SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Amendment No. 1)
(Rule 13d-101)
Under the Securities Exchange Act of 1934
RIVIERA HOLDINGS CORPORATION
(Name of Issuer)
Common Stock, par value $.001 per share
(Title of Class of Securities)
769627100
(CUSIP Number)
Riviera Holdings Corporation
2901 Las Vegas Boulevard South
Las Vegas, Nevada 89109
(702) 734-5110
Attention: William L. Westerman
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
with a copy to:
Brian J. McCarthy, Esq.
Skadden, Arps, Slate, Meagher & Flom
300 S. Grand Avenue
Los Angeles, California 90071
(213) 687-5070
May 15, 1997
(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following: |-|
Check the following box if a fee is being paid with this Statement: |-|
CUSIP No. 769627100 13D
(1) NAMES OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS:
Allen E. Paulson
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP:
(a) |_|
Not applicable (a) |_|
(3) SEC USE ONLY
(4) SOURCE OF FUNDS
PF
(5) CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e)
Not applicable. |_|
(6) CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
: (7) SOLE VOTING POWER
:
: 463,655
:
NUMBER OF SHARES BENEFICIALLY : (8) SHARED VOTING
OWNED BY EACH REPORTING :
PERSON WITH : 0
:
: (9) SOLE DISPOSITIVE
:
: 463,655
:
:(10) SHARED DISPOSITIVE
:
: 0
(11) AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON:
463,655
(12) CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 11
EXCLUDES CERTAIN SHARES |_|
(13) PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11
9.4%
(14) TYPE OF REPORTING PERSON
IN
CUSIP No. 769627100 13D
RIVIERA HOLDINGS CORPORATION
SCHEDULE 13D
This Amendment No. 1 amends and supplements the Statement on
Schedule 13D (the "Schedule 13D") dated May 7, 1997, relating to the shares
of common stock (the "Common Stock"), par value $.001 per share, of Riviera
Holdings Corporation, a Nevada corporation (the "Company") and is being
filed pursuant to Rule 13d-2 under the Securities Exchange Act of 1934, as
amended.
Unless otherwise indicated, each capitalized term used but
not otherwise defined herein shall have the meaning assigned to such term
in the Schedule 13D. The information set forth in the Exhibits hereto is
hereby expressly incorporated herein by reference and the responses to each
item of this Schedule 13D are qualified in their entirety by the provisions
of such exhibits.
ITEM 4. PURPOSE OF THE TRANSACTION
Item 4 is amended and supplemented as follows:
On May 15, 1997, the Reporting Person entered into a
non-binding letter of intent (the "Letter of Intent") with the Issuer, a
copy of which is attached hereto as [Exhibit A]. The Letter of Intent
contemplates a transaction in which a subsidiary of a newly-formed Delaware
corporation owned by the Reporting Person would merge with and into the
Issuer and all holders of shares of Common Stock would receive in cash $15
plus an amount equal to 7% per annum of such $15 amount from June 1, 1997
through the closing date of the transaction.
Any transaction would be subject to, among other things,
completion of due diligence satisfactory to the Reporting Person,
negotiation and execution of a definitive merger agreement, approval by the
shareholders of the Issuer, receipt of all material consents, receipt of
all Nevada gaming, liquor and other regulatory approvals, and negotiation
and execution of option and voting agreements with the Option Offerors.
No assurance can be given that the definitive merger
agreement will be executed or that the transaction will be consummated.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 is amended and supplemented as follows:
Exhibit A. Letter of Intent, dated as of May 15, 1997, by
and between the Reporting Person and the Issuer.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
May 15, 1997
Date
/s/ Allen E. Paulson
Signature
Allen E. Paulson
EXHIBIT A
May 15, 1997
Mr. Allen E. Paulson
Del Mar Country Club
6001 Clubhouse Drive
Rancho Santa Fe, CA 92067
Dear Mr. Paulson:
This letter of intent will set forth the principal business
terms (the "Terms") upon which a subsidiary of your newly-formed Nevada
corporation ("Newco") proposes to merge (the "Merger") into Riviera
Holdings Corporation ("RHC"), whereby on the "Closing Date" (hereinafter
defined) all holders of shares of RHC common stock (the "Shares") would
receive in cash the "Per Share Purchase Price" (hereinafter defined).
1. "Per Share Purchase Price" means an amount per Share
equal to $15.00 plus an amount equal to 7% per annum of such $15.00 amount
from June 1, 1997 to the Closing Date.
2. "Closing Date" means 10:00 A.M. Pacific Time on the fifth
business day following satisfaction of all conditions specified in the
"Merger Agreement" (hereinafter defined), including receipt of all Nevada
gaming, liquor and other regulatory approvals necessary to consummate the
Merger (the "Approvals"), provided RHC may terminate the Merger Agreement
(unless otherwise provided for in the Merger Agreement) if the Closing Date
shall not have occurred by April 1, 1998 for any reason (other than a
material breach by RHC of its obligations under the Merger Agreement).
3. "Merger Agreement" means an agreement containing
customary representations, agreements and conditions and embodying the
Terms.
4. Stock Options and Employee Stock Purchase Plan Shares.
(a) RHC has furnished Newco with a list of (i) the Shares
("Option Shares") issuable upon exercise of all outstanding options (the
"Options") and (ii) the Shares issued or issuable under RHC's Employee
Stock Purchase Plan Shares ("Purchase Plan Shares").
(b) Under RHC's Non-Qualified Stock Option Plan For
Non-Employee Directors ("Directors Plan"), on May 12, 1997, options (the
"Directors Options") to purchase 2,000 Shares will be issued to the persons
previously identified to you with an exercise price equal to the closing
price of RHC's common stock on May 12, 1997.
(c) On the Closing Date, RHC will cancel the Options by
paying in cash an amount equal to the difference between the exercise price
of the Options and the Merger Per Share Purchase Price multiplied by the
number of Option Shares on the basis of 100% vesting. Under the terms of
the Employee Stock Purchase Plan, RHC is required to refund the original
purchase price ($11.25 per Share in the case of Purchase Plan Shares issued
in 1996) to an employee who so requests. RHC intends to offer a small
number of Purchase Plan Shares at 85% of fair market value to Riviera
employees who were not eligible in 1996. Purchase Plan Shares will be
treated similarly to all other outstanding shares except, for
administrative convenience, Purchase Plan Shares will be cashed out on the
Closing Date by RHC netting the spread between the Purchase Plan Share
Purchase Price against the Merger Per Share Purchase Price after deduction
of any loan balance of an employee.
(d) If there is a closing under a Development and Operating
Agreement between Eagle Gaming, L.P. ("Eagle") and RHC's indirectly held
subsidiary, Riviera Gaming Management of Colorado, Inc. ("RGMC"), whereby
Riviera Blackhawk, LLC ("RBL) is established, (i) RHC will be obligated to
issue to Ladenburg, Thalman & Co. five-year warrants to purchase 100,000
shares of RHC's common stock at a price equal to 120% of the closing market
price of RHC's common stock on the American Stock Exchange on the date of
such closing and (ii) RHC may be required to issue Shares to Eagle upon
exercise by Eagle of a "Put" if RHC indirectly owns 100% of RBL or after
giving effect to such Put. RHC and Newco will seek to mutually agree upon
cash payments in lieu of such warrants and RHC Shares issuable upon
exercise of such Put.
5. Issuance of Additional Common Stock or Stock Options; No
Distributions. Except as specified in Paragraph 4 above, prior to the
Closing Date or earlier termination of the Merger Agreement, RHC will not
issue or repurchase (or enter into any commitment to do so) any additional
Shares, options or warrants or other instruments representing an equity
interest in RHC, and RHC will not make any distributions of any kind to its
shareholders.
6. Escrow; Liquidated Damages; Funds at Closing.
(a) Upon the execution of the Merger Agreement, Newco will
deposit in cash or letters of credit containing terms acceptable to RHC in
escrow (the "Escrow") $14,745,000 ($3 per share x 4,915,000 shares
outstanding) plus (i) an amount equal to 7% per annum on $73,725,000 from
June 1, 1997 to such execution date, and (ii) $426,605 (.0058 x
$73,725,000) on each monthly anniversary of such execution date until the
Closing Date or the date the Merger Agreement is terminated; provided there
shall be deducted from the foregoing (i) any amount set aside by Newco or
Mr. Allen E. Paulson pursuant to any separate agreement (the "Separate
Agreements") with Morgens, Waterfall; Sun Life or Keyport Life (the "Major
RHC Shareholders") with respect to their share interests in RHC and (ii)
amounts required to be deposited with respect to the Shares beneficially
owned by Newco or Mr. Paulson (collectively, "Paulson Ownership").
(b) The shareholders of RHC (excluding the Paulson
Ownership) shall be entitled to receive the Escrow pro-rata, if Newco shall
fail to close and pay by April 1, 1998 for any reason other than:
(i) a breach by RHC of its representations and
warranties or obligations under the Merger
Agreement,
(ii) the transaction is enjoined pursuant to a final
non-appealable order (provided RHC, Newco and
their affiliates shall have used their best
efforts to have such injunction lifted),
(iii) assuming the accuracy of the following
representation and performance by Mr. Paulson of
the following agreement, Newco/Mr. Paulson
have not obtained all necessary Approvals:
(A) Mr. Paulson represents that he has
discussed in detail with his Nevada gaming
counsel his background and knows of no reason why
he should not be able to obtain all necessary
Approvals prior to April 1, 1998, and (B) Mr.
Paulson agrees that he will pursue vigorously
and will give complete and prompt attention
to requests of Nevada regulatory authorities
for information and will do nothing which
might delay receipt of all necessary Approvals
(iv) In addition, the parties will seek to mutually
agree as to the effect on the Escrow of the
death or disability of Mr. Paulson prior to the
Closing Date.
(c) At the Closing Date the Escrow will be released to
Newco, and Newco must have, in cash, an amount equal to the aggregate Per
Share Purchase Price, multiplied by the number of outstanding RHC Shares,
minus (i) the Escrow and (ii) the amounts held pursuant to the Separate
Agreements and the Paulson Ownership. In addition on the Closing Date RHC
will pay approximately $12 million in cash as previously identified to you
and Newco shall have irrevocable commitments sufficient to cover Puts by
the holders of all $100 million of RHC's 11% Mortgage Notes by reason of
the change in control contemplated by the Merger or have made other
arrangements satisfactory to RHC.
7. RHC Operations. RHC has furnished Newco with its
confidential monthly projections of RHC's consolidated results of
operations for the twelve months ended March 31, 1998. Newco will have the
right to terminate the Merger Agreement if RHC's actual consolidated
results of operations through the Closing Date constitute a "Material"
adverse change compared to the Projected Results for the same period. For
purposes of the foregoing, "Material" shall mean a decline in EBITDA of
7.5% or more.
8. Indemnification. Newco will be given an opportunity to
conduct such due diligence with respect to RHC as Newco reasonably deems
appropriate and may condition its obligation to close under the Merger
Agreement upon any material breach by RHC of its representations or
agreements under the Merger Agreement, provided, however, that upon
consummation of the Merger, (i) none of the directors, officers, employees
or shareholders of RHC ("Indemnitees") will be liable to Newco (or anyone
claiming rights through Newco) for breach of such representations and
agreements and (ii) Newco will hold the Indemnitees harmless against any
loss, liability, cost or expense including counsel fees which arises out of
the operation of RHC or any of its subsidiaries through the Closing or by
reason of the Merger.
9. Cooperation. RHC and Newco will cooperate on the
following matters:
(a) The calling of a Special Meeting of RHC shareholders to
approve the Merger, together with the preparation of a proxy statement with
respect thereto to be furnished to the shareholders of RHC; provided,
however, that it shall be a condition to the Merger that the holders of at
least 70% of the RHC Shares entitled to vote on the Merger shall have
approved the Merger.
(b) Engagement by RHC of an investment banker to give a
fairness opinion as to the Merger;
(c) The preparation and filing of a notification and report
form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976;
(d) The obtaining of all necessary Approvals;
(e) The continued employment of key management personnel of
RHC; and
(f) All other matters contemplated by the transaction,
including the refinancing of the 11% Mortgage Notes.
10. No Shop; RHC Board Fiduciary Duty; First Refusal;
Break-Up Fee.
(a) Upon the execution of the Merger Agreement following
approval by RHC's Board, RHC will not actively seek to enter into a merger
or similar transaction ("Alternative Transaction") with a third party,
subject, however, to the fiduciary duty of RHC's board to entertain an
Alternative Transaction, if the same will provide RHC's shareholders with a
per share purchase price which is higher (the amount of such excess in the
per share purchase price being referred to as the "Spread") than the Per
Share Purchase Price.
(b) Newco shall have the right (the "First Refusal Right")
for 30 days after receipt of notice of an Alternative Transaction and by
written notice to RHC's Board to increase the Per Share Purchase Price in
the amount of the Spread. The First Refusal Right shall expire on the
earliest to occur of (i) termination of the Merger Agreement or (ii) April
1, 1998 (unless otherwise extended under the terms of the Merger
Agreement).
(c) If Newco shall fail to exercise its First Refusal Right
(i) at the Closing of an Alternative Transaction, RHC will pay Newco and/or
Mr. Paulson an aggregate amount equal to 3% of the purchase price for the
equity of RHC which is paid in the Alternative Transaction and (ii) upon
the execution by RHC of definitive agreements with respect to an
Alternative Transaction or the approval or recommendation of an Alternative
Transaction by RHC's Board of Directors, directly or indirectly, RHC will
reimburse Newco and Mr. Paulson for the documented out-of-pocket expenses
in connection with the transaction contemplated by this letter of intent
and the Merger, which shall have been incurred from April 15, 1997.
11. Publicity. Neither RHC nor Newco will make any public
announcement about the Merger or related matters without the prior
approval of the other party, subject, however, to RHC's obligation as a
public company to make public disclosure of certain matters. In such event,
Newco's counsel will be given prior notice and the ability to comment on
RHC's announcement, to the extent practicable.
12. Confidentiality. Newco and its authorized
representatives shall keep all information supplied or made available to
Newco in confidence and shall not disclose the same to any party other than
its employees and advisors on a need to know basis and only for purposes of
evaluating the transaction described in this letter. Newco will not use
such information except for evaluating such transaction. If the Merger is
not consummated, Newco shall return to RHC any information provided to
Newco.
13. Expenses. Each of the parties will bear its own expenses
except as otherwise provided in Paragraph 10(c) above.
14. No Obligation. Except as specified in Paragraphs 11, 12
and 13 above, this letter of intent is not meant to be binding upon the
parties hereto. Neither RHC nor Newco will be under any obligation to the
other for whatever reason, including any fact or circumstance which may
have been or may be made or become available to Newco or Paulson with
respect to RHC or any other fact or circumstance, unless and until the
Merger Agreement is executed and delivered by the parties thereto. Any
transaction would be subject to, among other things, completion of due
diligence satisfactory to Newco, negotiation and execution of the Merger
Agreement, shareholder approval and receipt of all other material consents,
including an option and voting agreement from the Major RHC Shareholders.
If the foregoing is in accordance with your understanding,
please sign and return the enclosed copy prior to the close of business on
May 15, 1997.
Very truly yours,
NEWCO RIVIERA HOLDINGS CORPORATION
By: /s/ Allen E. Paulson /s/ William L. Westerman
Allen E. Paulson William L. Westerman,
Chairman and Chief
Executive Officer
