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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
QUALITY DINING, INC.
(Exact name of Registrant as specified in its charter)
Indiana 35-1804902
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(State of incorporation or organization) (IRS Employer Identification No.)
4220 Edison Lakes Parkway
Mishawaka, Indiana 46545
(Address of principal executive offices) (Zip Code)
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Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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None None
Securities to be registered pursuant to Section 12(g) of the Act:
Rights to Purchase Series B Participating
Cumulative Preferred Stock, without par value
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(Title of Class)
Item 1. DESCRIPTION OF SECURITIES TO BE REGISTERED.
Pursuant to a Rights Agreement (the "Rights Agreement") dated as of
March 27, 1997, between Quality Dining, Inc. (the "Company") and KeyCorp
Shareholder Services, Inc., as Rights Agent (the "Rights Agent"), the Company's
Board of Directors declared a dividend of one right (a "Right") to purchase one
one-hundreth share of the Company's Series B Participating Cumulative Preferred
Stock (the "Preferred Shares") for each outstanding share of Common Stock,
without par value (the "Common Stock"), of the Company. The dividend is payable
on or about April 11, 1997 (the "Record Date") to stockholders of record as of
the close of business on that date. Each Right entitles the registered holder to
purchase from the Company one one-hundreth of a Preferred Share at an exercise
price of $75 (the "Purchase Price"), subject to adjustment.
This summary of the principal terms of the Rights Agreement is a
general description only and is subject to the detailed terms and conditions of
the Rights Agreement. A copy of the Rights Agreement is attached as
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Exhibit 1 to this Registration Statement and is incorporated herein by
reference; capitalized terms used but not otherwise defined herein shall have
the meanings ascribed to them in the Rights Agreement.
The Rights
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The Rights will not be exercisable until the Distribution Date
(defined below) and will expire on the tenth annual anniversary of the Rights
Agreement (the "Expiration Date"), unless earlier redeemed by the Company. 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 with respect to the Rights or the Preferred Shares relating
thereto.
Distribution Date
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Under the Rights Agreement, the Distribution Date is the earlier of
(i) such time as the Company learns that a person or group (including any
affiliate or associate of such person or group) has acquired, or has obtained
the right to acquire, beneficial ownership of more than 15% of the outstanding
shares of Common Stock or that a person or group currently owning more than 15%
of the outstanding shares of Common Stock acquires more shares without prior
approval of the Board (such person or group being an "Acquiring Person"), unless
such provisions exempting certain persons from the definition of Acquiring
Person apply, and (ii) the close of business on such date, if any, as may be
designated by the Board of Directors of the Company following the commencement
of, or first public disclosure of an intent to commence, a tender or exchange
offer for more than 15% of the outstanding shares of Common Stock. Any person or
group (or any affiliate or associate of such person or group) that acquires more
than 15% of the outstanding shares of Common Stock pursuant to a transaction
that is approved in advance by the Board of Directors is not an Acquiring
Person, nor are any persons or groups that own 15% on the date of the Rights
Agreement with respect to the Common Stock then owned. However, acquisition of
any additional shares of Common Stock (other than with the prior approval of the
Board or pursuant to employee benefit and compensation plans, gifts or
operations of law) would make such persons or groups an Acquiring Person. A
person or group (or any affiliate or associate of such person or group),
however, that inadvertently acquires more than 15% of the outstanding shares of
Common Stock will not be deemed to be an Acquiring Person provided that such
person or group reduces the percentage of beneficial ownership to less than 15%
of the outstanding shares of Common Stock by the close of business on the fifth
business day after notice that such person's or group's ownership interest
exceeds 15% of the outstanding shares of Common Stock. Such person or group will
be deemed to be an Acquiring Person at the end of such five business day period
absent such reduction.
Evidence of the Rights
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Until the Distribution Date, the Rights will be evidenced by the
certificates for Common Stock registered in the names of the holders thereof
(which certificates for Common Stock will also be deemed to be Right
Certificates, as defined below) rather than separate Right Certificates.
Therefore, on and after the issuance of the Rights and until the Distribution
Date, the Rights will be transferred with and only with the Common Stock and
each transfer of Common Stock also will transfer the associated Rights. As soon
as practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of Record of the
Common Stock as of the close of business on the Distribution Date (and to each
initial record holder of certain Common Stock originally issued after the
Distribution Date), and such separate Right Certificates alone will thereafter
evidence the Rights.
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Adjustments
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The number of Preferred Shares or other securities issuable upon
exercise of the Rights, the Purchase Price, the Redemption Price (as defined
below) and the number of Rights associated with each share of Common Stock are
all subject to adjustment from time to time in the event of any change in the
Common Stock or the Preferred Shares, whether by reason of stock dividends,
stock splits, recapitalizations, mergers, consolidations, combinations or
exchanges of securities, split-ups, split-offs, spin-offs, liquidations, other
similar changes in capitalization or any distribution or issuance of cash,
assets, evidences of indebtedness or subscription rights, options or warrants to
holders of Common Stock or Preferred Shares.
The Company may, but is not required to, issue fractions of Rights or
distribute Rights Certificates which evidence fractional Rights. In lieu of such
fractional Rights, the Company may make a cash payment based on the market price
of such Rights. In addition, the Company may, but is not required to, issue
fractions of shares upon the exercise of the Rights or distribute certificates
which evidence fractional Preferred Shares. In lieu of fractional Preferred
Shares, the Company may utilize a depository arrangement as provided by the
terms of the Preferred Shares and, in the case of factions other than one-
hundredths (1/100ths) of a Preferred Share or integral multiples thereof, may
make a cash payment based on the market price of such shares.
Triggering Event and Effect of Triggering Event
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At such time as there is an Acquiring Person, the Rights will entitle
each holder (other than such Acquiring Person) of a Right to purchase, for the
Purchase Price, that number of one one-hundredth (1/100ths) of a Preferred Share
equivalent to the number of shares of Common Stock that at the time of such
event would have a market value of twice the Purchase Price.
In the event the Company is acquired in a merger or other business
combination by an Acquiring Person or an affiliate or associate of an Acquiring
Person that is a publicly traded corporation or 50% or more of the Company's
assets or assets representing 50% of more of the Company's revenues or cash flow
are sold, leased, exchanged or otherwise transferred (in one or more
transactions) to an Acquiring Person or an affiliate or associate of an
Acquiring Person that is a publicly traded corporation, each Right will entitle
its holder (subject to the next paragraph) to purchase, for the Purchase Price,
that number of common shares of such corporation that at the time of the
transaction would have a market value of twice the Purchase Price. In the event
the Company is acquired in a merger or other business combination by an
Acquiring Person or an affiliate or associate of an Acquiring Person that is not
a publicly traded entity or 50% or more of the Company's assets or assets
representing 50% or more of the Company's revenues or cash flow are sold,
leased, exchanged or otherwise transferred (in one or more transactions) to an
Acquiring Person or an affiliate or associate of an Acquiring Person that is not
a publicly traded entity, each Right will entitle its holder (subject to the
next paragraph) to purchase, for the Purchase Price, at such holder's option,
(i) that number of shares of the surviving corporation in the transaction with
such entity (which surviving corporation could be the Company) that at the time
of the transaction would have a book value of twice the Purchase Price, (ii)
that number of shares of the Principal Party in the transaction (as defined in
the Rights Agreement, and which may include the ultimate parent of the surviving
corporation) that at the time of the transaction would have a book value of
twice the Purchase Price or (iii) if such entity has an affiliate that has
publicly traded common shares, that number of common shares of such affiliate
that at the time of the transaction would have market value of twice the
Purchase Price.
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Any Rights that are at any time beneficially owned by an Acquiring
Person (or any affiliate or associate of an Acquiring Person) will be null and
void and nontransferable and any holder of any such Right (including any
purported transferee or subsequent holder) will be unable to exercise or
transfer any such Right.
Redemption
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At any time prior to the earlier of (i) such time as a person or group
becomes an Acquiring Person and (ii) the Expiration Date, the Board of Directors
of the Company may redeem the Rights in whole, but not in part, at a price (in
cash or Common Stock or other securities deemed by such Board of Directors to be
at least equivalent in value) of $0.01 per Right (which amount will be subject
to adjustment as provided in the Rights Agreement) (the "Redemption Price").
Immediately upon the action of such Board of Directors ordering the redemption
of the rights, and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price. Within 10 business days after
such action of a Board of Directors, the Company will give notice of such
redemption to the holders of the then outstanding Rights by mail. Each such
notice of redemption will state the method by which payment of the Redemption
Price will be made.
In addition, at any time after there is an Acquiring Person, the Board
of Directors may elect to exchange each Right (other than Rights that have
become null and void and nontransferable as described above) for consideration
per Right consisting of one-half of the securities that would be issuable at
such time upon exercise of one Right pursuant to the terms of the Rights
Agreement.
Amendment
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Prior to the Distribution Date, the Company may, without the approval
of any holder of any Rights, supplement or amend any provision of the Rights
Agreement (including, without limitation, the date on which the Distribution
Date will occur, the definition of Acquiring Person, the time during which the
Rights may be redeemed or the terms of the Preferred Shares), except that no
supplement or amendment will be made that reduces the Redemption Price (other
than pursuant to certain adjustments therein) or provides for an earlier
Expiration Date. From and after the Distribution Date and subject to applicable
law, the Company may amend the Rights Agreement without the approval of any
holders of Right Certificates, (i) to cure any ambiguity or to correct or
supplement any provision contained in the Rights Agreement that may be defective
or inconsistent with any other provision of the Rights Agreement or (ii) to make
any other provisions that the Company may deem necessary or desirable and that
will not adversely affect the interests of the holders of Right Certificates
(other than an Acquiring Person or an affiliate or associate of an Acquiring
Person). Any supplement or amendment adopted during any period after any person
or group has become an Acquiring Person but prior to the Distribution Date will
be null and void unless such supplement or amendment could have been adopted
under the prior sentence from and after the Distribution Date.
Terms of the Preferred Shares
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The Preferred Shares purchasable upon exercise of the Rights will not
be redeemable. Each Preferred Share will be entitled to receive (i) preferential
quarterly dividends of $.01 per share, less dividends received pursuant to the
following clause (ii) (but not less than zero) and (ii) cash and in-kind
dividends of 100 times the dividend declared per share of Common Stock. In the
event of liquidation, the holders of the Preferred Shares will be entitled to a
minimum preferential liquidation payment equal to
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the accrued dividends thereon plus the greater of (i) $.01 per share or (ii) 100
times the per-share amount to be distributed to the holders of shares of the
Common Stock; provided, however, that the amount paid will not exceed $100, plus
accrued dividends. Each Preferred Share will have 100 votes, voting together
with the Common Stock, plus additional voting rights in the election of
directors when the equivalent of six quarterly dividends are in default. In the
event of any merger, consolidation, or other transaction in which the shares of
Common Stock are changed or exchanged, each share of Preferred will be entitled
to receive 100 times the amount received per share of Common Stock. These
rights are protected by customary anti-dilution provisions.
Because of the nature of the dividend, liquidation, and voting rights
of the Preferred Shares, the value of the one one-hundreth interest in a
Preferred Share purchasable upon exercise of each Right should approximate the
value of one share of Common Stock.
Certain Anti-takeover Effects
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The Rights approved by the Board are designed to protect and maximize
the value of the outstanding equity interests in the Company in the event of an
unsolicited attempt by an acquiror to take over the Company, in a manner or on
terms not approved by the Board of Directors. Takeover attempts frequently
include coercive tactics to deprive the Company's Board of Directors and its
stockholders of any real opportunity to determine the destiny of the Company.
Further, such tactics can operate to unfairly pressure stockholders, force them
out of their investment, and deprive them of the full value of their shares. The
Rights have been declared by the Board in order to deter such tactics.
The Rights are not intended to prevent a takeover of the Company and
will not do so. The Rights may be redeemed by the Company at $0.01 per Right at
any time before the accumulation of 15% or more of the Company's shares by a
single acquiror or group. Further, any such person who accumulates a 15% stake
as the result of a transaction or transactions approved in advance by the Board
of Directors will not be deemed an Acquiring Person, who could trigger the
exercise of the Rights. Accordingly, the Rights should not interfere with any
merger or business combination approved by the Board of Directors.
However, the Rights may have the effect of rendering more difficult or
discouraging an acquisition of the Company deemed undesirable by the Board of
Directors. The Rights may cause substantial dilution to a person or group that
attempts to acquire the Company on terms or in a manner not approved by the
Company's Board of Directors, except pursuant to an offer conditioned upon the
negation, purchase or redemption of the Rights. As a result, while the Rights
may provide the Board with leverage to obtain a higher price from a potential
acquiror, they also may prevent or deter offers not approved by the Board, and
therefore deprive stockholders, without providing them with the opportunity to
vote thereon, of the benefits of offers that may be at a higher price than the
current market price of the Company's Common Stock.
Issuance of the Rights does not in any way weaken the financial
strength of the Company or interfere with its business plans. The issuance of
the Rights themselves has no dilutive effect, will not affect reported earnings
per share, and should not be taxable to the Company or to its shareholders.
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Item 2. EXHIBITS.
The following exhibits are filed as a part of this Registration
Statement.
EXHIBIT NO. DESCRIPTION
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3-A (i) Restated Articles of Incorporation of Registrant
(ii) Amendment to Registrant's Restated Articles of Incorporation
establishing the Series A Convertible Cumulative Preferred
Stock of Registrant
(iii) Amendment to Registrant's Restated Articles of Incorporation
establishing the Series B Participating Cumulative Preferred
Stock of the Registrant
3-B By-Laws of Registrant, as amended to date
10-AO Rights Agreement, dated as of March 27, 1997, by and between Quality
Dining, Inc. and KeyCorp Shareholder Services, Inc., with exhibits
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereto duly authorized.
QUALITY DINING, INC.
Date: April 1, 1997
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By: /s/ David M. Findlay
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David M. Findlay
Senior Vice President - Finance
EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
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3-A (i) Restated Articles of Incorporation of Registrant
(ii) Amendment to Registrant's Restated Articles of Incorporation
establishing the Series A Convertible Cumulative Preferred
Stock of Registrant
(iii) Amendment to Registrant's Restated Articles of Incorporation
establishing the Series B Participating Cumulative Preferred
Stock of the Registrant
3-B By-Laws of Registrant, as amended to date
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10-AO Rights Agreement, dated as of March 27, 1997, by and between
Quality Dining, Inc. and KeyCorp Shareholder Services, Inc.,
with exhibits
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EXHIBIT 3-A (i)
RESTATED ARTICLES OF INCORPORATION
OF
QUALITY DINING, INC.
Quality Dining, Inc. (hereinafter referred to as the "Corporation"),
desiring to amend and restate its Articles of Incorporation effective as of the
date of filing hereof with the Office of the Indiana Secretary of State,
pursuant to the provisions of the Indiana Business Corporation Law (hereinafter
referred to as the "Corporation Law"), submits the following Restated Articles
of Incorporation.
ARTICLE I
Name
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The name of the Corporation is Quality Dining, Inc.
ARTICLE II
Purposes and Powers
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Section 2.1. Purposes of the Corporation. The purposes for which the
Corporation is formed are (a) to engage in the general business of owning and
operating restaurants, directly or indirectly through one or more subsidiaries,
and to carry on such activities of every kind or nature as may be allied or
incidental to such general business, and (b) to engage in the transaction of any
or all lawful business for which corporations may now or hereafter be
incorporated under the Corporation Law.
Section 2.2. Powers of the Corporation. The Corporation shall have
(a) all powers now or hereafter authorized by or vested in corporations pursuant
to the provisions of the Corporation Law, (b) all powers now or hereafter vested
in corporations by common law or any other statute or act, and (c) all powers
authorized by or vested in the Corporation by the provisions of these Restated
Articles of Incorporation or by the provisions of its By-Laws as from time to
time in effect.
Section 2.3. Franchise Agreement Related Restrictions. For as long as
the Corporation is a party to one or more franchise agreements with Brinker
International, Inc. (the "Franchise Agreements"), the Corporation's direct
business operations shall be devoted exclusively to the operation of Chili's
Southwestern Bar and Grill restaurants pursuant to the Franchise Agreements.
Upon assignment of all of the Franchise Agreements to a wholly owned subsidiary
of the Corporation, the foregoing provision shall be of no further effect.
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ARTICLE III
Term of Existence
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The period during which the Corporation shall continue is perpetual.
ARTICLE IV
Registered Office and Agent
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The street address of the Corporation's registered office at the time
of adoption of these Restated Articles of Incorporation is 3820 Edison Lakes
Parkway, Mishawaka, Indiana 46545 and the name of its Resident Agent at such
office at the time of adoption of these Restated Articles of Incorporation is
Daniel B. Fitzpatrick.
ARTICLE V
Authorized Shares
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Section 5.1. Authorized Classes and Number of Shares. The total
number of shares which the Corporation has authority to issue shall be
55,000,000 shares, consisting of 50,000,000 shares of common stock, without par
value (the "Common Stock"), and 5,000,000 shares of Preferred Stock, without par
value (the "Preferred Stock").
Section 5.2. General Terms of All Shares. The Corporation shall have
the power to acquire (by purchase, redemption, or otherwise), hold, own, pledge,
sell, transfer, assign, reissue, cancel, or otherwise dispose of the shares of
the Corporation in the manner and to the extent now or hereafter permitted by
the laws of the State of Indiana (but such power shall not imply an obligation
on the part of the owner or holder of any share to sell or otherwise transfer
such share to the Corporation), including the power to purchase, redeem, or
otherwise acquire the Corporation's own shares, directly or indirectly, and
without pro rata treatment of the owners or holders of any class or series of
shares, unless, after giving effect thereto, the Corporation would not be able
to pay its debts as they become due in the usual course of business or the
Corporation's total assets would be less than its total liabilities (and without
regard to any amounts that would be needed, if the Corporation were to be
dissolved at the time of the purchase, redemption, or other acquisition, to
satisfy the preferential rights upon dissolution of shareholders whose
preferential rights are superior to those of the holders of the shares of the
Corporation being purchased, redeemed, or otherwise acquired, unless otherwise
expressly provided with respect to a series of Preferred Stock in the provisions
of these Restated
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Articles of Incorporation adopted by the Board of Directors pursuant to Section
5.5 hereof describing the terms of such series). Shares of the Corporation
purchased, redeemed, or otherwise acquired by it shall constitute authorized but
unissued shares, unless prior to any such purchase, redemption, or other
acquisition, or within thirty (30) days thereafter, the Board of Directors
adopts a resolution providing that such shares constitute authorized and issued
but not outstanding shares.
The Board of Directors of the Corporation may dispose of, issue, and
sell shares in accordance with, and in such amounts as may be permitted by, the
laws of the State of Indiana and the provisions of these Restated Articles of
Incorporation and for such consideration, at such price or prices, at such time
or times and upon such terms and conditions (including the privilege of
selectively repurchasing the same) as the Board of Directors of the Corporation
shall determine, without the authorization or approval by any shareholders of
the Corporation. Shares may be disposed of, issued, and sold to such persons,
firms, or corporations as the Board of Directors may determine, without any
preemptive or other right on the part of the owners or holders of other shares
of the Corporation of any class or kind to acquire such shares by reason of
their ownership of such other shares.
The Corporation shall have the power to declare and pay dividends or
other distributions upon the issued and outstanding shares of the Corporation,
subject to the limitation that a dividend or other distribution may not be made
if, after giving it effect, the Corporation would not be able to pay its debts
as they become due in the usual course of business or the Corporation's total
assets would be less than its total liabilities (and without regard to any
amounts that would be needed, if the Corporation were to be dissolved at the
time of the dividend or other distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to those
of the holders of shares receiving the dividend or other distribution, unless
otherwise expressly provided with respect to a series of Preferred Stock in the
provisions of these Restated Articles of Incorporation adopted by the Board of
Directors pursuant to Section 5.5 hereof describing the terms of such series).
The Corporation shall have the power to issue shares of one class or series as a
share dividend or other distribution in respect of that class or series or one
or more other classes or series.
Section 5.3. Voting Rights of Shares.
(a) Common Stock. Except as otherwise provided by the Corporation Law
and subject to such shareholder disclosure and recognition procedures (which may
include voting prohibition sanctions) as the Corporation may by action of its
Board of Directors establish, the Common Stock has unlimited voting rights and
each outstanding share of Common Stock shall, when validly
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issued by the Corporation, entitle the record holder thereof to one vote at all
shareholders' meetings on all matters submitted to a vote of the shareholders of
the Corporation.
(b) Preferred Stock. Except as required by the Corporation Law or by
the provisions of these Restated Articles of Incorporation adopted by the Board
of Directors pursuant to Section 5.5 hereof describing the terms of the
Preferred Stock or a series thereof, the holders of Preferred Stock shall have
no voting rights or powers. Shares of Preferred Stock shall, when validly
issued by the Corporation, entitle the record holder thereof to vote as and on
such matters, but only as and on such matters, as the holders thereof are
entitled to vote under the Corporation Law or under the provisions of these
Restated Articles of Incorporation adopted by the Board of Directors pursuant to
Section 5.5 hereof describing the terms of the Preferred Stock or a series
thereof (which provisions may provide for special, conditional, limited, or
unlimited voting rights, including multiple or fractional votes per share, or
for no right to vote, except to the extent required by the Corporation Law) and
subject to such shareholder disclosure and recognition procedures (which may
include voting prohibition sanctions) as the Corporation may by action of the
Board of Directors establish.
Section 5.4. Other Terms of Common Stock. The Common Stock shall be
equal in every respect insofar as their relationship to the Corporation is
concerned, but such equality of rights shall not imply equality of treatment as
to redemption or other acquisition of shares by the Corporation. Subject to the
rights of the holders of any outstanding Preferred Stock issued under Section
5.5 hereof, the holders of Common Stock shall be entitled to share ratably in
such dividends or other distributions (other than purchases, redemptions, or
other acquisitions of shares by the Corporation), if any, as are declared and
paid from time to time on the Common Stock at the discretion of the Board of
Directors. In the event of any liquidation, dissolution, or winding up of the
Corporation, either voluntary or involuntary, after payment shall have been made
to the holders of the Preferred Stock of the full amount to which they shall be
entitled under this Article V, the holders of Common Stock shall be entitled, to
the exclusion of the holders of the Preferred Stock of any and all series, to
share, ratably according to the number of shares of Common Stock held by them,
in all remaining assets of the Corporation available for distribution to its
shareholders.
Section 5.5. Other Terms of Preferred Stock.
(a) Preferred Stock may be issued from time to time in one or more
series, each such series to have such distinctive designation and such
preferences, limitations, and relative voting and other rights as shall be set
forth in these Restated Articles of Incorporation. Subject to the requirements
of the Corporation
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Law and subject to all other provisions of these Restated Articles of
Incorporation, the Board of Directors of the Corporation may create one or more
series of Preferred Stock and may determine the preferences, limitations, and
relative voting and other rights of one or more series of Preferred Stock before
the issuance of any shares of that series by the adoption of an amendment to
these Restated Articles of Incorporation that specifies the terms of the series
of Preferred Stock. All shares of a series of Preferred Stock must have
preferences, limitations, and relative voting and other rights identical with
those of other shares of the same series and, if the description of the series
set forth in these Restated Articles of Incorporation so provides, no series of
Preferred Stock need have preferences, limitations, or relative voting or other
rights identical with those of any other series of Preferred Stock.
Before issuing any shares of a series of Preferred Stock, the Board of
Directors shall adopt an amendment to these Restated Articles of Incorporation,
which shall be effective without any shareholder approval or other action, that
sets forth the preferences, limitations, and relative voting and other rights of
the series, and authority is hereby expressly vested in the Board of Directors,
by such amendment:
(1) To fix the distinctive designation of such series and the number
of shares which shall constitute such series, which number may be increased
or decreased (but not below the number of shares thereof then outstanding)
from time to time by action of the Board of Directors;
(2) To fix the voting rights of such series, which may consist of
special, conditional, limited, or unlimited voting rights, including
multiple or fractional votes per share, or no right to vote (except to the
extent required by the Corporation Law);
(3) To fix the dividend or distribution rights of such series and the
manner of calculating the amount and time for payment of dividends or
distributions, including, but not limited to:
(A) the dividend rate, if any, of such series;
(B) any limitations, restrictions, or conditions on the payment
of dividends or other distributions, including whether dividends or
other distributions shall be noncumulative or cumulative or partially
cumulative and, if so, from which date or dates;
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(C) the relative rights of priority, if any, of payment of
dividends or other distributions on shares of that series in relation
to Common Stock and shares of any other series of Preferred Stock; and
(D) the form of dividends or other distributions, which may be
payable at the option of the Corporation, the shareholder, or another
person (and in such case to prescribe the terms and conditions of
exercising such option), or upon the occurrence of a designated event
in cash, indebtedness, stock or other securities or other property, or
in any combination thereof,
and to make provisions, in the case of dividends or other distributions
payable in stock or other securities, for adjustment of the dividend or
distribution rate in such events as the Board of Directors shall determine;
(4) To fix the price or prices at which, and the terms and conditions
on which, the shares of such series may be redeemed or converted, which may
be
(A) at the option of the Corporation, the shareholder, or another
person or upon the occurrence of a designated event;
(B) for cash, indebtedness, securities, or other property or any
combination thereof; and
(C) in a designated amount or in an amount determined in
accordance with a designated formula or by reference to extrinsic data
or events;
(5) To fix the amount or amounts payable upon the shares of such
series in the event of any liquidation, dissolution, or winding up of the
Corporation and the relative rights of priority, if any, of payment upon
shares of such series in relation to Common Stock and shares of any other
series of special shares; and to determine whether or not any such
preferential rights upon dissolution need be considered in determining
whether or not the Corporation may make dividends, repurchases, or other
distributions;
(6) To determine whether or not the shares of such series shall be
entitled to the benefit of a sinking fund to be applied to the purchase or
redemption of such
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series and, if so entitled, the amount of such fund and the manner of its
application;
(7) To determine whether or not the issue of any additional shares of
such series or of any other series in addition to such series shall be
subject to restrictions in addition to restrictions, if any, on the issue
of additional shares imposed in the provisions of these Restated Articles
of Incorporation fixing the terms of any outstanding series of Preferred
Stock theretofore issued pursuant to this Section 5.5 and, if subject to
additional restrictions, the extent of such additional restrictions; and
(8) Generally to fix the other preferences or rights, and any
qualifications, limitations, or restrictions of such preferences or rights,
of such series to the full extent permitted by the Corporation Law;
provided, however, that no such preferences, rights, qualifications,
limitations, or restrictions shall be in conflict with these Restated
Articles of Incorporation or any amendment hereof.
(b) Preferred Stock of any series that have been redeemed (whether
through the operation of a sinking fund or otherwise) or purchased by the
Corporation, or which, if convertible, have been converted into shares of the
Corporation of any other class or series, may be reissued as a part of such
series or of any other series of Preferred Stock, subject to such limitations
(if any) as may be fixed by the Board of Directors with respect to such series
of Preferred Stock in accordance with subsection (a) of this Section 5.5.
ARTICLE VI
Directors
---------
Section 6.1. Number. The Board of Directors at the time of adoption
of these Restated Articles of Incorporation is composed of three (3) members,
and the number of Directors shall be fixed by the By-Laws and may be changed
from time to time by amendment to the By-Laws. Whenever the By-Laws provide
that the number of Directors shall be three (3) or more, the By-Laws may also
provide for staggering the terms of the members of the Board of Directors by
dividing the total number of Directors into three (3) groups (with each group
containing one-third (1/3) of the total, as near as may be) whose terms of
office expire at different times.
Notwithstanding the first sentence of this Section 6.1, any amendment
to the By-Laws that would effect:
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(a) any increase in the number of Directors over such number as then
in effect,
(b) any reduction in the number of Directors over such number as then
in effect, or
(c) any elimination or modification of the groups or terms of office
of the Directors as the By-Laws then in effect may provide,
shall also be approved by the affirmative vote of a majority of the entire
number of Directors of the Corporation who then qualify as Continuing Directors
with respect to all Related Persons (as such terms are defined for purposes of
Article VIII hereof).
Section 6.2. Qualifications. Directors need not be shareholders of
the Corporation or residents of this or any other state in the United States.
Section 6.3. Vacancies. Vacancies occurring in the Board of
Directors shall be filled in the manner provided in the By-Laws or, if the By-
Laws do not provide for the filling of vacancies, in the manner provided by the
Corporation Law. The By-Laws may also provide that in certain circumstances
specified therein, vacancies occurring in the Board of Directors may be filled
by vote of the shareholders at a special meeting called for that purpose or at
the next annual meeting of shareholders.
Section 6.4. Liability of Directors. A Director's responsibility to
the Corporation shall be limited to discharging his duties as a Director,
including his duties as a member of any committee of the Board of Directors upon
which he may serve, in good faith, with the care an ordinarily prudent person in
a like position would exercise under similar circumstances, and in a manner the
Director reasonably believes to be in the best interests of the Corporation, all
based on the facts then known to the Director.
In discharging his duties, a Director is entitled to rely on
information, opinions, reports, or statements, including financial statements
and other financial data, if prepared or presented by:
(a) One (1) or more officers or employees of the Corporation whom the
Director reasonably believes to be reliable and competent in the matters
presented;
(b) Legal counsel, public accountants, or other persons as to matters
the Director reasonably believes are within such person's professional or
expert competence; or
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(c) A committee of the Board of which the Director is not a member if
the Director reasonably believes the Committee merits confidence;
but a Director is not acting in good faith if the Director has knowledge
concerning the matter in question that makes reliance otherwise permitted by
this Section 6.4 unwarranted.
A Director shall not be liable for any action taken as a Director, or
any failure to take any action, unless (a) the Director has breached or failed
to perform the duties of the Director's office in compliance with this Section
6.4, and (b) the breach or failure to perform constitutes willful misconduct or
recklessness.
Section 6.5. Factors to be Considered by Board. In determining
whether to take or refrain from taking any action with respect to any matter,
including making or declining to make any recommendation to shareholders of the
Corporation, the Board of Directors may, in its discretion, consider both the
short term and long term best interests of the Corporation (including the
possibility that these interests may be best served by the continued
independence of the Corporation), taking into account, and weighing as the
Directors deem appropriate, the social and economic effects thereof on the
Corporation's present and future employees, suppliers and customers of the
Corporation and its subsidiaries, the communities in which offices or other
facilities of the Corporation are located, and any other factors the Directors
consider pertinent.
Section 6.6. Removal of Directors. Any or all of the members of the
Board of Directors may be removed, for good cause, only at a meeting of the
shareholders called expressly for that purpose, by the affirmative vote of the
holders of outstanding shares representing at least sixty-six and two-thirds
percent (66-2/3%) of all the votes then entitled to be cast at an election of
Directors. Directors may not be removed in the absence of good cause.
Section 6.7. Election of Directors by Holders of Preferred Stock.
The holders of one (1) or more series of Preferred Stock may be entitled to
elect all or a specified number of Directors, but only to the extent and subject
to limitations as may be set forth in the provisions of these Restated Articles
of Incorporation adopted by the Board of Directors pursuant to Section 5.5
hereof describing the terms of the series of Preferred Stock.
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ARTICLE VII
Provisions for Regulation of Business
and Conduct of Affairs of Corporation
-------------------------------------
Section 7.1. Meetings of Shareholders. Meetings of the shareholders
of the Corporation shall be held at such time and at such place, either within
or without the State of Indiana, as may be stated in or fixed in accordance with
the By-Laws of the Corporation and specified in the respective notices or
waivers of notice of any such meetings.
Section 7.2. Special Meetings of Shareholders. Special meetings of
the shareholders, for any purpose or purposes, unless otherwise prescribed by
the Corporation Law, may be called at any time by the Board of Directors or the
officers authorized to do so by the By-Laws and shall be called by the Board of
Directors if the Secretary of the Corporation receives one (1) or more written,
dated, and signed demands for a special meeting, describing in reasonable detail
the purpose or purposes for which it is to be held, from the holders of shares
representing at least twenty-five percent (25%) of all the votes entitled to be
cast on any issue proposed to be considered at the proposed special meeting;
provided, however, that any such demand(s) delivered to the Secretary at any
time at which the Corporation has more than 50 shareholders must be properly
delivered by the holders of shares representing at least 80% of all the votes
entitled to be cast on any issue proposed to be considered at the proposed
special meeting. If the Secretary receives one (1) or more proper written
demands for a special meeting of shareholders, the Board of Directors may set a
record date for determining shareholders entitled to make such demand.
Section 7.3. Meetings of Directors. Meetings of the Board of
Directors of the Corporation shall be held at such place, either within or
without the State of Indiana, as may be authorized by the By-Laws and specified
in the respective notices or waivers of notice of any such meetings or otherwise
specified by the Board of Directors. Unless the By-Laws provide otherwise (a)
regular meetings of the Board of Directors may be held without notice of the
date, time, place, or purpose of the meeting and (b) the notice for a special
meeting need not describe the purpose or purposes of the special meeting.
Section 7.4. Action Without Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors or shareholders,
or of any committee of such Board, may be taken without a meeting, if the action
is taken by all members of the Board or all shareholders entitled to vote on the
action, or by all members of such committee, as the case may be. The action
must be evidenced by one (1) or more written consents describing the action
taken, signed by each Director, or all the shareholders
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entitled to vote on the action, or by each member of such committee, as the case
may be, and, in the case of action by the Board of Directors or a committee
thereof, included in the minutes or filed with the corporate records reflecting
the action taken or, in the case of action by the shareholders, delivered to the
Corporation for inclusion in the minutes or filing with the corporate records.
Action taken under this Section 7.4 is effective when the last Director,
shareholder, or committee member, as the case may be, signs the consent, unless
the consent specifies a different prior or subsequent effective date, in which
case the action is effective on or as of the specified date. Such consent shall
have the same effect as a unanimous vote of all members of the Board, or all
shareholders, or all members of the committee, as the case may be, and may be
described as such in any document.
Section 7.5. By-Laws. The Board of Directors shall have the
exclusive power to make, alter, amend, or repeal, or to waive provisions of, the
By-Laws of the Corporation by the affirmative vote of a majority of the entire
number of Directors at the time, except as expressly provided in Section 6.1
hereof and as provided by the Corporation Law. All provisions for the
regulation of the business and management of the affairs of the Corporation not
stated in these Restated Articles of Incorporation shall be stated in the By-
Laws. The Board of Directors may adopt Emergency By-Laws of the Corporation and
shall have the exclusive power (except as may otherwise be provided therein) to
make, alter, amend, or repeal, or to waive provisions of, the Emergency By-Laws
by the affirmative vote of both (a) a majority of the entire number of Directors
at the time and (b) a majority of the entire number of Directors who then
qualify as Continuing Directors with respect to all Related Persons (as such
terms are defined for purposes for Article VIII hereof).
Section 7.6. Interest of Directors. (a) A conflict of interest
transaction is a transaction with the Corporation in which a Director of the
Corporation has a direct or indirect interest. A conflict of interest
transaction is not voidable by the Corporation solely because of the Director's
interest in the transaction if any one (1) of the following is true:
(1) The material facts of the transaction and the Director's interest
were disclosed or known to the Board of Directors or a Committee of the
Board of Directors and the Board of Directors or committee authorized,
approved, or ratified the transaction.
(2) The material facts of the transaction and the Director's interest
were disclosed or known to the shareholders entitled to vote and they
authorized, approved, or ratified the transaction.
(3) The transaction was fair to the Corporation.
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(b) For purposes of this Section 7.6, a Director of the Corporation
has an indirect interest in a transaction if:
(1) Another entity in which the Director has a material financial
interest or in which the Director is a general partner is a party to the
transaction; or
(2) Another entity of which the Director is a director, officer, or
trustee is a party to the transaction and the transaction is, or is
required to be, considered by the Board of Directors of the Corporation.
(c) For purposes of Section 7.6(a)(1), a conflict of interest
transaction is authorized, approved, or ratified if it receives the affirmative
vote of a majority of the Directors on the Board of Directors (or on the
committee) who have no direct or indirect interest in the transaction, but a
transaction may not be authorized, approved, or ratified under this section by a
single Director. If a majority of the Directors who have no direct or indirect
interest in the transaction vote to authorize, approve, or ratify the
transaction, a quorum shall be deemed present for the purpose of taking action
under this Section 7.6. The presence of, or a vote cast by, a Director with a
direct or indirect interest in the transaction does not affect the validity of
any action taken under Section 7.6(a)(1), if the transaction is otherwise
authorized, approved, or ratified as provided in such subsection.
(d) For purposes of Section 7.6(a)(2), a conflict of interest
transaction is authorized, approved, or ratified if it receives the affirmative
vote of the holders of shares representing a majority of the votes entitled to
be cast. Shares owned by or voted under the control of a Director who has a
direct or indirect interest in the transaction, and shares owned by or voted
under the control of an entity described in Section 7.6(b), may be counted in
such a vote of shareholders.
Section 7.7. Nonliability of Shareholders. Shareholders of the
Corporation are not personally liable for the acts or debts of the Corporation,
nor is private property of shareholders subject to the payment of corporate
debts.
Section 7.8. Indemnification of Officers, Directors, and Other
Eligible Persons.
(a) To the extent not inconsistent with applicable law, every Eligible
Person shall be indemnified by the Corporation against all Liability and
reasonable Expense that may be incurred by him in connection with or resulting
from any Claim, (1) if such Eligible Person is Wholly Successful with respect to
the Claim, or (2) if not Wholly Successful, then if such Eligible Person is
determined, as provided in either Section 7.8(f) or 7.8(g), to have acted in
good faith, in what he reasonably believed to be the best
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interests of the Corporation or at least not opposed to its best interests and,
in addition, with respect to any criminal claim is determined to have had
reasonable cause to believe that his conduct was lawful or had no reasonable
cause to believe that his conduct was unlawful. The termination of any Claim,
by judgment, order, settlement (whether with or without court approval), or
conviction or upon a plea of guilty or of nolo contendere, or its equivalent,
shall not create a presumption that an Eligible Person did not meet the
standards of conduct set forth in clause (2) of this subsection (a). The
actions of an Eligible Person with respect to an employee benefit plan subject
to the Employee Retirement Income Security Act of 1974 shall be deemed to have
been taken in what the Eligible Person reasonably believed to be the best
interests of the Corporation or at least not opposed to its best interests if
the Eligible Person reasonably believed he was acting in conformity with the
requirements of such Act or he reasonably believed his actions to be in the
interests of the participants in or beneficiaries of the plan.
(b) The term "Claim" as used in this Section 7.8 shall include every
pending, threatened, or completed claim, action, suit, or proceeding and all
appeals thereof (whether brought by or in the right of this Corporation or any
other corporation or otherwise), civil, criminal, administrative, or
investigative, formal or informal, in which an Eligible Person may become
involved, as a party or otherwise:
(1) by reason of his being or having been an Eligible Person, or
(2) by reason of any action taken or not taken by him in his capacity
as an Eligible Person, whether or not he continued in such capacity at the
time such Liability or Expense shall have been incurred.
(c) The term "Eligible Person" as used in this Section 7.8 shall mean
every person (and the estate, heirs, and personal representatives of such
person) who is or was a Director, officer, employee, or agent of the Corporation
or is or was serving at the request of the Corporation as a Director, officer,
employee, agent, or fiduciary of another foreign or domestic corporation,
partnership, joint venture, trust, employee benefit plan, or other organization
or entity, whether for profit or not. An Eligible Person shall also be
considered to have been serving an employee benefit plan at the request of the
Corporation if his duties to the Corporation also imposed duties on, or
otherwise involved services by, him to the plan or to participants in or
beneficiaries of the plan.
(d) The terms "Liability" and "Expense" as used in this Section 7.8
shall include, but shall not be limited to, counsel fees and disbursements and
amounts of judgments, fines, or
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penalties against (including excise taxes assessed with respect to an employee
benefit plan), and amounts paid in settlement by or on behalf of an Eligible
Person.
(e) The term "Wholly Successful" as used in this Section 7.8 shall
mean (1) termination of any claim against the Eligible Person in question
without any finding of liability or guilt against him, (2) approval by a court,
with knowledge of the indemnity herein provided, of a settlement of any Claim,
or (3) the expiration of a reasonable period of time after the making or
threatened making of any Claim without the institution of the same, without any
payment or promise made to induce a settlement.
(f) Every Eligible Person claiming indemnification hereunder (other
than one who has been Wholly Successful with respect to any Claim) shall be
entitled to indemnification (1) if special independent legal counsel, which may
be regular counsel of the Corporation or other disinterested person or persons,
in either case selected by the Board of Directors, whether or not a
disinterested quorum exists (such counsel or person or persons being hereinafter
called the "Referee"), shall deliver to the Corporation a written finding that
such Eligible Person has met the standards of conduct set forth in Section
7.8(a)(2), and (2) if the Board of Directors, acting upon such written finding,
so determines. The Board of Directors shall, if an Eligible Person is found to
be entitled to indemnification pursuant to the preceding sentence, also
determine the reasonableness of the Eligible Person's Expenses. The Eligible
Person claiming indemnification shall, if requested, appear before the Referee,
answer questions that the Referee deems relevant and shall be given ample
opportunity to present to the Referee evidence upon which he relies for
indemnification. The Corporation shall, at the request of the Referee, make
available facts, opinions, or other evidence in any way relevant to the
Referee's findings that are within the possession or control of the Corporation.
(g) If an Eligible Person claiming indemnification pursuant to Section
7.8(f) is found not to be entitled thereto, or if the Board of Directors fails
to select a Referee under Section 7.8(f) within a reasonable amount of time
following a written request of an Eligible Person for the selection of a
Referee, or if the Referee or the Board of Directors fails to make a
determination under Section 7.8(f) within a reasonable amount of time following
the selection of a Referee, the Eligible Person may apply for indemnification
with respect to a Claim to a court of competent jurisdiction, including a court
in which the Claim is pending against the Eligible Person. On receipt of an
application, the court, after giving notice to the Corporation and giving the
Corporation ample opportunity to present to the court any information or
evidence relating to the claim for indemnification that the Corporation deems
appropriate, may order indemnification if it determines that the Eligible Person
is entitled to
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indemnification with respect to the Claim because such Eligible Person met the
standards of conduct set forth in Section 7.8(a)(2). If the court determines
that the Eligible Person is entitled to indemnification, the court shall also
determine the reasonableness of the Eligible Person's Expenses.
(h) The rights of indemnification provided in this Section 7.8 shall
be in addition to any rights to which any Eligible Person may otherwise be
entitled. Irrespective of the provisions of this Section 7.8, the Board of
Directors may, at any time and from time to time, (1) approve indemnification of
any Eligible Person to the full extent permitted by the provisions of applicable
law at the time in effect, whether on account of past or future transactions,
and (2) authorize the Corporation to purchase and maintain insurance on behalf
of any Eligible Person against any Liability asserted against him and incurred
by him in any such capacity, or arising out of his status as such, whether or
not the Corporation would have the power to indemnify him against such
liability.
(i) Expenses incurred by an Eligible Person with respect to any Claim,
may be advanced by the Corporation (by action of the Board of Directors, whether
or not a disinterested quorum exists) prior to the final disposition thereof
upon receipt of an undertaking by or on behalf of the Eligible Person to repay
such amount unless he is determined to be entitled to indemnification.
(j) The provisions of this Section 7.8 shall be deemed to be a
contract between the Corporation and each Eligible Person, and an Eligible
Person's rights hereunder shall not be diminished or otherwise adversely
affected by any repeal, amendment, or modification of this Section 7.8 that
occurs subsequent to such person becoming an Eligible Person.
(k) The provisions of this Section 7.8 shall be applicable to Claims
made or commenced after the adoption hereof, whether arising from acts or
omissions to act occurring before or after the adoption hereof.
ARTICLE VIII
Approval of Business Combinations
---------------------------------
Section 8.1. Supermajority Vote. Except as provided in Sections 8.2
and 8.3 hereof, neither the Corporation nor its Subsidiaries, if any, shall
become a party to any Business Combination with a Related Person without the
prior affirmative vote at a meeting of the Corporation's shareholders:
(a) Of not less than sixty-six and two-thirds percent (66-2/3%) of all
the votes entitled to be cast by
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the holders of the outstanding shares of all classes of Voting Stock of the
Corporation considered for purposes of this Article VIII as a single class,
and
(b) Of an Independent Majority of Shareholders.
Such favorable votes shall be in addition to any shareholder vote
which would be required without reference to this Section 8.1 and shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified by law or elsewhere in these Restated
Articles of Incorporation or the By-Laws of the Corporation or otherwise.
Section 8.2. Fair Price Exception. The provisions of Section 8.1 of
this Article VIII shall not apply to a Business Combination if all of the
conditions set forth in subsections (a) through (d) are satisfied.
(a) The fair market value of the property, securities, or other
consideration to be received per share by holders of each class or series of
capital stock of the Corporation in the Business Combination is not less, as of
the date of the consummation of the Business Combination (the "Consummation
Date") than the higher of the following: (1) the highest per share price (with
appropriate adjustments for recapitalizations and for stock splits, stock
dividends, and like distributions), including brokerage commissions and
solicitation fees paid by the Related Person in acquiring any of its holdings of
such class or series of capital stock within the two-year period immediately
prior to the first public announcement of the proposed Business Combination
("Announcement Date") plus interest compounded annually from the date that the
Related Person became a Related Person (the "Determination Date"), or if later
from a date two years before the Consummation Date, through the Consummation
Date, at the rate publicly announced as the "prime rate" of interest of
Citibank, N.A. (or of such other major bank headquartered in New York as may be
selected by a majority of the Continuing Directors) from time to time in effect,
less the aggregate amount of any cash dividends paid and the fair market value
of any dividends paid in other than cash on each share of such stock from the
date from which interest accrues under the preceding clause through the
Consummation Date up to but not exceeding the amount of interest so payable per
share; OR (2) the fair market value per share of such class or series on the
Announcement Date as determined by the highest closing sale price during the 30-
day period immediately preceding the Announcement Date if such stock is listed
on a securities exchange registered under the Securities Exchange Act of 1934
or, if such stock is not listed on any such exchange, the highest closing bid
quotation with respect to such stock during the 30-day period preceding the
Announcement Date on the National Association of Securities Dealers, Inc.
Automated Quotation System or any similar system then in use, or if no such
quotations are available, the fair market
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value of such stock immediately prior to the first public announcement of the
proposed Business Combination as determined by the Continuing Directors in good
faith. In the event of a Business Combination upon the consummation of which the
Corporation would be the surviving corporation or company or would continue to
exist (unless it is provided, contemplated, or intended that as part of such
Business Combination or within one year after consummation thereof a plan of
liquidation or dissolution of the Corporation will be effected), the term "other
consideration to be received" shall include (without limitation) Common Stock
and/or the shares of any other class of stock retained by shareholders of the
Corporation other than Related Persons who are parties to such Business
Combination;
(b) The consideration to be received in such Business Combination by
holders of each class or series of capital stock of the Corporation other than
the Related Person involved shall, except to the extent that a shareholder
agrees otherwise as to all or part of the shares which he or she owns, be in the
same form and of the same kind as the consideration paid by the Related Person
in acquiring the majority of the shares of capital stock of such class or series
already Beneficially Owned by it;
(c) After such Related Person became a Related Person and prior to the
consummation of such Business Combination: (1) such Related Person shall have
taken steps to ensure that the Board of Directors of the Corporation included at
all times representation by Continuing Directors proportionate to the ratio that
the number of shares of Voting Stock of the Corporation from time to time owned
by shareholders who are not Related Persons bears to all shares of Voting Stock
of the Corporation outstanding at the time in question (with a Continuing
Director to occupy any resulting fractional position among the Directors); (2)
such Related Person shall not have acquired from the Corporation, directly or
indirectly, any shares of the Corporation (except upon conversion of convertible
securities acquired by it prior to becoming a Related Person or as a result of a
pro rata stock dividend, stock split, or division of shares or in a transaction
which satisfied all applicable requirements of this Article VIII); (3) such
Related Person shall not have acquired any additional shares of Voting Stock of
the Corporation or securities convertible into or exchangeable for shares of
Voting Stock except as a part of the transaction which resulted in such Related
Person's becoming a Related Person; and (4) such Related Person shall not have
received the benefit, directly or indirectly (except proportionately as a
shareholder), of any loans, advances, guarantees, pledges, or other financial
assistance or tax credits provided by the Corporation or any Subsidiary, or made
any major change in the Corporation's business or equity capital structure or
entered into any contract, arrangement, or understanding with the Corporation
except any such change, contract, arrangement, or understanding as may have been
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approved by the favorable vote of not less than a majority of the Continuing
Directors of the Corporation; and
(d) A proxy or information statement complying with the requirements
of the Securities Exchange Act of 1934 and the rules and regulations of the
Securities and Exchange Commission thereunder, as then in force for corporations
subject to the requirements of Section 14 of such Act (even if the Corporation
is not otherwise subject to Section 14 of such Act), shall have been mailed to
all holders of shares of the Corporation's capital stock entitled to vote with
respect to such Business Combination. Such proxy or information statement shall
contain on the face page thereof, in a prominent place, any recommendations as
to the advisability (or inadvisability) of the Business Combination which the
Continuing Directors, or any of them, may have furnished in writing and, if
deemed advisable by a majority of the Continuing Directors, a fair summary of an
opinion of a reputable investment banking firm addressed to the Corporation as
to the fairness (or lack of fairness) of the terms of such Business Combination
from the point of view of the holders of shares of Voting Stock other than any
Related Person (such investment banking firm to be selected by a majority of the
Continuing Directors, to be furnished with all information it reasonably
requests, and to be paid a reasonable fee for its services upon receipt by the
Corporation of such opinion).
Section 8.3. Director Approval Exception. The provisions of Section
8.1 hereof shall not apply to a Business Combination if:
(a) The Directors, by a favorable vote of not less than two-thirds
(2/3) of the Directors who then qualify as Continuing Directors, (1) have
expressly approved a memorandum of understanding with the Related Person with
respect to the Business Combination prior to the time that the Related Person
became a Related Person and the Business Combination is effected on
substantially the same terms and conditions as are provided by the memorandum of
understanding, or (2) have otherwise approved the Business Combination; or
(b) The Business Combination is solely between the Corporation and
another corporation, one hundred percent (100%) of the Voting Stock of which is
owned directly or indirectly by the Corporation.
Section 8.4. Definitions. For purposes of this Article VIII:
(a) A "Business Combination" means:
(1) The sale, exchange, lease, transfer, or other disposition to or
with a Related Person or any Affiliate
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or Associate of such Related Person by the Corporation or any Subsidiaries
(in a single transaction or a Series of Related Transactions) of all or
substantially all, or any Substantial Part, of its or their assets or
businesses (including, without limitation, securities issued by a
Subsidiary, if any);
(2) The purchase, exchange, lease, or other acquisition by the
Corporation or any Subsidiaries (in a single transaction or a Series of
Related Transactions) of all or substantially all, or any Substantial Part,
of the assets or business of a Related Person or any Affiliate or Associate
of such Related Person;
(3) Any merger or consolidation of the Corporation or any Subsidiary
thereof into or with a Related Person or any Affiliate or Associate of such
Related Person or into or with another Person which, after such merger or
consolidation, would be an Affiliate or an Associate of a Related Person,
in each case irrespective of which Person is the surviving entity in such
merger or consolidation;
(4) Any reclassification of securities, recapitalization, or other
transaction (other than a redemption in accordance with the terms of the
security redeemed) which has the effect, directly or indirectly, of
increasing the proportionate amount of shares of Voting Stock of the
Corporation or any Subsidiary thereof which are Beneficially Owned by a
Related Person, or any partial or complete liquidation, spinoff, splitoff,
or splitup of the Corporation or any Subsidiary thereof; provided, however,
that this Section 8.4(a)(4) shall not relate to any transaction that has
been approved by a majority of the Continuing Directors; or
(5) The acquisition upon the issuance thereof of Beneficial Ownership
by a Related Person of shares of Voting Stock or securities convertible
into shares of Voting Stock or any voting securities or securities
convertible into voting securities of any Subsidiary of the Corporation, or
the acquisition upon the issuance thereof of Beneficial Ownership by a
Related Person of any rights, warrants, or options to acquire any of the
foregoing or any combination of the foregoing shares of Voting Stock or
voting securities of a Subsidiary, if any.
(b) A "Series of Related Transactions" shall be deemed to include not
only a series of transactions with the same Related
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Person, but also a series of separate transactions with a Related Person or any
Affiliate or Associate of such Related Person.
(c) A "Person" shall mean any individual, firm, corporation, or other
entity and any partnership, syndicate, or other group.
(d) "Related Person" shall mean any Person (other than the Corporation
or any Subsidiary of the Corporation or the Continuing Directors, singly or as a
group) who or that at any time described in the last sentence of the penultimate
paragraph of this subsection (d):
(1) is the Beneficial Owner, directly or indirectly, of more than ten
percent (10%) of the voting power of the outstanding shares of Voting Stock
and who has not been the Beneficial Owner, directly or indirectly, of more
than ten percent (10%) of the voting power of the outstanding shares of
Voting Stock for a continuous period of two years prior to the date in
question; or
(2) is an Affiliate of the Corporation and at any time within the two-
year period immediately prior to the date in question (but not continuously
during such two-year period) was the Beneficial Owner, directly or
indirectly, of ten percent (10%) or more of the voting power of the then
outstanding shares of Voting Stock; or
(3) is an assignee of or has otherwise succeeded to any shares of the
Voting Stock which were at any time within the two-year period immediately
prior to the date in question beneficially owned by any Related Person, if
such assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering
within the meaning of the Securities Act of 1933, as amended.
A Related Person shall be deemed to have acquired a share of the
Corporation at the time when such Related Person became the Beneficial Owner
thereof. For the purposes of determining whether a Person is the Beneficial
Owner of ten percent (10%) or more of the voting power of the then outstanding
Voting Stock, the outstanding Voting Stock shall be deemed to include any Voting
Stock that may be issuable to such Person pursuant to a right to acquire such
Voting Stock and that is therefore deemed to be Beneficially Owned by such
Person pursuant to Section 8.4(e)(2)(A). A Person who is a Related Person at (1)
the time any definitive agreement relating to a Business Combination is entered
into, (2) the record date for the determination of shareholders entitled to
notice of and to vote on a Business Combination, or (3) the time
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immediately prior to the consummation of a Business Combination shall be deemed
a Related Person.
A Related Person shall not include the Board of Directors of the
Corporation acting as a group. In addition, a Related Person shall not include
any Person who possesses more than ten percent (10%) of the voting power of the
outstanding shares of Voting Stock of the Corporation at the time of filing
these Restated Articles of Incorporation.
(e) A Person shall be a "Beneficial Owner" of any shares of Voting
Stock:
(1) which such Person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(2) which such Person or any of its Affiliates or Associates has (A)
the right to acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement, arrangement, or
understanding or upon the exercise of conversion rights, exchange rights,
warrants, or options, or otherwise, or (B) the right to vote pursuant to
any agreement, arrangement, or understanding; or
(3) which are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of its Affiliates or Associates has
any agreement, arrangement, or understanding for the purpose of acquiring,
holding, voting, or disposing of any shares of Voting Stock.
(f) An "Affiliate" of, or a person Affiliated with, a specific Person
means a Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Person
specified.
(g) The term "Associate" used to indicate a relationship with any
Person, means (1) any corporation or organization (other than this Corporation
or a majority-owned Subsidiary of this Corporation) of which such Person is an
officer or partner or is, directly or indirectly, the Beneficial Owner of five
percent (5%) or more of any class of equity securities, (2) any trust or other
estate in which such Person has a substantial beneficial interest or as to which
such Person serves as trustee or in a similar fiduciary capacity, (3) any
relative or spouse of such Person, or any relative of such spouse, who has the
same home as such Person, or (4) any investment company registered under the
Investment Company Act of 1940, as amended, for which such Person or any
Affiliate of such Person serves as investment adviser.
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(h) "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Related Person set
forth in Section 8.4(d) hereof, the term "Subsidiary" shall mean only a
corporation of which a majority of each class of equity security is owned,
directly or indirectly, by the Corporation.
(i) "Continuing Director" means any member of the Board of Directors
of the Corporation (the "Board") who is not associated with the Related Person
and was a member of the Board prior to the time that the Related Person became a
Related Person, and any successor of a Continuing Director who is not associated
with the Related Person and is recommended to succeed a Continuing Director by
not less than two-thirds of the Continuing Directors then on the Board.
(j) "Independent Majority of Shareholders" shall mean the holders of
the outstanding shares of Voting Stock representing a majority of all the votes
entitled to be cast by all shares of Voting Stock other than shares Beneficially
Owned or controlled, directly or indirectly, by a Related Person.
(k) "Voting Stock" shall mean all outstanding shares of capital stock
of the Corporation or another corporation entitled to vote generally on the
election of Directors, and each reference to a proportion of shares of Voting
Stock shall refer to such proportion of the votes entitled to be cast by such
shares.
(l) "Substantial Part" means properties and assets involved in any
single transaction or a Series of Related Transactions having an aggregate fair
market value of more than ten percent (10%) of the total consolidated assets of
the Person in question as determined immediately prior to such transaction or
Series of Related Transactions.
Section 8.5. Director Determinations. A majority of the Continuing
Directors shall have the power to determine for the purposes of this Article
VIII, on the basis of information known to them: (a) the number of shares of
Voting Stock of which any Person is the Beneficial Owner, (b) whether a Person
is an Affiliate or Associate of another, (c) whether a Person has an agreement,
arrangement, or understanding with another as to the matters referred to in the
definition of "Beneficial Owner," (d) whether the assets subject to any Business
Combination constitute a Substantial Part, (e) whether two or more transactions
constitute a Series of Related Transactions, and (f) such other matters with
respect to which a determination is required under this Article VIII.
Section 8.6. Amendment of Article VIII or Certain Other Provisions.
Any amendment, change, or repeal of this Article VIII,
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or of Sections 6.1, 6.5, 7.2 or 9.2, or any other amendment of these Restated
Articles of Incorporation which would have the effect of modifying or permitting
circumvention of this Article VIII or such other provisions of these Restated
Articles of Incorporation, shall require the affirmative vote, at a meeting of
shareholders of the Corporation:
(a) Of at least sixty-six and two-thirds (66-2/3) of the votes
entitled to be cast by the holders of the outstanding shares of all classes of
Voting Stock of the Corporation considered for purposes of this Article VIII as
a single class; and
(b) Of an Independent Majority of Shareholders;
Provided, however, that this Section 8.6 shall not apply to, and such vote shall
not be required for, any such amendment, change, or repeal recommended to
shareholders by the favorable vote of not less than two-thirds (2/3) of the
Directors who then qualify as Continuing Directors with respect to all Related
Persons and any such amendment, change, or repeal so recommended shall require
only the vote, if any, required under the applicable provisions of the
Corporation Law.
Section 8.7. Fiduciary Obligations Unaffected. Nothing in this Article
VIII shall be construed to relieve any Related Person from any fiduciary duty
imposed by law.
Section 8.8. Article VIII Nonexclusive. The provisions of this Article
VIII are nonexclusive and are in addition to any other provisions of law or
these Restated Articles of Incorporation or the By-Laws of the Corporation
relating to Business Combinations, Related Persons, or similar matters.
ARTICLE IX
Miscellaneous Provisions
------------------------
Section 9.1. Amendment or Repeal. Except as otherwise expressly
provided for in these Restated Articles of Incorporation, the Corporation shall
be deemed, for all purposes, to have reserved the right to amend, alter, change,
or repeal any provision contained in these Restated Articles of Incorporation to
the extent and in the manner now or hereafter permitted or prescribed by
statute, and all rights herein conferred upon shareholders are granted subject
to such reservation.
Section 9.2. Redemption of Shares Acquired in Control Share
Acquisitions. If and whenever the provisions of IC 23-1-42 apply to the
Corporation, it is authorized to redeem its securities pursuant to IC
23-1-42-10.
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Section 9.3. Captions. The captions of the Articles and Sections of
these Restated Articles of Incorporation have been inserted for convenience of
reference only and do not in any way define, limit, construe, or describe the
scope or intent of any Article or Section hereof.
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<PAGE>
EXHIBIT 3-A (ii)
ARTICLES OF AMENDMENT OF THE
RESTATED ARTICLES OF INCORPORATION
OF QUALITY DINING, INC.
Quality Dining, Inc. (hereinafter referred to as the "Corporation"),
existing pursuant to the Indiana Business Corporation Law and desiring to give
notice of corporate action effectuating amendment of its Restated Articles of
Incorporation, sets forth the following facts:
Article I
Amendment
Section 1. The name of the Corporation following this amendment
continues to be Quality Dining, Inc.
Section 2. Upon effectiveness of these Articles of Amendment, the
Corporation's Restated Articles of Incorporation shall be amended by adding a
new Section 5.6 thereto, the exact text of which is attached as Exhibit A.
Section 3. The foregoing amendment was duly adopted by the
Corporation's Board of Directors on May 20, 1996. The effective date of such
amendment shall be the date of filing of these Articles of Amendment with the
office of the Secretary of State of the State of Indiana.
Article II
Manner of Adoption and Vote
Section 1. The amendment was adopted by the Corporation's Board of
Directors without shareholder action, and shareholder action was not required.
<PAGE>
Section 2. The manner of adoption of the amendment by the
Corporation's Board of Directors constitutes full legal compliance with the
provisions of the Indiana Business Corporation Law and the Corporation's
Restated Articles of Incorporation and By-Laws.
IN WITNESS WHEREOF, the undersigned officer of Quality Dining, Inc.
has executed these Articles of Amendment this 6th day of June, 1996.
/s/ David M. Findlay
----------------------------------
David M. Findlay,
President, Chief Executive Officer
and Chairman of the Board
<PAGE>
EXHIBIT A
---------
Section 5.6. Terms of Series A Convertible Cumulative Preferred
Stock. The designations, preferences, limitations and relative voting and other
rights of the shares of the first series of the authorized Preferred Stock of
the Corporation (such shares being hereinafter sometimes called the "Series A
Preferred Stock"), in addition to those set forth in these Restated Articles of
Incorporation which are applicable to Preferred Stock of all series, are hereby
fixed as follows:
(a) Designation and Amount. The shares of such series shall be
designated the Series A Convertible Cumulative Preferred Stock and the
number of authorized shares constituting such series shall be 141,450
shares. Any authorized shares of such series that are not issued at the
Effective Time of the Merger (as defined in paragraph (e)(viii) below)
shall revert to the status of authorized but unissued Preferred Stock of
the Corporation.
(b) Stated Value. The stated value of the Series A Preferred Stock
shall be $100.00 per share.
(c) Dividends.
(i) When and as declared by the Corporation's Board of
Directors, and to the extent permitted by the Corporation Law, the
Corporation will pay preferential dividends to the holders of the
Series A Preferred Stock as provided in this subsection (i). The
Series A Preferred Stock shall accrue dividends that shall increase
with the passage of time. Except as otherwise provided herein,
dividends on each share of Series A Preferred Stock (a "Share") will
accrue cumulatively on an annual basis, beginning with the first
anniversary of the Date of Issuance (as defined below), at the rate
indicated in the chart below, such rate to be calculated as the
specified percentage of the stated value of such Share from and
including the Date of Issuance of such Share, to and including the
date on which the Corporation redeems such Share (as provided for in
subsection (d) below). Such dividends will accrue whether or not they
have been declared and whether or not there are funds of the
Corporation legally available for the payment of dividends. For the
purposes of determining the amount of any dividend, July 1, 1993 will
be deemed the "Date of Issuance," regardless of (A) the date upon
which any Shares are issued, (B) the number of times transfer of such
Shares is made on the stock records maintained by or for the
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Corporation, and (C) the number of certificates which may be issued to
evidence such Shares.
The dividend rate shall follow the table set forth below:
<TABLE>
<CAPTION>
Annual Rate Years
------------- ----------------------------
<S> <C>
0% July 1, 1993 - June 30, 2000
2% July 1, 2000 - June 30, 2005
4% July 1, 2005 - June 30, 2010
6% July 1, 2010 - June 30, 2015
8% July 1, 2015 - June 30, 2020
10% July 1, 2020 - June 30, 2025
</TABLE>
(ii) Dividend Payment and Accrual Dates. The Corporation will
pay dividends, if at all, on the Series A Preferred Stock within 60
days following the applicable anniversary date as set forth in the
table above. To the extent dividends are not paid as provided for
herein, all such unpaid dividends will be deemed to have accrued on
each Share outstanding as of the applicable anniversary date, and will
be added to the Liquidation Value (as defined below) of such Share,
and will remain a part thereof until such dividends are paid or until
the Share is redeemed.
(iii) Distribution of Partial Dividend Payments. If at any time
the Corporation pays less than the total amount of dividends then
accrued with respect to the Series A Preferred Stock, such payment
will be distributed ratably among the holders of the Series A
Preferred Stock based upon the aggregate accrued but unpaid dividends
on the Shares held by such holder.
(d) Redemptions.
(i) Scheduled Redemption. Except as set forth herein, the
Corporation will redeem all of the then outstanding Shares of Series A
Preferred stock on July 1, 2025 (the "Scheduled Redemption Date"), at
a price per Share equal to the Liquidation Value thereof. The sum of
the stated value of the Share and all accrued cumulative and unpaid
dividends thereon shall be referred to as the "Liquidation Value."
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<PAGE>
(ii) Special Redemptions. Notwithstanding the foregoing, the
Corporation may redeem all of the then outstanding Shares of Series A
Preferred Stock at any time, upon 30 days prior written notice to the
holders of such Shares, at a price per share equal to the Liquidation
Value of the Shares as of the date upon which the Shares are to be
redeemed.
(iii) Payment. For each Share which is to be redeemed, if the
funds of the Corporation legally available for redemption of the
Shares on any redemption date are insufficient to redeem the total
number of Shares to be redeemed on such date, those funds which are
legally available will be used to redeem the maximum possible number
of Shares ratably among the holders of the Shares to be redeemed based
upon the aggregate Liquidation Value of such Shares held by each such
holder. At any time thereafter, when additional funds of the
Corporation are legally available for the redemption of Shares, such
funds will immediately be used to redeem the balance of the Shares
which the Corporation has become obligated to redeem on any redemption
date but which it has not redeemed.
(iv) Notice of Redemptions. The Corporation will mail written
notice of redemption of Series A Preferred Stock to each record holder
not more than sixty days nor less than thirty days prior to the date
on which such redemption is to be made. Upon mailing any notice of
redemption which relates to a redemption at the Corporation's option,
the Corporation will become obligated to redeem the total number of
Shares specified in such notice at the time of redemption specified
therein. In case fewer than the total number of Shares represented by
any certificate are redeemed, a new certificate representing the
number of unredeemed Shares will be issued to the holder thereof
without cost of such holder within three business days after surrender
of the certificate representing the redeemed Shares.
(v) Dividends After Redemption Date. No Share is entitled to
any dividends accruing after the date on which the Liquidation Value
of such Share is paid. On such date all rights of the holders of such
Share will cease, and such Share will not be deemed to be outstanding.
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<PAGE>
(e) Conversion Rights.
(i) Subject to paragraphs (ii) and (iii) below, any holder of
Series A Preferred Stock may convert all of the Series A Preferred
Stock held by such holder into shares of Common Stock in the manner,
and at such time, as provided for in paragraphs (ii) and (iii), below.
(ii) Each share of Series A Preferred Stock shall be convertible,
at the option of the holder thereof, and without the payment of
additional consideration by the holder thereof, at any time within
ninety (90) days after the Effective Time of the Merger (as defined in
paragraph (viii) below) into such number of fully paid and
nonassessable shares of the Corporation's Common Stock as shall be
determined by multiplying the number of shares to be converted by the
Liquidation Value of such shares, and dividing the result by the Fair
Market Value per share of the Corporation's Common Stock.
(iii) The Fair Market Value per share of the Corporation's Common
Stock shall be deemed to be the average closing price per share of the
Corporation's Common Stock on the Nasdaq National Market System for
the five trading days immediately preceding (and not including) the
date of the Effective Time of the Merger.
(iv) Each conversion of Series A Preferred Stock will be deemed
to have been effective as of the close of business on the date on
which the certificate or certificates representing the Series A
Preferred Stock to be converted have been surrendered at the principal
office of the Corporation. At such time that such conversion has been
effected, the rights of the holder of such Series A Preferred Stock as
such holder will cease, and the person or persons in whose name or
names any certificate or certificates for shares of Common Stock are
to be issued upon such conversion will be deemed to have become the
holder or holders of record of the shares of Common Stock represented
thereby.
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<PAGE>
(v) As soon as possible after a conversion has been effected
(but in any event within five business days in the case of paragraph
(vii) below), the Corporation will deliver to the converting holder:
(A) a certificate or certificates representing the number
of shares of Common Stock issuable by reason of such conversion
in such name or names and such denomination or denominations as
the converting holder has specified; and
(B) payment in an amount equal to the amount payable under
paragraph (vii) below with respect to such conversion.
(vi) The issuance of certificates for shares of Common Stock
upon conversion of Series A Preferred Stock will be made without
charge to the holders of such Series A Preferred Stock. Upon
conversion of each share of Series A Preferred Stock, the Corporation
will take all such actions as are necessary in order to ensure the
Common Stock issuable with respect to such conversion will be validly
issued, fully paid, and non-assessable.
(vii) If any fractional interest in a share of Common Stock
would, except for the provisions of this paragraph (vii), be
deliverable upon any conversion of the Series A Preferred Stock, the
Corporation, in lieu of delivering the fractional share therefor, will
pay an amount to the holder thereof equal to such fractional interest
of the Fair Market Value per share.
(viii) The "Effective Time of the Merger" means the date an
appropriate certificate of Merger is filed with the Delaware Secretary
of State effecting the merger of BAC, Inc., the Corporation's wholly
owned subsidiary, with and into Bruegger's Corporation.
(f) Voting Rights. The holders of the Series A Preferred Stock are
entitled to one vote for each share held at all meetings of stockholders.
Except as required by the Corporation Law or by the provisions of Section
5.6(h),
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<PAGE>
holders of Series A Preferred Stock shall vote together with the holders of
Common Stock as a single class.
(g) Priorities.
(i) Dividends. As long as any Series A Preferred Stock remains
outstanding, the Corporation will not declare or pay any dividend or
make any distribution upon the Common Stock, unless and until all
accrued but unpaid dividends on Series A Preferred Stock have been
fully paid to the holders of such shares.
(ii) Priority on Liquidation. Upon any liquidation, dissolution,
or winding up of the Corporation, if the assets of the Corporation to
be distributed among the holders of Series A Preferred Stock and the
Common Stock are insufficient to permit payment to the holders of
Series A Preferred Stock in an amount equal to the Liquidation Value
of all outstanding shares of Series A Preferred Stock, then the assets
of the Corporation to be distributed to such holders will be
distributed (A) first, to the holders of Series A Preferred Stock,
until such holders have been paid the aggregate amount which they are
entitled to be paid, or, if the assets to be distributed are
insufficient for such purpose, the entire assets to be distributed
will be distributed ratably among such holders based upon the
aggregate Liquidation Value of Series A Preferred Stock held by each
such holder, and (B) second, the balance (if any) will be distributed
ratably among the holders of the Common Stock.
(h) Amendment and Waiver. No amendment, modification or waiver will
be binding or effective with respect to any provision of this Section 5.6
without the prior written consent of the holders of at least 50% of the
Series A Preferred Stock outstanding at the time such action is taken;
provided that no such action may change (i) the rate at which or the manner
in which dividends on the Series A Preferred Stock accrue, the times at
which such dividends become payable, the amount payable on redemption of
the Series A Preferred Stock, or the times at which redemption of Series A
Preferred Stock is to occur, without the prior written consent of the
holders of at least 60% of the Series A Preferred Stock then outstanding,
or (ii) the percentage required to approve any change described in clause
(i) above, without the prior written consent of the holders of at least 60%
of the Series A Preferred Stock then outstanding. Notwithstanding anything
to be contrary in the foregoing, the Corporation may issue new series of
Preferred Stock without the prior written consent of any holder of
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<PAGE>
Series A Preferred Stock, provided that the Corporation complies with the
requirements of the Corporation Law and these Restated Articles of
Incorporation.
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<PAGE>
EXHIBIT 3-A (iii)
ARTICLES OF AMENDMENT SETTING FORTH
THE DESIGNATION, VOTING POWERS, PREFERENCES AND
RELATIVE PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS
AND QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF
SERIES B PARTICIPATING CUMULATIVE PREFERRED STOCK
OF QUALITY DINING, INC.
Pursuant to Section 23-1-25-1 and Section 23-1-25-2 of the Indiana
Business Corporation Law, Quality Dining, Inc. (the "Corporation"), a
corporation organized and existing under the Indiana Business Corporation Law,
in accordance with the provisions of Section 23-1-18-1 and Section 23-1-38-6
thereof, DOES HEREBY CERTIFY:
That, pursuant to the authority conferred upon the Board of Directors
of the Corporation by the Restated Articles of Incorporation of the Corporation
(the "Articles of Incorporation"), the Board of Directors of the Corporation on
March 27, 1997, adopted the following resolution amending the Articles of
Incorporation to create a series of Preferred Stock designated as Series B
Participating Cumulative Preferred Stock:
RESOLVED that pursuant to the authority vested in the Board of
Directors of the Corporation in the Articles of Incorporation, the
designations, voting powers, preferences and relative, participating,
optional and other special rights and qualifications, limitations or
restrictions of a series of Preferred Stock be, and they hereby are, fixed
as follows:
SECTION 1. Designation and Number of Shares. The shares of such
series shall be designated as "Series B Participating Cumulative Preferred
Stock" (the "Series B Preferred Stock"), without par value. The number of shares
initially constituting the Series B Preferred Stock shall be 180,000; provided,
however, that, if more than a total of 180,000 shares of Series B Preferred
Stock shall be issuable upon the exercise of Rights (the "Rights") issued
pursuant to that Rights Agreement between the Corporation and KeyCorp
Shareholder Services, Inc., as Rights Agent (the "Rights Agreement"), the Board
of Directors of the Corporation, pursuant to Section 23-1-25-2(d) of the Indiana
Business Corporation Law, shall direct by resolution or resolutions that
articles of amendment be properly executed and delivered to the Secretary of
State for the State of Indiana for filing in accordance with the provisions of
Section 23-1-18-1 and Section 23-1-38-6 thereof, providing for the total number
of shares of Series B Preferred Stock authorized to be issued to be increased
(to the extent that the Articles of Incorporation then permit) to the largest
number of whole shares (rounded up to the nearest whole number) issuable upon
exercise of such Rights.
SECTION 2. Dividends or Distributions.
(a) Subject to the prior and superior rights of the holders of shares
of any other series of Preferred Stock or other class of capital stock of
the Corporation ranking prior and superior to the shares of Series B
Preferred Stock with respect to dividends, the holders of shares of the
Series B Preferred
<PAGE>
Stock shall be entitled to receive, when, as and if declared by the Board
of Directors, out of the assets of the Corporation legally available
therefor, (1) quarterly dividends payable in cash on the last day of each
fiscal quarter in each year, or such other dates as the Board of Directors
of the Corporation shall approve (each such date being referred to herein
as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly
Dividend Payment Date after the first issuance of a share or a fraction of
a share of Series B Preferred Stock, in the amount of $.01 per whole share
(rounded to the nearest cent) less the amount of all cash dividends
declared on the Series B Preferred Stock pursuant to the following clause
(2) since the immediately preceding Quarterly Dividend Payment Date or,
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series B Preferred Stock
(the total of which shall not, in any event, be less than zero) and (2)
dividends payable in cash on the payment date for each cash dividend
declared on the outstanding shares of Common Stock, without par value, and
non-voting Common Stock, without par value (collectively, the "Common
Stock") in an amount per whole share (rounded to the nearest cent) equal to
the Formula Number (as hereinafter defined) then in effect times the cash
dividends then to be paid on each share of Common Stock. In addition, if
the Corporation shall pay any dividend or make any distribution on the
Common Stock payable in assets, securities or other forms of noncash
consideration (other than dividends or distributions solely in shares of
Common Stock), then, in each such case, the Corporation shall
simultaneously pay or make on each outstanding whole share of Series B
Preferred Stock a dividend or distribution in like kind equal to the
Formula Number then in effect times such dividend or distribution on each
share of the Common Stock. As used herein, the "Formula Number" shall be
100; provided, however, that, if at any time hereafter, the Corporation
shall (i) declare or pay any dividend on the Common Stock payable in shares
of Common Stock or make any distribution on the Common Stock in shares of
Common Stock, (ii) subdivide (by a stock split or otherwise) the
outstanding shares of Common Stock into a larger number of shares of Common
Stock or (iii) combine (by a reverse stock split or otherwise) the
outstanding shares of Common Stock into a smaller number of shares of
Common Stock, then in each such event the Formula Number shall be adjusted
to a number determined by multiplying the Formula Number in effect
immediately prior to such event by a fraction, the numerator of which is
the number of shares of Common Stock that are outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that are outstanding immediately prior to such event (and rounding
the result to the nearest whole number); and provided further, that, if at
any time hereafter the Distribution Record Date, the Corporation shall
issue any shares of its capital stock in a merger, reclassification, or
change of the outstanding shares of Common Stock, then in each such event
the Formula Number shall be appropriately adjusted to reflect such merger,
reclassification or change so that each share of Preferred Stock continues
to be the economic equivalent of a
<PAGE>
Formula Number of shares of Common Stock prior to such merger,
reclassification or change.
(b) The Corporation shall declare a dividend or distribution on the
Series B Preferred Stock as provided in Section 2(a) immediately prior to
or at the same time it declares a dividend or distribution on the Common
Stock (other than a dividend or distribution solely in shares of Common
Stock); provided, however, that, in the event no dividend or distribution
(other than a dividend or distribution in shares of Common Stock) shall
have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $.01 per share on the Series B Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date. The Board of Directors may fix a record date for the determination
of holders of shares of Series B Preferred Stock entitled to receive a
dividend or distribution declared thereon, which record date shall be the
same as the record date for any corresponding dividend or distribution on
the Common Stock.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Preferred Stock from and after the Quarterly Dividend
Payment Date next preceding the date of original issue of such shares of
Series B Preferred Stock; provided, however, that dividends on such shares
which are originally issued after the record date for the determination of
holders of shares of Series B Preferred Stock entitled to receive a
quarterly dividend and on or prior to the next succeeding Quarterly
Dividend Payment Date shall begin to accrue and be cumulative from and
after such Quarterly Dividend Payment Date. Notwithstanding the foregoing,
dividends on shares of Series B Preferred Stock which are originally issued
prior to the record date for the determination of holders of shares of
Series B Preferred Stock entitled to receive a quarterly dividend on the
first Quarterly Dividend Payment Date shall be calculated as if cumulative
from and after the last day of the fiscal quarter next preceding the date
of original issuance of such shares. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Series B Preferred
Stock in an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a share-
by-share basis among all such shares at the time outstanding.
(d) So long as any shares of the Series B Preferred Stock are
outstanding, no dividends or other distributions shall be declared, paid or
distributed, or set aside for payment or distribution, on the Common Stock
unless, in each case, the dividend required by this Section 2 to be
declared on the Series B Preferred Stock shall have been declared.
(e) The holders of the shares of Series B Preferred Stock shall not be
entitled to receive any dividends or other distributions except as provided
herein.
<PAGE>
SECTION 3. Voting Rights. The holders of shares of Series B
Preferred Stock shall have the following voting rights:
(a) Each holder of Series B Preferred Stock shall be entitled to a
number of votes equal to the Formula Number then in effect, for each share
of Series B Preferred Stock held of record on each matter on which holders
of the Common Stock or shareholders generally are entitled to vote,
multiplied by the maximum number of votes per share which any holder of the
Common Stock or shareholders generally then have with respect to such
matter (assuming any holding period or other requirement to vote a greater
number of shares is satisfied).
(b) Except as otherwise provided herein or by applicable law, the
holders of shares of Series B Preferred Stock and the holders of shares of
Common Stock shall vote together as one class for the election of directors
of the Corporation and on all other matters submitted to a vote of
shareholders of the Corporation.
(c) If, at the time of any annual meeting of shareholders for the
election of directors, the equivalent of six quarterly dividends (whether
or not consecutive) payable on any share or shares of Series B Preferred
Stock are in default, the number of directors constituting the Board of
Directors of the Corporation shall be increased by two. In addition to
voting together with the holders of Common Stock for the election of other
directors of the Corporation, the holders of record of the Series B
Preferred Stock, voting separately as a class to the exclusion of the
holders of Common Stock, shall be entitled at said meeting of shareholders
(and at each subsequent annual meeting of shareholders), unless all
dividends in arrears have been paid or declared and set apart for payment
prior thereto, to vote for the election of two directors of the
Corporation, the holders of any Series B Preferred Stock being entitled to
cast a number of votes per share of Series B Preferred Stock equal to the
Formula Number. Until the default in payments of all dividends which
permitted the election of said directors shall cease to exist, any director
who shall have been so elected pursuant to the next preceding sentence may
be removed at any time, either with or without cause, only by the
affirmative vote of the holders of the shares of Series B Preferred Stock
at the time entitled to cast a majority of the votes entitled to be cast
for the election of any such director at a special meeting of such holders
called for that purpose, and any vacancy thereby created may be filled by
the vote of such holders. If and when such default shall cease to exist,
the holders of the Series B Preferred Stock shall be divested of the
foregoing special voting rights, subject to revesting in the event of each
and every subsequent like default in payments of dividends. Upon the
termination of the foregoing special voting rights, the terms of office of
all persons who may have been elected directors pursuant to said special
voting rights shall forthwith terminate, and the number of directors
constituting the Board of Directors shall be reduced by two. The voting
rights granted by this
<PAGE>
Section 3(c) shall be in addition to any other voting rights granted to the
holders of the Series B Preferred Stock in this Section 3.
(d) Except as provided herein, in Section 11 or by applicable law,
holders of Series B Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for authorizing
or taking any corporate action.
SECTION 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series B Preferred
Stock outstanding shall have been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Preferred
Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series B
Preferred Stock, except dividends paid ratably on the Series B
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series B
Preferred Stock; provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon liquidation, dissolution or winding
up) to the Series B Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series B Preferred Stock, or any shares of stock ranking on a
parity with the Series B Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all
<PAGE>
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (a) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. Liquidation Rights. Upon the liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series B
Preferred Stock unless, prior thereto, the holders of shares of Series B
Preferred Stock shall have received an amount equal to the accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (x) $.01 per whole share or
(y) an aggregate amount per share equal to the Formula Number then in effect
times the aggregate amount to be distributed per share to holders of Common
Stock or (2) to the holders of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series B Preferred
Stock, except distributions made ratably on the Series B Preferred Stock and all
other such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or winding
up; provided that in no event shall the amount or amounts, if any, exceed $100
per share plus accrued dividends in the case of involuntary liquidation,
dissolution or winding up of the Corporation.
SECTION 6. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, then in any such case the then
outstanding shares of Series B Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share equal to the Formula
Number then in effect times the aggregate amount of stock, securities, cash or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is exchanged or changed. In the event both
this Section 6 and Section 2 appear to apply to a transaction, this Section 6
will control.
SECTION 7. No Redemption; No Sinking Fund.
(a) The shares of Series B Preferred Stock shall not be subject to
redemption by the Corporation or at the option of any holder of Series B
Preferred Stock; provided, however, that the Corporation may purchase or
otherwise acquire outstanding shares of Series B Preferred Stock in the
open market or by offer to any holder or holders of shares of Series B
Preferred Stock.
<PAGE>
(b) The shares of Series B Preferred Stock shall not be subject to or
entitled to the operation of a retirement or sinking fund.
SECTION 8. Ranking. The Series B Preferred Stock shall rank junior
to all other series of Preferred Stock of the Corporation, unless the Board of
Directors shall specifically determine otherwise in fixing the powers,
preferences and relative, participating, optional and other special rights of
the shares of such series and the qualifications, limitations or restrictions
thereof.
SECTION 9. Fractional Shares. The Series B Preferred Stock shall be
issuable upon exercise of the Rights issued pursuant to the Rights Agreement in
whole shares or in any fraction of a share that is one one-hundredth (1/100th)
of a share or any integral multiple of such fraction which shall Entitle the
holder, in proportion to such holder's fractional shares, to receive dividends,
exercise voting rights, participate in distributions and to have the benefit of
all other rights of holders of Series B Preferred Stock. In lieu of fractional
shares, the Corporation, prior to the first issuance of a share or a fraction of
a share of Series B Preferred Stock, may elect (1) to make a cash payment as
provided in the Rights Agreement for fractions of a share other than one one-
hundredth (1/100th) of a share or any integral multiple thereof or (2) to issue
depository receipts evidencing such authorized fraction of a share of Series B
Preferred Stock pursuant to an appropriate agreement between the Corporation and
a depository selected by the Corporation; provided that such agreement shall
provide that the holders of such depository receipts shall have all the rights,
privileges and preferences to which they are entitled as holders of the Series B
Preferred Stock.
SECTION 10. Reacquired Shares. Any shares of Series B Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock, without designation as to series until such shares
are once more designated as part of a particular series by the Board of
Directors pursuant to the Articles of Incorporation.
SECTION 11. Amendment. None of the powers, preferences and relative,
participating, optional and other special rights of the Series B Preferred Stock
as provided herein or in the Articles of Incorporation shall be amended in any
manner which would alter or change the powers, preferences, rights or privileges
of the holders of Series B Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least 66-2/3% of the
outstanding shares of Series B Preferred Stock, voting as a separate class;
provided, however, that no such amendment approved by the holders of at least
66-2/3% of the outstanding shares of Series B Preferred Stock shall be deemed to
apply to the powers, preferences, rights or privileges of any holder of shares
of Series B Preferred Stock originally issued upon exercise of a Right after the
time of such approval without the approval of such holder.
The foregoing amendment was duly adopted by the Board of Directors of
the Corporation pursuant to Section 23-1-25-2(d) and Section 23-1-38-2(7) of the
Indiana Business Corporation Law, and, accordingly, shareholder action was not
required.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be duly executed in its corporate name on this 31st day of March,
1997.
QUALITY DINING, INC.
By: /s/ David M. Findlay
---------------------------------------------
Name: David M. Findlay
Title: Senior Vice President-Finance
Attest:
/s/ John C. Firth
- -----------------------------
Name: John C. Firth
Title: Senior Vice President,
General Counsel and Secretary
<PAGE>
EXHIBIT 3-B
BY-LAWS
OF
QUALITY DINING, INC.
(As last amended effective March 27, 1997
to amend Section 2.1)
ARTICLE I
Meetings of Shareholders
------------------------
Section 1.1. Annual Meetings. Annual meetings of the shareholders of
the Corporation shall be held on the first Monday of March of each year
commencing in March, 1995, at such hour and at such place within or without the
State of Indiana as shall be designated by the Board of Directors. In the
absence of designation, the meeting shall be held at the principal office of the
Corporation at 11:00 a.m. (local time). The Board of Directors may, by
resolution, change the date or time of such annual meeting. If the day fixed
for any annual meeting of shareholders shall fall on a legal holiday, then such
annual meeting shall be held on the first following day that is not a legal
holiday.
Section 1.2. Special Meetings. Special meetings of the shareholders
of the Corporation may be called at any time by the Board of Directors or the
Chairman of the Board and shall be called by the Board of Directors if the
Secretary receives written, dated and signed demands for a special meeting,
describing in reasonable detail the purpose or purposes for which it is to be
held, from the holders of shares representing at least twenty-five percent (25%)
of all votes entitled to be cast on any issue proposed to be considered at the
proposed special meeting; provided, however, that any such demand(s) delivered
to the Secretary at any time at which the Corporation has more than 50
shareholders must be properly delivered by the holders of shares representing at
least 80% of all the votes entitled to be cast on any issue proposed to be
considered at the proposed special meeting. If the Secretary receives one (1)
or more proper written demands for a special meeting of shareholders, the Board
of Directors may set a record date for determining shareholders entitled to make
such demand. The Board of Directors or the Chairman of the Board, as the case
may be, calling a special meeting of shareholders shall set the date, time and
place of such meeting, which may be held within or without the State of Indiana.
Section 1.3. Notices. A written notice, stating the date, time, and
place of any meeting of the shareholders, and, in the case of a special meeting,
the purpose or purposes for which such meeting is called, shall be delivered or
mailed by the Secretary of the Corporation, to each shareholder of record of the
Corporation entitled to notice of or to vote at such meeting no fewer than ten
(10) nor more than sixty (60) days before the date of the meeting. In the event
of a special meeting of shareholders required to be called as the result of a
demand therefor made by shareholders, such notice shall be given no later than
the sixtieth (60th) day after the Corporation's receipt of the demand requiring
the meeting to be called. Notice of shareholders'
<PAGE>
meetings, if mailed, shall be mailed, postage prepaid, to each shareholder at
his address shown in the Corporation's current record of shareholders.
Notice of a meeting of shareholders shall be given to shareholders not
entitled to vote, but only if a purpose for the meeting is to vote on any
amendment to the Corporation's Restated Articles of Incorporation, merger, or
share exchange to which the Corporation would be a party, sale of the
Corporation's assets, dissolution of the Corporation, or consideration of voting
rights to be accorded to shares acquired or to be acquired in a "control share
acquisition" (as such term is defined in the Indiana Business Corporation Law).
Except as required by the foregoing sentence or as otherwise required by the
Indiana Business Corporation Law or the Corporation's Restated Articles of
Incorporation, notice of a meeting of shareholders is required to be given only
to shareholders entitled to vote at the meeting.
A shareholder or his proxy may at any time waive notice of a meeting
if the waiver is in writing and is delivered to the Corporation for inclusion in
the minutes or filing with the Corporation's records. A shareholder's
attendance at a meeting, whether in person or by proxy, (a) waives objection to
lack of notice or defective notice of the meeting, unless the shareholder or his
proxy at the beginning of the meeting objects to holding the meeting or
transacting business at the meeting, and (b) waives objection to consideration
of a particular matter at the meeting that is not within the purpose or purposes
described in the meeting notice, unless the shareholder or his proxy objects to
considering the matter when it is presented. Each shareholder who has, in the
manner above provided, waived notice or objection to notice of a shareholders'
meeting shall be conclusively presumed to have been given due notice of such
meeting, including the purpose or purposes thereof.
If an annual or special shareholders' meeting is adjourned to a
different date, time, or place, notice need not be given of the new date, time,
or place if the new date, time, or place is announced at the meeting before
adjournment, unless a new record date is or must be established for the
adjourned meeting.
Section 1.4. Voting. Except as otherwise provided by the Indiana
Business Corporation Law or the Corporation's Restated Articles of
Incorporation, each share of the capital stock of any class of the Corporation
that is outstanding at the record date established for any annual or special
meeting of shareholders and is outstanding at the time of and represented in
person or by proxy at the annual or special meeting, shall entitle the record
holder thereof, or his proxy, to one (1) vote on each matter voted on at the
meeting.
Section 1.5. Quorum. Unless the Corporation's Restated Articles of
Incorporation or the Indiana Business Corporation Law provide otherwise, at all
meetings of shareholders, a majority of the votes entitled to be cast on a
matter, represented in person or by proxy, constitutes a quorum for action on
the matter. Action may be taken at a shareholders' meeting only on matters with
respect to which a quorum exists; provided, however, that any meeting of
shareholders, including annual and special meetings and any adjournments
thereof, may be adjourned to a later date although less than a quorum is
present. Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the
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<PAGE>
meeting and for any adjournment of that meeting unless a new record date is or
must be set for that adjourned meeting.
Section 1.6. Vote Required To Take Action. If a quorum exists as to
a matter to be considered at a meeting of shareholders, action on such matter
(other than the election of Directors) is approved if the votes properly cast
favoring the action exceed the votes properly cast opposing the action, except
as the Corporation's Restated Articles of Incorporation or the Indiana Business
Corporation Law require a greater number of affirmative votes. Directors shall
be elected by a plurality of the votes properly cast.
Section 1.7. Record Date. Only such persons shall be entitled to
notice of or to vote, in person or by proxy, at any shareholders' meeting as
shall appear as shareholders upon the books of the Corporation as of such record
date as the Board of Directors shall determine, which date may not be earlier
than the date seventy (70) days immediately preceding the meeting. In the
absence of such determination, the record date shall be the fiftieth (50th) day
immediately preceding the date of such meeting. Unless otherwise provided by
the Board of Directors, shareholders shall be determined as of the close of
business on the record date.
Section 1.8. Proxies. A shareholder may vote his shares either in
person or by proxy. A shareholder may appoint a proxy to vote or otherwise act
for the shareholder (including authorizing the proxy to receive, or to waive,
notice of any shareholders' meeting within the effective period of such proxy)
by signing an appointment form, either personally or by the shareholders'
attorney-in-fact. An appointment of a proxy is effective when received by the
Secretary or other officer or agent authorized to tabulate votes and is
effective for eleven (11) months unless a longer period is expressly provided in
the appointment form. The proxy's authority may be limited to a particular
meeting or may be general and authorize the proxy to represent the shareholder
at any meeting of shareholders held within the time provided in the appointment
form. Subject to the Indiana Business Corporation Law and to any express
limitation on the proxy's authority appearing on the face of the appointment
form, the Corporation is entitled to accept the proxy's vote or other action as
that of the shareholder making the appointment.
Section 1.9. Removal of Directors. Any or all of the members of the
Board of Directors may be removed, for good cause, only at a meeting of the
shareholders called expressly for that purpose, by a vote of the holders of
outstanding shares representing at least sixty-six and two-thirds percent (66-
2/3%) of the votes then entitled to be cast at an election of Directors.
Directors may not be removed in the absence of good cause.
Section 1.10. Written Consents. Any action required or permitted to
be taken at a shareholders' meeting may be taken without a meeting if the action
is taken by all the shareholders entitled to vote on the action. The action
must be evidenced by one (1) or more written consents describing the action
taken, signed by all the shareholders entitled to vote on the action, and
delivered to the Corporation for inclusion in the minutes or filing with the
corporate records. Action taken under this Section 1.10 is effective when the
last shareholder signs the consent, unless the consent specifies a different
prior or subsequent effective date, in which case
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<PAGE>
the action is effective on or as of the specified date. Such consent shall have
the same effect as a unanimous vote of all shareholders and may be described as
such in any document.
Section 1.11. Participation by Conference Telephone. The Chairman of
the Board or the Board of Directors may permit any or all shareholders to
participate in an annual or special meeting of shareholders by, or through the
use of, any means of communication, such as conference telephone, by which all
shareholders participating may simultaneously hear each other during the
meeting. A shareholder participating in a meeting by such means shall be deemed
to be present in person at the meeting.
ARTICLE II
Directors
---------
Section 2.1. Number and Terms. The business and affairs of the
Corporation shall be managed under the direction of a Board of Directors
consisting of twelve (12) directors.
The Directors shall be divided into three (3) groups, with each group
consisting of one-third (1/3) of the total Directors, as near as may be, with
the term of office of the first group to expire at the annual meeting of
shareholders in 1995, the term of office of the second group to expire at the
annual meeting of shareholders in 1996, and the term of office of the third
group to expire at the annual meeting of shareholders in 1997; and at each
annual meeting of shareholders, the Directors chosen to succeed those whose
terms then expire shall be identified as being of the same group as the
Directors they succeed and shall be elected for a term expiring at the third
succeeding annual meeting of shareholders.
Despite the expiration of a Director's term, the Director shall
continue to serve until his successor is elected and qualified, or until the
earlier of his death, resignation, disqualification or removal, or until there
is a decrease in the number of Directors. Any vacancy occurring in the Board of
Directors, from whatever cause arising, shall be filled by selection of a
successor by a majority vote of the remaining members of the Board of Directors
(although less than a quorum); provided, however, that if such vacancy or
vacancies leave the Board of Directors with no members or if the remaining
members of the Board are unable to agree upon a successor or determine not to
select a successor, such vacancy may be filled by a vote of the shareholders at
a special meeting called for that purpose or at the next annual meeting of
shareholders. The term of a Director elected or selected to fill a vacancy
shall expire at the end of the term for which such Director's predecessor was
elected, or if the vacancy arises because of an increase in the size of Board of
Directors, at the end of the term specified at the time of election or
selection.
The Directors and each of them shall have no authority to bind the
Corporation except when acting as a Board.
Section 2.2. Quorum and Vote Required To Take Action. A majority of
the whole Board of Directors shall be necessary to constitute a quorum for the
transaction of any
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<PAGE>
business, except the filling of vacancies. If a quorum is present when a vote is
taken, the affirmative vote of a majority of the Directors present shall be the
act of the Board of Directors, unless the act of a greater number is required by
the Indiana Business Corporation Law, the Corporation's Restated Articles of
Incorporation or these By-Laws.
Section 2.3. Annual and Regular Meetings. The Board of Directors
shall meet annually, without notice, immediately following the annual meeting of
the shareholders, for the purpose of transacting such business as properly may
come before the meeting. Other regular meetings of the Board of Directors, in
addition to said annual meeting, shall be held on such dates, at such times and
at such places as shall be fixed by resolution adopted by the Board of Directors
and specified in a notice of each such regular meeting, or otherwise
communicated to the Directors. The Board of Directors may at any time alter the
date for the next regular meeting of the Board of Directors.
Section 2.4. Special Meetings. Special meetings of the Board of
Directors may be called by any member of the Board of Directors upon not less
than twenty-four (24) hours' notice given to each Director of the date, time,
and place of the meeting, which notice need not specify the purpose or purposes
of the special meeting. Such notice may be communicated in person (either in
writing or orally), by telephone, telegraph, teletype, or other form of wire or
wireless communication, or by mail, and shall be effective at the earlier of the
time of its receipt or, if mailed, five (5) days after its mailing. Notice of
any meeting of the Board may be waived in writing at any time if the waiver is
signed by the Director entitled to the notice and is filed with the minutes or
corporate records. A Director's attendance at or participation in a meeting
waives any required notice to the Director of the meeting, unless the Director
at the beginning of the meeting (or promptly upon the Director's arrival)
objects to holding the meeting or transacting business at the meeting and does
not thereafter vote for or assent to action taken at the meeting.
Section 2.5. Written Consents. Any action required or permitted to
be taken at any meeting of the Board of Directors may be taken without a meeting
if the action is taken by all members of the Board. The action must be
evidenced by one (1) or more written consents describing the action taken,
signed by each Director, and included in the minutes or filed with the corporate
records reflecting the action taken. Action taken under this Section 2.5 is
effective when the last Director signs the consent, unless the consent specifies
a different prior or subsequent effective date, in which cases the action is
effective on or as of the specified date. A consent signed under this Section
2.5 shall have the same effect as a unanimous vote of all members of the Board
and may be described as such in any document.
Section 2.6. Participation by Conference Telephone. The Board of
Directors may permit any or all Directors to participate in a regular or special
meeting by, or through the use of, any means of communication, such as
conference telephone, by which all Directors participating may simultaneously
hear each other during the meeting. A Director participating in a meeting by
such means shall be deemed to be present in person at the meeting.
Section 2.7. Executive Committee. The Board of Directors shall
appoint up to six (6) members to an Executive Committee. The Executive Committee
shall, subject to the
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<PAGE>
restrictions of Section 2.9, be authorized to exercise the authority of the full
Board of Directors at any times other than during regular or special meetings of
the Board of Directors. All actions taken by the Executive Committee shall be
reported at the first regular meeting of the Board of Directors following such
actions. Members of the Executive Committee shall serve at the pleasure of the
Board of Directors.
Section 2.8. Other Committees. (a) The Board of Directors may create
one (1) or more committees in addition to the Executive Committee and appoint
members of the Board of Directors to serve on them, by resolution of the Board
of Directors adopted by a majority of all the Directors in office when the
resolution is adopted. The committee may exercise the authority of the Board of
Directors to the extent specified in the resolution. Each committee may have
one (1) or more members, and all the members of such committee shall serve at
the pleasure of the Board of Directors.
Section 2.9. Limitations on Committees; Notice, Quorum and Voting.
(a) Neither the Executive Committee nor any other committee hereafter
established may:
(1) authorize dividends or other distributions, except a committee may
authorize or approve a reacquisition of shares if done according to a
formula or method prescribed by the Board of Directors;
(2) approve or propose to shareholders action that is required to be
approved by shareholders;
(3) fill vacancies on the Board of Directors or on any of its committees;
(4) except as permitted under Section 2.9(a)(7) below, amend the
Corporation's Restated Articles of Incorporation under IC 23-1-38-2;
(5) adopt, amend, repeal, or waive provisions of these By-Laws;
(6) approve a plan of merger not requiring shareholder approval; or
(7) authorize or approve the issuance or sale or a contract for sale of
shares, or determine the designation and relative rights, preferences,
and limitations of a class or series of shares, except the Board of
Directors may authorize a committee (or an executive officer of the
Corporation designated by the Board of Directors) to take the action
described in this Section 2.9(a)(7) within limits prescribed by the
Board of Directors.
(b) Except to the extent inconsistent with the resolutions creating a
committee, Sections 2.1 through 2.6 of these By-Laws, which govern meetings,
action without meetings, notice and waiver of notice, quorum and voting
requirements and telephone participation in meetings of the Board of Directors,
apply to each committee and its members as well.
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<PAGE>
ARTICLE III
Officers
--------
Section 3.1. Designation, Selection and Terms. The officers of the
Corporation shall consist of the Chairman of the Board, the President, the Chief
Financial Officer, the Treasurer and the Secretary. The Board of Directors may
also elect Vice Presidents, Assistant Secretaries and Assistant Treasurers, and
such other officers or assistant officers as it may from time to time determine
by resolution creating the office and defining the duties thereof. In addition,
the Chairman of the Board or the President may, by a certificate of appointment
creating the office and defining the duties thereof delivered to the Secretary
for inclusion with the corporate records, from time to time create and appoint
such assistant officers as they deem desirable. The officers of the Corporation
shall be elected by the Board of Directors (or appointed by the Chairman of the
Board or the President as provided above) and need not be selected from among
the members of the Board of Directors, except for the Chairman of the Board and
the President who shall be members of the Board of Directors. Any two (2) or
more offices may be held by the same person. All officers shall serve at the
pleasure of the Board of Directors and, with respect to officers appointed by
the Chairman of the Board or the President, also at the pleasure of such
officers. The election or appointment of an officer does not itself create
contract rights.
Section 3.2. Removal. The Board of Directors may remove any officer
at any time with or without cause. An officer appointed by the Chairman of the
Board or the President may also be removed at any time, with or without cause,
by either of such officers. Vacancies in such offices, however occurring, may
be filled by the Board of Directors at any meeting of the Board of Directors (or
by appointment by the Chairman of the Board or the President, to the extent
provided in Section 3.1 of these By-Laws).
Section 3.3. Chairman of the Board. The Chairman of the Board shall
be the chief executive and principal policymaking officer of the Corporation.
Subject to the authority of the Board of Directors, he shall formulate the major
policies to be pursued in the administration of the Corporation's affairs. He
shall study and make reports and recommendations to the Board of Directors with
respect to major problems and activities of the Corporation and shall see that
the established policies are placed into effect and carried out under the
direction of the President. The Chairman of the Board shall, if present,
preside at all meetings of the shareholders and of the Board of Directors.
Section 3.4. Co-Chairman of the Board. The Co-Chairman of the Board
shall not be an officer of the Corporation, but shall have such power and
perform such duties as the Board of Directors or the Chairman of the Board may,
from time to time, prescribe. In the absence of the Chairman of the Board, or
at the request of the Chairman of the Board, the Co-Chairman of the Board shall
preside at meetings of the shareholders and of the Board of Directors.
Section 3.5. President. Subject to the provisions of Section 3.3,
the President shall be the chief operating officer of the Corporation, shall
exercise the powers and perform the
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duties which ordinarily appertain to that office and shall manage and operate
the business and affairs of the Corporation in conformity with the policies
established by the Board of Directors and by the Chairman of the Board, or as
may be provided for in these By-Laws. In connection with the performance of his
duties, he shall keep the Chairman of the Board fully informed as to all phases
of the Corporation's activities. In the absence of the Chairman of the Board,
the President shall preside at meetings of the shareholders and of the Board of
Directors.
Section 3.6. Chief Financial Officer. The Chief Financial Officer
shall be the chief financial officer of the Corporation and shall perform all of
the duties customary to that office. He shall be responsible for all of the
Corporation's financial affairs, subject to the supervision and direction of the
Chairman of the Board and the President, and shall have and perform such further
powers and duties as the Board of Directors may, from time to time, prescribe
and as the Chairman of the Board or the President may, from time to time,
delegate to him.
Section 3.7. Vice Presidents. Each Vice President shall have such
powers and perform such duties as the Board of Directors may, from time to time,
prescribe and as the Chairman of the Board or the President may, from time to
time, delegate to him.
Section 3.8. Treasurer. The Treasurer shall perform all of the
duties customary to that office, shall be the chief accounting officer of the
Corporation and shall be responsible for maintaining the Corporation's
accounting books and records and preparing its financial statements, subject to
the supervision and direction of the Chief Financial Officer and other superior
officers within the Corporation. He shall also be responsible for causing the
Corporation to furnish financial statements to its shareholders pursuant to IC
23-1-53-1.
Section 3.9. Assistant Treasurer. In the absence or inability of the
Treasurer, the Assistant Treasurer, if any, shall perform only such duties as
are specifically assigned to him, in writing, by the Board of Directors, the
Chairman of the Board, the President, the Chief Financial Officer, or the
Treasurer.
Section 3.10. Secretary. The Secretary shall be the custodian of the
books, papers, and records of the Corporation and of its corporate seal, if any,
and shall be responsible for seeing that the Corporation maintains the records
required by IC 23-1-52-1 (other than accounting records) and that the
Corporation files with the Indiana Secretary of State the annual report required
by IC 23-1-53-3. The Secretary shall be responsible for preparing minutes of
the meetings of the shareholders and of the Board of Directors and for
authenticating records of the Corporation, and he shall perform all of the other
duties usual in the office of Secretary of a corporation.
Section 3.11. Assistant Secretary. In the absence or inability of
the Secretary, the Assistant Secretary, if any, shall perform only such duties
as are provided herein or specifically assigned to him, in writing, by the Board
of Directors, the Chairman of the Board, the President, or the Secretary.
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Section 3.12. Salary. The Board of Directors may, at its discretion,
from time to time, fix the salary of any officer by resolution included in the
minute book of the Corporation.
ARTICLE IV
Checks
------
All checks, drafts, or other orders for payment of money shall be
signed in the name of the Corporation by such officers or persons as shall be
designated from time to time by resolution adopted by the Board of Directors and
included in the minute book of the Corporation; and in the absence of such
designation, such checks, drafts, or other orders for payment shall be signed by
the Chairman, the President, the Vice President-Finance or the Treasurer.
ARTICLE V
Loans
-----
Such of the officers of the Corporation as shall be designated from
time to time by resolution adopted by the Board of Directors and included in the
minute book of the Corporation shall have the power, with such limitations
thereon as may be fixed by the Board of Directors, to borrow money in the
Corporation's behalf, to establish credit, to discount bills and papers, to
pledge collateral, and to execute such notes, bonds, debentures, or other
evidences of indebtedness, and such mortgages, trust indentures, and other
instruments in connection therewith, as may be authorized from time to time by
such Board of Directors.
ARTICLE VI
Execution of Documents
----------------------
The Chairman of the Board, the President or any other officer
authorized by the Board of Directors may, in the Corporation's name, sign all
deeds, leases, contracts, or similar documents unless otherwise directed by the
Board of Directors or otherwise provided herein or in the Corporation's Restated
Articles of Incorporation, or as otherwise required by law.
ARTICLE VII
Stock
-----
Section 7.1. Execution. Certificates for shares of the capital stock
of the Corporation shall be signed by the Chairman of the Board or the President
and by the Secretary and the seal of the Corporation (or a facsimile thereof),
if any, may be thereto affixed. Where
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any such certificate is also signed by a transfer agent or a registrar, or both,
the signatures of the officers of the Corporation may be facsimiles. The
Corporation may issue and deliver any such certificate notwithstanding that any
such officer who shall have signed, or whose facsimile signature shall have been
imprinted on, such certificate shall have ceased to be such officer.
Section 7.2. Contents. Each certificate issued after the adoption of
these By-Laws shall state on its face the name of the Corporation and that it is
organized under the laws of the State of Indiana, the name of the person to whom
it is issued, and the number and class of shares and the designation of the
series, if any, the certificate represents, and shall state conspicuously on its
front or back that the Corporation will furnish the shareholder, upon his
written request and without charge, a summary of the designations, relative
rights, preferences, and limitations applicable to each class and the variations
in rights, preferences, and limitations determined for each series (and the
authority of the Board of Directors to determine variations for future series).
Section 7.3. Transfers. Except as otherwise provided by law or by
resolution of the Board of Directors, transfers of shares of the capital stock
of the Corporation shall be made only on the books of the Corporation by the
holder thereof, in person or by duly authorized attorney, on payment of all
taxes thereon and surrender for cancellation of the certificate or certificates
for such shares (except as hereinafter provided in the case of loss,
destruction, or mutilation of certificates) properly endorsed by the holder
thereof or accompanied by the proper evidence of succession, assignment, or
authority to transfer, and delivered to the Secretary or an Assistant Secretary.
Section 7.4. Stock Transfer Records. There shall be entered upon the
stock records of the Corporation the number of each certificate issued, the name
and address of the registered holder of such certificate, the number, kind, and
class of shares represented by such certificate, the date of issue, whether the
shares are originally issued or transferred, the registered holder from whom
transferred, and such other information as is commonly required to be shown by
such records. The stock records of the Corporation shall be kept at its
principal office, unless the Corporation appoints a transfer agent or registrar,
in which case the Corporation shall keep at its principal office a complete and
accurate shareholders' list giving the names and addresses of all shareholders
and the number and class of shares held by each. If a transfer agent is
appointed by the Corporation, shareholders shall give written notice of any
changes in their addresses from time to time to the transfer agent.
Section 7.5. Transfer Agents and Registrars. The Board of Directors
may appoint one or more transfer agents and one or more registrars and may
require each stock certificate to bear the signature of either or both.
Section 7.6. Loss, Destruction, or Mutilation of Certificates. The
holder of any of the capital stock of the Corporation shall immediately notify
the Corporation of any loss, destruction, or mutilation of the certificate
therefor, and the Board of Directors may, in its discretion, cause to be issued
to him a new certificate or certificates of stock, upon the surrender of the
mutilated certificate, or, in the case of loss or destruction, upon satisfactory
proof of such loss or destruction. The Board of Directors may, in its
discretion, require the holder of the lost or destroyed certificate or his legal
representative to give the Corporation a bond in such sum and
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in such form, and with such surety or sureties as it may direct, to indemnify
the Corporation, its transfer agents, and registrars, if any, against any claim
that may be made against them or any of them with respect to the capital stock
represented by the certificate or certificates alleged to have been lost or
destroyed, but the Board of Directors may, in its discretion, refuse to issue a
new certificate or certificates, save upon the order of a court having
jurisdiction in such matters.
Section 7.7. Form of Certificates. The form of the certificates for
shares of the capital stock of the Corporation shall conform to the requirements
of Section 7.2 of these By-Laws and be in such printed form as shall from time
to time be approved by resolution of the Board of Directors.
ARTICLE VIII
Seal
----
The corporate seal of the Corporation shall, if the Corporation elects
to have one, be in the form of a disc, with the name of the Corporation and
"INDIANA" on the periphery thereof and the word "SEAL" in the center.
ARTICLE IX
Miscellaneous
-------------
Section 9.1. Indiana Business Corporation Law. The provisions of the
Indiana Business Corporation law, as amended, applicable to all matters relevant
to, but not specifically covered by, these By-Laws are hereby, by reference,
incorporated in and made a part of these By-Laws.
Section 9.2. Fiscal Year. The fiscal year of the Corporation shall
end on the last Sunday in October of each year.
Section 9.3. Election to be governed by Indiana Code (S) 23-1-43.
Effective upon the registration of the Corporation's common stock under Section
12 of the Securities Exchange Act of 1934, as amended, the Corporation shall be
governed by the provisions of IC 23-1-43 regarding business combinations.
Section 9.4. Control Share Acquisition Statute. The provisions of IC
23-1-42 shall apply to the acquisition of shares of the Corporation.
Section 9.5. Redemption of Shares Acquired in Control Share
Acquisitions. If and whenever the provisions of IC 23-1-42 apply to the
Corporation, any or all control shares acquired in a control share acquisition
shall be subject to redemption by the Corporation, if either:
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(a) no acquiring person statement has been filed with the Corporation
with respect to such control share acquisition in accordance with IC 23-1-
42-6, or
(b) the control shares are not accorded full voting rights by the
Corporation's shareholders as provided in IC 23-1-42-9.
A redemption pursuant to Section 9.5(a) may be made at any time during the
period ending sixty (60) days after the last acquisition of control shares by
the acquiring person. A redemption pursuant to Section 9.5(b) may be made at any
time during the period ending two (2) years after the shareholder vote with
respect to the granting of voting rights to such control shares. Any redemption
pursuant to this Section 9.5 shall be made at the fair value of the control
shares and pursuant to such procedures for such redemption as may be set forth
in these By-Laws or adopted by resolution of the Board of Directors.
As used in this Section 9.5, the terms "control shares," "control
share acquisition," "acquiring person statement," and "acquiring person" shall
have the meanings ascribed to such terms in IC 23-1-42.
Section 9.6. Amendments. These By-Laws may be rescinded, changed, or
amended, and provisions hereof may be waived, at any meeting of the Board of
Directors by the affirmative vote of a majority of the entire number of
Directors at the time, except as otherwise required by the Corporation's
Articles of Incorporation or by the Indiana Business Corporation Law.
Section 9.7. Definition of Articles of Incorporation. The term
"Articles of Incorporation" as used in these By-Laws means the Amended or
Restated Articles of Incorporation of the Corporation as from time to time are
in effect.
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<PAGE>
EXHIBIT 10-AO
RIGHTS AGREEMENT
Dated as of March 27, 1997
between
QUALITY DINING, INC.
and
KEYCORP SHAREHOLDER SERVICES, INC.
as Rights Agent
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
SECTION 1. Certain Definitions........................................... 1
SECTION 2. Appointment of Rights Agent................................... 8
SECTION 3. Issue of Rights and Rights Certificates....................... 8
SECTION 4. Form of Rights Certificates................................... 10
SECTION 5. Execution, Countersignature and Registration.................. 10
SECTION 6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates; Uncertificated Rights........................... 11
SECTION 7. Exercise of Rights; Expiration Date of Rights................. 12
SECTION 8. Cancellation and Destruction of Rights Certificates........... 14
SECTION 9. Reservation and Availability of Preferred Shares.............. 14
SECTION 10. Preferred Shares Record Date.................................. 16
SECTION 11. Adjustments in Rights After There Is an Acquiring Person;
Exchange of Rights for Shares; Business Combinations.......... 16
SECTION 12. Certain Adjustments........................................... 21
SECTION 13. Certificate of Adjustment..................................... 22
SECTION 14. Additional Covenants.......................................... 23
SECTION 15. Fractional Rights and Fractional Shares....................... 23
SECTION 16. Rights of Action.............................................. 24
SECTION 17. Transfer and Ownership of Rights and Rights Certificates...... 25
SECTION 18. Rights Certificate Holder Not Deemed a Shareholder............ 25
SECTION 19. Concerning the Rights Agent................................... 26
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
SECTION 20. Merger or Consolidation or Change of Rights Agent............. 26
SECTION 21. Duties of Rights Agent........................................ 27
SECTION 22. Change of Rights Agent........................................ 31
SECTION 23. Issuance of Additional Rights and Rights Certificates......... 32
SECTION 24. Redemption and Termination.................................... 32
SECTION 25. Notices....................................................... 33
SECTION 26. Supplements and Amendments.................................... 34
SECTION 27. Successors.................................................... 34
SECTION 28. Benefits of Rights Agreement; Determinations and Actions
by the Board of Directors, etc................................ 34
SECTION 29. Severability.................................................. 35
SECTION 30. Governing Law................................................. 35
SECTION 31. Counterparts; Effectiveness................................... 36
SECTION 32. Descriptive Headings.......................................... 36
</TABLE>
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RIGHTS AGREEMENT dated as of March 27, 1997, between QUALITY DINING,
INC., an Indiana corporation (the "Company"), and KeyCorp Shareholder Services,
Inc., as Rights Agent (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one Right (as hereinafter defined) for each share of Common Stock,
without par value, of the Company (the "Common Stock") outstanding at the Close
of Business on April 11, 1997 (the "Record Date") and has authorized the
issuance of one Right (as such number may hereafter be adjusted pursuant to the
provisions of this Rights Agreement) with respect to each share of Common Stock
that shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date or the Expiration Date (as such terms are
hereinafter defined); provided, however, that Rights may be issued with respect
to shares of Common Stock that shall become outstanding after the Distribution
Date and prior to the earlier of the Redemption Date or the Expiration Date in
accordance with the provisions of Section 23. Each Right shall initially
represent the right to purchase one one-hundredth (1/100th) of a share of Series
B Participating Cumulative Preferred Stock, without par value, of the Company
(the "Preferred Shares"), having the powers, rights and preferences set forth in
the Certificate of Designation attached as Exhibit A.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. Certain Definitions. For purposes of this Rights
Agreement, the following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who or which, alone or
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of more than 15% of the Common Shares then outstanding but
shall not include (a) the Company, any subsidiary of the Company, any employee
benefit or compensation plan of the Company or of any of its Subsidiaries, or
any Person holding Common Shares for or pursuant to the terms of any such
employee benefit or compensation plan, (b) any such Person who has become and is
such a Beneficial Owner solely as a result of a transaction or series of
transactions approved prior to such transaction or series of transactions by the
Board of Directors of the Company, (c) any Person who or which, alone or
together with all Affiliates and Associates of such Person are the Beneficial
Owners on the date of this Rights Agreement of more than 15% of the outstanding
shares of Common Stock, but only with respect to the shares of Common Stock so
owned on the date of this Rights Agreement and any shares of Common Stock
acquired in the future directly from the Company or pursuant to any employee
benefit or compensation plan of the Company, it being understood that the
acquisition of Beneficial Ownership of any other additional shares of Common
Stock without the prior approval of the Board of Directors of the Company would
make such Person an Acquiring Person, or (d) any such Person who has become and
is such a Beneficial Owner solely because (i) of a change in the aggregate
number of Common Shares outstanding since the last date on which such Person
acquired Beneficial Ownership of any Common Shares or (ii) it acquired such
Beneficial Ownership in the good faith belief that such acquisition would not
(x) cause such Beneficial Ownership to exceed 15% of the Common Shares then
outstanding and such Person relied in good faith in computing the percentage of
its Beneficial Ownership on
<PAGE>
publicly filed reports or documents of the Company which are inaccurate or out-
of-date or (y) otherwise cause a Distribution Date or the adjustment provided
for in Section 11(a) to occur. Notwithstanding clause (d)(ii) of the prior
sentence, if any Person that is not an Acquiring Person due to such clause
(d)(ii) does not reduce its percentage of Beneficial Ownership of Common Shares
to 15% or less by the Close of Business on the fifth Business Day after notice
from the Company (the date of notice being the first day) that such Person's
Beneficial Ownership of Common Shares so exceeds 15%, such Person shall, at the
end of such five Business Day period, become an Acquiring Person (and such
clause (d)(ii) shall no longer apply to such Person). For purposes of this
definition, the determination whether any Person acted in "good faith" shall be
conclusively determined by the Board of Directors of the Company, acting by a
vote of those directors of the Company whose approval would be required to
redeem the Rights under Section 24. Notwithstanding the foregoing, nothing
contained in this definition shall cause any Current 10% Owner to become an
Acquiring Person as a result of such Current 10% Owner becoming a Beneficial
Owner of additional Common Shares by gift or the laws of descent and
distribution or otherwise by operation of law.
"Affiliate" and "Associate", when used with reference to any Person,
shall have the respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in effect on the date
of this Rights Agreement.
A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own", and shall be deemed to have "Beneficial Ownership"
of, any securities:
(i) which such Person or any of such Person's Affiliates or
Associates is deemed to "beneficially own" within the meaning of Rule
13d-3 of the General Rules and Regulations under the Exchange Act, as
in effect on the date of this Rights Agreement;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (written or oral), 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 of, or to
beneficially own, or to have Beneficial Ownership of, securities
tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange
thereunder or cease to be subject to withdrawal by the tendering
security
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<PAGE>
holder, or (B) the right to vote pursuant to any agreement,
arrangement or understanding (written or oral); provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to
beneficially own, any security if (1) the agreement, arrangement or
understanding (written or oral) to vote such security arises solely
from a revocable proxy or consent given to such Person in response to
a public proxy or consent solicitation made generally to all holders
of Common Stock pursuant to, and in accordance with, the applicable
rules and regulations under the Exchange Act and (2) the beneficial
ownership of such security is not also then reportable on Schedule 13D
under the Exchange Act (or any comparable or successor report);
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (written or oral) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in clause
(ii)(B) of this definition) or disposing of any securities of the
Company; or
(iv) which would be beneficially owned by such Person but for the
application of the provisions of the Indiana Business Corporation Law
pertaining to Control Share Acquisitions or any comparable or
successor provisions.
Notwithstanding the foregoing, nothing contained in this definition shall cause
(x) any Current 10% Owner to be a Beneficial Owner of, or to beneficially own,
any additional Common Shares because of any agreement, arrangement or
understanding with any other Person regarding the voting of such additional
Common Shares, unless such Current 10% Owner has a contractual right to vote
such shares or has been granted a proxy (whether or not revocable) to vote such
shares (except pursuant to a revocable proxy as described in clause (ii)B
above), (y) a Person ordinarily engaged in business as an underwriter of
securities to be the Beneficial Owner of, or to beneficially own, any securities
acquired in a bona fide firm commitment underwriting pursuant to an underwriting
agreement with the Company or (z) any of the Company's directors or officers to
be deemed to be the Beneficial Owner of, or to beneficially own, any Common
Shares of the Company owned by any other director or officer of the Company
solely by virtue of such persons acting in their capacities as such, including,
without limitation, in connection with any formulation and publication of the
Board of Directors' recommendation of a position, and any actions taken in
furtherance thereof, with respect to any acquisition proposal relating to the
Company, any tender or exchange offer for the Common Shares of the Company, or
any solicitation of proxies with respect to the Common Shares of the Company.
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"Book Value", when used with reference to Common Shares issued by any
Person, shall mean the amount of equity of such Person applicable to each Common
Share, determined (i) in accordance with generally accepted accounting
principles in effect on the date as of which such Book Value is to be
determined, (ii) using all the consolidated assets and all the consolidated
liabilities of such Person on the date as of which such Book Value is to be
determined, except that no value shall be included in such assets for goodwill
arising from consummation of a business combination, and (iii) after giving
effect to (A) the exercise of all rights, options and warrants to purchase such
Common Shares (other than the Rights), and the conversion of all securities
convertible into such Common Shares, at an exercise or conversion price, per
Common Share, which is less than such Book Value before giving effect to such
exercise or conversion (whether or not exercisability or convertibility is
conditioned upon occurrence of a future event), (B) all dividends and other
distributions on the capital stock of such Person declared prior to the date as
of which such Book Value is to be determined and to be paid or made after such
date, and (C) any other agreement, arrangement or understanding (written or
oral), or transaction or other action contemplated prior to the date as of which
such Book Value is to be determined which would have the effect of thereafter
reducing such Book Value.
"Business Combination" shall have the meaning set forth in Section
11(c)(I).
"Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day in which banking institutions in the Borough of
Manhattan, The City of New York, are authorized or obligated by law or executive
order to close.
"Certificate of Designation" shall mean the Articles of Amendment
setting forth the designation, voting powers, preferences, rights,
qualifications, limitations and restrictions of the Series B Participating
Cumulative Preferred Stock of the Company, a copy of which is attached as
Exhibit A.
"Close of Business" on any given date shall mean 5:00 p.m., New York
City time, on such date; provided, however, that, if such date is not a Business
Day, "Close of Business" shall mean 5:00 p.m., New York City time, on the next
succeeding Business Day.
"Common Shares", when used with reference to the Company prior to a
Business Combination, shall mean the shares of Common Stock of the Company or
any other shares of capital stock of the Company into which the Common Stock
shall be reclassified or changed. "Common Shares", when used with reference to
any Person (other than the Company prior to a Business Combination), shall mean
shares of capital stock of such Person (if such Person is a corporation) of any
class or series, or units of equity interests in such Person (if such Person is
not a corporation) of any class or series, the terms of which do not limit (as a
maximum amount and not merely in proportional terms) the amount of dividends or
income payable or distributable on such class or series or the amount of assets
distributable on such class or series upon any voluntary or involuntary
liquidation, dissolution or winding
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<PAGE>
up of such Person and do not provide that such class or series is subject to
redemption at the option of such Person, or any shares of capital stock or units
of equity interests into which the foregoing shall be reclassified or changed;
provided, however, that, if at any time there shall be more than one such class
or series of capital stock or equity interests of such Person, "Common Shares"
of such Person shall include all such classes and series substantially in the
proportion of the total number of shares or other units of each such class or
series outstanding at such time unless any such class or series is identical to
another such class except for voting power, in which case "Common Shares" shall
include such higher voting class in place of such lower voting class.
"Common Stock" shall have the meaning set forth in the introductory
paragraph of this Rights Agreement.
"Company" shall have the meaning set forth in the heading of this
Rights Agreement; provided, however, that if there is a Business Combination,
"Company" shall have the meaning set forth in Section 11(c)(III).
The term "control" with respect to any Person shall mean the power to
direct the management and policies of such Person, directly or indirectly, by or
through stock ownership, agency or otherwise, or pursuant to or in connection
with an agreement, arrangement or understanding (written or oral) with one or
more other Persons by or through stock ownership, agency or otherwise; and the
terms "controlling" and "controlled" shall have meanings correlative to the
foregoing.
"Current 10% Owner" shall mean any Person who together with any
Affiliates and Associates of such Person and any other Person with whom such
Person has any agreement, arrangement or understanding (written or oral) for the
purpose of acquiring, holding, voting or disposing of any securities of the
Company is the Beneficial Owner of more than ten percent (10%) of the
outstanding shares of Common Stock of the Company on the date of this Rights
Agreement.
"Distribution Date" shall have the meaning set forth in Section 3(b).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as in
effect on the date in question, unless otherwise specifically provided.
"Exchange Consideration" shall have the meaning set forth in Section
11(b)(I).
"Expiration Date" shall have the meaning set forth in Section 7(a).
"Major Part", when used with reference to the assets of the Company
and its Subsidiaries as of any date, shall mean assets (i) having a fair market
value aggregating 50% or more of the total fair market value of all the assets
of the Company and its Subsidiaries
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(taken as a whole) as of the date in question, (ii) accounting for 50% or more
of the total value (net of depreciation and amortization) of all the assets of
the Company and its Subsidiaries (taken as a whole) as would be shown on a
consolidated or combined balance sheet of the Company and its Subsidiaries as of
the date in question, prepared in accordance with generally accepted accounting
principles then in effect, or (iii) accounting for 50% or more of the total
amount of earnings before interest, taxes, depreciation and amortization or of
the revenues of the Company and its Subsidiaries (taken as a whole) as would be
shown on, or derived from, a consolidated or combined statement of income or
operations of the Company and its Subsidiaries for the period of 12 months
ending on the last day of the Company's monthly accounting period next preceding
the date in question, prepared in accordance with generally accepted accounting
principles then in effect.
"Market Value", when used with reference to Common Shares on any date,
shall be deemed to be the average of the daily closing prices, per share, of
such Common Shares for the period which is the shorter of (1) 30 consecutive
Trading Days immediately prior to the date in question or (2) the number of
consecutive Trading Days beginning on the Trading Day immediately after the date
of the first public announcement of the event requiring a determination of the
Market Value and ending on the Trading Day immediately prior to the record date
of such event; provided, however, that, in the event that the Market Value of
such Common Shares is to be determined in whole or in part during a period
following the announcement by the issuer of such Common Shares of any action of
the type described in Section 12(a) that would require an adjustment thereunder,
then, and in each such case, the Market Value of such Common Shares shall be
appropriately adjusted to reflect the effect of such action on the market price
of such Common Shares. The closing price for each Trading Day shall be the
closing price quoted on the principal United States securities exchange
registered under the Exchange Act (or any recognized foreign stock exchange) on
which such securities are listed, or, if such securities are not listed on any
such exchange, the closing price quoted on The Nasdaq Stock Market or, if such
securities are not so quoted, the average of the closing bid and asked
quotations with respect to a share of such securities on any National
Association of Securities Dealers, Inc. quotations system, or if no such
quotations are available, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in such securities
selected by the Board of Directors of the Company. If on any such Trading Day no
market maker is making a market in such securities, the closing price of such
securities on such Trading Day shall be deemed to be the fair value of such
securities as determined in good faith by the Board of Directors of the Company
acting by a vote of those directors whose approval would be required to redeem
the Rights under Section 24 (whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights Agent,
the holders of Rights and all other Persons); provided, however, that for the
purpose of determining the closing price of the Preferred Shares for any Trading
Day on which there is no such market maker for the Preferred Shares the closing
price on such Trading Day shall be deemed to be the Formula Number (as defined
in the Certificate of Designation) times the closing price of the Common Shares
of the Company on such Trading Day.
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"Person" shall mean an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity.
"Preferred Shares" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement. Any reference in this Rights
Agreement to Preferred Shares shall be deemed to include any authorized fraction
of a Preferred Share, unless the context otherwise requires.
"Principal Party" shall mean the Surviving Person in a Business
Combination; provided, however, that, if such Surviving Person is a direct or
indirect Subsidiary of any other Person, "Principal Party" shall mean the Person
which is the ultimate parent of such Surviving Person and which is not itself a
Subsidiary of another Person. In the event ultimate control of such Surviving
Person is shared by two or more Persons, "Principal Party" shall mean that
Person that is immediately controlled by such two or more Persons.
"Purchase Price" with respect to each Right shall mean $75.00, as such
amount may from time to time be adjusted as provided herein, and shall be
payable in lawful money of the United States of America. All references herein
to the Purchase Price shall mean the Purchase Price as in effect at the time in
question.
"Record Date" shall have the meaning set forth in the introductory
paragraph of this Rights Agreement.
"Redemption Date" shall have the meaning set forth in Section 24(a).
"Redemption Price" with respect to each Right shall mean $.01, as such
amount may from time to time be adjusted in accordance with Section 12. All
references herein to the Redemption Price shall mean the Redemption Price as in
effect at the time in question.
"Registered Common Shares" shall mean Common Shares which are, as of
the date of consummation of a Business Combination, and have continuously been
for the 12 months immediately preceding such date, registered under Section 12
of the Exchange Act.
"Rights" shall mean the rights to purchase Preferred Shares (or other
securities) as provided in this Rights Agreement.
"Rights Certificate", shall mean a certificate evidencing Rights in
substantially the form attached as Exhibit B.
"Securities Act" shall mean the Securities Act of 1933, as in effect
on the date in question, unless otherwise specifically provided.
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"Subsidiary" shall mean a Person, at least a majority of the total
outstanding voting power (being the power under ordinary circumstances (and not
merely upon the happening of a contingency) to vote in the election of directors
of such Person (if such Person is a corporation) or to participate in the
management and control of such Person (if such Person is not a corporation)) of
which is owned, directly or indirectly, by another Person or by one or more
other Subsidiaries of such other Person or by such other Person and one or more
other Subsidiaries of such other Person.
"Surviving Person" shall mean (1) the Person which is the continuing
or surviving Person in a consolidation or merger specified in Section
11(c)(I)(i) or 11(c)(I)(ii) or (2) the Person to which the Major Part of the
assets of the Company and its Subsidiaries is sold, leased, exchanged or
otherwise transferred or disposed of in a transaction specified in Section
11(c)(I)(iii); provided, however, that, if the Major Part of the assets of the
Company and its Subsidiaries is sold, leased, exchanged or otherwise transferred
or disposed of in one or more related transactions specified in Section
11(c)(I)(iii) to more than one Person, the "Surviving Person" in such case shall
mean the Person that acquired assets of the Company and/or its Subsidiaries with
the greatest fair market value in such transaction or transactions.
"Trading Day" shall mean a day on which the principal national
securities exchange (or principal recognized foreign stock exchange, as the case
may be) on which any securities or Rights, as the case may be, are listed or
admitted to trading is open for the transaction of business or, if the
securities or Rights in question are not listed or admitted to trading on any
national securities exchange (or recognized foreign stock exchange, as the case
may be), a Business Day.
SECTION 2. Appointment of Rights Agent. 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 may from time to time appoint one or more co-Rights Agents as it may
deem necessary or desirable upon ten (10) days' prior written notice to the
Rights Agent (the term "Rights Agent" being used herein to refer, collectively,
to the Rights Agent together with any such co-Rights Agents). In the event the
Company appoints one or more co-Rights Agents, the respective duties of the
Rights Agent and any co-Rights Agents shall be as the Company shall determine.
The Rights Agent shall have no duty to supervise, and shall in no event be
liable for, the acts or omissions of any such co-Rights Agent.
SECTION 3. Issue of Rights and Rights Certificates.
(a) One Right shall be associated with each Common Share outstanding
on the Record Date, each additional Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date or the Expiration Date and each additional Common
Share with which Rights are issued after the Distribution
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Date but prior to the earlier of the Redemption Date or the Expiration Date
as provided in Section 23; provided, however, that, if the number of
outstanding Rights are combined into a smaller number of outstanding Rights
pursuant to Section 12(a), the appropriate fractional Right determined
pursuant to such Section shall thereafter be associated with each such
Common Share.
(b) Until the earlier of (i) such time as the Company learns that a
Person has become an Acquiring Person or (ii) the Close of Business on such
date, if any, as may be designated by the Board of Directors of the Company
following the commencement of, or first public disclosure of an intent to
commence, a tender or exchange offer by any Person (other than the Company,
any Subsidiary of the Company, any employee benefit or compensation plan of
the Company or of any of its Subsidiaries, or any Person holding Common
Shares for or pursuant to the terms of any such employee benefit or
compensation plan) for outstanding Common Shares, if upon consummation of
such tender or exchange offer such Person could be the Beneficial owner of
more than 15% of the outstanding Common Shares (the Close of Business on
the earlier of such dates being the "Distribution Date"), (x) the Rights
will be evidenced by the certificates for Common Shares registered in the
names of the holders thereof and not by separate Rights Certificates and
(y) the Rights, including the right to receive Rights Certificates, will be
transferable only in connection with the transfer of Common Shares. As soon
as practicable after the Distribution Date, the Rights Agent will send, by
first-class, postage-prepaid mail, to each record holder of Common Shares
as of the Distribution Date, at the address of such holder shown on the
records of the Company, a Rights Certificate evidencing one whole Right for
each Common Share (or for the number of Common Shares with which one whole
Right is then associated if the number of Rights per Common Share held by
such record holder has been adjusted in accordance with the proviso in
Section 3(a)). If the number of Rights associated with each Common Share
has been adjusted in accordance with the proviso in Section 3(a), at the
time of distribution of the Rights Certificates the Company may make any
necessary and appropriate rounding adjustments so that Rights Certificates
representing only whole numbers of Rights are distributed and cash is paid
in lieu of any fractional Right in accordance with Section 15(a). As of and
after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(c) With respect to any certificate for Common Shares, until the
earliest of the Distribution Date, the Redemption Date or the Expiration
Date, the Rights associated with the Common Shares represented by any such
certificate shall be evidenced by such certificate alone, the registered
holders of the Common Shares shall also be the registered holders of the
associated Rights
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and the surrender for transfer of any such certificate shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby.
(d) Certificates issued for Common Shares after the Record Date
(including, without limitation, upon transfer or exchange of outstanding
Common Shares), but prior to the earliest of the Distribution Date, the
Redemption Date or the Expiration Date, shall have printed on, written on
or otherwise affixed to them the following legend:
"This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement dated as of March 27, 1997 as it
may be amended from time to time (the "Rights Agreement"), between Quality
Dining, Inc. (the "Company") and KeyCorp Shareholder Services, Inc., as
Rights Agent (the "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 will be evidenced by
separate certificates and will no longer be evidenced by this certificate.
The Company will mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a written request therefor
to the Secretary of the Company. Rights beneficially owned by Acquiring
Persons or their Affiliates or Associates (as such terms are defined in the
Rights Agreement) and by any subsequent holder of such Rights are null and
void and nontransferable."
Notwithstanding this paragraph (d), the omission of a legend shall not
affect the enforceability of any part of this Rights Agreement or the rights of
any holder of Rights.
SECTION 4. Form of Rights Certificates. The Rights Certificates (and
the form of election to purchase and form of assignment to be printed on the
reverse side thereof) shall be in substantially the form set forth as Exhibit B
and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Rights Agreement, or as
may be required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock exchange on
which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Sections 7, 11 and 23, the Rights Certificates,
whenever issued, shall be dated as of the Distribution Date, and on their face
shall entitle the holders thereof to purchase such number of Preferred Shares as
shall be set forth therein for the Purchase Price set forth therein, subject to
adjustment from time to time as herein provided.
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<PAGE>
SECTION 5. Execution, Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company
by the Chairman of the Board, the Chief Executive Officer, the President,
the Chief Operating Officer, the Treasurer or a Vice President (whether
preceded by any additional title) of the Company, either manually or by
facsimile signature, and have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary, an Assistant
Secretary or a Vice President (whether preceded by any additional title,
provided that such Vice President shall not have also executed the Rights
Certificates) of the Company, either manually or by facsimile signature.
The Rights Certificates shall be manually countersigned by the Rights Agent
and shall not be valid or obligatory for any purpose unless so
countersigned. In case any officer of the Company who shall have signed any
of the Rights Certificates shall cease to be such an officer of the Company
before countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates may nevertheless be countersigned by
the Rights Agent and issued and delivered by the Company with the same
force and effect as though the person who signed such Rights Certificates
had not ceased to be such an officer of the Company; and any Rights
Certificate may be signed on behalf of the Company by any person who, at
the actual date of execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the
date of execution of this Rights Agreement any such person was not such an
officer of the Company.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its designated office in Cleveland, Ohio, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the
Rights Certificates, the number of Rights evidenced by each of the Rights
Certificates, the certificate number of each of the Rights Certificates and
the date of each of the Rights Certificates.
SECTION 6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates;
Uncertificated Rights.
(a) Subject to the provisions of Sections 7(e) and 15, at any time
after the Distribution Date, and at or prior to the Close of Business on
the earlier of the Redemption Date or the Expiration Date, any Rights
Certificate or Rights Certificates may be transferred, split-up, combined
or exchanged for another Rights Certificate or Rights Certificates
representing, in the aggregate, the same number of Rights as the Rights
Certificate or Rights Certificates surrendered then represented. Any
registered holder desiring to transfer, split-
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up, combine or exchange any Rights Certificate shall make such request in
writing delivered to the Rights Agent and shall surrender the Rights
Certificate or Rights Certificates to be transferred, split-up, combined or
exchanged at the designated office of the Rights Agent; provided, however,
that neither the Rights Agent nor the Company shall be obligated to take
any action whatsoever with respect to the transfer of any Rights
Certificate surrendered for transfer until the registered holder shall have
completed and signed the certification 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. Thereupon the Rights Agent shall, subject to Sections
7(e) and 15, countersign and deliver to the Person entitled thereto a
Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment by the holders of Rights of a
sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer, split-up, combination or exchange of
Rights Certificates.
(b) Upon receipt by the Company or the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a valid Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and,
at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if mutilated, the
Company will make a new Rights Certificate of like tenor and deliver such
new Rights Certificate to the Rights Agent for delivery to the registered
owner in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
(c) Notwithstanding any other provision hereof, the Company and the
Rights Agent may amend this Rights Agreement to provide for uncertificated
Rights in addition to or in place of Rights evidenced by Rights
Certificates.
SECTION 7. Exercise of Rights; Expiration Date of Rights.
(a) Subject to Section 7(e) and except as otherwise provided herein
(including Section 11), each Right shall entitle the registered holder
thereof, upon exercise thereof as provided herein, to purchase for the
Purchase Price, at any time after the Distribution Date and at or prior to
the earlier of (i) the Close of Business on the 10th anniversary of the
date of this Rights Agreement (the Close of Business on such date being the
"Expiration Date"), or (ii) the
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Redemption Date, one one-hundredth (1/100th) of a Preferred Share, subject
to adjustment from time to time as provided in Sections 11 and 12.
(b) The registered holder of any Rights Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or
in part at any time after the Distribution Date, upon surrender of the
Rights Certificate, with the form of election to purchase on the reverse
side thereof duly executed, to the Rights Agent at the designated office of
the Rights Agent in Cleveland, Ohio, together with payment of the Purchase
Price for each one one-hundredth (1/100th) of a Preferred Share as to which
the Rights are exercised, at or prior to the earlier of (i) the Expiration
Date or (ii) the Redemption Date.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the Preferred Shares to be purchased
together with an amount equal to any applicable transfer tax, in lawful
money of the United States of America, in cash or by certified check or
money order payable to the order of the Company, the Rights Agent shall
thereupon (i) either (A) promptly requisition from any transfer agent of
the Preferred Shares (or make available, if the Rights Agent is the
transfer agent) certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests or (B) if the Company shall have elected
to deposit the Preferred Shares with a depositary agent under a depositary
arrangement, promptly requisition from the depositary agent depositary
receipts representing the number of one one-hundredth (1/100th) of a
Preferred Share to be purchased (in which case certificates for the
Preferred Shares to be represented by such receipts shall be deposited by
the transfer agent with the depositary agent) and the Company will direct
the depositary agent to comply with all such requests, (ii) when
appropriate, promptly requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with Section
15, (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate, after
receipt promptly deliver such cash to or upon the order of the registered
holder of such Rights Certificate.
(d) In case the registered holder of any Rights Certificate shall
exercise fewer than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such
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Rights Certificate or to his duly authorized assigns, subject to the
provisions of Section 15.
(e) Notwithstanding anything in this Rights Agreement to the contrary,
any Rights that are at any time beneficially owned by an Acquiring Person
or any Affiliate or Associate of an Acquiring Person shall be null and void
and nontransferable, and any holder of any such Right (including any
purported transferee or subsequent holder) shall not have any right to
exercise or transfer any such Right.
(f) Notwithstanding anything in this Rights Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake
any action with respect to a registered holder of any Rights Certificates
upon the occurrence of any purported exercise as set forth in this Section
7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth on the
reverse side of the Rights Certificate surrendered for such exercise and
(ii) provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request.
(g) The Company may temporarily suspend, for a period of time not to
exceed 90 calendar days after the Distribution Date, the exercisability of
the Rights in order to prepare and file a registration statement under the
Securities Act, on appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights and permit such registration
statement to become effective; provided, however, that no such suspension
shall remain effective after, and the Rights shall without any further
action by the Company or any other Person become exercisable immediately
upon, the effectiveness of such registration statement. Upon any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended and shall issue
a further public announcement at such time as the suspension is no longer
in effect. Notwithstanding any provision herein to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification
under the blue sky or securities laws of such jurisdiction shall not have
been obtained or the exercise of the Rights shall not be permitted under
applicable law.
SECTION 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered or presented for the purpose of exercise,
transfer, split-up, combination or exchange shall, and any Rights Certificate
representing Rights that have become null and void and nontransferable pursuant
to Section 7(e) surrendered or presented for any purpose shall, if surrendered
or presented to the Company or to any of its agents, be
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<PAGE>
delivered to the Rights Agent for cancellation or in canceled form, or, if
surrendered or presented to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by this Rights Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any Rights Certificate purchased or acquired by the Company. The Rights
Agent shall deliver all canceled Rights Certificates to the Company.
SECTION 9. Reservation and Availability of Preferred Shares.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued Preferred Shares or
any authorized and issued Preferred Shares held in its treasury, free from
preemptive rights or any right of first refusal, a number of Preferred
Shares sufficient to permit the exercise in full of all outstanding Rights.
(b) In the event that there shall not be sufficient Preferred Shares
issued but not outstanding or authorized but unissued to permit the
exercise or exchange of Rights in accordance with Section 11, the Company
covenants and agrees that it will take all such action as may be necessary
to authorize additional Preferred Shares for issuance upon the exercise or
exchange of Rights pursuant to Section 11; provided, however, that if the
Company is unable to cause the authorization of additional Preferred
Shares, then the Company shall, or in lieu of seeking any such
authorization, the Company may, to the extent necessary and permitted by
applicable law and any agreements or instruments in effect prior to the
Distribution Date to which it is a party, (A) upon surrender of a Right,
pay cash equal to the Purchase Price in lieu of issuing Preferred Shares
and requiring payment therefor, (B) upon due exercise of a Right and
payment of the Purchase Price for each Preferred Share as to which such
Right is exercised, issue equity securities having a value equal to the
value of the Preferred Shares which otherwise would have been issuable
pursuant to Section 11, which value shall be determined by a nationally
recognized investment banking firm selected by the Board of Directors of
the Company or (C) upon due exercise of a Right and payment of the Purchase
Price for each Preferred Share as to which such Right is exercised,
distribute a combination of Preferred Shares, cash and/or other equity
and/or debt securities having an aggregate value equal to the value of the
Preferred Shares which otherwise would have been issuable pursuant to
Section 11, which value shall be determined by a nationally recognized
investment banking firm selected by the Board of Directors of the Company.
To the extent that any legal or contractual restrictions (pursuant to
agreements or instruments in effect prior to the Distribution Date to which
it is party) prevent the Company from paying the full amount payable in
accordance with the foregoing sentence, the Company shall pay to holders of
the Rights as to which such payments are
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being made all amounts which are not then restricted on a pro rata basis as
such payments become permissible under such legal or contractual
restrictions until such payments have been paid in full.
(c) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all Preferred Shares delivered upon
exercise or exchange of Rights shall, at the time of delivery of the
certificates for such Preferred Shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) So long as the Preferred Shares issuable upon the exercise or
exchange of Rights are to be listed on any national securities exchange,
the Company covenants and agrees to use its best efforts to cause, from and
after such time as the Rights become exercisable or exchangeable, all
Preferred Shares reserved for such issuance to be listed on such securities
exchange upon official notice of issuance upon such exercise or exchange.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all Federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of Rights
Certificates or of any Preferred Shares or Common Shares or other
securities upon the exercise or exchange of the Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Rights Certificates to a Person
other than, or in respect of the issuance or delivery of certificates for
the Preferred Shares or Common Shares or other securities, as the case may
be, in a name other than that of, the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise or exchange or to
issue or deliver any certificates for Preferred Shares or Common Shares or
other securities, as the case may be, upon the exercise or exchange of any
Rights until any such tax shall have been paid (any such tax being payable
by the holder of such Rights Certificate at the time of surrender) or until
it has been established to the Company's satisfaction that no such tax is
due.
SECTION 10. Preferred Shares Record Date. Each Person in whose name
any certificate for Preferred Shares or Common Shares or other securities is
issued upon the exercise or exchange of Rights shall for all purposes be deemed
to have become the holder of record of the Preferred Shares or Common Shares or
other securities, as the case may be, 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 Purchase Price
(and any applicable transfer taxes) was made; provided, however, that, if the
date of such surrender and payment is a date upon which the transfer books of
the Company for the Preferred Shares or Common Shares or other securities, as
the case may be, are closed, such
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Person shall be deemed to have become the record holder of such Preferred Shares
or Common Shares or other securities, as the case may be, on, and such
certificate shall be dated, the next succeeding Business Day on which the
transfer books of the Company for the Preferred Shares or Common Shares or other
securities, as the case may be, are open.
SECTION 11. Adjustments in Rights After There Is an Acquiring Person;
Exchange of Rights for Shares; Business Combinations.
(a) Upon a Person becoming an Acquiring Person, proper provision shall
be made so that each holder of a Right, except as provided in Section 7(e),
shall thereafter have a right to receive, upon exercise thereof for the
Purchase Price in accordance with the terms of this Rights Agreement, such
number of one one-hundredth (1/100th) of a Preferred Share as shall equal
the result obtained by multiplying the Purchase Price by a fraction, the
numerator of which is the number of one one-hundredth (1/100th) of a
Preferred Share for which a Right is then exercisable and the denominator
of which is 50% of the Market Value of the Common Shares on the date on
which a Person becomes an Acquiring Person. As soon as practicable after a
Person becomes an Acquiring Person (provided the Company shall not have
elected to make the exchange permitted by Section 11(b)(I) for all
outstanding Rights), the Company covenants and agrees to use its best
efforts to:
(I) prepare and file a registration statement under the Securities
Act, on an appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights;
(II) cause such registration statement to become effective as soon
as practicable after such filing;
(III) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the Expiration Date; and
(IV) qualify or register the Preferred Shares purchasable upon
exercise of the Rights under the blue sky or securities laws of such
jurisdictions as may be necessary or appropriate.
(b)(I) The Board of Directors of the Company may, at its option, at
any time after a Person becomes an Acquiring Person, mandatorily exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that shall have become null and void and nontransferable
pursuant to the provisions of Section 7(e)) for consideration per Right
consisting of either one-half of the securities that would be issuable at
such time upon the exercise of
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one Right in accordance with Section 11(a) or, if applicable, Section
9(b)(B) or (C) or, if applicable the cash consideration specified in
Section 9(b)(A) (the consideration issuable per Right pursuant to this
Section 11(b)(I) being the "Exchange Consideration"). The Board of
Directors of the Company may, at its option, issue, in substitution for
Preferred Shares, Common Shares in an amount per Preferred Share equal to
the Formula Number (as defined in the Certificate of Designation) if there
are sufficient Common Shares issued but not outstanding or authorized but
unissued. If the Board of Directors of the Company elects to exchange all
the Rights for Exchange Consideration pursuant to this Section 11(b)(I)
prior to the physical distribution of the Rights Certificates, the
Corporation may distribute the Exchange Consideration in lieu of
distributing Rights Certificates, in which case for purposes of this Rights
Agreement holders of Rights shall be deemed to have simultaneously received
and surrendered for exchange Rights Certificates on the date of such
distribution.
(II) Any action of the Board of Directors of the Company ordering
the exchange of any Rights pursuant to Section 11(b)(I) shall be
irrevocable and, immediately upon the taking of such action and without any
further action and without any notice, the right to exercise any such Right
pursuant to Section 11(a) shall terminate and the only right thereafter of
a holder of such Right shall be to receive the Exchange Consideration in
exchange for each such Right held by such holder or, if the Exchange
Consideration shall not have been paid or issued, to exercise any such
Right pursuant to Section 11(c)(I). The Company shall promptly give public
notice of any such exchange; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such
exchange. The Company promptly shall mail a notice of any such exchange to
all holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the Rights for the Exchange Consideration will be
effected and, in the event of any partial exchange, the number of Rights
which will be exchanged. Any partial exchange shall be effected pro rata
based on the number of Rights (other than Rights which shall have become
null and void and nontransferable pursuant to the provisions of Section
7(e)) held by each holder of Rights.
(c)(I) In the event that, following a Distribution Date, directly or
indirectly, any transactions specified in the following clause (i), (ii) or
(iii) of this Section 11(c) (each such transaction being a "Business
Combination") shall be consummated:
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(i) the Company shall consolidate with, or merge with and into,
any Acquiring Person or any Affiliate or Associate of an Acquiring
Person;
(ii) any Acquiring Person or any Affiliate or Associate of an
Acquiring Person shall merge with and into the Company and, in
connection with such merger, all or part of the Common Shares shall be
changed into or exchanged for capital stock or other securities of the
Company or of any Acquiring Person or Affiliate or Associate of an
Acquiring Person or cash or any other property; or
(iii) the Company shall sell, lease, exchange or otherwise
transfer or dispose of (or one or more of its Subsidiaries shall sell,
lease, exchange or otherwise transfer or dispose of), in one or more
transactions, the Major Part of the assets of the Company and its
Subsidiaries (taken as a whole) to any Acquiring Person or any
Affiliate or Associate of an Acquiring Person, then, in each such
case, proper provision shall be made so that each holder of a Right,
except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof for the Purchase Price in
accordance with the terms of this Rights Agreement, the securities
specified below (or, at such holder's option, the securities specified
in Section 11(a)):
(A) If the Principal Party in such Business Combination has
Registered Common Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof for the
Purchase Price in accordance with the terms of this Rights Agreement,
such number of Registered Common Shares of such Principal Party, free
and clear of all liens, encumbrances or other adverse claims, as shall
have an aggregate Market Value equal to the result obtained by
multiplying the Purchase Price by two;
(B) If the Principal Party involved in such Business
Combination does not have Registered Common Shares outstanding, each
Right shall thereafter represent the right to receive, upon the
exercise thereof for the Purchase Price in accordance with the terms
of this Rights Agreement, at the election of the holder of such Right
at the time of the exercise thereof, any of:
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(1) such number of Common Shares of the Surviving Person in
such Business Combination as shall have an aggregate Book Value
immediately after giving effect to such Business Combination
equal to the result obtained by multiplying the Purchase Price by
two;
(2) such number of Common Shares of the Principal Party in
such Business Combination (if the Principal Party is not also the
Surviving Person in such Business Combination) as shall have an
aggregate Book Value immediately after giving effect to such
Business Combination equal to the result obtained by multiplying
the Purchase Price by two; or
(3) if the Principal Party in such Business Combination is
an Affiliate of one or more Persons which has Registered Common
Shares outstanding, such number of Registered Common Shares of
whichever of such Affiliates of the Principal Party has
Registered Common Shares with the greatest aggregate Market Value
on the date of consummation of such Business Combination as shall
have an aggregate Market Value on the date of such Business
Combination equal to the result obtained by multiplying the
Purchase Price by two.
(II) The Company shall not consummate any Business Combination unless
each issuer of Common Shares for which Rights may be exercised, as set
forth in this Section 11(c), shall have sufficient authorized Common Shares
that have not been issued or reserved for issuance (and which shall, when
issued upon exercise thereof in accordance with this Rights Agreement, be
validly issued, fully paid and nonassessable and free of preemptive rights,
rights of first refusal or any other restrictions or limitations on the
transfer or ownership thereof) to permit the exercise in full of the Rights
in accordance with this Section 11(c) and unless prior thereto:
(i) a registration statement under the Securities Act on an
appropriate form, with respect to the Rights and the Common Shares of
such issuer purchasable upon exercise of the Rights, shall be
effective under the Securities Act; and
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(ii) the Company and each such issuer shall have:
(A) executed and delivered to the Rights Agent a supplemental
agreement providing for the assumption by such issuer of the
obligations set forth in this Section 11(c) (including the obligation
of such issuer to issue Common Shares upon the exercise of Rights in
accordance with the terms set forth in Sections 11(c)(I) and
11(c)(III)) and further providing that such issuer, at its own
expense, will use its best efforts to:
(1) cause a registration statement under the Securities Act
on an appropriate form, with respect to the Rights and the Common
Shares of such issuer purchasable upon exercise of the Rights, to
remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration Date;
(2) qualify or register the Rights and the Common Shares of
such issuer purchasable upon exercise of the Rights under the
blue sky or securities laws of such jurisdictions as may be
necessary or appropriate; and
(3) list the Rights and the Common Shares of such issuer
purchasable upon exercise of the Rights on each national
securities exchange on which the Common Shares were listed prior
to the consummation of the Business Combination or, if the Common
Shares were not listed on a national securities exchange prior to
the consummation of the Business Combination, on a national
securities exchange;
(B) furnished to the Rights Agent a written opinion of independent
counsel stating that such supplemental agreement is a valid, binding and
enforceable agreement of such issuer; and
(C) filed with the Rights Agent a certificate of a nationally
recognized firm of independent accountants setting forth the number of
Common Shares of such issuer which may be purchased upon the exercise of
each Right after the consummation of such Business Combination.
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(III) After consummation of any Business Combination and subject to
the provisions of Section 11(c)(II), (i) each issuer of Common Shares for
which Rights may be exercised as set forth in this Section 11(c) shall be
liable for, and shall assume, by virtue of such Business Combination, all
the obligations and duties of the Company pursuant to this Rights
Agreement, (ii) the term "Company" shall thereafter be deemed to refer to
such issuer, (iii) each such issuer shall take such steps in connection
with such consummation as may be necessary to assure that the provisions
hereof (including the provisions of Sections 11(a) and 11(c)) shall
thereafter be applicable, as nearly as reasonably may be, in relation to
its Common Shares thereafter deliverable upon the exercise of the Rights,
and (iv) the number of Common Shares of each such issuer thereafter
receivable upon exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable
to the provisions of Sections 11 and 12 and the provisions of Section 7, 9
and 10 with respect to the Preferred Shares shall apply, as nearly as
reasonably may be, on like terms to any such Common Shares.
SECTION 12. Certain Adjustments.
(a) To preserve the actual or potential economic value of the Rights,
if at any time after the date of this Rights Agreement there shall be any
change in the Common Shares or the Preferred Shares, whether by reason of
stock dividends, stock splits, recapitalizations, mergers, consolidations,
combinations or exchanges of securities, split-ups, split-offs, spin-offs,
liquidations, other similar changes in capitalization, any distribution or
issuance of cash, assets, evidences of indebtedness or subscription rights,
options or warrants to holders of Common Shares or Preferred Shares, as the
case may be (other than distribution of the Rights or regular quarterly
cash dividends) or otherwise, then, in each such event the Board of
Directors of the Company shall make such appropriate adjustments in the
number of Preferred Shares (or the number and kind of other securities)
issuable upon exercise of each Right, the Purchase Price and Redemption
Price in effect at such time and the number of Rights outstanding at such
time (including the number of Rights or fractional Rights associated with
each Common Share) such that following such adjustment such event shall not
have had the effect of reducing or limiting the benefits the holders of the
Rights would have had absent such event.
(b) If, as a result of an adjustment made pursuant to Section 12(a),
the holder of any Right thereafter exercised shall become entitled to
receive any securities other than Preferred Shares, thereafter the number
of such securities so receivable upon exercise of any Right shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the
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provisions of Sections 11 and 12 and the provisions of Sections 7, 9 and 10
with respect to the Preferred Shares shall apply, as nearly as reasonably
may be, on like terms to any such other securities.
(c) All Rights originally issued by the Company subsequent to any
adjustment made to the amount of Preferred Shares or other securities
relating to a Right shall evidence the right to purchase, for the Purchase
Price, the adjusted number and kind of securities purchasable from time to
time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(d) Irrespective of any adjustment or change in the Purchase Price or
the number of Preferred Shares or number or kind of other securities
issuable upon the exercise of the Rights, the Rights Certificates
theretofore and thereafter issued may continue to express the terms which
were expressed in the initial Rights Certificates issued hereunder.
(e) In any case in which action taken pursuant to Section 12(a)
requires that an adjustment be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any Right exercised after such
record date the Preferred Shares and/or other securities, if any, issuable
upon such exercise over and above the Preferred Shares and/or other
securities, if any, issuable before giving effect to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill
or other appropriate instrument evidencing such holder's right to receive
such additional securities upon the occurrence of the event requiring such
adjustment.
SECTION 13. Certificate of Adjustment. Whenever an adjustment is made
as provided in Section 11 or 12, the Company shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement of the facts
accounting for such adjustment, (b) promptly file with the Rights Agent and with
each transfer agent for the Preferred Shares a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Rights Certificate (or, prior
to the Distribution Date, of the Common Shares) in accordance with Section 25.
The Rights Agent shall be fully protected in relying on any such certificate and
on any adjustment therein contained.
SECTION 14. Additional Covenants.
(a) Notwithstanding any other provision of this Rights Agreement, no
adjustment to the number of Preferred Shares (or fractions of a share) or
other securities for which a Right is exercisable or the number of Rights
outstanding or associated with each Common Share or any similar or other
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adjustment shall be made or be effective if such adjustment would have the
effect of reducing or limiting the benefits the holders of the Rights would
have had absent such adjustment, including, without limitation, the
benefits under Sections 11 and 12, unless the terms of this Rights
Agreement are amended so as to preserve such benefits.
(b) The Company covenants and agrees that, after the Distribution
Date, except as permitted by Section 26, it will not take (or permit any
Subsidiary of the Company to take) any action if at the time such action is
taken it is intended or reasonably foreseeable that such action will reduce
or otherwise limit the benefits the holders of the Rights would have had
absent such action, including, without limitation, the benefits under
Sections 11 and 12. Any action taken by the Company during any period after
any Person becomes an Acquiring Person but prior to the Distribution Date
shall be null and void unless such action could be taken under this Section
14(b) from and after the Distribution Date. The Company shall not
consummate any Business Combination if any issuer of Common Shares for
which Rights may be exercised after such Business Combination in accordance
with Section 11(c) shall have taken or contemplated taking any action that
reduces or otherwise limits the benefits the holders of the Rights would
have had absent such action, including, without limitation, the benefits
under Sections 11 and 12.
SECTION 15. Fractional Rights and Fractional Shares.
(a) The Company may, but shall not be required to, issue fractions of
Rights or distribute Rights Certificates which evidence fractional Rights.
In lieu of such fractional Rights, the Company may pay to the registered
holders of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable an amount in cash equal to the same
fraction of the current market value of a whole Right. For purposes of this
Section 15(a), the current market value of a whole Right shall be the
closing price of the Rights (as determined pursuant to the second and third
sentences of the definition of Market Value contained in Section 1) for the
Trading Day immediately prior to the date on which such fractional Rights
would have been otherwise issuable.
(b) The Company may, but shall not be required to, issue fractions of
Preferred Shares upon exercise of the Rights or distribute certificates
which evidence fractional Preferred Shares. In lieu of fractional Preferred
Shares, the Company may elect to (i) utilize a depository arrangement as
provided by the terms of the Preferred Shares or (ii) in the case of a
fraction of a Preferred Share (other than one one-hundredth (1/100th) of a
Preferred Share or any integral multiple thereof), pay to the registered
holders of Right Certificates at the time such Rights are exercised as
herein provided an amount in cash equal
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to the same fraction of the current market value of one Preferred Share, if
any are outstanding and publicly traded (or the Formula Number times the
current market value of one Common Share if the Preferred Shares are not
outstanding and publicly traded). For purposes of this Section 15(b), the
current market value of a Preferred Share (or Common Share) shall be the
closing price of a Preferred Share (or Common Share) (as determined
pursuant to the second and third sentences of the definition of Market
Value contained in Section 1) for the Trading Day immediately prior to the
date of such exercise. If, as a result of an adjustment made pursuant to
Section 12(a), the holder of any Right thereafter exercised shall become
entitled to receive any securities other than Preferred Shares, the
provisions of this Section 15(b) shall apply, as nearly as reasonably may
be, on like terms to such other securities.
(c) The Company may, but shall not be required to, issue fractions of
Common Shares upon exchange of Rights pursuant to Section 11(b), or to
distribute certificates which evidence fractional Common Shares. In lieu of
such fractional Common Shares, the Company may pay to the registered
holders of the Rights Certificates with regard to which such fractional
Common Shares would otherwise be issuable an amount in cash equal to the
same fraction of the current Market Value of one Common Share as of the
date on which a Person became an Acquiring Person.
(d) The holder of Rights by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional shares
upon exercise of a Right except as provided in this Section 15.
SECTION 16. Rights of Action.
(a) All rights of action in respect of this Rights Agreement are
vested in the respective registered holder of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the Common
Shares); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the
Rights Agent or of the holder of any other Rights Certificate (or, prior to
the Distribution Date, of the Common Shares) may, in his own behalf and for
his own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Rights Certificate
in the manner provided in such Rights Certificate and in this Rights
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
Rights Agreement and shall be entitled to specific performance of the
obligations of any Person under, and injunctive relief
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against actual or threatened violations of the obligations of any Person
subject to, this Rights Agreement.
(b) Any holder of Rights who prevails in an action to enforce the
provisions of this Rights Agreement shall be entitled to recover the
reasonable costs and expenses, including attorneys' fees, incurred in such
action.
SECTION 17. Transfer and Ownership of Rights and Rights Certificates.
(a) Prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares and the Rights
associated with the Common Shares shall be automatically transferred upon
the transfer of the Common Shares.
(b) After the Distribution Date, the Rights Certificates will be
transferable, subject to Section 7(e), only on the registry books of the
Rights Agent if surrendered at the principal office of the Rights Agent,
duly endorsed or accompanied by a proper instrument of transfer.
(c) The Company and the Rights Agent may deem and treat the Person in
whose name a Rights Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations
of ownership or writing on the Rights Certificates or the associated
certificate for Common Shares made by anyone other than the Company or the
Rights Agent) for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary.
SECTION 18. Rights Certificate Holder Not Deemed a Shareholder. No
holder, as such, of any Rights Certificate shall be entitled to vote or receive
dividends or be deemed, for any purpose, the holder of the Preferred Shares or
of any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the holder of any
Rights Certificate, as such, any of the rights of a shareholder of the Company,
including, without limitation, 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, or to receive dividends or other
distributions or subscription rights, or otherwise, until the Right or Rights
evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.
SECTION 19. Concerning the Rights Agent.
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(a) The Company agrees to pay to the Rights Agent, as shall be agreed
to in writing between the Company and the Rights Agent, compensation for
all services rendered by it hereunder from time to time and its reasonable
expenses and counsel fees and expenses and other disbursements incurred in
the administration and execution of this Rights Agreement and the exercise
and performance of its duties hereunder. The provisions of this Section
19(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 Rights Agreement in reliance
upon any Rights Certificate or certificate for the Common Shares or for
other securities of the Company, instrument of assignment or transfer,
power of attorney, endorsement, affidavit, letter, notice, opinion,
instruction, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed and executed by the
proper Person or Persons.
SECTION 20. Merger or Consolidation or Change of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer or corporate trust business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Rights 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 22. In case, at the time such
successor Rights Agent shall succeed to the agency created by this Rights
Agreement, any of the Rights Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and, in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent
may countersign such Rights Certificates in the name of the successor
Rights Agent; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Rights
Agreement.
(b) In case at any time the name of the Rights Agent shall be 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
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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 Rights Agreement.
SECTION 21. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Rights Agreement upon the following terms
and conditions, by all of which the Company and the holders of Rights
Certificates (or, prior to the Distribution Date, of the Common Shares), by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel satisfactory to
it (who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken, suffered or omitted by it in good
faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person) be proved or established by the Company prior to taking,
refraining from taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating officer, the Chief
Financial Officer, a Vice President (whether preceded by any additional
title), the Treasurer or the Secretary of the Company and delivered to the
Rights Agent or by the directors of the Company whose vote would be
sufficient to redeem the Rights under Section 24. Such certificate shall
be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Rights Agreement in
reliance upon such certificate. In the event any such certificate signed
by such directors is inconsistent with any other such certificate, the
certificate signed by such directors shall control.
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or wilful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Rights Agreement or in
the Rights Certificates (except as to its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
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(e) The Rights Agent shall not be under any responsibility in respect
of the validity of this Rights Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect
of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by
the Company of any covenant or condition contained in this Rights Agreement
or in any Rights Certificate; nor shall it be responsible for any
adjustment required under the provisions of Section 11 or 12 or responsible
for the manner, method or amount of any such adjustment or the ascertaining
of the existence of facts that would require any such adjustment (except
with respect to the exercise of Rights evidenced by Rights Certificates
after actual notice of any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares or Common Shares to be
issued pursuant to this Rights Agreement or any Rights Certificate or as to
whether any Preferred Shares or Common Shares will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged 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 Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, a Vice President (whether preceded
by any additional title), the Secretary or the Treasurer of the Company or
from the directors of the Company whose vote would be sufficient to redeem
the Rights under Section 24, and to apply to such officers or directors for
advice and instructions in connection with its duties and it shall not be
liable for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officers or directors or for any
delay in acting while waiting for those 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
and/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
such application on or after the date specified in such application (which
date shall not be less than three Business Days after the date any officer
of the Company actually receives such application, unless any such officer
shall
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have consented in writing to any earlier date) unless, prior to taking any
such action (or the effective date in the case of an 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, employee
or affiliate of the Rights Agent may buy, sell or deal in any of the Rights
or other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not the Rights Agent under this Rights Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for the
Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct provided reasonable care was
exercised in the selection thereof.
(j) The Company agrees to indemnify and to hold the Rights Agent
harmless against any loss, liability, damage or expense (including
reasonable fees and expenses of legal counsel) which the Rights Agent may
incur in connection with this Rights Agreement; provided, however, that the
Rights Agent shall not be indemnified or held harmless with respect to any
such loss, liability, damage or expense incurred by the Rights Agent as a
result of, or arising out of, its own gross negligence, bad faith or wilful
misconduct. If any action, proceeding (including, but not limited to, any
governmental investigation), claim or dispute (collectively, a
"Proceeding") in respect of which indemnity may be sought is brought or
asserted against the Rights Agent, the Rights Agent shall promptly (and in
no event more than ten (10) days after receipt of written notice of such
Proceeding) notify the Company of such Proceeding. The failure of the
Rights Agent to so notify the Company shall not impair the Rights Agent's
ability to seek indemnification from the Company (but only for costs,
expenses and liabilities incurred after such notice) unless such failure
adversely affects the Company's ability to adequately oppose or defend such
Proceeding. Upon receipt of such notice from the Rights Agent, the Company
shall be entitled to participate in such Proceeding and, to the extent that
it shall so desire and provided no conflict of interest exists as specified
in (b) below or there are no other defenses available to the Rights Agent
as specified in (d) below, to assume the defense thereof with
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counsel reasonably satisfactory to the Rights Agent (in which case all
attorney's fees and expenses shall be borne by the Company and the Company
shall in good faith defend the Rights Agent). The Rights Agent shall have
the right to employ separate counsel in any such Proceeding and to
participate in the defense thereof, but the fees and expenses of such
counsel shall be borne by the Rights Agent unless (a) the Company agrees in
writing to pay such fees and expenses, (b) the Rights Agent shall have
reasonably and in good faith concluded that there is a conflict of interest
between the Company and the Rights Agent in the conduct of the defense of
such action, (c) the Company fails, within ten (10) days prior to the date
the first response or appearance is required to be made in such Proceeding,
to assume the defense of such Proceeding with counsel reasonably
satisfactory to the Rights Agent or (d) there are legal defenses available
to the Rights Agent that are different from or are in addition to those
available to the Company. No compromise or settlement of such Proceeding
may be effected by either party without the other party's consent unless
(i) there is no finding or admission of any violation of law and no effect
on any other claims that may be made against such other party and (ii) the
sole relief provided is monetary damages that are paid in full by the party
seeking the settlement. Neither party shall have any liability with
respect to any compromise or settlement effected without its consent, which
consent shall not be unreasonably withheld. The Company shall have no
obligation to indemnify and hold harmless the Rights Agent from any loss,
expense or liability incurred by the Rights Agent as a result of a default
judgment entered against the Rights Agent unless such judgment was entered
after the Company agreed, in writing, to assume the defense of such
Proceeding.
The provisions of this Section 21(j) shall survive expiration of the
Rights and the termination of this Agreement.
(k) The Rights Agent shall be under no obligation to institute any
action, suit or legal proceeding or to take any other action likely to
involve expense unless the Company or one or more registered holders of
Rights Certificates shall furnish the Rights Agent with security and
indemnity to its satisfaction for any costs and expenses which may be
incurred.
(l) The Rights Agent shall not be liable for failure to perform any
duties except as specifically set forth herein and no implied covenants or
obligations shall be read into this Agreement against the Rights Agent,
whose duties and obligations are ministerial and shall be determined solely
by the express provisions hereof.
SECTION 22. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon
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30 days' notice in writing mailed to the Company and to each transfer agent of
the Common Shares and the Preferred Shares by registered or certified mail. The
Company may remove the Rights Agent or any successor Rights Agent upon 30 days'
notice in writing, mailed to the Rights Agent or successor Rights Agent, as the
case may be, and to each transfer agent of the Common Shares and the Preferred
Shares by registered or certified mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights Certificate
(or, prior to the Distribution Date, of the Common Shares) (who shall, with such
notice, submit his Rights Certificate or, prior to the Distribution Date, the
certificate representing his Common Shares, for inspection by the Company), then
the Rights Agent or the registered holder of any Rights Certificate (or, prior
to the Distribution Date, of the Common Shares) may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States,
the State of Indiana or the State of New York (or of any other state of the
United States so long as such corporation is authorized to conduct a stock
transfer or corporate trust business in the State of Indiana or the State of New
York), in good standing (where applicable) which is authorized under such laws
to exercise stock transfer or corporate trust powers and is subject to
supervision or examination by Federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000; provided that the principal transfer agent for the Common
Shares shall in any event be qualified to be the Rights Agent. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares and the
Preferred Shares, and mail a notice thereof in writing to the registered holders
of the Rights Certificates (or, prior to the Distribution Date, of the Common
Shares). Failure to give any notice provided for in this Section 22, however, or
any defect therein shall not affect the legality or validity of the resignation
or removal of the Rights Agent or the appointment of the successor Rights Agent,
as the case may be.
SECTION 23. Issuance of Additional Rights and Rights Certificates.
Notwithstanding any of the provisions of this Rights 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 made in accordance with the provisions of this
Rights Agreement. In addition, in connection with the issuance or sale of Common
Shares following the Distribution Date and prior to the earlier of the
Redemption Date and the Expiration Date, the Company (a) shall, with respect
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to Common Shares so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company, and (b) may,
in any other case, if deemed necessary or appropriate by the Board of Directors
of the Company, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (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 the Person to whom such
Rights Certificate would be issued, and (ii) no such Rights Certificate shall be
issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
SECTION 24. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) such time as a Person becomes an Acquiring
Person and (ii) the Expiration Date, order the redemption of all, but not
fewer than all, the then outstanding Rights at the Redemption Price (the
date of such redemption being the "Redemption Date"), and the Company, at
its option, may pay the Redemption Price either in cash or Common Shares or
other securities of the Company deemed by the Board of Directors of the
Company, 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 ordering the redemption of the Rights, and without any further
action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be
to receive the Redemption Price. Within 10 Business Days after the action
of the Board of Directors of the Company ordering the redemption of the
Rights, the Company shall give notice of such redemption to the holders of
the then outstanding Rights by mailing such notice to all such holders at
their last addresses as they appear upon the registry books of the Rights
Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the Common Shares. Each such notice of redemption will
state the method by which payment of the Redemption Price will be made.
The notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the holder of Rights
receives such notice. In any case, failure to give such notice by mail, or
any defect in the notice, to any particular holder of Rights shall not
affect the sufficiency of the notice to other holders of Rights.
SECTION 25. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of a Rights Certificate
(or, prior to the
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Distribution Date, of the Common Shares) to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
Quality Dining, Inc.
4220 Edison Lakes Parkway
Mishawaka, Indiana 46545
Attn: Chief Executive Officer
Subject to the provisions of Section 22, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the holder of a Rights
Certificate (or, prior to the Distribution Date, of the Common Shares) to or on
the Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Company) as follows:
KeyCorp Shareholder Services, Inc.
127 Public Square
Cleveland, Ohio 44114-1306
Attn: Administrative Officer
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to any holder of a Rights Certificate (or, prior
to the Distribution Date, of the Common Shares) shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the transfer agent
for the Common Shares.
SECTION 26. Supplements and Amendments. At any time prior to the
Distribution Date and subject to the last sentence of this Section 26, the
Company may, and the Rights Agent shall if the Company so directs, supplement or
amend any provision of this Rights Agreement (including, without limitation, the
date on which the Distribution Date shall occur, the definition of "Acquiring
Person", the time during which the Rights may be redeemed pursuant to Section 24
or any provision of the Certificate of Designation) without the approval of any
holder of the Rights. From and after the Distribution Date and subject to
applicable law, the Company may, and the Rights Agent shall if the Company so
directs, amend this Rights Agreement without the approval of any holders of
Rights Certificates (i) to cure any ambiguity or to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provision of this Rights Agreement or (ii) to make any other provisions in
regard to matters or questions arising hereunder which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
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holders of Rights Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person). Any supplement or amendment adopted during
any period after any Person has become an Acquiring Person but prior to the
Distribution Date shall be null and void unless such supplement or amendment
could have been adopted under the prior sentence from and after the Distribution
Date. Any supplement or amendment to this Rights Agreement duly approved by the
Company that does not amend Sections 19, 20, 21 or 22 in a manner adverse to the
Rights Agent shall become effective immediately upon execution by the Company,
whether or not also executed by the Rights Agent. The Rights Agent shall receive
prompt written notice from the Company of any amendment hereunder. In addition,
notwithstanding anything to the contrary contained in this Rights Agreement, no
supplement or amendment to this Rights Agreement shall be made which (a) reduces
the Redemption Price (except as required by Section 12(a)) or (b) provides for
an earlier Expiration Date. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section, the Rights Agent
shall execute such supplement or amendment. Notwithstanding any other provision
hereof, the Rights Agent's consent must be obtained regarding any amendment or
supplement pursuant to this Section 26 which alters the Rights Agent's rights or
duties.
SECTION 27. Successors. All the covenants and provisions of this
Rights Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 28. Benefits of Rights Agreement; Determinations and Actions
by the Board of Directors, etc.
(a) Nothing in this Rights Agreement shall be construed to give to
any Person other than the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date, of
the Common Shares) any legal or equitable right, remedy or claim under this
Rights Agreement; but this Rights Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date, of
the Common Shares).
(b) Except as explicitly otherwise provided in this Rights Agreement,
the Board of Directors of the Company shall have the exclusive power and
authority to administer this Rights 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 Rights Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Rights Agreement and (ii)
make all determinations deemed necessary or advisable for the
administration of this Rights Agreement (including, without limitation, a
determination to redeem or
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not redeem the Rights or to amend this Rights Agreement and whether there
is an Acquiring Person).
(c) Nothing contained in this Rights Agreement shall be deemed to be
in derogation of the obligation of the Board of Directors of the Company to
exercise its fiduciary duty. Without limiting the foregoing, nothing
contained herein shall be construed to suggest or imply that the Board of
Directors shall not be entitled to reject any tender offer, or to recommend
that holders of Common Shares reject any tender offer or other acquisition
proposal, or to take any other action (including, without limitation, the
commencement, prosecution, defense or settlement of any litigation and the
submission of additional or alternative offers or other proposals) with
respect to any tender offer or other acquisition proposal that the Board of
Directors believes is necessary or appropriate in the exercise of such
fiduciary duty.
SECTION 29. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
SECTION 30. Governing Law. THIS RIGHTS AGREEMENT AND EACH RIGHT
CERTIFICATE ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAW
OF THE STATE OF INDIANA AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAW OF SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE AND
PERFORMED ENTIRELY WITHIN SUCH STATE, PROVIDED, HOWEVER, THAT THE RIGHTS AND
OBLIGATIONS OF THE RIGHTS AGENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF OHIO.
SECTION 31. Counterparts; Effectiveness. This Rights 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. This Rights Agreement
shall be effective as of the Close of Business on the date hereof.
SECTION 32. Descriptive Headings. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
of this Rights Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed as of the day and year first above written.
QUALITY DINING, INC.
By: /s/ David M. Findlay
---------------------------------------------
Name: David M. Findlay
Title: Senior Vice President-Finance
KEYCORP SHAREHOLDER SERVICES, INC.,
as Rights Agent,
By: /s/ Debra Kindred
---------------------------------------------
Name: Debra Kindred
Title: Assistant Vice President
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EXHIBIT A
ARTICLES OF AMENDMENT SETTING FORTH
THE DESIGNATION, VOTING POWERS, PREFERENCES AND
RELATIVE PARTICIPATING, OPTIONAL AND OTHER SPECIAL RIGHTS
AND QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF
SERIES B PARTICIPATING CUMULATIVE PREFERRED STOCK
OF QUALITY DINING, INC.
Pursuant to Section 23-1-25-1 and Section 23-1-25-2 of the Indiana
Business Corporation Law, Quality Dining, Inc. (the "Corporation"), a
corporation organized and existing under the Indiana Business Corporation Law,
in accordance with the provisions of Section 23-1-18-1 and Section 23-1-38-6
thereof, DOES HEREBY CERTIFY:
That, pursuant to the authority conferred upon the Board of Directors
of the Corporation by the Restated Articles of Incorporation of the Corporation
(the "Articles of Incorporation"), the Board of Directors of the Corporation on
March 27, 1997, adopted the following resolution amending the Articles of
Incorporation to create a series of Preferred Stock designated as Series B
Participating Cumulative Preferred Stock:
RESOLVED that pursuant to the authority vested in the Board of
Directors of the Corporation in the Articles of Incorporation, the
designations, voting powers, preferences and relative, participating,
optional and other special rights and qualifications, limitations or
restrictions of a series of Preferred Stock be, and they hereby are, fixed
as follows:
SECTION 1. Designation and Number of Shares. The shares of such
series shall be designated as "Series B Participating Cumulative Preferred
Stock" (the "Series B Preferred Stock"), without par value. The number of shares
initially constituting the Series B Preferred Stock shall be 180,000; provided,
however, that, if more than a total of 180,000 shares of Series B Preferred
Stock shall be issuable upon the exercise of Rights (the "Rights") issued
pursuant to that Rights Agreement between the Corporation and KeyCorp
Shareholder Services, Inc., as Rights Agent (the "Rights Agreement"), the Board
of Directors of the Corporation, pursuant to Section 23-1-25-2(d) of the Indiana
Business Corporation Law, shall direct by resolution or resolutions that
articles of amendment be properly executed and delivered to the Secretary of
State for the State of Indiana for filing in accordance with the provisions of
Section 23-1-18-1 and Section 23-1-38-6 thereof, providing for the total number
of shares of Series B Preferred Stock authorized to be issued to be increased
(to the extent that the Articles of Incorporation then permit) to the largest
number of whole shares (rounded up to the nearest whole number) issuable upon
exercise of such Rights.
SECTION 2. Dividends or Distributions.
(a) Subject to the prior and superior rights of the holders of shares
of any other series of Preferred Stock or other class of capital stock of
the
<PAGE>
Corporation ranking prior and superior to the shares of Series B Preferred
Stock with respect to dividends, the holders of shares of the Series B
Preferred Stock shall be entitled to receive, when, as and if declared by
the Board of Directors, out of the assets of the Corporation legally
available therefor, (1) quarterly dividends payable in cash on the last day
of each fiscal quarter in each year, or such other dates as the Board of
Directors of the Corporation shall approve (each such date being referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or a
fraction of a share of Series B Preferred Stock, in the amount of $.01 per
whole share (rounded to the nearest cent) less the amount of all cash
dividends declared on the Series B Preferred Stock pursuant to the
following clause (2) since the immediately preceding Quarterly Dividend
Payment Date or, with respect to the first Quarterly Dividend Payment Date,
since the first issuance of any share or fraction of a share of Series B
Preferred Stock (the total of which shall not, in any event, be less than
zero) and (2) dividends payable in cash on the payment date for each cash
dividend declared on the outstanding shares of Common Stock, without par
value, and non-voting Common Stock, without par value (collectively, the
"Common Stock") in an amount per whole share (rounded to the nearest cent)
equal to the Formula Number (as hereinafter defined) then in effect times
the cash dividends then to be paid on each share of Common Stock. In
addition, if the Corporation shall pay any dividend or make any
distribution on the Common Stock payable in assets, securities or other
forms of noncash consideration (other than dividends or distributions
solely in shares of Common Stock), then, in each such case, the Corporation
shall simultaneously pay or make on each outstanding whole share of Series
B Preferred Stock a dividend or distribution in like kind equal to the
Formula Number then in effect times such dividend or distribution on each
share of the Common Stock. As used herein, the "Formula Number" shall be
100; provided, however, that, if at any time hereafter, the Corporation
shall (i) declare or pay any dividend on the Common Stock payable in shares
of Common Stock or make any distribution on the Common Stock in shares of
Common Stock, (ii) subdivide (by a stock split or otherwise) the
outstanding shares of Common Stock into a larger number of shares of Common
Stock or (iii) combine (by a reverse stock split or otherwise) the
outstanding shares of Common Stock into a smaller number of shares of
Common Stock, then in each such event the Formula Number shall be adjusted
to a number determined by multiplying the Formula Number in effect
immediately prior to such event by a fraction, the numerator of which is
the number of shares of Common Stock that are outstanding immediately after
such event and the denominator of which is the number of shares of Common
Stock that are outstanding immediately prior to such event (and rounding
the result to the nearest whole number); and provided further, that, if at
any time hereafter the Distribution Record Date, the Corporation shall
issue any shares
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of its capital stock in a merger, reclassification, or change of the
outstanding shares of Common Stock, then in each such event the Formula
Number shall be appropriately adjusted to reflect such merger,
reclassification or change so that each share of Preferred Stock continues
to be the economic equivalent of a Formula Number of shares of Common Stock
prior to such merger, reclassification or change.
(b) The Corporation shall declare a dividend or distribution on the
Series B Preferred Stock as provided in Section 2(a) immediately prior to
or at the same time it declares a dividend or distribution on the Common
Stock (other than a dividend or distribution solely in shares of Common
Stock); provided, however, that, in the event no dividend or distribution
(other than a dividend or distribution in shares of Common Stock) shall
have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $.01 per share on the Series B Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date. The Board of Directors may fix a record date for the determination of
holders of shares of Series B Preferred Stock entitled to receive a
dividend or distribution declared thereon, which record date shall be the
same as the record date for any corresponding dividend or distribution on
the Common Stock.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Preferred Stock from and after the Quarterly Dividend
Payment Date next preceding the date of original issue of such shares of
Series B Preferred Stock; provided, however, that dividends on such shares
which are originally issued after the record date for the determination of
holders of shares of Series B Preferred Stock entitled to receive a
quarterly dividend and on or prior to the next succeeding Quarterly
Dividend Payment Date shall begin to accrue and be cumulative from and
after such Quarterly Dividend Payment Date. Notwithstanding the foregoing,
dividends on shares of Series B Preferred Stock which are originally issued
prior to the record date for the determination of holders of shares of
Series B Preferred Stock entitled to receive a quarterly dividend on the
first Quarterly Dividend Payment Date shall be calculated as if cumulative
from and after the last day of the fiscal quarter next preceding the date
of original issuance of such shares. Accrued but unpaid dividends shall not
bear interest. Dividends paid on the shares of Series B Preferred Stock in
an amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding.
(d) So long as any shares of the Series B Preferred Stock are
outstanding, no dividends or other distributions shall be declared, paid or
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<PAGE>
distributed, or set aside for payment or distribution, on the Common Stock
unless, in each case, the dividend required by this Section 2 to be
declared on the Series B Preferred Stock shall have been declared.
(e) The holders of the shares of Series B Preferred Stock shall not
be entitled to receive any dividends or other distributions except as
provided herein.
SECTION 3. Voting Rights. The holders of shares of Series B
Preferred Stock shall have the following voting rights:
(a) Each holder of Series B Preferred Stock shall be entitled to a
number of votes equal to the Formula Number then in effect, for each share
of Series B Preferred Stock held of record on each matter on which holders
of the Common Stock or shareholders generally are entitled to vote,
multiplied by the maximum number of votes per share which any holder of the
Common Stock or shareholders generally then have with respect to such
matter (assuming any holding period or other requirement to vote a greater
number of shares is satisfied).
(b) Except as otherwise provided herein or by applicable law, the
holders of shares of Series B Preferred Stock and the holders of shares of
Common Stock shall vote together as one class for the election of directors
of the Corporation and on all other matters submitted to a vote of
shareholders of the Corporation.
(c) If, at the time of any annual meeting of shareholders for the
election of directors, the equivalent of six quarterly dividends (whether
or not consecutive) payable on any share or shares of Series B Preferred
Stock are in default, the number of directors constituting the Board of
Directors of the Corporation shall be increased by two. In addition to
voting together with the holders of Common Stock for the election of other
directors of the Corporation, the holders of record of the Series B
Preferred Stock, voting separately as a class to the exclusion of the
holders of Common Stock, shall be entitled at said meeting of shareholders
(and at each subsequent annual meeting of shareholders), unless all
dividends in arrears have been paid or declared and set apart for payment
prior thereto, to vote for the election of two directors of the
Corporation, the holders of any Series B Preferred Stock being entitled to
cast a number of votes per share of Series B Preferred Stock equal to the
Formula Number. Until the default in payments of all dividends which
permitted the election of said directors shall cease to exist, any director
who shall have been so elected pursuant to the next preceding sentence may
be removed at any time, either with or without cause, only by the
affirmative vote of the holders of the
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shares of Series B Preferred Stock at the time entitled to cast a majority
of the votes entitled to be cast for the election of any such director at a
special meeting of such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such holders. If and when such
default shall cease to exist, the holders of the Series B Preferred Stock
shall be divested of the foregoing special voting rights, subject to
revesting in the event of each and every subsequent like default in
payments of dividends. Upon the termination of the foregoing special voting
rights, the terms of office of all persons who may have been elected
directors pursuant to said special voting rights shall forthwith terminate,
and the number of directors constituting the Board of Directors shall be
reduced by two. The voting rights granted by this Section 3(c) shall be in
addition to any other voting rights granted to the holders of the Series B
Preferred Stock in this Section 3.
(d) Except as provided herein, in Section 11 or by applicable law,
holders of Series B Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled
to vote with holders of Common Stock as set forth herein) for authorizing
or taking any corporate action.
SECTION 4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series B Preferred
Stock outstanding shall have been paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other distributions on,
or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Preferred
Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series B
Preferred Stock, except dividends paid ratably on the Series B
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
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(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series B
Preferred Stock; provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior
(either as to dividends or upon liquidation, dissolution or winding
up) to the Series B Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series B Preferred Stock, or any shares of stock ranking on a
parity with the Series B Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(b) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (a) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. Liquidation Rights. Upon the liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, no distribution
shall be made (1) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series B
Preferred Stock unless, prior thereto, the holders of shares of Series B
Preferred Stock shall have received an amount equal to the accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (x) $.01 per whole share or
(y) an aggregate amount per share equal to the Formula Number then in effect
times the aggregate amount to be distributed per share to holders of Common
Stock or (2) to the holders of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series B Preferred
Stock, except distributions made ratably on the Series B Preferred Stock and all
other such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or winding
up; provided that in no event shall the amount or amounts, if any, exceed $100
per share plus accrued dividends in the case of involuntary liquidation,
dissolution or winding up of the Corporation.
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SECTION 6. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash or any other property, then in any such case the then
outstanding shares of Series B Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share equal to the Formula
Number then in effect times the aggregate amount of stock, securities, cash or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is exchanged or changed. In the event both this
Section 6 and Section 2 appear to apply to a transaction, this Section 6 will
control.
SECTION 7. No Redemption; No Sinking Fund.
(a) The shares of Series B Preferred Stock shall not be subject to
redemption by the Corporation or at the option of any holder of Series B
Preferred Stock; provided, however, that the Corporation may purchase or
otherwise acquire outstanding shares of Series B Preferred Stock in the
open market or by offer to any holder or holders of shares of Series B
Preferred Stock.
(b) The shares of Series B Preferred Stock shall not be subject to or
entitled to the operation of a retirement or sinking fund.
SECTION 8. Ranking. The Series B Preferred Stock shall rank junior to
all other series of Preferred Stock of the Corporation, unless the Board of
Directors shall specifically determine otherwise in fixing the powers,
preferences and relative, participating, optional and other special rights of
the shares of such series and the qualifications, limitations or restrictions
thereof.
SECTION 9. Fractional Shares. The Series B Preferred Stock shall be
issuable upon exercise of the Rights issued pursuant to the Rights Agreement in
whole shares or in any fraction of a share that is one one-hundredth (1/100th)
of a share or any integral multiple of such fraction which shall Entitle the
holder, in proportion to such holder's fractional shares, to receive dividends,
exercise voting rights, participate in distributions and to have the benefit of
all other rights of holders of Series B Preferred Stock. In lieu of fractional
shares, the Corporation, prior to the first issuance of a share or a fraction of
a share of Series B Preferred Stock, may elect (1) to make a cash payment as
provided in the Rights Agreement for fractions of a share other than one one-
hundredth (1/100th) of a share or any integral multiple thereof or (2) to issue
depository receipts evidencing such authorized fraction of a share of Series B
Preferred Stock pursuant to an appropriate agreement between the Corporation and
a depository selected by the Corporation; provided that such agreement shall
provide that the holders of such depository receipts shall have all the rights,
privileges and preferences to which they are entitled as holders of the Series B
Preferred Stock.
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<PAGE>
SECTION 10. Reacquired Shares. Any shares of Series B Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock, without designation as to series until such shares are once
more designated as part of a particular series by the Board of Directors
pursuant to the Articles of Incorporation.
SECTION 11. Amendment. None of the powers, preferences and relative,
participating, optional and other special rights of the Series B Preferred Stock
as provided herein or in the Articles of Incorporation shall be amended in any
manner which would alter or change the powers, preferences, rights or privileges
of the holders of Series B Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least 66-2/3% of the
outstanding shares of Series B Preferred Stock, voting as a separate class;
provided, however, that no such amendment approved by the holders of at least
66-2/3% of the outstanding shares of Series B Preferred Stock shall be deemed to
apply to the powers, preferences, rights or privileges of any holder of shares
of Series B Preferred Stock originally issued upon exercise of a Right after the
time of such approval without the approval of such holder.
The foregoing amendment was duly adopted by the Board of Directors of
the Corporation pursuant to Section 23-1-25-2(d) and Section 23-1-38-2(7) of the
Indiana Business Corporation Law, and, accordingly, shareholder action was not
required.
IN WITNESS WHEREOF, the Corporation has caused these Articles of
Amendment to be duly executed in its corporate name on this 31st day of March,
1997.
QUALITY DINING, INC.
By: /s/ David M. Findlay
----------------------------------------
Name: David M. Findlay
Title: Senior Vice President-Finance
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<PAGE>
Attest:
/s/ John C. Firth
- ---------------------------------
Name: John C. Firth
Title: Senior Vice President,
General Counsel and Secretary
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<PAGE>
EXHIBIT B
[Form of Rights Certificate]
Certificate No. [R]-
__________ Rights
NOT EXERCISABLE AFTER MARCH 27, 2007, OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
COMPANY, AT $.01 PER RIGHT, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND BY ANY SUBSEQUENT HOLDER OF SUCH RIGHTS ARE NULL AND VOID
AND NONTRANSFERABLE.
Rights Certificate
QUALITY DINING, INC.
This certifies that ______________________________, or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions and
conditions of the Rights Agreement dated as of March 27, 1997 (the "Rights
Agreement"), between Quality Dining, Inc., an Indiana corporation (the
"Company"), and KeyCorp Shareholder Services, Inc., a national banking
association, as Rights Agent (the "Rights Agent"), unless the Rights evidenced
hereby shall have been previously redeemed by the Company, to purchase from the
Company at any time after the Distribution Date (as defined in the Rights
Agreement) and prior to 5:00 p.m., New York City time, on the 10th anniversary
of the date of the Rights Agreement (the "Expiration Date"), at the designated
office of the Rights Agent, or its successors as Rights Agent, in Cleveland,
Ohio, one one-hundredth (1/100th) of a fully paid, nonassessable share of Series
B Participating Cumulative Preferred Stock, without par value, of the Company
(the "Preferred Shares"), at a purchase price per one one-hundredth (1/100th) of
a share equal to $______ (the "Purchase Price") payable in cash, upon
presentation and surrender of this Rights Certificate with the Form of Election
to Purchase duly executed.
The Purchase Price and the number and kind of shares which may be
purchased upon exercise of each Right evidenced by this Rights Certificate, as
set forth above, are the Purchase Price and the number and kind of shares which
may be so purchased as of the date hereof. As provided in the Rights Agreement,
the Purchase Price and the number and kind of shares which may be purchased upon
the exercise of each Right evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events.
<PAGE>
If the Rights evidenced by this Rights Certificate are at any time
beneficially owned by an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and nontransferable and the holder of any such
Right (including any purported transferee or subsequent holder) shall not have
any right to exercise or transfer any such Right.
This Rights Certificate is subject to all 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
reference to the Rights Agreement 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 above-mentioned office of the Rights
Agent and are also available from the Company upon written request.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal stock transfer or corporate trust office of the
Rights Agent, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number and kind of shares as the Rights evidenced by
the Rights Certificate or Rights Certificates surrendered shall have entitled
such holder to purchase. If this Rights Certificate shall be exercised in part,
the 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, the Rights
evidenced by this Rights Certificate may be redeemed by the Company at its
option at a redemption price (in cash or shares of Common Stock or other
securities of the Company deemed by the Board of Directors to be at least
equivalent in value) of $.01 per Right (which amount shall be subject to
adjustment as provided in the Rights Agreement) at any time prior to the earlier
of (i) such time as a Person becomes an Acquiring Person and (ii) the Expiration
Date.
The Company may, but shall not be required to, issue fractions of
Preferred Shares or distribute certificates which evidence fractions of
Preferred Shares upon the exercise of any Right or Rights evidenced hereby. In
lieu of issuing fractional shares, the Company may elect to make a cash payment
as provided in the Rights Agreement for fractions of a share other than one one-
hundredth (1/100th) of a share or any integral multiple thereof or to issue
certificates or utilize a depository arrangement as provided in the terms of the
Rights Agreement and the Preferred Shares.
No holder of this Rights Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a shareholder of the Company, including, without
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<PAGE>
limitation, 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 other distributions or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in accordance with the provisions of the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by an authorized signatory of the
Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of:
QUALITY DINING, INC.
By:
---------------------------------------
Name:
Title:
Attest:
- ----------------------------------
Name:
Title:
Date of countersignature:
Countersigned:
KEYCORP SHAREHOLDER SERVICES, INC.,
as Rights Agent,
By:
-----------------------------
Authorized Signatory
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<PAGE>
[On Reverse Side of Rights Certificate]
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed by the registered holder if
such holder desires to exercise the Rights
represented by this Rights Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise __________
Rights represented by this Rights Certificate to purchase the Preferred Shares
(or other shares) issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name of:
Please insert social security
or other identifying number
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
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<PAGE>
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
- -------------------------------------------------------------------------------
(Please print name and address)
- -------------------------------------------------------------------------------
Dated: , 19
--------------- ---
----------------------------------------------
Signature
Signature Guaranteed:
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<PAGE>
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED hereby sells,
-------------------------------------
assigns and transfer unto
------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
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 Corporation, with full power of substitution.
Dated: 19
---------------, --
- ------------------------------------------
Signature
Signature Guaranteed:
The undersigned hereby certifies that (1) the Rights evidenced by this
Rights Certificate are not being sold, assigned or transferred by or on behalf
of a Person who is or was an Acquiring Person or an Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement), (2) this Rights
Certificate is not being sold, assigned or transferred to or on behalf of any
such Acquiring Person, Affiliate or Associate and (3) after inquiry and to the
best knowledge of the undersigned, the undersigned did not acquire the Rights
evidenced by this Rights Certificate from any Person who is or was an Acquiring
Person or an Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement).
- ------------------------------------------
Signature
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<PAGE>
NOTICE
------
The signature on the foregoing Form of Election to Purchase or Form of
Assignment must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
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