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
Price Enterprises, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Maryland 33-0628740
(State of Incorporation) (I.R.S. Employer
Identification No.)
4649 Morena Boulevard 92117
San Diego, California (Zip Code)
(Address of Principal
Executive Offices)
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: ___________ (if applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
8 3/4% Series A Cumulative Redeemable Preferred Stock,
Par Value $0.0001 Per Share
(Title of class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. Description of Registrant's Securities to be Registered.
General
Price Enterprises, Inc. a Maryland corporation (the "Company"), will issue
not more than 26,000,000 shares of 8 3/4% Series A Cumulative Redeemable
Preferred Stock, par value $0.0001 per share, of the Company (the "Series A
Preferred Stock").
Pursuant to the Company's Articles of Incorporation (the "Charter"), the
Company is authorized to issue up to 100,000,000 shares of capital stock, in one
or more series, with such preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications or terms or
conditions of redemption as the Board of Directors may determine without any
further vote or action by the Company's stockholders.
On June 15, 1998, the Board of Directors adopted the relevant resolutions
with respect to the designation of the Series A Preferred Stock. The following
summary of the terms and provisions of the Series A Preferred Stock does not
purport to be complete and is qualified in its entirety by reference to the
pertinent sections of the Company's Charter, including the Articles
Supplementary setting forth the particular terms of the Series A Preferred Stock
(the "Articles Supplementary"), which are available from the Company.
The Company has applied to list the Series A Preferred Stock on The Nasdaq
Stock Market's Nasdaq National Market (the "Nasdaq National Market"). If so
approved, trading of the Series A Preferred Stock on the Nasdaq National Market
is expected to commence concurrently with initial delivery of the shares of
Series A Preferred Stock.
Rank
The Series A Preferred Stock will, with respect to the payment of
distributions and amounts upon liquidation, dissolution or winding up of the
Company, rank (i) senior to all classes or series of shares of the Company's
common stock, par value $0.0001 per share ("Common Stock"), and to all equity
securities which by their terms rank junior to the Series A Preferred Stock,
(ii) on a parity with all equity securities that may in the future be issued by
the Company which by their terms rank on a parity with the Series A Preferred
Stock, and (iii) junior to all equity securities issued by the Company which by
their terms rank senior to the Series A Preferred Stock.
Distributions
Holders of the Series A Preferred Stock will be entitled to receive, when,
as and if authorized and declared by the Board of Directors, out of funds
legally available for the payment of distributions, cumulative cash
distributions payable quarterly at the rate of 8 3/4% of the liquidation
preference per annum (equivalent to $1.40 per annum per share). Distributions on
the Series A Preferred Stock will be cumulative from August 1, 1998 and will be
payable quarterly in arrears on the 15th day of February, May, August and
November (or, if not a business day, the next succeeding business day) of each
year (each, a
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"Distribution Payment Date") in respect of distribution periods ending on the
last day of the preceding January, April, July and October, respectively. The
first distribution on the Series A Preferred Stock, which will be paid on
November 15, 1998, will be for a full quarter notwithstanding the fact that the
initial issuance of the Series A Preferred Stock will occur after the first day
of the distribution period ending October 31, 1998. Any distributions payable on
the Series A Preferred Stock for any partial period will be computed on the
basis of a 360-day year consisting of twelve 30-day months. Distributions will
be payable to holders of record as they appear in the share records of the
Company at the close of business on the applicable record date, which shall be
the first day of the calendar month in which the applicable Distribution Payment
Date falls or such other date designated by the Board of Directors for the
payment of distributions that is not more than 30 nor less than 10 days prior to
such Distribution Payment Date (each, a "Distribution Record Date").
When distributions are not paid in full upon the Series A Preferred Stock
and any other securities issued by the Company the terms of which specifically
provide that such equity securities rank on a parity with the Series A Preferred
Stock with respect to the distribution rights or rights upon liquidation,
dissolution or winding up of the Company (collectively, the "Parity Preferred
Stock"), all distributions declared upon the Series A Preferred Stock and any
other Parity Preferred Stock shall be declared pro rata so that the amount of
distributions declared per share on such Series A Preferred Stock and such other
Parity Preferred Stock shall in all cases bear to each other the same ratio that
the accrued distributions per share on the Series A Preferred Stock and such
other Parity Preferred Stock bear to each other. Except as set forth in the
preceding sentence, unless full distributions on the Series A Preferred Stock
have been or contemporaneously are authorized and paid or authorized and a sum
sufficient for the payment thereof set apart for payment for all past
distribution periods and the then current distribution period, no distributions
(other than in Common Stock or other shares of equity securities of the Company
ranking junior to the Series A Preferred Stock as to distributions and upon
liquidation) shall be authorized or paid or set aside for payment on the Common
Stock or on any other shares of equity securities of the Company ranking junior
to or on a parity with the Series A Preferred Stock as to distributions or upon
liquidation. Unless full distributions on the Series A Preferred Stock have been
or contemporaneously are authorized and paid or authorized and a sum sufficient
for the payment thereof set apart for payment of all past distribution periods
and the then current distribution period, no Common Stock or any other shares of
equity securities of the Company ranking junior to or on a parity with the
Series A Preferred Stock as to distributions or upon liquidation (including less
than all of the Series A Preferred Stock) shall be redeemed, purchased or
otherwise acquired for any consideration (or any moneys be paid or made
available for a sinking fund for the redemption of any such shares) by the
Company except by conversion into or exchange for shares of equity securities of
the Company ranking junior to the Series A Preferred Stock as to distributions
and upon liquidation, and except for a redemption or purchase or other
acquisition of Common Stock or other equity securities of the Company for
purposes of an employee benefit plan of the Company or any subsidiary or as
provided under the Charter to protect the Company's status as a real estate
investment trust ("REIT"). See "-- Redemption" for similar restrictions on the
redemption, purchase or other acquisition of the Series A Preferred Stock.
No distributions on the Series A Preferred Stock shall be authorized by the
Board of Directors or paid or set apart for payment by the Company at such time
as the terms and provisions of any agreement of the Company, including any
agreement relating to its indebtedness, prohibits such authorization, payment or
setting apart for payment or provides that such authorization, payment or
setting apart for payment
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would constitute a breach thereof or a default thereunder, or if such
authorization, payment or setting apart shall be restricted or prohibited by
law.
Notwithstanding the foregoing, distributions on the Series A Preferred
Stock shall accrue whether or not the Company has earnings, whether or not there
are funds legally available for the payment of such distributions, whether or
not any agreement of the Company prohibits the payment of such distributions and
whether or not such distributions are authorized. Accrued but unpaid
distributions on the Series A Preferred Stock shall not bear interest, and
holders of the Series A Preferred Stock shall not be entitled to any
distributions, whether payable in cash, property or shares of capital stock, in
excess of full cumulative distributions as described above.
Any distribution payment made on shares of Series A Preferred Stock shall
be first credited against the earliest accrued but unpaid distribution due which
remains payable.
If, for any taxable year, the Company elects to designate as "capital gain
dividends" (as defined in Section 857 of the Internal Revenue Code of 1986, as
amended (the "Code")) any portion (the "Capital Gains Amount") of the dividends
(within the meaning of the Code) paid or made available for the year to holders
of all classes of shares (the "Total Dividends"), then the portion of the
Capital Gains Amount that shall be allocable to the holders of Series A
Preferred Stock shall be the Capital Gains Amount multiplied by a fraction, the
numerator of which shall be the total dividends (within the meaning of the Code)
paid or made available to the holders of the Series A Preferred Stock for the
year, and the denominator of which shall be the Total Dividends.
Liquidation Preference
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Company, the holders of the Series A Preferred
Stock will be entitled to be paid out of the assets of the Company legally
available for distribution to its stockholders liquidating distributions in the
amount of a liquidation preference of $16.00 per share, plus an amount equal to
any accrued and unpaid distributions to the date of such liquidation,
dissolution or winding up, before any distribution of assets is made to holders
of Common Stock or any other shares of capital stock that rank junior to the
Series A Preferred Stock as to liquidation rights. After payment of the full
amount of the liquidating distributions to which they are entitled, the holders
of the Series A Preferred Stock will have no right or claim to any of the
remaining assets of the Company.
In the event that, upon any such liquidation, dissolution or winding up of
the affairs of the Company, the legally available assets of the Company are
insufficient to pay the amount of the liquidating distributions on all
outstanding Series A Preferred Stock and the corresponding amounts payable on
all shares of Parity Preferred Stock, then the holders of the Series A Preferred
Stock and such other Parity Preferred Stock shall share ratably in any such
distribution of assets in proportion to the full liquidating distributions to
which they would otherwise be respectively entitled. If liquidating
distributions shall have been made in full to all holders of Series A Preferred
Stock, the remaining assets of the Company shall be distributed among the
holders of any other classes or series of equity securities ranking junior to
the Series A Preferred Stock with respect to distribution rights or rights upon
liquidation, dissolution or winding up of
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the Company, according to their respective rights and preferences and in each
case according to their respective number of shares.
The consolidation or merger of the Company with or into any other entity,
the sale, lease, transfer or conveyance of all or substantially all of the
property or business of the Company or a statutory share exchange shall not be
deemed to constitute a liquidation, dissolution or winding up of the Company. In
determining whether a distribution (other than a voluntary or involuntary
liquidation) by dividend, redemption or other acquisition of shares of stock of
the Company or otherwise is permitted under the Maryland General Corporation
Law, no effect shall be given to amounts that would be needed, if the Company
were to be dissolved at the time of the distribution, to satisfy the
preferential rights upon dissolution of holders of shares of stock of the
Company whose preferential rights upon dissolution are superior to those
receiving the distribution.
Redemption
Except in certain circumstances relating to the Company's maintenance of
its ability to qualify as a REIT under the Code as provided in the Company's
Charter and as described generally under the heading "-- Restrictions on
Ownership and Transfer" and except in the event of a Change of Control (as
defined below), the Series A Preferred Stock will not be redeemable prior to
August 17, 2003. On and after August 17, 2003 or at any time upon a Change of
Control, the Company may, at its option upon not less than 30 nor more than 60
days' written notice, redeem the Series A Preferred Stock, in whole or in part,
at any time or from time to time, for cash at a redemption price of $16.00 per
share, plus all accrued and unpaid distributions thereon to the date fixed for
redemption (except as provided below), without interest, to the extent the
Company has funds legally available therefor; provided that any redemption upon
a Change of Control must be for all of the outstanding shares of Series A
Preferred Stock and no redemption upon a Change of Control may occur more than
90 days after the Change of Control. The Articles Supplementary define a "Change
of Control" as (i) a merger or consolidation of the Company with or into another
entity or the merger of another entity with or into the Company; (ii) a tender
offer or other transaction or series of related transactions resulting in a
change of ownership of more than 50% of the voting capital stock of the Company;
(iii) a share exchange (with or without a stockholder vote) in which 95% or more
of the outstanding capital stock of the Company is exchanged for capital stock
of another corporation; or (iii) the sale, transfer or other disposition of all
or substantially all of the Company's assets, unless, in any such case, the
holders of the capital stock of the Company prior to the transaction hold at
least a majority of the aggregate voting power of voting capital stock of the
surviving corporation after the transaction.
If notice of redemption of any Series A Preferred Stock has been given and
if the funds necessary for such redemption have been irrevocably set aside for
payment, then from and after the redemption date distributions will cease to
accrue on such Series A Preferred Stock, such Series A Preferred Stock shall no
longer be deemed outstanding and all rights of the holders of the Series A
Preferred Stock will terminate, except the right to receive the redemption price
plus any accrued and unpaid distributions payable upon such redemption. If fewer
than all of the outstanding Series A Preferred Stock shares are to be redeemed,
the shares to be redeemed shall be selected pro rata (as nearly as may be
practicable without creating fractional shares) or by any other equitable method
determined by the Company.
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If the Company shall redeem shares of Series A Preferred Stock, notice of
such redemption shall be given to each holder of record of the shares to be
redeemed. Such redemption notice shall state (i) date the shares are to be
redeemed (the "Call Date"), (ii) the redemption price, (iii) the number of
shares of Series A Preferred Stock to be redeemed, (iv) the place or places at
which the certificates evidencing the shares of Series A Preferred Stock are to
be surrendered for payment, and (v) that distributions on the shares to be
redeemed will cease to accumulate on such redemption date. If fewer than all of
the shares of Series A Preferred Stock held by any holder are to be redeemed,
the notice mailed to such holder shall also specify the number of shares of
Series A Preferred Stock to be redeemed from such holder. Such notice shall be
provided by first class mail, postage prepaid, at such holder's address as the
same appears on the stock records of the Company, or by publication in The Wall
Street Journal or The New York Times, or if neither such newspaper is then being
published, any other daily newspaper of general circulation in The City of New
York, such publication to be made once a week for two successive weeks
commencing not less than 30 nor more than 60 days prior to the Call Date. If the
Company elects to provide such notice by publication, it shall also promptly
mail notice of such redemption to the holders of the shares of Series A
Preferred Stock to be redeemed. No failure to give such notice or any defect
thereto or in the mailing thereof shall affect the validity of the proceedings
for the redemption of any shares of Series A Preferred Stock, except as to the
holder to whom notice was defective or not given.
The holders of shares of Series A Preferred Stock at the close of business
on a Distribution Record Date will be entitled to receive the distribution
payable with respect to the shares of Series A Preferred Stock on the
corresponding Distribution Payment Date notwithstanding the redemption thereof
between such Distribution Record Date and the corresponding Distribution Payment
Date or the Company's default in the payment of the distribution due. Except as
provided above, the Company will make no payment or allowance for unpaid
distributions, whether or not in arrears, on Series A Preferred Stock to be
redeemed.
The Series A Preferred Stock has no stated maturity and will not be subject
to any sinking fund or mandatory redemption provisions, except as provided under
"-- Restrictions on Ownership and Transfer" below.
Voting Rights
Holders of the Series A Preferred Stock generally will have one-tenth
(1/10) of one vote per share, voting together with the Company's Common Stock,
except as specifically set forth in the Articles Supplementary and as described
generally below. In any matter in which the Series A Preferred Stock is entitled
to vote, including any action by written consent, each share of Series A
Preferred Stock shall be entitled to 1/10 of one vote, except that when any
other class or series of preferred stock shall have the right to vote together
with the Series A Preferred Stock as if they were a single class on any matter,
then the Series A Preferred Stock and such other class or series shall have with
respect to such matters one vote per $16.00 of stated liquidation preference and
fractional votes shall be ignored. With respect to each share of Series A
Preferred Stock, the holder thereof may designate a proxy, with each such proxy
having the right to direct the number of votes represented by such share.
Whenever distributions on any shares of Series A Preferred Stock shall be
in arrears for six or more quarterly periods, whether or not consecutive, the
holders of such Series A Preferred Stock (voting separately as if they were a
class with all other series of preferred stock upon which like voting rights
have
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been conferred and are exercisable) will be entitled to vote for the election of
two additional directors of the Company at a special meeting of the shares of
Series A Preferred Stock or of any other series of preferred stock so in arrears
or at the next annual meeting of stockholders, and at each subsequent annual
meeting until all distributions accumulated on such shares of Series A Preferred
Stock for the past distribution periods and the then current distribution period
shall have been fully paid or declared and a sum sufficient for the payment
thereof irrevocably set aside for payment in full; whereupon either such
directors shall resign or their term of office shall expire, and the number of
directors constituting the Board of Directors shall be decreased accordingly.
So long as any shares of Series A Preferred Stock remain outstanding, the
Company will not, without the affirmative vote or consent of the holders of at
least 66 2/3% of the shares of Series A Preferred Stock outstanding at the time,
given in person or by proxy, either in writing or at a meeting (such series
voting separately as a class), (A) authorize or create, or increase the
authorized or issued amount of, any class or series of shares of capital stock
ranking prior or senior to the Series A Preferred Stock with respect to the
payment of distributions or the distribution of assets upon liquidation,
dissolution or winding-up or reclassify any authorized shares of capital stock
of the Company into such shares, or create, authorize or issue any obligation or
security convertible into or evidencing the right to purchase any such shares;
or (B) amend, alter or repeal the provisions of the Company's Charter or the
Articles Supplementary whether by merger, consolidation or otherwise (an
"Event"), so as to materially and adversely affect any right, preference,
privilege or voting power of the Series A Preferred Stock or the holders
thereof; provided, however, with respect to the occurrence of any of the Events
set forth in (B) above, so long as the shares of Series A Preferred Stock (or
shares of any equivalent class or series of stock issued by the surviving
corporation in any merger, consolidation or share exchange to which the Company
became a party) remain outstanding with the terms thereof materially unchanged,
the occurrence of any such Event shall not be deemed to materially and adversely
affect such rights, preferences, privileges or voting power of holders of Series
A Preferred Stock and provided further that (x) any increase in the amount of
the authorized preferred stock or the creation or issuance of any other shares
of Series A Preferred Stock, or (y) any increase in the amount of authorized
Series A Preferred Stock or any other preferred stock, in each case ranking on a
parity with or junior to the Series A Preferred Stock with respect to payment of
distributions or the distribution of assets upon liquidation, dissolution or
winding-up, shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers. The foregoing voting provisions will
not apply if, at or prior to the time when the act with respect to which such
vote would otherwise be required shall be effected, all outstanding shares of
Series A Preferred Stock shall have been redeemed or called for redemption upon
proper notice and sufficient funds shall have been irrevocably deposited in
trust to effect such redemption.
Conversion
The Series A Preferred Stock is not convertible into or exchangeable for
any other property or securities of the Company.
Restrictions on Ownership and Transfer
As discussed below, except as provided in the Company's Charter, beneficial
ownership of more than 5% of the Series A Preferred Stock or more than 5% of the
Company's capital stock (including the
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Series A Preferred Stock), by value or number of shares, will be restricted in
order to preserve the Company's status as a REIT. In addition, shares of Series
A Preferred Stock will be subject to the other ownership and transfer
restrictions of Article TENTH of the Company's Charter.
For the Company to qualify as a REIT under the Code, not more than 50% in
value of its outstanding capital stock may be owned, actually or constructively,
by five or fewer individuals (as defined in the Code to include certain
entities) during the last half of a taxable year, and its stock must be
beneficially owned by 100 or more persons during at least 335 days of a taxable
year of 12 months or during a proportionate part of a shorter taxable year. In
addition, if the Company, or an actual or constructive owner of 10% or more of
the Company, actually or constructively owns 10% or more of a tenant of the
Company (or a tenant of any partnership in which the Company is a partner), the
rent received by the Company (either directly or through any such partnership)
from such tenant will not be qualifying income for purposes of the REIT gross
income tests of the Code.
The Company's Charter provides, subject to certain exceptions specified
therein, that no holder may own, or be deemed to own by virtue of the
constructive ownership provisions of the Code, more than 9.8% by value or by
number of shares, whichever is more restrictive, and no person shall
beneficially own in excess of 5% by value or by number of shares, whichever is
more restrictive (together, the "Ownership Limit"), of the outstanding capital
stock of the Company. The Charter further provides that no person may own shares
to an extent that causes the Company to become "closely held" within the meaning
of the Code or to otherwise fail to qualify as a REIT (including ownership that
would result in the Company owning an interest in a tenant described in Section
856(d)(2)(B) of the Code if income derived by the Company from such tenant would
cause the Company to fail to satisfy any of the gross income requirements of
Section 856(c) of the Code). Any purported issuance or transfer of capital stock
in violation of the Ownership Limit or that would cause the Company to become
closely held, or otherwise to fail to qualify as a REIT, shall be void ab
initio. If shares of capital stock in excess of the Ownership Limit, or shares
of capital stock that would cause the Company to be closely held, to be
beneficially owned by fewer than 100 persons or to otherwise lose its REIT
status, are issued or transferred to any person, the Charter provides that,
subject to certain exceptions, the intended transferee will acquire no rights in
the stock. Shares of capital stock, transferred in excess of the Ownership
Limit, or shares of capital stock transferred in a manner that results in the
Company being closely held, in beneficial ownership of the Company being vested
in fewer than 100 persons or in the Company's losing its REIT status
(collectively, an "Excess Transfer"), will automatically be transferred to an
independent trustee for the benefit of one or more charitable organizations to
be selected by the Company. While held by such trustee, the Charter provides
that such shares will continue to have voting and dividend rights and will
remain outstanding. Within 20 days of receiving notice from the Company that
capital stock has been transferred, the trustee will sell such shares to any
person whose ownership will not violate the Ownership Limit or the other
limitations applicable to the intended transfer. If such a transfer is made by
the trustee, the sale proceeds shall be paid to the intended transferee to the
extent of the lesser of (a) the price paid by the intended transferee for the
shares in the Excess Transfer (or, if the Excess Transfer was a gift or similar
transaction, the market value of such shares at the time of the Excess Transfer)
and (b) the price realized by the trustee on the sale or other disposition of
such shares; any remaining proceeds, together with any dividends received by the
trustee, will be paid to the charitable beneficiaries. The Charter also provides
that shares of capital stock held by the trustee will be deemed to have been
offered for sale to the Company and the Company shall have the right to accept
such offer until the trustee has sold the shares of stock held in the trust.
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The constructive ownership rules are complex and may cause capital stock
owned actually or constructively by a group of related individuals and/or
entities to be deemed constructively owned by one individual or entity and,
similarly, may cause capital stock owned actually or beneficially by a group of
related individuals and/or entities to be deemed beneficially owned by one
individual or entity. As a result, the acquisition of less than 9.8% by value of
the capital stock of the Company (or the acquisition of an interest in an entity
which owns such capital stock) by an individual or entity could cause that
individual or entity (or another individual or entity) to own constructively in
excess of 9.8% by value of the capital stock, and thus subject such capital
stock to the ownership and transfer restrictions described above. Similarly, the
acquisition of less than 5% by value of the capital stock of the Company (or the
acquisition of an interest in an entity which owns such capital stock) by an
individual or entity could cause that individual or entity (or another
individual or entity) to own beneficially in excess of 5% by value of the
capital stock, and thus subject such capital stock to the ownership and transfer
restrictions described above.
The Board of Directors may waive the Ownership Limit with respect to a
particular stockholder if evidence satisfactory to the Board of Directors is
presented that such ownership will not then or in the future jeopardize the
Company's status as a REIT. As a condition of such waiver, the Board of
Directors may require opinions of counsel satisfactory to it and/or undertakings
or representations from the applicant with respect to preserving the REIT status
of the Company. The Company's Board of Directors has obtained such undertakings
and representations from Helen Price and the Price Family Charitable Fund and,
as a result, has waived the Ownership Limits with respect to the Price family
and certain affiliated entities. The foregoing restrictions on transferability
and ownership will not apply if the Board of Directors determines that it is no
longer in the best interests of the Company to attempt to qualify, or to
continue to qualify, as a REIT.
The Ownership Limit will not be automatically removed even if the REIT
provisions of the Code are changed so as to no longer contain ownership
concentration limitations or if the Board of Directors and the stockholders of
the Company determine that it is no longer in the best interest of the Company
to attempt to qualify, or to continue to qualify, as a REIT. Except as otherwise
described above, any change of the Ownership Limit would require an amendment to
the Charter of the Company. Such amendments require the affirmative vote of
holders owning a majority of the outstanding shares of Common Stock. In addition
to preserving the Company's status as a REIT, the Ownership Limit may have the
effect of precluding an acquisition of control of the REIT without the approval
of the Board of Directors.
All certificates representing shares of Common Stock and Series A Preferred
Stock will bear a legend referring to the restrictions described above.
All persons who own, actually, beneficially or constructively, more than a
specified percentage of the outstanding shares of capital stock must file an
affidavit with the Company containing the information specified in the Charter
within 30 days of January 1 of each year. In addition, each such stockholder
shall upon demand be required to disclose to the Company in writing such
information with respect to the actual, beneficial and constructive ownership of
shares as the Board of Directors deems necessary to comply with the provisions
of the Code applicable to REITs or to comply with the requirements of any taxing
authority or governmental agency.
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These ownership limitations could have the effect of discouraging a
takeover or other transaction in which holders of some, or a majority, of shares
of stock of the Company might receive a premium for their shares over the then
prevailing market price or which such holders might believe to be otherwise in
their best interest.
The Articles Supplementary provide that the terms and conditions (including
exceptions and exemptions) of Article TENTH shall be applied to the Series A
Preferred Stock separately and without regard to any other series or class.
Among other things, this provision means that beneficial ownership of more than
5% of the Series A Preferred Stock will be restricted in order to preserve the
Company's status as a REIT unless an exception or exemption applies.
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Item 2. Exhibits.
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3.1 Articles of Incorporation of Price Enterprises, Inc.*
3.2 Articles Supplementary of Price Enterprises, Inc.
3.3 Bylaws of Price Enterprises, Inc.*
4.1. Form of Series A Preferred Stock Certificate of Price Enterprises,
Inc.
*Previously filed with the Commission and incorporated herein by reference
from the Company's Annual Report on Form 10-K of Price Enterprises, Inc. filed
with the Commission on March 27, 1998 (File No. 0-20449).
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SIGNATURE
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Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Company has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized.
Dated: August 5, 1998
Price Enterprises, Inc.
By: /s/ JACK MCGRORY
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Jack McGrory
President and Chief Executive Officer
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PRICE ENTERPRISES, INC.
ARTICLES SUPPLEMENTARY CLASSIFYING
26,000,000 SHARES OF CAPITAL STOCK AS
8 3/4% SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK
Pursuant to Section 2-208 of the Maryland General Corporation Law ("MGCL"),
Price Enterprises, Inc., a corporation organized and existing under the laws of
the State of Maryland and having its principal office in the State of Maryland
located at c/o The Corporation Trust Incorporated, 300 East Lombard Street,
Baltimore, Maryland 21202 (the "Corporation"), hereby certifies to the State
Department of Assessments and Taxation of Maryland that:
FIRST: Pursuant to the authority expressly vested in the Board of Directors
of the Corporation by Article SIXTH of the Corporation's Charter (inclusive of
these Articles Supplementary) and Section 2-208 of the MGCL, the Board of
Directors has, by unanimous vote at a duly noticed meeting held on June 15,
1998, adopted resolutions classifying and designating a separate class of
authorized but unissued preferred stock of the Corporation to consist of
Twenty-Six Million (26,000,000) shares. The Board of Directors has duly adopted
resolutions designating the aforesaid class of preferred stock as "8 3/4% Series
A Cumulative Redeemable Preferred Stock, par value $.0001 per share," setting
the preferences, conversion and other rights, voting powers, restrictions,
limitations as to distributions, qualifications and terms and conditions of
redemption of such 8 3/4% Series A Cumulative Redeemable Preferred Stock.
SECOND: The reclassification increases the number of shares classified as 8
3/4% Series A Cumulative Redeemable Preferred Stock, par value $.0001 per share,
from zero (0) shares immediately prior to the reclassification to Twenty-Six
Million (26,000,000) shares immediately after the reclassification. The
reclassification decreases the number of shares classified as Common Stock, par
value $.0001 per share, from One Hundred Million (100,000,000) shares
immediately prior to the reclassification to Seventy-Four Million (74,000,000)
shares immediately after the reclassification.
THIRD: The class of preferred stock of the Corporation established in
Article FIRST of these Articles Supplementary shall have the following
designation, number of shares, preferences, conversion and other rights, voting
powers, restrictions, limitations as to distributions, qualifications, terms and
conditions of redemption and other terms and conditions:
Section 1. Number of Shares and Designation. This separate class of
preferred stock shall be designated as 8 3/4% Series A Cumulative Redeemable
Preferred Stock, par value $.0001 per share (the "Series A Preferred Stock"),
and Twenty-Six Million (26,000,000) shall be the number of shares of such
preferred stock constituting such class, subject, however, to increase or
decrease upon further action of the Board of Directors in the future as
permitted by the Charter and applicable law.
Section 2. Definitions. For purposes of the Series A Preferred Stock, the
following terms shall have the meanings indicated:
"Affiliate" of a person means a person that, directly or indirectly
through one or more intermediaries, controls or is controlled by, or is
under common control with, the person specified.
"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
Stock.
"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.
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"Call Date" shall have the meaning set forth in paragraph (b) of
Section 5 hereof.
"Change of Control" shall mean one or more of the following
transactions unless the persons who were holders of the outstanding capital
stock of the Corporation outstanding immediately prior to such transaction
are immediately after such transaction holders of at least a majority of
the aggregate voting power of the voting capital stock of the surviving
corporation (or a majority of the aggregate equivalent equity interests in
the surviving entity if such entity is not a corporation): (i) a merger or
consolidation of the Corporation with or into another entity or the merger
of another entity with or into the Corporation; (ii) a tender offer or
other transaction or series of related transactions resulting in a change
of ownership of more than 50% of the voting capital stock of the Company;
(iii) a share exchange (with or without a stockholder vote) in which 95% or
more of the outstanding capital stock of the Corporation is exchanged for
capital stock of another corporation; or (iv) the sale, transfer or other
disposition of all or substantially all of the Corporation's assets.
"Common Stock" shall mean the Common Stock, $.0001 par value per
share, of the Corporation.
"Distribution Payment Date" shall mean, with respect to each
Distribution Period, the fifteenth day of February, May, August and
November, in each year, commencing on November 15, 1998; provided, however,
that if any Distribution Payment Date falls on any day other than a
Business Day, the distribution payment due on such Distribution Payment
Date shall be paid on the Business Day immediately following such
Distribution Payment Date.
"Distribution Periods" shall mean quarterly distribution periods
commencing February 1, May 1, August 1 and November 1 of each year and
ending on and including the day preceding the first day of the next
succeeding Distribution Period.
"Junior Stock" shall mean the Common Stock and any other class or
series of capital stock of the Corporation over which the shares of Series
A Preferred Stock have preference or priority in the payment of
distributions or in the distribution of assets on any liquidation,
dissolution or winding up of the Corporation.
"Liquidation Preference" shall mean a price per share equal to Sixteen
Dollars ($16.00).
"Parity Stock" shall have the meaning set forth in paragraph (b) of
Section 7 hereof.
"Record Date" shall mean the date designated by the Board of Directors
of the Corporation at the time a distribution is declared; provided,
however, that such Record Date shall be the first day of the calendar month
in which the applicable Distribution Payment Date falls or such other date
designated by the Board of Directors for the payment of distributions that
is not more than thirty (30) days nor less than ten (10) days prior to such
Distribution Payment Date.
"Redemption Price" shall mean a price per share equal to Sixteen
Dollars ($16.00) together with accrued and unpaid distributions, if any,
thereon to the Call Date.
"Series A Preferred Stock" 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 distributions by the Board of Directors, the
allocation of funds to be so paid on any series or class of capital stock
of the Corporation.
"Voting Preferred Stock" shall have the meaning set forth in Section 8
hereof.
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Except as provided above, the definitions in the Charter are applicable to
the Series A Preferred Stock.
Section 3. Distributions.
(a) The holders of Series A Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for that purpose, cumulative distributions payable in cash in an
amount per share of Series A Preferred Stock equal to $1.40 per annum (or at the
rate of 8 3/4% per annum of the Liquidation Preference). Such distributions
shall accrue and be cumulative from August 1, 1998, whether or not in any
Distribution Period or Periods such distributions shall be declared or there
shall be funds of the Corporation legally available for the payment of such
distributions, and shall be payable quarterly in arrears on the Distribution
Payment Dates, commencing on November 15, 1998. Each such distribution shall be
payable in arrears to the holders of record of the Series A Preferred Stock, as
they appear on the stock records of the Corporation at the close of business on
the Record Date for such distribution. Accumulated, accrued and unpaid
distributions for any past Distribution Periods may be declared and paid at any
time, without reference to any regular Distribution Payment Date, to holders of
record on the Record Date therefor. The amount of accumulated, accrued and
unpaid distributions on any share of Series A Preferred Stock, or fraction
thereof, at any date shall be the amount of any distributions thereon calculated
at the applicable rate to and including such date, whether or not earned or
declared, which have not been paid in cash. Any distribution payment made on
shares of Series A Preferred Stock shall be first credited against the earliest
accrued but unpaid distribution due which remains payable.
(b) The amount of distributions payable per share of Series A Preferred
Stock for each full Distribution Period shall be computed by dividing the annual
distribution by four (4). The amount of distributions payable per share of
Series A Preferred Stock for any period shorter or longer than a full
Distribution Period, shall be computed ratably on the basis of a 360-day year
consisting of twelve (12) 30-day months. Holders of Series A Preferred Stock
shall not be entitled to any distributions, whether payable in cash, property or
stock, in excess of cumulative distributions, as herein provided, on the Series
A Preferred Stock, except for distributions upon liquidation, dissolution or
winding up of the Corporation to which the holders of Series A Preferred Stock
are entitled pursuant to Section 4 below. No interest, or sum of money in lieu
of interest, shall be payable in respect of any distribution payment or payments
on the Series A Preferred Stock that may be in arrears.
(c) So long as any of the shares of Series A Preferred Stock are
outstanding, no distributions, except as described in the immediately following
sentence, shall be declared or paid or set apart for payment by the Corporation
or other distribution of cash or other property declared or made directly or
indirectly by the Corporation with respect to any class or series of Parity
Stock for any period unless distributions equal to the full amount of
accumulated, accrued and unpaid distributions have been or contemporaneously are
declared and paid or declared and a sum sufficient for the payment thereof have
been or contemporaneously are set apart for such payment on the Series A
Preferred Stock for all Distribution Periods terminating on or prior to the
Distribution Payment Date with respect to such class or series of Parity Stock.
When distributions are not paid in full or a sum sufficient for such payment is
not set apart, as aforesaid, all distributions declared upon the Series A
Preferred Stock and all distributions declared upon any other class or series of
Parity Stock shall be declared ratably in proportion to the respective amounts
of distributions accumulated, accrued and unpaid on the Series A Preferred Stock
and accumulated, accrued and unpaid on such Parity Stock.
(d) Unless full distributions on the Series A Preferred Stock have been or
contemporaneously are declared and paid or declared and a sum sufficient for the
payment thereof set apart for payment for all past Distribution Periods and the
then current Distribution Period (i) except as set forth in Section 3(a) above,
no distributions (other than in Junior Stock, or options, warrants or rights to
subscribe therefor) shall be declared or paid or set aside for payment, or other
distribution of cash or property declared or made directly or indirectly by the
Corporation with respect to any shares of Junior Stock or Parity Stock, and (ii)
no Junior Stock or Parity Stock (including less than all of the Series A
Preferred Stock) shall be redeemed, purchased or otherwise acquired
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for any consideration (or any moneys be paid or made available for a sinking
fund for the redemption of any shares of such stock) directly or indirectly by
the Corporation except by conversion into or exchange for Junior Stock and
except for a redemption or purchase or other acquisition of Common Stock or
other equity securities of the Corporation for purposes of an employee benefit
plan of the Corporation or any subsidiary or as provided under the Charter to
protect the Corporation's status as a REIT.
(e) Notwithstanding anything contained herein to the contrary, no
distributions on shares of Series A Preferred Stock shall be authorized or
declared by the Board of Directors of the Corporation or paid or set apart for
payment by the Corporation at such time as the terms and provisions of any
agreement of the Corporation, including any agreement relating to its
indebtedness, prohibits such authorization, declaration, payment or setting
apart for payment or provides that such authorization, declaration, payment or
setting apart for payment would constitute a breach thereof or a default
thereunder, or to the extent such declaration or payment shall be restricted or
prohibited by law.
(f) Notwithstanding anything contained herein to the contrary,
distributions on the Series A Preferred Stock, if not paid on the applicable
Distribution Payment Date, will accrue whether or not distributions are
authorized or declared for such Distribution Payment Date, whether or not the
Corporation has earnings, whether or not there are funds legally available for
the payment of such distributions and whether or not any agreement of the
Corporation prohibits the payment of such distributions.
(g) If, for any taxable year, the Corporation elects to designate as a
"capital gain dividend" (as defined in Section 857 of the Code) any portion (the
"Capital Gain Amount") of the distributions paid or made available for the year
to holders of all classes of stock (the "Total Distributions"), then the portion
of the Capital Gain Amount that shall be allocable to holders of the Series A
Preferred Stock shall be the amount that the total distributions paid or made
available to the holders of the Series A Preferred Stock for the year bears to
the Total Distributions.
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 holders of Junior Stock, the holders of shares of
Series A Preferred Stock shall be entitled to receive Sixteen Dollars ($16.00)
per share of Series A Preferred Stock plus an amount equal to all distributions
(whether or not declared) accumulated, accrued and unpaid thereon to the date of
final distribution to such holders, but such holders shall not be entitled to
any further payment. Until the holders of the Series A Preferred Stock have been
paid the liquidation preference in full, no payment will be made to any holder
of Junior Stock upon the liquidation, dissolution or winding up of the
Corporation. If, upon any liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation, or proceeds thereof, distributable
among the holders of Series A Preferred Stock shall be insufficient to pay in
full the preferential amount aforesaid and liquidating payments on any other
shares of any class or series of Parity Stock, then such assets, or the proceeds
thereof, shall be distributed among the holders of Series A Preferred Stock and
any such other Parity Stock ratably in the same proportion as the respective
amounts that would be payable on such Series A Preferred Stock and any such
other Parity Stock if all amounts payable thereof were paid in full. For
purposes of this Section 4, (i) a consolidation or merger of the Corporation
with one or more corporations, (ii) a sale, lease, transfer or conveyance of all
or substantially all of the Corporation's assets, or (iii) a statutory share
exchange shall not be deemed to be a liquidation, dissolution or winding,
voluntary or involuntary, of the Corporation.
(b) Subject to the rights of the holders of any shares of Parity Stock,
upon any liquidation, dissolution or winding up of the Corporation, after
payment shall have been made in full to the holders of Series A Preferred Stock
and any Parity Stock, as provided in this Section 4, any other series or class
or classes of Junior Stock shall, subject to the respective terms thereof, be
entitled to receive any and all assets remaining to be paid or distributed, and
the holders of the Series A Preferred Stock and any Parity Stock shall not be
entitled to share therein.
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(c) In determining whether a distribution (other than upon voluntary or
involuntary liquidation) by distribution, redemption or other acquisition of
shares of stock of the Corporation or otherwise is permitted under the MGCL, no
effect shall be given to 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 stock of the Corporation whose
preferential rights upon dissolution are superior to those receiving the
distribution.
Section 5. Redemption.
(a) Except as otherwise permitted under Article TENTH of the Charter and
except as provided by paragraph (b) of this Section 5, shares of Series A
Preferred Stock shall not be redeemable by the Corporation prior to August 15,
2003. On and after August 15, 2003, the Corporation, at its option, may redeem
shares of Series A Preferred Stock in whole or, from time to time, in part at
the Redemption Price.
(b) Notwithstanding the foregoing, the outstanding shares of Series A
Preferred Stock may be redeemed in whole, but not in part, at the Redemption
Price at the option of the Corporation upon the occurrence of a Change of
Control; provided that in no event shall such redemption occur more than ninety
days (90) after the occurrence of such Change of Control. For purposes of
paragraphs (b), (c), (d) and (e) of this Section 5, the "Corporation" shall
include, upon a Change of Control, the successor to all or substantially all of
the assets of the Corporation or the surviving corporation in a merger,
consolidation or share exchange.
(c) Shares of Series A Preferred Stock shall be redeemed by the Corporation
on the date specified in the notice to holders required under paragraph (d) of
this Section 5 (the "Call Date"). The Call Date shall be selected by the
Corporation, shall be specified in the notice of redemption and shall be not
less than thirty (30) nor more than sixty (60) days after the date notice of
redemption is sent by the Corporation. Upon any redemption of shares of Series A
Preferred Stock pursuant to the second sentence of paragraph (a) or the first
sentence of paragraph (b) of this Section 5, the Corporation shall pay in cash
to the holder of such shares an amount equal to all accumulated, accrued and
unpaid distributions, if any, to the Call Date, whether or not earned or
declared. Immediately prior to authorizing any redemption of the Series A
Preferred Stock, and as a condition precedent for such redemption, the
Corporation, by resolution of its Board of Directors, shall declare a mandatory
distribution on the Series A Preferred Stock payable in cash on the Call Date in
an amount equal to all accumulated, accrued and unpaid distributions as of the
Call Date on the Series A Preferred Stock to be redeemed, which amount shall be
added to the redemption price. If the Call Date falls after a distribution
Record Date and prior to the corresponding Distribution Payment Date, then each
holder of Series A Preferred Stock at the close of business on such distribution
Record Date shall be entitled to the distribution payable on such shares on the
corresponding Distribution Payment Date notwithstanding the redemption of such
shares prior to such Distribution Payment Date. Except as provided above, the
Corporation shall make no payment or allowance for accumulated or accrued
distributions on shares of Series A Preferred Stock called for redemption.
(d) If the Corporation shall redeem shares of Series A Preferred Stock
pursuant to the second sentence of paragraph (a) or the first sentence of
paragraph (b) of this Section 5, notice of such redemption shall be given to
each holder of record of the shares to be redeemed. Such notice shall be
provided by first class mail, postage prepaid, at such holder's address as the
same appears on the stock records of the Corporation, or by publication in The
Wall Street Journal or The New York Times, or if neither such newspaper is then
being published, any other daily newspaper of general circulation in The City of
New York, such publication to be made once a week for two (2) successive weeks
commencing not less than thirty (30) nor more than sixty (60) days prior to the
Call Date. If the Corporation elects to provide such notice by publication, it
shall also promptly mail notice of such redemption to the holders of the shares
of Series A Preferred Stock to be redeemed. Neither the failure to give any
notice required by this paragraph (d), nor any defect therein or in the mailing
thereof, to any particular holder, shall affect the sufficiency of the notice or
the validity of the proceedings for redemption with respect to the other
holders. Any notice which was mailed in the manner herein provided shall be
conclusively presumed to have been duly given on the date mailed whether or not
the holder receives the notice.
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Each such mailed or published notice shall state, as appropriate: (i) the Call
Date; (ii) the Redemption Price; (iii) the number of shares of Series A
Preferred Stock to be redeemed and, if fewer than all such shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; (iv) the place or places at which the certificates evidencing the shares
of Series A Preferred Stock are to be surrendered for payment of the Redemption
Price; and (v) that distributions on the shares of Series A Preferred Stock to
be redeemed shall cease to accrue on such Call Date except as otherwise provided
herein. Notice having been published or mailed as aforesaid, and provided that
on or before the Call Date specified in such notice the amount of cash necessary
to effect such redemption shall have been set aside by the Corporation, separate
and apart from its other funds in trust for the pro rata benefit of the holders
of the shares of Series A Preferred Stock so called for redemption, from and
after the Call Date, including all accumulated, accrued and unpaid distributions
to the Call Date, whether or not earned or declared, (i) except as otherwise
provided herein, distributions on the shares of Series A Preferred Stock so
called for redemption shall cease to accumulate or accrue on the shares of
Series A Preferred Stock called for redemption (except that, in the case of a
Call Date after a distribution Record Date and prior to the related Distribution
Payment Date, holders of Series A Preferred Stock on the distribution Record
Date will be entitled on such Distribution Payment Date to receive the
distribution payable on such shares), (ii) said shares shall no longer be deemed
to be outstanding, (iii) all rights of the holders thereof as holders of Series
A Preferred Stock 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
distributions payable thereon). The Corporation's obligation to provide cash in
accordance with the preceding sentence shall be deemed fulfilled if, on or
before the Call 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, The City of New York, or in Los Angeles or San Diego, California,
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, such amount of cash as is necessary for
such redemption, in trust, with irrevocable instructions that such cash be
applied to the redemption of the shares of Series A Preferred Stock so called
for redemption. No interest shall accrue for the benefit of the holders of
shares of Series A Preferred Stock 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 (2) years from the Call Date shall revert to the general funds of
the Corporation, after which reversion the holders of shares of Series A
Preferred Stock so called for redemption shall look only to the general funds of
the Corporation for the payment of such cash.
(e) As promptly as practicable after the surrender in accordance with said
notice of the certificates for any such shares of Series A Preferred Stock so
redeemed (properly endorsed or assigned for transfer, if the Corporation shall
so require and if the notice shall so state), such certificates shall be
exchanged for cash (without interest thereon) for which such shares have been
redeemed in accordance with such notice. If fewer than all the outstanding
shares of Series A Preferred Stock are to be redeemed, shares to be redeemed
shall be selected by the Corporation from outstanding shares of Series A
Preferred Stock not previously called for redemption by lot or, with respect to
the number of shares of Series A Preferred Stock held of record by each holder
of such shares, pro rata (as nearly as may be) or by any other method as may be
determined by the Board of Directors in its discretion to be equitable. If fewer
than all the shares of Series A Preferred Stock represented by any certificates
are redeemed, then a new certificate representing the unredeemed shares of
Series A Preferred Stock shall be issued without cost to the holders thereof.
Section 6. Status of Acquired Stock. All shares of Series A Preferred Stock
which shall have been issued and reacquired in any manner by the Corporation
shall be restored to the status of authorized but unissued shares of Series A
Preferred Stock.
Section 7. Ranking. Any class or series of capital stock of the Corporation
shall be deemed to rank:
(a) prior or senior to the Series A Preferred Stock, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution
or winding up, if the holders of such class or series of stock shall be entitled
to the receipt of distributions 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 Stock;
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(b) on a parity with the Series A Preferred Stock, as to the payment of
distributions and as to the distribution of assets upon liquidation, dissolution
or winding up, whether or not the distribution rates, distribution payment dates
or redemption or liquidation prices per share thereof be different from those of
the Series A Preferred Stock, if the holders of such class or series of stock
and the Series A Preferred stock shall be entitled to the receipt of
distributions and of amounts distributable upon liquidation, dissolution or
winding up in proportion to their respective amounts of accrued and unpaid
distributions per share or liquidation preferences, without preference or
priority one over the other ("Parity Stock"); and
(c) junior to the Series A Preferred Stock, as to the payment of
distributions or as to the distribution of assets upon liquidation, dissolution
or winding up, if such class or series of stock shall be Common Stock or if the
holders of Series A Preferred shall be entitled to receipt of distributions 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 class or
series of stock ("Junior Stock").
Section 8. Voting Rights.
(a) In any matter in which the Series A Preferred Stock is entitled to vote
as expressly provided herein, each share of Series A Preferred Stock shall be
entitled to one-tenth (1/10) of one vote, except that when any other class or
series of preferred stock shall have the right to vote together with the Series
A Preferred Stock as if they were a single class on any matter, then the Series
A Preferred Stock and such other class or series shall have with respect to such
matters one (1) vote per $16.00 of stated liquidation preference and fractional
votes shall be ignored.
(b) The holders of the Series A Preferred Stock shall have the right to
vote with the Common Stock on all matters on which the holders of the Common
Stock are entitled to vote, as though part of the same class as holders of the
Common Stock. The holders of the Series A Preferred Stock shall receive all
notices of meetings of the holders of the Common Stock, and all other notices
and correspondence to the holders of the Common Stock provided by the
Corporation, and shall be entitled to take such actions, and shall have such
rights, as are set forth in these Articles Supplementary or are otherwise
available to the holders of the Common Stock in the Charter and in the Bylaws of
the Corporation as are in effect on the date hereof and from time to time
hereafter.
(c) If and whenever six quarterly distributions (whether or not
consecutive) payable on the Series A Preferred Stock shall be in arrears (which
shall, with respect to any such quarterly distribution, mean that any such
distribution 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 (2) (if not already increased by reason of a similar arrearage with
respect to any Parity Stock) and the holders of shares of Series A Preferred
Stock, together with the holders of shares of every other class or series of
Parity Stock (any other such class or series, the "Voting Preferred Stock")
entitled to vote on the matter, voting together as if they were a single class,
shall be entitled, in order to fill the vacancies thereby created, to elect two
(2) additional directors at the next annual meeting of stockholders or special
meeting held in place thereof, or at a special meeting of the holders of the
Series A Preferred Stock and the Voting Preferred Stock entitled to vote
thereon, called as hereinafter provided, and at each succeeding annual meeting
at which their respective successors are to be elected. Each such director, as a
qualification for election as such (and regardless of how elected) shall submit
to the Board of Directors a duly-executed, valid, binding and enforceable letter
of resignation from the Board, to be effective immediately upon the date on
which all arrears in distributions on the Series A Preferred Stock and the
Voting Preferred Stock then outstanding and holding similar rights in respect of
the election of additional directors shall have been paid and distributions
thereon for the current quarterly distribution period shall have been paid or
declared and set apart for payment, whereupon the right of the holders of the
Series A Preferred Stock and the Voting Preferred Stock to elect such additional
two (2) 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 (6) quarterly distributions), and the terms of office of all persons elected
as directors by the holders of the Series A Preferred Stock and the Voting
Preferred Stock shall, upon the effectiveness of their respective letters of
resignation, forthwith terminate, and the number of the
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Board of Directors shall be reduced accordingly. At any time after such voting
power shall have been so vested in the holders of Series A Preferred Stock and
the Voting Preferred Stock, the Secretary of the Corporation may, and upon the
written request of any holder of Series A Preferred Stock (addressed to the
Secretary at the principal office of the Corporation) shall, call a special
meeting of the holders of the Series A Preferred Stock and of the Voting
Preferred Stock for the election of the two (2) 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 twenty (20) days after
receipt of any such request, then any holder of Series A Preferred Stock 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 at which their respective successors are to be elected. If any
vacancy shall occur among the directors elected by the holders of the Series A
Preferred Stock and the Voting Preferred Stock entitled to vote thereon, 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 Stock
and such Voting Preferred Stock or the successor of such remaining Director, to
serve for the remainder of the term of the director creating the vacancy,
subject however to earlier resignation as herein provided.
(d) So long as any shares of Series A Preferred Stock remain outstanding,
the Corporation will not, without the affirmative vote or consent of the holders
of at least 66 2/3% of the shares of Series A Preferred Stock outstanding at the
time, given in person or by proxy, either in writing or at a meeting (such
series voting separately as a class), (A) authorize or create, or increase the
authorized or issued amount of, any class or series of shares of capital stock
ranking prior or senior to the Series A Preferred Stock with respect to the
payment of distributions or the distribution of assets upon liquidation,
dissolution or winding-up or reclassify any authorized shares of capital stock
of the Corporation into such shares, or create, authorize or issue any
obligation or security convertible into or evidencing the right to purchase any
such shares; or (B) amend, alter or repeal the provisions of the Corporation's
Charter (including these Articles Supplementary) whether by merger,
consolidation or otherwise (an "Event"), so as to materially and adversely
affect any right, preference, privilege or voting power of the Series A
Preferred Stock or the holders thereof; provided, however, with respect to the
occurrence of any of the Events set forth in (B) above, so long as the shares of
Series A Preferred Stock (or shares of any equivalent class or series of stock
issued by the surviving corporation in any merger, consolidation or share
exchange to which the Corporation became a party) remain outstanding with the
terms thereof materially unchanged, the occurrence of any such Event shall not
be deemed to materially and adversely affect such rights, preferences,
privileges or voting power of holders of Series A Preferred Stock and provided
further that (x) any increase in the amount of the authorized preferred stock or
the creation or issuance of any other shares of Series A Preferred Stock, or (y)
any increase in the amount of authorized Series A Preferred Stock or any other
preferred stock, in each case ranking on a parity with or junior to the Series A
Preferred Stock with respect to payment of distributions or the distribution of
assets upon liquidation, dissolution or winding-up, shall not be deemed to
materially and adversely affect such rights, preferences, privileges or voting
powers. The foregoing voting provisions will not apply if, at or prior to the
time when the act with respect to which such vote would otherwise be required
shall be effected, all outstanding shares of Series A Preferred Stock shall have
been redeemed or called for redemption upon proper notice and sufficient funds
shall have been irrevocably deposited in trust to effect such redemption.
Nothing in this paragraph (d) shall be deemed to limit the Corporation's ability
to issue debt securities (other than debt securities convertible into a class of
capital stock ranking prior or senior to the Series A Preferred Stock) or
otherwise incur additional indebtedness or alter the terms of any existing or
future indebtedness during the period any shares of Series A Preferred Stock are
outstanding.
Section 9. Restrictions on Transfer, Acquisition and Redemption of Shares.
The Series A Preferred Stock constitutes a class of preferred stock of the
Corporation, and shares of preferred stock constitute Capital Shares of the
Corporation. Therefore, shares of Series A Preferred Stock, being Capital
Shares, are governed by and issued subject to all of the limitations, terms and
conditions of the Charter of the Corporation applicable to Capital Shares
generally, including but not limited to the terms and conditions (including
exceptions and exemptions) of Article TENTH of the Charter applicable to Capital
Shares; provided, however, that the terms and conditions (including exceptions
and exemptions) of Article TENTH of the Charter applicable to Capital Shares
8
<PAGE>
shall also be applied to the Series A Preferred Stock separately and without
regard to any other series or class. The foregoing sentence shall not be
construed to limit the applicability to the Series A Preferred Stock of any
other term or provision of the Charter.
Section 10. Severability of Provisions. If any preference, conversion or
other right, voting power, restriction, limitation as to distributions,
qualification or term or condition of redemption of the Series A Preferred Stock
set forth herein is invalid, unlawful or incapable of being enforced by reason
of any rule of law or public policy, all other preferences, conversion or other
distributions, qualifications or terms or conditions of redemption of Series A
Preferred Stock set forth herein which can be given effect without the invalid,
unlawful or unenforceable provision thereof shall, nevertheless, remain in full
force and effect, and no preferences, conversion or other rights, voting powers,
restrictions, limitations as to distributions, qualifications or terms or
conditions or redemption of Series A Preferred Stock herein set forth shall be
deemed dependent upon any other provision thereof unless so expressed therein.
FOURTH: The terms of the classes and series of capital stock of the
Corporation (including preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends, qualifications, or terms or
conditions of redemption) other than the terms of the Series A Preferred Stock
set forth in Article THIRD hereof remain unchanged by these Articles
Supplementary.
IN WITNESS WHEREOF, Price Enterprises, Inc. has caused these presents to be
signed in its name and on its behalf by its President and witnessed by its
Secretary on this 28th day of July, 1998.
WITNESS: PRICE ENTERPRISES, INC.
/s/ JOSEPH R. SATZ By:/s/ JACK MCGRORY
- ------------------ -------------------
Jospeh R. Satz, Secretary Jack McGrory, President
THE UNDERSIGNED, President of Price Enterprises, Inc., who executed on
behalf of the Corporation 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.
/s/ JACK MCGRORY
----------------
Jack McGrory, President
9
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PREFERRED STOCK [LOGO] PREFERRED STOCK
P E I
- ------------ ------------
NUMBER SHARES
- ------------ ------------
PRICE ENTERPRISES, INC.
INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND
CUSIP 741444 30 1
- --------------------------------------------------------------------------------
This CERTIFIES that
SPECIMEN
Is the owner of
- --------------------------------------------------------------------------------
FULLY PAID AND NON-ASSESSABLE SHARES OF PREFERRED STOCK,
PAR VALUE OF $.0001 PER SHARE, OF
PRICE ENTERPRISES, INC., transferable on the books of the Corporation by said
holder in person, or by duly authorized attorney, upon surrender of this
certificate properly endorsed. This certificate and the shares represented
hereby are subject to all the terms, conditions and limitations of the
Certificate of Incorporation and By-laws and all amendments thereto and
supplements thereof, and the restrictive legends included on the back hereof.
This certificate is not valid unless countersigned and registered by the
Transfer Agent and Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures
of its duly authorized officers.
Dated:
----------------------
/s/ JOSEPH R. SATZ PRICE ENTERPRISES, INC. /s/ Jack McGrory
CORPORATE
Executive Vice President [SEAL] President and Chief
and Secretary NOV. 18 Executive Officer
1997
MARYLAND
----------------------
COUNTERSIGNED AND REGISTERED:
ChaseMellon Shareholder Services, L.L.C.
Transfer Agent and Registrar
By
Authorized Officer
<PAGE>
================================================================================
PRICE ENTERPRISES, INC.
The Corporation will furnish to any stockholder on request and without
charge a full 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
which the Corporation is authorized to issue, of the differences in the relative
rights and preferences between the shares of each series of a preferred or
special class in series which the Corporation is authorized to issue, to the
extent they have been set, and of the authority of the Board of Directors to set
the relative rights and preferences of subsequent series of a preferred or
special class of stock. Such request may be made to the secretary of the
Corporation or to its transfer agent.
The shares represented by this certificate are subject to restrictions on
Beneficial and Constructive Ownership and Transfer for the purpose of the
Corporation's maintenance of its status as a Real Estate Investment Trust under
the Internal Revenue Code of 1986, as amended (the "Code"). Subject to certain
further restrictions and except as expressly provided in the Corporation's
Charter, (i) no Person may Beneficially Own in excess of 5% of the outstanding
Capital Shares of the Corporation (by value or by number of shares, whichever is
more restrictive), (ii) no Person may Constructively Own in excess of 9.8% of
the outstanding Capital Shares of the Corporation (by value or by number of
shares, whichever is more restrictive); (iii) no Person may Beneficially Own in
excess of 5% of the outstanding shares of Series A Preferred Stock of the
Corporation; (iv) no Person may Constructively Own in excess of 9.8% of the
outstanding shares of Series A Preferred Stock of the Corporation; (v) no Person
may Beneficially or Constructively Own Capital Shares that would result in the
Corporation being "closely held" under Section 856(h) of the Code or otherwise
cause the Corporation to fail to qualify as a REIT; and (vi) no Person may
Transfer Capital Shares if such Transfer would result in the capital stock of
the Corporation being owned by fewer than 100 Persons. Any Person who
Beneficially or Constructively Owns or attempts to Beneficially or
Constructively Own Capital Shares which causes or will cause a Person to
Beneficially or Constructively Own Capital Shares in excess of the above
limitations must immediately notify the Corporation. Moreover, any Person who
Beneficially or Constructively Owns or attempts to Beneficially or
Constructively Own shares of Series A Preferred Stock in excess of the above
limitations must immediately notify the Corporation. If any of the restrictions
on transfer or ownership are violated, the Capital Shares represented hereby
will be automatically transferred to a Trustee of a Trust for the benefit of one
or more Charitable Beneficiaries. In addition, the Corporation may redeem shares
upon the terms and conditions specified by the Board of Directors in its sole
discretion if the Board of Directors determines that ownership or a Transfer or
other event may violate the restrictions described above. Furthermore, upon the
occurrence of certain events, attempted Transfers in violation of the
restrictions described above may be void ab initio. All capitalized terms in
this legend have the meanings defined in the Charter of the Corporation, as the
same may be amended from time to time, a copy of which, including the
restrictions on transfer and ownership, will be furnished to each holder of
Capital Shares on request and without charge. Requests for such a copy may be
directed to the Secretary of the Company, at the Company's principal office.
Keep this certificate in a safe place. If it is lost, stolen or destroyed,
the Corporation will require a bond of indemnity as a condition to the issuance
of a replacement certificate.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by the entireties
JT TEN - as joint tenants with right of
survivorship and not as tenants
in common
UNIF GIFT MIN ACT - Custodian
---------- -------------
(Cust) (Minor)
under Uniform Gifts to Minors
Act
-----------------------------
(State)
UNIF TRF MIN ACT - Custodian (until age )
------- -----
(Cust)
under Uniform Transfers to
------- Minors Act
(Minor) -----------------
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, __________________________________ hereby sell, assign and
transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- ----------------------------------------
- ----------------------------------------
- --------------------------------------------------------------------------------
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Shares
- -------------------------------------------------------------------------
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
Attorney
- -----------------------------------------------------------------------
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated
------------------------------------------
------------------------------------------------------------
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND
WITH THE NAME AS WRITTEN UPON THE FACE OF THE
CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION
OR ENLARGEMENT OR ANY CHANGE WHATEVER.
Signature(s) Guaranteed:
By
-------------------------------------------------------
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
