EXHIBIT 4.1
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BFX HOSPITALITY GROUP, INC.
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
Rights Agent
RIGHTS AGREEMENT
Dated as of February 11, 1999
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TABLE OF CONTENTS
Section 1. Certain Definitions............................................. 1
Section 2. Appointment of Rights Agent..................................... 4
Section 3. Issue of Right Certificates..................................... 4
Section 4. Form of Right Certificates...................................... 5
Section 5. Countersignature and Registration............................... 6
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates.............................................. 6
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights... 7
Section 8. Cancellation and Destruction of Right Certificates.............. 8
Section 9. Availability of Preferred Shares; Transfer Taxes;
Securities Registration......................................... 8
Section 10. Preferred Shares Record Date.................................... 9
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights....................................................... 9
Section 12. Certificate of Adjusted Purchase Price or Number of Shares......15
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power...................................................15
Section 14. Fractional Rights and Fractional Shares.........................17
Section 15. Rights of Action................................................18
Section 16. Agreement of Right Holders......................................19
Section 17. Right Certificate Holder Not Deemed a Stockholder...............19
Section 18. Concerning the Rights Agent.....................................19
Section 19. Merger or Consolidation or Change of Name of Rights Agent.......20
Section 20. Duties of Rights Agent..........................................20
Section 21. Change of Rights Agent..........................................22
(i)
Section 22. Issuance of New Right Certificates..............................22
Section 23. Redemption......................................................23
Section 24. Exchange........................................................23
Section 25. Notice of Certain Events........................................25
Section 26. Notices.........................................................25
Section 27. Supplements and Amendments......................................26
Section 28. Successors......................................................26
Section 29. Benefits of this Agreement......................................26
Section 30. Severability....................................................26
Section 31. Governing Law...................................................27
Section 32. Counterparts....................................................27
Section 33. Descriptive Headings............................................27
Section 34. Determinations and Actions by the Board of Directors............27
Exhibit A - Certificate of Designation, Powers, Preferences and Rights
of Series B Junior Preferred Stock A-1
Exhibit B - Form of Right Certificate B-1
Exhibit C - Summary of Rights to Purchase Preferred Shares C-1
(ii)
RIGHTS AGREEMENT
This Rights Agreement (this "Agreement") dated as of February 11, 1999,
between BFX Hospitality Group, Inc., a Delaware corporation (the "Company"), and
Continental Stock Transfer & Trust Company (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend, and thereby directed the issuance, of one Preferred Share (as such
term is hereinafter defined) purchase right (a "Right") for and in respect of
each Common Share (as such term is hereinafter defined) outstanding on March 8,
1999 (the "Record Date"), each Right representing the right to purchase one one-
hundredth interest in a Preferred Share, upon the terms and subject to the
conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms (in addition to those defined above or elsewhere herein) have
the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the Common Shares then outstanding, but shall not include (i)
the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan
of the Company or of any Subsidiary of the Company, (iv) any Person holding
Common Shares for or pursuant to the terms of any such plan to the extent, and
only to the extent, of the Common Shares so held or (v) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and his
Affiliates and Associates. Notwithstanding the foregoing, (i) no Person shall
become an "Acquiring Person" as the result of an acquisition of Common Shares by
the Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or more
of the Common Shares then outstanding; provided, however, that if a Person
becomes the Beneficial Owner of 15% or more of the Common Shares then
outstanding by reason of share acquisitions by the Company and shall, after such
share acquisitions by the Company, become the Beneficial Owner of any additional
Common Shares, then such Person shall be deemed to be an "Acquiring Person".
(b) "Affiliate" and "Associate" 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 Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and
between underwriters and selling group members with respect to a bona fide
public offering of securities), or pursuant to 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, securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person
or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; or (B) the right to vote
or consent to action pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security or consent to action (1)
arises solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated under the
Exchange Act and (2) is not also then reportable on Schedule 13D
promulgated under the Exchange Act (or any comparable or successor report);
or
(iii) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates
or Associates has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting or consenting to action (except to
the extent contemplated by the proviso to Section 1(c)(ii) hereof) or
disposing of any securities of the Company.
Notwithstanding the foregoing, any securities that are owned or held by the
Company, by any Subsidiary of the Company, or by any employee benefit plan of
the Company or of any Subsidiary of the Company, and any securities that are
owned or held by any Person pursuant to the terms of any such plan (to the
extent, and only to the extent, of the securities so held), shall not be deemed
to be beneficially owned by any other Person and no other Person shall be deemed
to be the Beneficial Owner of such securities. Further, notwithstanding
anything in this definition of Beneficial Ownership to the contrary, the phrase
"then outstanding", when used with reference to a Person's Beneficial Ownership
of securities of the Company, shall mean the number of such securities then
issued and outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to own
beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
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(e) "close of business" on any given date shall mean 5:00 p.m., New
York time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 p.m., New York time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company
(specifically or in context) shall mean the shares of common stock, par value
$.05 per share, of the Company. "Common Shares" when used with reference to any
Person other than the Company shall mean the capital stock (or equity interest)
with the greatest voting power of such other Person or, if such other Person is
a Subsidiary of another Person, of the Person or Persons which ultimately
control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in Section
3 hereof.
(h) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(i) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(j) "Person" shall mean any individual, trust, estate, firm,
corporation, incorporated or unincorporated association, limited liability
company, partnership or other entity, and shall include any successor (by merger
or otherwise) of any such Person.
(k) "Preferred Shares" shall mean shares of Series B Junior
Preferred Stock, par value $.01 per share, of the Company having the rights and
preferences set forth in the form of the Certificate of Designation, Powers,
Preferences and Rights attached to this Agreement as Exhibit A.
(l) "Purchase Price" shall have the meaning set forth in Section 4
hereof, as the same may be adjusted from time to time in accordance with the
terms of this Agreement.
(m) "Right Certificate" shall have the meaning set forth in Section
3 hereof.
(n) "Redemption Date" shall have the meaning set forth in Section
7(a) hereof.
(o) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(p) "Shares Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such.
(q) "Subsidiary" of any Person shall mean any corporation,
incorporated or unincorporated association, limited liability company,
partnership or other entity of which a majority of the voting power of the
voting equity securities or equity interest is owned, directly or indirectly, by
such Person.
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Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Right Certificates.
(a) Until the earlier (the earlier of such dates being herein
referred to as the "Distribution Date") of (i) the close of business on the
tenth Business Day after the Shares Acquisition Date and (ii) the close of
business on the tenth Business Day after the date of the commencement by any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
holding Common Shares for or pursuant to the terms of any such plan to the
extent such Person is so acting with the approval or consent of the Company) of,
or of the first public announcement of the intention of any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or of any Subsidiary of the Company, or any Person holding Common Shares
for or pursuant to the terms of any such plan to the extent such Person is so
acting with the approval or consent of the Company) to commence, a tender or
exchange offer the consummation of which would result in any Person becoming the
Beneficial Owner of 15% or more of the Common Shares then outstanding, including
any such date which is after the date of this Agreement and prior to the
issuance of the Rights, (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also be
deemed to be Right Certificates) and not by separate Right Certificates, and (y)
the right to receive Right Certificates will be transferable only in connection
with the transfer of Common Shares of the Company. As soon as practicable after
the Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be sent (and the Rights
Agent will, if requested, send), by first-class, insured, postage prepaid mail,
to each record holder of Common Shares as of the close of business on the
Distribution Date, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit B hereto (a
"Right Certificate"), evidencing one Right for each Common Share of the Company
so held. As of the Distribution Date, the Rights will be evidenced solely by
such Right Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit C hereto (the "Summary of Rights"), by first-
class, postage prepaid mail, to each record holder of Common Shares as of the
close of business on the Record Date, at the address of such holder shown on the
records of the Company. With respect to certificates for Common Shares
outstanding as of the Record Date, until the Distribution Date, the Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates and the Summary of Rights. Until the Distribution
Date (or the earlier of the Redemption Date or the Final Expiration Date), the
surrender for transfer of any certificate for Common Shares outstanding on the
Record Date, with
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or without a copy of the Summary of Rights attached thereto, shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the last
sentence of this paragraph (c)) after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the
holder hereof to certain rights as set forth in a
Rights Agreement between BFX Hospitality Group, Inc.
and Continental Stock Transfer & Trust Company,
dated as of February 11, 1999 (the "Rights Agreement"),
the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the
principal executive offices of BFX Hospitality Group, Inc.
Under certain circumstances, as set forth in the
Rights Agreement, the Rights described therein will
be evidenced by separate certificates and will no
longer be evidenced by this certificate. BFX Hospitality
Group, Inc. will mail to the holder of this certificate
a copy of the Rights Agreement without charge after
receipt of a written request therefor. As described
in the Rights Agreement, Rights issued to any Person
who becomes an Acquiring Person (as those terms are
defined in the Rights Agreement) shall become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
In the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that the Company shall not
be entitled to exercise any Rights associated with the Common Shares which are
no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and the
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be in substantially the form of Exhibit B hereto
and may have such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem appropriate
and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed, or to conform to usage. Subject to
the provisions of Section 22 of this Agreement, the Right Certificates shall
entitle the holders thereof to purchase such number of one one-hundredth
interests in a Preferred Share as shall be set forth therein at the price per
one one-hundredth interest in a Preferred Share set forth therein (the "Purchase
Price"), but the amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price shall be subject to adjustment as provided
herein.
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Section 5. Countersignature and Registration. The Right Certificates shall
be executed on behalf of the Company by its Chairman of the Board of Directors,
its President or any Senior Vice President or Vice President, either manually or
by facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Agreement any such person was not such an officer.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
rights evidenced on its face by each of the Right Certificates and the date of
each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the close of business
on the Distribution Date, and at or prior to the close of business on the
earlier of the Redemption Date and the Final Expiration Date, any Right
Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredth
interests in a Preferred Share as the Right Certificate or Right Certificates
surrendered then entitle such holder to purchase. Any registered holder desiring
to transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent
and shall endorse and surrender the Right Certificate or Right Certificates to
be transferred, split up, combined or exchanged at the principal office of the
Rights Agent. Neither the Rights Agent nor the Company shall be obligated to
take any action whatsoever with respect to the transfer of such surrendered
Right Certificate unless and until the registered holder shall have (i)
completed, executed and delivered a certificate contained in the form of
assignment set forth on the reverse side of such Right Certificate 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 or
the Rights Agent shall have reasonably requested. Thereupon, the Rights Agent
shall countersign and deliver to the Person entitled thereto a Right Certificate
or Right Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Right Certificates.
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Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time, subject to the last sentence of Section 23 hereof, after the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly completed and executed, to
the Rights Agent at the principal office of the Rights Agent, together with
payment of the Purchase Price for each one one-hundredth interest in a Preferred
Share as to which the Rights are exercised, at or prior to the earliest of (i)
the close of business on March 8, 2009 (the "Final Expiration Date"), (ii) the
time at which the Rights are redeemed as provided in hereof (the "Redemption
Date"), and (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof.
(b) The Purchase Price for each one one-hundredth interest in a
Preferred Share pursuant to the exercise of a Right shall initially be $7.50,
shall be subject to adjustment from time to time as provided in Section 11 and
Section 13 hereof, and shall be payable in lawful money of the United States of
America in accordance with Section 7(c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased (plus an amount
equal to any applicable transfer tax required to be paid by the holder of such
Right Certificate in accordance with Section 9 hereof) by certified check,
cashier's check or money order payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Shares certificates for the number of Preferred Shares to be
purchased, and the Company hereby irrevocably authorizes and directs its
transfer agent to comply with all such requests, or (B) requisition from the
depositary agent (if one exists as hereinafter contemplated) depositary receipts
representing such number of one one-hundredth interests in a Preferred Share as
are to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent of the
Preferred Shares with the depositary agent), and the Company hereby directs the
depositary agent to comply with all such requests, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof, and, if applicable,
requisition from the Company, or any transfer agent for securities thereof (any
such transfer agent being hereby authorized to comply with all such requests or
both), the number of Common Shares to be issued in lieu of the issuance of
Preferred Shares in accordance with Section 11(a)(ii) hereof or the amount of
cash, property or other securities to be paid or issued in lieu of the issuance
of Common Shares in accordance with Section 11(a)(iii) hereof, (iii) after
receipt of such certificates or
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depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder and (iv) when appropriate in accordance with
Section 11(a)(iii) hereof, after receipt, deliver such cash, property or other
securities to or upon the order of the registered holder of such Right
Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to
such holder's duly authorized assigns, subject to the provisions of Section 14
hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action whatsoever with respect to a purported exercise of any Right as
contemplated by this Section 7 unless and until such registered holder shall
have (i) completed, executed and delivered a certificate contained in the form
of election to purchase set forth on the reverse side of the Right Certificate
surrendered in connection with 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 have reasonably requested.
Section 8. Cancellation and Destruction of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any Right Certificate representing Rights purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Availability of Preferred Shares; Transfer Taxes; Securities
Registration.
(a) The Company covenants and agrees that it will cause to be kept
available out of its authorized and unissued Preferred Shares, the number of
Preferred Shares that will be sufficient to permit the exercise in full of all
outstanding Rights. The Company further covenants and agrees that it will take
all such action as may be necessary to ensure that all Preferred Shares
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such Preferred Shares (subject to payment of the Purchase
Price), be duly authorized and validly issued and fully paid and nonassessable
shares.
(b) The Company covenants and agrees that it will pay when due and
payable any and all federal and state transfer taxes and charges that are
payable in respect of the issuance or delivery of the Right Certificates or of
any Preferred Shares (or other securities which may become or be issuable under
the terms of this Agreement) upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax that may be payable in respect
of any transfer or
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delivery of Right Certificates to a Person other than, or the issuance or
delivery of certificates or depositary receipts for the Preferred Shares (or
other securities that may become or be issuable under the terms of this
Agreement) in a name other than that of, the registered holder of the Right
Certificates evidencing Rights surrendered for transfer, delivery or exercise or
to issue or to deliver any certificates or depositary receipts for Preferred
Shares (or other securities that may become or be issuable under the terms of
this Agreement) upon the exercise of any Rights until any such tax shall have
been paid (any such tax being payable by the holder of such Right Certificates
at the time of surrender) or until it has been established to the Company's
reasonable satisfaction that no such tax is due.
(c) The Company shall (i) prepare and file, as soon as reasonably
possible following the Distribution Date, a registration statement under the
Securities Act with respect to the securities purchasable upon exercise of the
Rights on an appropriate form, (ii) cause such registration statement to become
effective as soon as reasonably possible after such filing, and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until no longer required to do
so under the Securities Act with respect to securities purchasable upon exercise
of the Rights. The Company also shall take all such action as may be required
or as is appropriate under the securities or blue sky laws of such jurisdictions
as may be necessary or appropriate with respect to the securities purchasable
upon the exercise of the Rights.
Section 10. Preferred Shares Record Date. Each Person in whose name any
certificate for Preferred Shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the Preferred Shares transfer books of the Company are closed, such person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares transfer books of the Company are open.
Section 11. Adjustment of Purchase Price, Number of Shares or Number of
Rights. The Purchase Price, the number of Preferred Shares or interests therein
that the holder of a Right Certificate is entitled to purchase on the exercise
of the Rights evidenced thereby, and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding Preferred
Shares, (C) combine the outstanding Preferred Shares into a smaller number
of Preferred Shares or (D) issue any shares of its capital stock in a
reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this , the Purchase Price in effect at the time of the record
date for such dividend or at the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of
capital stock or interests therein issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after
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such time shall be entitled to receive the aggregate number and kind of
shares of capital stock or interests therein which, if such Right had been
exercised immediately prior to such date and at a time when the Preferred
Shares transfer books of the Company were open, such holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification; provided, however,
that in no event shall the consideration to be paid upon the exercise of
one Right be less than the aggregate par value of the shares of capital
stock or interests therein of the Company issuable upon exercisable of one
Right. If an event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for
in this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) Subject to Section 23 and Section 24 of this Agreement,
in the event any Person shall become an Acquiring Person, each holder of a
Right shall thereafter have a right to receive, upon exercise thereof at a
price equal to the then current Purchase Price multiplied by the number of
one one-hundredth interests in a Preferred Share for which a Right is then
exercisable, in accordance with the terms of this Agreement and in lieu of
interests in Preferred Shares, such number of Common Shares as shall equal
the result obtained by (A) multiplying the then current Purchase Price by
the number of one one-hundredth interests in a Preferred Share for which a
Right is then exercisable and dividing that product by (B) 50% of the then
current per share market price of the Company's Common Shares (determined
pursuant to Section 11(d) hereof) on the date such Person became an
Acquiring Person. In the event that any Person shall become an Acquiring
Person and the Rights shall then be outstanding, the Company shall not take
any action that would eliminate or diminish the benefits intended to be
afforded by the Rights. Notwithstanding the foregoing or anything in this
Agreement to the contrary, from and after the time any Person becomes an
Acquiring Person, any Rights that are or were acquired or beneficially
owned by such Acquiring Person (or any Associate or Affiliate of such
Acquiring Person) shall be null and void without any further action by the
Company, the Rights Agent, the Acquiring Person or any other Person, and
any holder of such Rights shall thereafter have no rights whatsoever with
respect to such Rights, whether under this Agreement or otherwise
(including the right to exercise such Rights under any provision of this
Agreement). No Right Certificate shall be issued pursuant to Section that
represents Rights beneficially owned by an Acquiring Person whose Rights
would be null and void pursuant to the preceding sentence or by any
Associate or Affiliate thereof; no Right Certificate shall be issued at any
time upon the transfer of any Rights to an Acquiring Person whose Rights
would be null and void pursuant to the preceding sentence or to any
Associate or Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate; and any Right Certificate delivered to the Rights
Agent for transfer to an Acquiring Person whose Rights would be null and
void pursuant to the preceding sentence shall be canceled.
(iii) In lieu of issuing Common Shares in accordance with
Section 11(a)(ii) hereof, the Company may, if the Board of Directors
determines that such action is necessary or appropriate, elect to issue or
pay, upon the exercise of the Rights, cash, property, Common Shares, shares
of preferred stock, notes, debentures or other securities, or any
combination
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thereof, having an aggregate value equal to the value of the Common Shares
which otherwise would have been issuable pursuant to Section 11(a)(ii)
hereof, which value shall be determined by a nationally recognized
investment banking firm selected by the Board of Directors; provided,
however, that, except as provided in the second and third sentences of
subparagraph (ii) of this paragraph (a), all holders of Rights must receive
the same consideration upon the exercise of a Right. For purposes of this
subparagraph (iii), the value of Common Shares shall be as determined
pursuant to Section 11(d) hereof and the value of any preferred stock or
other securities that the Board of Directors determines to be the
substantial equivalent of Common Shares shall be deemed to have the same
value as the Common Shares of the Company.
(iv) Subject to subparagraph (iii) of this paragraph (a), in
the event that there shall not be sufficient Common Shares issued but not
outstanding or authorized but unissued to permit the exercise in full of
the Rights in accordance with subparagraph (ii) of this paragraph (a), the
Company shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exercise of the Rights or, if
unable to do so, shall take action permitted by subparagraph (iii) of this
paragraph (a) in respect of substitute consideration in order to satisfy
fully its obligations to a holder of Rights exercising such Rights as
contemplated hereby.
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred share
(or having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the then current per
share market price of the Preferred Shares (as defined in Section 11(d)) on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be the
number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible); provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the Preferred Shares issuable upon exercise of one Right.
In case such subscription price may be paid in a consideration part or all of
which shall be in a form other than cash, the value of such consideration shall
be as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent.
Preferred Shares owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustments
shall be made successively whenever such a record date is fixed; and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be
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adjusted to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend paid out of earnings or
retained earnings or a dividend payable in Preferred Shares) or subscription
rights or warrants (excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the then current per share market
price of the Preferred Shares on such record date, less the fair market value
(as determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to one Preferred Share and
the denominator of which shall be such current per share market price of the
Preferred Shares; provided, however, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of
the Preferred Shares issuable upon exercise of one Right. Such adjustments shall
be made successively whenever such a record date is fixed; and in the event that
such distribution is not so made, the Purchase Price shall again be adjusted to
be the Purchase Price which would then be in effect if such record date had not
been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of any security (a "Security") for the
purpose of this Section 11(d)(i) on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately
prior to such date; provided, however, that in the event that the current
per share market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A) a dividend
or distribution on such Security payable in shares of such Security or
securities convertible into such shares, or (B) any subdivision,
combination or reclassification of such Security and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend
or distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price
per share equivalent of such Security taking into account ex-dividend
trading. The closing price for each day shall be the last sale price,
regular way, or, in case no such sale takes place on such day, the average
of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the American Stock
Exchange or, if the Security is not listed or admitted to trading on the
American Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted sales price
or, if not so quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations
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System ("NASDAQ") or such other system then in use or, if on any such date
the Security is not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
making a market in the Securities selected by the Board of Directors of the
Company. The term "Trading Day" shall mean a day on which the principal
national securities exchange on which the Security is listed or admitted to
trading is open for the transaction of business or, if the Security is not
listed or admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be
determined in accordance with the methods set forth in Section 11(d)(i). If
the Preferred Shares are not publicly traded, the "current per share market
price" of the Preferred Shares shall be conclusively deemed to be the
current per share market price of the Common Shares as determined pursuant
to Section 11(d)(i) (appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof),
multiplied by one hundred. If neither the Common Shares nor the Preferred
Shares are publicly held or so listed or traded, and no market maker is
making, or has made during the relevant period, a market in the Common
Shares or the Preferred Shares, "current per share market price" shall mean
the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one one-millionth interest
in a Preferred Share or one ten-thousandth interest in any other share or
security, as the case may be. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction that requires
such adjustment and (ii) the date of the expiration of the right to exercise any
Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
or Section 13(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other than
Preferred Shares or interests therein, thereafter the number of such other
shares so receivable upon exercise of any Right shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as practicable
to the provisions of this with respect to the Preferred Shares, and the
provisions of Section 7, Section 9, Section 10, Section 12, Section 13 and
Section 14 with respect to the Preferred Shares shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredth
interests in a Preferred Share purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
-13-
(h) Unless the Company shall have exercised its election as
provided in Section 11(a), upon each adjustment of the Purchase Price as a
result of the calculations made in and Section 11(b) and Section 11(c), each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of one one-hundredth interests in a Preferred Share (calculated to the
nearest one one-millionth of a Preferred Share) obtained by (i) multiplying (A)
the number of one one-hundredth interests in a Preferred Shares covered by a
Right immediately prior to such adjustment by (B) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price and (ii) dividing the
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredth interests in a Preferred Share
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-hundredth interests in a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election, if any, to
adjust the number of Rights, indicating the record date for the adjustment and,
if known at the time, the amount of the adjustment to be made. Such record date
may be the date on which the Purchase Price is adjusted or any date thereafter,
but, if the Right Certificates have been issued, shall be at least ten days
later than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
and shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredth interests in a Preferred Share issuable upon
the exercise of the Rights, the Right Certificates theretofore and thereafter
issued may continue to express the Purchase Price and the number of one one-
hundredth interests in a Preferred Shares which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the par value, if any, of
the Preferred Shares issuable upon exercise of the Rights, the Company shall
take any corporate action which may, in the opinion of its counsel,
-14-
be necessary in order that the Company may validly and legally issue fully paid
and nonassessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due ▇▇▇▇ or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that the Company in its sole discretion shall determine to be
advisable in order that any consolidation or subdivision of the Preferred
Shares, issuance wholly for cash of any Preferred Shares at less than the
current market price, issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred Shares,
dividends on Preferred Shares payable in Preferred Shares or issuance of rights,
options or warrants referred to in Section 11(b) hereafter made by the Company
to holders of Preferred Shares shall not be taxable to such stockholders.
(n) In the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares, (ii) reclassify the
Common Shares or (iii) otherwise effect a split-up, division or combination of
the Common Shares, then in any such case (i) the number of one one-hundredth
interests in a Preferred Share purchasable after such event upon proper exercise
of each Right shall be determined by multiplying the number of one one-hundredth
interests in a Preferred Share so purchasable immediately prior to such event by
a fraction, the numerator of which shall be the number of Common Shares that
were outstanding immediately before such event and the denominator of which
shall be the number of Common Shares that are outstanding immediately after such
event, and (ii) each Common Share outstanding immediately after such event shall
have issued with respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with respect to it. The
adjustments provided for in this Section 11(n) shall be made successively
whenever any such event occurs.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate in accordance with Section
25 hereof.
-15-
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event, directly or indirectly, (i) the Company shall
consolidate with, or merge with and into, or effect a share exchange or
conversion with or into, any Person, (ii) any Person shall merge with and into
the Company or effect a share exchange or conversion with or into, the Company,
the Company shall be the continuing or surviving corporation in such transaction
and, in connection with such transaction, all or part of the Common Shares shall
be changed into or exchanged for stock or other securities of any other Person
(or the Company) or cash or any other property, or (iii) the Company shall sell
or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one or more transactions, assets or earning power
aggregating 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person or Persons other than the Company
or one or more of its wholly-owned Subsidiaries, then, and in each such case,
proper provision shall be made so that (i) each holder of a Right (except as
otherwise provided herein) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Purchase Price multiplied
by the number of one one-hundredth interests in a Preferred Share for which a
Right is then exercisable, in accordance with the terms of this Agreement and in
lieu of Preferred Shares, such number of duly authorized and validly issued,
fully paid and non-assessable Common Shares of the Principal Party (as defined
in Section 13(b) hereof) as shall equal the result obtained by (A) multiplying
the then current Purchase Price by the number of one one-hundredth interests in
a Preferred Share for which a Right is then exercisable and dividing that
product by (B) 50% of the then current per share market price of the Common
Shares of the Principal Party (determined pursuant to Section 11(d) hereof) on
the date of consummation of such transaction; (ii) the Principal Party shall
thereafter be liable for, and shall assume, by virtue of such transaction, all
the obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company", as used in this Agreement, shall thereafter be deemed to mean
the Principal Party; and (iv) such Principal Party shall take such steps
(including, but not limited to, the authorization by all necessary corporate
action and the reservation of a sufficient number of its Common Shares in
accordance with Section 9 of this Agreement) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
Common Shares of the Principal Party thereafter deliverable upon the exercise of
the Rights. The Company shall not consummate any such transaction unless prior
thereto the Company and the Principal Party shall have executed and delivered to
the Rights Agent a supplemental agreement so providing and further providing
that, immediately after the date of any such transaction mentioned in this
paragraph (a) of this Section 13, the Principal Party at its own expense will
(i) prepare and file a registration statement under the Securities Act with
respect to the Rights and the securities purchasable upon exercise of the Rights
on an appropriate form, will cause such registration statement to become
effective as soon as possible after such filing and will cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until no longer required under the Act with
respect to securities purchasable upon exercise of the Rights; and (ii) qualify
or register the Rights and the securities purchasable upon exercise of the
Rights, and take all such other action as may be required or as is appropriate,
under the securities or blue sky laws of such jurisdictions as may be necessary
or appropriate. The Company shall not enter into any transaction of the kind
referred to in this Section 13 if at the time of such transaction there are any
rights, warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such
-16-
transaction, would eliminate or substantially diminish the benefits intended to
be afforded by the Rights. The provisions of this Section 13 shall similarly
apply to successive mergers, consolidations, exchanges, conversions, sales or
other transfers.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (i)
or (ii) of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which Common Shares are converted in such
merger or consolidation, and if no securities are so issued, the Person
that is the other party to the merger or consolidation; and
(ii) in the case of any transaction described in clause (iii)
of the first sentence in Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the securities of such Person
are not at such time or have not been continuously over the preceding 12-month
period registered under Section 12 of the Exchange Act, and such Person is a
direct or indirect Subsidiary of another Person the securities of which are and
have been so registered, "Principal Party" shall mean such other Person; (2) in
case such Person is a Subsidiary, directly or indirectly, of more than one
other Person, the securities of two or more of which are and have been so
registered, "Principal Party" shall mean whichever of such other Persons is the
issuer of the securities so registered having the greatest aggregate market
value; and (3) in case such Person is owned, directly or indirectly, by a joint
venture formed by two or more other Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in (1) and (2) above shall
apply to each of the chains of ownership having an interest in such joint
venture as if such Person were a "Subsidiary" of both or all of such other
Persons and the Principal Parties in each such chain shall bear the obligations
set forth in this Section 13 in the same ratio as their direct and indirect
interests in such Person bear to the total of such interests.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the current market
value of a whole Right shall be the closing price of the Rights for the Trading
Day immediately prior to the date on which such fractional Rights would
otherwise be issuable. The closing price for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the American Stock Exchange or,
if the Rights are not listed or admitted to trading on the American Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not
-17-
so quoted, the average of the high bid and low asked prices in the over-the-
counter market, as reported by NASDAQ or such other system then in use or, if on
any such date the Rights are not quoted by any such organization, the average of
the closing bid and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors of the Company.
If on any such date no such market maker is making a market in the Rights, the
fair value of the Rights on such date as determined in good faith by the Board
of Directors of the Company shall be used to determine the current market value
of a Right for purposes of this Section 14(a). Notwithstanding anything in this
Section 14(a) to the contrary, prior to the Distribution Date, the current
market value of the Right for purposes of this Section 14(a) shall be deemed to
be zero.
(b) The Company shall not be required to issue fractional interests
in Preferred Shares (other than fractional interests which are integral
multiples of one one-hundredth of a Preferred Share) upon exercise of the Rights
or to distribute certificates which evidence fractional interests in Preferred
Shares (other than fractional interests which are integral multiples of one one-
hundredth of a Preferred Share). Fractional interests in Preferred Shares in
integral multiples of one one-hundredth of a Preferred Share may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it;
provided, however, that such agreement shall provide that holders of such
depositary receipts shall have all the rights, privileges and preferences to
which they are entitled as beneficial owners of the Preferred Shares represented
by such depositary receipts. In lieu of fractional interests in Preferred Shares
that are not integral multiples of one one-hundredth of a Preferred Share, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one Preferred Share. For purposes of
this Section 14(b), the current market value of a Preferred Share shall be the
closing price of a Preferred Share (as determined pursuant to the second
sentence of Section 11(d) hereof) for the Trading Day immediately prior to the
date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 and 20 hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered holders
of the Common Shares of the Company); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares of the
Company), without the consent of the Rights Agent or of the holder of any other
Right Certificate (or, prior to the Distribution Date, of the Common Shares of
the Company), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise the
Rights evidenced by such Right Certificate in the manner provided in such Right
Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive
-18-
relief against actual or threatened violations of the obligations of any Person
subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares of the Company;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the Person
in whose name any Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a Stockholder. Prior to the
exercise of the Rights evidenced thereby, no holder, as such, of any Right
Certificate shall be entitled to vote or receive dividends or be deemed for any
purpose the holder of the Preferred Shares or interests therein or any other
securities of the Company which may at any time be issuable on the exercise of
the Rights evidenced thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings, proceedings or other actions
affecting stockholders (except as provided in Section 25 hereof), or to receive
dividends or subscription rights, or to exercise any pre-emptive rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
-19-
The Rights Agent shall be protected and shall incur no liability for, or
in respect of any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
certificate for the Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights Agent. Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the stock transfer or
corporate trust business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for appointment
as a successor Rights Agent under the provisions of Section 21 hereof. In case,
at the time such successor Rights Agent shall succeed to the agency created by
this Agreement, any of the Right Certificates shall have been countersigned but
not delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned, and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless
-20-
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 of Directors, President, any Senior Vice
President or Vice President, the Secretary or the Treasurer of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for the Rights Agent's own negligence, bad faith or willful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including any Rights that become void pursuant to Section 11(a)(ii) hereof) or
any adjustment in the terms of the Rights (including the manner, method or
amount thereof) provided for in Section 3, Section 11, Section 13, Section 23 or
24 hereof, or the ascertaining of the existence of facts that would require any
such change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such change or
adjustment is required); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares to be issued pursuant to this Agreement or any Right
Certificate or as to whether any Preferred Shares will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board of Directors, President, any Senior Vice
President or Vice President, the Secretary or the Treasurer of the Company, and
to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken or suffered by it in
good faith in accordance with instructions of any such officer or for any delay
in acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with
-21-
or lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company (including,
without limitation, acting as transfer agent for the Common Shares of the
Company) or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares or Preferred Shares by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of the States of New York or Texas (or of any other state of the United States
so long as such corporation is authorized to do business as a banking
institution in the State of New York or the State of Texas), in good standing,
which is authorized under such laws to exercise corporate trust or stock
transfer powers and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by the predecessor
Rights Agent hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares
or Preferred Shares, and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this , 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.
-22-
Section 22. Issuance of New Right Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement.
Section 23. Redemption.
(a) The Rights may be redeemed by action of the Board of Directors
of the Company pursuant to Section 23(b) and shall not be redeemed in any other
manner. Notwithstanding anything contained or implied in this Agreement to the
contrary, the Rights shall not be exercisable after the occurrence of an event
described in Section 11(a)(ii) hereof until such time as the Company's rights of
redemption hereunder have expired.
(b) The Board of Directors of the Company may, at its option, at
any time prior to the close of business on the tenth Business Day after the
Shares Acquisition Date, redeem all, but not less than all, the then outstanding
Rights at a redemption price of $.01 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter referred to as the
"Redemption Price")
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to Section 23(b) and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. The Company shall promptly give public
notice of any such redemption; provided, however, that the failure to give, or
any defect in, any such notice shall not affect the validity of such redemption.
Within ten days after such action of the Board of Directors ordering the
redemption of the Rights pursuant to Section 23(b) the Company shall mail a
notice of redemption to all the holders of the then outstanding Rights at their
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares of the Company. Any notice that is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23 or in
Section 24 hereof, and other than in connection with the purchase of Common
Shares prior to the Distribution Date.
Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option, at
any time after any Person becomes an Acquiring Person, exchange all or any part
of the then outstanding and exercisable Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 11(a)(ii) hereof)
for Common Shares at an exchange ratio of one Common Share of the Company per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar
-23-
transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 24(a) and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of Common Shares equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company shall promptly mail a notice of any such exchange to
all of the holders of such Rights at their addresses as they appear upon the
registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the exchange
of the Common Shares for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section
11(a)(ii)hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute interests in Preferred Shares (or equivalent
preferred shares, as such term is defined in Section 11(b) hereof) for Common
Shares exchangeable for Rights, at the initial rate of one one-hundredth
interest in a Preferred Share (or equivalent preferred share) for each Common
Share, as appropriately adjusted to reflect adjustments in the voting rights of
the Preferred Shares pursuant to Section 3 of the Certificate of Designation,
Powers, Preferences and Rights attached hereto as Exhibit A, so that the
fraction of a Preferred Share delivered in lieu of each Common Share shall have
the same voting rights as one Common Share.
(d) In the event that there shall not be sufficient Common Shares
or Preferred Shares issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with this Section
24, the Company shall take all such action as may be necessary to authorize
additional Common Shares or Preferred Shares for issuance upon exchange of the
Rights. In the event that the Company, after good faith effort, shall be unable
to take shall such action as may be necessary to authorize such additional
Common Shares or Preferred Shares, the Company shall substitute, for each Common
Share or Preferred Share that would otherwise be issuable upon exchange of a
Right, a number of Common Shares, Preferred Shares or shares of preferred stock,
notes, debentures or other securities, or any combination thereof, having an
aggregate value equal to the Rights to be exchanged, which value shall be
determined by a nationally recognized investment banking firm selected by the
Board of Directors.
(e) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
Section 24(e), the current market value of a whole Common Share of the Company
shall be the
-24-
closing price of a Common Share of the Company (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend
payable in stock of any class to the holders of Preferred Shares or to make any
other distribution to the holders of Preferred Shares (other than a regular
quarterly cash dividend), (ii) to offer to the holders of Preferred Shares
rights (preemptive or otherwise) or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, (iii) to effect any reclassification of Preferred
Shares (other than a reclassification involving only the subdivision of
outstanding Preferred Shares), (iv) to effect any consolidation or merger into
or with, or to effect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of 50% or more of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to declare or pay
any dividend on the Common Shares payable in Common Shares, to reclassify the
Common Shares, or to otherwise effect a split-up, division or combination of the
Common Shares, then, in each such case, the Company shall give to each holder of
a Right Certificate, in accordance with Section 26 hereof, a notice of such
proposed action, which shall specify the record date for purposes of such stock
dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
described by clause (i) or (ii) above at least ten days prior to the record date
for determining holders of the Preferred Shares for purposes of such action, and
in the case of any such other action, at least ten days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Shares and/or Preferred Shares, whichever shall be the
earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe the event and the
consequences of the event to holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
-25-
BFX Hospitality Group, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Continental Stock Transfer & Trust Company
▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company may (and the Rights
Agent shall at the direction of the Company) from time to time supplement or
amend this Agreement without the approval of any holders of Right Certificates
in order (i) at any time, to cure any ambiguity, (ii) at any time, to amend,
correct or supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) prior to the Distribution
Date, to change or supplement any of the provisions hereof in any manner which
the Company may deem necessary or desirable (including, but without any
limitation, changing the percentage of ownership of Common Shares at which a
Person becomes an Acquiring Person, the Distribution Date, the time for
redemption of Rights or the time for, or limits on, amendment of this Agreement)
or (iv) after the Distribution Date, to change or supplement the provisions
hereof in any manner which the Company may deem necessary or desirable and which
shall not adversely affect the interests of the holders of the Rights
Certificates (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person), any such supplement or amendment to be evidenced by a writing
signed by the Company and the Rights Agent.
Section 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares of the Company) any legal or equitable right, remedy or
claim under this Agreement; and this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares
of the Company).
-26-
Section 30. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number of
counterparts, each of such counterparts shall for all purposes be deemed to be
an original, and all such counterparts shall together constitute but one and the
same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
Section 34. Determinations and Actions by the Board of Directors. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors of the Company or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) that are done or made by the Board
of Directors of the Company in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other Persons, and (z) not subject the Board of Directors of the Company to any
liability to the holders of the Rights.
-27-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
BFX HOSPITALITY GROUP, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman of the Board,
President and Chief Executive Officer
CONTINENTAL STOCK TRANSFER &
TRUST COMPANY
By /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Vice President
-28-
EXHIBIT A
CERTIFICATE OF DESIGNATION, POWERS,
PREFERENCES AND RIGHTS
of
SERIES B JUNIOR PREFERRED STOCK
of
BFX HOSPITALITY GROUP, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
The undersigned, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman of the Board, President and
Chief Executive Officer of BFX Hospitality Group, Inc., a Delaware corporation
(the "Company"), hereby certifies that pursuant to authority granted to and
vested in the Board of Directors of the Company by the provisions of the
Certificate of Incorporation of the Company, the Board of Directors of the
Company has duly adopted the following resolutions creating a series of
Preferred Stock designated as the Series B Junior Preferred Stock:
"RESOLVED, that pursuant to Article IV of the Certificate of Incorporation
of BFX Hospitality Group, Inc., a Delaware corporation (the "Corporation"),
which (a) authorizes the Corporation to issue 5,000,000 shares of Preferred
Stock, par value $.01 per share ("Preferred Stock"), none of which are issued
and outstanding at the date hereof, and (b) expressly vests in the Board of
Directors of the Corporation (the "Board"), subject to the limitations
prescribed by law and the provisions of said Article IV, the authority to
provide by resolution or resolutions for the issuance of shares of Preferred
Stock in series and, by filing a certificate pursuant to the General Corporation
Law of the State of Delaware, to establish from time to time the number of
shares to be included in each of such series and to fix the designation, powers,
preferences and rights of the shares of each of such series, or of particular
holders thereof, the Board hereby fixes the powers, preferences and rights of
the shares of a series of Preferred Stock and the qualifications, limitations
and restrictions thereof, as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated "Series B Junior Preferred Stock", and the number of shares
constituting the Series B Junior Preferred Stock shall initially be 100,000.
The number of shares of Series B Junior Preferred Stock may be increased or
decreased from time to time by resolution of the Board, provided that no such
decrease shall reduce the number of shares of Series B Junior Preferred Stock to
less than the sum of (a) the number of shares of Series B Junior Preferred Stock
then outstanding, (b) the number of shares of Series B Junior Preferred Stock
that the Corporation is obligated to issue upon the exercise of then outstanding
rights, options or warrants and (c) the number of shares of Series B Junior
Preferred Stock that the Corporation is obligated to issue upon the conversion
of then outstanding convertible securities.
Section 2. Dividends and Distributions.
(a) Subject to the rights of holders of shares of any series of Preferred
Stock that ranks prior to the Series B Junior Preferred Stock with respect to
dividends, the holders of shares of Series B Junior Preferred Stock, in
preference to the rights of holders of shares of Common Stock, par value $.05
per share ("Common Stock"), of the Corporation with respect to dividends, and in
preference to the rights of holders of shares of any series of Preferred Stock
that ranks junior to the Series B Junior Preferred Stock with respect to
dividends, shall be entitled to receive, when, as and if declared by the Board
out of funds legally available for that purpose, quarterly dividends, which
shall be payable in cash except as hereinafter provided, on the first day of
January, April, July and October in each year during which a share or fraction
of a share of Series B Junior Preferred Stock is outstanding (each such date
being referred to herein as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the first issuance of a share or
fraction of a share of Series B Junior Preferred Stock, each such dividend to be
in an amount per share (rounded to the nearest cent) equal to:
(i) subject to the provision for adjustment set forth in the next
succeeding sentence,
(A) 100 times the aggregate per share amount of all cash dividends
declared on the Common Stock after the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, after the first issuance of any share or fraction of a
share of Series B Junior Preferred Stock, plus
(B) 100 times the aggregate per share amount, which shall be payable
in kind, of all non-cash dividends or other distributions (other than
(x) a dividend on the Common Stock that is payable in shares of Common
Stock or (y) a distribution solely on account of a reclassification
of, or other split-up, division or combination of shares of, Common
Stock) declared on the Common Stock after the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first
Quarterly Dividend Payment Date, after the first issuance of any share
or fraction of a share of Series B Junior Preferred Stock; or
(ii) if no dividend or other distribution (other than (x) a dividend on
the Common Stock that is payable in shares of Common Stock or (y) a
distribution solely on account of a reclassification of, or other split-up,
division or combination of shares of, Common Stock) shall have been
declared on the Common Stock after the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, after the first issuance of any share or fraction of a share
of Series B Junior Preferred Stock, $1.00.
In the event that the Corporation shall at any time after March 8, 1999, (1)
declare a dividend on the Common Stock that is payable in shares of Common
Stock, (2) reclassify the Common Stock or
-2-
(3) otherwise effect a split-up, division or combination of shares of Common
Stock, then in each such case the amount per share to which holders of shares of
Series B Junior Preferred Stock were entitled immediately prior to such event
under Section 2(a)(i) shall be adjusted by multiplying such amount by a
fraction, the numerator of which shall be the number of shares of Common Stock
that are outstanding immediately after such event and the denominator of which
shall be the number of shares of Common Stock that were outstanding immediately
prior to such event.
(b) Immediately after the Board declares a dividend or other distribution
on the Common Stock (other than (x) a dividend on the Common Stock that is
payable in shares of Common Stock or (y) a distribution solely on account of a
reclassification of, or other split-up, division or combination of shares of,
Common Stock), if any share or fraction of a share of Series B Junior Preferred
Stock is then outstanding, the Board shall declare a dividend on the Series B
Junior Preferred Stock, which shall be payable at the time and in the amount
provided in Section 2(a). If (i) any share or fraction of a share of Series B
Junior Preferred stock is then outstanding, (ii) no dividend or other
distribution (other than (x) a dividend on the Common Stock that is payable in
shares of Common Stock or (y) a distribution solely on account of a
reclassification of, or other split-up, division or combination of shares of,
Common Stock) shall have been declared on the Common Stock during the period
between the immediately preceding Quarterly Dividend Payment Date and the next
succeeding Quarterly Dividend Payment Date or, with respect to the first
Quarterly Dividend Payment Date, between the date of the first issuance of any
share or fraction of a share of Series B Junior Preferred Stock and such first
Quarterly Dividend Payment Date, and (iii) there are funds legally available for
the payment of a dividend on the Series B Junior Preferred Stock, the Board
shall, at any time prior to such next succeeding Quarterly Dividend Payment Date
or such first Quarterly Dividend Payment Date, as the case may be, declare a
dividend of $1.00 per share on the Series B Junior Preferred Stock, which shall
be payable on such next succeeding Quarterly Dividend Payment Date or such first
Quarterly Dividend Payment Date, as the case may be.
(c) Dividends on shares of Series B Junior Preferred Stock shall begin to
accrue and be cumulative from the Quarterly Dividend Payment Date that
immediately precedes the date of issuance of such shares unless (i) the date of
issuance of such shares is prior to the record date for the determination of
holders of shares of Series B Junior Preferred Stock entitled to receive a
dividend on the first Quarterly Dividend Payment Date, in which event dividends
on such shares shall begin to accrue and be cumulative from the date of issuance
of such shares, (ii) the date of issuance of such shares is a Quarterly Dividend
Payment Date, in which event dividends on such shares shall begin to accrue and
be cumulative from such Quarterly Dividend Payment Date, or (iii) the date of
issuance of such shares is a date after the record date for the determination of
holders of shares of Series B Junior Preferred Stock entitled to receive a
dividend on the Quarterly Dividend Payment Date that next succeeds the date of
issuance of such shares, in which event dividends on such shares shall begin to
accrue and be cumulative from such next succeeding Quarterly Dividend Payment
Date. Accrued but unpaid dividends on shares of Series B Junior Preferred Stock
shall not bear interest. If a dividend is declared on the Series B Junior
Preferred Stock and the total amount of that dividend is less than the total
amount of all dividends accrued and payable on all shares of Series B Junior
Preferred Stock at the time of payment of that dividend, then the portion of the
total amount of that dividend to be allocated to each of such shares shall be
determined by multiplying the total amount of that dividend by a fraction, the
numerator of which shall be the total amount of all dividends accrued and
payable on that share at that time and the denominator of which shall be the
total amount
-3-
of all dividends accrued and payable on all such shares at that time. The Board
may fix a record date for the determination of holders of shares of Series B
Junior Preferred Stock entitled to receive a dividend or other distribution on
the Series B Junior Preferred Stock, which record date shall be no more than 30
days prior to the date fixed for the payment of that dividend or other
distribution.
(d) If at any time (i) any holder of shares of Series B Junior Preferred
Stock would have been entitled under the foregoing provisions of this Section 2
to have received by that time a dividend on such shares, assuming that such
dividend had been declared, out of funds legally available for that purpose, at
the time and in the amount provided in the foregoing provisions of this Section
2, and (ii) such dividend or any part thereof has not been paid to such holder,
then such dividend or part thereof shall be considered accrued and payable at
that time.
Section 3. Voting.
(a) Subject to the provision for adjustment set forth in the next
succeeding sentence, each share of Series B Junior Preferred Stock shall, except
as otherwise provided by law, entitle the holder thereof to 100 votes on each
matter that is submitted to a vote of stockholders of the Corporation. In the
event that the Corporation shall at any time after March 8, 1999, (i) declare a
dividend on the Common Stock that is payable in shares of Common Stock, (ii)
reclassify the Common Stock or (iii) otherwise effect a split-up, division or
combination of shares of Common Stock, then in each such case the number of
votes per share to which holders of shares of Series B Junior Preferred Stock
were entitled immediately prior to such event shall be adjusted by multiplying
such number by a fraction, the numerator of which shall be the number of shares
of Common Stock that are outstanding immediately after such event and the
denominator of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
(b) Except as otherwise provided by law or in the Restated Certificate of
Incorporation of the Corporation or the resolution or resolutions of the Board
providing for the issuance of shares of Preferred Stock (including but not
limited to these resolutions):
(i) the holders of shares of Series B Junior Preferred Stock, the
holders of shares of Common Stock and the holders of shares of any other
class or series of capital stock of the Corporation having general voting
rights shall vote together as a single class on each matter that is
submitted to a vote of stockholders of the Corporation, and
(ii) the holders of shares of Series B Junior Preferred Stock shall not
have any special voting rights.
Section 4. Certain Restrictions. Unless and until all dividends at the
time accrued and payable on all shares of Series B Junior Preferred Stock have
been paid in full, the Corporation shall not:
(a) declare or pay any dividend, or make any other distribution, on
any class or series of capital stock of the Corporation that ranks junior,
either with respect to dividends or upon liquidation, dissolution or
winding up, to the Series B Junior Preferred Stock (any such class or
series being referred to herein as "Junior Stock");
-4-
(b) declare or pay any dividend, or make any other distribution, on
any class or series of capital stock of the Corporation that ranks in
parity, either with respect to dividends or upon liquidation, dissolution
or winding up, with the Series B Junior Preferred Stock (any such class or
series being referred to herein as "Parity Stock"), except dividends that
are paid ratably on all shares of Series B Junior Preferred Stock on which
dividends are at the time accrued and payable and all shares of Parity
Stock on which dividends are at the time accrued and payable in proportion
to the total amounts of dividends at the time accrued and payable on all
such shares;
(c) redeem, purchase or otherwise acquire for consideration any
shares of Junior Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of Junior Stock in exchange
for shares of other Junior Stock; or
(d) redeem, purchase or otherwise acquire for consideration any
shares of Series B Junior Preferred Stock or any shares of Parity Stock,
except in accordance with an offer to purchase made in writing to all
holders of such shares upon terms that the Board, after considering the
relative rights and preferences of the respective series and classes of
such shares, considers in good faith will result in fair and equitable
treatment among the holders of such shares.
Section 5. Reacquired Shares. Any shares of Series B Junior Preferred
Stock that are purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. Upon their cancellation, all of such shares shall become authorized
but unissued shares of Preferred Stock and thereafter may be issued as part of
another series of Preferred Stock, subject to the rights of holders (if any) of
shares of Series B Junior Preferred Stock set forth in these resolutions.
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation:
(a) no distribution shall be made to the holders of shares of
Junior Stock unless, prior to such distribution, the Corporation shall have
paid to each holder of shares of Series B Junior Preferred Stock the sum of
(i) $100 per share of Series B Junior Preferred Stock held by such holder
(such amount per share being referred to herein as the "Preference Amount")
plus (ii) the total amount of all dividends at the time accrued and payable
on all shares of Series B Junior Preferred Stock held by such holder;
(b) no distribution shall be made to the holders of shares of
Parity Stock, except distributions that are made ratably on both all shares
of Series B Junior Preferred Stock and all shares of 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; and
(c) each holder of shares of Series B Junior Preferred Stock shall
be entitled to receive the sum of (i) the total amount of all dividends at
the time accrued and payable on all shares of Series B Junior Preferred
Stock held by such holder plus (ii) an aggregate amount per share (such
amount per share being referred to herein as the "Distributable Amount"),
-5-
inclusive of the Preference Amount but subject to the provision for
adjustment set forth in the next succeeding sentence, of Series B Junior
Preferred Stock held by such holder that is equal to 100 times the
aggregate per share amount to be distributed to holders of shares of Common
Stock upon such liquidation, dissolution or winding up.
In the event that the Corporation shall at any time after March 8, 1999, (1)
declare a dividend on the Common Stock that is payable in shares of Common
Stock, (2) reclassify the Common Stock or (3) otherwise effect a split-up,
division or combination of shares of Common Stock, then in each such case the
Distributable Amount to which a holder of shares of Series B Junior Preferred
Stock was entitled immediately prior to such event shall be adjusted by
multiplying such Distributable Amount by a fraction, the numerator of which
shall be the number of shares of Common Stock that are outstanding immediately
after such event and the denominator of which shall be the number of shares of
Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. If the Corporation shall enter
into any consolidation, merger, share exchange or other transaction in which all
outstanding shares of Common Stock are exchanged for or changed into other
securities, cash, other property or any combination thereof, then each
outstanding share of Series B Junior Preferred Stock shall at the same time be
similarly exchanged for or changed into an amount per share, subject to the
provision for adjustment set forth in the next succeeding sentence, equal to 100
times the aggregate amount of securities, cash and other property for which each
outstanding share of Common Stock is exchanged or into which each outstanding
share of Common Stock is changed. In the event that the Corporation shall at
any time after March 8, 1999, (1) declare a dividend on the Common Stock that is
payable in shares of Common Stock, (2) reclassify the Common Stock or (3)
otherwise effect a split-up, division or combination of shares of Common Stock,
then in each such case the amount per share for which Series B Junior Preferred
Stock would be exchanged, or into the amount which Series B Junior Preferred
Stock would be changed, immediately prior to such event under the immediately
preceding sentence of this Section 7, shall be adjusted by multiplying such
amount by a fraction, the numerator of which shall be the number of shares of
Common Stock that are outstanding immediately after such event and the
denominator of which shall be the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. Redemption. The shares of Series B Junior Preferred Stock
shall not be redeemable.
Section 9. Ranking. The Series B Junior Preferred Stock shall rank junior
to each other series of Preferred Stock, both with respect to dividends and upon
liquidation, dissolution or winding up, unless the certificate of designation,
powers, preferences and rights of such other series of Preferred Stock shall
provide otherwise.
Section 10. Amendment. If any share or fraction of a share of Series B
Junior Preferred Stock is outstanding, neither the Restated Certificate of
Incorporation of the Corporation nor the resolution or resolutions of the Board
providing for the issuance of shares of Preferred Stock (including but not
limited to these resolutions) shall be amended in any manner that would
materially alter or change the powers, preferences or rights of holders of
shares of Series B Junior Preferred Stock so as to affect such holders adversely
unless that amendment shall have received the affirmative
-6-
vote of the holders of a majority of the outstanding shares of Series B Junior
Preferred Stock voting separately as a class. Notwithstanding the foregoing
provisions of this Section 10, whether or not a share or a fraction of a share
of Series B Junior Preferred Stock is outstanding, (a) the Board may from time
to time provide by resolution or resolutions for the issuance of shares of
Preferred Stock of one or more series that rank prior to the Series B Junior
Preferred Stock, either with respect to dividends or upon liquidation,
dissolution or winding up, or both with respect to dividends and upon
liquidation, dissolution or winding up, and (b) no vote or consent of any holder
of shares of Series B Junior Preferred Stock shall be required either as a
condition to the adoption of such resolution or resolutions or as a condition to
the issuance of such shares of Preferred Stock.
Section 11. Fractional Shares. Series B Junior Preferred Stock may be
issued in fractions of a share. Each holder of a fraction of a share of Series
B Junior Preferred Stock shall be entitled to exercise voting rights, to receive
dividends and other distributions, and to have all other rights of the holders
of whole shares of Series B Junior Preferred Stock in proportion to the fraction
of a share of Series B Junior Preferred Stock held by that holder.
RESOLVED FURTHER, that the proper officers of the Corporation be, and each
of them hereby is, authorized to execute a Certificate of Designation, Powers,
Preferences and Rights of Series B Junior Preferred Stock of the Corporation
pursuant to Section 151 of the General Corporation Law of the State of Delaware
and to take all appropriate action to cause that Certificate to be filed,
recorded and become effective in accordance with Section 103 of the General
Corporation Law of the State of Delaware."
IN WITNESS WHEREOF, this Certificate has been executed this __th day of
March, 1999.
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman of the Board, President
and Chief Executive Officer
-7-
EXHIBIT B
FORM OF RIGHT CERTIFICATE
Certificate No. R ______Rights
NOT EXERCISABLE AFTER MARCH 8, 2009, OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.01 PER RIGHT AND TO
EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
BFX Hospitality Group, 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 February 11, 1999 (the "Rights
Agreement"), between BFX Hospitality Group, Inc., a Delaware corporation (the
"Company"), and Continental Stock Transfer & Trust Company (the "Rights Agent"),
to purchase from the Company at any time after the Distribution Date (as such
term is defined in the Rights Agreement) and prior to the close of business (as
defined in the Rights Agreement) on March 8, 2009, at the principal offices of
the Rights Agent, or at the offices of its successor as Rights Agent, one one-
hundredth interest in one share of Series B Junior Preferred Stock, par value
$.01 per share (the "Preferred Shares"), of the Company, at a purchase price of
$7.50 per one one-hundredth interest in a Preferred Share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase duly executed. The number of Rights evidenced by this
Right Certificate (and the number of one one-hundredth interests in a Preferred
Share which may be purchased upon exercise hereof) set forth above, and the
Purchase Price set forth above, are the number and Purchase Price as of March 8,
1999, based on the Preferred Shares as constituted at such date. As provided in
the Rights Agreement, the Purchase Price and the number of one one-hundredth
interests in a Preferred Share which may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
interests in Preferred Shares as the Rights evidenced by the Right Certificate
or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Right Certificate or Right Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$.01 per Right payable in cash, Preferred Shares or other consideration or (ii)
may be exchanged in whole or in part for Preferred Shares or shares of the
Company's Common Stock, par value $.05 per share.
No fractional interests in Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractional
interests which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts), but in lieu thereof a cash payment will be made, as provided in the
Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings,
proceedings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Right Certificate shall have been
exercised in accordance with the provisions of the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of______________________________, _____.
BFX HOSPITALITY GROUP, INC.
By ___________________________________
Countersigned: CONTINENTAL STOCK TRANSFER &
TRUST COMPANY
By ___________________________________
Authorized Signature
B-2
FORM OF REVERSE SIDE OF RIGHT CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _____________________________ hereby sells,
assigns and transfers unto
--------------------------------------------------------------------------------
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ___________________________
Attorney, to transfer the within Right Certificate on the books of the within-
named Company, with full power of substitution.
Dated: ______________________, ______.
----------------------------------
Signature
Signature Guarantee:
Signatures must be guaranteed by an "eligible guarantor institution" (such
as a bank, stockbroker, credit union or savings association) pursuant to Rule
17Ad-15 of the Rules and Regulations of the Securities Exchange Act of 1934.
================================================================================
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and that after due
inquiry and to the best of the knowledge of the undersigned, it did not acquire
the Rights evidenced by this Rights Certificate for any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or Associate of such
Person.
----------------------------------
Signature
================================================================================
B-3
FORM OF REVERSE SIDE OF RIGHT CERTIFICATE -- CONTINUED
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate.)
To: BFX Hospitality Group, Inc.
The undersigned hereby irrevocably elects to exercise _______ Rights
represented by this Right Certificate to purchase the interests in Preferred
Shares issuable upon the exercise of such Rights and requests that certificates
for such interests in Preferred Shares be issued in the name of:
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
(Please insert social security or other identifying number)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
(Please insert social security or other identifying number)
Dated: ___________________, ______.
------------------------------
Signature
Signature Guarantee:
Signatures must be guaranteed by an "eligible guarantor institution" (such
as a bank, stockbroker, credit union or savings association) pursuant to Rule
17Ad-15 of the Rules and Regulations of the Securities Exchange Act of 1934.
B-4
FORM OF REVERSE SIDE OF RIGHT CERTIFICATE -- CONTINUED
--------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and that after due
inquiry and to the best of the knowledge of the undersigned, it did not acquire
the Rights evidenced by this Rights Certificate for any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or Associate of such
Person.
------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of Assignment or
the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
B-5
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
On February 11, 1999, the Board of Directors of BFX Hospitality Group, Inc.
(the "Company") declared a dividend of one Preferred Share purchase right (a
"Right") for each outstanding share of common stock, par value $.05 per share
(the "Common Shares"), of the Company and authorized the issuance of one Right
for each Common Share which shall become outstanding between the Record Date and
the earlier of the Distribution Date (as hereinafter defined) or the final
expiration date of the Rights. The dividend is payable on March 8, 1999 (the
"Record Date") to the stockholders of record on that date. Each Right entitles
the registered holder to purchase from the Company one share of Series B Junior
Preferred Stock, par value $ .01 per share (the "Preferred Shares"), of the
Company at a price of $7.50 per one one-hundredth interest in a Preferred Share
(the "Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between the
Company and Continental Stock Transfer & Trust Company, as Rights Agent (the
"Rights Agent").
Until the earlier to occur of (i) ten business days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 15% or more of the
outstanding Common Shares and (ii) ten business days following the commencement
of, or announcement of an intention to make, a tender offer or exchange offer
the consummation of which would result in the beneficial ownership by a person
or group of 15% or more of such outstanding Common Shares (the earlier of such
dates being called the "Distribution Date"), the Rights will be evidenced, with
respect to any Common Share certificate outstanding as of the Record Date, by
such Common Share certificate. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the Common
Shares. Certain persons, including the Company, any subsidiary of the Company,
Company benefit plan related holders and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and his affiliates,
are excluded from the definition of Acquiring Person.
Until the Distribution Date (or earlier redemption, exchange or expiration
of the Rights), new Common Share certificates issued after the Record Date, upon
transfer or new issuance of Common Shares will contain a notation incorporating
the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption, exchange or expiration
of the Rights), the surrender for transfer of any certificates for Common Shares
outstanding as of the Record Date also will constitute the transfer of the
Rights associated with the Common Shares represented by such certificate. As
soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Common Shares as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on March 8, 2009 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
The Purchase Price payable, and the number of interests in Preferred Shares
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights, options or warrants to subscribe for or purchase Preferred
Shares at a price, or securities convertible into Preferred Shares with a
conversion price, less than the then current market price of the Preferred
Shares or (iii) upon the distribution to holders of the Preferred Shares of
evidences of indebtedness or assets (excluding regular periodic cash dividends
paid out of earnings or retained earnings or dividends payable in Preferred
Shares) or of subscription rights or warrants (other than those referred to
above).
The number of outstanding Rights and the number of one one-hundredth
interests in a Preferred Share issuable upon exercise of each Right are also
subject to adjustment in the event of a stock split of the Preferred Shares or a
stock dividend on the Preferred Shares payable in Preferred Shares or
subdivisions, consolidations or combinations of the Preferred Shares occurring,
in any such case, prior to the Distribution Date.
Interests in Preferred Shares purchasable upon exercise of the Rights will
not be redeemable. Each Preferred Share will be entitled to a minimum
preferential quarterly dividend payment of $1 per share but will be entitled to
an aggregate dividend of 100 times the dividend declared per Common Share. In
the event of a liquidation, the holders of the interests in Preferred Shares
will be entitled to a minimum preferential liquidation payment of $100 per share
but will be entitled to an aggregate payment of 100 times the payment made per
Common Share. Each Preferred Share will have 100 votes, voting together with
the Common Shares. Finally, in the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share will be
entitled to receive 100 times the amount received per Common Share. These
rights are protected by customary antidilution provisions.
Because of the nature of the Preferred Shares' dividend, liquidation and
voting rights, the value of the one one-hundredth interest in a Preferred Share
purchasable upon exercise of each Right should approximate the value of one
Common Share.
In the event the Company is, in effect, acquired in a merger or other
business combination transaction or 50% or more of its consolidated assets or
earning power is sold, proper provision will be made so that each holder of a
Right will thereafter generally have the right to receive, upon the exercise
thereof at the then current exercise price of the Right, that number of shares
of common stock of the acquiring company which at the time of such transaction
will have a market value of two times the exercise price of the Right. In the
event any person becomes an Acquiring Person, proper provision shall be made so
that each holder of a Right, other than Rights beneficially owned by the
Acquiring Person (which will thereafter be null and void for all purposes of the
Rights Agreement and the holder thereof shall thereafter have no rights with
respect to such Rights, whether under the Rights Agreement or otherwise), will
thereafter have the right to receive upon exercise that number of Common Shares
having a market value of two times the exercise price of the Right. Under some
circumstances, in lieu of Common Shares, other equity and debt securities,
property, cash or combinations thereof, including combinations with Common
Shares, may be issued upon payment of
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the exercise price if of equal value to the number of Common Shares for which
the Right is exercisable.
Under certain circumstances, after a Person has become an Acquiring Person,
the Board of Directors of the Company may exchange the Rights (other than Rights
that were or are beneficially owned by an Acquiring Person), in whole or in
part, at an exchange ratio of one Common Share per Right (subject to
adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares (other than fractions which
are integral multiples of one one-hundredth of a Preferred Share, which may, at
the election of the Company be evidenced by depositary receipts) will be issued,
and in lieu thereof, an adjustment in cash will be made based on the market
price of the Preferred Shares on the last trading day prior to the date of
exercise.
At any time prior to the close of business on the tenth business day after
the first date of public announcement by the Company or an Acquiring Person that
an Acquiring Person has become such (a "Shares Acquisition Date"), the Board of
Directors of the Company may redeem the Rights in whole, but not in part, at a
price of $.01 per right (the "Redemption Price"), which may be paid in cash or
with Preferred Shares or other consideration deemed appropriate by the Board of
Directors of the Company. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the Redemption Price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights at any time to cure any
ambiguity or to correct or supplement any defective or inconsistent provisions
and may, prior to the Distribution Date, be amended to change or supplement any
other provision in any manner which the Company may deem necessary or desirable.
After the Distribution Date, the terms of the Rights may be amended only so long
as such amendment shall not adversely affect the interests of the holders of the
Rights (which may not be an Acquiring Person in whose hands Rights are void),
other than to cure ambiguities or correct or supplement defective or
inconsistent provisions.
The Company has filed a copy of the Rights Agreement with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A.
A copy of the Rights Agreement is available free of charge from the Company.
This summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference.
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