Exhibit 4.1
CORPORATE OFFICE PROPERTIES
TRUST
ARTICLES SUPPLEMENTARY
ESTABLISHING AND FIXING THE RIGHTS AND PREFERENCES
OF
SERIES K CUMULATIVE REDEEMABLE CONVERTIBLE PREFERRED SHARES
(PAR VALUE $0.01 PER SHARE)
CORPORATE OFFICE PROPERTIES
TRUST, a Maryland real
estate investment trust (hereinafter called the
“Trust”), having its principal office in Columbia,
Maryland, hereby certifies to the State Department of Assessments
and Taxation of the State of Maryland that:
FIRST: Pursuant to authority expressly vested in the
Board of Trustees of the Trust by Article VI of the Declaration of
Trust of the Trust, as amended to date and as the same may be
amended hereafter from time to time (the “Declaration of
Trust”), and in accordance with Section 2-208(b) of the
Maryland General Corporation Law, the Board of Trustees has duly
classified 600,000 authorized but unissued preferred shares of
beneficial interest of the Trust (the “Preferred
Shares”) into a series designated as 5.60% Series K
Cumulative Redeemable Convertible Preferred Shares, par value $0.01
per share, and has provided for the issuance of such class by
adoption of a resolution in the form of Article Third hereof
effective as of January 8, 2007.
SECOND: The classification increases the number of
shares classified as 5.60% Series K Cumulative Redeemable
Convertible Preferred Shares, par value $0.01 per share, from no
shares immediately prior to the classification to 600,000 shares
immediately after the classification. The classification
decreases the number of unclassified Preferred Shares from
4,660,000 to 4,060,000.
THIRD: The terms of the 5.60% Series K Cumulative
Redeemable Convertible Preferred Shares (including the preferences,
conversion and other rights, voting powers, restrictions,
limitations as to dividends and other distributions,
qualifications, or terms or conditions of redemption) as set by the
Board of Trustees are as follows:
1.
NUMBER OF SHARES AND
DESIGNATION.
This series of Preferred Shares
shall be designated as 5.60% Series K Cumulative Redeemable
Convertible Preferred Shares, par value $0.01 per share (the
“Series K Preferred Shares”), and 600,000 shares shall
be the authorized number of such Series K Preferred Shares
constituting such series. The designations, powers,
preferences and relative participating, optional or other special
rights, and the qualifications, limitations or restrictions, of the
Series K Preferred Shares shall be subject in all cases to the
provisions of Article VII of the Declaration of Trust regarding
limitations on beneficial ownership of the Trust’s equity
securities.
2.
DEFINITIONS.
For purposes of the Series K
Preferred Shares, the following terms shall have the meanings
indicated:
“Affiliate” of a Person
means a Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common
control with, the Person specified.
“Board of Trustees”
shall mean the Board of Trustees of the Trust or any committee
authorized by such Board of Trustees to perform any of its
responsibilities with respect to the Series K Preferred Shares;
provided , that for purposes of Section 8(a) of this
Article, the term “Board of Trustees” shall not include
any such committee.
“Business Day” shall
mean any day other than a Saturday, Sunday or a day on which state
or federally chartered banking institutions in New York, New York
are not required to be open.
“Code” shall mean the
Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the
Code shall mean such provision as in effect from time to time, as
the same may be amended, and any successor thereto, as interpreted
by any applicable regulations or other administrative
pronouncements as in effect from time to time.
“Common Shares” shall
mean the common shares of beneficial interest, par value $0.01 per
share, of the Trust.
“Calculation Price”
shall have the meaning set forth in the Purchase
Agreement.
“Current Market Price”
of publicly traded Common Shares or any other class or series of
capital shares or other security of the Trust or of any similar
security of any other issuer for any day shall mean the last
reported sales price, regular way settlement on such day, or, if no
sale takes place on such day, the average of the reported closing
bid and asked prices regular way on such day, in either case as
reported on the New York Stock Exchange (“NYSE”) or, if
such security is not listed or admitted for trading on the NYSE, on
the principal national securities exchange on which such security
is listed or admitted for trading or, if not listed or admitted for
trading on any national securities exchange, the average of the
closing bid and asked prices on such day in the over-the-counter
market as reported by the NASDAQ Stock Market, Inc.
(“NASDAQ”) or, if bid and asked prices for such
security on such day shall not have been reported through NASDAQ,
the average of the bid and asked prices on such day as furnished by
any NYSE member firm regularly making a market in such security
selected for such purpose by the Chief Executive Officer of the
Trust or the Trustees or if any class or series of securities are
not publicly traded, the fair value of the shares of such class as
determined reasonably and in good faith by the Trustees.
“Declaration of Trust”
shall mean the Amended and Restated Declaration of Trust of the
Trust as filed for record with the State Department of Assessments
and Taxation of the State of Maryland, and any amendments
thereto.
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“Dividend Payment Date”
shall mean January 15, April 15, July 15 and October 15 of each
year; provided , that if any Dividend Payment Date falls on
any day other than a Business Day, the dividend payment payable on
such Dividend Payment Date shall be paid on the Business Day
immediately following such Dividend Payment Date and no interest
shall accrue on such dividend from such date to such Dividend
Payment Date.
“Dividend Periods” shall
mean the Initial Dividend Period and each subsequent quarterly
dividend period commencing on and including January 15, April 15,
July 15 and October 15 of each year and ending on and including the
day preceding the first day of the next succeeding Dividend Period,
other than the Dividend Period during which any Series K Preferred
Shares shall be redeemed pursuant to Section 5 of this Article,
which shall end on and include the Redemption Date with respect to
the Series K Preferred Shares being redeemed.
“Dividend Record Date”
shall have the meaning set forth in Section 3(a) of this
Article.
“Equity Shares” shall
mean shares of any class or series of shares of beneficial
ownership in the Trust.
“Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended.
“Initial Dividend
Period” shall mean the period commencing on and including the
Issue Date and ending on and including April 14, 2007.
“Issue Date” shall mean
January 9, 2007.
“Junior Shares” shall
have the meaning set forth in Section 8(a) of this
Article.
“Liquidation Preference”
shall have the meaning set forth in Section 4(a) of this
Article.
“Operating Partnership”
shall mean Corporate Office Properties, L.P., a Delaware limited
partnership.
“Parity Shares” shall
have the meaning set forth in Section 8(b) of this
Article.
“Person” shall mean an
individual, corporation, partnership, estate, trust (including a
trust qualifying under Section 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 Exchange Act, and a
group to which an Excepted Holder Limit (as defined in Article VII
of the Declaration of Trust) applies.
“Purchase Agreement”
shall mean that certain Purchase Agreement and Agreement and Plan
of Merger, dated as of December 21, 2006, by and among the Trust,
the Operating
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Partnership, W&M Business Trust,
a Maryland business trust and Nottingham Village, Inc., a Maryland
corporation.
“Redemption Date” shall
mean, in the case of any redemption of any Series K Preferred
Shares, the date fixed for redemption of such shares.
“Redemption Notice”
shall have the meaning set forth in Section 5(e) of this
Article.
“Redemption Price” shall
mean, with respect to any Series K Preferred Shares to be redeemed,
a cash payment equal to 100% of the Liquidation Preference thereof
plus all accrued and unpaid dividends, if any, to the Redemption
Date.
“REIT” shall mean a
“real estate investment trust,” as defined in Section
856 of the Code.
“Senior Shares” shall
have the meaning set forth in Section 7(c) of this
Article.
“Series G Preferred
Shares” shall mean the Trust’s 8% Series G Cumulative
Redeemable Preferred Shares of beneficial interest, par value $0.01
per share.
“Series H Preferred
Shares” shall mean the Trust’s 7.5% Series H Cumulative
Redeemable Preferred Shares of beneficial interest, par value $0.01
per share.
“Series J Preferred
Shares” shall mean the Trust’s 7.625% Series E
Cumulative Redeemable Preferred Shares of beneficial interest, par
value $0.01 per share.
“Set apart for payment”
shall be deemed to include, without any action other than the
following, the recording by the Trust in its accounting ledgers of
any accounting or bookkeeping entry which indicates, pursuant to a
declaration of dividends or other distribution by the Board of
Trustees, the allocation of funds to be so paid on any series or
class of Equity Shares of the Trust; provided , that the
funds are actually available for and have been segregated for such
purpose; provided , further , that if any funds for
any class or series of Junior Shares or any class or series of
Parity Shares are placed in a separate account of the Trust or
delivered to a disbursing, paying or other similar agent, then
“set apart for payment” with respect to the Series K
Preferred Shares shall mean placing such funds in a separate
account or delivering such funds to a disbursing, paying or other
similar agent.
“Transfer Agent” means
Wells Fargo & Company or such transfer agent as may be
designated from time to time by the Board of Trustees or its
designee as the transfer agent for the Series K Preferred
Shares.
“Trustee” shall mean a
member of the Board of Trustees.
“Voting Parity Shares”
shall have the meaning set forth in Section 8(a) of this
Article.
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3.
DIVIDENDS.
(a)
The holders of Series K Preferred
Shares shall be entitled to receive, when, as and if declared by
the Board of Trustees, out of funds legally available for the
payment of dividends, quarterly cash dividends on the Series K
Preferred Shares at the rate of 5.60% of the Liquidation Preference
per year ($2.80 per share per year). Such dividends shall
accrue and be cumulative from the Issue Date, whether or not in any
Dividend Period or Periods such dividends shall be declared or
there shall be funds of the Trust legally available for the payment
of such dividends, and shall be payable quarterly in arrears on
each Dividend Payment Date, commencing on April 15, 2007.
Each such dividend shall be payable in arrears to the holders of
record of the Series K Preferred Shares, as they appear on the
share records of the Trust at the close of business on the
applicable record date (the “ Dividend Record Date
”), which shall be fixed by the Board of Trustees and which
shall be not more than 60 days nor less than 10 days prior to each
such Dividend Payment Date. The Dividend Record Date for the
dividend payable on April 15, 2007 shall be March 31, 2007.
Accrued and unpaid dividends for any past Dividend Periods may be
declared and paid at any time, without reference to any regular
Dividend Payment Date, to holders of record on such date, which
date shall not precede by more than 45 days nor less than 15 days
the payment date thereof, as may be fixed by the Board of
Trustees.
(b)
Any dividend payable on the Series K
Preferred Shares for any partial Dividend Period shall be computed
ratably on the basis of twelve 30-day months and a 360-day
year. Holders of Series K Preferred Shares shall not be
entitled to any dividends in excess of full cumulative dividends,
as herein provided, on the Series K Preferred Shares. No
interest, or sum of money in lieu of interest, shall be payable in
respect of any dividend payment or payments on the Series K
Preferred Shares that may be in arrears.
(c)
So long as any of the Series K
Preferred Shares are outstanding, when dividends are not paid in
full upon the Series K Preferred Shares or any other
class or series of Parity Shares, or a sum sufficient for such
payment is not set apart for payment, all dividends declared upon
the Series K Preferred Shares and any Parity Shares shall be
declared ratably in proportion to the respective amounts of
dividends accrued and unpaid on the Series K Preferred Shares and
accrued and unpaid on such Parity Shares. Except as set forth
in the preceding sentence, unless dividends on the Series K
Preferred Shares equal to the full amount of accrued and unpaid
dividends have been or contemporaneously are declared and paid or
declared and a sum sufficient for the payment thereof has been or
contemporaneously is set apart for such payment, for all past
dividends periods, no dividends shall be declared or paid or set
apart for payment by the Trust and no other distribution of cash or
other property may be declared or made, directly or indirectly, by
the Trust with respect to any Parity Shares.
(d)
So long as any of the Series K
Preferred Shares are outstanding, unless dividends equal to the
full amount of all accrued and unpaid dividends on the Series K
Preferred Shares have been paid, or declared and set apart for
payment, for all past dividend periods, no dividends (other than
dividends or distributions paid in Junior Shares or options,
warrants or rights to subscribe for or purchase Junior Shares) may
be declared or paid or set apart for payment by the Trust and no
other distribution of cash or other property may be declared or
made, directly or indirectly, by the Trust with respect to any
Junior Shares, nor shall any Junior Shares be
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redeemed, purchased or otherwise
acquired (except for a redemption, purchase or other acquisition of
Common Shares made for purposes of an employee incentive or benefit
plan of the Trust or a subsidiary of the Trust) for any
consideration (or any monies be paid to or made available for a
sinking fund for the redemption of any such Junior Shares),
directly or indirectly, by the Trust (except by conversion into or
exchange for Junior Shares, or options, warrants or rights to
subscribe for or purchase Junior Shares), nor shall any other cash
or other property be paid or distributed to or for the benefit of
holders of Junior Shares.
(e)
Notwithstanding the provisions of
this Section 3, the Trust shall not be prohibited from (i)
declaring or paying or setting apart for payment any dividend or
distribution on any Parity Shares or (ii) redeeming, purchasing or
otherwise acquiring any Parity Shares, in each case, if such
declaration, payment, redemption, purchase or other acquisition is
necessary in order to maintain the continued qualification of the
Trust as a REIT under Section 856 of the Code.
4.
LIQUIDATION
PREFERENCE.
(a)
Upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Trust, before any
payment or distribution by the Trust shall be made to or set apart
for payment to the holders of any Junior Shares, the holders of
Series K Preferred Shares shall be entitled to receive a
liquidation preference of fifty dollars ($50.00) per Series K
Preferred Share (the “ Liquidation Preference
”), plus an amount equal to all accrued and unpaid dividends
(whether or not earned or declared) to the date of final
distribution to such holders; but such holders shall not be
entitled to any further payment. Until the holders of the
Series K Preferred Shares have been paid the Liquidation Preference
in full, plus an amount equal to all accrued and unpaid dividends
(whether or not earned or declared) to the date of final
distribution to such holders, no payment will be made to any holder
of Junior Shares upon the liquidation, dissolution or winding-up of
the Trust. If, upon any liquidation, dissolution or
winding-up of the Trust, the assets of the Trust, or proceeds
thereof, distributable among the holders of Series K Preferred
Shares shall be insufficient to pay in full the Liquidation
Preference and liquidating payments on any other shares of any
class or series of Parity Shares, then such assets, or the proceeds
thereof, shall be distributed among the holders of Series K
Preferred Shares and any such other Parity Shares ratably in the
same proportion as the respective amounts that would be payable on
such Series K Preferred Shares and any such other Parity Shares if
all amounts payable thereon were paid in full. For the
purposes of this Section 4, a voluntary or involuntary liquidation,
dissolution or winding-up of the Trust shall not include (i) a
consolidation or merger of the Trust with or into one or more other
entities, (ii) a sale or transfer of all or substantially all of
the Trust’s assets, or (iii) a statutory share
exchange.
(b)
Upon any liquidation, dissolution or
winding-up of the Trust, after payment shall have been made in full
to the holders of Series K Preferred Shares and any Parity Shares,
as provided in Section 4(a) of this Article, any other series or
class or classes of Junior Shares shall, subject to the respective
terms thereof, be entitled to receive any and all assets remaining
to be paid or distributed, and the holders of the Series K
Preferred Shares and any Parity Shares shall not be entitled to
share therein.
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5.
REDEMPTION
(a)
Except as set forth in Section 5(b)
of this Article below or as set forth in Article VII of the
Declaration of Trust that is incorporated by reference herein
(relating to share ownership limitations in order to preserve REIT
status), the Series K Preferred Shares shall not be redeemable by
the Trust prior to January 9, 2017. On or after January 9,
2017, the Trust, at its option, may redeem Series K Preferred
Shares, in whole or from time to time in part, at the Redemption
Price.
(b)
In the event of a redemption of
Series K Preferred Shares, if the Redemption Date occurs after a
Dividend Record Date and on or prior to the related Dividend
Payment Date, the dividend payable on such Dividend Payment Date in
respect of such shares called for redemption shall be payable on
such Dividend Payment Date to the holders of record at the close of
business on such Dividend Record Date and shall not be payable as
part of the Redemption Price for such shares. If full
cumulative dividends on all outstanding Series K Preferred Shares
have not been paid or declared and set apart for payment, no Series
K Preferred Shares may be redeemed unless all outstanding Series K
Preferred Shares are simultaneously redeemed and neither the Trust
nor any Affiliate of the Trust may purchase or acquire Series K
Preferred Shares, otherwise than pursuant to a purchase or
exch
