<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
FOR ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 1-13038
CRESCENT REAL ESTATE EQUITIES COMPANY
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(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
TEXAS 52-1862813
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(State or other jurisdiction of incorporation (I.R.S. Employer Identification Number)
or organization)
</TABLE>
777 Main Street, Suite 2100, Fort Worth, Texas 76102
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(Address of principal executive offices)(Zip code)
Registrant's telephone number, including area code (817) 877-0477
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<S> <C>
Name of Each Exchange
Title of each class: on Which Registered:
- -------------------- ---------------------
Common Shares of Beneficial Interest
par value $.01 per share New York Stock Exchange, Inc.
6 3/4% Series A Convertible Cumulative
Preferred Shares of Beneficial Interest
par value $.01 per share New York Stock Exchange, Inc.
</TABLE>
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve (12) months (or for such shorter period that
the registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past ninety (90) days.
YES X NO
--------------- ---------------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
As of May 8, 1998, the aggregate market value of the 113,838,829 Common
Shares and 8,000,000 Preferred Shares held by non-affiliates of the registrant
was approximately $4.2 billion, based upon the closing price of $35 9/16 for
Common Shares and 24 15/16 for Preferred Shares on the New York Stock Exchange.
Number of Common Shares outstanding as of May 8, 1998: 113,838,829
Number of Preferred Shares outstanding as of May 8, 1998: 8,000,000
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement to be filed with the Securities and Exchange
Commission for Registrant's 1997 Annual Meeting of Shareholders to be held in
June 1998 are incorporated by reference into Part III.
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The Form 10-K of Crescent Real Estate Equities Company (the "Company")
for the year ended December 31, 1997 is being amended to (i) amend the cover
page to reflect certain additional and updated information relating to the
Company's equity, (ii) amend and restate in its entirety Item 7. Management's
Discussion and Analysis of Financial Condition and Historical Results of
Operations to include certain additional information and to correct certain
typographical errors, (iii) to amend and restate Item 14. Exhibits, Financial
Statement Schedules, and Reports on Form 8-K to change the manner of
presentation of the information contained therein, to include an exhibit, to
amend and restate Exhibit 27.01 to correct certain typographical errors therein,
and to amend and restate the list of exhibits to reflect such changes and
correct certain typographical errors, and (iv) to amend and restate the Exhibit
Index to reflect the amendment and restatement of Exhibit 27.01 to correct
certain typographical errors therein, the inclusion of an exhibit in this Form
10-K/A, and the correction of certain typographical errors in the Exhibit Index.
<PAGE> 3
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
HISTORICAL RESULTS OF OPERATIONS
OVERVIEW
The following discussion should be read in conjunction with the
"Selected Financial Data" and the financial statements and notes thereto,
appearing elsewhere in this report. Historical results and percentage
relationships set forth in "Selected Financial Data", the "Financial Statements
and Supplementary Data" and this section should not be taken as indicative of
future operations of the Company.
COMPARISON OF YEAR ENDED DECEMBER 31, 1997 TO YEAR ENDED DECEMBER 31, 1996
Total revenues increased $238.5 million, or 114.2%, to $447.4 million
for the year ended December 31, 1997, as compared to $208.9 million for the year
ended December 31, 1996. The increase in Office and Retail Property revenues of
$181.1 million is primarily attributable to: a) the acquisition of 26 Office
Properties and one Retail Property during 1997, which resulted in $79.5 million
of incremental revenues; b) the fact that 23 Office Properties and four Retail
Properties acquired during 1996 contributed revenues for a full year in 1997 as
compared to a partial year in 1996, which resulted in $91.6 million of
incremental revenues; and c) an increase in Office and Retail Property revenues
of $10.0 million from the 32 Office and Retail Properties owned prior to January
1, 1996, which is primarily due to rental rate increases at these Properties.
The increase in Hotel Property revenues of $17.5 million is primarily
attributable to: a) the acquisition of two Hotel Properties during 1997, which
resulted in $2.1 million of incremental revenues; b) the fact that three Hotel
Properties acquired during 1996 contributed revenues for a full year in 1997 as
compared to a partial year in 1996, which resulted in $14.5 million of
incremental revenues; and c) an increase in Hotel Property revenues of $.9
million from the three Hotel Properties owned prior to January 1, 1996. The
increase in Behavioral Healthcare Facilities revenues of $29.8 million is
attributable to the acquisition of the facilities in June 1997. The increase in
interest and other income of $10.1 million for the year ended December 31, 1997,
is primarily attributable to: a) the $127.8 million increase in notes receivable
primarily as a result of the acquisition of certain notes included in the
Carter-Crowley Portfolio, loans to Crescent Operating, Inc. ("COI"), loans to
Desert Mountain Properties Limited Partnership ("DMPLP") and the acquisition of
a note receivable secured by a hotel property; and b) interest earned on
available cash from the April 1997 Offering (as defined below).
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Total expenses increased $171.3 million, or 103.9%, to $336.1 million
for the year ended December 31, 1997, as compared to $164.8 million for the year
ended December 31, 1996. The increase in rental property operating expenses of
$85.1 million is primarily attributable to: a) the acquisition of 26 Office
Properties and one Retail Property during 1997, which resulted in $38.3 million
of incremental expenses; b) the fact that 23 Office Properties and four Retail
Properties acquired during 1996 contributed expenses for a full year in 1997 as
compared to a partial year in 1996, which resulted in $40.8 million of
incremental expenses; and c) an increase in expenses of $5.5 million from the 32
Office and Retail Properties owned prior to January 1, 1996. Depreciation and
amortization expense increased $33.9 million due primarily to the acquisitions
of Office and Retail Properties, Hotel Properties and Behavioral Healthcare
Facilities. The increase in interest expense of $43.5 million is primarily
attributable to: (i) $6.9 million of interest payable under LaSalle Note III,
which was assumed in the acquisition of the Greenway Plaza Portfolio in October
1996; (ii) $.8 million of interest payable to Nomura Asset Capital Corporation
under the Nomura Funding VI Note, which was assumed in December 1996; (iii) $2.0
million of interest payable under the financing arrangement with Northwestern
Mutual Life Insurance Company, which was in place as of December 1996; (iv) $1.0
million of interest payable under LaSalle Note II secured by the Funding II
properties; (v) $10.0 million of interest payable under various short-term notes
with BankBoston, N.A. ("BankBoston") with principal amounts ranging between $150
million and $235 million, which were entered into from June through December
1997; (vi) $14.0 million of incremental interest payable due to draws under the
Credit Facility (average balance outstanding for the year ended December 31,
1997 and 1996 was $216.8 million and $64.3 million, respectively); (vii) $7.7
million of interest payable under the Notes due 2002 and Notes due 2007, which
were issued in a private offering in September 1997 (the "September 1997 Notes
Offering"); and (viii) $1.1 million of interest payable under the Chase
Manhattan Note, which was assumed in the acquisition of Fountain Place in
November 1997. All of
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these financing arrangements (the terms of which are described in more detail
below under "Liquidity and Capital Resources"), were used to fund acquisitions.
The increase in corporate general and administrative expense of $8.2 million is
primarily attributable to incremental costs associated with the operation of the
Company as a result of the acquisition of additional Properties and to incentive
compensation paid to the Company's executive officers.
COMPARISON OF YEAR ENDED DECEMBER 31, 1996 TO YEAR ENDED DECEMBER 31, 1995
Total revenues increased $78.9 million, or 60.7%, to $208.9 million for
the year ended December 31, 1996, as compared to $130.0 million for the year
ended December 31, 1995. The increase in Office and Retail Property revenues of
$66.8 million is primarily attributable to: a) the acquisition of 23 Office
Properties and four Retail Properties during 1996, which resulted in $32.8
million of incremental revenues; and b) the fact that 20 Office Properties
acquired during 1995 contributed revenues for a full year in 1996 as compared to
a partial year in 1995, which resulted in $34.9 million of incremental revenue.
This increase reflects a $.9 million decrease in revenues from the Office and
Retail Properties owned as of January 1, 1995. The increase in Hotel Property
revenues of $11.7 million is primarily attributable to: a) the acquisition of
three Hotel Properties in 1996, which resulted in $2.7 million of incremental
revenues; and b) the fact that three Hotel Properties acquired during 1995
contributed revenues for a full year in 1996 as compared to a partial year in
1995, which resulted in $9.1 million of incremental revenues.
Total expenses increased $65.7 million, or 66.3%, to $164.8 million
for the year ended December 31, 1996, as compared to $99.1 million for the year
ended December 31, 1995. The increase in rental property operating expenses of
$27.9 million is primarily attributable to: a) the acquisition of 23 Office
Properties and four Retail Properties during 1996, which resulted in $13.9
million of incremental expenses; and b) the fact that 20 Office Properties
acquired during 1995 contributed expenses for a full year in 1996 as compared to
a partial year in 1995, which resulted in $14.1 million of incremental expenses.
This increase reflects a $.2 million decrease in expenses from the Office and
Retail Properties owned as of January 1, 1995. Depreciation and amortization
expense increased $12.5 million, primarily due to the acquisitions of Office,
Retail and Hotel Properties during 1996 and 1995. The increase in interest
expense of $24.1 million is primarily attributable to $27.1 million of interest
payable under the terms of the three new long-term financing arrangements
entered into from August 1995 through March 1996, proceeds of which were used to
repay the Credit Facility and to fund property acquisitions in 1995 and 1996,
and $2.1 million of interest payable under LaSalle Note III, which was assumed
in the acquisition of the Greenway Plaza Portfolio in October 1996. This
increase reflects a $5.1 million decrease in interest expense under the Credit
Facility, primarily due to a lower average outstanding balance throughout the
year. The increase in corporate general and administrative expenses of $.9
million is primarily attributable to incremental costs associated with the
operations of the Company as a result of acquisitions of additional Properties.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents were $66.6 million and $25.6 million at
December 31, 1997 and December 31, 1996, respectively. The increase is
attributable to $2,123.7 million and $211.7 million of cash provided by
financing and operating activities, respectively, offset by $2,294.4 million
used in investing activities. The Company's inflow of cash provided by financing
activities is primarily attributable to proceeds received from offerings of
common shares ($1,345.3 million), net borrowings under the Credit Facility
($310.0 million), net borrowings under the short-term BankBoston notes ($191.9
million) and proceeds from the September 1997 Notes Offering ($400.0 million).
The inflow of cash provided by financing activities was partially offset by the
distributions paid to shareholders and unitholders ($140.8 million) and the
distribution of COI shares to shareholders and unitholders ($11.9 million). The
inflow of cash from operating activities is primarily attributable to: (i)
Property operations, and (ii) an increase in accounts payable which is primarily
attributable to 1997 acquisitions. The inflow of cash from operating activities
was partially offset by an increase in other assets and deferred rent receivable
($52.4 million). The Company utilized $2,294.4 million of cash inflow primarily
in the following investing activities: (i) the acquisition of 26 Office
Properties, one Retail Property, two Hotel Properties and 90 Behavioral
Healthcare Facilities ($1,532.7 million); (ii) additional investments in
Residential Development Corporations ($270.2 million) primarily attributable to
Desert Mountain Development Corporation ($214.0 million) and Woodlands Land
Development Company, L.P. ($41.2 million); (iii) investments in unconsolidated
companies ($278.0 million) primarily attributable to Woodland Commercial
Properties Company, L.P. ($38.6 million),
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the Refrigerated Warehouse Investment ($160 million), Bank One Center ($41.5
million) and DBL Holding, Inc. ($12.6 million); (iv) notes receivable ($127.8
million) primarily attributable to loans included in the Carter-Crowley
Portfolio ($58.4 million), a loan to DMPLP ($17.6 million), loans made to COI
($42.1 million), and the acquisition of a note receivable secured by a hotel
property ($7.1 million); (v) capital expenditures for rental properties ($22.0
million), primarily attributable to building improvements for the Office and
Retail Properties, and replacement of furniture, fixtures and equipment for the
Hotel Properties; and (vi) recurring and non-recurring tenant improvement and
leasing costs for the Office and Retail Properties ($53.9 million).
On February 14, 1997, the Company filed a shelf registration (the
"February Shelf Registration Statement") with the Securities and Exchange
Commission ("SEC") for an aggregate of $1.2 billion of common shares, preferred
shares and warrants exercisable for common shares. An aggregate of $1,184.0
million of common shares have been issued under the registration statement. Net
proceeds from the offerings of these securities were used as described below.
On April 28, 1997, the Company completed an offering (the "April 1997
Offering") of 24,150,000 common shares (including the underwriters'
overallotment option) at $25.375 per share under the February Shelf Registration
Statement. Net proceeds to the Company from the April 1997 Offering after
underwriting discount of $29.2 million and other offering costs of $3.0 million
were $580.6 million. On May 14, 1997, the Company completed an additional
offering of 500,000 common shares under the February Shelf Registration
Statement to several underwriters who participated in the April 1997 Offering.
The common shares were sold at $25.875 per share, with gross and net proceeds of
$12.9 million (collectively, the "Offerings").
In the second quarter of 1997, the Company used net proceeds of $593.5
million from the Offerings and $314.7 million from borrowings under the Credit
Facility and $160.0 million of short-term borrowings from BankBoston (i) to fund
$30.0 million in connection with the formation and capitalization of COI; (ii)
to repay the $150.0 million BankBoston short-term note payable; (iii) to reduce
by $131.0 million borrowings under the Credit Facility; (iv) to fund $306.3
million of the purchase price of the Carter-Crowley Portfolio acquired by the
Company; (v) to fund the $419.7 million commitment of the Company and COI
relating to the acquisition of the Behavioral Healthcare Facilities; and (vi) to
fund $31.2 million for working capital purposes.
On August 12, 1997, the Company entered into two transactions with
affiliates of Union Bank of Switzerland ("UBS"). In one transaction, pursuant to
which the Company obtained additional equity capital through the issuance of
common shares, the Company sold 4,700,000 common shares at $31.5625 per share to
UBS Securities, LLC for $148.3 million ($145.0 million of net proceeds) ("UBS
Offering") under the February Shelf Registration Statement. The net proceeds to
the Company from the UBS Offering were used to repay borrowings under the Credit
Facility. In the other transaction, which will permit the Company to benefit
from any increases in the market price of its common shares, the Company entered
into a forward share purchase agreement with Union Bank of Switzerland, London
Branch ("UBS-LB") which provides that the Company will purchase 4,700,000 common
shares from UBS-LB within one year. The purchase price will be determined on the
date the Company settles the agreement and will include a forward accretion
component, minus an adjustment for the Company's distribution rate. The Company
may complete, at its option, the settlement in cash or common shares.
On September 22, 1997, the Operating Partnership completed the
September 1997 Notes Offering, which was a private offering of unsecured notes
in an aggregate principal amount of $400.0 million ($394.8 million of net
proceeds), the Notes due 2002 and the Notes due 2007. The net proceeds of the
September 1997 Notes Offering were used to fund $327.6 million of the purchase
price for Houston Center, to repay $50.0 million of borrowings under the Credit
Facility, to fund $10.0 million of the purchase price of Miami Center and to
repay $7.2 million of short-term indebtedness.
In September 1997, the Company's Notes due 2002 and the Notes due 2007
were assigned a rating of Baa3 from Moody's Investors Service, Inc.
On October 8, 1997, the Company completed an offering (the "October
1997 Offering") of 10,000,000 common shares at $39.00 per share under the
February Shelf Registration Statement. Net proceeds to the Company from the
October 1997 Offering after underwriting discount of $19.9 million and other
offering costs of $1.6 million were
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$368.5 million. The net proceeds were used to repay $323.5 million of borrowings
under the Credit Facility and to fund $45.0 million of the purchase price of the
U.S. Home Building.
On October 29, 1997, the Company filed a shelf registration statement (the
"October Shelf Registration Statement") with the SEC for an aggregate of $1.5
billion of common shares, preferred shares and warrants exercisable for common
shares. As of March 25, 1998, the Company has issued $424.0 million of
securities under the October Shelf Registration Statement, as described below.
Any securities issued in the future under the October Shelf Registration
Statement may be offered from time to time in amounts, at prices, and on terms
to be determined at the time of the offering. Management believes the October
Shelf Registration Statement will provide the Company with more efficient and
immediate access to the capital markets at such time as it is considered
appropriate. Net proceeds from any future offering of these securities are
expected to be used for general business purposes, including the acquisition and
development of additional properties and other acquisition transactions, the
payment of certain outstanding debt and improvements to certain properties in
the Company's portfolio.
On December 12, 1997 the Company entered into two transactions with Merrill
Lynch International. In one transaction, pursuant to which the Company obtained
additional equity capital through the issuance of common shares, the Company
sold 5,375,000 common shares at $38.125 per share under the October Shelf
Registration Statement to Merrill Lynch International for $204.9 million ($199.9
million in net proceeds) (the "Merrill Lynch Offering"). The net proceeds to the
Company from the Merrill Lynch Offering were used to repay borrowings under the
Credit Facility. In the other transaction, which will permit the Company to
benefit from any increases in the market price of its common shares, the Company
entered into a swap agreement (the "Swap Agreement") with Merrill Lynch
International relating to 5,375,000 common shares (the "Settlement Shares"),
pursuant to which Merrill Lynch International will sell, as directed by the
Company on or before December 12, 1998, a sufficient number of common shares to
achieve net sales proceeds equal to the market value of the Settlement Shares on
December 12, 1997, plus a forward accretion component, minus an adjustment for
the Company's distribution rate. The precise number of common shares that will
be required to be sold pursuant to the Swap Agreement will depend primarily on
the market price of the common shares at the time of settlement. The common
shares required to be sold by Merrill Lynch International pursuant to the Swap
Agreement are expected to be the same common shares initially issued by the
Company (although Merrill Lynch International, at its option, may substitute
other common shares that it holds). If, however, as a result of a decrease in
the market price of the common shares, the number of common shares required to
be sold is greater than the number of Settlement Shares, the Company will
deliver additional common shares to Merrill Lynch International. In contrast, if
such number of common shares is less than the number of Settlement Shares, as a
result of an increase in the market price of the common shares, Merrill Lynch
International will deliver common shares or, at the option of the Company, cash
to the Company. On February 20, 1998, the Company issued an additional 525,000
common shares to Merrill Lynch International under the October Shelf
Registration Statement as a result of the decline in market price of the common
shares from the date of issuance on December 12, 1997 through February 12, 1998.
On February 19, 1998, the Company completed an offering (the "February 1998
Preferred Offering") of 8,000,000 6-3/4% Series A convertible cumulative
preferred shares (the "Series A Preferred Shares") with a liquidation preference
of $25.00 per share under the October Shelf Registration Statement. Series A
Preferred Shares are convertible at any time, in whole or in part, at the option
of the holders thereof into common shares of the Company at a conversion price
of $40.86 per common share (equivalent to a conversion rate of .6119 common
shares per Series A Preferred Share), subject to adjustment in certain
circumstances. Net proceeds to the Company from the February 1998 Preferred
Offering after underwriting discount of $8.0 million and other offering costs of
$.8 million were $191.3 million. The net proceeds from the February 1998
Preferred Offering were used to repay borrowings under the Credit Facility.
As of March 25, 1998, with the exception of the Station transaction, the
Company had no commitments for material capital expenditures. The Company
principally expects to fund the approximately $1.745 billion required to
consummate the Merger with Station through the issuance of common shares and a
new series of preferred shares with a value of approximately $700 million, the
assumption of approximately $541 million of Station's outstanding debt, the
refinancing of approximately $378 million of Station's outstanding debt and the
incurrence of approximately $126 million in additional debt primarily related
to transaction costs. There are currently no definitive agreements or
arrangements relating to refinancing or obtaining any such debt.
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The significant terms of the Company's primary debt financing
arrangements are shown below (dollars in thousands):
<TABLE>
<CAPTION>
INTEREST BALANCE
RATE OUTSTANDING
DESCRIPTION MAXIMUM AT EXPIRATION AT
BORROWINGS 12/31/97 DATE 12/31/97
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<S> <C> <C> <C> <C>
Secured Fixed Rate Debt:
LaSalle Note I(1) $ 239,000 7.83% August 2027 $ 239,000
LaSalle Note II(2) 161,000 7.79% March 2028 161,000
CIGNA Note (3) 63,500 7.47% December 2002 63,500
Metropolitan Life Note II (4) 45,000 6.93% December 2002 45,000
Northwestern Life Note (5) 26,000 7.66% January 2003 26,000
Metropolitan Life Note I(6)(7) 12,109 8.88% September 2001 12,109
Nomura Funding VI Note(7)(8) 8,691 10.07% July 2020 8,692
Rigney Promissory Note (9) 800 8.50% November 2012 800
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Subtotal/Weighted Average $ 556,100 7.75% $ 556,101
========== ==== ==========
Secured Variable Rate Debt:
LaSalle Note III (7) (10) $ 115,000 8.07% July 1999 $ 115,000
Chase Manhattan Note (11) 97,123 7.44% September 2001 97,123
---------- ---- ----------
Subtotal/Weighted Average $ 212,123 7.78% $ 212,123
========== ==== ==========
Unsecured Fixed Rate Debt:
Notes due 2007 (12) $ 250,000 7.13% September 2007 $ 250,000
Notes due 2002 (12) 150,000 6.63% September 2002 150,000
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Subtotal/Weighted Average $ 400,000 6.94% $ 400,000
========== ==== ==========
Unsecured Variable Rate Debt:
Line of Credit (13) $ 550,000 7.14% June 2000 $ 350,000
BankBoston Bridge Loan(14) 150,000 7.14% March 1998(16) 91,900
BankBoston Note II (14) 100,000 7.14% August 1998 100,000
---------- ---- ----------
Subtotal/Weighted Average $ 800,000 7.14% $ 541,900
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TOTAL/WEIGHTED AVERAGE $1,968,223 7.37% $1,710,124
========== ==== ==========
</TABLE>
NOTES:
(1) The note has a seven-year period during which only interest is payable
(through August 2002), followed by principal amortization based on a
25-year amortization schedule through maturity. At the end of 12 years
(August 2007), the interest rate increases, and the Company is required to
remit, in addition to the monthly debt service payment, excess property
cash flow, as defined, to be applied first against principal until the note
is paid in full and thereafter, against accrued excess interest, as
defined. It is the Company's intention to repay the note in full at such
time (August 2007) by making a final payment of approximately $220 million.
LaSalle Note I is secured by Properties owned by Funding I (See Note 1 to
Item 8. Financial Statements and Supplementary Data). The note agreement
prohibits Funding I from engaging in certain activities, including
incurring liens on the Properties securing the note, pledging the
Properties securing the note, incurring other indebtedness (except as
specifically permitted in the note agreement), canceling a material claim
or debt owed to it, entering into an affiliate transaction (except as
specifically permitted in the note agreement), distributing funds derived
from operation of the Properties securing the note (except as specifically
permitted in the note agreement), or creating easements with respect to the
Properties securing the note.
(2) The note has a seven-year period during which only interest is payable
(through March 2003), followed by principal amortization based on a 25-year
amortization schedule through maturity. At the end of 10 years (March
2006), the interest rate increases, and the Company is required to remit,
in addition to the monthly debt service payment, excess property cash flow,
as defined, to be applied first against principal until the note is paid in
full and thereafter, against accrued excess interest, as defined. It is the
Company's intention to repay the note in full at such time (March 2006) by
making a final payment of approximately $154 million. LaSalle Note II is
secured by Properties owned by Funding II (See Note 1 to Item 8. Financial
Statements and Supplementary Data). The note agreement prohibits Funding II
from engaging in certain activities, including incurring liens on the
Properties securing the note, pledging the Properties securing the note,
incurring other indebtedness (except as specifically permitted in the note
agreement), canceling a material claim or debt owed to it, entering into an
affiliate transaction (except as specifically permitted in the note
agreement), distributing funds derived from operation of the Properties
securing the note (except as specifically permitted in the note agreement),
or creating easements with respect to the Properties securing the note.
(3) The note requires payments of interest only during its term. The CIGNA Note
is secured by the MCI Tower and Denver Marriott City Center properties. The
note agreement has no negative covenants.
(4) The note requires monthly payments of principal and interest based on a
25-year amortization schedule through maturity, at which time the
outstanding principal balance is due and payable. The Metropolitan Life
Note II is secured by Energy Centre. The note agreement requires the
Company to maintain compliance with a number of customary covenants,
including maintaining the Property that secures the note and not creating
any lien with respect to or otherwise encumbering such Property.
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(5) The note requires payments of interest only during its term. The
Northwestern Life Note is secured by the 301 Congress Avenue Property. The
note agreement requires the Company to maintain compliance with a number of
customary covenants, including maintaining the Property that secures the
note and not creating any lien with respect to or otherwise encumbering
such Property.
(6) The note requires monthly payments of principal and interest based on
20-year amortization schedule through maturity, at which time the
outstanding principal balance is due and payable. The Metropolitan Note I
is secured by five of The Woodlands Office Properties. The note agreement
has no negative covenants.
(7) The note was assumed in connection with an acquisition and was not
subsequently retired by the Company because of prepayment penalties.
(8) Under the terms of the note, principal and interest are payable based on a
25-year amortization schedule. In July 1998, the Company may defease the
note by purchasing Treasury obligations to pay the note without penalty.
The Nomura Funding VI Note is secured by Canyon Ranch-Lenox, the Property
owned by Funding VI (see Note 1 to Item 8. Financial Statements and
Supplementary Data). In July of 2010, the interest rate due under the note
will change to a 10-year Treasury yield plus 500 basis points or, if the
Company so elects, it may repay the note without penalty. The note
agreement requires Funding VI to maintain compliance with a number of
customary covenants, including a debt service coverage ratio for the
Property that secures the note, a restriction on the ability to transfer or
encumber the Property that secures the note, and covenants related to
maintaining its single purpose nature, including restrictions on ownership
by Funding VI of assets other than the Property that secures the note,
restrictions on the ability to incur indebtedness and make loans and
restrictions on operations.
(9) The note requires quarterly payments of principal and interest based on a
15-year amortization schedule through maturity, at which time the
outstanding principal balance is due and payable. The Rigney Promissory
Note is secured by a parcel of land owned by the Company and located across
from an Office Property. The note agreement has no negative covenants.
(10) The note bears interest at the rate for 30-day LIBOR plus a weighted
average rate of 2.135% (subject to a rate cap of 10%), and requires
payments of interest only during its term. The LaSalle Note III is secured
by the Properties owned by Funding III, IV, and V (see Note 1 to Item 8.
Financial Statements and Supplementary Data). The note agreement prohibits
Fundings III, IV and V from engaging in certain activities, including using
the Properties securing the note in certain ways, imposing any
restrictions, agreements or covenants that run with the land upon the
Properties securing the note, incurring additional indebtedness (except as
specifically permitted in the note agreement), canceling or releasing a
material claim or debt owed to it, or distributing funds derived from
operation of the Properties securing the note (except as specifically
permitted in the note agreement).
(11) The note bears interest at the rate for 30-day LIBOR plus 175 basis points
and requires payment of interest only during its term. The Chase Manhattan
Note is secured by Fountain Place. The note agreement has no negative
covenants.
(12) The notes are unsecured and require payments of interest only during their
terms. The interest rates on the notes are subject to temporary increase by
50 basis points in the event that a registered offer to exchange the notes
for the notes of the Company with terms identical in all material respects
to the notes is not consummated or a shelf registration statement with
respect to the resale of the notes is not declared effective by the
Commission on or before March 21, 1998. The interest rates on the notes
will increase by 50 basis points temporarily, since the exchange offer was
not completed by March 21, 1998. The Company anticipates that the interest
rates will return to the original rates during the second quarter of 1998.
The interest rates on the notes also is subject to temporary or permanent
increase by 37.5 basis points in the event that, within the period from
September 22, 1997 to September 22, 1998, such notes are not assigned, or
do not retain, an investment grade rating (as defined in the notes) by
specified rating agencies. These adjustments may apply simultaneously. The
indenture requires the Company to maintain compliance with a number of
customary financial and other covenants on an ongoing basis, including
leverage ratios and debt service coverage ratios, limitations on the
incurrence of additional indebtedness and maintaining the Company's
Properties.
(13) The Credit Facility is unsecured with an interest rate of the Eurodollar
rate plus 120 basis points. The Credit Facility requires the Company to
maintain compliance with a number of customary financial and other
covenants on an ongoing basis, including leverage ratios based on book
value and debt service coverage ratios, limitations on additional secured
and total indebtedness and distributions, limitations on additional
investments and the incurrence of additional liens, restrictions on real
estate development activity and a minimum net worth requirement.
(14) The note is unsecured with an interest rate of the Eurodollar rate plus 120
basis points. The note requires payments of the interest only during its
term. The note agreement has no negative covenants.
(15) The maximum borrowings under the BankBoston Bridge Loan were increased to
$250 million subsequent to December 31, 1997.
(16) The Company has a commitment with BankBoston to extend the term to May 31,
1998 with the same interest rate.
The combined aggregate principal amounts either at maturity or in the
form of scheduled principal installments due pursuant to borrowings under the
Credit Facility and other indebtedness of the Company are as follows:
<TABLE>
<CAPTION>
(In thousands)
<S> <C>
1998.................................................... $193,038
1999.................................................... 116,223
2000.................................................... 351,322
2001.................................................... 109,149
2002.................................................... 215,619
Thereafter.............................................. 724,773
</TABLE>
Based on the Company's total market capitalization of $6.9 billion at
December 31, 1997 (at a $39.375 share price, which was the closing price of the
common share on the NYSE on December 31, 1997, and including the full conversion
of all units of minority interest in the Operating Partnership plus total
indebtedness), the Company's debt represented 25% of its total market
capitalization. The Company intends to maintain a flexible and conservative
capital structure with total debt targeted at approximately 40% of total market
capitalization.
7
<PAGE> 10
The Company intends to maintain its qualification as a REIT under the Code.
As a REIT, the Company will generally not be subject to corporate federal income
taxes as long as it satisfies certain technical requirements of the Code,
including the requirement to distribute at least 95% of its taxable income to
its shareholders.
The Company expects to meet its short-term liquidity requirements primarily
through cash flow provided by operating activities, which the Company believes
will be adequate to fund normal recurring operating expenses, debt service
requirements, recurring capital expenditures and distributions to shareholders
and unitholders. To the extent the Company's cash flow from operating activities
is not sufficient to finance non-recurring capital expenditures or investment
property acquisition costs, the Company expects to finance such activities with
proceeds from the Credit Facility, available cash reserves and other debt and
equity financing.
The Company expects to meet its long-term liquidity requirements,
consisting primarily of maturities under the Company's fixed and variable rate
debt, through long-term secured and unsecured borrowings and the issuance of
debt securities and/or additional equity securities of the Company.
FUNDS FROM OPERATIONS
Funds from Operations ("FFO"), based on the definition adopted by the
Board of Governors of the National Association of Real Estate Investment Trusts
("NAREIT") and as used herein, means net income (loss) (determined in accordance
with generally accepted accounting principles or "GAAP"), excluding gains (or
losses) from debt restructuring and sales of property, plus depreciation and
amortization of real estate assets, and after adjustments for unconsolidated
partnerships and joint ventures. FFO was developed by NAREIT as a relative
measure of performance and liquidity of an equity REIT in order to recognize
that income-producing real estate historically has not depreciated on the basis
determined under GAAP. The Company considers FFO an appropriate measure of
performance of an equity REIT. However, FFO (i) does not represent cash
generated from operating activities determined in accordance with GAAP (which,
unlike FFO, generally reflects all cash effects of transactions and other events
that enter into the determination of net income), (ii) is not necessarily
indicative of cash flow available to fund cash needs, and (iii) should not be
considered as an alternative to net income determined in accordance with GAAP as
an indication of the Company's operating performance, or to cash flow from
operating activities determined in accordance with GAAP as a measure of either
liquidity or the Company's ability to make distributions. The Company has
historically distributed an amount less than FFO, primarily due to reserves
required for capital expenditures, including leasing costs. The aggregate cash
distributions paid to shareholders and unitholders for the years ended December
31, 1997 and 1996 were $140.8 and $73.4 million, respectively. An increase in
FFO does not necessarily result in an increase in aggregate distributions
because the Company's board of trustees is not required to increase
distributions on a quarterly basis unless necessary in order to enable the
Company to maintain REIT status. However, the Company must distribute 95% of its
real estate investment trust taxable income (as defined in the Code), therefore,
a significant increase in FFO will generally require an increase in
distributions to shareholders and unitholders although not necessarily on a
proportionate basis. Accordingly, the Company believes that in order to
facilitate a clear understanding of the consolidated historical operating
results of the Company, FFO should be considered in conjunction with the
Company's net income (loss) and cash flows as reported in the consolidated
financial statements and notes thereto. However, the Company's measure of FFO
may not be comparable to similarly titled measures of other REIT's because these
REIT's may not apply the definition of FFO in the same manner as the Company.
8
<PAGE> 11
STATEMENTS OF FUNDS FROM OPERATIONS
(dollars in thousands)
<TABLE>
<CAPTION>
Years Ended December 31
----------------------------
1997 1996
--------- --------
<S> <C> <C>
Income before minority interest and extraordinary item $ 135,024 $ 47,951
Adjustments:
Depreciation and amortization of real estate assets 72,503 39,290
Adjustment for investments in real estate mortgages
and equity of unconsolidated companies 8,303 1,857
Minority interest in joint ventures (1,434) (1,482)
--------- --------
Funds from operations $ 214,396 $ 87,616
========= ========
</TABLE>
RECONCILIATION OF FUNDS FROM OPERATIONS TO NET CASH PROVIDED
BY OPERATING ACTIVITIES
(dollars in thousands)
<TABLE>
<CAPTION>
Years Ended December 31
----------------------------
1997 1996
--------- --------
<S> <C> <C>
Funds from operations $ 214,396 $ 87,616
Depreciation and amortization of
non-real estate assets 1,235 835
Amortization of deferred financing costs 3,499 2,812
Minority interest in joint ventures
profit and depreciation and amortization 2,122 1,892
Adjustment for investments in real
estate mortgages and equity of
unconsolidated companies (8,303) (1,857)
Change in deferred rent receivable (23,371) (6,210)
Change in current assets and liabilities 34,500 (7,493)
Equity in earnings in excess of
distributions received from
unconsolidated companies (12,536) (322)
Non-cash compensation 172 111
--------- --------
Net cash provided by operating activities $ 211,714 $ 77,384
========= ========
</TABLE>
LEASING
The Company applies a well-defined leasing strategy in order to capture
the potential rental growth in the Company's existing portfolio of Office
Properties as occupancy and rental rates increase with the recovery of the
markets and the submarkets in which the Company has invested. The Company's
strategy is based in part on identifying, and then investing in, submarkets in
which weighted average full-service rental rates (representing base rent after
giving effect to free rent and scheduled rent increases that would be taken into
account under generally accepted accounting principles ("GAAP") and including
adjustments for expenses payable by or reimbursed from tenants) are
significantly less than weighted average full-service replacement cost rental
rates (the rate estimated by management to be necessary to provide a return to a
developer of a comparable, multi-tenant building sufficient to justify
construction of new buildings) in that submarket. In calculating replacement
cost rental rates, management relies on available third party data and its own
estimates of construction costs (including materials and labor in a particular
market) and assumes replacement cost rental rates are achieved at a 95%
occupancy level. The Company believes that the difference between the two rates
is a useful measure of the additional revenue that the Company may be able to
obtain from a property, because the difference should represent the amount by
which rental rates would have to increase before construction of properties that
would compete with the Company's Office Properties would cause the Company to
risk losing tenants to construction of new buildings. For the Company's Office
Properties, inclusive of acquisitions completed through March 25, 1998, the
weighted average full-service rental rate as of December 31, 1997 was $18.12 per
square foot compared to an estimated weighted average full-service replacement
cost rental rate of $28.33 per square foot. Many of the Company's submarkets
have experienced substantial rental rate growth during the past two years. For
example, Class A office rental rates in Dallas, Houston, Austin and Denver have
increased by approximately 30%, 18%, 19% and 15%, respectively, from 1995 to
1997, according to Jamison Research, Inc. in the case of Dallas;
9
<PAGE> 12
Baca Landata, Inc., The Woodlands Operating Company, LP and Cushman & Wakefield
of Texas, Inc. in the case of Houston; CB Commercial in the case of Austin; and
Cushman & Wakefield of Colorado, Inc. in the case of Denver. As a result, the
Company has been successful in renewing or re-leasing office space in these
markets at rental rates significantly above the expiring rental rates. For the
year ended December 31, 1997, leases were signed renewing or re-leasing
1,585,769 net rentable square feet of office space at a weighted average
full-service rental rate and an annual net effective rate (calculated as
weighted average full-service rental rate minus operating expenses) of $19.42
and $12.43 per square foot, respectively, compared to expiring leases with a
weighted average full-service rental rate and an annual net effective rate of
$15.96 and $8.94 per square foot, respectively. This represents increases in the
weighted average full-service rental rate and in the annual net effective rate
of 22% and 39%, respectively.
OPERATING INFORMATION
The following table presents on an aggregate basis, for the years
ended December 31, 1997 and 1996, the EBIDA and occupancy rates of the Office
and Retail Properties owned as of January 1, 1996 on a stabilized (occupancy
rate of 90% or more) and unstabilized (occupancy rate of less than 90%) basis.
<TABLE>
<CAPTION>
Net EBIDA (1)
Number Rentable (in millions) % Occupied
of Area -------------------------- --------------------
Properties (in millions) 1997 1996 1997 1996
---------- ------------- ------------ ---------- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Stabilized(3).. 27 5.9 $ 75.4 $ 71.7 96% 96%
Unstabilized .. 6 3.1 $ 21.2 $ 19.0 72%(2) 74%
</TABLE>
(1) "EBIDA" consists of operating income plus interest, depreciation and
amortization. The Company believes that in addition to cash flows and net
income, EBIDA is a useful financial performance measurement for assessing
the operating performance of the Office and Retail Properties. Together
with net income and cash flows, EBIDA provides investors with an additional
basis to evaluate the ability of the Company to incur and service debt and
to fund acquisitions and other capital expenditures. To evaluate EBIDA and
the trends it depicts, the components of EBIDA, such as rental revenues,
rental expenses, real estate taxes and general administrative expenses,
should be considered. Excluded from EBIDA are financing costs such as
interest as well as depreciation and amortization, each of which can
significantly affect the Company's results of operations and liquidity and
should be considered in evaluating the Company's operating performance.
Further, EBIDA does not represent net income or cash flows from operating,
financing and investing activities as defined by generally accepted
accounting principals ("GAAP") and does not necessarily indicate that cash
flows will be sufficient to fund cash needs. It should not be considered as
an alternative to net income as an indicator of the Company's operating
performance or to cash flows as a measure of liquidity.
(2) Leases have been executed at certain of "unstabilized" properties but had
not commenced as of December 31, 1997. If such leases had commenced as of
December 31, 1997, the percent leased for the "unstabilized" properties
would have been 96%.
(3) Properties owned as of January 1, 1996, with occupancies equal to 90% or
more, in 1997 and 1996.
HISTORICAL RECURRING OFFICE AND RETAIL PROPERTY
CAPITAL EXPENDITURES, TENANT IMPROVEMENT AND LEASING COSTS
The following table sets forth annual and per square foot recurring
capital expenditures (excluding those expenditures which are recoverable from
tenants) and tenant improvement and leasing costs for the years ended December
31, 1996 and 1997, attributable to signed leases, all of which have commenced or
will commence during the next twelve months (i.e., the renewal or replacement
tenant began or will begin to pay rent) for the Office and Retail Properties
consolidated in the Company's financial statements during each of the periods
presented. Tenant improvement and leasing costs for signed leases during a
particular period do not equal the cash paid for tenant improvement and leasing
costs during such period, due to timing of payments.
10
<PAGE> 13
<TABLE>
<CAPTION>
1996 1997
-------- ----------
<S> <C> <C>
CAPITAL EXPENDITURES:
Capital Expenditures (in thousands) ... $ 1,214 $ 3,310
Per square foot ....................... $ .13 $ .15
TENANT IMPROVEMENT AND LEASING COSTS:(1)
Replacement Tenant Square Feet ........ 390,945 584,116
Renewal Tenant Square Feet ............ 248,603 1,001,653
Tenant Improvement Costs (in thousands) $ 6,263 $ 10,958
Per square foot leased ................ $ 9.79 $ 6.91
Tenant Leasing Costs (in thousands) ... $ 2,877 $ 6,601
Per square foot leased ................ $ 4.50 $ 4.16
Total (in thousands) .................. $ 9,140 $ 17,559
Total per square foot ........... $ 14.29 $ 11.07
Average lease term .............. 5.3 years 6.4 years
Total per square foot per year .. $ 2.38 $ 1.73
</TABLE>
(1) Excludes leasing activity for leases that have less than a one-year term
(i.e., storage and temporary space).
Capital expenditures may fluctuate in any given period subject to the
nature, extent, and timing of improvements required to be made in the Company's
Property portfolio. The Company maintains an active preventive maintenance
program in order to minimize required capital improvements. In addition, capital
improvement costs are recoverable from tenants in many instances.
Tenant improvement and leasing costs also may fluctuate in any given
year depending upon factors such as the property, the term of the lease, the
type of lease (renewal or replacement tenant), the involvement of external
leasing agents and overall competitive market conditions. Management believes
that future recurring tenant improvements and leasing costs for the Company's
existing Office Properties will approximate on average for "renewal tenants"
$6.00 to $8.00 per square foot, or $1.20 to $1.60 per square foot per year based
on an average five-year lease term, and, on average for "replacement tenants",
$12.00 to $14.00 per square foot, or $2.40 to $2.80 per square foot per year
based on an average five-year lease term.
YEAR 2000 COMPLIANCE
The Company has reviewed its in-house computer software programs and
operating systems, which consist primarily of the accounting and property
management systems, to assess the impact of the Year 2000 on these systems.
These programs and systems are Year 2000 compliant.
Based on present information, the Company believes that it will be able
to achieve Year 2000 compliance for its property-specific computer systems, such
as energy management and security access systems, through a combination of the
modification and replacement of systems within its Office Property portfolio.
The Company anticipates that the costs associated with achieving Year 2000
compliance will not have a material impact on the Company's financial results.
The implementation will take place over the next 12 to 18 months with the
assistance of full-time employees and independent contractors.
11
<PAGE> 14
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) Financial Statements. The following financial statements are filed as
part of this report.
Report of Independent Public Accountants
Crescent Real Estate Equities Company Consolidated Balance Sheets at
December 31, 1997 and 1996.
Crescent Real Estate Equities Company Consolidated Statements of
Operations for the years ended December 31, 1997, 1996 and 1995.
Crescent Real Estate Equities Company Consolidated Statements of
Shareholders' Equity for the years ended December 31, 1997, 1996 and
1995.
Crescent Real Estate Equities Company Consolidated Statements of Cash
Flows for the years ended December 31, 1997, 1996 and 1995.
Crescent Real Estate Equities Company Notes to Financial Statements.
Financial Statement Schedules. The financial statement schedules listed
in Item 14(d) below are filed as part of this report.
Exhibits. The exhibits listed in Item 14(c) below are filed as part of
this report.
(b) Reports on Form 8-K
Form 8-K dated September 30, 1997 and filed October 1, 1997, for the
purpose of (i) announcing, under Item 5 - Other Events, the Company's
underwritten public offering of 8,500,000 common shares and (ii)
filing, under Item 7 - Financial Statements, Pro Forma Financial
Information and Exhibits, the Pro Forma Consolidated Balance Sheet of
the Company as of June 30, 1997 (unaudited) and notes thereto, and the
Pro Forma Consolidated Statements of Operations of the Company for the
six months ended June 30, 1997 and the year ended December 31, 1996
(unaudited) and notes thereto.
Form 8-K/A filed October 1, 1997, to the Form 8-Ks dated June 20, 1997
and filed September 30, 1997, dated September 22, 1997 and filed
September 30, 1997, and dated and filed September 30, 1997, for the
purpose of including in such reports, under Item 7 - Financial
Statements, Pro Forma Financial Information and Exhibits, the Pro Forma
Consolidated Balance Sheet of the Company as of June 30, 1997
(unaudited) and notes thereto, and the Pro Forma Consolidated
Statements of Operation of the Company for the six months ended June
30, 1997 and the year ended December 31, 1996 (unaudited) and notes
thereto.
Form 8-K/A filed October 9, 1997, to the Form 8-K dated September 30,
1997 and filed October 1, 1997, for the purpose of (i) reflecting,
under Item 5 - Other Events, changes in the amount and price of the
Company's underwritten public offering of 10,000,000 common shares and
(ii) filing, under Item 7 - Financial Statements, Pro Forma Financial
Information and Exhibits, a revised Pro Forma Consolidated Balance
Sheet of the Company as of June 30, 1997 (unaudited) and notes thereto,
and a revised Pro Forma Consolidated Statements of Operations of the
Company for the six months ended June 30, 1997 and the year ended
December 31, 1996 (unaudited) and notes thereto.
12
<PAGE> 15
Form 8-K dated October 8, 1997 and filed October 14, 1997, for the
purpose of filing, under Item 7 - Financial Statements, Pro Forma
Financial Information and Exhibits, certain exhibits in connection with
the Company's underwritten public offering of 10,000,000 common shares.
Form 8-K dated September 28, 1997 and filed October 27, 1997, for the
purpose of announcing, under Item 5 - Other Events, the Company's
Refrigerated Warehouse Investment.
Form 8-K dated October 22, 1997 and filed October 28, 1997, for the
purpose of (i) announcing, under Item 5 - Other Events, the Company's
acquisition of Bank One Center, and (ii) filing, under Item 7 -
Financial Statements, Pro Forma Financial Information and Exhibits, the
Report of Independent Public Accountants, with respect to Bank One
Center, the Statements of Excess of Revenues Over Specific Operating
Expenses for the year ended December 31, 1996 and the eight month
period ended August 31, 1997 and notes thereto, the Pro Forma
Consolidated Balance Sheet as of June 30, 1997 (unaudited) and notes
thereto, and the Pro Forma Consolidated Statements of Operation for the
six months ended June 30, 1997 and the year ended December 31, 1996
(unaudited) and notes thereto.
Form 8-K/A filed November 25, 1997, to the Form 8-K dated September 28,
1997 and filed October 27, 1997, updating, under Item 5 - Other Events,
certain information relating to the Company's Refrigerated Warehouse
Investment.
Form 8-K dated December 12, 1997 and filed December 18, 1997, for the
purpose of filing, under Item 7 - Financial Statements, Pro Forma
Financial Information and Exhibits, certain exhibits in connection with
the Company's public offering of 5,375,000 common shares to Merrill
Lynch International.
Form 8-K/A filed December 19, 1997, to the Form 8-K dated December 12,
1997 and filed December 18, 1997, for the purpose of filing, under Item
7 - Financial Statements, Pro Forma Financial Information and Exhibits,
certain revised exhibits in connection with the Company's public
offering of 5,375,000 common shares to Merrill Lynch International.
(c) The following exhibits are filed as part of this report.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
<S> <C>
*2.01 Agreement and Plan of Merger, dated as of January 16, 1998, as
amended, by and between Crescent Real Estate Equities Company
and Station Casinos, Inc.
3.03 Restated Declaration of Trust of Crescent Real Estate Equities
Company (filed as Exhibit No. 4.01 to the Registrant's
Registration Statement on Form S-3 (File No. 333-21905) (the
"1997 S-3") and incorporated herein by reference)
3.04 Amended and Restated Bylaws of Crescent Real Estate Equities
Company, as amended (filed herewith)
4.02 Registration Rights Agreement, dated February 16, 1996, by and
among the Registrant, Crescent Real Estate Equities Limited
Partnership and certain of the limited partners of Crescent Real
Estate Equities Limited Partnership named therein (filed as
Exhibit No. 4.02 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996 (the "1996 10-K")
and incorporated herein by reference)
4.03 Registration Rights Agreement, dated January 20, 1997, by and
among the Registrant, Crescent Real Estate Equities Limited
Partnership and certain of the limited partners of Crescent Real
Estate Equities Limited Partnership named therein (filed as
Exhibit No. 4.03 to the 1996 10-K and incorporated herein by
reference)
4.04 Form of Registration Agreement relating to the acquisition of
the Greenway Plaza Portfolio (filed as Exhibit No. 4.01 to the
Registrant's Current Report on Form 8-K dated and filed
September 27, 1996 (the "1996 8-K") and incorporated herein by
reference)
4.05 Registration Rights Agreement, dated as of June 26, 1996,
relating to Canyon Ranch-Tucson (filed as Exhibit No. 4.02 to
the 1996 8-K and incorporated herein by reference)
</TABLE>
13
<PAGE> 16
<TABLE>
<S> <C>
4.06 Form of Common Share Certificate (filed as Exhibit No. 4.03 to
the 1997 S-3 and incorporated herein by reference)
*4.07 Statement of Designation of 6-3/4% Series A Convertible
Cumulative Preferred Shares of Crescent Real Estate Equities
Company
4.08 Form of Certificate of 6-3/4% Series A Convertible Cumulative
Preferred Shares of Crescent Real Estate Equities Company (filed
as Exhibit No. 4 to the Registrant's Registration Statement on
Form 8-A/A filed on February 18, 1998 and incorporated by
reference)
4.09 Indenture, dated as of September 22, 1997, between Crescent Real
Estate Equities Limited Partnership and State Street Bank and
Trust Company, of Missouri, N.A. (filed as Exhibit No. 4.01 to
the Registration Statement on Form S-4 (File No. 333-42293) of
Crescent Real Estate Equities Limited Partnership (the "Form
S-4") and incorporated herein by reference)
4.10 Form of 6-5/8% Note due 2002 (filed as Exhibit No. 4.04 to the
Form S-4 and incorporated herein by reference)
4.11 Form of 7-1/8% Note due 2007 (filed as Exhibit No. 4.05 to the
Form S-4 and incorporated herein by reference)
4.12 Registration Rights Agreement, dated as of September 22, 1997,
among Crescent Real Estate Equities Limited Partnership, Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Salomon Brothers Inc. (filed as Exhibit No. 4.06 to the Form
S-4 and incorporated herein by reference)
4.13 Purchase Agreement, dated as of August 11, 1997, between
Crescent Real Estate Equities Company, UBS Securities
(Portfolio), LLC, and Union Bank of Switzerland, London Branch
(filed as Exhibit No. 4.01 to the Registrant's Current Report on
Form 8-K dated August 11, 1997 and filed August 13, 1997 and
incorporated herein by reference)
4.14 Purchase Agreement, effective as of December 12, 1997, among
Crescent Real Estate Equities Company, Crescent Real Estate
Equities Limited Partnership, Merrill Lynch International and
Merrill Lynch, Pierce, Fenner & Smith Incorporated (filed as
Exhibit No. 1.01 to the Registrant's Current Report on Form 8-K/A
dated December 12, 1997 and filed December 19, 1997 and
incorporated herein by reference)
</TABLE>
14
<PAGE> 17
<TABLE>
<S> <C>
4.15 Swap Agreement, effective as of December 12, 1997, between
Crescent Real Estate Equities Company and Merrill Lynch
International (filed as Exhibit No. 1.02 to the Registrant's
Current Report on Form 8-K dated December 12, 1997 and filed
December 18, 1997 and incorporated herein by reference)
4.16 Registration Rights Agreement, dated as of March 2, 1998, among
Crescent Real Estate Equities Company, Crescent Real Estate
Equities Limited Partnership and certain limited partners of
Crescent Real Estate Equities Limited Partnership (filed as
Exhibit No. 4.05 to the Registrant's Registration Statement on
Form S-3 (File No. 333-47563) and incorporated herein by
reference).
10.01 Second Amended and Restated Agreement of Limited Partnership of
Crescent Real Estate Equities Limited Partnership, dated as of
November 1, 1997, as amended (filed as Exhibit No. 4.06 to the
Registrant's Registration Statement on Form S-3 (File No.
333-41049) and incorporated herein by reference)
*10.02 Noncompetition Agreement of Richard E. Rainwater as assigned to
Crescent Real Estate Equities Limited Partnership on May 5, 1994
*10.03 Noncompetition Agreement of John C. Goff, as assigned to
Crescent Real Estate Equities Limited Partnership on May 5, 1994
*10.04 Noncompetition Agreement of Gerald W. Haddock, as assigned to
Crescent Real Estate Equities Limited Partnership on May 5, 1994
*10.05 Employment Agreement of John C. Goff, as assigned to Crescent
Real Estate Equities Limited Partnership on May 5, 1994, and as
further amended
*10.06 Employment Agreement of Gerald W. Haddock, as assigned to
Crescent Real Estate Equities Limited Partnership on May 5, 1994,
and as further amended
10.07 Form of Registration Rights, Lock-Up and Pledge Agreement (filed
as Exhibit No. 10.05 to the 1994 S-11 and incorporated herein by
reference)
10.08 Form of Officers' and Trust Managers' Indemnification Agreement
as entered into between the Registrant and each of its executive
officers and trust managers (filed as Exhibit No. 10.07 to the
Form S-4 and incorporated herein by reference)
10.09 Crescent Real Estate Equities Company 1994 Stock Incentive Plan
(filed as Exhibit No. 10.07 to the 1994 S-11 and incorporated
herein by reference)
*10.10 Crescent Real Estate Equities, Ltd. First Amended and Restated
401(k) Plan
</TABLE>
15
<PAGE> 18
<TABLE>
<S> <C>
10.11 Agreement, dated as of August 15, 1996, relating to the
acquisition of the Greenway Plaza Portfolio (filed as Exhibit
No. 10.02 to the 1996 8-K and previously incorporated by
reference but no longer incorporated herein by reference)
10.12 Form of Amended and Restated Lease Agreement, dated January 1,
1996, among Crescent Real Estate Equities Limited Partnership,
Mogul Management, LLC and RoseStar Management, LLC, relating to
the Hyatt Regency Beaver Creek (filed as Exhibit No. 10.12 to
the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 (the "1995 10-K") and previously
incorporated by reference but no longer incorporated herein by
reference)
10.13 Real Estate Purchase and Sale Agreement, dated as of January 29,
1997, between Crescent Real Estate Equities Limited Partnership,
as purchaser, and Magellan Health Services, Inc., as seller,
relating to the acquisition of 92 behavioral healthcare
facilities (the "Behavioral Healthcare Facilities"), as amended
effective February 28, 1997 and May 29, 1997 (filed as Exhibit
No. 10.13 to the Company's Quarterly Report on Form 10-Q/A for
the quarter ended June 30, 1997 (the "1997 10-Q") and
incorporated herein by reference)
10.15 Second Amended and Restated 1995 Crescent Real Estate Equities
Company Stock Incentive Plan (filed as Exhibit No. 10.13 to the Form
S-4 and incorporated herein by reference)
10.16 Lease Agreement, dated December 19, 1995 between Crescent Real
Estate Equities Limited Partnership and RoseStar Management,
LLC, relating to the Hyatt Regency Albuquerque (filed as Exhibit
No. 10.16 to the 1995 10-K and previously incorporated by
reference but no longer incorporated herein by reference)
10.17 Amended and Restated Lease Agreement, dated June 30, 1995
between Crescent Real Estate Equities Limited Partnership and
RoseStar Management, LLC, relating to the Denver Marriott (filed
as Exhibit No. 10.17 to the 1995 10-K and previously
incorporated by reference but no longer incorporated herein by
reference)
10.18 Loan Agreement, dated August 24, 1995, including Form of Deed of
Trust, Assignment of Rents, Security Agreement and Fixture
Filing, and Amendment to Loan Agreement, dated October 19, 1995,
between Crescent Real Estate Funding I, L.P. and Nomura Asset
Capital Corporation (filed as Exhibit No. 10.15 to the 1995 10-K and
previously incorporated by reference but no longer incorporated
herein by reference)
</TABLE>
16
<PAGE> 19
<TABLE>
<S> <C>
10.19 Loan Agreement, dated August 24, 1995, including Form of Deed of
Trust, Assignment of Rents, Security Agreement and Fixture
Filing, between Crescent Real Estate Funding II, L.P. and Nomura
Asset Capital Corporation (filed as Exhibit No. 10.19 to the 1995
10-K and previously incorporated by reference but no longer
incorporated herein by reference)
10.20 Mortgage Loan Application and Agreement, dated October 3, 1995,
as amended by letter agreements dated October 10, 1995 and
October 30, 1995, between Crescent Real Estate Equities Limited
Partnership and CIGNA Investments, Inc., and Secured Promissory
Note dated December 11, 1995 (filed as Exhibit No. 10.20 to the 1995
10-K and previously incorporated herein by reference but no
longer incorporated herein by reference)
10.21 Fourth Amended and Restated Revolving Credit Facility, dated
December 19, 1997, among Crescent Real Estate Equities Limited
Partnership, BankBoston, N.A. and the other banks named therein
(filed as Exhibit No. 10.25 to the Form S-4 and incorporated herein
by reference)
10.22 1995 Crescent Real Estate Equities Limited Partnership Unit
Incentive Plan (filed as Exhibit No. 99.01 to the Registrant's
Registration Statement on Form S-8 (File No. 333-3452) and
incorporated herein by reference)
10.23 1996 Crescent Real Estate Equities Limited Partnership Unit
Incentive Plan (filed as Exhibit No. 10.01 to the 1996 8-K and
incorporated herein by reference)
10.24 Lease Agreement, dated July 26, 1996, between Canyon Ranch, Inc,
and Canyon Ranch Leasing, L.L.C., assigned by Canyon Ranch, Inc.
to Crescent Real Estate Equities Limited Partnership pursuant to
the Assignment and Assumption Agreement of Master Lease, dated
July 26, 1996 (filed as Exhibit No. 10.24 to the 1997 10-Q and
previously incorporated by reference but no longer incorporated
herein by reference)
10.25 Lease Agreement, dated November 18, 1996, between Crescent Real
Estate Equities Limited Partnership and Wine Country Hotel,
L.L.C. (filed as Exhibit No. 10.25 to the 1996 10-K and previously
incorporated by reference but no longer incorporated herein by
reference)
10.26 Lease Agreement, dated December 11, 1996, between Canyon
Ranch-Bellefontaine Associates, L.P. and Vintage Resorts,
L.L.C., as assigned by Canyon Ranch-Bellefontaine Associates,
L.P. to Crescent Real Estate Funding VI, L.P. pursuant to the
Assignment and Assumption Agreement of Master Lease, dated
December 11, 1996 (filed as Exhibit No. 10.26 to the 1997 10-Q and
previously incorporated by reference but no longer incorporated
herein by reference)
</TABLE>
17
<PAGE> 20
<TABLE>
<S> <C>
*10.27 Master Lease Agreement, dated June 16, 1997, as amended, between
Crescent Real Estate Funding VII, L.P. and Charter Behavioral
Health Systems, LLC and its subsidiaries, relating to the
Behavioral Healthcare Facilities
10.28 Intercompany Agreement, dated June 3, 1997, between Crescent
Real Estate Equities Limited Partnership and Crescent Operating,
Inc. (filed as Exhibit No. 10.2 to the Registration Statement on
Form S-1 (File No. 333-25223) of Crescent Operating, Inc. and
incorporated herein by reference)
*12.01 Statement Regarding Computation of Ratios of Earnings to Fixed
Charges and Preferred Shares Dividends
*21.01 List of Subsidiaries
*23.01 Consent of Arthur Andersen LLP
27.01 Financial Data Schedule (filed herewith)
*27.02 Restated Financial Data Schedule for the three months ended
March 31, 1996 reflecting the effect of FASB #128, Earnings Per
Share
*27.03 Restated Financial Data Schedule for the six months ended June
30, 1996 reflecting the effect of FASB #128, Earnings Per Share
*27.04 Restated Financial Data Schedule for the nine months ended
September 30, 1996 reflecting the effect of FASB #128, Earnings
Per Share
*27.05 Restated Financial Data Schedule for the year ended December 31,
1996 reflecting the effect of FASB #128, Earnings Per Share
*27.06 Restated Financial Data Schedule for the three months ended March
31, 1997 reflecting the effect of FASB #128, Earnings Per Share
*27.07 Restated Financial Data Schedule for the six months ended June
30, 1997 reflecting the effect of FASB #128, Earnings Per Share
*27.08 Restated Financial Data Schedule for the nine months ended
September 30, 1997 reflecting the effect of FASB #128, Earnings
Per Share
</TABLE>
(d) Financial Statement Schedules.
The following financial statement schedules are filed as part of this
report.
Schedule III - Crescent Real Estate Equities Company Consolidated Real
Estate Investments and Accumulated Depreciation at December 31, 1997.
All other schedules have been omitted either because they are not
applicable or because the required information has been disclosed in
the Financial Statements and related notes included in the consolidated
and combined statements.
- ------------------------------
* Previously filed as part of the Registrant's Form 10-K for the year ended
December 31, 1997.
18
<PAGE> 21
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized, on the 14th day of
May, 1998.
CRESCENT REAL ESTATE EQUITIES COMPANY
(Registrant)
By /s/ GERALD W. HADDOCK
-------------------------------------
Gerald W. Haddock
President and Chief Executive Officer
By: /s/ DALLAS E. LUCAS
-------------------------------------
Dallas E. Lucas
Senior Vice President,
Chief Financial and
Accounting Officer
19
<PAGE> 22
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------- ----------------------
<S> <C>
*2.01 Agreement and Plan of Merger, dated as of January 16, 1998, as
amended, by and between Crescent Real Estate Equities Company
and Station Casinos, Inc.
3.03 Restated Declaration of Trust of Crescent Real Estate Equities
Company (filed as Exhibit No. 4.01 to the Registrant's
Registration Statement on Form S-3 (File No. 333-21905) (the
"1997 S-3") and incorporated herein by reference)
3.04 Amended and Restated Bylaws of Crescent Real Estate Equities
Company, as amended (filed herewith)
4.02 Registration Rights Agreement, dated February 16, 1996, by and
among the Registrant, Crescent Real Estate Equities Limited
Partnership and certain of the limited partners of Crescent Real
Estate Equities Limited Partnership named therein (filed as
Exhibit No. 4.02 to the Registrant's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996 (the "1996 10-K")
and incorporated herein by reference)
4.03 Registration Rights Agreement, dated January 20, 1997, by and
among the Registrant, Crescent Real Estate Equities Limited
Partnership and certain of the limited partners of Crescent Real
Estate Equities Limited Partnership named therein (filed as
Exhibit No. 4.03 to the 1996 10-K and incorporated herein by
reference)
4.04 Form of Registration Agreement relating to the acquisition of
the Greenway Plaza Portfolio (filed as Exhibit No. 4.01 to the
Registrant's Current Report on Form 8-K dated and filed
September 27, 1996 (the "1996 8-K") and incorporated herein by
reference)
4.05 Registration Rights Agreement, dated as of June 26, 1996,
relating to Canyon Ranch-Tucson (filed as Exhibit No. 4.02 to
the 1996 8-K and incorporated herein by reference)
</TABLE>
<PAGE> 23
<TABLE>
<S> <C>
4.06 Form of Common Share Certificate (filed as Exhibit No. 4.03 to
the 1997 S-3 and incorporated herein by reference)
*4.07 Statement of Designation of 6-3/4% Series A Convertible
Cumulative Preferred Shares of Crescent Real Estate Equities
Company
4.08 Form of Certificate of 6-3/4% Series A Convertible Cumulative
Preferred Shares of Crescent Real Estate Equities Company (filed
as Exhibit No. 4 to the Registrant's Registration Statement on
Form 8-A/A filed on February 18, 1998 and incorporated by
reference)
4.09 Indenture, dated as of September 22, 1997, between Crescent Real
Estate Equities Limited Partnership and State Street Bank and
Trust Company, of Missouri, N.A. (filed as Exhibit No. 4.01 to
the Registration Statement on Form S-4 (File No. 333-42293) of
Crescent Real Estate Equities Limited Partnership (the "Form
S-4") and incorporated herein by reference)
4.10 Form of 6-5/8% Note due 2002 (filed as Exhibit No. 4.04 to the
Form S-4 and incorporated herein by reference)
4.11 Form of 7-1/8% Note due 2007 (filed as Exhibit No. 4.05 to the
Form S-4 and incorporated herein by reference)
4.12 Registration Rights Agreement, dated as of September 22, 1997,
among Crescent Real Estate Equities Limited Partnership, Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Salomon Brothers Inc. (filed as Exhibit No. 4.06 to the Form
S-4 and incorporated herein by reference)
4.13 Purchase Agreement, dated as of August 11, 1997, between
Crescent Real Estate Equities Company, UBS Securities
(Portfolio), LLC, and Union Bank of Switzerland, London Branch
(filed as Exhibit No. 4.01 to the Registrant's Current Report on
Form 8-K dated August 11, 1997 and filed August 13, 1997 and
incorporated herein by reference)
4.14 Purchase Agreement, effective as of December 12, 1997, among
Crescent Real Estate Equities Company, Crescent Real Estate
Equities Limited Partnership, Merrill Lynch International and
Merrill Lynch, Pierce, Fenner & Smith Incorporated (filed as
Exhibit No. 1.01 to the Registrant's Current Report on Form 8-K/A
dated December 12, 1997 and filed December 19, 1997 and
incorporated herein by reference)
</TABLE>
<PAGE> 24
<TABLE>
<S> <C>
4.15 Swap Agreement, effective as of December 12, 1997, between
Crescent Real Estate Equities Company and Merrill Lynch
International (filed as Exhibit No. 1.02 to the Registrant's
Current Report on Form 8-K dated December 12, 1997 and filed
December 18, 1997 and incorporated herein by reference)
4.16 Registration Rights Agreement, dated as of March 2, 1998, among
Crescent Real Estate Equities Company, Crescent Real Estate
Equities Limited Partnership and certain limited partners of
Crescent Real Estate Equities Limited Partnership (filed as
Exhibit No. 4.05 to the Registrant's Registration Statement on
Form S-3 (File No. 333-47563) and incorporated herein by
reference).
10.01 Second Amended and Restated Agreement of Limited Partnership of
Crescent Real Estate Equities Limited Partnership, dated as of
November 1, 1997, as amended (filed as Exhibit No. 4.06 to the
Registrant's Registration Statement on Form S-3 (File No.
333-41049) and incorporated herein by reference)
*10.02 Noncompetition Agreement of Richard E. Rainwater as assigned to
Crescent Real Estate Equities Limited Partnership on May 5, 1994
*10.03 Noncompetition Agreement of John C. Goff, as assigned to
Crescent Real Estate Equities Limited Partnership on May 5, 1994
*10.04 Noncompetition Agreement of Gerald W. Haddock, as assigned to
Crescent Real Estate Equities Limited Partnership on May 5, 1994
*10.05 Employment Agreement of John C. Goff, as assigned to Crescent
Real Estate Equities Limited Partnership on May 5, 1994, and as
further amended
*10.06 Employment Agreement of Gerald W. Haddock, as assigned to
Crescent Real Estate Equities Limited Partnership on May 5, 1994,
and as further amended
10.07 Form of Registration Rights, Lock-Up and Pledge Agreement (filed
as Exhibit No. 10.05 to the 1994 S-11 and incorporated herein by
reference)
10.08 Form of Officers' and Trust Managers' Indemnification Agreement
as entered into between the Registrant and each of its executive
officers and trust managers (filed as Exhibit No. 10.07 to the
Form S-4 and incorporated herein by reference)
10.09 Crescent Real Estate Equities Company 1994 Stock Incentive Plan
(filed as Exhibit No. 10.07 to the 1994 S-11 and incorporated
herein by reference)
*10.10 Crescent Real Estate Equities, Ltd. First Amended and Restated
401(k) Plan
</TABLE>
<PAGE> 25
<TABLE>
<S> <C>
10.11 Agreement, dated as of August 15, 1996, relating to the
acquisition of the Greenway Plaza Portfolio (filed as Exhibit
No. 10.02 to the 1996 8-K and previously incorporated by
reference but no longer incorporated herein by reference)
10.12 Form of Amended and Restated Lease Agreement, dated January 1,
1996, among Crescent Real Estate Equities Limited Partnership,
Mogul Management, LLC and RoseStar Management, LLC, relating to
the Hyatt Regency Beaver Creek (filed as Exhibit No. 10.12 to
the Registrant's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995 (the "1995 10-K") and previously
incorporated by reference but no longer incorporated herein by
reference)
10.13 Real Estate Purchase and Sale Agreement, dated as of January 29,
1997, between Crescent Real Estate Equities Limited Partnership,
as purchaser, and Magellan Health Services, Inc., as seller,
relating to the acquisition of 92 behavioral healthcare
facilities (the "Behavioral Healthcare Facilities"), as amended
effective February 28, 1997 and May 29, 1997 (filed as Exhibit
No. 10.13 to the Company's Quarterly Report on Form 10-Q/A for
the quarter ended June 30, 1997 (the "1997 10-Q") and
incorporated herein by reference)
10.15 Second Amended and Restated 1995 Crescent Real Estate Equities
Company Stock Incentive Plan (filed as Exhibit No. 10.13 to the Form
S-4 and incorporated herein by reference)
10.16 Lease Agreement, dated December 19, 1995 between Crescent Real
Estate Equities Limited Partnership and RoseStar Management,
LLC, relating to the Hyatt Regency Albuquerque (filed as Exhibit
No. 10.16 to the 1995 10-K and previously incorporated by
reference but no longer incorporated herein by reference)
10.17 Amended and Restated Lease Agreement, dated June 30, 1995
between Crescent Real Estate Equities Limited Partnership and
RoseStar Management, LLC, relating to the Denver Marriott (filed
as Exhibit No. 10.17 to the 1995 10-K and previously
incorporated by reference but no longer incorporated herein by
reference)
10.18 Loan Agreement, dated August 24, 1995, including Form of Deed of
Trust, Assignment of Rents, Security Agreement and Fixture
Filing, and Amendment to Loan Agreement, dated October 19, 1995,
between Crescent Real Estate Funding I, L.P. and Nomura Asset
Capital Corporation (filed as Exhibit No. 10.15 to the 1995 10-K and
previously incorporated by reference but no longer incorporated
herein by reference)
</TABLE>
<PAGE> 26
<TABLE>
<S> <C>
10.19 Loan Agreement, dated August 24, 1995, including Form of Deed of
Trust, Assignment of Rents, Security Agreement and Fixture
Filing, between Crescent Real Estate Funding II, L.P. and Nomura
Asset Capital Corporation (filed as Exhibit No. 10.19 to the 1995
10-K and previously incorporated by reference but no longer
incorporated herein by reference)
10.20 Mortgage Loan Application and Agreement, dated October 3, 1995,
as amended by letter agreements dated October 10, 1995 and
October 30, 1995, between Crescent Real Estate Equities Limited
Partnership and CIGNA Investments, Inc., and Secured Promissory
Note dated December 11, 1995 (filed as Exhibit No. 10.20 to the 1995
10-K and previously incorporated herein by reference but no
longer incorporated herein by reference)
10.21 Fourth Amended and Restated Revolving Credit Facility, dated
December 19, 1997, among Crescent Real Estate Equities Limited
Partnership, BankBoston, N.A. and the other banks named therein
(filed as Exhibit No. 10.25 to the Form S-4 and incorporated herein
by reference)
10.22 1995 Crescent Real Estate Equities Limited Partnership Unit
Incentive Plan (filed as Exhibit No. 99.01 to the Registrant's
Registration Statement on Form S-8 (File No. 333-3452) and
incorporated herein by reference)
10.23 1996 Crescent Real Estate Equities Limited Partnership Unit
Incentive Plan (filed as Exhibit No. 10.01 to the 1996 8-K and
incorporated herein by reference)
10.24 Lease Agreement, dated July 26, 1996, between Canyon Ranch, Inc,
and Canyon Ranch Leasing, L.L.C., assigned by Canyon Ranch, Inc.
to Crescent Real Estate Equities Limited Partnership pursuant to
the Assignment and Assumption Agreement of Master Lease, dated
July 26, 1996 (filed as Exhibit No. 10.24 to the 1997 10-Q and
previously incorporated by reference but no longer incorporated
herein by reference)
10.25 Lease Agreement, dated November 18, 1996, between Crescent Real
Estate Equities Limited Partnership and Wine Country Hotel,
L.L.C. (filed as Exhibit No. 10.25 to the 1996 10-K and previously
incorporated by reference but no longer incorporated herein by
reference)
10.26 Lease Agreement, dated December 11, 1996, between Canyon
Ranch-Bellefontaine Associates, L.P. and Vintage Resorts,
L.L.C., as assigned by Canyon Ranch-Bellefontaine Associates,
L.P. to Crescent Real Estate Funding VI, L.P. pursuant to the
Assignment and Assumption Agreement of Master Lease, dated
December 11, 1996 (filed as Exhibit No. 10.26 to the 1997 10-Q and
previously incorporated by reference but no longer incorporated
herein by reference)
</TABLE>
<PAGE> 27
<TABLE>
<S> <C>
*10.27 Master Lease Agreement, dated June 16, 1997, as amended, between
Crescent Real Estate Funding VII, L.P. and Charter Behavioral
Health Systems, LLC and its subsidiaries, relating to the
Behavioral Healthcare Facilities
10.28 Intercompany Agreement, dated June 3, 1997, between Crescent
Real Estate Equities Limited Partnership and Crescent Operating,
Inc. (filed as Exhibit No. 10.2 to the Registration Statement on
Form S-1 (File No. 333-25223) of Crescent Operating, Inc. and
incorporated herein by reference)
*12.01 Statement Regarding Computation of Ratios of Earnings to Fixed
Charges and Preferred Shares Dividends
*21.01 List of Subsidiaries
*23.01 Consent of Arthur Andersen LLP
27.01 Financial Data Schedule
*27.02 Restated Financial Data Schedule for the three months ended
March 31, 1996 reflecting the effect of FASB #128, Earnings Per
Share
*27.03 Restated Financial Data Schedule for the six months ended June
30, 1996 reflecting the effect of FASB #128, Earnings Per Share
*27.04 Restated Financial Data Schedule for the nine months ended
September 30, 1996 reflecting the effect of FASB #128, Earnings
Per Share
*27.05 Restated Financial Data Schedule for the year ended December 31,
1996 reflecting the effect of FASB #128, Earnings Per Share
*27.06 Restated Financial Data Schedule for the three months ended March
31, 1997 reflecting the effect of FASB #128, Earnings Per Share
*27.07 Restated Financial Data Schedule for the six months ended June
30, 1997 reflecting the effect of FASB #128, Earnings Per Share
*27.08 Restated Financial Data Schedule for the nine months ended
September 30, 1997 reflecting the effect of FASB #128, Earnings
Per Share
</TABLE>
<PAGE> 1
EXHIBIT 3.04
AMENDED AND RESTATED BYLAWS
OF
CRESCENT REAL ESTATE EQUITIES COMPANY
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I - OFFICES AND RECORDS............................................ 1
Section 1.1 - Principal Office ....................................... 1
Section 1.2 - Additional Offices ..................................... 1
Section 1.3 - Books and Records ...................................... 1
ARTICLE II - SHAREHOLDERS ................................................. 1
Section 2.1 - Annual Meeting ......................................... 1
Section 2.2 - Special Meetings ....................................... 2
Section 2.3 - Place of Meeting ....................................... 2
Section 2.4 - Notice of Meeting ...................................... 2
Section 2.5 - Meeting Without Notice; Waiver of Notice ............... 3
Section 2.6 - Quorum ................................................. 3
Section 2.7 - Adjournment ............................................ 4
Section 2.8 - Proxies ................................................ 4
Section 2.9 - Notice of Shareholder Business and Nominations ......... 4
A. Annual Meeting of Shareholders ............................... 4
B. Special Meetings of Shareholders ............................. 7
C. General ...................................................... 7
Section 2.10 - Procedure for Election of Trust Managers .............. 8
Section 2.11 - Vote of Shareholders .................................. 9
Section 2.12 - Opening and Closing the Polls ......................... 10
Section 2.13 - Inspectors ............................................ 10
Section 2.14 - Informal Action ....................................... 10
ARTICLE III - BOARD OF TRUST MANAGERS ..................................... 11
Section 3.1 - General Powers ......................................... 11
Section 3.2 - Number, Tenure and Qualifications ...................... 11
Section 3.3 - Composition of the Board of Trust Managers ............. 12
Section 3.4 - Regular Meetings ....................................... 12
Section 3.5 - Special Meetings ....................................... 13
Section 3.6 - Notice ................................................. 13
Section 3.7 - Quorum ................................................. 14
</TABLE>
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<PAGE> 3
<TABLE>
<S> <C>
Section 3.8 - Participation By Conference Telephone .................. 14
Section 3.9 - Presumption of Assent .................................. 15
Section 3.10 - Adjournments .......................................... 15
Section 3.11 - Informal Action ....................................... 15
Section 3.12 - Vacancies ............................................. 15
Section 3.13 - Removal ............................................... 16
Section 3.14 - Committees ............................................ 16
ARTICLE IV - OFFICERS ..................................................... 19
Section 4.1 - Categories of Officers ................................. 19
Section 4.2 - Election and Term of Office ............................ 19
Section 4.3 - Chairman of the Board .................................. 20
Section 4.4 - Vice Chairman of the Board ............................. 20
Section 4.4 - Chief Executive Officer ................................ 20
Section 4.5 - President .............................................. 21
Section 4.6 - Vice Presidents ........................................ 21
Section 4.7 - Secretary .............................................. 22
Section 4.8 - Treasurer .............................................. 22
Section 4.9 - Removal ................................................ 23
Section 4.10 - Salaries .............................................. 23
Section 4.11 - Vacancies ............................................. 24
Section 4.12 - Resignations .......................................... 24
ARTICLE V - SHARE CERTIFICATES AND TRANSFERS .............................. 24
Section 5.1 - Share Certificates ..................................... 24
Section 5.2 - Record Date and Closing of Transfer Books .............. 25
Section 5.3 - Registered Shareholders ................................ 26
Section 5.4 - Lost Certificates ...................................... 26
ARTICLE VI - MISCELLANEOUS PROVISIONS ..................................... 27
Section 6.1 - Fiscal Year ............................................ 27
Section 6.2 - Dividends .............................................. 27
Section 6.3 - Seal ................................................... 27
Section 6.4 - Execution of Written Instruments ....................... 27
Section 6.5 - Signing of Checks and Notes ............................ 27
Section 6.6 - Voting of Securities Held in Other Entities ............ 27
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<S> <C>
Section 6.7 - Indemnification and Insurance .......................... 28
A. Definitions .................................................. 28
B. Indemnification .............................................. 29
C. Successful Defense ........................................... 30
D. Determinations ............................................... 31
E. Advancement of Expenses ...................................... 32
F. Enforcement .................................................. 32
G. Procedure Upon a Change in Control ........................... 33
H. Employee Benefit Plans ....................................... 34
I. Authorization to Purchase Insurance .......................... 34
J. Other Indemnification and Insurance .......................... 34
K. Notice ....................................................... 35
L. Construction ................................................. 35
M. Continuing Offer, Reliance, Etc .............................. 35
N. Indemnification of Shareholders .............................. 36
O. Authority to Further Indemnify ............................... 36
P. Effect of Amendment .......................................... 36
ARTICLE VII - AMENDMENTS .................................................. 37
</TABLE>
-iii-
<PAGE> 5
AMENDED AND RESTATED BYLAWS
OF
CRESCENT REAL ESTATE EQUITIES COMPANY
ORGANIZED UNDER THE LAWS OF THE STATE OF TEXAS
ARTICLE I
OFFICES AND RECORDS
SECTION 1.1 PRINCIPAL OFFICE. The initial address of the principal office
of the Company in the State of Texas is 777 Main Street, Suite 2100, Fort Worth,
Texas 76102.
SECTION 1.2 ADDITIONAL OFFICES. The Company may have such other offices,
either within or without the State of Texas, as the Board of Trust Managers from
time to time may designate or as the business of the Company from time to time
may require.
SECTION 1.3 BOOKS AND RECORDS. The books and records of the Company may be
kept, either within or without the State of Texas, at such place or places as
the Board of Trust Managers from time to time may designate.
ARTICLE II
SHAREHOLDERS
SECTION 2.1 ANNUAL MEETING. An annual meeting of the shareholders of the
Company shall be held each year, commencing with 1997, on such date and at such
time as may be fixed by resolution of the Board of Trust Managers.
<PAGE> 6
SECTION 2.2 SPECIAL MEETINGS. Subject to the rights of the holders of any
class or series of preferred shares of the Company ("Preferred Shares") to elect
additional trust managers under specified circumstances, special meetings of the
shareholders may be called only by the Chairman of the Board, the Vice Chairman
of the Board, the Chief Executive Officer, the President, the Board of Trust
Managers pursuant to a resolution adopted by a majority of the total number of
trust managers constituting the whole Board of Trust Managers (the "Whole
Board"), or by written request to the Secretary by the holders of not less than
25 percent of all of the shares then outstanding and entitled to vote at such
meeting (the "Voting Shares"); provided that (i) the Secretary shall inform the
shareholders requesting such meeting of the reasonably estimated cost of
preparing and disseminating notice thereof and shall not be required to give
such notice until the Company has received payment in such amount from such
shareholders and (ii) unless requested by holders of a majority of the Voting
Shares, the Secretary shall not be required to call a special meeting to
consider any matter which is substantially the same as a matter voted on at any
special meeting of the shareholders held during the twelve (12) months preceding
the request to call such new special meeting.
SECTION 2.3 PLACE OF MEETING. Meetings shall be held at the principal
office of the Company or at such other place, within or without the State of
Texas, as the Board of Trust Managers from time to time by resolution may
designate.
SECTION 2.4 NOTICE OF MEETING. Written or printed notice, stating the
place, day and hour of the meeting and, in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be prepared and
delivered by the Company, not less than ten (10) days nor more than sixty (60)
days before the date of the meeting, personally or by mail, to each shareholder
of record entitled to vote at such meeting and to each
-2-
<PAGE> 7
shareholder or other person, if any, entitled to notice of the meeting. If
delivered by mail, such notice shall be deemed to be delivered when deposited in
the United States mail with postage thereon prepaid, addressed to the
shareholder at his or her address as it appears on the share transfer books of
the Company. If delivered personally, such notice shall be deemed given when so
delivered to the shareholder as provided above and if by facsimile, such notice
shall be deemed given upon completion of the facsimile transmission to the
shareholder as provided above. Meetings may be held without notice if all
shareholders entitled to vote are present, or if notice is waived by those not
present in accordance with Section 2.5 of these Bylaws. Any previously scheduled
meeting of the shareholders may be postponed by resolution of the Board of Trust
Managers upon public notice given prior to the date scheduled for such meeting.
SECTION 2.5 MEETING WITHOUT NOTICE; WAIVER OF NOTICE. Either before or
after a shareholders' meeting, a shareholder may waive notice thereof by
executing a waiver of notice to be filed with the Company's records of
shareholder meetings. Any such written notice shall be deemed to be the
equivalent of notice pursuant to Section 2.4 hereof. Attendance at a
shareholders' meeting, either in person or by proxy, by a person entitled to
notice thereof shall constitute a waiver of notice of the meeting unless such
person attends for the sole and express purpose of objecting to the transaction
of business on the ground that the meeting was not lawfully called or convened.
SECTION 2.6 QUORUM. Except as otherwise provided by law or by the
Declaration of Trust of the Company, as the same may be amended or restated from
time to time (the "Declaration of Trust"), the holders of a majority of the
Voting Shares, represented in person or
-3-
<PAGE> 8
by proxy, shall constitute a quorum at a meeting of shareholders, except that
when specified business is to be voted on by a class or series voting as a
class, the holders of a majority of the shares of such class or series shall
constitute a quorum for the transaction of such business.
SECTION 2.7 ADJOURNMENT. A meeting of shareholders convened on the date
for which it was called may be adjourned prior to the completion of business
thereat to a date not more than one hundred twenty (120) days after the record
date of the original meeting. Notice of a subsequent meeting held as a result of
an adjournment, other than by announcement at the meeting at which the
adjournment was taken, shall not be necessary. If a quorum is present or
represented at such subsequent meeting, any business may be transacted thereat
which could have been transacted at the meeting which was adjourned.
SECTION 2.8 PROXIES. At all meetings of shareholders, a shareholder
entitled to vote may vote in person or by proxy executed in writing thereby or
by his duly authorized attorney-in-fact. A proxy shall not be valid after eleven
(11) months from the date of its execution unless a longer period is expressly
stated therein. A proxy shall be revocable unless the proxy form states
conspicuously that the proxy is irrevocable and the proxy is coupled with an
interest. Each proxy must be filed with the Secretary of the Company or his
representative at or before the time of the meeting to which it relates.
SECTION 2.9 NOTICE OF SHAREHOLDER BUSINESS AND NOMINATIONS.
A. ANNUAL MEETING OF SHAREHOLDERS.
(1) Nominations of persons for election to the Board of Trust
Managers of the Company and the proposal of business to be considered by the
shareholders may be made at
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an annual meeting of shareholders (i) pursuant to the Company's notice of
meeting delivered pursuant to Section 2.4 of these Bylaws; (ii) by or at the
direction of the Chairman of the Board of Trust Managers; or (iii) by any
shareholder of the Company who is entitled to vote at the meeting, who has
complied with the notice procedures set forth in clauses (2) and (3) of this
Paragraph A and who was a shareholder of record at the time such notice is
delivered to the Secretary of the Company.
(2) For nominations or other business to be properly brought
before an annual meeting by a shareholder pursuant to clause (iii) of Paragraph
A(1) of this Section 2.9, the shareholder must have given timely notice thereof
in writing to the Secretary of the Company. To be timely, a shareholder's notice
shall be delivered to the Secretary at the principal office of the Company not
less than seventy (70) days nor more than ninety (90) days prior to the
anniversary of the preceding year's annual meeting; provided, however, that,
with respect to the 1997 annual meeting, the date of the 1996 annual meeting
shall be deemed to be June 17, 1996, and further provided that in the event that
the date of an annual meeting is advanced by more than thirty (30) days or
delayed by more than sixty (60) days from such anniversary date, to be timely
notice by the shareholder must be so delivered not earlier than the ninetieth
(90th) day prior to such annual meeting and not later than the close of business
on the later of the seventieth (70th) day prior to such annual meeting or the
tenth (10th) day following the day on which public announcement of the date of
such meeting is first made. Such shareholder's notice shall set forth (i) as to
each person whom the shareholder proposes to nominate for election or reelection
as a trust manager, all information relating to such person that is required to
be disclosed in solicitations of proxies for election of trust managers, or is
otherwise required, pursuant to
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Regulation 14A under the Securities Exchange Act of 1934, as amended, or any
successor statute thereto (the "Exchange Act"), including such person's written
consent to being named in the proxy statement as a nominee and to serving as a
trust manager if elected; (ii) as to any other business that the shareholder
proposes to bring before the meeting, a brief description of the business
desired to be brought before the meeting, the reasons for conducting such
business at the meeting and any material interest in such business of such
shareholder and the beneficial owner, if any, on whose behalf the proposal is
made; and (iii) as to the shareholder giving the notice and the beneficial
owner, if any, on whose behalf the nomination or proposal is made (a) the name
and address of such shareholder, as they appear on the Company's share transfer
books, and the name and address of such beneficial owner; (b) the class or
series and number of shares of beneficial interest of the Company which are
owned beneficially and of record by such shareholder and such beneficial owner;
and (c) the date or dates upon which the shareholder acquired ownership of such
shares.
(3) Notwithstanding anything in the second sentence of
Paragraph A(2) of this Section 2.9 to the contrary, in the event that the number
of trust managers to be elected to the Board of Trust Managers of the Company is
increased and there is no public announcement naming all of the nominees for
trust manager or specifying the size of the increased Board of Trust Managers
made by the Company at least seventy (70) days prior to the first anniversary of
the preceding year's annual meeting, a shareholder's notice required by
Paragraph A of this Section 2.9 shall also be considered timely, but only with
respect to nominees for any new positions created by such increase, if it shall
be delivered to the Secretary at the principal
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executive offices of the Company not later than the close of business on the
tenth (10th) day following the day on which such public announcement is first
made by the Company.
B. SPECIAL MEETINGS OF SHAREHOLDERS. Only such business shall be conducted
at a special meeting of shareholders as shall have been brought before the
meeting pursuant to the Company's notice of meeting pursuant to Section 2.4 of
these Bylaws. Nominations of persons for election to the Board of Trust Managers
may be made at a special meeting of shareholders at which trust managers are to
be elected pursuant to the Company's notice of meeting (i) by or at the
direction of the Board of Trust Managers or (ii) by any shareholder of the
Company who is entitled to vote at the meeting, who complies with the notice
procedures set forth in this Section 2.9 and who is a shareholder of record at
the time such notice is delivered to the Secretary of the Company. Nominations
by shareholders of persons for election to the Board of Trust Managers may be
made at such a special meeting of shareholders if the shareholder's notice as
required by Paragraph A(2) of this Section 2.9 shall be delivered to the
Secretary at the principal office of the Company not earlier than the ninetieth
(90th) day prior to such special meeting and not later than the close of
business on the later of the seventieth (70th) day prior to such special meeting
or the tenth (10th) day following the day on which public announcement is first
made of the date of the special meeting and of the nominees proposed by the
Board of Trust Managers to be elected at such meeting.
C. GENERAL.
(1) Only persons who are nominated in accordance with the
procedures set forth in this Section 2.9 shall be eligible to serve as trust
managers, and only such business shall
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be conducted at a meeting of shareholders as shall have been brought before the
meeting in accordance with the procedures set forth in this Section. Except as
otherwise provided by law, the Declaration of Trust or these Bylaws, the
chairman of the meeting shall have the power and duty to determine whether a
nomination or any business proposed to be brought before the meeting was made or
brought in accordance with the procedures set forth in this Section 2.9 and, if
any proposed nomination or business is determined not to be in compliance
herewith, to declare that such defective nomination or proposal shall be
disregarded.
(2) For purposes of this Section 2.9, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the Company with the Securities and Exchange Commission pursuant to
Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section
2.9, a shareholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth herein. Nothing in this Bylaw shall be deemed to affect any
rights of shareholders to request inclusion of proposals in the Company's proxy
statement pursuant to Rule l4a-8 under the Exchange Act or to create any
additional rights with respect to any such inclusion.
SECTION 2.10 PROCEDURE FOR ELECTION OF TRUST MANAGERS. Subject to the
rights of the holders of any class or series of Preferred Shares to elect trust
managers under specified circumstances, and to the laws of the State of Texas,
each shareholder having the right to vote for the election of trust managers
shall, unless otherwise provided in the Declaration of Trust or by
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applicable law, have the right to vote, in person or by proxy, the number of
shares owned by such shareholder for as many persons as there are to be elected
and for whose election such shareholder has the right to vote. Unless otherwise
provided by the Declaration of Trust, no shareholder shall have the right or be
permitted to cumulate his or her votes on any basis. Election of trust managers
at all meetings of the shareholders at which trust managers are to be elected
may be viva voce, unless the chairman of the meeting shall order, or any
shareholder shall demand, that voting be by written ballot, and, except as
otherwise expressly provided with respect to the right of the holders of any
series of Preferred Shares to elect additional trust managers under specified
circumstances, a majority of the votes cast thereat shall elect. Voting on any
other question or election may be viva voce, unless the chairman of the meeting
shall order, or any shareholder shall demand, that voting be by written ballot.
SECTION 2.11 VOTE OF SHAREHOLDERS. Subject to the rights of the holders of
any class or series of Preferred Shares to elect trust managers under specified
circumstances, and to the laws of the State of Texas, each shareholder having
the right to vote shall be entitled at every meeting of shareholders to one (1)
vote for every share standing in his or her name on the record date fixed by the
Board of Trust Managers pursuant to Section 5.2 of these Bylaws. Except as
otherwise provided by law, the Declaration of Trust, these Bylaws, any
resolution adopted by the Board of Trust Managers authorizing a series of
Preferred Shares, or any resolution adopted by a majority of the Whole Board,
all matters submitted to the shareholders at any meeting (other than the
election of trust managers) shall be decided by a majority of the votes cast
with respect thereto.
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SECTION 2.12 OPENING AND CLOSING THE POLLS. The chairman of the meeting
shall fix, and announce at the meeting, the date and time of the opening and the
closing of the polls for each matter upon which the shareholders are to vote at
the meeting.
SECTION 2.13 INSPECTORS. At any meeting of shareholders, the chairman of
such meeting may, and upon the request of any shareholder shall, appoint one or
more persons as inspectors for such meeting. Such inspector or inspectors shall
ascertain and report the number of shares represented at such meeting in person
or by proxy, based upon the determination of such inspector or inspectors of the
validity and effect of proxies, count all votes, report the results and perform
such other acts as are proper to conduct voting with impartiality and fairness
to all shareholders. Each report of inspectors shall be in writing and signed by
the inspector or, if there is more than one, by a majority of inspectors acting
at such meeting, in which event the report of the majority shall be the report
of the inspectors. The report of the inspector or inspectors on the number of
shares represented at a meeting and the results of voting thereat shall be prima
facie evidence thereof.
SECTION 2.14 INFORMAL ACTION. Any action required or permitted to be taken
at a meeting of shareholders may be taken without a meeting if the following are
filed with the Company's records of shareholder meetings:
(1) a unanimous written consent which sets forth the action
and is signed by each shareholder entitled to vote thereon; and
(2) a written waiver of any right to dissent signed by each
shareholder, if any, entitled to notice of the meeting but not entitled to vote
thereat.
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ARTICLE III
BOARD OF TRUST MANAGERS
SECTION 3.1 GENERAL POWERS. The business and affairs of the Company shall
be managed by, or under the direction of, its Board of Trust Managers. In
addition to the powers and authorities expressly conferred by these Bylaws, the
Board of Trust Managers may exercise all such powers of the Company and do all
such lawful acts and things as are not by law or by the Declaration of Trust or
these Bylaws required to be exercised or done by the shareholders.
SECTION 3.2 NUMBER, TENURE AND QUALIFICATIONS. Subject to the rights of
the holders of any class or series of Preferred Shares to elect trust managers
under specified circumstances, the number of trust managers shall be fixed from
time to time pursuant to a resolution adopted by a majority of the Whole Board,
but shall consist of not more than twenty-five (25) nor less than three (3)
trust managers who need not be residents of the State of Texas and need not hold
shares in the Company; provided that if, at any time, the Company has fewer than
three (3) shareholders, the number of trust managers may be less than three (3),
but not less than the number of shareholders. At all times as the Board of Trust
Managers shall consist of three (3) or more trust managers, the trust managers,
other than those who may be elected by the holders of any class or series of
Preferred Shares, shall be divided, with respect to the time for which they
severally hold office, into three (3) classes, as nearly equal in number as
possible, with the term of office of the first class to expire at the first
annual meeting of shareholders held after such division into classes, the term
of office of the second class to expire at the second annual meeting of
shareholders held after such division into classes and the term of office of the
third class to expire at the third annual meeting of shareholders held after
such division into classes. Each
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trust manager shall hold office until his or her successor shall have been duly
elected and qualified. At each annual meeting of shareholders commencing with
the first annual meeting held after such division into classes, trust managers
elected to succeed those trust managers whose terms then expire shall be elected
for a term of office to expire at the third (3rd) succeeding annual meeting of
shareholders after their election, with each trust manager to hold office until
his or her successor shall have been duly elected and qualified.
SECTION 3.3 COMPOSITION OF THE BOARD OF TRUST MANAGERS. Except during a
period of vacancy or vacancies on the Board of Trust Managers, a majority of the
trust managers at all times shall be persons who are not affiliates (as that
term is defined in the next succeeding sentence) of (i) the Company other than
affiliation solely by reason of service as a trust manager of the Company or
(ii) Rainwater, Inc. or any successor entity thereto (the "Independent Trust
Managers"). For purposes of this Section 3.3, "affiliate" shall mean, with
respect to the Company or Rainwater, Inc., any individual who (i) directly or
indirectly controls, is controlled by or is under common control with, such
entity or (ii) any officer, director, trust manager, general partner or trustee
of such entity (other than a trust manager of the Company who otherwise would be
deemed to be an affiliate of the Company solely by reason of service as a trust
manager).
SECTION 3.4 REGULAR MEETINGS. A regular meeting of the Board of Trust
Managers to elect officers and consider other business shall be held without
notice other than this Section 3.4 immediately after, and at the same place as,
each annual meeting of shareholders. The Board of Trust Managers may, by
resolution, designate the time and place for additional regular meetings without
notice other than such resolution.
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SECTION 3.5 SPECIAL MEETINGS. Special meetings of the Board of Trust
Managers shall be called at the request of the Chairman of the Board, the Vice
Chairman of the Board, the Chief Executive Officer, the President or a majority
of the Board of Trust Managers. The person or persons authorized to call special
meetings of the Board of Trust Managers may fix the place and time of the
meeting.
SECTION 3.6 NOTICE. Notice of any special meeting shall be given to each
trust manager at his business or residence as recorded in the books and records
of the Company or at such other address as such trust manager may designate in
writing to the Secretary of the Company by mail, by telegram or express courier,
charges prepaid, by facsimile or telephonic communication. If mailed, such
notice shall be deemed adequately delivered if deposited in the United States
mails so addressed, with postage thereon prepaid, at least five (5) days before
the day of such meeting. If by telegram, such notice shall be deemed adequately
delivered if the telegram is delivered to the telegraph company at least
twenty-four (24) hours before the time set for such meeting. If by express
courier, the notice shall be deemed adequately given if delivered to the courier
company at least two (2) days before the day of such meeting. If by telephone or
facsimile, the notice shall be deemed adequately delivered if given at least
twelve (12) hours prior to the time set for such meeting. Neither the business
to be transacted at, nor the purpose of, any regular or special meeting of the
Board of Trust Managers need be specified in the notice of such meeting, except
for amendments to these Bylaws as provided under Article VII hereof. A meeting
may be held at any time without notice if all the trust managers are present or
if those not present waive notice of the meeting in writing, either before or
after such meeting. Attendance of a trust manager at a meeting shall constitute
waiver of notice of that meeting unless he or she attends for the sole and
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express purpose of objecting to the transaction of business on the ground that
the meeting was not lawfully called or convened.
SECTION 3.7 QUORUM. A number of trust managers equal to at least a
majority of the trust managers then in office shall constitute a quorum for the
transaction of business; provided, however, that if the Whole Board consists of
two or three trust managers, two trust managers shall constitute a quorum, if
the Whole Board consists of one trust manager, one trust manager shall
constitute a quorum and that in no event may less than one third (1/3) of the
Whole Board constitute a quorum. Anything else herein to the contrary
notwithstanding, if at any meeting of the Board of Trust Managers there shall be
less than a quorum present, a majority of the trust managers present may adjourn
the meeting from time to time without further notice. Except as may otherwise be
provided by the Declaration of Trust, these Bylaws or applicable law, the act of
the majority of the trust managers present at a meeting at which a quorum is
present shall be the act of the Board of Trust Managers. The trust managers
present at a duly organized meeting may continue to transact business until
adjournment, notwithstanding the withdrawal or departure of enough trust
managers to leave less than a quorum.
SECTION 3.8 PARTICIPATION BY CONFERENCE TELEPHONE. Members of the Board of
Trust Managers, or any committee thereof, may participate in a meeting of such
Board or committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other, and participation in a meeting pursuant to this Section 3.8 shall
constitute presence in person at such meeting.
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SECTION 3.9 PRESUMPTION OF ASSENT. A trust manager of the Company who is
present at a meeting of the trust managers at which action on any corporate
matter is taken shall be presumed to have assented to the action taken unless
his or her dissent shall be entered in the minutes of the meeting or unless he
or she shall file a written dissent to such action with the person acting as the
secretary of the meeting before the adjournment thereof.
SECTION 3.10 ADJOURNMENTS. Any meeting of the Board of Trust Managers may
be adjourned prior to the completion of business thereat. Notice of the
subsequent meeting held as a result of an adjournment, other than by
announcement at the meeting at which the adjournment is taken, shall not be
necessary. If a quorum is present at such subsequent meeting, any business may
be transacted thereat which could have been transacted at the meeting which was
adjourned.
SECTION 3.11 INFORMAL ACTION. If all of the trust managers consent in
writing to any action required or permitted to be taken at a meeting of the
Board of Trust Managers or a committee thereof and the writing or writings
evidencing such consent is or are filed by the Secretary of the Company with the
minutes of proceedings of the Board of Trust Managers or such committee, the
action shall be as valid as though it had been taken at a meeting of the Board
or committee.
SECTION 3.12 VACANCIES. Except as otherwise provided in this Section 3.12,
subject to the rights of the holders of any class or series of Preferred Shares
to elect additional trust managers under specified circumstances, unless the
Board of Trust Managers otherwise determines, vacancies resulting from death,
resignation, retirement, disqualification, or other cause relating to a
then-existing Board position shall be filled by the affirmative vote of a
majority of the remaining trust managers, though less than a quorum of the Board
of Trust Managers, and newly
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created trust managerships resulting from an increase in the authorized number
of trust managers shall be filled by the affirmative vote of a majority of the
Whole Board and, in either event, trust managers so chosen shall hold office for
a term expiring at the annual meeting of shareholders at which the term of
office of the class to which they have been elected expires and until such trust
manager's successor shall have been duly elected and qualified. No decrease in
the number of authorized trust managers constituting the Whole Board shall
shorten the term of any incumbent trust manager. Vacancies on the Board of Trust
Managers due to the removal of a trust manager may be filled by the shareholders
at an annual or special meeting called for that purpose, and trust managers so
chosen shall hold office for a term expiring at the annual meeting of
shareholders at which the term of office of the class to which they have been
elected expires and until each such trust manager's successor shall have been
duly elected and qualified. The appointment or election of a successor trust
manager shall be considered an amendment to the Declaration of Trust.
SECTION 3.13 REMOVAL. Subject to the rights of the holders of any class or
series of Preferred Shares to elect additional trust managers under specified
circumstances, any trust manager, or the entire Board of Trust Managers, may be
removed from office at any time, but only for cause and only by the affirmative
vote of the holders of at least 80 percent of the then outstanding Voting
Shares, voting together as a single class.
SECTION 3.14 COMMITTEES. The Board of Trust Managers, by resolution or
resolutions passed by a majority of the Whole Board, may designate from among
the members of the trust managers one or more committees which, to the extent
provided in such resolution or resolutions, shall have and may exercise all of
the authority of the Board of Trust Managers in
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the business and affairs of the Company to the extent consistent with the Texas
Real Estate Investment Trust Act, as amended from time to time, or any successor
statute thereto (the "Texas REIT Act"), except the power to amend the
Declaration of Trust, to approve a plan of merger or share exchange, to declare
dividends or distributions on shares, to amend these Bylaws, to issue shares
except in the manner and to the extent prescribed by the Declaration of Trust,
these Bylaws or any resolution designating the committee, to fill vacancies in
the trust managers or in the committee, to elect or remove officers of the
Company or members of the committee, to fix the compensation of any member of
the committee, to recommend to the shareholders any action requiring shareholder
approval, or to approve any merger, consolidation or share exchange which does
not require shareholder approval, each committee to consist of two (2) or more
trust managers of the Company, including, without limitation the following
committees:
(1) An Executive Committee, which shall have such authority as
shall be delegated by the Board of Trust Managers, including,
without limitation, authority to acquire and dispose of real
property and to execute contracts and agreements on behalf of
the full Board of Trust Managers including, without
limitation, those relating to the incurrence of debt by the
Company or subsidiaries thereof, and shall advise the Board of
Trust Managers from time to time with respect to such matters
as the Board of Trust Managers shall direct.
(2) An Audit Committee, which shall consist of Outside Trust
Managers (as defined below). The Audit Committee shall make
recommendations concerning the engagement of independent
public accountants, review with the independent public
accountants the plans and results of each audit engagement,
approve
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professional services provided by the independent public
accountants, review the independence of the independent public
accountants, consider the range of audit and non-audit fees
and review the adequacy of the Company's internal accounting
controls.
(3) An Executive Compensation Committee, which shall determine
compensation for the Company's executive officers and shall
administer any share incentive or other compensation plans
adopted by the Company.
For purposes of this Section 3.14, "Outside Trust Managers" shall mean trust
managers who are not (i) officers or former officers of the Company or any
subsidiary thereof; (ii) employees of the Company or any subsidiary or division
thereof; (iii) relatives of an executive officer; (iv) holders of more than five
(5) percent of the Voting Shares of the Company or any subsidiary thereof; (v)
members of any organization acting as an adviser, consultant, legal counsel or
in a similar capacity with respect to the Company and receiving compensation
therefor on an ongoing basis from the Company, in addition to trust managers
fees; or (vi) with reference to any particular transaction, interested trust
managers within the meaning of Section 4.20 of the Texas REIT Act or any
successor provision thereto. The Board of Trust Managers may designate one or
more trust managers as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of such committee. Unless the Board
of Trust Managers shall provide otherwise, the presence of one-half (1/2) of the
total membership of any committee of the Board of Trust Managers shall
constitute a quorum for the transaction of business at any meeting of such
committee and the act of a majority of those present shall be the act of such
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committee. Each committee shall keep regular minutes of its proceedings and
report the same to the full Board of Trust Managers when so requested.
ARTICLE IV
OFFICERS
SECTION 4.1 CATEGORIES OF OFFICERS. The elected officers of the Company
shall consist of a Chairman of the Board, a Vice Chairman of the Board, a Chief
Executive Officer, a President, one or more Executive Vice Presidents or Vice
Presidents, a Secretary and a Treasurer. Such other officers, assistant
officers, agents and employees as the Board of Trust Managers may from time to
time deem necessary may be elected by the Board of Trust Managers or appointed
by the Chairman of the Board. The Chairman of the Board and the Vice Chairman of
the Board shall be chosen from among the trust managers. Two or more offices may
be held by the same person, except that a person may not concurrently serve as
the President and a Vice President or Executive Vice President. Each officer
chosen or appointed in the manner prescribed by the Board of Trust Managers
shall have such powers and duties as generally pertain to his or her office or
offices, subject to the specific provisions of this Article IV. Such officers
also shall have such powers and duties as from time to time may be conferred by
the Board of Trust Managers or by any committee thereof authorized to do so.
SECTION 4.2 ELECTION AND TERM OF OFFICE. The elected officers of the
Company shall be elected annually by the Board of Trust Managers at the regular
meeting of the Board of Trust Managers held after each annual meeting of the
shareholders. If the election of officers shall not be held at such meeting,
such election shall be held as soon thereafter as is convenient. Each
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officer shall hold office until his or her successor shall have been duly
elected and shall have qualified, or until his or her death or until he or she
shall resign or be removed from office.
SECTION 4.3 CHAIRMAN OF THE BOARD. The Chairman of the Board shall preside
at all meetings of the shareholders and of the Board of Trust Managers. The
Chairman of the Board shall be responsible for general management of the affairs
of the Company and shall perform all duties incidental to the office which may
be required by law, and all such other duties as may properly be required by the
Board of Trust Managers. Except where by law the signature of the Chief
Executive Officer or the President is required, the Chairman of the Board shall
possess the same power as the Chief Executive Officer and the President to sign
all certificates, contracts, and other instruments of the Company which may be
authorized by the Board of Trust Managers. The Chairman of the Board shall make
such reports to the Board of Trust Managers and the shareholders as are properly
required by the Board of Trust Managers. The Chairman of the Board shall see
that all orders and resolutions of the Board of Trust Managers and of any
committee thereof are carried into effect.
SECTION 4.4 VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the Board
shall, in the absence of the Chairman, preside at all meetings of the
shareholders and of the Board of Trust Managers. The Vice Chairman of the Board
shall, together with the Chairman of the Board and the Chief Executive Officer,
act in a general executive capacity and shall have such powers and duties as
from time to time may be established by the Board of Trust Managers.
SECTION 4.5 CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall act
in a general executive capacity and shall assist the Chairman of the Board in
the administration and operation
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of the Company's business and general supervision of its policies and affairs.
The Chief Executive Officer may, in the absence of or because of the inability
to act of the Chairman of the Board, perform all duties of the Chairman of the
Board and, in the absence of or because of the inability to act of the Chairman
of the Board and the Vice Chairman of the Board, preside at all meetings of
shareholders and of the Board of Trust Managers. The Chief Executive Officer may
sign, alone or with the Secretary or any assistant secretary or any other
officer of the Company properly authorized by the Board of Trust Managers,
certificates, contracts and other instruments of the Company as authorized by
the Board of Trust Managers.
SECTION 4.6 PRESIDENT. The President shall be the chief operating officer
of the Company, shall act in a general executive capacity and shall assist the
Chairman of the Board and the Chief Executive Officer in the administration and
operation of the Company's business and general supervision of its policies and
affairs. The President may, in the absence of or because of the inability to act
of the Chairman of the Board and the Chief Executive Officer, perform all duties
of the Chairman of the Board and, in the absence of or because of the inability
to act of the Chairman of the Board, the Vice Chairman of the Board and the
Chief Executive Officer, preside at all meetings of shareholders and of the
Board of Trust Managers. The President may sign, alone or with the Secretary or
any assistant secretary or any other officer of the Company properly authorized
by the Board of Trust Managers, certificates, contracts and other instruments of
the Company as authorized by the Board of Trust Managers.
SECTION 4.7 VICE PRESIDENTS. The Vice President or Vice Presidents, if
any, including any Executive Vice Presidents, shall perform the duties of the
Chief Executive Officer and the President in the absence or disability of both
the Chief Executive Officer and the President, and
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shall have such powers and perform such other duties as the Board of Trust
Managers or the Chairman of the Board from time to time may prescribe.
SECTION 4.8 SECRETARY. The Secretary shall give, or cause to be given,
notice of all meetings of shareholders and trust managers and all other notices
required by law, by the Declaration of Trust or by these Bylaws, and in case of
his or her absence or refusal or neglect so to do, any such notice may be given
by any person thereunto directed by the Chairman of the Board, the Vice Chairman
of the Board, the Chief Executive Officer, the President or the Board of Trust
Managers, upon whose request the meeting is called, as provided in these Bylaws.
The Secretary shall record all the proceedings of the meetings of the Board of
Trust Managers, any committees thereof and the shareholders of the Company in a
book or books to be kept for that purpose, and shall perform such other duties
as from time to time may be prescribed by the Board of Trust Managers, the
Chairman of the Board, the Chief Executive Officer or the President. The
Secretary shall have custody of the seal, if any, of the Company and shall affix
the same to all instruments requiring it, when authorized by the Board of Trust
Managers, the Chairman of the Board, the Chief Executive Officer or the
President, and shall attest to the same.
SECTION 4.9 TREASURER. The Treasurer shall have custody of all Company
funds and securities and shall keep full and accurate account of receipts and
disbursements in books belonging to the Company. The Treasurer shall deposit all
moneys and other valuable effects in the name and to the credit of the Company
in such depositories as may be designated by the Board of Trust Managers. The
Treasurer shall disburse the funds of the Company in such manner as may be
ordered by the Board of Trust Managers, the Chairman of the Board, the Chief
Executive Officer or the President, taking proper vouchers for such
disbursements. The
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Treasurer shall render to the Chairman of the Board, the Chief Executive
Officer, the President and the Board of Trust Managers, whenever requested, an
account of all his or her transactions as Treasurer and of the financial
condition of the Company. If required by the Board of Trust Managers, the
Treasurer shall give the Company a bond for the faithful discharge of his or her
other duties in such amount and with such surety as the Board of Trust Managers
shall prescribe. The Treasurer also shall perform such duties and have such
powers as the Board of Trust Managers from time to time may prescribe.
SECTION 4.10 REMOVAL. Any officer elected by the Board of Trust Managers
or appointed in the manner prescribed hereby may be removed by a majority of the
members of the Whole Board whenever, in their judgment, the best interests of
the Company would be served thereby. No elected or appointed officer shall have
any contractual rights against the Company for compensation by virtue of such
election or appointment beyond the date of the election or appointment of his or
her successor, his or her death, resignation or removal, whichever event shall
first occur, except as otherwise provided in an employment or similar contract
or under an employee deferred compensation plan.
SECTION 4.11 SALARIES. The Board of Trust Managers shall fix the salaries
of the Chairman of the Board, the Vice Chairman of the Board, the Chief
Executive Officer and the President of the Company, or may delegate the
authority to do so to a duly constituted Executive Compensation Committee. The
salaries of other officers, agents and employees of the Company may be fixed by
the Board of Trust Managers, by a committee of the Board, by the Chairman of the
Board or by another officer or committee to whom that function has been
delegated by the Board of Trust Managers or the Chairman of the Board.
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SECTION 4.12 VACANCIES. Any newly created office or vacancy in any office
because of death, resignation or removal shall be filled by the Board of Trust
Managers or, in the case of an office not specifically provided for in Section
4.1 hereof, by or in the manner prescribed by the Board of Trust Managers. The
officer so selected shall hold office until his or her successor is duly
selected and shall have qualified, unless he or she sooner resigns or is removed
from office in the manner provided in these Bylaws.
SECTION 4.13 RESIGNATIONS. Any trust manager or officer, whether elected
or appointed, may resign at any time by serving written notice of such
resignation on the Chairman of the Board, the Chief Executive Officer, the
President or the Secretary, and such resignation shall be deemed to be effective
as of the close of business on the date said notice is received by the Chairman
of the Board, the Chief Executive Officer, the President or the Secretary. No
action shall be required of the Board of Trust Managers or the shareholders to
make any such resignation effective.
ARTICLE V
SHARE CERTIFICATES AND TRANSFERS
SECTION 5.1 SHARE CERTIFICATES. Each shareholder shall be entitled to a
certificate or certificates, in a form approved by the Board of Trust Managers
and consistent with the Texas REIT Act, which shall represent and certify the
number, kind and class of shares owned by him or her in the Company. Each
certificate shall be signed by the Chairman of the Board, the President or a
Vice President, and by the Secretary or the Treasurer (or an assistant secretary
or assistant treasurer, if any) and, pursuant to resolutions of the Board of
Trust Managers, any such signature may be in facsimile. In case any officer,
transfer agent or registrar who has signed, or
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whose facsimile signature has been placed on, a certificate has ceased to hold
such office before the certificate is issued, it nevertheless may be issued by
the Company with the same effect as if he or she held such office at the date of
issue.
SECTION 5.2 RECORD DATE AND CLOSING OF TRANSFER BOOKS. The Board of Trust
Managers may fix, in advance, a date as the record date for the purpose of
determining shareholders entitled to notice of, or to vote at, any meeting of
shareholders, or shareholders entitled to receive payment of any dividend or
distribution or the allotment of any rights, or the shareholders entitled to
exercise any rights in respect of any change, conversion or exchange of stock,
or in order to make a determination of shareholders for any other proper
purpose. The record date may not be prior to the close of business on the day
the record date is fixed. Such record date shall not be prior to the close of
business on the day such date is fixed and not more than sixty (60) days, and in
case of a meeting of shareholders, not less than ten (10) days, prior to the
date on which the particular action requiring such determination of shareholders
is to be taken. The stock transfer books of the Company may not be closed for a
period longer than twenty (20) days.
If no record date is fixed and the Company's stock transfer books are not
closed, the determination of shareholders entitled to notice of, or to vote at,
a meeting of shareholders shall be at the close of the business on the day on
which notice of the meeting is mailed. If no record date is fixed, the record
date for determining shareholders for any purpose other than that specified in
the preceding sentence shall be at the close of business on the day on which the
resolution of the Board of Trust Managers relating thereto is adopted.
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When a determination of shareholders of record entitled to notice of,
or to vote at, any meeting of shareholders has been made as provided in this
Section 5.2, such determination shall apply to any future meeting in respect of
an adjournment thereof, unless the trust managers fix a new record date under
this section for such future meeting.
SECTION 5.3 REGISTERED SHAREHOLDERS. The Company shall be entitled to
treat the holder of record of shares as the holder in fact and, except as
otherwise provided by the laws of the State of Texas, shall not be bound to
recognize any equitable or other claim to or interest in the shares.
Shares of the Company shall be transferred on its books only upon the
surrender to the Company of the share certificates duly endorsed or accompanied
by proper evidence of succession, assignment or authority to transfer, and upon
presentation of adequate evidence of the validity of the transfer under this
Section 5.3 and the laws of the State of Texas. In that event, the surrendered
certificates shall be canceled, new certificates issued to the person entitled
to them and the transaction recorded on the books of the Company.
SECTION 5.4 LOST CERTIFICATES. The Board of Trust Managers may direct a
new certificate to be issued in place of a certificate alleged to have been
destroyed or lost if the owner makes an affidavit that it is destroyed or lost.
The Board, in its discretion, may, as a condition precedent to issuing the new
certificate, require the owner to give the Company a bond as indemnity against
any claim that may be made against the Company on the certificate allegedly
destroyed or lost.
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ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.1 FISCAL YEAR. The fiscal year of the Company shall begin on the
first (1st) day of January and end on the thirty-first (31st) day of December of
each year.
SECTION 6.2 DIVIDENDS. The Board of Trust Managers may from time to time
declare, and the Company may pay, dividends on its outstanding shares in the
manner and upon the terms and conditions provided by law and the Declaration of
Trust.
SECTION 6.3 SEAL. The seal of the Company, if any, shall have inscribed
thereon the name of the Company and shall be in such form as may be approved by
the Board of Trust Managers. The seal may be used by causing it or a facsimile
thereof to be impressed, affixed or otherwise reproduced.
SECTION 6.4 EXECUTION OF WRITTEN INSTRUMENTS. Contracts, deeds, documents,
and other instruments shall be executed by the Chairman of the Board, the Chief
Executive Officer, the President or a Vice President and attested by the
Secretary or an assistant secretary, unless the Board of Trust Managers shall
designate other authorized signatories or other procedures for their execution.
SECTION 6.5 SIGNING OF CHECKS AND NOTES. Checks, notes, drafts, and
demands for money shall be signed by such person or persons as may be designated
by the Board of Trust Managers, the Chairman of the Board, the Chief Executive
Officer or the President.
SECTION 6.6 VOTING OF SECURITIES HELD IN OTHER ENTITIES. In the absence of
other arrangements by the Board of Trust Managers, securities issued by any
other trust, corporation,
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partnership or other entity and owned or controlled by this Company may be voted
at any securityholders' meeting of such other entity by the Chairman of the
Board of this Company or, if he or she is not present at the meeting, by the
Chief Executive Officer, the President or any Vice President of this Company,
and in the event none of the Chairman of the Board, the Chief Executive Officer,
the President or any Vice President is to be present at a meeting, the
securities may be voted by such person as the Chairman of the Board and the
Secretary of the Company shall, by duly executed proxy, designate to represent
the Company at the meeting.
SECTION 6.7 INDEMNIFICATION AND INSURANCE.
A. DEFINITIONS. In this Section 6.7:
(1) "COMPANY" includes any domestic or foreign predecessor of
the Company in a merger, consolidation, or other transaction in which the
liabilities of the predecessor are transferred to the Company by operation of
law and in any other transaction in which the Company assumes the liabilities of
the predecessor but does not specifically exclude liabilities that are the
subject of this Section 6.7.
(2) "INDEMNITEE" means (i) any present or former Trust
Manager, officer, employee or agent of the Company, (ii) any person who while
serving in any of the capacities referred to in clause (i) hereof served at the
Company's request as a director, officer, partner, venturer, proprietor,
trustee, employee, agent or similar functionary of another real estate
investment trust or foreign or domestic corporation, partnership, joint venture,
sole proprietorship, trust, employee benefit plan or other enterprise, and (iii)
any person nominated or
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designed by (or pursuant to authority granted by) the Trust Managers or any
committee thereof to serve in any of the capacities referred to in clause (i) or
(ii) hereof.
(3) "OFFICIAL CAPACITY" means (i) when used with respect to a
Trust Manager, the office of Trust Manager of the Company and (ii) when used
with respect to a person other than a Trust Manager, the elective or appointive
office of the Company held by such person or the employment or agency
relationship undertaken by such person on behalf of the Company, but in each
case does not include service for any other real estate investment trust or
foreign or domestic corporation or any partnership, joint venture, sole
proprietorship, trust, employee benefit plan or other enterprise.
(4) "PROCEEDING" means any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative, arbitrative
or investigative, any appeal in such an action, suit or proceeding, and any
inquiry or investigation that could lead to such an action, suit or proceeding.
B. INDEMNIFICATION. The Company shall indemnify every Indemnitee against
all judgments, penalties (including excise and similar taxes), fines, amounts
paid in settlement and reasonable expenses actually incurred by the Indemnitee
in connection with any Proceeding in which he was, is or is threatened to be
named defendant or respondent, or in which he was or is a witness without being
named a defendant or respondent, by reason, in whole or in part, of his serving
or having served, or having been nominated or designated to serve, in any of the
capacities referred to in Section 6.7.A(1), if it is determined in accordance
with Section 6.7.D that the Indemnitee (a) conducted himself in good faith, (b)
reasonably believed, in the case of
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conduct in his Official Capacity, that his conduct was in the Company's best
interests and, in all other cases, that his conduct was at least not opposed to
the Company's best interests, and (c) in the case of any criminal proceeding,
had no reasonable cause to believe that his conduct was unlawful; provided,
however, that in the event that an Indemnitee is found liable to the Company or
is found liable on the basis that personal benefit was improperly received by
the Indemnitee the indemnification (i) is limited to reasonable expenses
actually incurred by the Indemnitee in connection with the Proceeding and (ii)
shall not be made in respect of any Proceeding in which the Indemnitee shall
have been found liable for willful or intentional misconduct in the performance
of his duty to the Company. Except as provided in the immediately preceding
proviso to the first sentence of this Section 6.7.B, no indemnification shall be
made under this Section 6.7.B in respect of any Proceeding in which such
Indemnitee shall have been (x) found liable on the basis that personal benefit
was improperly received by him, whether or not the benefit resulted from an
action taken in the Indemnitee's Official Capacity, or (y) found liable to the
Company. The termination of any Proceeding by judgment, order, settlement or
conviction, or on a plea of nolo contendere or its equivalent, is not of itself
determinative that the Indemnitee did not meet the requirements set forth in
clauses (a), (b) or (c) in the first sentence of this Section 6.7.B. An
Indemnitee shall be deemed to have been found liable in respect of any claim,
issue or matter only after the Indemnitee shall have been so adjudged by a court
of competent jurisdiction after exhaustion of all appeals therefrom. Reasonable
expenses shall include, without limitation, all court costs and all fees and
disbursements of attorneys for the Indemnitee.
C. SUCCESSFUL DEFENSE. Without limitation of Section 6.7.B and in addition
to the indemnification provided for in Section 6.7.B, the Company shall
indemnify every
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Indemnitee against reasonable expenses incurred by such person in connection
with any Proceeding in which he is a witness or a named defendant or respondent
because he served in any of the capacities referred to in Section 6.7.A(1), if
such person has been wholly successful, on the merits or otherwise, in defense
of the Proceeding.
D. DETERMINATIONS. Any indemnification under Section 6.7.B
(unless ordered by a court of competent jurisdiction) shall be made by the
Company only upon a determination that indemnification of the Indemnitee is
proper in the circumstances because he has met the applicable standard of
conduct. Such determination shall be made (a) by the Trust Managers by a
majority vote of a quorum consisting of Trust Managers who, at the time of such
vote, are not named defendants or respondents in the Proceeding; (b) if such a
quorum cannot be obtained, then by a majority vote of a committee of the Trust
Managers, duly designated to act in the matter by a majority vote of all Trust
Managers (in which designation Trust Managers who are named defendants or
respondents in the Proceeding may participate), such committee to consist solely
of two (2) or more Trust Managers who, at the time of the committee vote, are
not named defendants or respondents in the Proceeding; (c) by special legal
counsel selected by the Trust Managers or a committee thereof by vote as set
forth in clauses (a) or (b) of this Section 6.7.D or, if the requisite quorum of
all of the Trust Managers cannot be obtained and such committee cannot be
established, by a majority vote of all of the Trust managers (in which Trust
Managers who are named defendants or respondents in the Proceeding may
participate); or (d) by the shareholders in a vote that excludes the shares held
by Trust Managers that are named defendants or respondents in the Proceeding.
Determination as to reasonableness of expenses shall be made in the same manner
as the determination that indemnification is permissible, except that if the
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determination that indemnification is permissible is made by special legal
counsel, determination as to reasonableness of expenses must be made in the
manner specified in clause (c) of the preceding sentence for the selection of
special legal counsel. In the event a determination is made under this Section
6.7.D that the Indemnitee has met the applicable standard of conduct as to some
matters but not as to others, amounts to be indemnified may be reasonably
prorated.
E. ADVANCEMENT OF EXPENSES. Reasonable expenses (including court costs and
attorneys' fees) incurred by an Indemnitee who was or is a witness or was, is or
is threatened to be made a named defendant or respondent in a Proceeding shall
be paid or reimbursed by the Company at reasonable intervals in advance of the
final disposition of such Proceeding, and without making any of the
determinations specified in Section 6.7.D, after receipt by the Company of (a) a
written affirmation by such Indemnitee of his good faith belief that he has met
the standard of conduct necessary for indemnification by the Company under this
Section 6.7 and (b) a written undertaking by or on behalf of such Indemnitee to
repay the amount paid or reimbursed by the Company if it shall ultimately be
determined that he is not entitled to be indemnified by the Company as
authorized in this Section 6.7. Such written undertaking shall be an unlimited
general obligation of the Indemnitee but need not be secured and it may be
accepted without reference to financial ability to make repayment.
Notwithstanding any other provision of this Section 6.7, the Company may pay or
reimburse expenses incurred by an Indemnitee in connection with his appearance
as a witness or other participation in a Proceeding at a time when he is not
named a defendant or respondent in the Proceeding.
F. ENFORCEMENT. If a claim under paragraph B of this Section 6.7 is not
paid in full by the Company within thirty (30) calendar days after a written
claim has been received by
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the Company, the claimant may at any time thereafter (but prior to payment of
the claim) bring suit against the Company to recover the unpaid amount of the
claim and, if successful, in whole or in part, the claimant shall be entitled to
be paid also the expense of prosecuting such claim. It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any, has been tendered to the Company) that the
claimant has not met the standards of conduct which make it permissible under
the Texas REIT Act for the Company to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on the Company. Neither
the failure of the Company (including its Board of Trust Managers, independent
legal counsel or stockholders) to have made a determination prior to the
commencement of such action that indemnification of the claimant is proper in
the circumstances because he or she has met the applicable standard of conduct
set forth in the Texas REIT Act, nor an actual determination by the Company
(including its Board of Trust Managers, independent legal counsel or
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
G. PROCEDURE UPON A CHANGE IN CONTROL. Following any "change in control"
of the Company of the type required to be reported under Item 1 of Form 8-K
promulgated under the Exchange Act, any determination as to entitlement to
indemnification shall be made by independent legal counsel selected by the
claimant, which such independent legal counsel shall be retained by the Board of
Trust Managers on behalf of the Company.
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H. EMPLOYEE BENEFIT PLANS. For purposes of this Section 6.7, the Company
shall be deemed to have requested an Indemnitee to serve an employee benefit
plan whenever the performance by him of his duties to the Company also imposed
or imposes duties on or otherwise involved or involves services by him to the
plan or participants or beneficiaries of the plan. Excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall be deemed fines. Action taken or omitted by an Indemnitee with respect to
an employee benefit plan in the performance of his duties for a purpose
reasonably believed by him to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be for a purpose which is not
opposed to the best interests of the Company.
I. AUTHORIZATION TO PURCHASE INSURANCE. The Company may purchase and
maintain insurance, at its expense, on its own behalf and on behalf of any
person who is or was a trust manager, officer, employee or agent of the Company
or who while a trust manager, officer, employee or agent of the Company is or
was serving at the request of the Company as a trust manager, officer, partner,
trustee, employee or agent of another foreign or domestic corporation,
partnership, joint venture, trust or other enterprise, or employee benefit plan,
against any liability asserted against and incurred by such person in any such
capacity or arising out of such person's position, whether or not the Company
would have the power to indemnify such person against such expense or liability
under the Texas REIT Act.
J. OTHER INDEMNIFICATION AND INSURANCE. The indemnification provided by
this Section 6.7 shall (a) not be deemed exclusive of, or to preclude, any other
rights to which those seeking indemnification may at any time be entitled under
the Company's Declaration of Trust, any law, agreement or vote of shareholders
or disinterested Trust Managers, or otherwise,
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or under any policy or policies of insurance purchased and maintained by the
Company on behalf of any Indemnitee, both as to action in his Official Capacity
and as to action in any other capacity, (b) continue as to a person who has
ceased to be in the capacity by reason of which he was an Indemnitee with
respect to matters arising during the period he was in such capacity, and (c)
inure to the benefit of the heirs, executors and administrators of such a
person.
K. NOTICE. Any indemnification of or advance of expenses to an Indemnitee
in accordance with this Section 6.7 shall be reported in writing to the
shareholders of the Company with or before the notice or waiver of notice of the
next shareholders' meeting or with or before the next submission to shareholders
of a consent to action without a meeting and, in any case, within the
twelve-month period immediately following the date of the indemnification or
advance.
L. CONSTRUCTION. The indemnification provided by this Section 6.7 shall be
subject to all valid and applicable laws, including, without limitation, the
Texas REIT Act, and, in the event this Section 6.7 or any of the provisions
hereof or the indemnification contemplated hereby are found to be inconsistent
with or contrary to any such valid laws, the latter shall be deemed to control
and this Section 6.7 shall be regarded as modified accordingly, and, as so
modified, shall continue in full force and effect.
M. CONTINUING OFFER, RELIANCE, ETC. The provisions of this Section 6.7 (a)
are for the benefit of, and may be enforced by, each Indemnitee of the Company,
the same as if set forth in their entirety in a written instrument duly executed
and delivered by the Company and such Indemnitee and (b) constitute a continuing
offer to all present and future Indemnitees. The
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Company, by its adoption of these Bylaws, (x) acknowledges and agrees that each
Indemnitee of the Company has relied upon and will continue to rely upon the
provisions of this Section 6.7 in becoming, and serving in any of the capacities
referred to in Section 6.7.A(1) hereof, (y) waives reliance upon, and all
notices of acceptance of, such provisions by such Indemnitees and (z)
acknowledges and agrees that no present or future Indemnitee shall be prejudiced
in his right to enforce the provisions of this Section 6.7 in accordance with
their terms by any act or failure to act on the part of the Company.
N. INDEMNIFICATION OF SHAREHOLDERS. The Company shall indemnify each
shareholder against any claim or liability to which the shareholder may become
subject by reason of being or having been a shareholder. The Company shall
reimburse each shareholder for all legal and other expenses reasonably incurred
by such shareholder in connection with any such claim or liability.
O. AUTHORITY TO FURTHER INDEMNIFY. The Company may, to the extent
authorized from time to time by the Trust Managers, grant rights of
indemnification and rights to be paid by the Company the expenses incurred in
defending any proceeding in advance of its final disposition to any employee or
agent of the Company to the fullest extent of the provisions of this Section 6.7
with respect to the indemnification and advancement of expenses of Trust
Managers and officers of the Company.
P. EFFECT OF AMENDMENT. No amendment, modification or repeal of this
Section 6.7 or any provision of this Section 6.7 shall in any manner terminate,
reduce or impair the right of any past, present or future Indemnitees to be
indemnified by the Company, nor the
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obligation of the Company to indemnify any such Indemnitees, under and in
accordance with the provisions of this Section 6.7 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising
from or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may be
asserted.
ARTICLE VII
AMENDMENTS
These Bylaws may be amended, added to, rescinded or repealed at any
meeting of the Board of Trust Managers or of the shareholders, provided that
notice of the proposed change was given (i) in the case of a meeting of the
shareholders, in the notice of the meeting given pursuant to Section 2.4 of
these Bylaws and (ii) in the case of a meeting of the Board of Trust Managers,
in a notice given pursuant to Section 3.4 or 3.6 hereof, as the case may be;
provided, however, that, in the case of amendments by shareholders, except as
otherwise specifically required by law, notwithstanding any other provisions of
these Bylaws or the Declaration of Trust or any provision of law which might
otherwise permit a lesser vote or no vote, but in addition to any affirmative
vote of the holders of any particular class or series of the Voting Shares
required by law, the Declaration of Trust or these Bylaws with respect to any
class or series of Preferred Shares, the affirmative vote of the holders of that
proportion of the Voting Shares necessary to approve an amendment to the
Company's Declaration of Trust pursuant to such Declaration of Trust and the
Texas REIT Act, voting together as a single class, shall be required to alter,
amend or repeal any provision of these Bylaws.
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AMENDMENT TO AMENDED AND RESTATED BYLAWS
(UNANIMOUS CONSENT DATED AS OF SEPTEMBER 23, 1997)
* * * * *
FURTHER RESOLVED, that the Chief Executive Officer and President be,
and hereby is, appointed to serve as the sole member of the New Pricing
Committee, a special committee of this Board of Trust Managers...;
* * * * *
FURTHER RESOLVED, that to the extent that the appointment of the
President and Chief Executive Officer as the sole member of the New Pricing
Committee is inconsistent with the Bylaws, this resolution shall constitute an
amendment of the Bylaws solely for purposes of the appointment and
authorization of the New Pricing Committee.
<PAGE> 43
AMENDMENT OF ARTICLE IV OF AMENDED AND RESTATED BYLAWS
(Excerpted from Minutes of Meeting of Board of Trust Managers held March 9,
1998)
"RESOLVED, that ... Article IV of the Bylaws is hereby amended and
restated in its entirety as set forth in Exhibit A attached hereto, which is
incorporated fully herein by reference ....;"
<PAGE> 44
EXHIBIT A
ARTICLE IV
OFFICERS AND AGENTS
SECTION 4.1 CATEGORIES OF OFFICERS AND AGENTS. The elected officers of
the Company shall consist of a Chairman of the Board, a Vice Chairman of the
Board, a Chief Executive Officer, a President, Treasurer, and one or more
Senior Vice Presidents (each an "Officer" and two or more "Officers"). In
addition, the Board of Trust Managers may from time to time elect, and the
Chairman of the Board, the Vice Chairman of the Board, the Chief Executive
Officer, the President or any of them may appoint, one or more Vice Presidents,
a Secretary, one or more Assistant Secretaries, one or more Assistant
Treasurers, and such other nonexecutive officers, assistant officers, agents
and employees (each an "Agent" and two or more "Agents"; when the terms
"officer" or "officers" without initial capitalization is used in these Bylaws,
then such terms refer to both an Officer and an Agent unless otherwise
specified or the context otherwise requires) as the Board of Trust Managers may
from time to time deem necessary may be elected by the Board of Trust Managers
or appointed by the Chairman of the Board, the Vice Chairman of the Board or
the Chief Executive Officer. The Chairman of the Board and the Vice Chairman of
the Board shall be chosen from among the trust managers. Two or more offices
may be held by the same person, except that a person may not concurrently serve
as the President and a Senior Vice President. Each Officer shall have such
powers and duties as generally pertain to his or her office or offices, subject
to the specific provisions of this Article IV; such Officers also shall have
such powers and duties as from time to time may be conferred by the Board of
Trust Managers or by any committee thereof authorized to do so. Each Agent
shall have only such powers and duties as are prescribed to such Agent by the
Board of Trust Managers, any committee thereof authorized to confer powers and
duties upon such Agent, any executive officer authorized to appoint such Agent
or as specifically set forth in Article IV of these Bylaws. Only Officers
shall be considered "officers" of the Company under the provisions of Section
4.10(F) of the Act; Agents shall not be considered officers but instead shall
be considered non-officerial agents of the Company under the provisions of
Section 4.10(F) of the Act.
SECTION 4.2 ELECTION AND TERM OF OFFICE. The elected Officers of the
Company shall be, and the elected Agents of the Company may be, elected
annually by the Board of Trust Managers at the regular meeting of the Board of
Trust Managers held after each annual meeting of the shareholders. If the
election of Officers shall not be held at such meeting, such election shall be
held as soon thereafter as is convenient. Each Officer and each Agent shall
hold office until his or her successor shall have been duly elected and shall
have qualified, or until his or her death or until he or she shall resign or be
removed from office.
SECTION 4.3 CHAIRMAN OF THE BOARD. The Chairman of the Board shall
preside at all meetings of the shareholders and of the Board of Trust Managers.
The Chairman of the Board shall be responsible for general management of the
affairs of the Company and shall perform all duties incidental to the office
which may be required by law, and all such other duties as may properly be
required by the Board of Trust Managers. Except where by law the signature of
the
<PAGE> 45
Chief Executive Officer or the President is required, the Chairman of the Board
shall possess the same power as the Chief Executive Officer and the President
to sign all certificates, contracts, and other instruments of the Company which
may be authorized by the Board of Trust Managers. The Chairman of the Board
shall make such reports to the Board of Trust Managers and the shareholders as
are properly required by the Board of Trust Managers. The Chairman of the Board
shall see that all orders and resolutions of the Board of Trust Managers and of
any committee thereof are carried into effect.
SECTION 4.4 VICE CHAIRMAN OF THE BOARD. The Vice Chairman of the Board
shall, in the absence of the Chairman, preside at all meetings of the
shareholders and of the Board of Trust Managers. The Vice Chairman of the Board
shall, together with the Chairman of the Board and the Chief Executive Officer,
act in a general executive capacity and shall have such powers and duties as
set forth in these Bylaws or as from time to time may be established by the
Board of Trust Managers. The Vice Chairman of the Board may, in the absence of
or because of the inability to act of the Chairman of the Board, and if so
authorized by the Board of Trust Managers, perform all duties of the Chairman
of the Board. Except where by law the signature of the Chief Executive Officer
or the President is required, the Vice Chairman of the Board shall possess the
same power as the Chief Executive Officer and the President to sign all
certificates, contracts, and other instruments of the Company which may be
authorized by the Board of Trust Managers.
SECTION 4.5 CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall
act in a general executive capacity and shall assist the Chairman of the Board
in the administration and operation of the Company's business and general
supervision of its policies and affairs. The Chief Executive Officer may, in
the absence of or because of the inability to act of the Chairman of the Board,
perform all duties of the Chairman of the Board and, in the absence of or
because of the inability to act of the Chairman of the Board and the Vice
Chairman of the Board, preside at all meetings of shareholders and of the Board
of Trust Managers. The Chief Executive Officer may sign, alone or with the
Secretary or any assistant secretary or any other officer of the Company
properly authorized by the Board of Trust Managers, certificates, contracts and
other instruments of the Company as authorized by the Board of Trust Managers.
SECTION 4.6 PRESIDENT. The President shall be the chief operating
officer of the Company, shall act in a general executive capacity and shall
assist the Chairman of the Board and the Chief Executive Officer in the
administration and operation of the Company's business and general supervision
of its policies and affairs. The President may, in the absence of or because of
the inability to act of the Chairman of the Board and the Chief Executive
Officer, perform all duties of the Chairman of the Board and, in the absence of
or because of the inability to act of the Chairman of the Board, the Vice
Chairman of the Board and the Chief Executive Officer, preside at all meetings
of shareholders and of the Board of Trust Managers. The President may sign,
alone or with the Secretary or any assistant secretary or any other officer of
the Company properly authorized by the Board of Trust Managers, certificates,
contracts and other instruments of the Company as authorized by the Board of
Trust Managers.
<PAGE> 46
SECTION 4.7 SENIOR VICE PRESIDENTS. The Senior Vice President or
Senior Vice Presidents, if any, shall perform the duties of the Chief Executive
Officer and the President in the absence or disability of both the Chief
Executive Officer and the President, and shall have such powers and perform
such other duties as the Board of Trust Managers or the Chairman of the Board
from time to time may prescribe.
SECTION 4.7A VICE PRESIDENTS. The Vice President or Vice Presidents,
if any, shall have only such powers and duties as are prescribed to such Vice
President or Vice Presidents by the Board of Trust Managers, any committee
thereof authorized to confer powers and duties upon such Vice President or Vice
Presidents, or any executive officer authorized to appoint such Vice President
or Vice Presidents.
SECTION 4.8 SECRETARY. The Secretary shall give, or cause to be given,
notice of all meetings of shareholders and trust managers and all other notices
required by law, by the Declaration of Trust or by these Bylaws, and in case of
his or her absence or refusal or neglect so to do, any such notice may be given
by any person thereunto directed by the Chairman of the Board, the Vice
Chairman of the Board, the Chief Executive Officer, the President or the Board
of Trust Managers, upon whose request the meeting is called, as provided in
these Bylaws. The Secretary shall record all the proceedings of the meetings of
the Board of Trust Managers, any committees thereof and the shareholders of the
Company in a book or books to be kept for that purpose, and shall perform such
other duties and have such other powers as from time to time may be prescribed
by the Board of Trust Managers, any committee thereof authorized to confer
powers and duties upon the Secretary, or any executive officer authorized to
appoint Secretary. The Secretary shall have custody of the seal, if any, of the
Company and shall affix the same to all instruments requiring it, when
authorized by the Board of Trust Managers, the Chairman of the Board, the Vice
Chairman of the Board, the Chief Executive Officer or the President, and shall
attest to the same.
SECTION 4.9 TREASURER. The Treasurer shall have custody of all Company
funds and securities and shall keep full and accurate account of receipts and
disbursements in books belonging to the Company. The Treasurer shall deposit
all moneys and other valuable effects in the name and to the credit of the
Company in such depositories as may be designated by the Board of Trust
Managers. The Treasurer shall disburse the funds of the Company in such manner
as may be ordered by the Board of Trust Managers, the Chairman of the Board,
the Vice Chairman of the Board, the Chief Executive Officer or the President,
taking proper vouchers for such disbursements. The Treasurer shall render to
the Chairman of the Board, the Vice Chairman of the Board, the Chief Executive
Officer, the President and the Board of Trust Managers, whenever requested, an
account of all his or her transactions as Treasurer and of the financial
condition of the Company. If required by the Board of Trust Managers, the
Treasurer shall give the Company a bond for the faithful discharge of his or
her other duties in such amount and with such surety as the Board of Trust
Managers shall prescribe. The Treasurer also shall perform such duties and have
such powers as the Board of Trust Managers from time to time may prescribe.
<PAGE> 47
SECTION 4.10 REMOVAL. Any Officer or Agent elected by the Board of
Trust Managers or appointed in the manner prescribed hereby may be removed by a
majority of the members of the Whole Board whenever, in their judgment, the
best interests of the Company would be served thereby. No elected or appointed
Officer or Agent shall have any contractual rights against the Company for
compensation by virtue of such election or appointment beyond the date of the
election or appointment of his or her successor, his or her death, resignation
or removal, whichever event shall first occur, except as otherwise provided in
an employment or similar contract or under an employee deferred compensation
plan.
SECTION 4.11 SALARIES. The Board of Trust Managers shall fix the
salaries of the Chairman of the Board, the Vice Chairman of the Board, the
Chief Executive Officer and the President of the Company, or may delegate the
authority to do so to a duly constituted Executive Compensation Committee. The
salaries of other Officers, Agents and employees of the Company may be fixed by
the Board of Trust Managers, by a committee of the Board, by the Chairman of
the Board or by another officer or committee to whom that function has been
delegated by the Board of Trust Managers or the Chairman of the Board.
SECTION 4.12 VACANCIES. Any newly created office or vacancy in any
office because of death, resignation or removal shall be filled by the Board of
Trust Managers, any committee thereof authorized to appoint an officer to fill
that office, or any executive officer authorized to appoint an officer to fill
that office, or, in the case of an office not specifically provided for in
Section 4.1 hereof, by or in the manner prescribed by the Board of Trust
Managers. The officer so selected shall hold office until his or her successor
is duly selected and shall have qualified, unless he or she sooner resigns or
is removed from office in the manner provided in these Bylaws.
SECTION 4.13 RESIGNATIONS. Any trust manager, Officer or Agent,
whether elected or appointed, may resign at any time by serving written notice
of such resignation on the Chairman of the Board, the Vice Chairman of the
Board, the Chief Executive Officer, the President or the Secretary, and such
resignation shall be deemed to be effective as of the close of business on the
date said notice is received by the Chairman of the Board, the Vice Chairman of
the Board, the Chief Executive Officer, the President or the Secretary. No
action shall be required of the Board of Trust Managers or the shareholders to
make any such resignation effective.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS FOUND ON PAGES 42 AND
43 OF THE COMPANY'S FORM 10-K FOR THE YEAR-TO-DATE, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 66,622
<SECURITIES> 0
<RECEIVABLES> 69,767
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 898,655
<PP&E> 3,423,130
<DEPRECIATION> (278,194)
<TOTAL-ASSETS> 4,179,980
<CURRENT-LIABILITIES> 127,258
<BONDS> 1,710,124
0
0
<COMMON> 1,179
<OTHER-SE> 2,196,138
<TOTAL-LIABILITY-AND-EQUITY> 4,179,980
<SALES> 0
<TOTAL-REVENUES> 447,373
<CGS> 0
<TOTAL-COSTS> 249,651
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 86,441
<INCOME-PRETAX> 117,341
<INCOME-TAX> 0
<INCOME-CONTINUING> 117,341
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 117,341
<EPS-PRIMARY> 1.25
<EPS-DILUTED> 1.20
</TABLE>
