<PAGE>
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
LANDRY'S SEAFOOD RESTAURANTS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
STEVEN L. SCHEINTHAL, ESQ.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[_] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[_] $500 per each party to the controversy pursuant to Exchange Act
Rule 141-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11: *
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
* Set forth the amount on which the filing fee is calculated and state how it
was determined.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LANDRY'S LOGO]
April 30, 1998
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
which will be held on June 11, 1998, at 11:00 a.m., local time, at the
Doubletree Hotel - Post Oak, 2001 Post Oak Boulevard, Houston, Texas.
The enclosed notice and proxy statement contain details concerning the
business to come before the meeting. You will note that the Board of Directors
of the Company recommends a vote "FOR" the election of six Directors to serve
terms of offices expiring at the 1999 Annual Meeting of Stockholders, and "FOR"
a proposal to amend the Company's 1995 Flexible Incentive Plan. Please sign and
return your proxy card in the enclosed envelope at your earliest convenience to
assure that your shares will be represented and voted at the meeting even if you
cannot attend.
The Board of Directors and Management look forward to seeing you at the
Annual Meeting.
Very truly yours,
/s/ Tilman J. Fertitta
--------------------------------------
Tilman J. Fertitta
Chairman of the Board,
President and Chief Executive Officer
[RESTAURANT LOGOS APPEARS HERE]
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
1400 POST OAK BLVD., SUITE 1010
HOUSTON, TEXAS 77056
___________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 11, 1998
___________________
Notice is hereby given that the Annual Meeting of Stockholders of Landry's
Seafood Restaurants, Inc. (the "Company") will be held at the Doubletree Hotel -
Post Oak, 2001 Post Oak Boulevard, Houston, Texas, on June 11, 1998 at 11:00
a.m., local time, for the following purposes:
1. To elect six directors to serve a term of office expiring at the 1999
Annual Meeting of Stockholders and until their successors shall have
been duly elected and qualified;
2. To consider and act upon a proposal to amend the Company's 1995
Flexible Incentive Plan (the "Flex Plan") which will authorize the
possible issuance of an additional 1,000,000 shares of Common Stock to
certain employees and non-employee directors; and
3. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on April 28, 1998,
as the record date (the "Record Date") for the determination of stockholders
entitled to notice of and to vote at such meeting or any adjournment(s) thereof.
Only stockholders of record at the close of business on the Record Date are
entitled to notice of and to vote at the Annual Meeting. The stock transfer
books will not be closed. A list of stockholders entitled to vote at the Annual
Meeting will be available for examination during regular business hours at the
corporate office of the Company at 1400 Post Oak Blvd., Suite 1010, Houston,
Texas 77056, for 10 days prior to the Annual Meeting.
You are cordially invited to attend the meeting. WHETHER OR NOT YOU EXPECT
TO ATTEND THE MEETING IN PERSON, HOWEVER, YOU ARE URGED TO MARK, SIGN, DATE, AND
MAIL THE ENCLOSED FORM OF PROXY PROMPTLY SO THAT YOUR SHARES OF STOCK MAY BE
REPRESENTED AND VOTED IN ACCORDANCE WITH YOUR WISHES, EVEN IF YOU CANNOT ATTEND,
AND IN ORDER THAT THE PRESENCE OF A QUORUM MAY BE ASSURED AT THE MEETING. IN
THE EVENT A STOCKHOLDER DECIDES TO ATTEND THE MEETING, HE OR SHE MAY, IF SO
DESIRED, REVOKE THE PROXY AND VOTE THE SHARES IN PERSON.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Steven L. Scheinthal
--------------------------------------
Steven L. Scheinthal, Secretary
DATED: April 30, 1998
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
1400 POST OAK BLVD., SUITE 1010
HOUSTON, TEXAS 77056
___________________
PROXY STATEMENT
___________________
This Proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of the Company for use at the Annual
Meeting of Stockholders (the "Meeting") of Landry's Seafood Restaurants, Inc., a
Delaware corporation (the "Company"), to be held on June 11, 1998, at 11:00
a.m., local time, at the Doubletree Hotel - Post Oak, 2001 Post Oak Boulevard,
Houston, Texas, and any adjournment or adjournments thereof. The Notice of
Annual Meeting, this statement and the accompanying proxy, together with the
Company's Annual Report to Stockholders for the year ended December 31, 1997,
are first being sent to stockholders on or about April 30, 1998.
The close of business on April 28, 1998, has been fixed as the Record Date
for the determination of stockholders entitled to notice of and to vote at the
Meeting. On that date, the Company had outstanding 30,339,182 shares of
Common Stock, $.01 par value ("Common Stock"), each of which will be entitled to
one vote.
The cost of soliciting proxies will be borne by the Company. Copies of
solicitation material may be furnished to brokers, custodians, nominees and
other fiduciaries for forwarding to beneficial owners of Common Stock, and
normal handling charges may be paid for such forwarding service. Solicitation
of proxies may be made by mail, personal interview, telephone and facsimile by
officers and other management employees of the Company, who will receive no
additional compensation for their services.
A majority of the outstanding shares of Common Stock, represented in person
or by proxy will constitute a quorum at the Meeting. The election of directors
will be determined by a plurality of the votes cast if a quorum is present and
voting. The amendment to the Flex Plan must be approved by a majority of the
shares present and voting at the Meeting. The Board of Directors does not
anticipate calling for a vote on any matter other than those described above.
Abstentions and broker non-votes are each included in the determination of
the number of shares present and voting for purposes of determining the presence
of a quorum. Each is tabulated separately. A proxy submitted by a stockholder
may indicate that all or a portion of the shares represented by such proxy are
not being voted by such stockholder with respect to a particular matter. This
may occur, for example, when a broker is not permitted to vote stock held in
street name on certain matters in the absence of instructions from the
beneficial owner of the stock. The shares subject to any such proxy which are
not being voted with respect to a particular matter (the "Non-Voted Shares")
will be treated as shares not present and entitled to vote on such matter,
although such shares may be considered present and entitled to vote for other
purposes and will count for purposes of determining the presence of a quorum.
Shares voted to abstain as to a particular matter will not be considered Non-
Voted Shares. Thus, since the election of directors requires a plurality of the
shares of Common Stock present in person or by proxy at the Meeting and entitled
to vote on such matter, Non-Voted Shares and abstentions will not affect the
outcome of the election of directors. Approval of a majority of all votes cast
on the amendment to the Flex Plan is required to adopt the amendment to the Flex
Plan. Thus, Non-Voted Shares will have no effect on the proposal, but
abstentions will have the same effect as a vote AGAINST the amendment to the
Flex Plan.
<PAGE>
PROPOSAL I - ELECTION OF DIRECTORS
The number of directors has been fixed by the Board of Directors at
six, pursuant to the By-laws of the Company. The Board of Directors currently
consists of six members each of which is standing for re-election. At the
meeting, the Common Stock represented by proxies, unless otherwise specified,
will be voted for the election of the six nominees hereinafter named. Each
nominee will serve until the 1999 Annual Meeting of the Company's stockholders
or until their respective successors are duly elected and qualified. A
plurality of shares present at the Meeting cast in favor of a nominee is
required for the election of each of the nominees listed below.
Although the Board of Directors does not contemplate that any of the
nominees will be unable to serve, if such a situation arises prior to the
Meeting, the persons named in the enclosed form of Proxy will vote in accordance
with their best judgment for a substitute nominee.
The following information is set forth with respect to the persons
nominated for election as a director.
NOMINEES FOR ELECTION AT THE ANNUAL MEETING
<TABLE>
<CAPTION>
DIRECTOR TERM
NAME AGE SINCE EXPIRES
- ----------------------------- --- -------- -------
CURRENT MEMBER
- -----------------------------
<S> <C> <C> <C>
Tilman J. Fertitta/(1)(3)/... 40 1993 1998
E.A. "Al" Jaksa, Jr./(3)/.... 50 1993 1998
Steven L. Scheinthal/(3)/.... 36 1993 1998
Paul S. West/(3)/............ 39 1994 1998
James E. Masucci/(1)(2)(4)/.. 65 1993 1998
Joe Max Taylor/(1)(2)(4)/.... 65 1993 1998
</TABLE>
_________________
/(1)/ Member of Audit Committee/
/(2)/ Member of Compensation Committee
/(3)/ Member of Executive Committee/
/(4)/ Member of Stock Option Committee
MR. FERTITTA has served as President and Chief Executive Officer of the
Company since 1987. In 1988, he became the controlling stockholder and assumed
full responsibility for all of the Company's operations. Prior to serving as
President and Chief Executive Officer of the Company, Mr. Fertitta devoted his
full time to the control and operation of a hospitality and development company.
Mr. Fertitta is an advisory director of the Houston Rockets National Basketball
Association team and serves on the boards of the Houston Livestock Show and
Rodeo, Space Center Houston, the Children's Museum of Houston, The Greater
Houston Convention and Visitor's Bureau, the Crohn's and Colitis Foundation, the
Better Business Bureau of Houston, and the Childress Foundation.
MR. JAKSA has served as the Executive Vice President and Chief Operating
Officer of the Company since 1988. His primary responsibilities are new site
selection, lease negotiations, and restaurant construction and development.
Before joining the Company, Mr. Jaksa served as President of Richmark
2
<PAGE>
Bancshares in Houston, Texas for five years. Mr. Jaksa is a licensed real
estate broker in Texas and has owned and operated his own real estate firm and
construction company.
MR. SCHEINTHAL has served as Vice President of Administration, General
Counsel and Secretary to the Company since September 1992. He devotes a
substantial amount of time to lease and contract negotiations and is primarily
responsible for the Company's compliance with all federal, state and local
ordinances. Prior to joining the Company, he was a partner in the law firm of
Stumpf & Falgout in Houston, Texas. Mr. Scheinthal represented the Company for
approximately five years before joining the Company. He has been licensed to
practice law in the state of Texas since 1984.
MR. WEST has served as Vice President of Finance and Chief Financial
Officer of the Company since June 1993. Prior to joining the Company, Mr. West
was a senior manager at Deloitte & Touche and a leader of their
Restaurant/Entertainment Advisors Group in Dallas, Texas. He was responsible
for numerous restaurant audits and performed the annual restaurant industry
operations survey and study on behalf of the National Restaurant Association and
many state restaurant associations. Mr. West had been engaged in public
accounting and auditing since 1981, and has been a certified public accountant
since 1983.
MR. MASUCCI is self-employed as an advertising consultant. From 1956 until
June 1996 he was employed by Capital Cities/ABC ("ABC"). His last position with
ABC was as President and General Manager of KTRK-TV, an owned station of ABC in
Houston, Texas, a position he held from August 1990 to June 1996. Prior to
serving as President, Mr. Masucci served in various executive positions with
KTRK-TV and has served as Division Vice President and Vice President of the
Broadcast Division of ABC.
MR. TAYLOR is a director and member of the Executive Committee of American
National Insurance Company, a publicly traded insurance company. He also serves
on the Board and Audit Committee of the Transitional Learning Center of
Galveston and is President and a member of the Executive Committee of Moody
Gardens, Inc., which operates a public resort and entertainment facility in
Galveston, Texas. Mr. Taylor is also the chief law enforcement administrator
for Galveston County, Texas and serves on the Galveston County Pre-Trial Board
as well as the Board of Directors of Harbourview Care Center.
There were four meetings of the Board of Directors held during the 12
months ended December 31, 1997. All of the Board members attended 75% or more
of the meetings of the Board and committees of the Board on which they were
members.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE "FOR" EACH NOMINEE
FOR THE BOARD OF DIRECTORS.
3
<PAGE>
EXECUTIVE OFFICERS
In addition to Messrs. Fertitta, Jaksa, Scheinthal and West, for which
information is provided above, the following persons are executive officers of
the Company:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------ --- ---------------------------------------
<S> <C> <C>
Richard E. Ervin.. 42 Vice President of Restaurant Operations
Sarah A. Veach.... 38 Controller of Restaurant Operations
</TABLE>
Mr. Ervin has served as Vice President of Restaurant Operations since 1991.
Prior to that time, he was the Vice-President of Internal Controls and Director
of Beverage Operations. He has 15 years of experience in high volume, multi-unit
food and beverage operations. His experience includes new restaurant development
and employee training programs.
Ms. Veach has served as Controller of Restaurant Operations since January
1990. Prior to joining the Company in 1989 as an accountant, she worked as
controller for American General Investment Corp. and as a tax associate for the
accounting firm of Coopers & Lybrand L.L.P.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has an Executive Committee, an Audit Committee, a Compensation
Committee, and a Stock Option Committee. The Executive Committee has and may
exercise all of the authority of the Board of Directors with respect to the
management of the Company's business, except with respect to certain specified
matters that by law, the Certificate of Incorporation or By-laws must be
approved by the entire Board of Directors. The Executive Committee met five
times during 1997. All actions taken by the Executive Committee were ratified
unanimously by the full Board of Directors. The Audit Committee is responsible
for (i) reviewing the scope of, and the fees for, the annual audit, (ii)
reviewing with the independent accountants the corporate accounting practices
and policies and recommending to whom reports should be submitted within the
Company, (iii) reviewing with the independent accountants their final report,
(iv) meeting with internal and independent accountants during the year for
consultation purposes, and (v) being available to the independent accountants
during the year for consultation purposes. The Audit Committee met on one
occasion in 1997. The Compensation Committee determines the compensation of the
officers of the Company and performs other similar functions. The Compensation
Committee met on one occasion in 1997. The Stock Option Committee grants
options under the Company's Stock Option Plans and also determines whether
additional options should be granted to deserving key employees. The Stock
Option Committee met on one occasion in 1997. The Company does not have a
nominating committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is or has been an officer or
employee of the Company or any of its subsidiaries or had any relationship
requiring disclosure pursuant to Item 404 of the SEC Regulation S-K. No
executive officer of the Company served as a member of the compensation
committee (or other board committee performing similar functions or, in the
absence of any such committee, the entire Board of Directors) of another
corporation, one of whose executive officers served
4
<PAGE>
on the Compensation Committee. No executive officer of the Company served as a
director of another corporation, one of whose executive officers served on the
Compensation Committee. No executive officer of the Company served as a member
of the Compensation Committee (or other board committee performing equivalent
functions or, in the absence of any such committee, the entire Board of
Directors) of another corporation, one of whose executive officers served as a
director of the Company.
COMPENSATION OF DIRECTORS
Directors of the Company who are not executive officers receive Director's
fees of $18,000 per year, plus the expenses incurred by them on behalf of the
Company. Non-employee Directors also receive $1,000 for each Audit, Compensation
and Stock Option Committee meeting they attend. Each current non-employee
director has received stock options to acquire shares of Common Stock under the
Company's currently existing Non-Qualified Formula Stock Option Plan for Non-
Employee Directors (the "Non-Employee Director's Plan"). The Non-Employee
Director's Plan provides for the granting of nonqualified stock options to non-
employee directors of the Company. Pursuant to the Non-Employee Director's Plan,
80,000 shares of Common Stock are reserved for issuance to eligible non-employee
directors of the Company or its subsidiaries. The Non-Employee Director's Plan
is administered by the President of the Company and requires that the purchase
price under each option must not be less than 100% of the fair market value (as
defined in the Non-Employee Director's Plan) of the Common Stock at the time of
the grant of the option. Full payment for shares purchased upon exercise of an
option must be made at the time of exercise and no shares may be issued until
full payment is made. Options granted pursuant to the Non-Employee Director's
Plan generally vest in five installments beginning no earlier than the first
anniversary of the date of grant, and the options expire ten years from the
grant date. The Non-Employee Director's Plan provides that an option agreement
may include a provision for permitting an optionee the right to deliver
previously owned shares of Common Stock in partial or full payment for shares to
be purchased upon exercise of an option. In 1995, the Director's Plan was
amended to provide that each non-employee director who received a grant of an
option on the date such person was elected a director would receive an
additional option in the amount of 2,000 shares each time such person was re-
elected for an additional term as a director. Pursuant to the Non-Employee
Director's Plan, each current non-employee director initially received an option
to purchase 10,000 shares of Common Stock at $6 per share and received an option
to purchase 2,000 shares at $19.13 per share upon their re-election in 1995 and
an option to purchase 2,000 shares at $24.63 per share upon their re-election in
1996 and an option to purchase 2,000 shares at $18.75 upon their re-election in
1997.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and holders of more than 10% of the
Common Stock to file with the Securities and Exchange Commission initial reports
of ownership and reports of changes in ownership of Common Stock. The Company
believes, based solely on a review of the copies of such reports furnished to
the Company and written representations, that no other reports were required and
that during the preceding fiscal year all of the Company's directors, officers
and holders of more than 10% of its Common Stock complied with all Section 16(a)
filing requirements.
5
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The following table sets forth, as of the Record Date certain
information regarding the beneficial ownership of the Company's Common Stock by
(a) each person known to the Company to own beneficially more than five percent
of the outstanding shares of the Company's Common Stock, (b) each director of
the Company, (c) each executive officer named in the Summary Compensation Table
below, and (d) all executive officers and directors of the Company as a group.
Unless otherwise indicated, each of the stockholders has sole voting and
investment power with respect to the shares beneficially owned. The address of
each of Messrs. Fertitta, Jaksa, Scheinthal, West, Ervin, Masucci and Taylor is
1400 Post Oak Blvd., Suite 1010, Houston, Texas 77056.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
--------------------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT
- -------------------------------------------- ------------- -----------
<S> <C> <C>
Tilman J. Fertitta/(1)/..................... 3,290,000 10.6%
E. A. Jaksa, Jr./(1)/....................... 50,167 *
Steven L. Scheinthal/(1)/................... 20,667 *
Paul S. West/(1)/........................... 16,000 *
James E. Masucci/(1)/....................... 9,800 *
Joe Max Taylor.............................. 3,800 *
Richard E. Ervin/(1)/....................... 7,334 *
Putnam Investments, Inc./(2)/............... 3,693,549 12.2%
FMR Corp./(3)/.............................. 3,661,900 12.1%
All officers and directors as a group/(1)/
(8 persons including those persons named
above)..................................... 3,401,768 11.0%
</TABLE>
- -------------
* Less than 1%.
/(1)/ Includes 700,000, 167, 167, 4,000, 9,800, 3,900 and 7,334 shares subject
to options respectively for the persons named in the above table and
727,268 for all officers and directors as a group which are, or become,
exercisable within 60 days of the Record Date.
/(2)/ The Company has been informed by Putnam Investments, Inc. ("Putnam") that
certain Putnam investment managers are considered "beneficial owners" in
the aggregate of 3,693,549 shares, or 12.2%, of the Company's Common
Stock. Such shares were acquired for investment purposes by such
investment managers for certain of their advisory clients. The information
set forth in this table has been provided to the Company by Putnam as
reported on its Schedule 13G filed with the SEC. Putnam's address is One
Post Office Square, 10th Floor, Boston, Massachusetts 02109.
/(3)/ Based on a Schedule 13G filed in March 1998, FMR Corp. ("FMR") is
considered beneficial owner in the aggregate of the shares listed in the
table or 12.1% of the Company's Common Stock, although no Common Stock is
held directly by FMR. FMR's address is 82 Devonshire Street, Boston,
Massachusetts 02109.
6
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth in summary, compensation paid by the Company
and its subsidiaries for the year ended December 31, 1997 to executive officers
of the Company whose cash compensation exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
------------------------ ---------------------
Securities Underlying
Salary Bonus Options/SARs
Name and Principal Position/(1)/ Year ($) ($)/(2)/ (#)/(5)/
- ---------------------------------- ---- ------- -------- ----------------------
<S> <C> <C> <C> <C>
Tilman J. Fertitta................ 1997 525,000 325,000 750,000/(4)/
President and Chief 1996 465,000 200,000 150,000
Executive Officer 1995 461,540 -0- 600,000/(4)/
E. A. "Al" Jaksa, Jr.............. 1997 200,000 125,000 75,000
Executive Vice President 1996 225,000 125,000 100,000
and Chief Operating Officer 1995 169,231 -0- 120,000
Steven L. Scheinthal.............. 1997 165,000 125,000 75,000
Vice President, Secretary 1996 129,000 100,000 100,000
and General Counsel 1995 126,693 -0- 60,000
Paul S. West...................... 1997 160,000 125,000 75,000
Vice President of Finance and 1996 120,000 10,000 100,000
Chief Financial Officer 1995 117,694 -0- 60,000
Richard E. Ervin.................. 1997 105,000 75,000 50,000
Vice President of Restaurant 1996 90,000 50,000 50,000
Operations 1995 92,493 25,000 30,000
</TABLE>
- ---------------------
/(1)/ These executive officers receive personal benefits in addition to salary.
However, the Company has concluded that the aggregate amount of such
personal benefits do not exceed the lesser of $50,000 or 10% of annual
salary and bonus reported for each such executive.
/(2)/ Bonuses were paid in the year after date indicated in table to reflect
accomplishments in the year indicated.
/(3)/ Reflects a 2-for-1 stock split in the form of a dividend in June 1995.
/(4)/ Includes 600,000 options which were originally granted in 1995 and
repriced in 1997.
7
<PAGE>
The following table provides details regarding stock options granted in
1997 to executive officers named in the Summary Compensation Table. In
addition, in accordance with SEC rules, the hypothetical gains are shown that
would exist for the respective options based on assumed rates of annual
compounded growth in the stock price of 5% and 10% from the date the options
were granted over the full option term. The actual value, if any, an executive
may realize will depend on the spread between the market price and the exercise
price on the date the options are exercised.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
Individual Grants
------------------------------------------- Potential Realizable
No. of Value at Assumed
Securities % of Total Annual Rates of Stock
Underlying Options Price Appreciation for
Options Granted to Exercise Expira- Option Term /(2)/
Granted Employees Price tion -----------------------
Name/(1)/ in 1997 in 1997 ($/Sh) Date 5% ($) 10% ($)
- ----------------------- ---------- ---------- -------- ------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Tilman J. Fertitta..... 150,000 9.1% 12.875 7/18/07 1,214,250 3,077,250
E. A. "Al" Jaksa, Jr... 75,000 4.6% 12.875 7/18/07 607,125 1,538,625
Steven L. Scheinthal... 75,000 4.6% 12.875 7/18/07 607,125 1,538,624
Paul S. West........... 75,000 4.6% 12.875 7/18/07 607,125 1,538,625
Richard E. Ervin....... 50,000 3.0% 12.875 7/18/07 404,750 1,025,750
</TABLE>
- ----------------
/(1)/ Stock options issued in 1997 to executive officers were issued under the
1995 Flexible Incentive Plan.
/(2)/ Potential gains are net of exercise price, but before taxes associated
with exercise. These amounts represent certain assumed rates of
appreciation only, based on the SEC's rules and are not intended to
forecast future price appreciation of the Common Stock of the Company. The
gains reflect a future value based upon growth at these prescribed rates.
The Company is not aware of any formula which will determine with
reasonable accuracy a present value based on future unknown or volatile
factors. Actual gains, if any, on the exercise of stock options are
dependent on the future performance of the Common Stock, overall market
conditions, and the option holders' continued employment through the
vesting period. The amounts reflected in this table may not necessarily be
achieved. Amounts shown under the "Potential Realizable Value" columns
have been calculated by multiplying the exercise price by the annual
appreciation rate shown (compounded for the term of the options),
subtracting the exercise price per share and multiplying the gain per
share by the number of shares covered by the options.
8
<PAGE>
The following table shows the number of shares covered by both exercisable
and unexercisable stock options held by executive officers named in the Summary
Compensation Table at December 31, 1997. Also reported are the value for the
"in-the-money" options which represent the positive spread between the exercise
price of any such existing stock option and the price of the Common Stock as of
December 31, 1997.
AGGREGATED OPTIONS/SAR EXERCISED IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
Value of Unexercised
Number of Unexercised In-The-Money Options
Shares Value Options at End of 1997 at End of 1997/(1)/
Acquired Realized -------------------------- --------------------------
Name on Exercise ($) Exercisable Unexercisable Exercisable Unexercisable
- ---------------------- ----------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Tilman J. Fertitta.... -0- N/A 450,000 450,000 $4,950,000 $4,893,750
E.A. "Al" Jaksa, Jr... 140,000 1,855,000 33,334 256,666 $ 333,340 $2,836,035
Steven L. Scheinthal.. 80,250 1,108,312 19,334 192,916 $ 193,340 $2,178,535
Paul S. West.......... 55,250 876,272 -0- 205,250 $ -0- $2,248,875
Richard E. Ervin...... 30,000 411,750 16,667 113,333 $ 166,670 $1,338,580
</TABLE>
- ---------------
/(1)/ The values were determined on the basis of the closing Common Stock price
of $24.00 on December 31, 1997, and equals the aggregate amount by which
the market value of the option shares exceeded the exercise price of
outstanding options.
The following table sets forth certain information concerning the repricing
of options during the year ended December 31, 1997.
<TABLE>
<CAPTION>
Length of
Original
Number of Market Option
Securities Price of Exercise Term
Underlying Stock at Price At New Remaining
Options Time of Time of Exercise At Date
Name Date Repriced Repricing Repricing Price Of Repricing
- --------------------- -------- ---------- --------- --------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Tilman J. Fertitta...
President and Chief Expires
Executive Officer 04/18/97 600,000 $12.875 $16.75 $12.875 04/27/2005
</TABLE>
9
<PAGE>
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
In August 1993, the Board of Directors established a Compensation Committee
to review and approve the compensation levels of members of management, evaluate
the performance of management, consider management succession and consider any
related matters for the Company. The Committee is charged with reviewing with
the Board of Directors in detail all aspects of compensation for the executive
officers of the Company.
The philosophy of the Company's compensation program is to employ, retain
and reward executives capable of leading the Company in achieving its business
objectives. These objectives include creating and preserving strong financial
performance, increasing the assets of the Company, positioning the Company's
assets and business operations in geographic markets and industry segments
offering long-term growth opportunities, enhancing stockholder value, and
ensuring the survival of the Company. The accomplishment of these objectives is
measured against conditions prevalent in the industry within which the Company
operates. In recent years these conditions reflect a highly competitive market
environment and rapidly changing regional geographic and overall industry market
conditions.
The available forms of executive compensation include base salary, cash
bonus awards and stock options. Performance of the Company is a key
consideration. The Company's compensation policy recognizes, however, that
stock price performance is only one measure of performance and, given industry
business conditions and the long term strategic direction and goals of the
Company, it may not necessarily be the best current measure of executive
performance. Therefore, the Company's compensation policy also gives
consideration to the Company's achievement of specified business objectives when
determining executive officer compensation. An additional objective of the
Compensation Committee has been to reward executive officers with equity
compensation in addition to salary in keeping with the Company's overall
compensation philosophy, which attempts to place equity in the hands of its
employees in an effort to further instill stockholder considerations and values
in the actions of all the employees and executive officers.
Compensation paid to executive officers is based upon a Company-wide salary
structure consistent for each position relative to its authority and
responsibility compared to industry peers. Stock option awards in fiscal 1997
were used to reward and retain executive officers through the potential of
capital gains and equity buildup in the Company. The number of stock options
granted is determined by the subjective evaluation of the executive's ability to
influence the Company's long term growth and profitability. The Board of
Directors believes the award of options represents an effective incentive to
create value for the stockholders.
The Compensation Committee considered a number of factors in approving the
CEO's compensation for 1997. In addition to stock price performance, the
factors considered by the Compensation Committee included an evaluation of CEO
compensation levels for other comparable companies in the industry, the
achievement of specified business objectives during the prior fiscal year,
including increasing the number of Company restaurants, improving revenues,
income and operating cash flow, and that he capably managed the Company's growth
as a publicly held company, while at the same time completed a major acquisition
which significantly increased the Company's restaurants, opened up in new
markets and added a new concept for seafood restaurants. Based on these
considerations, a fiscal 1997 base salary level of $525,000 and a bonus of
$325,000 were judged by the Compensation Committee to be fair and appropriate
for the most senior executive officer of the Company taking into account the
level of salary compensation paid to other officers of the Company and in
comparison to the CEO's industry peers. The Compensation Committee further felt
that it was more beneficial to the Company's stockholders to reprice a portion
of the CEO's outstanding options than to grant him
10
<PAGE>
significantly more options in 1997. Therefore, in April 1997 a portion of such
outstanding options were repriced. The Compensation Committee acknowledges and
adopts the "Ten-Year Option Repricing" Table as reflecting its decisions.
During fiscal 1997, the Company's revenues and operating cash flows increased
significantly. In addition, the Company's stock price increased from the
initial public offering price of $6 per share in August 1993 to $24.00 per
share as of December 31, 1997, an increase of 300%.
COMPENSATION COMMITTEE
James E. Masucci
Joe Max Taylor
EMPLOYMENT AGREEMENT
The Company and Tilman J. Fertitta are parties to an Employment Agreement
(the "Employment Agreement") pursuant to which Mr. Fertitta has agreed to serve
as President and Chief Executive Officer of the Company to December 31, 1999,
and is subject to automatic three-year extensions. The Employment Agreement
provides that Mr. Fertitta will devote substantially all of his time and
attention to the business and affairs of the Company and will receive, among
other things, an annual base salary in the amount of, no less than $525,000,
annual cash bonuses in amounts determined by the Board of Directors, and the
inclusion of Mr. Fertitta in all plans and programs of the Company made
available to the Company's executives and other salaried employees generally,
including group life insurance, accidental death and dismemberment insurance,
hospitalization, long-term disability, vacations and holidays. Mr. Fertitta
will also be entitled to life insurance and certain other benefits and
perquisites in addition to those made available to the Company's management
generally, including use of a Company automobile and other travel facilities,
and certain club memberships.
In the event Mr. Fertitta's employment is terminated as a result of
his death or disability (as defined in the Employment Agreement), he, or his
legal representative, will receive, among other payments, all amounts owed under
his Employment Agreement as of the date of his death or disability. In the
event Mr. Fertitta's employment is terminated (i) by him other than for Good
Reason (as defined in the Employment Agreement) or (ii) by the Company for Cause
(as defined in the Employment Agreement), Mr. Fertitta will receive all amounts
owed to him under his Employment Agreement as of the date of termination. In
the event Mr. Fertitta's employment is terminated (i) by the Company other than
for Cause or (ii) by Mr. Fertitta for Good Reason (including the Company's
failure to perform certain material obligations under the Employment Agreement,
material reduction in Mr. Fertitta's responsibilities, and Change of Control, as
defined in the Employment Agreement), Mr. Fertitta will receive a lump sum
payment equal to the full amount payable under the Employment Agreement. The
Employment Agreement provides that during the period ending two years after the
expiration of its term, Mr. Fertitta will not compete with the Company in the
seafood restaurant business.
11
<PAGE>
Notwithstanding anything to the contrary set forth in any of the
Company's previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the following
Performance Graph and the previous Report of the Compensation Committee of
Landry's Seafood Restaurants, Inc. on Executive Compensation shall not be
incorporated by reference into any such filings.
PERFORMANCE GRAPH
The following line graph compares the Company's cumulative total
stockholder return with the cumulative total stockholder return of the Dow Jones
Global Index and the Dow Jones Restaurant Index since the Company's initial
public offering on August 18, 1993, assuming in each case an initial investment
of $100 on August 18, 1993:
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
8/18/93 12/31/93 12/31/94 12/31/95 12/31/96 12/31/97
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Dow Jones 100 102 100 134 162 213
Global Index
Dow Jones 100 104 98 139 141 145
Restaurant
Landry's Seafood 100 200 236 284 356 400
Restaurants, Inc.
</TABLE>
12
<PAGE>
PROPOSAL II - PROPOSAL TO APPROVE THE
AMENDMENT TO THE AMENDED AND RESTATED 1995 FLEXIBLE INCENTIVE PLAN
The Landry's Seafood Restaurants 1995 Flexible Incentive Plan (the "Flex
Plan") was approved by the Company's Board of Directors and, thereafter, the
stockholders at the Company's 1995 Annual Meeting. The Flex Plan provides for
the granting of stock options, including incentive stock options or non-
qualified stock options, stock appreciation rights either in tandem with stock
options or freestanding, restricted stock awards, performance shares,
performance units, dividend equivalent rights, and other stock based awards.
The maximum number of shares originally available to be issued under the Flex
Plan was 1,000,000 shares. As of the Record Date, incentive stock options and
non-qualified stock options giving the holders the right to acquire 693,000
shares were outstanding and an additional 232,000 options had been previously
exercised. As a result, under the Flex Plan, there were 75,000 shares available
for further issuance. The Flex Plan is administered by the Compensation
Committee which has broad powers under the Flex Plan to, among other things,
administer and interpret the Flex Plan, establish guidelines for the Flex Plan's
operations, select persons to whom awards are to be made under the Flex Plan,
determine the type, size and combination of awards to be granted under the Flex
Plan and determine other terms and conditions of an award. The proposed
amendment to the Flex Plan would increase by 1,000,000 shares, the number of
options that might be granted pursuant to the Flex Plan. Except for that
amendment, all terms and conditions of the Flexible Incentive Plan which was
approved by stockholders in 1995 will remain in full force and effect. A
complete copy of the Amended and Restated Flex Plan is attached as Exhibit "A"
hereto.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE "FOR" THE PROPOSAL TO
AMEND THE FLEXIBLE INCENTIVE PLAN.
CERTAIN TRANSACTIONS
The policy of the Company is, to the extent practicable, to avoid
transactions (except those which are employment related) with officers,
directors, and affiliates. In any event, any such transactions will be entered
into on terms no less favorable to the Company than could be obtained from third
parties, and such transactions will be approved by a majority of the
disinterested directors of the Company.
Effective January 1, 1996, the Company entered into a Consulting Service
Agreement (the "Agreement") with Fertitta Hospitality, LLC ("Fertitta
Hospitality"), which is jointly owned by Mr. Fertitta and his wife. Pursuant to
the Agreement, the Company provides limited consulting services to Fertitta
Hospitality with respect to management and operational matters, administrative
and personnel matters, and matters relating to construction and renovation of
hotel projects which may be operated by Fertitta Hospitality. The Company
receives a consulting fee of $2,500 per month under the Agreement plus the
reimbursement of all out-of-pocket expenses and such additional compensation as
may be agreed upon. The Agreement provides for a one-year term which is
automatically renewed unless either party terminates the Agreement upon 30 days'
written notice to the other party. The Consulting Services Agreement was
entered into between related parties and was not the result of arm's-length
negotiations. Accordingly, the terms of this transaction may have been more or
less favorable to the Company than might have been obtained from unaffiliated
third parties. The Company believes that the terms of the transaction were at
least as favorable to the Company as that which could have been obtained in
arm's-length transactions with an unaffiliated party.
On or about January 4, 1996, Fertitta Hospitality acquired certain
properties in Galveston, Texas in connection with the acquisition of a major
resort area. A portion of the property acquired by Fertitta Hospitality
contained a leased restaurant site upon which a Landry's Seafood House
restaurant was located and
13
<PAGE>
upon which the terms of the lease relating to that restaurant had been
negotiated in 1993 at arm's-length between Landry's and the previous
unaffiliated third party owner/lessor. Upon the acquisition by Fertitta
Hospitality, Landry's continued to pay such rent. The rent was approved in 1993
by the Board at the time of the original lease with the unaffiliated third
party. The rent paid from January 1, 1997 to April 30, 1997 was $96,333. In
May 1997, the restaurant property, including land, building and improvements was
purchased by the Company for $3,077,000.
On June 10, 1997 the capital Company loaned $300,000 to Paul S. West, the
Company's Chief Financial Officer and a Director. The loan bore interest at the
rate of 7% per annum. The loan and accrued interest was repaid in December 1997.
On an annual basis, the Company conducts a three day conference for all
of its management personnel. In 1997, such conference was held at a hotel and
conference center owned by Fertitta Hospitality. The rates were the below
hotel's listed rates, and the Company believes were no less favorable then could
have been obtained in an arm's-length transaction with an unaffiliated party.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company's independent public accountants for the fiscal year ended
December 31, 1997, were, and for the fiscal year ending December 31, 1998, will
be the firm of Arthur Andersen LLP. It is expected that one or more
representatives of such firm will attend the Annual Meeting. Such representa-
tives will be given an opportunity to make statements at the Annual Meeting, if
they so desire, and are expected to be available to respond to appropriate
questions.
STOCKHOLDER PROPOSALS
Any stockholder who intends to present a proposal at the 1999 Annual
Meeting of Stockholders for inclusion in the Proxy Statement and form of proxy
relating to that meeting is advised that the proposal must be received by the
Company at its principal executive offices not later than December 31, 1998.
The Company will not be required to include in its proxy statement or form of
proxy a stockholder proposal which is received after that date or which
otherwise fails to meet requirements for stockholder proposals established by
regulations of the Securities and Exchange Commission.
OTHER MATTERS
The solicitation of proxies is made by and on behalf of the Board of
Directors. The cost of the solicitation will be borne by the Company, including
the reasonable expenses of brokerage firms or other nominees for forwarding
proxy materials to beneficial owners. In addition to solicitation by mail,
proxies may be solicited by telephone, telegraph or personally. Proxies may be
solicited by directors, officers and employees of the Company without additional
compensation.
If the enclosed proxy is executed and returned, the shares represented
thereby will be voted in accordance with any specifications made by the
stockholder. In the absence of any such specification, they will be voted to
elect the directors as set forth under "Election of Directors" above and in
favor of Proposal II.
The presence of a stockholder at the meeting will not operate to revoke
his/her proxy. A proxy may be revoked at any time insofar as it has not been
exercised by giving written notice to the Company or by voting in person at the
meeting.
14
<PAGE>
If any other matters shall come before the meeting, the persons named in
the proxy, or their substitutes, will vote thereon in accordance with their
judgment. The Board of Directors does not know of any other matters which will
be presented for action at the meeting.
FORM 10-K
THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH PERSON WHOSE PROXY IS BEING
SOLICITED, UPON REQUEST OF ANY SUCH PERSON, A COPY OF THE ANNUAL REPORT OF THE
COMPANY ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997 AS FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION, INCLUDING THE FINANCIAL STATEMENTS AND
SCHEDULES THERETO, BUT NOT THE EXHIBITS. REQUESTS FOR COPIES OF SUCH REPORT
SHOULD BE DIRECTED TO STEVEN L. SCHEINTHAL, SECRETARY, LANDRY'S SEAFOOD
RESTAURANTS, INC., 1400 POST OAK BOULEVARD, SUITE 1010, HOUSTON, TEXAS 77056.
COPIES OF ANY EXHIBIT TO THE FORM 10-K WILL BE FORWARDED UPON RECEIPT OF A
WRITTEN REQUEST THEREFORE ADDRESSED TO MR. SCHEINTHAL.
EACH STOCKHOLDER WHO DOES NOT EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON
IS URGED TO EXECUTE THE PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
By Order of the Board of Directors,
/s/ Steven L. Scheinthal
--------------------------------------
Steven L. Scheinthal
Secretary
April 30, 1998
15
<PAGE>
EXHIBIT "A"
LANDRY'S SEAFOOD RESTAURANTS, INC.
AMENDED AND RESTATED
1995 FLEXIBLE INCENTIVE PLAN
SECTION 1. PURPOSE OF THE PLAN
The purposes of Landry's Seafood Restaurants, Inc. 1995 Flexible
Incentive Plan (the "Plan") are to promote the interests of Landry's Seafood
Restaurants, Inc., and its subsidiaries (together with any successor thereto,
the "Company") and its stockholders by enabling the Company to attract, motivate
and retain key employees by offering such key employees performance-based stock
incentives and other equity interests in the Company and other incentive awards
that recognize the creation of value for the stockholders of the Company and
promote the Company's long-term growth and success. To achieve these purposes,
eligible persons may receive stock options, Stock Appreciation Rights,
Restricted Stock, Performance Awards, performance stock, Dividend Equivalent
Rights and any other Awards, or any combination thereof.
SECTION 2. DEFINITIONS
As used in the Plan, the following terms shall have the meanings set
forth below unless the content otherwise requires:
2.1 "Award" shall mean the grant of a stock option, a Stock
Appreciation Right, a Restricted Stock, a Performance Award, performance
stock, a Dividend Equivalent Right or any other award under the Plan.
2.2 "Board" shall mean the Board of Directors of the Company, as the
same may be constituted from time to time.
2.3 "Change in Control" shall mean, after the effective date of the
Plan, (i) the occurrence of an event of a nature that would be required to
be reported in response to Item 1 or Item 2 of a Form 8-K Current Report of
the Company promulgated pursuant to Sections 13 and 15(d) of the Exchange
Act; provided that, without limitation, such a Change in Control shall be
deemed to have occurred if (a) any "person", as such term is used in
Sections 13(d) and 14(d) of the Exchange Act (other than the Company, any
trustee or other fiduciary holding securities under any employee benefit
plan of the Company, or any company owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company), is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing fifty
A-1
<PAGE>
percent (50%) or more of the combined voting power of the Company's then
outstanding securities or (b) during any period of two consecutive years,
individuals who at the beginning of such period constitute the Board cease
for any reason to constitute at least a majority thereof, unless the
election by the Board or the nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning
of the two-year period or whose election or nomination for election was
previously so approved; (ii) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation, other
than a merger or consolidation that would result in the voting securities
of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into
voting securities of the surviving entity) more than eighty percent (80%)
of the combined voting power of the voting securities of the surviving
entity outstanding immediately after such merger or consolidation;
provided, however, that a merger or consolidation effected to implement a
reorganization or recapitalization of the Company, or a similar transaction
(collectively, a "Reorganization"), in which no "person" acquires more than
twenty percent (20%) of the combined voting power of the Company's then
outstanding securities shall not constitute a Change in Control of the
Company; or (iii) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets.
2.4 "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
2.5 "Committee" shall mean the Compensation Committee, if such a
separate Committee is appointed by the Board, or, until such time as a
separate committee is appointed, it shall mean the Board. If a separate
committee is appointed, the Committee shall meet the applicable
requirements for "disinterested administration" within the requirements of
Rule 16b-3 promulgated under the Exchange Act and any successor thereunder
promulgated during the duration of the Plan. The Board may amend the Plan
to modify the definition of Committee within the limits of Rule 16b-3 to
assure that the Plan is administered in compliance with Rule 16b-3.
Initially, the Committee will consist of not less than two (2) members of
the Board who are appointed by, and serve at the pleasure of, the Board and
who are (i) "disinterested" within the meaning of Rule 16b-3 and (ii)
"outside directors," as required under Section 162(m) of the Code and such
Treasury Regulations as may be promulgated thereunder. The Board does not
meet the applicable requirements of Rule 16b-3.
2.6 "Common Stock" shall mean the Common Stock, $0.01 par value per
share, of the Company.
2.7 "Designated Beneficiary" shall mean the beneficiary designated by
a Participant in a manner determined by the Committee, to exercise rights
of the Participant
A-2
<PAGE>
in the event of the Participant's death. In the absence of an effective
designation by a Participant the Designated Beneficiary shall be the
Participant's estate.
2.8 "Disability" shall mean permanent and total inability to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or
which has lasted or can be expected to last for a continuous period of not
less than twelve (12) months, as determined in the sole and absolute
discretion of the Committee.
2.9 "Dividend Equivalent Right" shall mean the right of the holder
thereof to receive credits based on the cash dividends that would have been
paid on the Shares specified in an Award granting Dividend Equivalent
Rights if the Shares subject to such Award were held by the person to whom
the Award is made.
2.10 "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
2.11 "Fair Market Value" shall mean with respect to the Shares, as of
any date, (i) the last reported sales price on any stock exchange on which
the Common Stock is traded or, if not reported on such exchange, on
the composite tape, or, in case no such sale takes place on such day, the
average of the reported closing bid and asked quotations on such exchange;
(ii) if the Common Stock is not listed on a stock exchange or no such
quotations are available, the closing price of the Common Stock as reported
by the National Market System of the National Association of Securities
Dealers, Inc., or, if no such quotations are available, the average of the
high bid and low asked quotations in the over-the-counter market as
reported by the National Quotation Bureau Incorporated, or similar
organization; or (iii) in the event that there shall be no public market
for the Common Stock, the fair market value of the Common Stock as
determined (which determination shall be conclusive) in good faith by the
Committee, based upon the value of the Company as a going concern, as if
such Common Stock were publicly owned stock, but without any discount with
respect to minority ownership.
2.12 "Incentive Stock Option" shall mean any stock option awarded
under the Plan which qualifies as an "Incentive Stock Option" under Section
422 of the Code or any successor provision.
2.13 "Non-Tandem Stock Appreciation Right" shall mean any Stock
Appreciation Right granted alone and not in connection with an Award which
is a stock option.
2.14 "Non-Qualified Stock Option" shall mean any stock option awarded
under the Plan that does not qualify as an Incentive Stock Option.
A-3
<PAGE>
2.15 "Optionee" shall mean any person who has been granted a stock
option under the Plan and who has executed a written stock option agreement
with the Company reflecting the terms of such grant.
2.16 "Performance Award" shall mean any Award hereunder of Shares,
units or rights based upon, payable in, or otherwise related to, Shares
(including Restricted Stock), or cash of an equivalent value, as the
Committee may determine, at the end of a specified performance period
established by the Committee.
2.17 "Plan" shall mean the Landry's Seafood Restaurants, Inc. 1995
Flexible Incentive Plan set forth herein.
2.18 "Reload Option" shall mean a stock option as deemed in
subsection 6.6(b) herein.
2.19 "Restricted Stock" shall mean any Award of Shares under the Plan
that are subject to restrictions or risk of forfeiture.
2.20 "Retirement" shall mean termination of employment other than
discharge for cause, after age 65 or on or before age 65 if pursuant to the
terms of any retirement plan maintained by the Company or any of its
Subsidiaries in which such person participates.
2.21 "Shares" shall mean shares of the Company's Common Stock and any
shares of capital stock or other securities of the Company hereafter issued
or issuable upon, in respect of or in substitution or exchange for such
Shares.
2.22 "Stock Appreciation Right" shall mean the right of the holder
thereof to receive an amount in cash or Shares equal to the excess of the
Fair Market Value of a Share on the date of exercise over the Fair Market
Value of a Share on the date of the grant (or such other value as may be
specified in the agreement granting the Stock Appreciation Right).
2.23 "Subsidiary" shall mean a subsidiary corporation of the Company,
as defined in Section 424(f) of the Code.
2.24 "Tandem Stock Appreciation Right" shall mean a Stock
Appreciation Right granted in connection with an Award which is a stock
option.
SECTION 3. ADMINISTRATION OF THE PLAN
3.1 Committee. The Plan shall be administered and interpreted by the
Committee.
A-4
<PAGE>
3.2 Awards. Subject to the provisions of the Plan and directions
from the Board, the Committee is authorized to:
(a) determine the persons to whom Awards are to be granted;
(b) determine the types and combinations of Awards to be granted,
the number of Shares to be covered by the Award, the pricing of the
Award, the time or times when the Award shall be granted and may be
exercised, the terms, performance criteria or other conditions,
vesting periods or any restrictions for an Award, any restrictions on
Shares acquired pursuant to the exercise of an Award and any other
terms and conditions of an Award;
(c) conclusively interpret the provisions of the Plan;
(d) prescribe, amend and rescind rules and regulations relating
to the Plan or make individual decisions as questions arise, or both;
(e) determine whether, to what extent and under what
circumstances to provide loans from the Company to participants to
purchase Shares subject to Awards under the Plan, and the terms and
conditions of such loans;
(f) rely upon employees of the Company for such clerical and
recordkeeping duties as may be necessary in connection with the
administration of the Plan; and
(g) make all other determinations and take all other actions
necessary or advisable for the administration of the Plan.
3.3 Procedures. A majority of the Committee members shall constitute
a quorum. All determinations of the Committee shall be made by a majority
of the members present at a meeting in which a quorum is present. All
questions of interpretation and application of the Plan or pertaining to
any question of fact or Award granted hereunder shall be decided by the
Committee, whose decision shall be final, conclusive and binding upon the
Company and each other affected party.
SECTION 4. SHARES SUBJECT TO PLAN
4.1 Limitations. The maximum number of Shares that may be
issued with respect to Awards under the Plan shall not exceed 2,000,000
unless such maximum shall be increased or decreased by reason of changes in
capitalization of the Company as hereinafter provided. The Shares issued
pursuant to the Plan may be authorized but unissued Shares, or may be
issued Shares which have been reacquired by the Company.
A-5
<PAGE>
4.2 Changes. To the extent that any Award under the Plan,
or any stock option or performance award granted under any prior incentive
plan of the Company, shall be forfeited, shall expire or shall be
cancelled, in whole or in part then the number of Shares covered by the
Award or stock option so forfeited, expired or cancelled may again be
awarded pursuant to the provisions of the Plan. In the event that Shares
are delivered to the Company in full or partial payment of the exercise
price for the exercise of a stock option granted under the Plan or any
prior incentive plan of the Company, the number of Shares available for
future Awards under the Plan shall be reduced only by the net number of
Shares issued upon the exercise of the option. Awards that may be
satisfied either by the issuance of Shares or by cash or other
consideration shall, until the form of consideration to be paid is finally
determined, be counted against the maximum number of Shares that may be
issued under the Plan. If the Award is ultimately satisfied by the payment
of consideration other than Shares, as, for example, a stock option granted
in tandem with a Stock Appreciation Right that is settled by a cash payment
of the stock appreciation, such Shares may again be made the subject of an
Award under the Plan. Awards will not reduce the number of Shares that may
be issued pursuant to the Plan if the settlement of the Award will not
require the issuance of Shares, as, for example, a Stock Appreciation Right
that can be satisfied only by the payment of cash.
SECTION 5. ELIGIBILITY
Eligibility for participation in the Plan shall be confined to those
persons who are employed by the Company, and who are officers or directors of
the Company, or who are in managerial or other key positions within the Company.
In making any determination as to persons to whom Awards shall be granted, the
type of Award, and/or the number of Shares to be covered by the Award, the
Committee shall consider the position and responsibilities of the person, his or
her importance to the Company, the duties of such person, his or her past,
present and potential contributions to the growth and success of the Company,
and such other factors as the Committee shall deem relevant in connection with
accomplishing the purposes of the Plan.
SECTION 6. STOCK OPTIONS
6.1 Grants. The Committee may grant stock options alone or in
addition to other Awards granted under the Plan to any eligible officer,
director or other key employee. Each person so selected shall be offered
an option to purchase the number of Shares determined by the Committee.
The Committee shall specify whether such option is an Incentive Stock
Option or Non-Qualified Stock Option and any other terms and conditions
relating to such Award. To the extent that any stock option does not
qualify as an Incentive Stock Option (whether because of its provisions or
the time or manner of its exercise or otherwise), such stock option or the
portion thereof which does not qualify shall constitute a separate Non-
Qualified Stock Option. Each such person so selected shall have a
reasonable period of time within which to accept or reject the offered
option. Failure to accept within the period so fixed by the Committee may
be treated as a
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rejection. Each person who accepts an option shall enter into a written
agreement with the Company, in such form as the Committee may prescribe,
setting forth the terms and conditions of the option, consistent with the
provisions of the Plan. The Optionee and the Company shall enter into
option agreements for Incentive Stock Options and Non-Qualified Stock
Options. At any time and from time to time, the Optionee and the Company
may agree to modify an option agreement so that an incentive Stock Option
may be converted to a Non-Qualified Stock Option.
The Committee may require that an Optionee meet certain conditions before
the option or a portion thereof may vest or be exercised, as, for example, that
the Optionee remain in the employ of the Company for a stated period or periods
of time before the option, or stated portions thereof, may vest or be exercised.
6.2 Option Price. The option exercise price of the Shares covered by
each stock option shall be determined by the Committee; provided, however,
that the option exercise price of an Incentive Stock Option shall not be
less than one hundred percent (100%) of the Fair Market Value of Shares on
the date of the grant of such Incentive Stock Option.
6.3 Incentive Stock Options Limitations.
(a) In no event shall any person be granted Incentive Stock
Options to the extent that the Shares covered by any Incentive Stock
Options (and any incentive stock options granted under any other plans
of the Company and its Subsidiaries) that may be exercised for the
first time by such person in any calendar year have an aggregate Fair
Market Value in excess of $100,000. For this purpose, the Fair Market
Value of the Shares shall be determined as of the dates on which the
Incentive Stock Options are granted. It is intended that the
limitation on Incentive Stock Options provided in this subsection
6.3(a) be the maximum limitation on options which may be considered
Incentive Stock Options under the Code.
(b) Notwithstanding anything herein to the contrary, in no event
shall any employee owning more than ten percent (10%) of the total
combined voting power of the Company or any Subsidiary be granted an
Incentive Stock Option hereunder unless the option exercise price
shall be at least one hundred ten percent (110%) of the Fair Market
Value of the Shares subject to such Incentive Stock Option at the time
that the Incentive Stock Option is granted and the term of such
Incentive Stock Option shall not exceed five (5) years.
6.4 Option Term. Subject to subsection 6.3(b) hereof, the term of a
stock option shall be for such period of months or years from the date of
its grant as may be determined by the Committee; provided, however, that no
Incentive Stock Option shall be exercisable later than ten (10) years from
the date of its grant. Furthermore, no
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Incentive Stock Option may be exercised unless, at the time of such
exercise, the Optionee is, and has been continuously since the date of
grant of his or her Incentive Stock Option, employed by the Company, except
that:
(a) An Incentive Stock Option may, to the extent vested, be
exercised within the period of three months after the date the
Participant ceases to be an employee of the Company (or within such
lesser period as may be specified in the applicable option agreement);
provided that the option agreement may designate a longer exercise
period and that the exercise after such three-month period shall be
treated as the exercise of a Non-Qualified Stock Option under the
Plan;
(b) If the Optionee dies while in the employ of the Company, or
within three months after the Optionee ceases to be such an employee,
the Incentive Stock Option may, to the extent vested, be exercised by
the Optionee's Designated Beneficiary within the period of one year
after the date of death (or within such lesser period as may be
specified in the applicable option agreement); and
(c) If the Optionee ceases to be an employee of the Company by
reason of the Optionee's Disability, to the extent vested the
Incentive Stock Option may be exercised within the period of one year
after the date of Disability (or within such lesser period as may be
specified in the applicable option agreement).
6.5 Vesting of Stock Options.
(a) Each stock option granted hereunder may only be exercised to
the extent that the Optionee is vested in such option. Each stock
option shall vest separately in accordance with the option vesting
schedule, if any, determined by the Committee in its sole discretion,
which will be incorporated in the stock option agreement entered into
between the Company and each Optionee. The option vesting schedule
will be accelerated if, in the sole discretion of the Committee, the
Committee determines that acceleration of the option vesting schedule
would be desirable for the Company.
(b) In the event of the dissolution or liquidation of the
Company, each stock option granted under the Plan shall terminate as
of a date to be fixed by the Board; provided, however, that not less
than thirty (30) days' written notice of the date so fixed shall be
given to each Optionee and each such Optionee shall be fully vested in
and shall have the right during such period to exercise the option,
even though such option would not otherwise be exercisable under the
option vesting schedule. At the end of such period, any unexercised
option shall terminate and be of no other effect.
(c) In the event of a Reorganization (as defined in Section 2.3
hereof):
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(1) If there is no plan or agreement respecting the
Reorganization, or if such plan or agreement does not
specifically provide for the change, conversion or exchange of
the Shares under outstanding and unexercised stock options for
other securities then the provisions of subsection 6.5(b) shall
apply as if the Company had dissolved or been liquidated on the
effective date of the Reorganization; or
(2) If there is a plan or agreement respecting the
Reorganization, and if such plan or agreement specifically
provides for the change, conversion or exchange of the Shares
under outstanding and unexercised stock options for securities of
another corporation, then the Board shall adjust the Shares under
such outstanding and unexercised stock options (and shall adjust
the Shares remaining under the Plan which are then available to
be awarded under the Plan, if such plan or agreement makes no
specific provision therefor) in a manner not inconsistent with
the provisions of such plan or agreement for the adjustment
change, conver sion or exchange of such Shares and such options.
(d) In the event of a Change in Control of the Company, all stock
options and any associated Stock Appreciation Rights shall become
fully vested and immediately exercisable and the vesting of all
performance-based stock options shall be determined as if the
performance period or cycle applicable to such stock options had ended
immediately upon such Change in Control; provided, however, that if in
the opinion of counsel to the Company the immediate exercisability of
options when taken into consideration with all other "parachute
payments" as defined in Section 280G of the Code, as amended, would
result in an "excess parachute payment" as defined in such section as
well as an exercise tax imposed by Section 4999 of the Code, such
options and any associated Stock Appreciation Rights shall become
fully vested and immediately exercisable, except as and to the extent
the Committee, in its sole discretion, shall otherwise determine, and
which determination by the Committee shall be based solely upon
maximizing the after-tax benefits to be received by any such Optionee.
6.6 Exercise of Stock Options.
(a) Stock options may be exercised as to Shares only in amounts
and at intervals of time specified in the written option agreement
between the Company and the Optionee. Each exercise of a stock
option, or any part thereof, shall be evidenced by a notice in writing
to the Company. The purchase price of the Shares as to which an
option shall be exercised shall be paid in full at the time of
exercise, and may be paid to the Company either:
(1) in cash (including check, bank draft or money order); or
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(2) by the delivery of Shares having a Fair Market Value
equal to the aggregate option rate;
(3) by a combination of cash and Shares; or
(4) by other consideration deemed acceptable by the
Committee in its sole discretion.
(b) If an Optionee delivers Shares (including Shares of
Restricted Stock) already owned by him or her in full or partial
payment of the exercise price for any stock option granted under the
Plan or any prior incentive plan of the Company, or if the Optionee
elects to have the Company reflect that number of Shares out of the
Shares being acquired through the exercise of the option having a Fair
Market Value equal to the exercise price of the stock option being
exercised, the Committee may authorize the automatic grant of a new
option (a "Reload Option") for that number of Shares as shall equal
the number of already owned Shares surrendered (including Shares of
Restricted Stock) or newly acquired Shares being retained in payment
of the option exercise price of the underlying stock option being
exercised. The grant of a Reload Option will become effective upon
the exercise of the underlying stock option. The option exercise
price of the Reload Option shall be the Fair Market Value of a Share
on the effective date of the grant of the Reload Option. Each Reload
Option shall be exercisable no earlier than six (6) months from the
date of its grant and no later than the time when the underlying stock
option being exercised could be last exercised. The Committee may
also specify additional terms, conditions and restrictions for the
Reload Option and the Shares to be acquired upon the exercise thereof.
(c) The amount, as determined by the Committee, of any federal,
state or local tax required to be withheld by the Company due to the
exercise of a stock option shall be satisfied by payment by the
Optionee to the Company of the amount of such withholding obligation
in cash or other consideration acceptable to the Committee in its sole
discretion.
(d) An Optionee shall not have any of the rights of a stockholder
of the Company with respect to the Shares covered by a stock option
except to the extent that one or more certificates representing such
Shares shall have been delivered to the Optionee, or the Optionee has
been determined to be a stockholder of record by the Company's
transfer agent, upon due exercise of the option.
SECTION 7. STOCK APPRECIATION RIGHTS
7.1 Grants. The Committee may grant to any eligible employee either
Non-Tandem Stock Appreciation Rights or Tandem Stock Appreciation Rights.
Stock Appreciation Rights shall be subject to such terms and conditions as
the Committee shall
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impose. The grant of the Stock Appreciation Right may provide that the
holder may be paid for the value of the Stock Appreciation Right either in
cash or in Shares, or a combination thereof, at the discretion of the
Committee. In the event of the exercise of a Stock Appreciation Right
payable in Shares, the holder of the Stock Appreciation Right shall receive
that number of whole Shares of stock of the Company having an aggregate
Fair Market Value on the date of exercise equal to the value obtained by
multiplying (i) either (a) in the case of a Tandem Stock Appreciation
Right, the difference between the Fair Market Value of a Share on the date
of exercise over the per share exercise price of the related option, or (b)
in the case of a Non-Tandem Stock Appreciation Right the difference between
the Fair Market Value of a Share on the date of exercise over the Fair
Market Value on the date of the grant by (ii) the number of Shares as to
which the Stock Appreciation Right is exercised. However, notwithstanding
the foregoing, the Committee, in its sole discretion, may place a ceiling
on the amount payable upon exercise of a Stock Appreciation Right but any
such limitation shall be specified at the time that the Stock Appreciation
Right is granted.
7.2 Exercisability. A Tandem Stock Appreciation Right may be granted
at the time of the grant of the related stock option or, if the related
stock option is a Non-Qualified Stock Option, at any time thereafter during
the term of the stock option. A Tandem Stock Appreciation Right granted in
connection with an Incentive Stock Option (i) may be exercised at, and only
at, the times and to the extent the related Incentive Plan Stock Option is
exercisable, (ii) expires upon the termination of the related Incentive
Stock Option, (iii) may not exceed 100% of the difference between the
exercise price of the related Incentive Stock Option and the market price
of the Shares subject to the related Incentive Stock Option at the time the
Tandem Stock Appreciation Right is exercised and (iv) may be exercised at,
and only at, such times as the market price of the Shares subject to the
related Incentive Stock Option exceeds the exercise price of the related
Incentive Stock Option. The Tandem Stock Appreciation Right may be
transferred at, and only at, the times and to the extent the related stock
option is transferable. If a Tandem Stock Appreciation Right is granted,
there shall be surrendered and cancelled from the related option at the
time of exercise of the Tandem Stock Appreciation Right, in lieu of
exercise under the related option, that number of Shares as shall equal the
number of Shares as to which the Tandem Stock Appreciation Right shall have
been exercised.
7.3 Certain Limitations on Non-Tandem Stock Appreciation Rights. A
Non-Tandem Stock Appreciation Right will be exercisable as provided by the
Committee and will have such other terms and conditions as the Committee
may determine. A Non-Tandem Stock Appreciation Right is subject to
acceleration of vesting or immediate termination in certain circumstances
in the same manner as stock options pursuant to subsections 6.4 and 6.5 of
the Plan.
7.4 Limited Stock Appreciation Rights. The Committee is also
authorized to grant "limited stock appreciation rights," either as Tandem
Stock Appreciation Rights or
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Non-Tandem Stock Appreciation Rights. Limited stock appreciation rights
would become exercisable only upon the occurrence of a Change in Control or
such other event as the Committee may designate at the time of grant or
thereafter.
SECTION 8. RESTRICTED STOCK
8.1 Grants. The Committee may grant Awards of Restricted Stock for
no cash consideration, for such minimum consideration as may be required by
applicable law, or for such other consideration as may be specified by the
grant. The terms and conditions of the Restricted Stock shall be specified
by the grant agreement. The Committee, in its sole discretion, may specify
any particular rights which the person to whom an Award of Restricted Stock
is made shall have in the Restricted Stock during the restriction period
and the restrictions applicable to the particular Award, the vesting
schedule (which may be based on service, performance or other factors) and
rights to acceleration of vesting (including, without limitation, whether
non-vested Shares are forfeited or vested upon termination of employment).
Further, the Committee may award performance-based Restricted Stock by
conditioning the grant, or vesting or such other factors, such as the
release, expiration or lapse of restrictions upon any such Award (including
the acceleration of any such conditions or terms) of such Restricted Stock
upon the attainment of specified performance goals or such other factors as
the Committee may determine. The Committee shall also determine when the
restrictions shall lapse or expire and the conditions, if any, under which
the Restricted Stock will be forfeited or sold back to the Company. Each
Award of Restricted Stock may have different restrictions and conditions.
The Committee, in its discretion, may prospectively change the restriction
period and the restrictions applicable to any particular Award of
Restricted Stock previously granted. Unless otherwise set forth in the
Plan, Restricted Stock may not be disposed of by the recipient until the
restrictions specified in the Award expire.
8.2 Awards and Certificates. Any Restricted Stock issued hereunder
may be evidenced such manner as the Committee, in its sole discretion,
shall deem appropriate including, without limitation, book-entry
registration or issuance of a stock certificate or certificates. In the
event any stock certificate is issued in respect of Shares of Restricted
Stock awarded hereunder, such certificate shall bear an appropriate legend
with respect to the restrictions applicable to such Award. The Company may
retain, at its option, the physical custody of any stock certificate
representing any awards of Restricted Stock during the restriction period
or require that the Restricted Stock be placed in escrow or trust, along
with a stock power endorsed in blank, until all restrictions are removed or
expire.
SECTION 9. PERFORMANCE AWARDS
9.1 Grants. A Performance Award may consist of either or both, as
the Committee may determine, of (i) "Performance Shares" or the right to
receive Shares, Restricted Stock or cash of an equivalent value, or any
combination thereof as the
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Committee may determine, or (ii) "Performance Units," or the right to
receive a fixed dollar amount payable in cash, Common Stock, Restricted
Stock or any combination thereof, as the Committee may determine. The
Committee may grant Performance Awards to any eligible employee, for no
cash consideration, for such minimum consideration as may be required by
applicable law or for such other consideration as may be specified at the
time of the grant. The terms and conditions of Performance Awards shall be
specified at the time of the grant and may include provisions establishing
the performance period, the performance criteria to be achieved during a
performance period, the criteria used to determine vesting (including the
acceleration thereof), whether Performance Awards are forfeited or vest
upon termination of employment during a performance period and the maximum
or minimum settlement values. Each Performance Award shall have its own
terms and conditions, which shall be determined in the discretion of the
Committee. If the Committee determines, in its sole discretion, that the
established performance measures or objectives are no longer suitable
because of a change in the Company's business, operations, corporate
structure or for other reasons that the Committee deems satisfactory, the
Committee may modify the performance measures or objectives and/or the
performance period.
9.2 Terms and Conditions. Performance Awards may be valued by
reference to the Fair Market Value of a Share or according to any formula
or method deemed appropriate by the Committee, in its sole discretion,
including, but not limited to, achievement of specific financial,
production, sales, cost or earnings performance objectives that the
Committee believes to be relevant to the Company's business and for
remaining in the employ of the Company for a specified period of time, or
the Company's performance or the performance of its Common Stock measured
against the performance of the market of the Company's industry segment or
its direct competitors. Performance Awards may be paid in cash, Shares
(including Restricted Stock) or other consideration, or any combination
thereof. If payable in Shares, the consideration for the issuance of the
Shares may be the achievement of the performance objective established at
the time of the grant of the Performance Award. Performance Awards may be
payable in a single payment or in installments and may be payable at a
specified date or dates or upon attaining the performance objective, all at
the Committee's discretion. The extent to which any applicable performance
objective has been achieved shall be conclusively determined by the
Committee.
SECTION 10. DIVIDEND EQUIVALENT RIGHTS
The Committee may grant a Dividend Equivalent Right either as a component
of another Award or as a separate Award, and, in general, each such holder of a
Dividend Equivalent Right that is outstanding on a dividend record date for the
Company's Common Stock shall be credited with an amount equal to the cash or
stock dividends or other distributions that would have been received had the
Shares covered by the Award been issued and outstanding on the dividend record
date. The terms and conditions of the Dividend Equivalent Right shall be
specified by the grant. Dividend equivalents credited to the holder of a
Dividend Equivalent Right may be paid currently or may be deemed to be
reinvested in additional Shares (which may thereafter
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accrue additional Dividend Equivalent Rights). Any such reinvestment shall be
at the Fair Market Value at the time thereof. Dividend Equivalent Rights may be
settled in cash or Shares, or a combination thereof, in a single payment or in
installments. A Dividend Equivalent Right granted as a component of another
Award may provide that such Dividend Equivalent Right shall be settled upon
exercise, settlement or payment for or lapse of restrictions on such other
Award, and that such Dividend Equivalent Right shall expire or be forfeited or
annulled under the same conditions as such other Award. A Dividend Equivalent
Right granted as a component of another Award may also contain terms and
conditions different from such other Award.
SECTION 11. OTHER AWARDS
The Committee may grant to any eligible employee other forms of Awards
based upon, payable in or otherwise related to, in whole or in part, Shares if
the Committee, in its sole discretion, determines that such other form of Award
is consistent with the purposes and restrictions of the Plan. The terms and
conditions of such other form of Award shall be specified by the grant
including, but not limited to, the price, if any, and the vesting schedule, if
any. Such Awards may be granted for no cash consideration, for such minimum
consideration as may be required by applicable law or for such other
consideration as may be specified by the grant.
SECTION 12. COMPLIANCE WITH SECURITIES AND OTHER LAWS
In no event shall the Company be required to sell or issue Shares under any
Award if the sale or issuance thereof would constitute a violation of applicable
federal or state securities laws or regulations or a violation of any other law
or regulation of any governmental or regulatory agency or authority or any
national securities exchange. As a condition to any sale or issuance of Shares,
the Company may place legends on Shares, issue stop transfer orders and require
such agreements or undertakings as the Company may deem necessary or advisable
to assure compliance with any such laws or regulations, including, if the
Company or its counsel deems it appropriate, representations from the person to
whom an Award is granted that he or she is acquiring the Shares solely for
investment and not with a view to distribution and that no distribution of the
Shares will be made unless registered pursuant to applicable federal and state
securities laws, or in the opinion of counsel of the Company, such registration
is unnecessary.
SECTION 13. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR REORGANIZATION
The value of an Award in Shares shall be adjusted from time to time as
follows:
(a) Subject to any required action by stockholders, the number of
Shares covered by each outstanding Award, and the exercise price,
shall be proportionately adjusted for any increase or decrease in the
number of issued Shares of the Company resulting from a subdivision or
consolidation of Shares or the payment of a stock dividend (but only
in Shares) or any other increase or decrease in the number of Shares
affected without receipt of consideration by the Company.
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(b) Subject to any required action by stockholders, if the Company
shall be the surviving corporation in any Reorganization, merger or
consolidation, each outstanding Award shall pertain to and apply to
the securities to which a holder of the number of Shares subject to
the Award would have been entitled, and if a plan or agreement
reflecting any such event is in effect that specifically provides for
the change, conversion or exchange of Shares, then any adjustment to
Shares relating to an Award hereunder shall not be inconsistent with
the terms of any such plan or agreement.
(c) In the event of a change in the Shares of the Company as
presently constituted, which is limited to a change of par value into
the same number of Shares with a different par value or without par
value, the Shares resulting from any such change shall be deemed to be
the Shares within the meaning of the Plan.
To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the
Board, whose determination shall be final, binding and conclusive.
Except as hereinbefore expressly provided in the Plan, any person
to whom an Award is granted shall have no rights by reason of any
subdivision or consolidation of stock of any class or the payment of
any stock dividend or any other increase or decrease in the number of
shares of stock of any class or by reason of any dissolution,
liquidation, reorganization, merger or consolidation or spinoff of
assets or stock of another corporation, and any issue by the Company
of shares of stock of any class, or securities convertible into shares
of stock of any class, shall not affect and no adjustment by reason
thereof shall be made with respect to, the number or exercise price of
Shares subject to an Award.
The grant of an Award pursuant to the Plan shall not affect in
any way the right or power of the Company to make adjustments,
reclassifications, Reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve,
liquidate or sell or transfer all or any part of its business or
assets.
SECTION 14. AMENDMENT OR TERMINATION OF THE PLAN
14.1 Amendment of the Plan. Notwithstanding anything contained in
the Plan to the contrary, all provisions of the Plan may at any time or
from time to time be modified or amended by the Board; provided, however,
that no Award at any time outstanding under the Plan may be modified,
unpaired or cancelled adversely to the holder of the Award without the
consent of such holder; and provided, further, that the Plan may not be
amended without approval by the holders of a majority of the Shares of the
Company represented and voted at a meeting of the stockholders (a) to
increase the maximum number of Shares subject to the Plan, (b) to
materially modify the requirements as to eligibility for participation in
the Plan, (c) to decrease the minimum exercise price for options, (d) to
otherwise materially increase the benefits accruing to persons to whom
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Awards may be made under the Plan, as amended, or (e) if such approval is
otherwise necessary, to comply with Rule 16b-3 promulgated under the
Exchange Act as amended, or to comply with any other applicable laws,
regulations or listing requirements, or to qualify for an exemption or
characterization that is deemed desirable by the Board.
14.2 Termination of the Plan. The Board may suspend or terminate the
Plan at any time, and such suspension or termination may be retroactive or
prospective. However, no Award may be granted on or after the tenth
anniversary of the adoption of the Plan. Termination of the Plan shall not
impair or affect any Award previously granted hereunder and the rights of
the holder of the Award shall remain in effect until the Award has been
exercised in its entirety or has expired or otherwise has been terminated
by the terms of such Award.
SECTION 15. AMENDMENTS AND ADJUSTMENTS TO AWARDS
The Committee may amend, modify or terminate any outstanding Award with the
Participant's consent at any time prior to payment or exercise in any manner not
inconsistent with the terms of the Plan, including, without limitation, (i) to
change the date or dates as of which (A) an option becomes exercisable or (B) a
performance-based Award is deemed earned, (ii) to amend the terms of any
outstanding Award to provide an exercise price per share which is higher or
lower than the then current exercise price per share of such outstanding Award
or (iii) to cancel an Award and grant a new Award in substitution therefor under
such different terms and conditions as it determines in its sole and complete
discretion to be appropriate including, but not limited to, having an exercise
price per share which may be higher or lower than the exercise price per share
of the cancelled Award. The Committee is also authorized to make adjustments in
the terms and conditions of, and the criteria included in, Awards in recognition
of unusual or nonrecurring events (including, without limitation, the events
described in Section 13 hereof affecting the Company, or the financial
statements of the Company or any Affiliate, or of changes in applicable laws,
regulations or accounting principles, whenever the Committee determines that
such adjustments are appropriate in order to prevent reduction or enlargement of
the benefits or potential benefits intended to be made available under the Plan.
Any provision of the Plan or any agreement regarding an Award to the contrary
notwithstanding, the Committee may cause any Award granted to be cancelled in
consideration of a cash payment or alternative Award made to the holder of such
cancelled Award equal in value to the Fair Market Value of such cancelled Award.
The determinations of value under this Section 15 shall be made by the Committee
in its sole discretion.
SECTION 16. GENERAL PROVISIONS
16.1 No Limit on Other Compensation Arrangements. Nothing contained
in the Plan shall prevent the Company from adopting or continuing in effect
other compensation arrangements, and such arrangements may be either
generally applicable or applicable only in specific cases.
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16.2 No Right to Employment. Nothing in the Plan or in any Award,
nor the grant of any Award, shall confer upon or be construed as giving any
recipient of an Award any right to remain in the employ of the Company.
Further, the Company may at any time dismiss a participant in the Plan from
employment, free from any liability or any claim under the Plan, unless
otherwise expressly provided in the Plan or in any Award agreement. No
employee, participant or other person shall have any claim to be granted
any Award, and there is no obligation for uniformity or treatment of
employees, participants or holders or beneficiaries of Awards.
16.3 GOVERNING LAW. THE VALIDITY, CONSTRUCTION AND EFFECT OF THE
PLAN AND ANY RULES AND REGULATIONS RELATING TO THE PLAN SHALL BE DETERMINED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.
16.4 Severability. If any provision of the Plan or any Award is or
becomes or is deemed to be invalid, illegal or unenforceable in any
jurisdiction or as to any person or Award, or would disqualify the Plan or
any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to applicable laws, or if
it cannot be construed or deemed amended without in the sole determination
of the Committee, materially altering the intent of the Plan or the Award,
such provision shall be stricken as to such jurisdiction, person or Award
and the remainder of the Plan and any such Award shall remain in full force
and effect.
16.5 No Fractional Shares. No fractional Shares shall be issued or
delivered pursuant to the Plan or any Award, and the Committee shall
determine whether cash, other securities or other property shall be paid or
transferred in lieu of any fractional Shares or whether such fractional
Shares or any rights thereto shall be cancelled, terminated or otherwise
eliminated.
16.6 Headings. Headings are given to the subsections of the Plan
solely as a convenience to facilitate reference. Such headings shall not
be deemed in any way material or relevant to the construction or
interpretation of the Plan or any provision thereof.
16.7 Effective Date. The Plan shall be effective as of the date of
its approval by the holders of a majority of the Shares of the Company
represented and voting at the next Annual Meeting of Stockholders. If the
Plan is not approved by the stockholders at the 1995 Annual Meeting, after
such date, the Plan and all Awards granted hereunder, if any, shall be
void.
16.8 Non-Transferability of Awards. Awards shall not be transferable
otherwise than by will or the laws of descent and distribution, and Awards
may be exercised, during the lifetime of the holder, only by the holder;
provided, however, that with the approval of the Committee, Awards other
than Incentive Stock Options may be transferred as
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directed under a qualified domestic relations order. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of an
Award contrary to the provisions hereof, or the levy of any execution,
attachment or similar process upon an Award shall be null and void and
without effect.
16.9 Date of a Grant. The granting of any option, right, award, etc.
under this Plan shall take place only upon the execution and delivery by
the Company and an employee of an appropriate agreement. Neither any
action taken by the Board nor anything contained in the Plan or in any
resolution adopted or to be adopted by the Board or the stockholders of the
Company shall constitute the granting of any award under the Plan.
SECTION 17. NAMED EXECUTIVE OFFICERS
17.1 Applicability of Section 17. The provisions of this Section 17
shall apply only to those executive officers (i) whose compensation is
required to be reported in the Company's proxy statement pursuant to Item
402(a)(3)(i) and (ii) of Regulation S-K under the general rules and
regulations under the Exchange Act, as amended, and (ii) whose total
compensation, including estimated Awards, is determined by the Committee to
possibly be subject to the limitations on deductions imposed by Section
162(m) of the Code ("Named Executive Officers"). In the event of any
inconsistencies between this Section 17 and the other Plan provisions as
they pertain to Named Executive Officers, the provisions of this Section 17
shall control.
17.2 Establishment of Performance Goals. Awards for Named Executive
Officers, other than stock options and Stock Appreciation Rights, shall be
based on the attainment of certain performance goals. No later than the
earlier of (i) ninety (90) days after the commencement of the applicable
fiscal year or such other award period as may be established by the
Committee ("Award Period") and (ii) the completion of twenty-five percent
(25%) of such Award Period, the Committee shall establish, in writing, the
performance goals applicable to each such Award for Named Executive
Officers. At the time the performance goals are established by the
Committee, their outcome must be substantially uncertain. In addition, the
performance goal must state, in terms of an objective formula or standard,
the method for computing the amount of compensation payable to the Named
Executive Officer if the goal is obtained. Such formula or standard shall
be sufficiently objective so that a third party with knowledge of the
relevant performance results could calculate the amount to be paid to the
subject Named Executive Officer. The material terms of the performance
goals for Named Executive Officers and the compensation payable thereunder
shall be submitted to the shareholders of the Company for their review and
approval. Shareholder approval shall be obtained for such performance
goals prior to any Award being paid to such Named Executive Officer. If
the shareholders do not approve such performance goals, no amount shall be
paid to such Named Executive Officer for such applicable Award Period under
the Plan. The disclosure of the "material terms" of a performance goal and
the compensation payable
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<PAGE>
thereunder shall be determined under the guidelines set forth under Section
162(m) of the Code, and the Treasury Regulations thereunder.
17.3 Components of Awards. Each Award of a Named Executive Officer,
other than stock options and Stock Appreciation Rights, shall be based on
performance goals which are sufficiently objective so that a third party
having knowledge of the relevant facts could determine whether the goal was
met. Except as provided in subsection 17.8 herein, performance measures
which may serve as determinants of Named Executive Officers Awards shall be
limited to the following measures: earnings per share; return on assets;
return on equity; return on capital; net profit after taxes; net profit
before taxes; economic value added; operating profits; stock price; market
share; and sales or expenses. Within ninety (90) days following the end of
each Award Period, the Committee shall certify in writing that the
performance goals, and any other material terms were satisfied.
Thereafter, Awards shall be made for each named Executive Officer as
determined by the Committee. The Awards may not vary from the
preestablished amount based on the level of achievement.
17.4 No Mid-Year Change in Awards. Except as provided in subsections
17.8 and 17.9 herein, each Named Executive Officers Awards shall be based
exclusively on the performance measures established by the Committee
pursuant to subsection 17.2.
17.5 No Partial Award Period Participation. A Named Executive
Officer who becomes eligible to participate in the Plan after performance
goals have been established in an Award Period pursuant to subsection 17.2
may not participate in the Plan prior to the next succeeding Award Period,
except with respect to Awards which are stock options or Stock Appreciation
Rights.
17.6 Performance Goals. Except as provided in subsection 17.8
herein, performance goals shall not be changed following their
establishment, and Named Executive Officers shall not receive any payout,
except with respect to Awards which are stock options or Stock Appreciation
Rights, when the minimum performance goals are not met or exceeded.
17.7 Individual Performance and Discretionary Adjustments. Except as
provided in subsection 17.8 herein, subjective evaluations of individual
performance of Named Executive Officers shall not be reflected in their
Awards, other than Awards which are stock options or Stock Appreciation
Rights. The payment of such Awards shall be entirely dependent upon the
attainment of the preestablished performance goals.
17.8 Amendments. No amendment of the Plan with respect to any Named
Executive Officer may be made which would (i) increase the maximum amount
that can be paid to any one Participant under the Plan, (ii) change the
specified performance goal for payment of Awards, or (iii) modify the
requirements as to eligibility for participation in the Plan, unless the
Company's shareholders have first approved such amendment in
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a manner which would permit the deduction under Section 162(m) of the Code
of such payment in the fiscal year it is paid. The Committee shall amend
this Section 17 and such other provisions as it deems appropriate, to cause
amounts payable to Named Executive Officers to satisfy the requirements of
Section 162(m) and the Treasury Regulations promulgated thereunder.
17.9 Stock Options and Stock Appreciation Rights. Notwithstanding
any provision of the Plan (including the provisions of this Section 17) to
the contrary, the amount of compensation which a Named Executive Officer
may receive with respect to stock options and Stock Appreciation Rights
which are granted hereunder is based solely on an increase in the value of
the applicable Shares after the date of grant of such Award. Thus, no
stock option may be granted hereunder to a Named Executive Officer with an
exercise price less than the Fair Market Value of Shares on the date of
grant. Furthermore, the maximum number of Shares (or cash equivalent
value) with respect to which stock options or Stock Appreciation Rights may
be granted hereunder to any Named Executive Officer during any calendar
year may not exceed 150,000 Shares, subject to adjustment as provided in
Section 13 hereunder.
17.10 Maximum Amount of Compensation. The maximum amount of compensa-
tion payable as an Award (other than an Award which is a stock option or
Stock Appreciation Right) to any Named Executive Officer during any
calendar year may not exceed $1,000,000.
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<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Tilman J. Fertitta, E.A. Jaksa, Jr., Steven L. Scheinthal and Paul S. West or
any of them, with power of substitution of each, are hereby authorized to
represent the undersigned at the Annual Meeting of Stockholders of Landry's
Seafood Restaurants, Inc., to be held at the Doubletree Hotel - Post Oak, 2001
Post Oak Boulevard, Houston, Texas 77057, on June 11, 1998, at 11:00 a.m., and
any adjournment or adjournments thereof, and to vote the number of shares which
the undersigned would be entitled to vote if personally present.
To vote in accordance with the Board of Directors' recommendations just sign
the reverse side; no boxes need be checked.
(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)
- -------------------------------------------------------------------------------
PLEASE DATE, SIGN AND MAIL YOUR
PROXY CARD BACK AS SOON AS POSSIBLE!
ANNUAL MEETING OF STOCKHOLDERS
LANDRY'S SEAFOOD RESTAURANTS, INC.
JUNE 11, 1998
<TABLE>
<CAPTION>
Please Detach and Mail in the Envelope Provided
[X] Please mark your
votes as in this
example.
<S> <C> <C> <C>
1. Election of FOR ABSTAIN 3. In their discretion, upon such other matters as
Directors [ ] [ ] properly may come before the meeting.
Nominees:: Tilman J. Fertitta
E.A. "Al" Jaksa, Jr. WHEN PROPERLY EXECUTED, THIS PROXY WILL BE VOTED AS
Steven L. Scheinthal DESIGNATED HEREON BY THE UNDERSIGNED. IF NO CHOICE IS
Paul S. West SPECIFIED, THE PROXY WILL BE VOTED "FOR" THE ELECTION
James E. Masucci OF ALL NOMINEES FOR DIRECTOR LISTED HEREON, AND "FOR"
Joe Max Taylor PROPOSAL 2. AS SET FORTH HEREON AND, ACCORDING TO THE
DISCRETION OF THE PROXY HOLDERS, ON ANY OTHER MATTERS
THAT MAY PROPERLY COME BEFORE THE MEETING OR ANY AND
ALL POSTPONEMENTS OR ADJOURNMENTS THEREOF.
For all nominees except as noted below: PLEASE DO NOT FOLD OR MUTILATE THIS CARD
[ ]___________________________________
NOTE: Please sign exactly as your name appears on this
2. FOR AGAINST ABSTAIN Amendments to 1995 Flexible Incentive card. On joint accounts each joint holder should
[ ] [ ] [ ] Plan sign. When signing as attorney, executor,
administrator, trustee, or guardian, please give your
full title as such. If a corporation, please sign in
full corporate name by President or other authorized
person. If a partnership, please sign in partnership
name by authorized person.
Please mark, sign, date and return this proxy card
promptly using the enclosed envelope.
SIGNATURE__________________________ DATE ________________, 1998 SIGNATURE ____________________________ DATE _______________, 1998
</TABLE>
