UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
Cadillac Fairview Corporation
(Name of Issuer)
Common Shares
(Title of Class of Securities)
12692920 J
(CUSIP Number)
Jane Beatty
Ontario Teachers' Pension Plan Board
5650 Yonge Street, Suite 300
North York, Ontario, Canada, M2M 4H5
416-730-6178
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
June 30, 1998
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this
Schedule 13D, and is filing this schedule because of ss.ss.
240.13d- 1(e), 240.13d-1(f) or 240.13d-1(g), check the following
box:[_]
Note: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits.
See ss.240.13d-7 for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to
the subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in
a prior cover page.
The information required on the remainder of this cover page
shall not be deemed to be "filed" for the purpose of Section 18
<PAGE>
of the Securities Exchange Act of 1934 (the "Act") or otherwise
subject to the liabilities of that section of the Act but shall
be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
CUSIP No. 12692920 J
1. NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES
ONLY)
Ontario Teachers' Pension Plan Board
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE
INSTRUCTIONS)
(a) [ ]
(b) [X]
3. SEC USE ONLY
4. SOURCE OF FUNDS (SEE INSTRUCTIONS)
OO
5. CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
An Ontario, Canada Corporation
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
7. SOLE VOTING POWER
15,383,133
8. SHARED VOTING POWER
0
9. SOLE DISPOSITIVE POWER
15,383,133
10. SHARED DISPOSITIVE POWER
0
<PAGE>
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
15,383,133
12. CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES (SEE INSTRUCTIONS) [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
19.7%
14. TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
EP
<PAGE>
Item 1. Security and Issuer.
This statement relates to the Common Shares (the "Shares")
of Cadillac Fairview Corporation (the "Issuer"). The address of
Issuer's principal executive offices is 20 Queen Street West 5th
Floor, Toronto, Ontario M5H 3R4.
Item 2. Identity and Background.
(a)-(c) This statement is being filed by the Ontario
Teachers' Pension Plan Board, an Ontario, Canada corporation (the
"Board"). The principal business address of the Board is 5650
Yonge Street, Suite 300, North York, Ontario, Canada, M2M 4H5.
The Board administers a pension plan and manages a pension fund.
The name, business address, present principal occupation or
employment (and the name, principal business and address of any
corporation or other organization in which such employment is
conducted) and the citizenship of each executive officer and
director of the Board, each person controlling the Board and each
executive officer and director of any corporation or other person
in control of the Board is set forth in Schedule A and
incorporated herein by reference.
(d) Not Applicable.
(e) Not Applicable.
Item 3. Source and Amount of Funds or Other Consideration.
The Board acquired beneficial ownership of 12,500,000
Shares for Cdn $200 million as a result of the 1995
reorganization of the Issuer. On December 2, 1996, the Board
acquired from the Issuer rights to acquire 958,933 Shares in a
rights offering. The Board exercised these rights on January 22,
1997 for Cdn $15,342,928. The Board previously reported ownership
of these 13,458,933 Shares on Schedule 13G.
The Board acquired 1,500,000 Shares on January 14, 1998.
The net amount of funds used by the Board to acquire these
1,500,000 Shares was Cdn $48,022,500 (including commissions).
The Board acquired 50,000 Shares on June 26, 1998. The net
amount of funds used by the Board to acquire these 50,000 Shares
was Cdn $1,501,500 (including commissions).
<PAGE>
The Board acquired 374,200 Shares on June 30, 1998. The net
amount of funds used by the Board to acquire these 374,200 Shares
was Cdn $12,494,629 (including commissions).
All of the funds used by the Board to acquire the
15,383,133 Shares came from the pension fund managed by the
Board, which includes income from the fund's investment portfolio
and contributions of members of the pension plan administered by
the Board.
Item 4. Purpose of Transaction.
The Board acquired and continues to hold the Shares
reported herein for investment purposes. The Board has entered
into a Shareholders' Agreement among Blackstone (defined below),
the Board and WHCF Real Estate Limited Partnership ("Whitehall",
and collectively with Blackstone and the Board, the "Investors"),
dated as of July 31, 1995 and as amended on August 26, 1997 (the
"Shareholders' Agreement"). "Blackstone" refers to the following
entities: BRE/CF Equity Acquisition L.P., Blackstone Real Estate
Partners II L.P., Blackstone Real Estate Partners IV L.P.,
Blackstone RE Capital Partners II L.P. and Blackstone CF Equity
Acquisition L.P. A copy of the Shareholders' Agreement is
attached hereto as Exhibit 1 and is incorporated herein by
reference. The Board disclaims that Blackstone, Whitehall and the
Board constitute a "group" for purposes of the U.S. securities
laws.
Pursuant to the Shareholders' Agreement, the Investors have
agreed to vote their Shares to elect a board of directors
consisting of 13 directors, three directors to be nominated by
Whitehall, two directors to be nominated by the Board and one
director to be nominated by Blackstone. The right to nominate
individuals to the Issuer's board of directors is dependent on
the parties maintaining certain levels of Share ownership. The
Board is entitled to nominate two directors as long as it
continues to hold at least 10% of the Shares and it is entitled
to nominate one director as long as it holds at least 3% of the
Shares. If Blackstone ceases to have a nominee on the Issuer's
board of directors and if at such time the Board holds at least
as many Shares as Whitehall, then the Board shall be entitled to
increase the number of directors which it is otherwise entitled
to nominate by one. The Board's current nominees to the Issuer's
<PAGE>
board of directors are Morton Gross and Brian Muzyk. Mr. Muzyk
is a Vice-President of the Board.
The Shareholders' Agreement provides that if a vacancy in
the Issuer's board of directors arises, and the vacating director
was a nominee of one of the Investors, the Investor who nominated
such vacating director shall be entitled to nominate an
individual to be appointed by the board of directors as a
director to replace such vacating director.
The Shareholders' Agreement does not restrict a party's
ability to sell, assign, transfer or otherwise dispose of its
interest in the Shares, and third party transferees may, but are
not required to, become parties to the Shareholders' Agreement.
The Shareholders' Agreement continues in force until the
earliest of: (i) the date upon which none of the Investors owns
5% or more of the then outstanding Shares; (ii) the date upon
which the agreement is terminated in writing among each party who
is at such time a holder of not less than 7% of the then
outstanding Shares; (iii) the fifth anniversary of the date of
the agreement; and (iv) the date upon which the agreement is
terminated in writing by each of the parties thereto.
The Board may, in the future, have discussions with
management, directors and other shareholders of the Issuer
concerning various ways of maximizing long-term shareholder
value.
Except as set forth in this Item 4, the Board has no
present plans or proposals that relate to or that would result in
any of the actions specified in clauses (a) through (j) of Item 4
of Schedule 13D.
Item 5. Interest in Securities of the Issuer.
(a)-(b) At the close of business on June 30, 1998, the
Board owned 15,383,133 Shares. Pursuant to information provided
by the Issuer, 78,129,528 Shares were outstanding as of June 30,
1998. Based on such information, the 15,383,133 Shares
beneficially owned by the Board as of the close of business on
June 30, 1998 represent approximately 19.7% of the Shares
outstanding. The Board has sole voting and dispositive power over
all of the 15,383,133 Shares beneficially owned by it.
<PAGE>
Except as described herein, neither the Board nor, to the
best knowledge of the Board, any of the persons listed in
Schedule A beneficially owns any Shares.
(c) The following table describes the transactions in
Shares in the past sixty days by the Board:
Date of Number of Price per Where and how
Transaction Securities Share* transaction effected
- ----------- ---------- --------- --------------------
6/26/98 50,000 $30.000 Cdn All transactions
6/30/98 35,000 $33.471 Cdn effected through
6/30/98 325,000 $33.346 Cdn a broker on the
6/30/98 14,200 $33.420 Cdn Toronto Stock
Exchange
Except as described above, neither the Board nor, to the
best knowledge of the Board, any of the persons listed in
Schedule A effected any transactions in the Shares in the past
sixty days.
*Price per Share excludes commissions. See Item 3.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships
with Respect to Securities of the Issuer.
Except as described in Item 4, the Board has no contract,
arrangement, understanding or relationship with any other person
regarding the Shares, including but not limited to transfer or
voting of any of such shares, finder's fees, joint ventures, loan
or option arrangements, puts or calls, guarantees of profits,
division of profits or loss or the giving or withholding of
proxies.
Item 7. Materials to be Filed as Exhibits.
1. Shareholders' Agreement dated as of July 31, 1995, as
amended on August 26, 1997.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of its knowledge
and belief, the undersigned certifies that the information set
forth in this statement is true, complete and correct.
July 10, 1998
ONTARIO TEACHERS' PENSION PLAN BOARD
/s/ Jane Beatty
-------------------------
Name: Jane Beatty
Title: Legal Counsel, Investments
<PAGE>
Schedule A
Set forth below are the names and positions of all of the
directors and executive officers of Ontario Teachers' Pension
Plan Board, the principal occupation or employment of such person
and the name, principal business and address of any corporation
or other organization in which such employment is conducted.
Unless otherwise indicated, the citizenship of each person listed
below is Canadian, and the business address of each person listed
below is 5650 Yonge Street, Suite 300, North York, Ontario,
Canada, M2M 4H5.
Name, Citizenship and Business Principal Employment and
Address Employer
C. Edward Medland Chair of the Board of Directors
Beauwood Investments Inc. of Ontario Teachers' Pension
121 King Street West Plan Board; Retired Financial
Suite 2525 Executive
Toronto, Ontario, M5H 3T9
Jalynn Bennett Director of Ontario Teachers'
President Pension Plan Board; Strategic
Jalynn H. Bennett Associates Planning and Organizational
247 Davenport Road Development Consultant
Suite 303
Toronto, Ontario, M5R 1J9
Geoffrey Clarkson Director of Ontario Teachers'
Ernst & Young Pension Plan Board; Retired
P.O. Box 251 Audit Partner with Ernst &
Toronto-Dominion Centre Young
Toronto, Ontario, M5K 1J7
Ann Finlayson Director of Ontario Teachers'
440 Markham Street Pension Plan Board; Journalist,
Toronto, Ontario, M6G 2L2 Speaker, Freelance Editor and
Consultant
Lucy Greene Director of Ontario Teachers'
1736 Caughey Lane Pension Plan Board; Retired
Penetang, Ontario, L9M 1X4 Human Resources Executive
Robin W. Korthals Director of Ontario Teachers'
121 King Street West Pension Plan Board; Retired
<PAGE>
Suite 2525
Toronto, Ontario, M5H 3T9 Financial Executive
<PAGE>
David Lennox Director of Ontario Teachers'
Ontario Public School Pension Plan Board; Secretary
Teachers' Federation of the Ontario Public School
5160 Orbitor Drive Teachers' Federation
Mississauga,
Ontario, L4W 5H2
Gary Porter Director of Ontario Teachers'
G. A. Porter Pension Plan Board; Chartered
Chartered Accountant Accountant
820-439 University Avenue
Toronto, Ontario, M5G 1Y8
Roger Wilson Director of Ontario Teachers'
Fasken Campbell Godfrey Pension Plan Board; Attorney
Toronto-Dominion Bank Tower
Box 20
Toronto-Dominion Centre
Toronto, Ontario, M5K 1N6
Claude R. Lamoureux President and Chief Executive
Officer
Robert Bertram Senior Vice-President,
Investments
Allan Reesor Senior Vice-President, Client
and Information Services
John Brennan Vice-President, Human Resources
& Public Affairs
Andrew Jones Vice-President, Finance
Peter Maher Vice-President, Internal Audit
Roger Barton Vice-President, General Counsel
& Secretary
Rosemarie McClean Vice-President, Client Services
Russ Bruch Vice-President, Investments MIS
<PAGE>
Morgan McCague Vice-President, Quantitative
Investments
Neil Petroff Vice-President, Core
International and Fixed Income
Heather Hunter Vice-President, Equities
Michael Lay Vice-President, Merchant
Banking
Brian Muzyk Vice-President, Real Estate
Leo de Bever Vice-President, Research &
Economics
<PAGE>
Exhibit Description
Number
- -----------------------------------------------------------------
1. Shareholders' Agreement dated as of July 31, 1995,
as amended on August 26, 1997.
<PAGE>
Exhibit 1
SHAREHOLDERS' AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 31st day of July, 1995.
A M O N G:
BRE/CF EQUITY ACQUISITION L.P.,
BLACKSTONE REAL ESTATE
PARTNERS II L.P., BLACKSTONE REAL
ESTATE PARTNERS IV L.P., and
BLACKSTONE RE CAPITAL PARTNERS II L.P.,
limited partnerships constituted under the laws of the State of
Delaware, and BLACKSTONE CF EQUITY ACQUISITION L.P., a limited
partnership constituted under the laws of the Cayman Islands,
(collectively hereinafter referred to as "Blackstone"),
OF THE FIRST PART,
- and -
ONTARIO TEACHERS' PENSION PLAN BOARD, a corporation continued
under the Teachers' Pension Act (Ontario),
(hereinafter referred to as "Teachers"),
OF THE SECOND PART,
- and -
WHCF REAL ESTATE LIMITED PARTNERSHIP, a limited partnership
constituted under the laws of the State of Delaware (hereinafter
referred to as "Whitehall"),
OF THE THIRD PART.
WHEREAS the authorized capital of the Corporation (as
defined below) consists of an unlimited number of Common Shares;
AND WHEREAS, immediately following the implementation
of the Cadillac Fairview Plan (as defined below), the issued
capital of the Corporation will consist of 61,458,495 Common
Shares;
<PAGE>
AND WHEREAS Blackstone, Teachers and Whitehall upon
the implementation of the Cadillac Fairview Plan, will be the
registered and beneficial owners of Common Shares as set out
beside their respective names on the signature pages hereof and,
in the case of Blackstone, additional Common Shares to be
acquired in respect of debt held by it;
AND WHEREAS in accordance with the Cadillac Fairview
Plan the parties wish to establish their respective rights and
obligations in respect of the composition of the Board of
Directors and certain other matters on the terms and conditions
hereinafter set forth;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in
consideration of the respective covenants and agreements of the
parties contained herein and for other good and valuable
consideration (the receipt and sufficiency of which are hereby
acknowledged by each of the parties hereto), it is hereby agreed
as follows:
ARTICLE I
INTERPRETATION
1.1 Definitions
Where used in this Agreement and the recitals hereto,
unless there is something in the context or the subject matter
inconsistent therewith, the following terms shall have the
following meanings, respectively:
(a) "Act" means the Business Corporations Act (Ontario),
as amended from time to time;
(b) "Affiliate" of a Person means another Person which
directly or indirectly controls, is controlled by or
is under common control with, such Person; and, in the
case of limited partnerships, if the general partner
of a limited partnership is the same as, is controlled
by or is under common control with the general partner
of another limited partnership, the limited
partnerships shall be deemed to be Affiliates;
(c) "Board of Directors" means the board of directors of
the Corporation;
(d) "Business Day" shall mean a day on which banks are
required to be open for business in Toronto, Ontario
and New York, New York but does not include a
Saturday, Sunday or statutory holiday in Toronto,
Ontario;
(e) "Cadillac Fairview Plan" means the amended and
restated plan of compromise and arrangement under the
Companies' Creditors Arrangement Act (Canada) and the
Act of Cadillac Fairview Inc. and the other companies
named therein, as filed in the Ontario Court of
Justice (General Division) February 8, 1995, as
amended March 20, 1995, April 18, 1995, April 20,
1995, June 28, 1995 and July 20, 1995
2
<PAGE>
as sanctioned by the Ontario Court of Justice (General
Division) by order dated May 17, 1995 and as amended
thereafter in accordance with its terms,
(f) "Common Shares" means common shares in the capital of
the Corporation;
(g) "control" means the possession, directly or
indirectly, of the power to direct or cause the
direction of the management or policies of a Person,
whether through the ownership of voting securities, by
contract or otherwise, and "controlling" and
"controlled" shall have meanings correlative thereto;
and, in the case of a limited partnership, it shall be
deemed to be controlled by its general partner;
(h) "Corporation" means Cadillac Fairview Corporation, a
corporation incorporated under the laws of the
Province of Ontario or any successor thereof;
(i) "First Elected Term" has the meaning ascribed thereto
in section 3.4;
(j) "First Meeting" means the first meeting or written
resolution of shareholders of the Corporation at or
pursuant to which directors are elected to the Board
of Directors as provided for in section 3.1 to replace
the first directors of the Corporation or, if the
Board Of Directors provided for in section 3.1 is
constituted by filling vacancies resulting from the
resignation of each of the first directors and the
appointment in their place of directors in accordance
with section 3.1, the meeting or written resolution of
directors at or pursuant to which such directors are
appointed to replace the first directors;
(k) "Independent Director" means an individual nominated
for election to the Board of Directors pursuant to
section 3.1(e) or appointed to fill a vacancy in the
Board of Directors pursuant to section 3.2, provided
that such individual is not disqualified from acting
under applicable law and is qualified under the
Corporation's by-laws and is acceptable to Blackstone,
Teachers and Whitehall, each acting reasonably, and
is:
(A) qualified by skill, knowledge and experience to
serve as a director of a real estate company; and
(B) free from any:
(i) material personal direct or indirect
ownership interest in; and
(ii) direct or indirect business or other
relationship (including, without limitation,
any employment relationship, but excluding
any business dealings which are not material
or which occurred more than three years
before) with;
any of:
3
<PAGE>
(1) the Corporation;
(2) any shareholder of the Corporation
holding more than (x) 1% of the Common
Shares or (y) if each of Blackstone,
Teachers and Whitehall consents in
writing, 3% of the Common Shares (and
any such interest or relationship shall
be fully disclosed in writing to each
of the Corporation, Teachers,
Blackstone and Whitehall at the time of
the nomination of any such nominee); or
(3) any Affiliate or associate (as defined
in the Act) of the Corporation or of
any shareholder referred to in clause
(2) above;
(l) "National Exchange" means a national securities
exchange (which may include NASDAQ) in Canada or the
United States;
(m) "Person" includes an individual, a firm, a
corporation, a syndicate, a partnership, a limited
partnership, a trust, an association, a joint venture,
an incorporated organization, a government, a
governmental authority or any other entity;
(n) "Public Offering" means the offering or sale of Common
Shares of the Corporation pursuant to a prospectus in
Canada or a registration statement effective under the
United States Securities Act of 1933, as amended, in
the United States or the listing of Common Shares on a
National Exchange:
(o) "Shareholders" means, collectively, Blackstone,
Teachers, Whitehall and any other Person who shall
acquire an interest in the Common Shares currently
held by a Shareholder and who agrees in writing or is
deemed hereunder to be bound by the terms and
conditions of this Agreement pursuant to section 4.2
or 4.3 so long as such Person continues to have an
interest in Common Shares; and "Shareholder" means any
one of the Shareholders for the time being;
(p) "Subordinated Debt Steering Committee" means the
steering committee representing, in connection with
the Cadillac Fairview Plan, the holders of the
debentures designated as "Series A Subordinated
Debentures Due 2012" and as "Series B Subordinated
Debentures Due 2012", issued by Cadillac Fairview Inc.
pursuant to a trust indenture dated October 31,1987
between Cadillac Fairview Inc. and The Royal Trust
Company and maturing October 31, 2012; and
(q) "Syndicated Creditors" means those Syndicated
Creditors (as such term is defined in the Cadillac
Fairview Plan) who did not have claims against
Cadillac Fairview Inc. or the other companies named in
the Cadillac Fairview Plan in other creditor classes
and who will receive Common Shares of the Corporation
in respect of
4
<PAGE>
their syndicated debt claims under the Cadillac
Fairview Plan (other than Blackstone, Teachers and
Whitehall).
1.2 Gender/Numbers
Words importing the singular number only shall include
the plural and vice versa and words importing the use of any
gender shall include all genders.
1.3 Headings
The Article and section headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
1.4 Proper Law
This Agreement and all documents ancillary hereto
shall be governed by and interpreted in accordance with the laws
of the Province of Ontario and the federal laws of Canada
applicable therein. Each of the parties hereby irrevocably agrees
to attorn to the non-exclusive jurisdiction of the courts of the
Province of Ontario with respect to this Agreement.
1.5 Business Days
If any act is required hereunder to be done, any
notice is required hereunder to be given or any period of time is
to expire hereunder on any day that is not a Business Day, such
act shall be required to be done or notice shall be required to
be given or time shall expire on the next succeeding Business
Day.
1.6 Reclassification of Shares
The provisions of this Agreement shall apply, mutatis
mutandis, to any shares or securities of any nature into which
the Common Shares or any of them may be converted, exchanged,
reclassified, redivided, redesignated, subdivided or
consolidated, to any shares or securities of any nature that are
received by a Shareholder as a stock dividend or distribution
payable in shares, securities, warrants, rights or options of any
nature of the Corporation, to any shares, securities, warrants,
rights or options of any nature of the Corporation or any
successor, continuing company or corporation of the Corporation
that may be received by a Shareholder on a reorganization,
amalgamation, arrangement, consolidation or merger, statutory or
otherwise, and to any shares, securities, warrants, rights or
options hereafter issued or allotted by the Corporation to a
Shareholder, all of which shares, securities, warrants, rights or
options shall be deemed to be Common Shares for all purposes of
this Agreement.
5
[<PAGE>
1.7 Blackstone to Act as a Single Person
Each of BRE/CF Equity Acquisition L.P., Blackstone
Real Estate Partners II L.P., Blackstone Real Estate Partners IV
L.P., Blackstone RE Capital Partners II L.P. and Blackstone CF
Equity Acquisition L.P. hereby acknowledges that they are under
common control. Each of them hereby appoints BREA as its sole and
exclusive agent, attorney and representative for all matters
relating to or arising under this Agreement and agrees that BREA
may act on its behalf in respect of all matters arising hereunder
and that all other parties hereto and the Corporation shall be
entitled to rely on all acts, matters, documents, proxies,
agreements and instruments of BREA as conclusively binding on
each of the entities constituting Blackstone with respect
thereto. Blackstone may appoint a successor agent to replace BREA
by written notice to the other parties. BREA hereby agrees to act
as agent for and on behalf of each of the entities constituting
Blackstone.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties
Each party hereto hereby represents and warrants to
each of the other parties as follows and acknowledges that such
other parties are relying upon such representations and
warranties in connection with the entering into of this
Agreement:
(a) the party has all necessary power and authority to
enter into this Agreement and perform its obligations
hereunder;
(b) all necessary action has been taken by the party to
authorize the execution and delivery of this Agreement
by it and the performance by it of its obligations
hereunder, and this Agreement has been duly executed
and delivered by the party and constitutes a legal,
valid and binding obligation of the party, enforceable
against it in accordance with its terms; and
(c) neither the execution and delivery of this Agreement
by the party nor the performance by it of its
obligations hereunder will conflict with or result in
the violation of any of the terms and provisions of
the constating documents or by-laws of the party or of
any agreement, obligation, contract, commitment, law
or regulation to which it is a party or by which it is
bound.
ARTICLE III
BOARD OF DIRECTORS OF THE CORPORATION
6
<PAGE>
3.1 Nomination of Directors
At all times while this Agreement is in effect, the
Shareholders shall vote their Common Shares and use their
reasonable efforts to cause the following to occur:
(a) the Board of Directors shall consist of nine (9)
directors;
(b) subject to sections 3.4 and 3.5, for so long as
Whitehall is a Shareholder, Whitehall shall be
entitled to nominate for election to the Board of
Directors from time to time three (3) directors (who
need not be "resident Canadians" within the meaning of
the Act);
(c) subject to sections 3.4 and 3.5, for so long as
Teachers is a Shareholder, Teachers shall be entitled
to nominate for election to the Board of Directors
from time to time two (2) directors;
(d) subject to sections 3.4 and 3.5, for so long as
Blackstone is a Shareholder, Blackstone shall be
entitled to nominate for election to the Board of
Directors from time to time one (1) director (who need
not be a "resident Canadian" within the meaning of the
Act);
(e) at the First Meeting, the Subordinated Debt Steering
Committee and the Syndicated Creditors shall each be
entitled to nominate for election to the Board of
Directors one (1) director, who shall in each case be
an Independent Director. The Shareholders shall be
entitled to rely on Bruce Karsh and The Toronto-
Dominion Bank to identify the Independent Directors
nominated by the Subordinated Debt Steering Committee
and the Syndicated Creditors, respectively. The
parties agree to the appointment of Russell S. Bernard
and Robert E. Bellamy as Independent Directors;
(f) the chief executive officer of the Corporation from
time to time shall be nominated by the Board of
Directors and elected a director of the Corporation
(and, for greater certainty, shall not be one of the
nominees referred to in sections 3.1(b), (c), (d) or
(e) above); and
(g) subject to applicable law, any director designated
hereunder, shall be removed from the Board of
Directors, whether or not for cause, at the written
request of the Person or Persons who previously
designated such director; and
(h) subject to applicable law, the parties will not vote
their Common Shares to remove any director appointed
pursuant to this Agreement except for cause.
7
<PAGE>
3.2 Filling of Vacancies
(a) If a vacancy in the Board of Directors arises, and the
vacating director was a nominee of one of the Shareholders
referred to in sections 3.1(b), (c) or (d), the Shareholder who
nominated such vacating director shall be entitled to nominate an
individual to be appointed by the Board of Directors as a
director to replace such vacating director, subject to and in
accordance with the provisions of section 3.1.
(b) If a vacancy in the Board of Directors arises, and the
vacating director was an Independent Director appointed pursuant
to section 3.1(e) or a successor thereof, the Board of Directors
shall appoint a director to replace such vacating director, who
shall be an Independent Director. Notwithstanding the preceding
sentence if, during the First Elected Term, there is a vacancy
created by the resignation of an Independent Director, such
resigning director may nominate an Independent Director or, in
the event of the death or disability of an Independent Director,
the other Independent Director may nominate an Independent
Director and, in either such case, such nominee shall be
appointed to till the vacancy if he or she is acceptable to each
of Whitehall, Blackstone and Teachers, acting reasonably.
(c) The parties agree to use their reasonable efforts
(including by exercising voting rights) to cause any such vacancy
to be filled in accordance with this section 3.2 as soon as
practicable after it arises and to use their reasonable efforts
to cause any director nominated by them to vote to fill the
vacancies in such manner, provided that nothing herein shall in
any way be interpreted to cause any director to fail to fulfill
his fiduciary duties to the Corporation.
3.3 Initial Nominees
The initial nominees of Blackstone; Teachers and
Whitehall shall be:
Name Nominee of
---- ----------
Thomas Saylak Blackstone
Morton Gross Teachers
Brian Muzyk Teachers
Daniel Neidich Whitehall
Ralph Rosenberg Whitehall
John P. Curtin Whitehall
3.4 First Elected Term
(a) As soon as possible after the execution of this
Agreement, the First Meeting shall be held at which directors of
the Corporation shall be elected in accordance with the
provisions of section 3.1. The directors to be elected at the
First Meeting shall be elected for a term (the "First Elected
Term") expiring on July 31, 1998.
8
<PAGE>
(b) If the Corporation proposes to effect a Public Offering
prior to July 31, 1998 and if the underwriters, in good faith,
advise the Corporation and the Shareholders that the then current
composition of the Board of Directors will likely have a material
adverse effect on the pricing or number of the Common Shares to
be sold pursuant to the Public Offering, then the Shareholders
will consider, in good faith, altering the composition of the
Board of Directors and modifying the terms of this Agreement in a
manner consistent with the recommendations of the underwriters as
well as the intent of this Agreement. The implementation will be
conditional upon completion of the Public Offering. Nothing in
this paragraph 3.4(b) shall impose any obligations or liabilities
on the parties or shall result in any fiduciary duties being
imposed or implied; this paragraph is intended merely to reflect
an understanding that the parties will consider the implications
of this Agreement on the likely success of an underwriting.
(c) Following the expiry of the First Elected Term,
directors of the Corporation shall be elected in accordance with
the provisions of section 3.1 to hold office until the next
annual meeting of shareholders of the Corporation or until their
successors are elected or appointed.
3.5 Reduction of Nomination Rights
(a) If prior to July 31, 1998, any of Whitehall, Teachers
or Blackstone, together with its Affiliates, ceases to hold at
least 3% of the Common Shares outstanding as of the date hereof,
then it shall cease to be entitled to nominate any directors.
(b) If, after July 31, 1998, any of Whitehall, Teachers or
Blackstone ceases to hold the percentage of Common Shares
referred to below, then its rights to nominate directors pursuant
to section 3.1 of to fill vacancies pursuant to section 3.2 shall
be modified as follows:
(i) if Whitehall together with its Affiliates
continues to hold at least 15% of the Common
Shares outstanding as of the date hereof, then it
shall continue to be entitled to nominate three
(3) directors;
(ii) if either of Whitehall or Teachers together with
their respective Affiliates continues to hold at
least 10% of the Common Shares outstanding as of
the date hereof, then, subject to clause (i) in
the case of Whitehall, it shall continue to be
entitled to nominate two (2) directors;
(iii) if any Shareholder together with its Affiliates
continues to hold at least 3% of the Common
Shares outstanding as of the date hereof, then
subject to clauses (i) and (ii) in the case of
Whitehall or Teachers, it shall continue to be
entitled to nominate one (1) director; and
(iv) if any Shareholder together with its Affiliates
shall cease to hold at least 3% of the Common
Shares outstanding as of the date hereof, then it
shall cease to be entitled to nominate any
directors.
9
<PAGE>
(c) if any Shareholder ceases to be entitled to nominate
that number of directors which it has nominated to the Board of
Directors and who continue to act as directors, then, at the
request of any of Blackstone, Teachers or Whitehall, such
Shareholder shall cause one or more of its nominees to resign
from the Board of Directors so that the number of remaining
nominees is equal to its entitlement. If a Shareholder fails to
cause such resignation within 21 days of such request, then the
Shareholders shall vote their Common Shares to cause the removal
of such nominee or nominees. Subject to paragraph 3.5(d), any
vacancy created by the resignation or removal of a director
pursuant to this section 3.5 shall be filled with an Independent
Director nominated by the Board of Directors.
(d) If Blackstone ceases to have a nominee on the Board of
Directors as a result of the provisions in paragraphs 3.5(a) or
3.5(b)(iv) and if at such time Teachers and its Affiliates hold
at least as many Common Shares as Whitehall and its Affiliates,
then Teachers shall be entitled to increase the number of
directors which it is otherwise entitled to nominate by one (1).
(e) The provisions of this section 3.5 shall override any
provisions of sections 3.1, 3.2 and 3.6 to the contrary.
3.6 Exercise of Votes
Each of the Shareholders agrees that it will at all
times during the term of this Agreement: (i) exercise any and all
voting rights attaching to the Common Shares owned by it and to
otherwise exercise its influence and to do or cause to be done
all such other acts, matters and things as may from time to time
be necessary or conducive to the carrying out of the terms and
intent of this Agreement, including, without limitation but
subject to section 3.5, voting for the election to the Board of
Directors of the nominees nominated in accordance with section
3.1 and for the terms specified in section 3.4; (ii) take no
action (including by nominating any person that would prevent the
election of non-resident Canadians as contemplated by sections
3.1(b) and (d)) which would constitute a contravention of any of
the terms and provisions hereof; and (iii) take no action during
the First Elected Term to change the articles or by-laws of the
Corporation in a manner which would result in the Corporation no
longer being required to nominate and elect two Independent
Directors.
ARTICLE IV
TRANSFERS OF COMMON SHARES
4.1 No Restrictions
Subject to sections 4.2 and 4.3, nothing in this
Agreement shall restrict a Shareholder in its ability to sell,
assign, transfer or otherwise dispose of its interest in any
Common Shares; provided that this in no way limits any
Shareholder's obligations under applicable securities law.
10
<PAGE>
4.2 Affiliate Transferees Bound
As a condition to any sale, assignment, transfer or
other disposition by a Shareholder of its interest in any Common
Shares to an Affiliate (the "Affiliate Transferee"), the
Affiliate Transferee shall agree in writing to be bound, and
shall be deemed to be bound, by the terms and conditions of this
Agreement. In the event that a Shareholder who has a right to
nominate directors pursuant to section 3.1 transfers all of its
interest in the Common Shares held by it to an Affiliate
Transferee, the Affiliate Transferee shall thereafter be deemed
to have such right to nominate directors pursuant to section 3.1
and shall be entitled to exercise such right as if such right
were originally granted to the Affiliate Transferee hereunder.
4.3 Third Party Transferees May Be Bound
(a) A Shareholder (the "Transferor") may, subject to
paragraph (b), but shall not be obliged to, require, as a
condition to any sale, assignment, transfer or other disposition
by it of its interest in any Common Shares to a third party (the
"Third Party Transferee"), that the Third Party Transferee agree
in writing to be bound by the terms and conditions of this
Agreement. Upon the execution by a Third Party Transferee of an
agreement to be bound by the terms and conditions hereof, the
Third Party Transferee shall be bound by this Agreement and shall
be deemed to be a Shareholder for the purposes hereof; provided
that, notwithstanding any other provision hereof, a Third Party
Transferee of Common Shares from a Transferor who has a right to
nominate directors pursuant to Article III shall not be entitled
to such right as the transferee of such Common Shares unless the
assignment of such right to the Third Party Transferee is
specifically provided by the Transferor to the Third Party
Transferee in writing and is consented to by each Shareholder who
is at such time the holder of not less than 7% of the then
outstanding Common Shares.
(b) If any Transferee enters into an agreement with a
Transferor pursuant to which the Transferee agrees to vote any or
all of the Common Shares transferred to it in favour of the
nominees of the Transferor to the Board of Directors, then the
Transferor shall require the Third Party Transferee to agree in
writing with or in favour of the remaining parties hereto to be
bound by the terms and conditions of this Agreement, provided
that the Transferee need only agree to be bound by this Agreement
until July 31, 1998.
ARTICLE V
NO AMENDMENT TO ARTICLES OR BY-LAWS
5.1 No Amendments to Articles or By-laws
The parties agree that unless and until a Public
Offering is completed, they shall use their reasonable efforts to
ensure that no amendment shall be made to the articles or by-laws
of the Corporation that would impose any share transfer
restrictions that would (if not removed) prevent listing of the
Common Shares (or of any warrants to purchase Common Shares) on
at
11
<PAGE>
least one National Exchange or that would otherwise be
inconsistent with the provisions or intent of this Agreement.
ARTICLE VI
PRE-EMPTIVE RIGHT
6.1 Pre-emptive Right
(a) If the Corporation proposes to issue any securities of
the Corporation to any one or more of Blackstone, Whitehall or
Teachers (any one or more of whom are referred to in this section
as the "Purchaser") other than pursuant to a Public Offering, the
Shareholders shall use their reasonable best efforts to make such
securities available on a pro rata basis to Blackstone, Whitehall
or Teachers, as the case may be, on the same terms and
conditions.
(b) If the Corporation does not offer such securities to
each of Blackstone, Whitehall and Teachers on a pro rata basis,
then any Purchaser shall offer to sell a portion of any
securities acquired by it to those of Blackstone, Whitehall or
Teachers who have not had the opportunity to purchase their pro
rata share of such securities from the Corporation (the
"Offerees") so that after such sale each of the Offerees that
wishes to acquire such securities shall have had the opportunity
to purchase its pro rata share of the securities issued by the
Corporation either directly from the Corporation or failing
availability from the Corporation, from the Purchaser. Any offer
to sell by a Purchaser shall be on the same terms and conditions
as the Purchaser acquired such offered securities from the
Corporation and shall be open for acceptance for at least 21
days, provided that if the offer is made at least 10 days before
the securities are issued, then the offer will expire on the date
of issuance thereof or such later date as may be specified by the
Purchaser in the offer. The offer can be made prior to the
issuance of the securities by the Corporation or, in any event,
within 10 days thereafter. To the extent possible, the Purchaser
shall sell, transfer and assign to any purchasing Offeree all of
the rights associated with the securities so purchased including,
without limitation, any registration rights associated with such
securities. Notwithstanding anything contained herein, no party
shall be obligated to sell any securities to any other party if
such sale would result in a material tax liability to the seller
or the Shareholders or impose any liability or obligation
whatsoever on the seller; for the purposes of this paragraph,
materiality shall be determined having regard for the fact that
the seller of the securities will obtain no benefit whatsoever
from the sale of the securities and is effecting such transaction
solely as an accommodation to the other parties.
(c) For the purposes of this section 6.1, the pro rata
share of any party of any distribution will be determined by
reference to the number of Common shares held by it and its
Affiliates at the date of such offering.
12
<PAGE>
ARTICLE VII
GENERAL
7.1 Term and Termination
This Agreement shall come into force and effect as at
and from the date hereof and shall continue in force until the
earliest of:
(a) the date upon which none of Blackstone, Teachers or
Whitehall owns 5% or more of the then outstanding
Common Shares of the Corporation;
(b) the date upon which this Agreement is terminated by
written agreement among each Shareholder who is at
such time the holder of not less than 7% of the then
outstanding Common Shares;
(c) the fifth anniversary of the date of this Agreement;
and
(d) the date upon which this Agreement is terminated by
written agreement among each of the parties hereto.
7.2 Notice
Any demand, notice or other document required or
permitted to be given hereunder shall be in writing and shall be
given by delivery or by telecopy to the respective parties as
follows:
(a) if to Blackstone:
c/o BREA L.L.C.
118 North Bedford Rd., Suite 300
Mount Kisco, NY
10549
Attention: Thomas J. Saylak
Telecopier: (914) 241-3786
(b) if to Teachers:
Ontario Teachers' Pension Plan Board
5650 Yonge Street
North York, Ontario
M2M 4H5
Attention: Brian Muzyk
Telecopier: (416) 730-5374
13
<PAGE>
(c) if to Whitehall:
WHCF Real Estate Limited Partnership
c/o Goldman, Sachs & Co.
85 Broad Street
New York, NY
10004
Attention: Ralph Rosenberg
Telecopier: (212) 902-3000
Any such demand, notice or other document, if delivered
personally, shall be deemed to have been received by and given on
the date of delivery (provided that such day is a Business Day
and, if not on the next following Business Day) and, if sent by
telecopier, shall be deemed to have been received by and given on
the date sent (provided that it is sent prior to 2:00 p.m. (local
time of the recipient) on a Business Day and, if not, on the next
following Business Day). Any party may at any time give notice to
the other parties of any change of address in accordance with the
foregoing provisions hereof.
7.3 Entire Agreement
This Agreement sets forth the entire agreement among
the parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and
discussions of the parties, whether oral or written, and there
are no warranties, representations or other agreements between
all of the parties hereto in connection with the subject matter
hereof except as specifically set forth herein.
7.4 Amendment
No supplement, modification or waiver of this Agreement
shall be binding unless executed in writing by all of the parties
hereto. Any amendment to paragraphs 3.1(e), 3.1(h), 3.2(b) or 3.6
(iii) shall not be effective unless approved in writing by the
Independent Directors.
7.5 Waiver
No waiver of any of the provisions of this Agreement
shall be deemed to be or shall constitute a waiver of any other
provision, nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.
7.6 Benefit of the Agreement
This Agreement shall enure to the benefit of and be
binding upon the parties hereto and their respective successors
and permitted assigns. No Shareholder shall assign the rights or
benefits under this Agreement without the prior written consent
of the other Shareholders except as specifically provided for
herein.
14
<PAGE>
7.7 Counterparts
This Agreement may be executed in any number of
counterparts by any one or more of the parties to be bound
hereby. Each executed counterpart shall be deemed to be an
original and such counterparts shall together constitute one and
the same agreement.
7.8 Severability
The invalidity or unenforceability of any provision or
part of any provision of this Agreement shall not affect the
validity or enforceability of any other provision or part
thereof, and any such invalid or unenforceable provision or part
thereof shall be deemed to be separate, severable and distinct,
and no provision or part thereof shall be deemed dependent upon
any other provision or part thereof unless expressly provided for
herein.
7.9 No Partnership
Nothing contained in this Agreement shall be deemed in
any way or for any purpose to constitute any party a partner or
agent or legal representative of any other party in the conduct
of any business or otherwise, or a member of a joint venture or
joint enterprise with any other party, or to create any fiduciary
relationship among them, except as provided in section 1.7.
IN WITNESS WHEREOF the parties hereto have executed
this Agreement.
Number of Shares BRE/CF EQUITY ACQUISITION L.P.
Held on the date hereof
4,455,689 by_______________________________
BLACKSTONE REAL ESTATE
PARTNERS II L.P.
126,500 by_______________________________
BLACKSTONE REAL ESTATE
PARTNERS IV L.P.
37,950 by_______________________________
BLACKSTONE RE CAPITAL PARTNERS
II L.P.
15
<PAGE>
23,909 by_______________________________
BLACKSTONE CF EQUITY
ACQUISITION L.P.
1,605,952 by_______________________________
ONTARIO TEACHERS' PENSION PLAN
BOARD
12,500,000 by_______________________________
WHCF REAL ESTATE LIMITED
PARTNERSHIP
by its General Partner,
Whitehall Street Real Estate
Limited Partnership V
13,735,471 by_______________________________
by its General Partner,
WH Advisors, L.P. V
by_______________________________
by its General Partner,
WH Advisors, Inc. V
by_______________________________
BREA L.L.C. hereby accepts its appointment as agent
pursuant to section 1.7.
BREA L.L.C.
by_______________________________
16
<PAGE>
AMENDMENT TO SHAREHOLDERS' AGREEMENT
MEMORANDUM OF AGREEMENT made as of the 26th day of August, 1997.
B E T W E E N:
BRE/CF EQUITY ACQUISITION L.P.,
BLACKSTONE REAL ESTATE
PARTNERS II L.P., BLACKSTONE REAL
ESTATE PARTNERS IV L.P., and
BLACKSTONE RE CAPITAL PARTNERS II L.P.,
limited partnerships constituted under the laws of
the Stare of Delaware, and BLACKSTONE CF EQUITY
ACQUISITION L.P., a limited partnership
constituted under the laws of the Cayman Islands,
(collectively hereinafter referred to as "Blackstone"),
OF THE FIRST PART,
- and -
ONTARIO TEACHERS' PENSION PLAN BOARD,
a corporation continued under
the Teachers' Pension Act (Ontario),
(hereinafter referred to as "Teachers"),
OF THE SECOND PART,
- and -
WHCF REAL ESTATE LIMITED PARTNERSHIP,
a limited partnership constituted under
the laws of the State of Delaware
(hereinafter referred to as "Whitehall"),
OF THE THIRD PART.
WHEREAS the parties entered into a shareholders'
agreement dated as of July 31, 1995 (the "Shareholders'
Agreement") relating to Cadillac Fairview Corporation (the
"Corporation") and their respective interests therein as
shareholders;
<PAGE>
AND WHEREAS the Corporation is proposing to make a
Public Offering of its Common Shares pursuant to a prospectus
which will be filed with securities commissions in Canada and
possibly with the Securities and Exchange Commission in the
United States;
AND WHEREAS the parties wish to amend the
Shareholders' Agreement, which amendment will be effective upon
the earlier of (i) the issuance of Common Shares of the
Corporation to the public pursuant to the prospectus offering or
(ii) immediately prior to a shareholders' meeting at which the
amendments to the Corporation's articles and by-laws described in
paragraph 2 hereof are to be considered;
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in
consideration of the respective covenants and agreements of the
parties contained herein and for other good and valuable
consideration (the receipt and sufficiency of which are hereby
acknowledged by each of the parties hereto), it is hereby agreed
as follows:
1. Interpretation. Where used herein, unless there is something
in the context or the subject matter inconsistent therewith, the
terms and words which are defined in the Shareholders' Agreement
shall have the same meanings in this agreement.
2. Amendment to the Corporation's Articles and By-Laws. At any
meeting called by the Board of Directors of the Corporation for
such purpose, the parties shall vote their Common Shares in favour
of amendments to the articles and by-laws of the Corporation
which will provide for the following:
(a) the Corporation shall have a minimum of seven and a
maximum of 13 Directors;
(b) an amendment to delete parts (1) and (2) of section 10
of the Corporation's articles;
(c) an amendment to the Corporation's by-laws to delete
paragraph 20 of By-law No. 1 and the definitions of
"First Meeting", "Independent Director", "Nominators"
and "Plan"; and
(d) to amend By-law No. 1 of the Corporation to provide
that directors shall be elected for a term of one year
or until their successors are elected or appointed.
The covenant in this section is intended to benefit the
Corporation and may be specifically enforced by the Corporation.
3. Independent Directors. Paragraph 3.1(e) of the Shareholders'
Agreement shall be deleted and the following shall be substituted
therefor:
"(e) At the first meeting of shareholders after the date of
this agreement, the Board of Directors shall be
entitled to nominate not less than seven directors who
are, in the opinion of the Board of Directors,
independent of Blackstone, Teachers and
2
<PAGE>
Whitehall, and any Affiliate or associate thereof.
Such directors may include Russel S. Bernard and
Robert E. Bellamy and shall include Bruce Duncan."
4. Vacancies. Paragraph 3.2(b) of the Shareholders' Agreement
is deleted and the following is substituted therefor;
"(b) if a vacancy in the Board of Directors arises and the
vacating director was appointed pursuant to section
3.1(e) or any successor of such a director, the Board
of Directors shall appoint a director to replace such
vacating director."
5. Deletion of Portions of Shareholders' Agreement. Sections
3.1(a), 3.4, 3.6(iii), 5.1 and 6.1 of the Shareholders' Agreement
are hereby deleted.
6. Balance of Shareholders' Agreement. In all other respects,
the Shareholders' Agreement shall remain in full force and effect
unamended.
7. Counterparts. This Agreement may be executed in counterpart
and when each of the parties has executed and delivered a
counterpart to the Corporation shall constitute a binding
agreement.
IN WITNESS WHEREOF the parties hereto have executed
this amending agreement.
BRE/CF EQUITY ACQUISITION L.P.
by_______________________________
BLACKSTONE REAL ESTATE
PARTNERS II L.P.
by_______________________________
BLACKSTONE REAL ESTATE
PARTNERS IV L.P.
by_______________________________
BLACKSTONE RE CAPITAL
PARTNERS II L.P.
3
<PAGE>
by_______________________________
BLACKSTONE CF EQUITY
ACQUISITION L.P.
by_______________________________
ONTARIO TEACHERS' PENSION PLAN
BOARD
by_______________________________
WHCF REAL ESTATE LIMITED
PARTNERSHIP
by its General Partner,
Whitehall Street Real Estate
Limited Partnership V
by_______________________________
by its General Partner,
WH Advisors, L.P. V
by_______________________________
by its General Partner,
WH Advisors, Inc. V
by_______________________________
Pursuant to section 7.4 of the Shareholders' Agreement, the
undersigned, being the Independent Directors of the Corporation,
hereby consent to the amendment of the Shareholders' Agreement in
the manner described above and to the corresponding amendments to
the Corporation's articles and by-laws.
____________________________ ____________________________
Russel S. Bernard Robert E. Bellamy
4
