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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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
----------------
GLENBOROUGH REALTY TRUST INCORPORATED
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND (94-3211970)
(STATE OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
400 SOUTH EL CAMINO REAL, 11TH FLOOR
SAN MATEO, CALIFORNIA 94402
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
If this Form relates to the registration of a class of debt securities and is
effective upon filing pursuant to General Instruction A(c)(1) please check the
following box. [ ]
If this Form relates to the registration of a class of debt securities and is to
become effective simultaneously with the effectiveness of a concurrent
registration statement under the Securities Act of 1933 pursuant to General
Instruction A(c)(2) please check the following box. [ ]
SECURITIES ACT REGISTRATION STATEMENT FILE NUMBER
TO WHICH THIS FORM RELATES: 333-40959
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:
<TABLE>
<CAPTION>
TITLE OF EACH CLASS TO NAME OF EACH EXCHANGE ON WHICH EACH
BE SO REGISTERED CLASS IS TO BE REGISTERED
- ------------------------------- -------------------------------------
<S> <C>
Series A Convertible ____% New York Stock Exchange
Preferred Stock (liquidation
preference $25.00 per share)
$0.001 Par Value
</TABLE>
SECURITIES TO BE REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
NONE
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The description of the Registrant's ____% Series A Convertible
Preferred Stock (liquidation preference $25.00 per share), par
value $.001 per share (the "Series A Preferred Shares")
included under the caption "Description of Series A Preferred
Shares" in the Registrant's Registration Statement on Form S-3
No. 333-40959 (the "Registration Statement") is incorporated
herein by reference. A description of the Registrant's Series A
Preferred Shares will also be contained under such caption in
the final prospectus supplement to be filed by the Registrant
pursuant to Rule 424(b) of the Securities Act of 1933, as
amended, in connection with the offering covered by the
Registration Statement. The description contained in the final
prospectus supplement shall be deemed to be incorporated herein
by reference. The Series A Preferred Shares are to be
registered on the New York Stock Exchange.
ITEM 2. EXHIBITS.
(A) Articles of Amendment and Restatement of Articles of
Incorporation of Registrant (incorporated by reference to
Exhibit 3.2 to the Registrant's Registration Statement on
Form S-11, Registration No. 333-09411).
(B) Bylaws of Registrant (incorporated by reference to Exhibit
3.1 to the Registrant's Registration Statement on Form
S-11, Registration No. 333-09411).
(C) Form of Articles Supplementary of Registrant for the ___%
Series A Convertible Preferred Shares.
(D) Specimen of Registrant's ___% Series A Convertible
Preferred Stock certificate.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities and
Exchange Act of 1934, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereto duly authorized.
Dated: January 20, 1998
GLENBOROUGH REALTY TRUST INCORPORATED
By: /s/ Frank E. Austin
_____________________________________
Frank E. Austin
Senior Vice President and
Secretary
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<TABLE>
<CAPTION>
EXHIBIT INDEX
EXHIBIT DESCRIPTION
- ------------------ ----------------------------------------
<S> <C>
A Articles of Amendment and Restatement of Articles of
Incorporation of Registrant (incorporated by reference to
Exhibit 3.2 to the Registrant's Registration Statement on
Form S-11, Registration No. 333-09411).
B Bylaws of Registrant (incorporated by reference to Exhibit
3.1 to the Registrant's Registration Statement on Form
S-11, Registration No. 333-09411).
C Form of Articles Supplementary of Registrant for the ___%
Series A Convertible Preferred Shares.
D Specimen of Registrant's ___% Series A Convertible
Preferred Stock certificate.
</TABLE>
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GLENBOROUGH REALTY TRUST INCORPORATED
FORM OF ARTICLES SUPPLEMENTARY
____% SERIES A CONVERTIBLE PREFERRED STOCK
(liquidation preference $25.00 per share)
Glenborough Realty Trust Incorporated, a Maryland corporation (the
"Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
FIRST: Under a power contained in Article SIXTH of the Articles of
Incorporation, as amended (the "Charter"), the Board of Directors of the
Corporation (the "Board of Directors"), has duly reclassified and designated
shares (the "Shares") of the Common Stock, par value $.001 per share (as defined
in the Charter), as shares of ___% Series A Convertible Preferred Stock
(liquidation preference $25.00 per share), par value $.001 per share, with the
following preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications and terms
and conditions of redemption, which upon any restatement of the Charter, shall
be deemed to be part of Article SIXTH of the Charter:
Section 1. Number of Shares and Designation. This series of preferred
stock shall be designated as ___% Series A Convertible Preferred Stock
(liquidation preference $25.00 per share), par value $.001 per share (the
"Series A Preferred Shares"). The number Series A Preferred Shares to be
authorized shall be 10,000,000.
Section 2. Definitions. For purposes of the Series A Preferred Shares,
the following terms shall have the meanings indicated:
"Board of Directors" shall mean the Board of Directors of the
Corporation or any committee authorized by such Board of Directors to perform
any of its responsibilities with respect to the Series A Preferred Shares.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which state or federally chartered banking institutions in New York, New
York are not required to be open.
"Common Shares" shall mean the shares of Common Stock of the
Corporation, par value $.001 per share.
"Constituent Person" shall have the meaning set forth in paragraph (e)
of Section 7 hereof.
"Conversion Price" shall mean the conversion price per Common Share for
which the Series A Preferred Shares are convertible, as such Conversion Price
may be adjusted pursuant to Section 7 hereof. The initial conversion price shall
be $____________ per Common Share (equivalent to a conversion rate of
______________ of a Common Share for each Series A Preferred Share).
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"Current Market Price" of publicly traded Common Shares or any other
class of shares of beneficial interest or other security of the Corporation or
any other issuer for any day shall mean the last reported sales price, regular
way, on such day, or, if no sale takes place on such day, the average of the
reported closing bid and asked prices on such day, regular way, in either case
as reported on the New York Stock Exchange ("NYSE") or, if such security is not
listed or admitted for trading on the NYSE, on the principal national securities
exchange on which such security is listed or admitted for trading or, if not
listed or admitted for trading on any national securities exchange, on the
NASDAQ National Market or, if such security is not quoted on such NASDAQ
National Market, the average of the closing bid and asked prices on such day in
the over-the-counter market as reported by NASDAQ or, if bid and asked prices
for such security on such day shall not have been reported through NASDAQ, the
average of the bid and asked prices on such day as furnished by any NYSE member
firm regularly making a market in such security selected for such purpose by the
Chief Executive Officer of the Corporation or the Board of Directors.
"Dividend Payment Date" shall mean the 15th calendar day of January,
April, July and October, in each year, commencing on April 15, 1998; provided,
however, that if any Dividend Payment Date falls on any day other than a
Business Day, the dividend payment due on such Dividend Payment Date shall be
paid on the first Business Day immediately following such Dividend Payment Date.
"Dividend Payment Record Date" shall have the meaning set forth in
paragraph (a) of Section 3 hereof.
"Dividend Periods" shall mean quarterly dividend periods commencing on
January 15, April 15, July 15 and October 15 of each year and ending on and
including the day preceding the first day of the next succeeding Dividend Period
(other than the initial Dividend Period, which shall commence on the Issue Date
and end on and include April 15, 1998).
"Fair Market Value" shall mean the average of the daily Current Market
Prices per Common Share during the five (5) consecutive Trading Days selected by
the Corporation commencing not more than 20 Trading Days before, and ending not
later than, the earlier of the day in question and the day before the "ex" date
with respect to the issuance or distribution requiring such computation. The
term "`ex' date," when used with respect to any issuance or distribution, means
the first day on which the Common Shares trade regular way, without the right to
receive such issuance or distribution, on the exchange or in the market, as the
case may be, used to determine that day's Current Market Price.
"Issue Date" with respect to the Series A Preferred Shares shall mean
the first date on which any of the Series A Preferred Shares are issued and
sold.
"Junior Shares" shall mean the Common Shares and any other class or
series of shares of capital stock of the Corporation constituting junior stock
within the meaning set forth in paragraph (c) of Section 9 hereof.
"Liquidation Preference" shall have the meaning set forth in paragraph
(a) of Section 4 hereof.
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"Non-Electing Share" shall have the meaning set forth in paragraph (e)
of Section 7 hereof.
"Parity Shares" shall have the meaning set forth in paragraph (b) of
Section 9 hereof.
"Person" shall mean any individual, firm, partnership, corporation,
limited liability company or other entity, and shall include any successor (by
merger or otherwise) of such entity.
"Redemption Date" shall have the meaning set forth in paragraph (b) of
Section 5 hereof.
"Securities" shall have the meaning set forth in paragraph (d)(iii) of
Section 7 hereof.
"Series A Preferred Shares" shall have the meaning set forth in Section
1 hereof.
"Set apart for payment" shall be deemed to include, without any action
other than the following, the recording by the Corporation in its accounting
ledgers of any accounting or bookkeeping entry which indicates, pursuant to a
declaration of a dividend or other distribution by the Board of Directors, the
allocation of funds to be so paid on any series or class of shares of capital
stock of the Corporation; provided, however, that if any funds for any class or
series of Junior Shares or any class or series of shares of capital stock
ranking on a parity with the Series A Preferred Shares as to the payment of
dividends are placed in a separate account of the Corporation or delivered to a
disbursing, paying or other similar agent, then "set apart for payment" with
respect to the Series A Preferred Shares shall mean placing such funds in a
separate account or delivering such funds to a disbursing, paying or other
similar agent.
"Trading Day" shall mean any day on which the securities in question
are traded on the NYSE, or if such securities are not listed or admitted for
trading on the NYSE, on the principal national securities exchange on which such
securities are listed or admitted, or if not listed or admitted for trading on
any national securities exchange, on the NASDAQ National Market, or if such
securities are not quoted on such NASDAQ National Market, in the applicable
securities market in which the securities are traded.
"Transaction" shall have the meaning set forth in paragraph (e) of
section 7 hereof.
"Transfer Agent" means Registrar and Transfer Company, 10 Commerce
Drive, Cranford, New Jersey 07016, or such other agent or agents of the
Corporation as may be designated by the Board of Directors or its designee as
the transfer agent for the Series A Preferred Shares.
"Voting Preferred Shares" shall have the meaning set forth in Section
10 hereof.
Section 3. Dividends.
(a) The holders of Series A Preferred Shares shall be entitled
to receive, when, as and if authorized and declared by the Board of
Directors out of assets legally available for that purpose, dividends
payable in cash in an amount per share equal to the greater of: (i)
$________ per annum; or (ii) the cash distributions (determined on each
of the quarterly Dividend Payment
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Dates) on the Common Shares (or portion thereof) into which a Series A
Preferred Share is convertible (equal to the number of Common Shares,
or portion thereof, into which a Series A Preferred Share is
convertible, multiplied by the most current quarterly distribution on
or before the applicable Dividend Payment Date). Such dividends shall
be cumulative from the Issue Date, whether or not in any Dividend
Period or Periods such dividends shall be declared or there shall be
funds of the Corporation legally available for the payment of such
dividends, and shall be payable quarterly, when, as and if authorized
and declared by the Board of Directors, in arrears on Dividend Payment
Dates, commencing on the first Dividend Payment Date after the Issue
Date. Dividends are cumulative from the most recent Dividend Payment
Date to which dividends have been paid, whether or not in any Dividend
Period or Periods such dividends shall be declared or there shall be
funds legally available therefor. Each such dividend shall be payable
in arrears to the holders of record of the Series A Preferred Shares,
as they appear on the stock records of the Corporation at the close of
business on such record dates, not more than 60 nor less than 20 days
preceding the applicable Dividend Payment Date (the "Dividend Payment
Record Date"), as shall be fixed by the Board of Directors. Accrued and
unpaid dividends for any past Dividend Periods may be authorized and
declared and paid at any time, without reference to any regular
Dividend Payment Date, to holders of record on such date, not exceeding
45 days preceding the payment date thereof, as may be fixed by the
Board of Directors.
(b) The amount of dividends payable for the initial Dividend
Period, or any other period shorter or longer than a full Dividend
Period, on the Series A Preferred Shares shall be computed on the basis
of twelve 30-day months and a 360-day year. Holders of Series A
Preferred Shares shall not be entitled to any dividends, whether
payable in cash, property or stock, in excess of cumulative dividends,
as herein provided, on the Series A Preferred Shares. No interest, or
sum of money in lieu of interest, shall be payable in respect of any
dividend payment or payments on the Series A Preferred Shares that may
be in arrears.
(c) So long as any Series A Preferred Shares are outstanding,
no dividends, except as described in the immediately following
sentence, shall be authorized and declared or paid or set apart for
payment, or other distribution of cash or other property declared or
made directly by the Corporation or any person acting on behalf of the
Corporation, on any series or class or classes of Parity Shares for any
period unless full cumulative dividends have been or contemporaneously
are authorized and declared and paid or authorized and declared and a
sum sufficient for the payment thereof set apart for such payment on
the Series A Preferred Shares for all Dividend Periods terminating on
or prior to the Dividend Payment Date on such class or series of Parity
Shares. When dividends are not paid in full or a sum sufficient for
such payment is not set apart, as aforesaid, all dividends authorized
and declared upon Series A Preferred Shares and all dividends
authorized and declared upon any other series or class or classes of
Parity Shares shall be authorized and declared ratably in proportion to
the respective amounts of dividends accumulated, accrued and unpaid on
the Series A Preferred Shares and such Parity Shares.
(d) So long as any Series A Preferred Shares are outstanding,
no dividends (other than dividends or distributions paid solely in
shares of, or options, warrants or rights to subscribe for or purchase
shares of, Junior Shares) shall be authorized and declared or paid or
set
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apart for payment by the Corporation or any person acting on behalf of
the Corporation or other distribution of cash or other property
authorized and declared or made directly or indirectly by the
Corporation or any such affiliate or person, with respect to any Junior
Shares, nor shall any Junior Shares be redeemed, purchased or otherwise
acquired through a sinking fund or otherwise (other than a redemption,
purchase or other acquisition of Common Shares made for purposes of and
in compliance with requirements of an employee incentive or benefit
plan of the Corporation or any subsidiary) or as permitted under
Article NINTH of the Charter, for any consideration (or any moneys to
be paid to or made available for a sinking fund for the redemption of
any shares of such stock) by the Corporation, directly or indirectly
(except by conversion into or exchange for Junior Shares), nor shall
any payment or distribution of cash or other property be made for the
benefit of any holder of Junior Stock, directly or indirectly, unless
in each case (i) the full cumulative dividends on all outstanding
Series A Preferred Shares and any other Parity Shares of the
Corporation shall have been paid or declared and funds have been set
apart for payment for all past Dividend Periods with respect to the
Series A Preferred Shares and all past dividend periods with respect to
such Parity Shares and (ii) sufficient funds shall have been paid or
set apart for the payment of the dividend for the current Dividend
Period with respect to the Series A Preferred Shares and any Parity
Shares; provided, however, that the foregoing limitations do not
restrict the Corporation's ability to take the foregoing actions with
respect to any Parity Stock.
Section 4. Liquidation Preference.
(a) In the event of any liquidation, dissolution or winding up
of the Corporation, whether voluntary or involuntary, before any
payment or distribution of the assets of the Corporation (whether
capital or surplus) shall be made to or set apart for the holders of
Junior Shares, the holders of Series A Preferred Shares shall be
entitled to receive Twenty-Five Dollars ($25.00) per Series A Preferred
Share (the "Liquidation Preference") plus an amount equal to all
dividends (whether or not earned or declared) accumulated, accrued and
unpaid thereon to the date of final distribution to such holder; but
such holders of Series A Preferred Shares shall not be entitled to any
further payment. If, upon any such liquidation, dissolution or winding
up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributable among the holders of Series A Preferred Shares
shall be insufficient to pay in full the preferential amount aforesaid
and liquidating payments on any other Parity Shares, then such assets,
or the proceeds thereof, shall be distributed among the holders of such
Series A Preferred Shares and any such other Parity Shares ratably in
accordance with the respective amounts that would be payable on such
Series A Preferred Shares and any such other Parity Shares if all
amounts payable thereon were paid in full. For the purposes of this
Section 4, (i) a consolidation or merger of the Corporation with one or
more entities, (ii) a statutory share exchange and (iii) a sale or
transfer of all or substantially all of the Corporation's assets shall
not be deemed to be a liquidation, dissolution or winding up, voluntary
or involuntary, of the Corporation.
(b) Subject to the rights of the holders of shares of any
series or class or classes of shares of capital stock ranking on a
parity with or prior to the Series A Preferred Shares upon liquidation,
dissolution or winding up, upon any liquidation, dissolution or winding
up of the Corporation, after payment shall have been made in full to
the holders of the Series A Preferred Shares, as provided in this
Section 4, any series or class or classes of Junior Shares
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shall, subject to any respective terms and provisions applying thereto,
be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Series A Preferred Shares shall not
be entitled to share therein.
Section 5. Redemption at the Option of the Corporation.
(a) The Series A Preferred Shares shall not be redeemable by
the Corporation prior to January , 2003. On and after January , 2003
the Corporation, at its option, may redeem the Series A Preferred
Shares, in whole or in part, as set forth herein, subject to the
provisions described below.
(b) On and after January , 2003, the Series A Preferred Shares
may be redeemed in cash at the option of the Corporation, in whole or
from time to time in part, at the following redemption prices per share
of Series A Preferred Stock if redeemed during the twelve-month period
beginning January , of the year indicated below, plus, in each case,
all dividends accrued and unpaid on the Series A Preferred Shares up to
the date fixed for such redemption (the "Redemption Date"), upon giving
notice as provided below:
REDEMPTION PRICE (PERCENTAGE OF
LIQUIDATION PRICE) PER
YEAR SERIES A PREFERRED SHARE
--------------------------- --------------------------------
2003....................... $ %
2004.......................
2005.......................
2006.......................
2007.......................
2008 and thereafter........ $ 25.00 100.000%
(c) If fewer than all of the outstanding Series A Preferred
Shares are to be redeemed, the shares to be redeemed will be determined
pro rata or by lot or in such other manner as prescribed by the
Corporation's Board of Directors. In addition, the Corporation may
redeem Series A Preferred Shares in certain circumstances relating to
the maintenance of its ability to qualify as a REIT for Federal income
tax purposes.
(d) Notice of redemption will be mailed, not less than 30 nor
more than 60 days prior to the Redemption Date, to each holder of
record of Series A Preferred Shares to be redeemed, notifying such
holder of the Corporation's election to redeem such shares, stating the
Redemption Date, the redemption price, the number of shares to be
redeemed (and, if fewer than all the Series A Preferred Shares are to
be redeemed, the number of shares to be redeemed from such holder) and
the place(s) where the Series A Preferred are to be surrendered for
payment.
(e) Upon any redemption of Series A Preferred Shares, the
Corporation shall pay in cash on each Series A Preferred Share to be
redeemed any accumulated, accrued and unpaid dividends for any Dividend
Period ending on or prior to the Redemption Date, whether or not earned
or declared. If the Redemption Date falls after a Dividend Payment
Record Date and prior to the corresponding Dividend Payment Date, then
each holder of Series A Preferred Shares at the close of business on
such Dividend Payment Record Date shall be entitled to the dividend
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payable on such Series A Preferred Shares on the corresponding Dividend
Payment Date notwithstanding the redemption of such Series A Preferred
Shares before such Dividend Payment Date. Except as provided above, the
Corporation shall make no payment or allowance for unpaid dividends,
whether or not in arrears, on Series A Preferred Shares called for
redemption.
(f) If full cumulative dividends on the Series A Preferred
Shares and any other series or class or classes of Parity Shares of the
Corporation have not been paid or declared and set apart for payment,
except as otherwise permitted under Article NINTH of the Charter, the
Series A Preferred Shares may not be redeemed in part, and the
Corporation may not purchase, or otherwise acquire Series A Preferred
Shares otherwise than pursuant to a purchase or exchange offer made on
the same terms to all holders of Series A Preferred Shares.
(g) Notice of redemption having been published or mailed as
aforesaid, from and after the Redemption Date (unless the Corporation
shall fail to make available an amount of cash necessary to effect such
redemption), (i) except as otherwise provided herein, dividends on the
Series A Preferred Shares so called for redemption shall cease to
accrue, (ii) said shares shall no longer be deemed to be outstanding,
and (iii) all rights of the holders thereof as holders of Series A
Preferred Shares of the Corporation shall cease (except the rights to
receive the cash payable upon such redemption, without interest
thereon, upon surrender and endorsement of their certificates if so
required and to receive any dividends payable thereon). The
Corporation's obligation to provide cash in accordance with the
preceding sentence shall be deemed fulfilled if, or before the
Redemption Date, the Corporation shall deposit with a bank or trust
company (which may be an affiliate of the Corporation) that has an
office in the Borough of Manhattan, City of New York, in San Francisco,
California or in Baltimore, Maryland and that has, or is an affiliate
of a bank or trust company that has, a capital and surplus of at least
$50,000,000, the cash necessary for such redemption, in trust, with
irrevocable instructions that such cash be applied to the redemption of
the Series A Preferred Shares so called for redemption. No interest
shall accrue for the benefit of the holder of Series A Preferred Shares
to be redeemed on any cash so set aside by the Corporation. Subject to
applicable escheat laws, any such cash unclaimed at the end of two
years from the Redemption Date shall revert to the general funds of the
Corporation, after which reversion the holders of such shares so called
for redemption shall look only to the general funds of the Corporation
for the payment of such cash.
(h) The Series A Preferred Shares have no stated maturity date
and will not be subject to any sinking fund or mandatory redemption
provisions.
Section 6. Reclassification of Converted Shares.
All Series A Preferred Shares which shall have been converted pursuant
to Section 7 herein shall automatically be reclassified as Common Stock. The
number of shares of Common Stock issuable upon conversion shall be determined in
accordance with Section 7 hereof.
Section 7. Conversion.
Holders of Series A Preferred Shares shall have the right to convert
all or a portion of such shares into Common Shares, as follows:
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(a) Subject to and upon compliance with the provisions of this
Section 7, a holder of Series A Preferred Shares shall have the right,
at his or her option, at any time to convert such shares into the
number of fully paid and non-assessable Common Shares obtained by
dividing the aggregate Liquidation Preference of such Series A
Preferred Shares by the Conversion Price (as in effect at the time and
on the date provided for in the last paragraph of paragraph (b) of this
Section 7) by surrendering such Series A Preferred Shares to be
converted, such surrender to be made in the manner provided in
paragraph (b) of this Section 7; provided, however, that the right to
convert Series A Preferred Shares called for redemption pursuant to
Section 5 hereof shall terminate at the close of business on the
Redemption Date fixed for such redemption, unless the Corporation shall
default in making payment of the cash payable upon such redemption
under Section 5 hereof.
(b) In order to exercise the conversion right, the holder of
each Series A Preferred Share to be converted shall surrender the
certificate representing such Series A Preferred Share, duly endorsed
or assigned to the Corporation or in blank, at the office of the
Corporation or the office of the Transfer Agent, accompanied by written
notice to the Corporation that the holder thereof elects to convert
such Series A Preferred Shares. Unless the Common Shares issuable on
conversion are to be issued in the same name as the name in which such
Series A Preferred Shares are registered, each share surrendered for
conversion shall be accompanied by instruments of transfer, in form
satisfactory to the Corporation, duly executed by the holder or such
holder's duly authorized attorney and an amount sufficient to pay any
transfer or similar tax (or evidence reasonably satisfactory to the
Corporation demonstrating that such taxes have been paid).
Holders of Series A Preferred Shares at the close of business on a
Dividend Payment Record Date shall be entitled to receive the dividend payable
on such Series A Preferred Shares on the corresponding Dividend Payment Date
notwithstanding the conversion thereof following such Dividend Payment Record
Date and prior to such Dividend Payment Date. However, Series A Preferred Shares
surrendered for conversion during the period between the close of business on
any Dividend Payment Record Date and the opening of business on the
corresponding Dividend Payment Date (except Series A Preferred Shares converted
after the issuance of a notice of redemption with respect to a Redemption Date
during such period or coinciding with such Dividend Payment Date, such Series A
Preferred Shares being entitled to such dividend on the Dividend Payment Date)
must be accompanied by payment of an amount equal to the dividend payable on
such Series A Preferred Shares on such Dividend Payment Date. A holder of Series
A Preferred Shares on a Dividend Payment Record Date who (or whose transferees)
tenders any such Series A Preferred Shares for conversion into Common Shares on
such Dividend Payment Date will receive the dividend payable by the Corporation
on such Series A Preferred Shares on such date, and the converting holder need
not include payment of the amount of such dividend upon surrender of Series A
Preferred Shares for conversion. Except as provided above, the Corporation shall
make no payment or allowance for unpaid dividends, whether or not in arrears, on
converted Series A Preferred Shares or for dividends on the Common Shares issued
upon such conversion.
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As promptly as practicable after the surrender of certificates for
Series A Preferred Shares as aforesaid, the Corporation shall issue and shall
deliver at such office to such holder, or on his or her written order, a
certificate or certificates for the number of full Common Shares issuable upon
the conversion of such shares in accordance with the provisions of this Section
7, and any fractional interest in respect of a Common Share arising upon such
conversion shall be settled as provided in paragraph (c) of this Section 7.
Each conversion shall be deemed to have been effected immediately prior
to the close of business on the date on which the certificates for Series A
Preferred Shares shall have been surrendered and such notice (and if applicable,
payment of an amount equal to the dividend payable on such Series A Preferred
Shares) received by the Corporation as aforesaid, and the person or persons in
whose name or names any certificate or certificates for Common Shares shall be
issuable upon such conversion shall be deemed to have become the holder or
holders of record of the Common Shares represented thereby at such time on such
date, and such conversion shall be at the Conversion Price in effect at such
time and on such date unless the stock transfer books of the Corporation shall
be closed on that date, in which event such person or persons shall be deemed to
have become such holder or holders of record at the close of business on the
next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date on which such
Series A Preferred Shares shall have been surrendered and such notice received
by the Corporation.
(c) No fractional shares or scrip representing fractions of
Common Shares shall be issued upon conversion of the Series A Preferred
Shares. Instead of any fractional interest in a Common Share that would
otherwise be deliverable upon the conversion of a Series A Preferred
Share, the Corporation shall pay to the holder of such Series A
Preferred Share an amount in cash based upon the Current Market Price
of Common Shares on the Trading Day immediately preceding the date of
conversion. If more than one Series A Preferred Share shall be
surrendered for conversion at one time by the same holder, the number
of full Common Shares issuable upon conversion thereof shall be
computed on the basis of the aggregate number of Series A Preferred
Shares so surrendered.
(d) The Conversion Price shall be adjusted from time to time
as follows:
(i) If the Corporation shall after the Issue Date (A)
pay a dividend or make a distribution payable in Common Shares
on any class of shares of capital stock of the Corporation,
(B) subdivide its outstanding Common Shares into a greater
number of shares, (C) combine its outstanding Common Shares
into a smaller number of shares or (D) issue any shares of
capital stock by reclassification of its Common Shares, the
Conversion Price in effect at the opening of business on the
day following the date fixed for the determination of
stockholders entitled to receive such dividend or distribution
or at the opening of business on the day following the day on
which such subdivision, combination or reclassification
becomes effective, as the case may be, shall be adjusted so
that the holder of any Series A Preferred Share thereafter
surrendered for conversion shall be entitled to receive the
number of Common Shares that such holder would have owned or
have been entitled to receive after the happening of any of
the events described above had such Series A Preferred Shares
been converted immediately prior to
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<PAGE> 10
the record date in the case of a dividend or distribution or
the effective date in the case of a subdivision, combination
or reclassification. An adjustment made pursuant to this
subparagraph (i) shall become effective immediately upon the
opening of business on the day next following the record date
(subject to paragraph (h) below) in the case of a dividend or
distribution and shall become effective immediately upon the
opening of business on the day next following the effective
date in the case of a subdivision, combination or
reclassification.
(ii) If the Corporation shall issue after the Issue
Date rights, options or warrants to all holders of Common
Shares entitling them (for a period expiring within 45 days
after the record date mentioned below) to subscribe for or
purchase Common Shares at a price per share less than the Fair
Market Value per Common Share on the record date for the
determination of stockholders entitled to receive such rights,
options or warrants, then the Conversion Price in effect at
the opening of business on the day next following such record
date shall be adjusted to equal the price determined by
multiplying (I) the Conversion Price in effect immediately
prior to the opening of business on the day following the date
fixed for such determination by (II) a fraction, the numerator
of which shall be the sum of (A) the number of Common Shares
outstanding on the close of business on the date fixed for
such determination and (B) the number of shares that the
aggregate proceeds to the Corporation from the exercise of
such rights, options or warrants for Common Shares would
purchase at such Fair Market Value, and the denominator of
which shall be the sum of (A) the number of Common Shares
outstanding on the close of business on the date fixed for
such determination and (B) the number of additional Common
Shares offered for subscription or purchase pursuant to such
rights, options or warrants. Such adjustment shall become
effective immediately upon the opening of business on the day
next following such record date (subject to paragraph (h)
below). In determining whether any rights, options or warrants
entitle the holders of Common Shares to subscribe for or
purchase Common Shares at less than such Fair Market Value,
there shall be taken into account any consideration received
by the Corporation upon issuance and upon exercise of such
rights, options or warrants, the value of such consideration,
if other than cash, to be determined by the Chief Executive
Officer or the Board of Directors, whose determination shall
be conclusive.
(iii) If the Corporation shall distribute to all
holders of its Common Shares any shares of capital stock of
the Corporation (other than Common Shares) or evidence of its
indebtedness or assets (excluding cash dividends or
distributions paid out of current or accumulated funds from
operations to the extent the same results in a payment of an
equal cash dividend to the holders of Series A Preferred
Shares or rights or warrants to subscribe for or purchase any
of its securities (excluding those rights and warrants issued
to all holders of Common Shares entitling them for a period
expiring within 45 days after the record date referred to in
subparagraph (ii) above to subscribe for or purchase Common
Shares, which rights and warrants are referred to in and
treated under subparagraph (ii) above) (any of the foregoing
being hereinafter in this subparagraph (iii) called the
"Securities"), then in each case the Conversion Price shall be
adjusted so that it shall equal the price determined by
multiplying (I) the Conversion Price in effect immediately
prior to the close of business on the date fixed for the
determination of stockholders entitled to receive such
distribution by (II) a fraction, the numerator of which shall
be the Fair Market Value per share of the Common Shares on the
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<PAGE> 11
record date mentioned below less the then fair market value
(as determined by the Chief Executive officer or the Board of
Directors, whose determination shall be conclusive) of the
portion of the shares of capital stock or assets or evidences
of indebtedness so distributed or of such rights or warrants
applicable to one Common Share, and the denominator of which
shall be the Fair Market Value per share of the Common Shares
on the record date mentioned below. Such adjustment shall
become effective immediately upon the opening of business on
the day next following (subject to paragraph (h) below) the
record date for the determination of stockholders entitled to
receive such distribution. For the purposes of this
subparagraph (iii), the distribution of a Security, which is
distributed not only to the holders of the Common Shares on
the date fixed for the determination of stockholders entitled
to such distribution of such Security, but also is required to
be distributed with each Common Share delivered to a Person
converting a Series A Preferred Share after such determination
date, shall not require an adjustment of the Conversion Price
pursuant to this subparagraph (iii); provided that on the
date, if any, on which a person converting a Series A
Preferred Share would no longer be entitled to receive such
Security with a Common Share (other than as a result of the
termination of all such Securities), a distribution of such
Securities shall be deemed to have occurred, and the
Conversion Price shall be adjusted as provided in this
subparagraph (iii) (and such day shall be deemed to be "the
date fixed for the determination of the stockholders entitled
to receive such distribution" and "the record date" within the
meaning of the two preceding sentences).
The occurrence of a distribution or the occurrence of any other event
as a result of which holders of Series A Preferred Shares shall not be entitled
to receive rights, including exchange rights (the "Rights"), pursuant to any
stockholders protective rights agreement (the "Agreement") that may be adopted
by the Corporation as if such holders had converted such shares into Common
Shares immediately prior to the occurrence of such distribution or event shall
not be deemed a distribution of Securities for the purposes of any Conversion
Price adjustment pursuant to this subparagraph (iii) or otherwise give rise to
any Conversion Price adjustment pursuant to this Section 7; provided, however,
that in lieu of any adjustment to the Conversion Price as a result of any such a
distribution or occurrence, the Corporation shall make provision so that Rights,
to the extent issuable at the time of conversion of any Series A Preferred
Shares into Common Shares, shall issue and attach to such Common Shares then
issued upon conversion in the amount and manner and to the extent and as
provided in the Agreement in respect of issuances at the time of Common Shares
other than upon conversion.
(iv) No adjustment in the Conversion Price shall be
required unless such adjustment would require a cumulative
increase or decrease of at least 1% in such price; provided,
however, that any adjustments that by reason of this
subparagraph (iv) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment
until made; and provided, further, that any adjustment shall
be required and made in accordance with the provisions of this
Section 7 (other than this subparagraph (iv)) not later than
such time as may be required in order to preserve the tax-free
nature of a distribution to the holders of Common Shares.
Notwithstanding any other provisions of this Section 7, the
Corporation shall not be required to make any adjustment of
the Conversion Price for the issuance of any Common Shares
pursuant to any plan providing for the reinvestment of
dividends or interest payable on securities of the Corporation
and the investment of additional optional amounts in Common
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<PAGE> 12
Shares under such plan. All calculations under this Section 7
shall be made to the nearest cent (with $.005 being rounded
upward) or to the nearest one-tenth of a share (with .05 of a
share being rounded upward), as the case may be. Anything in
this paragraph (d) to the contrary notwithstanding, the
Corporation shall be entitled, to the extent permitted by law,
to make such reductions in the Conversion Price, in addition
to those required by this paragraph (d), as it in its
discretion shall determine to be advisable in order that any
stock dividends, subdivision of shares, reclassification or
combination of shares, distribution of rights, options or
warrants to purchase stock or securities, or a distribution of
other assets (other than cash dividends) hereafter made by the
Corporation to its stockholders shall not be taxable or, if
that is not possible, to diminish any income taxes that are
otherwise payable because of such event.
(e) If the Corporation shall be a party to any transaction
(including without limitation a merger, consolidation, statutory share
exchange, self tender offer for all or substantially all Common Shares,
sale of all or substantially all of the Corporation's assets or
recapitalization of the Common Shares and excluding any transaction as
to which subparagraph (d)(i) of this Section 7 applies) (each of the
foregoing being referred to herein as a "Transaction"), in each case as
a result of which Common Shares shall be converted into the right to
receive stock, securities or other property (including cash or any
combination thereof), each Series A Preferred Share that is not
converted into the right to receive stock, securities or other property
in connection with such Transaction shall thereafter be convertible
into the kind and amount of shares of stock, securities and other
property (including cash or any combination thereof) receivable upon
the consummation of such Transaction by a holder of that number of
Common Shares into which one Series A Preferred Share was convertible
immediately prior to such Transaction, assuming such holder of Common
Shares (i) is not a Person with which the Corporation consolidated or
into which the Corporation merged or which merged into the Corporation
or to which such sale or transfer was made, as the case may be (a
"Constituent Person"), or an affiliate of a Constituent Person and (ii)
failed to exercise his or her rights of the election, if any, as to the
kind or amount of stock, securities and other property (including cash
or any combination thereof) receivable upon such Transaction (provided
that if the kind or amount of stock, securities and other property
(including cash or any combination thereof) receivable upon such
Transaction is not the same for each Common Share of the Corporation
held immediately prior to such Transaction by other than a Constituent
Person or an affiliate thereof and in respect of which such rights of
election shall not have been exercised ("Non-Electing Share"), then for
the purpose of this paragraph (e) the kind and amount of stock,
securities and other property (including cash or any combination
thereof) receivable upon such Transaction by each Non-Electing Share
shall be deemed to be the kind and amount so receivable per share by a
plurality of the Non-Electing Shares). The Corporation shall not be a
party to any Transaction unless the terms of such Transaction are
consistent with the provisions of this paragraph (e), and it shall not
consent or agree to the occurrence of any Transaction until the
Corporation has entered into an agreement with the successor or
purchasing entity, as the case may be, for the benefit of the holders
of the Series A Preferred Shares that will contain provisions enabling
the holders of the Series A Preferred Shares that remain outstanding
after such Transaction to convert their Series A Preferred Shares into
the consideration received by holders of Common Shares at the
Conversion Price in effect immediately prior to such Transaction. The
provisions of this paragraph (e) shall similarly apply to successive
Transactions.
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<PAGE> 13
(f) If:
(i) the Corporation shall declare a dividend (or any other
distribution) on the Common Shares (other than in cash out of the
current or accumulated funds from operations to the extent the same
results in a payment of an equal cash dividend to the holders of Series
A Preferred Shares); or
(ii) the Corporation shall authorize the granting to the
holders of the Common Shares of rights or warrants to subscribe for or
purchase any shares of any class or any other rights or warrants (other
than Rights to which the second paragraph of subparagraph (d)(iii) of
this Section 7 applies); or
(iii) there shall be any reclassification of the Common Shares
(other than an event to which subparagraph (d) (i) of this Section 7
applies) or any consolidation or merger to which the Corporation is a
party and for which approval of any stockholders of the Corporation is
required, or a statutory share exchange involving the conversion or
exchange of Common Shares into securities or other property, or a self
tender offer by the Corporation for all or substantially all of its
outstanding Common Shares, or the sale or transfer of all or
substantially all of the assets of the Corporation as an entirety and
for which approval of any stockholders of the Corporation is required;
or
(iv) there shall occur the voluntary or involuntary
liquidation, dissolution or winding up of the Corporation,
then the Corporation shall cause to be filed with the Transfer Agent and shall
cause to be mailed to the holders of the Series A Preferred Shares at their
addresses as shown on the stock records of the Corporation, as promptly as
possible, but at least 15 days prior to the applicable date hereinafter
specified, a notice stating (A) the date on which a record is to be taken for
the purpose of such dividend, distribution or rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Shares of
record to be entitled to such dividend, distribution or rights or warrants are
to be determined or (B) the date on which such reclassification, consolidation,
merger, statutory share exchange, sale, transfer, liquidation, dissolution or
winding up is expected to become effective, and the date as of which it is
expected that holders of Common Shares of record shall be entitled to exchange
their Common Shares for securities or other property, if any, deliverable upon
such reclassification, consolidation, merger, statutory share exchange, sale,
transfer, liquidation, dissolution or winding up. Failure to give or receive
such notice or any defect therein shall not affect the legality or validity of
the proceedings described in this Section 7.
(g) Whenever the Conversion Price is adjusted as herein
provided, the Corporation shall promptly file with the Transfer Agent
an officer's certificate setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts requiring
such adjustment, which certificate shall be conclusive evidence of the
correctness of such adjustment absent manifest error. Promptly after
delivery of such certificate, the Corporation shall prepare a notice of
such adjustment of the Conversion Price setting forth the adjusted
Conversion Price and the effective date of such adjustment becomes
effective and shall mail such
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<PAGE> 14
notice of such adjustment of the Conversion Price to the holders of
each Series A Preferred Share at such holder's last address as shown on
the stock records of the Corporation.
(h) In any case in which paragraph (d) of this Section 7
provides that an adjustment shall become effective on the day next
following the record date for an event, the Corporation may defer until
the occurrence of such event (A) issuing to the holder of any Series A
Preferred Share converted after such record date and before the
occurrence of such event the additional Common Shares issuable upon
such conversion by reason of the adjustment required by such event over
and above the Common Shares issuable upon such conversion before giving
effect to such adjustment and (B) paying to such holder any amount of
cash in lieu of any fraction pursuant to paragraph (c) of this Section
7.
(i) There shall be no adjustment of the Conversion Price in
case of the issuance of any shares of capital stock of the Corporation
in a reorganization, acquisition or other similar transaction except as
specifically set forth in this Section 7. If any action or transaction
would require adjustment of the Conversion Price pursuant to more than
one paragraph of this Section 7, only one adjustment shall be made, and
such adjustment shall be the amount of adjustment that has the highest
absolute value.
(j) If the Corporation shall take any action affecting the
Common Shares, other than action described in this Section 7, that in
the opinion of the Board of Directors would materially adversely affect
the conversion rights of the holders of the Series A Preferred Shares,
the Conversion Price for the Series A Preferred Shares may be adjusted,
to the extent permitted by law, in such manner, if any, and at such
time, as the Board of Directors, in its sole discretion, may determine
to be equitable in the circumstances.
(k) The Corporation covenants that, following any increase in
the Conversion Price that results in a conversion rate of more than one
Common Share for each Series A Preferred Share, it will reserve and
keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued Common Shares, for the purpose of issuance
upon conversion of the Series A Preferred Shares, that number of Common
Shares required by any such increase in the Conversion Price. For
purposes of this paragraph (k), such number of Common Shares shall be
computed as if at the time of computation all such Series A Preferred
Shares were held by a single holder.
The Corporation further covenants that any Common Shares issued upon
conversion of the Series A Preferred Shares shall be validly issued, fully paid
and non-assessable. Before taking any action that would cause an adjustment
reducing the Conversion Price below the then-par value of the Common Shares
deliverable upon conversion of the Series A Preferred Shares, the Corporation
shall take any corporate action that, in the opinion of its counsel, may be
necessary in order that the Corporation may validly and legally issue fully paid
and non-assessable Common Shares at such adjusted Conversion Price.
The Corporation shall endeavor to list the Common Shares required to be
delivered upon conversion of the Series A Preferred Shares, prior to such
delivery, upon each national securities
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<PAGE> 15
exchange, if any, upon which the outstanding Common Shares are listed at the
time of such delivery.
Prior to the delivery of any securities that the Corporation shall be
obligated to deliver upon conversion of the Series A Preferred Shares, the
Corporation shall endeavor to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with, or
any approval of or consent to the delivery thereof, by any governmental
authority.
(l) The Corporation shall pay any and all documentary stamp or
similar issue or transfer taxes payable in respect of the issue or
delivery of Common Shares or other securities or property on conversion
of the Series A Preferred Shares pursuant hereto; provided, however,
that the Corporation shall not be required to pay any tax that may be
payable in respect of any transfer involved in the issue or delivery of
any Common Shares or other securities or property in a name other than
that of the holder of the Series A Preferred Shares to be converted,
and no such issue or delivery shall be made unless and until the person
requesting such issue or delivery has paid to the Corporation the
amount of any such tax or established, to the reasonable satisfaction
of the Corporation, that such tax has been paid.
Section 8. Permissible Distributions. In determining whether a
distribution (other than upon liquidation, dissolution or winding up), whether
by dividend, or upon redemption or other acquisition of shares or otherwise, is
permitted under Maryland law, amounts that would be needed, if the Corporation
were to be dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of holders of shares of any class or series
of capital stock whose preferential rights upon dissolution are superior or
prior to those receiving the distribution shall not be added to the
Corporation's total liabilities.
Section 9. Ranking. Any class or series of shares of capital stock of
the Corporation shall be deemed to rank:
(a) prior to the Series A Preferred Shares, as to the payment
of dividends and as to distribution of assets upon liquidation,
dissolution or winding up, if the holders of such class or series shall
be entitled to the receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of Series A Preferred Shares;
(b) on a parity with the Series A Preferred Shares, as to the
payment of dividends and as to the distribution of assets upon
liquidation, dissolution or winding up, whether or not the dividend
rates, dividend payment dates or redemption or liquidation prices per
share thereof be different from those of the Series A Preferred Shares,
if the holders of such class of stock or series and the Series A
Preferred Shares shall be entitled to the receipt of dividends and of
amounts distributable upon liquidation, dissolution or winding up in
proportion to their respective amounts of accrued and unpaid dividends
per share or liquidation preferences, without preference or priority
one over the other ("Parity Shares"); and
(c) junior to the Series A Preferred Shares, as to the payment
of dividends or as to the distribution of assets upon liquidation,
dissolution or winding up, if such stock or series
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<PAGE> 16
shall be Common Shares or if the holders of Series A Preferred Shares
shall be entitled to receipt of dividends or of amounts distributable
upon liquidation, dissolution or winding up, as the case may be, in
preference or priority to the holders of shares of such stock or
series, and such stock or series shall not in either case rank prior to
the Series A Preferred Shares.
Section 10. Voting. Except as otherwise set forth herein, the Series A
Preferred Shares shall not have any relative, participating, optional or other
special voting rights and powers, and the consent of the holders thereof shall
not be required for the taking of any corporate action.
If and whenever six quarterly dividends (whether or not consecutive)
payable on the Series A Preferred Shares or any series or class of Parity Shares
shall be in arrears (which shall, with respect to any such quarterly dividend,
mean that any such dividend has not been paid in full), whether or not earned or
declared, the number of directors then constituting the Board of Directors shall
be increased by two and the holders of Series A Preferred Shares, together with
the holders of shares of every other series or class of Parity Shares having
like voting rights (shares of any such other series, the "Voting Preferred
Shares"), voting as a single class regardless of series, shall be entitled to
elect two additional directors to serve on the Board of Directors at any annual
meeting of stockholders or special meeting held in place thereof, or at a
special meeting of the holders of Series A Preferred Shares and the Voting
Preferred Shares called as hereinafter provided. Whenever all dividends in
arrears on the Series A Preferred Shares and the Voting Preferred Shares then
outstanding shall have been paid and full dividends thereon for the current
quarterly dividend period shall have been paid or declared and set apart for
payment, then the right of the holders of the Series A Preferred Shares and the
Voting Preferred Shares to elect such additional two directors shall cease (but
subject always to the same provision for the vesting of such voting rights in
the case of any similar future arrearages in six quarterly dividends), and the
terms of office of all persons elected as directors by the holders of the Series
A Preferred Shares and the voting Preferred Shares shall forthwith terminate and
the number of directors constituting the Board of Directors shall be reduced
accordingly. At any time after such voting power shall have been so vested in
the holders of shares of Series A Preferred Shares and the Voting Preferred
Shares, the Secretary of the Corporation may, and upon the written request of
any holder of Series A Preferred Shares (addressed to the Secretary at the
principal office of the Corporation) shall, call a special meeting of the
holders of the Series A Preferred Shares and of the Voting Preferred Shares for
the election of the two directors to be elected by them as herein provided, such
call to be made by notice similar to that provided in the Bylaws of the
Corporation for a special meeting of the stockholders or as required by law. If
any such special meeting required to be called as above provided shall not be
called by the Secretary within 20 days after receipt of such request, then any
holder of Series A Preferred Shares may call such meeting, upon the notice above
provided, and for that purpose shall have access to the stock books of the
Corporation. The directors elected at any such special meeting shall hold office
until the next annual meeting of the stockholders or special meeting held in
lieu thereof if such office shall not have previously terminated as above
provided. If any vacancy shall occur among the directors elected by the holders
of the Series A Preferred Shares and the Voting Preferred Shares, a successor
shall be elected by the Board of Directors, upon the nomination of the
then-remaining director elected by the holders of the Series A Preferred Shares
and the Voting Preferred Shares or the successor of such remaining director, to
serve until the next
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<PAGE> 17
annual meeting of the stockholders or special meeting held in place thereof if
such office shall not have previously terminated as provided above.
So long as any Series A Preferred Shares are outstanding, in addition
to any other vote or consent of stockholders required by the Charter, the
affirmative vote of at least 66-2/3% of the votes entitled to be cast by the
holders of Series A Preferred Shares and the Voting Preferred Shares, at the
time outstanding, voting as a single class regardless of series, given in person
or by proxy, either in writing without a meeting or by vote at any meeting
called for the purpose, shall be necessary for effecting or validating:
(a) Any amendment, alteration or repeal of any of the
provisions of the Charter or these Articles Supplementary that
materially adversely affects the voting powers, rights or preferences
of the holders of the Series A Preferred Shares or the Voting Preferred
Shares; provided, however, that (i) the amendment of the provisions of
the Charter so as to authorize or create or to increase the authorized
amount of, any Junior Shares or any shares of any class or series
ranking on a parity with the Series A Preferred Shares or the Voting
Preferred Shares shall not be deemed to materially adversely affect the
voting powers, rights or preferences of the holders of Series A
Preferred Shares and (ii) any filing with the State Department of
Assessments and Taxation of Maryland by the Corporation in connection
with a merger, consolidation or sale of all or substantially all of the
assets of the Corporation shall not be deemed to be an amendment,
alteration or repeal of any of the provisions of the Charter or these
Articles Supplementary; and provided further, that if any such
amendment, alteration or repeal would materially adversely affect any
voting powers, rights or preferences of the Series A Preferred Shares
or one or more but not all series of Voting Preferred Shares at the
time outstanding, the affirmative vote of at least 66-2/3% of the votes
entitled to be cast by the holders of all series similarly affected,
similarly given, shall be required in lieu of the affirmative vote of
at least 66-2/3% of the votes entitled to be cast by the holders of the
Series A Preferred Shares and the Voting Preferred Shares otherwise
entitled to vote in accordance herewith; or
(b) The authorization or creation of, or the increase in the
authorized amount of, any shares of any class or series or any security
convertible into shares of any class or series ranking prior to the
Series A Preferred Shares in the distribution of assets on any
liquidation, dissolution or winding up of the Corporation or in the
payment of dividends; provided, however, that, in the case of each of
subparagraphs (a) and (b), no such vote of the holders of Series A
Preferred Shares or Voting Preferred Shares, as the case may be, shall
be required if, at or prior to the time when such amendment, alteration
or repeal is to take effect, or when the issuance of any such prior
shares or convertible security is to be made, as the case may be,
provision is made for the redemption of all Series A Preferred Shares
or Voting Preferred Shares, as the case may be, at the time outstanding
in accordance with Section 5 hereof.
For purposes of the foregoing provisions of this Section 10, each
Series A Preferred Share shall have one (1) vote per share, except that when any
other series of Preferred Stock shall have the right to vote with the Series A
Preferred Shares as a single class on any matter, then the Series A Preferred
Shares and such other series shall have with respect to such matters one (1)
vote per $25.00 of stated liquidation preference.
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<PAGE> 18
Section 11. Record Holders. The Corporation and the Transfer Agent may
deem and treat the record holder of any Series A Preferred Shares as the true
and lawful owner thereof for all purposes, and neither the Corporation nor the
Transfer Agent shall be affected by any notice to the contrary.
Section 12. Restrictions on Ownership and Transfer. The Series A
Preferred Shares constitute Capital Stock of the Corporation, and as such are
governed by and issued subject to all the limitations, terms and conditions of
the Charter applicable to Capital Stock generally, including but not limited to
the terms and conditions (including exceptions and exemptions) of Article NINTH
of the Charter applicable to Capital Stock. The foregoing sentence shall not be
construed to limit the applicability to the Series A Preferred Shares of any
other term or provision of the Charter.
SECOND: Except as may otherwise be required by law, the Series A
Preferred Shares shall not have any voting powers, preferences and relative,
participating, optional or other special rights, other than those specifically
set forth in these Articles Supplementary (as such Articles Supplementary may be
amended from time to time) and in the Charter. The Series A Preferred Shares
shall have no preemptive or subscription rights.
THIRD: The headings of the various subdivisions hereof are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
FOURTH: If any voting powers, preferences and relative, participating,
optional and other special rights of the Series A Preferred Shares and
qualifications, limitations and restrictions thereof set forth in these Articles
Supplementary (as such Articles Supplementary may be amended from time to time)
is invalid, unlawful or incapable of being enforced by reason of any rule of law
or public policy, all other voting powers, preferences and relative,
participating, optional and other special rights of Series A Preferred Shares
and qualifications, limitations and restrictions thereof set forth in these
Articles Supplementary (as so amended) which can be given effect shall remain in
full force and effect.
FIFTH: The Shares were initially classified and designated in the
Charter as Common Stock.
SIXTH: These Articles Supplementary have been approved by the Board of
Directors in the manner and by the vote required by law.
SEVENTH: Each of the undersigned acknowledges these Articles
Supplementary to be the act of the Corporation and, as to all matters or facts
required to be verified under oath, the undersigned acknowledges that to the
best of his knowledge, information and belief, these matters and facts are true
in all material respects and that this statement is made under the penalties for
perjury.
IN WITNESS WHEREOF, GLENBOROUGH REALTY TRUST INCORPORATED has caused
these presents to be signed in its name and on its behalf by its Executive Vice
President and Chief Financial Officer, and witnessed by its Secretary on
January , 1998.
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WITNESS GLENBOROUGH REALTY
TRUST INCORPORATED
_____________________________ By:________________________________
Frank E. Austin Stephen R. Saul
Secretary Executive Vice President and
Chief Financial Officer
THE UNDERSIGNED, Executive Vice President and Chief Financial Officer
of GLENBOROUGH REALTY TRUST INCORPORATED, who executed on behalf of the
Corporation, the Articles Supplementary of which this certificate is made a
part, hereby acknowledges in the name and on behalf of said Corporation the
foregoing Articles Supplementary to be the corporate act of said Corporation and
hereby certifies that the matters and facts set forth herein with respect to the
authorization and approval thereof are true in all material respects under the
penalties of perjury.
By:________________________________
Stephen R. Saul
Executive Vice President and
Chief Financial Officer
19
<PAGE> 1
___% SERIES A __% SERIES A
CONVERTIBLE CONVERTIBLE
PREFERRED STOCK PREFERRED STOCK
GLENBOROUGH THIS CERTIFICATE IS TRANSFERABLE
IN NEW YORK, NY OR CRAWFORD, NJ
SEE REVERSE FOR CERTAIN
DEFINITIONS AND RESTRICTIONS
GLENBOROUGH REALTY TRUST INCORPORATED
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
CUSIP 37803P 2D 4
THIS CERTIFIES THAT
IS THE RECORD HOLDER OF
FULLY PAID AND NON-ASSESSABLE SHARES OF THE __% SERIES A CONVERTIBLE
PREFERRED STOCK (LIQUIDATION PREFERENCE $25.00 PER SHARE), PAR VALUE $.001 PER
SHARE OF
Glenborough Realty Trust Incorporated, transferable on the books of the
Corporation by the holder hereof in person or by duly authorized attorney upon
surrender of this Certificate properly endorsed. This Certificate is not valid
until countersigned and registered by the Transfer Agent and Registrar.
The shares evidenced by this Certificate are subject to, among other
things, restrictions on transferability and ownership, and may automatically be
transferred to a Trust and designated Shares-in-Trust and may become redeemable.
See reverse side of this Certificate for information on how to obtain a copy of
the rights, preferences, privileges and restrictions of each class or series of
shares.
Witness the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated:
COUNTERSIGNED AND REGISTERED:
REGISTRAR AND TRANSFER COMPANY
TRANSFER AGENT AND REGISTRAR
BY
SECRETARY PRESIDENT AUTHORIZED SIGNATURE
<PAGE> 2
GLENBOROUGH REALTY TRUST INCORPORATED
The shares represented by this certificate are subject to restrictions on
transfer and ownership for the purpose of maintenance of the Corporation's
status as a real estate investment trust under the Internal Revenue Code of
1986, as amended (the "Code"). Subject to certain further restrictions and
except as expressly provided in the Corporation's Charter, no Person may (1)
Beneficially Own or Constructively Own shares of Capital Stock in excess of
5.50% (or such greater percentage as may be determined by the Board of Directors
of the Corporation) of the value of the outstanding shares of Capital Stock of
the Corporation unless such Person is a Qualified Trust (in which case such
percentage is 9.9%) or an Existing Holder (in which case the Existing Holder
Limit shall be applicable), (2) Beneficially Own shares of Capital Stock that
would result in Beneficial Ownership of Capital Stock by fewer than 100 Persons,
or (3) Beneficially Own Capital Stock that would result in the Corporation being
"closely held" under Section 856(h) of the Code. Any Person who Beneficially or
Constructively owns or attempts to Beneficially Own or Constructively Own shares
of Capital Stock in violation of the above limitations must immediately notify
the Corporation. All capitalized terms in this legend have the meanings defined
in the Corporation's Charter, as the same may be further amended from time to
time, a copy of which, including the restrictions on transfer, will be sent
without charge to each stockholder who so requests. If the restrictions on
transfer are violated, the shares of Capital Stock represented hereby will be
transferred automatically and by operation of law to a Trust and shall be
designated as Shares-in-Trust. The foregoing summary of the restrictions on
transfer of shares of stock represented by this certificate is qualified in its
entirety by reference to the Corporation's Charter. Stockholders may obtain from
the Corporation, upon written request and without charge, a statement of the
current limit on Beneficial Ownership and Constructive Ownership for all
Persons.
The Corporation is authorized to reclassify all or a portion of any
unissued shares and thereby issue more than one class of capital stock,
including preferred stock. The Board of Directors is authorized to determine and
alter the rights, preferences, privileges, and restrictions granted to or
imposed upon any wholly unissued series of preferred stock and to fix the number
of shares and the designation of any series of preferred stock.
Stockholders may obtain from the Corporation, upon written request and
without charge, a statement of the designations and any preferences, conversion
and other rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms and conditions of redemption of the stock of each
class that the Corporation is authorized to issue, and of the differences in the
rights and preferences between the shares of each series of preferred stock to
the extent that such rights and preferences have been set.
NOTICE OF ELECTION TO CONVERT
The undersigned hereby irrevocably exercise(s) the right to convert
_________ shares of the ___% Series A Convertible Preferred Stock represented by
this certificate into Common Stock of Glenborough Realty Trust Incorporated in
accordance with the provisions of the terms of the ___% Series A Convertible
Preferred Stock relating thereto.
Date: ________________________________ Signature: ______________________________
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
<TABLE>
<S> <C>
TEN COM - as tenants in common UNIF GIFT MIN ACT - _______________ Custodian _______________
(Cust) (Minor)
TEN ENT - as tenants by the entireties under Uniform Gifts to Minors
Act _________________________
JT TEN - as joint tenants with right of (State)
survivorship and not as tenants
in common UNIF TRF MIN ACT - _______________ Custodian (until age ____)
(Cust)
__________________ under Uniform Transfers
(Minor)
to Minors Act _________________
(State)
</TABLE>
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, _______________________ hereby sell, assign and transfer
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
________________________________________________________________________________
________________________________________________________________________________
_________________________________________________________________________ Shares
of the ___% Series A Convertible Preferred Stock represented by the within
Certificate, and do hereby irrevocably constitute and appoint
_______________________________________________________________________ Attorney
to transfer the said shares of said ___% Series A Convertible Preferred
Stock on the books of the said Corporation, pursuant to the provisions of
the Bylaws the powers of substitution in the premises.
Dated ________________________________ X _______________________________________
X _______________________________________
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST
CORRESPOND WITH THE NAME(S) AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN
EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.
Signature(s) Guaranteed:
__________________________________________________________________________
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
