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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
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DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
MARCH 2, 1999
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LANDRY'S SEAFOOD RESTAURANTS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 000-22150 74-0405386
- -------------- ------------ -------------------
(STATE OF (COMMISSION (IRS EMPLOYEE
INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
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1400 POST OAK BLVD.
SUITE 1010
HOUSTON, TEXAS 77056
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE
(713) 850-1010
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ITEM 5. OTHER EVENTS.
On March 2, 1999, Landry's Seafood Restaurants, Inc. ("Landry's" or the
"Company") announced that it signed a definitive Agreement and Plan of Merger
(the "Merger Agreement") by and among Landry's, Consolidated Restaurant
Companies, Inc. ("CRC"), Landry's Acquiror Subsidiary, Inc. ("Acquiror"), and
the John R. Cracken Premarital Trust (the "Cracken Trust"), The Katemcy
Trust (the "Katemcy Trust"), E. Gene Street ("Street") and Stephen P. Hartnett
("Hartnett" and collectively with the Cracken Trust, the Katemcy Trust and
Street the "CRC Stockholders") providing for the merger of Acquiror with and
into CRC (the "Merger").
In connection with entering into the Merger Agreement, Landry's had
proposed entering into certain related transactions including a
proposed Standstill Agreement applicable to the CRC Stockholders with respect to
certain prohibited actions regarding Landry's following the Merger and their
receipt of equity of Landry's pursuant thereto; a Registration Rights Agreement
providing certain registration rights to the CRC Stockholders with respect to
their shares of Landry's common and preferred stock proposed to be issued to
them in the Merger; Employment Agreements with certain principals of CRC
regarding proposed positions with Landry's following the Merger; Non-Competition
Agreements with Messrs. Fertitta, Schunthal and West, the Chief Executive
Officer, Vice President and General Counsel, and Vice President and Chief
Financial Officer, respectively of Landry's in connection with their proposed
termination of certain positions with Landry's following the Merger; an Asset
Purchase Agreement relating to the proposed purchase from Landry's of certain
assets located primarily in Houston, Kemah and Galveston, Texas by Tilman J.
Fertitta, Chairman of the Board, President and Chief Executive Officer of
Landry's; and a Redemption Agreement relating to Landry's proposed purchase of
certain of its shares of common stock owned by an affiliate of Mr. Fertitta's
(collectively the "Transactions"). Landry's established a special committee of
independent Directors of the Board of Directors (the "Special Committee") to
review and determine whether the Merger and the Transactions were fair and in
the best interests of the stockholders of Landry's. Such Special Committee
retained independent counsel, an independent financial advisor and an
independent compensation consultant to advise the Special Committee with respect
to the Merger and the Transactions. Based on its analyses as well as, among
other things, the opinions and reports of its financial advisors and
compensation consultants that the Merger and the Transactions were fair to the
stockholders of Landry's from a financial point of view, the Special Committee
determined that the Merger Agreement and the related Transactions were fair to,
and in the best interest of, the Landry's stockholders.
As a result, the Special Committee recommended the Merger and the
Transactions to the full Board of Directors of Landry's. The Board of Directors,
based upon, among other things, the recommendation of the Special Committee and
the receipt of an opinion by its financial advisor that the Merger was fair to
Landry's and its stockholders from a financial point of view, approved the
Merger Agreement and the Transactions.
Subsequent to entering into the Merger Agreement, the reaction of the
market and Landry's stockholders caused each of the parties to reconsider the
proposed business combination. On March 7, 1999, the Special Committee and the
full Board of Directors determined that it was in the best interests of Landry's
and its stockholders not to proceed with the Merger and the Transactions, and
approved the execution of termination agreements pursuant to which, among other
things, the Merger Agreement and all related agreements and the Transactions
would be terminated.
The termination agreement relating to the merger (the "Termination
Agreement") provides, among other things, for (i) the termination of the Merger
Agreement and the related agreements as well as the termination and abandonment
of the Merger and the related Transactions; (ii) the reimbursement by Landry's
of $550,000 of CRC's reasonable expenses incurred in connection with CRC having
negotiated, entered into and terminated the Merger Agreement, the related
agreements and the Transactions, (iii) the payment by Landry's to CRC of a
termination fee of $6,450,000 in the event that, within nine months of the date
of the Termination Agreement, Landry's or any of its subsidiaries (x) entered
into or is subject to a tender or exchange offer, merger, consolidation or other
business combination in which a person or entity other than CRC acquires 20% or
more Landry's as a result of such transaction; (y) sells all or substantially
all of Landry's assets in a single transaction or in a series of related
transactions; or (z) as a result of such transaction or related transactions 10%
or more of Landry's capital stock is sold and there is a "Management Change"
such that any person who is an officer, director or affiliate of the recipient
of the Landry's capital stock became Chairman of the Board, Chief Executive
Officer, Chief Operating Officer or President of Landry's or persons related to
the recipient holds two seats on the Board of Directors of Landry's or a
majority of Landry's Board prior to the transaction ceases to be a majority;
(iv) the release by Landry's of claims against CRC and the release by CRC of
claims against Landry's, in each case arising out of the Merger Agreement, the
related agreements and the Transactions through the date of the Termination
Agreement; (v) the indemnification of CRC by Landry's and the indemnification of
Landry's by CRC, in each case for damages arising in connection with the Merger
Agreement, the related agreements and the Transactions or a breach by the other
party of any representation or warranty made by such other party in the
Termination Agreement; and (vi) the termination of the standstill provisions
applicable to CRC with respect to Landry's set forth in a Confidentiality
Agreement entered into by Landry's and CRC prior to the date of the Merger
Agreement.
The foregoing is a summary of certain provisions of the Termination
Agreement. Such summary is not complete and is qualified in its entirety by
reference to the Termination Agreement filed as Exhibit 10.1 hereto and
incorporated herein by reference.
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On March 2, 1999, Landry's issued a press release describing the original
transaction and on March 8, 1999 Landry's issued further press releases
announcing the termination of the Merger Agreement. As of March 8, 1999 there
were no further discussions among the parties and none were expected to be held.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits
10.1 Termination Agreement by and among CRC, Landry's, Acquiror, the Cracken
Trust, the Katemcy Trust, Street, and Hartnett
10.2 Press Release dated March 2, 1999.
10.3 Press Release dated March 8, 1999.
10.4 Press Release dated March 8, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LANDRY'S SEAFOOD RESTAURANTS, INC.
(Registrant)
By: /s/ Tilman J. Fertitta
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Tilman J. Fertitta,
Dated: March 8, 1999 President and Chief Executive Officer
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Exhibit 10.1
TERMINATION AGREEMENT
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This TERMINATION AGREEMENT, dated as of March 7, 1999 (this "Agreement"),
is entered into by and among Consolidated Restaurant Companies, Inc., a Delaware
corporation ("CRC"), Landry's Seafood Restaurants, Inc., a Delaware corporation
("Landry's"), Landry's Acquiror Subsidiary, Inc., a Delaware corporation and a
wholly owned subsidiary of Landry's ("Sub"), The John Cracken Premarital Trust,
a trust formed under the law of Texas (the "Cracken Trust"), The Katemcy Trust,
a trust formed under the laws of Texas (the "Harkey Trust" and, together with
the Cracken Trust, the "Trusts"), E. Gene Street, sole and separate property,
and Stephen P. Hartnett (such last four parties being hereinafter referred to
collectively as the "CRC Stockholders").
WITNESSETH
----------
WHEREAS, the parties hereto have entered into an Agreement and Plan of
Merger, dated as of March 2, 1999, the "Merger Agreement") pursuant to which Sub
would merge with and into CRC (the "Merger");
WHEREAS, in connection and concurrently with the Merger Agreement, Landry's
has entered into certain Guarantee Agreements by and between Landry's and each
of John D. Harkey, Jr. and John R.W. Cracken, sole and separate property (the
"Guarantee Agreement") and has contemplated entering into certain other
agreements, namely (i) a Standstill Agreement by and between Landry's and the
CRC Stockholders (the "Standstill Agreement"), (ii) a Registration Rights
Agreement by and between Landry's and the CRC Stockholders (the "Registration
Rights Agreement"), (iii) certain Employment Agreements by and between Landry's
and the following members and principals of the senior management of CRC:
Messrs. Cracken, Harkey and Street (the "Employment Agreements" and,
collectively with the Merger Agreement, the Standstill Agreement, the
Registration Rights Agreement, the Employment Agreements and the Guarantee
Agreements, the "Transaction Agreements");
WHEREAS, the parties hereto desire that the Merger and the other
transactions contemplated by the Transaction Agreements not be consummated and,
accordingly, that the Transaction Agreements be terminated;
WHEREAS, it is the intention of the parties hereto that the Transaction
Agreements shall be terminated and of no further force and effect and that they
shall have no further obligations or liabilities to each other with respect
thereto, except only as expressly set forth in this Agreement;
WHEREAS, concurrently herewith, Landry's is entering into a Termination
Agreement to terminate (i) an Asset Purchase and Sale Agreement by and among
Landry's and certain of its subsidiaries and Hospitality Entertainment, LLC
("Hospitality") (the "Asset Purchase Agreement"), (ii) certain Non-Competition
Agreements and Consulting and Non-Competition Agreements by and between Landry's
and the following members of its current senior
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management: Messrs. Fertitta, Scheinthal and West (the "Non-Compete
Agreements"), and (iii) a Redemption Agreement by and between Landry's and
Hospitality (the "Redemption Agreement" and, collectively with the Asset
Purchase Agreement and the Non-Compete Agreements, the "Ancillary Agreements").
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. Capitalized terms that are used but not defined herein
shall have the meaning ascribed to such terms in the Merger Agreement.
2. Termination. The parties hereto hereby agree that, pursuant to Section
8.01(a) of the Merger Agreement, the Merger Agreement is hereby terminated
effective immediately and each of the other Transaction Agreements (or, in
the case of each Transaction Agreement that has not yet been entered into,
the obligation of any party to enter into such Transaction Agreement) is
hereby terminated effective immediately. Notwithstanding anything to the
contrary set forth in the Transaction Agreements, each Transaction
Agreement shall be void and of no further force and effect and the parties
hereto shall have no further liabilities or obligations to each other
thereunder or with respect thereto, except only as expressly set forth
herein.
3. Expenses. Each of Landry's and Sub, on the one hand, and CRC and the
CRC Stockholders, on the other hand, shall bear its own costs and expenses,
fees and charges incurred in connection with this Agreement and the
Transaction Agreements; provided, however, that Landry's shall reimburse
CRC and the CRC Stockholders for (i) $50,000 for third-party copying costs
incurred by CRC upon the request of and in connection with Landry's due
diligence activities at the offices of CRC and (ii) $500,000 for a portion
of all other costs and expenses incurred by CRC in connection with this
Agreement and the Transaction Agreements, and the transactions contemplated
hereby and thereby, including, without limitation, the termination hereby
of the transactions contemplated by the Transaction Agreements (in
aggregate, the "Termination Cost Payment").
4. Subsequent Transactions.
(i) In the event that Landry's enters into, or Landry's capital stock
becomes subject to, a Subsequent Transaction on or prior to the date that
is nine months after the date of this Agreement, then Landry's shall
promptly pay to CRC the amount of $6,450,000 (the "Subsequent Transaction
Amount"), which the parties acknowledge is a reasonable estimate (albeit a
low estimate) as of the date of this Agreement of the unreimbursed costs
and expenses (including, without limitation, indirect and opportunity
costs) that
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CRC has incurred as a result of negotiating and entering into the Merger
Agreement and the other Transaction Agreements.
"Subsequent Transaction" shall mean any tender or exchange offer,
merger, consolidation or other business combination involving Landry's or
any of Landry's subsidiaries (whether or not Landry's or any of Landry's
subsidiaries is the surviving person in such transaction) or one or more
related sales or purchases of all or substantially all of the Acquiring
Company Assets; provided, that "Subsequent Transaction" shall not mean any
such transaction (or series of related transactions) in which (i) less than
20% of Landry's capital stock (on a fully diluted basis, taking into
account, without limitation, all contemplated conversions or exchanges
(whether or not then effective)) is involved and no Management Change (as
defined below) occurs in connection therewith or (ii) less than 10% of
Landry's capital stock (on a fully diluted basis, taking into account,
without limitation, all contemplated conversions or exchanges (whether or
not then effective)) is involved. A "Management Change" shall mean that
(x) a person who during the prior two years has served as an officer,
director, employee, partner or Affiliate of (or who has been in any manner
selected or nominated by) the recipient of Landry's capital stock or an
Affiliate thereof in the subject transaction (collectively, a "Related
Person") becomes either the Chairman of the Board, Chief Executive Officer,
President or Chief Operating Officer of Landry's within six months after
the consummation of the subject transaction and/or (y) two Related Persons
become members of the Board of Directors of Landry's within nine months of
the consummation of the subject transaction and/or (z) a majority of the
members of Landry's Board of Directors immediately prior to the
consummation of the subject transaction cease to constitute (other than due
to their death or disability) a majority of the members of such Board at
any time within one year of the subject transaction.
(ii) If Landry's fails to promptly pay the Subsequent Transaction
Amount (if so required by this Section) and, in order to obtain such
Subsequent Transaction Amount, CRC commences an action in arbitration that
results in a judgment against Landry's, Landry's shall pay to CRC the costs
and expenses (including attorneys' fees) of CRC in connection with such
action in arbitration, together with interest on the Subsequent Transaction
Amount at the rate of 10.0% per annum.
(iii) In support of the Subsequent Transaction Amount, the parties
acknowledge that, as a result of the termination of the Merger Agreement,
CRC has endured losses from, at least, each of the following: (i) damage to
CRC's current strong reputation as a consolidator in the casual-dining
restaurant
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segment, (ii) a loss of opportunities, for making further acquisitions in
calendar year 1999 in the casual-dining segment, both items (i) and (ii)
resulting from the (x) the stigma of a large, highly-publicized "failed"
transaction, (y) confusion among potential acquisition candidates,
investment bankers and brokers as to CRC's continuing status as a
consolidator, and (z) the substantial effort and capital committed during
the first several months of 1999 to close the transactions contemplated by
the Merger Agreement; and (iii) a loss of business in their 113
restaurants, caused in part by the potential departure of their most
talented and mobile employees among their work force of 7,800 resulting
from the uncertainty of those employees' future resulting from these
transactions. The parties further agree that the damages that would be
caused from the above to CRC are uncertain, but that the amount of
$6,450,000 is eminently reasonable, as contemplated by Brazen v. Bell
Atlantic Corp., 695 A.2d 43, 47-50 (Del. Supr. 1997). CRC acknowledges
that, absent breach by Landry's or Sub of its obligations hereunder, it
shall not seek reimbursement for any such damages other than through the
payment of the Termination Cost Payment and other than in connection with
any Subsequent Transaction (through the payment of the Subsequent
Transaction Amount).
5. Indemnification.
(i) CRC shall, pursuant to the terms of this Section 5, forever
indemnify, defend and hold harmless Landry's, its subsidiaries and any of
their respective directors, officers, stockholders, employees,
representatives, Affiliates, partners, attorneys, agents, successors and
assigns (collectively, the "Landry's Group") from and against all demands,
claims, actions or causes of action, assessments, losses, damages,
liabilities, costs and expenses including, without limitation, interest,
penalties and reasonable attorneys' fees and expenses, after deducting any
insurance proceeds received by the Landry's Group in connection therewith
(collectively "Landry's Group Damages"), asserted against, resulting to,
imposed upon or incurred by the Landry's Group or any member thereof,
directly or indirectly, by reason of or resulting from (i) any breach of
any representation, warranty, covenant or agreement of CRC contained in or
made pursuant to this Agreement or (ii) any claim by CRC (or its
subsidiaries or Affiliates) or by CRC's (or its subsidiaries' or its
Affiliates') past, present or future directors, officers, employees,
partners, creditors, stockholders, representatives, attorneys, agents,
successors and assigns (in each case in their capacities as such) arising
out of or relating to the transactions contemplated by the Transaction
Agreements and/or the Ancillary Agreements.
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(ii) Landry's shall, pursuant to the terms of this Section 5, forever
indemnify, defend and hold harmless CRC, its subsidiaries and any of their
respective directors, officers, stockholders, employees, representatives,
Affiliates, partners, attorneys, agents, successors and assigns
(collectively, the "CRC Group") from and against all demands, claims,
actions or causes of action, assessments, losses, damages, liabilities,
costs and expenses including, without limitation, interest, penalties and
reasonable attorneys' fees and expenses, after deducting any insurance
proceeds received by the CRC Group in connection therewith (collectively
"CRC Group Damages"), asserted against, resulting to, imposed upon or
incurred by the CRC Group or any member thereof, directly or indirectly, by
reason of or resulting from (i) any breach of any representation, warranty,
covenant or agreement of Landry's contained in or made pursuant to this
Agreement or (ii) any claim by Landry's (or its subsidiaries or Affiliates)
or by Landry's' (or its subsidiaries' or its Affiliates') past, present or
future directors, officers, employees, partners, creditors, stockholders,
representatives, attorneys, agents, successors and assigns (in each case in
their capacities as such) arising out of or relating to the transactions
contemplated by the Transaction Agreements and/or the Ancillary Agreements.
(iii) The obligations and liabilities of the parties with respect
to indemnification claims shall be subject to the following terms and
conditions:
(a) The indemnified party shall give the indemnifying party
prompt notice of any claim (which claim shall be made in good faith only),
which notice shall include, in reasonable detail, the facts and
circumstances surrounding the claim and the amount of damages actually
sustained therefrom, although the failure of the indemnified party to give
notice promptly shall not relieve the indemnifying party from its indemnity
obligations hereunder (except to the extent that the indemnified party is
able to prove that the amount of damages increased as a result of the
failure by the indemnified party to give the notice promptly);
(b) The indemnified party shall provide the indemnifying party
with notice of any proposed settlement or compromise of such claim (as far
in advance of the actual settlement or compromise of the claim as is
reasonably practicable); provided, that if such claim is settled without
the indemnifying party's consent (which consent shall not be unreasonably
withheld), the indemnified party's Group shall be deemed to have waived all
rights hereunder for indemnification arising out of such claim;
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(c) As soon as practicable after the delivery of notice of the
claim, the indemnified party shall provide the indemnifying party with its
actual damages, supported by receipts and other reasonably required
documentation. The indemnifying party shall have 30 days from receipt of
the indemnified party's list of damages to respond to the indemnified party
with acceptance of the proposed damages amount or a counter-proposal
relating thereto; provided, that if the indemnifying party does not respond
within such 30 days, the indemnified party shall be entitled to have its
proposed damages paid by the indemnified party. In cases where the parties
otherwise agree on the damages, the indemnified party shall be entitled to
have its proposed damages paid by the indemnifying party. If the
indemnifying party submits a counter-proposal regarding damages that is not
accepted by the indemnified party within 15 days following the indemnified
party's receipt of such counter-proposal, either or both of the indemnified
party or the indemnifying party may submit such matter to arbitration under
the provisions of Section 9 hereof. After receiving any ruling by the
arbitrators made pursuant to Section 9 hereof, the indemnifying party shall
be liable for the amount determined by the arbitrators.
(iv) Any indemnifying party hereunder shall be required to make
payments to any indemnified party hereunder, in accordance with the
foregoing provisions, whether or not the matter requiring indemnification
has been concluded by such time (i.e., payments shall be made from time to
time as the related damages are incurred).
(v) If the indemnification provided for in this Section 5 is held by a
court of competent jurisdiction by final, non-appealable judgment to be
unavailable to an indemnified party with respect to any loss, liability,
claim, damage, or expense referred to therein, then the indemnifying party,
in lieu of indemnifying such indemnified party hereunder, shall contribute
to the amount paid or payable by such indemnified party as a result of such
loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the
one hand and of the indemnified party on the other in connection with the
matters that resulted in such loss, liability, claim, damage, or expense as
well as any other relevant equitable considerations.
6. Releases.
(i) In consideration of the payment and benefits provided in this
Agreement and other good and valuable consideration, the adequacy of which
is hereby
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acknowledged, each of CRC and the CRC Stockholders hereby voluntarily,
knowingly, willingly, irrevocably and unconditionally releases each of
Landry's and Sub, together with each of their respective subsidiaries and
Affiliates, and each of their respective officers, directors, employees,
representatives, attorneys and agents and each of their (and their
subsidiaries' and Affiliates') respective predecessors, successors, and
assigns (collectively, the "Releasees"), from any and all charges,
complaints, claims, liabilities, obligations, losses, damages, promises,
agreements, causes of action, rights, costs, debts and expenses of any
nature whatsoever, known or unknown (other than with respect to the
obligations of Landry's and Sub expressly set forth in this Agreement),
against them which CRC and the CRC Stockholders and their respective
subsidiaries, Affiliates, officers, directors, employees, stockholders,
representatives, attorneys, agents, partners, trustees (and, in the case of
the Trusts, beneficiaries), predecessors, successors and assigns ever had,
now have, or hereafter can, shall, or may have (in each case in their
capacity as such, whether directly, indirectly, derivatively, or otherwise)
by reason of any matter, fact, or cause whatsoever arising with respect to
the Transaction Agreements, the Ancillary Agreements or otherwise from the
beginning of time to the date of this Agreement. By signing this Agreement,
CRC and the CRC Stockholders admit that they have read this Agreement,
understand it is a legally binding agreement and that they were advised to
review it with legal counsel of their choice.
(ii) In consideration of the benefits provided in this Agreement and
for other good and valuable consideration, the adequacy of which is hereby
acknowledged, each of Landry's and Sub hereby voluntarily, willingly,
irrevocably, and unconditionally releases each of CRC and the CRC
Stockholders, together with CRC's subsidiaries and Affiliates and each of
their respective Releasees, from any and all charges, complaints, claims,
liabilities, obligations, losses, damages, promises, agreements, causes of
action, rights, costs, debts and expenses of any nature whatsoever, known
or unknown (other than with respect to the obligations of CRC and the CRC
Stockholders expressly set forth in this Agreement) against them which
Landry's and Sub and their respective subsidiaries, Affiliates, officers,
directors, employees, stockholders, representatives, attorneys, agents,
partners, trustees (and in the case of any trusts, beneficiaries)
predecessors, successors and assigns ever had, now have, or hereafter can,
shall, or may have (in each case in their capacity as such, whether
directly, indirectly, derivatively, or otherwise) by reason of any matter,
fact, or cause whatsoever arising with respect to the Transaction
Agreements, the Ancillary Agreements or otherwise from the beginning of
time to the date of this Agreement. By signing this Agreement, Landry's
and Sub admit
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that they have read this Agreement, understand it is a legally binding
agreement and that they were advised to review it with legal counsel of
their choice.
(iii) The parties agree that, except as set forth below, the terms
of the Mutual Confidentiality Agreement dated February 16, 1999 between CRC
and Landry's (the "Confidentiality Letter") shall survive the releases set
forth above; provided that the obligations of CRC and CRC's Representatives
set forth in the last paragraph on page 3 of the Confidentiality Letter
(which paragraph carries over to the next page of the Confidentiality
Letter) are hereby terminated.
7. Press Release. CRC does not object to the release by Landry's of the
statement attached hereto as Exhibit A.
8. Mutual Non-Disparagement. Each of CRC, the CRC Stockholders and
Landry's agrees that it shall not (and each of CRC and Landry's agrees that
it shall cause its respective subsidiaries, Affiliates, directors,
officers, representatives, attorneys and agents to not) disparage the
business reputation of Landry's and its management (in the case of CRC) or
CRC and its management (in the case of Landry's).
9. Governing Law.
(i) THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO
THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
(ii) Any controversy or claim (including, without limitation, whether
any controversy or claim is subject to arbitration) among two or more of
the parties hereto arising out of or relating to this Agreement, or the
breach thereof, shall be settled by binding arbitration administered by the
American Arbitration Association (the "AAA") under its Commercial
Arbitration Rules ("Rules"), and shall be held in Dallas, Texas. Any
dispute submitted for arbitration shall be referred to a panel of three
arbitrators. The party or parties submitting ("Submitting Party") the
intention to arbitrate (the "Submission") shall nominate one arbitrator.
Within 30 days of receipt of the Submission, the party or parties receiving
the Submission ("Answering Party") shall nominate one arbitrator. If the
Answering Party fails to timely nominate an arbitrator, then the second
arbitrator shall be appointed by the AAA in accordance with the Rules. If
the arbitrator chosen by the Submitting Party and the arbitrator chosen by
or selected for the Answering Party can agree upon a neutral arbitrator
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within fifteen (15) days of the choice or selection of the Answering
Party's arbitrator, then such individual shall serve as the third
arbitrator. If no such agreement is reached, a third neutral arbitrator
shall be appointed by the AAA in accordance with the Rules. The parties
agree that they shall consent to an expedited proceeding under the Rules,
to the full extent the AAA can accommodate such a request. The ruling of
the arbitrators shall be binding and conclusive upon all parties hereto and
any other Person with an interest in the matter. The arbitration provision
set forth in this Section shall be a complete defense to any suit, action
or other proceeding instituted in any court by any party hereto regarding
any controversy or claim (including, without limitation, whether any
controversy or claim is subject to arbitration) arising out of or relating
to this Agreement, or the breach thereof; provided, however, that (i) any
of the parties may request a Texas State District Court in Dallas County,
Texas, to provide interim injunctive relief in aid of arbitration hereunder
or to prevent a violation of this Agreement pending arbitration hereunder
(and any such request shall not be deemed a waiver of the obligations to
arbitrate set forth in this Section), (ii) any ruling on the award
rendered by the arbitrators may be entered as a final judgment in (and only
in) a Texas State District Court in Dallas County, Texas (and each of the
parties hereto irrevocably submits to the jurisdiction of such court for
such purposes) and (iii) application may be made by a party to any court of
competent jurisdiction wherever situated for enforcement of any such final
judgment and the entry of whatever orders are necessary for such
enforcement.
(iii) In any proceeding with respect hereto, all direct,
reasonable costs and expenses (including, without limitation, AAA
administration fees and arbitrator fees) incurred by the parties to the
proceeding shall, at the conclusion of the proceeding, be paid by the party
incurring same.
10. Exclusive Agreement; Amendment. This Agreement supersedes all prior
agreements (whether written or oral) among the parties hereto with respect
to the subject matter hereof, and is intended as a complete and exclusive
statement of the terms of the agreement among the parties hereto with
respect thereto. This Agreement may not be modified, amended, altered or
supplemented except by a written instrument executed and delivered by each
of the parties hereto.
SIGNATURE PAGE FOLLOWS.
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IN WITNESS WHEREOF, this Agreement shall become effective as of the date
first written above once this Agreement has been duly executed and delivered by
the undersigned and the Transaction Cost Payment has been paid in full.
LANDRY'S SEAFOOD RESTAURANTS, INC.
By:__________________________________________
Name:
Title:
LANDRY'S ACQUIROR SUBSIDIARY, INC.
By:__________________________________________
Name:
Title:
THE JOHN CRACKEN PREMARITAL TRUST
By:__________________________________________
Michael D. Ginsberg
Trustee
THE KATEMCY TRUST
By:__________________________________________
John D. Harkey, Jr.
Trustee
E. GENE STREET, SOLE AND SEPARATE PROPERTY
_____________________________________________
E. Gene Street, Sole and Separate Property
STEPHEN P. HARTNETT
_____________________________________________
Stephen P. Hartnett
CONSOLIDATED RESTAURANT COMPANIES, INC.
By:__________________________________________
Title:
<PAGE>
EXHIBIT 10.2
FOR IMMEDIATE RELEASE
- ---------------------
LANDRY'S SEAFOOD TO ACQUIRE
CONSOLIDATED RESTAURANT COMPANIES
HOUSTON (March 2, 1999) - Landry's Seafood Restaurants, Inc. (Nasdaq: LDRY)
today announced it has signed a definitive agreement to acquire all of the
common stock of Consolidated Restaurant Companies, Inc. (CRC), a Dallas-based
privately held company. CRC owns or franchises more than 150 casual-dining
facilities in 21 states and Canada. The combined company will have 291
restaurants in 30 states and $550 million in pro-forma sales.
The merger will create one of the nation's leading multi-unit restaurant
chains, bringing under one roof such well-known casual and full-service dining
concepts as Joe's Crab Shack, Landry's Seafood, The Crab House, El Chico, Good
Eats, Cantina Laredo, Cool River and Spaghetti Warehouse.
According to the terms of the merger agreement, Landry's will issue
approximately $84 million in a combination of additional shares of common stock
and a new Series A Contingent Dividend Preferred Stock, and will assume
approximately $80 million of CRC's net debt.
Tilman J. Fertitta, chairman of the board of Landry's Seafood, said, "This
transaction significantly broadens our portfolio of restaurant concepts and
diversifies our revenue stream. We will expand from our seafood concept base to
encompass the Italian, Mexican and American Grill platforms. Landry's will be a
larger company with a stronger and more stable cash flow. Most importantly, the
transaction will enhance our position as a national powerhouse, well-positioned
to compete with the larger national chains in the full-service and casual
dining-segments of the restaurant business."
E. Gene Street, president and chief executive officer of CRC and founder of
the Black-eyed Pea restaurants and other successful casual-dining restaurant
concepts, will become chief executive officer of the combined company. In
January 1999, Mr. Street won the prestigious Multi-Concept Operator of the Year
Award from Restaurant Business magazine. Wallace A. Jones, president and chief
executive officer of El Chico/Spaghetti Warehouse, will become president and
chief operating officer of the combined company. Mr. Fertitta will remain
chairman of the board of directors.
<PAGE>
"We have put in place a plan to regain revenue growth and to improve
margins here at Landry's. I am convinced that Gene and his team are the right
individuals to help us build on this plan and to continue to grow this company,"
Mr. Fertitta concluded.
Concurrent with the transaction, Mr. Fertitta will purchase from the
combined company certain non-core assets located in primarily in Kemah and
Galveston County, Texas.
The boards of directors of both companies have unanimously approved the
agreement. The transaction is subject to customary regulatory approval. The
parties expect the transaction to close by the end of the first quarter of 1999.
After the merger, three representatives of CRC, Mr. John R.W. Cracken, Mr.
John D. Harkey, Jr., and Mr. Street, will be appointed to the Landry's board,
and the two current independent directors will remain. Four additional
independent directors will be selected to sit on the Landry's board. At that
time, the Landry's board will consist of ten directors: six independent, three
representatives of CRC, and Mr. Fertitta as chairman.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These statements are
based on current plans and expectations of Landry's, and involve risks and
uncertainties that could cause actual future activities and results of
operations to be materially different from those set forth in the forward-
looking statements. Important factors that could cause actual results to differ
include, among others, risks associated with the absence of a combined operating
history, Landry's acquisition strategy, the integration of acquisitions, the
availability of additional capital, variations in stock prices and interest
rates, competition and fluctuations in quarterly operating results and other
risks and uncertainties described in Landry's filings with the Securities and
Exchange Commission. Landry's expressly disclaims any intent or obligation to
update these forward-looking statements.
# # #
Contact:
- --------
Tilman J. Fertitta
President & CEO
Landry's Seafood
713-850-1010
<PAGE>
EXHIBIT 10.3
LANDRY'S SEAFOOD RESTAURANTS, INC. AND
CONSOLIDATED RESTAURANT COMPANIES, INC.
AGREE TO END MERGER
Houston, Texas
March 8, 1999
Houston, Texas --- (NASDAQ - "LDRY") Landry's Seafood Restaurants, Inc.
("Landry's") and Consolidated Restaurant Companies, Inc. ("CRC") announced today
their agreement to end plans to merge the two companies and all related
transactions.
Tilman J. Fertitta, Chairman of the Board, President and Chief Executive
Officer of Landry's stated that after announcing the proposed merger on March 2,
1999, the reaction of the market and Landry's stockholders caused each of the
parties to reconsider the proposed business combination.
Mr. Fertitta stated he intends to continue discussions with CRC to explore
whether a possible transaction on different terms might be structured that might
be advantageous to Landry's and its stockholders.
Landry's decision to terminate the proposed business combination was
approved by the Special Committee of independent directors that had been
previously formed to consider the fairness of the proposed merger and all
related transactions and by the full Board of Directors.
This press release contains forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. These statements are
based on current plans and expectations of Landry's and involve risks and
uncertainties that could cause actual future activities and results of
operations to be materially different from those set forth in the forward-
looking statements. Important factors that could cause actual results to differ
include, among others, the fact that there is no assurance that any restructured
transaction will be consummated, the risks associated with the ability of
Landry's to continue its expansion strategy, changes in cost of food, labor and
employee benefits, the ability of Landry's to acquire prime locations, general
market conditions, competition and pricing, all of which involves risks and
uncertainties that could cause actual future activities and results of
operations to be materially different from those set forth in the forward-
looking statements. Landry's expressly disclaims any intent or obligation to
update these forward-looking statements.
For more information, contact Tilman J. Fertitta, Chairman of the Board,
President and Chief Executive Officer of Landry's Seafood Restaurants, Inc. at
(713) 850-1010.
<PAGE>
EXHIBIT 10.4
LANDRY'S SEAFOOD RESTAURANTS, INC. CALLS OFF
MERGER WITH CONSOLIDATED RESTAURANT COMPANIES, INC.
Houston, Texas
March 8, 1999
Houston, Texas--(NASDAQ-"LDRY") Landry's Seafood Restaurants, Inc.
("Landry's") announced today all further discussions had ended with Consolidated
Restaurant Companies, Inc. regarding a proposed merger as well as all other
related transactions.
Tilman J. Fertitta, Chairman of the Board, President and Chief Executive
Officer of Landry's stated that after announcing the proposed merger on March 2,
1999, the reaction of the market and Landry's stockholders caused each of the
parties to reconsider the proposed business combination.
Mr. Fertitta stated that "I have always tried to represent our stockholders
in doing what was best from the long term future of Landry's and this at present
seems to be to refocus on Landry's core business, improve profitability and try
to enhance stockholder values." Mr. Fertitta continued, "I have always tried to
maximize the value of the Company for our stockholders and while I believed
there were positives to be achieved through this merger, our stockholders have
spoken and we have listened. We have some very positive and exciting things
going on at Landry's. We have commenced a national marketing campaign for our
Joe's Crab Shack restaurants and are very encouraged by the initial results."
"Over the last few days, I have come to realize how much Landry's, Landry's
stockholders, and Landry's employees mean to me and how important the creation,
running the day-to-day operations, and growth of this Company into one of the
most successful restaurant chains has been a part of my life," Mr. Fertitta
concluded.
Landry's operates over 146 restaurants in 30 states under the names Landry's
Seafood House, Joe's Crab Shack, The Crab House, Willie G's, Rusty Pelican,
Cadillac Bar and the Kemah Boardwalk with 1998 sales of approximately $400
million and approximately 15 restaurant openings slated for 1999.
This press release contains forward-looking statements within the meaning of
the Private Securities Reform Act of 1995. These statements are based on
current plans and expectations of Landry's and involve risks and uncertainties
that could cause actual future activities and result of operations to be
materially different from those set forth in the forward-looking statements.
Important factors that could cause actual results to differ include, among
others, the risks associated with the ability of Landry's to continue its
expansion strategy, changes in cost of food, labor and employee benefits, the
ability of Landry's to acquire prime locations, general market conditions,
competition and pricing, all of which involves risks and uncertainties that
could cause actual future activities and result of operations to be materially
different from those set forth in the forward-looking statements.
For more information, contact Tilman J. Fertitta, Chairman of the Board,
President and Chief Executive Officer of Landry's Seafood Restaurants, Inc. at
713-850-1010.
