SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________________________________
FORM 8-A
__________________________________________
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
______________________PANCHO'S MEXICAN BUFFET,
INC.____________________
(Exact name of Registrant as specified in its charter)
___________Delaware____________ _______75-1292166___________
(State of incorporation or organization) (IRS Employer
Identification No.)
3500 Noble Avenue, Fort Worth, Texas 76111
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (817) 831-0081
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
None None
Securities to be registered pursuant to Section 12(g) of the Act:
Rights to Purchase Series A Junior Participating Preferred Stock,
Par Value $10 per share
(Title of Class)
Page 1 of 6 Pages
<PAGE>
Item 1. Description of Securities to be Registered.
On January 24, 1996, the Board of Directors of Pancho's
Mexican Buffet, Inc. (the "Company") declared a dividend of one
preferred share purchase right (a "Right") for each outstanding
share of common stock, par value $0.10 per share (the "Common
Shares") payable at the close of business on March 29, 1996 (the
"Record Date") to the stockholders of record on that date. Each
Right entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series A Junior
Participating Preferred Stock, par value $10.00 per share (the
"Preferred Shares"), of the Company, at a price of $10 per one
one-thousandth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights
are set forth in a Rights Agreement (the "Rights Agreement")
between the Company and KeyCorp Shareholder Services, Inc., as
Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired beneficial
ownership of 15% (or, in the case of certain Grandfathered
Stockholders, as that term is defined in the Agreement, 28%) or
more of the outstanding Common Shares, or (ii) 10 business days
(or such later date as may be determined by action of the Board
of Directors prior to such time as any Person becomes an
Acquiring Person) following the commencement of, or announcement
of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership
by a person or group of 15% or more of such outstanding Common
Shares (the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of the
Common Share certificates outstanding as of the Record Date, by
such Common Share certificate with a copy of the Summary of
Rights attached thereto.
The Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration
of the Rights), new Common Share certificates issued after the
Record Date or upon transfer or new issuance of Common Shares
will contain a notation incorporating the Agreement by
reference. Until the Distribution Date (or earlier redemption
or expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the Record
Date, even without such notation or a copy of this Summary of
Rights being attached thereto, will also constitute the transfer
of the Rights associated with the Common Shares represented by
such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of
the Common Shares as of the Close of Business on the
Distribution Date and such separate Right Certificates alone
will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on March 27, 2006 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless
the Rights are earlier redeemed by the Company, in each case, as
described below.
Page 2 of 6 Pages
<PAGE>
The Purchase Price payable, the number of
Preferred Shares or other securities or property issuable upon
exercise of the Rights and the number of outstanding Rights are
subject to adjustment from time to time to prevent dilution and
the number of outstanding Rights.
Preferred Shares purchasable upon exercise of the Rights will
not be redeemable. Each Preferred Share will be entitled to a
quarterly dividend payment of 1000 times the dividend declared
per Common Share. In the event of liquidation, the holders of
the Preferred Shares will be entitled to an aggregate payment of
1000 times the aggregate payment made per Common Share. Each
Preferred Share will have 1000 votes, voting together with the
Common Shares. In the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 1000 times the
amount received per Common Share. These rights are protected by
customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend,
liquidation and voting rights, the value of the one
one-thousandth interest in a Preferred Share purchasable upon
exercise of each Right should approximate the value of one
Common Share.
In the event that, at any time after a Person becomes an
Acquiring Person, the Company is acquired in a merger or other
business combination transaction or 50% or more of its
consolidated assets or earning power are sold, proper provision
will be made so that each holder of a Right will thereafter have
the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of
common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise
price of the Right. In the event that any person becomes an
Acquiring Person, proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the
Acquiring Person and its Affiliates and Associates (which will
thereafter be void), will thereafter have the right to receive
upon exercise that number of Common Shares having a market value
of two times the exercise price of the Right. If the Company
does not have sufficient Common Shares to satisfy such
obligation to issue Common Shares, or if the Board of Directors
so elects, the Company shall deliver upon payment of the
exercise price of a Right an amount of cash or securities
equivalent in value to the Common Shares issuable upon exercise
of a Right; provided that, if the Company fails to meet such
obligation within 30 days following the later of (x) the first
occurrence of an event triggering the right to purchase Common
Shares and (y) the date on which the Company's right to redeem
the Rights expires, the Company must deliver, upon exercise of a
Right but without requiring payment of the exercise price then
in effect, Common Shares (to the extent available) and cash
equal in value to the difference between the value of the Common
Shares otherwise issuable upon the exercise of a Right and the
exercise price then in effect. The Board of Directors may
extend the 30-day period described above for up to an additional
60 days to permit the taking of action that may be necessary to
authorize sufficient additional Common Shares to permit the
issuance of Common Shares upon the exercise in full of the
Rights.
Page 3 of 6 Pages
<PAGE>
At any time after any Person becomes an
Acquiring Person and prior to the acquisition by any person or
group of a majority of the outstanding Common Shares, the Board
of Directors of the Company may exchange the Rights (other than
Rights owned by such person or group which have become void), in
whole or in part, at an exchange ratio of one Common Share per
Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional
Preferred Shares will be issued (other than fractions which are
integral multiples of one one-thousandth of a Preferred Share,
which may, at the election of the Company, be evidenced by
depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Shares
on the last trading day prior to the date of exercise.
At any time prior to the time any Person becomes an Acquiring
Person, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $0.01 per Right
(the "Redemption Price"). The redemption of the Rights may be
made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of
the Rights, except that from and after such time as any person
becomes an Acquiring Person no such amendment may adversely
affect the interests of the holders of the Rights (other than
the Acquiring Person and its Affiliates and Associates).
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by
reference.
As of January 24, 1996, there were 4,397,559 Common Shares
outstanding (as well as a further 583,150 shares reserved for
issuance upon exercise of stock options, of which 536,150 were
reserved with respect to options outstanding on that date).
Each outstanding Common Share on the Record Date will receive
one Right. As long as the Rights re attached to the Common
Shares, the Corporation will issue one Right with each new
Common Share so that all such shares will have attached rights.
Page 4 of 6 Pages
<PAGE>
The Rights have certain anti-takeover effects. The Rights
will cause substantial dilution to a person or group that
attempts to acquire the Corporation without conditioning the
offer on the Rights being redeemed. However, the Rights should
not interfere with any tender offer or merger approved by the
Board of Directors since the Rights may be redeemed by the
Company at a price of $.01 per Right prior to such time as any
person has become an Acquiring Person.
Item 2. Exhibits.
Attached hereto as Exhibit 1 and incorporated herein by
reference are copies of the Rights Agreement and the exhibits
thereto, as follows: Exhibit A -- Form of Certificate of
Designation, Preferences and Rights of Series A Preferred Stock;
Exhibit B -- Form of Right Certificate; and Exhibit C -- Summary
of rights to Purchase Series A Preferred Stock. The foregoing
description of the rights is qualified in its entirety by
reference to the Rights Agreement and such exhibits thereto.
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
PANCHO'S MEXICAN BUFFET, INC.
By_/s/ Hollis Taylor_________
Hollis Taylor, President and
Chief Executive Officer
Dated: February 22, 1996
3352-09000\90571-1
Page 5 of 6 Pages
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT DESCRIPTION
1 Rights Agreement dated as of January 30, 1996, between
Pancho's Mexican Buffet, Inc. and KeyCorp Shareholder Services,
Inc. which includes the form of Certificate of Designation,
Preferences and Rights of Series A Preferred Stock, as Exhibit
A, form of Right Certificate, as Exhibit B, Summary of Rights to
Purchase Series A Preferred Stock, as Exhibit C.
Page 6 of 6 Pages
<PAGE>
PANCHO'S MEXICAN BUFFET, INC.
and
KeyCorp Shareholder Services, Inc.
Rights Agent
Rights Agreement
Dates as of January 30, 1996
<PAGE>
TABLE OF CONTENTS
Page
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 8
Section 3. Issue of Right Certificates 8
Section 4. Form of Right Certificates 11
Section 5. Countersignature and Registration 12
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates 13
Section 7. Exercise of Rights; Purchase Price;
Expiration Date of Rights 15
Section 8. Cancellation and Destruction of
Right Certificates 17
Section 9. Status and Availability of Preferred
Shares 18
Section 10. Preferred Shares Record Date 19
Section 11. Adjustment of Purchase Price, Number
of Shares of Number of Rights 19
Section 12. Certificate of Adjustment 34
Section 13. Consolidation, Merger or Sale or
Transfer of Assets or Earning
Power 34
Section 14. Fractional Rights and Fractions Shares 37
Section 15. Rights of Action 40
Section 16. Agreement of Right Holders 40
Section 17. Right Certificate Holder Not Deemed
a Stockholder 41
- - 1-
<PAGE>
Section 18. Concerning the Rights Agent 42
Section 19. Merger or Consolidation or Change of
Name of Rights Agent 43
Section 20. Duties of Rights Agent 44
Section 21. Change of Rights Agent 47
Section 22. Issuance of New Right Certificates 49
Section 23. Redemption 49
Section 24. Exchange 50
Section 25. Notice of Certain Events 53
Section 26. Notices 55
Section 27. Supplements and Amendments 56
Section 28. Successors 57
Section 29. Benefits of this Agreement 57
Section 30. Severability 57
Section 31. Governing Law 58
Section 32. Counterparts 58
Section 33. Descriptive Headings 58
Section 34. Administration 58
Exhibit A Certificate of Designations of
Series A Junior Participating
Preferred Stock A-1
Exhibit B Form of Right Certificate B-1
Exhibit C Summary of Rights to Purchase
Preferred Shares C-1
- - 2 -
<PAGE>
RIGHTS AGREEMENT
Agreement, dated as of January 30, 1996, between Pancho's
Mexican Buffet, Inc., a Delaware corporation (the "Company"),
and KeyCorp Shareholder Services, Inc. (the "Rights Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a
"Right") for each share of Common Stock, par value $0.10 per
share, of the Company (a "Common Share") outstanding on the
close of business March 29, 1996 (the "Record Date") and has
authorized the issuance of one Right with respect to each
additional Common Share that shall become outstanding between
the Record Date and the earlier of the Distribution Date, the
Expiration Date or the Final Expiration Date (as such terms are
defined in Sections 3 and 7 hereof), each Right representing the
right to purchase one one-thousandth of a share (a "Preferred
Share," as hereinafter defined) of Series A Junior Participating
Preferred Stock of the Company having the rights and preferences
set forth in the form of Certificate of Designations attached
hereto as Exhibit A, or such different amount and/or kind of
securities as shall be hereinafter provided.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
<PAGE>
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person,
shall be the Beneficial Owner of 15%, or, in the case of
Carolina S. Arrambide, the Estate of Jesse Arrambide and their
Affiliates, Associates and Successors and the Affiliates and
Associates of such Successors (any such person, a "Grandfathered
Stockholder") 28%, or more of the Common Shares of the Company
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 Subsidiary of the Company, or (iv) any
entity holding Common Shares for or pursuant to the terms of any
such employee benefit plan. Notwithstanding the foregoing, (1)
no Person shall become an "Acquiring Person" as the result of an
acquisition of Common Shares by the Company which, by reducing
the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to 15%, or,
in the case of any Grandfathered Stockholder, 28%, or more of
the Common Shares of the Company then outstanding; provided,
however, that if a Person shall so become the Beneficial Owner
of 15%, or 28%, or more of the Common Shares of the Company then
outstanding by reason of an acquisition of Common Shares by the
Company and shall, after such share purchases by the Company,
become the Beneficial Owner of an additional 1% of the
outstanding Common Shares of the Company, then such Person shall
be deemed to be an "Acquiring Person"; and (2) if the Board of
Directors of the Company determines in good faith that a Person
<PAGE>
who would otherwise be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this paragraph, has
become such inadvertently, and such Person divests as promptly
as practicable a sufficient number of Common Shares so that such
Person would no longer be an "Acquiring Person," as defined
pursuant to the foregoing provisions of this paragraph, then
such Person shall not be deemed to have become an "Acquiring
Person" for any purposes of this Agreement.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as in effect on the date of this
Agreement.
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 owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (other
than customary agreements with and between underwriters and
selling group members with respect to a bona fide public
offering of securities), written or otherwise, or upon the
exercise of conversion rights, exchange rights, rights (other
than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed to be the Beneficial
Owner of, or to beneficially own, securities tendered pursuant
to a tender or exchange offer made pursuant to, and in
accordance with, the applicable rules and regulations
promulgated under the Exchange Act by or on behalf of such
Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange;
or (B) the right to vote pursuant to any agreement, arrangement
or understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding to vote
such security (1) arises solely from a revocable proxy or
consent given to such Person 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 and (2) is not also then reportable 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 with which such Person or any of such
Person's Affiliates or Associates has any agreement, arrangement
or understanding (other than customary agreements with and
between underwriters and selling group members with respect to a
bona fide public offering of securities), written or otherwise,
for the purpose of acquiring, holding, voting (except to the
extent contemplated by the proviso to section (B) of the
immediately preceding paragraph (ii)) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding," when
used with reference to a Person's Beneficial Ownership of
securities of the Company, shall mean the number of such
securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding
which such Person would be deemed to own beneficially hereunder.
"Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking institutions in the State of
New York are authorized or obligated by law or executive order
to close.
"Close of Business" on any given date shall mean 5:00 P.M.,
Fort Worth, Texas time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., Fort
Worth, Texas time, on the next succeeding Business Day.
"Common Shares" when used with reference to the Company shall
mean the shares of common stock, par value $0.10 per share, of
the Company. "Common Shares" 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 other
Person or, if such other Person is a Subsidiary of another
Person, the Person or Persons which ultimately control such
first-mentioned Person.
"common stock equivalents" shall have the meaning set forth in
section 11(a)(iii)(B)(3).
"Current Value" shall have the meaning set forth in Section
11(a)(iii)(A)(1) hereof.
"Distribution Date" shall have the meaning set forth in
Section 3 hereof.
"Equivalent preferred shares" shall have the meaning set forth
in Section 11(b).
"Exchange Ratio" shall have the meaning set forth in Section
24(a).
"Final Expiration Date" shall mean March 29, 2006.
"Person" shall mean any individual, firm, corporation,
partnership, limited partnership, limited liability partnership,
business trust, limited liability company, unincorporated
association or other entity, and shall include any successor (by
merger or otherwise) of such entity.
"Purchase Price" shall have the meaning set forth in Section
7(b).
"Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $10.00 per share, of
the Company.
"Redemption Date" shall mean the date on which the Rights are
redeemed as provided in Section 23 hereof.
"Right Certificate" shall mean a certificate evidencing a
Right in substantially the form of Exhibit B hereto.
"Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
"Shares Acquisition Date" shall mean the earlier of the date
of (i) the public announcement by the Company or an Acquiring
Person that an Acquiring Person has become such or (ii) the
public disclosure of facts by the Company or an Acquiring Person
indicating that an Acquiring Person has become such.
"Spread" shall have the meaning set forth in Section
11(a)(iii)(A)(2) hereof.
"Subsidiary" of any Person shall mean any Person of which a
majority of the voting power of the voting equity securities or
equity interest is owned, directly or indirectly, by such Person.
"Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
"Successor" shall mean, with respect to a deceased individual,
the estate or legal representative of such individual, the
beneficiaries of such individual's estate, a trust created by
such individual as grantor, or the beneficiary of a trust
created by such individual as grantor and, with respect to an
estate, the beneficiaries of such estate.
"Summary of Rights" shall mean the Summary of Rights to
Purchase Preferred Shares in substantially the form of Exhibit C
hereto.
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 Shares) 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.
Section 3. Issue of Right Certificates.
Until the earlier of (i) the tenth day after the Shares
Acquisition Date or (ii) the tenth Business Day (or such
later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement by any Person (other
than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company
or any entity holding Common Shares for or pursuant to the terms
of any such plan) of, or of the first public announcement of the
intention of any Person (other than any of the Persons referred
to in the preceding parenthetical) to commence, a tender or
exchange offer the consummation of which would result in any
Person becoming the Beneficial Owner of Common Shares
aggregating 15% or more of the then outstanding Common Shares
(such date being herein referred to as the "Distribution Date"),
(x) the Rights will be evidenced (subject to the provisions of
Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which
certificates shall also be deemed to be Right Certificates) and
not by separate Right Certificates, and (y) the right to receive
Right Certificates will be transferable only in connection with
the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the
Rights Agent will countersign, and the Company will send or
cause to be sent (and the Rights Agent will, if requested, send)
by first-class, insured, postage-prepaid mail, to each record
holder of Common Shares as of the Close of Business on the
Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate evidencing one Right
for each Common Share so held. As of the Distribution Date, the
Rights will be evidenced solely by such Right Certificates. For
purposes hereof, a tender or exchange offer shall not be deemed
to have commenced, nor shall any Person be deemed to have
publicly announced an intent to commence a tender or exchange
offer,until such time as (i) one or more of the events specified
by Rule 14d-2(a)(1), (2), (3) or (4) under the Exchange Act
shall have occurred or any Person shall have filed a Schedule
14D-1 with the Securities and Exchange Commission under the
Exchange Act with respect to the commencement of a tender or
exchange offer (the first to occur of any such events or filing
being deemed an "Event") or (ii) an Event shall have occurred
following a public announcement by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or any
entity holding Common Shares for or pursuant to the terms of any
such plan) of the intention to commence a tender or exchange
offer.
On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of the Summary of Rights by
first-class, postage-prepaid mail, to each record holder of
Common Shares 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 Common Shares outstanding as of
the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates registered in the names of the
holders thereof together with a copy of the Summary of Rights
attached thereto. Until the Distribution Date (or the earlier
of the Redemption Date or the Final Expiration Date), the
surrender
for transfer of any certificate for Common Shares outstanding on
the Record Date, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the
Rights associated with the Common Shares evidenced thereby.
(a) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares
referred to in the last sentence of this paragraph (c)) after
the Record Date but prior to the earliest of the Distribution
Date, the Redemption Date or the Final Expiration Date shall
have impressed on, printed on, written on or otherwise affixed
to them the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
between Pancho's Mexican Buffet, Inc. and KeyCorp Shareholder
Services, Inc., as Rights Agent, dated as of January 30,
1996, 1996 (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is
on file at the principal executive offices of Pancho's Mexican
Buffet, 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. Pancho's Mexican Buffet, Inc. will mail to the
holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor.
Under certain circumstances, Rights that are or were acquired or
beneficially owned by Acquiring Persons (as defined in the
Rights Agreement) may become null and void.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with
the Common Shares represented by certificates shall be evidenced
by such certificates alone, and the surrender for transfer of
any such certificate shall also constitute the transfer of the
Rights
associated with the Common Shares represented thereby. In the
event that the Company purchases or acquires any Common Shares
after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed
canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Shares which
are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates
(and the forms of election to purchase Preferred Shares and of
assignment to be printed on the reverse thereof) shall be
substantially the same as Exhibit B 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 or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform
to usage. Subject to the other provisions of this Agreement,
the Right Certificates shall entitle the holders thereof to
purchase such number of one one-thousandths of a Preferred Share
as shall be set forth therein at the Purchase Price, but the
number of one one-thousandths of a Preferred Share and the
Purchase Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its
President, any of its Vice Presidents, or its Treasurer, either
manually or by facsimile signature, shall have affixed thereto
the Company's seal or a facsimile thereof, and shall be attested
by the Secretary or any Assistant Secretary of the Company,
either manually or by facsimile signature. The Right
Certificates shall be countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned,
either manually or by facsimile. 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 Certificate 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.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for
registration of the 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. Subject to the provisions of Section 14 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 Right Certificates (other than Right Certificates
representing Rights that have become void pursuant to Section
11(a)(ii) hereof or that have been exchanged pursuant to Section
24 hereof) may be transferred, split up, combined or exchanged
for another Right Certificate or Right Certificates, entitling
the registered holder to purchase a like number of one
one-thousandths of a Preferred Share as the Right Certificate or
Right Certificates surrendered then entitled such holder to
purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates
shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged
at the principal office of the Rights Agent. Thereupon the
Rights Agent shall countersign and deliver to the person
entitled thereto a Right Certificate or Right Certificates, as
the case may be, as so requested. The Company may require
payment of a sum sufficient for any tax or governmental charge
that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
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
reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to
the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company will make and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to
the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) The registered holder of any Right Certificate (other
than a holder whose Rights have become void pursuant to Section
11(a)(ii) hereof or have been exchanged pursuant to Section 24
hereof) may exercise the Rights evidenced thereby 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 on
the reverse side thereof duly executed, to the Rights Agent at
its principal office, together with payment of the Purchase
Price for each one one-thousandth of a Preferred Share as to
which the Rights are exercised, at or prior to the earliest of
(i) the Close of Business on the Final Expiration Date, (ii) the
Redemption Date, or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
(b) The purchase price for each one one-thousandth of a
Preferred Share to be purchased upon the exercise of a Right
shall initially be Ten Dollars ($10.00) (the "Purchase Price"),
shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be payable in lawful money
of the United States of America in accordance with paragraph (c)
below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and
certificate duly executed, accompanied by payment of the
Purchase Price for the number of one one-thousandths of a
Preferred Share to be purchased and an amount equal to any
applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof by
cash, certified check, cashier's check or money order payable to
the order of the Company, the Rights Agent shall thereupon
promptly (i) (A) requisition from any transfer agent of the
Preferred Shares certificates for the number of one
one-thousandths of a Preferred Share to be purchased and the
Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) requisition from any
depositary agent for the Preferred Shares depositary receipts
representing such number of one one-thousandths of a Preferred
Share as are to be purchased (in which case certificates for the
Preferred Shares represented by such receipts shall be deposited
by the transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with such request,
(ii) when appropriate, requisition from the Company the amount
of cash to be paid in lieu of issuance of fractional Preferred
Shares in accordance with Section 14 hereof, (iii) after receipt
of such certificates or depositary receipts, cause the same
to be delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as may
be designated by such holder and (iv) when appropriate, after
receipt, deliver such cash to or upon the order of the
registered holder of such Right Certificate.
(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 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 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 following 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 to any of its agents, be delivered
to
the Rights Agent for cancellation or in canceled form, or, if
surrendered to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Rights
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of
the Company, destroy such canceled Right Certificates, and in
such case shall deliver a certificate of destruction thereof to
the Company.
Section 9. Status and Availability of Preferred Shares.
(a) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred
Shares delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such Preferred Shares (subject
to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and non-assessable shares.
(b) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the
issuance or delivery of the Right Certificates or of any
Preferred Shares 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 the issuance or delivery of certificates
or depositary receipts for the Preferred Shares in a name other
than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or to issue or to
deliver any certificates or depositary receipts for Preferred
Shares upon the exercise of any Rights until any 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 reasonable satisfaction that no
such tax is due.
(c) The Company covenants and agrees that it will cause to be
reserved and kept available, out of its authorized and unissued
Preferred Shares or any Preferred Shares held in its treasury,
the number of Preferred Shares that will be sufficient to permit
the exercise in full of all outstanding Rights in accordance
with Section 7 hereof.
Section 10. Preferred Shares Record Date. Each person in
whose name any certificate for Preferred Shares is issued upon
the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Shares 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 Purchase Price (and any
applicable transfer taxes) was made. Prior to the exercise of
the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a holder of Preferred
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 Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of Preferred
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 Preferred
Shares payable in Preferred Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification
of the Preferred Shares (including any such reclassification in
connection with a consolidation or merger in which the Company
is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase 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 capital
stock 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 capital stock which, if such Right had been exercised
immediately prior to such date, he 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 capital stock of the
Company issuable upon exercise of one Right.
(ii) Subject to the following paragraph of this subparagraph
(ii) and to Section 24 of this Agreement, in the event any
Person shall become an Acquiring Person, each holder of a Right
shall thereafter have a right to receive, upon exercise thereof
at a price equal to the then current Purchase Price multiplied
by the number of one one-thousandths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms
of this Agreement and in lieu of Preferred Shares, such number
of Common Shares of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by
the number of one one-thousandths of a Preferred Share for which
a Right is then exercisable and dividing that product by (y) 50%
of the then current per share market price of the Company's
Common Shares (determined pursuant to Section 11(d) hereof) on
the date such Person became an Acquiring Person. In the event
that any Person shall become an Acquiring Person and the Rights
shall then be outstanding, the Company shall not take any action
that would eliminate or diminish the benefits intended to be
afforded by the Rights.
From and after the occurrence of such an event, any Rights
that are or were acquired or beneficially owned by such
Acquiring Person (or any Associate or Affiliate of such
Acquiring Person) on or after the earlier of (x) the Shares
Acquisition Date and (y) the Distribution Date shall be void and
any holder of such Rights shall thereafter have no right to
exercise such Rights under any provision of this Agreement. No
Right Certificate shall be issued pursuant to Section 3 that
represents Rights beneficially owned by an Acquiring Person
whose Rights would be void pursuant to the preceding sentence or
any Associate or Affiliate thereof; no Right Certificate shall
be issued at any time upon the transfer of any Rights to an
Acquiring Person whose Rights would be void pursuant to the
preceding sentence or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate;
and any Right Certificate delivered to the Rights Agent for
transfer to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affiliate
thereof shall be canceled.
(iii) In the event that the number of Common Shares which
are authorized by the Company's certificate of incorporation and
not outstanding or subscribed for, or reserved or otherwise
committed for issuance for purposes other than upon exercise of
the Rights, are not sufficient to permit the holder of each
Right to purchase the number of Common Shares to which he would
be entitled upon the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of paragraph (a)
of this Section 11, or should the Board of Directors so elect,
the Company shall: (A) determine the excess of (1) the value of
the Common Shares issuable upon the exercise of a Right
(calculated as provided in the last sentence of this
subparagraph (iii)) pursuant to Section 11(a)(ii) hereof (the
"Current Value") over (2) the Purchase Price (such excess, the
"Spread"), and (B) with respect to each Right, make adequate
provision to substitute for such Common Shares, upon payment of
the applicable Purchase Price, any one or more of the following
having an aggregate value determined by the Board of Directors
to be equal to the Current Value: (1) cash, (2) a reduction in
the Purchase Price, (3) Common Shares or other equity securities
of the Company (including, without limitation, shares, or units
of shares, of preferred stock which the Board of Directors of
the Company has determined to have the same value as shares of
Common Stock (such shares of preferred stock, "common stock
equivalents")), (4) debt securities of the Company, or (5) other
assets; 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 first occurrence of an
event triggering the rights to purchase Common Shares described
in Section 11(a)(ii) the "Section 11(a)(ii) Trigger Date"), then
the Company shall be obligated to deliver, upon the surrender
for exercise of a Right and without requiring payment of the
Purchase Price, shares of Common Stock (to the extent available)
and then, if necessary, cash, which shares and cash have an
aggregate value equal to the Spread. If the Board of Directors
of the Company shall determine in good faith that it is likely
that sufficient additional Common Shares 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) Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional
shares (such period, as it may be extended, the "Substitution
Period"). To the extent that the Company determines that some
action need be taken pursuant to the first and/or second
sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof and the last paragraph
of 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 any 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 make a public announcement, and
shall deliver to the Rights Agent a statement, stating that the
exercisability of the Rights has been temporarily suspended. At
such time as the suspension is no longer in effect, the Company
shall make another public announcement, and deliver to the
Rights Agent a statement, so stating. For purposes of this
Section 11(a)(iii), the value of the Common Shares shall be the
current per share market price (as determined pursuant to
Section 11(d)(i) hereof) of the Common Shares on the Section
11(a)(ii) Trigger Date and the value of any common stock
equivalent shall be deemed to have the same value as the Common
Shares on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or
purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent
preferred shares")) or securities convertible into Preferred
Shares or equivalent preferred shares at a price per Preferred
Share or equivalent preferred share (or having a conversion
price per share, if a security convertible into Preferred Shares
or equivalent preferred shares) less than the then current per
share market price of the Preferred Shares (as defined in
Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be adjusted by multiplying
the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the number
of Preferred Shares outstanding on such record date plus the
number of Preferred Shares which the aggregate offering price of
the total number of Preferred Shares and/or equivalent preferred
shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of
which shall be the number of Preferred Shares outstanding on
such record date plus the number of additional Preferred Shares
and/or equivalent preferred shares 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 capital stock of the
Company issuable upon exercise of one Right. 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 as determined in good faith by the Board
of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent. Preferred
Shares owned by or held for the account of the Company shall not
be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options
or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect
if such record date had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Preferred Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness or assets
(other than a regular quarterly cash dividend or a dividend
payable in Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the then current per share market
price of the Preferred Shares on such record date, less the fair
market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent) of the portion of
the assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to one
Preferred Share and the denominator of which shall be such
current per share market price of the Preferred Shares;
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 capital stock of the
Company to be issued upon exercise of one Right. 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 Purchase Price shall again be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.
(d)(i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security"
for the purpose of this Section 11(d)(i)) on any date shall be
deemed to be the average of the daily closing prices per share
of such Security for the 30 consecutive Trading Days (as such
term is hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current per share
market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A)
a dividend or distribution on such Security payable in shares of
such Security or securities convertible into such shares, or (B)
any subdivision, combination or reclassification of such
Security and prior to the expiration of 30 Trading Days 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 appropriately adjusted to reflect
the current market price per share equivalent of such Security.
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
Security is 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
Security is listed or admitted to trading or, if the Security is
not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or, if on any such
date the Security is not 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 Security
selected by the Board of Directors of the Company. The term
"Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted
to trading is open for the transaction of business or, if the
Security is not listed or admitted to trading on any national
securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall
be determined in accordance with the method set forth in Section
11(d)(i). If the Preferred Shares are not publicly traded, the
"current per share market price" of the Preferred Shares shall
be conclusively deemed to be the current per share market price
of the Common Shares as determined pursuant to Section 11(d)(i)
(appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date
hereof), multiplied by 100. If neither the Common Shares nor
the Preferred Shares are publicly held or so listed or traded,
"current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a
statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required
unless such adjustment would require an increase or decrease of
at least 1% in the Purchase 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 one ten-millionth of a Preferred Share or one
ten-thousandth of any other share or security as the case may
be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no
later than three years from the date of the transaction which
requires such adjustment.
(f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the
Company other than Preferred Shares, the number of such other
shares so receivable upon exercise of any Right shall thereafter
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 Preferred Shares contained in Section 11(a)
through (c), inclusive, and the provisions of Sections 7, 9, 10
and 13 with respect to the Preferred Shares 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 Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price,
the number of one one-thousandths of a Preferred Share
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 Purchase
Price as a result of the calculations made in Sections 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 Purchase Price, that number of one
one-thousandths of a Preferred Share (calculated to the nearest
one ten-millionth of a Preferred Share) obtained by (i)
multiplying (x) the number of one one-thousandths of a share
covered by a Right immediately prior to this adjustment by (y)
the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product
so obtained by the Purchase Price in effect immediately after
such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights
in substitution for any adjustment in the number of one
one-thousandths of a Preferred Share purchasable upon the
exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the
number of one one-thousandths of a Preferred Share 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 hundred-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after
adjustment of the Purchase 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 Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates
have been distributed, shall be at least 10 days later than the
date of the public announcement. If Right Certificates have
been distributed, 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 to be so distributed shall be
issued, executed and countersigned in the manner provided for
herein 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 Purchase
Price or the number of one one-thousandths of a Preferred Share
issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the
Purchase Price and the number of one one-thousandths of a
Preferred Share which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-thousandth of the then
par value of the Preferred Shares 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
non-assessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase 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 of the
Preferred Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the
Preferred Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise on the basis of the
Purchase 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) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase 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 (i) consolidation or subdivision of
the Preferred Shares, (ii) issuance wholly for cash of any
Preferred Shares at less than the current market price, (iii)
issuance wholly for cash of Preferred Shares or securities which
by their terms are convertible into or exchangeable for
Preferred Shares, (iv) dividends on Preferred Shares payable in
Preferred Shares or (v) issuance of any rights, options or
warrants referred to hereinabove in Section 11(b), hereafter
made by the Company to holders of its Preferred Shares shall not
be taxable to such stockholders.
(n) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall
(i) declare or pay any dividend on the Common Shares payable in
Common Shares or (ii) effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or
otherwise other than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then in any
such case (i) the number of one one-thousandths of a Preferred
Share purchasable after such event upon proper exercise of each
Right shall be determined by multiplying the number of one
one-thousandths of a Preferred Share so purchasable immediately
prior to such event by a fraction, the numerator of which is the
number of Common Shares outstanding immediately before such
event and the denominator of which is the number of Common
Shares outstanding immediately after such event, and (ii) each
Common Share outstanding immediately after such event shall have
issued with respect to it that number of Rights which each
Common Share outstanding immediately prior to such event had
issued with respect to it. The adjustments provided for in this
Section 11(n) shall be made successively whenever such a
dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
Section 12. Certificate of Adjustment. Whenever an adjustment
is made as provided in Sections 11 and 13 hereof, the Company
shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for
such adjustment, (b) file with the Rights Agent and with each
transfer agent for the Common Shares or the Preferred Shares 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 therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
In the event that, at any time after a Person becomes an
Acquiring Person, directly or indirectly, (i) the Company shall
consolidate with, or merge with and into, any other Person, (ii)
any Person 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 Common Shares shall be changed
into or exchanged for stock or other securities of any other
Person (or the Company) or cash or any other property, or (iii)
the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one or
more 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 other than
the Company or one or more of its wholly-owned Subsidiaries,
then, and in each such case, proper provision shall be made so
that (A) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-thousandths of a
Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of
Preferred Shares, such number of Common Shares of such other
Person (including the Company as successor thereto or as the
surviving corporation) as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right is then
exercisable and dividing that product by (y) 50% of the then
current per share market price of the Common Shares of such
other Person (determined pursuant to Section 11(d) hereof) on
the date of consummation of such consolidation, merger, sale or
transfer; (B) the issuer of such Common Shares 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; (C) the term
"Company" shall thereafter be deemed to refer to such issuer;
and (D) such issuer shall take such steps (including, but not
limited to, the reservation of a sufficient number of its Common
Shares in accordance with Section 9 hereof) 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 the Common Shares thereafter
deliverable upon the exercise of the Rights. The Company
covenants and agrees that it shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the
Company and such issuer shall have executed and delivered to the
Rights Agent a supplemental agreement so providing. The Company
shall not enter into any transaction of the kind referred to in
this Section 13 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 eliminate or
substantially diminish the benefits intended to be afforded by
the Rights. The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales or other
transfers. For purposes hereof, the "earning power" of the
Company and its Subsidiaries shall be determined in good faith
by the Company's Board of Directors on the basis of the
operating earnings of each business operated by the Company and
its Subsidiaries during the three fiscal years preceding the
date of such determination (or, in the case of any business not
operated by the Company or any Subsidiary during three full
fiscal years preceding such date, during the period such
business was operated by the Company or any Subsidiary).
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
shall 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 the
purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price for any 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
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 the Rights are
not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the
average of the 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 the Rights are not
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 such market maker is
making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors
of the Company shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral
multiples of one one-thousandth of a Preferred Share) upon
exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions which
are integral multiples of one one-thousandth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of
one one-thousandth of a Preferred Share may, at the election of
the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary
selected by it; provided, that such agreement shall provide that
the holders of such depositary receipts shall have all the
rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares
that are not integral multiples of one one-thousandth of a
Preferred Share, the Company shall pay to each registered holder
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 of one Preferred Share as the fraction
of one Preferred Share that such holder would otherwise receive
upon the exercise of the aggregate number of rights exercised by
such holder. For the purposes of this Section 14(b), the
current market value of a Preferred Share shall be the closing
price of a Preferred Share (as determined pursuant to the second
sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives any right to receive fractional Rights or
fractional shares upon exercise of a Right (except as provided
above).
Section 15. Rights of Action. All rights of action in respect
of this Agreement, excepting the rights of action given to the
Rights Agent under 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 Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common
Shares) may, 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 Shares), on his own behalf and
for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights
evidenced by such 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 will be entitled to specific performance
of the obligations under, and injunctive relief against actual
or threatened violations of the obligations of any Person
subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the
Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common
Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books maintained by the Rights
Agent if surrendered at the principal office of the Rights
Agent, duly endorsed or accompanied by a proper instrument of
transfer with a completed form of certification; and
<PAGE>
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Shares certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificates or the associated Common
Shares 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.
Section 17. Right Certificate Holder Not Deemed a Stockholder.
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 Preferred Shares 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
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 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. 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 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, 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 or liability
in connection therewith.
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 Preferred Stock or for 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.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent. 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 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 Rights
Agent 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.
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<PAGE>
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 expressly set forth in
this Agreement and no implied duties or obligations shall be
read into this Agreement against the Rights Agent. The Rights
Agent shall perform those duties and obligations 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 (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 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 one of the
Chairman of the Board, the President, a Vice President, the
Treasurer or the Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance
upon such certificate.<PAGE>
(c) The Rights Agent shall be liable hereunder only
for its own negligence, 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 as to its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have
been made by the Company only.
(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 adjustment
required under the provisions of Sections 11 or 13 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 actual
notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Preferred
Stock to be issued pursuant to this Agreement or any Right
Certificate or as to whether any shares of Preferred Stock will,
when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged end 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 from any one of the Chairman of the Board, the
President, a Vice President, the Secretary or the Treasurer of
the Company, and to apply to such officers 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.
(h) The Rights Agent and any stockholder, 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
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 hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and
continued employment thereof.
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 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common
Shares and the Preferred 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 upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Shares and the Preferred
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 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 corporation organized
and doing business under the laws of the United States or of any
state of the United States, in good standing, having an office
in the State of Texas which is authorized under such laws to
exercise 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 million. After appointment, the
successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company
shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Shares and the
Preferred 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 Purchase Price and the number or
kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance with
the provisions of this Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option,
at any time prior to such time as any Person becomes an
Acquiring Person, redeem all but not less than all the then
outstanding Rights at a redemption price of $0.01 per Right,
appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the
"Redemption Price"). The redemption of the Rights by the Board
of Directors may be made effective at such time, on such basis
and subject to such conditions as the Board of Directors in its
sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights pursuant to
paragraph (a) of this Section 23, 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. The Company shall
promptly give public notice of any such redemption; provided,
however, that the failure to give, or any defect in, any such
notice shall not affect the validity of such redemption. Within
10 days after such action of the Board of Directors ordering the
redemption of the Rights pursuant to paragraph (a), the Company
shall mail a notice of redemption to all the holders of the then
outstanding Rights at their last addresses as they appear upon
the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent
for the Common Shares. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. If the payment of the Redemption Price is
not included with such notice, each such notice shall 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 for value any Rights
at any time in any manner other than that specifically set forth
in this Section 23 or in Section 24 hereof, other than in
connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable
Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 11(a)(ii) hereof) for
Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of
the Company,
<PAGE>
any employee benefit plan of the Company or any such Subsidiary,
or any entity holding Common Shares for or pursuant to the terms
of any such plan), together with all Affiliates and Associates
of such Person, becomes the Beneficial Owner of a majority of
the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to
subsection (a) of this Section 24 and without any further action
and without any notice, the right to exercise such Rights shall
terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to
the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Company shall promptly give public notice
of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the
validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights
at their last addresses as they appear upon the registry books
of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state
the method by which the exchange of the Common Shares 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 based on the number of Rights (other
than Rights which have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute Preferred Shares or common stock
equivalents for Common Shares exchangeable for Rights, at the
initial rate of one one-thousandth of a Preferred Share (or an
appropriate number of common stock equivalents) for each Common
Share, as appropriately adjusted to reflect adjustments in the
voting rights of the Preferred Shares pursuant to the terms
thereof, so that the fraction of a Preferred Share delivered in
lieu of each Common Share shall have the same voting rights as
one Common Share.
(d) In the event that there shall not be sufficient Common
Shares, Preferred Shares or common stock equivalents authorized
by the Company's certificate of incorporation and not
outstanding or subscribed for, or reserved or otherwise
committed for issuance for purposes other than upon exercise of
Rights, to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such
action as may be necessary to authorize additional Common
Shares, Preferred Shares or common stock equivalents for
issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence
fractional Common Shares. In lieu of such fractional Common
Shares, the Company shall pay to the registered holders of the
Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to
the same fraction of the current per share market value of a
whole Common Share. For the purposes of this paragraph (e), the
current per share market value of a whole Common Share shall be
the closing price of a Common Share (as determined pursuant to
the second sentence of Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of exchange pursuant to this
Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall after the Distribution Date
propose (i) to pay any dividend payable in stock of any class to
the holders of its Preferred Shares or to make any other
distribution to the holders of its Preferred Shares (other than
a regular quarterly cash dividend), (ii) to offer to the holders
of its Preferred Shares rights or warrants to subscribe for or
to purchase any additional Preferred Shares or shares of stock
of any class or any other securities, rights or options, (iii)
to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of
outstanding Preferred Shares), (iv) to effect any consolidation
or merger into or with, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale
or other transfer), in one or more 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, (v) to
effect the liquidation, dissolution or winding up of the
Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision,
combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in
Common Shares), 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,
or 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 Common
Shares and/or Preferred Shares, 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 10 days prior to
the record date for determining holders of the Preferred Shares
for purposes of such action, and in the case of any such other
action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the
holders of the Common Shares and/or Preferred Shares, whichever
shall be the earlier.
(b) In case any event set forth in Section 11(a)(ii) hereof
shall occur, then the Company shall as soon as practicable
thereafter give to each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of the occurrence of
such event, which notice shall describe such event and the
consequences of such 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:
Pancho's Mexican Buffet, Inc.
3500 Noble Avenue
Fort Worth, Texas 76111
Attention: Secretary
Copy to:
Decker, Jones, McMackin, McClane,
Hall & Bates
2400 City Center II
301 Commerce Street
Fort Worth, Texas 76102
Attention: John B. McClane
Subject to the provisions of Section 21 hereof, 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:
KeyCorp Shareholder Services, Inc.
5050 Renaissance Tower
1201 Elm Street
Dallas, Texas 75270
Attention: Mark Asbury, Vice President
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 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. The Company may from
time to time, and the Rights Agent shall, if the Company
so directs, supplement or amend this Agreement without the
approval of any holders of Right Certificates in order to cure
any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any other
provisions herein, or to make any change to or delete any
provision hereof or to adopt any other provisions with respect
to the Rights which the Company may deem necessary or desirble.
Any such supplement or amendment will be evidenced by a writing
signed by the Company and the Rights Agent; provided, however,
that from and after such time as any Person becomes an Acquiring
Person, this Agreement shall not be amended or supplemented in
any manner which would adversely affect the interests of the
holders of Rights (other than an Acquiring Person and its
Affiliates and Associates).
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. 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, the Common Shares) 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, the Common
Shares).
Section 30. 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.
Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract
made under the laws of the State of Delaware 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
performed entirely within such State.
Section 32. 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 33. 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.
Section 34. Administration. The Board of Directors of the
Company shall have the exclusive power and authority to
administer and interpret the provisions of this Agreement and to
exercise all rights and powers specifically granted to the Board
of Directors or the Company or as may be necessary or advisable
in the administration of this Agreement. All such actions,
calculations, determinations and interpretations which are done
or made by the Board of Directors in good faith shall be final,
conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties and shall not
subject the Board of Directors to any liability to the holders
of the Rights.<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amended Rights Agreement to be duly executed and their
respective corporate seals to be hereunder affixed and attested,
all as of the day and year first above written.
Attest: PANCHO'S MEXICAN BUFFET, INC.
By _/s/Samuel L. Carlson____ By _/s/Hollis Taylor___________
Secretar President
Attest: KEYCORP SHAREHOLDER SERVICES, INC.
By _/s/Jill Wessell_________ By _/s/Mark Asbury_____________
Vice President Vice President
<PAGE>
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
PANCHO'S MEXICAN BUFFET, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
________________________________________________
Pancho's Mexican Buffet, Inc., a corporation organized and
existing under the General Corporation Law of the State of
Delaware (hereinafter called the "Corporation"), hereby
certifies that the following resolution was adopted by the Board
of Directors of the Corporation as required by Section 151 of
the General Corporation Law at a meeting duly called and held on
January 24, 1996:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of this Corporation (hereinafter
called the "Board of Directors" or the "Board") in accordance
with the provisions of the Certificate of Incorporation of the
Corporation, the Board of Directors hereby creates a series of
Series Preferred Stock, par value $10.00 per share (the
"Preferred Stock"), of the Corporation and hereby states the
designation and number of shares, and fixes the relative rights,
preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of this series
shall be designated as "Series A Junior Participating Preferred
Stock" (the "Series A Preferred Stock") and the number of shares
constituting the Series A Preferred Stock shall be 10,000.
Such number of shares may be increased or decreased by
resolution of the Board of Directors; provided, that no decrease
shall reduce the number of shares of Series A Preferred Stock to
a number less than the number of shares then outstanding plus
the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion
of any outstanding securities issued by the Corporation
convertible into Series A Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any other stock) ranking prior and
superior to the Series A Preferred Stock with respect to
dividends, the holders of shares of Series A Preferred Stock
shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the last day of
March, June, September and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount (if any) per share
(rounded to the nearest cent), subject to the provision for
adjustment hereinafter set forth, equal to 1000 times the
aggregate per share amount of all cash dividends, and 1000 times
the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions, other than a dividend payable
in shares of Common Stock, par value $0.10 per share (the
"Common Stock"), of the Company or a subdivision of the
outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately
preceding Quarterly Dividend Payment Date or, with respect to
the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series A
Preferred Stock. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the amount to
which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under the preceding
sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend ordistribution
on the Series A Preferred Stock as provided in paragraph (A) of
this Section immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable
in shares of Common Stock).
(C) Dividends due pursuant to paragraph (A) of this Section
shall begin to accrue and be cumulative on outstanding shares of
Series A Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares, unless the
date of issue of such shares is prior to the record date for the
first Quarterly Dividend Payment Date, in which case dividends
on such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred Stock
entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of Series
A Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may
fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date
shall be not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred Stock shall entitle the
holder thereof to 1000 votes on all matters submitted to a vote
of the stockholders of the Corporation. In the event the
Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such
case the number of votes per share to which holders of shares of
Series A Preferred Stock were entitled immediately prior to such
event shall be adjusted by multiplying such number by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) Except as otherwise provided the Restated Certificate of
Incorporation of the Company, including any other Certificate of
Designations creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series A Preferred
Stock and the holders of shares of Common Stock and any other
capital stock of the Corporation having general voting rights
shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by
law, holders of Series A Preferred Stock shall have no special
voting rights and their consent shall not be required (except to
the extent they are entitled to vote with holders of Common
Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred Stock outstanding
shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except dividends
paid ratably on the Series A Preferred Stock and all such parity
stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are
then entitled; or
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the
Corporation ranking junior (as to dividends and upon
dissolution, liquidation or winding up) to the Series A
Preferred Stock.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the
Corporation in any manner whatsoever shall be retired and
canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part
of a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Restated
Certificate of Incorporation of the Company, including any
Certificate of Designations creating a series of Preferred Stock
or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation the
holders of shares of Series A Preferred Stock shall be entitled
to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 1000
times the aggregate amount to be distributed per share to
holders of shares of Common Stock plus an amount equal to any
accrued and unpaid dividends. In the event the Corporation
shall at any time declare or pay any dividend on the Common
Stock payable in shares of Common Stock, or effect a subdivision
or combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case
the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event
under the preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator of which is the number
of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such
case each share of Series A Preferred Stock shall at the same
time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth,
equal to 1000 times the aggregate amount of stock, securities,
cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted
by multiplying such amount by a fraction, the numerator of which
is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior
to such event.
Section 8. Amendment. The Certificate of Incorpo-ration of
the Corporation shall not be amended in any manner, including in
a merger or consolidation, which would alter, change, or repeal
the powers, preferences or special rights of the Series A
Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series A Preferred Stock, voting together
as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Corporation by its President
this 30th day of January, 1996.
PANCHO'S MEXICAN BUFFET, INC.
By: _/s/ Hollis Taylor____________
President
<PAGE>
Exhibit B
Form of Right Certificate
Certificate No. R-_______ Rights
NOT EXERCISABLE AFTER MARCH 29, 2006 OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$0.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS THAT ARE
OR WERE BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY
ASSOCIATES OR AFFILIATES THEREOF (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
MAY BECOME NULL AND VOID.
Right Certificate
PANCHO'S MEXICAN BUFFET, INC.
This certifies that _______________________, or registered
assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject
to the terms, provisions and conditions of the Rights Agreement,
dated as of ____________ ___, 1996 (the "Rights Agreement"),
between Pancho's Mexican Buffet, Inc., a Delaware corporation
(the "Company"), and KeyCorp Shareholder Services, Inc. (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 5:00 P.M., Fort Worth, Texas time, on
March 29, 2006, at the principal office of the Rights Agent, or
at the office of its successor as Rights Agent, one
one-thousandth of a fully paid non-assessable share of Series A
Junior Participating Preferred Stock, par value $10.00 per share
(the "Preferred Shares"), of the Company, at a purchase price of
$10.00 per one one-thousandth of a Preferred Share (the
"Purchase Price"), upon presentation and surrender of this Right
Certificate with the certification and the Form of Election to
Purchase duly executed. The number of Rights evidenced by this
Right Certificate (and the number of one one-thousandths of a
Preferred Share which may be purchased upon exercise hereof) set
forth above, and the Purchase Price set forth above, are the
number and Purchase Price as of March 29, 1996, based on the
Preferred Shares as constituted at such date. As provided in
the Rights Agreement, the Purchase Price and the number of one
one-thousandths of a Preferred Share 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.
From and after the occurrence of an event described in Section
11(a)(ii) of the Rights Agreement, if the Rights evidenced by
this Right Certificate are or were at any time on or after the
earlier of (x) the Shares Acquisition Date (as such term is
defined in the Rights Agreement) and (y) the Distribution Date
(as such term is defined in the Rights Agreement) acquired or
beneficially owned by an Acquiring Person or an Associate or
Affiliate of an Acquiring Person (as such terms are defined in
the Rights Agreement), such Rights shall become void, and any
holder of such Rights shall thereafter have no right to exercise
such Rights.
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. Copies of the Rights Agreement are on
file at the principal executive offices of the Company and the
offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the
Rights Agent, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right
Certificate or Right 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 Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company
at a redemption price of $0.01 per Right or (ii) may be
exchanged in whole or in part for Preferred Shares or shares of
the Company's Common Stock, par value $0.10 per share.
No fractional Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-thousandth of
a Preferred Share, which may, at the election of the Company, be
evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of
the Preferred Shares or of any other securities of the Company
which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the
rights of a 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 _______________ __,
1996.
Attest: PANCHO'S MEXICAN BUFFET, INC.
_____________________________ By: _____________________________
Countersigned:
KeyCorp Shareholder Services, Inc.,
Rights Agent
By: _________________________
Authorized Signature<PAGE>
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: _____________ ___, _____
_________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United
States.
- -----------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an
Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
_________________________________
Signature
- -----------------------------------------------------------------
<PAGE>
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To PANCHO'S MEXICAN BUFFET, INC.:
The undersigned hereby irrevocably elects to exercise
________________ Rights represented by this Right Certificate to
purchase the Preferred Shares issuable upon the exercise of such
Rights and requests that certificates for such Preferred Shares
be issued in the name of:
Please insert social security
or other identifying number
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the
balance remaining of such Rights shall be registered in the name
of and delivered to:
Please insert social security
or other identifying number
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
_________________________________________________________________
Dated: _____________ ___, _____
_________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National
Association of Securities Dealers, Inc., or a commercial bank or
trust company having an office or correspondent in the United
States.
<PAGE>
Form of Reverse Side of Right Certificate -- continued
- -----------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an
Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement).
_________________________________
Signature
- -----------------------------------------------------------------
NOTICE
The signature in the foregoing Forms of Assignment and
Election must conform to the name as written upon the face of
this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may
be, is not completed, the Company and the Rights Agent will deem
the beneficial owner of the Rights evidenced by this Right
Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
<PAGE>
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On January 24, 1996, the Board of Directors of Pancho's
Mexican Buffet, Inc. (the "Company") declared a dividend of one
preferred share purchase right (a "Right") for each outstanding
share of common stock, par value $0.10 per share (the "Common
Shares") (the "Record Date") to the stockholders of record on
that date. Each Right entitles the registered holder to
purchase from the Company one one-thousandth of a share of
Series A Junior Participating Preferred Stock, par value $10.00
per share (the "Preferred Shares"), of the Company, at a price
of $10.00 per one one-thousandth of a Preferred Share (the
"Purchase Price"), subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and KeyCorp Shareholder
Services, Inc., as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired beneficial
ownership of 15% (or, in the case of certain Grandfathered
Stockholders, as that term is defined in the Agreement, 20%) or
more of the outstanding Common Shares, or (ii) 10 business days
(or such later date as may be determined by action of the Board
of Directors prior to such time as any Person becomes an
Acquiring Person) following the commencement of, or announcement
of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership
by a person or group of 15% or more of such outstanding Common
Shares (the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of the
Common Share certificates outstanding as of the Record Date, by
such Common Share certificate with a copy of this Summary of
Rights attached thereto.
The Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or
expiration of the Rights), new Common Share certificates issued
after the Record Date or upon transfer or new issuance of Common
Shares will contain a notation incorporating the Agreement by
reference. Until the Distribution Date (or earlier redemption
or expiration of the Rights), the surrender for transfer of any
certificates for Common Shares outstanding as of the Record
Date, even without such notation or a copy of this Summary of
Rights being attached thereto, will also constitute the transfer
of the Rights associated with the Common Shares represented by
such certificate. As soon as practicable following the
Distribution
Date, separate certificates evidencing the Rights ("Right
Certificates") will be mailed to holders of record of the Common
Shares as of the Close of Business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on March 29, 2006 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless
the Rights are earlier redeemed by the Company, in each case, as
described below.
The Purchase Price payable, and the number of Preferred Shares
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 Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares
of certain rights or warrants to subscribe for or purchase
Preferred Shares at a price, or securities convertible into
Preferred Shares with a conversion price, less than the then
current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of
indebtedness or assets (excluding regular periodic cash
dividends paid out of earnings or retained earnings or dividends
payable in Preferred Shares) or of subscription rights or
warrants (other than those referred to above).
The number of outstanding Rights and the number of one
one-thousandths of a Preferred Share issuable upon exercise of
each Right are also subject to adjustment in the event of a
stock split of the Common Shares or a stock dividend on the
Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring,
in any such case, prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will
not be redeemable. Each Preferred Share will be entitled to a
quarterly dividend payment of 1000 times the dividend declared
per Common Share. In the event of liquidation, the holders of
the Preferred Shares will be entitled to an aggregate payment of
1000 times the aggregate payment made per Common Share. Each
Preferred Share will have 1000 votes, voting together with the
Common Shares. In the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive 1000 times the
amount received per Common Share. These rights are protected by
customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend,
liquidation and voting rights, the value of the one
one-thousandth interest in a Preferred Share purchasable upon
exercise of each Right should approximate the value of one
Common Share.
In the event that, at any time after a Person becomes an
Acquiring Person, the Company is acquired in a merger or other
business combination transaction or 50% or more of its
consolidated assets or earning power are sold, proper provision
will be made so that each holder of a Right will thereafter have
the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of
common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise
price of the Right. In the event that any person becomes an
Acquiring Person, proper provision shall be made so that each
holder of a Right, other than Rights beneficially owned by the
Acquiring Person and its Affiliates and Associates (which will
thereafter be void), will thereafter have the right to receive
upon exercise that number of Common Shares having a market value
of two times the exercise price of the Right. If the Company
does not have sufficient Common Shares to satisfy such
obligation to issue Common Shares, or if the Board of Directors
so elects, the Company shall deliver upon payment of the
exercise price of a Right an amount of cash or securities
equivalent in value to the Common Shares issuable upon exercise
of a Right; provided that, if the Company fails to meet such
obligation within 30 days following the later of (x) the first
occurrence of an event triggering the right to purchase Common
Shares and (y) the date on which the Company's right to redeem
the Rights expires, the Company must deliver, upon exercise of a
Right but without requiring payment of the exercise price then
in effect, Common Shares (to the extent available) and cash
equal in value to the difference between the value of the Common
Shares otherwise issuable upon the exercise of a Right and the
exercise price then in effect. The Board of Directors may
extend the 30-day period described above for up to an additional
60 days to permit the taking of action that may be necessary to
authorize sufficient additional Common Shares to permit the
issuance of Common Shares upon the exercise in full of the
Rights.
At any time after any Person becomes an Acquiring Person and
prior to the acquisition by any person or group of a majority of
the outstanding Common Shares, the Board of Directors of the
Company may exchange the Rights (other than Rights owned by such
person or group which have become void), in whole or in part, at
an exchange ratio of one Common Share per Right (subject to
adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional
Preferred Shares will be issued (other than fractions which are
integral multiples of one one-thousandth of a Preferred Share,
which may, at the election of the Company, be evidenced by
depositary receipts) and in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Shares
on the last trading day prior to the date of exercise.
At any time prior to the time any Person becomes an Acquiring
Person, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $0.01 per Right
(the "Redemption Price"). The redemption of the Rights may be
made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of
Directors of the Company without the consent of the holders of
the Rights, except that from and after such time as any person
becomes an Acquiring Person no such amendment may adversely
affect the interests of the holders of the Rights (other than
the Acquiring Person and its Affiliates and Associates).
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
A copy of the Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on
Form 8-A dated February 22, 1996. A copy of the 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 Agreement, which
is hereby incorporated herein by reference.
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