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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES
OF SECURITIES PURSUANT TO SECTION 12(b) OR 12(g)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOODMAKER, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 95-2698708
(State of incorporation or organization) (I.R.S. Employer
Identification No.)
9330 Balboa Avenue,
San Diego, California 92123
(Address of principal executive offices) (zip code)
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
------------------- ------------------------------
Preferred Stock Purchase Rights New York Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act: None
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Item 1. Description of Registrant's Securities to be Registered.
-------------------------------------------------------
On July 26, 1996 the Board of Directors of Foodmaker,
Inc. (the "Company") authorized and declared a dividend of one
preferred stock purchase right (a "Right") for each share of
common stock, par value $.01 per share, of the Company (the
"Common Shares"). The dividend is payable on August 15, 1996
(the "Record Date") to the holders of record of Common Shares as
of the close of business on such date.
The following is a brief description of the Rights. It
is intended to provide a general description only and is subject
to the detailed terms and conditions of a Rights Agreement (the
"Rights Agreement") dated as of July 26, 1996 by and between the
Company and Wells Fargo Bank, N. A. as Rights Agent (the "Rights
Agent").
1. Common Share Certificates Representing Rights
Until the Distribution Date (as defined in Section
2 below), (a) the Rights shall not be exercisable, (b) the Rights
shall be attached to and trade only together with the Common
Shares and (c) the stock certificates representing Common Shares
shall also represent the Rights attached to such Common Shares.
Common Share certificates issued after the Record Date and prior
to the Distribution Date shall contain a notation incorporating
the Rights Agreement by reference.
2. Distribution Date
The "Distribution Date" is the earliest of (a) the
tenth business day following the date of the first public
announcement that any person (other than the Company or certain
related entities, and with certain additional exceptions) has
become the beneficial owner of 20% or more of the then
outstanding Common Shares (such person is a "20% Stockholder" and
the date of such public announcement is the "20% Ownership
Date"), (b) the tenth business day (or such later day as shall be
designated by the Board of Directors) following the date of the
commencement of, or the announcement of an intention to make, a
tender offer or exchange offer, the consummation of which would
cause any person to become a 20% Stockholder or (c) the first
date, on or after the 20% Ownership Date, upon which the Company
is acquired in a merger or other business combination in which the
Company is not the surviving corporation or in which the outstanding
Common Shares are changed into or exchanged for stock or assets of
another person, or upon which 50% or more of the Company's consolidated
assets or earning power are sold (other than in transactions in the
ordinary course of business). In calculating the percentage of
outstanding Common Shares that are beneficially owned by any person,
such person shall be deemed to beneficially own any Common Shares
issuable upon the exercise, exchange or conversion of any options,
warrants or other securities beneficially owned by such person;
provided, however, that such Common Shares issuable upon such exercise
shall not be deemed outstanding for the purpose of calculating the
percentage of Common Shares that are beneficially owned by any other person.
Notwithstanding the foregoing, no person shall be deemed a "20%
Stockholder" until such person becomes the beneficial owner of a
percentage of the then outstanding Common Shares that is at least
1% more than the percentage of the outstanding Common Shares
beneficially owned by such person on July 26, 1996. In addition,
if, after July 26, 1996, any person becomes the beneficial owner
of at least 20% of the then outstanding Common Shares as a result
of any increase in the number of Common Shares issuable upon the
exercise, exchange or conversion of outstanding securities, or
any decrease in the number of outstanding Common Shares resulting
from any stock repurchase plan or self tender offer of the
Company, then such person shall not be deemed a "20% Stockholder"
until such person thereafter acquires beneficial ownership of, in
the aggregate, a number of additional Common Shares equal to 1%
or more of the then outstanding Common Shares.
Upon the close of business on the Distribution
Date, the Rights shall separate from the Common Shares, Right
certificates shall be issued and the Rights shall become
exercisable to purchase Preferred Shares as described in Section
5 below.
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3. Issuance of Right Certificates
As soon as practicable following the Distribution
Date, separate certificates representing only Rights shall be
mailed to the holders of record of Common Shares as of the close
of business on the Distribution Date, and such separate Right
certificates alone shall represent such Rights from and after the
Distribution Date.
4. Expiration of Rights
The Rights shall expire on July 26, 2006 unless
earlier redeemed or exchanged, unless the Distribution Date has
previously occurred and the Rights have separated from the Common
Shares, in which case the Rights will remain outstanding for ten
years.
5. Exercise of Rights
Unless the Rights have expired or been redeemed or
exchanged, they may be exercised, at the option of the holders,
pursuant to paragraphs (a), (b) or (c) below. No Right may be
exercised more than once or pursuant to more than one of such
paragraphs. From and after the first event of the type described
in paragraphs (b) or (c) below, each Right that is beneficially
owned by a 20% Stockholder or that was attached to a Common Share
that is subject to an option beneficially owned by a 20%
Stockholder shall be void.
(a) Right to Purchase Preferred Shares. From and
after the close of business on the Distribution Date, each
Right (other than a Right that has become void) shall be
exercisable to purchase one one-hundredth of a share of
Series A Junior Participating Cumulative Preferred Stock,
par value $.01 per share, of the Company (the "Preferred
Shares"), at an exercise price of $40 (forty dollars) (the
"Exercise Price"). Prior to the Distribution Date, the
Company may substitute for all or any portion of the
Preferred Shares that would otherwise be issuable upon
exercise of the Rights, cash, assets or other securities
having the same aggregate value as such Preferred Shares.
The Preferred Shares are nonredeemable and, unless otherwise
provided in connection with the creation of a subsequent
series of preferred stock, are subordinate to any other
series of the Company's preferred stock, whether issued
before or after the issuance of the Preferred Shares. The
Preferred Shares may not be issued except upon exercise of
Rights. The holder of a Preferred Share is entitled to
receive when, as and if declared, the greater of (i) cash
and non-cash dividends in an amount equal to 100 times the
dividends declared on each Common Share or (ii) a
preferential annual dividend of $1.00 per Preferred Share
($.01 per one one-hundredth of a Preferred Share). In the
event of liquidation, the holders of Preferred Shares shall
be entitled to receive a liquidation payment in an amount
equal to the greater of (1) $1.00 per Preferred Share ($.01
per one one-hundredth of a Preferred Share), plus all
accrued and unpaid dividends and distributions on the
Preferred Shares, or (2) an amount equal to 100 times the
aggregate amount to be distributed per Common Share. Each
Preferred Share has 100 votes, voting together with the
Common Shares. In the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, the
holder of a Preferred Share shall be entitled to receive 100
times the amount received per Common Share. The rights of
the Preferred Shares as to dividends, voting and liquidation
preferences are protected by antidilution provisions. It is
anticipated that the value of one one-hundredth of a
Preferred Share should approximate the value of one Common
Share.
(b) Right to Purchase Common Shares of the
Company. From and after the close of business on the tenth
business day following the 20% Ownership Date, each Right
(other than a Right that has become void) shall be
exercisable to purchase, at the Exercise Price (initially
$40), Common Shares with a market value equal to two times
the Exercise Price. If the Company does not have sufficient
Common Shares available for all Rights to be exercised, the
Company shall substitute for all or any portion of the
Common Shares that would otherwise be issuable upon the
exercise of the Rights, cash, assets or other securities
having the same aggregate value as such Common Shares.
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(c) Right to Purchase Common Stock of a Successor
Corporation. If, on or after the 20% Ownership Date,
(i) the Company is acquired in a merger or other business
combination in which the Company is not the surviving corporation,
(ii) the Company is the surviving corporation in a merger or
other business combination in which all or part of the outstanding
Common Shares are changed into or exchanged for stock or assets
of another person or (iii) 50% or more of the Company's consolidated
assets or earning power are sold (other than in transactions in the
ordinary course of business), then each Right (other than a Right
that has become void) shall thereafter be exercisable to
purchase, at the Exercise Price (initially $40), shares of
common stock of the surviving corporation or purchaser,
respectively, with an aggregate market value equal to two
times the Exercise Price.
6. Adjustments to Prevent Dilution
The Exercise Price, the number of outstanding
Rights and the number of Preferred Shares or Common Shares
issuable upon exercise of the Rights are subject to adjustment
from time to time as set forth in the Rights Agreement in order
to prevent dilution. With certain exceptions, no adjustment in
the Exercise Price shall be required until cumulative adjustments
require an adjustment of at least 1%.
7. Cash Paid Instead of Issuing Fractional Securities
No fractional securities shall be issued upon
exercise of a Right (other than fractions of Preferred Shares
that are integral multiples of one one-hundredth of a Preferred
Share and that may, at the election of the Company, be evidenced
by depositary receipts) and in lieu thereof, an adjustment in
cash shall be made based on the market price of such securities
on the last trading date prior to the date of exercise.
8. Redemption
At any time prior to the earlier of (a) the tenth
business day (or such later day as shall be designated by the
Board of Directors) following the date of the commencement of, or
the announcement of an intention to make, a tender offer or
exchange offer, the consummation of which would cause any person
to become a 20% Stockholder, (b) the tenth business day after the
20% Ownership Date or (c) the first event of the type giving rise
to exercise rights under Section 5(c) above, the Board of Directors
may, at its option, direct the Company to redeem the Rights in whole,
but not in part, at a price of $.001 per Right (the "Redemption Price"),
and the Company shall so redeem the Rights. Immediately upon
such action by the Board of Directors (the date of such action is
the "Redemption Date"), the right to exercise Rights shall
terminate and the only right of the holders of Rights thereafter
shall be to receive the Redemption Price.
9. Exchange
At any time after the 20% Ownership Date and
prior to the first date thereafter upon which a 20% Stockholder
shall be the beneficial owner of 50% or more of the outstanding
Common Shares, the Board of Directors may, at its option, direct
the Company to exchange all, but not less than all, of the then
outstanding Rights for Common Shares at an exchange ratio per
Right equal to that number of Common Shares which, as of the date
of the Board of Directors' action, has a current market price
equal to the difference between the Exercise Price and the
current market price of the shares that would otherwise be
issuable upon exercise of a Right on such date (the "Exchange
Ratio"), and the Company shall so exchange the Rights.
Immediately upon such action by the Board of Directors, the right
to exercise Rights shall terminate and the only right of the
holders of Rights thereafter shall be to receive a number of
Common Shares equal to the Exchange Ratio.
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10. No Stockholder Rights Prior to Exercise
Until a Right is exercised, the holder thereof, as
such, shall have no rights as a stockholder of the Company (other
than rights resulting from such holder's ownership of Common
Shares), including, without limitation, the right to vote or to
receive dividends.
11. Amendment of Rights Agreement
The Board of Directors may, from time to time,
without the approval of any holder of Rights, direct the Company
and the Rights Agent to supplement or amend any provision of the
Rights Agreement in any manner, whether or not such supplement or
amendment is adverse to any holder of Rights, and the Company and
the Rights Agent shall so supplement or amend such provision;
provided, however, that from and after the earliest of (a) the
tenth business day (or such later day as shall be designated by
the Board of Directors) following the date of the commencement
of, or the announcement of an intention to make, a tender offer
or exchange offer, the consummation of which would cause any
person to become a 20% Stockholder, (b) the 20% Ownership Date,
(c) the first event of the type giving rise to exercise rights
under Section 5(c) above, or (d) the Redemption Date, the Rights
Agreement shall not be supplemented or amended in any manner that
would materially and adversely affect any holder of outstanding
Rights other than a 20% Stockholder; and provided further that from
and after the first date upon which there shall exist a 20% Stockholder,
the Rights Agreement shall not be supplemented or amended in any
manner without the approval of a majority of the Company's directors
who were directors prior to such date.
Item 2. Exhibits
--------
Attached hereto as an exhibit and incorporated herein
by reference is the Rights Agreement dated as of July 26, 1996 by
and between the Company and Wells Fargo Bank, N. A., as Rights
Agent, and which includes as Exhibit A thereto the form of
Certificate of Designations of Series A Junior Participating
Cummulative Preferred Stock, as Exhibit B thereto the form of
Right Certificate and as Exhibit C thereto the Summary of Rights.
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SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities and Exchange Act of 1934, the registrant has duly
caused this registration statement to be signed by on its behalf
by the undersigned, thereto duly authorized.
FOODMAKER, INC.
Dated: July 31, 1996
By WILLIAM E. RULON
----------------------------
William E. Rulon
Senior Vice President and Secretary
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EXHIBIT INDEX
-------------
Exhibit No.
- ----------
4.1 Rights Agreement dated as of July 26, 1996 by
and between the Company and Wells Fargo Bank,
N. A., as Rights Agent, and which includes as
Exhibit A thereto the form of Certificate of
Designations of Series A Junior Participating
Cummulative Preferred Stock, as Exhibit B
thereto the form of Right Certificate and as
Exhibit C thereto the Summary of Rights.
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RIGHTS AGREEMENT
dated as of July 26, 1996
by and between
FOODMAKER, INC.
and
WELLS FARGO BANK, N. A.,
as Rights Agent
EXHIBIT 4.1
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TABLE OF CONTENTS
Page
----
Section 1. Certain Definitions. . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent. . . . . . . . 7
Section 3. Issuance of Right Certificates . . . . . . 8
Section 4. Form of Right Certificates . . . . . . . . 10
Section 5. Countersignature and Registration. . . . . 10
Section 6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates . . . . . 11
Section 7. Exercise of Rights. . . . . . . . . . . . . 12
Section 8. Cancellation and Destruction of Right
Certificates. . . . . . . . . . . . . . . . 14
Section 9. Reservation and Availability of Capital
Stock . . . . . . . . . . . . . . . . . . . 15
Section 10. Securities Record Date. . . . . . . . . . . 16
Section 11. Adjustment of Exercise Price, Number of
Shares Issuable Upon Exercise of Rights or
Number of Rights. . . . . . . . . . . . . . 16
Section 12. Certificate of Adjusted Exercise Price or
Number of Shares Issuable Upon Exercise of
Rights. . . . . . . . . . . . . . . . . . . 23
Section 13. Consolidation, Merger, or Sale or Transfer
of Assets or Earning Power. . . . . . . . . 23
Section 14. Fractional Rights and Fractional Shares . . 26
Section 15. Rights of Action. . . . . . . . . . . . . . 27
Section 16. Agreement of Right Holders. . . . . . . . . 27
Section 17. Right Holder and Right Certificate Holder
Not Deemed a Stockholder. . . . . . . . . . 28
Section 18. Concerning the Rights Agent . . . . . . . . 28
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Section 19. Merger or Consolidation or Change of Name of
Rights Agent. . . . . . . . . . . . . . . . 29
Section 20. Duties of Rights Agent. . . . . . . . . . . 30
Section 21. Change of Rights Agent. . . . . . . . . . . 32
Section 22. Issuance of New Right Certificates. . . . . 33
Section 23. Redemption of Rights. . . . . . . . . . . . 33
Section 24. Exchange of Rights. . . . . . . . . . . . . 34
Section 25. Notice of Certain Events. . . . . . . . . . 35
Section 26. Notices . . . . . . . . . . . . . . . . . . 36
Section 27. Supplements and Amendments. . . . . . . . . 37
Section 28. Certain Covenants . . . . . . . . . . . . . 37
Section 29. Successors. . . . . . . . . . . . . . . . . 38
Section 30. Benefits of this Agreement. . . . . . . . . 38
Section 31. Severability. . . . . . . . . . . . . . . . 38
Section 32. Governing Law . . . . . . . . . . . . . . . 38
Section 33. Counterparts. . . . . . . . . . . . . . . . 38
Section 34. Descriptive Headings. . . . . . . . . . . . 38
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TABLE OF EXHIBITS
Exhibit A Form of Certificate of Designations
Exhibit B Form of Right Certificate
Exhibit C Form of Summary of the Rights
iii
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RIGHTS AGREEMENT
This Rights Agreement ("Agreement") is made and
entered into as of the 26th day of July, 1996, by and between
Foodmaker, Inc., a Delaware corporation (the "Company"), and
Wells Fargo Bank, N. A. (the "Rights Agent").
WHEREAS, the Board of Directors of the Company has
authorized and declared a dividend of one preferred stock
purchase right (a "Right") for each Common Share (as
hereinafter defined) of the Company, which dividend is payable
on August 15, 1996 (the "Record Date"), to the holders of
record of Common Shares as of the Close of Business (as
hereinafter defined) on such date;
WHEREAS, the Board of Directors of the Company has
further authorized and directed the issuance of one (subject
to adjustment of such number as provided in this Agreement)
Right for (A) each Common Share that shall be issued by the
Company at any time after the Record Date and prior to the
earliest of the date of the first Section 11(a)(ii) Event, the
date of the first Section 13(a) Event, the Redemption Date or
the Expiration Date (as such terms are hereinafter defined),
and (B) each Common Share that shall be issued by the Company
at any time on or after the earlier of the date of the first
Section 11(a)(ii) Event or the date of the first Section 13(a)
Event and prior to the earlier of the Redemption Date or the
Expiration Date pursuant to the exercise of conversion rights,
exchange rights, rights (other than Rights), warrants or
options that shall have been issued or granted prior to the
earlier of the date of the first Section 11(a)(ii) Event or
the date of the first Section 13(a) Event, unless the Board of
Directors shall provide otherwise at the time of the issuance
or grant of such conversion rights, exchange rights, rights
(other than Rights), warrants or options; and
WHEREAS, in connection with the matters referred to
herein, the Company desires to appoint the Rights Agent to act
on behalf of the Company for the benefit of the holders of
Rights, and the Rights Agent is willing so to act;
NOW, THEREFORE, in consideration of the foregoing
recitals and the mutual agreements set forth herein, and for
the benefit of the holders of Rights, the parties hereto
hereby agree as follows:
Section 1. Certain Definitions. For purposes of
this Agreement, the following terms have the meanings
indicated:
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(a) "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2
promulgated under the Exchange Act, as in effect on the date
hereof.
(b) A Person shall be deemed the "Beneficial Owner"
of and shall be deemed to "Beneficially Own":
(i) any securities that such Person or any
of such Person's Affiliates or Associates beneficially
owns, directly or indirectly, for purposes of
Section 13(d) of the Exchange Act and Rule 13d-3
promulgated under the Exchange Act, in each case as in
effect on the date hereof;
(ii) any securities that such Person or any
of such Person's Affiliates or Associates has the right
to acquire (whether such right is exercisable
immediately, or only after the passage of time,
compliance with regulatory requirements, the fulfillment
of a condition, or otherwise) pursuant to any agreement,
arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights (other than
the Rights), warrants or options, or otherwise, provided
that a Person shall not be deemed the Beneficial Owner
of, or to Beneficially Own, securities tendered pursuant
to a tender offer or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted
for purchase or exchange;
(iii) any securities that such Person or any of
such Person's Affiliates or Associates has the right to
vote, alone or in concert with others, pursuant to any
agreement, arrangement or understanding, provided 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
(A) arises solely from a revocable proxy given to such
Person or any of such Person's Affiliates or Associates
in response to a public proxy solicitation made pursuant
to and in accordance with the applicable rules and
regulations of the Exchange Act, and (B) is not also then
reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report);
(iv) any securities that 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 for the purpose of acquiring, holding,
voting (other than voting pursuant to a revocable proxy
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as described in the proviso to Section 1(b)(iii) hereof)
or disposing of any securities of the Company; and
(v) on any day on or after the Distribution
Date, all Rights that prior to such date were represented
by certificates for Common Shares that such Person
Beneficially Owns on such day.
Notwithstanding anything to the contrary in this
Section 1(b), a Person engaged in business as an underwriter
of securities shall not be deemed to be the Beneficial Owner
of, or to Beneficially Own, any securities acquired through
such Person's participation in good faith in a firm commitment
underwriting until the expiration of 40 days after the date of
such acquisition.
(c) "Business Day" shall mean any day other than a
Saturday, a Sunday or a day on which banking institutions in
the States of New York or California are authorized or
obligated by law or executive order to close.
(d) "Close of Business" on any given date shall
mean 5:00 o'clock p.m., Los Angeles time, on such date;
provided, however, that if such date is not a Business Day, it
shall mean 5:00 o'clock p.m., Los Angeles time, on the next
succeeding Business Day.
(e) "Closing Price" of a stock or other security on
any day shall be the last sale price, regular way, per share
of such stock or unit of such other security on such day 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 such stock or
other 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 such
stock or other security is listed or admitted to trading or,
if such stock or other security is not listed or admitted to
trading on any national securities exchange, the last quoted
sale 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 such stock or
other security is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker that makes a market in such stock or
other security and that is selected by the Board of Directors
of the Company.
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(f) "Common Share" shall mean one share of the
Common Stock, par value $.01 per share, of the Company, unless
used with reference to a Person other than the Company, in
which case it shall mean one share of the class of capital
stock (or equity interest) of such other Person having the
greatest voting power per share or, if such Person is a
Subsidiary of another Person, of the Person that ultimately
controls such Person.
(g) "Common Share Equivalent" shall have the
meaning ascribed to it in Section 11(a)(iii) hereof.
(h) "Current Market Price" per share of a stock or
unit of any other security on any date shall mean the average
of the daily Closing Prices of such stock or other security
for the 30 consecutive Trading Days through and including the
Trading Day immediately preceding the date in question;
provided, however, that if any event shall have caused the
Closing Price on any Trading Day during such 30-day period not
to be fully comparable with the Closing Price on the date in
question (or, if no Closing Price is available on the date in
question, on the Trading Day immediately preceding the date in
question), then each such noncomparable Closing Price so used
shall be appropriately adjusted by the Board of Directors of
the Company in order to make the Closing Price on each Trading
Day during the period used for the determination of the
Current Market Price fully comparable with the Closing Price
on such date in question (or, if applicable, the immediately
preceding Trading Day). "Current Market Price" per share of
any stock or unit of such other security that is not publicly
held or so listed or traded, and "Current Market Price" of any
other property, shall mean the fair value per share of such
stock or unit of such other security, or the fair value of
such other property, respectively, as determined in good faith
by the Board of Directors of the Company based upon such
appraisals or valuation reports of such independent experts as
the Board of Directors shall in good faith determine
appropriate, which determination shall be described in a
statement filed by the Company with the Rights Agent.
(i) "Distribution Date" shall have the meaning
ascribed to it in Section 3 hereof.
(j) "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(k) "Exchange Ratio" shall have the meaning
ascribed to it in Section 24(a) hereof.
(l) "Exempt Person" shall mean the Company, any
wholly-owned Subsidiary of the Company, any employee benefit
plan of the Company or of a Subsidiary of the Company, and any
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Person holding Voting Shares for or pursuant to the terms of
any such employee benefit plan.
(m) "Exercise Price" shall have the meaning
ascribed to it in Section 7(c) hereof.
(n) "Expiration Date" shall mean July 26, 2006,
unless the Distribution Date shall occur on or prior to such
date and the Rights shall have separated from the Common
Shares pursuant to the terms of this Agreement, in which case
"Expiration Date" shall mean the date which is the tenth
anniversary of the Distribution Date.
(o) "Person" shall mean any individual, firm,
partnership, corporation, association, group (as such term is
used in Rule 13d-5 promulgated under the Exchange Act as in
effect on the date hereof) or other entity, and shall include
any successor (by merger or otherwise) of such entity.
(p) "Preferred Share" shall mean one share of the
Series A Junior Participating Cumulative Preferred Stock, par
value $0.01 per share, of the Company, which shall have the
rights and preferences set forth in the form of Certificate of
Designations attached hereto as Exhibit A.
(q) "Preferred Share Equivalents" shall have the
meaning ascribed to it in Section 11(b) hereof.
(r) "Record Date" shall have the meaning ascribed
to it in the recitals hereto.
(s) "Redemption Date" shall mean the date of the
action of the Board of Directors of the Company authorizing
and directing the redemption of the Rights pursuant to
Section 23(a) hereof or the exchange of the Rights pursuant to
Section 24(a) hereof.
(t) "Redemption Price" shall have the meaning
ascribed to it in Section 23(a) hereof.
(u) "Right" shall have the meaning ascribed to it
in the recitals hereto.
(v) "Rights Agent" shall have the meaning ascribed
to it in the recitals hereto.
(w) "Section 11(a)(ii) Event" shall have the
meaning ascribed to it in Section 11(a)(ii) hereof.
(x) "Section 13(a) Event" shall have the meaning
ascribed to it in Section 13(a) hereof.
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(y) "Securities Act" shall mean the Securities Act
of 1933, as amended.
(z) "Subsidiary" of any Person shall mean any
corporation or other Person of which equity securities or
equity interests representing a majority of the voting power
are owned, directly or indirectly, or which is effectively
controlled, by such Person.
(aa) "Surviving Person" shall have the meaning
ascribed to it in Section 13(a) hereof.
(bb) "Trading Day" shall mean, as to any stock or
other security, a day on which the principal national
securities exchange on which such stock or other security is
listed or admitted to trading is open for the transaction of
business or, if such stock or other security is not listed or
admitted to trading on any national securities exchange, a
Business Day.
(cc) "Unavailable Adjustment Shares" has the meaning
ascribed to it in Section 11(a)(iii) hereof.
(dd) "Voting Share" shall mean (i) a Common Share of
the Company and (ii) any other share of capital stock of the
Company entitled to vote generally in the election of
directors or entitled to vote together with the Common Shares
in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation,
dissolution or winding up. References in this Agreement to a
percentage or portion of the outstanding Voting Shares shall
be deemed a reference to the percentage or portion of the
total votes entitled to be cast by the holders of the
outstanding Voting Shares.
(ee) "20% Ownership Date" shall mean the first date
after the declaration by the Board of Directors referred to in
the first recital hereto of public announcement (which, for
purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) by the Company or a 20% Stockholder containing
the facts by virtue of which a Person has become a
20% Stockholder.
(ff) "20% Stockholder" shall mean any Person that,
together with all Affiliates and Associates of such Person,
hereafter becomes the Beneficial Owner of such number of
Voting Shares of the Company as constitutes a percentage of
the then outstanding Voting Shares that is (1) equal to or
greater than 20% and (2) at least 1% more than the percentage
of the outstanding Voting Shares that were Beneficially Owned
by such Person on July 26, 1996; provided, however, that the
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term "20% Stockholder" shall not include: (i) an Exempt
Person; or (ii) any Person if such Person would not otherwise
be a 20% Stockholder but for a reduction in the number of
outstanding Voting Shares resulting from a stock repurchase
program or other similar plan of the Company or from a
self-tender offer of the Company, which plan or tender offer
commenced on or after the date hereof, provided, however, that
the term "20% Stockholder" shall include such Person from and
after the first date upon which (A) such Person, since the
date of the commencement of such plan or tender offer, shall
have acquired Beneficial Ownership of, in the aggregate, a
number of Voting Shares of the Company equal to 1% or more of
the Voting Shares of the Company then outstanding and (B) such
Person, together with all Affiliates and Associates of such
Person, shall Beneficially Own 20% or more of the Voting
Shares of the Company then outstanding. In calculating the
percentage of the outstanding Voting Shares that are
Beneficially Owned by a Person for purposes of this
subsection (ff), Voting Shares that are Beneficially Owned by
such Person shall be deemed outstanding, and Voting Shares
that are not Beneficially Owned by such Person and that are
subject to issuance upon the exercise or conversion of
outstanding conversion rights, exchange rights, rights (other
than Rights), warrants or options shall not be deemed
outstanding. Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith that a
Person that would otherwise be a 20% Stockholder pursuant to
the foregoing provisions of this Section 1(ff) and Section
1(b) hereof has become such inadvertently, and such Person
(a) promptly notifies the Board of Directors of such status
and (b) as promptly as practicable thereafter, either divests
of a sufficient number of Voting Shares so that such Person
would no longer be a 20% Stockholder, or causes any other
circumstance, such as the existence of an agreement respecting
Voting Shares, to be eliminated such that such Person would no
longer be a 20% Stockholder as defined pursuant to this
Section 1(ff) and 1(b), then such Person shall not be deemed
to be a 20% stockholder for any purposes of this Agreement.
Any determination made by the Board of Directors of the
Company as to whether any Person is or is not a
20% Stockholder shall be conclusive and binding upon all
holders of Rights.
Section 2. Appointment of Rights Agent. The
Company hereby appoints the Rights Agent to act as agent for
the Company and the holders of Rights 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, upon ten days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and
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shall in no event be liable for, the acts or omissions of any
such co-Rights Agent.
Section 3. Issuance of Right Certificates.
(a) "Distribution Date" shall mean the date, after
the date hereof, that is the earliest of (i) the tenth
Business Day (or such later day as shall be designated by the
Board of Directors of the Company) following the date of the
commencement of, or the first public announcement of the
intent of any Person, other than an Exempt Person, to
commence, a tender offer or exchange offer, the consummation
of which would cause any Person to become a 20% Stockholder,
(ii) the date of the first Section 11(a)(ii) Event or (iii)
the date of the first Section 13(a) Event.
(b) Until the Distribution Date, (i) the Rights
shall be represented by certificates for Common Shares (all of
which certificates for Common Shares shall be deemed to be
Right Certificates) and not by separate Right Certificates,
(ii) the record holder of the Common Shares represented by
each of such certificates shall be the record holder of the
Rights represented thereby and (iii) the Rights shall be
transferable only in connection with the transfer of Common
Shares. Until the earliest of the Distribution Date, the
Redemption Date or the Expiration Date, the surrender for
transfer of such certificates for Common Shares shall also
constitute the surrender for transfer of the Rights
represented thereby.
(c) As soon as practicable after the Distribution
Date, and after notification by the Company, the Rights Agent
shall send, at the Company's expense, by first-class,
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 substantially in the form of Exhibit B
hereto representing one Right for each Common Share so held.
From and after the Distribution Date, the Rights shall be
represented solely by such Right Certificates and may only be
transferred by the transfer of such Right Certificates, and
the holders of such Right Certificates, as listed in the
records of the Company or any transfer agent or registrar for
such Rights, shall be the record holders of such Rights.
(d) As soon as practicable after the Record Date,
the Company shall send a copy of a Summary of the Rights in
substantially the form attached hereto as Exhibit C 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.
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(e) Certificates for Common Shares issued at any
time after the Record Date and prior to the earliest of the
Distribution Date, the Redemption Date or the Expiration Date,
shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also represents Rights that
entitle the holder hereof to certain rights as set forth
in a Rights Agreement dated as of July 26, 1996 by and
between the Corporation and Wells Fargo Bank, N. A., as
Rights Agent (the "Rights Agreement"), the terms and
conditions of which are hereby incorporated herein by
reference and a copy of which is on file at the principal
executive offices of the Corporation.
Under certain circumstances specified in the Rights
Agreement, such Rights will be represented by separate
certificates and will no longer be represented by this
certificate. Under certain circumstances specified in the
Rights Agreement, Rights beneficially owned by certain persons
may become null and void. The Corporation will mail to the
record holder of this certificate a copy of the Rights
Agreement without charge promptly following receipt of a
written request therefor.
(f) Certificates for Common Shares issued at any
time on or after the Distribution Date and prior to the
earlier of the Redemption Date or the Expiration Date shall
have impressed on, printed on, written on or otherwise affixed
to them the following legend:
This certificate does not represent any Right
issued pursuant to the terms of a Rights Agreement dated
as of July 26, 1996 by and between the Corporation and
Wells Fargo Bank, N. A., as Rights Agent.
(g) In the event that at any time on or after the
earlier of the date of the first Section 11(a)(ii) Event or
the date of the first Section 13(a) Event and prior to the
earlier of the Redemption Date or the Expiration Date, the
Company shall issue any Common Shares pursuant to the exercise
of conversion rights, exchange rights, rights (other than
Rights), warrants or options that shall have been issued or
granted prior to the earlier of the date of the first Section
11(a)(ii) Event or the date of the first Section 13(a) Event,
then, unless the Board of Directors of the Company shall have
provided otherwise at the time of the issuance or grant of
such conversion rights, exchange rights, rights (other than
Rights), warrants or options, the Rights Agent shall, as soon
as practicable after the date of such event, send by first-
class, postage-prepaid mail to the record holder of such
Common Shares, at the address of such holder as shown on the
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<PAGE>
records of the Company, a Right Certificate substantially in
the form of Exhibit B hereto representing one Right for each
Common Share so issued.
(h) Notwithstanding the foregoing provisions of
this Section 3, the Rights Agent shall not send any Right
Certificate to any 20% Stockholder or any of its Affiliates or
Associates or to any Person if the Rights held by such Person
are Beneficially Owned by a 20% Stockholder or any of its
Affiliates or Associates. Any determination made by the Board
of Directors of the Company as to whether any Common Shares
are or were Beneficially Owned at any time by a
20% Stockholder or an Affiliate or Associate of a 20%
Stockholder shall be conclusive and binding upon all holders
of Rights.
Section 4. Form of Right Certificates. The Right
Certificates and the form of assignment, including
certificate, and the form of election to purchase, including
certificate, printed on the reverse thereof, when, as and if
issued, 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 upon which the Rights or the securities of the
Company issuable upon exercise of the Rights may from time to
time be listed, or to conform to usage. Subject to Section 22
hereof, Right Certificates, whenever issued, that are issued
in respect of Common Shares that were issued and outstanding
as of the Close of Business on the Distribution Date, shall be
dated as of the Distribution Date.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on
behalf of the Company by its Chairman of the Board, its Chief
Executive Officer or any Vice President, either manually or by
facsimile signature, and may have affixed thereto the
Company's seal or a facsimile thereof attested by its
Secretary or any Assistant Secretary, either manually or by
facsimile signature. The Right Certificates shall be
countersigned by an authorized signatory of the Rights Agent
(which need not be the same authorized signatory for all of
the Right Certificates) and shall not be valid for any purpose
unless so countersigned. In case any officer of the Company
who shall have signed any of the Right Certificates shall
cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery
by the Company, such Right Certificates may nevertheless be
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<PAGE>
countersigned by an authorized signatory of 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.
Any Right Certificate may be signed on behalf of the Company
by any person who at the actual date of such execution shall
be a proper officer of the Company to sign such Right
Certificate, even though such person was not such an officer
at the date of the execution of this Agreement.
(b) Following the Distribution Date, the Rights
Agent shall keep or cause to be kept at its offices in New
York, New York books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of Right
Certificates, the number of Rights represented on its face by
each Right Certificate and the date of each Right Certificate.
Section 6. Transfer, Split Up, Combination and
Exchange of Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates.
(a) Subject to the provisions of Sections 6(c),
7(d) and 14 hereof, at any time after the Close of Business on
the Distribution Date, and so long as the Rights represented
thereby remain outstanding, any one or more Right Certificates
may be transferred, split up, combined or exchanged for one or
more Right Certificates representing the same aggregate number
of Rights as the Right Certificates surrendered. Any
registered holder desiring to transfer, split up, combine or
exchange one or more Right Certificates shall make such
request in writing delivered to the Rights Agent, and shall
surrender the Right Certificates to be transferred, split up,
combined or exchanged at the office of the Rights Agent with
the form of assignment, including certificate, on the reverse
side thereof completed and duly executed, with signature
guaranteed and such other and further documentation as the
Rights Agent may reasonably request. Thereupon, the Rights
Agent shall countersign and deliver to the person entitled
thereto one or more Right Certificates, as so requested. The
Company may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection
with any transfer, split up, combination or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights
Agent of evidence reasonably satisfactory to them of the loss,
theft, destruction or mutilation of a Right Certificate, and,
in case of loss, theft or destruction, of indemnity or
security 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
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<PAGE>
to the Rights Agent and cancellation of such Right
Certificate, if mutilated, along with signature guarantees and
such other and further documentation as the Rights Agent may
reasonably request, the Company shall issue and deliver to the
Rights Agent for delivery to the record holder of such Right
Certificate a new Right Certificate of like tenor in lieu of
such lost, stolen, destroyed or mutilated Right Certificate.
(c) Notwithstanding anything to the contrary in
this Section 6, the Rights Agent shall not countersign and
deliver a Right Certificate to any Person if such Right
Certificate represents, or would represent when held by such
Person, Rights that had become or would become null and void
pursuant to Section 7(d) hereof.
Section 7. Exercise of Rights.
(a) Until the Distribution Date, no Right may be
exercised.
(b) Subject to Section 7(d) and (g) hereof and the
other provisions of this Agreement, at any time after the
Close of Business on the Distribution Date and prior to the
Close of Business on the earlier of the Redemption Date or the
Expiration Date, the registered holder of any Right
Certificate may exercise the Rights represented thereby in
whole or in part upon surrender of such Right Certificate,
with the form of election to purchase, including certificate,
on the reverse side thereof completed and duly executed, with
signature guaranteed, to the Rights Agent at the office or
agency of the Rights Agent in New York, New York, along with a
signature guarantee and such other and further documentation
as the Rights Agent may reasonably request, together with
payment of the Exercise Price for each Right exercised. Upon
the exercise of an exercisable Right and payment of the
Exercise Price in accordance with the provisions of this
Agreement, the holder of such Right shall be entitled to
receive, subject to adjustment as provided herein, one one-
hundredth of a Preferred Share (or, following the occurrence
of a Section 11(a)(ii) Event or a Section 13(a) Event, Common
Shares, other securities, cash and/or other property in
accordance with the provisions of this Agreement).
(c) The Exercise Price for the exercise of each
Right shall initially be $40 (forty dollars) and shall be
payable in lawful money of the United States of America in
accordance with Section 7(f) hereof. The Exercise Price and
the number of Preferred Shares (or, following the occurrence
of a Section 11(a)(ii) Event or a Section 13(a) Event, Common
Shares, cash and/or other property in accordance with the
provisions of this Agreement) to be acquired upon exercise of
a Right shall be subject to adjustment from time to time as
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<PAGE>
provided in Sections 7(e), 11 and 13 hereof and the other
provisions of this Agreement.
(d) Notwithstanding anything in this Agreement to
the contrary, from and after the earlier of the date of the
first Section 11(a)(ii) Event or the date of the first
Section 13(a) Event, any Rights that are or were Beneficially
Owned by a 20% Stockholder or any Affiliate or Associate of a
20% Stockholder at any time on or after the Distribution Date
shall be null and void, and for all purposes of this Agreement
such Rights shall thereafter be deemed not to be outstanding,
and any holder of such Rights (whether or not such holder is a
20% Stockholder or an Affiliate or Associate of a
20% Stockholder) shall thereafter have no right to exercise
such Rights.
(e) Prior to the Distribution Date, if the Board of
Directors of the Company shall have determined that such
action adequately protects the interests of the holders of
Rights, the Company may, in its discretion, substitute for all
or any portion of the Preferred Shares that would otherwise be
issuable (after the Close of Business on the Distribution
Date) upon the exercise of each Right and payment of the
Exercise Price, (i) cash, (ii) other equity securities of the
Company, (iii) debt securities of the Company, (iv) other
property or (v) any combination of the foregoing, in each case
having an aggregate Current Market Price equal to the
aggregate Current Market Price of the Preferred Shares for
which substitution is made. Subject to Section 7(d) hereof,
in the event that the Company takes any action pursuant to
this Section 7(e), such action shall apply uniformly to all
outstanding Rights.
(f) Upon receipt of a Right Certificate
representing exercisable Rights, with the form of election to
purchase, including certificate, completed and duly executed,
with signature guaranteed, accompanied by payment of the
Exercise Price for each Right to be exercised 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 certified check or cashier's check payable
to the order of the Company, the Rights Agent shall thereupon
promptly (i) requisition from the transfer agent of the
Preferred Shares (or, following the occurrence of a Section
11(a)(ii) Event or a Section 13(a) Event, Common Shares, other
securities, cash and/or other property in accordance with the
provisions of this Agreement), certificates for the number of
Preferred Shares (or such other securities) to be purchased,
and the Company hereby irrevocably authorizes such transfer
agent to comply with all such requests, and/or, as provided in
Section 14 hereof, requisition from the depositary agent
described therein depositary receipts representing such number
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<PAGE>
of one-hundredths of a Preferred Share (or such other
securities) as are to be purchased (in which case certificates
for the Preferred Shares (or such other securities)
represented by such receipts shall be deposited by the
transfer agent with such depositary agent) and the Company
hereby directs such 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 (or such other securities) in
accordance with Section 14 hereof, (iii) after receipt of such
certificates, depositary receipts or cash, 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 thereof, deliver such cash to or upon the order
of the registered holder of such Right Certificate.
(g) Notwithstanding the foregoing provisions of
this Section 7, the exercisability of the Rights shall be
suspended for such period as shall reasonably be necessary for
the Company to register under the Securities Act and any
applicable securities law of any jurisdiction the Preferred
Shares to be issued pursuant to the exercise of the Rights;
provided, however, that nothing contained in this Section 7
shall relieve the Company of its obligations under
Section 9(c) hereof.
(h) In case the registered holder of any Right
Certificate shall exercise less than all of the Rights
represented thereby, a new Right Certificate representing
Rights equivalent to the Rights remaining unexercised shall be
issued by the Rights Agent to the registered holder of such
Right Certificate or to such holder's duly authorized assigns,
subject to the provisions of Section 14 hereof.
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 this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise
thereof. The Rights Agent shall deliver all 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.
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Section 9. Reservation and Availability of Capital
Stock.
(a) Subject to Section 7(e) hereof, the Company
shall cause to be reserved and kept available out of its
authorized and unissued equity securities (or out of its
authorized and issued equity securities held in its treasury),
the number of such equity securities that will from time to
time be sufficient to permit the exercise in full of all
outstanding Rights.
(b) In the event that any securities issuable upon
exercise of the Rights are listed on any national securities
exchange, the Company shall use its best efforts, from and
after such time as the Rights become exercisable, to cause all
such securities issued or reserved for such issuance to be
listed on such exchange upon official notice of issuance upon
such exercise.
(c) If necessary to permit the issuance of
securities upon exercise of the Rights, the Company shall use
its best efforts, from and after the Distribution Date, to
register such securities under the Securities Act and any
applicable securities laws and to keep such registration
effective until the earlier of the Redemption Date or the
Expiration Date.
(d) The Company shall take all such action as may
be necessary to ensure that all securities delivered upon
exercise of the Rights shall, at the time of delivery of the
certificates for such securities (subject to payment of the
Exercise Price), be duly and validly authorized and issued and
fully paid and nonassessable securities.
(e) The Company shall pay when due and payable any
and all federal and state transfer taxes and charges that may
be payable in respect of the issuance or delivery of the Right
Certificates or of any securities upon the exercise of Rights.
The Company shall not, however, be required to pay any
transfer tax that may be payable in respect of any transfer or
delivery of a Right Certificate to a Person other than, or the
issuance or delivery of a certificate for securities in
respect of a name other than that of, the registered holder of
the Right Certificate representing Rights surrendered for
exercise, or to issue or deliver any certificate for
securities upon the exercise of any Right 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 satisfaction that no
such tax is due.
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(f) With respect to the Common Shares and/or other
securities issuable pursuant to Section 11(a)(ii) and (iii)
hereof, the foregoing covenants shall be applicable only upon
and following the occurrence of a Section 11(a)(ii) Event.
Section 10. Securities Record Date. Each person in
whose name any certificate for securities of the Company is
issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the securities
represented thereby on, and such certificate shall be dated,
the date upon which the Right Certificate representing such
Rights was duly surrendered and payment of the Exercise Price
(and any applicable transfer taxes) was made; provided,
however, that if the date of such surrender and payment is a
date upon which the securities transfer books of the Company
are closed, such person shall be deemed to have become the
record holder of such securities on, and such certificate
shall be dated, the next succeeding Business Day on which the
securities transfer books of the Company are open.
Section 11. Adjustment of Exercise Price, Number of
Shares Issuable Upon Exercise of Rights or Number of Rights.
The Exercise Price, the number and kind of securities that may
be purchased upon exercise of a 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 that the Company shall at
any time after the Close of Business on the Record Date
and prior to the Close of Business on the earlier of the
Redemption Date or the Expiration Date (A) declare or pay
any dividend on the Preferred Shares payable in Preferred
Shares or Voting Shares, (B) subdivide the outstanding
Preferred Shares, (C) combine the outstanding Preferred
Shares into a smaller number of Preferred Shares or
(D) issue Preferred Shares or Voting Shares 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), then, and upon each such event,
the number and kind of Preferred Shares or other
securities issuable upon the exercise of a Right on the
date of such event shall be proportionately adjusted so
that the holder of any Right exercised on or after such
date shall be entitled to receive, upon the exercise
thereof and payment of the Exercise Price, the aggregate
number and kind of Preferred Shares or other securities
or other property, as the case may be, that, if such
Right had been exercised immediately prior to such date
and at a time when such Right was exercisable and the
transfer books of the Company were open, such holder
would have owned upon such exercise and would have been
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entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an
event occurs that would require an adjustment under both
this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event (a "Section 11(a)(ii)
Event") that a 20% Ownership Date shall have occurred and
neither the Redemption Date nor the Expiration Date shall
have occurred prior to the tenth Business Day following
such 20% Ownership Date, then, and effective as of the
end of such tenth Business Day, proper provision shall be
made so that except as provided in Section 7(d) hereof,
each holder of a Right shall thereafter have the right to
receive, upon the exercise thereof in accordance with the
terms of this Agreement and payment of the then current
Exercise Price, in lieu of the securities or other
property otherwise purchasable upon such exercise, such
number of Common Shares of the Company as shall equal the
result obtained by multiplying the then current Exercise
Price by the then number of one-hundredths of a Preferred
Share for which a Right was exercisable (or, if the
Distribution Date shall not have occurred prior to the
date of such Section 11(a)(ii) Event, the number of one-
hundredths of a Preferred Share for which a Right would
have been exercisable if the Distribution Date had
occurred on the Business Day immediately preceding the
date of such Section 11(a)(ii) Event) immediately prior
to such Section 11(a)(ii) Event, and dividing that
product by 50% of the Current Market Price (determined
pursuant to Section 11(d) hereof) of a Common Share on
the date of occurrence of the relevant Section 11(a)(ii)
Event (such number of shares being hereinafter referred
to as the "Adjustment Shares"). Successive adjustments
shall be made pursuant to this paragraph each time a
Section 11(a)(ii) Event occurs.
(iii) In the event that on the date of a
Section 11(a)(ii) Event the aggregate number of Common
Shares that are authorized by the Company's Restated
Certificate of Incorporation but not outstanding or
reserved for issuance for purposes other than upon
exercise of the Rights is less than the aggregate number
of Adjustment Shares thereafter issuable upon the
exercise in full of the Rights in accordance with
Section 11(a)(ii) hereof (the excess of such number of
Adjustment Shares over and above such number of Common
Shares being hereinafter referred to as the "Unavailable
Adjustment Shares"), then, and upon each such event, the
Company shall substitute for the pro rata portion of the
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Unavailable Adjustment Shares that would otherwise be
issuable thereafter upon the exercise of each Right and
payment of the Exercise Price, (A) cash, (B) other equity
securities of the Company (including, without limitation,
shares of preferred stock of the Company or units of such
shares having the same Current Market Price as one Common
Share (a "Common Share Equivalent")), (C) debt securities
of the Company, (D) other property or (E) any combination
of the foregoing, in each case having an aggregate
Current Market Price equal to the aggregate Current
Market Price of the Unavailable Adjustment Shares for
which substitution is made. Subject to Section 7(d)
hereof, in the event that the Company takes any action
pursuant to this Section 11(a)(iii), such action shall
apply uniformly to all outstanding Rights.
(b) In the event that the Company shall, at any
time after the Close of Business on the Record Date and prior
to the Close of Business on the earlier of the Redemption Date
or the Expiration Date, fix a record date prior to the earlier
of the Redemption Date or the Expiration Date for the issuance
of rights, options or warrants to all holders of Preferred
Shares entitling them initially to subscribe for or purchase
Preferred Shares (or shares having the same rights, privileges
and preferences as the Preferred Shares ("Preferred Share
Equivalents")) or securities convertible into Preferred Shares
or Preferred Share Equivalents, at a price per Preferred Share
or Preferred Share Equivalent (or having a conversion price
per share, if a security convertible into Preferred Shares or
Preferred Share Equivalents) less than the Current Market
Price per Preferred Share on such record date, then, and upon
each such event, the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise
Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be equal to the sum of
the number of Preferred Shares outstanding on such record date
plus the number of Preferred Shares that the aggregate
offering price of the total number of Preferred Shares and/or
Preferred Share Equivalents to be so offered (and/or the
aggregate initial conversion price of the convertible
securities to be so offered) would purchase at such Current
Market Price, and the denominator of which shall be equal to
the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or
Preferred Share Equivalents to be offered for subscription or
purchase (or into which the convertible securities to be so
offered are initially convertible); provided, however, that if
such rights, options or warrants are not exercisable
immediately upon issuance but become exercisable only upon the
occurrence of a specified event or the passage of a specified
period of time, then the adjustment to the Exercise Price
shall be made and become effective only upon the occurrence of
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such event or such passage of time, and such adjustment shall
be made as if the record date for the issuance of such rights,
options or warrants had been the business day immediately
preceding the date upon which such rights, options or warrants
became exercisable. 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 to the
Exercise Price shall be made successively whenever such a
record date is fixed, and in the event that such rights or
warrants are not so issued, the Exercise Price shall be
adjusted to be the Exercise Price that would then be in effect
if such record date had not been fixed.
(c) In the event that the Company shall, at any
time after the Close of Business on the Record Date and prior
to the Close of Business on the earlier of the Redemption Date
or the Expiration Date, 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 surviving corporation)
of securities or assets (other than a distribution of
securities for which an adjustment is required under
Section 11(a)(i) or (b) hereof or a regular quarterly cash
dividend), then the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise
Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be equal to the excess
of the Current Market Price per Preferred Share on such record
date over and above the fair market value of the portion of
the securities or assets to be so distributed with respect to
one Preferred Share, and the denominator of which shall be
equal to such Current Market Price per Preferred Share. Such
adjustments shall be made successively whenever such a record
date is fixed, and in the event that such a distribution is
not so made, the Exercise Price shall be adjusted to be the
Exercise Price that would then be in effect if such record
date had not been fixed.
(d) For the purpose of any computation under this
Section 11, if the Preferred Shares are not publicly held or
traded, the "Current Market Price" per Preferred Share shall
be conclusively deemed to be the Current Market Price per
Common Share multiplied by 100.
(e) No adjustment in the Exercise Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Exercise Price; provided,
however, that any adjustments that by reason of this
Section 11(e) are not required to be made shall be cumulated
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-hundredth of a Common Share
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or other share or one-ten thousandth of a Preferred Share, as
the case may be.
(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 securities of
the Company other than Preferred Shares, the number of such
other securities so receivable upon exercise of any Right
shall be subject to adjustment from time to time in a manner
and on terms as nearly equivalent as practicable to the
provisions with respect to Preferred Shares contained in this
Section 11, and the other provisions of this Agreement with
respect to Preferred Shares shall apply on like terms to any
such other securities.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Exercise Price
hereunder shall represent the right to purchase, at the
adjusted Exercise Price, the number of one-hundredths 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) below, upon each
adjustment of the Exercise Price as a result of the
calculations made in Sections 11(b) and (c) hereof, each Right
outstanding immediately prior to the making of such adjustment
shall thereafter represent the right to purchase, at the
adjusted Exercise Price, that number of one-hundredths of a
Preferred Share (calculated to the nearest one-ten thousandth
of a Preferred Share) obtained by multiplying (i) the number
of one-hundredths of a Preferred Share purchasable upon the
exercise of one Right immediately prior to such adjustment of
the Exercise Price by (ii) the Exercise Price in effect
immediately prior to such adjustment, and dividing the product
so obtained by the Exercise Price in effect immediately after
such adjustment.
(i) The Company may elect, on or after the date of
any adjustment of the Exercise Price, to adjust the number of
Rights instead of making any adjustment in the number of
Preferred Shares 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-
hundredths 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 one-hundredth of a Right) obtained by dividing the
Exercise Price in effect immediately prior to the adjustment
of the Exercise Price by the Exercise Price in effect
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<PAGE>
immediately after such adjustment of the Exercise Price. The
Company shall make a public announcement of its election to
adjust the number of Rights pursuant to this Section 11(i),
indicating the record date for the adjustment and, if known at
the time, the amount of the adjustment to be made. Such
record date may be the date on which the Exercise Price is
adjusted or any day thereafter, but, if separate Right
Certificates have been issued, it shall be at least 10 days
after the date of such public announcement. If separate Right
Certificates have been issued, upon each adjustment of the
number of Rights pursuant to this Section 11(i), the Company
shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date
Right Certificates representing, 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, 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 such adjustment, and upon
surrender thereof if required by the Company, new Right
Certificates representing 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 may bear,
at the option of the Company, the adjusted Exercise Price) and
shall be registered in the names of the holders of record of
Right Certificates on the record date specified in the public
announcement.
(j) Irrespective of any adjustment or change in the
Exercise Price or the number of one-hundredths of a Preferred
Share issuable upon the exercise of one Right, the Right
Certificates theretofore and thereafter issued may continue to
express the Exercise Price per one one-hundredth of a
Preferred Share and the number of Preferred Shares issuable
upon the exercise of one Right that were expressed in the
initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Exercise Price below one one-hundredth
of the then par value, if any, of the Preferred Shares
issuable upon exercise of the Rights, the Company shall take
any corporate action that may, in the advice or opinion of its
counsel, be necessary in order that the Company may validly
and legally issue fully paid and nonassessable one one-
hundredths of a Preferred Share at such adjusted Exercise
Price.
(l) In any case in which this Section 11 shall
require that an adjustment in the Exercise Price be made
effective as of a record date for a specified event, the
Company may elect to defer, until the occurrence of such
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event, the issuance to the holder of any Right exercised after
such record date of the number of one-hundredths of a
Preferred Share and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above
the number of one-hundredths of a Preferred Share and other
capital stock or securities of the Company, if any, issuable
upon such exercise on the basis of the Exercise Price in
effect prior to such adjustment; provided, however, that the
Company shall deliver to such holder a due bill or other
appropriate instrument representing 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
further adjustments in the number of one-hundredths of a
Preferred Share that may be purchased upon exercise of one
Right, and such further adjustments in the Exercise Price, in
addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Shares,
(ii) issuance wholly for cash of any Preferred Shares at less
than the Current Market Price thereof, (iii) issuance wholly
for cash of Preferred Shares or securities that by their terms
are convertible into or exchangeable for Preferred Shares,
(iv) dividends on Preferred Shares payable in Preferred Shares
or (v) issuance of rights, options or warrants referred to
Section 11(b) hereof, hereafter made by the Company to holders
of its Preferred Shares shall not be taxable to such
stockholders.
(n) In the event that the Company shall, at any
time after the Close of Business on the Record Date and prior
to the Close of Business on the earliest of the date of the
first Section 11(a)(ii) Event, the date of the first Section
13(a) Event, the Redemption Date or the Expiration Date,
(i) pay any dividend on the Common Shares payable in Common
Shares, (ii) subdivide the outstanding Common Shares,
(iii) combine the outstanding Common Shares into a smaller
number of Common Shares or (iv) issue Common Shares in a
reclassification of the Common Shares (including any such
reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving
corporation), then, and upon each such event, the Exercise
Price to be in effect after such event shall be determined by
multiplying the Exercise Price in effect immediately prior to
such event by a fraction, the numerator of which shall be
equal to the number of Common Shares outstanding immediately
prior to such event and the denominator of which shall be
equal to the number of Common Shares outstanding immediately
after such event. Successive adjustments shall be made
22
<PAGE>
pursuant to this Section 11(n) each time such a dividend is
paid or such a subdivision, combination or reclassification is
effected. If an event occurs that would require an adjustment
under both this Section 11(n) and Section 11(a)(ii) hereof,
the adjustment provided for in this Section 11(n) shall be in
addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
Section 12. Certificate of Adjusted Exercise Price
or Number of Shares Issuable Upon Exercise of Rights.
Whenever an adjustment is made as provided in Section 11
hereof, the Company shall promptly (a) prepare a certificate
setting forth such adjustment and a brief statement of the
facts giving rise to such adjustment, (b) file with the Rights
Agent and with each transfer agent for the securities issuable
upon exercise of the Rights a copy of such certificate and
(c) mail a brief summary thereof to each holder of Rights in
accordance with Section 25 hereof. Notwithstanding the
foregoing sentence, the failure of the Company to make such
certification or to give such notice shall not affect the
validity or the force and effect of such adjustment. Any
adjustment to be made pursuant to Sections 11 or 13 hereof
shall be effective as of the date of the event giving rise to
such adjustment.
Section 13. Consolidation, Merger, or Sale or
Transfer of Assets or Earning Power.
(a) In the event (a "Section 13(a) Event") that, at
any time on or after the 20% Ownership Date and prior to the
earlier of the Redemption Date or the Expiration Date, (1) the
Company shall, directly or indirectly, consolidate with or
merge with and into any other Person and the Company shall not
be the continuing or surviving corporation in such
consolidation or merger, (2) any Person shall, directly or
indirectly, consolidate with or merge with and into the
Company and the Company shall be the continuing or surviving
corporation in 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 Person or
cash or any other property, or (3) the Company and/or any one
or more of its Subsidiaries shall, directly or indirectly,
sell or otherwise transfer, in one or more transactions (other
than transactions in the ordinary course of business), assets
or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons other than the Company or one
or more of its wholly owned Subsidiaries (such Persons,
together with the Persons described in clauses (1) and (2)
above shall be collectively referred to in this Section 13 as
the "Surviving Person"), then, and in each such case, proper
provision shall be made so that:
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(i) except as provided in Section 7(d)
hereof, each holder of a Right shall thereafter have the
right to receive, upon the exercise thereof in accordance
with the terms of this Agreement and payment of the then
current Exercise Price, in lieu of the securities or
other property otherwise purchasable upon such exercise,
such number of validly authorized and issued, fully paid
and nonassessable Common Shares of the Surviving Person
as shall be equal to a fraction, the numerator of which
is the product of the then current Exercise Price
multiplied by the number of one-hundredths of a Preferred
Share purchasable upon the exercise of one Right
immediately prior to the first Section 13(a) Event (or,
if the Distribution Date shall not have occurred prior to
the date of such Section 13(a) Event, the number of one-
hundredths of a Preferred Share that would have been so
purchasable if the Distribution Date had occurred on the
Business Day immediately preceding the date of such
Section 13(a) Event, or, if a Section 11(a)(ii) Event has
occurred prior to such Section 13(a) Event, the product
of the number of one-hundredths of a Preferred Share
purchasable upon the exercise of a Right (or, if the
Distribution Date shall not have occurred prior to the
date of such Section 11(a)(ii) Event, the number of one-
hundredths of a Preferred Share that would have been so
purchasable if the Distribution Date had occurred on the
Business Day immediately preceding the date of such
Section 11(a)(ii) Event) immediately prior to such
Section 11(a)(ii) Event, multiplied by the Exercise Price
in effect immediately prior to such Section 11(a)(ii)
Event), and the denominator of which is 50% of the
Current Market Price per Common Share of the Surviving
Person on the date of consummation of such Section 13(a)
Event;
(ii) the Surviving Person shall thereafter be
liable for and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this
Agreement;
(iii) the term, "Company," shall thereafter be
deemed to refer to the Surviving Person; and
(iv) the Surviving Person 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 ensure that the
provisions hereof shall thereafter be applicable to its
Common Shares thereafter deliverable upon the exercise of
Rights.
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<PAGE>
(b) Notwithstanding the foregoing, if the
Section 13(a) Event is the sale or transfer in one or more
transactions of assets or earning power aggregating more than
50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole), but less than 100% thereof,
then each Person acquiring all or a portion thereof shall
assume the obligations of the Company as to a fraction of each
of the Rights equal to the fraction of the assets of the
Company and its Subsidiaries (taken as a whole) acquired by
such Person, and the obligations of the Company as to the
remaining fraction of each of the Rights shall continue to be
the obligations of the Company.
(c) The Company shall not consummate a
Section 13(a) Event unless prior thereto the Company and the
Surviving Person shall have executed and delivered to the
Rights Agent a supplemental agreement confirming that such
Surviving Person shall, upon consummation of such
Section 13(a) Event, assume this Agreement in accordance with
Section 13 hereof, that all rights of first refusal or
preemptive rights in respect of the issuance of Common Shares
of such Surviving Person upon exercise of outstanding Rights
have been waived and that such Section 13(a) Event shall not
result in a default by such Surviving Person under this
Agreement, and further providing that, as soon as practicable
after the date of consummation of such Section 13(a) Event,
such Surviving Person shall:
(i) prepare and file a registration
statement under the Securities Act with respect to the
Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, use its best efforts
to cause such registration statement to become effective
as soon as practicable after such filing, use its best
efforts to cause such registration statement to remain
effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration
Date, and similarly comply with all applicable state
securities laws;
(ii) use its best efforts to list (or
continue the listing of) the Rights and the Common Shares
of the Surviving Person purchasable upon exercise of the
Rights on a national securities exchange, or use its best
efforts to cause the Rights and such Common Shares to
meet the eligibility requirements for quotation on
NASDAQ; and
(iii) deliver to holders of the Rights
historical financial statements for such Surviving Person
that comply in all respects with the requirements for
25
<PAGE>
registration on Form 10 (or any successor form) under the
Exchange Act.
(d) In the event that at any time after the
occurrence of a Section 11(a)(ii) Event some or all of the
Rights shall not have been exercised pursuant to Section 11
hereof prior to the date of a Section 13(a) Event, such Rights
shall thereafter be exercisable only in the manner described
in Section 13(a) hereof. In the event that a
Section 11(a)(ii) Event occurs on or after the date of a
Section 13(a) Event, Rights shall not be exercisable pursuant
to Section 11 hereof but shall instead be exercisable pursuant
to, and only pursuant to, this Section 13.
(e) The provisions of this Section 13 shall apply
to each successive merger, consolidation, sale or other
transfer constituting a Section 13(a) Event.
Section 14. Fractional Rights and Fractional
Shares.
(a) The Company shall not be required to issue
fractions of Rights or to distribute Right Certificates that
represent fractional Rights. If the Company shall determine
not to issue such fractional Rights, the Company shall pay to
the registered holders of the Right Certificates with respect
to which such fractional Rights would otherwise be issuable,
at the time such fractional Rights would otherwise have been
issued as provided herein, an amount in cash equal to the same
fraction of the Current Market Price of a whole Right on the
Business Day immediately prior to the date upon which such
fractional Rights would otherwise have been issuable.
(b) The Company shall not be required to issue
fractions of Common Shares or Preferred Shares (other than
fractions that are integral multiples of one one-hundredth of
a Preferred Share) upon exercise of Rights, or to distribute
certificates that represent fractional Common Shares or
Preferred Shares (other than fractions that are integral
multiples of one one-hundredth of a Preferred Share).
Fractions of Preferred Shares in integral multiples of one one-
hundredth of a Preferred Share may, at the election of the
Company, be represented 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 Preferred Shares. If the
Company shall determine not to issue fractional Common Shares
or Preferred Shares (or depositary receipts in lieu of
Preferred Shares), the Company shall pay to the registered
holders of Right Certificates with respect to which such
26
<PAGE>
fractional Common Shares or Preferred Shares would otherwise
be issuable, at the time such Rights are exercised as provided
herein, an amount in cash equal to the same fraction of the
Current Market Price of a whole Common Share or Preferred
Share, as the case may be. For purposes of this
Section 14(b), the Current Market Price of a whole Common
Share or Preferred Share shall be the Closing Price per share
for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right, by the acceptance of
such Right, expressly waives such holder's right to receive
any fractional Rights or any fractional Common Shares or
Preferred Shares upon exercise of such Right, except as
permitted by this Section 14.
Section 15. Rights of Action. All rights of action
in respect of this Agreement, except 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 certificates for Common Shares representing Rights, and
any registered holder of any Right Certificate or of such
certificate for Common Shares, without the consent of the
Rights Agent or of the holder of any other Right Certificate
or any other certificate for Common Shares may, in such
holder's own behalf and for such holder's own benefit,
enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise the Rights
represented by such Right Certificate or by such certificate
for Common Shares in the manner provided in such Certificate
and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this
Agreement and shall be entitled to specific performance, and
injunctive relief against actual or threatened violations, of
the obligations of any Person under 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 every other holder
of a Right that:
(a) prior to the Distribution Date, the Rights
shall be represented by certificates for Common Shares
registered in the name of the holders of such Common Shares
(which certificates for Common Shares shall also constitute
Right Certificates), and each such Right shall be transferable
only in connection with the transfer of such Common Shares;
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<PAGE>
(b) after the Distribution Date, the Right
Certificates shall only be transferable on the registry books
of the Rights Agent if surrendered at the principal office of
the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer along with a signature guarantee and
such other and further documentation as the Rights Agent may
reasonably request; and
(c) the Company and the Rights Agent may deem and
treat the person in whose name the Right Certificate is
registered as the absolute owner thereof and of the Rights
represented thereby (notwithstanding any notations of
ownership or writing on the Right Certificate 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 Holder and Right Certificate
Holder Not Deemed a Stockholder. No holder, as such, of any
Right or Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the
securities of the Company that may at any time be issuable
upon 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 or 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, to give or withhold consent to any corporate action,
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, in
each case until such Right or the Rights represented by such
Right Certificate shall have been exercised in accordance with
the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
the compensation agreed to in writing by the Company and the
Rights Agent for all services rendered by it hereunder, as
well as its reasonable out-of-pocket expenses. The Company
also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred
without gross 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, without
limitation, the costs and expenses of defending against any
claim of liability arising under this Agreement.
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<PAGE>
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right
Certificate or certificate for the Preferred Shares or Common
Shares 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 and executed by the proper person or
persons, or otherwise upon the advice of its counsel as set
forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of
Name of Rights Agent.
(a) Any corporation into which the Rights Agent or
any successor Rights Agent may be merged or with which it may
be consolidated, or any corporation resulting from any merger
or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding
to the corporate trust or stock transfer 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 instrument 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. If,
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 if 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 such
Right Certificates, and in this Agreement.
(b) If 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 if at that time any of the Right Certificates shall not
have been countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have
the full force provided in such Right Certificates and in this
Agreement.
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Section 20. Duties of Rights Agent. The Rights
Agent undertakes the duties and obligations expressly imposed
by this Agreement (and no implied duties or obligations shall
be read into this Agreement against the Rights Agent) upon the
following terms and conditions, by all of which the Company
and the holders of Right Certificates, by their acceptance of
the Rights, shall be bound:
(a) The Rights Agent may consult with legal counsel
(who may be legal counsel for the Company), and the advice or
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 advice or 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 Vice Chairman of the
Board, the President, any 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.
(c) The Rights Agent shall be liable hereunder to
the Company and any other Person only for its own gross
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 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 is serving as an
administrative agent and accordingly, shall not be under any
responsibility in respect of the legality or validity of any
of the provisions of this Agreement or the execution and
delivery hereof (except the due authorization, execution and
delivery hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights
30
<PAGE>
(including any Rights becoming null and void pursuant to
Section 7(d) hereof) or any adjustment in the terms of the
Rights (including the manner, method or amount thereof)
provided for in Sections 7, 11, 13 and 23 hereof, or the
ascertaining of the existence of facts that would require any
such change or adjustment (except with respect to the exercise
of Rights represented by Right Certificates after actual
notice that such change or adjustment is required); nor shall
it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any
Preferred Shares or Common Shares or other securities to be
issued pursuant to this Agreement or any Right Certificate, or
as to whether any Preferred Shares or Common Shares or other
securities will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this
Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the
performance of its duties hereunder from any one of the
Chairman of the Board, the Chief Executive Officer, any Vice
President, the Secretary, any Assistant 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 or for any delay in acting while awaiting
instructions.
(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 the Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any
of the rights or powers 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
31
<PAGE>
resulting from any such act, default, neglect or misconduct,
provided that reasonable care was exercised in the selection
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. 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 Preferred Shares 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 as such, 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 such holder's Right
Certificate for inspection by the Company), then the Company
shall become the Rights Agent and 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 the States
of New York or California (or of any other state of the United
States so long as such corporation is authorized to do
business as a banking institution in the States of New York or
California), in good standing, having a principal office in
New York or California, that is authorized under such laws to
exercise corporate trust or stock transfer powers and is
subject to supervision or examination by federal or state
authority and that has at the time of its appointment as
Rights Agent a combined capital and surplus of at least
$50,000,000. 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 of this Agreement and so that the
successor Rights Agent may appropriately act as Rights Agent
hereunder. 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 Preferred Shares, and mail a notice
thereof in writing to the registered holders of the Right
32
<PAGE>
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 Right Certificates to the contrary, the Company may, at
its option (subject to Section 4 hereof), issue new Right
Certificates in such form as may be approved by the Board of
Directors in order to reflect any adjustment or change in the
Exercise Price and the number or kind or class of shares or
other securities or property purchasable upon exercise of the
Rights in accordance with the provisions of this Agreement.
Section 23. Redemption of Rights.
(a) Until the earliest of (i) the date of the first
Section 11(a)(ii) Event, (ii) the date of the first
Section 13(a) Event or (iii) the Expiration Date, the Board of
Directors of the Company may, at its option, authorize and
direct the redemption of all, but not less than all, of the
then outstanding Rights at a redemption price of $.001 per
Right, as such redemption price shall be appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (the "Redemption
Price"), and the Company shall so redeem the Rights; provided,
however, that from and after the first date upon which there
shall exist a 20% Stockholder, any redemption of the Rights
shall require, in addition to the approval of the Board of
Directors of the Company, the approval of a majority of those
directors of the Company who were directors prior to such
date.
(b) Immediately upon the action of the Board of
Directors of the Company authorizing and directing the
redemption of the Rights pursuant to subsection (a) of this
Section 23, or at such time and date thereafter as it may
specify, and without any further action and without any
notice, the right to exercise Rights shall terminate and the
only right thereafter of the holders of Rights shall be to
receive the Redemption Price. Within 10 Business Days after
the date of such action, the Company shall give notice of such
redemption to the holders of Rights by mailing such notice to
all holders of Rights at their last addresses as they appear
upon the registry books of the Rights Agent or, if prior to
the Distribution Date, on the registry books of the transfer
agent for the Common Shares. Any notice that is mailed in the
manner herein provided shall be deemed given, whether or not
the holder receives such notice, but neither the failure to
give any such notice nor any defect therein shall affect the
33
<PAGE>
legality or validity of such redemption. Each such notice of
Predemption 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, directly or indirectly,
redeem, acquire or purchase for value any Rights in any manner
other than that specifically set forth in Section 24 hereof or
in this Section 23, and other than in connection with the
purchase of Common Shares prior to the earlier of the date of
the first Section 11(a)(ii) Event or the date of the first
Section 13(a) Event.
(c) The Company may, at its option, pay the
Redemption Price in cash, Common Shares, Preferred Shares,
other equity securities of the Company, debt securities of the
Company, other property or any combination of the foregoing,
in each case having an aggregate Current Market Price on the
Redemption Date equal to the Redemption Price.
Section 24. Exchange of Rights.
(a) At any time after the 20% Ownership Date and
prior to the first date thereafter upon which a 20%
Stockholder, together with all Affiliates and Associates of
such 20% Stockholder, shall be the Beneficial Owner of 50% or
more of the Voting Shares then outstanding, the Board of
Directors of the Company may, at its option, authorize and
direct the exchange of all, but not less than all, of the then
outstanding Rights for Common Shares at an exchange ratio (the
"Exchange Ratio") per Right, equal to that number of Common
Shares which, as of the date of the Board of Directors'
action, has a Current Market Price equal to the difference
between the Exercise Price and the Current Market Price of the
Common Shares that each holder of a Right would otherwise have
the right to receive upon the exercise of a Right on such
date.
(b) Immediately upon the action of the Board of
Directors of the Company authorizing and directing the
exchange of the Rights pursuant to subsection (a) of this
Section 24, or at such time and date thereafter as it may
specify, and without any further action and without any
notice, the right to exercise Rights shall terminate and the
only right thereafter of the holders of Rights shall be to
receive a number of Common Shares equal to the Exchange Ratio.
Within 10 Business Days after the date of such action, the
Company shall give notice of such exchange to the holders of
Rights by mailing such notice to all holders of Rights at
their last addresses as they appear upon the registry books of
the Rights Agent or, if prior to the Distribution Date, on the
registry books of the transfer agent for the Common Shares.
Any notice that is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives such
34
<PAGE>
notice, but neither the failure to give any such notice nor
any defect therein shall affect the legality or validity of
such exchange. Each such notice of exchange shall state the
method by which the Rights will be exchanged for Common
Shares. Neither the Company nor any of its Affiliates or
Associates may, directly or indirectly, redeem, acquire or
purchase for value any Rights in any manner other than (i) as
specifically set forth in Section 23 hereof, (ii) as
specifically set forth in this Section 24 or (iii) in
connection with the purchase of Common Shares prior to the
earlier of the date of the first Section 11(a)(ii) Event or
the date of the first Section 13(a) Event.
(c) In any exchange pursuant to this Section 24,
the Company, at its option, may substitute (i) cash,
(ii) other equity securities of the Company (including, but
not limited to, Common Share Equivalents), (iii) debt
securities of the Company, (iv) other property or (v) any
combination of the foregoing for the Common Shares
exchangeable for Rights, as appropriately adjusted. Subject
to Section 7(d) hereof, in the event that the Company takes
any action pursuant to this Section 24, such action shall
apply uniformly to all outstanding Rights.
Section 25. Notice of Certain Events.
(a) In the event that the Company shall propose
(i) to declare or pay any dividend payable on or make any
distribution with respect to its Common Shares or Preferred
Shares (other than a regular quarterly cash dividend), (ii) to
offer to the holders of its Common Shares or Preferred Shares
options, rights or warrants to subscribe for or to purchase
any additional shares thereof or shares of stock of any class
or any other securities, rights or options, (iii) to effect
any reclassification of its Common Shares or Preferred Shares
(other than a reclassification involving only the subdivision
of outstanding shares), (iv) to effect any consolidation or
merger with or into, 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 more
than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person or
Persons, or (v) to effect the liquidation, dissolution or
winding up of the Company, then and in each such case, the
Company shall give to each holder of a Right Certificate and
to the Rights Agent, in accordance with Section 26 hereof, a
notice of such proposed action, that shall specify the record
date for the purpose of such dividend or distribution, or the
date upon 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 record of the Common Shares or Preferred Shares, if
35
<PAGE>
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 20 days prior to the record date for
determining holders of the Common Shares or Preferred Shares
for purposes of such action, and in the case of any such other
action, at least 20 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 or Preferred Shares,
whichever date shall be the earlier. The failure to give the
notice required by this Section 25 or any defect therein shall
not affect the legality or validity of the action taken by the
Company or the vote upon any such action.
(b) Upon the occurrence of each Section 11(a)(ii)
Event and each Section 13(a) Event, the Company shall as soon
as practicable thereafter give to each holder of a Right
Certificate and to the Rights Agent, in accordance with
Section 26 hereof, a notice of the occurrence of such event,
specifying the event and the consequences of the event to
holders of Rights under Sections 11 and 13 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:
Foodmaker, Inc.
9330 Balboa Avenue
San Diego, California 92123
Attention: Secretary
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) to the
principal office of the Rights Agent as follows:
Wells Fargo Bank, N. A.
Stock Transfer Administration
707 Wilshire Boulevard
Los Angeles, California 90017
Attention: Joe Cannata, 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
36
<PAGE>
to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. Supplements and Amendments.
(a) The Board of Directors of the Company may, from
time to time, before and after the Distribution Date, without
the approval of any holders of Rights, supplement or amend any
provision of this Agreement in any manner, whether or not such
supplement or amendment is adverse to any holder of Rights,
and direct the Rights Agent so to supplement or amend such
provision, and the Rights Agent shall so supplement or amend
such provision; provided, however, that from and after the
earliest of (i) the date of the first Section 11(a)(ii) Event,
(ii) the date of the first Section 13(a) Event, (iii) the
Redemption Date or (iv) the Expiration Date, this Agreement
shall not be supplemented or amended in any manner that would
materially and adversely affect any holder of outstanding
Rights other than a 20% Stockholder or a Surviving Person; and
provided further, however, that from and after the first date
upon which there shall exist a 20% Stockholder, this Agreement
shall not be supplemented or amended in any manner without the
approval of a majority of those directors of the Company who
were directors prior to such date.
(b) From and after the earlier of the date of the
first Section 11(a)(ii) Event or the date of the first Section
13(a) Event and prior to the earlier of the Redemption Date or
the Expiration Date, the Company shall not effect any
amendment to the Certificate of Designations for the Preferred
Shares that would materially and adversely affect the rights,
privileges or preferences of the Preferred Shares without the
prior approval of the holders of two-thirds or more of the
then outstanding Rights.
Section 28. Certain Covenants. Subject to
Section 27 hereof and the other provisions of this Agreement,
from and after the earlier of the date of the first
Section 11(a)(ii) Event or the date of the first Section 13(a)
Event and prior to the earlier of the Redemption Date or the
Expiration Date, the Company shall not (a) issue or sell, or
permit any Subsidiary to issue or sell, to a 20% Stockholder
or a Surviving Person, or any Affiliate or Associate of a 20%
Stockholder or a Surviving Person, or any Person holding
Voting Shares of the Company that are Beneficially Owned by a
20% Stockholder or a Surviving Person, (i) any rights,
options, warrants or convertible securities on terms similar
to, or that materially adversely affect the value of, the
Rights or (ii) Preferred Shares, Common Shares or shares of
any other class of capital stock, if such sale is intended to
or would materially adversely affect the value of the Rights,
37
<PAGE>
or (b) take any other action that is intended to or would
materially adversely affect the value of the Rights.
Section 29. 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 30. Benefits of this Agreement. Nothing in
this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent, the registered holders of
the Right Certificates (other than those representing Rights
that have become null and void) and the certificates for
Common Shares representing Rights (other than those Rights
that have become null and void) any legal or equitable right,
remedy or claim under this Agreement, and this Agreement shall
be for the sole and exclusive benefit of the Company, the
Rights Agent, such registered holders of Right Certificates
and such certificates for Common Shares representing Rights.
Section 31. Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court
of competent jurisdiction or other authority to be invalid,
void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected,
impaired or invalidated.
Section 32. 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 made and
performed entirely within such state; provided, however that
with respect solely to matters regarding the rights and
obligations of the Rights Agent hereunder, the laws of the
State of California shall govern.
Section 33. Counterparts. This Agreement may be
executed in any number of counterparts and each such
counterpart shall for all purposes be deemed to be an original
and all such counterparts shall together constitute but one
and the same instrument.
Section 34. Descriptive Headings. Descriptive
headings of the several sections of this Agreement are
inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
38
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the day and year
first above written.
FOODMAKER, INC.
By:WILLIAM E. RULON
-----------------------------
William E. Rulon
Senior Vice President and
Secretary
WELLS FARGO BANK, N. A.
as Rights Agent
By:RONALD LUG
-----------------------------
Name: Ronald Lug
Title: Vice President
39
<PAGE>
EXHIBIT A
---------
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING
CUMULATIVE PREFERRED STOCK
$.01 Par Value
of
FOODMAKER, INC.
Pursuant to Section 151 of the
General Corporation
Law of the State of Delaware
We, Charles W. Duddles, Executive Vice President and
Chief Financial Officer, and William E. Rulon, Senior Vice
President and Secretary, of Foodmaker, Inc., a corporation
organized and existing under the General Corporation Law of
the State of Delaware, in accordance with the provisions of
Section 103 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the
Board of Directors by the Restated Certificate of
Incorporation of the Corporation, the Board of Directors on
July 26, 1996, adopted the following resolution creating a
series of 750,000 (seven hundred and fifty thousand) shares of
Preferred Stock, par value $0.01 per share, designated as
Series A Junior Participating Cumulative Preferred Stock:
RESOLVED, that pursuant to the authority vested in
the Board of Directors of this Corporation in accordance with
the provisions of its Restated Certificate of Incorporation, a
series of Preferred Stock of the Corporation be, and it hereby
is, created, and that the designation and amount thereof and
the voting powers, preferences and relative, participating,
optional and other special rights of the shares of such
series, and the qualifications, limitations or restrictions
thereof, are as follows:
Section 1. Designation and Amount. The shares of
such series shall be designated as Series A Junior
<PAGE>
Participating Cumulative Preferred Stock, par value $0.01 per
share (the "Series A Preferred Stock"), and the number of
shares constituting such series shall be 750,000 (seven
hundred and fifty thousand).
Section 2. Dividends and Distributions.
(a) The holders of shares of Series A Preferred
Stock, in preference to the holders of shares of Common Stock,
par value $.01 per share, of the Corporation (the "Common
Stock") and of any other junior stock of the Corporation that
may be outstanding, 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 tenth day of January, April, July and October 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
per share (rounded to the nearest cent) equal to the greater
of (i) $.25 per share ($1.00 per annum), or (ii) subject to
the provision for adjustment hereinafter set forth, 100 times
the aggregate per share amount of all cash dividends, and 100
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, 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 that the Corporation
shall at any time declare or pay any dividend on 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) into a greater
or lesser number of shares of Common Stock, then and in each
such event, the amount to which the holder of each share of
Series A Preferred Stock was entitled immediately prior to
such event under clause (ii) of 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 or
distribution on the Series A Preferred Stock as provided in
paragraph (a) of this Section 2 immediately after it declares
a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided,
however, that in the event no dividend or distribution shall
2
<PAGE>
have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $.25
per share ($1.00 per annum) on the Series A Preferred Stock
shall nevertheless be payable on such subsequent Quarterly
Dividend Payment Date.
(c) Dividends 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 of Series A Preferred Stock,
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 cases such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall cumulate but 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) Each share of Series A Preferred Stock shall
entitle the holder thereof to 100 votes (and each one one-
hundredth of a share of Series A Preferred Stock shall entitle
the holder thereof to one vote) on all matters submitted to a
vote of the stockholders of the Corporation. In the event
that the Corporation shall at any time declare or pay any
dividend on 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 and in each such event, 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
3
<PAGE>
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 in the Restated
Certificate of Incorporation of the Corporation or herein or
by law, the holders of shares of Series A Preferred Stock and
the holders of shares of Common Stock shall vote together as
one class on all matters submitted to a vote of stockholders
of the Corporation.
(c) In addition, the holders of shares of Series A
Preferred Stock shall have the following special voting
rights:
(i) In the event that at any time dividends
on Series A Preferred Stock, whenever accrued and whether
or not consecutive, shall not have been paid or declared
and a sum sufficient for the payment thereof set aside,
in an amount equivalent to six quarterly dividends on all
shares of Series A Preferred Stock at the time
outstanding, then and in each such event, the holders of
shares of Series A Preferred Stock and each other series
of preferred stock now or hereafter issued that shall be
accorded such class voting right by the Board of
Directors and that shall have the right to elect one
director (or, in the event any such other series is
entitled to a greater number of directors, such number of
directors, which shall be cumulative with and not in
addition to the director provided for herein, such
director or directors being hereinafter referred to as
"Special Directors") as the result of a prior or
subsequent default in payment of dividends on such series
(each such other series being hereinafter called "Other
Series of Preferred Stock"), voting separately as a class
without regard to series, shall be entitled to elect the
Special Director at the next annual meeting of
stockholders of the Corporation, in addition to the
directors to be elected by the holders of all shares of
the Corporation entitled to vote for the election of
directors, and the holders of all shares (including the
Series A Preferred Stock) otherwise entitled to vote for
directors, voting separately as a class, shall be
entitled to elect the remaining members of the Board of
Directors, provided that the Series A Preferred Stock and
each Other Series of Preferred Stock, voting as a class,
shall not have the right to elect more than one Special
Director (in addition to any Special Director to which
the holders of any Other Series of Preferred Stock are
then entitled). Such special voting right of the holders
of shares of Series A Preferred Stock may be exercised
4
<PAGE>
until all dividends in default on the Series A Preferred
Stock shall have been paid in full or declared and funds
sufficient therefor set aside, and when so paid or
provided for, such special voting right of the holders of
shares of Series A Preferred Stock shall cease, but
subject always to the same provisions for the vesting of
such special voting rights in the event of any such
future dividend default or defaults.
(ii) At any time after such special voting
rights shall have so vested in the holders of shares of
Series A Preferred Stock, the Secretary of the
Corporation may, and upon the written request of the
holders of record of 10% or more in number of the shares
of Series A Preferred Stock and each Other Series of
Preferred Stock then outstanding addressed to the
Secretary at the principal executive office of the
Corporation shall, call a special meeting of the holders
of shares of Preferred Stock so entitled to vote, for the
election of the Special Directors to be elected by them
as herein provided, to be held within 60 days after such
call and at the place and upon the notice provided by law
and in the By laws for the holding of meetings of
stockholders; provided, however, that the Secretary shall
not be required to call such special meeting in the case
of any such request received less than 90 days before the
date fixed for any annual meeting of stockholders, and if
in such case such special meeting is not called or held,
the holders of shares of Preferred Stock so entitled to
vote shall be entitled to exercise the special voting
rights provided in this paragraph at such annual meeting.
If any such special meeting required to be called as
above provided shall not be called by the Secretary
within 30 days after receipt of any such request, then
the holders of record of 10% or more in number of the
shares of Series A Preferred Stock and each Other Series
of Preferred Stock then outstanding may designate in
writing one of their number to call such meeting, and the
person so designated may, at the expense of the
Corporation, call such meeting to be held at the place
and upon the notice given by such person, and for that
sole purpose shall have access to the stock books of the
Corporation. No such special meeting and no adjournment
thereof shall be held on a date later than 60 days before
the annual meeting of stockholders. If, at any meeting
so called or at any annual meeting held while the holders
of shares of Series A Preferred Stock have the special
voting rights provided for in this paragraph, the holders
of not less than 40% of the aggregate voting power of
Series A Preferred Stock and each Other Series of
Preferred Stock then outstanding are present in person or
by proxy, which percentage shall be sufficient to
5
<PAGE>
constitute a quorum for the election of additional
directors as herein provided, the then authorized number
of directors of the Corporation shall be increased by the
number of Special Directors to be elected, as of the time
of such special meeting or the time of the first such
annual meeting held while such holders have special
voting rights and such quorum is present, and the holders
of shares of Series A Preferred Stock and each Other
Series of Preferred Stock, voting as a class, shall be
entitled to elect the Special Director or Directors so
provided for. If the directors of the Corporation are
then divided into classes under provisions of the
Restated Certificate of Incorporation of the Corporation
or the Bylaws, the Special Director or Directors shall
belong to each class of directors in which a vacancy is
created as a result of such increase in the authorized
number of directors. If the foregoing expansion of the
size of the Board of Directors shall not be valid under
applicable law, then the holders of shares of Series A
Preferred Stock and of each Other Series of Preferred
Stock, voting as a class, shall be entitled, at the
meeting of stockholders at which they would otherwise
have voted, to elect a Special Director or Directors to
fill any then existing vacancies on the Board of
Directors, and shall additionally be entitled, at such
meeting and each subsequent meeting of stockholders at
which directors are elected, to elect all of the
directors then being elected until by such class vote the
appropriate number of Special Directors has been so
elected.
(iii) Upon the election at such meeting by the
holders of shares of Series A Preferred Stock and each
Other Series of Preferred Stock, voting as a class, of
the Special Director or Directors they are entitled so to
elect, the persons so elected, together with such persons
as may be directors or as may have been elected as
directors by the holders of all shares (including
Series A Preferred Stock) otherwise entitled to vote for
directors, shall constitute the duly elected directors of
the Corporation. Each Special Director so elected by
holders of shares of Series A Preferred Stock and each
Other Series of Preferred Stock, voting as a class, shall
serve until the next annual meeting or until their
respective successors shall be elected and qualified, or
if any such Special Director is a member of a class of
directors under provisions dividing the directors into
classes, each such Special Director shall serve until the
annual meeting at which the term of office of such
Special Director's class shall expire or until such
Special Director's successor shall be elected and shall
qualify, and at each subsequent meeting of stockholders
6
<PAGE>
at which the directorship of any Special Director is up
for election, said special class voting rights shall
apply in the reelection of such Special Director or in
the election of such Special Director's successor;
provided, however, that whenever the holders of shares of
Series A Preferred Stock and each Other Series of
Preferred Stock shall be divested of the special rights
to elect one or more Special Directors as above provided,
the terms of office of all persons elected as Special
Directors, or elected to fill any vacancies resulting
from the death, resignation, or removal of Special
Directors shall forthwith terminate (and the number of
directors shall be reduced accordingly).
(iv) If, at any time after a special meeting
of stockholders or an annual meeting of stockholders at
which the holders of shares of Series A Preferred Stock
and each Other Series of Preferred Stock, voting as a
class, have elected one or more Special Directors as
provided above, and while the holders of shares of
Series A Preferred Stock and each Other Series of
Preferred Stock shall be entitled so to elect one or more
Special Directors, the number of Special Directors who
have been so elected (or who by reason of one or more
resignations, deaths or removals have succeeded any
Special Directors so elected) shall by reason of
resignation, death or removal be reduced the vacancy in
the Special Directors may be filled by any one or more
remaining Special Director or Special Directors. In the
event that such election shall not occur within 30 days
after such vacancy arises, or in the event that there
shall not be incumbent at least one Special Director, the
Secretary of the Corporation may, and upon the written
request of the holders of record of 10% or more in number
of the shares of Series A Preferred Stock and each Other
Series of Preferred Stock then outstanding addressed to
the Secretary at the principal office of the Corporation
shall, call a special meeting of the holders of shares of
Series A Preferred Stock and each Other Series of
Preferred Stock so entitled to vote, for an election to
fill such vacancy or vacancies, to be held within 60 days
after such call and at the place and upon the notice
provided by law and in the Bylaws for the holding of
meetings of stockholders; provided, however, that the
Secretary shall not be required to call such special
meeting in the case of any such request received less
than 90 days before the date fixed for any annual meeting
of stockholders, and if in such case such special meeting
is not called, the holders of shares of Preferred Stock
so entitled to vote shall be entitled to fill such
vacancy or vacancies at such annual meeting. If any such
special meeting required to be called as above provided
7
<PAGE>
shall not be called by the Secretary within 30 days after
receipt of any such request, then the holders of record
of 10% or more in number of the shares of Series A
Preferred Stock and each Other Series of Preferred Stock
then outstanding may designate in writing one of their
number to call such meeting, and the person so designated
may, at the expense of the Corporation, call such meeting
to be held at the place and upon the notice above
provided, and for that purpose shall have access to the
stock books of the Corporation; no such special meeting
and no adjournment thereof shall be held on a date later
than 60 days before the annual meeting of stockholders.
(d) Nothing herein shall prevent the directors or
stockholders from taking any action to increase the number of
authorized shares of Series A Preferred Stock, or increasing
the number of authorized shares of Preferred Stock of the same
class as the Series A Preferred Stock or the number of
authorized shares of Common Stock, or changing the par value
of the Common Stock or Preferred Stock, or issuing options,
warrants or rights to any class of stock of the Corporation as
authorized by the Restated Certificate of Incorporation of the
Corporation, as it may hereafter be amended.
(e) Except as set forth herein, holders of shares
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 as set forth in the Restated
Certificate of Incorporation of the Corporation or herein or
by law) for taking any corporate action.
Section 4. Certain Restrictions.
(a) Whenever any dividends or other distributions
payable on the Series A Preferred Stock as provided in
Section 2 hereof 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,
directly or indirectly:
(i) declare or pay dividends on, or make any
other distributions with respect to, 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 on, or make any
other distributions with respect to, 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 shares
8
<PAGE>
of 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;
(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) with 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 (either as to dividends or
upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(iv) purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or
any shares of stock ranking on a parity with the Series A
Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective
series and classes, shall determine in good faith will
result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for
consideration, directly or indirectly, 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
cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but
unissued shares of preferred stock, without designation as to
series, and may be reissued as part of any series of preferred
stock created by resolution or resolutions of the Board of
Directors (including Series A Preferred Stock), subject to the
conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made to:
9
<PAGE>
(a) the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock
shall have received the greater of (i) $1.00 per share ($.001
per one one-hundredth of a share), plus an amount equal to
accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, or
(ii) an aggregate amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of
shares of Common Stock; or
(b) the holders of 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 distributions made ratably on the Series A Preferred
Stock and all other such parity stock in proportion to the
total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up.
In the event that the Corporation shall at any time
declare or pay any dividend on 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) into a greater or lesser number
of shares of Common Stock, then and in each such event, the
aggregate amount to which the holder of each share of Series A
Preferred Stock was entitled immediately prior to such event
under the proviso in clause (a) of 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 the
event that 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, or otherwise
changed, then and in each such event, the shares of Series A
Preferred Stock shall at the same time be similarly exchanged
or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 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 that the Corporation shall at any time declare or
pay any dividend on 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
10
<PAGE>
or otherwise) into a greater or lesser number of shares of
Common Stock, then and in each such event, 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. No Redemption. The shares of Series A
Preferred Stock shall not be redeemable. Notwithstanding the
foregoing, the Corporation may acquire shares of Series A
Preferred Stock in any other manner permitted by law, the
Restated Certificate of Incorporation of the Corporation or
herein.
Section 9. Rank. Unless otherwise provided in the
Restated Certificate of Incorporation of the Corporation or a
Certificate of Designations relating to a subsequent series of
preferred stock of the Corporation, the Series A Preferred
Stock shall rank junior to all other series of the
Corporation's preferred stock as to the payment of dividends
and the distribution of assets on liquidation, dissolution or
winding up, and senior to the Common Stock of the Corporation.
Section 10. Amendment. The Restated Certificate of
Incorporation of the Corporation shall not be amended in any
manner that would materially and adversely alter or change the
powers, preferences or special rights of the Series A
Preferred Stock 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 series.
Section 11. Fractional Shares. Series A Preferred
Stock may be issued in fractions of a share (in one one-
hundredths (1/100) of a share and integral multiples thereof)
that shall entitle the holder thereof, in proportion to such
holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and have the benefit
of all other rights of holders of shares of Series A Preferred
Stock.
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<PAGE>
IN WITNESS WHEREOF, we have executed and subscribed
this Certificate and do affirm the foregoing as true under the
penalties of perjury this ____ day of August, 1996.
CHARLES W. DUDDLES
------------------------------
Charles W. Duddles
Executive Vice President and
Chief Financial Officer
Attest:
WILLIAM E. RULON
- ---------------------------------------
William E. Rulon
Senior Vice President and Secretary
12
<PAGE>
Exhibit B
FORM OF
RIGHT CERTIFICATE
Certificate No. R-___________ Rights
NOT EXERCISABLE AFTER _______________, OR
EARLIER IF REDEEMED OR EXCHANGED. THE RIGHTS
ARE SUBJECT TO EXPIRATION, REDEMPTION AND
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES
SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS
BENEFICIALLY OWNED BY CERTAIN PERSONS OR ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID.
Right Certificate
FOODMAKER, 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 and conditions of a Rights
Agreement (the "Rights Agreement") dated as of July 26, 1996,
by and between Foodmaker, Inc., a Delaware corporation (the
"Company"), and Wells Fargo Bank, N. A.(the "Rights Agent"),
to purchase from the Company at any time prior to the earlier
of the Redemption Date (as such term is defined in the Rights
Agreement) or 5:00 o'clock p.m., Los Angeles time, on the
Expiration Date (July 26, 2006, unless the Distribution Date
(as defined in the Rights Agreement) shall have occurred on or
prior to such date and the Rights shall have separated from
the Common Shares, in which case the Expiration Date is the
date that is the tenth anniversary of the Distribution Date),
at the office or agency of the Rights Agent at_______________,
or at the office of its successor as Rights Agent, one one-
hundredth of a fully paid and nonassessable share of Series A
Junior Participating Cumulative Preferred Stock, par value
$0.01 per share, of the Company (a "Preferred Share") or, in
certain circumstances, other securities or other property, at
a purchase price of $40.00 (forty dollars) per one one-
hundredth of a Preferred Share (the "Exercise Price"), upon
presentation and surrender of this Right Certificate with the
Form of Election to Purchase, including Certificate, on the
reverse side hereof completed and duly executed, with
signature guaranteed.
<PAGE>
The number of Rights represented by this Right
Certificate and the Exercise Price set forth above are the
number of Rights and the Exercise Price as of July 26, 1996,
based upon the Preferred Shares as constituted on such date.
As provided in the Rights Agreement, the Exercise Price and
the number of Preferred Shares or other securities or other
property that may be purchased upon the exercise of the Rights
represented by this Right Certificate are subject to
modification and adjustment upon the occurrence of certain
events.
The Rights Agreement contains a full description of
the rights, limitations of rights, obligations, duties and
immunities of the Rights Agent, the Company and the holders of
Right Certificates. This Right Certificate is subject to all
the terms and conditions of the Rights Agreement, which terms
and conditions are hereby incorporated herein by reference and
made a part hereof. Copies of the Rights Agreement are on
file at the principal executive offices of the Company and the
above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon presentation and surrender at the above-
mentioned offices of the Rights Agent, with the Form of
Assignment, including Certificate, on the reverse side hereof
completed and duly executed, with signature guaranteed, may be
exchanged for another Right Certificate or Right Certificates
of like tenor and date representing Rights entitling the
holder thereof to purchase a like aggregate number of
Preferred Shares or, in certain circumstances, other
securities or other property, as the Rights represented 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 the surrender hereof with the Form of Election
to Purchase, including Certificate, on the reverse side hereof
completed and duly executed, with signature guaranteed,
another Right Certificate or Right Certificates for the number
of whole Rights not exercised. Subject to the provisions of
the Rights Agreement, the Rights represented by this Right
Certificate may be redeemed by the Company, at its option, at
a redemption price of $.001 per Right or, upon the occurrence
of certain events, the Company, at its option, may exchange
such Rights for fully paid and nonassessable shares of Common
Stock, par value $.01 per share, of the Company at an exchange
ratio, per Right, of that number of Common Shares (as defined
in the Rights Agreement) which, as of the date of the Board of
Directors' action, has a Current Market Price (as defined in
the Rights Agreement) equal to the difference between the
Exercise Price and the Current Market Price of the Common
Shares which each holder of a Right would have a right to
receive upon the exercise of a Right on such date.
2
<PAGE>
No fractional securities shall be issued upon the
exercise of any Right or Rights represented hereby (other than
fractions of Preferred Shares that are integral multiples of
one one-hundredth of a Preferred Share, that may, at the
option of the Company, be represented by depository receipts),
but in lieu thereof, a cash payment shall be made, as provided
in the Rights Agreement.
No holder of this Right Certificate, as such, shall
be entitled to vote or receive dividends or be deemed for any
purpose the holder of the Preferred Shares or other securities
of the Company that may at any time be issuable on the
exercise hereof, nor shall anything contained 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, until the Right or Rights
represented 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
_______________________, ____.
Attest: FOODMAKER, INC.
By________________________ By__________________________
Name: Name:
Title: Title:
Countersigned:
WELLS FARGO BANK, N. A.
By________________________
Name:
Title:
3
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer any or all of the Rights
represented by this Right Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto ___________________________________
______________________________________________________________
(Name, address and social security or other
identifying number of transferee)
___________________________________________ (_____________) of
the Rights represented by this Right Certificate, together
with all right, title and interest in and to said Rights, and
hereby irrevocably constitutes and appoints __________________
attorney to transfer said Rights on the books of
Foodmaker, Inc. with full power of substitution.
Dated: _________________, ____ ________________________
(Signature)
Signature Guaranteed:
4
<PAGE>
Form of Reverse Side of Right Certificate
(continued)
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such
holder desires to exercise any or all of the Rights
represented by this Right Certificate)
To Foodmaker, Inc.:
The undersigned hereby irrevocably elects to
exercise ___________________________ (_____________) of the
Rights represented by this Right Certificate to purchase the
following:
(Check one of the following boxes)
/ / the Preferred Shares or other securities or property
issuable upon the exercise of said number of Rights
pursuant to Section 7(c) of the Rights Agreement.
/ / the shares of the Common Stock, par value $.01 per
share, of the Company, or other securities or
property issuable upon the exercise of said number
of Rights pursuant to Section 11(a)(ii) of the
Rights Agreement.
/ / the securities issuable upon the exercise of said
number of Rights pursuant to Section 13(a) of the
Rights Agreement.
The undersigned hereby requests that any such
property and a certificate for any such securities be issued
in the name of and delivered to:
______________________________________________________________
(Name, address and social security or other
identifying number of issuee)
5
<PAGE>
The undersigned hereby further requests that if said
number of Rights shall not be all the Rights represented by
this Right Certificate, a new Right Certificate for the
remaining balance of such Rights be issued in the name of and
delivered to:
______________________________________________________________
(Name, address and social security or other
identifying number of issuee)
Dated:________________, ____ ______________________________
(Signature)
Signature Guaranteed:
6
<PAGE>
Form of Reverse Side of Right Certificate
(continued)
Certificate
(to be completed, if true)
The undersigned hereby certifies that the Rights
represented by this Right Certificate are not Beneficially
Owned by a 20% Stockholder or an Affiliate or Associate of a
20% Stockholder (as such capitalized terms are defined in the
Rights Agreement).
Dated:________________, ____ ______________________________
(Signature)
Signature Guaranteed:
NOTICE
The signatures to the foregoing Assignment and the
foregoing Certificate, if applicable, must correspond to the
name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any
change whatsoever, and 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.
In the event that the foregoing Certificate is not
duly executed, with signature guaranteed, the Company may deem
the Rights represented by this Right Certificate to be
Beneficially Owned by a 20% Stockholder or an Affiliate or
Associate of a 20% Stockholder (as such capitalized terms are
defined in the Rights Agreement), and not issue any property
or certificate for securities upon the exercise of this Right
Certificate or issue any new Right Certificate for any
remaining balance of unexercised Rights represented by this
Right Certificate.
7
<PAGE>
EXHIBIT C
FORM OF
SUMMARY OF THE RIGHTS
On July 26, 1996, the Board of Directors of Foodmaker,
Inc. (the "Company") authorized and declared a dividend of one
preferred stock purchase right (a "Right") for each share of
common stock, par value $.01 per share, of the Company (the
"Common Shares"). The dividend is payable on August 15, 1996
(the "Record Date") to the holders of record of Common Shares as
of the close of business on such date.
The following is a brief description of the Rights. It
is intended to provide a general description only and is subject
to the detailed terms and conditions of a Rights Agreement (the
"Rights Agreement") dated as of July 26, 1996 by and between the
Company and Wells Fargo Bank, N. A., as Rights Agent (the "Rights
Agent).
1. Common Share Certificates Representing Rights
Until the Distribution Date (as defined in Section 2
below), (a) the Rights shall not be exercisable, (b) the Rights
shall be attached to and trade only together with the Common
Shares and (c) the stock certificates representing Common Shares
shall also represent the Rights attached to such Common Shares.
Common Share certificates issued after the Record Date and prior
to the Distribution Date shall contain a notation incorporating
the Rights Agreement by reference.
2. Distribution Date
The "Distribution Date" is the earliest of (a) the
tenth business day following the date of the first public
announcement that any person (other than the Company or certain
related entities, and with certain additional exceptions) has
become the beneficial owner of 20% or more of the then
outstanding Common Shares (such person is a "20% Stockholder" and
the date of such public announcement is the "20% Ownership
Date"), (b) the tenth business day (or such later day as shall be
designated by the Board of Directors) following the date of the
commencement of, or the announcement of an intention to make, a
tender offer or exchange offer, the consummation of which would
cause any person to become a 20% Stockholder or (c) the first
date, on or after the 20% Ownership Date, upon which the Company
is acquired in a merger or other business combination in which
the Company is not the surviving corporation or in which the
outstanding Common Shares are changed into or exchanged for stock
or assets of another person, or upon which 50% or more of the
Company's consolidated assets or earning power are sold (other
than in transactions in the ordinary course of business). In
calculating the percentage of outstanding Common Shares that are
<PAGE>
beneficially owned by any person, such person shall be deemed to
beneficially own any Common Shares issuable upon the exercise,
exchange or conversion of any options, warrants or other
securities beneficially owned by such person; provided, however,
that such Common Shares issuable upon such exercise shall not be
deemed outstanding for the purpose of calculating the percentage
of Common Shares that are beneficially owned by any other person.
Notwithstanding the foregoing, if any person is the beneficial
owner of at least 20% of the outstanding Common Shares as a
result of any increase in the number of Common Shares issuable
upon the exercise, exchange or conversion of outstanding
securities, or any decrease in the number of outstanding Common
Shares resulting from any stock repurchase plan or self tender
offer of the Company, then such person shall not be deemed a "20%
Stockholder" until such person thereafter acquires beneficial
ownership of, in the aggregate, a number of additional Common
Shares equal to 1% or more of the then outstanding Common Shares.
No person who was the beneficial owner of 20% or more
of the outstanding Common Shares on July 26, 1996, shall be
deemed a 20% Stockholder for purposes of the Rights unless and
until such person shall have acquired beneficial ownership of
additional Common Shares amounting to 1% or more of the total
Common Shares outstanding. However, if such person sold its
shares, the acquisition by the purchaser would trigger the Rights
if the purchaser would thereby acquire 20% or more of the Common
Shares.
Upon the close of business of the Distribution Date,
the Rights shall separate from the Common Shares, Right
certificates shall be issued, and the Rights shall become
exercisable to purchase Preferred Shares as described in
Section 5 below.
3. Issuance of Right Certificates
As soon as practicable following the Distribution Date,
separate certificates representing only Rights shall be mailed to
the holders of record of Common Shares as of the close of
business on the Distribution Date, and such separate Right
certificates alone shall represent such Rights from and after the
Distribution Date.
4. Expiration of Rights
The Rights shall expire on July 26, 2006, unless
earlier redeemed or exchanged, unless the Distribution Date has
previously occurred and the Rights have separated from the Common
Shares, in which case the Rights will remain outstanding for ten
years.
2
<PAGE>
5. Exercise of Rights
Unless the Rights have expired or been redeemed or
exchanged, they may be exercised, at the option of the holders,
pursuant to paragraphs (a), (b) or (c) below. No Right may be
exercised more than once or pursuant to more than one of such
paragraphs. From and after the first event of the type described
in paragraphs (b) or (c) below, each Right that is beneficially
owned by a 20% Stockholder or that was attached to a Common Share
that is subject to an option beneficially owned by a 20%
Stockholder shall be void.
(a) Right to Purchase Preferred Shares. From and
after the close of business on the Distribution Date, each Right
(other than a Right that has become void) shall be exercisable to
purchase one one-hundredth of a share of Series A Junior
Participating Cumulative Preferred Stock, par value $.01 per
share, of the Company (the "Preferred Shares"), at an exercise
price of $40.00 (forty dollars) (the "Exercise Price"). Prior to
the Distribution Date, the Company may substitute for all or any
portion of the Preferred Shares that would otherwise be issuable
upon exercise of the Rights, cash, assets or other securities
having the same aggregate value as such Preferred Shares. The
Preferred Shares are nonredeemable and, unless otherwise provided
in connection with the creation of a subsequent series of
preferred stock, are subordinate to any other series of the
Company's preferred stock whether issue before or after the
issuance of the Preferred Shares. The Preferred Shares may not
be issued except upon exercise of Rights. The holder of a
Preferred Share is entitled to receive when, as and if declared,
the greater of (i) cash and non-cash dividends in an amount equal
to 100 times the dividends declared on each Common Share or (ii)
a preferential annual dividend of $1.00 per Preferred Share ($.01
per one one-hundredth of a Preferred Share). In the event of
liquidation, the holders of Preferred Shares shall be entitled to
receive a liquidation payment in an amount equal to the greater
of (1) $1.00 per Preferred Share ($.01 per one one-hundredth of a
Preferred Share), plus all accrued and unpaid dividends and
distributions on the Preferred Shares, or (2) an amount equal to
100 times the aggregate amount to be distributed per Common
Share. Each Preferred Share has 100 votes, voting together with
the Common Shares. In the event of any merger, consolidation or
other transaction in which Common Shares are exchanged, the
holder of a Preferred Share shall be entitled to receive 100
times the amount received per Common Share. The rights of the
Preferred Shares as to dividends, voting and liquidation
preferences are protected by antidilution provisions. It is
anticipated that the value of one one-hundredth of a Preferred
Share should approximate the value of one Common Share.
(b) Right to Purchase Common Shares of the Company.
From and after the close of business on the tenth business day
following the 20% Ownership Date, each Right (other than a Right
that has become void) shall be exercisable to purchase, at the
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Exercise Price (initially $40), Common Shares with a market value
equal to two times the Exercise Price. If the Company does not
have sufficient Common Shares available for all Rights to be
exercised, the Company shall substitute for all or any portion of
the Common Shares that would otherwise be issuable upon the
exercise of the Rights, cash, assets or other securities having
the same aggregate value as such Common Shares.
(c) Right to Purchase Common Stock of a Successor
Corporation. If, on or after the 20% Ownership Date,
(i) the Company is acquired in a merger or other business
combination in which the Company is not the surviving
corporation, (ii) the Company is the surviving corporation in a
merger or other business combination in which all or part of the outstanding
Common Shares are changed into or exchanged for stock or assets
of another person or (iii) 50% or more of the Company's
consolidated assets or earning power are sold (other than in
transactions in the ordinary course of business), then each Right
(other than a Right that has become void) shall thereafter be
exercisable to purchase, at the Exercise Price (initially $40),
shares of common stock of the surviving corporation or purchaser,
respectively, with an aggregate market value equal to two times
the Exercise Price.
6. Adjustments to Prevent Dilution
The Exercise Price, the number of outstanding Rights
and the number of Preferred Shares or Common Shares issuable upon
exercise of the Rights are subject to adjustment from time to
time as set forth in the Rights Agreement in order to prevent
dilution. With certain exceptions, no adjustment in the Exercise
Price shall be required until cumulative adjustments require an
adjustment of at least 1%.
7. Cash Paid Instead of Issuing Fractional Securities
No fractional securities shall be issued upon exercise
of a Right (other than fractions of Preferred Shares that are
integral multiples of one one-hundredth of a Preferred Share and
that may, at the election of the Company, be evidenced by
depositary receipts) and in lieu thereof, an adjustment in cash
shall be made based on the market price of such securities on the
last trading date prior to the date of exercise.
8. Redemption
At any time prior to the earlier of (a) the tenth
business day (or such later day as shall be designated by the
Board of Directors) following the date of the commencement of, or
the announcement of an intention to make, a tender offer or
exchange offer, the consummation of which would cause any person
to become a 20% Stockholder, (b) the tenth business day after the
20% Ownership Date or (c) the first event of the type giving rise
to exercise rights under Section 5(c) above, the Board of Directors
may, at its option,
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direct the Company to redeem the Rights in whole, but not in
part, at a price of $.001 per Right (the "Redemption Price"), and
the Company shall so redeem the Rights. Immediately upon such
action by the Board of Directors (the date of such action is the
"Redemption Date"), the right of the holders of Rights thereafter
shall be to receive the Redemption Price.
9. Exchange
At any time after the 20% Ownership Date and prior to
the first date thereafter upon which a 20% Stockholder shall
be the beneficial owner of 50% or more of the outstanding Common
Shares, the Board of Directors may, at its option, direct the
Company to exchange all, but not less than all, of the then
outstanding Rights for Common Shares at an exchange ratio
per Right equal to that number of Common Shares which, as of the date
of the Board of Directors' action, has a current market price
equal to the difference between the Exercise Price and the
current market price of the shares that would otherwise be
issuable upon exercise of a Right on such date (the "Exchange
Ratio"), and the Company shall so exchange the Rights.
Immediately upon such action by the Board of Directors, the right
to exercise Rights shall terminate and the only right of the
holders of Rights thereafter shall be to receive a number of
Common Shares equal to the Exchange Ratio.
10. No Stockholder Rights Prior to Exercise
Until a Right is exercised, the holder thereof, as
such, shall have no rights as a stockholder of the Company (other
than rights resulting from such holder's ownership of Common
Shares), including, without limitation, the right to vote or to
receive dividends.
11. Amendment of Rights Agreement
The Board of Directors may, from time to time, without
the approval of any holder of Rights, direct the Company and the
Rights Agent to supplement or amend any provision of the Rights
Agreement in any manner, whether or not such supplement or
amendment is adverse to any holder of Rights, and the Company and
the Rights Agent shall so supplement or amend such provision;
provided, however, that from and after the earliest of (a) the
tenth business day (or such later day as shall be designated by
the Board of Directors) following the date of the commencement
of, or the announcement of an intention to make, a tender offer
or exchange offer, the consummation of which would cause any
person to become a 20% Stockholder, (b) the 20% Ownership Date,
(c) the first event of the type giving rise to exercise rights
under Section 5(c) above, or (d) the Redemption Date, the Rights
Agreement shall not be supplemented or amended in any manner that
would materially and adversely affect any holder of outstanding
Rights other than a 20% Stockholder; provided, further that from
and after the first date upon which there shall exist a 20%
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Stockholder, the Rights Agreement shall not be supplemented or
amended in any manner without the approval of a majority of the
Company's directors who were directors prior to such date.
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