Exhibit 3.6
ASHFORD HOSPITALITY TRUST, INC.
ARTICLES SUPPLEMENTARY ESTABLISHING AND FIXING THE RIGHTS AND
PREFERENCES OF A SERIES OF PREFERRED STOCK
Ashford Hospitality Trust, Inc., a Maryland corporation (the “
Corporation
”), having its
principal office in Dallas, Texas certifies to the State Department of Assessments and Taxation of
Maryland that:
FIRST
: Under a power contained in Section 2-208 of the Maryland General Corporation Law and
Article V of the Corporation’s Articles of Amendment and Restatement (as the same may be amended or
supplemented) (the “
Charter
”), the Board of Directors (the “
Board
”) and a duly authorized committee
thereof on March 31, 2011 and April 13, 2011, respectively, classified and designated 3,450,000
shares of the unissued preferred stock, par value $.01 per share, of the Corporation (“
Preferred
Stock
”) as Series E Cumulative Preferred Stock, with the following preferences, rights, voting
powers, restrictions, limitations as to dividends and other distributions, qualifications and terms
and conditions of redemption. Capitalized terms used and not otherwise defined herein have the
meanings set forth in the Charter.
(1)
Designation and Number
. A series of Preferred Stock of the Corporation, designated the
“9.000% Series E Cumulative Preferred Stock” (the “
Series E Preferred Stock
”), is hereby
established. The par value of the Series E Preferred Stock is $.01 per share. The number of shares
of Series E Preferred Stock shall be 3,450,000.
(2)
Rank
. The Series E Preferred Stock will, with respect to dividend rights and rights upon
liquidation, dissolution or winding up of the Corporation, rank (i) prior or senior to any class or
series of common stock of the Corporation and any other class or series of equity securities, if
the holders of Series E Preferred Stock are entitled to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up in preference or priority to the holders
of shares of such class or series (“
Junior Stock
”); (ii) on a parity with each of the Series A
Preferred Stock, the Series B-1 Preferred Stock, the Series D Preferred Stock and any other class
or series of the equity securities of the Corporation issued in the future if, pursuant to the
specific terms of such class or series of equity securities, the holders of such class or series of
equity securities and the holders of the Series E Preferred Stock are entitled to the receipt of
dividends and of amounts distributable upon liquidation, dissolution or winding up in proportion to
their respective amounts of accrued and unpaid dividends per share or liquidation preferences,
without preference or priority one over the other (“
Parity Stock
”); (iii) junior to any class or
series of equity securities of the Corporation if, pursuant to the specific terms of such class or
series, the holders of such class or series are entitled to the receipt of dividends or amounts
distributable upon liquidation, dissolution or winding up in preference or priority to the holders
of the Series E Preferred Stock (“
Senior Stock
”); and (iv) junior to all of the existing and future
indebtedness of the Corporation. The term “equity securities” does not include convertible debt
securities, which, unless otherwise provided, will rank senior to the Series E Preferred Stock
prior to conversion.
(3)
Dividends
.
(a) Holders of Series E Preferred Stock will be entitled to receive, when and as
authorized by the Board and declared by the Corporation, out of funds legally available for
payment, cash dividends at the rate of 9.000% per annum on the $25.00 liquidation preference
(equivalent to an annual dividend of $2.25 per share). Such dividends will be cumulative
from the date of original issuance, whether or not in any dividend period or periods (x)
such dividends shall be declared, (y) there shall be funds legally available for the payment
of such dividends or (z) any agreement prohibits payment of such dividends, and such
dividends shall be payable quarterly the 15th day of January, April, July and October of
each year (or, if not a Business Day (as defined in Article VI of the Charter), the next
succeeding Business Day), commencing July 15, 2011 and will accrue from the date of original
issuance. The first dividend will be paid on July 15, 2011. Any dividend payable on the
Series E Preferred Stock for any partial dividend period will be computed on the basis of
twelve 30-day months and a 360-day year. Dividends will be payable in arrears to holders of
record as they appear on the records of the Corporation at the close of business on the last
day of each of March, June, September and December, as the case may be, immediately
preceding the applicable dividend payment date. Holders of Series E Preferred Stock will
not be entitled to receive any dividends in excess of cumulative dividends on the Series E
Preferred Stock at the dividend rate specified in this paragraph. No interest will be paid
in respect of any dividend payment or payments on the Series E Preferred Stock that may be
in arrears.
(b) When dividends are not paid in full upon the Series E Preferred Stock or any other
class or series of Parity Stock, or a sum sufficient for such payment is not set apart, all
dividends declared upon the Series E Preferred Stock and any other class or series of Parity
Stock shall be declared ratably in proportion to the respective amounts of dividends
accumulated, accrued and unpaid on the Series E Preferred Stock and accumulated, accrued and
unpaid on such Parity Stock. Except as set forth in the preceding sentence, unless
dividends on the Series E Preferred Stock equal to the full amount of accumulated, accrued
and unpaid dividends have been or contemporaneously are declared and paid, or declared and a
sum sufficient for the payment thereof set apart for such payment for all past dividend
periods, no dividends (other than dividends paid in Junior Stock or options, warrants or
rights to subscribe for or purchase such Junior Stock) shall be declared or paid or set
aside for payment with respect to any class or series of Parity Stock. Unless full
cumulative dividends on the Series E Preferred Stock have been paid or declared and set
apart for payment for all past dividend periods, no dividends (other than dividends paid in
Junior Stock or options, warrants or rights to subscribe for or purchase such Junior Stock)
shall be declared or paid or set apart for payment with respect to any Junior Stock, nor
shall any Junior Stock or Parity Stock be redeemed, purchased or otherwise acquired (except
for purposes of an employee benefit plan) for any consideration, or any monies be paid to or
made available for a sinking fund for the redemption of any Junior Stock or Parity Stock
(except by conversion or exchange for Junior Stock, or options, warrants or rights to
subscribe for or purchase Junior Stock), nor shall any other cash or property be paid or
distributed to or for the benefit of holders of Junior Stock or Parity Stock.
Notwithstanding the foregoing, the Corporation shall not be prohibited from (i) declaring or
paying or setting apart for payment any dividend or
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distribution on any Junior Stock or Parity Stock or (ii) redeeming, purchasing or
otherwise acquiring any Junior Stock or Parity Stock, in each case, if such declaration,
payment, redemption, purchase or other acquisition is necessary to maintain the
Corporation’s qualification as a real estate investment trust for federal income tax
purposes (“
REIT
”).
(c) No dividends on Series E Preferred Stock shall be authorized by the Board or
declared or paid or set apart for payment at such time as the terms and provisions of any
agreement, including any agreement relating to the Corporation’s indebtedness, prohibits
such authorization, declaration, payment or setting apart for payment or provides that such
authorization, declaration, payment or setting apart for payment would constitute a breach
thereof or a default thereunder, or if such authorization, declaration, payment or setting
apart for payment shall be restricted or prohibited by law.
(d) If, for any taxable year, the Corporation elects to designate as “
capital gain
dividends
” (as defined in Section 857 of the Internal Revenue Code) any portion of the
dividends (as determined for federal income tax purposes) paid or made available for the
year to holders of all classes of capital stock, then the portion of the capital gains
amount that shall be allocable to the holders of Series E Preferred Stock shall be the
amount that the total dividends (as determined for federal income tax purposes) paid or made
available to the holders of the Series E Preferred Stock for the year bears to the total
dividends (as determined for federal income tax purposes) paid or made available for the
year to holders of all classes of capital stock.
(e) In determining for purposes of Section 2-311 of the Maryland General Corporation
Law or otherwise under the Maryland General Corporation Law whether a distribution (other
than upon voluntary or involuntary liquidation, dissolution or winding up of the
Corporation), by dividend, redemption or otherwise, is permitted, amounts that would be
needed, if the Corporation were to be dissolved at the time of the distribution, to satisfy
the liquidation preference of any series of preferred stock with preferential rights on
dissolution senior to the Series E Preferred Stock (as discussed in Section 4 below) will
not be added to the Corporation’s total liabilities.
(4)
Liquidation Preference
.
(a) Upon any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, before any payment or distribution shall be made to or set apart for the
holders of any Junior Stock, the holders of Series E Preferred Stock shall be entitled to
receive a liquidation preference of $25.00 per share, plus an amount equal to all
accumulated, accrued and unpaid dividends (whether or not earned or declared) to, but not
including, the date of final distribution to such holders, but such holders shall not be
entitled to any further payment. If upon any liquidation, dissolution or winding up of the
Corporation, its assets, or proceeds thereof, distributable among the holders of Series E
Preferred Stock shall be insufficient to pay in full the above described preferential amount
and liquidating payments on any other shares of any class or series of Parity Stock, then
such assets, or the proceeds thereof, shall be distributed among the holders of Series E
Preferred Stock and any such other Parity Stock ratably in the same proportion
3
as the respective amounts that would be payable on such Series E Preferred Stock and
any such other Parity Stock if all amounts payable thereon were paid in full.
(b) Upon any liquidation, dissolution or winding up of the Corporation, after payment
shall have been made in full to the holders of Series E Preferred Stock and any Parity
Stock, any other series or class or classes of Junior Stock shall be entitled to receive any
and all assets remaining to be paid or distributed, and the holders of the Series E
Preferred Stock shall not be entitled to share therein.
(c) Written notice of any such liquidation, dissolution or winding up of the
Corporation, stating the payment date or dates when, and the place or places where, the
amounts distributable in such circumstances shall be payable, shall be given by first class
mail, postage pre-paid, not less than 30 or more than 60 days prior to the payment date
stated therein, to each record holder of the Series E Preferred Stock at the respective
addresses of such holders as the same shall appear on the stock transfer records of the
Corporation.
(d) None of a consolidation or merger of the Corporation with or into another entity, a
merger of another entity with or into the Corporation, a statutory stock exchange by the
Corporation or a sale, lease or conveyance of all or substantially all of the Corporation’s
property or business shall be considered a liquidation, dissolution or winding up of the
Corporation.
(e) The liquidation preference of the outstanding shares of Series E Preferred Stock
will not be added to the liabilities of the Corporation for the purpose of determining
whether under the Maryland General Corporation Law a distribution may be made to
stockholders of the Corporation whose preferential rights upon dissolution of the
Corporation are junior to those of holders of Series E Preferred Stock.
(5)
Redemption by Holders
. Shares of Series E Preferred Stock are not redeemable at any time
at the option of the holders thereof.
(6)
Redemption by the Corporation
.
(a)
Redemption Right
(i) The Series E Preferred Stock shall not be subject to any sinking fund or
mandatory redemption. Except with respect to the special optional redemption set
forth in Section 6(b) and to preserve the status of the Corporation as a REIT for
federal income tax purposes, shares of Series E Preferred Stock are not redeemable
by the Corporation prior to April 18, 2016.
(ii) On and after April 18, 2016, the Corporation, at its option, upon giving
notice not less than 30 days nor more than 60 days in advance of the date fixed for
redemption, may redeem Series E Preferred Stock, in whole or from time to time in
part, at a cash redemption price of $25.00 per share plus all accrued and unpaid
dividends to, but not including, the date fixed for redemption.
4
(iii) The Series E Preferred Stock shall be subject to the provisions of
Article VI of the Charter pursuant to which Series E Preferred Stock owned by a
stockholder in excess of the Ownership Limit (as defined in the Charter) shall
automatically be transferred to a Trust for the exclusive benefit of a Charitable
Beneficiary, as provided in Article VI of the Charter.
(iv) Any date fixed for redemption pursuant to this Section 6 is referred to
herein as a “
Redemption Date
.”
(b)
Special Optional Redemption
.
(i) Upon the occurrence of a Change of Control (as defined in Section 6(b)(ii)
below), the Corporation, at its option and upon giving notice not less than 30 nor
more than 60 days in advance of the date fixed for redemption, may redeem the Series
E Preferred Stock, in whole or in part, within 120 days after the first date on
which such Change of Control occurred, at a cash redemption price of $25.00 per
share plus all accrued and unpaid dividends to, but not including, the date fixed
for redemption (the “
Special Optional Redemption Right
”).
(ii) A “Change of Control” is when, after the original issuance of the Series E
Preferred Stock, the following have occurred and are continuing:
A. the acquisition by any person, including any syndicate or group deemed to be
a “person” under Section 13(d)(3) of the Exchange Act of beneficial ownership,
directly or indirectly, through a purchase, merger or other acquisition transaction
or series of purchases, mergers or other acquisition transactions of shares of our
company entitling that person to exercise more than 50% of the total voting power of
all shares of the Corporation entitled to vote generally in elections of directors
(except that such person will be deemed to have beneficial ownership of all
securities that such person has the right to acquire, whether such right is
currently exercisable or is exercisable only upon the occurrence of a subsequent
condition); and
B. following the closing of any transaction referred to in Section 6(b)(ii)(A)
above, neither the Corporation nor the acquiring or surviving entity has a class of
common securities (or American Depository Receipts representing such securities)
listed on the New York Stock Exchange (the “
NYSE
”), the NYSE Amex Equities (the
“
NYSE Amex
”), or the NASDAQ Stock Market (“
NASDAQ
”) or listed or quoted on an
exchange or quotation system that is a successor to the NYSE, the NYSE Amex or
NASDAQ.
(c)
Limitations on Redemption
.
(i) If fewer than all of the outstanding shares of Series E Preferred Stock are
to be redeemed at the option of the Corporation pursuant to Section 6(a)(ii) or
Section 6(b)(i) above, the number of shares to be redeemed shall be determined by
the Board and the shares to be redeemed will be selected by the Board pro rata (as
nearly as practicable without creating fractional shares)
5
from the holders of record of such shares in proportion to the number of such shares
held by such holders or by lot or by any other equitable manner as prescribed by the
Board. If such redemption is to be by lot and, as a result of such redemption, any
holder of shares of Series E Preferred Stock would Beneficially Own or
Constructively Own, in excess of the Ownership Limit because such holder’s shares of
Series E Preferred Stock were not redeemed, or were only redeemed in part, then,
except as otherwise provided in the Charter, the Corporation will redeem the
requisite number of shares of Series E Preferred Stock from such holder such that he
will not hold in excess of the Ownership Limit subsequent to such redemption.
(ii) Notwithstanding anything to the contrary contained herein, unless full
cumulative dividends on all shares of Series E Preferred Stock shall have been or
contemporaneously are authorized, declared and paid or authorized, declared and a
sum sufficient for the payment thereof set apart for payment for all past dividend
periods and the then current dividend period, no shares of Series E Preferred Stock
shall be redeemed unless all outstanding shares of Series E Preferred Stock are
simultaneously redeemed; provided, however, that the foregoing shall not prevent the
purchase or acquisition of shares of Series E Preferred Stock pursuant to a purchase
or exchange offer made on the same terms to holders of all outstanding shares of
Series E Preferred Stock. In addition, unless full cumulative dividends on all
outstanding shares of Series E Preferred Stock have been or contemporaneously are
authorized, declared and paid or authorized, declared and a sum sufficient for the
payment thereof set apart for payment for all past dividend periods and the then
current dividend period, the Corporation shall not purchase or otherwise acquire
directly or indirectly for any consideration, nor shall any monies be paid to or
made available for a sinking fund for the redemption of, any shares of Series E
Preferred Stock or any other class or series of Junior Stock or Parity Stock (except
by conversion into or exchange for shares of any class or series of Junior Stock).
(iii) The foregoing provisions of subsections 6(c)(i) and (ii) shall not
prevent any other action by the Corporation pursuant to the Charter or otherwise in
order to ensure that the Corporation remains qualified as a REIT for federal income
tax purposes.
(d)
Procedures for Redemption
.
(i) Notice of redemption of the Series E Preferred Stock, whether pursuant to
Section 6(a)(ii) or 6(b)(i) above, shall be mailed to each holder of record of the
shares to be redeemed by first class mail, postage prepaid at such holder’s address
as the same appears on the stock records of the Corporation. Any notice which was
mailed as described above shall be conclusively presumed to have been duly given on
the date mailed whether or not the holder receives the notice. In addition to any
information required by law or by the applicable rules of the exchange upon which
the Series E Preferred Stock may be listed or admitted to trading, each notice shall
state: (i) the redemption date; (ii) the
6
redemption price; (iii) the number of shares of Series E Preferred Stock to be
redeemed; (iv) the place or places where certificates for such shares of Series E
Preferred Stock, to the extent the Series E Preferred Stock is certificated, are to
be surrendered for cash; and (v) if the notice of redemption is mailed pursuant to
the Special Optional Redemption Right, (A) that the Series E Preferred Stock is
being redeemed pursuant to the Special Optional Redemption right in connection with
the occurrence of a Change of Control and a brief description of the transaction or
transactions constituting such Change of Control; (B) that the holders of the Series
E Preferred Stock to which the notice relates will not be able to tender such Series
E Preferred Stock for conversion in connection with the Change of Control and each
share of Series E Preferred Stock tendered for conversion that is selected, prior to
the Change of Control Conversion Date, for redemption will be redeemed on the
related date of redemption instead of converted on the Change of Control Conversion
Date; and (C) that dividends on the Series E Preferred Stock to be redeemed will
cease to accrue on the redemption date. If the Corporation redeems fewer than all
of outstanding shares of the Series E Preferred Stock, the notice mailed to such
holder shall also specify the number of shares of Series E Preferred Stock held by
such holder to be redeemed. Any such redemption may be made conditional on such
factors as may be determined by the Board and as set forth in the notice of
redemption.
(ii) On or after the Redemption Date, each holder of shares of Series E
Preferred Stock to be redeemed shall present and surrender the certificates
representing his shares of Series E Preferred Stock to the Corporation at the place
designated in the notice of redemption and thereupon the cash redemption price of
such shares shall be paid to or on the order of the person whose name appears on
such certificate representing shares of Series E Preferred Stock as the owner
thereof and each surrendered certificate shall be canceled. If fewer than all the
shares represented by any such certificate representing shares of Series E Preferred
Stock are to be redeemed, a new certificate shall be issued representing the
unredeemed shares.
(iii) If notice of redemption has been mailed in accordance with Section
6(c)(i) above and if the funds necessary for such redemption have been set aside by
the Corporation in trust for the benefit of the holders of the Series E Preferred
Stock so called for redemption, then from and after the Redemption Date (unless the
Corporation defaults in payment of the redemption price), all dividends on the
shares of Series E Preferred Stock called for redemption in such notice shall cease
to accumulate and all rights of the holders thereof, except the right to receive the
redemption price thereof (including all accumulated and unpaid dividends up to, but
not including, the Redemption Date), shall cease and terminate and such shares shall
not thereafter be transferred (except with the consent of the Corporation) on the
Corporation’s books, and such shares shall not be deemed to be outstanding for any
purpose whatsoever. At its election, the Corporation, prior to a Redemption Date,
may irrevocably deposit the redemption price (including accumulated and unpaid
dividends) of the Series E Preferred Stock so called for redemption in trust for the
holders thereof with a bank or trust company, in which
7
case the redemption notice to holders of the shares of Series E Preferred Stock
to be redeemed shall (i) state the date of such deposit, (ii) specify the office of
such bank or trust company as the place of payment of the redemption price and (iii)
require such holders to surrender the certificates representing such shares at such
place on or about the date fixed in such redemption notice (which may not be later
than the Redemption Date) against payment of the redemption price (including all
accumulated and unpaid dividends to, but not including, the Redemption Date). Any
interest or other earnings earned on the redemption price (including accumulated and
unpaid dividends) deposited with a bank or trust company shall be paid to the
Corporation. Any monies so deposited which remain unclaimed by the holders of Series
E Preferred Stock at the end of two years after the Redemption Date shall be
returned by such bank or trust company to the Corporation.
(iv) If, prior to the Change of Control Conversion Date, the Corporation has
provided or provides notice of redemption with respect to the Series E Preferred
Stock (whether pursuant to the Redemption Right or the Special Optional Redemption
Right), the holders of Series E Preferred Stock will not have the conversion right
described in Section 8 below.
(e) The holders of Series E Preferred Stock at the close of business on the dividend
record date will be entitled to receive the dividend payable with respect to the Series E
Preferred Stock on the corresponding payment date notwithstanding the redemption of the
Series E Preferred Stock between such record date and the corresponding payment date or the
Corporation’s default in the payment of dividend due. Except as otherwise provided in this
Section 6, the Corporation will make no payment or allowance for unpaid dividends, whether
or not in arrears, on Series E Preferred Stock to be redeemed.
(f)
Status of Redeemed Shares
. Any shares of Series E Preferred Stock that shall at
any time have been redeemed shall, after such redemption, have the status of authorized but
unissued Preferred Stock, without designation as to class or series until such shares are
once more designated as part of a particular class or series by the Board.
(7)
Voting Rights
.
(a) Holders of the Series E Preferred Stock shall not have any voting rights, except as
described below.
(b) If and whenever dividends on any shares of Series E Preferred Stock shall be in
arrears for six or more quarterly periods, whether or not such quarterly periods are
consecutive (a “
Preferred Dividend Default
”), the number of directors then constituting the
Board shall be increased by two and the holders of such shares of Series E Preferred Stock
(voting together as a single class with all other classes or series of capital stock ranking
on a parity with the Series E Preferred Stock as to the payment of dividends and the
distribution of assets upon any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation upon which like voting rights have been conferred and are
8
exercisable (“
Parity Preferred Stock
”)) shall be entitled to vote for the election of
the additional directors of the Corporation (the “
Preferred Stock Directors
”) who shall each
be elected for one-year terms. Such election shall be held at a special meeting called by an
officer of the Corporation at the request of the holders of record of at least 10% of the
outstanding shares of Series E Preferred Stock or the holders of shares of any other class
or series of Parity Preferred Stock so in arrears, unless such request is received less than
90 days before the date fixed for the next annual or special meeting of stockholders, in
which case the vote for such two directors will be held at the earlier of the next annual or
special meeting of the stockholders, and at each subsequent annual meeting until all
dividends accumulated on such shares of Series E Preferred Stock for the past dividend
periods and the dividend for the then current dividend period shall have been fully paid or
declared or authorized and a sum sufficient for the payment thereof set aside for payment in
full. In such cases, the entire Board automatically shall be increased by two directors. On
any matter on which the holders of Series E Preferred Stock are entitled to vote (as
expressly provided herein or as may be required by law), including any action by written
consent, each share of Series E Preferred Stock shall have one vote per share, except that
when shares of any other series of Preferred Stock shall have the right to vote with the
Series E Preferred Stock as a single class on any matter, then the Series E Preferred Stock
and such other class or series shall have with respect to such matters one vote per $25.00
of stated liquidation preference.
The procedures in this Section 7(b) for the calling of meetings and the election of
directors will, to the extent permitted by law, supercede anything inconsistent contained in
the Charter or Bylaws of the Corporation and, without limitation to the foregoing, the
Bylaws of the Corporation will not be applicable to the election of directors by holders of
Series E Preferred Stock pursuant to this Section 7. Notwithstanding the Bylaws of the
Corporation, the number of directors constituting the entire Board will be automatically
increased to include the directors to be elected pursuant to this Section 7(b).
(c) If and when all accumulated dividends and the dividend for the current dividend
period on the Series E Preferred Stock shall have been paid in full or set aside for payment
in full, the holders of shares of Series E Preferred Stock shall be divested of the voting
rights set forth in Section 7(b) herein (subject to revesting in the event of each and every
Preferred Dividend Default) and, if all accumulated dividends and the dividend for the
current dividend period have been paid in full or set aside for payment in full on all other
classes or series of Parity Preferred Stock, the term of office of each Preferred Stock
Director so elected shall terminate and the number of directors constituting the board of
directors shall be reduced accordingly. So long as a Preferred Dividend Default shall
continue, any vacancy in the office of a Preferred Stock Director may be filled by written
consent of the Preferred Stock Director remaining in office, or if there is no such
remaining director, by vote of holders of a majority of the outstanding shares of Series E
Preferred Stock and any other such series of Parity Preferred Stock voting as a single
class. Any Preferred Stock Director may be removed at any time with or without cause by the
vote of, and shall not be removed otherwise than by the vote of, the holders of record of a
majority of the outstanding shares of Series E Preferred Stock and any other series of
Parity Preferred Stock voting as a single class. The Preferred Stock Directors shall each be
entitled to one vote per director on any matter presented to the Board.
9
(d) The affirmative vote or consent of at least 66-2/3% of the votes entitled to be
cast by the holders of the outstanding shares of Series E Preferred Stock and the holders of
all other classes or series of preferred stock entitled to vote on such matters, voting as a
single class, in addition to any other vote required by the Charter or Maryland law, will be
required to: (i) authorize the creation of, the increase in the authorized amount of, or
the issuance of any shares of any class of Senior Stock or any security convertible into
shares of any class of Senior Stock or (ii) amend, alter or repeal any provision of, or add
any provision to, the Charter, including the articles supplementary establishing the Series
E Preferred Stock, whether by merger, consolidation or other business combination (in any
such case, an “
Event
”) or otherwise if such action would materially adversely affect the
voting powers, rights or preferences of the holders of the Series E Preferred Stock.
Neither (i) an amendment of the Charter to authorize, create, or increase the authorized
amount of Junior Stock or any shares of any class of Parity Stock, including additional
Series E Preferred Stock, nor (ii) an Event, so long as the Series E Preferred Stock remains
outstanding with the terms thereof materially unchanged, taking into account that upon the
occurrence of such Event the Corporation may not be the surviving entity, shall be deemed to
materially adversely affect the voting powers, rights or preferences of the holders of
Series E Preferred Stock. No such vote of the holders of Series E Preferred Stock as
described above shall be required if provision is made to redeem all Series E Preferred
Stock at or prior to the time such amendment, alteration or repeal is to take effect, or
when the issuance of any such shares or convertible securities is to be made, as the case
may be.
(e) The foregoing voting provisions shall not apply if, at or prior to the time when
the act with respect to which such vote would otherwise be required shall be effected, all
outstanding shares of Series E Preferred Stock shall have been redeemed or called for
redemption upon proper notice and sufficient funds shall have been deposited in trust to
effect such redemption.
(8)
Conversion
.
(a) Shares of Series E Preferred Stock are not convertible into or exchangeable for any
other securities or property of the Corporation, except as provided in this Section 8.
(b)
Conversion Right
.
(i) Upon the occurrence of a Change of Control, each holder of Series E
Preferred Stock shall have the right, unless, prior to the Change of Control
Conversion Date, the Corporation has provided or provides notice of its election to
redeem the Series E Preferred Stock pursuant to the Redemption Right or Special
Optional Redemption Right, to convert some or all of the Series E Preferred Stock
held by such holder (the “
Change of Control Conversion Right
”) on the Change of
Control Conversion Date into a number of shares of common stock (“
Common Stock
”),
per share of Series E Preferred Stock to be converted (the “
Common Stock Conversion
Consideration
”) equal to the lesser of (A) the quotient obtained by dividing (i) the
sum of (x) the $25.00 liquidation preference
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plus (y) the amount of any accrued and unpaid dividends to, but not including,
the Change of Control Conversion Date (unless the Change of Control Conversion Date
is after a dividend record date for the Series E Preferred Stock and prior to the
corresponding Series E Preferred Stock dividend payment date, in which case no
additional amount for such accrued and unpaid dividend will be included in such sum)
by (ii) the Common Stock Price (as defined below) and (B) 9.0909 (the “
Share Cap
”),
subject to Section 8(b)(ii).
(ii) The Share Cap is subject to pro rata adjustments for any share splits
(including those effected pursuant to a Common Stock distribution), subdivisions or
combinations (in each case, a “
Share Split
”) with respect to Common Stock as
follows: the adjusted Share Cap as the result of a Share Split shall be the number
of shares of Common Stock that is equivalent to the product obtained by multiplying
(i) the Share Cap in effect immediately prior to such Share Split by (ii) a
fraction, the numerator of which is the number of shares of Common Stock outstanding
after giving effect to such Share Split and the denominator of which is the number
of shares of Common Stock outstanding immediately prior to such Share Split.
(iii) For the avoidance of doubt, subject to the immediately
succeeding sentence, the aggregate number of shares of Common Stock (or equivalent
Alternative Conversion Consideration (as defined below), as applicable) issuable in
connection with the exercise of the Change of Control Conversion Right (or
equivalent Alternative Conversion Consideration, as applicable) (the “
Exchange
Cap
”), subject to increase to the extent the underwriters’ overallotment option to
purchase additional shares of Series E Preferred Stock is exercised, will not exceed
27,272,700 in total (or equivalent Alternative Conversion Consideration, as
applicable). The Exchange Cap is subject to pro rata adjustments for any Share
Splits on the same basis as the corresponding adjustment to the Share Cap.
(iv) In the case of a Change of Control pursuant to which shares of Common
Stock shall be converted into cash, securities or other property or assets
(including any combination thereof) (the “
Alternative Form Consideration
”), a holder
of Series E Preferred Stock shall receive upon conversion of such Series E Preferred
Stock the kind and amount of Alternative Form Consideration which such holder of
Series E Preferred Stock would have owned or been entitled to receive upon the
Change of Control had such holder of Series E Preferred Stock held a number of
shares of Common Stock equal to the Common Stock Conversion Consideration
immediately prior to the effective time of the Change of Control (the “
Alternative
Conversion Consideration
”; and the Common Stock Conversion Consideration or the
Alternative Conversion Consideration, as may be applicable to a Change of Control,
shall be referred to herein as the “
Conversion Consideration
”).
(v) In the event that holders of Common Stock have the opportunity to elect the
form of consideration to be received in the Change of Control, the
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consideration that the holders of Series E Preferred Stock shall receive shall
be the form and proportion of the aggregate consideration elected by the holders of
the Common Stock who participate in the determination (based on the weighted average
of elections) and shall be subject to any limitations to which all holders of Common
Stock are subject, including, without limitation, pro rata reductions applicable to
any portion of the consideration payable in the Change of Control.
(vi) The “
Change of Control Conversion Date
” shall be a Business Day set forth
in the notice of Change of Control provided in accordance with Section 8(d) below
that is no less than 20 days nor more than 35 days after the date on which the
Corporation provides such notice pursuant to Section 8(d).
(vii) The “
Common Stock Price
” shall be (i) the amount of cash
consideration per share of Common Stock, if the consideration to be received in the
Change of Control by holders of Common Stock is solely cash, or (ii) the average of
the closing prices per share of Common Stock on the NYSE for the ten consecutive
trading days immediately preceding, but not including, the effective date of the
Change of Control, if the consideration to be received in the Change of Control by
holders of Common Stock is other than solely cash.
(c) No fractional shares of Common Stock shall be issued upon the conversion of Series
E Preferred Stock. In lieu of fractional shares, holders shall be entitled to receive the
cash value of such fractional shares based on the Common Stock Price.
(d) Within 15 days following the occurrence of a Change of Control, a notice of
occurrence of the Change of Control describing the resulting Change of Control Conversion
Right shall be delivered to the holders of record of the Series E Preferred Stock at their
addresses as they appear on the Corporation’s share transfer records and provided to the
Corporation’s transfer agent. No failure to give such notice or any defect thereto or in the
mailing thereof shall affect the validity of the proceedings for the conversion of any
Series E Preferred Stock except as to the holder to whom notice was defective or not given.
Each notice shall state: (i) the events constituting the Change of Control; (ii) the date of
the Change of Control; (iii) the last date on which the holders of Series E Preferred Stock
may exercise their Change of Control Conversion Right; (iv) the method and period for
calculating the Common Stock Price; (v) the Change of Control Conversion Date, which shall
be a Business Day occurring within 20 to 35 days following the date of such notice; (vi)
that if, prior to the Change of Control Conversion Date, the Corporation has provided or
provides notice of its election to redeem all or any portion of the Series E Preferred
Stock, the holder will not be able to convert Series E Preferred Stock and such Series E
Preferred Stock shall be redeemed on the related redemption date, even if such shares have
already been tendered for conversion pursuant to the Change of Control Conversion Right;
(vii) if applicable, the type and amount of Alternative Conversion Consideration entitled to
be received per each share of Series E Preferred Stock; (viii) the name and address of the
paying agent and the conversion agent; and (ix) the procedures that the holders of Series E
Preferred Stock must follow to exercise the Change of Control Conversion Right.
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(e) The Corporation shall issue a press release for publication on the Dow Jones &
Company, Inc., Business Wire, PR Newswire or Bloomberg Business News (or, if such
organizations are not in existence at the time of issuance of such press release, such other
news or press organization as is reasonably calculated to broadly disseminate the relevant
information to the public), or post notice on the Corporation’s website, in any event prior
to the opening of business on the first Business Day following any date on which the
Corporation provides notice pursuant to Section 8(d) above to the holders of Series E
Preferred Stock
(f) To exercise the Change of Control Conversion Right, a holder of Series E Preferred
Stock shall be required to deliver, on or before the close of business on the Change of
Control Conversion Date, the certificates evidencing the Series E Preferred Stock, to the
extent such shares are certificated, to be converted, duly endorsed for transfer, together
with a written conversion notice (the “
Conversion Notice
”) to the Corporation’s transfer
agent. The Conversion Notice shall state: (i) the relevant Change of Control Conversion
Date; (ii) the number of Series E Preferred Stock to be converted; and (iii) that the Series
E Preferred Stock is to be converted pursuant to the applicable terms of the Series E
Preferred Stock. Notwithstanding the foregoing, if the Series E Preferred Stock is held in
global form, such notice shall comply with applicable procedures of The Depository Trust
Company (“
DTC
”).
(g) Holders of Series E Preferred Stock may withdraw any notice of exercise of a Change
of Control Conversion Right (in whole or in part) by a written notice of withdrawal (the
“
Withdrawal Notice
”) delivered to the Corporation’s transfer agent prior to the close of
business on the Business Day prior to the Change of Control Conversion Date. The Withdrawal
Notice must state: (i) the number of withdrawn shares of Series E Preferred Stock; (ii) if
certificated shares of Series E Preferred Stock have been issued, the certificate numbers of
the withdrawn shares of Series E Preferred Stock; and (iii) the number of shares of Series E
Preferred Stock, if any, which remain subject to the Conversion Notice. Notwithstanding the
foregoing, if the shares of Series E Preferred Stock are held in global form, the Withdrawal
Notice shall comply with applicable procedures of DTC.
(h) Series E Preferred Stock as to which the Change of Control Conversion Right has
been properly exercised and for which the conversion notice has not been properly withdrawn
shall be converted into the applicable Conversion Consideration in accordance with the
Change of Control Conversion Right on the Change of Control Conversion Date, unless, prior
to the Change of Control Conversion Date, the Corporation has provided or provides notice of
its election to redeem such Series E Preferred Stock, whether pursuant to its Redemption
Right or Special Optional Redemption Right. If the Corporation elects to redeem Series E
Preferred Stock that would otherwise be converted into the applicable Conversion
Consideration on a Change of Control Conversion Date, such Series E Preferred Stock shall
not be so converted and the holders of such shares shall be entitled to receive on the
applicable redemption date $25.00 per share, plus any accrued and unpaid distributions
thereon to, but not including, the redemption date in accordance with Section 6(a) or 6(b)
above.
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(i) The Corporation shall deliver the applicable Conversion Consideration no later than
the third Business Day following the Change of Control Conversion Date.
(j) Notwithstanding anything to the contrary contained herein, no holder of Series E
Preferred Stock will be entitled to convert such Series E Preferred Stock into Common Stock
to the extent that receipt of such shares of Common Stock would cause the holder of such
shares of Common Stock (or any other person) to own shares of Common Stock of the
Corporation in excess of the Ownership Limit, unless the Board grants a waiver of such
limitation.
(9)
Information Rights
. During any period when the Corporation is not subject to the
reporting requirements of Section 13 or 15(d) of the Exchange Act and any Series E Preferred Stock
is outstanding, the Corporation will (i) transmit by mail or other permissible means under the
Exchange Act to all holders of Series E Preferred Stock as their names and addresses appear in our
record books and without cost to such holders, copies of the annual reports and quarterly reports
that the Corporation would have been required to file with the Securities and Exchange Commission
(“
SEC
”), pursuant to Section 13 or Section 15(d) of the Exchange Act if the Corporation was subject
to such sections (other than any exhibits that would have been required), and (ii) within 15 days
following written request, supply copies of such reports to any prospective holder of the Series E
Preferred Stock. The Corporation will mail (or otherwise provide) the reports to the holders of
Series E Preferred Stock within 15 days after the respective dates by which the Corporation would
have been required to file such reports with the SEC if it were subject to Section 13 or 15(d) of
the Exchange Act.
(10)
Restrictions on Transfer, Acquisition and Redemption of Shares
. The Series E Preferred
Stock is governed by and issued subject to all of the limitations, terms and conditions of the
Corporation’s Charter, including but not limited to the terms and conditions (including exceptions
and exemptions) of Article VI of the Charter;
provided
,
however
, that the terms and
conditions (including exceptions and exemptions) of Article VI of the Charter shall also be applied
to the Series E Preferred Stock separately and without regard to any other series or class. The
foregoing sentence shall not be construed to limit the applicability of any other term or provision
of the Charter to the Series E Preferred Stock. In addition to the legend contemplated by Article
VI, Section 2.9 of the Charter, each certificate for Series E Preferred Stock shall bear
substantially the following legend:
“The Corporation will furnish to any stockholder on request and without charge a full
statement of the designations and any preferences, conversion and other rights, voting
powers, restrictions, limitations as to dividends, qualifications and terms and conditions
of redemption of the stock of each class which the Corporation is authorized to issue, to
the extent they have been set, and of the authority of the Board of Directors to set the
relative rights and preferences of a subsequent series of a preferred or special class of
stock. Such request may be made to the Secretary of the Corporation or to its transfer
agent.”
SECOND
: The Series E Preferred Stock has been classified and designated by the Board under
the authority contained in the Charter.
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THIRD
: These Articles Supplementary have been approved by the Board in the manner and by the
vote required by law.
FOURTH
: These Articles Supplementary shall be effective at the time the State Department of
Assessments and Taxation of Maryland accepts these Articles Supplementary for record.
FIFTH
: The undersigned President of the Corporation acknowledges these Articles Supplementary
to be the act of the Corporation and, as to all matters or facts required to be verified under
oath, the undersigned 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.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to be executed in
its name and on its behalf by its President and attested to by its Secretary of this
15th day of April, 2011.
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ASHFORD HOSPITALITY TRUST, INC.
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By:
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/s/ Douglas Kessler
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Douglas Kessler
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President
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ATTEST:
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By:
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/s/ David A. Brooks
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David A. Brooks
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Secretary
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