As filed with the Securities and Exchange Commission, via EDGAR,
on December 22, 1997
- ------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
LIBERTY PROPERTY TRUST
(Exact name of registrant as specified in its charter)
Maryland 23-7768996
(State of incorporation (IRS Employer
or organization) Identification No.)
65 VALLEY STREAM PARKWAY, SUITE 100
MALVERN, PENNSYLVANIA 19355
(Address of principal executive offices) (Zip Code)
If this form relates to the registration of a class of securities
pursuant to Section 12(b) of the Exchange Act and and is effective
pursuant to General Instruction A.(c), please check the following
box. /x/
If this form relates to the registration of a class of securities
pursuant to Section 12(g) of the Exchange Act and is effective pursuant
to General Instruction A.(d) please check the following box. / /
Securities Act registration statement file number to which this form
relates: _____________ (If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered each class is to be Registered
Preferred Share Purchase Rights New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
Item 1. Description of Securities to be Registered.
On December 17, 1997, the Board of Trustees of Liberty Property Trust
(the "Trust") declared a dividend distribution of one preferred share
purchase right (each, a "Right") for each outstanding Common Share,
$0.001 par value (each, a "Common Share"), of the Trust. The
distribution is payable on December 31, 1997 to shareholders of record
as of the close of business on December 31, 1997. Each Right entitles
the registered holder thereof, at any time following the Distribution
Date (as defined), to purchase from the Trust a unit (each, a "Unit")
consisting of one one-thousandth of a share of Series A Junior
Participating Preferred Shares, $0.0001 par value (the "Preferred
Shares"), at a price of $100.00 per Unit (the "Purchase Price"), subject
to adjustment. The description and terms of the Rights are set forth in
the Rights Agreement (the "Rights Agreement"), dated as of December 17,
1997, between the Trust and Bank Boston, N.A., as Rights Agent (the
"Rights Agent").
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Rights Certificate will
be distributed. The Rights will separate from the Common Shares and a
Distribution Date will occur upon the earlier of (i) ten (10) days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of 10% or more of the outstanding
Common Shares (the "Share Acquisition Date") or (ii) ten (10) business
days (or such later date as the Board of Trustees shall determine)
following the commencement of a tender offer or exchange offer that
would result in a person or group beneficially owning 10% or more of
such outstanding Common Shares. The definition of Acquiring Person
excludes any Exempted Person (as defined below). Until the Distribution
Date, (i) the Rights will be evidenced by the Common Shares certificates
and will be transferred with and only with such Common Shares
certificates, (ii) new Common Shares certificates will contain a
notation incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates for Common Shares outstanding
will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate.
On the date the Board of Trustees authorized the Rights dividend (the
"Rights Dividend Declaration Date"), FMR Corp. was deemed to be an
"Exempted Person" because the Trust previously authorized FMR Corp. to
own up to 13% of the outstanding Common Shares. However, FMR Corp. will
no longer be deemed to be an Exempted Person and will be deemed to be an
Acquiring Person if FMR Corp., together with all affiliates and
associates of FMR Corp., becomes the beneficial owner of more than 13%
of the then outstanding Common Shares. A purchaser, assignee or
transferee of the Common Shares (or options or warrants exercisable for
Common Shares) from an Exempted Person will not thereby become an
Exempted Person.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on December 31, 2007 unless earlier
redeemed by the Trust as described below. At no time will the Rights
have any voting power.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Shares as of the close
of business on the Distribution Date and, thereafter, the separate
Rights Certificates alone will represent the Rights. Except as
otherwise determined by the Board of Trustees, only Common Shares issued
prior to the Distribution Date will be issued with Rights.
In the event that an Acquiring Person becomes the beneficial owner of
10% or more of the then outstanding Common Shares (unless such
acquisition is made pursuant to a tender or exchange offer for all
outstanding shares of the Trust, at a price determined by at least 75%
of the trustees of the Trust to be fair and otherwise in the best
interest of the Trust and its shareholders) after receiving advice from
one or more investment banking firms (a "Qualifying Offer"), each holder
of a Right will thereafter have the right to receive, upon exercise,
Common Shares (or, in certain circumstances, cash, property or other
securities of the Trust), having a value equal to two times the Exercise
Price (as defined below) of the Right. The Exercise Price is the
Purchase Price multiplied by the number of Units associated with each
Right (initially, one). Notwithstanding any of the foregoing, following
the occurrence of an Acquiring Person becoming such ("Flip-In Event"),
all Rights that are, or (under certain circumstances specified in the
Rights Agreement) were, beneficially owned by any Acquiring Person will
be null and void. However, Rights are not exercisable following the
occurrence of a Flip-In Event until such time as the Rights are no
longer redeemable by the Trust as set forth below.
In the event that following the Share Acquisition Date, (i) the Trust
engages in a merger or business combination transaction in which the
Trust is not the successor (other than a merger consummated pursuant to
a Qualifying Offer); (ii) the Trust engages in a merger or business
combination transaction in which the Trust is the successor and the
Common Shares are changed or exchanged; or (iii) 50% or more of the
Trust's assets or earning power is sold or transferred, each holder of a
Right (except Rights which have previously been voided as set forth
above) shall thereafter have the right to receive, upon exercise of the
Right, common shares of the acquiring company having a value equal to
two times the Exercise Price of the Right.
The Purchase Price payable, and the number of Units of Preferred Shares
or other securities or property issuable upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) if holders of the
Preferred Shares are granted certain rights or warrants to subscribe for
Preferred Shares or convertible securities at less than the current
market price of the Preferred Shares, or (iii) upon the distribution to
holders of the Preferred Shares of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above).
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Units will be issued and, in lieu thereof,
an adjustment in cash will be made based on the market price of the
Preferred Shares on the last trading date prior to the date of exercise.
At any time after the Share Acquisition Date, the Board of Trustees of
the Trust may exchange the Rights (other than Rights owned by an
Acquiring Person), in whole or in part, at an exchange ratio equal to
(i) a number of Common Shares per Right with a value equal to the spread
between the value of the number of Common Shares for which the Rights
may then be exercised and the Purchase Price or (ii) if prior to the
acquisition by the Acquiring Person of 50% or more of the then
outstanding Common Shares, one Common Share per Right (subject to
adjustment). Any such exchange shall require the concurrence of at
least 75% of the Trustees.
At any time until ten (10) days following the Share Acquisition Date,
the Trust may redeem the Rights in whole, but not in part, at a price of
$0.0001 per Right. Under certain circumstances, the decision to redeem
shall require the concurrence of at least 75% of the members of the
Board of Trustees of the Trust. Immediately upon the action of the
Board of Trustees ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to receive
the $0.0001 redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Trust, including, without limitation, the
right to vote or to receive dividends. While the distribution of the
Rights will not be taxable to shareholders or to the Trust, shareholders
may, depending upon the circumstances, recognize taxable income in the
event that the Rights become exercisable for Common Shares (or other
consideration) of the Trust as set forth above or in the event the
Rights are redeemed.
Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended
by the Board of Trustees of the Trust prior to the Distribution Date.
After the Distribution Date, the provisions of the Rights Agreement may
be amended by the Board of Trustees (in certain circumstances, with the
approval of at least 75% of the trustees) in order to cure any
ambiguity, to make changes that do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or
to shorten or lengthen any time period under the Rights Agreement;
PROVIDED, HOWEVER, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable.
This Summary of Rights does not purport to be complete and is qualified
in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
Item 2. Exhibits.
Number Exhibit
1 Rights Agreement (the "Rights Agreement") dated as
December 17, 1997, by and between the Trust and the Rights Agent
(including as Exhibit A thereto the Form of Articles Supplementary
Relating to Designation, Preferences, and Rights of Series A Junior
Participating Preferred Shares of Liberty Property Trust, as Exhibit B
thereto the Form of Rights Certificate and as Exhibit C thereto the
Summary of Rights to Purchase Series A Junior Participating Preferred
Shares).
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto
duly authorized.
LIBERTY PROPERTY TRUST
Dated: December 22, 1997 By: /s/ JOSEPH P. DENNY
--------------------------------------
Name: Joseph P. Denny
Title: President
INDEX OF EXHIBITS
Number Exhibit Page
1 Rights Agreement (the "Rights Agreement")
dated as of December 17, 1997, by and between
the Trust and the Rights Agent (including as
Exhibit A thereto the Form of Articles
Supplementary Relating to Designation,
Preferences, and Rights of Series A Junior
Participating Preferred Shares of Liberty
Property Trust, as Exhibit B thereto the Form of
Rights Certificate and as Exhibit C thereto the
Summary of Rights to Purchase Series A Junior
Participating Preferred Shares).
Exhibit 1
LIBERTY PROPERTY TRUST
and
BANK BOSTON, N.A.
as
Rights Agent
Rights Agreement
Dated as of December 17, 1997
Table of Contents Page
Certain Definitions 1
Appointment of Rights Agent 4
Issue of Rights Certificates 4
Form of Rights Certificates 5
Countersignature and Registration 6
Transfer, Split Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates 7
Exercise of Rights; Purchase Price; Expiration Date of Rights 7
Cancellation and Destruction of Rights Certificates 9
Reservation and Availability of Shares 9
Preferred Shares Record Date 11
Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights 11
Certificate of Adjusted Purchase Price or Number of Shares 18
Consolidation, Merger or Sale or Transfer of Assets or Earning Power 18
Fractional Rights and Fractional Shares 21
Rights of Action 22
Agreement of Rights Holders 22
Rights Certificate Holder Not Deemed a Shareholder 23
Concerning the Rights Agent 23
Merger or Consolidation or Change of Name of Rights Agent 23
Duties of Rights Agent 24
Change of Rights Agent 26
Issuance of New Rights Certificates 26
Redemption and Termination 27
Notice of Certain Events 28
Notices 29
Supplements and Amendments 29
Exchange 30
Successors 32
Determinations and Actions by the Board of Trustees, etc. 32
Benefits of this Agreement 32
Severability 32
Governing Law 33
Counterparts 33
Descriptive Headings 33
Exhibit A -- Form of Certificate of Designation, Preferences
and Rights of Series A Junior Participating
Preferred Shares
Exhibit B -- Form of Rights Certificate
Exhibit C -- Summary of Rights to Purchase Series A
Junior Participating Preferred Shares
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of December 17, 1997 (the "Agreement"),
between Liberty Property Trust, a Maryland real estate investment trust
(the "Trust"), and Bank Boston, N.A. (the "Rights Agent").
W I T N E S S E T H :
WHEREAS, on December 17, 1997 (the "Rights Dividend Declaration Date"),
the Board of Trustees of the Trust authorized and declared a dividend
distribution of one Right for each common share, par value $0.001 per
share, of the Trust (the "Common Shares") outstanding at the close of
business on December 31, 1997 (the "Record Date"), and has authorized
the issuance of one Right (as such number may hereinafter be adjusted
pursuant to the provisions of Section 11(p) hereof) for each Common
Share issued between the Record Date (whether originally issued or
delivered from the Trust's treasury) and the Distribution Date (as
defined in Section 3 hereof), each Right initially representing the
right to purchase one one-thousandth of a share (a "Unit") of Series A
Junior Participating Preferred Shares (the "Preferred Shares") of the
Trust having the rights, powers and preferences set forth in the form of
Articles Supplementary attached hereto as Exhibit A, upon the terms and
subject to the conditions hereinafter set forth (the "Rights").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 10% or more of the Common Shares then outstanding,
but shall not include (i) the Trust, (ii) any Subsidiary of the Trust,
(iii) any employee benefit plan of the Trust or of any Subsidiary of the
Trust, (iv) any Person organized, appointed or established by the Trust
for or pursuant to the terms of any such plan, or (v) any Exempted
Person.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended and in
effect on the date of this Agreement (the "Exchange Act").
(c) A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether
such right is exercisable immediately or only after the passage of time
or the occurrence of an event) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," (A) securities tendered
pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange, (B) securities issuable upon
exercise of Rights at any time prior to the occurrence of a Triggering
Event, (C) securities issuable upon exercise of Rights from and after
the occurrence of a Triggering Event, which Rights were acquired by such
Person or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22 hereof (the
"Original Rights") or pursuant to Section 11(i) hereof in connection
with an adjustment made with respect to any Original Rights, or (D)
securities issued or issuable pursuant to any employee benefit plan of
the Trust or any Subsidiary of the Trust or any employment agreement,
arrangement or other understanding between the Trust or any Subsidiary
of the Trust and any Person or any of such Person's Affiliates or
Associates; or
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of
or has "beneficial ownership" of (as determined pursuant to Rule 13d-3
of the General Rules and Regulations under the Exchange Act), including
pursuant to any agreement, arrangement or understanding, whether or not
in writing; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security under this
subparagraph (ii) as a result of (A) an agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding: (1) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to, and
in accordance with, the applicable provisions of the General Rules and
Regulations under the Exchange Act, and (2) is not also then reportable
by such Person on Schedule 13D under the Exchange Act (or any comparable
or successor report), or (B) securities issued or issuable pursuant to
any employee benefit plan of the Trust or any Subsidiary of the Trust or
any employment agreement, arrangement or other understanding between the
Trust or any Subsidiary of the Trust and any Person or any of such
Person's Affiliates or Associates; or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which such
Person (or any of such Person's Affiliates or Associates) has any
agreement, arrangement or understanding (whether or not in writing), for
the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii) of this
paragraph (c)) or disposing of any voting securities of the Trust;
provided, however, that nothing in this paragraph (c) shall cause a
Person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own," any securities acquired
through such Person's participation in good faith in a firm commitment
underwriting until the expiration of forty (40) days after the date of
such acquisition; and provided, further, however, that any shareholder
of the Trust, with Affiliates, Associates or other Person(s) who may be
deemed representatives of it serving as Trustee(s) or officer(s) of the
Trust, shall not be deemed to beneficially own securities held by other
Persons as a result of (i) Persons affiliated or otherwise associated
with such shareholder serving as trustee(s) or officer(s) or taking any
action in connection therewith, (ii) discussing the status of its shares
with the Trust or other shareholders of the Trust similarly situated or
(iii) voting or acting in a manner similar to other shareholder(s)
similarly situated, absent a specific finding by the Board of Trustees
of an express agreement among such shareholders to act in concert with
one another as shareholders so as to cause, in the good faith judgment
of the Board of Trustees, each such shareholder to be the Beneficial
Owner of the shares held by the other shareholder(s).
(d) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the Commonwealth of Pennsylvania
are authorized or obligated by law or executive order to close.
(e) "Close of business" on any given date shall mean 5:00 P.M.,
Philadelphia time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., Philadelphia time, on the
next succeeding Business Day.
(f) "Common Shares" shall have the meaning set forth in the recital to
this Agreement, except that "Common Shares" when used with reference to
any Person other than the Trust shall mean the capital stock of such
Person with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of
such Person.
(g) "Exempted Person" shall mean FMR Corp.; provided, however, that FMR
Corp. shall no longer be deemed to be an Exempted Person and shall be
deemed an Acquiring Person if FMR Corp., together with all Affiliates
and Associates of FMR Corp., becomes the Beneficial Owner of more than
13% of the then outstanding Common Shares. A purchaser, assignee or
transferee of the Common Shares from an Exempted Person shall not
thereby become an Exempted Person.
(h) "Person" shall mean any individual, firm, corporation, limited
liability company, partnership or other entity.
(i) "Preferred Shares" shall mean Series A Junior Participating
Preferred Shares of the Trust, and, to the extent that there are not a
sufficient number of Series A Junior Participating Preferred Shares
authorized to permit the full exercise of the Rights, any other series
of Preferred Shares of the Trust designated for such purpose containing
terms substantially similar to the terms of the Series A Junior
Participating Preferred Shares.
(j) "Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii) hereof.
(k) "Section 13 Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) hereof.
(l) "Share Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the
Exchange Act) by the Trust or an Acquiring Person that an Acquiring
Person has become such.
(m) "Subsidiary" shall mean, with reference to any Person, any
corporation of which an amount of voting securities sufficient to elect
at least a majority of the directors of such corporation is beneficially
owned, directly or indirectly, by such Person or otherwise controlled by
such Person.
(n) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. Appointment of Rights Agent. The Trust hereby appoints the
Rights Agent to act as agent for the Trust in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Trust may from time to time appoint such Co-Rights
Agents as it may deem necessary or desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earlier of (i) the close of business on the tenth day
after the Share Acquisition Date (or, if the tenth day after the Share
Acquisition Date occurs before the Record Date, the close of business on
the Record Date), or (ii) the close of business on the tenth business
day (or such later date as the Board of Trustees of the Trust shall
determine) after the date that a tender or exchange offer by any Person
(other than any Exempted Person, the Trust, any Subsidiary of the Trust,
any employee benefit plan of the Trust or of any Subsidiary of the
Trust, or any Person organized, appointed or established by the Trust
for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules
and Regulations under the Exchange Act, if upon consummation thereof,
such Person would be the Beneficial Owner of 10% or more of the Common
Shares then outstanding (the earlier of (i) and (ii) being herein
referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section 3)
by the certificates for the Common Shares registered in the names of the
holders of the Common Shares (which certificates for Common Shares shall
be deemed also to be certificates for Rights) and not by separate
certificates, and (y) the Rights will be transferable only in connection
with the transfer of the underlying Common Shares (including a transfer
to the Trust). As soon as practicable after the Distribution Date, the
Rights Agent will send by first-class, insured, postage prepaid mail, to
each record holder of the Common Shares as of the close of business on
the Distribution Date, at the address of such holder shown on the
records of the Trust, one or more rights certificates, in substantially
the form of Exhibit B hereto (the "Rights Certificates"), evidencing one
right for each Common Share so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per
Common Share has been made pursuant to Section 11(p) hereof, at the time
of distribution of the Rights Certificates, the Trust shall make the
necessary and appropriate rounding adjustments (in accordance with
Section 14(a) hereof) so that Rights Certificates representing only
whole numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the Rights
will be evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the Trust
will send a copy of a Summary of Rights, in substantially the form
attached hereto as Exhibit C (the "Summary of Rights"), by first-class,
postage prepaid mail, to each record holder of the Common Shares as of
the close of business on the Record Date, at the address of such holder
shown on the records of the Trust. With respect to certificates for the
Common Shares outstanding as of the Record Date, until the Distribution
Date, the Rights will be evidenced by such certificates for the Common
Shares and the registered holders of the Common Shares shall also be the
registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date (as such term is defined in
Section 7 hereof), the transfer of any certificates representing Common
Shares in respect of which Rights have been issued shall also constitute
the transfer of the Rights associated with such Common Shares.
(c) Rights shall be issued in respect of all Common Shares which are
issued (whether originally issued or from the Trust's treasury) after
the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date. Certificates representing such Common Shares shall
also be deemed to be certificates for Rights, and shall bear the
following legend: "This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in the Rights Agreement
between Liberty Property Trust (the "Trust") and Bank Boston, N.A. (the
"Rights Agent"), dated as of December 17, 1997 (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference and a
copy of which is on file at the principal offices of the Rights Agent.
Under certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer be
evidenced by this certificate. The Rights Agent will mail to the holder
of this certificate a copy of the Rights Agreement, as in effect on the
date of mailing, without charge promptly after receipt of a written
request therefor. Under certain circumstances set forth in the Rights
Agreement, Rights issued to, or held by, any Person who is, was or
becomes an Acquiring Person or any Affiliate or Associate thereof (as
such terms are defined in the Rights Agreement), whether currently held
by or on behalf of such Person or by any subsequent holder, may become
null and void." With respect to such certificates containing the
foregoing legend, until the earlier of (i) the Distribution Date or (ii)
the Expiration Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates
alone and registered holders of Common Shares shall also be the
registered holders of the associated Rights, and the transfer of any of
such certificates shall also constitute the transfer of the Rights
associated with the Common Shares represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase and
of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may have
such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Trust may deem appropriate and as
are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed, or
to conform to usage. Subject to the provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever distributed, shall
be dated as of the Record Date and on their face shall entitle the
holders thereof to purchase such number of one one-thousandths of a
Preferred Share as shall be set forth therein at the price set forth
therein (such exercise price per one one-thousandth of a share, the
"Purchase Price"), but the amount and type of securities purchasable
upon the exercise of each Right and the Purchase Price thereof shall be
subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section
22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests
in such Acquiring Person or to any Person with whom such Acquiring
Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of
Trustees of the Trust has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance of
Section 7(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this sentence,
shall contain (to the extent feasible) the following legend: "The
Rights represented by this Rights Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate
or Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances
specified in Section 7(e) of such Agreement."
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Trust by
its Chairman of the Board, its Vice Chairman, its Chief Executive
Officer, its President or any Vice President, either manually or by
facsimile signature, and shall have affixed thereto the Trust's seal or
a facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Trust, either manually or by facsimile
signature. The Rights Certificates shall be countersigned by the Rights
Agent, either manually or by facsimile signature, and shall not be valid
for any purpose unless so countersigned. In case any officer of the
Trust who shall have signed any of the Rights Certificates shall cease
to be such officer of the Trust before countersignature by the Rights
Agent and issuance and delivery by the Trust, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and
delivered by the Trust with the same force and effect as though the
person who signed such Rights Certificates had not ceased to be such
officer of the Trust; and any Rights Certificates may be signed on
behalf of the Trust by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of the
Trust to sign such Rights Certificate, although at the date of the
execution of this Rights Agreement any such person was not such an
officer.
(b) Following the Distribution Date, the Rights Agent shall keep or
cause to be kept, at its principal office or offices designated as the
appropriate place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights Certificates
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the date of
each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e) and Section
14 hereof, at any time after the close of business on the Distribution
Date, and at or prior to the close of business on the Expiration Date,
any Rights Certificate or Certificates may be transferred, split up,
combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of one one-
thousandths of a Preferred Share (or, following a Triggering Event,
Common Shares, other securities, cash or other assets, as the case may
be) as the Rights Certificate or Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase.
Any registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate or Certificates shall make such request
in writing delivered to the Rights Agent, and shall surrender the Rights
Certificate or Certificates to be transferred, split up, combined or
exchanged at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Trust
shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificate until the registered
holder shall have completed and signed the certificate contained in the
form of assignment on the reverse side of such Rights Certificate and
shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Trust shall reasonably request. Thereupon the
Rights Agent shall, subject to Section 4(b), Section 7(e) and Section 14
hereof, countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested.
The Trust may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Trust and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them,
and reimbursement to the Trust and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Trust will
execute and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu
of the Rights Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c), Section
11(a)(iii) and Section 23(a) hereof) in whole or in part at any time
after the Distribution Date upon surrender of the Rights Certificate,
with the form of election to purchase and the certificate on the reverse
side thereof duly executed, to the Rights Agent at the principal office
or offices of the Rights Agent designated for such purpose, together
with payment of the aggregate Purchase Price with respect to the total
number of one one-thousandths of a Preferred Share (or other securities,
cash or other assets, as the case may be) as to which such surrendered
Rights are then exercisable, at or prior to the earlier of (i) the close
of business on December 31, 2007, (the "Final Expiration Date"), or (ii)
the time at which the Rights are redeemed as provided in Section 23
hereof (the earlier of (i) and (ii) being herein referred to as the
"Expiration Date").
(b) The Purchase Price for each one one-thousandth of a Preferred Share
pursuant to the exercise of a Right shall initially be $100.00, and
shall be subject to adjustment from time to time as provided in Sections
11 and 13(a) hereof and shall be payable in accordance with paragraph
(c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment, with respect to each Right so
exercised, of the Purchase Price per one one-thousandth of a Preferred
Share (or other shares, securities, cash or other assets, as the case
may be) to be purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to Section
20(k) hereof, thereupon promptly (i) (A) requisition from any transfer
agent of the Preferred Shares (or make available, if the Rights Agent is
the transfer agent for such shares) certificates for the total number of
one one-thousandths of a Preferred Share to be purchased and the Trust
hereby irrevocably authorizes its transfer agent to comply with all such
requests, or (B) if the Trust shall have elected to deposit the total
number of Preferred Shares issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-thousandths of a
Preferred Share as are to be purchased (in which case certificates for
the Preferred Shares represented by such receipts shall be deposited by
the transfer agent with the depositary agent) and the Trust shall direct
the depositary agent to comply with such request, (ii) requisition from
the Trust the amount of cash, if any, to be paid in lieu of fractional
shares in accordance with Section 14 hereof, (iii) after receipt of such
certificates or depositary receipts, cause the same to be delivered to,
or upon the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder,
and (iv) after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights Certificate. The
payment of the Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii) hereof) shall be made in cash or by certified bank
check or bank draft payable to the order of the Trust. In the event
that the Trust is obligated to issue other securities (including Common
Shares) of the Trust, pay cash and/or distribute other property pursuant
to Section 11(a) hereof, the Trust will make all arrangements necessary
so that such other securities, cash and/or other property are available
for distribution by the Rights Agent, if and when appropriate. The
Trust reserves the right to require prior to the occurrence of a
Triggering Event that, upon any exercise of Rights, a number of Rights
be exercised so that only whole Preferred Shares would be issued.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or
upon the order of, the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder,
subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which
the Board of Trustees of the Trust has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect
the avoidance of this Section 7(e), shall become null and void without
any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Trust shall use all reasonable efforts
to insure that the provisions of this Section 7(e) and Section 4(b)
hereof are complied with but shall have no liability to any holder of
Rights Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Trust shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in
the form of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Trust shall
reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Trust or
any of its agents, be delivered to the Rights Agent for cancellation or
in canceled form, or, if surrendered to the Rights Agent, shall be
canceled by it, and no Rights Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Agreement. The Trust shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire, any
other Rights Certificate purchased or acquired by the Trust otherwise
than upon the exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Trust, or shall, at the written
request of the Trust, destroy such canceled Rights Certificates, and in
such case shall deliver a certificate of destruction thereof to the
Trust.
Section 9. Reservation and Availability of Shares.
(a) The Trust covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Preferred Shares
(and, following the occurrence of a Triggering Event, out of its
authorized and unissued Common Shares and/or other securities or out of
its authorized and issued shares held in its treasury), the number of
Preferred Shares (and, following the occurrence of a Triggering Event,
Common Shares and/or other securities) that, as provided in this
Agreement, including Section 11(a)(iii) hereof, will be sufficient to
permit the exercise in full of all outstanding Rights.
(b) So long as the Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares and/or other securities) issuable and
deliverable upon the exercise of the Rights may be listed on any
national securities exchange, the Trust shall use its best efforts to
cause, from and after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) The Trust shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a
Section 11(a)(ii) Event on which the consideration to be delivered by
the Trust upon exercise of the Rights has been determined in accordance
with Section 11(a)(iii) hereof, a registration statement under the
Securities Act of 1933 (the "Act") with respect to the securities
purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting
the requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities, and (B)
the date of the expiration of the Rights. The Trust will also take such
action as may be appropriate under, or to ensure compliance with, the
securities or "blue sky" laws of the various states in connection with
the exercisability of the Rights. The Trust may temporarily suspend,
for a period of time not to exceed ninety (90) days after the date set
forth in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Trust shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in
effect. In addition, if the Trust shall determine that a registration
statement is required following the Distribution Date, the Trust may
temporarily suspend the exercisability of the Rights until such time as
a registration statement has been declared effective. Notwithstanding
any provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction if the requisite qualification in such
jurisdiction shall not have been obtained, the exercise thereof shall
not be permitted under applicable law or a registration statement shall
not have been declared effective.
(d) The Trust covenants and agrees that it will take all such action as
may be necessary to ensure that all one one-thousandths of a Preferred
Share (and, following the occurrence of a Triggering Event, Common
Shares and/or other securities) delivered upon exercise of Rights shall,
at the time of delivery of the certificates for such shares (or Units)
(subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Trust further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number of one one-
thousandths of a Preferred Share (or Common Shares and/or other
securities, as the case may be) upon the exercise of Rights. The Trust
shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Rights Certificates to
a Person other than, or the issuance or delivery of a number of one one-
thousandths of a Preferred Share (or Common Shares and/or other
securities, as the case may be) in respect of a name other than that of,
the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for a
number of one one-thousandths of a Preferred Share (or Common Shares
and/or other securities, as the case may be) in a name other than that
of the registered holder upon the exercise of any Rights until such tax
shall have been paid (any such tax being payable by the holder of such
Rights Certificate at the time of surrender) or until it has been
established to the Trust's satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each Person in whose name
any certificate for a number of one one-thousandths of a Preferred Share
(or Common Shares and/or other securities, as the case may be) is issued
upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such fractional Preferred Shares (or
Common Shares and/or other securities, as the case may be) represented
thereby on, and such certificate shall be dated, the date upon which the
Rights Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and all applicable transfer taxes) was
made; provided, however, that if the date of such surrender and payment
is a date upon which the Preferred Shares (or Common Shares and/or other
securities, as the case may be) transfer books of the Trust are closed,
such Person shall be deemed to have become the record holder of such
shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Shares
(or Common Shares and/or other securities, as the case may be) transfer
books of the Trust are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Rights Certificate shall not be
entitled to any rights of a shareholder of the Trust with respect to
shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be
entitled to receive any notice of any proceedings of the Trust, except
as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are subject
to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Trust shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares into a smaller number of
shares, or (D) issue any shares in a reclassification of the Preferred
Shares (including any such reclassification in connection with a
consolidation or merger in which the Trust is the successor in the
merger or consolidation), except as otherwise provided in this Section
11(a) and Section 7(e) hereof, the Purchase Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
Preferred Shares or capital stock, as the case may be, issuable on such
date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of
the Purchase Price then in effect, the aggregate number and kind of
Preferred Shares or shares, as the case may be, which, if such Right had
been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Trust were open, such holder
would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification.
If an event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event any Person (other than an Exempted Person, the
Trust, any Subsidiary of the Trust, any employee benefit plan of the
Trust or of any Subsidiary of the Trust, or any Person organized,
appointed or established by the Trust for or pursuant to the terms of
any such plan), alone or together with its Affiliates and Associates,
shall, at any time after the Rights Dividend Declaration Date, become
the Beneficial Owner of 10% or more of the Common Shares then
outstanding, unless the event causing the 10% threshold to be crossed is
a transaction set forth in Section 13(a) hereof or is an acquisition of
Common Shares pursuant to a tender offer or an exchange offer for all
outstanding Common Shares at a price and on terms determined by at least
75% of the members of the Board of Trustees of the Trust, after
receiving advice from one or more investment banking firms, to be (a) at
a price which is fair to shareholders (taking into account all factors
which such members of the Board deem relevant, including, without
limitation, prices which could reasonably be achieved if the Trust or
its assets were sold on an orderly basis designed to realize maximum
value) and (b) otherwise in the best interests of the Trust and its
shareholders (hereinafter a "Qualifying Offer"), then, promptly
following the occurrence of such event, proper provision shall be made
so that each holder of a Right (except as provided below and in Section
7(e) hereof) shall thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the terms
of this Agreement, in lieu of a number of one one-thousandths of a
Preferred Share, such number of Common Shares of the Trust as shall
equal the result obtained by (x) multiplying the then current Purchase
Price by the then number of one one-thousandths of a Preferred Share for
which a Right was exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event, and (y) dividing that product (which,
following such first occurrence, shall thereafter be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement)
by 50% of the current market price (determined pursuant to Section 11(d)
hereof) per Common Share on the date of such first occurrence (such
number of shares, the "Adjustment Shares").
(iii) In the event that the number of Common Shares which are
authorized by the Trust's Declaration of Trust but not outstanding or
reserved for issuance for purposes other than upon exercise of the
Rights are not sufficient to permit the exercise in full of the Rights
in accordance with the foregoing subparagraph (ii) of this Section
11(a), the Trust shall (A) determine the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value"), and (B)
with respect to each Right (subject to Section 7(e) hereof), make
adequate provision to substitute for the Adjustment Shares, upon the
exercise of a Right and payment of the applicable Purchase Price, (1)
cash, (2) a reduction in the Purchase Price, (3) Common Shares or other
equity securities of the Trust (including, without limitation, preferred
shares, or units of preferred shares, such as the Preferred Shares,
which the Board of Trustees of the Trust has deemed to have essentially
the same value or economic rights as Common Shares (such preferred
shares being referred to as "Common Shares Equivalents")), (4) debt
securities of the Trust, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value (less
the amount of any reduction in the Purchase Price), where such aggregate
value has been determined by the Board based upon the advice of a
nationally recognized investment banking firm selected by the Board;
provided, however, that if the Trust shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty
(30) days following the later of (x) the first occurrence of a Section
11(a)(ii) Event and (y) the date on which the Trust's right of
redemption pursuant to Section 23(a) expires (the later of (x) and (y)
being referred to herein as the "Section 11(a)(ii) Trigger Date"), then
the Trust shall be obligated to deliver, upon the surrender for exercise
of a Right and without requiring payment of the Purchase Price, Common
Shares (to the extent available) and then, if necessary, cash, which
shares and/or cash have an aggregate value equal to the Spread. For
purposes of the preceding sentence, the term "Spread" shall mean the
excess of (i) the Current Value over (ii) the Purchase Price. If the
Board of Trustees of the Trust determines in good faith that it is
likely that sufficient additional Common Shares could be authorized for
issuance upon exercise in full of the Rights, the thirty-day period set
forth above may be extended to the extent necessary, but not more than
ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Trust may seek shareholder approval for the authorization of such
additional shares (such thirty-day period, as it may be extended, is
herein called the "Substitution Period"). To the extent that action is
to be taken pursuant to the first and/or third sentences of this Section
11(a)(iii), the Trust (1) shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding Rights, and
(2) may suspend the exercisability of the Rights until the expiration of
the Substitution Period in order to seek such shareholder approval for
such authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension, the
Trust shall issue a public announcement stating that the exercisability
of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of each Adjustment Share
shall be the Current Market Price per share of the Common Shares on the
Section 11(a)(ii) Trigger Date and the per share or per unit value of
any Common Shares Equivalent shall be deemed to equal the Current Market
Price per share of the Common Shares on such date.
(b) In case the Trust shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling
them to subscribe for or purchase (for a period expiring within forty-
five (45) calendar days after such record date) Preferred Shares (or
shares having the same rights, privileges and preferences as the
Preferred Shares ("equivalent preferred shares")) or securities
convertible into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or per share of equivalent preferred shares
(or having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the current
market price (as determined pursuant to Section 11(d) hereof) per
Preferred Share on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares outstanding
on such record date, plus the number of Preferred Shares which the
aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered)
would purchase at such current market price, and the denominator of
which shall be the number of Preferred Shares outstanding on such record
date, plus the number of additional Preferred Shares and/or equivalent
preferred shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by delivery of
consideration part or all of which may be in a form other than cash, the
value of such consideration shall be as determined in good faith by the
Board of Trustees of the Trust, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights. Preferred Shares owned by
or held for the account of the Trust shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed, and in the event that
such rights or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Trust shall fix a record date for a distribution to all
holders of Preferred Shares (including any such distribution made in
connection with a consolidation or merger in which the Trust is the
successor) of evidences of indebtedness, cash (other than a regular
quarterly cash dividend out of the earnings or retained earnings of the
Trust), assets (other than a dividend payable in Preferred Shares, but
including any dividend payable in stock other than Preferred Shares) or
subscription rights or warrants (excluding those referred to in Section
11(b) hereof), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of
which shall be the current market price (as determined pursuant to
Section 11(d) hereof) per Preferred Share on such record date, less the
fair market value (as determined in good faith by the Board of Trustees
of the Trust, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to a Preferred Share and the denominator
of which shall be such current market price (as determined pursuant to
Section 11(d) hereof) per Preferred Share. Such adjustments shall be
made successively whenever such a record date is fixed, and in the event
that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if
such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the Current
Market Price per Common Share on any date shall be deemed to be the
average of the daily closing prices per share of such Common Shares for
the thirty (30)consecutive Trading Days immediately prior to such date,
and for purposes of computations made pursuant to Section 11(a)(iii)
hereof, the Current Market Price per Common Share on any date shall be
deemed to be the average of the daily closing prices per share of such
Common Shares for the ten (10) consecutive Trading Days immediately
following such date; provided, however, that in the event that the
Current Market Price per Common Share is determined during a period
following the announcement by the issuer of such Common Shares of (A) a
dividend or distribution on such Common Shares payable in shares of such
Common Shares or securities convertible into shares of such Common
Shares (other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Shares, and the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification shall not have occurred prior to the
commencement of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above, then, and in each such case, the
Current Market Price shall be properly adjusted to take into account ex-
dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the
New York Stock Exchange or, if the Common Shares are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which
the Common Shares are listed or admitted to trading or, if the Common
Shares are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ") or such other system then in use,
or, if on any such date the Common Shares are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Shares selected by the Board of Trustees of the Trust. If on any such
date no market maker is making a market in the Common Shares, the fair
value of such shares on such date as determined in good faith by the
Board shall be used. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the Common Shares
are listed or admitted to trading is open for the transaction of
business or, if the Common Shares are not listed or admitted to trading
on any national securities exchange, a Business Day. If the Common
Shares is not publicly held or not so listed or traded, Current Market
Price per share shall mean the fair value per share as determined in
good faith by the Board, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes.
(ii) For the purpose of any computation hereunder, the Current
Market Price per Preferred Share shall be determined in the same manner
as set forth above for the Common Shares in clause (i) of this Section
11(d) (other than the last sentence thereof). If the Current Market
Price per Preferred Share cannot be determined in the manner provided
above or if the Preferred Shares is not publicly held or listed or
traded in a manner described in clause (i) of this Section 11(d), the
Current Market Price per Preferred Share shall be conclusively deemed to
be an amount equal to 1,000 (as such number may be appropriately
adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Shares occurring after the
date of this Agreement) multiplied by the Current Market Price per
Common Share. If neither the Common Shares nor the Preferred Shares are
publicly held or so listed or traded, Current Market Price per Preferred
Share shall mean the fair value per share as determined in good faith by
the Board of Trustees of the Trust, whose determination shall be
described in a statement filed with the Rights Agent and shall be
conclusive for all purposes. For all purposes of this Agreement, the
Current Market Price of a Unit shall be equal to the Current Market
Price of one Preferred Share divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in the Purchase Price;
provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-
thousandth of a Common Share or other share or one-ten millionth of a
Preferred Share, as the case may be. Notwithstanding the first sentence
of this Section 11(e), any adjustment required by this Section 11 shall
be made no later than the earlier of (i) three (3) years from the date
of the transaction which mandates such adjustment, or (ii) the
Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii)
or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise
of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Sections 11(a), (b), (c), (e), (g), (h),
(i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and
14 hereof with respect to the Preferred Shares shall apply on like terms
to any such other shares.
(g) All Rights originally issued by the Trust subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of one one-
thousandths of a Preferred Share purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Trust shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c), each Right outstanding
immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that
number of one one-thousandths of a Preferred Share (calculated to the
nearest one-ten millionth) obtained by (i) multiplying (x) the number of
one one-thousandths of a share covered by a Right immediately prior to
this adjustment, by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price, and (ii) dividing the product
so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Trust may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in lieu of any adjustment
in the number of one one-thousandths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after the
adjustment in the number of Rights shall be exercisable for the number
of one one-thousandths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall become
that number of Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Trust shall
make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at
the time, the amount of the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued, shall be
at least ten (10) days later than the date of the public announcement.
If Rights Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Trust shall, as
promptly as practicable, cause to be distributed to holders of record of
Rights Certificates on such record date Rights Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the
option of the Trust, shall cause to be distributed to such holders of
record in substitution and replacement for the Rights Certificates held
by such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Trust, new Rights Certificates evidencing
all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may
bear, at the option of the Trust, the adjusted Purchase Price) and shall
be registered in the names of the holders of record of Rights
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-thousandths of a Preferred Share issuable upon the
exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price per one
one-thousandth of a share and the number of one one-thousandths of a
share which were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then stated value, if any, of the number of
one one-thousandths of a Preferred Share issuable upon exercise of the
Rights, the Trust shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Trust may validly
and legally issue fully paid and nonassessable such number of one one-
thousandths of a Preferred Share at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Trust may elect to defer until the occurrence
of such event the issuance to the holder of any Right exercised after
such record date the number of one one-thousandths of a Preferred Share
and other capital stock or securities of the Trust, if any, issuable
upon such exercise over and above the number of one one-thousandths of a
Preferred Share and other capital stock or securities of the Trust, if
any, issuable upon such exercise on the basis of the Purchase Price in
effect prior to such adjustment; provided, however, that the Trust shall
deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional shares
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Trust shall be entitled to make such reductions in the Purchase Price,
in addition to those adjustments expressly required by this Section 11,
as and to the extent that in their good faith judgment the Board of
Trustees of the Trust shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Shares, (ii) issuance
wholly for cash of any Preferred Shares at less than the current market
price, (iii) issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred
Shares, (iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the Trust to
holders of its Preferred Shares shall not be taxable to such
shareholders.
(n) The Trust covenants and agrees that it shall not, at any time after
the Distribution Date, (i) consolidate with any other Person (other than
a Subsidiary of the Trust in a transaction which complies with Section
11(o) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Trust in a transaction which complies with Section
11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Trust and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Trust and/or any
of its Subsidiaries in one or more transactions each of which complies
with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or
other instruments or securities outstanding or agreements in effect
which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to, simultaneously
with or immediately after such consolidation, merger or sale, the
shareholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or any
of its Affiliates and Associates.
(o) The Trust covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23 or Section 26 hereof,
take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to
be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Trust shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a
dividend on the outstanding Common Shares payable in Common Shares, (ii)
subdivide the outstanding Common Shares, or (iii) combine the
outstanding Common Shares into a smaller number of shares, the number of
Rights associated with each Common Share then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each Common Share following any such event shall equal
the result obtained by multiplying the number of Rights associated with
each Common Share immediately prior to such event by a fraction the
numerator which shall be the total number of Common Shares outstanding
immediately prior to the occurrence of the event and the denominator of
which shall be the total number of Common Shares outstanding immediately
following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13
hereof, the Trust shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Preferred Shares and the Common Shares, a copy of
such certificate, and (c) mail a brief summary thereof to each holder of
a Rights Certificate (or, if prior to the Distribution Date, to each
holder of a certificate representing Common Shares) in accordance with
Section 25 hereof. The Rights Agent shall be fully protected in relying
on any such certificate and on any adjustment therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) In the event that, following the Share Acquisition Date, directly
or indirectly, (x) the Trust shall consolidate with, or merge with and
into, any other Person (other than a Subsidiary of the Trust in a
transaction which complies with Section 11(o) hereof), and the Trust
shall not be the successor of such consolidation or merger, (y) any
Person (other than a Subsidiary of the Trust in a transaction which
complies with Section 11(o) hereof) shall consolidate with, or merge
with or into, the Trust, and the Trust shall be the successor of such
consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding Common Shares shall be changed
into or exchanged for stock or other securities of any other Person or
cash or any other property, or (z) the Trust shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one transaction or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or
earning power of the Trust and its Subsidiaries (taken as a whole) to
any Person or Persons (other than the Trust or any Subsidiary of the
Trust in one or more transactions each of which complies with Section
11(o) hereof), then, and in each such case (except as may be
contemplated by Section 13(d) hereof), proper provision shall be made so
that: (i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance with the terms
of this Agreement, such number of validly authorized and issued, fully
paid, non-assessable and freely tradeable Common Shares of the Principal
Party (as such term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall
be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of one one-thousandths of a Preferred Share
for which a Right is exercisable immediately prior to the first
occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of such one one-thousandths of a share for which
a Right was exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect immediately
prior to such first occurrence), and dividing that product (which,
following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the current market price (determined pursuant
to Section 11(d)(i) hereof) per Common Share of such Principal Party on
the date of consummation of such Section 13 Event; (ii) such Principal
Party shall thereafter be liable for, and shall assume, by virtue of
such Section 13 Event, all the obligations and duties of the Trust
pursuant to this Agreement; (iii) the term "Trust" shall thereafter be
deemed to refer to such Principal Party, it being specifically intended
that the provisions of Section 11 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13 Event;
(iv) such Principal Party shall take such steps (including, but not
limited to, the reservation of a sufficient number of Common Shares) in
connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its Common
Shares thereafter deliverable upon the exercise of the Rights; and (v)
the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a), the Person that is the issuer of
any securities into which Common Shares of the Trust are converted in
such merger or consolidation, and if no securities are so issued, the
Person that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions; provided,
however, that in any such case, (1) if the Common Shares of such Person
are not at such time and have not been continuously over the preceding
twelve-month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person the
Common Shares of which are and have been so registered, "Principal
Party" shall refer to such other Person; and (2) in case such Person is
a Subsidiary, directly or indirectly, of more than one Person, the
Common Shares of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer
of the Common Shares having the greatest aggregate market value.
(c) The Trust shall not consummate any such consolidation, merger, sale
or transfer unless the Principal Party shall have a sufficient number of
authorized Common Shares, which have not been issued or reserved for
issuance, to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior thereto the Trust and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs
(a) and (b) of this Section 13 and further providing that, as soon as
practicable after the date of any consolidation, merger or sale of
assets mentioned in paragraph (a) of this Section 13, the Principal
Party will:
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, and will use its best efforts to
cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date; and
(ii) will deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10
under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of
a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary, Section
13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such transaction is consummated with
a Person or Persons who acquired Common Shares pursuant to a Qualifying
Offer (or a wholly owned Subsidiary of any such Person or Persons), (ii)
the price per Common Share offered in such transaction is not less than
the price per Common Share paid to all holders of Common Shares whose
shares were purchased pursuant to such tender offer or exchange offer
and (iii) the form of consideration being offered to the remaining
holders of Common Shares pursuant to such transaction is the same as the
form of consideration paid pursuant to such tender offer or exchange
offer. Upon consummation of any such transaction contemplated by this
Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Trust shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(p)
hereof, or to distribute Rights Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole Right. For
purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day
shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted
to trading, or if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the over-
the-counter market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by the Board of Trustees of the Trust. If on any such date no
such market maker is making a market in the Rights the fair value of the
Rights on such date as determined in good faith by the Board of Trustees
of the Trust shall be used.
(b) The Trust shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-
thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares
(other than fractions which are integral multiples of one one-thousandth
of a Preferred Share). In lieu of fractional Preferred Shares that are
not integral multiples of one one-thousandth of a Preferred Share, the
Trust may pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one one-
thousandth of a Preferred Share. For purposes of this Section 14(b),
the current market value of one one-thousandth of a Preferred Share
shall be one one-thousandth of the closing price of a Preferred Share
(as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Trust shall not
be required to issue fractions of Common Shares upon exercise of the
Rights or to distribute certificates which evidence fractional Common
Shares. In lieu of fractional Common Shares, the Trust may pay to the
registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one (1) Common Share. For
purposes of this Section 14(c), the current market value of one (1)
Common Share shall be the closing price of one (1) Common Share (as
determined pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights expressly
waives his or her right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Rights
Certificate (or, prior to the Distribution Date, of the Common Shares),
without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of the Common
Shares), may, in such holder's own behalf and for such holder's own
benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Trust to enforce, or otherwise act in respect of,
such holder's right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and in
this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject
to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Trust and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Shares;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates
fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Trust and the
Rights Agent may deem and treat the Person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common
Shares certificate) is registered as the absolute owner thereof and of
the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Rights Certificates or the associated Common Shares
certificate made by anyone other than the Trust or the Rights Agent) for
all purposes whatsoever, and neither the Trust nor the Rights Agent,
subject to the last sentence of Section 7(e) hereof, shall be required
to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Trust nor the Rights Agent shall have any liability to any holder of
a Right or other Person as a result of its inability to perform any of
its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court
of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
provided, however, the Trust must use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. Rights Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the number
of one one-thousandths of a Preferred Share or any other securities of
the Trust which may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein or in
any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a shareholder of the
Trust or any right to vote for the election of trustees or upon any
matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting shareholders (except as provided in
Section 24 hereof), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
(a) The Trust agrees to pay to the Rights Agent reasonable compensation
for all services rendered by it hereunder and, from time to time, on
demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its
duties hereunder. The Trust also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense,
incurred without negligence, bad faith or willful misconduct on the part
of the Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement,
including the costs and expenses of defending against any claim of
liability in the premises. In no case shall the Rights Agent be liable
for special, indirect, incidental or consequential loss or damage.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon
any Rights Certificate or certificate for Common Shares or for other
securities of the Trust, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust or shareholder services
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the
parties hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any
of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the
Rights Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name
of the predecessor or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name; and
in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following
terms and conditions, by all of which the Trust and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Trust), and the advice of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring
Person and the determination of "current market price") be proved or
established by the Trust prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the
Board, the Vice Chairman, the Chief Executive Officer, the President,
any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Trust and delivered to the
Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements
and recitals are and shall be deemed to have been made by the Trust
only.
(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Trust of any covenant or condition contained in this Agreement or in
any Rights Certificate; nor shall it be responsible for any adjustment
required under the provisions of Section 11 or Section 13 hereof or
responsible for the manner, method or amount of any such adjustment or
the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Common Shares or
Preferred Shares to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any Common Shares or Preferred Shares will,
when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Trust agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from the Chairman of the Board, the Vice Chairman, the Chief Executive
Officer, the President, any Vice President, the Secretary, any Assistant
Secretary, the Treasurer or any Assistant Treasurer of the Trust, and to
apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such
officer.
(h) The Rights Agent and any shareholder, trustee, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Trust or become pecuniarily interested in any
transaction in which the Trust may be interested, or contract with or
lend money to the Trust or otherwise act as fully and freely as though
it were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the
Trust or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not
be answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Trust resulting
from any such act, default, neglect or misconduct; provided, however,
reasonable care was exercised in the selection and continued employment
thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of
its rights if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be,
has either not been completed or indicates an affirmative response to
clause 1 and/or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise of transfer without first
consulting with the Trust.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Trust,
and to each transfer agent of the Common Shares and Preferred Shares, by
registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. The Trust may, in its sole
discretion, remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent
of the Common Shares and Preferred Shares, by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail.
If the Rights Agent shall resign or be removed or shall otherwise become
incapable of acting, the Trust shall appoint a successor to the Rights
Agent. If the Trust shall fail to make such appointment within a period
of thirty (30) days after giving notice of such removal or after it has
been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Trust), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Trust or by such a court, shall be either (a) a
corporation organized and doing business under the laws of the United
States or of any state of the United States, in good standing, which is
authorized under such laws to exercise corporate trust powers and is
subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined
capital and surplus of at least $100,000,000 or (b) an Affiliate of such
a corporation. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or
deed; but the predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it hereunder,
and execute and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Not later than the effective date of any
such appointment, the Trust shall file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the Common
Shares and the Preferred Shares, and mail a notice thereof in writing to
the registered holders of the Rights Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary,
the Trust may, at its option, issue new Rights Certificates evidencing
Rights in such form as may be approved by its Board of Trustees to
reflect any adjustment or change in the Purchase Price and the number or
kind or class of shares or other securities or property purchasable
under the Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or sale of
Common Shares following the Distribution Date and prior to the
redemption or expiration of the Rights, the Trust (a) shall, with
respect to Common Shares so issued or sold pursuant to the exercise of
stock options or under any employee plan or arrangement, granted or
awarded as of the Distribution Date, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Trust, and (b) may, in
any other case, if deemed necessary or appropriate by the Board of
Trustees of the Trust, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued
if, and to the extent that, the Trust shall be advised by counsel that
such issuance would create a significant risk of material adverse tax
consequences to the Trust or the Person to whom such Rights Certificate
would be issued, and (ii) no such Rights Certificate shall be issued if,
and to the extent that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Trustees of the Trust may, at its option, at any time
prior to the earlier of (i) the close of business on the tenth day
following the Share Acquisition Date (or, if the Share Acquisition Date
shall have occurred prior to the Record Date, the close of business on
the twentieth day following the Record Date), or (ii) the Final
Expiration Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $0.0001 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption Price");
provided, however, if the Board of Trustees of the Trust authorizes
redemption of the Rights in either of the circumstances set forth in
clauses (i) and (ii) below, then such authorization shall require the
concurrence of at least 75% of the members of the Board of Trustees of
the Trust: (i) such authorization occurs on or after the time a Person
becomes an Acquiring Person, or (ii) such authorization occurs on or
after the date of a change (resulting from a proxy or consent
solicitation or an action by written consent of shareholders, whether or
not made pursuant to, and in accordance with, the applicable provisions
of the General Rules and Regulations under the Exchange Act) in a
majority of the trustees in office at the commencement of such
solicitation, or prior to such written consent, if any Person who is a
participant in such solicitation, or who signed such consent, has stated
(or, if upon the commencement of such solicitation, a majority of the
Board of Trustees of the Trust has determined in good faith) that such
Person (or any of its Affiliates or Associates) intends to take, or may
consider taking, any action which would result in such Person becoming
an Acquiring Person or which would cause the occurrence of a Triggering
Event unless, concurrent with such solicitation, such Person (or one or
more of its Affiliates or Associates) is making a cash tender offer
pursuant to a Schedule 14D-1 (or any successor form) filed with the
Securities and Exchange Commission for all outstanding Common Shares not
beneficially owned by such Person (or by its Affiliates or Associates).
Notwithstanding anything contained in this Agreement to the contrary,
the Rights shall not be exercisable after the first occurrence of a
Section 11(a)(ii) Event until such time as the Trust's right of
redemption hereunder has expired. The Trust may, at its option, pay the
Redemption Price in cash, Common Shares (based on the "Current Market
Price", as defined in Section 11(d)(i) hereof, of the Common Shares at
the time of redemption) or any other form of consideration deemed
appropriate by the Board of Trustees.
(b) Immediately upon the action of the Board of Trustees of the Trust
ordering the redemption of the Rights, evidence of which shall have been
filed with the Rights Agent and without any further action and without
any notice, the right to exercise the Rights will terminate and the only
right thereafter of the holders of Rights shall be to receive the
Redemption Price for each Right so held. Promptly after the action of
the Board of Trustees ordering the redemption of the Rights, the Trust
shall give notice of such redemption to the Rights Agent and the holders
of the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption
Price will be made.
Section 24. Notice of Certain Events.
(a) In case the Trust shall propose, at any time after the Distribution
Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Shares or to make any other distribution to the
holders of Preferred Shares (other than a regular quarterly cash
dividend out of earnings or retained earnings of the Trust), or (ii) to
offer to the holders of Preferred Shares rights or warrants to subscribe
for or to purchase any additional Preferred Shares or shares of stock of
any class or any other securities, rights or options, or (iii) to effect
any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), or (iv) to effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the Trust in a transaction
which complies with Section 11(o) hereof), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect
any sale or other transfer), in one transaction or a series of related
transactions, of more than 50% of the assets or earning power of the
Trust and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Trust and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o) hereof), or
(v) to effect the liquidation, dissolution or winding up of the Trust,
then, in each such case, the Trust shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 25
hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or
warrants, or the date on which such reclassification, consolidation,
merger, sale, transfer, liquidation, dissolution, or winding up is to
take place and the date of participation therein by the holders of the
Preferred Shares, if any such date is to be fixed, and such notice shall
be so given in the case of any action covered by clause (i) or (ii)
above at least twenty (20) days prior to the record date for determining
holders of the Preferred Shares for purposes of such action, and in the
case of any such other action, at least twenty (20) days prior to the
date of the taking of such proposed action or the date of participation
therein by the holders of the Preferred Shares whichever shall be the
earlier.
(b) In case any of the events set forth in Section 11(a)(ii) hereof
shall occur, then, in any such case, (i) the Trust shall as soon as
practicable thereafter give to each holder of a Rights Certificate, to
the extent feasible and in accordance with Section 25 hereof, a notice
of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii)
hereof, and (ii) all references in the preceding paragraph to Preferred
Shares shall be deemed thereafter to refer to Common Shares and/or, if
appropriate, other securities.
Section 25. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Trust shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Liberty Property Trust
Great Valley Corporate Center
65 Valley Stream Parkway, Suite 100
Malvern, Pennsylvania 19355
Attention: Chief Executive Officer
Subject to the provisions of Section 21, any notice or demand authorized
by this Agreement to be given or made by the Trust or by the holder of
any Rights Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Trust) as follows:
Bank Boston, N.A.
150 Royall Street
Mailstop 45-02-16
Boston, Massachusetts 02021
Attention: Shareholder Services Division
Notices or demands authorized by this Agreement to be given or made by
the Trust or the Rights Agent to the holder of any Rights Certificate
(or, if prior to the Distribution Date, to the holder of certificates
representing Common Shares) shall be sufficiently given or made if sent
by first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the Trust.
Section 26. Supplements and Amendments. Prior to the Distribution Date
and subject to the penultimate sentence of this Section 26, the Trust
and the Rights Agent shall, if the Trust so directs, supplement or amend
any provision of this Agreement without the approval of any holders of
certificates representing Common Shares. From and after the
Distribution Date and subject to the penultimate sentence of this
Section 26, the Trust and the Rights Agent shall, if the Trust so
directs, supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order (i) to cure any ambiguity, (ii)
to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder (which lengthening or
shortening, following the first occurrence of an event set forth in
clauses (i) and (ii) of the first proviso to Section 23(a) hereof, shall
require the concurrence of at least 75% of the members of the Board of
Trustees of the Trust), or (iv) to change or supplement the provisions
hereunder in any manner which the Trust may deem necessary or desirable
and which shall not adversely affect the interests of the holders of
Rights Certificates (other than an Acquiring Person or an Affiliate or
Associate of an Acquiring Person); provided, however, this Agreement may
not be supplemented or amended to lengthen, pursuant to clause (iii) of
this sentence, (A) a time period relating to when the Rights may be
redeemed at such time as the Rights are not then redeemable, or (B) any
other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of, and/or the benefits
to, the holders of Rights. Upon the delivery of a certificate from an
appropriate officer of the Trust which states that the proposed
supplement or amendment is in compliance with the terms of this Section
26, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption
Price, the Final Expiration Date, the Purchase Price or the number of
one one-thousandths of a Preferred Share for which a Right is
exercisable. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the
holders of Common Shares.
Section 27. Exchange.
(a) (i) The Trust may, at its option, at any time after the Share
Acquisition Date, upon resolution by the Board of Trustees of the Trust,
exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for Common Shares at an exchange
ratio of one Common Share per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after
the date of this Agreement (such exchange ratio being hereinafter
referred to as the "Section 27(a)(i) Exchange Ratio"). Notwithstanding
the foregoing, the Trust may not effect such exchange at any time after
any Acquiring Person becomes the Beneficial Owner of 50% or more of the
Common Shares then outstanding.
(ii) The Trust may, at its option, at any time after the Share
Acquisition Date, upon resolution by the Board of Trustees of the Trust,
exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for Common Shares at an exchange
ratio specified in the following sentence, as appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the date of this Agreement. Subject to such adjustment, each
Right may be exchanged for that number of Common Shares obtained by
dividing the Adjustment Spread (as defined below) by the then current
market price (determined pursuant to Section 11(d) hereof) per Common
Share on the earlier of (i) the date on which any Person becomes an
Acquiring Person or (ii) the date on which a tender or exchange offer by
any Person (other than an Exempted Person, the Trust, any Subsidiary of
the Trust, any employee benefit plan of the Trust or of any Subsidiary
of the Trust, or any Person organized, appointed or established by the
Trust for or pursuant to the terms of any such plan) is first published
or sent or given within the meaning of Rule 14d-4(a) of the General
Rules and Regulations under the Exchange Act, if upon consummation
thereof such Person would be the Beneficial Owner of 10% or more of the
Common Shares then outstanding (such exchange ratio being the "Section
27(a)(ii) Exchange Ratio"). The "Adjustment Spread" shall equal (x) the
aggregate market price on the date of such event of the number of
Adjustment Shares determined pursuant to Section 11(a)(ii) minus (y) the
Purchase Price.
(iii) Notwithstanding anything contained in this Section 27(a) to
the contrary, the Trust may not exchange any Rights pursuant to this
Section 27(a) unless such exchange is approved by at least 75% of the
members of the Board of Trustees of the Trust.
(b) Immediately upon the action of the Board of Trustees of the Trust
ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 27 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of
Common Shares equal to the number of such Rights held by such holder
multiplied by the Section 27(a)(i) Exchange Ratio or Section 27(a)(ii)
Exchange Ratio, as the case may be. The Trust shall promptly give
public notice of any such exchange; provided, however, that the failure
to give, or any defect in, such notice shall not affect the validity of
such exchange. The Trust promptly shall mail a notice of any such
exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Common
Shares for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other
than Rights which have become void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Shares issued
but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 27, the Trust
shall make adequate provision to substitute, to the extent that there
are insufficient Common Shares available (1) cash, (2) other equity
securities of the Trust, (3) debt securities of the Trust, (4) other
assets or (5) any combination of the foregoing, having an aggregate
value per Right equal to (x) in the case of an exchange pursuant to
Section 27(a)(i), the then current per share market price (determined
pursuant to Section 11(d) hereof) of the Common Shares multiplied by the
Section 27(a)(i) Exchange Ratio and (y) in the case of an exchange
pursuant to Section 27(a)(ii), the Adjustment Spread, where such
aggregate value has been determined by at least 75% of the members of
the Board of Trustees of the Trust, after receiving advice from a
nationally recognized investment banking firm. To the extent that the
Trust determines that any such substitution must be made, the Trust
shall provide, subject to Section 7(e) hereof, that such substitution
shall apply uniformly to all outstanding Rights.
(d) The Trust shall not be required to issue fractions of Common Shares
or to distribute certificates which evidence fractional Common Shares.
In lieu of such fractional Common Shares, the Trust shall pay to the
registered holders of the Rights Certificates with regard to which such
fractional Common Shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole Common
Share. For the purposes of this paragraph (d), the current market value
of a whole Common Share shall be the closing price of a Common Share (as
determined pursuant to the second sentence of Section 11(d) hereof) for
the Trading Day immediately prior to the date of the exchange pursuant
to this Section 27.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Trust or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Determinations and Actions by the Board of Trustees, etc.
For all purposes of this Agreement, any calculation of the number of
Common Shares outstanding at any particular time, including for purposes
of determining the particular percentage of such outstanding Common
Shares of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Exchange Act. The Board of Trustees of
the Trust (with, where specifically provided for herein, the concurrence
of at least 75% of the members of the Board of Trustees of the Trust)
shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to
the Board (with, where specifically provided for herein, the concurrence
of at least 75% of the members of the Board of Trustees of the Trust) or
to the Trust, or as may be necessary or advisable in the administration
of this Agreement, including, without limitation, the right and power to
(i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of
this Agreement (including a determination to redeem or not redeem the
Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause
(y) below, all omissions with respect to the foregoing) which are done
or made by the Board (with, where specifically provided for herein, the
concurrence of at least 75% of the members of the Board of Trustees of
the Trust) in good faith, shall (x) be final, conclusive and binding on
the Trust, the Rights Agent, the holders of the Rights and all other
parties, and (y) not subject the Board or the Continuing Trustees to any
liability to the holders of the Rights.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Trust, the Rights
Agent and the registered holders of the Rights Certificates (and, prior
to the Distribution Date, registered holders of the Common Shares) any
legal or equitable right, remedy or claim under this Agreement; but this
Agreement shall be for the sole and exclusive benefit of the Trust, the
Rights Agent and the registered holders of the Rights Certificates (and,
prior to the Distribution Date, registered holders of the Common
Shares).
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way
be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if any such
term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of Trustees
of the Trust determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose
or effect of this Agreement, the right of redemption set forth in
Section 23 hereof shall be reinstated and shall not expire until the
close of business on the twentieth day following the date of such
determination by the Board of Trustees. Without limiting the foregoing,
if any provision requiring a super majority of the Board of Trustees of
the Trust to act is held by any court of competent jurisdiction or other
authority to be invalid, void or unenforceable, such determination shall
then be made by the Board of Trustees of the Trust in accordance with
applicable law and the Trust's Amended and Restated Declaration of Trust
and By-Laws.
Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Maryland and for all purposes shall be governed
by and construed in accordance with the laws of such state applicable to
contracts made and to be performed entirely within such state.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
Attest: LIBERTY PROPERTY TRUST
By: /s/ JAMES J. BOWES By: /s/ WILLARD G. ROUSE, III
- ------------------------------- ----------------------------------
Name: James J. Bowes Name: Willard G. Rouse, III
Title: Secretary Title: Chief Executive Officer
Attest: BANK BOSTON, N.A.
By: By:
- ------------------------------- ---------------------------------
Name: Name:
Title: Title:
Exhibit A
FORM OF
ARTICLE SUPPLEMENTARY
RELATING TO DESIGNATION, PREFERENCES
AND RIGHTS OF SERIES A JUNIOR
PARTICIPATING PREFERRED SHARES
of
LIBERTY PROPERTY TRUST
Pursuant to Section 8-203 of Article 8 of the Annotated Code of
Maryland, the undersigned officers of Liberty Property Trust, a Maryland
real estate investment trust (the "Trust") DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Trustees by
Article VI of the Amended and Restated Declaration of Trust of the
Trust, the Board of Trustees on December 17, 1997 adopted the following
resolution creating a series of 200,000 Preferred Shares designated as
Series A Junior Participating Preferred Shares:
RESOLVED, that pursuant to the authority vested in the Board of Trustees
of this Trust in accordance with the provisions of Article VI of its
Amended and Restated Declaration of Trust, a series of Preferred Shares
of the Trust be and it hereby is created, and that the designation and
amount thereof and the voting powers, preferences and relative,
participating, optional and other special rights of the shares of such
series, and the qualifications, limitations or restrictions thereof are
as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series A Junior Participating Preferred Shares" and the
number of shares constituting such series shall be 200,000.
Section 2. Dividends and Distributions.
(A) The holders of Series A Junior Participating Preferred Shares shall
be entitled to receive, when, as and if declared by the Board of
Trustees out of funds legally available for the purpose, quarterly
dividends payable in cash on the last day of March, June, September and
December in each year (each such date being referred to herein as a
"Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or fraction of
a Series A Junior Participating Preferred Share, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $0.01 or (b)
subject to the provision for adjustment hereinafter set forth, 1,000
times the aggregate per share amount of all cash dividends, and 1,000
times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in Common
Shares or a subdivision of the outstanding Common Shares (by
reclassification or otherwise), declared on the Common Shares, par value
$0.001 per share, of the Trust (the "Common Shares") since the
immediately preceding Quarterly Dividend Payment Date, or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a Series A Junior Participating Preferred
Share. In the event the Trust shall at any time after December 17, 1997
(the "Rights Declaration Date") (i) declare any dividend on Common
Shares payable in Common Shares, (ii) subdivide the outstanding Common
Shares, or (iii) combine the outstanding Common Shares into a smaller
number of shares, then in each such case the amount to which holders of
Series A Junior Participating Preferred Shares were entitled immediately
prior to such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction the numerator of which
is the number of Common Shares outstanding immediately after such event
and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(B) The Trust shall declare a dividend or distribution on the
outstanding Series A Junior Participating Preferred Shares as provided
in Paragraph (A) above immediately after it declares a dividend or
distribution on the Common Shares (other than a dividend payable in
Common Shares); provided that, in the event no dividend or distribution
shall have been declared on the Common Shares during the period between
any Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $0.01 per share on the outstanding
Series A Junior Participating Preferred Shares shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
Series A Junior Participating Preferred Shares from the Quarterly
Dividend Payment Date next preceding the date of issue of such Series A
Junior Participating Preferred Shares, unless the date of issue of such
shares is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of Series A Junior Participating
Preferred Shares entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the Series A Junior Participating Preferred
Shares in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Trustees may fix a record date for the determination of holders
of Series A Junior Participating Preferred Shares entitled to receive
payment of a dividend or distribution declared thereon, which record
date shall be no more than thirty (30) days prior to the date fixed for
the payment thereof.
Section 3. Voting Rights. The holders of Series A Junior Participating
Preferred Shares shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Junior Participating Preferred Shares shall entitle
the holder thereof to 1,000 votes on all matters submitted to a vote of
the shareholders of the Trust. In the event the Trust shall at any time
after the Rights Declaration Date (i) declare any dividend on Common
Shares payable in Common Shares, (ii) subdivide the outstanding Common
Shares, or (iii) combine the outstanding Common Shares into a smaller
number of shares, then in each such case the number of votes per share
to which holders of Series A Junior Participating Preferred Shares were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the
number of Common Shares outstanding immediately after such event and the
denominator of which is the number of Common Shares that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of
Series A Junior Participating Preferred Shares and the holders of Common
Shares shall vote together as one class on all matters submitted to a
vote of shareholders of the Trust.
(C)(i) If at any time dividends on any Series A Junior Participating
Preferred Shares shall be in arrears in an amount equal to six (6)
quarterly dividends thereon, the occurrence of such contingency shall
mark the beginning of a period (herein called a "default period") which
shall extend until such time when all accrued and unpaid dividends for
all previous quarterly dividend periods and for the current quarterly
dividend period on all Series A Junior Participating Preferred Shares
then outstanding shall have been declared and paid or set apart for
payment. During each default period, all holders of Preferred Shares
(including holders of the Series A Junior Participating Preferred
Shares) with dividends in arrears in an amount equal to six (6)
quarterly dividends thereon, voting as a class, irrespective of series,
shall have the right to elect two (2) Trustees.
(ii) During any default period, such voting right of the holders of
Series A Junior Participating Preferred Shares may be exercised
initially at a special meeting called pursuant to subparagraph (iii) of
this Section 3(C) or at any annual meeting of shareholders, and
thereafter at annual meetings of shareholders, provided that such voting
right shall not be exercised unless the holders of ten percent (10%) in
number of Preferred Shares outstanding shall be present in person or by
proxy. The absence of a quorum of the holders of Common Shares shall
not affect the exercise by the holders of Preferred Shares of such
voting right. At any meeting at which the holders of Preferred Shares
shall exercise such voting right initially during an existing default
period, they shall have the right, voting as a class, to elect Trustees
to fill such vacancies, if any, in the Board of Trustees as may then
exist up to two (2) Trustees or, if such right is exercised at an annual
meeting, to elect two (2) Trustees. If the number which may be so
elected at any special meeting does not amount to the required number,
the holders of the Preferred Shares shall have the right to make such
increase in the number of Trustees as shall be necessary to permit the
election by them of the required number. After the holders of the
Preferred Shares shall have exercised their right to elect Trustees in
any default period and during the continuance of such period, the number
of Trustees shall not be increased or decreased except by vote of the
holders of Preferred Shares as herein provided or pursuant to the rights
of any equity securities ranking senior to or pari passu with the Series
A Junior Participating Preferred Shares.
(iii) Unless the holders of Preferred Shares shall, during an existing
default period, have previously exercised their right to elect Trustees,
the Board of Trustees may order, or any shareholder or shareholders
owning in the aggregate not less than ten percent (10%) of the total
number of Preferred Shares outstanding, irrespective of series, may
request, the calling of a special meeting of the holders of Preferred
Shares, which meeting shall thereupon be called by the President, a
Vice-President or the Secretary of the Trust. Notice of such meeting
and of any annual meeting at which holders of Preferred Shares are
entitled to vote pursuant to this Paragraph (C)(iii) shall be given to
each holder of record of Preferred Shares by mailing a copy of such
notice to such holder at such holder's last address as the same appears
on the books of the Trust. Such meeting shall be called for a time not
earlier than twenty (20) days and not later than sixty (60) days after
such order or request, or in default of the calling of such meeting
within sixty (60) days after such order or request, such meeting may be
called on similar notice by any shareholder or shareholders owning in
the aggregate not less than ten percent (10%) of the total number of
Preferred Shares outstanding. Notwithstanding the provisions of this
Paragraph (C)(iii), no such special meeting shall be called during the
period within sixty (60) days immediately preceding the date fixed for
the next annual meeting of the shareholders.
(iv) In any default period, the holders of Common Shares, and other
classes of shares of the Trust if applicable, shall continue to be
entitled to elect the whole number of Trustees until the holders of
Preferred Shares shall have exercised their right to elect two (2)
Trustees voting as a class, after the exercise of which right (x) the
Trustees so elected by the holders of Preferred Shares shall continue in
office until their successors shall have been elected by such holders or
until the expiration of the default period, and (y) any vacancy in the
Board of Trustees may (except as provided in Paragraph (C)(ii) of this
Section 3) be filled by vote of a majority of the remaining Trustees
theretofore elected by the holders of the class of stock which elected
the Trustee whose office shall have become vacant. References in this
Paragraph (C) to Trustees elected by the holders of a particular class
of stock shall include Trustees elected by such Trustees to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the right
of the holders of Preferred Shares as a class to elect Trustees shall
cease, (y) the term of any Trustees elected by the holders of Preferred
Shares as a class shall terminate, and (z) the number of Trustees shall
be such number as may be provided for in the Declaration of Trust or
By-laws of the Trust irrespective of any increase made pursuant to the
provisions of Paragraph (C)(ii) of this Section 3 (such number being
subject, however, to change thereafter in any manner provided by law or
in the Declaration of Trust or By-laws of the Trust). Any vacancies in
the Board of Trustees effected by the provisions of clauses (y) and (z)
in the preceding sentence may be filled by a majority of the remaining
Trustees.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Shares shall have no special voting rights and
their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Shares as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Junior Participating Preferred Shares as
provided in Section 2 hereof are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared,
on Series A Junior Participating Preferred Shares outstanding shall have
been paid in full, the Trust shall not:
(i) declare or pay dividends on, make any other distributions on, or
redeem or purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating
Preferred Shares;
(ii) declare or pay dividends on or make any other distributions on any
shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Shares, except dividends paid ratably on the
Series A Junior Participating Preferred Shares and all such parity stock
on which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration shares
of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Shares, provided that the Trust may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Trust ranking junior (either as
to dividends or upon dissolution, liquidation or winding up) to the
Series A Junior Participating Preferred Shares; or
(iv) purchase or otherwise acquire for consideration any Series A
Junior Participating Preferred Shares, or any shares of stock ranking on
a parity (either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Participating Preferred Shares,
except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Trustees) to all holders of
such shares upon such terms as the Board of Trustees, after
consideration of the respective annual dividend rates and other relative
rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment
among the respective series or classes.
(B) The Trust shall not permit any subsidiary of the Trust to purchase
or otherwise acquire for consideration any shares of the Trust unless
the Trust could, under Paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any Series A Junior Participating
Preferred Shares purchased or otherwise acquired by the Trust in any
manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued Preferred Shares and may be reissued as
part of a new series of Preferred Shares to be created by resolution or
resolutions of the Board of Trustees, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the Trust, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Shares unless, prior thereto, the holders of
Series A Junior Participating Preferred Shares shall have received an
amount equal to $100,000 per share of Series A Junior Participating
Preferred Shares, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such
payment (the "Series A Liquidation Preference"). Following the payment
of the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of Series A Junior
Participating Preferred Shares unless, prior thereto, the holders of
Common Shares shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Series A
Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set
forth in subparagraph (C) below to reflect such events as stock splits,
stock dividends and recapitalizations with respect to the Common Shares)
(such number in clause (ii), the "Adjustment Number"). Following the
payment of the full amount of the Series A Liquidation Preference and
the Common Adjustment in respect of all outstanding Series A Junior
Participating Preferred Shares and Common Shares, respectively, holders
of Series A Junior Participating Preferred Shares and holders of Common
Shares shall receive their ratable and proportionate share of the
remaining assets to be distributed in the ratio of the Adjustment Number
to 1 with respect to such Preferred Shares and Common Shares, on a per
share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series A Liquidation
Preference and the liquidation preferences of all other series of
Preferred Shares, if any, which rank on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Shares, then such remaining assets shall be
distributed ratably to the holders of such parity shares in proportion
to their respective liquidation preferences. In the event, however,
that there are not sufficient assets available to permit payment in full
of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Shares.
(C) In the event the Trust shall at any time after the Rights
Declaration Date (i) declare any dividend on Common Shares payable in
Common Shares, (ii) subdivide the outstanding Common Shares, or (iii)
combine the outstanding Common Shares into a smaller number of shares,
then in each such case the Adjustment Number in effect immediately prior
to such event shall be adjusted by multiplying such Adjustment Number by
a fraction the numerator of which is the number of Common Shares
outstanding immediately after such event and the denominator of which is
the number of Common Shares that were outstanding immediately prior to
such event.
Section 7. Consolidation, Merger, etc. In case the Trust shall enter
into any consolidation, merger, combination or other transaction in
which the Common Shares are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the
Series A Junior Participating Preferred Shares shall at the same time be
similarly exchanged or changed in an amount per share (subject to the
provision for adjustment hereinafter set forth) equal to 1,000 times the
aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each
Common Share is changed or exchanged. In the event the Trust shall at
any time after the Rights Declaration Date (i) declare any dividend on
Common Shares payable in Common Shares, (ii) subdivide the outstanding
Common Shares, or (iii) combine the outstanding Common Shares into a
smaller number of shares, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of Series
A Junior Participating Preferred Shares shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number of Common
Shares outstanding immediately after such event and the denominator of
which is the number of Common Shares that were outstanding immediately
prior to such event.
Section 8. No Redemption. The Series A Junior Participating Preferred
Shares shall not be redeemable.
Section 9. Amendment. The Declaration of Trust of the Trust shall not
be further amended in any manner which would materially alter or change
the powers, preferences or special rights of the Series A Junior
Participating Preferred Shares so as to affect them adversely without
the affirmative vote of the holders of a majority or more of the
outstanding Series A Junior Participating Preferred Shares, voting
separately as a class.
Section 10. Fractional Shares. Series A Junior Participating Preferred
Shares may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to exercise
voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A Junior
Participating Preferred Shares.
IN WITNESS WHEREOF, we have executed and subscribed this Certificate and
do affirm the foregoing as true under the penalties of perjury this 17th
day of December 1997.
LIBERTY PROPERTY TRUST
By:
-------------------------------
Name:
Title:
Attest:
-----------------------------------
Secretary
Exhibit B
[Form of Rights Certificate]
Certificate No. R- Rights
NOT EXERCISABLE AFTER DECEMBER 31, 2007 OR EARLIER IF REDEEMED BY THE
TRUST. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
TRUST, AT $0.0001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE
RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]<F1>
Rights Certificate
LIBERTY PROPERTY TRUST
This certifies that [ ], or registered assigns,
is the registered owner of the number of Rights set forth above, each of
which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of December 17, 1997 (the
"Rights Agreement"), between Liberty Property Trust, a Maryland real
estate investment trust (the "Trust"), and Bank Boston, N.A. (the
"Rights Agent"), to purchase from the Trust at any time prior to 5:00
P.M. (Philadelphia time) on December 31, 2007 at the office or offices
of the Rights Agent designated for such purpose, or its successors as
Rights Agent, one one-thousandth of a fully paid, non-assessable Series
A Junior Participating Preferred Share (the "Preferred Shares") of the
Trust, at a purchase price of $100.00 per one one-thousandth of a share
(the "Purchase Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related
Certificate duly executed. The number of Rights evidenced by this
Rights Certificate (and the number of shares which may be purchased upon
exercise thereof) set forth above, and the Purchase Price per share set
forth above, are the number and Purchase Price as of December 17, 1997
based on the Preferred Shares as constituted at such date. The Trust
reserves the right to require prior to the occurrence of a Triggering
Event (as such term is defined in the Rights Agreement) that a number of
Rights be exercised so that only whole Preferred Shares will be issued.
<F1> The portion of the legend in brackets shall be inserted only if
applicable shall replace the preceding sentence.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate of any Acquiring Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of any Acquiring
Person, Associate or Affiliate, or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of a person who, after
such transfer, became an Acquiring Person, or an Affiliate or Associate
of an Acquiring Person, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights from and
after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of Preferred Shares or other securities which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are
subject to modification and adjustment upon the happening of certain
events, including Triggering Events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties
and immunities hereunder of the Rights Agent, the Trust and the holders
of the Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under the
specific circumstances set forth in the Rights Agreement. Copies of the
Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are also available upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights
Certificate or Rights Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate number of one
one-thousandths of a Preferred Share as the Rights evidenced by the
Rights Certificate or Rights Certificates surrendered shall have
entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon
surrender hereof another Rights Certificate or Rights Certificates for
the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Trust at its option at a
redemption price of $0.0001 per Right at any time prior to the earlier
of the close of business on (i) the tenth day following the Share
Acquisition Date (as such time period may be extended pursuant to the
Rights Agreement), and (ii) the Final Expiration Date. In addition, the
Rights may be exchanged, in whole or in part, for Common Shares, or
preferred shares of the Trust having essentially the same value or
economic rights as such shares. Immediately upon the action of the Board
of Trustees of the Trust authorizing any such exchange, and without any
further action or any notice, the Rights (other than Rights which are
not subject to such exchange) will terminate and the Rights will only
enable holders to receive the shares issuable upon such exchange. Under
certain circumstances set forth in the Rights Agreement, the decision to
redeem the Rights shall require the concurrence of at least 75% of the
members of the Board of Trustees of the Trust.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-thousandth of a Preferred Share, which
may, at the election of the Trust, be evidenced by depositary receipts),
but in lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Preferred
Shares or of any other securities of the Trust which may at any time be
issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a shareholder of the Trust or any
right to vote for the election of Trustees or upon any matter submitted
to shareholders at any meeting thereof, or to give or withhold consent
to any corporate action, or, to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Trust and
its corporate seal.
Dated as of , ____
ATTEST: LIBERTY PROPERTY TRUST
By: By:
- ----------------------------- -------------------------------------
Secretary Name:
Title:
Countersigned:
BANK BOSTON, N.A.
By:
- ----------------------------
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint Attorney,
to transfer the within Rights Certificate on the books of the
within-named Trust, with full power of substitution.
Dated: , ____
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any Acquiring Person (as such
terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: ,
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or
any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: LIBERTY PROPERTY TRUST:
The undersigned hereby irrevocably elects to exercise Rights
represented by this Rights Certificate to purchase the Preferred Shares
issuable upon the exercise of the Rights (or such other securities of
the Trust or of any other person which may be issuable upon the exercise
of the Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated:,
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any Acquiring Person
(as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is, was or became an Acquiring Person or
an Affiliate or Associate of an Acquiring Person.
Dated: ,
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or
any change whatsoever.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED SHARES
On December 17, 1997, the Board of Trustees of Liberty Property Trust
(the "Trust") adopted a Shareholder Rights Plan, providing that one
right (a "Right") shall be attached to each common share, par value
$0.001 per share, of the Trust (the "Common Shares"). Each Right
entitles the registered holder thereof, to purchase from the Trust a
unit (each, a "Unit") consisting of one one-thousandth of a share of
Series A Junior Participating Preferred Shares, $0.0001 par value (the
"Preferred Shares"), at a price of $100.00 per Unit (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights
are set forth in the Rights Agreement (the "Rights Agreement"), dated as
of December 17, 1997, between the Trust and Bank Boston, N.A., as Rights
Agent (the "Rights Agent").
Initially, the Rights will be attached to all certificates representing
shares then outstanding, and no separate Rights Certificate will be
distributed. The Rights will separate from the Common Shares and a
Distribution Date will occur upon the earlier of (i) ten (10) days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") has acquired, or obtained the
right to acquire, beneficial ownership of 10% or more of the outstanding
Common Shares (the "Share Acquisition Date") or (ii) ten (10) business
days (or such later date as the Board of Trustees shall determine)
following the commencement of a tender offer or exchange offer that
would result in a person or group beneficially owning 10% or more of
such outstanding Common Shares. The definition of Acquiring Person
excludes any Exempted Person (as defined below). Until the Distribution
Date, (i) the Rights will be evidenced by the Common Shares certificates
and will be transferred with and only with such Common Shares
certificates, (ii) new Common Shares certificates will contain a
notation incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates for Common Shares outstanding
will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate.
On the date the Board of Trustees authorized the Rights dividend (the
"Rights Dividend Declaration Date"), FMR Corp. was deemed to be an
"Exempted Person" because the Trust previously authorized FMR Corp. to
own up to 13% of the outstanding Common Shares However, FMR Corp. will
no longer be deemed to be an Exempted Person and will be deemed to be an
Acquiring Person if such person, together with all affiliates and
associates of such person, becomes the beneficial owner of more than 13%
of the then outstanding Common Shares. A purchaser, assignee or
transferee of the Common Shares (or options or warrants exercisable for
Common Shares) from an Exempted Person will not thereby become an
Exempted Person.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on December 31, 2007 unless earlier
redeemed by the Trust as described below. At no time will the Rights
have any voting power.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Shares as of the close
of business on the Distribution Date and, thereafter, the separate
Rights Certificates alone will represent the Rights. Except as otherwise
determined by the Board of Trustees, only Common Shares issued prior to
the Distribution Date will be issued with Rights.
In the event that an Acquiring Person becomes the beneficial owner of
10% or more of the then outstanding Common Shares (unless such
acquisition is made pursuant to a tender or exchange offer for all
outstanding shares of the Trust, at a price determined by at least 75%
of the trustees of the Trust to be fair and otherwise in the best
interest of the Trust and its shareholders) after receiving advice from
one or more investment banking firms (a "Qualifying Offer"), each holder
of a Right will thereafter have the right to receive, upon exercise,
Common Shares (or, in certain circumstances, cash, property or other
securities of the Trust), having a value equal to two times the Exercise
Price of the Right. The Exercise Price is the Purchase Price multiplied
by the number of Units associated with each Right (initially, one).
Notwithstanding any of the foregoing, following the occurrence of an
Acquiring Person becoming such ("Flip-In Event"), all Rights that are,
or (under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void.
However, Rights are not exercisable following the occurrence of a
Flip-In Event until such time as the Rights are no longer redeemable by
the Trust as set forth below.
In the event that following the Share Acquisition Date, (i) the Trust
engages in a merger or business combination transaction in which the
Trust is not the successor (other than a merger consummated pursuant to
a Qualifying Offer); (ii) the Trust engages in a merger or business
combination transaction in which the Trust is the successor and the
Common Shares are changed or exchanged; or (iii) 50% or more of the
Trust's assets or earning power is sold or transferred, each holder of a
Right (except Rights which have previously been voided as set forth
above) shall thereafter have the right to receive, upon exercise of the
Right, common shares of the acquiring company having a value equal to
two times the Exercise Price of the Right.
The Purchase Price payable, and the number of Units of Preferred Shares
or other securities or property issuable upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the
event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Shares, (ii) if holders of the
Preferred Shares are granted certain rights or warrants to subscribe for
Preferred Shares or convertible securities at less than the current
market price of the Preferred Shares, or (iii) upon the distribution to
holders of the Preferred Shares of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights
or warrants (other than those referred to above).
With certain exceptions, no adjustments in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the
Purchase Price. No fractional Units will be issued and, in lieu thereof,
an adjustment in cash will be made based on the market price of the
Preferred Shares on the last trading date prior to the date of exercise.
At any time after the Share Acquisition Date, the Board of Trustees of
the Trust may exchange the Rights (other than Rights owned by an
Acquiring Person), in whole or in part, at an exchange ratio equal to
(i) a number of Common Shares per Right with a value equal to the spread
between the value of the number of Common Shares for which the Rights
may then be exercised and the Purchase Price or (ii) if prior to the
acquisition by the Acquiring Person of 50% or more of the then
outstanding Common Shares, one Common Share per Right (subject to
adjustment). Any such exchange shall require the concurrence of at
least 75% of the Trustees.
At any time until ten (10) days following the Share Acquisition Date,
the Trust may redeem the Rights in whole, but not in part, at a price of
$0.0001 per Right. Under certain circumstances, the decision to redeem
shall require the concurrence of at least 75% of the members of the
Board of Trustees of the Trust. Immediately upon the action of the
Board of Trustees ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to receive
the $0.0001 redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Trust, including, without limitation, the
right to vote or to receive dividends. While the distribution of the
Rights will not be taxable to shareholders or to the Trust, shareholders
may, depending upon the circumstances, recognize taxable income in the
event that the Rights become exercisable for Common Shares (or other
consideration) of the Trust as set forth above or in the event the
Rights are redeemed.
Other than those provisions relating to the principal economic terms of
the Rights, any of the provisions of the Rights Agreement may be amended
by the Board of Trustees of the Trust prior to the Distribution Date.
After the Distribution Date, the provisions of the Rights Agreement may
be amended by the Board of Trustees (in certain circumstances, with the
approval of at least 75% of the trustees) in order to cure any
ambiguity, to make changes that do not adversely affect the interests of
holders of Rights (excluding the interests of any Acquiring Person), or
to shorten or lengthen any time period under the Rights Agreement;
provided, however, that no amendment to adjust the time period governing
redemption shall be made at such time as the Rights are not redeemable.
A copy of the Rights Agreement is being filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form
8-A. A copy of the Rights Agreement is available free of charge from
the Company. This Summary of Rights does not purport to be complete and
is qualified in its entirety by reference to the Rights Agreement, which
is incorporated herein by reference.
