As filed with the Securities and Exchange Commission on December 8,
1997
File No. __________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------
FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
-------------------------------------
SHOWBIZ PIZZA TIME, INC.
(Exact Name of Registrant as Specified in Its Charter)
Kansas 48-0905805
(State of Incorporation or Organization) (I.R.S.Employer
Identification no.)
4441 West Airport Freeway, Irving, Texas 75062
(Address of Principal Executive Offices) (Zip Code)
If this form relates to the registration of a class of securities
pursuant to Section 12(b) of the Exchange Act and is effective
pursuant to General Instruction A.(c), please check the following
box. ---
If this form relates to the registration of a class of securities
pursuant to Section 12(g) of the Exchange Act and is effective
pursuant to General Instruction A.(d), please check the following
box. X
---
Securities Act registration statement file number to which this
form relates: -----------
(If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
None Not Applicable
Securities to be registered pursuant to Section 12(g) of the Act:
Preferred Share Purchase Rights
(Title of Class)
Item 1. Description of Registrant's Securities to be Registered.
On November 19, 1997, the Board of Directors of ShowBiz Pizza
Time, Inc. (the "Company") declared a dividend of one preferred
share purchase right (a "Right") for each outstanding share of
common stock, par value $0.10 per share (the "Common Shares"), of
the Company. The dividend is payable on November 25, 1997 (or such
earlier date as may be determined by the Board of Directors of the
Company) to all holders of record of Common Shares as of the close
of business on November 19, 1997 (or such earlier date as may be
determined by the Board of Directors of the Company) (the "Record
Date"). Each Right entitles the registered holder to purchase from
the Company one one-hundredth of a share of Series B Junior
Participating Preferred Stock, par value $100.00 per share (the
"Preferred Shares"), of the Company at a price of $100.00 per one
one-hundredth of a Preferred Share (the "Purchase Price"), subject
to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the
Company and Boston EquiServe, L.P., as Rights Agent (the "Rights
Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired beneficial ownership
of 15% or more of the outstanding Common Shares or (ii) 10 business
days (or such later date as may be determined by action of the
Board of Directors of the Company prior to such time as any person
or group of affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group of
15% or more of the outstanding Common Shares (the earlier of such
dates being called the "Distribution Date"), the Rights will be
evidenced by the certificates representing Common Shares with a
copy of the Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the
Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration of
the Rights), new Common Share certificates issued after the Record
Date upon transfer or new issuance of Common Shares will contain a
notation incorporating the Rights Agreement by reference. Until
the Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates for Common
Shares outstanding as of the Record Date, even without such
notation or a copy of the Summary of Rights being attached thereto,
will also constitute the transfer of the Rights associated with the
Common Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business
on the Distribution Date and thereafter, such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on November 25, 2007 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, in each
case, as described below.
At any time following the Distribution Date, Rights (other
than Rights owned by an Acquiring Person and the Acquiring Person's
affiliates and associates, which will have become void) may be
exercised (subject to their earlier termination, expiration or
exchange) to acquire, in lieu of Preferred Shares, at the then
current Purchase Price of the Right, that number of Common Shares
(or if there are insufficient Common Shares, Preferred Shares or
fractions thereof) which at such time will have a market value of
two times the Purchase Price of the Right.
The Purchase Price payable, and the number of Preferred Shares
or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Preferred Shares, (ii) upon
the grant to holders of the Preferred Shares of certain rights or
warrants to subscribe for or purchase Preferred Shares at a price,
or securities convertible into Preferred Shares with a conversion
price, less than the then-current market price of the Preferred
Shares or (iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (excluding regular
periodic cash dividends paid out of earnings or retained earnings
or dividends payable in Preferred Shares) or of subscription rights
or warrants (other than those referred to above).
The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise of each
Right are also subject to adjustment in the event of a stock split
of the Common Shares or a stock dividend on the Common Shares
payable in Common Shares or subdivisions, consolidations or
combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will
not be redeemable. Each Preferred Share will be entitled to a
minimum preferential quarterly dividend payment of One Dollar and
No/100 ($1.00) per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In
the event of liquidation, the holders of the Preferred Shares will
be entitled to a minimum preferential liquidation payment of $100
per share but will be entitled to an aggregate payment of 100 times
the payment made per Common Share. Each Preferred Share will have
100 votes, voting together with the Common Shares. Finally, in the
event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled
to receive 100 times the amount received per Common Share. These
rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend,
liquidation and voting rights, the value of the one one-hundredth
interest in a Preferred Share purchasable upon exercise of each
Right should approximate the value of one Common Share.
In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated
assets or earning power are sold after a person or group has become
an Acquiring Person, proper provision will be made so that each
holder of a Right (other than an Acquiring Person and the
affiliates and associates of such Acquiring Person, whose Rights
will have become void) will thereafter have the right to receive,
upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring
company which at the time of such transaction will have a market
value of two times the Purchase Price of the Right. In the event
that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provision shall be made so that
each holder of a Right, other than Rights beneficially owned by the
Acquiring Person or the affiliates and associates of such Acquiring
Persons (which will thereafter be void), will thereafter have the
right to receive upon exercise that number of Common Shares having
a market value of two times the Purchase Price of the Right.
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of 50%
or more of the outstanding Common Shares, the Board of Directors of
the Company may exchange the Rights (other than Rights owned by
such person or group and their respective affiliates and associates
which will have become void), in whole or in part, at an exchange
ratio of one Common Share, or one one-hundredth of a Preferred
Share (or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment
of at least 1% in such Purchase Price. No fractional Preferred
Shares will be issued (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at
the election of the Company, be evidenced by depositary receipts)
and in lieu thereof, an adjustment in cash will be made based on
the market price of the Preferred Shares on the last trading day
prior to the date of exercise.
At any time prior to or within 10 business days following the
acquisition by a person or group of affiliated or associated
persons of beneficial ownership of 15% or more of the outstanding
Common Shares, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). The redemption of the Rights may be made
effective at such time on such basis with such conditions as the
Board of Directors of the Company in its sole discretion may
establish. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
Pursuant to the Rights Agreement, certain actions (e.g.
redeeming outstanding Rights, amending the Rights Agreement, etc.)
may only be made with the approval of the Board of Directors of the
Company, including a majority of at least three (3) Continuing
Directors (as hereinafter defined). As used herein, a Continuing
Director will mean any person (other than an Acquiring Person or an
affiliate or associate of an Acquiring Person or a representative
of an Acquiring Person or of any such affiliate or associate) who
was a director prior to the date of the Rights Agreement and any
person (other than an Acquiring Person or an affiliate or associate
of an Acquiring Person or a representative of an Acquiring Person
or of any such affiliate or associate) nominated for selection or
elected to the Board of Directors of the Company pursuant to the
approval of a majority of the Continuing Directors.
Item A. Exhibits.
Exhibit
Number Document
------ --------
1 Rights Agreement, dated as of November 19,
1997, by and between the Company and the
Rights Agent, which includes: as Exhibit A
thereto, the Form of Certificate of
Designation of the Preferred Shares; as
Exhibit B thereto, the Form of Right
Certificate; and as Exhibit C thereto, the
Summary of Rights to Purchase Preferred
Shares.
2 Form of legend to be placed, pursuant to
Section 3(c) of the Rights Agreement, on all
new Common Share certificates issued by the
Company after November 19, 1997 and prior to
the Distribution Date upon transfer, exchange
or new issuance.
3 Restated Articles of Incorporation of the
Company (incorporated by reference to Exhibit
3.1 to the Company's Registration Statement
Number 333-22229 filed with the Securities and
Exchange Commission on February 24, 1997).
4 Bylaws of the Company, as amended and restated
(incorporated by reference to Exhibit 3 to the
Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1994).
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereto duly authorized.
SHOWBIZ PIZZA TIME, INC.
Date: December 8, 1997 By:
Name:
Title:
EXHIBIT INDEX
Exhibit
Number Document Page No.
------ -------- -------
1 Rights Agreement, dated as of November 19,
1997, by and between the Company and the
Rights Agent, which includes: as Exhibit A
thereto, the Form of Certificate of
Designation of the Preferred Shares; as
Exhibit B thereto, the Form of Right
Certificate; and as Exhibit C thereto, the
Summary of Rights to Purchase Preferred
Shares.
2 Form of legend to be placed, pursuant to
Section 3(c) of the Rights Agreement, on all
new Common Share certificates issued by the
Company after November 19, 1997 and prior to
the Distribution Date upon transfer, exchange
or new issuance.
3 Restated Articles of Incorporation of the
Company (incorporated by reference to Exhibit
3.1 to the Company's Registration Statement
Number 333-22229 filed with the Securities and
Exchange Commission on February 24, 1997).
4 Bylaws of the Company, as amended and restated
(incorporated by reference to Exhibit 3 to the
Company's Quarterly Report on Form 10-Q for
the quarter ended September 30, 1994).
RIGHTS AGREEMENT
by and between
SHOWBIZ PIZZA TIME, INC.
and
--------------------
as
Rights Agent
Dated as of November 19, 1997
TABLE OF CONTENTS
Page
Section 1 Certain
Definitions...................................................1
Section 2 Appointment of Rights
Agent.........................................................8
Section 3 Issue of Right
Certificates..................................................9
Section 4 Form of Right
Certificates.................................................12
Section 5 Countersignature and
Registration................................................13
Section 6 Transfer, Split Up, Combination and Exchange of Right
Certificates;
Mutilated, Destroyed, Lost or Stolen Right
Certificates................................................14
Section 7 Exercise of Rights; Purchase Price; Expiration Date of
Rights......................................................16
Section 8 Cancellation and Destruction of Right
Certificates................................................17
Section 9 Availability of Preferred
Shares.......................................................18
Section 10 Preferred Shares Record
Date.........................................................20
Section 11 Adjustment of Purchase Price, Number of Shares or
Number of Rights...............................................21
Section 12 Certificate of Adjusted Purchase Price or Number of
Shares.........................................................33
Section 13 Consolidation, Merger or Sale or Transfer of Assets
or Earning Power................33
Section 14 Fractional Rights and Fractional
Shares........................................................35
Section 15 Rights of
Action........................................................37
Section 16 Agreement of Right
Holders.......................................................38
Section 17 Right Certificate Holder Not Deemed a
Stockholder..................................................39
Section 18 Concerning the Rights
Agent.........................................................40
Section 19 Merger or Consolidation or Change of Name of Rights
Agent..........................................................41
Section 20 Duties of Rights
Agent..........................................................42
Section 21 Change of Rights
Agent..........................................................44
Section 22 Issuance of New Right
Certificates....................................................46
Section 23 Redemption.......................................46
Section 24 Exchange.........................................48
Section 25 Notice of Certain
Events..........................................................50
Section 26 Notices..........................................51
Section 27 Supplements and
Amendments......................................................52
Section 28 Successors.......................................53
Section 29 Benefits of this
Agreement.......................................................53
Section 30 Severability.....................................53
Section 31 Governing
Law.............................................................54
Section 32 Counterparts.....................................54
Section 33 Descriptive
Headings........................................................54
Section 34 Determinations and Actions by the Board of
Directors, etc..................................................54
Exhibit A - Form of Certificate of Designation
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
This Agreement, dated as of November 19, 1997, is by and
between ShowBiz Pizza Time, Inc., a Kansas corporation (the
"Company"), and Boston EquiServe, L.P. (the "Rights Agent")
RECITAL
The Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a
"Right") for each Common Share (as such term is hereinafter
defined) of the Company outstanding as of the close of business on
November 19, 1997 or such earlier date as may be determined by the
Board of Directors of the Company (the "Record Date"), each Right
representing the right to purchase one one-hundredth of a Preferred
Share (as such term is hereinafter defined), upon the terms and
subject to the conditions herein set forth, and has further
authorized and directed the issuance of one Right with respect to
each Common Share that shall become outstanding between the Record
Date and the earliest of the Distribution Date, the Redemption Date
and the Final Expiration Date (as such terms are hereinafter
defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1 Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such
term is hereinafter defined) who or which, together with all
Affiliates and Associates (as such terms are hereinafter
defined) of such Person, shall hereafter become a Beneficial
Owner (as such term is hereinafter defined) of 15% or more of
the Common Shares of the Company then outstanding, but shall
not include the Company, any Subsidiary (as such term is
hereinafter defined) of the Company, any Person who is the
Beneficial Owner of 15% or more of the Common Shares of the
Company on the date hereof, any employee benefit plan of the
Company or any Subsidiary of the Company, or any entity
holding Common Shares for or pursuant to the terms of any such
plan. Notwithstanding the foregoing, no Person shall be
deemed to have become an "Acquiring Person" as the result of
an acquisition of Common Shares by the Company which, by
reducing the number of Common Shares outstanding, increases
the proportionate number of Common Shares beneficially owned
by such Person to 15% or more of the Common Shares of the
Company then outstanding; provided, however, that if a Person
shall become the Beneficial Owner of 15% or more of the Common
Shares of the Company then outstanding by reason of Common
Share purchases by the Company and shall, after such Common
Share purchases by the Company, become the Beneficial Owner of
any additional Common Shares of the Company, then such Person
shall be deemed to be an "Acquiring Person" as of the time of
the acquisition of such additional Common Shares by such
Person. Notwithstanding the foregoing, if the Board of
Directors of the Company determines in good faith pursuant to
Continuing Board Action (as such term is hereinafter defined)
that a Person who would otherwise be an "Acquiring Person," as
defined pursuant to the foregoing provisions of this
Subsection 1(a), has become such inadvertently, and such
Person divests (within such period as of the Board of
Directors may deem appropriate pursuant to Continuing Board
Action) a sufficient number of Common Shares so that such
Person is no longer an "Acquiring Person," as defined pursuant
to the foregoing provisions of this Subsection 1(a), then such
Person shall not be deemed to be an "Acquiring Person" for any
purposes of this Agreement.
(b) "Act" shall mean the Securities Act of 1933, as
amended.
(c) "Affiliate" and "Affiliates" shall have the meaning
ascribed to such terms in Rule 12b-2 promulgated under the
Exchange Act (as such term is hereinafter defined), as in
effect on the date of this Agreement.
(c) "Agreement" shall mean this agreement, as it may be
amended or supplemented from time to time pursuant to
Section 27 hereof.
(d) "Associate" and "Associates" shall have the meaning
ascribed to such terms in Rule 12b-2 promulgated under the
Exchange Act, as in effect on the date of this Agreement.
(e) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly, as determined pursuant to Rule 13d-3 promulgated
under the Exchange Act;
(ii) which such Person or any of such Person's Af-
filiates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and
between underwriters and selling group members with respect to
a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise;
provided, however, that a Person shall not (pursuant to this
Subsection 1(f)(ii)(A)) be deemed the Beneficial Owner of, or
to beneficially own, securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any
of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; or (B) the
right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be
deemed the Beneficial Owner of, or to beneficially own, any
security if the agreement, arrangement or understanding to
vote such security (1) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations promulgated under the
Exchange Act (as such term is hereinafter defined) and (2) is
not also then reportable on Schedule 13D (or any comparable or
successor report) promulgated under the Exchange Act; or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to Subsection 1(f)(ii)(B)) or
disposing of any securities of the Company.
Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase "then
outstanding," when used with reference to a Person's
Beneficial Ownership of securities of the Company, shall mean
the number of such securities then issued and outstanding
together with the number of such securities not then actually
issued and outstanding which such Person would be deemed to
own beneficially hereunder.
(g) "Business Day" shall mean any day other than a
Saturday, a Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law or
executive order to close.
(h) "Close of Business" on any given date shall mean
5:00 P.M., New York, New York time, on such date; provided,
however, that if such date is not a Business Day it shall mean
5:00 P.M., New York, New York time, on the next succeeding
Business Day.
(i) "Common Share" and "Common Shares" when used with
reference to the Company shall mean, as applicable, one or
more of the shares of common stock, par value $0.10 per share,
of the Company. "Common Shares" when used with reference to
any Person other than the Company shall mean the capital stock
(or equity interest) with the greatest voting power of such
other Person or, if such other Person is a Subsidiary of
another Person, the Person or Persons which ultimately control
such first-mentioned Person.
(j) "Company" shall have the meaning ascribed to such
term in the first paragraph of this Agreement.
(k) "Continuing Board Action" shall mean an action
approved by the Board of Directors of the Company (including
the affirmative vote or approval of a majority of the
Continuing Directors (as such term is hereinafter defined)) at
a meeting of the Board of Directors of the Company duly called
and held at which a quorum was present and acting throughout,
provided that at the time of such approval there are not fewer
than three (3) Continuing Directors.
(l) "Continuing Directors" shall mean (i) any member of
the Board of Directors of the Company (while such Person is a
member of the Board of Directors of the Company) who is not an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person or a representative of an Acquiring Person or of any
such Affiliate or Associate and was a member of the Board of
Directors of the Company prior to the date of this Agreement
or (ii) any Person who subsequently becomes a member of the
Board of Directors of the Company (while such Person is a
member of the Board of Directors of the Company) who is not an
Acquiring Person or an Affiliate or Associate of an Acquiring
Person or a representative of an Acquiring Person or of any
such Affiliate or Associate, if such Person's nomination for
selection or election to the Board of Directors of the Company
is approved by a majority of the Continuing Directors.
(m) "Current per share market price" shall have the
meaning ascribed to such term in Subsection 11(d)(i) of this
Agreement.
(n) "Distribution Date" shall have the meaning ascribed
to such term in Section 3 hereof.
(o) "Equivalent preferred shares" shall have the meaning
ascribed to such term in Subsection 11(b) hereof.
(p) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(q) "Exchange Ratio" shall have the meaning ascribed to
such term in Subsection 24(a) hereof.
(r) "Final Expiration Date" shall have the meaning
ascribed to such term in Subsection 7(a) hereof.
(s) "Payment Date" shall mean November 25, 1997 or such
earlier date as may be determined by the Board of Directors of
the Company.
(t) "Person" and "Persons" shall mean any individual,
firm, corporation or other entity, and shall include any
successor (by merger or otherwise) of such entity or entities.
(u) "Preferred Shares" shall mean shares of Series B
Junior Participating Preferred Stock, par value $100.00 per
share, of the Company having the rights and preferences set
forth in the Form of Certificate of Designation attached to
this Agreement as Exhibit A.
(v) "Purchase Price" shall have the meaning ascribed to
such term in Subsection 4(a) hereof.
(w) "Record Date" shall be deemed to have the meaning
ascribed to such term in the Recital to this Agreement.
(x) "Redemption Date" shall have the meaning ascribed to
such term in Subsection 7(a) hereof.
(y) "Redemption Price" shall have the meaning ascribed
to such term in Subsection 23(a) hereof.
(z) "Right" and "Rights" shall be deemed to have the
meaning ascribed to such terms in the Recital to this
Agreement.
(aa) "Right Certificate" shall be deemed to mean the form
of certificate evidencing the ownership of Rights in
substantially the form of Exhibit B hereto.
(bb) "Rights Agent" shall be deemed to have the meaning
ascribed to such term in the first paragraph of this Agreement
and shall include any additional or substitute rights agents
hereafter appointed pursuant to the terms of this Agreement.
(cc) "Shares Acquisition Date" shall mean the first date
of public announcement by the Company or an Acquiring Person
that an Acquiring Person has become such.
(dd) "Subsidiary" of any Person shall mean any
corporation or other entity of which a majority of the voting
power of the voting equity securities or equity interest is
beneficially owned, directly or indirectly, by such Person.
(ee) "Summary of Rights" shall have the meaning ascribed
to such term in Subsection 3(b) hereof.
(ff) "Trading Day" and "Trading Days" shall have the
meaning ascribed to such terms in Subsection 11(d)(i) of this
Agreement.
Section 2 Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the
holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date also be the holders of the
Common Shares of the Company) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such
appointment. The Board of Directors of the Company may, in
accordance with the provisions of Section 21, from time to time
appoint such substitute rights agents as it may deem necessary or
desirable.
Section 3 Issue of Right Certificates.
(a) Until the earlier of (i) the tenth day after the
Shares Acquisition Date or (ii) the tenth Business Day (or
such later date as may be determined by the Board of Directors
of the Company, pursuant to Continuing Board Action, prior to
such time as any Person becomes an Acquiring Person) after the
date of the commencement by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or any
entity holding Common Shares of the Company for or pursuant to
the terms of any such plan) of, or of the first public
announcement of the intention of any Person (other than the
Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company or any
entity holding Common Shares of the Company for or pursuant to
the terms of any such plan) to commence, a tender or exchange
offer the consummation of which would result in any Person
becoming an Acquiring Person (including any such date which is
after the date of this Agreement and prior to the issuance of
the Rights; the earlier of such dates being herein referred to
as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of Subsection 3(b) hereof) by the
certificates for Common Shares of the Company registered in
the names of the holders thereof (which certificates shall
also be deemed to be Right Certificates) and not by separate
Right Certificates, and (y) the right to receive Right
Certificates will be transferable only in connection with the
transfer of Common Shares of the Company. If the Distribution
Date would, pursuant to the foregoing provisions of this
Subsection 3(a), occur prior to the Payment Date (but for the
provisions of this sentence), the Distribution Date shall,
notwithstanding the foregoing provisions of this
Subsection 3(a), not be deemed to occur until the Payment
Date.
As soon as practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will
countersign and the Company (or the Rights Agent, if requested
by the Company) will send or cause to be sent by first-class,
insured, postage-prepaid mail, to each record holder of Common
Shares of the Company as of the close of business on the
Distribution Date, at the address of such holder shown on the
records of the Company, a Right Certificate evidencing one
Right for each Common Share of the Company so held. As of and
after the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable
thereafter, the Company will send a copy of a Summary of
Rights to Purchase Preferred Shares, in substantially the form
of Exhibit C hereto (the "Summary of Rights"), by first-class,
postage-prepaid mail, to each record holder of Common Shares
of the Company as of the close of business on the Record Date,
at the address of such holder shown on the records of the
Company. With respect to certificates for Common Shares of
the Company outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof
together with a copy of the Summary of Rights attached
thereto. Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the surrender
for transfer of any certificate for Common Shares of the
Company outstanding on the Record Date, with or without a copy
of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the
Common Shares of the Company represented thereby.
(c) Certificates for Common Shares of the Company which
become outstanding (including, without limitation,
certificates issued upon the transfer of Common Shares of the
Company and certificates representing reacquired Common Shares
of the Company referred to in the last sentence of this
Subsection 3(c)) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the
Final Expiration Date shall have impressed on, printed on,
written on or otherwise affixed to such certificates a legend
in substantially the following form:
This certificate also evidences and entitles the
holder hereof to certain rights as set forth in a
Rights Agreement between ShowBiz Pizza Time, Inc.
and Boston EquiServe, L.P., dated as of November
19, 1997 (the "Rights Agreement"), the terms of
which are hereby incorporated herein by reference
and a copy of which is on file at the principal
executive offices of ShowBiz Pizza Time, Inc.
Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be
evidenced by this certificate. ShowBiz Pizza Time,
Inc. will mail to the holder of this certificate a
copy of the Rights Agreement without charge after
receipt of a written request therefor. Under
certain circumstances, as set forth in the Rights
Agreement, Rights issued to any Person who becomes
an Acquiring Person (as defined in the Rights
Agreement) may become null and void.
With respect to such certificates containing the
foregoing legend, until the Distribution Date, the Rights
associated with the Common Shares of the Company represented
by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate
shall also constitute the transfer of the Rights associated
with the Common Shares of the Company represented thereby. In
the event that the Company purchases or acquires any of its
Common Shares after the Record Date but prior to the
Distribution Date, any Rights associated with such Common
Shares shall be deemed cancelled and retired so that the
Company shall not be entitled to exercise any Rights as-
sociated with its Common Shares which are no longer outstand-
ing.
Section 4 Form of Right Certificates.
(a) The Right Certificates (and the forms of election to
purchase Preferred Shares and of assignment to be printed on
the reverse thereof) shall be substantially the same as
Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements
printed thereon as the Board of Directors of 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 or automated quotation system on which the Rights may
from time to time be listed or traded, or to conform to usage.
Subject to the provisions of Section 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase
such number of one one-hundredths of a Preferred Share as
shall be set forth therein at the price per one one-hundredth
of a Preferred Share set forth therein (the "Purchase Price"),
but the number of such one one-hundredths of a Preferred Share
and the Purchase Price shall be subject to adjustment as
provided herein.
(b) Any Right Certificate issued pursuant hereto that
represents (i) Rights beneficially owned by an Acquiring
Person or any Associate or Affiliate of an Acquiring Person,
(ii) Rights transferred to a transferee by an Acquiring Person
(or of any such Associate or Affiliate) who becomes such a
transferee after the Acquiring Person becomes such or
(iii) Rights transferred to a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes
such a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from
the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring
Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a
transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect avoidance of the
second paragraph of Subsection 11(a)(ii) hereof, and any Right
Certificate issued pursuant hereto upon transfer, exchange,
replacement or adjustment of any other Right Certificate
referred to in this sentence, shall contain (to the extent
feasible) the following legend:
The Rights represented by this Right Certificate
are or were beneficially owned by a Person who was
or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly,
this Right Certificate and the Rights represented
hereby may become null and void in the
circumstances specified in Subsection 11(a)(ii) of
such Rights Agreement.
In the case of a determination made pursuant to clause
(iii) of this Subsection 4(b) the Company shall notify the
Rights Agent of such determination.
Section 5 Countersignature and Registration. From and after
the distribution of Right Certificates pursuant to the second
paragraph of Subsection 3(a), (a) the Right Certificates shall be
executed on behalf of the Company by its Chairman of the Board, its
President, or any of its Vice Presidents, either manually or by
facsimile signature, shall have affixed thereto the Company's seal
or a facsimile thereof and shall be attested by the Treasurer or an
Assistant Treasurer, or Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature; (b) the Right
Certificates shall be manually countersigned by the Rights Agent
and shall not be valid for any purpose unless countersigned; (c) 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 thereof, such Right Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered with the
same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and
(d) any Right Certificate may be signed on behalf of the Company by
any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such
Right Certificate, although at the date of the execution of this
Rights Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration
and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders
of the Right Certificates, the number of Rights evidenced on its
face by each of the Right Certificates, the certificate number of
each Rights Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. Subject to the provisions of Section 14 hereof, at
any time after the close of business on the Distribution Date, and
at or prior to the close of business on the earlier of the
Redemption Date or the Final Expiration Date, any Right Certificate
or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Subsection 11(a)(ii)
hereof or that have been exchanged pursuant to Section 24 hereof)
may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered
holder to purchase a like number of one one-hundredths of a
Preferred Share as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered
holder desiring to transfer, split up, combine or exchange any
Right Certificate or Right Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the
Right Certificate or Right Certificates to be transferred, split
up, combined or exchanged at the Rights Agent's offices in
Massachusetts. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificates until the
registered holder shall have provided such additional evidence of
the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably
request. Thereupon the Rights Agent shall countersign and deliver
to the Person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to
them, and, at the Company's request, reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto,
and upon surrender to the Rights Agent and cancellation of the
Right Certificate if mutilated, the Company will make and deliver
a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate
so lost, stolen, destroyed or mutilated.
Section 7 Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the principal
office of the Rights Agent, together with payment of the
Purchase Price for each one one-hundredth of a Preferred Share
as to which the Rights are exercised, at or prior to the
earliest of (i) the close of business on November 25, 2007
(the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof (the
"Redemption Date") or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a
Preferred Share purchasable pursuant to the exercise of a
Right shall initially be $100.00, and shall be subject to
adjustment from time to time as provided in Section 11 or 13
hereof and shall be payable in lawful money of the United
States of America in accordance with Subsection 7(c) below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the
shares to be purchased and an amount equal to any applicable
transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified
check, cashier's check or money order payable to the order of
the Company, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Common Shares of
the Company and/or Preferred Shares certificates for the
number of Common Shares of the Company and/or Preferred Shares
to be purchased and the Company hereby irrevocably authorizes
and directs its transfer agent to comply with all such
requests, or (B) requisition from the depositary agent
depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (in
which case certificates for the Preferred Shares represented
by such receipts shall be deposited by the transfer agent with
the depositary agent) and the Company hereby authorizes and
directs the depositary agent to comply with such request, (ii)
when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such
certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of
such Right Certificate, registered in such name or names as
may be designated by such holder and (iv) when appropriate,
after receipt, deliver such cash to or upon the order of the
registered holder of such Right Certificate.
(d) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the
provisions of Section 14 hereof.
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, if surrendered to the Rights Agent,
shall be cancelled by it, and no Right Certificates shall be issued
in lieu thereof except as expressly permitted by the provisions of
this Rights Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Right Certificates to
the Company, or shall, at the written request of the Company,
destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9 Availability of Preferred Shares.
(a) The Company covenants and agrees that it will cause
to be reserved and kept available out of its authorized and
unissued Preferred Shares or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be
sufficient to permit the exercise in full of all outstanding
Rights in accordance with Section 7. The Company covenants and
agrees that it will take all such action as may be necessary
to ensure that all Common Shares of the Company and/or
Preferred Shares delivered upon exercise of Rights shall, at
the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable
shares.
(b) So long as the Common Shares of the Company and/or
Preferred Shares issuable and deliverable upon the exercise of
the Rights may be listed or traded on any national securities
exchange or automated quotation system, the Company shall use
its best efforts to cause, from and after such time as the
Rights become exercisable, all Common Shares of the Company
and/or Preferred Shares reserved for such issuance to be
listed on such exchange or automated quotation system upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file,
as soon as practicable following the earliest date after the
first occurrence of an event under Subsection 11(a)(ii), a
registration statement under the Act with respect to the
securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to
become effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as
of which the Rights are no longer exercisable for such
securities and (B) the date of the expiration of the Rights.
The Company will also take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue
sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily
suspend, for a period of time not to exceed ninety (90) days
after the date set forth in clause (i) of the first sentence
of this Subsection 9(c), the exercisability of the Rights in
order to prepare and file such registration statement and
permit it to become effective. The Company will notify the
Rights Agent of any such suspension. Upon any such
suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. In
addition, if the Company shall determine that a registration
statement is required following the Distribution Date, the
Company may temporarily suspend the exercisability of the
Rights until such time as a registration statement has been
declared effective. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction if the exercise thereof shall not be
permitted under applicable law.
(d) From and after the Distribution Date, the Company
further covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or
delivery of the Right Certificates or of any Common Shares of
the Company and/or Preferred Shares upon the exercise of
Rights. The Company shall not, however, be required to pay
any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a person other
than, or the issuance or delivery of certificates or
depositary receipts for the Common Shares of the Company
and/or Preferred Shares in a name other than that of, the
registered holder of the Right Certificate evidencing Rights
surrendered for exercise or to issue or to deliver any
certificates or depositary receipts for Common Shares of the
Company and/or Preferred Shares upon the exercise of any
Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Right Certificate at the
time of surrender) or until it has been established to the
Company's reasonable satisfaction that no such tax is due.
Section 10 Preferred Shares Record Date. Each person in
whose name any certificate for Common Shares of the Company and/or
Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the
Common Shares of the Company and/or Preferred Shares represented
thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable
transfer taxes) was made; provided, however, that if the date of
such surrender and payment is a date upon which the transfer books
of the Company relating to the Common Shares of the Company and/or
Preferred Shares are closed, such person shall be deemed to have
become the record holder of such shares on, and such certificate
shall be dated, the next succeeding day on which such transfer
books are open.
Section 11 Adjustment of Purchase Price, Number of Shares
or Number of Rights. The Purchase Price, the number of Preferred
Shares covered by each Right and the number of Rights outstanding
are subject to adjustment from time to time as provided in this
Section 11.
(a) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Preferred Shares payable in Preferred Shares, (B) subdivide
the outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving
corporation), except as otherwise provided in this
Subsection 11(a), the Purchase Price in effect at the time of
the record date for such dividend or of the effective date of
such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such
date, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately
prior to such date and at a time when the Preferred Shares
transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by virtue of
such dividend, subdivision, combination or reclassification;
provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the
Company issuable upon exercise of one Right. If an event
occurs which would require an adjustment under both this
Subsection 11(a)(i) and Subsection 11(a)(ii), the adjustment
provided for in this Subsection 11(a)(i) shall be in addition
to and shall be made prior to any adjustment required pursuant
to Subsection 11(a)(ii).
(i) Subject to Sections 23 and 24 of this
Agreement, in the event any Person becomes an Acquiring
Person, each holder of a Right shall thereafter have a right
to receive, upon exercise thereof at a price equal to the then
current Purchase Price multiplied by the number of one
one-hundredths of a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement
and in lieu of Preferred Shares, such number of Common Shares
of the Company as shall equal the result obtained by (A)
multiplying the then current Purchase Price by the number of
one one-hundredths of a Preferred Share for which a Right is
then exercisable and (B) dividing that product by 50% of the
then "current per share market price" of the Common Shares of
the Company on the date of the occurrence of such event. In
the event that any Person shall become an Acquiring Person and
the Rights shall then be outstanding, the Company shall not,
except as permitted by Section 23, take any action which would
eliminate or diminish the benefits intended to be afforded by
this Agreement or the benefits intended to be afforded by the
Rights.
From and after the occurrence of such event, any
Rights (x) that are or were acquired or beneficially owned
by any Acquiring Person (or any Associate or Affiliate of such
Acquiring Person), (y) transferred to a transferee by an
Acquiring Person (or of any such Associate or Affiliate) who
becomes such a transferee after the Acquiring Person becomes
such or (z) transferred to a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes such a
transferee prior to or concurrently with the Acquiring Person
becoming such and receives such Rights pursuant to either
(1) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom the Acquiring
Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (2) a
transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding
which has a primary purpose or effect the avoidance of this
second paragraph of Subsection 11(a)(ii) shall be void and
any holder and/or subsequent holder of such Rights shall
thereafter have no right to exercise such Rights under any
provision of this Agreement or to exercise any rights under
this Agreement with respect to such Rights. The Company shall
use all reasonable efforts to insure that the provisions of
this Subsection 11(a)(ii) and Subsection 4(b) hereof are
complied with, but shall have no liability to any holder of
Right Certificates or other Person as a result of its failure
to make any determination with respect to an Acquiring Person
or its Affiliates, Associates or transferees hereunder. No
Right Certificate shall be issued pursuant to Section 3 that
represents Rights beneficially owned by an Acquiring Person
whose Rights would be void pursuant to the second preceding
sentence or any Associate or Affiliate thereof; no Right
Certificate shall be issued at any time upon the transfer of
any Rights to an Acquiring Person whose Rights would be void
pursuant to the second preceding sentence or any Associate or
Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate; and any Right Certificate delivered to
the Rights Agent for transfer to an Acquiring Person whose
Rights would be void pursuant to the second preceding sentence
shall be cancelled.
(ii) In the event that there shall not be sufficient
Common Shares of the Company issued but not outstanding or
authorized but unissued to permit the exercise in full of the
Rights in accordance with the foregoing Subsection 11(a)(ii),
the Company shall take all such action as may be necessary to
authorize additional Common Shares of the Company for issuance
upon exercise of the Rights. In the event the Company shall,
after good faith effort, be unable to take all such action as
may be necessary to authorize such additional Common Shares of
the Company, the Company shall substitute, for each Common
Share that would otherwise be issuable upon exercise of a
Right, a number of Preferred Shares or fraction thereof such
that the current per share market price of such Preferred
Shares or fraction thereof is equal to the current per share
market price of one Common Share of the Company as of the date
of issuance of such Preferred Shares or fraction thereof.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or
purchase Preferred Shares (or shares having substantially the
same rights, privileges and preferences as the Preferred
Shares ("equivalent preferred shares")) or securities
convertible into Preferred Shares or equivalent preferred
shares at a price per Preferred Share or equivalent preferred
share (or having a conversion price per share, if a security
convertible into Preferred Shares or equivalent preferred
shares) less than the then current per share market price of
the Preferred Shares on such record date, the Purchase Price
to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall
be the number of Preferred Shares outstanding on such record
date plus the number of Preferred Shares which the aggregate
offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current
per share market price and the denominator of which shall be
the number of Preferred Shares outstanding on such record date
plus the number of additional Preferred Shares and/or
equivalent preferred shares to be offered for subscription or
purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in
no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the
shares of capital stock of the Company issuable upon exercise
of one Right. In case such subscription price may be paid in
a consideration part or all of which shall be in a form other
than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent. Preferred Shares owned by or
held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights, options or
warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the
making of a distribution to all holders of the Preferred
Shares (including any such distribution made in connection
with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash
dividend or a dividend payable in Preferred Shares) or
subscription rights or warrants (excluding those referred to
in Subsection 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall
be the then current per share market price of the Preferred
Shares on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the assets or
evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one Preferred
Share and the denominator of which shall be such current per
share market price of the Preferred Shares; provided, however,
that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company to be issued upon
exercise of one Right. Such adjustments shall be made
successively whenever such a record date is fixed; and in the
event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which
would then be in effect if such record date had not been
fixed.
(d) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security"
for the purpose of this Subsection 11(d)(i)) on any date shall
be deemed to be the average of the daily closing prices per
share of such Security for the 30 consecutive Trading Days
immediately prior to such date; provided, however, that in the
event that the current per share market price of the Security
is determined during a period following the announcement by
the issuer of such Security of (A) a dividend or distribution
on such Security payable in shares of such Security or
securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security
and prior to the expiration of 30 Trading Days after the
ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclas-
sification, then, and in each such case, the current per share
market price shall be appropriately adjusted to reflect the
current market price per share equivalent of such Security.
The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if
the Security is not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed
on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security
is not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations
System ("NASDAQ") or such other system then in use, or, if on
any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in
the Security selected by the Board of Directors of the
Company. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the Security
is listed or admitted to trading is open for the transaction
of business or, if the Security is not listed or admitted to
trading on any national securities exchange, a Business Day.
(i) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Shares
shall be determined in accordance with the method set forth in
Subsection 11(d)(i). If the Preferred Shares are not publicly
traded, the "current per share market price" of the Preferred
Shares shall be conclusively deemed to be the current per
share market price of the Common Shares of the Company as
determined pursuant to Subsection 11(d)(i) (appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by
one hundred. If neither the Common Shares of the Company nor
the Preferred Shares are publicly held or so listed or traded,
"current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a
statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this
Subsection 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the
nearest cent or to the nearest one one-millionth of a
Preferred Share or one ten-thousandth of any other share or
security as the case may be. Notwithstanding the first
sentence of this Subsection 11(e), any adjustment required by
this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction which requires
such adjustment or (ii) the date of the expiration of the
right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to
Subsection 11(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of
capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares 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 the Preferred
Shares contained in Subsections 11(a) through (c) hereof,
inclusive, and the provisions of Sections 7, 9, 10 and 13
hereof with respect to the Preferred Shares shall apply on
like terms to any such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price
hereunder shall evidence the right to purchase, at the
adjusted Purchase Price, the number of one one-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 Subsection 11(i) hereof, upon each adjustment
of the Purchase Price as a result of the calculations made in
Subsections 11(b) and (c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a
Preferred Share (calculated to the nearest one one-millionth
of a Preferred Share) obtained by (i) multiplying (x) the
number of one one-hundredths of a Preferred Share covered by
a Right immediately prior to this adjustment by (y) the
Purchase Price in effect immediately prior to such adjustment
of the Purchase Price and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after
such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of
Rights, in substitution for any adjustment in the number of
one one-hundredths of a Preferred Share purchasable upon the
exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable
for the number of one one-hundredths of a Preferred Share for
which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjust-
ment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price.
The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on
which the Purchase Price is adjusted or any day thereafter,
but, if the Distribution Date shall have occurred, shall be at
least 10 days later than the date of the public announcement.
If the Distribution Date shall have occurred, upon each
adjustment of the number of Rights pursuant to this
Subsection 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause
to be distributed to such holders of record in substitution
and replacement for the Right Certificates held by such
holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the
manner provided for herein and shall be registered in the
names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of one one-hundredths of a
Preferred Share issuable upon the exercise of the Rights, the
Right Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of one
one-hundredths of a Preferred Share which were expressed in
the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price below one one-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 which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Preferred Shares at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require
that an adjustment in the Purchase Price be made effective as
of a record date for a specified event, the Company may elect
to defer until the occurrence of such event the issuing to the
holder of any Right exercised after such record date of the
Preferred Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above
the Preferred Shares and other capital stock or securities of
the Company, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such
holder a due bill or other appropriate instrument evidencing
such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Board of Directors of the Company shall
be entitled to make, pursuant to Continuing Board Action,
such reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to
be advisable in order that any consolidation or subdivision of
the Preferred Shares, issuance wholly for cash of any
Preferred Shares at less than the current market price, issu-
ance wholly for cash of Preferred Shares or securities which
by their terms are convertible into or exchangeable for
Preferred Shares, dividends on Preferred Shares payable in
Preferred Shares or issuance of rights, options or warrants
referred to hereinabove in Subsection 11(b), hereafter made by
the Company to holders of its Preferred Shares shall not be
taxable to such stockholders.
(n) In the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company
shall (i) declare or pay any dividend on its Common Shares
payable in Common Shares of the Company or (ii) effect a
subdivision, combination or consolidation of its Common Shares
(by reclassification or otherwise than by payment of dividends
in Common Shares of the Company) into a greater or lesser
number of its Common Share, then in any such case (A) the
number of one one-hundredths of a Preferred Share purchasable
after such event upon proper exercise of each Right shall be
determined by multiplying the number of one one-hundredths of
a Preferred Share so purchasable immediately prior to such
event by a fraction, the numerator of which is the number of
Common Shares of the Company outstanding immediately before
such event and the denominator of which is the number of
Common Shares of the Company outstanding immediately after
such event, and (B) each Common Share of the Company
outstanding immediately after such event shall have issued
with respect to it that number of Rights which each Common
Share of the Company outstanding immediately prior to such
event had issued with respect to it. The adjustments provided
for in this Subsection 11(n) shall be made successively
whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
Section 12 Certificate of Adjusted Purchase Price or
Number of Shares. Whenever an adjustment is made as provided in
Section 11 or 13 hereof, the Company shall promptly (a) prepare a
certificate setting forth such adjustment, and a brief statement of
the facts accounting for such adjustment, (b) file with the Rights
Agent and with each transfer agent for the Common Shares or the
Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance
with Section 25 hereof.
Section 13 Consolidation, Merger or Sale or Transfer of
Assets or Earning Power. In the event, directly or indirectly, at
any time after a Person has become an Acquiring Person, (a) the
Company shall consolidate with, or merge with and into, any other
Person, (b) any Person shall consolidate with the Company, or merge
with and into the Company and the Company shall be the continuing
or surviving corporation of such merger and, in connection with
such merger, all or part of the Common Shares of the Company shall
be changed into or exchanged for stock or other securities of any
other Person (or the Company) or cash or any other property or (c)
the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of
the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person other than the Company or
one or more of its wholly-owned Subsidiaries, then, and in each
such case, proper provision shall be made so that (i) each holder
of a Right (except as otherwise provided herein) shall thereafter
have the right to receive, upon the exercise thereof at a price
equal to the then current Purchase Price multiplied by the number
of one one-hundredths of a Preferred Share for which a Right is
then exercisable, in accordance with the terms of this Agreement
and in lieu of Preferred Shares, such number of Common Shares of
such other Person (including the Company as successor thereto or as
the surviving corporation) as shall equal the result obtained by
(A) multiplying the then current Purchase Price by the number of
one one-hundredths of a Preferred Share for which a Right is then
exercisable and dividing that product by (B) 50% of the then
current per share market price of the Common Shares of such other
Person (determined pursuant to Subsection 11(d) hereof) on the date
of consummation of such consolidation, merger, sale or transfer;
(ii) the issuer of such Common Shares shall thereafter be liable
for, and shall assume, by virtue of such consolidation, merger,
sale or transfer, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall
thereafter be deemed to refer to such issuer; and (iv) such issuer
shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares in
accordance with Section 9 hereof) in connection with such
consummation as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the Common Shares thereafter deliverable upon
the exercise of the Rights. The Company shall not consummate any
such consolidation, merger, sale or transfer unless prior thereto
the Company and such issuer shall have executed and delivered to
the Rights Agent a supplemental agreement so providing and further
providing that, as soon as practicable after the date of any such
consolidation, merger or sale of assets, the issuer will:
(x) prepare and file a registration statement under the
Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and will
use its best efforts to cause such registration statement to
(1) become effective as soon as practicable after such filing
and (2) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration
Date; and
(y) deliver to holders of the Rights historical
financial statements for the issuer and each of its Affiliates
which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction
there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements which, as a result of
the consummation of such transaction, would eliminate or
substantially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
Section 14 Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions
of Rights or to distribute Right Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there
shall be paid to the registered holders of the Right
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For
the purposes of this Section 14(a), the current market value
of a whole Right shall be the closing price of the Rights for
the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price for any day shall be the last sale price,
regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if
the Rights are not listed or admitted to trading on the New
York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed
on the principal national securities exchange on which the
Rights are listed or admitted to trading or, if the Rights are
not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market
maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market
maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board
of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions
of Preferred Shares (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share) upon
exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-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 evidenced by depositary
receipts, pursuant to an appropriate agreement between the
Company and a depositary selected by it, provided that such
agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences
to which they are entitled as beneficial owners of the
Preferred Shares represented by such depositary receipts. In
lieu of fractional Preferred Shares that are not integral
multiples of one one-hundredth of a Preferred Share, the
Company shall pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For the purposes
of this Subsection 14(b), the current market value of a
Preferred Share shall be the closing price of a Preferred
Share (as determined pursuant to the second sentence of
Subsection 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right (except as
provided above).
Section 15 Rights of Action. All rights of action in
respect of this Agreement, 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, prior to the
Distribution Date, the registered holders of the Common Shares of
the Company); and any registered holder of any Right Certificate
(or, prior to the Distribution Date, of the Common Shares of the
Company), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date,
of the Common Shares of the Company), may, in his own behalf and
for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such
Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have
an adequate remedy at law for any breach of this Agreement and will
be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Section 16 Agreement of Right Holders. Every holder of a
Right, by accepting the same, consents and agrees with the Company
and the Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the
Common Shares of the Company ;
(b) after the Distribution Date, the Right Certificates
are transferable only on the registry books of the Rights
Agent if surrendered at the principal office of the Rights
Agent, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and treat
the person in whose name the Right Certificate (or, prior to
the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and
of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Right Certificates or the
associated Common Shares certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall be affected
by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have
any liability to any holder of a Right or other Person as a
result of the Company's or Rights Agent's inability to perform
any of its obligations under this Agreement by reason of any
preliminary or permanent injunction or other order, decree or
ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
Section 17 Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose
the holder of the Preferred Shares or any other securities of the
Company which may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein or
in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a stockholder
of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
Section18 Concerning the Rights Agent. The Company agrees to
pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder.
The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred
without negligence, bad faith or willful misconduct on the part of
the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against
any claim of liability in the premises.
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 of the Company or for other
securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to be signed, executed
and, where necessary, verified or acknowledged, by the proper
person or persons, or otherwise upon the advice of counsel as set
forth in Section 20 hereof.
Section 19 Merger or Consolidation or Change of Name of
Rights Agent. Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock
transfer or corporate trust powers of the Rights Agent or any
successor Rights Agent, shall be the successor to the Rights Agent
under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as
a successor Rights Agent under the provisions of Section 21 hereof.
In case at the time such successor Rights Agent shall succeed to
the agency created by this Agreement any of the Right Certificates
shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of the
Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20 Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and
protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or
desirable that any fact or matter be proved or established by
the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by
any one of the Chairman of the Board, the Chief Executive
Officer, 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 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 shall not be under any
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution
hereof by the Rights Agent) or in respect of the validity or
execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Subsection
11(a)(ii) hereof) or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for
in Section 3, 11, 13, 23 or 24, or the ascertaining of the
existence of facts that would require any such change or
adjustment (except with respect to the exercise of Rights
evidenced 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 to
be issued pursuant to this Agreement or any Right Certificate
or as to whether any Preferred Shares 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, the President, any Vice
President, the Secretary or the Treasurer of the Company, and
to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance
with instructions of any such officer or for any delay in
acting while waiting for those 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 Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or
agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and
continued employment thereof.
Section 21 Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon 30 days' notice in writing mailed
to the Company and to each transfer agent of the Common Shares of
the Company or Preferred Shares by registered or certified mail,
and to the holders of the Right Certificates by first-class mail.
The Board of Directors of the Company may remove the Rights Agent
or any successor Rights Agent, pursuant to Continuing Board Action,
upon 30 days' prior written notice, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer
agent of the Common Shares of the Company or 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, the
Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30
days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right
Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered
holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such
a court, shall be a corporation organized and doing business under
the laws of the United States or of the State of New York (or of
any other state of the United States so long as such corporation is
authorized to do business as a banking institution in the State of
New York), in good standing, having an office in the State of New
York, which 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 which has at the time
of its appointment as Rights Agent a combined capital and surplus
of at least $50 million. After appointment, the successor Rights
Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further
assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment the Company
shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Shares or Preferred
Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
Section 22 Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, pursuant to Continuing
Board Action, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the Purchase Price
and the number or kind or class of shares or other securities or
property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 23 Redemption.
(a) The Board of Directors of the Company may, pursuant
to Continuing Board Action, at its option, at any time prior
to the earlier of (i) the close of business on the tenth
Business Day following the date on which any Person becomes an
Acquiring Person (or if such date shall have occurred prior to
the Record Date, the close of business on the tenth Business
Day following the Record Date) or (ii) the Final Expiration
Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the "Redemption
Price"). The redemption of the Rights by the Board of
Directors of the Company may be made effective at such time,
on such basis and with such conditions as the Board of
Directors of the Company in its sole discretion may establish,
pursuant to Continuing Board Action.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights
pursuant to Subsection 23(a), and without any further action
and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price. The Company
shall promptly give public notice of any such redemption;
provided, however, that the failure to give, or any defect in,
any such notice shall not affect the validity of such
redemption. Within 10 days after such action of the Board of
Directors ordering the redemption of the Rights, the Company
shall mail a notice of redemption to all the holders of the
then outstanding Rights at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent
for the Common Shares of the Company. Any notice which is
mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the
Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any
manner other than that specifically set forth in this
Section 23 or in Section 24 hereof and other than in
connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24 Exchange.
(a) The Board of Directors of the Company may, pursuant
to Continuing Board Action, at its option, at any time after
any Person becomes an Acquiring Person, exchange all or part
of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the
provisions of Subsection 11(a)(ii) hereof) for Common Shares
of the Company at an exchange ratio of one such Common Share
per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as
the "Exchange Ratio"). Notwithstanding the foregoing, the
Board of Directors of the Company shall not be empowered to
effect such exchange at any time after any Person (other than
the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary or any
entity holding Common Shares of the Company for or pursuant to
the terms of any such plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50%
or more of the Common Shares of the Company then outstanding.
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights
pursuant to Subsection 24(a) hereof and without any further
action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of
Common Shares of the Company equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio.
The Company shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any
such exchange to all of the holders of such Rights at their
last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state
the method by which the exchange of the Common Shares of the
Company for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which have
become void pursuant to the provisions of Subsection 11(a)(ii)
hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient
Common Shares of the Company issued but not outstanding or
authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company
shall take all such action as may be necessary to authorize
additional Common Shares of the Company for issuance upon
exchange of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be
necessary to authorize such additional Common Shares of the
Company, the Company shall substitute, for each Common Share
of the Company that would otherwise be issuable upon exchange
of a Right, a number of Preferred Shares or fraction thereof
such that the current per share market price of such Preferred
Shares or fraction thereof is equal to the current per share
market price of one Common Share of the Company as of the date
of issuance of such Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue fractions
of its Common Shares or to distribute certificates which
evidence fractional Common Shares of the Company. In lieu of
such fractional Common Shares of the Company, the Company
shall pay to the registered holders of the Right Certificates
with regard to which such fractional Common Shares of the
Company would otherwise be issuable an amount in cash equal to
the same fraction of the current market value of a whole
Common Share of the Company. For the purposes of this
Subsection 24(d), the current market value of a whole Common
Share shall be the closing price of a Common Share (as
determined pursuant to the second sentence of Subsec-
tion 11(d)(i) hereof) for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24.
Section 25 Notice of Certain Events.
(a) If at any time subsequent to the Shares Acquisition
Date, the Company shall propose (i) to pay any dividend
payable in stock of any class to the holders of the Preferred
Shares or to make any other distribution to the holders of the
Preferred Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of the Preferred
Shares rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or
any other securities, rights or options, (iii) to effect any
reclassification of the Preferred Shares (other than a
reclassification involving only the subdivision of outstanding
Preferred Shares), (iv) to effect any consolidation or merger
into or with, or to effect any sale or other transfer (or to
permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person, (v) to
effect the liquidation, dissolution or winding up of the
Company or (vi) to declare or pay any dividend on the Common
Shares of the Company payable in Common Shares or to effect a
subdivision, combination or consolidation of the Common Shares
(by reclassification or otherwise than by payment of dividends
in Common Shares), then, in each such case, the Company shall
give to each holder of a Right Certificate, in accordance with
Section 26 hereof, a notice of such proposed action, which
shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution or winding up is to take
place and the date of participation therein by the holders of
the Common Shares of the Company and/or Preferred Shares, if
any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii)
above at least 10 days prior to the record date for
determining holders of the Preferred Shares for purposes of
such action, and in the case of any such other action, at
least 10 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of
the Common Shares of the Company and/or Preferred Shares,
whichever shall be the earlier.
(b) In case the event set forth in Subsection 11(a)(ii)
hereof shall occur, then the Company shall as soon as
practicable thereafter give to each holder of a Right
Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe such
event and the consequences of such event to holders of Rights
under Subsection 11(a)(ii) hereof.
Section26 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:
ShowBiz Pizza Time, Inc.
4441 West Airport Freeway
Attention: Corporate Secretary
Irving, Texas 75062
Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the
Company or by the holder of any Right Certificate to or on the
Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Boston EquiServe Limited Partnership
150 Royall Street
Canton, Massachusetts 02021
Attention: Rights Administrator
Notices or demands authorized by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Right
Certificate shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the
address of such holder as shown on the registry books of the
Company or the Rights Agent, as applicable.
Section 27 Supplements and Amendments. The Board of
Directors of the Company may, pursuant to Continuing Board Action,
from time to time supplement or amend this Agreement without the
approval of any holders of Right Certificates in order to cure any
ambiguity, to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions
herein, or to make any other provisions with respect to the Rights
which the Board of Directors of the Company may deem necessary or
desirable, any such supplement or amendment to be evidenced by a
writing signed by the Company and the Rights Agent; provided,
however, that from and after such time as any Person becomes an
Acquiring Person, this Agreement shall not be amended in any manner
which would adversely affect the interests of the holders of Rights
(other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); and provided, further, this Agreement may not be
supplemented or amended to lengthen (a) a time period relating to
when the Rights may be redeemed at such time as the Rights are not
then redeemable or (b) any other time period unless such
lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, the holders of
Rights. Notwithstanding anything contained in this Agreement to
the contrary, no supplement or amendment shall be made that changes
the Redemption Price, the Final Expiration Date, the Purchase Price
or the number of one-hundredths of Preferred Shares for which a
Right is exercisable.
Section 28 Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their
respective successors and assigns hereunder.
Sectin 29 Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation
other than the Company, the Rights Agent and the registered holders
of the Right Certificates (and, prior to the Distribution Date, the
Common Shares of the Company) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares of the Company).
Section 30 Severability. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement
to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void
or unenforceable and the Board of Directors of the Company
determines, pursuant to Continuing Board Action, in its good faith
judgment that severing the invalid language from this Agreement
would adversely affect the purpose or effect of this Agreement, the
right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the close of business on the
tenth day following the date of such determination by the Board of
Directors.
Section 31 Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Kansas and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within
such State.
Section 32 Counterparts. This Agreement may be executed
in any number of counterparts and each of such counterparts shall
for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section 33 Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of
any of the provisions hereof.
Section 34 Determinations and Actions by the Board of
Directors, etc. The Board of Directors of the Company shall have
the exclusive power and authority to administer this Agreement and
to exercise all rights and powers specifically granted to the Board
of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power to (a) interpret
the provisions of this Agreement and (b) make all determinations
deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the
Rights or to amend this Agreement). All such actions,
calculations, interpretations and determinations (including, for
the purposes of clause (ii) below, all omissions with respect to
the foregoing) which are done or made by the Board of Directors of
the Company in good faith and in accordance with the provisions of
this Agreement, shall (i) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the rights and all other
parties, and (ii) not subject the Board to any liability to the
holder of the Rights.
Section 35 Continuing Board Action. Whenever any
provision of this Agreement contemplates action by the Board of
Directors of the Company pursuant to Continuing Board Action, such
procedure will be deemed to be mandatory and no other type of
approval or authorization procedure by the Board of Directors of
the Company will be deemed to be adequate to accomplish the
contemplated action.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and attested, all as of the day and
year first above written.
SHOWBIZ PIZZA TIME, INC.
Attest:
By: By:
Title: Corporate Secretary Title: President
Attest: BOSTON EQUISERVE, L.P.
By: By:
Title: Title:
Exhibit A
FORM
of
CERTIFICATE OF DESIGNATION
of
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
of
SHOWBIZ PIZZA TIME, INC.
(Pursuant to Section 17-6401 of the
Kansas General Corporation Code)
-----------------------
ShowBiz Pizza Time, Inc., a corporation organized and existing
under the General Corporation Code of the State of Kansas
(hereinafter called the "Corporation"), hereby certifies that the
following resolution was adopted by the Board of Directors of the
Corporation as required by Section 17-6401 of the General
Corporation Code at a meeting duly called and held on November 19,
1997:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of this Corporation (hereinafter called
the "Board of Directors" or the "Board") in accordance with the
provisions of the Certificate of Incorporation of the Corporation,
the Board of Directors hereby creates a series of Preferred Stock,
par value $100.00 per share (the "Preferred Stock"), of the
Corporation and hereby states the designation and number of shares,
and fixes the relative rights, preferences, and limitations thereof
as follows:
Series B Junior Participating Preferred Stock:
Section 1 Designation and Amount. The shares of such series
shall be designated as "Series B Junior Participating Preferred
Stock" (the "Series B Preferred Stock") and the number of shares
constituting the Series B Preferred Stock shall be Three Hundred
Thousand (300,000). Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Series B Preferred
Stock to a number less than the number of shares then outstanding
plus the number of shares reserved for issuance upon the exercise
of outstanding options, rights or warrants or upon the conversion
of any outstanding securities issued by the Corporation convertible
into Series B Preferred Stock.
Section 2 Dividends and Distributions.
(a) Subject to the rights of the holders of any shares
of any series of Preferred Stock (or any similar stock)
ranking prior and superior to the Series B Preferred Stock
with respect to dividends, including, without limitation, the
Corporation's Class A Preferred Stock, the holders of shares
of Series B Preferred Stock, in preference to the holders of
Common Stock, par value $0.10 per share (the "Common Stock"),
of the Corporation, and of any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March,
June, September and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or fraction of a
share of Series B Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (i) One
Dollar and No/100 ($1.00) 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 B
Preferred Stock. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable
in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of
Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such
case the amount to which holders of shares of Series B
Preferred Stock were 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 B 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 that, in
the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $1 per share 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 B Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of
holders of shares of Series B Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of
Series B Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination
of holders of shares of Series B Preferred Stock entitled to
receive the 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 B
Preferred Stock shall have the following voting rights:
(a) Subject to the provision for adjustment hereinafter
set forth, each share of Series B Preferred Stock shall
entitle the holder thereof to 100 votes on all matters
submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to
which holders of shares of Series B Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which
is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
(b) Except as otherwise provided herein, in any other
Certificate of Designation creating a series of Preferred
Stock or any similar stock, or by law, the holders of shares
of Series B Preferred Stock and the holders of shares of
Common Stock and any other capital stock of the Corporation
having general voting rights shall vote together as one class
on all matters submitted to a vote of stockholders of the
Corporation.
(c) Except as set forth herein, or as otherwise
provided by law, holders of Series B Preferred Stock shall
have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with
holders of Common Stock as set forth herein) for taking any
corporate action.
Section 4 Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series B Preferred Stock outstanding
shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution
or winding up) to the Series B Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution
or winding up) with the Series B Preferred Stock, except
dividends paid ratably on the Series B Preferred Stock
and all such parity stock on which dividends are payable
or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking junior
(either as to dividends or upon liquidation, dissolution
or winding up) to the Series B 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 B
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series B Preferred Stock, or
any shares of stock ranking on a parity with the Series
B Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by
the Board of Directors) to all holders of such shares
upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and
other relative rights and preferences of the respective
series and classes, shall determine in good faith will
result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (a) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
Section 5 Reacquired Shares. Any shares of Series B 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 and may be
reissued as part of a new series of Preferred Stock subject to the
conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of
Designations creating a series of Preferred Stock or any similar
stock or as otherwise required by law.
Section 6 Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (a) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Preferred Stock unless,
prior thereto, the holders of shares of Series B Preferred Stock
shall have received $100 per share, plus an amount equal to accrued
and unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders of
shares of Series B Preferred Stock shall be entitled to receive 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) to the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series B Preferred Stock, except distributions made
ratably on the Series B Preferred Stock and all 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 the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock,
or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock)
into a greater or lesser number of shares of Common Stock, then in
each such case the aggregate amount to which holders of shares of
Series B Preferred Stock were 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 case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for
or changed into other stock or securities, cash and/or any other
property, then in any such case each share of Series B Preferred
Stock shall at the same time be similarly exchanged or changed into
an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 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 the Corporation
shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or
change of shares of Series B 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 B Preferred
Stock shall not be redeemable.
Section 9 Rank. The Series B Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets,
junior to all series of any other class of the Corporation's
Preferred Stock, including, without limitation, the Corporation's
Class A Preferreed Stock.
Section 10 Amendment. The Articles of Incorporation of
the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special
rights of the Series B Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Series B Preferred Stock,
voting together as a single class.
IN WITNESS WHEREOF, this Certificate of Designation is
executed on behalf of the Corporation by its Chief Executive
Officer this 19th day of November, 1997.
SHOWBIZ PIZZA TIME, INC.
By: --------------------
Richard M. Frank
Chief Executive Officer
Exhibit B
Form of Right Certificate
Certificate No. R-
Rights
CUSIP
NOT EXERCISABLE AFTER NOVEMBER 25, 2007, OR EARLIER IF
REDEMPTION OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO
REDEMPTION AT $.01 PER RIGHT AND TO EXCHANGE ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT PURSUANT TO WHICH THIS
RIGHT CERTIFICATE HAS BEEN ISSUED.
Right Certificate
SHOWBIZ PIZZA TIME, INC.
This certifies that--------------, or registered assigns, is
the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms,
provisions and conditions of the Rights Agreement, dated as of
November 19, 1997 (the "Rights Agreement"), between ShowBiz Pizza
Time, Inc., a Kansas corporation (the "Company"), and Boston
EquiServe, L.P. (the "Rights Agent"), to purchase from the Company
at any time after the Distribution Date (as such term is defined in
the Rights Agreement) and prior to 5:00 P.M., New York, New York
time, on November 25, 2007, at the principal office of the Rights
Agent, or at the office of its successor as rights agent, one
one-hundredth of a fully paid non-assessable share of Series B
Junior Participating Preferred Stock, par value $100.00 per share
(the "Preferred Shares"), of the Company, at a purchase price of
$100.00 per one one-hundredth of a Preferred Share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate
with the Form of Election to Purchase duly executed. The number of
Rights evidenced by this Right Certificate (and the number of one
one-hundredths of a Preferred Share which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth
above, are the number and Purchase Price as of November 25, 1997,
based on the Preferred Shares as constituted at such date. As
provided in the Rights Agreement, the Purchase Price and the number
of one one-hundredths of a Preferred Share which may be purchased
upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of
certain events.
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Right
Certificates. Copies of the Rights Agreement are on file at the
principal executive offices of the Company and the above-mentioned
offices of the Rights Agent.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights
Agent, may be exchanged for another Right Certificate or Right
Certificates of like tenor evidencing Rights entitling the holder
to purchase a like aggregate number of Preferred Shares as the
Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right Certificate
or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at
a redemption price of $.01 per Right or (ii) may be exchanged in
whole or in part for Preferred Shares or shares of the Company's
common stock, par value $0.10 per share.
No fractional Preferred Shares or shares of the Company's
common stock will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions of Preferred Shares
which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by
depositary receipts), but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the
Preferred Shares or of any other securities of the Company which
may at any time be issuable on the exercise or exchange hereof, nor
shall anything contained in the Rights Agreement or herein be
construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders
at any meeting thereof or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights
Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of --------------, 1997.
ATTEST: SHOWBIZ PIZZA TIME, INC.
By----------------------
Countersigned:
By -----------------------
Authorized Signature
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
-----------------
(To he executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED
- - ---------------------------- hereby sells, assigns and transfers
unto------------------------------------(Please print name, address
and taxpayer identification number or social security number (as
applicable) of transferee)
- - ------------------------------------------this Right Certificate,
together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint ------------- Attorney,
to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ------------------------
Signature -------------------------------
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company
having an office or correspondent in the United States.
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person
or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
Signature ___________________________________<PAGE>
Form of Reverse Side of
Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
-----------------------------
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: SHOWBIZ PIZZA TIME, INC.
The undersigned hereby irrevocably elects to exercise --------Rights
represented by this Right Certificate to purchase the
securities issuable upon the exercise of such Rights and requests
that certificates for such securities be issued in the name of:
Please insert social security or other identifying number
(Please print name and address)
- - ----------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by
this Right Certificate, a new Right Certificate for the balance
remaining of such Rights shall be registered in the name of and
delivered to:
Please insert social security or other identifying number
- - -------------------------------------------------------------------
(Please print name and address)
- - -------------------------------------------------------------------
The undersigned elects to purchase (check one) ----- Preferred
Shares or ----- Common Shares of the Company.
Dated:----------------,----------
- - --------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association
of Securities Dealers, Inc., or a commercial bank or trust company
having an office or correspondent in the United States.<PAGE>
Form of
Reverse Side of Right Certificate -- continued
- - -------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by
this Right Certificate are not beneficially owned by an Acquiring
Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement).
----------------------------
Signature
NOTICE
-----
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written
upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be,
is not completed, the Company and the Rights Agent will deem the
beneficial owner of the Rights evidenced by this Right Certificate
to be an Acquiring Person or an Affiliate or Associate thereof (as
defined in the Rights Agreement) and such Assignment or Election to
Purchase will not be honored.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On November 19, 1997, the Board of Directors of ShowBiz Pizza
Time, Inc. (the "Company") declared a dividend of one preferred
share purchase right (a "Right") for each outstanding share of
common stock, par value $0.10 per share (the "Common Shares"), of
the Company. The dividend is payable on November 25, 1997 (or such
earlier date as may be determined by the Board of Directors of the
Company) to all holders of record of Common Shares as of the close
of business on November 19, 1997 (or such earlier date as may be
determined by the Board of Directors of the Company (the "Record
Date"). Each Right entitles the registered holder to purchase from
the Company one one-hundredth of a share of Series B Junior
Participating Preferred Stock, par value $100.00 per share (the
"Preferred Shares"), of the Company at a price of $100.00 per one
one-hundredth of a Preferred Share (the "Purchase Price"), subject
to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between the
Company and Boston EquiServe, L.P., as Rights Agent (the "Rights
Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated
persons (an "Acquiring Person") has acquired beneficial ownership
of 15% or more of the outstanding Common Shares or (ii) 10 business
days (or such later date as may be determined by action of the
Board of Directors of the Company prior to such time as any person
or group of affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of which
would result in the beneficial ownership by a person or group of
15% or more of the outstanding Common Shares (the earlier of such
dates being called the "Distribution Date"), the Rights will be
evidenced by the certificates representing Common Shares with a
copy of this Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution
Date (or earlier redemption or expiration of the Rights), the
Rights will be transferred with and only with the Common Shares.
Until the Distribution Date (or earlier redemption or expiration of
the Rights), new Common Share certificates issued after the Record
Date upon transfer or new issuance of Common Shares will contain a
notation incorporating the Rights Agreement by reference. Until
the Distribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates for Common
Shares outstanding as of the Record Date, even without such
notation or a copy of this Summary of Rights being attached
thereto, will also constitute the transfer of the Rights associated
with the Common Shares represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business
on the Distribution Date and thereafter, such separate Right
Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on November 25, 2007 (the "Final Expiration
Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, in each
case, as described below.
At any time following the Distribution Date, Rights (other
than Rights owned by an Acquiring Person and the Acquiring Person's
affiliates and associates, which will have become void) may be
exercised (subject to their earlier termination, expiration or
exchange) to acquire, in lieu of Preferred Shares, at the then
current Purchase Price of the Right, that number of Common Shares
(or if there are insufficient Common Shares, Preferred Shares or
fractions thereof) which at such time will have a market value of
two times the Purchase Price of the Right.
The Purchase Price payable, and the number of Preferred Shares
or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent
dilution (i) in the event of a stock dividend on, or a subdivision,
combination or reclassification of, the Preferred Shares, (ii) upon
the grant to holders of the Preferred Shares of certain rights or
warrants to subscribe for or purchase Preferred Shares at a price,
or securities convertible into Preferred Shares with a conversion
price, less than the then-current market price of the Preferred
Shares or (iii) upon the distribution to holders of the Preferred
Shares of evidences of indebtedness or assets (excluding regular
periodic cash dividends paid out of earnings or retained earnings
or dividends payable in Preferred Shares) or of subscription rights
or warrants (other than those referred to above).
The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise of each
Right are also subject to adjustment in the event of a stock split
of the Common Shares or a stock dividend on the Common Shares
payable in Common Shares or subdivisions, consolidations or
combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights will
not be redeemable. Each Preferred Share will be entitled to a
minimum preferential quarterly dividend payment of One Dollar and
No/100 ($1.00) per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per Common Share. In
the event of liquidation, the holders of the Preferred Shares will
be entitled to a minimum preferential liquidation payment of $100
per share but will be entitled to an aggregate payment of 100 times
the payment made per Common Share. Each Preferred Share will have
100 votes, voting together with the Common Shares. Finally, in the
event of any merger, consolidation or other transaction in which
Common Shares are exchanged, each Preferred Share will be entitled
to receive 100 times the amount received per Common Share. These
rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend,
liquidation and voting rights, the value of the one one-hundredth
interest in a Preferred Share purchasable upon exercise of each
Right should approximate the value of one Common Share.
In the event that the Company is acquired in a merger or other
business combination transaction or 50% or more of its consolidated
assets or earning power are sold after a person or group has become
an Acquiring Person, proper provision will be made so that each
holder of a Right (other than an Acquiring Person and the
affiliates and associates of such Acquiring Person, whose Rights
will have become void) will thereafter have the right to receive,
upon the exercise thereof at the then current exercise price of the
Right, that number of shares of common stock of the acquiring
company which at the time of such transaction will have a market
value of two times the Purchase Price of the Right. In the event
that any person or group of affiliated or associated persons
becomes an Acquiring Person, proper provision shall be made so that
each holder of a Right, other than Rights beneficially owned by the
Acquiring Person or the affiliates and associates of such Acquiring
Persons (which will thereafter be void), will thereafter have the
right to receive upon exercise that number of Common Shares having
a market value of two times the Purchase Price of the Right.
At any time after any person or group becomes an Acquiring
Person and prior to the acquisition by such person or group of 50%
or more of the outstanding Common Shares, the Board of Directors of
the Company may exchange the Rights (other than Rights owned by
such person or group and their respective affiliates and associates
which will have become void), in whole or in part, at an exchange
ratio of one Common Share, or one one-hundredth of a Preferred
Share (or of a share of a class or series of the Company's
preferred stock having equivalent rights, preferences and
privileges), per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an adjustment
of at least 1% in such Purchase Price. No fractional Preferred
Shares will be issued (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at
the election of the Company, be evidenced by depositary receipts)
and in lieu thereof, an adjustment in cash will be made based on
the market price of the Preferred Shares on the last trading day
prior to the date of exercise.
At any time prior to or within 10 business days following the
acquisition by a person or group of affiliated or associated
persons of beneficial ownership of 15% or more of the outstanding
Common Shares, the Board of Directors of the Company may redeem the
Rights in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). The redemption of the Rights may be made
effective at such time on such basis with such conditions as the
Board of Directors of the Company in its sole discretion may
establish. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without
limitation, the right to vote or to receive dividends.
Pursuant to the Rights Agreement, certain actions (e.g.
redeeming outstanding Rights, amending the Rights Agreement, etc.)
may only be made with the approval of the Board of Directors of the
Company, including a majority of at least three (3) Continuing
Directors (as hereinafter defined). As used herein, a Continuing
Director will mean any person (other than an Acquiring Person) or
an affiliate or associate of an Acquiring Person or a
representative of an Acquiring Person or of any such affiliate or
associate) who was a director prior to the date of the Rights
Agreement and any person (other than an Acquiring Person or an
affiliate or associate of an Acquiring Person or a representative
of an Acquiring Person or of any such affiliate or associate)
nominated for selection or elected to the Board of Directors of the
Company pursuant to the approval of a majority of the Continuing
Directors.
A copy of the Rights Agreement is available free of charge
from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated
herein by reference.
This certificate also evidences and entitles the holder
hereof to certain rights as set forth in a Rights
Agreement between ShowBiz Pizza Time, Inc. and Boston
EquiServe, L.P., dated as of November 19, 1997 (the
"Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is
on file at the principal executive offices of ShowBiz
Pizza Time, Inc. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be
evidenced by this certificate. ShowBiz Pizza Time, Inc.
will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a
written request therefor. Under certain circumstances,
as set forth in the Rights Agreement, Rights issued to
any Person who becomes an Acquiring Person (as defined in
the Rights Agreement) may become null and void.
