<PAGE>
As filed with the Securities and Exchange Commission on March 6, 2000
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Form S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
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LANDRY'S SEAFOOD RESTAURANTS, INC.
(Exact name of registrant as specified in its charter)
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Delaware 5812 74-0405386
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction Classification Code Number)Identification No.)
of incorporation or
organization)
1400 Post Oak Blvd.
Suite 1010
Houston, Texas 77056
(713) 850-1010
(Address, including zip code and telephone number, including area code, of
registrant's principal executive offices)
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Steven L. Scheinthal
Vice President Administration,
General Counsel and Secretary
1400 Post Oak Blvd.
Suite 1010
Houston, Texas 77056
(713) 850-1010
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Paul T. Schnell, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036-6522
(212) 735-3000
Approximate date of commencement of proposed sale to the public: as soon as
practicable after this Registration Statement is declared effective in
connection with the merger described in the Proxy Statement/Prospectus forming
a part of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Title of Each Class of Proposed Maximum Proposed Maximum Amount of
Securities To Be Amount To Be Offering Price Per Aggregate Offering Registration Fee
Registered Registered (1) Unit Price (2) (3)
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<S> <C> <C> <C> <C>
Common Stock, par value
$0.01 per share........ 10,131,472 n/a $58,142,600 $15,349.65
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</TABLE>
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(1) The number of shares of the Registrant's common stock issuable in
connection with the merger in exchange for shares of common stock of
Rainforest Cafe, Inc. ("Rainforest") is based on the sum of (x) the product
of (i) 23,300,000 (an estimate of the aggregate number of shares of
Rainforest common stock outstanding prior to the merger), (ii) 0.65 (based
on an exchange for 65% of the number of shares of stock determined in (i)
above) and (iii) 0.5816 (based on an exchange ratio of 0.5816th of a share
of Registrant's common stock for each share of Rainforest common stock) and
(y) the product of (i) 3,500,000 (an estimate of the number of shares of
Rainforest common stock subject to employee options and other employee
plans outstanding prior to the merger), (ii) 0.65 and (iii) 0.5816.
(2) Pursuant to Rules 457(f)(1) and 457(c) under the Securities Act of 1933, as
amended, (the "Securities Act"), the registration fee has been calculated
based on a price of $4.00 per share of Rainforest common stock (the average
of the high and low price per share of Rainforest common stock on the
NASDAQ National Market on March 2, 2000) and an estimate of the maximum
number of shares of Rainforest common stock that may be exchanged
(26,800,000) less an estimate of the aggregate cash amount payable by the
Registrant to holders of Rainforest common stock in the transaction
($49,057,400). Although this Registration Statement also constitutes the
Proxy Statement for Rainforest for purposes of the Rainforest special
meeting, pursuant to Rule 14a-6(j) of the Securities Exchange Act of 1934,
as amended, (the "Exchange Act"), the fee which would otherwise be required
under Rule 14a-6(i) of the Exchange Act need not be paid.
(3) This fee has been calculated pursuant to Section 6(b) of the Securities
Act, as the product of 0.000264 and $58,142,600.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
[LOGO OF RAINFOREST CAFE, INC.] [LOGO OF LANDRY'S SEAFOOD RESTAURANTS, INC.]
Special Meeting of Shareholders of Rainforest Cafe, Inc.
YOUR VOTE IS VERY IMPORTANT
Dear Rainforest Shareholders:
The Board of Directors of Rainforest Cafe, Inc. and the Board of Directors
of Landry's Seafood Restaurants, Inc. have approved a transaction whereby
Rainforest will merge with and into a wholly owned subsidiary of Landry's. The
Boards of Rainforest and Landry's believe that the combination of Rainforest
and Landry's will create a stronger, more diverse restaurant company. The size,
strength and experience of the combined company would represent an opportunity
for enhanced valuation of the existing business brands. Additionally, the
increased cash flow resulting from the merger will provide the shareholders of
the combined company with a new degree of diversification and could supply the
combined company with greater resources to pursue future growth opportunities.
In the merger, each share of Rainforest common stock outstanding immediately
prior to the merger will be converted and exchanged, pursuant to an election by
each Rainforest shareholder, into 0.5816th of a share of Landry's common stock
or the right to receive $5.23 in cash (in each case, subject to proration). The
Rainforest common stock that will be converted into Landry's common stock will
equal, as nearly as practicable, 65% of all outstanding shares of Rainforest
common stock, and the Rainforest common stock that will be converted into cash
will equal, as nearly as practicable, 35% of all outstanding shares of
Rainforest common stock. If Rainforest shareholders, in the aggregate, elect to
receive stock for more than 65% of their shares or cash for more than 35% of
their shares, Rainforest shareholders electing such oversubscribed
consideration will receive, on a pro rata basis, the alternative consideration
for the excess.
The Board of Directors of Rainforest has unanimously approved the merger
agreement and the merger and believes that the merger agreement and the merger
are fair to you and in your best interest and recommends that you vote FOR the
approval of the merger proposal and the adjournment proposal described herein.
The merger cannot be completed unless holders of a majority of shares of
Rainforest common stock approve the merger proposal. Rainforest has scheduled a
special meeting of its shareholders to vote on the merger proposal. You are
cordially invited to attend the special meeting of Rainforest shareholders.
Whether or not you plan to attend this meeting, IT IS IMPORTANT THAT YOUR
SHARES BE VOTED. Please take the time to vote electronically via the Internet,
by telephone or by completing and mailing the enclosed proxy card to
Rainforest. If you submit a proxy (through any of the foregoing means) without
indicating how you want to vote, your proxy will be counted as a vote in favor
of the merger proposal and the adjournment proposal. If your shares are held in
"street name," you must instruct your broker on how to vote your shares. If you
fail to vote or fail to instruct your broker to vote your shares, the effect
will be the same as a vote against the merger proposal. The date, time and
place of the special meeting of Rainforest shareholders is as follows:
[ Date ]
[ Time ]
[ Hotel and Hotel's Street Address ]
[ City / State / Zip ]
This Proxy Statement/Prospectus provides you with detailed information about
the merger agreement and the proposed merger. In addition, you may obtain
information about our companies from documents that we have filed with the
Securities and Exchange Commission. We encourage you to read this entire
document carefully.
[/s/ Kenneth W. Brimmer ] [/s/ Tilman J. Fertitta ]
Kenneth W. Brimmer Tilman J. Fertitta
President and Director Chairman of the Board,
Rainforest Cafe, Inc. Chief Executive Officer and
President
Landry's Seafood Restaurants, Inc.
Shareholders are urged to consider those matters set forth in "Risk Factors"
beginning on page [ ] of this Proxy Statement/Prospectus. Neither the
United States Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this Proxy Statement/Prospectus. Any representation
to the contrary is a criminal offense.
This Proxy Statement/Prospectus is dated [ ], and is first being mailed
to Rainforest shareholders on or about [ ].
<PAGE>
RAINFOREST CAFE, INC.
720 South Fifth Street
Hopkins, Minnesota 55343
(612) 945-5400
NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS
To Be Held on , 2000
To the Shareholders of Rainforest Cafe, Inc.:
A special meeting of shareholders of Rainforest Cafe, Inc., a Minnesota
corporation, will be held on , 2000, at :00 .m. (local time) at
for the following purposes:
1. To consider and vote upon the Agreement and Plan of Merger (the "Merger
Agreement"), dated as of February 9, 2000, by and among Landry's Seafood
Restaurants, Inc., a Delaware corporation, LSR Acquisition Corp., a
Delaware corporation and a wholly owned subsidiary of Landry's, and
Rainforest, a copy of which is attached as Annex A to the accompanying
Proxy Statement/Prospectus, and the merger contemplated thereby. This
proposal is referred to in the accompanying Proxy Statement/Prospectus
as the "merger proposal."
2. To adjourn the special meeting, if necessary, to permit further
solicitation of proxies if there are not sufficient votes to approve the
merger at the originally scheduled time of the special meeting. This
proposal is referred to in the accompanying Proxy Statement/Prospectus
as the "adjournment proposal."
Approval of the merger proposal requires the affirmative vote of the holders
of at least a majority of the votes entitled to be cast by holders of
Rainforest common stock. Approval of the adjournment proposal requires the
affirmative vote of the holders of at least a majority of the shares of
Rainforest common stock present (by proxy or voting ballot) at the special
meeting. Shareholders of record of Rainforest at the close of business on
, 2000 are entitled to notice of, and to vote at, the special
meeting and at any and all adjournments or postponements thereof.
Under Minnesota law, shareholders of Rainforest are eligible to exercise
dissenters' rights in connection with the merger. A shareholder that does not
vote in favor of the merger proposal and complies with other necessary
procedural requirements will have the right to dissent from the merger and to
seek appraisal of the fair value of shares if the merger is completed. For a
description of dissenters' rights and the procedures to be followed to assert
them, shareholders should review Sections 302A.471 and 302A.473 of the
Minnesota Business Corporation Act. A copy of these provisions is included as
Annex C to the accompanying Proxy Statement/Prospectus.
THE RAINFOREST BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE FOR THE MERGER PROPOSAL AND THE ADJOURNMENT PROPOSAL.
By Order of the Board of Directors
[SIGNATURE]
Kenneth W. Brimmer
Secretary
Shareholders are urged, whether or not they plan to attend the special
meeting, to sign, date and mail the enclosed proxy card in the postage-paid
envelope provided or, alternatively, to vote electronically via the Internet or
by telephone. If a shareholder who has returned a proxy or has voted via the
Internet or by telephone attends the special meeting in person, such
shareholder may revoke the proxy and vote in person on all matters submitted at
the special meeting.
<PAGE>
REFERENCES TO ADDITIONAL INFORMATION
This document incorporates important business and financial information
about Rainforest and Landry's from documents filed with the Securities and
Exchange Commission ("SEC") that have not been included in or delivered with
this document. This information is available to you without charge upon your
written or oral request. You can obtain documents incorporated by reference in
this document by requesting them in writing or by telephone from the
appropriate company at the following addresses:
Landry's Seafood Restaurants, Inc. Rainforest Cafe, Inc.
1400 Post Oak Boulevard, Suite 1010 720 South Fifth Street
Houston, Texas 77056 Hopkins, Minnesota 55343
(713) 850-1010 (612) 945-5400
Please request documents by [five business days prior to the Rainforest
special meeting], 2000. If you request any incorporated documents, we will mail
the documents you request by first class mail, or another equally prompt means,
by the next business day after we receive your request.
See "WHERE YOU CAN FIND MORE INFORMATION" for more information about the
documents referred to in this Proxy Statement/Prospectus.
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
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<S> <C>
QUESTIONS AND ANSWERS ABOUT THE MERGER.................................... 1
SUMMARY................................................................... 5
The Companies........................................................... 5
Reasons for the Merger.................................................. 5
Board Recommendation to Rainforest Shareholders......................... 6
The Meeting............................................................. 6
Shareholder Vote Required to Approve the Merger......................... 6
Risk Factors............................................................ 6
The Merger.............................................................. 6
Comparative Market Price Information.................................... 9
Listing and Trading of Landry's Common Stock............................ 9
SELECTED HISTORICAL FINANCIAL DATA FOR LANDRY'S........................... 10
SELECTED HISTORICAL FINANCIAL DATA FOR RAINFOREST......................... 11
SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL DATA...................... 12
COMPARATIVE PER SHARE MARKET PRICE........................................ 13
COMPARATIVE PER SHARE DATA................................................ 14
RISK FACTORS.............................................................. 15
THE RAINFOREST SPECIAL MEETING............................................ 19
Date, Time and Place of the Special Meeting............................. 19
Matters for Consideration............................................... 19
Record Date; Quorum..................................................... 19
Votes Required.......................................................... 19
Share Ownership of Management and Certain Shareholders.................. 19
Voting and Revocation of Proxies........................................ 20
Solicitation of Proxies................................................. 21
THE MERGER................................................................ 22
Background of the Transaction........................................... 22
Reasons for the Merger.................................................. 24
Rainforest's Reason for the Merger and Board Recommendation............. 25
Recommendation of the Rainforest Board of Directors..................... 27
Opinion of Financial Advisor to Rainforest.............................. 27
Interests of Officers and Directors in the Transaction.................. 33
Completion and Effectiveness of the Merger.............................. 34
Structure of the Merger and Conversion of Rainforest Common Stock....... 34
Certain Federal Income Tax Considerations............................... 35
Accounting Treatment.................................................... 37
Regulatory Approvals.................................................... 37
Restrictions on Sales of Shares of Rainforest Common Stock by Affiliates
of Landry's and Rainforest............................................. 38
Listing on the New York Stock Exchange of Landry's Common Stock to be
Issued in the Merger................................................... 38
Delisting and Deregistration of Rainforest Common Stock after the
Merger................................................................. 38
Dissenters' Rights...................................................... 38
THE MERGER AGREEMENT...................................................... 41
Structure of the Merger................................................. 41
The Effective Time...................................................... 41
Merger Consideration.................................................... 41
Election Procedure; Issuance of Landry's Common Stock and Payment of
Cash................................................................... 41
</TABLE>
i
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<TABLE>
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Page
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<S> <C>
Treatment of Stock Options............................................. 43
Dissenting Shares...................................................... 43
Representations and Warranties......................................... 43
Certain Covenants of Rainforest........................................ 44
No Solicitation........................................................ 45
Certain Covenants of Landry's.......................................... 46
Conditions to the Merger............................................... 46
Termination and Abandonment............................................ 47
Termination Fee........................................................ 48
Amendment and Modification; Expenses................................... 48
THE STOCKHOLDER AGREEMENTS............................................... 49
THE EMPLOYEE TERMINATION, CONSULTING AND NON-COMPETITION AGREEMENTS...... 50
BENEFICIAL OWNERSHIP OF RAINFOREST....................................... 51
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION............. 52
Unaudited Pro Forma Condensed Combined Balance Sheet................... 53
Unaudited Pro Forma Condensed Combined Statements of Income............ 54
Notes to Unaudited Pro Forma Condensed Combined Financial Statements... 55
COMPARATIVE RIGHTS OF HOLDERS OF RAINFOREST CAPITAL STOCK AND
LANDRY'S CAPITAL STOCK.................................................. 57
PROPOSALS OF SHAREHOLDERS FOR THE 2000 ANNUAL MEETING.................... 68
LEGAL MATTERS............................................................ 68
EXPERTS.................................................................. 68
WHERE YOU CAN FIND MORE INFORMATION...................................... 68
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.......................... 69
Annex AAgreement and Plan of Merger...................................... A-1
Annex BOpinion of U.S. Bancorp Piper Jaffray............................. B-1
Annex CSection 302A.471 and Section 302A.473 of the Minnesota Business
Corporation Act......................................................... C-1
</TABLE>
ii
<PAGE>
QUESTIONS AND ANSWERS ABOUT THE MERGER
Q: Why are we proposing the merger?
A: Our companies are proposing the merger because we believe the combined
company will have the size and strength that is necessary to achieve an
enhanced valuation of the existing business lines and allow the combined
company to pursue future growth opportunities more effectively. The
combined company will also have a greater degree of diversification than
either company would have alone.
Q: What will happen in the merger?
A: Subject to approval by Rainforest shareholders and other closing
conditions, all of the outstanding shares of Rainforest common stock (other
than shares owned by Landry's and other than shares as to which dissenters'
rights have been properly perfected) will be cancelled in exchange for the
right to receive the merger consideration, and Rainforest will be merged
with and into LSR Acquisition Corp., a wholly-owned subsidiary of Landry's,
with LSR continuing as the surviving corporation after the merger. Landry's
expects to change the name of LSR following the merger to Rainforest Cafe
(or a comparable name).
Q: What will I receive in the merger?
A: For each share of Rainforest common stock for which you so elect, you will
receive 0.5816th of a share of Landry's common stock or $5.23 in cash (in
each case, subject to proration). The shares of Rainforest common stock
that will be converted into shares of Landry's common stock (other than
shares owned by Landry's and other than shares as to which dissenters'
rights have been properly perfected) will equal, as nearly as practicable,
65% of all outstanding shares of Rainforest common stock, and the shares of
Rainforest common stock to be converted into the right to receive cash will
equal, as nearly as practicable, 35% of all outstanding shares of
Rainforest common stock.
If Rainforest shareholders, in the aggregate, elect to receive shares of
Landry's common stock for more than 65% of their shares or cash for more
than 35% of their shares, the shareholders electing such oversubscribed
consideration will receive, on a pro rata basis, the alternative
consideration for the excess.
For example:
If Rainforest shareholders, in the aggregate, elect to receive
consideration in the form of shares of Landry's common stock for 75% of
their shares, the number of shares of Landry's common stock received by
each Rainforest shareholder electing stock as merger consideration will be
reduced on a pro rata basis so that the total number of shares of
Rainforest common stock converted into shares of Landry's common stock will
equal 65%.
Please note that the receipt of cash instead of stock may result in certain
different federal income tax consequences to you. See "THE MERGER--Certain
Federal Income Tax Considerations."
We will not issue fractional shares. Instead, you will receive cash in lieu
of any fractional share of Landry's common stock to which you are entitled.
The amount of cash will be based upon the $5.23 cash consideration amount.
For example:
A Rainforest shareholder whose 100 shares of Rainforest common stock have
been converted into shares of Landry's common stock would be entitled to
receive 58.16 shares of Landry's common stock. After the consummation of
the merger, however, the Rainforest shareholder would receive 58 shares of
Landry's common stock and a check in an amount equal to $0.83 (i.e., the
product determined by multiplying 0.16 and $5.23).
Q: What will be the trading value of the securities I receive?
A: The marketplace will determine the prices at which shares of Landry's
common stock trade following the merger. Landry's common stock is listed
and traded on the New York Stock Exchange under the symbol "LNY."
1
<PAGE>
Q: Who will own Rainforest after the merger?
A: After the merger, Rainforest will be owned by Landry's.
Q: What will Rainforest option holders receive as a result of the merger?
A: As a result of the merger, all options to purchase shares of Rainforest
common stock which are outstanding and unexercised at the time of the
merger (other than up to 1,611,250 options held by senior management which,
if not exercised by the effective time of the merger, will be cancelled at
such time) will become fully vested and exercisable by virtue of their
terms and will be converted into rights to acquire shares of Landry's
common stock having the same terms and conditions as the Rainforest
options, but the number of shares acquirable upon exercise of these options
will decrease and the exercise price per share will increase, in each case,
to reflect the exchange ratio of 0.5816th of a share of Landry's common
stock for each share of Rainforest common stock.
For example:
An option to purchase 100 shares of Rainforest common stock at an exercise
price of $10.00 per share prior to the effective date of the merger will
become an option to purchase 58.16 shares of Landry's common stock at an
exercise price of $17.19 per share from and after the effective date of the
merger.
Q: When will the merger occur?
A: We plan to complete the merger as soon as possible after the special
meeting, subject to the satisfaction or waiver of the conditions to the
merger and all necessary regulatory approvals. Although we cannot predict
exactly when all conditions will be satisfied and all regulatory approvals
obtained, we hope to complete the merger sometime in the second quarter of
2000.
Q: What do I need to do now?
A: This Proxy Statement/Prospectus contains important information regarding
the merger agreement and the merger, as well as information about
Rainforest and Landry's. It also contains important information about what
the management and the board of directors of Landry's and Rainforest
considered in evaluating the merger. We urge you to read this Proxy
Statement/Prospectus carefully, including its Annexes, and to consider how
the merger affects you as a shareholder.
Q: How do I vote?
A: Just indicate on your proxy card how you want to vote your shares of
Rainforest common stock and sign and mail the proxy card in the enclosed
return envelope as soon as possible so that your shares may be represented
at the meeting. You also have the ability to vote electronically via the
Internet or by telephone as is indicated on your proxy card. The board of
directors of Rainforest unanimously recommends a vote FOR the approval of
the merger proposal and the adjournment proposal.
Q: Can I change my vote?
A: Yes. You can change your vote at any time before we vote your proxy at the
special meeting. You can do so in several different ways.
. First, you can send a written notice stating that you would like to
revoke your proxy to Rainforest at the address listed below.
. Second, you can complete a new proxy card and send it to Rainforest
and the new proxy card will automatically replace any earlier dated
proxy card that you returned to Rainforest.
. Third, you can attend the special meeting and vote in person.
. Fourth, telephone votes and votes submitted electronically via the
Internet may be revoked in the same manner as indicated above and may
also be revoked by subsequent telephone votes until 12:00 noon, New
York City time, on [1 business day prior to special meeting], 2000 or
subsequent Internet votes until 12:00 noon, Central time, on [1
business day prior to special meeting], 2000.
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<PAGE>
You should send any notice of revocation or your completed new proxy card
to Rainforest at the following address:
Rainforest Cafe, Inc.
c/o Norwest Shareowner Services
161 North Concord Exchange
South St. Paul, MN 55075
Q: If my shares are held in "street" name by my broker, will my broker vote my
shares for me?
A: Your broker will vote your shares only if you provide instructions to your
broker on how to vote. You should instruct your broker to vote your shares
by following the directions provided by your broker. Without instructions,
any of your shares held in "street" name by your broker will not be voted
and the effect will be the same as a vote against the merger proposal.
Q: When should I send in my stock certificates?
A: In order to receive the merger consideration as promptly as possible
following the closing of the merger, whether you are electing to receive
cash and/or shares of Landry's common stock, the exchange agent must receive
your validly completed election form/letter of transmittal together with
your Rainforest stock certificates by 5:00 p.m., New York City time, on
[ ], 2000. After this deadline, you may not make any elections with
respect to the consideration you wish to receive in the merger.
Q: How do I specify if I want cash or shares of Landry's common stock?
A: You must complete the enclosed election form/letter of transmittal and
specify the number of your shares of Rainforest common stock that you wish
to be converted into cash and/or shares of Landry's common stock in the
merger. The election form/letter of transmittal must be sent, together with
your stock certificates for shares of Rainforest common stock, to the
exchange agent at the address below:
Rainforest Cafe, Inc.
c/o American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, NY 10005
(800) 937-5449, ext. 6820
If Rainforest shareholders, in the aggregate, elect to receive shares of
Landry's common stock for more than 65% of the outstanding shares of
Rainforest common stock, the right to receive shares of Landry's common
stock will be subject to proration and a portion of the merger
consideration received by such Rainforest shareholders will be in the form
of cash instead.
If Rainforest shareholders, in the aggregate, elect to receive cash for
more than 35% of the outstanding shares of Rainforest common stock, the
right to receive cash will be subject to proration and a portion of the
merger consideration received by such Rainforest shareholders will be in
the form of shares of Landry's common stock instead.
Please note that the receipt of cash instead of stock may result in certain
different federal income tax consequences to you. See "THE MERGER--Certain
Federal Income Tax Considerations."
Q: Can I revoke my election?
A: Yes. You can revoke your election for any or all of your shares of
Rainforest common stock by giving written notice to the exchange agent prior
to 5:00 p.m., New York City time, on [ ], 2000 or, by withdrawing your
shares of Rainforest common stock (or withdrawing your guarantee of delivery
of your shares) prior to the deadline listed above. After this deadline, you
may not revoke any elections you have made with respect to the consideration
you wish to receive in the merger.
Q: Can I make partial elections?
A: Yes. The election form/letter of transmittal provides for an election to be
made for cash and/or shares of Landry's common stock with respect to all of
your shares of Rainforest common stock. You may elect to receive shares of
Landry's common stock for some of your shares of Rainforest common stock and
cash for the remainder. Just complete and mail the enclosed election
form/letter of
3
<PAGE>
transmittal, together with your stock certificates for shares of Rainforest
common stock, to the exchange agent prior to the deadline listed above.
Elections to receive cash and/or shares of Landry's common stock are subject
to proration among Rainforest shareholders in the event of oversubscription
for either.
Q: What if I fail to make an election?
A: If you fail to make an election, you will receive shares of Landry's common
stock and/or cash so that 65% of the outstanding shares of Rainforest common
stock are converted into Landry's common stock and 35% of the outstanding
shares of Rainforest common stock are converted into cash. In the event that
Rainforest shareholders have elected to receive stock for more than 65% of
the outstanding shares of Rainforest common stock and you have failed to
make an election, you will only receive cash for your shares of Rainforest
common stock. Alternatively, in the event that Rainforest shareholders have
elected to receive cash for more than 35% of the outstanding shares of
Rainforest common stock and you have failed to make an election, you will
only receive stock for your shares of Rainforest common stock.
Q: Will I receive any dividends following the merger?
A: The declaration and amounts of future dividends of Landry's, if any, will be
in the discretion of the Landry's board of directors. Nonetheless, on
October 26, 1999, Landry's announced that it intended to pay a $0.10
dividend with respect to fiscal 2000 in four quarterly installments, the
first of which has yet to be declared.
Q: What are the tax consequences of the merger to me?
A: The tax consequences of the merger to you will depend on, among other
things, whether you receive solely cash, solely shares of Landry's common
stock or a combination of cash and shares of Landry's common stock in
exchange for your shares of Rainforest common stock. We explain the material
tax consequences of the merger starting on page [ ].
The tax consequences of the merger to you will depend entirely upon your
own financial and tax situation. You should consult your tax and legal
advisors for a full understanding of the tax consequences of the merger to
you.
Q: What risks are associated with the merger?
A: In addition to the other information in this Proxy Statement/Prospectus, the
risk factors identified under the caption "Risk Factors" beginning on page [
] should be considered carefully in evaluating the merger.
You should also review the factors considered by the Landry's board of
directors and the Rainforest board of directors and the analyses of the
financial advisor to Rainforest. See "THE MERGER--Reasons for the Merger"
beginning on page [ ], and "THE MERGER--Opinion of Financial Advisor to
Rainforest" beginning on page [ ].
Q: What is the adjournment proposal?
A: Approval of the adjournment proposal would permit the adjournment of the
special meeting to solicit additional proxies in the event that there are
not sufficient votes at the time of the special meeting to approve the
merger proposal.
Q: Who should I call with questions?
A: If you would like additional copies of this Proxy Statement/Prospectus or a
new proxy card or if you have questions about the merger, you should contact
the following proxy solicitor:
Innisfree M&A Incorporated
By mail:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
By telephone, toll free, at:
(888) 750-5834
You can also call the Investor Relations Department of Rainforest at
(612) 945-5400.
4
<PAGE>
SUMMARY
The following summary highlights aspects of the merger we believe are
important to you. To better understand the merger agreement and the merger and
for a more complete description of its terms, you should carefully read this
entire document and the documents to which we have referred you. See "Where You
Can Find More Information" on page [ ]. References in this Proxy
Statement/Prospectus to "Landry's" and "Rainforest" include their respective
subsidiaries unless the context otherwise requires.
The Companies
Landry's Seafood Restaurants, Inc.
1400 Post Oak Blvd., Suite 1010
Houston, Texas 77056
(713) 850-1010
Landry's owns and operates full-service, mid-priced, casual dining, seafood
restaurants located in 26 states, under the names "Joe's Crab Shack," "Landry's
Seafood House," and "Crab House." As of March 1, 2000, the Company operated 153
full service restaurants, including 99 Joe's Crab Shack division restaurants,
39 Landry's Seafood House division restaurants and 15 Crab House restaurants.
In addition, Landry's operates three limited-menu take-out service units.
Landry's believes its restaurants appeal to a broad range of customers by
offering generous portions of fresh seafood and excellent service in a high-
energy environment at an attractive price-value relationship.
Rainforest Cafe, Inc.
720 South Fifth Street
Hopkins, Minnesota 55343
(612) 945-5400
Rainforest Cafe, Inc. owns, operates, and licenses themed restaurant/retail
facilities under the name "Rainforest Cafe--A Wild Place to Shop and Eat(R)."
As of March 1, 2000, Rainforest owned and operated 27 restaurants in the United
States and licensed ten restaurants outside of the United States. Rainforest
Cafe restaurants range in size from the initial 15,000 square foot restaurant
which opened on October 3, 1994 in the Mall of America in Bloomington,
Minnesota, to the 34,000 square foot restaurant located at Disney's Animal
Kingdom at Walt Disney World in Orlando, Florida.
In addition to operations in the United States, Rainforest has entered into
seven exclusive license agreements to develop up to 28 restaurants, of which
ten are currently open, over the next ten years in the United Kingdom and
Ireland, Mexico, Canada, France, and certain cities in Asia and South America.
Reasons for the Merger
Landry's Reasons for the Merger
Some of Landry's reasons for the merger include:
. the combination of Landry's and Rainforest will create a stronger, more
diversified restaurant company and the increased cash flow could provide
the shareholders of the combined company with greater resources to pursue
future growth opportunities
. combining Landry's and Rainforest may strengthen Landry's current market
position in the restaurant industry
. adding the Rainforest Cafe brand to Landry's existing business will allow
Landry's to continue its expansion in the "theme" restaurant industry
Rainforest's Reasons for the Merger
Some of Rainforest's reasons for the merger include:
. current institutional investor sentiment seems to favor larger
capitalized companies that can provide greater investment liquidity, and
the merger with Landry's can create a large, well capitalized upper-tier
restaurant company
. Landry's management and personnel have experienced rapid growth, Landry's
operations are performing very well and the financial trends for Landry's
are significantly positive
. the merger of the two companies will eliminate the pressure to grow the
5
<PAGE>
Rainforest Cafe concept through expansion, and the combined company's
management can focus on improving the performance of the existing
Rainforest Cafe restaurant operations
Board Recommendation to Rainforest Shareholders
The Rainforest board of directors has unanimously approved the merger agreement
and the merger and believes that the merger agreement and the merger are fair
to you and in the best interests of Rainforest and its shareholders and
recommends that you vote FOR the approval of the merger proposal and the
adjournment proposal.
The Meeting (see pages [ ] to [ ])
The special meeting will be held at [ , Minnesota] on [ , 2000] at [ ],
local time.
Shareholder Vote Required to Approve the Merger (see pages [ ] to [ ])
To approve the merger proposal, the holders of at least a majority of the
outstanding shares of Rainforest common stock on the record date must vote in
favor of the merger proposal. To approve the adjournment proposal, the
affirmative vote of the holders of a majority of the shares of Rainforest
common stock present (by proxy or by voting ballot) at the special meeting is
required.
Pursuant to stockholder agreements entered into between Landry's and each of
Lyle Berman and Steven L. Schussler, Messrs. Berman and Schussler have agreed
to vote their shares of Rainforest common stock (totaling approximately 11.6%
of the total outstanding shares of Rainforest common stock) in favor of the
merger proposal and the adjournment proposal.
Risk Factors
This Proxy Statement/Prospectus includes, or incorporates by reference, certain
additional factors related to the operations and strategies of Landry's and
Rainforest generally and the merger and the merger's effects on the companies
specifically. Shareholders should read carefully the section entitled "Risk
Factors" beginning on page [ ].
You should also review the factors considered by the Landry's board of
directors and the Rainforest board of directors and the analyses of the
financial advisor to Rainforest. See "THE MERGER--Reasons for the Merger"
beginning on page [ ] and "THE MERGER--Opinion of Financial Advisor to
Rainforest" beginning on page [ ].
The Merger (see pages [ ] to [ ])
The Merger
As soon as practicable after we receive Rainforest shareholder approval,
Landry's will acquire, by means of a merger, all of the outstanding shares of
Rainforest common stock (other than shares held by Landry's and other than
shares as to which dissenters' rights have been properly perfected) in exchange
for, at each Rainforest shareholder's election, the issuance of shares of
Landry's common stock and/or cash. Rainforest shareholders will receive
0.5816th of a share of Landry's common stock for each share of Rainforest
common stock for which they elect to receive stock or $5.23 in cash for each
share of Rainforest common stock for which they elect to receive cash (in each
case, subject to proration in the event of oversubscription).
The Rainforest common stock that will be converted into Landry's common stock
will equal, as nearly as practicable, 65% of all outstanding shares of
Rainforest common stock, and the Rainforest common stock that will be converted
into the right to receive cash will equal, as nearly as practicable, 35% of all
outstanding shares of Rainforest common stock. If Rainforest shareholders, in
the aggregate, elect to receive shares of Landry's common stock for more than
65% of their shares of Rainforest common stock, or cash for more than 35% of
their shares of Rainforest common stock, the shareholders electing the
oversubscribed consideration will receive, on a pro rata basis, the alternative
consideration with respect to the excess.
Based on the number of shares of Rainforest common stock currently outstanding,
Rainforest shareholders, in the aggregate, would receive approximately
8,800,000 shares of Landry's common stock or approximately 26% of the shares of
Landry's common stock that will be outstanding
6
<PAGE>
immediately after the merger and approximately $42,600,000 in cash in exchange
for Rainforest common stock. The actual share numbers, aggregate cash amount
and percentages may differ slightly based upon changes in the number of shares
of Rainforest common stock and Landry's common stock outstanding as of the date
the merger is completed.
The merger agreement is attached as Annex A to this Proxy Statement/Prospectus.
We encourage you to read this document carefully as it is the legal document
that governs the merger.
Interests of Officers and Directors in the Transaction (see pages [ ] and
[ ]).
Certain officers and directors of Landry's and Rainforest may have interests in
the merger that are different from or in addition to your interests as a
shareholder.
For example, each of four executive officers/directors of Rainforest (Lyle
Berman, Kenneth Brimmer, Steven Schussler and Ercument Ucan) is party to an
employee termination, consulting and non-competition agreement with Landry's
which becomes effective only upon consummation of the merger. In consideration
of the consulting, non-competition, and other provisions contained in these
agreements (including cancellation of up to 1,611,250 options to acquire shares
of Rainforest common stock at the effective time of the merger if they are not
exercised by such time), each such person would be paid an aggregate amount of
$1.5 million by Landry's following the closing of the merger.
In addition, as a result of the merger, all options to purchase shares of
Rainforest common stock (other than up to 1,611,250 options held by senior
management which, if not exercised by the effective time of the merger, will be
cancelled at such time) will vest and become fully exercisable options to
purchase shares of Landry's common stock. As of [to come], approximately
[2,186,626] options are held by directors and executive officers of Rainforest.
The exercise price of of such options held by directors and executive
officers of Rainforest exceeded the market price of Rainforest common stock on
( )[the latest practical date prior to mailing]. The number of
shares of Landry's common stock acquirable upon exercise of these options will
decrease and the exercise price per share of Landry's common stock will be
increased to reflect the exchange ratio of 0.5816th of a share of Landry's
common stock for each share of Rainforest common stock.
For example:
An option to purchase 100 shares of Rainforest common stock at an exercise
price of $10.00 per share prior to the effective date of the merger will become
an option to purchase 58.16 shares of Landry's common stock at an exercise
price of $17.19 per share after the effective date of the merger.
Conditions to the Merger (see page [ ])
Before we can complete the merger, a number of conditions must be met,
including the following:
. the expiration or termination of the relevant waiting period applicable
under the Hart-Scott-Rodino Act
. the approval of the merger proposal by holders of a majority of
outstanding shares of Rainforest common stock
. the absence of any law, court order or injunction prohibiting the merger
. the receipt by Rainforest of all governmental consents and all material
third party contractual consents
. no material adverse change in the business of Landry's and Rainforest
having occurred
. the receipt by both Landry's and Rainforest of tax opinions from their
respective counsel that the merger will qualify as a tax-free
reorganization
. the employee termination, consulting and non-competition agreements with
each of Lyle Berman, Kenneth Brimmer, Steven Schussler and Ercument Ucan
being in full force and effect
7
<PAGE>
No Solicitation (see page [ ] )
Rainforest has agreed that it will not initiate any discussions regarding a
business combination with any other party while the merger agreement is in
effect.
Termination of the Merger Agreement (see page [ ])
Landry's and Rainforest can mutually agree to terminate the merger agreement
before the merger is completed, and either Landry's or Rainforest can terminate
the merger agreement if any of the following occurs:
. the merger is not completed by August 31, 2000, subject to certain
limitations
. the requisite approval of the merger proposal by the Rainforest
shareholders is not obtained
. a court or other governmental authority permanently prohibits the merger
Landry's can terminate the merger agreement under certain additional
circumstances, including if:
. Rainforest breaches, in any material respect, any of its representations,
warranties or covenants as set forth in the merger agreement, which
breach is not cured
. the board of directors of Rainforest withdraws or modifies its approval
or recommendation of the merger in such a way that is adverse to
Landry's, or fails to reconfirm its approval or recommendation of the
merger after being asked to do so, or recommends certain competing
business combinations
. if Rainforest has not received any one or more material third party
consents by April 21, 2000 (or a subsequent date if Rainforest does not
deliver certain notices to Landry's on a timely basis)
Rainforest can terminate the merger agreement under certain additional
circumstances, including if Landry's shall have breached, in any material
respect, any of its representations, warranties or covenants as set forth in
the merger agreement, which breach is not cured.
Additionally, if by April 21, 2000 (or a subsequent date if Rainforest does not
deliver certain notices to Landry's on a timely basis), Landry's does not waive
all material third party consents which Rainforest has not received by such
date, the merger agreement will terminate automatically on April 22, 2000
without any action on the part of any party thereto.
Please refer to pages [ ] and [ ] for more information regarding Landry's
and Rainforest's rights to terminate the merger agreement.
Termination Fees (see page [ ])
The merger agreement requires Rainforest to pay Landry's a termination fee of
$1 million if the merger agreement terminates under certain circumstances
following Rainforest becoming aware of a competing takeover proposal for
Rainforest.
Certain Federal Income Tax Considerations of the Merger (see page [ ] )
The obligations of Rainforest, LSR and Landry's to consummate the merger are
subject to the receipt by Rainforest and Landry's of the opinions of their
respective counsel to the effect that, on the basis of the facts,
representations, assumptions and agreements set forth or referred to therein,
for U.S. federal income tax purposes, the merger will qualify as a
reorganization within the meaning of Section 368 of the Internal Revenue Code
of 1986, as amended (the "Code"). If the merger so qualifies, then, in general,
(i) a shareholder who exchanges shares of Rainforest common stock solely for
cash will recognize capital gain or loss equal to the difference between the
amount of cash received and the adjusted basis in the shares of Rainforest
common stock surrendered therefor, (ii) a shareholder who exchanges shares of
Rainforest common stock solely for shares of Landry's common stock will not
recognize any gain or loss except with respect to cash received in lieu of a
fractional share of Landry's common stock and (iii) a shareholder who exchanges
shares of Rainforest common stock for a combination of cash and shares of
Landry's common stock will recognize gain equal to the lesser of (a) the excess
of the sum of the cash and the fair market value of the shares of Landry's
common stock received over the tax basis in the shares of Rainforest common
stock exchanged and
8
<PAGE>
(b) the amount of cash received, but will not recognize loss. Certain
exceptions and/or other considerations may apply to the above. See "THE MERGER
- - Certain Federal Income Tax Considerations."
Accounting Treatment (see page [ ])
The merger will be accounted for using the purchase method of accounting.
Opinion of Financial Advisor of Rainforest (see pages [ ] and [ ]).
In reaching their decision to approve the merger, Rainforest's board of
directors considered an opinion from its financial advisor, U.S. Bancorp Piper
Jaffray. This opinion is attached as Annex B to this Proxy Statement/Prospectus
and you are encouraged to carefully read it in its entirety.
U.S. Bancorp Piper Jaffray will be entitled to a fee of approximately $250,000
for rendering its opinion and providing other investment banking services to
Rainforest in connection with the merger. The financial advisor's opinion is
based on information available to the financial advisor on the date of its
opinion. Events occurring after that date could materially affect the
assumptions used in preparing its opinion and could alter its opinion if the
opinion were rendered as of a different date.
Dissenters' Rights (see page [ ])
Under Minnesota law, Rainforest shareholders have the right to dissent from the
merger and obtain payment for the fair value of their shares of Rainforest
common stock in connection with the merger. A full discussion of these
dissenters' rights is included on pages [ ] through [ ] and the relevant
provisions of the Minnesota Business Corporation Act are included as Annex C to
this Proxy Statement/Prospectus.
Comparative Market Price Information (see page [ ])
Shares of Rainforest common stock ("RAIN") are listed on the NASDAQ National
Market and shares of Landry's common stock ("LNY") are listed on the New York
Stock Exchange. On February 8, 2000, the last full trading day prior to the
public announcement of the proposed merger, Landry's common stock closed at
$10.125 per share and Rainforest common stock closed at $4.0625 per share.
On [ ], 2000, the most recent practicable date prior to the printing of
this Proxy Statement/Prospectus, the last sale price as reported on the New
York Stock Exchange for Landry's common stock was $[ ] per share and the
last sale reported on the NASDAQ National Market for Rainforest common stock
was $ per share. We urge you to obtain current market quotations.
Listing and Trading of Landry's Common Stock (see page [ ]) .
Shares of Landry's common stock received by Rainforest shareholders in the
merger will be listed on the New York Stock Exchange. After completion of the
merger, shares of Landry's common stock will continue to be traded on the New
York Stock Exchange, but shares of Rainforest common stock will no longer be
listed on the NASDAQ National Market.
9
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA FOR LANDRY'S
The following selected historical financial data for each of the years ended
December 31, 1999, December 31, 1998, December 31, 1997, December 31, 1996 and
December 31, 1995 have been derived from Landry's audited consolidated
financial statements. This information is only a summary and should be read
together with Landry's historical financial statements and related notes
contained in its Annual Reports on Form 10-K and other information that has
been filed with the SEC and incorporated by reference.
<TABLE>
<CAPTION>
Years ended December 31,
---------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Revenues:
Restaurant..................... $438,986 $399,548 $311,673 $232,597 $149,737
Processing plant............... -- -- -- 3,510 7,884
-------- -------- -------- -------- --------
Total........................ 438,986 399,548 311,673 236,107 157,621
Net income:
Before store closings,
special/merger charges and
accounting change............. 17,305 27,701 27,430 18,647 11,048
Accounting change.............. -- (3,382) -- -- --
-------- -------- -------- -------- --------
Net income before store closing
and special/merger charges...... 17,305 24,319 27,430 18,647 11,048
Net income per common share--
Basic:
Before store closings,
special/merger charges and
accounting change............. 0.65 0.94 1.07 0.80 0.58
Accounting change.............. -- (0.11) -- -- --
-------- -------- -------- -------- --------
Net income before store closing
and special/merger charges.... 0.65 0.83 1.07 0.80 0.58
Net income per common share--
Diluted:
Before store closings,
special/merger charges and
accounting change............. 0.64 0.93 1.03 0.77 0.57
Accounting change.............. -- (0.11) -- -- --
-------- -------- -------- -------- --------
Net income before store closing
and special/merger charges.... 0.64 0.82 1.03 0.77 0.57
Net income....................... 15,373 (330) 27,430 1,505 11,048
Net income per common share--
Basic........................... 0.58 (0.01) 1.07 0.06 0.58
Net income per common share--
Diluted......................... 0.57 (0.01) 1.03 0.06 0.57
Total assets..................... 469,726 489,949 382,281 281,199 187,866
Long term debt................... $ 60 $ 35,153 $ 50,235 $ 221 $ 16,204
</TABLE>
10
<PAGE>
SELECTED HISTORICAL FINANCIAL DATA FOR RAINFOREST
The following selected historical financial data for the years ended January
2, 2000, January 3, 1999, December 28, 1997, December 29, 1996 and December 31,
1995 have been derived from Rainforest's audited consolidated financial
statements. This information is only a summary and should be read together with
Rainforest's historical financial statements and related notes contained in its
Annual Reports on Form 10-K and other information that has been filed with the
SEC and incorporated by reference.
<TABLE>
<CAPTION>
Years ended
--------------------------------------------------------------
Jan 2, 2000 Jan 3, 1999 Dec 28, 1997 Dec 29, 1996 Dec 31, 1995
----------- ----------- ------------ ------------ ------------
(in thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Revenues:
Restaurant............ $209,326 $164,742 $ 83,650 $ 37,088 $ 9,979
Retail................ 50,094 47,019 23,791 10,868 3,472
Licensing fees and
royalties............ 3,270 2,131 633 750 --
-------- -------- -------- -------- -------
262,690 213,892 108,074 48,706 13,451
Net income:
Before special
charges, accounting
change and
extraordinary item... 10,682 14,654 13,720 5,924 1,169
Accounting change and
extraordinary item... -- (3,916) -- -- (1,053)
-------- -------- -------- -------- -------
Net income before
special charges...... 10,682 10,738 13,720 5,924 116
Net income per common
share--Basic:
Before special
charges, accounting
change and
extraordinary item... 0.44 0.58 0.53 0.29 0.10
Accounting change and
extraordinary item... -- (0.16) -- -- (0.09)
-------- -------- -------- -------- -------
Net income before
special charges...... 0.44 0.42 0.53 0.29 0.01
Net income per common
share--Diluted:
Before special
charges, accounting
change and
extraordinary item... 0.43 0.57 0.51 0.27 0.10
Accounting change an
extraordinary item... -- (0.15) -- -- (0.09)
-------- -------- -------- -------- -------
Net income before
special charges...... 0.43 0.42 0.51 0.27 0.01
Net income.............. 5,694 10,738 12,293 5,924 116
Net income per common
share--Basic........... 0.24 0.42 0.47 0.29 0.01
Net income per common
share--Diluted......... 0.23 0.42 0.46 0.27 0.01
Total assets............ $261,716 $255,527 $246,100 $222,701 $31,209
Long term debt.......... -- -- -- -- --
</TABLE>
11
<PAGE>
SELECTED UNAUDITED PRO FORMA COMBINED FINANCIAL DATA
The following selected unaudited pro forma combined financial data has been
derived from and should be read with the Unaudited Pro Forma Condensed Combined
Financial Statements and related notes on pages 52 to 56. This information is
based on the historical consolidated balance sheets and related consolidated
statements of income of Landry's and Rainforest giving effect to the merger
using the purchase method of accounting for business combinations. The
following pro forma data is based on preliminary estimates, available
information and certain assumptions, and may be revised as additional
information becomes available. This information is for illustrative purposes
only. The companies may have performed differently had they been combined. The
selected unaudited pro forma financial data may not be indicative of what the
combined company will experience after the merger.
<TABLE>
<CAPTION>
Year ended
December 31, 1999
-----------------
(in thousands,
except per share
amounts)
<S> <C>
Revenues:
Restaurant................................................ $644,376
Retail.................................................... 49,134
Licensing fees and royalties.............................. 3,270
--------
$696,780
Net income.................................................. $ 28,316
Net income per common share--Basic.......................... 0.79
Net income per common share--Diluted........................ 0.79
Net income before special charges........................... 35,233
Net income before special charges per common share--Basic:.. 0.99
Net income before special charges per common share--
Diluted:................................................... 0.98
Total assets................................................ 625,369
Long term debt.............................................. $ 60
</TABLE>
12
<PAGE>
COMPARATIVE PER SHARE MARKET PRICE
Landry's common stock is listed on the New York Stock Exchange ("NYSE") and
Rainforest's common stock is listed on the NASDAQ National Market ("NASDAQ").
Landry's ticker symbol on the NYSE is "LNY" and Rainforest's ticker symbol on
the NASDAQ is "RAIN." The following table shows, for the periods indicated, the
high and low of the last reported closing prices per share of Landry's common
stock and Rainforest common stock, as reported on the NYSE and NASDAQ,
respectively.
<TABLE>
<CAPTION>
Landry's Rainforest
Common Stock Common Stock
------------- -------------
High Low High Low
------ ------ ------ ------
<S> <C> <C> <C> <C>
1997
First Quarter.................................... $23.25 $15.38 $16.67 $12.50
Second Quarter................................... 24.25 12.88 18.83 11.75
Third Quarter.................................... 31.00 20.50 21.92 14.17
Fourth Quarter................................... 34.38 17.50 25.42 18.67
1998
First Quarter.................................... $31.69 $21.25 $22.00 $10.75
Second Quarter................................... 31.13 16.50 17.75 13.25
Third Quarter.................................... 19.00 6.56 14.13 5.75
Fourth Quarter................................... 9.50 5.18 7.69 5.38
1999
First Quarter.................................... $ 8.13 $ 4.66 $ 6.25 $ 4.75
Second Quarter................................... 10.88 6.06 5.75 4.50
Third Quarter.................................... 9.00 6.75 7.06 4.88
Fourth Quarter................................... 9.50 7.13 5.31 3.13
2000
First Quarter (through [to come], 2000).......... $ $ $ $
</TABLE>
The Rainforest share prices above have been adjusted to account for a 3 for
2 stock split on January 16, 1998.
Landry's has historically not paid dividends on its common stock.
Nonetheless, on October 26, 1999, Landry's announced that it intended to pay a
$0.10 dividend with respect to fiscal 2000 in four quarterly installments, the
first of which has yet to be declared.
On February 8, 2000, the last full trading day before the public
announcement of the proposed merger, the last reported closing price of
Landry's common stock was $10.125 per share, the last reported closing price of
Rainforest common stock was $4.0625 per share and the last reported closing
price of Rainforest common stock on an equivalent basis was $5.8887. The last
reported closing price of Rainforest common stock on an equivalent basis is
equal to the closing price of a share of Landry's common stock on that date
multiplied by the exchange ratio of 0.5816.
On [ ], 2000, the most recent practicable date prior to the printing of
this Proxy Statement/Prospectus, the last reported closing price of Landry's
common stock was $[ ] per share and the last reported closing price of
Rainforest common stock was $[ ] per share. We urge you to obtain current
market quotations prior to making any decision with respect to the merger.
13
<PAGE>
COMPARATIVE PER SHARE DATA
Set forth below are the net income, cash dividends and book value per common
share data separately for Landry's and Rainforest on a historical basis, for
Landry's (post merger) on a pro forma combined basis and on a pro forma
combined basis per Rainforest equivalent share. The exchange ratio for the
business combination is 0.5816th of a share of Landry's common stock for each
share of Rainforest common stock.
The Landry's pro forma data was derived by combining the historic
consolidated financial information of Landry's and Rainforest using the
purchase method of accounting for business combinations as described under
"Unaudited Pro Forma Condensed Combined Financial Statements" beginning on page
.
The Rainforest equivalent share pro forma information shows the effect of
the merger from the perspective of an owner of Rainforest common stock. The
information was computed by multiplying the Landry's pro forma information by
the exchange ratio of 0.5816.
The information below should be read together with the historical financial
statements and related notes contained in the annual reports and other
information of Landry's and Rainforest that have been filed with the SEC and
incorporated by reference. The unaudited pro forma combined data below is for
illustrative purposes only. The companies may have performed differently had
they always been combined. This information should not be relied upon as being
indicative of the historical results that would have been achieved had the
companies always been combined or the future results that the combined company
will experience after the merger.
<TABLE>
<CAPTION>
Year ended
December 31,
1999
------------
<S> <C>
Landry's Historic per Common Share Data:
Net income before store closing and special charges--basic..... $ 0.65
Net income before store closing and special charges--diluted... 0.64
Cash Dividends................................................. --
Book Value..................................................... 15.20
Landry's Pro Forma Combined per Landry's Common Share Data:
Net income before store closing and special charges--basic..... $ 0.99
Net income before store closing and special charges--diluted... 0.98
Cash Dividends................................................. --
Book Value..................................................... 13.32
Rainforest Historic per Common Share Data:
Net income before store closing and special charges--basic..... $ 0.44
Net income before store closing and special charges--diluted... 0.43
Cash Dividends................................................. --
Book Value..................................................... 8.70
Landry's Pro Forma Combined per Rainforest Equivalent Common
Share Data:
Net income before store closing and special charges--basic..... $ 0.58
Net income before store closing and special charges--diluted... 0.57
Cash Dividends................................................. --
Book Value..................................................... 7.75
</TABLE>
14
<PAGE>
RISK FACTORS
The following risk factors, in addition to the other information contained
or incorporated by reference in this Proxy Statement/Prospectus, should be
carefully considered before you vote.
Since the exchange ratio is fixed and the closing of the merger will not occur
until after the special meeting, you cannot be sure of the value of the
Landry's common stock you will receive on the effective date of the merger.
The exchange ratio is fixed at 0.5816th of a share of Landry's common stock
for each share of Rainforest common stock. As a result, if you receive shares
of Landry's common stock for any of your shares of Rainforest common stock, the
value of the Landry's common stock received by you on the effective date of the
merger may be greater or less than the value of the shares of Rainforest common
stock for which it is being exchanged or the value of the cash being paid in
the merger.
You may not receive the form of consideration that you have elected.
Your ability to receive either shares of Landry's common stock or cash for
each share of Rainforest common stock you own is subject to the condition that
35% of the aggregate consideration paid by Landry's will be in the form of cash
and the remaining 65% will be in the form of shares of Landry's common stock.
If Rainforest shareholders, in the aggregate, elect to receive Landry's common
stock for more than 65% of their shares or cash for more than 35% of their
shares, the shareholders electing the oversubscribed consideration will
receive, on a pro rata basis, the alternative consideration with respect to the
excess. If proration results, you may not necessarily receive the type of
consideration specified in your election. In the event that Rainforest
shareholders have elected to receive stock for more than 65% of the outstanding
shares of Rainforest common stock and you have failed to make an election, you
will only receive cash for your shares of Rainforest common stock.
Alternatively, in the event that Rainforest shareholders have elected to
receive cash for more than 35% of the outstanding shares of Rainforest common
stock and you have failed to make an election, you will only receive stock for
your shares of Rainforest common stock. The tax consequences of the merger to
you will depend upon the form of consideration received as well as your own
financial and tax situation. See "THE MERGER--Structure of the Merger and
Conversion of Rainforest Common Stock" and "THE MERGER--Certain Federal Income
Tax Considerations."
Landry's acquisition may not be successful.
Landry's and Rainforest have each entered into the merger agreement
expecting that the proposed merger will result in long-term synergistic
benefits to both companies. There can be no assurance that this will occur. The
difficulties of this integration may be increased by the geographic separation
of the companies and their employees, as well as the companies' ability to
retain key personnel after the merger.
Moreover, there can be no assurance that Rainforest Cafe restaurants will
perform in accordance with Landry's management's expectations or that the
combined company will not encounter unanticipated problems or liabilities in
connection with any of the Rainforest Cafe restaurants. Many of the Rainforest
Cafe restaurants will be in geographic markets in which Landry's has limited or
no previous operating experience. Additionally, many Rainforest Cafe
restaurants have experienced a decline in sales after their initial period of
opening. There can be no assurance that Landry's will be successful in
operating Rainforest Cafe restaurants, that such restaurants will be operated
profitably or that Landry's can reverse or minimize the declining sales trend.
A number of material third party consents are required in connection with the
merger.
Landry's obligation to consummate the merger is conditioned upon
Rainforest's receipt of a number of material third party consents to the
merger, which condition may be waived by Landry's with respect to one or more
of such consents. If Landry's waives one or more material third party consents
and such consents are not obtained, any person entitled to give such a consent
may object to the merger or the other transactions contemplated by the merger
agreement which could result in adverse financial and legal consequences to the
combined company.
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Rainforest and its Board of Directors are defendants in certain lawsuits
challenging the merger.
Rainforest and its Board of Directors were named as defendants in two
purported class action lawsuits, filed on December 23, 1999 and January 13,
2000, respectively, in Hennepin County District Court in Minneapolis. On
February 26, 2000, these plaintiffs amended their original complaints, alleging
a breach of the board's fiduciary duties in connection with their consideration
of the merger. Additionally, the plaintiffs may seek to permanently enjoin the
merger, and seek compensatory damages for the alleged wrongs. Rainforest denies
these allegations in their entirety and intends to defend itself vigorously.
Under Minnesota law, Rainforest is required, subject to certain exceptions
and exclusions, to indemnify its current and former officers and directors in
connection with lawsuits of this nature. Under the merger agreement, Landry's
has also agreed to indemnify these individuals for a period of six years for
these types of claims. Accordingly, prior to the merger, Rainforest will bear
the cost of defending itself, its current and former directors and officers,
and for any settlement or judgment in these lawsuits and, after the merger,
Landry's will bear the cost of defending Rainforest and its current and former
directors and officers, for any settlement or judgment of such matters.
Although these lawsuits are in their early stages, and Rainforest and after the
merger Landry's plan to defend themselves vigorously, there can be no assurance
that the costs of defense and any settlement or judgment will not have a
material adverse effect on Rainforest or Landry's or their combined results of
operations.
You should consider the tax considerations relating to the merger.
The merger is intended to qualify as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code of 1986, as amended (the "Code").
The obligation of each of Landry's and Rainforest to consummate the merger is
subject to the condition that it shall have received an opinion of its counsel,
dated the effective date of the merger, to the effect that if the merger is
consummated in accordance with the merger agreement, the merger will be treated
for federal income tax purposes as a reorganization within the meaning of
Section 368(a) of the Code. However, opinions of counsel are not binding on the
Internal Revenue Service (the "IRS"), and no ruling from the IRS regarding the
tax treatment of the merger has been sought. Accordingly, there is no assurance
that the IRS will not take a position contrary to one or more of the positions
reflected in such counsels' opinions or that these positions will be upheld by
a court if challenged by the IRS. If the merger does not constitute a
reorganization within the meaning of Section 368(a) of the Code, holders of
Rainforest common stock will recognize gain or (subject to certain limitations)
loss in an amount equal to the difference between (i) the fair market value of
the consideration received by such holders in the merger and (ii) their
adjusted tax basis in the shares of Rainforest common stock being exchanged.
Loss of key employees.
Four executive officers of Rainforest (Messrs. Berman, Brimmer, Schussler
and Ucan) will terminate their employment with Rainforest at the effective time
of the merger. Although each of them will provide certain limited consulting
services to Landry's following the effective time of the merger, the loss of
these officers and other employees of Rainforest may have an adverse effect on
the business of the combined company following the merger.
Landry's believes that the development of its business has been, and will
continue to be, dependent on Tilman J. Fertitta, the Chief Executive Officer,
President, and Chairman of the Board of Landry's, and other key employees. The
loss of services of Mr. Fertitta and other key employees of Landry's may have
an adverse effect upon the combined company's business and development.
Many restaurants have a limited operating history.
A significant number of restaurants of the combined company will have been
open for less than two years. Consequently, the earnings achieved to date by
these restaurants may not be indicative of future operating results.
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Landry's restaurants are geographically concentrated in the South.
A majority of Landry's restaurants are concentrated in the southern half of
the United States. Accordingly, the combined company's results of operations
may be adversely affected by economic conditions in those regions. Also,
adverse publicity in the south relating to Landry's restaurants could have a
more pronounced adverse effect on the combined company's overall sales than
might be the case if the combined company's restaurants were more broadly
dispersed. While Landry's maintains business interruption insurance, there can
be no assurance that if a severe hurricane or other natural disaster should
affect the combined company's geographical areas of operations, Landry's would
be able to maintain its current level of operations or profitability.
Certain types of seafood experience fluctuations in supply availability.
Landry's utilizes several seafood suppliers and has not experienced any
difficulty in obtaining adequate supplies of fresh seafood on a timely basis.
However, Landry's dependence on frequent deliveries of fresh seafood and
produce subjects it to the risk of possible shortages or interruptions in
supply caused by adverse weather or other conditions which could adversely
affect the availability and cost of such items. In addition, some types of
seafood have been subject to adverse publicity due to certain levels of
contamination at their source, which can adversely affect both supply and
market demand. Landry's maintains an in-house inspection program for its
seafood purchases and in the past has not experienced any detriment from
contaminated seafood. However, Landry's can make no assurances that in the
future either seafood contamination or inadequate supplies of seafood might not
have a significant and materially adverse effect on Landry's operations and
profitability.
The restaurant industry is affected by a number of trends, as well as by
competition.
The restaurant industry is affected by changes in consumer tastes and by
national, regional, and local economic conditions and demographic trends. The
performance of individual restaurants may be affected by factors such as
traffic patterns, demographic considerations and the type, number, and location
of competing restaurants. The restaurant industry is intensely competitive
based on the type and quality of food offered, location, and other factors. The
combined company would have many well established competitors with
substantially greater financial resources and longer histories of operation,
including competitors already established in regions into which the combined
company may expand, as well as competitors planning to expand in the same
regions.
Rainforest has restaurant leases with significant base rents which are, in many
instances, non-cancellable.
Rainforest has entered into long-term leases relating to each of its
existing domestic restaurants and has entered into leases with respect to
certain of its planned domestic restaurants. These leases are or will be non-
cancellable by Rainforest (except in limited circumstances) and have or will
have annual base rents ranging from $200,000 to $1.3 million (except for leases
related to certain restaurants). If an existing or future restaurant does not
perform at a profitable level and the decision is made to close the restaurant,
which may be deemed a default under such restaurant's lease, Landry's may
nonetheless be committed to perform Rainforest's obligations under the
applicable lease which would include, among other things, payment of the
respective base rent for the balance of the respective lease term. The leases
related to the Downtown Disney Marketplace and Disney's Animal Kingdom
restaurants are cancellable by the landlord at any time upon sixty days notice
and payment of Rainforest's unamortized value of leasehold improvements and an
amount equal to the net operating income generated by such restaurant for the
previous lease year. A material amount of Rainforest's historical cash flow has
come from Rainforest Cafe restaurants located at Disney properties. With regard
to certain of Rainforest's leases, in the event the tenant fails to achieve
specified gross sales by a certain date, such leases may be terminated by the
landlord. If such a termination were to occur at these locations, Landry's
would lose a Rainforest Cafe restaurant without necessarily receiving an
adequate return on the original investment made by Rainforest.
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There are a number of risks associated with the international operations of
Rainforest.
Rainforest has license agreements pursuant to which its licensees will
develop restaurants in the United Kingdom, Ireland, Mexico, Canada, Japan,
Southeast Asia, South America, France and Hong Kong, and Landry's intends to
enter into other license agreements after the merger. Rainforest's concept is
relatively untested outside of the United States, and no assurance can be given
that any international location will be successful. The success of these
restaurants is also dependent to substantial extent on the reputation that
Rainforest has established, and this reputation may be affected by the
performance of certain licensee-owned restaurants over which Landry's will have
limited control. Any international operations relating to Rainforest will also
be subject to certain external business risks such as exchange rate
fluctuations, political instability and a significant weakening of a local
economy in which a foreign restaurant is located. In addition, it may be more
difficult to register and protect Rainforest's intellectual property rights in
certain foreign countries.
The restaurant industry is subject to extensive regulation.
The restaurant industry is subject to extensive state and local government
regulation relating to the sale of food and alcoholic beverages and to
sanitation, public health, fire and building codes. Termination of the liquor
or other required licenses for any restaurant would adversely affect the
revenues of that restaurant. Restaurant operating costs are also affected by
other government actions that are beyond Landry's control, including workers'
compensation insurance rates, and unemployment and other taxes. Difficulties or
failures in obtaining required licensing or other regulatory approvals could
delay or prevent the opening of a new restaurant. In addition, changes in other
laws and regulations which govern Landry's and Rainforest relationships with
their respective employees, such as minimum wage requirements, overtime and
working conditions and citizenship requirements may also adversely affect the
combined company's operations.
Risks associated with forward looking statements.
This Proxy Statement/Prospectus contains certain forward-looking statements
within the meaning of Section 27A of the Securities Act, and Section 21E of the
Exchange Act, which are intended to be covered by the safe harbors created
thereby. Shareholders are cautioned that all forward-looking statements involve
risks and uncertainty, including without limitation, the ability of Landry's to
continue its expansion strategy (including the consummation of the merger),
changes in costs of food, retail merchandise, labor, and employee benefits, the
ability of Landry's to continue to acquire prime locations at acceptable lease
or purchase terms, as well as general market conditions, competition, and
pricing. Although Landry's believes that the assumptions underlying the
forward-looking statements contained herein are reasonable, any of the
assumptions could be inaccurate, and therefore, there can be no assurance that
the forward-looking statements included in this Proxy Statement/Prospectus will
prove to be accurate. In light of the significant uncertainties inherent in the
forward-looking statements included herein, the inclusion of such information
should not be regarded as a representation by Landry's or any other person that
the objectives and plans of Landry's will be achieved. Our forward-looking
statements may be identified by words such as "believes," "expects,"
"anticipates," "intends," "estimates" or similar expressions.
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THE RAINFOREST SPECIAL MEETING
Date, Time and Place of the Special Meeting
This Proxy Statement/Prospectus is being furnished to Rainforest
shareholders in connection with the solicitation of proxies by Rainforest from
holders of shares of Rainforest common stock for use at a special meeting to be
held at [ , Minnesota], at [ :00 [ ].m. (local time) on [ ], 2000 and
at any adjournments or postponements thereof.
Matters for Consideration
At the special meeting, Rainforest shareholders will be asked to consider
and vote upon the merger proposal and, if necessary, the adjournment proposal.
Approval of the merger proposal by the shareholders of Rainforest is a
condition to Rainforest's participation in the merger. Approval of the
adjournment proposal will permit the adjournment of the meeting to solicit
additional proxies in the event that there are not sufficient votes at the time
of the meeting to approve the merger proposal.
THE RAINFOREST BOARD OF DIRECTORS HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT AND THE MERGER AND BELIEVES THAT THE MERGER AGREEMENT AND THE MERGER
ARE FAIR TO YOU AND IN THE BEST INTERESTS OF RAINFOREST AND ITS SHAREHOLDERS
AND RECOMMENDS THAT YOU VOTE FOR APPROVAL OF THE MERGER PROPOSAL AND THE
ADJOURNMENT PROPOSAL.
Other than the merger proposal and the adjournment proposal, Rainforest does
not expect to ask the shareholders of Rainforest to vote on any other matters
at the special meeting.
Record Date; Quorum
The Rainforest board of directors has fixed the close of business on
[ ], 2000 as the record date for the determination of the holders of shares
of Rainforest common stock entitled to receive notice of and to vote at the
special meeting. The presence, in person or by properly executed proxy, of the
holders of a majority of the votes entitled to be cast by holders of all the
outstanding shares of Rainforest common stock entitled to vote at the special
meeting is necessary to constitute a quorum at the special meeting.
Votes Required
Each Rainforest shareholder of record as of the record date is entitled to
one vote at the special meeting for each share of Rainforest common stock held.
The affirmative vote of the holders of a majority of the shares of Rainforest
common stock outstanding on the record date is required to approve the merger
proposal. The affirmative vote of the holders of a majority of the shares of
Rainforest common stock present (by proxy or voting ballot) at the special
meeting is required to approve the adjournment proposal.
On the record date, there were [ ] shares of Rainforest common stock
outstanding and entitled to vote at the special meeting and approximately [ ]
record holders of shares of Rainforest common stock.
Share Ownership of Management and Certain Shareholders
As of the close of business on the record date, Landry's and its directors
and executive officers and their affiliates held 100 shares of Rainforest
common stock (collectively representing less than 0.01% of the voting power of
Rainforest common stock). Landry's and its executive officers and directors
have indicated that they will vote for approval of the merger proposal and the
adjournment proposal.
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As of the close of business on the record date, Rainforest's directors and
executive officers and their affiliates may be deemed to be the beneficial
owners of [ ] shares of Rainforest common stock (collectively representing
approximately [ ]% of the voting power of Rainforest common stock). Of these
shares of Rainforest common stock, Messrs. Berman and Schussler held
[2,798,702] shares (collectively representing approximately [11.6%] of the
voting power of Rainforest common stock). Pursuant to stockholder agreements
entered into with Landry's, Messrs. Berman and Schussler have agreed to vote
for approval of the merger proposal and the adjournment proposal. The other
executive officers and directors of Rainforest have indicated that they will
also vote for approval of the merger proposal and the adjournment proposal.
Voting and Revocation of Proxies
Shares of Rainforest common stock represented by a proxy properly signed and
received at or prior to the special meeting, unless subsequently revoked, will
be voted in accordance with the instructions given therewith. If a proxy is
submitted without indicating any voting instructions, shares of Rainforest
common stock represented by the proxy will be voted for the merger proposal and
the adjournment proposal.
Instead of submitting your proxy vote with the paper proxy card, you may be
able to vote by telephone or electronically via the Internet. Votes submitted
by telephone must be received by 12:00 noon, New York City time, on [1 business
day prior to special meeting], 2000. Votes submitted electronically via the
Internet must be received by 12:00 noon, Central time, on [1 business day prior
to special meeting], 2000. To submit your vote by telephone, you should call
(800) 240-6326, have your proxy card in hand, enter your company control
number, which is indicated on your proxy card, and follow the instructions
provided to you when you call. To submit your vote electronically via the
Internet, visit www.eproxy.com/rain/, have your proxy card in hand and follow
the instructions to enter your company control number, which is indicated on
your proxy card, and to create an electronic voting instruction form. These
instructions are also contained on the accompanying proxy card.
Abstentions may be specified with respect to the merger proposal and the
adjournment proposal. Shares of Rainforest common stock represented at the
special meeting for which proxies have been received, but with respect to which
holders of shares have abstained on any matter, will be treated as present at
the special meeting for purposes of determining whether or not a quorum is
present for the transaction of all business.
For voting purposes at the special meeting, shares of Rainforest common
stock voted in favor of the merger proposal and the adjournment proposal and
shares of Rainforest common stock in respect of which proxies not containing
voting instructions have been received will be counted as votes in favor of the
merger proposal and the adjournment proposal. The failure to submit a proxy or
the abstention from voting will have the same effect as a vote against the
merger proposal. The failure to submit a proxy will not have the same effect as
a vote for or against the adjournment proposal. If, however, you execute a
proxy and affirmatively abstain from voting on the adjournment proposal, the
effect will be the same as a vote against the adjournment proposal.
Under Minnesota law, shares represented by proxies that reflect abstentions
or "broker non-votes" (i.e., shares held by a broker or nominee which are
represented at the special meeting, but with respect to which such broker or
nominee is not empowered to vote on a particular proposal) will be counted as
shares that are present and entitled to vote for purposes of determining
whether or not a quorum is present for the transaction of business. Shares
represented by proxies that reflect abstentions or "broker non-votes" will have
the same effect as votes against the merger proposal and the adjournment
proposal.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before the proxy is voted by the filing of an instrument
revoking it or of a duly executed proxy bearing a later date with the Secretary
of Rainforest, prior to or at the special meeting, or by voting in person at
the special meeting. Telephone votes may be revoked in the same manner as is
indicated in the foregoing sentence and may also be revoked by subsequent
telephonic votes at any time before 12:00 noon, New York City time, on
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, 2000. Votes submitted electronically via the Internet may be revoked
in the same manner as is indicated in the first sentence of this paragraph and
may also be revoked by subsequent Internet votes at any time before 12:00 noon,
Central time, on , 2000. All written notices of revocation and other
communications with respect to revocation of Rainforest proxies should be
addressed to Rainforest Cafe, Inc., c/o Norwest Shareowner Services, 161 North
Concord Exchange Street, South St. Paul, Minnesota 55075. Attendance at the
special meeting will not, without the submission of a properly completed
ballot, constitute a revocation of a proxy or a previous vote via telephone or
electronically via the Internet.
Solicitation of Proxies
Rainforest will bear its own costs of solicitation of proxies and the cost
of preparing, printing and mailing this Proxy Statement/Prospectus to its
shareholders. Brokers, nominees, fiduciaries and other custodians will be
requested to forward soliciting materials to beneficial owners and will be
reimbursed for their reasonable expenses incurred in sending proxy materials to
beneficial owners. In addition to solicitation by mail, directors, officers and
employees of Landry's and Rainforest, who will not be specifically compensated
for such services, may solicit proxies from the shareholders of Rainforest,
personally or by telephone, telecopy or telegram or other forms of
communication. In addition, Rainforest has retained Innisfree M&A Incorporated
to assist in the solicitation of proxies. The fees to be paid to such firm for
such services by Rainforest are not expected to exceed $15,000, plus reasonable
out-of-pocket costs and expenses.
YOU SHOULD NOT SEND ANY STOCK CERTIFICATES REPRESENTING SHARES OF RAINFOREST
COMMON STOCK WITH YOUR PROXY. INSTEAD, STOCK CERTIFICATES SHOULD BE SENT WITH
YOUR ELECTION FORM/LETTER OF TRANSMITTAL TO THE ADDRESS SPECIFIED THEREON.
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THE MERGER
Background of the Transaction
Throughout 1999, the board of directors of Rainforest periodically evaluated
various strategic initiatives with a view toward increasing shareholder value
and improving its stock price which had fallen dramatically from its all-time
high.
On December 22, 1999, Rainforest entered into a merger agreement with Lakes
Gaming, Inc., pursuant to which Rainforest was to have merged with and into a
wholly owned subsidiary of Lakes Gaming. Following that merger, Rainforest
would have been a wholly owned subsidiary of Lakes Gaming. Lyle Berman, the
Chairman of the Board and Chief Executive Officer of Rainforest, is also the
Chairman of the Board and Chief Executive Officer of Lakes Gaming. Because of
Mr. Berman's membership on both companies' boards of directors, the Rainforest
board of directors formed a special committee of its members to negotiate with
Lakes Gaming and appointed Kenneth Brimmer as Chairman of the special
committee.
The management of Landry's continually reviews its position within the
restaurant industry with the objective of determining what alternatives are
available to further enhance shareholder value. The announcement of
Rainforest/Lakes Gaming transaction attracted Landry's management attention
because Rainforest is a well-known themed restaurant chain.
During the week of January 3, 2000, Landry's consulted with Skadden, Arps,
Slate, Meagher & Flom LLP, its special counsel, in connection with its
consideration of a transaction with Rainforest.
On January 11, 2000, Tilman J. Fertitta, President and Chief Executive
Officer of Landry's, sent a letter to the special committee of the Rainforest
board of directors expressing Landry's interest in exploring a transaction with
Rainforest. On the next day after speaking with representatives of Lakes
Gaming, Mr. Brimmer telephoned Mr. Fertitta to discuss a possible transaction
between the parties.
On January 18, 2000, U.S. Bancorp Piper Jaffray, financial advisor to
Rainforest, telephoned Landry's on behalf of Rainforest to discuss specific
financial aspects of a possible transaction between Landry's and Rainforest. On
the next day, Landry's sent a limited due diligence request to U.S. Bancorp
Piper Jaffray.
On January 24, 2000, Rainforest and Lakes Gaming terminated their merger
agreement and entered into a mutual termination agreement providing for the
termination of their December 22, 1999 merger agreement, the payment by each
party of their respective costs and expenses incurred in connection with the
terminated merger agreement, and for Rainforest's possible payment of a $2
million fee to Lakes Gaming in the event Rainforest consummates a business
combination with a third party prior to July 24, 2000. In addition, the entire
Landry's board was informed of the potential transaction with Rainforest and
the board approved going forward with negotiations with Rainforest.
On January 26, 2000, Mr. Fertitta, Steven L. Scheinthal, Landry's Vice
President of Administration and General Counsel, and Paul S. West, Landry's
Vice President of Finance and Chief Financial Officer, traveled to Minnesota to
meet with Mr. Berman and Mr. Brimmer to begin negotiations on a possible
transaction between Landry's and Rainforest.
On the next day, Messrs. Fertitta, Scheinthal and West met with Mr. Brimmer
and other Rainforest executives and employees in an effort to determine the
potential synergies between Landry's and Rainforest's businesses and the
potential benefits of a merger between Landry's and Rainforest.
On January 29 and 30, telephone discussions and negotiations continued
between Messrs. Fertitta, Berman and Brimmer.
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On January 31, 2000, Landry's sent a proposal to Rainforest, outlining terms
for a proposed transaction with Rainforest, and negotiations between Messrs.
Fertitta, Berman and Brimmer continued. As negotiations progressed, on February
1, 2000, Landry's sent a revised due diligence request to Rainforest.
On February 2, 2000, a Landry's due diligence team arrived at Rainforest's
corporate headquarters to begin a three day due diligence investigation. In
addition, on February 2, Skadden, Arps, forwarded a first draft of the merger
agreement to Landry's for review by Landry's executives, and the Landry's board
approved Banc of America Securities LLC as financial advisor to Landry's for
purposes of issuing a fairness opinion in connection with the potential merger
with Rainforest. Banc of America Securities LLC was formally retained the next
day as financial advisor to Landry's and to give the fairness opinion to
Landry's.
On February 3, 2000, Landry's and Rainforest entered into a customary
confidentiality agreement with respect to the diligence information exchanged
between them.
On February 3, 2000, a draft merger agreement was distributed to all parties
involved in the potential merger in order to begin the process of negotiating
the details of the agreement. Also on February 3, the form of stockholder
agreement and employee termination, consulting and non-competition agreement
(the "non-competition agreement") were distributed to all relevant parties in
order to begin the process of negotiating the details of such agreements.
On February 4, 2000, representatives of Rainforest arrived at Landry's
corporate headquarters in Houston, Texas in order to perform a due diligence
review of Landry's. Later during the day, Landry's due diligence team completed
its review of Rainforest and returned to Houston.
On February 6, 2000, in order to determine the feasability of effecting a
business combination between Landry's and Rainforest, Mr. Fertitta and Mr.
Brimmer had extensive telephone conversations regarding Rainforest's financial
performance and operating results. In addition, Rainforest completed its due
diligence review of Landry's and returned to Minneapolis.
Representatives of Landry's and Rainforest met in Minneapolis from February
7th through the 9th to finalize negotiations relating to the merger agreement,
the stockholder agreements and the non-competition agreements.
On February 7, 2000, there was a telephonic meeting of the Landry's board of
directors to update the directors on the negotiations with Rainforest and the
state of the proposed transaction, Banc of America Securities LLC delivered its
fairness opinion to the Landry's board and Mr. Scheinthal made a presentation
to the Landry's board on the terms and conditions of the proposed merger
agreement, stockholder agreements and non-competition agreements.
On February 8, 2000, there was a meeting of the Rainforest board of
directors at Rainforest corporate headquarters in Hopkins, Minnesota to update
the directors on the negotiations with Landry's, and the Rainforest board
received a financial presentation from and the fairness opinion of U.S. Bancorp
Piper Jaffray. A representative of Maslon Edelman Borman & Brand LLP, counsel
to Rainforest, was also in attendance and summarized the merger agreement, and
advised the Rainforest board of its fiduciary duties under Minnesota law in
connection with its consideration of the merger.
By February 9, 2000, the parties came to agreement on all remaining open
issues relating to the merger agreement, stockholder agreements and non-
competition agreements.
At a special meeting of Landry's board of directors held on February 9,
2000, Mr. Fertitta reviewed the changes of the terms of the proposed merger
agreement, stockholder agreements and non-competition agreements since the
February 7th meeting. Following this presentation by Mr. Fertitta, and a
discussion regarding the terms and conditions of the aforementioned agreements,
Landry's board of directors approved the merger agreement and the merger, the
stockholder agreements and the non-competition agreements.
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At a special telephone meeting of the Rainforest board of directors held on
February 9, 2000 to consider the merger, Mr. Brimmer updated the board on the
resolution of the remaining open issues. After due consideration, the
Rainforest board of directors unanimously approved the merger agreement and the
merger and determined that the merger agreement and the merger were fair to and
in the best interest of Rainforest and its shareholders and determined to
recommend to Rainforest shareholders the approval of the merger proposal and
the adjournment proposal. In addition, by separate action, a committee of all
of the non-employee Rainforest directors, voting in accordance with applicable
provisions of Minnesota anti-takeover statutes, unanimously approved the merger
agreement and the merger and the stockholder agreements to be signed
concurrently with the merger agreement.
On February 9, 2000, following approval by their boards, Landry's and
Rainforest exchanged executed merger agreements, and the relevant parties
exchanged executed stockholder agreements and non-competition agreements, and
each of Landry's and Rainforest issued a press release relating to the proposed
merger immediately thereafter which followed the closing of trading of the NYSE
and NASDAQ.
Shortly following public announcement of the Landry's/Rainforest
transaction, Rainforest received an unsolicited inquiry from a third party
relating to its interest in exploring a possible transaction with Rainforest.
Based on the nonsolicitation provisions of the Landry's/Rainforest merger
agreement, Rainforest responded that it was not in a position to discuss the
inquiry.
Reasons for the Merger
Landry's Reasons for the Merger
Landry's board of directors believes that the combined company following the
merger would have the potential to realize long-term positive operating and
financial results and would be in a stronger competitive position than either
company alone. Landry's board of directors has identified additional potential
mutual benefits of the merger that it believes will contribute to the success
of the combined company. These potential benefits include the following:
. the combination of Landry's and Rainforest will create a stronger, more
diversified restaurant company, and the increased cash flow could provide
the shareholders of the combined company with greater resources to pursue
future growth opportunities
. combining Landry's and Rainforest may strengthen Landry's current market
position in the restaurant industry
. adding the Rainforest Cafe brand to Landry's existing business will allow
Landry's to continue its expansion in the "theme" restaurant industry
. the Rainforest Cafe concept is superior to other less successful "theme"
restaurants and includes elements that create ongoing and continued
consumer interest
. Rainforest has developed a nationally and internationally recognized
brand name and restaurant concept with a limited number of restaurants
. the creative and innovative forces in the combined company have the
potential to create a dynamic and powerful element in the restaurant
industry
. the high profile locations of several Rainforest Cafe restaurants
. several Rainforest Cafe restaurants operate at extremely high volumes
with stable revenues and nearly all Rainforest Cafe restaurants generate
positive cash flow and, based upon the purchase price, can generate a
positive return on Landry's investment
. the combined company will have the opportunity for cost savings and the
realization of synergies
24
<PAGE>
In the course of deliberations, Landry's board of directors reviewed with
Landry's management and outside advisors a number of additional factors
relevant to the merger, including:
. historical information concerning Landry's and Rainforest's respective
business, financial performance and condition, operations, management and
competitive position, including public reports concerning results of
operations during the most recent fiscal year for each company filed with
the SEC
. Landry's management's view as to the financial condition, results of
operations and business of Landry's and Rainforest before and after
giving effect to the merger based on management due diligence and
publicly available earnings estimates
. current financial market conditions and historical market prices,
volatility and trading information with respect to shares of Landry's
common stock and Rainforest common stock
. the impact of the merger on Landry's shareholders, customers and
employees
. the analyses and presentations of Banc of America Securities LLC,
financial advisor to Landry's
. the terms and conditions of the merger agreement, the stockholder
agreements and the non-competition agreements
Landry's board of directors also identified and considered a variety of
potentially negative factors in its deliberations concerning the merger,
including, but not limited to:
. the difficulties Rainforest management has had in growing Rainforest's
business and the possibility that a change in management would not serve
to reverse this trend
. the decline in sales of many Rainforest Cafe restaurants after their
initial period of opening
. the decline in popularity of the "theme" restaurant business generally
. the risks that the potential benefits sought in the merger might not be
fully realized
. the substantial charges to be incurred in connection with the merger,
including costs of integrating the businesses and transaction expenses
arising from the merger
. the other risks described under "Risk Factors" beginning on page [ ] of
this Proxy Statement/Prospectus
Landry's board of directors believed that these risks were outweighed by the
potential benefits of the merger.
The foregoing discussion is not exhaustive of all factors considered by
Landry's board of directors. Each member of Landry's board may have considered
different factors, and Landry's board evaluated these factors as a whole and
did not quantify or otherwise assign relative weights to factors considered.
Rainforest's Reasons for the Merger and Board Recommendation
Rainforest's board of directors believes that the combined company following
the merger would have the potential to realize long-term positive operating and
financial results and would be in a stronger competitive position than either
company alone. Rainforest's board of directors has identified the following
additional potential mutual benefits of the merger that it believes will
contribute to the success of the combined company:
. institutional investor sentiment seems to currently favor larger
capitalized companies that can provide greater investment liquidity, and
the merger with Landry's can create a large, well capitalized upper-tier
restaurant company
. Landry's management and personnel have experienced rapid growth, Landry's
operations are performing very well and the financial trends for Landry's
are significantly positive
25
<PAGE>
. Rainforest management believes that the Rainforest Cafe concept can draw
on Landry's 20 years of strong restaurant and general business acumen,
expertise and leadership
. the combined companies can effectively achieve substantial synergies of
efforts and cost savings
. the merger of the two companies will eliminate the pressure to grow the
Rainforest Cafe concept through expansion, and the combined company's
management can focus on improving the performance of the existing
Rainforest Cafe restaurant operations
. Rainforest's shareholders will have the opportunity to participate in the
potential for growth of the combined company after the merger
. the merger may enhance the opportunity for potential realization of a
long-term and positive presence in the extremely competitive restaurant
industry
. the exchange ratio in the merger represented a significant premium over
the closing price for Rainforest common stock on February 8, 2000, the
last trading day preceding the day on which Landry's and Rainforest
entered into the merger agreement
In the course of deliberations, the Rainforest board reviewed with
Rainforest's management and outside advisors a number of additional factors
relevant to the merger, including:
. historical information concerning Landry's and Rainforest's respective
businesses, financial performance and condition, operations, management
and competitive position, including public reports concerning results of
operations during the most recent fiscal year for each company filed with
the SEC
. Rainforest management's view as to the financial condition, results of
operations and businesses of Landry's and Rainforest before and after
giving effect to the merger based on management due diligence and
publicly available earnings estimates
. current financial market conditions and historical market prices,
volatility and trading information with respect to Landry's common stock
and Rainforest common stock
. the consideration to be received by Rainforest shareholders in the merger
and an analysis of the market value of the Landry's common stock to be
issued in exchange for 65% of the shares of Rainforest common stock in
light of comparable merger transactions
. the belief that the terms of the merger agreement, including the parties'
representations, warranties and covenants, and the conditions to the
parties' respective obligations, are reasonable
. Rainforest management's view as to the potential for other third parties
to enter into strategic relationships with or to acquire Rainforest
. the impact of the merger on Rainforest's shareholders, customers and
employees
. the analyses and presentations of U.S. Bancorp Piper Jaffray, financial
advisor to Rainforest, and its written opinions to the effect that, as of
February 8, 2000 and based upon and subject to the various considerations
set forth in its opinion, the consideration proposed to be paid by
Landry's was fair from a financial point of view to Rainforest's
shareholders
. the terms and conditions of the stockholder agreements and the non-
competition agreements
Rainforest's board of directors also considered the terms of the merger
agreement regarding Rainforest's rights to consider and negotiate other
strategic transaction proposals, as well as the possible effects of the
provisions regarding termination fees. In addition, Rainforest's board of
directors noted that the merger is expected to be tax-free to Rainforest and
may be partially tax-free to its shareholders. Rainforest's board of directors
also considered various alternatives to the merger, including remaining as an
independent company.
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<PAGE>
Rainforest's board of directors believed that these factors, including its
review of the terms of the merger agreement, supported its unanimous
recommendation of the merger when viewed together with the risks and potential
benefits of the merger.
Rainforest's board of directors also identified and considered a variety of
potentially negative factors in its deliberations concerning the merger,
including, but not limited to:
. the risks that the potential benefits sought in the merger might not be
fully realized
. the possibility that the merger might not be completed and the effect of
public announcement of the merger on Rainforest's ability to attract and
retain key management personnel
. the substantial charges to be incurred in connection with the merger,
including costs of integrating the businesses and transaction expenses
arising from the merger
. the other risks described under "Risk Factors" beginning on page [ ] of
this Proxy Statement/Prospectus
Rainforest's board of directors believed that these risks were outweighed by
the potential benefits of the merger.
The foregoing discussion is not exhaustive of all factors considered by
Rainforest's board of directors. Each member of Rainforest's board may have
considered different factors, and Rainforest's board evaluated these factors as
a whole and did not quantify or otherwise assign relative weights to factors
considered.
Recommendation of the Rainforest Board of Directors
The Rainforest Board of Directors has unanimously approved the merger
agreement and the merger and believes that the merger agreement and the merger
are fair to you and in the best interest of Rainforest and its shareholders and
recommends that Rainforest shareholders vote for the approval of the merger
proposal and the adjournment proposal.
Opinion of Financial Advisor to Rainforest
Rainforest retained U.S. Bancorp Piper Jaffray to render to the board of
directors an opinion as to the fairness, from a financial point of view, of the
aggregate consideration to be received by Rainforest shareholders in the
merger.
On February 8, 2000, U.S. Bancorp Piper Jaffray delivered to the board of
directors of Rainforest its opinion, that as of that date and based upon and
subject to the assumptions, factors and limitations set forth in the written
opinion and described below, the consideration proposed to be received by
Rainforest shareholders in the proposed merger was fair, from a financial point
of view, to those shareholders. A copy of the U.S. Bancorp Piper Jaffray
written opinion is attached to this Proxy Statement/Prospectus as Annex B and
is incorporated by reference into this Proxy Statement/Prospectus.
While U.S. Bancorp Piper Jaffray rendered its opinion and provided certain
analyses to the Rainforest board of directors, U.S. Bancorp Piper Jaffray was
not requested to and did not make any recommendation to the Rainforest board of
directors as to the specific form or amount of the consideration to be received
by Rainforest shareholders in the proposed merger, which was determined through
negotiations between Rainforest and Landry's. Nor does the opinion of U.S.
Bancorp Piper Jaffray address the relative amounts of cash or stock any
shareholder may have the right to elect or may receive. U.S. Bancorp Piper
Jaffray's written opinion, which was directed to the Rainforest board of
directors, addresses only the fairness, from a financial point of view, of the
proposed aggregate consideration to be received by Rainforest shareholders in
the proposed merger, does not address Rainforest's underlying business decision
to participate in the merger and does not constitute a recommendation to any
Rainforest shareholder as to how a shareholder should vote with respect to the
merger.
27
<PAGE>
In arriving at its opinion, U.S. Bancorp Piper Jaffray's review included:
. a draft of the merger agreement dated February 3, 2000 and oral
statements from Rainforest concerning the aggregate amount of cash and
Landry's stock proposed to be exchanged in the merger
. selected financial, operating and business information related to
Landry's and Rainforest
. publicly available market and securities data of Landry's, Rainforest and
of selected public companies deemed comparable to Landry's and Rainforest
. to the extent publicly available, financial information relating to
selected transactions deemed comparable to the merger
. internal financial information of Rainforest and Landry's prepared for
financial planning purposes and furnished by Rainforest and Landry's
management
In addition, U.S. Bancorp Piper Jaffray visited the headquarters of
Rainforest and conducted discussions with members of senior management of both
Landry's and Rainforest concerning the financial condition, current operating
results and business outlook of Landry's, Rainforest and the combined company
following the merger.
In delivering its opinion to the board of directors of Rainforest, U.S.
Bancorp Piper Jaffray prepared and delivered to the Rainforest board written
materials containing various analyses and other information material to the
opinion. A summary of the analyses contained in the materials follows.
Implied Consideration
Giving effect to the aggregate amounts of cash and Landry's common stock to
be exchanged in the merger, the resulting implied value of Landry's common
stock and cash consideration of $5.49 per share of Rainforest common stock
(based on the closing trading price for Landry's common stock on February 7,
2000 of $9.69) and the outstanding shares of Rainforest common stock and common
stock equivalents, U.S. Bancorp Piper Jaffray calculated the aggregate implied
value of the stock and cash consideration payable in the merger to holders of
shares of Rainforest common stock to be approximately $131.2 million. U.S.
Bancorp Piper Jaffray also calculated that shareholders of Rainforest would be
issued an aggregate of 26.4% of the total Landry's common stock and common
stock equivalents outstanding immediately after the merger. U.S. Bancorp Piper
Jaffray also calculated the implied "company value" (equity value plus debt
less cash) of Rainforest to be $96.7 million.
Rainforest Market Analysis
U.S. Bancorp Piper Jaffray reviewed the stock trading history of Rainforest
common stock. U.S. Bancorp Piper Jaffray presented the recent common stock
trading information contained in the following table:
<TABLE>
<S> <C>
Closing price on February 7, 2000.................................. $4.00
30 calendar day closing average.................................... 4.10
60 calendar day closing average.................................... 3.94
90 calendar day closing average.................................... 4.12
180 calendar day closing average................................... 4.92
52 week high trade................................................. 7.44
52 week low trade.................................................. 3.13
</TABLE>
U.S. Bancorp Piper Jaffray also presented selected price and volume
distribution data of Rainforest against the comparable group described below.
In considering the prevailing market for Rainforest common stock, U.S.
Bancorp Piper Jaffray noted that Rainforest has a small market capitalization,
limited trading volume, limited institutional sponsorship and
28
<PAGE>
diminishing research sponsorship. Further, U.S. Bancorp Piper Jaffray noted
that Rainforest restaurants have been experiencing negative same store sales, a
history of earnings shortfalls and declining store operating profitability.
Rainforest Comparable Company Analysis
U.S. Bancorp Piper Jaffray compared financial information and valuation
ratios relating to Rainforest to corresponding data and ratios from nine
publicly traded companies deemed comparable to Rainforest. This group included
Avado Brands Inc., Cooker Restaurant, Dave & Busters Inc., Il Fornaio America
Corp., Landry's, Lone Star Steakhouse Saloon, Rare Hospitality Int'l Inc.,
Roadhouse Grill Inc. and Uno Restaurant Corp. This group was selected from
companies with a market capitalization greater than $12.3 million and less than
$350 million that operate in the casual-dining, restaurant industry and were
restaurant companies otherwise deemed comparable by U.S. Bancorp Piper Jaffray.
This analysis produced multiples of selected valuation data as follows:
<TABLE>
<CAPTION>
Comparable Companies
-----------------------
Rainforest(1) Low Mean Median High
------------- ---- ----- ------ -----
<S> <C> <C> <C> <C> <C>
Company value to latest twelve months
revenue(2).............................. 0.4x 0.4x 0.6x 0.6x 0.8x
Comparable value to estimated 1999
revenue(2).............................. 0.4x 0.3x 0.6x 0.6x 0.8x
Company value to estimated 2000
revenue(2).............................. 0.3x 0.3x 0.5x 0.6x 0.7x
Company value to latest twelve months
earnings before interest, taxes,
depreciation and amortization........... 2.8x 2.7x 5.0x 5.1x 6.5x
Company value to latest twelve months
earnings before interest and taxes...... 6.2x 4.6x 8.8x 8.9x 10.5x
Share price to estimated 1999 net income
per share(2)............................ 12.5x 7.8x 11.9x 10.9x 16.0x
Share price to estimated 2000 net income
per share(2)............................ 15.9x 5.9x 9.8x 10.2x 13.1x
</TABLE>
- --------
(1) Based on an implied value of merger consideration as described above under
"Implied Consideration."
(2) Estimates of revenue and net income for Rainforest are based on a January 3
fiscal year end and for comparable companies are based on a calendar year.
Merger and Acquisition Analysis
U.S. Bancorp Piper Jaffray reviewed 20 merger and acquisition transactions
(the "Comparable Transactions") that it deemed comparable to the merger. It
selected these transactions by searching SEC filings, public company
disclosures, press releases, industry and popular press reports, databases and
other sources and by applying the following criteria:
. transactions with a company value greater than $18.6 million
. transactions which were not repurchases or spin-offs
. transactions in which the target company operates in the restaurant
industry which were deemed comparable by U.S. Bancorp Piper Jaffray
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<PAGE>
U.S. Bancorp Piper Jaffray compared the resulting multiples of selected
valuation data to multiples for Rainforest derived from the implied value
payable in the merger.
<TABLE>
<CAPTION>
Comparable Transactions
------------------------
Rainforest Low Mean Median High
---------- ----- ----- ------ -----
<S> <C> <C> <C> <C> <C>
Company value to latest twelve months
revenue................................... 0.4x 0.2x 0.7x 0.6x 1.3x
Company value to latest twelve months
earnings before interest, taxes,
depreciation and amortization............. 2.8x 4.2x 6.0x 6.0x 8.8x
Company value to latest twelve months
earnings before interest and taxes........ 6.2x 6.1x 12.1x 12.1x 18.7x
Equity value to latest twelve months net
income.................................... 10.9x 13.0x 20.5x 19.5x 32.6x
</TABLE>
Premiums Paid Analysis
U.S. Bancorp Piper Jaffray reviewed publicly available information for two
groups of selected completed transactions including control acquisitions in the
restaurant industry, as well as acquisitions with similar parameters outside of
the restaurant industry, to determine the implied premiums payable in the
transactions over recent trading prices. It selected these transactions by
searching SEC filings, public company disclosures, press releases, industry and
popular press reports, databases and other sources and by applying the
following criteria:
Restaurant Industry Transactions
. transactions with a company value greater than $18.6 million
. transactions that were completed between January 1, 1997 and February 7,
2000
Non-Restaurant Industry Specific Transactions
. transactions with a company value greater than $25 million
. transactions that did not involve financial institutions
. transactions that were completed between January 1, 1999 and February 7,
2000
The table below shows a comparison of premiums paid in these transactions to
the premium that would be paid to Rainforest shareholders based on the implied
value payable in the merger. The premium calculations for Rainforest common
stock are based upon an assumed announcement date of February 8, 2000.
Restaurant Industry Transactions
<TABLE>
<CAPTION>
Implied Premium (Discount)
-------------------------------------
Comparable Transactions
--------------------------
Rainforest Low Mean Median High
---------- ----- ---- ------ -----
<S> <C> <C> <C> <C> <C>
One day before announcement....... 37.3% (33.3%) 29.9% 15.9% 132.0%
One week before announcement...... 35.1 (35.5) 33.0 16.6 169.8
One month before announcement..... 37.3 (7.7) 44.8 28.1 176.2
</TABLE>
Non-Restaurant Industry Specific Transactions
<TABLE>
<CAPTION>
Implied Premium (Discount)
-------------------------------------
Comparable Transactions
--------------------------
Rainforest Low Mean Median High
---------- ----- ---- ------ -----
<S> <C> <C> <C> <C> <C>
One day before announcement....... 37.3% (72.7%) 30.7% 25.0% 384.8%
One week before announcement...... 35.1 (74.7) 38.6 32.5 379.0
One month before announcement..... 37.3 (71.0) 50.5 42.8 386.3
</TABLE>
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<PAGE>
Pro Forma Analysis
U.S. Bancorp Piper Jaffray analyzed pro forma effects resulting from the
impact of the merger on the projected earnings per share of the combined
company at and for the fiscal years ending 2000, 2001, 2002, 2003 and 2004
using management estimates for Rainforest and publicly available analyst
estimates for Landry's. Considering certain synergies that management estimates
the combined company may realize following consummation of the transaction,
U.S. Bancorp Piper Jaffray determined that the merger could be accretive in
2000, 2001, 2002, 2003 and 2004 to the projected stand-alone earnings per share
of Landry's.
Rainforest Discounted Cash Flow Analysis
U.S. Bancorp Piper Jaffray performed a discounted cash flow analysis for
Rainforest in which it calculated the present value of the projected
hypothetical future cash flows of Rainforest using internal financial planning
data prepared by Rainforest management. U.S. Bancorp Piper Jaffray estimated a
range of theoretical values for Rainforest based on the net present value of
its implied annual cash flows and a terminal value for Rainforest in 2004
calculated based upon a multiple of EBITDA (i.e., earnings before interest,
taxes, depreciation and amortization). U.S. Bancorp Piper Jaffray applied a
range of discount rates of 19% to 23% and a range of terminal value multiples
of 3.0x to 5.0x of forecasted 2004 EBITDA. This analysis yielded the following
results:
<TABLE>
<CAPTION>
Per Share Equity Value of Rainforest
------------------------------------
<S> <C>
Low............................................................. $5.18
Mid............................................................. 5.96
High............................................................ 6.86
<CAPTION>
Aggregate Equity Value of Rainforest (in thousands)
---------------------------------------------------
<S> <C>
Low............................................................. $123,073
Mid............................................................. 142,398
High............................................................ 164,592
</TABLE>
Analysis of Landry's Common Stock
U.S. Bancorp Piper Jaffray reviewed general background information
concerning Landry's, including recent financial and operating results and
outlook, the price performance of Landry's common stock over the previous
twelve months relative to a comparable company group, and the stock price and
volume over selected periods. U.S. Bancorp Piper Jaffray also reviewed the
stock trading history of Landry's common stock at the dates or for the periods
indicated below.
<TABLE>
<S> <C>
Closing price on February 7, 2000.................................. $9.69
30 calendar day closing average.................................... 8.78
60 calendar day closing average.................................... 8.77
90 calendar day closing average.................................... 8.69
180 calendar day closing average................................... 8.35
52 week high trade................................................. 10.88
52 week low trade.................................................. 4.66
</TABLE>
In reaching its conclusion as to the fairness of the merger consideration
and in its presentation to the Rainforest board of directors, U.S. Bancorp
Piper Jaffray did not rely on any single analysis or factor described above,
did not assign relative weights to the analyses or factors considered by it, or
make any conclusion as to how the results of any given analysis, taken alone,
supported its opinion. The preparation of a fairness opinion is a complex
process and not necessarily susceptible to partial analysis or summary
description. U.S. Bancorp Piper Jaffray believes that its analyses must be
considered as a whole and that selection of portions of its analyses and of the
factors considered by it, without considering all of the factors and analyses,
would create a misleading view of the processes underlying the opinion.
31
<PAGE>
The analyses of U.S. Bancorp Piper Jaffray are not necessarily indicative of
actual values or future results, which may be significantly more or less
favorable than suggested by the analyses. Analyses relating to the value of
companies do not purport to be appraisals or valuations or necessarily reflect
the price at which companies may actually be sold. No company or transaction
used in any analysis for purposes of comparison is identical to Rainforest,
Landry's or the merger. Accordingly, an analysis of the results of the
comparisons is not mathematical; rather, it involves complex considerations and
judgments about differences in the companies to which Rainforest and Landry's
were compared and other factors that could affect the public trading value of
the companies.
For purposes of its opinion, U.S. Bancorp Piper Jaffray relied upon and
assumed the accuracy, completeness and fairness of the financial statements and
other information provided to it by Rainforest and Landry's or otherwise made
available to it and did not assume responsibility for the independent
verification of that information. U.S. Bancorp Piper Jaffray relied upon
statements of the management of Rainforest and Landry's that the information
provided to it by Rainforest and Landry's was prepared on a reasonable basis,
the financial planning data and other business outlook information reflects the
best currently available estimates of management, and management was not aware
of any information or facts that would make the information provided to U.S.
Bancorp Piper Jaffray incomplete or misleading.
For purposes of its opinion, U.S. Bancorp Piper Jaffray assumed that the
merger will be treated as a purchase for accounting purposes. U.S. Bancorp
Piper Jaffray also assumed that, in the course of obtaining the necessary
regulatory approvals and consents for the merger, no restrictions will be
imposed that have a material adverse effect on the contemplated benefits of the
merger to Rainforest and its shareholders.
In arriving at its opinion, U.S. Bancorp Piper Jaffray did not perform any
appraisals or valuations of any specific assets or liabilities of Rainforest or
Landry's, and was not furnished with any such appraisals or valuations. U.S.
Bancorp Piper Jaffray made no physical inspection of the properties or assets
of Rainforest or Landry's. U.S. Bancorp Piper Jaffray was not authorized to
solicit, and did not solicit, any other party relative to a possible business
combination with Rainforest. U.S. Bancorp Piper Jaffray analyzed Rainforest as
a going concern and accordingly expressed no opinion as to the liquidation
value of any entity. U.S. Bancorp Piper Jaffray expressed no opinion as to the
price at which shares of Rainforest or Landry's common stock have traded or at
which the shares of Rainforest, Landry's or the combined company may trade at
any future time. U.S. Bancorp Piper Jaffray undertook no independent analysis
of any pending or threatened litigation, possible unasserted claims or other
contingent liabilities, to which either Rainforest or Landry's or their
respective affiliates are a party or may be subject, and made no assumption
concerning and therefore did not consider the possible assertion of claims,
outcomes or damages arising from any such matters. The opinion is based on
information available to U.S. Bancorp Piper Jaffray and the facts and
circumstances as they existed and were subject to evaluation on the date of the
opinion. Events occurring after that date could materially affect the
assumptions used in preparing the opinion. Except as provided in the engagement
letter between Rainforest and U.S. Bancorp Piper Jaffray dated December 16,
1999, as amended February 8, 2000, U.S. Bancorp Piper Jaffray has not
undertaken to, and is not obligated to, affirm or reissue its opinion or
otherwise comment on any events occurring after the date it was given.
U.S. Bancorp Piper Jaffray, as a customary part of its investment banking
business, evaluates businesses and their securities in connection with mergers
and acquisitions, underwritings and secondary distributions of securities,
private placements and valuations for estate, corporate and other purposes. The
Rainforest board of directors selected U.S. Bancorp Piper Jaffray because of
its expertise, reputation and familiarity with the restaurant industry. In the
ordinary course of its business, U.S. Bancorp Piper Jaffray and its affiliates
may actively trade securities of Rainforest and Landry's for their own accounts
or the accounts of their customers and, accordingly, may at any time hold a
long or short position in such securities.
Under the terms of the engagement letter between Rainforest and U.S. Bancorp
Piper Jaffray dated December 16, 1999, as amended February 8, 2000, Rainforest
paid U.S. Bancorp Piper Jaffray a retainer fee of $50,000, and $250,000 upon
rendering its opinion with respect to the contemplated transaction between
Rainforest and Lakes Gaming. The engagement letter also required Rainforest to
pay U.S. Bancorp Piper
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<PAGE>
Jaffray a fee equal to the sum of $400,000 plus 2.0% of the product of the
amount (if any) by which the per share price to be received by Rainforest
shareholders exceeds $5.00 per share multiplied by the number of fully diluted
shares of Rainforest. This fee however was to be reduced by the retainer fee
paid for the rendering of the fairness opinion. In contemplation of the
Landry's transaction, the engagement letter was amended and Rainforest has
agreed to pay U.S. Bancorp Piper Jaffray $150,000 upon rendering its opinion
and $50,000 if the merger is consummated prior to August 31, 2001. Whether or
not the merger with Landry's is consummated, Rainforest has agreed to pay the
reasonable out-of-pocket expenses of U.S. Bancorp Piper Jaffray and to
indemnify U.S. Bancorp Piper Jaffray against liabilities incurred. These
liabilities include liabilities under the federal securities laws in connection
with the engagement of U.S. Bancorp Piper Jaffray by Rainforest.
Interests of Officers and Directors in the Transaction
In considering the recommendations of the Rainforest board of directors with
respect to the merger proposal and the adjournment proposal, the holders of
shares of Rainforest common stock should be aware that certain members of
management and of the Rainforest board of directors have interests in the
transaction that may be different from, or in addition to, the interests of the
holders of shares of Rainforest common stock, generally. Landry's board of
directors and the Rainforest board of directors were aware of such interests
and considered them, among other matters, in approving the merger agreement,
the merger and the related transactions.
Each of Lyle Berman, Kenneth Brimmer, Steven Schussler and Ercument Ucan is
party to an employee termination, consulting and non-competition agreement with
Landry's (each of which is only effective upon consummation of the merger). In
consideration of the consulting, non-competition and other provisions of the
agreement (including cancellation of most or all of their options to acquire
shares of Rainforest common stock at the effective time of the merger if they
have not exercised their options by such time), each of the above-named
individuals will be paid an aggregate amount of $1.5 million, $1.4 million of
which is payable at the effective time of the merger and the balance of
$100,000 is payable ninety days following the effective time. See "THE EMPLOYEE
TERMINATION, CONSULTING AND NON-COMPETITION AGREEMENTS."
In addition, upon consummation of the merger, all outstanding Rainforest
options to purchase shares of Rainforest common stock will vest by virtue of
their terms and become fully exercisable options to acquire shares of Landry's
common stock.
As of [to come], 2000, the latest practicable date prior to the printing of
this Proxy Statement/Prospectus, Messrs. Berman, Brimmer, Schussler and Ucan
held 750,000, 300,000, 164,000 and 511,250 options to purchase shares of
Rainforest common stock, respectively. The average exercise price of such
options held by Messrs. Berman, Brimmer, Schussler and Ucan was $[to come],
$[to come], $[to come] and $[to come], respectively. Messrs. Berman, Brimmer,
Schussler and Ucan are each party to an employee termination, consulting and
non-competition agreement with Landry's, pursuant to which all options held by
them which are not exercised by the effective time of the merger will be
cancelled at such time (other than 76,500 and 75,000 options with respect to
Messrs. Schussler and Ucan, respectively). As of February 8, 2000, the last
trading day prior to the announcement of the proposed merger transaction, the
closing market price of Rainforest common stock was $4.0625, and the exercise
price of 39,000 and 386,250 options held by Messrs. Schussler and Ucan,
respectively, was at or below the closing price of Rainforest common stock on
such date. The average exercise price of such "in the money" options of Messrs.
Schussler and Ucan were $[to come] and $[to come], respectively. No options
held by either of Messrs. Berman or Brimmer were at or below closing market
price of Rainforest common stock on such date. As of [to come], 2000, the
closing market price of Rainforest common stock was $[to come], and the
exercise price of [to come], [to come], [to come] and [to come] options held by
Messrs. Berman, Brimmer, Schussler and Ucan, respectively, was at or below the
closing price of Rainforest common stock on such date. The average exercise
price of such "in the money" options held by Messrs. Berman, Brimmer, Schussler
and Ucan was $[to come], $[to come], $[to come] and $[to come], respectively.
As of [to come], 2000, the latest practicable date prior to the printing of
this Proxy Statement/Prospectus, the executive officers and directors of
Rainforest (other than Messrs. Berman, Brimmer, Schussler and Ucan)
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held an aggregate of 461,376 options to purchase shares of Rainforest common
stock. The average exercise price of such options was $[to come]. As of
February 8, 2000, the last trading day prior to the announcement of the
proposed merger transaction, the closing market price of Rainforest common
stock was $4.0625, and the exercise price of 152,500 options held by such
executive officers and directors was at or below the closing price of
Rainforest common stock on such date. The average exercise price of such "in
the money" options was $[to come]. As of [to come], 2000, the latest
practicable date prior to the printing of this Proxy Statement/Prospectus, the
closing market price of Rainforest common stock was $[to come], and the
exercise price of [to come] options held by such executive officers and
directors was at or below the closing price of Rainforest common stock on such
date. The average exercise price of such "in the money" options was $[to come].
As a result of the merger, at least 231,424 options held by such executive
officers and directors will vest.
The merger agreement also provides current and former officers and directors
with certain rights to indemnification as described below. See "THE MERGER
AGREEMENT--Certain Covenants of Landry's."
Pursuant to the terms of a mutual termination agreement, dated as of January
24, 2000, by and between Rainforest and Lakes Gaming, Inc., Rainforest may be
obligated to pay Lakes Gaming a fee of $2 million in the event Rainforest
consummates a business combination at any time prior to July 24, 2000. The
mutual termination agreement was approved by the special committee of the
Rainforest board of directors which was formed to consider the Lakes Gaming
transaction. The Landry's merger, if consummated prior to July 24, 2000 will
result in the payment of the $2 million fee by Rainforest to Lakes Gaming. Lyle
Berman, Joel Waller and David Rogers are each members of the board of directors
of Rainforest, and are also members of the board of directors of Lakes Gaming,
although none of these individuals served on the Rainforest special committee
that was formed to consider the Lakes Gaming transaction or the mutual
termination agreement.
Completion and Effectiveness of the Merger
The merger will be completed when all of the conditions to completion of the
merger are satisfied or waived, including approval of the merger proposal by
the shareholders of Rainforest. The merger will become effective upon the
filing of a certificate of merger with the Secretary of State of the State of
Delaware and the filing of articles of merger with the Secretary of State of
the State of Minnesota.
We are working towards completing the merger as quickly as possible. We hope
to complete the merger during the second quarter of 2000.
Structure of the Merger and Conversion of Rainforest Common Stock
In accordance with the merger agreement and Delaware and Minnesota law,
Rainforest will be merged with and into LSR Acquisition Corp., a newly-formed
Delaware corporation and wholly-owned subsidiary of Landry's. As a result of
the merger, the separate corporate existence of Rainforest will cease and LSR
will survive the merger as a wholly-owned subsidiary of Landry's. Landry's
expects to change the name of LSR following the merger to Rainforest Cafe (or a
comparable name). The merger requires the approval of a majority of the holders
of Rainforest common stock and will be consummated as soon as practicable after
the receipt of such Rainforest shareholder approval.
In the merger, all of the outstanding shares of Rainforest common stock
(other than shares as to which dissenters' rights have been properly perfected)
will be cancelled in exchange for, at each Rainforest shareholder's election,
the issuance of shares of Landry's common stock and/or cash. Rainforest
shareholders will receive 0.5816th of a share of Landry's common stock for each
share of Rainforest common stock for which they elect to receive stock or $5.23
in cash for each share of Rainforest common stock for which they elect to
receive cash (in each case, subject to proration as more fully described
below).
The Rainforest common stock that will be converted into Landry's common
stock will equal, as nearly as practicable, 65% of all outstanding shares of
Rainforest common stock, and the Rainforest common stock that will be converted
into the right to receive cash will equal, as nearly as practicable, 35% of all
outstanding shares of Rainforest common stock. If Rainforest shareholders, in
the aggregate, elect to receive shares of Landry's common stock for more than
65% of their shares of Rainforest common stock, or cash for more than
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35% of their shares of Rainforest common stock, the shareholders electing the
oversubscribed consideration will receive, on a pro rata basis, the alternative
consideration with respect to the excess.
Based on the number of shares of Rainforest common stock outstanding as of
the date of the printing of this Proxy Statement/Prospectus, Rainforest
shareholders would receive, in the aggregate, approximately 8,800,000 shares of
Landry's common stock or approximately 26% of the shares of Landry's common
stock that will be issued and outstanding immediately after the merger is
completed and approximately $42,600,000 in cash, in the aggregate, in exchange
for their shares of Rainforest common stock. The actual share numbers,
aggregate cash amount and percentages may differ slightly based upon changes in
the number of shares of Rainforest common stock and Landry's common stock
outstanding as of the date the merger is completed.
No certificate or scrip representing fractional shares of Landry's common
stock will be issued in connection with the merger. Instead you will receive
cash, without interest, in lieu of a fraction of a share of Landry's common
stock in an amount equal to the product obtained by multiplying such fractional
amount by $5.23.
Certain Federal Income Tax Considerations
The following discussion is a summary of certain U.S. federal income tax
consequences of the merger to a shareholder of Rainforest who holds shares of
Rainforest common stock as capital assets (a "Holder"). The discussion is based
on laws, regulations, rulings and decisions in effect on the date hereof, all
of which are subject to change, possibly with retroactive effect, and to
differing interpretation. This discussion is for general information only, and
does not address all aspects of federal income taxation that may be applicable
to a Holder subject to special treatment under the Code (including, but not
limited to, banks, tax-exempt organizations, insurance companies, dealers in
securities or foreign currency, holders who dissent and exercise appraisal
rights, and holders who are not U.S. persons (as defined in section 7701(a)(30)
of the Code) or who acquired shares of Rainforest common stock pursuant to the
exercise of an employee stock option or otherwise as compensation). In
addition, the discussion does not address the state, local or foreign tax
consequences of the merger.
Consummation of the merger is conditioned upon the receipt by Rainforest and
Landry's of the opinions of Maslon and Skadden, Arps, respectively, each dated
as of the date the merger becomes effective, substantially to the effect that,
on the basis of facts, representations, assumptions and agreements set forth or
referred to in such opinions, for federal income tax purposes, the merger will
be treated as a reorganization within the meaning of Section 368 of the Code.
Assuming that, in accordance with the opinions referred to above, the merger
is treated as a reorganization within the meaning of Section 368 of the Code,
the following is a summary of the general federal income tax consequences of
the merger to a Holder:
Exchange of Rainforest Common Stock. The federal income tax consequences of
the merger to a Holder generally will depend on whether the Holder exchanges
shares of Rainforest common stock for cash, shares of Landry's common stock, or
a combination thereof, and may further depend on whether the Holder
constructively owns shares of Rainforest common stock and whether the Holder
actually or constructively owns any shares of Landry's common stock. For this
purpose, shares are constructively owned under rules set forth in Section 318
of the Code which generally treats a person as owning stock owned by certain
family members or related entities or that is the subject of an option or
options owned or deemed owned by such person.
Exchange Solely for Cash. If, pursuant to the merger, a Holder exchanges all
of the shares of Rainforest common stock actually owned by the Holder solely
for cash, such Holder will recognize gain or loss equal to the difference
between the amount of cash received and the Holder's adjusted tax basis in the
shares of Rainforest common stock surrendered therefor, which gain or loss
generally will be long-term capital gain or loss if the Holder's holding period
with respect to the stock is more than one year, and otherwise will be short-
term capital gain or loss. If, however, any such Holder constructively owns
shares of Rainforest common stock
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that are exchanged for shares of Landry's common stock in the merger or owns
shares of Landry's common stock actually or constructively after the merger,
the consequences to such Holder may be similar to the consequences described
below under the heading "Exchange for Landry's Common Stock and Cash," except
that the amount of consideration, if any, treated as a dividend may not be
limited to the amount of such Holder's gain.
Exchange Solely for Landry's Common Stock. If, pursuant to the merger, a
Holder exchanges all of the shares of Rainforest common stock actually owned by
the Holder solely for shares of Landry's common stock, such Holder will not
recognize any gain or loss except to the extent of cash received in lieu of a
fractional share of Landry's common stock (as discussed below). The aggregate
adjusted tax basis of the shares of Landry's common stock received (including
fractional shares) in such an exchange will equal the aggregate adjusted tax
basis of the shares of Rainforest common stock surrendered therefor, and the
holding period of the Landry's common stock will include the period during
which the Holder held its shares of Rainforest common stock. If the Holder has
differing bases or holding periods for its shares of Rainforest common stock,
the Holder should consult its tax advisor prior to the exchange with regard to
identifying the bases or holding periods of the particular shares of Landry's
common stock that it receives in the exchange.
Exchange for Landry's Common Stock and Cash. If, pursuant to the merger, a
Holder exchanges all of the shares of Rainforest common stock actually owned by
the Holder for a combination of Landry's common stock and cash, the Holder will
realize gain or loss equal to the difference between
. the sum of cash and the fair market value of Landry's common stock
received, and
. the Holder's adjusted tax basis in the shares of Rainforest common stock
surrendered therefor.
However, any such gain will be recognized (that is, subject to tax) only to the
extent of the cash received, and any such loss will not be recognized. For this
purpose, gain or loss must be calculated separately for each identifiable block
of shares surrendered in the exchange, and a loss realized on one block of
shares of Rainforest common stock cannot be used to offset a gain recognized on
another block of shares of Rainforest common stock. Any such recognized gain
generally will be long-term capital gain if the Holder's holding period respect
to the stock is more than one year, and otherwise will be short-term capital
gain. If, however, the cash received has the effect of the distribution of a
dividend, as discussed below, the gain will be treated as a dividend to the
extent of the Holder's ratable share of Rainforest's accumulated earnings and
profits. See "Possible Treatment of Cash as a Dividend" below.
The aggregate tax basis of Landry's common stock received by a Holder that
exchanges the Holder's shares of Rainforest common stock for a combination of
Landry's common stock and cash pursuant to the merger will be equal to the
aggregate adjusted tax basis of the shares of Rainforest common stock
surrendered therefor, decreased by the cash received and increased by any
recognized gain (whether capital gain or ordinary income). The holding period
of Landry's common stock received will include the holding period of the shares
of Rainforest common stock surrendered therefor. If a Holder has differing
bases or holding periods for its shares of Rainforest common stock, the Holder
should consult its tax advisor prior to the exchange to identify the particular
shares of Rainforest common stock to be surrendered in the exchange and the
particular bases or holding periods of the particular shares of Landry's common
stock that it receives in the exchange.
Possible Treatment of Cash as a Dividend. In general, the determination of
whether the gain recognized in the exchange will be treated as capital gain or
dividend income will depend upon whether and to what extent the exchange
reduces the Holder's deemed percentage stock ownership interest in Landry's.
For purposes of this determination, a Holder will be treated as if it first
exchanged all of the Holder's shares of Rainforest common stock solely for
Landry's common stock and then Landry's immediately redeemed (the "deemed
redemption") a portion of that Landry's common stock in exchange for the cash
that the Holder actually received. The gain recognized in the exchange followed
by a deemed redemption will be treated as capital gain if the deemed redemption
is "substantially disproportionate" with respect to the Holder or "not
essentially equivalent to a dividend."
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The deemed redemption, generally, will be "substantially disproportionate"
with respect to a Holder if the percentage described in the first bullet below
is less than 80 percent of the percentage described in the second bullet
below. Whether the deemed redemption is "not essentially equivalent to a
dividend" with respect to a Holder will depend upon the Holder's particular
circumstances. At a minimum, however, in order for the deemed redemption to be
"not essentially equivalent to a dividend," the deemed redemption must result
in a "meaningful reduction" in the Holder's deemed percentage stock ownership
of Landry's. In general, that determination requires a comparison of
. the percentage of the outstanding stock of Landry's that the Holder is
deemed actually and constructively to have owned immediately before the
deemed redemption; and
. the percentage of the outstanding stock of Landry's that is actually and
constructively owned by the Holder immediately after the deemed
redemption.
In applying the foregoing tests, a shareholder will be deemed to own stock
actually owned by such shareholder and, in some cases, constructively owned by
certain family members, certain estates and trusts of which the Holder is a
beneficiary, certain affiliated entities, and stock subject to an option
actually or constructively owned by the shareholder or such other persons. As
these rules are complex, each Holder that may be subject to these rules should
consult its tax advisor. The Internal Revenue Service has ruled that a
relatively minor reduction in the percentage stock ownership of a minority
shareholder in a publicly held corporation whose relative stock interest is
minimal and who exercises no control with respect to corporate affairs is a
"meaningful reduction." Accordingly, in most circumstances, gain recognized by
a Holder that exchanges the Holder's shares of Rainforest common stock for a
combination of Landry's common stock and cash generally will be long-term
capital gain if the Holder's holding period with respect to the stock is more
than one year, and otherwise will be short-term capital gain.
Cash Received in Lieu of a Fractional Share. Cash received in lieu of a
fractional share of Landry's common stock will be treated as received in
redemption of such fractional share and gain or loss will be recognized by a
Holder, equal to the difference between the amount of cash received and the
portion of the basis of the share of Rainforest common stock allocable to such
fractional interest. Such gain or loss generally will be capital gain or loss,
and will be long-term capital gain or loss if the holding period for such
share of Rainforest common stock was greater than one year as of the date of
the exchange.
Backup Withholding. Unless a Holder complies with certain reporting or
certification procedures or is an "exempt recipient" (i.e., in general,
corporations and certain other entities), the Holder may be subject to
withholding tax of 31% with respect to any cash payments received pursuant to
the merger. A foreign Holder should consult the Holder's tax advisor with
respect to the application of withholding rules to the Holder with respect to
any cash payments received pursuant to the merger.
EACH RAINFOREST SHAREHOLDER IS URGED TO CONSULT ITS OWN TAX ADVISOR WITH
RESPECT TO THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE
MERGER.
Accounting Treatment
The merger will be accounted for using the purchase method of accounting
with Landry's as the acquiror.
Regulatory Approvals
The merger is subject to the pre-merger notification requirements of the
Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended (the "HSR
Act"), including the 30-day waiting period (or earlier termination thereof)
under the HSR Act. The requisite filings with the Antitrust Division of the
U.S. Department of Justice and the Federal Trade Commission (the "FTC") under
the HSR Act were made by Rainforest and Landry's on February 18, 2000 and
February 24, 2000, respectively, and the parties requested early termination
of the required waiting period. At any time before or after consummation of
the merger, the Antitrust Division or the FTC could take such action under the
antitrust laws as it deems necessary or desirable
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in the public interest, including seeking to enjoin the consummation of the
merger or seeking the divestiture of substantial assets of Landry's or
Rainforest. There can be no assurance that additional information or
documentary material will not be requested. At any time before or after the
effective time of the merger, and notwithstanding that the HSR Act waiting
period has expired, any state could take such action under the antitrust laws
as it deems necessary or desirable. Such action could include seeking to enjoin
the consummation of the merger or seeking divestiture of businesses of Landry's
or of Rainforest by Landry's. Private parties may also seek to take legal
action under the antitrust laws under certain circumstances.
Restrictions on Sales of Shares of Rainforest Common Stock by Affiliates of
Landry's and Rainforest
The shares of Landry's common stock to be issued in connection with the
merger will be registered under the Securities Act of 1933 and will be freely
transferable under the Securities Act, except for shares of Landry's common
stock issued to any person who is deemed to be an "affiliate" of either of us
at the time of the special meeting. Persons who may be deemed to be affiliates
include individuals or entities that control, are controlled by, or are under
common control of either of us and may include some of our officers and
directors, as well as our principal shareholders. Affiliates may not sell their
shares of Landry's common stock acquired in connection with the merger except
pursuant to:
. an effective registration statement under the Securities Act covering the
resale of those shares;
. an exemption under paragraph (d) of Rule 145 under the Securities Act; or
. any other applicable exemption under the Securities Act.
Landry's Registration Statement on Form S-4, of which this Proxy
Statement/Prospectus forms a part, does not cover the resale of shares of
Landry's common stock to be received by our affiliates in the merger.
Listing on the New York Stock Exchange of Landry's Common Stock to be Issued in
the Merger
The shares of Landry's common stock to be issued in the merger will be
approved for listing on the New York Stock Exchange, subject to official notice
of issuance, before the completion of the merger.
NYSE rules generally require that a NYSE-listed company receive approval
from its stockholders in connection with any transaction involving the issuance
of twenty percent or more of its common stock. NYSE rules, however, also
provide that if a company is issuing shares of treasury stock in connection
with such a transaction that its shares of treasury stock (i.e., shares
previously issued by a company which have been reacquired by the company) are
excluded for purposes of determining whether or not the aforementioned twenty
percent threshold has been met. Landry's is not seeking approval from its
stockholders with respect to the issuance of its shares of common stock under
NYSE rules because a significant portion of the shares Landry's will issue in
the merger will be shares of treasury stock.
Delisting and Deregistration of Rainforest Common Stock after the Merger
If the merger is completed, Rainforest common stock will be delisted from
the NASDAQ National Market and will no longer be subject to periodic reporting
requirements under the Securities Exchange Act of 1934.
Dissenters' Rights
Rainforest is governed under the laws of the State of Minnesota, and,
accordingly, is governed by the provisions of the Minnesota Business
Corporation Act (the "MBCA"). Pursuant to the relevant sections of the MBCA,
the shareholders of Rainforest have the right to dissent from the merger and
obtain payment for the "fair value" of their shares of Rainforest common stock.
Sections 302A.471 and 302A.473 of the MBCA entitle any Rainforest
shareholder who dissents from the merger and who follows the procedures
prescribed by Sections 302A.471 and 302A.473, in lieu of receiving the
consideration proposed under the merger agreement, to receive cash equal to the
"fair value" of such shareholder's shares of Rainforest common stock. Set forth
below is a summary of the procedures relating to the exercise of such
dissenters' rights. This summary does not purport to be a complete statement of
dissenters' rights and is qualified in its entirety by reference to Sections
302A.471 and 302A.473 of the MBCA, which are
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reproduced in full as Annex C attached to this Proxy Statement/Prospectus, and
to any amendments to such provisions as may be adopted after the date of this
Proxy Statement/Prospectus.
ANY RAINFOREST SHAREHOLDER CONTEMPLATING THE POSSIBILITY OF DISSENTING FROM
THE MERGER SHOULD CAREFULLY REVIEW THE TEXT OF ANNEX C (PARTICULARLY THE
SPECIFIED PROCEDURAL STEPS REQUIRED TO PERFECT THE DISSENTERS' RIGHTS, WHICH
ARE COMPLEX) AND SHOULD ALSO CONSULT SUCH SHAREHOLDER'S LEGAL COUNSEL. SUCH
RIGHTS WILL BE LOST IF THE REQUIREMENTS OF SECTIONS 302A.471 AND 302A.473 OF
THE MBCA ARE NOT FULLY AND PRECISELY SATISFIED.
The MBCA provides dissenters' rights for any Rainforest shareholder who
dissents from the merger and who meets the requisite statutory requirements
contained in the MBCA. Under the MBCA, any Rainforest shareholder who (i) files
with Rainforest a written notice of his, her or its intent to demand the fair
value of such shareholder's Rainforest common stock, which notice is filed with
Rainforest before the vote is taken at the special meeting, and (ii) does not
vote such shares of Rainforest common stock at the special meeting in favor of
the merger proposal, shall be entitled, if the merger is approved and effected,
to receive a cash payment of the fair value of such shareholder's shares of
Rainforest common stock upon compliance with the applicable statutory
procedural requirements. A failure by any Rainforest shareholder to vote
against the merger proposal will not in and of itself constitute a waiver of
the dissenters' rights of such shareholder under the MBCA. In addition, a
Rainforest shareholder's vote against the merger proposal will not satisfy the
notice requirement referred to in clause (i) above.
Any written notice of a Rainforest shareholder's intent to demand a cash
payment of "fair value" for such shareholder's shares of Rainforest common
stock if the merger is consummated must be filed with Rainforest at Rainforest
Cafe, Inc., 720 South Fifth Street, Hopkins, Minnesota 55343, Attention:
Stephen Cohen, Esq., prior to the vote on the merger at the special meeting. A
shareholder who votes for the merger proposal will have waived their
dissenters' rights with respect to such proposal. A shareholder who does not
satisfy each of the requirements of Sections 302A.471 and 302A.473 of the MBCA
is not entitled to payment for such shareholder's shares of Rainforest common
stock under the dissenters' rights provisions of the MBCA and will be bound by
the terms of the merger agreement.
If the merger proposal is approved, Rainforest must send written notice to
all shareholders who have given written notice prior to the vote to approve the
merger proposal of their intent to demand the fair value of their shares of
Rainforest common stock and who have not voted in favor of the merger as
described above. The notice will contain: (i) the address where the demand for
payment and certificates representing shares of Rainforest common stock (each a
"certificate") must be sent and the date by which they must be received; (ii)
any restrictions on transfer of uncertificated shares that will apply after the
demand for payment is received; (iii) a form to be used to certify the date on
which the shareholder, or the beneficial owner on whose behalf the shareholder
dissents, acquired the shares (or an interest in them) and to demand payment;
and (iv) a copy of the provisions of the MBCA set forth in Annex C with a brief
description of the procedures to be followed under those provisions. A
Rainforest shareholder who is sent a notice and who wishes to assert
dissenters' rights must demand payment and deposit his or her certificate or
certificates or comply with any restrictions on transfer of uncertificated
shares within 30 days after such notice is given by Rainforest. Prior to the
effective time of the merger, a Rainforest shareholder exercising dissenters'
rights retains all other rights of a Rainforest shareholder. From and after the
effective time of the merger, dissenting shareholders will no longer be
entitled to any rights of a Rainforest shareholder, including, but not limited
to, the right to receive notice of meetings, to vote at any meetings or to
receive dividends, and will only be entitled to dissenters' rights as provided
by the MBCA.
After the effective time of the merger, or upon receipt of a valid demand
for payment, whichever is later, Rainforest must remit to each dissenting
shareholder who complied with the requirements of the MBCA the amount
Rainforest estimates to be the fair value of such shareholder's shares of
Rainforest common stock, plus interest accrued from the effective time of the
merger to the date of payment. The payment also must be accompanied by
Rainforest's closing balance sheet and statement of income for a fiscal year
ending not more than 16 months before the effective date of the merger,
together with the latest available interim financial
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statements, Rainforest's estimate of the fair value of the shares and a
description of the method used to reach such estimate, and a copy of the
applicable provisions of the MBCA with a brief description of the procedures to
be followed in demanding supplemental payment. If Rainforest fails to remit
payment within 60 days of the deposit of the certificates or the imposition of
transfer restrictions on uncertificated shares, it shall return all deposited
certificates and cancel all transfer restrictions; provided, however,
Rainforest may again give notice regarding the procedure to exercise
dissenters' rights and require deposit or restrict transfer at a later time. In
certain circumstances, Rainforest may withhold this initial payment from a
dissenting shareholder who became a Rainforest shareholder (or who is
dissenting on behalf of a person who became a Rainforest shareholder) following
the public announcement of the merger on February 9, 2000, pending a demand by
such shareholder for supplemental payment. If a dissenting shareholder believes
that the amount remitted is less than the fair value of the Rainforest common
stock plus interest, such dissenting shareholder may give written notice to
Rainforest of his or her own estimate of the fair value of the shares, plus
interest, within 30 days after Rainforest mails its remittance, and demand
payment of the difference. Failure to make such demand on a timely basis
entitles the dissenting shareholder only to the amount offered.
If Rainforest receives a demand from a dissenting shareholder to pay such
difference, it shall, within 60 days after receiving the demand, either pay to
the dissenting shareholder the amount demanded or agreed to by the dissenting
shareholder after discussion with Rainforest or file in court a petition
requesting that the court determine the fair value of the Rainforest common
stock.
The court may appoint one or more appraisers to receive evidence and make
recommendations to the court on the amount of the fair value of the shares. The
court shall determine whether the dissenting shareholder has complied with the
requirements of Section 302A.473 of the MBCA and shall determine the fair value
of the shares, taking into account any and all factors the court finds
relevant, computed by any method or combination of methods that the court, in
its discretion, sees fit to use. The fair value of the shares as determined by
the court is binding on all shareholders wherever located. If the court
determines that the fair value of the shares is in excess of the amount, if
any, remitted by Rainforest, then the court will enter a judgment for cash in
favor of the dissenting shareholders in an amount by which the value determined
by the court, plus interest, exceeds such amount previously remitted. A
dissenting shareholder will not be liable to Rainforest if the amount, if any,
remitted to such shareholder exceeds the fair value of the shares, as
determined by the court, plus interest.
Costs of the court proceeding shall be determined by the court and assessed
against Rainforest, except that part or all of the costs may be assessed
against any dissenting shareholders whose actions in demanding supplemental
payments are found by the court to be arbitrary, vexatious or not in good
faith.
If the court finds that Rainforest did not substantially comply with Section
302A.473 of the MBCA, the court may assess fees and expenses, if any, of any
attorneys or experts as the court deems equitable against Rainforest. Such fees
and expenses may also be assessed against any party in bringing the proceedings
if the court finds that such party has acted arbitrarily, vexatiously or not in
good faith, and may be awarded to a party injured by those actions. The court
may award, in its discretion, fees and expenses of an attorney for the
dissenting shareholders out of the amount awarded to such shareholders, if any.
A shareholder may not assert dissenters' rights as to less than all of the
shares registered in the name of the shareholder, unless the shareholder
dissents with respect to all the shares that are beneficially owned by another
person but registered in the name of the shareholder and discloses the name and
address of each beneficial owner on whose behalf the shareholder dissents. The
rights of such a partial dissenting shareholder are determined as if the shares
as to which he or she dissents and his or her other shares were registered in
the names of different shareholders.
Under Subdivision 4 of Section 302A.471 of the MBCA, a Rainforest
shareholder has no right, at law or in equity, to set aside the approval of the
merger agreement or the consummation of the merger except if such adoption or
consummation was fraudulent with respect to such shareholder or Rainforest.
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THE MERGER AGREEMENT
Set forth below is a brief description of certain terms of the merger
agreement and related matters. This description does not purport to be complete
and is qualified in its entirety by reference to the merger agreement, which is
attached hereto as Annex A and is incorporated in its entirety herein by
reference.
Structure of the Merger
The merger agreement provides that Rainforest will be merged with and into
LSR, and LSR, as the surviving corporation in the merger, will continue its
corporate existence under the laws of the State of Delaware as a subsidiary of
Landry's.
The Effective Time
The closing will occur within three business after the day on which the last
of the conditions set forth in the merger agreement have been satisfied or
waived, unless Landry's and Rainforest agree to a different date. We will file
articles of merger with the Secretary of State of the State of Minnesota and a
certificate of merger with the Secretary of State of the State of Delaware at
which time the merger will be effective. However, we may agree to make the
merger effective at a time subsequent to such filings and specify that time in
the articles of merger and certificate of merger.
Merger Consideration
The merger agreement provides that each share of Rainforest common stock
issued and outstanding immediately prior to the effective time (other than
Rainforest common stock owned by Landry's and other than Rainforest common
stock as to which dissenters' rights have been properly perfected) will be
converted into 0.5816th of a share of Landry's common stock or $5.23 in cash,
so that the number of shares of Rainforest common stock that will be converted
into shares of Landry's common stock will equal, as nearly as practicable, 65%
of all outstanding shares of Rainforest common stock and the number of shares
of Rainforest common stock that will be converted into the right to receive
cash will equal, as nearly as practicable, 35% of all outstanding shares of
Rainforest common stock. If total shareholder elections for Landry's common
stock or for cash exceed either of these percentages, the number of shares of
Rainforest common stock that will be converted into Landry's common stock or
into cash, as the case may be, will be reduced proportionately so that the
Rainforest shareholders electing the oversubscribed consideration will receive,
on a pro rata basis, the alternative consideration with respect to the excess.
No fractional shares of Landry's common stock will be issued pursuant to the
merger. Any holder of Rainforest common stock who would otherwise be entitled
to a fractional share of Landry's common stock will receive an amount in cash
equal to the cash consideration of $5.23 per share multiplied by the fractional
interest of Landry's common stock to which they are entitled.
Election Procedure; Issuance of Landry's Common Stock and Payment of Cash
An election form/letter of transmittal has been included in the mailing of
this Proxy Statement/Prospectus to you. Rainforest shareholders who wish to
receive the merger consideration, regardless of whether they wish to receive
stock or cash, should, as soon as possible, mail the election form/letter of
transmittal indicating whether they elect to receive cash and/or shares of
Landry's common stock, together with their Rainforest common stock
certificates, a book entry transfer of their shares, or a guarantee of delivery
of such shares to the exchange agent at the address below:
Rainforest Cafe, Inc.
c/o American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, NY 10005
1-800-937-5449, ext. 6820
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We have retained Innisfree M&A Incorporated as information agent to assist
you in the merger. You may call Innisfree at (888) 750-5834 to request
additional documents and to ask any questions.
Subject to the proration procedures described below, which applies if the
amount of cash consideration or Landry's common stock elected by Rainforest
shareholders, in the aggregate, exceeds 35% and 65%, respectively, each
Rainforest shareholder may elect to receive with respect to each share of
Rainforest common stock 0.5816th of a share of Landry's common stock or $5.23
in cash. If Rainforest shareholders, in the aggregate, elect to receive shares
of Landry's common stock for more than 65% of their shares of Rainforest common
stock, or cash for more than 35% of their shares of Rainforest common stock,
the shareholders electing the oversubscribed consideration will receive, on a
pro rata basis, the alternative consideration with respect to the excess.
Rainforest shareholders who fail to timely return or properly complete their
election form/letter of transmittal or who affirmatively make a non-election
will receive Landry's common stock and/or cash consideration so that 65% of the
outstanding shares of Rainforest common stock are converted into Landry's
common stock and 35% of the outstanding shares of Rainforest common stock are
converted into cash; provided, however, that in the event Rainforest
shareholders elect to receive shares of Landry's common stock for more than 65%
of the outstanding shares of Rainforest common stock or cash for more than 35%
of the outstanding shares of Rainforest common stock, such non-electing
Rainforest shareholders will only receive the undersubscribed consideration.
Rainforest shareholders, or their brokers authorized to act on their behalf,
must send in the election form/letter of transmittal, together with their
Rainforest common stock certificates, book entry transfer of their shares or a
guarantee of delivery of their certificates, as described in the election
form/letter of transmittal, to the exchange agent.
To elect what type of consideration you wish to receive for your shares of
Rainforest common stock, a properly completed election form/letter of
transmittal must be received by the exchange agent by 5:00 p.m., New York City
time, on , 2000 (the "election deadline"). Please read the election
form/letter of transmittal carefully and follow all instructions contained
therein.
Any Rainforest shareholder may change his election at any time prior to the
election deadline by written notice to the exchange agent which is accompanied
by a revised election form/letter of transmittal properly completed and
executed. In addition, any Rainforest shareholder may at any time prior to the
election deadline revoke his election by written notice to the exchange agent
or by withdrawal of his Rainforest common stock certificates (or the guarantee
of delivery of such certificates), which were previously deposited with the
exchange agent. All elections will be automatically revoked if the merger
agreement is terminated. In order to be eligible to receive the form of merger
consideration that you want, you must complete and return the election
form/letter of transmittal to the exchange agent.
Immediately prior to the effective time, Landry's will deliver to the
exchange agent the number of certificates of Landry's common stock, as well as
the cash necessary to pay the cash consideration, that will be issued in
exchange for shares of Rainforest common stock.
As soon as practicable after the closing, each holder of Rainforest common
stock, who has surrendered his certificates of Rainforest common stock to the
exchange agent, will receive certificates representing the number of shares of
Landry's common stock into which his shares of Rainforest common stock have
been converted and/or a bank check for an amount equal to $5.23 multiplied by
the number of shares of Rainforest common stock converted into cash
consideration.
If any Rainforest shareholder would like his certificates of Landry's common
stock or any of his cash consideration issued in a name other than his own, he
must pay to the exchange agent any and all required transfer or other taxes or
must establish that such tax has been paid or is not applicable.
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<PAGE>
No merger consideration, dividends or distributions, if any, will be paid on
Landry's common stock to any Rainforest shareholder receiving shares of
Landry's common stock in the merger until such Rainforest shareholder
surrenders his Rainforest common stock certificates. In addition, Rainforest
shareholders will not receive any interest on any cash they receive.
Treatment of Stock Options
Each outstanding and unexercised option to buy shares of Rainforest common
stock will become fully vested and exercisable by virtue of its terms (other
than up to 1,611,250 options held by certain members of senior management
which, if not exercised prior to the effective time of the merger, will be
cancelled at the effective time of the merger). See "THE EMPLOYEE TERMINATION,
CONSULTING AND NON-COMPETITION AGREEMENTS." Landry's will replace these options
with options to purchase Landry's common stock on the same terms and conditions
as the Rainforest options except that the exercise price and the number of
shares issuable upon exercise will be adjusted to take into account the
exchange ratio of 0.5816th of a share of Landry's common stock for each share
of Rainforest common stock.
Dissenting Shares
Under Minnesota law, each holder of shares of Rainforest common stock is
entitled to dissent from the merger and demand to be paid the "fair value" of
their shares provided they properly perfect this right as provided by the MBCA.
If a Rainforest shareholder exercises this right in accordance with Sections
302A.471 and 302A.473 of the MBCA, his shares of Rainforest common stock will
not be converted into the right to receive the merger consideration, but he
will be entitled only to the rights that are granted under Minnesota law.
Rainforest will give Landry's (i) prompt written notice of any notice of intent
to demand fair value for any shares of Rainforest common stock, withdrawals of
such notices, and any other instruments served pursuant to the MBCA and
received by Rainforest, and (ii) the opportunity to conduct jointly all
negotiations and proceedings with respect to these demands for fair value under
the MBCA. Rainforest cannot, except with the prior written consent of Landry's
or as otherwise required by law, voluntarily make any payment with respect to
any demands for fair value for shares of Rainforest common stock or offer to
settle or settle any such demands.
Representations and Warranties
The merger agreement contains various mutual customary representations and
warranties relating to, among other things:
. due incorporation and good standing
. capitalization
. the authorization and binding nature of the merger agreement and other
transaction agreements
. consents and approvals
. no conflicts or violations
. documents filed with the SEC and the accuracy of information contained in
those documents
. the conformity with generally accepted accounting principles of the
respective financial statements of Rainforest and Landry's
. the absence of certain changes and no undisclosed liabilities
. compliance with laws
. litigation
. the timely filing of all requisite tax returns
43
<PAGE>
. the retention of investment bankers
. the receipt of fairness opinions
In addition to the mutual representations and warranties listed above,
Rainforest has given representations and warranties relating to the following:
. the possession by Rainforest of all requisite governmental permits
. material contracts of Rainforest
. the employee benefit plans of Rainforest and the obligations of
Rainforest under any agreement with any of its employees
. the intellectual property of Rainforest
. Rainforest's insurance coverage
. the vote required of Rainforest's shareholders to approve the merger and
the inapplicability of certain state anti-takeover statutes
. title to Rainforest's properties
. certain environmental matters relating to Rainforest
In addition to the mutual representations and warranties listed above,
Landry's has given representations and warranties relating to the following:
. no prior activities of LSR
. Landry's ownership of Rainforest common stock
. the absence of any financing contingency by Landry's
Certain Covenants of Rainforest
Rainforest agreed that until completion of the merger, unless Landry's
agrees otherwise in writing, Rainforest and its subsidiaries will:
. operate their business in the ordinary course and consistent with past
practice
. use their reasonable best efforts to preserve intact their business
organization, keep available the services of their officers and
employees, maintain satisfactory relationships with all persons with whom
they do business, and preserve possession, control and condition of all
their assets
In addition, Rainforest and its subsidiaries have specifically agreed not
to, among other things:
. modify their articles of incorporation or bylaws
. issue, grant, sell, pledge, or dispose of any Rainforest securities,
except for the issuance of stock in connection with Rainforest options or
its employee stock purchase program
. subject to certain exceptions, split, combine or reclassify any shares of
Rainforest capital stock or declare, pay or set aside any dividend or
other distribution
. create, incur, assume, forgive or change the terms or collateral of any
debt, receivables or employee or officer loans; assume, guarantee, or
endorse the obligations of any person; except as disclosed, make any
capital expenditures or incur any preopening expenses; make any loans,
advances, capital contributions or investments in any other person (other
than to subsidiaries and other than customary employee advances)
. acquire or merge with any other business; or dispose of or encumber any
of its assets other than in the ordinary course, consistent with past
practice
44
<PAGE>
. increase the wages, salary, bonus, compensation or other benefits of any
of its officers or employees except in the ordinary course of business,
consistent with past practice
. commence or settle litigation
. make or rescind any election relating to taxes, settle any matter with
respect to taxes or make any material changes to its accounting or tax
policies
. adopt or amend any resolution or agreement concerning indemnification of
its directors, officers, employees or agents
. materially increase or decrease the average restaurant, corporate or
warehouse facility inventory or house bank accounts
. subject to certain exceptions, enter into leases, contracts or agreements
for an amount in excess of $25,000
. make any changes to current line of business, investment strategy, policy
and practices
. undertake the design or construction of new restaurants or the remodeling
or renovation of existing restaurants
. remove any Rainforest property from any Rainforest facility or allow a
Rainforest employee to do so
. issue gift certificates, coupons or complimentary rights for dining or
retail other than in the ordinary course of business, consistent with
past practice
Rainforest has also agreed to, among other things:
. call, give notice of, convene and hold a meeting of its shareholders for
the purpose of approving the merger agreement and the merger
. use its reasonable best efforts to obtain all consents from governmental
authorities and other third parties required for the consummation of the
merger
. not issue any public announcement with respect to the merger or discuss
the merger with the media without Landry's written consent, except as is
required by law
No Solicitation
Rainforest has agreed that it will:
. immediately cease any discussions or negotiations with any parties that
may be ongoing with respect to any inquiry, proposal or offer relating to
any acquisition of 20% or more of the consolidated assets, voting power
or common stock of Rainforest or to any merger or similar transaction
involving Rainforest or its subsidiaries, other than the transactions
contemplated by the merger agreement
. not solicit, initiate or encourage any inquiries or participate in any
discussion or negotiations regarding a competing proposal to acquire
Rainforest as described above (a "takeover proposal")
However, if at any time prior to the special meeting, the Rainforest board
of directors determines in good faith based on the advice of its outside legal
counsel that the failure to do so would result in a breach of its fiduciary
duties, Rainforest may, in response to a superior takeover proposal, furnish
information about Rainforest to any person pursuant to a customary
confidentiality agreement and may participate in negotiations regarding a
takeover proposal for purposes of determining, in good faith, if such takeover
proposal is a superior takeover proposal.
The merger agreement defines a "superior takeover proposal" as any bona fide
proposal made by a third party to acquire more than a majority of the voting
power of Rainforest or all or substantially all of the assets of Rainforest, on
terms which the Rainforest board of directors determines, in its good faith
judgment based on
45
<PAGE>
the advice of its financial advisors and legal counsel, is more favorable to
Rainforest shareholders than the merger with Landry's.
Rainforest has agreed that it will not withdraw or modify its approval or
recommendation of the merger in a manner adverse to Landry's and it will not
approve or recommend, or enter into any agreement relating to, any competing
takeover proposal. However, the Rainforest board of directors may withdraw or
modify its approval or recommendation of the merger or approve or recommend a
superior takeover proposal (subject to compliance with the merger agreement)
if, prior to the special meeting, the Rainforest board determines in good faith
based on the advice of outside legal counsel that the failure to do so would
result in a breach of its fiduciary duties. Notwithstanding the above, unless
the merger agreement is terminated in accordance with its terms, Rainforest
must submit the merger to the Rainforest shareholders for the purpose of voting
on the merger and the related transactions.
Certain Covenants of Landry's
Among other things, Landry's has agreed:
. that the indemnification and exculpation provisions contained in the
bylaws and the certificate of incorporation of LSR will be at least as
favorable to individuals who immediately prior to the closing date were
directors, officers, agents or employees of Rainforest and that the
bylaws and certificate of incorporation of LSR will not be amended,
repealed or otherwise modified for a period of six years after the
closing date in any manner that would adversely affect the rights of any
indemnified party
. to provide employee benefits and programs to Rainforest's and its
subsidiaries' employees that, in the aggregate, are substantially
comparable to Landry's, and to honor, in accordance with their terms, all
employment and severance agreements in effect immediately prior to the
closing date that are applicable to any current or former employees or
directors of Rainforest or any of its subsidiaries
Conditions to the Merger
The respective obligations of each party to close the merger requires the
fulfillment or waiver at or prior to the effective time of the merger of the
following conditions:
. approval of the merger proposal by holders of a majority of the
outstanding shares of Rainforest common stock entitled to vote at the
special meeting
. the absence of any injunction or action entered by any court or other
governmental authority which prohibits or prevents the consummation of
the merger
. expiration or early termination of the applicable HSR Act waiting period
. continued effectiveness of the Registration Statement of which this Proxy
Statement/Prospectus constitutes a part
. receipt of any requisite state securities laws authorizations
. approval for listing on the NYSE of the shares of Landry's common stock
that will be issued in connection with the merger
The obligation of Rainforest to close the merger is further subject to the
fulfillment at or prior to the effective time of the merger of the following
additional conditions, any one or more of which may be waived by Rainforest:
. the representations and warranties of Landry's and LSR must be true and
correct in all material respects (except that where any statement in a
representation or warranty expressly includes a "material adverse effect"
or other materiality qualifier, it must be true and correct in all
respects) as of the date of the merger agreement and as of the closing
date as if it were made on and as of the closing
46
<PAGE>
date, except for those which speak of an earlier date which must be true
and correct only as of that earlier date
. Landry's and LSR must have performed and complied with all their
covenants and agreements in all material respects and satisfied in all
material respects all the conditions required by the merger agreement to
be performed or complied with or satisfied by them at or prior to the
effective time of the merger
. there have been no changes, conditions, events or developments which have
or would reasonably be expected to have a material adverse effect on
Landry's (as defined in the merger agreement) since the date of the
merger agreement
. the delivery by Landry's of customary closing certificates and other
documents
. the receipt by Rainforest of an opinion from its tax counsel
substantially to the effect that, if the merger is consummated in
accordance with the provisions of the merger agreement, for federal
income tax purposes, the merger will qualify as a tax-free reorganization
The obligations of Landry's to effect the merger will be subject to the
fulfillment at or prior to the effective time of the merger of the following
additional conditions, any one or more of which may be waived by Landry's:
. the representations and warranties of Rainforest must be true and correct
in all material respects (except that where any statement in a
representation or warranty expressly includes a "material adverse effect"
or other materiality qualifier, it must be true and correct in all
respects) as of the date of the merger agreement and as of the closing
date as if it were made on and as of the date of the closing date, except
for those which speak of an earlier date which must be true and correct
only as of that earlier date
. Rainforest must have performed and complied with all of its covenants and
agreements in all material respects and satisfied in all material
respects all the conditions required by the merger agreement to be
performed or complied with or satisfied by it at or prior to the
effective time of the merger
. there have been no changes, conditions, events or developments that have
or would reasonably be expected to have a material adverse effect on
Rainforest (as defined in the merger agreement) since the date of the
merger agreement
. the delivery by Rainforest of customary closing certificates and other
documents
. the receipt by Landry's of an opinion from its tax counsel substantially
to the effect that, if the merger is consummated in accordance with the
provisions of the merger agreement, the merger will qualify as a tax-free
reorganization
. the receipt of all requisite governmental approvals and consents, unless
they have been waived or will not have a material adverse effect on
either Landry's or Rainforest
. the receipt of any material required consents of any third party, other
than those which have been waived by Landry's
. that the employee termination, consulting and non-competition agreements
with Lyle Berman, Kenneth Brimmer, Steven Schussler and Ercument Ucan be
in full force and effect
Termination and Abandonment
The merger agreement may be terminated at any time prior to the effective
time, whether before or after approval by the shareholders of Rainforest:
. by mutual written consent of Landry's and Rainforest
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<PAGE>
. by either Landry's or Rainforest, if:
. the merger has not been consummated on or prior to August 31, 2000,
unless the party seeking termination caused the merger not to be
consummated on or prior to such date by not performing its obligations
under the merger agreement
. the vote of Rainforest's shareholders is insufficient to approve the
merger
. any governmental authority has permanently prohibited the consummation
of the merger
. by Landry's, if Rainforest has breached in any material respect any of
its representations, warranties, covenants or other agreements, which
breach or failure to perform is incapable of being cured or has not been
cured within 20 business days after Landry's has given written notice of
such breach to Rainforest
. by Landry's if (i) the Rainforest board of directors has withdrawn or
modified its approval or recommendation of the merger in a manner adverse
to Landry's, or failed to reconfirm its recommendation within 15 business
days after a written request to do so, or approved or recommended any
superior takeover proposal, or (ii) the Rainforest board of directors has
resolved to take any of the foregoing actions
. by Rainforest, if Landry's has breached in any material respect any of
its representations, warranties, covenants or other agreements, which
breach or failure to perform is incapable of being cured or has not been
cured within 20 business days after Rainforest has given written notice
of such breach to Landry's
. by Landry's on or before April 21, 2000 (or a subsequent date if
Rainforest does not deliver certain notices to Landry's on a timely
basis) if any material third party consent (other than those from
governmental authorities) the receipt of which has not been waived by
Landry's, has not been obtained
. without any action on the part of either Landry's or Rainforest, on April
22, 2000 (or a subsequent date if Rainforest does not deliver certain
notices to Landry's on a timely basis) if Landry's has not terminated the
merger agreement because a material third party consent (other than a
governmental consent) has not been obtained, or if Landry's has not
waived any material consents required from third parties (other than from
governmental authorities) which have not been obtained by Rainforest
prior to or on April 21, 2000 (or a subsequent date if Rainforest does
not deliver certain notices to Landry's on a timely basis)
The April 21, 2000 date (the "Decision Date") is defined in the merger
agreement as ten business days following the later of April 9, 2000 (the date
by which Rainforest must give Landry's notice of the status of all material
consents required for consummation of the merger (the "Consent Notice")) and
the date on which Landry's actually receives the Consent Notice.
Termination Fee
In the event that prior to termination of the merger agreement, a bona fide
takeover proposal for Rainforest has been made known to Rainforest or has been
made directly to its shareholders generally or any person has publicly
announced an intention to make a bona fide takeover proposal for Rainforest,
and thereafter the merger agreement is terminated, in certain cases, Rainforest
will have to pay Landry's a $1,000,000 termination fee.
Amendment and Modification; Expenses
The merger agreement may be amended, modified or supplemented only by a
written agreement between Rainforest, Landry's and LSR. All costs and expenses
incurred in connection with the merger will be paid by the party who incurred
them.
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THE STOCKHOLDER AGREEMENTS
Simultaneously with the execution of the merger agreement, Landry's entered
into a stockholder agreement with each of Lyle Berman and Steven W. Schussler,
two significant employee/directors of Rainforest. As of the date of this Proxy
Statement/Prospectus, Mr. Berman held approximately [1,524,749] shares of
Rainforest common stock (or approximately [6.6%] of the outstanding Rainforest
common stock) and Mr. Schussler held [943,692] shares of Rainforest common
stock (or approximately [4.1%] of the outstanding Rainforest common stock).
Under the terms of the stockholder agreements, each of Messrs. Berman and
Schussler have agreed to vote his shares of Rainforest common stock in favor of
the merger proposal and the adjournment proposal and against any competing
takeover proposal for Rainforest. In connection therewith, each of Messrs.
Berman and Schussler has granted to certain officers of Landry's an irrevocable
proxy to vote all of his shares of Rainforest common stock in favor of the
merger proposal and the adjournment proposal and against any competing takeover
proposal. Additionally, each of Messrs. Berman and Schussler has agreed to
waive any dissenters' rights they may have with respect to the merger, and each
such person has agreed not to transfer, sell or otherwise dispose of their
shares of Rainforest common stock without Landry's consent.
Copies of such stockholder agreements have been filed as exhibits to the
Registration Statement of which this Proxy Statement/Prospectus constitutes a
part. See "Where You Can Find More Information."
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THE EMPLOYEE TERMINATION,
CONSULTING AND NON-COMPETITION AGREEMENTS
Simultaneously with the execution of the merger agreement, Landry's has
entered into an employment termination, consulting and non-competition
agreement (each, a "non-competition agreement") with each of four executive
officers of Rainforest: Lyle Berman, Kenneth Brimmer, Steven W. Schussler and
Ercument Ucan. The non-competition agreements will become effective upon the
consummation of the merger.
In consideration of the consulting, non-competition, non-solicitation and
other provisions under each non-competition agreement, Landry's will pay to
each of Messrs. Berman, Brimmer, Schussler and Ucan an aggregate amount equal
to $1.5 million dollars. Of this amount, $1.4 million will be paid to each such
person at the closing of the merger and $100,000 will be paid ninety days
thereafter.
As of [to come], 2000, the latest practicable date prior to the printing of
this Proxy Statement/Prospectus, Messrs. Berman, Brimmer, Schussler and Ucan
held 750,000, 300,000, 164,000 and 511,250 options to purchase shares of
Rainforest common stock, respectively. The average exercise price of such
options held by Messrs. Berman, Brimmer, Schussler and Ucan was $[to come],
$[to come], $[to come] and $[to come], respectively. Pursuant to the non-
competition agreements, all options to purchase shares of Rainforest common
stock held by Messrs. Berman, Brimmer, Schussler and Ucan which are not
exercised by the effective time of the merger will be cancelled at such time
(other than 76,500 and 75,000 options with respect to Messrs. Schussler and
Ucan, respectively). As of February 8, 2000, the last trading day prior to the
announcement of the proposed merger transaction, the closing market price of
Rainforest common stock was $4.0625, and the exercise price of 39,000 and
386,250 options held by Messrs. Schussler and Ucan, respectively, was at or
below the closing price of Rainforest common stock on such date. The average
exercise price of such "in the money" options of Messrs. Schussler and Ucan
were $[to come] and $[to come], respectively. No options held by either of
Messrs. Berman or Brimmer were at or below the closing market price of
Rainforest common stock on such date. As of [to come], 2000, the closing market
price of Rainforest common stock was $[to come], and the exercise price of [to
come], [to come], [to come] and [to come] options held by Messrs. Berman,
Brimmer, Schussler and Ucan, respectively, was at or below the closing price of
Rainforest common stock on such date. The average exercise price of such "in
the money" options held by Messrs. Berman, Brimmer, Schussler and Ucan was $[to
come], $[to come], $[to come] and $[to come], respectively.
Under the non-competition agreements, each of Messrs. Berman's, Brimmer's,
Schussler's and Ucan's employment with Rainforest will terminate at the
effective time of the merger. Each such person has, however, agreed to render
certain consulting services to Landry's for a limited period of time following
the merger in connection with general business and transitional matters
relating to the merger and the integration of Landry's and Rainforest's
businesses.
Additionally, under the non-competition agreements, each of Messrs. Berman,
Brimmer, Schussler and Ucan has agreed for a limited period of time following
the effective time of the merger not to compete with Rainforest's business, not
to solicit for employment certain Rainforest employees and not to disclose any
of the confidential information acquired by him about Rainforest's business, in
each case subject to certain limitations.
Copies of such non-competition agreements have been filed as exhibits to the
Registration Statement of which this Proxy Statement/Prospectus constitutes a
part. See "Where You Can Find More Information."
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BENEFICIAL OWNERSHIP OF RAINFOREST
The following table sets forth, as of March 3, 2000, certain information
regarding the beneficial ownership of shares of Rainforest common stock by each
director of Rainforest, each executive officer of Rainforest, each person known
by Rainforest to be the beneficial owner of more than 5% of the outstanding
shares of Rainforest common stock and all directors and executive officers as a
group. The following table gives effect to the consummation of the merger
including the cancellation of certain options pursuant to the terms of Messrs.
Berman, Brimmer, Schussler and Ucan's respective employee termination,
consulting and non-competition agreements. Except as otherwise indicated, each
shareholder has sole voting and investment power with respect to the shares he
beneficially owned. Unless otherwise indicated, the address of the directors
and executive officers is 720 South Fifth Street, Hopkins, Minnesota 55343.
<TABLE>
<CAPTION>
Percent
of
Name of Beneficial Owner Number Class
------------------------ --------- -------
<S> <C> <C>
Lyle Berman(1)(7)..................................... 1,524,749 6.55%
Steven W. Schussler(2)(7)............................. 982,692 4.22
Ercument Ucan(3)...................................... 393,968 1.67
Kenneth W. Brimmer(4)................................. 56,128 *
David L. Rogers(5).................................... 117,188 *
Joel N. Waller(5)..................................... 74,375 *
Robert Hahn(6)........................................ 82,040 *
All directors and executive officers as a group (nine
persons)............................................. 3,469,525 14.36
</TABLE>
- --------
* Less than 1%.
(1) The address of this reporting person is 130 Cheshire Lane, Minnetonka,
Minnesota 55305.
(2) Includes 39,000 shares subject to options which are exercisable within 60
days.
(3) Includes 386,250 shares subject to options which are exercisable within 60
days. 311,250 of such options will be cancelled if not exercised by the
effective time of the merger.
(4) Includes 10,000 shares owned by Mr. Brimmer's spouse.
(5) Includes 72,188 shares subject to options which are exercisable within 60
days assuming consummation of the merger.
(6) Includes 80,000 shares subject to options which are exercisable within 60
days assuming consummation of the merger.
(7) As a result of the execution of the stockholder agreements between Landry's
and each of Mr. Berman and Mr. Schussler, Landry's may be deemed to have
shared voting and dispositive power with respect to the shares of
Rainforest common stock owned by such individuals. However, nothing
contained herein shall be construed as an admission that Landry's or any of
its executive officers or directors beneficially owns any of the shares of
Rainforest common stock subject to the stockholder agreements. Nor shall
anything contained herein be construed as an admission of the existence of
a "group" as defined in Rule 13d-3(a) of the Exchange Act. See "THE
STOCKHOLDER AGREEMENTS".
Upon consummation of the merger, each of the persons specified above would
be entitled to receive merger consideration with respect to their shares of
Rainforest common stock.
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<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following unaudited pro forma condensed combined financial information
gives effect to the merger using the purchase method of accounting, with
Landry's as the acquiror, after giving effect to the pro forma adjustments
described in the accompanying notes. The unaudited pro forma condensed combined
financial information should be read in conjunction with the audited historical
financial statements and related notes of Landry's and Rainforest, which are
incorporated by reference into this Proxy Statement/Prospectus.
We are providing this information to aid you in your analysis of the
financial aspects of the merger. We derived this information from the audited
financial statements of Landry's for the year ended December 31, 1999 and from
the audited financial statements of Rainforest for the year ended January 2,
2000.
The unaudited pro forma condensed combined balance sheet gives effect to the
merger as if it had occurred on December 31, 1999 and combines the unaudited
condensed combined historical balance sheets of Landry's and Rainforest as of
December 31, 1999. The unaudited pro forma condensed combined statements of
income for the year ended December 31, 1999 assume the merger was effected on
January 1, 1999.
The unaudited pro forma condensed combined financial information is
presented for illustrative purposes only and does not purport to be indicative
of the operating results or financial position that would have actually
occurred if the merger had been in effect on the dates indicated, nor is it
indicative of the future operating results or financial position of the
combined company. The pro forma adjustments are based on the information and
assumptions available at the time of the printing of this Proxy
Statement/Prospectus.
52
<PAGE>
Unaudited Pro Forma Condensed Combined Balance Sheet
As of December 31, 1999
(in thousands)
<TABLE>
<CAPTION>
Historical Pro
------------------- Pro Forma Forma
Landry's Rainforest Adjustments Combined
-------- ---------- ----------- --------
<S> <C> <C> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents......... $ 22,978 $ 35,437 ($53,750)A $ 4,665
Accounts receivable............... 7,065 8,027 15,092
Note receivable from related
party............................ -- 1,721 (1,721)A --
Inventories....................... 18,410 9,043 27,453
Deferred income taxes............. 1,228 10,198 (7,198)A 4,228
Other current assets.............. 9,030 2,986 12,016
-------- -------- --------
Total current assets............ 58,711 67,412 63,454
Property, plant & equipment, net.... 431,379 186,042 (95,405)A 522,016
Goodwill, net....................... 2,708 -- 2,708
Non current deferred income taxes... -- -- 25,000 A 25,000
Other Non-Current Assets, net....... 3,929 8,262 12,191
-------- -------- --------
Total Assets........................ $496,727 $261,716 $625,369
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable.................. $ 21,417 $ 4,397 $ 25,814
Accrued liabilities............... 19,772 9,774 5,000 A 34,546
Current portion of long-term notes
and other obligations............ 68,093 -- 68,093
-------- -------- --------
Total current liabilities....... 109,282 14,171 128,453
Long-term Notes and Other
Obligations, Net of Current
Portion............................ 60 -- 60
Deferred Occupancy Costs............ -- 27,434 27,434
Deferred Income Tax................. 10,037 9,385 (9,385)A 10,037
-------- -------- --------
Total liabilities............... 119,379 50,990 165,984
Commitments and Contingencies....... -- -- --
Minority Interest................... -- 1,168 1,168
Put Option Obligation............... -- 7,166 7,166
Shareholders' Equity................ 377,348 202,392 (128,689)A 451,051
-------- -------- --------
Total Liabilities and Shareholders'
Equity.............................. $496,727 $261,716 $625,369
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these Unaudited Pro Forma
Condensed Combined Financial Statements.
53
<PAGE>
Unaudited Pro Forma Condensed Combined Statements of Income
For the Year Ended December 31, 1999
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Historical
------------------- Pro Forma Pro Forma
Landry's Rainforest Adjustments Combined
-------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues:
Restaurant Sales................. $438,986 $209,326 ($3,936)C $644,376
Retail Sales..................... -- 50,094 (960)C 49,134
Licensing fees & royalties....... -- 3,270 3,270
-------- -------- --------
Total revenue.................. 438,986 262,690 696,780
Costs and Expenses:
Food and beverage costs.......... 136,321 49,502 (981)C 184,842
Cost of retail goods sold........ -- 24,254 (447)C 23,807
Restaurant Labor................. 125,566 69,637 (1,754)C 193,449
Restaurant operating expenses.... 101,563 48,236 (2,460)C 147,339
Retail operating expenses........ -- 18,103 (164)C 17,939
General and administrative....... 21,354 14,221 35,575
Preopening expenses.............. 3,764 4,250 8,014
Depreciation and amortization.... 22,230 20,210 (10,156)B 32,284
Special charges/(credits), net... 2,945 7,615 10,560
-------- -------- --------
Total costs and expenses....... 413,743 256,028 653,809
Income from Operations and
Licensing......................... 25,243 6,662 42,971
Other (Income) Expense, net........ 1,789 (2,029) (240)
-------- -------- --------
Income before Income Taxes......... 23,454 8,691 43,211
Provision for Income Taxes......... 8,080 2,997 3,818 D 14,895
-------- -------- --------
Net Income..................... $ 15,374 $ 5,694 $ 28,316
======== ======== ========
Earnings Per Share Data:
Basic
Net income per common share........ $ 0.58 $ 0.24 $ 0.79
Weighted average number of common
shares outstanding................ 26,675 24,204 (15,176)E 35,703
Diluted
Net income per common share........ $ 0.57 $ 0.23 $ 0.79
Weighted average number of common
shares outstanding................ 27,025 24,637 (15,609)E 36,053
</TABLE>
The accompanying notes are an integral part of these Unaudited Pro Forma
Condensed Combined Financial Statements.
54
<PAGE>
Notes to Unaudited Pro Forma Condensed Combined Financial Statements
Note 1. Basis of Presentation
The unaudited pro forma condensed combined financial statements are based on
the consolidated financial statements of Landry's and Rainforest as of and for
the year ended December 31, 1999 for Landry's and as of and for the year ended
January 2, 2000 for Rainforest.
Landry's and Rainforest consolidated financial statements are prepared in
conformity with accounting principles generally accepted in the United States
and require management to make estimates that affect the reported amounts of
assets, liabilities, revenues and expenses and the disclosure of contingent
assets and liabilities. Actual results could differ from these estimates. In
the opinion of Landry's and Rainforest, the unaudited pro forma condensed
combined financial statements include all adjustments necessary to present
fairly the pro forma results of the periods presented. The pro forma
adjustments are based on preliminary estimates, available information and
certain assumptions, and may be revised as additional information becomes
available. These pro forma results have been prepared for comparative purposes
only and do not purport to be indicative of the results of operations that
would have resulted had the combination been in effect on the date indicated,
or that may result in the future.
Note 2. Accounting Policies and Financial Statement Classification
The accounting policies of Landry's and Rainforest are substantially
consistent. Consequently, it was not necessary to make adjustments to the
unaudited pro forma condensed combined financial statements to conform the
accounting policies of the companies.
Certain items in the consolidated financial statements of Rainforest have
been reclassified to conform to the presentation in the unaudited pro forma
condensed combined financial statements.
Note 3. Pro Forma Earnings Per Share
The pro forma combined net income per common share is based on net income
and the weighted average number of outstanding common shares, basic and
diluted. The weighted average number of common shares has been adjusted to
reflect the exchange ratio of 0.5816th of a share of Landry's common stock for
each share of Rainforest common stock.
Note 4. Merger Related Expenses
Merger related fees and expenses are estimated to be approximately
$10,000,000. These fees and expenses consist of termination/non-competition
payments of $6,000,000 to certain officers of Rainforest, payment of $2,000,000
to Lakes Gaming, Inc. pursuant to the terms of a mutual termination agreement
and $2,000,000 of costs relating to the following: employee severance,
relocation costs, professional fees, financial printing, SEC filing fees and
other related charges. The fees and expenses are considered a component of the
purchase price and are allocated to the fair value of net assets purchased.
Note 5. Pro Forma Adjustments
(A) Reflects the purchase of all outstanding shares of Rainforest common
stock for $43,750,000 in cash and $73,703,000 in shares of Landry's common
stock, (9,028,000 shares at $8.1638 per share) fees and expenses of
approximately $10,000,000, and the adjustments to fair value for the net assets
acquired. The adjustment to fair value includes the write down of property,
plant and equipment to $90,600,000, the recognition of a deferred tax asset of
approximately $25,000,000 for the difference between the book and tax basis in
the assets acquired, the recording of an accrual for estimated lease
termination costs of the Rainforest Cafe in Aventura, Florida of approximately
$3,000,000, and the recording of a $2,000,000 accrual for the termination fee
payable to Lakes Gaming, Inc.
55
<PAGE>
(B) Reflects the reduced depreciation expense as the result of the write
down of property, plant and equipment to fair value. The fair value of
property, plant and equipment is estimated to be approximately $90,600,000 and
the annual depreciation expenses is estimated to be approximately $10,663,000.
(C) Reflects the elimination of the operations of the Rainforest Cafe in
Aventura, Florida for the year ended January 2, 2000.
(D) Reflects the increased book income tax expense related to the increase
in taxable income as the result of the net reduction in expenses.
(E) Reflects the retirement of all outstanding shares of Rainforest common
stock (23,246,000 common shares) and the issuance of approximately 9,028,000
shares of Landry's common stock.
56
<PAGE>
COMPARATIVE RIGHTS OF HOLDERS OF
RAINFOREST CAPITAL STOCK AND LANDRY'S CAPITAL STOCK
General
As a result of the merger, holders of Rainforest common stock, whose rights
are presently governed by the Minnesota Business Corporation Act (the "MBCA"),
the Rainforest Articles of Incorporation (the "Rainforest Articles") and the
Rainforest Bylaws, will become shareholders of Landry's which is a Delaware
corporation. Accordingly, their rights will be governed by the Delaware General
Corporation Law (the "DGCL"), the Landry's Certificate of Incorporation (the
"Landry's Certificate") and the Landry's Bylaws. Certain differences in the
rights of shareholders arise from distinctions between the MBCA and the DGCL as
well as from the Rainforest Articles and Rainforest Bylaws as compared to the
Landry's Certificate and the Landry's Bylaws. The following is a brief
description of those differences. This discussion is not intended to be a
complete statement of the differences but rather a summary of the more
significant differences affecting the rights of such shareholders and certain
important similarities. The following summary is qualified in its entirety by
reference to the MBCA, the DGCL, the Rainforest Articles and Rainforest Bylaws,
and the Landry's Certificate and Landry's Bylaws.
MINNESOTA CORPORATION DELAWARE CORPORATION
Authorized Capital Stock
The Rainforest Articles authorize The Landry's Certificate
the issuance of up to 50,000,000 authorizes the issuance of up to
shares of capital stock, no par 60,000,000 shares of common stock,
value per share in the case of par value $.01 per share, of which
common stock, and a par value as [24,824,133 ] shares were issued and
determined by its board of directors outstanding as of [February 8,
in the case of preferred stock. As 2000], and up to 2,000,000 shares of
of [February 8, 2000, 23,732,232 ] preferred stock, par value $.0l per
shares of Rainforest common stock share, of which no shares were
were issued and outstanding. The issued and outstanding as of
Rainforest common stock is the only [ ]. The Landry's
class or series of Rainforest preferred stock is issuable in
capital stock issued and series, each series having such
outstanding. rights and preferences as Landry's
board of directors may fix and
The MBCA does not allow shares to determine by resolution. As of
be held in treasury. , like Rainforest, Landry's
common stock was the only class or
series of Landry's capital stock
issued and outstanding. The merger
agreement does not prohibit, nor is
Landry's otherwise prohibited from,
issuing additional shares of common
stock or preferred stock.
Under the DGCL, treasury shares
may be held, sold, lent, pledged,
exchanged, transferred or otherwise
disposed of by Landry's. Treasury
shares, however, are not outstanding
shares and therefore do not have
voting rights.
57
<PAGE>
Amendment of Charter and Bylaws
Under the MBCA and the Rainforest The DGCL generally provides that
Articles, amendments to the the affirmative vote of a majority
Rainforest Articles generally of a corporation's outstanding
require the affirmative vote of the shares entitled to vote for the
holders of a majority of the amendment, and the affirmative vote
outstanding shares of common stock of the holders of a majority of the
present and entitled to vote on the outstanding shares of each class
amendment. Prior to submitting a entitled to vote for the amendment,
resolution for a shareholder vote, are required to amend a
the resolution must be approved by a corporation's certificate of
majority of directors present at a incorporation, unless the
meeting where the resolution is certificate of incorporation
considered, unless the resolution is requires a greater vote. The
proposed by a shareholder or Landry's Certificate contains no
shareholders holding three percent provisions regarding the amendment
or more of the voting power of the of the Landry's Certificate.
outstanding shares entitled to vote.
The Landry's Certificate provides
Under the MBCA and the Rainforest that the Landry's Bylaws may be
Bylaws, the power to adopt, amend or amended or repealed by its board of
repeal the Rainforest Bylaws is directors or by the holders of a
vested in the board and is subject majority of the shares present and
to the power of the shareholders to entitled to vote at any duly held
adopt, amend or repeal bylaws meeting of shareholders or pursuant
adopted, amended, or repealed by the to a written consent signed by such
board. The board shall not, without majority of shareholders entitled to
shareholder approval, adopt, amend, vote thereon.
or repeal a bylaw fixing a quorum
for meetings of shareholders, The DGCL, however, provides that
prescribing procedures for removing although a corporation's certificate
directors or filling vacancies on of incorporation may empower its
the board, or fixing the number of board of directors to amend or
directors or their classifications, repeal its bylaws, conferring that
qualifications, or terms of office, power on the board does not divest
but may adopt or amend a bylaw to the shareholders of the right to
increase the number of directors. A adopt, amend or repeal any bylaws.
shareholder or shareholders holding
three percent or more of the voting
power of the shares entitled to vote
may propose a resolution for action
by the shareholders to adopt, amend,
or repeal bylaws adopted, amended or
repealed by the board. Except as
discussed above, the Rainforest
Bylaws may be amended by a majority
vote of those directors present at a
meeting at which a quorum is
present.
58
<PAGE>
Board of Directors; Cumulative Voting; Preemptive Rights
The MBCA requires that a The DGCL requires that a
corporation must have at least one corporation must have at least one
director and permits the board of director. The number of directors
directors to be divided into classes must be fixed by, or in the manner
without regard to the size of the provided in, the bylaws, unless the
board of directors. The Rainforest certificate of incorporation fixes
Bylaws provide that the number of the number of directors. The
directors of Rainforest may either Landry's Certificate provides for
be increased or decreased by a its board of directors to consist of
resolution of the shareholders and five members. The Landry's Bylaws
the number of directors my be provide that the number of directors
increased by a resolution of the may be increased or decreased from
board of directors. The Rainforest time to time by amendment of the
board of directors is not Landry's Bylaws but no decrease in
classified. In addition, the the number of directors can have the
Rainforest Articles prohibit effect of shortening the term of an
cumulative voting for the election incumbent director. Landry's
of directors and deny preemptive Certificate, like the Rainforest
rights to Rainforest shareholders. Articles, does not permit cumulative
voting. The DGCL provides that a
corporation's shareholders will have
preemptive rights only if such
rights are expressly granted in the
corporation's certificate of
incorporation. Landry's Certificate
specifically denies preemptive
rights.
Removal of Directors and Vacancies
Under the MBCA, any director may Under the DGCL, unless a
be removed by the board at any time, corporation's board is classified or
with or without cause, if the unless it has cumulative voting, any
director was named by the board to director or the entire board may be
fill a vacancy, the shareholders removed, with or without cause, by
have not elected directors in the the holders of a majority of shares
interval between the time of the entitled to vote at an election for
appointment to fill a vacancy and directors. Under the Landry's
the time of the removal of such Bylaws, any director may be removed
director, and a majority of the with or without cause at an annual
remaining directors affirmatively or special meeting of shareholders
vote for the removal of such by the holders of a majority of
director. Shareholders may remove shares present and entitled to vote
directors at any time, with or for the election of such director,
without cause, by an affirmative provided that notice of the
vote of the majority of the voting intention to remove the director is
power of all shares entitled to vote given in the notice to call the
at an election of directors; meeting. Vacancies in Landry's board
provided that, if a director has of directors, including vacancies
been elected solely by the holders created by newly created
of a class or series of shares, then directorships resulting from an
that director may be removed only by increase in the number of directors,
the affirmative vote of the holders are filled by Landry's board of
of a majority of the voting power of directors, acting by a vote of at
all shares of that class or series least a majority of the directors
entitled to vote at an election of then in office, even if less than a
that director. Under the MBCA, quorum, and any director so chosen
unless a corporation's articles or will serve until the first annual
bylaws provide otherwise, (i) a meeting of shareholders held after
vacancy on a corporation's board of his selection to the board.
directors may be filled by the vote
of a majority of directors then in
office, although less than a quorum,
(ii) a newly created directorship
resulting from an increase in the
number of directors may be filled by
the board, and (iii) any director
elected pursuant to clause (i) or
(ii) above can hold office only
until a qualified successor is
elected at the next regular or
special meeting of shareholders. The
Rainforest Bylaws follow these
provisions.
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<PAGE>
Limitation of Director Liability
The MBCA allows a corporation to The corresponding provisions of
include in its charter a provision the DGCL are substantially similar.
that eliminates or limits the
personal liability of a director to The Landry's Certificate also
the corporation or its shareholders includes a provision eliminating
for monetary damages for a breach of such director liability, subject to
fiduciary duty as a director, except the exceptions of the DGCL.
for:
. any breach of the director's duty
of loyalty;
. acts or omissions not in good
faith or that involve intentional
misconduct or a knowing violation
of law;
. distributions that are illegal
under applicable law;
. any transaction from which the
director derived an improper
personal benefit; or
. any act or omission occurring
prior to the date when the
provision in the charter
eliminating or limiting liability
became effective.
The Rainforest Articles eliminate
personal liability for a breach of
fiduciary duty.
Indemnification
The MBCA requires indemnification Under the DGCL, a corporation may
for any director, officer or indemnify any person made a party or
employee if such person: threatened to be made a party to any
type of proceeding (whether
threatened, pending or completed),
. acted in good faith; other than action by or in the right
of the corporation, because he is or
. reasonably believed that such was an officer, director, employee
conduct was in, or, in some or agent of the corporation or was
circumstances, not opposed to, the serving at the request of the
corporation's best interests; corporation as a director officer,
employee or agent of another
. in the case of any criminal corporation or entity, against
proceeding, had no reasonable expenses, judgments, fines and
cause to believe such conduct was amounts paid in settlement actually
unlawful; and and reasonably incurred in
connection with such proceeding if:
. received no improper personal
benefit and has not been . he acted in good faith and in a
indemnified from another source. manner he reasonably believed
to be in or not opposed to the
best interests of the
The Rainforest Bylaws require corporation; or
Rainforest to indemnify its
directors, officers and employees to
the fullest extent permissible under . in the case of a criminal
the MBCA. proceeding, he had no
reasonable cause to believe
that his conduct was unlawful.
A corporation may indemnify any
person made a party or threatened to
be made a party to any threatened,
pending or completed action or suit
brought by or in the right of the
corporation because he was an
officer, director, employee or agent
of the
60
<PAGE>
corporation, or is or was serving at
the request of the corporation as a
director, officer, employee or agent
of another corporation or other
entity, against expenses actually
and reasonably incurred in
connection with such action or suit
if he acted in good faith and in a
manner he reasonably believed to be
in or not opposed to the best
interests of the corporation.
Indemnification will be denied if
the person is found liable to the
corporation unless, in such a case,
the court determines the person is
entitled to indemnification. A
corporation must indemnify a
director, officer, employee or agent
who successfully defends himself in
a proceeding to which he was a party
because he was a director, officer,
employee or agent of the corporation
against expenses actually and
reasonably incurred by him.
Expenses incurred by an officer or
director, or any employees or agents
as deemed appropriate by the board
of directors, in defending any
civil, criminal, administrative or
investigative action, suit or
proceeding may be paid by the
corporation in advance of the final
disposition of such proceeding upon
receipt of an undertaking by or on
behalf of such director or officer
to repay such amount if it shall
ultimately be determined that he is
not entitled to be indemnified by
the corporation. The DGCL
indemnification and expense
advancement provisions are not
exclusive of any other rights which
may be granted by a corporation's
bylaws, a vote of shareholders or
disinterested directors, agreement
or otherwise.
The Landry's Certificate and Bylaws
provide for indemnification of its
officers, directors, employees and
agents to the fullest extent
permitted by the DGCL.
61
<PAGE>
Special Meetings of Shareholders
Pursuant to the MBCA and the Under the DGCL special meetings of
Rainforest Bylaws, special meetings shareholders may be called by the
of Rainforest shareholders may be board of directors or by persons
called for any purpose at any time authorized by a corporation's
by the President, a Vice President, certificate of incorporation or
the Treasurer, the board of bylaws. The Landry's Bylaws provide
directors or by any two or more that special meetings of Landry's
members thereof; or shareholders shareholders may be called by the
holding 10% or more (or, in the case President, the board of directors or
of any meeting to approve a business the holders of not less than 10%
combination, 25% or more) of the of the shares of the corporation
voting power of all shares entitled entitled to vote at a the meeting.
to vote. Any business conducted at a Any business conducted at a special
special meeting of Rainforest meeting of Landry's shareholders must
shareholders shall be confined to be confined to the purposes stated in
the purposes stated in the notice of the notice of meeting.
meeting.
Actions by Shareholders Without a Meeting
Under the MBCA, an action The Landry's Bylaws, consistent
required or permitted to be taken at with the DGCL, but in contrast to the
a meeting of the shareholders may be MBCA, do not require unanimous
taken without a meeting by written written consent for shareholder
action only if signed by all of the action without a meeting. The
shareholders entitled to vote on Landry's Bylaws provide that any
that action. action required to be taken or which
may be taken at any annual or special
meeting of shareholders may be taken
without a meeting, without prior
notice and without a vote, if a
consent or consents in writing,
setting forth the action so taken, is
signed by the holders of shares of
outstanding stock having not less
than the minimum number of votes that
would be necessary to authorize or
take such action at a meeting at
which all shares entitled to vote
thereon were present and voted.
Shareholder Nominations and Proposals
The Rainforest Bylaws do not The Landry's Certificate and
specifically provide for provisions Bylaws do not specifically provide
on shareholder nominations of for shareholder nominations of
persons for election to the board of persons for election to the Landry's
directors or other shareholder board of directors or for other
proposals, except for proposals to shareholder proposals.
amend the Bylaws.
62
<PAGE>
Mergers, Share Exchanges, Sales of Assets, Business Combinations
with Certain Persons and Acquisitions of Shares
The MBCA generally requires the The DGCL requires the approval of
affirmative vote of the holders of a the board of directors and the
majority of the voting power of all holders of a majority of the
shares entitled to vote for approval outstanding shares entitled to vote
of mergers and consolidations or the thereon for mergers or
sale or exchange of all, or consolidations, and for sales,
substantially all, of a leases or exchanges of all or
corporation's assets. Under the substantially all of its property
MBCA, shareholder approval is not and assets.
required for a merger or
consolidation if the articles of The DGCL, like the MBCA, permits
incorporation will not be amended in a surviving corporation to merge
the transaction, if each shareholder with another corporation without
before the transaction will continue obtaining the approval of its
to hold the same number of shares shareholders if:
with identical rights after the
transaction, and if the number of . the merger agreement does not
shares issuable with voting power amend its certificate of
and the number of participating incorporation;
shares (i.e., shares that entitle
the holder to participate without . each share of the surviving
limitation in distributions) common stock outstanding
immediately after the transaction, immediately prior to the
plus those issuable upon conversion effective date of the merger is
or exercise of other securities or to be an identical outstanding
obligations issued in the or treasury share of the
transaction, will not exceed by more surviving common stock after
than 20% the number of shares with the merger; and any authorized
voting power and the numbers of but unissued shares or treasury
participating shares, as the case shares of the surviving common
may be, immediately before the stock to be issued or delivered
transaction. under the plan of merger plus
those initially issuable upon
The Minnesota control share conversion of any other
acquisition statute requires securities or obligations to be
disinterested shareholder approval issued or delivered under such
for any acquisition of shares of an plan do not exceed 20% of the
"issuing public corporation" which shares of the surviving common
results in the "acquiring person" stock outstanding immediately
owning more than a designated prior to the effective date of
percentage of the outstanding shares the merger.
of such corporation. Shares
beneficially owned by the acquiring There are no provisions of
person that exceed certain share Delaware law comparable to the
ownership thresholds lose their Minnesota control share acquisition
voting power unless and until the act.
acquiring person discloses certain
information to the corporation and Section 203 of the DGCL governs
voting rights are granted by the business combinations (e.g. mergers,
shareholders at a special or annual sales and leases of assets,
meeting of the shareholders or the issuances of securities) and certain
shares are transferred to an other similar transactions between a
unaffiliated third party. These Delaware public company and an
shares may also be subject to "interested stockholder." An
redemption rights in various interested stockholder is a person
circumstances. The Minnesota control who beneficially owns or has the
share acquisition statute applies right to vote 15% (unlike 10% in
unless the "issuing public Minnesota) or more of a company's
corporation" opts out of the statute outstanding shares.
in its articles of incorporation or
bylaws approved by its shareholders. Section 203 will not apply if:
Rainforest has not opted out of such
provisions. Under Minnesota law, . prior to the person or entity
control share acquisitions do not becoming an interested
include, among other things: shareholder, the business
combination or the transaction
. mergers or consolidations if the pursuant to which such person
issuing public corporation is a or entity became an interested
party to the transaction; shareholder was approved by
Landry's board of directors, or
. an acquisition from the issuing
public corporation; and
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. an acquisition subsequent to . upon consummation of the
January 1, 1991, pursuant to an transaction in which he became
offer to purchase, for cash, an interested shareholder, the
pursuant to a tender offer for all interested shareholder holds at
shares of the voting stock of the least 85% of the Landry's
issuing public corporation which common stock outstanding at the
has been approved by a majority time the transaction commenced
vote of the members of a committee (excluding shares held by
comprised of the disinterested persons who are both officers
members of the board of directors and directors and shares held
of the issuing public corporation by certain employee stock
formed before the commencement of, plans); or
or the public announcement of the
intent to commence, the tender . following the transaction in
offer and pursuant to which which such person became an
acquisition the acquiring person interested shareholder, the
will become the owner of over 50% business combination is
of the voting stock of the issuing approved by a corporations
public corporation outstanding at board of directors and by the
the time of the transaction. holders of at least two-thirds
of the outstanding shares of
Rainforest is also subject to common stock (excluding shares
Section 302A.673 which generally owned by the interested
prohibits a Minnesota public shareholder) at an annual or
corporation from engaging in a special meeting of shareholders
"business combination" with an (and not by written consent).
"interested shareholder" for a
period of four years after the date The restrictions imposed on
of the transaction in which the interested shareholders under
person became an interested Section 203 do not apply under
shareholder, unless the business certain limited circumstances where
combination is approved in a a company proposes, with the
prescribed manner. "Business approval of the majority of the
combination" includes mergers, directors who were directors before
assets sales, certain issuances of any person became an interested
stock and other transactions stockholder, a merger or sale of at
resulting in a financial benefit to least 50% of its assets (as defined
the interested shareholder. An under Section 203) or supports (or
"interested shareholder" is a person does not oppose) a tender offer for
or an entity who is the beneficial at least 50% of its voting stock.
owner, directly or indirectly, of
10% or more of the voting power of Section 203 only applies to
the outstanding shares entitled to Delaware corporations which have a
vote of the issuing public class of voting stock that is listed
corporation or who is an affiliate on a national securities exchange,
or associate of the corporation and are authorized for quotation on
at any time within the four years NASDAQ or are held by record by more
prior to the date in question was than 2,000 shareholders. However, a
the beneficial owner, directly or Delaware corporation may elect not
indirectly, of 10% or more of the to be governed by Section 203 by a
voting power of the outstanding provision in its certificate of
shares entitled to vote of the incorporation or the bylaws. The
issuing public corporation. authorization of this provision must
be approved by a majority of the
shares entitled to vote and, in the
case of a bylaw amendment, may not
be further amended by the board of
directors. Currently, Section 203
applies to Landry's.
If Section 203 applies, then for
three years after a person becomes
an interested stockholder, the
following transactions between the
company and the interested
stockholder or persons related to
that stockholder are prohibited:
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. the sale, lease, exchange,
mortgage, pledge, transfer or
acquisition (other than
proportionately to
shareholders) of any interest
in assets worth more than 10%
of the market value of the
company's assets;
. mergers and similar
transactions;
. loans or guarantees; and
. subject to certain exceptions,
the issuance or transfer of
stock or any rights to acquire
stock of the company's
outstanding stock or the stock
of its subsidiaries.
Anti-Greenmail Provisions
The MBCA contains a provision There is no provision of the DGCL
which limits the ability of a which is analogous to the MBCA with
corporation to pay greenmail. respect to greenmail.
Pursuant to the statute, a publicly
held corporation is prohibited from
purchasing or agreeing to purchase
any shares from a person (or two or
more persons who act as a
partnership, limited partnership,
syndicate, or other group pursuant
to any written or oral agreement,
arrangement, relationship,
understanding, or otherwise for the
purpose of acquiring, owning or
voting shares of the publicly held
corporation) who beneficially owns
more than 5% of the voting power of
the corporation if the shares had
been beneficially owned by that
person for less than two years, and
if the purchase price would exceed
the market value of those shares.
However, such a purchase would not
violate the statute if the purchase
is approved at a meeting of the
shareholders by the majority of all
shares entitled to vote or if the
corporation's offer is at least of
equal value per share and is made to
all holders of any class or series
into which the securities may be
converted.
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Dissenters' Rights/Appraisal Rights
Under the MBCA, shareholders have The DGCL also provides
the right, under certain shareholders with the right, under
circumstances, to dissent from certain circumstances, to dissent
certain corporate transactions, from certain corporate transactions,
principally mergers and principally mergers and
consolidations, by demanding payment consolidations, by demanding payment
in cash for their shares equal to in cash for their shares equal to
the fair value, as determined by the the fair value (excluding any
corporation or by a court. Under the appreciation or depreciation as a
MBCA, Rainforest shareholders would consequence or in expectation of the
have dissenters' rights if transaction) as determined by the
Rainforest amends its articles in corporation or by an independent
such a way that materially and appraiser appointed by a court in an
adversely affects the rights or action timely brought by the
preferences of the shares of the dissenters.
dissenting shareholder, enters into
a sale, lease, transfer, or other Under the DGCL, no dissenters'
disposition of all or substantially rights exist for shares of stock of
all of the property and assets of a constituent corporation in a
the corporation, a plan of merger, a merger or consolidation that are
plan of exchange or any other action either listed on a national
taken pursuant to a shareholder vote securities exchange or designated as
if the articles, bylaws or a a national market system security on
resolution approved by the board an inter dealer quotation system by
directs that dissenting shareholders the NASD, or held of record by more
may obtain payment for their shares. than 2,000 shareholders. However,
For a discussion of Rainforest dissenters' rights will exist if the
shareholders' dissenters' rights of shareholders receive anything other
appraisal in connection with the than: (i) shares of stock (or
merger, see "Dissenters' Rights." depositary receipts) of the
corporation surviving or resulting
from such merger or consolidation;
(ii) shares of stock of any other
corporation (or depositary receipts)
which at the effective date of the
merger or consolidation will be
either listed on a national
securities exchange or designated as
a national market system security on
an inter dealer quotation system by
the NASD, or held of record by more
than 2,000 shareholders; (iii) cash
in lieu of fractional shares of the
corporation described in clauses (i)
and (ii) above; or (iv) any
combination of clauses (i), (ii) or
(iii). The Landry's Certificate does
not provide any appraisal rights. As
a Landry's shareholder, you will not
have appraisal rights other than as
set forth in the DGCL.
Shareholder's Right to Examine Books and Records
The MBCA provides that any The DGCL provides that a
shareholder or group of shareholders shareholder of a Delaware
of a publicly held corporation have corporation may inspect the books
the right, upon written demand and records (including shareholder
stating the purpose, to examine and lists) of the corporation during
copy the corporation's share normal business hours upon written
register and other corporate records demand under oath stating the purpose
upon demonstrating a proper purpose. of the inspection, if such purpose
is reasonably related to such person's
interest as a shareholder.
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Payment of Dividends
Under the MBCA, Rainforest may The DGCL provides that, subject
declare a dividend to its to any restrictions in the
shareholders if the board determines corporation's certificate of
that Rainforest will be able to pay incorporation, dividends may be
its debts in the ordinary course of declared from the corporation's
business after making the surplus (as defined by and computed
distribution and the board does not in accordance with the DGCL) or, if
know before the dividend is made there is no surplus, from its net
that the determination was or has profits for the fiscal year in which
become erroneous. A dividend may be the dividend is declared and the
made to the holders of a class or preceding fiscal year. However, if
series of shares only if all amounts the corporation's capital (as
payable to the holders of shares defined by and computed in
having a preference for the payment accordance with the DGCL) has been
are paid and the distribution does diminished to an amount less than
not reduce the remaining net assets the aggregate amount of the capital
of Rainforest below the aggregate represented by the issued and
preferential amount payable in the outstanding stock of all classes
event of liquidation to the holders having a preference upon the
of shares having preferential distribution of assets, dividends
rights, unless the distribution is may not be declared and paid out of
made to those shareholders in the net profits until the deficiency in
order and to the extent of their the capital has been repaired.
respective priorities.
Dissolution
Under the MBCA, voluntary Under the DGCL, voluntary
dissolution may be approved by the dissolution of a corporation may be
affirmative vote of the holders of a made by the adoption of a resolution
majority of the voting power of all by a majority of the members of the
shares entitled to vote. whole board of directors at any
meeting called for that purpose
followed by the affirmative vote of
the holders of the majority of the
outstanding shares entitled to vote
thereon. Dissolution may also be
authorized without board of director
approval if all the shareholders
entitled to vote thereon consent in
writing.
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<PAGE>
PROPOSALS OF SHAREHOLDERS FOR THE 2000 ANNUAL MEETING
Rainforest will hold its annual meeting of Rainforest shareholders only if
the merger is not consummated. Shareholder proposals sought to be included in
the proxy statement for the 2000 annual meeting of Rainforest shareholders if
the merger is not completed should have been received by Rainforest at its
principal executive offices on or before December 6, 1999.
Pursuant to Rule 14a-4(c)(1), as promulgated under the Securities Exchange
Act of 1934, as amended, if a proponent of a proposal fails to notify
Rainforest of a shareholder proposal at least 45 days prior to the date of
mailing of the prior year's proxy statement (i.e., February 20, 2000), the
management proxies will be allowed to use their discretionary voting authority
when the proposal is raised at the meeting, without any discussion of the
matter in the proxy statement.
LEGAL MATTERS
Maslon Edelman Borman & Brand, LLP, counsel for Rainforest, has passed and
will pass on certain federal income tax consequences of the merger for
Rainforest and the shareholders of Rainforest, and Skadden, Arps, Slate,
Meagher & Flom LLP, special counsel for Landry's, has passed and will pass on
certain federal income tax consequences of the merger for Landry's. In
addition, Winstead Sechrest & Minick P.C., counsel for Landry's, will pass upon
the validity of the shares of Landry's common stock to be issued in connection
with the merger.
EXPERTS
The audited financial statements of Landry's and Rainforest incorporated by
reference in this prospectus and elsewhere in the registration statement have
been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.
WHERE YOU CAN FIND MORE INFORMATION
Landry's and Rainforest are subject to the Exchange Act and file annual,
quarterly and special reports, proxy statements and other information with the
SEC. You may read and copy any reports, statements or other information we file
at the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available
to the public from commercial document retrieval services and at the web site
maintained by the SEC at "http://www.sec.gov." You can also access information
regarding Landry's and Rainforest at their respective web sites,
"http://www.landrysseafood.com" and "http://www.rainforestcafe.com." You may
inspect information that Landry's and Rainforest have filed with the New York
Stock Exchange and NASD, respectively, at the New York Stock Exchange, 20 Broad
Street, New York, New York 10005, and the National Association of Securities
Dealers, 1735 K Street, N.W., Washington, D.C. 20006.
Landry's filed a Registration Statement on Form S-4 to register with the SEC
the Landry's common stock to be issued to shareholders of Rainforest in the
merger. This Proxy Statement/Prospectus is a part of that Registration
Statement and constitutes a prospectus of Landry's in addition to being a proxy
statement of Rainforest for its special meeting. As allowed by SEC rules, this
Proxy Statement/Prospectus does not contain all the information you can find in
the Registration Statement or the exhibits to the Registration Statement.
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<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows Rainforest and Landry's to "incorporate by reference"
information into this Proxy Statement/Prospectus, which means that Rainforest
and Landry's can disclose important information to you by referring you to
another document filed separately with the SEC. The information incorporated by
reference is deemed to be part of this Proxy Statement/Prospectus, except for
any information superseded by information in this Proxy Statement/Prospectus.
This Proxy Statement/Prospectus incorporates by reference the documents set
forth below that Rainforest and Landry's have previously filed with the SEC.
These documents contain important information about Rainforest and Landry's and
their respective finances.
Landry's SEC Filings (File No. 000-22150)
. Annual Report on Form 10-K for the Fiscal Year ended December 31, 1999,
filed on March 6, 2000
. Current Report on Form 8-K, filed on February 18, 2000
. Definitive Proxy Statement on Form 14A, filed on July 19, 1999
. The description of Landry's common stock set forth in Landry's
Registration Statement on Form 8-A12B dated December 10, 1999 filed
pursuant to Section 12 of the Securities Exchange Act on December 10,
1999, including, any amendment or reports filed for the purpose of
updating such description
Rainforest SEC Filings (File No. 000-27366)
. Annual Report on Form 10-K for Fiscal Year ended January 2, 2000, filed
on March 2, 2000
. Current Report on Form 8-K, filed on February 18, 2000
. Current Report on Form 8-K, filed on January 25, 2000
. Current Report on Form 8-K, filed on December 23, 1999
. Definitive Proxy Statement on Form 14A, filed on April 6, 1999
Rainforest and Landry's are also incorporating by reference additional
documents that each of them may file with the SEC between the date of this
Proxy Statement/Prospectus and the date of the special meeting.
Landry's has supplied all information contained in this Proxy
Statement/Prospectus relating to Landry's, and Rainforest has supplied all such
information relating to Rainforest. Documents incorporated by reference are
available from Rainforest or Landry's without charge, excluding all exhibits
unless Rainforest or Landry's has specifically incorporated by reference an
exhibit in this Proxy Statement/Prospectus. Holders of Rainforest common stock
may obtain documents incorporated by reference in this Proxy
Statement/Prospectus by requesting them in writing or by telephone at the
following address:
Rainforest Cafe, Inc. Landry's Seafood Restaurants, Inc.
Attention: Secretary Attention: Secretary
720 South Fifth Street 1400 Post Oak Blvd., Suite 1010
Hopkins, Minnesota 55343 Houston, Texas 77056
Telephone: (612) 945-5400 Telephone: (713) 850-1010
Telecopy: (612) 945-5484 Telecopy: (713) 623-4702
If you would like to request documents from us, please do so by [ ], 2000
to receive them before the special meeting.
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<PAGE>
We file reports, proxy statements and other information with the Securities
and Exchange Commission. Copies of our reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the SEC at:
Judiciary Plaza Citicorp Center Seven World Trade Center
Room 1024 500 West Madison Street 13th Floor
450 Fifth Street, N.W. Suite 1400 New York, New York 10048
Washington, D.C. 20549 Chicago, Illinois 60661
Copies of these materials can also be obtained by mail at prescribed rates
from the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or by calling the SEC at 1-800-SEC-0330. In addition,
the SEC maintains an Internet site that contains reports, proxy and
information statements, and other information regarding issuers that file
electronically with the SEC at http://www.sec.gov.
Landry's has filed a Registration Statement on Form S-4 under the
Securities Act with the Securities and Exchange Commission with respect to the
shares of Landry's common stock to be issued to Rainforest shareholders in the
merger. This Proxy Statement/Prospectus constitutes the prospectus of Landry's
filed as part of such Registration Statement. This Proxy Statement/Prospectus
does not contain all of the information set forth in the Registration
Statement because certain parts of the Registration Statement are omitted in
accordance with the rules and regulations of the SEC. The Registration
Statement and its exhibits are available for inspection and copying as set
forth above.
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROXY STATEMENT/PROSPECTUS TO VOTE ON THE MERGER PROPOSAL. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION THAT IS DIFFERENT FROM WHAT
IS CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS.
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ANNEX A
AGREEMENT AND PLAN OF MERGER
By and Among
LANDRY'S SEAFOOD RESTAURANTS, INC.,
LSR ACQUISITION CORP.
and
RAINFOREST CAFE, INC.
Dated as of February 9, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
TERMS OF THE MERGER
<C> <S> <C>
1.1. The Merger....................................................... A-1
1.2. The Closing; Effective Time...................................... A-1
1.3. Merger Consideration............................................. A-2
1.4. Election Procedure............................................... A-2
Issuance of Purchaser Stock and Payment of Cash Consideration;
1.5. Proration........................................................ A-3
1.6. Issuance of Purchaser Stock...................................... A-5
1.7. Payment of Cash Consideration.................................... A-5
1.8. Options.......................................................... A-6
1.9. Dissenting Shares................................................ A-6
1.10. Articles of Incorporation and Bylaws............................. A-7
1.11. Stock Transfer Books............................................. A-7
1.12. Directors and Officers........................................... A-7
1.13. Other Effects of Merger.......................................... A-7
1.14. Registration Statement Prospectus/Proxy Statement................ A-7
1.15. Tax-Free Reorganization.......................................... A-8
1.16. Additional Actions............................................... A-8
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
2.1. Due Incorporation and Good Standing.............................. A-9
2.2. Capitalization................................................... A-9
2.3. Subsidiaries..................................................... A-9
2.4. Authorization; Binding Agreement................................. A-10
2.5. Governmental Approvals........................................... A-10
2.6. No Violations.................................................... A-10
2.7. Securities Filings............................................... A-11
2.8. Company Financial Statements..................................... A-11
Absence of Certain Changes or Events; No Undisclosed
2.9. Liabilities...................................................... A-11
2.10. Compliance with Laws............................................. A-12
2.11. Permits.......................................................... A-12
2.12. Litigation....................................................... A-12
2.13. Contracts........................................................ A-12
2.14. Employee Benefit Plans........................................... A-12
2.15. Taxes and Returns................................................ A-13
2.16. Intellectual Property............................................ A-14
2.17. Finders and Investment Bankers................................... A-15
2.18. Fairness Opinion................................................. A-15
2.19. Insurance........................................................ A-15
Vote Required; Ownership of Purchaser Capital Stock; State
2.20. Takeover Statutes................................................ A-15
2.21. Title to Properties.............................................. A-15
2.22. Environmental Matters............................................ A-16
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
3.1. Due Incorporation and Good Standing.............................. A-17
3.2. Capitalization................................................... A-17
3.3. Authorization; Binding Agreement................................. A-17
3.4. Governmental Approvals........................................... A-17
3.5. No Violations.................................................... A-18
3.6. Securities Filings............................................... A-18
3.7. Purchaser Financial Statements................................... A-18
Absence of Certain Changes or Events; No Undisclosed
3.8. Liabilities...................................................... A-18
3.9. Compliance with Laws............................................. A-19
3.10. Litigation....................................................... A-19
3.11. Tax Returns...................................................... A-19
3.12. Finders and Investment Bankers................................... A-19
3.13. Fairness Opinion................................................. A-19
3.14. No Prior Activities.............................................. A-19
3.15. Ownership of Company Stock....................................... A-19
3.16. Financing........................................................ A-19
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
ARTICLE IV
ADDITIONAL COVENANTS OF THE COMPANY
<C> <S> <C>
4.1. Conduct of Business of the Company and the Company Subsidiaries.. A-19
4.2. Notification of Certain Matters.................................. A-21
4.3. Access and Information........................................... A-22
4.4. Shareholder Approval............................................. A-22
4.5. Reasonable Best Efforts.......................................... A-22
4.6. Public Announcements............................................. A-22
4.7. Compliance....................................................... A-23
4.8. No Solicitation.................................................. A-23
4.9. Tax Opinion Certificate.......................................... A-24
4.10. SEC and Shareholder Filings...................................... A-24
ARTICLE V
ADDITIONAL COVENANTS OF PURCHASER
5.1. Access and Information........................................... A-25
5.2. Notification of Certain Matters.................................. A-25
5.3. Reasonable Best Efforts.......................................... A-25
5.4. Compliance....................................................... A-25
5.5. SEC and Shareholder Filings...................................... A-25
5.6. Tax Opinion Certificate.......................................... A-25
5.7. Indemnification.................................................. A-26
5.8. Benefit Plans and Employee Matters............................... A-26
ARTICLE VI
CONDITIONS
6.1. Conditions to Each Party's Obligations........................... A-27
6.2. Conditions to Obligations of the Company......................... A-27
6.3. Conditions to Obligations of Purchaser........................... A-28
6.4. Frustration of Conditions........................................ A-29
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1. Termination...................................................... A-29
7.2. Effect of Termination and Abandonment............................ A-30
ARTICLE VIII
MISCELLANEOUS
8.1. Confidentiality.................................................. A-31
8.2. The Rainforest Cafe Friends of the Future Foundation............. A-31
8.3. Additional Approvals............................................. A-31
8.4. Amendment and Modification....................................... A-32
8.5. Waiver of Compliance; Consents................................... A-32
8.6. Survival......................................................... A-32
8.7. Notices.......................................................... A-32
8.8. Binding Effect; Assignment....................................... A-33
8.9. Expenses......................................................... A-33
8.10. Governing Law.................................................... A-33
8.11. Counterparts..................................................... A-33
8.12. Interpretation................................................... A-33
8.13. Entire Agreement................................................. A-33
8.14. Severability..................................................... A-33
8.15. Specific Performance............................................. A-33
8.16. Third Parties.................................................... A-34
8.17. Disclosure Schedules............................................. A-34
8.18. Obligation of Purchaser.......................................... A-34
Exhibits:
Exhibit A--Form of Stockholder Agreements
Exhibit B--Form of Employee Termination, Consulting and Non-
Competition Agreement
</TABLE>
ii
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AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is made and entered
into as of February 9, 2000, by and among Rainforest Cafe, Inc., a Minnesota
corporation (the "Company"), Landry's Seafood Restaurants, Inc., a Delaware
corporation ("Purchaser"), and LSR Acquisition Corp., a Delaware corporation
and wholly owned subsidiary of Purchaser ("Merger Sub") .
WITNESSETH:
WHEREAS, the respective Boards of Directors of Merger Sub, Purchaser and the
Company have approved the merger (the "Merger") of the Company with and into
Merger Sub in accordance with the laws of the State of Minnesota and the State
of Delaware and the provisions of this Agreement;
WHEREAS, as a condition and inducement to Purchaser's and the Merger Sub's
entering into this Agreement and incurring the obligations set forth herein,
concurrently with the execution and delivery of this Agreement, Purchaser is
entering into Stockholder Agreements, in the form of Exhibit A hereto (the
"Stockholder Agreements"), with each of the stockholders named therein,
pursuant to which, among other things, such stockholders have agreed to vote
their Company Shares (as defined in Section 1.3) in favor of the Merger
provided for herein;
WHEREAS, the Board of Directors of the Company (including all of the
disinterested directors of the Company's Board of Directors) has approved the
transactions contemplated by this Agreement and the Stockholder Agreements in
accordance with the provisions of Sections 302A.613 and 302A.673 of the
Minnesota Business Corporation Act ("MBCA");
WHEREAS, for United States federal income tax purposes, it is intended that
the Merger provided for herein shall qualify as a reorganization under Section
368(a) of the Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder (the "Code"), and this Agreement is intended
to be and is adopted as a plan of reorganization within the meaning of Section
368 of the Code; and
WHEREAS, the Company, Merger Sub and Purchaser desire to make certain
representations, warranties and agreements in connection with, and establish
various conditions precedent to, the Merger.
NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements hereinafter set forth, the parties hereto
agree as follows:
ARTICLE I
TERMS OF THE MERGER
1.1. The Merger. Upon the terms and subject to the conditions of this
Agreement, the Merger shall be consummated in accordance with the MBCA and the
Delaware General Corporation Law (the "DGCL"). At the Effective Time (as
defined below), upon the terms and subject to the conditions of this Agreement,
the Company shall be merged with and into Merger Sub in accordance with the
MBCA and the DGCL and the separate existence of the Company shall thereupon
cease, and Merger Sub, as the surviving corporation in the Merger (the
"Surviving Corporation") shall continue its corporate existence under the laws
of the State of Delaware as a subsidiary of Purchaser. The parties shall
prepare and execute Articles of Merger (the "Articles of Merger") and a
Certificate of Merger (the "Certificate of Merger") in order to comply in all
respects with the requirements of the MBCA and the DGCL, respectively, and with
the provisions of this Agreement.
1.2. The Closing; Effective Time. (a) The closing of the Merger (the
"Closing") shall take place at the offices of Skadden, Arps, Slate Meagher &
Flom LLP, Four Times Square, New York, New York 10036, at 10:00 a.m. local time
on a date to be specified by the parties which shall be no later than the third
business day after the date that all of the closing conditions set forth in
Article VI have been satisfied or waived (if waivable) unless another time,
date or place is agreed upon in writing by the parties hereto.
A-1
<PAGE>
(b) The Merger shall become effective at the time of the filing of the
Articles of Merger with the Secretary of State of the State of Minnesota and
the Certificate of Merger with the Secretary of State of the State of Delaware
in accordance with the applicable provisions of the MBCA and the DGCL or at
such later time as may be specified in the Articles of Merger and Certificate
of Merger. The time when the Merger shall become effective is herein referred
to as the "Effective Time" and the date on which the Effective Time occurs is
herein referred to as the "Closing Date."
1.3. Merger Consideration. (a) Subject to the provisions of this Agreement
and any applicable backup or other withholding requirements, each of the issued
shares (the "Company Shares") of common stock, no par value, of the Company
(the "Company Stock") outstanding immediately prior to the Effective Time
(except for Company Shares to be cancelled, as set forth in Section 1.3(d) and
Dissenting Shares, as defined in Section 1.9 hereof) shall be converted, by
virtue of the Merger and without any action on the part of the holder thereof,
into the right to receive such number of shares of the common stock, par value
$.01 per share, of Purchaser (the "Purchaser Stock") or cash, without any
interest thereon, as specified in Section 1.5 hereof, subject to payment of
cash in lieu of any fractional share as hereinafter provided (the "Merger
Consideration").
(b) No fractional shares of Purchaser Stock shall be issued pursuant to the
Merger nor will any fractional share interest involved entitle the holder
thereof to vote, to receive dividends or to exercise any other rights of a
shareholder of Purchaser. In lieu thereof, any holder of Company Stock who
would otherwise be entitled to a fractional share of Purchaser Stock pursuant
to the provisions hereof shall receive an amount in cash pursuant to Section
1.5(h) hereof.
(c) Subject to the provisions of this Agreement, at the Effective Time, each
share of Merger Sub common stock outstanding immediately prior to the Merger
shall be converted, by virtue of the Merger and without any action on the part
of the holder thereof, into one share of common stock of the Surviving
Corporation (the "Surviving Corporation Common Stock"), which shares of
Surviving Corporation Common Stock shall constitute all of the issued and
outstanding capital stock of the Surviving Corporation and shall be wholly
owned by Purchaser.
(d) Any shares of Company Stock owned by Purchaser, Merger Sub or any other
wholly owned subsidiaries of Purchaser immediately prior to the Merger shall be
cancelled and retired at the Effective Time and shall cease to exist and no
Purchaser Stock or other consideration shall be delivered in exchange therefor.
(e) On and after the Effective Time, holders of certificates representing
shares of Company Stock (the "Certificates") immediately prior to the Effective
Time shall cease to have any rights as stockholders of the Company, except the
right to receive the Merger Consideration for each Company Share held by them
or the right, if so demanded, to receive payment from the Company of the "fair
value" of such Company Shares as determined in accordance with the MBCA.
1.4. Election Procedure. Each holder of Company Shares (other than holders
of Company Shares to be cancelled as set forth in Section 1.3(d)) shall have
the right to submit a request specifying the number of Company Shares that such
holder desires to have converted into Purchaser Stock in the Merger and the
number of Company Shares that such holder desires to have converted into the
right to receive $5.23 in cash per Company Share (the "Purchaser Share Price"),
without interest (the "Cash Consideration"), in the Merger in accordance with
the following procedure:
(a) Each holder of Company Shares may specify in a request made in
accordance with the provisions of this Section 1.4 (herein called an
"Election") (i) the number of Company Shares owned by such holder that such
holder desires to have converted into Purchaser Stock in the Merger (a
"Stock Election") and (ii) the number of Company Shares owned by such
holder that such holder desires to have converted into the right to receive
the Cash Consideration in the Merger (a "Cash Election").
(b) Purchaser shall prepare a form (the "Form of Election") pursuant to
which each holder of Company Shares at the close of business on the
Election Deadline (as defined in Section 1.4(d)) may make an election and
which shall be mailed to the Company's stockholders in accordance with
Section 1.4(c) so as to permit the Company's stockholders to exercise their
right to make an Election prior to the Election Deadline.
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(c) Purchaser shall use all reasonable efforts to mail the Form of
Election available to all stockholders of the Company at least ten business
days prior to the Election Deadline.
(d) Any Company stockholder's election shall have been made properly
only if the person authorized to receive Elections and to act as exchange
agent under this Agreement, which exchange agent shall be mutually
acceptable to the Company and Purchaser (the "Exchange Agent") shall have
received, by 5:00 p.m. local time in the city in which the principal office
of such Exchange Agent is located, on the date of the Election Deadline, a
Form of Election properly completed and signed and accompanied by
certificates for the Company Shares to which such Form of Election relates
(or by an appropriate guarantee of delivery of such certificates, as set
forth in such Form of Election, from a member of any registered national
securities exchange or of the National Association of Securities Dealers,
Inc. or a commercial bank or trust company in the United States provided
such certificates are in fact delivered to the Exchange Agent by the time
required in such guarantee of delivery). Failure to deliver Company Shares
covered by such a guarantee of delivery within the time set forth on such
guarantee shall be deemed to invalidate any otherwise properly made
Election. As used herein, "Election Deadline" means the date announced by
Purchaser, as the last day on which Forms of Election will be accepted;
provided, that such date shall be a business day no earlier than twenty
business days prior to the Effective Time and no later than the date on
which the Effective Time occurs.
(e) Any Company stockholder may at any time prior to the Election
Deadline change his Election by written notice received by the Exchange
Agent prior to the Election Deadline accompanied by a revised Form of
Election properly completed and signed.
(f) Any Company stockholder may, at any time prior to the Election
Deadline, revoke his Election by written notice received by the Exchange
Agent prior to the Election Deadline or by withdrawal prior to the Election
Deadline of his certificates for Company Shares, or of the guarantee of
delivery of such certificates, previously deposited with the Exchange
Agent. All Elections shall be revoked automatically if the Exchange Agent
is notified in writing by Purchaser or the Company that this Agreement has
been terminated. Any Company stockholder who shall have deposited
certificates for Company Shares with the Exchange Agent shall have the
right to withdraw such certificates by written notice received by the
Exchange Agent and thereby revoke his Election as of the Election Deadline
if the Merger shall not have been consummated prior thereto.
(g) Purchaser shall have the right to make rules, not inconsistent with
the terms of this Agreement, governing the validity of the Forms of
Election, the manner and extent to which Elections are to be taken into
account in making the determinations prescribed by Section 1.5, the
issuance and delivery of certificates for Purchaser Stock into which
Company Shares are converted in the Merger and the payment of cash for
Company Shares converted into the right to receive the Cash Consideration
in the Merger.
1.5. Issuance of Purchaser Stock and Payment of Cash Consideration;
Proration. The manner in which each Company Share (other than Dissenting Shares
and Company Shares to be cancelled as set forth in Section 1.3(d)) shall be
converted into Purchaser Stock or the right to receive the Cash Consideration
on the Effective Date shall be as set forth in this Section 1.5. All references
to "outstanding" Company Shares in this Section 1.5 shall mean all Company
Shares outstanding immediately prior to the Effective Time minus Company Shares
owned by Purchaser or by any direct or indirect wholly-owned subsidiary of
Purchaser.
(a) As is more fully set forth below, the number of Company Shares to be
converted into Purchaser Stock in the Merger pursuant to this Agreement shall
be equal as nearly as practicable to 65% of all outstanding Company Shares and
the number of Company Shares to be converted into the right to receive the Cash
Consideration in the Merger pursuant to this Agreement shall be equal as nearly
as practicable to 35% of all outstanding Company Shares.
(b) If Stock Elections are received for a number of Company Shares that is
65% or less of the outstanding Company Shares, each Company Share covered by a
Stock Election shall be converted in the Merger into
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0.5816 of a share of Purchaser Stock (the "Conversion Fraction"). The parties
hereto acknowledge that the Conversion Fraction was based on an agreed upon
value of $9.00 per share of Purchaser Stock. In the event that between the date
of this Agreement and the Effective Time, the issued and outstanding shares of
Purchaser Stock shall have been affected or changed into a different number of
shares or a different class of shares as a result of a stock split, reverse
stock split, stock dividend, spin-off, extraordinary dividend,
recapitalization, reclassification or other similar transaction, the Conversion
Fraction shall be appropriately adjusted.
(c) If Stock Elections are received for more than 65% of the outstanding
Company Shares, each Non-Electing Company Share (as defined in Section 1.5(g))
and each Company Share for which a Cash Election has been received shall be
converted into the right to receive the Cash Consideration in the Merger, and
the Company Shares for which Stock Elections have been received shall be
converted into Purchaser Stock and the right to receive the Cash Consideration
in the following manner:
(1) The Exchange Agent will distribute to each holder of Company Shares
as to which a Stock Election has been made a number of shares of Purchaser
Stock equal to the Conversion Fraction for a fraction of such Company
Shares, the numerator of which fraction shall be 65% of the number of then
outstanding Company Shares and the denominator of which shall be the
aggregate number of Company Shares as to which Stock Elections have been
made.
(2) Company Shares covered by a Stock Election and not fully converted
into the right to receive Purchaser Stock as set forth in clause (1) above
shall be converted in the Merger into the right to receive the Cash
Consideration for each such Company Share, in an amount to offset the
reduction of shares of Purchaser Stock affected pursuant to clause (1)
above.
(d) If Cash Elections are received for a number of Company Shares that is
35% or less of the outstanding Company Shares, each Company Share covered by a
Cash Election shall be converted in the Merger into the right to receive the
Cash Consideration.
(e) If Cash Elections are received for a number of Company Shares that is
more than 35% of the outstanding Company Shares, each Non-Electing Company
Share (as defined in Section 1.5(g)) and each Company Share for which a Stock
Election has been received shall be converted in the Merger into a fraction of
a share of Purchaser Stock equal to the Conversion Fraction, and the Company
Shares for which Cash Elections have been received shall be converted into the
right to receive the Cash Consideration and Purchaser Stock in the following
manner:
(1) The Exchange Agent will distribute to each holder of Company Shares
as to which a Cash Election has been made the Cash Consideration for a
fraction of such Company Shares, the numerator of which fraction shall be
35% of the number of then outstanding Company Shares and the denominator of
which shall be the aggregate number of Company Shares covered by Cash
Elections.
(2) Company Shares covered by a Cash Election and not fully converted
into the right to receive the Cash Consideration as set forth in clause (1)
above shall be converted in the Merger into the right to receive a number
of shares of Purchaser Stock equal to the Conversion Fraction for each such
Company Share to offset the reduction in Cash Consideration affected
pursuant to clause (1) above.
(f) If Non-Electing Company Shares are not converted under either Section
1.5(c) or Section 1.5(e), the Exchange Agent shall convert each Non-Electing
Company Share into such combination of Purchaser Stock and Cash Consideration
such that the sum of the number of Company Shares converted into cash pursuant
to this Section 1.5(f) and the number of Company Shares for which Cash
Elections have been received is as close as practicable to 35% of the
outstanding Company Shares. The portion of each Non-Electing Company Share not
so converted into the right to receive the Cash Consideration pursuant to
clause (i) above shall be converted in the Merger into a fraction of a share of
Purchaser Stock equal to the Conversion Fraction.
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(g) For the purposes of this Section 1.5, outstanding Company Shares as to
which an Election is not in effect at the Election Deadline shall be called
"Non-Electing Company Shares." If Purchaser and the Company shall determine
that any Election is not properly made with respect to any Company Shares, such
Election shall be deemed to be not in effect, and the Company Shares covered by
such Election shall, for purposes hereof, be deemed to be Non-Electing Company
Shares.
(h) Notwithstanding anything to the contrary contained herein, no
certificates or scrip representing fractional shares of Purchaser Stock shall
be issued upon the surrender for exchange of Certificates, no dividend or
distribution with respect to Company Shares shall be payable on or with respect
to any fractional share and such fractional share interests shall not entitle
the owner thereof to vote or to any other rights of a stockholder of Purchaser.
In lieu of any such fractional share of Purchaser Stock, Purchaser shall pay to
each former stockholder of the Company who otherwise would be entitled to
receive a fractional share of Purchaser Stock an amount in cash determined by
multiplying (i) the Purchaser Share Price by (ii) the fractional interest in a
share of Purchaser Stock to which such holder would otherwise be entitled.
1.6. Issuance of Purchaser Stock. Immediately prior to the Effective Time,
Purchaser shall deliver, in trust, to the Exchange Agent certificates
representing an aggregate number of shares of Purchaser Stock as nearly as
practicable equal to the number of shares to be converted into Purchaser Stock
as determined in Section 1.5. As soon as practicable after the Effective Time,
each holder of Company Shares converted into Purchaser Stock pursuant to
Section 1.3(a), upon surrender to the Exchange Agent (to the extent not
previously surrendered with a Form of Election) of one or more certificates for
such Company Shares for cancellation, shall be entitled to receive certificates
representing the number of shares of Purchaser Stock into which such Company
Shares shall have been converted in the Merger. No dividends or distributions
that have been declared will be paid to persons entitled to receive
certificates for shares of Purchaser Stock until such persons surrender their
certificates for Company Shares, at which time all such dividends shall be
paid. In no event shall the persons entitled to receive such dividends be
entitled to receive interest on such dividends. If any certificate for such
Purchaser Stock is to be issued in a name other than that in which the
certificate for Company Shares surrendered in exchange therefor is registered,
it shall be a condition of such exchange that the person requesting such
exchange shall pay to the Exchange Agent any transfer or other taxes required
by reason of issuance of certificates for such Purchaser Stock in a name other
than the registered holder of the certificate surrendered, or shall establish
to the satisfaction of the Exchange Agent that such tax has been paid or is not
applicable. Notwithstanding the foregoing, neither the Exchange Agent nor any
party hereto shall be liable to a holder of Company Shares for any Purchaser
Stock or dividends thereon delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
1.7. Payment of Cash Consideration. Immediately following the Effective
Time, Purchaser shall deposit in trust with the Exchange Agent an amount in
cash up to an amount equal to the Purchaser Share Price multiplied by the
number of Company Shares to be converted into the right to receive the Cash
Consideration as determined in Section 1.5. As soon as practicable after the
Effective Time, the Exchange Agent shall distribute to holders of Company
Shares converted into the right to receive the Cash Consideration pursuant to
Section 1.3(a), upon surrender to the Exchange Agent (to the extent not
previously surrendered with a Form of Election) of one or more certificates for
such Company Shares for cancellation, a bank check for an amount equal to the
Purchaser Share Price times the number of Company Shares so converted. In no
event shall the holder of any such surrendered certificates be entitled to
receive interest on any of the Cash Consideration to be received in the Merger.
If such check is to be issued in the name of a person other than the person in
whose name the certificates for the Company Shares surrendered for exchange
therefor are registered, it shall be a condition of the exchange that the
person requesting such exchange shall pay to the Exchange Agent any transfer or
other taxes required by reason of issuance of such check to a person other than
the registered holder of the certificates surrendered, or shall establish to
the satisfaction of the Exchange Agent that such tax has been paid or is not
applicable. Notwithstanding the foregoing, neither the Exchange Agent nor any
party hereto shall be liable to a holder of Company Shares for any amount paid
to a public official pursuant to any applicable abandoned property, escheat or
similar law.
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1.8. Options. (a) Except as provided in paragraph (b) below with respect to
the Company's 1996 Employee Stock Purchase Plan, as amended (the "Company
ESPP"), at the Effective Time, each then outstanding and unexercised option
(the "Company Options") exercisable for shares of Company Stock shall become
fully vested and exercisable (by virtue of their terms) and Purchaser shall
cause each holder of a Company Option to receive, by virtue of the Merger and
without any action on the part of the holder thereof, options exercisable for
shares of Purchaser Stock ("Purchaser Replacement Options") having the same
terms and conditions as the Company Options (including such terms and
conditions as may be incorporated by reference into the agreements evidencing
the Company Options pursuant to the plans or arrangements pursuant to which
such Company Options were granted) except that the exercise price and the
number of shares issuable upon exercise shall be divided and multiplied,
respectively, by the Conversion Fraction, and rounded to the nearest whole cent
or number, respectively. Purchaser shall use all reasonable efforts to ensure
that any Company Options that qualified as incentive stock options under
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code") prior
to the Effective Time continue to so qualify after the Effective Time.
Purchaser shall take all corporate action necessary to reserve for issuance a
sufficient number of shares of Purchaser Stock for delivery upon the exercise
of Purchaser Replacement Options after the Effective Time. Promptly after the
Effective Time, Purchaser shall file or cause to be filed all registration
statements on Form S-8 or other appropriate form as may be necessary in
connection with the purchase and sale of Purchaser Stock contemplated by such
Purchaser Replacement Options subsequent to the Effective Time, and shall
maintain the effectiveness of such registration statements (and maintain the
current status of the prospectus or prospectuses contained therein) for so long
as any of the Purchaser Replacement Options registered thereunder remain
outstanding. As soon as practicable after the Effective Time, Purchaser shall
qualify under applicable state securities laws the issuance of such shares of
Purchaser Stock issuable upon exercise of Purchaser Replacement Options.
Purchaser's Board of Directors shall take all actions necessary on the part of
Purchaser to enable the acquisition of Purchaser Stock, Purchaser Replacement
Options and subsequent transactions in Purchaser Stock after the Effective Time
pursuant to Purchaser Replacement Options by persons subject to the reporting
requirements of Section 16(a) of the Securities Exchange Act (as defined below)
to be exempt from the application of Section 16(b) of the Securities Exchange
Act, to the extent permitted thereunder.
(b) The current offerings in process as of the date of this Agreement under
the Company ESPP shall continue, and Company Shares shall be issued to
participants thereunder on the next currently scheduled purchase dates
thereunder occurring after the date hereof as provided under, and subject to
the terms and conditions of, the Company ESPP. The Company may, consistent with
past practice, commence new offering periods under the Company ESPP on or after
the date hereof and prior to the Effective Time at an exercise price for each
such offering not less than as is required under the Company ESPP. Immediately
prior to the Effective Time, pursuant to the Company ESPP, all offerings under
the Company ESPP shall be terminated, and each participant shall be deemed to
have purchased immediately prior to the Effective Time, to the extent of
payroll deductions accumulated by such participant as of such offering period
end, the number of whole shares of Company Stock at a per share price
determined pursuant to the provisions of the Company ESPP, and each participant
shall receive a cash payment equal to the balance, if any, of such accumulated
payroll deductions remaining after such purchase of such shares. As of the
Effective Time, each participant shall receive, by virtue of the Merger, the
number of whole shares of Purchaser Stock or cash into which the shares of
Company Stock such participant has so purchased under the Company ESPP have
been converted pursuant to the Merger as provided in Section 1.3(a) hereof,
plus the cash value of any fraction of a share of Purchaser Common Stock as
provided in Section 1.5(h) hereof, plus any dividends or distributions as
provided in Section 1.6. The Company ESPP and all purchase rights thereunder
shall terminate effective as of the Effective Time.
1.9. Dissenting Shares. Notwithstanding any provision of this Agreement to
the contrary, each outstanding share of Company Stock, the holder of which has
demanded and perfected such holder's right to dissent from the Merger and to be
paid the fair value of such shares in accordance with Sections 302A.471 and
302A.473 of the MBCA and, as of the Effective Time, has not effectively
withdrawn or lost such dissenters' rights ("Dissenting Shares"), shall not be
converted into or represent a right to receive the Purchaser Stock into which
shares of Company Stock are converted, or to receive cash, pursuant to Section
1.5 hereof, but the
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holder thereof shall be entitled only to such rights as are granted by the
MBCA. Purchaser shall cause the Company to make all payments to holders of
shares of Company Stock with respect to such demands in accordance with the
MBCA. The Company shall give Purchaser (i) prompt written notice of any notice
of intent to demand fair value for any shares of Company Stock, withdrawals of
such notices, and any other instruments served pursuant to the MBCA and
received by the Company, and (ii) the opportunity to conduct jointly all
negotiations and proceedings with respect to demands for fair value for shares
of Company Stock under the MBCA. The Company shall not, except with the prior
written consent of Purchaser or as otherwise required by law, voluntarily make
any payment with respect to any demands for fair value for shares of Company
Stock or offer to settle or settle any such demands.
1.10. Articles of Incorporation and Bylaws. Subject to Section 5.7 hereof,
at and after the Effective Time until the same have been duly amended, (i) the
Articles of Incorporation of the Surviving Corporation shall be identical to
the Articles of Incorporation of Merger Sub in effect at the Effective Time,
except that the name of the Surviving Corporation shall be Rainforest Cafe,
Inc. (or a name comparable thereto), and (ii) and the Bylaws of the Surviving
Corporation shall be identical to the Bylaws of Merger Sub in effect at the
Effective Time.
1.11. Stock Transfer Books. At the Effective Time, the stock transfer books
of the Company shall be closed and no transfer of Company Shares shall
thereafter be made. If, after the Effective Time, Certificates are presented to
the Surviving Corporation, they shall be cancelled and exchanged for cash
and/or certificates representing Purchaser Stock pursuant to this Article I.
1.12. Directors and Officers. At and after the Effective Time, the directors
of Merger Sub immediately prior to the Effective Time shall be the directors of
the Surviving Corporation, and the officers of the Merger Sub immediately prior
to the Effective Time shall be the officers of the Surviving Corporation, in
each case until their successors are elected or appointed and qualified. If, at
the Effective Time, a vacancy shall exist on the Board of Directors or in any
office of the Surviving Corporation, such vacancy may thereafter be filled in
the manner provided by law.
1.13. Other Effects of Merger. The Merger shall have all further effects as
specified in the applicable provisions of the MBCA and the DGCL.
1.14. Registration Statement Prospectus/Proxy Statement.
(a) For the purposes of (i) registering Purchaser Stock for issuance to
holders of the Company Shares in connection with the Merger with the Securities
and Exchange Commission ("SEC") under the Securities Act of 1933, as amended,
and the rules and regulations thereunder (the "Securities Act"), and complying
with applicable state securities laws, and (ii) holding the meeting of the
Company's shareholders to vote upon the approval of this Agreement and the
Merger and the other transactions contemplated hereby (collectively, the
"Company Proposals"), Purchaser and the Company will cooperate in the
preparation of a registration statement on Form S-4 (such registration
statement, together with any and all amendments and supplements thereto, being
herein referred to as the "Registration Statement"), including a
prospectus/proxy statement satisfying all requirements of applicable state
securities laws, the Securities Act and the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder (the "Securities Exchange
Act"). Such prospectus/proxy statement in the form mailed by the Company to its
shareholders, together with any and all amendments or supplements thereto, is
herein referred to as the "Prospectus/Proxy Statement."
(b) The Company will furnish Purchaser with such information concerning the
Company and its subsidiaries as is necessary in order to cause the
Prospectus/Proxy Statement, insofar as it relates to the Company and its
subsidiaries, to comply with applicable Law. None of the information relating
to the Company and its subsidiaries supplied by the Company for inclusion in
the Prospectus/Proxy Statement will be false or misleading with respect to any
material fact or will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Company agrees
promptly to advise Purchaser if, at any time prior to the meeting of the
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shareholders of the Company, referenced herein, any information provided by it
in the Prospectus/Proxy Statement is or becomes incorrect or incomplete in any
material respect and to provide Purchaser with the information needed to
correct such inaccuracy or omission. The Company will furnish Purchaser with
such supplemental information as may be necessary in order to cause the
Prospectus/Proxy Statement, insofar as it relates to the Company and its
subsidiaries, to comply with applicable Law after the mailing thereof to the
shareholders of the Company.
(c) Purchaser will furnish the Company with such information concerning
Purchaser and its subsidiaries as is necessary in order to cause the
Prospectus/Proxy statement, insofar as it relates to Purchaser and its
subsidiaries, to comply with applicable Law. None of the information relating
to Purchaser and its subsidiaries supplied by Purchaser for inclusion in the
Prospectus/Proxy Statement will be false or misleading with respect to any
material fact or will omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. Purchaser agrees
promptly to advise the Company if, at any time prior to the meeting of
shareholders of the Company referenced herein, any information provided by it
in the Prospectus/Proxy Statement is or becomes incorrect or incomplete in any
material respect and to provide the Company with the information needed to
correct such inaccuracy or omission. Purchaser will furnish the Company with
such supplemental information as may be necessary in order to cause the
Prospectus/Proxy Statement, insofar as it relates to Purchaser and its
subsidiaries, to comply with applicable Law after the mailing thereof to the
shareholders of the Company.
(d) The Company and Purchaser agree to cooperate in making any preliminary
filings of the Prospectus/Proxy Statement with the SEC, as promptly as
practicable, pursuant to Rule 14a-6 under the Securities Exchange Act.
(e) Purchaser will file the Registration Statement with the SEC and
appropriate materials with applicable state securities agencies as promptly as
practicable and will use all reasonable efforts to cause the Registration
Statement to become effective under the Securities Act and all such state filed
materials to comply with applicable state securities Laws. Purchaser shall
provide the Company for its review a copy of the Registration Statement at
least such amount of time prior to each filing thereof as is customary in
transactions of the type contemplated hereby and shall not make any filing with
the SEC without the prior written consent of the Company, which consent shall
not be unreasonably withheld or delayed. The Company authorizes Purchaser to
utilize in the Registration Statement and in all such state filed materials,
the information concerning the Company and its subsidiaries provided to
Purchaser in connection with, or contained in, the Prospectus/Proxy Statement.
Purchaser promptly will advise the Company when the Registration Statement has
become effective, and of any supplements or amendments thereto, and Purchaser
will furnish the Company with copies of all documents. Except for the
Prospectus/Proxy Statement or the preliminary prospectus/proxy statement,
neither Purchaser nor the Company shall distribute any written material that
might constitute a "prospectus" relating to the Merger or the Company Proposals
within the meaning of the Securities Act or any applicable state securities Law
without the prior written consent of the other party.
1.15. Tax-Free Reorganization. The parties intend that the Merger qualify as
a reorganization within the meaning of Section 368(a) of the Code. None of the
parties will knowingly take any action that would cause the Merger to fail to
qualify as a reorganization within the meaning of Section 368(a) of the Code.
1.16. Additional Actions. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of Merger Sub or the Company or otherwise carry out this
Agreement, the officers and directors of the Surviving Corporation shall be
authorized to execute and deliver, in the name and on behalf of Merger Sub or
the Company, all such deeds, bills of sale, assignments and assurances and to
take and do, in the name and on behalf of Merger Sub or the Company, all such
other actions and things as may be necessary or desirable to vest, perfect or
confirm any and all right, title and interest in, to and under such rights,
properties or assets in the Surviving Corporation or otherwise to carry out
this Agreement.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the disclosure schedule from the Company to Purchaser
to be delivered upon the execution of this Agreement, which sets forth certain
disclosures concerning the Company and its business (the "Company Disclosure
Schedule"), each section of which only qualifies the correspondingly numbered
representation or warranty, the Company hereby represents and warrants to
Purchaser and Merger Sub as follows:
2.1. Due Incorporation and Good Standing. The Company and each subsidiary of
the Company (the "Company Subsidiaries") is a corporation duly incorporated,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now being conducted.
The Company and each of the Company Subsidiaries is duly qualified or licensed
and in good standing to do business in each jurisdiction in which the character
of the property owned, leased or operated by it or the nature of the business
conducted by it makes such qualification or licensing necessary, except where
the failure to be so duly qualified or licensed and in good standing would not
be reasonably likely to have a material adverse effect on the business, assets,
prospects, condition (financial or otherwise), liabilities or the results of
operations of the Company and its subsidiaries taken as a whole, except in each
case for any such effects resulting from, arising out of, or relating to (i)
general business or economic conditions, (ii) conditions generally affecting
the industry in which the Company competes, or (iii) the taking of any action
contemplated by this Agreement (a "Company Material Adverse Effect"). The
Company has heretofore made available to Purchaser accurate and complete copies
of the Articles of Incorporation and Bylaws, as currently in effect, of the
Company.
2.2. Capitalization. As of the date hereof, the authorized capital stock of
the Company consists of 50 million shares of capital stock. As of February 8,
2000, 23,272,232 shares of Company Stock were issued and outstanding. No other
shares of capital stock of the Company is authorized or issued. As of February
8, 2000, a total of 4,966,716 Company Shares are reserved for future issuance
to employees and directors upon exercise of any Company Options, warrants or
other rights to purchase or acquire any shares of capital stock of the Company
(including restricted stock, stock equivalents and stock units). As of February
8, 2000, there were 1,452,387 Company Options with an exercise price of $5.625
or less. Since February 2, 2000, the Company has not issued or granted
additional Company Options. All issued and outstanding shares of the Company
Stock are, and all shares which may be issued upon exercise of then outstanding
Company Options will be when issued, duly authorized, validly issued, fully
paid and non-assessable. Except as otherwise contemplated by this Agreement, as
of the date hereof there are no outstanding rights, subscriptions, warrants,
puts, calls, unsatisfied preemptive rights, options or other agreements of any
kind relating to any of the outstanding, authorized but unissued or
unauthorized shares of capital stock or any other security of the Company, and
there is no authorized or issued security of any kind convertible into or
exchangeable, for any such capital stock or other security.
2.3. Subsidiaries. Section 2.3 of the Company Disclosure Schedule sets forth
the name and jurisdiction of incorporation or organization of each Company
Subsidiary, each of which is wholly owned by the Company except as otherwise
indicated in said Section 2.3 of the Company Disclosure Schedule. All of the
capital stock and other interests of the Company Subsidiaries so held by the
Company are owned by it or a Company Subsidiary as indicated in said Section
2.3 of the Company Disclosure Schedule, free and clear of any claim, lien,
encumbrance, security interest or agreement with respect thereto. All of the
outstanding shares of capital stock in each of the Company Subsidiaries
directly or indirectly held by the Company are duly authorized, validly issued,
fully paid and non-assessable and were issued free of preemptive rights and in
compliance with applicable Laws. No equity securities or other interests of any
of the Company Subsidiaries are or may become required to be issued or
purchased by reason of any options, warrants, rights to subscribe to, puts,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of any capital stock of any
Company Subsidiary, and there are no contracts,
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commitments, understandings or arrangements by which any Company Subsidiary is
bound to issue additional shares of its capital stock, or options, warrants or
rights to purchase or acquire any additional shares of its capital stock or
securities convertible into or exchangeable for such shares.
2.4. Authorization; Binding Agreement. The Company has all requisite
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby,
including, but not limited to, the Merger, have been duly and validly
authorized by the Company's Board of Directors, and no other corporate
proceedings on the part of the Company or any Company Subsidiary are necessary
to authorize the execution and delivery of this Agreement or to consummate the
transactions contemplated hereby (other than the requisite approval of this
Agreement and the Merger by the shareholders of the Company in accordance with
the MBCA). This Agreement has been duly and validly executed and delivered by
the Company and constitutes the legal, valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms, except
to the extent that enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally and by principles of equity
regarding the availability of remedies ("Enforceability Exceptions"). The
Company's Board of Directors (including all of the disinterested directors of
the Company's Board of Directors) has approved for purposes of Sections
302A.613 and 302A.673 of the MBCA (a) this Agreement and the Stockholder
Agreements and the transactions contemplated hereby and thereby, and (b) the
formation of any "group" for purposes of Section 13(d)(3) of the Securities
Exchange Act that may be deemed to exist as a result of the execution and
delivery of the Stockholder Agreements or otherwise in connection with the
transactions contemplated by this Agreement and the Stockholder Agreements.
2.5. Governmental Approvals. No consent, approval, waiver or authorization
of, notice to or declaration or filing with ("Consent"), any nation or
government, any state or other political subdivision thereof, any entity,
authority or body exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government, including, without
limitation, any governmental or regulatory authority, agency, department,
board, commission, administration or instrumentality, any court, tribunal or
arbitrator or any self regulatory organization ("Governmental Authority") on
the part of the Company or any of the Company Subsidiaries is required in
connection with the execution or delivery by the Company of this Agreement or
the consummation by the Company of the transactions contemplated hereby other
than (i) the filing of the Articles of Merger with the Secretary of State of
the State of Minnesota in accordance with the MBCA and the filing of the
Certificate of Merger with the Secretary of State of the State of Delaware in
accordance with the DGCL, (ii) filings with the SEC, state securities laws
administrators and the National Association of Securities Dealers, Inc.
("NASD"), (iii) filings under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended, and the rules and regulations promulgated thereunder (the
"HSR Act"), (iv) such filings as may be required in any jurisdiction where the
Company is qualified or authorized to do business as a foreign corporation in
order to maintain such qualification or authorization and (v) those Consents
that, if they were not obtained or made, would not be reasonably likely to have
a Company Material Adverse Effect.
2.6. No Violations. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and compliance by the
Company with any of the provisions hereof will not (i) conflict with or result
in any breach of any provision of the Articles of Incorporation or Bylaws or
other governing instruments of the Company or any of the Company Subsidiaries,
(ii) except as set forth on Section 2.6 of the Company Disclosure Schedule,
require any Consent under or result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give rise
to any right of termination, cancellation or acceleration) under any of the
terms, conditions or provisions of any agreement or other instrument to which
the Company or any Company Subsidiaries are parties or by which their
respective assets are bound, (iii) result in the creation or imposition of any
lien or encumbrance of any kind upon any of the assets of the Company or any
Company Subsidiary or (iv) subject to obtaining the Consents from Governmental
Authorities referred to in Section 2.5 hereof, contravene any applicable
provision of any statute,
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law, rule or regulation or any order, decision, injunction, judgment, award or
decree ("Law") to which the Company or any Company Subsidiary or its or any of
their respective assets or properties are subject, except, in the case of
clauses (ii), (iii) and (iv) above, for any deviations from the foregoing which
would not be reasonably likely to have a Company Material Adverse Effect.
2.7. Securities Filings. (a) The Company has made available to Purchaser
true and complete copies of (i) its Annual Reports on Form 10-K for the years
ended January 3, 1999, December 28, 1997 and December 29, 1996 as filed with
the SEC, (ii) its proxy statements relating to all of the meetings of
shareholders (whether annual or special) of the Company since December 29,
1996, as filed with the SEC, and (iii) all other reports, statements and
registration statements and amendments thereto (including, without limitation,
Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, as amended)
filed by the Company with the SEC since December 29, 1996. The reports and
statements set forth in clauses (i) through (iii) above, and those subsequently
provided or required to be provided pursuant to this Section 2.7, are referred
to collectively herein as the "Company Securities Filings." As of their
respective dates, and as of the date of the last amendment thereof, if amended
after filing, none of the Company Securities Filings contained or, as to the
Company Securities Filings subsequent to the date hereof, will contain, any
untrue statement of a material fact or omitted or, as to the Company Securities
Filings subsequent to the date hereof, will omit, to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. Each of
the Company Securities Filings at the time of filing and as of the date of the
last amendment thereof, if amended after filing, complied or, as to the Company
Securities Filings subsequent to the date hereof, will comply in all material
respects with the Securities Exchange Act or the Securities Act, as applicable.
2.8. Company Financial Statements. The audited consolidated financial
statements and unaudited interim financial statements of the Company included
in the Company Securities Filings (the "Company Financial Statements") have
been prepared or will be prepared in accordance with generally accepted
accounting principles applied on a consistent basis (except as may be indicated
therein or in the notes thereto) and present or will present fairly, in all
material respects, the financial position of the Company and its subsidiaries
as at the dates thereof and the results of their operations and cash flows for
the periods then ended, subject, in the case of the unaudited interim financial
statements, to normal year-end audit adjustments, any other adjustments
described therein and the fact that certain information and notes have been
condensed or omitted in accordance with the Securities Exchange Act. All
accounts receivable of the Company, whether reflected in the Company Financial
Statements or otherwise, represent sales actually made in the ordinary course
of business, and are current and collectible net of any reserves shown in the
Company Financial Statements filed prior to the date hereof.
2.9. Absence of Certain Changes or Events; No Undisclosed
Liabilities. Except as set forth in Section 2.9 of the Company Disclosure
Schedule, since January 3, 1999, through the date of this Agreement, there has
not been: (i) any event that has had or would reasonably be expected to have a
Company Material Adverse Effect, (ii) any declaration, payment or setting aside
for payment of any dividend or other distribution or any redemption or other
acquisition of any shares of capital stock or securities of the Company by the
Company or any Company Subsidiary, (iii) any material damage or loss to any
material asset or property, whether or not covered by insurance, or (iv) any
change by the Company in accounting principles or practices. Except as set
forth in Section 2.9 of the Company Disclosure Schedule, since June 30, 1999,
through the date of this Agreement, there has not been any action taken by the
Company or any of the Company Subsidiaries that, if taken during the period
from the date of this Agreement through the Effective Time, would constitute a
breach of Section 4.1. Except for those liabilities that are fully reflected or
reserved against on the balance sheet of the Company included in its January 3,
1999 Form 10-K and for liabilities incurred in the ordinary course of business
consistent with past practice, since January 3, 1999, neither the Company nor
any of the Company Subsidiaries has incurred any liability of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether due
or to become due) that, either individually or in the aggregate, has had or
would be reasonably likely to have a Company Material Adverse Effect.
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2.10. Compliance with Laws. The business of the Company and each of the
Company Subsidiaries has been operated in compliance with all Laws applicable
thereto, except for any instances of non-compliance which would not be
reasonably likely to have a Company Material Adverse Effect.
2.11. Permits. (i) The Company and each of the Company Subsidiaries have all
permits (including signage permits) certificates, licenses, approvals and other
authorizations required in connection with the operation of their respective
businesses (collectively, "Company Permits"), (ii) neither the Company nor any
of the Company Subsidiaries is in violation of any Company Permit and (iii) no
proceedings are pending or, to the knowledge of the Company, threatened, to
revoke or limit any Company Permit, except, in each case, those the absence or
violation of which would not be reasonably likely to have a Company Material
Adverse Effect.
2.12. Litigation. Except as disclosed in the Section 2.12 of the Company
Disclosure Schedule, there is no suit, action or proceeding ("Litigation")
pending or, to the knowledge of the Company, threatened against the Company or
any of the Company Subsidiaries which, individually or in the aggregate, would
be reasonably likely to have a Company Material Adverse Effect, nor is there
any judgment, decree, injunction, rule or order of any Governmental Authority
outstanding against the Company or any of the Company Subsidiaries which,
individually or in the aggregate, would be reasonably likely to have a Company
Material Adverse Effect.
2.13. Contracts.
(a) Neither the Company nor any of the Company Subsidiaries is a party or is
subject to any franchise, management, royalty, license, lease or joint venture
agreement or any material note, bond, mortgage, indenture, contract, lease,
license, agreement or instrument ("Company Material Contract") that is not so
listed in Section 2.13(a) of the Company Disclosure Schedule. All such Company
Material Contracts are valid and binding and are in full force and effect and
enforceable against the Company or such Company Subsidiary in accordance with
their respective terms, subject to the Enforceability Exceptions. Neither the
Company nor any of the Company Subsidiaries is in violation or breach of or
default under any such Company Material Contract where such violation or breach
would be reasonably likely to have a Company Material Adverse Effect.
(b) Except as is listed in Section 2.13(b) of the Company Disclosure
Schedule, neither the Company nor any Company Subsidiary is a party to, or has
any of its assets or properties subject to, any agreement, arrangement or
understanding (written or oral) with any other person (including a Company
Subsidiary or an affiliate of the Company or of any Company Subsidiary), which
(i) provides capital, surplus, balance sheet or any other form of economic or
financial support to such other person, (ii) guarantees the obligations of, or
performance of any acts, by such other person, or (iii) imposes legal liability
on the Company or any Company Subsidiary for any payments (contingent or
otherwise) under any note, guarantee, debt, bond, mortgage, indenture,
contract, lease, license, agreement or instrument.
2.14. Employee Benefit Plans. (a) Section 2.14 of the Company Disclosure
Schedule contains a complete and accurate list of all material Benefit Plans
(as defined below) maintained or contributed to by the Company or any of the
Company Subsidiaries ("Company Benefit Plan"). A "Benefit Plan" shall include
(i) an employee benefit plan as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended, together with all
regulations thereunder ("ERISA"), and (ii) whether or not described in the
preceding clause, any pension, profit sharing, stock bonus, deferred or
supplemental compensation, retirement, thrift, stock purchase or stock option
plan or any other compensation, welfare, fringe benefit or retirement plan,
program, policy or arrangement providing for benefits for or the welfare of any
or all of the current or former employees or agents of the Company or any of
its subsidiaries or their beneficiaries or dependents; provided that Benefit
Plans shall not include any multiemployer plan, as defined in Section 3(37) of
ERISA (a "Multiemployer Plan"). Each of the Company Benefit Plans has been
maintained in compliance in all material respects with its terms and all
applicable Law. Neither the Company nor any of the Company Subsidiaries
contributes to, or has any outstanding liability with respect to, any
Multiemployer Plan.
(b) The Company has identified in Section 2.14(b) of the Company Disclosure
Schedule and has made available to Purchaser true and complete copies of (1)
all severance, employment consulting and other
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agreements with directors, executive officers, key employees or consultants of
the Company; (2) all severance programs and policies of each of the Company and
each Company Subsidiary with or relating to its employees or directors; and (3)
all plans, programs, agreements and other arrangements of each of the Company
and each Company Subsidiary with or relating to its employees which contain
change in control provisions. Except as set forth in Section 2.14(b) of the
Company Disclosure Schedule (which includes the amount of the payments due
under such agreements, programs, policies, plans, or other arrangements
referred to in the preceding sentence), neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby
will (either alone or in conjunction with any other event, such as termination
of employment) (A) result in any material payment (including, without
limitation, severance, unemployment compensation, golden parachute or
otherwise) becoming due to any director or any employee of the Company or any
Company Subsidiary or affiliate from the Company or any Company Subsidiary or
affiliate under any Company Benefit Plan or otherwise, (B) materially increase
any benefits otherwise payable under any Company Benefit Plan or (C) result in
any acceleration of the time of payment or vesting of any material benefits.
(c) Except as set forth in Section 2.14(c) of the Company Disclosure
Schedule, neither the Company nor any Company Subsidiary is a party to any
contract, plan, or arrangement under which it is obligated to make or to
provide, or could become obligated to make or to provide, a payment or benefit
that would be nondeductible by virtue of Section 162(m) or 280G of the Code.
2.15. Taxes and Returns. (a) The Company and each of its subsidiaries has
timely filed, or caused to be timely filed, all Tax Returns (as defined below)
required to be filed by it, and has paid, collected or withheld, or caused to
be paid, collected or withheld, all Taxes (as defined below) required to be
paid, collected or withheld, other than such Taxes for which adequate reserves
in the Company Financial Statements have been established. There are no claims
or assessments pending against the Company or any of the Company Subsidiaries
for any alleged deficiency in any Tax, and the Company has not been notified in
writing of any proposed Tax claims or assessments against the Company or any of
the Company Subsidiaries (other than, in each case, claims or assessments for
which adequate reserves in the Company Financial Statements have been
established or which are being contested in good faith or are immaterial in
amount). Neither the Company nor any of the Company Subsidiaries has any
outstanding waivers or extensions of any applicable statute of limitations to
assess any material amount of Taxes. There are no outstanding requests by the
Company or any of the Company Subsidiaries for any extension of time within
which to file any Tax Return or within which to pay any Taxes shown to be due
on any return. There are no liens for material amounts of Taxes on the assets
of the Company or any of the Company Subsidiaries except for statutory liens
for current Taxes not yet due and payable.
(b) None of the Company or any of the Company Subsidiaries has taken or
agreed to take any action that would prevent the Merger from constituting a
reorganization qualifying under the provisions of Section 368(a) of the Code.
(c) The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby (either alone or in combination with another
event) will not result in any payment (whether of severance pay, unemployment
compensation, golden parachute, bonus or otherwise), acceleration, forgiveness
of indebtedness, vesting, distribution, increase in benefits or obligation to
fund benefits with respect to any employee or director of the Company or any of
the Company Subsidiaries.
(d) None of the Company or any of the Company Subsidiaries has been a member
of any consolidated, combined, unitary or affiliated group of corporations for
any Tax purposes other than a group of which the Company is or was the common
parent corporation.
(e) None of the Company or any of the Company Subsidiaries has made any
change in accounting method or received a ruling from, or signed an agreement
with, any taxing authority that could reasonably be expected to have a Company
Material Adverse Effect following the Closing.
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(f) None of Company or any of the Company Subsidiaries is currently being
audited by any taxing authority and none of the Company or any of its
Subsidiaries has been notified by any tax authority that any such audit is
contemplated or pending.
(g) For purposes of this Agreement, the term "Tax" shall mean any tax,
custom, duty, governmental fee or other like assessment or charge of any kind
whatsoever, imposed by any Governmental Authority (including, but not limited
to, any federal, state, local, foreign or provincial income, gross receipts,
property, sales, use, license, excise, franchise, employment, payroll,
alternative or added minimum, ad valorem, transfer or excise tax) together with
any interest, addition or penalty imposed thereon. The term "Tax Return" shall
mean a report, return or other information (including any attached schedules or
any amendments to such report, return or other information) required to be
supplied to or filed with a Governmental Authority with respect to any Tax,
including an information return, claim for refund, amended return or
declaration or estimated Tax.
2.16. Intellectual Property. (a) The Company or the Company Subsidiaries
own, or are licensed or otherwise possess legally enforceable rights to use
all: (i) trademarks and service marks (registered or unregistered), trade
dress, trade names and other names and slogans embodying business goodwill or
indications of origin, all applications or registrations in any jurisdiction
pertaining to the foregoing and all goodwill associated therewith; (ii)
patentable inventions, technology, computer programs and software (including
password unprotected interpretive code or source code, object code, development
documentation, programming tools, drawings, specifications and data) and all
applications and patents in any jurisdiction pertaining to the foregoing,
including re-issues, continuations, divisions, continuations-in-part, renewals
or extensions; (iii) trade secrets, including confidential and other non-public
information; (iv) copyrights in writings, designs, software programs, mask works
or other works, applications or registrations in any jurisdiction for the
foregoing and all moral rights related thereto; (v) databases and all database
rights; and (vi) Internet Web sites, domain names and applications and
registrations pertaining thereto that, in each case, are used in the respective
businesses of the Company or the Company Subsidiaries as currently conducted (as
described in clauses (i) through (vi) above, collectively, "Company Intellectual
Property"), except for any such failures to own, be licensed or possess that
would not be reasonably likely to have a Company Material Adverse Effect.
(b) Except as set forth on Section 2.16(b) of the Company Disclosure
Schedule, to the Company's knowledge, there are no conflicts with or
infringements of any material Company Intellectual Property by any third party
and the conduct of the businesses as currently conducted does not conflict with
or infringe any proprietary right of a third party, except for any such
conflicts or infringements that would not be reasonably likely to have a
Company Material Adverse Effect.
(c) Section 2.16 (c) of the Company Disclosure Schedule sets forth a
complete list of all material trademarks, registrations and applications
pertaining to the Company Intellectual Property owned by the Company and the
Company Subsidiaries. All such Company Intellectual Property listed is owned by
the Company and/or the Company Subsidiaries, free and clear of liens or
encumbrances of any nature.
(d) Section 2.16(d) of the Company Disclosure Schedule sets forth a complete
list of all licenses, sublicenses and other agreements in which the Company and
the Company Subsidiaries have granted rights to any person to use the Company
Intellectual Property. The Company will not, as a result of the execution and
delivery of this Agreement or the performance of its obligations under this
Agreement, be in breach of any license, sublicense or other agreement relating
to the Company Intellectual Property.
(e) The Company and each of the Company Subsidiaries own or have the right
to use all computer software currently used in and material to the businesses,
except for any failures to own or have the right to use that would not be
reasonably likely to have a Company Material Adverse Effect.
(f) All Company Intellectual Property was developed by: (i) employees of the
Company within the scope of their employment; or (ii) independent contractors
as "works-made-for-hire" as that term is defined under Section 101 of the
United States copyright laws, pursuant to written agreements.
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2.17. Finders and Investment Banker. Other than pursuant to the Piper
Engagement Letter, neither the Company nor any of its officers or directors has
employed any broker or finder or otherwise incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the
transactions contemplated hereby. For purposes of this Agreement, the term
"Piper Engagement Letter" means the letter dated December 16, 1999 from U.S.
Bancorp Piper Jaffray to the Company, as amended by a letter dated February 8,
2000 from U.S. Bancorp Piper Jaffray to the Company. A true and complete copy
of the Piper Engagement Letter has been delivered by the Company to Purchaser
prior to the date hereof.
2.18. Fairness Opinion. The Company has received from U.S. Bancorp Piper
Jaffray, its financial advisor, a written opinion addressed to it for inclusion
in the Prospectus/Proxy Statement to the effect that the consideration to be
received in the Merger by the Company's shareholders is fair to the Company's
shareholders from a financial point of view.
2.19. Insurance. Section 2.19 of the Company Disclosure Schedule sets forth
a true and complete list of all insurance policies carried by, or covering the
Company and the Company Subsidiaries with respect to their businesses, assets
and properties and with respect to which records are maintained at the
Company's principal executive offices, together with, in respect of each such
policy, the amount of coverage and the deductible. The Company and the Company
Subsidiaries maintain insurance policies against all risk of a character,
including without limitation, business interruption insurance, and in such
amounts as are usually insured against by similarly situated companies in the
same or similar businesses. Each insurance policy set forth on Section 2.19 of
the Company Disclosure Schedule is in full force and effect and all premiums
due thereon have been paid in full.
2.20. Vote Required; Ownership of Purchaser Capital Stock; State Takeover
Statutes. (a) The approval of the Company Proposal by a vote of a majority of
the holders of the issued and outstanding Company Shares is the only vote of
the holders of any class or series of the Company's capital stock necessary to
approve the Merger and the transactions contemplated hereunder.
(b) Neither the Company nor any of the Company Subsidiaries beneficially
owns, either directly or indirectly, any shares of Purchaser capital stock.
(c) The Company has taken all actions necessary under the MBCA to approve
the transactions contemplated by this Agreement and the Stockholder Agreements.
Assuming for purposes of this Section 2.20(c) that no person or entity
associated or affiliated with Purchaser is an "interested shareholder" (as such
term is defined in the MBCA) of the Company who has not continuously been an
interested shareholder of the Company during the four-year period preceding the
Merger, Section 302A.673 of the MBCA applicable to a "business combination"
does not, and will not, prohibit the transactions contemplated hereunder, and
the restrictions contained in Section 302A.671 of the MBCA applicable to
"control share acquisitions" will not prohibit the authorization, execution,
delivery and performance of this Agreement or the consummation of the Merger by
the Company. The authorization, execution and delivery of this Agreement and
the Stockholder Agreements do not, and the consummation of the transactions
contemplated hereunder and thereunder do not, and any formation of a "group"
for purposes of Section 13(d)(3) of the Securities Exchange Act in connection
with this Agreement and the Stockholder Agreements will not, result in a
"control share acquisition" as defined in Section 302A.011 of the MBCA. No
other "fair price," "moratorium," or other similar anti-takeover statute or
regulation prohibits (by reason of Company's participation therein) the Merger
or the other transactions contemplated by this Agreement.
2.21. Title to Properties. Section 2.21 of the Company Disclosure Schedule
sets forth a complete list of all material real property owned in fee by
Company or any of the Company Subsidiaries and sets forth all material real
property leased by Company or any of the Company Subsidiaries as lessee as of
the date hereof (such owned and leased material real property, including all
improvements thereon, referred to collectively as the "Company Real Property").
The Company Real Property set forth in Section 2.21 of the Company Disclosure
Schedule comprises all of the material real property necessary and/or currently
used in the
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operations of the business of the Company and the Company Subsidiaries. The
Company and the Company Subsidiaries have good and valid title to, or, as to
Company Real Property designated as leased, a valid leasehold interest in, all
of the Company Real Property. The Company Real Property is free of
encumbrances, except for (a) liens with respect to Taxes either not delinquent
or being diligently contested in appropriate proceedings; (b) mechanics',
materialmen's or similar statutory liens for amounts not yet due or being
diligently contested in appropriate proceedings; and (c) other exceptions with
respect to title to Company Real Property (including easements of public
record) that do not and would not materially interfere with the current and
intended use of such Company Real Property (clauses, (a), (b), and (c) being
referred to herein as "Permitted Encumbrances"), and the consummation of the
transactions contemplated hereby will not create any encumbrance (other than
Permitted Encumbrances) on any of the Company Real Property. Each of the
Company and the Company Subsidiaries enjoys peaceful and undisturbed possession
under all leases of Company Real Property, except for such breaches of the
right to peaceful and undisturbed possession that do not materially interfere
with the ability of the Company and the Company Subsidiaries to conduct their
business on such property.
2.22. Environmental Matters. The Company has not, and no third party has,
generated, treated, stored, released or disposed of, or otherwise placed,
deposited in or located on the Company Real Property, any toxic or hazardous
substances or wastes, pollutants or contaminants (including, without
limitations, asbestos, urea formaldehyde, the group of organic compounds known
as polychlorinated biphenyls, petroleum products including gasoline, fuel oil,
crude oil and various constituents of such products, and any hazardous
substance as defined in the Comprehensive Environmental Response, Compensation
and Liability Act of 1980 ("CERCLA"), 42 U.S.C. (S) 9601-9657, as amended)
(collectively, "Hazardous Substances") except in material compliance with all
applicable Laws, and no Hazardous Substances have been generated, treated,
stored, released or disposed of, or otherwise placed, deposited in or located
on the Company Real Property except in material compliance with all applicable
Laws, nor has any activity been undertaken on the Company Real Property that
would cause or contribute to (a) the Company Real Property becoming a
treatment, storage or disposal facility in material violation of, the Resource
Conservation and Recovery Act of 1976 ("RCRA"), 42 U.S.C. (S) 6901 et seq., or
any similar state law or local ordinance, (b) a release or threatened release
of toxic or hazardous wastes or substances, pollutants or contaminants from the
Company Real Property in material violation of CERCLA or any similar state law
or local ordinance, or (c) the discharge of pollutants or effluents into any
water source or system, the dredging or filling of any waters or the discharge
into the air of any emissions, for which the Company does not have all material
required permits under the Federal Water Act, 33 U.S.C. (S) 1251 et seq., or
the Clean Air Act, 42 U.S.C. (S) 7401 et seq., or any similar state law or
local ordinance, in each case except for any such noncompliance, violations, or
failures as would not be reasonably likely to have a Company Material Adverse
Effect. There are no substances or conditions in or on the Company Real
Property that may support a claim or cause of action under RCRA, CERCLA or any
other federal, state or local environmental statutes, regulations, ordinances
or other environmental regulatory requirements, except for any such claims or
causes of action as would not be reasonably likely to have a Company Material
Adverse Effect. There are no above ground or underground tanks that have been
located under, in or about the Company Real Property which have been
subsequently removed or filled. To the extent storage tanks exist on or under
the Company Real Property, such storage tanks have been duly registered with
all appropriate regulatory and governmental bodies and are otherwise in
compliance with applicable federal, state and local statutes, regulations,
ordinances and other regulatory requirements.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Except as set forth in the disclosure schedule from Purchaser to the Company
to be delivered upon the execution of this Agreement, which sets forth certain
disclosures concerning Purchaser and its business (the "Purchaser Disclosure
Schedule"), each section of which qualifies only the correspondingly numbered
representation or warranty, Purchaser hereby represents and warrants to the
Company as follows:
3.1. Due Incorporation and Good Standing. Each of Purchaser and Merger Sub
is a corporation duly incorporated, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or organization and has all
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted. Purchaser is
duly qualified or licensed and in good standing to do business in each
jurisdiction in which the character of the property owned, leased or operated
by it or the nature of the business conducted by it makes such qualification or
licensing necessary, except where the failure to be so duly qualified or
licensed and in good standing would not be reasonably likely to have a material
adverse effect on the business, assets, prospects, condition (financial or
otherwise), liabilities or the results of operations of Purchaser and its
subsidiaries taken as a whole except in each case for any such effects
resulting from, arising out of, or relating to (i) general business or economic
conditions, (ii) conditions generally affecting the industry in which Purchaser
competes, or (iii) the taking of any action contemplated by this Agreement
("Purchaser Material Adverse Effect"). Purchaser has heretofore made available
to the Company accurate and complete copies of the Articles of Incorporation
and Bylaws, as currently in effect, of Purchaser.
3.2. Capitalization. As of the date hereof, the authorized capital stock of
Purchaser consists of sixty million shares of common stock, par value $.01 per
share, and two million shares of preferred stock, par value $.01 per share. As
of February 4, 2000, 24,824,133 shares of Purchaser Stock were issued and
outstanding and 6,421,157 shares of Purchaser were held in the treasury of
Purchaser. No other capital stock of Purchaser is authorized or issued. All
issued and outstanding shares of the Purchaser Stock are, and all such shares
to be issued to Company stockholders in connection with the Merger will upon
issuance be, duly authorized, validly issued, fully paid and non-assessable.
3.3. Authorization; Binding Agreement. Purchaser and Merger Sub have all
requisite corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby, including, but not limited to, the Merger, have been duly
and validly authorized by the respective Boards of Directors of Purchaser and
Merger Sub, as appropriate, and no other corporate proceedings on the part of
Purchaser or Merger Sub are necessary to authorize the execution and delivery
of this Agreement or to consummate the transactions contemplated hereby (other
than the requisite approval by the sole shareholder of Merger Sub of this
Agreement and the Merger). This Agreement has been duly and validly executed
and delivered by each of Purchaser and Merger Sub and constitutes the legal,
valid and binding agreement of Purchaser and Merger Sub, enforceable against
each of Purchaser and Merger Sub in accordance with its terms, subject to the
Enforceability Exceptions.
3.4. Governmental Approvals. No Consent from or with any Governmental
Authority on the part of Purchaser or Merger Sub is required in connection with
the execution or delivery by Purchaser of this Agreement or the consummation by
Purchaser of the transactions contemplated hereby other than (i) the filing of
the Articles of Merger with the Secretary of State of the State of Minnesota in
accordance with the MBCA and the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware in accordance with the DGCL; (ii)
filings with the SEC, state securities laws administrators and the New York
Stock Exchange (the "NYSE"); (iii) filings under the HSR Act; (iv) such filings
as may be required in any jurisdiction where Purchaser is qualified or
authorized to do business as a foreign corporation in order to maintain such
qualification or authorization; and (v) those Consents that, if they were not
obtained or made, would not be reasonably likely to have a Purchaser Material
Adverse Effect.
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3.5. No Violations. Except as set forth in Section 3.5 of the Purchaser
Disclosure Schedule, the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and compliance by
Purchaser and Merger Sub with any of the provisions hereof will not (i)
conflict with or result in any breach of any provision of the Articles of
Incorporation or Bylaws or other governing instruments of Purchaser or Merger
Sub, (ii) require any Consent under or result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under any
of the terms, conditions or provisions of any agreement or other instrument to
which Purchaser is a party or by which its assets are bound, (iii) result in
the creation or imposition of any lien or encumbrance of any kind upon any of
the assets of Purchaser or Merger Sub or (iv) subject to obtaining the Consents
from Governmental Authorities referred to in Section 3.4 hereof, contravene any
Law to which Purchaser or Merger Sub or its or any of their respective assets
or properties are subject, except, in the case of clauses (ii), (iii) and (iv)
above, for any deviations from the foregoing which would not be reasonably
likely to have a Purchaser Material Adverse Effect.
3.6. Securities Filings. Purchaser has made available to the Company true
and complete copies of (i) its Annual Reports on Form 10-K for the year ended
December 31, 1998, as filed with the SEC, (ii) its proxy statements relating to
all of the meetings of shareholders (whether annual or special) of Purchaser
since December 31, 1998, as filed with the SEC, and (iii) all other reports,
statements and registration statements and amendments thereto (including,
without limitation, Quarterly Reports on Form 10-Q and Current Reports on Form
8-K, as amended) filed by Purchaser with the SEC since December 31, 1998. The
reports and statements set forth in clauses (i) through (iii) above, and those
subsequently provided or required to be provided pursuant to this Section 3.6,
are referred to collectively herein as the "Purchaser Securities Filings." As
of their respective dates, or as of the date of the last amendment thereof, if
amended after filing, none of the Purchaser Securities Filings contained or, as
to Purchaser Securities Filings subsequent to the date hereof, will contain,
any untrue statement of a material fact or omitted or, as to Purchaser
Securities Filings subsequent to the date hereof, will omit, to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Each of the Purchaser Securities Filings at the time of filing or
as of the date of the last amendment thereof, if amended after filing, complied
or, as to Purchaser Securities Filings subsequent to the date hereof, will
comply in all material respects with the Securities Exchange Act or the
Securities Act, as applicable.
3.7. Purchaser Financial Statements. The audited consolidated financial
statements and unaudited interim financial statements of Purchaser included in
the Purchaser Securities Filings (the "Purchaser Financial Statements") have
been prepared or will be in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be indicated therein or
in the notes thereto) and present or will present fairly, in all material
respects, the financial position of Purchaser and its subsidiaries as at the
dates thereof and the results of their operations and cash flows for the
periods then ended, subject, in the case of the unaudited interim financial
statements, to normal year-end audit adjustments, any other adjustments
described therein and the fact that certain information and notes have been
condensed or omitted in accordance with the Securities Exchange Act.
3.8. Absence of Certain Changes or Events; No Undisclosed
Liabilities. Except as set forth in Section 3.8 of the Purchaser Disclosure
Schedule, since December 31, 1998, through the date of this Agreement, there
has not been (i) any event that has had or would reasonably be expected to have
a Purchaser Material Adverse Effect or (ii) any declaration, payment or setting
aside for payment any dividend or other distribution or redemption or other
acquisition of any shares of capital stock of Purchaser by Purchaser. Except
for those liabilities that are fully reflected or reserved against on the
consolidated balance sheet of Purchaser included in its December 31, 1998, Form
10-K and for liabilities incurred in the ordinary course of business consistent
with past practice, since December 31, 1998, neither Purchaser nor any of the
Purchaser Subsidiaries has incurred any liability of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether due or to
become due) that, either individually or in the aggregate, has had or would be
reasonably likely to result in a Purchaser Material Adverse Effect.
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3.9. Compliance with Laws. The business of Purchaser and each of its
subsidiaries has been operated in compliance with all Laws applicable thereto,
except for any instances of non-compliance which would not be reasonably likely
to have a Purchaser Material Adverse Effect.
3.10. Litigation. Except as disclosed in Section 3.10 of the Purchaser
Disclosure Schedule, there is no Litigation pending or, to the knowledge of
Purchaser, threatened against, Purchaser or any of its subsidiaries which,
individually or in the aggregate, would be reasonably likely to have a
Purchaser Material Adverse Effect, nor is there any judgment, decree,
injunction, rule or order of any Governmental Authority outstanding against
Purchaser or any of its subsidiaries which, individually or in the aggregate,
would be reasonably likely to have a Purchaser Material Adverse Effect.
3.11. Tax Returns. Purchaser has timely filed, or caused to be timely filed,
all material Tax Returns required to be filed by it, and has paid, collected or
withheld, or caused to be paid, collected or withheld, all material amounts of
Taxes required to be paid, collected or withheld, other than such Taxes for
which adequate reserves in the Purchaser Financial Statements have been
established or which are being contested in good faith. There are no material
claims or assessments pending against Purchaser for any alleged deficiency in
any Tax. To Purchaser's knowledge, none of Purchaser or any of the Purchaser
Subsidiaries has taken or agreed to take any action that would prevent the
Merger from constituting a reorganization qualifying under the provisions of
Section 368(a) of the Code.
3.12. Finders and Investment Bankers. Other than Banc of America Securities
LLC, neither Purchaser nor any of its officers or directors has employed any
broker or finder or otherwise incurred any liability for any brokerage fees,
commissions or finders' fees in connection with the transactions contemplated
hereby.
3.13. Fairness Opinion. Purchaser's Board of Directors has received from its
financial advisor, Banc of America Securities LLC, a written opinion addressed
to it for inclusion in the Prospectus/Proxy Statement to the effect that the
Merger Consideration is fair to Purchaser from a financial point of view.
3.14. No Prior Activities. Except for obligations or liabilities incurred in
connection with its incorporation or organization or the negotiation and
consummation of this Agreement and the transactions contemplated hereby, Merger
Sub has not incurred any obligations or liabilities, and has not engaged in any
business or activities of any type or kind whatsoever or entered into any
agreements or arrangements with any person or entity.
3.15. Ownership of Company Stock. Purchaser does not beneficially own,
either directly or indirectly, more than 100 shares of Company Stock. None of
the Purchaser Subsidiaries beneficially owns, either directly or indirectly,
any shares of Company Stock.
3.16. Financing. Purchaser will have prior to the satisfaction of the
conditions to the Merger, sufficient funds available to purchase the Company
Shares converted into the right to receive Cash Consideration.
ARTICLE IV
ADDITIONAL COVENANTS OF THE COMPANY
The Company covenants and agrees as follows:
4.1. Conduct of Business of the Company and the Company
Subsidiaries. (a) Unless Purchaser shall otherwise agree in writing and except
as expressly contemplated by this Agreement or as set forth on Section 4.1 of
the Company Disclosure Schedule (the inclusion of any item having been
consented to by Purchaser), during the period from the date of this Agreement
to the Effective Time, (i) the Company shall conduct, and it shall cause each
of the Company Subsidiaries to conduct, its or their businesses in the ordinary
course and consistent with past practice, and the Company shall, and it shall
cause each of the Company Subsidiaries to, use its or their reasonable best
efforts to preserve intact its business organization, to keep available the
services of its officers and employees, to maintain satisfactory relationships
with all persons with whom it does
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business, and to preserve the possession, control and condition of all of its
assets and (ii) without limiting the generality of the foregoing, neither the
Company nor any Company Subsidiary will:
(A) amend or propose to amend its Articles of Incorporation or Bylaws
(or comparable governing instruments);
(B) authorize for issuance, issue, grant, sell, pledge, dispose of or
propose to issue, grant, sell, pledge or dispose of any shares of, or any
options, warrants, commitments, subscriptions or rights of any kind to
acquire or sell any shares of, the capital stock or other securities of the
Company or any of its subsidiaries including, but not limited to, any
securities convertible into or exchangeable for shares of stock of any
class of the Company or any of its subsidiaries, except for (i) the
issuance of Company Shares pursuant to the exercise of stock options
outstanding on the date of this Agreement in accordance with their present
terms, and (ii) subject to the limitations set forth in Section 1.8, the
grant of purchase rights pursuant to the Company ESPP or the issuance of
Company Stock upon the exercise of such purchase rights;
(C) split, combine or reclassify any shares of its capital stock or
declare, pay or set aside any dividend or other distribution (whether in
cash, stock or property or any combination thereof) in respect of its
capital stock, other than dividends or distributions to the Company or any
Company Subsidiary, or directly or indirectly redeem, purchase or otherwise
acquire or offer to acquire any shares of its capital stock or other
securities and other than pursuant to commitments outstanding on the date
of this Agreement in accordance with their present terms as set forth on
Schedule 4.1 of the Company Disclosure Schedule.
(D) (a) create, incur, assume, forgive or make any changes to the terms
or collateral of any debt, receivables or employee or officer loans or
advances, except incurrences that constitute refinancing of existing
obligations on terms that are no less favorable to the Company or its
subsidiaries than the existing terms; (b) assume, guarantee, endorse or
otherwise become liable or responsible (whether directly, indirectly,
contingently or otherwise) for the obligations of any person; (c) make any
capital expenditures or incur any pre-opening expenses, other than
consistent as set forth in Section 4.1 of the Company Disclosure Schedule;
(d) make any loans, advances or capital contributions to, or investments
in, any other person (other than to a Company subsidiary and customary
travel, relocation or business advances to employees); (e) acquire the
stock or assets of, or merge or consolidate with, any other person; (f)
voluntarily incur any material liability or obligation (absolute, accrued,
contingent or otherwise) other than in the ordinary course of business
consistent with past practice; or (g) sell, transfer, mortgage, pledge, or
otherwise dispose of, or encumber, or agree to sell, transfer, mortgage,
pledge or otherwise dispose of or encumber, any assets or properties, real,
personal or mixed material to the Company and the Company Subsidiaries
taken as a whole other than to secure debt permitted under subclause (a) of
this clause (D) or other than in the ordinary course of business consistent
with past practice;
(E) increase in any manner the wages, salaries, bonus, compensation or
other benefits of any of its officers or employees or enter into,
establish, amend or terminate any employment, consulting, retention, change
in control, collective bargaining, bonus or other incentive compensation,
profit sharing, health or other welfare, stock option or other equity,
pension, retirement, vacation, severance, termination, deferred
compensation or other compensation or benefit plan, policy, agreement,
trust, fund or arrangement with, for or in respect of, any shareholder,
officer, director, other employee, agent, consultant or affiliate other
than as required pursuant to the terms of agreements in effect on the date
of this agreement, or enter into or engage in any agreement, arrangement or
transaction with any of its directors, officers, employees or affiliates
except current compensation and benefits in the ordinary course of
business, consistent with past practice;
(F) (i) commence or settle any litigation or other proceedings with any
Governmental Authority or other person, or (ii) make or rescind any
election relating to Taxes, settle any claim, action, suit, litigation,
proceeding, arbitration, investigation, audit or controversy relating to
Taxes, file any amended Tax Return or claim for refund, change any method
of accounting or make any other material change in its accounting
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or Tax policies or procedures, or commit or omit to do any act which act or
omission would cause the Merger to fail to qualify as a reorganization
within the meaning of Section 368(a) of the Code.
(G) adopt or amend any resolution or agreement concerning
indemnification of its directories, officers, employees or agents;
(H) commit or omit to do any act which act or omission would cause a
breach of any covenant contained in this Agreement or would cause any
representation or warranty contained in this Agreement to become untrue, as
if each such representation and warranty were continuously made from and
after the date hereof;
(I) fail to maintain its books, accounts and records in the usual manner
on a basis consistent with that heretofore employed;
(J) materially increase or decrease the average restaurant, corporate or
warehouse facility inventory or house bank accounts in any restaurant;
(K) enter into any new line of business;
(L) enter into any lease, contract or agreement pursuant to which the
Company is obligated to pay or incur obligations of more than $25,000 per
year, other than (i) the purchase of inventory in the ordinary course of
business consistent with past practice or in connection with the
construction of restaurants as listed in Section 4.1 of the Company
Disclosure Schedule and approved, if required, pursuant to clause (N)
below;
(M) make any changes to its current investment strategy, policy or
practices;
(N) make, engage or incur costs for the design or construction of any
new restaurant, the remodeling or renovation of existing restaurants or
restaurants under construction without approval by Purchaser (it being
understood that Purchaser shall have approval of all design and
construction matters);
(O) allow any employee or other person to remove any Company asset,
display, proprietary asset, retail item or other property from the
corporate office, warehouses, restaurants of the Company or any other
Company facilities;
(P) issue any gift certificates, coupons or complimentary rights for
dining or retail other than in such amounts as are in the ordinary course
of business consistent with past practice; or
(Q) authorize any of, or agree to commit to do any of, the foregoing
actions.
(b) The Company shall, and the Company shall cause each of its subsidiaries
to, use its or their reasonable best efforts to comply in all material respects
with all Laws applicable to it or any of its properties, assets or business and
maintain in full force and effect all the Company Permits necessary for, or
otherwise material to, such business.
4.2. Notification of Certain Matters. The Company shall give prompt notice
to Purchaser if any of the following occur after the date of this Agreement:
(i) receipt of any notice or other communication in writing from any third
party alleging that the Consent of such third party is or may be required in
connection with the transactions contemplated by this Agreement, provided that
such Consent would have been required to have been disclosed in this Agreement;
(ii) receipt of any material notice or other communication from any
Governmental Authority (including, but not limited to, the NASD or any
securities exchange) in connection with the transactions contemplated by this
Agreement; (iii) the occurrence of an event which would be reasonably likely to
have a Company Material Adverse Effect; or (iv) the commencement or threat of
any Litigation involving or affecting the Company or any Company Subsidiary, or
any of their respective properties or assets, or, to its knowledge, any
employee, agent, director or officer, in his or her capacity as such, of the
Company or any Company Subsidiary which, if pending on the date hereof, would
have been required to have been disclosed in this Agreement or which relates to
the consummation of the Merger.
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4.3. Access and Information. Between the date of this Agreement and the
Effective Time, the Company will give, and shall direct its accountants and
legal counsel to give, Purchaser and its respective authorized representatives
(including, without limitation, its financial advisors, accountants and legal
counsel), at all reasonable times, access as reasonably requested to all
offices and other facilities and to all contracts, agreements, commitments,
books and records of or pertaining to the Company and its subsidiaries, will
permit the foregoing to make such reasonable inspections as they may require
and will cause its officers promptly to furnish Purchaser with (a) such
financial and operating data and other information with respect to the business
and properties of the Company and the Company Subsidiaries as Purchaser may
from time to time reasonably request, and (b) a copy of each material report,
schedule and other document filed or received by the Company or any Company
Subsidiary pursuant to the requirements of applicable securities laws or the
NASD.
4.4. Shareholder Approval. As soon as practicable, the Company shall call,
give notice of, convene and hold a meeting of its shareholders for the purpose
of approving the Company Proposals and for such other purposes as may be
necessary or desirable in connection with effectuating the transactions
contemplated hereby. Except as otherwise contemplated by this Agreement, the
Company will use reasonable best efforts to obtain any necessary approval by
the Company's shareholders of the Company Proposals. Notwithstanding the
foregoing, unless the Board of Directors of the Company, based on the opinion
of its outside legal counsel, determines that to do so would result in a breach
of the fiduciary duties of the Company's Board of Directors under applicable
law, the Company, acting through its Board of Directors, shall include in the
Prospectus/Proxy Statement the recommendation of the Board of Directors that
shareholders of the Company vote in favor of the Company Proposals.
4.5. Reasonable Best Efforts.
(a) Subject to the terms and conditions herein provided, the Company agrees
to use its reasonable best efforts to take, or cause to be taken, all actions
and to do, or cause to be done, all things necessary, proper or advisable to
consummate and make effective as promptly as practicable the Merger and the
other transactions contemplated by this Agreement, including, but not limited
to, (i) obtaining all Consents from Governmental Authorities and other third
parties required for the consummation of the Merger and the transactions
contemplated hereby (provided that the Company shall not make any payment or
amend the terms of any agreement in connection with obtaining any such Consent
without the prior written approval of Purchaser) and (ii) timely making all
necessary filings under the HSR Act. Upon the terms and subject to the
conditions hereof, the Company agrees to use reasonable best efforts to take,
or cause to be taken, all actions and to do, or cause to be done, all things
necessary to satisfy the other conditions to Closing set forth herein.
(b) The Company agrees to inform Purchaser regularly, and to respond to
requests of Purchaser, as to the status of whether or not each material Consent
required from third parties (other than Governmental Authorities) in connection
with this Agreement and the transactions contemplated hereby have been
obtained. The Company shall promptly deliver to Purchaser in writing a
reasonably detailed notice (the "Consent Notice") as to the status of all such
material Consents on the sixtieth calendar day (such date, the "Consent Notice
Date") following public announcement of the Merger. In the event that the
Company has not obtained any one or more of such material Consents by the
Consent Notice Date, then Purchaser shall have up to and including the date
(the "Decision Date") which is ten business days following the later of the
date of its receipt of such written notice and the Consent Notice Date to (i)
terminate this Agreement in accordance with Section 7.1(f) hereof or (ii) waive
any such one or more material Consents by delivery of a reasonably detailed
written notice to the Company (any such material Consents so waived in writing
by Purchaser, collectively, the "Waived Consents"); provided, however, that in
the event that Purchaser has not by or on the Decision Date either (i)
terminated this Agreement in accordance with Section 7.1(f) hereof or (ii)
waived all such material Consents, then this Agreement shall terminate without
any action by any party hereto in accordance with Section 7.1(g) hereof.
Notwithstanding any such waiver of material Consents, if Purchaser has not so
terminated this Agreement, the Company shall continue to use its reasonable
best efforts to actually obtain the Waived Consents pursuant to Section 4.5(a)
up to the Closing Date.
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4.6. Public Announcements. So long as this Agreement is in effect, the
Company shall not, and shall cause its affiliates not to, (a) issue or cause
the publication of any press release or any other announcement or communication
with respect to the Merger or the other transactions contemplated hereby
without the written consent of Purchaser, or (b) discuss with the press or the
media this Agreement, the Merger or the transactions contemplated hereby (and
will refer any and all questions and inquiries to Purchaser), except in any
case under (a) or (b) where such release or announcement is required by
applicable Law or pursuant to any applicable listing agreement with, or rules
or regulations of, the NASD, in which case the Company, prior to making such
announcement, will consult with Purchaser regarding the same.
4.7. Compliance. In consummating the Merger and the other transactions
contemplated hereby, the Company shall comply in all material respects with the
provisions of the Securities Exchange Act and the Securities Act and shall
comply, and/or cause its subsidiaries to comply or to be in compliance, in all
material respects, with all other applicable Laws.
4.8. No Solicitation. (a) The Company shall, and shall direct and cause its
officers, directors, employees, representatives and agents to, immediately
cease any discussions or negotiations with any parties that may be ongoing with
respect to a Company Takeover Proposal (as defined below) and immediately
request that all confidential information furnished by or on behalf of the
Company be returned. The Company shall not, nor shall it permit any of its
subsidiaries to, nor shall it authorize or permit any of its officers,
directors or employees or any investment banker, financial advisor, attorney,
accountant or other representative retained by it or any of its subsidiaries,
directly or indirectly, to (i) solicit, initiate or encourage (including by way
of furnishing information), or take any other action knowingly designed or
reasonably likely to facilitate, any inquiries or the making of any proposal
which constitutes, or may reasonably be expected to lead to, any Company
Takeover Proposal or (ii) participate in any discussion or negotiations
regarding any Company Takeover Proposal; provided, however, that if, at any
time prior to the Company shareholder meeting with respect to the transactions
contemplated hereby, the Board of Directors of the Company determines in good
faith, based on the advice of its outside legal counsel, that the failure to do
so would result in a breach of its fiduciary duties to the Company's
shareholders under applicable Law, the Company may, in response to a Company
Superior Proposal (as defined below), and subject to compliance with Section
4.8(c), (x) furnish information with respect to the Company to any person
pursuant to a customary confidentiality agreement (as determined by the Company
after consultation with outside legal counsel) and (y) participate in
negotiations regarding such Company Takeover Proposal for purposes of
determining in good faith if such Company Takeover Proposal is a Company
Superior Proposal. "Company Takeover Proposal" means any inquiry, proposal or
offer from any person relating to (1) any direct or indirect acquisition or
purchase of assets representing 20% or more of the consolidated assets of the
Company and the Company Subsidiaries, (2) any issuance, sale, or other
disposition of (including by way of merger, consolidation, business
combination, share exchange, joint venture, or any similar transaction)
securities (or options, rights or warrants to purchase, or securities
convertible into or exchangeable for, such securities) representing 20% or more
of the voting power of the Company, (3) any tender offer, exchange offer or
other transaction in which, if consummated, any person shall acquire beneficial
ownership (as such term is defined in Rule 13d-3 under the Securities Exchange
Act), or the right to acquire beneficial ownership, or any "group" (as such
term is defined under the Securities Exchange Act) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership, of, 20% or
more of the outstanding voting capital stock of the Company, or, (4) any
merger, consolidation, share exchange, business combination, recapitalization,
liquidation, dissolution or similar transaction involving the Company or any
Company Subsidiary, other than the transactions contemplated by this Agreement.
Notwithstanding any provision to the contrary contained in this Section 4.8,
the provision by the Company of copies of its SEC filings by its investor
relations department to third parties in a manner consistent with its
historical practices, shall not be deemed a violation of this Section 4.8. For
purposes of this Agreement, a "Company Superior Proposal" means any bona fide
proposal made by a third party to acquire, directly or indirectly, for
consideration consisting of cash and/or securities, more than a majority of the
combined voting power of the Company Shares then outstanding or all or
substantially all the assets of the Company, on terms which the Board of
Directors of the Company determines in its good faith judgment based on the
advice of the
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Company's financial advisers and outside legal counsel to be more favorable to
the Company's shareholders, from a financial point of view, than the Merger
(taking into account all factors relating to such proposed transaction deemed
relevant by the Board of Directors of the Company, including, without
limitation, the financing thereof and all other conditions thereto).
(b) Except as set forth in this Section 4.8, neither the Company nor the
Board of Directors, or any committee thereof, shall (i) withdraw or modify, or
propose publicly to withdraw or modify, in a manner adverse to Purchaser, the
approval or recommendation by such Board of Directors of the Company of the
Company Proposals, (ii) approve or recommend, or propose publicly to approve or
recommend, any Company Takeover Proposal or (iii) cause the Company to enter
into any letter of intent, agreement in principle, acquisition agreement or
other similar agreement (each, a "Company Acquisition Agreement") related to
any Company Takeover Proposal. Notwithstanding the foregoing, in the event that
prior to the Company shareholder meeting with respect to the transactions
contemplated hereby, the Board of Directors of the Company determines in good
faith, based on the advice of outside legal counsel, that the failure to do so
would result in a breach of its fiduciary duties to the Company's shareholders
under applicable Law, the Board of Directors of the Company may (subject to
this and the following sentences) (x) withdraw or modify its approval or
recommendation of the Company Proposals or (y) approve or recommend a Company
Superior Proposal, but in each case, only at a time that is after the second
business day following Purchaser's receipt of written notice advising Purchaser
that the Company's Board of Directors has received a Company Superior Proposal,
specifying the material terms and conditions of such Company Superior Proposal,
and identifying the person making such Company Superior Proposal.
(c) In addition to the obligations of the Company set forth in paragraphs
(a) and (b) of this Section 4.8, the Company shall promptly advise Purchaser
orally and in writing of any request for information or of any Company Takeover
Proposal, the material terms and conditions of such request or the Company
Takeover Proposal and the identity of the person making such request or Company
Takeover Proposal and shall keep Purchaser fully informed on a prompt basis
with respect to any developments with respect to the foregoing.
(d) Nothing contained in this Agreement shall prohibit the Board of
Directors of the Company from taking and disclosing to its shareholders a
position contemplated by Rule 14e-2(a) promulgated under the Securities
Exchange Act or from making any disclosure to the Company's shareholders if, in
the good faith judgment of the Board of Directors of the Company, based on the
advice of its outside counsel, failure so to disclose would result in a breach
of its fiduciary duties to the Company's shareholders under applicable law;
provided, however, neither the Company nor its Board of Directors, shall,
except as permitted by Section 4.8(b), withdraw or modify, or propose publicly
to withdraw or modify, its position with respect to the Company Proposals or
approve or recommend, or propose publicly to approve or recommend, a Company
Takeover Proposal. Notwithstanding anything to the contrary contained herein,
the Company Proposals shall be submitted to the shareholders of the Company at
the meeting of such shareholders for the purpose of approving the Company
Proposals and the Merger, and, subject to termination of this Agreement in
accordance with the terms of Article VII hereof, nothing in this Agreement to
the contrary shall be deemed to relieve Company of such obligation.
4.9. Tax Opinion Certificate. The Company shall execute and deliver a
certificate, in form reasonably satisfactory to Purchaser, (the "Company Tax
Opinion Certificate") signed by an officer of the Company setting forth factual
representations and covenants that will serve as a basis for the tax opinion
required pursuant to Section 6.2(e) of this Agreement.
4.10. SEC and Shareholder Filings. The Company shall send to Purchaser a
copy of all material public reports and materials as and when it sends the same
to its shareholders, the SEC or any state or foreign securities commission.
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ARTICLE V
ADDITIONAL COVENANTS OF PURCHASER
Purchaser covenants and agrees as follows:
5.1. Access and Information. Between the date of this Agreement and the
Effective Time, Purchaser will give, and shall direct its accountants and legal
counsel to give, the Company and its authorized representatives (including,
without limitation, its financial advisors, accountants and legal counsel), at
all reasonable times, access as reasonably requested to all offices and other
facilities and to all contracts, agreements, commitments, books and records of
or pertaining to Purchaser and its subsidiaries or to any Pending Purchaser
Transactions, if any, and to the parties thereto, will permit the foregoing to
make such reasonable inspections as they may require and will cause its
officers promptly to furnish the Company with (a) such financial and operating
data and other information with respect to the business and properties of
Purchaser and its subsidiaries as the Company may from time to time reasonably
request and (b) a copy of each material report, schedule and other document
filed or received by Purchaser or any of its subsidiaries pursuant to the
requirements of applicable securities laws or the NYSE.
5.2. Notification of Certain Matters. Notification of Certain Matters.
Purchaser shall give prompt notice to the Company if any of the following occur
after the date of this Agreement: (i) receipt of any notice or other
communication in writing from any third party alleging that the Consent of such
third party is or may be required in connection with the transactions
contemplated by this Agreement, provided that such Consent would have been
required to have been disclosed in this Agreement; (ii) receipt of any material
notice or other communication from any Governmental Authority (including, but
not limited to, the NYSE or any securities exchange) in connection with the
transactions contemplated by this Agreement; (iii) the occurrence of an event
which would be reasonably likely to have a Purchaser Material Adverse Effect or
(iv) the commencement or threat of any Litigation involving or affecting
Purchaser or any of its subsidiaries, or any of their respective properties or
assets, or, to its knowledge, any employee, agent, director or officer, in his
or her capacity as such, of Purchaser or any of its subsidiaries which, if
pending on the date hereof, would have been required to have been disclosed in
this Agreement or which relates to the consummation of the Merger.
5.3. Reasonable Best Efforts. Subject to the terms and conditions herein
provided, Purchaser agrees to use its reasonable best efforts to take, or cause
to be taken, all actions and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective as promptly as practicable
the Merger and the other transactions contemplated by this Agreement,
including, but not limited to, (i) obtaining all Consents from Governmental
Authorities and other third parties required for the consummation of the Merger
and the other transactions contemplated hereby and (ii) timely making all
necessary filings under the HSR Act. Upon the terms and subject to the
conditions hereof, Purchaser agrees to use reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary to satisfy the other conditions to Closing set forth herein.
5.4. Compliance. In consummating the Merger and the other transactions
contemplated hereby, Purchaser shall comply in all material respects with the
provisions of the Securities Exchange Act and the Securities Act and shall
comply, and/or cause its subsidiaries to comply or to be in compliance, in all
material respects, with all other applicable Laws.
5.5. SEC and Shareholder Filings. Purchaser shall send to the Company a copy
of all material public reports and materials as and when it sends the same to
its shareholders, the SEC or any state or foreign securities commission.
5.6. Tax Opinion Certificate. Purchaser shall execute and deliver a
certificate, in form reasonably satisfactory to Company, (the "Purchaser Tax
Opinion Certificate") signed by an officer of Purchaser setting forth factual
representations and covenants that will serve as a basis for the tax opinions
required pursuant to Section 6.3(f) of this Agreement.
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5.7. Indemnification. (a) As of the Effective Time, the indemnification and
exculpation provisions contained in the Bylaws and the Articles of
Incorporation of the Surviving Corporation shall be at least as favorable to
individuals who immediately prior to the Closing Date were directors, officers,
agents or employees of the Company or otherwise entitled to indemnification
under the Company's Bylaws or Articles of Incorporation (an "Indemnified
Party") as those contained in the Bylaws and the Articles of Incorporation of
the Company, respectively, and shall not be amended, repealed or otherwise
modified for a period of six years after the Closing Date in any manner that
would adversely affect the rights thereunder of any Indemnified Party. The
Company hereby covenants that it shall, to the fullest extent permitted under
Minnesota law and regardless of whether the Merger becomes effective,
indemnify, defend and hold harmless, and after the Effective Time, Purchaser
and the Surviving Corporation shall jointly and severally, to the fullest
extent permitted under Delaware law, indemnify, defend and hold harmless, each
Indemnified Party against any costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages, liabilities and
amounts paid in settlement in connection with any claim, action, suit,
proceeding or investigation, including, without limitation, liabilities arising
out of this Agreement or under the Securities Exchange Act, occurring through
the Closing Date, and in the event of any such claim, action, suit, proceeding
or investigation (whether arising before or after the Effective Time), (i) the
Company or the Surviving Corporation shall pay the reasonable fees and expenses
of counsel selected by the Indemnified Parties, which counsel shall be
reasonably satisfactory to the Company or the Surviving Corporation, promptly
as statements therefor are received, and (ii) the Company and the Surviving
Corporation will cooperate in the defense of any such matter; provided,
however, that neither the Company nor the Surviving Corporation shall be liable
for any settlement effected without its written consent (which consent shall
not be unreasonably withheld); and provided, further, that neither the Company
nor the Surviving Corporation shall be obliged pursuant to this Section 5.7 to
pay the fees and disbursements of more than one counsel for all Indemnified
Parties in any single action except to the extent that, in the opinion of
counsel for the Indemnified Parties, two or more of such Indemnified Parties
have conflicting interests in the outcome of such action. Purchaser shall cause
the Surviving Corporation to reimburse all expenses, including reasonable
attorney's fees and expenses, incurred by any person to enforce the obligations
of Purchaser and the Surviving Corporation under this Section 5.7. To the
fullest extent permitted by law, Purchaser shall cause the Surviving
Corporation to advance expense in connection with the foregoing
indemnification.
(b) If the Surviving Corporation or any of its successors or assigns (i)
consolidates with or merges into any other person and shall not be the
continuing or surviving corporation or entity of such consolidation or merger
or (ii) transfers all or substantially all of its properties and assets to any
person, then and in each such case, proper provision shall be made so that the
successors and assigns of the Surviving Corporation assume the obligations set
forth in this Section 5.7.
5.8. Benefit Plans and Employee Matters.
(a) Purchaser shall to the extent practicable cause the Surviving
Corporation to provide employee benefits and programs to the Company's and the
Company Subsidiaries' employees that, in the aggregate, are substantially
comparable to those of Purchaser. From and after the Effective Time, Purchaser
shall honor, in accordance with their terms, all employment and severance
agreements in effect immediately prior to the Closing Date that are applicable
to any current or former employees or directors of the Company or any Company
Subsidiaries.
(b) To the extent that service is relevant for purposes of eligibility,
level of participation, or vesting under any employee benefit plan, program or
arrangement established or maintained by Purchaser, the Company or any of their
respective subsidiaries, employees of the Company and its subsidiaries shall be
credited for service accrued or deemed accrued prior to the Effective Time with
the Company or such subsidiary, as the case may be. Under no circumstances
shall employees receive credit for service accrued or deemed accrued prior to
the Effective Time with the Company or such Subsidiary, as the case may be, for
benefit accruals under any employee pension benefit plan (as defined by Section
3(2) of ERISA) or any retiree health plan.
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ARTICLE VI
CONDITIONS
6.1. Conditions to Each Party's Obligations. The respective obligations of
each party to effect the Merger shall be subject to the fulfillment or waiver
at or prior to the Effective Time of the following conditions:
(a) Shareholder Approval. The Company Proposals shall have been approved
at or prior to the Effective Time by the requisite vote of the shareholders
of the Company required under the MBCA.
(b) No Injunction or Action. No order, statute, rule, regulation,
executive order, stay, decree, judgment or injunction shall have been
enacted, entered, promulgated or enforced by any court or other
Governmental Authority since the date of this Agreement which prohibits or
prevents the consummation of the Merger which has not been vacated,
dismissed or withdrawn prior to the Effective Time. The Company and
Purchaser shall use their reasonable best efforts to have any of the
foregoing vacated, dismissed or withdrawn by the Effective Time.
(c) HSR Act. Any waiting period applicable to the Merger under the HSR
Act shall have expired or early termination thereof shall have been
granted.
(d) Registration Statement. The Registration Statement shall have been
declared effective and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no action, suit,
proceeding or investigation for that purpose shall have been initiated or
threatened by any Governmental Authority.
(e) Blue Sky. Purchaser shall have received all state securities law
authorizations necessary to consummate the transactions contemplated
hereby.
(f) Listing of Purchaser Stock. The shares of Purchaser Stock comprising
the Merger Consideration shall have been approved for listing on the NYSE.
6.2. Conditions to Obligations of the Company. The obligation of the Company
to effect the Merger shall be subject to the fulfillment at or prior to the
Effective Time of the following additional conditions, any one or more of which
may be waived by the Company:
(a) Purchaser Representations and Warranties. The representations and
warranties of Purchaser and Merger Sub set forth in this Agreement shall be
true and correct in all material respects (except that where any statement
in a representation or warranty expressly includes a "material adverse
effect", "material" or other materiality qualifier, such representation or
warranty shall be true and correct in all respects) as of date hereof and
as of the Closing Date as if made on and as of the Closing Date, except
those representations and warranties that speak of an earlier date, which
shall be true and correct as of such earlier date (it being understood
that, for purposes of determining the accuracy of such representations and
warranties, any update of or modification to the Purchaser Disclosure
Schedule made or purported to have been made after the date of this
Agreement shall be disregarded).
(b) Performance by Purchaser. Each of Purchaser and Merger Sub shall
have performed and complied with all the covenants and agreements in all
material respects and satisfied in all material respects all the conditions
required by this Agreement to be performed or complied with or satisfied by
Purchaser and/or Merger Sub at or prior to the Effective Time.
(c) No Material Adverse Change. There shall have been no changes,
conditions, events, or developments (including but not limited to with
respect to any matters described in this Agreement or in the Purchaser
Securities Filings or on the Purchaser Disclosure Schedule) that have or
would reasonably be expected to have a Purchaser Material Adverse Effect
since the date of this Agreement; provided, however, that for purposes of
determining whether there shall have been any such Purchaser Material
Adverse Effect, (i) any adverse change resulting from or relating to
general business or economic
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conditions shall be disregarded, (ii) any adverse change resulting from or
relating to conditions generally affecting the industry in which Purchaser
competes shall be disregarded, and (iii) any adverse change resulting from
or relating to the taking of any action contemplated by this Agreement
shall be disregarded.
(d) Certificates and Other Deliveries. Purchaser shall have delivered,
or caused to be delivered, to the Company: (i) a certificate executed on
its behalf by its President or another authorized officer to the effect
that the conditions set forth in Sections 6.2(a), (b) and (c) hereof have
been satisfied; (ii) a certificate of good standing from the Secretary of
State of the State of Delaware stating that Purchaser is a validly existing
corporation in good standing; (iii) a certificate of good standing from the
Secretary of State of Delaware stating that Merger Sub is a validly
existing corporation in good standing; (iv) duly adopted resolutions of the
Board of Directors of Purchaser and the Board of Directors and the
shareholder of Merger Sub approving the execution, delivery and performance
of this Agreement and the instruments contemplated hereby, each certified
by its respective Secretary; (v) the duly executed Purchaser Tax Opinion
Certificate; and (vi) such other documents and instruments as the Company
reasonably may request.
(e) Tax Opinion. The Company shall have received an opinion from its tax
counsel substantially to the effect that, if the Merger is consummated in
accordance with the provisions of this Agreement, under current Law, for
federal income tax purposes, the Merger will qualify as a reorganization
within the meaning of Section 368(a) of the Code. For purposes of rendering
its opinion, the Company's tax counsel may rely on the statements and
representations set forth in the Company Tax Opinion Certificate and the
Purchaser Tax Opinion Certificate, without regard to any qualification as
to knowledge and belief.
6.3. Conditions to Obligations of Purchaser. The obligations of Purchaser to
effect the Merger shall be subject to the fulfillment at or prior to the
Effective Time of the following additional conditions, any one or more of which
may be waived by Purchaser:
(a) Purchaser Representations and Warranties. The representations and
warranties of Purchaser and Merger Sub set forth in this Agreement shall be
true and correct in all material respects (except that where any statement
in a representation or warranty expressly includes a "material adverse
effect", "material" or other materiality qualifier, such representation or
warranty shall be true and correct in all respects) as of date hereof and
as of the Closing Date as if made on and as of the Closing Date, except
those representations and warranties that speak of an earlier date, which
shall be true and correct as of such earlier date (it being understood
that, for purposes of determining the accuracy of such representations and
warranties, any update of or modification to the Purchaser Disclosure
Schedule made or purported to have been made after the date of this
Agreement shall be disregarded).
(b) Performance by the Company. The Company shall have performed and
complied with all the covenants and agreements in all material respects and
satisfied in all material respects all the conditions required by this
Agreement to be performed or complied with or satisfied by the Company at
or prior to the Effective Time.
(c) No Material Adverse Change. There shall have been no changes,
conditions, events, or developments (including but not limited to with
respect to any matters described in this Agreement or in the Purchaser
Securities Filings or on the Purchaser Disclosure Schedule) that have or
would reasonably be expected to have a Purchaser Material Adverse Effect
since the date of this Agreement; provided, however, that for purposes of
determining whether there shall have been any such Purchaser Material
Adverse Effect, (i) any adverse change resulting from or relating to
general business or economic conditions shall be disregarded, (ii) any
adverse change resulting from or relating to conditions generally affecting
the industry in which Purchaser competes shall be disregarded, and (iii)
any adverse change resulting from or relating to the taking of any action
contemplated by this Agreement shall be disregarded.
(d) Certificates and Other Deliveries. The Company shall have delivered,
or caused to be delivered, to Purchaser (i) a certificate executed on its
behalf by its President or another duly authorized officer to the effect
that the conditions set forth in Sections 6.3(a), (b) and (c) hereof have
been satisfied; (ii) a certificate
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of good standing from the Secretary of State of the State of Minnesota
stating that the Company is a validly existing corporation in good
standing; (iii) duly adopted resolutions of its Board of Directors
approving the execution, delivery and performance of this Agreement and the
instruments contemplated hereby, and of the Company's shareholders
approving the Company Proposals, each certified by the Secretary of the
Company; (iv) a true and complete copy of the Articles of Incorporation of
the Company certified by the Secretary of State of the State of Minnesota,
and a true and complete copy of the Bylaws of the Company certified by the
Secretary thereof; (v) the duly executed Company Tax Opinion Certificate;
and (vi) such other documents and instruments as Purchaser reasonably may
request.
(e) Tax Opinion. Purchaser shall have received an opinion from its tax
counsel substantially to the effect that, if the Merger is consummated in
accordance with the provisions of this Agreement, under current Law, for
federal income tax purposes, the Merger will qualify as a reorganization
within the meaning of Section 368(a) of the Code. For purposes of rendering
its opinion, Purchaser's tax counsel may rely on the statements and
representations set forth in the Purchaser Tax Opinion Certificate and the
Company Tax Opinion Certificate, without regard to any qualification as to
knowledge and belief.
(f) Governmental Approval. All Consents of any Governmental Authority
required for the consummation of the Merger and the transactions
contemplated by this Agreement shall have been obtained, except as may be
waived by Purchaser or those Consents the failure or which to obtain will
not have a Company Material Adverse Effect or a Purchaser Material Advise
Effect.
(g) Required Consents. Except with respect to any Waived Consents, any
material required Consents of any person to the Merger or the transactions
contemplated hereby shall have been obtained and be in full force and
effect.
(h) Employee Termination, Consulting and Non-Competition
Agreements. Concurrently with the execution and delivery of this Agreement,
Purchaser, is entering into an Employee Termination, Consulting and Non-
Competition Agreement, in the form of Exhibit B hereto with each of the
directors and officers named therein and each of such Employee Termination,
Consulting and Non-Competition Agreements shall be in full force and
effect.
6.4. Frustration of Conditions. Neither Purchaser nor the Company may rely
on the failure of any condition set forth in this Article VI to be satisfied if
such failure was caused by such party's failure to comply with or perform any
of its covenants or obligations set forth in this Agreement.
ARTICLE VII
TERMINATION AND ABANDONMENT
7.1. Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of the shareholders of the
Company and the shareholders of Purchaser described herein:
(a) by mutual written consent of Purchaser and the Company;
(b) by either Purchaser or the Company if:
(i) the Merger shall not have been consummated on or prior to August
31, 2000, provided, however, that the right to terminate this Agreement
pursuant to this Section 7.1(b) (i) shall not be available to any party
whose failure to perform any of its obligations under this Agreement
results in the failure of the Merger to be consummated by such time;
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(ii) the vote of the Company's shareholders shall have been taken at
a meeting duly convened therefor or at any adjournment or postponement
thereof and shall be insufficient to approve the Company Proposals;
(iii) any Governmental Authority shall have issued an order, decree
or ruling or taken any other action permanently enjoining, restraining
or otherwise prohibiting the consummation of the Merger and such order,
decree or ruling or other action shall have become final and
nonappealable;
(c) by Purchaser if the Company shall have breached in any material
respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform
is incapable of being cured or has not been cured within 20 business days
after the giving of written notice to the Company;
(d) by Purchaser if (i) the Board of Directors of the Company shall have
withdrawn or modified in a manner adverse to Purchaser its approval or
recommendation of any of the Company Proposals, or failed to reconfirm its
recommendation within 15 business days after a written request to do so, or
approved or recommended any Company Superior Proposal or (ii) the Board of
Directors of the Company shall have resolved to take any of the foregoing
actions;
(e) by the Company if Purchaser shall have breached in any material
respect any of its representations, warranties, covenants or other
agreements contained in this Agreement, which breach or failure to perform
is incapable of being cured or has not been cured within 20 business days
after the giving of written notice to Purchaser;
(f) by Purchaser on or before the Decision Date if any one or more
material Consents required from third parties (other than Governmental
Authorities) in connection with this Agreement and the transactions
contemplated hereby have not been obtained; and
(g) without any action on the part of any party hereto on the day
immediately following the Decision Date in the event that, and only in the
event that, (i) Purchaser has not terminated this Agreement by or on the
Decision Date pursuant to Section 7.1(f) or (ii) Purchaser has not waived
any material Consents specified in the Consent Notice and which are
required from third parties (other than Governmental Authorities) in
connection with this Agreement and the transactions contemplated hereby
which have not been obtained by the Company prior to or on the Decision
Date.
The party desiring to terminate this Agreement pursuant to the preceding
paragraphs shall give written notice of such termination to the other party in
accordance with Section 8.7 hereof.
7.2. Effect of Termination and Abandonment. (a) In the event of termination
of this Agreement and the abandonment of the Merger pursuant to this Article
VII, this Agreement (other than Sections 7.2, 8.1, 8.4, 8.5, 8.6, 8.7, 8.8,
8.9, 8.10, 8.11, 8.12, 8.13, 8.14, 8.15, 8.16, 8.17 and 8.18) shall become void
and of no effect with no liability on the part of any party hereto (or of any
of its directors, officers, employees, agents, legal or financial advisors or
other representatives); provided, however, that no such termination shall
relieve any party hereto from any liability for any breach of this Agreement
prior to termination. If this Agreement is terminated as provided herein, each
party shall use its reasonable best efforts to redeliver all documents, work
papers and other material (including any copies thereof) of any other party
relating to the transactions contemplated hereby, whether obtained before or
after the execution hereof, to the party furnishing the same.
(b) In the event that prior to termination of this Agreement a bona fide
Company Takeover Proposal shall have been made known to the Company or has been
made directly to its shareholders generally or any person shall have publicly
announced an intention (whether or not conditional) to make a bona fide Company
Takeover Proposal (a "Competing Company Takeover Proposal"), and thereafter
this Agreement is (x) terminated pursuant to Section 7.1(b)(i), 7.1(b)(ii) or
7.1(g) or (y) terminated by Purchaser pursuant to Section 7.1(c), 7.1(d) or
7.1(f), then the Company shall promptly, but in no event later than, in the
case of termination by Purchaser, two days after, or in the case of termination
by the Company, immediately prior to, termination of this Agreement giving rise
to the Company's payment obligation, pay Purchaser a fee equal to $1,000,000
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(the "Termination Fee"), payable by wire transfer of same day funds. The
Company acknowledges that the agreements contained in this Section 7.2(b) are
an integral part of the transactions contemplated by this Agreement and that,
without these agreements, Purchaser would not enter into this Agreement.
Notwithstanding the foregoing, no fee or expense reimbursement shall be paid
pursuant to this Section 7.2(b) if Purchaser shall be in material breach of its
obligations hereunder.
(c) Purchaser acknowledges that payments made under Section 7.2(b) hereof
shall constitute its exclusive remedy with respect to any termination of this
Agreement that gives rise to such payment obligation.
ARTICLE VIII
MISCELLANEOUS
8.1. Confidentiality. Unless (i) otherwise expressly provided in this
Agreement, (ii) required by applicable Law or any listing agreement with, or
the rules and regulations of, any applicable securities exchange or the NASD,
(iii) necessary to secure any required Consents as to which the other party has
been advised or (iv) consented to in writing by Purchaser and the Company, any
information or documents furnished in connection herewith shall be kept
strictly confidential by the Company, Purchaser and their respective officers,
directors, employees and agents. Prior to any disclosure pursuant to the
preceding sentence, the party intending to make such disclosure shall consult
with the other party regarding the nature and extent of the disclosure. Nothing
contained herein shall preclude disclosures to the extent necessary to comply
with accounting, SEC and other disclosure obligations imposed by applicable
Law. To the extent required by such disclosure obligations, Purchaser or the
Company, after consultation with the other party, may file with the SEC a
Report on Form 8-K pursuant to the Securities Exchange Act with respect to the
Merger, which report may include, among other things, financial statements and
pro forma financial information with respect to the other party. In connection
with any filing with the SEC of a registration statement or amendment thereto
under the Securities Act, the Company or Purchaser, after consultation with the
other party, may include a prospectus containing any information required to be
included therein with respect to the Merger, including, but not limited to,
financial statements and pro forma financial information with respect to the
other party, and thereafter distribute said prospectus. Purchaser and the
Company shall cooperate with the other and provide such information and
documents as may be required in connection with any such filings. In the event
the Merger is not consummated, each party shall return to the other any
documents furnished by the other and all copies thereof any of them may have
made and will hold in absolute confidence any information obtained from the
other party except to the extent (i) such party is required to disclose such
information by Law or such disclosure is necessary or desirable in connection
with the pursuit or defense of a claim, (ii) such information was known by such
party prior to such disclosure or was thereafter developed or obtained by such
party independent of such disclosure or (iii) such information becomes
generally available to the public other than by breach of this Section 8.1.
Prior to any disclosure of information pursuant to the exception in clause (i)
of the preceding sentence, the party intending to disclose the same shall so
notify the party which provided the name in order that such party may seek a
protective order or other appropriate remedy should it choose to do so.
8.2. The Rainforest Cafe Friends of the Future Foundation. At the Effective
Time, the directors of Rainforest Cafe Friends of the Future Foundation (the
"Foundation"), shall resign and shall elect successor directors as designated
by Purchaser. For all purposes of this Agreement, the Foundation shall be
deemed a "Company Subsidiary."
8.3. Additional Approvals. If, contrary to the parties' understanding, the
approval of the shareholders of Purchaser shall be required to effectuate the
transactions contemplated hereby, Purchaser shall, as soon as reasonably
practicable, call, give notice of, convene and hold a meeting of its
shareholders for purpose of seeking to obtain such approval. Notwithstanding
anything to the contrary contained herein, no such approval of the shareholders
of Purchaser as described in the preceding sentence shall be deemed a breach of
any representation, warranty, covenant, agreement or other provision of this
Agreement.
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8.4. Amendment and Modification. This Agreement may be amended, modified or
supplemented only by a written agreement among the Company, Purchaser and
Merger Sub.
8.5. Waiver of Compliance; Consents. Any failure of the Company on the one
hand, or Purchaser on the other hand, to comply with any obligation, covenant,
agreement or condition herein may be waived by Purchaser on the one hand, or
the Company on the other hand, only by a written instrument signed by the party
granting such waiver, but such waiver or failure to insist upon strict
compliance with such obligation, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section
8.5.
8.6. Survival. The respective representations, warranties, covenants and
agreements of the Company and Purchaser contained herein or in any certificates
or other documents delivered prior to or at the Closing shall survive the
execution and delivery of this Agreement, notwithstanding any investigation
made or information obtained by the other party, but shall terminate at the
Effective Time, except for those covenants contained in Sections 1.4, 1.5, 1.6,
1.7, 1.13, 5.7, 8.1 and 8.16 hereof, which shall survive beyond the Effective
Time in accordance with their terms.
8.7. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when delivered in person,
by facsimile, receipt confirmed, or on the next business day when sent by
overnight courier or on the second succeeding business day when sent by
registered or certified mail (postage prepaid, return receipt requested) to the
respective parties at the following addresses (or at such other address for a
party as shall be specified by like notice):
(i) if to the Company, to:
Rainforest Cafe, Inc.
720 South Fifth Street
Hopkins, Minnesota 55343
Attention: Kenneth W. Brimmer
Telecopy: 612-945-5484
with a copy to (but which shall not constitute
notice to the Company):
Maslon, Edelman, Borman & Brand
3300 Norwest Center
Minneapolis, Minnesota 55402
Attention: Neil P. Ayotte, Esq.
Telecopy: 612-672-8397
and
(ii) if to Purchaser or Merger Sub, to:
Landry's Seafood Restaurants, Inc.
1400 Post Oak Blvd., Suite 1010
Houston, Texas 77056
Attention: Steven L. Scheinthal
Telecopy: 713-623-4702
with a copy to (but which shall not constitute notice to Purchaser):
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Attention: Paul T. Schnell, Esq.
Telecopy: 212-735-2001
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8.8. Binding Effect; Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns. Neither this Agreement nor
any of the rights, interests or obligations hereunder shall be assigned by any
of the parties hereto prior to the Effective Time without the prior written
consent of the other parties hereto.
8.9. Expenses. All costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs or expenses.
8.10. Governing Law. This Agreement shall be deemed to be made in, and in
all respects shall be interpreted, construed and governed by and in accordance
with the internal laws of, the State of Delaware. Each of the Company,
Purchaser and Merger Sub hereby irrevocably and unconditionally consents to
submit to the jurisdiction of the federal and state courts located in Delaware
for any litigation arising out of or relating to this Agreement and the
transactions contemplated hereby (and agrees not to commence any litigation
relating thereto except in such courts), waives any objection to the laying of
venue of any such litigation in such courts and agrees not to plead or claim in
any such court that such litigation brought therein has been brought in an
inconvenient forum.
8.11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which together be deemed an original, but all of which
together shall constitute one and the same instrument.
8.12. Interpretation. The article and section headings contained in this
Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not in any way affect the meaning or
interpretation of this Agreement. As used in this Agreement, (i) the term
"Person" shall mean and include an individual, a partnership, a joint venture,
a corporation, a limited liability company, a trust, an association, an
unincorporated organization, a Governmental Authority and any other entity,
(ii) unless otherwise specified herein, the term "affiliate," with respect to
any person, shall mean and include any person controlling, controlled by or
under common control with such person, (iii) the term "subsidiary" of any
specified person shall mean any corporation any of the outstanding voting power
of which, or any partnership, joint venture, limited liability company or other
entity any of the total equity interest of which, is directly or indirectly
owned by such specified person, (iv) the term "knowledge," when used with
respect to the Company, shall mean the knowledge of the directors and executive
officers of the Company when used with respect to Purchaser, shall mean the
knowledge of the directors and executive officers of Purchaser, and (v) the
term "including" shall mean "including, without limitation".
8.13. Entire Agreement. This Agreement and the documents or instruments
referred to herein including, but not limited to, the Exhibit(s) attached
hereto and the Disclosure Schedules referred to herein, which Exhibit(s) and
Disclosure Schedules are incorporated herein by reference, embody the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein. There are no restrictions, promises, representations,
warranties, covenants, or undertakings, other than those expressly set forth or
referred to herein. This Agreement supersedes all prior agreements and the
understandings between the parties with respect to such subject matter.
8.14. Severability. In case any provision in this Agreement shall be held
invalid, illegal or unenforceable in a jurisdiction, such provision shall be
modified or deleted, as to the jurisdiction involved, only to the extent
necessary to render the same valid, legal and enforceable, and the validity,
legality and enforceability of the remaining provisions hereof shall not in any
way be affected or impaired thereby nor shall the validity, legality or
enforceability of such provision be affected thereby in any other jurisdiction.
8.15. Specific Performance. The parties hereto agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
Accordingly, the parties further agree that each party shall be entitled to an
injunction or restraining order to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state having jurisdiction, this being in addition to any other
right or remedy to which such party may be entitled under this Agreement, at
law or in equity.
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8.16. Third Parties. Nothing contained in this Agreement or in any
instrument or document executed by any party in connection with the
transactions contemplated hereby shall create any rights in, or be deemed to
have been executed for the benefit of, any person or entity that is not a party
hereto or thereto or a successor or permitted assign of such a party; provided
however, that the parties hereto specifically acknowledge that the provisions
of Sections 5.7 and 5.9 hereof are intended to be for the benefit of, and shall
be enforceable by, the current or former employees, officers and directors of
the Company and/or the Company Subsidiaries affected thereby and their heirs
and representatives.
8.17. Disclosure Schedules. The Company and Purchaser acknowledge that the
Company Disclosure Schedule and the Purchaser Disclosure Schedule (i) relate to
certain matters concerning the disclosures required and transactions
contemplated by this Agreement, (ii) are qualified in their entirety by
reference to specific provisions of this Agreement and (iii) are not intended
to constitute and shall not be construed as indicating that such matter is
required to be disclosed, nor shall such disclosure be construed as an
admission that such information is material with respect to the Company or
Purchaser, as the case may be, except to the extent required by this Agreement.
8.18. Obligation of Purchaser. Whenever this Agreement requires Merger Sub
to take any action, such requirement shall be deemed to include an undertaking
on the part of Purchaser to cause Merger Sub to take such action.
IN WITNESS WHEREOF, each of the parties hereto have caused this Agreement
and Plan of Merger to be signed and delivered by their respective duly
authorized officers as of the date first above written.
Landry's Seafood Restaurants, Inc.
By: /s/ Tilman J. Fertitta
----------------------------------
Name:Tilman J. Fertitta
Title:Chairman, President and
Chief Executive Officer
Rainforest Cafe, Inc.
/s/ Kenneth W. Brimmer
By:
----------------------------------
Name:Kenneth W. Brimmer
Title:President
Lsr Acquisition Corp.
/s/ Tilman J. Fertitta
By:
----------------------------------
Name:Tilman J. Fertitta
Title:President
A-34
<PAGE>
ANNEX B
U.S. BANCORP PIPER JAFFRAY
222 South Ninth Street
Minneapolis, MN 55402
(612) 342-6000
February 8, 2000
The Board of Directors
Rainforest Cafe, Inc.
720 South Fifth Street
Hopkins, MN 55343
Members of the Board:
We understand that Rainforest Cafe, Inc. ("Rainforest" or the "Company"),
LSR Acquisition Corp. ("Merger Subsidiary") and Landry's Seafood Restaurants,
Inc. ("Landry's") propose to enter into an Agreement and Plan of Merger to be
dated February 8, 2000 (the "Merger Agreement"), pursuant to which Rainforest
will be acquired through the merger of Merger Subsidiary with Rainforest, with
Merger Subsidiary as the surviving corporation (the "Transaction"). Pursuant to
the Merger Agreement, and subject to certain exceptions, at the effective time
of the Transaction, all the outstanding shares of Rainforest will be converted
into 9,027,777 shares of Landry's and $43,750,000 cash (the "Merger
Consideration"). We have not opined on the relative amounts of cash or stock
which any shareholder may have the right to elect, but rather have opined as to
the Merger Consideration payable to shareholders as a group. You have requested
our opinion as to whether, as of the date hereof, the Merger Consideration to
be received by the shareholders of Rainforest pursuant to the Merger Agreement
is fair, from a financial point of view, to the shareholders of Rainforest.
U.S. Bancorp Piper Jaffray Inc. ("Piper Jaffray"), as a customary part of
its investment banking business, is engaged in the valuation of businesses and
their securities in connection with mergers and acquisitions, underwritings and
secondary distributions of securities, private placements, and valuations for
estate, corporate and other purposes. For our services in rendering this
opinion, Rainforest will pay us a fee and indemnify us against certain
liabilities. A minor portion of Piper Jaffray's fee is contingent on
consummation of the Transaction. In the ordinary course of our business, we and
our affiliates may actively trade securities of Rainforest and Landry's for our
own account or the accounts of our customers and, accordingly, may at any time
hold a long or short position in such securities.
In arriving at our opinion, we have undertaken such reviews, analyses and
inquiries as we deemed necessary and appropriate under the circumstances. Among
other things, we have:
1. Reviewed the latest available draft of the Merger Agreement.
2. Reviewed certain publicly available business and financial
information for Rainforest, including the reports on Form 10-K for the
years ended December 29, 1996, December 28, 1997 and January 3, 1999, proxy
statements relating to annual meetings dated March 31, 1998 and April 6,
1999, and the reports on Form 10-Q for the quarters ended April 4, 1999,
July 4, 1999 and October 3, 1999, as well as recent published research
analyst reports and press releases.
3. Reviewed certain publicly available business and financial
information for Landry's, including the report on Form 10-K for the years
ended December 31, 1996, December 31, 1997, and December 31, 1998, the
proxy statements dated April 28, 1997, April 30, 1998, and July 21, 1999,
and the reports on Form 10-Q for the quarters ended March 31, 1999, June
30, 1999 and September 30, 1999, as well as recent published research
analyst reports and press releases.
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4. Reviewed financial forecasts for Rainforest and Landry's prepared by
managements of the respective companies for the fiscal years ending
December 31, 1999 through 2004 ("Financial Forecasts").
5. Conducted discussions with members of senior management of
Rainforest, including the President, the Chief Executive Officer, and the
Chief Financial Officer. Topics discussed included, but were not limited
to, the background and rationale of the proposed Transaction, the financial
condition, operating performance and the balance sheet characteristics of
Rainforest and the prospects for the Company and Landry's on a combined
basis.
6. Conducted discussions with members of senior management of Landry's,
including the Chief Executive Officer and Chief Financial Officer. Topics
discussed included, but were not limited to, the background and rationale
of the proposed Transaction, the financial condition, operating performance
and the balance sheet characteristics of Landry's and the prospects for the
Company and Landry's on a combined basis.
7. Reviewed the historical prices and trading activity for Rainforest
and Landry's common stock.
8. Reviewed the financial terms, to the extent publicly available, of
certain comparable merger and acquisition transactions which were deemed
relevant.
9. Performed discounted cash flow analyses on the Financial Forecasts
for Rainforest.
10. Analyzed the premiums paid in recent public company acquisitions.
11. Performed certain financial analyses for Rainforest and Landry's on
a pro forma combined basis.
12. Compared certain financial data of Rainforest and Landry's with
certain financial and securities data of companies deemed similar to
Rainforest and Landry's or representative of the business sector in which
both companies operate.
13. Reviewed such other financial data, performed such other analyses
and considered such other information as we deemed necessary and
appropriate under the circumstances.
We have relied upon and assumed the accuracy and completeness of the
financial statements and other information provided by Rainforest and Landry's
or otherwise made available to us and have not assumed responsibility
independently to verify such information. We have further relied upon the
assurances of Rainforest's and Landry's managements that the information
provided has been prepared on a reasonable basis in accordance with industry
practice and, with respect to projected financial planning data, reflects the
best currently available estimates and judgment of Rainforest's and Landry's
managements as to the expected future financial performance of Rainforest and
Landry's, and that they are not aware of any information or facts that would
make the information provided to us incomplete or misleading. Without limiting
the generality of the foregoing, for the purpose of this opinion, we have
assumed that neither Rainforest nor Landrys is a party to any material pending
transaction, including external financing, recapitalizations, acquisitions or
merger discussions, other than the Transaction or in the ordinary course of
business.
In arriving at our opinion, we have not performed any appraisals or
valuations of specific assets or liabilities of Rainforest or Landry's and
have not been furnished with any such appraisals or valuations, have made no
physical inspection of the properties or assets of Rainforest or Landry's and
express no opinion regarding the liquidation value of Rainforest or Landry's.
Without limiting the generality of the foregoing, we have undertaken no
independent analysis of any owned real estate, or any pending or threatened
litigation, possible unasserted claims or other contingent liabilities, to
which either Rainforest or Landry's or their respective affiliates are a party
or may be subject and our opinion makes no assumption concerning and therefore
does not consider the possible assertion of claims, outcomes or damages
arising out of any such matters.
B-2
<PAGE>
Our opinion is necessarily based upon information available to us, facts
and circumstances and economic, market and other conditions as they exist and
are subject to evaluation on the date hereof; events occurring after the date
hereof could materially affect the assumptions used in preparing this opinion.
We are not expressing any opinion herein as to the prices at which shares of
Rainforest or Landry's common stock have traded or at which such shares may
trade at any future time. Our opinion addresses only the Merger Consideration
to be received by the shareholders of Rainforest. We have not undertaken to
reaffirm or revise this opinion or otherwise comment upon any events occurring
after the date hereof and do not have any obligation to update, revise or
reaffirm this opinion, except as expressly provided in our engagement letter
with you.
We have not been authorized by the Board of Directors of Rainforest to
solicit other purchasers for the Company or alternative transactions to the
Transaction. We were not requested to opine as to, and this opinion does not
in any manner address, Rainforest's underlying decision to proceed with or
effect the Transaction or structure thereof.
This opinion is directed to the Board of Directors of Rainforest in
evaluating the Transaction and is not intended to be and does not constitute a
recommendation to any shareholder of the Company as to how to vote in the
Transaction. This opinion shall not be published or otherwise used by any
other persons for any other purposes nor shall any public references to Piper
Jaffray be made without our prior written consent. However, notwithstanding
the foregoing, we consent to inclusion of this opinion in the Proxy
Statement/Prospectus (as defined in the Merger Agreement) to be issued in
connection with the Transaction in accordance with the terms of our engagement
by the Company.
Based upon and subject to the foregoing and based upon such other factors
as we consider relevant, it is our opinion that, as of the date hereof, the
Merger Consideration is fair, from a financial point of view, to the
shareholders of the Rainforest.
Sincerely,
/s/ U.S. BANCORP PIPER JAFFRAY INC.
B-3
<PAGE>
ANNEX C
SECTIONS 302A.471 AND 302A.473 OF THE
MINNESOTA BUSINESS CORPORATION ACT
Set forth below are Sections 302A.471 and 302A.473 of the Minnesota Business
Corporation Act which provide that shareholders may dissent from, and obtain
payment for the fair value of their shares in the event of, certain corporate
actions, and establish procedures for the exercise of such dissenters' rights.
302A.471 Rights of dissenting shareholders.
Subdivision 1. Actions creating rights. A share holder of a corporation may
dissent from, and obtain payment for the fair value of the shareholder's shares
in the event of, any of the following corporate actions:
(a) An amendment of the articles that materially and adversely affects
the rights or preferences of the shares of the dissenting shareholder in
that it:
(1) alters or abolishes a preferential right of the shares;
(2) creates, alters, or abolishes a right in respect of the
redemption of the shares, including a provision respecting a sinking
fund for the redemption or repurchase of the shares;
(3) alters or abolishes a preemptive right of the holder of the
shares to acquire shares, securities other than shares, or rights to
purchase shares or securities other than shares;
(4) excludes or limits the right of a shareholder to vote on a
matter, or to cumulate votes, except as the right may be excluded or
limited through the authorization or issuance of securities of an
existing or new class or series with similar or different voting rights;
except that an amendment to the articles of an issuing public
corporation that provides that section 302A.671 does not apply to a
control share acquisition does not give rise to the right to obtain
payment under this section;
(b) A sale, lease, transfer, or other disposition of all or
substantially all of the property and assets of the corporation, but not
including a transaction permit ted without shareholder approval in section
302A.661, subdivision 1, or a disposition in dissolution described in
section 302A.725, subdivision 2, or a disposition pursuant to an order of a
court, or a disposition for cash on terms requiring that all or
substantially all of the net proceeds of disposition be distributed to the
shareholders in accordance with their respective interests within one year
after the date of disposition;
(c) A plan of merger, whether under this chapter or under chapter 322B,
to which the corporation is a constituent organization, except as provided
in subdivision 3;
(d) A plan of exchange, whether under this chapter or under chapter
322B, to which the corporation is a party as the corporation whose shares
will be acquired by the acquiring corporation, if the shares of the share
holder are entitled to be voted on the plan; or
(e) Any other corporate action taken pursuant to a shareholder vote with
respect to which the articles, the bylaws, or a resolution approved by the
board directs that dissenting shareholders may obtain payment for their
shares.
Subd. 2. Beneficial owners. (a) A shareholder shall not assert dissenters'
rights as to less than all of the shares registered in the name of the
shareholder, unless the shareholder dissents with respect to all the shares
that are beneficially owned by another person but registered in the name of the
shareholder and discloses the name and address of each beneficial owner on
whose behalf the shareholder dissents. In that event, the rights of the
dissenter shall be determined as if the shares as to which the shareholder has
dissented and the other shares were registered in the names of different
shareholders.
(b) A beneficial owner of shares who is not the shareholder may assert
dissenters' rights with respect to shares held on behalf of the beneficial
owner, and shall be treated as a dissenting shareholder under the
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terms of this section and section 302A.473 , if the beneficial owner
submits to the corporation at the time of or before the assertion of the
rights a written consent of the shareholder.
Subd. 3. Rights not to apply. (a) Unless the articles, the bylaws, or a
resolution approved by the board otherwise provide, the right to obtain payment
under this section does not apply to a shareholder of the surviving corporation
in a merger, if the shares of the shareholder are not entitled to be voted on
the merger.
(b) If a date is fixed according to section 302A.445 , subdivision 1, for the
determination of shareholders entitled to receive notice of and to vote on
an action described in subdivision 1, only shareholders as of the date
fixed, and beneficial owners as of the date fixed who hold through
shareholders, as provided in subdivision 2, may exercise dissenters' rights.
Subd. 4. Other rights. The shareholders of a corporation who have a right
under this section to obtain payment for their shares do not have a right at
law or in equity to have a corporate action described in subdivision 1 set
aside or rescinded, except when the corporate action is fraudulent with regard
to the complaining shareholder or the corporation.
***
302A.473 Procedures for asserting dissenters' rights.
Subdivision 1. Definitions. (a) For purposes of this section, the terms
defined in this subdivision have the meanings given them.
(b) "Corporation" means the issuer of the shares held by a dissenter before
the corporate action referred to in section 302A.471, subdivision 1 or the
successor by merger of that issuer.
(c) "Fair value of the shares" means the value of the shares of a
corporation immediately before the effective date of the corporate action
referred to in section 302A.471, subdivision 1.
(d) "Interest" means interest commencing five days after the effective date
of the corporate action referred to in section 302A.471, subdivision 1, up to
and including the date of payment, calculated at the rate provided in section
549.09 for interest on verdicts and judgments.
Subd. 2. Notice of action. If a corporation calls a shareholder meeting at
which any action described in section 302A.471, subdivision 1 is to be voted
upon, the notice of the meeting shall inform each shareholder of the right to
dissent and shall include a copy of section 302A.471 and this section and a
brief description of the procedure to be followed under these sections.
Subd. 3. Notice of dissent. If the proposed action must be approved by the
shareholders, a shareholder who is entitled to dissent under section 302A.471
and who wishes to exercise dissenters' rights must file with the corporation
before the vote on the proposed action a written notice of intent to demand the
fair value of the shares owned by the shareholder and must not vote the shares
in favor of the proposed action.
Subd. 4. Notice of procedure; deposit of shares. (a) After the proposed
action has been approved by the board and, if necessary, the shareholders, the
corporation shall send to all shareholders who have complied with subdivision 3
and to all shareholders entitled to dissent if no shareholder vote was
required, a notice that contains:
(1) The address to which a demand for payment and certificates of
certificated shares must be sent in order to obtain payment and the date by
which they must be received;
(2) Any restrictions on transfer of uncertificated shares that will
apply after the demand for payment is received;
(3) A form to be used to certify the date on which the shareholder, or
the beneficial owner on whose behalf the shareholder dissents, acquired the
shares or an interest in them and to demand payment; and
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(4) A copy of section 302A.471 and this section and a brief description
of the procedures to be followed under these sections.
(b) In order to receive the fair value of the shares, a dissenting
shareholder must demand payment and deposit certificated shares or comply with
any restrictions on transfer of uncertificated shares within 30 days after the
notice required by paragraph (a) was given, but the dissenter retains all other
rights of a shareholder until the proposed action takes effect.
Subd. 5. Payment; return of shares. (a) After the corporate action takes
effect, or after the corporation receives a valid demand for payment, whichever
is later, the corporation shall remit to each dissenting share holder who has
complied with subdivisions 3 and 4 the amount the corporation estimates to be
the fair value of the shares, plus interest, accompanied by:
(1) the corporation's closing balance sheet and statement of income for
a fiscal year ending not more than 16 months before the effective date of
the corporate action, together with the latest available interim financial
statements;
(2) an estimate by the corporation of the fair value of the shares and a
brief description of the method used to reach the estimate; and
(3) a copy of section 302A.471 and this section, and a brief description
of the procedure to be followed in demanding supplemental payment.
(b) The corporation may withhold the remittance described in paragraph (a)
from a person who was not a shareholder on the date the action dissented from
was first announced to the public or who is dissenting on behalf of a person
who was not a beneficial owner on that date. If the dissenter has complied with
subdivisions 3 and 4, the corporation shall forward to the dissenter the
materials described in paragraph (a), a statement of the reason for withholding
the remittance, and an offer to pay to the dissenter the amount listed in the
materials if the dissenter agrees to accept that amount in full satisfaction.
The dissenter may decline the offer and demand payment under subdivision 6.
Failure to do so entitles the dissenter only to the amount offered. If the
dissenter makes demand, subdivisions 7 and 8 apply.
(c) If the corporation fails to remit payment within 60 days of the deposit
of certificates or the imposition of transfer restrictions on uncertificated
shares, it shall return all deposited certificates and cancel all transfer
restrictions. However, the corporation may again give notice under subdivision
4 and require deposit or restrict transfer at a later time.
Subd. 6. Supplemental payment; demand. If a dissenter believes that the
amount remitted under subdivision 5 is less than the fair value of the shares
plus interest, the dissenter may give written notice to the corporation of the
dissenter's own estimate of the fair value of the shares, plus interest, within
30 days after the corporation mails the remittance under subdivision 5, and
demand payment of the difference. Otherwise, a dissenter is entitled only to
the amount remitted by the corporation.
Subd. 7. Petition; determination. If the corporation receives a demand under
subdivision 6, it shall, within 60 days after receiving the demand, either pay
to the dissenter the amount demanded or agreed to by the dissenter after
discussion with the corporation or file in court a petition requesting that the
court determine the fair value of the shares, plus interest. The petition shall
be filed in the county in which the registered office of the corporation is
located, except that a surviving foreign corporation that receives a demand
relating to the shares of a constituent domestic corporation shall file the
petition in the county in this state in which the last registered office of the
constituent corporation was located. The petition shall name as parties all
dissenters who have demanded payment under subdivision 6 and who have not
reached agreement with the corporation. The corporation shall, after filing the
petition, serve all parties with a summons and copy of the petition under the
rules of civil procedure. Nonresidents of this state may be served by
registered or certified mail or by publication as provided by law. Except as
otherwise provided, the rules of civil procedure apply to this
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proceeding. The jurisdiction of the court is plenary and exclusive. The court
may appoint appraisers, with powers and authorities the court deems proper, to
receive evidence on and recommend the amount of the fair value of the shares.
The court shall deter mine whether the shareholder or shareholders in question
have fully complied with the requirements of this section, and shall determine
the fair value of the shares, taking into account any and all factors the court
finds relevant, computed by any method or combination of methods that the
court, in its discretion, sees fit to use, whether or not used by the
corporation or by a dissenter. The fair value of the shares as determined by
the court is binding on all shareholders, wherever located. A dissenter is
entitled to judgment in cash for the amount by which the fair value of the
shares as determined by the court, plus interest, exceeds the amount, if any,
remitted under subdivision 5, but shall not be liable to the corporation for
the amount, if any, by which the amount, if any, remitted to the dissenter
under subdivision 5 exceeds the fair value of the shares as determined by the
court, plus interest.
Subd. 8. Costs; fees; expenses. (a) The court shall determine the costs and
expenses of a proceeding under subdivision 7, including the reasonable expenses
and compensation of any appraisers appointed by the court, and shall assess
those costs and expenses against the corporation, except that the court may
assess part or all of those costs and expenses against a dissenter whose action
in demanding payment under subdivision 6 is found to be arbitrary, vexatious,
or not in good faith.
(b) If the court finds that the corporation has failed to comply
substantially with this section, the court may assess all fees and expenses of
any experts or attorneys as the court deems equitable. These fees and expenses
may also be assessed against a person who has acted arbitrarily, vexatiously,
or not in good faith in bringing the proceeding, and may be awarded to a party
injured by those actions.
(c) The court may award, in its discretion, fees and expenses to an attorney
for the dissenters out of the amount awarded to the dissenters, if any.
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Part II
Information Not Required in Prospectus
Item 20. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify a director, officer, employee or agent made a party
to an action by reason of the fact that he or she was a director, officer or
agent of the corporation or was serving at the request of the corporation
against expenses actually and reasonably incurred by him in connection with
such action if he acted in good faith and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the corporation and, with
respect to any criminal action, had no reasonable cause to believe his conduct
was unlawful. Although Delaware law permits a corporation to indemnify any
person referred to above against expenses in connection with the defense or
settlement of an action by or in the right of the corporation, provided that he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the corporation's best interests, if such person has been judged
liable to the corporation, indemnification is only permitted to the extent that
the Court of Chancery or the court in which the action was brought determines
that, despite the adjudication of liability, such person is entitled to
indemnity for such expenses as the court deems proper. Any determination as to
whether a person seeking indemnification has met the required standard of
conduct and thus entitled to indemnification is, unless ordered by a court, to
be made (1) by a majority vote of directors who are not party to such action,
suit or proceeding, or (2) by a committee of such directors designated by a
majority vote of such directors, or (3) if there are no such directors, or if
such directors so direct, independent legal counsel in a written opinion, if
such a quorum does not exist or if the disinterested directors so direct, or
(4) by the shareholders.
Landry's certificate of incorporation limits, to the maximum extent
permitted by Delaware law, the personal liability of directors for monetary
damages for breach of their fiduciary duties as a director. Landry's
certificate of incorporation further provides that each person who was or is a
party or threatened to be made a party to, or is involved in any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation), by reason of the fact that such person is or was a director,
officer, employee or agent of Landry's or is or was serving at the request of
Landry's as a director, officer, employee or agent of another corporation,
partnership, limited liability company, joint venture, trust or other
enterprise, will be indemnified by Landry's to the fullest extent permitted by
Delaware law. The right to indemnification includes the right to be paid by
Landry's the expenses incurred in connection with any such proceeding advance
of its final disposition. In general, the indemnification provided for by
Delaware law is not deemed to be exclusive of any non-statutory indemnification
rights provided to directors, officers and employees under any by-law,
agreement or vote of shareholders or disinterested directors. The Landry's
certificate of incorporation contains similar provisions.
Item 21. Exhibits and Financial Statement Schedules
(a) Exhibits required by Item 601 of Regulation S-K:
<TABLE>
<CAPTION>
Exhibit Description
------- ----------------------------------------------------------------------
<C> <S>
2.1 Agreement and Plan of Merger, dated as of February 9, 2000, by and
among the Registrant, LSR Acquisition Corp. and Rainforest Cafe, Inc.
(included as Annex A to the Proxy Statement/Prospectus contained in
the Registration Statement)
4.1 Specimen Common Stock Certificate for the Registrant's Common Stock
(incorporated by reference to Exhibit 4 to the Amendment No. 1 to the
Registrant's Registration Statement on Form S-1, filed with the SEC on
August 2, 1993 (Registration No. 33-65498))
*5.1 Opinion of Winstead Sechrest & Minick P.C. regarding the validity of
the securities to be registered (including consent)
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding certain
tax matters (including consent)
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
Exhibit Description
------- ----------------------------------------------------------------------
<C> <S>
8.2 Opinion of Maslon Edelman Borman & Brand LLP regarding certain tax
matters (including consent)
9.1 Stockholder Agreement, dated as of February 9, 2000, by and between
the Registrant and Lyle Berman (incorporated by reference to Exhibit
10.01 of the Schedule 13D dated February 18, 2000 filed by the
Registrant with respect to Rainforest)
9.2 Stockholder Agreement, dated as of February 9, 2000, by and between
the Registrant and Steven W. Schussler (incorporated by reference to
Exhibit 10.02 of the Schedule 13D dated February 18, 2000 filed by the
Registrant with respect to Rainforest)
23.1 Consent of Winstead Sechrest & Minick P.C. (contained in Exhibit 5.1
hereto)
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (contained in
Exhibit 8.1 hereto)
23.3 Consent of Maslon Edelman Borman & Brand LLP (contained in Exhibit 8.2
hereto)
23.4 Consent of U.S. Bancorp Piper Jaffray (contained in Annex B to the
Proxy Statement/Prospectus
contained in the Registration Statement)
*23.5 Consent of Arthur Andersen LLP (Houston, Texas)
*23.6 Consent of Arthur Andersen LLP (Minneapolis, Minnesota)
24.1 Powers of Attorney (included on signature page)
*99.1 Form of Proxy Card
*99.2 Form of Election Form/Letter of Transmittal
*99.3 Employee Termination, Consulting and Non-Competition Agreement, dated
as of February 9, 2000, by and between the Registrant and Lyle Berman
*99.4 Employee Termination, Consulting and Non-Competition Agreement, dated
as of February 9, 2000, by and between the Registrant and Kenneth W.
Brimmer
*99.5 Employee Termination, Consulting and Non-Competition Agreement, dated
as of February 9, 2000, by and between the Registrant and Steven W.
Schussler
*99.6 Employee Termination, Consulting and Non-Competition Agreement, dated
as of February 9, 2000, by and between the Registrant and Ercument
Ucan
</TABLE>
- --------
* Filed herewith.
(b) Financial Statement Schedules. Not applicable.
(c) Reports, Opinion or Appraisal. See Exhibits 5.1, 8.1 and 8.2.
Item 22. Undertakings
(1) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) incorporated by reference in this registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(2) The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report, to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
II-2
<PAGE>
(3) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
undersigned undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
(4) The undersigned registrant undertakes that every prospectus: (i) that is
filed pursuant to paragraph (3) immediately preceding, or (ii) that purports to
meet the requirements of Section 10(a)(3) of the Act and is used in connection
with an offering of securities subject to Rule 415, will be filed as a part of
an amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(5) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Item 4, 10(b), 11 or 13 of this Form S-4 under the Securities Act of 1933,
within one business day of receipt of any such request, and to send the
incorporated documents by first class mail or other equally prompt means,
including information contained in documents filed after the effective date of
the registration statement through the date of responding to such request.
(6) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(7) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described in Item 20 above, or
otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable. If a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in a successful defense of any action,
suit or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, Texas on March
6, 2000.
LANDRY'S SEAFOOD RESTAURANTS, INC.
/s/ Tilman J. Fertitta
By: ________________________________
Name: Tilman J. Fertitta
Title: Chairman of the Board,
President
and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each individual whose signature appears
below constitutes and appoints Tilman J. Fertitta, Steven L. Scheinthal and
Paul S. West, and each of them individually, his true and lawful attorneys-in-
fact and agents with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this registration statement
and to file the same with all exhibits thereto, and all documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or any of
them, or their or his substitute or substitutes, may lawfully do or cause to be
done by virtue hereof. This power of attorney may be executed in counterparts.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Tilman J. Fertitta Director, Chairman of the March 6, 2000
______________________________________ Board, President and
Tilman J. Fertitta Chief Executive Officer
/s/ Steven L. Scheinthal Director, Vice President March 6, 2000
______________________________________ of Administration,
Steven L. Scheinthal General Counsel and
Secretary
/s/ Paul S. West Director, Vice President March 6, 2000
______________________________________ of Finance and Chief
Paul S. West Financial Officer
/s/ Richard E. Ervin Vice President of March 6, 2000
______________________________________ Restaurant Operations
Richard E. Ervin
/s/ James E. Masucci Director March 6, 2000
______________________________________
James E. Masucci
/s/ Joe Max Taylor Director March 6, 2000
______________________________________
Joe Max Taylor
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
------- ----------------------------------------------------------------------
<C> <S>
2.1 Agreement and Plan of Merger, dated as of February 9, 2000, by and
among the Registrant, LSR Acquisition Corp. and Rainforest Cafe, Inc.
(included as Annex A to the Proxy Statement/Prospectus contained in
the Registration Statement)
4.1 Specimen Common Stock Certificate for the Registrant's Common Stock
(incorporated by reference to Exhibit 4 to the Amendment No. 1 to the
Registrant's Registration Statement on Form S-1, filed with the SEC on
August 2, 1993 (Registration No. 33-65498))
*5.1 Opinion of Winstead Sechrest & Minick P.C. regarding the validity of
the securities to be registered (including consent)
8.1 Opinion of Skadden, Arps, Slate, Meagher & Flom LLP regarding certain
tax matters (including consent)
8.2 Opinion of Maslon Edelman Borman & Brand LLP regarding certain tax
matters (including consent)
9.1 Stockholder Agreement, dated as of February 9, 2000, by and between
the Registrant and Lyle Berman (incorporated by reference to Exhibit
10.01 of the Schedule 13D dated February 18, 2000 filed by the
Registrant with respect to Rainforest)
9.2 Stockholder Agreement, dated as of February 9, 2000 by and between the
Registrant and Steven W. Schussler (incorporated by reference to
Exhibit 10.02 of the Schedule 13D dated February 18, 2000 filed by the
Registrant with respect to Rainforest)
23.1 Consent of Winstead Sechrest & Minick P.C. (contained in Exhibit 5.1
hereto)
23.2 Consent of Skadden, Arps, Slate, Meagher & Flom LLP (contained in
Exhibit 8.1 hereto)
23.3 Consent of Maslon Edelman Borman & Brand LLP (contained in Exhibit 8.2
hereto)
23.4 Consent of U.S. Bancorp Piper Jaffray (contained in Annex B to the
Proxy Statement/Prospectus
contained in the Registration Statement)
*23.5 Consent of Arthur Andersen LLP (Houston, Texas)
*23.6 Consent of Arthur Andersen LLP (Minneapolis, Minnesota)
24.1 Powers of Attorney (included on signature page)
*99.1 Form of Proxy Card
*99.2 Form of Election Form/Letter of Transmittal
*99.3 Employee Termination, Consulting and Non-Competition Agreement, dated
as of February 9, 2000, by and between the Registrant and Lyle Berman
*99.4 Employee Termination, Consulting and Non-Competition Agreement, dated
as of February 9, 2000, by and between the Registrant and Kenneth W.
Brimmer
*99.5 Employee Termination, Consulting and Non-Competition Agreement, dated
as of February 9, 2000, by and between the Registrant and Steven W.
Schussler
*99.6 Employee Termination, Consulting and Non-Competition Agreement, dated
as of February 9, 2000, by and between the Registrant and Ercument
Ucan
</TABLE>
- --------
* Filed herewith
<PAGE>
EXHIBIT 5.1
WINSTEAD SECHREST & MINICK P.C.
2400 Bank One Center
910 Travis Street
Houston, Texas 77002
(t) 713/650-8400
(f) 713/650-2400
March 6, 2000
Landry's Seafood Restaurants, Inc.
1400 Post Oak Blvd., Suite 1010
Houston, Texas 77056
Re: Landry's Seafood Restaurants, Inc.
Registration Statement on Form S-4
----------------------------------
Ladies and Gentlemen:
Winstead Sechrest & Minick P.C. ("we" or the "Firm"), counsel for Landry's
Seafood Restaurants, Inc., a Delaware corporation ("Landry's"), is delivering
this opinion in connection with the Registration Statement on Form S-4 (the
"Registration Statement") filed by Landry's with the Securities and Exchange
Commission (the "Commission") pursuant to the Securities Act of 1933, as amended
(the "Securities Act"), on the date hereof. The Registration Statement relates
to the proposed issuance by Landry's of up to 10,131,472 shares (the "Shares")
of common stock, par value $.01 per share, of Landry's (the "Common Stock")
pursuant to an Agreement and Plan of Merger (the "Merger Agreement"), dated as
of February 9, 2000, by and among Landry's, LSR Acquisition Corp., a Delaware
corporation ("Merger Sub"), and Rainforest Cafe, Inc., a Minnesota corporation
("Rainforest"). Of the Shares, approximately 6,421,157 shares of Common Stock
(the "Treasury Shares") are presently issued but not outstanding (i.e., shares
held as treasury stock by Landry's).
The Merger Agreement provides for the merger (the "Merger") of Rainforest
with and into Merger Sub, with Merger Sub continuing as the surviving
corporation following consummation of the Merger. The Registration Statement
includes a proxy statement/prospectus (the "Proxy Statement/Prospectus") to be
furnished to shareholders of Rainforest in connection with their approval of the
Merger.
This opinion is being furnished in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Securities Act.
<PAGE>
Landry's Seafood Restaurants, Inc.
March 6, 2000
Page 2
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of: (i) the Registration
Statement (including the Proxy Statement/Prospectus); (ii) the Merger Agreement;
(iii) a specimen certificate representing the Common Stock; (iv) the Certificate
of Incorporation of Landry's, as presently in effect; (v) the By-Laws of
Landry's, as presently in effect; (vi) resolutions of the Board of Directors of
Landry's relating to the transactions contemplated by the Merger Agreement and
the Registration Statement; and (vii) resolutions of the Board of Directors of
Landry's relating to the issuance and repurchase of the Treasury Shares. We have
also examined originals or copies, certified or otherwise identified to our
satisfaction, of such records of Landry's and such agreements, certificates of
public officials, certificates of officers or other representatives of Landry's
and others, and such other documents, certificates and records as we have deemed
necessary or appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed or to be executed by parties other than
Landry's, we have assumed that such parties had or will have the power,
corporate or other, to enter into and perform all obligations thereunder and
have also assumed the due authorization by all requisite action, corporate or
other, and execution and delivery by such parties of such documents and the
validity and binding effect thereof on such parties. As to any facts material to
the opinion expressed herein which we have not independently established or
verified, we have relied upon statements and representations of officers and
other representatives of Landry's and others.
For purposes of this opinion, we have assumed that prior to the issuance of
any of the Shares: (i) the Registration Statement, as finally amended, will have
become effective under the Securities Act; (ii) Rainforest's shareholders will
have approved the Merger by all required votes; (iii) Articles of Merger will
have been duly filed with the Secretary of State of the State of Minnesota; (iv)
a Certificate of Merger will have been duly filed with the Secretary of State of
the State of Delaware; and (v) the certificates representing the shares of
Common Stock will have been duly executed by an authorized officer of the
transfer agent for such securities and will have been registered by the
registrar for such securities and will conform to the specimen thereof examined
by us.
<PAGE>
Landry's Seafood Restaurants, Inc.
March 6, 2000
Page 3
We are attorneys admitted to the Bar of the State of Texas, and we do not
express any opinion as to the laws of any jurisdiction except for the General
Corporation Law of the State of Delaware.
Based upon and subject to the foregoing, we are of the opinion that the
issuance of the Shares has been duly authorized and, upon the issuance of the
Shares in accordance with the terms and conditions of the Merger Agreement, the
Shares will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement and to references to the Firm under the
caption "Legal Matters" in the Proxy Statement/Prospectus forming a part of the
Registration Statement. In giving this consent, we do not thereby admit that we
are included in the category of persons whose consent is required under Section
7 of the Securities Act and the rules and regulations of the Commission
thereunder.
Very truly yours,
WINSTEAD SECHREST & MINICK P.C.
By: /s/ Arthur S. Berner
---------------------------------
Arthur S. Berner
For the Firm
<PAGE>
EXHIBIT 23.5
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-4 of Landry's Seafood
Restaurants, Inc. of our report dated February 10, 2000 included in Landry's
Seafood Restaurants, Inc. Form 10-K for the year ended December 31, 1999, and
to all references to our Firm included in this Registration Statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Houston, Texas
February 29, 2000
<PAGE>
EXHIBIT 23.6
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement on Form S-4 of Landry's Seafood
Restaurant, Inc. of our report dated February 4, 2000 included in Rainforest
Cafe, Inc.'s Form 10-K for the year ended January 2, 2000 and to all references
to our Firm included in this Registration Statement.
/s/ Arthur Andersen LLP
Arthur Andersen LLP
Minneapolis, Minnesota
March 6, 2000
<PAGE>
EXHIBIT 99.1
OPTIONS FOR SUBMITTING YOUR PROXY
In addition to voting by mail, Rainforest shareholders will have the
opportunity to vote via the Internet or by telephone. Votes submitted by
telephone must be received by 12:00 noon, New York City time, on [one business
day prior to special meeting], 2000. Votes submitted via the Internet must be
received by 12:00 noon, Central time, on [one business day prior to special
meeting], 2000. Submitting a proxy will not affect your right to vote in person
should you decide to attend the special meeting.
To vote by telephone or via the Internet, please refer to the instructions set
forth below. The telephonic and Internet voting procedures are designed to
authenticate shareholder identities, to allow shareholders to give their voting
instructions and to confirm that shareholders' instructions have been recorded
properly.
Shareholders voting via the Internet should understand that there may be costs
associated with electronic access, such as usage charges from Internet access
providers and telephone companies, that must be borne by the shareholder.
TO VOTE BY PHONE, CALL: (800) 240-6326. Use any touch-tone telephone to
transmit your voting instructions. Have your proxy card in hand when you call.
You will be prompted to enter your company control number which is located
below and then follow the simple instructions the provided to you when you
call.
TO VOTE BY INTERNET, visit www.eproxy.com/rain/. Use the Internet to transmit
your voting instructions and for electronic delivery of information. Have your
proxy card in hand when you access the web site. You will be prompted to enter
your company control number which is located below to obtain your records and
create an electronic voting instruction form.
TO VOTE BY MAIL, mark, sign and date your proxy card and return it in the
postage-paid envelope we have enclosed or return it to Rainforest Cafe, Inc.;
c/o Norwest Shareowner Services; 161 North Concord Exchange; South St. Paul, MN
55075.
COMPANY CONTROL NUMBER:
<PAGE>
RAINFOREST CAFE, INC.
PROXY FOR SPECIAL MEETING OF SHAREHOLDERS
To be Held on [ ], 2000
The undersigned, a shareholder of Rainforest Cafe, Inc., hereby appoints
Kenneth W. Brimmer, Stephen Cohen and Robert Hahn, and each of them
individually, as proxies, with full power of substitution, to vote on behalf of
the undersigned the number of shares of which the undersigned is then entitled
to vote, at the Special Meeting of Shareholders of Rainforest Cafe, Inc. to be
held at [ ] on [ ], 2000, and at any and all adjournments or
postponements thereof, with all the powers which the undersigned would possess
if personally present at the special meeting, upon the following proposals:
For Against Abstain
- --------------------------------------------------------------------------------
1. To consider and vote upon the Agreement
and Plan of Merger, dated as of February
9, 2000, by and among Landry's Seafood
Restaurants, Inc., LSR Acquisition Corp.,
and Rainforest Cafe, Inc., a copy of which
is attached as Annex A to the accompanying
Proxy Statement/Prospectus, and the merger
contemplated thereby.
- --------------------------------------------------------------------------------
2. To adjourn the special meeting, if
necessary, to permit further solicitation
of proxies if there are not sufficient
votes to approve the merger at the
originally scheduled time of the special
meeting.
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMENDS
A VOTE FOR PROPOSAL 1 AND PROPOSAL 2.
The undersigned hereby revokes all previous proxies relating to the shares
covered hereby and acknowledges receipt of the Notice of Special Meeting and
the Proxy Statement/Prospectus relating to the Special Meeting of Shareholders.
When properly executed, this proxy will be voted on the proposals set forth
herein as directed by the shareholder, but if no direction is made in the space
provided, this proxy will be voted for Proposal 1 and Proposal 2.
Please sign exactly as name appears hereon. When shares of Rainforest common
stock are held by joint tenants, both should sign. When signing as an attorney,
executor, administrator, trustee or guardian, please sign name by President or
other authorized officer. If a partnership, please sign partnership name by
authorized person.
Dated: _____________________________
- ------------------------------------
Signature
- ------------------------------------
Signature (if held jointly)
2
<PAGE>
EXHIBIT 99.2
RAINFOREST CAFE, INC.
720 South Fifth Street
Hopkins, Minnesota 55343
- --------------------------------------------------------------------------------
ELECTION FORM / LETTER OF TRANSMITTAL
- --------------------------------------------------------------------------------
[NAME AND ADDRESS LABEL]
Dear Rainforest Shareholder:
We are sending you this election form/letter of transmittal in connection
with the Agreement and Plan of Merger, dated as of February 9, 2000, by and
among Landry's Seafood Restaurants, Inc. ("Landry's"), LSR Acquisition Corp.
("LSR") and Rainforest Cafe, Inc. ("Rainforest"). As more fully described in
the accompanying Proxy Statement/Prospectus, if the Rainforest shareholders
approve and adopt the merger proposal, Rainforest will be merged with and into
LSR, a newly formed, wholly owned subsidiary of Landry's. LSR will survive the
merger as a wholly owned subsidiary of Landry's and will change its name to
"Rainforest Cafe" (or a comparable name). You should carefully read the
accompanying Proxy Statement/Prospectus.
You currently hold shares of Rainforest common stock. If we complete the
merger, each share of your Rainforest common stock will be exchanged, at your
election, into one of the following (in each instance, subject to proration as
described in greater detail in the accompanying Proxy Statement/Prospectus):
. $5.23 in cash; or
. 0.5816th of a share of Landry's common stock.
This form offers you a choice of electing to receive cash or Landry's common
stock, or some of each, for your shares of Rainforest common stock.
You should make an election on this form, but even if you do so, you may not
receive what you elect. If Rainforest shareholders, in the aggregate, elect to
receive Landry's common stock for more than 65% of their shares or cash for
more than 35% of their shares, the shareholders electing the oversubscribed
consideration will receive, on a pro rata basis, the alternative consideration
with respect to the excess. If proration results, you may not receive the type
of consideration specified in your election.
No fractional shares of Landry's common stock will be issued in the merger.
Instead, each Rainforest shareholder that would otherwise be entitled to
receive a fractional share will receive an amount in cash equal to $5.23
multiplied by such fractional interest.
For further information, see "THE MERGER AGREEMENT--Structure of the Merger
and Conversion of Rainforest Common Stock" in the accompanying Proxy
Statement/Prospectus.
1
<PAGE>
Each Rainforest shareholder (other than shareholders who intend to dissent
from the merger and demand fair value for their shares under Minnesota law)
should complete this form and return it along with the stock certificates, a
book entry transfer of shares, or a guarantee of delivery for the shares
covered by this form to:
AMERICAN STOCK TRANSFER & TRUST COMPANY
By Mail:
Rainforest Cafe, Inc.
c/o American Stock Transfer & Trust Company
40 Wall Street, 46th Floor
New York, NY 10005
Facsimile Transmission (for eligible institutions only): (713) 874-2349
Confirm by Telephone: (800) 937-5449 ext. 6820
A completed election form/letter of transmittal must be received by the
exchange agent no later than 5:00 p.m., New York City time, on [ ], 2000 (the
"Election Deadline"). If the exchange agent does not receive a properly
completed and signed election form/letter of transmittal along with the
applicable stock certificates, a book entry transfer of shares, or a guarantee
of delivery for the shares of Rainforest common stock covered by this form by
the Election Deadline, then that shareholder will be deemed not to have made an
election. Rainforest shareholders who fail to timely return or properly
complete this form will receive Landry's common stock and/or cash consideration
so that 65% of the outstanding shares of Rainforest common stock are converted
into Landry's common stock and 35% of the outstanding shares of Rainforest
common stock are converted into cash. In the event that Rainforest shareholders
elect to receive shares of Landry's common stock for more than 65% of the
outstanding shares of Rainforest common stock or cash for more than 35% of the
outstanding shares of Rainforest common stock, Rainforest shareholders who fail
to timely return or properly complete this form will only receive the
undersubscribed consideration.
If the merger is not completed for any reason, this form will be void and of
no effect. Certificate(s) for shares of Rainforest common stock previously
delivered to the exchange agent will be promptly returned.
Under Minnesota law, Rainforest shareholders have the right to dissent from
the merger and obtain payment for the fair value of their shares of Rainforest
common stock in connection with the merger. A full discussion of these
dissenters' rights is included in the accompanying Proxy Statement/Prospectus.
See "THE MERGER--Dissenters' Rights" and Annex C of the accompanying Proxy
Statement/Prospectus.
Please read carefully the accompanying general instructions, complete the
information as required and return this form, along with all of your Rainforest
stock certificates, book entry transfer of shares, or guarantee of delivery of
shares in the enclosed envelope to the exchange agent no later than 5:00 p.m.,
New York City time, on [ ], 2000 at the address listed above.
Delivery of this form to an address other than as set forth above will not
constitute a valid delivery. You must sign this form where requested.
2
<PAGE>
INSTRUCTIONS FOR STEP 1
ELECTION FORM
Share Identification. You must identify the shares of Rainforest common
stock that you own. In the spaces provided under the column entitled "Name(s)
and Address(es) of Registered Holder(s)," print the name(s) and address(es) of
the registered holder(s). In the spaces provided under the column entitled
"Certificate Number," insert the stock certificate number for each stock
certificate you hold. If you do not hold stock certificate(s), please indicate
such in the "Certificate Number" column. In the spaces provided under the
column entitled "Number of Shares Represented By," insert the number of shares
represented by the corresponding stock certificate(s) or held in book-entry
form. At the bottom of the "Number of Shares Represented By" column, please
insert the total number of shares of Rainforest common stock you own.
Election. Choose the consideration you would like to receive. The sum of
your elections must be equal to the total number of shares of Rainforest common
stock you hold in order for your election form/letter of transmittal to be
properly completed.
All-Cash Election. You may choose to make a cash election with respect to
all of your shares of Rainforest common stock and receive $5.23 in cash for
each share of your Rainforest common stock. To make an all-cash election, you
should insert the total number of Rainforest shares you own in the space
provided under the column entitled "Cash Election."
All-Stock Election. You may choose to make a stock election with respect to
all of your shares of Rainforest common stock and receive 0.5816th of a share
of Landry's common stock for each share of your Rainforest common stock. To
make an all-stock election, you should insert the total number of shares of
Rainforest common stock you own in the space provided under the column entitled
"Stock Election."
Combination Election. You may choose to make a combination election with
respect to your shares of Rainforest common stock and receive a combination of
(a) $5.23 in cash for each share for which you elect to receive cash and (b)
0.5816th of a share of Landry's common stock for each share for which you elect
to receive stock. To make a combination election, you should insert the number
of shares of Rainforest common stock you would like to exchange for cash in the
space provided under the column entitled "Cash Election" and insert the number
of shares of Rainforest common stock you would like to convert into shares of
stock in the space provided under the column entitled "Stock Election."
Non-Election. You may choose to make an affirmative non-election with
respect to all of your shares of Rainforest common stock. In the event you make
an affirmative non-election or fail to properly submit this form, you will
receive cash and/or stock pursuant to the proration provisions of the merger
agreement as calculated by the exchange agent. Generally, Rainforest
shareholders who fail to timely return or properly complete this form will
receive Landry's common stock and/or cash so that 65% of the outstanding shares
of Rainforest common stock are converted into Landry's common stock and 35% of
the outstanding shares of Rainforest common stock are converted into cash.
However, in the event that Rainforest shareholders elect to receive shares of
Landry's common stock for more than 65% of the outstanding shares of Rainforest
common stock or cash for more than 35% of the outstanding shares of Rainforest
common stock, Rainforest shareholders who make an affirmative non-election or
who fail to timely return or properly complete this form will only receive the
undersubscribed consideration. To affirmatively make a non-election, you should
insert the total number of shares of Rainforest common stock you own in the
space provided under the column entitled "Non-Election."
Please review carefully "THE MERGER--Structure of the Merger and Conversion
of Rainforest Common Stock" on pages through of the accompanying Proxy
Statement/Prospectus for an explanation of the conversion of the shares of
Rainforest common stock. As explained in the Proxy Statement/Prospectus, the
total merger consideration for all shares of Rainforest common stock is subject
to proration. If Rainforest shareholders, in the aggregate, elect to receive
Landry's common stock for more than 65% of their shares or cash for more than
35% of their shares, the shareholders electing the oversubscribed consideration
will receive on a pro rata basis the alternative consideration with respect to
the excess. If proration results, you may not receive the type of consideration
specified in your election.
Once you have completed Step 1, go to Step 2A.
3
<PAGE>
STEP 1
IDENTIFY YOUR SHARES AND MAKE YOUR ELECTION
<TABLE>
<CAPTION>
Name(s)
and
Addresses Number of
of Shares
Registered Certificate Represented Cash Stock Non-
Holder(s) Number* By Election Election Election
- ------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------
- ------------------------------------------------------------------
- ------------------------------------------------------------------
- ------------------------------------------------------------------
- ------------------------------------------------------------------
- ------------------------------------------------------------------
- ------------------------------------------------------------------
- ------------------------------------------------------------------
- ------------------------------------------------------------------
- ------------------------------------------------------------------
- ------------------------------------------------------------------
- ------------------------------------------------------------------
- ------------------------------------------------------------------
Total Shares:
- ------------------------------------------------------------------
* If you do not hold Rainforest common stock certificates,
please indicate and a book-entry transfer will be made for you.
</TABLE>
YOUR ELECTION MAY BE ADJUSTED BY THE EXCHANGE AGENT. If Rainforest
shareholders, in the aggregate, elect to receive Landry's common stock for more
than 65% of their shares or cash for more than 35% of their shares, the
shareholders electing the oversubscribed consideration will receive on a pro
rata basis the alternative consideration with respect to the excess. If
proration results, you may not receive the type of consideration specified in
your election.
Your election will be valid only if accompanied by your Rainforest stock
certificate(s), a book entry transfer of shares to the exchange agent (check
the box below), or a guarantee of delivery (check the box below).
[ ] CHECK HERE IF YOUR SHARES OF RAINFOREST COMMON STOCK ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEE OF DELIVERY AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s): __________________________________________________
Window Ticket Number (if any): _________________________________________________
[ ] CHECK HERE IF YOUR SHARES OF RAINFOREST COMMON STOCK ARE BEING DELIVERED BY
BOOK ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AND COMPLETE THE
FOLLOWING:
Name of Electing Institution: __________________________________________________
The Depository Trust Company Account Number:___________________________________
Transaction Code Number: _______________________________________________________
4
<PAGE>
INSTRUCTION FOR STEP 2A
LETTER OF TRANSMITTAL
Regardless of your election in Step 1, if you are a Rainforest shareholder
(other than a shareholder who intends to dissent from the merger and demand
fair value for their shares of Rainforest common stock) you must send all of
your Rainforest common stock certificates, book entry transfer of shares or
guarantee of delivery of shares to the exchange agent with the following letter
of transmittal. See General Instruction D.1. If you do not hold stock
certificates, please indicate on the previous page and a book-entry transfer
will be made for you.
Please read and sign the letter of transmittal on the following page.
If you have all of the stock certificates representing your shares of
Rainforest common stock and do not have special payment or delivery
instructions as set forth below, sign the letter of transmittal and go to Step
3. See General Instruction D.2. regarding the proper form of signatures.
If you have lost any or all of the stock certificates representing your
shares of Rainforest common stock, in addition to signing the letter of
transmittal and sending it to the exchange agent together with any stock
certificates you do have as described above, you must complete Step 2B with
respect to any certificates you have lost.
If you want the Landry's common stock certificates being issued to you
pursuant to the merger to be registered, and/or you want the cash being paid to
you pursuant to the merger agreement to be payable, to someone other than the
person or entity listed on your Rainforest stock certificate, then you must
complete and sign the "Special Payment Instructions" box below. If you
transferred any of your shares to someone else after [the record date for the
special meeting of Rainforest shareholders], you must complete and sign the
"Special Payment Instructions" box below. See General Instruction D.7. for
information about your responsibility for transfer taxes if you complete the
"Special Payment Instructions" box.
If you want the Landry's common stock certificates and/or the cash being
issued or paid to you pursuant to the merger to be registered or payable to
you, but sent to someone else, you must complete and sign the "Special Delivery
Instructions" box below.
If you fill out either the "Special Payment Instructions" box or the
"Special Delivery Instructions" box, you must have your signature(s) medallion
guaranteed by an eligible institution. See General Instruction D.4.
If your cash payment is at least $500,000 and you would like it to be sent
to you by wire transfer rather than by check, you must complete and sign the
"Wiring Instructions" box below. Please verify your wiring instructions before
completing the "Wiring Instructions" box. If you provide incorrect wiring
instructions, the exchange agent will have the right to send your money to you
by check.
If your Rainforest stock certificates are not deliverable to the exchange
agent prior to 5:00 p.m., New York City time, on , 2000 (the "Election
Deadline"), a guarantee of delivery may be completed by an eligible institution
and your election will be valid if the stock certificates, together with a copy
of the completed election form/letter of transmittal, are received by the
exchange agent by the third trading day after the Election Deadline.
The exchange agent will issue you a single check and/or a single book entry
representing Landry's common stock. If you would prefer to receive a stock
certificate, please check the box in the "Receipt of Certificates" section
below. If you request a stock certificate, the exchange agent will issue a
single certificate representing the Landry's common stock. However, if for tax
purposes or otherwise you wish to have more than one certificate issued, please
provide explicit instructions to the exchange agent (including the particular
denominations of the certificates).
5
<PAGE>
STEP 2A
LETTER OF TRANSMITTAL
American Stock Transfer & Trust Company, Exchange Agent:
In connection with the merger, the undersigned hereby submits the stock
certificate(s) representing the undersigned's shares of Rainforest Cafe, Inc.
common stock to, or hereby transfers ownership of such stock certificate(s) by
book-entry transfer to the account of, American Stock Transfer & Trust Company,
the exchange agent designated by Rainforest Cafe, Inc. ("Rainforest") and
Landry's Seafood Restaurants, Inc. ("Landry's"), or its replacement or
successor, and instructs the exchange agent to deliver to the undersigned, in
exchange for the undersigned's shares of Rainforest common stock, cash and/or
shares of Landry's common stock pursuant to the undersigned's election as set
forth on the election form enclosed with this letter of transmittal. The
undersigned understands that the undersigned's election may be adjusted by the
exchange agent pursuant to the terms of the merger agreement.
By delivery of this letter of transmittal to the exchange agent, the
undersigned hereby forever waives the undersigned's right to dissent from the
merger under applicable Minnesota law and withdraws all written objections to
the merger and/or demands for, if any, with respect to the fair value of the
shares of Rainforest common stock owned by the undersigned.
The undersigned represents and warrants that the undersigned has full power
and authority to surrender the stock certificate(s) surrendered herewith or
transferred in book-entry form, or covered by a guarantee of delivery, free and
clear of all liens, claims, and encumbrances. The undersigned will, upon
request, execute and deliver any additional documents reasonably deemed by the
exchange agent or Landry's to be appropriate or necessary to complete the sale,
assignment, or transfer of the shares of Rainforest common stock. All authority
conferred or agreed to be conferred in this letter of transmittal shall be
binding upon the successors, assigns, heirs, executors, administrators, and
legal representatives of the undersigned and shall not be affected by, and
shall survive, the death or incapacity of the undersigned.
Unless otherwise indicated under "Special Payment Instructions" box below,
please issue any certificate for shares of Landry's common stock and/or any
check payable (or wire transfer of funds payable) in exchange for the
undersigned's shares of Rainforest common stock in the name of the registered
holder(s) of such shares of Rainforest common stock. Similarly, unless
otherwise indicated in the "Special Delivery Instructions" and/or "Wiring
Instructions" boxes, please mail any certificate for shares of Landry's common
stock and/or any check payable in exchange for the undersigned's shares of
Rainforest common stock to the registered holder(s) of such shares of
Rainforest common stock at the address or addresses shown below.
REGISTERED RAINFOREST SHAREHOLDER(S) SIGN HERE
- ------------------------------------- -------------------------------------
Signature of owner(s) Signature of owner(s)
Print Name: _________________________ Print Name: _________________________
- ------------------------------------- -------------------------------------
Social Security or other Tax ID Social Security or other Tax ID
Number Number
Address:_____________________________ Address:_____________________________
- ------------------------------------- -------------------------------------
- ------------------------------------- -------------------------------------
Date: _________________________, 2000 Date: _________________________, 2000
6
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(To be completed ONLY if you want the Landry's common stock certificates
being issued to you pursuant to the merger to be registered, and/or you want
the cash being paid to you pursuant to the merger agreement to be payable,
to someone other than the person or entity listed on your Rainforest common
stock certificates.)
Register my shares of Landry's common stock and/or make payment to the
following:
Name: _______________________________________________________________________
(Please type or print)
Address:_____________________________________________________________________
-----------------------------------------------------------------------------
(include zip code)
SPECIAL DELIVERY INSTRUCTIONS
(To be completed ONLY if you want the Landry's common stock certificates
and/or the cash being issued or paid to you pursuant to the merger to be
registered or payable to you but sent to someone else.)
Mail or deliver my shares of Landry's common stock and/or send payment to
the following:
Name:________________________________________________________________________
(Please type or print)
Address: ____________________________________________________________________
-----------------------------------------------------------------------------
(include zip code)
WIRING INSTRUCTIONS
Provided I am to receive at least $500,000 in cash, I would like to receive
all of the cash to be paid to me in connection with the merger to be sent by
wire transfer, pursuant to the following wiring instructions in lieu of
delivery of a check:
Name of Financial Institution: ______________________________________________
Financial Institution's ABA No.: ____________________________________________
Name of Account: ____________________________________________________________
Account No.: ________________________________________________________________
7
<PAGE>
SIGNATURE GUARANTEE
(In the event that the check and/or certificate representing shares of
Landry's common stock is to be issued in exactly the name of the record
holder(s) of the Rainforest common stock, no guarantee of the signature on
this election form/letter of transmittal is required.)
If you have filled out either the "Special Payment Instructions" box, the
"Special Delivery Instructions" box or the "Guarantee of Delivery" box, you
must have your signature(s) medallion guaranteed by an eligible institution,
i.e., a member firm of a registered national securities exchange, a member
of the NASD, Inc., or a commercial bank or trust company in the United
States.
Name of Guarantor: __________________________________________________________
Signature(s) Guaranteed: ____________________________________________________
-----------------------------------------------------------------------------
Date: ___________________, 2000
Apply Signature Medallion:
GUARANTEE OF DELIVERY
The undersigned, a member firm of a registered national securities exchange,
a member of the NASD, Inc., or a commercial bank or trust company in the
United States, hereby guarantees to deliver to the exchange agent either all
of the certificate(s) for Rainforest common stock to which this election
form/letter of transmittal relates, or such certificates as are identified
below, duly endorsed in blank or otherwise in form acceptable for transfer,
no later than 12:00 noon, New York City time, on the third trading day after
the Election Deadline. If you complete this guarantee of delivery, you will
need a signature guarantee by an eligible institution.
The undersigned acknowledges that it must deliver the shares of Rainforest
common stock covered by this election form/letter of transmittal to the
exchange agent within the time period set forth above and that failure to do
so could result in financial loss to the undersigned.
------------------------------------
Print Firm Name
-------------------------------------
Dated ------------------------------------
Authorized Signature
-------------------------------------
Certificate Number(s) ------------------------------------
Address
------------------------------------- ------------------------------------
Number of shares of Rainforest Telephone number
common stock
RECEIPT OF CERTIFICATES
Unless you check the box below, you will receive book-entry shares of
Landry's common stock.
[ ] Check here if you would like certificate(s) for your shares of Landry's
common stock.
8
<PAGE>
INSTRUCTION FOR STEP 2B
CERTIFY IF CERTIFICATE(S) ARE LOST
If you are unable to locate some or all of the stock certificates
representing your shares of Rainforest common stock, you must complete the
certification on the following page. Your signature must be notarized.
Please see General Instruction D.2. regarding proper signatures.
After you have completed Step 2B, go to Step 3.
9
<PAGE>
STEP 2B--CERTIFY IF CERTIFICATE(S) ARE LOST
The certificate(s) representing the following shares of Rainforest common
stock has/have been lost, stolen, seized, or destroyed, at a time unknown to
me:
- ------------------------------------- -------------------------------------
Certificate Number Shares
I hereby certify the following:
(1) I have made or caused to be made a diligent search for such stock
certificate(s) and have been unable to find or recover it/them. I have not
sold, assigned, pledged, transferred, deposited under any agreement, or
hypothecated the shares of Rainforest Cafe, Inc. common stock represented by
such stock certificate(s), or any interest therein, or assigned any power of
attorney or other authorization respecting the same which is now outstanding
and in force, or otherwise disposed of such stock certificate(s); and no
person, firm, corporation, agency, or government, other than me, has or has
asserted any right, title, claim, equity, or interest in, to, or respecting
such shares of Rainforest common stock.
(2) Please issue a replacement stock certificate(s). In consideration of the
issuance of a replacement certificate(s), I hereby agree to indemnify and hold
harmless Landry's Seafood Restaurants, Inc. and any person, firm, or
corporation now or hereafter acting as Landry's Seafood Restaurants, Inc.'s
transfer agent, exchange agent, registrar, trustee, depository, redemption,
fiscal, or paying agent, or in any other capacity, and also any successors in
any such capacities, and their respective subsidiaries, affiliates, heirs,
successors, and assigns, from and against any and all liability, loss, damage,
and expense in connection with, or arising out of, their compliance with my
request herein.
(3) I also agree, in consideration of compliance with the foregoing request,
to surrender immediately to Landry's Seafood Restaurants, Inc. the lost stock
certificate(s) should it/they hereafter come into my possession or control.
- ------------------------------------- _______________________________, 2000
Signature
Date
- ------------------------------------- _______________________________, 2000
Signature
Date
- ------------------------------------- _______________________________, 2000
Signature Date
STATE OF
:ss.
COUNTY OF
I, , a Notary Public, do hereby certify that on the day of
2000, personally appeared before me , known to me to be the persons
whose name(s) is/are subscribed to the foregoing instrument, who, being by me
first duly sworn, declared that the statements contained therein are true and
that he/she/they signed said instrument for the purposes, in the capacity, and
for consideration therein expressed.
- --------------------------------------------------------------------------------
(Notary: Please modify if necessary to conform to your state law or attach an
alternative form.)
10
<PAGE>
INSTRUCTION FOR STEP 3
COMPLETE SUBSTITUTE FORM W-9
Rainforest shareholders must complete the following Substitute Form W-9 to
avoid having 31% of your payment withheld for federal income tax purposes as
set forth in General Instruction D.6. to this form.
Please do the following:
(1) write your name and social security number (or employer identification
number for entities) in Part 1 of the Substitute Form W-9;
(2) check the box next to "Individual/Sole Proprietor," "Corporation,"
"Partnership" or "Other" (and, if other, write in the type of entity);
and
(3) sign the "Certification" box in Part 2 of the Substitute Form W-9.
If you do not yet have a Taxpayer Identification Number, please check the
box in "Part 2" and sign the "Certification of Payee Awaiting Taxpayer
Identification Number" box at the bottom of the page.
Please see General Instruction D.6. for information on this Form W-9 and
General Instruction D.2. regarding proper signatures.
11
<PAGE>
STEP 3--COMPLETE SUBSTITUTE FORM W-9
PART 1--PLEASE ENTER YOUR SOCIAL SECURITY NUMBER
NAME AND SOCIAL SECURITY OR
NUMBER OR EMPLOYER EMPLOYER IDENTIFICATION
IDENTIFICATION NUMBER NUMBER
-----------------------
SUBSTITUTE
FORM W-9 --------------------------------------------------------
PART 2--CERTIFICATION
Please check the box below if you have applied for,
and are awaiting receipt of, your Taxpayer
Identification Number. [ ]
REQUEST FOR (1) The number shown on this form is my correct
TAXPAYER Taxpayer Identification Number (or I am waiting
IDENTIFICATION for a number to be issued to me) and
NUMBER AND (2) I am not subject to backup withholding either
CERTIFICATION because I have not been notified by the Internal
Revenue Service ("IRS") that I am subject to
backup withholding as a result of failure to
report all interest or dividends, or the IRS has
notified me that I am no longer subject to backup
withholding.
(PLEASE REFER TO Certificate Instructions--You may cross out item (2)
THE GUIDELINES FOR in Part 2 above if you have been notified by the IRS
CERTIFICATION OF that you are subject to backup withholding because of
TAXPAYER underreporting interest or dividends on your tax
IDENTIFICATION return. However, if after being notified by the IRS
NUMBER ON that you were subject to backup withholding you
SUBSTITUTE FORM W- received another notification from the IRS stating
9) that you are no longer subject to backup withholding,
do not cross out item (2).
SIGNATURE: ____________________________________ DATE:
- --------------------------------------------------------------------------------
PART 3--CERTIFICATION FOR FOREIGN RECORD HOLDERS
Under penalties of perjury, I certify that I am not a United States citizen
or resident (or I am signing for a foreign corporation, partnership, estate
or trust).
SIGNATURE: __________________________________________________________ DATE:
- --------------------------------------------------------------------------------
PART 4--____________________________________________________________________
Individual/Sole Proprietor [ ] Corporation [ ]
Partnership [ ] Other [ ] (please specify)
IF YOU CHECKED THE BOX IN PART 2 OF THE SUBSTITUTE FORM W-9, YOU MUST SIGN AND
DATE THE FOLLOWING CERTIFICATION:
CERTIFICATION OF PAYEE AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify, under penalties of perjury, that a Taxpayer Identification Number
has not been issued to me, and that I mailed or delivered an application to
receive a Taxpayer Identification Number to the appropriate IRS Center or
Social Security Administration Office (or I intend to mail or deliver an
application in the near future). I understand that if I do not provide a
Taxpayer Identification Number to the payer, 31% of all payments made pursuant
to the merger shall be retained until I provide a Taxpayer Identification
Number to the payer and that, if I do not provide my Taxpayer Identification
Number within 60 days, such retained amounts shall be remitted to the IRS as
backup withholding and 31% of all reportable payments made to me thereafter
will be withheld and remitted to the IRS until I provide a Taxpayer
Identification Number.
SIGNATURE: ______________________________________________________________ DATE:
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU.
12
<PAGE>
GENERAL INSTRUCTIONS
A.Special Conditions.
1. Time in which to elect. To be effective, a completed election form/letter
of transmittal and your Rainforest common stock certificates, a book entry
transfer of shares, or a guarantee of delivery for the shares covered by this
election form/letter of transmittal, must be received by the exchange agent, at
the address set forth on page 2, no later than 5:00 p.m., New York City time,
on , 2000 (the "Election Deadline"). If the merger is approved and
thereafter completed, and if the exchange agent has not received a properly
completed election form/letter of transmittal prior to the Election Deadline,
you will receive merger consideration pursuant to the proration provisions in
the merger agreement as calculated by the exchange agent, as more fully
described in "THE MERGER--Structure of the Merger and Conversion of Rainforest
Common Stock" in the Proxy Statement/Prospectus. See General Instruction C.
2. Revocation of election. An election may be revoked by the person who
submitted the election form/letter of transmittal to the exchange agent by
written notice to the exchange agent, or by withdrawal of the shares of
Rainforest common stock deposited by such person with the exchange agent, prior
to the Election Deadline. A holder may submit a new election form at the time
it revokes an earlier election or at any time after revoking an earlier
election but before the Election Deadline. If a new election is not made, the
holder will be deemed not to have made an election, and the exchange agent will
retain the stock certificate(s) tendered with the revoked election until the
time the shares are exchanged upon completion of the merger. If the merger
agreement is terminated, all election forms/letters of transmittal will
automatically be revoked and the stock certificates tendered will be promptly
returned to you.
B. Election Procedures.
A description of the election procedures is contained in the Proxy
Statement/Prospectus under "THE MERGER--Structure of the Merger and Conversion
of Rainforest Common Stock" and is fully set forth in the merger agreement. All
elections are subject to compliance with such procedures. In connection with
making any election, you should read carefully, among other matters, the
information contained in the Proxy Statement/Prospectus under "THE MERGER--
Certain Federal Income Tax Considerations." See also "RISK FACTORS--You Should
Consider the Tax Considerations Relating to the Merger" in the Proxy
Statement/Prospectus for a discussion of the possibility that the merger may be
a taxable transaction.
As a result of the election procedures, you may receive shares of Landry's
common stock and/or cash in amounts that vary from your election in Step 1. You
will not be able to change the number of shares or the amount of cash allocated
to you by the exchange agent pursuant to the election procedures.
C. Receipt of Shares or Cash.
Promptly after the effective time of the merger, Landry's will instruct the
exchange agent to mail certificate(s) or effect a single book entry
representing your shares of Landry's common stock and/or cash payments by check
to you (if you complete the "Wiring Instructions" in Step 2A of this form and
you are to receive at least $500,000, all of the cash will be sent to you by
wire transfer). If you fail to submit a properly completed election form/letter
of transmittal and stock certificates, a book entry transfer of shares, or a
guarantee of delivery for the shares of Rainforest common stock covered by the
election form/letter of transmittal by the Election Deadline as set forth
above, you will receive merger consideration pursuant to the proration
provisions in the merger agreement as calculated by the exchange agent pursuant
to the merger agreement, as more fully described in the accompanying Proxy
Statement/Prospectus, as soon as practicable after the certificate(s)
representing such shares of Rainforest common stock have been submitted.
No fractional shares of Landry's common stock will be issued in the merger.
Instead, each Rainforest shareholder that would otherwise be entitled to
receive a fractional share will receive an amount in cash equal to $5.23
multiplied by such fractional interest.
13
<PAGE>
D. General.
1. Execution and delivery. This election form/letter of transmittal must be
properly filled in, dated, and signed in all applicable places, and must be
delivered (together with all of the other required materials) to the exchange
agent at the address as set forth on page 2. The method of delivery of all
documents is at your option and risk, but if you choose to return your
materials by mail, we suggest you send them by registered mail, return receipt
requested, properly insured, using the enclosed envelope.
2. Signatures. The signature (or signatures, in the case of certificates
owned by two or more joint holders) on this form should correspond exactly with
the name(s) as written on the face of the certificate(s) submitted unless the
shares of Rainforest common stock described on this form have been assigned by
the registered holder(s), in which event this form should be signed in exactly
the same form as the name of the last transferee indicated on the transfers
attached to or endorsed on the certificates.
If this form is signed by a person or persons other than the registered
holder(s) of the certificates, the certificates must be endorsed or accompanied
by appropriate stock powers, in either case signed exactly as the name(s) of
the registered owner(s) appears on the certificates.
If this form or any stock certificate(s) or stock power(s) is signed by a
trustee, executor, administrator, guardian, officer of a corporation, attorney-
in-fact, or any other person acting in a representative or fiduciary capacity,
the person signing must give such person's full title in such capacity.
3. New certificates and checks in same name. If you are receiving any shares
of Landry's common stock, the stock certificate(s) representing such shares of
Landry's common stock and/or any check(s) in respect of shares of Rainforest
common stock shall be registered in, or payable to the order of, exactly the
same name(s) that appears on the certificate(s) representing such shares of
Rainforest common stock submitted with this form, unless the "Special Payment
Instructions" box in Step 2A above is completed. No endorsement of
certificate(s) or separate stock power(s) is required.
4. Guarantee of Signature. No signature guarantee is required on this form
if it is signed by the registered holder(s) of the shares of Rainforest common
stock surrendered under this form, and the shares of Landry's common stock
and/or the check are to be issued and/or payable to the record holder(s)
without any change or correction in the name of the record holder(s). In all
other cases, all signatures on this form must be guaranteed. All signatures
required to be guaranteed must be guaranteed by a member firm of a registered
national securities exchange or of the NASD, Inc., or a commercial bank or
trust company in the United States. Public notaries cannot execute acceptable
guarantees of signatures.
5. Miscellaneous. A single check, or wire transfer, and/or stock
certificates or a single book entry representing shares of Landry's common
stock to be received will be issued to you unless you have instructed us
otherwise in this form.
All questions with respect to this form (including, without limitation,
questions relating to the timeliness or effectiveness of revocation or any
election and computations as to any adjustments) will be determined by the
exchange agent, which determination shall be conclusive and binding.
6. Backup federal income tax withholding and Substitute Form W-9. Under the
"backup withholding" provisions of U.S. federal income tax law, any payments
made to you pursuant to the merger may be subject to backup withholding of 31%.
To prevent backup withholding, Rainforest shareholders must complete and sign
the Substitute Form W-9 included in Step 3 of this form and either: (a) provide
your correct taxpayer identification number ("TIN") and certify, under
penalties of perjury, that the TIN provided is correct (or that you are
awaiting a TIN), and that (i) you have not been notified by the IRS that you
have been subjected to backup withholding as a result of failure to report all
interest or dividends or (ii) the IRS has notified you that you are no longer
subject to backup withholding; or (b) provide an adequate basis for
14
<PAGE>
exemption. If the bottom portion of the Substitute Form W-9 is signed, the
exchange agent will retain 31% of cash payments made to you during the 60-day
period following the date of the Substitute Form W-9. If you furnish the
exchange agent with your TIN within 60 days of the date of the Substitute Form
W-9, the exchange agent will remit such amounts retained during the 60-day
period to you. If, however, you have not provided the exchange agent with your
TIN within such 60-day period, the exchange agent will remit such previously
retained amounts to the IRS as backup withholding. In general, if you are an
individual, the TIN is your social security number. If the certificates for
Rainforest common stock are registered in more than one name or are not in the
name of the actual owner, consult the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 (copies of which may be obtained
from the exchange agent) for additional guidance on which number to report. If
the exchange agent is not provided with the correct TIN or an adequate basis
for exemption, the holder may be subject to a $50 penalty imposed by the IRS
and backup withholding at a rate of 31%. Certain shareholders (including, among
others, all corporations and certain foreign individuals) are not subject to
these backup withholding and reporting requirements. In order to satisfy the
exchange agent that a foreign individual qualifies as an exempt recipient, such
holder must submit a statement (generally, IRS Form W-8), signed under
penalties of perjury, attesting to that individual's exempt status. A form for
such statements can be obtained from the exchange agent.
For further information concerning backup withholding and instructions for
completing the Substitute Form W-9 (including how to obtain a TIN if you do not
have one and how to complete the Substitute Form W-9 if stock is held in more
than one name), consult the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 (copies of which may be obtained
from the exchange agent).
Failure to complete the Substitute Form W-9 will not, by itself, cause your
shares of Rainforest common stock to be deemed invalidly tendered, but may
require the exchange agent to withhold 31% of the amount of any payments made
pursuant to the merger. Backup withholding is not an additional U.S. federal
income tax. Rather, the U.S. federal income tax liability of a person subject
to backup withholding will be reduced by the amount of tax withheld. If
withholding results in an overpayment of taxes, a refund may be obtained from
the IRS.
7. Transfer Taxes. If you completed the "Special Payment Instructions" box
above in Step 2A, you must pay the exchange agent any and all required transfer
or other taxes or must establish that such tax has been paid or is not
applicable.
8. Effect of Exercise of Dissenters' Rights. Under Minnesota law,
shareholders of Rainforest are eligible to exercise dissenters' rights in
connection with the merger. A shareholder that does not vote in favor of the
merger and complies with other necessary procedural requirements will have the
right to dissent from the merger and to seek appraisal of the fair value of
shares if the merger is completed. For a description of dissenters' rights and
the procedures to be followed to assert them, shareholders should review
Sections 302A.471 and 302A.473 of the Minnesota Business Corporation Act. See
"THE MERGER--Dissenters' Rights" and Annex C of the accompanying Proxy
Statement/Prospectus.
By delivery of this form to the exchange agent, a Rainforest shareholder
forever waives its right to dissent from the merger under applicable Minnesota
law and withdraws all written objections to the merger and/or demands for the
fair value of the shares of Rainforest common stock such shareholder owns.
15
<PAGE>
EXHIBIT 99.3
EMPLOYEE TERMINATION, CONSULTING
AND NON-COMPETITION AGREEMENT
Employee Termination, Consulting and Non-Competition Agreement (this
"Agreement"), dated as of February 9, 2000, by and between Landry's Seafood
---------
Restaurants, Inc., a Delaware corporation ("Purchaser"), and Lyle Berman (the
---------
"Consultant").
----------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Purchaser, LSR Acquisition Corp., a Delaware corporation (the
"Merger Sub"), and Rainforest Cafe, Inc., a Minnesota corporation (the
----------
"Company"), have entered into an Agreement and Plan of Merger dated as of
-------
February 9, 2000 (as the same may be amended from time to time, the "Merger
------
Agreement");
- ---------
WHEREAS, the Consultant desires to perform services for Purchaser in
accordance with and subject to the terms and conditions provided herein;
WHEREAS, the Consultant desires to be bound by the noncompetition,
nonsolicitation, confidentiality and other terms and provisions contained in
this Agreement; and
WHEREAS, the Consultant acknowledges that Purchaser would not have
entered into the Merger Agreement absent the transactions contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants and agreements of the parties herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:
<PAGE>
ARTICLE I
CERTAIN MATTERS
Section 1.1 Effectiveness. This Agreement shall become effective
-------------
only upon consummation of the Merger at the Effective Time (as such capitalized
terms are defined in the Merger Agreement). If the Merger Agreement is
terminated for any reason, then this Agreement shall terminate and be of no
force or effect.
Section 1.2 Forfeiture of Company Option. Consultant agrees that, in
----------------------------
consideration of compensation received hereunder, any and all Company Options
(as defined in the Merger Agreement) beneficially owned by the Consultant shall
be forfeited as of the Effective Time and the Consultant shall have no further
rights with respect to such Company Options.
Section 1.3 Compensation and Related Matters.
--------------------------------
(a) Consulting Fee. In consideration of the covenants of the
--------------
Consultant contained in this Agreement, Purchaser shall pay to the Consultant
(i) a one-time fee equal to one million four hundred thousand dollars
($1,400,000) at the Closing (as such term is defined in the Merger Agreement)
and (ii) a one-time fee in an amount equal to one hundred thousand dollars
($100,000) on the day which is ninety-days following the Closing Date.
(b) Business Expenses. The Consultant will be reimbursed by
-----------------
Purchaser for all ordinary and reasonable business expenses incurred by him in
connection with his performance of consulting services hereunder upon submission
by the Consultant of receipts and other documentation as may be requested by
Purchaser.
Section 1.4 Termination of Employment. Effective as of the Effective
-------------------------
Time, the Consultant acknowledges and agrees that his employment with the
Company shall be terminated, and the Company shall not owe Consultant any
monies, securities, severance payments or other consideration with respect to
his terminated employment (other than amounts payable under this Agreement).
2
<PAGE>
ARTICLE II
CONSULTING
Section 2.1 Engagement as Consultant. Purchaser hereby agrees to
------------------------
engage the Consultant, and the Consultant hereby agrees to perform services for
Purchaser, on the terms and conditions set forth herein.
Section 2.2 Term. The term (the "Term") of the covenants contained
---- ----
in Article II of this Agreement is for the twenty-four month period commencing
on the Effective Time, subject to earlier termination pursuant hereto.
Section 2.3 Duties and Reporting Relationship. From time to time
---------------------------------
during the Term, the Consultant shall perform such services relating to the
business of Purchaser as the Consultant and the President of the Purchaser (or
his designee) shall mutually agree. The Consultant shall in no event be required
to provide more than ten (10) hours per week of consulting services to Purchaser
for the first three months of the Term, and no more than twenty (20) hours per
month of consulting services to Purchaser thereafter, except in each case as
agreed to by the Consultant. The scheduling of such time shall be at the
Consultant's sole discretion. Except as provided in Article IV hereof, Purchaser
acknowledges that the Consultant is permitted to pursue other activities,
whether of a personal or business nature, and, accordingly, may not always be
immediately available to Purchaser.
Section 2.4 Place of Performance. The Consultant shall perform his
--------------------
duties and conduct his business at such locations as are reasonably acceptable
to him; provided, however, that, as mutually agreed, the Consultant will be
-------- -------
available to travel domestically to meet from time to time with representatives
of Purchaser.
3
<PAGE>
ARTICLE III
TRANSITION MATTERS
Section 3.1 Transition Matters. The Consultant shall render such
------------------
services to Purchaser as the Consultant and the President of the Purchaser (or
his designee) shall mutually agree with respect to (i) Purchaser and Company
business matters relating to the transition period prior to and following the
Merger and (ii) integration of the business of the Company with the business of
Purchaser.
ARTICLE IV
NON-COMPETITION
Section 4.1 Reasonableness of Provisions.
----------------------------
(a) The Consultant acknowledges and agrees that the provisions
contained in Article IV of this Agreement are reasonable with respect to their
duration, geographical area and scope. Without limiting the generality of the
foregoing, the Consultant further acknowledges and agrees that any and all of
the provisions of Article IV of this Agreement are reasonable and necessary to
protect the legitimate interests of the Purchaser. For purposes of this
Article IV only, the term "Purchaser" shall mean any and all of Purchaser and
---------
its subsidiaries from time to time (including, without limitation, the Surviving
Corporation (as such term is defined in the Merger Agreement) from and after the
Effective Time).
(b) The Consultant acknowledges and agrees that the food service
and theme restaurant business of the Purchaser (as such business is conducted as
of the date of this Agreement and may be conducted from time to time in the
future, the "Business") is intensely competitive and that the Consultant has had
--------
access to, has and may in the future have knowledge of confidential information
of the Purchaser, including, but not limited to, the identity of the Purchaser's
franchisees and other persons with whom Purchaser has business relationships,
the identity of the representatives of such persons with whom the Purchaser has
dealt, information concerning the creation or
4
<PAGE>
development of products offered by Purchaser, demographic and other information
related to actual and targeted customers of Purchaser, computer software
applications and other programs, personnel information, intellectual property
and other trade secrets (collectively, the "Confidential Information").
------------------------
(c) The Consultant acknowledges and agrees that the direct or
indirect disclosure by the Consultant of any Confidential Information to
existing or potential competitors of the Purchaser or the Business would place
the Purchaser at a competitive disadvantage and would do serious damage,
monetary and otherwise, to the Purchaser and the Business.
(d) The Consultant acknowledges and agrees that the Consultant's
engaging in any of the activities prohibited by this Agreement may constitute
improper appropriation or use of the Confidential Information or both. The
Consultant acknowledges the trade secret status of the Confidential Information
and that the Confidential Information constitutes a protectible business
interest of Purchaser.
Section 4.2 Noncompetition.
--------------
(a) During the Restricted Period, the Consultant shall not
(either directly or indirectly, through Representatives or otherwise), anywhere
in the world, engage in, invest in, own, manage, operate, finance, control, or
participate in the ownership, management, operation, financing, or control of,
be associated with as an officer, employee, partner, director or otherwise with,
or aid or assist any other person in the conduct of, any restaurant, food
service or restaurant business (i) with an environmental, jungle, forest,
zoological, animal (including living, mannequin or robotic animals) or aquarium
theme, (ii) with a name, logo, trade dress or other Company Intellectual
Property (as such term is defined in the Merger Agreement) used by, or similar
to the name, logo, trade dress or other Company Intellectual Property of, the
Company (including, without limitation, the "Rainforest Cafe" name, logo, trade
dress and other Company Intellectual Property), or (iii) located at a theme park
owned, managed, leased or operated in whole or in part by Disney or any one or
more of its subsidiaries; provided, however, that notwithstanding anything to
-------- -------
the contrary in this Section
5
<PAGE>
4.2(a), the Consultant may purchase or otherwise acquire up to ten percent (10%)
of any class of securities of any person (but without otherwise participating in
the activities of such person) if such securities are listed on any national
securities exchange or NASDAQ.
(b) During the Restricted Period, the Consultant shall not
(either directly or indirectly, through Representatives or otherwise), engage
in, invest in, own, manage, operate, finance, control, or participate in the
ownership, management, operation, financing, or control of, be associated with
as an officer, employee, partner, director or otherwise with, or aid or assist
any other person in the conduct of, any restaurant, food service or restaurant
business (i) within a two mile radius of any Rainforest Cafe identified on
Exhibit A hereto during the period from and after the date hereof through to and
- ---------
including the second anniversary of the Closing Date and (ii) within a one mile
radius of any Rainforest Cafe identified on Exhibit A hereto during the period
---------
after the second anniversary of the Closing Date through to and including the
fifth anniversary of the Closing Date; provided, however, that notwithstanding
-------- -------
anything to the contrary in this Section 4.2(b), (A) the Consultant may purchase
or otherwise acquire up to ten percent (10%) of any class of securities of any
person (but without otherwise participating in the activities of such person) if
such securities are listed on any national securities exchange or NASDAQ, (B)
the Consultant's involvement in any manner with the "Redstone Grill" restaurant
concept within the forementioned radius with respect to the Mall of America
shall not be deemed to be a violation of this Section 4.2(b), and (C) the
Consultant may engage in, invest in, own, manage, operate, finance, control, or
participate in the ownership, management, operation, financing, or control of,
any food service or restaurant business (1) which has a restaurant inside the
applicable forementioned radius and which either (I) has been in operations for
at least twelve months at the time of his involvement or (II) does not
constitute the primary asset of such food service or restaurant business
(provided further that the exclusions contained in clauses (C)(1)(I) and
(C)(1)(II) shall not be available to Consultant with respect to any restaurant,
food service or restaurant business located at a theme park owned, managed,
leased or operated in whole or in part by Disney or any one or more of its
subsidiaries), (2) which is
6
<PAGE>
located on property currently owned by Lakes Gaming Inc. in the vicinity of the
MGM Grand Hotel in Las Vegas, Nevada, or (3) which is located in a casino
managed by Lakes Gaming Inc.
(c) Notwithstanding anything to the contrary in this
Section 4.2, the Consultant shall not be deemed to be in violation of this
Section 4.2 solely by reason of (i) Consultant's equity ownership in Park Place
Entertainment, Inc. ("Park Place") or (ii) Consultant's serving as a member of
the Board of Directors of Park Place, which, in the case of either clause (i) or
(ii), causes Consultant to have violated this Agreement by reason of acts
undertaken by Park Place and its affiliates; provided, however, that all times
-------- -------
Consultant shall not propose in any manner, directly or indirectly, that Park
Place or any of its affiliates take any action which would have otherwise
violated Section 4.2(a) or 4.2(b).
Section 4.3 No Disparagement or Communication. Consultant shall not
---------------------------------
make, or cause to be made, any statement, observation or opinion, or communicate
any information (whether oral or written) to the press, media or any third
party, that (i) disparages the reputation or business of Purchaser, the Merger
or the other transactions contemplated by the Merger Agreement, or (ii)
discusses or otherwise relates to the Rainforest Cafe concept, its creation, or
the historical or ongoing business of the Company or Rainforest Cafe, or new
restaurant openings; provided, however, that nothing in clause (ii) of this
-------- -------
Section 4.3 shall prohibit Consultant from making factual statements relating to
the Company or Rainforest Cafe with respect to the period of time between its
creation and the Merger. In the event that the Consultant is questioned, or is
asked to comment or respond to a statement or inquiry from any press or media
which relates, directly or indirectly, to business activities of the Company or
Rainforest Cafe or the opening of a new restaurant, then Consultant shall
unequivocally state at the outset of any such interaction that he is no longer
employed by the Company and that all inquiries relating to the Company or
Rainforest Cafe should be referred to Purchaser.
7
<PAGE>
Section 4.4 Confidentiality.
---------------
(a) Except as and only to the extent set forth in Section 4.4(b)
hereof, the Consultant shall, and shall cause the Control Representatives of
such Consultant to, and shall use his reasonable best efforts to ensure that the
Other Representatives of such Consultant shall, hold in strict confidence, and
not (directly or indirectly) make known, or disclose, furnish or otherwise make
available to any person or business, any of the Confidential Information.
(b) Notwithstanding Section 4.4(a) hereof:
(i) the Consultant shall not have any obligation under
Section 4.4(a) with respect to, and only to the extent that, any
Confidential Information becomes generally known or is publicly disclosed
or publicly available, in each case, through disclosure other than by the
Consultant or the Representatives of such Consultant; and
(ii) in the event that the Consultant or any of its
Representatives are requested or required (by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand, any investigation by any Governmental Authority (as
defined in the Merger Agreement) or arbitration tribunal or otherwise) to
disclose any of the Confidential Information, the Consultant shall, to the
extent permitted under law, notify the Purchaser promptly orally and in
writing so that the Purchaser may seek a protective order or other
appropriate remedy. In such an event, the Consultant (on its own behalf and
on behalf of each of the Representatives of such Consultant) (x) agrees
that only such portion of the Confidential Information shall be disclosed
which is legally required to be so disclosed or which the Consultant or the
Representative of such Consultant is advised by counsel as being reasonably
likely to be legally required to be so disclosed and (y) shall exercise
reasonable best efforts to obtain reliable assurance that
8
<PAGE>
confidential treatment will be accorded such disclosed Confidential
Information.
Section 4.5 Nonsolicitation.
---------------
(a) During the Restricted Period, the Consultant shall not
(either directly or indirectly through Control Representatives, circulars,
advertisements or otherwise), whether on behalf of the Consultant or on behalf
of any other person:
(i) solicit (or cause, or authorize, to be solicited),
divert or otherwise attempt to obtain the business of any person who is, or
has at any time within three (3) years prior to the date of such action
been, a franchisee, licensee or business relation of the Purchaser for any
purpose which is competitive with the Business;
(ii) disturb or attempt to disturb in any adverse respect
any business relationship between any person and the Purchaser;
(iii) seek or attempt to persuade, induce or encourage any
director, officer, employee, consultant, advisor or other agent of the
Purchaser to discontinue his or her status or employment therewith or to
become employed or otherwise engaged in a business of the same or of a
similar nature to the Business;
(iv) solicit or employ, or otherwise hire or engage as an
employee, independent contractor, consultant, advisor or otherwise, any
person employed by, under contract with, providing services to, or
otherwise engaged by Purchaser; and
(v) solicit or employ, or otherwise hire or engage as an
employee, independent contractor, consultant, advisor or otherwise, any
person at any time within six (6) months following the date of cessation of
employment of such person or the termination of
9
<PAGE>
such person's other status, as the case may be, with the Purchaser.
Section 4.6 Additional Acknowledgments and Agreements. In addition
-----------------------------------------
to the foregoing, Consultant acknowledges and agrees that he will not make any
use whatsoever of any Company Intellectual Property for any reason whatsoever.
Consultant also acknowledges and agrees that he has no right, title, or interest
in, or to any Company Intellectual Property. Notwithstanding the foregoing, to
the extent that Consultant created any Company Intellectual Property, Consultant
hereby assigns to Company all of his right, title and interest (if any) in, to
and under, all Company Intellectual Property retroactive to the date he created
such Company Intellectual Property.
Section 4.7 Term.
----
(a) Unless otherwise expressly limited by the terms hereof, all
covenants contained in Sections 4.3, 4.4 and 4.6 of this Agreement shall remain
in effect and survive indefinitely.
(b) For purposes of Article IV of this Agreement, the term
"Restricted Period" means the period commencing on the Closing Date through to
-----------------
the fifth annual anniversary of the Closing Date.
Section 4.8 Definitions. For purposes of Article IV of this
-----------
Agreement, the following terms shall have the following meanings:
(a) "affiliate" of any person means another person that
---------
directly or indirectly controls, is controlled by, or is under common control
with, such first person, where "control" means the possession, directly or
-------
indirectly, of the power to direct or cause the direction of the management
policies of a person, whether through the ownership of voting securities, by
contract, as trustee or executor, or otherwise. For the purposes of this
Agreement, the term "affiliated" has a meaning correlative to the foregoing;
----------
(b) "Control Representative" of any person means the
----------------------
Representatives of such person which are
10
<PAGE>
controlled (as such term is defined in the definition of "affiliate" above) by
such person;
(c) "Other Representative" of any person means all
--------------------
Representatives of such person other than the Control Representatives of such
person;
(d) "person" means any natural person, firm, partnership,
------
association, corporation, company, limited liability company, unincorporated
organization, joint venture, trust, self-regulatory organization, business
trust, Governmental Authority or other entity;
(e) "Representative" of any person means such person's
--------------
subsidiaries and affiliates and the directors, officers, employees, agents,
affiliates, consultants, advisors and other representatives of such person and
each of such person's subsidiaries and affiliates; and
(f) "subsidiary" of any party means (x) a corporation, a
----------
majority of the voting or capital stock of which is as of the time in question
directly or indirectly owned by such party and (y) any other partnership, joint
venture, association, joint stock company, trust, unincorporated organization or
similar entity, in which such party, directly or indirectly, owns a majority of
the equity interest thereof or has the power to elect or direct the election of
a majority of the members of the governing body of such entity or otherwise has
control over such entity (e.g., as the managing partner of a partnership).
----
ARTICLE V
MISCELLANEOUS
Section 5.1 Independent Contractor. During the term of this
----------------------
Agreement, the Consultant shall be an independent contractor and not an employee
of Purchaser.
Section 5.2 Successors; Binding Agreement. This Agreement and all
-----------------------------
rights of the parties hereunder shall inure to the benefit of and be enforceable
by each party's personal or legal representatives, executors,
11
<PAGE>
administrators, successors, heirs, distributees, devisees and legatees.
Section 5.3 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service to the
parties at the following addresses (or at such other addresses for a party as
shall be specified by the notice):
If to Purchaser:
Landry's Seafood Restaurants, Inc.
1400 Post Oak Blvd., Suite 1010
Houston, Texas 77056
Attention: Steven L. Scheinthal
Telephone No.: (713) 850-1010
Telecopier No.: (713) 623-4702
If to the Consultant:
Lyle Berman
433 Bushaway
Wayzata, Minnesota 55391
Telephone No.: (612) 473-5533
Section 5.4 Specific Performance. The Consultant recognizes and
--------------------
agrees that if for any reason any of the provisions of this Agreement are not
performed in accordance with their specific terms or are otherwise breached,
immediate and irreparable harm or injury would be caused to the Purchaser for
which money damages would not be an adequate remedy. Accordingly, the Consultant
agrees that, in addition to any other available remedies, the Purchaser shall be
entitled to an injunction restraining any violation or threatened violation of
the provisions of this Agreement without the necessity of posting a bond or
other form of security. In the event that any action should be brought in equity
to enforce the provisions of this Agreement, the Consultant shall not allege,
and the Consultant hereby waives the defense, that there is an adequate remedy
at law.
12
<PAGE>
Section 5.5 Severability; Modification. If any provision(s) of this
--------------------------
Agreement shall for any reason be invalid or unenforceable in any jurisdiction,
such provision(s) shall be ineffective in such jurisdiction to the extent of
such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions hereof, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction. Without limiting the
generality of the immediately preceding sentence, in the event that a court of
competent jurisdiction determines that the provisions of this Agreement would be
unenforceable as written because they cover too extensive a geographic area, too
broad a range of activities, or too long a period of time, or otherwise, then
such provisions will automatically be modified to cover the maximum geographic
area, range of activities, and period of time as may be enforceable, and, in
addition, such court is hereby expressly authorized so to modify this Agreement
and to enforce it as so modified.
Section 5.6 Interpretation. The parties have participated jointly in
--------------
the negotiation and drafting of this Agreement. Consequently, in the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
Section 5.7 Assignment. Neither this Agreement, nor any rights,
----------
interests or obligations hereunder, may be directly or indirectly assigned,
delegated or transferred by any party to this Agreement, in whole or in part, to
any other person without the prior written consent of the other party hereto;
provided, however, that the Purchaser may freely assign (whether by operation of
- -------- -------
law or otherwise) all or a portion of its rights under this Agreement.
Section 5.8 Miscellaneous. No provisions of this Agreement may be
-------------
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the parties hereto. No waiver by a party hereto
at any time of any breach by the other
13
<PAGE>
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by the parties
which are not set forth expressly in this Agreement. This Agreement shall be
governed and construed in accordance with the laws of the State in which the
Purchaser is incorporated on the date hereof, without giving effect to the
principles of conflicts of law thereunder or of any other jurisdiction.
Section 5.9 Contents of Agreement. This Agreement sets forth the
---------------------
entire agreement of the parties hereto with respect to the matters contemplated
hereby. This Agreement supersedes all prior agreements and understandings among
the parties hereto relating to the subject matter hereof.
Section 5.10 Section Headings and Gender. All Section headings and
---------------------------
the use of a particular gender are for convenience only and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 5.11 Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be deemed to be an original but both of which
together will constitute one and the same instrument.
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Employee
Termination, Consulting and Non-Competition Agreement as of the date and year
first above written.
/s/ Lyle Berman
---------------------------
Lyle Berman
LANDRY'S SEAFOOD
RESTAURANTS, INC.
By: /s/ Tilman J. Fertitta
-----------------------
Name: Tilman J. Fertitta
Title: Chairman, President and
Chief Executive Officer
<PAGE>
EXHIBIT 99.4
EMPLOYEE TERMINATION, CONSULTING
AND NON-COMPETITION AGREEMENT
Employee Termination, Consulting and Non-Competition Agreement (this
"Agreement"), dated as of February 9, 2000, by and between Landry's Seafood
---------
Restaurants, Inc., a Delaware corporation ("Purchaser"), and Kenneth Brimmer
---------
(the "Consultant").
----------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Purchaser, LSR Acquisition Corp., a Delaware corporation (the
"Merger Sub"), and Rainforest Cafe, Inc., a Minnesota corporation (the
----------
"Company"), have entered into an Agreement and Plan of Merger dated as of
-------
February 9, 2000 (as the same may be amended from time to time, the "Merger
------
Agreement");
- ---------
WHEREAS, the Consultant desires to perform services for Purchaser in
accordance with and subject to the terms and conditions provided herein;
WHEREAS, the Consultant desires to be bound by the noncompetition,
nonsolicitation, confidentiality and other terms and provisions contained in
this Agreement; and
WHEREAS, the Consultant acknowledges that Purchaser would not have
entered into the Merger Agreement absent the transactions contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants and agreements of the parties herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:
<PAGE>
ARTICLE I
CERTAIN MATTERS
Section 1.1 Effectiveness. This Agreement shall become effective
-------------
only upon consummation of the Merger at the Effective Time (as such capitalized
terms are defined in the Merger Agreement). If the Merger Agreement is
terminated for any reason, then this Agreement shall terminate and be of no
force or effect.
Section 1.2 Forfeiture of Company Option. Consultant agrees that,
----------------------------
in consideration of compensation received hereunder, any and all Company Options
(as defined in the Merger Agreement) beneficially owned by the Consultant shall
be forfeited as of the Effective Time and the Consultant shall have no further
rights with respect to such Company Options.
Section 1.3 Compensation and Related Matters.
--------------------------------
(a) Consulting Fee. In consideration of the covenants of the
--------------
Consultant contained in this Agreement, Purchaser shall pay to the Consultant
(i) a one-time fee equal to one million four hundred thousand dollars
($1,400,000) at the Closing (as such term is defined in the Merger Agreement)
and (ii) a one-time fee in an amount equal to one hundred thousand dollars
($100,000) on the day which is ninety-days following the Closing Date.
(b) Business Expenses. The Consultant will be reimbursed by
-----------------
Purchaser for all ordinary and reasonable business expenses incurred by him in
connection with his performance of consulting services hereunder upon
submission by the Consultant of receipts and other documentation as may be
requested by Purchaser.
Section 1.4 Termination of Employment. Effective as of the
-------------------------
Effective Time, the Consultant acknowledges and agrees that his employment with
the Company shall be terminated, and the Company shall not owe Consultant any
monies, securities, severance payments or other consideration with respect to
his terminated employment (other than amounts payable under this Agreement).
2
<PAGE>
ARTICLE II
CONSULTING
Section 2.1 Engagement as Consultant. Purchaser hereby agrees to
------------------------
engage the Consultant, and the Consultant hereby agrees to perform services for
Purchaser, on the terms and conditions set forth herein.
Section 2.2 Term. The term (the "Term") of the covenants
---- ----
contained in Article II of this Agreement is for the twenty-four month period
commencing on the Effective Time, subject to earlier termination pursuant
hereto.
Section 2.3 Duties and Reporting Relationship. From time to time
---------------------------------
during the Term, the Consultant shall perform such services relating to the
business of Purchaser as the Consultant and the President of the Purchaser (or
his designee) shall mutually agree. The Consultant shall in no event be
required to provide more than ten (10) hours per week of consulting services to
Purchaser for the first three months of the Term, and no more than twenty (20)
hours per month of consulting services to Purchaser thereafter, except in each
case as agreed to by the Consultant. The scheduling of such time shall be at
the Consultant's sole discretion. Except as provided in Article IV hereof,
Purchaser acknowledges that the Consultant is permitted to pursue other
activities, whether of a personal or business nature, and, accordingly, may not
always be immediately available to Purchaser.
Section 2.4 Place of Performance. The Consultant shall perform his
--------------------
duties and conduct his business at such locations as are reasonably acceptable
to him; provided, however, that, as mutually agreed, the Consultant will be
-------- -------
available to travel domestically to meet from time to time with representatives
of Purchaser.
ARTICLE III
TRANSITION MATTERS
3
<PAGE>
Section 3.1 Transition Matters. The Consultant shall render such
------------------
services to Purchaser as the Consultant and the President of the Purchaser (or
his designee) shall mutually agree with respect to (i) Purchaser and Company
business matters relating to the transition period prior to and following the
Merger and (ii) integration of the business of the Company with the business of
Purchaser.
ARTICLE IV
NON-COMPETITION
Section 4.1 Reasonableness of Provisions.
----------------------------
(a) The Consultant acknowledges and agrees that the provisions
contained in Article IV of this Agreement are reasonable with respect to their
duration, geographical area and scope. Without limiting the generality of the
foregoing, the Consultant further acknowledges and agrees that any and all of
the provisions of Article IV of this Agreement are reasonable and necessary to
protect the legitimate interests of the Purchaser. For purposes of this Article
IV only, the term "Purchaser" shall mean any and all of Purchaser and its
---------
subsidiaries from time to time (including, without limitation, the Surviving
Corporation (as such term is defined in the Merger Agreement) from and after the
Effective Time).
(b) The Consultant acknowledges and agrees that the food service
and theme restaurant business of the Purchaser (as such business is conducted
as of the date of this Agreement and may be conducted from time to time in the
future, the "Business") is intensely competitive and that the Consultant has had
--------
access to, has and may in the future have knowledge of confidential information
of the Purchaser, including, but not limited to, the identity of the Purchaser's
franchisees and other persons with whom Purchaser has business relationships,
the identity of the representatives of such persons with whom the Purchaser has
dealt, information concerning the creation or development of products offered by
Purchaser, demographic and other information related to actual and targeted
customers of Purchaser, computer software applications and other programs,
personnel information, intel-
4
<PAGE>
lectual property and other trade secrets (collectively, the "Confidential
------------
Information").
- ------------
(c) The Consultant acknowledges and agrees that the direct or
indirect disclosure by the Consultant of any Confidential Information to
existing or potential competitors of the Purchaser or the Business would place
the Purchaser at a competitive disadvantage and would do serious damage,
monetary and otherwise, to the Purchaser and the Business.
(d) The Consultant acknowledges and agrees that the Consultant's
engaging in any of the activities prohibited by this Agreement may constitute
improper appropriation or use of the Confidential Information or both. The
Consultant acknowledges the trade secret status of the Confidential Information
and that the Confidential Information constitutes a protectible business
interest of Purchaser.
Section 4.2 Noncompetition.
--------------
(a) During the Restricted Period, the Consultant shall not
(either directly or indirectly, through Representatives or otherwise), anywhere
in the world, engage in, invest in, own, manage, operate, finance, control, or
participate in the ownership, management, operation, financing, or control of,
be associated with as an officer, employee, partner, director or otherwise
with, or aid or assist any other person in the conduct of, any restaurant, food
service or restaurant business (i) with an environmental, jungle, forest,
zoological, animal (including living, mannequin or robotic animals) or aquarium
theme, (ii) with a name, logo, trade dress or other Company Intellectual
Property (as such term is defined in the Merger Agreement) used by, or similar
to the name, logo, trade dress or other Company Intellectual Property of, the
Company (including, without limitation, the "Rainforest Cafe" name, logo, trade
dress and other Company Intellectual Property), or (iii) located at a theme
park owned, managed, leased or operated in whole or in part by Disney or any one
or more of its subsidiaries; provided, however, that notwithstanding anything to
-------- -------
the contrary in this Section 4.2(a), the Consultant may purchase or otherwise
acquire up to ten percent (10%) of any class of securities of any person (but
without otherwise participating in the activities of
5
<PAGE>
such person) if such securities are listed on any national securities exchange
or NASDAQ.
(b) During the Restricted Period, the Consultant shall not (either
directly or indirectly, through Representatives or otherwise), engage in, invest
in, own, manage, operate, finance, control, or participate in the ownership,
management, operation, financing, or control of, be associated with as an
officer, employee, partner, director or otherwise with, or aid or assist any
other person in the conduct of, any restaurant, food service or restaurant
business (i) within a two mile radius of any Rainforest Cafe identified on
Exhibit A hereto during the period from and after the date hereof through to and
- ---------
including the second anniversary of the Closing Date and (ii) within a one mile
radius of any Rainforest Cafe identified on Exhibit A hereto during the period
---------
after the second anniversary of the Closing Date through to and including the
fifth anniversary of the Closing Date; provided, however, that notwithstanding
-------- -------
anything to the contrary in this Section 4.2(b), (A) the Consultant may purchase
or otherwise acquire up to ten percent (10%) of any class of securities of any
person (but without otherwise participating in the activities of such person) if
such securities are listed on any national securities exchange or NASDAQ, (B)
the Consultant's involvement in any manner with the "Redstone Grill" restaurant
concept within the forementioned radius with respect to the Mall of America
shall not be deemed to be a violation of this Section 4.2(b), and (C) the
Consultant may engage in, invest in, own, manage, operate, finance, control, or
participate in the ownership, management, operation, financing, or control of,
any food service or restaurant business (1) which has a restaurant inside the
applicable forementioned radius and which either (I) has been in operations for
at least twelve months at the time of his involvement or (II) does not
constitute the primary asset of such food service or restaurant business
(provided further that the exclusions contained in clauses (C)(1)(I) and
(C)(1)(II) shall not be available to Consultant with respect to any restaurant,
food service or restaurant business located at a theme park owned, managed,
leased or operated in whole or in part by Disney or any one or more of its
subsidiaries), (2) which is located on property currently owned by Lakes Gaming
Inc. in the vicinity of the MGM Grand Hotel in Las Vegas,
6
<PAGE>
Nevada, or (3) which is located in a casino managed by Lakes Gaming Inc.
Section 4.3 No Disparagement or Communication. Consultant shall
---------------------------------
not make, or cause to be made, any statement, observation or opinion, or
communicate any information (whether oral or written) to the press, media or any
third party, that (i) disparages the reputation or business of Purchaser, the
Merger or the other transactions contemplated by the Merger Agreement, or (ii)
discusses or otherwise relates to the Rainforest Cafe concept, its creation, or
the historical or ongoing business of the Company or Rainforest Cafe, or new
restaurant openings; provided, however, that nothing in clause (ii) of this
-------- -------
Section 4.3 shall prohibit Consultant from making factual statements relating to
the Company or Rainforest Cafe with respect to the period of time between its
creation and the Merger. In the event that the Consultant is questioned, or is
asked to comment or respond to a statement or inquiry from any press or media
which relates, directly or indirectly, to business activities of the Company or
Rainforest Cafe or the opening of a new restaurant, then Consultant shall
unequivocally state at the outset of any such interaction that he is no longer
employed by the Company and that all inquiries relating to the Company or
Rainforest Cafe should be referred to Purchaser.
Section 4.4 Confidentiality.
---------------
(a) Except as and only to the extent set forth in Section 4.4(b)
hereof, the Consultant shall, and shall cause the Control Representatives of
such Consultant to, and shall use his reasonable best efforts to ensure that the
Other Representatives of such Consultant shall, hold in strict confidence, and
not (directly or indirectly) make known, or disclose, furnish or otherwise make
available to any person or business, any of the Confidential Information.
(b) Notwithstanding Section 4.4(a) hereof:
(i) the Consultant shall not have any
obligation under Section 4.4(a) with respect to, and only to
the extent that, any
7
<PAGE>
Confidential Information becomes generally known or is publicly disclosed
or publicly available, in each case, through disclosure other than by the
Consultant or the Representatives of such Consultant; and
(ii) in the event that the Consultant or any of its
Representatives are requested or required (by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand, any investigation by any Governmental Authority (as
defined in the Merger Agreement) or arbitration tribunal or otherwise) to
disclose any of the Confidential Information, the Consultant shall, to the
extent permitted under law, notify the Purchaser promptly orally and in
writing so that the Purchaser may seek a protective order or other
appropriate remedy. In such an event, the Consultant (on its own behalf and
on behalf of each of the Representatives of such Consultant) (x) agrees
that only such portion of the Confidential Information shall be disclosed
which is legally required to be so disclosed or which the Consultant or the
Representative of such Consultant is advised by counsel as being reasonably
likely to be legally required to be so disclosed and (y) shall exercise
reasonable best efforts to obtain reliable assurance that confidential
treatment will be accorded such disclosed Confidential Information.
Section 4.5 Nonsolicitation.
---------------
(a) During the Restricted Period, the Consultant shall not
(either directly or indirectly through Control Representatives, circulars,
advertisements or otherwise), whether on behalf of the Consultant or on behalf
of any other person:
(i) solicit (or cause, or authorize, to be solicited),
divert or otherwise attempt to obtain the business of any person who is, or
has at any time within three (3) years prior to the date of such action
been, a franchisee, licensee or business
8
<PAGE>
relation of the Purchaser for any purpose which is competitive with the
Business;
(ii) disturb or attempt to disturb in any adverse respect
any business relationship between any person and the Purchaser;
(iii) seek or attempt to persuade, induce or encourage any
director, officer, employee, consultant, advisor or other agent of the
Purchaser to discontinue his or her status or employment therewith or to
become employed or otherwise engaged in a business of the same or of a
similar nature to the Business;
(iv) solicit or employ, or otherwise hire or engage as an
employee, independent contractor, consultant, advisor or otherwise, any
person employed by, under contract with, providing services to, or
otherwise engaged by Purchaser; and
(v) solicit or employ, or otherwise hire or engage as an
employee, independent contractor, consultant, advisor or otherwise, any
person at any time within six (6) months following the date of cessation of
employment of such person or the termination of such person's other status,
as the case may be, with the Purchaser.
Section 4.6 Additional Acknowledgments and Agreements. In addition
-----------------------------------------
to the foregoing, Consultant acknowledges acknowledges and agrees that he will
not make any use whatsoever of any Company Intellectual Property for any reason
whatsoever. Consultant also acknowledges and agrees that he has no right, title,
or interest in, or to any Company Intellectual Property. Notwithstanding the
foregoing, to the extent that Consultant created any Company Intellectual
Property, Consultant hereby assigns to Company all of his right, title and
interest (if any) in, to and under, all Company Intellectual Property
retroactive to the date he created such Company Intellectual Property.
9
<PAGE>
Section 4.7 Term.
----
(a) Unless otherwise expressly limited by the terms hereof, all
covenants contained in Sections 4.3, 4.4 and 4.6 of this Agreement shall remain
in effect and survive indefinitely.
(b) For purposes of Article IV of this Agreement, the term
"Restricted Period" means the period commencing on the Closing Date hereof
-----------------
through to the fifth annual anniversary of the Closing Date.
Section 4.8 Definitions. For purposes of Article IV of this
-----------
Agreement, the following terms shall have the following meanings:
(a) "affiliate" of any person means another person that
---------
directly or indirectly controls, is controlled by, or is under common control
with, such first person, where "control" means the possession, directly or
-------
indirectly, of the power to direct or cause the direction of the management
policies of a person, whether through the ownership of voting securities, by
contract, as trustee or executor, or otherwise. For the purposes of this
Agreement, the term "affiliated" has a meaning correlative to the foregoing;
----------
(b) "Control Representative" of any person means the
----------------------
Representatives of such person which are controlled (as such term is defined in
the definition of "affiliate" above) by such person;
(c) "Other Representative" of any person means all
--------------------
Representatives of such person other than the Control Representatives of such
person;
(d) "person" means any natural person, firm, partnership,
------
association, corporation, company, limited liability company, unincorporated
organization, joint venture, trust, self-regulatory organization, business
trust, Governmental Authority or other entity;
(e) "Representative" of any person means such person's
--------------
subsidiaries and affiliates and the directors, officers, employees, agents,
affiliates, consultants, advisors and other representatives of such
10
<PAGE>
person and each of such person's subsidiaries and affiliates; and
(f) "subsidiary" of any party means (x) a corporation, a majority of
----------
the voting or capital stock of which is as of the time in question directly or
indirectly owned by such party and (y) any other partnership, joint venture,
association, joint stock company, trust, unincorporated organization or similar
entity, in which such party, directly or indirectly, owns a majority of the
equity interest thereof or has the power to elect or direct the election of a
majority of the members of the governing body of such entity or otherwise has
control over such entity (e.g., as the managing partner of a partnership).
----
ARTICLE V
MISCELLANEOUS
Section 5.1 Independent Contractor. During the term of this
----------------------
Agreement, the Consultant shall be an independent contractor and not an employee
of Purchaser.
Section 5.2 Successors; Binding Agreement. This Agreement and all
-----------------------------
rights of the parties hereunder shall inure to the benefit of and be enforceable
by each party's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
Section 5.3 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service to the
parties at the following addresses (or at such other addresses for a party as
shall be specified by the notice):
If to Purchaser:
Landry's Seafood Restaurants, Inc.
1400 Post Oak Blvd., Suite 1010
Houston, Texas 77056
Attention: Steven L. Scheinthal
Telephone No.: (713) 850-1010
11
<PAGE>
Telecopy No.: (713) 623-4702
If to the Consultant:
Kenneth Brimmer
11505 West Lakeview Lane
Minnetonka, Minnesota 55305
Telephone No.: (612) 544-5665
Section 5.4 Specific Performance. The Consultant recognizes and
--------------------
agrees that if for any reason any of the provisions of this Agreement are not
performed in accordance with their specific terms or are otherwise breached,
immediate and irreparable harm or injury would be caused to the Purchaser for
which money damages would not be an adequate remedy. Accordingly, the Consultant
agrees that, in addition to any other available remedies, the Purchaser shall be
entitled to an injunction restraining any violation or threatened violation of
the provisions of this Agreement without the necessity of posting a bond or
other form of security. In the event that any action should be brought in equity
to enforce the provisions of this Agreement, the Consultant shall not allege,
and the Consultant hereby waives the defense, that there is an adequate remedy
at law.
Section 5.5 Severability; Modification. If any provision(s) of this
--------------------------
Agreement shall for any reason be invalid or unenforceable in any jurisdiction,
such provision(s) shall be ineffective in such jurisdiction to the extent of
such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions hereof, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction. Without limiting the
generality of the immediately preceding sentence, in the event that a court of
competent jurisdiction determines that the provisions of this Agreement would be
unenforceable as written because they cover too extensive a geographic area, too
broad a range of activities, or too long a period of time, or otherwise, then
such provisions will automatically be modified to cover the maximum geographic
area, range of activities, and period of time as may be enforceable, and, in
addition, such court is hereby expressly authorized so to modify this Agreement
and to enforce it as so modified.
12
<PAGE>
Section 5.6 Interpretation. The parties have participated jointly in
--------------
the negotiation and drafting of this Agreement. Consequently, in the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
Section 5.7 Assignment. Neither this Agreement, nor any rights,
----------
interests or obligations hereunder, may be directly or indirectly assigned,
delegated or transferred by any party to this Agreement, in whole or in part, to
any other person without the prior written consent of the other party hereto;
provided, however, that the Purchaser may freely assign (whether by operation of
- -------- -------
law or otherwise) all or a portion of its rights under this Agreement.
Section 5.8 Miscellaneous. No provisions of this Agreement may be
-------------
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the parties hereto. No waiver by a party hereto
at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by the parties which are not set forth expressly in this
Agreement. This Agreement shall be governed and construed in accordance with
the laws of the State in which the Purchaser is incorporated on the date hereof,
without giving effect to the principles of conflicts of law thereunder or of any
other jurisdiction.
Section 5.9 Contents of Agreement. This Agreement sets forth the
---------------------
entire agreement of the parties hereto with respect to the matters contemplated
hereby. This Agreement supersedes all prior agreements and understandings among
the parties hereto relating to the subject matter hereof.
13
<PAGE>
Section 5.10 Section Headings and Gender. All Section headings and
---------------------------
the use of a particular gender are for convenience only and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 5.11 Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be deemed to be an original but both of which
together will constitute one and the same instrument.
14
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Employee
Termination, Consulting and Non-Competition Agreement as of the date and year
first above written.
/s/ Kenneth Brimmer
-----------------------------
Kenneth Brimmer
LANDRY'S SEAFOOD
RESTAURANTS, INC.
By: /s/ Tilman J. Fertitta
-------------------------
Name: Tilman J. Fertitta
Title: Chairman, President and
Chief Executive Officer
<PAGE>
EXHIBIT 99.5
EMPLOYEE TERMINATION, CONSULTING
AND NON-COMPETITION AGREEMENT
Employee Termination, Consulting and Non-Competition Agreement (this
"Agreement"), dated as of February 9, 2000, by and between Landry's Seafood
---------
Restaurants, Inc., a Delaware corporation ("Purchaser"), and Steven W. Schussler
---------
(the "Consultant").
----------
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Purchaser, LSR Acquisition Corp., a Delaware corporation (the
"Merger Sub"), and Rainforest Cafe, Inc., a Minnesota corporation (the
----------
"Company"), have entered into an Agreement and Plan of Merger dated as of
-------
February 9, 2000 (as the same may be amended from time to time, the "Merger
------
Agreement");
- ---------
WHEREAS, the Consultant desires to perform services for Purchaser in
accordance with and subject to the terms and conditions provided herein;
WHEREAS, the Consultant desires to be bound by the noncompetition,
nonsolicitation, confidentiality and other terms and provisions contained in
this Agreement; and
WHEREAS, the Consultant acknowledges that Purchaser would not have
entered into the Merger Agreement absent the transactions contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants and agreements of the parties herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:
<PAGE>
ARTICLE I
CERTAIN MATTERS
Section 1.1 Effectiveness. This Agreement shall become effective
-------------
only upon consummation of the Merger at the Effective Time (as such capitalized
terms are defined in the Merger Agreement). If the Merger Agreement is
terminated for any reason, then this Agreement shall terminate and be of no
force or effect.
Section 1.2 Forfeiture of Company Option. Consultant agrees that, in
----------------------------
consideration of compensation received hereunder, any and all Company Options
(as defined in the Merger Agreement) beneficially owned by the Consultant shall
be forfeited as of the Effective Time and the Consultant shall have no further
rights with respect to such Company Options; provided, however, that this
-------- -------
Section 1.2 shall not apply with respect to 76,500 Company Options which have an
exercise price less than the closing market price of shares of Company common
stock on NASDAQ on the last trading day immediately prior to the date hereof.
Section 1.3 Compensation and Related Matters.
--------------------------------
(a) Consulting Fee. In consideration of the covenants of the
--------------
Consultant contained in this Agreement, Purchaser shall pay to the Consultant
(i) a one-time fee equal to one million four hundred thousand dollars
($1,400,000) at the Closing (as such term is defined in the Merger Agreement)
and (ii) a one-time fee in an amount equal to one hundred thousand dollars
($100,000) on the day which is ninety-days following the Closing Date.
(b) Business Expenses. The Consultant will be reimbursed by
-----------------
Purchaser for all ordinary and reasonable business expenses incurred by him in
connection with his performance of consulting services hereunder upon submission
by the Consultant of receipts and other documentation as may be requested by
Purchaser.
Section 1.4 Setoff of Payments under this Agreement. Notwithstanding
---------------------------------------
anything to the contrary contained in this Agreement, any amounts payable by
Purchaser to the Consultant under this Agreement
2
<PAGE>
(including pursuant to Section 1.3 hereof) shall be offset (i) first, against
any and all amounts of interest due or owing to the Company by Consultant under
the Loan Agreement, and (ii) second, against any and all amounts of principal
outstanding under the Loan Agreement. For purposes of this Agreement, the term
"Loan Agreement" means the Secured Demand Note dated November 3, 1999, by
--------------
Consultant in favor of the Company, evidencing indebtedness in the amount of
$1,700,000.
Section 1.5 Termination of Employment. Effective as of the Effective
-------------------------
Time, the Consultant acknowledges and agrees that his employment with the
Company shall be terminated, and the Company shall not owe Consultant any
monies, securities, severance payments or other consideration with respect to
his terminated employment (other than as provided in the proviso to Section 1.2
hereof and other than amounts payable under this Agreement).
ARTICLE II
CONSULTING
Section 2.1 Engagement as Consultant. Purchaser hereby agrees to
------------------------
engage the Consultant, and the Consultant hereby agrees to perform services for
Purchaser, on the terms and conditions set forth herein.
Section 2.2 Term. The term (the "Term") of the covenants contained
---- ----
in Article II of this Agreement is for the twenty-four month period commencing
on the Effective Time, subject to earlier termination pursuant hereto.
Section 2.3 Duties and Reporting Relationship. From time to time
---------------------------------
during the Term, the Consultant shall perform such services relating to the
business of Purchaser as the Consultant and the President of the Purchaser (or
his designee) shall mutually agree. The Consultant shall in no event be required
to provide more than ten (10) hours per week of consulting services to Purchaser
for the first three months of the Term, and no more than twenty (20) hours per
month of consulting services to Purchaser thereafter, except in each case as
agreed to by the Consultant. The scheduling of such time shall be at the
Consultant's sole discretion. Except as provided in Article IV hereof, Purchaser
acknowledges
3
<PAGE>
that the Consultant is permitted to pursue other activities, whether of a
personal or business nature, and, accordingly, may not always be immediately
available to Purchaser.
Section 2.4 Place of Performance. The Consultant shall perform his
--------------------
duties and conduct his business at such locations as are reasonably acceptable
to him; provided, however, that, as mutually agreed, the Consultant will be
-------- -------
available to travel domestically to meet from time to time with representatives
of Purchaser.
ARTICLE III
TRANSITION MATTERS
Section 3.1 Transition Matters. The Consultant shall render such
------------------
services to Purchaser as the Consultant and the President of the Purchaser (or
his designee) shall mutually agree with respect to (i) Purchaser and Company
business matters relating to the transition period prior to and following the
Merger and (ii) integration of the business of the Company with the business of
Purchaser.
ARTICLE IV
NON-COMPETITION
Section 4.1 Reasonableness of Provisions.
----------------------------
(a) The Consultant acknowledges and agrees that the provisions
contained in Article IV of this Agreement are reasonable with respect to their
duration, geographical area and scope. Without limiting the generality of the
foregoing, the Consultant further acknowledges and agrees that any and all of
the provisions of Article IV of this Agreement are reasonable and necessary to
protect the legitimate interests of the Purchaser. For purposes of this Article
IV only, the term "Purchaser" shall mean any and all of Purchaser and its
---------
subsidiaries from time to time (including, without limitation, the Surviving
Corporation (as such term is defined in the Merger Agreement) from and after the
Effective Time).
4
<PAGE>
(b) The Consultant acknowledges and agrees that the food service
and theme restaurant business of the Purchaser (as such business is conducted as
of the date of this Agreement and may be conducted from time to time in the
future, the "Business") is intensely competitive and that the Consultant has had
--------
access to, has and may in the future have knowledge of confidential information
of the Purchaser, including, but not limited to, the identity of the Purchaser's
franchisees and other persons with whom Purchaser has business relationships,
the identity of the representatives of such persons with whom the Purchaser has
dealt, information concerning the creation or development of products offered by
Purchaser, demographic and other information related to actual and targeted
customers of Purchaser, computer software applications and other programs,
personnel information, intellectual property and other trade secrets
(collectively, the "Confidential Information").
------------------------
(c) The Consultant acknowledges and agrees that the direct or
indirect disclosure by the Consultant of any Confidential Information to
existing or potential competitors of the Purchaser or the Business would place
the Purchaser at a competitive disadvantage and would do serious damage,
monetary and otherwise, to the Purchaser and the Business.
(d) The Consultant acknowledges and agrees that the Consultant's
engaging in any of the activities prohibited by this Agreement may constitute
improper appropriation or use of the Confidential Information or both. The
Consultant acknowledges the trade secret status of the Confidential Information
and that the Confidential Information constitutes a protectible business
interest of Purchaser.
Section 4.2 Noncompetition.
--------------
(a) During the Restricted Period, the Consultant shall not
(either directly or indirectly, through Representatives or otherwise), anywhere
in the world, engage in, invest in, own, manage, operate, finance, control, or
participate in the ownership, management, operation, financing, or control of,
be associated with as an officer, employee, partner, director or otherwise with,
or aid or assist any other person in the conduct of, any restaurant, food
service or
5
<PAGE>
restaurant business (i) with an environmental, jungle, forest, zoological,
animal (including living, mannequin or robotic animals) or aquarium theme, (ii)
with a name, logo, trade dress or other Company Intellectual Property (as such
term is defined in the Merger Agreement) used by, or similar to the name, logo,
trade dress or other Company Intellectual Property of, the Company (including,
without limitation, the "Rainforest Cafe" name, logo, trade dress and other
Company Intellectual Property), or (iii) (A) located at a theme park owned,
managed, leased or operated in whole or in part by Disney or any one or more of
its subsidiaries (each, a "Disney Theme Park") during the period from and after
-----------------
the date hereof through to and including the first anniversary of the Closing
Date and (B) (x) within a one-quarter mile radius of any Rainforest Cafe at any
Disney Theme Park during the period from the first anniversary of the Closing
Date through to and including the fifth anniversary of the Closing Date and (y)
if outside a one-quarter mile radius during the period from the first
anniversary of the Closing Date through to and including the fifth anniversary
of the Closing Date, only with the prior written approval of Purchaser (such
approval not to be unreasonably withheld or delayed); provided, however, that
-------- -------
notwithstanding anything to the contrary in this Section 4.2(a), the Consultant:
(i) may purchase or otherwise acquire up to ten percent (10%) of any class of
securities of any person (but without otherwise participating in the activities
of such person) if such securities are listed on any national securities
exchange or NASDAQ; and (ii) may, pursuant to license agreements to be entered
into with the Company (which shall contain financial terms and conditions
consistent with other license agreements entered into by the Company for
international Rainforest Cafe restaurants), develop, own and operate Rainforest
Cafe restaurants in New Zealand, Australia and Germany, provided that the
exclusion contained in this clause (ii) shall not be available to Consultant if
the Consultant and the Company do not enter into definitive written license
agreements with respect thereto within one year following the Closing Date,
provided further that if prior to the time a definitive license agreement is
entered into between the Company and Consultant with respect to any one or more
of New Zealand, Australia and Germany, Purchaser receives a bona fide offer with
respect to any such country, then Purchaser shall notify Consultant thereof and,
not withstanding the immediately preceding proviso,
6
<PAGE>
Consultant shall have until the earlier of (x) 90 days following Consultant's
receipt of notice of such offer and (y) the first anniversary of the Closing
Date, to enter into a definitive written license agreement with the Company with
respect to such country.
(b) During the Restricted Period, the Consultant shall not
(either directly or indirectly, through Representatives or otherwise), engage
in, invest in, own, manage, operate, finance, control, or participate in the
ownership, management, operation, financing, or control of, be associated with
as an officer, employee, partner, director or otherwise with, or aid or assist
any other person in the conduct of, any restaurant, food service or restaurant
business (i) within a two mile radius of any Rainforest Cafe identified on
Exhibit A hereto during the period from and after the date hereof through to and
- --------
including the second anniversary of the Closing Date and (ii) within a one mile
radius of any Rainforest Cafe identified on Exhibit A hereto during the period
---------
after the second anniversary of the Closing Date through to and including the
fifth anniversary of the Closing Date; provided, however, that notwithstanding
-------- -------
anything to the contrary in this Section 4.2(b), (A) the Consultant may purchase
or otherwise acquire up to ten percent (10%) of any class of securities of any
person (but without otherwise participating in the activities of such person) if
such securities are listed on any national securities exchange or NASDAQ, (B)
the Consultant's involvement in any manner with the "Redstone Grill" restaurant
concept within the forementioned radius with respect to the Mall of America
shall not constitute a violation of this Section 4.2(b), and (C) the Consultant
may engage in, invest in, own, manage, operate, finance, control, or participate
in the ownership, management, operation, financing, or control of, any food
service or restaurant business (1) which has a restaurant inside the applicable
forementioned radius and which either (I) has been in operations for at least
twelve months at the time of his involvement or (II) does not constitute the
primary asset of such food service or restaurant business (provided further that
the exclusions contained in clauses (C)(1)(I) and (C)(1)(II) shall not be
available to Consultant with respect to any Disney Theme Park, (2) which is
located on property currently owned by Lakes Gaming Inc. in the vicinity of the
MGM Grand Hotel in Las Vegas, Nevada, or (3) which is located in a casino
managed by Lakes Gaming Inc.; and (C) the
7
<PAGE>
Consultant shall not be required to reduce the extent of, divest or terminate
his involvement in any of the entities listed on Exhibit B hereto.
Section 4.3 No Disparagement or Communication. Consultant shall not
---------------------------------
make, or cause to be made, any statement, observation or opinion, or communicate
any information (whether oral or written) to the press, media or any third
party, that (i) disparages the reputation or business of Purchaser, the Merger
or the other transactions contemplated by the Merger Agreement, or (ii)
discusses or otherwise relates to the Rainforest Cafe concept, its creation, or
the historical or ongoing business of the Company or Rainforest Cafe, or new
restaurant openings; provided, however, that nothing in clause (ii) of this
-------- -------
Section 4.3 shall prohibit Consultant from making factual statements relating to
the Company or Rainforest Cafe with respect to the period of time between its
creation and the Merger in connection with a personal interest article about the
Consultant. In the event that the Consultant is questioned, or is asked to
comment or respond to a statement or inquiry from any press or media which
relates, directly or indirectly, to business activities of the Company or
Rainforest Cafe or the opening of a new restaurant, then Consultant shall
unequivocally state at the outset of any such interaction that he is no longer
employed by the Company and that all inquiries relating to the Company or
Rainforest Cafe should be referred to Purchaser.
Section 4.4 Confidentiality.
---------------
(a) Except as and only to the extent set forth in Section 4.4(b)
hereof, the Consultant shall, and shall cause the Control Representatives of
such Consultant to, and shall use his reasonable best efforts to ensure that the
Other Representatives of such Consultant shall, hold in strict confidence, and
not (directly or indirectly) make known, or disclose, furnish or otherwise make
available to any person or business, any of the Confidential Information.
(b) Notwithstanding Section 4.4(a) hereof:
(i) the Consultant shall not have any obligation under
Section 4.4(a) with respect to, and only to the extent that, any
8
<PAGE>
Confidential Information becomes generally known or is publicly disclosed
or publicly available, in each case, through disclosure other than by the
Consultant or the Representatives of such Consultant; and
(ii) in the event that the Consultant or any of its
Representatives are requested or required (by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand, any investigation by any Governmental Authority (as
defined in the Merger Agreement) or arbitration tribunal or otherwise) to
disclose any of the Confidential Information, the Consultant shall, to the
extent permitted under law, notify the Purchaser promptly orally and in
writing so that the Purchaser may seek a protective order or other
appropriate remedy. In such an event, the Consultant (on its own behalf and
on behalf of each of the Representatives of such Consultant) (x) agrees
that only such portion of the Confidential Information shall be disclosed
which is legally required to be so disclosed or which the Consultant or the
Representative of such Consultant is advised by counsel as being reasonably
likely to be legally required to be so disclosed and (y) shall exercise
reasonable best efforts to obtain reliable assurance that confidential
treatment will be accorded such disclosed Confidential Information.
Section 4.5 Nonsolicitation.
---------------
(a) During the Restricted Period, the Consultant shall not
(either directly or indirectly through Control Representatives, circulars,
advertisements or otherwise), whether on behalf of the Consultant or on behalf
of any other person:
(i) solicit (or cause, or authorize, to be solicited),
divert or otherwise attempt to obtain the business of any person who is, or
has at any time within three (3) years prior to the date of such action
been, a franchisee, licensee or business
9
<PAGE>
relation of the Purchaser for any purpose which is competitive with the
Business;
(ii) disturb or attempt to disturb in any adverse respect any
business relationship between any person and the Purchaser;
(iii) seek or attempt to persuade, induce or encourage any
director, officer, employee, consultant, advisor or other agent of the
Purchaser to discontinue his or her status or employment therewith or to
become employed or otherwise engaged in a business of the same or of a
similar nature to the Business;
(iv) solicit or employ, or otherwise hire or engage as an
employee, independent contractor, consultant, advisor or otherwise, any
person employed by, under exclusive contract with, providing exclusive
services to, or otherwise exclusively engaged by Purchaser; and
(v) solicit or employ, or otherwise hire or engage as an
employee, independent contractor, consultant, advisor or otherwise, any
person at any time within six (6) months following the date of cessation of
employment of such person or the termination of such person's other status,
as the case may be, with the Purchaser.
Section 4.6 Additional Acknowledgments and Agreements. In addition
-----------------------------------------
to the foregoing, Consultant acknowledges and agrees that he will not make any
use whatsoever of any Company Intellectual Property for any reason whatsoever.
Consultant also acknowledges and agrees that he has no right, title, or interest
in, or to any Company Intellectual Property. Notwithstanding the foregoing, to
the extent that Consultant created any Company Intellectual Property, Consultant
hereby assigns to Company all of his right, title and interest (if any) in, to
and under, all Company Intellectual Property retroactive to the date he created
such Company Intellectual Property.
10
<PAGE>
Section 4.7 Term.
----
(a) Unless otherwise expressly limited by the terms hereof, all
covenants contained in Sections 4.3, 4.4 and 4.6 of this Agreement shall remain
in effect and survive indefinitely.
(b) For purposes of Article IV of this Agreement, the term
"Restricted Period" means the period commencing on the Closing Date through to
-----------------
the fifth annual anniversary of the Closing Date.
Section 4.8 Definitions. For purposes of Article IV of this
-----------
Agreement, the following terms shall have the following meanings:
(a) "affiliate" of any person means another person that
---------
directly or indirectly controls, is controlled by, or is under common control
with, such first person, where "control" means the possession, directly or
-------
indirectly, of the power to direct or cause the direction of the management
policies of a person, whether through the ownership of voting securities, by
contract, as trustee or executor, or otherwise. For the purposes of this
Agreement, the term "affiliated" has a meaning correlative to the foregoing;
----------
(b) "Control Representative" of any person means the
----------------------
Representatives of such person which are controlled (as such term is defined in
the definition of "affiliate" above) by such person;
(c) "Other Representative" of any person means all
--------------------
Representatives of such person other than the Control Representatives of such
person;
(d) "person" means any natural person, firm, partnership,
------
association, corporation, company, limited liability company, unincorporated
organization, joint venture, trust, self-regulatory organization, business
trust, Governmental Authority or other entity;
(e) "Representative" of any person means such person's
--------------
subsidiaries and affiliates and the directors, officers, employees, agents,
affiliates, consultants, advisors and other representatives of such
11
<PAGE>
person and each of such person's subsidiaries and affiliates; and
(f) "subsidiary" of any party means (x) a corporation, a
----------
majority of the voting or capital stock of which is as of the time in question
directly or indirectly owned by such party and (y) any other partnership, joint
venture, association, joint stock company, trust, unincorporated organization or
similar entity, in which such party, directly or indirectly, owns a majority of
the equity interest thereof or has the power to elect or direct the election of
a majority of the members of the governing body of such entity or otherwise has
control over such entity (e.g., as the managing partner of a partnership).
----
ARTICLE V
MISCELLANEOUS
Section 5.1 Independent Contractor. During the term of this
----------------------
Agreement, the Consultant shall be an independent contractor and not an employee
of Purchaser.
Section 5.2 Successors; Binding Agreement. This Agreement and all
-----------------------------
rights of the parties hereunder shall inure to the benefit of and be enforceable
by each party's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
Section 5.3 Notices. All notices and other communications hereunder
-------
shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service to the
parties at the following addresses (or at such other addresses for a party as
shall be specified by the notice):
If to Purchaser:
Landry's Seafood Restaurants, Inc.
1400 Post Oak Blvd., Suite 1010
Houston, Texas 77056
Attention: Steven L. Scheinthal
Telephone No.: (713) 850-1010
Telecopy No.: (713) 623-4702
12
<PAGE>
If to the Consultant:
Steven W. Schussler
3216 Gettysburg Avenue South
St. Louis Park, Minnesota 55416
Telephone No.: (612) 936-9651
Section 5.4 Specific Performance. The Consultant recognizes and
--------------------
agrees that if for any reason any of the provisions of this Agreement are not
performed in accordance with their specific terms or are otherwise breached,
immediate and irreparable harm or injury would be caused to the Purchaser for
which money damages would not be an adequate remedy. Accordingly, the Consultant
agrees that, in addition to any other available remedies, the Purchaser shall be
entitled to an injunction restraining any violation or threatened violation of
the provisions of this Agreement without the necessity of posting a bond or
other form of security. In the event that any action should be brought in equity
to enforce the provisions of this Agreement, the Consultant shall not allege,
and the Consultant hereby waives the defense, that there is an adequate remedy
at law.
Section 5.5 Severability; Modification. If any provision(s) of this
--------------------------
Agreement shall for any reason be invalid or unenforceable in any jurisdiction,
such provision(s) shall be ineffective in such jurisdiction to the extent of
such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions hereof, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction. Without limiting the
generality of the immediately preceding sentence, in the event that a court of
competent jurisdiction determines that the provisions of this Agreement would be
unenforceable as written because they cover too extensive a geographic area, too
broad a range of activities, or too long a period of time, or otherwise, then
such provisions will automatically be modified to cover the maximum geographic
area, range of activities, and period of time as may be enforceable, and, in
addition, such court is hereby expressly authorized so to modify this Agreement
and to enforce it as so modified.
13
<PAGE>
Section 5.6 Interpretation. The parties have participated jointly in
--------------
the negotiation and drafting of this Agreement. Consequently, in the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
Section 5.7 Assignment. Neither this Agreement, nor any rights,
----------
interests or obligations hereunder, may be directly or indirectly assigned,
delegated or transferred by any party to this Agreement, in whole or in part, to
any other person without the prior written consent of the other party hereto;
provided, however, that the Purchaser may freely assign (whether by operation of
- -------- -------
law or otherwise) all or a portion of its rights under this Agreement.
Section 5.8 Miscellaneous. No provisions of this Agreement may be
-------------
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the parties hereto. No waiver by a party hereto
at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by the parties which are not set forth expressly in this
Agreement. This Agreement shall be governed and construed in accordance with the
laws of the State in which the Purchaser is incorporated on the date hereof,
without giving effect to the principles of conflicts of law thereunder or of any
other jurisdiction.
Section 5.9 Contents of Agreement. This Agreement sets forth the
---------------------
entire agreement of the parties hereto with respect to the matters contemplated
hereby. This Agreement supersedes all prior agreements and understandings among
the parties hereto relating to the subject matter hereof.
14
<PAGE>
Section 5.10 Section Headings and Gender. All Section headings and
---------------------------
the use of a particular gender are for convenience only and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 5.11 Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be deemed to be an original but both of which
together will constitute one and the same instrument.
15
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Employee
Termination, Consulting and Non-Competition Agreement as of the date and year
first above written.
/s/ Steven W. Schussler
------------------------
Steven W. Schussler
LANDRY'S SEAFOOD
RESTAURANTS, INC.
By: /s/ Tilman J. Fertitta
-----------------------
Name: Tilman J. Fertitta
Title: Chairman, President and
Chief Executive Officer
<PAGE>
Exhibit 99.6
EMPLOYEE TERMINATION, CONSULTING
AND NON-COMPETITION AGREEMENT
Employee Termination, Consulting and Non-Competition Agreement (this
"Agreement"), dated as of February 9, 2000, by and between Landry's Seafood
---------
Restaurants, Inc., a Delaware corporation ("Purchaser"), and Ercument Ucan (the
---------
"Consultant").
----------
W I T N E S S E T H:
-------------------
WHEREAS, Purchaser, LSR Acquisition Corp., a Delaware corporation (the
"Merger Sub"), and Rainforest Cafe, Inc., a Minnesota corporation (the
----------
"Company"), have entered into an Agreement and Plan of Merger dated as of
-------
February 9, 2000 (as the same may be amended from time to time, the "Merger
------
Agreement");
- ---------
WHEREAS, the Consultant desires to perform services for Purchaser in
accordance with and subject to the terms and conditions provided herein;
WHEREAS, the Consultant desires to be bound by the noncompetition,
nonsolicitation, confidentiality and other terms and provisions contained in
this Agreement; and
WHEREAS, the Consultant acknowledges that Purchaser would not have
entered into the Merger Agreement absent the transactions contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the pre mises and the respective
representations, warranties, covenants and agreements of the parties herein
contained, and intending to be legally bound hereby, the parties hereto agree as
follows:
<PAGE>
ARTICLE I
CERTAIN MATTERS
Section 1.1 Effectiveness. This Agreement shall become effective
-------------
only upon consummation of the Merger at the Effective Time (as such capitalized
terms are defined in the Merger Agreement). If the Merger Agreement is
terminated for any reason, then this Agreement shall terminate and be of no
force or effect.
Section 1.2 Forfeiture of Company Option. Consultant agrees that, in
----------------------------
consideration of compensation received hereunder, any and all Company Options
(as defined in the Merger Agreement) beneficially owned by the Consultant shall
be forfeited as of the Effective Time and the Consultant shall have no further
rights with respect to such Company Options; provided, however, that this
-------- -------
Section 1.2 shall not apply with respect to 75,000 Company Options which have an
exercise price less than the closing market price of shares of Company common
stock on NASDAQ on the last trading day immediately prior to the date hereof.
Section 1.3 Compensation and Related Matters.
--------------------------------
(a) Consulting Fee. In consideration of the covenants of the
--------------
Consultant contained in this Agreement, Purchaser shall pay to the Consultant
(i) a one-time fee equal to one million four hundred thousand dollars
($1,400,000) at the Closing (as such term is defined in the Merger Agreement)
and (ii) a one-time fee in an amount equal to one hundred thousand dollars
($100,000) on the day which is ninety-days following the Closing Date.
(b) Business Expenses. The Consultant will be reimbursed by
-----------------
Purchaser for all ordinary and reasonable business expenses incurred by him in
connection with his performance of consulting services hereunder upon submission
by the Consultant of receipts and other documentation as may be requested by
Purchaser.
2
<PAGE>
Section 1.4 Termination of Employment. Effective as of the
-------------------------
Time, the Consultant acknowledges and agrees that his employment with the
Company shall be terminated, and the Company shall not owe Consultant any
monies, securities, severance payments or other consideration with respect to
his terminated employment (other than as provided in the proviso to Section 1.2
hereof and other than amounts payable under this Agreement).
ARTICLE II
CONSULTING
Section 2.1 Engagement as Consultant. Purchaser hereby agrees to
------------------------
engage the Consultant, and the Consultant hereby agrees to perform services for
Purchaser, on the terms and conditions set forth herein.
Section 2.2 Term. The term (the "Term") of the covenants contained
---- ----
in Article II of this Agreement is for the twenty-four month period commencing
on the Effective Time, subject to earlier termination pursuant hereto.
Section 2.3 Duties and Reporting Relationship. From time to time
---------------------------------
during the Term, the Consultant shall perform such services relating to the
business of Purchaser as the Consultant and the President of the Purchaser (or
his designee) shall mutually agree. The Consultant shall in no event be required
to provide more than ten (10) hours per week of consulting services to Purchaser
for the first three months of the Term, and no more than twenty (20) hours per
month of consulting services to Purchaser thereafter, except in each case as
agreed to by the Consultant. The scheduling of such time shall be at the
Consultant's sole discretion. Except as provided in Article IV hereof, Purchaser
acknowledges that the Consultant is permitted to pursue other activities,
whether of a personal or business nature, and, accordingly, may not always be
immediately available to Purchaser.
Section 2.4 Place of Performance. The Consultant shall perform his
--------------------
duties and conduct his business at such locations as are reasonably acceptable
to him; provided, however, that, as mutually agreed, the
-------- -------
3
<PAGE>
Consultant will be available to travel domestically to meet from time to time
with representatives of Purchaser.
ARTICLE III
TRANSITION MATTERS
Section 3.1 Transition Matters. The Consultant shall render such
------------------
services to Purchaser as the Consultant and the President of the Purchaser (or
his designee) shall mutually agree with respect to (i) Purchaser and Company
business matters relating to the transition period prior to and following the
Merger and (ii) integration of the business of the Company with the business of
Purchaser.
ARTICLE IV
NON-COMPETITION
Section 4.1 Reasonableness of Provisions.
----------------------------
(a) The Consultant acknowledges and agrees that the provisions
contained in Article IV of this Agreement are reasonable with respect to their
duration, geographical area and scope. Without limiting the generality of the
foregoing, the Consultant further acknowledges and agrees that any and all of
the provisions of Article IV of this Agreement are reasonable and necessary to
protect the legitimate interests of the Purchaser. For purposes of this Article
IV only, the term "Purchaser" shall mean any and all of Purchaser and its
---------
subsidiaries from time to time (including, without limitation, the Surviving
Corporation (as such term is defined in the Merger Agreement) from and after the
Effective Time).
(b) The Consultant acknowledges and agrees that the food service
and theme restaurant business of the Purchaser (as such business is conducted as
of the date of this Agreement and may be conducted from time to time in the
future, the "Business") is intensely competitive and that the Consultant has
--------
had access to, has and may in the future have knowledge of confidential
information of the Purchaser, including, but
4
<PAGE>
not limited to, the identity of the Purchaser's franchisees and other persons
with whom Purchaser has business relationships, the identity of the
representatives of such persons with whom the Purchaser has dealt, information
concerning the creation or development of products offered by Purchaser,
demographic and other information related to actual and targeted customers of
Purchaser, computer software applications and other programs, personnel
information, intellectual property and other trade secrets (collectively, the
"Confidential Information").
------------------------
(c) The Consultant acknowledges and agrees that the direct or
indirect disclosure by the Consultant of any Confidential Information to
existing or potential competitors of the Purchaser or the Business would place
the Purchaser at a competitive disadvantage and would do serious damage,
monetary and otherwise, to the Purchaser and the Business.
(d) The Consultant acknowledges and agrees that the Consultant's
engaging in any of the activities prohibited by this Agreement may constitute
improper appropriation or use of the Confidential Information or both. The
Consultant acknowledges the trade secret status of the Confidential Information
and that the Confidential Information constitutes a protectible business
interest of Purchaser.
Section 4.2 Noncompetition.
--------------
(a) During the Restricted Period, the Consultant shall not
(either directly or indirectly, through Representatives or otherwise), anywhere
in the world, engage in, invest in, own, manage, operate, finance, control, or
participate in the ownership, management, operation, financing, or control of,
be associated with as an officer, employee, partner, director or otherwise with,
or aid or assist any other person in the conduct of, any restaurant, food
service or restaurant business (i) with an environmental, jungle, forest,
zoological, animal (including living, mannequin or robotic animals) or aquarium
theme, (ii) with a name, logo, trade dress or other Company Intellectual
Property (as such term is defined in the Merger Agreement) used by, or similar
to the name, logo, trade dress or other Company Intellectual Property of, the
Company (including,
5
<PAGE>
without limitation, the "Rainforest Cafe" name, logo, trade dress and other
Company Intellectual Property), or (iii) located at a theme park owned, managed,
leased or operated in whole or in part by Disney or any one or more of its
subsidiaries; provided, however, that notwithstanding anything to the contrary
-------- -------
in this Section 4.2(a), the Consultant (i) may purchase or otherwise acquire up
to ten percent (10%) of any class of securities of any person (but without
otherwise participating in the activities of such person) if such securities are
listed on any national securities exchange or NASDAQ and (ii) may, pursuant to a
license agreement to be entered into with the Company (which shall contain the
terms indicated on Annex A hereto and which shall otherwise contain terms
consistent with other license agreements entered into by the Company for
international Rainforest Cafe restaurants), operate Rainforest Cafe restaurants
in Turkey, provided that the exclusion contained in this clause (ii) shall not
be available to Consultant if the Consultant and the Company do not enter into a
definitive written license agreement with respect thereto within ninety days of
the Closing Date.
(b) During the Restricted Period, the Consultant shall not (either
directly or indirectly, through Representatives or otherwise), engage in, invest
in, own, manage, operate, finance, control, or participate in the ownership,
management, operation, financing, or control of, be associated with as an
officer, employee, partner, director or otherwise with, or aid or assist any
other person in the conduct of, any restaurant, food service or restaurant
business (i) within a two mile radius of any Rainforest Cafe identified on
Exhibit A hereto during the period from and after the date hereof through to and
- ---------
including the second anniversary of the Closing Date and (ii) within a one mile
radius of any Rainforest Cafe identified on Exhibit A hereto during the period
---------
after the second anniversary of the Closing Date through to and including the
fifth anniversary of the Closing Date; provided, however, that notwithstanding
-------- -------
anything to the contrary in this Section 4.2(b), (A) the Consultant may purchase
or otherwise acquire up to ten percent (10%) of any class of securities of any
person (but without otherwise participating in the activities of such person) if
such securities are listed on any national securities exchange or NASDAQ, (B)
the Consultant's involvement in any
6
<PAGE>
manner with the "Redstone Grill" restaurant concept within the forementioned
radius with respect to the Mall of America shall not be deemed to be a violation
of this Section 4.2(b), and (C) the Consultant may engage in, invest in, own,
manage, operate, finance, control, or participate in the ownership, management,
operation, financing, or control of, any food service or restaurant business (1)
which has a restaurant inside the applicable forementioned radius and which
either (I) has been in operations for at least twelve months at the time of his
involvement or (II) does not constitute the primary asset of such food service
or restaurant business (provided further that the exclusions contained in
clauses (C)(1)(I) and (C)(1)(II) shall not be available to Consultant with
respect to any restaurant, food service or restaurant business located at a
theme park owned, managed, leased or operated in whole or in part by Disney or
any one or more of its subsidiaries), (2) which is located on property currently
owned by Lakes Gaming Inc. in the vicinity of the MGM Grand Hotel in Las Vegas,
Nevada, or (3) which is located in a casino managed by Lakes Gaming Inc.
Section 4.3 No Disparagement or Communication. Consultant shall not
---------------------------------
make, or cause to be made, any statement, observation or opinion, or communicate
any information (whether oral or written) to the press, media or any third
party, that (i) disparages the reputation or business of Purchaser, the Merger
or the other transactions contemplated by the Merger Agreement, or (ii)
discusses or otherwise relates to the Rainforest Cafe concept, its creation, or
the historical or ongoing business of the Company or Rainforest Cafe, or new
restaurant openings; provided, however, that nothing in clause (ii) of this
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Section 4.3 shall prohibit Consultant from making factual statements relating to
the Company or Rainforest Cafe with respect to the period of time between its
creation and the Merger. In the event that the Consultant is questioned, or is
asked to comment or respond to a statement or inquiry from any press or media
which relates, directly or indirectly, to business activities of the Company or
Rainforest Cafe or the opening of a new restaurant, then Consultant shall
unequivocally state at the outset of any such interaction that he is no longer
employed by the Company and that all inquiries relating to the Company or
Rainforest Cafe should be referred to Purchaser.
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Section 4.4 Confidentiality.
---------------
(a) Except as and only to the extent set forth in Section 4.4(b)
hereof, the Consultant shall, and shall cause the Control Representatives of
such Consultant to, and shall use his reasonable best efforts to ensure that the
Other Representatives of such Consultant shall, hold in strict confidence, and
not (directly or indirectly) make known, or disclose, furnish or otherwise make
available to any person or business, any of the Confidential Information.
(b) Notwithstanding Section 4.4(a) hereof:
(i) the Consultant shall not have any obligation under
Section 4.4(a) with respect to, and only to the extent that, any
Confidential Information becomes generally known or is publicly disclosed
or publicly available, in each case, through disclosure other than by the
Consultant or the Representatives of such Consultant; and
(ii) in the event that the Consultant or any of its
Representatives are requested or required (by oral questions,
interrogatories, requests for information or documents, subpoena, civil
investigative demand, any investigation by any Governmental Authority (as
defined in the Merger Agreement) or arbitration tribunal or otherwise) to
disclose any of the Confidential Information, the Consultant shall, to the
extent permitted under law, notify the Purchaser promptly orally and in
writing so that the Purchaser may seek a protective order or other
appropriate remedy. In such an event, the Consultant (on its own behalf and
on behalf of each of the Representatives of such Consultant) (x) agrees
that only such portion of the Confidential Information shall be disclosed
which is legally required to be so disclosed or which the Consultant or the
Representative of such Consultant is advised by counsel as being reasonably
likely to be legally required to be
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so disclosed and (y) shall exercise reasonable best efforts to obtain
reliable assurance that confidential treatment will be accorded such
disclosed Confidential Information.
Section 4.5 Nonsolicitation.
---------------
(a) During the Restricted Period, the Consultant shall not
(either directly or indirectly through Control Representatives, circulars,
advertisements or otherwise), whether on behalf of the Consultant or on behalf
of any other person:
(i) solicit (or cause, or authorize, to be solicited),
divert or otherwise attempt to obtain the business of any person who is, or
has at any time within three (3) years prior to the date of such action
been, a franchisee, licensee or business relation of the Purchaser for any
purpose which is competitive with the Business;
(ii) disturb or attempt to disturb in any adverse respect
any business relationship between any person and the Purchaser;
(iii) seek or attempt to persuade, induce or encourage any
director, officer, employee, consultant, advisor or other agent of the
Purchaser to discontinue his or her status or employment therewith or to
become employed or otherwise engaged in a business of the same or of a
similar nature to the Business;
(iv) solicit or employ, or otherwise hire or engage as an
employee, independent contractor, consultant, advisor or otherwise, any
person employed by, under contract with, providing services to, or
otherwise engaged by Purchaser; and
(v) solicit or employ, or otherwise hire or engage as an
employee, independent contractor, consultant, advisor or otherwise, any
person at any time within six
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(6) months following the date of cessation of employment of such person or
the termination of such person's other status, as the case may be, with the
Purchaser.
Section 4.6 Additional Acknowledgments and Agreements. In addition
-----------------------------------------
to the foregoing, Consultant acknowledges and agrees that he will not make any
use whatsoever of any Company Intellectual Property for any reason whatsoever.
Consultant also acknowledges and agrees that he has no right, title, or interest
in, or to any Company Intellectual Property. Notwithstanding the foregoing, to
the extent that Consultant created any Company Intellectual Property, Consultant
hereby assigns to Company all of his right, title and interest (if any) in, to
and under, all Company Intellectual Property retroactive to the date he created
such Company Intellectual Property.
Section 4.7 Term.
----
(a) Unless otherwise expressly limited by the terms hereof, all
covenants contained in Sections 4.3, 4.4 and 4.6 of this Agreement shall remain
in effect and survive indefinitely.
(b) For purposes of Article IV of this Agreement, the term
"Restricted Period" means the period commencing on the Closing Date hereof
-----------------
through to the fifth annual anniversary of the Closing Date.
Section 4.8 Definitions. For purposes of Article IV of this
-----------
Agreement, the following terms shall have the following meanings:
(a) "affiliate" of any person means another person that directly
---------
or indirectly controls, is controlled by, or is under common control with, such
first person, where "control" means the possession, directly or indirectly, of
-------
the power to direct or cause the direction of the management policies of a
person, whether through the ownership of voting securities, by contract, as
trustee or executor, or otherwise. For the purposes of this Agreement, the term
"affiliated" has a meaning correlative to the foregoing;
----------
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(b) "Control Representative" of any person means the Representatives
----------------------
of such person which are controlled (as such term is defined in the definition
of "affiliate" above) by such person;
(c) "Other Representative" of any person means all Representatives
--------------------
of such person other than the Control Representatives of such person;
(d) "person" means any natural person, firm, partnership,
------
association, corporation, company, limited liability company, unincorporated
organization, joint venture, trust, self-regulatory organization, business
trust, Governmental Authority or other entity;
(e) "Representative" of any person means such person's subsidiaries
--------------
and affiliates and the directors, officers, employees, agents, affiliates,
consultants, advisors and other representatives of such person and each of such
person's subsidiaries and affiliates; and
(f) "subsidiary" of any party means (x) a corporation, a majority of
----------
the voting or capital stock of which is as of the time in question directly or
indirectly owned by such party and (y) any other partnership, joint venture,
association, joint stock company, trust, unincorporated organization or similar
entity, in which such party, directly or indirectly, owns a majority of the
equity interest thereof or has the power to elect or direct the election of a
majority of the members of the governing body of such entity or otherwise has
control over such entity (e.g., as the managing partner of a partnership).
----
ARTICLE
MISCELLANEOUS
Section 5.1 Independent Contractor. During the term of this
----------------------
the Consultant shall be an independent contractor and not an employee of
Purchaser.
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Section 5.2 Successors; Binding Agreement. This Agreement and all
-----------------------------
rights of the parties hereunder shall inure to the benefit of and be enforceable
by each party's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
Section 5.3 Notices. All notices and other communications
-------
hereunder shall be in writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by an overnight courier service to the
parties at the following addresses (or at such other addresses for a party as
shall be specified by the notice):
If to Purchaser:
Landry's Seafood Restaurants, Inc.
1400 Post Oak Blvd., Suite 1010
Houston, Texas 77056
Attention: Steven L. Scheinthal
Telephone No.: (713) 850-1010
Telecopier No.: (713) 623-4702
If to the Consultant:
Ercument Ucan
540 Sunny Shadows
Excelsior, Minnesota 55331
Telephone No.: (612) 470-4528
Section 5.4 Specific Performance. The Consultant recognizes and
--------------------
agrees that if for any reason any of the provisions of this Agreement are not
performed in accordance with their specific terms or are otherwise breached,
immediate and irreparable harm or injury would be caused to the Purchaser for
which money damages would not be an adequate remedy. Accordingly, the Consultant
agrees that, in addition to any other available remedies, the Purchaser shall be
entitled to an injunction restraining any violation or threatened violation of
the provisions of this Agreement without the necessity of posting a bond or
other form of security. In the event that any action should be brought in equity
to enforce the provisions of this Agreement, the Consultant shall not allege,
and the Consultant hereby waives the defense, that there is an adequate remedy
at law.
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Section 5.5. Severability; Modification. If any provision(s) of
--------------------------
this Agreement shall for any reason be invalid or unenforceable in any
jurisdiction, such provision(s) shall be ineffective in such jurisdiction to the
extent of such invalidity or unenforceability without invalidating or rendering
unenforceable the remaining provisions hereof, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provisions in any other jurisdiction. Without limiting the
generality of the immediately preceding sentence, in the event that a court of
competent jurisdiction determines that the provisions of this Agreement would be
unenforceable as written because they cover too extensive a geographic area, too
broad a range of activities, or too long a period of time, or otherwise, then
such provisions will automatically be modified to cover the maximum geographic
area, range of activities, and period of time as may be enforceable, and, in
addition, such court is hereby expressly authorized so to modify this Agreement
and to enforce it as so modified.
Section 5.6 Interpretation. The parties have participated jointly
--------------
in the negotiation and drafting of this Agreement. Consequently, in the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto, and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
Section 5.7 Assignment. Neither this Agreement, nor any rights,
----------
interests or obligations hereunder, may be directly or indirectly assigned,
delegated or transferred by any party to this Agreement, in whole or in part, to
any other person without the prior written consent of the other party hereto;
provided, however, that the Purchaser may freely assign (whether by operation of
- -------- -------
law or otherwise) all or a portion of its rights under this Agreement.
Section 5.8 Miscellaneous. No provisions of this Agreement may be
-------------
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the parties hereto. No waiver by a party hereto
at any time of any breach by the other party hereto of, or compliance with, any
condition or
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provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
the parties which are not set forth expressly in this Agreement. This Agreement
shall be governed and construed in accordance with the laws of the State in
which the Purchaser is incorporated on the date hereof, without giving effect to
the principles of conflicts of law thereunder or of any other jurisdiction.
Section 5.9 Contents of Agreement. This Agreement sets forth the
---------------------
entire agreement of the parties hereto with respect to the matters contemplated
hereby. This Agreement supersedes all prior agreements and understandings among
the parties hereto relating to the subject matter hereof.
Section 5.10 Section Headings and Gender. All Section headings and
---------------------------
the use of a particular gender are for convenience only and shall in no way
modify or restrict any of the terms or provisions hereof.
Section 5.11 Counterparts. This Agreement may be executed in
------------
counterparts, each of which shall be deemed to be an original but both of which
together will constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this Employee
Termination, Consulting and Non-Competition Agreement as of the date and year
first above written.
/s/ Ercument Ucan
-------------------------------
Ercument Ucan
LANDRY'S SEAFOOD
RESTAURANTS, INC.
By: /s/ Tilman J. Fertitta
--------------------------
Name: Tilman J. Fertitta
Title: Chairman, President and
Chief Executive Officer
