Exhibit 3.3
CERTIFICATE OF AMENDMENT
TO THE
RESTATED CERTIFICATE OF INCORPORATION
OF
CARROLS HOLDINGS CORPORATION
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Under Section 242 of the
General Corporation Law
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Carrols Holdings Corporation, a corporation organized and existing
under and by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), pursuant to Section 242 of the General Corporation Law of the
State of Delaware, hereby certifies as follows:
FIRST: The name of the Corporation is "Carrols Holdings Corporation".
SECOND: The Certificate of Incorporation of the Corporation originally
filed with the Secretary of State on September 15, 1986, was restated pursuant
to the Restated Certificate of Incorporation filed with the Secretary of State
on December 22, 1986, was amended and restated pursuant to the Certificate of
Amendment to Restated Certificate of Incorporation filed with the Secretary of
State on August 18, 1993, was further amended and restated pursuant to the
Certificate of Amendment to Restated Certificate of Incorporation filed with the
Secretary of State on February 20, 1997 and was further amended pursuant to the
Certificate of Amendment to Restated Certificate of Incorporation filed with the
Secretary of State on November 3, 1999.
THIRD: Pursuant to the unanimous written consent of the Board of Directors
of the Corporation, the following resolutions setting forth the proposed
amendment to the Restated Certificate of Incorporation of the Corporation were
duly adopted by the Board of Directors in accordance with the provision of
Section 141(f) of the General Corporation Law of the State of Delaware ("DGCL")
and were duly authorized and adopted by the holders of all of the outstanding
shares of the Corporation entitled to vote thereon in accordance with the
provision of Section 228 of the DGCL.
RESOLVED, that the Board of Directors of this Corporation hereby declares
it advisable and recommends to the shareholders that the shares of Common Stock,
par value $0.01 per share of the Corporation be increased and reclassified and
that, to effect such recommendations, the Restated Certificate of Incorporation
of the Corporation be amended by amending the first sentence and Sections A and
B of Article FOURTH of the Restated Certificate of Incorporation to read as
follows:
FOURTH: The total number of shares of capital stock which the Corporation
shall have authority to issue is Seven Million One Hundred Thousand (7,100,000)
shares, of which Seven Million (7,000,000) shares shall be shares of common
stock, par value $0.01 per share and One Hundred Thousand (100,000) shares shall
be shares of Preferred Stock, par value $0.01 per share (the "Preferred Stock").
A. General. The Board of Directors, by adoption of this Certificate of Amendment
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to the Restated Certificate of Incorporation may fix, in whole or part, the
preferences, limitations and relative rights, within the limits set forth under
applicable law, of one or more series of Common Stock of the Corporation before
the issuance of any shares of that series.
B. Carrols Stock, Pollo Tropical Stock and Taco Cabana Stock.
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(1) Designation of Series; Number of Shares of Each Series. One series of
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Common Stock is hereby designated as Carrols Stock ("Carrols Stock"), consisting
of Three Million (3,000,000) shares, par value $0.01 per share, a second series
of Common Stock is hereby designated as Pollo Tropical Stock ("Pollo Tropical
Stock") consisting of Two Million (2,000,000) shares, par value $0.01 per share,
and a third series of Common Stock is hereby designated as Taco Cabana Stock
("Taco Cabana Stock") consisting of Two Million (2,000,000) shares, par value
$0.01 per share. The number of shares of each such series may from time to time
be increased (but not above the total number of authorized shares of the class
of Common Stock) or decreased (but not below the number of shares of such series
then outstanding) by the Board of Directors of the Corporation.
(2) Dividends. Subject to any preferences, limitations and relative rights
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of any outstanding series of Preferred Stock, dividends may be declared and paid
upon the Carrols Stock, the Pollo Tropical Stock and the Taco Cabana Stock, upon
the terms with respect to each such series, and subject to the limitations
provided for below in this paragraph B(2) of this Article, as the Board of
Directors may determine.
(a) Dividends on Carrols Stock. Dividends on Carrols Stock may be
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declared and paid only out of the lesser of (i) the assets
legally available therefor and (ii) the Carrols Available Dividend Amount.
(b) Dividends on Pollo Tropical Stock. Dividends on Pollo Tropical
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Stock may be declared and paid only out of the lesser of (i) the assets
legally available therefor and (ii) the Pollo Tropical Available Dividend
Amount.
(c) Dividends on Taco Cabana Stock. Dividends on Taco Cabana Stock may
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be declared and paid only out of the lesser of (i) the assets legally
available therefor and (ii) the Taco Cabana Available Dividend Amount.
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(d) Allocation of Dividends Between Carrols Stock, Pollo Tropical Stock and
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Taco Cabana Stock. The Board of Directors, subject to the provisions of
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paragraphs B(2)(a), B(2)(b) and B(2)(c) of this Article, may at any time declare
and pay dividends exclusively on Carrols Stock, exclusively on Pollo Tropical
Stock, exclusively on Taco Cabana Stock, on each such series, in equal or
unequal amounts, or on any combination of such series, in equal or unequal
amounts, notwithstanding the relative amounts of the Carrols Available Dividend
Amount, the Pollo Tropical Available Dividend Amount, the Taco Cabana Available
Dividend Amount, the amount of dividends previously declared on each series, the
respective voting or liquidation rights of each series or any other factor.
(e) Share Distributions. Subject to paragraphs B(2)(a), B(2)(b) and B(2)(c)
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of this Article, as the case may be, and except as permitted by paragraphs
B(5)(a) and B(5)(b)(iii)(2) of this Article, the Board of Directors may declare
and pay dividends or distributions of shares of the Common Stock (or Convertible
Securities convertible into or exchangeable or exercisable for shares of the
Common Stock) on shares of the Common Stock or shares of the Preferred Stock
only as follows (and only to the extent that there are a sufficient number of
shares of Common Stock authorized and designated to the applicable series of
Common Stock):
(i) dividends or distributions of shares of Carrols Stock (or
Convertible Securities convertible into or exchangeable or exercisable for
shares of Carrols Stock) on shares of Carrols Stock; or shares of the
Preferred Stock attributed to the Carrols Group;
(ii) dividends or distributions of shares of Pollo Tropical Stock (or
Convertible Securities convertible into or exchangeable or exercisable for
shares of Pollo Tropical Stock) on shares of Pollo Tropical Stock or shares
of the Preferred Stock attributed to the Pollo Tropical Group;
(iii) dividends or distributions of shares of Pollo Tropical Stock (or
Convertible Securities convertible into or exchangeable or exercisable for
shares of Pollo Tropical Stock) on shares of Carrols Stock or shares of the
Preferred Stock attributed to the Carrols Group, if any, but only if the
sum of (1) the number of shares of Pollo Tropical Stock to be so issued (or
the number of such shares which would be issuable upon conversion, exchange
or exercise of any Convertible Securities to be so issued) and (2) the
number of shares of Pollo Tropical Stock which are issuable upon
conversion, exchange or exercise of any Convertible Securities then
outstanding that are attributed in accordance with this Article to the
Carrols Group is less than or equal to the Number of Pollo Tropical Shares
Issuable with Respect to the Pollo Tropical Inter-Group Interest;
(iv) dividends or distributions of shares of Taco Cabana Stock (or
Convertible Securities convertible into or exchangeable or exercisable for
shares of Taco Cabana Stock) on shares of Taco Cabana Stock or shares of
the Preferred Stock attributed to the Taco Cabana Group; and
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(v) dividends or distributions of shares of Taco Cabana Stock
(or Convertible Securities convertible into or exchangeable or
exercisable for shares of Taco Cabana Stock) on shares of Carrols
Stock or shares of the Preferred Stock attributed to the Carrols
Group, if any, but only if the sum of (1) the number of shares of Taco
Cabana Stock to be so issued (or the number of such shares which would
be issuable upon conversion, exchange or exercise of any Convertible
Securities to be so issued) and (2) the number of shares of Taco
Cabana Stock which are issuable upon conversion, exchange or exercise
of any Convertible Securities then outstanding that are attributed in
accordance with this Article to the Carrols Group is less than or
equal to the Number of Taco Cabana Shares Issuable with Respect to the
Taco Cabana Inter-Group Interest.
(3) Voting Rights.
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(a) The holders of Carrols Stock shall have the exclusive right to
vote for the election of directors and on all other matters requiring
action by the stockholders or submitted to the stockholders for action,
except as may be determined by the Board of Directors in establishing any
series of Common or Preferred Stock or as otherwise may be required by law.
Each share of Carrols Stock shall entitle the holder thereof to one vote.
(b) No holder of outstanding shares of Pollo Tropical Stock or Taco
Cabana Stock shall be entitled (i) to vote for the election of directors or
upon any other matter, including, without limitation, upon any amendment to
the Company's Certificate of Incorporation to increase or decrease the
number of authorized shares of any class of the Company's capital stock, or
(ii) to receive notice of or to participate in any meeting of the
stockholders of the Corporation, except as may be required by law.
(4) Liquidation Rights. In the event of the dissolution, liquidation or
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winding up of the Corporation, whether voluntary or involuntary, the rights of
the holders of Carrols Stock, Pollo Tropical Stock and Taco Cabana Stock shall
be as follows:
(a) After the Corporation has satisfied or made provisions for its
debts and obligations and for the payment to the holders of shares of any
class or series of capital stock having preferential rights to receive
distributions of the assets of the Corporation (including any accumulated
and unpaid dividends), the holders of Carrols Stock, Pollo Tropical Stock
and Taco Cabana Stock shall be entitled to receive the assets, if any, of
the Corporation remaining for distribution, on a per share basis in
proportion to the respective liquidation units for all series of Common
Stock. The total outstanding Carrols Stock shall have 7.5 liquidation
units, the total outstanding Pollo Tropical Stock shall have 1 liquidation
unit and the total outstanding Taco Cabana Stock shall have 1.5 liquidation
units. Upon the determination by the Corporation of the amount of assets
the holders of the Carrols Stock, the Pollo Tropical Stock and the Taco
Cabana Stock, respectively, shall be entitled to receive (determined in
accordance with the then applicable liquidation units), (A) the amount of
assets to be distributed to the holders of Pollo Tropical Stock shall be
reduced and the holders of Pollo Tropical Stock shall be entitled to
receive, on a pro rata basis, an amount equal to the product of (i) such
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distributable amount of assets in respect of Pollo Tropical Stock and (ii)
the Outstanding Pollo Tropical Fraction and (B) the amount of assets to be
distributed to the holders of Taco Cabana Stock shall be reduced and the
holders of Taco Cabana Stock shall be entitled to receive, on a pro rata
basis, an amount equal to the product of (i) such distributable amount of
assets in respect of Taco Cabana Stock and (ii) the Outstanding Taco Cabana
Fraction. The liquidation units of the Carrols Stock, the Pollo Tropical
Stock and the Taco Cabana Stock shall be adjusted by the Board as
appropriate to reflect equitably any subdivision (by stock split or
otherwise) or combination (by reverse stock split or otherwise) of such
class of Common Stock or any dividend or other distribution of shares or
similar transaction with respect to such class of Common Stock. Whenever a
change in the liquidation units occurs, the Corporation shall prepare and
file a statement of such change with the Secretary of the Corporation and
distribute a notice of such change to all holders of shares of such class
or series of Common Stock, together with a notice of such stock split,
reverse split, distribution or other transaction requiring such change.
(b) For the purposes of this paragraph B(4), any merger or business
combination involving the Corporation or any sale of all or substantially
all of the assets of the Corporation shall not be treated as a liquidation,
dissolution or winding up of the Corporation.
(5) Redemption or Conversion of the Common Stock. The Carrols Stock is
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subject to redemption and the Pollo Tropical Stock and the Taco Cabana Stock are
each subject to redemption or conversion upon the terms provided below in this
paragraph B(5) of this Article; provided, however, that no series of Common
Stock may be redeemed or converted if all of the other series have been redeemed
or converted, as the case may be, in their entirety or notice thereof shall have
been given as required by this paragraph B(5) of this Article.
(a) Mandatory and Optional Redemption or Conversion of Common Stock
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Other than for Middle Tier Stock.
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(i) In the event of the Disposition, in one transaction or a
series of related transactions, by the Corporation and/or its
subsidiaries of all or substantially all of the properties and assets
attributed to any Group to one or more persons or entities (other than
(1) the Disposition by the Corporation of all or substantially all of
its properties and assets in one transaction or a series of related
transactions in connection with the liquidation, dissolution or
winding up of the Corporation and the distribution of assets to
stockholders as referred to in paragraph B(4) of this Article, (2) the
Disposition of the properties and assets of any Group as contemplated
by paragraph B(5)(b) of this Article or otherwise to all holders of
shares of such Group divided among such holders on a pro rata basis in
accordance with the number of shares of stock issued in respect of
such Group outstanding and, in the case of a Disposition of the
properties and assets attributed to either Middle Tier Group, to the
Corporation or subsidiaries thereof, divided among such holders and
the Corporation or subsidiaries thereof on a pro rata basis in
accordance with the number of shares of stock issued in respect of
such Group outstanding and (A) in the case of the Pollo Tropical
Group, the
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Number of Pollo Tropical Shares Issuable with Respect to the Pollo
Tropical Inter-Group Interest and (B) in the case of the Taco Cabana
Group, the number of Taco Cabana Shares Issuable with Respect to the
Taco Cabana Inter-Group Interest, or (3) to any person or entity
controlled (as determined by the Board of Directors) by the
Corporation), the Corporation shall, on or prior to the 30th Business
Day after the date of consummation of such Disposition (the
"Disposition Date"), pay a dividend on the Common Stock relating to
such Group or redeem some or all of such Common Stock, all as provided
by the following paragraph B(5)(a)(i) of this Article and, to the
extent applicable, by paragraph B(5)(d) of this Article, as the Board
of Directors shall have selected among such alternatives;
provided that there are assets legally available therefor:
(a) pay to the holders of the shares of the series of
the Common Stock relating to the Group subject to such
Disposition a dividend, as the Board of Directors shall have
declared subject to compliance with paragraph B(2) of this
Article, in cash and/or in securities (other than a dividend
of the Common Stock) or other property having a Fair Value
as of the Disposition Date in the aggregate equal to (I) in
the case of a Disposition of the properties and assets
attributed to the Carrols Group, the Net Proceeds of such
Disposition, (II) in the case of a Disposition of the
properties and assets attributed to the Pollo Tropical
Group, the product of the Outstanding Pollo Tropical
Fraction as of the record date for determining holders
entitled to receive such dividend and the Net Proceeds of
such Disposition and (III) in the case of a Disposition of
the properties and assets attributed to the Taco Cabana
Group, the product of the Outstanding Taco Cabana Fraction
as of the record date for determining holders entitled to
receive such dividend and the Net Proceeds of such
Disposition; or
(b)(I) subject to the last sentence of this paragraph
B(5)(a)(i) of this Article, if such Disposition involves all
(not merely substantially all) of the properties and assets
attributed to such Group, redeem as of the Redemption Date
provided by paragraph B(5)(d)(iii), all outstanding shares
of the Common Stock relating to the Group subject to such
Disposition in exchange for cash and/or for securities
(other than the Common Stock) or other property having a
Fair Value as of the Disposition Date in the aggregate equal
to (A) in the case of a Disposition of the properties and
assets attributed to the Carrols Group, the Net Proceeds of
such Disposition, (B) in the case of a Disposition of the
properties and assets attributed to the Pollo Tropical
Group, the product of the Outstanding Pollo Tropical
Fraction as of such Redemption Date and the Net Proceeds of
such Disposition and (C) in the case of a Disposition of the
properties and assets attributed to the Taco
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Cabana Group, the product of the Outstanding Taco Cabana
Fraction as of such Redemption Date and the Net Proceeds of
such Disposition; or
(II) subject to the last sentence of this paragraph
B(5)(a)(i) of this Article, if such Disposition involves
substantially all (but not all) of the properties and assets
attributed to such Group, redeem as of the Redemption Date
provided by paragraph B(5)(d)(iv) of this Article such
number of whole shares of the series of the Common Stock
relating to the Group subject to such Disposition (which may
be all of, but not more than, such shares outstanding) as
have (A) in the case of a Disposition of the properties and
assets attributed to the Carrols Group, the Fair Value as of
the Disposition Date of the Net Proceeds of such
Disposition, in consideration for cash and/or securities
(other than the Common Stock) or other property having a
Fair Value in the aggregate equal to such Net Proceeds of
such Disposition, (B) in the case of a Disposition of the
properties and assets attributed to the Pollo Tropical
Group, the product of the Outstanding Pollo Tropical
Fraction as of the date such shares are selected for
redemption and the Fair Value as of the Disposition Date of
the Net Proceeds of such Disposition in consideration for
cash and/or securities (other than the Common Stock) or
other property having a Fair Value in the aggregate equal to
such product or (C) in the case of a Disposition of the
properties and assets attributed to the Taco Cabana Group,
the product of the Outstanding Taco Cabana Fraction as of
the date such shares are selected for redemption and the
Fair Value as of the Disposition Date of the Net Proceeds of
such Disposition in consideration for cash and/or securities
(other than the Common Stock) or other property having a
Fair Value in the aggregate equal to such product.
Notwithstanding the foregoing provisions of this paragraph B(5)(a)(i)
of this Article, the Corporation shall redeem shares of a series of the
Common Stock as provided by paragraphs B(5)(a)(i)(b)(I) or (II) of this
Article only if the amount to be paid in redemption of such stock is less
than or equal to either the Carrols Available Dividend Amount, the Pollo
Tropical Available Dividend Amount or the Taco Cabana Available Dividend
Amount, as the case may be, with respect to the Group subject to such
Disposition as of the Redemption Date.
(ii) For purposes of this paragraph B(5)(a) of this Article:
(1) as of any date, "substantially all of the properties and
assets" attributed to any Group shall mean a portion of such
properties and assets (x) that represents at least 80% of the
Fair Value of the properties and assets attributed to such Group
as of such date or (y) from which were derived at least 80% of
the aggregate revenues for the immediately
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preceding twelve fiscal quarterly periods of the Corporation
(calculated on a pro forma basis to include revenues derived
from any of such properties and assets acquired during such
period) derived from the properties and assets of such Group
as of such date;
(2) in the case of a Disposition of the properties and
assets attributed to any Group in a series of related
transactions, such Disposition shall not be deemed to have
been consummated until the consummation of the last of such
transactions; and
(3) the Board of Directors may pay any dividend or
redemption price referred to in paragraph B(5)(a)(i) of this
Article in cash, securities (other than the Common Stock) or
other property, regardless of the form or nature of the
proceeds of the Disposition.
(iii) At any time prior to the closing of a firm commitment
initial public offering relating to the Carrols Stock (the
"IPO"), the Board of Directors may declare that each outstanding
share of Middle Tier Stock or Convertible Security convertible
into or exchangeable for Middle Tier Stock shall be converted, as
of the Conversion Date provided by paragraph B(5)(d)(v) of this
Article, into the number of fully paid and nonassessable shares
of Carrols Stock equal the Fair Value Ratio of the shares of each
such series of Middle Tier Stock to a share of Carrols Stock.
(iv) If the Corporation shall determine to combine the
businesses relating to the Pollo Tropical Group and the Taco
Cabana Group through a sale, transfer, assignment or other
disposition (whether by merger, consolidation, sale or
contribution of assets or stock or otherwise) of properties or
assets (including stock, other securities and goodwill) where the
Pollo Tropical Group would be the surviving Group, then each
outstanding share of Taco Cabana Stock or Convertible Security
convertible into or exchangeable for Taco Cabana stock shall be
converted, as of the Conversion Date provided by paragraph
B(5)(d)(v) of this Article, into the number of fully paid and
nonassessable shares of Pollo Tropical Stock equal to the Fair
Value Ratio of a share of Taco Cabana Stock to a share of Pollo
Tropical Stock.
(v) If the Corporation shall determine to combine the
businesses relating to the Taco Cabana Group and the Pollo
Tropical Group through a sale, transfer, assignment or other
disposition (whether by merger, consolidation, sale or
contribution of assets or stock or otherwise) of properties or
assets (including stock, other securities and goodwill) where the
Taco Cabana Group would be the surviving Group, then each
outstanding share of Pollo Tropical Stock or Convertible Security
convertible into or exchangeable for Pollo Tropical stock shall
be converted, as of the Conversion Date provided by paragraph
B(5)(d)(v) of this Article, into the number of fully paid and
nonassessable shares of Taco Cabana Stock equal to the Fair Value
Ratio of a share of Pollo Tropical Stock to a share of Taco
Cabana Stock.
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(b) Redemption of Common Stock for Stock of Subsidiary.
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(i) At any time on or after the date on which the
Corporation has transferred all of the assets and liabilities
attributed to the Pollo Tropical Group (and no other assets or
liabilities of the Corporation or any subsidiary thereof) to one
or more wholly-owned subsidiaries of the Corporation (each, a
"Pollo Tropical Group Subsidiary"), the Board of Directors may,
provided that there are assets legally available therefor, redeem
all of the outstanding shares of Pollo Tropical Stock, on a
Redemption Date of which notice is delivered in accordance with
paragraph B(5)(d)(vi) of this Article, in exchange for the number
of shares of common stock of each Pollo Tropical Group Subsidiary
equal to the product of the Outstanding Pollo Tropical Fraction
and the number of shares of common stock of such Pollo Tropical
Group Subsidiary to be outstanding immediately following such
exchange of shares, such Pollo Tropical Group Subsidiary shares
to be delivered to the holders of shares of Pollo Tropical Stock
on the Redemption Date either directly or indirectly through
another Pollo Tropical Group Subsidiary (as a wholly-owned
subsidiary thereof) and to be divided among the holders of Pollo
Tropical Stock pro rata in accordance with the number of shares
of Pollo Tropical Stock held by each on such Redemption Date,
each of which shares of common stock of such Pollo Tropical Group
Subsidiary shall be, upon such delivery, fully paid and
nonassessable.
(ii) At any time on or after the date on which the
Corporation has transferred all of the assets and liabilities
attributed to the Taco Cabana Group (and no other assets or
liabilities of the Corporation or any subsidiary thereof) to one
or more wholly-owned subsidiaries of the Corporation (each, a
"Taco Cabana Group Subsidiary"), the Board of Directors may,
provided that there are assets legally available therefor, redeem
all of the outstanding shares of Taco Cabana Stock, on a
Redemption Date of which notice is delivered in accordance with
paragraph B(5)(d)(vi) of this Article, in exchange for the number
of shares of common stock of each Taco Cabana Group Subsidiary
equal to the product of the Outstanding Taco Cabana Fraction and
the number of shares of common stock of such Taco Cabana Group
Subsidiary to be outstanding immediately following such exchange
of shares, such Taco Cabana Group Subsidiary shares to be
delivered to the holders of shares of Taco Cabana Stock on the
Redemption Date either directly or indirectly through another
Taco Cabana Group Subsidiary (as a wholly-owned subsidiary
thereof) and to be divided among the holders of Taco Cabana Stock
pro rata in accordance with the number of shares of Taco Cabana
Stock held by each on such Redemption Date, each of which shares
of common stock of such Taco Cabana Group Subsidiary shall be,
upon such delivery, fully paid and nonassessable.
(iii) At any time on or after the date on which the
Corporation has transferred all of the assets and liabilities
attributed to the Carrols Group (and no other assets or
liabilities of the Corporation or any subsidiary thereof) to one
or more wholly-owned subsidiaries of the Corporation (each, a
"Carrols Group
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Subsidiary"), the Board of Directors may, provided that there are
assets legally available therefor;
(1) if both the Number of Pollo Tropical Shares
Issuable with Respect to the Pollo Tropical Inter-Group
Interest and the number of Taco Cabana Shares Issuable with
Respect to the Taco Cabana Inter-Group Interest is zero,
redeem all of the outstanding shares of Carrols Stock, on a
Redemption Date of which notice is delivered in accordance
with paragraph B(5)(d)(vi) of this Article, in exchange for
all of the shares of common stock of each Carrols Group
Subsidiary as will be outstanding immediately following such
exchange of shares, such shares of common stock of each
Carrols Group Subsidiary to be delivered to the holders of
shares of Carrols Stock on the Redemption Date either
directly or indirectly through another Carrols Group
Subsidiary (as a wholly-owned subsidiary thereof) and to be
divided among the holders of Carrols Stock pro rata in
accordance with the number of shares of Carrols Stock held
by each on such Redemption Date, each of which shares of
common stock of such Carrols Group Subsidiary shall be, upon
such delivery, fully paid and nonassessable; or
(2) if either the Number of Pollo Tropical Shares
Issuable with Respect to the Pollo Tropical Inter-Group
Interest or the Number of Taco Cabana Shares Issuable with
Respect to the Taco Cabana Inter-Group Interest, is greater
than zero, either (x) redeem all of the outstanding shares
of Carrols Stock, on such a Redemption Date, in exchange for
(1) all of the shares of common stock of each Carrols Group
Subsidiary as will be outstanding immediately following such
exchange of shares and (2) (A) if the Number of Pollo
Tropical Shares Issuable with Respect to the Pollo Tropical
Inter-Group Interest is greater than zero and there are a
sufficient number of shares of Common Stock authorized and
designated as Pollo Tropical Stock, a number of shares of
Pollo Tropical Stock equal to the Number of Pollo Tropical
Shares Issuable with Respect to the Pollo Tropical
Inter-Group Interest and/or (B) if the Number of Taco Cabana
Shares Issuable with Respect to the Taco Cabana Inter-Group
Interest is greater than zero and there are a sufficient
number of shares of Common Stock authorized and designated
as Taco Cabana Stock, a number of shares of Taco Cabana
Stock equal to the Number of Taco Cabana Shares Issuable
with Respect to the Taco Cabana Inter-Group Interest, such
shares of common stock of each Carrols Group Subsidiary to
be delivered to the holders of shares of Carrols Stock on
the Redemption Date either directly or indirectly through
another Carrols Group Subsidiary (as a wholly-owned
subsidiary thereof) and the shares of common stock of each
Carrols Group Subsidiary and the shares of Pollo Tropical
Stock and Taco Cabana Stock, as applicable, to be divided
among the holders of Carrols Stock pro rata in accordance
with the number of shares of Carrols Stock held by each on
such Redemption Date, each of which shares of common stock
of each Carrols Group Subsidiary and shares of Pollo
Tropical Stock
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and Taco Cabana Stock, as applicable, shall be, upon such
delivery, fully paid and nonassessable; or (y) (1) redeem
all of the outstanding shares of Carrols Stock as
contemplated by clause (x) (1) above and (2) issue to one or
more of the Carrols Group Subsidiaries, as applicable, (A) a
number of shares of Pollo Tropical Stock equal to the Number
of Pollo Tropical Shares Issuable with Respect to the Pollo
Tropical Inter-Group Interest (provided there are a
sufficient number of shares of Common Stock authorized and
designated as Pollo Tropical Stock) and/or (B) a number of
shares of Taco Cabana Stock equal to the Number of Taco
Cabana Shares Issuable with Respect to the Taco Cabana
Inter-Group Interest (provided there are a sufficient number
of shares of Common Stock authorized and designated as Taco
Cabana Stock).
(iv) At any time on or after the date on which the
Corporation has transferred all of the assets and liabilities
attributed to both Middle Tier Groups (and no other assets or
liabilities of the Corporation or any subsidiary thereof) to one
or more wholly-owned subsidiaries of the Corporation (each, a
"Middle Tier Combination Subsidiary"), the Board of Directors
may, provided that there are assets legally available therefor,
redeem all of the outstanding shares of Taco Cabana Stock and
Pollo Tropical Stock, on a Redemption Date of which notice is
delivered in accordance with paragraph B(5)(d)(vi) of this
Article, in exchange for the number of shares of common stock of
each Middle Tier Combination Subsidiary equal to :
(1) in the case of shares of Taco Cabana Stock, the
product of,
(A) (x) the number of shares of such Middle Tier
Combination Subsidiary to be outstanding
immediately following such transaction
multiplied by (y) the ratio of the Fair
Value of the Taco Cabana Group immediately
prior to such transaction to the combined
Fair Value of both Middle Tier Groups
immediately prior to such transaction; and
(B) the Outstanding Taco Cabana Fraction as of
such date;
and
(2) in the case of shares of Pollo Tropical Stock, the
product of,
(A) (x) the number of shares of such Middle Tier
Combination Subsidiary to be outstanding
immediately following such transaction
multiplied by (y) the ratio of the Fair
Value of the Pollo Tropical Group
immediately prior to such transaction to the
combined Fair Value of both Middle Tier
Groups immediately prior to such
transaction; and
(B) the Outstanding Pollo Tropical Fraction as
of such date;
11
such Middle Tier Combination Subsidiary shares to be delivered to
the holders of shares of Taco Cabana Stock and Pollo Tropical
Stock on the Redemption Date either directly or indirectly
through another Middle Tier Combination Subsidiary (as a
wholly-owned subsidiary thereof) and to be divided among the
holders of each such Middle Tier Stock pro rata in accordance
with the number of shares of Taco Cabana Stock or Pollo Tropical
Stock, as the case may be, held by each on such Redemption Date,
each of which shares of common stock of such Middle Tier
Combination Subsidiary shall be, upon such delivery, fully paid
and nonassessable.
(c) Treatment of Convertible Securities. After any Conversion Date or
-----------------------------------
Redemption Date on which all outstanding shares of any series of the Common
Stock are converted or redeemed, any share of such series of the Common
Stock that is to be issued on conversion, exchange or exercise of any
Convertible Securities shall, immediately upon such conversion, exchange or
exercise and without any notice from or to, or any other action on the part
of, the Corporation or its Board of Directors or the holder of such
Convertible Security be converted into the amount of cash and/or the number
of shares of the kind of capital stock and/or other securities or property
of the Corporation that the number of shares of such series of the Common
Stock that were to be issued upon such conversion, exchange or exercise
would have received had such shares been outstanding on such Conversion
Date or Redemption Date. The provisions of the immediately preceding
sentence shall not apply to the extent that other adjustments in respect of
such conversion, exchange or redemption of a series of the Common Stock are
otherwise made pursuant to the provisions of such Convertible Securities.
(d) Notice and Other Provisions.
---------------------------
(i) Not later than the 30/th/ Business Day following the
consummation of a Disposition referred to in paragraph B(5)(a)(i) of
this Article, the Corporation shall notify the holders of Common Stock
with respect to (1) the Net Proceeds of such Disposition, (2) the
number of shares outstanding of the series of the Common Stock
relating to the Group subject to such Disposition, (3) the number of
shares of such series of Common Stock into or for which Convertible
Securities are then convertible, exchangeable or exercisable and the
conversion, exchange or exercise price thereof and (4) in the case of
a Disposition of the properties and assets attributable to the Pollo
Tropical Group or to the Taco Cabana Group, the Outstanding Pollo
Tropical Fraction or the Outstanding Taco Cabana Fraction, as the case
may be, on the date of such notice.
(ii) If the Corporation determines to pay a dividend
pursuant to paragraph B(5)(a)(i)(a) of this Article, the Corporation
shall, not later than the 30th Business Day following the consummation
of the Disposition referred to in such paragraph, cause notice to be
given to each holder of shares of the series of the Common Stock
relating to the Group subject to such Disposition and to each holder
of Convertible Securities that are convertible into or exchangeable or
exercisable for shares of such series of Common Stock (unless
alternate provision for such notice to the holders of such Convertible
Securities is made pursuant to
12
the terms of such Convertible Securities), setting forth (1) the
record date for determining holders entitled to receive such dividend,
which shall be not earlier than the 40th Business Day and not later
than the 50th Business Day following the consummation of such
Disposition, (2) the anticipated payment date of such dividend (which
shall not be more than 85 Business Days following the consummation of
such Disposition), (3) the type of property to be paid as such
dividend in respect of the outstanding shares of such series of Common
Stock, (4) the Net Proceeds of such Disposition, (5) in the case of a
Disposition of the properties and assets attributable to the Pollo
Tropical Group or the Taco Cabana Group, as the case may be, the
Outstanding Pollo Tropical Fraction or the Outstanding Taco Cabana
Fraction, as the case may be, on the date of such notice, (6) the
number of outstanding shares of such series of Common Stock and the
number of shares of such series of Common Stock into or for which
outstanding Convertible Securities are then convertible, exchangeable
or exercisable and the conversion, exchange or exercise price thereof
and (7) in the case of notice to be given to holders of Convertible
Securities, a statement to the effect that a holder of such
Convertible Securities shall be entitled to receive such dividend only
if such holder properly converts, exchanges or exercises such
Convertible Securities on or prior to the record date referred to in
clause (1) of this sentence. Such notice shall be sent by first-class
mail, postage prepaid, to each such holder at such holder's address as
the same appears on the transfer books of the Corporation.
(iii) If the Corporation determines to undertake a redemption
pursuant to paragraph B(5)(a)(i)(b)(I) of this Article, the
Corporation shall, not less than 35 Business Days and not more than 45
Business Days prior to the Redemption Date, cause notice to be given
to each holder of shares of the series of the Common Stock relating to
the Group subject to the Disposition referred to in such paragraph and
to each holder of Convertible Securities convertible into or
exchangeable or exercisable for shares of such series of Common Stock
(unless alternate provision for such notice to the holders of such
Convertible Securities is made pursuant to the terms of such
Convertible Securities), setting forth (1) a statement that all shares
of such series of Common Stock outstanding on the Redemption Date
shall be redeemed, (2) the Redemption Date (which shall not be more
than 85 Business Days following the consummation of such Disposition),
(3) the type of property in which the redemption price for the shares
of such series of Common Stock to be redeemed is to be paid, (4) the
Net Proceeds of such Disposition, (5) in the case of a Disposition of
the properties and assets attributed to the Pollo Tropical Group or
the Taco Cabana Group, the Outstanding Pollo Tropical Fraction or the
Outstanding Taco Cabana Fraction, as the case may be, on the date of
such notice, (6) the place or places where certificates for shares of
such series of Common Stock, properly endorsed or assigned for
transfer (unless the Corporation waives such requirement), are to be
surrendered for delivery of cash and/or securities or other property,
(7) the number of outstanding shares of such series of Common Stock
and the number of shares of such series of the Common Stock into or
for which such outstanding Convertible Securities are then
convertible, exchangeable or exercisable and the conversion, exchange
or exercise
13
price thereof, (8) in the case of notice to be given to holders of
Convertible Securities, a statement to the effect that a holder of
such Convertible Securities shall be entitled to participate in such
redemption only if such holder properly converts, exchanges or
exercises such Convertible Securities on or prior to the Redemption
Date referred to in clause (2) of this sentence and a statement as to
what, if anything, such holder will be entitled to receive pursuant to
the terms of such Convertible Securities or, if applicable, this
paragraph B(5) of this Article if such holder thereafter converts,
exchanges or exercises such Convertible Securities and (9) a statement
to the effect that, except as otherwise provided by paragraph
B(5)(d)(ix) of this Article, dividends on such shares of the Common
Stock shall cease to be paid as of such Redemption Date. Such notice
shall be sent by first-class mail, postage prepaid, to each such
holder at such holder's address as the same appears on the transfer
books of the Corporation.
(iv) If the Corporation determines to undertake a redemption
pursuant to paragraph B(5)(a)(i)(b)(II) of this Article, the
Corporation shall, not later than the 30th Business Day following the
consummation of the Disposition referred to in such paragraph, cause
notice to be given to each holder of shares of the series of the
Common Stock relating to the Group subject to such Disposition and to
each holder of Convertible Securities that are convertible into or
exchangeable or exercisable for shares of such series of Common Stock
(unless alternate provision for such notice to the holders of such
Convertible Securities is made pursuant to the terms of such
Convertible Securities) setting forth (1) a date not earlier than the
40th Business Day and not later than the 50th Business Day following
the consummation of the Disposition in respect of which such
redemption is to be made on and which shares of such series of the
Common Stock shall be selected for redemption, (2) the anticipated
Redemption Date (which shall not be more than 85 Business Days
following the consummation of such Disposition), (3) the type of
property in which the redemption price for the shares to be redeemed
is to be paid, (4) the Net Proceeds of such Disposition, (5) in the
case of a Disposition of the properties and assets attributed to the
Pollo Tropical Group or to the Taco Cabana Group, the Outstanding
Pollo Tropical Fraction or the Outstanding Taco Cabana Fraction, as
the case may be, (6) the number of shares of such series of Common
Stock outstanding and the number of shares of such series of Common
Stock into or for which outstanding Convertible Securities are then
convertible, exchangeable or exercisable and the conversion, exchange
or exercise price thereof, (7) in the case of notice to be given to
holders of Convertible Securities, a statement to the effect that a
holder of such Convertible Securities shall be eligible to participate
in such selection for redemption only if such holder properly
converts, exchanges or exercises such Convertible Securities on or
prior to the record date referred to in clause (1) of this sentence,
and a statement as to what, if anything, such holder will be entitled
to receive pursuant to the terms of such Convertible Securities or, if
applicable, this paragraph B(5) of this Article if such holder
thereafter converts, exchanges or exercises such Convertible
Securities and (8) a statement that the Corporation will not be
required to register a transfer of any shares of such series of the
Common Stock for a period of 15 Business Days next preceding the date
referred to in clause (1) of this sentence.
14
Promptly following the date referred to in clause (1) of the preceding
sentence, but not earlier than 40 Business Days nor later than 50
Business Days following the consummation of such Disposition, the
Corporation shall cause a notice to be given to each holder of record
of shares of such series of Common Stock to be redeemed setting forth
(1) the number of shares of such series of Common Stock held by such
holder to be redeemed, (2) a statement that such shares of such series
of Common Stock shall be redeemed, (3) the Redemption Date, (4) the
kind and per share amount of cash and/or securities or other property
to be received by such holder with respect to each share of such
series of Common Stock to be redeemed, including details as to the
calculation thereof, (5) the place or places where certificates for
shares of such series of Common Stock, properly endorsed or assigned
for transfer (unless the Corporation shall waive such requirement),
are to be surrendered for delivery of such cash and/or securities or
other property, (6) if applicable, a statement to the effect that the
shares being redeemed may no longer be transferred on the transfer
books of the Corporation after the Redemption Date and (7) a statement
to the effect that, subject to paragraph B(5)(d)(ix) of this Article,
dividends on such shares of such series of Common Stock shall cease to
be paid as of the Redemption Date. Such notices shall be sent by
first-class mail, postage prepaid, to each such holder at such
holder's address as the same appears on the transfer books of the
Corporation.
(v) If the Corporation determines to convert Middle Tier Stock
into Carrols Stock (or another class or series of common stock of the
Corporation) pursuant to paragraph B(5)(a)(iii) of this Article or to
convert one series of Middle Tier Stock into another series of Middle
Tier Stock pursuant to paragraph B(5)(a)(iv) or (v) or this Article,
the Corporation shall, not less than 35 Business Days prior to the
Conversion Date, cause notice to be given to each holder of shares of
the series of Middle Tier Stock to be so converted and to each holder
of Convertible Securities that are convertible into or exchangeable or
exercisable for shares of such series of Middle Tier Stock (unless
alternate provision for such notice to the holders of such Convertible
Securities is made pursuant to the terms of such Convertible
Securities) setting forth (1) a statement that all outstanding shares
of such series of Middle Tier Stock shall be converted, (2) the
anticipated Conversion Date, (3) the per share number of shares of
Carrols Stock or another class or series of common stock of the
Corporation, as the case may be, to be received with respect to each
share of such series of Middle Tier Stock, including details as to the
calculation thereof, (4) the place or places where certificates for
shares of such series of Middle Tier Stock, properly endorsed or
assigned for transfer (unless the Corporation shall waive such
requirement), are to be surrendered for delivery of certificates for
shares of such series of Middle Tier Stock, (5) the number of
outstanding shares of such series of Middle Tier Stock and the number
of shares of such series of Middle Tier Stock into or for which
outstanding Convertible Securities are then convertible, exchangeable
or exercisable and the conversion, exchange or exercise price thereof,
(6) a statement to the effect that, subject to paragraph B(5)(d)(ix)
of this Article, dividends on such series of Middle Tier Stock shall
cease to be paid as of such Conversion Date and (7) in the case of
notice to holders of such Convertible Securities, a
15
statement to the effect that a holder of such Convertible Securities
shall be entitled to receive shares of such series of Middle Tier
Stock upon such conversion only if such holder properly converts,
exchanges or exercises such Convertible Securities on or prior to such
Conversion Date and a statement as to what, if anything, such holder
will be entitled to receive pursuant to the terms of such Convertible
Securities or, if applicable, this paragraph B(5) of this Article if
such holder thereafter converts, exchanges or exercises such
Convertible Securities. Such notice shall be sent by first-class mail,
postage prepaid, to each such holder at such holder's address as the
same appears on the transfer books of the Corporation.
(vi) If the Corporation determines to redeem shares of any
series of the Common Stock pursuant to paragraph B(5)(b) of this
Article, the Corporation shall cause notice to be given to each holder
of shares of such series of the Common Stock to be redeemed and to
each holder of Convertible Securities that are convertible into or
exchangeable or exercisable for shares of such series of the Common
Stock (unless alternate provision for such notice to the holders of
such Convertible Securities is made pursuant to the terms of such
Convertible Securities), setting forth (1) a statement that all shares
of such series of the Common Stock outstanding on the Redemption Date
shall be redeemed in exchange for shares of common stock of each
Carrols Group Subsidiary (and, if such redemption is pursuant to
paragraph B(5)(b)(iii)(2)(x) of this Article, Pollo Tropical Stock or
Taco Cabana Stock, as the case may be) or common stock of each Pollo
Tropical Group Subsidiary and/or each Taco Cabana Group Subsidiary, as
the case may be, or common stock of each Middle Tier Combination
Subsidiary, as the case may be, (2) the Redemption Date, (3) in the
case of a redemption of the Pollo Tropical Stock, the Outstanding
Pollo Tropical Fraction on the date of such notice and in the case of
a redemption of the Taco Cabana Stock, the Outstanding Taco Cabana
Fraction on the date of such notice, (4) the place or places where
certificates for shares of the series of the Common Stock to be
redeemed, properly endorsed or assigned for transfer (unless the
Corporation shall waive such requirement), are to be surrendered for
delivery of certificates for shares of the common stock of each
Carrols Group Subsidiary (and, if such redemption is pursuant to
paragraph B(5)(b)(iii)(2)(x) of this Article, Pollo Tropical Stock or
Taco Cabana Stock, as applicable) or common stock of each Pollo
Tropical Group Subsidiary and/or each Taco Cabana Group Subsidiary, as
the case may be, or common stock of each Middle Tier Combination
Subsidiary, as the case may be, (5) a statement to the effect that,
subject to paragraph B(5)(d)(ix) of this Article, dividends on such
shares of the Common Stock shall cease to be paid as of such
Redemption Date, (6) the number of shares of such series of the Common
Stock outstanding and the number of shares of such series of Common
Stock into or for which outstanding Convertible Securities are then
convertible, exchangeable or exercisable and the conversion, exchange
or exercise price thereof and (7) in the case of notice to holders of
Convertible Securities, a statement to the effect that a holder of
Convertible Securities shall be entitled to receive shares of common
stock of each Carrols Group Subsidiary (and, if such redemption is
pursuant to paragraph
16
B(5)(b)(iii)(2)(x) of this Article, Pollo Tropical Stock and/or Taco
Cabana Stock, as applicable) or common stock of each Pollo Tropical
Group Subsidiary and/or each Taco Cabana Group Subsidiary, as the case
may be, in any case upon redemption only if such holder properly
converts, exchanges or exercises such Convertible Securities on or
prior to the Redemption Date and a statement as to what, if anything,
such holder will be entitled to receive pursuant to the terms of such
Convertible Securities or, if applicable, this paragraph B(5) of this
Article, if such holder thereafter converts, exchanges or exercises
such Convertible Securities. Such notice shall be sent by first-class
mail, postage prepaid, not less than 30 Business Days nor more than 45
Business Days prior to the Redemption Date to each such holder at such
holder's address as the same appears on the transfer books of the
Corporation.
(vii) If less than all of the outstanding shares of the Common
Stock of a series are to be redeemed pursuant to paragraph B(5)(a)(i)
of this Article, the shares to be redeemed by the Corporation shall be
selected from among the holders of shares of such series of the Common
Stock outstanding at the close of business on the record date for such
redemption on a pro rata basis among all such holders or by lot or by
such other method as may be determined by the Board of Directors of
the Corporation to be equitable.
(viii) The Corporation shall not be required to issue or deliver
fractional shares of any capital stock or of any other securities to
any holder of either series of the Common Stock upon any conversion,
redemption, dividend or other distribution pursuant to this paragraph
B(5) of this Article. If more than one share of either series of the
Common Stock shall be held at the same time by the same holder, the
Corporation may aggregate the number of shares of any capital stock
that shall be issuable or any other securities or property that shall
be distributable to such holder upon any conversion, redemption,
dividend or other distribution (including any fractional shares). If
there are fractional shares of any capital stock or of any other
securities remaining to be issued or distributed to the holders of
either series of the Common Stock, the Corporation shall, if such
fractional shares are not issued or distributed to the holder, pay
cash in respect of such fractional shares in an amount equal to the
Fair Value thereof on the fifth Business Day prior to the date such
payment is to be made (without interest).
(ix) No adjustments in respect of dividends shall be made upon
the conversion or redemption of any shares of any series of the Common
Stock; provided, however, that if the Conversion Date or Redemption
Date, as the case may be, with respect to any shares of any series of
the Common Stock shall be subsequent to the record date for the
payment of a dividend or other distribution thereon or with respect
thereto, the holders of such series of the Common Stock at the close
of business on such record date shall be entitled to receive the
dividend or other distribution payable on or with respect to such
shares on the date set for payment of such dividend or other
distribution, in each case without interest, notwithstanding the
subsequent conversion or redemption of such shares.
17
(x) Before any holder of any series of the Common Stock shall
be entitled to receive any cash payment and/or certificates or
instruments representing shares of any capital stock and/or other
securities or property to be distributed to such holder with respect
to such series of the Common Stock pursuant to this paragraph B(5) of
this Article, such holder shall surrender at such place as the
Corporation shall specify certificates for such shares of the Common
Stock, properly endorsed or assigned for transfer (unless the
Corporation shall waive such requirement). The Corporation shall, as
soon as practicable after receipt of certificates representing such
shares of the Common Stock deliver to the person for whose account
such shares of the Common Stock were so surrendered, or to such
person's nominee or nominees, the cash and/or the certificates or
instruments representing the number of whole shares of the kind of
capital stock and/or other securities or property to which such person
shall be entitled as aforesaid, together with any payment in respect
of fractional shares contemplated by paragraph B(5)(d)(viii) of this
Article, in each case without interest. If less than all of the shares
of any series of the Common Stock represented by any one certificate
are to be redeemed, the Corporation shall issue and deliver a new
certificate for the shares of such series of Common Stock not
redeemed.
(xi) From and after any applicable Conversion Date or
Redemption Date, as the case may be, all rights of a holder of shares
of the series of the Common Stock that were converted or redeemed
shall cease except for the right, upon surrender of the certificates
representing such shares of the Common Stock as required by paragraph
B(5)(d)(x) of this Article, to receive the cash and/or the
certificates or instruments representing shares of the kind and amount
of capital stock and/or other securities or property for which such
shares were converted or redeemed, together with any payment in
respect of fractional shares contemplated by paragraph B(5)(d)(viii)
of this Article and rights to dividends as provided in paragraph
B(5)(d)(ix) of this Article, in each case without interest. No holder
of a certificate that immediately prior to the applicable Conversion
Date represented shares of a series of the Common Stock shall be
entitled to receive any dividend or other distribution or interest
payment with respect to shares of any kind of capital stock or other
security or instrument for which such series of the Common Stock was
converted until the surrender as required by this paragraph B(5) of
this Article of such certificate in exchange for a certificate or
certificates or instrument or instruments representing such capital
stock or other security. Subject to applicable escheat and similar
laws, upon such surrender, there shall be paid to the holder the
amount of any dividends or other distributions (without interest)
which theretofore became payable on any class or series of capital
stock of the Corporation as of a record date after the Conversion
Date, but that were not paid by reason of the foregoing, with respect
to the number of whole shares of the kind of capital stock represented
by the certificate or certificates issued upon such surrender. From
and after a Conversion Date, the Corporation shall, however, be
entitled to treat the certificates for a series of the Common Stock
that have not yet been surrendered for conversion as evidencing the
ownership of the number of whole shares of the kind or kinds of
capital stock of the Corporation for which the
18
shares of such series of the Common Stock represented by such
certificates shall have been converted, notwithstanding the failure to
surrender such certificates.
(xii) The Corporation shall pay any and all documentary, stamp
or similar issue or transfer taxes that may be payable in respect of
the issuance or delivery of any shares of capital stock and/or other
securities upon conversion or redemption of shares of either series of
the Common Stock pursuant to this paragraph B(5) of this Article. The
Corporation shall not, however, be required to pay any tax that may be
payable in respect of any transfer involved in the issuance or
delivery of any shares of capital stock and/or other securities in a
name other than that in which the shares of such series of the Common
Stock so converted or redeemed were registered, and no such issuance
or delivery shall be made unless and until the person requesting such
issuance or delivery has paid to the Corporation the amount of any
such tax or has established to the satisfaction of the Corporation
that such tax has been paid.
(xiii) Neither the failure to mail any notice required by this
paragraph B(5)(d) of this Article to any particular holder of the
Common Stock or of Convertible Securities nor any defect therein shall
affect the sufficiency thereof with respect to any other holder of
outstanding shares of the Common Stock or of Convertible Securities or
the validity of any such conversion or redemption.
(xiv) The Board of Directors may establish such rules and
requirements to facilitate the effectuation of the transactions
contemplated by this paragraph B(5) of this Article as the Board of
Directors shall determine to be appropriate.
(6) Application of the Provisions of this Certificate of Amendment to the
---------------------------------------------------------------------
Restated Certificate of Incorporation.
- -------------------------------------
(a) Certain Determinations by the Board of Directors. The Board of
------------------------------------------------
Directors shall make such determinations with respect to the assets and
liabilities to be attributed to the Groups, the application of the
provisions of this paragraph B of this Article to transactions to be
engaged in by the Corporation and the preferences, limitations and relative
rights of the holders of either series of the Common Stock, and the
qualifications and restrictions thereon, provided by this Certificate of
Amendment to the Restated Certificate of Incorporation, as may be, or
become necessary or appropriate to the exercise of such preferences,
limitations and relative rights, including, without limiting the foregoing,
the determinations referred to in the following paragraphs B(6)(a)(i),
(ii), (iii), (iv), (v) and (vi) of this Article. A record of any such
determination shall be filed with the records of the actions of the Board
of Directors.
(i) Upon any acquisition by the Corporation or its
subsidiaries of any assets or business, or any assumption of
liabilities, outside of the ordinary course of business of the Carrols
Group, the Pollo Tropical Group or the Taco Cabana Group, as the case
may be, the Board of Directors shall determine whether such assets,
business and liabilities (or an interest therein) shall be for the
benefit of the Carrols Group, the Pollo Tropical Group or the Taco
Cabana Group or that an
19
interest therein shall be partly for the benefit of each Group, or any
combination of Groups and, accordingly, shall be attributed to the
Carrols Group, the Pollo Tropical Group or the Taco Cabana Group, or
partly to each, in accordance with paragraph B(7)(c), (w) or (bb) of
this Article, as the case may be.
(ii) Upon any issuance of any shares of Pollo Tropical Stock at
a time when the Number of Pollo Tropical Shares Issuable with Respect
to the Pollo Tropical Inter-Group Interest is greater than zero, the
Board of Directors shall determine, based on the use of the proceeds
of such issuance and any other relevant factors, whether all or any
part of the shares of Pollo Tropical Stock so issued shall reduce the
Number of Pollo Tropical Shares Issuable with Respect to the Pollo
Tropical Inter-Group Interest, and the Number of Pollo Tropical Shares
Issuable with Respect to the Pollo Tropical Inter-Group Interest shall
be adjusted accordingly.
(iii) Upon any issuance of any shares of Taco Cabana Stock at a
time when the Number of Taco Cabana Shares Issuable with Respect to
the Taco Cabana Inter-Group Interest is greater than zero, the Board
of Directors shall determine, based on the use of the proceeds of such
issuance and any other relevant factors, whether all or any part of
the shares of Taco Cabana Stock so issued shall reduce the Number of
Taco Cabana Shares Issuable with Respect to the Taco Cabana
Inter-Group Interest, and the Number of Taco Cabana Shares Issuable
with Respect to the Taco Cabana Inter-Group Interest shall be adjusted
accordingly.
(iv) Upon any issuance by the Corporation or any subsidiary
thereof of any Convertible Securities that are convertible into or
exchangeable or exercisable for shares of Pollo Tropical Stock or Taco
Cabana Stock, if at the time such Convertible Securities are issued
the Number of Pollo Tropical Shares Issuable with Respect to the Pollo
Tropical Inter-Group Interest or the Number of Taco Cabana Shares
Issuable with Respect to the Taco Cabana Inter-Group Interest, as the
case may be, is greater than zero, the Board of Directors shall
determine, based on the use of the proceeds of such issuance of
Convertible Securities in the business of the Carrols Group, the Pollo
Tropical Group or the Taco Cabana Group and any other relevant
factors, whether, upon conversion, exchange or exercise thereof, the
issuance of shares of Pollo Tropical Stock or Taco Cabana Stock
pursuant thereto shall, in whole or in part, reduce the Number of
Pollo Tropical Shares Issuable with Respect to the Pollo Tropical
Inter-Group Interest or the Number of Taco Cabana Shares Issuable with
Respect to the Taco Cabana Inter-Group Interest, as the case may be.
(v) Upon any issuance of any shares of the Preferred Stock of
any series, the Board of Directors shall attribute, based on the use
of proceeds of such issuance of shares of the Preferred Stock in the
business of the Carrols Group, the Pollo Tropical Group or the Taco
Cabana Group and any other relevant factors, the shares so issued
entirely to the Carrols Group, entirely to the Pollo Tropical Group or
entirely to the Taco Cabana Group or partly to the Carrols Group,
partly
20
to the Pollo Tropical Group and partly to the Taco Cabana Group, or
partly to each such Group or to any two Groups in such proportion as
the Board of Directors shall determine.
(vi) Upon any redemption or repurchase by the Corporation or any
subsidiary thereof of shares of the Preferred Stock of any class or
series or of other securities or debt obligations of the Corporation,
the Board of Directors shall determine, based on the property used to
redeem or purchase such shares, other securities or debt obligations,
which, if any, of such shares, other securities or debt obligations
redeemed or repurchased shall be attributed to the Carrols Group,
which, if any, of such shares, other securities or debt obligations
shall be attributed to the Pollo Tropical Group and which, if any, of
such shares or other securities or debt obligations shall be
attributed to the Taco Cabana Group and, accordingly, how many of the
shares of such series of the Preferred Stock or of such other
securities, or how much of such debt obligations, that remain
outstanding, if any, are thereafter attributed to the Carrols Group,
to the Pollo Tropical Group and to the Taco Cabana Group.
(b) Certain Determinations Not Required. Notwithstanding the foregoing
-----------------------------------
provisions of this paragraph B(6) of this Article, the provisions of
paragraphs B(7)(c), (e), (w), (x),(aa) or (bb) of this Article or any other
provision of this Article, at any time when there are not outstanding both
(i) one or more shares of Carrols Stock or Convertible Securities
convertible into or exchangeable or exercisable for Carrols Stock and (ii)
one or more shares of either series of Middle Tier Stock or Convertible
Securities convertible into or exchangeable or exercisable for either
series of Middle Tier Stock, the Corporation need not (A) attribute any of
the assets or liabilities of the Corporation or any of its subsidiaries to
the Carrols Group, the Pollo Tropical Group or the Taco Cabana Stock or (B)
make any determination required in connection therewith, nor shall the
Board of Directors be required to make any of the determinations otherwise
required by this Article, and in such circumstances the holders of the
shares of Carrols Stock, Pollo Tropical Stock or Taco Cabana Stock
outstanding, as the case may be, shall (unless otherwise specifically
provided by this Certificate of Amendment to the Restated Certificate of
Incorporation) be entitled to all the preferences or other relative rights
of all series of the Common Stock without differentiation between the
Carrols Stock, the Pollo Tropical Stock and the Taco Cabana Stock.
(c) Board Determinations Binding. Subject to applicable law, any
----------------------------
determinations made in good faith by the Board under any provision of this
Article, and any determinations with respect to any Group or the rights of
holders of any class or series of capital stock made pursuant to or in
furtherance of the application of this Article, shall be final and binding
on all stockholders.
(7) Certain Definitions. As used in this Article, the following terms hall
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have the following meanings (with terms defined in the singular having
comparable meaning when used in the plural and vice versa), unless the context
otherwise requires. As used in this paragraph B(7) of this Article, a
"contribution" or "transfer" of assets or properties from one Group to
21
another shall refer to the reattribution of such assets or properties from the
contributing or transferring Group to the other Group and correlative phrases
shall have correlative meanings.
(a) "Business Day" shall mean each weekday that banks are open for the
transaction of business in New York City.
(b) "Carrols Available Dividend Amount", as of any date shall mean, with
respect to the Carrols Group either (a) the excess of (i) an amount equal to the
total assets attributed to the Carrols Group less the total liabilities (not
including preferred stock) attributed to the Carrols Group as of such date over
(ii) the aggregate par value of, or any greater amount determined to be capital
in respect of, all outstanding shares of Carrols Stock and to the extent
applicable, each class or series of capital stock attributed to the Carrols
Group or (b) in case there is no such excess, an amount equal to Carrols Net
Earnings (Loss) (if positive) for the fiscal year in which such date occurs
and/or the preceding fiscal year. The Carrols Available Dividend Amount is
intended to be similar to an amount equal to the amount that would be legally
available for the payment of dividends on shares of Carrols Stock under the DGCL
if the Carrols Group was a separate Delaware corporation.
(c) "Carrols Group" shall mean, as of any date:
(i) the interest of the Corporation or any of its subsidiaries
on such date in all of the assets, liabilities and businesses of the
Corporation or any of its subsidiaries (and any successor companies),
other than any assets, liabilities and businesses attributed in
accordance with this Article to the Pollo Tropical Group and the Taco
Cabana Group;
(ii) a proportionate undivided interest in each and every
business, asset and liability attributed (i) to the Pollo Tropical
Group equal to the Inter-Group Pollo Tropical Fraction and (ii) to the
Taco Cabana Group equal to the Inter-Group Taco Cabana Fraction, in
each case as of such date;
(iii) all properties and assets transferred to the Carrols Group
from the Pollo Tropical Group and/or the Taco Cabana Group (other than
pursuant to paragraph B(7)(c)(iv) or (vi) of this Article) pursuant to
transactions in the ordinary course of business of both the Carrols
Group on the one hand and the Pollo Tropical Group and/or the Taco
Cabana Group, as the case may be, on the other hand, or otherwise as
the Board of Directors may have directed as permitted by this Article;
(iv) all properties and assets transferred to the Carrols Group
(A) from the Pollo Tropical Group in connection with a reduction of
the Number of Pollo Tropical Shares Issuable with Respect to the Pollo
Tropical Inter-Group Interest and (B) from the Taco Cabana Group in
connection with a reduction of the Number of Taco Cabana Shares
Issuable with Respect to the Taco Cabana Inter-Group Interest;
(v) the interest of the Corporation or any of its subsidiaries
in any business or asset acquired and any liabilities assumed by the
Corporation or any
22
of its subsidiaries outside the ordinary course of business
and attributed to the Carrols Group, as determined by the
Board of Directors as contemplated by paragraph B(6)(a)(i) of
this Article; and
(vi) from and after the payment date of any dividend,
redemption or other distribution with respect to shares of
either series of Subsidiary Stock (other than a dividend or
other distribution payable in shares of such Middle Tier
Stock, with respect to which adjustment shall be made as
provided in paragraph B(7)(r)(i) or B(7)(s)(i) of this
Article, as the case may be, or in securities of the
Corporation attributed to such Middle Tier Group, for which
provision shall be made as set forth in the third to last
sentence of this definition), an amount of assets or
properties previously attributed to such Middle Tier Group of
the same kind as were paid in such dividend or other
distribution with respect to shares of such Middle Tier Group
as have a Fair Value on the record date for such dividend or
distribution equal to the product of (1) the Fair Value on
such record date of the aggregate of such dividend or
distribution to holders of shares of such Middle Tier Group
declared and (2) a fraction the numerator of which is equal to
the Inter-Group Pollo Tropical Fraction or the Inter-Group
Taco Cabana Fraction, as the case may be, in effect on the
record date for such dividend or distribution and the
denominator of which is equal to the Outstanding Pollo
Tropical Fraction or the Outstanding Taco Cabana Fraction, as
the case may be, in effect on the record date for such
dividend or distribution;
provided, that from and after any transfer of any assets or
properties from the Carrols Group to the Pollo Tropical Group
or the Taco Cabana Group, the Carrols Group shall no longer
include such assets or properties so transferred (other than
as reflected in respect of such a transfer by the Inter-Group
Pollo Tropical Fraction or the Inter-Group Taco Cabana
Interest Fraction, as the case may be, as provided by
paragraph B(7)(c)(ii) of this Article). If the Corporation
shall pay a dividend or make some other distribution with
respect to shares of a series of Middle Tier Stock payable in
securities of the Corporation that are attributed to the
applicable Middle Tier Group for purposes of this Article
(other than distributions of Pollo Tropical Stock or Taco
Cabana Stock, as the case may be), the Carrols Group shall be
deemed to hold an interest in such Middle Tier Group
equivalent to the number or amount of such securities that is
equal to the product of the number or amount of securities so
distributed to holders of such Middle Tier Stock and the
fraction specified in clause (2) of paragraph B(7)(c)(vi) of
this Article (determined as of the record date for such
distribution) and, to the extent interest is or dividends are
paid on the securities so distributed, the Carrols Group shall
include, and there shall be transferred thereto from such
Middle Tier Group, a corresponding ratable amount of the kind
of assets paid as such interest or dividends as would have
been paid in respect of such securities so deemed to be held
by the Carrols Group if such securities were outstanding. The
Corporation may also, to the extent the securities so paid as
a dividend or other distribution to the holders of a series of
Middle Tier Stock are Convertible Securities and at the time
are convertible into or exchangeable or exercisable for shares
of such Middle Tier Stock, treat such Convertible Securities
as are so deemed to be held by the
23
Carrols Group to be deemed to be converted, exchanged or
exercised, and shall do so to the extent such Convertible
Securities are mandatorily converted, exchanged or exercised
(and to the extent the terms of such Convertible Securities
require payment of consideration for such conversion, exchange
or exercise, the Carrols Group shall then no longer include an
amount of the kind of properties or assets required to be paid
as such consideration for the amount of Convertible Securities
deemed converted, exchanged or exercised (and the applicable
Middle Tier Group shall be attributed such properties or
assets)), in which case, from and after such time, the
securities into or for which such Convertible Securities so
deemed to be held by the Carrols Group were so considered
converted, exchanged or exercised shall be deemed held by the
Carrols Group (as provided in clause (3) of paragraph
B(7)(r)(iii) or B(7)(s)(iii), as applicable, of this Article)
and such Convertible Securities shall no longer be deemed to
be held by the Carrols Group. A statement setting forth the
election to effectuate any such deemed conversion, exchange or
exercise of Convertible Securities so deemed to be held by the
Carrols Group and the properties or assets, if any, to be
attributed to the applicable Middle Tier Group in
consideration of such conversion, exchange or exercise (if
any) shall be filed in the records of the actions of the Board
of Directors and, upon such filing, such deemed conversion,
exchange or exercise shall be effectuated.
(d) "Carrols Net Earnings (Loss)", for any period through any
date, shall mean the net earnings or loss of the Carrols Group for such
period (or in respect of fiscal periods of the Corporation commencing
prior to the date of the first issuance of Subsidiary Stock, the pro forma
net earnings or loss of the Carrols Group for such period as if such date
had been the first day of such period) determined in accordance with
generally accepted accounting principles in effect at such time,
reflecting income and expense of the Corporation attributed to the Carrols
Group on a basis substantially consistent with attributions of income and
expense made in the calculation of Pollo Tropical Net Earnings (Loss) and
Taco Cabana Net Earnings (Loss), including, without limitation, corporate
administrative costs, net interest and other financial costs and income
taxes.
(e) "Common Stock" shall mean the collective reference to the
Carrols Stock, the Pollo Tropical Stock and the Taco Cabana Stock, and any
may sometimes be called a series of Common Stock.
(f) "Conversion Date" shall mean the closing date of the IPO
described in Section B(5)(a)(iii) of this Article or the closing date of a
transaction described in Section B(5)(a)(iv) or B(5)(a)(v) of this
Article, which date shall be the effective date for the conversion of
shares of Middle Tier Stock into shares of Carrols Stock (or into another
series of Middle Tier Stock or another class or series of common stock of
the Corporation, as the case may be) and set forth in the notice to
holders of shares of Middle Tier Stock subject to such conversion and to
holders of any Convertible Securities that are convertible into or
exchangeable or exercisable for shares of Middle Tier Stock subject to
such conversion required pursuant to paragraph B(5)(d)(v) of this Article.
24
(g) "Convertible Securities" at any time shall mean any
securities of the Corporation or of any subsidiary thereof (other than shares of
the Common Stock), including warrants and options, outstanding at such time that
by their terms are convertible into or exchangeable or exercisable for or
evidence the right to acquire any shares of any series of the Common Stock,
whether convertible, exchangeable or exercisable at such time or a later time or
only upon the occurrence of certain events, but in respect of anti-dilution
provisions of such securities only upon the effectiveness thereof.
(h) "Disposition" shall mean a sale, transfer, assignment or
other disposition (whether by merger, consolidation, sale or contribution of
assets or stock or otherwise) of properties or assets (including stock, other
securities and goodwill).
(i) "Fair Value" shall mean, (i) in the case of equity
securities or debt securities of a class or series that has previously been
Publicly Traded for a period of at least three months, the Market Value thereof
(if such Market Value, as so defined, can be determined); (ii) in the case of an
equity security or debt security that has not been Publicly Traded for at least
three months or the Market Value of which cannot be determined, the fair value
per share of stock or per other unit of such security, on a fully distributed
basis, as determined by an independent appraiser with recognized standing
selected in good faith by the Board of Directors; provided, however, that in the
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sole discretion of the Board of Directors, the appraisal may be conducted by the
investment banking firm engaged by the Corporation in connection with its IPO;
(iii) in the case of cash denominated in U.S. dollars, the face amount thereof
and in the case of cash denominated in other than U.S. dollars, the face amount
thereof converted into U.S. dollars at the rate published in The Wall Street
Journal on the date for the determination of Fair Value or, if not so published,
at such rate as shall be determined in good faith by the Board of Directors
based upon such information as the Board of Directors shall in good faith
determine to be appropriate in accordance with good business practice; and (iv)
in the case of property other than securities or cash, the "Fair Value" thereof
shall be determined in good faith by the Board of Directors based upon such
appraisals or valuation reports of such independent experts as the Board of
Directors shall in good faith determine to be appropriate in accordance with
good business practice. Any such determination of Fair Value shall be described
in a statement filed with the records of the actions of the Board of Directors.
(j) "Fair Value Ratio" of a share of any series of Common
Stock (a "Converted Share") to a share of any other series of Common Stock (an
"Issued Share") as of any Conversion Date shall mean the fraction (which may be
greater or less than 1/1), expressed as a decimal (rounded to the nearest five
decimal places), of an Issued Share to be issued in respect of a Converted
Share, upon a conversion of a series of Common Stock into another series of
Common Stock in accordance with paragraph B(5)(a)(iii), (iv) or (v) of this
Article, based on the ratio of the Fair Value of a Converted Share to the Fair
Value of an Issued Share as of such date.
(k) "Group" shall mean, as of any date, the Carrols Group, the
Pollo Tropical Group or the Taco Cabana Group, as the case may be.
25
(l) "Inter-Group Pollo Tropical Fraction" as of any date shall
mean a fraction the numerator of which shall be the Number of Pollo Tropical
Shares Issuable with Respect to the Pollo Tropical Inter-Group Interest on such
date and the denominator of which shall be the sum of (A) such Number of Pollo
Tropical Shares Issuable with Respect to the Pollo Tropical Inter-Group Interest
and (B) the aggregate number of shares of Pollo Tropical Stock outstanding on
such date. A statement setting forth the Inter-Group Pollo Tropical Fraction as
of the record date for any dividend or distribution on either series of the
Common Stock, as of the effective date of any conversion, exchange or exercise
of Convertible Securities into or for shares of Pollo Tropical Stock and as of
the end of each fiscal quarter of the Corporation shall be filed by the
Secretary of the Corporation in the records of the Board of Directors of the
Corporation not later than ten days after such date.
(m) "Inter-Group Taco Cabana Fraction" as of any date shall
mean a fraction the numerator of which shall be the Number of Taco Cabana Shares
Issuable with Respect to the Taco Cabana Inter-Group Interest on such date and
the denominator of which shall be the sum of (A) such Number of Taco Cabana
Shares Issuable with Respect to the Taco Cabana Inter-Group Interest and (B) the
aggregate number of shares of Taco Cabana Stock outstanding on such date. A
statement setting forth the Inter-Group Taco Cabana Fraction as of the record
date for any dividend or distribution on either series of the Common Stock, as
of the effective date of any conversion, exchange or exercise of Convertible
Securities into or for shares of Taco Cabana Stock and as of the end of each
fiscal quarter of the Corporation shall be filed by the Secretary of the
Corporation in the records of the Board of Directors of the Corporation not
later than ten days after such date.
(n) "Market Value" of a share of any class or series of
capital stock of the Corporation on any day shall mean the average of the high
and low reported sales prices regular way of a share of such class or series on
such Business Day or, in case no such reported sale takes place on such Business
Day, the average of the reported closing bid and asked prices regular way of a
share of such class or series on such Business Day, in either case as reported
on the New York Stock Exchange Composite Tape or, if the shares of such class or
series are not listed or admitted to trading on such Exchange on such Business
Day, on the principal national securities exchange in the United States on which
the shares of such class or series are listed or admitted to trading or, if not
listed or admitted to trading on any national securities exchange on such
Business Day, on The Nasdaq National Market or, if the shares of such class or
series are not listed or admitted to trading on any national securities exchange
or quoted on The Nasdaq National Market on such Business Day, the average of the
closing bid and asked prices of a share of such class or series in the
over-the-counter market on such Business Day as furnished by any New York Stock
Exchange member firm selected from time to time by the Corporation or, if such
closing bid and asked prices are not made available by any such New York Stock
Exchange member firm on such Business Day, the Fair Value of a share of such
class or series as set forth in clause (ii) of the definition of Fair Value;
provided that, for purposes of determining the market value of a share of any
class or series of capital stock for any period, (i) the "Market Value" of a
share of capital stock on any day prior to any "ex-dividend" date or any similar
date occurring during such period for any dividend or
26
distribution (other than any dividend or distribution contemplated by clause
(ii)(B) of this sentence) paid or to be paid with respect to such capital stock
shall be reduced by the Fair Value of the per share amount of such dividend or
distribution and (ii) the "Market Value" of any share of capital stock on any
day prior to (A) the effective date of any subdivision (by stock split or
otherwise) or combination (by reverse stock split or otherwise) of outstanding
shares of such class or series of capital stock occurring during such period or
(B) any "ex-dividend" date or any similar date occurring during such period for
any dividend or distribution with respect to such capital stock to be made in
shares of such class or series of capital stock or Convertible Securities that
are convertible, exchangeable or exercisable for such class or series of capital
stock shall be appropriately adjusted, as determined by the Board of Directors,
to reflect such subdivision, combination, dividend or distribution.
(o) "Middle Tier Group" shall mean either the Pollo Tropical Group or the
Taco Cabana Group.
(p) "Middle Tier Stock" shall mean the Pollo Tropical Stock and/or the Taco
Cabana Stock, as the context of such term may dictate.
(q) "Net Proceeds" shall mean, as of any date with respect to any
Disposition of any of the properties and assets attributed to the Carrols Group,
the Pollo Tropical Group or the Taco Cabana Group, as the case may be, an
amount, if any, equal to what remains of the gross proceeds received by the
Corporation in such Disposition after payment of, or reasonable provision is
made as determined by the Board of Directors for, (A) any taxes payable by the
Corporation (or which would have been payable but for the utilization of tax
benefits attributable to the other Group) in respect of such Disposition or in
respect of any resulting dividend or redemption pursuant to paragraphs
B(5)(a)(i)(a) or (b) of this Article, (B) any transaction costs, including,
without limitation, any legal, investment banking and accounting fees and
expenses and (C) any liabilities (contingent or otherwise) of or attributed to
such Group, including, without limitation, any liabilities for deferred taxes or
any indemnity or guarantee obligations of the Corporation incurred in connection
with the Disposition or otherwise, and any liabilities for future purchase price
adjustments and any preferential amounts plus any accumulated and unpaid
dividends in respect of the Preferred Stock attributed to such Group. For
purposes of this definition, any properties and assets attributed to the Group,
the properties and assets of which are subject to such Disposition, remaining
after such Disposition shall constitute "reasonable provision" for such amount
of taxes, costs and liabilities (contingent or otherwise) as the Board of
Directors determines can be expected to be supported by such properties and
assets.
(r) "Number of Pollo Tropical Shares Issuable with Respect to the Pollo
Tropical Inter-Group Interest" shall be determined by the Board of Directors
prior to the first issuance of shares of Pollo Tropical Stock or Convertible
Securities convertible into or exchangeable or exercisable for shares of Pollo
Tropical Stock to be the number of shares of Pollo Tropical Stock that initially
represents 100% of the common stockholders' equity of the Corporation
attributable to the Pollo Tropical Group, which determination shall be set forth
in a statement filed with the records of the actions of the Board of
27
Directors; provided, however, that such number shall from time to time
thereafter be: (i) adjusted, if before such adjustment such number is greater
than zero, as determined by the Board of Directors to be appropriate to reflect
equitably any subdivision (by stock split or otherwise) or combination (by
reverse stock split or otherwise) of the Pollo Tropical Stock or any dividend or
other distribution of shares of Pollo Tropical Stock to holders of shares of
Pollo Tropical Stock or any reclassification of Pollo Tropical Stock; (ii)
decreased (but to not less than zero), if before such adjustment such number is
greater than zero, by action of the Board of Directors by (1) the number of
shares of Pollo Tropical Stock issued or sold by the Corporation that,
immediately prior to such issuance or sale, were included in the Number of Pollo
Tropical Shares Issuable with Respect to the Pollo Tropical Inter-Group
Interest, (2) the number of shares of Pollo Tropical Stock issued upon
conversion, exchange or exercise of Convertible Securities that, immediately
prior to the issuance or sale of such Convertible Securities, were included in
the Number of Pollo Tropical Shares Issuable with Respect to the Pollo Tropical
Inter-Group Interest, (3) the number of shares of Pollo Tropical Stock issued by
the Corporation as a dividend or other distribution (including in connection
with any reclassification or exchange of shares) to holders of Carrols Stock,
(4) the number of shares of Pollo Tropical Stock issued upon the conversion,
exchange or exercise of any Convertible Securities issued by the Corporation as
a dividend or other distribution (including in connection with any
reclassification or exchange of shares) to holders of Carrols Stock, or (5) the
number (rounded, if necessary, to the nearest whole number) equal to the
quotient of (a) the aggregate Fair Value as of the date of contribution of
properties or assets (including cash) transferred from the Pollo Tropical Group
to the Carrols Group in consideration for a reduction in the Number of Pollo
Tropical Shares Issuable with Respect to the Pollo Tropical Inter-Group Interest
and (b) the Fair Value of one share of Pollo Tropical Stock as of the date of
such transfer; and (iii) increased by (1) the number of outstanding shares of
Pollo Tropical Stock repurchased by the Corporation for consideration that is
attributed as provided by paragraph B(7)(c) of this Article to the Carrols Group
and (2) the number (rounded, if necessary, to the nearest whole number) equal to
the quotient of (a) the Fair Value of properties or assets (including cash)
theretofore attributed as provided by paragraph B(7)(c) of this Article to the
Carrols Group that are contributed to the Pollo Tropical Group in consideration
of an increase in the Number of Pollo Tropical Shares Issuable with Respect to
the Pollo Tropical Inter-Group Interest, and (b) the Fair Value of one share of
Pollo Tropical Stock as of the date of such contribution and (3) the number of
shares of Pollo Tropical Stock into or for which Convertible Securities are
deemed converted, exchanged or exercised pursuant to the penultimate sentence of
the definition of "Carrols Group" in paragraph B(7)(c) of this Article.
(s) "Number of Taco Cabana Shares Issuable with Respect to the Taco Cabana
Inter-Group Interest" shall be determined by the Board of Directors prior to the
first issuance of shares of Taco Cabana Stock or Convertible Securities
convertible into or exchangeable or exercisable for shares of Taco Cabana Stock
to be the number of shares of Taco Cabana Stock that initially represents 100%
of the common stockholders' equity of the Corporation attributable to the Taco
Cabana Group, which determination shall be set forth in a statement filed with
the records of the actions of the Board of Directors; provided, however, that
such number shall from time to time thereafter be: (i) adjusted, if before such
adjustment such number is greater than zero, as determined by the Board of
28
Directors to be appropriate to reflect equitably any subdivision (by stock split
or otherwise) or combination (by reverse stock split or otherwise) of the Taco
Cabana Stock or any dividend or other distribution of shares of Taco Cabana
Stock to holders of shares of Taco Cabana Stock or any reclassification of Taco
Cabana Stock; (ii) decreased (but to not less than zero), if before such
adjustment such number is greater than zero, by action of the Board of Directors
by (1) the number of shares of Taco Cabana Stock issued or sold by the
Corporation that, immediately prior to such issuance or sale, were included in
the Number of Taco Cabana Shares Issuable with Respect to the Taco Cabana
Inter-Group Interest, (2) the number of shares of Taco Cabana Stock issued upon
conversion, exchange or exercise of Convertible Securities that, immediately
prior to the issuance or sale of such Convertible Securities, were included in
the Number of Taco Cabana Shares Issuable with Respect to the Taco Cabana
Inter-Group Interest, (3) the number of shares of Taco Cabana Stock issued by
the Corporation as a dividend or other distribution (including in connection
with any reclassification or exchange of shares) to holders of Carrols Stock,
(4) the number of shares of Taco Cabana Stock issued upon the conversion,
exchange or exercise of any Convertible Securities issued by the Corporation as
a dividend or other distribution (including in connection with any
reclassification or exchange of shares) to holders of Carrols Stock, or (5) the
number (rounded, if necessary, to the nearest whole number) equal to the
quotient of (a) the aggregate Fair Value as of the date of contribution of
properties or assets (including cash) transferred from the Taco Cabana Group to
the Carrols Group in consideration for a reduction in the Number of Taco Cabana
Shares Issuable with Respect to the Taco Cabana Inter-Group Interest and (b) the
Fair Value of one share of Taco Cabana Stock as of the date of such transfer;
and (iii) increased by (1) the number of outstanding shares of Taco Cabana Stock
repurchased by the Corporation for consideration that is attributed as provided
by paragraph B(7)(c) of this Article to the Carrols Group and (2) the number
(rounded, if necessary, to the nearest whole number) equal to the quotient of
(a) the Fair Value of properties or assets (including cash) theretofore
attributed as provided by paragraph B(7)(c) of this Article to the Carrols Group
that are contributed to the Taco Cabana Group in consideration of an increase in
the Number of Taco Cabana Shares Issuable with Respect to the Taco Cabana
Inter-Group Interest, and (b) the Fair Value of one share of Taco Cabana Stock
as of the date of such contribution and (3) the number of shares of Taco Cabana
Stock into or for which Convertible Securities are deemed converted, exchanged
or exercised pursuant to the penultimate sentence of the definition of "Carrols
Group" in paragraph B(7)(c) of this Article.
(t) "Outstanding Pollo Tropical Fraction", as of any date, means the
fraction (which may simplify to 1/1) the numerator of which shall be the number
of shares of Pollo Tropical Stock outstanding on such date and the denominator
of which shall be the sum of the number of shares of Pollo Tropical Stock
outstanding on such date and the Number of Pollo Tropical Shares Issuable with
Respect to the Pollo Tropical Inter-Group Interest on such date. A statement
setting forth the Outstanding Pollo Tropical Fraction as of the record date for
the payment of any dividend or distribution on any series of the Common Stock
and as of the end of each fiscal quarter of the Corporation shall be filed by
the Secretary of the Corporation in the records of the actions of the Board of
Directors not later than ten days after such date.
29
(u) "Outstanding Taco Cabana Fraction", as of any date, means the fraction
(which may simplify to 1/1) the numerator of which shall be the number of shares
of Taco Cabana Stock outstanding on such date and the denominator of which shall
be the sum of the number of shares of Taco Cabana Stock outstanding on such date
and the Number of Taco Cabana Shares Issuable with Respect to the Taco Cabana
Inter-Group Interest on such date. A statement setting forth the Outstanding
Taco Cabana Fraction as of the record date for the payment of any dividend or
distribution on any series of the Common Stock and as of the end of each fiscal
quarter of the Corporation shall be filed by the Secretary of the Corporation in
the records of the actions of the Board of Directors not later than ten days
after such date.
(v) "Pollo Tropical Available Dividend Amount" as of any date shall mean,
with respect to the Pollo Tropical Group, the product of the Outstanding Pollo
Tropical Fraction and either (a) the excess of (i) an amount equal to the total
assets attributed to the Pollo Tropical Group less the total liabilities (not
including preferred stock) attributed to the Pollo Tropical Group as of such
date over (ii) the aggregate par value of, or any greater amount determined to
be capital in respect of, all outstanding shares of Pollo Tropical Stock and to
the extent applicable, each class or series capital stock attributed to the
Pollo Tropical Group or (b) in case there is no such excess, an amount equal to
Pollo Tropical Net Earnings (Loss) (if positive) for the fiscal year in which
such date occurs and/or the preceding fiscal year. The Pollo Tropical Available
Dividend Amount is intended to be similar to an amount equal to the product of
the Outstanding Pollo Tropical Fraction and the amount that would be legally
available for the payment of dividends on shares of Pollo Tropical Stock under
the DGCL if the Pollo Tropical Group was a separate Delaware corporation.
(w) "Pollo Tropical Group" shall mean, as of any date:
(i) all businesses, assets and liabilities of each of Pollo
Franchise, Inc., a Florida corporation and Pollo Operations, Inc. a Florida
corporation (the "Pollo Tropical Group Companies") as of the date of the
first issuance of Pollo Tropical Stock;
(ii) all assets and liabilities of the Corporation and its
subsidiaries attributed by the Board of Directors to the Pollo Tropical
Group, whether or not such assets or liabilities are or were also assets
and liabilities of any of the Pollo Tropical Group Companies;
(iii) all properties and assets transferred to the Pollo Tropical
Group from the Carrols Group (other than a transaction pursuant to
paragraph B(7)(w)(iv) of this Article) pursuant to transactions in the
ordinary course of business of both the Pollo Tropical Group, on the one
hand, and the Carrols Group, on the other hand, or otherwise as the Board
of Directors may have directed as permitted by this Article;
(iv) all properties and assets transferred to the Pollo Tropical
Group from the Carrols Group in connection with an increase in the Number
of Pollo
30
Tropical Shares Issuable with respect to the Pollo Tropical
Inter-Group Interest; and
(v) the interest of the Corporation or any of its subsidiaries
in any business or asset acquired and any liabilities assumed by the
Corporation or any of its subsidiaries outside of the ordinary course
of business and attributed to the Pollo Tropical Group, as determined
by the Board of Directors as contemplated by paragraph B(6)(a)(i) of
this Article;
provided, that (1) from and after the payment date of any dividend or
other distribution with respect to shares of Pollo Tropical Stock
(other than a dividend or other distribution payable in shares of
Pollo Tropical Stock, with respect to which adjustment shall be made
as provided in paragraph B(7)(r)(i) of this Article, or in securities
of the Corporation attributed to the Pollo Tropical Group, for which
provision shall be made as set forth in clause (2) of this proviso),
the Pollo Tropical Group shall no longer include an amount of assets
or properties previously attributed to the Pollo Tropical Group of the
same kind as so paid in such dividend or other distribution with
respect of shares of Pollo Tropical Stock as have a Fair Value on the
record date for such dividend or distribution equal to the product of
(a) the Fair Value on such record date of the aggregate of such
dividend or distribution to holders of shares of Pollo Tropical Stock
declared and (b) a fraction the numerator of which is equal to the
Inter-Group Pollo Tropical Fraction in effect on the record date for
such dividend or distribution and the denominator of which is equal to
the Outstanding Pollo Tropical Fraction in effect on the record date
for such dividend or distribution, (2) if the Corporation shall pay a
dividend or make some other distribution with respect to shares of
Pollo Tropical Stock payable in securities of the Corporation that are
attributed to the Pollo Tropical Group for purposes of this Article
(other than Pollo Tropical Stock), there shall be excluded from the
Pollo Tropical Group an interest in the Pollo Tropical Group
equivalent to the number or amount of such securities that is equal to
the product of the number or amount of securities so distributed to
holders of Pollo Tropical Stock and the fraction specified in clause
1(b) of this proviso (determined as of the record date for such
distribution) (and such interest in the Pollo Tropical Group shall be
attributed to the Carrols Group) and, to the extent interest is or
dividends are paid on the securities so distributed, the Pollo
Tropical Group shall no longer include a corresponding ratable amount
of the kind of assets paid as such interest or dividends as would have
been paid in respect of the securities equivalent to such interest in
the Pollo Tropical Group deemed held by the Carrols Group if the
securities equivalent to such interest were outstanding (and in such
eventuality such assets as are no longer included in the Pollo
Tropical Group shall be attributed to the Carrols Group) and (3) from
and after any transfer of any assets or properties from the Pollo
Tropical Group to the Carrols Group, the Pollo Tropical Group shall no
longer include such assets or properties so contributed or
transferred. The Corporation may also, to the extent a dividend or
distribution on the Pollo Tropical Stock has been paid in Convertible
Securities that are convertible into or exchangeable or exercisable
for Pollo Tropical Stock, cause such Convertible Securities as are
deemed to be held by the
31
Carrols Group in accordance with the third to last sentence of
paragraph B(7)(c) of this Article and clause (2) of the proviso
to the immediately preceding sentence to be deemed to be
converted, exchanged or exercised as provided in the penultimate
sentence of paragraph B(7)(c) of this Article, in which case such
Convertible Securities shall no longer be deemed to be held by
the Carrols Group.
(x) "Pollo Tropical Net Earnings (Loss)", for any period through
any date, shall mean the net earnings or loss of the Pollo Tropical
Group for such period (or in respect of fiscal periods of the
Corporation commencing prior to the date of the first issuance of
Pollo Tropical Stock, the pro forma net earnings or loss of the Pollo
Tropical Group for such period as if such date had been the first day
of such period) determined in accordance with generally accepted
accounting principles in effect at such time, reflecting income and
expense of the Corporation attributed to the Pollo Tropical Group on a
basis substantially consistent with attributions of income and expense
made in the calculation of the Carrols Net Earnings (Loss) and the
Taco Cabana Net Earnings (Loss), including, without limitation,
corporate administrative costs, net interest and other financial costs
and income taxes.
(y) "Publicly Traded" with respect to any security shall mean
(i) registered under Section 12 of the Securities Exchange Act of
1934, as amended (or any successor provision of law), and (ii) listed
for trading on the New York Stock Exchange or the American Stock
Exchange (or any national securities exchange registered under Section
7 of the Securities Exchange Act of 1934, as amended (or any successor
provision of law), that is the successor to either such exchange) or
listed on The Nasdaq Stock Market (or any successor market system).
(z) "Redemption Date" shall mean the date fixed by the Board of
Directors as the effective date for a redemption of shares of any
series of the Common Stock, as set forth in a notice to holders
thereof required pursuant to paragraphs B(5)(d)(iii), (iv) or (vi) of
this Article.
(aa) "Taco Cabana Available Dividend Amount" as of any date shall
mean, with respect to the Taco Cabana Group, the product of the
Outstanding Taco Cabana Fraction and either (a) the excess of (i) an
amount equal to the total assets attributed to the Taco Cabana Group
less the total liabilities (not including preferred stock) attributed
to the Taco Cabana Group as of such date over (ii) the aggregate par
value of, or any greater amount determined to be capital in respect
of, all outstanding shares of Taco Cabana Stock and to the extent
applicable, each class or series capital stock attributed to the Taco
Cabana Group or (b) in case there is no such excess, an amount equal
to Taco Cabana Net Earnings (Loss) (if positive) for the fiscal year
in which such date occurs and/or the preceding fiscal year. The Taco
Cabana Available Dividend Amount is intended to be similar to an
amount equal to the product of the Outstanding Taco Cabana Fraction
and the amount that would be legally available for the payment of
dividends on shares of Taco Cabana Stock under the DGCL if the Taco
Cabana Group was a separate Delaware corporation.
(bb) "Taco Cabana Group" shall mean, as of any date:
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(i) all businesses, assets and liabilities of each of Taco
Cabana, Inc., a Delaware corporation, and its direct and indirect
subsidiaries (the "Taco Cabana Group Companies") as of the date of the
first issuance of Taco Cabana Stock;
(ii) all assets and liabilities of the Corporation and its
subsidiaries attributed by the Board of Directors to the Taco Cabana
Group, whether or not such assets or liabilities are or were also
assets and liabilities of any of the Taco Cabana Group Companies;
(iii) all properties and assets transferred to the Taco Cabana
Group from the Carrols Group (other than a transaction pursuant to
paragraph B(7)(bb)(iv) of this Article) pursuant to transactions in
the ordinary course of business of both the Taco Cabana Group, on the
one hand, and the Carrols Group, on the other hand, or otherwise as
the Board of Directors may have directed as permitted by this Article;
(iv) all properties and assets transferred to the Taco Cabana
Group from the Carrols Group in connection with an increase in the
Number of Taco Cabana Shares Issuable with respect to the Taco Cabana
Inter-Group Interest; and
(v) the interest of the Corporation or any of its subsidiaries
in any business or asset acquired and any liabilities assumed by the
Corporation or any of its subsidiaries outside of the ordinary course
of business and attributed to the Taco Cabana Group, as determined by
the Board of Directors as contemplated by paragraph B(6)(a)(i) of this
Article;
provided, that (1) from and after the payment date of any dividend or
other distribution with respect to shares of Taco Cabana Stock (other
than a dividend or other distribution payable in shares of Taco Cabana
Stock, with respect to which adjustment shall be made as provided in
paragraph B(7)(s)(i) of this Article, or in securities of the
Corporation attributed to the Taco Cabana Group, for which provision
shall be made as set forth in clause (2) of this proviso), the Taco
Cabana Group shall no longer include an amount of assets or properties
previously attributed to the Taco Cabana Group of the same kind as so
paid in such dividend or other distribution with respect of shares of
Taco Cabana Stock as have a Fair Value on the record date for such
dividend or distribution equal to the product of (a) the Fair Value on
such record date of the aggregate of such dividend or distribution to
holders of shares of Taco Cabana Stock declared and (b) a fraction the
numerator of which is equal to the Inter-Group Taco Cabana Fraction in
effect on the record date for such dividend or distribution and the
denominator of which is equal to the Outstanding Taco Cabana Fraction
in effect on the record date for such dividend or distribution, (2) if
the Corporation shall pay a dividend or make some other distribution
with respect to shares of Taco Cabana Stock payable in securities of
the Corporation that are attributed to the Taco Cabana Group for
purposes of this Article (other than Taco Cabana Stock), there shall
be excluded from the Taco Cabana Group an interest in the Taco Cabana
Group equivalent to the number or amount of such securities that is
equal to the product of the number
33
or amount of securities so distributed to holders of Taco Cabana
Stock and the fraction specified in clause 1(b) of this proviso
(determined as of the record date for such distribution) (and
such interest in the Taco Cabana Group shall be attributed to the
Carrols Group) and, to the extent interest is or dividends are
paid on the securities so distributed, the Taco Cabana Group
shall no longer include a corresponding ratable amount of the
kind of assets paid as such interest or dividends as would have
been paid in respect of the securities equivalent to such
interest in the Taco Cabana Group deemed held by the Carrols
Group if the securities equivalent to such interest were
outstanding (and in such eventuality such assets as are no longer
included in the Taco Cabana Group shall be attributed to the
Carrols Group) and (3) from and after any transfer of any assets
or properties from the Taco Cabana Group to the Carrols Group,
the Taco Cabana Group shall no longer include such assets or
properties so contributed or transferred. The Corporation may
also, to the extent a dividend or distribution on the Taco Cabana
Stock has been paid in Convertible Securities that are
convertible into or exchangeable or exercisable for Taco Cabana
Stock, cause such Convertible Securities as are deemed to be held
by the Carrols Group in accordance with the third to last
sentence of paragraph B(7)(c) of this Article and clause (2) of
the proviso to the immediately preceding sentence to be deemed to
be converted, exchanged or exercised as provided in the
penultimate sentence of paragraph B(7)(c) of this Article, in
which case such Convertible Securities shall no longer be deemed
to be held by the Carrols Group.
(cc) "Taco Cabana Net Earnings (Loss)", for any period through
any date, shall mean the net earnings or loss of the Taco Cabana Group
for such period (or in respect of fiscal periods of the Corporation
commencing prior to the date of the first issuance of Taco Cabana
Stock, the pro forma net earnings or loss of the Taco Cabana Group for
such period as if such date had been the first day of such period)
determined in accordance with generally accepted accounting principles
in effect at such time, reflecting income and expense of the
Corporation attributed to the Taco Cabana Group on a basis
substantially consistent with attributions of income and expense made
in the calculation of the Carrols Net Earnings (Loss) and the Pollo
Tropical Net Earnings (Loss), including, without limitation, corporate
administrative costs, net interest and other financial costs and
income taxes.
IN WITNESS WHEREOF, said CARROLS HOLDINGS CORPORATION has caused
this Certificate to be signed by Alan Vituli, its Chairman and Chief Executive
Officer this 10th day of September, 2001.
CARROLS HOLDINGS CORPORATION
By: /s/ Alan Vituli
-------------------------------------------
Alan Vituli,
Chairman and Chief Executive Officer
34