SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: May 9, 1996
Date of Earliest Event Reported: May 1, 1996
Houlihan's Restaurant Group, Inc.
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(Exact name of registrant as specified in its charter)
Delaware
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(State or other jurisdiction of incorporation or organization)
33-66392 43-0913506
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(Commission File Number) (I.R.S. Employer Identification No.)
Two Brush Creek Boulevard, Kansas City, Missouri 64112
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(Address of principal executive office, including zip code)
(816) 756-2200
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(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On May 1, 1996, Houlihan's Restaurant Group, Inc. ("Houlihan's") and
Zapata Corporation ("Zapata") entered into a letter of intent relating to
Zapata's proposed acquisition of Houlihan's for a combination of cash and stock
amounting to $8.00 per share. The letter of intent contemplates the merger of
Houlihan's into a newly organized subsidiary of Zapata with each share of
Houlihan's stock being converted into $4.00 in cash, without interest, and $4.00
in average market value of Zapata common stock for a specified number of trading
days prior to the effective date of the merger. Houlihan's stockholders not
affiliated with Malcolm I. Glazer, the owner of 73.3% of Houlihan's outstanding
stock and 35.2% of Zapata's outstanding stock, will have the right to elect,
subject to proration as described below, to receive 100% cash in the merger for
their Houlihan's shares. If the unaffiliated stockholders as a group exercise
elections to receive such an amount of cash in the merger that the aggregate
ownership of Zapata stock by Malcolm I. Glazer and his affiliates after the
merger would exceed 49.9% of Zapata's then outstanding stock, the cash elections
of the unaffiliated stockholders will be reduced pro rata to assure that the
49.9% ownership threshold is not exceeded.
The transaction is subject to the negotiation and execution of a
definitive merger agreement and other customary conditions, including, among
other things, approval of the transaction by the directors and stockholders of
both companies, compliance with the Hart-Scott- Rodino Antitrust Improvements
Act, registration of the Zapata shares issuable in the merger under the
Securities Act of 1933 and receipt of consent from Houlihan's lending bank or
the refinancing of Houlihan's outstanding bank debt.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
The Exhibit listed in the Index to Exhibits is filed as part
of this Current Report on Form 8-K.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HOULIHAN'S RESTAURANT GROUP, INC.
By: /s/ William W. Moreton
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William W. Moreton
Executive Vice President/
Chief Financial Officer
(Principal Financial and
Accounting Officer)
Date: May 9, 1996
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
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2 Letter of Intent between Houlihan's Restaurant Group, Inc.
and Zapata Corporation
[ZAPATA CORPORATION LOGO]
April 30, 1996
Houlihan's Restaurant Group, Inc.
2 Brush Creek Boulevard
Kansas City, Missouri 64112
Attention: Mr. William W. Moreton
Executive Vice President
and Chief Financial Officer
Gentlemen:
A special committee ("Special Committee") of the Board of Directors of Zapata
Corporation, a Delaware corporation ("Zapata"), has developed and hereby submits
to you for your consideration this revised letter of intent relating to Zapata's
acquisition of 100% of the outstanding common stock of Houlihan's Restaurant
Group, Inc. ("HOL") for a combination of cash and stock (the "Proposal"). Zapata
suggests that the combination be effected through a merger of HOL into a
wholly-owned subsidiary of Zapata. Subject to the cash election feature noted
below, each outstanding share of common stock of HOL would be converted in the
merger into $4.00 in cash, without interest, and $4.00 in market value of Zapata
common stock. Shareholders that are not affiliated with Malcolm Glazer could
elect, subject to proration as noted below, to receive 100% cash in the merger
for their HOL shares. To the extent unaffiliated stockholders exercise their
cash elections, (a) the number of shares of Zapata common stock issuable to such
unaffiliated stockholders in the merger will decrease and the amount of cash
payable to them will increase and (b) the number of shares of Zapata common
stock issuable to Malcolm Glazer and his affiliates in the merger will increase
and the amount of cash payable to them will decrease. In the event that the
unaffiliated stockholders as a group exercise elections to receive such an
amount of cash in the merger that the aggregate ownership of Zapata common stock
by Malcolm Glazer and his affiliates after the merger would exceed 49.9% of
Zapata's then outstanding common stock, the cash elections of the unaffiliated
stockholders would be reduced pro rata to assure that the foregoing 49.9%
ownership threshold is not exceeded.
The market value of the shares of Zapata common stock issuable in the merger
will be based upon the average of the closing prices for such stock on the New
York Stock Exchange for a specified number of trading days prior to the
effective date of the merger to be negotiated.
The transaction will be effected pursuant to a definitive merger agreement that
will be generally on the terms of the draft merger agreement that we heretofore
delivered to you, with such changes therein as may be negotiated by the Special
Committee and the special committee of the board of directors of HOL. Zapata is
the Parent referred to in that agreement, and HOL is the
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Houlihan's Restaurant Group, Inc.
April 30, 1996
Page 2
Company referred to therein. Attached hereto as Exhibit A is a suggested draft
form of joint press release relating to the Proposal.
The matters referred to herein constitute an expression of our mutual intention
only and do not constitute a binding agreement between us with respect to the
Proposal. Any such agreement would only arise as a result of the negotiation,
execution and delivery of a written definitive agreement, whether in the form
previously submitted to you or otherwise, having terms and conditions
satisfactory to each of us. Neither of us may bring any claim or action against
the other as a result of the failure to agree on or enter into any definitive
agreement as contemplated herein. Nothing in this letter, however, shall affect
the enforceability of the Confidentiality Agreement dated December 1, 1995
between Zapata and HOL.
If this letter correctly reflects our understanding, please sign one original
and return it to the undersigned, retaining the other in your files.
Very truly yours,
ZAPATA CORPORATION
By: /s/ R.C. Lassiter
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Name: R. C. Lassiter
Title: Chairman of Special
Committee
Facsimile (for notices):
713-940-6280
ACCEPTED AND AGREED TO
as of May 1, 1996
HOULIHAN'S RESTAURANT GROUP, INC.
By: /s/ William W. Moreton
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Name: William W. Moreton
Title: Executive Vice President/CFO
Facsimile (for notices) 816-561-2842
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EXHIBIT A
HOULIHAN'S RESTAURANT GROUP, INC.
From: William W. Moreton, EVP/CFO FOR IMMEDIATE RELEASE
Houlihan's Restaurant Group, Inc.
816-756-2200
May 1, 1996 (ZOS-NYSE)- - - Zapata Corporation ("Zapata") and Houlihan's
Restaurant Group, Inc. ("Houlihan's") announced today that they have entered
into a letter of intent relating to Zapata's proposed acquisition of Houlihan's
for a combination of cash and stock amounting to $8.00 per share. In view of
Malcolm I. Glazer's ownership of 35.2% of Zapata's 29.5 million outstanding
shares of common stock and 73.3% of Houlihan's 10.0 million outstanding shares
of common stock, the letter of intent was negotiated by representatives of
special committees of the directors of both Zapata and Houlihan's who are not
members of the Glazer family. The proposed transaction represents another step
in Zapata's transformation into a food service company.
Zapata and Houlihan's have proposed a merger of Houlihan's into a newly
organized subsidiary of Zapata with each share of Houlihan's stock being
converted into $4.00 in cash, without interest, and $4.00 in average market
value of Zapata common stock for a specified number of trading days prior to the
effective date of the merger. It is proposed that shareholders not affiliated
with Malcolm Glazer would be afforded the opportunity to elect, subject to
proration as noted below, to receive 100% cash in the merger for their
Houlihan's shares. In the event that the unaffiliated stockholders as a group
exercise elections to receive such an amount of cash in the merger that the
aggregate ownership of Zapata common stock by Malcolm Glazer and his affiliates
after the merger would exceed 49.9% of Zapata's then outstanding common stock,
the cash elections of the unaffiliated stockholders will be reduced pro rata to
assure that the foregoing 49.9% ownership threshold is not exceeded.
Any transaction would be subject to the negotiation and execution of a
definitive merger agreement and, among other things, approval of the transaction
by the directors and stockholders of both companies, compliance with the
Hart-Scott-Rodino Antitrust Improvements Act, registration of the Zapata shares
issuable in the merger under the Securities Act of 1933 and receipt of consent
from Houlihan's lending bank or the refinancing of Houlihan's outstanding bank
debt. There can be no assurance that a transaction will be consummated or, if
consummated, will be on the terms as proposed.
Zapata also announced that Malcolm Glazer has entered into a standstill
agreement with Zapata. Under the standstill agreement, Mr. Glazer has agreed on
behalf of himself, his family and entities controlled by him not to increase his
or their ownership of voting securities in Zapata above 49.9% on either an
outstanding or fully diluted share basis, unless, among other things, such
increase is approved by a majority of the directors on the Zapata board who are
not members of the Glazer family or is in response to a tender offer or other
proposal by others to acquire more than 14.9% of Zapata's voting securities.
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As long as the standstill agreement is in effect, Mr. Glazer will have
a right of first purchase to maintain his proportionate ownership position in
Zapata. Generally, Zapata will have the right to acquire any voting securities
sought to be transferred by Mr. Glazer. Mr. Glazer will be permitted to sell
voting securities free of Zapata's purchase option in a number of circumstances,
including sales or transfers to a purchaser that agrees to be bound by the terms
of the standstill agreement, pursuant to a public distribution, in response to a
tender offer by an unaffiliated third party for at least 14.9% of Zapata's
outstanding voting securities, in connection with certain corporation
reorganizations or upon conversion, exchange or exercise of outstanding
securities. As long as Mr. Glazer owns more than 9.9% of the voting securities
of Zapata, Zapata has agreed generally not to solicit proposals for the
acquisition of Zapata although it has reserved the right to respond to
unsolicited proposals from others.
Under the standstill agreement, any combinations between Zapata and
other entities in which Mr. Glazer owns 15% or more of the voting equity, such
as Houlihan's, must be negotiated and approved by a special committee of
Zapata's directors. In the event of a proposed acquisition of a Glazer
controlled entity, Mr. Glazer has agreed to grant the special committee
evaluating such acquisition an irrevocable proxy to vote all of Mr. Glazer's
Zapata shares in such manner as the committee in its sole discretion determines.
The standstill agreement terminates upon, among other events, the first
to occur of eighteen months after Zapata's acquisition of Houlihan's, Zapata's
announcement that it does not intend to acquire Houlihan's, the acquisition by
another of securities representing 20% of the voting power attributable to
Zapata's outstanding capital stock, a breach of the terms of the standstill
agreement by Zapata or Mr. Glazer's acquisition of more than 50% of Zapata's
outstanding voting securities in accordance with terms of the agreement. In the
event that Zapata announces its intention to acquire another Glazer controlled
entity prior to the expiration of the standstill agreement, the termination date
of the standstill agreement will be automatically extended until the first to
occur of eighteen months after the acquisition of such entity or Zapata's
announcement that it does not intend to acquire such entity.
Houlihan's Restaurant Group, Inc. (OTC Bulletin: HOUL) and its
wholly-owned subsidiary, Houlihan's Restaurants, Inc. and its subsidiaries
operate full service, casual dining restaurants in 23 states. At May 1, 1996 it
operates 99 restaurants, including 61 Houlihan's, 28 Darryl's, four upscale
Seafood Grills and six Specialty Restaurants comprised of four dinnerhouses, one
upscale steakhouse, and the Buena Vista Cafe. At that date, the Company also
franchises 22 Houlihan's restaurants in ten states and the Commonwealth of
Puerto Rico.
