<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] Confidential, for Use of Commission Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Landry's Seafood Restaurants, Inc.
----------------------------------
(Name of Registrant as Specified in its Charter)
N/A
----------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(a)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form of Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------
2) Form, Schedule or Registration Statement No.:
--------------------
3) Filing Party:
----------------------------------------------------
4) Date Filed:
------------------------------------------------------
<PAGE>
[LANDRY'S SEAFOOD RESTAURANTS LOGO]
June 27, 2000
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
which will be held on August 17, 2000, at 11:00 a.m., local time, at Willie
G's Seafood and Steak House, 1605 Post Oak Boulevard, Houston, Texas.
The enclosed notice and proxy statement contain details concerning the
business to come before the Annual Meeting. You will note that the Board of
Directors of the Company recommends a vote "FOR" the election of five
Directors to serve terms of offices expiring at the 2001 Annual Meeting of
Stockholders. Please sign and return your proxy card in the enclosed envelope
at your earliest convenience to assure that your shares will be represented
and voted at the Annual Meeting even if you cannot attend.
The Board of Directors and Management look forward to seeing you at the
Annual Meeting.
Very truly yours,
/s/ TILMAN J. FERTITTA
Tilman J. Fertitta
Chairman of the Board,
President and Chief Executive
Officer
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
1400 Post Oak Blvd., Suite 1010
Houston, Texas 77056
---------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 17, 2000
---------------
Notice is hereby given that the Annual Meeting of Stockholders of Landry's
Seafood Restaurants, Inc. (the "Company") will be held at Willie G's Seafood
and Steak House, 1605 Post Oak Boulevard, Houston, Texas, on August 17, 2000,
at 11:00 a.m., local time, for the following purposes:
1. To elect five directors to serve a term of office expiring at the 2001
Annual Meeting of Stockholders and until their successors shall have
been duly elected and qualified; and
2. To transact such other business as may properly come before the Annual
Meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on June 20, 2000, as
the record date (the "Record Date") for the determination of stockholders
entitled to notice of and to vote at the Annual Meeting or any adjournment(s)
thereof. Only stockholders of record at the close of business on the Record
Date are entitled to notice of and to vote at the Annual Meeting. The stock
transfer books will not be closed. A list of stockholders entitled to vote at
the Annual Meeting will be available for examination during regular business
hours at the corporate office of the Company at 1400 Post Oak Blvd., Suite
1010, Houston, Texas 77056, for 10 days prior to the Annual Meeting.
You are cordially invited to attend the Annual Meeting. Whether or not you
expect to attend the Annual Meeting in person, however, you are urged to mark,
sign, date, and mail the enclosed form of proxy promptly so that your shares of
stock may be represented and voted in accordance with your wishes, even if you
cannot attend, and in order that the presence of a quorum may be assured at the
Annual Meeting. In the event you decide to attend the Annual Meeting, you may
revoke the proxy and vote your shares in person.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ STEVEN L. SCHEINTHAL
Steven L. Scheinthal, Secretary
DATED: June 27, 2000
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
1400 Post Oak Blvd., Suite 1010
Houston, Texas 77056
----------------
PROXY STATEMENT
----------------
We are mailing this Proxy Statement with the accompanying proxy card and
our Annual Report to Stockholders to you on or about June 27, 2000. The
enclosed proxy is solicited by the Board of Directors (the "Board") of
Landry's Seafood Restaurants, Inc. (the "Company") in connection with our
Annual Meeting of Stockholders to be held on August 17, 2000, and any
adjournment of that meeting. The Annual Meeting will be held on August 17,
2000, at 11:00 a.m., local time, at Willie G's Seafood and Steak House, 1605
Post Oak Boulevard, Houston, Texas.
----------------
GENERAL INFORMATION ABOUT VOTING
----------------
WHO CAN VOTE?
If you are a holder of our Common Stock on our records at the close of
business on June 20, 2000 (the "Record Date" for the Annual Meeting), you are
entitled to vote at the Annual Meeting. On the Record Date, we had 23,784,925
shares of Common Stock issued and outstanding, exclusive of treasury shares.
Each issued and outstanding share of Common Stock is entitled to one vote on
each matter to be voted on at the Annual Meeting and can be voted only if the
owner of record is present to vote or is represented by proxy.
HOW ARE VOTES COUNTED?
The holders of a majority in interest of all stock issued, outstanding and
entitled to vote are required to be present in person or represented by proxy
at the Annual Meeting in order to constitute a quorum for the transaction of
business. Abstentions and broker non-votes are treated in the same manner as
shares present or represented at the Annual Meeting for purposes of
determining the existence of a quorum.
The affirmative vote of a majority of the shares of Common Stock
represented at the Annual Meeting and entitled to vote is required to elect
Directors.
The total number of votes that are cast "for" a proposal will determine
whether the proposal is adopted. Abstentions are counted in determining the
total number of votes cast. While not counted as votes "for" or "against" a
proposal, abstentions have the same effect as votes against a proposal. Broker
non-votes are not counted in determining the number of votes cast. (A "broker
non-vote" occurs when a registered broker holding a customer's shares in the
name of the broker has not received voting instructions on a matter from the
customer and is barred by stock exchange rules from exercising discretionary
authority to vote on the matter. The broker will indicate this on the proxy
card.)
In voting for the election of Directors, you may cast your vote in favor or
against, but you may not specify an abstention.
WHAT HAPPENS IF I VOTE BY PROXY?
If you sign, date and return the enclosed proxy card in time for the Annual
Meeting and do not subsequently revoke it, your shares will be voted in
accordance with your instructions as marked on the proxy card. If you sign,
date and return the proxy card but do not specify how your shares are to be
voted, then your shares will be voted FOR the matters numbered (1) and (2) on
the proxy card. We are not aware of any matter to be considered at the Annual
Meeting other than those referred to in this Proxy Statement. If any other
business should properly come before the Annual Meeting, the persons named in
the proxy card will vote according to their best judgment.
<PAGE>
CAN I REVOKE MY PROXY CARD INSTRUCTIONS?
You may revoke your proxy at any time before it is exercised by returning
to us another properly signed proxy card representing your shares and bearing
a later date, delivering a written revocation letter to Steven L. Scheinthal,
Secretary of the Company, or by attending the Annual Meeting in person,
notifying the Secretary, and voting by ballot at the Annual Meeting. Mr.
Scheinthal's mailing address is Landry's Seafood Restaurants, Inc., 1400 Post
Oak Blvd., Suite 1010, Houston, Texas 77056.
Any stockholder of record attending the Annual Meeting may vote in person
whether or not a proxy has been previously given, but the mere presence
(without notifying the Secretary) of a stockholder at the Annual Meeting will
not constitute revocation of a previously given proxy.
WHAT DO I NEED TO DO IF I PLAN TO ATTEND THE ANNUAL MEETING?
If you are a holder of record of shares of Common Stock and you plan to
attend the Annual Meeting, you need only bring a form of personal
identification with you in order to be admitted to the Annual Meeting. If you
are not a record holder of shares but hold our Common Stock through a bank or
broker, you will need proof of ownership to be admitted to the Annual Meeting.
A recent brokerage statement or letter from a bank or broker are examples of
proof of ownership. If you hold your shares through a broker or bank and want
to vote in person at the Annual Meeting, you will need to contact the
registered holder of your shares and obtain a proxy in your name from that
registered holder.
WHO PAYS THE EXPENSES OF THIS SOLICITATION?
We bear the cost of preparing, assembling and mailing the Notice, Proxy
Statement and proxy card for the Annual Meeting. In addition to such
solicitation and solicitation by use of the mails, our employees may solicit
proxies by personal interview, by telephone or by other means of
communication, without any additional compensation. We will also provide
persons, firms, banks and corporations holding shares in their names, or in
the names of their nominees, which in either case are beneficially owned by
others, with proxy materials for transmittal to the beneficial owners and we
will reimburse the record holders for their reasonable expenses in
transmitting those materials.
2
<PAGE>
PROPOSAL I--ELECTION OF DIRECTORS
The Board of Directors has fixed the number of directors at five, pursuant
to the By-laws of the Company. As of the date of this Proxy Statement, the
Board of Directors consists of five members each of which has consented to
stand for re-election. Each nominee will serve until the 2001 Annual Meeting
of the Company's stockholders or until their respective successors are duly
elected and qualified. A majority of shares present at the Annual Meeting is
required to be cast in favor of a nominee for the election of each of the
nominees listed below. At the Annual Meeting, the Common Stock represented by
proxies, unless otherwise specified, will be voted for the election of the
five nominees hereinafter named.
Although the Board of Directors does not contemplate that any of the
nominees will be unable to serve, if that situation arises prior to the Annual
Meeting, the persons named in the enclosed form of Proxy will vote for a
substitute nominee in accordance with their best judgment.
The following information is set forth with respect to the persons
nominated for election as a director.
Nominees for Election at the Annual Meeting
<TABLE>
<CAPTION>
DIRECTOR TERM
NAME AGE SINCE EXPIRES
---- --- -------- -------
<S> <C> <C> <C>
Tilman J. Fertitta (3)(4).................................. 42 1993 2000
Steven L. Scheinthal (3)................................... 38 1993 2000
Paul S. West (3)........................................... 41 1994 2000
James E. Masucci (1)(2).................................... 67 1993 2000
Joe Max Taylor (1)(2)(4)................................... 67 1993 2000
</TABLE>
--------
(1) Member of Audit Committee
(2) Member of Compensation and Stock Option Committee
(3) Member of Executive Committee
(4) Member of Nominating Committee
Mr. Fertitta has served as President and Chief Executive Officer of the
Company since 1987. In 1988, he became the controlling stockholder and assumed
full responsibility for all of the Company's operations. Prior to serving as
President and Chief Executive Officer of the Company, Mr. Fertitta devoted his
full time to the control and operation of a hospitality and development
company. Mr. Fertitta serves on the boards of the Houston Livestock Show and
Rodeo, Space Center Houston, the Children's Museum of Houston, The Greater
Houston Convention and Visitor's Bureau, the Crohn's and Colitis Foundation,
the Better Business Bureau of Houston, and the Childress Foundation.
Mr. Scheinthal has served as Vice President of Administration, General
Counsel and Secretary to the Company since September 1992. He devotes a
substantial amount of time to lease and contract negotiations and is primarily
responsible for the Company's compliance with all federal, state and local
ordinances. Prior to joining the Company, he was a partner in the law firm of
Stumpf & Falgout in Houston, Texas. Mr. Scheinthal represented the Company for
approximately five years before joining the Company. He has been licensed to
practice law in the state of Texas since 1984.
Mr. West has served as Vice President of Finance and Chief Financial
Officer of the Company since June 1993. Prior to joining the Company, Mr. West
was a senior manager at Deloitte & Touche and a leader of their
Restaurant/Entertainment Advisors Group in Dallas, Texas. He was responsible
for numerous restaurant audits and performed the annual restaurant industry
operations survey and study on behalf of the National Restaurant Association
and many state restaurant associations. Mr. West had been engaged in public
accounting and auditing since 1981, and has been a certified public accountant
since 1983.
3
<PAGE>
Mr. Masucci is self-employed as an advertising consultant. From 1956 until
June 1996 he was employed by Capital Cities/ABC ("ABC"). His last position
with ABC was as President and General Manager of KTRK-TV, an ABC owned station
in Houston, Texas, a position he held from August 1990 to June 1996. Prior to
serving as President, Mr. Masucci served in various executive positions with
KTRK-TV and has served as Division Vice President and Vice President of the
Broadcast Division of ABC.
Mr. Taylor is a director and member of the Executive Committee of American
National Insurance Company, a publicly traded insurance company. He also
serves on the Board and Audit Committee of the Transitional Learning Center of
Galveston and is President and a member of the Executive Committee of Moody
Gardens, Inc., which operates a public resort and entertainment facility in
Galveston, Texas. Mr. Taylor is also the chief law enforcement administrator
for Galveston County, Texas and serves on the Galveston County Pre-Trial Board
as well as the Board of Directors of Harbourview Care Center.
There were seven meetings of the Board of Directors held during 1999. All
of the current Board members attended 75% or more of the meetings of the Board
and committees of the Board on which they were members.
The Board of Directors recommends that stockholders vote "FOR" each nominee
for the Board of Directors.
EXECUTIVE OFFICERS
In addition to Messrs. Fertitta, Scheinthal and West, for which information
is provided above, the following person is an executive officer of the
Company.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<C> <C> <S>
Richard E. Ervin........................ 44 Vice President of Restaurant
Operations
</TABLE>
Mr. Ervin has served as Vice President of Restaurant Operations since 1991.
Prior to that time, he was the Vice President of Internal Controls and
Director of Beverage Operations. He has 16 years of experience in high volume,
multi-unit food and beverage operations. His experience includes new
restaurant development and employee training programs.
COMMITTEES OF THE BOARD OF DIRECTORS
The Company has an Executive Committee, an Audit Committee, a Compensation
Committee, a Nominating Committee and a Stock Option Committee. The Executive
Committee has and may exercise all of the authority of the Board of Directors
with respect to the management of the Company's business, except with respect
to certain specified matters that by law, the Articles of Incorporation or By-
Laws must be approved by the entire Board of Directors. The Executive
Committee met six times during 1999. All actions taken by the Executive
Committee were ratified unanimously by the Board of Directors. The Audit
Committee is responsible for (i) reviewing the scope of, and the fees for, the
annual audit, (ii) reviewing with the independent accountants the corporate
accounting practices and policies and recommending to whom reports should be
submitted within the Company, (iii) reviewing with the independent accountants
their final report, (iv) meeting with internal and independent accountants
during the year for consulting purposes. The Audit Committee met on two
occasions in 1999. The Compensation Committee determines the compensation of
the officers of the Company and performs other similar functions. The
Compensation Committee met on two occasions in 1999. The Stock Option
Committee grants options under the Company's Stock Option Plans and also
determines whether additional options should be granted to deserving key
employees. The Stock Option Committee met on two occasions in 1999. The
Nominating Committee selects appropriate candidates to be recommended to the
full Board of Directors and the stockholders for election as directors. The
Nominating Committee met once during 1999.
4
<PAGE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and holders of more than 10% of
the Common Stock to file with the Securities and Exchange Commission (the
"SEC") initial reports of ownership and reports of changes in ownership of
Common Stock. The Company believes, based solely on a review of the copies of
such reports furnished to the Company and written representations that no
other reports were required and that during the preceding fiscal year all of
the Company's directors, officers and holders of more than 10% of its Common
Stock complied with all Section 16(a) filing requirements, except that Mr.
Taylor and Mr. Masucci failed to timely file a Form 4 required to be filed
during 1999. Such reports have been filed with the SEC.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Record Date, certain information
regarding the beneficial ownership of the Company's Common Stock by (a) each
person known to the Company to own beneficially more than five percent of the
outstanding shares of the Company's Common Stock, (b) each director and
nominee for director of the Company, (c) each executive officer named in the
Summary Compensation Table below, and (d) all executive officers and directors
of the Company as a group. Unless otherwise indicated, each of the
stockholders has sole voting and investment power with respect to the shares
beneficially owned. The address of each of Messrs. Fertitta, Scheinthal, West,
Ervin, Masucci and Taylor, and Hospitality Entertainment, L.L.C.
("Hospitality") is 1400 Post Oak Blvd., Suite 1010, Houston, Texas 77056.
<TABLE>
<CAPTION>
SHARES
BENEFICIALLY
OWNED
-----------------
NAME OF BENEFICIAL OWNER NUMBER PERCENT
------------------------ --------- -------
<S> <C> <C>
Tilman J. Fertitta(1)(3)(4)................................ 5,950,000 24.2%
Steven L. Scheinthal(2).................................... 188,167 *
Paul S. West(2)............................................ 234,767 *
James E. Masucci(2)........................................ 16,000 *
Joe Max Taylor(2).......................................... 8,000 *
Richard E. Ervin(2)........................................ 109,001 *
Hospitality Entertainment, L.L.C.(3)....................... 2,090,000 8.8%
High Rock Capital LLC(4)................................... 1,755,400 7.4%
28 State Street, 18th Floor
Boston, Massachusetts 02109
Perkins Wolf McDonnel & Company(4)......................... 1,519,520 6.9%
53 W. Jackson Boulevard, Suite 722
Chicago, Illinois 60604
Dimensional Fund Advisors Inc.(4).......................... 1,454,914 6.1%
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401
All officers, directors and nominees as a group(5)
(6 persons)............................................... 6,505,935 25.9%
</TABLE>
--------
* Less than 1%.
(1) Includes 850,000 shares subject to options which are exercisable within
60 days of the Record Date and 2,090,000 shares owned of record by
Hospitality. Mr. Fertitta has a 90% Record ownership interest in
Hospitality (his wife owns the remaining 10%) and thus controls
Hospitality. Mr. Fertitta is deemed to share voting and dispositive power
with Hospitality with respect to such 2,090,000 shares.
(2) Includes 157,667, 155,667, 16,000, 8,000, and 102,001 shares subject to
options, respectively for the persons named in the above table, which are
exercisable within 60 days of the Record Date.
(3) Hospitality is the record owner of 2,090,000 shares or 8.4% of the
Company's Common Stock. Mr. Fertitta has a 90% interest membership
interest in Hospitality (his wife owns the remaining 10%) and is deemed
to share voting and dispositive power with Hospitality with respect to
such 2,090,000 shares.
(4) The information set forth herein has been compiled from filings made with
the SEC on Schedules 13-G dated as of February 15, 14 and 3, 2000
respectively. In each case, the named entity possesses sole or shared
beneficial ownership of the shares listed.
(5) Includes 1,289,335 shares subject to options for all officers and
directors as a group which are, or will become, exercisable within 60
days of the Record Date.
5
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth in summary, compensation paid by the Company
and its subsidiaries for the year ended December 31, 1999 to executive
officers of the Company whose cash compensation exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------- ------------
SECURITIES
BONUS UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY ($) ($)(1) OPTIONS (#)
--------------------------- ---- ---------- ------- ------------
<S> <C> <C> <C> <C>
Tilman J. Fertitta (3).................... 1999 585,000 315,000 0
President and Chief Executive Officer 1998 578,142 0 900,000
1997 525,000 325,000 750,000
Steven L. Scheinthal (2).................. 1999 188,461 115,000 0
Vice President of Administration, 1998 182,788 0 200,000
Secretary and General Counsel 1997 165,000 125,000 75,000
Paul S. West (2).......................... 1999 180,000 115,000 0
Vice President of Finance and Chief 1998 177,692 0 200,000
Financial Officer 1997 160,000 125,000 75,000
Richard E. Ervin (2)...................... 1999 131,723 75,000 0
Vice President of Restaurant Operations 1998 117,981 0 125,000
1997 105,000 75,000 50,000
</TABLE>
--------
(1) Bonuses were paid in the year after date indicated in table to reflect
accomplishments in the year indicated.
(2) These executive officers received personal benefits in addition to
salary. However, the Company has concluded that the aggregate amount of
such personal benefits do not exceed the lesser of $50,000 or 10% of
annual salary and bonus reported for each such executive.
(3) Mr. Fertitta received expense reimbursements totaling $74,000.
6
<PAGE>
The following table provides details regarding stock options granted in
1999 to executive officers named in the Summary Compensation Table. In
addition, in accordance with SEC rules, the hypothetical gains are shown that
would exist for the respective options based on assumed rates of annual
compounded growth in the stock price of 5% and 10% from the date the options
were granted over the full option term. The actual value, if any, an executive
may realize will depend on the spread between the market price and the
exercise price on the date the options are exercised.
<TABLE>
<CAPTION>
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
---------------------------------------- POTENTIAL REALIZABLE
% OF VALUE AT ASSUMED
NO. OF TOTAL ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE
UNDERLYING GRANTED APPRECIATION FOR
OPTIONS TO EXERCISE OPTION TERM
GRANTED IN EMPLOYEES PRICE EXPIRATION --------------------
NAME 1999 IN 1999 ($/SH) DATE 5%($) 10%($)
---- ---------- --------- -------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Tilman J. Fertitta...... -0- 0% N/A -- -- --
Steven L. Scheinthal.... -0- 0% N/A -- -- --
Paul S. West............ -0- 0% N/A -- -- --
Richard E. Ervin........ -0- 0% N/A -- -- --
</TABLE>
The following table shows the number of shares acquired upon exercise of
stock options in 1999, the value realized and the number of shares covered by
both exercisable and unexercisable stock options held by executive officers
named in the Summary Compensation Table at December 31, 1999. Also reported
are the value for the "in-the-money" options which represent the positive
spread between the exercise price of any such existing stock option and the
price of the Common Stock as of December 31, 1999.
AGGREGATED OPTIONS EXERCISED IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION/SAR VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
ACQUIRED VALUE OPTIONS AT END OF 1999 AT END OF 1999(1)
ON REALIZED ------------------------- -------------------------
NAME EXERCISE ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Tilman J. Fertitta...... 900,000 $2,418,750 800,000 100,000 $ -0- $ -0-
Steven L. Scheinthal.... -- -- 66,000 250,000 $ -0- $537,500
Paul S. West............ -- -- 64,000 250,000 $ -0- $537,500
Richard E. Ervin........ -- -- 41,667 160,333 $16,125 $335,938
</TABLE>
--------
(1) The values were determined on the basis of the closing Common Stock price
of $8.6875 on December 31, 1999, and equals the aggregate amount by which
the market value of the option shares exceeded the exercise price of
outstanding options.
7
<PAGE>
COMPENSATION OF DIRECTORS
Directors of the Company who are not executive officers received Director's
fees of $18,000 per year, plus the expenses incurred by them on behalf of the
Company in 1999. Non-employee Directors also receive $1,000 for each Audit,
Compensation, Building and Stock Option Committee meeting they attend. Each
current non-employee director has received stock options to acquire shares of
Common Stock under the Company's Non-Qualified Formula Stock Option Plan for
Non-Employee Directors (the "Non-Employee Director's Plan"). The Non-Employee
Director's Plan provides for the granting of nonqualified stock options to
non-employee directors of the Company. Pursuant to the Non-Employee Director's
Plan, 80,000 shares of Common Stock are reserved for issuance to eligible non-
employee directors of the Company or its subsidiaries. The Non-Employee
Director's Plan is administered by the President of the Company and requires
that the purchase price under each option must not be less than 100% of the
fair market value (as defined in the Non-Employee Director's Plan) of the
Common Stock at the time of the grant of the option. Full payment for shares
purchased upon exercise of an option must be made at the time of exercise and
no shares may be issued until full payment is made. Options granted pursuant
to the Non-Employee Director's Plan generally vest in five installments
beginning no earlier than the first anniversary of the date of grant, and the
options expire ten years from the grant date. The Non-Employee Director's Plan
provides that an option agreement may include a provision for permitting an
optionee the right to deliver previously owned shares of Common Stock in
partial or full payment for shares to be purchased upon exercise of an option.
In 1995, the Director's Plan was amended to provide that each non-employee
director who received a grant of an option on the date such person was elected
a director would receive an additional option in the amount of 2,000 shares
each time such person was elected for an additional term as a director.
Pursuant to the Non-Employee Director's Plan, each current non-employee
director initially received an option to purchase 10,000 shares of Common
Stock at $6 per share and received options to purchase an aggregate of 8,000
shares at any average price of $20.96 upon their re-elections in 1995 through
1998. In 1999, they received options to acquire 2,000 shares at a price of
$7.69 per share. In 1999, in connection with their positions as Director as
well as their functions as members of Committees of Non-Employee Independent
Directors, Messrs. Masucci and Taylor were each paid $45,000.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
In August 1993, the Board of Directors established a Compensation Committee
to review and approve the compensation levels of members of management,
evaluate the performance of management, consider management succession and
consider any related matters for the Company. The Committee is charged with
reviewing with the Board of Directors in detail all aspects of compensation
for the executive officers of the Company.
The philosophy of the Company's compensation program is to employ, retain
and reward executives capable of leading the Company in achieving its business
objectives. These objectives include creating and preserving strong financial
performance, increasing the assets of the Company, positioning the Company's
assets and business operations in geographic markets and industry segments
offering long-term growth opportunities, enhancing stockholder value, and
ensuring the survival of the Company. The accomplishment of these objectives
is measured against conditions prevalent in the industry within which the
Company operates. In recent years these conditions reflect a highly
competitive market environment and rapidly changing regional geographic and
overall industry market conditions.
The available forms of executive compensation include base salary, cash
bonus awards and stock options. Each component is intended to serve the
Compensation Committee's philosophy; however, performance of the Company is a
key consideration. The Company's compensation policy recognizes, however, that
stock price performance is only one measure of performance and, given industry
business conditions and the long term strategic direction and goals of the
Company, it may not necessarily be the best current measure of executive
performance. Therefore, the Company's compensation policy also gives
consideration to the Company's achievement of specified business objectives
when determining executive officer compensation. An additional
8
<PAGE>
objective of the Compensation Committee has been to reward executive officers
with equity compensation in addition to salary in keeping with the Company's
overall compensation philosophy, which attempts to place equity in the hands
of its key employees in an effort to further instill stockholder
considerations and values in the actions of all the key employees and
executive officers.
In furtherance of the Company's compensation philosophy and goal of
employing, retaining and rewarding its executives who have demonstrated a
desire and ability to lead the Company in the pursuit of its business
objectives, the Company entered into Personal Service and Employment
Agreements with the CEO and with Steven L. Scheinthal, Paul S. West and
Richard E. Ervin (Messrs. Scheinthal, West and Ervin are collectively referred
to as the "Additional Executives"). The employment agreements, which are
discussed in more detail below, became effective as of January 1, 1998 and
established the framework for the initial base salary payable to the CEO and
each of the Additional Executives in 1999, established the number of options
available to the CEO and each of the Additional Executives, and further
provided for additional bonus awards under any bonus programs established by
the Company and/or, based upon merit and Company performance, from the
Compensation Committee. The employment agreements also provided for certain
additional executive benefits and perquisites to be provided to each of the
CEO and the Additional Executives.
The employment agreements established the initial salary payable in 1998
for the CEO and each of the Additional Executives. Each executive officer's
salary is thereafter reviewed at least annually and was reviewed in 1999. In
establishing the initial salary payable to the CEO and the Additional
Executives, the Compensation Committee considered a number of factors. The
factors included a review and evaluation of the compensation and salary levels
for similar level executives for other comparable companies in the industry,
the achievement of specified business objectives during the prior fiscal years
including progress made by the Company in increasing the number of
restaurants, improving revenues, income and operating cash flows and progress
made by the Company in product development and improvements in customer
satisfaction. Based upon such considerations, the Compensation Committee
determined the following 1999 fiscal base salary levels to be fair and
appropriate for the CEO and Additional Executives taking into consideration
the level of salary compensation paid to the other officers of the Company and
the salaries payable to other similarly situated executives at the Company's
industry peers: Mr. Fertitta-$585,000; Mr. Scheinthal-$190,000; Mr. West-
$180,000; and, Mr. Ervin-$135,000.
COMPENSATION COMMITTEE
James E. Masucci
Joe Max Taylor
----------------
9
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No member of the Compensation Committee is or has been an officer or
employee of the Company or any of its subsidiaries. The members of the
Compensation Committee had no other relationships with the Company requiring
disclosure pursuant to Item 404 of SEC Regulation S-K. No executive officer of
the Company served as a member of the compensation committee (or other board
committee performing similar functions or, in the absence of any such
committee, the entire Board of Directors) of another corporation, one of whose
executive officers served on the Compensation Committee. No executive officer
of the Company served as a director of another corporation, one of whose
executive officers served on the Compensation Committee. No executive officer
of the Company served as a member of the Compensation Committee (or other
board committee performing equivalent functions or, in the absence of any such
committee, the entire Board of Directors) of another corporation, one of whose
executive officers served as a director of the Company.
EMPLOYMENT CONTRACTS AND CHANGE-IN-CONTROL ARRANGEMENTS
The Company has entered into Personal Service and Employment Agreements
with the CEO and each of the Additional Executives which set forth the general
terms and conditions of their employment for the period commencing January 1,
1998 through December 31, 2002. Each of the executives has the right to
voluntarily terminate his employment upon 90 day's notice. Terms used herein
are defined in each Executive's specific contract.
Pursuant to the terms and provisions of the Personal Service and Employment
Agreement between the Company and Mr. Fertitta (the "CEO's Agreement"), Mr.
Fertitta has agreed to serve as President and Chief Executive Officer of the
Company through December 31, 2002, and is subject to automatic five-year
extensions. The CEO's Agreement provides that Mr. Fertitta will devote
substantially all of his time and attention to the business and affairs of the
Company and will receive, among other things, an annual base salary in an
amount not less than $585,000, annual cash bonuses in amounts determined by
the Compensation Committee, and stock options covering at least 900,000 shares
which were granted with an exercise price of $6.00 per share and were
exercised in 1999. Mr. Fertitta is also entitled to a split-dollar life
insurance policy and certain other benefits and perquisites, including use of
a Company automobile and other transportation facilities, certain memberships,
and matching charitable contributions. However, such split-dollar life
insurance was not obtained for Mr. Fertitta during 1999.
In the event Mr. Fertitta's employment is terminated as a result of his
death or disability (as defined in the CEO's Agreement), he, or his legal
representative, will be entitled to receive all compensation he would
otherwise have been entitled to receive throughout the remaining term of the
employment period as well as other death or disability benefits provided by
the Company. In addition, any stock options shall immediately vest. In the
event Mr. Fertitta's employment is terminated (i) by him other than for Good
Reason, or (ii) by the Company for Cause, Mr. Fertitta will receive all
accrued compensation and other amounts owed to him as of the date of
termination. In the event Mr. Fertitta's employment is terminated (i) by the
Company other than for Cause, (ii) by Mr. Fertitta for Good Reason or (iii)
after a Change in Control, Mr. Fertitta will be entitled to receive; (a) a
lump sum payment of $3,000,000 in consideration of his agreement not to
compete with the Company, (b) an amount equal to two years' base salary, (c)
an additional lump sum payment in lieu of the split-dollar life insurance
policy, and (d) a continuation of certain other employee benefits.
The provisions of the Personal Service and Employment Agreements of the
Additional Executives (the "Additional Executive Agreements") are
substantially similar, differing only with respect to the specific amounts or
value of certain items of compensation to which each additional Executive is
entitled. Under the Additional Executive Agreements, the Additional Executives
will receive the following minimum annual base salaries: Mr. Scheinthal-
$185,000; Mr. West-$180,000; and Mr. Ervin-$120,000. Each Additional Executive
is entitled to split-dollar life insurance, matching charitable contributions
and certain other benefits and perquisites in addition to those made available
to the Company's management generally. The Additional Executives were also
granted
10
<PAGE>
stock options for the following number of shares: Mr. Scheinthal-200,000
shares; Mr. West-200,000 shares; and Mr. Ervin-125,000 shares at an exercise
price of $6.00 per share.
In the event an Additional Executives' employment is terminated as a result
of his death or disability, he, or his legal representative, will receive his
base salary throughout the remainder of the term, as well as benefits provided
by the Company. In addition, any stock options that the Additional Executive
received will immediately vest. In the event an Additional Executive's
employment is terminated (i) by him other than for Good Reason or (ii) by the
Company for Cause, the Additional Executive shall only be entitled to receive
accrued compensation and unpaid expenses through his termination date. In the
event an Additional Executive's employment is terminated by the Company other
than for Cause, the Additional Executive shall be entitled to receive, his
base salary for a period of twelve months and maintenance of all insurance
benefits. In the event any Additional Executive's employment is terminated
following a Change in Control, the Additional Executive will: (i) receive a
lump sum payment in consideration of his agreement not to compete in the
following respective amounts: Mr. Scheinthal-$1,500,000; Mr. West-$1,500,000
and Mr. Ervin-$750,000, (ii) receive those benefits as he would have otherwise
been entitled to receive had he been terminated by the Company other than for
Cause, (iii) have all stock options not yet vested immediately vest, and (iv)
receive a continuation of certain other employee benefits.
11
<PAGE>
Notwithstanding anything to the contrary set forth in any of the Company's
previous filings under the Securities Act of 1933, as amended, or the
Securities Exchange Act of 1934, as amended, that might incorporate future
filings, including this Proxy Statement, in whole or in part, the following
Performance Graph and the previous Report of the Compensation Committee of
Landry's Seafood Restaurants, Inc. on Executive Compensation shall not be
incorporated by reference into any such filings.
PERFORMANCE GRAPH
The following line graph compares the Company's cumulative total
stockholder return with the cumulative total stockholder return of the Dow
Jones Global Index and the Dow Jones Restaurant Index for the period from
January 1, 1995 through December 31, 1999, assuming in each case an initial
investment of $100 on January 1, 1995:
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
LANDRY'S SEAFOOD RESTAURANTS, INC., DOW JONES GLOBAL
INDEX, AND DOW JONES RESTAURANT INDEX
[Graph Appears Here]
<TABLE>
<CAPTION>
01/01/95 12/31/95 12/31/96 12/31/97 12/31/98 12/31/99
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Dow Jones Global Index.. 100 134 162 213 270 321
Dow Jones Restaurant.... 100 142 143 147 221 217
Landry's Seafood
Restaurants, Inc....... 100 120 151 169 53 61
</TABLE>
12
<PAGE>
CERTAIN TRANSACTIONS
The policy of the Company is, to the extent practicable, to avoid
transactions (except those which are employment related) with officers,
directors, and affiliates. In any event, any such transactions will be entered
into on terms no less favorable to the Company than could be obtained from
third parties, and such transactions will be approved by a majority of the
disinterested directors of the Company.
Effective January 1, 1996, the Company entered into a Consulting Service
Agreement (the "Agreement") with Fertitta Hospitality, LLC ("Fertitta
Hospitality"), which is jointly owned by Mr. Fertitta and his wife. Pursuant
to the Agreement, the Company provides limited services to Fertitta
Hospitality with respect to management and operational matters,
administrative, personnel and transportation matters. The Company receives a
fee of $2,500 per month under the Agreement plus the reimbursement of all out-
of-pocket expenses and such additional compensation as may be agreed upon. The
Agreement provides for a one-year term which is automatically renewed unless
either party terminates the Agreement upon 30 days' written notice to the
other party. The Consulting Services Agreement was entered into between
related parties and was not the result of arm's-length negotiations.
Accordingly, the terms of this transaction may have been more or less
favorable to the Company than might have been obtained from unaffiliated third
parties. The Company believes that the terms of the transaction were at least
as favorable to the Company as that which could have been obtained in arm's-
length transactions with an unaffiliated party.
In 1998, the Company entered into an agreement with Loop 610 Venture,
L.L.C. ("Loop 610 Venture"), a company wholly-owned by the CEO, whereby the
Company would sell to Loop 610 Venture a four-acre undeveloped tract of land
at a third-party appraised value of approximately $5,360,000 (approximately
$700,000 more than the original purchase price paid by the Company), and Loop
610 Venture would construct an office building and retail establishments on
the land. In 1999, the Company entered into a ground lease agreement with Loop
610 Venture for approximately one-third of the undeveloped land so that Loop
610 Venture could develop a retail facility. The ground lease is for a term of
five years with one option renewal period. Under the terms of the ground
lease, Loop 610 Venture agreed to pay the Company base rent and pro-rata real
property taxes and insurance in the amount of approximately $16,000 per month.
In April 2000, the agreement with Loop 610 Venture was terminated, and Loop
610 Venture received an option to acquire, at various defined prices, all or
certain designated portions of land for expansion of its retail facility or
for warehouse usage. As part of the termination agreement the ground lease has
remained in place, and the Company has contracted on its own behalf for
construction of an office building on its land to be utilized as the Company's
corporate headquarters.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Company's independent public accountants for the fiscal year ended
December 31, 1999, were, and for the fiscal year ending, December 31, 2000,
will be, the firm of Arthur Andersen LLP. It is anticipated that one or more
representatives of such firm will attend the Annual Meeting. Such
representatives will be given an opportunity to make statements at the Annual
Meeting, if they so desire, and are expected to be available to respond to
appropriate questions.
STOCKHOLDER PROPOSALS
Any stockholder who intends to present a proposal at the 2001 Annual
Meeting of Stockholders for inclusion in the Proxy Statement and form of proxy
relating to that meeting is advised that the proposal must be received by the
Company at its principal executive offices not later than February 24, 2001.
The Company will not be required to include in its proxy statement or form of
proxy a stockholder proposal which is received after that date or which
otherwise fails to meet requirements for stockholder proposals established by
regulations of the Securities and Exchange Commission.
13
<PAGE>
OTHER MATTERS
The solicitation of proxies is made by and on behalf of the Board of
Directors. The cost of the solicitation will be borne by the Company, including
the reasonable expenses of brokerage firms or other nominees for forwarding
proxy materials to beneficial owners. In addition to solicitation by mail,
proxies may be solicited by telephone, telegraph or personally. Proxies may be
solicited by directors, officers and employees of the Company without
additional compensation.
If any other matters shall come before the Annual Meeting, the persons named
in the proxy, or their substitutes, will vote thereon in accordance with their
judgment. The Board of Directors does not know of any other matters which will
be presented for action at the Annual Meeting.
FORM 10-K
The Company will furnish without charge to each person whose proxy is being
solicited, upon request of any such person, a copy of the Annual Report of the
Company on Form 10-K for the fiscal year ended December 31, 1999 as filed with
the Securities and Exchange Commission, including the financial statements and
schedules thereto, but not the exhibits. Requests for copies of such report
should be directed to Steven L. Scheinthal, Secretary, Landry's Seafood
Restaurants, Inc., 1400 Post Oak Boulevard, Suite 1010, Houston, Texas 77056.
Copies of any exhibit to the Form 10-K will be forwarded upon receipt of a
written request therefore addressed to Mr. Scheinthal.
EACH STOCKHOLDER WHO DOES NOT EXPECT TO ATTEND THE ANNUAL MEETING IN PERSON
IS URGED TO EXECUTE THE PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED
ENVELOPE.
By Order of the Board of Directors,
/s/ STEVEN L. SCHEINTHAL
-------------------------------------
Steven L. Scheinthal,
Secretary
June 27, 2000
14
<PAGE>
LANDRY'S SEAFOOD RESTAURANTS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
Tilman J. Fertitta, Steven L. Scheinthal and Paul S. West or any of them,
with power of substitution of each, are hereby authorized to represent the
undersigned at the Annual Meeting of Stockholders of Landry's Seafood
Restaurants, Inc., to be held at Willie G's Seafood and Steak House, 1605 Post
Oak Blvd., Houston, Texas 77056, on August 17, 2000, at 11:00 a.m., and any
adjournment or adjournments thereof, and to vote the number of shares which the
undersigned would be entitled to vote if personally present.
To vote in accordance with the Board of Directors' recommendations, just
sign the reverse side; no boxes need be checked.
(Continued and to be signed on reverse side)
<PAGE>
Please date, sign and mail your
proxy card back as soon a possible!
Annual Meeting of Stockholders
LANDRY'S SEAFOOD RESTAURANTS, INC.
August 17, 2000
Please Detach and Mail in the Envelope Provided
[X] Please mark your
votes as in this
example.
1. Election of FOR AGAINST
Directors [_] [_] Nominees: Tilman J. Fertitta
Steven L. Scheinthal
Paul S. West
James E. Masucci
Joe Max Taylor
For all nominees except as notes below:
[_] __________________________________________________________________________
2. In their discretion, upon such other matters as
properly come before the meeting.
When properly executed, this proxy will be voted as designated hereon by the
undersigned. If no choice is specified, the proxy will be voted "FOR" the
election of all nominees for Director listed hereon and, according to the
discretion of the proxy holders, on any other matters that may properly come
before the Annual Meeting or any and all postponements or adjournments
thereof.
PLEASE DO NOT FOLD OR MUTILATE THIS CARD
NOTE: Please sign exactly as your name appears on this card. On joint
accounts, each joint holder should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give your full title as such. If
a corporation, please sign in full corporate name by President or other
authorized person. If a partnership, please sign in partnership name by
authorized person.
Please mark, sign, date and return this proxy card promptly using the
enclosed envelope.
SIGNATURE ___________________________________ DATE _______________, 2000
SIGNATURE ___________________________________ DATE _______________, 2000
H-195773.4
