CKE Restaurants and Santa Barbara Restaurant Group (SBRG) have agreed to amend the merger agreement by which CKE will acquire SBRG.
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As originally executed in December 2001, the merger agreement provided that each share of SBRG common stock would be exchanged for one-half of one share of CKE common stock. The merger agreement also provided that if, at the time of the merger, the average CKE common stock price were to be less than US$6.25 per share, SBRG could terminate the merger agreement, and if the average CKE common stock price were to be greater than US$9.50 per share, CKE could terminate the merger agreement.
Because of CKE’s common stock price, which has closed in excess of US$9.50 on nine days so far in January 2002, CKE and SBRG have agreed to amend the merger agreement. Pursuant to the amendment, each share of SBRG common stock will still be exchanged for one-half of one share of CKE common stock, unless the average closing price of the CKE common stock for the ten-day period ending two days prior to the merger exceeds US$10.00 per share.
If the average closing price of the CKE common stock for such ten-day period exceeds US$10.00 per share, each share of SBRG common stock will be exchanged for a partial share of CKE common stock having a value of US$5.00 (based on the average closing price for such ten day period).
The parties also agreed to remove CKE’s right to terminate the merger if the average CKE common stock price were to be greater than US$9.50 per share at the time of closing.
