EXHIBIT 10-AO
RIGHTS AGREEMENT
Dated as of March 27, 1997
between
QUALITY DINING, INC.
and
KEYCORP SHAREHOLDER SERVICES, INC.
as Rights Agent
SECTION 1. Certain Definitions........................................... 1
SECTION 2. Appointment of Rights Agent................................... 8
SECTION 3. Issue of Rights and Rights Certificates....................... 8
SECTION 4. Form of Rights Certificates................................... 10
SECTION 5. Execution, Countersignature and Registration.................. 10
SECTION 6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates; Uncertificated Rights........................... 11
SECTION 7. Exercise of Rights; Expiration Date of Rights................. 12
SECTION 8. Cancellation and Destruction of Rights Certificates........... 14
SECTION 9. Reservation and Availability of Preferred Shares.............. 14
SECTION 10. Preferred Shares Record Date.................................. 16
SECTION 11. Adjustments in Rights After There Is an Acquiring Person;
Exchange of Rights for Shares; Business Combinations.......... 16
SECTION 12. Certain Adjustments........................................... 21
SECTION 13. Certificate of Adjustment..................................... 22
SECTION 14. Additional Covenants.......................................... 23
SECTION 15. Fractional Rights and Fractional Shares....................... 23
SECTION 16. Rights of Action.............................................. 24
SECTION 17. Transfer and Ownership of Rights and Rights Certificates...... 25
SECTION 18. Rights Certificate Holder Not Deemed a Shareholder............ 25
SECTION 19. Concerning the Rights Agent................................... 00
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XXXXXXX 00. Merger or Consolidation or Change of Rights Agent............. 26
SECTION 21. Duties of Rights Agent........................................ 27
SECTION 22. Change of Rights Agent........................................ 31
SECTION 23. Issuance of Additional Rights and Rights Certificates......... 32
SECTION 24. Redemption and Termination.................................... 32
SECTION 25. Notices....................................................... 33
SECTION 26. Supplements and Amendments.................................... 34
SECTION 27. Successors.................................................... 34
SECTION 28. Benefits of Rights Agreement; Determinations and Actions
by the Board of Directors, etc................................ 34
SECTION 29. Severability.................................................. 35
SECTION 30. Governing Law................................................. 35
SECTION 31. Counterparts; Effectiveness................................... 36
SECTION 32. Descriptive Headings.......................................... 36
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RIGHTS AGREEMENT dated as of March 27, 1997, between QUALITY DINING,
INC., an Indiana corporation (the "Company"), and KeyCorp Shareholder Services,
Inc., as Rights Agent (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one Right (as hereinafter defined) for each share of Common Stock,
without par value, of the Company (the "Common Stock") outstanding at the Close
of Business on April 11, 1997 (the "Record Date") and has authorized the
issuance of one Right (as such number may hereafter be adjusted pursuant to the
provisions of this Rights Agreement) with respect to each share of Common Stock
that shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date or the Expiration Date (as such terms are
hereinafter defined); provided, however, that Rights may be issued with respect
to shares of Common Stock that shall become outstanding after the Distribution
Date and prior to the earlier of the Redemption Date or the Expiration Date in
accordance with the provisions of Section 23. Each Right shall initially
represent the right to purchase one one-hundredth (1/100th) of a share of Series
B Participating Cumulative Preferred Stock, without par value, of the Company
(the "Preferred Shares"), having the powers, rights and preferences set forth in
the Certificate of Designation attached as Exhibit A.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. Certain Definitions. For purposes of this Rights
Agreement, the following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, alone or
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of more than 15% of the Common Shares then outstanding but
shall not include (a) the Company, any subsidiary of the Company, any employee
benefit or compensation plan of the Company or of any of its Subsidiaries, or
any Person holding Common Shares for or pursuant to the terms of any such
employee benefit or compensation plan, (b) any such Person who has become and is
such a Beneficial Owner solely as a result of a transaction or series of
transactions approved prior to such transaction or series of transactions by the
Board of Directors of the Company, (c) any Person who or which, alone or
together with all Affiliates and Associates of such Person are the Beneficial
Owners on the date of this Rights Agreement of more than 15% of the outstanding
shares of Common Stock, but only with respect to the shares of Common Stock so
owned on the date of this Rights Agreement and any shares of Common Stock
acquired in the future directly from the Company or pursuant to any employee
benefit or compensation plan of the Company, it being understood that the
acquisition of Beneficial Ownership of any other additional shares of Common
Stock without the prior approval of the Board of Directors of the Company would
make such Person an Acquiring Person, or (d) any such Person who has become and
is such a Beneficial Owner solely because (i) of a change in the aggregate
number of Common Shares outstanding since the last date on which such Person
acquired Beneficial Ownership of any Common Shares or (ii) it acquired such
Beneficial Ownership in the good faith belief that such acquisition would not
(x) cause such Beneficial Ownership to exceed 15% of the Common Shares then
outstanding and such Person relied in good faith in computing the percentage of
its Beneficial Ownership on
publicly filed reports or documents of the Company which are inaccurate or out-
of-date or (y) otherwise cause a Distribution Date or the adjustment provided
for in Section 11(a) to occur. Notwithstanding clause (d)(ii) of the prior
sentence, if any Person that is not an Acquiring Person due to such clause
(d)(ii) does not reduce its percentage of Beneficial Ownership of Common Shares
to 15% or less by the Close of Business on the fifth Business Day after notice
from the Company (the date of notice being the first day) that such Person's
Beneficial Ownership of Common Shares so exceeds 15%, such Person shall, at the
end of such five Business Day period, become an Acquiring Person (and such
clause (d)(ii) shall no longer apply to such Person). For purposes of this
definition, the determination whether any Person acted in "good faith" shall be
conclusively determined by the Board of Directors of the Company, acting by a
vote of those directors of the Company whose approval would be required to
redeem the Rights under Section 24. Notwithstanding the foregoing, nothing
contained in this definition shall cause any Current 10% Owner to become an
Acquiring Person as a result of such Current 10% Owner becoming a Beneficial
Owner of additional Common Shares by gift or the laws of descent and
distribution or otherwise by operation of law.
"Affiliate" and "Associate", when used with reference to any Person,
shall have the respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in effect on the date
of this Rights Agreement.
A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own", and shall be deemed to have "Beneficial Ownership"
of, any securities:
(i) which such Person or any of such Person's Affiliates or
Associates is deemed to "beneficially own" within the meaning of Rule
13d-3 of the General Rules and Regulations under the Exchange Act, as
in effect on the date of this Rights Agreement;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (written or oral), or upon
the exercise of conversion rights, exchange rights, rights (other than
the Rights), warrants or options, or otherwise; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, or to have Beneficial Ownership of, securities
tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange
thereunder or cease to be subject to withdrawal by the tendering
security
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holder, or (B) the right to vote pursuant to any agreement,
arrangement or understanding (written or oral); provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if (1) the agreement, arrangement or
understanding (written or oral) to vote such security arises solely
from a revocable proxy or consent given to such Person in response to
a public proxy or consent solicitation made generally to all holders
of Common Stock pursuant to, and in accordance with, the applicable
rules and regulations under the Exchange Act and (2) the beneficial
ownership of such security is not also then reportable on Schedule 13D
under the Exchange Act (or any comparable or successor report);
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (written or oral) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in clause
(ii)(B) of this definition) or disposing of any securities of the
Company; or
(iv) which would be beneficially owned by such Person but for the
application of the provisions of the Indiana Business Corporation Law
pertaining to Control Share Acquisitions or any comparable or
successor provisions.
Notwithstanding the foregoing, nothing contained in this definition shall cause
(x) any Current 10% Owner to be a Beneficial Owner of, or to beneficially own,
any additional Common Shares because of any agreement, arrangement or
understanding with any other Person regarding the voting of such additional
Common Shares, unless such Current 10% Owner has a contractual right to vote
such shares or has been granted a proxy (whether or not revocable) to vote such
shares (except pursuant to a revocable proxy as described in clause (ii)B
above), (y) a Person ordinarily engaged in business as an underwriter of
securities to be the Beneficial Owner of, or to beneficially own, any securities
acquired in a bona fide firm commitment underwriting pursuant to an underwriting
agreement with the Company or (z) any of the Company's directors or officers to
be deemed to be the Beneficial Owner of, or to beneficially own, any Common
Shares of the Company owned by any other director or officer of the Company
solely by virtue of such persons acting in their capacities as such, including,
without limitation, in connection with any formulation and publication of the
Board of Directors' recommendation of a position, and any actions taken in
furtherance thereof, with respect to any acquisition proposal relating to the
Company, any tender or exchange offer for the Common Shares of the Company, or
any solicitation of proxies with respect to the Common Shares of the Company.
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"Book Value", when used with reference to Common Shares issued by any
Person, shall mean the amount of equity of such Person applicable to each Common
Share, determined (i) in accordance with generally accepted accounting
principles in effect on the date as of which such Book Value is to be
determined, (ii) using all the consolidated assets and all the consolidated
liabilities of such Person on the date as of which such Book Value is to be
determined, except that no value shall be included in such assets for goodwill
arising from consummation of a business combination, and (iii) after giving
effect to (A) the exercise of all rights, options and warrants to purchase such
Common Shares (other than the Rights), and the conversion of all securities
convertible into such Common Shares, at an exercise or conversion price, per
Common Share, which is less than such Book Value before giving effect to such
exercise or conversion (whether or not exercisability or convertibility is
conditioned upon occurrence of a future event), (B) all dividends and other
distributions on the capital stock of such Person declared prior to the date as
of which such Book Value is to be determined and to be paid or made after such
date, and (C) any other agreement, arrangement or understanding (written or
oral), or transaction or other action contemplated prior to the date as of which
such Book Value is to be determined which would have the effect of thereafter
reducing such Book Value.
"Business Combination" shall have the meaning set forth in Section
11(c)(I).
"Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day in which banking institutions in the Borough of
Manhattan, The City of New York, are authorized or obligated by law or executive
order to close.
"Certificate of Designation" shall mean the Articles of Amendment
setting forth the designation, voting powers, preferences, rights,
qualifications, limitations and restrictions of the Series B Participating
Cumulative Preferred Stock of the Company, a copy of which is attached as
Exhibit A.
"Close of Business" on any given date shall mean 5:00 p.m., New York
City time, on such date; provided, however, that, if such date is not a Business
Day, "Close of Business" shall mean 5:00 p.m., New York City time, on the next
succeeding Business Day.
"Common Shares", when used with reference to the Company prior to a
Business Combination, shall mean the shares of Common Stock of the Company or
any other shares of capital stock of the Company into which the Common Stock
shall be reclassified or changed. "Common Shares", when used with reference to
any Person (other than the Company prior to a Business Combination), shall mean
shares of capital stock of such Person (if such Person is a corporation) of any
class or series, or units of equity interests in such Person (if such Person is
not a corporation) of any class or series, the terms of which do not limit (as a
maximum amount and not merely in proportional terms) the amount of dividends or
income payable or distributable on such class or series or the amount of assets
distributable on such class or series upon any voluntary or involuntary
liquidation, dissolution or winding
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up of such Person and do not provide that such class or series is subject to
redemption at the option of such Person, or any shares of capital stock or units
of equity interests into which the foregoing shall be reclassified or changed;
provided, however, that, if at any time there shall be more than one such class
or series of capital stock or equity interests of such Person, "Common Shares"
of such Person shall include all such classes and series substantially in the
proportion of the total number of shares or other units of each such class or
series outstanding at such time unless any such class or series is identical to
another such class except for voting power, in which case "Common Shares" shall
include such higher voting class in place of such lower voting class.
"Common Stock" shall have the meaning set forth in the introductory
paragraph of this Rights Agreement.
"Company" shall have the meaning set forth in the heading of this
Rights Agreement; provided, however, that if there is a Business Combination,
"Company" shall have the meaning set forth in Section 11(c)(III).
The term "control" with respect to any Person shall mean the power to
direct the management and policies of such Person, directly or indirectly, by or
through stock ownership, agency or otherwise, or pursuant to or in connection
with an agreement, arrangement or understanding (written or oral) with one or
more other Persons by or through stock ownership, agency or otherwise; and the
terms "controlling" and "controlled" shall have meanings correlative to the
foregoing.
"Current 10% Owner" shall mean any Person who together with any
Affiliates and Associates of such Person and any other Person with whom such
Person has any agreement, arrangement or understanding (written or oral) for the
purpose of acquiring, holding, voting or disposing of any securities of the
Company is the Beneficial Owner of more than ten percent (10%) of the
outstanding shares of Common Stock of the Company on the date of this Rights
Agreement.
"Distribution Date" shall have the meaning set forth in Section 3(b).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as in
effect on the date in question, unless otherwise specifically provided.
"Exchange Consideration" shall have the meaning set forth in Section
11(b)(I).
"Expiration Date" shall have the meaning set forth in Section 7(a).
"Major Part", when used with reference to the assets of the Company
and its Subsidiaries as of any date, shall mean assets (i) having a fair market
value aggregating 50% or more of the total fair market value of all the assets
of the Company and its Subsidiaries
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(taken as a whole) as of the date in question, (ii) accounting for 50% or more
of the total value (net of depreciation and amortization) of all the assets of
the Company and its Subsidiaries (taken as a whole) as would be shown on a
consolidated or combined balance sheet of the Company and its Subsidiaries as of
the date in question, prepared in accordance with generally accepted accounting
principles then in effect, or (iii) accounting for 50% or more of the total
amount of earnings before interest, taxes, depreciation and amortization or of
the revenues of the Company and its Subsidiaries (taken as a whole) as would be
shown on, or derived from, a consolidated or combined statement of income or
operations of the Company and its Subsidiaries for the period of 12 months
ending on the last day of the Company's monthly accounting period next preceding
the date in question, prepared in accordance with generally accepted accounting
principles then in effect.
"Market Value", when used with reference to Common Shares on any date,
shall be deemed to be the average of the daily closing prices, per share, of
such Common Shares for the period which is the shorter of (1) 30 consecutive
Trading Days immediately prior to the date in question or (2) the number of
consecutive Trading Days beginning on the Trading Day immediately after the date
of the first public announcement of the event requiring a determination of the
Market Value and ending on the Trading Day immediately prior to the record date
of such event; provided, however, that, in the event that the Market Value of
such Common Shares is to be determined in whole or in part during a period
following the announcement by the issuer of such Common Shares of any action of
the type described in Section 12(a) that would require an adjustment thereunder,
then, and in each such case, the Market Value of such Common Shares shall be
appropriately adjusted to reflect the effect of such action on the market price
of such Common Shares. The closing price for each Trading Day shall be the
closing price quoted on the principal United States securities exchange
registered under the Exchange Act (or any recognized foreign stock exchange) on
which such securities are listed, or, if such securities are not listed on any
such exchange, the closing price quoted on The Nasdaq Stock Market or, if such
securities are not so quoted, the average of the closing bid and asked
quotations with respect to a share of such securities on any National
Association of Securities Dealers, Inc. quotations system, or if no such
quotations are available, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in such securities
selected by the Board of Directors of the Company. If on any such Trading Day no
market maker is making a market in such securities, the closing price of such
securities on such Trading Day shall be deemed to be the fair value of such
securities as determined in good faith by the Board of Directors of the Company
acting by a vote of those directors whose approval would be required to redeem
the Rights under Section 24 (whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent,
the holders of Rights and all other Persons); provided, however, that for the
purpose of determining the closing price of the Preferred Shares for any Trading
Day on which there is no such market maker for the Preferred Shares the closing
price on such Trading Day shall be deemed to be the Formula Number (as defined
in the Certificate of Designation) times the closing price of the Common Shares
of the Company on such Trading Day.
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"Person" shall mean an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity.
"Preferred Shares" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement. Any reference in this Rights
Agreement to Preferred Shares shall be deemed to include any authorized fraction
of a Preferred Share, unless the context otherwise requires.
"Principal Party" shall mean the Surviving Person in a Business
Combination; provided, however, that, if such Surviving Person is a direct or
indirect Subsidiary of any other Person, "Principal Party" shall mean the Person
which is the ultimate parent of such Surviving Person and which is not itself a
Subsidiary of another Person. In the event ultimate control of such Surviving
Person is shared by two or more Persons, "Principal Party" shall mean that
Person that is immediately controlled by such two or more Persons.
"Purchase Price" with respect to each Right shall mean $75.00, as such
amount may from time to time be adjusted as provided herein, and shall be
payable in lawful money of the United States of America. All references herein
to the Purchase Price shall mean the Purchase Price as in effect at the time in
question.
"Record Date" shall have the meaning set forth in the introductory
paragraph of this Rights Agreement.
"Redemption Date" shall have the meaning set forth in Section 24(a).
"Redemption Price" with respect to each Right shall mean $.01, as such
amount may from time to time be adjusted in accordance with Section 12. All
references herein to the Redemption Price shall mean the Redemption Price as in
effect at the time in question.
"Registered Common Shares" shall mean Common Shares which are, as of
the date of consummation of a Business Combination, and have continuously been
for the 12 months immediately preceding such date, registered under Section 12
of the Exchange Act.
"Rights" shall mean the rights to purchase Preferred Shares (or other
securities) as provided in this Rights Agreement.
"Rights Certificate", shall mean a certificate evidencing Rights in
substantially the form attached as Exhibit B.
"Securities Act" shall mean the Securities Act of 1933, as in effect
on the date in question, unless otherwise specifically provided.
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"Subsidiary" shall mean a Person, at least a majority of the total
outstanding voting power (being the power under ordinary circumstances (and not
merely upon the happening of a contingency) to vote in the election of directors
of such Person (if such Person is a corporation) or to participate in the
management and control of such Person (if such Person is not a corporation)) of
which is owned, directly or indirectly, by another Person or by one or more
other Subsidiaries of such other Person or by such other Person and one or more
other Subsidiaries of such other Person.
"Surviving Person" shall mean (1) the Person which is the continuing
or surviving Person in a consolidation or merger specified in Section
11(c)(I)(i) or 11(c)(I)(ii) or (2) the Person to which the Major Part of the
assets of the Company and its Subsidiaries is sold, leased, exchanged or
otherwise transferred or disposed of in a transaction specified in Section
11(c)(I)(iii); provided, however, that, if the Major Part of the assets of the
Company and its Subsidiaries is sold, leased, exchanged or otherwise transferred
or disposed of in one or more related transactions specified in Section
11(c)(I)(iii) to more than one Person, the "Surviving Person" in such case shall
mean the Person that acquired assets of the Company and/or its Subsidiaries with
the greatest fair market value in such transaction or transactions.
"Trading Day" shall mean a day on which the principal national
securities exchange (or principal recognized foreign stock exchange, as the case
may be) on which any securities or Rights, as the case may be, are listed or
admitted to trading is open for the transaction of business or, if the
securities or Rights in question are not listed or admitted to trading on any
national securities exchange (or recognized foreign stock exchange, as the case
may be), a Business Day.
SECTION 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint one or more co-Rights Agents as it may
deem necessary or desirable upon ten (10) days' prior written notice to the
Rights Agent (the term "Rights Agent" being used herein to refer, collectively,
to the Rights Agent together with any such co-Rights Agents). In the event the
Company appoints one or more co-Rights Agents, the respective duties of the
Rights Agent and any co-Rights Agents shall be as the Company shall determine.
The Rights Agent shall have no duty to supervise, and shall in no event be
liable for, the acts or omissions of any such co-Rights Agent.
SECTION 3. Issue of Rights and Rights Certificates.
(a) One Right shall be associated with each Common Share outstanding
on the Record Date, each additional Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date or the Expiration Date and each additional Common
Share with which Rights are issued after the Distribution
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Date but prior to the earlier of the Redemption Date or the Expiration Date
as provided in Section 23; provided, however, that, if the number of
outstanding Rights are combined into a smaller number of outstanding Rights
pursuant to Section 12(a), the appropriate fractional Right determined
pursuant to such Section shall thereafter be associated with each such
Common Share.
(b) Until the earlier of (i) such time as the Company learns that a
Person has become an Acquiring Person or (ii) the Close of Business on such
date, if any, as may be designated by the Board of Directors of the Company
following the commencement of, or first public disclosure of an intent to
commence, a tender or exchange offer by any Person (other than the Company,
any Subsidiary of the Company, any employee benefit or compensation plan of
the Company or of any of its Subsidiaries, or any Person holding Common
Shares for or pursuant to the terms of any such employee benefit or
compensation plan) for outstanding Common Shares, if upon consummation of
such tender or exchange offer such Person could be the Beneficial owner of
more than 15% of the outstanding Common Shares (the Close of Business on
the earlier of such dates being the "Distribution Date"), (x) the Rights
will be evidenced by the certificates for Common Shares registered in the
names of the holders thereof and not by separate Rights Certificates and
(y) the Rights, including the right to receive Rights Certificates, will be
transferable only in connection with the transfer of Common Shares. As soon
as practicable after the Distribution Date, the Rights Agent will send, by
first-class, postage-prepaid mail, to each record holder of Common Shares
as of the Distribution Date, at the address of such holder shown on the
records of the Company, a Rights Certificate evidencing one whole Right for
each Common Share (or for the number of Common Shares with which one whole
Right is then associated if the number of Rights per Common Share held by
such record holder has been adjusted in accordance with the proviso in
Section 3(a)). If the number of Rights associated with each Common Share
has been adjusted in accordance with the proviso in Section 3(a), at the
time of distribution of the Rights Certificates the Company may make any
necessary and appropriate rounding adjustments so that Rights Certificates
representing only whole numbers of Rights are distributed and cash is paid
in lieu of any fractional Right in accordance with Section 15(a). As of and
after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(c) With respect to any certificate for Common Shares, until the
earliest of the Distribution Date, the Redemption Date or the Expiration
Date, the Rights associated with the Common Shares represented by any such
certificate shall be evidenced by such certificate alone, the registered
holders of the Common Shares shall also be the registered holders of the
associated Rights
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and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby.
(d) Certificates issued for Common Shares after the Record Date
(including, without limitation, upon transfer or exchange of outstanding
Common Shares), but prior to the earliest of the Distribution Date, the
Redemption Date or the Expiration Date, shall have printed on, written on
or otherwise affixed to them the following legend:
"This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement dated as of March 27, 1997 as it
may be amended from time to time (the "Rights Agreement"), between Quality
Dining, Inc. (the "Company") and KeyCorp Shareholder Services, Inc., as
Rights Agent (the "Rights Agent"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this certificate.
The Company will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written request therefor
to the Secretary of the Company. Rights beneficially owned by Acquiring
Persons or their Affiliates or Associates (as such terms are defined in the
Rights Agreement) and by any subsequent holder of such Rights are null and
void and nontransferable."
Notwithstanding this paragraph (d), the omission of a legend shall not
affect the enforceability of any part of this Rights Agreement or the rights of
any holder of Rights.
SECTION 4. Form of Rights Certificates. The Rights Certificates (and
the form of election to purchase and form of assignment to be printed on the
reverse side thereof) shall be in substantially the form set forth as Exhibit B
and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Rights Agreement, or as
may be required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Sections 7, 11 and 23, the Rights Certificates,
whenever issued, shall be dated as of the Distribution Date, and on their face
shall entitle the holders thereof to purchase such number of Preferred Shares as
shall be set forth therein for the Purchase Price set forth therein, subject to
adjustment from time to time as herein provided.
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SECTION 5. Execution, Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company
by the Chairman of the Board, the Chief Executive Officer, the President,
the Chief Operating Officer, the Treasurer or a Vice President (whether
preceded by any additional title) of the Company, either manually or by
facsimile signature, and have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary, an Assistant
Secretary or a Vice President (whether preceded by any additional title,
provided that such Vice President shall not have also executed the Rights
Certificates) of the Company, either manually or by facsimile signature.
The Rights Certificates shall be manually countersigned by the Rights Agent
and shall not be valid or obligatory for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any
of the Rights Certificates shall cease to be such an officer of the Company
before countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates may nevertheless be countersigned by
the Rights Agent and issued and delivered by the Company with the same
force and effect as though the person who signed such Rights Certificates
had not ceased to be such an officer of the Company; and any Rights
Certificate may be signed on behalf of the Company by any person who, at
the actual date of execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the
date of execution of this Rights Agreement any such person was not such an
officer of the Company.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its designated office in Cleveland, Ohio, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced by each of the Rights
Certificates, the certificate number of each of the Rights Certificates and
the date of each of the Rights Certificates.
SECTION 6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates;
Uncertificated Rights.
(a) Subject to the provisions of Sections 7(e) and 15, at any time
after the Distribution Date, and at or prior to the Close of Business on
the earlier of the Redemption Date or the Expiration Date, any Rights
Certificate or Rights Certificates may be transferred, split-up, combined
or exchanged for another Rights Certificate or Rights Certificates
representing, in the aggregate, the same number of Rights as the Rights
Certificate or Rights Certificates surrendered then represented. Any
registered holder desiring to transfer, split-
-11-
up, combine or exchange any Rights Certificate shall make such request in
writing delivered to the Rights Agent and shall surrender the Rights
Certificate or Rights Certificates to be transferred, split-up, combined or
exchanged at the designated office of the Rights Agent; provided, however,
that neither the Rights Agent nor the Company shall be obligated to take
any action whatsoever with respect to the transfer of any Rights
Certificate surrendered for transfer until the registered holder shall have
completed and signed the certification contained in the form of assignment
on the reverse side of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon the Rights Agent shall, subject to Sections
7(e) and 15, countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment by the holders of Rights of a
sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer, split-up, combination or exchange of
Rights Certificates.
(b) Upon receipt by the Company or the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a valid Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and,
at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if mutilated, the
Company will make a new Rights Certificate of like tenor and deliver such
new Rights Certificate to the Rights Agent for delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
(c) Notwithstanding any other provision hereof, the Company and the
Rights Agent may amend this Rights Agreement to provide for uncertificated
Rights in addition to or in place of Rights evidenced by Rights
Certificates.
SECTION 7. Exercise of Rights; Expiration Date of Rights.
(a) Subject to Section 7(e) and except as otherwise provided herein
(including Section 11), each Right shall entitle the registered holder
thereof, upon exercise thereof as provided herein, to purchase for the
Purchase Price, at any time after the Distribution Date and at or prior to
the earlier of (i) the Close of Business on the 10th anniversary of the
date of this Rights Agreement (the Close of Business on such date being the
"Expiration Date"), or (ii) the
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Redemption Date, one one-hundredth (1/100th) of a Preferred Share, subject
to adjustment from time to time as provided in Sections 11 and 12.
(b) The registered holder of any Rights Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or
in part at any time after the Distribution Date, upon surrender of the
Rights Certificate, with the form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the designated office of
the Rights Agent in Cleveland, Ohio, together with payment of the Purchase
Price for each one one-hundredth (1/100th) of a Preferred Share as to which
the Rights are exercised, at or prior to the earlier of (i) the Expiration
Date or (ii) the Redemption Date.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the Preferred Shares to be purchased
together with an amount equal to any applicable transfer tax, in lawful
money of the United States of America, in cash or by certified check or
money order payable to the order of the Company, the Rights Agent shall
thereupon (i) either (A) promptly requisition from any transfer agent of
the Preferred Shares (or make available, if the Rights Agent is the
transfer agent) certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests or (B) if the Company shall have elected
to deposit the Preferred Shares with a depositary agent under a depositary
arrangement, promptly requisition from the depositary agent depositary
receipts representing the number of one one-hundredth (1/100th) of a
Preferred Share to be purchased (in which case certificates for the
Preferred Shares to be represented by such receipts shall be deposited by
the transfer agent with the depositary agent) and the Company will direct
the depositary agent to comply with all such requests, (ii) when
appropriate, promptly requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with Section
15, (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate, after
receipt promptly deliver such cash to or upon the order of the registered
holder of such Rights Certificate.
(d) In case the registered holder of any Rights Certificate shall
exercise fewer than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such
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Rights Certificate or to his duly authorized assigns, subject to the
provisions of Section 15.
(e) Notwithstanding anything in this Rights Agreement to the contrary,
any Rights that are at any time beneficially owned by an Acquiring Person
or any Affiliate or Associate of an Acquiring Person shall be null and void
and nontransferable, and any holder of any such Right (including any
purported transferee or subsequent holder) shall not have any right to
exercise or transfer any such Right.
(f) Notwithstanding anything in this Rights Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder of any Rights Certificates
upon the occurrence of any purported exercise as set forth in this Section
7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth on the
reverse side of the Rights Certificate surrendered for such exercise and
(ii) provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request.
(g) The Company may temporarily suspend, for a period of time not to
exceed 90 calendar days after the Distribution Date, the exercisability of
the Rights in order to prepare and file a registration statement under the
Securities Act, on appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights and permit such registration
statement to become effective; provided, however, that no such suspension
shall remain effective after, and the Rights shall without any further
action by the Company or any other Person become exercisable immediately
upon, the effectiveness of such registration statement. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended and shall issue
a further public announcement at such time as the suspension is no longer
in effect. Notwithstanding any provision herein to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification
under the blue sky or securities laws of such jurisdiction shall not have
been obtained or the exercise of the Rights shall not be permitted under
applicable law.
SECTION 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered or presented for the purpose of exercise,
transfer, split-up, combination or exchange shall, and any Rights Certificate
representing Rights that have become null and void and nontransferable pursuant
to Section 7(e) surrendered or presented for any purpose shall, if surrendered
or presented to the Company or to any of its agents, be
-14-
delivered to the Rights Agent for cancellation or in canceled form, or, if
surrendered or presented to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by this Rights Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any Rights Certificate purchased or acquired by the Company. The Rights
Agent shall deliver all canceled Rights Certificates to the Company.
SECTION 9. Reservation and Availability of Preferred Shares.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Preferred Shares or
any authorized and issued Preferred Shares held in its treasury, free from
preemptive rights or any right of first refusal, a number of Preferred
Shares sufficient to permit the exercise in full of all outstanding Rights.
(b) In the event that there shall not be sufficient Preferred Shares
issued but not outstanding or authorized but unissued to permit the
exercise or exchange of Rights in accordance with Section 11, the Company
covenants and agrees that it will take all such action as may be necessary
to authorize additional Preferred Shares for issuance upon the exercise or
exchange of Rights pursuant to Section 11; provided, however, that if the
Company is unable to cause the authorization of additional Preferred
Shares, then the Company shall, or in lieu of seeking any such
authorization, the Company may, to the extent necessary and permitted by
applicable law and any agreements or instruments in effect prior to the
Distribution Date to which it is a party, (A) upon surrender of a Right,
pay cash equal to the Purchase Price in lieu of issuing Preferred Shares
and requiring payment therefor, (B) upon due exercise of a Right and
payment of the Purchase Price for each Preferred Share as to which such
Right is exercised, issue equity securities having a value equal to the
value of the Preferred Shares which otherwise would have been issuable
pursuant to Section 11, which value shall be determined by a nationally
recognized investment banking firm selected by the Board of Directors of
the Company or (C) upon due exercise of a Right and payment of the Purchase
Price for each Preferred Share as to which such Right is exercised,
distribute a combination of Preferred Shares, cash and/or other equity
and/or debt securities having an aggregate value equal to the value of the
Preferred Shares which otherwise would have been issuable pursuant to
Section 11, which value shall be determined by a nationally recognized
investment banking firm selected by the Board of Directors of the Company.
To the extent that any legal or contractual restrictions (pursuant to
agreements or instruments in effect prior to the Distribution Date to which
it is party) prevent the Company from paying the full amount payable in
accordance with the foregoing sentence, the Company shall pay to holders of
the Rights as to which such payments are
-15-
being made all amounts which are not then restricted on a pro rata basis as
such payments become permissible under such legal or contractual
restrictions until such payments have been paid in full.
(c) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares delivered upon
exercise or exchange of Rights shall, at the time of delivery of the
certificates for such Preferred Shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) So long as the Preferred Shares issuable upon the exercise or
exchange of Rights are to be listed on any national securities exchange,
the Company covenants and agrees to use its best efforts to cause, from and
after such time as the Rights become exercisable or exchangeable, all
Preferred Shares reserved for such issuance to be listed on such securities
exchange upon official notice of issuance upon such exercise or exchange.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all Federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of Rights
Certificates or of any Preferred Shares or Common Shares or other
securities upon the exercise or exchange of the Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Rights Certificates to a Person
other than, or in respect of the issuance or delivery of certificates for
the Preferred Shares or Common Shares or other securities, as the case may
be, in a name other than that of, the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise or exchange or to
issue or deliver any certificates for Preferred Shares or Common Shares or
other securities, as the case may be, upon the exercise or exchange of any
Rights until any such tax shall have been paid (any such tax being payable
by the holder of such Rights Certificate at the time of surrender) or until
it has been established to the Company's satisfaction that no such tax is
due.
SECTION 10. Preferred Shares Record Date. Each Person in whose name
any certificate for Preferred Shares or Common Shares or other securities is
issued upon the exercise or exchange of Rights shall for all purposes be deemed
to have become the holder of record of the Preferred Shares or Common Shares or
other securities, as the case may be, represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of any Purchase Price
(and any applicable transfer taxes) was made; provided, however, that, if the
date of such surrender and payment is a date upon which the transfer books of
the Company for the Preferred Shares or Common Shares or other securities, as
the case may be, are closed, such
-16-
Person shall be deemed to have become the record holder of such Preferred Shares
or Common Shares or other securities, as the case may be, on, and such
certificate shall be dated, the next succeeding Business Day on which the
transfer books of the Company for the Preferred Shares or Common Shares or other
securities, as the case may be, are open.
SECTION 11. Adjustments in Rights After There Is an Acquiring Person;
Exchange of Rights for Shares; Business Combinations.
(a) Upon a Person becoming an Acquiring Person, proper provision shall
be made so that each holder of a Right, except as provided in Section 7(e),
shall thereafter have a right to receive, upon exercise thereof for the
Purchase Price in accordance with the terms of this Rights Agreement, such
number of one one-hundredth (1/100th) of a Preferred Share as shall equal
the result obtained by multiplying the Purchase Price by a fraction, the
numerator of which is the number of one one-hundredth (1/100th) of a
Preferred Share for which a Right is then exercisable and the denominator
of which is 50% of the Market Value of the Common Shares on the date on
which a Person becomes an Acquiring Person. As soon as practicable after a
Person becomes an Acquiring Person (provided the Company shall not have
elected to make the exchange permitted by Section 11(b)(I) for all
outstanding Rights), the Company covenants and agrees to use its best
efforts to:
(I) prepare and file a registration statement under the Securities
Act, on an appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights;
(II) cause such registration statement to become effective as soon
as practicable after such filing;
(III) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the Expiration Date; and
(IV) qualify or register the Preferred Shares purchasable upon
exercise of the Rights under the blue sky or securities laws of such
jurisdictions as may be necessary or appropriate.
(b)(I) The Board of Directors of the Company may, at its option, at
any time after a Person becomes an Acquiring Person, mandatorily exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that shall have become null and void and nontransferable
pursuant to the provisions of Section 7(e)) for consideration per Right
consisting of either one-half of the securities that would be issuable at
such time upon the exercise of
-17-
one Right in accordance with Section 11(a) or, if applicable, Section
9(b)(B) or (C) or, if applicable the cash consideration specified in
Section 9(b)(A) (the consideration issuable per Right pursuant to this
Section 11(b)(I) being the "Exchange Consideration"). The Board of
Directors of the Company may, at its option, issue, in substitution for
Preferred Shares, Common Shares in an amount per Preferred Share equal to
the Formula Number (as defined in the Certificate of Designation) if there
are sufficient Common Shares issued but not outstanding or authorized but
unissued. If the Board of Directors of the Company elects to exchange all
the Rights for Exchange Consideration pursuant to this Section 11(b)(I)
prior to the physical distribution of the Rights Certificates, the
Corporation may distribute the Exchange Consideration in lieu of
distributing Rights Certificates, in which case for purposes of this Rights
Agreement holders of Rights shall be deemed to have simultaneously received
and surrendered for exchange Rights Certificates on the date of such
distribution.
(II) Any action of the Board of Directors of the Company ordering
the exchange of any Rights pursuant to Section 11(b)(I) shall be
irrevocable and, immediately upon the taking of such action and without any
further action and without any notice, the right to exercise any such Right
pursuant to Section 11(a) shall terminate and the only right thereafter of
a holder of such Right shall be to receive the Exchange Consideration in
exchange for each such Right held by such holder or, if the Exchange
Consideration shall not have been paid or issued, to exercise any such
Right pursuant to Section 11(c)(I). The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange to
all holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the Rights for the Exchange Consideration will be
effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which shall have become
null and void and nontransferable pursuant to the provisions of Section
7(e)) held by each holder of Rights.
(c)(I) In the event that, following a Distribution Date, directly or
indirectly, any transactions specified in the following clause (i), (ii) or
(iii) of this Section 11(c) (each such transaction being a "Business
Combination") shall be consummated:
-18-
(i) the Company shall consolidate with, or merge with and into,
any Acquiring Person or any Affiliate or Associate of an Acquiring
Person;
(ii) any Acquiring Person or any Affiliate or Associate of an
Acquiring Person shall merge with and into the Company and, in
connection with such merger, all or part of the Common Shares shall be
changed into or exchanged for capital stock or other securities of the
Company or of any Acquiring Person or Affiliate or Associate of an
Acquiring Person or cash or any other property; or
(iii) the Company shall sell, lease, exchange or otherwise
transfer or dispose of (or one or more of its Subsidiaries shall sell,
lease, exchange or otherwise transfer or dispose of), in one or more
transactions, the Major Part of the assets of the Company and its
Subsidiaries (taken as a whole) to any Acquiring Person or any
Affiliate or Associate of an Acquiring Person, then, in each such
case, proper provision shall be made so that each holder of a Right,
except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof for the Purchase Price in
accordance with the terms of this Rights Agreement, the securities
specified below (or, at such holder's option, the securities specified
in Section 11(a)):
(A) If the Principal Party in such Business Combination has
Registered Common Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof for the
Purchase Price in accordance with the terms of this Rights Agreement,
such number of Registered Common Shares of such Principal Party, free
and clear of all liens, encumbrances or other adverse claims, as shall
have an aggregate Market Value equal to the result obtained by
multiplying the Purchase Price by two;
(B) If the Principal Party involved in such Business
Combination does not have Registered Common Shares outstanding, each
Right shall thereafter represent the right to receive, upon the
exercise thereof for the Purchase Price in accordance with the terms
of this Rights Agreement, at the election of the holder of such Right
at the time of the exercise thereof, any of:
-19-
(1) such number of Common Shares of the Surviving Person in
such Business Combination as shall have an aggregate Book Value
immediately after giving effect to such Business Combination
equal to the result obtained by multiplying the Purchase Price by
two;
(2) such number of Common Shares of the Principal Party in
such Business Combination (if the Principal Party is not also the
Surviving Person in such Business Combination) as shall have an
aggregate Book Value immediately after giving effect to such
Business Combination equal to the result obtained by multiplying
the Purchase Price by two; or
(3) if the Principal Party in such Business Combination is
an Affiliate of one or more Persons which has Registered Common
Shares outstanding, such number of Registered Common Shares of
whichever of such Affiliates of the Principal Party has
Registered Common Shares with the greatest aggregate Market Value
on the date of consummation of such Business Combination as shall
have an aggregate Market Value on the date of such Business
Combination equal to the result obtained by multiplying the
Purchase Price by two.
(II) The Company shall not consummate any Business Combination unless
each issuer of Common Shares for which Rights may be exercised, as set
forth in this Section 11(c), shall have sufficient authorized Common Shares
that have not been issued or reserved for issuance (and which shall, when
issued upon exercise thereof in accordance with this Rights Agreement, be
validly issued, fully paid and nonassessable and free of preemptive rights,
rights of first refusal or any other restrictions or limitations on the
transfer or ownership thereof) to permit the exercise in full of the Rights
in accordance with this Section 11(c) and unless prior thereto:
(i) a registration statement under the Securities Act on an
appropriate form, with respect to the Rights and the Common Shares of
such issuer purchasable upon exercise of the Rights, shall be
effective under the Securities Act; and
-20-
(ii) the Company and each such issuer shall have:
(A) executed and delivered to the Rights Agent a supplemental
agreement providing for the assumption by such issuer of the
obligations set forth in this Section 11(c) (including the obligation
of such issuer to issue Common Shares upon the exercise of Rights in
accordance with the terms set forth in Sections 11(c)(I) and
11(c)(III)) and further providing that such issuer, at its own
expense, will use its best efforts to:
(1) cause a registration statement under the Securities Act
on an appropriate form, with respect to the Rights and the Common
Shares of such issuer purchasable upon exercise of the Rights, to
remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration Date;
(2) qualify or register the Rights and the Common Shares of
such issuer purchasable upon exercise of the Rights under the
blue sky or securities laws of such jurisdictions as may be
necessary or appropriate; and
(3) list the Rights and the Common Shares of such issuer
purchasable upon exercise of the Rights on each national
securities exchange on which the Common Shares were listed prior
to the consummation of the Business Combination or, if the Common
Shares were not listed on a national securities exchange prior to
the consummation of the Business Combination, on a national
securities exchange;
(B) furnished to the Rights Agent a written opinion of independent
counsel stating that such supplemental agreement is a valid, binding and
enforceable agreement of such issuer; and
(C) filed with the Rights Agent a certificate of a nationally
recognized firm of independent accountants setting forth the number of
Common Shares of such issuer which may be purchased upon the exercise of
each Right after the consummation of such Business Combination.
-21-
(III) After consummation of any Business Combination and subject to
the provisions of Section 11(c)(II), (i) each issuer of Common Shares for
which Rights may be exercised as set forth in this Section 11(c) shall be
liable for, and shall assume, by virtue of such Business Combination, all
the obligations and duties of the Company pursuant to this Rights
Agreement, (ii) the term "Company" shall thereafter be deemed to refer to
such issuer, (iii) each such issuer shall take such steps in connection
with such consummation as may be necessary to assure that the provisions
hereof (including the provisions of Sections 11(a) and 11(c)) shall
thereafter be applicable, as nearly as reasonably may be, in relation to
its Common Shares thereafter deliverable upon the exercise of the Rights,
and (iv) the number of Common Shares of each such issuer thereafter
receivable upon exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable
to the provisions of Sections 11 and 12 and the provisions of Section 7, 9
and 10 with respect to the Preferred Shares shall apply, as nearly as
reasonably may be, on like terms to any such Common Shares.
SECTION 12. Certain Adjustments.
(a) To preserve the actual or potential economic value of the Rights,
if at any time after the date of this Rights Agreement there shall be any
change in the Common Shares or the Preferred Shares, whether by reason of
stock dividends, stock splits, recapitalizations, mergers, consolidations,
combinations or exchanges of securities, split-ups, split-offs, spin-offs,
liquidations, other similar changes in capitalization, any distribution or
issuance of cash, assets, evidences of indebtedness or subscription rights,
options or warrants to holders of Common Shares or Preferred Shares, as the
case may be (other than distribution of the Rights or regular quarterly
cash dividends) or otherwise, then, in each such event the Board of
Directors of the Company shall make such appropriate adjustments in the
number of Preferred Shares (or the number and kind of other securities)
issuable upon exercise of each Right, the Purchase Price and Redemption
Price in effect at such time and the number of Rights outstanding at such
time (including the number of Rights or fractional Rights associated with
each Common Share) such that following such adjustment such event shall not
have had the effect of reducing or limiting the benefits the holders of the
Rights would have had absent such event.
(b) If, as a result of an adjustment made pursuant to Section 12(a),
the holder of any Right thereafter exercised shall become entitled to
receive any securities other than Preferred Shares, thereafter the number
of such securities so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the
-22-
provisions of Sections 11 and 12 and the provisions of Sections 7, 9 and 10
with respect to the Preferred Shares shall apply, as nearly as reasonably
may be, on like terms to any such other securities.
(c) All Rights originally issued by the Company subsequent to any
adjustment made to the amount of Preferred Shares or other securities
relating to a Right shall evidence the right to purchase, for the Purchase
Price, the adjusted number and kind of securities purchasable from time to
time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(d) Irrespective of any adjustment or change in the Purchase Price or
the number of Preferred Shares or number or kind of other securities
issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the terms which
were expressed in the initial Rights Certificates issued hereunder.
(e) In any case in which action taken pursuant to Section 12(a)
requires that an adjustment be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date the Preferred Shares and/or other securities, if any, issuable
upon such exercise over and above the Preferred Shares and/or other
securities, if any, issuable before giving effect to such adjustment;
provided, however, that the Company shall deliver to such holder a due xxxx
or other appropriate instrument evidencing such holder's right to receive
such additional securities upon the occurrence of the event requiring such
adjustment.
SECTION 13. Certificate of Adjustment. Whenever an adjustment is made
as provided in Section 11 or 12, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Rights Agent and with
each transfer agent for the Preferred Shares a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Rights Certificate (or, prior
to the Distribution Date, of the Common Shares) in accordance with Section 25.
The Rights Agent shall be fully protected in relying on any such certificate and
on any adjustment therein contained.
SECTION 14. Additional Covenants.
(a) Notwithstanding any other provision of this Rights Agreement, no
adjustment to the number of Preferred Shares (or fractions of a share) or
other securities for which a Right is exercisable or the number of Rights
outstanding or associated with each Common Share or any similar or other
-23-
adjustment shall be made or be effective if such adjustment would have the
effect of reducing or limiting the benefits the holders of the Rights would
have had absent such adjustment, including, without limitation, the
benefits under Sections 11 and 12, unless the terms of this Rights
Agreement are amended so as to preserve such benefits.
(b) The Company covenants and agrees that, after the Distribution
Date, except as permitted by Section 26, it will not take (or permit any
Subsidiary of the Company to take) any action if at the time such action is
taken it is intended or reasonably foreseeable that such action will reduce
or otherwise limit the benefits the holders of the Rights would have had
absent such action, including, without limitation, the benefits under
Sections 11 and 12. Any action taken by the Company during any period after
any Person becomes an Acquiring Person but prior to the Distribution Date
shall be null and void unless such action could be taken under this Section
14(b) from and after the Distribution Date. The Company shall not
consummate any Business Combination if any issuer of Common Shares for
which Rights may be exercised after such Business Combination in accordance
with Section 11(c) shall have taken or contemplated taking any action that
reduces or otherwise limits the benefits the holders of the Rights would
have had absent such action, including, without limitation, the benefits
under Sections 11 and 12.
SECTION 15. Fractional Rights and Fractional Shares.
(a) The Company may, but shall not be required to, issue fractions of
Rights or distribute Rights Certificates which evidence fractional Rights.
In lieu of such fractional Rights, the Company may pay to the registered
holders of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole Right. For purposes of this
Section 15(a), the current market value of a whole Right shall be the
closing price of the Rights (as determined pursuant to the second and third
sentences of the definition of Market Value contained in Section 1) for the
Trading Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable.
(b) The Company may, but shall not be required to, issue fractions of
Preferred Shares upon exercise of the Rights or distribute certificates
which evidence fractional Preferred Shares. In lieu of fractional Preferred
Shares, the Company may elect to (i) utilize a depository arrangement as
provided by the terms of the Preferred Shares or (ii) in the case of a
fraction of a Preferred Share (other than one one-hundredth (1/100th) of a
Preferred Share or any integral multiple thereof), pay to the registered
holders of Right Certificates at the time such Rights are exercised as
herein provided an amount in cash equal
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to the same fraction of the current market value of one Preferred Share, if
any are outstanding and publicly traded (or the Formula Number times the
current market value of one Common Share if the Preferred Shares are not
outstanding and publicly traded). For purposes of this Section 15(b), the
current market value of a Preferred Share (or Common Share) shall be the
closing price of a Preferred Share (or Common Share) (as determined
pursuant to the second and third sentences of the definition of Market
Value contained in Section 1) for the Trading Day immediately prior to the
date of such exercise. If, as a result of an adjustment made pursuant to
Section 12(a), the holder of any Right thereafter exercised shall become
entitled to receive any securities other than Preferred Shares, the
provisions of this Section 15(b) shall apply, as nearly as reasonably may
be, on like terms to such other securities.
(c) The Company may, but shall not be required to, issue fractions of
Common Shares upon exchange of Rights pursuant to Section 11(b), or to
distribute certificates which evidence fractional Common Shares. In lieu of
such fractional Common Shares, the Company may pay to the registered
holders of the Rights Certificates with regard to which such fractional
Common Shares would otherwise be issuable an amount in cash equal to the
same fraction of the current Market Value of one Common Share as of the
date on which a Person became an Acquiring Person.
(d) The holder of Rights by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right except as provided in this Section 15.
SECTION 16. Rights of Action.
(a) All rights of action in respect of this Rights Agreement are
vested in the respective registered holder of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the Common
Shares); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Rights Certificate (or, prior to
the Distribution Date, of the Common Shares) may, in his own behalf and for
his own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Rights Certificate
in the manner provided in such Rights Certificate and in this Rights
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Rights Agreement and shall be entitled to specific performance of the
obligations of any Person under, and injunctive relief
-25-
against actual or threatened violations of the obligations of any Person
subject to, this Rights Agreement.
(b) Any holder of Rights who prevails in an action to enforce the
provisions of this Rights Agreement shall be entitled to recover the
reasonable costs and expenses, including attorneys' fees, incurred in such
action.
SECTION 17. Transfer and Ownership of Rights and Rights Certificates.
(a) Prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares and the Rights
associated with the Common Shares shall be automatically transferred upon
the transfer of the Common Shares.
(b) After the Distribution Date, the Rights Certificates will be
transferable, subject to Section 7(e), only on the registry books of the
Rights Agent if surrendered at the principal office of the Rights Agent,
duly endorsed or accompanied by a proper instrument of transfer.
(c) The Company and the Rights Agent may deem and treat the Person in
whose name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Rights Certificates or the associated
certificate for Common Shares made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary.
SECTION 18. Rights Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Rights Certificate shall be entitled to vote or receive
dividends or be deemed, for any purpose, the holder of the Preferred Shares or
of any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a shareholder of the Company,
including, without limitation, any right to vote for the election of directors
or upon any matter submitted to shareholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders, or to receive dividends or other
distributions or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.
SECTION 19. Concerning the Rights Agent.
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(a) The Company agrees to pay to the Rights Agent, as shall be agreed
to in writing between the Company and the Rights Agent, compensation for
all services rendered by it hereunder from time to time and its reasonable
expenses and counsel fees and expenses and other disbursements incurred in
the administration and execution of this Rights Agreement and the exercise
and performance of its duties hereunder. The provisions of this Section
19(a) shall survive the expiration of the Rights and the termination of
this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Rights Agreement in reliance
upon any Rights Certificate or certificate for the Common Shares or for
other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, opinion,
instruction, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed and executed by the
proper Person or Persons.
SECTION 20. Merger or Consolidation or Change of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or corporate trust business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Rights Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto; provided
that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 22. In case, at the time such
successor Rights Agent shall succeed to the agency created by this Rights
Agreement, any of the Rights Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and, in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates in the name of the successor
Rights Agent; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Rights
Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
-27-
countersigned; and, in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name; and in
all such cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Rights Agreement.
SECTION 21. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Rights Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates (or, prior to the Distribution Date, of the Common Shares), by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel satisfactory to
it (who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken, suffered or omitted by it in good
faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person) be proved or established by the Company prior to taking,
refraining from taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating officer, the Chief
Financial Officer, a Vice President (whether preceded by any additional
title), the Treasurer or the Secretary of the Company and delivered to the
Rights Agent or by the directors of the Company whose vote would be
sufficient to redeem the Rights under Section 24. Such certificate shall
be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Rights Agreement in
reliance upon such certificate. In the event any such certificate signed
by such directors is inconsistent with any other such certificate, the
certificate signed by such directors shall control.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or wilful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Rights Agreement or in
the Rights Certificates (except as to its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
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(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Rights Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Rights Agreement
or in any Rights Certificate; nor shall it be responsible for any
adjustment required under the provisions of Section 11 or 12 or responsible
for the manner, method or amount of any such adjustment or the ascertaining
of the existence of facts that would require any such adjustment (except
with respect to the exercise of Rights evidenced by Rights Certificates
after actual notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares or Common Shares to be
issued pursuant to this Rights Agreement or any Rights Certificate or as to
whether any Preferred Shares or Common Shares will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably
be required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, a Vice President (whether preceded
by any additional title), the Secretary or the Treasurer of the Company or
from the directors of the Company whose vote would be sufficient to redeem
the Rights under Section 24, and to apply to such officers or directors for
advice and instructions in connection with its duties and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officers or directors or for any
delay in acting while waiting for those instructions. Any application by
the Rights Agent for written instructions from the Company may, at the
option of the Rights Agent, set forth in writing any action proposed to be
taken or omitted by the Rights Agent under this Agreement and the date on
and/or after which such action shall be taken or such omission shall be
effective. The Rights Agent shall not be liable for any action taken by,
or omission of, the Rights Agent in accordance with a proposal included in
such application on or after the date specified in such application (which
date shall not be less than three Business Days after the date any officer
of the Company actually receives such application, unless any such officer
shall
-29-
have consented in writing to any earlier date) unless, prior to taking any
such action (or the effective date in the case of an omission), the Rights
Agent shall have received written instructions in response to such
application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer, employee
or affiliate of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not the Rights Agent under this Rights Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct provided reasonable care was
exercised in the selection thereof.
(j) The Company agrees to indemnify and to hold the Rights Agent
harmless against any loss, liability, damage or expense (including
reasonable fees and expenses of legal counsel) which the Rights Agent may
incur in connection with this Rights Agreement; provided, however, that the
Rights Agent shall not be indemnified or held harmless with respect to any
such loss, liability, damage or expense incurred by the Rights Agent as a
result of, or arising out of, its own gross negligence, bad faith or wilful
misconduct. If any action, proceeding (including, but not limited to, any
governmental investigation), claim or dispute (collectively, a
"Proceeding") in respect of which indemnity may be sought is brought or
asserted against the Rights Agent, the Rights Agent shall promptly (and in
no event more than ten (10) days after receipt of written notice of such
Proceeding) notify the Company of such Proceeding. The failure of the
Rights Agent to so notify the Company shall not impair the Rights Agent's
ability to seek indemnification from the Company (but only for costs,
expenses and liabilities incurred after such notice) unless such failure
adversely affects the Company's ability to adequately oppose or defend such
Proceeding. Upon receipt of such notice from the Rights Agent, the Company
shall be entitled to participate in such Proceeding and, to the extent that
it shall so desire and provided no conflict of interest exists as specified
in (b) below or there are no other defenses available to the Rights Agent
as specified in (d) below, to assume the defense thereof with
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counsel reasonably satisfactory to the Rights Agent (in which case all
attorney's fees and expenses shall be borne by the Company and the Company
shall in good faith defend the Rights Agent). The Rights Agent shall have
the right to employ separate counsel in any such Proceeding and to
participate in the defense thereof, but the fees and expenses of such
counsel shall be borne by the Rights Agent unless (a) the Company agrees in
writing to pay such fees and expenses, (b) the Rights Agent shall have
reasonably and in good faith concluded that there is a conflict of interest
between the Company and the Rights Agent in the conduct of the defense of
such action, (c) the Company fails, within ten (10) days prior to the date
the first response or appearance is required to be made in such Proceeding,
to assume the defense of such Proceeding with counsel reasonably
satisfactory to the Rights Agent or (d) there are legal defenses available
to the Rights Agent that are different from or are in addition to those
available to the Company. No compromise or settlement of such Proceeding
may be effected by either party without the other party's consent unless
(i) there is no finding or admission of any violation of law and no effect
on any other claims that may be made against such other party and (ii) the
sole relief provided is monetary damages that are paid in full by the party
seeking the settlement. Neither party shall have any liability with
respect to any compromise or settlement effected without its consent, which
consent shall not be unreasonably withheld. The Company shall have no
obligation to indemnify and hold harmless the Rights Agent from any loss,
expense or liability incurred by the Rights Agent as a result of a default
judgment entered against the Rights Agent unless such judgment was entered
after the Company agreed, in writing, to assume the defense of such
Proceeding.
The provisions of this Section 21(j) shall survive expiration of the
Rights and the termination of this Agreement.
(k) The Rights Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more registered holders of
Rights Certificates shall furnish the Rights Agent with security and
indemnity to its satisfaction for any costs and expenses which may be
incurred.
(l) The Rights Agent shall not be liable for failure to perform any
duties except as specifically set forth herein and no implied covenants or
obligations shall be read into this Agreement against the Rights Agent,
whose duties and obligations are ministerial and shall be determined solely
by the express provisions hereof.
SECTION 22. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon
-31-
30 days' notice in writing mailed to the Company and to each transfer agent of
the Common Shares and the Preferred Shares by registered or certified mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Shares and the Preferred
Shares by registered or certified mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights Certificate
(or, prior to the Distribution Date, of the Common Shares) (who shall, with such
notice, submit his Rights Certificate or, prior to the Distribution Date, the
certificate representing his Common Shares, for inspection by the Company), then
the Rights Agent or the registered holder of any Rights Certificate (or, prior
to the Distribution Date, of the Common Shares) may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States,
the State of Indiana or the State of New York (or of any other state of the
United States so long as such corporation is authorized to conduct a stock
transfer or corporate trust business in the State of Indiana or the State of New
York), in good standing (where applicable) which is authorized under such laws
to exercise stock transfer or corporate trust powers and is subject to
supervision or examination by Federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000; provided that the principal transfer agent for the Common
Shares shall in any event be qualified to be the Rights Agent. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares and the
Preferred Shares, and mail a notice thereof in writing to the registered holders
of the Rights Certificates (or, prior to the Distribution Date, of the Common
Shares). Failure to give any notice provided for in this Section 22, however, or
any defect therein shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
SECTION 23. Issuance of Additional Rights and Rights Certificates.
Notwithstanding any of the provisions of this Rights Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change made in accordance with the provisions of this
Rights Agreement. In addition, in connection with the issuance or sale of Common
Shares following the Distribution Date and prior to the earlier of the
Redemption Date and the Expiration Date, the Company (a) shall, with respect
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to Common Shares so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company, and (b) may,
in any other case, if deemed necessary or appropriate by the Board of Directors
of the Company, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) no
such Rights Certificate shall be issued if, and to the extent that, the Company
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Company or the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
SECTION 24. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) such time as a Person becomes an Acquiring
Person and (ii) the Expiration Date, order the redemption of all, but not
fewer than all, the then outstanding Rights at the Redemption Price (the
date of such redemption being the "Redemption Date"), and the Company, at
its option, may pay the Redemption Price either in cash or Common Shares or
other securities of the Company deemed by the Board of Directors of the
Company, in the exercise of its sole discretion, to be at least equivalent
in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further
action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be
to receive the Redemption Price. Within 10 Business Days after the action
of the Board of Directors of the Company ordering the redemption of the
Rights, the Company shall give notice of such redemption to the holders of
the then outstanding Rights by mailing such notice to all such holders at
their last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Each such notice of redemption will
state the method by which payment of the Redemption Price will be made.
The notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the holder of Rights
receives such notice. In any case, failure to give such notice by mail, or
any defect in the notice, to any particular holder of Rights shall not
affect the sufficiency of the notice to other holders of Rights.
SECTION 25. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of a Rights Certificate
(or, prior to the
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Distribution Date, of the Common Shares) to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
Quality Dining, Inc.
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxx 00000
Attn: Chief Executive Officer
Subject to the provisions of Section 22, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the holder of a Rights
Certificate (or, prior to the Distribution Date, of the Common Shares) to or on
the Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Company) as follows:
KeyCorp Shareholder Services, Inc.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Attn: Administrative Officer
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to any holder of a Rights Certificate (or, prior
to the Distribution Date, of the Common Shares) shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the transfer agent
for the Common Shares.
SECTION 26. Supplements and Amendments. At any time prior to the
Distribution Date and subject to the last sentence of this Section 26, the
Company may, and the Rights Agent shall if the Company so directs, supplement or
amend any provision of this Rights Agreement (including, without limitation, the
date on which the Distribution Date shall occur, the definition of "Acquiring
Person", the time during which the Rights may be redeemed pursuant to Section 24
or any provision of the Certificate of Designation) without the approval of any
holder of the Rights. From and after the Distribution Date and subject to
applicable law, the Company may, and the Rights Agent shall if the Company so
directs, amend this Rights Agreement without the approval of any holders of
Rights Certificates (i) to cure any ambiguity or to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provision of this Rights Agreement or (ii) to make any other provisions in
regard to matters or questions arising hereunder which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
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holders of Rights Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person). Any supplement or amendment adopted during
any period after any Person has become an Acquiring Person but prior to the
Distribution Date shall be null and void unless such supplement or amendment
could have been adopted under the prior sentence from and after the Distribution
Date. Any supplement or amendment to this Rights Agreement duly approved by the
Company that does not amend Sections 19, 20, 21 or 22 in a manner adverse to the
Rights Agent shall become effective immediately upon execution by the Company,
whether or not also executed by the Rights Agent. The Rights Agent shall receive
prompt written notice from the Company of any amendment hereunder. In addition,
notwithstanding anything to the contrary contained in this Rights Agreement, no
supplement or amendment to this Rights Agreement shall be made which (a) reduces
the Redemption Price (except as required by Section 12(a)) or (b) provides for
an earlier Expiration Date. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section, the Rights Agent
shall execute such supplement or amendment. Notwithstanding any other provision
hereof, the Rights Agent's consent must be obtained regarding any amendment or
supplement pursuant to this Section 26 which alters the Rights Agent's rights or
duties.
SECTION 27. Successors. All the covenants and provisions of this
Rights Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 28. Benefits of Rights Agreement; Determinations and Actions
by the Board of Directors, etc.
(a) Nothing in this Rights Agreement shall be construed to give to
any Person other than the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date, of
the Common Shares) any legal or equitable right, remedy or claim under this
Rights Agreement; but this Rights Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date, of
the Common Shares).
(b) Except as explicitly otherwise provided in this Rights Agreement,
the Board of Directors of the Company shall have the exclusive power and
authority to administer this Rights Agreement and to exercise all rights
and powers specifically granted to the Board of Directors of the Company or
to the Company, or as may be necessary or advisable in the administration
of this Rights Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Rights Agreement and (ii)
make all determinations deemed necessary or advisable for the
administration of this Rights Agreement (including, without limitation, a
determination to redeem or
-35-
not redeem the Rights or to amend this Rights Agreement and whether there
is an Acquiring Person).
(c) Nothing contained in this Rights Agreement shall be deemed to be
in derogation of the obligation of the Board of Directors of the Company to
exercise its fiduciary duty. Without limiting the foregoing, nothing
contained herein shall be construed to suggest or imply that the Board of
Directors shall not be entitled to reject any tender offer, or to recommend
that holders of Common Shares reject any tender offer or other acquisition
proposal, or to take any other action (including, without limitation, the
commencement, prosecution, defense or settlement of any litigation and the
submission of additional or alternative offers or other proposals) with
respect to any tender offer or other acquisition proposal that the Board of
Directors believes is necessary or appropriate in the exercise of such
fiduciary duty.
SECTION 29. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
SECTION 30. Governing Law. THIS RIGHTS AGREEMENT AND EACH RIGHT
CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAW
OF THE STATE OF INDIANA AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE AND
PERFORMED ENTIRELY WITHIN SUCH STATE, PROVIDED, HOWEVER, THAT THE RIGHTS AND
OBLIGATIONS OF THE RIGHTS AGENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF OHIO.
SECTION 31. Counterparts; Effectiveness. This Rights Agreement may
be executed in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument. This Rights Agreement
shall be effective as of the Close of Business on the date hereof.
SECTION 32. Descriptive Headings. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
of this Rights Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed as of the day and year first above written.
QUALITY DINING, INC.
By: /s/ Xxxxx X. Xxxxxxx
---------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President-Finance
KEYCORP SHAREHOLDER SERVICES, INC.,
as Rights Agent,
By: /s/ Xxxxx Xxxxxxx
---------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Assistant Vice President
-37-
EXHIBIT A
ARTICLES OF AMENDMENT SETTING FORTH
THE DESIGNATION, VOTING POWERS, PREFERENCES AND
RELATIVE PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS
AND QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF
SERIES B PARTICIPATING CUMULATIVE PREFERRED STOCK
OF QUALITY DINING, INC.
Pursuant to Section 23-1-25-1 and Section 23-1-25-2 of the Indiana
Business Corporation Law, Quality Dining, Inc. (the "Corporation"), a
corporation organized and existing under the Indiana Business Corporation Law,
in accordance with the provisions of Section 23-1-18-1 and Section 23-1-38-6
thereof, DOES HEREBY CERTIFY:
That, pursuant to the authority conferred upon the Board of Directors
of the Corporation by the Restated Articles of Incorporation of the Corporation
(the "Articles of Incorporation"), the Board of Directors of the Corporation on
March 27, 1997, adopted the following resolution amending the Articles of
Incorporation to create a series of Preferred Stock designated as Series B
Participating Cumulative Preferred Stock:
RESOLVED that pursuant to the authority vested in the Board of
Directors of the Corporation in the Articles of Incorporation, the
designations, voting powers, preferences and relative, participating,
optional and other special rights and qualifications, limitations or
restrictions of a series of Preferred Stock be, and they hereby are, fixed
as follows:
SECTION 1. Designation and Number of Shares. The shares of such
series shall be designated as "Series B Participating Cumulative Preferred
Stock" (the "Series B Preferred Stock"), without par value. The number of shares
initially constituting the Series B Preferred Stock shall be 180,000; provided,
however, that, if more than a total of 180,000 shares of Series B Preferred
Stock shall be issuable upon the exercise of Rights (the "Rights") issued
pursuant to that Rights Agreement between the Corporation and KeyCorp
Shareholder Services, Inc., as Rights Agent (the "Rights Agreement"), the Board
of Directors of the Corporation, pursuant to Section 23-1-25-2(d) of the Indiana
Business Corporation Law, shall direct by resolution or resolutions that
articles of amendment be properly executed and delivered to the Secretary of
State for the State of Indiana for filing in accordance with the provisions of
Section 23-1-18-1 and Section 23-1-38-6 thereof, providing for the total number
of shares of Series B Preferred Stock authorized to be issued to be increased
(to the extent that the Articles of Incorporation then permit) to the largest
number of whole shares (rounded up to the nearest whole number) issuable upon
exercise of such Rights.
SECTION 2. Dividends or Distributions.
(a) Subject to the prior and superior rights of the holders of shares
of any other series of Preferred Stock or other class of capital stock of
the
Corporation ranking prior and superior to the shares of Series B Preferred
Stock with respect to dividends, the holders of shares of the Series B
Preferred Stock shall be entitled to receive, when, as and if declared by
the Board of Directors, out of the assets of the Corporation legally
available therefor, (1) quarterly dividends payable in cash on the last day
of each fiscal quarter in each year, or such other dates as the Board of
Directors of the Corporation shall approve (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or a
fraction of a share of Series B Preferred Stock, in the amount of $.01 per
whole share (rounded to the nearest cent) less the amount of all cash
dividends declared on the Series B Preferred Stock pursuant to the
following clause (2) since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series B
Preferred Stock (the total of which shall not, in any event, be less than
zero) and (2) dividends payable in cash on the payment date for each cash
dividend declared on the outstanding shares of Common Stock, without par
value, and non-voting Common Stock, without par value (collectively, the
"Common Stock") in an amount per whole share (rounded to the nearest cent)
equal to the Formula Number (as hereinafter defined) then in effect times
the cash dividends then to be paid on each share of Common Stock. In
addition, if the Corporation shall pay any dividend or make any
distribution on the Common Stock payable in assets, securities or other
forms of noncash consideration (other than dividends or distributions
solely in shares of Common Stock), then, in each such case, the Corporation
shall simultaneously pay or make on each outstanding whole share of Series
B Preferred Stock a dividend or distribution in like kind equal to the
Formula Number then in effect times such dividend or distribution on each
share of the Common Stock. As used herein, the "Formula Number" shall be
100; provided, however, that, if at any time hereafter, the Corporation
shall (i) declare or pay any dividend on the Common Stock payable in shares
of Common Stock or make any distribution on the Common Stock in shares of
Common Stock, (ii) subdivide (by a stock split or otherwise) the
outstanding shares of Common Stock into a larger number of shares of Common
Stock or (iii) combine (by a reverse stock split or otherwise) the
outstanding shares of Common Stock into a smaller number of shares of
Common Stock, then in each such event the Formula Number shall be adjusted
to a number determined by multiplying the Formula Number in effect
immediately prior to such event by a fraction, the numerator of which is
the number of shares of Common Stock that are outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that are outstanding immediately prior to such event (and rounding
the result to the nearest whole number); and provided further, that, if at
any time hereafter the Distribution Record Date, the Corporation shall
issue any shares
-2-
of its capital stock in a merger, reclassification, or change of the
outstanding shares of Common Stock, then in each such event the Formula
Number shall be appropriately adjusted to reflect such merger,
reclassification or change so that each share of Preferred Stock continues
to be the economic equivalent of a Formula Number of shares of Common Stock
prior to such merger, reclassification or change.
(b) The Corporation shall declare a dividend or distribution on the
Series B Preferred Stock as provided in Section 2(a) immediately prior to
or at the same time it declares a dividend or distribution on the Common
Stock (other than a dividend or distribution solely in shares of Common
Stock); provided, however, that, in the event no dividend or distribution
(other than a dividend or distribution in shares of Common Stock) shall
have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $.01 per share on the Series B Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date. The Board of Directors may fix a record date for the determination of
holders of shares of Series B Preferred Stock entitled to receive a
dividend or distribution declared thereon, which record date shall be the
same as the record date for any corresponding dividend or distribution on
the Common Stock.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Preferred Stock from and after the Quarterly Dividend
Payment Date next preceding the date of original issue of such shares of
Series B Preferred Stock; provided, however, that dividends on such shares
which are originally issued after the record date for the determination of
holders of shares of Series B Preferred Stock entitled to receive a
quarterly dividend and on or prior to the next succeeding Quarterly
Dividend Payment Date shall begin to accrue and be cumulative from and
after such Quarterly Dividend Payment Date. Notwithstanding the foregoing,
dividends on shares of Series B Preferred Stock which are originally issued
prior to the record date for the determination of holders of shares of
Series B Preferred Stock entitled to receive a quarterly dividend on the
first Quarterly Dividend Payment Date shall be calculated as if cumulative
from and after the last day of the fiscal quarter next preceding the date
of original issuance of such shares. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series B Preferred Stock in
an amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding.
(d) So long as any shares of the Series B Preferred Stock are
outstanding, no dividends or other distributions shall be declared, paid or
-3-
distributed, or set aside for payment or distribution, on the Common Stock
unless, in each case, the dividend required by this Section 2 to be
declared on the Series B Preferred Stock shall have been declared.
(e) The holders of the shares of Series B Preferred Stock shall not
be entitled to receive any dividends or other distributions except as
provided herein.
SECTION 3. Voting Rights. The holders of shares of Series B
Preferred Stock shall have the following voting rights:
(a) Each holder of Series B Preferred Stock shall be entitled to a
number of votes equal to the Formula Number then in effect, for each share
of Series B Preferred Stock held of record on each matter on which holders
of the Common Stock or shareholders generally are entitled to vote,
multiplied by the maximum number of votes per share which any holder of the
Common Stock or shareholders generally then have with respect to such
matter (assuming any holding period or other requirement to vote a greater
number of shares is satisfied).
(b) Except as otherwise provided herein or by applicable law, the
holders of shares of Series B Preferred Stock and the holders of shares of
Common Stock shall vote together as one class for the election of directors
of the Corporation and on all other matters submitted to a vote of
shareholders of the Corporation.
(c) If, at the time of any annual meeting of shareholders for the
election of directors, the equivalent of six quarterly dividends (whether
or not consecutive) payable on any share or shares of Series B Preferred
Stock are in default, the number of directors constituting the Board of
Directors of the Corporation shall be increased by two. In addition to
voting together with the holders of Common Stock for the election of other
directors of the Corporation, the holders of record of the Series B
Preferred Stock, voting separately as a class to the exclusion of the
holders of Common Stock, shall be entitled at said meeting of shareholders
(and at each subsequent annual meeting of shareholders), unless all
dividends in arrears have been paid or declared and set apart for payment
prior thereto, to vote for the election of two directors of the
Corporation, the holders of any Series B Preferred Stock being entitled to
cast a number of votes per share of Series B Preferred Stock equal to the
Formula Number. Until the default in payments of all dividends which
permitted the election of said directors shall cease to exist, any director
who shall have been so elected pursuant to the next preceding sentence may
be removed at any time, either with or without cause, only by the
affirmative vote of the holders of the
-4-
shares of Series B Preferred Stock at the time entitled to cast a majority
of the votes entitled to be cast for the election of any such director at a
special meeting of such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such holders. If and when such
default shall cease to exist, the holders of the Series B Preferred Stock
shall be divested of the foregoing special voting rights, subject to
revesting in the event of each and every subsequent like default in
payments of dividends. Upon the termination of the foregoing special voting
rights, the terms of office of all persons who may have been elected
directors pursuant to said special voting rights shall forthwith terminate,
and the number of directors constituting the Board of Directors shall be
reduced by two. The voting rights granted by this Section 3(c) shall be in
addition to any other voting rights granted to the holders of the Series B
Preferred Stock in this Section 3.
(d) Except as provided herein, in Section 11 or by applicable law,
holders of Series B Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for authorizing
or taking any corporate action.
SECTION 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series B Preferred
Stock outstanding shall have been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Preferred
Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series B
Preferred Stock, except dividends paid ratably on the Series B
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
-5-
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series B
Preferred Stock; provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon liquidation, dissolution or winding
up) to the Series B Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series B Preferred Stock, or any shares of stock ranking on a
parity with the Series B Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (a) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. Liquidation Rights. Upon the liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series B
Preferred Stock unless, prior thereto, the holders of shares of Series B
Preferred Stock shall have received an amount equal to the accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (x) $.01 per whole share or
(y) an aggregate amount per share equal to the Formula Number then in effect
times the aggregate amount to be distributed per share to holders of Common
Stock or (2) to the holders of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series B Preferred
Stock, except distributions made ratably on the Series B Preferred Stock and all
other such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or winding
up; provided that in no event shall the amount or amounts, if any, exceed $100
per share plus accrued dividends in the case of involuntary liquidation,
dissolution or winding up of the Corporation.
-6-
SECTION 6. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, then in any such case the then
outstanding shares of Series B Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share equal to the Formula
Number then in effect times the aggregate amount of stock, securities, cash or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is exchanged or changed. In the event both this
Section 6 and Section 2 appear to apply to a transaction, this Section 6 will
control.
SECTION 7. No Redemption; No Sinking Fund.
(a) The shares of Series B Preferred Stock shall not be subject to
redemption by the Corporation or at the option of any holder of Series B
Preferred Stock; provided, however, that the Corporation may purchase or
otherwise acquire outstanding shares of Series B Preferred Stock in the
open market or by offer to any holder or holders of shares of Series B
Preferred Stock.
(b) The shares of Series B Preferred Stock shall not be subject to or
entitled to the operation of a retirement or sinking fund.
SECTION 8. Ranking. The Series B Preferred Stock shall rank junior to
all other series of Preferred Stock of the Corporation, unless the Board of
Directors shall specifically determine otherwise in fixing the powers,
preferences and relative, participating, optional and other special rights of
the shares of such series and the qualifications, limitations or restrictions
thereof.
SECTION 9. Fractional Shares. The Series B Preferred Stock shall be
issuable upon exercise of the Rights issued pursuant to the Rights Agreement in
whole shares or in any fraction of a share that is one one-hundredth (1/100th)
of a share or any integral multiple of such fraction which shall Entitle the
holder, in proportion to such holder's fractional shares, to receive dividends,
exercise voting rights, participate in distributions and to have the benefit of
all other rights of holders of Series B Preferred Stock. In lieu of fractional
shares, the Corporation, prior to the first issuance of a share or a fraction of
a share of Series B Preferred Stock, may elect (1) to make a cash payment as
provided in the Rights Agreement for fractions of a share other than one one-
hundredth (1/100th) of a share or any integral multiple thereof or (2) to issue
depository receipts evidencing such authorized fraction of a share of Series B
Preferred Stock pursuant to an appropriate agreement between the Corporation and
a depository selected by the Corporation; provided that such agreement shall
provide that the holders of such depository receipts shall have all the rights,
privileges and preferences to which they are entitled as holders of the Series B
Preferred Stock.
-7-
SECTION 10. Reacquired Shares. Any shares of Series B Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock, without designation as to series until such shares are once
more designated as part of a particular series by the Board of Directors
pursuant to the Articles of Incorporation.
SECTION 11. Amendment. None of the powers, preferences and relative,
participating, optional and other special rights of the Series B Preferred Stock
as provided herein or in the Articles of Incorporation shall be amended in any
manner which would alter or change the powers, preferences, rights or privileges
of the holders of Series B Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least 66-2/3% of the
outstanding shares of Series B Preferred Stock, voting as a separate class;
provided, however, that no such amendment approved by the holders of at least
66-2/3% of the outstanding shares of Series B Preferred Stock shall be deemed to
apply to the powers, preferences, rights or privileges of any holder of shares
of Series B Preferred Stock originally issued upon exercise of a Right after the
time of such approval without the approval of such holder.
The foregoing amendment was duly adopted by the Board of Directors of
the Corporation pursuant to Section 23-1-25-2(d) and Section 23-1-38-2(7) of the
Indiana Business Corporation Law, and, accordingly, shareholder action was not
required.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be duly executed in its corporate name on this 31st day of March,
1997.
QUALITY DINING, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Senior Vice President-Finance
-8-
Attest:
/s/ Xxxx X. Xxxxx
---------------------------------
Name: Xxxx X. Xxxxx
Title: Senior Vice President,
General Counsel and Secretary
-9-
EXHIBIT B
[Form of Rights Certificate]
Certificate No. [R]-
__________ Rights
NOT EXERCISABLE AFTER MARCH 27, 2007, OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID
AND NONTRANSFERABLE.
Rights Certificate
QUALITY DINING, INC.
This certifies that ______________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of March 27, 1997 (the "Rights
Agreement"), between Quality Dining, Inc., an Indiana corporation (the
"Company"), and KeyCorp Shareholder Services, Inc., a national banking
association, as Rights Agent (the "Rights Agent"), unless the Rights evidenced
hereby shall have been previously redeemed by the Company, to purchase from the
Company at any time after the Distribution Date (as defined in the Rights
Agreement) and prior to 5:00 p.m., New York City time, on the 10th anniversary
of the date of the Rights Agreement (the "Expiration Date"), at the designated
office of the Rights Agent, or its successors as Rights Agent, in Cleveland,
Ohio, one one-hundredth (1/100th) of a fully paid, nonassessable share of Series
B Participating Cumulative Preferred Stock, without par value, of the Company
(the "Preferred Shares"), at a purchase price per one one-hundredth (1/100th) of
a share equal to $______ (the "Purchase Price") payable in cash, upon
presentation and surrender of this Rights Certificate with the Form of Election
to Purchase duly executed.
The Purchase Price and the number and kind of shares which may be
purchased upon exercise of each Right evidenced by this Rights Certificate, as
set forth above, are the Purchase Price and the number and kind of shares which
may be so purchased as of the date hereof. As provided in the Rights Agreement,
the Purchase Price and the number and kind of shares which may be purchased upon
the exercise of each Right evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events.
If the Rights evidenced by this Rights Certificate are at any time
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and nontransferable and the holder of any such
Right (including any purported transferee or subsequent holder) shall not have
any right to exercise or transfer any such Right.
This Rights Certificate is subject to all the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
reference to the Rights Agreement is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Rights Certificates. Copies
of the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are also available from the Company upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal stock transfer or corporate trust office of the
Rights Agent, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number and kind of shares as the Rights evidenced by
the Rights Certificate or Rights Certificates surrendered shall have entitled
such holder to purchase. If this Rights Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Rights Certificate may be redeemed by the Company at its
option at a redemption price (in cash or shares of Common Stock or other
securities of the Company deemed by the Board of Directors to be at least
equivalent in value) of $.01 per Right (which amount shall be subject to
adjustment as provided in the Rights Agreement) at any time prior to the earlier
of (i) such time as a Person becomes an Acquiring Person and (ii) the Expiration
Date.
The Company may, but shall not be required to, issue fractions of
Preferred Shares or distribute certificates which evidence fractions of
Preferred Shares upon the exercise of any Right or Rights evidenced hereby. In
lieu of issuing fractional shares, the Company may elect to make a cash payment
as provided in the Rights Agreement for fractions of a share other than one one-
hundredth (1/100th) of a share or any integral multiple thereof or to issue
certificates or utilize a depository arrangement as provided in the terms of the
Rights Agreement and the Preferred Shares.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company, including, without
-2-
limitation, any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of meetings or other actions
affecting shareholders (except as provided in the Rights Agreement), or to
receive dividends or other distributions or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in accordance with the provisions of the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by an authorized signatory of the
Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of:
QUALITY DINING, INC.
By:
---------------------------------------
Name:
Title:
Attest:
----------------------------------
Name:
Title:
Date of countersignature:
Countersigned:
KEYCORP SHAREHOLDER SERVICES, INC.,
as Rights Agent,
By:
-----------------------------
Authorized Signatory
-3-
[On Reverse Side of Rights Certificate]
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed by the registered holder if
such holder desires to exercise the Rights
represented by this Rights Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise __________
Rights represented by this Rights Certificate to purchase the Preferred Shares
(or other shares) issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name of:
Please insert social security
or other identifying number
-------------------------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------------------------
-4-
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
-------------------------------------------------------------------------------
(Please print name and address)
-------------------------------------------------------------------------------
Dated: , 19
--------------- ---
----------------------------------------------
Signature
Signature Guaranteed:
-5-
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED hereby sells,
-------------------------------------
assigns and transfer unto
------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________________
Attorney, to transfer the within Rights Certificate on the books of the within-
named Corporation, with full power of substitution.
Dated: 19
---------------, --
------------------------------------------
Signature
Signature Guaranteed:
The undersigned hereby certifies that (1) the Rights evidenced by this
Rights Certificate are not being sold, assigned or transferred by or on behalf
of a Person who is or was an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement), (2) this Rights
Certificate is not being sold, assigned or transferred to or on behalf of any
such Acquiring Person, Affiliate or Associate and (3) after inquiry and to the
best knowledge of the undersigned, the undersigned did not acquire the Rights
evidenced by this Rights Certificate from any Person who is or was an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement).
------------------------------------------
Signature
-6-
NOTICE
------
The signature on the foregoing Form of Election to Purchase or Form of
Assignment must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
-7-
