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PAPA JOHN'S INTERNATIONAL, INC.
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
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February 14, 2000
Exhibit
1. Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Certain Definitions. . . . . . . . . . . . . . . . . . . . . . . . 1
2. The Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Summary of Rights. . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Legend on Common Stock Certificates. . . . . . . . . . . . . . . . 6
2.3 Exercise of Rights; Separation of Rights . . . . . . . . . . . . . 6
2.4 Adjustments to Exercise Price; Number of Rights. . . . . . . . . . 8
2.5 Date on Which Exercise is Effective. . . . . . . . . . . . . . . . 9
2.6 Execution, Authentication, Delivery and Dating of Rights
Certificates. . . . . . . . . . . . . . . . . . . . . . . . . 9
2.7 Registration, Registration of Transfer and Exchange. . . . . . . . 10
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates. . . . . 11
2.9 Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . . . 11
2.10 Delivery and Cancellation of Certificates . . . . . . . . . . . . 11
2.11 Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . 12
3. Adjustments to the Rights in the Event of Certain Transactions . . . . . 12
3.1 Flip-In. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.2 Flip-Over. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4. The Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.2 Merger or Consolidation or Change of Name of Rights Agent. . . . . 15
4.3 Duties of Rights Agent . . . . . . . . . . . . . . . . . . . . . . 16
4.4 Change of Rights Agent . . . . . . . . . . . . . . . . . . . . . . 18
5. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.1 Redemption and Termination . . . . . . . . . . . . . . . . . . . . 19
5.2 Expiration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.3 Issuance of New Rights Certificate . . . . . . . . . . . . . . . . 19
5.4 Supplements and Amendments . . . . . . . . . . . . . . . . . . . . 20
5.5 Fractional Shares. . . . . . . . . . . . . . . . . . . . . . . . . 20
5.6 Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.7 Holder of Rights Not Deemed a Stockholder. . . . . . . . . . . . . 21
5.8 Notice of Proposed Actions . . . . . . . . . . . . . . . . . . . . 21
5.9 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.10 Suspension of Exercisability. . . . . . . . . . . . . . . . . . . 22
5.11 Costs of Enforcement. . . . . . . . . . . . . . . . . . . . . . . 22
5.12 Successors. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.13 Benefits of this Agreement. . . . . . . . . . . . . . . . . . . . 22
5.14 Determination and Actions by the Board of Directors . . . . . . . 22
5.15 Descriptive Headings. . . . . . . . . . . . . . . . . . . . . . . 22
5.16 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.17 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.18 Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
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EXHIBITS
DESCRIPTION EXHIBIT
Form of Rights Certificate . . . . . . . . . . . . . . . . . . . . . . . . . A
Certificate of Designation of Preferences and Rights . . . . . . . . . . . . B
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STOCKHOLDER PROTECTION RIGHTS AGREEMENT
THIS STOCKHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time to
time, this "Agreement") is made and entered into as of February 14, 2000,
between PAPA JOHN'S INTERNATIONAL, INC., a Delaware corporation (the "Company"),
and NATIONAL CITY BANK, a national banking association duly organized and
validly existing under the laws of the State of Ohio as Rights Agent (the
"Rights Agent," which term shall include any successor Rights Agent hereunder).
RECITALS:
1. The Board of Directors of the Company has (a) authorized and
declared a dividend of one right ("Right") in respect of each share of Common
Stock (as hereinafter defined) held of record as of the close of business on
March 1, 2000 (the "Record Time") and (b) as provided in Section 2.4, authorized
the issuance of one Right in respect of each share of Common Stock issued after
the Record Time and prior to the Separation Time (as hereinafter defined) and,
to the extent provided in Section 5.3, each share of Common Stock issued after
the Separation Time;
2. Subject to Sections 3.1, 5.1, 5.2 and 5.10, each Right entitles
the holder thereof, after the Separation Time, to purchase securities of the
Company (or, in certain cases, of certain other entities) pursuant to the terms
and subject to the conditions set forth herein; and
3. The Company desires to appoint the Rights Agent to act on behalf
of the Company, and the Rights Agent is willing so to act, in connection with
the issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein.
AGREEMENT:
NOW, THEREFORE, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS.
1.1 CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as
hereinafter defined) who is a Beneficial Owner of 15% or more of the outstanding
shares of Common Stock; provided, however, that the term "Acquiring Person"
shall not include (i) the Company, (ii) any Subsidiary (as hereinafter defined)
of the Company, (iii) any employee benefit or compensation plan of the Company
or any Subsidiary of the Company, (iv) any entity holding Common Stock for or
pursuant to the terms of any such employee benefit or compensation plan, (v) an
Exempt Person (as hereinafter defined), (vi) any Person who shall become the
Beneficial Owner of 15%
or more of the outstanding shares of Common Stock solely as a result of an
acquisition by the Company of shares of Common Stock, until such time
hereafter or thereafter as such Person shall become the Beneficial Owner
(other than by means of a stock dividend or stock split) of any additional
shares of Common Stock, (vii) any Person who is the Beneficial Owner of 15%
or more of the outstanding shares of Common Stock but who acquired Beneficial
Ownership of shares of Common Stock without any plan or intention to seek or
affect control of the Company, if such Person promptly enters into an
irrevocable commitment promptly to divest, and thereafter promptly divests
(without exercising or retaining any power, including voting power, with
respect to such shares), sufficient shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock) so that
such Person ceases to be the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock or (viii) any Person who Beneficially Owns
shares of Common Stock consisting solely of one or more of (A) shares of
Common Stock Beneficially Owned pursuant to the grant or exercise of an
option granted to such Person by the Company in connection with an agreement
to merge with, or acquire, the Company entered into prior to a Flip-In Date,
(B) shares of Common Stock (or securities convertible into, exchangeable into
or exercisable for Common Stock), Beneficially Owned by such Person or its
Affiliates or Associates at the time of grant of such option or (C) shares of
Common Stock (or securities convertible into, exchangeable into or
exercisable for Common Stock) acquired by Affiliates or Associates of such
Person after the time of such grant which, in the aggregate, amount to less
than 1% of the outstanding shares of Common Stock.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 under the Securities Exchange Act
of 1934, as such Rule is in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" and to
have "Beneficial Ownership" of, and to "Beneficially Own," any securities as to
which such Person or any of such Person's Affiliates or Associates is or may be
deemed to be the beneficial owner of pursuant to Rule 13d-3 and 13d-5 under the
Securities Exchange Act, as such Rules are in effect on the date of this
Agreement as well as any securities as to which such Person or any of such
Person's Affiliates or Associates has the right to become the Beneficial Owner
(whether such right is exercisable immediately or only after the passage of time
or the occurrence of conditions) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, exchange rights,
rights (other than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the "Beneficial Owner," or to have
"Beneficial Ownership" of, or to "Beneficially Own," any security (i) solely
because such security has been tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or Associates until such
tendered security is accepted for payment or exchange, (ii) which such Person or
any of such Person's Affiliates or Associates may acquire, do acquire, or may be
deemed to have the right to acquire pursuant to any merger or other acquisition
agreement between the Company and such Person (or one or more of such Person's
Affiliates or Associates) if such agreement has been approved by the Board of
Directors of the Company prior to such Person's becoming an Acquiring Person or
(iii) solely because such Person or any of such Person's Affiliates or
Associates has or shares the power to vote or direct the voting of such security
pursuant to a revocable proxy given in response to a public proxy or consent
solicitation made to more than ten holders of shares of a class of stock of the
Company
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registered under Section 12 of the Securities Exchange Act of 1934 and
pursuant to, and in accordance with, the applicable rules and regulations
under the Securities Exchange Act of 1934, except if such power (or the
arrangements relating thereto) is then reportable under Item 6 of Schedule
13D under the Securities Exchange Act of 1934 (or any similar provision of a
comparable or successor report). Notwithstanding the foregoing, no officer
or director of the Company shall be deemed to Beneficially Own any securities
of any other Person by virtue of any actions such officer or director takes
in such capacity. For purposes of this Agreement, in determining the
percentage of the outstanding shares of Common Stock with respect to which a
Person is the Beneficial Owner, all shares as to which such Person is deemed
the Beneficial Owner shall be deemed outstanding.
(d) "Business Day" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in Louisville, Kentucky
are generally authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00
p.m. Louisville, Kentucky time on such date (or, if such date is not a Business
Day, 5:00 p.m. Louisville, Kentucky time on the next succeeding Business Day).
(f) "Common Stock" shall mean the shares of Common Stock,
par value $0.01 per share, of the Company.
(g) "Exchange Time" shall mean the time at which the right
to exercise the Rights shall terminate pursuant to Section 3.1(c) hereof.
(h) "Exempt Person" shall mean ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, who is
Chairman of the Board and Chief Executive Officer of the Company as of the date
hereof, members of his immediate family, including his spouse and lineal
descendants, his Affiliates and Associates, and any trusts or other entities
whose principal beneficiary is ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ or one or more members of his
immediate family, including his spouse and lineal descendants; provided,
however, that, after the date hereof, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, members of his
immediate family, including his spouse and lineal descendants, his Affiliates
and Associates, and any trust or other entity described in this subsection (h)
shall individually or collectively be an "Acquiring Person" if they acquire in
the aggregate more than forty percent (40%) of the shares of Common Stock then
outstanding without the prior approval of the Board of Directors of the Company.
(i) "Exercise Price" shall mean, as of any date, the price
at which a holder may purchase the securities issuable upon exercise of one
whole Right. Until adjustment thereof in accordance with the terms hereof, the
Exercise Price shall equal $130.
(j) "Expiration Time" shall mean the earliest of (i) the
Exchange Time, (ii) the Termination Time, (iii) February 14, 2010 and (iv) upon
the merger of the Company into another corporation pursuant to an agreement
approved by the Board of Directors and entered into prior to a Flip-In Date.
(k) "Flip-In Date" shall mean the tenth business day after
any Stock
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Acquisition Date or such earlier or later date as the Board of Directors of
the Company may from time to time fix by resolution adopted prior to the
Flip-In Date that would otherwise have occurred.
(l) "Flip-Over Entity" for purposes of Section 3.2, shall
mean (i) in the case of a Flip-Over Transaction or Event described in clause (i)
of the definition thereof, the Person issuing any securities into which shares
of Common Stock are being converted or exchanged and, if no such securities are
being issued, the other party to such Flip-Over Transaction or Event and (ii) in
the case of a Flip-Over Transaction or Event referred to in clause (ii) of the
definition thereof, the Person receiving the greatest portion of the assets or
earning power being transferred in such Flip-Over Transaction or Event, provided
in all cases if such Person is a subsidiary of a corporation, the parent
corporation shall be the Flip-Over Entity.
(m) "Flip-Over Stock" shall mean the capital stock (or
similar equity interest) with the greatest voting power in respect of the
election of directors (or other persons similarly responsible for direction of
the business and affairs) of the Flip-Over Entity.
(n) "Flip-Over Transaction or Event" shall mean a
transaction or series of transactions after a Flip-In Date in which, directly or
indirectly, (i) the Company shall consolidate or merge or participate in a share
exchange with any other Person if, at the time of the consolidation, merger or
share exchange or at the time the Company enters into any agreement with respect
to any such consolidation, merger or share exchange, the Acquiring Person
Controls the Board of Directors of the Company and either (A) any term of or
arrangement concerning the treatment of shares of capital stock in such
consolidation, merger or share exchange relating to the Acquiring Person is not
identical to the terms and arrangements relating to other holders of the Common
Stock or (B) the Person with whom the transaction or series of transactions
occurs is the Acquiring Person or an Affiliate or Associate of the Acquiring
Person or (ii) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer) assets (A) aggregating more
than 50% of the assets (measured by either book value or fair market value) or
(B) generating more than 50% of the operating income or cash flow, of the
Company and its Subsidiaries (taken as a whole) to any Person (other than the
Company or one or more of its wholly owned Subsidiaries) or to two or more such
Persons which are Affiliates or Associates or otherwise acting in concert, if,
at the time of the entry by the Company (or any such Subsidiary) into an
agreement with respect to such sale or transfer of assets, the Acquiring Person
Controls the Board of Directors of the Company. An Acquiring Person shall be
deemed to "Control" the Company's Board of Directors when, following a Flip-In
Date, the persons who were directors of the Company before the Flip-In Date
shall cease to constitute a majority of the Company's Board of Directors.
(o) "Market Price" per share of any securities on any date
shall mean the average of the daily closing prices per share of such securities
(determined as described below) on each of the 20 consecutive Trading Days
through and including the Trading Day immediately preceding such date; provided,
however, that if an event of a type analogous to any of the events described in
Section 2.4 hereof shall have caused the closing prices used to determine the
Market Price on any Trading Days during such period of 20 Trading Days not to be
fully comparable with the closing price on such date, each such closing price so
used shall be appropriately adjusted in order to make it fully comparable with
the closing price on such date. The closing
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price per share of any securities on any date shall be the last reported sale
price, regular way, or, in case no such sale takes place or is quoted on such
date, the average of the closing bid and asked prices, regular way, for each
share of such securities, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange, Inc. or, if the
securities are not listed or admitted to trading on the New York Stock
Exchange, Inc., as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the securities are listed or admitted to trading
or, if the securities are not listed or admitted to trading on any national
securities exchange, as reported by The Nasdaq Stock Market, Inc.'s Nasdaq
National Market or such other system then in use, or, if on any such date the
securities are not listed or admitted to trading on any national securities
exchange or quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market
in the securities selected by the Board of Directors of the Company;
provided, however that if on any such date the securities are not listed or
admitted to trading on a national securities exchange or traded in the
over-the-counter market, the closing price per share of such securities on
such date shall mean the fair value per share of securities on such date as
determined in good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking firm, and set
forth in a certificate delivered to the Rights Agent.
(p) "Person" shall mean any individual, firm, partnership,
association, group (as such term is used in Rule 13d-5 under the Securities
Exchange Act of 1934, as such Rule is in effect on the date of this Agreement),
corporation or other entity.
(q) "Preferred Stock" shall mean the Series A
Participating Preferred Stock, par value $0.01 per share, of the Company created
by the Certificate of Designation, Preferences and Rights of Series A
Participating Preferred Stock in substantially the form set forth in Exhibit B
hereto appropriately completed.
(r) "Separation Time" shall mean the Close of Business on
the earlier of (i) the tenth business day (or such later date as the Board of
Directors of the Company may from time to time fix by resolution adopted prior
to the Separation Time that would otherwise have occurred) after the date on
which any Person commences a tender or exchange offer which, if consummated,
would result in such Person's becoming an Acquiring Person and (ii) the Flip-In
Date; provided, that if the foregoing results in the Separation Time being prior
to the Record Time, the Separation Time shall be the Record Time and provided
further, that if any tender or exchange offer referred to in clause (i) of this
paragraph is canceled, terminated or otherwise withdrawn prior to the Separation
Time without the purchase of any shares of Common Stock pursuant thereto, such
offer shall be deemed, for purposes of this paragraph, never to have been made.
(s) "Stock Acquisition Date" shall mean the first date of
public announcement by the Company (by any means) that an Acquiring Person has
become such.
(t) "Subsidiary" of any specified Person shall mean any
corporation or other entity of which a majority of the voting power of the
equity securities or a majority of the
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equity interest is Beneficially Owned, directly or indirectly, by such Person.
(u) "Termination Time" shall mean the time at which the
right to exercise the Rights shall terminate pursuant to Section 5.1 hereof.
(v) "Trading Day," when used with respect to any
securities, shall mean a day on which the New York Stock Exchange, Inc. is open
for the transaction of business or, if such securities are not listed or
admitted to trading on the New York Stock Exchange, Inc., a day on which the
principal national securities exchange on which such securities are listed or
admitted to trading is open for the transaction of business or, if such
securities are not listed or admitted to trading on any national securities
exchange, a Business Day.
2. THE RIGHTS.
2.1 SUMMARY OF RIGHTS. As soon as practicable after the Record
Time, the Company will mail a letter summarizing the terms of the Rights to each
holder of record of Common Stock as of the Record Time, at such holder's address
as shown by the records of the Company.
2.2 LEGEND ON COMMON STOCK CERTIFICATES. Certificates for the
Common Stock issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Common Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
"Until the Separation Time (as defined in the Rights Agreement referred
to below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement, dated as of February 14, 2000
(as such may be amended from time to time, the "Rights Agreement"), between Papa
John's International, Inc. (the "Company") and National City Bank, as Rights
Agent, the terms of which are hereby incorporated herein by reference and a copy
of which is on file at the principal executive offices of the Company. Under
certain circumstances, as set forth in the Rights Agreement, such Rights may be
terminated, may become exercisable for securities or assets of the Company or of
another entity, may be exchanged for shares of Common Stock or other securities
or assets of the Company, may expire, may be redeemed, may become void (if they
are "Beneficially Owned" by an "Acquiring Person" or an Affiliate or Associate
thereof, as such terms are defined in the Rights Agreement, or by any transferee
of any of the foregoing) or may be evidenced by separate certificates and may no
longer be evidenced by this certificate. The Company will mail or arrange for
the mailing of a copy of the Rights Agreement to the holder of this certificate
without charge promptly after the receipt of a written request therefor."
Certificates representing shares of Common Stock that are issued and
outstanding at the Record Time shall evidence one Right for each share of Common
Stock evidenced thereby notwithstanding the absence of the foregoing legend.
2.3 EXERCISE OF RIGHTS; SEPARATION OF RIGHTS.
(a) Subject to Sections 3.1, 5.1, 5.2 and 5.10 and subject
to adjustment as
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herein set forth, each Right will entitle the holder thereof, after the
Separation Time and prior to the Expiration Time, to purchase, for the
Exercise Price, one one-thousandth (1/1000th) of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be
exercised and (ii) each Right will be evidenced by the certificate for the
associated share of Common Stock (together, in the case of certificates issued
prior to the Record Time, with the letter or notice mailed to the record holder
thereof pursuant to Section 2.1) and will be transferable only together with,
and will be transferred by a transfer (whether with or without such letter or
notice) of, such associated share.
(c) Subject to this Section 2.3 and to Sections 3.1, 5.1,
5.2 and 5.10, after the Separation Time and prior to the Expiration Time, the
Rights (i) may be exercised and (ii) may be transferred independent of shares of
Common Stock. Promptly following the Separation Time, the Rights Agent will
mail to each holder of record of Common Stock as of the Separation Time (other
than any Person whose Rights have become void pursuant to Section 3.1(b)), at
such holder's address as shown by the records of the Company (the Company hereby
agreeing to furnish copies of such records to the Rights Agent for this
purpose), (x) a certificate (a "Rights Certificate") in substantially the form
of Exhibit A hereto appropriately completed, representing the number of Rights
held by such holder at the Separation Time and having such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any national securities exchange or quotation system on which the
Rights may from time to time be listed or traded, or to conform to usage, and
(y) a disclosure statement describing the Rights.
(d) Subject to Sections 3.1, 5.1, 5.2 and 5.10, Rights may
be exercised on any Business Day after the Separation Time and prior to the
Expiration Time by submitting to the Rights Agent the Rights Certificate
evidencing such Rights with an Election to Exercise (an "Election to Exercise")
substantially in the form attached to the Rights Certificate duly completed,
accompanied by payment in cash, or by certified or official bank check or money
order payable to the order of the Company, of a sum equal to the Exercise Price
multiplied by the number of Rights being exercised and a sum sufficient to cover
any transfer tax or charge which may be payable in respect of any transfer
involved in the transfer or delivery of Rights Certificates or the issuance or
delivery of certificates for shares or depository receipts (or both) in a name
other than that of the holder of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election
to Exercise accompanied by payment as set forth in Section 2.3(d), and subject
to Sections 3.1, 5.1, 5.2 and 5.10, the Rights Agent will thereupon promptly (i)
(A) requisition from a transfer agent stock certificates evidencing such number
of shares or other securities to be purchased (the Company hereby irrevocably
authorizing its transfer agent to comply with all such requisitions) and (B) if
the Company elects pursuant to Section 5.5 not to issue certificates
representing fractional shares, requisition from the depository selected by the
Company depository receipts representing the fractional shares to be purchased
or requisition from the Company the amount of cash to be paid
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in lieu of fractional shares in accordance with Section 5.5 and (ii) after
receipt of such certificates, depository receipts and/or cash, deliver the
same to or upon the order of the registered holder of such Rights
Certificate, registered (in the case of certificates or depository receipts)
in such name or names as may be designated by such holder.
(f) In case the holder of any Rights shall exercise less
than all the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take
all such action as may be necessary to ensure that all shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered and fully paid and nonassessable;
(ii) take all such action as may be necessary to comply with any applicable
requirements of the Securities Act of 1933 or the Securities Exchange Act of
1934, and the rules and regulations thereunder, and any other applicable law,
rule or regulation, in connection with the issuance of any shares upon exercise
of Rights; and (iii) pay when due and payable any and all federal and state
transfer taxes and charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of Rights, provided that the Company shall not be required to pay any
transfer tax or charge which may be payable in respect of any transfer involved
in the transfer or delivery of Rights Certificates or the issuance or delivery
of certificates for shares in a name other than that of the holder of the Rights
being transferred or exercised.
2.4 ADJUSTMENTS TO EXERCISE PRICE; NUMBER OF RIGHTS.
(a) In the event the Company shall at any time after the
Record Time and prior to the Separation Time (i) declare or pay a dividend on
Common Stock payable in Common Stock, (ii) subdivide the outstanding Common
Stock or (iii) combine the outstanding Common Stock into a smaller number of
shares of Common Stock, (x) the Exercise Price in effect after such adjustment
will be equal to the Exercise Price in effect immediately prior to such
adjustment divided by the number of shares of Common Stock (the "Expansion
Factor") that a holder of one share of Common Stock immediately prior to such
dividend, subdivision or combination would hold thereafter as a result thereof
and (y) each Right held prior to such adjustment will become that number of
Rights equal to the Expansion Factor, and the adjusted number of Rights will be
deemed to be distributed among the shares of Common Stock with respect to which
the original Rights were associated (if they remain outstanding) and the shares
issued in respect of such dividend, subdivision or combination, so that each
such share of Common Stock will have exactly one Right associated with it. Each
adjustment made pursuant to this paragraph shall be made as of the payment or
effective date for the applicable dividend, subdivision or combination.
In the event the Company shall at any time after the Record Time and
prior to the Separation Time issue any shares of Common Stock otherwise than in
a transaction referred to in the preceding paragraph, each such share of Common
Stock so issued shall automatically have one new Right associated with it, which
Right shall be evidenced by the certificate representing
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such share. To the extent provided in Section 5.3, Rights shall be issued by
the Company in respect of shares of Common Stock that are issued or sold by
the Company after the Separation Time.
(b) In the event the Company shall at any time after the
Record Time and prior to the Separation Time issue or distribute any securities
or assets in respect of, in lieu of or in exchange for Common Stock (other than
pursuant to a regular periodic cash dividend or a dividend paid solely in Common
Stock) whether by dividend, in a reclassification or recapitalization (including
any such transaction involving a merger, consolidation or share exchange), or
otherwise, the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property purchasable upon
exercise of Rights as the Board of Directors of the Company, in its sole
discretion, may deem to be appropriate under the circumstances in order to
adequately protect the interests of the holders of Rights generally, and the
Company and the Rights Agent shall amend this Agreement as necessary to provide
for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to
this Section 2.4 shall be calculated to the nearest cent. Whenever an
adjustment to the Exercise Price is made pursuant to this Section 2.4, the
Company shall (i) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts accounting for such adjustment and (ii)
promptly file with the Rights Agent and with each transfer agent for the Common
Stock a copy of such certificate. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein and shall not be
deemed to have knowledge of any such adjustment unless and until it shall have
received such a certificate.
Rights Certificates shall represent the securities purchasable under the
terms of this Agreement, including any adjustment or change in the securities
purchasable upon exercise of the Rights, even though such certificates may
continue to express the securities purchasable at the time of issuance of the
initial Rights Certificates.
2.5 DATE ON WHICH EXERCISE IS EFFECTIVE. Each person in whose
name any certificate for shares is issued upon the exercise of Rights shall for
all purposes be deemed to have become the holder of record of the shares
represented thereby on the date upon which the Rights Certificate evidencing
such Rights was duly surrendered and payment of the Exercise Price for such
Rights (and any applicable taxes and other governmental charges payable by the
exercising holder hereunder) was made; provided, however, that if the date of
such surrender and payment is a date upon which the stock transfer books of the
Company are closed such person shall be deemed to have become the record holder
of such shares on, and such certificate shall be dated, the next succeeding
Business Day on which the stock transfer books of the Company are open.
2.6 EXECUTION, AUTHENTICATION, DELIVERY AND DATING OF RIGHTS
CERTIFICATES.
(a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Rights Certificates may be manual or facsimile.
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Rights Certificates bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the countersignature and delivery of such Rights
Certificates.
Promptly after the Separation Time, the Company will notify the Rights
Agent of such Separation Time and will deliver Rights Certificates executed by
the Company to the Rights Agent for countersignature, and, subject to Section
3.1(b), the Rights Agent shall manually countersign and deliver such Rights
Certificates to the holders of the Rights pursuant to Section 2.3(c) hereof. No
Rights Certificate shall be valid for any purpose unless manually countersigned
by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.7 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
(a) After the Separation Time, the Company will cause to
be kept a register (the "Rights Register") in which, subject to such reasonable
regulations as it may prescribe, the Company will provide for the registration
and transfer of Rights. The Rights Agent is hereby appointed "Rights Registrar"
for the purpose of maintaining the Rights Register for the Company and
registering Rights and transfers of Rights after the Separation Time as herein
provided. In the event that the Rights Agent shall cease to be the Rights
Registrar, the Rights Agent will have the right to examine the Rights Register
at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon
surrender for registration of transfer or exchange of any Rights Certificate,
and subject to the provisions of Section 2.7(c) and (d), the Company will
execute and the Rights Agent will countersign and deliver, in the name of the
holder or the designated transferee or transferees, as required pursuant to the
holder's instructions, one or more new Rights Certificates evidencing the same
aggregate number of Rights as did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b), all
Rights issued upon any registration of transfer or exchange of Rights
Certificates shall be the valid obligations of the Company, and such Rights
shall be entitled to the same benefits under this Agreement as the Rights
surrendered upon such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration
of transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company or the Rights Agent,
as the case may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. As a condition to the issuance of any new
Rights Certificate under this Section 2.7, the Company may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto.
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(d) The Company shall not be required to register the
transfer or exchange of any Rights after such Rights have become void under
Section 3.1(b), been exchanged under Section 3.1(c) or been redeemed and
terminated under Section 5.1.
2.8 MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES.
(a) If any mutilated Rights Certificate is surrendered to
the Rights Agent prior to the Expiration Time, then, subject to Sections 3.1(b),
3.1(c), 5.1 and 5.2, the Company shall execute and the Rights Agent shall
countersign and deliver in exchange therefor a new Rights Certificate evidencing
the same number of Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the
Rights Agent prior to the Expiration Time (i) evidence to their satisfaction of
the destruction, loss or theft of any Rights Certificate and (ii) such security
or indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c), 5.1 and 5.2 and in
the absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights
Certificate under this Section 2.8, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this
Section 2.8 in lieu of any destroyed, lost or stolen Rights Certificate shall
evidence a contractual obligation of the Company, whether or not the destroyed,
lost or stolen Rights Certificate shall be at any time enforceable by anyone,
and, subject to Section 3.1(b), shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all other Rights duly issued
hereunder.
2.9 PERSONS DEEMED OWNERS. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights Agent may deem and treat the person in whose
name such Rights Certificate (or, prior to the Separation Time, such Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary. As used in this
Agreement, unless the context otherwise requires, the term "holder" of any
Rights shall mean the registered holder of such Rights (or, prior to the
Separation Time, the associated shares of Common Stock).
2.10 DELIVERY AND CANCELLATION OF CERTIFICATES. All Rights
Certificates surrendered upon exercise or for registration of transfer or
exchange shall, if surrendered to any person other than
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the Rights Agent, be delivered to the Rights Agent and, in any case, shall be
promptly canceled by the Rights Agent. The Company may at any time deliver
to the Rights Agent for cancellation any Rights Certificates previously
countersigned and delivered hereunder which the Company may have acquired in
any manner whatsoever, and all Rights Certificates so delivered shall be
promptly canceled by the Rights Agent. No Rights Certificates shall be
countersigned in lieu of or in exchange for any Rights Certificates canceled
as provided in this Section 2.10, except as expressly permitted by this
Agreement. The Rights Agent shall return all canceled Rights Certificates to
the Company.
2.11 AGREEMENT OF RIGHTS HOLDERS. Every holder of Rights by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of Rights that:
(a) prior to the Separation Time, each Right will be
transferable only together with, and will be transferred by a transfer of, the
associated share of Common Stock;
(b) after the Separation Time, the Rights Certificates
will be transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated Common Stock certificate) for
registration of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in whose name the
Rights Certificate (or, prior to the Separation Time, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will,
under the circumstances set forth in Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from
time to time pursuant to Section 2.4(b) or 5.4 hereof.
3. ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS.
3.1 FLIP-IN.
(a) In the event that prior to the Expiration Time a
Flip-In Date shall occur, except as provided in this Section 3.1, each Right
shall constitute the right to purchase from the Company, upon exercise
thereof in accordance with the terms hereof (but subject to Section 5.1, 5.2
and 5.10), that number of shares of Common Stock having an aggregate Market
Price on the Stock Acquisition Date equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally
in the event that on or after such Stock Acquisition Date an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Common Stock).
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(b) Notwithstanding the foregoing, any Rights that are or
were Beneficially Owned on or after the Stock Acquisition Date by an Acquiring
Person or an Affiliate or Associate thereof or by any transferee, direct or
indirect, of any of the foregoing shall become void and any holder of such
Rights (including transferees) shall thereafter have no right to exercise or
transfer such Rights under any provision of this Agreement. If any Rights
Certificate is presented for assignment or exercise and the Person presenting
the same will not complete the certification set forth at the end of the form of
assignment or notice of election to exercise and provide such additional
evidence of the identity of the Beneficial Owner and its Affiliates and
Associates (or former Beneficial Owners and their Affiliates and Associates) as
the Company shall reasonably request, then the Company shall be entitled
conclusively to deem the Beneficial Owner thereof to be an Acquiring Person or
an Affiliate or Associate thereof or a transferee of any of the foregoing and
accordingly will deem the Rights evidenced thereby to be void and not
transferable or exercisable.
(c) The Board of Directors of the Company may, at its
option, at any time after a Flip-In Date and prior to the time that an Acquiring
Person becomes the Beneficial Owner of more than 50% of the outstanding shares
of Common stock, elect to exchange all (but not less than all) the then
outstanding Rights (which shall not include Rights that have become void
pursuant to the provisions of Section 3.1(b)) for shares of Common Stock at an
exchange ratio of one share of Common Stock per Right, appropriately adjusted in
order to protect the interests of holders of Rights generally in the event that
after the Separation Time an event of a type analogous to any of the events
described in Section 2.4(a) or (b) shall have occurred with respect to the
Common Stock (such exchange ratio, as adjusted from time to time, being
hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the Company
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right (other
than Rights that have become void pursuant to Section 3.1(b)) will thereafter
represent only the right to receive a number of shares of Common Stock equal to
the Exchange Ratio. Promptly after the action of the Board of Directors
electing to exchange the Rights, the Company shall give notice thereof
(specifying the steps to be taken to receive shares of Common Stock in exchange
for Rights) to the Rights Agent and the holders of the Rights (other than Rights
that have become void pursuant to Section 3.1(b)) outstanding immediately prior
thereto by mailing such notice in accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued upon the
exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(d) shall for
all purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate shall be dated, the date upon which
the Rights Certificate evidencing such Rights was duly surrendered and payment
of any applicable taxes and other governmental charges payable by the holder was
made; provided, however, that if the date of such surrender and payment is a
date upon which the stock transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the stock
transfer books of the Company are open.
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(d) Whenever the Company shall become obligated under
Section 3.1(a) or (c) to issue shares of Common Stock upon exercise of or in
exchange for Rights, the Company, at its option, may substitute therefor shares
of Preferred Stock, at a ratio of one one-thousandth (1/l000th) of a share of
Preferred Stock for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient
treasury shares or authorized but unissued shares of Common Stock or Preferred
Stock of the Company to permit the exercise or exchange in full of the Rights in
accordance with Section 3.1(a) or (c), the Company shall either (i) call a
meeting of stockholders seeking approval to cause sufficient additional shares
to be authorized (provided that if such approval is not obtained the Company
will take the action specified in clause (ii) of this sentence) or (ii) take
such action as shall be necessary to ensure and provide, to the extent permitted
by applicable law and any agreements or instruments in effect on the Stock
Acquisition Date to which it is a party, that each Right shall thereafter
constitute the right to receive, (x) at the Company's option, either (A) in
return for the Exercise Price, debt or equity securities or other assets (or a
combination thereof) having a fair value equal to twice the Exercise Price, or
(B) without payment of consideration (except as otherwise required by applicable
law), debt or equity securities or other assets (or a combination thereof)
having a fair value equal to the Exercise Price, or (y) if the Board of
Directors of the Company elects to exchange the Rights in accordance with
Section 3.1(c), debt or equity securities or other assets (or a combination
thereof) having a fair value equal to the product of the Market Price of a share
of Common Stock on the Flip-In Date times the Exchange Ratio in effect on the
Flip-In Date, where in any case set forth in (x) or (y) above the fair value of
such debt or equity securities or other assets shall be as determined in good
faith by the Board of Directors of the Company, after consultation with a
nationally recognized investment banking firm.
3.2 FLIP-OVER.
(a) Prior to the Expiration Time, the Company shall not
enter into any agreement with respect to, consummate or permit to occur any
Flip-Over Transaction or Event unless and until it shall have entered into a
supplemental agreement with the Flip-Over Entity, for the benefit of the holders
of the Rights, providing that, upon consummation or occurrence of the Flip-Over
Transaction or Event (i) each Right shall thereafter constitute the right to
purchase from the Flip-Over Entity, upon exercise thereof in accordance with the
terms hereof, that number of shares of Flip-Over Stock of the Flip-Over Entity
having an aggregate Market Price on the date of consummation or occurrence of
such Flip-Over Transaction or Event equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally in
the event that after such date of consummation or occurrence an event of a type
analogous to any of the events described in Section 2.4(a) or (b) shall have
occurred with respect to the Flip-Over Stock) and (ii) the Flip-Over Entity
shall thereafter be liable for, and shall assume, by virtue of such Flip-Over
Transaction or Event and such supplemental agreement, all the obligations and
duties of the Company pursuant to this Agreement. The provisions of this
Section 3.2 shall apply to successive Flip-Over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will
be terminated pursuant to Section 5.1 hereof in connection therewith, the
Company shall not enter into any
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agreement with respect to, consummate or permit to occur any Flip-Over
Transaction or Event if at the time thereof there are any rights, warrants or
securities outstanding or any other arrangements, agreements or instruments
that would eliminate or otherwise diminish in any material respect the
benefits intended to be afforded by this Rights Agreement to the holders of
Rights upon consummation of such transaction.
4. THE RIGHTS AGENT.
4.1 GENERAL.
(a) The Company hereby appoints the Rights Agent to act as
agent for the Company in accordance with the terms and conditions hereof, and
the Rights Agent hereby accepts such appointment. The Company agrees to pay to
the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent, its
directors, officers, employees and agents for, and to hold each of them harmless
against, any loss, liability, or expense, incurred without gross negligence, bad
faith or willful misconduct on the part of the Rights Agent or such indemnified
party, for anything done or omitted to be done by the Rights Agent in connection
with the acceptance and administration of this Agreement or the exercise or
performance of its duties hereunder, including the costs and expenses of
defending against any claim of liability. The indemnity provided in this
Section 4.1(a) shall survive the expiration of the Rights and the termination of
this Agreement.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement or the exercise or
performance of its duties hereunder in reliance upon any certificate for
securities purchasable upon exercise of Rights, Rights Certificate, certificate
for other securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper person or persons.
4.2 MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent is a party, or any corporation succeeding to
the stockholder services business of the Rights Agent or any successor Rights
Agent, will be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 4.4
hereof. In case at the time such successor Rights Agent succeeds to the agency
created by this Agreement any of the Rights Certificates have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature
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of the predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates have
not been countersigned, any successor Rights Agent may countersign such
Rights Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Rights
Certificates will have the full force provided in the Rights Certificates and
in this Agreement.
(b) In case at any time the name of the Rights Agent is
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
4.3 DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the advice or opinion of such counsel
will be full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
advice or opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by a person believed by the Rights Agent to
be the Chairman of the Board, the President or any Vice President and by the
Treasurer or any Assistant Treasurer or the Secretary or any Assistant Secretary
of the Company and delivered to the Rights Agent; and such certificate will be
full authorization to the Rights Agent for any action taken or suffered in good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent will be liable hereunder only for its
own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the certificates for securities purchasable upon exercise of Rights or the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and will be deemed to
have been made by the Company only.
(e) The Rights Agent will not be under any responsibility
in respect of the validity of any provision of this Agreement or the execution
and delivery hereof (except the due authorization, execution and delivery hereof
by the Rights Agent) or in respect of the validity or
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execution of any certificate for securities purchasable upon exercise of
Rights or Rights Certificate (except its countersignature thereof); nor will
it be responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor will it be
responsible for any change in the exercisability of the Rights (including the
Rights becoming void pursuant to Section 3.1(b) hereof) or any adjustment
required under any provision of this Agreement or responsible for the manner,
method or amount of any such adjustment or the ascertaining of the existence
of facts that would require any such adjustment (except with respect to the
exercise of Rights after receipt of the certificate contemplated by Section
2.4 describing any such adjustment); nor will it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any securities purchasable upon exercise of Rights or any
Rights or as to whether any securities purchasable upon exercise of Rights
will, when issued, be duly and validly authorized, executed, issued and
delivered and fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any person believed by the Rights Agent to be the Chairman of the Board, the
President or any Vice President or the Secretary or any Assistant Secretary or
the Treasurer or any Assistant Treasurer of the Company, and to apply to such
persons for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered by it in good faith in accordance
with instructions of any such person, or for any delay in acting while awaiting
instructions. Any application by the Rights Agent for written instructions from
the Company may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken or omitted by the Rights Agent under this Agreement
and the date on or after which such action shall be taken or such omission shall
be effective. The Rights Agent shall not be liable for any action taken by, or
omission of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date shall
not be less than five Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall have consented
in writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in Common Stock,
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or
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agents, and the Rights Agent will not be answerable or accountable for any
act, default, neglect or misconduct of any such attorneys or agents or for
any loss to the Company resulting from any such act, default, neglect or
misconduct, provided the Rights Agent was not grossly negligent in the
selection and continued employment thereof.
(j) The Rights Agent undertakes only the express duties
and obligations imposed on it by this Agreement and no implied duties or
obligations shall be read into this Agreement against the Rights Agent.
(k) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including but
not limited to lost profits).
(l) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the exercise
of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(m) The Company agrees that it will provide prompt written
notice to the Rights Agent of any transaction or event of which the Company
becomes aware that has resulted in or that is reasonably likely to result in the
occurrence of a Flip-In Date, a Flip-Over Transaction or Event, the Separation
Time or a Stock Acquisition Date.
4.4 CHANGE OF RIGHTS AGENT. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to each transfer agent of Common Stock by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.9. The Company may
remove the Rights Agent upon 30 days notice in writing, mailed to the Rights
Agent and to each transfer agent of the Common Stock by registered or certified
mail, and to the holders of the Rights in accordance with Section 5.9. If the
Rights Agent should resign or be removed or otherwise become incapable of
acting, the Company will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 days after such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Company), then the holder of any Rights may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States or any State of the United States, in good standing, which is
authorized under such laws to exercise the powers of the Rights Agent
contemplated by this Agreement and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $5,000,000 or (b) an
affiliate of a corporation described in the immediately preceding clause (a).
After appointment, the successor Rights Agent will be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but
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the predecessor Rights Agent shall deliver and transfer to the successor
Rights Agent any property at the time held by it hereunder, and execute and
deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the
Company will file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock, and mail a notice thereof in
writing to the holders of the Rights. Failure to give any notice provided
for in this Section 4.4, however, or any defect therein, shall not affect the
legality or validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
5. MISCELLANEOUS.
5.1 REDEMPTION AND TERMINATION.
(a) The Board of Directors of the Company may, at its
option, at any time prior to a Flip-in Date, redeem all but not less than all of
the then outstanding Rights at a redemption price of $0.001 per Right,
appropriately adjusted to reflect any stock split, stock dividend,
recapitalization or similar transaction occurring after the date of this
Agreement (such redemption price being hereinafter referred to as the
"Redemption Price"). The Company may, at its option, pay the Redemption Price
in shares of Common Stock (based on current Market Price at the time of
redemption), cash or any other form of consideration deemed appropriate by the
Board of Directors. The redemption of the Rights by the Board of Directors may
be made effective at such time, on such basis and subject to such conditions as
the Board of Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights (or at such later time as
the Board of Directors may establish for the effectiveness of such redemption),
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 for each Right so held. The Company
shall promptly give public notice of such redemption; provided, however, that
the failure to give, or any defect in, any such notice shall not affect the
validity of such redemption. The Company shall promptly give, or cause the
Rights Agent to give, notice of such redemption to the holders of the then
outstanding Rights by mailing such notice to all such holders at their last
addresses as they appear upon the registry books of the Rights Agent or, prior
to the Separation Time, on the registry books of the transfer agent for the
Common Stock. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of redemption shall state the method by which 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 as set forth herein.
5.2 EXPIRATION. The Rights and this Agreement shall expire at
the Expiration Time and no Person shall have any rights pursuant to this
Agreement or any Right after the Expiration Time, except, if the Rights are
exchanged, as provided in Section 3.1 hereof, or if the Rights are redeemed, as
provided in Section 5.1 hereof.
5.3 ISSUANCE OF NEW RIGHTS CERTIFICATE. Notwithstanding any of
the provisions of this
-19-
Agreement or of the Rights to the contrary, the Company may, at its option,
issue new Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or change in the
number or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock
by the Company following the Separation Time and prior to the Expiration Time
pursuant to the terms of securities convertible or redeemable into shares of
Common Stock or to options, in each case issued or granted prior to, and
outstanding at, the Separation Time, the Company shall issue to the holders
of such shares of Common Stock, Rights Certificates representing the
appropriate number of Rights in connection with the issuance or sale of such
shares of Common Stock; provided, however, in each case, (i) no such Rights
Certificate shall be issued, if, and to the extent that, the Company shall be
advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or to the Person to whom
such Rights Certificates would be issued, (ii) no such Rights Certificates
shall be issued if, and to the extent that, appropriate adjustment shall have
otherwise been made in lieu of the issuance thereof and (iii) the Company
shall have no obligation to distribute Rights Certificates to any Acquiring
Person or Affiliate or Associate of an Acquiring Person or any transferee of
any of the foregoing.
5.4 SUPPLEMENTS AND AMENDMENTS. The Company and the Rights Agent
may from time to time supplement or amend this Agreement without the approval of
any holders of Rights (i) prior to the Close of Business on the Flip-In Date, in
any respect and (ii) after the Close of Business on the Flip-In Date, to make
any changes that the Company may deem necessary or desirable and which shall not
materially adversely affect the interests of the holders of Rights generally or
in order to cure any ambiguity or to correct or supplement any provision
contained herein which may be inconsistent with any other provisions herein or
otherwise defective. The Rights Agent will duly execute and deliver any
supplement or amendment hereto requested by the Company upon receipt of a
certificate from the Company that such supplement or amendment satisfies the
terms of the preceding sentence. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment that changes the rights
and duties of the Rights Agent under this Agreement shall be effective without
the consent of the Rights Agent.
5.5 FRACTIONAL SHARES. If the Company elects not to issue
certificates representing fractional shares upon exercise of Rights, the Company
shall, in lieu thereof, in the sole discretion of the Board of Directors, either
(a) evidence such fractional shares by depository receipts issued pursuant to an
appropriate agreement between the Company and a depository selected by it,
providing that each holder of a depository receipt shall have all of the rights,
privileges and preferences to which such holder would be entitled as a
beneficial owner of such fractional share, or (b) sell such shares on behalf of
the holders of Rights and pay to the registered holder of such Rights the
appropriate fraction of price per share received upon such sale.
5.6 RIGHTS OF ACTION. Subject to the terms of this Agreement
(including Section 3.1(b)), rights of action in respect of this Agreement, other
than rights of action vested solely in the Rights Agent, are vested in the
respective holders of the Rights; and any holder of any Rights, without the
consent of the Rights Agent or of the holder of any other Rights, may, on such
holder's own behalf and for such holder's own benefit and the benefit of other
holders of Rights,
-20-
enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, such holder's
right to exercise such holder's Rights in the manner provided in such
holder's Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will be entitled
to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of, the obligations of any Person
subject to this Agreement.
5.7 HOLDER OF RIGHTS NOT DEEMED A STOCKHOLDER. No holder, as
such, of any Rights shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of shares or any other securities which may at any
time be issuable on the exercise of such Rights, nor shall anything contained
herein or in any Rights Certificate be construed to confer upon the holder of
any Rights, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 5.8 hereof), or to receive dividends
or subscription rights, or otherwise, until such Rights shall have been
exercised or exchanged in accordance with the provisions hereof.
5.8 NOTICE OF PROPOSED ACTIONS. In case the Company shall
propose after the Separation Time and prior to the Expiration Time (i) to effect
or permit occurrence of any Flip-Over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section 5.9
hereof, a notice of such proposed action, which shall specify the date on which
such Flip-Over Transaction or Event, liquidation, dissolution, or winding up is
to take place, and such notice shall be so given at least 20 Business Days prior
to the date of the taking of such proposed action.
5.9 NOTICES. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Papa John's International, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇'▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
National City Bank
National City Center
-21-
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, on
the registry books of the transfer agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice.
5.10 SUSPENSION OF EXERCISABILITY. To the extent that the
Company determines in good faith that some action will or need be taken pursuant
to Section 3.1 or to comply with federal or state securities laws, the Company
may suspend the exercisability of the Rights for ninety (90) days and any
additional period that may be reasonable in order to take such action or comply
with such laws. In the event of any such suspension, the Company shall issue as
promptly as practicable a public announcement stating that the exercisability or
exchangeability of the Rights has been temporarily suspended. Notice thereof
pursuant to Section 5.9 shall not be required.
Failure to give a notice pursuant to the provisions of this Agreement
shall not affect the validity of any action taken hereunder.
5.11 COSTS OF ENFORCEMENT. The Company agrees that if the
Company or any other Person the securities of which are purchasable upon
exercise of Rights fails to fulfill any of its obligations pursuant to this
Agreement, then the Company or such Person will reimburse the holder of any
Rights for the costs and expenses (including legal fees) incurred by such holder
in actions to enforce such holder's rights pursuant to any Rights or this
Agreement.
5.12 SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
5.13 BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the holders of the Rights any legal or equitable right, remedy or claim under
this Agreement and this Agreement shall be for the sole and exclusive benefit of
the Company, the Rights Agent and the holders of the Rights.
5.14 DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS. 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 or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including, without limitation, the right
and power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith, shall
-22-
(x) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (y) not subject the Board of
Directors of the Company to any liability to the holders of the Rights.
5.15 DESCRIPTIVE HEADINGS. Descriptive headings appear herein
for convenience only and shall not control or affect the meaning or construction
of any of the provisions hereof.
5.16 GOVERNING LAW. THIS AGREEMENT AND EACH RIGHT ISSUED
HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF
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.
5.17 COUNTERPARTS. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
5.18 SEVERABILITY. If any term or provision hereof or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining terms and
provisions hereof or the application of such term or provision to circumstances
other than those as to which it is held invalid or unenforceable.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
PAPA JOHN'S INTERNATIONAL, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice Chairman and President
("Company")
NATIONAL CITY BANK
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Title: Vice President
("Rights Agent")
-23-
EXHIBIT A
Certificate No. ______
(Form of Rights Certificate)
_______ RIGHTS
THE RIGHTS ARE SUBJECT TO TERMINATION, REDEMPTION OR MANDATORY EXCHANGE, AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS
BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES OR ASSOCIATES THEREOF AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE
FOREGOING WILL BE VOID.
RIGHTS CERTIFICATE
PAPA JOHN'S INTERNATIONAL, INC.
This certifies that _____________________________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Stockholder Protection Rights Agreement, dated as of February
14, 2000 (as amended from time to time, the "Rights Agreement"), between Papa
John's International, Inc., a Delaware corporation (the "Company"), and National
City Bank, a national banking association duly organized and validly existing
under the laws of the State of Ohio as Rights Agent (the "Rights Agent," which
term shall include any successor Rights Agent under the Rights Agreement), to
purchase from the Company at any time after the Separation Time (as such term is
defined in the Rights Agreement) and prior to the Close of Business on February
14, 2010, one one-thousandth (1/1000th) of a fully paid share of Series A
Participating Preferred Stock, par value $0.01 per share (the "Preferred
Stock"), of the Company (subject to adjustment as provided in the Rights
Agreement) at the Exercise Price referred to below, upon presentation and
surrender of this Rights Certificate with the Form of Election to Exercise duly
executed at the principal office of the Rights Agent. The Exercise Price shall
initially be $130 per Right and shall be subject to adjustment as provided in
the Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights evidenced
hereby may entitle the registered holder thereof to purchase securities of an
entity other than the Company or securities or assets of the Company other than
Preferred Stock, all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available without cost upon written request.
A-1
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
evidencing an aggregate number of Rights equal to the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates surrendered. If this
Rights Certificate shall be exercised in part, the registered holder shall be
entitled to receive, upon surrender hereof, another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, each Right evidenced by
this Certificate may be (a) amended, redeemed and terminated by the Company
under certain circumstances, at its option, or (b) exchanged by the Company
under certain circumstances, at its option, for one share of Common Stock or
one one-thousandth (1/1000th) of a share of Preferred Stock per Right (or, in
certain cases, other securities or assets of the Company), subject in each
case to adjustment in certain events as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of any securities
which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Rights evidenced by
this Rights Certificate shall have been exercised or exchanged as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and its
corporate seal.
------------------------------------------------------------------------------
Date: ______________
------------------------------------------------------------------------------
ATTEST: PAPA JOHN'S INTERNATIONAL, INC.
By:
------------------------------ --------------------------------
Secretary Title:
-------------------------------------------------------------------------------
Countersigned:
NATIONAL CITY BANK
By: ______________________________
Title: _____________________________
-------------------------------------------------------------------------------
A-2
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
_ _ _ _ _ _ _ _ _ _ _ _ _ _
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED _____________________ hereby sells, assigns and transfers
unto
-----------------------------------------------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _____________________
Attorney, to transfer the within Rights Certificate on the books of the within
named Company, with full power of substitution.
------------------------------------------------------------------------------
Date: ______________
------------------------------------------------------------------------------
Signature Guaranteed:
______________________________
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular,
without alteration or enlargement or
any change whatsoever.)
-------------------------------------------------------------------------------
Signatures must be guaranteed by an eligible guarantor institution (Banks,
Stockholders, Savings and Loan Associations and Credit Unions with membership in
an approved Signature guarantee medallion program) pursuant to S.E.C. Rule 17
Ad-15.
-------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
-------------------------------------------------------------------------------
---------------------------------
Signature
-------------------------------------------------------------------------------
A-3
-------------------------------------------------------------------------------
NOTICE
---------
In the event the certification set forth above is not completed in connection
with a purported assignment, the Company will deem the Beneficial Owner of the
Rights evidenced by the enclosed Rights Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement) or a
transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
--------------------------------------------
(To be executed if holder desires to exercise the
Rights represented by the Rights Certificate.)
TO: PAPA JOHN'S INTERNATIONAL, INC.
The undersigned hereby irrevocably elects to exercise ___________________ whole
Rights represented by the attached Rights Certificate to purchase the shares of
Series A Participating Preferred Stock issuable upon the exercise of such Rights
and requests that certificates for such shares be issued in the name of:
-------------------------------------------------------------------------------
---------------------------------
Address:
Social Security or other Taxpayer
Identification Number:
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
-------------------------------------------------------------------------------
---------------------------------
Address:
Social Security or other Taxpayer
Identification Number:
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Date:_________________
-------------------------------------------------------------------------------
Signature Guaranteed:
---------------------------------
Signature
(Signature must correspond to name as
written upon the face of this Rights
-------------------------------------------------------------------------------
A-4
--------------------------------------------------------------------------------
Date:________________
--------------------------------------------------------------------------------
Certificate in every particular,
without alteration or enlargement or
any change whatsoever.)
--------------------------------------------------------------------------------
Signatures must be guaranteed by an eligible guarantor institution (Banks,
Stockholders, Savings and Loan Associations and Credit Unions with membership
in an approved Signature guarantee medallion program) pursuant to S.E.C. Rule
17 Ad-15.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
-------------------------------------------------------------------------------
-------------------------------
Signature
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
NOTICE
--------
In the event the certification set forth above is not completed in connection
with a purported assignment, the Company will deem the Beneficial Owner of the
Rights evidenced by the enclosed Rights Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement) or a
transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
A-5
EXHIBIT B
CERTIFICATE OF DESIGNATION OF RIGHTS AND PREFERENCES
OF
SERIES A PARTICIPATING PREFERRED STOCK
OF
PAPA JOHN'S INTERNATIONAL, INC.
Pursuant to Section 151 of the
Delaware General Corporation Law
Papa John's International, Inc., a corporation organized under the laws
of the State of Delaware (the "Corporation"), hereby certifies that, pursuant to
the authority conferred upon the Board of Directors by the Certificate of
Incorporation, as amended, of the Corporation, the Board of Directors on
February 14, 2000 adopted the following resolution creating a series of 100,000
shares of Preferred Stock designated as Series A Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors
in accordance with the provisions of the Certificate of Incorporation of the
Corporation, the Board of Directors hereby creates, authorizes and provides for
the issuance of Series A Participating Preferred Stock having the designations
and relative rights, preferences and limitations that are set forth below:
1. SERIES A PARTICIPATING PREFERRED STOCK. There is hereby established a
series of Preferred Stock, par value $0.01 per share, of the Corporation, and
the designation and certain terms, powers, preferences and other rights of the
shares of such series, and certain qualifications, limitations and restrictions
thereon, are hereby fixed as follows:
(i) The distinctive serial designation of this series shall be "Series
A Participating Preferred Stock" (hereinafter called "this Series"). Each share
of this Series shall be identical in all respects with the other shares of this
Series except as to the dates from and after which dividends thereon shall be
cumulative.
(ii) The number of shares in this Series shall initially be 100,000
which number may from time to time be increased or decreased (but not below the
number then outstanding) by the Board of Directors. Shares of this Series
purchased by the Corporation shall be canceled and shall revert to authorized
but unissued shares of Preferred Stock undesignated as to series. Shares of
this Series may be issued in fractional shares, which fractional shares shall
entitle the holder, in proportion to such holder's fractional share, to all
rights of a holder of a whole share of this Series.
(iii) The holders of full or fractional shares of this Series shall be
entitled to receive, when and as declared by the Board of Directors, but only
out of funds legally available therefor, dividends, (A) on each date that
dividends or other distributions payable in Common Stock of the Corporation are
payable on or in respect of Common Stock comprising part of the Reference
Package (as defined below), in an amount per whole share of this Series equal to
the aggregate
B-1
amount of dividends or other distributions (other than dividends or
distributions payable in Common Stock of the Corporation) that would be
payable on such date to a holder of the Reference Package and (B) on the last
day of March, June, September and December in each year, in an amount per
whole share of this Series equal to the excess (if any) of $1.00 over the
aggregate dividends paid per whole share of this Series during the
three-month period ending on such last day. Each such dividend shall be paid
to the holders of record of shares of this Series on the date, not exceeding
sixty days preceding such dividend or distribution payment date, fixed for
that purpose by the Board of Directors in advance of payment of each
particular dividend or distribution. Dividends on each full and each
fractional share of this Series shall be cumulative from the date such full
or fractional share is originally issued; provided that any such full or
fractional share originally issued after a dividend record date and on or
prior to the dividend payment date to which such record date relates shall
not be entitled to receive the dividend payable on such dividend payment date
or any amount in respect of the period from such original issuance to such
dividend payment date.
The term "Reference Package" shall initially mean 1000 shares of Common
Stock, par value $0.01 per share ("Common Stock"), of the Corporation. In the
event the Corporation shall at any time (A) declare or pay a dividend on any
Common Stock payable in Common Stock, (B) subdivide any Common Stock or (C)
combine any Common Stock into a smaller number of shares, then and in each such
case the Reference Package after such event shall be the Common Stock that a
holder of the Reference Package immediately prior to such event would hold
thereafter as a result thereof.
Holders of shares of this Series shall not be entitled to any dividends,
whether payable in cash, property or stock, in excess of full cumulative
dividends, as herein provided, on this Series.
So long as any shares of this Series are outstanding, no dividend (other
than a dividend in Common Stock or in any other stock ranking junior to this
Series as to dividends and upon liquidation) shall be declared or paid or set
aside for payment or other distribution declared or made upon the Common Stock
or upon any other stock ranking junior to this Series as to dividends or upon
liquidation, nor shall any Common Stock nor any other stock of the Corporation
ranking junior to this Series as to dividends or upon liquidation be redeemed,
purchased or otherwise acquired for any consideration (or any moneys be paid to
or made available for a sinking fund for the redemption of any shares of any
such stock) by the Corporation (except by conversion into or exchange for stock
of the Corporation ranking junior to this Series as to dividends and upon
liquidation), unless, in each case, the full cumulative dividends (including the
dividend to be due upon payment of such dividend, distribution, redemption,
purchase or other acquisition) on all outstanding shares of this Series shall
have been, or shall contemporaneously be, paid.
(iv) In the event of any merger, consolidation, reclassification or
other transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property, then in
any such case the shares of this Series shall at the same time be similarly
exchanged or changed in an amount per whole share equal to the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, that a holder of the Reference Package would be entitled to receive
as a result of such transaction.
B-2
(v) In the event of any liquidation, dissolution or winding up of the
affairs of the Corporation, whether voluntary or involuntary, the holders of
full and fractional shares of this Series shall be entitled, before any
distribution or payment is made on any date to the holders of the Common Stock
or any other stock of the Corporation ranking junior to this Series, to be paid
in full an amount per whole share of this Series equal to the greater of (A)
$1.00 or (B) the aggregate amount distributed or to be distributed prior to such
date in connection with such liquidation, dissolution or winding up to a holder
of the Reference Package (such greater amount being hereinafter referred to as
the "Liquidation Preference"), together with accrued dividends to such
distribution or payment date, whether or not earned or declared. If such
payment shall have been made in full to all holders of shares of this Series,
the holders of shares of this Series as such shall have no right or claim to any
of the remaining assets of the Corporation.
In the event the assets of the Corporation available for distribution to
the holders of shares of this Series upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, shall be
insufficient to pay in full all amounts to which such holders are entitled
pursuant to the first paragraph of this Section (v), no such distribution shall
be made on account of any shares of any other class or series of Preferred Stock
ranking on a parity with the shares of this Series upon such liquidation,
dissolution or winding up unless proportionate distributive amounts shall be
paid on account of the shares of this Series, ratably in proportion to the full
distributable amounts for which holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the Corporation, the
holders of shares of this Series then outstanding shall be entitled to be paid
out of assets of the Corporation available for distribution to its stockholders
all amounts to which such holders are entitled pursuant to the first paragraph
of this Section (v) before any payment shall be made to the holders of Common
Stock or any other stock of the Corporation ranking junior upon liquidation to
this Series.
For the purposes of this Section (v), the consolidation or merger of, or
share exchange by, the Corporation with any other corporation shall not be
deemed to constitute a liquidation, dissolution or winding up of the
corporation.
(vi) The shares of this Series shall not be redeemable.
(vii) In addition to any other vote or consent of stockholders required
by law or by the Certificate of Incorporation, as amended, of the Corporation,
each whole share of this Series shall, on any matter, vote as a class with any
other capital stock comprising part of the Reference Package and voting on such
matter and shall have the number of votes thereon that a holder of the Reference
Package would have.
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IN WITNESS WHEREOF, Papa John's International, Inc. has caused this
Certificate of Designation of Rights and Preferences to be executed as of
February 14, 2000.
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By:
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Title: Vice Chairman and President
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