Exhibit
3.1
WHITESTONE
REIT
ARTICLES
OF AMENDMENT AND RESTATEMENT
FIRST: Whitestone
REIT, a Maryland real estate investment trust (the “Trust”) under the Maryland
REIT Law, desires to amend and restate its Declaration of Trust (as so amended
and restated, the “Declaration of Trust”). The amendment to and restatement of
the Declaration of Trust of the Trust as herein set forth has been duly approved
and advised by the Board of Trustees and approved by the shareholders of the
Trust as required by law.
SECOND:
The following
provisions are all the provisions of the Declaration of Trust as hereby amended
and restated:
ARTICLE
I
FORMATION
The Trust is a real estate investment
trust within the meaning of the Maryland REIT Law. The Trust shall not be deemed
to be a general partnership, limited partnership, joint venture, joint stock
company or a corporation (but nothing herein shall preclude the Trust from being
treated for tax purposes as an association under the Internal Revenue Code of
1986, as amended (the “Code”)).
ARTICLE
II
NAME
The name of the Trust is: Whitestone
REIT.
The Board of Trustees of the Trust (the
“Board of Trustees” or “Board”) may change the name of the Trust without
approval of the shareholders. Under circumstances in which the Board determines
that the use of the name of the Trust is not practicable, the Trust may use any
other designation or name for the Trust.
ARTICLE
III
PURPOSES AND
POWERS
Section 3.1
Purposes
. The
purposes for which the Trust is formed are to engage in any lawful act or
activity, including, without limitation or obligation, to invest in and to
acquire, hold, manage, administer, control and dispose of property (including
mortgages) including, without limitation or obligation, engaging in business as
a real estate investment trust (“REIT”) under the Code.
Section 3.2
Powers
. The Trust
shall have all of the powers granted to real estate investment trusts by the
Maryland REIT Law and all other powers set forth in the Declaration of Trust
that are not inconsistent with law and are appropriate to promote and attain the
purposes set forth in the Declaration of Trust.
ARTICLE
IV
PRINCIPAL OFFICE IN STATE AND
RESIDENT AGENT
The name of the resident agent of the
Trust in the State of Maryland is The Corporation Trust Incorporated, 300 East
Lombard Street, Baltimore, Maryland 21202. The resident agent is a Maryland
corporation. The Trust may have such offices or places of business within or
outside the State of Maryland as the Board of Trustees may from time to time
determine.
ARTICLE
V
BOARD OF TRUSTEES
Section 5.1
Powers
. Subject to
any express limitations contained in the Declaration of Trust or in the Bylaws,
(a) the business and affairs of the Trust shall be managed under the
direction of the Board of Trustees and (b) the Board shall have full, exclusive
and absolute power, control and authority over any and all property of the
Trust. The Board may take any action as in its sole judgment and discretion is
necessary or appropriate to conduct the business and affairs of the Trust. The
Declaration of Trust shall be construed with the presumption in favor of the
grant of power and authority to the Board. Any construction of the Declaration
of Trust or determination made in good faith by the Board concerning its powers
and authority hereunder shall be conclusive. The enumeration and definition of
particular powers of the Trustees included in the Declaration of Trust or in the
Bylaws of the Trust (the “Bylaws”) shall in no way be limited or restricted by
reference to or inference from the terms of this or any other provision of the
Declaration of Trust or the Bylaws or construed or deemed by inference or
otherwise in any manner to exclude or limit the powers conferred upon the Board
or the Trustees under the general laws of the State of Maryland or any other
applicable laws.
If the Board determines that it is no
longer in the best interests of the Trust to continue to be qualified as a REIT,
the Board may revoke or otherwise terminate the Trust’s REIT election pursuant
to Section 856(g) of the Code.
The Board, without any action by the
shareholders of the Trust, shall have and may exercise, on behalf of the Trust,
without limitation, the power to determine that compliance with any restriction
or limitations on ownership and transfers of shares of the Trust’s beneficial
interest set forth in Article VII of the Declaration of Trust is no longer
required in order for the Trust to qualify as a REIT; to adopt, amend or repeal
Bylaws; to elect officers in the manner prescribed in the Bylaws; to solicit
proxies from holders of shares of beneficial interest of the Trust; and to do
any other acts and deliver any other documents necessary or appropriate to the
foregoing powers.
Section 5.2
Number and
Classification
. The number of Trustees (hereinafter the “Trustees”) is
currently four (4), but such number may hereafter be increased or decreased
pursuant to the Bylaws. Notwithstanding the foregoing, if for any reason any or
all of the Trustees cease to be Trustees, such event shall not terminate the
Trust or affect the Declaration of Trust or the powers of the remaining
Trustees. The names of the current four Trustees are:
|
Donald
F. Keating
|
|
Jack
L. Mahaffey
|
|
James
C. Mastandrea
|
|
Chris
A. Minton
|
The
Trustees may increase the number of Trustees and fill any vacancy, whether
resulting from an increase in the number of Trustees or otherwise, on the Board
of Trustees in the manner provided in the Bylaws. Election of Trustees by
shareholders shall require the vote and be in accordance with the procedures set
forth in the Bylaws.
It shall not be necessary to list in
the Declaration of Trust the names and addresses of any Trustees hereinafter
elected.
For so long as the Trust is subject to
Section 3-803 of the Maryland General Corporation Law (the “MGCL”), the Trustees
(other than any Trustee elected solely by holders of one or more classes or
series of Preferred Shares, as hereinafter defined) shall be classified, with
respect to the terms for which they severally hold office, into three classes,
as nearly equal in number as possible. At each annual meeting of
shareholders, the successors to the class of Trustees whose term expires at such
meeting shall be elected to hold office for a term expiring at the annual
meeting of shareholders held in the third year following the year of their
election and until their successors are duly elected and qualify. At
such time, if any, that the Trust is no longer subject to Section 3-803 of the
MGCL, each Trustee shall be elected annually and shall serve until the next
annual meeting of shareholders and until his or her successor is duly elected
and qualifies.
Section 5.3
Resignation, Removal or
Death
. Any Trustee may resign by written notice to the Board, effective
upon execution and delivery to the Trust of such written notice or upon any
future date specified in the notice. Subject to the rights of holders of one or
more classes or series of Preferred Shares to elect or remove one or more
Trustees, a Trustee may be removed at any time, but only with cause, at a
meeting of the shareholders, by the affirmative vote of the holders of not less
than two-thirds (2/3) of the Shares then outstanding and entitled to vote
generally in the election of Trustees.
Section
5.4
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 Trustees
consistent with the Declaration of Trust, shall be final and conclusive and
shall be binding upon the Trust and every holder of Shares, as hereinafter
defined: the amount of the net income of the Trust for any period and
the amount of assets at any time legally available for the payment of dividends,
redemption of Shares or the payment of other distributions on Shares; the amount
of paid-in surplus, net assets, other surplus, annual or other cash flow, funds
from operations, 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); any interpretation of the terms, preferences, conversion or
other rights, voting powers or rights, restrictions, limitations as to dividends
or distributions, qualifications or terms or conditions of redemption of any
class or series of Shares; 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 Trust
or of any Shares; the number of Shares of any class of the Trust; any matter
relating to the acquisition, holding and disposition of any assets by the Trust;
or any other matter relating to the business and affairs of the Trust or
required or permitted by applicable law, the Declaration of Trust or Bylaws or
otherwise to be determined by the Board of Trustees.
ARTICLE
VI
SHARES OF BENEFICIAL
INTEREST
Section 6.1
Authorized Shares
.
The beneficial interest of the Trust shall be divided into shares of beneficial
interest (the “Shares”). The total number of Shares of all classes that the
Trust has authority to issue is 450,000,000 shares of beneficial interest,
$0.001 par value per share. 400,000,000 Shares are classified as common shares
of beneficial interest, $0.001 par value per share (“Common Shares”), and
50,000,000 Shares are classified as preferred shares of beneficial interest,
$0.001 par value per share (“Preferred Shares”). If shares of one
class are classified or reclassified into shares of another class of shares
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 all
classes that the Trust has authority to issue shall not be more than the total
number of Shares set forth in the second sentence of this
paragraph. The Board of Trustees, with the approval of a majority of
the entire Board and without any action by the shareholders of the Trust, may
amend the Declaration of Trust from time to time to increase or decrease the
aggregate number of Shares or the number of Shares of any class or series that
the Trust has authority to issue.
Section 6.2
Common Shares
.
Subject to the provisions of Article VII and except as may otherwise be
specified in the terms of any class or series of Common Shares, each Common
Share shall entitle the holder thereof to one vote on each matter upon which
holders of Common Shares are entitled to vote. The Board of Trustees may
reclassify any unissued Common Shares from time to time in one or more classes
or series of common shares or preferred shares.
Section 6.3
Preferred Shares
. The
Board of Trustees may classify any unissued Preferred Shares and reclassify any
previously classified but unissued Preferred Shares of any series from time to
time, in one or more series of common shares or preferred shares.
Section 6.4
Classified or Reclassified
Shares
. Prior to issuance of classified or reclassified Shares of any
class or series, the Board of Trustees by resolution shall: (a) designate
that class or series to distinguish it from all other classes and series of
Shares; (b) specify the number of Shares to be included in the class or
series; (c) set, subject to the provisions of Article VII and subject
to the express terms of any class or series of Shares 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 Trust
to file articles supplementary with the Maryland State Department of Assessments
and Taxation (the “SDAT”). Any of the terms of any class or series of Shares set
pursuant to clause (c) of this Section 6.4 may be made dependent upon
facts ascertainable outside the Declaration of Trust (including the occurrence
of any event, including a determination or action by the Trust or any other
person or body) and may vary among holders thereof, provided that the manner in
which such facts or variations shall operate upon the terms of such class or
series of Shares is clearly and expressly set forth in the articles
supplementary filed with the SDAT.
Section 6.5
Authorization by Board of
Share Issuance
. The Board of Trustees may authorize, without approval of
any shareholder, the issuance from time to time of Shares of any class or
series, whether now or hereafter authorized, or securities or rights convertible
into Shares of any class or series, whether now or hereafter authorized, for
such consideration (whether in cash, property, past or future services,
obligation for future payment or otherwise) as the Board of Trustees may deem
advisable (or without consideration in the case of a share dividend or share
split), subject to such restrictions or limitations, if any, as may be set forth
in the Declaration of Trust or the Bylaws.
Section 6.6
Dividends and
Distributions
. The Board of Trustees may from time to time authorize and
the Trust may declare to shareholders such dividends or distributions as the
Board of Trustees in its discretion shall determine. The Board of Trustees shall
endeavor to authorize, and the Trust shall endeavor to declare and pay, such
dividends and distributions as shall be necessary for the Trust to qualify as a
REIT under the Code; however, shareholders shall have no right to any dividend
or distribution unless and until authorized by the Board and declared and
publicly disclosed by the Trust. The exercise of the powers and rights of the
Board of Trustees pursuant to this Section 6.6 shall be subject to the
preferences of any class or series of Shares at the time
outstanding.
Section 6.7
Transferable Shares;
Preferential Dividends
. Notwithstanding any other provision in the
Declaration of Trust, no determination shall be made by the Board of Trustees
nor shall any transaction be entered into by the Trust that would cause any
Shares or other beneficial interest in the Trust not to constitute “transferable
shares” or “transferable certificates of beneficial interest” under
Section 856(a)(2) of the Code or that would cause any distribution to
constitute a preferential dividend as described in Section 562(c) of the
Code.
Section 6.8
General Nature of
Shares
. All Shares shall be personal property entitling the shareholders
only to those rights provided in the Declaration of Trust. The shareholders
shall have no interest in the property of the Trust and shall have no right to
compel any partition, division, dividend or distribution of the Trust or of the
property of the Trust. The death of a shareholder shall not terminate the Trust.
The Trust is entitled to treat as shareholders only those persons in whose names
Shares are registered as holders of Shares on the share ledger of the
Trust.
Section 6.9
Fractional Shares
.
The Trust may, without the consent or approval of any shareholder, issue
fractional Shares, eliminate a fraction of a Share by rounding up or down to a
full Share, arrange for the disposition of a fraction of a Share by the person
entitled to it, or pay cash for the fair value of a fraction of a
Share.
Section 6.10
Divisions and Combinations
of Shares
. Subject to an express provision to the contrary in the terms
of any class or series of beneficial interest hereafter authorized, the Board of
Trustees shall have the power to divide or combine the outstanding shares of any
class or series of beneficial interest, without a vote of shareholders so long
as the number of shares combined into one share in any such combination or
series of combinations within any period of twelve months is not greater than
ten.
Section 6.11
Declaration of Trust and
Bylaws
. The rights of all shareholders and the terms of all Shares are
subject to the provisions of the Declaration of Trust and the
Bylaws.
ARTICLE
VII
RESTRICTION ON TRANSFER AND OWNERSHIP
OF SHARES
Section 7.1
Definitions
. For the
purpose of this Article VII, the following terms shall have the following
meanings:
Beneficial Ownership
.
The term “Beneficial Ownership” shall mean ownership of Shares by a Person,
whether the interest in Shares is held directly or indirectly (including by a
nominee), and shall include interests that would be treated as owned through the
application of Section 544 of the Code, as modified by
Sections 856(h)(1)(B) and 856(h)(3) of the Code. The terms “Beneficial
Owner,” “Beneficially Owns” and “Beneficially Owned” shall have the correlative
meanings.
Business Day
. The
term “Business Day” shall mean any day, other than a Saturday or Sunday, that is
neither a legal holiday nor a day on which banking institutions in New York, New
York are authorized or required by law, regulation or executive order to
close.
Charitable
Beneficiary
. The term “Charitable Beneficiary” shall mean one or more
beneficiaries of the Charitable Trust as determined pursuant to
Section 7.3.7, provided that each such organization must be described in
Sections 501(c)(3), 170(b)(1)(A) and 170(c)(2) of the Code.
Charitable Trust
. The
term “Charitable Trust” shall mean any trust provided for in
Section 7.2.1(b)(i) and Section 7.3.1.
Charitable Trustee
.
The term “Charitable Trustee” shall mean the Person unaffiliated with the Trust
and a Prohibited Owner, that is appointed by the Trust to serve as trustee of
the Charitable Trust.
Constructive
Ownership.
The term “Constructive Ownership” shall mean ownership of
Shares by a Person who is or would be treated as an owner of such Shares either
actually or constructively through the application of Section 318 of the
Code, as modified by Section 856(d)(5) of the Code. The terms “Constructive
Owner,” “Constructively Own,” “Constructively Owns” and “Constructively Owned”
shall have the correlative meanings.
Designated Investment
Entity
. The term “Designated Investment Entity” shall mean either
(i) a pension trust that qualifies for look-through treatment under Section
856(h) of the Code, (ii) an entity that qualifies as a regulated investment
company under Section 851 of the Code, or (iii) a Qualified Investment
Manager; provided that each beneficial owner of such entity would satisfy the
Ownership Limit if such beneficial owner owned directly its proportionate share
of the Shares that are held by such Designated Investment Entity.
Designated Investment Entity
Limit
. The term “Designated Investment Entity Limit” shall mean with
respect to the Common Shares, 9.8% (in value or number of shares, whichever is
more restrictive) of the outstanding Common Shares.
Initial Date
. The
term “Initial Date” shall mean the date upon which these Articles of Amendment
and Restatement are filed with and accepted for record by the SDAT.
Market Price
. The
term “Market Price” on any date shall mean, with respect to any class or series
of outstanding Shares, the Closing Price for such Shares on such date. The
“Closing Price” on any date shall mean the last sale price for such Shares,
regular way, or, in case no such sale takes place on such day, the average of
the closing bid and asked prices, regular way, for such Shares, in either case,
as reported on the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on
which such Shares are listed or admitted to trading or, if such Shares are not
listed or admitted to trading on any national securities exchange, the last
quoted price, or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System or, if such system is no
longer in use, the principal other automated quotation system that may then be
in use or, if such Shares are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional market maker
making a market in such Shares selected by the Board of Trustees or, in the
event that no trading price is available for such Shares, the fair market value
of Shares, as determined in good faith by the Board of Trustees.
NYSE
. The term “NYSE”
shall mean The New York Stock Exchange.
Ownership Limit
. The
term “Ownership Limit” shall mean (i) with respect to the Common Shares,
9.8% (in value or number of shares, whichever is more restrictive) of the
outstanding Common Shares; and (ii) with respect to any class or series of
Preferred Shares, 9.8% (in value or number of Shares, whichever is more
restrictive) of the outstanding shares of such class or series of Preferred
Shares.
Person
. The term
“Person” shall mean an individual, corporation, partnership, estate, trust
(including a trust qualified under Sections 401(a) or 501(c)(17) of the Code), a
portion of a trust permanently set aside for or to be used exclusively for the
purposes described in Section 642(c) of the Code, association, private
foundation within the meaning of Section 509(a) of the Code, joint stock company
or other entity and also includes a group as that term is used for purposes of
Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended.
Prohibited Owner
. The
term “Prohibited Owner” shall mean, with respect to any purported Transfer, any
Person who, but for the provisions of Section 7.2.1, would Beneficially Own
Shares, and if appropriate in the context, shall also mean any Person who would
have been the record owner of Shares that the Prohibited Owner would have so
owned.
Qualified Investment
Manager
. The term “Qualified Investment Manager” shall mean an entity
(i) who for compensation engages in the business of advising others as to
the value of securities or as to the advisability of investing in, purchasing,
or selling securities; (ii) who purchases securities in the ordinary course
of its business and not with the purpose or effect of changing or influencing
control of the Trust, nor in connection with or as a participant in any
transaction having such purpose or effect, including any transaction subject to
Rule 13d-3(b) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”); and (iii) who has or shares voting power and investment
power within the meaning of Rule 13d-3(a) under the Exchange Act. A
Qualified Investment Manager shall be deemed to beneficially own all Common
Shares beneficially owned by each of its affiliates, after application of the
beneficial ownership rules under Section 13(d)(3) of the Exchange Act;
provided such affiliate meets the requirements set forth in the preceding clause
(ii).
Restriction Termination
Date
. The term “Restriction Termination Date” shall mean the first day
after the Initial Date on which the Board of Trustees determines that it is no
longer in the best interests of the Trust to attempt to, or continue to, qualify
as a REIT or that compliance with the restrictions and limitations on Beneficial
Ownership and Transfers of Shares set forth herein is no longer required in
order for the Trust to qualify as a REIT.
Transfer
. The term
“Transfer” shall mean any issuance, sale, transfer, gift, assignment, devise or
other disposition, as well as any other event that causes any Person to acquire
Beneficial Ownership or any agreement to take any such actions or cause any such
events, of Shares or the right to vote or receive dividends or distributions on
Shares, including (a) a change in the capital structure of the Trust,
(b) a change in the relationship between two or more Persons which causes a
change in ownership of Shares by application of Section 544 of the Code, as
modified by Section 856(h) of the Code, (c) the granting or exercise of any
option or warrant (or any disposition of any option or warrant), pledge,
security interest, or similar right to acquire Shares, (d) any disposition of
any securities or rights convertible into or exchangeable for Shares or any
interest in Shares or any exercise of any such conversion or exchange right and
(e) Transfers of interests in other entities that result in changes in
Beneficial Ownership of Shares; in each case, whether voluntary or involuntary,
whether owned of record, Beneficially Owned and whether by operation of law or
otherwise. The terms “Transferring” and “Transferred” shall have the correlative
meanings.
Section 7.2
Shares
.
Section 7.2.1
Ownership
Limitations
. During the period commencing on the Initial Date and prior
to the Restriction Termination Date:
(a)
Basic
Restrictions
.
(i) (1) No
Person shall Beneficially Own or Constructively Own Common Shares in excess of
the Ownership Limit, other than a Designated Investment Entity, which shall not
Beneficially Own or Constructively Own Common Shares in excess of the Designated
Investment Entity Limit; and
(2) No Person
shall Beneficially Own or Constructively Own Preferred Shares in excess of the
Ownership Limit.
(ii) No
Person shall Beneficially Own or Constructively Own Shares to the extent that
(1) such Beneficial Ownership of Shares would result in the Trust being
“closely held” within the meaning of Section 856(h) of the Code (without regard
to whether the ownership interest is held during the last half of a taxable
year), or (2) such Beneficial Ownership or Constructive Ownership of Shares
would result in the Trust otherwise failing to qualify as a REIT.
(iii) No
Person shall Transfer any Shares if, as a result of the Transfer, the Shares
would be beneficially owned by less than 100 Persons (determined without
reference to the rules of attribution under Section 544 of the Code). Any
Transfer of Shares that, if effective, would result in Shares being beneficially
owned by less than 100 Persons (determined under the principles of
Section 856(a)(5) of the Code) shall be void
ab initio
, and the intended
transferee shall acquire no rights in such Shares.
(b)
Transfer in Trust
. If
any Transfer of Shares occurs which, if effective, would result in any Person
Beneficially Owning or Constructively Owning Shares in violation of
Section 7.2.1(a)(i) or (ii),
(i) then
that number of Shares the Beneficial Ownership or Constructive Ownership of
which otherwise would cause such Person to violate Section 7.2.1(a)(i) or (ii)
(rounded up to the nearest whole Share) shall be automatically transferred to a
Charitable Trust for the benefit of a Charitable Beneficiary, as described in
Section 7.3, effective as of the close of business on the Business Day
prior to the date of such Transfer, and such Person shall acquire no rights in
such Shares; or
(ii) if
the transfer to the Charitable Trust described in clause (i) of this
sentence would not be effective for any reason to prevent the violation of
Section 7.2.1(a)(i) or (ii), then the Transfer of that number of Shares
that otherwise would cause any Person to violate Section 7.2.1(a)(i) or
(ii) shall be void
ab
initio
, and the intended transferee shall acquire no rights in such
Shares.
Section 7.2.2
Remedies for Breach
.
If the Board of Trustees or any duly authorized committee thereof shall at any
time determine in good faith that a Transfer or other event has taken place that
results in a violation of Section 7.2.1 or that a Person intends to acquire
or has attempted to acquire Beneficial Ownership of any Shares in violation of
Section 7.2.1 (whether or not such violation is intended), the Board of
Trustees or a committee thereof shall take such action as it deems advisable to
refuse to give effect to or to prevent such Transfer or other event, including,
without limitation, causing the Trust to redeem Shares, refusing to give effect
to such Transfer on the books of the Trust or instituting proceedings to enjoin
such Transfer or other event;
provided
,
however
, that any
Transfer or attempted Transfer or other event in violation of Section 7.2.1
shall automatically result in the transfer to the Charitable Trust described
above, and, where applicable, such Transfer (or other event) shall be void
ab initio
as provided above
irrespective of any action (or non-action) by the Board of Trustees or a
committee thereof.
Section 7.2.3
Notice of Restricted
Transfer
. Any Person who acquires or attempts or intends to acquire
Beneficial or Constructive Ownership of Shares that will or may violate
Section 7.2.1(a), or any Person who would have owned Shares that resulted
in a transfer to the Charitable Trust pursuant to the provisions of
Section 7.2.1(b), shall immediately give written notice to the Trust of
such event, or in the case of such a proposed or attempted transaction, shall
give at least 15 days prior written notice, and shall provide to the Trust
such other information as the Trust may request in order to determine the
effect, if any, of such acquisition or ownership on the Trust’s status as a
REIT.
Section 7.2.4
Owners Required To Provide
Information
. From the Initial Date and prior to the Restriction
Termination Date:
(a) every
owner of more than five percent (or such lower percentage as required by the
Code or the Treasury Regulations promulgated thereunder) of the outstanding
Shares, within 30 days after the end of each taxable year, shall give
written notice to the Trust stating the name and address of such owner, the
number of Shares Beneficially Owned and a description of the manner in which
such Shares are held; provided, that a shareholder of record who holds
outstanding Shares as nominee for another Person, which other Person is required
to include in gross income the dividends or distributions received on such
Shares (an “Actual Owner”), shall give written notice to the Trust stating the
name and address of such Actual Owner and the number of Shares of such Actual
Owner with respect to which the shareholder of record is nominee. Each owner
shall provide to the Trust such additional information as the Trust may request
in order to determine the effect, if any, of such Beneficial Ownership on the
Trust’s status as a REIT and to ensure compliance with the Ownership Limit or
Designated Investment Entity Limit applicable to such owner; and
(b) each
Person who is a Beneficial Owner of Shares and each Person (including the
shareholder of record) who is holding Shares for a Beneficial Owner shall
provide to the Trust such information as the Trust may request, in good faith,
in order to determine the Trust’s status as a REIT and to comply with
requirements of any taxing authority or governmental authority or to determine
such compliance.
Section 7.2.5
Remedies Not Limited
.
Subject to Sections 5.1 and 7.4 of the Declaration of Trust, nothing
contained in this Section 7.2 shall limit the authority of the Board of
Trustees to take such other action as it deems necessary or advisable to protect
the Trust and the interests of its shareholders in preserving the Trust’s status
as a REIT.
Section 7.2.6
Ambiguity
. In the
case of an ambiguity in the application of any of the provisions of this
Section 7.2, Section 7.3 or any definition contained in
Section 7.1, the Board of Trustees shall have the power to determine the
application of the provisions of this Section 7.2 or Section 7.3 with
respect to any situation based on the facts known to it. If Section 7.2 or 7.3
requires an action by the Board of Trustees and the Declaration of Trust fails
to provide specific guidance with respect to such action, the Board of Trustees
shall have the power to determine the action to be taken so long as such action
is not contrary to the provisions of Sections 7.1, 7.2 or 7.3.
Section 7.2.7
Exemptions from the
Ownership Limit
.
(a) The
Board, in its sole discretion, may exempt, prospectively or retroactively, a
Person from the Ownership Limit or Designated Investment Entity Limit if:
(i) such Person submits to the Board information satisfactory to the Board,
in its reasonable discretion, demonstrating that such Person is not an
individual for purposes of Section 542(a)(2) of the Code (determined taking
into account Section 856(h)(3)(A) of the Code); (ii) such Person
submits to the Board information satisfactory to the Board, in its reasonable
discretion, demonstrating that no Person who is an individual for purposes of
Section 542(a)(2) of the Code (determined taking into account
Section 856(h)(3)(A) of the Code) would be considered to Beneficially Own
Shares in excess of the Ownership Limit or Designated Investment Entity Limit by
reason of such Person’s ownership of Shares in excess of the Ownership Limit or
Designated Investment Entity Limit pursuant to the exemption granted under this
subparagraph (a); (iii) such Person submits to the Board information
satisfactory to the Board, in its reasonable discretion, demonstrating that
clause (2) of subparagraph (a)(ii) of Section 7.2.1 will not be
violated by reason of such Person’s ownership of Shares in excess of the
Ownership Limit or Designated Investment Entity Limit pursuant to the exemption
granted under this subparagraph (a); and (iv) such Person provides to the
Board such representations and undertakings, if any, as the Board may, in its
reasonable discretion, require to ensure that the conditions in clauses (i),
(ii) and (iii) hereof are satisfied and will continue to be satisfied
throughout the period during which such Person owns Shares in excess of the
Ownership Limit or Designated Investment Entity Limit pursuant to any exemption
thereto granted under this subparagraph (a), and such Person agrees that any
violation of such representations and undertakings or any attempted violation
thereof will result in the application of the remedies set forth in
Section 7.2 with respect to Shares held in excess of the Ownership Limit or
Designated Investment Entity Limit with respect to such Person (determined
without regard to the exemption granted such Person under this subparagraph
(a)).
(b) Prior
to granting any exemption pursuant to subparagraph (a), the Board, in its sole
and absolute discretion, may require a ruling from the IRS or an opinion of
counsel, in either case in form and substance satisfactory to the Board, in its
sole and absolute discretion as it may deem necessary or advisable in order to
determine or ensure the Trust’s status as a REIT;
provided
,
however
, that the
Board shall not be obligated to require obtaining a favorable ruling or opinion
in order to grant an exception hereunder.
(c) Subject
to Section 7.2.1(a)(ii), an underwriter that participates in a public
offering or a private placement of Shares (or securities convertible into or
exchangeable for Shares) may Beneficially Own or Constructively Own Shares (or
securities convertible into or exchangeable for Shares) in excess of the
Ownership Limit or Designated Investment Entity Limit, but only to the extent
necessary to facilitate such public offering or private placement.
Section 7.2.8
Increase in Ownership Limit
or Designated Investment Entity Limit
. The Board of Trustees may increase
the Ownership Limit or Designated Investment Entity Limit
for one or more Persons
and decrease the Ownership Limit or Designated Investment Entity Ownership Limit
for all other Persons subject to the limitations provided in this
Section 7.2.8.
(a) The
decreased Ownership Limit and/or Designated Investment Entity Ownership Limit
will not be effective for any Person whose percentage ownership of Shares is in
excess of such decreased Ownership Limit and/or Designated Investment Entity
Ownership Limit until such time as such Person’s percentage of Shares equals or
falls below the decreased Ownership Limit and/or Designated Investment Entity
Ownership Limit, but any further acquisition of Shares in excess of such
percentage ownership of Shares will be in violation of the Ownership Limit
and/or Designated Investment Entity Ownership Limit.
(b) The
Ownership Limit or Designated Investment Entity Limit may not be increased if,
after giving effect to such increase, five Persons who are considered
individuals pursuant to Section 542 of the Code, as modified by
Section 856(h)(3) of the Code, could Beneficially Own, in the aggregate,
more than 49% of the value of the outstanding Shares.
(c) Prior
to the modification of the Ownership Limit or Designated Investment Entity Limit
pursuant to this Section 7.2.8, the Board, in its sole and absolute
discretion, may require such opinions of counsel, affidavits, undertakings or
agreements as it may deem necessary or advisable in order to determine or ensure
the Trust’s status as a REIT if the modification in the Ownership Limit or
Designated Investment Entity Limit were to be made.
Section 7.2.9
Legend
. Each
certificate for Shares shall bear substantially the following
legend:
The
shares evidenced by this certificate are subject to restrictions on Beneficial
Ownership, Constructive Ownership and Transfer. Subject to certain further
restrictions and except as expressly provided in the Trust’s Declaration of
Trust, (i) no Person may Beneficially Own or Constructively Own Common Shares in
excess of 9.8% (in value or number of shares, whichever is more restrictive) of
the outstanding Common Shares, other than a Designated Investment Entity; (ii)
no Person may Beneficially Own or Constructively Own Preferred Shares in excess
of 9.8% (in value or number of shares, whichever is more restrictive) of the
outstanding shares of such class or series of Preferred Shares;
(iii) no Designated Investment Entity may Beneficially Own or
Constructively Own Common Shares in excess of 9.8% (in value or number of
shares, whichever is more restrictive) of the outstanding Common Shares; (iv) no
Person may Beneficially Own Shares that would result in the Trust being “closely
held” under Section 856(h) of the Internal Revenue Code of 1986 (the “Code”) or
otherwise cause the Trust to fail to qualify as a real estate investment trust
under the Code; and (v) no Person may Transfer Shares if such Transfer would
result in Shares of the Trust being owned by fewer than 100 Persons. Any Person
who Beneficially Owns or Constructively Owns or attempts to Beneficially Own or
Constructively Own Shares which cause or will cause a Person to Beneficially Own
or Constructively Own Shares in excess or in violation of the limitations set
forth in the Declaration of Trust must immediately notify the Trust. If any of
the restrictions on transfer or ownership are violated, the Shares evidenced
hereby will be automatically transferred to a Charitable Trustee of a Charitable
Trust for the benefit of one or more Charitable Beneficiaries. In addition, the
Trust may redeem Shares upon the terms and conditions specified by the Board of
Trustees in its sole discretion if the Board of Trustees determines that
ownership or a Transfer or other event may violate the restrictions described
above. Furthermore, upon the occurrence of certain events, attempted
Transfers in violation of the restrictions described above may be void
ab initio
. A Person who
attempts to Beneficially Own or Constructively Own Shares in violation of the
ownership limitations described above shall have no claim, cause of action, or
any recourse whatsoever against a transferor of such Shares. All capitalized
terms in this legend have the meanings defined in the Declaration of Trust, as
the same may be amended from time to time, a copy of which, including the
restrictions on transfer and ownership, will be furnished to each holder of
Shares on request and without charge.
Instead of the foregoing legend, the
certificate may state that the Trust will furnish a full statement about certain
restrictions on transferability to a shareholder on request and without
charge.
Section 7.3
Transfer of Shares in
Trust
.
Section 7.3.1
Ownership in Trust
.
Upon any purported Transfer or other event described in Section 7.2.1(b)
that would result in a transfer of Shares to a Charitable Trust, such Shares
shall be deemed to have been transferred to the Charitable Trustee as trustee of
a Charitable Trust for the exclusive benefit of one or more Charitable
Beneficiaries. Such transfer to the Charitable Trustee shall be deemed to be
effective as of the close of business on the Business Day prior to the purported
Transfer or other event that results in the transfer to the Charitable Trust
pursuant to Section 7.2.1(b). The Charitable Trustee shall be appointed by the
Trust and shall be a Person unaffiliated with the Trust and any Prohibited
Owner. Each Charitable Beneficiary shall be designated by the Trust as provided
in Section 7.3.7.
Section 7.3.2
Status of Shares Held by the
Charitable Trustee
. Shares held by the Charitable Trustee shall be issued
and outstanding Shares of the Trust. The Prohibited Owner shall have no rights
in the Shares held by the Charitable Trustee. The Prohibited Owner shall not
benefit economically from ownership of any Shares held in trust by the
Charitable Trustee, shall have no rights to dividends or other distributions and
shall not possess any rights to vote or other rights attributable to the Shares
held in the Charitable Trust. The Prohibited Owner shall have no claim, cause of
action, or any other recourse whatsoever against the purported transferor of
such Shares.
Section 7.3.3
Dividend and Voting
Rights
. The Charitable Trustee shall have all voting rights and rights to
dividends or other distributions with respect to Shares held in the Charitable
Trust, which rights shall be exercised for the exclusive benefit of the
Charitable Beneficiary. Any dividend or other distribution paid prior to the
discovery by the Trust that Shares have been transferred to the Charitable
Trustee shall be paid with respect to such Shares to the Charitable Trustee upon
demand and any dividend or other distribution authorized but unpaid shall be
paid when due to the Charitable Trustee. Any dividends or distributions so paid
over to the Charitable Trustee shall be held in trust for the Charitable
Beneficiary. The Prohibited Owner shall have no voting rights with respect to
Shares held in the Charitable Trust and, subject to Maryland law, effective as
of the date that Shares have been transferred to the Charitable Trustee, the
Charitable Trustee shall have the authority (at the Charitable Trustee’s sole
discretion) (i) to rescind as void any vote cast by a Prohibited Owner
prior to the discovery by the Trust that Shares have been transferred to the
Charitable Trustee and (ii) to recast such vote in accordance with the desires
of the Charitable Trustee acting for the benefit of the Charitable Beneficiary;
provided
,
however
, that if the
Trust has already taken irreversible action, then the Charitable Trustee shall
not have the power to rescind and recast such vote. Notwithstanding the
provisions of this Article VII, until the Trust has received notification
that Shares have been transferred into a Charitable Trust, the Trust shall be
entitled to rely on its share transfer and other shareholder records for
purposes of preparing lists of shareholders entitled to vote at meetings,
determining the validity and authority of proxies and otherwise conducting votes
of shareholders.
Section 7.3.4
Rights Upon
Liquidation
. Upon any voluntary or involuntary liquidation, dissolution
or winding up of or any distribution of the assets of the Trust, the Charitable
Trustee shall be entitled to receive, ratably with each other holder of Shares
of the class or series of Shares that is held in the Charitable Trust, that
portion of the assets of the Trust available for distribution to the holders of
such class or series (determined based upon the ratio that the number of Shares
or such class or series of Shares held by the Charitable Trustee bears to the
total number of Shares of such class or series of Shares then outstanding). The
Charitable Trustee shall distribute any such assets received in respect of the
Shares held in the Charitable Trust in any liquidation, dissolution or winding
up of, or distribution of the assets of the Trust, in accordance with
Section 7.3.5.
Section 7.3.5
Sale of Shares by Charitable
Trustee
. Within 20 days of receiving notice from the Trust that Shares
have been transferred to the Charitable Trust, the Charitable Trustee of the
Charitable Trust shall sell the Shares held in the Charitable Trust to a person,
designated by the Charitable Trustee, whose ownership of the Shares will not
violate the ownership limitations set forth in Section 7.2.1(a). Upon such
sale, the interest of the Charitable Beneficiary in the Shares sold shall
terminate and the Charitable Trustee shall distribute the net proceeds of the
sale to the Prohibited Owner and to the Charitable Beneficiary as provided in
this Section 7.3.5. The Prohibited Owner shall receive the lesser of
(1) the price paid by the Prohibited Owner for the Shares or, if the
Prohibited Owner did not give value for the Shares in connection with the event
causing the Shares to be held in the Charitable Trust (
e.g.
, in the case of a gift,
devise or other such transaction), the Market Price of the Shares on the day of
the event causing the Shares to be held in the Charitable Trust and (2) the
price per share received by the Charitable Trustee from the sale or other
disposition of the Shares held in the Charitable Trust. Any net sales proceeds
in excess of the amount payable to the Prohibited Owner shall be immediately
paid to the Charitable Beneficiary. If, prior to the discovery by the Trust that
Shares have been transferred to the Charitable Trustee, such Shares are sold by
a Prohibited Owner, then (i) such Shares shall be deemed to have been sold
on behalf of the Charitable Trust and (ii) to the extent that the
Prohibited Owner received an amount for such Shares that exceeds the amount that
such Prohibited Owner was entitled to receive pursuant to this
Section 7.3.5, such excess shall be paid to the Charitable Trustee upon
demand. The Charitable Trustee shall have the right and power (but not the
obligation) to offer any Share held in trust for sale to the Trust on such terms
and conditions as the Charitable Trustee shall deem appropriate.
Section 7.3.6
Purchase Right in Shares
Transferred to the Charitable Trustee
. Shares transferred to the
Charitable Trustee shall be deemed to have been offered for sale to the Trust,
or its designee, at a price per share equal to the lesser of (i) the price
per share in the transaction that resulted in such transfer to the Charitable
Trust (or, in the case of a devise or gift, the Market Price at the time of such
devise or gift) and (ii) the Market Price on the date the Trust, or its
designee, accepts such offer. The Trust shall have the right to accept such
offer until the Charitable Trustee has sold the Shares held in the Charitable
Trust pursuant to Section 7.3.5. Upon such a sale to the Trust, the
interest of the Charitable Beneficiary in the Shares sold shall terminate and
the Charitable Trustee shall distribute the net proceeds of the sale to the
Prohibited Owner.
Section 7.3.7
Designation of Charitable
Beneficiaries
. By written notice to the Charitable Trustee, the Trust
shall designate one or more nonprofit organizations to be the Charitable
Beneficiary of the interest in the Charitable Trust such that (i) Shares
held in the Charitable Trust would not violate the restrictions set forth in
Section 7.2.1(a) in the hands of such Charitable Beneficiary and
(ii) each such organization must be described in Sections 501(c)(3),
170(b)(1)(A) or 170(c)(2) of the Code.
Section 7.4
Transactions on
Exchange
. Nothing in this Article VII shall preclude the settlement
of any transaction entered into through the facilities of the NYSE or any other
national securities exchange or automated inter-dealer quotation system. The
fact that the settlement of any transaction takes place shall not negate the
effect of any other provision of this Article VII and any transferee in
such a transaction shall be subject to all of the provisions and limitations set
forth in this Article VII.
Section 7.5
Enforcement
. The
Trust is authorized specifically to seek equitable relief, including injunctive
relief, to enforce the provisions of this Article VII.
Section 7.6
Non-Waiver
. No delay
or failure on the part of the Trust or the Board of Trustees in exercising any
right hereunder shall operate as a waiver of any right of the Trust or the Board
of Trustees, as the case may be, except to the extent specifically waived in
writing.
ARTICLE
VIII
SHAREHOLDERS
Section 8.1
Meetings
. There shall
be an annual meeting of the shareholders, to be held on proper notice at such
time (after the delivery of the annual report) and convenient location as shall
be determined by or in the manner prescribed in the Bylaws, for the election of
the Trustees, and for the transaction of any other business within the powers of
the Trust. Except as otherwise provided in the Declaration of Trust, special
meetings of shareholders may be called in the manner provided in the Bylaws. If
there are no Trustees, the officers of the Trust shall promptly call a special
meeting of the shareholders entitled to vote for the election of successor
Trustees. Any meeting may be adjourned and reconvened as the Trustees determine
or as provided in the Bylaws.
Section 8.2
Voting Rights
.
Subject to the provisions of any class or series of Shares then outstanding or
as otherwise required by law, the shareholders shall be entitled to vote only on
the following matters: (a) election of Trustees as provided in Section 5.2
and the removal of Trustees as provided in Section 5.3; (b) amendment
of the Declaration of Trust as provided in Article X; (c) termination
of the Trust as provided in Section 12.2; (d) merger or consolidation of
the Trust, or the sale or disposition of substantially all of the property of
the Trust, as provided in Article XI; (e) such other matters with respect
to which the Board of Trustees has adopted a resolution declaring that a
proposed action is advisable and directing that the matter be submitted to the
shareholders for approval or ratification; and (f) such other matters as may be
properly brought before a meeting by a shareholder pursuant to the Bylaws.
Except with respect to the matters described in clauses (a) through (e) above,
no action taken by the shareholders at any meeting shall in any way bind the
Board of Trustees.
Section 8.3
Preemptive and Appraisal
Rights
. Except as may be provided by the Board of Trustees in setting the
terms of classified or reclassified Shares pursuant to Section 6.4, or as may
otherwise be provided by contract approved by the Board of Trustees, no holder
of Shares shall, as such holder, have any preemptive right to purchase or
subscribe for any additional Shares or any other security of the Trust which it
may issue or sell. Holders of Shares shall not be entitled to
exercise any rights of an objecting shareholder provided for under the Maryland
REIT Law and Title 3, Subtitle 2 of the MGCL or any successor statute unless the
Board of Trustees, upon the affirmative vote of a majority of the Board of
Trustees, shall determine that such rights apply, with respect to all or any
classes or series of Shares, to one or more transactions occurring after the
date of such determination in connection with which holders of such Shares would
otherwise be entitled to exercise such rights.
Section
8.4
Extraordinary
Actions
. Except as specifically provided in Section 5.3
(relating to removal of Trustees) and in Article X, notwithstanding any
provision of law permitting or requiring any action to be taken or authorized by
the affirmative vote of the holders of 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 8.5
Board Approval
. The
submission of any action of the Trust to the shareholders for their
consideration shall first be recommended, approved or declared advisable by the
Board of Trustees.
Section 8.6
Action by Shareholders
without a Meeting
. No action required or permitted to be taken by the
shareholders may be taken without a meeting by less than unanimous written or
electronic consent of the shareholders of the Trust.
ARTICLE
IX
LIABILITY
LIMITATION, INDEMNIFICATION
AND TRANSACTIONS WITH THE
TRUST
Section 9.1
Limitation of Shareholder
Liability
. No shareholder shall be liable for any debt, claim, demand,
judgment or obligation of any kind of, against or with respect to the Trust by
reason of his being a shareholder, nor shall any shareholder be subject to any
personal liability whatsoever, in tort, contract or otherwise, to any person in
connection with the property or the affairs of the Trust by reason of his being
a shareholder.
Section 9.2
Limitation of Trustee and
Officer Liability
. To the maximum extent that Maryland law in effect from
time to time permits limitation of the liability of trustees and officers of a
Maryland real estate investment trust or directors or officers of a Maryland
corporation, no Trustee or officer of the Trust shall be liable to the Trust or
to any shareholder for money damages. Neither the amendment nor repeal of this
Section 9.2, nor the adoption or amendment of any other provision of the
Declaration of Trust inconsistent with this Section 9.2, shall apply to or
affect in any respect the applicability of the preceding sentence with respect
to any act or failure to act that occurred prior to such amendment, repeal or
adoption. No Trustee or officer of the Trust shall be liable to the
Trust or to any shareholder for money damages except to the extent that
(a) the Trustee or officer actually received an improper benefit or profit
in money, property or services, for the amount of the benefit or profit in
money, property, or services actually received; or (b) a judgment or other
final adjudication adverse to the Trustee or officer is entered in a proceeding
based on a finding in the proceeding that the Trustee’s or officer’s action or
failure to act was the result of active and deliberate dishonesty and was
material to the cause of action adjudicated in the proceeding.
Section 9.3
Indemnification
. The
Trust 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 shareholder, Trustee or
officer of the Trust and (b) any individual who, while a Trustee or officer of
the Trust and at the request of the Trust, serves or has served as a director,
officer, partner, trustee, employee or agent of another real estate investment
trust, corporation, partnership, joint venture, trust, employee benefit plan or
any other enterprise) from and against any claim or liability to which he or she
may become subject by reason of his or her status as a present or former
shareholder, Trustee or officer of the Trust or service in any such capacity.
The Trust shall have the power, with the approval of its Board of Trustees, to
provide such indemnification or advancement of expenses to any present or former
Trustee or officer who served a predecessor of the Trust, and to any employee or
agent of the Trust or a predecessor of the Trust. Any amendment of this section
shall be prospective only and shall not affect the applicability of this section
with respect to any act or failure to act that occurred prior to such
amendment.
Section 9.4
Transactions Between the
Trust and its Trustees, Officers, Employees and Agents
. Subject to any
express restrictions in the Declaration of Trust or adopted by the Trustees in
the Bylaws or by resolution, the Trust may enter into any contract or
transaction of any kind with any person, including any Trustee, officer,
employee or agent of the Trust or any person affiliated with a Trustee, officer,
employee or agent of the Trust, whether or not any of them has a financial
interest in such transaction, provided, however, that in the case of any
contract or transaction in which any Trustee, officer, employee or agent of the
Trust (or any person affiliated with such person) has a material financial
interest in such transaction, then: (a) the fact of the interest shall be
disclosed or known to: (i) the Board of Trustees, and the Board of Trustees
shall approve or ratify the contract or transaction by the affirmative vote of a
majority of disinterested Trustees, even if the disinterested Trustees
constitute less than a quorum, or (ii) the shareholders entitled to vote,
and the contract or transaction shall be authorized, approved or ratified by a
majority of the votes cast by the shareholders entitled to vote other than the
votes of shares owned of record or beneficially by the interested party; or
(b) the contract or transaction is fair and reasonable to the
Trust.
Section 9.5
Express Exculpatory Clauses
in Instruments
. The Board of Trustees may cause to be inserted in every
written agreement, undertaking or obligation made or issued on behalf of the
Trust, an appropriate provision to the effect that neither the shareholders nor
the Trustees, officers, employees or agents of the Trust shall be liable under
any written instrument creating an obligation of the Trust, and all Persons
shall look solely to the property of the Trust for the payment of any claim
under or for the performance of that instrument. The omission of the foregoing
exculpatory language from any instrument shall not affect the validity or
enforceability of such instrument and shall not render any shareholder, Trustee,
officer, employee or agent liable thereunder to any third party nor shall the
Trustees or any officer, employee or agent of the Trust be liable to anyone for
such omission.
ARTICLE
X
AMENDMENTS
Section 10.1
General
. The Trust
reserves the right from time to time to make any amendment to the Declaration of
Trust, now or hereafter authorized by law, including, without limitation, any
amendment altering the terms or contract rights, as expressly set forth in the
Declaration of Trust, of any Shares. All rights and powers conferred by the
Declaration of Trust on shareholders, Trustees and officers are granted subject
to this reservation. The Trust shall file Articles of Amendment as required by
Maryland law. All references to the Declaration of Trust shall include all
amendments thereto.
Section 10.2
By Trustees
. The
Trustees may amend the Declaration of Trust from time to time, in the manner
provided by the Maryland REIT Law, without any action by the shareholders:
(i) to qualify as a real estate investment trust under the Code or under
the Maryland REIT Law, (ii) in any respect in which the charter of a
Maryland corporation may be amended without stockholder approval, and
(iii) as otherwise provided in the Declaration of Trust.
Section 10.3
By Shareholders
.
Except as otherwise provided in this Declaration of Trust, any amendment to the
Declaration of Trust shall be valid only after the Board of Trustees has adopted
a resolution setting forth the proposed amendment and declaring such amendment
advisable, and such amendment has been approved by the affirmative vote of the
holders of not less than a majority of the shares then outstanding and entitled
to vote thereon. However, any amendment to Section 5.3 or to this
sentence of the Declaration of Trust shall be valid only if declared advisable
by the Board of Trustees and approved by the affirmative vote of holders of
Shares entitled to cast not less than two-thirds (2/3) of all the votes entitled
to be cast on the matter.
Section 10.4
Bylaws
. The Board of
Trustees shall have the exclusive power to adopt, alter or repeal any provision
of the Bylaws and to make new Bylaws.
ARTICLE
XI
MERGER, CONSOLIDATION OR SALE OF
TRUST PROPERTY
Subject to the provisions of any class
or series of Shares at the time outstanding, the Trust may (a) merge the Trust
with or into another entity or merge another entity into the Trust, (b)
consolidate the Trust with one or more other entities into a new entity or (c)
sell, lease, exchange or otherwise transfer all or substantially all of the
property of the Trust. The Board of Trustees proposing such action shall adopt a
resolution that declares the proposed transaction is advisable on substantially
the terms and conditions set forth or referred to in the resolutions, and,
except as otherwise permitted by Maryland law, direct that the proposed
transaction be submitted for consideration by the shareholders. If submitted for
consideration by the shareholders, the transaction must be approved by the
affirmative vote of holders of Shares entitled to cast not less than a majority
of all the votes entitled to be cast on the matter.
ARTICLE
XII
DURATION
AND TERMINATION OF TRUST
Section 12.1
Duration
. The Trust
shall continue perpetually unless terminated pursuant to Section 12.2 or
pursuant to any applicable provision of the Maryland REIT Law.
Section 12.2
Termination
.
(a) Subject
to the provisions of any class or series of Shares at the time outstanding,
adoption of a resolution by the Board of Trustees declaring that the termination
of the Trust is advisable and submission of the matter by the Board of Trustees
to the shareholders for approval, the Trust may be terminated at any meeting of
shareholders, by the affirmative vote of holders of Shares entitled to cast not
less than a majority of all the votes entitled to be cast on the matter. Upon
the termination of the Trust:
(i) The
Trust shall carry on no business except for the purpose of winding up its
affairs.
(ii) The
Trustees shall proceed to wind up the affairs of the Trust and all of the powers
of the Trustees under the Declaration of Trust shall continue, including the
powers to fulfill or discharge the Trust’s contracts, collect its assets, sell,
convey, assign, exchange, transfer or otherwise dispose of all or any part of
the remaining property of the Trust to one or more persons at public or private
sale for consideration which may consist in whole or in part of cash, securities
or other property of any kind, discharge or pay its liabilities and do all other
acts appropriate to liquidate its business. The Trustees may appoint any officer
of the Trust or any other person to supervise the winding up of the affairs of
the Trust and delegate to such officer or such person any or all powers of the
Trustees in this regard.
(iii) After
paying or adequately providing for the payment of all liabilities, and upon
receipt of such releases, indemnities and agreements as they deem necessary for
their protection, the Trust may distribute the remaining property of the Trust
among the shareholders so that after payment in full or the setting apart for
payment of such preferential amounts, if any, to which the holders of any Shares
at the time outstanding shall be entitled, the remaining property of the Trust
shall, subject to any participating or similar rights of Shares at the time
outstanding, be distributed ratably among the holders of Common Shares at the
time outstanding.
(b) After
termination of the Trust, the liquidation of its business and the distribution
to the shareholders as herein provided, a majority of the Trustees shall execute
and file with the Trust’s records a document certifying that the Trust has been
duly terminated, and the Trustees shall be discharged from all liabilities and
duties hereunder, and the rights and interests of all shareholders shall
cease.
ARTICLE
XIII
MISCELLANEOUS
Section 13.1
Governing Law
. The
Declaration of Trust is executed by the undersigned Trustees and delivered in
the State of Maryland with reference to the laws thereof, and the rights of all
parties and the validity, construction and effect of every provision hereof
shall be subject to and construed in accordance with the laws of the State of
Maryland without regard to conflicts of laws provisions thereof.
Section 13.2
Reliance by Third
Parties
. Any certificate shall be final and conclusive as to any person
dealing with the Trust if executed by the Secretary or an Assistant Secretary of
the Trust or a Trustee, and if certifying to: (a) the number or identity of
Trustees, officers of the Trust or shareholders; (b) the due authorization
of the execution of any document; (c) the action or vote taken, and the
existence of a quorum, at a meeting of the Board of Trustees or shareholders;
(d) a copy of the Declaration of Trust or of the Bylaws as a true and
complete copy as then in force; (e) an amendment to the Declaration of
Trust; (f) the termination of the Trust; or (g) the existence of any
fact relating to the affairs of the Trust. No purchaser, lender, transfer agent
or other person shall be bound to make any inquiry concerning the validity of
any transaction purporting to be made by the Trust on its behalf or by any
officer, employee or agent of the Trust.
Section 13.3
Severability
.
(a) The
provisions of the Declaration of Trust are severable, and if the Board of
Trustees shall determine, with the advice of counsel, that any one or more of
such provisions (the “Conflicting Provisions”) are in conflict with the Code,
the Maryland REIT Law or other applicable federal or state laws, the Conflicting
Provisions, to the extent of the conflict, shall be deemed never to have
constituted a part of the Declaration of Trust, even without any amendment of
the Declaration of Trust pursuant to Article X and without affecting or
impairing any of the remaining provisions of the Declaration of Trust or
rendering invalid or improper any action taken or omitted prior to such
determination. No Trustee shall be liable for making or failing to make such a
determination. In the event of any such determination by the Board of Trustees,
the Board shall amend the Declaration of Trust in the manner provided in
Section 10.2.
(b) If
any provision of the Declaration of Trust shall be held invalid or unenforceable
in any jurisdiction, such holding shall apply only to the extent of any such
invalidity or unenforceability and shall not in any manner affect, impair or
render invalid or unenforceable such provision in any other jurisdiction or any
other provision of the Declaration of Trust in any jurisdiction.
Section 13.4
Construction
. In the
Declaration of Trust, unless the context otherwise requires, words used in the
singular or in the plural include both the plural and singular and words
denoting any gender include all genders. The title and headings of different
parts are inserted for convenience and shall not affect the meaning,
construction or effect of the Declaration of Trust. In defining or interpreting
the powers and duties of the Trust and its Trustees and officers, reference may
be made by the Trustees or officers, to the extent appropriate and not
inconsistent with the Code or the Maryland REIT Law, to Titles 1 through 3 of
the Corporations and Associations Article of the Annotated Code of Maryland. In
furtherance and not in limitation of the foregoing, in accordance with the
provisions of Title 3, Subtitles 6 and 7, of the Corporations and Associations
Article of the Annotated Code of Maryland, the Trust shall be included within
the definition of “corporation” for purposes of such provisions.
Section 13.5
Recordation
. The
Declaration of Trust and any articles of amendment hereto or articles
supplementary hereto shall be filed for record with the SDAT and may also be
filed or recorded in such other places as the Trustees deem appropriate, but
failure to file for record the Declaration of Trust or any articles of amendment
hereto in any office other than in the State of Maryland shall not affect or
impair the validity or effectiveness of the Declaration of Trust or any
amendment hereto. A restated Declaration of Trust shall, upon filing, be
conclusive evidence of all amendments contained therein and may thereafter be
referred to in lieu of the original Declaration of Trust and the various
articles of amendments thereto.
THIRD: The
undersigned acknowledges these Articles of Amendment and Restatement to be the
trust act of the Trust and as to all matters or facts required to be verified
under oath, the undersigned acknowledges that to the best of his knowledge,
information and belief, these matters and facts are true in all material
respects and that this statement is made under the penalties for
perjury.
IN WITNESS WHEREOF
, the Trust
has caused these Articles of Amendment and Restatement to be signed in its name
and on its behalf by its President and attested to by its Secretary on
this ______ day of ____________, 2008.
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ATTEST:
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WHITESTONE
REIT
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(SEAL)
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Name:
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Name:
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Title: Secretary
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Title: President
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15
Exhibit
10.1
WHITESTONE
REIT
2008
LONG-TERM EQUITY INCENTIVE OWNERSHIP PLAN
TABLE
OF CONTENTS
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Tab
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Section
1.
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Purpose.
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1
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|
Section
2.
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Definitions.
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1
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Section
3.
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Administration.
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5
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Section
4.
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Common
Shares Available For Awards.
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6
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Section
5.
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Eligibility.
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7
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Section
6.
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Stock
Options And Stock Appreciation Rights.
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7
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Section
7.
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Restricted
Common Shares And Restricted Common Share Units.
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9
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Section
8.
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Performance
Awards.
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11
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Section
9.
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Other
Share-Based Awards.
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11
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Section
10.
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Non-Employee
Trustee Awards.
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11
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Section
11.
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Provisions
Applicable To Covered Officers And Performance Awards.
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12
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Section
12.
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Termination
Of Employment.
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13
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Section
13.
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Change
In Control.
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14
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Section
14.
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Amendment
And Termination.
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14
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Section
15.
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General
Provisions.
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14
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Section
16.
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Term
Of The Plan.
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17
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WHITESTONE
REIT
2008
LONG-TERM EQUITY INCENTIVE OWNERSHIP PLAN
This plan shall be known as the
“Whitestone REIT 2008 Long-Term Equity Incentive Ownership Plan” (the “
Plan
”). The
purpose of the Plan is to promote the interests of Whitestone REIT, a Maryland
real estate investment trust (the “Company”), its Subsidiaries and its
shareholders by (i) attracting and retaining key officers, employees, and
trustees of, and consultants to, the Company and its Subsidiaries and
Affiliates; (ii) motivating such individuals by means of
performance-related incentives to achieve long-range performance goals; (iii)
enabling such individuals to participate in the long-term growth and financial
success of the Company; (iv) encouraging ownership of equity in the Company
by such individuals; and (v) linking their compensation to the long-term
interests of the Company and its shareholders. With respect to any
awards granted under the Plan that are intended to comply with the requirements
of “performance-based compensation” under Section 162(m) of the Code, the
Plan shall be interpreted in a manner consistent with such
requirements.
As used in the Plan, the following
terms shall have the meanings set forth below:
(a)
“
Affiliate
”
shall mean (i) any
entity that, directly or indirectly, is controlled by the Company, (ii) any
entity in which the Company has a significant equity interest, (iii) an
affiliate of the Company, as defined in Rule 12b-2 promulgated under
Section 12 of the Exchange Act, and (iv) any entity in which the
Company has at least twenty percent (20%) of the combined voting power of the
entity’s outstanding voting securities, in each case as designated by the Board
as being a participating employer in the Plan.
(b)
“
Award
”
shall mean any Option, Stock
Appreciation Right, Restricted Common Share Award, Restricted Common Share Unit,
Restricted Unit Award, Performance Award, Other Share-Based Award or other award
granted under the Plan, whether singly, in combination or in tandem, to a
Participant by the Committee (or the Board) pursuant to such terms, conditions,
restrictions and/or limitations, if any, as the Committee (or the Board) may
establish or which are required by applicable legal requirements.
(c)
“
Award
Agreement
”
shall
mean any written agreement, contract or other instrument or document evidencing
any Award, which may, but need not, be executed or acknowledged by a
Participant.
(d)
“
Board
”
shall mean the Board of
Trustees
of the
Company.
(e)
“
Change in
Control
”
shall
mean, unless otherwise defined in the applicable Award Agreement, any of the
following events:
(i)
any
person or entity, including a “group” as defined in Section 13(d)(3) of the
Exchange Act, other than the Company or a wholly-owned subsidiary thereof or any
employee benefit plan of the Company or any of its Subsidiaries, becomes the
beneficial owner of the Company’s securities having 35% or more of the combined
voting power of the then outstanding securities of the Company that may be cast
for the election of trustees of the Company (other than as a result of an
issuance of securities initiated by the Company in the ordinary course of
business);
(ii)
as the
result of, or in connection with, any cash tender or exchange offer, merger or
other business combination or contested election, or any combination of the
foregoing transactions, less than a majority of the combined voting power of the
then outstanding securities of the Company or any successor company or entity
entitled to vote generally in the election of the trustees of the Company or
such other corporation or entity after such transaction are held in the
aggregate by the holders of the Company’s securities entitled to vote generally
in the election of trustees of the Company immediately prior to such
transaction;
(iii)
during any
period of two (2) consecutive years, individuals who at the beginning of any
such period constitute the Board cease for any reason to constitute at least a
majority thereof, unless the election, or the nomination for election by the
Company’s shareholders, of each Trustee of the Company first elected during such
period was approved by a vote of at least two-thirds (2/3rds) of the Trustees of
the Company then still in office who were (a) Trustees of the Company at the
beginning of any such period, and (b) not initially (1) appointed or elected to
office as result of either an actual or threatened election and/or proxy contest
by or on behalf of a Person other than the Board, or (2) designated by a Person
who has entered into an agreement with the Company to effect a transaction
described in (i) or (ii) above or (iv) or (v) below;
(iv)
a complete
liquidation or dissolution of the Company;
(v)
the
sale or other disposition of all or substantially all of the assets of the
Company to any Person (other than a transfer to a Subsidiary); or
(vi)
with respect
to Award Agreements for the chief executive officer, the chief operating officer
and the chief financial officer only, a termination of the chief executive
officer without cause, excluding non-appealable determinations by a court of law
for fraud, gross negligence, or willful neglect, which would be considered
termination for cause.
(f)
“
Code
”
shall mean the Internal
Revenue Code of 1986, as amended from time to time.
(g)
“
Committee
”
shall mean a committee of
the Board composed of not less than two Non-Employee Trustees, at least two of
whom shall be (i) a “non-employee director” for purposes of Section 16 of the
Exchange Act and Rule 16b-3 thereunder, (ii) an “outside director” for
purposes of Section 162(m) and the regulations promulgated under the Code,
and each of whom shall be “independent” within the meaning of the listing
standards of the Nasdaq Stock Market. To the extent that compensation
realized in respect of Awards is intended to be “performance based” under
Section 162(m) of the Code and the Committee is not comprised solely of
individuals who are “outside directors” within the meaning of
Section 162(m) of the Code, the Committee may from time to time delegate
some or all of its functions under the Plan to a committee or subcommittee
composed of members that meet the relevant requirements.
(h)
“
Common
Shares
”
or
“
Shares
”
shall mean the common shares
of beneficial interest, par value $0.001 per share, of the Company.
(i)
“
Consultant
”
shall mean any consultant to
the Company or its Subsidiaries or Affiliates.
(j)
“
Covered
Officer
”
shall
mean at any date (i) any individual who, with respect to the previous
taxable year of the Company, was a “covered employee” of the Company within the
meaning of Section 162(m); provided, however, that the term “Covered
Officer” shall not include any such individual who is designated by the
Committee, in its discretion, at the time of any Award or at any subsequent
time, as reasonably expected not to be such a “covered employee” with respect to
the current taxable year of the Company and (ii) any individual who is
designated by the Committee, in its discretion, at the time of any Award or at
any subsequent time, as reasonably expected to be such a “covered employee” with
respect to the current taxable year of the Company or with respect to the
taxable year of the Company in which any applicable Award will be paid or
vested.
(k)
“
Disability
”
shall mean, unless otherwise
defined in the applicable Award Agreement, a disability that would qualify as a
total and permanent disability under the Company’s then current long-term
disability plan.
(l)
“
Employee
”
shall mean a current or
prospective officer or employee of the Company or of any Subsidiary or
Affiliate.
(m)
“
Exchange
Act
”
shall mean
the Securities Exchange Act of 1934, as amended from time to time.
(n)
“
Fair Market
Value
”
with
respect to the Common Shares, shall mean, for purposes of a grant of an Award as
of any date, (i) the average of the closing sales prices of the Common
Shares on all national securities exchanges on which the Common Shares may at
the time be listed, or any other such exchange on which the Common Shares are
traded, on such date, or in the absence of reported sales on such date, the
average closing sales prices on the immediately preceding date on which sales
were reported, (ii) if on any day the Common Shares shall not be quoted on a
national securities exchange, the average of the high and low bid and asked
prices on such day in the over-the-counter market as reported by National
Quotation Bureau Incorporated, or any similar successor organization, or
(iii) in the event there is no public market or over-the-counter market for
the Common Shares on such date, the fair market value as determined, in good
faith, by the Board or Committee in its sole discretion, and for purposes of a
sale of a Common Share as of any date, the actual sales price on that
date.
(o)
“
Incentive Stock
Option
”
shall
mean an option to purchase Common Shares from the Company that is granted under
Section 6
of the Plan and that is intended to meet the requirements of Section 422 of
the Code or any successor provision thereto.
(p)
“
Non-Qualified
Stock Option
”
shall mean an option to purchase Common Shares from the Company that is granted
under
Sections 6
or
10
of the Plan
and is not intended to be an Incentive Stock Option.
(q)
“
Non-Employee
Trustee
”
shall
mean a member of the Board who is not an officer or employee of the Company or
any Subsidiary or Affiliate.
(r)
“
Operating
Partnership
” means Whitestone REIT Operating Partnership,
L.P.
(s)
“
Option
”
shall mean an Incentive
Stock Option or a Non-Qualified Stock Option.
(t)
“
Option
Price
”
shall mean
the purchase price payable to purchase one Common Share upon the exercise of an
Option.
(u)
“
Other Share-Based
Award
”
shall mean
any Award granted under
Sections 9
or
10
of the
Plan.
(v)
“
Participant
”
shall mean any Employee,
Trustee, Consultant or other person who receives an Award under the
Plan.
(w)
“
Performance
Award
”
shall mean
any Award granted under
Section 8
of the
Plan.
(x)
“
Person”
shall mean any individual, corporation, partnership, limited liability company,
association, joint-stock company, trust, unincorporated organization, government
or political subdivision thereof or other entity.
(y)
“
Restricted Common
Share
”
shall mean
any Common Share granted under
Sections 7
or
10
of the
Plan.
(z)
“
Restricted Common
Share Unit
”
shall
mean any unit granted under
Sections 7
or
10
of the
Plan.
(aa)
“Restricted Unit
Award”
means an award of units in the Operating Partnership granted to a
Participant under this Plan whereby the Participant has immediate rights of
ownership in the units underlying the award, but such units are subject to
restrictions in accordance with the terms and provisions of this Plan and the
limited partnership agreement of the Operating Partnership, as amended, and may
be subject to additional restrictions in accordance with the terms of an Award
Agreement pertaining to the Award, including provisions causing the units to be
subject to forfeiture by the individual until the earlier of (a) the time such
restrictions lapse or are satisfied, or (b) the time such shares are forfeited,
pursuant to the terms and provisions of any Award Agreement pertaining to the
Award.
(bb)
“
Retirement
”
shall mean, unless otherwise
defined in the applicable Award Agreement, retirement of a Participant from the
employ or service of the Company or any of its Subsidiaries or Affiliates in
accordance with the terms of the applicable Company retirement plan or, if a
Participant is not covered by any such plan, retirement on or after such
Participant’s 65th birthday.
(cc)
“
SEC
”
shall mean the Securities
and Exchange Commission or any successor thereto.
(dd)
“
Section 16
”
shall mean Section 16
of the Exchange Act and the rules promulgated thereunder and any successor
provision thereto as in effect from time to time.
(ee)
“
Section 162(m)”
shall mean Section 162(m) of the Code and the regulations promulgated
thereunder and any successor provision thereto as in effect from time to
time.
(ff)
“
Stock
Appreciation Right
”
or
“
SAR
”
shall mean a stock
appreciation right granted under
Sections 6
or
10
of the Plan
that entitles the holder to receive, with respect to each Common Share
encompassed by the exercise of such SAR, the amount determined by the Committee
and specified in an Award Agreement. In the absence of such a
determination, the holder shall be entitled to receive, with respect to each
Common Share encompassed by the exercise of such SAR, the excess of the Fair
Market Value
on
the date of exercise over the Fair Market Value on the date of
grant.
(gg)
“
Subsidiary
”
shall mean any Person (other
than the Company) of which a majority of its voting power or its equity
securities or equity interest is owned directly or indirectly by the
Company.
(hh)
“
Substitute
Awards
”
shall
mean Awards granted solely in assumption of, or in substitution for, outstanding
awards previously granted by a company acquired by the Company or with which the
Company combines.
(ii)
“
Trustee
”
shall mean a member of the
Board.
|
Section
3.
|
Administration.
|
3.1
Authority of
Committee.
The Plan shall be administered by the Committee,
which shall be appointed by and serve at the pleasure of the Board; provided,
however, with respect to Awards to Non-Employee Trustees, all references in the
Plan to the Committee shall be deemed to be references to the
Board. Subject to the terms of the Plan and applicable law, and in
addition to other express powers and authorizations conferred on the Committee
by the Plan, the Committee shall have full power and authority in its discretion
to: (i) designate Participants; (ii) determine the type or types of Awards
to be granted to a Participant; (iii) determine the number of Common Shares
to be covered by, or with respect to which payments, rights or other matters are
to be calculated in connection with Awards; (iv) determine the timing,
terms, and conditions of any Award; (v) accelerate the time at which all or
any part of an Award may be settled or exercised; (vi) determine whether,
to what extent, and under what circumstances, Awards may be settled or exercised
in cash, Common Shares, other securities, other Awards or other property, or
canceled, forfeited or suspended and the method or methods by which Awards may
be settled, exercised, canceled, forfeited or suspended; (vii) determine
whether, to what extent, and under what circumstances cash, Common Shares, other
securities, other Awards, other property, and other amounts payable with respect
to an Award shall be deferred either automatically or at the election of the
holder thereof or of the Committee; (viii) interpret and administer the
Plan and any instrument or agreement relating to, or Award made under, the Plan;
(ix) except to the extent prohibited by
Section 6.2
,
amend or modify the terms of any Award at or after grant with the consent of the
holder of the Award; (x) establish, amend, suspend or waive such rules and
regulations and appoint such agents as it shall deem appropriate for the proper
administration of the Plan; and (xi) make any other determination and take
any other action that the Committee deems necessary or desirable for the
administration of the Plan, subject to the exclusive authority of the Board
under
Section 14
hereunder to amend or terminate the Plan. The exercise of an Option
or receipt of an Award shall be effective only if an Award Agreement shall have
been duly executed and delivered on behalf of the Company following the grant of
the Option or other Award.
3.2
Committee Discretion
Binding.
Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions under or with
respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time and shall be final, conclusive, and binding
upon all Persons, including the Company, any Subsidiary or Affiliate, any
Participant and any holder or beneficiary of any Award.
3.3
Delegation.
Subject
to the terms of the Plan, the Committee’s charter and applicable law, the
Committee may delegate to one or more officers or managers of the Company or of
any Subsidiary or Affiliate, or to a Committee of such officers or managers, the
authority, subject to such terms and limitations as the Committee shall
determine, to grant Awards to or to cancel, modify or waive rights with respect
to, or to alter, discontinue, suspend or terminate Awards held by Participants
who are not officers or trustees of the Company for purposes of Section 16
of the Exchange Act or who are otherwise not subject to such
section.
|
Section
4.
|
Common
Shares Available For Awards.
|
4.1
Common Shares
Available
. Subject to the provisions of
Section 4.2
hereof,
the maximum aggregate number of Common Shares that may be issued to Participants
and their beneficiaries under the Plan shall be 2,063,885 Common Shares as of
the Effective Date. The maximum aggregate number of Common Shares
that may be issued under the Plan will be increased upon each issuance of Common
Shares by the Company (including issuances pursuant to the Plan) so that at any
time the maximum number of shares that may be issued under the Plan shall equal
12.5% of the aggregate number of Common Shares and units of the Operating
Partnership issued and outstanding (other than treasury shares and/or units
issued to or held by the Company). Notwithstanding the foregoing and
subject to adjustment as provided in
Section 4.2
hereof,
(i) no Participant may receive Options or SARs under the Plan in any calendar
year that, taken together, relate to more than 500,000 Common Shares and (ii)
the maximum number of Common Shares that may be issued by Options intended to be
Incentive Stock Options shall be 2,063,885 Common Shares. If, after the
Effective Date of the Plan, any Common Shares covered by an Award granted under
this Plan, or to which such an Award relates, are forfeited, or if such an Award
otherwise terminates, expires unexercised or is canceled, then the Common Shares
covered by such Award, or to which such Award relates, or the number of Common
Shares otherwise counted against the aggregate number of Common Shares with
respect to which Awards may be granted, to the extent of any such forfeiture,
termination, expiration or cancellation, shall again become Common Shares with
respect to which Awards may be granted in accordance with the formula described
above. In addition, Common Shares that are canceled, tendered or
withheld in payment of all or part of the Option Price or exercise price of an
Award or in satisfaction of withholding tax obligations, and Common Shares that
are reacquired with cash tendered in payment of the Option Price or exercise
price of an Award, will be included in or added to the number of Common Shares
available for grant under the Plan.
4.2
Adjustments.
In
the event that any unusual or non-recurring transactions, including an unusual
or non-recurring dividend or other distribution (whether in the form of an
extraordinary cash dividend, dividend of Common Shares, other securities or
other property), recapitalization, stock split, reverse stock split,
reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of Common Shares or other securities of the Company,
issuance of warrants or other rights to purchase Common Shares or other
securities of the Company, or other similar corporate transaction or event
affects the Common Shares, then the Committee shall in an equitable and
proportionate manner (and, as applicable, in such equitable and proportionate
manner as is consistent with Sections 422 and 409A of the Code and the
regulations thereunder and with Section 162(m) of the Code) either:
(i) adjust any or all of (1) the aggregate number of Common Shares or
other securities of the Company (or number and kind of other securities or
property) with respect to which Awards may be granted under the Plan;
(2) the number of Common Shares or other securities of the Company (or
number and kind of other securities or property) subject to outstanding Awards
under the Plan, provided that the number of Common Shares subject to any Award
shall always be a whole number; (3) the grant or exercise price with
respect to any Award under the Plan; and (4) the limits on the number of Common
Shares that may be granted to Participants under the Plan in any calendar year;
(ii) provide for an equivalent award in respect of securities of the
surviving entity of any merger, consolidation or other transaction or event
having a similar effect; or (iii) make provision for a cash payment to the
holder of an outstanding Award.
4.3
Substitute
Awards.
Any Common Shares issued by the Company as Substitute
Awards in connection with the assumption or substitution of outstanding grants
from any acquired corporation shall not reduce the Common Shares available for
Awards under the Plan.
4.4
Sources of Common Shares Deliverable
Under Awards.
Any Common Shares delivered pursuant to an Award
may consist, in whole or in part, of authorized and unissued Common Shares or of
issued Common Shares which have been reacquired by the Company.
Any Employee, Trustee or Consultant
shall be eligible to be designated a Participant; provided, however, that
Non-Employee Trustees shall only be eligible to receive Awards granted
consistent with
Section 10
.
|
Section
6.
|
Stock
Options And Stock Appreciation
Rights.
|
6.1
Grant.
Subject to
the provisions of the Plan including, without limitation,
Section 3.3
above and
other applicable legal requirements, the Committee shall have sole and complete
authority to determine the Participants to whom Options and SARs shall be
granted, the number of Common Shares subject to each Award, the exercise price
and the conditions and limitations applicable to the exercise of each Option and
SAR. An Option may be granted with or without a related
SAR. A SAR may be granted with or without a related
Option. The Committee shall have the authority to grant Incentive
Stock Options, and to grant Non-Qualified Stock Options. In the case
of Incentive Stock Options, the terms and conditions of such grants shall be
subject to and comply with Section 422 of the Code, as from time to time
amended, and any regulations implementing such statute. A person who
has been granted an Option or SAR under this Plan may be granted additional
Options or SARs under the Plan if the Committee shall so determine; provided,
however, that to the extent the aggregate Fair Market Value (determined at the
time the Incentive Stock Option is granted) of the Common Shares with respect to
which all Incentive Stock Options are exercisable for the first time by an
Employee during any calendar year (under all plans described in of
Section 422(d) of the Code of the Employee’s employer corporation and its
parent and Subsidiaries) exceeds $100,000, such Options shall be treated as
Non-Qualified Stock Options.
6.2
Price.
The
Committee in its sole discretion shall establish the Option Price at the time
each Option is granted. Except in the case of Substitute Awards, the
Option Price of an Option may not be less than one hundred percent (100%) of the
Fair Market Value of the Common Shares with respect to which the Option is
granted on the date of grant of such Option. Notwithstanding the
foregoing and except as permitted by the provisions of
Section 4.2
and
Section 14
hereof, the Committee shall not have the power to (i) amend the terms of
previously granted Options to reduce the Option Price of such Options, or
(ii) cancel such Options and grant substitute Options with a lower Option
Price than the canceled Options. Except with respect to Substitute
Awards, SARs may not be granted at a price less than the Fair Market Value of a
Common Share on the date of grant.
6.3
Term.
Subject to
the Committee’s authority under
Section 3.1
and
the provisions of
Section 6.6
,
each Option and SAR and all rights and obligations thereunder shall expire on
the date determined by the Committee and specified in the Award
Agreement. The Committee shall be under no duty to provide terms of
like duration for Options or SARs granted under the
Plan. Notwithstanding the foregoing, no Option or SAR shall be
exercisable after the expiration of ten (10) years from the date such
Option or SAR was granted.
6.4
Exercise.
(a)
Each
Option and SAR shall be exercisable at such times and subject to such terms and
conditions as the Committee may, in its sole discretion, specify in the
applicable Award Agreement or thereafter. The Committee shall have
full and complete authority to determine, subject to
Section 6.6
herein, whether an Option or SAR will be exercisable in full at any time or from
time to time during the term of the Option or SAR, or to provide for the
exercise thereof in such installments, upon the occurrence of such events and at
such times during the term of the Option or SAR as the Committee may
determine.
(b)
The
Committee may impose such conditions with respect to the exercise of Options,
including without limitation, any relating to the application of federal, state
or foreign securities laws or the Code, as it may deem necessary or
advisable. The exercise of any Option granted hereunder shall be
effective only at such time as the sale of Common Shares pursuant to such
exercise will not violate any state or federal securities or other
laws.
(c)
An Option
or SAR may be exercised in whole or in part at any time, with respect to whole
Common Shares only, within the period permitted thereunder for the exercise
thereof, and shall be exercised by written notice of intent to exercise the
Option or SAR, delivered to the Company at its principal office, and payment in
full to the Company at the direction of the Committee of the amount of the
Option Price for the number of Common Shares with respect to which the Option is
then being exercised.
(d)
Payment
of the Option Price shall be made in cash or cash equivalents, or, at the
discretion of the Committee, (i) by transfer, either actually or by
attestation, to the Company of Common Shares that have been held by the
Participant for at least six (6) months (or such lesser period as may be
permitted by the Committee), valued at the Fair Market Value of such Common
Shares on the date of exercise (or next succeeding trading date, if the date of
exercise is not a trading date), together with any applicable withholding taxes,
such transfer to be upon such terms and conditions as determined by the
Committee, or (ii) by a combination of such cash (or cash equivalents) and
such Common Shares; provided, however, that the optionee shall not be entitled
to tender Common Shares pursuant to successive, substantially simultaneous
exercises of an Option or any other stock option of the Company. In
addition, if permitted by the Committee in its sole discretion, payment may also
be made in whole or in part in the form of an option to acquire Common Shares or
in the form of another Award hereunder (based, in each case, on the Fair Market
Value of such option or Award on the date the Option is exercised, as determined
by the Committee). Subject to applicable securities laws, an Option
may also be exercised by delivering a notice of exercise of the Option and
simultaneously selling the Common Shares thereby acquired, pursuant to a
brokerage or similar agreement approved in advance by proper officers of the
Company, using the proceeds of such sale as payment of the Option Price,
together with any applicable withholding taxes. Until the optionee
has been issued the Common Shares subject to such exercise, he or she shall
possess no rights as a shareholder with respect to such Common
Shares.
(e)
At the
Committee’s discretion, the amount payable as a result of the exercise of an SAR
may be settled in cash, Common Shares or a combination of cash and Common
Shares. A fractional Common Share shall not be deliverable upon the
exercise of a SAR but a cash payment will be made in lieu
thereof.
6.5
Ten Percent Stock
Rule.
Notwithstanding any other provisions in the Plan, if at
the time an Option is otherwise to be granted pursuant to the Plan, the optionee
or rights holder owns directly or indirectly (within the meaning of
Section 424(d) of the Code) Common Shares of the Company possessing more
than ten percent (10%) of the total combined voting power of all classes of
Common Shares of the Company or its parent or Subsidiary or Affiliate
corporations (within the meaning of Section 422(b)(6) of the Code), then
any Incentive Stock Option to be granted to such optionee or rights holder
pursuant to the Plan shall satisfy the requirement of Section 422(c)(5) of
the Code, and the Option Price shall be not less than one hundred ten percent
(110%) of the Fair Market Value of the Common Shares of the Company, and such
Option by its terms shall not be exercisable after the expiration of five
(5) years from the date such Option is granted.
6.6
Transferability of
Options
. An Option shall not be transferable or assignable
except by will or by the laws of descent and distribution and shall be
exercisable, during the Participant’s lifetime, only by the Participant;
provided, however, that in the event the Participant is incapacitated and unable
to exercise his or her Option, if such Option is a Non-Qualified Option, such
Option may be exercised by such Participant’s legal guardian, legal
representative, or other representative whom the Board deems appropriate based
on applicable facts and circumstances.
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Section
7.
|
Restricted
Common Shares, Restricted Common Share Units and Restricted Unit
Awards.
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7.1
Grant.
(a)
Subject
to the provisions of the Plan and other applicable legal requirements, the
Committee shall have sole and complete authority to determine the Participants
to whom Restricted Common Shares and Restricted Common Share Units shall be
granted, the number of Restricted Common Shares and/or the number of Restricted
Common Share Units to be granted to each Participant, the duration of the period
during which, and the conditions under which, the Restricted Common Shares and
Restricted Common Share Units may be forfeited to the Company, and the other
terms and conditions of such Awards. The Restricted Common Share and Restricted
Common Share Unit Awards shall be evidenced by Award Agreements in such form as
the Committee shall from time to time approve, which agreements shall comply
with and be subject to the terms and conditions provided hereunder and any
additional terms and conditions established by the Committee that are consistent
with the terms of the Plan.
(b)
Each
Restricted Common Share and Restricted Common Share Unit Award made under the
Plan shall be for such number of Common Shares as shall be determined by the
Committee and set forth in the Award Agreement containing the terms of such
Restricted Common Share or Restricted Common Share Unit Award. Such
agreement shall set forth a period of time during which the grantee must remain
in the continuous employment of the Company in order for the forfeiture and
transfer restrictions to lapse. If the Committee so determines, the
restrictions may lapse during such restricted period in installments with
respect to specified portions of the Common Shares covered by the Restricted
Common Share or Restricted Common Share Unit Award. The Award
Agreement may also, in the discretion of the Committee, set forth performance or
other conditions under which restrictions on the Common Shares may lapse or that
will subject the Common Shares to forfeiture and transfer restrictions,
including by reference to those performance goals enumerated in
Section 11
hereof. The Committee may, at its discretion, waive all or any part
of the restrictions applicable to any or all outstanding Restricted Common Share
and Restricted Common Share Unit Awards.
(c)
Subject
to the provisions of the Plan and other applicable legal requirements, the
Committee shall have sole and complete authority to determine the Participants
to whom Restricted Unit Awards shall be granted, the number of units in the
Operating Partnership to be granted to each Participant, and the other terms and
conditions of such Awards. Units in the Operating Partnership awarded pursuant
to a Restricted Unit Award may be subject to such terms, conditions and
restrictions as determined by the Committee for periods determined by the
Committee in addition to the terms, conditions and restrictions as contained in
the limited partnership agreement of the Operating
Partnership.
7.2
Delivery of Common Shares and
Transfer Restrictions.
At the time of a Restricted Common
Share Award, a certificate representing the number of Common Shares awarded
thereunder shall be registered in the name of the grantee. Such
certificate shall be held by the Company or any custodian appointed by the
Company for the account of the grantee subject to the terms and conditions of
the Plan, and shall bear such a legend setting forth the restrictions imposed
thereon as the Committee, in its discretion, may determine. The
applicable Award Agreement will specify whether a grantee has the right to
receive dividends and/or the right to vote with respect to the Restricted Common
Shares prior to the lapsing of transfer restrictions. Unless
otherwise provided in the applicable Award Agreement, the grantee shall have all
other rights of a shareholder with respect to the Restricted Common Shares,
subject to the following restrictions: (i) the grantee shall not be
entitled to delivery of the stock certificate until the expiration of the
restricted period and the fulfillment of any other restrictive conditions set
forth in the Award Agreement with respect to such Common Shares; (ii) none
of the Common Shares may be sold, assigned, transferred, pledged, hypothecated
or otherwise encumbered or disposed of during such restricted period or until
after the fulfillment of any such other restrictive conditions; and
(iii) except as otherwise determined by the Committee at or after grant,
all of the Common Shares shall be forfeited and all rights of the grantee to
such Common Shares shall terminate, without further obligation on the part of
the Company, unless the grantee remains in the continuous employment of the
Company for the entire restricted period in relation to which such Common Shares
were granted and unless any other restrictive conditions relating to the
Restricted Common Share Award are met. Unless otherwise provided in
the applicable Award Agreement, any Common Shares, any other securities of the
Company and any other property (except for cash dividends) distributed with
respect to the Common Shares subject to Restricted Common Share Awards shall be
subject to the same restrictions, terms and conditions as such restricted Common
Shares.
7.3
Termination of
Restrictions.
At the end of the restricted period and provided
that any other restrictive conditions of the Restricted Common Share Award are
met, or at such earlier time as otherwise determined by the Committee, all
restrictions set forth in the Award Agreement relating to the Restricted Common
Share Award or in the Plan shall lapse as to the restricted Common Shares
subject thereto, and a stock certificate for the appropriate number of Common
Shares, free of the restrictions and restricted stock legend, shall be delivered
to the Participant or the Participant’s beneficiary or estate, as the case may
be.
7.4
Payment of Restricted Common Share
Units.
Each Restricted Common Share Unit shall have a value
equal to the Fair Market Value of a Common Share. Restricted Common
Share Units shall be paid in cash, Common Shares, other securities or other
property, as determined in the sole discretion of the Committee, upon the lapse
of the restrictions applicable thereto, or otherwise in accordance with the
applicable Award Agreement. The applicable Award Agreement will
specify whether a Participant will be entitled to receive dividend rights in
respect of Restricted Stock Units at the time of any payment of dividends to
shareholders on Common Shares. If the applicable Award Agreement
specifies that a Participant will be entitled to receive dividend rights, (i)
the amount of any such dividend right shall equal the amount that would be
payable to the Participant as a shareholder in respect of a number of Common
Shares equal to the number of Restricted Stock Units then credited to the
Participant, (ii) any such dividend right shall be paid in accordance with the
Company’s payment practices as may be established from time to time and as of
the date on which such dividend would have been payable in respect of
outstanding Common Shares, and (iii) the applicable Award Agreement will specify
whether dividend equivalents shall be paid in respect of Restricted Common Share
Units that are not yet vested. Except as otherwise determined by the
Committee at or after grant, Restricted Common Share Units may not be sold,
assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed
of, and all Restricted Common Share Units and all rights of the grantee to such
Restricted Common Share Units shall terminate, without further obligation on the
part of the Company, unless the grantee remains in continuous employment of the
Company for the entire restricted period in relation to which such Restricted
Common Share Units were granted and unless any other restrictive conditions
relating to the Restricted Common Share Unit Award are met.
8.1
Grant.
The
Committee shall have sole and complete authority to determine the Participants
who shall receive a Performance Award, which shall consist of a right that is
(i) denominated in cash or Common Shares (including but not limited to
Restricted Common Shares and Restricted Common Share Units), (ii) valued,
as determined by the Committee, in accordance with the achievement of such
performance goals during such performance periods as the Committee shall
establish, and (iii) payable at such time and in such form as the Committee
shall determine.
8.2
Terms and
Conditions.
Subject to the terms of the Plan and any
applicable Award Agreement, the Committee shall determine the performance goals
to be achieved during any performance period, the length of any performance
period, the amount of any Performance Award and the amount and kind of any
payment or transfer to be made pursuant to any Performance Award, and may amend
specific provisions of the Performance Award; provided, however, that such
amendment may not adversely affect existing Performance Awards made within a
performance period commencing prior to implementation of the
amendment.
8.3
Payment of Performance
Awards.
Performance Awards may be paid in a lump sum or in
installments following the close of the performance period or, in accordance
with the procedures established by the Committee, on a deferred
basis. Termination of employment prior to the end of any performance
period, other than for reasons of death or Disability, will result in the
forfeiture of the Performance Award, and no payments will be made. A
Participant’s rights to any Performance Award may not be sold, assigned,
transferred, pledged, hypothecated or otherwise encumbered or disposed of in any
manner, except by will or the laws of descent and distribution, and/or except as
the Committee may determine at or after grant.
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Section
9.
|
Other
Share-Based Awards.
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The Committee shall have the
authority to determine the Participants who shall receive an Other Share-Based
Award, which shall consist of any right that is (i) not an Award described
in
Sections 6
or
7
above and
(ii) an Award of Common Shares or an Award denominated or payable in,
valued in whole or in part by reference to, or otherwise based on or related to,
Common Shares (including, without limitation, securities convertible into Common
Shares), as deemed by the Committee to be consistent with the purposes of the
Plan. Subject to the terms of the Plan and any applicable Award
Agreement, the Committee shall determine the terms and conditions of any such
Other Share-Based Award.
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Section
10.
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Non-Employee
Trustee Awards.
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10.1 The
Board may provide that all or a portion of a Non-Employee Trustee’s annual
retainer, meeting fees and/or other awards or compensation as determined by the
Board, be payable (either automatically or at the election of a Non-Employee
Trustee) in the form of Non-Qualified Stock Options, Restricted Common Shares,
Restricted Common Share Units and/or Other Share-Based Awards, including
unrestricted Common Shares. The Board shall determine the terms and
conditions of any such Awards, including the terms and conditions which shall
apply upon a termination of the Non-Employee Trustee’s service as a member of
the Board, and shall have full power and authority in its discretion to
administer such Awards, subject to the terms of the Plan and applicable
law.
10.2 Subject
to applicable legal requirements, the Board may also grant Awards to
Non-Employee Trustees pursuant to the terms of the Plan, including any Award
described in
Sections 6
,
7
or
9
above.
|
Section
11.
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Provisions
Applicable To Covered Officers And Performance
Awards.
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11.1 Notwithstanding
anything in the Plan to the contrary, unless the Committee determines that a
Performance Award to be granted to a Covered Officer should not qualify as
“performance-based compensation” for purposes of Section 162(m), Performance
Awards granted to Covered Officers shall be subject to the terms and provisions
of this
Section 11
. Accordingly,
unless otherwise determined by the Committee, if any provision of the Plan or
any Award Agreement relating to such an Award does not comply or is inconsistent
with Section 162(m), such provision shall be construed or deemed amended to
the extent necessary to conform to such requirements, and no provision shall be
deemed to confer upon the Committee discretion to increase the amount of
compensation otherwise payable to a Covered Officer in connection with any such
Award upon the attainment of the performance criteria established by the
Committee.
11.2 The
Committee may grant Performance Awards to Covered Officers based solely upon the
attainment of performance targets related to one or more performance goals
selected by the Committee from among the goals specified below. For
the purposes of this
Section 11
,
performance goals shall be limited to one or more of the following Company,
Subsidiary, operating unit, business segment or division financial performance
measures:
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(a)
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earnings
before interest, taxes, depreciation and/or
amortization;
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(b)
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operating
income or profit;
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(c)
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operating
efficiencies;
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(d)
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return
on equity, assets, capital, capital employed or
investment;
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(e)
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net
income;
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(f)
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earnings
per share;
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(g)
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utilization;
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(h)
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net
investment income;
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(i)
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gross
profit;
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(j)
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loan
loss ratios;
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(k)
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stock
price or total shareholder return;
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(l)
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net
asset growth;
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(m)
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debt
reduction;
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(n)
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funds
from operations;
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(o)
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strategic
business objectives, consisting of one or more objectives based on meeting
specified cost targets, business expansion goals and goals relating to
acquisitions or divestitures;
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(p)
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property
acquisitions;
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(q)
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corporate
acquisitions and mergers;
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(r)
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equity
offerings; or
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(s)
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any
combination thereof.
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Each goal
may be expressed on an absolute and/or relative basis, may be based on or
otherwise employ comparisons based on internal targets, the past performance of
the Company or any Subsidiary, operating unit, business segment or division of
the Company and/or the past or current performance of other companies, and in
the case of earnings-based measures, may use or employ comparisons relating to
capital, shareholders’ equity and/or Common Shares outstanding, or to assets or
net assets. The Committee may appropriately adjust any evaluation of
performance under criteria set forth in this
Section 11.2
to
exclude any of the following events that occurs during a performance
period: (i) asset write-downs, (ii) litigation or claim judgments or
settlements, (iii) the effect of changes in tax law, accounting principles or
other such laws or provisions affecting reported results, (iv) accruals for
reorganization and restructuring programs and (v) any extraordinary
non-recurring items as described in Financial Accounting Standard 144 and/or in
management’s discussion and analysis of financial condition and results of
operations appearing in the Company’s annual report to shareholders for the
applicable year.
11.3 With
respect to any Covered Officer, the maximum annual number of Common Shares in
respect of which all Performance Awards may be granted under
Section 8
of the
Plan is 500,000 and the maximum amount of all Performance Awards that are
settled in cash and that may be granted under
Section 8
of the Plan
in any year is $5,000,000.
11.4 To
the extent necessary to comply with Section 162(m), with respect to grants
of Performance Awards, no later than 90 days following the commencement of
each performance period (or such other time as may be required or permitted by
Section 162(m) of the Code), the Committee shall, in writing,
(1) select the performance goal or goals applicable to the performance
period, (2) establish the various targets and bonus amounts which may be
earned for such performance period, and (3) specify the relationship
between performance goals and targets and the amounts to be earned by each
Covered Officer for such performance period. Following the completion
of each performance period, the Committee shall certify in writing whether the
applicable performance targets have been achieved and the amounts, if any,
payable to Covered Officers for such performance period. In
determining the amount earned by a Covered Officer for a given performance
period, subject to any applicable Award Agreement, the Committee shall have the
right to reduce (but not increase) the amount payable at a given level of
performance to take into account additional factors that the Committee may deem
relevant in its sole discretion to the assessment of individual or corporate
performance for the performance period.
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Section
12.
|
Termination
Of Employment.
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The Committee shall have the full
power and authority to determine the terms and conditions that shall apply to
any Award upon a termination of employment with the Company, its Subsidiaries
and Affiliates, including a termination by the Company, by a Participant
voluntarily, or by reason of death, Disability or Retirement, and may provide
such terms and conditions in the Award Agreement or in such rules and
regulations as it may prescribe.
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Section
13.
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Change
In Control.
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The Committee may specify in the
applicable Award Agreement at or after grant, or otherwise by resolution prior
to a Change in Control, that all or a portion of the outstanding Awards shall
vest, become immediately exercisable or payable and have all restrictions lifted
upon a Change in Control.
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Section
14.
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Amendment
And Termination.
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14.1
Amendments to the
Plan.
The Board may amend, alter, suspend, discontinue or
terminate the Plan or any portion thereof at any time; provided that no such
amendment, alteration, suspension, discontinuation or termination shall be made
without shareholder approval if (a) such approval is necessary to comply with
any tax or regulatory requirement for which or with which the Board deems it
necessary or desirable to comply or (b) if such amendment, alteration,
suspension, discontinuation or termination constitutes a material revision to
the Plan. For the purpose of the foregoing, a material revision shall be deemed
to include (but shall not be limited to): (i) a material increase in the number
of shares subject to the Plan under
Section 4
; (ii) an
expansion of the types of Awards under the Plan; (iii) a material expansion of
the class of employees, trustees or other Participants eligible to participate
in the Plan; (iv) a material extension of the term of the Plan; (v) a material
change to the method of determining the Option Price under the Plan; and (vi) an
amendment to
Section
6.2
of the Plan. A material revision shall not include any revision that
curtails rather than expands the scope of the Plan.
14.2
Amendments to
Awards.
Subject to the restrictions of
Section 6.2
, the
Committee may waive any conditions or rights under, amend any terms of or alter,
suspend, discontinue, cancel or terminate, any Award theretofore granted,
prospectively or retroactively; provided that any such waiver, amendment,
alteration, suspension, discontinuance, cancellation or termination that would
materially and adversely affect the rights of any Participant or any holder or
beneficiary of any Award theretofore granted shall not to that extent be
effective without the consent of the affected Participant, holder or
beneficiary.
14.3
Adjustments of Awards Upon the
Occurrence of Certain Unusual or Nonrecurring Events.
The
Committee is hereby authorized to make equitable and proportionate adjustments
in the terms and conditions of, and the criteria included in, Awards in
recognition of unusual or nonrecurring events (and shall make such adjustments
for events described in
Section 4.2
hereof) affecting the Company, any Subsidiary or Affiliate, or the financial
statements of the Company or any Subsidiary or Affiliate, or of changes in
applicable laws, regulations or accounting principles.
14.4
Section 409A
Compliance
. No Award (or modification thereof) shall provide
for deferral of compensation that does not comply with Section 409A of the Code
unless the Committee, at the time of grant, specifically provides that the Award
is not intended to comply with Section 409A of the
Code. Notwithstanding any provision of this Plan to the contrary, if
one or more of the payments or benefits received or to be received by a
Participant pursuant to an Award would cause the Participant to incur any
additional tax or interest under Section 409A of the Code, the Committee may
reform such provision to maintain to the maximum extent practicable the original
intent of the applicable provision without violating the provisions of Section
409A of the Code.
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Section
15.
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General
Provisions.
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15.1
Limited Transferability of Awards.
Except as otherwise provided in the Plan, no Award shall be assigned,
alienated, pledged, attached, sold or otherwise transferred or encumbered by a
Participant, except by will or the laws of descent and
distribution. No transfer of an Award by will or by laws of descent
and distribution shall be effective to bind the Company unless the Company shall
have been furnished with written notice thereof and an authenticated copy of the
will and/or such other evidence as the Committee may deem necessary or
appropriate to establish the validity of the transfer.
15.2
Dividend
Equivalents.
In the sole and complete discretion of the
Committee, an Award may provide the Participant with dividends or dividend
equivalents, payable in cash, Common Shares, other securities or other property
on a current or deferred basis. All dividend or dividend equivalents
which are not paid currently may, at the Committee’s discretion, accrue
interest, be reinvested into additional Common Shares, or, in the case of
dividends or dividend equivalents credited in connection with Performance
Awards, be credited as additional Performance Awards and paid to the Participant
if and when, and to the extent that, payment is made pursuant to such
Award. The total number of Common Shares available for grant under
Section 4
shall not be reduced to reflect any dividends or dividend equivalents that are
reinvested into additional Common Shares or credited as Performance
Awards.
15.3
No Rights to
Awards.
No Person shall have any claim to be granted any
Award, and there is no obligation for uniformity of treatment of Participants or
holders or beneficiaries of Awards. The terms and conditions of
Awards need not be the same with respect to each Participant.
15.4
Common Share
Certificates.
All certificates for Common Shares or other
securities of the Company or any Subsidiary or Affiliate delivered under the
Plan pursuant to any Award or the exercise thereof shall be subject to such stop
transfer orders and other restrictions as the Committee may deem advisable under
the Plan or the rules, regulations and other requirements of the SEC or any
state securities commission or regulatory authority, any stock exchange or other
market upon which such Common Shares or other securities are then listed, and
any applicable federal or state laws, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to such
restrictions.
15.5
Withholding.
A
Participant may be required to pay to the Company or any Subsidiary or Affiliate
and the Company or any Subsidiary or Affiliate shall have the right and is
hereby authorized to withhold from any Award, from any payment due or transfer
made under any Award or under the Plan, or from any compensation or other amount
owing to a Participant the amount (in cash, Common Shares, other securities,
other Awards or other property) of any applicable withholding or other
tax-related obligations in respect of an Award, its exercise or any other
transaction involving an Award, or any payment or transfer under an Award or
under the Plan and to take such other action as may be necessary in the opinion
of the Company to satisfy all obligations for the payment of such
taxes. The Committee may provide for additional cash payments to
holders to defray or offset any tax arising from the grant, vesting, exercise or
payment of any Award.
15.6
Award
Agreements.
Each Award hereunder shall be evidenced by an
Award Agreement that shall be delivered to the Participant and may specify the
terms and conditions of the Award and any rules applicable
thereto. In the event of a conflict between the terms of the Plan and
any Award Agreement, the terms of the Plan shall prevail. The
Committee shall, subject to applicable law, determine the date an Award is
deemed to be granted. The Committee or, except to the extent
prohibited under applicable law, its delegate(s) may establish the terms of
agreements or other documents evidencing Awards under this Plan and may, but
need not, require as a condition to any such agreement’s or document’s
effectiveness that such agreement or document be executed by the Participant,
including by electronic signature or other electronic indication of acceptance,
and that such Participant agree to such further terms and conditions as
specified in such agreement or document. The grant of an Award under
this Plan shall not confer any rights upon the Participant holding such Award
other than such terms, and subject to such conditions, as are specified in this
Plan as being applicable to such type of Award (or to all Awards) or as are
expressly set forth in the agreement or other document evidencing such
Award.
15.7
No Limit on Other Compensation
Arrangements.
Nothing contained in the Plan shall prevent the
Company or any Subsidiary or Affiliate from adopting or continuing in effect
other compensation arrangements, which may, but need not, provide for the grant
of Options, Restricted Common Shares, Restricted Common Share Units, Other
Share-Based Awards or other types of Awards provided for hereunder.
15.8
No Right to
Employment.
The grant of an Award shall not be construed as
giving a Participant the right to be retained in the employ of the Company or
any Subsidiary or Affiliate. Further, the Company or a Subsidiary or
Affiliate may at any time dismiss a Participant from employment, free from any
liability or any claim under the Plan, unless otherwise expressly provided in an
Award Agreement.
15.9
No Rights as
Shareholder.
Subject to the provisions of the Plan and the
applicable Award Agreement, no Participant or holder or beneficiary of any Award
shall have any rights as a shareholder with respect to any Common Shares to be
distributed under the Plan until such person has become a holder of such Common
Shares. Notwithstanding the foregoing, in connection with each grant
of Restricted Common Shares hereunder, the applicable Award Agreement shall
specify if and to what extent the Participant shall not be entitled to the
rights of a shareholder in respect of such Restricted Common
Shares.
15.10
Governing Law.
The
validity, construction and effect of the Plan and any rules and regulations
relating to the Plan and any Award Agreement shall be determined in accordance
with the laws of the State of Maryland without giving effect to conflicts of
laws principles.
15.11
Severability.
If
any provision of the Plan or any Award is, or becomes, or is deemed to be
invalid, illegal or unenforceable in any jurisdiction or as to any Person or
Award, or would disqualify the Plan or any Award under any law deemed applicable
by the Committee, such provision shall be construed or deemed amended to conform
to the applicable laws, or if it cannot be construed or deemed amended without,
in the determination of the Committee, materially altering the intent of the
Plan or the Award, such provision shall be stricken as to such jurisdiction,
Person or Award and the remainder of the Plan and any such Award shall remain in
full force and effect.
15.12
Other Laws.
The
Committee may refuse to issue or transfer any Common Shares or other
consideration under an Award if, acting in its sole discretion, it determines
that the issuance or transfer of such Common Shares or such other consideration
might violate any applicable law or regulation (including applicable non-U.S.
laws or regulations) or entitle the Company to recover the same under Exchange
Act Section 16(b), and any payment tendered to the Company by a
Participant, other holder or beneficiary in connection with the exercise of such
Award shall be promptly refunded to the relevant Participant, holder or
beneficiary.
15.13
No Trust or Fund
Created.
Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company or any Subsidiary or Affiliate and a
Participant or any other Person. To the extent that any Person
acquires a right to receive payments from the Company or any Subsidiary or
Affiliate pursuant to an Award, such right shall be no greater than the right of
any unsecured general creditor of the Company or any Subsidiary or
Affiliate.
15.14
No Fractional Common
Shares.
No fractional Common Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall determine
whether cash, other securities or other property shall be paid or transferred in
lieu of any fractional Common Shares or whether such fractional Common Shares or
any rights thereto shall be canceled, terminated or otherwise
eliminated.
15.15
Headings.
Headings
are given to the sections and subsections of the Plan solely as a convenience to
facilitate reference. Such headings shall not be deemed in any way
material or relevant to the construction or interpretation of the Plan or any
provision thereof.
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Section
16.
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Term
Of The Plan.
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16.1
Effective Date.
Subject to
the approval of the shareholders of the Company at the Company’s 2008 annual
meeting of its shareholders, the Plan shall be effective as of July 29, 2008
(the “
Effective
Date
”); provided, however, that to the extent that Awards are granted
under the Plan prior to its approval by shareholders, the Awards shall be
contingent on approval of the Plan by the shareholders of the Company at such
annual meeting.
16.2
Expiration
Date.
No new Awards shall be granted under the Plan after the
tenth anniversary of the Effective Date. Unless otherwise expressly
provided in the Plan or in an applicable Award Agreement, any Award granted
hereunder may, and the authority of the Board or the Committee to amend, alter,
adjust, suspend, discontinue or terminate any such Award or to waive any
conditions or rights under any such Award shall, continue after the tenth
anniversary of the Effective Date.
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