SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): APRIL 30, 1996
ZAPATA CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-4219 C-74-1339132
(State or other jurisdiction (Commission File No.) (I.R.S. Employee
of incorporation) Identification No.)
1717 ST. JAMES PLACE
SUITE 550
HOUSTON, TEXAS 77056
(Address of principal executive offices)
(713) 940-6100
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS
Zapata Corporation, a Delaware corporation (the "Company") and
Houlihan's Restaurant Group, Inc. ("Houlihan's") entered into a letter of intent
(the "Letter of Intent") relating to the Company's proposed acquisition of 100%
of the outstanding common stock of Houlihan's for a combination of cash and
stock. The proposed acquisition would be conditioned upon, among other things,
the negotiation and execution of a definitive merger agreement, approval of the
merger agreement by the directors and stockholders of both companies, receipt of
certain regulatory approvals and the expiration of any applicable waiting period
with respect thereto, registration of the Company's shares issuable in the
merger under the Securities Act of 1933 and receipt of consent from Houlihan's
lending bank or the refinancing of Houlihan's outstanding bank debt. The Letter
of Intent is attached as Exhibit 99.1 hereto and is incorporated herein by
reference.
In connection with the Letter of Intent, Malcolm I. Glazer entered
into a standstill agreement (the "Standstill Agreement") with the Company
pursuant to which Mr. Glazer, on behalf of himself, his family and entities
controlled by him agreed, among other things, not to increase his or their
ownership of voting securities in the Company above 49.9% on either an
outstanding or fully diluted share basis unless certain conditions are met which
allow such increase or until the Standstill Agreement terminates. The Standstill
Agreement is attached as Exhibit 10 hereto and is incorporated herein by
reference.
A copy of the Press Release, dated May 2, 1996, issued by the
Company relating to the Letter of Intent and the Standstill Agreement is
attached as Exhibit 99.2 hereto and is incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) The following exhibits are filed with this report:
10 Agreement dated and effective as of April 30, 1996 between
Zapata Corporation and Malcolm I. Glazer, individually and
as trustee of the Malcolm I. Glazer Trust.
99.1 Letter of Intent dated April 30, 1996 between Zapata
Corporation and Houlihan's Restaurant Group, Inc.
99.2 Press Release dated May 2, 1996, issued by Zapata
Corporation.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
ZAPATA CORPORATION
By: /s/ JOSEPH L. VON ROSENBERG III
Joseph L. von Rosenberg III
Executive Vice President, General Counsel
and Corporate Secretary
Date: May 8, 1996
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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10 Agreement dated and effective as of April 30, 1996 by and
between Zapata Corporation and Malcolm I. Glazer,
individually and as trustee of the Malcolm I. Glazer Trust.
99.1 Letter of Intent dated April 30, 1996 between Zapata
Corporation and Houlihan's Restaurant Group, Inc.
99.2 Press Release dated May 2, 1996, issued by Zapata Corporation.
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EXHIBIT 10
AGREEMENT
AGREEMENT dated and effective as of April 30, 1996, between Zapata
Corporation, a Delaware corporation (the "Company"), and Malcolm I. Glazer,
individually and as trustee of the Malcolm I. Glazer Trust ("Glazer").
WHEREAS, as of the date of this Agreement, Glazer owns beneficially
10,408,717 shares of common stock, par value $0.25 per share ("Common Stock"),
of the Company, representing approximately 35.2% of the Company's outstanding
Common Stock;
WHEREAS, as of the date of this Agreement, Glazer owns beneficially 15%
or more of the outstanding securities of other corporations, persons,
partnerships, trusts and entities that are entitled to vote for the election of
directors or others performing similar functions ("Glazer Controlled Entities");
WHEREAS, the Company has previously publicly announced its intention to
explore the possible acquisition of two Glazer Controlled Entities that are
engaged in the food service industry;
WHEREAS, the Board of Directors of the Company has appointed a special
committee of its members ("HOL Special Committee") to evaluate the Company's
possible acquisition of Houlihan's Restaurant Group, Inc. ("HOL"), one of the
Glazer Controlled Entities; and
WHEREAS, as a condition to the HOL Special Committee recommending a
transaction between the Company and/or a subsidiary of the Company, the HOL
Special Committee has requested and Glazer has agreed to enter into this
Agreement establishing certain terms and conditions concerning Glazer's
acquisition and disposition of the Company's securities and certain other
aspects of their relationship;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties agree as follows:
1. CERTAIN DEFINITIONS.
"Adjusted Voting Power" shall mean, with respect to
Outstanding Voting Securities, the highest number of votes that the holders of
all such Outstanding Voting Securities would be entitled to cast for the
election of directors or on any other matter (except to the extent such voting
rights are dependent upon arrearages in the payment of dividends, events of
default or bankruptcy), assuming for purposes of this computation, the
conversion into or exchange for Voting Securities or Convertible Securities and
the exercise of Options for the purchase of Voting Securities or Convertible
Securities, in each case to the extent that any such action would increase the
number of such votes.
"Beneficial Ownership" with respect to any security shall
mean, the ability, whether through contract, arrangement, understanding,
relationship or otherwise, to exercise, directly or indirectly, the voting power
(including the power to vote or to direct the voting) and/or the investment
power (including the power to dispose or to direct the disposition) of such
security. Unless the context clearly otherwise requires, the terms "own" and
"hold" and their variations when used in this Agreement in conjunction with
percentages of securities and the voting power associated with such securities
should be read to incorporate the concept of Beneficial Ownership.
"Convertible Securities" shall mean securities of the Company
which are convertible into or exchangeable for Voting Securities.
"Glazer Directors" shall mean Malcolm I. Glazer, Avram Glazer
and any other member of the Glazer family serving on the Company's Board of
Directors from time to time.
"Glazer Group" means Glazer and any corporation, person,
partnership, trust or other entity controlled, directly or indirectly, by Glazer
but does not and shall not in any circumstance include the Company.
"Glazer Public Company" shall mean any publicly held entity
(other than the Company) in which Glazer holds Beneficial Ownership of less than
50% of such entity's issued and outstanding securities that are entitled to vote
in the election of directors or on any other matter (except to the extent such
voting rights are dependent upon arrearages in the payment of dividends, events
of default or bankruptcy).
"Options" shall mean options and rights (whether presently
exercisable or not) to purchase Voting Securities or Convertible Securities
(except options issued under employee stock option plans); and "Outstanding
Voting Securities" shall at any time mean the then issued and outstanding Voting
Securities, Convertible Securities (which shall be counted at the highest
conversion or exchange rate at which they can be converted or exchanged) and
Options (which shall be counted at the highest rate at which they can be
exercised).
"Termination Date" shall mean the date upon which this
Agreement terminates pursuant to paragraph 7.
"Voting Power" shall mean, with respect to Voting Securities,
the highest number of votes that the holders of all Voting Securities, issued
and outstanding on the date such determination
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is made, would be entitled to cast for the election of directors or on any other
matter (except to the extent such voting rights are dependent upon arrearages in
the payment of dividends, events of default or bankruptcy).
"Voting Securities" shall mean the Common Stock and any other
securities of the Company of any kind or class having power to vote for the
election of directors;
2. LIMITATION ON OWNERSHIP OF VOTING SECURITIES, CONVERTIBLE
SECURITIES AND OPTIONS.
(a) Except as expressly permitted by the other provisions of
this Agreement, Glazer shall not, and shall not permit any other member of the
Glazer Group to, acquire, without the prior consent of a majority of the
Company's directors that are not Glazer Directors, Beneficial Ownership of any
Voting Securities, Convertible Securities or Options (collectively, sometimes
the "Regulated Securities") from the date hereof through the Termintion Date, if
after such acquisition the Glazer Group would hold in the aggregate either more
than (i) 49.9% of the Voting Power of all Voting Securities or (ii) 49.9% of the
Adjusted Voting Power of all Outstanding Voting Securities.
(b) Glazer shall be under no obligation to dispose or cause
the disposition of Regulated Securities owned by the Glazer Group in excess of
one of the percentage limitations set forth in subparagraph 2(a) if such excess
is caused by a reduction in the Voting Power of Voting Securities or the
Adjusted Voting Power of Outstanding Voting Securities, as the case may be,
whether as a result of a recapitalization of the Company, a repurchase of
securities by the Company or otherwise.
(c) If any member of the Glazer Group, without the prior
consent of Glazer, acquires Regulated Securities the result of which is to cause
the Glazer Group to exceed one of the percentage limitations set forth in
subparagraph 2(a), Glazer shall not be deemed to be in breach of this paragraph
2 if he shall promptly take all reasonable steps to cause a member of the Glazer
Group to dispose of the Regulated Securities owned by it in excess of such
percentage limitation; provided, however, that in the case of a Glazer Public
Company, Glazer shall only be required to take reasonable good faith efforts to
cause such Glazer Public Company to dispose of the Regulated Securities owned by
it in excess of such percentage limitation.
(d) Notwithstanding any other provisions of this paragraph 2,
Glazer or any member of the Glazer Group designated by Glazer shall have the
right (upon receipt by the Company of written notice to such effect) to acquire
additional Regulated Securities or to make a tender offer (whether for cash of
otherwise) for any and all Outstanding Voting Securities of the Company,
provided such acquisition or tender offer is commenced:
(i) within 90 days after the announcement by any
person, entity or group
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(other than a member of and without any solicitation, promotion,
arrangement or
assistance by any member of the Glazer Group) that such person, entity
or group intends to commence a tender offer for Outstanding Voting
Securities if after the completion of such proposed tender offer such
person, entity or group, together with all persons and entities
controlling, controlled by or under common control or in a group with
it, would, if such tender offer were to be successful, own 14.9% or
more of the Adjusted Voting Power of all Outstanding Voting
Securities; or
(ii) at any time any person, entity or group (other
than a member of and without any solicitation, promotion, arrangement
or assistance by any member of the Glazer Group) holds 14.9% or more of
the Adjusted Voting Power of all Outstanding Voting Securities, or
within 90 days after the filing (without any solicitation, promotion,
arrangement or assistance by any member of the Glazer Group), by any
person, entity or group (other than a member of the Glazer Group)
owning 5% or more of the Adjusted Voting Power of all Outstanding
Voting Securities, of any document with a governmental agency
(including a statement on Schedule 13D with the Securities and Exchange
Commission or a notification under the Hart-Scott-Rodino Antitrust
Improvements Act) to the effect that such person, entity or group
intends or contemplates acquiring Outstanding Voting Securities, if
after the completion of such proposed acquisition such person, entity
or group, together with all persons and entities controlling,
controlled by or under common control or in a group with it, would own
14.9% or more of the Adjusted Voting Power of all Outstanding Voting
Securities;
and provided further that in the case of a tender offer pursuant to subparagraph
2(d), such tender offer is made either:
(x) at a price determined by an Independent
Investment Banker (as hereinafter defined), selected by the
member of the Glazer Group making the tender offer, to be fair
to the holders of Outstanding Voting Securities (other than
the Glazer Group) from a financial point of view; or
(y) if made pursuant to clause (i) of this
subparagraph 2(d), but only if the announced tender offer is
in fact commenced and only if after the completion of the
proposed tender offer by such person, entity or group, such
person, entity or group, together with all persons and
entities controlling, controlled by or under common control or
in a group with it, would (if such tender offer were to be
successful) own 14.9% or more of the Adjusted Voting Power of
all Outstanding Voting Securities, at a price higher than the
price specified in such competing offer at the time of
commencement of the tender offer by a member of the Glazer
Group.
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"Independent Investment Banker" for purposes of this paragraph
means a nationally recognized investment banking firm which neither (i) had an
existing client relationship, immediately prior to its retention to render an
opinion in connection with a tender offer made pursuant to paragraph 2(d) with
any member of the Glazer Group, nor (ii) had received fees aggregating more than
$200,000 in the five years immediately prior thereto from any one or more
members of the Glazer Group.
3. TRANSFER OF OUTSTANDING VOTING SECURITIES.
(a) Except pursuant to clause (iv) of paragraph 3(b) and
except for transfers among members of the Glazer Group, notwithstanding anything
to the contrary in this Agreement, Glazer shall not, and shall not permit any
member of the Glazer Group to, assign, sell or otherwise transfer to any
transferee (such transferee to include all persons and entities controlling,
controlled by or under common control or in a group, as that term is used in
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, with such
person in respect of Outstanding Voting Securities) in one transaction or a
series of transactions whenever occurring, unless such transferee agrees to be
bound by the provisions of this Agreement (it being understood that all
percentage limitations shall be reduced in this Agreement and such transferee's
agreement and such additional adjustments shall be made, so that the Company
shall be in the same position as reasonably practicable as if the transferee
were a member of the Glazer Group), more than such quantity of Regulated
Securities as would result in the transferee, immediately after the transfer,
holding an aggregate of more than 9.9% of the Adjusted Voting Power of all
Outstanding Voting Securities or such greater percentage of the Adjusted Voting
Power of all Outstanding Voting Securities, as may be approved by a majority of
the Company's directors that are not Glazer Directors.
(b) In the event that Glazer or any other member of the Glazer
Group wishes to transfer, assign, sell or otherwise dispose of any Outstanding
Voting Securities owned by it, Glazer shall, or shall cause such other member of
the Glazer Group to, do so in accordance with subparagraphs 3(d) and 3(e) below,
as they are applicable; provided, however, that compliance with such
subparagraphs shall not be required in the following instances: (i) a
disposition pursuant to Rule 144, as in effect from time to time, under the
Securities Act of 1933, as amended (the "Securities Act"), or any successors to
such Rule; (ii) a disposition through a bona fide underwritten public offering;
(iii) a bona fide public distribution by means of any other registration
statement relating to equity securities of the Company (on appropriate forms)
filed by the Company under the Securities Act; (iv) tendering all or any portion
of the Common Stock or other Outstanding Voting Securities then held by it
pursuant to a tender offer (other than by a member or affiliate of, and without
any solicitation, promotion, arrangement or assistance by, the Glazer Group) for
at least 14.9% of the outstanding shares of Common Stock or at least 14.9% of
the Adjusted Voting Power of other Outstanding Voting Securities, as the case
may be, provided that at the time such offer is commenced the entity making such
tender offer (x) has financing or financial commitments from
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responsible financial institutions sufficient to purchase all shares of Common
Stock or other Outstanding Voting Securities, as the case may be, sought to be
purchased pursuant to such offer and (y) commits to use its best efforts to
acquire any shares of Common Stock or other Outstanding Voting Securities, as
the case may be, not purchased in the tender offer at the highest price paid in
the offer; (v) a merger or consolidation in which the Company is acquired or a
plan of liquidation of the Company; (vi) the conversion, exchange or exercise of
Convertible Securities or Options in accordance with their respective terms; or
(vii) a bona fide pledge or grant of a security interest in or any other lien or
encumbrance ("Lien") in such Outstanding Voting Securities, provided that any
foreclosure, subsequent sale or other disposition by the holder of the Lien
shall be expressly subject to the terms of this Agreement.
(c) The Company agrees, in connection with a bona fide
underwritten public offering by the Glazer Group and in addition to the current
shelf registration statement that it agrees to maintain during the term of this
Agreement with respect to the shares of Common Stock owned by Glazer from time
to time, to register under the Securities Act, at the expense of the Company,
such Outstanding Voting Securities as Glazer shall designate for sale, but such
obligation to register shall be limited to two registered offerings requested by
Glazer separated by a period of at least one year. In connection with any such
registration statement, Glazer and the Company agree to execute such
underwriting agreements or other documents providing for mutual indemnification
and contribution arrangements, the payment of fees and commissions and the
performance of other obligations reasonably related to such transaction as are
customarily included in underwriting agreements and other documents executed by
sophisticated parties involved in similar transactions. Glazer agrees that he
will not, and will not permit any other members of the Glazer Group to, tender
its shares of Common Stock or other Outstanding Voting Securities pursuant to
clause (iv) of the first sentence of this paragraph unless it has given notice
to the Company and made a public announcement of its intention to tender not
less than ten business days prior to the expiration of such tender offer.
(d) In the event that Glazer, or any other member of the
Glazer Group, wishes to transfer, assign, sell or otherwise dispose of any or
all Outstanding Voting Securities owned by it for cash only, Glazer shall, or
shall cause such other member of the Glazer Group to, give to the Company notice
of such member of the Glazer Group's offer to sell such Outstanding Voting
Securities and the cash price and terms it is willing to accept (the "Offering
Terms"). The Company shall have a period of time to accept such offer (the
"Offer Period"). (i) If such offer is not accepted within the Offer Period, such
member of the Glazer Group shall have a period of time (the "Selling Period") in
which it shall be free to sell such Outstanding Voting Securities at the
Offering Terms or at cash prices or terms more favorable to such member of the
Glazer Group than the Offering Terms. (ii) If such member of the Glazer Group,
within the Selling Period, wishes to accept a cash price or terms less favorable
to such member of the Glazer Group than the Offering Terms, it shall notify the
Company of its new cash price and terms (the
"Revised Offering Terms"), in which event
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(x) the Company shall have the Offer Period to accept such new offer, and (y) if
such new offer is not accepted within such Offer Period, such member of the
Glazer Group shall have the Selling Period in which it shall be free to sell
such Outstanding Voting Securities at such Revised Offering Terms or at cash
prices or terms more favorable to such member of the Glazer Group than the
Revised Offering Terms. (iii) Notwithstanding clause (ii) of this subparagraph
3(d), if such member of the Glazer Group, within any Selling Period, intends to
accept a firm offer of a cash price on terms less favorable to such member of
the Glazer Group than the Offering Terms or Revised Offering Terms, as the case
may be, it shall notify the Company of the cash price and terms of such firm
offer, in which event (A) the Company shall have a different period within which
to accept the revised offer (the "Reoffer Period"), and (B) if such revised
offer is not accepted within such Reoffer Period, such member of the Glazer
Group shall have the Selling Period in which it shall be free to sell such
Outstanding Voting Securities at the cash price and on the terms of such firm
offer or at a cash price or terms more favorable to such member of the Glazer
Group than those of the firm offer. (iv) The closing of the sale and purchase
under an offer accepted by the Company shall take place within 30 days of the
date of acceptance. The Offer Period shall be 60 days from the date of notice of
Offering Terms or Revised Offering Terms, as the case may be, and the Reoffer
Period shall be 30 days from the date of notice of the terms of such a firm
offer, except in the event that any transfer (including a transfer to a voting
trust), assignment, sale or other disposition by a member of the Glazer Group
governed by this subparagraph 3(d) is compelled by order of a court,
administrative agency or other competent governmental authority, in which case
the Offer Period and the Reoffer Period both shall be 15 business days. (v) The
Selling Period shall be 180 days from the date the Offer Period or Reoffer
Period, as the case may be, expires.
(e) In the event that Glazer or any other member of the Glazer
Group wishes to transfer, assign, sell or otherwise dispose of any or all of the
Outstanding Voting Securities owned by it solely for consideration other than
cash, Glazer shall, or cause such other member of the Glazer Group to, give the
Company notice at least 60 days before such member of the Glazer Group legally
obligates itself to transfer, assign, sell or dispose of any such Outstanding
Voting Securities, unless such transfer (including a transfer to a voting
trust), assignment, sale or disposition is compelled by order of a order,
administrative agency or other competent governmental authority, in which event
such member of the Glazer Group shall give the Company notice at least 15
business days prior to such transfer, assignment, sale or disposition.
(f) The Company may assign its right under subparagraph 3(d)
to purchase Outstanding Voting Securities of the Glazer Group; provided that
such assignee agrees in writing (for the benefit of the selling member of the
Glazer Group) to purchase the selling member of the Glazer Group's Outstanding
Voting Securities in accordance with the provisions of subparagraph 3(d), and
the Company guarantees to such member of the Glazer Group all of the assignee's
obligations to such member of the Glazer Group in connection with said purchase.
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(g) Notwithstanding the provisions of subparagraph 3(d), if at
any time during the Selling Period a member of the Glazer Group wishes to
transfer, sell, assign or otherwise dispose of its Outstanding Voting Securities
solely for consideration other than cash, the provisions of subparagraph 3(d)
shall not (or shall cease to) apply to such transaction and such transfer, sale,
assignment, or other disposition shall be governed by the provisions of
subparagraph 3(e).
(h) Notwithstanding anything herein to the contrary,
subparagraphs 3(d) and 3(e) shall not apply to any sale, transfer, assignment or
other disposition of a type described in subparagraph 3(b)(i) through
3(b)(viii).
4. UNDERTAKINGS BY THE COMPANY. So long as the Glazer Group shall hold
more than 9.9% of the Voting Power of all Voting Securities, the Company agrees
to take no action to solicit, promote or arrange for, or (except as required by
law) assist in, the acquisition by any person, entity or group (other than a
member of the Glazer Group), together with all persons and entities controlling,
controlled by or under common control or in a group with it, of 14.9% or more of
the Adjusted Voting Power of all Outstanding Voting Securities or of all or
substantially all of the assets of the Company; provided, however, that the
Company shall be free to respond to and authorize negotiations with respect to a
proposed transaction initiated by a third party and not solicited by the Company
subsequent to the date hereof; and provided further, that nothing herein shall
prevent the Company from taking action, in accordance with the procedures set
forth in the remainder of this paragraph, to solicit, promote or arrange for, or
agree to or assist in, the acquisition by any person, entity or group of
Outstanding Voting Securities or assets of the Company in a transaction or
transactions which is to be approved in advance of the consummation of any
material part of such transaction or transactions by the affirmative vote of a
majority of the Outstanding Voting Securities entitled to vote thereon at an
annual or special meeting called for the purpose of acting thereon. Prior to
taking any action to solicit, promote or arrange for, or agree to or assist in,
an acquisition pursuant to the second proviso of the next preceding sentence,
the Company shall (a) give Glazer notice of its desire to do so, stating the
type or types of transactions sought, and (b) if so requested by Glazer or
advised by counsel, make a public announcement of its desire to do so. The
Company thereafter may furnish information to and engage in discussions and
negotiations with the prospective purchaser for such purposes with respect to
the type or types of transactions described in the notice to Glazer. If no
definitive written agreement for such acquisition subject to this paragraph 4 is
executed and approved by the boards of both the Company and such a prospective
purchaser within the 120-day period following the effective date of notice to
Glazer, the Company's notice to Glazer shall expire and the Company may not
thereafter solicit, promote or arrange for, or agree to or assist in, such
acquisition unless and until a new notice is given to Glazer. Notwithstanding
the foregoing, the Company may solicit, promote or arrange for, or agree to or
assist in, the acquisition by any person, entity or group of Outstanding Voting
Securities or assets upon the receipt by the Company of a written notice form
the Glazer Group (x) pursuant to
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paragraph 2(d) that it intends to commence a tender offer pursuant to such
paragraph or (y) pursuant to paragraph 3(b) that it intends to tender its shares
of Common Stock or other Outstanding Voting Securities pursuant to clause (iv)
of such paragraph.
If a member of the Glazer Group shall make a written proposal
to the Company or its Board of Directors to enter into a negotiated transaction
with the Company which would result in the Glazer Group acquiring additional
securities of the Company raising its holding to more than 49.9% of the Voting
Power of all Voting Securities or the acquisition by the Glazer Group of
substantially all the assets of the Company, in either case for a price stated
in such proposal, and counsel to the Company shall advise the Company that
receipt of such proposal requires the Company to make the receipt and terms
thereof public, the restrictions of this paragraph 4 shall become inoperative
upon receipt by Glazer of written notice form the Company to that effect. If the
member of the Glazer Group that made such proposal shall subsequently withdraw
the proposal by written notice to the Company, the provisions of this paragraph
4 shall thereupon be reinstated; provided that this paragraph shall not limit
the Company in concluding negotiations undertaken and not terminated prior to
such withdrawal.
5. PROPOSED ACQUISITION OF A GLAZER CONTROLLED ENTITY.
(a) Prior to the commencement of any substantive negotiations
that could reasonably be expected to lead to the Company's acquisition of all or
a material portion of a Glazer Controlled Entity through merger, consolidation,
stock purchase, asset acquisition or otherwise (an "Acquisition"), the Board of
Directors of the Company shall appoint a special committee of directors
("Special Committee"). Such Special Committee shall be empowered to retain, at
the sole expense of the Company, investment bankers, lawyers and other
consultants and advisors to evaluate all aspects of the possible Acquisition.
The members of each Special Committee shall be directors who are not Glazer
Directors. Each Special Committee shall have the sole corporate power and
authority to negotiate the terms of any Acquisition if permitted by law
(otherwise the Special Committee shall recommend the Acquisition to the
Company's entire Board of Directors), to call all regular or special meetings of
stockholders, to approve the Acquisition and take all other actions reasonably
related thereto on behalf of the entire Board of Directors, and to authorize
officers and other representatives of the Company to sign all documents and take
such other actions on behalf of the Company as may be necessary, desirable or
appropriate to consummate the Acquisition. The Board of Directors has
established the HOL Special Committee comprised of Ronald C. Lassiter
(Chairman), Robert V. Leffler, Jr. and W. George Loar to evalute the possible
Acquisition of HOL.
(b) If any aspect of an Acquisition that has been approved by
a Special Committee requires approval by the holders of outstanding Voting
Securities, Glazer shall, and shall cause each member of the Glazer Group to,
grant the members of the Special Committee an irrevocable proxy to vote all
outstanding Voting Securities that each member of the Glazer Group
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is entitled to vote on such matter, whether at a regular or special meeting of
stockholders, in such manner as a majority of the members of the Special
Committee shall determine in their sole discretion. The irrevocable proxy shall
be in substantially the form of Exhibit A attached hereto. Each proxy granted by
Glazer pursuant to this paragraph 5(b) shall be deemed to be coupled with an
interest.
6. GLAZER'S RIGHT OF FIRST PURCHASE.
(a) In the event the Company's Board of Directors proposes to
offer and sell any Regulated Securities during the term of this Agreement ("New
Securities"), Glazer shall have the right of first purchase to acquire his Pro
Rata Share of the New Securities for the same price and on the same terms and
conditions as the Company proposes to sell the New Securities to others.
Glazer's Pro Rata Share shall mean the percentage of the aggregate Adjusted
Voting Power of all Outstanding Voting Securities represented by the Outstanding
Voting Securities owned by Glazer on the date the Board of Directors authorizes
the offer and sale of the New Securities.
(b) At least 20 days prior to the date on which the Company
proposes to issue and sell the New Securities, the Company shall notify Glazer
in writing of the terms and conditions of the proposed offering of New
Securities and its bona fide intention to offer and sell the New Securities
("Notice"). If for any reason, the sale of such New Securities is not
consummated, Glazer's election to purchase such New Securities shall lapse and
be of no further force and effect. Glazer may within ten days after the receipt
of the Notice, elect to purchase all but not less than all of his Pro Rata Share
of the issue of New Securities on the terms and conditions set forth in the
Notice. The Notice shall set forth (i) the number and type of New Securities
proposed to be issued and sold and the material terms of such New Securities,
(ii) the proposed price or range of prices at which such New Securities are
proposed to be sold and the proposed terms of payment and (iii) the proposed
date of issuance and sale of such New Securities. If such right of first
purchase is not timely exercised by Glazer, the right of first purchase with
respect to the New Securities described in the Notice shall be extinguished, and
the Company shall be permitted to sell the New Securities on the terms set forth
in the Notice at any time within the 120-day period following the date of the
Notice. After the expiration of such 120-day period, Glazer's right of first
purchase shall be reinstated.
(c) The right of first purchase created by this paragraph 6
shall not apply to (i) New Securities issued to officers or employees of the
Company and its subsidiaries pursuant to stock option or other incentive plans
and arrangements that have been approved by the stockholders of the Company or
(ii) New Securities sold otherwise than entirely for cash.
-10-
7. TERMINATION. This Agreement shall extend until the earliest
of the dates or events described in subparagraphs (a) through (f) below or until
terminated in accordance with any other provision of this Agreement:
(a) the earlier of the last day of the eighteenth calendar
month following consummation of the Acquisition of HOL, or if no such
Acquisition is effected by the Company, the date upon which a public
announcement is made by the Company that it has abandoned any intention to
acquire HOL (such earlier termintion date being herein referred to as the
"Expiration Date"); notwithstanding the foregoing, if during the term of this
Agreement, the Company announces that it intends to acquire another Glazer
Controlled Entity, the term of this Agreement shall not terminate on the
Expiration Date but shall be automatically extended until the first to occur of
(i) the last day of the eighteenth calendar month following the consummation of
the acquisition of such Glazer Controlled Entity, or (ii) the date upon which a
public announcement is made by the Company that it has abandoned any intention
to acquire such Glazer Controlled Entity;
(b) the issuance by the Company of any new class of securities
having the right to vote, separately, as a class, for directors, or to approve,
separately as a class, mergers or any other major transactions involving the
Company (except to the extent such voting rights are dependent on arrearages in
the payment of dividends, events of default or bankruptcy); provided that, this
paragraph 7(b) shall not apply to any new class of securities the issuance and
specific terms of which shall have been approved in advance by the affirmative
vote of a majority of the outstanding stock of the Company entitled to vote
thereon at an annual or special meeting called for the purpose of acting
thereon;
(c) notice that Glazer has determined to terminate this
Agreement effective on a date stated in such notice, given within ninety days
after the execution, approval by the Board of Directors of the Company, or
announcement of an agreement, or agreement in principle, whether or not subject
to approval by the Board of Directors of the Company or other corporate action,
that provides for (i) the merger of the Company with and into any other entity
(or of any other entity with or into the Company) and which would result in any
person, entity or group (other than the Glazer Group) holding 14.9% or more of
the Adjusted Voting Power of all Outstanding Voting Securities or in the
percentage of Adjusted Voting Power of Outstanding Voting Securities of the
surviving company (computed in the same manner as Adjusted Voting Power of
Outstanding Voting Securities is computed with respect to the Company) held by
the Glazer Group immediately following such merger being less than 90% of the
percentage of Adjusted Voting Power of Outstanding Voting Securities held by the
Glazer Group immediately prior to the merger, or (ii) any plan of reorganization
or liquidation of the Company, in each case without the prior approval thereof
by the affirmative vote of a majority of the outstanding stock of the Company
entitled to vote thereon at an annual or special meeting called for the purpose
of acting thereon;
-11-
(d) notice that Glazer has determined to terminate this
Agreement effective on a date stated in such notice, at any time during which
the Glazer Group holds more than (i) 49.9% of the Adjusted Voting Power of all
Outstanding Voting Securities or (ii) 49.9% of the Voting Power of all Voting
Securities, in each instance as a result of a tender offer made pursuant to
paragraph 2(d);
(e) the final adjournment of the first annual meeting of
shareholders of the Company after the Glazer Group holds more than (i) 49.9% of
the Adjusted Voting Power of all Outstanding Voting Securities or (ii) 49.9% of
the Voting Power of all outstanding Voting Securities, in each instance as a
result of a tender offer made pursuant to paragraph 2(d); and
(f) the first day on which any person, entity or group, as
that term is used in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended, announces or otherwise discloses that it has Beneficial Ownership of
20% or more of the Adjusted Voting Power of all Outstanding Voting Securities or
20% or more of the Voting Power of all Voting Securities.
Either party may terminate this Agreement prior to any stated
termination date if the other defaults in any material respect in its
obligations hereunder and if such default, providing it is of a nature that may
be cured by the defaulting party, is not cured within ten days.
Either party may waive its right to terminate this Agreement
by a written notice signed by an authorized representative expressly reciting
the event or provision being waived and any conditions or limitations attaching
thereto.
For the purposes of paragraph 7(a), the Company agrees to
issue a public announcement promptly following the determination by a Special
Committee that it has abandoned any intention to acquire HOL or any other Glazer
Controlled Entity.
8. AUTHORIZATION. Glazer agrees not to take, and not to permit any
member of the Glazer Group to take, any action by consent pursuant to Section
228 of the Delaware General Corporation Law which is inconsistent with the terms
of this Agreement; provided, however, that Glazer or any member of the Glazer
Group may take any action by consent which is permitted under Section 228 of the
Delaware General Corporation Law in connection with any tender offer made by a
member of the Glazer Group which is permitted under paragraph 2(d).
9. COMPOSITION OF BOARD. During the term of this Agreement, Glazer
shall, and shall cause the members of the Glazer Group to, take such action as
may be necessary, appropriate or desirable to assure that all times (a) at least
three members of the Company's Board of Directors are not Glazer Directors and
(b) a majority of the members of the Company's Board of Directors are not Glazer
Directors.
-12-
10. MISCELLANEOUS.
(a) The parties acknowledge and agree that the breach of the
provisions of this Agreement by Glazer or the Company would irreparably damage
the other party hereto, and accordingly agree that injunctive relief and
specific performance shall be appropriate remedies to enforce the provisions of
this Agreement; provided, however, that nothing herein shall limit the remedies,
legal or equitable, otherwise available.
(b) This Agreement shall be governed by and interpreted in
accordance with the law of the State of Delaware applicable to agreements made
and to be performed entirely within such state.
(c) This Agreement may be executed in several counterparts and
such counterparts together shall constitute one and the same instrument.
(d) Notices given pursuant to this Agreement shall be given as
follows:
If to the Company:
Zapata Corporation
1717 St. James Place, Suite 550
Houston, Texas 77056
Attention: General Counsel
If to Glazer:
Malcolm I. Glazer
1482 South Ocean Boulevard
Palm Beach, Florida 33480
with a copy to:
Avram Glazer
18 Stoney Clover Lane
Pittsford, New York 14534
Notices shall be deemed to have been given (i) if mailed, on the second
day following mailing; and (ii) if hand delivered or given by telex, on the
business day following receipt.
-13-
(e) The Agreement may be amended or modified by the parties
hereto, provided that such amendment or modification is approved by a majority
of the directors of the Company that are not Glazer Directors.
ZAPATA CORPORATION
By: /s/ JOSEPH L. VON ROSENBERG III
Authorized Officer
MALCOLM I. GLAZER,
Malcolm I. Glazer, individually and as Trustee of the
Malcolm I. Glazer Trust
-14-
Exhibit A
FORM OF IRREVOCABLE PROXY
Pursuant to paragraph 5(b) of the Agreement dated and effective as of
April 30, 1996 ("Agreement") between Zapata Corporation, a Delaware corporation,
and Malcolm I. Glazer, individually and as trustee of the Malcolm I. Glazer
Trust, the undersigned hereby agrees as follows:
1. Capitalized terms that are not defined herein shall have the
meanings set forth in the Agreement.
2. The undersigned member of the Glazer Group holds Beneficial
Ownership of _________ shares of Common Stock ("Stock") and is entitled to vote
such shares at the Special [Annual] Meeting of Stockholders of the Company
scheduled to be held on _________ __, 19__ ("Meeting") at which meeting
shareholders of the Company will be asked to approve or disapprove the Company's
acquisition of _____________________, a Glazer Controlled Entity ("Subject
Acquisition").
3. The undersigned hereby revokes any proxy heretofore given and
appoints _____________, ______________ and ______________, the members of the
Special Committee that evaluated the Subject Acquisition, and each one of them
(with full power to each of them to act as a majority of such members shall
approve), as proxies and attorneys-in-fact, in the undersigned's name, place and
stead, in any and all capacities, each with full power of substitution and
resubstitution (a "Proxy" or the "Proxies"), to exercise all voting authority
with respect to the Stock in connection with the approval or disapproval of the
Subject Acquisition pursuant to the terms of the Agreement, granting to each
Proxy full power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises in order to
effectuate the same as fully to all intends and purposes as the undersigned
might or could do if present, hereby ratifying and confirming all that a
majority of the Proxies may lawfully to or cause to be done by virtue hereof.
This proxy is coupled with an interest and shall be irrevocable during the term
of the Agreement ("Irrevocable Proxy") until the first to occur of (a) the
adjournment of the Meeting or (b) the Company's publicly announced abandonment
of the Subject Acquisition. Upon termination of the Agreement, this Irrevocable
Proxy shall be deemed to be revoked.
4. In exercising the voting authority referred to in paragraph 3 above,
each Proxy shall have complete discretion to take such action, or refrain from
taking such action, as he or she deems necessary, appropriate or desirable under
the circumstances, subject only to the caveat that no Proxy shall be authorized
and empowered to engage in intentional misconduct or action that otherwise
constitutes gross negligence ("Standard of Care"). Any action taken by a Proxy
pursuant to the express terms of the Agreement shall be conclusively presumed to
comply with the Standard of Care. Any action taken by a Proxy upon the written
advice of Richards, Layton & Finger, Wilmington, Delaware, or other independent
legal counsel reasonably acceptable to the Proxy, shall also be conclusively
presumed to comply with the Standard of Care. All reasonable fees and expenses
of such legal counsel shall be paid directly by the Company.
In Witness Whereof, this Irrevocable Proxy has been executed by the
undersigned this ___ day of ______________, 19__.
___________________________________
-2-
EXHIBIT 99.1
Houlihan's Restaurant Group, Inc.
April 30, 1996
Page 1
April 30, 1996
Houlihan's Restaurant Group, Inc.
2 Brush Creek Boulevard
Kansas City, Missouri 64112
Attention: Mr. William W. Moreton
Executive Vice President
and Chief Financial Officer
Gentlemen:
A special committee ("Special Committee") of the Board of Directors of Zapata
Corporation, a Delaware corporation ("Zapata"), has developed and hereby submits
to you for your consideration this revised letter of intent relating to Zapata's
acquisition of 100% of the outstanding common stock of Houlihan's Restaurant
Group, Inc. ("HOL") for a combination of cash and stock (the "Proposal"). Zapata
suggests that the combination be effected through a merger of HOL into a
wholly-owned subsidiary of Zapata. Subject to the cash election feature noted
below, each outstanding share of common stock of HOL would be converted in the
merger into $4.00 in cash, without interest, and $4.00 in market value of Zapata
common stock. Shareholders that are not affiliated with Malcolm Glazer could
elect, subject to proration as noted below, to receive 100% cash in the merger
for their HOL shares. To the extent unaffiliated stockholders exercise their
cash elections, (a) the number of shares of Zapata common stock issuable to such
unaffiliated stockholders in the merger will decrease and the amount of cash
payable to them will increase and (b) the number of shares of Zapata common
stock issuable to Malcolm Glazer and his affiliates in the merger will increase
and the amount of cash payable to them will decrease. In the event that the
unaffiliated stockholders as a group exercise elections to receive such an
amount of cash in the merger that the aggregate ownership of Zapata common stock
by Malcolm Glazer and his affiliates after the merger would exceed 49.9% of
Zapata's then outstanding common stock, the cash elections of the unaffiliated
stockholders would be reduced pro rata to assure that the foregoing 49.9%
ownership threshold is not exceeded.
Houlihan's Restaurant Group, Inc.
April 30, 1996
Page 2
The market value of the shares of Zapata common stock issuable in the merger
will be based upon the average of the closing prices for such stock on the New
York Stock Exchange for a specified number of trading days prior to the
effective date of the merger to be negotiated.
The transaction will be effected pursuant to a definitive merger agreement that
will be generally on the terms of the draft merger agreement that we heretofore
delivered to you, with such changes therein as may be negotiated by the Special
Committee and the special committee of the board of directors of HOL. Zapata is
the Parent referred to in that agreement, and HOL is the Company referred to
therein. Attached hereto as Exhibit A is a suggested draft form of joint press
release relating to the Proposal.
The matters referred to herein constitute an expression of our mutual intention
only and do not constitute a binding agreement between us with respect to the
Proposal. Any such agreement would only arise as a result of the negotiation,
execution and delivery of a written definitive agreement, whether in the form
previously submitted to you or otherwise, having terms and conditions
satisfactory to each of us. Neither of us may bring any claim or action against
the other as a result of the failure to agree on or enter into any definitive
agreement as contemplated herein. Nothing in this letter, however, shall affect
the enforceability of the Confidentiality Agreement dated December 1, 1995
between Zapata and HOL.
If this letter correctly reflects our understanding, please sign one original
and return it to the undersigned, retaining the other in your files.
Very truly yours,
ZAPATA CORPORATION
By: /s/ R.C. LASSITER
Name: R.C. Lassiter
Title: Chairman of Special Committee
Facsimile (for notices): 713-940-6280
Houlihan's Restaurant Group, Inc.
April 30, 1996
Page 3
ACCEPTED AND AGREED TO
as of May __, 1996
HOULIHAN'S RESTAURANT
GROUP, INC.
By: /s/ WILLIAM W. MORETON
Name: William W. Moreton
Title: Executive Vice President/CFO
Facsimile (for notices): 810-561-2842
EXHIBIT 99.2
For Release May 2, 1996
HOUSTON, TX--May 2, 1996--(NYSE: ZAP)--Zapata Corporation ("Zapata") and
Houlihan's Restaurant Group, Inc. ("Houlihan's") announced today that they have
entered into a letter of intent relating to Zapata's proposed acquisition of
Houlihan's for a combination of cash and stock amounting to $8.00 per share. In
view of Malcolm I. Glazer's ownership of 35.2% of Zapata's 29.5 million
outstanding shares of common stock and 73.3% of Houlihan's 10.0 million
outstanding shares of common stock, the letter of intent was negotiated by
representatives of special committees of the directors of both Zapata and
Houlihan's who are not members of the Glazer family. The proposed transaction
represents another step in Zapata's transformation into a food service company.
Zapata and Houlihan's have proposed a merger of Houlihan's into a newly
organized subsidiary of Zapata with each share of Houlihan's stock being
converted into $4.00 in cash, without interest and $4.00 in average market value
of Zapata common stock for a specified number of trading days prior to the
effective date of the merger. It is proposed that shareholders not affiliated
with Malcolm Glazer would be afforded the opportunity to elect, subject to
proration as noted below, to receive 100% cash in the merger for their
Houlihan's shares. In the event that the unaffiliated shareholders as a group
exercise elections to receive such an amount of cash in the merger that the
aggregate ownership of Zapata common stock by Malcolm Glazer and his affiliates
after the merger would exceed 49.9% of Zapata's then outstanding common stock,
the cash elections of the unaffiliated shareholders will be reduced pro rata to
assure that the foregoing 49.9% ownership threshold is not exceeded.
Any transaction would be subject to the negotiation and execution of a
definitive merger agreement and, among other things, approval of the transaction
by the directors and stockholders of both companies, compliance with the
Hart-Scott-Rodino Antitrust Improvements Act, registration of the Zapata shares
issuable in the merger under the Securities Act of 1933 and receipt of consent
from Houlihan's lending bank or the refinancing of Houlihan's outstanding bank
debt. There can be no assurance that a transaction will be consummated or, if
consummated, will be on the terms as proposed.
Zapata also announced that Malcolm Glazer has entered into a standstill
agreement with Zapata. Under the standstill agreement, Mr. Glazer has agreed on
behalf of himself, his family and entities controlled by him not to increase his
or their ownership of voting securities in Zapata above 49.9% on either an
outstanding or fully diluted share basis, unless, among other things, such
increase is approved by a majority of the directors on the Zapata board who are
not members of the Glazer family or is in response to a tender offer or other
proposal by others to acquire more than 14.9% of Zapata's voting securities.
As long as the standstill agreement is in effect, Mr. Glazer will have a right
of first purchase to maintain his proportionate ownership position in Zapata.
Generally, Zapata will have the right to acquire any voting securities sought to
be transferred by Mr. Glazer. Mr. Glazer will be permitted to sell voting
securities free of Zapata's purchase option in a number of circumstances,
including sales or transfers to a purchaser that agrees to be bound by the terms
of the standstill agreement, pursuant to a public distribution, in response to a
tender offer by an unaffiliated third party for at least 14.9% of Zapata's
outstanding voting securities, in connection with certain corporation
reorganizations or upon conversion, exchange or exercise of outstanding
securities. As long as Mr. Glazer owns more than 9.9% of the voting securities
of Zapata, Zapata has agreed generally not to solicit proposals for the
acquisition of Zapata although it has reserved the right to respond to
unsolicited proposals from others.
Under the standstill agreement, any combinations between Zapata and other
entities in which Mr. Glazer owns 15% or more of the voting equity, such as
Houlihan's, must be negotiated and approved by a special committee of Zapata's
directors. In the event of a proposed acquisition of a Glazer controlled entity,
Mr. Glazer has agreed to grant the special committee evaluating such acquisition
an irrevocable proxy to vote all of Mr. Glazer's Zapata shares in such manner as
the committee in its sole discretion determines.
The standstill agreement terminated upon, among other events, the first to occur
of eighteen months after Zapata's acquisition of Houlihan's, Zapata's
announcement that it does not intend to acquire Houlihan's, the acquisition by
another of securities representing 20% of the voting power attributable to
Zapata's outstanding capital stock, a breach of the terms of the standstill
agreement by Zapata or Mr. Glazer's acquisition of more than 50% of Zapata's
outstanding voting securities in accordance with the terms of the agreement. In
the event that Zapata announces its intention to acquire another Glazer
controlled entity prior to the expiration of the standstill agreement, the
termination date of the standstill agreement will be automatically extended
until the first to occur of eighteen months after the acquisition of such entity
or Zapata's announcement that it does not intend to acquire such entity.
# # #
Contact: Robert A. Gardiner, Zapata Corporation (713) 940-6100
Richard Stern, Stern & Co. (212) 777-7722
