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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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Date of report (Date of earliest event reported): November 4, 1997
RARE HOSPITALITY INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in Charter)
Georgia 0-19924 58-1498312
(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
Building 200
8215 Roswell Road
Atlanta, Georgia 30350
(Address of Principal Executive Offices, including Zip Code)
Registrant's telephone number, including area code: (770) 399-9595
N/A
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On November 4, 1997, RARE Hospitality International, Inc. (the
"Company") entered into a Shareholder Protection Rights Agreement pursuant to
which it will distribute one right (a "Right") for each outstanding share of the
Company's Common Stock, no par value (the "Common Stock"), to shareholders of
record at the close of business on November 20, 1997 and for each share of
Common Stock issued by the Company thereafter and prior to the Separation Time
(as defined below). Each Right entitles the registered holder to purchase from
the Company one one-hundredth (1/100th) of a share (a "Unit") of Series A Junior
Participating Preferred Stock, no par value (the "Preferred Stock"), at a
purchase price of $48.00 per Unit (the "Exercise Price"), subject to adjustment.
The description and terms of the Rights are set forth in the Shareholder
Protection Rights Agreement between the Company and SunTrust Bank, Atlanta, as
Rights Agent, dated November 4, 1997 (the "Rights Agreement").
Separation Time
Initially, the Rights will be transferable only with the shares of
Common Stock with respect to which they were distributed. Until the Separation
Time the Rights will be evidenced by the certificates representing the shares of
outstanding Common Stock with which they are associated, and no separate Rights
Certificates will be distributed. The Rights will separate from the Common Stock
and the Separation Time will occur upon the earlier of (i) ten business days
(unless otherwise accelerated or delayed by the Board of Directors of the
Company) following public announcement by the Company that a person or group of
affiliated or associated persons (an "Acquiring Person") has acquired, obtained
the right to acquire, or otherwise obtained beneficial ownership of 15% or more
of the then-outstanding shares of Common Stock, or (ii) ten business days
(unless otherwise delayed by the Company's Board of Directors) following the
commencement of a tender offer or exchange offer that would result in a person
or group beneficially owning 15% or more of the then-outstanding shares of
Common Stock. An Acquiring Person does not include (a) any person who is a
beneficial owner of 15% or more of the Common Stock on November 4, 1997 (the
date of adoption of the Rights Agreement), unless such person or group shall
thereafter acquire beneficial ownership of additional Common Stock, (b) a person
who acquires beneficial ownership of 15% or more of the Common Stock without any
intention to affect control of the Company and who thereafter promptly divests
sufficient shares so that such person ceases to be the beneficial owner of 15%
or more of the Common Stock, or (c) a person who is or becomes a beneficial
owner of 15% or more of the Common Stock as a result of an option granted by the
Company in connection with an agreement to acquire or merge with the Company
prior to a Flip-In Date (as defined below).
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Transfer of Rights and Certificates
Until the Separation Time, (i) the Rights will be evidenced by Common
Stock certificates and will be transferred with and only with such Common Stock
certificates, (ii) new Common Stock certificates issued after November 20, 1997
will bear a legend incorporating the Rights Agreement by reference and (iii) the
surrender for transfer of any certificates representing outstanding Common Stock
will also constitute the surrender for transfer of the Rights associated with
the Common Stock represented by such certificate.
Promptly after the Separation Time, Rights Certificates will be mailed
to holders of record of Common Stock as of the close of business on the date
when the Separation Time occurs (other than holders of Rights that are or were
beneficially owned by an Acquiring Person or an affiliate or associate thereof
or by any transferee of any of the foregoing, which Rights shall be void) and,
thereafter, the separate Rights Certificates alone will represent the Rights.
Exercise of Rights for Common Stock
If a Flip-In Date occurs (i.e., the close of business ten business days
following a public announcement by the Company that a person has become an
Acquiring Person), and if the Company has not redeemed the Rights as described
below, then a Right entitles the holder thereof to acquire shares of Common
Stock (rather than Preferred Stock) having a value equal to twice the Right's
exercise price. Instead of issuing shares of Common Stock upon exercise of a
Right following a Flip-In Date, the Company may substitute therefor shares of
Preferred Stock at a ratio of one one-hundredth of a share of Preferred Stock
for each share of Common Stock so issuable. In the event there are not
sufficient treasury shares or authorized but unissued shares of Common Stock or
Preferred Stock to permit exercise in full of the Rights, the Company may
substitute cash, debt or equity securities or other assets (or a combination
thereof). In addition, after a Flip-In Date and prior to the time that an
Acqiring Person becomes the beneficial owner of more than 50% of the Common
Stock the Board of Directors of the Company may elect to exchange all
outstanding Rights (other than Rights that have become void) for shares of
Common Stock at an exchange ratio of one share of Common Stock per Right, as
adjusted. Notwithstanding any of the foregoing, Rights that are, or (under
certain circumstances set forth in the Rights Agreement) were, beneficially
owned by any person on or after the date such person becomes an Acquiring Person
will be null and void.
In addition, the Rights Agreement provides that if an Acquiring Person
controls the Company's Board of Directors, then Company shall not enter into an
agreement with respect to, consummate or permit to occur any: (i) consolidation,
merger or share exchange if either the Acquiring Person or an affiliate or
associate of the Acquiring Person is a party to the transaction or the terms of
the transaction are not the same for the Acquiring Person as for the other
holders of Common Stock, or (ii) sale or transfer of a majority of the Company's
assets, unless the Company enters into an agreement for the benefit of the
holders of the Rights providing that upon consummation of such transaction
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each Right shall constitute the right to purchase stock in the acquiring entity
having a value equal to twice the exercise price of the Rights for an amount in
cash equal to the exercise price of the Rights.
Exercise Period
The Rights are not exercisable until the Separation Time and will
expire at the close of business on November 4, 2007 unless earlier redeemed by
the Company as described below.
Redemption of Rights
At any time until the close of business on the Flip-In Date, the
Company may, at its option, by resolution of its Board of Directors, elect to
redeem the Rights at a price of $0.01 per Right. The Board of Directors may
condition redemption of the Rights upon the occurrence of a specified future
time or event.
Adjustments
The exercise price payable and the number of Rights outstanding are
subject to adjustment from time to time to prevent dilution in the event of a
stock dividend, stock split or reverse stock split, or other recapitalization
which would change the number of shares of Common Stock outstanding.
If prior to the Separation Time, the Company distributes securities or
assets in exchange for Common Shares (other than regular cash dividends or a
dividend paid solely in Common Shares) whether by dividend, reclassification, or
otherwise, the Corporation shall make such adjustments, if any, in the Exercise
Price, number of Rights and otherwise as the Board of Directors deems
appropriate.
Amendments
Any provisions of the Rights Agreement may be amended at any time prior
to the close of business on the Flip-In Date without the approval of holders of
the Rights, and thereafter, the Rights Agreement may be amended without approval
of the Rights holders in any way which does not materially adversely affect the
interests of the Rights holders generally or to cure an ambiguity or to correct
or supplement any provision which may be inconsistent with any other provision
or otherwise defective.
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Rights Prior to Exercise
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable.
Effect of the Rights
The Rights may have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Board of Directors of the Company unless
the offer is conditioned on a substantial number of Rights being acquired.
However, the Rights should not interfere with any merger, statutory share
exchange or other business combination approved by the Board of Directors since
the Rights may be redeemed by the Company upon resolution of the Board of
Directors at any time on or prior to the close of business ten business days
after announcement by the Company that a person has become an Acquiring Person.
Thus, the Rights are intended to encourage persons who may seek to acquire
control of the Company to initiate such an acquisition through negotiations with
the Board of Directors. However, the effect of the Rights may be to discourage a
third party from making a partial tender offer or otherwise attempting to obtain
a substantial equity position in the equity securities of, or seeking to obtain
control of, the Company. To the extent any potential acquirors are deterred by
the Rights, the Rights may have the effect of preserving incumbent management in
office.
Documents and Effect of This Summary
A copy of the Rights Agreement is included as an Exhibit to this
Report. 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.
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
No financial statements are required to be filed as part of this
Report. The following exhibits are filed as part of this Report:
EXHIBIT NO. DESCRIPTION
99.1 Shareholder Protection Rights Agreement, dated as of
November 4, 1997, between RARE Hospitality
International, Inc. and SunTrust Bank, Atlanta, as
Rights Agent
99.2 Press Release dated November 5, 1997
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
RARE HOSPITALITY INTERNATIONAL, INC.
By: /s/ Philip J. Hickey, Jr.
-----------------------------------------
Name: Philip J. Hickey, Jr.
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Title: President and Chief Operating Officer
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Dated: November 4, 1997
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EXHIBIT 99.1
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
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EXECUTION COPY
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
THIS SHAREHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time to
time, this "Agreement"), is made and entered into as of November 4, 1997 between
RARE Hospitality International, Inc., a Georgia corporation (the "Company"), and
SunTrust Bank, Atlanta, as Rights Agent (the "Rights Agent", which term shall
include any successor Rights Agent hereunder).
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has (a) authorized and
declared a dividend of one right ("Right") in respect of each share of Common
Stock (as hereinafter defined) held of record as of the close of business on
November 20, 1997 (the "Record Time") and (b) as provided in Section 2.4,
authorized the issuance of one Right in respect of each share of Common Stock
issued after the Record Time and prior to the Separation Time (as hereinafter
defined) and, to the extent provided in Section 5.3, each share of Common Stock
issued after the Separation Time;
WHEREAS, subject to Sections 3.1, 5.1 and 5.10, each Right entitles the
holder thereof, after the Separation Time, to purchase securities of the Company
(or, in certain cases, of certain other entities) pursuant to the terms and
subject to the conditions set forth herein; and
WHEREAS, the Company desires to appoint the Rights Agent to act on
behalf of the Company, and the Rights Agent is willing so to act, in connection
with the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein;
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial Owner of
15% or more of the outstanding shares of Common Stock; provided, however, that
the term "Acquiring Person" shall not include any Person (i) who is the
Beneficial Owner of 15% or more of the outstanding shares of Common Stock on the
date of this Agreement or who shall become the Beneficial Owner of 15% or more
of the outstanding shares of Common Stock solely as a result of an acquisition
by the Company of shares of Common Stock, until such time hereafter or
thereafter as any such Person shall become the Beneficial Owner (other than by
means of a stock dividend or stock split) of any additional shares of Common
Stock, (ii) who is the Beneficial Owner of 15% or more of the outstanding shares
of Common Stock but who acquired Beneficial Ownership of shares of Common Stock
without any plan or intention to seek or effect control of the Company, if such
Person promptly enters into an irrevocable commitment promptly to divest,
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and thereafter promptly divests (without exercising or retaining any power,
including voting power, with respect to such shares), sufficient shares of
Common Stock (or securities convertible into, exchangeable into or exercisable
for Common Stock) so that such Person ceases to be the Beneficial Owner of 15%
or more of the outstanding shares of Common Stock or (iii) who Beneficially Owns
shares of Common Stock consisting solely of one or more of (A) shares of Common
Stock Beneficially Owned pursuant to the grant or exercise of an option granted
to such Person by the Company in connection with an agreement to merge with, or
acquire, the Company entered into prior to a Flip-In Date, (B) shares of Common
Stock (or securities convertible into, exchangeable into or exercisable for
Common Stock) Beneficially Owned by such Person or its Affiliates or Associates
at the time of grant of such option or (C) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock) acquired by
Affiliates or Associates of such Person after the time of such grant which, in
the aggregate, amount to less than 1% of the outstanding shares of Common Stock.
In addition, the Company, any wholly-owned Subsidiary of the Company and any
employee stock ownership or other employee benefit plan of the Company or a
wholly-owned Subsidiary of the Company shall not be an Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 under the Securities Exchange Act of 1934, as such
Rule is in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own", any securities of which
such Person or any of such Person's Affiliates or Associates is or may be deemed
to be the beneficial owner pursuant to Rule 13d-3 and 13d-5 under the Securities
Exchange Act of 1934, as such Rules are in effect on the date of this Agreement
as well as any securities as to which such Person or any of such Person's
Affiliates or Associates has the right to become Beneficial Owner (whether such
right is exercisable immediately or only after the passage of time or the
occurrence of conditions) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner", or to have
"Beneficial Ownership" of, or to "Beneficially Own", any security (i) solely
because such security has been tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or Associates until such
tendered security is accepted for payment or exchange or (ii) solely because
such Person or any of such Person's Affiliates or Associates has or shares the
power to vote or direct the voting of such security pursuant to a revocable
proxy given in response to a public proxy or consent solicitation made to more
than ten holders of shares of a class of stock of the Company registered under
Section 12 of the Securities Exchange Act of 1934 and pursuant to, and in
accordance with, the applicable rules and regulations under the Securities
Exchange Act of 1934, except if such power (or the arrangements relating
thereto) is then reportable under Item 6 of Schedule 13D under the Securities
Exchange Act of 1934 (or any similar provision of a comparable or successor
report). Notwithstanding the foregoing, no officer or director of the Company
shall be deemed to Beneficially Own any securities of any other Person by virtue
of any actions such officer or director takes in such capacity. For all purposes
of this Agreement, any calculation of the number of shares of Common Stock
outstanding at any time, including for purposes of determining the percentage of
such outstanding shares of Common Stock of which any Person is the Beneficial
Owner, shall be made in accordance with the provisions of Rule 13d-3(d)(1)(i)
under the Securities Exchange Act of 1934.
"Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in Atlanta, Georgia are generally authorized
or obligated by law or executive order to close.
"close of business" on any given date shall mean 5:00 p.m. Atlanta,
Georgia time on such date (or, if such date is not a Business Day, 5:00 p.m.
Atlanta, Georgia time on the next succeeding Business Day).
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"Common Stock" shall mean the shares of Common Stock, no par value, of
the Company.
"Exchange Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 3.1(c) hereof.
"Exercise Price" shall mean, as of any date, the price at which a
holder of a Right may purchase the securities issuable upon exercise of one
whole Right. Until adjustment thereof in accordance with the terms hereof, the
Exercise Price shall equal $48.00.
"Expiration Time" shall mean the earliest of (i) the Exchange Time,
(ii) the Redemption Time, (iii) November 4, 2007 and (iv) the time of a merger
of the Company into another corporation pursuant to an agreement entered into
prior to a Flip-In Date.
"Flip-In Date" shall mean the tenth business day after any Stock
Acquisition Date or such earlier or later date as the Board of Directors of the
Company may from time to time fix by resolution adopted prior to the Flip-In
Date that would otherwise have occurred.
"Flip-Over Entity" for purposes of Section 3.2, shall mean (i) in the
case of a Flip-Over Transaction or Event described in clause (i) of the
definition thereof, the Person issuing any securities into which shares of
Common Stock are being converted or exchanged and, if no such securities are
being issued, the other party to such Flip-Over Transaction or Event and (ii) in
the case of a Flip-Over Transaction or Event referred to in clause (ii) of the
definition thereof, the Person receiving the greatest portion of the assets or
earning power being transferred in such Flip-Over Transaction or Event, provided
in all cases if such Person is a Subsidiary of a corporation, the parent
corporation shall be the Flip-Over Entity.
"Flip-Over Stock" shall mean the capital stock (or similar equity
interest) with the greatest voting power in respect of the election of directors
(or other persons similarly responsible for direction of the business and
affairs) of the Flip-Over Entity.
"Flip-Over Transaction or Event" shall mean a transaction or series of
transactions after a Flip-In Date in which, directly or indirectly, (i) the
Company shall consolidate or merge or participate in a share exchange with any
other Person if, at the time of the consolidation, merger or share exchange or
at the time the Company enters into any agreement with respect to any such
consolidation, merger or share exchange, the Acquiring Person Controls the Board
of Directors of the Company and either (A) any term of or arrangement concerning
the treatment of shares of capital stock in such consolidation, merger or share
exchange relating to the Acquiring Person is not identical to the terms and
arrangements relating to other holders of the Common Stock or (B) the Person
with whom the transaction or series of transactions occurs is the Acquiring
Person or an Affiliate or Associate of the Acquiring Person or (ii) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer) assets (A) aggregating more than 50% of the assets
(measured by either book value or fair market value) or (B) generating more than
50% of the operating income or cash flow, of the Company and its Subsidiaries
(taken as a whole) to any Person (other than the Company or one or more of its
wholly owned Subsidiaries) or to two or more such Persons which are Affiliates
or Associates or otherwise acting in concert, if, at the time of the entry by
the Company (or any such Subsidiary) into an agreement with respect to such sale
or transfer of assets, the Acquiring Person Controls the Board of Directors of
the Company. An Acquiring Person shall be deemed to "Control" the Company's
Board of Directors when, following a Flip-In Date, the persons who
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were directors of the Company before the Flip-In Date shall cease to constitute
a majority of the Company's Board of Directors.
"Market Price" per share of any securities on any date shall mean the
average of the daily closing prices per share of such securities (determined as
described below) on each of the 20 consecutive Trading Days through and
including the Trading Day immediately preceding such date; provided, however,
that if an event of a type analogous to any of the events described in Section
2.4 hereof shall have caused the closing prices used to determine the Market
Price on any Trading Days during such period of 20 Trading Days not to be fully
comparable with the closing price on such date, each such closing price so used
shall be appropriately adjusted in order to make it fully comparable with the
closing price on such date. The closing price per share of any securities on any
date shall be the last reported sale price, regular way, or, in case no such
sale takes place or is quoted on such date, the average of the closing bid and
asked prices, regular way, for each share of such securities, 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, Inc.
or, if the securities are not listed or admitted to trading on the New York
Stock Exchange, Inc., as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the securities are listed or admitted to trading
or, if the securities are not listed or admitted to trading on any national
securities exchange, as reported by The Nasdaq Stock Market, Inc.'s Nasdaq
National Market or such other system then in use, or, if on any such date the
securities are not listed or admitted to trading on any national securities
exchange or 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
securities selected by the Board of Directors of the Company; provided, however,
that if on any such date the securities are not listed or admitted to trading on
a national securities exchange or traded in the over-the-counter market, the
closing price per share of such securities on such date shall mean the fair
value per share of securities on such date as determined in good faith by the
Board of Directors of the Company, after consultation with a nationally
recognized investment banking firm, and set forth in a certificate delivered to
the Rights Agent.
"Person" shall mean any individual, firm, partnership, association,
group (as such term is used in Rule 13d-5 under the Securities Exchange Act of
1934, as such Rule is in effect on the date of this Agreement), corporation or
other entity, and shall include any successor (by merger or otherwise) of such
entity.
"Redemption Price" shall mean an amount equal to one cent ($0.01).
"Redemption Time" shall mean the time at which the right to exercise
the Rights shall terminate pursuant to Section 5.1 hereof.
"Preferred Stock" shall mean the Series A Junior Participating
Preferred Stock, no par value, of the Company created by the Articles of
Amendment in substantially the form set forth in Exhibit A hereto appropriately
completed.
"Separation Time" shall mean the close of business on the earlier of
(i) the tenth business day (or such later date as the Board of Directors of the
Company may from time to time fix by resolution adopted prior to the Separation
Time that would otherwise have occurred) after the date on which any Person
commences a tender or exchange offer which, if consummated, would result in such
Person's becoming an Acquiring Person and (ii) the Flip-In Date; provided, that
if the foregoing results in the Separation Time
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being prior to the Record Time, the Separation Time shall be the Record Time and
provided further, that if any tender or exchange offer referred to in clause (i)
of this paragraph is canceled, terminated or otherwise withdrawn prior to the
Separation Time without the purchase of any shares of Common Stock pursuant
thereto, such offer shall be deemed, for purposes of this paragraph, never to
have been made.
"Stock Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) that an Acquiring Person has become
such.
"Subsidiary" of any specified Person shall mean any corporation or
other entity of which a majority of the voting power of the equity securities or
a majority of the equity interests is Beneficially Owned, directly or
indirectly, by such Person.
"Trading Day," when used with respect to any securities, shall mean a
day on which the New York Stock Exchange, Inc. is open for the transaction of
business or, if such securities are not listed or admitted to trading on the New
York Stock Exchange, Inc., a day on which the principal national securities
exchange on which such securities are listed or admitted to trading is open for
the transaction of business or, if such securities are not listed or admitted to
trading on any national securities exchange, a day on which The Nasdaq Stock
Market, Inc.'s National Market or such other system then in use, or, if such
securities are not listed or admitted to trading on any national securities
exchange or quoted on any such system, a Business Day.
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record Time,
the Company will mail a letter summarizing the terms of the Rights to each
holder of record of Common Stock as of the Record Time, at such holder's address
as shown by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for the Common
Stock issued after the Record Time but prior to the Separation Time shall
evidence, in addition to the Common Stock represented by such certificate, one
Right for each share of Common Stock represented thereby and shall have
impressed on, printed on, written on or otherwise affixed to them the following
legend:
"Until the Separation Time (as defined in the Rights Agreement referred
to below), this certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement, dated as
of November 4, 1997 (as such may be amended from time to time, the
"Rights Agreement"), between RARE Hospitality International, Inc. (the
"Company") and SunTrust Bank, Atlanta, as Rights Agent, the terms of
which are hereby incorporated herein by reference and a copy of which
is on file at the principal executive offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights may be redeemed, may become exercisable for securities or assets
of the Company or of another entity, may be exchanged for shares of
Common Stock or other securities or assets of the Company, may expire,
may become void (if they are "Beneficially Owned" by an "Acquiring
Person" or an Affiliate or Associate thereof, as such terms are defined
in the Rights Agreement, or by any transferee of any of the foregoing)
or may be evidenced by separate certificates and may no longer be
evidenced by
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this certificate. The Company will mail or arrange for the mailing of a
copy of the Rights Agreement to the holder of this certificate without
charge promptly after the receipt of a written request therefor."
Certificates representing shares of Common Stock that are issued and outstanding
at the Record Time shall evidence, in addition to the Common Stock represented
by such certificate, one Right for each share of Common Stock evidenced thereby
notwithstanding the absence of the foregoing legend.
2.3 Exercise of Rights; Separation of Rights. (a) Subject to Sections
3.1, 5.1 and 5.10 and subject to adjustment as herein set forth, each Right will
entitle the holder thereof, after the Separation Time and prior to the
Expiration Time, to purchase, for the Exercise Price, one one-hundredth
(1/100th) of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised and (ii)
each Right will be evidenced by the certificate that evidences the share of
Common Stock with which it is associated and will be transferable only together
with, and will be transferred only by a transfer of, such associated share of
Common Stock, and the surrender for transfer of any certificates representing
outstanding Common Stock will also constitute the surrender for transfer of the
Rights associated with the Common Stock represented by such certificate.
(c) Subject to this Section 2.3 and to Sections 3.1, 5.1 and 5.10,
after the Separation Time and prior to the Expiration Time, the Rights (i) may
be exercised and (ii) may be transferred independently of shares of Common
Stock. Promptly following the Separation Time, the Rights Agent will mail to
each holder of record of Common Stock as of the Separation Time (other than any
Person whose Rights have become void pursuant to Section 3.1(b)), at such
holder's address as shown by the records of the Company (the Company hereby
agreeing to furnish copies of such records to the Rights Agent for this
purpose), (x) a Rights Certificate (as defined below) and (y) a disclosure
statement describing the Rights.
(d) Subject to Sections 3.1, 5.1 and 5.10, Rights may be exercised on
any Business Day after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent at the address set forth in Section 5.9 hereof
the Rights Certificate evidencing such Rights with an Election to Exercise (an
"Election to Exercise") substantially in the form attached to the Rights
Certificate duly completed, accompanied by payment in cash, or by certified or
official bank check or money order payable to the order of the Company, of a sum
equal to the Exercise Price multiplied by the number of Rights being exercised
and a sum sufficient to cover any transfer tax or charge which may be payable in
respect of any transfer involved in the transfer or delivery of Rights
Certificates or the issuance or delivery of certificates for shares or
depositary receipts (or both) in a name other than that of the holder of the
Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to Exercise
accompanied by payment as set forth in Section 2.3(d), and subject to Sections
3.1, 5.1 and 5.10, the Rights Agent will thereupon promptly (i)(A) requisition
from a transfer agent stock certificates evidencing such number of shares or
other securities to be purchased (the Company hereby irrevocably authorizing its
transfer agents to comply with all such requisitions) and (B) if the Company
elects pursuant to Section 5.5 not to issue certificates representing fractional
shares, requisition from the depositary selected by the Company depositary
receipts representing the fractional shares to be purchased or requisition from
the Company the amount of cash to be paid in lieu of fractional shares in
accordance with Section 5.5 and (ii) after receipt of such certificates,
depositary receipts and/or cash, deliver the same to or upon the order of the
registered
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<PAGE> 8
holder of such Rights Certificate, registered (in the case of certificates or
depositary receipts) in such name or names as may be designated by such holder.
In the event that the Company elects pursuant to Section 3.1(e) to issue other
securities and/or assets of the Company upon exercise of the Rights, the Company
will make all arrangements necessary so that such other securities and/or assets
of the Company are available for distribution by the Rights Agent, if and when
appropriate.
(f) In case the holder of any Rights shall exercise less than all the
Rights evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing the Rights remaining unexercised will be issued by the Rights Agent
to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all such
action as may be necessary to ensure that all shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Exercise Price), be duly and validly authorized,
executed, issued and delivered and fully paid and nonassessable; (ii) take all
such action as may be necessary to comply with any applicable requirements of
the Securities Act of 1933 or the Securities Exchange Act of 1934, and the rules
and regulations thereunder, and any other applicable law, rule or regulation, in
connection with the issuance of any shares upon exercise of Rights; and (iii)
pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the original issuance or delivery of
the Rights Certificates or of any shares issued upon the exercise of Rights,
provided that the Company shall not be required to pay any transfer tax or
charge which may be payable in respect of any transfer involved in the transfer
or delivery of Rights Certificates or the issuance or delivery of certificates
for shares in a name other than that of the holder of the Rights being
transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights. (a) In the event
the Company shall at any time after the Record Time and prior to the Separation
Time (i) declare or pay a dividend on Common Stock payable in Common Stock, (ii)
subdivide the outstanding Common Stock or (iii) combine the outstanding Common
Stock into a smaller number of shares of Common Stock, then (x) the Exercise
Price in effect after such adjustment will be equal to the Exercise Price in
effect immediately prior to such adjustment divided by the number of shares of
Common Stock (the "Expansion Factor") that a holder of one share of Common Stock
immediately prior to such dividend, subdivision or combination would hold
thereafter as a result thereof and (y) each Right held prior to such adjustment
will become that number of Rights equal to the Expansion Factor, and the
adjusted number of Rights will be deemed to be distributed among the shares of
Common Stock with respect to which the original Rights were associated (if they
remain outstanding) and the shares issued in respect of such dividend,
subdivision or combination, so that each such share of Common Stock will have
exactly one Right associated with it. Each adjustment made pursuant to this
paragraph shall be made as of the payment or effective date for the applicable
dividend, subdivision or combination.
In the event the Company shall at any time after the Record Time and
prior to the Separation Time issue any shares of Common Stock otherwise than in
a transaction referred to in the preceding paragraph, each such share of Common
Stock so issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing such share. To the
extent provided in Section 5.3, Rights shall be issued by the Company in respect
of shares of Common Stock that are issued or sold by the Company after the
Separation Time.
(b) In the event the Company shall at any time after the Record Time
and prior to the Separation Time issue or distribute any securities or assets in
respect of, in lieu of or in exchange for
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Common Stock (other than pursuant to a regular periodic cash dividend or a
dividend paid solely in Common Stock) whether by dividend, in a reclassification
or recapitalization (including any such transaction involving a merger,
consolidation or share exchange), or otherwise, the Company shall make such
adjustments, if any, in the Exercise Price, number of Rights and/or securities
or other property purchasable upon exercise of Rights as the Board of Directors
of the Company, in its sole discretion, may deem to be appropriate under the
circumstances in order to adequately protect the interests of the holders of
Rights generally, and the Company and the Rights Agent shall amend this
Agreement as necessary to provide for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this Section
2.4 shall be calculated to the nearest cent. Whenever an adjustment to the
Exercise Price is made pursuant to this Section 2.4, the Company shall (i)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment and (ii) promptly file
with the Rights Agent and with each transfer agent for the Common Stock a copy
of such certificate. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein and shall not be deemed to have
knowledge of any such adjustment unless and until it shall have received such a
certificate.
Rights Certificates shall represent the right to purchase the
securities purchasable under the terms of this Agreement, including any
adjustment or change in the securities purchasable upon exercise of the Rights,
even though such certificates may continue to express the right to purchase the
securities purchasable at the time of issuance of the initial Rights
Certificates.
2.5 Date on Which Exercise is Effective. Each person in whose name any
certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on the date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Exercise Price for such Rights (and any
applicable taxes and other governmental charges payable by the exercising holder
hereunder) was made; provided, however, that if the date of such surrender and
payment is a date upon which the applicable stock transfer books of the Company
are closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the applicable stock transfer books of the Company are open.
2.6 Form, Execution, Authentication, Delivery and Dating of Rights
Certificates. (a) Rights Certificates shall be in substantially the form of
Exhibit B hereto appropriately completed, representing the number of Rights held
by such holder at the Separation Time and having such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any national
securities exchange or quotation system on which the Rights may from time to
time be listed or traded, or to conform to usage ("Rights Certificate").
(b) The Rights Certificates shall be executed on behalf of the Company
by its President, its Chairman of the Board or one of its Vice Presidents under
its corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or facsimile.
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<PAGE> 10
(c) Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature and delivery of such Rights
Certificates.
(d) Promptly after the Separation Time, the Company will notify the
Rights Agent of such Separation Time and will deliver Rights Certificates
executed by the Company to the Rights Agent for countersignature, and, subject
to Section 3.1(b),, an authorized signatory of the Rights Agent shall manually
countersign and deliver such Rights Certificates to the holders of the Rights
pursuant to Section 2.3(c) hereof. No Rights Certificate shall be valid for any
purpose unless manually countersigned by the Rights Agent.
(e) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.7 Registration, Registration of Transfer and Exchange. (a) After the
Separation Time, the Company will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company will provide for the registration and transfer of Rights. The Rights
Agent is hereby appointed "Rights Registrar" for the purpose of maintaining the
Rights Register for the Company and registering Rights and transfers of Rights
after the Separation Time as herein provided. In the event that the Rights Agent
shall cease to be the Rights Registrar, the Rights Agent will have the right to
examine the Rights Register at all reasonable times after the Separation Time.
(b) After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate,
and subject to the provisions of this Section 2.7(b) and Section 2.7(c), the
Company will execute and the Rights Agent will countersign and deliver, in the
name of the holder or the designated transferee or transferees, as required
pursuant to the holder's instructions, one or more new Rights Certificates
evidencing the same aggregate number of Rights as did the Rights Certificate so
surrendered; provided, however, that the Company shall not be required to
register the transfer or exchange of any Rights after such Rights have become
void under Section 3.1(b), been exchanged under Section 3.1(c) or been redeemed
under Section 5.1.
(c) Every Rights Certificate surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company or the Rights Agent, as the case
may be, duly executed by the holder thereof or such holder's attorney duly
authorized in writing. Neither the Rights Agent not the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Rights Certificates until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request. As a
condition to the issuance of any new Rights Certificate under this Section 2.7,
the Company may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto.
(d) Except as otherwise provided in Section 3.1(b), all Rights issued
upon any registration of transfer or exchange of Rights Certificates shall be
the valid obligations of the Company, and such Rights shall be entitled to the
same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
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<PAGE> 11
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates. (a) If
any mutilated Rights Certificate is surrendered to the Rights Agent prior to the
Expiration Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the Company
shall execute and the Rights Agent shall countersign and deliver in exchange
therefor a new Rights Certificate evidencing the same number of Rights as did
the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights Agent
prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under
this Section 2.8, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Rights
Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.8 in
lieu of any destroyed, lost or stolen Rights Certificate shall evidence an
original additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be at any time enforceable by
anyone, and, subject to Section 3.1(b), shall be entitled to all the benefits of
this Agreement equally and proportionately with any and all other Rights duly
issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights Agent may deem and treat the person in whose
name such Rights Certificate (or, prior to the Separation Time, such Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary. As used in this
Agreement, unless the context otherwise requires, the term "holder" of any
Rights shall mean the registered holder of such Rights (or, prior to the
Separation Time, the associated shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights Certificates
surrendered upon exercise or for registration of transfer or exchange shall, if
surrendered to any person other than the Rights Agent, be delivered to the
Rights Agent and, in any case, shall be promptly canceled by the Rights Agent.
The Company may at any time deliver to the Rights Agent for cancellation any
Rights Certificates previously countersigned and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Rights Certificates
so delivered shall be promptly canceled by the Rights Agent. No Rights
Certificates shall be countersigned in lieu of or in exchange for any Rights
Certificates canceled as provided in this Section 2.10, except as expressly
permitted by this Agreement. The Rights Agent shall return all canceled Rights
Certificates to the Company.
2.11 Agreement of Rights 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:
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<PAGE> 12
(a) prior to the Separation Time, each Right will be transferable only
together with, and will be transferred by a transfer of, the associated share of
Common Stock;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Common Stock certificate) for registration of
transfer, the Company, the Rights Agent and any agent of the Company or the
Rights Agent may deem and treat the person in whose name the Rights Certificate
(or, prior to the Separation Time, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become void;
(e) this Agreement may be supplemented or amended from time to time
pursuant to Section 2.4(b) or 5.4 hereof; and
(f) 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 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.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-In. (a) In the event that prior to the Expiration Time a
Flip-In Date shall occur, except as provided in this Section 3.1, each Right
shall constitute the right to purchase from the Company, upon exercise thereof
in accordance with the terms hereof (but subject to Section 5.10), that number
of shares of Common Stock having an aggregate Market Price on the Stock
Acquisition Date equal to twice the Exercise Price for an amount in cash equal
to the Exercise Price (such right to be appropriately adjusted in order to
protect the interests of the holders of Rights generally in the event that on or
after such Stock Acquisition Date an event of a type analogous to any of the
events described in Section 2.4(a) or (b) shall have occurred with respect to
the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring Person
or an Affiliate or Associate thereof or by any transferee, direct or indirect,
of any of the foregoing shall become void and any holder of such Rights
(including transferees) shall thereafter have no right to exercise or transfer
such Rights under any provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person presenting the
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<PAGE> 13
same will not complete the certification set forth at the end of the form of
assignment or notice of election to exercise and provide such additional
evidence of the identity of the Beneficial Owner and its Affiliates and
Associates (or former Beneficial Owners and their Affiliates and Associates) as
the Company shall reasonably request, then the Company shall be entitled
conclusively to deem the Beneficial Owner thereof to be an Acquiring Person or
an Affiliate or Associate thereof or a transferee of any of the foregoing and
accordingly will deem the Rights evidenced thereby to be void and not
transferable or exercisable.
(c) The Board of Directors of the Company may, at its option, at any
time after a Flip-In Date and prior to the time that an Acquiring Person becomes
the Beneficial owner of more than 50% of the outstanding shares of Common Stock,
elect to exchange all (but not less than all) the then-outstanding Rights (which
shall not include Rights that have become void pursuant to the provisions of
Section 3.1(b)) for shares of Common Stock at an exchange ratio of one share of
Common Stock per Right, appropriately adjusted in order to protect the interests
of holders of Rights generally in the event that after the Separation Time an
event of a type analogous to any of the events described in Section 2.4(a) or
(b) shall have occurred with respect to the Common Stock (such exchange ratio,
as adjusted from time to time, being hereinafter referred to as the "Exchange
Ratio").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right (other
than Rights that have become void pursuant to Section 3.1(b)) will thereafter
represent only the right to receive a number of shares of Common Stock equal to
the Exchange Ratio. Promptly after the action of the Board of Directors of the
Company electing to exchange the Rights, the Company shall give notice thereof
(specifying the steps to be taken to receive shares of Common Stock in exchange
for Rights) to the Rights Agent and the holders of the Rights (other than Rights
that have become void pursuant to Section 3.1(b)) outstanding immediately prior
thereto by mailing such notice in accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued upon the
exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d) shall for
all purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate shall be dated, the date upon which
the Rights Certificate evidencing such Rights was duly surrendered and payment
of any applicable taxes and other governmental charges payable by the holder was
made; provided, however, that if the date of such surrender and payment is a
date upon which the stock transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
Certificate shall be dated, the next succeeding Business Day on which the stock
transfer books of the Company are open.
(d) Whenever the Company shall become obligated under Section 3.1(a) or
(c) to issue shares of Common Stock upon exercise of or in exchange for Rights,
the Company, at its option, may substitute therefor shares of Preferred Stock,
at a ratio of one one-hundredth (1/100th) of a share of Preferred Stock for each
share of Common Stock so issuable.
(e) In the event that there shall not be sufficient treasury shares or
authorized but unissued shares of Common Stock or Preferred Stock of the Company
to permit the exercise or exchange in full of the Rights in accordance with
Section 3.1(a) or (c), the Company shall either (i) call a meeting of
shareholders seeking approval to cause sufficient additional shares to be
authorized (provided that if such approval is not obtained the Company will take
the action specified in clause (ii) of this sentence) or (ii) take such action
as shall be necessary to ensure and provide, to the extent permitted by
applicable law and any agreements or instruments in effect on the Stock
Acquisition Date to which it is a party, that each Right
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<PAGE> 14
shall thereafter constitute the right to receive, (x) at the Company's option,
either (A) in return for the Exercise Price, cash, debt or equity securities or
other assets (or a combination thereof) having a fair value equal to twice the
Exercise Price, or (B) without payment of consideration (except as otherwise
required by applicable law), cash, debt or equity securities or other assets (or
a combination thereof) having a fair value equal to the Exercise Price, or (y)
if the Board of Directors of the Company elects to exchange the Rights in
accordance with Section 3.1(c), debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the product of the Market
Price of a share of Common Stock on the Flip-In Date times the Exchange Ratio in
effect on the Flip-In Date, where in any case set forth in (x) or (y) above the
fair value of such debt or equity securities or other assets shall be as
determined in good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking firm.
3.2 Flip-over. (a) Prior to the Expiration Time, the Company shall not
enter into any agreement with respect to, consummate or permit to occur any
Flip-Over Transaction or Event unless and until it shall have entered into a
supplemental agreement with the Flip-Over Entity, for the benefit of the holders
of the Rights (other than holders of Rights that have become void pursuant to
Section 3.1(b)), providing that, upon consummation or occurrence of the
Flip-Over Transaction or Event (i) each Right (other than Rights that have
become void pursuant to Section 3.1(b)) shall thereafter constitute the right to
purchase from the Flip-Over Entity, upon exercise thereof in accordance with the
terms hereof, that number of shares of Flip-Over Stock of the Flip-Over Entity
having an aggregate Market Price on the date of consummation or occurrence of
such Flip-Over Transaction or Event equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such Right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally
(other than holders of Rights that have become void pursuant to Section 3.1(b))
in the event that after such date of consummation or occurrence an event of a
type analogous to any of the events described in Section 2.4(a) or (b) shall
have occurred with respect to the Flip-Over Stock) and (ii) the Flip-Over Entity
shall thereafter be liable for, and shall assume, by virtue of such Flip-Over
Transaction or Event and such supplemental agreement, all the obligations and
duties of the Company pursuant to this Agreement. The provisions of this Section
3.2 shall apply to successive Flip-Over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be redeemed
pursuant to Section 5.1 hereof in connection therewith, the Company shall not
enter into any agreement with respect to, consummate or permit to occur any
Flip-Over Transaction or Event if at the time thereof there are any rights,
warrants or securities outstanding or any other arrangements, agreements or
instruments that would eliminate or otherwise diminish in any material respect
the benefits intended to be afforded by this Rights Agreement to the holders of
Rights upon consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) The Company hereby appoints the Rights Agent to act as
agent for the Company in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. 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, its directors,
officers, employees and agents for, and to hold each of them harmless against,
any loss, liability, or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent or such indemnified party,
for anything done or omitted to be done by the Rights Agent in connection with
the acceptance and administration of this Agreement or the exercise or
performance of
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<PAGE> 15
its duties hereunder, including the costs and expenses of defending against any
claim of liability. The indemnity provided in this Section 4.1(a) shall survive
the expiration of the Rights and the termination of this Agreement.
(b) The Rights Agent shall be protected and shall incur no liability
for or in respect of any action taken, suffered or omitted by it in connection
with its administration of this Agreement or the exercise or performance of its
duties hereunder in reliance upon any certificate for securities purchasable
upon exercise of Rights, Rights Certificate, certificate 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.
4.2 Merger or Consolidation or Change of Name of Rights Agent. (a) Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent is a party, or any corporation succeeding to the shareholder services
business of the Rights Agent or any successor Rights Agent, will 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 4.4 hereof. In case at the time
such successor Rights Agent succeeds to the agency created by this Agreement any
of the Rights Certificates have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates have not been countersigned, any successor
Rights Agent may countersign such Rights 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 Rights Certificates will have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at
such time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; and in case at that time any
of the Rights Certificates shall not have been countersigned, the Rights Agent
may countersign such Rights Certificates either in its prior name or in its
changed name; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
4.3 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 Rights 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 advice or opinion of such counsel will be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such advice or
opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent deems 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 a
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<PAGE> 16
person believed by the Rights Agent to be the President, the Chairman of the
Board, the Chief Financial Officer or any Vice President and by the Treasurer or
any Assistant Treasurer or the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate will 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 will be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have been
made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect of
the validity of any provision of this Agreement or the execution and delivery
hereof (except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any certificate for
securities purchasable upon exercise of Rights or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 3.1(b) hereof) or any adjustment required under any provision of this
Agreement or responsible for the manner, method or amount of any such adjustment
or the ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights after receipt of the
certificate contemplated by Section 2.4 describing any such adjustment); nor
will it by any act hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any securities purchasable upon exercise
of Rights or any Rights or as to whether any securities purchasable upon
exercise of Rights will, when issued, be duly and validly authorized, executed,
issued and delivered and 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
person believed by the Rights Agent to be the President or the Chairman of the
Board, the Chief Financial Officer or any Vice President or the Secretary or any
Assistant Secretary or the Treasurer or any Assistant Treasurer of the Company,
and to apply to such persons 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 person, or for any delay
in acting while awaiting instructions. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on or after which such action shall be
taken or such omission shall be effective. The Rights Agent shall not be liable
for any action taken by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any officer of the Company actually receives such application, unless any such
officer shall have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an
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<PAGE> 17
omission), the Rights Agent shall have received written instructions in response
to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any shareholder, director, officer or employee
of the Rights Agent may buy, sell or deal in Common Stock, 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 will 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 the Rights Agent was not grossly negligent in
the selection and continued employment thereof.
(j) The Rights Agent undertakes only the express duties and obligations
imposed on it by this Agreement and no implied duties or obligations shall be
read into this Agreement against the Rights Agent.
(k) Anything in this Agreement to the contrary notwithstanding, in no
event shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits).
(l) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
4.4 Change of Rights Agent. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to each transfer agent of Common Stock by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.9. The Company may
remove the Rights Agent upon 30 days notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. If the
Rights Agent should resign or be removed or otherwise become incapable of
acting, the Company will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 days after 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 any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then the holder of any Rights may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States or of the State of Georgia or any other State of the United
States, in good standing, which is authorized under such laws to exercise the
powers of the Rights Agent contemplated by this Agreement and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000 or (b) an Affiliate of a corporation described in the
immediately preceding clause (a). After appointment, the successor Rights Agent
will be vested with the same powers, rights, duties and
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<PAGE> 18
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 will file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock, and mail a notice thereof in
writing to the holders of the Rights. Failure to give any notice provided for in
this Section 4.4, 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.
ARTICLE V
MISCELLANEOUS
5.1 Redemption. (a) The Company may, at its option, by resolution of
its Board of Directors, at any time prior to the close of business on the
Flip-In Date, elect to redeem all (but not less than all) of the then
outstanding Rights at the Redemption Price and the Company, at its option, may
pay the Redemption Price, either in cash or shares of Common Stock or other
securities of the Company deemed by the Board of Directors, in the exercise of
its sole discretion, to be at least equivalent in value to the Redemption
Price.
(b) Immediately upon the action of the Board of Directors of the
Company electing to redeem the Rights (or, if the resolution of the Board of
Directors electing to redeem the Rights states that the redemption will not be
effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further action and without
any notice, the right to exercise the Rights will terminate and each Right will
thereafter represent only the right to receive the Redemption Price in cash or
securities, as determined by the Board of Directors. Promptly after the Rights
are redeemed, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice in
accordance with Section 5.9.
5.2 Expiration. The Rights and this Agreement shall expire at the
Expiration Time and no Person shall have any rights pursuant to this Agreement
or any Right after the Expiration Time, except, if the Rights are exchanged or
redeemed, as provided in Section 3.1 or 5.1 hereof.
5.3 Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the number or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock by the Company
following the Separation Time and prior to the Redemption Time or Expiration
Time pursuant to the terms of securities convertible or redeemable into shares
of Common Stock or to options, in each case issued or granted prior to, and
outstanding at, the Separation Time, the Company shall issue to the holders of
such shares of Common Stock, Rights Certificates representing the appropriate
number of Rights in connection with the issuance or sale of such shares of
Common Stock; provided, however, in each case, (i) no such Rights Certificate
shall be issued, if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or to the Person to whom such Rights
Certificates would be issued, (ii) no such Rights Certificates shall be issued
if, and to the extent that, appropriate adjustment shall have otherwise been
made in lieu of the issuance thereof, and (iii) the Company shall have no
obligation to distribute Rights Certificates to any Acquiring Person or
Affiliate or Associate of an Acquiring Person or any transferee of any of the
foregoing.
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<PAGE> 19
5.4 Supplements and Amendments. The Company and the Rights Agent may
from time to time supplement or amend this Agreement without the approval of any
holders of Rights (i) prior to the close of business on the Flip-In Date, in any
respect and (ii) after the close of business on the Flip-In Date, to make any
changes that the Company may deem necessary or desirable and which shall not
materially adversely affect the interests of the holders of Rights generally
(other than an Acquiring Person, or an Affiliate or Associate of an Acquiring
Person) or in order to cure any ambiguity or to correct or supplement any
provision contained herein which may be inconsistent with any other provisions
herein or otherwise defective. The Rights Agent will duly execute and deliver
any supplement or amendment hereto requested by the Company upon receipt of a
certificate from the Company that such supplement or amendment satisfies the
terms of the preceding sentence. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment that changes the rights
and duties of the Rights Agent under this Agreement shall be effective without
the consent of the Rights Agent.
5.5 Fractional Shares. If the Company elects not to issue certificates
representing fractional shares upon exercise or redemption of Rights, the
Company shall, in lieu thereof, in the sole discretion of the Board of
Directors, either (a) evidence such fractional shares by depositary receipts
issued pursuant to an appropriate agreement between the Company and a depositary
selected by it, providing that each holder of a depositary receipt shall have
all of the rights, privileges and preferences to which such holder would be
entitled as a beneficial owner of such fractional share, or (b) sell such shares
on behalf of the holders of such Rights and pay to the registered holder of such
Rights the appropriate fraction of price per share received upon such sale.
5.6 Rights of Action. Subject to the terms of this Agreement (including
Section 3.1(b)), rights of action in respect of this Agreement, other than
rights of action vested solely in the Rights Agent, are vested in the respective
holders of the Rights; and any holder of any Rights, without the consent of the
Rights Agent or of the holder of any other Rights, may, on such holder's own
behalf and for such holder's own benefit and the benefit of other holders of
Rights, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, such holder's
right to exercise such holder Rights in the manner provided in such holder's
Rights 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.
5.7 Holder of Rights Not Deemed a Shareholder. No holder, as such, of
any Rights shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of shares or any other securities which may at any time be
issuable on the exercise of such Rights, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of any Rights,
as such, any of the rights of a shareholder of the Company or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting shareholders (except as
provided in Section 5.8 hereof), or to receive dividends or subscription rights,
or otherwise, until such Rights shall have been exercised or exchanged in
accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose after
the Separation Time and prior to the Expiration Time (i) to effect or permit
occurrence of any Flip-Over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section 5.9
hereof, a notice of such
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<PAGE> 20
proposed action, which shall specify the date on which such Flip-Over
Transaction or Event, liquidation, dissolution, or winding up is to take place,
and such notice shall be so given at least 20 Business Days prior to the date of
the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
RARE Hospitality International, Inc.
8215 Roswell Road
Building 200
Atlanta, Georgia 30350
Attention: Secretary
Any notice or demand authorized or required by this Agreement to be
given or made by the Company or by the holder of any Rights to or on the Rights
Agent shall be sufficiently given or made if delivered or sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Company) as follows:
SunTrust Bank, Atlanta
P.O. Box 4625
Mail Code 258
Atlanta, Georgia 30302
Attention: Department Manager
Notices or demands authorized or required by this Agreement to be given
or made by the Company or the Rights Agent to or on the holder of any Rights
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as it
appears upon the registry books of the Rights Agent or, prior to the Separation
Time, on the registry books of the transfer agent for the Common Stock. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice.
Failure to give a notice pursuant to the provisions of this Agreement
shall not affect the validity of any action taken hereunder.
5.10 Suspension of Exercisability. To the extent that the Company
determines in good faith that some action will or need be taken pursuant to
Section 2.3(g) or Section 3.1, the Company may suspend the exercisability of the
Rights for ninety (90) days and any additional period that may be reasonable in
order to take such action or comply with such laws. In the event of any such
suspension, the Company shall issue as promptly as practicable a public
announcement stating that the exercisability or exchangeability of the Rights
has been temporarily suspended. Notice thereof pursuant to Section 5.9 shall not
be required.
5.11 Costs of Enforcement. The Company agrees that if the Company or
any other Person the securities of which are purchasable upon exercise of Rights
fails to fulfill any of its obligations pursuant to this Agreement, then the
Company or such Person will reimburse the holder of any Rights for the costs and
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<PAGE> 21
expenses (including legal fees) incurred by such holder in actions to enforce
such holder's rights pursuant to any Rights or this Agreement.
5.12 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.
5.13 Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
holders of the Rights any legal or equitable right, remedy or claim under this
Agreement and this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.
5.14 Determination 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 (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement. All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors of the Company, in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board of Directors of the Company to any
liability to the holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT ISSUED HEREUNDER
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF GEORGIA 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.
5.17 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.
5.18 Severability. If any term or provision hereof or the application
thereof to any circumstance shall in any jurisdiction, and to any extent, be
invalid or unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
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<PAGE> 22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
RARE HOSPITALITY INTERNATIONAL, INC.
By: /s/ Philip J. Hickey, Jr.
-------------------------------------
Name: Philip J. Hickey, Jr.
-------------------------------------
Title: President and Chief Operating Officer
-------------------------------------
SUNTRUST BANK, ATLANTA
By: /s/ A. C. Conn
-------------------------------------
Name: A. C. Conn
-------------------------------------
Title: Group Vice President
-------------------------------------
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<PAGE> 23
EXHIBIT A
ARTICLES OF AMENDMENT
TO THE ARTICLES OF INCORPORATION OF
RARE HOSPITALITY INTERNATIONAL, INC.
1.
The name of the corporation is "Rare Hospitality International, Inc."
2.
The articles of incorporation of Rare Hospitality International, Inc.
are amended by adding the attached Exhibit A as Exhibit A to the Company's
Amended and Restated Articles of Incorporation.
3.
The amendment was adopted on _____________.
4.
The amendment was duly adopted by the board of directors of Rare
Hospitality International, Inc.
IN WITNESS WHEREOF, Rare Hospitality International, Inc. has caused
these Articles of Amendment to be executed as of ______________, ________.
RARE HOSPITALITY
INTERNATIONAL, INC.
By:
--------------------------
Name:
--------------------------
Title:
--------------------------
<PAGE> 24
EXHIBIT A
TO THE AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF RARE HOSPITALITY INTERNATIONAL, INC.
DESIGNATING THE PREFERENCES AND OTHER RIGHTS OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
There is hereby designated, of the authorized but unissued shares of
Preferred Stock of the Corporation, a series thereof, and the number of shares,
voting powers, designation, preferences, and relative, participating, optional,
and other special rights, and the qualifications, limitations, and restrictions
thereof, of the shares of such series (in addition to those set forth in the
Articles of Incorporation, which are applicable to the Preferred Stock of all
series), shall be as follows:
(1) Designation and Number of Shares. The designation of this series
of Preferred Stock shall be "Series A Junior Participating Preferred Stock"
(hereinafter called "this Series"), to initially consist of 500,000 shares,
which number may from time to time be increased or decreased (but not below the
number then outstanding) by the Board of Directors by filing additional
articles of amendment to the Corporation's articles of incorporation. The
shares of this Series are sometimes hereinafter referred to as the "Shares."
Shares of this Series may be issued in fractional shares, which fractional
shares shall entitle the holder, in proportion to such holder's fractional
share, to all rights of a holder of a whole share of this Series.
(2) Distributions.
(a) Distribution Rights. The holders of whole or fractional
Shares shall be entitled to receive, when, as, and if declared by the
Board of Directors, subject to restrictions imposed by the Georgia
Business Corporation Code or the Articles of Incorporation on
distributions to shareholders, and subject to the rights of the
holders of any shares of any series of Preferred Stock ranking prior
and superior to this series with respect to dividends, (i) on each
date that dividends or other distributions (other than dividends or
distributions payable in Common Stock of the Corporation) are payable
on or in respect of Common Stock comprising part of the Reference
Package (as defined below), in an amount per whole share of this
Series equal to the aggregate amount of dividends or other
distributions (other than dividends or distributions payable in Common
Stock of the Corporation) that would be payable on such date to a
holder of the Reference Package and (ii) on the last day of March,
June, September and December in each year, in an amount per whole
share of this Series equal to the excess (if any) of $1.00 over the
aggregate
<PAGE> 25
dividends paid per whole share of this Series during the
three-month period ending on such last day. Each such dividend shall
be paid to the holders of record of shares of this Series on the date,
not exceeding sixty days preceding such dividend or distribution
payment date, fixed for that purpose by the Board of Directors in
advance of payment of each particular dividend or distribution.
Dividends on each full and each fractional share of this Series shall
be cumulative from the date such full or fractional share is
originally issued; provided that any such full or fractional share
originally issued after a dividend record date and on or prior to the
dividend payment date to which such record date relates shall not be
entitled to receive the dividend payable on such dividend payment date
or any amount in respect of the period from such original issuance to
such dividend payment date. The term "Reference Package" shall
initially mean 100 shares of Common Stock, no par value ("Common
Stock"), of the Corporation. In the event the Corporation shall at any
time (i) declare or pay a dividend on any Common Stock payable in
Common Stock, (ii) subdivide any Common Stock or (iii) combine any
Common Stock into a smaller number of shares, then and in each such
case the Reference Package after such event shall be the Common Stock
that a holder of the Reference Package immediately prior to such event
would hold thereafter as a result thereof. Holders of shares of this
Series shall not be entitled to any dividends, whether payable in
cash, property or stock, in excess of full cumulative dividends, as
herein provided on this Series.
So long as any shares of this Series are outstanding, no
dividend (other than a dividend in Common Stock or in any other stock
ranking junior to this Series as to dividends and upon liquidation)
shall be declared or paid or set aside for payment or other
distribution declared or made upon the Common Stock or upon any other
stock ranking junior to this Series as to dividends or upon
liquidation, nor shall any Common Stock nor any other stock of the
Corporation ranking junior to or on a parity with this Series as to
dividends or upon liquidation be redeemed, purchased or otherwise
acquired for any consideration (or any moneys to be paid to or made
available for a sinking fund for the redemption of any shares of any
such stock) by the Corporation (except by conversion into or exchange
for stock of the Corporation ranking junior to this Series as to
dividends and upon liquidation), unless, in each case, the full
cumulative dividends (including the dividend to be due upon payment of
such dividend, distribution, redemption, purchase or other
acquisition) on all outstanding shares of this Series shall have been,
or shall contemporaneously be, paid.
(b) Shares Purchased by Corporation. Shares of this Series
purchased by the Corporation shall be canceled and shall revert to
authorized but unissued shares of Preferred Stock undesignated as to
series, which shares may thereafter be provided for and designated by
the
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<PAGE> 26
Board of Directors pursuant to Article III of the Amended and
Restated Articles of Incorporation as part of a series of Preferred
Stock to the same extent as if such shares had not previously been
provided for and designated as part of a series of Preferred Stock;
but such shares shall not be reissued as shares of this Series.
(3) Rights of Redemption. The shares of this Series shall not be
redeemable.
(4) Rights on Liquidation, Dissolution, or Winding Up.
(a) In the event of any liquidation, dissolution or winding
up of the affairs of the Corporation, whether voluntary or
involuntary, the holders of full and fractional shares of this Series
shall be entitled, before any distribution or payment is made on any
date to the holders of the Common Stock or any other stock of the
Corporation ranking junior to this Series upon liquidation, to be paid
in full an amount per whole share of this Series equal to the greater
of (A) $1.00 or (B) the aggregate amount distributed or to be
distributed prior to such date in connection with such liquidation,
dissolution or winding up to a holder of the Reference Package (such
greater amount being hereinafter referred to as the "Liquidation
Preference"), together with accrued dividends to such distribution or
payment date, whether or not earned or declared. If such payment shall
have been made in full to all holders of shares of this Series, the
holders of shares of this Series as such shall have no right or claim
to any of the remaining assets of the Corporation.
(b) In the event the assets of the Corporation available for
distribution to the holders of shares of this Series upon any
liquidation, dissolution or winding up of the Corporation, whether
voluntary or involuntary, shall be insufficient to pay in full all
amounts to which such holders are entitled pursuant to paragraph (a)
above, no such distribution shall be made on account of any shares of
any other class or series of Preferred Stock ranking on a parity with
the shares of this Series upon such liquidation, dissolution or
winding up unless proportionate distributive amounts shall be paid on
account of the shares of this Series, ratably in proportion to the
full distributable amounts for which holders of all such parity shares
are respectively entitled upon such liquidation, dissolution or
winding up.
(c) Upon the liquidation, dissolution or winding up of the
Corporation, the holders of shares of this Series then outstanding
shall be entitled to be paid out of assets of the Corporation
available for distribution to its stockholders all amounts to which
such holders are entitled pursuant to paragraph (a) above before any
payment shall be made to the holders of
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<PAGE> 27
Common Stock or any other stock of the Corporation ranking junior
upon liquidation to this Series.
(d) For purposes of this Section (4), the consolidation or
merger of, or binding share exchange by, the Corporation with any
other corporation shall not be deemed to constitute a liquidation,
dissolution or winding up of the corporation.
(5) Merger, Consolidation, Share Exchange. In the event of any merger,
consolidation, reclassification 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 the shares of this Series
shall at the same time be similarly exchanged or changed in an amount per whole
share equal to the aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, that a holder of the Reference
Package would be entitled to receive as a result of such transaction.
(6) Voting Rights. In addition to any other vote or consent of
shareholders required by law or by the Articles of Incorporation, as amended,
of the Corporation, each whole share of this Series shall, on any matter, vote
as a class with any other capital stock comprising part of the Reference
Package and voting on such matter and shall have the number of votes thereon
that a holder of the Reference Package would have.
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<PAGE> 28
EXHIBIT B
FORM OF RIGHTS CERTIFICATE
Certificate No. R- [Number] Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE OPTION OF
THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES OR ASSOCIATES THEREOF (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE
FOREGOING WILL BE VOID.
RIGHTS CERTIFICATE
RARE HOSPITALITY INTERNATIONAL, INC.
This certifies that _______________________, or registered assigns, is
the registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Shareholder Protection Rights Agreement, dated as of November
4, 1997 (as amended from time to time, the "Rights Agreement"), between RARE
Hospitality International, Inc., a Georgia corporation (the "Company"), and
SunTrust Bank, Atlanta, as Rights Agent (the "Rights Agent," which term shall
include any successor Rights Agent under the Rights Agreement), to purchase
from the Company at any time after the Separation Time (as such term is defined
in the Rights Agreement) and prior to the close of business on November 4,
2007, one one-hundredth (1/100th) of a fully paid share of Series A Junior
Participating Preferred Stock, no par value (the "Preferred Stock"), of the
Company (subject to adjustment as provided in the Rights Agreement) at the
Exercise Price referred to below, upon presentation and surrender of this
Rights Certificate with the Form of Election to Exercise duly executed at the
principal office of the Rights Agent. The Exercise Price shall initially be
$48.00 per Right and shall be subject to adjustment in certain events as
provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase
securities of an entity other than the Company or securities or assets of the
Company other than Preferred Stock, all as provided in the Rights Agreement.
This Rights 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 Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available without cost upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the office of the Rights Agent designated for such purpose,
may be exchanged for another Rights Certificate or Rights Certificates of like
tenor evidencing an aggregate number of Rights equal to the aggregate number of
Rights evidenced by the Rights Certificate or Rights Certificates surrendered.
If this Rights Certificate shall be exercised in part, the registered holder
shall be entitled to receive, upon surrender hereof, another Rights Certificate
or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, each Right
evidenced by this Certificate may be (a) redeemed by the Company under certain
circumstances, at its option, at a redemption price of $0.01 per Right, or (b)
exchanged by the Company under certain circumstances, at its option, for one
share of
<PAGE> 29
Common Stock or one one-hundredth (1/100th) of a share of Preferred
Stock per Right (or, in certain cases, other securities or assets of the
Company), subject in each case to adjustment in certain events as provided in
the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of any
securities which may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a shareholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement), or
to receive dividends or subscription rights, or otherwise, until the Rights
evidenced by this Rights Certificate shall have been exercised or exchanged as
provided in the Rights Agreement. This Rights 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.
Date:
-------------------------
ATTEST: RARE HOSPITALITY INTERNATIONAL, INC.
By:
- ------------------------------ ----------------------------------
Secretary Title:
-------------------------------
Countersigned:
SUNTRUST BANK, ATLANTA
By:
---------------------------
Authorized Signature
-2-
<PAGE> 30
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED _________________ hereby sells, assigns and
transfers unto
-----------------------------------------------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ______________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated:_____________________________, 19___.
Signature Guaranteed:
------------------------------------------
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
Signatures must be guaranteed by an eligible guarantor institution ( a
bank, stockbroker, savings and loan association or credit union with membership
in an approved signature medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
-----------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of
Rights and shares of Common Stock, that the Rights evidenced by this Rights
Certificate are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
--------------------------
Signature
-----------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported assignment, the Company will deem the Beneficial
Owner of the Rights evidenced by the enclosed Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) or a transferee of any of the foregoing and accordingly will deem
the Rights evidenced by such Rights Certificate to be void and not transferable
or exercisable.
<PAGE> 31
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: RARE HOSPITALITY INTERNATIONAL, INC.
The undersigned hereby irrevocably elects to exercise_________________
whole Rights represented by the attached Rights Certificate to purchase the
shares of Series A Junior Participating Preferred Stock issuable upon the
exercise of such Rights and requests that certificates for such shares be
issued in the name of:
---------------------------------
Address:
Social Security or other Taxpayer
Identification Number:
-----------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
---------------------------------
Address:
Social Security or other Taxpayer
Identification Number:
-----------
Dated:_______________________, 19___
Signature Guaranteed:
-------------------------------
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
Signatures must be guaranteed by an eligible guarantor institution ( a
bank, stockbroker, savings and loan association or credit union with membership
in an approved signature medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
<PAGE> 32
-----------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of
Rights and shares of Common Stock, that the Rights evidenced by this Rights
Certificate are not, and, to the knowledge of the undersigned, have never been,
Beneficially Owned by an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement).
--------------------------------
Signature
-----------------------------------------------------------------------------
NOTICE
------
In the event the certification set forth above is not completed in
connection with a purported assignment, the Company will deem the Beneficial
Owner of the Rights evidenced by the enclosed Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) or a transferee of any of the foregoing and accordingly will deem
the Rights evidenced by such Rights Certificate to be void and not transferable
or exercisable.
-2-
<PAGE> 1
EXHIBIT 99.2
FORM OF PRESS RELEASE
<PAGE> 2
RARE Hospitality International, Inc. Contract: Anne D. Huemme
Chief Financial Officer
(770) 399-9595
RARE HOSPITALITY INTERNATIONAL, INC.
ADOPTS SHAREHOLDER RIGHTS PLAN
ATLANTA GA (November 5, 1997) - RARE Hospitality International, Inc.
(Nasdaq/NM:RARE) today announced that its Board of Directors has adopted a
shareholder protection rights plan designed to enhance the ability of all
shareholders to realize the long-term value of their investment in the Company.
The rights plan provides that one preferred stock purchase right will
be distributed as a dividend on each outstanding share of common stock of the
Company held of record as of the close of business on November 20, 1997.
George W. McKerrow, Jr., Chairman of the Board and Chief Executive
Officer of the Company, stated: "The rights plan does not prevent an acquisition
of the Company, but it is designed to protect shareholders from abusive
attempts to acquire control of the Company at a price which would deny
shareholders the full value of their investment." Mr. McKerrow also noted that
such plans have been adopted by a significant number of public corporations in
recent years. The Board's action came after consulting with legal and other
advisors.
Each right will entitle holders of a share of common stock to purchase
one one-hundredth of a share of a new series of junior participating preferred
stock of the Company at an exercise price initially equal to $48.00. Each such
fractional share of preferred stock is equivalent in voting power to one share
of the Company's common stock and would be paid dividends at least equal to the
dividends paid on each share of common stock. The rights will be exercisable
only if a person or group acquires beneficial ownership of 15% or more of the
Company's common stock, or announces a tender or exchange offer upon
consummation of which such person or group would beneficially own 15% or more
of the Company's common stock. The rights are not triggered by present
beneficial holders of 15% or more of the common stock unless they subsequently
increase their beneficial holdings.
If a person or group becomes a beneficial owner of 15% or more of the
Company's common stock, then each right not owned by the person or group
entitles its holder to purchase, for an amount of cash equal to the right's
then-current exercise price, shares of the Company's common stock (or in certain
circumstances as determined by the Company, a combination of cash, property,
shares of common stock or other securities) having a value equal to twice the
right's exercise price. (For example, at a market price of $9 per share and a
then-current exercise price of $48, each right would entitle its holder to
purchase approximately ten and one-half shares of common stock.)
In addition, under certain circumstances if the Company is involved in
a merger or business combination transaction with another person in which the
Company is not the surviving corporation, each right that has not previously
been exercised will entitle its holder to purchase, at the right's then-current
exercise price, securities of such other person having a value of twice the
right's exercise price.
<PAGE> 3
The Company may redeem the rights at a price of $0.01 per right at
any time until the close of business on the tenth business day following an
announcement by the Company that a person or group has become the beneficial
owner of 15% or more of the Company's common stock.
Details of the shareholder protection rights agreement are outlined in
a letter that will be mailed to all shareholders of record at the close of
business on November 20, 1997.
RARE Hospitality International, Inc. owns, operates and franchises 123
restaurants, including 92 Company-owned LongHorn Steakhouses located in the
southeastern and midwestern United States, and 16 Bubaboo Creek Steak Houses
and nine The Capital Grille restaurants, located primarily in the northeastern
United States.
###
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