As filed with the Securities and Exchange Commission on January 29, 1999
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) January 28, 1999
CAPITAL TRUST, INC.*
(Exact Name of Registrant as Specified in its Charter)
Maryland 1-8063 94-6181186 -------------------------------------------------------------------------------- (State or Other (Commission (I.R.S. Employer Jurisdiction of File Number) Identification incorporation) No.) 605 Third Avenue, 26th Floor New York, New York 10016 -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) (212) 655-0220 -------------------------------------------------------------------------------- (Registrant's Telephone Number, Including Area Code) |
* Capital Trust, Inc. is the successor to Capital Trust as discussed in the Explanatory Note hereto.
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EXPLANATORY NOTE
This Current Report on Form 8-K, dated January 28, 1999 (this "Form 8-K"), is being filed by Capital Trust, Inc., a Maryland corporation (the "Registrant"), as the successor to Capital Trust, a California business trust (the "Predecessor"), following consummation of the Mergers (as defined and described herein) which were undertaken to effect the reorganization of the Predecessor into a Maryland corporation. Prior to the Mergers, the Registrant had engaged in no activities other than those incident to the foregoing reorganization. Upon consummation of the Mergers, the entire class of Class A Common Stock (as defined herein) became registered under Section 12(b) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), in accordance with Rule 12g-3(a) thereunder. Such registration is implemented by the Commission's acceptance for filing on the date hereof this Form 8-K and the continuation of the Predecessor's file number (File No. 1-8063) pursuant to the telephonic interpretation of the staff of the Commission set forth on page 177 of the Division of Corporation Finance's Manual of Publicly-Available Telephone Interpretations (July 1997).
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ITEM 5. OTHER EVENTS
On January 28, 1999, pursuant to the terms of the agreement and plan of
merger, dated as of November 12, 1998 (the "Merger Agreement"), between the
Registrant, the Predecessor and Captrust Limited Partnership, a Maryland limited
partnership ("CTLP"), and the transactions contemplated thereby, (i) the
Predecessor merged with and into CTLP, with CTLP continuing as the surviving
entity, and CTLP merged with and into the Registrant, with the Registrant
continuing as the surviving corporation (the "Mergers"), (ii) each outstanding
class A common share of beneficial interest, par value $1.00 per share, and each
outstanding class A 9.5% cumulative convertible preferred share of beneficial
interest, par value $1.00 per share (the "Mergers") in the Company, was
converted into, respectively, one share of class A common stock, par value $.01
per share ("Class A Common Stock"), and one share of class A 9.5% cumulative
convertible preferred stock, par value $.01 per share ("Class A Preferred
Stock"), of the Registrant; and (iii) the Registrant assumed all outstanding
obligations to issue Class A Common Stock under the Plans (as defined and
described below). The consummation of the Mergers effected a reorganization of
the Predecessor from a California business trust into a Maryland corporation
("Reorganization"). A copy of the Merger Agreement is filed herewith as Exhibit
2.1. Copies of the charter and amended and restated bylaws of the Registrant
following consummation of the Mergers are filed herewith as Exhibits 3.1 and
3.2, respectively.
The Merger Agreement was approved by the shareholders of the Predecessor at its 1998 annual meeting of shareholders held on January 28, 1999 ("Annual Meeting") for which proxies were solicited pursuant to proxy material contained in the Registrant's Registration Statement on Form S-4 (File No. 333-526219), which was declared effective on December 24, 1998; such proxy material is deemed filed pursuant to Regulation 14A under the Exchange Act in accordance with Instruction E. to Form S-4.
At the Annual Meeting, the Predecessor's shareholders also approved the following plans: (i) the Capital Trust amended and restated 1997 long-term incentive share plan (the "Amended and Restated Incentive Plan"), (ii) the Capital Trust amended and restated 1997 non-employee trustee share plan (the "Amended and Restated Trustee Plan"), (iii) the Capital Trust 1998 employee share purchase plan, (iv) the Capital Trust 1998 non-employee share purchase plan, and (v) the Capital Trust share purchase loan plan (collectively, the "Plans"). Upon consummation of the Mergers, the Registrant assumed the Plans and all outstanding obligations to issue shares of Class A Common Stock thereunder. Shares of Class A Common Stock will now be used to fund the Plans. The Plans were amended effective as of January 28, 1999 to change all references to "Capital Trust" to "Capital Trust, Inc." and to make additional technical revisions that reflect the different capital and governance structure of the Registrant. Copies of the Plans as amended are filed herewith as Exhibits 10.1 to 10.5.
In addition, upon consummation of the Mergers, the Registrant also assumed all of the obligations of the Predecessor under the 8.25% step up convertible trust preferred securities issued pursuant to the declaration of trust, dated as of July 28, 1998, of CT Convertible Trust I, a
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Delaware statutory business trust, and the related 8.25% step up convertible junior subordinated debentures issued pursuant to the indenture, dated as of July 28, 1998, between the Predecessor and Wilmington Trust Company (the "Indenture"). A copy of the supplemental indenture with respect to the assumption by the Registrant of the Indenture, dated as of January 28, 1999, is filed hereto as Exhibit 4.2.
In addition, at the Annual Meeting, the shareholders of the Predecessor elected the ten incumbent members of the Predecessor's board of trustees who upon consummation of the Mergers became the board of directors of the Registrant.
ITEM 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit Number Description -------------- ----------- 2.1 Agreement and Plan of Merger, dated as of November 12, 1998, by and among Capital Trust, the Registrant and the Captrust Limited Partnership. 3.1 Charter of the Registrant (comprised of Articles of Amendment and Restatement of Charter and amendments thereof by Articles Supplementary with respect to Class A 9.5% Cumulative Convertible Prepared Stock and Articles Supplentary with respect to Class B 9.5% Cumulative Convertible Non-Voting Preferred Stock). 3.2 Amended and Restated Bylaws of the Registrant. 4.1 Articles Supplementary with respect to Class A 9.5% Cumulative Convertible Preferred Stock of the Registrant and Articles Supplementary with respect to Class B 9.5% Cumulative Convertible Non-Voting Preferred Stock of the Registrant (included in Exhibit 3.1). 4.2 Supplemental Indenture, dated as of January 28, 1999, between the Registrant and Wilmington Trust Company, as trustee. 10.1 Capital Trust, Inc. Amended and Restated 1997 Long-Term Incentive Stock Plan. 10.2 Capital Trust, Inc. Amended and Restated 1997 Non-Employee Trustee Stock Plan. 10.3 Capital Trust, Inc. 1998 Employee Stock Purchase Plan. 10.4 Capital Trust, Inc. 1998 Non-Employee Stock Purchase Plan. 10.5 Capital Trust, Inc. Stock Purchase Loan Plan. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CAPITAL TRUST, INC.
(Registrant)
Date: January 29, 1999 By: /s/ John R. Klopp --------------------------------------- Name: John R. Klopp Title: Vice Chairman, Chief Executive Officer |
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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement"), is made as of November 12, 1998, by and among Capital Trust, a California business trust (the "Company"), Captrust Limited Partnership, a Maryland limited partnership (the "Limited Partnership"), and Capital Trust, Inc., a Maryland corporation (the "New Company").
PRELIMINARY STATEMENT
The Board of Trustees of the Company has determined that it is advisable and in the best interest of the Company to reorganize from a business trust organized under the laws of the State of California into a corporation incorporated under the laws of the State of Maryland. In connection with the foregoing reorganization, the Company has formed the Limited Partnership and the New Company as direct or indirect wholly-owned subsidiaries of the Company. The parties hereto desire to effect the Mergers (as hereinafter defined) upon the terms and subject to the conditions set forth herein.
Accordingly, in consideration of these premises, the covenants and agreements made herein and for other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto adopt the plan of merger encompassed by this Agreement and agree as follows:
ARTICLE I
THE MERGERS; CLOSING; EFFECTIVE TIME
1.1. THE LIMITED PARTNERSHIP MERGER. Subject to the terms and conditions of this Agreement, at the Effective Time (as defined in Section 1.4), the Company shall be merged with and into the Limited Partnership and the separate existence of the Company shall thereupon cease (the "Limited Partnership Merger"). The Limited Partnership shall be the surviving entity in the Limited Partnership Merger (sometimes hereinafter referred to as the "Surviving Limited Partnership"), shall continue to be governed by the laws of the State of Maryland and the separate existence of the Limited Partnership with all its rights, privileges, immunities, powers and franchises shall continue unaffected by the Limited Partnership Merger.
The Limited Partnership Merger shall have the effects specified in the Maryland Revised Uniform Limited Partnership Act (the "MRULPA").
1.2. THE COMPANY MERGER. Subject to the terms and conditions of this Agreement, at the Effective Time (as defined in Section 1.4 hereof), the Surviving Limited
Partnership shall be merged with and into the New Company and the separate existence of the Surviving Limited Partnership shall thereupon cease (the "Company Merger" and, together with the Limited Partnership Merger, the "Mergers"). The New Company shall be the surviving entity in the Company Merger (sometimes hereinafter referred to as the "Surviving Corporation") and shall continue to be governed by the laws of the State of Maryland and the separate existence of the New Company with all its rights, privileges, immunities, powers and franchises shall continue unaffected by the Mergers.
The Company Merger shall have the effects specified in the Maryland General Corporation Law (the "MGCL").
The parties intend that the Mergers qualify as a reorganization under
Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended.
1.3. CLOSING. The closing of the Mergers (the "Closing") shall take place (i) at the offices of the New Company, 605 Third Avenue, 26th Floor, New York, New York 10016 at 10:00 a.m. local time on the first business day on which the last to be fulfilled or waived of the conditions set forth in Section 5.1 hereof shall be fulfilled or (ii) at such other place and time and/or on such other date as the Company, the Limited Partnership and the New Company may agree.
1.4. EFFECTIVE TIME. Following the fulfillment or waiver of the conditions set forth in Section 5.1 hereof, and provided that this Agreement has not been terminated or abandoned pursuant to Article VII hereof, the Company and the Limited Partnership will, at such time as they deem advisable, cause Articles of Merger (the "Partnership Articles of Merger") to be filed with the State Department of Assessments and Taxation of Maryland (the "SDAT") as provided in Section 10-208(d) of the MRULPA. Following the fulfillment or waiver of the conditions set forth in Section 5.1 hereof, provided that this Agreement shall not have been terminated or abandoned pursuant to Article VI hereof, the Surviving Limited Partnership and the New Company will, at such time as they deem advisable, cause Articles of Merger (the "Company Articles of Merger") to be filed with the SDAT as provided in Section 3-107 of the MGCL. The Mergers shall become effective upon the acceptance for record of the Partnership Articles of Merger and the Company Articles of Merger by the SDAT (the "Effective Time"). The parties hereto intend the Mergers to become effective simultaneously.
ARTICLE II
CERTIFICATE AND AGREEMENT OF LIMITED PARTNERSHIP
OF THE SURVIVING LIMITED PARTNERSHIP AND THE
CHARTER AND BYLAWS OF THE SURVIVING CORPORATION
2.1. SURVIVING LIMITED PARTNERSHIP. The certificate of limited partnership and agreement of limited partnership of the Limited Partnership in effect at the Effective Time
shall be the certificate of limited partnership and agreement of limited partnership of the Surviving Limited Partnership, until duly amended in accordance with the terms thereof and the MRULPA.
2.2. SURVIVING CORPORATION. The charter of the New Company, as in effect at the Effective Time, shall be amended by the Articles of Amendment and Restatement in the form attached hereto as Exhibit A, the Articles Supplementary with respect to New Class A Preferred Stock (as defined below), in the form attached hereto as Exhibit B, and the Articles Supplementary with respect to Class B 9.5% Cumulative Convertible Non-Voting Preferred Stock, par value $.01 per share, of New Company, in the form attached hereto as Exhibit C (collectively, the "Articles"), and the Articles shall be the charter of the Surviving Corporation, until duly amended in accordance with the MGCL. The Bylaws of the New Company, as in effect at the Effective Time, shall be amended and restated in full, as set forth in the amended and restated Bylaws of the New Company attached hereto as Exhibit D (the "Amended and Restated Bylaws"), and said Amended and Restated Bylaws, as so amended and restated, shall be the Bylaws of the Surviving Corporation, until duly amended in accordance with the MGCL.
ARTICLE III
DIRECTORS AND EXECUTIVE OFFICERS AND
COMMITTEES OF THE BOARD OF DIRECTORS
OF THE SURVIVING CORPORATION
3.1. DIRECTORS AND OFFICERS. At or before the Effective Time, the following persons shall be elected or appointed as the executive officers and directors of the Surviving Corporation and such officers and directors shall thereafter serve until their successors have been duly elected and qualified or until their earlier death, resignation or removal in accordance with the charter of the Surviving Corporation:
Name Office ---- ------ Samuel Zell Chairman of the Board and Director Jeffrey A. Altman Director Martin L. Edelman Director Gary R. Garrabrant Director Thomas E. Dobrowski Director Steven Roth Director Craig M. Hatkoff Vice Chairman and Director John R. Klopp Vice Chairman, Chief Executive Officer and Director Stephen D. Plavin Chief Operating Officer Sheli Z. Rosenberg Director Lynne B. Sagalyn Director |
Name Office ---- ------ Donald J. Meyer Managing Director and Chief Investment Officer Edward L. Shugrue III Managing Director, Chief Financial Officer and Assistant Secretary |
3.2. COMMITTEES OF THE BOARD OF DIRECTORS. At or before the Effective Time, the board of directors of the Surviving Corporation shall create and constitute committees with the same names, memberships and functions and powers delegated to them as the committees of the Board of Trustees of the Company in existence at the Effective time as set forth in the minutes of the Board of Trustees of the Company. Each member of such committee shall thereafter serve until his successor shall have been duly appointed in accordance with the Bylaws of the Surviving Corporation.
ARTICLE IV
EFFECT OF THE MERGER
ON SHARES OF BENEFICIAL INTEREST;
EXCHANGE OF CERTIFICATES
4.1. EFFECT ON STOCK. At the Effective Time, by virtue of the Mergers and without any action on the part of the holders thereof:
(a) Each class A common share of beneficial interest, $1.00 par value, in the Company (the "Class A Common Shares"), issued and outstanding immediately prior to the Effective Time shall be converted into, and shall become, one validly issued, fully paid and nonassessable share of class A common stock, par value $.01 per share, of the New Company ("New Class A Common Stock"). At the Effective Time, all Class A Common Shares shall no longer be outstanding and shall be canceled and retired and shall cease to exist.
(b) Each class A 9.5% cumulative convertible share of beneficial interest, $1.00 par value, in the Company (the "Class A Preferred Shares"), issued and outstanding immediately prior to the Effective Time shall be converted into, and shall become, one share of class A 9.5% cumulative convertible preferred stock, par value $.01 per share, of the New Company (the "New Class A Preferred Stock"). At the Effective Time, all Class A Preferred Shares shall no longer be outstanding and shall be canceled and retired and shall cease to exist.
(c) Each Class A Common Share and Class A Preferred Share issued and held in the Company's treasury at the Effective Time shall, by virtue of the Mergers and without any action on the part of the holder thereof, cease to be outstanding, shall be canceled and retired without payment of any consideration therefor and shall cease to exist.
(d) At the Effective Time, each partnership interest in the Limited Partnership existing immediately prior to the Effective Time shall, by virtue of the Mergers and without any action on the part of the Limited Partnership or the holder of such interests, be canceled and retired without payment of any consideration therefor.
(e) At the Effective Time, each share of common stock, par value $.01 per share, of the New Company, issued and outstanding immediately prior to the Effective Time shall, by virtue of the Mergers and without any action on the part of the New Company or the holder thereof, be canceled and retired without payment of any consideration therefor, and such shares shall have the status of unauthorized and unissued shares of New Class A Common Stock.
4.2. STOCK CERTIFICATES. From and after the Effective Time, (i) each certificate which immediately prior to the Effective Time represented Class A Common Shares (each, a "Common Certificate") shall be deemed for all purposes to represent ownership of an equal number of, shares of New Class A Common Stock, and (ii) each certificate which immediately prior to the Effective Time represented Class A Preferred Shares (each a "Preferred Certificate," and together with the Common Certificate, the "Certificates") shall be deemed for all purposes to represent ownership of an equal number of, shares of New Class A Preferred Stock. The registered owner on the books and records of the Company or its transfer agent of any Certificate shall, until such Certificate shall have been surrendered for transfer or otherwise accounted for to the Surviving Corporation or its transfer agent, have and be entitled to exercise any voting or other rights with respect to and to receive any dividends and other distributions upon the shares of New Class A Common Stock or the New Class A Preferred Stock, as the case may be, represented by any such outstanding Certificate as provided above. Nothing contained herein shall be deemed to require the holder of any Class A Common Shares or Class A Preferred Shares, as the case may be, to surrender any Certificate(s) representing such shares in exchange for a certificate or certificates representing shares of New Class A Common Stock or the New Class A Preferred Stock.
4.3. OPTIONS. Each unit providing the right to acquire or an option to purchase or otherwise acquire Class A Common Shares granted under the Company's 1997 Long-Term Incentive Share Plan and 1997 Non-Employee Trustee Share Plan (collectively, the "Plans"), which is outstanding immediately prior to the Effective Time shall, by virtue of the Mergers and without any action on the part of the holder of such option or unit, be converted into and become a unit providing the right to acquire or an option to purchase or otherwise acquire the same number of shares of New Class A Common Stock, upon the same terms and subject to the same conditions as set forth in the Plans as in effect at the Effective Time. The same number of shares of New Class A Common Stock shall be reserved for purposes of the outstanding options as is equal to the number of Class A Common Shares so reserved as of the Effective Time. As of the Effective Time, the Surviving Corporation assumes the Plans and all obligations of the Company under the Plans, including the outstanding units or options or portions thereof granted pursuant to the Plans.
ARTICLE V
CONDITIONS
5.1. CONDITION TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The respective obligations of the Company, the Limited Partnership and the New Company to consummate the Mergers are subject to the fulfillment of each of the following conditions:
(a) The registration statement on Form S-4 to be filed by the New Company, which will include the proxy statement of the Company soliciting proxies to approve the Mergers, shall have been declared effective in accordance with the Securities Act of 1933, as amended, by the Securities and Exchange Commission and no stop order shall have been issued or threatened.
(b) This Agreement shall have been duly approved by (i) the requisite vote of holders of the Class A Common Shares and Class A Preferred Shares, in accordance with applicable law and the amended and restated declaration of trust and by-laws of the Company, (ii) the New Company as the general partner of the Limited Partnership, and (iii) the Company, as the sole shareholder of the New Company.
(c) The shares of New Class A Common Stock to be issued in the Mergers and the shares of New Class A Common Stock underlying the New Class A Preferred Stock to be issued in the Mergers shall have been listed on the New York Stock Exchange, subject to official notice of issuance.
(d) No order to restrain, enjoin or otherwise prevent the consummation of this Agreement or either of the Mergers shall have been entered by any court or administrative body and shall remain in full force and effect.
(e) The obligations to consummate the Mergers contemplated hereby shall not have been terminated pursuant to Article VI hereof.
(f) All consents and approvals, if any, necessary for the transactions contemplated hereby shall have been obtained and be in full force and effect.
ARTICLE VI
TERMINATION
6.1. TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated and the Mergers may be abandoned at any time prior to the Effective Time, before or after the approval by holders of the Class A Common Shares and the Class A Preferred Shares, by the
mutual consent of the Board of the Trustees of the Company and the general partner of the Limited Partnership and the Board of Directors of the New Company.
6.2. EFFECT OF TERMINATION AND ABANDONMENT. In the event of termination of this Agreement and abandonment of the Mergers pursuant to this Article VI, no party hereto (or any of its directors, trustees or officers) shall have any liability or further obligation to any other party to this Agreement.
ARTICLE VII
MISCELLANEOUS AND GENERAL
7.1. INDEMNIFICATION; DIRECTORS' AND OFFICERS' INSURANCE. From and after the Effective Time, the Surviving Corporation will indemnify, and pay or reimburse reasonable expenses in advance of final disposition of a proceeding to, (i) any individual who is a present or former trustee or officer of the Company or the Limited Partnership or its general partner or (ii) any individual who, while a trustee of the Company and at the request of the Company, serves or has served another corporation, partnership, joint venture, trust, employee benefit plan or any other enterprise as a director, officer, partner or trustee of such corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, arising out of or pertaining to matters existing or occurring at or prior to the Effective Time, whether asserted or claimed prior to, at or after the Effective Time, to the fullest extent required or permitted by Maryland law.
7.2. MODIFICATION OR AMENDMENT. Subject to the applicable provisions of the MRULPA and the MGCL, at any time prior to the Effective Time, the parties hereto may amend or modify this Agreement by written agreement, executed and delivered by duly authorized officers of the respective parties; provided, however, that after the Mergers have been approved by the Company's shareholders, no amendment or modification may change the amount or form of the consideration to be received by such shareholders in the Mergers.
7.3. WAIVER OF CONDITIONS. The conditions to each of the parties' obligations to consummate the relevant Merger are for the sole benefit of such party and may be waived by such party in whole or in part to the extent permitted by applicable law.
7.4. COUNTERPARTS. For the convenience of the parties hereto, this Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which shall constitute one and the same agreement.
7.5. GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the States of California and Maryland in the case of the Limited Partnership Merger, and in accordance with the laws of the State of Maryland in the case of the Company Merger.
7.6. NO THIRD PARTY BENEFICIARIES. Except as provided in Section 7.1, no provision of this Agreement is intended, nor shall it be interpreted, to provide or create any third party beneficiary rights or any other rights of any kind in any client, customer, affiliate, stockholder, partner or employee or any other person or entity.
7.7. HEADINGS. The Article, Section and Paragraph headings herein are for convenience of reference only and shall have no effect on the construction or meaning of this Agreement.
7.8. SERVICE OF PROCESS.
(a) The New Company may be served with process in the State of Maryland in any proceeding for the enforcement of any obligation of the Company or the Limited Partnership, as well as for enforcement of any obligations of the New Company arising from the Mergers. The resident agent in the State of Maryland is Ballard Spahr Andrews & Ingersoll LLP, 300 Lombard Street, Baltimore, Maryland 21202, Attn: James J. Hanks, Jr.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers of the parties hereto on the date first hereinabove written.
CAPITAL TRUST, INC.
By:/s/ John R. Klopp ------------------------ Name: John R. Klopp Title: President |
CAPTRUST LIMITED PARTNERSHIP
By: CAPITAL TRUST, INC.,
its general partner
By:/s/ John R. Klopp ----------------------- Name: John R. Klopp Title: President |
CAPITAL TRUST
By:/s/ Edward L. Shugrue III -------------------------------- Name: Edward L. Shugrue III Title: Managing Director and Chief Financial Officer |
Exhibit 3.1
CAPITAL TRUST, INC.
ARTICLES OF AMENDMENT AND RESTATEMENT
FIRST: Capital Trust, Inc., a Maryland corporation (the "Corporation"), desires to amend and restate its charter as currently in effect and as hereinafter amended.
SECOND: The following provisions are all the provisions of the charter currently in effect and as hereinafter amended:
ARTICLE I
INCORPORATOR
The undersigned, Tonya Mitchem Grindon whose address is c/o Ballard Spahr Andrews & Ingersoll, 300 East Lombard Street, Baltimore, Maryland 21202, being at least 18 years of age, does hereby form a corporation under the general laws of the State of Maryland.
ARTICLE II
NAME
The name of the corporation (the "Corporation") is: Capital Trust, Inc.
ARTICLE III
PURPOSE
The purposes for which the Corporation is formed are to engage in any lawful act or activity for which corporations may be organized under the general laws of the State of Maryland as now or hereafter in force.
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ARTICLE IV
PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT
The address of the principal office of the Corporation in the State of Maryland is c/o Ballard Spahr Andrews & Ingersoll, 300 East Lombard Street, Baltimore, Maryland 21202, Attention: James J. Hanks, Jr. The name of the resident agent of the Corporation in the State of Maryland is James J. Hanks, Jr., whose post address is c/o Ballard Spahr Andrews & Ingersoll, 300 East Lombard Street, Baltimore, Maryland 21202. The resident agent is a citizen of and resides in the State of Maryland.
ARTICLE V
PROVISIONS FOR DEFINING, LIMITING
AND REGULATING CERTAIN POWERS OF THE
CORPORATION AND OF THE STOCKHOLDERS AND DIRECTORS
Section 5.1 Number of Directors. The business and affairs of the Corporation shall be managed under the direction of the Board of Directors. The number of directors of the Corporation initially shall be ten (10), which number may be increased or decreased pursuant to the Bylaws, but shall never be less than the minimum number required by the Maryland General Corporation Law. The names of the directors who shall serve until the first annual meeting of stockholders and until their successors are duly elected and qualified are:
Samuel Zell Jeffrey A. Altman Sheli Z. Rosenberg Gary R. Garrabrant Martin L. Edelman John R. Klopp
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Lynne B. Sagalyn Craig M. Hatkoff Thomas E. Dobrowski Steven Roth
These directors may increase the number of directors and may fill any vacancy, whether resulting from an increase in the number of directors or otherwise, on the Board of Directors occurring before the first annual meeting of stockholders in the manner provided in the Bylaws.
Section 5.2 Extraordinary Actions. Notwithstanding any provision of law permitting or requiring any action to be taken or approved by the affirmative vote of the holders of shares entitled to cast a greater number of votes, any such action shall be effective and valid if taken or approved by the affirmative vote of holders of shares entitled to cast a majority of all the votes entitled to be cast on the matter.
Section 5.3 Authorization by Board of Stock Issuance. The Board of Directors may authorize the issuance from time to time of shares of stock of the Corporation of any class or series, whether now or hereafter authorized, or securities or rights convertible into shares of its stock of any class or series, whether now or hereafter authorized, for such consideration as the Board of Directors may deem advisable (or without consideration in the case of a stock split or stock dividend), subject to such restrictions or limitations, if any, as may be set forth in the charter or the Bylaws.
Section 5.4 Preemptive Rights. Except as may be provided by the Board of Directors in setting the terms of classified or reclassified shares of stock pursuant to Section 6.4 or as may otherwise be provided by contract, no holder of shares of stock of the Corporation shall, as such holder, have any preemptive right to purchase or subscribe for any additional shares of stock of the Corporation or any other security of the Corporation which it may issue or sell.
Section 5.5 Indemnification. The Corporation shall have the power, to the maximum extent permitted by Maryland law in effect from time to time, to obligate itself to indemnify, and to pay or reimburse reasonable expenses in advance of final disposition of a proceeding to, (a) any individual who is a present or former director or officer of the Corporation or (b) any individual who, while a director of the Corporation and at the request of the Corporation, serves or has
697816.6
served as a director, officer, partner or trustee of another corporation, real
estate investment trust, partnership, joint venture, trust, employee benefit
plan or any other enterprise from and against any claim or liability to which
such person may become subject or which such person may incur by reason of his
status as a present or former director or officer of the Corporation. The
Corporation shall have the power, with the approval of the Board of Directors,
to provide such indemnification and advancement of expenses to a person who
served a predecessor of the Corporation in any of the capacities described in
(a) or (b) above and to any employee or agent of the Corporation or a
predecessor of the Corporation.
Section 5.6 Determinations by Board. The determination as to any of the following matters, made in good faith by or pursuant to the direction of the Board of Directors consistent with the charter and in the absence of actual receipt of an improper benefit in money, property or services or active and deliberate dishonesty established by a court, shall be final and conclusive and shall be binding upon the Corporation and every holder of shares of its capital stock: the amount of the net income of the Corporation for any period and the amount of assets at any time legally available for the payment of dividends, redemption of its capital stock or the payment of other distributions on its capital stock; the amount of paid-in surplus, net assets, other surplus, annual or other net profit, net assets in excess of capital, undivided profits or excess of profits over losses on sales of assets; the amount, purpose, time of creation, increase or decrease, alteration or cancellation of any reserves or charges and the propriety thereof (whether or not any obligation or liability for which such reserves or charges shall have been created shall have been paid or discharged); the fair value, or any sale, bid or asked price to be applied in determining the fair value, of any asset owned or held by the Corporation; any matter relating to the acquisition, holding and disposition of any assets by the Corporation; or any other matter relating to the business and affairs of the Corporation.
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ARTICLE VI
STOCK
Section 6.1 Authorized Shares. The total number of shares of stock which the Corporation shall have the authority to issue is 300,000,000 shares, consisting of three classes of stock as follows:
(a) 100,000,000 shares of class A common stock, par value $.01 per share (the "Class A Stock");
(b) 100,000,000 shares of class B common stock, par value $.01 per share (the "Class B Stock," and together with the Class A Stock, the "Common Stock"); and
(c) 100,000,000 shares of preferred stock, par value $.01 per share (the "Preferred Stock"). The aggregate par value of all authorized shares of stock having par value is $3,000,000. If shares of one class of stock are classified or reclassified into shares of another class of stock pursuant to this Article VI, the number of authorized shares of the former class shall be automatically decreased and the number of shares of the latter class shall be automatically increased, in each case by the number of shares so classified or reclassified, so that the aggregate number of shares of stock of all classes that the Corporation has authority to issue shall not be more than the total number of shares of stock set forth in the first sentence of this paragraph. To the extent permitted by Maryland law, the Board of Directors, without any action by the stockholders of the Corporation, may amend the charter from time to time to increase or decrease the aggregate number of shares of stock of any class or series that the Corporation has the authority to issue.
Section 6.2 Common Stock. Except as may otherwise be provided in this Article VI, all shares of Common Stock shall be identical and shall entitle the holders thereof to the same rights and privileges with respect thereto. Subject to the provisions of Section 6.3, the Common Stock shall have the following preferences, rights, powers, restrictions, limitations and qualifications, and such others as may be afforded by law:
(a) Voting Rights. Except as may otherwise be provided by law, each holder of Class A Stock shall have one vote in respect to each share of Class A Stock held of record on all matters to be voted upon by stockholders and the shares of Class B Stock shall not have voting
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rights and shall not be counted in determining the presence of a quorum at any meeting of stockholders.
(b) Dividend Rights. The holders of Common Stock shall be entitled to receive, ratably in proportion to the number of shares of Common Stock held by them, such dividends as may be authorized from time to time by the Board of Directors out of assets legally available therefor.
(c) Liquidation Rights. In the event of the voluntary or involuntary liquidation, dissolution or winding-up of the Corporation, after payment in full or reasonable provision for payment in full of all claims and obligations of the Corporation shall have been made, all of the assets of the Corporation, if any, remaining, of whatever kind available for distribution to stockholders, shall be distributed to the holders of Common Stock, ratably, in proportion to the number of shares of Common Stock held by them.
(d) Conversion. The Common Stock shall have the following conversion rights:
(i) Each share of Class A Stock shall be convertible at the option of the holder thereof at any time and from time to time into one validly issued, fully paid and nonassessable share of Class B Stock. Subject to delivery of the certification described in Section 6.2(d)(ii) below, each share of Class B Stock shall be convertible at the option of the holder thereof at any time and from time to time into one validly issued, fully paid and nonassessable share of Class A Stock.
(ii) In order to exercise the conversion right, the holder of any shares of Common Stock to be converted in whole or in part shall surrender the certificate or certificates representing such shares of Common Stock to the Corporation and shall give written notice to the Corporation ("Conversion Notice") that the stockholder elects to convert such shares of Common Stock or the portion thereof specified in said notice into shares of Class A Stock or shares of Class B Stock, as specified by the stockholder in the Conversion Notice. The Conversion Notice shall also (x) state the name or names (with address) in which the certificates for
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the shares of Common Stock shall be issued and (y) if the shares of Class B Stock are to be converted into shares of Class A Stock, contain a certification by the stockholder that the stockholder either (a) will not, together with such stockholder's Aggregated Transferors (as defined below), upon the issuance of such shares of Class A Stock, own more than 4.9% of any class of Voting Stock (as defined below) of the Corporation or (b) is not limited by the Bank Holding Company Act of 1956, as amended, to holding no more than 4.9% of any class or series of Voting Stock. Each certificate representing shares of Common Stock surrendered for conversion shall, unless the shares issuable on conversion are to be issued in the same name as the registration of such shares of Common Stock, be duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Corporation duly executed by, the stockholder or its duly authorized attorney. As promptly as practicable after receipt of a Conversion Notice and surrender of the certificate or certificates representing the shares of Common Stock relating thereto, the Corporation shall issue and deliver to such stockholder (or upon the written order of such stockholder) a certificate or certificates for the number of full shares of Common Stock issuable upon the conversion of such Common Stock or portion thereof in accordance with the provisions of this Section 6.2(d)(ii). In the event that less than all the shares of Common Stock represented by a certificate are to be converted, the Corporation shall issue and deliver or cause to be issued and delivered to (or upon the written order of) the holder of the shares of Common Stock so surrendered, without charge to such stockholder, a new certificate or certificates representing a number of shares of Common Stock equal to the unconverted portion of the surrendered certificate. Each conversion shall be deemed to have been effected on the date (the "Conversion Date") on which the certificate or certificates representing such shares of Common Stock shall have been surrendered to the Corporation or its transfer agent and a Conversion Notice with respect to such shares of Common Stock shall have been received by the Corporation, as described above. Any Person (as defined below) in whose name
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any certificate or certificates for shares of Common Stock shall be issuable upon conversion shall be deemed to have become the holder of record of the shares of Common Stock represented thereby on the Conversion Date; provided, however, if the certificate or certificates representing shares of Common Stock are surrendered on any date when the stock transfer books of the Corporation shall be closed, the stockholder shall constitute the Person in whose name the certificates are to be issued as the record holder thereof for all purposes until the next succeeding day on which such stock transfer books are open, but such conversion shall be at the Conversion Price in effect on the date on which such certificate or certificates shall have been surrendered. No payment or adjustment will be made for dividends or other distributions with respect to any shares of Common Stock issuable upon conversion of shares of Common Stock as provided herein.
(iii) The issuance of stock certificates upon conversion of shares of Common Stock shall be made without charge to the converting stockholder for any tax in respect of the issuance thereof.
(iv) The Corporation covenants that all shares of Common Stock which may be issued upon conversion of shares of Common Stock will upon issuance be validly issued, fully paid and nonassessable by the Corporation and free from all taxes, liens and charges with respect to the issuance thereof.
(v) For purposes of this Section 6.2(d), (x) the term "Aggregated Transferor" of a Person shall mean any other Person other than the Corporation who previously held Voting Stock of the Corporation now held by such Person, (y) the term "Person" shall mean an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a joint-stock company, a trust, a business trust, a government or any agency or any political subdivision thereof, any unincorporated organization or any other entity, and (z) the term "Voting
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Shares" shall mean, collectively, the shares of Class A Stock and the shares of Preferred Stock created pursuant to Section 6.3 and designated at such time as entitled to vote generally in the election of directors.
The Board of Directors may reclassify any unissued shares of Common Stock from time to time in one or more classes or series of stock.
Section 6.3 Preferred Stock. The Board of Directors may classify any unissued shares of Preferred Stock and reclassify any previously classified but unissued shares of Preferred Stock of any series from time to time, in one or more classes or series of stock.
Section 6.4 Classified or Reclassified Shares. Prior to issuance of classified or reclassified shares of any class or series, the Board of Directors by resolution shall: (a) designate that class or series to distinguish it from all other classes and series of stock of the Corporation; (b) specify the number of shares to be included in the class or series; (c) set or change, subject to the provisions of Section 6.3 and subject to the express terms of any class or series of stock of the Corporation outstanding at the time, the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms and conditions of redemption for each class or series; and (d) cause the Corporation to file articles supplementary with the State Department of Assessments and Taxation of Maryland ("SDAT"). Any of the terms of any class or series of stock set or changed pursuant to clause (c) of this Section 6.4 may be made dependent upon facts or events ascertainable outside the charter (including determinations by the Board of Directors or other facts or events within the control of the Corporation) and may vary among holders thereof, provided that the manner in which such facts, events or variations shall operate upon the terms of such class or series of stock is clearly and expressly set forth in the articles supplementary filed with the SDAT.
Section 6.5 Charter and Bylaws. All persons who shall acquire capital stock in the Corporation shall acquire the same subject to the provisions of the charter and the Bylaws.
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ARTICLE VII
AMENDMENTS
The Corporation reserves the right from time to time to make any amendment to its charter, now or hereafter authorized by law, including any amendment altering the terms or contract rights, as expressly set forth in the charter, of any shares of outstanding stock. All rights and powers conferred by the charter on stockholders, directors and officers are granted subject to this reservation.
ARTICLE VIII
LIMITATION OF LIABILITY
To the maximum extent that Maryland law in effect from time to time permits limitation of the liability of directors and officers of a corporation, no director or officer of the Corporation shall be liable to the Corporation or its stockholders for money damages. Neither the amendment nor repeal of this Article VIII, nor the adoption or amendment of any other provision of the charter or Bylaws inconsistent with this Article VIII, shall apply to or affect in any respect the applicability of the preceding sentence with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.
THIRD: The amendment to and restatement of the charter as hereinabove set forth have been duly advised by the Board of Directors and approved by the stockholders of the Corporation as required by law.
FOURTH: The current address of the principal office of the Corporation is as set forth in Article IV of the foregoing amendment and restatement of the charter.
FIFTH: The name and address of the Corporation's current resident agent is as set forth in Article IV of the foregoing amendment and restatement of the charter.
SIXTH: The number of directors of the Corporation and the names of those currently in office are as set forth in Article V of the foregoing amendment and restatement of the charter.
SEVENTH: The total number of shares of capital stock which the Corporation had authority to issue immediately prior to this amendment and restatement was 100 shares, consisting of 1,000 shares of Common Stock, par value $.01 per share. The aggregate par value of all shares of capital stock having par value was $10.
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EIGHTH: The total number of shares of stock which the Corporation has authority to issue pursuant to the foregoing amendment and restatement of the charter is 300,000,000, consisting of 200,000,000 shares of Common Stock, par value $.01 per share, and 200,000,000 shares of Preferred Stock, par value $.01 per share. The aggregate par value of all shares of stock having par value is $3,000,000.
NINTH: The undersigned chief executive officer acknowledges these Articles of Amendment and Restatement to be the corporate act of the Corporation and as to all matters or facts required to be verified under oath, the undersigned chief executive officer acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.
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IN WITNESS WHEREOF, the Corporation has caused these Articles of Amendment and Restatement to be signed in its name and on its behalf by its chief executive officer and attested to by its secretary on this 28th day of January, 1999.
ATTEST: CAPITAL TRUST, INC. /s/ Edward L. Shugrue III By: /s/ John R. Klopp (SEAL) ------------------------ ------------------------------ Secretary Chief Executive Officer 697816.6 -12- |
ARTICLES SUPPLEMENTARY
CLASS A 9.5% CUMULATIVE CONVERTIBLE
PREFERRED STOCK
(par value $.01 per share)
FIRST: Capital Trust, Inc., a Maryland corporation (hereinafter called the "Corporation"), does hereby certify to the State Department of Assessments and Taxation of Maryland pursuant to Section 2-208 of the Maryland General Corporation Law that, under a power contained in Section 6.3 of the charter of the Corporation (the "Charter"), the Board of Directors of the Corporation (the "Board of Directors"), by unanimous written consent dated November 11, 1998, classified and designated 12,639,405 unissued and unclassified shares (the "Shares") of Preferred Stock (as defined in the Charter) as shares of Class A 9.5% Cumulative Convertible Preferred Stock, par value $.01 per share, with the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption of shares as set forth herein, which upon any restatement of the Charter may be made part of Article VI of the Charter, with any necessary or appropriate changes to the enumeration or lettering of sections or subsections thereof:
CLASS A 9.5% CUMULATIVE CONVERTIBLE
PREFERRED STOCK
1 Designation and Amount. The class of Preferred Stock of the Corporation created hereby shall be designated as Class A 9.5% Cumulative Convertible Preferred Stock, and the number of shares constituting such class shall be 12,639,405, par value $.01 per share.
2 Definitions. As used in these Articles Supplementary, the following terms shall have the following meanings:
(a) "Aggregate Consideration Receivable" by the Corporation in connection with the issuance of any shares of Common Stock or any Common Stock Equivalents means the sum of:
(i) the aggregate consideration paid to the Corporation for such shares of Common Stock or Common Stock Equivalents and
(ii) the aggregate consideration or premiums, if any, stated in such Common Stock Equivalents to be payable for the Common Stock upon the exercise or conversion of such Common Stock Equivalents,
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calculated in each case in accordance with section 7(d)(vii) hereof. In case all or any portion of the consideration to be received by the Corporation may be paid in a form other than cash, the value of such consideration shall be determined in good faith by the Board or a duly authorized committee thereof (irrespective of the accounting treatment thereof), and described in a resolution of the Board or such committee.
(b) "Aggregated Transferor" of a Person shall mean any other Person other than the Corporation who previously held Voting Stock of the Corporation now held by such Person.
(c) "Annual Dividend Rate" has the meaning set forth in section 3(a) hereof.
(d) "Bank Holding Company" means a bank holding company (as defined in
Section 1841 (a) of the Bank Holding Company Act of 1956, as amended)
or any affiliate (as defined in Section 1841 (k) of the Bank Holding
Company Act of 1956, as amended) of any bank holding company (as
defined in Section 1841 (a) of the Bank Holding Company Act of 1956,
as amended).
(e) "Board" means the Board of Directors of the Corporation.
(f) "Business Day" means any day other than a Saturday, a Sunday or a day on which banking institutions in the City of New York, New York are authorized or obligated by law or executive order to close.
(g) "Charter" means the charter, as defined in Section 1- 101(e) of the Maryland General Corporation Law, of the Corporation.
(h) "Class A Articles Supplementary" means these Articles Supplementary filed with and accepted for record by the State Department of Assessment and Taxation of Maryland on or about January 28, 1999, establishing the Class A Preferred Stock pursuant to Article VI of the Charter, as the same may be amended, supplemented or modified from time to time in accordance with the terms hereof and pursuant to applicable law and upon any restatement of the Charter shall mean the terms of the Class A Preferred Stock as set forth in Article VI of the Charter.
(i) "Class A Common Stock" means the class A common stock, par value $.01 per share, of the Corporation, having the designations and rights, qualifications, limitations and restrictions set forth in the Charter.
(j) "Class A Preferred Stock" means the Class A 9.5% Cumulative Convertible Preferred Stock, par value $.01
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per share, of the Corporation established pursuant to these Articles Supplementary.
(k) "Class B Articles Supplementary" means Articles Supplementary filed with and accepted for record by the State Department of Assessment and Taxation of Maryland on or about January 28, 1999, establishing the Class B Preferred Stock pursuant to Article VI of the Charter, as the same may be amended, supplemented or modified from time to time in accordance with the terms hereof and pursuant to applicable law and upon any restatement of the Charter shall mean the terms of the Class B Preferred Stock as set forth in Article VI of the Charter.
(l) "Class B Common Stock" means the class B common stock, par value $.01 per share, of the Corporation, having the designations and rights, qualifications, limitations and restrictions set forth in the Charter.
(m) "Class B Preferred Stock" means the Class B 9.5% Cumulative Convertible Non-Voting Preferred Stock, par value $.01 per share, of the Corporation established pursuant to the Class B Articles Supplementary.
(n) "Common Stock" means, collectively, the Class A Common Stock and the Class B Common Stock.
(o) "Common Stock Equivalents" means, without double counting:
(i) Common Stock, where one share of Common Stock shall constitute one Common Stock Equivalent,
(ii) Stock of the Corporation (including without limitation the Preferred Stock) convertible into Common Stock, where any one share of Stock of the Corporation shall constitute a number of Common Stock Equivalents equal to the number of shares of Common Stock issuable in respect of such Stock,
(iii) any rights, warrants, options and convertible, exchangeable or exercisable securities entitling the holder thereof to subscribe for or purchase any Common Stock, where any such rights, warrants, options and convertible, exchangeable or exercisable securities shall constitute a number of Common Share Equivalents equal to the number of shares of Common Stock issuable in respect of such rights, warrants, options or convertible, exchangeable or exercisable securities, and
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(iv) any stock appreciation rights entitling the holders thereof to any interest in an increase in value, however measured, of Common Stock, where any such stock appreciation rights shall constitute a number of Common Share Equivalents equal to the shares of Common Stock, as nearly as it may be calculated, to such share appreciation rights.
(p) "Conversion Date" has the meaning set forth in section 7(b) hereof.
(q) "Conversion Notice" has the meaning set forth in section 7(b) hereof.
(r) "Conversion Price" has the meaning set forth in section 7(a) hereof.
(s) "Corporation" means Capital Trust, Inc., a Maryland corporation.
(t) "D/E Ratio" means, as of the date of determination, the ratio of (i) the sum of (x) the total Indebtedness of the Corporation and its consolidated Subsidiaries as reflected on the Corporation's most recent regularly prepared consolidated balance sheet, plus (y) all Indebtedness issued by the Corporation and its consolidated subsidiaries since the date of such consolidated balance sheet less all Indebtedness retired or repurchased by the Corporation and its subsidiaries since that date, plus (z) the Corporation's pro rata share, based upon its percentage equity ownership interest therein, of aggregate total Indebtedness of Equity Affiliates, to (ii) the excess of total assets (including the Corporation's equity in its Equity Affiliates) over total liabilities of the Corporation and its consolidated subsidiaries, as reflected on the Corporation's most recent regularly prepared consolidated balance sheet, in each case determined in accordance with GAAP and after giving effect to the incurrence of any proposed Indebtedness and the application of proceeds of such Indebtedness.
(u) "Dividend Payment Date" has the meaning set forth in section 3(a) hereof.
(v) "Dividend Period" has the meaning set forth in section 3(a) hereof.
(w) "Effective Purchase Price per Share" at which the Corporation issues any shares of Common Stock or any Common Stock Equivalents means an amount equal to:
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(i) the Aggregate Consideration Receivable by the Corporation in connection with the issuance of such shares of Common Stock or Common Stock Equivalents divided by
(ii) the number of shares of Common Stock and Common Stock Equivalents so issued.
(x) "Equity Affiliate" means any Person in which the Corporation or any of its consolidated Subsidiaries has an equity interest which is or, in accordance with GAAP, should be accounted for on the equity method in the Corporation's consolidated financial statements.
(y) "Exempted Transaction" means each and any of the following:
(i) the issuance, from the Issuance Date through the date of the Exempted Transaction, of Common Stock Equivalents to employees or officers of the Corporation or any of its Subsidiaries, or to consultants or service providers to the Corporation or any of its Subsidiaries, or to directors of the Corporation or any of its Subsidiaries, under an employee benefit plan or similar arrangement adopted by the Corporation in an amount not to exceed 10% of the aggregate number of Common Stock Equivalents outstanding on the date of such Exempted Transaction,
(ii) the issuance of any shares of Common Stock or Preferred Stock of the Corporation upon the conversion of any shares of Common Stock or Preferred Stock, and
(iii) the issuance of any Stock of the Corporation in exchange, in whole or in part, for any acquisition by the Corporation of shares of stock or other assets of any kind.
(z) "Fair Market Value" of a share of Common Stock means, as of any date, the average of the closing prices of Class A Common Stock for the 20 consecutive Trading Days next preceding the date five days prior to the date in question. The closing price for each day shall be:
(i) if the Class A Common Stock is listed or admitted for trading on the New York Stock Exchange or any other national securities exchange, the last sale price, or the closing bid price if no sale occurred, of one share of Class A Common Stock on the New York Stock Exchange or, if not then listed on the New York Stock Exchange, the principal securities exchange on which the Class
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A Common Stock is listed or admitted for trading; or
(ii) if not listed or admitted for trading as described in clause (i) of this section 2(z), the average of the closing sale price or, in the absence of a closing sale price, the average of the highest bid and lowest asked prices of one share of Class A Common Stock quoted in the NASDAQ National Market System or any similar system of automated dissemination of quotations of securities prices then in common use, if so quoted; or
(iii) if not quoted as described in clause (ii) of this section 2(z), the average of the highest bid and lowest offered quotations for one share of Class A Common Stock as reported by the National Quotation Bureau Incorporated if at least two securities dealers have inserted both bid and offered quotations for shares of Class A Common Stock on at least five of the 20 consecutive Trading Days next preceding the date five days prior to the date in question.
If none of the conditions set forth above is met, the closing price of one share of Class A Common Stock on any day or the average of such closing prices for any period shall be the fair market value of one share of Common Stock for such day or period as determined in good faith by the Board.
"Fair Market Value" of a share of Preferred Stock means the Fair Market Value of a number of fully paid and nonassessable shares of Class A Common Stock equal to the ratio of (a) the Liquidation Preference for such Preferred Stock plus an amount equal to the dividends per share accrued and unpaid thereon as of the date of such determination to (b) the Conversion Price in effect as of the date of such determination.
(aa) "GAAP" means those generally accepted accounting principles and practices which are recognized as such by the American Institute of Certified Public Accountants acting through its Accounting Principles Board or by the Financial Accounting Standards Board or through other appropriate boards or committees thereof and which are consistently applied for all periods after the date hereof so as to properly reflect the financial condition, results of operations and changes in financial position of any Person, except that any accounting principle or practice required to be changed by such Accounting Principles Board or Financial Accounting Standards Board (or other appropriate board or committee of such Boards)
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in order to continue as a generally accepted accounting principle or practice may be so changed.
(bb) "Holder" of a share of Class A Preferred Stock or a share of Class B Preferred Stock means the Person in whose name such share of Class A Preferred Stock or Class B Preferred Stock is registered on the books of the Corporation.
"Holder" of a share of Class A Common Stock or a share of Class B Common Stock means the Person in whose name such share of Class A Common Stock or Class B Common Stock is registered on the books of the Corporation.
(cc) "Incur" means to issue, assume, guarantee, incur or otherwise become liable for.
(dd) "Indebtedness" means, with respect to any Person, without duplication, any liability of such Person (i) for borrowed money, (ii) evidenced by bonds, debentures, notes or other similar instruments, (iii) constituting capitalized lease obligations, (iv) incurred or assumed as the deferred purchase price of property, or pursuant to conditional sale obligations and title retention agreements (but excluding trade accounts payable arising in the ordinary course of business) and (v) which are secured by any Lien on any property or asset of such first referred to Person.
(ee) "Issuance Date" means, with respect to any Preferred Stock, the date on which such Preferred Stock is issued by the Corporation.
(ff) "Junior Stock" means Common Stock and any other class or series of Stock of the Corporation now or hereafter authorized, issued or outstanding which is subject, under the terms of the Charter, to the following restrictions and limitations:
(i) no dividend or distribution can be declared or paid on the shares of such class or series unless all accrued dividends and other amounts then due with respect to the Preferred Stock shall have been paid in full,
(ii) in the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the Holders of the Preferred Stock shall be entitled to receive out of assets of the Corporation available for distribution to shareholders, the amount specified in section 4 hereof, before any payment shall be made or any
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assets distributed to the holders of such other class or series of Stock of the Corporation, and
(iii) shares of such class or series may not be redeemed under any circumstances, either at the option of the Corporation or of any holder thereof, unless all of the outstanding Preferred Stock have theretofore been redeemed or converted.
(gg) "Lien" means any lien, mortgage, deed of trust, pledge, charge or other encumbrance of any kind, including, without limitation, any conditional sale or other title retention agreement and any lease in the nature thereof.
(hh) "Liquidation Preference" means, with respect to each share of Preferred Stock, an amount equal to $2.69.
(ii) "Merger" means the simultaneous mergers of Capital Trust, a California business trust, with and into Captrust Limited Partnership, a Maryland limited partnership ("Captrust"), and of Captrust with and into the Corporation.
(jj) "Person" means an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a joint-stock company, a trust, a business trust, a government or any agency or any political subdivision, any unincorporated organization or any other entity.
(kk) "Preferred Stock" means, collectively, the Class A Preferred Stock and the Class B Preferred Stock.
(ll) "Predecessor" means Capital Trust, a California business trust, as the predecessor of the Corporation in the Merger.
(mm) "Restricted Payment" has the meaning set forth in section 3(c) hereof.
(nn) "Stock" means any shares of stock, rights, warrants or options to purchase shares of stock, securities convertible into or exchangeable or exercisable for shares of stock and participations in or other equivalents of or interests (other than security interests) in shares of stock, however designated and whether voting or nonvoting, of any Person.
(oo) "Subsidiary" means:
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(i) any corporation 50% or more of the Voting Stock of which is owned, directly or indirectly, by the Corporation, or
(ii) any other Person whose accounts are required under GAAP to be included in the Corporation's consolidated financial statements.
(pp) "Trading Day" means, with respect to the Class A Common Stock: (i) if the Class A Common Stock is listed or admitted for trading on any national securities exchange, days on which such national securities exchange is open for business; (ii) if the Class A Common Stock is not listed or admitted for trading on any national securities exchange, but is quoted on the NASDAQ National Market System, any similar system of automated dissemination of quotations of securities prices or the National Quotation Bureau Incorporated, each day on which quotations may be made on such system; or (iii) if the Class A Common Stock is not quoted on any system or listed or admitted for trading on any securities exchange, a Business Day.
(qq) "Voting Stock" means, with respect to the Corporation, all classes of Stock of the Corporation then outstanding and normally entitled to vote for the election of directors of the Corporation. Any reference to a percentage of Voting Stock shall refer to the percentage of votes eligible to be cast for the election of directors which are attributable to the applicable Voting Stock.
3 Dividends.
(a) Payment of Dividends. The Holders of the Class A Preferred Stock shall be entitled to receive, when, as and if declared by the Board, out of funds legally available therefor, cash dividends per share at the rate of 9.5% per annum on the Liquidation Preference (the "Annual Dividend Rate"). Such dividends shall accrue (whether or not declared) from and including the Issuance Date to and including the date on which the Liquidation Preference is paid on such shares or on which such shares are converted or redeemed and, to the extent not paid for any Dividend Period, will be cumulative. Dividends on the Class A Preferred Stock shall accrue on a daily basis whether or not the Corporation shall have earnings or surplus at the time.
Semi-annual dividend periods (each a "Dividend Period") shall commence on and include the sixteenth day of December and June of each year and shall end on and include the fifteenth day of June and December, respectively, of such or the following year; provided
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however, that, the first Dividend Period shall be deemed to commence on December 16, 1998 and shall end on and include June 15, 1999 and shall end on and include June 15, 1999. Dividends on the Class A Preferred Stock shall be payable, when, as and if declared, semi-annually, in arrears, no later than December 26 and June 25 of each year commencing June 25, 1999 (each such date, a "Dividend Payment Date"), except that if any such date is not a Business Day, then such dividend shall be paid on the next succeeding Business Day. Each such dividend shall be payable to Holders of Class A Preferred Stock at the close of business on the record date established by the Board, which record date shall be not more than 60 days prior to the date fixed for payment thereof.
The amount of dividends payable per share of Class A Preferred Stock for each full Dividend Period shall be computed by applying the Annual Dividend Rate to the Liquidation Preference and dividing such amount by two. The amount of dividends payable for any period shorter than a full Dividend Period shall be computed on the basis of actual days elapsed and a 360-day year consisting of twelve 30 day months.
The Corporation shall not declare or pay or set apart for payment any dividends or make any other distributions on either class of Preferred Stock unless the Corporation simultaneously declares or pays or sets apart for payment dividends or makes distributions, at the same rate, each share being treated equally, on the other class of Preferred Stock.
(b) Distribution of Partial Dividend Payments. Except as otherwise provided in these Articles Supplementary, if on any Dividend Payment Date the Corporation pays less than the total amount of dividends then accrued with respect to Preferred Stock, the amount so paid shall be distributed ratably, each share being treated equally, among the Holders of the Preferred Stock based upon the number shares of Preferred Stock then held by each such Holder.
(c) Limitations on Certain Payments. Unless all accrued dividends and other amounts then accrued through the end of the last Dividend Period and unpaid with respect to the Preferred Stock shall have been paid in full, the Corporation shall not declare or pay or set apart for payment any dividends or make any other distributions on, or make any payment on account of the purchase, redemption, exchange or other retirement of, any Stock of the Corporation other than the Preferred Stock (each, a "Restricted Payment"); provided, however, that a "Restricted Payment" shall not include:
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(i) any dividend or distribution payable solely in Junior Stock, or
(ii) the acquisition of any Stock of the Corporation in exchange solely for Junior Stock.
4 Liquidation Preference.
In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the Holders of Preferred Stock shall be entitled to receive out of assets of the Corporation available for distribution to stockholders, an amount per share equal to the Liquidation Preference plus the amount of all dividends per share accrued and unpaid thereon through the date of final distribution to stockholders, whether or not declared, before any payment shall be made or any assets distributed to the holders of any other class or series of Stock of the Corporation.
If the assets and funds thus distributed among the Holders of Preferred Stock shall be insufficient to permit the payment to such Holders of the full preferential amount described above, then the entire assets and funds of the Corporation legally available for distribution shall be distributed ratably, each share being treated equally, among the Holders of Preferred Stock based on the number of shares of Preferred Stock then held by each such Holder.
In determining whether a distribution of any dividend or the redemption or other acquisition of any Stock of the Corporation is permitted under Maryland law, no effect shall be given to amounts, to the extent such amounts would be needed, if the Corporation were to be liquidated, dissolved or wound up at the time of such distribution, to satisfy the preferential rights upon liquidation, dissolution or winding up of the Corporation of Holders of the Class A Preferred Stock.
5 Consolidation, Merger and Sale of Assets, etc. Unless all of the outstanding shares of Preferred Stock shall have been redeemed or converted on or prior to the effective date of any consolidation, merger or transfer referred to below involving the Corporation, without the approval of the Holders of a majority of the outstanding shares of Preferred Stock, voting together as a single class, but voting together as a separate class from the Common Stock, the Corporation shall not consolidate with or merge into, or transfer all or substantially all of its assets to, another Person unless:
(a) in the case of a merger or consolidation, the Corporation is the surviving entity, the rights and preferences of the Preferred Stock are not modified, the Corporation, as the surviving entity, does not have outstanding any shares of Stock that are not shares of Junior Stock, and,
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immediately after the consummation of such merger or consolidation and after giving effect thereto, the D/E Ratio of the Corporation shall not exceed 5:1 or
(b) the surviving, resulting or acquiring Person is a Person organized under the laws of the United States, any state thereof or the District of Columbia, or a Person organized under the laws of a foreign jurisdiction whose equity securities are listed on a national securities exchange in the United States or authorized for quotation on the NASDAQ National Market System, the Corporation shall make effective provision such that, upon consummation of such transaction, the Holders of Preferred Stock shall receive preferred shares of the surviving entity having substantially identical terms as the Preferred Stock surrendered by them, the surviving, resulting or acquiring Person does not have outstanding any shares of Stock that are not shares of Junior Stock and, immediately after the consummation of such consolidation, merger or transfer, the D/E Ratio of such Person shall not exceed 5:1.
6 Voting Rights of Preferred Stock.
(a) Voting Rights of the Class A Preferred Stock. In addition to the voting rights described in sections 5 and 6(b) hereof, the holders of the Class A Preferred Stock shall be entitled to vote together with the holders of Class A Common Stock as a single class on all matters submitted for a vote of stockholders, and shall be entitled to notice of all stockholders' meetings and to act by written consent in the same manner as the holders of Class A Common Stock. Each share of Class A Preferred Stock shall entitle the Holder thereof to such number of votes per share as shall equal the number of shares of Class A Common Stock into which such share of Class A Preferred Stock is then convertible.
(b) Preferred Stock Class Vote. The affirmative vote of the Board and the Holders of a majority of the outstanding shares of Preferred Stock voting together as a single class, but voting together as a separate class from the Common Stock, shall be required in order:
(i) to amend, alter or repeal any of the provisions of these Articles Supplementary or of the Class B Article Supplementary;
(ii) to authorize, create or issue any class or series of Stock of the Corporation that are not Junior Stock; and
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(iii) for the Corporation to Incur any Indebtedness if the Corporation's D/E Ratio would then exceed 5:1.
Any Preferred Stock owned, directly or indirectly, by the Corporation or any of its Subsidiaries shall not have voting rights hereunder and shall not be counted in determining the presence of a quorum.
7 Conversion Right.
(a) Right of Conversion. Each share of Class A Preferred Stock shall be convertible at the option of the Holder thereof at any time and from time to time in whole or in part into:
(i) a number of fully paid and nonassessable shares of Class A Common Stock equal to the ratio of:
(x) the Liquidation Preference of such shares of Class A Preferred Stock plus an amount equal to all dividends per share accrued and unpaid thereon as of the Conversion Date to
(y) the Conversion Price in effect on the Conversion Date, or
(ii) an equal number of fully paid and nonassessable shares of Class B Preferred Stock,
or into such additional or other securities, cash or property and at such other rates as required in accordance with the provisions of this section 7.
For purposes of these Articles Supplementary, the "Conversion Price" shall initially be $2.69 per share and shall be adjusted from time to time in accordance with the provisions of this section 7.
(b) Conversion Procedures. In order to exercise the conversion right, the Holder of any shares of Class A Preferred Stock to be converted in whole or in part shall surrender the certificate or certificates representing such shares to the Corporation and shall give written notice to the Corporation ("Conversion Notice") that the Holder elects to convert such shares or the portion thereof specified in said notice into shares of Class A Common Stock or Class B Preferred Stock, as provided herein and as specified by the Holder in the Conversion Notice. The Conversion Notice shall also state the name or names (with address) in which the certificates for Class A Common Stock or Class B Preferred Stock, as the case may be, shall be issued. Each certificate representing Class A Preferred Stock surrendered for
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conversion shall, unless the shares issuable on conversion are to be issued in the same name as the registration of such Class A Preferred Stock, be duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Corporation duly executed by, the Holder or its duly authorized attorney.
As promptly as practicable after receipt of a Conversion Notice and surrender of the certificate or certificates representing the shares of Class A Preferred Stock relating thereto, the Corporation shall issue and deliver to such Holder (or upon the written order of such Holder) a certificate or certificates for the number of full shares of Class A Common Stock, or Class B Preferred Stock, as specified in the Conversion Notice, issuable upon the conversion of such Class A Preferred Stock or portion thereof in accordance with the provisions of this section 7, and a check or cash in respect of any fractional shares issuable upon such conversion, as provided in section 7(c) hereof. In the event that less than all the shares of Class A Preferred Stock represented by a certificate are to be converted, the Corporation shall issue and deliver or cause to be issued and delivered to (or upon the written order of) the Holder of the Class A Preferred Stock so surrendered, without charge to such Holder, a new certificate or certificates representing a number of shares of Class A Preferred Stock equal to the unconverted portion of the surrendered certificate.
Each conversion shall be deemed to have been effected on the date (the "Conversion Date") on which the certificate or certificates representing such shares of Class A Preferred Stock shall have been surrendered to the Corporation or its transfer agent and a Conversion Notice with respect to such shares shall have been received by the Corporation, as described above. Any Person in whose name any certificate or certificates for Class A Common Stock or Class B Preferred Stock shall be issuable upon conversion shall be deemed to have become the holder of record of the shares represented thereby on the Conversion Date, provided, however, if the certificate or certificates evidencing such Class A Preferred Stock are surrendered on any date when the share transfer books of the Corporation shall be closed, the Holder shall constitute the Person in whose name the certificates are to be issued as the record holder thereof for all purposes until the next succeeding day on which such share transfer books are open, but such conversion shall be at the Conversion Price in effect on the date on which such certificate or certificates shall have been surrendered.
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Except as otherwise provided in this section 7, no payment or adjustment will be made for dividends or other distributions with respect to any Class A Common Stock or Class B Preferred Stock issuable upon conversion of Class A Preferred Stock as provided herein.
(c) Cash Payments in Lieu of Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon conversion of Preferred Stock. If any fractional share, would, but for this section 7(c), be issuable upon the conversion of any Class A Preferred Stock, the Corporation shall make a payment therefor in cash on the first Business Day immediately preceding the Conversion Date equal to the Fair Market Value of such fractional share.
(d) Adjustment of Conversion Price for Conversion into Common Stock. The Conversion Price with respect to the conversion of the Class A Preferred Stock into Class A Common Stock shall be adjusted from time to time by the Corporation as follows:
(i) in the event that the Corporation shall at any time after the Issuance Date:
(A) declare a dividend or make a distribution on the shares of Class A Common Stock in shares of Class A Common Stock,
(B) subdivide or reclassify the shares of Class A Common Stock into a greater number of shares,
(C) combine the shares of Class A Common Stock into a smaller number of shares,
(D) pay a dividend or make a distribution on the shares of Class A Common Stock in any class of its Stock other than shares of Class A Common Stock, or
(E) reclassify the shares of Class A Common Stock other than as set forth in Section 7(d)(i)(B),
then the conversion right and the Conversion Price in effect immediately prior thereto shall be adjusted so that the Holder of any shares of Class A Preferred Stock thereafter surrendered for conversion into shares of Class A Common Stock shall be entitled to receive the number of shares of Class A Common Stock or other Stock of the Corporation which such Holder would have owned or have been entitled to receive after the
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happening of any of the events described above had such shares of Class A Preferred Stock been converted into shares of Class A Common Stock immediately prior to the happening of such event. An adjustment made pursuant to this section 7(d)(i) shall become effective immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of subdivision, combination or reclassification. Such adjustment shall be made successively whenever any event referred to above shall occur.
(ii) In the event that the Corporation shall at any time after the Issuance Date issue any Common Stock or any Common Stock Equivalents other than in an Exempted Transaction, at an Effective Purchase Price per Share less than the Conversion Price in effect immediately prior to the date of such issuance, then such Conversion Price shall be adjusted to equal:
(A) the sum of:
(1) the product of:
(a) the number of shares of Common Stock and Common Stock Equivalents outstanding immediately prior to such issuance and
(b) the Conversion Price in effect immediately prior to such issuance and
(2) the Aggregate Consideration Receivable by the Corporation in connection with such issuance
divided by:
(B) the sum of:
(1) the number of shares of Common Stock and Common Stock Equivalents outstanding immediately prior to such issuance and
(2) the number of additional shares of Common Stock and Common Stock Equivalents so issued.
For example, if on any given date the Corporation has 20,000,000 shares of Common Stock and Common
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Stock Equivalents outstanding, the Corporation issues warrants exercisable at $1 per share to purchase an additional 1,000,000 shares of Common Stock for a purchase price of $1 per warrant, and the Conversion Price in effect on such date is $2.69, then the Conversion Price shall be adjusted to equal $2.66, which is calculated as follows:
$2.66 per share =
[(20,000,000shares x $2.69/share) + $2,000,000]/ (20,000,000
shares + 1,000,000 shares).
Such adjustment shall be made successively whenever any shares, rights, warrants, options, convertible, exchangeable or exercisable securities or share appreciation rights are issued at an Effective Purchase Price per Share that is less than the Conversion Price in effect on the date of such issuance. To the extent that any right, option, warrant, convertible or exercisable security or share appreciation right expires without having been converted or exercised, the Conversion Price then in effect shall be readjusted to the Conversion Price which then would be in effect if such rights, options, warrants or convertible, exchangeable or exercisable securities or share appreciation rights had not been issued, but such readjustment shall not affect the number of shares of Common Stock or other Stock of the Corporation delivered upon any conversion prior to the date such readjustment is made.
(iii) In the event that the Corporation shall distribute to all holders of its Class A Common Stock any of its assets (other than cash dividends payable on or after the date of consummation of the Merger which together with all prior cash dividends of the Corporation and the Predecessor paid on or after April 1, 1997, do not exceed the amount of retained earnings of the Corporation accrued on or after April 1, 1997 and on or prior to the date of payment of such dividends) or debt securities, or rights, options, warrants or convertible, exchangeable or exercisable securities of the Corporation (including securities issued for cash, but excluding distributions of Stock of the Corporation referred to in section 7(d)(i) hereof, then in each such case, the Conversion Price shall be adjusted to equal the Conversion Price in effect immediately prior to such distribution less an amount equal to the then fair market value (as reasonably determined by
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the Board, in good faith and as described in a resolution of the Board) of the portion of the assets or debt securities of the Corporation so distributed or of such rights, options, warrants or convertible, exchangeable or exercisable securities applicable to one share of Class A Common Stock. Such adjustment shall become effective immediately after the record date for the determination of shares entitled to receive such distribution. Notwithstanding the foregoing, no adjustment of the Conversion Price shall be made upon the distribution to holders of Common Stock of such rights, options, warrants or convertible, exchangeable or exercisable securities, assets or debt securities if the plan or arrangement under which such rights, options, warrants or convertible, exchangeable or exercisable securities, assets or debt securities are issued provides for their issuance to Holders of Class A Preferred Stock in the same pro rata amounts upon conversion thereof. Such adjustment shall be made successively whenever any event listed above shall occur.
(iv) Anything in this section 7(d) to the contrary notwithstanding,
the Corporation shall be entitled to make such reductions in the
Conversion Price, in addition to those required by this section
7(d), as it in its reasonable discretion shall determine to be
advisable in order that any share dividends, subdivision of
shares, distribution of rights to purchase shares or securities,
or distribution of securities convertible into or exchangeable or
exercisable for shares hereafter made by the Corporation to its
stockholders, shall not be taxable.
(v) Whenever the Conversion Price is adjusted as provided in this section 7(d), or the Class A Preferred Stock becomes convertible into shares, securities, property or assets pursuant to section 7(e) hereof, or the Corporation reduces the Conversion Price pursuant to section 7(f) hereof, the Corporation shall prepare a notice of such adjustment of the Conversion Price setting forth the adjusted Conversion Price (or describing such event, as the case may be) and the date on which such adjustment (or event) becomes effective, and setting forth in reasonable detail the facts requiring such adjustment and the calculation of such adjustment (or describing the shares, securities, property or assets into which the Class A Preferred Stock shall become convertible), and shall mail such
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notice of adjustment to all Holders of Class A Preferred Stock as set forth in section 7(i) hereof.
(vi) In any case in which this section 7(d) provides that an adjustment shall become effective immediately after a record date for an event, the Corporation may defer until the occurrence of such event:
(A) issuing to the Holder of any Class A Preferred Stock converted after such record date and before the occurrence of such event the additional shares of Class A Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the shares of Class A Common Stock issuable upon such conversion before giving effect to such adjustment, and
(B) paying to such Holder any amount in cash in lieu of any fractional share of Class A Common Stock pursuant to section 7(c).
(vii) For purposes of any computations of Aggregate Consideration Receivable or other consideration pursuant to this section 7(d), the following shall apply:
(A) in the case of the issuance of Common Stock or Common Stock Equivalents for cash, the consideration shall be the amount of such cash, provided that in no case shall any deduction be made for any commissions, discounts or other expenses incurred by the Corporation for any underwriting of the issue or otherwise in connection therewith; and
(B) in the case of the issuance of Common Stock or Common Stock Equivalents for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair market value thereof as reasonably determined in good faith by the Board or a duly authorized committee thereof (irrespective of the accounting treatment thereof), and described in a resolution of the Board or such committee.
(viii) If, after an adjustment a Holder of Class A Preferred Stock may, upon conversion of such security, receive two or more classes of Stock of
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the Corporation, the Corporation shall determine on a fair basis the allocation of the adjusted Conversion Price between such classes of Stock. After such allocation, the conversion right and the Conversion Price of each class of Stock of the Corporation shall thereafter be subject to adjustment on terms comparable to those applicable to Class A Common Stock in this section 7.
(e) Effect of Reclassification, Consolidation, Merger or Sale. Unless all of the shares of Class A Preferred Stock shall have been redeemed or converted on or prior to the effective date of any of the events referred to in clauses (i), (ii) and (iii) of this section 7(e), if any of the following events occur, namely:
(i) any reclassification or change of outstanding shares of Class A Common Stock issuable upon conversion of the Class A Preferred Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination),
(ii) any consolidation or merger of the Corporation with another Person shall be effected as a result of which holders of Class A Common Stock issuable upon conversion of the Class A Preferred Stock shall be entitled to receive shares, securities or other property or assets (including cash) with respect to or in exchange for such Class A Common Stock, or
(iii) any sale or conveyance of the properties and assets of the Corporation as, or substantially as, an entirety to any other Person,
then the Corporation or such successor or purchasing Person, as the case may be, shall make provisions in its constituent documents to establish that each share of Class A Preferred Stock then outstanding (or the successor shares referred to in section 5(b) hereof) shall be convertible into the kind and amount of shares and other securities or property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, sale or conveyance by a holder of the number of shares of Class A Common Stock issuable upon conversion of such Class A Preferred Stock immediately prior to such reclassification, change, consolidation, merger, sale or conveyance, each share of Class A Preferred Stock being treated equally. Such provisions shall provide for adjustments which
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shall be as nearly equivalent as may be practicable to the adjustments provided for in this section 7.
If this section 7(e) applies with respect to a transaction, section 7(d) hereof shall not apply with respect to that transaction. The above provisions of this section 7(e) shall similarly apply to successive reclassifications, consolidations, mergers and sales.
(f) Subdivision, Reclassification or Combination of Preferred Stock. The Corporation shall not (i) subdivide or reclassify the Class A Preferred Stock or (ii) combine the Class A Preferred Stock, unless the Corporation simultaneously subdivides, reclassifies or combines, at the same rate, each share being treated equally, all classes of Preferred Stock.
(g) Taxes on Shares Issued. The issuance of share certificates upon conversion of Class A Preferred Stock shall be made without charge to the converting Holder for any tax in respect of the issuance thereof.
(h) Shares to be Fully Paid. The Corporation covenants that all shares of Class A Common Stock or Class B Preferred Stock which may be issued upon conversion of Class A Preferred Stock will upon issuance be validly issued, fully paid and nonassessable by the Corporation and free from all taxes, liens and charges with respect to the issuance thereof.
(i) Notice to Holders Prior to Certain Actions.
(i) In the event:
(A) that the Corporation shall take any action that would require an adjustment in the Conversion Price pursuant to section 7(d)(i) or (iii) hereof;
(B) that any event described in section 7(e) hereof shall occur;
(C) the Corporation reduces the Conversion Price pursuant to section 7(f) hereof; or
(D) of the voluntary or involuntary dissolution, liquidation or winding-up of the Corporation;
the Corporation shall cause notice of such proposed action or event to be mailed to each Holder of record of Class A Preferred Stock at
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its address appearing on the share transfer books of the Corporation, as promptly as possible but in any event no later than the later of (x) the date 30 days prior to the record date for such proposed action or the effective date of such event or (y) the date on which the Corporation first publicly announces such proposed action or event.
(ii) In the event that the Corporation shall take any action that would require an adjustment in the Conversion Price, pursuant to section 7(d)(ii) hereof, the Corporation shall cause notice of such proposed action or event to be mailed to each Holder of record of Class A Preferred Stock at its address appearing on the share transfer books of the Corporation, as promptly as possible but in no event later than the date that the Corporation provides public notice of such proposed action or event.
(iii) In any event, such notice shall specify:
(A) the record date as of which the holders of record of Class A Common Stock are to be determined, or
(B) the date on which such proposed event is expected to become effective, and the date as of which it is expected that holders of record of Class A Common Stock shall be entitled to exchange their Class A Common Stock for securities or other property deliverable upon such event.
Failure to give such notice, or any defect therein, shall not affect the legality or validity of such action or event.
8 Reacquired Shares. Any shares of Class A Preferred Stock which are converted, purchased, redeemed or otherwise acquired by the Corporation, shall be retired and canceled by the Corporation promptly thereafter. No such shares of Class A Preferred Stock shall upon their cancellation be reissued.
9 Covenant regarding employee equity plans. For so long as any shares of Class A Preferred Stock are outstanding, the Corporation will not:
(a) grant to any employees or officers of the Corporation or any of its Subsidiaries, or to any consultants or service providers to the Corporation or any of its Subsidiaries, or to any director of the Corporation or any of its Subsidiaries, under an employee benefit plan or similar
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arrangement adopted by the Corporation, any options to purchase Class A Common Stock Equivalents having an exercise price per share less than the fair market value of a Common Stock Equivalent on the date of grant of such option as determined in good faith by any reasonable method by the Board, or
(b) except through a stock purchase plan qualified under or with terms and conditions substantially similar to a plan qualified under Section 423 of the Internal Revenue Code, issue or sell to any employees or officers of the Corporation or any of its Subsidiaries, or to any consultants or service providers to the Corporation or any of its Subsidiaries, or to any director of the Corporation or any of its Subsidiaries, or to any stockholder of the Corporation, any Common Stock Equivalents at a price per share below the fair market value of such Common Stock Equivalent on the date of such issuance or sale as determined in good faith by any reasonable method by the Board.
10 Certain Restrictions on Transfer; Legend.
Holders shall not transfer shares of Class A Preferred Stock or Class A Common Stock to any Bank Holding Company, unless, after giving effect to such transfer, such Bank Holding Company:
(i) would, together with its Aggregated Transferors, own no more than 4.9% of any class of Voting Stock of the Corporation or
(ii) is not limited by the Bank Holding Company Act of 1956, as amended, to holding not more than 4.9% of the Voting Stock of the Corporation.
SECOND: The shares of Class A Preferred Stock have been classified and designated by the Board of Directors under the authority contained in the Charter.
THIRD: These Articles Supplementary have been approved by the Board of Directors in the manner and by the vote required by law.
FOURTH: The undersigned President of the Corporation acknowledges these Articles Supplementary to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned President acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.
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IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to be executed under seal in its name and on its behalf by its President and attested to by its Secretary on this 28th of January, 1999.
ATTEST: CAPITAL TRUST, INC. /s/ Edward L. Shugrue III By:/s/ John R. Klopp (SEAL) ----------------------------- ---------------------- Edward L. Shugrue III John R. Klopp Assistant Secretary President 747131.5 - 24 - |
ARTICLES SUPPLEMENTARY
CLASS B 9.5% CUMULATIVE CONVERTIBLE NON-VOTING
PREFERRED STOCK
(par value $.01 per share)
FIRST: Capital Trust, Inc., a Maryland corporation (hereinafter called the "Corporation"), does hereby certify to the State Department of Assessments and Taxation of Maryland pursuant to Section 2-208 of the Maryland General Corporation Law that, under a power contained in Section 6.3 of the charter of the Corporation (the "Charter"), the Board of Directors of the Corporation (the "Board of Directors"), by unanimous written consent dated November 11, 1998, classified and designated 12,639,405 unissued and unclassified shares (the "Shares") of Preferred Stock (as defined in the Charter) as shares of Class B 9.5% Cumulative Convertible Non-Voting Preferred Stock, par value $.01 per share, with the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption of shares as set forth herein, which upon any restatement of the Charter may be made part of Article VI of the Charter, with any necessary or appropriate changes to the enumeration or lettering of sections or subsections thereof:
CLASS B 9.5% CUMULATIVE CONVERTIBLE NON-VOTING
PREFERRED STOCK
1 Designation and Amount. The class of Preferred Stock of the Corporation created hereby shall be designated as Class B 9.5% Cumulative Convertible Non-Voting Preferred Stock, and the number of shares constituting such class shall be 12,639,405, par value $.01 per share.
2 Definitions. As used in these Articles Supplementary, the following terms shall have the following meanings:
(a) "Aggregate Consideration Receivable" by the Corporation in connection with the issuance of any shares of Common Stock or any Common Stock Equivalents means the sum of:
(i) the aggregate consideration paid to the Corporation for such shares of Common Stock or Common Stock Equivalents and
(ii) the aggregate consideration or premiums, if any, stated in such Common Stock Equivalents to be payable for the Common Stock upon the exercise or conversion of such Common Stock Equivalents,
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calculated in each case in accordance with section 7(d)(vii) hereof. In case all or any portion of the consideration to be received by the Corporation may be paid in a form other than cash, the value of such consideration shall be determined in good faith by the Board or a duly authorized committee thereof (irrespective of the accounting treatment thereof), and described in a resolution of the Board or such committee.
(b) "Aggregated Transferor" of a Person shall mean any other Person other than the Corporation who previously held Voting Stock of the Corporation now held by such Person.
(c) "Annual Dividend Rate" has the meaning set forth in section 3(a) hereof.
(d) "Bank Holding Company" means a bank holding company (as defined in
Section 1841 (a) of the Bank Holding Company Act of 1956, as amended)
or any affiliate (as defined in Section 1841 (k) of the Bank Holding
Company Act of 1956, as amended) of any bank holding company (as
defined in Section 1841 (a) of the Bank Holding Company Act of 1956,
as amended).
(e) "Board" means the Board of Directors of the Corporation.
(f) "Business Day" means any day other than a Saturday, a Sunday or a day on which banking institutions in the City of New York, New York are authorized or obligated by law or executive order to close.
(g) "Charter" means the charter, as defined in Section 1- 101(e) of the Maryland General Corporation Law, of the Corporation.
(h) "Class A Articles Supplementary" means Articles Supplementary filed with and accepted for record by the State Department of Assessment and Taxation of Maryland on or about January 28, 1999, establishing the Class A Preferred Stock pursuant to Article VI of the Charter, as the same may be amended, supplemented or modified from time to time in accordance with the terms hereof and pursuant to applicable law and upon any restatement of the Charter shall mean the terms of the Class A Preferred Stock as set forth in Article VI of the Charter.
(i) "Class A Common Stock" means the class A common stock, par value $.01 per share, of the Corporation, having the designations and rights, qualifications, limitations and restrictions set forth in the Charter.
(j) "Class A Preferred Stock" means the Class A 9.5% Cumulative Convertible Preferred Stock, par value $.01
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per share, of the Corporation, established pursuant to the Class A Articles Supplementary.
(k) "Class B Articles Supplementary" means these Articles Supplementary filed with and accepted for record by the State Department of Assessment and Taxation of Maryland on or about January 28, 1999, establishing the Class B Preferred Stock pursuant to Article VI of the Charter, as the same may be amended, supplemented or modified from time to time in accordance with the terms hereof and pursuant to applicable law and upon any restatement of the Charter shall mean the terms of the Class B Preferred Stock as set forth in Article VI of the Charter.
(l) "Class B Common Stock" means the class B common stock, par value $.01 per share, of the Corporation, having the designations and rights, qualifications, limitations and restrictions set forth in the Charter.
(m) "Class B Preferred Stock" means the Class B 9.5% Cumulative Convertible Non-Voting Preferred Stock, par value $.01 per share, of the Corporation, established pursuant to these Articles Supplementary.
(n) "Common Stock" means, collectively, the Class A Common Stock and the Class B Common Stock.
(o) "Common Stock Equivalents" means, without double counting:
(i) Common Stock, where one share of Common Stock shall constitute one Common Stock Equivalent,
(ii) Stock of the Corporation (including without limitation the Preferred Stock) convertible into Common Stock, where any one share of Stock of the Corporation shall constitute a number of Common Stock Equivalents equal to the number of shares of Common Stock issuable in respect of such Stock,
(iii) any rights, warrants, options and convertible, exchangeable or exercisable securities entitling the holder thereof to subscribe for or purchase any Common Stock, where any such rights, warrants, options and convertible, exchangeable or exercisable securities shall constitute a number of Common Share Equivalents equal to the number of shares of Common Stock issuable in respect of such rights, warrants, options or convertible, exchangeable or exercisable securities, and
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(iv) any stock appreciation rights entitling the holders thereof to any interest in an increase in value, however measured, of Common Stock, where any such stock appreciation rights shall constitute a number of Common Share Equivalents equal to the shares of Common Stock equivalent, as nearly as it may be calculated, to such share appreciation rights.
(p) "Conversion Date" has the meaning set forth in section 7(b) hereof.
(q) "Conversion Notice" has the meaning set forth in section 7(b) hereof.
(r) "Conversion Price" has the meaning set forth in section 7(a) hereof.
(s) "Corporation" means Capital Trust, Inc., a Maryland corporation.
(t) "D/E Ratio" means, as of the date of determination, the ratio of (i) the sum of (x) the total Indebtedness of the Corporation and its consolidated Subsidiaries as reflected on the Corporation's most recent regularly prepared consolidated balance sheet, plus (y) all Indebtedness issued by the Corporation and its consolidated subsidiaries since the date of such consolidated balance sheet less all Indebtedness retired or repurchased by the Corporation and its subsidiaries since that date, plus (z) the Corporation's pro rata share, based upon its percentage equity ownership interest therein, of aggregate total Indebtedness of Equity Affiliates, to (ii) the excess of total assets (including the Corporation's equity in its Equity Affiliates) over total liabilities of the Corporation and its subsidiaries, as reflected on the Corporation's most recent regularly prepared consolidated balance sheet, in each case determined in accordance with GAAP and after giving effect to the incurrence of any proposed Indebtedness and the application of proceeds of such Indebtedness.
(u) "Dividend Payment Date" has the meaning set forth in section 3(a) hereof.
(v) "Dividend Period" has the meaning set forth in section 3(a) hereof.
(w) "Effective Purchase Price per Share" at which the Corporation issues any shares of Common Stock or any Common Stock Equivalents means an amount equal to:
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(i) the Aggregate Consideration Receivable by the Corporation in connection with the issuance of such shares of Common Stock or Common Stock Equivalents divided by
(ii) the number of shares of Common Stock and Common Stock Equivalents so issued.
(x) "Equity Affiliate" means any Person in which the Corporation or any of its consolidated Subsidiaries has an equity interest which is or, in accordance with GAAP, should be accounted for on the equity method in the Corporation's consolidated financial statements.
(y) "Exempted Transaction" means each and any of the following:
(i) the issuance, from the Issuance Date through the date of the Exempted Transaction, of Common Stock Equivalents to employees or officers of the Corporation or any of its Subsidiaries, or to consultants or service providers to the Corporation or any of its Subsidiaries, or to directors of the Corporation or any of its Subsidiaries, under an employee benefit plan or similar arrangement adopted by the Corporation in an amount not to exceed 10% of the aggregate number of Common Stock Equivalents outstanding on the date of such Exempted Transaction,
(ii) the issuance of any shares of Common Stock or Preferred Stock of the Corporation upon the conversion of any shares of Common Stock or Preferred Stock, and
(iii) the issuance of any Stock of the Corporation in exchange, in whole or in part, for any acquisition by the Corporation of shares of stock or other assets of any kind.
(z) "Fair Market Value" of a share of Common Stock means, as of any date, the average of the closing prices of Class A Common Stock for the 20 consecutive Trading Days next preceding the date five days prior to the date in question. The closing price for each day shall be:
(i) if the Class A Common Stock is listed or admitted for trading on the New York Stock Exchange or any other national securities exchange, the last sale price, or the closing bid price if no sale occurred, of one share of Class A Common Stock on the New York Stock Exchange or, if not then listed on the New York Stock Exchange, the principal securities exchange on which the Class
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A Common Stock is listed or admitted for trading; or
(ii) if not listed or admitted for trading as described in clause (i) of this section 2(z), the average of the closing sale price or, in the absence of a closing sale price, the average of the highest bid and lowest asked prices of one share of Class A Common Stock quoted in the NASDAQ National Market System or any similar system of automated dissemination of quotations of securities prices then in common use, if so quoted; or
(iii) if not quoted as described in clause (ii) of this section 2(z), the average of the highest bid and lowest offered quotations for one share of Class A Common Stock as reported by the National Quotation Bureau Incorporated if at least two securities dealers have inserted both bid and offered quotations for shares of Class A Common Stock on at least five of the 20 consecutive Trading Days next preceding the date five days prior to the date in question.
If none of the conditions set forth above is met, the closing price of one share of Class A Common Stock on any day or the average of such closing prices for any period shall be the fair market value of one share of Common Stock for such day or period as determined in good faith by the Board.
"Fair Market Value" of a share of Preferred Stock means the Fair Market Value of a number of fully paid and nonassessable shares of Class A Common Stock equal to the ratio of (a) the Liquidation Preference for such Preferred Stock plus an amount equal to the dividends per share accrued and unpaid thereon as of the date of such determination to (b) the Conversion Price in effect as of the date of such determination.
(aa) "GAAP" means those generally accepted accounting principles and practices which are recognized as such by the American Institute of Certified Public Accountants acting through its Accounting Principles Board or by the Financial Accounting Standards Board or through other appropriate boards or committees thereof and which are consistently applied for all periods after the date hereof so as to properly reflect the financial condition, results of operations and changes in financial position of any Person, except that any accounting principle or practice required to be changed by such Accounting Principles Board or Financial Accounting Standards Board (or other appropriate board or committee of such Boards)
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in order to continue as a generally accepted accounting principle or practice may be so changed.
(bb) "Holder" of a share of Class A Preferred Stock or a share of Class B Preferred Stock means the Person in whose name such share of Class A Preferred Stock or Class B Preferred Stock is registered on the books of the Corporation.
"Holder" of a share of Class A Common Stock or a share of Class B Common Stock means the Person in whose name such share of Class A Common Stock or Class B Common Stock is registered on the books of the Corporation.
(cc) "Incur" means to issue, assume, guarantee, incur or otherwise become liable for.
(dd) "Indebtedness" means, with respect to any Person, without duplication, any liability of such Person (i) for borrowed money, (ii) evidenced by bonds, debentures, notes or other similar instruments, (iii) constituting capitalized lease obligations, (iv) incurred or assumed as the deferred purchase price of property, or pursuant to conditional sale obligations and title retention agreements (but excluding trade accounts payable arising in the ordinary course of business) and (v) which are secured by any Lien on any property or asset of such first referred to Person.
(ee) "Issuance Date" means, with respect to any Preferred Stock, the date on which such Preferred Stock is issued by the Corporation.
(ff) "Junior Stock" means Common Stock and any other class or series of Stock of the Corporation now or hereafter authorized, issued or outstanding which is subject, under the terms of the Charter, to the following restrictions and limitations:
(i) no dividend or distribution can be declared or paid on the shares of such class or series unless all accrued dividends and other amounts then due with respect to the Preferred Stock shall have been paid in full,
(ii) in the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the Holders of the Preferred Stock shall be entitled to receive out of assets of the Corporation available for distribution to shareholders, the amount specified in section 4 hereof, before any payment shall be made or any
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assets distributed to the holders of such other class or series of Stock of the Corporation, and
(iii) shares of such class or series may not be redeemed under any circumstances, either at the option of the Corporation or of any holder thereof, unless all of the outstanding Preferred Stock have theretofore been redeemed or converted.
(gg) "Lien" means any lien, mortgage, deed of trust, pledge, charge or other encumbrance of any kind, including, without limitation, any conditional sale or other title retention agreement and any lease in the nature thereof.
(hh) "Liquidation Preference" means, with respect to each share of Preferred Stock, an amount equal to $2.69.
(ii) "Merger" means the simultaneous mergers of Capital Trust, a California business trust, with and into Captrust Limited Partnership, a Maryland limited partnership ("Captrust"), and of Captrust with and into the Corporation.
(jj) "Person" means an individual, a corporation, a partnership, a limited liability company, a joint venture, an association, a joint-stock company, a trust, a business trust, a government or any agency or any political subdivision, any unincorporated organization or any other entity.
(kk) "Preferred Stock" means, collectively, the Class A Preferred Stock and the Class B Preferred Stock.
(ll) "Predecessor" means Capital Trust, a California business trust, as the predecessor of the Corporation in the Merger.
(mm) "Restricted Payment" has the meaning set forth in section 3(c) hereof.
(nn) "Stock" means any shares of stock, rights, warrants or options to purchase shares of stock, securities convertible into or exchangeable or exercisable for shares of stock and participations in or other equivalents of or interests (other than security interests) in shares of stock, however designated and whether voting or nonvoting, of any Person.
(oo) "Subsidiary" means:
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(i) any corporation 50% or more of the Voting Stock of which is owned, directly or indirectly, by the Corporation, or
(ii) any other Person whose accounts are required under GAAP to be included in the Corporation's consolidated financial statements.
(pp) "Trading Day" means, with respect to the Class A Common Stock: (i) if the Class A Common Stock is listed or admitted for trading on any national securities exchange, days on which such national securities exchange is open for business; (ii) if the Class A Common Stock is not listed or admitted for trading on any national securities exchange, but quoted on the NASDAQ National Market System, any similar system of automated dissemination of quotations of securities prices or the National Quotation Bureau Incorporated, each day on which quotations may be made on such system; or (iii) if the Class A Common Stock is not quoted on any system or listed or admitted for trading on any securities exchange, a Business Day.
(qq) "Voting Stock" means, with respect to the Corporation, all classes of Stock of the Corporation then outstanding and normally entitled to vote for the election of directors of the Corporation. Any reference to a percentage of Voting Stock shall refer to the percentage of votes eligible to be cast for the election of directors which are attributable to the applicable Voting Stock.
3 Dividends.
(a) Payment of Dividends. The Holders of the Class B Preferred Stock shall be entitled to receive, when, as and if declared by the Board, out of funds legally available therefor, cash dividends per share at the rate of 9.5% per annum on the Liquidation Preference (the "Annual Dividend Rate"). Such dividends shall accrue (whether or not declared) from and including the Issuance Date to and including the date on which the Liquidation Preference is paid on such shares or on which such shares are converted or redeemed and, to the extent not paid for any Dividend Period, will be cumulative. Dividends on the Class B Preferred Stock shall accrue on a daily basis whether or not the Corporation shall have earnings or surplus at the time.
Semi-annual dividend periods (each a "Dividend Period") shall commence on and include the sixteenth day of December and June of each year and shall end on and include the fifteenth day of June and December, respectively, of such or the following year; provided
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however, that the first Dividend Period shall be deemed to commence on December 16, 1998 and shall end on and include June 15, 1999. Dividends on the Class B Preferred Stock shall be payable, when, as and if declared, semi-annually, in arrears, no later than December 26 and June 25 of each year commencing June 25, 1999 (each such date, a "Dividend Payment Date"), except that if any such date is not a Business Day, then such dividend shall be paid on the next succeeding Business Day. Each such dividend shall be payable to Holders of Class B Preferred Stock at the close of business on the record date established by the Board, which record date shall be not more than 60 days prior to the date fixed for payment thereof.
The amount of dividends payable per share of Class B Preferred Stock for each full Dividend Period shall be computed by applying the Annual Dividend Rate to the Liquidation Preference and dividing such amount by two. The amount of dividends payable for any period shorter than a full Dividend Period shall be computed on the basis of actual days elapsed and a 360-day year consisting of twelve 30 day months.
The Corporation shall not declare or pay or set apart for payment any dividends or make any other distributions on either class of Preferred Stock unless the Corporation simultaneously declares or pays or sets apart for payment dividends or makes distributions, at the same rate, each share being treated equally, on the other class of Preferred Stock.
(b) Distribution of Partial Dividend Payments. Except as otherwise provided in these Articles Supplementary, if on any Dividend Payment Date the Corporation pays less than the total amount of dividends then accrued with respect to Preferred Stock, the amount so paid shall be distributed ratably, each share being treated equally, among the Holders of the Preferred Stock based upon the number shares of Preferred Stock then held by each such Holder.
(c) Limitations on Certain Payments. Unless all accrued dividends and other amounts then accrued through the end of the last Dividend Period and unpaid with respect to the Preferred Stock shall have been paid in full, the Corporation shall not declare or pay or set apart for payment any dividends or make any other distributions on, or make any payment on account of the purchase, redemption, exchange or other retirement of, any Stock of the Corporation other than the Preferred Stock (each, a "Restricted Payment"); provided, however, that a "Restricted Payment" shall not include:
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(i) any dividend or distribution payable solely in Junior Stock, or
(ii) the acquisition of any Stock of the Corporation in exchange solely for Junior Stock.
4 Liquidation Preference.
In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the Holders of Preferred Stock shall be entitled to receive out of assets of the Corporation available for distribution to stockholders, an amount per share equal to the Liquidation Preference plus the amount of all dividends per share accrued and unpaid thereon through the date of final distribution to stockholders, whether or not declared, before any payment shall be made or any assets distributed to the holders of any other class or series of Stock of the Corporation.
If the assets and funds thus distributed among the Holders of Preferred Stock shall be insufficient to permit the payment to such Holders of the full preferential amount described above, then the entire assets and funds of the Corporation legally available for distribution shall be distributed ratably, each share being treated equally, among the Holders of Preferred Stock based on the number of shares of Preferred Stock then held by each such Holder.
In determining whether a distribution of any dividend or the redemption or other acquisition of Stock of the Corporation is permitted under Maryland law, no effect shall be given to amounts, to the extent such amounts would be needed, if the Corporation were to be liquidated, dissolved or wound up at the time of such distribution, to satisfy the preferential rights upon liquidation, dissolution or winding up of the Corporation of Holders of the Class B Preferred Stock.
5 Consolidation, Merger and Sale of Assets, etc. Unless all of the outstanding shares of Preferred Stock shall have been redeemed or converted on or prior to the effective date of any consolidation, merger or transfer referred to below involving the Corporation, without the approval of the Holders of a majority of the outstanding shares of Preferred Stock, voting together as a single class, but voting together as a separate class from the Common Stock, the Corporation shall not consolidate with or merge into, or transfer all or substantially all of its assets to, another Person unless:
(a) in the case of a merger or consolidation, the Corporation is the surviving entity, the rights and preferences of the Preferred Stock are not modified, the Corporation, as the surviving entity, does not have outstanding any shares of Stock that are not shares of Junior Stock, and, immediately after the consummation of such merger or
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consolidation and after giving effect thereto, the D/E Ratio of the Corporation shall not exceed 5:1, or
(b) the surviving, resulting or acquiring Person is a Person organized under the laws of the United States, any state thereof or the District of Columbia, or a Person organized under the laws of a foreign jurisdiction whose equity securities are listed on a national securities exchange in the United States or authorized for quotation on the NASDAQ National Market System, the Corporation shall make effective provision such that, upon consummation of such transaction, the Holders of Preferred Stock shall receive preferred shares of the surviving entity having substantially identical terms as the Preferred Stock surrendered by them, the surviving, resulting or acquiring Person does not have outstanding any shares of Stock that are not shares of Junior Stock and, immediately after the consummation of such consolidation, merger or transfer, the D/E Ratio of such Person shall not exceed 5:1.
6 Voting Rights of Preferred Stock.
(a) Voting Rights of the Class B Preferred Stock. Except for the voting rights described in sections 5 and 6(b) hereof, the Class B Preferred Stock shall not have voting rights and shall not be counted in determining the presence of a quorum.
(b) Preferred Stock Class Vote. The affirmative vote of the Board and the Holders of a majority of the outstanding shares of Preferred Stock voting together as a single class, but voting together as a separate class from the Common Stock, shall be required in order:
(i) to amend, alter or repeal any of the provisions of these Articles Supplementary or of the Class A Article Supplementary;
(ii) to authorize, create or issue any class or series of Stock of the Corporation that are not Junior Stock; and
(iii) for the Corporation to Incur any Indebtedness if the Corporation's D/E Ratio would then exceed 5:1.
Any Preferred Stock owned, directly or indirectly, by the Corporation or any of its Subsidiaries shall not have voting rights hereunder and shall not be counted in determining the presence of a quorum.
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7 Conversion Right.
(a) Right of Conversion. Each share of Class B Preferred Stock shall be convertible at the option of the Holder thereof at any time and from time to time in whole or in part into:
(i) a number of fully paid and nonassessable shares of Class B Common Stock equal to the ratio of:
(x) the Liquidation Preference of such Class B Preferred Stock plus an amount equal to all dividends per share accrued and unpaid thereon as of the Conversion Date to
(y) the Conversion Price in effect on the Conversion Date, or
(ii) an equal number of fully paid and nonassessable shares of Class A Preferred Stock, if the Holder (a) would not, together with such Holder's Aggregated Transferors, upon the issuance of such Class A Preferred Stock, own more than 4.9% of any class of Voting Stock of the Corporation or (b) is not limited by the Bank Holding Company Act of 1956, as amended, to holding no more than 4.9% of any class of Voting Stock of the Corporation,
or into such additional or other securities, cash or property and at such other rates as required in accordance with the provisions of this section 7.
For purposes of these Articles Supplementary, the "Conversion Price" shall initially be $2.69 per share and shall be adjusted from time to time in accordance with the provisions of this section 7.
(b) Conversion Procedures. In order to exercise the conversion right, the
Holder of any shares of Class B Preferred Stock to be converted in
whole or in part shall surrender the certificate or certificates
representing such shares to the Corporation and shall give written
notice to the Corporation ("Conversion Notice") that the Holder elects
to convert such shares or the portion thereof specified in said notice
into shares of Class B Common Stock or Class A Preferred Stock, as
provided herein and as specified by the Holder in the Conversion
Notice. The Conversion Notice shall also (i) state the name or names
(with address) in which the certificates for Class B Common Stock or
Class A Preferred Stock, as the case may be, shall be issued and (ii)
if Class B Preferred Stock is to be converted into Class A Preferred
Stock, contain a certification by the Holder that the Holder either
(a) will not, together with such Holder's
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Aggregated Transferors, upon the issuance of such Class A Preferred Stock, own more than 4.9% of any class of Voting Stock of the Corporation or (b) is not limited by the Bank Holding Company Act of 1956, as amended, to holding no more than 4.9% of any class of Voting Stock of the Corporation. Each certificate representing Class B Preferred Stock surrendered for conversion shall, unless the shares issuable on conversion are to be issued in the same name as the registration of such Class B Preferred Stock, be duly endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Corporation duly executed by, the Holder or its duly authorized attorney.
As promptly as practicable after receipt of a Conversion Notice and surrender of the certificate or certificates representing the shares of Class B Preferred Stock relating thereto, the Corporation shall issue and deliver to such Holder (or upon the written order of such Holder) a certificate or certificates for the number of full shares of Class B Common Stock, or Class A Preferred Stock, as specified in the Conversion Notice, issuable upon the conversion of such Class B Preferred Stock or portion thereof in accordance with the provisions of this section 7, and a check or cash in respect of any fractional shares issuable upon such conversion, as provided in section 7(c) hereof. In the event that less than all the shares of Class B Preferred Stock represented by a certificate are to be converted, the Corporation shall issue and deliver or cause to be issued and delivered to (or upon the written order of) the Holder of the Class B Preferred Stock so surrendered, without charge to such Holder, a new certificate or certificates representing a number of shares of Class B Preferred Stock equal to the unconverted portion of the surrendered certificate.
Each conversion shall be deemed to have been effected on the date (the "Conversion Date") on which the certificate or certificates representing such shares of Class B Preferred Stock shall have been surrendered to the Corporation or its transfer agent and a Conversion Notice with respect to such shares shall have been received by the Corporation, as described above. Any Person in whose name any certificate or certificates for Class B Common Stock or Class A Preferred Stock shall be issuable upon conversion shall be deemed to have become the holder of record of the shares represented thereby on the Conversion Date, provided, however, if the certificate or certificates evidencing such Class B Preferred Stock are surrendered on any date when the share transfer books of the Corporation shall be closed, the Holder shall constitute the Person in whose name the certificates are to be issued as the record holder thereof for all
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purposes until the next succeeding day on which such share transfer books are open, but such conversion shall be at the Conversion Price in effect on the date on which such certificate or certificates shall have been surrendered.
Except as otherwise provided in this section 7, no payment or adjustment will be made for dividends or other distributions with respect to any Class B Common Stock or Class A Preferred Stock issuable upon conversion of Class B Preferred Stock as provided herein.
(c) Cash Payments in Lieu of Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon conversion of Preferred Stock. If any fractional share, would, but for this section 7(c), be issuable upon the conversion of any Class B Preferred Stock, the Corporation shall make a payment therefor in cash on the first Business Day immediately preceding the Conversion Date equal to the Fair Market Value of such fractional share.
(d) Adjustment of Conversion Price for Conversion into Common Stock. The Conversion Price with respect to the conversion of the Class B Preferred Stock into Class B Common Stock shall be adjusted from time to time by the Corporation as follows:
(i) in the event that the Corporation shall at any time after the Issuance Date:
(A) declare a dividend or make a distribution on the shares of Class B Common Stock in shares of Class B Common Stock,
(B) subdivide or reclassify the shares of Class B Common Stock into a greater number of shares,
(C) combine the shares of Class B Common Stock into a smaller number of shares,
(D) pay a dividend or make a distribution on the shares of Class B Common Stock in any class of its Stock other than shares of Class B Common Stock, or
(E) reclassify the shares of Class B Common Stock other than as set forth in section 7(d)(i)(B),
then the conversion right and the Conversion Price in effect immediately prior thereto shall be adjusted so that the Holder of any shares of
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Class B Preferred Stock thereafter surrendered for conversion into shares of Class B Common Stock shall be entitled to receive the number of shares of Class B Common Stock or other Stock of the Corporation which such Holder would have owned or have been entitled to receive after the happening of any of the events described above had such shares of Class B Preferred Stock been converted into shares of Class B Common Stock immediately prior to the happening of such event. An adjustment made pursuant to this section 7(d)(i) shall become effective immediately after the record date in the case of a dividend or distribution and shall become effective immediately after the effective date in the case of subdivision, combination or reclassification. Such adjustment shall be made successively whenever any event referred to above shall occur.
(ii) In the event that the Corporation shall at any time after the Issuance Date issue any Common Stock or any Common Stock Equivalents other than in an Exempted Transaction, at an Effective Purchase Price per Share less than the Conversion Price in effect immediately prior to the date of such issuance, then such Conversion Price shall be adjusted to equal:
(A) the sum of:
(1) the product of:
(a) the number of shares of Common Stock and Common Stock Equivalents outstanding immediately prior to such issuance and
(b) the Conversion Price in effect immediately prior to such issuance and
(2) the Aggregate Consideration Receivable by the Corporation in connection with such issuance
divided by:
(B) the sum of:
(1) the number of shares of Common Stock and Common Stock Equivalents outstanding immediately prior to such issuance and
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(2) the number of additional shares of Common Stock and Common Stock Equivalents so issued.
For example, if on any given date the Corporation has 20,000,000 shares of Common Stock and Common Stock Equivalents outstanding, the Corporation issues warrants exercisable at $1 per share to purchase an additional 1,000,000 shares of Common Stock for a purchase price of $1 per warrant, and the Conversion Price in effect on such date is $2.69, then the Conversion Price shall be adjusted to equal $2.66, which is calculated as follows:
$2.66 per share =
[(20,000,000shares x $2.69/share) + $2,000,000]/
(20,000,000 shares + 1,000,000 shares).
Such adjustment shall be made successively whenever any shares, rights, warrants, options, convertible, exchangeable or exercisable securities or share appreciation rights are issued at an Effective Purchase Price per Share that is less than the Conversion Price in effect on the date of such issuance. To the extent that any right, option, warrant, convertible or exercisable security or share appreciation right expires without having been converted or exercised, the Conversion Price then in effect shall be readjusted to the Conversion Price which then would be in effect if such rights, options, warrants or convertible, exchangeable or exercisable securities or share appreciation rights had not been issued, but such readjustment shall not affect the number of shares of Common Stock or other Stock of the Corporation delivered upon any conversion prior to the date such readjustment is made.
(iii) In the event that the Corporation shall distribute to all holders of its Class B Common Stock any of its assets (other than cash dividends payable on or after the date of consummation of the Merger which together with all prior cash dividends of the Corporation and the Predecessor paid on or after April 1, 1997, do not exceed the amount of retained earnings of the Corporation accrued on or after April 1, 1997 and on or prior to the date of payment of such dividends) or debt securities, or rights, options, warrants or convertible, exchangeable or exercisable securities of the Corporation (including securities issued for cash, but excluding distributions of Stock of the
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Corporation referred to in section 7(d)(i) hereof, then in each such case, the Conversion Price shall be adjusted to equal the Conversion Price in effect immediately prior to such distribution less an amount equal to the then fair market value (as reasonably determined by the Board, in good faith and as described in a resolution of the Board) of the portion of the assets or debt securities of the Corporation so distributed or of such rights, options, warrants or convertible, exchangeable or exercisable securities applicable to one share of Class B Common Stock. Such adjustment shall become effective immediately after the record date for the determination of shares entitled to receive such distribution. Notwithstanding the foregoing, no adjustment of the Conversion Price shall be made upon the distribution to holders of Common Stock of such rights, options, warrants or convertible, exchangeable or exercisable securities, assets or debt securities if the plan or arrangement under which such rights, options, warrants or convertible, exchangeable or exercisable securities, assets or debt securities are issued provides for their issuance to Holders of Class B Preferred Stock in the same pro rata amounts upon conversion thereof. Such adjustment shall be made successively whenever any event listed above shall occur.
(iv) Anything in this section 7(d) to the contrary notwithstanding,
the Corporation shall be entitled to make such reductions in the
Conversion Price, in addition to those required by this section
7(d), as it in its reasonable discretion shall determine to be
advisable in order that any share dividends, subdivision of
shares, distribution of rights to purchase shares or securities,
or distribution of securities convertible into or exchangeable
for shares hereafter made by the Corporation to its
stockholders, shall not be taxable.
(v) Whenever the Conversion Price is adjusted as provided in this section 7(d), or the Class B Preferred Stock becomes convertible into shares, securities, property or assets pursuant to section 7(e) hereof, or the Corporation reduces the Conversion Price pursuant to section 7(f) hereof, the Corporation shall prepare a notice of such adjustment of the Conversion Price setting forth the adjusted Conversion Price (or describing such event, as the case may be) and the date on which such adjustment (or event)
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becomes effective, and setting forth in reasonable detail the facts requiring such adjustment and the calculation of such adjustment (or describing the shares, securities, property or assets into which the Class B Preferred Stock shall become convertible), and shall mail such notice of adjustment to all Holders of Class B Preferred Stock as set forth in section 7(i) hereof.
(vi) In any case in which this section 7(d) provides that an adjustment shall become effective immediately after a record date for an event, the Corporation may defer until the occurrence of such event:
(A) issuing to the Holder of any Class B Preferred Stock converted after such record date and before the occurrence of such event the additional shares of Class B Common Stock issuable upon such conversion by reason of the adjustment required by such event over and above the shares of Class B Common Stock issuable upon such conversion before giving effect to such adjustment, and
(B) paying to such Holder any amount in cash in lieu of any fractional share of Class B Common Stock pursuant to section 7(c).
(vii) For purposes of any computations of Aggregate Consideration Receivable or other consideration pursuant to this section 7(d), the following shall apply:
(A) in the case of the issuance of Common Stock or Common Stock Equivalents for cash, the consideration shall be the amount of such cash, provided that in no case shall any deduction be made for any commissions, discounts or other expenses incurred by the Corporation for any underwriting of the issue or otherwise in connection therewith; and
(B) in the case of the issuance of Common Stock or Common Stock Equivalents for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair market value thereof as reasonably determined in good faith by the Board or a duly authorized committee thereof (irrespective of the accounting treatment
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thereof), and described in a resolution of the Board or such committee.
(viii) If, after an adjustment a Holder of Class B Preferred Stock may, upon conversion of such security, receive two or more classes of Stock of the Corporation, the Corporation shall determine on a fair basis the allocation of the adjusted Conversion Price between such classes of Stock of the Corporation. After such allocation, the conversion right and the Conversion Price of each class of Stock shall thereafter be subject to adjustment on terms comparable to those applicable to Class B Common Stock in this section 7.
(e) Effect of Reclassification, Consolidation, Merger or Sale. Unless all of the shares of Class B Preferred Stock shall have been redeemed or converted on or prior to the effective date of any of the events referred to in clauses (i), (ii) and (iii) of this section 7(e), if any of the following events occur, namely:
(i) any reclassification or change of outstanding shares of Class B Common Stock issuable upon conversion of the Class B Preferred Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination),
(ii) any consolidation or merger of the Corporation with another Person shall be effected as a result of which holders of Class B Common Stock issuable upon conversion of the Class B Preferred Stock shall be entitled to receive shares, securities or other property or assets (including cash) with respect to or in exchange for such Class B Common Stock, or
(iii) any sale or conveyance of the properties and assets of the Corporation as, or substantially as, an entirety to any other Person,
then the Corporation or such successor or purchasing Person, as the case may be, shall make provisions in its constituent documents to establish that each share of Class B Preferred Stock then outstanding (or the successor shares referred to in section 5(b) hereof) shall be convertible into the kind and amount of shares and other securities or property or assets (including cash) receivable upon such reclassification, change, consolidation, merger, sale or conveyance by a holder of the number of shares of Class B
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Common Stock issuable upon conversion of such Class B Preferred Stock immediately prior to such reclassification, change, consolidation, merger, sale or conveyance, each share of Class B Preferred Stock being treated equally. Such provisions shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this section 7.
If this section 7(e) applies with respect to a transaction, section 7(d) hereof shall not apply with respect to that transaction. The above provisions of this section 7(e) shall similarly apply to successive reclassifications, consolidations, mergers and sales.
(f) Subdivision, Reclassification or Combination of Preferred Stock. The Corporation shall not (i) subdivide or reclassify the Class B Preferred Stock or (ii) combine the Class B Preferred Stock, unless the Corporation simultaneously subdivides, reclassifies or combines, at the same rate, each share being treated equally, all classes of Preferred Stock.
(g) Taxes on Shares Issued. The issuance of share certificates upon conversion of Class B Preferred Stock shall be made without charge to the converting Holder for any tax in respect of the issuance thereof.
(h) Shares to be Fully Paid. The Corporation covenants that all shares of Class B Common Stock or Class A Preferred Stock which may be issued upon conversion of Class B Preferred Stock will upon issuance be validly issued, fully paid and nonassessable by the Corporation and free from all taxes, liens and charges with respect to the issuance thereof.
(i) Notice to Holders Prior to Certain Actions.
(i) In the event:
(A) that the Corporation shall take any action that would require an adjustment in the Conversion Price pursuant to section 7(d)(i) or (iii) hereof;
(B) that any event described in section 7(e) hereof shall occur;
(C) the Corporation reduces the Conversion Price pursuant to section 7(f) hereof; or
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(D) of the voluntary or involuntary dissolution, liquidation or winding-up of the Corporation;
the Corporation shall cause notice of such proposed action or event to be mailed to each Holder of record of Class B Preferred Stock at its address appearing on the share transfer books of the Corporation, as promptly as possible but in any event no later than the later of (x) the date 30 days prior to the record date for such proposed action or the effective date of such event or (y) the date on which the Corporation first publicly announces such proposed action or event.
(ii) In the event that the Corporation shall take any action that would require an adjustment in the Conversion Price, pursuant to section 7(d)(ii) hereof, the Corporation shall cause notice of such proposed action or event to be mailed to each Holder of record of Class B Preferred Stock at its address appearing on the share transfer books of the Corporation, as promptly as possible but in no event later than the date that the Corporation provides public notice of such proposed action or event.
(iii) In any event, such notice shall specify:
(A) the record date as of which the holders of record of Class B Common Stock are to be determined, or
(B) the date on which such proposed event is expected to become effective, and the date as of which it is expected that holders of record of Class B Common Stock shall be entitled to exchange their Class B Common Stock for securities or other property deliverable upon such event.
Failure to give such notice, or any defect therein, shall not affect the legality or validity of such action or event.
8 Reacquired Shares. Any shares of Class B Preferred Stock which are converted, purchased, redeemed or otherwise acquired by the Corporation, shall be retired and canceled by the Corporation promptly thereafter. No such shares of Class B Preferred Stock shall upon their cancellation be reissued.
753363.5
9 Covenant regarding employee equity plans. For so long as any shares of Class B Preferred Stock are outstanding, the Corporation will not:
(a) grant to any employees or officers of the Corporation or any of its Subsidiaries, or to any consultants or service providers to the Corporation or any of its Subsidiaries, or to any director of the Corporation or any of its Subsidiaries, under an employee benefit plan or similar arrangement adopted by the Corporation, any options to purchase Class B Common Stock Equivalents having an exercise price per share less than the fair market value of a Common Stock Equivalent on the date of grant of such option as determined in good faith by any reasonable method by the Board, or
(b) except through a stock purchase plan qualified under or with terms and conditions substantially similar to a plan qualified under Section 423 of the Internal Revenue Code, issue or sell to any employees or officers of the Corporation or any of its Subsidiaries, or to any consultants or service providers to the Corporation or any of its Subsidiaries, or to any director of the Corporation or any of its Subsidiaries, or to any stockholder of the Corporation, any Common Stock Equivalents at a price per share below the fair market value of such Common Stock Equivalent on the date of such issuance or sale as determined in good faith by any reasonable method by the Board.
10 Certain Restrictions on Transfer; Legend.
(a) The Class B Preferred Stock and the Class B Common Stock may be transferred by a Bank Holding Company only:
(i) in accordance with applicable federal and state securities laws and
(ii) unless the Corporation shall have received an opinion of counsel stating that the restriction in this section 10(a)(ii) is not applicable under the circumstances:
(A) in a widely dispersed offering in which no more than 2% of the outstanding Class B Common Stock and Stock of the Corporation convertible into Class B Common Stock are transferred to any one holder, or
(B) to a transferee who has agreed in writing acceptable to the Corporation to be bound by the restrictions set forth in this section 10.
753363.5
(b) Holder agrees that substantially the following legend shall be placed on the certificates representing any Class B Preferred Stock and Class B Common Stock;
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE LIMITATIONS UPON TRANSFER AND CONVERSION CONTAINED IN THE ARTICLES SUPPLEMENTARY CREATING THE CLASS B 9.5% CUMULATIVE CONVERTIBLE NON-VOTING PREFERRED STOCK AND THE BY-LAWS OF THE CORPORATION (COPIES OF WHICH ARE ON FILE AT THE OFFICE OF THE CORPORATION)."
SECOND: The shares of Class B Preferred Stock have been classified and designated by the Board of Directors under the authority contained in the Charter.
THIRD: These Articles Supplementary have been approved by the Board of Directors in the manner and by the vote required by law.
FOURTH: The undersigned President of the Corporation acknowledges these Articles Supplementary to be the corporate act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned President acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.
753363.5
IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to be executed under seal in its name and on its behalf by its President and attested to by its Secretary on this 28th of January, 1999.
ATTEST: CAPITAL TRUST, INC. /s/ Edward L. Shugrue III By:/s/ John R. Klopp (SEAL) ------------------------ ----------------------- Edward L. Shugrue III John R. Klopp Assistant Secretary President |
753363.5
Exhibit 3.2
CAPITAL TRUST, INC.
AMENDED AND RESTATED
BYLAWS
TABLE OF CONTENTS ----------------- Page ARTICLE I OFFICES.........................................................1 Section 1. PRINCIPAL OFFICE....................................1 Section 2. ADDITIONAL OFFICES..................................1 ARTICLE II MEETINGS OF STOCKHOLDERS........................................1 Section 1. PLACE...............................................1 Section 2. ANNUAL MEETING......................................1 Section 3. SPECIAL MEETINGS....................................1 Section 4. NOTICE..............................................1 Section 5. SCOPE OF NOTICE.....................................2 Section 6. ORGANIZATION........................................2 Section 7. QUORUM..............................................2 Section 8. VOTING..............................................2 Section 9. PROXIES.............................................2 Section 10. VOTING OF STOCK BY CERTAIN HOLDERS..................3 Section 11. INSPECTORS..........................................4 Section 12. NOMINATIONS AND PROPOSALS BY STOCKHOLDERS........................................4 Section 13. VOTING BY BALLOT....................................6 ARTICLE III DIRECTORS.......................................................6 Section 1. GENERAL POWERS......................................6 Section 2. NUMBER, TENURE AND QUALIFICATIONS...................6 Section 3. ANNUAL AND REGULAR MEETINGS.........................6 Section 4. SPECIAL MEETINGS....................................7 Section 5. NOTICE..............................................7 Section 6. QUORUM..............................................7 Section 7. VOTING..............................................7 Section 8. TELEPHONE MEETINGS..................................7 Section 9. INFORMAL ACTION BY DIRECTORS........................7 Section 10. VACANCIES...........................................7 Section 11. COMPENSATION........................................8 Section 12. LOSS OF DEPOSITS....................................8 Section 13. SURETY BONDS........................................8 Section 14. RELIANCE............................................8 Section 15. CERTAIN RIGHTS OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS................................8 ARTICLE IV COMMITTEES......................................................9 Section 1. NUMBER, TENURE AND QUALIFICATIONS...................9 Section 2. POWERS..............................................9 -i- |
Section 3. MEETINGS............................................9 Section 4. TELEPHONE MEETINGS..................................9 Section 5. INFORMAL ACTION BY COMMITTEES.......................9 Section 6. VACANCIES...........................................9 ARTICLE V OFFICERS.......................................................10 Section 1. GENERAL PROVISIONS.................................10 Section 2. REMOVAL AND RESIGNATION............................10 Section 3. VACANCIES..........................................10 Section 4. CHAIRMAN OF THE BOARD..............................10 Section 5. VICE CHAIRMEN......................................10 Section 6. CHIEF EXECUTIVE OFFICER............................11 Section 7. CHIEF OPERATING OFFICER............................11 Section 8. CHIEF FINANCIAL OFFICER............................11 Section 9. CHIEF INVESTMENT OFFICER...........................11 Section 10. PRESIDENT..........................................11 Section 11. MANAGING DIRECTORS.................................11 Section 12. VICE PRESIDENTS....................................11 Section 13. SECRETARY..........................................11 Section 14. TREASURER..........................................12 Section 15. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS.........................................12 Section 16. SALARIES...........................................12 ARTICLE VI CONTRACTS, LOANS, CHECKS AND DEPOSITS..........................13 Section 1. CONTRACTS..........................................13 Section 2. CHECKS AND DRAFTS..................................13 Section 3. DEPOSITS...........................................13 ARTICLE VII STOCK..........................................................13 Section 1. CERTIFICATES.......................................13 Section 2. TRANSFERS..........................................14 Section 3. REPLACEMENT CERTIFICATE............................14 Section 4. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE........................................14 Section 5. STOCK LEDGER.......................................15 Section 6. FRACTIONAL STOCK; ISSUANCE OF UNITS................15 ARTICLE VIII ACCOUNTING YEAR................................................15 ARTICLE IX DISTRIBUTIONS..................................................16 Section 1. AUTHORIZATION......................................16 Section 2. CONTINGENCIES......................................16 ARTICLE X INVESTMENT POLICY..............................................16 -ii- |
ARTICLE XI SEAL...........................................................16 Section 1. SEAL...............................................16 Section 2. AFFIXING SEAL......................................16 ARTICLE XII INDEMNIFICATION AND ADVANCE OF EXPENSES........................17 ARTICLE XIII WAIVER OF NOTICE...............................................17 ARTICLE XIV AMENDMENT OF BYLAWS............................................17 |
CAPITAL TRUST, INC.
BYLAWS
ARTICLE I
OFFICES
Section 1. PRINCIPAL OFFICE. The principal office of the Corporation shall be located at such place or places as the Board of Directors may designate.
Section 2. ADDITIONAL OFFICES. The Corporation may have additional offices at such places as the Board of Directors may from time to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. PLACE. All meetings of stockholders shall be held at the principal office of the Corporation or at such other place within the United States as shall be stated in the notice of the meeting.
Section 2. ANNUAL MEETING. An annual meeting of the stockholders for the election of directors and the transaction of any business within the powers of the Corporation shall be held on a date and at the time set by the Board of Directors.
Section 3. SPECIAL MEETINGS. The president, chief executive officer or Board of Directors may call special meetings of the stockholders. Special meetings of stockholders shall also be called by the secretary of the Corporation upon the written request of the holders of shares entitled to cast not less than 33 percent (33%) of all the votes entitled to be cast at such meeting. Such request shall state the purpose of such meeting and the matters proposed to be acted on at such meeting. The secretary shall inform such stockholders of the reasonably estimated cost of preparing and mailing notice of the meeting and, upon payment to the Corporation by such stockholders of such costs, the secretary shall give notice to each stockholder entitled to notice of the meeting. Unless requested by the stockholders entitled to cast a majority of all the votes entitled to be cast at such meeting, a special meeting need not be called to consider any matter which is substantially the same as a matter voted on at any special meeting of the stockholders held during the preceding twelve months.
Section 4. NOTICE. Not less than ten nor more than 90 days before each meeting of stockholders, the secretary shall give to each stockholder entitled to vote at such meeting and to each stockholder not entitled to vote who is entitled to notice of the meeting written or printed notice stating the time and place of the meeting and, in the case of a special meeting or as otherwise may be required by any statute, the purpose for which the meeting is called, either by mail or by presenting it to such stockholder personally or by leaving it at his residence or usual
place of business. If mailed, such notice shall be deemed to be given when deposited in the United States mail addressed to the stockholder at his post office address as it appears on the records of the Corporation, with postage thereon prepaid.
Section 5. SCOPE OF NOTICE. Any business of the Corporation may be transacted at an annual meeting of stockholders without being specifically designated in the notice, except such business as is required by any statute to be stated in such notice. No business shall be transacted at a special meeting of stockholders except as specifically designated in the notice. A Board member's attendance at a meeting constitutes waiver of notice.
Section 6. ORGANIZATION. At every meeting of stockholders, the chairman of the board, if there be one, shall conduct the meeting or, in the case of vacancy in office or absence of the chairman of the board, one of the following officers present shall conduct the meeting in the order stated: the vice chairman of the board, if there be one, the president, the vice presidents in their order of rank and seniority, or a chairman chosen by the stockholders entitled to cast a majority of the votes which all stockholders present in person or by proxy are entitled to cast, shall act as chairman, and the secretary, or, in his absence, an assistant secretary, or in the absence of both the secretary and assistant secretaries, a person appointed by the chairman shall act as secretary.
Section 7. QUORUM. At any meeting of stockholders, the presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at such meeting shall constitute a quorum; but this section shall not affect any requirement under any statute or the charter of the Corporation for the vote necessary for the adoption of any measure. If, however, such quorum shall not be present at any meeting of the stockholders, the stockholders entitled to vote at such meeting, present in person or by proxy, shall have the power to adjourn the meeting from time to time to a date not more than 120 days after the original record date without notice other than announcement at the meeting. At such adjourned meeting at which a quorum shall be present, any business may be transacted which might have been transacted at the meeting as originally notified.
Section 8. VOTING. A plurality of all the votes cast at a meeting of stockholders duly called and at which a quorum is present shall be sufficient to elect a director. Each share may be voted for as many individuals as there are directors to be elected and for whose election the share is entitled to be voted. A majority of the votes cast at a meeting of stockholders duly called and at which a quorum is present shall be sufficient to approve any other matter which may properly come before the meeting, unless more than a majority of the votes cast is required by statute or by the charter of the Corporation. Unless otherwise provided in the charter, each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote at a meeting of stockholders.
Section 9. PROXIES. A stockholder may cast the votes entitled to be cast by the shares of the stock owned of record by him either in person or by proxy executed in writing by the stockholder or by his duly authorized agent. Such proxy shall be filed with the secretary
of the Corporation before or at the time of the meeting. No proxy shall be valid after eleven months from the date of its execution, unless otherwise provided in the proxy.
Section 10. VOTING OF STOCK BY CERTAIN HOLDERS. Stock of the Corporation registered in the name of a corporation, partnership, trust or other entity, if entitled to be voted, may be voted by the president or a vice president, a general partner or trustee thereof, as the case may be, or a proxy appointed by any of the foregoing individuals, unless some other person who has been appointed to vote such stock pursuant to a bylaw or a resolution of the governing body of such corporation or other entity or agreement of the partners of a partnership presents a certified copy of such bylaw, resolution or agreement, in which case such person may vote such stock. Any director or other fiduciary may vote stock registered in his name as such fiduciary, either in person or by proxy.
Shares of stock of the Corporation directly or indirectly owned by it shall not be voted at any meeting and shall not be counted in determining the total number of outstanding shares entitled to be voted at any given time, unless they are held by it in a fiduciary capacity, in which case they may be voted and shall be counted in determining the total number of outstanding shares at any given time.
The Board of Directors may adopt by resolution a procedure by which a stockholder may certify in writing to the Corporation that any shares of stock registered in the name of the stockholder are held for the account of a specified person other than the stockholder. The resolution shall set forth the class of stockholders who may make the certification, the purpose for which the certification may be made, the form of certification and the information to be contained in it; if the certification is with respect to a record date or closing of the stock transfer books, the time after the record date or closing of the stock transfer books within which the certification must be received by the Corporation; and any other provisions with respect to the procedure which the Board of Directors considers necessary or desirable. On receipt of such certification, the person specified in the certification shall be regarded as, for the purposes set forth in the certification, the stockholder of record of the specified stock in place of the stockholder who makes the certification.
Notwithstanding any other provision of the chapter of the Corporation or these Bylaws, Title 3, Subtitle 7 of the Corporations and Associations Article of the Annotated Code of Maryland (or any successor statute) shall not apply to any acquisition by Veqtor Finance Company, LLC, a Delaware limited liability company ("Veqtor"), or any affiliates thereof, or a Permitted Transferee of Veqtor (as defined herein) of shares of stock of the Corporation. For purposes of this section, the term "Permitted Transferee of Veqtor" includes each of the following entities to the extent any such entity acquires shares of stock of the Corporation, directly or indirectly, from Veqtor: Capital Trust Investors Limited Partnership, an Illinois limited partnership, V2 Holdings LLC, a Delaware limited liability company, BankAmerica Investment Corporation, an Illinois corporation, First Chicago Capital Corporation, a Delaware corporation, and Wells Fargo & Company, a Delaware corporation. This section may be repealed, in whole or in part, at any time, whether before or after an acquisition of control shares and, upon such
repeal, may, to the extent provided by any successor bylaw, apply to any prior or subsequent control share acquisition.
Section 11. INSPECTORS. At any meeting of stockholders, the chairman of the meeting may appoint one or more persons as inspectors for such meeting. Such inspectors shall ascertain and report the number of shares represented at the meeting based upon their determination of the validity and effect of proxies, count all votes, report the results and perform such other acts as are proper to conduct the election and voting with impartiality and fairness to all the stockholders.
Each report of an inspector shall be in writing and signed by him or by a majority of them if there is more than one inspector acting at such meeting. If there is more than one inspector, the report of a majority shall be the report of the inspectors. The report of the inspector or inspectors on the number of shares represented at the meeting and the results of the voting shall be prima facie evidence thereof.
Section 12. NOMINATIONS AND PROPOSALS BY STOCKHOLDERS.
(a) Annual Meetings of Stockholders.
(1) Nominations of persons for election to the Board of Directors and the proposal of business to be considered by the stockholders may be made at an annual meeting of stockholders (i) pursuant to the Corporation's notice of meeting, (ii) by or at the direction of the Board of Directors or (iii) by any stockholder of the Corporation who was a stockholder of record both at the time of giving of notice provided for in this Section 12(a) and at the time of the annual meeting, who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section 12(a).
(2) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (iii) of paragraph (a)(1) of this Section 12, the stockholder must have given timely notice thereof in writing to the secretary of the Corporation and such other business must otherwise be a proper matter for action by stockholders. To be timely, a stockholder's notice shall be delivered to the secretary at the principal executive offices of the Corporation not later than the close of business on the 60th day nor earlier than the close of business on the 90th day prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is advanced by more than 30 days or delayed by more than 60 days from such anniversary date or if the Corporation has not previously held an annual meeting, notice by the stockholder to be timely must be so delivered not earlier than the close of business on the 90th day prior to such annual meeting and not later than the close of business on the later of the 60th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made by the Corporation. In no event shall the public announcement of a postponement or adjournment of an annual meeting to a later date or time commence a new time period for the giving of a stockholder's notice as described above. Such stockholder's notice shall set forth (i) as to each person whom the stockholder proposes to nominate for election or reelection as a director all
information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act") (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (ii) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and of the beneficial owner, if any, on whose behalf the proposal is made; and (iii) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made, (x) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner and (y) the number of shares of each class of stock of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(a) (2) of this Section 12 to the contrary, in the event that the number of
directors to be elected to the Board of Directors is increased and there is no
public announcement by the Corporation naming all of the nominees for director
or specifying the size of the increased Board of Directors at least 70 days
prior to the first anniversary of the preceding year's annual meeting, a
stockholder's notice required by this Section 12 (a) shall also be considered
timely, but only with respect to nominees for any new positions created by such
increase, if it shall be delivered to the secretary at the principal executive
offices of the Corporation not later than the close of business on the tenth day
following the day on which such public announcement is first made by the
Corporation.
(b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation's notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected (i) pursuant to the Corporation's notice of meeting, (ii) by or at the direction of the Board of Directors or (iii) provided that the Board of Directors has determined that directors shall be elected at such special meeting, by any stockholder of the Corporation who is a stockholder of record both at the time of giving of notice provided for in this Section 12(b) and at the time of the special meeting, who is entitled to vote at the meeting and who complied with the notice procedures set forth in this Section 12(b). In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be) for election to such position as specified in the Corporation's notice of meeting, if the stockholder's notice containing the information required by paragraph (a) (2) of this Section 12 shall be delivered to the secretary at the principal executive offices of the Corporation not earlier than the close of business on the 90th day prior to such special meeting and not later than the close of business on the later of the 60th day prior to such special meeting or the tenth day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of a postponement or adjournment of a special meeting to a later date or time commence a new time period for the giving of a stockholder's notice as described above.
(c) General. (1) Only such persons who are nominated in accordance with the procedures set forth in this Section 12 shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 12. The chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 12 and, if any proposed nomination or business is not in compliance with this Section 12, to declare that such nomination or proposal shall be disregarded.
(2) For purposes of this Section 12, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15 (d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Section 12, a stockholder shall also comply with all applicable requirements of state law and of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this Section 12. Nothing in this Section 12 shall be deemed to affect any rights of stockholders to request inclusion of proposals in the Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act.
Section 13. VOTING BY BALLOT. Voting on any question or in any election may be viva voce unless the presiding officer shall order or any stockholder shall demand that voting be by ballot.
ARTICLE III
DIRECTORS
Section 1. GENERAL POWERS. The business and affairs of the Corporation shall be managed under the direction of its Board of Directors.
Section 2. NUMBER, TENURE AND QUALIFICATIONS. At any regular meeting or at any special meeting called for that purpose, a majority of the entire Board of Directors may establish, increase or decrease the number of directors, provided that the number thereof shall never be less than the minimum number required by the Maryland General Corporation Law, nor more than 15, and further provided that the tenure of office of a director shall not be affected by any decrease in the number of directors.
Section 3. ANNUAL AND REGULAR MEETINGS. An annual meeting of the Board of Directors shall be held immediately after and at the same place as the annual meeting of stockholders, no notice other than this Bylaw being necessary. The Board of Directors may provide, by resolution, the time and place, either within or without the State of Maryland, for the holding of regular meetings of the Board of Directors without other notice than such resolution.
Section 4. SPECIAL MEETINGS. Special meetings of the Board of Directors may be called by or at the request of the chairman of the board, president or by a majority of the directors then in office. The person or persons authorized to call special meetings of the Board of Directors may fix any place, either within or without the State of Maryland, as the place for holding any special meeting of the Board of Directors called by them.
Section 5. NOTICE. Notice of any special meeting of the Board of Directors shall be delivered personally or by telephone, facsimile transmission, United States mail or courier to each director at his business or residence address. Notice by personal delivery, by telephone or a facsimile transmission shall be given at least two days prior to the meeting. Notice by mail shall be given at least five days prior to the meeting and shall be deemed to be given when deposited in the United States mail properly addressed, with postage thereon prepaid. Telephone notice shall be deemed to be given when the director is personally given such notice in a telephone call to which he is a party. Facsimile transmission notice shall be deemed to be given upon completion of the transmission of the message to the number given to the Corporation by the director and receipt of a completed answer-back indicating receipt. Neither the business to be transacted at, nor the purpose of, any annual, regular or special meeting of the Board of Directors need be stated in the notice, unless specifically required by statute or these Bylaws.
Section 6. QUORUM. A majority of the directors shall constitute a quorum for transaction of business at any meeting of the Board of Directors, provided that, if less than a majority of such directors are present at said meeting, a majority of the directors present may adjourn the meeting from time to time without further notice, and provided further that if, pursuant to the charter of the Corporation or these Bylaws, the vote of a majority of a particular group of directors is required for action, a quorum must also include a majority of such group.
The directors present at a meeting which has been duly called and convened may continue to transact business until adjournment, notwithstanding the withdrawal of enough directors to leave less than a quorum.
Section 7. VOTING. The action of the majority of the directors present at a meeting at which a quorum is present shall be the action of the Board of Directors, unless the concurrence of a greater proportion is required for such action by applicable statute.
Section 8. TELEPHONE MEETINGS. Directors may participate in a meeting by means of a conference telephone or similar communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.
Section 9. INFORMAL ACTION BY DIRECTORS. Any action required or permitted to be taken at any meeting of the Board of Directors may be taken without a meeting, if a consent in writing to such action is signed by each director and such written consent is filed with the minutes of proceedings of the Board of Directors.
Section 10. VACANCIES. If for any reason any or all the directors cease to be directors, such event shall not terminate the Corporation or affect these Bylaws or the powers of the remaining directors hereunder (even if fewer than three directors remain). Any vacancy on the Board of Directors for any cause other than an increase in the number of directors shall be filled by a majority of the remaining directors, even if such majority is less than a quorum. Any vacancy in the number of directors created by an increase in the number of directors may be filled by a majority vote of the entire Board of Directors. Any individual so elected as director shall hold office until the next annual meeting of stockholders and until his successor is elected and qualifies.
Section 11. COMPENSATION. Directors shall not receive any stated salary for their services as directors but, by resolution of the Board of Directors, may receive compensation per year and/or per meeting and/or per visit to real property or other facilities owned or leased by the Corporation and for any service or activity they performed or engaged in as directors. Directors may be reimbursed for expenses of attendance, if any, at each annual, regular or special meeting of the Board of Directors or of any committee thereof and for their expenses, if any, in connection with each property visit and any other service or activity they performed or engaged in as directors; but nothing herein contained shall be construed to preclude any directors from serving the Corporation in any other capacity and receiving compensation therefor.
Section 12. LOSS OF DEPOSITS. No director shall be liable for any loss which may occur by reason of the failure of the bank, trust company, savings and loan association, or other institution with whom moneys or stock of the Corporation have been deposited.
Section 13. SURETY BONDS. Unless required by law, no director shall be obligated to give any bond or surety or other security for the performance of any of his duties.
Section 14. RELIANCE. Each director, officer, employee and agent of the Corporation shall, in the performance of his duties with respect to the Corporation, be fully justified and protected with regard to any act or failure to act in reliance in good faith upon the books of account or other records of the Corporation, upon an opinion of counsel or upon reports made to the Corporation by any of its officers or employees or by the advisers, accountants, appraisers or other experts or consultants selected by the Board of Directors or officers of the Corporation, regardless of whether such counsel or expert may also be a director.
Section 15. CERTAIN RIGHTS OF DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS. The directors shall have no responsibility to devote their full time to the affairs of the Corporation. Any director or officer, employee or agent of the Corporation, in his personal capacity or in a capacity as an affiliate, employee, or agent of any other person, or otherwise, may have business interests and engage in business activities similar to or in addition to or in competition with those of or relating to the Corporation.
ARTICLE IV
COMMITTEES
Section 1. NUMBER, TENURE AND QUALIFICATIONS. The Board of Directors may appoint from among its members an Executive Committee, an Audit Committee, a Compensation Committee, a Performance Compensation Committee and other committees, composed of one or more directors, to serve at the pleasure of the Board of Directors.
Section 2. POWERS. The Board of Directors may delegate to committees appointed under Section 1 of this Article any of the powers of the Board of Directors, except as prohibited by law.
Section 3. MEETINGS. Notice of committee meetings shall be given in the same manner as notice for special meetings of the Board of Directors. A majority of the members of the committee shall constitute a quorum for the transaction of business at any meeting of the committee. The act of a majority of the committee members present at a meeting shall be the act of such committee. The Board of Directors may designate a chairman of any committee, and such chairman or any two members (if there are more than two members) of any committee may fix the time and place of its meeting unless the Board shall otherwise provide. In the absence of any member of any such committee, the members thereof present at any meeting, whether or not they constitute a quorum, may appoint another director to act in the place of such absent member. Each committee shall keep minutes of its proceedings.
Section 4. TELEPHONE MEETINGS. Members of a committee of the Board of Directors may participate in a meeting by means of a conference telephone or similar communications equipment if all persons participating in the meeting can hear each other at the same time. Participation in a meeting by these means shall constitute presence in person at the meeting.
Section 5. INFORMAL ACTION BY COMMITTEES. Any action required or permitted to be taken at any meeting of a committee of the Board of Directors may be taken without a meeting, if a consent in writing to such action is signed by each member of the committee and such written consent is filed with the minutes of proceedings of such committee.
Section 6. VACANCIES. Subject to the provisions hereof, the Board of Directors shall have the power at any time to change the membership of any committee, to fill all vacancies, to designate alternate members to replace any absent or disqualified member or to dissolve any such committee.
ARTICLE V
OFFICERS
Section 1. GENERAL PROVISIONS. The officers of the Corporation shall include a chairman of the board, two vice chairmen, a chief executive officer, a president, a secretary and a treasurer and may include a chief operating officer, a chief financial officer, one or more managing directors, one or more vice presidents, one or more assistant secretaries and one or more assistant treasurers. In addition, the Board of Directors may from time to time appoint such other officers with such powers and duties as they shall deem necessary or desirable. The officers of the Corporation shall be elected annually by the Board of Directors at the first meeting of the Board of Directors held after each annual meeting of stockholders, except that the chief executive officer may appoint one or more vice presidents, assistant secretaries and assistant treasurers. If the election of officers shall not be held at such meeting, such election shall be held as soon thereafter as may be convenient. Each officer shall hold office until his successor is elected and qualifies or until his death, resignation or removal in the manner hereinafter provided. Any two or more offices except president and vice president may be held by the same person. In its discretion, the Board of Directors may leave unfilled any office except that of president, treasurer and secretary. Election of an officer or agent shall not of itself create contract rights between the Corporation and such officer or agent.
Section 2. REMOVAL AND RESIGNATION. Any officer or agent of the Corporation may be removed by the Board of Directors if in its judgment the best interests of the Corporation would be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Any officer of the Corporation may resign at any time by giving written notice of his resignation to the Board of Directors, the chairman of the board, the president or the secretary. Any resignation shall take effect at any time subsequent to the time specified therein or, if the time when it shall become effective is not specified therein, immediately upon its receipt. The acceptance of a resignation shall not be necessary to make it effective unless otherwise stated in the resignation. Such resignation shall be without prejudice to the contract rights, if any, of the Corporation.
Section 3. VACANCIES. A vacancy in any office may be filled by the Board of Directors for the balance of the term.
Section 4. CHAIRMAN OF THE BOARD. The Board of Directors shall designate a chairman of the board. The chairman of the board shall preside over the meetings of the Board of Directors and of the stockholders at which he shall be present. The chairman of the board shall perform such other duties as may be assigned to him or them by the Board of Directors.
Section 5. VICE CHAIRMEN. The Vice Chairmen shall have the general responsibility for the implementation of the policies of the Corporation, as determined by the Board of Directors, and for the management of the business and affairs of the Corporation.
Section 6. CHIEF EXECUTIVE OFFICER. The Board of Directors may designate a chief executive officer. In the absence of such designation, the chairman of the board shall be the chief executive officer of the Corporation. Subject to the direction of the Board of Directors, the chief executive officer shall in general supervise and control all of the business and affairs of the Corporation and shall exercise chief executive powers and such specific powers and shall perform such duties as from time to time may be conferred upon or assigned to him by the Board of Directors or any committee thereof designated by it to so act. He may execute any deed, mortgage, bond, contract or other instrument, except in cases where the execution thereof shall be expressly delegated by the Board of Directors or by these Bylaws to some other officer or agent of the Corporation or shall be required by law to be otherwise executed.
Section 7. CHIEF OPERATING OFFICER. The Board of Directors may designate a chief operating officer. The chief operating officer shall have the responsibilities and duties as set forth by the Board of Directors or the chief executive officer.
Section 8. CHIEF FINANCIAL OFFICER. The Board of Directors may designate a chief financial officer. The chief financial officer shall have the responsibilities and duties as set forth by the Board of Directors or the chief executive officer.
Section 9. CHIEF INVESTMENT OFFICER. The Board of Directors may designate a chief investment officer. The chief investment officer shall have the responsibilities and duties as set forth by the Board of Directors or the chief executive officer.
Section 10. PRESIDENT. The president shall have general executive powers and shall have such specific powers and shall perform all duties incident to the office of president and such other duties as may be prescribed by the Board of Directors from time to time. In the absence of a designation of a chief operating officer by the Board of Directors, the president shall be the chief operating officer.
Section 11. MANAGING DIRECTORS. The Board of Directors may designate one or more managing directors. A managing director shall have the responsibilities and duties as set forth by the Board of Directors or chief executive officer.
Section 12. VICE PRESIDENTS. In the absence of the president or in the event of a vacancy in such office, the vice president (or in the event there be more than one vice president, the vice presidents in the order designated at the time of their election or, in the absence of any designation, then in the order of their election) shall perform the duties of the president and when so acting shall have all the powers of and be subject to all the restrictions upon the president; and shall perform such other duties as from time to time may be assigned to him by the president or by the Board of Directors. The Board of Directors may designate one or more vice presidents as executive vice president or as vice president for particular areas of responsibility.
Section 13. SECRETARY. The secretary shall (a) keep the minutes of the proceedings of the stockholders, the Board of Directors and committees of the Board of Directors in one or more books provided for that purpose; (b) see that all notices are duly given in
accordance with the provisions of these Bylaws or as required by law; (c) be custodian of the corporate records and of the seal of the Corporation; (d) keep a register of the post office address of each stockholder which shall be furnished to the secretary by such stockholder; (e) have general charge of the share transfer books of the Corporation; and (f) in general perform such other duties as from time to time may be assigned to him by the chief executive officer, the president or by the Board of Directors.
Section 14. TREASURER. The treasurer shall have the custody of the funds and securities of the Corporation and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the Board of Directors. In the absence of a designation of a chief financial officer by the Board of Directors, the treasurer shall be the chief financial officer of the Corporation.
The treasurer shall disburse the funds of the Corporation as may be ordered by the Board of Directors, taking proper vouchers for such disbursements, and shall render to the president and Board of Directors, at the regular meetings of the Board of Directors or whenever it may so require, an account of all his transactions as treasurer and of the financial condition of the Corporation.
If required by the Board of Directors, the treasurer shall give the Corporation a bond in such sum and with such surety or sureties as shall be satisfactory to the Board of Directors for the faithful performance of the duties of his office and for the restoration to the Corporation, in case of his death, resignation, retirement or removal from office, of all books, papers, vouchers, moneys and other property of whatever kind in his possession or under his control belonging to the Corporation.
Section 15. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS. The assistant secretaries and assistant treasurers, in general, shall perform such duties as shall be assigned to them by the secretary or treasurer, respectively, or by the president or the Board of Directors. The assistant treasurers shall, if required by the Board of Directors, give bonds for the faithful performance of their duties in such sums and with such surety or sureties as shall be satisfactory to the Board of Directors.
Section 16. SALARIES. The salaries and other compensation of the officers shall be fixed from time to time by the Board of Directors and no officer shall be prevented from receiving such salary or other compensation by reason of the fact that he is also a director.
ARTICLE VI
CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. CONTRACTS. The Board of Directors may authorize any officer or agent to enter into any contract or to execute and deliver any instrument in the name of and on behalf of the Corporation and such authority may be general or confined to specific instances. Any agreement, deed, mortgage, lease or other document executed by one or more of the directors or by an authorized person shall be valid and binding upon the Board of Directors and upon the Corporation when authorized or ratified by action of the Board of Directors.
Section 2. CHECKS AND DRAFTS. All checks, drafts or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or agent of the Corporation in such manner as shall from time to time be determined by the Board of Directors.
Section 3. DEPOSITS. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks, trust companies or other depositories as the Board of Directors may designate.
ARTICLE VII
STOCK
Section 1. CERTIFICATES. Each stockholder shall be entitled to a certificate or certificates which shall represent and certify the number of shares of each class of stock held by him in the Corporation. Each certificate shall be signed by the chairman of the board, the president or a vice president and countersigned by the secretary or an assistant secretary or the treasurer or an assistant treasurer and may be sealed with the seal, if any, of the Corporation. The signatures may be either manual or facsimile. Certificates shall be consecutively numbered; and if the Corporation shall, from time to time, issue several classes of stock, each class may have its own number series. A certificate is valid and may be issued whether or not an officer who signed it is still an officer when it is issued. Each certificate representing shares which are restricted as to their transferability or voting powers, which are preferred or limited as to their dividends or as to their allocable portion of the assets upon liquidation or which are redeemable at the option of the Corporation, shall have a statement of such restriction, limitation, preference or redemption provision, or a summary thereof, plainly stated on the certificate. If the Corporation has authority to issue stock of more than one class, the certificate shall contain on the face or back a full statement or summary of the designations and any preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms and conditions of redemption of each class of stock and, if the Corporation is authorized to issue any preferred or special class in series, the differences in the relative rights and preferences between the shares of each series to the extent they have been set and the authority of the Board of Directors to set the relative rights and preferences of subsequent series. In lieu of such statement or summary, the certificate may state that the Corporation will furnish a full statement
of such information to any stockholder upon request and without charge. If any class of stock is restricted by the Corporation as to transferability, the certificate shall contain a full statement of the restriction or state that the Corporation will furnish information about the restrictions to the stockholder on request and without charge.
Section 2. TRANSFERS. Upon surrender to the Corporation or the transfer agent of the Corporation of a stock certificate duly endorsed or accompanied by proper evidence of succession, assignment or authority to transfer, the Corporation shall issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books.
The Corporation shall be entitled to treat the holder of record of any share of stock as the holder in fact thereof and, accordingly, shall not be bound to recognize any equitable or other claim to or interest in such share or on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of the State of Maryland.
Notwithstanding the foregoing, transfers of shares of any class of stock will be subject in all respects to the charter of the Corporation and all of the terms and conditions contained therein.
Section 3. REPLACEMENT CERTIFICATE. Any officer designated by the Board of Directors may direct a new certificate to be issued in place of any certificate previously issued by the Corporation alleged to have been lost, stolen or destroyed upon the making of an affidavit of that fact by the person claiming the certificate to be lost, stolen or destroyed. When authorizing the issuance of a new certificate, an officer designated by the Board of Directors may, in his discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate or the owner's legal representative to advertise the same in such manner as he shall require and/or to give bond, with sufficient surety, to the Corporation to indemnify it against any loss or claim which may arise as a result of the issuance of a new certificate.
Section 4. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. The Board of Directors may set, in advance, a record date for the purpose of determining stockholders entitled to notice of or to vote at any meeting of stockholders or determining stockholders entitled to receive payment of any dividend or the allotment of any other rights, or in order to make a determination of stockholders for any other proper purpose. Such date, in any case, shall not be prior to the close of business on the day the record date is fixed and shall be not more than ninety days and, in the case of a meeting of stockholders, not less than ten days, before the date on which the meeting or particular action requiring such determination of stockholders of record is to be held or taken.
In lieu of fixing a record date, the Board of Directors may provide that the stock transfer books shall be closed for a stated period but not longer than 20 days. If the stock transfer books are closed for the purpose of determining stockholders entitled to notice of or to vote at a
meeting of stockholders, such books shall be closed for at least ten days before the date of such meeting.
If no record date is fixed and the stock transfer books are not closed for the determination of stockholders, (a) the record date for the determination of stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day on which the notice of meeting is mailed or the 30th day before the meeting, whichever is the closer date to the meeting; and (b) the record date for the determination of stockholders entitled to receive payment of a dividend or an allotment of any other rights shall be the close of business on the day on which the resolution of the directors, declaring the dividend or allotment of rights, is adopted.
When a determination of stockholders entitled to vote at any meeting of stockholders has been made as provided in this section, such determination shall apply to any adjournment thereof, except when (i) the determination has been made through the closing of the transfer books and the stated period of closing has expired or (ii) the meeting is adjourned to a date more than 120 days after the record date fixed for the original meeting, in either of which case a new record date shall be determined as set forth herein.
Section 5. STOCK LEDGER. The Corporation shall maintain at its principal office or at the office of its counsel, accountants or transfer agent, an original or duplicate share ledger containing the name and address of each stockholder and the number of shares of each class held by such stockholder.
Section 6. FRACTIONAL STOCK; ISSUANCE OF UNITS. The Board of Directors may issue fractional stock or provide for the issuance of scrip, all on such terms and under such conditions as they may determine. Notwithstanding any other provision of the charter or these Bylaws, the Board of Directors may issue units consisting of different securities of the Corporation. Any security issued in a unit shall have the same characteristics as any identical securities issued by the Corporation, except that the Board of Directors may provide that for a specified period securities of the Corporation issued in such unit may be transferred on the books of the Corporation only in such unit.
ARTICLE VIII
ACCOUNTING YEAR
The Board of Directors shall have the power, from time to time, to fix the fiscal year of the Corporation by a duly adopted resolution.
ARTICLE IX
DISTRIBUTIONS
Section 1. AUTHORIZATION. Dividends and other distributions upon the stock of the Corporation may be authorized and declared by the Board of Directors, subject to the provisions of law and the charter of the Corporation. Dividends and other distributions may be paid in cash, property or stock of the Corporation, subject to the provisions of law and the charter.
Section 2. CONTINGENCIES. Before payment of any dividends or other distributions, there may be set aside out of any assets of the Corporation available for dividends or other distributions such sum or sums as the Board of Directors may from time to time, in its absolute discretion, think proper as a reserve fund for contingencies, for equalizing dividends or other distributions, for repairing or maintaining any property of the Corporation or for such other purpose as the Board of Directors shall determine to be in the best interest of the Corporation, and the Board of Directors may modify or abolish any such reserve in the manner in which it was created.
ARTICLE X
INVESTMENT POLICY
Subject to the provisions of the charter of the Corporation, the Board of Directors may from time to time adopt, amend, revise or terminate any policy or policies with respect to investments by the Corporation as it shall deem appropriate in its sole discretion.
ARTICLE XI
SEAL
Section 1. SEAL. The Board of Directors may authorize the adoption of a seal by the Corporation. The seal shall contain the name of the Corporation and the year of its incorporation and the words "Incorporated Maryland." The Board of Directors may authorize one or more duplicate seals and provide for the custody thereof.
Section 2. AFFIXING SEAL. Whenever the Corporation is permitted or required to affix its seal to a document, it shall be sufficient to meet the requirements of any law, rule or regulation relating to a seal to place the word "(SEAL)" adjacent to the signature of the person authorized to execute the document on behalf of the Corporation.
ARTICLE XII
INDEMNIFICATION AND ADVANCE OF EXPENSES
To the maximum extent permitted by Maryland law in effect from time to
time, the Corporation shall indemnify and, without requiring a preliminary
determination of the ultimate entitlement to indemnification, shall pay or
reimburse reasonable expenses in advance of final disposition of a proceeding to
(a) any individual who is a present or former director or officer of the
Corporation and who is made a party to the proceeding by reason of his service
in that capacity or (b) any individual who, while a director of the Corporation
and at the request of the Corporation, serves or has served another corporation,
real estate investment trust, partnership, joint venture, trust, employee
benefit plan or any other enterprise as a director, officer, partner or trustee
of such corporation, real estate investment trust, partnership, joint venture,
trust, employee benefit plan or other enterprise and who is made a party to the
proceeding by reason of his service in that capacity. The Corporation may, with
the approval of its Board of Directors, provide such indemnification and advance
for expenses to a person who served a predecessor of the Corporation in any of
the capacities described in (a) or (b) above and to any employee or agent of the
Corporation or a predecessor of the Corporation.
Neither the amendment nor repeal of this Article, nor the adoption or amendment of any other provision of the Bylaws or charter of the Corporation inconsistent with this Article, shall apply to or affect in any respect the applicability of the preceding paragraph with respect to any act or failure to act which occurred prior to such amendment, repeal or adoption.
ARTICLE XIII
WAIVER OF NOTICE
Whenever any notice is required to be given pursuant to the charter of the Corporation or these Bylaws or pursuant to applicable law, a waiver thereof in writing, signed by the person or persons entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Neither the business to be transacted at nor the purpose of any meeting need be set forth in the waiver of notice, unless specifically required by statute. The attendance of any person at any meeting shall constitute a waiver of notice of such meeting, except where such person attends a meeting for the express purpose of objecting to the transaction of any business on the ground that the meeting is not lawfully called or convened.
ARTICLE XIV
AMENDMENT OF BYLAWS
The Board of Directors shall have the exclusive power to adopt, alter or repeal any provision of these Bylaws and to make new Bylaws.
Exhibit 4.2
CAPITAL TRUST, INC.
TO
WILMINGTON TRUST COMPANY
Trustee
FIRST SUPPLEMENTAL
INDENTURE
Dated as of January 28, 1999
798885.2
FIRST SUPPLEMENTAL INDENTURE, dated as of January 28, 1999, between Capital Trust, Inc., a Maryland corporation (the "Company"), having its principal office at 605 Third Avenue, New York, New York 10016 and Wilmington Trust Company, a banking corporation duly organized and existing under the laws of the State of Delaware, as trustee under the Indenture referred to below (herein called the "Trustee").
RECITALS
WHEREAS, Capital Trust, a California business trust ("Capital Trust"), has heretofore executed and delivered to the Trustee a certain indenture, dated as of July 28, 1998 (the "Indenture"), pursuant to which convertible debentures designated as the 8.25% Step Up Convertible Junior Subordinated Debentures of Capital Trust (herein called the "Securities") were issued. All terms used in this First Supplemental Indenture which are defined in the Indenture shall have the meanings assigned to them in the Indenture;
WHEREAS, Capital Trust entered into an agreement and plan of merger, dated as of November 12, 1998, by and among Capital Trust, Captrust Limited Partnership, a Maryland limited partnership (the "Limited Partnership"), and the Company (the "Merger Agreement"), whereby (i) Capital Trust will merge with and into the Limited Partnership (the "Limited Partnership Merger"), with the result that the Limited Partnership will be the surviving entity in the Limited Partnership Merger, and (ii) the Limited Partnership will merge with and into the Company (the "Company Merger," and together with the Limited Partnership Merger, the "Mergers"), with the result that the Company will be the surviving entity in the Company Merger.
WHEREAS, Section 9.1 of the Indenture provides that Capital Trust shall not enter the Mergers unless the Company assumes all the obligations of Capital Trust under the Securities and the Indenture pursuant to a supplemental indenture;
WHEREAS, Section 8.1 of the Indenture provides that without the consent of the Holders of any of the Securities at the time Outstanding, the Company, when authorized by a resolution of its Board of Directors, and the Trustee may enter into an indenture supplemental to the Indenture to evidence the succession of another corporation to Capital Trust and the assumption by the successor corporation of the covenants, agreements and obligations of Capital Trust under the Securities and under the Indenture in the case of a merger involving Capital Trust pursuant to Article 9 of the Indenture;
WHEREAS, the Company pursuant to the foregoing authority, proposes in and by this First Supplemental Indenture to amend the Indenture upon the consummation of the Mergers to reflect the assumption by the Company of all the obligations of Capital Trust under the Securities and the Indenture; and
798885.2
WHEREAS, all things necessary to make this First Supplemental Indenture a valid agreement of the Company and the Trustee and a valid amendment of and supplement to the Indenture have been done.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities upon the consummation of the Mergers as follows:
ARTICLE ONE
PROVISIONS OF
GENERAL APPLICATION
SECTION 1.1 Assumption of Obligations. The Company assumes the due and punctual payment of the principal of, premium, if any, and interest (including Additional Sums and Compound Interest) on all of the Securities according to their tenor, and the due and punctual performance and observance of all of the covenants, agreements and conditions of the Indenture to be performed or observed by Capital Trust.
ARTICLE TWO
MISCELLANEOUS
SECTION 2.1 Incorporation of Indenture. All the provisions of this First Supplemental Indenture shall be deemed to be incorporated in, and made a part of, the Indenture; and the Indenture, as supplemented and amended by this First Supplemental Indenture, shall be read, taken and construed as one and the same instrument.
SECTION 2.2 Application of First Supplemental Indenture. The provisions and benefit of this First Supplemental Indenture shall be effective with respect to Securities outstanding prior to and after the execution hereof.
SECTION 2.3 Headings. The headings of the Articles and Sections of the First Supplemental Indenture are inserted for convenience of reference; and shall not be deemed to be a part thereof.
798885.2
SECTION 2.4 Counterparts. This First Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
SECTION 2.5 Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this First Supplemental Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.
SECTION 2.6 Successors and Assigns. All covenants and agreements in this First Supplemental Indenture by the Company shall bind its successors and assigns, whether so expressed or not.
SECTION 2.7 Separability Clause. In case any provision in this First Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 2.8 Governing Law. This agreement shall be governed by, and construed and enforced in accordance with the laws of the State of New York, without regard to its principles of conflicts of law.
798885.2
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written.
Attest: CAPITAL TRUST, INC. /s/ Edward L. Shugrue III By: /s/ John R. Klopp --------------------------- ---------------------------------------- Edward L. Shugrue III, Name: John R. Klopp Secretary Title: President Attest: WILMINGTON TRUST COMPANY, as Trustee /s/ I.A. Lennon By: /s/ Mary C. St. Amand --------------------------- ---------------------------------------- Name: Mary C. St. Amand Title: Assistant Vice President 798885.2 -4- |
STATE OF NEW YORK ) ) ss.: COUNTY OF NEW YORK ) |
On the 28th day of January, 1999, before me personally came John R. Klopp, to me known, who, being by me duly sworn, did depose and say that he is President of CAPITAL TRUST, INC., one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation; and that he signed his name thereto by like authority.
/s/ Julie A. Fergang ------------------------------ Notary Public |
[NOTARIAL SEAL]
My Commission Expires: September 21, 2000
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On the 27th day of January, 1999, before me personally came Mary C. St. Amand, to me known, who, being by me duly sworn, did depose and say that she is an Assistant Vice President of WILMINGTON TRUST COMPANY, one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation; and that he signed his name thereto by like authority.
/s/ Patricia W. Zink ------------------------------ Notary Public |
[NOTARIAL SEAL]
My Commission Expires: July 12, 1999
798885.2
Exhibit 10.1
CAPITAL TRUST, INC.
AMENDED AND RESTATED
1997 LONG-TERM INCENTIVE STOCK PLAN
705348.10
CAPITAL TRUST, INC.
AMENDED AND RESTATED
1997 LONG-TERM INCENTIVE STOCK PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE AND DURATION
1.1 Establishment of the Plan. On May 23, 1997, the Board of Trustees of Capital Trust, a California business trust (the "Predecessor"), the predecessor of Capital Trust, Inc., a Maryland corporation (the "Company") adopted, subject to the approval of shareholders, an incentive share compensation plan known as the "1997 Long- Term Incentive Share Plan," which permits the grant of Incentive Share Options, Nonqualified Share Options, Share Appreciation Rights, Restricted Shares, Performance Units, Performance Shares and Share Units. The plan became effective upon shareholder approval on July 15, 1997 and was amended by Amendment No. 1 effective on that date which changed all references to "California Real Estate Investment Trust" in the plan to "Capital Trust." On May 11, 1998, the Board of Trustees of the Predecessor adopted, subject to the approval of shareholders, the "Amended and Restated 1997 Long-Term Incentive Share Plan" which amended and restated the original plan. The amended and restated plan became effective upon shareholder approval on January 28, 1999. Upon consummation of the reorganization of the Predecessor into the Company on January 28, 1999 after such shareholder approval was obtained, the Company succeeded to and assumed the amended and restated plan. On January 28, 1999, the amended and restated plan was further amended, effective on that date to change all references to "Capital Trust" to "Capital Trust, Inc." and make additional technical revisions that reflect the different capital and governance structure of the Company (hereinafter referred to as the "Plan"). The terms of the Plan are set forth herein.
The Plan is designed to comply with the performance-based compensation exemption under the proposed regulations to Internal Revenue Code Section 162(m) issued by the Department of Treasury.
1.2 Purpose of the Plan. The purpose of the Plan is to promote the success of the Company and its Subsidiaries by providing incentives to Eligible Individuals that will link their personal interests to the long-term financial success of the Company and its Subsidiaries and to growth in stockholder value. The Plan is designed to provide flexibility to the Company and its Subsidiaries in their ability to motivate, attract, and retain the services of Eligible Individuals upon whose judgment, interest, and special effort the successful conduct of their operations is largely dependent.
1.3 Duration of the Plan. The Plan became effective on July 15, 1997 and shall remain in effect, subject to the right of the Board of Directors to terminate the Plan at any time pursuant to Article 13 hereof, until all Stock subject to it shall have been purchased or acquired according to the provisions herein. However, in no event may an Award be granted under the Plan on or after July 15, 2007.
ARTICLE 2. DEFINITIONS AND CONSTRUCTION
2.1 Definitions. Whenever used in the Plan, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized:
(a) "Amended and Restated Director Stock Plan" means the Amended and Restated 1997 Non- Employee Director Stock Plan of the Company.
(b) "Award" or "Awards" means, individually or collectively, a grant under this Plan of Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock, Performance Units, Performance Stock or Stock Units.
705348.10
(c) "Award Agreement" means the agreement required under Article 3 hereof evidencing an Award under this Plan.
(d) "Beneficial Owner" shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
(e) "Board" or "Board of Directors" means the Board of Directors of the Company.
(f) "Cause" means the occurrence of any one of the following:
(i) The willful and continued failure by a Participant to substantially perform his/her duties (other than any such failure resulting from the Participant's disability), after a written demand for substantial performance is delivered to the Participant that specifically identifies the manner in which the Company or any of its Subsidiaries, as the case may be, believes that the Participant has not substantially performed his/her duties, and the Participant has failed to remedy the situation within ten (10) business days of receiving such notice; or
(ii) the Participant's conviction for committing a felony in connection with the employment or service relationship; or
(iii) the willful engaging by the Participant in gross misconduct materially and demonstrably injurious to the Company or any of its Subsidiaries. However, no act, or failure to act, on the Participant's part shall be considered "willful" unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief, that his/her action or omission was in the best interest of the Company or any of its Subsidiaries.
(g) "Change in Control" shall be deemed to have occurred if the conditions set forth in any one of the following paragraphs shall have been satisfied:
(i) any Person (other than Veqtor Finance Company, LLC or its affiliates as that term is defined under the rules and regulations promulgated under the Exchange Act, a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Subsidiaries, or a corporation owned directly or indirectly by the shareholders of the Company in substantially the same proportions as their ownership of Stock of the Company), is or becomes the Beneficial Owner, directly or indirectly, of 20% or more of the Voting Securities of the Company;
(ii) the Board shall at any time consist of a majority of individuals (the "New Majority") who where elected or appointed Directors of the Company without the approval of a majority of the Directors either (A) in office prior to the election or appointment of the first of the Directors comprising the New Majority, or (B) appointed by or elected with the approval of such Directors; or
(iii) the Stockholders of the Company approve (A) a plan of complete liquidation of the Company; or (B) an agreement for the sale or disposition of all or substantially all the Company's assets; or (C) a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), at least 50% of the combined voting power of the Voting Securities of
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the Company (or such surviving entity) outstanding immediately after such merger or consolidation.
However, in no event shall a Change in Control be deemed to have occurred, with respect to a Participant, if the Participant is part of a purchasing group which consummates the Change in Control transaction. The Participant shall be deemed "part of a purchasing group..." for purposes of the preceding sentence if the Participant is an equity participant or has agreed to become an equity participant in the purchasing company or group (except for (i) passive ownership of less than 5% of the combined voting power of the purchasing company or (ii) ownership of equity participation in the purchasing company or group which is otherwise not deemed to be significant, as determined prior to the Change in Control by a majority of the nonemployee continuing members of the Board).
(h) "Class B Common Stock" means the class B common stock, $.01 par value, in the Company.
(i) "Code" means the Internal Revenue Code of 1986, as amended from time to time.
(j) "Committee" means the committee appointed by the Board to administer the Plan pursuant to Article 3 hereof.
(k) "Common Stock" means the class A common stock, $.01 par value, in the Company.
(l) "Company" means Capital Trust Inc., a Maryland corporation, or any successor thereto.
(m) "Convertible Securities" means the Common Stock, the Class B Common Stock, the Preferred Stock and any securities issued by the Company or any subsidiary thereof in capital raising or merger and acquisition transactions that are by their terms exercisable, convertible or exchangeable into or for Common Stock.
(n) "Covered Employee" means any Participant designated prior to the grant of Restricted Stock, Performance Units or Performance Stock by the Committee who is or may be a "covered employee" within the meaning of Section 162(m)(3) of the Code in the year in which such Restricted Stock, Performance Units or Performance Stock are taxable to such Participant.
(o) "Director" means a member of the Board.
(p) "Election Form" means the form under which a Participant elects to receive Stock granted under a Stock Unit Award upon the occurrence of certain events.
(q) "Eligible Individual" means an employee of the Company or any of its Subsidiaries, including an employee who is an officer or a Director of the Company or any of its Subsidiaries, or a consultant or service provider to the Company or any of its Subsidiaries who, in the opinion of the Committee, can contribute significantly to the growth and profitability of the Company and its Subsidiaries.
"Eligible Individual" also may include any other employee, consultant or service provider, identified by the Committee, in special situations involving extraordinary performance, promotion, retention, or recruitment.
(r) "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time.
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(s) "Fair Market Value" means the closing price of the Stock on a securities exchange, or if the Stock was not traded on an exchange, the average of the highest price and lowest price at which the Stock was traded, as reported on the Nasdaq National Market, on the relevant date, or on the most recent date on which the Stock was traded prior to such date.
(t) "Incentive Stock Option" or "ISO" means an option to purchase Stock, granted to a Participant pursuant to Article 6 hereof, which is designated as an incentive stock option and is intended to meet the requirements of Section 422 of the Code.
(u) "Nonqualified Stock Option" or "NQSO" means an option to purchase Stock, granted to a Participant pursuant to Article 6 hereof, which is not intended to be an Incentive Stock Option.
(v) "Option" or "Options" means an Incentive Stock Option or a Nonqualified Stock Option.
(w) "Option Agreement" means an Award Agreement evidencing an Option Award granted under Article 6 hereof.
(x) "Outside Director" means any Director who qualifies as an "outside director" as that term is defined in Section 162(m) of the Code and the regulations issued thereunder.
(y) "Participant" means an Eligible Individual who has been granted an Award under the Plan.
(z) "Performance Stock" means an Award, designated as performance stock, granted to a Participant pursuant to Article 9 hereof.
(aa) "Performance Unit" means an Award, designated as a performance unit, granted to a Participant pursuant to Article 9 hereof.
(bb) "Period of Restriction" means the period during which the transfer of Restricted Stock is restricted, during which the Participant is subject to a substantial risk of forfeiture, pursuant to Article 8 hereof.
(cc) "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d)
and 14(d) thereof, including a "group" as defined in Section
13(d) thereof.
(dd) "Plan" means this Amended and Restated 1997 Long-Term Incentive Stock Plan of the Company, as herein described and as hereafter from time to time amended.
(ee) "Pooling Transaction" means an acquisition of the Company in a transaction which is intended to be treated as a "pooling of interests" under generally accepted accounting principles.
(ff) "Preferred Stock" means the class A 9.5% cumulative convertible preferred stock, $.01 par value, in the Company, and the class B 9.5% cumulative convertible non-voting preferred stock, $.01 par value, in the Company.
(gg) "Restricted Stock" means an Award granted to a Participant pursuant to Article 8 hereof.
(hh) "Restricted Stock Agreement" means an Award Agreement evidencing a Restricted Stock Award granted under Article 8 hereof.
(ii) "Stock" means the Common Stock.
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(jj) "Subsidiary" means any corporation of which more than 50% (by number of votes) of the combined voting power of outstanding securities is owned, directly or indirectly, by the Company.
(kk) "Stock Unit" means a derivative interest in Stock granted to a Participant pursuant to Article 9 hereof which is credited to a bookkeeping account and paid out on a one-for-one basis in Stock.
(ll) "Stock Appreciation Right" or "SAR" means an Award, designated as a Stock Appreciation Right, granted to a Participant pursuant to Article 7 hereof.
(mm) "Voting Securities" means Stock or securities of any class or classes of securities of the Company, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the Directors.
2.2 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural.
2.3 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
ARTICLE 3. ADMINISTRATION
3.1 The Committee. The Plan shall be administered by the Board or by a committee (the "Committee") consisting of not less than two (2) Directors who shall be appointed from time to time by, and shall serve at the discretion of, the Board of Directors. To the extent required to comply with Rule 16b-3 under the Exchange Act, each member of the Committee shall qualify as a "Non-Employee Director" as defined in Rule 16b-3 or any successor definition adopted by the Securities and Exchange Commission or Awards made under the Plan will be made in accordance with another available exception, including approval by the full Board of Directors or the stockholders. To the extent required to comply with Code Section 162(m), each member of the Committee also shall be an Outside Director.
3.2 Authority of the Committee. Subject to the provisions of the Plan, the Committee shall have full power to construe and interpret the Plan; to establish, amend or waive rules and regulations for its administration; to accelerate the exercisability of any Award or the end of a Performance Period (as defined herein) or the termination of any Period of Restriction or any Award Agreement, or any other instrument relating to an Award under the Plan; and (subject to the provisions of Article 13 hereof) to amend the terms and conditions of any outstanding Option, Stock Appreciation Right or other Award to the extent such terms and conditions are within the discretion of the Committee as provided in the Plan. Notwithstanding the foregoing, the Committee shall have no authority to adjust upwards the amount payable to a Covered Employee with respect to a particular Award. Also notwithstanding the foregoing, no action of the Committee (other than pursuant to Section 4.3 hereof or Section 9.6 hereof) may, without the consent of the person or persons entitled to exercise any outstanding Option or Stock Appreciation Right or to receive payment of any other outstanding Award, adversely affect the rights of such person or persons.
3.3 Selection of Participants. The Committee shall have the authority to grant Awards under the Plan, from time to time, to such Eligible Individuals (including officers and Directors who are employees) as may be selected by it. The Committee shall select Participants from among those who they have identified as being Eligible Individuals.
3.4 Decisions Binding. All determinations and decisions made by the Committee pursuant to the provisions of the Plan and all related orders or resolutions of the Board of Directors shall be final, conclusive and
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binding on all persons, including the Company and its Subsidiaries, its stockholders, employees, and Participants and their estates and beneficiaries, and such determinations and decisions shall not be reviewable.
3.5 Delegation of Certain Responsibilities. The Committee may, in its sole discretion, delegate to an officer or officers of the Company the administration of the Plan under this Article 3; provided, however, that no such delegation by the Committee shall be made with respect to the administration of the Plan as it affects officers of the Company or its Subsidiaries and provided further that the Committee may not delegate its authority to correct errors, omissions or inconsistencies in the Plan. The Board or the Committee may delegate to the Chief Executive Officer of the Company its authority under this Article 3 to grant Awards to Eligible Individuals who are not Covered Employees or who are not officers or Directors of the Company or its Subsidiaries subject to the reporting requirements of Section 16(a) of the Exchange Act. All authority delegated by the Board or the Committee under this Section 3.5 shall be exercised in accordance with the provisions of the Plan and any guidelines for the exercise of such authority that may from time to time be established by the Board or the Committee.
3.6 Procedures of the Board or the Committee. All determinations of the Board or the Committee shall be made by not less than a majority of its members present at the meeting (in person or otherwise) at which a quorum is present. A majority of the entire Board or the Committee shall constitute a quorum for the transaction of business. Any action required or permitted to be taken at a meeting of the Board or the Committee may be taken without a meeting if a unanimous written consent, which sets forth the action, is signed by each member of the Board or the Committee and filed with the minutes for proceedings of the Board or the Committee. Service on the Board or the Committee shall constitute service as a Director of the Company so that members of the Board or the Committee shall be entitled to indemnification, limitation of liability and reimbursement of expenses with respect to their services as members of the Board or the Committee to the same extent that they are entitled under the Company's charter and Maryland law for their services as Directors of the Company.
3.7 Award Agreements. Each Award under the Plan shall be evidenced, as necessary, by an Award Agreement which shall be signed by an authorized officer of the Company and by the Participant, and shall contain such terms and conditions as may be approved by the Board or the Committee. Such terms and conditions need not be the same in all cases.
3.8 Rule 16b-3 Requirements. Notwithstanding any other provision of the Plan, the Board or the Committee may impose such conditions on any Award (including, without limitation, the right of the Board or the Committee to limit the time of exercise to specified periods) as may be required to satisfy the requirements of Rule 16b-3 (or any successor rule) under the Exchange Act ("Rule 16b-3").
ARTICLE 4. STOCK SUBJECT TO THE PLAN
4.1 Number of Shares of Stock. With respect to calendar year 1999, the maximum number of shares of Stock that may be made the subject of Awards granted under the Plan shall be equal to (i) ten percent (10%) of the number of shares of Stock that were outstanding on a fully diluted basis with respect to the shares of Stock underlying any outstanding Convertible Securities as of December 31, 1998 (rounded downward if necessary to eliminate fractional shares of stock), minus (ii) the number of shares of Stock remaining subject to or issued in respect of Awards which were granted prior to December 31, 1998, which maximum number shall be reduced by the number of shares of Stock remaining subject to or issued in respect of Awards which were granted prior to December 31, 1998 under the Amended and Restated Director Stock Plan and the number of shares of Stock made the subject of Awards under the Amended and Restated Director Stock Plan during the 1999 calendar year. Thereafter, for any given calendar year, the maximum number of shares of Stock that may be made the subject of Awards granted under the Plan shall be equal to (i) ten percent (10%) of the number of shares of Stock that were outstanding on a fully diluted basis with respect to the shares of Stock underlying any outstanding Convertible Securities as of the end of the immediately preceding calender year (rounded downward if necessary to eliminate fractional shares of stock), minus (ii) the number of shares of Stock remaining subject to or issued in respect of Awards which were granted under the Plan through the last day of the immediately preceding calendar year (the
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"Year End Date"), which maximum number shall be reduced by the number of shares of Stock remaining subject to or issued in respect of Awards which were granted through the Year End Date under the Amended and Restated Director Stock Plan and the number of shares of Stock made the subject of Awards under the Amended and Restated Director Stock Plan during the current calendar year. Notwithstanding the foregoing, (i) the maximum number of shares of Stock that may be the subject of Awards granted to any Eligible Individual during any calendar year may not exceed 500,000 shares of Stock, (ii) the maximum amount payable in cash to any Eligible Individual with respect to any Performance Period (as defined herein) pursuant to any Performance Unit or Performance Stock Award shall be $1,000,000 and (iii) the maximum number of shares of Stock covered by outstanding ISOs when combined with the number of shares of Stock issued pursuant to the exercise of ISOs granted under the Plan shall not exceed 2,500,000 shares of Stock. Upon a change in capitalization or authorized shares of stock (as described in Section 4.3 hereof) the maximum number of shares of Stock shall be adjusted in number and kind pursuant to Section 4.3 hereof. The Company shall reserve for the purposes of the Plan, out of its authorized but unissued Stock or out of the Stock held in the Company's treasury, or partly out of each, the number of shares of Stock as shall be determined by the Board. Upon the granting of an Award, the number of shares of Stock available under this Section 4.1 for the granting of further Awards shall be reduced as follows:
(a) In connection with the granting of an Award (other than the granting of a Performance Unit denominated in dollars), the number of shares of Stock shall be reduced by the number of shares of Stock in respect of which the Award is granted or denominated.
(b) In connection with the granting or a Performance Unit denominated in dollars, the number of shares of Stock shall be reduced by an amount equal to the quotient of (a) the dollar amount in which the Performance Unit is denominated, divided by (b) the Fair Market Value of a share of Stock on the date the Performance Unit is granted.
4.2 Lapsed Awards. If any Award (other than Restricted Stock) granted under this Plan terminates, expires, or lapses for any reason, any share of Stock subject to such Award again shall be available for the grant of an Award under the Plan, subject to Section 7.2 hereof.
4.3 Adjustments in Authorized Stock. In the event of any merger,
reorganization, consolidation, recapitalization, separation, liquidation, stock
dividend, stock split-up, stock combination, or other change affecting the
Company's Common Stock, such adjustment shall be made in the number and class of
shares of Stock which may be delivered under the Plan, and in the number and
class of and/or price of shares of Stock subject to outstanding Options, Stock
Appreciation Rights, Restricted Stock Awards, Performance Stock, Performance
Units and Stock Units granted under the Plan, as may be determined to be
appropriate and equitable by the Board or the Committee, in its sole discretion,
to prevent dilution or enlargement of rights; and provided that the number of
shares of Stock subject to any Award shall always be a whole number. Any
adjustment of an Incentive Stock Option under this paragraph shall be made in
such a manner so as not to constitute a modification within the meaning of
Section 424(h)(3) of the Code.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 Eligibility. Persons eligible to participate in this Plan include all employees of and consultants or service providers to the Company or any of its Subsidiaries who, in the opinion of the Board or the Committee, are Eligible Individuals. "Eligible Individuals" may include employees who are members of the Board, but may not include Directors who are not employees of the Company or any of its Subsidiaries.
5.2 Actual Participation. Subject to the provisions of the Plan, the Board or the Committee may from time to time select those Eligible Individuals to whom Awards shall be granted and determine the nature and amount of each Award. No individual shall have any right to be granted an Award under this Plan even if previously granted an Award.
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ARTICLE 6. STOCK OPTIONS
6.1 Grant of Options. Subject to the terms and provisions of the Plan, Options may be granted to Eligible Individuals at any time and from time to time as shall be determined by the Board or the Committee. The Board or the Committee shall have the sole discretion, subject to the requirements of the Plan, to determine the actual number of shares of Stock subject to Options granted to any Participant. The Board or the Committee may grant any type of Option that is permitted by law at the time of grant including, but not limited to, ISOs and NQSOs; provided, however, ISOs may only be granted to Eligible Individuals who are employees of the Company or a Subsidiary at the time of grant. Unless otherwise expressly provided at the time of grant, Options granted under the Plan will be NQSOs.
6.2 Limitation on Exercisability. The aggregate Fair Market Value (determined as of the date of grant) of the shares of Stock issuable pursuant to an ISO under this Plan and under any other plan of the Company, any parent corporation or any Subsidiary of the Company, which are exercisable for the first time by any employee during any calendar year, shall not exceed $100,000. Options for shares of Stock which are exercisable for the first time by any employee during any calendar year in excess of $100,000 shall be treated as NQSOs, in accordance with Section 422(d)(1) of the Code.
6.3 Option Agreement. Each Option grant shall be evidenced by an Option Agreement that shall specify the type of Option granted, the Option price, the duration of the Option, the number of shares of Stock to which the Option pertains, and such other provisions as the Board or the Committee shall determine. The Option Agreement shall specify whether the Option is intended to be an Incentive Stock Option within the meaning of Section 422 of the Code, or a Nonqualified Stock Option whose grant is not intended to be subject to the provisions of Section 422 of the Code.
6.4 Option Price. The purchase price per share of an Option shall be determined by the Board or the Committee but shall not be less than the Fair Market Value of the Stock on the date the Option is granted.
An Incentive Stock Option granted to an employee, who at the time of grant, owns (within the meaning of Section 425(d) of the Code) Stock possessing more than 10% of the total combined voting power of all classes of Stock of the Company, shall have an exercise price which is at least 110% of the Fair Market Value of the Stock subject to the Option.
6.5 Duration of Options. Each Option shall expire at such time as the Board or the Committee shall determine at the time of grant; provided, however, that no ISO shall be exercisable later than the tenth (10th) anniversary date of its grant, and no ISO granted to any individual who owns more than 10% of the Voting Securities of the Company shall be exercisable later than the fifth (5th) anniversary date of its grant.
6.6 Exercise of Options. Subject to Section 3.8 hereof, Options granted under the Plan shall be exercisable at such times and be subject to such restrictions and conditions as the Board or the Committee shall in each instance approve, which need not be the same for all Participants.
6.7 Payment. Options shall be exercised by the delivery of a written notice to the Company setting forth the number of shares of Stock with respect to which the Option is to be exercised, accompanied by full payment for the shares of Stock. The purchase price upon exercise of any Option shall be payable to the Company in full either (a) in cash or its equivalent, (b) by tendering previously acquired Stock having a Fair Market Value at the time of exercise equal to the total purchase price, (c) by foregoing compensation under rules established by the Board or the Committee, or (d) by a combination of (a), (b), or (c). The proceeds from such a payment shall be added to the general funds of the Company and shall be used for general purposes. As soon as practicable, after receipt of written notification and payment, the Company shall deliver to the Participant Stock certificates in an appropriate amount based upon the number of Options exercised, issued in the Participant's name.
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6.8 Restrictions on Stock Transferability. The Board or the Committee shall impose such restrictions on any Stock acquired pursuant to the exercise of an Option under the Plan as it may deem advisable, including, without limitation, restrictions under applicable Federal securities law, under the requirements of any securities exchange upon which such Stock is then listed and under any applicable blue sky or state securities laws.
6.9 Termination of Employment or Service Due to Death, Disability, or
Retirement. In the event the employment or service of a Participant is
terminated by reason of death, the Participant's outstanding Options may be
exercised by such person or persons as shall have acquired the Participant's
rights under the Option pursuant to Article 10 hereof, or by will or by the laws
of descent and distribution, at any time prior to the expiration date of the
Options or within one (1) year after such date of termination of employment or
service, whichever period is shorter, but only to the extent that the
Participant was entitled to exercise the Options at the date of his termination.
In the event the employment of a Participant is terminated by reason of
disability (as defined under the then established rules of the Company or any of
its Subsidiaries, as the case may be), the Participant's outstanding Options may
be exercised at any time prior to the expiration date of the Options or within
one (1) year after such date of termination of employment or service, whichever
period is shorter but only to the extent that the Participant was entitled to
exercise the Options on the date of his termination. In the event the employment
or service of a Participant who is an employee is terminated by reason of
retirement, the Participant's outstanding Options may be exercised (subject to
Section 3.8 hereof) at any time prior to the expiration date of the Options or
within ninety (90) days after such date of termination of employment or service,
whichever period is shorter, but only to the extent that the Participant was
entitled to exercise the Options on the date of his termination. In its sole
discretion, the Company may extend the ninety (90) days to up to one (1) year,
but in no event beyond the expiration date of the Option. In the case of
Incentive Stock Options, the favorable tax treatment prescribed under Section
422 of the Code may not be available if the Options are not exercised within the
time period prescribed by Section 422 of the Code after termination of
employment for death, disability, or retirement.
6.10 Termination of Employment or Service for Other Reasons. If the employment or service of a Participant shall terminate for any reason other than death, disability, retirement (in the case of an employee) or for Cause, the Participant shall have the right to exercise outstanding Options at any time prior to the expiration date of the Options or within the ninety (90) days after the date of his termination, whichever period is shorter, but only to the extent that the Participant was entitled to exercise the Options at the date of his termination of employment or service. In its sole discretion, the Company may extend the ninety (90) days to up to one (1) year, but in no event beyond the expiration date of the Option.
If the employment or service of the Participant shall terminate for Cause, all of the Participant's outstanding Options shall be immediately forfeited back to the Company.
6.11 Nontransferability of Options. No Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, otherwise than by will or by the laws of descent and distribution. Further, all Options granted to a Participant under the Plan shall be exercisable during his lifetime only by such Participant.
ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 Grant of Stock Appreciation Rights. Subject to the terms and conditions of the Plan, Stock Appreciation Rights may be granted to Participants, at the discretion of the Board or the Committee, in any of the following forms:
(a) In tandem with Options;
(b) In addition to Options;
(c) Independent of Options; or
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(d) In any combination of (a), (b), or (c).
The Board or the Committee shall have the sole discretion, subject to the requirements of the Plan, to determine the actual number of shares of Stock subject to SARs granted to any Participant.
7.2 Exercise of SARs in Tandem with Options. SARs granted in tandem with Options may be exercised for all or part of the shares of Stock subject to the related Option upon the surrender of the related Options representing the right to purchase an equivalent number of shares of Stock. SARs may be exercised only with respect to the Stock for which its related Option is then exercisable. Stock with respect to which SARs shall have been exercised may not be subject again to an Award under the Plan.
Notwithstanding any other provision of the Plan to the contrary, with
respect to an SAR granted in lieu of an Incentive Stock Option, (i) the SAR will
expire no later than the expiration of the underlying Incentive Stock Option;
(ii) the SAR amount may be for no more than one hundred percent (100%) of the
difference between the exercise price of the underlying Incentive Stock Option
and the Fair Market Value of the Stock subject to the underlying Incentive Stock
Option at the time the SAR is exercised; and (iii) the SAR may be exercised only
when the Fair Market Value of the Stock subject to the Incentive Stock Option
exceeds the exercise price of the Incentive Stock Option.
7.3 Exercise of SARs in Addition to Options. SARs granted in addition to Options shall be deemed to be exercised upon the exercise of the related Options. The deemed exercise of SARs granted in addition to Options shall not necessitate a reduction in the number of related Options.
7.4 Exercise of SARs Independent of Options. Subject to Sections 3.8 and 7.5 hereof, SARs granted independently of Options may be exercised upon whatever terms and conditions the Board or the Committee, in its sole discretion, imposes upon the SARs, including, but not limited to, a corresponding proportional reduction in previously granted Options.
7.5 Payment of SAR Amount. Upon exercise of the SAR, the holder shall be entitled to receive payment of an amount determined by multiplying:
(a) The difference between the Fair Market Value of a share of Stock on the date of exercise over the price fixed by the Board or the Committee at the date of grant (which price shall not be less than one hundred percent (100%) of the market price of a share of Stock on the date of grant) (the "Exercise Price"); by
(b) The number of shares of Stock with respect to which the SAR is exercised.
7.6 Form and Timing of Payment. Payment to a Participant, upon SAR exercise, will be made in cash or Stock, at the discretion of the Board or the Committee, within ten (10) calendar days of the exercise.
7.7 Term of SAR. The term of an SAR granted under the Plan shall not exceed ten (10) years.
7.8 Termination of Employment or Service. In the event the employment or service of a Participant is terminated by reason of death, disability, retirement (in the case of an employee), for Cause, or any other reason, the exercisability of any outstanding SAR granted in tandem with or in addition to an Option shall terminate in the same manner as its related Option as specified under Sections 6.8 and 6.9 hereof. The exercisability of any outstanding SARs granted independent of Options also shall terminate in the manner provided under Sections 6.8 and 6.9 hereof.
7.9 Nontransferability of SARs. No SAR granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, otherwise than by will or by the laws of descent and distribution.
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Further, all SARs granted to a Participant under the Plan shall be exercisable during his lifetime only by such Participant.
ARTICLE 8. RESTRICTED STOCK
8.1 Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Board or the Committee, at any time and from time to time, may grant Restricted Stock under the Plan to such Participants and in such amounts as it shall determine. In the case of Covered Employees, the Board or the Committee may condition the vesting or lapse of the Period of Restriction established pursuant to Section 8.4 hereof upon the attainment of one or more of the Performance Goals (as defined below) utilized for purposes of Performance Units and Performance Stock pursuant to Article 9 hereof.
8.2 Restricted Stock Agreement. Each grant of Restricted Stock shall be evidenced by a Restricted Stock Agreement that shall specify the Period of Restriction, or periods, the number of shares of Restricted Stock granted, and such other provisions as the Board or the Committee shall determine.
8.3 Transferability. Except as provided in this Article 8 or in Section 3.8 hereof, the Restricted Stock granted hereunder may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the termination of the applicable Period of Restriction or for such period of time as shall be established by the Board or the Committee and as shall be specified in the Restricted Stock Agreement, or upon earlier satisfaction of other conditions (including any Performance Goals) as specified by the Board or the Committee in its sole discretion and set forth in the Restricted Stock Agreement. All rights with respect to the Restricted Stock granted to a Participant under the Plan shall be exercisable during his lifetime only by such Participant.
8.4 Other Restrictions. The Board or the Committee shall impose such other restrictions on any Restricted Stock granted pursuant to the Plan as it may deem advisable including, without limitation, restrictions under applicable Federal or state securities laws, and the Board or the Committee may legend certificates representing Restricted Stock to give appropriate notice of such restrictions.
8.5 Certificate Legend. In addition to any legends placed on certificates pursuant to Section 8.4 hereof, each certificate representing Restricted Stock granted pursuant to the Plan shall bear the following legend:
"The sale or other transfer of the Stock represented by this certificate, whether voluntary, involuntary, or by operation of law, is subject to certain restrictions on transfer set forth in the Amended and Restated 1997 Long-Term Incentive Stock Plan of Capital Trust, Inc., in the rules and administrative procedures adopted pursuant to such Plan, and in a Restricted Stock Agreement dated . A copy of the Plan, such rules and procedures and such Restricted Stock Agreement may be obtained from the Secretary of Capital Trust, Inc."
8.6 Removal of Restrictions. Except as otherwise provided in this Article and subject to applicable securities laws and restrictions imposed pursuant thereto, Restricted Stock shall become transferable by the Participant after the last day of the Period of Restriction. Once the Stock is released from the restrictions, the Participant shall be entitled to have the legend required by Section 8.5 hereof removed from his Stock certificate.
8.7 Voting Rights. During the Period of Restriction, Participants holding Restricted Stock granted hereunder may exercise full voting rights with respect to such Stock.
8.8 Dividends and Other Distributions. During the Period of Restriction, Participants holding Restricted Stock granted hereunder shall be entitled to receive all dividends and other distributions paid with respect to such Stock while they are so held. If any such dividends or distributions are paid in Stock, the Stock shall be subject to the same restrictions on transferability as the Restricted Stock with respect to which they were paid.
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8.9 Termination of Employment or Service. In the event that a Participant terminates his employment or service with the Company or any of its Subsidiaries for any reason or is terminated for Cause during the Period of Restriction, then any Restricted Stock still subject to restrictions as of the date of such termination shall automatically be forfeited and returned to the Company; provided, however, that in the event of an involuntary termination of the employment or service of a Participant by the Company or any of its Subsidiaries other than for Cause, the Board or the Committee, in its sole discretion (subject to Section 3.8 hereof), may waive the automatic forfeiture of any or all such Stock and may add such new restrictions to such Restricted Stock as it deems appropriate.
ARTICLE 9. PERFORMANCE UNITS, PERFORMANCE STOCK AND STOCK UNITS
9.1 Grant of Performance Units, Performance Stock or Stock Units. Subject to the terms and provisions of the Plan, Performance Units, Performance Stock or Stock Units may be granted to Participants at any time and from time to time as shall be determined by the Board or the Committee. The Board or the Committee shall have complete discretion in determining the number of Performance Units, Performance Stock or Stock Units granted to each Participant.
9.2 Value of Performance Units and Performance Stock. The Board or the Committee shall set certain periods to be determined in advance by the Board or the Committee (the "Performance Periods"). Prior to each grant of Performance Units or Performance Stock, the Board or the Committee shall establish an initial value for each Performance Unit and an initial number of shares of Stock for each share of Performance Stock granted to each Participant for that Performance Period. Prior to each grant of Performance Units or Performance Stock, the Board or the Committee also shall set the performance goals (the "Performance Goals") that will be used to determine the extent to which the Participant receives a payment of the value of the Performance Units or number of shares of Stock for the Performance Stock awarded for such Performance Period. These goals will be based on the attainment, by the Company or its Subsidiaries, of certain objective or subjective performance measures, which shall include one or more of the following: total stockholder return, return on equity, return on capital, asset growth, earnings per share, market price, stock price, revenues, costs, net income, cash flow and retained earnings. Such Performance Goals also may be based upon the attainment of specified levels of performance of the Company or one or more Subsidiaries under one or more measures described above relative to the performance of other corporations. With respect to each such performance measure utilized during a Performance Period, the Board or the Committee shall assign percentages to various levels of performance which shall be applied to determine the extent to which the Participant shall receive a payout of the values of Performance Units and number of shares of Performance Stock awarded. With respect to Covered Employees, all Performance Goals shall be objective performance goals satisfying the requirements for "performance-based compensation" within the meaning of Section 162(m)(4) of the Code, and shall be set by the Board or the Committee within the time period prescribed by Section 162(m) of the Code and related regulations.
9.3 Payment of Performance Units and Performance Stock. After a
Performance Period has ended, the holder of a Performance Unit or Performance
Stock shall be entitled to receive the value thereof as determined by the Board
or the Committee. The Board or the Committee shall make this determination by
first determining the extent to which the Performance Goals set pursuant to
Section 9.2 hereof have been met. It will then determine the applicable
percentage (which may exceed one hundred percent (100%)) to be applied to, and
will apply such percentage to, the value of Performance Units or number of
shares of Performance Stock to determine the payout to be received by the
Participant. In addition, with respect to Performance Units and Performance
Stock granted to any Covered Employee, no payout shall be made hereunder except
upon written certification by the Board or the Committee that the applicable
Performance Goal or Goals have been satisfied to a particular extent.
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9.4 Value of Stock Units. Subject to the terms and provisions of the Plan, Stock Units may be granted to Participants at any time and from time to time on such terms as shall be determined by the Board or the Committee. The Board or the Committee shall have complete discretion in determining the number of Stock Units granted to each Participant. Stock Units shall be payable in Stock upon the occurrence of certain trigger events set forth on the Participant's Election Form in his or her complete discretion (the "Trigger Events"). The terms and conditions of the Trigger Events may vary by Stock Unit Award, by Participant, or both. The Election Form shall be filed with the Secretary of the Company prior to the date on which any Stock Unit Award is made. Such election will be irrevocable as to any Stock Unit Award made after delivery of the Election Form to the Company, and it shall continue in effect until revoked, increased or decreased prospectively by Participant prior to the grant of any future Stock Unit Award for which the change is effective.
9.5 Accounting for Stock Units. The Participant's Stock Unit Award shall be credited by the Company to a bookkeeping account to reflect the Company's liability to that Participant (the "Stock Unit Account"). Each Stock Unit is credited as a Stock equivalent on the date so credited. Additional Stock equivalents may be added to the Stock Unit Account equal to the amount of Stock that could be purchased with dividends equal to that paid on one share of Stock, multiplied by the number of Stock equivalents then existing in the Stock Unit Account, based on the Fair Market Value of the Stock on the date a dividend is paid. Because the Trigger Events of each Stock Unit Award may differ, the Company shall establish a separate Stock Unit Account for each separate Stock Unit Award. Upon the occurrence of particular Trigger Events, the holder of a Stock Unit Award shall be entitled to receive a number of shares of Stock which corresponds to the number of Stock Units granted as part of the initial Stock Unit Award, as such amount may have been increased to reflect dividends paid with respect thereto. Because the payout of Stock Unit Awards is not based on objective performance goals, such award will not constitute "performance-based" compensation within the meaning of Section 162(m)(4)(C) of the Code and, as such, will count toward the annual $1,000,000 deduction limit.
9.6 Board or Committee Discretion to Adjust Awards. Subject to Section 3.2 hereof regarding Awards to Covered Employees, the Board or the Committee shall have the authority to modify, amend or adjust the terms and conditions of any Performance Unit Award, Performance Stock Award or Stock Unit Award, at any time or from time to time, including but not limited to the Performance Goals.
9.7 Form of Payment. The value of a Performance Unit or a share of Performance Stock may be paid in cash, Stock or a combination thereof as determined by the Board or the Committee. In the case of Stock Units, payment shall be made in Stock. Payment may be made in a lump sum or installments as prescribed by the Board or the Committee. If any payment is to be made on a deferred basis, the Board or the Committee may provide for the payment of dividend equivalents or interest during the deferral period.
9.8 Termination of Employment or Service Due to Death, Disability, or Retirement. In the case of death, disability, or retirement (in the case of a Participant who is an employee) (each of disability and retirement as defined under the established rules of the Company or any of its Subsidiaries, as the case may be), the holder of a Performance Unit or Performance Stock shall receive a prorated payment based on the Participant's number of full months of service during the Performance Period and on the percentage of the Performance Goals achieved through the date of termination, as computed by the Board or the Committee. Payment shall be made at the time payments are made to Participants who did not terminate service during the Performance Period. In the case of Stock Units, all such Stock Units held, to the extent vested at the date of such Participant's termination of employment or service, will be paid as set forth in the Participant's Election Form.
9.9 Termination of Employment or Service for Other Reasons. In the event that a Participant terminates employment or service with the Company or any of its Subsidiaries for any reason other than death, disability, or retirement, all Performance Units and Performance Stock shall be forfeited; provided, however, that in the event of an involuntary termination of the employment or service of the Participant by the Company or any of its Subsidiaries other than for Cause, the Board or the Committee in its sole discretion may waive the automatic forfeiture provisions and pay out on a pro rata basis. In the case of termination other than for Cause, all Stock Units held, to the extent
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vested at the date of such Participant's termination of employment or service, will be paid as set forth in the Participant's Election Form. However, in the event of termination for Cause, all Stock Units held will be forfeited.
9.10 Nontransferability. No Performance Units, Performance Stock or Stock Units granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, otherwise than by will or by the laws of descent and distribution until the termination of the applicable Performance Period or, in the case of Stock Units, vesting and payment. All rights with respect to Performance Units, Performance Stock and Stock Units granted to a Participant under the Plan shall be exercisable during his lifetime only by such Participant.
ARTICLE 10. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively and who may include a trustee under a will or living trust) to whom any benefit under the Plan is to be paid in case of his death before he receives any or all of such benefit. Each designation will revoke all prior designations by the same Participant, shall be in a form prescribed by the Board or the Committee, and will be effective only when filed by the Participant in writing with the Board or the Committee during his lifetime. In the absence of any such designation or if all designated beneficiaries predecease the Participant, benefits remaining unpaid at the Participant's death shall be paid to the Participant's estate.
ARTICLE 11. RIGHTS OF EMPLOYEES
11.1 Employment or Service. Nothing in the Plan shall interfere with or limit in any way the right of the Company or any of its Subsidiaries to terminate any Participant's employment or service at any time, nor confer upon any Participant any right to continue in the employ or service of the Company or any of its Subsidiaries.
11.2 Participation. No individual shall have the right to be selected as a Participant, or, having been so selected, to be selected again as a Participant.
11.3 No Implied Rights; Rights on Termination of Service. Neither the establishment of the Plan nor any amendment thereof shall be construed as giving any Participant, beneficiary, or any other person any legal or equitable right unless such right shall be specifically provided for in the Plan or conferred by specific action of the Board or the Committee in accordance with the terms and provisions of the Plan. Except as expressly provided in this Plan, neither the Company nor any of its Subsidiaries shall be required or be liable to make any payment under the Plan.
11.4 No Right to Company Assets. Neither the Participant nor any other person shall acquire, by reason of the Plan, any right in or title to any assets, funds or property of the Company or any of its Subsidiaries whatsoever including, without limiting the generality of the foregoing, any specific funds, assets, or other property which the Company or any of its Subsidiaries, in its sole discretion, may set aside in anticipation of a liability hereunder. Any benefits which become payable hereunder shall be paid from the general assets of the Company or the applicable subsidiary. The Participant shall have only a contractual right to the amounts, if any, payable hereunder unsecured by any asset of the Company or any of its Subsidiaries. Nothing contained in the Plan constitutes a guarantee by the Company or any of its Subsidiaries that the assets of the Company or the applicable Subsidiary shall be sufficient to pay any benefit to any person.
ARTICLE 12. CHANGE IN CONTROL
12.1 Stock-Based Awards. Notwithstanding any other provisions of the Plan, in the event of a Change in Control, all Stock-based Awards granted under this Plan shall immediately vest one hundred percent (100%) in each Participant (subject to Section 3.8 hereof), including Incentive Stock Options, Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock and Stock Units.
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12.2 Performance-Based Awards. Notwithstanding any other provisions of the Plan, in the event of a Change in Control, all performance-based Awards granted under this Plan shall be immediately paid out in cash, including Performance Units and Performance Stock. The amount of the payout shall be based on the higher of: (i) the extent, as determined by the Board or the Committee, to which Performance Goals, established for the Performance Period then in progress have been met up through and including the effective date of the Change in Control or (ii) one hundred percent (100%) of the value on the date of grant of the Performance Units or number of shares of Performance Stock.
12.3 Pooling Transactions. Notwithstanding anything contained in the Plan or any agreement to the contrary, in the event of a Change in Control which is also intended to constitute a Pooling Transaction, the Board or the Committee shall take such actions, if any, which are specifically recommended by an independent accounting firm retained by the Company to the extent reasonably necessary in order to assure that the Pooling Transaction will qualify as such, including but not limited to (a) deferring the vesting, exercise, payment or settlement with respect to any Award, (b) providing that the payment or settlement in respect of any Award be made in the form of cash, Stock or securities of a successor or acquired of the Company, or a combination of the foregoing and (c) providing for the extension of the term of any Award to the extent necessary to accommodate the foregoing, but not beyond the maximum term permitted for any Award.
ARTICLE 13. AMENDMENT, MODIFICATION AND TERMINATION
13.1 Amendment, Modification and Termination. At any time and from time to time, the Board may terminate, amend, or modify the Plan, subject to the approval of the stockholders of the Company if required by the Code, by the insider trading rules of Section 16 of the Exchange Act, by any securities exchange or system on which the Stock is then listed or reported or by any regulatory body having jurisdiction with respect hereto.
13.2 Awards Previously Granted. No termination, amendment or modification of the Plan other than pursuant to Section 4.3 hereof shall in any manner adversely affect any Award theretofore granted under the Plan, without the written consent of the Participant.
ARTICLE 14. WITHHOLDING
14.1 Tax Withholding. The Company and any of its Subsidiaries shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company or any of its Subsidiaries, an amount sufficient to satisfy Federal, state and local taxes (including the Participant's FICA obligation) required by law to be withheld with respect to any grant, exercise, or payment made under or as a result of this Plan.
14.2 Stock Delivery or Withholding. With respect to withholding required upon the exercise of Nonqualified Stock Options, or upon the lapse of restrictions on Restricted Stock, Participants may elect, subject to the approval of the Board or the Committee, to satisfy the withholding requirement, in whole or in part, by tendering to the Company previously acquired Stock or by having the Company withhold Stock, in each such case in an amount having a Fair Market Value equal to the amount required to be withheld to satisfy the tax withholding obligations described in Section 14.1 hereof. The value of the Stock to be tendered or withheld is to be based on the Fair Market Value of the Stock on the date that the amount of tax to be withheld is to be determined. All Stock withholding elections shall be irrevocable and made in writing, signed by the Participant on forms approved by the Board or the Committee in advance of the day that the transaction becomes taxable.
Stock withholding elections made by Participants who are subject to the short-swing profit restrictions of Section 16 of the Exchange Act must comply with the additional restrictions of Section 16 and Rule 16b-3 in making their elections.
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ARTICLE 15. EFFECT OF CERTAIN TRANSACTIONS
Effect of Certain Transactions. Subject to Section 12 hereof, or as otherwise provided in an agreement, in the event of (a) the liquidation or dissolution of the Company or (b) a merger, consolidation or combination of the Company (a "Transaction"), the Plan and the Awards issued hereunder shall continue in effect in accordance with their respective terms except that following a Transaction each Participant shall be entitled to receive in respect of each share of Stock subject to any outstanding Options or Awards, as the case may be, upon exercise of any Option or payment or transfer in respect of any Award, the same number and kind of Stock, securities, cash, property, or other consideration that each holder of a share of Stock was entitled to receive in the Transaction in respect of a share of Stock; provided, however, that such Stock, securities, cash, property, or other consideration shall remain subject to all of the conditions, restrictions and performance criteria which were applicable to the Options or Awards prior to such Transaction.
ARTICLE 16. REQUIREMENTS OF LAW
16.1 Requirements of Law. The granting of Awards and the issuance of Stock under this Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or securities exchanges as may be required.
16.2 Governing Law. The Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of New York.
Effective Date of this Amended and Restated 1997 Long-Term Incentive Stock Plan:
January 28, 1999
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Exhibit 10.2
CAPITAL TRUST, INC.
AMENDED AND RESTATED
1997 NON-EMPLOYEE DIRECTOR STOCK PLAN
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CAPITAL TRUST, INC.
AMENDED AND RESTATED
1997 NON-EMPLOYEE DIRECTOR STOCK PLAN
ARTICLE 1. ESTABLISHMENT, PURPOSE AND DURATION
1.1 Establishment of the Plan. On May 23, 1997, the Board of Trustees of Capital Trust, a California business trust (the "Predecessor"), the predecessor of Capital Trust, Inc., a Maryland corporation (the "Company") adopted, subject to the approval of stockholders, an incentive share plan for non-employee members of the Board of Trustees known as the "1997 Non-Employee Trustee Share Plan", which permited the grant of Nonqualified Share Options, Share Appreciation Rights, Restricted Shares, Performance Units, Performance Share and Share Units. The plan became effective upon shareholder approval on July 15, 1997 and was amended by Amendment No. 1 effective on that date which changed all references to "California Real Estate Investment Trust" in the plan to "Capital Trust." On May 11, 1998, the Board of Trustees adopted, subject to the approval of shareholders, the Amended and Restated 1997 Non-Employee Trustee Share Plan which amended and restated the original plan. The amended and restated plan became effective upon shareholder approval on January 28, 1999. Upon consummation of the reorganization of the Predecessor into the Company on January 28, 1998 after such shareholder approval was obtained, the Company succeeded to and assumed the amended and restated plan. On January 28, 1999, the amended and restated plan was further amended, effective on that date to change all references to "Capital Trust" to "Capital Trust, Inc." and make additional technical revisions that reflect the different capital and governance structure of the Company (hereinafter referred to as the "Plan"). The terms of the Plan are set forth herein.
1.2 Purpose of the Plan. The Purpose of the Plan is to promote the success of the Company by providing incentives to Directors that will link their personal interests to the long-term financial success of the Company and to growth in stockholder value. The Plan is designed to provide flexibility to the Company in its ability to motivate, attract, and retain the services of Directors upon whose judgment, interest and special effort the successful conduct of the Company's operations is largely dependent.
1.3 Duration of the Plan. The Plan became effective on July 15, 1997, and shall remain in effect, subject to the right of the Board of Directors to terminate the Plan at any time pursuant to Article 13 hereof, until all Stock subject to it shall have been purchased or acquired according to the provisions herein. However, in no event may an Award be granted under the Plan on or after July 15, 2007.
ARTICLE 2. DEFINITIONS AND CONSTRUCTIONS
2.1 Definitions: Whenever used in the Plan, the following terms shall have the meanings set forth below and, when the meaning is intended, the initial letter of the word is capitalized:
(a) "Amended and Restated Incentive Stock Plan" means the Amended and Restated 1997 Long-Term Incentive Stock Plan.
(b) "Award" or "Awards" means, individually or collectively, a grant under this Plan of Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock, Performance Units, Performance Stock, or Stock Units.
(c) "Award Agreement" means the agreement required under Article 3 hereof evidencing an Award under this Plan.
(d) "Beneficial Owner" shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act.
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(e) "Board" or "Board of Directors" means the Board of Directors of the Company.
(f) "Change in Control" shall be deemed to have occurred if the conditions set forth in any one of the following paragraphs shall have been satisfied:
(i) any Person (other than Veqtor Finance Company, LLC or its affiliates as that term is defined under the rules and regulations promulgated under the Exchange Act, a Director or other fiduciary holding securities under an employee benefit plan of the Company, or a corporation owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of Stock of the Company), is or becomes the Beneficial Owner, directly or indirectly, of 20% or more of the Voting Securities of the Company;
(ii) the Board shall at any time consist of a majority of individuals (the "New Majority") who where elected or appointed Directors of the Company without the approval of a majority of the Directors either (A) in office prior to the election or appointment of the first of the Directors comprising the New Majority, or (B) appointed by or elected with the approval of such Directors; or
(iii) the stockholders of the Company approve (A) a plan of complete liquidation of the Company; or (B) an agreement for the sale or disposition of all or substantially all the Company's assets; or (C) a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the Voting Securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), at least 50% of the combined voting power of the Company (or such surviving entity) outstanding immediately after such merger or consolidation.
However, in no event shall a Change in Control be deemed to have occurred, with respect to a Participant, if the Participant is part of a purchasing group which consummates the Change in Control transaction. The Participant shall be deemed "part of a purchasing group..." for purposes of the preceding sentence if the Participant is an equity participant or has agreed to become an equity participant in the purchasing company or group (except for (i) passive ownership of less than 5% of the Voting Securities of the purchasing company or (ii) ownership of equity participation in the purchasing company or group which is otherwise not deemed to be significant, as determined prior to the Change in Control by a majority of the non-employee continuing members of the Board).
(g) "Class B Common Stock" means the class B common stock, $.01 par value, in the Company.
(h) "Code" means the Internal Revenue Code of 1986, as amended from time to time.
(i) "Common Stock" means the class A common stock, $.01 par value, in the Company.
(j) "Company" means Capital Trust, Inc., a Maryland corporation, or any successor thereto.
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(k) "Convertible Securities" means the Common Stock, the Class B Common Stock, the Preferred Stock and any securities issued by the Company or any subsidiary thereof in capital raising or merger and acquisition transactions that are by their terms exercisable, convertible or exchangeable into or for Common Stock.
(l) "Director" means a member of the Board.
(m) "Election Form" means the form under which a Participant elects to receive Stock granted under a Stock Unit Award upon the occurrence of certain events.
(n) "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time.
(o) "Fair Market Value" means the closing price of the Stock on a securities exchange or, if not traded on an exchange, the average of the highest price and lowest price at which the Stock was traded as reported on the Nasdaq National Market, on the relevant date, or on the most recent date on which the Stock was traded prior to such date.
(p) "Nonqualified Stock Option" or "NQSO" means an option to purchase Stock, which is not intended to satisfy the requirements of Section 422 of the Code, granted under Article 6 hereof.
(q) "Option" or "Options" means a Nonqualified Stock Option.
(r) "Option Agreement" means an Award Agreement evidencing an Option Award granted under Article 6 hereof.
(s) "Participant" means a Director who has been granted an Award under the Plan.
(t) "Performance Stock" means an Award, designated as a share of performance stock, granted to a Participant pursuant to Article 9 hereof.
(u) "Performance Unit" means an Award, designated as a performance unit, granted to a Participant pursuant to Article 9 hereof.
(v) "Period of Restriction" means the period during which the transfer of Restricted Stock is restricted, during which the Participant is subject to a substantial risk of forfeiture, pursuant to Article 8 hereof.
(w) "Person" shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof; including a "group" as defined in Section 13(d) thereof.
(x) "Plan" means this Amended and Restated 1997 Non-Employee Director Stock Plan of the Company, as herein described and as hereafter from time to time amended.
(y) "Pooling Transaction" means an acquisition of the Company in a transaction which is intended to be treated as a "pooling of interests" under generally accepted accounting principles.
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(z) "Preferred Stock" means the class A 9.5% cumulative convertible preferred stock, $.01 par value, in the Company and the class B 9.5% cumulative convertible non-voting preferred stock, $.01 par value, in the Company.
(aa) "Restricted Stock" means an Award granted to a Participant pursuant to Article 8 hereof.
(bb) "Restricted Stock Agreement" means an Award Agreement evidencing a Restricted Stock Award granted under Article 8 hereof.
(cc) "Stock Unit" means a derivative interest in Stock granted to a Participant pursuant to Article 9 hereof which is credited to a bookkeeping account and paid out on a one-for-one basis in Stock.
(dd) "Stock Appreciation Right" or "SAR" means an Award, designated as a stock appreciation right, granted to a Participant pursuant to Article 7 hereof.
(ee) "Stock" means the Common Stock.
(ff) "Voting Securities" means Stock or securities of any class or classes of securities of the Company, the holders of which are ordinarily, in the absence of contingencies, entitled to elect a majority of the Directors.
2.2 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural.
2.3 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.
ARTICLE 3. ADMINISTRATION
3.1 Authority of Board. The Plan shall be administered by the full Board of Directors of the Company. Subject to the provisions of the Plan, the Board shall have full power to construe and interpret the Plan; to establish, amend or waive rules and regulations for its administration; to accelerate the exercisability of any Award or the end of a Performance Period (as defined herein) or the termination of any Period of Restriction or any Award Agreement, or any other instrument relating to an Award under the Plan; and (subject to the provisions of Article 13 hereof) to amend the terms and conditions of any outstanding Option, Stock Appreciation Right or other Award to the extent such terms and conditions are within the discretion of the Board as provided in the Plan. Also notwithstanding the foregoing, no action of the Board (other than pursuant to Section 4.3 hereof or Section 9.6 hereof) may, without the consent of the person or persons entitled to exercise any outstanding Option or Stock Appreciation Right or to receive payment of any other outstanding Award, adversely affect the rights of such person or persons.
3.2 Selection of Participants. Subject to Section 5.1 hereof, the Board shall have the authority to grant Awards under the Plan, from time to time, to such Directors as may be selected by it.
3.3 Decisions Binding. All determinations and decisions made by the Board pursuant to the provisions of the Plan and all related orders or resolutions of the Board shall be final, conclusive and binding on all persons, including the Company, its stockholders and Participants and their estates and beneficiaries, and such determinations and decisions shall not be reviewable.
3.4 Delegation of Certain Responsibilities. The Board may, in its sole discretion, delegate to the Chairman of the Board of the Company (or if there shall be Co-Chairmen, individually or jointly to such Co-
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Chairmen) the administration of the Plan under this Article 3; provided, however, that the Board may not delegate its authority to correct errors, omissions or inconsistencies in the Plan and the Board may not delegate its authority under this Article 3 to grant Awards to Directors. All authority delegated by the Board under this Section 3.4 shall be exercised in accordance with the provisions of the Plan and any guidelines for the exercise of such authority that may from time to time be established by the Board.
3.5 Procedures of the Board. All Awards and other determinations of the Board shall be made by not less than a majority of its members present at the meeting (in person or otherwise) at which a quorum is present. A majority of the entire Board shall constitute a quorum for the transaction of business. Any action required or permitted to be taken at a meeting of the Board may be taken without a meeting if a unanimous written consent, which sets forth the action, is signed by each member of the Board and filed with the minutes for proceedings of the Board.
3.6 Award Agreements. Each Award under the Plan shall be evidenced by an Award Agreement which shall be signed by the Chairman of the Board (or by a Vice Chairman) on behalf of the Board and by the Participant, and shall contain such terms and conditions as may be approved by the Board. Such terms and conditions need not be the same in all cases.
3.7 Rule 16b-3 Requirements. Notwithstanding any other provision of the Plan, the Board may impose such conditions on any Award (including, without limitation, the right of the Board to limit the time of exercise to specified periods) as may be required to satisfy the requirements of Rule 16b-3 (or any successor rule), under the Exchange Act ("Rule 16b-3").
ARTICLE 4. STOCK SUBJECT TO THE PLAN
4.1 Number of Shares of Stock. With respect to calendar year 1999, the
maximum number of shares of Stock that may be made the subject of Awards granted
under the Plan shall be equal of (i) ten (10%) percent of the number of shares
of Stock that were outstanding on a fully diluted basis with respect to the
Stock underlying any outstanding Convertible Securities as of December 31, 1998
(rounded downward if necessary to eliminate fractional shares of stock), minus
(ii) the number of shares of Stock remaining subject to or issued in respect of
Awards which were granted prior to December 31, 1998, which maximum number shall
be reduced by the number of shares of Stock remaining subject to or issued in
respect of Awards which were granted prior to December 31, 1998 under the
Amended and Restated Incentive Stock Plan and the number of shares of Stock made
the subject of Awards under the Amended and Restated Incentive Stock Plan during
the 1999 calendar year. Thereafter, for any given calendar year, the maximum
number of shares of Stock that may be made the subject of Awards granted under
the Plan shall be equal to (i) ten (10%) percent of the number of shares of
Stock that were outstanding on a fully diluted basis with respect to the Stock
underlying any outstanding Convertible Securities as of the end of the
immediately preceding calender year (rounded downward if necessary to eliminate
fractional shares of stock), minus (ii) the number of shares of Stock remaining
subject to or issued in respect of Awards which were granted under the Plan
through the last day of the immediately preceding calendar year (the "Year End
Date"), which maximum number shall be reduced by the number of shares of Stock
remaining subject to or issued in respect of Awards which were granted prior to
the Year End Date under the Amended and Restated Incentive Stock Plan and the
number of shares of Stock made the subject of Awards under the Amended and
Restated Incentive Stock Plan during the current calendar year. Upon a change in
the capitalization or authorized Stock (as described in Section 4.3 hereof) the
maximum number of shares of Stock shall be adjusted in number and kind pursuant
to Section 4.3 hereof. The Company shall reserve for the purposes of the Plan,
out of its authorized but unissued stock or out of such numbers of shares of
Stock held in the Company's treasury, or partly out of each, such number of
shares of Stock as shall be determined by the Board. Upon the granting of an
Award, the number of shares of Stock available under Section 4.1 hereof for the
granting of further Awards shall be reduced as follows:
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(a) In connection with the granting of an Award (other than the granting of a Performance Unit denominated in dollars), the number of shares of Stock shall be reduced by the number of shares of Stock in respect of which the Award is granted or denominated.
(b) In connection with the granting of a Performance Unit denominated in dollars, the number of shares of Stock shall be reduced by an amount equal to the quotient of (a) the dollar amount in which the Performance Unit is denominated, divided by (b) the Fair Market Value of a share of Stock on the date the Performance Unit is granted.
4.2 Lapsed Awards. If any Award (other than Restricted Stock) granted under this Plan terminates, expires, or lapses for any reason, any Stock subject to such Award again shall be available for the grant of an Award under the Plan, subject to Section 7.2 hereof.
4.3 Adjustments in Authorized Stock. In the event of any merger, reorganization, consolidation, recapitalization, separation, liquidation, stock dividend, split-up, stock combination, or other change affecting the Company's Common Stock, such adjustment shall be made in the number and class of Stock which may be delivered under the Plan, and in the number and class of and/or price of Stock subject to outstanding Options, Stock Appreciation Rights, Restricted Stock, Performance Stock, Performance Units and Stock Units granted under the Plan, as may be determined to be appropriate and equitable by the Board, in its sole discretion, to prevent dilution or enlargement of rights; and provided that the number of shares of Stock subject to any Award shall always be a whole number.
ARTICLE 5. ELIGIBILITY AND PARTICIPATION
5.1 Eligibility. Persons eligible to participate in this Plan include all Directors who are not and have not been at any time, within the preceding three (3) years, employees of the Company or any of its Subsidiaries.
5.2 Actual Participation. Subject to the provisions of the Plan, the Board may from time to time select those Directors to whom Awards shall be granted and determine the nature and amount of each Award. No Director shall have any right to be granted an Award under this Plan even if previously granted an Award.
ARTICLE 6. STOCK OPTIONS
6.1 Grant of Options. Subject to the terms and provisions of the Plan, Options may be granted to Directors at any time and from time to time as shall be determined by the Board. The Board shall have the sole discretion, subject to the requirements of the Plan, to determine the actual number of shares of Stock subject to Options granted to any Participant. Options granted under the Plan will be NQSOs.
6.2 Option Agreement. Each Option grant shall be evidenced by an Option Agreement that shall specify the Option price, the duration of the Option, the number of shares of Stock to which the Option pertains, and such other provisions as the Board shall determine.
6.3 Option Price. The purchase price per share of Stock covered by an Option shall be determined by the Board.
6.4 Duration of Options. Each Option shall expire at such time as the Board shall determine at the time of grant.
6.5 Exercise of Options. Subject to Section 3.7 hereof, Options granted under the Plan shall be exercisable at such times and be subject to such restrictions and conditions as the Board shall in each instance approve, which need not be the same for all Participants.
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6.6 Payment. Options shall be exercised by the delivery of a written notice to the Company setting forth the number of shares of Stock with respect to which the Option is to be exercised, accompanied by full payment for the Stock. The Option price upon exercise of any Option shall be payable to the Company in full either (a) in cash or its equivalent, (b) by tendering shares of previously acquired Company Stock having a Fair Market Value at the time of exercise equal to the total Option price, (c) by foregoing compensation under rules established by the Board, or (d) by a combination of (a), (b), or (c). The proceeds from such a payment shall be added to the general funds of the Company and shall be used for general purposes. As soon as practicable, after receipt of written notification and payment, the Company shall deliver to the Participant Stock certificates in an appropriate amount based upon the number of Options exercised, issued in the Participant's name.
6.7 Restrictions on Stock Transferability. The Board shall impose such restrictions on any Stock acquired pursuant to the exercise of an Option under the Plan as it may deem advisable, including, without limitation, restrictions under applicable Federal securities law, under the requirements of any securities exchange upon which such Stock is then listed and under any applicable blue sky or state securities laws.
6.8 Termination of Service Due to Death, Disability, or Retirement. In the event a Participant dies while serving as a Director, any of such Participant's outstanding Options may be exercised at any time prior to the expiration date of the Options or within one (1) year after his death, whichever period is shorter, but only to the extent that the Participant was entitled to exercise the Options at the date of his termination of service, by such person or persons as shall have acquired the Participant's rights under the Option pursuant to Article 10 hereof or by will or by the laws of descent and distribution. In the event a Participant is unable to serve as a Director by reason of disability (as defined under the then established rules of the Company), the Participant shall have the right to exercise outstanding Options at any time prior to the expiration date of the Options or within one (1) year after his disability, whichever period is shorter, but only to the extent that the Participant was entitled to exercise the Options on the date of his termination of service. In the event a Participant retires from the Board, the Participant shall have the right to exercise outstanding Options at any time prior to the expiration date of the Options or within ninety (90) days after his retirement, whichever period is shorter, but only to the extent that the Participant was entitled to exercise the Options on the date of his termination of service. In its sole discretion, the Board may extend the ninety (90) days to up to one (1) year, but in no event beyond the expiration date of the Option.
6.9 Termination of Service for Other Reasons. If a Participant ceases service as a Director for any reason other than death, disability, retirement or removal, the Participant shall have the right to exercise outstanding Options at any time prior to the expiration date of the Options or within the ninety (90) days after the date of his termination, whichever period is shorter, but only to the extent that the Participant was entitled to exercise the Options at the date of his termination of service. In its sole discretion, the Board may extend the ninety (90) days to up to one (1) year, but in no event beyond the expiration date of the Option.
Notwithstanding anything contained herein, if a Director is removed from service, all of the Participant's outstanding Options shall be immediately forfeited back to the Company.
6.10 Limited Transferability of Options. No Option granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, otherwise than by will or by the laws of descent and distribution or as provided for by the Board. Further, all Options (except for Options on which SARs were granted) granted to a Participant under the Plan, unless transferable, shall be exercisable during his lifetime only by such Participant. If the Option Agreement provides, an Option may be transferred by a Participant to the Participants children, grandchildren, spouse, one or more trusts for the benefit of such family members or a partnership in which such family members are the only partners (collectively, "Permitted Family Members"); provided, however, that the Participant may not receive any consideration for the transfer. The holder of an Option transferred pursuant to this section shall be bound by the same terms and conditions that governed the Option during the period that it was held by the Participant.
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ARTICLE 7. STOCK APPRECIATION RIGHTS
7.1 Grant of Stock Appreciation Rights. Subject to the terms and conditions of the Plan, Stock Appreciation Rights may be granted to Participants, at the discretion of the Board, in any of the following forms:
(a) In tandem with Options;
(b) In addition to Options;
(c) Independent of Options; or
(d) In any combination of (a), (b), or (c).
The Board shall have the sole discretion, subject to the requirements of the Plan, to determine the actual number of shares of Stock subject to SARs granted to any Participant.
7.2 Exercise of SARs in Tandem with Options. SARs granted in tandem with Options may be exercised for all or part of the Stock subject to the related Option upon the surrender of the related Options representing the right to purchase an equivalent number of shares of Stock. The SAR may be exercised only with respect to the shares of Stock for which its related Option is then exercisable. Option Stock with respect to which the SAR shall have been exercised may not be subject again to an Award under the Plan.
7.3 Exercise of SARs in Addition to Options. SARs granted in addition to Options shall be deemed to be exercised upon the exercise of the related Options. The deemed exercise of SARs granted in addition to Options shall not necessitate a reduction in the number of related Options.
7.4 Exercise of SARs Independent of Options. Subject to Section 3.7 hereof and Section 7.5 hereof, SARs granted independently of Options may be exercised upon whatever terms and conditions the Board, in its sole discretion, imposes upon the SARs, including, but not limited to, a corresponding proportional reduction in previously granted Options.
7.5 Payment of SAR Amount. Upon exercise of the SAR, the holder shall be entitled to receive payment of an amount determined by multiplying:
(a) The difference between the Fair Market Value of a share of Stock on the date of exercise over the price fixed by the Board at the date of grant (which price shall not be less than one hundred percent (100%) of the market price of a share of Stock on the date of grant) (the "Exercise Price"); by
(b) The number of shares of Stock with respect to which the SAR is exercised.
7.6 Form and Timing of Payment. Payment to a Participant, upon SAR exercise, will be made in cash or Stock, at the discretion of the Board, within ten (10) calendar days of the exercise.
7.7 Term of SAR. The term of an SAR granted under the Plan shall not exceed ten (10) years.
7.8 Termination of Service. In the event a Participant ceases service as a Director by reason of death, disability, retirement, removal or any other reason, the exercisability of any outstanding SAR granted in tandem with or in addition to an Option shall terminate in the same manner as its related Option as specified under Sections 6.8 and 6.9 hereof. The exercisability of any outstanding SARs granted independent of Options also shall terminate in the manner provided under Sections 6.8 and 6.9 hereof.
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7.9 Nontransferability of SARs. No SAR granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, otherwise than by will or by the laws of descent and distribution. Further, all SARs granted to a Participant under the Plan shall be exercisable during his lifetime only by such Participant.
ARTICLE 8. RESTRICTED STOCK
8.1 Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Board, at any time and from time to time, may grant Restricted Stock under the Plan to such Participants and in such amounts as it shall determine.
8.2 Restricted Stock Agreement. Each Restricted Stock grant shall be evidenced, as necessary, by a Restricted Stock Agreement that shall specify the Period of Restriction, or periods, the number of shares of Stock of Restricted Stock granted, and such other provisions as the Board shall determine.
8.3 Transferability. Except as provided in this Article 8, the Restricted Stock granted hereunder may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the termination of the applicable Period of Restriction or for such period of time as shall be established by the Board and as shall be specified in the Restricted Stock Agreement, or upon earlier satisfaction of other conditions (including any Performance Goals, as defined below) as specified by the Board in its sole discretion and set forth in the Restricted Stock Agreement. All rights with respect to the Restricted Stock granted to a Participant under the Plan shall be exercisable during his lifetime only by such Participant.
8.4 Other Restrictions. The Board shall impose such other restrictions on any Restricted Stock granted pursuant to the Plan as it may deem advisable including, without limitation, restrictions under applicable Federal or state securities laws, and the Board may legend certificates representing Restricted Stock to give appropriate notice of such restrictions.
8.5 Certificate Legend. In addition to any legends placed on certificates pursuant to Section 8.4 hereof, each certificate representing Restricted Stock granted pursuant to the Plan shall bear the following legend:
"The sale or other transfer of the shares of stock represented by this certificate, whether voluntary, involuntary, or by operation of law, is subject to certain restrictions on transfer set forth in the Amended and Restated 1997 Non-Employee Directors Stock Plan of Capital Trust, Inc. in the rules and administrative procedures adopted pursuant to such Plan, and in a Restricted Stock Agreement dated ___________. A copy of the Plan, such rules and procedures, and such Restricted Stock Agreement may be obtained from the Secretary of Capital Trust, Inc."
8.6 Removal of Restrictions. Except as otherwise provided in this Article and subject to applicable securities laws and restrictions imposed pursuant thereto, Restricted Stock shall become transferable by the Participant after the last day of the Period of Restriction. Once the Stock is released from the restrictions, the Participant shall be entitled to have the legend required by Section 8.5 hereof removed from his Stock certificate.
8.7 Voting Rights. During the Period of Restriction, Participants holding Restricted Stock granted hereunder may exercise full voting rights with respect to such Stock.
8.8 Dividends and Other Distributions. During the Period of Restriction, Participants holding Restricted Stock granted hereunder shall be entitled to receive all dividends and other distributions paid with respect to such Stock while they are so held. If any such dividends or distributions are paid in Stock, the Stock shall be subject to the same restrictions on transferability as the Restricted Stock with respect to which they were paid.
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8.9 Termination of Service. In the event that a Participant ceases to
be a Director of the Company for any reason during the Period of Restriction,
then any Restricted Stock still subject to restrictions as of the date of such
termination shall automatically be forfeited and returned to the Company;
provided, however, that in the event that Participant ceases to be a Director
for any reason other than removal, the Board, in its sole discretion (subject to
Section 3.7 hereof) may waive the automatic forfeiture of any and all Stock and
may add such new restrictions to such Restricted Stock as it deems appropriate.
ARTICLE 9. PERFORMANCE UNITS, PERFORMANCE STOCK AND STOCK UNITS
9.1 Grant of Performance Units, Performance Stock or Stock Units. Subject to the terms and provisions of the Plan, Performance Units, Performance Stock or Stock Units may be granted to Participants at any time and from time to time as shall be determined by the Board. The Board shall have complete discretion in determining the number of Performance Units, shares of Performance Stock or Stock Units granted to each Participant.
9.2 Value of Performance Units and Performance Stock. The Board shall set certain periods to be determined in advance by the Board (the "Performance Periods"). Prior to each grant of Performance Units or Performance Stock, the Board shall establish an initial value for each Performance Unit and an initial number of shares of Stock for each share of Performance Stock granted to each Participant for that Performance Period. Prior to each grant of Performance Units or Performance Stock, the Board also shall set the Performance Goals (the "Performance Goals") that will be used to determine the extent to which the Participant receives a payment of the value of the Performance Units or number of shares of Stock for the Performance Stock awarded for such Performance Period. These goals will be based on the attainment by the Company of certain objective or subjective performance measures, which may include one or more of the following: total stockholder return, return on equity, return on capital, earnings per share, asset growth, market share, stock price, revenues, costs, net income, cash flow and retained earnings. Such Performance Goals also may be based upon the attainment of specified levels of performance of the Company under one or more of the measures described above relative to the performance of other corporations. With respect to each such performance measure utilized during a Performance Period, the Board shall assign percentages to various levels of performance which shall be applied to determine the extent to which the Participant shall receive a payout of the values of Performance Units and number of shares of Performance Stock awarded.
9.3 Payment of Performance Units and Performance Stock. After a Performance Period has ended, the holder of a Performance Unit or Performance Stock shall be entitled to receive the value thereof as determined by the Board. The Board shall make this determination by first determining the extent to which the Performance Goals set pursuant to Section 9.2 hereof have been met. It will then determine the applicable percentage (which may exceed one hundred percent (100%)) to be applied to, and will apply such percentage to, the value of Performance Units or number of shares of Performance Stock to determine the payout to be received by the Participant.
9.4 Value of Stock Units. Subject to the terms and provisions of the Plan, Stock Units may be granted to Participants at any time and from time to time on such terms as shall be determined by the Board. The Board shall have complete discretion in determining the number of Stock Units granted to each Participant. Stock Units shall be payable in Stock upon the occurrence of certain trigger events set forth on the Participant's Election Form in his or her complete discretion (the "Trigger Events"). The terms and conditions of the Trigger Events may vary by Stock Unit Award, by Participant, or both. The Election Form shall be filed with the Secretary of the Company prior to the date on which any Stock Unit Award is made. Such election will be irrevocable as to any Stock Unit Award made after delivery of the Election Form to the Company, and it shall continue in effect until revoked, increased or decreased prospectively by a Participant prior to the grant of any future Stock Unit Award for which the change is effective.
9.5 Accounting for Stock Units. A Participant's Stock Unit Award shall be credited by the Company to a bookkeeping account to reflect the Company's liability to that Participant (the "Stock Unit Account"). Each Stock Unit is credited as a Stock equivalent on the date so credited. Additional Stock equivalents may be added to
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the Stock Unit Account equal to the amount of Stock that could be purchased with dividends equal to that paid on one share of Stock, multiplied by the number of stock equivalents then existing in the Stock Unit Account, based on the Fair Market Value of the Stock on the date a dividend is paid on the Stock. Because the Trigger Events for each Stock Unit Award may differ, the Company shall establish a separate Stock Unit Account for each separate Stock Unit Award. Upon the occurrence of particular Trigger Events, the holder of a Stock Unit Award shall be entitled to receive a number of shares of Stock which corresponds to the number of Stock Units granted as part of the initial Stock Unit Award, as such amount may have been increased to reflect dividends paid with respect thereto.
9.6 Board Discretion to Adjust Awards. The Board shall have the authority to modify, amend or adjust the terms and conditions of any Performance Unit Award, Performance Stock Award or Stock Unit Award, at any time or from time to time, including but not limited to the Performance Goals.
9.7 Form of Payment. The value of a Performance Unit or Performance Stock may be paid in cash, Stock or a combination thereof as determined by the Board. In the case of Stock Units, payment shall be made in Stock. Payment may be made in a lump sum or installments as prescribed by the Board. If any payment is to be made on a deferred basis, the Board may provide for the payment of dividend equivalents or interest during the deferral period.
9.8 Termination of Service Due to Death, Disability or Retirement. In the case of death, disability or retirement (each of disability and retirement as defined under the established rules of the Company), the holder of a Performance Unit or Performance Stock shall receive a prorated payment based on the Participant's number of full months of service during the Performance Period and on the percentage of the Performance Goals achieved through the date of termination, as computed by the Board. Payment shall be made at the time payments are made to Participants who did not terminate service during the Performance Period. In the case of Stock Units, all such Stock Units held to the extent vested on the date that the Participant ceases to be a Director, will be paid as set forth in the Participant's Election Form.
9.9 Termination of Service for Other Reasons. In the event that a Participant ceases to be a Director of the Company for any reason other than death, disability or retirement, the Board shall have the discretion to determine the disposition of the Participant's Performance Units and Performance Stock. In the case of termination other than due to removal, all Stock Units held to the extent vested on the date that the Participant ceases to be a Director, will be paid as set forth in the Participant's Election Form. However, in the event of termination due to removal, all Stock Units held will be forfeited.
9.10 Nontransferability. No Performance Units, Performance Stock or Stock Units granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, otherwise than by will or by the laws of descent and distribution until the termination of the applicable Performance Period or, in the case of Stock Units, until payment. All rights with respect to Performance Units, Performance Stock and Stock Units granted to a Participant under the Plan shall be exercisable during his lifetime only by such Participant.
ARTICLE 10. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively and who may include a trustee under a will or living trust) to whom any benefit under the Plan is to be paid in case of his death before he receives any or all of such benefit. Each designation will revoke all prior designations by the same Participant, shall be in a form prescribed by the Board, and will be effective only when filed by the Participant in writing with the Board during his lifetime. In the absence of any such designation or if all designated beneficiaries predecease the Participant, benefits remaining unpaid at the Participant's death shall be paid to the Participant's estate.
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ARTICLE 11. RIGHTS OF DIRECTORS
11.1 Directorship. Nothing in the Plan shall interfere with or limit in any way the right of the Board of Directors or stockholders under applicable law to remove any Participant from the Board at any time, nor confer upon any Participant any right to continue in the service of the Company.
11.2 Participation. No Director shall have a right to be selected as a Participant, or, having been so selected, to be selected again as a Participant.
11.3 No Implied Rights; Rights on Termination of Service. Neither the establishment of the Plan nor any amendment thereof shall be construed as giving any Participant, beneficiary, or any other person any legal or equitable right unless such right shall be specifically provided for in the Plan or conferred by specific action of the Board in accordance with the terms and provisions of the Plan. Except as expressly provided in this Plan, the Company shall not be required or be liable to make any payment under the Plan.
11.4 No Right to Company Assets. Neither the Participant nor any other person shall acquire, by reason of the Plan, any right in or title to any assets, funds or property of the Company whatsoever including, without limiting the generality of the foregoing, any specific funds, assets, or other property which the Company, in its sole discretion, may set aside in anticipation of a liability hereunder. Any benefits which become payable hereunder shall be paid from the general assets of the Company. The Participant shall have only a contractual right to the amounts, if any, payable hereunder unsecured by any asset of the Company. Nothing contained in the Plan constitutes a guarantee by the Company that the assets of the Company shall be sufficient to pay any benefit to any person.
ARTICLE 12. CHANGE IN CONTROL
12.1 Stock-Based Awards. Notwithstanding any other provisions of the Plan, in the event of a Change in Control, all Stock-based Awards granted under this Plan shall immediately vest one hundred percent (100%) in each Participant, including Nonqualified Stock Options, Stock Appreciation Rights, Restricted Stock and Stock Units.
12.2 Performance-Based Awards. Notwithstanding any other provision of
the Plan, in the event of a Change in Control, all performance-based Awards
granted under this Plan shall be immediately paid out in cash, including
Performance Units and Performance Stock. The amount of the payout shall be based
on the higher of: (i) the extent, as determined by the Board, to which
Performance Goals, established for the Performance Period then in progress have
been met up through and including the effective date of the Change in Control or
(ii) one hundred percent (100%) of the value on the date of grant of the
Performance Units or number of Performance Stock.
12.3 Pooling Transactions. Notwithstanding anything contained in the Plan or any agreement to the contrary, in the event of a Change in Control which is also intended to constitute a Pooling Transaction, the Committee shall take such actions, if any, which are specifically recommended by an independent accounting firm retained by the Company to the extent reasonably necessary in order to assure that the Pooling Transaction will qualify as such, including but not limited to (a) deferring the vesting, exercise, payment or settlement with respect to any Award, (b) providing that the payment or settlement in respect of any Award be made in the form of cash, Stock or securities of a successor or acquired of the Company, or a combination of the foregoing and (c) providing for the extension of the term of any Award to the extent necessary to accommodate the foregoing, but not beyond the maximum term permitted for any Award.
ARTICLE 13. AMENDMENT, MODIFICATION AND TERMINATION
13.1 Amendment, Modification and Termination. At any time and from time to time, the Board may terminate, amend or modify the Plan, subject to the approval of the stockholders of the Company if required by the
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Code, by the insider trading rules of Section 16 of the Exchange Act, by any securities exchange or system on which the Stock is then listed or reported, or by any regulatory body having jurisdiction with respect hereto.
13.2 Awards Previously Granted. No termination, amendment or modification of the Plan other than pursuant to Section 4.3 hereof shall in any manner adversely affect any Award theretofore granted under the Plan, without the written consent of the Participant.
ARTICLE 14. WITHHOLDING
Tax Withholding. The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, state and local taxes (including the Participant's FICA obligation) required by law to be withheld with respect to any grant, exercise, or payment made under or as a result of this Plan.
ARTICLE 15. EFFECT OF CERTAIN TRANSACTIONS
Effect of Certain Transactions. Subject to Section 12 hereof, or as otherwise provided in an agreement, in the event of (a) the liquidation or dissolution of the Company or (b) a merger, consolidation or combination of the Company (a "Transaction"), the Plan and the Awards issued hereunder shall continue in effect in accordance with their respective terms except that following a Transaction each Participant shall be entitled to receive in respect of each share of Stock subject to any outstanding Options or Awards, as the case may be, upon exercise of any Option or payment or transfer in respect of any Award, the same number and kind of Stock, securities, cash, property, or other consideration that each holder of a share of Stock was entitled to receive in the Transaction in respect of a share; provided, however, that such Stock, securities, cash, property, or other consideration shall remain subject to all of the conditions, restrictions and performance criteria which were applicable to the Options or Awards prior to such Transaction.
ARTICLE 16. REQUIREMENTS OF LAW
16.1 Requirements of Law. The granting of Awards and the issuance of Stock under this Plan shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or securities exchanges as may be required.
16.2 Governing Law. The Plan, and all agreements hereunder, shall be construed in accordance with and governed by the laws of the State of New York.
Effective Date of this Amended and Restated 1997 Non-Employee Director Stock Plan: January 28, 1998
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Exhibit 10.3
CAPITAL TRUST, INC.
1998 EMPLOYEE STOCK PURCHASE PLAN
The purpose of this Plan is to provide eligible employees of Capital Trust, Inc., a Maryland corporation, and any corporate successor to all or substantially all of the assets or voting stock of Capital Trust, Inc. which shall by appropriate action adopt the Plan (the "Company") and certain of its subsidiaries with opportunities to purchase class A common stock, par value $.01 per share, of the Company (the "Common Stock").
1. Definitions. For purposes of administration of the Plan, the following terms shall have the meanings indicated:
"Authorization Form" shall be defined in Section 6 hereof.
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the committee of the Board, if any, appointed to administer the Plan.
"Compensation" means the amount of money reportable on the employee's Federal Income Tax Withholding Statement, excluding allowances and reimbursements for expenses such as relocation allowances for travel expenses, income or gains on the exercise of Company stock options and similar items, whether or not shown on the employee's Federal Income Tax Withholding Statement.
"Continuity of Control" shall be defined in Section 19 hereof.
"Designated Subsidiary" shall be defined in Section 4 hereof.
"Exercise Date" shall be defined in Section 11 hereof.
"Investment Account" shall mean the separate account for each participating employee reflecting the number of shares of Common Stock purchased under the Plan that have not been withdrawn by the employee.
"Offering Commencement Date" shall be defined in Section 5 hereof.
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"Offerings" shall be defined in Section 5 hereof.
"Option" shall be defined in Section 11 hereof.
"Plan" shall mean the Capital Trust 1998 Employee Stock Purchase Plan.
"Plan Period" shall be defined in Section 5 hereof.
2. Share Authorization. The maximum number of shares of Common Stock that may be issued under the Plan is (a) 1,000,000 minus (b) the number of shares of Common Stock subject to or issued under the Company's 1998 Non-Employee Stock Purchase Plan.
3. Administration. The Plan will be administered by the Board or by the Committee. The Board or the Committee has authority to make rules and regulations for the administration of the Plan and its interpretation and decisions with regard thereto shall be final and conclusive.
4. Eligibility. Participation in the Plan will neither be permitted nor denied contrary to the requirements of Section 423 of the Code and regulations promulgated thereunder. All employees of the Company, including directors who are employees, and all employees of any subsidiary of the Company (as defined in Section 424(f) of the Code) designated by the Board or the Committee from time to time (a "Designated Subsidiary"), are eligible to participate in any one or more of the offerings of Options to purchase Common Stock under the Plan provided that:
(a) they are regularly employed by the Company or a Designated Subsidiary for more than twenty (20) hours a week and for more than five (5) months in a calendar year, and they have been employed, as of the applicable Offering Commencement Date (as defined below), for at least three (3) months; and
(b) they are employees of the Company or a Designated Subsidiary on the first day of the applicable Plan Period (as defined below).
No employee may be granted an Option hereunder if such
employee, immediately after the option is granted, owns five (5%) percent or
more of the total combined voting power or value of the stock of the Company or
any subsidiary. For purposes of the preceding sentence, the attribution rules of
Section 424(d) of the Code shall apply in determining the stock ownership of an
employee, and all stock which the employee has a contractual right to purchase
shall be treated as stock owned by the employee.
5. Offerings. Common Stock shall be offered for purchase under the Plan through a series of successive offerings ("Offerings") until such time as (i) the maximum number of shares of Common Stock available for issuance under the Plan shall have been issued pursuant
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to purchase rights granted under the Plan or (ii) the Plan shall have been sooner terminated in accordance with Section 22 hereof. The initial Offering will begin upon the later of (i) January 1, 1999 or (ii) the effective date of the Registration Statement on Form S-8 covering the shares of Common Stock issuable under the Plan, and will end on June 30, 1999. The second Offering will begin on July 1, 1999 and end on December 31, 1999. Subsequent Offerings will begin on the successive January 1 or July 1 (each, an "Offering Commencement Date"). Each Offering Commencement Date will begin a six (6) month period (a "Plan Period") during which payroll deductions will be made and held for the purchase of Common Stock at the end of the Plan Period. The Board or the Committee may, at its discretion, choose a different Plan Period of twelve (12) months or less for subsequent Offerings.
6. Participation. An employee eligible on the Offering Commencement Date of any Offering may participate in such Offering by completing and forwarding a payroll deduction authorization form ("Authorization Form") to the employee's appropriate payroll office at least thirty (30) days prior to the applicable Offering Commencement Date. The Authorization Form will authorize a regular payroll deduction from the Compensation received by the employee during the Plan Period. Unless an employee files a new form or withdraws from the Plan, the employee's deductions and purchases will continue at the same rate for future Offerings under the Plan as long as the Plan remains in effect.
7. Deductions. The Company will maintain payroll deduction accounts for participating employees. Payroll deductions may be at a set dollar amount not less than $10.00 or a rate of any whole percentage of Compensation, subject to the limitations in Section 11 hereof, with any change in Compensation during the Plan Period to result in an automatic corresponding change in the dollar amount withheld.
No employee may be granted an Option (as defined in Section 11 hereof) which permits the employee's rights to purchase Common Stock under this Plan and any other stock purchase plan of the Company and its subsidiaries, to accrue at a rate which exceeds $25,000 of the fair market value of such Common Stock (determined at the Offering Commencement Date of the Plan Period) for each calendar year in which the Option is outstanding at any time.
8. Deduction Changes. An employee may decrease or discontinue
payroll deductions once during any Plan Period, by filing a new Authorization
Form. However, an employee may not increase his payroll deduction during a Plan
Period. If an employee elects to discontinue his payroll deductions during a
Plan Period, but does not elect to withdraw the employee's funds pursuant to
Section 10 hereof, funds deducted prior to the election to discontinue will be
applied to the purchase of Common Stock on the Exercise Date.
9. Interest. Interest will not be paid on any employee accounts, except to the extent that the Board or the Committee, in its sole discretion, elects to credit employee accounts with interest at such per annum rate as it may from time to time determine.
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10. Withdrawal of Funds. An employee may at any time prior to the close of business on the last business day in a Plan Period and for any reason permanently draw out the balance accumulated in the employee's account and thereby withdraw from participation in an Offering. Partial withdrawals are not permitted. The employee may not begin participation again during the remainder of the Plan Period. The employee may participate in any subsequent Offering in accordance with terms and conditions established by the Board or the Committee.
11. Purchase of Stock. On the Offering Commencement Date of each Plan Period, the Company will grant to each eligible employee who is then a participant in the Plan an option ("Option") to purchase on the last business day of such Plan Period (the "Exercise Date"), at the Option Price hereinafter provided for, such number of shares of whole Common Stock obtained by dividing the amount collected from the participant through payroll deductions during the Plan Period for which such Option is outstanding, together with any amount carried over from the preceding Plan Period pursuant to this Section 11, by the Option Price in effect for the Plan Period. However, the maximum number of shares of Common Stock purchasable by any participant during any one Plan Period shall not exceed $12,500 divided by the fair market value of a share of Common Stock on the first business day of the applicable Plan Period.
The purchase price for each share of Common Stock purchased shall be 85% of the average of the closing prices of the Common Stock on each business day of the applicable Offering, provided the purchase price shall not be less than the lesser of (i) 85% of the closing price on the first business day of such Plan Period or (ii) 85% of the closing price on the last business day of the Plan Period (the "Option Price"). Such closing prices shall be (a) the closing price on any national securities exchange on which the Common Stock is listed, (b) the closing price of the Common Stock on the Nasdaq National Market or (c) the average of the closing bid and asked prices in the over-the-counter-market, whichever is applicable, as published in The Wall Street Journal.
Each employee who continues to be a participant in the Plan on the Exercise Date shall be deemed to have exercised the employee's Option at the Option Price on such date and shall be deemed to have purchased from the Company the number of full shares of Common Stock reserved for the purpose of the Plan that the employee's accumulated payroll deductions on such date will pay for pursuant to the formula set forth above (but not in excess of the maximum number determined in the manner set forth above). The Company, or its designated agent, shall hold in its name or in the name of its nominee all certificates for the Common Stock purchased until the Common Stock is withdrawn under Section 13 hereof.
Any balance remaining in an employee's payroll deduction account at the end of a Plan Period will be automatically refunded to the employee, except that any balance which is less than the purchase price of one share of Common Stock will be carried forward into the employee's payroll deduction account for the following Offering, unless the employee elects not to participate in the following Offering under the Plan, in which case the balance in the employee's account shall be refunded.
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12. Employee's Rights as a Stockholder. No participating employee shall have any right as a stockholder with respect to any shares of Common Stock under the Plan until the Common Stock has been purchased in accordance with Section 11 hereof.
All cash dividends paid with respect to the Common Stock in a employee's Investment Account shall, unless otherwise directed by the Board or Committee, be used to purchase additional shares of Common Stock on the next date such stock is purchased pursuant to Section 11 hereof, subject to the limitations in Section 11 hereof. Such shares of Common Stock shall be added to the employee's Investment Account.
Each employee shall be entitled to direct the Company, or its designated agent, as to the voting of any Common Stock held in the employee's Investment Account.
13. Withdrawal from Investment Account. An employee shall have the right to request, not more than once per calendar quarter, that a certificate be issued for all or a portion of the Common Stock credited to his Investment Account by giving notice to the Company; provided that if any of the Common Stock with respect to which a certificate has been requested has been credited to the employee's Investment Account for less than one (1) year, the employee shall not be permitted to participate in the Offering that commences immediately after such certificate is issued.
Each certificate withdrawn by a employee may be registered only in the name of the employee, or if the employee so directs, in the names of the employee and one other person, as joint tenants with right of survivorship, tenants in common, or as community property, or (in the Company's sole discretion) in the street name of a brokerage firm, bank or other nominee holder designated by the employee to the extent and in the manner permitted by applicable law.
14. Rights Not Transferable. No employee shall be permitted to sell, assign, transfer, pledge, or otherwise dispose of or encumber either the payroll deductions credited to his or her payroll deduction account, Common Stock credited to his or her Investment Account, or any rights with regard to the exercise of an Option or to receive stock under the Plan other than by will or the laws of descent and distribution, and such right and interest shall not be liable for, or subject to, the debts, contracts, or liabilities of the employee. If any such action is taken by the employee, or any claim is asserted by any other party in respect of such right and interest whether by garnishment, levy, attachment or otherwise, such action or claim will be treated as an election to withdraw in accordance with Section 10 or Section 13 hereof, whichever is applicable.
15. Rights on Retirement, Death or Termination of Employment. In the event an employee's employment shall be terminated prior to the last business day of a Plan Period by reason of resignation, layoff or discharge, no payroll deduction shall be taken from any pay due and owing to an employee and the balance in the employee's payroll deduction account and the shares of Common Stock in the employee's Investment Account shall be paid in cash or issued to the employee, as the case may be. In the event an employee's employment shall be terminated (a) within ninety (90) days of the last day of the current Offering by reason of retirement or disability, or (b)
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at any time during the current Offering by reason of death, the employee (or the employee's a beneficiary previously designated in a revocable notice signed by the employee (with any spousal consent required under state law) or, in the absence of such a designated beneficiary, the executor or administrator of the employee's estate or, if no such executor or administrator has been appointed to the knowledge of the Company, to such other person(s) as the Company may, in its discretion, designate) shall have the right prior to the end of the current Offering to elect to have the balance of his or her payroll deduction account either paid to the employee in cash or applied at the end of the current Offering toward the purchase of Common Stock and the Company shall otherwise issue to the employee the Stock in his Investment Account. If an employee's employment shall be terminated more than ninety (90) days from the last day of the current Offering by reason of retirement or disability, the balance of the employee's payroll deduction account and the shares in the employee's Investment Account shall be paid in cash or issued to the employee, as the case may be. If, prior to the last business day of the Plan Period, the Designated Subsidiary by which an employee is employed shall cease to be a subsidiary of the Company, or if the employee is transferred to a subsidiary of the Company that is not a Designated Subsidiary, the employee shall be deemed to have terminated employment for the purposes of this Plan.
16. Optionees Not Stockholders. Neither the granting of an Option to an employee nor the deductions from his pay shall constitute such employee a stockholder of the shares of Common Stock covered by an Option under this Plan until such stock has been purchased by the employee.
17. Application of Funds. All funds received or held by the Company under this Plan may be combined with other corporate funds and may be used for any corporate purpose.
18. Adjustment in Case of Changes Affecting Common Stock. In the event of a subdivision of outstanding shares of Common Stock, or the payment of a dividend in Common Stock, the number of shares of Stock approved for this Plan, and the share limitation set forth in Section 11 hereof, shall be increased proportionately, and such other adjustment shall be made as may be deemed equitable by the Board or the Committee. In the event of any other change affecting the Common Stock such adjustment shall be made as may be deemed equitable by the Board or the Committee to give proper effect to such event.
19. Merger. If the Company shall at any time merge or consolidate with another corporation and the holders of the capital stock of the Company immediately prior to such merger or consolidation continue to hold at least 80% by voting power of the capital stock of the surviving corporation ("Continuity of Control"), the holder of each Option then outstanding will thereafter be entitled to receive at the next Exercise Date upon the exercise of such Option for each share of Common Stock as to which such Option shall be exercised the securities or property which a holder of Common Stock was entitled to receive at the time of such merger, and the Committee shall take such steps in connection with such merger as the Committee shall deem necessary to assure that the provisions of Section 18 hereof shall thereafter be applicable, as nearly as reasonably may be, in
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relation to the said securities or property as to which such holder of such Option might thereafter be entitled to receive thereunder.
In the event of a merger or consolidation of the Company with or into another corporation which does not involve Continuity of Control, or of a sale of all or substantially all of the assets of the Company while unexercised Options remain outstanding under the Plan, (a) subject to the provisions of clauses (b) and (c), after the effective date of such transaction, each holder of an outstanding Option shall be entitled, upon exercise of such Option, to receive in lieu of Common Stock shares of such stock or other securities as the holders of Common Stock received pursuant to the terms of such transaction; or (b) all outstanding Options may be canceled by the Board or the Committee as of a date prior to the effective date of any such transaction and all payroll deductions shall be paid out to the participating employees; or (c) all outstanding Options may be canceled by the Board or the Committee as of the effective date of any such transaction, provided that notice of such cancellation shall be given to each holder of an Option, and each holder of an Option shall have the right to exercise such Option in full based on payroll deductions then credited to his account as of a date determined by the Board or the Committee, which date shall not be less than ten (10) days preceding the effective date of such transaction.
20. Amendment of the Plan. The Board may at any time, and from time to time, amend this Plan in any respect, except that (a) if the approval of any such amendment by the stockholders of the Company is required by Section 423 of the Code, such amendment shall not be effected without such approval, and (b) in no event may any amendment be made which would cause the Plan to fail to comply with Section 423 of the Code.
21. Insufficient Stock. In the event that the total number of shares of Common Stock specified in elections to be purchased under any Offering plus the number of shares of Common Stock purchased under previous Offerings under this Plan exceeds the maximum number of shares of Common Stock issuable under this Plan, the Board or the Committee will allot the Common Stock then available on a pro rata basis.
22. Termination of the Plan. This Plan may be terminated at any time by the Board or the Committee. The Plan will terminate in any case on the date on which all or substantially all of the unissued Common Stock reserved for issuance under the Plan have been purchased. Upon termination of this Plan all amounts in the payroll deduction accounts of participating employees shall be promptly refunded.
23. Governmental Regulations. The Company's obligation to sell and deliver Common Stock under this Plan is subject to listing on a national stock exchange or quotation on the Nasdaq National Market and the approval of all governmental authorities required in connection with the authorization, issuance or sale of such Common Stock.
The Plan shall be governed by New York law except to the extent that such law is preempted by federal law.
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The Plan is intended to constitute a "Stock Purchase Plan" within the meaning of Rule 16b-3(b)(5) promulgated under the Securities Exchange Act of 1934.
24. Issuance of Stock. Stock may be issued upon exercise of an Option from authorized but unissued Common Stock, from stock held in the treasury of the Company, or from any other proper source.
25. Notification upon Sale of Stock. Each employee agrees, by
entering the Plan, to promptly give the Company notice of any disposition of
Common Stock purchased under the Plan where such disposition occurs within two
(2) years after the date of grant of the Option pursuant to which such Common
Stock were purchased.
26. Effective Date and Approval of Stockholders. The Plan was adopted by the Board of Trustees of Capital Trust, a California business trust (the "Predecessor"), the predecessor of the Company to become effective as of April 24, 1998, subject to approval of the Predecessor's shareholders on or before April 23, 1999. The shareholders of the Predecessor approved the Plan on January 28, 1999 and the Plan thereupon became effective. Upon consummation of the reorganization of the Predecessor into the Company on January 28, 1999 after such shareholder approval was obtained, the Company succeeded to and assumed the Plan. On January 28, 1999, the Plan was amended, effective on that date to change all references to "Capital Trust" to "Capital Trust, Inc." and make additional technical revisions that reflect the different capital and governance structure of the Company.
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Exhibit 10.4
CAPITAL TRUST, INC.
1998 NON-EMPLOYEE STOCK PURCHASE PLAN
1. Purpose
The purpose of this Plan is to provide eligible non-employees of Capital Trust, Inc., a Maryland corporation, and any corporate successor to all or substantially all of the assets or voting stock of Capital Trust, Inc., which shall by appropriate action adopt the Plan (the "Company") and certain of its subsidiaries with opportunities to purchase class A common stock, par value $.01 per share, of the Company (the "Common Stock").
2. Definitions
2.1 "Account" shall mean the separate bookkeeping account established and maintained by the Committee or the Board, as the case may be, for each Participant for each Plan Period to record the contributions made on his or her behalf to purchase Common Stock under this Plan.
2.2 "Beneficiary" shall mean the person designated as such in accordance with Section 11 hereof.
2.3 "Board" shall mean the Board of Directors of the Company.
2.4 "Committee" shall mean the Committee of the Board, if any, appointed to administer the Plan.
2.5 "Common Stock" shall have the meaning set forth in the Preamble hereof.
2.6 "Company" shall have the meaning set forth in the Preamble hereof.
2.7 "Continuity of Control" shall have the meaning set forth in Section 13 hereof.
2.8 "Election Form" shall mean the form which an Eligible Non-Employee shall be required to properly complete in writing and timely file at least thirty (30) days prior to the applicable Offering Commencement Date in order to make any of the elections available to an Eligible Non-Employee under this Plan.
2.9 "Eligible Non-Employee" shall mean key consultants, other service providers and non-employee directors of the Company or certain of its subsidiaries.
2.10 "Exercise Date" shall have the meaning set forth in Section 8 hereof.
2.11 "Offering(s)" shall mean the series of successive offerings through which Common Stock shall be offered for purchase under the Plan.
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2.12 "Offering Commencement Date" shall have the meaning set forth in
Section 5 hereof.
2.13 "Option" shall have the meaning set forth in Section 8 hereof.
2.14 "Option Price" shall mean the purchase price for each share of Common Stock which is 85% of the average of the closing price of the Common Stock on each business day of the applicable Offering, provided the purchase price shall not be less than the lesser of (i) 85% of the closing price on the first business day of such Plan Period or (ii) 85% of the closing price on the last business day of the Plan Period. Such closing prices shall be (a) the closing price on any national securities exchange on which the Common Stock is listed, (b) the closing price of the Common Stock on The Nasdaq National Market, or (c) the average of the closing bid and asked prices in the over-the-counter market, whichever is applicable, as published in The Wall Street Journal.
2.15 "Participant" shall mean (a) for each Plan Period an Eligible Non-Employee who has elected to purchase Common Stock in accordance with Section 6 hereof in such Plan Period and (b) any person for whom a share of Common Stock is held pending delivery under Section 9 hereof.
2.16 "Plan" shall mean this Capital Trust, Inc. 1998 Non-Employee Stock Purchase Plan.
2.17 "Plan Period" shall mean the six (6) month period, beginning on each Offering Commencement Date, during which the Participant may make contributions to his or her Account.
2.18 "Rule 16b-3" shall mean Rule 16b-3 promulgated under Section 16(b) of the Securities Exchange Act of 1934, as amended, or any successor to such rule.
3. Stock Authorization
The maximum number of shares of Common Stock that may be issued under the Plan shall be equal to (i) 1,000,000 minus (ii) the number of shares of Common Stock remaining subject to or issued under the Company's 1998 Employee Stock Purchase Plan.
4. Administration
The Plan will be administered by either the Committee or by the Board. The Committee or the Board, as the case may be, has the authority to make rules and regulations for the administration of the Plan and its interpretation and decisions with regard thereto shall be final and conclusive.
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5. Offerings
Common Stock shall be offered through Offerings until such time as (i)
the maximum number of shares of Common Stock available for issuance under the
Plan shall have been issued pursuant to purchase rights granted under the Plan
or (ii) the Plan shall have been sooner terminated in accordance with Section 15
hereof. The initial Offering will begin upon the later of (i) January 1, 1999 or
(ii) the effective date of the Registration Statement on Form S-8 covering the
Common Stock issuable under the Plan, and will end on June 30, 1999. The second
Offering will begin on July 1, 1999 and end on December 31, 1999. Subsequent
Offerings will begin on the successive January 1 or July 1 (each an "Offering
Commencement Date"). Each Offering Commencement Date will begin a Plan Period.
The Board or the Committee may, at its discretion, choose a different Plan
Period of twelve (12) months or less for subsequent Offerings.
6. Participation
Each person who is an Eligible Non-Employee shall be a Participant in this Plan for the related Plan Period if he or she properly completes and timely files an Election Form with the Committee or the Board, as the case may be, to elect to participate in this Plan. An Election Form may require an Eligible Non-Employee to provide such information and to agree to take such action (in addition to the action required under Section 7 hereof) as the Committee or the Board, as the case may be, deems necessary or appropriate in light of the purpose of this Plan or for the orderly administration of this Plan.
7. Contributions
(a) In General. Each Participant's Election Form under Section 6 hereof shall specify the contributions that he or she proposes to make for the related Plan Period. Such contributions shall be expressed as a specific dollar amount that the Participant proposes to contribute in cash, subject to the restrictions noted in Section 8(a) hereof. The Participant shall have delivered to the Committee or the Board, as the case may be, either in installments or in a lump sum, the full contribution amount, as noted on the applicable Election Form, no later than five (5) days prior to the last day of the Plan Period for which such contribution is being made.
No Participant may be granted an Option which permits his or her rights to purchase Common Stock under this Plan and any other stock purchase plan of the Company and its subsidiaries, to accrue at a rate which exceeds $25,000 of the fair market value of such Common Stock (determined at the Offering Commencement Date of the Plan Period) for each calendar year in which the Option is outstanding at any time.
(b) Changes in Contributions and Withdrawals. (i) A Participant shall have the right to amend his or her Election Form once during any Plan Period to reduce or to stop his or her contributions, and such election shall be effective immediately for cash contributions and as soon as practicable after the Committee or the Board, as the case may be, actually receives such
760131.12
amended Election Form. If a Participant elects to stop his or her contributions during a Plan Period, but does not elect to withdraw his or her funds pursuant to this Section, funds contributed prior to his or her election to stop contributions will be applied to the purchase of Common Stock on the Exercise Date. A Participant may at any time prior to the close of business on the last business day in a Plan Period, and for any reason, permanently draw out the balance accumulated in the Participant's Account and thereby withdraw from participation in an Offering. Partial withdrawals are not permitted. The Participant may not begin participation again during the remainder of the Plan Period. The Participant may participate in any subsequent Offering in accordance with the terms and conditions established by the Committee or the Board, as the case may be.
(ii) A Participant shall have the right to request, not more than once per calendar quarter, that a certificate be issued for all or a portion of the Common Stock credited to his or her Account by giving notice to the Company; provided that if any of the Common Stock with respect to which a certificate has been requested has been credited to the Participant's Account for less than one (1) year, the Participant shall not be permitted to participate in the Offering that commences immediately after such certificate is issued.
(iii) Each certificate withdrawn by a Participant may be registered only in the name of the Participant, or if the Participant so directs, the names of the Participant and one other person, as joint tenants with right of survivorship, tenants in common, or as community property, or (in the Company's sole discretion) in the street name of a brokerage firm, bank or other nominee holder designated by the Participant to the extent and in the manner permitted by applicable law.
(c) Account Credits, General Assets and Taxes. All contributions made by a Participant under this Plan shall be held by the Company. All funds received or held by the Company under this Plan may be combined with other corporate funds and may be used for any corporate purpose. No interest shall be paid or accrued on any such contributions, except to the extent that the Committee or the Board, in its sole discretion, elects to credit the Accounts of Participants with interest at such per annum rate as it may from time to time determine. Each Participant's right to the contributions credited to his or her Account shall be that of a general and unsecured creditor of the Company.
(d) Automatic Refunds. Any balance remaining in a Participant's Account at the end of a Plan Period will be automatically refunded to the Participant, except that any balance which is less than the purchase price of one (1) share of Common Stock will be carried forward into the Participant's Account for the following Offering, unless the Participant elects not to participate in the following Offering under the Plan, in which case the balance in the Participant's Account shall be refunded. The balance credited to the Account of a Participant who is a non-employee director automatically shall be refunded in full (without interest) if his or her status as a member of the Board terminates for any reason whatsoever during a Plan Period. Such refunds shall be
760131.12
made as soon as practicable after the Committee or the Board, as the case may be, has actual notice of any such termination.
8. Purchase of Stock
(a) Option Exercise. (i) On the Offering Commencement Date of each Plan Period, the Company will grant each Participant an option ("Option") to purchase on the last business day of such Plan Period (the "Exercise Date"), at the Option Price hereinafter provided for, such number of whole shares of Common Stock obtained by dividing the amount contributed by the Participant during the Plan Period for which such Option is outstanding, together with any amount carried over from the preceding Plan Period pursuant to Section 7(d) hereof, by the Option Price in effect for the Plan Period. However, the maximum number of shares of Common Stock purchasable by any Participant during any one Plan Period shall not exceed $12,500 divided by the fair market value of a share of Common Stock on the first business day of the applicable Plan period.
(ii) Each Eligible Non-Employee who continues to be a Participant in the Plan on the Exercise Date shall be deemed to have exercised his Option at the Option Price on such date and shall be deemed to have purchased from the Company the number of full shares of Common Stock reserved for the purpose of the Plan that his or her accumulated contributions on such date will pay for pursuant to the formula set forth above (but not in excess of the maximum number determined in the manner set forth above). The Company, or its designated agent, shall hold in its name or in the name of its nominee all certificates for Common Stock purchased until the Common Stock are withdrawn under Section 7(b) hereof.
(b) Insufficient Stock. In the event that the total number of shares of Common Stock specified in elections to be purchased under any Offering plus the number of shares of Common Stock purchased under previous Offerings under this Plan exceeds the maximum number of shares of Common Stock issuable under this Plan, the Committee or the Board, as the case may be, will allot the Common Stock then available on a pro rata basis.
9. Issuance of Stock
Common Stock may be issued upon exercise of an Option from authorized but unissued Common Stock, from stock held in the treasury of the Company, or from any other proper source. The Company's obligation to sell and deliver Common Stock under this Plan is subject to listing on a national stock exchange or quotation on The Nasdaq National Market and the approval of all governmental authorities required in connection with the authorization, issuance or sale of such Common Stock.
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10. Participant's Rights as a Stockholder
(a) In General. No Participant shall have any rights as a stockholder with respect to Common Stock under the Plan until the Common Stock has been purchased in accordance with Section 8 hereof. Neither the granting of an Option to a Participant nor the contributions made by such Participant into his or her Account shall constitute such Participant a stockholder of the shares of Common Stock covered by an Option under this Plan until such stock has been purchased by such Participant.
(b) Dividends. All cash dividends paid with respect to Common Stock in an Account shall, unless otherwise directed by the Committee or the Board, as the case may be, be used to purchase additional Common Stock on the next date stock are eligible to be purchased pursuant to Section 5 hereof, but subject to the limitations of Section 8(a) hereof. Such Common Stock shall be added to the Participant's Account.
(c) Voting. Each Participant shall be entitled to direct the Company's or its designated agent, as to the voting of any Common Stock held in the Participant's Account.
11. Designation of Beneficiary
A Participant may designate on his or her Election Form a Beneficiary
(a) who shall receive the balance credited to his or her Account if the
Participant dies before the end of a Plan Period and (b) who shall receive the
Common Stock, if any, purchased for the Participant under this Plan if the
Participant dies after the end of a Plan Period but before either the
certificate representing such Common Stock has been delivered to the Participant
or before such Common Stock has been credited to a brokerage account maintained
for the Participant. Such designation may be revised in writing at any time by
the Participant by filing an amended Election Form, and his or her revised
designation shall be effective at such time as the Committee or the Board, as
the case may be, receives such amended Election Form. If a deceased Participant
fails to designate a Beneficiary or, if no person so designated survives a
Participant or, if after checking his or her last known mailing address, the
whereabouts of the person so designated are unknown, then the Participant's
estate shall be treated as his or her designated Beneficiary under this Section
11.
12. Transferability
Neither the balance credited to a Participant's Account nor any rights to exercise any Option under this Plan may be assigned, encumbered, alienated, transferred, pledged, or otherwise disposed of in any way by a Participant during his or her lifetime or by his or her Beneficiary or by any other person during his or her lifetime, and such right and interest shall not be liable for, or subject to, the debts, contracts, or liabilities of the Participant or any Beneficiary. If any action is taken by the Participant, or any claim is asserted by any other party in respect of such right and interest whether by garnishment, levy, attachment or otherwise, such action or claim will be treated as an election to withdraw in accordance with Section 7(b) hereof.
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13. Adjustment in Case of Changes Affecting Common Stock; Merger
(a) Adjustment. In the event of a subdivision of outstanding Common
Stock, or the payment of a dividend in Common Stock, the number of shares of
Common Stock approved for this Plan, and the stock limitation set forth in
Section 8(a) hereof, shall be increased proportionately, and such other
adjustment shall be made as may be deemed equitable by the Committee or the
Board, as the case may be. In the event of any other change affecting the Common
Stock such adjustment shall be made as may be deemed equitable by the Committee
or the Board, as the case may be, to give proper effect to such event.
(b) Merger. (i) If the Company shall at any time merge or consolidate with another corporation and the holders of the capital stock of the Company immediately prior to such merger or consolidation continue to hold at least 80% by voting power of the capital stock of the surviving corporation ("Continuity of Control"), the holder of each Option then outstanding will thereafter be entitled to receive at the next Exercise Date upon the exercise of such Option for each share as to which such Option shall be exercised the securities or property which a holder of Common Stock was entitled to receive at the time of such merger, and the Committee or the Board, as the case may be, shall take such steps in connection with such merger as the Committee shall deem necessary to assure that the provisions of subsection (a) above shall thereafter be applicable, as nearly as reasonably may be, in relation to the said securities or property as to which such holder of such Option might thereafter be entitled to receive thereunder.
(ii) In the event of a merger or consolidation of the Company
with or into another corporation which does not involve Continuity of Control,
or of a sale of all or substantially all of the assets of the Company while
unexercised Options remain outstanding under the Plan, (x) subject to the
provisions of clauses (y) and (z), after the effective date of such transaction,
each holder of an outstanding Option shall be entitled, upon exercise of such
Option, to receive in lieu of Common Stock, shares of such stock or other
securities as the holders of Common Stock received pursuant to the terms of such
transaction; or (y) all outstanding Options may be canceled by the Committee or
the Board, as the case may be, as of a date prior to the effective date of any
such transaction and all contributions shall be paid out to the Participants; or
(z) all outstanding Options may be canceled by the Committee or the Board, as
the case may be, as of the effective date of any such transaction, provided that
notice of such cancellation shall be given to each holder of an Option, and each
holder of an Option shall have the right to exercise such Option in full based
on contributions then credited to his or her Account as of a date determined by
the Committee or the Board, as the case may be, which date shall not be less
than ten (10) days preceding the effective date of such transaction.
14. Amendment or Termination
This Plan may be amended by the Board from time to time to the extent that the Board deems necessary or appropriate, and any such amendment shall be subject to the approval of the Company's stockholders to the extent such approval is required under applicable laws or the rules
760131.12
of an exchange on which the Company is listed; provided, however, no amendment shall be retroactive unless the Board in its discretion determines that such amendment is in the best interest of the Company or such amendment is required by applicable law to be retroactive. The Committee or the Board, as the case may be, may also terminate this Plan at any time. This Plan will terminate in any case on the date on which all or substantially all of the unissued Common Stock reserved for issuance under the Plan have been purchased. Upon termination of this Plan all amounts in the Accounts of Participants shall be promptly refunded.
15. Headings, References and Construction
The headings to sections in this Plan have been included for convenience of reference only. This Plan shall be interpreted and construed in accordance with the laws of the State of New York, without regard to the conflict of law principles of such state.
16. Effective Date and Approval of Stockholders
The Plan was adopted by the Board of Trustees of Capital Trust, a California business trust (the "Predecessor"), the predecessor of the Company to become effective as of November 1, 1998, subject to approval of the Predecessor's shareholders on or before November 1, 1999. The shareholders of the Predecessor approved the Plan on January 28, 1999 and the Plan thereupon became effective. Upon consummation of the reorganization of the Predecessor into the Company on January 28, 1999 after such shareholder approval was obtained, the Company succeeded to and assumed the Plan. On January 28, 1999, the Plan was amended, effective on that date to change all references to "Capital Trust" to "Capital Trust, Inc." and make additional technical revisions that reflect the different capital and governance structure of the Company.
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Exhibit 10.5
CAPITAL TRUST, INC.
STOCK PURCHASE LOAN PLAN
1. Purpose
The purpose of the Capital Trust, Inc. Stock Purchase Loan Plan (the "Plan") is to promote the interests of Capital Trust, Inc. and its stockholders by providing opportunities for Participants (as defined herein) to purchase class A common stock, par value $.01 per share (the "Common Stock"), of Capital Trust, Inc., a Maryland corporation (the "Company"), with financing provided by the Company, thereby aligning their personal interests to the long-term financial success of the Company and growth in stockholder value. Pursuant to the Plan, the Company may extend loans ("Plan Loans") to Participants to finance purchases of issued and outstanding stock in the secondary trading market or of authorized but unissued stock directly from the Company.
The Plan is intended to qualify as an "eligible plan" that provides for the purchase of Common Stock, as "margin stock," with financing provided by Plan Loans in accordance with section 221.4 of Regulation U (12 CFR 221.4) promulgated by the Federal Reserve Board.
2. Stock Authorization
(a) The maximum number of shares of authorized but unissued Common Stock that the Company may issue and sell to Participants with financing provided by Plan Loans shall be 500,000 ("Authorized Stock"); provided, however, that any stock issued to Participants under the Plan and subsequently reacquired by the Company shall again become Authorized Stock available for sale under the Plan.
(b) In the event that, as a result of any merger, reorganization, consolidation, recapitalization, separation, liquidation, stock dividend, stock split-up, stock combination, or other change affecting the Common Stock, (i) the number of shares of Common Stock is increased or decreased or (ii) the Common Stock are changed into or exchanged for a different number or kind of stock or other securities of the Company or of another organizational entity, the Plan Administrator shall make appropriate and equitable adjustment to the remaining Authorized Stock available for issuance with financing under the Plan.
(c) The maximum number of Authorized Stock shall not be affected by purchases of any issued and outstanding stock in the secondary trading market financed with Plan Loans.
3. Participants
The Company may extend Plan Loans to any trustee or officer, equal or senior in rank to Vice President, of the Company, or to any consultant or service provider to the Company who, in the opinion of the Plan Administrator, can contribute to the growth and profitability of the
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Company (each a "Participant"). The Plan Administrator shall have the complete authority to select the Participants eligible to participate in the Plan.
4. Administration
The Plan will be administered by either a committee appointed by the board of directors of the Company to administer the Plan, or by the board of directors itself (the "Plan Administrator"). The Plan Administrator has the authority to extend Plan Loans and authorize the sale of Authorized Stock to be purchased with financing provided by Plan Loans, from time to time, as determined by the Plan Administrator. The Plan Administrator has the authority to make rules and regulations for the administration of the Plan and its interpretation and decisions with regard thereto shall be final and conclusive.
5. Terms of Plan Loans
(a) The Company may extend Plan Loans with a principal amount equal to up to 100% of the purchase price of Common Stock purchased with the Plan Loans. Subject to the foregoing, the principal amount of any Plan Loan shall be determined by the Plan Administrator.
(b) Plan Loans shall bear interest at an interest rate which shall be determined by the Plan Administrator, provided that such interest rate shall be no less than the applicable Federal rate in effect pursuant to Section 1274(d) of the Internal Revenue Code of 1986, as amended, and shall be compounded no less than semi-annually.
(c) The Plan Administrator shall have the discretion to determine other terms and conditions of Plan Loans extended under the Plan, including but not limited to, those relating to: maturity of the Plan Loans; the recourse or non-recourse nature of the Plan Loans; the forgiveness of any or all of the principal and/or interest due on the Plan Loans; conditions for forgiveness of principal and/or interest, such as length of employment or service, change of control events, performance measures or otherwise; the deferral of interest payments; Company commitments to make tax gross up payments to cover taxes incurred as a result of any forgiveness; or options to call or put the Common Stock to satisfy the Plan Loans.
6. Loan Documents
Each Participant who receives a Plan Loan from the Company shall be required to sign (i) a loan agreement (which sets forth the terms and conditions of the Plan Loans), (ii) a secured promissory note and (iii) a pledge and security agreement (which sets forth the terms and conditions for the pledge of the Common Stock purchased with financing provided by the Plan Loan) (collectively the "Loan Documents"). The form and terms and conditions of the Loan Documents shall be determined by the Plan Administrator.
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7. Offer and Acceptance of Common Stock
(a) Offers to sell Common Stock to Participants with financing provided by Plan Loans shall be made in writing. The written offers shall specify the number of shares of Common Stock to be offered to the Participant, the portion of the purchase price to be financed with Plan Loans and an outline of the terms thereof and the date by which the offer must be accepted. All offers shall be subject to the condition that the Purchase Agreement (as defined herein) and the Loan Documents shall be executed and delivered by the Participant.
(b) A Participant may accept a Company offer to sell shares of Common Stock by delivering a written acceptance to the Secretary of the Company. At the time of his/her acceptance, such Participant shall also execute a purchase agreement pursuant to which the Participant agrees to purchase the Common Stock (the "Purchase Agreement") and the related Loan Documents and shall deliver to the Secretary of the Company such documents along with payment of the portion of the aggregate purchase price not financed with Plan Loans as specified in the Purchase Agreement.
(c) Any offer to sell shares of Common Stock made pursuant to the Plan must be accepted within the time specified in the offer. If acceptance does not occur within the specified time, the offer shall be deemed withdrawn.
(d) No offer or sale of Common Stock to Participants with financing provided by Plan Loans shall be made until the effective date of the Registration Statement on Form S-8 covering the Authorized Stock available for issuance under the Plan or unless made pursuant to an exemption from registration under the Securities Act of 1933, as amended.
8. Issuance of Stock
(a) Upon execution of the Purchase Agreement and Loan Documents and receipt by the Company of the purchase price for the Common Stock in accordance with Section 7 hereof, the stock will be deemed to be fully paid and nonassessable Common Stock. Stock certificates representing the Common Stock shall be registered in the Participants' names, but shall be held in custody by the Company for their account.
(b) Certificates representing Common Stock issued pursuant to the Plan shall bear such legends as the Company may deem appropriate.
9. Secondary Trading Market Purchases
Any secondary trading market purchases of Common Stock financed with Plan Loans shall be made in compliance with the Company's policy and procedures governing trading in stock of the Company and applicable provisions of the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder.
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10. Amendment or Termination
This Plan may be amended by the Plan Administrator from time to time to the extent that the Plan Administrator deems it necessary or appropriate, and any such amendment shall be subject to the approval of the Company's stockholders to the extent such approval is required under applicable laws or the rules of the exchange on which the Company is listed. The Plan Administrator may also terminate this Plan at any time. No amendment or termination of the Plan shall adversely affect any Plan Loan extended under the Plan, without the written consent of the Participant.
11. Headings, References and Construction
The headings to sections in this Plan have been included for convenience of reference only. This Plan shall be interpreted and construed in accordance with the laws of the State of New York, without regard to the conflict of law principles of such state.
12. Effective Date and Approval of Stockholders
The Plan was adopted by the Board of Trustees of Capital Trust, a California business trust (the "Predecessor"), the predecessor of the Company to become effective as of November 1, 1998, subject to approval of the Predecessor's shareholders on or before November 1, 1999. The shareholders of the Predecessor approved the Plan on January 28, 1999 and the Plan thereupon became effective. Upon consummation of the reorganization of the Predecessor into the Company on January 28, 1999 after such shareholder approval was obtained, the Company succeeded to and assumed the Plan. On January 28, 1999, the Plan was amended, effective on that date to change all references to "Capital Trust" to "Capital Trust, Inc." and make additional technical revisions that reflect the different capital and governance structure of the Company.
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