<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 14D-9
(AMENDMENT NO. 1)
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
------------------------
POLLO TROPICAL, INC.
(NAME OF SUBJECT COMPANY)
POLLO TROPICAL, INC.
(NAME OF PERSON FILING STATEMENT)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
731513 10 7
(CUSIP NUMBER OF CLASS OF SECURITIES)
LARRY J. HARRIS
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
POLLO TROPICAL, INC.
7300 N. KENDALL DRIVE
MIAMI, FLORIDA 33156
(305) 670-7696
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON
AUTHORIZED TO RECEIVE NOTICE AND COMMUNICATIONS
ON BEHALF OF THE PERSON FILING STATEMENT)
Copies To:
BRUCE E. MACDONOUGH
GREENBERG TRAURIG HOFFMAN LIPOFF ROSEN & QUENTEL, P.A.
1221 BRICKELL AVENUE
MIAMI, FLORIDA 33131
(305) 579-0500
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
This Amendment No. 1 amends and supplements the Solicitation/Recommendation
Statement on Schedule 14D-9 filed with the Securities and Exchange Commission
(the 'Commission') by Pollo Tropical, Inc., a Florida corporation (the
'Company'), on June 10, 1998 (as heretofore amended, the 'Schedule 14D-9'), and
relates to the tender offer made by Carrols Corporation, a Delaware corporation
('Carrols'), disclosed in a Tender Offer Statement on Schedule 14D-1 filed with
the Commission on June 10, 1998, as heretofore amended, to purchase all of the
outstanding shares of the Company's common stock, $.01 par value per share (the
'Shares'), at a purchase price of $11.00 per Share, net to the seller in cash,
on the terms and subject to the conditions set forth in Carrols' Offer to
Purchase, dated June 10, 1998, and the related Letter of Transmittal. The
purpose of this Amendment No. 1 is to amend Item 4 of the Schedule 14D-9 and the
Information Statement attached as Annex A thereto as set forth below. Terms
defined in the Schedule 14D-9 are used in this Amendment No. 1 with the same
meanings as provided in the Schedule 14D-9.
ITEM 4. THE SOLICITATION OR RECOMMENDATION.
The third to the last paragraph of Item 4 of the Schedule 14D-9 is hereby
amended and restated as follows:
In arriving at its decision to approve the Offer and Merger and recommend
that the Company's shareholders accept the Offer and tender their Shares, the
Board of Directors of the Company considered a number of factors, including,
without limitation, the following:
(i) The Board's approval and recommendation are supported by the
establishment of the Special Committee to make an independent determination
as to the fairness of the Offer and Merger and to negotiate at arms'-length
the financial and other terms and conditions of the Offer and the Merger
Agreement with representatives of Carrols, given the potential conflict of
interest of certain directors. The Board's decision was supported
specifically by such terms and conditions as the per Share offer price
which represented a substantial premium over historical trading prices, the
Tender Agreement entered into by the Harris Shareholders (see 'Tender
Agreement' above), the fact that the Offer and Merger were not expressly
conditioned on the availability of financing, the acceleration, vesting and
payment in respect of outstanding Company Stock Options and the right of
the Company to terminate the Merger Agreement in order to approve a more
favorable business combination.
(ii) The Board's approval and recommendation are supported by the fact
that the $11.00 per Share price to be received by the Company's
shareholders in both the Offer and the Merger represented a substantial
premium over the historical trading prices for the Shares in the last three
years, including a premium over the closing market price of $7.94 per Share
on March 12, 1998, the last full trading day prior to the public
announcement of the Company's receipt of the Harris Proposal, and of $10.00
on June 3, 1998, the last full trading day prior to the public announcement
of the Merger Agreement.
(iii) The Board's approval and recommendation are supported by the
Company's projected financial performance and competitive position,
including its disappointing financial performance in connection with its
previous expansion in non-core markets, its current strategy to open
Company restaurants only in South and Central Florida and to franchise in
Latin America and the Caribbean and the low revenue and earnings growth
projected for such a strategy.
(iv) The Board's approval and recommendation are supported by the oral
opinion of NMS, later confirmed in writing, addressed and delivered to the
Special Committee of the Board of Directors on May 29, 1998 as to the
fairness as of such date from a financial point of view of the
consideration to be received by the shareholders of the Company pursuant to
the Merger Agreement. It contains certain important qualifications and a
description of assumptions made, matters considered, areas of reliance on
others and limitations on the review undertaken by NMS, and is incorporated
herein in its entirety. THE NMS OPINION, WHICH IS LIMITED TO AN ASSESSMENT,
AS OF ITS DATE, OF THE FAIRNESS OF THE PROPOSED CONSIDERATION FROM A
FINANCIAL POINT OF VIEW, IS ADDRESSED SOLELY TO THE SPECIAL COMMITTEE FOR
ITS USE IN CONNECTION WITH ITS REVIEW AND APPROVAL OF THE MERGER AGREEMENT,
AND DOES NOT CONSTITUTE A RECOMMENDATION AS TO HOW ANY HOLDER OF SHARES
SHOULD VOTE WITH RESPECT TO THE MERGER, OR WHETHER OR NOT ANY HOLDER OF
SHARES SHOULD TENDER SHARES IN THE OFFER. A copy of NMS's written opinion
is attached to this Schedule 14D-9 as Annex B.
(v) The Board's approval and recommendation are supported by the
presentation of NMS to the Board of Directors at its meeting on May 29,
1998, as to various financial and other matters including, among other
things, (a) an analysis of premiums paid in recent transactions similar in
size to the Offer and Merger, (b) a review of public information with
respect to certain other growth restaurants with performance issues, (c) a
<PAGE>
review of the historical stock prices and trading volumes of the Shares,
(d) an analysis of the Offer Price as a multiple of various measures of the
Company's operating performance, and (e) the financial terms of recent
comparable business combinations in the restaurant industry. With respect
to its premiums paid analysis, NMS reviewed the consideration paid in
comparable merger and acquisition transactions (excluding technology and
biotechnology transactions) involving consideration of between $50 million
and $200 million that have been announced since January 1997. NMS
calculated the premiums paid in these transactions over the applicable
stock prices of the target companies prior to the announcement of the
acquisition and compared these premiums to the closing market price of
$7.94 per Share on March 12, 1998 and the $11.00 per Share to be paid in
the Offer. With respect to its public company analysis, NMS calculated a
range of implied values for the Shares based on a comparison of revenues
and cash flows for the last twelve months and estimated earnings for 1998
and 1999 of the Company and twelve other publicly traded comparable growth
restaurant companies with performance issues. With respect to its
comparable business combination analysis, NMS reviewed the consideration
paid in comparable merger and acquisition transactions in the restaurant
industry that have been announced since February 1992 and calculated
multiples of revenues and cash flows to produce a range of implied values
for the Shares. NMS also performed a discounted cash flow analysis using
financial forecasts prepared by the Company's management, which supported
the reasonableness of the price to be paid per Share in the Offer.
(vi) The Board's approval and recommendation are supported by the
results of the market check process undertaken by NMS to identify and
solicit indications of interest from selected potential acquirors with
respect to the purchase of the Company prior to entering into the Merger
Agreement, including the fact that the Harris Proposal and the Carrols
Proposal were the only formal offers received and that no potential
acquiror or strategic partner had expressed an interest in engaging in a
business combination or other strategic transaction that would likely be on
terms as favorable to the Company's shareholders as those in the Offer and
Merger.
(vii) The Board's approval and recommendation are supported by the
fact that Larry Harris and Stuart Harris (the Company's principal
shareholders and beneficial owners of approximately 33.1% of the
outstanding Shares) informally indicated that they were prepared to endorse
the Merger Agreement, and that the Harris Shareholders (owners of
approximately 17.6% of the outstanding Shares) expressly agreed to tender
all of their Shares in response to the Offer.
(viii) The Board's approval and recommendation are supported by the
fact that the Offer and the Merger were not expressly conditioned on the
availability of financing which, combined with the experience, reputation
and financial condition of Carrols, increased the likelihood that the
proposed Offer and Merger would be consummated.
(ix) The Board's approval and recommendation are supported by the fact
that, to the extent required by the fiduciary obligations of the Board of
Directors of the Company to the shareholders under Florida Law, the Company
may terminate the Merger Agreement in order to approve a tender offer for
the Shares or other proposed business combination by a third party on terms
more favorable to the Company's shareholders than the Offer and the Merger
taken together, upon the payment of a $2.25 million termination fee plus up
to $500,000 of Carrols' expenses (see 'Termination' under the description
of the Merger Agreement above).
(x) The Board considered the effect of the Offer and the Merger and
the resulting changes in senior management on the Company's relationship
with its employees and customers. The Board's approval and recommendation
are supported by Carrols' agreement to continue to employ the Company's
Chief Financial Officer in his current capacity through the one month
anniversary of the closing of the Merger, the protections afforded by the
Confidentiality Agreement against employment and solicitation of Company
employees by Larry Harris (see 'Non-Competition and Confidentiality
Agreement' above) and the directors' belief that Carrols will work
effectively with and have the confidence of the Company's continuing
management and employees. In addition, Carrols has advised the Company that
its business plan is to operate the Company as an autonomous business and
maintain the Company's headquarters in Miami, Florida.
(xi) The Board's approval and recommendation are supported by the
advice of counsel to the Special Committee that the conditions to the
Offer, the conditions to the Merger and the Merger Agreement termination
provisions are customary for transactions of this type and do not subject
the Company to an unreasonable risk that the Offer and Merger will not be
consummated.
2
<PAGE>
(xii) The Board's approval and recommendation are supported by the
directors' knowledge of the Company's business, operations, prospects and
competitive position, including the advantages in a competitive environment
of merging with a large, well-capitalized company, such as Carrols. The
Board's decision is also supported by the fact that the Surviving
Corporation of the Merger will have the benefit of substantial financing
and management that is more experienced than the Company's with respect to
acquiring and integrating companies and operating a large number of
restaurants in various regions of the United States.
In accordance with NMS's engagement, the opinion of NMS referred to in
clause (iv) above is addressed solely to the Special Committee and the opinion
specifically provides that it may not be relied upon by any other person without
the prior written consent of NMS. It is NMS's position that its duties in
connection with its fairness opinion are solely to the Special Committee, and
that it has no legal responsibility to any other persons, including the
Company's shareholders, under California state law, the governing law of the
engagement letter pursuant to which NMS agreed to provide the fairness opinion.
NMS would likely assert the substance of the foregoing disclaimer as a defense
to any claims that might be brought against it by holders of the Shares with
respect to its fairness opinion. However, since no California state court has
definitively ruled on the availability to a financial advisor of an express
disclaimer as a defense to shareholder liability with respect to its fairness
opinion, this issue necessarily would have to be resolved by a court of
competent jurisdiction. Furthermore, there can be no assurance that a court of
competent jurisdiction would apply California state law to the resolution of
this issue if it were to be presented. In any event, the availability or
non-availability of such a defense will have no effect on NMS's rights and
responsibilities under the federal securities laws, or the rights and
responsibilities of the Special Committee or Board of Directors under governing
state law or under the federal securities laws.
ANNEX A. INFORMATION STATEMENT
Page A-4 of Annex A is hereby amended and supplemented by adding the
following thereto immediately preceding the section entitled, 'Compliance with
Section 16(a) of the Securities Exchange Act of 1934, as Amended':
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
During the 1997 fiscal year, the Company's Board of Directors held four
formal meetings and took one other action by written consent. During the 1997
fiscal year, no director attended fewer than 75 percent of the aggregate of (i)
the number of meetings of the Board of Directors held during the period he
served on the Board, or (ii) the number of meetings of committees of the Board
of Directors held during the period he served on such committees.
The Board of Directors has an Audit Committee, an Executive Committee, a
Strategic Planning Committee and a Compensation Committee. The Board does not
have a nominating or similar committee.
Messrs. Vituli and Miller are the current members of the Audit Committee,
which held one meeting during the 1997 fiscal year. The duties and
responsibilities of the Audit Committee include (a) recommending to the Board of
Directors the appointment and termination of the Company's independent public
accountants, (b) reviewing the plan, scope and results of independent audits,
(c) reviewing the Company's significant accounting policies and internal
controls, and (d) reporting its recommendations and findings to the full Board
of Directors.
Messrs. L. Harris, Castaldo and Miller are the current members of the
Executive Committee and Messrs. L. Harris, Castaldo, Wilhite and S. Harris are
the current members of the Strategic Planning Committee. The Executive Committee
oversees the implementation by management of the annual operating plan. The
Strategic Planning Committee is responsible for overseeing management's
development and implementation of the Company's strategic development plans. The
Executive Committee and the Strategic Planning Committee met three and two
times, respectively, during the 1997 fiscal year.
Messrs. Vituli and Nash are the current members of the Compensation
Committee, which held five meetings during the 1997 fiscal year. The
Compensation Committee reviews and approves the compensation of the Company's
executive officers and administers the Company's stock option and stock plans.
3
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
June 26, 1998
POLLO TROPICAL, INC.
BY: /s/ LARRY J. HARRIS
-------------------------------
LARRY J. HARRIS
Chairman and Chief Executive
Officer
4
