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SCHEDULE 14A INFORMATION
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
NOBLE ROMAN'S, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total Fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
2) Form, Schedule or Registration Statement No.:
3) Filing Party:
4) Date Filed:
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March 28, 2000
Dear Shareholder:
I cordially invite you to attend a special meeting of the
shareholders of Noble Roman's, Inc., an Indiana corporation, to be held
at 10:00 a.m. Eastern Standard Time on Tuesday, April 25, 2000, at the
Indianapolis Athletic Club, 350 North Meridian Street, Indianapolis,
Indiana 46204. The Notice of Special Meeting of Shareholders, Proxy
Statement and proxy that accompany this letter outline fully matters on
which action is expected to be taken at the special meeting.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING PLEASE SIGN,
DATE AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE. If you
attend the special meeting, you may withdraw your proxy and vote in
person if you wish. Your vote is important regardless of the number of
shares you own.
Sincerely,
/s/ A. Scott Mobley
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A. Scott Mobley
President
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NOBLE ROMAN'S, INC.
ONE VIRGINIA AVENUE, SUITE 800
INDIANAPOLIS, INDIANA 46204
(317) 634-3377
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD TUESDAY, APRIL 25, 2000
To Our Shareholders:
We are contacting you to notify you that a special meeting of
shareholders of Noble Roman's, Inc., an Indiana corporation, will be held
at 10:00 a.m. Eastern Standard Time on Tuesday, April 25, 2000, at the
Indianapolis Athletic Club, 350 North Meridian Street, Indianapolis,
Indiana 46204 for the following purposes:
1. To adopt a proposal to amend our Articles of Incorporation to
(i) increase the number of authorized shares of our capital
stock to 30,000,000, (ii) increase the number of authorized
shares of our common stock to 25,000,000, and (iii) create
5,000,000 shares of "blank check" preferred stock; and
2. To transact any other business that is properly brought before
the special meeting or any adjournment or postponement of the
special meeting.
Your board of directors has fixed the close of business on March 17,
2000 as the record date to determine the shareholders who are entitled to
notice of, and to vote at, the special meeting. Please read carefully the
accompanying proxy statement. The proxy statement describes the amendment
to the Articles of Incorporation. The proxy statement and its annexes are
deemed incorporated by reference in and form a part of this Notice.
Please be advised that shareholders representing more than 50% of
the outstanding common stock have signed an agreement to vote in favor of
the amendment. Accordingly, this vote is sufficient to approve the
amendment to our Articles of Incorporation.
WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING IN PERSON,
PLEASE PROMPTLY COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD IN
THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED
STATES. YOU MAY REVOKE YOUR PROXY IN THE MANNER DESCRIBED IN THE PROXY
STATEMENT AT ANY TIME BEFORE THE PROXY HAS BEEN VOTED AT THE SPECIAL
MEETING. IF YOU SIGN AND SEND IN YOUR PROXY CARD AND DO NOT INDICATE HOW
YOU WANT TO VOTE, YOUR PROXY WILL BE COUNTED AS A VOTE "FOR" THE MATTERS
CONSIDERED AT THE SPECIAL MEETING.
By Order of the Board of Directors
of Noble Roman's, Inc.
/s/ A. Scott Mobley
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A. Scott Mobley
March 28, 2000 President
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NOBLE ROMAN'S, INC.
ONE VIRGINIA AVENUE, SUITE 800
INDIANAPOLIS, INDIANA 46204
(317) 634-3377
PROXY STATEMENT
FOR SPECIAL MEETING OF SHAREHOLDERS TO BE
HELD ON TUESDAY, APRIL 25, 2000
APPROXIMATE DATE OF MAILING: MARCH 28, 2000
GENERAL
This proxy statement is furnished in connection with the
solicitation of proxies by the board of directors of Noble Roman's, Inc.,
an Indiana corporation, for use at the special meeting of shareholders to
be held on Tuesday, April 25, 2000 at 10:00 a.m., local time, at the
Indianapolis Athletic Club, 350 North Meridian Street, Indianpolis, Indiana
46204, and any adjournment or postponement thereof, for the purposes set
forth in the accompanying notice of special meeting of shareholders.
All proxies will be voted in accordance with the instructions
contained in the proxy. If no choice is specified, proxies will be voted
in favor of the amendment to our Articles of Incorporation as proposed by
our board of directors. A shareholder who executes a proxy may revoke it
at any time before it is exercised by delivering to us another proxy
bearing a later date, by submitting written notice of such revocation to
our corporate secretary or by personally appearing at the special meeting
and casting a contrary vote.
Please be advised that shareholders representing more than 50% of
our outstanding common stock have signed an agreement to vote in favor of
the amendment. Accordingly, this vote is sufficient to approve the
amendment to our Articles of Incorporation.
This proxy statement, the notice of special meeting and the
accompanying proxy were first mailed to the holders of our common stock on
or about March 28, 2000. We will bear the entire expense of soliciting
proxies. Proxies will be solicited by mail initially. Our directors,
executive officers and employees also may solicit proxies personally or by
telephone or other means, but such persons will not be specially
compensated for such services. Certain holders of record, such as brokers,
custodians and nominees, may be requested to distribute proxy materials to
beneficial owners and will be reimbursed by us for their reasonable
expenses incurred in sending proxy materials to beneficial owners.
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VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
Only shareholders of record at the close of business on March 17,
2000 are entitled to notice of, and to vote at, the special meeting. On
such date, there were 7,519,711 shares of our common stock outstanding.
Each share of common stock is entitled to one vote on each matter to be
voted upon at the special meeting.
To our knowledge, and except as set forth under "Security Ownership
of Certain Beneficial Owners and Management," no person beneficially owned
more than 5% of our common stock outstanding on March 17, 2000.
PROPOSAL I: AMENDMENT TO OUR ARTICLES OF INCORPORATION TO INCREASE
OUR AUTHORIZED NUMBER OF SHARES OF CAPITAL STOCK TO 30,000,000, TO
INCREASE OUR NUMBER OF AUTHORIZED SHARES OF COMMON STOCK TO 25,000,000
AND TO CREATE 5,000,000 SHARES OF "BLANK CHECK" PREFERRED STOCK
On March 15, 2000, our board of directors adopted resolutions amending,
subject to shareholder approval at the special meeting, Article V of our
Articles of Incorporation to (i) increase our authorized number of shares of
capital stock to 30,000,000, (ii) increase our common stock from 9,000,000
shares to 25,000,000 shares and (iii) approve and authorize 5,000,000 shares
of "blank check" preferred stock. A copy of the amendment is attached to
this proxy statement as Annex A. Our Articles of Incorporation currently
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authorize the issuance of up to 9,000,000 shares of capital stock, all of
which must be common stock. As of March 17, 2000, (i) 7,519,711 shares of
our common stock were issued and outstanding, (ii) 3,684,679 shares of our
common stock were reserved for issuance pursuant to outstanding warrants,
(iii) 365,750 shares of our common stock were reserved for issuance pursuant
to our Employee Stock Option Plan, (iv) 2,767,844 shares of our common stock
were reserved for issuance pursuant to convertible debt instruments, (v)
100,000 shares of our common stock were reserved pursuant to our ongoing
private placement and (vi) 6,138,381 shares of our common stock were
reserved for issuance pursuant to various instruments upon consummation of
the Securities Purchase Agreement described below.
BACKGROUND OF THE AMENDMENT; REASONS FOR THE AMENDMENT
In the latter part of 1999 and into 2000, we experienced material
cash flow deficits and as a result, became delinquent on certain accounts
payable to general creditors and on interest payments to The Provident Bank
under our financing arrangements with the bank. In order to obtain the
requisite capital necessary to allow us to pay our past due accounts and to
continue to expand our non-traditional and co-brand franchising businesses,
we entered into a Securities Purchase Agreement, dated February 8, 2000, by
and between us, The Provident Bank and certain other investors.
Pursuant to the Securities Purchase Agreement, certain investors,
other than the bank, agreed to purchase in the aggregate, 1,715,000 shares
of our common stock for an aggregate purchase price of $1,715,000.
Additionally, The Provident Bank agreed to convert $1,643,091 of a term
loan into 1,643,091 shares of our common stock and $4,929,275 of that loan
into 4,929,275 shares of our preferred stock which may be converted into
shares of our common stock at a price of $3.00 per share.
Currently, our Articles of Incorporation do not provide for the
issuance of convertible preferred stock and do not authorize for issuance
enough shares of common stock to complete the transactions contemplated
by the Securities Purchase Agreement. As a result, the consummation of
the Securities Purchase Agreement is conditioned on the approval by our
shareholders of the amendment.
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Please be advised that shareholders representing more than 50% of
the outstanding common stock have signed an agreement to vote in favor of
the amendment. Accordingly, this vote is sufficient to approve the
amendment to our Articles of Incorporation.
Your board of directors believes that the creation of 5,000,000
shares of "blank check" preferred stock (whereby the board of directors may
determine, in whole or in part, the preferences, limitations, and relative
voting and other rights of the preferred stock without shareholder
approval) and the increase to 25,000,000 of the number of authorized shares
of our common stock will allow us to generate the additional capital
necessary for continued expansion of our non-traditional and co-brand
franchising businesses. Upon approval of the proposed amendment to our
Articles of Incorporation by the requisite vote of our shareholders at the
special meeting, such amendment will become effective when the Certificate
of Amendment to our Articles of Incorporation is filed with the Secretary
of State of the State of Indiana.
Upon approval of the proposed amendment to our Articles of
Incorporation at the special meeting, our board of directors will create a
series of preferred stock to be designated as series A convertible
preferred stock and authorize the issuance of 4,929,275 shares of such
series of preferred stock to The Provident Bank in connection with the
transactions contemplated by the Securities Purchase Agreement. The
powers, preferences, rights, qualifications, limitations and restrictions
of such series of preferred stock are set forth in Annex B to this proxy
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statement.
Other than as discussed above, we have no present plans to issue any
shares of our common or preferred stock. It should be noted that any
issuance of additional shares of our common stock could be disadvantageous
to existing shareholders because such issuance might serve to dilute their
percentage interest in the company. Holders of our common stock do not
have preemptive rights to purchase any additional shares of our common
stock that may be issued. We would not be required to obtain shareholder
approval to issue authorized but unissued shares of our common stock, unless
required to do so by applicable law or the rules of any stock exchange on
which our shares may be listed. Upon approval of the amendment to our
Articles of Incorporation and upon consummation of the transactions
contemplated by the Securities Purchase Agreement, 10,877,802 shares of
our common stock will be issued and outstanding and 14,122,198 shares of
our common stock will be authorized and unissued; provided, however, only
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4,423,634 shares of our common stock will be authorized, unissued and
unreserved in accordance with our outstanding obligations.
The authorized but unissued shares of our common stock also could be
used by incumbent management to make more difficult, and thereby
discourage, an attempt to acquire control of Noble Roman's. For example,
the shares could be privately placed with purchasers who might support the
board of directors in opposing a hostile takeover bid. The issuance of the
new shares also could be used to dilute the stock ownership and voting
power of a third party seeking to remove directors, replace incumbent
directors, accomplish certain business combinations or alter, amend or
repeal provisions of our Articles of Incorporation. To the extent that it
impedes any such attempts, the issuance of shares following the amendment
may serve to perpetuate existing management.
The additional authorized shares of our common stock would have the
same rights and privileges as the shares of our common stock presently
authorized and/or outstanding.
REQUIRED VOTE
Pursuant to Chapter 38, Section 3 of the Indiana Business Corporation
Law, approval of the amendment to our Articles of Incorporation requires
the affirmative vote of a majority of the shares of our common stock
outstanding as of March 17, 2000, present in person or by proxy at a
shareholder meeting duly called and held.
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RECOMMENDATION OF THE BOARD
OUR BOARD OF DIRECTORS UNANIMOUSLY BELIEVES THE AMENDMENT TO OUR
ARTICLES OF INCORPORATION IS IN THE BEST INTERESTS OF NOBLE ROMAN'S AND OUR
SHAREHOLDERS AND, ACCORDINGLY, UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
APPROVAL AND ADOPTION OF THE AMENDMENT.
INTERESTS OF CERTAIN PERSONS
Mr. Coape-Arnold is the vice president of TradeCo Global
Securities, Inc., a corporate finance firm. We currently pay TradeCo a
monthly retainer of $5,000 to provide advice to management in the areas
of corporate finance, strategic direction and financial structuring.
Such monthly retainer will increase to $10,000 upon consummation of the
Stock Purchase Agreement described above. Additionally, under the
Securities Purchase Agreement we will pay TradeCo a transaction fee of
$137,200 payable in the form of a Senior Secured Participating Income
Note upon approval of the amendment and consummation of the transactions
contemplated by the Securities Purchase Agreement.
The Provident Bank is a holder of more than 5% of our common stock
and will be a holder of more than 5% of our series A convertible
preferred stock upon approval of the amendment and consummation of the
transactions contemplated by the Securities Purchase Agreement. In
connection with the consummation of the Securities Purchase Agreement,
The Provident Bank will convert $1,643,091 of a term loan into 1,643,091
shares of our common stock and $4,929,275 of a term loan into 4,929,275
shares of our series A convertible preferred stock which may be converted
to our common stock at a price of $3.00 per share. The Provident Bank
also extends credit to us under certain credit facilities.
In connection with the Securities Purchase Agreement described
above, Paul W. Mobley will receive warrants to purchase 700,000 shares
of our common stock at a price of $2.00 per share, in the event of (i) a
change in control of Noble Roman's, (ii) the sale of substantially all
of our assets, or (iii) the merger or consolidation of us with another
entity.
In connection with the Securities Purchase Agreement described
above, A. Scott Mobley will receive warrants to purchase 300,000 shares
of our common stock at a price of $2.00 per share, in the event of (i) a
change in control of Noble Roman's, (ii) the sale of substantially all
of our assets, or (iii) the merger or consolidation of us with another
entity.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the amount of
our common stock beneficially owned, as of March 17, 2000, by each of
our directors, our executive officers who earned more than $100,000 in
total compensation for the year ended December 31, 1999, any person who
is known by us to own beneficially more than 5% of our common stock and
all our directors and executive officers as a group:
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<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENT OF OUTSTANDING
NAME AND ADDRESS BENEFICIALLY OWNED<F1> COMMON STOCK<F2>
---------------- ---------------------- ----------------------
<S> <C> <C>
Paul W. Mobley 2,229,013 <F3> 25.27
One Virginia Avenue, Suite 800
Indianapolis, Indiana 46204
A. Scott Mobley 913,326 <F4> 11.03
One Virginia Avenue, Suite 800
Indianapolis, Indiana 46204
Provident Financial Group, Inc. 5,092,250 <F5> 50.68
One E. Fourth Street
Cincinnati, Ohio 45202
Donald A. Morrison, III 72,919 <F6> .97
320 N. Meridian, #412
Indianapolis, Indiana 46204
Douglas H. Coape-Arnold 1,771,625 <F7> 20.75
110 E. 59th Street, 18th Floor
New York, New York 10022
Geovest Capital Partners, L.P. 1,771,625 <F8> 20.75
110 E. 59th Street, 18th Floor
New York, New York 10022
James Lewis 4,364,136 <F9> 44.58
110 E. 59th Street, 18th Floor
New York, New York 10022
Hamilton Medaris Corp. 500,000 6.65
All Executive Officers and
Directors as a Group (8 persons) 5,089,883 47.56
<FN>
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<F1> All shares owned directly unless otherwise noted.
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<F2> The percentage calculations are based upon 7,519,711 shares of our
common stock issued and outstanding as of March 17, 2000 and, for
each officer or director of the group, the number of shares
subject to options or conversion rights exercisable currently or
within 60 days of March 17, 2000.
<F3> This total includes a warrant to purchase 600,000 shares of our
common stock at an exercise price of $.40 per share issued
November 19, 1997 in connection with the financial restructuring
with The Provident Bank and a warrant to purchase 700,000 shares
of our common stock at an exercise price of $2.00 per share, in
the event of (i) a change of control in Noble Roman's, (ii) the
sale of substantially all of Noble Roman's assets, or (iii) the
merger or consolidation of Noble Roman's with another entity.
<F4> Includes 60,000 shares subject to options granted under our
employee stock option plan which are exercisable at $4.25 per
share for 6,500 common shares, $3.63 per share for 4,500 common
shares, $3.25 per share for 6,500 common shares, $3.68 per share
for 7,500 common shares, $6.44 per share for 5,000 common shares,
$1.75 per share for 20,000 common shares and $1.00 per share for
10,000 common shares. Also includes a warrant to purchase 400,000
shares of our common stock at an exercise price of $.40 per share
issued November 19, 1997 in connection with the financial
restructuring with The Provident Bank and a warrant to purchase
300,000 shares of our common stock at an exercise price of $2.00
per share, in the event of (i) a change of control in Noble Roman's,
(ii) the sale of substantially all of Noble Roman's assets, or
(iii) the merger or consolidation of Noble Roman's with another
entity.
<F5> This total includes warrants to purchase in the aggregate 385,000
shares of our common stock at $.01 per share. The warrants were
granted to Provident Financial Group as partial consideration for
its obligations pursuant to an Amended and Restated Credit Agreement.
The total also includes 1,643,091 shares of our common stock
which Provident's 4,929,275 shares of our preferred stock may
be converted into and 500,002 shares of our common stock which
Provident's PIK notes are convertible into.
<F6> This total includes 70,219 shares owned by Traub and Company, Inc.
in its investment account, of which Mr. Morrison is shareholder.
Mr. Morrison disclaims beneficial ownership of such shares beyond
his interest in Traub and Company.
<F7> This total includes 1,771,625 shares beneficially owned by Geovest
Capital Partners, L.P. in its investment account, of which Mr.
Coape-Arnold is managing general partner. Mr. Coape-Arnold
disclaims beneficial ownership of such shares beyond his interest
in Geovest Capital Partners.
<F8> Includes warrants to purchase 20,000 shares of our common stock
at $.01 per share obtained from The Provident Bank and 1,000,000
shares of our common stock convertible from participating income
notes.
<F9> This total includes 138,580 shares of our common stock owned by
James Lewis Family Trust, 200,000 shares of our common stock owned
by James W. Lewis MPP, 520,000 shares of our common stock
convertible from participating income notes, 50,000 shares of our
common stock convertible from participating income notes owned by
James Lewis Family Investment, L.P., 100,000 shares of our common
stock convertible from participating income notes owned by James
W. Lewis IRA, 100,000 shares of our common stock convertible from
participating income notes owned by James W. Lewis MPP and a
warrant to purchase 1,500,000 shares of our common stock at $.01
per share obtained from The Provident Bank.
</TABLE>
INDEPENDENT PUBLIC ACCOUNTANTS
Rubin, Brown, Gornstein & Co. LLP has been engaged as our
independent accountants for the year ended December 31, 1999 and has
been selected by the board of directors to continue in such capacity
during 2000. No representatives of Rubin, Brown, Gornstein & Co. LLP
will be present at our special meeting to respond to questions from our
shareholders.
FUTURE SHAREHOLDER PROPOSALS
Under applicable regulations of the Securities and Exchange
Commission, all proposals of shareholders to be considered for inclusion in
the proxy statement for the 2000 annual meeting of shareholders must be
received at our offices, c/o corporate secretary, One Virginia Avenue,
Suite 800, Indianapolis, Indiana, 46204 by not later than 60 days prior to
the date of the annual meeting of shareholders.
Any written notice of a shareholder proposal must include the
following information: (a) as to each person whom the shareholder proposes
to nominate for election or reelection as a director, all information
relating to such person that is required to be disclosed in solicitations
of proxies for election of directors, or is otherwise required, in each
case pursuant to Regulation 14A under the Securities Exchange Act of 1934,
as amended (including such person's written consent to being named in the
proxy statement as a nominee and to serving as a director if elected);
(b) as to any other business that
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the shareholder proposes to bring before the meeting, a brief description
of the business desired to be brought before the meeting, the reasons for
conducting such business at the meeting and any material interest in such
business of such shareholder and the beneficial owner, if any, on whose
behalf the proposal is made; and (c) as to the shareholder giving the
notice and the beneficial owner, if any, on whose behalf the nomination or
proposal is made, (i) the name and address of such shareholder, as they
appear on our books, and of such beneficial owner, and (ii) the class and
number of our shares that are owned beneficially and of record by such
shareholder and such beneficial owner.
DISCRETIONARY VOTING
At our 2000 annual meeting of shareholders, the individuals named in
the proxy relating to such meeting will exercise discretionary authority to
vote on any matter brought before the meeting with respect to which we were
provided with notice after the date 75 days prior to the date of the annual
meeting of shareholders. In addition, we will include in the proxy statement
advice on the nature of the matter and how the individuals named in the proxy
relating to such meeting intend to exercise their discretion to vote on each
matter submitted to us on or before 75 days prior to the date of the annual
meeting of shareholders. Notwithstanding the above, the individuals named in
the proxy relating to such meeting shall not exercise discretionary authority
over a matter if: (i) we receive notice of such matter at least 75 days prior
to the date of the annual meeting of shareholders; (ii) at least 75 days prior
to the date of the annual meeting of shareholders, the proponent of such matter
provides us with a written statement that the proponent intends to deliver a
proxy statement and form of proxy to holders of at least the percentage of
our voting shares required under Indiana law to carry the proposal; (iii) the
proponent includes the same statement in its proxy materials filed under Rule
14a-6 of the Securities Exchange Act of 1934, as amended; and (iv) immediately
after soliciting the percentage of shareholders required to carry the proposal,
the proponent provides us with a statement from any solicitor or other person
with knowledge that the necessary steps have been taken to deliver a proxy
statement and form of proxy to holders of at least the percentage of our
voting shares required under Indiana law to carry the proposal.
ANNUAL REPORT
Our Annual Report on Form 10-K for the year ended December 31, 1998
(excluding exhibits) has been previously mailed to our shareholders.
INCORPORATION OF CERTAIN DOCUMENTS
We file annual, quarterly and special reports and other
information with the Securities and Exchange Commission. You can inspect
and copy these reports, proxy statements and other information at the
public reference facilities of the Securities and Exchange Commission,
in Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549; 7 World
Trade Center, Suite 1300, New York, New York 10048; and Suite 1400,
Citicorp Center, 500 W. Madison Street, Chicago, Illinois 60661-2511.
You can also obtain copies of these materials from the public reference
section of the Securities and Exchange Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. Please call the
Securities and Exchange Commission at 1-800-SEC-0330 for further
information on the public reference rooms. The Securities and Exchange
Commission also maintains a web site that contains reports, proxy and
information statements and other information regarding registrants that
file electronically with the Securities and Exchange Commission
(http://www.sec.gov).
The Securities and Exchange Commission allows us to "incorporate
by reference" the information we file with it, which means that we can
disclose important information to you by referring to those documents.
The information incorporated by reference is an important part of this
proxy statement, and information that we file later with the Securities
and Exchange Commission will automatically update and supersede this
information. We incorporate by reference the following documents we
filed with the Securities and Exchange Commission pursuant to Section 13
of the Securities Exchange Act of 1934, as amended:
* Annual Report on Form 10-K for the year ended December 31, 1998;
* Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999, June 30, 1999 and September 30, 1999;
* Our Form 8-K dated February 8, 2000; and
* All documents filed by us with the Securities and Exchange
Commission pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934 before the date of the special
meeting.
You may request a copy of these filings at no cost, by writing or
telephoning us at the following address:
Noble Roman's Inc.
One Virginia Avenue, Suite 8000
Indianapolis, Indiana 46204
Telephone: (317) 634-3377
Attention: Linda Minett
OTHER BUSINESS
Our board of directors is not aware of any business to be presented
at our special meeting other than that referred to in the Notice of Special
Meeting of Shareholders and discussed herein. No other matters may
properly come before the special meeting.
A. SCOTT MOBLEY
PRESIDENT
March 28, 2000
Indianapolis, Indiana
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ANNEX A
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ARTICLES OF AMENDMENT
OF THE
ARTICLES OF INCORPORATION
OF
NOBLE ROMAN'S, INC.
PURSUANT TO I.C. 23-1-38-1 ET SEQ. OF
THE INDIANA BUSINESS CORPORATION LAW
The undersigned officer of Noble Roman's, Inc. (the "Corporation"),
an Indiana corporation incorporated on September 21, 1972 and existing
under and pursuant to the provisions of the Indiana Business Corporation
Law, as amended (the "Act"), desiring to give notice of corporate action
effectuating amendment of certain provisions of its Articles of
Incorporation, does hereby certify the following facts:
FIRST: The exact text of Article V, Section 1 of the Corporation's
Articles of Incorporation shall read as follows:
Section 1. Number. The total number of shares which
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the Corporation has authority to issue is 30,000,000 shares
without par value.
SECOND: The exact text of Article V, Section 2, Paragraph 1 of the
Corporation's Articles of Incorporation shall read as follows:
1. The class and number of shares within each class
which the Corporation has authority to issue is 25,000,000
shares of common stock and 5,000,000 shares of preferred
stock.
THIRD: Each amendment was duly adopted by the shareholders of the
Corporation on April __, 2000.
FOURTH: The shareholders of the Corporation entitled to vote in
respect to the amendments adopted the proposed amendments. The amendments
were adopted by the vote of the shareholders of the Corporation during a
meeting called by the Board of Directors. The result of such vote is as
follows:
___________ Shares entitled to vote.
___________ Shares represented at the meeting.
___________ Shares voted in favor.
___________ Shares voted against.
FIFTH: The manner of the adoption of the Articles of Amendment and
the vote by which they were adopted constitute full legal compliance with
the provisions of the Act, the Articles of Incorporation and the By-Laws of
the Corporation.
[The remainder of this page has been intentionally left blank.]
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<PAGE>
IN WITNESS WHEREOF, the undersigned hereby verifies, subject to the
penalties of perjury, that the statements contained herein are true, this
____ day of _____________, 2000.
NOBLE ROMAN'S, INC.
By:_____________________________________
Paul W. Mobley, Chairman of the Board
and Chief Executive Officer
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<PAGE>
ANNEX B
-------
SERIES A CONVERTIBLE PREFERRED STOCK
------------------------------------
Pursuant to the authority vested in the Board of Directors of the
Corporation in accordance with the provisions of its Articles of
Incorporation, as amended, a series of Preferred Stock of the
Corporation be and it is hereby created, pursuant to which Four Million
Nine Hundred Twenty-Nine Thousand Two Hundred Seventy-Five (4,929,275)
shares of the Preferred Stock shall be designated Series A Convertible
Preferred Stock (the "Preferred Shares") and the powers, preferences and
relative, participating, optional and other special rights of such
Preferred Shares, and the qualifications, limitations or restrictions
thereof are as follows:
SECTION 1. LIQUIDATION.
---------- -----------
1.1 PREFERENCE. Upon any voluntary or involuntary
----------
liquidation, dissolution or winding up of the Corporation, each holder
of Preferred Shares will be entitled to be paid, before any distribution
or payment is made upon any Common Shares, Common Share Equivalents or
any other securities which may be subordinated to the Preferred Shares
with respect to the liquidation preference set forth in this Section
1.1, an amount in cash or other assets or property equal to the
aggregate Liquidation Value of all of such holder's Preferred Shares.
After payment of such aggregate Liquidation Value in respect of the
Preferred Shares, the entire remaining assets and funds of the
Corporation legally available for distribution, if any, shall be
distributed among the holders of Common Shares in proportion to the
Common Shares then held by them.
1.2 INSUFFICIENT FUNDS. If upon any liquidation,
------------------
dissolution or winding up of the Corporation, whether voluntary or
involuntary, the assets available for distribution to the shareholders
of the Corporation (the "Distributable Funds") are insufficient to
permit the payment to the holders of Preferred Shares of the full
preferential amount set forth in Section 1.1 above, then the
Distributable Funds shall be distributed to the holders of Preferred
Shares, ratably in proportion to the number of Preferred Shares held by
each such holder on the date of liquidation, dissolution or winding up
of the Corporation.
1.3 NOTICE. Unless such liquidation, dissolution or
------
winding up of the Corporation is waived by the holders of a majority of
the Preferred Shares then outstanding in writing pursuant to Section
1.4, the Corporation will mail written notice of such liquidation,
dissolution or winding up not less than 30 days prior to the payment
date stated therein to each record holder of Preferred Shares.
1.4 OTHER LIQUIDATION EVENTS. Any (a) sale or issuance
------------------------
or series of sales and/or issuances of shares of the Corporation's
capital stock by the Corporation or any holders thereof, including
without limitation pursuant to any merger, consolidation or other
Organic Change, which results in any Person or group of affiliated
Persons (other than the holders of Common Shares and Preferred Shares as
of the date of the Closing under the Securities Purchase Agreement)
owning capital stock of the Corporation possessing the voting power
(under ordinary circumstances) to elect a majority of the Board, (b)
Organic Change in which the stockholders of the Corporation immediately
prior to the transaction possess less than 50% of the voting power
<PAGE>
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of the surviving entity (or its parent) immediately after the
transaction, (c) sale or transfer of all or substantially all of the
assets of the Corporation, or of the Corporation and its Subsidiaries on
a consolidated basis, in any transaction or series of related
transactions, (d) Insolvency Event, (e) refinancing, recapitalization or
restructuring of the Corporation's debt or equity, or (f) taking of any
action described in Section 8.2 without obtaining the necessary consent
set forth in such Section, shall be deemed to be a liquidation,
dissolution or winding up for purposes of Section 1.1 above, resulting
in the redemption of the Preferred Shares upon payment of the aggregate
Liquidation Value therefor in accordance with Section 1.1, unless the
holders of a majority of the Preferred Shares then outstanding elect by
written notice to the Corporation that such event shall not be deemed a
liquidation.
SECTION 2. DIVIDENDS.
--------- ---------
If at any time the Corporation pays any dividends or makes any
other distributions with respect to the Common Shares, the Corporation
shall pay at such time to each holder of Preferred Shares the dividends
or other distributions which such holder would have been entitled to
receive had such holder converted all of its Preferred Shares into
Common Shares on the date as of which the holders of Common Shares of
record entitled to such dividends or other distributions were
determined.
SECTION 3. CONVERSION.
---------- ----------
3.1 CONVERSION PROCEDURE.
--------------------
(a) At any time and from time to time, any holder of
Preferred Shares may convert all or any portion of the Preferred
Shares held by such holder into the number of Common Shares
computed by (i) multiplying the number of Preferred Shares to be
converted by $1.00 and (ii) dividing the resulting product by the
Conversion Price then in effect (as determined in Section 3.2
below).
(b) Each conversion of Preferred Shares will be
deemed to have been effected as of the close of business on the
date on which the certificate or certificates representing the
Preferred Shares to be converted have been surrendered at the
principal office of the Corporation accompanied by a written
request for conversion. At such time as such conversion has been
effected, the rights of the holder of such Preferred Shares will
cease and the Person or Persons in whose name or names any
certificate or certificates for Common Shares are to be issued
upon such conversion will be deemed to have become the holder or
holders of record of the Common Shares represented thereby.
(c) As soon as possible, but in no event longer than
ten business days, after a conversion has been effected, the
Corporation will deliver to the converting holder:
(i) a certificate or certificates
representing the number of Common Shares issuable by reason
of such conversion in such name or names and such
denomination or denominations as the converting holder has
specified;
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(ii) payment in an amount equal to the amount
payable under Section 3.1(f) below with respect to such
conversion; and
(iii) a certificate representing any Preferred
Shares which were represented by the certificate or
certificates delivered to the Corporation in connection with
such conversion but which were not converted.
(d) The issuance of certificates for Common Shares
upon conversion of Preferred Shares will be made without charge to
the holders of such Preferred Shares for any issuance tax in
respect thereof or other cost incurred by the Corporation in
connection with such conversion and the related issuance of Common
Shares. Upon conversion of each Preferred Share, the Corporation
will take all such actions as are necessary in order to insure
that the Common Shares issuable with respect to such conversion
will be validly issued, fully paid and nonassessable.
(e) The Corporation will not close its books against
the transfer of Preferred Shares or Common Shares issued or
issuable upon conversion of Preferred Shares in any manner which
interferes with the timely conversion of Preferred Shares.
(f) If a fractional interest in a Common Share
would, but for this Section 3.1(f), be deliverable upon any
conversion of the Preferred Shares, the Corporation shall, in lieu
of delivering a fractional interest thereof, pay an amount to the
holder thereof equal to the Market Price of such fractional
interest as of time of conversion.
(g) The Corporation shall at all times reserve and
keep available out of its authorized but unissued Common Shares,
solely for the purpose of issuance upon the conversion of the
Preferred Shares, such number of Common Shares issuable upon the
conversion of all outstanding Preferred Shares based upon the
Conversion Price then in effect. All Common Shares which are so
issuable shall, when issued, be duly and validly issued, fully
paid and nonassessable and free from all taxes (other than taxes
assessable on or against such holder), liens and charges. The
Corporation shall take all such actions as may be necessary to
assure that all such Common Shares may be so issued without
violation of any applicable law or governmental regulation
applicable to the Corporation or generally applicable to
transactions of such type or any requirements of any domestic
securities exchange upon which Common Shares may be listed (except
for official notice of issuance which shall be immediately
delivered by the Corporation upon each such issuance).
3.2 CONVERSION PRICE.
----------------
(a) Initial Conversion Price. The initial
------------------------
Conversion Price will be $3.00. In order to prevent dilution of
the conversion rights granted to holders of Preferred Shares
hereunder, the Conversion Price will be subject to adjustment from
time to time pursuant to this Section 3.2 and Sections 3.4 and 3.5
below. For purposes of this
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<PAGE>
Section 3.2, the Corporation shall be deemed to have issued or
sold Common Shares as set forth in Section 3.3 below.
(b) Adjustment for Dilutive Events. If and whenever
------------------------------
on or after February 8, 2000 the Corporation issues or sells, or
in accordance with Section 3.3 below is deemed to have issued or
sold, any Common Shares for consideration per share less than the
Conversion Price in effect immediately prior to the time of such
issue or sale (a "Dilutive Event"), then forthwith upon the
occurrence of any such Dilutive Event the Conversion Price will be
reduced so that the Conversion Price in effect immediately
following the Dilutive Event will equal the quotient derived by
dividing (i) the sum of (x) the product derived by multiplying the
Conversion Price in effect immediately prior to such Dilutive
Event times the number of Common Shares Deemed Outstanding
immediately prior to such Dilutive Event, plus (y) the
consideration, if any, received by the Corporation pursuant to
such Dilutive Event, by (ii) the number of Common Shares Deemed
Outstanding immediately after such Dilutive Event. As used in this
Section 3.2(b) and in Section 3.3 below, the term "Common Shares"
includes Common Share Equivalents.
3.3 COMMON SHARES DEEMED OUTSTANDING. For purposes of
--------------------------------
determining the adjusted Conversion Price pursuant to Section 3.2(b)
above, each of the following events shall be deemed to be an issuance
and sale of Common Shares by the Corporation and the "Common Shares
Deemed Outstanding" shall be the number of Common Shares actually issued
and outstanding plus the number of Common Shares deemed outstanding as a
result of the following events as set forth below:
(a) Issuance of Rights, Warrants or Options. If
---------------------------------------
after February 8, 2000 (i) the Corporation in any manner grants
any rights, warrants or options to subscribe for or to purchase
Common Shares or any securities convertible into or exchangeable
for Common Shares (such rights or options referred to herein as
"Options" and such convertible or exchangeable stock or securities
referred to herein as "Convertible Securities") and (ii) the Price
Per Share of Common Shares issuable upon the exercise of such
Options, or upon conversion or exchange of such Convertible
Securities is less than the Conversion Price in effect immediately
prior to the time of the granting of such Options, then (x) the
----
total maximum amount of such Common Shares issuable upon the
exercise of such Options or upon conversion or exchange of the
total maximum number of Convertible Securities issuable upon the
exercise of such Options will be deemed to be Common Shares issued
and sold by the Corporation, (y) the consideration received
pursuant to the Dilutive Event will equal the Price Per Share
times the number of Common Shares so deemed issued and sold by the
Corporation and (z) the number of Common Shares so deemed issued
and sold by the Corporation shall be included in the Common Shares
Deemed Outstanding. For purposes of this Section 3.3(a), the
"Price Per Share" will be determined by dividing (i) the total
amount, if any, received or receivable by the Corporation as
consideration for the granting of such Options, plus the minimum
aggregate amount of additional consideration payable to the
Corporation upon exercise of all such Options, plus in the case of
such Options which relate to Convertible Securities, the minimum
aggregate amount of additional consideration, if any, payable to
the
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<PAGE>
Corporation upon the issuance or sale of such Convertible
Securities and the conversion or exchange thereof, by (ii) the
total maximum number of Common Shares issuable upon the exercise
of such Options or upon the conversion or exchange of all such
Convertible Securities issuable upon the exercise of such Options.
No further adjustment of the Conversion Price will be made when
Convertible Securities are actually issued upon the exercise of
such Options or when Common Shares are actually issued upon the
exercise of such Options or the conversion or exchange of such
Convertible Securities.
(b) Issuance of Convertible Securities. If after
----------------------------------
February 8, 2000 (i) the Corporation in any manner issues or sells
any Convertible Securities and (ii) the Price Per Share of Common
Shares issuable upon such conversion or exchange is less than the
Conversion Price in effect immediately prior to the time of such
issue or sale, then (A) the maximum number of Common Shares
----
issuable upon conversion or exchange of such Convertible
Securities will be deemed to be Common Shares issued and sold by
the Corporation, (B) the consideration received pursuant to the
Dilutive Event will equal the Price Per Share times the number of
Common Shares so deemed issued and sold by the Corporation and (C)
the number of Common Shares so deemed issued and sold by the
Corporation shall be included in the Common Shares Deemed
Outstanding. For the purpose of this Section 3.3(b), the "Price
Per Share" will be determined by dividing (i) the total amount
received or receivable by the Corporation as consideration for the
issue or sale of such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable to
the Corporation upon the conversion or exchange thereof, by (ii)
the total maximum number of Common Shares issuable upon the
conversion or exchange of all such Convertible Securities. No
further adjustment of the Conversion Price will be made when
Common Shares are actually issued upon the conversion or exchange
of such Convertible Securities, and if any such issue or sale of
such Convertible Securities is made upon exercise of any Options
for which adjustments to the Conversion Price had been or are to
be made pursuant to Section 3.3(a) above, no further adjustment of
the Conversion Price will be made by reason of such issue or sale.
(c) Change in Option Price or Conversion Rate;
------------------------------------------
Expiration of Options, Convertible Securities. If at any time
---------------------------------------------
there is a change in (i) the purchase price provided for in any
Options, (ii) the additional consideration, if any, payable upon
the conversion or exchange of any Convertible Securities, or (iii)
the rate at which any Convertible Securities are convertible into
or exchangeable for Common Shares, then the Conversion Price in
effect at the time of such change will be readjusted to the
Conversion Price which would have been in effect had those Options
or Convertible Securities still outstanding at the time of such
change provided for such changed purchase price, additional
consideration or changed conversion rate, as the case may be, at
the time such Options or Convertible Securities were initially
granted, issued or sold; provided that if such adjustment would
result in an increase of the Conversion Price then in effect, such
adjustment will not be effective until 30 days after written
notice thereof has been given by the Corporation to all holders of
the Preferred Shares. Any adjustment of the Conversion Price
pursuant to Section 3.2(b) that relates to an Option or
Convertible Security shall be disregarded to the extent that the
right to exercise such Option or convert such Convertible Security
expires or is canceled without being exercised, so that the
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<PAGE>
Conversion Price in effect immediately after such expiration or
cancellation shall be equal to the Conversion Price in effect
immediately prior to the time of the issuance of the expired or
canceled Option or Convertible Security, with such additional
adjustments as would have been made to that Conversion Price had
the expired or canceled Option or Convertible Security not been
issued.
(d) Calculation of Consideration Received. If any
-------------------------------------
Common Shares, Option or Convertible Security is issued or sold or
deemed to have been issued or sold for cash, the consideration
received therefor or the Price Per Share, as the case may be, will
be deemed to be the net amount received or to be received,
respectively, by the Corporation therefor. In case any Common
Shares, Options or Convertible Securities are issued or sold for a
consideration other than cash, the amount of the consideration
other than cash received by the Corporation or the non-cash
portion of the Price Per Share, as the case may be, will be the
fair market value of such consideration received or to be
received, respectively, by the Corporation; except where such
consideration consists of securities, in which case the amount of
consideration received or to be received, respectively, by the
Corporation will be the Market Price thereof as of the date of
receipt. If any Common Shares, Options or Convertible Securities
are issued in connection with any merger in which the Corporation
is the surviving corporation, the amount of consideration therefor
will be deemed to be the fair market value of such portion of the
net assets and business of the non-surviving corporation as is
attributable to such Common Shares, Options or Convertible
Securities, as the case may be. The fair market value of any
consideration other than cash and securities will be determined
jointly by the Corporation and the holders of a majority of the
outstanding Preferred Shares. If such parties are unable to reach
agreement within a reasonable period of time, the fair market
value of such consideration will be determined by an independent
appraiser jointly selected by the Corporation and the holders of a
majority of the outstanding Preferred Shares; the cost of such
appraiser shall be shared equally by the Corporation and the
holders of the Preferred Shares.
(e) Integrated Transactions. In case any Option is
-----------------------
issued in connection with the issuance or sale of other securities
of the Corporation, together comprising one integrated transaction
in which no specific consideration is allocated to such Option by
the parties thereto, the Option will be deemed to have been issued
for a consideration of $1.00.
(f) Treasury Shares. The number of Common Shares
---------------
Deemed Outstanding at any given time shall not include shares
owned or held by or for the account of the Corporation, and the
disposition of any shares so owned or held shall be considered an
issuance or sale of Common Shares by the Corporation.
(g) Record Date. If the Corporation takes a record
-----------
of the holders of Common Shares for the purpose of entitling them
(i) to receive a dividend or other distribution payable in Common
Shares, Options or in Convertible Securities or (ii) to subscribe
for or purchase Common Shares, Options or Convertible Securities,
then such record date will be deemed to be the date of the
issuance or sale of the Common Shares
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deemed to have been issued or sold upon the declaration of such
dividend or upon the making of such other distribution or the date
of the granting of such right of subscription or purchase, as the
case may be.
(h) Exclusion. Notwithstanding the foregoing, the
---------
following shall not constitute an issuance and sale of Common
Shares by the Corporation for purposes of Section 3.2:
(i) Common Shares issued or issuable upon
conversion of Preferred Shares;
(ii) Common Shares issued or issuable as a
dividend or distribution on Preferred Shares;
(iii) up to 365,750 Common Shares issued to
directors, officers or employees of, or consultants to, the
Corporation pursuant to an agreement or an option plan or
purchase plan or other stock incentive program for
directors, officers, employees or consultants (other than
Paul W. Mobley or A. Scott Mobley) approved by the Board of
Directors (the "Employee Stock Options"), as adjusted for
any stock dividend, stock split or other recapitalization
occurring after February 8, 2000;
(iv) Common Shares issued pursuant to the
exercise of any Option (other than an Employee Stock Option)
or conversion of any Convertible Security issued and
outstanding on or before February 8, 2000;
(v) Common Shares and Convertible Securities
issued pursuant to (A) that certain Securities Purchase
Agreement dated as of February 8, 2000 between the
Corporation and the other parties thereto, and (B) that
certain Securities Purchase Agreement dated as of April 30,
1999 between the Corporation and the other parties thereto,
including, without limitation, additional Convertible
Securities issued pursuant to the terms thereof in lieu of
interest and Common Shares issued upon conversion of any
such Convertible Securities (collectively, the "Investor
Securities"); and
(vi) to the extent the Corporation declares a
dividend or other distribution with respect to its Common
Shares generally and pays such dividend or other
distribution in the form of Common Shares, the Common Shares
issued or issuable by way of such dividend or other
distribution with respect to Common Shares excluded from the
definition of Common Shares Deemed Outstanding by this
Section.
3.4 SUBDIVISION OR COMBINATION OF COMMON SHARES. If the
-------------------------------------------
Corporation at any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding
Common Shares into a greater number of shares, the Conversion Price in
effect immediately prior to such subdivision will be proportionately
reduced. If the Corporation at any time combines (by reverse stock
split or otherwise) one or more classes of its
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outstanding Common Shares into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination will be
proportionately increased.
3.5 ORGANIC CHANGE.
--------------
(a) Corporation Survives. Upon the consummation of
--------------------
an Organic Change (other than a transaction in which the
Corporation is not the surviving entity) the terms of the
Preferred Shares shall be deemed modified, without payment of any
additional consideration therefor, so as to provide that upon the
conversion of Preferred Shares following the consummation of such
Organic Change, the holder of such Preferred Shares shall have the
right to acquire and receive (in lieu of or in addition to, the
Common Shares acquirable and receivable prior to the Organic
Change) such shares of stock, securities or assets as such holder
would have received if such holder had converted its Preferred
Shares into Common Shares immediately prior to such Organic
Change, in each case giving effect to any adjustment of the
Conversion Price made after the date of consummation of the
Organic Change. All other terms of the Preferred Shares shall
remain in full force and effect following such an Organic Change.
The provisions of this Section 3.5(a) shall similarly apply to
successive Organic Changes.
(b) Corporation Does Not Survive. The Corporation
----------------------------
shall not enter into an Organic Change that is a transaction in
which the Corporation is not the surviving entity unless the
surviving entity issues new securities, without payment of any
additional consideration therefor, with terms that provide that
upon the conversion of such securities following the consummation
of such Organic Change, the holder of such securities shall have
the right to acquire and receive (in lieu of or in addition to the
Common Shares acquirable and receivable prior to the Organic
Change) such shares of stock, securities or assets as such holder
would have received if such holder had converted its Preferred
Shares into Common Shares immediately prior to such Organic
Change, in each case giving effect to any adjustment of the
Conversion Price of such new securities made after the date of
consummation of the Organic Change on an equivalent basis to the
adjustments provided for the Preferred Shares Conversion Price
herein. All other terms of the new securities shall be equivalent
to the terms of the Preferred Shares provided for herein. The
provisions of this Section 3.5(b) shall similarly apply to
successive Organic Changes.
3.6 NOTICES.
-------
(a) Immediately upon any adjustment of the
Conversion Price, the Corporation shall give written notice
thereof to all holders of Preferred Shares specifying the
Conversion Price in effect thereafter with respect to the
particular holder.
(b) The Corporation shall give written notice to all
holders of Preferred Shares at least five days prior to the date
on which the Corporation closes its books or takes a record for
determining rights to vote with respect to any Organic Change,
dissolution or liquidation. The Corporation shall also give
written notice to the
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holders of Preferred Shares at least 20 days prior to the date on
which any Organic Change shall occur.
3.7 CERTAIN EVENTS. If any event similar to or of the
--------------
type contemplated by the provisions of this Section 3, but not expressly
provided for by such provisions, occurs, then the Board will make an
appropriate and equitable adjustment in the Conversion Price so as to
protect the rights of the holders of Preferred Shares; provided that no
such adjustment will increase the Conversion Price as otherwise
determined pursuant to this Section 3 or decrease the number of Common
Shares issuable upon conversion of each Preferred Share.
SECTION 4. PURCHASE RIGHTS.
--------- ---------------
If at any time the Corporation grants, issues or sells any
Options, Convertible Securities or rights to purchase stock, warrants,
securities or other property pro rata to the record holders of Common
Shares ("Purchase Rights"), then each holder of Preferred Shares shall
be entitled to such Purchase Rights, ratably in proportion to the number
of Common Shares each such holder would have held if each had converted
all Preferred Shares held by it into Common Shares on the date on which
a record is taken for the grant, issuance or sale of such Purchase
Rights, or, if no such record is taken, the date as of which the record
holders of Common Shares are to be determined for the grant, issuance or
sale of such Purchase Rights.
SECTION 5. PRE-EMPTIVE RIGHTS.
--------- ------------------
If the Corporation authorizes the issuance and sale of any
Additional Securities, the Corporation will offer to sell to the holders
of Preferred Shares, and each holder of Preferred Shares may elect to
purchase, up to that number of Additional Securities such that following
such purchase, the holder is able to maintain the same percentage
ownership (on a fully-diluted basis) of the outstanding Common Shares of
the Corporation which such holder possessed by virtue of its ownership
of Preferred Shares (or Common Shares resulting from the conversion
thereof) immediately prior to the issuance and sale of the Additional
Securities. Holders of Preferred Shares will be entitled to purchase
the Additional Securities at the same price and upon the same terms as
such securities are being offered to any other Persons; provided that,
if such Persons are to pay for such Additional Securities in whole or in
part with consideration other than cash, then the Board shall make a
good faith determination of the fair market value of such non-cash
consideration and the holders of the Preferred Shares will be entitled
to pay cash equal to the fair market value of the non-cash consideration
such holders would otherwise pay hereunder in the purchase of such
Additional Securities. Notwithstanding the foregoing, a holder of
Preferred Shares will not be permitted to exercise its rights under this
Section 5 unless such holder agrees to purchase all securities offered
as a package or unit in the issuance of the Additional Securities. The
Corporation must give written notice of the issuance of Additional
Securities, which notice shall set forth the price and other terms of
such issuance, to the holders of Preferred Shares no later than 30 days
prior to the issuance date of the Additional Securities (the "Issuance
Date"). Upon receipt of such notice, the holders may exercise the right
granted by this Section 5 by giving written notice to the Corporation
within 30 days following receipt of the aforesaid notice, which written
notice from a holder shall specify the number of Additional Securities
being purchased by such holder and be accompanied by a cashier's or
certified check
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in the full amount of the price for the Additional Securities being
purchased. The Corporation shall promptly make delivery to such holders
of certificates for the Additional Securities or other securities upon
execution of such documents and instruments as shall govern the issuance
of such Additional Securities or other securities. Notwithstanding the
foregoing, if a holder of Preferred Shares exercises its rights under
this Section 5, such holder shall not be required to purchase the
Additional Securities unless and until all other parties have purchased
their Additional Securities. If a holder of Preferred Shares who is not
required to purchase Additional Securities pursuant to the immediately
preceding sentence exercises such holder's rights under this Section 5
following the Issuance Date, then such holder shall be deemed to have
owned the Additional Securities purchased by it as of the Issuance Date
for the purpose of any benefits of ownership relating to such Additional
Securities, including the right to receive cash or stock dividends
declared or other distributions, to participate in a merger or
reorganization or to reflect any reclassification of Additional
Securities between the Issuance Date and the date upon which such holder
purchases the Additional Securities.
SECTION 6. TAG-ALONG RIGHTS.
--------- -----------------
6.1 NOTICE OF PURCHASE OFFERS. In the event any person holding
-------------------------
Common Shares constituting "restricted securities" under the Securities
Act of 1933, as amended (the "Securities Act"), and also being more than
20% of the Common Shares of the Corporation ("Central Shareholder"),
decides to sell any of his, her or its Common Shares pursuant to a bona
fide written offer received or sent by such person (collectively a
"Purchase Offer"), then such Central Shareholder shall promptly notify
each holder of Preferred Shares of the terms and conditions of such
Purchase Offer.
6.2 Right to Participate. Each holder of Preferred Shares
--------------------
shall have the right, exercisable upon written notice to the Central
Shareholder within 30 business days after receipt of the notice of the
Purchase Offer, to participate in such Central Shareholder's sale of
Common Shares on the same terms and conditions. To the extent the
holder of Preferred Shares exercises such right to participation, the
number of Common Shares which such Central Shareholder may sell pursuant
to such Purchase Offer shall be correspondingly reduced. The right of
participation of the holder of Preferred Shares shall be subject to the
following terms and conditions:
(a) The holder of Preferred Shares may sell all or any
part of that number of Common Shares of the Company equal to the
product obtained by multiplying (i) the aggregate number of Common
Shares covered by the Purchase Offer by (ii) a fraction, the
numerator of which is the number of Common Shares of the Company
at the time owned by such holder and the denominator of which is
the combined number of Common Shares of the Company at the time
owned by the Central Shareholder and all holders of Preferred
Shares electing to participate in the Central Shareholder's sale
of Common Shares. For purposes of making such computation, a
holder of Preferred Shares shall be deemed to own the number of
Common Shares into which all its Preferred Shares is at the time
convertible.
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(b) The holder of Preferred Shares may participate in the
sale by delivering to the selling Central Shareholder for transfer
pursuant to the Purchase Offer one or more certificates, properly
endorsed for transfer, which represent:
(i) the number of Common Shares which the holder of
Preferred Shares elects to sell pursuant to this Section
6.2; or
(ii) that number of Preferred Shares which is at such
time convertible into the number of Common Shares which the
holder of Preferred Shares elects to sell pursuant to this
Section 6.2; provided, however, that if the purchase offeror
objects to the delivery of Preferred Shares in lieu of
Common Shares, the holder of Preferred Shares may convert
and deliver Common Shares as provided in subparagraph (b)(i)
above.
SECTION 7. MISCELLANEOUS.
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7.1 REGISTRATION OF TRANSFER. The Corporation shall keep
------------------------
at its principal office a register for the registration of Preferred
Shares. Upon the surrender of any certificate representing Preferred
Shares at such place, the Corporation shall, at the request of the
record holder of such certificate, execute and deliver (at the
Corporation's expense) a new certificate or certificates in exchange
therefor representing in the aggregate the number of Preferred Shares
represented by the surrendered certificate. Each such new certificate
will be registered in such name and will represent such number of
Preferred Shares as is requested by the holder of the surrendered
certificate and will be substantially identical in form to the
surrendered certificate, and dividends will accrue on the Preferred
Shares represented by such new certificate from the date to which
dividends have been fully paid on such Preferred Shares represented by
the surrendered certificate.
7.2 REPLACEMENT. Upon receipt of evidence reasonably
-----------
satisfactory to the Corporation of the ownership and the loss, theft,
destruction or mutilation of any certificate evidencing Preferred
Shares, and in the case of any such loss, theft or destruction, upon
receipt of indemnity reasonably satisfactory to the Corporation
(provided that if the holder is an institutional investor its own
agreement will be satisfactory), or, in the case of any such mutilation
upon surrender of such certificate, the Corporation will (at its
expense) execute and deliver in lieu of such certificate a new
certificate of like kind representing the number of Preferred Shares
represented by such lost, stolen, destroyed or mutilated certificate and
dated the date of such lost, stolen, destroyed or mutilated certificate,
and dividends will accrue on the Preferred Shares represented by such
new certificate from the date to which dividends have been fully paid on
such lost, stolen, destroyed or mutilated certificate.
7.3 NOTICES. Except as otherwise expressly provided, all
-------
notices referred to herein will be in writing and will be delivered
by registered or certified mail, return receipt requested, postage
prepaid and will be deemed to have been given when so mailed (a) to the
Corporation, at its principal executive offices and (b) to any
shareholder, at such holder's address as it appears in the stock records
of the Corporation (unless otherwise indicated in writing by such
holder).
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SECTION 8. VOTING RIGHTS.
--------- -------------
8.1 BOARD REPRESENTATION. The holders of more than 50%
--------------------
of the Preferred Shares shall be entitled to select a person to observe
all meetings of the Board.
8.2 OTHER VOTING MATTERS. The Corporation may take the
--------------------
various actions listed below only upon satisfying the one or more voting
requirements, set forth below, applicable to such action.
(a) Whenever the Indiana Business Corporation Law
provides for a vote of a class of shareholders, the holders of the
outstanding shares of any class shall be entitled to vote as a
class in respect of any such amendment or transaction and the
proposed amendment or transaction shall be approved upon receiving
the affirmative vote of the holders of a majority of the
outstanding shares of each class of shares entitled to vote as a
class in respect thereof and of the total outstanding shares
entitled to vote.
(b) So long as any Preferred Shares remain
outstanding, the Corporation shall not, without the affirmative
vote or written consent by the holders of more than two-thirds of
the Preferred Shares then outstanding:
(i) directly or indirectly declare or pay
any dividends or make any distributions upon any of its
equity securities;
(ii) except for the Investor Securities,
authorize, issue, or enter into any agreement providing for
the issuance (contingent or otherwise) of (A) any notes or
debt securities containing equity features with rights
superior to those of the Preferred Shares (including,
without limitation, any notes or debt securities convertible
into or exchangeable for equity securities, issued in
connection with the issuance of equity securities or
containing profit participation features) or (B) any
additional series of preferred shares of the Corporation or
any equity securities with rights superior to those of the
Preferred Shares (or any securities convertible into or
exchangeable for any equity securities); or
(iii) make any amendment to the Corporation's
articles of incorporation or by-laws or enter into any
agreements which alter, change or otherwise amend or
adversely effect the rights, preferences or privileges of
the Preferred Shares.
(c) In all other events, except as required by the
Indiana Business Corporation Law all holders of shares of the
Corporation will vote as a single class, with each holder of
Preferred Shares being entitled to cast such number of votes as is
equal to the number of Common Shares into which the Preferred
Shares of such holder would be converted on the date of such vote.
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SECTION 9. DEFINITIONS.
-----------
"Additional Securities" means (i) any capital stock of the
Corporation, whether now authorized or not, (ii) any rights, options or
warrants to purchase any such capital stock, or to purchase any
securities that are or may become convertible into any such capital
stock, and (iii) any securities convertible into any such capital stock;
provided, however, that Additional Securities shall not include (a) any
Preferred Shares; (b) Common Shares issued upon the conversion of the
Preferred Shares; (c) securities issued as a dividend on, subdivision of
or other distribution in respect of all outstanding Common Shares, (d)
securities issued upon the conversion, exercise or exchange of any
option, warrant or convertible security issued as or in connection with
a previous issuance of Additional Securities, (e) securities issued
pursuant to the acquisition of another corporation by the Corporation by
merger, purchase of substantially all of the assets of such other
corporation, or by other reorganization whereby the Corporation ends up
owning, directly or indirectly, greater than 50% of the voting power of
the outstanding stock of such other corporation, or (f) any Common
Shares described in Section 3.3(h).
"Board" means the Corporation's Board of Directors.
"Common Share" means a share of the Corporation's common stock.
"Common Share Equivalent" means, collectively, any capital stock
of any class of the Corporation hereafter authorized which is not
limited to a fixed sum or percentage of par or stated value in respect
to the rights of the holders thereof to participate in dividends or in
the distribution of assets upon any liquidation, dissolution or winding
up of the Corporation.
"Insolvency Event" means (i) the Corporation commencing any case,
proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-
up, liquidation, dissolution, composition or other relief with respect
to it or its debts, (B) seeking appointment of a receiver, trustee,
custodian or other similar official for it or for all or any substantial
part of its assets, or (C) making a general assignment for the benefit
of its creditors; or (ii) there is commenced against the Corporation any
case, proceeding or other action of a nature referred to in clause (i)
above; or (iii) there is commenced against the Corporation any case,
proceeding or other action seeking issuance of a warrant of attachment,
execution, distraint or similar process against all or any substantial
part of its assets; or (iv) the Corporation takes any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii) or (iii)
above; or (v) the Corporation generally does not pay its debts as they
become due.
"Liquidation Value" of any Preferred Share as of any particular
date will be equal to $1.00 (as adjusted for any divisions, whether by
stock split, stock dividend or otherwise, or combinations, whether by
reverse stock split or otherwise, of the Preferred Shares).
"Market Price" of any security means the average of the closing
prices of such security's sales on all securities exchanges on which
such security may at the time be listed, or, if there has
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<PAGE>
been no sales on any such exchange on any day, the average of the
highest bid and lowest asked prices on the primary exchange on which
such security is listed at the end of such day, or, if on any day such
security is not so listed, the average of the representative bid and
asked prices quoted in the NASDAQ System as of 4:00 P.M., New York time,
or, if on any day such security is not quoted in the NASDAQ System, the
average of the highest bid and lowest asked prices on such day in the
domestic over-the-counter market as reported by the National Quotation
Bureau, Incorporated, or any similar successor organization, in each
such case averaged over a period of 21 days consisting of the day as of
which "Market Price" is being determined and the 20 consecutive business
days prior to such day. The "Market Price" of a note or other
obligation which is not listed on a securities exchange or quoted in the
NASDAQ System or reported by the National Quotation Bureau,
Incorporated, the total consideration received by the Corporation
(including interest) will be discounted at the prime rate of interest at
the First National Bank of Chicago in effect at the time the note or
obligation is deemed to have been issued. If at any other time such
security is not listed on any securities exchange or quoted in the
NASDAQ System or the over-the-counter market, the "Market Price" thereof
determined jointly by the Corporation and the holders of a majority of
the Preferred Shares. If such parties are unable to reach agreement
within a reasonable period of time, such fair value will be determined
by an independent appraiser jointly selected by the Corporation and the
holders of a majority of the Preferred Shares; the cost of such
appraiser shall be shared equally by the Corporation and the holders of
the Preferred Shares.
"Organic Change" means any capital reorganization,
reclassification, consolidation, merger, lease, or sale of all or
substantially all of the Corporation's assets to another Person which is
effected in such a way that holders of Common Shares are entitled to
receive (either directly or upon subsequent liquidation) shares,
securities or assets with respect to or in exchange for Common Shares.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department,
agency or political subdivision thereof.
"Securities Purchase Agreement" means the Securities Purchase
Agreement, entered into as of the 8th day of February, 2000, by and
between the Corporation and the investors identified therein.
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<PAGE>
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned hereby nominates, constitutes and appoints Paul W.
Mobley and A. Scott Mobley (or such other person as is designated by the
Board of Directors of Noble Roman's, Inc. (the "Company")) (the "Proxies"),
or either of them (with full power to act alone), true and lawful
attorney(s), with full power of substitution, for the undersigned and in
the name, place and stead of the undersigned to vote as designated below
all of the shares of Common Stock, no par value, of the Company entitled
to be voted by the undersigned at the Special Meeting of Shareholders to
be held at the Indianapolis Athletic Club, 350 North Meridian Street,
Indianapolis, Indiana 46204, at 10:00 a.m., local time, April 25, 2000,
and at any adjournments or postponements thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING:
1. A proposal to approve an amendment to the Articles of Incorporation
of the Company to (i) increase the number of authorized shares of
capital stock of the Company to 30,000,000, (ii) to increase the
number of authorized shares of Common Stock of the Company to
25,000,000, and (iii) to create 5,000,000 shares of "Blank Check"
Preferred Stock.
/ / FOR / / AGAINST / / ABSTAIN
2. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting and any
adjournment or postponement thereof.
This proxy, when properly executed will be voted in the manner
directed herein by the undersigned shareholder(s). If no direction is
made, this proxy will be voted "FOR" the matters listed in Proposal 1.
The undersigned acknowledges receipt of the Company's Annual Report
on Form 10-K for the year ended December 31, 1998 and the Notice of the
Special Meeting and the Proxy Statement. Please mark, sign, date and
return the proxy card promptly using the enclosed envelope.
/ / PLEASE CHECK THIS BOX IF YOU PLAN TO
ATTEND THE MEETING IN PERSON.
SIGN HERE _________________________________
(Please sign exactly as name
appears at left)
SIGN HERE _________________________________
Executors, administrators,
trustees, etc. should so
indicate when signing
DATED _____________________________________
