<PAGE> 1
FORM 8-A
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
JAMESON INNS, INC.
(Exact name of registrant as specified in its charter)
Georgia 58-2079583
(State of incorporation or organization) (I.R.S. Employer Identification No.)
8 Perimeter Center East - Suite 8050, Atlanta, Georgia 30346-1603
(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Name of each exchange on which
Title of each class to be so registered each class is to be registered
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None None
If this Form relates to the registration of a class of securities pursuant to
Section 12(b) of the Exchange Act and is effective pursuant to General
Instruction A.(c), check the following box. [ ]
-----------------------------------
If this Form relates to the registration of a class of securities pursuant to
Section 12(g) of the Exchange Act and is effective pursuant to General
Instruction A.(d), check the following box. [X]
-----------------------------------
Securities Act registration statement file number to which this form relates (if
applicable): 333-20143
Securities to be registered pursuant to Section 12(g) of the Act:
9.25% Series A Cumulative Preferred Stock, par value $1.00 per share
(Title of class)
<PAGE> 2
Item 1. Description of Registration's Securities to be Registered.
This registration statement relates to the registration with the Securities
and Exchange Commission (the "SEC") of shares of 9.25% Series A Cumulative
Preferred Stock, par value $1.00 per share (the "Series A Preferred Stock"), of
Jameson Inns, Inc., a Georgia corporation (the "Registrant"). The description of
the Series A Preferred Stock registered hereunder is set forth under the caption
"Description of Series A Preferred Stock," at page S-22 of the Registrant's
Prospectus Supplement dated March 13, 1998, and filed with the SEC on March 13,
1998, relating to the Registrant's Registration Statement on Form S-3 filed with
the SEC on January 22, 1997, and which description is incorporated herein by
this reference and qualified in its entirety by reference to the Registrant's
Articles of Amendment to its Amended and Restated Articles of Incorporation,
which sets forth in full the preferences, limitations and relative rights of the
Series A Preferred Stock.
Item 2. Exhibits
1. Specimen of Certificate representing Registrant's 9.25% Series A
Cumulative Preferred Stock, par value $1.00 per share.
2. Articles of Amendment designating the 9.25% Series A Cumulative
Preferred Stock.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities and Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
JAMESON INNS, INC.
(Registrant)
Date: March 13, 1998 By: /s/ Craig R. Kitchin
-----------------------------
Craig R. Kitchin
Vice-President-Finance,
Treasurer and
Chief Financial Officer
2
<PAGE> 1
9.25% SERIES A CUMULATIVE 9.25% SERIES A CUMULATIVE
PREFERRED STOCK PREFERRED STOCK
NUMBER SHARES
JAMSP
JAMESON INNS, INC.
INCORPORATED UNDER THE LAWS OF SEE REVERSE FOR
THE STATE OF GEORGIA CERTAIN DEFINITIONS
CUSIP 470457 20 1
THIS CERTIFIES THAT
IS THE OWNER OF
FULLY PAID AND NON-ASSESSABLE SHARES OF 9.25% SERIES A CUMULATIVE
PREFERRED STOCK OF THE PAR VALUE OF $1.00 PER SHARE OF
JAMESON INNS, INC.
transferable on the books of the Corporation in person or by attorney duly
authorized in writing upon surrender of this certificate properly endorsed.
This certificate and the shares represented hereby are issued and shall be held
subject to all the provisions of the Corporation's Articles of Incorporation
and any amendments thereof, copies of which are on file with the Transfer
Agent, to all the provisions of which the holder hereof by acceptance of this
certificate assents.
This certificate is not valid until countersigned by the
Transfer Agent and registered by the Registrar.
WITNESS the facsimile seal of the Corporation and the
facsimile signatures of its duly authorized officers.
Dated: By:
/S/ /S/
Secretary President
JAMESON INNS, INC.
CORPORATE
SEAL
GEORGIA
1993
COUNTERSIGNED AND REGISTERED:
FIRST UNION NATIONAL BANK
(CHARLOTTE, NORTH CAROLINA)
TRANSFER AGENT
BY AND REGISTRAR
AUTORIZED SIGNATURE
<PAGE> 2
JAMESON INNS, INC.
Jameson Inns, Inc. (the "Corporation") is authorized to issue two classes
of capital stock which are designated as Common Stock and Preferred Stock. The
Board of Directors is authorized, without action by the Corporation's
stockholders, to determine the preferences, limitations and relative rights of
the Preferred Stock before the issuance of any Preferred Stock. The
Corporation will furnish, without charge, to any stockholder making a written
request therefor, a copy of the Corporation's articles of incorporation and a
written statement of the designations, relative rights, preferences and
limitations applicable to each class of stock. Requests for such written
statement may be directed to Jameson Inns, Inc., 8 Perimeter Center East, Suite
8050, Atlanta, Georgia 30346-1603.
The shares of 9.25% Series A Cumulative Preferred Stock ("Series A
Preferred Stock") represented by this certificate are subject to restrictions on
ownership and transfer for the purpose of the Corporation's maintenance of its
status as a Real Estate Investment Trust under the Internal Revenue Code of
1986, as amended. No person (other than Thomas W. Kitchin, his heirs, legatees
and the personal representative of his estate, as such, and American Real Estate
Investment Company, Ltd.) may own, Beneficially Own or Constructively Own
Series A Preferred Stock in excess of 6.75% (in value or in number of shares,
whichever is more restrictive) of the outstanding Series A Preferred Stock
of the Corporation, with certain further restrictions and exceptions set forth
in the Corporation's articles of incorporation. Any Person who attempts to own,
Beneficially Own or Constructively Own Series A Preferred Stock in excess of the
above limitations must immediately notify the Corporation. All capitalized
terms in this legend have the meanings defined in the Corporation's articles of
incorporation. Transfers in violation of the restrictions described above may
be void ab initio.
-- ------
In addition, upon the occurrence of certain events, if the restrictions on
ownership are violated, the Series A Preferred Stock represented hereby may be
redeemed or held in trust by the Corporation. The Corporation has an option to
acquire Excess Stock under certain circumstances. The Corporation will furnish
to the holder hereof upon request and without charge a complete written
statement of the terms and conditions of the Excess Stock. Requests for such
statement may be directed to Jameson Inns, Inc., 8 Perimeter Center East, Suite
8050, Atlanta, Georgia 30346-1603.
Capitalized terms used herein shall, where the context permits, have the
same meaning assigned to such terms as are assigned in the Corporation's
articles of incorporation.
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The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations
TEN COM- as tenants in common UNIF GIFT MIN ACT.
TEN ENT- as tenants by the entireties ---------------
JT TEN- as joint tenants with (Cust)
right of survivorship and Custodian
not as tenants in common ---------------------
(Minor)
Under Uniform Gifts to Minors
Act
--------------------------
(State)
Additional abbreviations may also be used though not in the above list.
For Value received, ____________________________________ hereby sell,
assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE
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- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
Shares
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of the 9.25% Series A Cumulative Preferred Stock represented by the within
Certificate, and do hereby irrevocably constitute and appoint
- --------------------------------------------------------------------------------
Attorney, to transfer the said shares on the books of the within named savings
bank with full power of substitution.
Dated,
---------------------
X
------------------------------------------------
X
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NOTICE: THE SIGNATURE(S) TO THE ASSIGNMENT MUST
CORRESPOND WITH THE NAME(S) AS WRITTEN UPON
THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR
WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE
WHATSOEVER.
SIGNATURE(S) GUARANTEED:
--------------------------------------------------
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN
ELIGIBLE GUARANTOR INSTITUTION, (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND
CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM). PURSUANT
TO S.E.C. RULE 17AD-15.
<PAGE> 1
ARTICLES OF AMENDMENT
OF
JAMESON INNS, INC.
In accordance with Section 14-2-602 of the Georgia Business Corporation
Code (O.C.G.A. Section 14-2-602), Jameson Inns, Inc. (the "Corporation") hereby
delivers these Articles of Amendment to the Secretary of State for filing.
I.
The name of the Corporation is Jameson Inns, Inc.
II.
A. The Amended and Restated Articles of Incorporation of the Corporation
(the "Articles") shall be amended by adding the following:
DESIGNATION OF PREFERENCES, RIGHTS, PRIVILEGES
AND RESTRICTIONS OF PREFERRED STOCK
1. Designation and Initial Number. One million two hundred thousand
(1,200,000) shares of the preferred stock of Jameson Inns, Inc. (the
"Corporation"), par value $1.00 per share (the "Preferred Stock"), are hereby
classified into one series which shall be designated the 9.25% Series A
Cumulative Preferred Stock (the "Series A Preferred Stock"). In the event any
shares of Series A Preferred Stock have not been sold to third parties on or
before April 18, 1998, such shares shall automatically without further action by
the Board of Directors of the Corporation cease to be shares of Series A
Preferred Stock and shall revert to the status of authorized unclassified shares
of Preferred Stock.
2. Dividends. Holders of shares of the Series A Preferred Stock are
entitled to the payment of dividends only in accordance with the following:
(a) Holders of shares of the Series A Preferred Stock are entitled
to receive, when and as declared by the Board of Directors, out of funds legally
available for the payment of dividends, preferential cumulative cash dividends
at the rate of 9.25% per annum of the Liquidation Preference per share (as
defined below).
(b) Dividends on the Series A Preferred Stock shall be cumulative
from the date of
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original issue and shall be payable quarterly in arrears on or before the 20th
day of January, April, July and October of each year, or, if not a business day,
the next succeeding business day (each, a "Dividend Payment Date"). Dividends
payable on the Series A Preferred Stock for any partial dividend period shall be
computed on the basis of a 360-day year consisting of twelve 30-day months.
Dividends shall be payable to holders of record as they appear in the stock
records of the Corporation at the close of business on the applicable record
date, which shall be the last business day of December, March, June and
September, respectively, or on such other date designated by the Board of
Directors of the Corporation for the payment of dividends that is not more than
45 nor less than 20 days prior to the applicable Dividend Payment Date (each, a
"Dividend Record Date").
(c) No dividends on shares of Series A Preferred Stock shall be
declared by the Board of Directors or paid or set apart for payment by the
Corporation at such time as the terms and provisions of any agreement of the
Corporation, including any agreement relating to the Corporation's indebtedness,
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) Notwithstanding subparagraph (c) above, dividends on the
Series A Preferred Stock shall accrue whether or not the Corporation has
earnings, whether or not there are funds legally available for the payment of
such dividends and whether or not such dividends are declared. Accrued but
unpaid dividends on the Series A Preferred Stock will not bear interest and
holders of the Series A Preferred Stock will not be entitled to any
distributions in excess of full cumulative distributions described above.
(e) Except as set forth in the next sentence, no dividends will be
declared or paid or set apart for payment on any capital stock of the
Corporation or any other series of Preferred Stock ranking, as to dividends, on
a parity with or junior to the Series A Preferred Stock (other than a dividend
in shares of the Corporation's common stock, par value $.10 per share (the
"Common Stock") or in shares of any other class of stock ranking junior to the
Series A Preferred Stock as to dividends and upon liquidation) for any period
unless full cumulative dividends have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof is set apart for
such payment on the Series A Preferred Stock for all past dividend periods and
the then current dividend period. When dividends are not paid in full (or a sum
sufficient for such full payment is not so set apart) upon the Series A
Preferred Stock and the shares of any other series of Preferred Stock ranking on
a parity as to dividends with the Series A Preferred Stock, all dividends
declared upon the Series A Preferred Stock and any other series of Preferred
Stock ranking on a parity as to dividends with the Series A Preferred Stock
shall be declared pro rata so that the amount of dividends declared per share of
Series A Preferred Stock and such other series of Preferred Stock shall in all
cases bear to each other the same ratio that accrued dividends per share on the
Series A Preferred Stock and such other series of Preferred Stock (which shall
not include any accrual
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in respect of unpaid dividends for prior dividend periods if such Preferred
Stock does not have a cumulative dividend) bear to each other.
(f) Except as provided in subparagraph (e) above, unless full
cumulative dividends on the Series A Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof is set apart for payment for all past dividend periods and the
then current dividend period: (i) no dividends (other than in shares of Common
Stock or other shares of capital stock ranking junior to the Series A Preferred
Stock as to dividends and upon liquidation) shall be declared or paid or set
aside for payment, (ii) no other distribution shall be declared or made upon the
Common Stock or any other capital stock of the Corporation ranking junior to or
on a parity with the Series A Preferred Stock as to dividends or upon
liquidation, and (iii) no shares of Common Stock, or any other shares of capital
stock of the Corporation ranking junior to or on a parity with the Series A
Preferred Stock as to dividends or upon liquidation, shall be redeemed,
purchased or otherwise acquired for any consideration (or any moneys paid to or
made available for a sinking fund for the redemption of any such shares) by the
Corporation except by conversion into or exchange for other capital stock of the
Corporation ranking junior to the Series A Preferred Stock as to dividends and
upon liquidation or redemption for the purpose of preserving the Corporation's
qualification as a real estate investment trust under sections 856 through 860
of the Internal Revenue Code of 1986, as amended ("REIT"). Holders of shares of
the Series A Preferred Stock shall not be entitled to any dividend, whether
payable in cash, property or stock, in excess of full cumulative dividends on
the Series A Preferred Stock as provided above. Any dividend payment made on
shares of the Series A Preferred Stock shall first be credited against the
earliest accrued but unpaid dividend due with respect to such shares which
remains payable.
3. Liquidation Preference. In the event of the liquidation, dissolution
or winding up of the Corporation, whether voluntary or involuntary, the holders
of the Preferred Stock shall be entitled to be paid out of the assets of the
Corporation legally available for distribution to its shareholders a liquidation
preference of $25 per share (the "Liquidation Preference"), plus an amount equal
to any accrued and unpaid dividends to the date of payment, but without
interest, before any distribution of assets is made to holders of Common Stock
or any other class or series of capital stock of the Corporation that ranks
junior to the Series A Preferred Stock as to liquidation rights. Holders of
Series A Preferred Stock shall be entitled to written notice of any event
triggering the right to receive such Liquidation Preference. After payment of
the full amount of the Liquidation Preference, plus any accrued and unpaid
dividends to which they are entitled, the holders of Series A Preferred Stock
shall have no right or claim to any of the remaining assets of the Corporation.
The consolidation or merger of the Corporation with or into any other
corporation, trust or entity or of any other corporation with or into the
Corporation, or the sale, lease or conveyance of all or substantially all of the
property or business of the Corporation, shall not for purposes of this
provision be deemed to constitute a liquidation, dissolution or winding up of
the Corporation.
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4. Redemption. Shares of Series A Preferred Stock shall be redeemable
only in accordance with the following:
(a) At any time prior to March 18, 2003, the Corporation may, at
its option, upon the occurrence of a Change of Control Event (as defined below)
redeem all of the outstanding Series A Preferred Stock in accordance with the
following:
(i) The redemption price for shares of Series A Preferred Stock
purchased pursuant to this subparagraph (a) shall be the applicable
redemption price reflected below, plus accrued and unpaid dividends (if
any) to the date of repurchase. Such repurchase price (excluding
dividends) shall be as follows:
<TABLE>
<CAPTION>
Purchase
Notice of Redemption Notice of Redemption Given Price per
-------------------- -------------------------- ---------
Given From Through Share
---------- ------- -----
<S> <C> <C>
Closing of Initial Offering (as March 31, 1998............ $26.05
defined below)..................
April 1, 1998................... June 30, 1998............. 26.00
July 1, 1998.................... September 30, 1998........ 25.95
October 1, 1998................. December 31, 1998......... 25.90
January 1, 1999................. March 31, 1999............ 25.85
April 1, 1999................... June 30, 1999............. 25.80
July 1, 1999.................... September 30, 1999........ 25.75
October 1, 1999................. December 31, 1999......... 25.70
January 1, 2000................. March 31, 2000............ 25.65
April 1, 2000.................. June 30, 2000............. 25.60
July 1, 2000................... September 30, 2000........ 25.55
October 1, 2000................. December 31, 2000......... 25.50
January 1, 2001................. March 31, 2001............ 25.45
April 1, 2001................... June 30, 2001............. 25.40
July 1, 2001.................... September 30, 2001........ 25.35
October 1, 2001................. December 31, 2001......... 25.30
January 1, 2002................. March 30, 2002............ 25.25
</TABLE>
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<TABLE>
<S> <C> <C>
April 1, 2002................... June 30, 2002............. 25.20
July 1, 2002.................... September 30, 2002........ 25.15
October 1, 2002................. December 31, 2002......... 25.10
January 1, 2003................. March 17, 2003............ 25.05
</TABLE>
(ii) Any such redemption may be consummated at any time prior to,
contemporaneously with or after the Change of Control (as defined
below), provided that notice of any such redemption pursuant to this
subparagraph (a) is given no later than 90 days following the date upon
which the Change of Control Event occurred, the repurchase date must be
within 60 days of the date of such notice and a sum sufficient to
redeem the shares must be deposited in trust to effect the redemption.
(iii) As used herein, a "Change of Control Event" shall mean the
execution by the Corporation or any of its subsidiaries or affiliates
of any agreement with respect to any proposed transaction or event or
series of transactions or events which, individually or in the
aggregate, may reasonably be expected to result in a Change of Control.
(iv) A "Change of Control" shall be deemed to have occurred at such
time as (i) a "person" or "group" (within the meaning of Sections 13(d)
and 14(d) of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act")) becomes the ultimate "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or
group shall be deemed to have beneficial ownership of all shares of
Voting Stock (as defined below) that such person or group has the right
to acquire regardless of when such right is first exercisable),
directly or indirectly, of Voting Stock representing more than 35% of
the total voting power of the total Voting Stock of the Corporation on
a fully diluted basis; (ii) the date the Corporation sells, transfers
or otherwise disposes of all or substantially all of the assets of the
Corporation; or (iii) the date of the consummation of a merger or share
exchange of the Corporation with another corporation where the
shareholders of the Corporation immediately prior to the merger or
share exchange would not beneficially own immediately after the merger
or share exchange, shares entitling such shareholders to 50% or more of
all votes (without consideration of the rights of any class of stock to
elect directors by a separate group vote) to which all shareholders of
the corporation issuing cash or securities in the merger or share
exchange would be entitled in the election of directors, or where
members of the Board of Directors of the Corporation immediately prior
to the merger or share exchange would not immediately after the merger
or share exchange constitute a majority of the board of directors of
the corporation issuing cash or securities in the merger or share
exchange. "Voting Stock" shall mean capital stock of any class or kind
having the power to vote generally for the election of directors of the
Corporation.
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(b) Other than upon the occurrence of a Change of Control Event
(as defined in subparagraph (a) (iv) of this Paragraph 4 or in the event a
shareholder acquires shares in excess of the Ownership Limit as described in
Paragraphs 7and 8 below, shares of Series A Preferred Stock are not redeemable
by the Corporation prior to March 18, 2003. On and after March 18, 2003, the
Corporation, at its option upon not less than 30 nor more than 60 days' written
notice, may redeem shares of the Series A Preferred Stock, in whole or in part,
at any time or from time to time, for cash at a redemption price of $25 per
share, plus all accrued and unpaid dividends thereon to the date fixed for
redemption, without interest.
(c) If the Corporation elects to redeem any or all of the shares
of Series A Preferred Stock, then:
(i) Holders of Series A Preferred Stock to be redeemed shall
surrender such Series A Preferred Stock at the place designated in the
notice given by the Corporation in accordance with subparagraph (a) or
(b) above, as applicable, and shall be entitled to the redemption price
and any accrued and unpaid dividends payable upon such redemption
following such surrender. If notice of redemption of any shares of
Series A Preferred Stock has been given and if the funds necessary for
such redemption have been set aside by the Corporation in trust for the
benefit of the holders of any shares of Series A Preferred Stock so
called for redemption, then from and after the redemption date
dividends will cease to accrue on such shares of Series A Preferred
Stock, such shares of Series A Preferred Stock shall no longer be
deemed outstanding and all rights of the holders of such shares will
terminate, except the right to receive the redemption price. If less
than all of the outstanding Series A Preferred Stock is to be redeemed,
the Series A Preferred Stock to be redeemed shall be selected pro rata
(as nearly as may be practicable without creating fractional shares) or
by any other equitable method determined by the Corporation.
(ii) Unless full cumulative dividends on all shares of Series A
Preferred Stock shall have been or contemporaneously are declared and
paid or declared and a sum sufficient for the payment thereof set apart
for payment for all past dividend periods and the then current dividend
period, no shares of Series A Preferred Stock shall be redeemed unless
all outstanding shares of Series A Preferred Stock are simultaneously
redeemed and the Corporation shall not purchase or otherwise acquire
directly or indirectly any shares of Series A Preferred Stock (except
by exchange for capital stock of the Corporation ranking junior to the
Series A Preferred Stock as to dividends and upon liquidation);
provided, however, that the foregoing shall not prevent the redemption
by the Corporation of shares of stock in order to ensure that the
Corporation continues to meet the requirements for qualification as a
REIT, or the purchase or acquisition of shares of Series A Preferred
Stock pursuant to a purchase or exchange offer made on the same terms
to holders of all outstanding shares of Series A Preferred Stock. So
long as no dividends are in arrears, the Corporation shall be entitled
at any time and from time to time to repurchase shares of Series A
Preferred Stock in open-market transactions duly authorized by the
Board of
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Directors and effected in compliance with applicable laws.
(iii) Notice of any redemption under this Paragraph 4 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
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
redemption date, addressed to the respective holders of record of the
Series A 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 Series A Preferred Stock except as to the holder to
whom notice was defective or not given. Each notice shall state: (A)
the redemption date; (B) the redemption price; (C) the number of shares
of Series A Preferred Stock to be redeemed; (C) the place or places
where the Series A Preferred Stock is to be surrendered for payment of
the redemption price; and (E) that dividends on the shares to be
redeemed will cease to accrue on such redemption date. If less than all
of the Series A Preferred Stock held by any holder is to be redeemed,
the notice mailed to such holder shall also specify the number of
shares of Series A Preferred Stock held by such holder to be redeemed.
(iv) (e) Immediately prior to any redemption of shares of Series A
Preferred Stock under this Paragraph 4, the Corporation shall pay, in
cash, any accumulated and unpaid dividends through the redemption date,
unless a redemption date falls after a Dividend Record Date and prior
to the corresponding Dividend Payment Date, in which case each holder
of Series A Preferred Stock at the close of business on such Dividend
Record Date shall be entitled to the dividend payable on such shares on
the corresponding Dividend Payment Date notwithstanding the redemption
of such shares before such Dividend Payment Date.
5. Voting Rights. Holders of the Series A Preferred Stock will not have
any voting rights, except as set forth below or as otherwise from time to time
required by law.
(a) Whenever dividends on any shares of Series A Preferred Stock
shall be in arrears for six or more quarters (whether consecutive or not) (a
"Preferred Dividend Default"), the holders of such shares of Series A Preferred
Stock (voting separately as a voting group with all other series of Preferred
Stock ranking on a parity with the Series A Preferred Stock as to dividends or
upon liquidation ("Parity Preferred") upon which like voting rights have been
conferred and are exercisable) will be entitled to vote separately as a voting
group for the election of a total of two additional directors to serve on the
Board of Directors of the Corporation (the "Preferred Stock Directors") at a
special meeting called by the holders of record of at least 20% of the Series A
Preferred Stock and the holders of record of at least 20% of any series of
Parity Preferred so in arrears (unless such request is received less than 90
days before the date fixed for the next annual or special meeting of
shareholders) or at the next
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annual meeting of shareholders, and at each subsequent annual meeting until all
dividends accumulated on such shares of Series A Preferred Stock for the past
dividend periods and the dividend for the then current dividend period shall
have been fully paid or declared and a sum sufficient for the payment thereof
set aside for payment. A quorum for any such meeting shall exist if at least a
majority of the outstanding shares of Series A Preferred Stock and shares of
Parity Preferred upon which like voting rights have been conferred and are
exercisable are represented in person or by proxy at such meeting. Such
Preferred Stock Directors shall be elected upon the affirmative vote of a
plurality of the shares of Series A Preferred Stock and such Parity Preferred
present and voting in person or by proxy at a duly called and held meeting at
which a quorum is present. If and when all accumulated dividends and the
dividend for the then current dividend period on the Series A Preferred Stock
shall have been paid in full or set aside for payment in full, the holders
thereof shall be divested of the foregoing voting rights (subject to revesting
in the event of each and every Preferred Dividend Default) and, if all
accumulated dividends and the dividend for the then current dividend period have
been paid in full or declared and set aside for payment in full on all series of
Parity Preferred upon which like voting rights have been conferred and are
exercisable, the term of office of each Preferred Stock Director so elected
shall terminate. Any Preferred Stock Director may be removed at any time with or
without cause by, and shall not be removed otherwise than by the vote of, the
holders of record of a majority of the outstanding shares of the Series A
Preferred Stock and such Parity Preferred when they have the voting rights
described above (voting separately as a voting group with all series of Parity
Preferred upon which like voting rights have been conferred and are
exercisable). So long as a Preferred Dividend Default shall continue, any
vacancy in the office of a Preferred Stock Director may be filled by written
consent of the Preferred Stock Director remaining in office, or if none remains
in office, by a vote of the holders of record of a majority of the outstanding
shares of Series A Preferred Stock and such Parity Preferred when they have the
voting rights described above (voting separately as a voting group with all
series of Parity Preferred upon which like voting rights have been conferred and
are exercisable). The Preferred Stock Directors shall each be entitled to one
vote per director on any matter.
(b) 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 Series A Preferred
Stock shall have been redeemed or called for redemption upon proper notice and
sufficient funds shall have been deposited in trust to effect such redemption.
6. Conversion Right. The Series A Preferred Stock is not convertible
into or exchangeable for any other property or securities of the Corporation.
7. Restrictions on Ownership and Transfer.
(a) Definitions. For the purposes of Paragraphs 7 and 8 of this
Designation of Preferences, Rights, Privileges and Restrictions of Preferred
Stock ("Designation"), the
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following terms shall have the following meanings:
(i) "Beneficial Ownership" shall mean ownership of Series A
Preferred Stock by a Person who is or would be treated as an owner of
such Series A Preferred Stock either directly or constructively through
the application of Section 544 of the Code, as modified by Section
856(h)(1)(B) of the Code. The terms "Beneficial Owner," "Beneficially
Owns" and "Beneficially Owned" shall have the correlative meanings.
(ii) "Beneficiary" shall mean the beneficiary of the Trust as
determined pursuant to Paragraph 8 of this Designation.
(iii) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(iv) "Constructive Ownership" shall mean ownership of Series A
Preferred Stock by a Person who is or would be treated as an owner of
such Series A Preferred Stock either directly or constructively through
the application of Section 318 of the Code, as modified by Section
856(d)(5) of the Code. The terms "Constructive Owner," "Constructively
Owns" and "Constructively Owned" shall have the correlative meanings.
(v) "Excess Stock" shall mean those shares of Series A Preferred
Stock Constructively Owned by a Person in excess of the Ownership
Limit.
(vi) "Initial Offering" shall mean the first sale of Series A
Preferred Stock pursuant to the Corporation's first effective
registration statement for such Series A Preferred Stock filed under
the Securities Act of 1933, as amended.
(vii) "Market Price" shall mean the value per share equal to the
average of the closing price of a share of Series A Preferred Stock as
reported by Nasdaq (or, if the Series A Preferred Stock is then
reported on a stock exchange, the closing price as reported on such
exchange) for the 10 calendar days preceding the relevant date, or if
the Series A Preferred Stock is not then traded over any exchange or
quotation system, then the market price of the Series A Preferred Stock
on the relevant date as determined in good faith by the Board of
Directors of the Corporation.
(viii) "Ownership Limit" shall mean the lesser of: (i) with respect
to Thomas W. Kitchin, not more than 20.75%, with respect to American
Real Estate Investment Corporation, Ltd., not more than 9.0%, and with
respect to any other Person, not more than 6.75%, of the outstanding
Series A Preferred Stock (in value or in number of shares, whichever is
more restrictive), or (ii) with respect to any Person (including those
named in (i) above) who owns, directly or constructively (through the
application of Section 318(a) of the Code, as modified by Section
856(d)(5) of the Code), 9.9% or
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more of a Person (in the case of a corporation, of the total combined
total combined voting power of all classes of stock entitled to vote or
the total number of shares of all classes of stock of such corporation
and, in the case of any Person which is not a corporation, of the
assets or net profits of such person), from which the Corporation
derives gross income, not more than 9.9% of the total combined voting
power of all classes of stock entitled to vote or of the number of
shares of all classes of stock of the Corporation (the "Related Party
Limit").
(ix) "Person" shall mean an individual, corporation, partnership,
estate, trust (including a trust qualified under Section 401(a) or
501(c)(17) of the Code), a portion of a trust permanently set aside for
or to be used exclusively for the purposes described in Section 642(c)
of the Code, association, private foundation within the meaning of
Section 509(a) of the Code, joint stock corporation or other entity,
and also includes a group as that term is used for purposes of Section
13(d)(3) of the Exchange Act; but does not include an underwriter which
participates in a public offering of the Series A Preferred Stock,
provided that the ownership of Series A Preferred Stock by such
underwriter would not result in the Corporation's being "closely held"
within the meaning of Section 856(h) of the Code, or would otherwise
result in the Corporation's failing to qualify as a REIT.
(x) "Purported Beneficial Transferee" shall mean, with respect to
any purported Transfer which results in Excess Stock, the purported
beneficial transferee or owner for whom the Purported Record Transferee
would have acquired or owned shares of Series A Preferred Stock, if
such Transfer had been valid under subparagraph (b) of this Paragraph
7.
(xi) "Purported Record Transferee" shall mean, with respect to any
purported Transfer which results in Excess Stock, the record holder of
the Series A Preferred Stock if such Transfer had been valid under
subparagraph (b) of this Paragraph 7.
(xii) "REIT" shall mean a Real Estate Investment Trust under Section
856 of the Code.
(xiii) "Transfer" shall mean any sale, transfer, gift, assignment,
devise or other disposition of Series A Preferred Stock, including (i)
the granting of any option or entering into any agreement for the sale,
transfer or other disposition of Series A Preferred Stock, or (ii) the
sale, transfer, assignment or other disposition of any securities (or
rights convertible into or exchangeable for Series A Preferred Stock),
whether voluntary or involuntary, whether of record or beneficially or
Beneficially or Constructively (including but not limited to transfers
of interests in other entities which results in changes in Beneficial
or Constructive Ownership of Series A Preferred Stock), and whether by
operation of law or otherwise.
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(xiv) "Trust" shall mean the trust created pursuant to subparagraph
(a) of Paragraph 8 of this Designation.
(xv) "Trustee" shall mean the Corporation as Trustee for the Trust,
and any successor trustee appointed by the Corporation.
(b) Restrictions on Ownership and Transfer.
(i) Except as provided in subparagraph (i) of this Paragraph 7,
from and after the date of the Initial Offering, no Person shall
Beneficially Own or Constructively Own Series A Preferred Stock in
excess of the Ownership Limit.
(ii) Except as provided in subparagraph (i) of this Paragraph 7,
from and after the date of the Initial Offering, any Transfer (whether
or not such Transfer is the result of a transaction entered into
through Nasdaq) that, if effective, would result in any Person
Beneficially Owning Series A Preferred Stock in excess of the Ownership
Limit shall be void ab initio as to the Transfer of such Series A
Preferred Stock 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 Series A Preferred Stock.
(iii) Except as provided in subparagraph (i) of this Paragraph 7,
from and after the date of the Initial Offering, any Transfer (whether
or not such Transfer is the result of a transaction entered into
through Nasdaq) that, if effective, would result in any Person
Constructively Owning Series A Preferred Stock in excess of the
Ownership Limit shall be void ab initio as to the Transfer of such
Series A Preferred Stock which would be otherwise Constructively Owned
by such Person in excess of the Ownership Limit; and the intended
transferee shall acquire no rights in such Series A Preferred Stock.
(iv) Except as provided in subparagraph (i) of this Paragraph 7,
from and after the date of the Initial Offering, any Transfer (whether
or not such Transfer is the result of a transaction entered into
through Nasdaq) that, if effective, would result in the Series A
Preferred Stock being beneficially owned by fewer than 100 Persons
(determined without reference to any rules of attribution) shall be
void ab initio as to the Transfer of such Series A Preferred Stock
which would be otherwise beneficially owned by the transferee; and the
intended transferee shall acquire no rights in such Series A Preferred
Stock.
(v) Notwithstanding any other provisions contained in this
Designation, from and after the date of the Initial Offering, any
Transfer (whether or not such Transfer is the result of a transaction
entered into through Nasdaq) or other event that, if effective, would
result in the Corporation being "closely held" within the meaning of
Section 856(h) of the Code, or would otherwise result in the
Corporation failing to qualify as a REIT (including, but not limited
to, a Transfer or other event that would
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result in the Corporation owning (directly or Constructively) an
interest in a tenant that is described in Section 856(d)(2)(B) of the
Code if the income derived by the Corporation from such tenant would
cause the Corporation to fail to satisfy any of the gross income
requirements of Section 856(c) of the Code), shall be void ab initio as
to the Transfer of the Series A Preferred Stock or other event which
would cause the Corporation to be "closely held" within the meaning of
Section 856(h) of the Code or would otherwise result in the Corporation
failing to qualify as a REIT; and the intended transferee or owner or
Constructive or Beneficial Owner shall acquire or retain no rights in
such Series A Preferred Stock.
(c) Series A Preferred Stock Deemed Excess Stock. If,
notwithstanding the other provisions contained in this Designation, at any time
after the date of the Initial Offering, there is a purported Transfer (whether
or not such Transfer is the result of a transaction entered into through
Nasdaq), change in the capital structure of the Corporation or other event such
that one or more of the restrictions on ownership and transfers described in
subparagraph (b) of this Paragraph 7 has been violated, then the Series A
Preferred Stock being Transferred (or in the case of an event other than a
Transfer, the Series A Preferred Stock owned or Constructively Owned or
Beneficially Owned) which would cause one or more of the restrictions on
ownership or transfer to be violated (rounded up to the nearest whole share)
shall be deemed Excess Stock effective as of the closed of business on the
business day prior to the date of such Transfer or other event.
(d) Remedies For Breach. If the Board of Directors or its
designees shall at any time determine in good faith that a Transfer or other
event has taken place in violation of subparagraph (b) of this Paragraph 7 or
that a Person intends to acquire, has attempted to acquire or may acquire direct
ownership, beneficial ownership (determined without reference to any rules of
attribution), Beneficial Ownership or Constructive Ownership of any shares of
the Corporation in violation of subparagraph (b) of this Paragraph 7, the Board
of Directors or its designees shall take such action as it deems advisable to
refuse to give effect to or to prevent such Transfer or other event, including,
but not limited to, refusing to give effect to such Transfer or other event on
the books of the Corporation or instituting proceedings to enjoin such Transfer
or other event.
(e) Notice of Restricted Transfer. Any Person who acquires or
attempts to acquire Series A Preferred Stock or other securities in violation of
subparagraph (b) of this Paragraph 7, shall immediately give written notice to
the Corporation of such event and shall provide to the Corporation such other
information as the Corporation may request in order to determine the effect, if
any, of such Transfer or attempted Transfer or other event on the Corporation's
status as a REIT.
(f) Owners Required To Provide Information. From and after the
date of he Initial Offering, each Person who is a Beneficial Owner or
Constructive Owner of more than 5% of Series A Preferred Stock must file an
affidavit with the Corporation within 30 days after
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January 1st of each year containing information that the Corporation may
require, in order to determine the Corporation's status as a REIT. From and
after the date of the Initial Offering, each Person who is a beneficial owner or
Beneficial Owner or Constructive Owner of any Series A Preferred Stock and each
Person (including the stockholder of record) who is holding Series A Preferred
Stock for a Beneficial Owner or Constructive Owner shall provide to the
Corporation such information that the Corporation may request, in good faith, in
order to determine the Corporation's status as a REIT.
(g) Remedies Not Limited. Nothing contained in this Designation
(but subject to subparagraph (f) of Paragraph 8 hereof) shall limit the
authority of the Board of Directors to take such other action as it deems
necessary or advisable to protect the Corporation and the interests of its
stockholders by preservation of the Corporation's status as a REIT.
(h) Ambiguity. In the case of an ambiguity in the application of
any of the provisions of this Paragraph 7, including any definition contained in
subparagraph (a) of this Paragraph 7, the Board of Directors shall have the
power to determine the application of the provisions of this Paragraph 7 with
respect to any situation based on the facts known to it (subject, however, to
the provisions of subparagraph (f) of Paragraph 8 of this Designation).
(i) Exceptions.
(i) Subject to subparagraph (b)(v) of this Paragraph 7, the Board
of Directors, in its sole and absolute discretion, may exempt a Person
from the Ownership Limit if such Person is not an individual for
purposes of Section 542(a)(2) of the Code and the Board of Directors
obtains such representations and undertakings from such Person as are
reasonably necessary to ascertain that no individual's Beneficial
Ownership of such Series A Preferred Stock will violate the Ownership
Limit and such Person agrees that any violation of such representations
or undertaking (or other action which is contrary to the restrictions
contained in this Paragraph 7) or attempted violation will result in
Excess Stock in accordance with subparagraph (c) of this Paragraph 7.
(ii) Subject to subparagraph (b)(v) of this Paragraph 7, the Board
of Directors, in its sole and absolute discretion, may exempt a Person
from the limitation on a Person Constructively Owning Series A
Preferred Stock in excess of the Ownership Limit, if such Person does
not and represents that it will not own, directly or constructively
(through the application of Section 318(a) of the Code, as modified by
Section 856(d)(5) of the Code), more than a 9.9% interest (within the
meaning of Section 856(d)(2)(B)) in a Person from whom the Corporation
derives gross income and the Board of Directors obtains such
representations and undertakings from such Person as reasonably
necessary to ascertain this fact and such Person agrees that any
violation or attempted violation will result in such Series A Preferred
Stock in excess of the Ownership Limit being deemed Excess Stock in
accordance with subparagraph (c) of this Paragraph 7.
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(iii) Prior to granting any exception pursuant to subparagraph
(i)(A) or (i)(B) of this Paragraph 7, the Board of Directors may
require a ruling from the Internal Revenue Service, or an opinion of
counsel, in either case in form and substance satisfactory to the Board
of Directors in its sole discretion as it may deem necessary or
advisable in order to determine or ensure the Corporation's status as a
REIT; provided, however, that obtaining a favorable ruling or opinion
shall not be required for the Board of Directors to grant an exception
hereunder.
(j) Legend. Each certificate representing one or more shares of
Series A Preferred Stock shall bear the following legend:
The Corporation is authorized to issue two classes of capital stock
which are designated as Common Stock and Preferred Stock. The Board of
Directors is authorized, without action by the Corporation's
stockholders, to determine the preferences, limitations and relative
rights of the Preferred Stock before the issuance of any Preferred Stock.
The Corporation will furnish, without charge, to any stockholder making a
written request therefor, a copy of the Corporation's articles of
incorporation and a written statement of the designations, relative
rights, preferences and limitations applicable to each class of stock.
Requests for such written statement may be directed to Jameson Inns,
Inc., 8 Perimeter Center East, Suite 8050, Atlanta, Georgia 30346-1603.
The shares of 9.25% Series A Cumulative Preferred Stock ("Series A
Preferred Stock") represented by this certificate are subject to
restrictions on ownership and transfer for the purpose of the
Corporation's maintenance of its status as a Real Estate Investment Trust
under the Internal Revenue Code of 1986, as amended. No Person (other
than Thomas W. Kitchin, his heirs, legatees and the personal
representative of his estate, as such, and American Real Estate
Investment Company, Ltd.) may own, Beneficially Own or Constructively Own
Series A Preferred Stock in excess of 6.75% (in value or in number of
shares, whichever is more restrictive) of the outstanding Series A
Preferred Stock of the Corporation, with certain further restrictions and
exceptions set forth in the Corporation's articles of incorporation. Any
Person who attempts to own, Beneficially Own or Constructively Own Series
A Preferred Stock in excess of the above limitations must immediately
notify the Corporation. All capitalized terms in this legend have the
meanings defined in the Corporation's articles of incorporation.
Transfers in violation of the restrictions described above may be void ab
initio.
In addition, upon the occurrence of certain events, if the restrictions
on ownership are violated, the Series A Preferred Stock represented
hereby may be redeemed or held in trust by the Corporation. The
Corporation has an option to acquire Excess Stock under certain
circumstances. The Corporation will furnish to the holder hereof upon
request and without charge a complete written statement of the terms
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and conditions of the Excess Stock. Requests for such statement may be
directed to Jameson Inns, Inc., 8 Perimeter Center East, Suite 8050,
Atlanta, Georgia 30346-1603.
Capitalized terms used herein shall, where the context permits, have
the same meaning assigned to such terms as are assigned in the
Corporation's articles of incorporation.
(k) Separability. If any provision of Paragraph 7 or 8 of this
Designation or any application of any such provision is determined to be
invalid by any federal or state court having jurisdiction, the validity
of the remaining provisions shall not be affected and other applications
of such provision shall be affected only to the extent necessary to
comply with the determination of such court.
8. Excess Stock.
(a) Ownership In Trust. Upon any purported Transfer (whether or
not such Transfer is the result of a transaction entered into through
Nasdaq) that results in Excess Stock pursuant to subparagraph (c) of
Paragraph 7 of this Designation, such Excess Stock shall be deemed to
have been transferred to the Corporation, as Trustee of a Trust for the
exclusive benefit of such Beneficiary or Beneficiaries to whom an
interest in such Excess Stock may later be transferred pursuant to
subparagraph (d) of this Paragraph 8. The Purported Record Transferee
shall have no rights in such Excess Stock except the right to designate a
transferee of such Excess Stock upon the terms specified in subparagraph
(d) of this Paragraph 8. The Purported Beneficial Transferee shall have
no rights in such Excess Stock except as provided in subparagraph (d) of
this Paragraph 8.
(b) Dividend Rights. Excess Stock shall not be entitled to any
dividends. Any dividend or distribution paid prior to the discovery by
the Corporation that shares of Series A Preferred Stock have been
converted into Excess Stock shall be repaid to the Corporation upon
demand.
(c) Rights Upon Liquidation. Subject to the preferential rights of
the Preferred Stock, if any, as may be determined by the Board of
Directors in accordance with the articles of incorporation of the
Corporation, as amended, in the event of any voluntary or involuntary
liquidation, dissolution or winding up of, or any distribution of the
assets of, the Corporation, each holder of Excess Stock shall be entitled
to receive, ratably with each other holder of Series A Preferred Stock,
that portion of the assets of the Corporation available for distribution
to its stockholders as the number shares of Excess Stock held by such
holder bears to the total number of shares of Series A Preferred Stock
then outstanding. The Corporation, as holder of the Excess Stock in
trust, or if the Corporation shall have been dissolved, any trustee
appointed by the Corporation prior to its dissolution, shall distribute
ratably to the Beneficiaries of the Trust, when and if
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determined in accordance with subparagraph (d) of this Paragraph 8, any
such assets received in respect of the Excess Stock in any liquidation,
dissolution or winding up of, or any distribution of the assets of the
Corporation.
(d) Restrictions On Transfer; Designation of Beneficiary.
(i) Excess Stock shall not be transferable. Subject to
the last sentence of this clause (a), the Purported Record Transferee
may freely designate a Beneficiary of an interest in the Trust
(representing the number of shares of Excess Stock held by the Trust
attributable to a purported Transfer that resulted in Excess Stock), if
(i) the Excess Stock held in the Trust would not be Excess Stock 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 Stock that exceeds (x) the price per
share such Purported Beneficial Transferee paid for the Series A
Preferred Stock in the purported Transfer that resulted in Excess
Stock, or (y) if the Transfer or other event that resulted in Excess
Stock was not a transaction in which the Purported Beneficial
Transferee gave full value for such Excess Stock, a price per share
equal to the Market Price on the date of the purported Transfer or
other event that resulted in the issuance of Excess Stock. Upon such
transfer of an interest in the Trust, the corresponding shares of
Excess Stock in the Trust shall automatically cease to be Excess Stock
and such Series A Preferred Stock shall be transferred of record to the
transferee of the interest in the Trust if such Series A Preferred
Stock would not be Excess Stock 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 Corporation of the intended
transfer and the Corporation must have waived in writing its purchase
rights under subparagraph (e) of this Paragraph 8.
(ii) Notwithstanding the foregoing, if a Purported
Beneficial Transferee receives a price for designating a Beneficiary of
an interest in the Trust that exceeds the amounts allowable under
subparagraph (d)(i) of this Paragraph 8, such Purported Beneficial
Transferee shall pay, or cause such Beneficiary to pay, such excess to
the Corporation.
(e) Purchase Right in Excess Stock. Notwithstanding the provisions
of subparagraph (d) of this Paragraph 8, Excess Stock shall be deemed to
have been offered for sale to the Corporation, or its designee, at a
price per share equal to the lesser of (i) the price per share in the
transaction that resulted in such Excess Stock (or, if the Transfer or
other event that resulted in such Excess Stock was not a transaction in
which the Purported Beneficial Transferee gave full value for such Excess
Stock, a price per share equal to the Market Price on the date of the
purported Transfer or other event that resulted in Excess Stock) and (ii)
the Market Price on the date the Corporation, or its designee, accepts
such offer. The Corporation shall have the right to accept such offer for
a period of ninety days after the later of (i) the date of the Transfer
or other event
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which resulted in such Excess Stock and (ii) the date the Board of
Directors determines in good faith that a Transfer or other event
resulting in such Excess Stock has occurred, if the Corporation does not
receive a notice of such Transfer or other event pursuant to subparagraph
(e) of Paragraph 7 of this Designation. The Corporation may appoint a
special trustee of the trust established under subparagraph (a) of this
Paragraph 8 for the purpose of consummating the purchase of Excess Stock
by the Corporation.
(f) Settlement. Nothing in Paragraph 7 or Paragraph 8 of this
Designation shall preclude the settlement of any transaction entered into
through Nasdaq.
B. Article II of the Articles is hereby amended by deleting the text thereof
in its entirety and replacing it with the following text:
The registered office of the Corporation is located at 8
Perimeter Center East, Suite 8050, Atlanta, Georgia 30346-1603. The
registered agent of the Corporation at such office is Steven A. Curlee.
C. Article III and Paragraph 5 of Article IV of the Articles are hereby
amended to accurately reflect the Corporation's address by deleting from such
Articles in each place where it appears the phrase "1950 Century Blvd, N.E.,
Suite 25, Atlanta, Georgia 30345-3317" and substituting in its place the phrase
"8 Perimeter Center East, Suite 8050, Atlanta, Georgia 30346-1603."
D. Article IV of the Articles is hereby amended by deleting the numbers
20,100,000, 20,000,000 and 100,000 in the first paragraph of such Article and
substituting in their places the numbers 50,000,000, 40,000,000 and 10,000,000,
respectively.
E. Subparagraph C.4(a) of Article IV of the Articles is hereby amended as
follows:
1. The definition of the term "Initial Public Offering" is hereby deleted
in its entirety and replaced by the following definition of such term:
"Initial Public Offering" shall mean the sale of Common Stock
pursuant to the Corporation's first effective registration statement
for such Common Stock filed under the Securities Act of 1933, as
amended.
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2. The following definition of the term "Market Price" is hereby added:
"Market Price" shall mean the value per share equal
to the average of the closing price of a share of Common Stock
as reported by the National Association of Securities Dealers
Automated Quotation System (or, if the Common Stock is then
reported on a stock exchange, the closing price as reported on
such exchange) for the 10 calendar days preceding the relevant
date, or if the Common Stock is not then traded over any
exchange or quotation system, then the market price of the
Common Stock on the relevant date as determined in good faith
by the Board of Directors of the Corporation.
3. The following definition of the term "Person" is hereby added:
"Person" shall mean an individual, corporation,
partnership, estate, trust (including a trust qualified under
Section 401(a) or 501(c)(17) of the Code), a portion of a
trust permanently set aside for or to be used exclusively for
the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section
509(a) of the Code, joint stock company or other entity, and
also includes a group as that term is used for purposes of
Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended; but does not include an underwriter which
participates in a public offering of the Common Stock,
provided that the ownership of Common Stock by such
underwriter would not result in the Corporation's being
"closely held" within the meaning of Section 856(h) of the
Code, or would otherwise result in the Corporation's failing
to qualify as a REIT.
4. The definitions of the terms "Purported Beneficial Transferee" and
"Purported Record Transferee" are each hereby amended by deleting each
reference therein to subparagraph C.5(b) and substituting therefor
references to subparagraph C.4(b).
5. The following definition of the term "Related Entity" is hereby
added:
"Related Entity" shall mean any entity whose income
is attributed to the Corporation for purposes of the REIT
gross income tests set forth in Section 856 of the Code.
F. Subparagraphs C.4(c), C.4(d) and C.4(e) of Article IV of the Articles
are hereby
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amended by deleting each reference therein to subparagraph C.5(b) and
substituting therefor references to subparagraph C.4(b).
G. Subparagraph D.5 of Article IV of the Articles is hereby amended by
deleting the reference to Article II in the second sentence of such subparagraph
and substituting in its place a reference to Article IV.
III.
The amendment set forth in Section II.A of these Articles of Amendment
was duly adopted by the affirmative vote of a majority of the members of the
Board of Directors of the Corporation on February 5, 1998. Pursuant to Section
14-2-602 of the Georgia Business Corporation Code, the shareholders of Jameson
Inns, Inc. were not required to take any action in connection herewith. The
amendments set forth in Section II.B through II.G of these Articles of Amendment
were (1) proposed by the Board of Directors of the Corporation and recommended
to the shareholders of the Corporation for adoption on December 12, 1997, and
and (2) approved in accordance with Section 14-2-1003 of the Georgia Business
Code by a vote of the shareholders at a special meeting of shareholders of the
Corporation duly called and held on February 2, 1998.
IN WITNESS WHEREOF, the Corporation as caused these Articles of
Amendment to be executed by its duly authorized officer on the 13th day of
March, 1998.
JAMESON INNS, INC.
By:/s/ Steven A. Curlee
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Title: Secretary; Vice President - Legal
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