exv3w17
Exhibit 3.17
ESSEX PROPERTY TRUST, INC.
ARTICLES SUPPLEMENTARY
ESTABLISHING AND FIXING THE RIGHTS AND PREFERENCES OF
7.125% SERIES H CUMULATIVE REDEEMABLE PREFERRED STOCK,
$0.0001 PAR VALUE PER SHARE
ESSEX PROPERTY TRUST, INC., a Maryland corporation (the “Corporation”), hereby certifies to
the State Department of Assessments and Taxation of Maryland that:
FIRST: Pursuant to authority expressly vested in the Board of Directors of the Corporation
(the “Board”) by Article FIFTH of the charter of the Corporation (which, as amended and
supplemented from time to time, together with these Articles Supplementary, is referred to herein
as the “Charter”), the Board has duly reclassified and designated 8,000,000 authorized but unissued
shares of common stock, $0.0001 par value per share (“Common Stock”), of the Corporation as a
separate class of preferred stock designated “7.125% Series H Cumulative Redeemable Preferred
Stock, $0.0001 par value per share, of the Corporation (“Series H Preferred Stock”).
SECOND: The preferences, conversion and other rights, voting powers, restrictions,
limitations as to dividends and other distributions, qualifications and terms and conditions of
redemption of the Series H Preferred Stock are as follows, which, upon any restatement of the
Charter, shall become a part of Article FIFTH of the Charter, with any appropriate renumbering or
relettering of the sections or subsections thereof:
7.125% Series H Cumulative Redeemable Preferred Stock, $0.0001 par value per share
1. Designation and Number. A series of Preferred Stock, designated the “7.125% Series
H Cumulative Redeemable Preferred Stock, $0.0001 par value per share”, is hereby established. The
number of authorized shares of Series H Preferred Stock shall be 8,000,000.
2. Relative Seniority. The Series H Preferred Stock will, with respect to
distribution rights and rights upon liquidation, dissolution or winding up of the Corporation, rank
(a) senior to all classes or series of Common Stock (as defined in the Charter) and to all equity
securities the terms of which provide that such equity securities shall rank junior to such Series
H Preferred Stock (including, without limitation, the Corporation’s Series A Junior Participating
Preferred Stock); (b) on a parity with all equity securities issued by the Corporation, other than
those equity securities referred to in clauses (a) and (c) (including; without limitation, the
Series B Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”), the 7.8125% Series
F Cumulative Redeemable Preferred Stock (the “Series F Preferred Stock”) and the 4.875% Series G
Cumulative Redeemable Preferred Stock (the “Series G Preferred Stock”)) and (c) junior to all
equity securities issued by the Corporation which rank senior to the Series H Preferred Stock and
which were issued in accordance with the terms of Section 7(d) hereof. The term “equity
securities” shall not include convertible debt securities.
3. Distributions.
(a) Subject to the rights of holders of stock ranking senior to, or on a parity with, the
Series H Preferred Stock as to the payment of distributions, holders of Series H Preferred Stock
shall be entitled to receive, when and as authorized by the Board and declared by the Corporation,
out of funds legally available for the payment of distributions, cumulative preferential cash
distributions at the rate of 7.125%) per annum of the twenty-five dollars ($25.00) per share
liquidation preference of the Series H Preferred Stock (equivalent to a fixed annual amount of
$1.78125 per share). Such distributions shall accumulate on a daily basis and be cumulative from
(but excluding) the original date of issuance of the shares of Series H Preferred Stock on which
such distribution is to be made and be payable quarterly in equal amounts in arrears on or about
the fifteenth day of each January, April, July and October of each year, beginning on July 15, 2011
for shares issued prior to July 15, 2011 (each such day being hereinafter called a “Distribution
Payment Date”); provided that if any Distribution Payment Date is not a Business Day (as
hereinafter defined), then the distribution which would otherwise have been payable on such
Distribution Payment Date may be paid on the next succeeding Business Day with the same force and
effect as if paid on such Distribution Payment Date, and no interest or additional distributions or
other sums shall accrue on the amount so payable from such Distribution Payment Date to such next
succeeding Business Day. Any distribution payable on the Series H Preferred Stock for any partial
distribution period shall be prorated and computed on the basis of a 360-day year consisting of
twelve 30-day months. Distributions shall be payable to holders of record as they appear in the
stock records of the Corporation at the close of business on the applicable record date, which
shall be the first day of the calendar month in which the applicable Distribution Payment Date
falls or such other date designated by the Board for the payment of distributions that is not more
than 90 nor less than 10 days prior to such Distribution Payment Date (each, a “Distribution Record
Date”).
(b) No distribution on the Series H Preferred Stock shall be authorized by the Board or
declared by the Corporation or paid or set apart for payment by the Corporation at such time as the
terms and provisions of any agreement of the Corporation, including any agreement relating to its
indebtedness, prohibits such declaration, payment or setting apart for payment or provides that
such declaration, payment or setting apart for payment would constitute a breach thereof, or a
default thereunder, or if such declaration or payment shall be restricted or prohibited by law.
(c) Notwithstanding anything to the contrary contained herein, distributions on the Series H
Preferred Stock shall accumulate whether or not the restrictions referred to in Section 3(b) exist,
whether or not the Corporation has earnings, whether or not there are funds legally available for
the payment of such distributions and whether or not such distributions are authorized or declared.
Accumulated but unpaid distributions on the Series H Preferred Stock will accumulate as of the
Distribution Payment Date on which they first become payable or on the date of redemption as the
case may be. Accumulated and unpaid distributions will not bear interest.
(d) Except as provided by the following sentence, if any shares of Series H Preferred Stock
are outstanding, no distributions will be authorized by the Board or declared by the Corporation or
paid or set apart for payment on any equity securities of the Corporation of any other class or
series ranking, as to distributions, on a parity with or junior to the Series H Preferred
2
Stock unless full cumulative distributions have been or contemporaneously are authorized by
the Board and declared by the Corporation and paid or authorized and declared and a sum sufficient
for the payment thereof set apart for such payment on the Series H Preferred Stock for all past
distribution periods and the then current distribution period. When distributions are not paid in
full (or a sum sufficient for such full payment is not so set apart) upon the Series H Preferred
Stock and all other equity securities ranking on a parity, as to distributions, with the Series H
Preferred Stock, all distributions authorized and declared, paid or set apart for payment upon the
Series H Preferred Stock and all other equity securities ranking on a parity, as to distributions,
with the Series H Preferred Stock shall be authorized and declared and paid pro rata or authorized
and declared and set apart for payment pro rata so that the amount of distributions authorized and
declared per share of Series H Preferred Stock and each such other equity security shall in all
cases bear to each other the same ratio that accumulated distributions per share of Series H
Preferred Stock and other equity security (which shall not include any accumulation in respect of
unpaid distributions for prior distribution periods if such equity securities do not have a
cumulative distribution) bear to each other. No interest, or sum of money in lieu of interest,
shall be payable in respect of any distribution payment or payments on Series H Preferred Stock
which may be in arrears.
(e) Except as provided in Section 3(d), unless full cumulative distributions on the Series H
Preferred Stock have been or contemporaneously are authorized and declared and paid or authorized
and declared and a sum sufficient for the payment thereof is set apart for payment for all past
distribution periods and the then current distribution period, no distributions (other than in
Common Stock or other equity securities of the Corporation ranking junior to the Series H Preferred
Stock as to distributions and upon liquidation) shall be authorized and declared or paid or set
apart for payment nor shall any other distribution be authorized and declared or made upon the
Common Stock or any other equity securities of the Corporation ranking junior to or on a parity
with the Series H Preferred Stock as to distributions or upon liquidation, nor shall any Common
Stock or any other equity securities of the Corporation ranking junior to or on a parity with the
Series H Preferred Stock as to distributions or upon liquidation be redeemed, purchased or
otherwise acquired directly or indirectly for any consideration (or any monies be paid to or made
available for a sinking fund for the redemption of any such equity securities) by the Corporation
(except by conversion into or exchange for other equity securities of the Corporation ranking
junior to the Series H Preferred Stock as to distributions and upon liquidation, by redemption,
purchase or acquisition of equity securities under incentive, benefit or share purchase plans of
the Corporation for officers, directors or employees or others performing or providing similar
services, or by other redemption, purchase or acquisition of such equity securities for the purpose
of preserving the Corporation’s status as a real estate investment trust (“REIT”) for federal
income tax purposes).
(f) If, for any taxable year, the Corporation elects to designate as “capital gain dividends”
(as defined in Section 857(b)(3)(C) of the Internal Revenue Code of 1986, as amended) any portion
(the “Capital Gains Amount”) of the dividends (as determined for federal income tax purposes) paid
or made available for the year to holders of all classes of stock (the “Total Dividends”), then the
portion of the Capital Gains Amount that shall be allocable to the holders of Series H Preferred
Stock shall be the amount that the total dividends (as determined for federal income tax purposes)
paid or made available to the holders of the Series H Preferred Stock for the year bears to the
Total Dividends. The Corporation may elect to retain and pay income tax on its net long-term
capital gains. In such a case, the holders of Series H Preferred Stock would include
3
in income their appropriate share of the Corporation’s undistributed long-term capital gains,
as designated by the Corporation.
(g) Holders of Series H Preferred Stock shall not be entitled to any distribution, whether
payable in cash, property or stock, in excess of full cumulative distributions on the Series H
Preferred Stock as described above. Any distribution payment made on the Series H Preferred Stock
shall first be credited against the earliest accumulated but unpaid distribution due with respect
to such stock which remains payable.
(h) In determining whether a distribution (other than upon voluntary or involuntary
liquidation), by dividend, redemption or other acquisition of the Corporation’s equity securities
is permitted under Maryland law, no effect shall be given to amounts that would be needed, if the
Corporation were to be dissolved at the time of the distribution, to satisfy the preferential
rights upon dissolution of shareholders whose preferential rights on dissolution are superior to
those receiving the distribution.
(i) “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.
4. Liquidation Rights.
(a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the
Corporation (referred to herein sometimes as a “liquidation”), the holders of Series H Preferred
Stock then outstanding shall be entitled to be paid, or have the Corporation declare and set apart
for payment, out of the assets of the Corporation legally available for distribution to
shareholders (after payment or provision for payment of all debts and other liabilities of the
Corporation), a liquidation preference in cash or property having a fair market value as determined
by the Board of Twenty-five Dollars ($25.00) per share of Series H Preferred Stock, plus an amount
equal to all accumulated and unpaid distributions to, but not including, the date of payment (the
“Liquidation Preference”), before any distribution of assets is made to holders of Common Stock or
any other equity securities of the Corporation that rank junior to the Series H Preferred Stock as
to liquidation rights.
(b) If, upon any such voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation are insufficient to pay the full amount of the
Liquidation Preference to holders of Series H Preferred Stock and the corresponding amounts payable
on all stock of other classes or series of equity securities of the Corporation ranking on a parity
with the Series H Preferred Stock as to liquidation rights, then the holders of the Series H
Preferred Stock and all other such classes or series of equity securities shall share ratably in
any such distribution of assets in proportion to the full liquidating distributions to which they
would otherwise be respectively entitled.
(c) Written notice of the effective date of any such liquidation, dissolution or winding up of
the Corporation, stating the payment date or dates when, and the place or places where, the amounts
distributable in such circumstances shall be payable, shall be given by first class mail, postage
pre-paid, not less than 30 nor more than 60 days prior to the payment date
4
stated therein, to each record holder of the Series H Preferred Stock at the address of such
holder as the same shall appear on the stock transfer records of the Corporation.
(d) After payment of the full amount of the Liquidation Preference to which they are entitled,
the holders of Series H Preferred Stock will have no right or claim to any of the remaining assets
of the Corporation.
(e) None of a consolidation or merger of the Corporation with or into another entity, a merger
of another entity with or into the Corporation, a statutory share exchange by the Corporation or a
sale, lease, transfer or conveyance of all or substantially all of the Corporation’s assets or
business shall be considered a liquidation, dissolution or winding up of the Corporation.
5. Redemption
(a) Except as described in Section 6 below and this Section 5, the shares of Series H
Preferred Stock are not redeemable prior to April 13, 2016. To ensure that the Corporation remains
qualified as a REIT for federal income tax purposes, however, the Series H Preferred Stock shall be
subject to the provisions of Article EIGHTH of the Charter pursuant to which Series H Preferred
Stock owned by a shareholder in excess of the Ownership Limit (as defined in Article EIGHTH of the
Charter) shall automatically be exchanged for an equal number of shares of Excess Stock (as defined
in Article EIGHTH of the Charter) and the Corporation shall have the right to purchase such stock,
as provided in Article EIGHTH of the Charter. On and after April 13, 2016, the Corporation, at its
option, upon giving notice as provided below, may redeem the Series H Preferred Stock, in whole or
from time to time in part, for cash, at a redemption price of twenty-five dollars ($25.00) per
share, plus all accumulated and unpaid distributions on such Series H Preferred Stock to, but not
including, the date of such redemption (the “Redemption Right”).
(b) If fewer than all of the outstanding shares of Series H Preferred Stock are to be redeemed
pursuant to the Redemption Right, the shares to be redeemed may be selected pro rata (as nearly as
practicable without creating fractional shares) or by lot or in such other equitable method
determined by the Corporation. If such redemption is to be by lot and, as a result of such
redemption, any holder of Series H Preferred Stock would become a holder of a number of shares of
Series H Preferred Stock in excess of the Ownership Limit because such holder’s shares of Series H
Preferred Stock were not redeemed, or were only redeemed in part then, except as otherwise provided
in the Charter, the Corporation will redeem the requisite number of shares of Series H Preferred
Stock of such holder such that no holder will hold in excess of the Ownership Limit subsequent to
such redemption.
(c) Notwithstanding anything to the contrary contained herein, unless full cumulative
distributions on all shares of Series H Preferred Stock shall have been or contemporaneously are
declared and paid or authorized and declared and a sum sufficient for the payment thereof set apart
for payment for all past distribution periods and the then current distribution period, no shares
of Series H Preferred Stock shall be redeemed unless all outstanding shares of Series H Preferred
Stock are simultaneously redeemed; provided, however, that the foregoing shall not prevent the
redemption or purchase by the Corporation of shares of Series H Preferred Stock pursuant to Article
EIGHTH of the Charter or otherwise in order to ensure that the
5
Corporation remains qualified as a REIT for federal income tax purposes or the purchase or
acquisition of shares of Series H Preferred Stock pursuant to a purchase or exchange offer made on
the same terms to holders of all shares of Series H Preferred Stock. In addition, unless full
cumulative distributions on all shares of Series H Preferred Stock have been or contemporaneously
are authorized and declared and paid or authorized and declared and a sum sufficient for the
payment thereof set apart for payment for all past distribution periods and the then current
distribution period, the Corporation shall not purchase or otherwise acquire directly or indirectly
for any consideration, nor shall any monies be paid to or be made available for a sinking fund for
the redemption of, any shares of Series H Preferred Stock (except by conversion into or exchange
for equity securities of the Corporation ranking junior to the Series H Preferred Stock as to
distributions and upon liquidation; provided, however, that the foregoing shall not prevent any
purchase or acquisition of shares of Series H Preferred Stock for the purpose of preserving the
Corporation’s status as a REIT or pursuant to a purchase or exchange offer made on the same terms
to holders of all outstanding shares of Series H Preferred Stock).
(d) Immediately prior to or upon any redemption of shares of Series H Preferred Stock, the
Corporation shall pay, in cash, any accumulated and unpaid distributions to, but not including, the
redemption date, unless a redemption date falls after a Distribution Record Date and prior to the
corresponding Distribution Payment Date, in which case each holder of Series H Preferred Stock at
the close of business on such Distribution Record Date shall be entitled to the distribution
payable on such stock on the corresponding Distribution Payment Date (including any accrued and
unpaid distributions for prior periods) notwithstanding the redemption of such stock before such
Distribution Payment Date. Except as provided above, the Corporation will make no payment or
allowance for unpaid distributions, whether or not in arrears, on any shares of Series H Preferred
Stock for which a notice of redemption has been given.
(e) The following provisions set forth the procedures for redemption pursuant to the
Redemption Right:
(i) Notice of redemption will be given by publication in a newspaper of general circulation in
the City of New York, such publication to be made once a week for two successive weeks commencing
not less than 30 nor more than 60 days prior to the redemption date. A similar notice will be
mailed by the Corporation, postage prepaid, not less than 30 nor more than 60 days prior to the
redemption date, addressed to the respective holders of record of the shares of Series H Preferred
Stock to be redeemed at their respective addresses as they appear on the stock transfer records of
the Corporation. No failure to give such notice or any defect thereto or in the mailing thereof
shall affect the validity of the proceedings for the redemption of any Series H Preferred Stock
except as to the holder to whom notice was defective or not given.
(ii) In addition to any information required by law or by the applicable rules of any exchange
upon which Series H Preferred Stock may be listed or admitted to trading, such notice shall state:
(A) the redemption date; (B) the redemption price; (C) the number of shares of Series H Preferred
Stock to be redeemed; (D) the place or places where the certificates, to the extent Series H
Preferred Stock are certificated, for the shares of Series H Preferred Stock are to be surrendered
(if so required in the notice) for payment of the redemption price; and (E) that distributions on
the shares of Series H Preferred Stock to be redeemed will cease to accumulate on such redemption
date. If fewer than all of the shares of Series H Preferred Stock
6
held by any holder are to be redeemed, the notice mailed to such holder shall also specify the
number of shares of Series H Preferred Stock held by such holder to be redeemed.
(iii) If the Corporation shall so require and the notice shall so state, on or after the
redemption date, each holder of shares of Series H Preferred Stock to be redeemed shall present and
surrender the certificates evidencing such shares of Series H Preferred Stock, to the extent such
shares are certificated, to the Corporation at the place designated in the notice of redemption and
thereupon the redemption price of such stock (including all accumulated and unpaid distributions
to, but not including, the redemption date) shall be paid to or on the order of the person whose
name appears on such certificate evidencing such shares of Series H Preferred Stock as the owner
thereof and each surrendered certificate shall be canceled. If fewer than all the shares evidenced
by any such certificate evidencing Series H Preferred Stock are to be redeemed, a new certificate
shall be issued evidencing the unredeemed shares. In the event that the shares of Series H
Preferred Stock to be redeemed are uncertificated, such shares shall be redeemed in accordance with
the notice and the applicable procedures of any depository and no further action on the part of the
holders of such stock shall be required.
(iv) From and after the redemption date (unless the Corporation defaults in payment of the
redemption price), all distributions on the shares of Series H Preferred Stock designated for
redemption in such notice shall cease to accumulate and all rights of the holders thereof, except
the right to receive the redemption price thereof (including all accumulated and unpaid
distributions to, but not including, the redemption date), shall cease and terminate, and such
shares shall not thereafter be transferred (except with the consent of the Corporation) on the
Corporation’s stock transfer records, and such stock shall not be deemed to be outstanding for any
purpose whatsoever. At its election, the Corporation, prior to a redemption date, may irrevocably
deposit the redemption price (including accumulated and unpaid distributions to, but not including,
the redemption date) of the shares of Series H Preferred Stock so called for redemption in trust
for the holders thereof with a bank or trust company, in which case the redemption notice to
holders of shares of the Series H Preferred Stock to be redeemed shall (A) state the date of such
deposit, (B) specify the office of such bank or trust company as the place of payment of the
redemption price and (C) require such holders to surrender the certificates evidencing such shares,
to the extent such shares are certificated, at such place on or about the date fixed in such
redemption notice (which may not be later than the redemption date) against payment of the
redemption price (including all accumulated and unpaid distributions to, but not including, the
redemption date). Any monies so deposited which remain unclaimed by the holders of the shares of
Series H Preferred Stock to be redeemed at the end of two years after the redemption date shall be
returned by such bank or trust company to the Corporation.
(f) Subject to applicable law and the limitation on purchases when distributions on the Series
H Preferred Stock are in arrears, the Corporation may, at any time and from time to time, purchase
any shares of Series H Preferred Stock in the open market, by tender or by private agreement.
(g) Any shares of Series H Preferred Stock that shall at any time have been redeemed or
otherwise acquired shall, after such redemption or acquisition, have the status of
7
authorized but unissued Common Stock, without further designation as to series until such
shares are once more classified and designated as part of a particular series by the Board.
6. Special Optional Redemption by the Corporation.
(a) Upon the occurrence of a Change of Control (as defined below), the Corporation will have
the option upon written notice mailed by the Corporation, postage pre-paid, not less than 30 nor
more than 60 days prior to the redemption date and addressed to the holders of record of the shares
of Series H Preferred Stock to be redeemed at their respective addresses as they appear on the
stock transfer records of the Corporation, to redeem the shares of Series H Preferred Stock, in
whole or in part within 120 days after the first date on which such Change of Control occurred, for
cash at twenty-five dollars ($25.00) per share plus accrued and unpaid distributions, if any, to,
but not including, the redemption date (“Special Optional Redemption Right”). No failure to give
such notice or any defect thereto or in the mailing thereof shall affect the validity of the
proceedings for the redemption of any shares of Series H Preferred Stock except as to the holder to
whom notice was defective or not given. If, prior to the Change of Control Conversion Date (as
defined below), the Corporation has provided or provides notice of redemption with respect to the
Series H Preferred Stock (whether pursuant to the Redemption Right or the Special Optional
Redemption Right), the holders of such Series H Preferred Stock will not have the conversion right
described below in Section 9.
A “Change of Control” is when, after the original issuance of the Series H Preferred Stock,
the following have occurred and are continuing:
(i) the acquisition by any person, including any syndicate or group deemed to be a
“person” under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), of beneficial ownership, directly or indirectly, through a purchase, merger
or other acquisition transaction or series of purchases, mergers or other acquisition
transactions of stock of the Corporation entitling that person to exercise more than 50% of
the total voting power of all stock of the Corporation entitled to vote generally in
elections of directors (except that such person will be deemed to have beneficial ownership
of all securities that such person has the right to acquire, whether such right is currently
exercisable or is exercisable only upon the occurrence of a subsequent condition), and
(ii) following the closing of any transaction referred to in (i) above, neither the
Corporation nor the acquiring or surviving entity has a class of common securities (or
American Depositary Receipts representing such securities) listed on the New York Stock
Exchange (the “NYSE”), the NYSE Amex Equities (the “NYSE Amex”), or the NASDAQ Stock Market
(“NASDAQ”), or listed or quoted on an exchange or quotation system that is a successor to
the NYSE, the NYSE Amex or NASDAQ.
(b) In addition to any information required by law or by the applicable rules of any exchange
upon which the Series H Preferred Stock may be listed or admitted to trading, such notice shall
state: (A) the redemption date; (B) the redemption price; (C) the number of shares of Series H
Preferred Stock to be redeemed; (D) the place or places where the certificates
8
for such shares of Series H Preferred Stock, to the extent such shares of Series H Preferred
Stock are certificated, are to be surrendered (if so required in the notice) for payment of the
redemption price; (E) that the shares of Series H Preferred Stock are being redeemed pursuant to
the Special Optional Redemption Right in connection with the occurrence of a Change of Control and
a brief description of the transaction or transactions constituting such Change of Control; (F)
that holders of shares of Series H Preferred Stock to which the notice relates will not be able to
tender such shares of Series H Preferred Stock for conversion in connection with the Change of
Control and each share of Series H Preferred Stock tendered for conversion that is selected, prior
to the Change of Control Conversion Date, for redemption will be redeemed on the related redemption
date instead of converted on the Change of Control Conversion Date; and (G) that distributions on
the shares of Series H Preferred Stock to be redeemed will cease to accumulate on such redemption
date. If fewer than all of the shares of Series H Preferred Stock held by any holder are to be
redeemed, the notice mailed to such holder shall also specify the number of shares of Series H
Preferred Stock held by such holder to be redeemed.
If fewer than all of the outstanding shares of Series H Preferred Stock are to be redeemed
pursuant to the Special Optional Redemption Right, the shares to be redeemed shall be selected pro
rata (as nearly as practicable without creating fractional shares) or by lot or in such other
equitable method prescribed by the Corporation. If such redemption is to be by lot and, as a
result of such redemption, any holder of Series H Preferred Stock would become a holder of a number
of shares of Series H Preferred Stock in excess of the Ownership Limit because such holder’s shares
of Series H Preferred Stock were not redeemed, or were only redeemed in part then, except as
otherwise provided in the Charter, the Corporation will redeem the requisite number of shares of
Series H Preferred Stock of such holder such that no holder will hold in excess of the Ownership
Limit subsequent to such redemption.
(c) Notwithstanding anything to the contrary contained herein, unless full cumulative
distributions on all shares of Series H Preferred Stock shall have been or contemporaneously are
authorized and declared and paid or authorized and declared and a sum sufficient for the payment
thereof set apart for payment for all past distribution periods and the then current distribution
period, no shares of Series H Preferred Stock shall be redeemed unless all outstanding shares of
Series H Preferred Stock are simultaneously redeemed; provided, however, that the foregoing shall
not prevent the purchase by the Corporation of shares of Series H Preferred Stock pursuant to
Article EIGHTH of the Charter or otherwise in order to ensure that the Corporation remains
qualified as a REIT for federal income tax purposes or the purchase or acquisition of shares of
Series H Preferred Stock pursuant to a purchase or exchange offer made on the same terms to holders
of all shares of Series H Preferred Stock. In addition, unless full cumulative distributions on
all shares of Series H Preferred Stock have been or contemporaneously are authorized and declared
and paid or authorized and declared and a sum sufficient for the payment thereof set apart for
payment for all past distribution periods and the then current distribution period, the Corporation
shall not purchase or otherwise acquire directly or indirectly for any consideration, nor shall any
monies be paid to or be made available for a sinking fund for the redemption of, any shares of
Series H Preferred Stock (except by conversion into or exchange for equity securities of the
Corporation ranking junior to the Series H Preferred Stock as to distributions and upon
liquidation; provided, however, that the foregoing shall not prevent any purchase or acquisition of
shares of Series H Preferred Stock for the purpose of preserving the
9
Corporation’s status as a REIT or pursuant to a purchase or exchange offer made on the same
terms to holders of all outstanding shares of Series H Preferred Stock).
(d) Immediately prior to any redemption of shares of Series H Preferred Stock pursuant to the
Special Optional Redemption Right, the Corporation shall pay, in cash, any accumulated and unpaid
distributions to, but not including, the redemption date, unless a redemption date falls after a
Distribution Record Date and prior to the corresponding Distribution Payment Date, in which case
each holder of Series H Preferred Stock at the close of business on such Distribution Record Date
shall be entitled to the distribution payable on such stock on the corresponding Distribution
Payment Date (including any accrued and unpaid distributions for prior periods) notwithstanding the
redemption of such stock before such Distribution Payment Date. Except as provided above, the
Corporation will make no payment or allowance for unpaid distributions, whether or not in arrears,
on shares of Series H Preferred Stock for which a notice of redemption has been given.
(e) If the Corporation shall so require and the notice shall so state, on or after the
redemption date, each holder of shares of Series H Preferred Stock to be redeemed shall present and
surrender the certificates evidencing such shares of Series H Preferred Stock, to the extent such
shares are certificated, to the Corporation at the place designated in the notice of redemption and
thereupon the redemption price of such stock (including all accumulated and unpaid distributions
to, but not including, the redemption date) shall be paid to or on the order of the person whose
name appears on such certificate evidencing such shares of Series H Preferred Stock as the owner
thereof and each surrendered certificate shall be canceled. If fewer than all the shares evidenced
by any such certificate evidencing Series H Preferred Stock are to be redeemed, a new certificate
shall be issued evidencing the unredeemed stock. In the event that the shares of Series H
Preferred Stock to be redeemed are uncertificated, such shares shall be redeemed in accordance with
the notice and the applicable procedures of any depository and no further action on the part of the
holders of such shares shall be required.
(f) From and after the redemption date (unless the Corporation defaults in payment of the
redemption price), all distributions on the shares of Series H Preferred Stock designated for
redemption in such notice shall cease to accumulate and all rights of the holders thereof, except
the right to receive the redemption price thereof (including all accumulated and unpaid
distributions to, but not including, the redemption date), shall cease and terminate and such stock
shall not thereafter be transferred (except with the consent of the Corporation) on the
Corporation’s stock transfer records, and such stock shall not be deemed to be outstanding for any
purpose whatsoever. At its election, the Corporation, prior to a redemption date, may irrevocably
deposit the redemption price (including accumulated and unpaid distributions to, but not including,
the redemption date) of the shares of Series H Preferred Stock so called for redemption in trust
for the holders thereof with a bank or trust company, in which case the redemption notice to
holders of the shares of Series H Preferred Stock to be redeemed shall (A) state the date of such
deposit, (B) specify the office of such bank or trust company as the place of payment of the
redemption price and (C) require such holders to surrender the certificates evidencing such stock,
to the extent such shares of stock are certificated, at such place on or about the date fixed in
such redemption notice (which may not be later than the redemption date) against payment of the
redemption price (including all accumulated and unpaid distributions to, but not including, the
redemption date). Any monies so deposited which remain unclaimed by the holders of the shares of
Series H
10
Preferred Stock to be redeemed at the end of two years after the redemption date shall be
returned by such bank or trust company to the Corporation.
(g) Any shares of Series H Preferred Stock that shall at any time have been redeemed shall,
after such redemption, have the status of authorized but unissued Common Stock, without further
designation as to series until such shares of stock are once more classified and designated as part
of a particular series by the Board.
7. Voting Rights.
(a) Holders of the Series H Preferred Stock will not have any voting rights, except as set
forth below. In any matter in which the holders of Series H Preferred Stock are entitled to vote,
each such holder shall have the right to one vote for each share of Series H Preferred Stock held
by such holder. If the holders of the Series H Preferred Stock and the holders of another series
of preferred stock are entitled to vote together as a single class on any matter, the holders of
the Series H Preferred Stock and the holders of such other preferred stock shall each have one vote
for each $50.00 of liquidation preference.
(b) Whenever distributions on any shares of Series H Preferred Stock shall be in arrears for
six or more quarterly periods, whether or not consecutive (a “Preferred Distribution Default”), the
number of directors then constituting the Board shall be increased by two and the holders of Series
H Preferred Stock, voting as a single class with the holders of the Series B Preferred Stock, the
Series F Preferred Stock and the Series G Preferred Stock (to the extent the holders of the Series
F Preferred Stock choose to participate in the election of Preferred Stock Directors (as
hereinafter defined) in lieu of receipt of the default distribution rate pursuant to the terms of
the Series F Preferred Stock) and all other equity securities upon which like voting rights have
been conferred and are exercisable (such other equity securities, the Series B Preferred Stock, the
Series F Preferred Stock and the Series G Preferred Stock are referred to herein as “Parity
Preferred Stock”) will be entitled to vote for the election of a total of two additional directors
of the Corporation (each, a “Preferred Stock Director”) at a special meeting called by the holders
of at least 10% of the outstanding shares of Series H Preferred Stock or the holders of at least
10% of any other series of Parity Preferred Stock so in arrears or at the next annual or special
meeting of shareholders, and at each subsequent annual or special meeting until all distributions
accumulated on the Series H Preferred Stock for the past distribution periods and the then-current
distribution period shall have been fully paid or authorized and a sum sufficient for the payment
thereof set apart for payment in full.
(c) If and when all accumulated distributions and the distribution for the then current
distribution period on the Series H Preferred Stock shall have been paid in full or authorized and
declared and set aside for payment in full or a sum sufficient for the payment is irrevocably
deposited in trust for payment, the holders of Series H Preferred Stock shall be divested of the
voting rights set forth in Section 7(b) (subject to revesting in the event of each and every
Preferred Distribution Default) and, if all accumulated distributions and the distribution for the
current distribution period have been paid in full or authorized by the Board and set aside for
payment in full on all other series of Parity Preferred Stock upon which like voting rights have
been conferred and are exercisable, the term of office of each Preferred Stock Director so elected
shall terminate and the number of directors shall be reduced accordingly. Any Preferred Stock
11
Director may be removed at any time with or without cause by the vote of, and shall not be
removed otherwise than by the vote of, the holders of a majority of the outstanding shares of
Series H Preferred Stock when they have the voting rights set forth in Section 7(b) and all other
series of Parity Preferred Stock (voting as a single class). So long as a Preferred Distribution
Default shall continue, any vacancy in the office of a Preferred Stock Director may be filled by
written consent of the Preferred Stock Directors remaining in office, or if none remains in office,
by a vote of the holders of a majority of the outstanding shares of Series H Preferred Stock when
they have the voting rights set forth in Section 7(b) and all other series of Parity Preferred
Stock (voting as a single class). The Preferred Stock Directors shall each be entitled to one vote
per director on any matter.
(d) So long as any shares of Series H Preferred Stock remain outstanding, the Corporation
shall not, without the affirmative vote of the holders of at least two-thirds of the shares of
Series H Preferred Stock outstanding at the time, given in person or by proxy, either in writing or
at a meeting (such series voting separately as a class), (i) authorize or create, or increase the
authorized or issued amount of, any class or series of equity securities ranking senior to the
Series H Preferred Stock with respect to payment of distributions or the distribution of assets
upon voluntary or involuntary liquidation, dissolution or winding up of the Corporation, or
reclassify any authorized equity securities of the Corporation into any such equity securities, or
create, authorize or issue any obligation or security convertible into or evidencing the right to
purchase any such equity securities; or (ii) amend, alter or repeal the provisions of the Charter,
whether by merger or consolidation (in either case, an “Event”) or otherwise, so as to materially
and adversely affect any right, preference, privilege or voting power of the Series H Preferred
Stock or the holders thereof; provided, however, that with respect to the occurrence of any Event
set forth in (ii) above, so long as shares of Series H Preferred Stock remain outstanding with the
terms thereof materially unchanged or the holders of shares of Series H Preferred Stock receive
shares of stock or beneficial interest or other equity securities with rights, preferences,
privileges and voting powers substantially similar, taken as a whole, to the rights, preferences,
privileges and voting powers of the Series H Preferred Stock, the occurrence of any such Event
shall not be deemed to materially and adversely affect such rights, preferences, privileges or
voting powers of the Series H Preferred Stock or the holders thereof; and provided further that any
increase in the amount of the authorized Series H Preferred Stock or the creation or issuance, or
increase in the amounts authorized, of any other class or series of equity securities ranking on a
parity with or junior to the Series H Preferred Stock with respect to payment of distributions and
the distribution of assets upon voluntary or involuntary liquidation, dissolution or winding up of
the Corporation, shall not be deemed to materially and adversely affect such rights, preferences,
privileges or voting powers.
(e) The foregoing voting provisions shall not apply if, at or prior to the time when the act
with respect to which such vote would otherwise be required shall be effected, all outstanding
shares of Series H Preferred Stock shall have been redeemed or called for redemption upon proper
notice and sufficient funds shall have been deposited in trust to effect such redemption.
8. Information Rights. During any period in which the Corporation is not subject to
the reporting requirements of Section 13 or 15(d) of the Exchange Act and any shares of Series H
Preferred Stock are outstanding, the Corporation will (i) transmit by mail or other permissible
means under the Exchange Act to all holders of shares of Series H Preferred Stock, as their
12
names and addresses appear in the Corporation’s record books and without cost to such holders,
copies of the annual reports on Form 10-K and quarterly reports on Form 10-Q that the Corporation
would have been required to file with the Securities and Exchange Commission (the “SEC”), pursuant
to Section 13 or Section 15(d) of the Exchange Act if the Corporation were subject thereto (other
than any exhibits that would have been required), and (ii) within 15 days following written
request, supply copies of such reports to any prospective holder of shares of Series H Preferred
Stock. The Corporation will mail (or otherwise provide) the reports to the holders of Series H
Preferred Stock within 15 days after the respective dates by which the Corporation would have been
required to file such reports with the SEC if it were subject to Section 13 or 15(d) of the
Exchange Act.
9. Conversion. Shares of Series H Preferred Stock are not convertible into or
exchangeable for any other property or securities of the Corporation, except as provided in this
Section 9.
(a) Upon the occurrence of a Change of Control, each holder of shares of Series H Preferred
Stock shall have the right, unless, prior to the Change of Control Conversion Date, the Corporation
has provided or provides notice of its election to redeem such shares of Series H Preferred Stock
pursuant to the Redemption Right or Special Optional Redemption Right, to convert some or all of
the shares of Series H Preferred Stock held by such holder (the “Change of Control Conversion
Right”) on the Change of Control Conversion Date into a number of shares of Common Stock, per share
of Series H Preferred Stock to be converted (the “Common Share Conversion Consideration”) equal to
the lesser of (A) the quotient obtained by dividing (i) the sum of (x) the $25.00 liquidation
preference plus (y) the amount of any accrued and unpaid distributions to, but not including, the
Change of Control Conversion Date (unless the Change of Control Conversion Date is after a
Distribution Record Date and prior to the corresponding Distribution Payment Date, in which case no
additional amount for such accrued and unpaid distribution will be included in such sum) by (ii)
the Common Share Price (as defined below) and (B) 0.3995 (the “Share Cap”), subject to the
immediately succeeding paragraph; provided that such Share Cap number shall only be applied to
convert shares of Series H Preferred Stock and shall not be applied to convert any accrued and
unpaid distributions with respect to such shares..
The Share Cap is subject to pro rata adjustments for any share splits (including those
effected pursuant to a distribution to the holders of Common Stock), subdivisions or combinations
(in each case, a “Share Split”) with respect to Common Stock as follows: the adjusted Share Cap as
the result of a Share Split shall be the number of shares of Common Stock that is equivalent to the
product obtained by multiplying (i) the Share Cap in effect immediately prior to such Share Split
by (ii) a fraction, the numerator of which is the number of shares of Common Stock outstanding
after giving effect to such Share Split and the denominator of which is the number of shares of
Common Stock outstanding immediately prior to such Share Split.
For the avoidance of doubt, subject to the immediately succeeding sentence, the aggregate
number of shares of Common Stock (or equivalent Alternative Conversion Consideration (as defined
below), as applicable) issuable in connection with the exercise of the Change of Control Conversion
Right for all authorized 8,000,000 shares of Series F Preferred Stock shall not exceed 3,196,000
shares of Common Stock (or equivalent Alternative Conversion Consideration, as applicable) (the
“Exchange Cap”). The Exchange Cap is subject to pro rata
13
adjustments for any Share Splits on the same basis as the corresponding adjustment to the
Share Cap.
In the case of a Change of Control pursuant to which shares of Common Stock shall be converted
into cash, securities or other property or assets (including any combination thereof) (the
“Alternative Form Consideration”), a holder of shares of Series H Preferred Stock shall receive
upon conversion of such shares of Series H Preferred Stock the kind and amount of Alternative Form
Consideration which such holder of shares of Series H Preferred Stock would have owned or been
entitled to receive upon the Change of Control had such holder of shares of Series H Preferred
Stock held a number of shares of Common Stock equal to the Common Share Conversion Consideration
immediately prior to the effective time of the Change of Control (the “Alternative Conversion
Consideration”). The Common Share Conversion Consideration or the Alternative Conversion
Consideration, as may be applicable to a Change of Control, shall be referred to herein as the
“Conversion Consideration.”
In the event that holders of shares of Common Stock have the opportunity to elect the form of
consideration to be received in the Change of Control, the consideration that the holders of shares
of Series H Preferred Stock shall receive shall be in the form and proportion of the aggregate
consideration elected by the holders of the shares of Common Stock who participate in the
determination (based on the weighted average of elections) and shall be subject to any limitations
to which all holders of shares of Common Stock are subject, including, without limitation, pro rata
reductions applicable to any portion of the consideration payable in the Change of Control.
The “Change of Control Conversion Date” shall be a Business Day set forth in the notice of
Change of Control provided in accordance with Section 9(c) below that is not less than 20 days nor
more than 35 days after the date on which the Corporation provides such notice pursuant to Section
9(c).
The “Common Share Price” shall be (i) the amount of cash consideration per share of Common
Stock, if the consideration to be received in the Change of Control by holders of shares of Common
Stock is solely cash, and (ii) the average of the closing prices per share of Common Share on the
NYSE for the ten consecutive trading days immediately preceding, but not including, the effective
date of the Change of Control, if the consideration to be received in the Change of Control by
holders of Common Stock is other than solely cash.
(b) No fractional shares of Common Stock shall be issued upon the conversion of shares of
Series H Preferred Stock. In lieu of fractional shares, holders shall be entitled to receive the
cash value of such fractional shares based on the Common Stock price.
(c) Within 15 days following the occurrence of a Change of Control, a notice of occurrence of
the Change of Control, describing the resulting Change of Control Conversion Right, shall be
delivered to the holders of record of the Series H Preferred Stock at their addresses as they
appear on the Corporation’s stock transfer records and notice shall be provided to the
Corporation’s transfer agent. No failure to give such notice or any defect thereto or in the
mailing thereof shall affect the validity of the proceedings for the conversion of any shares of
Series H Preferred Stock except as to the holder to whom notice was defective or not given. Each
notice
14
shall state: (i) the events constituting the Change of Control; (ii) the date of the Change of
Control; (iii) the last date on which the holders of shares of Series H Preferred Stock may
exercise their Change of Control Conversion Right; (iv) the method and period for calculating the
Common Share Price; (v) the Change of Control Conversion Date, which shall be a Business Day
occurring within 20 to 35 days following the date of such notice; (vi) that if, prior to the Change
of Control Conversion Date, the Corporation has provided or provides notice of its election to
redeem all or any portion of the Series H Preferred Stock, the holder will not be able to convert
shares of Series H Preferred Stock and such shares of Series H Preferred Stock shall be redeemed on
the related redemption date, even if they have already been tendered for conversion pursuant to the
Change of Control Conversion Right; (vii) if applicable, the type and amount of Alternative
Conversion Consideration entitled to be received per share of Series H Preferred Stock; (viii) the
name and address of the paying agent and the conversion agent; and (ix) the procedures that the
holders of shares of Series H Preferred Stock must follow to exercise the Change of Control
Conversion Right.
(d) The Corporation shall issue a press release for publication on the Dow Jones & Company,
Inc., Business Wire, PR Newswire or Bloomberg Business News (or, if such organizations are not in
existence at the time of issuance of such press release, such other news or press organization as
is reasonably calculated to broadly disseminate the relevant information to the public), or post
notice on the Corporation’s website, in any event prior to the opening of business on the first
Business Day following any date on which the Corporation provides notice pursuant to Section 9(c)
above to the holders of Series H Preferred Stock.
(e) In order to exercise the Change of Control Conversion Right, a holder of shares of Series
H Preferred Stock shall be required to deliver, on or before the close of business on the Change of
Control Conversion Date, the certificates evidencing the shares of Series H Preferred Stock, to the
extent such shares are certificated, to be converted, duly endorsed for transfer, together with a
written conversion notice completed, to the Corporation’s transfer agent. Such notice shall state:
(i) the relevant Change of Control Conversion Date; (ii) the number of shares of Series H Preferred
Stock to be converted; and (iii) that the shares of Series H Preferred Stock are to be converted
pursuant to the applicable terms of the Series H Preferred Stock. Notwithstanding the foregoing,
if the shares of Series H Preferred Stock are held in global form, such notice shall comply with
applicable procedures of The Depository Corporation Company (“DTC”).
(f) Holders of shares of Series H Preferred Stock may withdraw any notice of exercise of a
Change of Control Conversion Right (in whole or in part) by a written notice of withdrawal
delivered to the Corporation’s transfer agent prior to the close of business on the Business Day
prior to the Change of Control Conversion Date. The notice of withdrawal must state: (i) the
number of withdrawn shares of Series H Preferred Stock; (ii) if certificated shares of Series H
Preferred Stock have been issued, the certificate numbers of the withdrawn shares of Series H
Preferred Stock; and (iii) the number of shares of Series H Preferred Stock, if any, which remain
subject to the conversion notice. Notwithstanding the foregoing, if the shares of Series H
Preferred Stock are held in global form, the notice of withdrawal shall comply with applicable
procedures of DTC.
15
(g) Shares of Series H Preferred Stock as to which the Change of Control Conversion Right has
been properly exercised and for which the conversion notice has not been properly withdrawn shall
be converted into the applicable Conversion Consideration in accordance with the Change of Control
Conversion Right on the Change of Control Conversion Date, unless, prior to the Change of Control
Conversion Date, the Corporation has provided or provides notice of its election to redeem such
shares of Series H Preferred Stock, whether pursuant to its Redemption Right or Special Optional
Redemption Right. If the Corporation elects to redeem such shares of Series H Preferred Stock that
would otherwise be converted into the applicable Conversion Consideration on a Change of Control
Conversion Date, such shares of Series H Preferred Stock shall not be so converted and the holders
of such shares shall be entitled to receive on the applicable redemption date $25.00 per share,
plus any accrued and unpaid distributions thereon to, but not including, the redemption date.
(h) The Corporation shall deliver the applicable Conversion Consideration no later than the
third Business Day following the Change of Control Conversion Date.
(i) Notwithstanding anything to the contrary contained herein, no holder of shares of Series H
Preferred Stock will be entitled to convert such shares of Series H Preferred Stock into Common
Stock to the extent that receipt of such Common Stock would cause the holder of such Common Stock
(or any other person) to Beneficially Own or Constructively Own, within the meaning of the Charter,
Common Stock of the Corporation in excess of the Ownership Limit, as such term is defined in the
Charter, as applicable.
10. Application of Article EIGHTH. The Series H Preferred Stock is subject to the
provisions of Article EIGHTH of the Charter.
THIRD: The Series H Preferred Stock has been classified and designated by the Board under the
authority contained in the Charter.
FOURTH: These Articles Supplementary have been approved by the Board in the manner and by the
vote required by law.
FIFTH: These Articles Supplementary shall be effective at the time the State Department of
Assessments and Taxation of Maryland accepts these Articles Supplementary for record.
SIXTH: The undersigned Chief Executive Officer of the Corporation acknowledges these Articles
Supplementary to be the act of the Corporation and, as to all matters or facts required to be
verified under oath, the undersigned Chief Executive Officer acknowledges that to the best of his
knowledge, information and belief, these matters and facts are true in all material respects and
that this statement is made under the penalties for perjury.
[Signature
page follows.]
16
IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to be signed
in its name and on its behalf by its Chief Executive Officer and attested by its Executive Vice
President and Assistant Secretary on this
11th day
of April, 2011.
| |
|
|
|
|
|
|
|
| ATTEST: |
|
ESSEX PROPERTY TRUST, INC. |
| |
| By: |
/s/
Michael T. Dance |
|
By: |
/s/
Michael J. Schall |
| |
Michael T. Dance |
|
|
Michael J. Schall |
| |
Executive Vice President and Assistant Secretary |
|
|
Chief Executive Officer |
| |
|
|
|
|
|
17