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Exhibit (e)(10)
RAINFOREST CAFE, INC.
720 SOUTH FIFTH STREET
HOPKINS, MINNESOTA 55343
October 18, 2000
Dear Fellow Shareholders:
By now you should have received the documents, directly or from your
broker, that will allow you to tender your Rainforest Cafe shares for the $3.25
per share in cash offered by Landry's Seafood Restaurants, Inc.
LANDRY'S OFFER IS FAIR
In considering whether or not to tender your shares into Landry's tender
offer, we ask you to keep the following in mind:
- Landry's is Paying Fair Value. Rainforest's Schedule 14D-9 contained an
opinion dated as of September 26, 2000, of Rainforest's financial advisor,
U.S. Bancorp Piper Jaffray, which stated that THE $3.25 OFFER PRICE IS FAIR,
FROM A FINANCIAL POINT OF VIEW, TO THE SHAREHOLDERS OF RAINFOREST.
ADDITIONALLY, THE BOARD OF DIRECTORS OF RAINFOREST HAS UNANIMOUSLY RECOMMENDED
THAT SHAREHOLDERS TENDER THEIR RAINFOREST SHARES INTO LANDRY'S OFFER.
- Future Lease Obligations. Rainforest has entered into long-term lease
obligations to build its chain of restaurants, which represent a total
liability of approximately $175 million. These obligations must ultimately be
paid for and represent a significant liability to Rainforest, with some
becoming immediately due if Rainforest closes restaurants. ABSENT A SUCCESSFUL
TURNAROUND EFFORT, OUR ANALYSIS INDICATES THAT IT MAY BE NECESSARY TO CLOSE AS
MANY AS 20 RESTAURANTS.
- Rainforest's Financial Condition. Rainforest has previously announced
disappointing financial results in the last three fiscal quarters. In
addition, based on its current obligations, Rainforest's cash position is
anticipated to fall below $12 million in fiscal 2000 from $35 million at the
end of the last fiscal year. Because of the difficult business trends
Rainforest is experiencing, Rainforest may not have access to third party
financing. AS A RESULT, OUR ABILITY TO DEVELOP AND GROW RAINFOREST'S BUSINESS
AS AN INDEPENDENT COMPANY IS SIGNIFICANTLY RESTRICTED.
- Rainforest's Eroding Profit Margin. As previously disclosed, continued
decreases in comparable same store sales, particularly in Rainforest's mall
locations, are eroding Rainforest's profit margins. THESE ERODING PROFIT
MARGINS HAVE BEEN REFLECTED IN OUR RECENT DECREASE IN FORECASTED EARNINGS AND
CAN BE EXPECTED TO ADVERSELY AFFECT THE VALUE OF RAINFOREST SHARES IF
RAINFOREST REMAINS AN INDEPENDENT COMPANY.
RAINFOREST TO SWIB: "THERE YOU GO AGAIN"
We understand you may have received additional letters or information from
the State of Wisconsin Investment Board ("SWIB"), a Rainforest Cafe shareholder,
which has publicly stated its objection to the offer presented by Landry's. In
their letters, materials and news releases, SWIB has made vague statements about
why they oppose the Landry's offer and what they plan to do about it. Let me
quickly point out the facts and information we have provided the media and
others who have been confused by SWIB's nebulous claims:
-- SWIB believes that the offer from Landry's is too low. Yet, when we met with
SWIB and presented their representatives with our current financial situation
and projections, SWIB COULD NOT OFFER A SINGLE JUSTIFICATION FOR THEIR
POSITION.
-- We were surprised to read in one of SWIB's statements that they are
"considering several specific steps to increase the value of Rainforest
shares," and that they are "meeting with the company." To date, we have not
received anything other than what they have told you--that they disagree with
the offer. NO SOLID BUSINESS IDEAS, SUGGESTIONS OR PROPOSALS FROM SWIB HAVE
CROSSED OUR DESKS AND WE PRESENTLY HAVE NO FURTHER MEETINGS SCHEDULED WITH
SWIB.
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-- SWIB has tried to lay blame on our Shareholder Rights Plan, claiming that it
acts as a deterrent that prevents them or anyone from "taking action to
protect their rights." Their claim is insincere. WE HAVE REPEATEDLY ASSURED
SWIB THAT NOTHING IN OUR SHAREHOLDER RIGHTS PLAN OR OUR MERGER AGREEMENT WITH
LANDRY'S PREVENTS THEM OR ANYONE ELSE FROM TALKING TO OTHER SHAREHOLDERS OR
FROM MAKING A BETTER OFFER FOR RAINFOREST.
-- SWIB has asked us to seek a delay in the Landry's transaction to allow them
more time to explore their options. Our Board has met and fails to see how
requesting a delay from Landry's would be in the best interests of you, our
shareholders.
-- SWIB suggests that the delay in our annual shareholders meeting shows a lack
of concern for our shareholders. In fact, as SWIB is well aware, we had an
annual meeting scheduled for November 8th. That meeting has been delayed
pending your decision on the Landry's offer.
RAINFOREST TO SWIB: "SHOW US THE MONEY"
Here's the bottomline as it relates to SWIB: Despite their continuing
rhetoric, SWIB HAS FAILED TO PROVIDE RAINFOREST CAFE SHAREHOLDERS WITH ANY
BETTER PROPOSAL THAN THAT SET FORTH BY LANDRY'S. Remember, that when Landry's
first merger agreement with Rainforest was terminated earlier this year--a
transaction also opposed by SWIB--our stock fell 50%. Prior to the announcement
of Landry's tender offer, our stock was trading at $2-1/32.
You may be receiving more communications from SWIB in the future. Unless
SWIB presents a superior offer, we suggest you take SWIB's communications for
what they are: rhetoric.
We can consider and agree to a superior proposal for Rainforest. Until one
is presented to us, we believe that the Landry's transaction offers our
shareholders with a preferred alternative to the uncertainties in our business.
We encourage you to consider the offer from Landry's and tender your shares by
October 27th.
If you need additional information or have any questions that need to be
answered before October 27th, please submit your request to my attention or to
Robert Hahn, CFO, and we will answer you by fax or e-mail.
Sincerely,
/s/ Lyle Berman
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Lyle Berman,
Chairman and CEO
IF YOU HAVE ANY QUESTIONS OR NEED ASSISTANCE IN TENDERING YOUR SHARES,
PLEASE CONTACT THE INFORMATION AGENT FOR THE TENDER OFFER:
INNISFREE M&A INCORPORATED
501 MADISON AVENUE, 20TH FLOOR
NEW YORK, NEW YORK 10022
TOLL FREE: (888) 750-5834
