT"). Any acquisition or transfer of shares of Stock that
would: (i) result in the shares of Stock being owned by fewer than
100 persons or (ii) result in the Company being "closely-held"
within the meaning of Section 856(h) of the Code, are null and
void, and the intended transferee will acquire no rights to the
shares of Stock (including the Redeemable Preferred Stock). The
foregoing restrictions on transferability and ownership will not
apply if the Board of Directors determines that it is no longer in
the best interests of the Company to attempt to qualify, or to
continue to qualify, as a REIT and the Articles are amended
accordingly.
Any purported transfer of shares of Stock (including the
Redeemable Preferred Stock) that would result in a person owning
shares of Stock in excess of the Ownership Limit or Existing Holder
Limit will result in the shares subject to such purported transfer
being automatically exchanged for an equal number of shares of
Excess Stock. Under the Articles, Excess Stock are deemed to have
been transferred to the Company, as trustee of a separate trust
(the "Trust"), for the exclusive benefit of the person or persons
to whom the interest in the Trust can ultimately be transferred.
Excess Stock is not transferable. The purported transferee of
any shares of Stock (including the Redeemable Preferred Stock) that
are exchanged for Excess Stock may designate a transferee of the
interest in the Trust if the Excess Stock held in the Trust and
represented by such Trust interest to be transferred would not be
Excess Stock in the hands of the designated transferee at a price
not to exceed the price paid by the purported transferee (or, if no
consideration was paid, the market price at the time of the
original attempted transfer) at which point such Excess Stock will
automatically be exchanged for the shares of Stock (including the
Redeemable Preferred Stock) to which the Excess Stock is
attributable. In addition, Excess Stock is subject to purchase by
the Company at a purchase price equal to the lesser of: (i) the
price paid for the shares of Stock (including the Redeemable
Preferred Stock) by the intended transferee (or, if no
consideration was paid, the market price of the shares of Stock
(including the Redeemable Preferred Stock) the attempted transfer
of which resulted in Excess Stock, measured on the date of the
transfer); or (ii) the market price of the shares of Stock
(including the Redeemable Preferred Stock) the attempted transfer
of which resulted in Excess Stock measured on the date on which the
Company elects to purchase the Excess Stock. "Market Price" means
the average daily per share closing sales price of a share of Stock
(including the Redeemable Preferred Stock) if shares of Stock
(including the Redeemable Preferred Stock) are listed on a national
securities exchange or quoted on Nasdaq National Market or if not
then traded on any exchange or quotation system, the mean between
the average per share closing bid prices and the average per share
closing bid prices and the average per share closing asked prices,
in each case, during the 30 calendar day period ending on the
business day prior to the redemption date, or if there have been no
sales on a national securities exchange or Nasdaq National Market
and no published bid and asked quotations with respect to shares of
such stock during such 30 calendar day period, then the market
price of the shares of Stock (including the Redeemable Preferred
Stock) on the relevant date are as determined in good faith by the
Board of Directors.
From and after the intended transfer to the purported
transferee of the Excess Stock, the purported transferee shall
cease to be entitled to distributions (except upon liquidation),
voting rights and other benefits with respect to the Excess Stock
except the right to payment of the purchase price for the shares of
Stock (including the Redeemable Preferred Stock). Any dividend or
distribution paid to a purported transferee on Excess Stock prior
to the discovery by the Company that the shares have been
transferred in violation of the Articles are repaid to the Company
upon demand. If the foregoing transfer restrictions are determined
to be void or invalid by virtue of any legal decision, statute,
rule or regulation, then the intended transferee of any Excess
Stock may be deemed, at the option of the Company, to have acted as
an agent on behalf of the Company in acquiring the Excess Stock and
to hold the Excess Stock on behalf of the Company. All
certificates representing shares of Stock (including the Redeemable
Preferred Stock) will bear a legend referring to the restrictions
described above.
In addition, each stockholder shall, upon demand, be required
to disclose to the Company in writing, all information regarding
the direct and indirect beneficial ownership of shares of Stock
(including the Redeemable Preferred Stock) as the Board of
Directors deems reasonably necessary to comply with the provisions
of the Code applicable to a REIT, to comply with the requirements
of any taxing authority or governmental agency or to determine any
such compliance.
These ownership limitations could have the effect of
discouraging a takeover or other transaction in which holders of
some, or a majority, of shares of Stock (including the Redeemable
Preferred Stock) might receive a premium for their shares over the
then-prevailing market price or which these holders might believe
to be otherwise in their best interest.
General. The transfer agent and registrar for the 9.00%
Redeemable Preferred Stock is The First National Bank of Boston.
The 9.00% Redeemable Preferred Stock will be, when issued,
duly authorized, fully paid and nonassessable and will have no
preemptive rights.
<PAGE>
Item 2. Exhibits.
2.1 Articles of Amendment and Restatement of the Company
(previously filed as Exhibit 3.1 to this Company's
Registration statement on Form S-11 (Registration No.
33-70132) and incorporated herein by reference).
2.2 Restated Bylaws of the Company (previously filed as
Exhibit 3.2 to the Company's Registration Statement on
Form S-11 (Registration No. 33-70132) and incorporated
herein by reference).
2.3 Form of Articles Supplementary designating the rights of
the holders of 9.00% Redeemable Preferred Stock.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Registrant has duly caused this
Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized.
WALDEN RESIDENTIAL PROPERTIES, INC.
Date: September 22, 1997
By: /s/ Mark S. Dillinger
Mark S. Dillinger
Executive Vice President and
Chief Financial Officer
DA972650155
092297 v3
258:14199-27
INDEX TO EXHIBITS
Sequentially
Exhibit Numbered
Number Exhibit Page
2.1 Articles of Amendment and Restatement of the Company
(previously filed as Exhibit 3.1 to this Company's
Registration statement on Form S-11 (Registration No.
33-70132) and incorporated herein by reference).
2.2 Restated Bylaws of the Company (previously filed as
Exhibit 3.2 to the Company's Registration Statement on
Form S-11 (Registration No. 33-70132) and incorporated
herein by reference).
2.3 Form of Articles Supplementary designating the rights of
the holders of 9.00% Redeemable Preferred Stock.
<PAGE>
9.00% Redeemable Preferred Stock
(Liquidation Preference $25.00 Per Share)
ARTICLES SUPPLEMENTARY
WALDEN RESIDENTIAL PROPERTIES, INC.
___________________________
Articles Supplementary Classifying and Designating a
Series of Preferred Stock as
9.00% Redeemable Preferred Stock
and Fixing Distribution and
Other Preferences and Rights of Such Series
___________________________
Dated as of ____________, 1997
WALDEN RESIDENTIAL PROPERTIES, INC.
___________
Articles Supplementary Classifying and Designating a
Series of Preferred Stock as
9.00% Redeemable Preferred Stock
and Fixing Distribution and
Other Preferences and Rights of Such Series
___________
Walden Residential Properties, Inc., a Maryland corporation,
having its principal office in the State of Maryland in the City of
Baltimore (the "Corporation"), hereby certifies to the State
Department of Assessments and Taxation of Maryland that:
Pursuant to authority conferred upon the Board of Directors by
the Articles of Incorporation, as amended (the "Articles"), and
Bylaws of the Corporation, the Board of Directors adopted
resolutions authorizing the creation and issuance of up to
2,000,000 shares, with a liquidation preference of $25.00 per
share, of Redeemable Preferred Stock and adopted resolutions
granting the Executive Committee of the Board of Directors with
full power and authority, subject to the foregoing resolution, to
determine the preferences and other rights, voting powers,
restrictions, limitations as to dividends, qualifications, and
terms and conditions of redemption of the shares of such series.
Such preferences and other rights, voting powers, restrictions,
limitations as to dividends, qualifications, and terms and
conditions of redemption, number of shares and dividend rate, as
determined by such duly authorized committee are as follows:
Section 1 Number of Shares and Designation. This series of
Preferred Stock shall be designated as 9.00% Redeemable Preferred
Stock (the "Redeemable Preferred Stock") and the number of shares
which shall constitute such series shall not be more than 2,000,000
shares, par value $.01 per share, which number may be decreased
(but not below the number thereof then outstanding) from time to
time by the Board of Directors.
Section 2 Dividend Rights.
(a) Subject to the preferential rights of any other
series of stock ranking senior as to dividends to the Redeemable
Preferred Stock and to the provisions of the Articles relating to
rights of holders of shares of Excess Stock (as defined in the
Articles), the record holders of Redeemable Preferred Stock shall
be entitled to receive dividends, when and as declared by the
Board of Directors of the Corporation out of funds legally
available for payment of dividends. Such dividends shall be
payable by the Corporation in cash at the rate of $2.25 per annum
per share.
(b) Dividends on shares of Redeemable Preferred Stock
shall accrue and be cumulative from the date of issuance of the
Redeemable Preferred Stock. Dividends shall be payable quarterly
in arrears when and as declared by the Board of Directors of the
Corporation in March, June, September and December of each year
(on the same dates as dividends are paid on shares of the
Corporation's common stock, par value $.01 per share (the "Common
Stock")) (each, a "Preferred Dividend Payment Date"), commencing
on the first Preferred Dividend Payment Date following the date
of issuance of the Redeemable Preferred Stock. If any Preferred
Dividend Payment Date occurs on a day that is not a day, other
than a Saturday or Sunday, that is neither a legal holiday nor a
day on which banking institutions in New York City are authorized
or required by law, regulation or executive order to close (a
"Business Day"), any accrued dividends otherwise payable on such
Preferred Dividend Payment Date shall be paid on the next
succeeding Business Day. The amount of dividends payable on the
Redeemable Preferred Stock for each full quarterly period from,
and including, any Preferred Dividend Payment Date to, but not
including, the next Preferred Dividend Payment Date (the
"Dividend Period") shall be computed by dividing by four (4) the
annual dividend rate set forth in Section 2(a). Dividends
payable in respect of any Dividend Period (other than the initial
Dividend Period) which is less than a full Dividend Period in
length will be computed from the immediately preceding Dividend
Payment Date to, but not including, the date on which dividends
are paid on the basis of a 360-day year consisting of twelve
30-day months. Dividends shall be paid to the holders of record
of the Redeemable Preferred Stock as their names shall appear on
the stock transfer records of the Corporation at the close of
business on the date designated by the Board of Directors of the
Corporation at the time a dividend is declared as the date for
determining holders of record entitled to such dividend (the
"Record Date"). Dividends in respect of any past Dividend Period
that is in arrears may be declared and paid at any time to
holders of record on the Record Date for such payment. Any
dividend payment made on shares of Redeemable Preferred Stock
shall be first credited against the earliest accrued but unpaid
dividend due which remains payable. No interest, or sum of money
in lieu of interest, shall be payable in respect of any dividend
payment or payments on the Redeemable Preferred Stock which may
be in arrears.
(c) Notwithstanding anything contained herein to the
contrary, no dividends on shares of Redeemable Preferred Stock
shall be declared by the Board of Directors of the Corporation or
paid or set apart for payment by the Corporation at such time as,
and to the extent that, the terms and provisions of any agreement
of the Corporation, including any agreement relating to its
indebtedness, or any provisions of the Articles relating to any
series of preferred stock, par value $.01 per share, of the
Corporation (the "Preferred Stock") ranking senior to the
Redeemable Preferred Stock, prohibits such declaration, payment
or setting apart for payment or provides that such declaration,
payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such declaration or
payment shall be restricted or prohibited by law.
(d) If any shares of Redeemable Preferred Stock are
outstanding, no full dividends shall be declared or paid or set
apart for payment on any series of capital stock of the Company
ranking junior to or on a parity with the Redeemable Preferred
Stock as to dividends (including the Corporation's 9.16% Series
A Convertible Redeemable Preferred Stock and the Corporation's
Series B Convertible Redeemable Preferred Stock (the "Series B
Preferred Stock")) for any period unless full cumulative
dividends have been or contemporaneously are declared and paid in
cash or declared and a sum in cash sufficient for the payment
thereof set apart for such payment on the Redeemable Preferred
Stock for all past Dividend Periods and the then current Dividend
Period. When dividends are not paid in full (or a sum in cash
sufficient for such full payment is not so set apart) upon the
shares of Redeemable Preferred Stock and the shares of any series
of Preferred Stock ranking on a parity as to dividends with the
Redeemable Preferred Stock, all dividends declared upon the
shares of Redeemable Preferred Stock and any other such series of
Preferred Stock ranking on a parity as to dividends with the
Redeemable Preferred Stock shall be declared pro rata so that the
amount of dividends declared per share on the Redeemable
Preferred Stock and such other series of Preferred Stock shall in
all cases bear to each other the same ratio that accrued and
unpaid dividends per share on the shares of Redeemable Preferred
Stock and such other series of Preferred Stock bear to each
other.
(e) Except as provided in Section 2(d), unless full
cumulative dividends on the Redeemable Preferred Stock have been
or contemporaneously are declared and paid in cash or declared
and a sum in cash sufficient for the payment thereof set apart
for payment for all past Dividend Periods and the then current
Dividend Period, no dividends (other than dividends payable in
Common Stock or other capital stock of the Corporation ranking
junior to the Redeemable Preferred Stock as to dividends and upon
liquidation, dissolution and winding up) shall be declared or
paid or set aside for payment or other distribution shall be
declared or made upon any series of capital stock of the
Corporation ranking junior to or on a parity with the Redeemable
Preferred Stock as to dividends nor, subject to the Corporation's
right to purchase Excess Stock as set forth in the Articles,
shall shares of any series of capital stock of the Corporation
ranking junior to or on a parity with the Redeemable Preferred
Stock upon liquidation, dissolution or winding up be redeemed,
purchased or otherwise acquired for any consideration (or any
moneys be paid to or made available for a sinking fund for the
redemption of any shares of any series of capital stock of the
Corporation ranking junior to or on a parity with the Redeemable
Preferred Stock) by the Corporation (except by conversion into or
exchange for other capital stock of the Corporation ranking
junior to the Redeemable Preferred Stock as to dividends and upon
liquidation, dissolution and winding up).
(f) Notwithstanding anything contained herein to the
contrary, dividends on the Redeemable Preferred Stock, if not
paid on a Preferred Dividend Payment Date, will accrue whether or
not dividends are declared for such Preferred Dividend Payment
Date, whether or not the Corporation has earnings and whether or
not there are funds legally available for the payment of such
dividends. Any dividend payment made on shares of Redeemable
Preferred Stock shall first be credited against the earliest
accrued but unpaid dividend due with respect to shares of such
Redeemable Preferred Stock which remains payable.
Section 3 Distribution Upon Liquidation, Dissolution or
Winding Up.
(a) Upon any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation,
subject to the prior preferences and other rights of any series
of capital stock of the Corporation ranking senior to the
Redeemable Preferred Stock upon liquidation, dissolution or
winding up of the Corporation, but before any distribution or
payment shall be made to the holders of capital stock of the
Corporation ranking junior to the Redeemable Preferred Stock in
the distribution of assets upon liquidation, dissolution or
winding up of the Corporation, the holders of Redeemable
Preferred Stock shall be entitled to receive out of the assets of
the Corporation legally available for distribution to its
stockholders liquidating distributions in cash or property at its
fair market value as determined by the Board of Directors of the
Corporation in the amount of $25.00 per share, plus an amount in
cash equal to any accrued or unpaid dividends on any such share
of Redeemable Preferred Stock to the date of liquidation,
dissolution or winding up (including an amount equal to a
prorated dividend for the period extending from the last
Preferred Dividend Payment Date to the date of liquidation,
dissolution or winding up) (the "Liquidation Preference"). After
payment of the full amount of the liquidating distributions to
which they are entitled, the holders of Redeemable Preferred
Stock will have no right or claim to any of the remaining assets
of the Corporation and shall not be entitled to any other
distribution in the event of liquidation, dissolution or winding
up of the affairs of the Corporation.
(b) In the event that, upon any such voluntary or
involuntary liquidation, dissolution or other winding up, the
legally available assets of the Corporation are insufficient to
pay the amount of the Liquidation Preference per share and the
corresponding amounts payable on all shares of capital stock of
the Corporation ranking on a parity with the Redeemable Preferred
Stock in the distribution of assets upon liquidation, dissolution
or winding up, then the holders of the Redeemable Preferred Stock
and all such other capital stock shall share ratably in any such
distribution of assets in proportion to the full liquidating
distributions to which they would otherwise be respectively
entitled.
(c) Neither the consolidation or merger of the
Corporation into or with another corporation or any other entity
nor the sale, lease, transfer or conveyance of all or
substantially all of the assets of the Corporation to another
corporation or any other entity shall be deemed to constitute a
liquidation, dissolution or winding up of the Corporation within
the meaning of this Section 3.
Section 4 Redemption by the Corporation.
(a) The Redeemable Preferred Stock may be redeemed, in
whole or from time to time in part, at any time on and after
January 1, 2008 at the option of the Corporation at the price of
$25.00 per share (the "Preferred Redemption Price"), plus all
accrued and unpaid dividends thereon to the Preferred Redemption
Date (defined below), except as may be provided below, without
interest.
(b) Each date fixed for redemption pursuant to
Section 4(d) below is called a "Preferred Redemption Date." If
the Preferred Redemption Date is after a Record Date and before
the related Preferred Dividend Payment Date, the dividend payable
on such Preferred Dividend Payment Date shall be paid to the
holder in whose name the Redeemable Preferred Stock to be
redeemed is registered at the close of business on such Record
Date notwithstanding the redemption thereof between such Record
Date and the related Preferred Dividend Payment Date or the
Corporation's default in the payment of the dividend due.
(c) In case of redemption of less than all shares of
Redeemable Preferred Stock at the time outstanding, the shares to
be redeemed shall be selected pro rata from the holders of record
of such shares in proportion to the number of shares held by such
holders (with adjustments to avoid redemption of fractional
shares) or by any other equitable method determined by the
Corporation, to the extent practicable, that will not result in
a violation of the Ownership Limit (as defined in the Articles).
(d) Notice of any redemption will be given by
publication in a newspaper of general circulation in the City of
New York, such publication to be made once a week for two
successive weeks commencing not less than 30 nor more than 60
days prior to the Preferred Redemption Date. A similar notice
will be mailed by the Corporation, postage prepaid, not less than
30 nor more than 60 days prior to the Preferred Redemption Date,
addressed to the respective holders of record of the Redeemable
Preferred Stock to be redeemed at their respective addresses as
they appear on the stock transfer records of the Corporation. No
failure to give such notice or any defect therein or in the
mailing thereof shall affect the validity of the proceedings for
the redemption of any shares of Redeemable Preferred Stock except
as to the holder to whom the Corporation has failed to give
notice or except as to the holder to whom notice was defective.
In addition to any information required by law or by the
applicable rules of any exchange upon which the Redeemable
Preferred Stock may be listed or admitted to trading, such notice
shall state: (i) the Preferred Redemption Date; (ii) the
Preferred Redemption Price; (iii) whether all or less than all
the outstanding shares of Redeemable Preferred Stock are to be
redeemed and the aggregate number of shares of Redeemable
Preferred Stock to be redeemed and, if less than all shares held
by such holder are to be redeemed, the number of such shares to
be redeemed; (iv) the place or places where certificates for such
shares are to be surrendered for payment of the Preferred
Redemption Price; and (v) that dividends on the shares to be
redeemed will cease to accrue on the Preferred Redemption Date.
(e) If notice has been mailed in accordance with
Section 4(d) above and provided that on or before the Preferred
Redemption Date specified in such notice all funds necessary for
such redemption shall have been set aside by the Corporation,
separate and apart from its other funds in trust for the pro rata
benefit of the holders of the shares so called for redemption, so
as to be and to continue to be available therefor, then, from and
after the Preferred Redemption Date, dividends on the shares of
the Redeemable Preferred Stock so called for redemption shall
cease to accrue, and such shares shall no longer be deemed to be
outstanding and shall not have the status of shares of Redeemable
Preferred Stock, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from
the Corporation the Preferred Redemption Price) shall cease.
Notwithstanding the foregoing, upon the Corporation's default in
the payment of the dividend due, the holders of Redeemable
Preferred Stock at the close of business on any Record Date will
be entitled to receive the dividend payable with respect to such
Redeemable Preferred Stock on the corresponding Preferred
Dividend Payment Date, although such Redeemable Preferred Stock
shall have been redeemed between such Record Date and such
corresponding Preferred Dividend Payment Date. Upon surrender,
in accordance with the redemption notice, of the certificates for
any shares of Redeemable Preferred Stock so redeemed (properly
endorsed or assigned for transfer, if the Corporation shall so
require and the notice shall so state), such shares shall be
redeemed by the Corporation at the Preferred Redemption Price.
In case fewer than all the shares represented by any such
certificate are redeemed, a new certificate or certificates shall
be issued representing the unredeemed shares without cost to the
holder thereof.
(f) Any deposit of funds with a bank or trust company
for the purpose of redeeming Redeemable Preferred Stock shall be
irrevocable except that:
(i) the Corporation shall be entitled to receive
from such bank or trust company the interest or other
earnings, if any, earned on any money so deposited in
trust, and the holders of any shares redeemed shall have
no claim to such interest or other earnings; and
(ii) any balance of monies so deposited by the
Corporation and unclaimed by the holders of the
Redeemable Preferred Stock entitled thereto at the
expiration of two (2) years after the applicable
Preferred Redemption Date shall be repaid, together with
any interest or other earnings earned thereon, to the
Corporation, and after such repayment, the holders of the
shares entitled to the funds so repaid to the Corporation
shall look only to the Corporation for payment without
interest or other earnings.
(g) No Redeemable Preferred Stock may be redeemed except
with funds legally available for the payment of the Preferred
Redemption Price.
(h) Unless full cumulative dividends on all shares of
Redeemable Preferred Stock shall have been or contemporaneously
are declared and paid in cash or declared and a sum in cash
sufficient for the payment thereof set apart for payment for all
past Dividend Periods and the then current Dividend Period, no
shares of any Redeemable Preferred Stock shall be redeemed unless
all outstanding shares of Redeemable Preferred Stock are
simultaneously redeemed; provided, however, that the foregoing
shall not prevent the purchase or acquisition of shares of
Redeemable Preferred Stock pursuant to a purchase or exchange
offer made on the same terms to holders of all outstanding shares
of Redeemable Preferred Stock; and unless full cumulative
dividends on all outstanding shares of Redeemable Preferred Stock
have been or contemporaneously are declared and paid in cash or
declared and a sum in cash sufficient for the payment thereof set
apart for payment for all past Dividend Periods and the then
current Dividend Period, the Corporation shall not purchase or
otherwise acquire directly or indirectly, through a subsidiary or
otherwise, any shares of Redeemable Preferred Stock (except by
conversion into or exchange for capital stock of the Corporation
ranking junior to the Redeemable Preferred Stock as to dividends
and upon liquidation, dissolution and winding up of the
Corporation).
(i) All shares of Redeemable Preferred Stock redeemed
pursuant to this Section 4 shall be retired and shall be restored
to the status of authorized and unissued shares of Preferred
Stock, without designation as to series, and subject to the
applicable limitations set forth herein may thereafter be
reissued as shares of any series of Preferred Stock.
Section 5 Voting Rights.
(a) The holders of record of shares of Redeemable
Preferred Stock shall not be entitled to any voting rights except
as hereinafter provided in this Section 5 or as otherwise
provided by law. The Corporation shall not (i) without the
affirmative vote or consent of the holders of at least a majority
of the shares of the Redeemable Preferred Stock outstanding at
the time, given in person or by proxy, either in writing or at a
meeting (such Redeemable Preferred Stock voting separately as a
class), authorize, create or issue, or increase the authorized or
issued amount of, any class or series of capital stock ranking
senior to the Redeemable Preferred Stock as to dividends or upon
liquidation, dissolution or winding up of the Corporation or
reclassify any authorized capital stock of the Corporation into
any such senior stock, or create, authorize or issue any
obligation or security convertible into or evidencing the right
to purchase any such capital stock; or (ii) without the
affirmative vote or consent of at least two-thirds of the shares
of the Redeemable Preferred Stock outstanding at the time, given
in person or by proxy, either in writing or at a meeting (such
Redeemable Preferred Stock voting separately or as a class),
amend, alter or repeal the provisions of the Articles (including
these Articles Supplementary), whether by merger, consolidation
or otherwise, so as to materially and adversely affect any right,
preference, privilege or voting power of the Redeemable Preferred
Stock or the holders thereof; provided, however, that any
increase in the amount of the authorized Preferred Stock or the
creation or issuance of any other series of Preferred Stock, or
any increase in the amount of authorized shares of the Redeemable
Preferred Stock or any other series of Preferred Stock, in each
case ranking on a parity with or junior to the Redeemable
Preferred Stock with respect to payment of dividends and the
distribution of assets upon liquidation, dissolution or winding
up, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers.
(b) If and whenever dividends payable on the Redeemable
Preferred Stock shall be or have been in arrears for six (6) or
more quarterly periods (regardless of whether such periods are
consecutive), then the holders of Redeemable Preferred Stock,
voting separately as a class, shall be entitled at the next
annual meeting of the stockholders or at any special meeting
called as hereinafter provided to elect two (2) additional
directors. Upon election, such directors shall become additional
directors of the Corporation and the authorized number of
directors of the Corporation shall thereupon be automatically
increased by such number of directors.
(c) Whenever the voting right described under
Section 5(b) above shall become exercisable, such right may be
exercised initially either at a special meeting of the holders of
Redeemable Preferred Stock, called as hereinafter provided, or at
any annual meeting of stockholders held for the purpose of
electing directors, and thereafter at such annual meetings or by
the written consent of holders of Redeemable Preferred Stock.
Such right of the holders of Redeemable Preferred Stock to elect
directors may be exercised until all dividends to which the
holders of Redeemable Preferred Stock shall have been entitled
for all previous Dividend Periods and the current Dividend Period
shall have been paid in cash in full or declared and a sum of
money in cash sufficient for the payment thereof set aside for
payment, at which time the right of the holders of Redeemable
Preferred Stock to elect such number of directors shall cease,
the term of such directors previously elected shall thereupon
terminate, and the authorized number of directors of the
Corporation shall thereupon return to the number of authorized
directors otherwise in effect, but subject always to the same
provisions for the renewal and divestment of such special voting
rights in the case of any such future dividend default or
defaults.
(d) At any time when the voting right described under
Section 5(b) shall become exercisable in the holders of
Redeemable Preferred Stock and if such right shall not already
have been initially exercised, a proper officer of the
Corporation shall, upon the written request of holders of record
of at least ten percent (10%) of the shares of Redeemable
Preferred Stock then outstanding, addressed to the Secretary of
the Corporation, call a special meeting of holders of Redeemable
Preferred Stock. Such meeting shall be held at the earliest
practicable date upon the notice required for annual meetings of
stockholders at the place for holding annual meetings of
stockholders of the Corporation or, if none, at a place
designated by the Secretary of the Corporation. If such meeting
shall not be called by the proper officers of the Corporation
within thirty (30) days after the personal service of such
written request upon the Secretary of the Corporation, or within
thirty (30) days after mailing the same within the United States,
by registered mail, addressed to the Secretary of the Corporation
at its principal office (such mailing to be evidenced by the
registry receipt issued by the postal authorities), then the
holders of record of at least ten percent (10%) of the shares of
Redeemable Preferred Stock then outstanding may designate in
writing a holder of Redeemable Preferred Stock or such other
Preferred Stock to call such meeting at the expense of the
Corporation, and such meeting may be called by such person so
designated upon the notice required for annual meetings of
stockholders and shall be held at the place of holding annual
meetings of the Corporation or, if none, at a place designated by
such holder. Any holder of Redeemable Preferred Stock that would
be entitled to vote at such meeting shall have access to the
stock books of the Corporation for the purpose of causing a
meeting of stockholders to be called pursuant to the provisions
of this Section 5(d). Notwithstanding the provisions of this
Section 5(d), however, no such special meeting shall be called if
any such request is received less than 90 days before the date
fixed for the next ensuing annual or special meeting of
stockholders.
(e) If any director so elected by the holders of
Redeemable Preferred Stock shall cease to serve as a director
before such director's term shall expire, the holders of
Redeemable Preferred Stock then outstanding may, at a special
meeting of the holders called as provided above, elect a
successor to hold office for the unexpired term of the director
whose place shall be vacant.
(f) Subject to Section 5(a) hereof and the provisions of
the Articles relating to the rights of holders of Excess Stock,
in any matter in which the Redeemable Preferred Stock may vote,
including any action by written consent, each share of Redeemable
Preferred Stock shall be entitled to one (1) vote (except as
expressly provided herein or as may be required by law).
(g) Except as required by law, the foregoing voting
provisions shall not apply if, at or prior to the time when the
act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of the Redeemable
Preferred Stock shall have been redeemed or shall have been
called for redemption upon proper notice and sufficient funds
shall have been deposited in trust to effect such redemption.
Section 6 Ranking. The Redeemable Preferred Stock shall, with
respect to dividend rights and distributions upon liquidation,
dissolution and winding up of the Corporation, rank (i) senior to
the Common Stock, any shares of Excess Stock (except as provided in
the last sentence of this Section 6) and shares of all other series
of capital stock issued from time to time by the Corporation other
than any series of capital stock the terms of which specifically
provide that the capital stock of such series rank senior to or on
parity with the Redeemable Preferred Stock with respect to dividend
rights or distributions upon liquidation, dissolution or winding up
of the Corporation; (ii) on a parity with the Series B Preferred
Stock and all other shares of all other capital stock issued by the
Corporation the terms of which specifically provide that such
shares rank on a parity with the Redeemable Preferred Stock with
respect to dividends and distributions upon liquidation,
dissolution or winding up of the Corporation or make no specific
provisions as to their ranking; and (iii) junior to the
Corporation's 9.20% Senior Preferred Stock, and all other capital
stock issued by the Corporation the terms of which specifically
provide that the shares rank senior to the Redeemable Preferred
Stock with respect to dividends and distributions upon liquidation,
dissolution or winding up of the Corporation (the issuance of which
must have been approved by a vote of at least a majority of the
outstanding shares of Redeemable Preferred Stock). The Redeemable
Preferred Stock ranks on a parity with the shares of Redeemable
Preferred Stock that are Excess Stock with respect to distributions
upon liquidation, dissolution or winding up of the Corporation.
Section 7 Reports. So long as any share of Redeemable
Preferred Stock is outstanding, the Corporation shall file with the
Securities and Exchange Commission (the "SEC") the annual reports,
quarterly reports and the information, documents and other reports
required to be filed by the Corporation with the SEC pursuant to
Sections 13 and 15 of the Exchange Act, whether or not the
Corporation has or is required to have a class of securities
registered under the Exchange Act, at the time it is or would be
required to file the same with the SEC and within 15 days after it
is or would be required to file such reports, information or
documents with the SEC shall mail such reports, information and
documents to the holders at their addresses set forth in the
register of Redeemable Preferred Stock maintained by the transfer
agent and registrar of the Redeemable Preferred Stock.
IN WITNESS WHEREOF, the Corporation has caused these Articles
Supplementary to be signed in its name and on its behalf by its
Executive Vice President and Chief Financial Officer and attested
to by its Secretary on this _____ day of __________, 1997 and said
Executive Vice President and Chief Financial Officer acknowledges
under the penalties of perjury that these Articles Supplementary
are the corporate act of said Corporation and that to the best of
his knowledge, information and belief, the matters and facts set
forth herein are true in all material respects.
WALDEN RESIDENTIAL PROPERTIES, INC.
By:
Name: Mark S. Dillinger
Title: Executive Vice President
and Chief Financial Officer
Attest:
Name: Edward H. Hatzenbuehler
Title: Secretary
