The Board adopted the Rights Agreement in response to media reports about a significant open market accumulation in Dine Brands’ stock and derivatives. The Rights Agreement is intended to reduce the likelihood that anyone is able to gain control of Dine Brands without paying all stockholders an appropriate control premium, and to provide the Board the adequate opportunity to make informed judgments and take actions that are in the best interests of all stockholders.
Pursuant to the Rights Agreement, Dine Brands will issue, by means of a dividend, one preferred share purchase right ("Right") for each outstanding share of Dine Brands’ common stock to stockholders of record on the close of business on November 9, 2026. Initially, these Rights will not be exercisable and will trade with, and be represented by, the shares of Dine Brands’ common stock. The Rights Agreement will expire on October 27, 2027, or earlier, as provided in the Rights Agreement.
The Rights Agreement is similar to many other rights plans adopted by publicly-held companies. Under the Rights Agreement, the Rights generally become exercisable only if a person or group (each, an "Acquiring Person") acquires beneficial ownership of the Specified Percentage (as defined below) or more of the outstanding shares of Dine Brands’ common stock in a transaction not approved by the Board. In that situation, each holder of a Right (other than the Acquiring Person, whose Rights will become void and will not be exercisable) will be entitled to purchase, at the then-current exercise price, additional shares of Dine Brands’ common stock at a 50% discount. In addition, if Dine Brands is acquired in a merger or other business combination after an unapproved party acquires more than the Specified Percentage of the outstanding shares of Dine Brands’ common stock, each holder of a Right would be entitled to purchase, at the then-current exercise price, shares of the acquiring company’s stock at a 50% discount. The Board, at its option, may exchange each Right (other than rights owned by the acquiring person that have become void) in whole or in part, at an exchange ratio of one share of Dine Brands’ common stock per outstanding right, subject to adjustment. Except as provided in the Rights Agreement, the Board is entitled to redeem the Rights at $0.001 per Right at any time.
The "Specified Percentage" is defined as (i) 20% (twenty percent) when referring to the beneficial ownership of any person that is a passive investor but only for so long as such person is a passive investor and (ii) 10% (ten percent) when referring to the beneficial ownership of any person that is not a passive investor.
If a person or group that beneficially owns the Specified Percentage or more of the outstanding shares of Dine Brands’ common stock prior to Dine Brands’ announcement of its adoption of the Rights Agreement, then that person’s or group’s existing ownership percentage will be grandfathered, with certain exceptions (however, such Rights will become exercisable if at any time after the announcement of the adoption of the Rights Agreement such person or group increases its ownership of Dine Brands’ common stock).
Stockholders are not required to take any action at this time.