SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January
26,
1995
RYAN'S FAMILY STEAK HOUSES, INC.
(Exact name of registrant as specified in its charter)
South Carolina 0-10943 57-
0657895
(State or other (Commission (IRS
Employer
jurisdiction of File Number)
Identification
incorporation)
Number)
405 Lancaster Avenue
P. O. Box 100
Greer, SC 29652
(Address of principal executive offices; zip code)
Registrant's telephone number, including area code: 803 879-
1000
(Former name or former address, if changed since last
report)
Item 5. Other Events
On January 26, 1995 the Board of Directors of Ryan's
Family
Steak Houses, Inc. (the "Company") declared a dividend
distribution of one Common Stock Purchase Right for each
outstanding share of Common Stock of the Company to
stockholders
of record at the close of business on February 10, 1995.
Each
Right entitles the registered holder to purchase from the
Company
one half share of Common Stock, $1.00 par value per share
(the
"Common Stock"), at a cash exercise price of $25 per half
share,
subject to adjustment. The description and terms of the
Rights
are set forth in a Shareholder Rights Agreement between the
Company and Wachovia Bank of North Carolina, N.A., as Rights
Agent.
Initially, the Rights will not be exercisable, will be
attached to all outstanding shares of Common Stock, and no
separate Right Certificates will be distributed. The Rights
will
separate from the Common Stock and a Distribution Date will
occur
upon the earliest of (i) 10 days following a public
announcement
that a person or group of affiliated or associated persons
(an
"Acquiring Person") (other than an Exempt Person as defined
in
the Agreement) has acquired beneficial ownership of 15% or
more
of the outstanding shares of Common Stock (the date of said
announcement being referred to as the "Share Acquisition
Date")
and (ii) 10 business days following the commencement of a
tender
offer or exchange offer that would result in a Person or
group
owning 15% or more of the outstanding shares of Common
Stock.
Until the Distribution Date (or earlier redemption or
expiration of the Rights), (a) the Rights will be evidenced
by
the Common Stock certificates and will be transferred with
and
only with such Common Stock certificates, (b) new Common
Stock
certificates issued after February 10, 1995 will contain a
notation incorporating the Shareholder Rights Agreement by
reference, and (c) the surrender for transfer of any
certificates
for Common Stock will also constitute the transfer of the
Rights
associated with the Common Stock represented by such
certificate.
The Rights are not exercisable until the Distribution
Date
and will expire at the close of business on February 10,
2005
unless previously redeemed by the Company as described
below.
As soon as practicable after the Distribution Date,
Right
Certificates will be mailed to holders of record of Common
Stock
as of the close of business on the Distribution Date and,
thereafter, the separate Right Certificates alone will
represent
the Rights. Except as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that (i) a Person acquires beneficial
ownership
of 15% or more of the Company's Common Stock, (ii) the
Company is
the surviving corporation in a merger with an Acquiring
Person or
any Affiliate or Associate and the Common Stock is not
changed or
exchanged, (iii) an Acquiring Person engages in one of a
number
of self-dealing transactions specified in the Shareholder
Rights
Agreement, or (iv) an event occurs which results in an
Acquiring
Person's ownership interest being increased by more than 1%
(e.g., a reverse stock split), proper provision will be made
so
that each holder of a Right will thereafter have the right
to
receive upon exercise thereof at the then current exercise
price,
that number of shares of Common Stock (or in certain
circumstances, cash, property, or other securities of the
Company) having a market value of two times such exercise
price.
However, the Rights are not exercisable following the
occurrence
of any of the events set forth above until such time as the
Rights are no longer redeemable as set forth below.
Notwithstanding any of the foregoing, rights that are or
were
beneficially owned by an Acquiring Person shall become null
and
void.
In the event that, at any time following the Share
Acquisition Date, (i) the Company is acquired in a merger or
other business combination transaction or (ii) 50% or more
of the
Company's assets or earning power is sold, each holder of a
Right
shall thereafter have the right to receive, upon exercise,
common
stock of the acquiring company having a market value equal
to two
times the exercise price of the Right.
At any time after any person becomes an Acquiring
Person and
prior to such the time such Person, together with its
Affiliates
and Associates, becomes the Beneficial Owner of 50% or more
of
the outstanding Common Stock, the Board of Directors of the
Company may exchange the Rights (other than Rights which
have
become void), in whole or in part, at the exchange rate of
one
share of Common Stock per Right, subject to adjustment as
provided in the Rights Agreement.
The exercise price payable, and the number of shares of
Common Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time
to
time to prevent dilution (i) in the event of a stock
dividend on,
or a subdivision, combination or reclassification of, the
Common
Stock, (ii) if holders of the Common Stock are granted
certain
rights or warrants to subscribe for Common Stock or
securities
convertible into Common Stock at less than the current
market
price of the Common Stock, or (iii) upon the distribution to
holders of the Common Stock of evidence of indebtedness or
assets
(excluding regular quarterly cash dividends) or of
subscription
rights or warrants (other than those referred to above).
With certain exceptions, no adjustment in the exercise
price
will be required until cumulative adjustments amount to at
least
1% of the exercise price. No fractional shares of Common
Stock
will be issued and, in lieu thereof, an adjustment, in cash
will
be made based on the fair market value of the Common Stock
on the
last trading date prior to the date of exercise.
The Rights may be redeemed in whole, but not in part,
at a
price of $.001 per Right (payable in cash, Common Stock or
other
consideration deemed appropriate by the Board of Directors)
by
the Board of Directors at any time prior to the close of
business
on the tenth day after the Share Acquisition Date or the
final
expiration Date of the Rights (whichever is earlier);
provided
that under certain circumstances, the Rights may not be
redeemed
unless there are Disinterested Directors in office and such
redemption is approved by a majority of such Disinterested
Directors. After the redemption period has expired, the
Company's right of redemption may be reinstated upon the
approval
of the Board of Directors if an Acquiring Person reduces his
beneficial ownership to 10% or less of the outstanding
shares of
Common Stock in a transaction or series of transactions not
involving the Company and there are no other Acquiring
Persons.
Immediately upon the action of the Board of Directors
ordering
redemption of the Rights, the Rights will terminate and
thereafter the only right of the holders of Rights will be
to
receive the redemption price.
Until a Right is exercised, the holder will have no
rights
as a stockholder of the Company (beyond those as an existing
stockholder), including the right to vote or to receive
dividends. While the distribution of the Rights will not be
taxable to stockholders or to the Company, stockholders may,
depending upon the circumstances, recognize taxable income
in the
event that the Rights become exercisable for Common Stock
(or
other consideration) of the Company or for common stock of
an
acquiring company as set forth above.
Any of the provisions of the Rights Agreement may be
amended
by the Board of Directors of the Company prior to the
Distribution Date. After the Distribution Date, the
provisions
of the Rights Agreement, other than those relating to the
principal economic terms of the Rights, may be amended by
the
Board to cure any ambiguity, defect or inconsistency, to
make
changes which do not adversely affect the interests of
holders of
Rights (excluding the interests of any Acquiring Person), or
to
shorten or lengthen any time period under the Rights
Agreement.
Amendments adjusting time periods may, under certain
circumstances, require the approval of a majority of
Disinterested Directors, or otherwise be limited.
A copy of the Shareholder Rights Agreement is included
herewith as an Exhibit. This summary description of the
Rights
does not purport to be complete and is qualified in its
entirety
by reference to the Shareholder Rights Agreement.
Capitalized
terms used in the foregoing which are defined in the Rights
Agreement have the same meaning as in the Rights Agreement.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
(1) Press release dated January 27, 1995
(2) Shareholder Rights Agreement dated
January
26, 1995.
SIGNATURE
Pursuant to the requirements of the Securities Exchange
Act
of 1934, the registrant has duly caused this report to be
signed
on its behalf by the undersigned hereunto duly authorized.
RYAN'S FAMILY STEAK HOUSES, INC.
(Registrant)
By: /s/ Charles D. Way
Name: Charles D. Way
Title: Chairman and CEO
Date: February 3, 1995
EXHIBIT 1
Contact: Fred T. Grant, Jr. For Immediate
Release
Vice President - Finance January 27,
1995
RYAN'S FAMILY STEAK HOUSES, INC.
ADOPTS SHAREHOLDER RIGHTS PLAN
_____________
GREER, SOUTH CAROLINA -- Ryan's Family Steak Houses, Inc.
(NASDAQ:RYAN) today announced that its Board of Directors
adopted
a Shareholder Rights Plan, pursuant to which stock purchase
rights will be distributed as a dividend to its common
stockholders at a rate of one Right for each share of common
stock held of record as of February 10, 1995.
The Rights Plan is designed to enhance the Board's
ability
to prevent an acquiror from depriving stockholders of the
long-
term value of their investment and to protect shareholders
against attempts to acquire the Company by means of unfair
or
abusive takeover tactics that have been prevalent in many
unsolicited takeover attempts.
This action is not taken in response to any pending or
threatened takeover effort to acquire the Company.
Under the Rights Plan, the Rights will initially
represent
the right to purchase one-half share of the Company's common
stock for $25. The Rights will become exercisable only if a
person or a group acquires ownership or voting power or
commences
a tender offer for 15% or more of the Company's common
stock.
Until they become exercisable, the Rights attach to and
trade
with the Company's common stock. The Rights will expire
February
10, 2005. The Rights may be redeemed by the continuing
members
of the Board at $.001 per Right under certain circumstances
outlined in the Plan. Prior to their exercise, the Rights
will
not be taxable to the Company's shareholders.
In the event that a person or group (an "Acquiring
Person")
acquires ownership or voting power with respect to 15% of
the
Company's common stock, rights would then be modified to
represent the right to receive for the exercise price the
Company
common stock having a value worth twice the exercise price.
In
the event that the Company is involved in a merger or other
business combination at any time after an Acquiring Person
has
acquired 15% or more of the Company's common stock, the
Rights
will be modified so as to entitle a holder to buy a number
of
shares of common stock of the acquiring entity having a
market
value of twice the exercise price of each Right.
All Rights held or acquired by an Acquiring Person
acquiring
15% or more of the Company's shares are void.
EXHIBIT 2
RYAN'S FAMILY STEAK HOUSES, INC.
and
WACHOVIA BANK OF NORTH CAROLINA, N.A.,
as Rights Agent
SHAREHOLDER RIGHTS AGREEMENT
JANUARY 26, 1995
Table of Contents
Section
Page
1 Certain Definitions..................................
3
2 Appointment of Rights Agent..........................
7
3 Issue of Right Certificates..........................
7
4 Form of Right Certificates...........................
9
5 Countersignature and Registration....................
10
6 Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost
or Stolen Right Certificates.......................
11
7 Exercise of Rights; Exercise Price; Expiration
Date of Rights.....................................
11
8 Cancellation and Destruction of Right Certificates...
13
9 Reservation and Availability of Common Stock.........
13
10 Common Stock Record Date.............................
15
11 Adjustment of Exercise Price, Number and Kind of
Shares or Number of Rights.........................
15
12 Certificate of Adjusted Exercise Price or Number
of Shares..........................................
24
13 Consolidation, Merger or Sale or Transfer of
Assets or Earning Power............................
24
14 Fractional Rights and Fractional Shares..............
27
15 Rights of Action.....................................
28
16 Agreement of Right Holders...........................
29
17 Right Certificate Holder Not Deemed Shareholder......
29
18 Concerning the Rights Agent..........................
30
19 Merger or Consolidation or Change of Name of
Rights Agent.......................................
30
20 Duties of Rights Agent...............................
31
21 Change of Rights Agent...............................
33
22 Issuance of New Right Certificates...................
34
23 Redemption...........................................
34
24 Exchange.............................................
36
25 Notice of Certain Events.............................
37
26 Notices..............................................
38
27 Supplements and Amendments...........................
39
28 Successors...........................................
39
29 Determinations and Actions by the Board of Directors.
39
30 Benefits of this Agreement...........................
40
31 Severability.........................................
40
32 Governing Law........................................
40
33 Counterparts.........................................
41
34 Descriptive Headings...............................
41
Exhibit A -- Form of Right Certificate
Exhibit B -- Form of Summary of Rights
SHAREHOLDER RIGHTS AGREEMENT
Shareholder Rights Agreement (as the same may from time
to time be
amended or supplemented, this "Agreement"), dated as of
January 26, 1995,
between Ryan's Family Steak Houses, Inc., a South Carolina
corporation
(the "Company"), and Wachovia Bank of North Carolina, N.A.,
a North
Carolina state-chartered bank (the "Rights Agent", which
term shall
include any successor Rights Agent hereunder).
W I T N E S S E T H
WHEREAS, on January 26, 1995 the Board of Directors of
the Company
authorized and declared a dividend distribution of one Right
(as
hereinafter defined) for each whole share of Common Stock,
$1.00 par
value per share, of the Company (the "Common Stock")
outstanding as of
the Close of Business on February 10, 1995 (the "Record
Date") and
authorized the issuance of one Right for each whole share of
Common Stock
of the Company which is issued or which becomes outstanding
between the
Record Date and the earliest of the Distribution Date, the
Redemption
Date and the Final Expiration Date (as such terms are
hereinafter
defined), each Right initially representing the right to
purchase one
half of a share of Common Stock, upon the terms and
conditions set forth
herein (the "Rights");
NOW, THEREFORE, 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
Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or
which,
together with all Affiliates and Associates of such Person,
shall on any
date hereafter, be the Beneficial Owner of 15% or more of
the shares of
Common Stock then outstanding, but shall not include (i) the
Company,
(ii) any Subsidiary of the Company, (iii) any employee
benefit plan of
the Company or any of its Subsidiaries, or (iv) any entity
or Person
holding shares of Common Stock for or pursuant to the terms
of any such
plan. The Persons described in clauses (i) through (iv)
above are
referred to herein as "Exempt Persons". Notwithstanding the
foregoing,
no Person shall become an "Acquiring Person" as the result
of an
acquisition of Common Stock by the Company which, by
reducing the number
of shares outstanding, increases the proportionate number of
shares
beneficially owned by such Person (together with all
Affiliates and
Associates of such Person) to 15% or more of the Common
Stock of the
Company then outstanding; provided, however, that if any
Person,
(together with all Affiliates and Associates of such Person,
(other than
Exempt Persons) shall become the Beneficial Owner of 15% or
more of the
Common Stock of the Company then outstanding by reason of
share purchases
by the Company and shall, after such share purchases by the
Company,
become the Beneficial Owner of any additional shares of
Common Stock of
the Company, then such Person shall be deemed to be an
"Acquiring
Person."
(b) "Adjustment Event" shall mean any Section
11(a)(ii) Event
or any Section 13 Event.
(c) "Adjustment Shares" shall have the meaning set
forth in
Section 11(a)(ii).
(d) "Affiliate" and "Associate" 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
Agreement; provided, however, that no Exempt Person shall be
deemed an
Affiliate or an Associate.
(e) A Person shall be deemed the "Beneficial Owner"
of, and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or
Associates, beneficially own, directly or indirectly (as
determined
pursuant to Rule 13d-3 of the General Rules and Regulations
under the
Exchange Act, as in effect on the date of this Agreement) or
has the
right to dispose of;
(ii) which such Person or any of such Person's
Affiliates
or Associates, directly or indirectly, has (A) the right to
acquire
(whether such right is exercisable immediately or after the
passage of
time) pursuant to any agreement, arrangement or
understanding, 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" (1) securities tendered pursuant to a tender or
exchange offer made
by such Person or any of such Person's Affiliates or
Associates until
such tendered securities are accepted for purchase or
exchange; (2)
securities issuable upon exercise of Rights at any time
prior to the
occurrence of an Adjustment Event; or (3) securities
issuable upon
exercise of Rights from and after the occurrence of an
Adjustment Event,
if such Rights were acquired by such Person or such Person's
Affiliates
or Associates prior to the Distribution Date or pursuant to
Section 3(a)
or Section 22 or pursuant to Section 11(a)(i) in connection
with an
adjustment made with respect to any of the Rights heretofore
specified in
this clause (3); or (B) the right to vote pursuant to
any agreement,
arrangement or understanding (whether or not in writing);
provided,
however, that a Person shall not be deemed the "Beneficial
Owner" of, or
to "beneficially own," any security under this clause (B) if
the
agreement, arrangement or understanding to vote such
security (1) arises
solely from a revocable proxy given to such Person or any of
such
Person's Affiliates or Associates in response to a public
proxy or
consent solicitation made pursuant to, and in accordance
with, the
applicable rules and regulations promulgated under the
Exchange Act, or
(2) is made in connection with, or is to otherwise
participate in, a
proxy or consent solicitation made or to be made pursuant
to, and in
accordance with, the applicable rules and regulations
promulgated under
the Exchange Act, in the case of either clause (1) or (2) of
this proviso
whether or not such agreement, arrangement or understanding
is also then
reportable by such person on Schedule 13D under the Exchange
Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly
or indirectly,
by any other Person (or any Affiliate or Associate thereof)
with which
such Person or any of such Person's Affiliates or Associates
has any
agreement, arrangement or understanding (whether or not in
writing), for
the purpose of acquiring, holding, voting (except pursuant
to a revocable
proxy as described in clause (B) of Section 1(e)(ii) hereof)
or disposing
of any securities of the Company; provided, however, that
(1) no Person
engaged in business as an underwriter of securities shall be
deemed the
Beneficial Owner of any securities acquired through such
Person's
participation as an underwriter or selling group member in
good faith in
a firm commitment underwriting until the expiration of 40
days after the
date of such acquisition; (2) no Person who is a director or
an officer
of the Company shall be deemed the Beneficial Owner of any
securities of
the Company that are beneficially owned by any other
director or officer
of the Company solely as a result of his or her position as
director or
officer of the Company; (3) any agreement, arrangement or
understanding
(whether or not in writing), or any communication or
discussion, among
two or more Persons with respect to any matter relating to
the
management, operation or conduct of the business of the
Company,
including any discussion or agreement on, or any
communication with
respect to, a position with respect to any such matter and
the disclosure
of such communication, discussion, agreement or position to
other Persons
(including shareholders of the Company) or to the Company
shall not
constitute an agreement, arrangement or understanding
contemplated by
Section 1(e)(ii)(B).
(f) "Business Day" shall mean any day other than a
Saturday,
Sunday, or a day on which banking institutions in the State
of South
Carolina or the State of North Carolina are authorized or
obligated by
law or executive order to close.
(g) "Close of Business" on any given date shall
mean 5:00 P.M.,
Greenville time, on such date; provided, however, that if
such date is
not a Business Day it shall mean 5:00 P.M., Greenville time,
on the next
succeeding Business Day.
(h) "Common Stock" shall mean the Common Stock,
$1.00 par value
per share, of the Company, except that "common stock" when
used with
reference to any Person other than the Company shall mean
the capital
stock (or equity interest) with the greatest voting power of
such Person,
or the equity securities or other equity interest having
power to control
or direct the management, of such person or, if such Person
is a
subsidiary of another Person, the Person which ultimately
controls such
first-mentioned Person and which has issued and outstanding
such capital
stock, equity securities or equity interests.
(i) "Current Per Share Market Price" shall have the
meaning set
forth in Section 11(d).
(j) "Current Value" shall have the meaning set
forth in Section
11(a)(iii).
(k) "Disinterested Director" shall mean (i) any
member of the
Company's Board of Directors who is unaffiliated with an
Acquiring
Person, or an Affiliate or Associate of any such Person and
was a member
of the Company's Board of Directors prior to the time that
an Acquiring
Person became such, and any successor of a Disinterested
Director who is
unaffiliated with an Acquiring Person, or any Affiliate or
Associate of
any such Person and is recommended to succeed a
Disinterested Director by
a majority of the Disinterested Directors then on the
Company's Board of
Directors.
(l) "Distribution Date" shall have the meaning
defined in
Section 3(a) hereof.
(m) "Equivalent Common Stock" shall have the
meaning set forth
in Section 11(a)(iii) hereof.
(n) "Exchange Act" shall mean the Securities
Exchange Act of
1934, as amended.
(o) "Exchange Rate" shall have the meaning set
forth in Section
24(a) hereof
(p) "Exercise Price" shall have the meaning set
forth in Section
4 hereof.
(q) "Final Expiration Date" shall have the meaning
set forth in
Section 7(a) hereof.
(r) "Group" shall mean two or more Persons acting
as a
partnership, limited partnership, syndicate or other group
for the
purpose of acquiring, holding or disposing of the Common
Stock.
(s) "Person" shall mean any individual, firm,
corporation,
partnership or other entity or Group, and shall include any
successor (by
merger or otherwise) thereof; provided, however, that when
two or more
Persons act as a partnership, limited partnership, syndicate
or other
Group for the purpose of acquiring, holding disposing of the
Common
Stock, such partnership, limited partnership, syndicate or
other Group
shall be deemed to be a single Person.
(t) "Principal Party" shall have the meaning set
forth in
Section 13(b) hereof.
(u) "Record Date" shall have the meaning set forth
in the
recital clause of this Agreement.
(v) "Redemption Date" shall have the meaning set
forth in
Section 7(a).
(w) "Rights" shall have the meaning set forth in
the recital
clause of this Agreement.
(x) "Right Certificate" shall have the meaning set
forth in
Section 3(a).
(y) "Section 11(a)(ii) Adjustment Date" shall have
the meaning
set forth in Section 11(a)(iii) hereof.
(z) "Section 11(a)(ii) Event" shall mean any event
described in
Section 11(a)(ii)(A), (B), or (C) hereof.
(aa) "Section 13 Event" shall mean any event
described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(bb) "Share Acquisition Date" shall mean the first
date on which
there shall be a public announcement by the Company or an
Acquiring
Person that an Acquiring Person has become such.
(cc) "Spread" shall have the meaning set forth in
Section
11(a)(iii) hereof.
(dd) "Subsidiary" of any Person shall mean any
other corporation
or other entity of which a majority of the voting equity
securities or
voting interests is owned, directly or indirectly, by such
Person, or
which is otherwise controlled by such Person.
(ee) "Substitution Period" shall have the meaning
set forth in
Section 11(a)(iii) hereof.
(ff) "Summary of Rights" shall have the meaning
set forth in
Section 3(b).
(gg) "Trading Day" shall have the meaning set
forth in Section
11(d)(i) hereof.
Section 2. Appointment of Rights Agent. The Company
hereby appoints
the Rights Agent to act as agent for the Company and the
holders of the
Rights (who, in accordance with Section 3 hereof, shall
prior to the
Distribution Date also be the holders of the Common Stock)
in accordance
with the terms and conditions hereof, and the Rights Agent
hereby accepts
such appointment. The Company may from time to time appoint
such co-
Rights Agents as it may deem necessary or desirable. 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.
Section 3. Issue of Right Certificates
(a) Until the earlier of (i) the Close of Business
on the 10th
calendar day after the Share Acquisition Date, (ii) the
Close of Business
on the 10th Business Day (or such later date as may be
determined by
action of the Board of Directors of the Company prior to
such time as any
Person shall become an Acquiring Person) after the date of
(x) the
commencement, by any Person, other than an Exempt Person,
of, or (y) the
first public announcement of the intention of any Person
(other than an
Exempt Person) to commence, a tender or exchange offer if,
upon
consummation thereof, such Person would be an Acquiring
Person, including
any such date which is after the date of this Agreement and
prior to the
issuance of the Rights (the earliest of such dates being
herein referred
to as the "Distribution Date"), the Rights will be evidenced
(subject to
the provisions of Section 3(b) hereof) by certificates for
the Common
Stock registered in the names of the holders of the Common
Stock (which
certificates for Common Stock shall be deemed also to be
certificates for
Rights) and not by separate certificates, and the Rights
will be
transferable only in connection with the transfer of the
underlying
shares of Common Stock. The Board of Directors of the
Company may defer
the date set forth in clause (ii) in the preceding sentence
to a
specified later date or to an unspecified later date to be
determined,
with the concurrence of a majority of the Disinterested
Directors, by
action of the Directors of the Company. As soon as
practicable after the
Company has notified the Rights Agent of the occurrence of
the
Distribution Date, the Rights Agent will send, by first-
class, insured,
postage prepaid mail, to each record holder of the Common
Stock as of the
Close of Business on the Distribution Date, at the address
of such holder
shown on the records of the Company, one or more
certificates, in
substantially the form attached hereto as Exhibit A (the
"Right
Certificates"), evidencing one Right for each share of
Common Stock so
held, subject to adjustment as provided herein. As of and
after the
Close of Business on the Distribution Date, the Rights will
be evidenced
solely by such Right Certificates.
(b) On the Record Date, or thereafter, the Company
will send a
notification of the existence of the Rights, by postage
prepaid mail, to
each record holder of the Common Stock as of the Close of
Business on the
Record Date, at the address of such holder shown on the
records of the
Company. With respect to certificates for the Common Stock
outstanding
as of the Record Date, until the Distribution Date or the
earlier of the
Redemption Date or the Final Expiration Date, the Rights
will be
evidenced by such certificates for the Common Stock with or
without a
copy of the Summary of Rights in the form attached hereto as
Exhibit B
(the "Summary of Rights") attached thereto, and the
registered holders of
the Common Stock shall also be the registered holders of the
associated
Rights. Until the Distribution Date (or earlier redemption,
expiration
or termination of the Rights), the transfer of any of the
certificates
for the Common Stock outstanding on the Record Date, even
without a copy
of the Summary of Rights attached thereto, shall also
constitute the
transfer of the Rights associated with the Common Stock
represented by
such certificate.
(c) Certificates for the Common Stock issued after
the Record
Date, but prior to the earlier of the Distribution Date, the
Redemption
Date or the Final Expiration Date, shall be deemed also to
be
certificates for Rights, and shall bear the following
legend:
This certificate also evidences and entitles the
holder hereof
to certain Rights as set forth in a Shareholder Rights
Agreement
between Ryan's Family Steak Houses, Inc. and Wachovia
Bank of North
Carolina, N.A., as Rights Agent, dated as of January 26,
1995 (the
"Rights Agreement"), the terms of which are hereby
incorporated
herein by reference and a copy of which is on file at
the principal
offices of Ryan's Family Steak Houses, Inc. 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. Ryan's Family Steak Houses, Inc.
will mail to
the holder of this certificate a copy of the Rights
Agreement, as in
effect on the date of mailing, without charge promptly
after receipt
of a written request therefor. Under certain
circumstances, Rights
issued to Acquiring Persons or any Affiliates or
Associates thereof
(as defined in the Rights Agreement) and any subsequent
holder of
such Rights may become null and void.
With respect to such certificates containing the foregoing
legend, until
the Distribution Date or the earlier of the Redemption Date
or the Final
Expiration Date, the Rights associated with the Common Stock
represented
by such certificates shall be evidenced by such certificates
alone, and
the transfer of any of such certificates shall also
constitute the
transfer of the Rights associated with the Common Stock
represented by
such certificates. In the event that the Company purchases
or acquires
any shares of Common Stock after the Record Date but prior
to the
Distribution Date, any Rights associated with such Common
Stock shall be
deemed cancelled and retired so that the Company shall not
be entitled to
exercise any Rights associated with the shares of Common
Stock which are
no longer outstanding.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the forms of
election to
purchase shares and of assignment to be printed on the
reverse thereof)
shall each be substantially in the form of Exhibit A hereto
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
Agreement, or as may
be required to comply with any applicable law, rule or
regulation 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 Section 11 and Section 22 hereof, the Right
Certificates,
whenever distributed, shall be dated as of the Record Date,
and on their
face shall entitle the holders thereof to Purchase such
number of shares
of Common Stock as shall be set forth therein at the price
set forth
therein (the "Exercise Price"), but the number of such
shares and the
Exercise Price shall be subject to adjustment as provided
herein.
(b) Any Right Certificate issued pursuant to
Section 3(a) or
Section 22 hereof that represents Rights beneficially owned
by (i) an
Acquiring Person or any Associate or Affiliate of an
Acquiring Person,
(ii) a transferee of an Acquiring Person or (or of any such
Associate or
Affiliate) who becomes a transferee after the Acquiring
Person becomes
such, or (iii) a transferee of an Acquiring Person (or of
any such
Associate or Affiliate) who becomes a transferee prior to or
concurrently
with the Acquiring Person becoming such and receives such
Rights pursuant
to either (A) a transfer (whether or not for consideration)
from the
Acquiring Person (or of such Affiliate or Associate) to
holders of equity
interests in such Acquiring Person (or of such Affiliate or
Associate) or
to any Person with whom the Acquiring Person has any
continuing
agreement, arrangement or understanding regarding the
transferred Rights,
or (B) a transfer which the Board of Directors of the
Company has
determined is part of a plan, arrangement or understanding
which has as a
primary purpose or effect the avoidance of Section 11
hereof, and any
Right Certificate issued pursuant to Section 6 or Section 11
upon
transfer, exchange, replacement or adjustment of any other
Right
Certificate referred to in this sentence, shall contain the
following
legend:
The Rights represented by this Right Certificate
are or were
beneficially owned by a Person who was or became an
Acquiring
Person or an Affiliate or an Associate of an
Acquiring Person
(as such terms are defined in the Rights
Agreement). This Right
Certificate and the Rights represented hereby may
become null
and void under certain circumstances as specified
in Section 11
of the Rights Agreement.
The Company shall give notice to the Rights Agent promptly
after it
becomes aware of the existence and identity of any Acquiring
Person or
any Associate or Affiliate thereof.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on
behalf of the
Company by its Chairman of the Board, its President or any
Vice
President, either manually or by facsimile signature, and
shall have
affixed thereto the Company's seal or a facsimile thereof
which shall be
attested by the Secretary or any Assistant Secretary of the
Company,
either manually or by facsimile signature. The Right
Certificates shall
be manually countersigned by the Rights Agent and shall not
be valid for
any purpose unless so countersigned. In case any officer of
the Company
who shall have signed any of the Right Certificates shall
cease to be
such officer of the Company before countersignature by the
Rights Agent
and issuance and delivery by the Company, such Right
Certificates,
nevertheless, may 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 Right Certificates had not ceased to
be such
officer of the Company; and any Right Certificates may be
signed on
behalf of the Company by any Person who, at the actual date
of the
execution of such Right Certificate, shall be a proper
officer of the
Company to sign such Right Certificate, although at the date
of the
execution of this Rights Agreement any such Person was not
such an
officer.
(b) Following the Distribution Date, the Rights
Agent will keep
or cause to be kept, at one of its offices designated as the
appropriate
place for surrender of Right Certificates upon exercise or
transfer,
books for registration and transfer of the Right
Certificates issued
hereunder. Such books shall show the names and addresses of
the
respective holders of the Right Certificates, the number of
Rights
evidenced on its face by each of the Right Certificates and
the date of
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange
of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.
(a) Subject to the provisions of Section 4(b),
Section 11,
Section 14 and Section 24 hereof, at any time after the
Close of Business
on the Distribution Date, and at, or prior to, the Close of
Business on
the earlier of the Redemption Date or the Final Expiration
Date, any
Right Certificate or Certificates may be transferred, split
up, combined
or exchanged for another Right Certificate or Certificates,
entitling the
registered holder to purchase a like number of shares of
Common Stock (or
following an Adjustment Event, other securities, cash or
other assets as
the case may be) as the Right Certificate or Certificates
surrendered
then entitled such holder to purchase. Any registered
holder desiring to
transfer, split up, combine or exchange any Right
Certificate shall make
such request in writing delivered to the Rights Agent, and
shall
surrender the Right Certificate or Certificates to be
transferred, split
up, combined or exchanged, with the form of assignment and
certificate
duly executed, at the office or offices of the Rights Agent
designated
for such purpose. Neither the Rights Agent nor the Company
shall be
obligated to take any action whatsoever with respect to the
transfer of
any such surrendered Right Certificate until the registered
holder shall
have completed and signed the certificate contained in the
form of
assignment on the reverse side of such Right 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 Section 4(b), Section 11 and Section 14 hereof,
countersign
and deliver to the Person entitled thereto a Right
Certificate or
Certificates, as the case may be, as so requested. The
Company may
require payment 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 Right Certificates.
(b) Upon receipt by the Company and the Rights
Agent of evidence
reasonably satisfactory to them of the loss, theft,
destruction or
mutilation of a Right Certificate, and, in case of loss,
theft or
destruction, of indemnity or security satisfactory to them,
and
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 Right Certificate if mutilated, the
Company will
execute and deliver a new Right Certificate of like tenor to
the Rights
Agent for countersignature and delivery to the registered
owner in lieu
of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Exercise Price; Final
Expiration Date
of Rights.
(a) Subject to Section 11(a)(ii) hereof, the
registered holder
of any Right Certificate may exercise the Rights evidenced
thereby
(except as otherwise provided herein, including, without
limitation, the
restrictions on exercisability set forth in Section 9,
Section 11(a)(iii)
and Section 23(a)), in whole or in part at any time after
the
Distribution Date upon surrender of the Right Certificate,
with the form
of election to purchase and the certificate set forth on the
reverse side
thereof completed and duly executed, to the Rights Agent at
the office or
offices of the Rights Agent designated for such purpose,
together with
payment of the aggregate Exercise Price for the total number
of shares of
Common Stock (or other securities, cash or other assets, as
the case may
be) as to which such surrendered Rights are then exercised,
at or prior
to the earlier of (i) the Close of Business on February 10,
2005 (the
"Final Expiration Date"), (ii) the time at which the Rights
are redeemed
as provided in Section 23 hereof (the "Redemption Date") or
(iii) the
time which such Rights are exchanged as provided in Section
24. Except
as set forth in Section 11(a) hereof and notwithstanding any
other
provision of this Agreement, any Person who prior to the
Distribution
Date becomes a record holder of shares of Common Stock may
exercise all
of the rights of a registered holder of a Right Certificate
with respect
to the Rights associated with such shares of Common Stock in
accordance
with the provisions of this Agreement, as of the date such
Person becomes
a record holder of shares of Common Stock.
(b) The Exercise Price for each half share of
Common Stock
pursuant to the exercise of a Right shall initially be $25
(equivalent to
$50 for each share of Common Stock), shall be subject to
adjustment from
time to time provided in Section 11 and Section 13 hereof,
and shall be
payable in lawful money of the United States of America in
accordance
with Section 7(c) below.
(c) Upon receipt of a Right Certificate
representing exercisable
Rights, with the form of election to purchase and the
certificate set
forth on the reverse side thereof completed and duly
executed,
accompanied by payment of the Exercise Price for the shares
(or,
following an Adjustment Event, other securities, cash or
other assets, as
the case may be) to be purchased and an amount equal to any
applicable
transfer tax (as determined by the Rights Agent) in cash, or
by certified
check or bank draft payable to the order of the Company, the
Rights Agent
shall, subject to Section 20(k) hereof, thereupon promptly
(i)(A)
requisition from any transfer agent of the shares of Common
Stock (or
make available, if the Rights Agent is the transfer agent
therefor)
certificates for the number of shares of Common Stock 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 total number of shares of Common Stock issuable
upon exercise
of the Rights hereunder with a depositary agent, requisition
from the
depositary agent depositary receipts representing such
number of shares
of Common Stock as are to be purchased (in which case
certificates for
the shares of Common Stock 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 such
request,
(ii) when appropriate, requisition from the Company the
amount of cash,
if any, to be paid in lieu of issuance of fractional shares
in accordance
with Section 14 hereof, (iii) promptly after receipt of such
certificates
or depository receipts, cause the same to be delivered to or
upon the
order of the registered holder of such Right 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 Right Certificate.
In the event
that the Company is obligated to issue other securities of
the Company,
pay cash or distribute other property pursuant to Section
11(a) hereof,
the Company will make all arrangements necessary so that
such other
securities, cash or other property are available for
distribution by the
Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right
Certificate shall
exercise less than all the Rights evidenced thereby, a new
Right
Certificate evidencing Rights equivalent to the Rights
remaining
unexercised shall be issued by the Rights Agent and
delivered to the
registered holder of such Right Certificate or to his duly
authorized
assigns, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this 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 Rights
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 Right 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.
Section 8. Cancellation and Destruction of Right
Certificates. All
Right Certificates surrendered for the purpose of exercise,
transfer,
split up, combination or exchange shall, if surrendered to
the Company or
any of its agents, be delivered to the Rights Agent for
cancellation or
in cancelled form, or, if surrendered to the Rights Agent,
shall be
cancelled by it, and no Right Certificates shall be issued
in lieu
thereof except as expressly permitted by any of the
provisions of this
Agreement. The Company shall deliver to the Rights Agent
for
cancellation and retirement, and the Rights Agent shall so
cancel and
retire, any other Right Certificate purchased or acquired by
the Company
otherwise than upon the exercise thereof. The Rights Agent
shall deliver
all cancelled Right Certificates to the Company, or shall,
at the written
request of the Company, destroy such cancelled Right
Certificates, and in
such case shall deliver a certificate of destruction thereof
to the
Company.
Section 9. Reservation and Availability of Common
Stock.
(a) The Company covenants and agrees that it will
cause to be
reserved and kept available out of its authorized and
unissued shares of
Common Stock (and, following the occurrence of an Adjustment
Event, other
securities or out of its authorized and issued shares held
in its
treasury) the number of shares of Common Stock (and,
following the
occurrence of an Adjustment Event, other securities) that,
as provided in
this Agreement will be sufficient to permit the exercise in
full of all
outstanding Rights; provided, that such action need not be
taken with
respect to shares of Common Stock (or other securities)
issuable upon
occurrence of an Adjustment Event until the occurrence of
such event.
(b) If at the time the Rights become exercisable,
the then
outstanding shares of Common Stock are listed on any
national or regional
securities exchange or are quoted on the National
Association of
Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or any
successor thereto or other comparable quotation system, the
Company shall
use its best efforts to cause, from and after such time as
the Rights
become exercisable, all shares of Common Stock (and,
following the
occurrence of an Adjustment Event, other securities)
reserved for
issuance upon such exercise to be quoted on such system or
listed on such
exchange, as the case may be.
(c) The Company shall use its best efforts to (i)
file, as soon
as practicable following the earliest date after the
occurrence of a
Section 11(a)(ii) Event as of which the consideration to be
delivered by
the Company upon exercise of the Rights has been determined
in accordance
with this Agreement, or as soon as required by law following
the
Distribution Date, as the case may be, a registration
statement under the
Securities Act of 1933, as amended (the "Securities Act"),
with respect
to the Common Stock or other securities purchasable upon
exercise of the
Rights on an appropriate form, (ii) cause such registration
statement to
become effective as soon as practicable after such filing,
and (iii)
cause such registration statement to remain effective (with
a prospectus
that at all times meets the requirements of the Securities
Act) until the
earlier of (A) the date as of which the Rights are no longer
exercisable
for such securities, and (B) the date of the expiration of
the Rights.
The Company will also take such action as may be appropriate
under, and
which will ensure compliance with, the securities or blue
sky laws of the
various states in connection with the exercisability of the
Rights. The
Company may temporarily suspend for a period of time not to
exceed ninety
(90) days after the date set forth in clause (i) of the
first sentence of
this Section 9(c), the exercisability of the Rights in order
to prepare
and file such registration statement and permit it to become
effective.
Upon such suspension, the Company shall issue a public
announcement
stating that the exercisability of the Rights has been
temporarily
suspended, as well as a public announcement at such time as
the
suspension is no longer in effect. Notwithstanding any such
provision of
this Agreement to the contrary, the Rights shall not be
exercisable in
any jurisdiction unless the requisite qualification in such
jurisdiction
shall have been obtained.
(d) The Company covenants and agrees that it will
take all such
action as may be reasonably necessary to ensure that all
shares of Common
Stock (and, following the occurrence of an Adjustment Event,
other
securities) delivered upon exercise of Rights shall, at the
time of
delivery of the certificates for such shares (subject to
payment of the
Exercise Price), be duly and validly authorized and issued
and fully paid
and nonassessable.
(e) The Company further covenants and agrees that,
subject to
Section 6, 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 the Right Certificates or of any
certificates for
shares of Common Stock (or other securities, as the case may
be) upon the
exercise of 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 Right Certificates to a Person other than, or in
respect of
the issuance or delivery of securities in a name other than
that of, the
registered holder of the Right Certificates evidencing
Rights surrendered
for exercise or to issue or deliver any certificates for
securities in a
name other than that of the registered holder upon the
exercise of any
Rights until such tax shall have been paid (any such tax
being payable by
the holder of such Right 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. Common Stock Record Date. Each Person in
whose name any
certificate for Common Stock is issued upon the exercise of
Rights shall
for all purposes be deemed to have become the holder of
record of the
shares of Common Stock represented thereby on, and such
certificate shall
be dated, the date upon which the Right Certificate
evidencing such
Rights was duly surrendered and payment of the Exercise
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
Common Stock
transfer books of the Company are closed, such person shall
be deemed to
have become the record holder of such shares on, and such
certificate
shall be dated, the next succeeding Business Day on which
the Common
Stock transfer books of the Company are open. Prior to the
exercise of
the Right evidenced thereby, the holder of a Right
Certificate shall not
be entitled to any rights of a shareholder of the Company
with respect to
shares for which the Rights shall be exercisable, including,
without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and
shall not be
entitled to receive any notice of any proceedings of the
Company, except
as provided herein.
Section 11. Adjustment of Exercise Price, Number and
Kind of Shares
or Number of Rights. The Exercise Price, the number and
kind of shares
covered by each Right and the number of Rights outstanding
are subject to
adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time
after the date
of this Agreement (A) declare a dividend on the Common Stock
payable in
shares of Common Stock, (B) subdivide the outstanding Common
Stock, (C)
combine the outstanding Common Stock into a smaller number
of shares or
(D) issue any shares of its capital stock in a
reclassification of the
Common Stock (including any such reclassification in
connection with a
consolidation or merger in which the Company is the
continuing or
surviving corporation), then, except as otherwise provided
in this
Section 11(a), the Exercise Price in effect at the time of
the record
date for such dividend or of the effective date of such
subdivision,
combination or reclassification, and the number and kind of
shares of
Common Stock or capital stock, as the case may be, issuable
on such date,
shall be proportionately adjusted so that the holder of any
Right
exercised after such time shall be entitled to receive the
aggregate
number and kind of shares of Common Stock or capital stock,
as the case
may be, which, if such Right had been exercised immediately
prior to such
date and at a time when the Common Stock (or other capital
stock, as the
case may be) transfer books of the Company were open, such
holder would
have owned upon such exercise and been entitled to receive
by virtue of
such dividend, subdivision, combination or reclassification;
provided,
however, that in no event shall the consideration to be paid
upon the
exercise of one Right be less than the aggregate par value
of the shares
of the Company issuable upon the exercise thereof. If an
event occurs
which would require an adjustment under both Section
11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this
Section 11(a)(i)
shall be in addition to, and shall be made prior to, any
adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 24, in the event
(A) any Acquiring Person or any Associate or
Affiliate of
any Acquiring Person, at any time after the date of this
Agreement,
directly or indirectly, (1) shall merge into the Company or
otherwise
combine with the Company and the Company shall be the
continuing or
surviving corporation of such merger or combination and the
Common Stock
of the Company shall remain outstanding and not changed into
or exchanged
for stock or other securities of any other Person or the
Company or cash
or any other property, (2) shall, in one or more
transactions, transfer
any assets to the Company in exchange (in whole or in part)
for shares of
any equity security of the Company or any of its
Subsidiaries or for
securities exercisable for or convertible into shares of any
equity
security of the Company or any of its Subsidiaries or
otherwise obtain
from the Company, with or without consideration, any
additional shares of
any equity security of the Company or securities exercisable
for or
convertible into shares of any equity security of the
Company or any of
its Subsidiaries (other than as part of a pro rata
distribution to all
holders of Common Stock), (3) shall sell, purchase, lease,
exchange,
mortgage, pledge, transfer or otherwise dispose (in one or
more
transactions), to, from or with, as the case may be, the
Company or any
of its Subsidiaries, assets on terms and conditions less
favorable to the
Company than the Company would be able to obtain in arm's-
length
negotiation with an unaffiliated third Person, (4) shall
engage in any
transaction with the Company involving the sale, purchase,
lease,
exchange, mortgage, pledge, transfer or other disposition
(in one
transaction or a series of transactions), other than
incidental to the
lines of business currently engaged in as of the date hereof
by the
Company and such Acquiring Person, or Associate or
Affiliate, of assets
having an aggregate fair market value of more than
$5,000,000, (5) shall
receive any compensation from the Company or any of the
Company's
Subsidiaries other than compensation for full time
employment as a
regular employee at rates in accordance with the Company's
(or its
Subsidiaries') past practices, or (6) shall receive the
benefit, directly
or indirectly (except proportionately as a shareholder), of
any loans
other than in the ordinary course of business), advances,
guarantees,
pledges or other financial assistance or any tax credits or
other tax
advantage provided by the Company or any of its
Subsidiaries, or
(B) any Person (other than an Exempt Person),
shall become
an Acquiring Person, or
(C) during such time as there is an Acquiring
Person, there
shall be any reclassification of securities (including any
reverse stock
split), or recapitalization of the Company, or any merger or
consolidation of the Company with any of its Subsidiaries or
any other
transaction or series of transactions (whether or not with
or into or
otherwise involving an Acquiring Person) which has the
effect, directly
or indirectly, of increasing by more than 1% the
proportionate share of
the outstanding shares of any class of equity securities of
the Company
or any of its Subsidiaries which is directly or indirectly
owned by any
Acquiring Person or any Associate or Affiliate of any
Acquiring Person,
then, and in each such case, proper provision shall be made
so that each
holder of a Right, except as provided in this paragraph
(ii), shall
thereafter have a right to receive, upon exercise of such
Right at the
then current Exercise Price in accordance with the terms of
this
Agreement, such number of shares of Common Stock of the
Company as shall
equal the result obtained by (x) multiplying the then
current Exercise
Price by the then number of one half shares of Common Stock
for which a
Right was exercisable immediately prior to the first
occurrence of a
Section 11(a)(ii) Event and (y) dividing that product
(which, following
such first occurrence, shall thereafter be referred to as
the "Exercise
Price" for each Right and for all purposes of this
Agreement) by 50% of
the Current Per Share Market Price of the Common Stock
(determined
pursuant to Section 11(d)) on the date of the occurrence of
any one of
the events listed above in this Section 11(a)(ii) (such
number of shares
is herein called the "Adjustment Shares"); provided,
however, that if the
transaction that would otherwise give rise to the foregoing
adjustment is
also subject to the provisions of Section 13 hereof, then
only the
provisions of Section 13 shall apply and no adjustment shall
be made
pursuant to this Section 11(a)(ii). The Company shall not
enter into any
transaction of the kind listed in this Section 11(a)(ii) if
at the time
of such transaction there are any rights, warrants,
instruments or
securities outstanding or any agreements or arrangements
which as a
result of the consummation of such transaction, would
substantially
diminish or otherwise eliminate the benefits intended to be
afforded by
the Rights.
Notwithstanding anything in this Agreement to the
contrary, from
and after the first occurrence of a Section 11(a)(ii) Event,
any Rights
beneficially owned by (i) an Acquiring Person or any
Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring
Person (or of any such Associate or Affiliate) who becomes a
transferee
after the Acquiring Person becomes such, or (iii) a
transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a
transferee prior to or concurrently with the Acquiring
Person becoming
such and receives such Rights pursuant to either (A) a
transfer (whether
or not for consideration) from the Acquiring Person to
holders of equity
interests in such Acquiring Person or to any Person with
whom the
Acquiring Person has any continuing agreement, arrangement
or
understanding regarding the transferred Rights, or (B) a
transfer which
the Board of Directors of the Company has determined is part
of a plan,
arrangement or understanding which has as a primary purpose
or effect the
avoidance of this Section 11(a), shall become null and void
without any
further action and no holder or beneficial owner of such
Rights shall
have any rights whatsoever with respect to such Rights,
whether under any
provision of this Agreement or otherwise. The Company shall
use all
reasonable efforts to ensure that the provisions of this
Section 11(a)
and Section 4(b) hereof are complied with, but shall have no
liability to
any holder or beneficial owner of Right Certificates or any
other Person
as a result of its failure to make any determinations with
respect to an
Acquiring Person or any Affiliates and Associates thereof or
any
transferee of any of them hereunder.
(iii) In the event that the number of shares
of Common
Stock which are authorized by the Company's articles of
organization but
not outstanding or reserved for issuance for purposes other
than upon
exercise of the Rights is not sufficient to permit the
exercise in full
of the Rights in accordance with Section 11(a)(ii), the
Company shall:
(A) determine the excess of (1) the value of the Adjustment
Shares
issuable upon the exercise of a Right (the "Current Value")
over (2) the
Exercise Price (such excess is herein called the "Spread"),
and (B) with
respect to each Right, make adequate provision to substitute
for the
Adjustment Shares, upon payment of the applicable Exercise
Price, (1)
cash, (2) a reduction in the Exercise Price, (3) Common
Stock or other
equity securities of the Company (including, without
limitation, shares,
or units of shares, of preferred stock which the Board has
deemed to have
the same value as shares of Common Stock (such shares or
units of shares
of preferred stock are herein called "Equivalent Common
Stock")), (4)
debt securities of the Company, (5) other assets, or (6) any
combination
of the foregoing, having an aggregate value equal to the
Current Value,
where such aggregate value has been determined by the Board
based upon
the advice of a competent investment banking firm selected
by the Board;
provided, however, if the Company shall not have made
adequate provision
to deliver value pursuant to clause (B) above within thirty
(30) days
following the later of (x) the first occurrence of a Section
11(a)(ii)
Event and (y) the date on which the Company's right of
redemption
pursuant to Section 23(a) expires (the later of (x) and (y)
being
referred to herein as the "Section 11(a)(ii) Adjustment
Date"), then the
Company shall be obligated to deliver, upon the surrender
for exercise of
a Right and without requiring payment of the Exercise Price,
shares of
Common Stock (to the extent available) and then, if
necessary, cash,
which shares or cash have an aggregate value equal to the
Spread. If the
Board shall determine in good faith that it is likely that
sufficient
additional shares of Common Stock could be authorized for
issuance upon
exercise in full of the Rights, the thirty (30) day period
set forth
above may be extended to the extent necessary, but not more
than ninety
(90) days after the Section 11(a)(ii) Adjustment Date, in
order that the
Company may seek stockholder approval for the authorization
of such
additional shares (such thirty (30) day period, as it may be
extended, is
herein called the "Substitution Period"). To the extent
that the Company
determines that some action need be taken pursuant to the
first or second
sentence of this Section 11(a)(iii), the Company (x) shall
provide,
subject to Section 11(a)(ii) hereof, that such action shall
apply
uniformly to all outstanding Rights, and (y) may suspend the
exercisability of the Rights until the expiration of the
Substitution
Period in order to seek an authorization of additional
shares and/or to
decide the appropriate form of distribution to be made
pursuant to such
first sentence and to determine the value thereof. In the
event of any
such suspension, the Company shall issue a public
announcement stating
that the exercisability of the Rights has been temporarily
suspended, as
well as a public announcement at such time as the suspension
is no longer
in effect. For the purpose of this Section 11(a)(iii), the
value of
Adjustment Shares shall be the Current Per Share Market
Price of the
Common Stock on the Section 11(a)(ii) Adjustment Date, and
the per share
or per unit value of any Equivalent Common Stock shall be
deemed to equal
the Current Per Share Market Price of the Common Stock on
such date.
(b) If the Company shall fix a record date for the
issuance of
rights (other than the Rights), options or warrants to all
holders of
Common Stock entitling them (for a period expiring within 45
calendar
days after such record date) to subscribe for or purchase
Common Stock or
Equivalent Common Stock or securities convertible into
Common Stock or
Equivalent Common Stock at a price per share of Common Stock
or per share
of Equivalent Common Stock (or having a conversion price per
share, if a
security convertible into Common Stock or Equivalent Common
Stock) less
than the Current Per Share Market Price (as determined
pursuant to
Section 11(d) hereof) of the Common Stock on such record
date, the
Exercise Price to be in effect after such record date shall
be determined
by multiplying the Exercise Price in effect immediately
prior to such
record date by a fraction, the numerator of which shall be
the number of
shares of Common Stock outstanding on such record date, plus
the number
of shares of Common Stock which the aggregate offering price
of the total
number of shares of Common Stock or Equivalent Common Stock
to be offered
(and the aggregate initial conversion price of the
convertible securities
so to be offered) would purchase at such Current Per Share
Market Price
and the denominator of which shall be the number of shares
of Common
Stock outstanding on such record date, plus the number of
additional
shares of Common Stock or Equivalent Common Stock to be
offered for
subscription or purchase (or into which the convertible
securities so to
be offered are initially convertible); provided, however,
that in no
event shall the consideration to be paid upon the exercise
of one Right
be less than the aggregate par value of the shares of the
Company
issuable upon the exercise thereof. In case such
subscription price may
be paid in a consideration part or all of which shall be in
a form other
than cash, the value of such consideration shall be the
Current Per Share
Market Price thereof determined in accordance with Section
11(d) hereof.
Shares of Common Stock owned by or held for the account of
the Company
shall not be deemed outstanding for the purpose of any such
computation.
Such adjustments shall be made successively whenever such a
record date
is fixed; and in the event that such rights or warrants are
not so
issued, the Exercise Price shall be adjusted to be the
Exercise Price
which would then be in effect if such record date had not
been fixed.
(c) If the Company shall fix a record date for the
making of a
distribution to all holders of Common Stock (including any
such
distribution made in connection with a consolidation or
merger in which
the Company is the continuing corporation) of evidences of
indebtedness,
cash (other than a regular periodic cash dividend out of the
earnings or
retained earnings of the Company), assets (other than a
dividend payable
in Common Stock, but including any dividend payable in stock
other than
Common Stock) or options, subscription rights or warrants
(excluding
those referred to in Section 11(b)), the Exercise Price to
be in effect
after such record date shall be determined by multiplying
the Exercise
Price in effect immediately prior to such record date by a
fraction, the
numerator of which shall be the Current Per Share Market
Price (as
determined pursuant to Section 11(d) hereof) of Common Stock
on such
record date, less the Current Per Share Market Price (as
determined
pursuant to Section 11(d) hereof) of the portion of the
cash, assets or
evidences of indebtedness so to be distributed or of such
options,
subscription rights or warrants applicable to one share of
Common Stock
and the denominator of which shall be the Current Per Share
Market Price
(as determined pursuant to Section 11(d) hereof) per one
share of Common
Stock; provided, however, that in no event shall the
consideration to be
paid upon the exercise of one Right be less than the
aggregate par value
of the shares of the Company issuable upon the exercise
thereof. Such
adjustments shall be made successively whenever such a
record date is
fixed; and in the event that such distribution is not so
made, the
Exercise Price shall again be adjusted to be the Exercise
Price which
would be in effect if such record date had not been fixed.
(d) For the purpose of this Agreement, the "Current
Per Share
Market Price" of any share of Common Stock or any other
stock or any
Right or other security or any other property shall be
determined as
provided in this Section 11(d).
(i) In the case of a publicly-traded stock or
other
security (hereinafter in this Section 11(d)(i) a
"Security"), the Current
Per Share Market Price on any date shall be deemed to be the
average of
the daily closing prices per share of such Security for the
thirty (30)
consecutive Trading Days (as such term is hereinafter
defined)
immediately prior to such date; provided, however, that for
the purpose
of computations made pursuant to Section 11(a)(iii) hereof,
the Current
Per Share Market Price on any date shall be deemed to be the
average of
the daily closing prices per share of such Security for the
ten (10)
consecutive Trading Days immediately following such date;
and provided
further, that in the event that the Current Per Share Market
Price of any
Security is determined during a period following the
announcement by the
issuer of such Security of (x) a dividend or distribution on
such
Security payable in shares of such Security or securities
convertible
into shares of such Security (other than the Rights) or (y)
any
subdivision, combination or reclassification of such
Security, and prior
to the expiration of the requisite thirty (30) Trading Day
or ten (10)
Trading Day period, as set forth above, after the ex-
dividend date for
such dividend or distribution, or the record date for such
subdivision,
combination or reclassification, then, and in each such
case, the Current
Per Share Market Price shall be properly adjusted to take
into account
ex-dividend trading. The closing price for each day shall
be the last
sale price, regular way, or, in case no such sale takes
place on such
day, the average of the closing bid and asked prices,
regular way, in
either case as reported in the principal consolidated
transaction
reporting system with respect to securities listed or
admitted to trading
on the New York Stock Exchange or, if the Securities are not
listed or
admitted to trading on the New York Stock Exchange, as
reported in the
principal consolidated transaction reporting system with
respect to
securities listed on the principal national securities
exchange on which
such Security is listed or admitted to trading; or, if not
listed or
admitted to trading on any national securities exchange, the
last quoted
price (or, if not so quoted, the average of the last quoted
high bid and
low asked prices) in the over-the-counter market, as
reported by NASDAQ
or such other system then in use; or, if, on any such date
no bids for
such Security are quoted by any such organization, the
average of the
closing bid and asked prices as furnished by a professional
market maker
making a market in such Security selected by the Board of
Directors of
the Company. If on any such date no market maker is making
a market in
such Security, the Current Per Share Market Price of such
Security on
such date shall be determined reasonably and with good faith
to the
holders of the Rights by the Board of Directors of the
Company,
including, if at the time of such determination there is an
Acquiring
Person, a majority of the Disinterested Directors then in
office, or if
there are no Disinterested Directors, by a competent
investment banking
firm selected by the Board of Directors, which determination
shall be
described in a statement filed with the Rights Agent and
shall be binding
on the Rights Agent and the holders of the Rights. The term
"Trading
Day" shall mean a day on which the principal national
securities exchange
on which such Security is listed or admitted to trading is
open for the
transaction of business or, if such Security is not listed
or admitted to
trading on any national securities exchange, a Business Day.
(ii) If a Security is not publicly held or not
so listed or
traded, "Current Per Share Market Price" shall mean the fair
value per
share of stock or per other unit of such Security,
determined reasonably
and with utmost good faith to the holders of the Rights by
the Board of
Directors of the Company, including, if at the time of such
determination
there is an Acquiring Person, a majority of the
Disinterested Directors
then in office, or if there are no Disinterested Directors,
by a
competent investment banking firm selected by the Board of
Directors,
which determination shall be described in a statement filed
with the
Rights Agent and shall be binding on the Rights Agent and
the holders of
the Rights.
(iii) In the case of property other than
securities, the
Current Per Share Market Price thereof shall be determined
reasonably and
with utmost good faith to the holders of Rights by the Board
of Directors
of the Company, including, if at the time of such
determination there is
an Acquiring Person, a majority of the Disinterested
Directors then in
office, or if there are no Disinterested Directors, by a
competent
investment banking firm selected by the Board of Directors,
which
determination shall be described in a statement filed with
the Rights
Agent and shall be binding upon the Rights Agent and the
holders of the
Rights.
(e) Anything herein to the contrary
notwithstanding, no
adjustment in the Exercise Price shall be required unless
such adjustment
would require an increase or decrease of at least l% in the
Exercise
Price; provided, however, that any adjustments which by
reason of this
Section 11(e) are not required to be made shall be carried
forward and
taken into account in any subsequent adjustment. All
calculations under
this Section 11 shall be made to the nearest cent or to the
nearest ten-
thousandth of a share, as the case may be. Notwithstanding
the first
sentence of this Section 11(e), any adjustment required by
this Section
shall be made no later than the earlier of (i) three (3)
years from the
date of the transaction which mandates such adjustment or
(ii) the Final
Expiration Date.
(f) If as a result of an adjustment made pursuant
to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter
exercised shall become entitled to receive any shares of
capital stock
other than Common Stock, thereafter the number of such other
shares so
receivable upon exercise of any Right and the Exercise Price
thereof
shall be subject to adjustment from time to time in a manner
and on terms
as nearly equivalent as practicable to the provisions with
respect to the
Common Stock contained in Section 11(a) through (c), (e),
(g) through
(k), and (m), inclusive, and the provisions of Sections 7,
9, 10, 13 and
14 hereof with respect to the Common Stock shall apply on
like terms to
any such other shares.
(g) All Rights originally issued by the Company
subsequent to
any adjustment made to the Exercise Price hereunder shall
evidence the
right to purchase, at the adjusted Exercise Price, the
number of shares
(or fractions thereof) of Common Stock purchasable from time
to time
hereunder upon exercise of the Rights, all subject to
further adjustment
as provided herein.
(h) Unless the Company shall have exercised its
election as
provided in Section 11(i), upon each adjustment of the
Exercise Price as
a result of the calculations made in Section 11(b) and (c),
each Right
outstanding immediately prior to the making of such
adjustment shall
thereafter evidence the right to purchase, at the adjusted
Exercise
Price, that number of shares of Common Stock (calculated to
the nearest
one ten-thousandth) obtained by (i) multiplying (x) the
number of shares
covered by a Right immediately prior to this adjustment by
(y) the
Exercise Price in effect immediately prior to such
adjustment of the
Exercise Price, and (ii) dividing the product so obtained by
the Exercise
Price in effect immediately after such adjustment of the
Exercise Price.
(i) The Company may elect on or after the date of
any adjustment
of the Exercise Price to adjust the number of Rights, in
substitution for
any adjustment in the number of shares of Common Stock
purchasable upon
the exercise of a Right. Each of the Rights outstanding
after the
adjustment in the number of Rights shall be exercisable for
the number of
shares of Common Stock for which a Right was exercisable
immediately
prior to such adjustment. Each Right held of record prior
to such
adjustment of the number of Rights shall become that number
of Rights
(calculated to the nearest one ten-thousandth) obtained by
dividing the
Exercise Price in effect immediately prior to adjustment of
the Exercise
Price by the Exercise Price in effect immediately after
adjustment of the
Exercise Price. The Company shall make a public
announcement of its
election to adjust the number of Rights, indicating the
record date for
the adjustment, and, if known at the time, the amount of the
adjustment
to be made. This record date may be the date on which the
Exercise Price
is adjusted or any day thereafter, but, if the Right
Certificates have
been issued, shall be at least ten (10) days later than the
date of the
public announcement. If Right Certificates have been
issued, upon each
adjustment of the number of Rights pursuant to this Section
11(i), the
Company shall, as promptly as practicable, cause to be
distributed to
holders of record of Right Certificates on such record date
Right
Certificates evidencing, subject to Section 14 hereof, the
additional
Rights to which such holders shall be entitled as a result
of such
adjustment, or at the option of the Company, shall cause to
be
distributed to such holders of record in substitution and
replacement for
the Right Certificates held by such holders prior to the
date of
adjustment, and upon surrender thereof, if required by the
Company, new
Right Certificates evidencing all the Rights to which such
holders shall
be entitled after such adjustment. Right Certificates so to
be
distributed shall be issued, executed and countersigned in
the manner
provided for herein (and may bear, at the option of the
Company, the
adjusted Exercise Price) and shall be registered in the
names of the
holders of record of Right Certificates on the record date
specified in
the public announcement.
(j) Irrespective of any adjustment or change in the
Exercise
Price or the number of shares of Common Stock issuable upon
the exercise
of the Rights, the Right Certificates theretofore and
thereafter issued
may continue to express the Exercise Price per share and the
number of
shares which were expressed in the initial Right
Certificates issued
hereunder.
(k) Before taking any action that would cause an
adjustment
reducing the Exercise Price below the then par value, if
any, of the
number of shares of Common Stock issuable upon exercise of
the Rights,
the Company shall take any corporate action which may, in
the opinion of
its counsel, be necessary in order that the Company may
validly and
legally issue fully paid and nonassessable shares of Common
Stock at such
adjusted Exercise Price.
(l) In any case in which this Section 11 shall
require that an
adjustment in the Exercise Price 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 number of shares of Common Stock
and other
capital stock or securities of the Company, if any, issuable
upon such
exercise over and above the number of shares of Common Stock
and other
capital stock or securities of the Company, if any, issuable
upon such
exercise on the basis of the Exercise Price in effect prior
to such
adjustment; provided, however, that the Company shall
deliver to such
holder a due bill or other appropriate instrument evidencing
such
holder's right to receive such additional shares upon the
occurrence of
the event requiring such adjustment.
(m) Notwithstanding anything in this Section 11 to
the contrary,
the Company shall be entitled to make such reductions in the
Exercise
Price, in addition to those adjustments expressly required
by this
Section 11, as and to the extent that it in its sole
discretion shall
determine to be advisable in order that any consolidation or
subdivision
of the Common Stock, issuance wholly for cash of any shares
of Common
Stock at less than the Current Per Share Market Price,
issuance wholly
for cash of shares of Common Stock or securities which by
their terms are
convertible into or exchangeable for shares of Common Stock,
stock
dividends or issuance of rights, options or warrants
referred to
hereinabove in this Section 11, hereafter made by the
Company to holders
of its Common Stock, shall not be taxable to such
shareholders.
(n) The Company covenants and agrees that it shall
not, at any
time after the Distribution Date, (i) consolidate with, (ii)
merge with
or into, or (iii) sell or transfer (or permit any Subsidiary
to sell or
transfer), in one transaction or a series of related
transactions, assets
or earning power aggregating 50% or more of the assets or
earning power
of the Company and its Subsidiaries taken as a whole, to any
other Person
or Persons if (x) at the time of or immediately after such
consolidation,
merger or sale there are any rights, warrants or other
instruments
outstanding or agreements or arrangements in effect which
would
substantially diminish or otherwise eliminate the benefits
intended to be
afforded by the Rights, or (y) prior to, simultaneously with
or
immediately after such consolidation, merger or sale the
shareholders of
a Person who constitutes, or would constitute, the
"Principal Party" for
the purposes of Section 13(a) hereof shall have received a
distribution
of Rights previously owned by such Person or any of its
Affiliates and
Associates.
(o) The Company covenants and agrees that after the
Distribution
Date it will not, except as permitted by Section 23 or
Section 24 hereof,
take (or permit any Subsidiary to take) any action if at the
time such
action is taken it is reasonably foreseeable that such
action will
substantially diminish or otherwise eliminate the benefits
intended to be
afforded by the Rights.
Section 12. Certificate of Adjusted Exercise Price or
Number of
Shares. Whenever an adjustment is made as provided in
Section 11 and
Section 13 hereof, 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 Common Stock a copy of
such
certificate and (c) mail a brief summary thereof to each
holder of a
Right Certificate in accordance with Section 25 hereof. The
Rights Agent
shall be fully protected in relying on any such certificate
and on any
adjustment contained therein and shall not be deemed to have
knowledge of
any such adjustment unless and until it shall have received
such
certificate.
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or
Earning Power.
(a) In the event that, on or after the Share
Acquisition Date,
directly or indirectly, (x) the Company shall consolidate
with, or merge
with and into, any other Person (other than a Subsidiary of
the Company
in a transaction which is not prohibited by Section 11(o)
hereof), and
the Company shall not be the continuing or surviving
corporation of such
consolidation or merger (y) any Person (other than a
Subsidiary of the
Company in a transaction which is not prohibited by Section
11(o) hereof)
shall consolidate with the Company, or merge with and into
the Company
and the Company shall be the continuing or surviving
corporation of such
merger and, in connection with such merger, all or part of
the shares of
Common Stock shall be changed into or exchanged for stock or
other
securities of any other Person or cash or any other
property, or (z) the
Company shall sell, mortgage or otherwise transfer (or one
or more of its
Subsidiaries shall sell, mortgage or otherwise transfer), in
one
transaction or a series of related transactions, assets or
earning power
aggregating 50% or more of the assets or earning power of
the Company and
its Subsidiaries (taken as a whole) to any other Person or
Persons (other
than the Company or any Subsidiary of the Company in one or
more
transactions each of which is not prohibited by Section
11(o) hereof)
then, and in each such case, proper provision shall be made
so that: (i)
each holder of a Right, except as provided otherwise herein,
shall have
the right to receive, upon the exercise thereof at the then
current
Exercise Price in accordance with the terms of this
Agreement, such
number of validly authorized and issued, fully paid and
nonassessable
shares of freely tradeable Common Stock of the Principal
Party (as
hereinafter defined in Section 13(b)), free and clear of
rights of call
or first refusal, liens, encumbrances or other adverse
claims, as shall
be equal to the result obtained by (1) multiplying the then
current
Exercise Price by the number of one half shares of Common
Stock for which
a Right is exercisable immediately prior to the first
occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to
the first occurrence of a Section 13 Event, multiplying the
number of one
half shares of Common Stock for which a Right was
exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event
by the
Exercise Price in effect immediately prior to such first
occurrence) and
dividing that product (which, following the first occurrence
of a Section
13 Event, shall be referred to as the "Exercise Price" for
each Right and
for all purposes of this Agreement) by (2) 50% of the
Current Per Share
Market Price (determined pursuant to Section 11(d) hereof)
of the Common
Stock of such Principal Party on the date of consummation of
such
consolidation, merger, sale or transfer; (ii) such Principal
Party shall
thereafter be liable for, and shall assume, by virtue of
such
consolidation, merger, sale or transfer, all the obligations
and duties
of the Company pursuant to this Agreement; (iii) the term
"Company" shall
thereafter be deemed to refer to such Principal Party, it
being
specifically intended that the provisions of Section 11
hereof shall
apply to such Principal Party; and (iv) such Principal Party
shall take
such steps (including, but not limited to, the reservation
of a
sufficient number of shares of its Common Stock to permit
exercise of all
outstanding Rights in accordance with this Section 13(a)) in
connection
with such consummation as may be necessary to assure that
the provisions
hereof shall thereafter be applicable, as nearly as
reasonably may be, in
relation to its shares of Common Stock thereafter
deliverable upon the
exercise of the Rights. The Company shall not enter into
any transaction
of the kind set forth in this subsection if at the time of
the
consummation of such transaction there are any options,
warrants, rights,
conversion or exchange provisions or securities outstanding
or any
agreements or arrangements in effect which, as a result of
the
consummation of such transaction, would eliminate or
substantially
diminish the benefits intended to be afforded by the Rights.
If, in the
case of a transaction of the kind described in clause (z) of
the first
sentence of this subsection, the Person or Persons to whom
assets or
earning power are sold or otherwise transferred are
individuals, then the
preceding sentences of this subsection shall be
inapplicable, and the
Company shall require as a condition to such sale or
transfer that such
Person or Persons pay to each holder of a Rights
Certificate, upon its
surrender to the Rights Agent and in exchange therefor
(without requiring
payment by such holder), cash in the amount determined by
multiplying the
then current Exercise Price by the number of one half shares
of Common
Stock for which a Right is then exercisable.
(b) "Principal Party" shall mean
(i) in the case of any transaction described
in clause (x)
or (y) of the first sentence of Section 13(a), the Person
that is the
issuer of any securities into which shares of Common Stock
of the Company
are converted in such merger or consolidation, and if no
securities are
so issued, the Person that is the other party to the merger
or
consolidation; and
(ii) in the case of any transaction described
in clause (z)
of the first sentence of Section 13(a), the Person that is
the party
receiving the greatest portion of the assets or earning
power transferred
pursuant to such transaction or transactions;
provided, however, that in any such case, (x) if the Common
Stock of such
Person is not at such time and has not been continuously
over the
preceding 12-month period registered under Section 12 of the
Exchange
Act, and such Person is a direct or indirect Subsidiary of
another Person
the Common Stock of which is and has been so registered,
"Principal
Party" shall refer to such other Person; and (y) in case
such Person is a
Subsidiary, directly or indirectly, or more than one Person,
the Common
Stocks of two or more of which are and have been so
registered,
"Principal Party" shall refer to whichever of such Persons
is the issuer
of the Common Stock having the greatest aggregate market
value of shares
outstanding.
(c) The Company shall not consummate any such
consolidation,
merger, sale or transfer unless prior thereto (x) the
Principal Party
shall have a sufficient number of authorized shares of its
Common Stock
which have not been issued or reserved for issuance to
permit the
exercise in full of the Rights in accordance with this
Section 13, and
(y) the Company and each Principal Party and each other
Person who may
become a Principal Party as a result of such consolidation,
merger, sale
or transfer shall have executed and delivered to the Rights
Agent a
supplemental agreement providing for the terms set forth in
Section 13(a)
and (b) and further providing that, as soon as practicable
after the date
of any consolidation, merger, sale or transfer of assets
mentioned in
Section 13(a), the Principal Party at its own expense will
(i) prepare and file a registration statement
under the
Securities Act with respect to the Rights and the securities
purchasable
upon exercise of the Rights on an appropriate form, use its
best efforts
to cause such registration statement to become effective as
soon as
practicable after such filing and use its best efforts to
cause such
registration statement to remain effective (with a
prospectus that at all
times meets the requirements of the Securities Act) until
the Final
Expiration Date;
(ii) use its best efforts to qualify or
register the Rights
and the securities purchasable upon exercise of the Rights
under the blue
sky laws of such jurisdictions as may be necessary or
appropriate;
(iii) use its best efforts to list (or
continue the listing
of) the Rights and the securities purchasable upon exercise
of the Rights
on a national securities exchange or to meet the eligibility
requirements
for quotation on NASDAQ; and
(iv) deliver to holders of the Rights
historical financial
statements for the Principal Party and each of its
Affiliates which
comply in all material respects with the requirements for
registration on
Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive
mergers or consolidations or sales or other transfers. If
any Section 13
Event shall occur at any time after the occurrence of a
Section 11(a)(ii)
Event, the Rights which have not theretofore been exercised
shall
thereafter become exercisable in the manner described in
Section 13(a).
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue
fractions of
Rights, or to distribute Right Certificates which evidence
fractional
Rights. In lieu of such fractional Rights, there may be
paid to the
registered holders of the Right 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 14(a), the current market value of
a whole Right
shall be the closing price per Right for the Trading Day
immediately
prior to such date on which fractional Rights would have
been otherwise
issuable. The closing price for any Trading Day shall be
the last sale
price, regular way, or, in case no such sale takes place on
such Trading
Day, the average of the closing bid and asked prices,
regular way, in
either case as reported in the principal consolidated
transaction
reporting system with respect to securities listed or
admitted to trading
on the New York Stock Exchange or, if the Rights are not
listed or
admitted to trading on the New York Stock Exchange, as
reported in the
principal consolidated transaction reporting system with
respect to
securities listed on the principal national securities
exchange on which
the Rights are listed or admitted to trading; or, if not
listed or
admitted to trading on any national securities exchange, the
last quoted
price (or, if not so quoted, the average of the last quoted
high bid and
low asked prices) in the over-the-counter market, as
reported by NASDAQ
or such other system then in use; or, if, on any such
Trading Day no bids
for the Rights are quoted by any such organization, the
average of the
closing bid and asked prices as furnished by a professional
market maker
making a market in the Rights selected by the Board of
Directors of the
Company. If on any such date no market maker is making a
market in the
Rights the current market value of the Rights on such
Trading Day shall
be determined reasonably and with utmost good faith to the
holders of the
Rights by the Board of Directors of the Company, whose
determination
shall be described in a statement filed with the Rights
Agent and shall
be binding on the Rights Agent.
(b) The Company shall not be required to issue
fractions of
shares of Common Stock upon exercise of the Rights or to
distribute
certificates which evidence fractional shares of Common
Stock. In lieu
of fractional shares of Common Stock, the Company may pay to
the
registered holders of Right Certificates at the time such
Rights are
exercised as herein provided an amount in cash equal to the
same fraction
of the current market value per share of Common Stock. For
purposes of
this Section 14(b), the current market value per share of
Common Stock
shall be the closing price per share of Common Stock
determined pursuant
to Section 11(d) hereof for the Trading Day immediately
prior to the date
of such exercise.
(c) The holder of a Right 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
permitted by this
Section 14.
Section 15. Rights of Action. All rights of action in
respect of
this Agreement, other than rights of action vested in the
Rights Agent
pursuant to Section 18 hereof, are vested in the respective
registered
holders of the Right Certificates (and prior to the
Distribution Date,
the registered holders of the Common Stock); and any
registered holder of
any Right Certificate (or, prior to the Distribution Date,
of the Common
Stock), without the consent of the Rights Agent or of the
holder of any
other Right Certificate (or, prior to the Distribution Date,
of the
Common Stock), 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 Right evidenced by such Right Certificate in the manner
provided in
such Right Certificate and in this 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 Agreement and
shall be
entitled to specific performance of the obligations
hereunder and
injunctive relief against actual or threatened violations of
the
obligations hereunder of any Person subject to this
Agreement. Holders
of Rights shall be entitled to recover the reasonable costs
and expenses,
including attorneys' fees, incurred by them in any action to
enforce the
provisions of this Agreement.
Section 16. Agreement of Right Holders. Every holder
of a Right, by
accepting the same, consents and agrees with the Company and
with the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, each Right will
be
transferable only simultaneously and together with the
transfer of shares
of Common Stock;
(b) after the Distribution Date, the Right
Certificates are
transferable only on the registry books of the Rights Agent
if
surrendered at the office or offices of the Rights Agent
designated for
such purpose, duly endorsed or accompanied by a proper
instrument of
transfer;
(c) subject to Sections 6 and 11, the Company and
the Rights
Agent may deem and treat the person in whose name a Right
Certificate
(or, prior to the Distribution Date, the associated Common
Stock
certificate) is registered as the absolute owner thereof and
of the
Rights evidenced thereby (notwithstanding any notations of
ownership or
writing on the Right Certificates or the associated Common
Stock
certificate 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; and
(d) notwithstanding anything in this Agreement to
the contrary,
neither the Company nor the Rights Agent shall have any
liability to any
holder of a Right or other Person as the result of its
inability to
perform any of its obligations under this Agreement by
reason of any
preliminary or permanent injunction or other order, decree
or ruling
issued by a court of competent jurisdiction or by a
governmental,
regulatory or administrative agency or commission, or any
statute, rule,
regulation or executive order promulgated or enacted by any
governmental
authority prohibiting or otherwise restraining performance
of such
obligations; provided, however, that the Company must use
its reasonable
best efforts to have any such order, decree or ruling lifted
or otherwise
overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a
Shareholder. No
holder, as such, of any Right Certificate shall be entitled
to vote,
receive dividends or be deemed for any purpose the holder of
the shares
of Common Stock or 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 Right Certificate
be construed
to confer upon the holder of any Right Certificate, as such,
any of the
rights of a shareholder of the Company or 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 Section 25 hereof), or to receive
dividends or
subscription rights, or otherwise, until the Right or Rights
evidenced by
such Right Certificate shall have been exercised in
accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable
compensation for all services rendered by it hereunder and,
from time to
time, on demand of the Rights Agent, its reasonable expenses
and counsel
fees and disbursements and other disbursements incurred in
the
administration and execution of this Agreement and the
exercise and
performance of its duties hereunder. The Company also
agrees to
indemnify the Rights Agent for, and to hold it harmless
against any loss,
liability, or expense, incurred without negligence,
recklessness, bad
faith or willful misconduct on the part of the Rights Agent,
for anything
done or omitted by the Rights Agent in connection with the
acceptance and
administration of this Agreement, including the costs and
expenses of
defending against any claim of liability arising therefrom,
directly or
indirectly.
(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 Agreement
in reliance
upon any Right Certificate or certificate for Common Stock
or other
securities of the Company, instrument of assignment or
transfer, power of
attorney, endorsement, affidavit, letter, notice, direction,
consent,
certificate, statement, or other paper or document believed
by it to be
genuine and to be signed, executed and, where necessary,
verified or
acknowledged, by the proper Person or Persons, or in
reliance upon the
advice of counsel as set forth in Section 20.
Section 19. Merger or Consolidation or Change of Name 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 corporate trust or shareholder
services
business of the Rights Agent or any successor Rights Agent,
shall be the
successor to the Rights Agent under this 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
21 hereof. In case at the time such successor Rights Agent
shall succeed
to the agency created by this Agreement, any of the Right
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 Right Certificates so countersigned;
and in case
at that time any of the Right Certificates shall not have
been
countersigned, any successor Rights Agent may countersign
such Right
Certificates either in the name of the predecessor or in the
name of the
successor Rights Agent; and in all such cases such Right
Certificates
shall have the full force provided in the Right Certificates
and in this
Agreement.
(b) In case at any time the name of the Rights
Agent shall be
changed and at such time any of the Right Certificates shall
have been
countersigned but not delivered, the Rights Agent may adopt
the
countersignature under its prior name and deliver Right
Certificates so
countersigned; and in case at that time any of the Right
Certificates
shall not have been countersigned, the Rights Agent may
countersign such
Right Certificates either in its prior name or in its
changed name; and
in all such cases such Right Certificates shall have the
full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the
duties and obligations imposed by this Agreement upon the
following terms
and conditions, by all of which the Company and the holders
of Right
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel
selected by
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 or omitted by it in good
faith and in
accordance with such opinion.
(b) Whenever in the performance of its duties under
this
Agreement the Rights Agent shall deem it necessary or
desirable that any
fact or matter (including, without limitation, the identity
of any
Acquiring Person and the determination of Current Per Share
Market Price)
be proved or established by the Company prior to 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 duly
authorized officer of the Company and delivered to the
Rights Agent; and
such certificate shall be full and complete authorization
and protection
to the Rights Agent as to any action taken or omitted by it
in good faith
in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only
for its own
negligence, recklessness, bad faith or willful 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
Agreement or in
the Right Certificates (except 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.
(e) The Rights Agent shall not be under any
responsibility in
respect of the validity of this 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 Right
Certificate (except its
countersignature thereof); nor shall it be responsible for
any breach by
the Company of any covenant or condition contained in this
Agreement or
in any Right Certificate; nor shall it be responsible for
any change in
the exercisability of the Rights (including the Rights
becoming void
pursuant to Section 11(a) hereof) or any adjustment required
under the
provisions of Sections 3, 11, 13, 23 or 24 hereof 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 Right
Certificates
after receipt of a certificate describing any such
adjustment furnished
in accordance with Section 12 hereof), nor shall it be
responsible for
any determination by the Board of Directors of the Company
of current
market value of the Rights or Common Stock pursuant to the
provisions of
Section 14 hereof; nor shall it by any act hereunder be
deemed to make
any representation or warranty as to the authorization or
reservation of
any shares of Common Stock to be issued pursuant to this
Agreement or any
Right Certificate or as to whether any shares of Common
Stock will, when
so issued, be validly authorized and issued, fully paid and
nonassessable; nor shall it be under any 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 of the
registered
holders of the Rights Certificates shall furnish the Rights
Agent with
security and indemnity to its satisfaction for any costs and
expenses
which may be incurred; nor shall it be liable for any
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 shall be
determined solely by
the express provisions hereof.
(f) The Company agrees that it will inform the
Rights Agent
promptly upon the Company's determination that a Person has
become an
Acquiring Person, and the Rights Agent will not be
responsible for making
such determination prior to such notice by the Company. 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 Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept
instructions with respect to the performance of its duties
hereunder and
certificates delivered pursuant to any provision hereof from
any duly
authorized officer of the Company, and is authorized to
apply to any such
officer for advice or 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
officer. 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 five
Business Days
after the date any officer of the Company actually receives
such
application, unless any such officer shall have consented in
writing to
an 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 or
employee 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 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 vested in it or perform any of its duties
hereunder either
directly 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 attorney or agent or for any loss to
the Company
resulting from any such act, default, neglect or misconduct,
provided the
Rights Agent exercised reasonable care in the selection or
continued
employment of such agent.
(j) If, with respect to any Right Certificate
surrendered to the
Rights Agent for exercise or transfer, the certificate
attached to the
form of assignment or form of election to purchase, as the
case may be,
has either not been completed or indicates an affirmative
response to
clause (1) or clause (2) thereof, the Rights Agent shall not
take any
further action with respect to such requested exercise or
transfer
without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or
any
successor Rights Agent may resign and be discharged from its
duties under
this agreement upon thirty (30) days' notice in writing
mailed to the
Company, and to each transfer agent of the Common Stock by
registered or
certified mail, and to the holders of the Right Certificates
by first-
class mail. The Company may remove the Rights Agent or any
successor
Rights Agent (with or without cause) upon thirty (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 Stock
by registered
or certified mail, and to the holders of the Right
Certificates by first-
class 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 Right Certificate (who shall, with such notice,
submit his
Right Certificate for inspection by the Company), then the
incumbent
Rights Agent or the registered holder of any Right
Certificate 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) a corporation
organized and
doing business under the laws of the United States or of the
State of
North Carolina or the State of South Carolina (or of any
other state of
the United States so long as such corporation is authorized
to do
business as a banking institution in the State of North
Carolina or the
State of South Carolina), in good standing, which is
authorized under
such laws to exercise shareholder services 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 or (b) an
Affiliate of a
corporation described in clause (a) of this sentence. 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 Stock and mail a notice thereof in
writing to the
registered holders of the Right Certificates. Failure to
give any notice
provided for in this Section 21, 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 22. Issuance of New Right Certificates.
Notwithstanding any
of the provisions of this Agreement or of the Rights to the
contrary, the
Company may, at its option, issue new Right Certificates
evidencing
Rights in such form as may be approved by its Board of
Directors to
reflect any adjustment or change in the Exercise Price and
the number or
kind or class of shares of stock or other securities or
property
purchasable under the Right Certificates made in accordance
with the
provisions of this Agreement. In addition, in connection
with the
issuance or sale of shares of Common Stock following the
Distribution
Date and prior to the redemption or expiration of the
Rights, the Company
(a) shall, with respect to shares of Common Stock 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
hereafter 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 Right Certificates representing the appropriate number
of Rights in
connection with such issuance or sale; provided, however,
that (i) no
such Right 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 Right Certificate would be issued,
and (ii) no
such Right Certificate shall be issued if, and to the extent
that,
appropriate adjustments shall otherwise have been made in
lieu of the
issuance thereof.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its
option, at any
time prior to the earlier of (x) the Close of Business on
the tenth day
following the Share Acquisition Date (or, if the Share
Acquisition Date
shall have occurred prior to the Record Date, the Close of
Business on
the tenth day following the Record Date), or (y) the Final
Expiration
Date, redeem all but not less than all of the then
outstanding Rights at
a redemption price of $.001 per Right, as such amount may be
appropriately adjusted, as determined by the Board of
Directors, to
reflect any transaction of the kind described in clauses (A)
through (D)
of Section 11(a)(i) occurring after the date hereof (such
redemption
price being hereinafter referred to as the "Redemption
Price"); provided,
however, that if the Board of Directors of the Company shall
authorize
the redemption of the Rights in the circumstances set forth
in clause (i)
or (ii) below, then there must be Disinterested Directors in
office and
such authorization shall require the concurrence of a
majority of such
Disinterested Directors: (i) such authorization occurs on or
after the
date a Person becomes an Acquiring Person or (ii) such
authorization
occurs on or after the date of a change (resulting from one
or more proxy
or consent solicitations) in a majority of the directors in
office at the
commencement of such solicitation if any Person who is a
participant in
such solicitation has stated (or, if upon the commencement
of such
solicitation a majority of the Board of Directors of the
Company has
determined in good faith) that such Person (or any of its
Affiliates or
Associates) intends to take, or may consider taking, any
action which
would result in such person becoming an Acquiring Person or
which would
cause the occurrence of an Adjustment Event. In considering
whether to
redeem the Rights, the Board of Directors of the Company may
consider the
best long-term and short-term interests of the Company,
including,
without limitation, the effects of the redemption of the
Rights upon
employees, suppliers and customers of the Company or any
Subsidiary of
the Company and communities in which offices or other
establishments of
the Company or any Subsidiary of the Company are located and
all other
pertinent factors. The redemption of the Rights by the
Board of
Directors may be effective at such time, on such basis and
with such
conditions as such Board of Directors in its sole discretion
may
establish. In addition to the right of redemption reserved
in the first
sentence of this subsection (a), if there are Disinterested
Directors
then in office, such Board of Directors may redeem, with the
concurrence
of a majority of such Disinterested Directors, all, but not
less than
all, of the then outstanding Rights at the Redemption Price
after the
occurrence of a Share Acquisition Date, but prior to the
occurrence of
any transaction of the kind described in Section
11(a)(ii)(A) or (C) or
Section 13(a), if either (i) a Person who is an Acquiring
Person shall
have transferred or otherwise disposed of a number of shares
of Common
Stock in one transaction or series of transactions, not
directly or
indirectly involving the Company or any of its Subsidiaries
and which did
not result in the occurrence of any transaction of the kind
described in
Section 11(a)(ii)(A) or (C) or Section 13(a), as shall
result in such
Person thereafter being a Beneficial Owner of 10% or less of
the
outstanding shares of Common Stock of the Company, and after
such
transfer or other disposition there are no other Acquiring
Persons, or
(ii) in connection with any transaction of the kind
described in Section
11(a)(ii)(A) or Section 13(a) in which all holders of the
Common Stock of
the Company are treated the same and which shall not involve
an Acquiring
Person, an Affiliate or Associate of an Acquiring Person,
any other
Person in which such Acquiring Person, Affiliate or
Associate has any
interest or any other Person acting, directly or indirectly,
on behalf of
or in association with such Acquiring Person, Affiliate or
Associate.
Notwithstanding any other provision of this Agreement, the
Rights shall
not be exercisable after the first occurrence of an event
specified in
Section 11(a)(ii) until such time as the Company's right of
redemption
hereunder has expired.
(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 for each Right so held.
Promptly after
the action of the Board of Directors ordering the redemption
of the
Rights, the Company shall give notice of such redemption to
the Rights
Agent and the holders of the then outstanding Rights by
mailing such
notice to the Rights Agent and 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 Stock. 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 redemption will state the
method by
which the payment of the Redemption Price will be made.
Neither the
Company nor any of its Affiliates or Associates may redeem,
acquire or
purchase of value any Rights at any time in any manner other
than that
specifically set forth in this Section 23, or in connection
with the
purchase, acquisition or redemption of shares of Common
Stock prior to
the Distribution Date.
(c) The Company may, at its option, pay the
Redemption Price in
cash, shares of Common Stock (based on the Current Per Share
Market Price
of the Common Stock as of the time of redemption) or any
other form of
consideration deemed appropriate by the Board.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at
its option,
at any time after any Person shall have become an Acquiring
Person,
exchange all or any part of the then outstanding and
exercisable Rights
(which shall not include Rights which have become void
pursuant to the
provisions of Section 11(a)(ii)) for Common Stock of the
Company at an
exchange rate of one share of Common Stock per Right,
appropriately
adjusted to reflect any transaction specified in clauses (A)
through (D),
inclusive, of Section 11(a)(i) occurring after the date
hereof (such
exchange rate being hereinafter called the "Exchange Rate");
provided,
however, that the Board of Directors shall not be empowered
to effect
such an exchange at any time after any Person (other than an
Exempt
Person), together with all Affiliates and Associates of such
Person,
shall have become the Beneficial Owner of 50% or more of the
Common Stock
of the Company then outstanding.
(b) Immediately after any action by the Board of
Directors of the
Company directing the exchange of any Rights pursuant to
subsection (a)
of this Section 24, notice of which shall be filed with the
Rights Agent,
and without any further action and without any notice, the
right to
exercise such Rights shall terminate and each registered
holder of such
Rights shall thereafter be entitled to receive only the
number of shares
of Common Stock which shall equal the number of Rights held
by such
registered holder multiplied by the Exchange Rate. The
Company shall
give prompt public notice of any exchange directed pursuant
to such
subsection (a); provided, however, that the failure to give,
or any
defect in, any such notice shall not affect the validity of
such
exchange. Within 10 days after action by such Board of
Directors
directing the exchange of such Rights, the Company shall
mail a notice of
exchange to all registered holders of such Rights at their
last addresses
appearing 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 Stock. Any notice which is mailed in the manner
herein provided
shall be deemed given, whether or not received by the
registered holder
to whom sent; provided, however, that the failure to give,
or any defect
in, any such notice shall not affect the validity of any
such exchange.
Each such notice shall state the method by which the
exchange of Common
Stock for Rights 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 among the registered
holders of the
Rights based upon the number of Rights held (excluding
Rights which have
become void pursuant to the provisions of Section
11(a)(ii)); and in such
case, a new Rights Certificate evidencing the Rights not
being exchanged
shall be prepared and executed by the Company and
countersigned and
delivered by the Rights Agent to the registered holder of
such Rights
subject to the provisions of Section 14.
(c) In the event that there shall be an
insufficient number of
shares of Common Stock authorized but unissued or issued and
held in the
treasury of the Company to permit an exchange of Rights
directed by the
Board of Directors of the Company, the Company shall take
all such action
as may be necessary to authorize additional shares of Common
Stock for
issuance upon such exchange of the Rights. In any such
exchange, the
Company may, at its option, substitute Equivalent Common
Stock for some
or all of the Common Stock otherwise exchangeable for the
Rights.
(d) The Company shall not be required to issue
fractional
shares of Common Stock in exchange for Rights or to
distribute
certificates which evidence fractional shares of Common
Stock. In lieu
of fractional shares of Common Stock, the Company shall pay
to the
registered holders of the Rights with respect to which such
fractional
Common Stock would otherwise be issuable an amount in cash
equal to the
same fraction of the Current Per Share Market Value of
Common Stock (as
determined as provided in Section 11(d)) for the Trading Day
immediately
prior to the date of such exchange.
Section 25. Notice of Certain Events
(a) In case the Company shall propose, at any time
after the
Distribution Date, (i) to pay any dividend payable in stock
of any class
to the holders of Common Stock or to make any other
distribution to the
holders of Common Stock (other than a regular periodic cash
dividend out
of earnings or retained earnings of the Company), or (ii) to
offer to the
holders of Common Stock rights or warrants to subscribe for
or to
purchase any additional shares of Common Stock or shares of
stock of any
class or any other securities, rights or options, or (iii)
to effect any
reclassification of its Common Stock (other than a
reclassification
involving only the subdivision of outstanding shares of
Common Stock), or
(iv) to effect any consolidation or merger into or with, or
to effect any
sale, non-ordinary course mortgage or other transfer (or to
permit one or
more of its Subsidiaries to effect any sale, non-ordinary
course mortgage
or other transfer), in one transaction or a series of
related
transactions, of 50% or more of the assets or earning power
of the
Company and its Subsidiaries (taken as a whole) to, any
other person
(other than a Subsidiary of the Company in one or more
transactions each
of which is not prohibited by Section 11(o) hereof), or (v)
to effect the
liquidation, dissolution or winding up of the Company, then,
in each such
case, the Company shall give to each holder of a Right
Certificate, in
accordance with Section 26 hereof, a notice of such proposed
action,
which shall specify the record date for the purposes of such
stock
dividend, distribution of rights or warrants, or the date on
which such
reclassification, consolidation, merger, sale, transfer,
liquidation,
dissolution, or winding up is to take place and the date of
participation
therein by the holders of the shares of Common Stock, if any
such date is
to be fixed, and such notice shall be so given, in the case
of any action
covered by clause (i) or (ii) above, at least ten (10) days
prior to the
record date for determining holders of the shares of Common
Stock for
purposes of such action, and in the case of any such other
action, at
least ten (10) days prior to the date of the taking of such
proposed
action or the date of participation therein by the holders
of the shares
of Common Stock, whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall
occur, then, in
any such case, the Company shall as soon as practicable
thereafter give
to each registered holder of a Right Certificate, in
accordance with
Section 26 hereof, a notice of the occurrence of such event,
which shall
specify the event and the consequences of the event to
holders of Rights
under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by
this Agreement
to be given or made by the Rights Agent or by the holder of
any Right
Certificate 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:
Ryan's Family Steak Houses, Inc.
405 Lancaster Avenue
Greer, South Carolina 29652
Attn: Secretary
Subject to the provisions of Section 21, any notice or
demand
authorized by this Agreement to be given or made by the
Company
or by the holder of any Right Certificate 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:
Wachovia Bank of North Carolina, N.A.
301 North Church Street
Winston-Salem, North Carolina 27101
Attn: Rights Agent Ryan's Family Steak
Houses, Inc.
Notices or demands authorized by this Agreement to be given
or made by
the company or the Rights Agent to the holder of any Right
Certificate
(or, prior to the Distribution Date, to the holder of any
certificate
representing shares of Common Stock) 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 Company.
Section 27. Supplements and Amendments. Prior to the
Distribution
Date, the Company and the Rights Agent shall, if so directed
by the
Company, supplement or amend any provision of this Agreement
without the
approval of any holders of certificates representing Common
Stock. From
and after the Distribution Date, the Company and the Rights
Agent shall,
if the Company so directs, supplement or amend this
Agreement without the
approval of any holder of Right Certificates in order (i) to
cure any
ambiguity, (ii) to correct or supplement any provision
contained herein
which may be defective or inconsistent with any other
provisions herein,
(iii) to shorten or lengthen any time period hereunder or
(iv) to change
or supplement the provisions hereunder in any manner which
the Company
may deem necessary or desirable and which shall not
adversely affect, as
determined solely by the Company, the interests of the
holders of the
Rights or the Right Certificates (other than an Acquiring
Person or an
Affiliate or Associate of an Acquiring Person); provided,
however, that
this Agreement may not be supplemented or amended pursuant
to clause
(iii) of this sentence (A) to lengthen any time period
unless (1)
approved by a majority of the Disinterested Directors then
in office and
(2) such lengthening is for the purpose of protecting,
enhancing or
clarifying the rights of, and/or the benefits to, registered
holders of
the Rights, or (B) to lengthen any time period relating to
when the
Rights may be redeemed if at such time the Rights are not
then
redeemable. Upon the delivery of such 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
27, the Rights
Agent shall execute such supplement or amendment.
Notwithstanding
anything contained in this Agreement to the contrary, no
supplement or
amendment shall be made on or after the Distribution Date
which changes
the Redemption Price, the Final Expiration Date, the
Exercise Price or
the number of shares (or portions thereof) of Common Stock
for which a
Right is exercisable. Prior to the Distribution Date, the
interests of
the holders of Rights shall be deemed coincident with the
interests of
the holders of Common Stock.
Section 28. Successors. All the covenants and
provisions of this
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 29. Determinations and Actions by the Board of
Directors.
For all purposes of this Agreement, any calculation of the
number of
shares of Common Stock outstanding at any particular time,
including for
purposes of determining the particular percentage of such
outstanding
shares of Common Stock of which any Person is the Beneficial
Owner, shall
be made in accordance with the last sentence of Rule 13d-
3(d)(1)(i) of
the General Rules and Regulations under the Exchange Act as
in effect on
the date hereof. The Board of Directors of the Company
(with, where
specifically provided for herein, the approval of a majority
of the
Disinterested Directors) shall have the exclusive power and
authority to
administer this Agreement and to exercise all rights and
powers
specifically granted to the Board (with, where specifically
provided for
herein, the approval of a majority of the Disinterested
Directors) or to
the Company, or as may be necessary or advisable in the
administration of
this Agreement, including without limitation, the right and
power to (i)
interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the
administration of
this Agreement (including a determination to redeem or not
redeem the
Rights or to amend the Agreement). All such actions,
calculations,
interpretations and determinations (including, for purposes
of clause (y)
below, all omissions with respect to the foregoing) which
are done or
made by the Board of Directors (or, where specifically
provided for
herein, by a majority of the Disinterested Directors) in
good faith shall
(x) be final, conclusive and binding on the Company, the
Rights Agent,
the holders of the Rights and all other parties, and (y) not
subject any
member of the Board of Directors or any of the Disinterested
Directors to
any liability to the holders of the Rights or to any other
person.
Section 30. Benefits of this Agreement. Nothing in this
Agreement
shall be construed to give to any Person or corporation
other than the
Company, the Rights Agent and the registered holders of the
Right
Certificates (and, prior to the Distribution Date,
registered holders of
the Common Stock) any legal or equitable right, remedy or
claim under
this Agreement; but this Agreement shall be for the sole and
exclusive
benefit of the Company, the Rights Agent and the registered
holders of
the Right Certificates (and, prior to the Distribution Date,
registered
holders of the Common Stock).
Section 31. Severability. If any term, provision,
covenant or
restriction of this 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
Agreement shall remain in full force and effect and shall in
no way be
affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary,
if any such
term, provision, covenant or restriction is held by such
court or
authority to be invalid, void or unenforceable and the Board
of Directors
of the Company (including, if at the time of such
determination, there is
an Acquiring Person, a majority of the Disinterested
Directors then in
office) determines in its good faith judgment that severing
the invalid
language from the Agreement would adversely affect the
purpose or effect
of the Agreement, the right of redemption set forth in
Section 23 hereof
shall be reinstated and shall not expire until the Close of
Business on
the tenth day following the date of such determination by
the Board of
Directors.
Section 32. Governing Law. This Agreement, each Right
and each Right
Certificate issued hereunder shall be deemed to be a
contract made under
the laws of the State of South Carolina and for all purposes
shall be
governed by and construed in accordance with the laws of
such State
applicable to contracts to be made and to be performed
entirely within
South Carolina.
Section 33. Counterparts. This 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.
Section 34. Descriptive Headings. Descriptive headings
of the several
Sections of this Agreement are inserted for convenience only
and shall
not control or affect the meaning or construction of any of
the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to
be duly executed and their respective corporate seals to be
hereunto
affixed and attested, all as of the day and year first above
written.
ATTEST: RYAN'S FAMILY STEAK HOUSES,
INC.
By: By:
Secretary President
ATTEST: WACHOVIA BANK OF NORTH
CAROLINA, N.A.
By:________________________
By:_____________________________
Assistant Secretary Vice President
Exhibit A
[Form of Right Certificate]
Certificate No. R-______________ __________ Rights
NOT EXERCISABLE AFTER FEBRUARY 10, 2005 OR EARLIER IF NOTICE
OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION,
AT THE OPTION
OF THE COMPANY, AT $.001 PER RIGHT ON THE TERMS SET FORTH IN
THE RIGHTS
AGREEMENT. [UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID.] [THE
RIGHTS REPRESENTED BY THIS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY
A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS
AGREEMENT). THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY
BECOME VOID UNDER CERTAIN CIRCUMSTANCES AS SPECIFIED IN
SECTION 11(a) OF
THE RIGHTS AGREEMENT.]
RIGHT CERTIFICATE
RYAN'S FAMILY STEAK HOUSES, 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 Shareholder Rights Agreement dated as of
January 26,
1995 (the "Rights Agreement") between Ryan's Family Steak
Houses, Inc.
(the "Company"), and Wachovia Bank of North Carolina, N.A.
(the "Rights
Agent"), to purchase from the Company at any time after the
Distribution
Date (as such term is defined in the Rights Agreement) and
prior to the
Close of Business on February 10, 2005, at the office or
offices of the
Rights Agent designated for such purpose, or its successors
as Rights
Agent, one half of a fully paid and nonassessable share of
common stock,
$1.00 par value per share (the "Common Stock"), of the
Company, at an
exercise price of $25 per half share (the "Exercise Price")
equivalent to
$50 for each share), upon presentation and surrender of this
Right
Certificate with the Form of Election to Purchase and the
related
Certificate duly executed. The number of Rights evidenced
by this Right
Certificate (and the number of shares which may be purchased
upon
exercise thereof) set forth above and the Exercise Price per
share set
forth above, are the number and Exercise Price as of
_________________,
based on the Common Stock as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as
such term is
defined in the Rights Agreement), if the Rights evidenced by
this Right
Certificate are beneficially owned by (i) an Acquiring
Person or an
Affiliate or Associate of any such Person (as such terms are
defined in
the Rights Agreement), (ii) a transferee of any such
Acquiring Person,
Affiliate or Associate, or (iii) under certain circumstances
specified in
the Rights Agreement, a transferee of a Person who, after
such transfer,
became an Acquiring Person, or an Affiliate or Associate of
an Acquiring
Person, such Right shall become null and void and no holder
hereof shall
have any right with respect to such Rights from and after
the occurrence
of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Exercise Price
and the
number of shares of Common Stock or other securities which
may be
purchased upon the exercise of the Rights evidenced by this
Right
Certificate are subject to modification and adjustment upon
the happening
of certain events.
This Right Certificate is subject to all of 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 Rights Agreement reference 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 Right Certificates, which limitations of rights include
the temporary
suspension of the exercisability of such Rights under the
specific
circumstances set forth in the Rights Agreement. Copies of
the Rights
Agreement are on file at the principal offices of the
Company and the
Rights Agent and are also available upon written request to
the Company
or the Rights Agent.
This Right Certificate, with or without other Right
Certificates,
upon surrender at the office or offices of the Rights Agent
designated
for such purpose, may be exchanged for another Right
Certificate or
Certificates of like tenor and date evidencing Rights
entitling the
holder to purchase a like aggregate number of shares of
Common Stock as
the Rights evidenced by the Right Certificate or
Certificates surrendered
shall have entitled such holder to purchase. If this Right
Certificate
shall be exercised in part, the holder shall be entitled to
receive upon
surrender hereof another Right Certificate or Certificates
for the number
of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights
evidenced by this Certificate may be redeemed by the Board
of Directors
of the Company at its option at a redemption price of $.001
per Right
(payable in cash, Common Stock or other consideration deemed
appropriate
by the Board of Directors), or may be exchanged, in whole or
in part, for
Common Stock.
No fractional shares of Common Stock will be issued
upon the exercise
of any Right or Rights evidenced hereby, but in lieu thereof
a cash
payment will be made, as provided in the Rights Agreement.
No holder, as such, of this Right Certificate shall be
entitled to
vote or receive dividends or be deemed for any purpose the
holder of
shares of Common Stock or 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
stockholder of the
Company or any right to vote for the election of directors
or upon any
matter submitted to stockholders at any meeting thereof, or
to give or
withhold consent to any corporate action, or to receive
notice of
meetings or other actions affecting stockholders (except as
provided in
the Rights Agreement), or to receive dividends or
subscription rights, or
otherwise, until the Right or Rights evidenced by this Right
Certificate
shall have been exercised as provided in the Rights
Agreement.
This Right Certificate shall not be valid or obligatory
for any
purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers
of the Company
and its corporate seal.
Dated as of ____________, 19___.
ATTEST: Ryan's Family Steak Houses,
Inc.
By:________________________ By:________________________
Secretary President
Countersigned:
WACHOVIA BANK OF NORTH CAROLINA, N.A.
as Rights Agent
_____________________________
Title
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such
holder desires to transfer the Right
Certificate.)
FOR VALUE RECEIVED ____________________________ hereby
sells, assigns and
transfers unto
______________________________________________________
(please print name and address of transferee) this Right
Certificate,
together with all right, title and interest therein, and
does hereby
irrevocably constitute and appoint ________________________
Attorney, to
transfer the within Right Certificate on the books of the
within-named
Company, with full power of substitution.
Dated: _________________ 19___
______________________________
Signature
Signature Guaranteed:____________________
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate __
are __ are not
being transferred by or on behalf of a Person who is or was
an Acquiring
Person or an Affiliate or Associate of any such Person (as
such terms are
defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned,
the undersigned __ did __ did not directly or indirectly
acquire the
Rights evidenced by this Right Certificate from any Person
who is, was or
became an Acquiring Person or an Affiliate or Associate of
any such
Person.
Dated: ____________, 19___ ______________________________
Signature
NOTICE
The signature to the foregoing Assignment and
Certificate must
correspond to the name as written upon the face of this
Right Certificate
in every particular, without alteration or enlargement or
any change
whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
the
Rights represented by the Right Certificate.)
To: Ryan's Family Steak Houses, Inc.:
The undersigned hereby irrevocably elects to exercise
____________
Rights represented by this Right Certificate to purchase the
shares of
Common Stock issuable upon the exercise of the Rights (or
such other
securities of the Company or of any other person which may
be issuable
upon the exercise of the Rights) and requests that
certificates for such
shares be issued in the name of:
____________________________________________________________
_____________
_ (Please print name and address)
______________________________
(Please insert social security
or other identifying number)
If such number of Rights shall not be all the Rights
evidenced by
this Right Certificate, a new Right Certificate for the
balance of such
Rights shall be registered in the name of and delivered to:
____________________________________________________________
_____________
_ (Please print name and address)
______________________________
(Please insert social security
or other identifying number)
Dated: ____________, 19___
____________________________________
Signature
Signature Guaranteed:______________________
Exhibit B
RYAN'S FAMILY STEAK HOUSES, INC.
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On January 26, 1995, the Board of Directors of Ryan's
Family Steak
Houses, Inc. (the "Company") declared a dividend
distribution of one
Common Stock Purchase Right for each outstanding share of
Common Stock of
the Company to stockholders of record at the close of
business on
February 10, 1995. Each Right entitles the registered
holder to purchase
from the Company one half share of Common Stock, $1.00 par
value per
share (the "Common Stock"), at a cash exercise price of $25
per half
share, subject to adjustment. The description and terms of
the Rights
are set forth in a Shareholder Rights Agreement between the
Company and
Wachovia Bank of North Carolina, N.A., as Rights Agent.
Initially, the Rights will not be exercisable, will be
attached to
all outstanding shares of Common Stock, and no separate
Right
Certificates will be distributed. The Rights will separate
from the
Common Stock and a Distribution Date will occur upon the
earliest of (i)
10 days following a public announcement that a person or
group of
affiliated or associated persons (an "Acquiring Person")
(other than an
Exempt Person as defined in the Agreement) has acquired
beneficial
ownership of 15% or more of the outstanding shares of Common
Stock (the
date of said announcement being referred to as the "Share
Acquisition
Date") and (ii) 10 business days following the commencement
of a tender
offer or exchange offer that would result in a Person or
group owning 15%
or more of the outstanding shares of Common Stock.
Until the Distribution Date (or earlier redemption or
expiration of
the Rights), (a) the Rights will be evidenced by the Common
Stock
certificates and will be transferred with and only with such
Common Stock
certificates, (b) new Common Stock certificates issued after
February 10,
1995 will contain a notation incorporating the Shareholder
Rights
Agreement by reference, and (c) the surrender for transfer
of any
certificates for Common Stock will also constitute the
transfer of the
Rights associated with the Common Stock represented by such
certificate.
The Rights are not exercisable until the Distribution
Date and will
expire at the close of business on February 10, 2005 unless
previously
redeemed by the Company as described below.
As soon as practicable after the Distribution Date,
Right
Certificates will be mailed to holders of record of Common
Stock as of
the close of business on the Distribution Date and,
thereafter, the
separate Right Certificates alone will represent the Rights.
Except as
otherwise determined by the Board of Directors, only shares
of Common
Stock issued prior to the Distribution Date will be issued
with Rights.
In the event that (i) a Person acquires beneficial
ownership of 15%
or more of the Company's Common Stock, (ii) the Company is
the surviving
corporation in a merger with an Acquiring Person or any
Affiliate or
Associate and the Common Stock is not changed or exchanged,
(iii) an
Acquiring Person engages in one of a number of self-dealing
transactions
specified in the Shareholder Rights Agreement, or (iv) an
event occurs
which results in an Acquiring Person's ownership interest
being increased
by more than 1% (e.g., a reverse stock split), proper
provision will be
made so that each holder of a Right will thereafter have the
right to
receive upon exercise thereof at the then current exercise
price, that
number of shares of Common Stock (or in certain
circumstances, cash,
property, or other securities of the Company) having a
market value of
two times such exercise price. However, the Rights are not
exercisable
following the occurrence of any of the events set forth
above until such
time as the Rights are no longer redeemable as set forth
below.
Notwithstanding any of the foregoing, rights that are or
were
beneficially owned by an Acquiring Person shall become null
and void.
In the event that, at any time following the Share
Acquisition Date,
(i) the Company is acquired in a merger or other business
combination
transaction or (ii) 50% or more of the Company's assets or
earning power
is sold, each holder of a Right shall thereafter have the
right to
receive, upon exercise, common stock of the acquiring
company having a
market value equal to two times the exercise price of the
Right.
At any time after any person becomes an Acquiring
Person and prior
to such the time such Person, together with its Affiliates
and
Associates, becomes the Beneficial Owner of 50% or more of
the
outstanding Common Stock, the Board of Directors of the
Company may
exchange the Rights (other than Rights which have become
void), in whole
or in part, at the exchange rate of one share of Common
Stock per Right,
subject to adjustment as provided in the Rights Agreement.
The exercise price payable, and the number of shares of
Common Stock
or other securities or property issuable, upon exercise of
the Rights are
subject to adjustment from time to time to prevent dilution
(i) in the
event of a stock dividend on, or a subdivision, combination
or
reclassification of, the Common Stock, (ii) if holders of
the Common
Stock are granted certain rights or warrants to subscribe
for Common
Stock or securities convertible into Common Stock at less
than the
current market price of the Common Stock, or (iii) upon the
distribution
to holders of the Common Stock of evidence of indebtedness
or assets
(excluding regular quarterly cash dividends) or of
subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the exercise
price will be
required until cumulative adjustments amount to at least 1%
of the
exercise price. No fractional shares of Common Stock will
be issued and,
in lieu thereof, an adjustment, in cash will be made based
on the fair
market value of the Common Stock on the last trading date
prior to the
date of exercise.
The Rights may be redeemed in whole, but not in part,
at a price of
$.001 per Right (payable in cash, Common Stock or other
consideration
deemed appropriate by the Board of Directors) by the Board
of Directors
at any time prior to the close of business on the tenth day
after the
Share Acquisition Date or the final expiration Date of the
Rights
(whichever is earlier); provided that under certain
circumstances, the
Rights may not be redeemed unless there are Disinterested
Directors in
office and such redemption is approved by a majority of such
Disinterested Directors. After the redemption period has
expired, the
Company's right of redemption may be reinstated upon the
approval of the
Board of Directors if an Acquiring Person reduces his
beneficial
ownership to 10% or less of the outstanding shares of Common
Stock in
transaction or series of transactions not involving the
Company and there
are no other Acquiring Persons. Immediately upon the action
of the Board
of Directors ordering redemption of the Rights, the Rights
will terminate
and thereafter the only right of the holders of Rights will
be to receive
the redemption price.
Until a Right is exercised, the holder will have no
rights as a
stockholder of the Company (beyond those as an existing
stockholder),
including the right to vote or to receive dividends. While
the
distribution of the Rights will not be taxable to
stockholders or to the
Company, stockholders may, depending upon the circumstances,
recognize
taxable income in the event that the Rights become
exercisable for Common
Stock (or other consideration) of the Company or for common
stock of an
acquiring company as set forth above.
Any of the provisions of the Rights Agreement may be
amended by the
Board of Directors of the Company prior to the Distribution
Date. After
the Distribution Date, the provisions of the Rights
Agreement, other than
those relating to the principal economic terms of the
Rights, may be
amended by the Board to cure any ambiguity, defect or
inconsistency, to
make changes which do not adversely affect the interests of
holders of
Rights (excluding the interests of any Acquiring Person), or
to shorten
or lengthen any time period under the Rights Agreement.
Amendments
adjusting time periods may, under certain circumstances,
require the
approval of a majority of Disinterested Directors, or
otherwise be
limited.
A copy of the Shareholder Rights Agreement is available
free of
charge from the Company. This summary description of the
Rights does not
purport to be complete and is qualified in its entirety by
reference to
the Shareholder Rights Agreement.
