EXHIBIT 3-A
RESTATED ARTICLES OF INCORPORATION
OF
QUALITY DINING, INC.
Quality Dining, Inc. (hereinafter referred to as the "Corporation"),
desiring to amend and restate its Articles of Incorporation effective as of the
date of filing hereof with the Office of the Indiana Secretary of State,
pursuant to the provisions of the Indiana Business Corporation Law (hereinafter
referred to as the "Corporation Law"), submits the following Restated Articles
of Incorporation.
ARTICLE I
Name
----
The name of the Corporation is Quality Dining, Inc.
ARTICLE II
Purposes and Powers
-------------------
Section 2.1. Purposes of the Corporation. The purposes for which the
Corporation is formed are (a) to engage in the general business of owning and
operating restaurants, directly or indirectly through one or more subsidiaries,
and to carry on such activities of every kind or nature as may be allied or
incidental to such general business, and (b) to engage in the transaction of any
or all lawful business for which corporations may now or hereafter be
incorporated under the Corporation Law.
Section 2.2. Powers of the Corporation. The Corporation shall have
(a) all powers now or hereafter authorized by or vested in corporations pursuant
to the provisions of the Corporation Law, (b) all powers now or hereafter vested
in corporations by common law or any other statute or act, and (c) all powers
authorized by or vested in the Corporation by the provisions of these Restated
Articles of Incorporation or by the provisions of its By-Laws as from time to
time in effect.
Section 2.3. Franchise Agreement Related Restrictions. For as long as
the Corporation is a party to one or more franchise agreements with Brinker
International, Inc. (the "Franchise Agreements"), the Corporation's direct
business operations shall be devoted exclusively to the operation of Chili's
Southwestern Bar and Grill restaurants pursuant to the Franchise Agreements.
Upon assignment of all of the Franchise Agreements to a wholly owned subsidiary
of the Corporation, the foregoing provision shall be of no further effect.
ARTICLE III
Term of Existence
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The period during which the Corporation shall continue is perpetual.
ARTICLE IV
Registered Office and Agent
---------------------------
The street address of the Corporation's registered office at the time
of adoption of these Restated Articles of Incorporation is 3820 Edison Lakes
Parkway, Mishawaka, Indiana 46545 and the name of its Resident Agent at such
office at the time of adoption of these Restated Articles of Incorporation is
Daniel B. Fitzpatrick.
ARTICLE V
Authorized Shares
-----------------
Section 5.1. Authorized Classes and Number of Shares. The total
number of shares which the Corporation has authority to issue shall be
55,000,000 shares, consisting of 50,000,000 shares of common stock, without par
value (the "Common Stock"), and 5,000,000 shares of Preferred Stock, without par
value (the "Preferred Stock").
Section 5.2. General Terms of All Shares. The Corporation shall have
the power to acquire (by purchase, redemption, or otherwise), hold, own, pledge,
sell, transfer, assign, reissue, cancel, or otherwise dispose of the shares of
the Corporation in the manner and to the extent now or hereafter permitted by
the laws of the State of Indiana (but such power shall not imply an obligation
on the part of the owner or holder of any share to sell or otherwise transfer
such share to the Corporation), including the power to purchase, redeem, or
otherwise acquire the Corporation's own shares, directly or indirectly, and
without pro rata treatment of the owners or holders of any class or series of
shares, unless, after giving effect thereto, the Corporation would not be able
to pay its debts as they become due in the usual course of business or the
Corporation's total assets would be less than its total liabilities (and without
regard to any amounts that would be needed, if the Corporation were to be
dissolved at the time of the purchase, redemption, or other acquisition, to
satisfy the preferential rights upon dissolution of shareholders whose
preferential rights are superior to those of the holders of the shares of the
Corporation being purchased, redeemed, or otherwise acquired, unless otherwise
expressly provided with respect to a series of Preferred Stock in the provisions
of these Restated
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Articles of Incorporation adopted by the Board of Directors pursuant to Section
5.5 hereof describing the terms of such series). Shares of the Corporation
purchased, redeemed, or otherwise acquired by it shall constitute authorized but
unissued shares, unless prior to any such purchase, redemption, or other
acquisition, or within thirty (30) days thereafter, the Board of Directors
adopts a resolution providing that such shares constitute authorized and issued
but not outstanding shares.
The Board of Directors of the Corporation may dispose of, issue, and
sell shares in accordance with, and in such amounts as may be permitted by, the
laws of the State of Indiana and the provisions of these Restated Articles of
Incorporation and for such consideration, at such price or prices, at such time
or times and upon such terms and conditions (including the privilege of
selectively repurchasing the same) as the Board of Directors of the Corporation
shall determine, without the authorization or approval by any shareholders of
the Corporation. Shares may be disposed of, issued, and sold to such persons,
firms, or corporations as the Board of Directors may determine, without any
preemptive or other right on the part of the owners or holders of other shares
of the Corporation of any class or kind to acquire such shares by reason of
their ownership of such other shares.
The Corporation shall have the power to declare and pay dividends or
other distributions upon the issued and outstanding shares of the Corporation,
subject to the limitation that a dividend or other distribution may not be made
if, after giving it effect, the Corporation would not be able to pay its debts
as they become due in the usual course of business or the Corporation's total
assets would be less than its total liabilities (and without regard to any
amounts that would be needed, if the Corporation were to be dissolved at the
time of the dividend or other distribution, to satisfy the preferential rights
upon dissolution of shareholders whose preferential rights are superior to those
of the holders of shares receiving the dividend or other distribution, unless
otherwise expressly provided with respect to a series of Preferred Stock in the
provisions of these Restated Articles of Incorporation adopted by the Board of
Directors pursuant to Section 5.5 hereof describing the terms of such series).
The Corporation shall have the power to issue shares of one class or series as a
share dividend or other distribution in respect of that class or series or one
or more other classes or series.
Section 5.3. Voting Rights of Shares.
(a) Common Stock. Except as otherwise provided by the Corporation Law
and subject to such shareholder disclosure and recognition procedures (which may
include voting prohibition sanctions) as the Corporation may by action of its
Board of Directors establish, the Common Stock has unlimited voting rights and
each outstanding share of Common Stock shall, when validly
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issued by the Corporation, entitle the record holder thereof to one vote at all
shareholders' meetings on all matters submitted to a vote of the shareholders of
the Corporation.
(b) Preferred Stock. Except as required by the Corporation Law or by
the provisions of these Restated Articles of Incorporation adopted by the Board
of Directors pursuant to Section 5.5 hereof describing the terms of the
Preferred Stock or a series thereof, the holders of Preferred Stock shall have
no voting rights or powers. Shares of Preferred Stock shall, when validly
issued by the Corporation, entitle the record holder thereof to vote as and on
such matters, but only as and on such matters, as the holders thereof are
entitled to vote under the Corporation Law or under the provisions of these
Restated Articles of Incorporation adopted by the Board of Directors pursuant to
Section 5.5 hereof describing the terms of the Preferred Stock or a series
thereof (which provisions may provide for special, conditional, limited, or
unlimited voting rights, including multiple or fractional votes per share, or
for no right to vote, except to the extent required by the Corporation Law) and
subject to such shareholder disclosure and recognition procedures (which may
include voting prohibition sanctions) as the Corporation may by action of the
Board of Directors establish.
Section 5.4. Other Terms of Common Stock. The Common Stock shall be
equal in every respect insofar as their relationship to the Corporation is
concerned, but such equality of rights shall not imply equality of treatment as
to redemption or other acquisition of shares by the Corporation. Subject to the
rights of the holders of any outstanding Preferred Stock issued under Section
5.5 hereof, the holders of Common Stock shall be entitled to share ratably in
such dividends or other distributions (other than purchases, redemptions, or
other acquisitions of shares by the Corporation), if any, as are declared and
paid from time to time on the Common Stock at the discretion of the Board of
Directors. In the event of any liquidation, dissolution, or winding up of the
Corporation, either voluntary or involuntary, after payment shall have been made
to the holders of the Preferred Stock of the full amount to which they shall be
entitled under this Article V, the holders of Common Stock shall be entitled, to
the exclusion of the holders of the Preferred Stock of any and all series, to
share, ratably according to the number of shares of Common Stock held by them,
in all remaining assets of the Corporation available for distribution to its
shareholders.
Section 5.5. Other Terms of Preferred Stock.
(a) Preferred Stock may be issued from time to time in one or more
series, each such series to have such distinctive designation and such
preferences, limitations, and relative voting and other rights as shall be set
forth in these Restated Articles of Incorporation. Subject to the requirements
of the Corporation
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Law and subject to all other provisions of these Restated Articles of
Incorporation, the Board of Directors of the Corporation may create one or more
series of Preferred Stock and may determine the preferences, limitations, and
relative voting and other rights of one or more series of Preferred Stock before
the issuance of any shares of that series by the adoption of an amendment to
these Restated Articles of Incorporation that specifies the terms of the series
of Preferred Stock. All shares of a series of Preferred Stock must have
preferences, limitations, and relative voting and other rights identical with
those of other shares of the same series and, if the description of the series
set forth in these Restated Articles of Incorporation so provides, no series of
Preferred Stock need have preferences, limitations, or relative voting or other
rights identical with those of any other series of Preferred Stock.
Before issuing any shares of a series of Preferred Stock, the Board of
Directors shall adopt an amendment to these Restated Articles of Incorporation,
which shall be effective without any shareholder approval or other action, that
sets forth the preferences, limitations, and relative voting and other rights of
the series, and authority is hereby expressly vested in the Board of Directors,
by such amendment:
(1) To fix the distinctive designation of such series and the number
of shares which shall constitute such series, which number may be increased
or decreased (but not below the number of shares thereof then outstanding)
from time to time by action of the Board of Directors;
(2) To fix the voting rights of such series, which may consist of
special, conditional, limited, or unlimited voting rights, including
multiple or fractional votes per share, or no right to vote (except to the
extent required by the Corporation Law);
(3) To fix the dividend or distribution rights of such series and the
manner of calculating the amount and time for payment of dividends or
distributions, including, but not limited to:
(A) the dividend rate, if any, of such series;
(B) any limitations, restrictions, or conditions on the payment
of dividends or other distributions, including whether dividends or
other distributions shall be noncumulative or cumulative or partially
cumulative and, if so, from which date or dates;
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(C) the relative rights of priority, if any, of payment of
dividends or other distributions on shares of that series in relation
to Common Stock and shares of any other series of Preferred Stock; and
(D) the form of dividends or other distributions, which may be
payable at the option of the Corporation, the shareholder, or another
person (and in such case to prescribe the terms and conditions of
exercising such option), or upon the occurrence of a designated event
in cash, indebtedness, stock or other securities or other property, or
in any combination thereof,
and to make provisions, in the case of dividends or other distributions
payable in stock or other securities, for adjustment of the dividend or
distribution rate in such events as the Board of Directors shall determine;
(4) To fix the price or prices at which, and the terms and conditions
on which, the shares of such series may be redeemed or converted, which may
be
(A) at the option of the Corporation, the shareholder, or another
person or upon the occurrence of a designated event;
(B) for cash, indebtedness, securities, or other property or any
combination thereof; and
(C) in a designated amount or in an amount determined in
accordance with a designated formula or by reference to extrinsic data
or events;
(5) To fix the amount or amounts payable upon the shares of such
series in the event of any liquidation, dissolution, or winding up of the
Corporation and the relative rights of priority, if any, of payment upon
shares of such series in relation to Common Stock and shares of any other
series of special shares; and to determine whether or not any such
preferential rights upon dissolution need be considered in determining
whether or not the Corporation may make dividends, repurchases, or other
distributions;
(6) To determine whether or not the shares of such series shall be
entitled to the benefit of a sinking fund to be applied to the purchase or
redemption of such
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series and, if so entitled, the amount of such fund and the manner of its
application;
(7) To determine whether or not the issue of any additional shares of
such series or of any other series in addition to such series shall be
subject to restrictions in addition to restrictions, if any, on the issue
of additional shares imposed in the provisions of these Restated Articles
of Incorporation fixing the terms of any outstanding series of Preferred
Stock theretofore issued pursuant to this Section 5.5 and, if subject to
additional restrictions, the extent of such additional restrictions; and
(8) Generally to fix the other preferences or rights, and any
qualifications, limitations, or restrictions of such preferences or rights,
of such series to the full extent permitted by the Corporation Law;
provided, however, that no such preferences, rights, qualifications,
limitations, or restrictions shall be in conflict with these Restated
Articles of Incorporation or any amendment hereof.
(b) Preferred Stock of any series that have been redeemed (whether
through the operation of a sinking fund or otherwise) or purchased by the
Corporation, or which, if convertible, have been converted into shares of the
Corporation of any other class or series, may be reissued as a part of such
series or of any other series of Preferred Stock, subject to such limitations
(if any) as may be fixed by the Board of Directors with respect to such series
of Preferred Stock in accordance with subsection (a) of this Section 5.5.
ARTICLE VI
Directors
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Section 6.1. Number. The Board of Directors at the time of adoption
of these Restated Articles of Incorporation is composed of three (3) members,
and the number of Directors shall be fixed by the By-Laws and may be changed
from time to time by amendment to the By-Laws. Whenever the By-Laws provide
that the number of Directors shall be three (3) or more, the By-Laws may also
provide for staggering the terms of the members of the Board of Directors by
dividing the total number of Directors into three (3) groups (with each group
containing one-third (1/3) of the total, as near as may be) whose terms of
office expire at different times.
Notwithstanding the first sentence of this Section 6.1, any amendment
to the By-Laws that would effect:
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(a) any increase in the number of Directors over such number as then
in effect,
(b) any reduction in the number of Directors over such number as then
in effect, or
(c) any elimination or modification of the groups or terms of office
of the Directors as the By-Laws then in effect may provide,
shall also be approved by the affirmative vote of a majority of the entire
number of Directors of the Corporation who then qualify as Continuing Directors
with respect to all Related Persons (as such terms are defined for purposes of
Article VIII hereof).
Section 6.2. Qualifications. Directors need not be shareholders of
the Corporation or residents of this or any other state in the United States.
Section 6.3. Vacancies. Vacancies occurring in the Board of
Directors shall be filled in the manner provided in the By-Laws or, if the
By-Laws do not provide for the filling of vacancies, in the manner provided by
the Corporation Law. The By-Laws may also provide that in certain circumstances
specified therein, vacancies occurring in the Board of Directors may be filled
by vote of the shareholders at a special meeting called for that purpose or at
the next annual meeting of shareholders.
Section 6.4. Liability of Directors. A Director's responsibility to
the Corporation shall be limited to discharging his duties as a Director,
including his duties as a member of any committee of the Board of Directors upon
which he may serve, in good faith, with the care an ordinarily prudent person in
a like position would exercise under similar circumstances, and in a manner the
Director reasonably believes to be in the best interests of the Corporation, all
based on the facts then known to the Director.
In discharging his duties, a Director is entitled to rely on
information, opinions, reports, or statements, including financial statements
and other financial data, if prepared or presented by:
(a) One (1) or more officers or employees of the Corporation whom the
Director reasonably believes to be reliable and competent in the matters
presented;
(b) Legal counsel, public accountants, or other persons as to matters
the Director reasonably believes are within such person's professional or
expert competence; or
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(c) A committee of the Board of which the Director is not a member if
the Director reasonably believes the Committee merits confidence;
but a Director is not acting in good faith if the Director has knowledge
concerning the matter in question that makes reliance otherwise permitted by
this Section 6.4 unwarranted.
A Director shall not be liable for any action taken as a Director, or
any failure to take any action, unless (a) the Director has breached or failed
to perform the duties of the Director's office in compliance with this Section
6.4, and (b) the breach or failure to perform constitutes willful misconduct or
recklessness.
Section 6.5. Factors to be Considered by Board. In determining
whether to take or refrain from taking any action with respect to any matter,
including making or declining to make any recommendation to shareholders of the
Corporation, the Board of Directors may, in its discretion, consider both the
short term and long term best interests of the Corporation (including the
possibility that these interests may be best served by the continued
independence of the Corporation), taking into account, and weighing as the
Directors deem appropriate, the social and economic effects thereof on the
Corporation's present and future employees, suppliers and customers of the
Corporation and its subsidiaries, the communities in which offices or other
facilities of the Corporation are located, and any other factors the Directors
consider pertinent.
Section 6.6. Removal of Directors. Any or all of the members of the
Board of Directors may be removed, for good cause, only at a meeting of the
shareholders called expressly for that purpose, by the affirmative vote of the
holders of outstanding shares representing at least sixty-six and two-thirds
percent (66-2/3%) of all the votes then entitled to be cast at an election of
Directors. Directors may not be removed in the absence of good cause.
Section 6.7. Election of Directors by Holders of Preferred Stock.
The holders of one (1) or more series of Preferred Stock may be entitled to
elect all or a specified number of Directors, but only to the extent and subject
to limitations as may be set forth in the provisions of these Restated Articles
of Incorporation adopted by the Board of Directors pursuant to Section 5.5
hereof describing the terms of the series of Preferred Stock.
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ARTICLE VII
Provisions for Regulation of Business
and Conduct of Affairs of Corporation
-------------------------------------
Section 7.1. Meetings of Shareholders. Meetings of the shareholders
of the Corporation shall be held at such time and at such place, either within
or without the State of Indiana, as may be stated in or fixed in accordance with
the By-Laws of the Corporation and specified in the respective notices or
waivers of notice of any such meetings.
Section 7.2. Special Meetings of Shareholders. Special meetings of
the shareholders, for any purpose or purposes, unless otherwise prescribed by
the Corporation Law, may be called at any time by the Board of Directors or the
officers authorized to do so by the By-Laws and shall be called by the Board of
Directors if the Secretary of the Corporation receives one (1) or more written,
dated, and signed demands for a special meeting, describing in reasonable detail
the purpose or purposes for which it is to be held, from the holders of shares
representing at least twenty-five percent (25%) of all the votes entitled to be
cast on any issue proposed to be considered at the proposed special meeting;
provided, however, that any such demand(s) delivered to the Secretary at any
time at which the Corporation has more than 50 shareholders must be properly
delivered by the holders of shares representing at least 80% of all the votes
entitled to be cast on any issue proposed to be considered at the proposed
special meeting. If the Secretary receives one (1) or more proper written
demands for a special meeting of shareholders, the Board of Directors may set a
record date for determining shareholders entitled to make such demand.
Section 7.3. Meetings of Directors. Meetings of the Board of
Directors of the Corporation shall be held at such place, either within or
without the State of Indiana, as may be authorized by the By-Laws and specified
in the respective notices or waivers of notice of any such meetings or otherwise
specified by the Board of Directors. Unless the By-Laws provide otherwise (a)
regular meetings of the Board of Directors may be held without notice of the
date, time, place, or purpose of the meeting and (b) the notice for a special
meeting need not describe the purpose or purposes of the special meeting.
Section 7.4. Action Without Meeting. Any action required or
permitted to be taken at any meeting of the Board of Directors or shareholders,
or of any committee of such Board, may be taken without a meeting, if the action
is taken by all members of the Board or all shareholders entitled to vote on the
action, or by all members of such committee, as the case may be. The action
must be evidenced by one (1) or more written consents describing the action
taken, signed by each Director, or all the shareholders
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entitled to vote on the action, or by each member of such committee, as the case
may be, and, in the case of action by the Board of Directors or a committee
thereof, included in the minutes or filed with the corporate records reflecting
the action taken or, in the case of action by the shareholders, delivered to the
Corporation for inclusion in the minutes or filing with the corporate records.
Action taken under this Section 7.4 is effective when the last Director,
shareholder, or committee member, as the case may be, signs the consent, unless
the consent specifies a different prior or subsequent effective date, in which
case the action is effective on or as of the specified date. Such consent shall
have the same effect as a unanimous vote of all members of the Board, or all
shareholders, or all members of the committee, as the case may be, and may be
described as such in any document.
Section 7.5. By-Laws. The Board of Directors shall have the
exclusive power to make, alter, amend, or repeal, or to waive provisions of, the
By-Laws of the Corporation by the affirmative vote of a majority of the entire
number of Directors at the time, except as expressly provided in Section 6.1
hereof and as provided by the Corporation Law. All provisions for the
regulation of the business and management of the affairs of the Corporation not
stated in these Restated Articles of Incorporation shall be stated in the By-
Laws. The Board of Directors may adopt Emergency By-Laws of the Corporation and
shall have the exclusive power (except as may otherwise be provided therein) to
make, alter, amend, or repeal, or to waive provisions of, the Emergency By-Laws
by the affirmative vote of both (a) a majority of the entire number of Directors
at the time and (b) a majority of the entire number of Directors who then
qualify as Continuing Directors with respect to all Related Persons (as such
terms are defined for purposes for Article VIII hereof).
Section 7.6. Interest of Directors. (a) A conflict of interest
transaction is a transaction with the Corporation in which a Director of the
Corporation has a direct or indirect interest. A conflict of interest
transaction is not voidable by the Corporation solely because of the Director's
interest in the transaction if any one (1) of the following is true:
(1) The material facts of the transaction and the Director's interest
were disclosed or known to the Board of Directors or a Committee of the
Board of Directors and the Board of Directors or committee authorized,
approved, or ratified the transaction.
(2) The material facts of the transaction and the Director's interest
were disclosed or known to the shareholders entitled to vote and they
authorized, approved, or ratified the transaction.
(3) The transaction was fair to the Corporation.
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(b) For purposes of this Section 7.6, a Director of the Corporation
has an indirect interest in a transaction if:
(1) Another entity in which the Director has a material financial
interest or in which the Director is a general partner is a party to the
transaction; or
(2) Another entity of which the Director is a director, officer, or
trustee is a party to the transaction and the transaction is, or is
required to be, considered by the Board of Directors of the Corporation.
(c) For purposes of Section 7.6(a)(1), a conflict of interest
transaction is authorized, approved, or ratified if it receives the affirmative
vote of a majority of the Directors on the Board of Directors (or on the
committee) who have no direct or indirect interest in the transaction, but a
transaction may not be authorized, approved, or ratified under this section by a
single Director. If a majority of the Directors who have no direct or indirect
interest in the transaction vote to authorize, approve, or ratify the
transaction, a quorum shall be deemed present for the purpose of taking action
under this Section 7.6. The presence of, or a vote cast by, a Director with a
direct or indirect interest in the transaction does not affect the validity of
any action taken under Section 7.6(a)(1), if the transaction is otherwise
authorized, approved, or ratified as provided in such subsection.
(d) For purposes of Section 7.6(a)(2), a conflict of interest
transaction is authorized, approved, or ratified if it receives the affirmative
vote of the holders of shares representing a majority of the votes entitled to
be case. Shares owned by or voted under the control of a Director who has a
direct or indirect interest in the transaction, and shares owned by or voted
under the control of an entity described in Section 7.6(b), may be counted in
such a vote of shareholders.
Section 7.7. Nonliability of Shareholders. Shareholders of the
Corporation are not personally liable for the acts or debts of the Corporation,
nor is private property of shareholders subject to the payment of corporate
debts.
Section 7.8. Indemnification of Officers, Directors, and Other
Eligible Persons.
(a) To the extent not inconsistent with applicable law, every Eligible
Person shall be indemnified by the Corporation against all Liability and
reasonable Expense that may be incurred by him in connection with or resulting
from any Claim, (1) if such Eligible Person is Wholly Successful with respect to
the Claim, or (2) if not Wholly Successful, then if such Eligible Person is
determined, as provided in either Section 7.8(f) or 7.8(g), to have acted in
good faith, in what he reasonably believed to be the best
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interests of the Corporation or at least not opposed to its best interests and,
in addition, with respect to any criminal claim is determined to have had
reasonable cause to believe that his conduct was lawful or had no reasonable
cause to believe that his conduct was unlawful. The termination of any Claim,
by judgment, order, settlement (whether with or without court approval), or
conviction or upon a plea of guilty or of nolo contendere, or its equivalent,
shall not create a presumption that an Eligible Person did not meet the
standards of conduct set forth in clause (2) of this subsection (a). The
actions of an Eligible Person with respect to an employee benefit plan subject
to the Employee Retirement Income Security Act of 1974 shall be deemed to have
been taken in what the Eligible Person reasonably believed to be the best
interests of the Corporation or at least not opposed to its best interests if
the Eligible Person reasonably believed he was acting in conformity with the
requirements of such Act or he reasonably believed his actions to be in the
interests of the participants in or beneficiaries of the plan.
(b) The term "Claim" as used in this Section 7.8 shall include every
pending, threatened, or completed claim, action, suit, or proceeding and all
appeals thereof (whether brought by or in the right of this Corporation or any
other corporation or otherwise), civil, criminal, administrative, or
investigative, formal or informal, in which an Eligible Person may become
involved, as a party or otherwise:
(1) by reason of his being or having been an Eligible Person, or
(2) by reason of any action taken or not taken by him in his capacity
as an Eligible Person, whether or not he continued in such capacity at the
time such Liability or Expense shall have been incurred.
(c) The term "Eligible Person" as used in this Section 7.8 shall mean
every person (and the estate, heirs, and personal representatives of such
person) who is or was a Director, officer, employee, or agent of the Corporation
or is or was serving at the request of the Corporation as a Director, officer,
employee, agent, or fiduciary of another foreign or domestic corporation,
partnership, joint venture, trust, employee benefit plan, or other organization
or entity, whether for profit or not. An Eligible Person shall also be
considered to have been serving an employee benefit plan at the request of the
Corporation if his duties to the Corporation also imposed duties on, or
otherwise involved services by, him to the plan or to participants in or
beneficiaries of the plan.
(d) The terms "Liability" and "Expense" as used in this Section 7.8
shall include, but shall not be limited to, counsel fees and disbursements and
amounts of judgments, fines, or
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penalties against (including excise taxes assessed with respect to an employee
benefit plan), and amounts paid in settlement by or on behalf of an Eligible
Person.
(e) The term "Wholly Successful" as used in this Section 7.8 shall
mean (1) termination of any claim against the Eligible Person in question
without any finding of liability or guilt against him, (2) approval by a court,
with knowledge of the indemnity herein provided, of a settlement of any Claim,
or (3) the expiration of a reasonable period of time after the making or
threatened making of any Claim without the institution of the same, without any
payment or promise made to induce a settlement.
(f) Every Eligible Person claiming indemnification hereunder (other
than one who has been Wholly Successful with respect to any Claim) shall be
entitled to indemnification (1) if special independent legal counsel, which may
be regular counsel of the Corporation or other disinterested person or persons,
in either case selected by the Board of Directors, whether or not a
disinterested quorum exists (such counsel or person or persons being hereinafter
called the "Referee"), shall deliver to the Corporation a written finding that
such Eligible Person has met the standards of conduct set forth in Section
7.8(a)(2), and (2) if the Board of Directors, acting upon such written finding,
so determines. The Board of Directors shall, if an Eligible Person is found to
be entitled to indemnification pursuant to the preceding sentence, also
determine the reasonableness of the Eligible Person's Expenses. The Eligible
Person claiming indemnification shall, if requested, appear before the Referee,
answer questions that the Referee deems relevant and shall be given ample
opportunity to present to the Referee evidence upon which he relies for
indemnification. The Corporation shall, at the request of the Referee, make
available facts, opinions, or other evidence in any way relevant to the
Referee's findings that are within the possession or control of the Corporation.
(g) If an Eligible Person claiming indemnification pursuant to Section
7.8(f) is found not to be entitled thereto, or if the Board of Directors fails
to select a Referee under Section 7.8(f) within a reasonable amount of time
following a written request of an Eligible Person for the selection of a
Referee, or if the Referee or the Board of Directors fails to make a
determination under Section 7.8(f) within a reasonable amount of time following
the selection of a Referee, the Eligible Person may apply for indemnification
with respect to a Claim to a court of competent jurisdiction, including a court
in which the Claim is pending against the Eligible Person. On receipt of an
application, the court, after giving notice to the Corporation and giving the
Corporation ample opportunity to present to the court any information or
evidence relating to the claim for indemnification that the Corporation deems
appropriate, may order indemnification if it determines that the Eligible Person
is entitled to
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indemnification with respect to the Claim because such Eligible Person met the
standards of conduct set forth in Section 7.8(a)(2). If the court determines
that the Eligible Person is entitled to indemnification, the court shall also
determine the reasonableness of the Eligible Person's Expenses.
(h) The rights of indemnification provided in this Section 7.8 shall
be in addition to any rights to which any Eligible Person may otherwise be
entitled. Irrespective of the provisions of this Section 7.8, the Board of
Directors may, at any time and from time to time, (1) approve indemnification of
any Eligible Person to the full extent permitted by the provisions of applicable
law at the time in effect, whether on account of past or future transactions,
and (2) authorize the Corporation to purchase and maintain insurance on behalf
of any Eligible Person against any Liability asserted against him and incurred
by him in any such capacity, or arising out of his status as such, whether or
not the Corporation would have the power to indemnify him against such
liability.
(i) Expenses incurred by an Eligible Person with respect to any Claim,
may be advanced by the Corporation (by action of the Board of Directors, whether
or not a disinterested quorum exists) prior to the final disposition thereof
upon receipt of an undertaking by or on behalf of the Eligible Person to repay
such amount unless he is determined to be entitled to indemnification.
(j) The provisions of this Section 7.8 shall be deemed to be a
contract between the Corporation and each Eligible Person, and an Eligible
Person's rights hereunder shall not be diminished or otherwise adversely
affected by any repeal, amendment, or modification of this Section 7.8 that
occurs subsequent to such person becoming an Eligible Person.
(k) The provisions of this Section 7.8 shall be applicable to Claims
made or commenced after the adoption hereof, whether arising from acts or
omissions to act occurring before or after the adoption hereof.
ARTICLE VIII
Approval of Business Combinations
---------------------------------
Section 8.1. Supermajority Vote. Except as provided in Sections 8.2
and 8.3 hereof, neither the Corporation nor its Subsidiaries, if any, shall
become a party to any Business Combination with a Related Person without the
prior affirmative vote at a meeting of the Corporation's shareholders:
(a) Of not less than sixty-six and two-thirds percent (66-2/3%) of all
the votes entitled to be cast by
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the holders of the outstanding shares of all classes of Voting Stock of the
Corporation considered for purposes of this Article VIII as a single class,
and
(b) Of an Independent Majority of Shareholders.
Such favorable votes shall be in addition to any shareholder vote
which would be required without reference to this Section 8.1 and shall be
required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified by law or elsewhere in these Restated
Articles of Incorporation or the By-Laws of the Corporation or otherwise.
Section 8.2. Fair Price Exception. The provisions of Section 8.1 of
this Article VIII shall not apply to a Business Combination if all of the
conditions set forth in subsections (a) through (d) are satisfied.
(a) The fair market value of the property, securities, or other
consideration to be received per share by holders of each class or series of
capital stock of the Corporation in the Business Combination is not less, as of
the date of the consummation of the Business Combination (the "Consummation
Date") than the higher of the following: (1) the highest per share price (with
appropriate adjustments for recapitalizations and for stock splits, stock
dividends, and like distributions), including brokerage commissions and
solicitation fees paid by the Related Person in acquiring any of its holdings of
such class or series of capital stock within the two-year period immediately
prior to the first public announcement of the proposed Business Combination
("Announcement Date") plus interest compounded annually from the date that the
Related Person became a Related Person (the "Determination Date"), or if later
from a date two years before the Consummation Date, through the Consummation
Date, at the rate publicly announced as the "prime rate" of interest of
Citibank, N.A. (or of such other major bank headquartered in New York as may be
selected by a majority of the Continuing Directors) from time to time in effect,
less the aggregate amount of any cash dividends paid and the fair market value
of any dividends paid in other than cash on each share of such stock from the
date from which interest accrues under the preceding clause through the
Consummation Date up to but not exceeding the amount of interest so payable per
share; OR (2) the fair market value per share of such class or series on the
Announcement Date as determined by the highest closing sale price during the 30-
day period immediately preceding the Announcement Date if such stock is listed
on a securities exchange registered under the Securities Exchange Act of 1934
or, if such stock is not listed on any such exchange, the highest closing bid
quotation with respect to such stock during the 30-day period preceding the
Announcement Date on the National Association of Securities Dealers, Inc.
Automated Quotation System or any similar system then in use, or if no such
quotations are available, the fair market
-16-
value of such stock immediately prior to the first public announcement of the
proposed Business Combination as determined by the Continuing Directors in good
faith. In the event of a Business Combination upon the consummation of which
the Corporation would be the surviving corporation or company or would continue
to exist (unless it is provided, contemplated, or intended that as part of such
Business Combination or within one year after consummation thereof a plan of
liquidation or dissolution of the Corporation will be effected), the term "other
consideration to be received" shall include (without limitation) Common Stock
and/or the shares of any other class of stock retained by shareholders of the
Corporation other than Related Persons who are parties to such Business
Combination;
(b) The consideration to be received in such Business Combination by
holders of each class or series of capital stock of the Corporation other than
the Related Person involved shall, except to the extent that a shareholder
agrees otherwise as to all or part of the shares which he or she owns, be in the
same form and of the same kind as the consideration paid by the Related Person
in acquiring the majority of the shares of capital stock of such class or series
already Beneficially Owned by it;
(c) After such Related Person became a Related Person and prior to the
consummation of such Business Combination: (1) such Related Person shall have
taken steps to ensure that the Board of Directors of the Corporation included at
all times representation by Continuing Directors proportionate to the ratio that
the number of shares of Voting Stock of the Corporation from time to time owned
by shareholders who are not Related Persons bears to all shares of Voting Stock
of the Corporation outstanding at the time in question (with a Continuing
Director to occupy any resulting fractional position among the Directors); (2)
such Related Person shall not have acquired from the Corporation, directly or
indirectly, any shares of the Corporation (except upon conversion of convertible
securities acquired by it prior to becoming a Related Person or as a result of a
pro rata stock dividend, stock split, or division of shares or in a transaction
which satisfied all applicable requirements of this Article VIII); (3) such
Related Person shall not have acquired any additional shares of Voting Stock of
the Corporation or securities convertible into or exchangeable for shares of
Voting Stock except as a part of the transaction which resulted in such Related
Person's becoming a Related Person; and (4) such Related Person shall not have
received the benefit, directly or indirectly (except proportionately as a
shareholder), of any loans, advances, guarantees, pledges, or other financial
assistance or tax credits provided by the Corporation or any Subsidiary, or made
any major change in the Corporation's business or equity capital structure or
entered into any contract, arrangement, or understanding with the Corporation
except any such change, contract, arrangement, or understanding as may have been
-17-
approved by the favorable vote of not less than a majority of the Continuing
Directors of the Corporation; and
(d) A proxy or information statement complying with the requirements
of the Securities Exchange Act of 1934 and the rules and regulations of the
Securities and Exchange Commission thereunder, as then in force for corporations
subject to the requirements of Section 14 of such Act (even if the Corporation
is not otherwise subject to Section 14 of such Act), shall have been mailed to
all holders of shares of the Corporation's capital stock entitled to vote with
respect to such Business Combination. Such proxy or information statement shall
contain on the face page thereof, in a prominent place, any recommendations as
to the advisability (or inadvisability) of the Business Combination which the
Continuing Directors, or any of them, may have furnished in writing and, if
deemed advisable by a majority of the Continuing Directors, a fair summary of an
opinion of a reputable investment banking firm addressed to the Corporation as
to the fairness (or lack of fairness) of the terms of such Business Combination
from the point of view of the holders of shares of Voting Stock other than any
Related Person (such investment banking firm to be selected by a majority of the
Continuing Directors, to be furnished with all information it reasonably
requests, and to be paid a reasonable fee for its services upon receipt by the
Corporation of such opinion).
Section 8.3. Director Approval Exception. The provisions of Section
8.1 hereof shall not apply to a Business Combination if:
(a) The Directors, by a favorable vote of not less than two-thirds
(2/3) of the Directors who then qualify as Continuing Directors, (1) have
expressly approved a memorandum of understanding with the Related Person with
respect to the Business Combination prior to the time that the Related Person
became a Related Person and the Business Combination is effected on
substantially the same terms and conditions as are provided by the memorandum of
understanding, or (2) have otherwise approved the Business Combination; or
(b) The Business Combination is solely between the Corporation and
another corporation, one hundred percent (100%) of the Voting Stock of which is
owned directly or indirectly by the Corporation.
Section 8.4. Definitions. For purposes of this Article VIII:
(a) A "Business Combination" means:
(1) The sale, exchange, lease, transfer, or other disposition to or
with a Related Person or any Affiliate
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or Associate of such Related Person by the Corporation or any Subsidiaries
(in a single transaction or a Series of Related Transactions) of all or
substantially all, or any Substantial Part, of its or their assets or
businesses (including, without limitation, securities issued by a
Subsidiary, if any);
(2) The purchase, exchange, lease, or other acquisition by the
Corporation or any Subsidiaries (in a single transaction or a Series of
Related Transactions) of all or substantially all, or any Substantial Part,
of the assets or business of a Related Person or any Affiliate or Associate
of such Related Person;
(3) Any merger or consolidation of the Corporation or any Subsidiary
thereof into or with a Related Person or any Affiliate or Associate of such
Related Person or into or with another Person which, after such merger or
consolidation, would be an Affiliate or an Associate of a Related Person,
in each case irrespective of which Person is the surviving entity in such
merger or consolidation;
(4) Any reclassification of securities, recapitalization, or other
transaction (other than a redemption in accordance with the terms of the
security redeemed) which has the effect, directly or indirectly, of
increasing the proportionate amount of shares of Voting Stock of the
Corporation or any Subsidiary thereof which are Beneficially Owned by a
Related Person, or any partial or complete liquidation, spinoff, splitoff,
or splitup of the Corporation or any Subsidiary thereof; provided, however,
that this Section 8.4(a)(4) shall not relate to any transaction that has
been approved by a majority of the Continuing Directors; or
(5) The acquisition upon the issuance thereof of Beneficial Ownership
by a Related Person of shares of Voting Stock or securities convertible
into shares of Voting Stock or any voting securities or securities
convertible into voting securities of any Subsidiary of the Corporation, or
the acquisition upon the issuance thereof of Beneficial Ownership by a
Related Person of any rights, warrants, or options to acquire any of the
foregoing or any combination of the foregoing shares of Voting Stock or
voting securities of a Subsidiary, if any.
(b) A "Series of Related Transactions" shall be deemed to include not
only a series of transactions with the same Related
-19-
Person, but also a series of separate transactions with a Related Person or any
Affiliate or Associate of such Related Person.
(c) A "Person" shall mean any individual, firm, corporation, or other
entity and any partnership, syndicate, or other group.
(d) "Related Person" shall mean any Person (other than the Corporation
or any Subsidiary of the Corporation or the Continuing Directors, singly or as a
group) who or that at any time described in the last sentence of the penultimate
paragraph of this subsection (d):
(1) is the Beneficial Owner, directly or indirectly, of more than ten
percent (10%) of the voting power of the outstanding shares of Voting Stock
and who has not been the Beneficial Owner, directly or indirectly, of more
than ten percent (10%) of the voting power of the outstanding shares of
Voting Stock for a continuous period of two years prior to the date in
question; or
(2) is an Affiliate of the Corporation and at any time within the two-
year period immediately prior to the date in question (but not continuously
during such two-year period) was the Beneficial Owner, directly or
indirectly, of ten percent (10%) or more of the voting power of the then
outstanding shares of Voting Stock; or
(3) is an assignee of or has otherwise succeeded to any shares of the
Voting Stock which were at any time within the two-year period immediately
prior to the date in question beneficially owned by any Related Person, if
such assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering
within the meaning of the Securities Act of 1933, as amended.
A Related Person shall be deemed to have acquired a share of the
Corporation at the time when such Related Person became the Beneficial Owner
thereof. For the purposes of determining whether a Person is the Beneficial
Owner of ten percent (10%) or more of the voting power of the then outstanding
Voting Stock, the outstanding Voting Stock shall be deemed to include any Voting
Stock that may be issuable to such Person pursuant to a right to acquire such
Voting Stock and that is therefore deemed to be Beneficially Owned by such
Person pursuant to Section 8.4(e)(2)(A). A Person who is a Related Person at (1)
the time any definitive agreement relating to a Business Combination is entered
into, (2) the record date for the determination of shareholders entitled to
notice of and to vote on a Business Combination, or (3) the time
-20-
immediately prior to the consummation of a Business Combination shall be deemed
a Related Person.
A Related Person shall not include the Board of Directors of the
Corporation acting as a group. In addition, a Related Person shall not include
any Person who possesses more than ten percent (10%) of the voting power of the
outstanding shares of Voting Stock of the Corporation at the time of filing
these Restated Articles of Incorporation.
(e) A Person shall be a "Beneficial Owner" of any shares of Voting
Stock:
(1) which such Person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(2) which such Person or any of its Affiliates or Associates has (A)
the right to acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement, arrangement, or
understanding or upon the exercise of conversion rights, exchange rights,
warrants, or options, or otherwise, or (B) the right to vote pursuant to
any agreement, arrangement, or understanding; or
(3) which are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of its Affiliates or Associates has
any agreement, arrangement, or understanding for the purpose of acquiring,
holding, voting, or disposing of any shares of Voting Stock.
(f) An "Affiliate" of, or a person Affiliated with, a specific Person
means a Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, the Person
specified.
(g) The term "Associate" used to indicate a relationship with any
Person, means (1) any corporation or organization (other than this Corporation
or a majority-owned Subsidiary of this Corporation) of which such Person is an
officer or partner or is, directly or indirectly, the Beneficial Owner of five
percent (5%) or more of any class of equity securities, (2) any trust or other
estate in which such Person has a substantial beneficial interest or as to which
such Person serves as trustee or in a similar fiduciary capacity, (3) any
relative or spouse of such Person, or any relative of such spouse, who has the
same home as such Person, or (4) any investment company registered under the
Investment Company Act of 1940, as amended, for which such Person or any
Affiliate of such Person serves as investment adviser.
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(h) "Subsidiary" means any corporation of which a majority of any
class of equity security is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Related Person set
forth in Section 8.4(d) hereof, the term "Subsidiary" shall mean only a
corporation of which a majority of each class of equity security is owned,
directly or indirectly, by the Corporation.
(i) "Continuing Director" means any member of the Board of Directors
of the Corporation (the "Board") who is not associated with the Related Person
and was a member of the Board prior to the time that the Related Person became a
Related Person, and any successor of a Continuing Director who is not associated
with the Related Person and is recommended to succeed a Continuing Director by
not less than two-thirds of the Continuing Directors then on the Board.
(j) "Independent Majority of Shareholders" shall mean the holders of
the outstanding shares of Voting Stock representing a majority of all the votes
entitled to be cast by all shares of Voting Stock other than shares Beneficially
Owned or controlled, directly or indirectly, by a Related Person.
(k) "Voting Stock" shall mean all outstanding shares of capital stock
of the Corporation or another corporation entitled to vote generally on the
election of Directors, and each reference to a proportion of shares of Voting
Stock shall refer to such proportion of the votes entitled to be cast by such
shares.
(l) "Substantial Part" means properties and assets involved in any
single transaction or a Series of Related Transactions having an aggregate fair
market value of more than ten percent (10%) of the total consolidated assets of
the Person in question as determined immediately prior to such transaction or
Series of Related Transactions.
Section 8.5. Director Determinations. A majority of the Continuing
Directors shall have the power to determine for the purposes of this Article
VIII, on the basis of information known to them: (a) the number of shares of
Voting Stock of which any Person is the Beneficial Owner, (b) whether a Person
is an Affiliate or Associate of another, (c) whether a Person has an agreement,
arrangement, or understanding with another as to the matters referred to in the
definition of "Beneficial Owner," (d) whether the assets subject to any Business
Combination constitute a Substantial Part, (e) whether two or more transactions
constitute a Series of Related Transactions, and (f) such other matters with
respect to which a determination is required under this Article VIII.
Section 8.6. Amendment of Article VIII or Certain Other Provisions.
Any amendment, change, or repeal of this Article VIII,
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or of Sections 6.1, 6.5, 7.2 or 9.2, or any other amendment of these Restated
Articles of Incorporation which would have the effect of modifying or permitting
circumvention of this Article VIII or such other provisions of these Restated
Articles of Incorporation, shall require the affirmative vote, at a meeting of
shareholders of the Corporation:
(a) Of at least sixty-six and two-thirds (66-2/3) of the votes
entitled to be cast by the holders of the outstanding shares of all classes of
Voting Stock of the Corporation considered for purposes of this Article VIII as
a single class; and
(b) Of an Independent Majority of Shareholders;
Provided, however, that this Section 8.6 shall not apply to, and such vote shall
not be required for, any such amendment, change, or repeal recommended to
shareholders by the favorable vote of not less than two-thirds (2/3) of the
Directors who then qualify as Continuing Directors with respect to all Related
Persons and any such amendment, change, or repeal so recommended shall require
only the vote, if any, required under the applicable provisions of the
Corporation Law.
Section 8.7. Fiduciary Obligations Unaffected. Nothing in this
Article VIII shall be construed to relieve any Related Person from any fiduciary
duty imposed by law.
Section 8.8. Article VIII Nonexclusive. The provisions of this
Article VIII are nonexclusive and are in addition to any other provisions of law
or these Restated Articles of Incorporation or the By-Laws of the Corporation
relating to Business Combinations, Related Persons, or similar matters.
ARTICLE IX
Miscellaneous Provisions
------------------------
Section 9.1. Amendment or Repeal. Except as otherwise expressly
provided for in these Restated Articles of Incorporation, the Corporation shall
be deemed, for all purposes, to have reserved the right to amend, alter, change,
or repeal any provision contained in these Restated Articles of Incorporation to
the extent and in the manner now or hereafter permitted or prescribed by
statute, and all rights herein conferred upon shareholders are granted subject
to such reservation.
Section 9.2. Redemption of Shares Acquired in Control Share
Acquisitions. If and whenever the provisions of IC 23-1-42 apply to the
Corporation, it is authorized to redeem its securities pursuant to IC 23-1-42-
10.
-23-
Section 9.3. Captions. The captions of the Articles and Sections of
these Restated Articles of Incorporation have been inserted for convenience of
reference only and do not in any way define, limit, construe, or describe the
scope or intent of any Article or Section hereof.
-24-
ARTICLES OF AMENDMENT OF THE
RESTATED ARTICLES OF INCORPORATION
OF QUALITY DINING, INC.
Quality Dining, Inc. (hereinafter referred to as the "Corporation"),
existing pursuant to the Indiana Business Corporation Law and desiring to give
notice of corporate action effectuating amendment of its Restated Articles of
Incorporation, sets forth the following facts:
ARTICLE I
AMENDMENT
Section 1. The name of the Corporation following this amendment continues
to be Quality Dining, Inc.
Section 2. Upon effectiveness of these Articles of Amendment, the
Corporation's Restated Articles of Incorporation shall be amended by adding a
new Section 5.6 thereto, the exact text of which is attached as Exhibit A.
Section 3. The foregoing amendment was duly adopted by the Corporation's
Board of Directors on May 20, 1996. The effective date of such amendment shall
be the date of filing of these Articles of Amendment with the office of the
Secretary of State of the State of Indiana.
ARTICLE II
MANNER OF ADOPTION AND VOTE
Section 1. The amendment was adopted by the Corporation's Board of
Directors without shareholder action, and shareholder action was not required.
Section 2. The manner of adoption of the amendment by the Corporation's
Board of Directors constitutes full legal compliance with the provisions of the
Indiana Business Corporation Law and the Corporation's Restated Articles of
Incorporation and By-Laws.
IN WITNESS WHEREOF, the undersigned officer of Quality Dining, Inc. has
executed these Articles of Amendment this 6th day of June, 1996.
/S/ David M. Findlay
---------------------------------------
David M. Findlay
Vice President
DESIGNATION OF SERIES A CONVERTIBLE CUMULATIVE PREFERRED STOCK
Section 5.6. Terms of Series A Convertible Cumulative Preferred Stock. The
designations, preferences, limitations and relative voting and other rights of
the shares of the first series of the authorized Preferred Stock of the
Corporation (such shares being hereinafter sometimes called the "Series A
Preferred Stock"), in addition to those set forth in these Restated Articles of
Incorporation which are applicable to Preferred Stock of all series, are hereby
fixed as follows:
(a) Designation and Amount. The shares of such series shall be
designated the Series A Convertible Cumulative Preferred Stock and the
number of authorized shares constituting such series shall be 141,450
shares. Any authorized shares of such series that are not issued at the
Effective Time of the Merger (as defined in paragraph (e)(viii) below)
shall revert to the status of authorized but unissued Preferred Stock of
the Corporation.
(b) Stated Value. The stated value of the Series A Preferred Stock
shall be $100.00 per share.
(c) Dividends.
(i) When and as declared by the Corporation's Board of Directors,
and to the extent permitted by the Corporation Law, the Corporation
will pay preferential dividends to the holders of the Series A
Preferred Stock as provided in this subsection (i). The Series A
Preferred Stock shall accrue dividends that shall increase with the
passage of time. Except as otherwise provided herein, dividends on
each share of Series A Preferred Stock (a "Share") will accrue
cumulatively on an annual basis, beginning with the first anniversary
of the Date of Issuance (as defined below), at the rate indicated in
the chart below, such rate to be calculated as the specified
percentage of the stated value of such Share from and including the
Date of Issuance of such Share, to and including the date on which the
Corporation redeems such Share (as provided for in subsection (d)
below). Such dividends will accrue whether or not they have been
declared and whether or not there are funds of the Corporation legally
available for the payment of dividends. For the purposes of
determining the amount of any dividend, July 1, 1993 will be deemed
the "Date of Issuance," regardless of (A) the date upon which any
Shares are issued, (B) the number of times transfer of such Shares is
made on the stock records maintained by or for the Corporation, and
(C) the number of certificates which may be issued to evidence such
Shares.
The dividend rate shall follow the table set forth below:
ANNUAL RATE YEARS
----------- -----
0%......................... July 1, 1993-June 30, 2000
2%......................... July 1, 2000-June 30, 2005
4%......................... July 1, 2005-June 30, 2010
6%......................... July 1, 2010-June 30, 2015
8%......................... July 1, 2015-June 30, 2020
10%......................... July 1, 2020-June 30, 2025
(ii) Dividend Payment and Accrual Dates. The Corporation will
pay dividends, if at all, on the Series A Preferred Stock within 60
days following the applicable anniversary date as set forth in the
table above. To the extent dividends are not paid as provided for
herein, all such unpaid dividends will be deemed to have accrued on
each Share outstanding as of the applicable anniversary date, and will
be added to the Liquidation Value (as defined below) of such Share,
and will remain a part thereof until such dividends are paid or until
the Share is redeemed.
(iii) Distribution of Partial Dividend Payments. If at any time
the Corporation pays less than the total amount of dividends then
accrued with respect to the Series A Preferred Stock, such payment
will be distributed ratably among the holders of the Series A
Preferred Stock based upon the aggregate accrued but unpaid dividends
on the Shares held by such holder.
(d) Redemptions.
(i) Scheduled Redemption. Except as set forth herein, the
Corporation will redeem all of the then outstanding Shares of Series A
Preferred Stock on July 1, 2025 (the "Scheduled Redemption Date"),
at a price per Share equal to the Liquidation Value thereof. The sum of the
stated value of the Share and all accrued cumulative and unpaid dividends
thereon shall be referred to as the "Liquidation Value."
(ii) Special Redemptions. Notwithstanding the foregoing, the Corporation
may redeem all of the then outstanding Shares of Series A Preferred Stock at any
time, upon 30 days prior written notice to the holders of such Shares, at a
price per share equal to the Liquidation Value of the Shares as of the date upon
which the Shares are to be redeemed.
(iii) Payment. For each Share which is to be redeemed, if the funds of the
Corporation legally available for redemption of the Shares on any redemption
date are insufficient to redeem the total number of Shares to be redeemed on
such date, those funds which are legally available will be used to redeem the
maximum possible number of Shares ratably among the holders of the Shares to be
redeemed based upon the aggregate Liquidation Value of such Shares held by each
such holder. At any time thereafter, when additional funds of the Corporation
are legally available for the redemption of Shares, such funds will immediately
be used to redeem the balance of the Shares which the Corporation has become
obligated to redeem on any redemption date but which it has not redeemed.
(iv) Notice of Redemptions. The Corporation will mail written notice of
redemption of Series A Preferred Stock to each record holder not more than sixty
days nor less than thirty days prior to the date on which such redemption is to
be made. Upon mailing any notice of redemption which relates to a redemption at
the Corporation's option, the Corporation will become obligated to redeem the
total number of Shares specified in such notice at the time of redemption
specified therein. In case fewer than the total number of Shares represented by
any certificate are redeemed, a new certificate representing the number of
unredeemed Shares will be issued to the holder thereof without cost of such
holder within three business days after surrender of the certificate
representing the redeemed Shares.
(v) Dividends After Redemption Date. No Share is entitled to any dividends
accruing after the date on which the Liquidation Value of such Share is paid. On
such date all rights of the holders of such Share will cease, and such Share
will not be deemed to be outstanding.
(e) Conversion Rights.
(i) Subject to paragraphs (ii) and (iii) below, any holder of Series A
Preferred Stock may convert all of the Series A Preferred Stock held by such
holder into shares of Common Stock in the manner, and at such time, as provided
for in paragraphs (ii) and (iii), below.
(ii) Each share of Series A Preferred Stock shall be convertible, at the
option of the holder thereof, and without the payment of additional
consideration by the holder thereof, at any time within ninety (90) days after
the Effective Time of the Merger (as defined in paragraph (viii) below) into
such number of fully paid and nonassessable shares of the Corporation's Common
Stock as shall be determined by multiplying the number of shares to be converted
by the Liquidation Value of such shares, and dividing the result by the Fair
Market Value per share of the Corporation's Common Stock.
(iii) The Fair Market Value per share of the Corporation's Common Stock
shall be deemed to be the average closing price per share of the Corporation's
Common Stock on the Nasdaq National Market System for the five trading days
immediately preceding (and not including) the date of the Effective Time of the
Merger.
(iv) Each conversion of Series A Preferred Stock will be deemed to have
been effective as of the close of business on the date on which the certificate
or certificates representing the Series A Preferred Stock to be converted have
been surrendered at the principal office of the Corporation. At such time that
such conversion has been effected, the rights of the holder of such Series A
Preferred Stock as such holder will cease, and the person or persons in whose
name or names any certificate or certificates for shares of Common Stock are to
be issued upon such conversion will be deemed to have become the holder or
holders of record of the shares of Common Stock represented thereby.
(v) As soon as possible after a conversion has been effected (but in
any event within five business days in the case of paragraph (vii) below),
the Corporation will deliver to the converting holder:
(A) a certificate or certificates representing the number of
shares of Common Stock issuable by reason of such conversion in such
name or names and such denomination or denominations as the converting
holder has specified; and
(B) payment in an amount equal to the amount payable under
paragraph (vii) below with respect to such conversion.
(vi) The issuance of certificates for shares of Common Stock upon
conversion of Series A Preferred Stock will be made without charge to the
holders of such Series A Preferred Stock. Upon conversion of each share of
Series A Preferred Stock, the Corporation will take all such actions as are
necessary in order to ensure the Common Stock issuable with respect to such
conversion will be validly issued, fully paid, and non-assessable.
(vii) If any fractional interest in a share of Common Stock would,
except for the provisions of this paragraph (vii), be deliverable upon any
conversion of the Series A Preferred Stock, the Corporation, in lieu of
delivering the fractional share therefor, will pay an amount to the holder
thereof equal to such fractional interest of the Fair Market Value per
share.
(viii) The "Effective Time of the Merger" means the date an
appropriate certificate of Merger is filed with the Delaware Secretary of
State effecting the merger of BAC, Inc., the Corporation's wholly owned
subsidiary, with and into Bruegger's Corporation.
(f) Voting Rights. The holders of the Series A Preferred Stock are entitled
to one vote for each share held at all meetings of stockholders. Except as
required by the Corporation Law or by the provisions of Section 5.6(h), holders
of Series A Preferred Stock shall vote together with the holders of Common Stock
as a single class.
(g) Priorities.
(i) Dividends. As long as any Series A Preferred Stock remains
outstanding, the Corporation will not declare or pay any dividend or make
any distribution upon the Common Stock, unless and until all accrued but
unpaid dividends on Series A Preferred Stock have been fully paid to the
holders of such shares.
(ii) Priority on Liquidation. Upon any liquidation, dissolution, or
winding up of the Corporation, if the assets of the Corporation to be
distributed among the holders of Series A Preferred Stock and the Common
Stock are insufficient to permit payment to the holders of Series A
Preferred Stock in an amount equal to the Liquidation Value of all
outstanding shares of Series A Preferred Stock, then the assets of the
Corporation to be distributed to such holders will be distributed (A)
first, to the holders of Series A Preferred Stock, until such holders have
been paid the aggregate amount which they are entitled to be paid, or, if
the assets to be distributed are insufficient for such purpose, the entire
assets to be distributed will be distributed ratably among such holders
based upon the aggregate Liquidation Value of Series A Preferred Stock held
by each such holder, and (B) second, the balance (if any) will be
distributed ratably among the holders of the Common Stock.
(h) Amendment and Waiver. No amendment, modification or waiver will be
binding or effective with respect to any provision of this Section 5.6 without
the prior written consent of the holders of at least 50% of the Series A
Preferred Stock outstanding at the time such action is taken; provided that no
such action may change (i) the rate at which or the manner in which dividends on
the Series A Preferred Stock accrue, the times at which such dividends become
payable, the amount payable on redemption of the Series A Preferred Stock, or
the times at which redemption of Series A Preferred Stock is to occur, without
the prior written consent of the holders of at least 60% of the Series A
Preferred Stock then outstanding, or (ii) the percentage required to approve any
change described in clause (i) above, without the prior written consent of the
holders of at least 60% of the Series A Preferred Stock then outstanding.
Notwithstanding anything to be contrary in the foregoing, the Corporation may
issue new series of Preferred Stock without the prior written consent of any
holder of Series A Preferred Stock, provided that the Corporation complies with
the requirements of the Corporation Law and these Restated Articles of
Incorporation.