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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 (Date of earliest event reported):
December 14, 1998 (December 10, 1998)
LOGAN'S ROADHOUSE, INC.
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(Exact name of registrant as specified in its charter)
Tennessee 0-26400 62-1602074
--------------- ------------------------ ---------------------
(State or Other (Commission File Number) (I.R.S. Employer
Jurisdiction of Identification Number)
Incorporation)
565 Marriott Drive, Suite 490
Nashville, Tennessee 37214
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(Address of principal executive offices) (zip code)
(615) 885-9056
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(Registrant's telephone number, including area code)
Not applicable
- --------------------------------------------------------------------------------
(former name or former address, if changed since last report)
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Exhibit Index located on Page 4
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ITEM 5. OTHER EVENTS.
On December 10, 1998, Logan's Roadhouse, Inc., a Tennessee corporation
(the "Company"), entered into an Agreement and Plan of Merger (the "Plan") with
CBRL Group, Inc., a Tennessee corporation ("CBRL"), pursuant to which the
Company will become a wholly-owned subsidiary of CBRL. The Plan provides that
the holders of the Company's Common Stock will be entitled to receive $24.00 for
each share of the Company's Common Stock held. The transaction is expected to be
completed in late February or early March 1999 and is subject to customary
conditions, including the expiration of the waiting period under the
Hart-Scott-Rodino Act and approval of the shareholders of the Company.
The press release describing the transaction is attached hereto as
Exhibit 99.1 and the Plan is attached hereto as Exhibit 99.2, each of which is
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
None Required.
(b) Pro Forma Financial Information.
None Required.
(c) Exhibits.
99.1 Form of joint press release issued by CBRL Group,
Inc. and Logan's Roadhouse, Inc. in connection with
the above-referenced transaction.
99.2 Agreement and Plan of Merger, dated December 10,
1998, among Logan's Roadhouse, Inc., CBRL Group,
Inc., Cracker Barrel Old Country Store, Inc. and LRI
Merger Corporation.
2
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SIGNATURES
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.
LOGAN'S ROADHOUSE, INC.
By: /s/ EDWIN W. MOATS, JR.
--------------------------------
Edwin W. Moats, Jr.
Chairman, President and
Chief Executive Officer
Date: December 14, 1998
3
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION OF EXHIBITS
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99.1 Form of joint press release issued by CBRL Group, Inc. and Logan's
Roadhouse, Inc. in connection with the above-referenced transaction.
99.2 Agreement and Plan of Merger, dated December 10, 1998, among Logan's
Roadhouse, Inc., CBRL Group, Inc., Cracker Barrel Old Country Store,
Inc. and LRI Merger Corporation.
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EXHIBIT 99.1
Contact: Michael A. Woodhouse
Chief Financial Officer
CBRL Group, Inc.
CBRL GROUP, INC. TO ACQUIRE LOGAN'S ROADHOUSE
LEBANON, Tenn. (December 11, 1998) -- Jointly, CBRL Group, Inc.
(Nasdaq/NM: CBRL), which will be the parent company of Cracker Barrel Old
Country Store, Inc. following completion of its reorganization into a holding
company structure at December 31, 1998, and Logan's Roadhouse, Inc. (Nasdaq/NM:
RDHS) today announced the execution of a definitive merger agreement for the
acquisition of Logan's Roadhouse, Inc. by CBRL Group, Inc. Logan's Roadhouse,
with headquarters in Nashville, Tennessee, operates 41 company-owned and 4
franchised Logan's Roadhouse(R) restaurants in 12 states, which feature steaks,
ribs, chicken, and seafood dishes in a distinctive atmosphere reminiscent of an
American roadhouse.
Under the terms of the agreement, CBRL Group will purchase all of the
outstanding shares of Logan Roadhouse common stock for cash of $24 per share, or
a total purchase price of approximately $179 million. The purchase price will be
funded by a combination of cash and an increase in CBRL Group's bank lines of
credit. The acquisition is expected to be neutral to CBRL Group's earnings in
fiscal 1999 and accretive in fiscal 2000. The transaction is subject to usual
and customary closing conditions, including approval by the shareholders of
Logan's Roadhouse and is expected to close on or before March 1, 1999.
Commenting on the announcement, Dan W. Evins, chairman and chief
executive officer of CBRL Group, Inc., said, "Logan's Roadhouse adds a third
restaurant concept to our new holding company structure. The other concepts are
Cracker Barrel Old Country Store(R) and Carmine Giardini's Gourmet Market and La
Trattoria Ristorante(TM). As with our other concepts, we intend to operate
Logan's Roadhouse as a separate company. The acquisition of Logan's Roadhouse
is consistent with our plans to grow by expanding our existing concepts as well
as by acquisitions.
-MORE-
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CBRL to Acquire RDHS
Page 2
December 11, 1998
"Logan's Roadhouse has an excellent management team led by Ted Moats,
who will remain as president and chief operating officer of Logan's Roadhouse.
Ted has built an exceptional restaurant concept that focuses on high-quality
food served in a casual and entertaining environment, delivers excellent unit
economics, and provides an excellent price-to-value relationship for its guests.
We believe Logan's Roadhouse will fit well with our Cracker Barrel and Carmine's
concepts.
Edwin W. Moats, Jr., president and chief executive officer of Logan's
Roadhouse, Inc., said, "We are very pleased to join such an outstanding
organization as CBRL Group and are excited by the opportunity to continue to
grow the Logan's Roadhouse system. Under the holding company structure, we will
have the opportunity to operate as a separate company and continue to focus
directly on growing the Logan's Roadhouse concept, while at the same time have
the advantages of being part of a larger organization. We believe that through
this transaction, we will continue to provide our employees the most rewarding
work environment and, through them, to consistently enhance the quality of the
"Logan's Roadhouse experience" for each of our guests."
Except for specific historical information, the matters discussed in
this press release are forward-looking statements that involve risks,
uncertainties and other factors which may cause actual results and performance
of the CBRL Group (the Company) to differ materially from those expressed or
implied by such statements. Factors which will affect actual results include,
but are not limited to: the availability and costs of acceptable sites for
development; the ability of the Company to recruit and train restaurant
personnel in its concepts expansion locations; the acceptance of the Company's
concepts as the Company's concepts continue to expand into new geographic
regions; continued successful acquisition of additional concepts to expand;
continued successful development of new and regional menu items; changes in or
implementation of additional governmental rules and regulations; appropriate
resolution of Year 2000 issues; and other factors described from time to time in
the Company's filings with the Securities and Exchange Commission, press
releases and other communications.
Headquartered in Lebanon, Tennessee, CBRL Group, currently operates two
Carmine Giardini's Gourmet Markets located in Florida and 373 Cracker Barrel Old
Country Stores(R) locations in Tennessee, Florida, Georgia, Texas, Ohio, North
Carolina, Illinois, Indiana, Alabama, Kentucky, Michigan, Virginia, Missouri,
South Carolina, Pennsylvania, Mississippi, Arizona, Louisiana, New York, West
Virginia, Kansas, Oklahoma, Arkansas, Colorado, Wisconsin, Iowa, Minnesota, New
Mexico, Utah, Maryland, Nebraska, New Jersey, Connecticut, Idaho, Massachusetts,
and Montana.
Logan's Roadhouse, Inc. operates 41 Company-owned and 4 franchised
Logan's Roadhouse(R) restaurants in 12 sates, which feature steaks, ribs,
chicken, and seafood dishes in a distinctive atmosphere reminiscent of an
American roadhouse. The Logan's Roadhouse menu is designed to attract a broad
range of customers by offering generous portions of moderately priced, high
quality food which appeals to a wide variety of tastes. The restaurants offer a
casual and entertaining dining environment, are open seven days a week for lunch
and dinner and provide full bar service.
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EXHIBIT 99.2
================================================================================
AGREEMENT AND PLAN OF MERGER
AMONG
LOGAN'S ROADHOUSE, INC.
CBRL GROUP, INC.
CRACKER BARREL OLD COUNTRY STORE, INC.
AND
LRI MERGER CORPORATION
DATED AS OF DECEMBER 10, 1998
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TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I MERGER..................................................................................................1
SECTION 1.1 The Merger.............................................................................1
SECTION 1.2 Filing.................................................................................2
SECTION 1.3 Effective Date of the Merger...........................................................2
ARTICLE II BOARD OF DIRECTORS AND OFFICERS........................................................................2
SECTION 2.1 Directors..............................................................................2
SECTION 2.2 Officers...............................................................................2
SECTION 2.3 Charter and Bylaws.....................................................................2
ARTICLE III CONVERSION OF SHARES..................................................................................2
SECTION 3.1 Conversion.............................................................................2
ARTICLE IV CERTAIN EFFECTS OF MERGER..............................................................................4
SECTION 4.1 Effect of Merger.......................................................................4
ARTICLE V COMPANY STOCK PLANS.....................................................................................4
SECTION 5.1 Outstanding Stock Options..............................................................4
SECTION 5.2 Withholding Rights.....................................................................4
ARTICLE VI REPRESENTATIONS AND WARRANTIES.........................................................................5
SECTION 6.1 Representations and Warranties by the Company..........................................5
(a) Organization and Qualification, etc....................................................5
(b) Capital Stock..........................................................................5
(c) Authority Relative to Agreement........................................................5
(d) Non-Contravention......................................................................6
(e) Consents, etc..........................................................................6
(f) SEC Documents..........................................................................6
(g) Subsidiaries...........................................................................6
(h) Financial Statements...................................................................7
(i) Absence of Certain Changes or Events...................................................7
(j) Governmental Authorization and Compliance with Laws....................................8
(k) Absence of Undisclosed Liabilities and Agreements......................................8
(l) Tax Matters............................................................................9
(m) Title to Properties; Absence of Liens and Encumbrances, etc............................9
(n) Material Contracts.....................................................................9
(o) Litigation............................................................................10
(p) Labor Matters and Controversies.......................................................10
</TABLE>
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<TABLE>
<S> <C>
(q) Insider Interests.....................................................................11
(r) Trade Names, Trademarks, etc..........................................................11
(s) Insurance.............................................................................11
(t) Employee Benefit Plans and Employment Agreements......................................11
(u) Environmental Matters.................................................................14
SECTION 6.2 Representations and Warranties by CBRL and Cracker Barrel.............................15
(a) Organization and Qualification, etc...................................................15
(b) Authority Relative to Agreement.......................................................15
(c) Non-Contravention.....................................................................15
(d) Consents, etc.........................................................................16
SECTION 6.3 Representations and Warranties by LRI.................................................16
(a) Organization and Qualification, etc...................................................16
(b) Capital Stock.........................................................................16
(c) Authority Relative to Agreement.......................................................16
(d) Non-Contravention.....................................................................16
(e) Consents, etc.........................................................................16
(f) Other Matters.........................................................................16
ARTICLE VII ADDITIONAL COVENANTS AND AGREEMENTS..................................................................17
SECTION 7.1 Conduct of Business...................................................................17
(a) Operations in the Ordinary Course of Business.........................................17
(b) Forbearances..........................................................................17
SECTION 7.2 Stockholders' Meeting.................................................................18
SECTION 7.3 Proxy Statement.......................................................................18
SECTION 7.4 Regulatory Consents, Authorizations, etc..............................................19
SECTION 7.5 Investigation.........................................................................19
SECTION 7.6 Public Announcements..................................................................19
SECTION 7.7 Expenses; Certain Payments............................................................20
SECTION 7.8 No Solicitation of Transactions.......................................................20
SECTION 7.9 Additional Agreements.................................................................20
SECTION 7.10 Proxy Statement.......................................................................20
SECTION 7.11 Employees of the Company..............................................................21
SECTION 7.12 Indemnification; Directors and Officers Insurance.....................................21
ARTICLE VIII CONDITIONS TO THE MERGER............................................................................21
SECTION 8.1 Conditions to Merger Relating to CBRL, Cracker Barrel and LRI.........................21
(a) Stockholder Approval..................................................................21
(b) Regulatory Consents, Authorizations, etc..............................................21
(c) Injunction, etc.......................................................................22
(d) Representations and Warranties........................................................22
(e) Certificate...........................................................................22
(f) Opinion of Company's Counsel..........................................................22
(g) Letters from Accountants..............................................................24
</TABLE>
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<TABLE>
<S> <C>
(h) Additional Certificates, etc..........................................................24
(i) Antitrust Improvements Act............................................................25
SECTION 8.2 Conditions to the Merger Relating to the Company......................................25
(a) Stockholder Approval..................................................................25
(b) Regulatory Consents, Authorizations, etc..............................................25
(c) Injunction, etc.......................................................................25
(d) Representations and Warranties........................................................25
(e) Certificate...........................................................................25
(f) Opinion of Counsel to CBRL, Cracker Barrel and LRI....................................25
(g) Additional Certificates, etc..........................................................27
(h) Antitrust Improvements Act............................................................27
(i) Investment Bankers' Opinion...........................................................27
(j) Grant of CBRL Options.................................................................27
ARTICLE IX TERMINATION AND ABANDONMENT...........................................................................28
SECTION 9.1 Termination and Abandonment...........................................................28
SECTION 9.2 Expiration............................................................................28
SECTION 9.3 Effect of Termination.................................................................28
ARTICLE X MISCELLANEOUS..........................................................................................29
SECTION 10.1 Waiver of Conditions..................................................................29
SECTION 10.2 Closing ..............................................................................29
SECTION 10.3 Notices .............................................................................29
SECTION 10.4 Financial Advisors....................................................................30
SECTION 10.5 Counterparts..........................................................................30
SECTION 10.6 Headings .............................................................................30
SECTION 10.7 Variation and Amendment...............................................................30
SECTION 10.8 No Survival of Representations or Warranties..........................................30
SECTION 10.9 Schedules.............................................................................30
SECTION 10.10 Miscellaneous.........................................................................30
</TABLE>
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of December 10, 1998
("Agreement"), among Logan's Roadhouse, Inc., a Tennessee corporation (the
"Company" or "Surviving Corporation"), CBRL Group, Inc., a Tennessee corporation
("CBRL"), Cracker Barrel Old Country Store, Inc., a Tennessee corporation
("Cracker Barrel"), and LRI Merger Corporation, a Tennessee corporation ("LRI").
W I T N E S S E T H :
WHEREAS, CBRL and LRI desire that LRI merge with and into the Company
(the "Merger"), and the Company also desires that LRI merge with and into the
Company, upon the terms and conditions set forth in this Agreement and in
accordance with the Tennessee Business Corporation Act ("TBCA"), and that the
outstanding shares of Common Stock, $.01 par value per share ("Common Stock"),
of the Company, excluding any such shares of Common Stock held in the treasury
of the Company, be converted upon the consummation of the Merger into the right
to receive $24 per share (the "Merger Consideration"), in cash, without
interest;
WHEREAS, CBRL and Cracker Barrel are affiliated companies in the midst
of a corporate restructuring, as a result of which by or on December 31, 1998
CBRL will own 100% of Cracker Barrel (the "Reorganization"), and CBRL intends to
operate as a holding company, and from time to time to develop or acquire other
businesses which will be held as wholly-owned operating subsidiaries;
WHEREAS, Cracker Barrel and CBRL are cooperating in all respects
throughout the course of the foregoing transactions to consummate the Merger as
stated in this Agreement, and it is contemplated that the Reorganization will be
completed following the formal creation of the holding company structure, and
that CBRL will be the sole owner and parent of the Surviving Corporation upon
implementation of this Agreement;
NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants, agreements and conditions contained herein, and in order
to set forth the terms and conditions of the Merger and the mode of carrying the
same into effect, the parties hereto agree as follows:
ARTICLE I
MERGER
SECTION 1.1 The Merger. At the Effective Time (as hereinafter defined),
LRI shall be merged with and into the Company on the terms and conditions
hereinafter set forth as permitted by and in accordance with the TBCA. Thereupon
the separate existence of LRI shall cease, and the Company, as the Surviving
Corporation, shall continue to exist under and be governed by the TBCA.
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SECTION 1.2 Filing. As soon as practicable following fulfillment of the
conditions specified in Sections 8.1(a), (b) and (i) and 8.2(a), (b) and (h),
and upon fulfillment or waiver of the remaining conditions specified in Article
VIII, and provided that this Agreement has not been terminated and abandoned
pursuant to Article IX, CBRL and the Company will cause Articles of Merger
prepared in accordance with the TBCA (the "Articles of Merger") to be executed
and filed for record with the Secretary of State of the State of Tennessee.
SECTION 1.3 Effective Date of the Merger. The Merger shall become
effective at the time that the Articles of Merger have been accepted for record
as referred to in Section 1.2. The date and time of such filing is the
"Effective Time".
ARTICLE II
BOARD OF DIRECTORS AND OFFICERS
SECTION 2.1 Directors. From and after the Effective Time, the members
of the Board of Directors of the Surviving Corporation shall consist of the
members of the Board of Directors of LRI, whose members are set forth in
Schedule 2.1, with each of the members of the Board of Directors of the
Surviving Corporation to serve until his successor is elected and is qualified
or until his earlier death, resignation or removal.
SECTION 2.2 Officers. From and after the Effective Time, each officer
of the Company immediately prior to the Effective Time shall be an officer of
the Surviving Corporation in the same capacity or capacities, until his
successor is elected and qualified or until his earlier death, resignation or
removal.
SECTION 2.3 Charter and Bylaws. At the Effective Time, the Amended and
Restated Charter of the Company (the "Company Charter"), as in effect
immediately prior to the Effective Time, shall be the Charter of the Surviving
Corporation until thereafter changed or amended as provided therein or by
applicable law. At the Effective Time, the Bylaws of the Company (the "Company
Bylaws"), as in effect immediately prior to the Effective Time, shall be the
Bylaws of the Surviving Corporation until thereafter changed or amended as
provided therein or by the Charter of the Surviving Corporation or by applicable
law.
ARTICLE III
CONVERSION OF SHARES
SECTION 3.1 Conversion.
(a) Subject to the other subsections of this Section 3.1, on the
Effective Time each share of Common Stock issued and outstanding immediately
prior to the Effective Time shall, by virtue of the Merger, automatically and
without any action on the part of the Company or the holder thereof,
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become and be converted into the right to receive $24.00 in cash, without
interest. The Merger Consideration shall be subject to equitable adjustment in
the event of any stock split, stock dividend, reverse stock split, or other
change in the number of shares of Common Stock outstanding that occurs after the
date of this Agreement. No share of the Common Stock shall be deemed to be
outstanding or to have any rights other than payment therefor after the
Effective Time.
(b) On the Effective Time, holders of certificates which represent
shares of Common Stock outstanding immediately prior to the Effective Time ("Old
Certificates") shall cease to be, and shall have no rights as, stockholders of
the Company.
(c) On the Effective Time, each share of Common Stock, if any, held in
the treasury of the Company shall be canceled.
(d) On the Effective Time, each issued and outstanding share of Common
Stock, $.01 par value per share, of LRI shall be converted into one share of
Common Stock of the Surviving Corporation.
(e) Immediately after the Effective Time, CBRL will furnish to SunTrust
Bank, N.A. (the "Paying Agent") a corpus (the "Payment Fund") consisting of cash
sufficient in the aggregate for the Paying Agent to make full payment of the
Merger Consideration to those who were holders of the outstanding shares of the
Common Stock immediately prior to the Effective Time, and CBRL will cause the
Paying Agent to mail a letter of transmittal (with instructions for its use) in
the form attached hereto as Exhibit A to such former record holders of
outstanding shares of the Common Stock for use in surrendering the certificates
which represented his or its shares of the Common Stock against payment of the
Merger Consideration.
(f) CBRL may cause the Paying Agent to invest the cash included in the
Payment Fund in securities issued or guaranteed by the United States of America,
investment grade commercial paper or securities of comparable credit and
quality; provided, however, that the terms and conditions of the investments
shall be such as to permit the Paying Agent to make prompt payment of the Merger
Consideration as necessary. The Paying Agent shall pay over to the Surviving
Corporation any net earnings with respect to the investments.
(g) CBRL may cause the Paying Agent to pay over to the Surviving
Corporation any portion of the Payment Fund (including any earnings thereon)
remaining 180 days after the Effective Time, and thereafter all former
stockholders shall be entitled to look to the Surviving Corporation (subject to
abandoned property, escheat, and other similar laws) as general creditors
thereof with respect to the cash payable upon surrender of their certificates.
(h) CBRL shall cause the Surviving Corporation to pay all charges and
expenses of the Paying Agent.
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(i) If any Old Certificate shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such Old
Certificate to be lost, stolen or destroyed and, if required by the Surviving
Corporation, the posting by such person of a bond, in such reasonable amount as
the Surviving Corporation may direct, as indemnity against any claim that may be
made against it with respect to such Old Certificate, the Paying Agent will
include in the Payment Fund cash sufficient to make full payment of the Merger
Consideration with respect to such lost, stolen or destroyed Old Certificate.
ARTICLE IV
CERTAIN EFFECTS OF MERGER
SECTION 4.1 Effect of Merger. Upon and after the Effective Time, the
separate existence of each constituent corporation party to the Articles of
Merger, except the Surviving Corporation, ceases; the assets and liabilities of
each constituent corporation party to the Articles of Merger vest in the
Surviving Corporation without reversion or impairment; and the Charter of the
Surviving Corporation shall be amended if and to the extent provided in this
Agreement.
ARTICLE V
COMPANY STOCK PLANS
SECTION 5.1 Outstanding Stock Options. On the date on which the
stockholders of the Company approve the adoption of this Agreement, all employee
stock options then outstanding under the Company's 1995 Incentive Stock Plan, as
amended, and 1995 Non-Employee Director Stock Option Plan, as amended
(collectively, the "Stock Option Plans"), to the extent not otherwise
exercisable by their terms, shall become immediately exercisable at the exercise
price set forth in such options. The holder of an option may elect to exercise
such option pursuant to the terms of the Stock Option Plans and receive shares
of Common Stock, which shares would then be converted into the right to receive
$24.00 in cash in accordance with Section 3.1(a) hereof. Any options not so
exercised shall thereupon terminate and each such option holder shall be
entitled to receive $24.00 in cash, less the exercise price and applicable
taxes, for each share of Common Stock that the holder would have been entitled
to receive upon exercise of the option if the Merger had not been consummated.
SECTION 5.2 Withholding Rights. Each of the Company, LRI, Cracker
Barrel and CBRL shall be entitled to deduct and withhold from the Merger
Consideration otherwise payable to any holder of shares of Common Stock or any
holder of stock options such taxes as may be required to be deducted and
withheld with respect to the making of such payment under the Internal Revenue
Code, or any provision of state, local or foreign tax law. To the extent that
amounts are required to be so withheld, such amounts shall be treated for all
purposes of this Agreement as having been paid to the holders of shares of
Common Stock and holders of stock options in respect of which such deductions
and withholding was made by the Company, LRI, Cracker Barrel or CBRL, as the
case may be.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1 Representations and Warranties by the Company. The Company
represents and warrants to CBRL, Cracker Barrel and LRI as follows:
(a) Organization and Qualification, etc.. The Company is a corporation
duly organized and validly existing under the laws of the State of Tennessee,
has corporate power and authority to own all of its properties and assets and to
carry on its business as it is now being conducted, and is duly qualified to do
business and is in good standing (if applicable) in each jurisdiction where such
qualification is required. The copies of the Company Charter and the Company
Bylaws, as amended to date, which have been delivered to CBRL, are complete and
correct, and such instruments, as so amended, are in full force and effect at
the date of this Agreement and at the Effective Time.
(b) Capital Stock. The authorized capital stock of the Company consists
of (i) 15,000,000 shares of Common Stock, of which as of December 9, 1998,
7,198,550 shares of Common Stock were validly issued and outstanding, fully paid
and nonassessable, and no shares of Common Stock were held in the treasury of
the Company, and (ii) 5,000,000 shares of Preferred Stock, $.01 par value per
share, of the Company, none of which are outstanding. As of the date hereof, the
Company had 221,569 authorized but unissued shares of Common Stock reserved for
issuance pursuant to options to be granted under the Stock Option Plans. Since
the date hereof, no shares of Common Stock have been issued except pursuant to
options granted prior to that date under the Stock Option Plans. As of the date
hereof, except for outstanding options under its Stock Option Plans to purchase
700,931 shares, the Company has no commitments to issue or sell any shares of
its capital stock or any securities or obligations convertible into or
exchangeable for, or giving any person any right to subscribe for or acquire
from the Company, any shares of its capital stock and no securities or
obligations evidencing any such rights are outstanding. None of the shares of
the capital stock of the Company was issued in violation of the Securities Act
of 1933, as amended, or any regulation or rule issued thereunder, or any other
federal or state law relating to the sale and issuance of securities.
(c) Authority Relative to Agreement. The Company has the corporate
power and authority to execute and deliver this Agreement and, subject to the
receipt of the approval of this Agreement by the affirmative vote of the holders
of the requisite number of the outstanding shares of Common Stock, to consummate
the transactions contemplated hereby. The execution and delivery by the Company
of this Agreement and the consummation by it of the transactions contemplated on
its part hereby have been duly authorized by its Board of Directors. Except for
the approval of this Agreement by the stockholders of the Company, no other
corporate action on the part of the Company is necessary to authorize the
execution and delivery of this Agreement by the Company or the consummation by
the Company of the transactions contemplated hereby. This Agreement has been
duly executed and delivered by the Company and is a valid and binding agreement
of the Company.
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(d) Non-Contravention. Except as set forth in Schedule 6.1(d), the
execution and delivery of this Agreement by the Company do not and, subject to
the approval of the adoption of this Agreement by the stockholders of the
Company, the consummation by the Company of the transactions contemplated hereby
will not violate any provision of the Company Charter or the Company Bylaws, or
violate, or result, with the giving of notice or the lapse of time or both, in a
violation of, any provision of, or result in the acceleration of or entitle any
party to accelerate (whether after the giving of notice or lapse of time or
both) any obligation under, or result in the creation or imposition of any lien,
charge, pledge, security interest or other encumbrance upon any of the property
of the Company or any of its Subsidiaries (as defined herein) pursuant to any
provision of, any mortgage, lien, lease, agreement, license, instrument, law,
ordinance, regulation, order, arbitration award, judgment or decree to which the
Company or any of its Subsidiaries is a party or by which any of them is bound,
and do not and will not violate or conflict with any other restriction of any
kind or character to which the Company or any of its Subsidiaries is subject or
by which any of their assets may be bound, and the same does not and will not
constitute an event permitting termination of any mortgage, lien, lease,
agreement, license or instrument to which the Company or any of its Subsidiaries
is a party, except for any such violations, defaults, rights, liens, security
interests, charges or encumbrances that, individually or in the aggregate, would
not have a material adverse effect on the financial condition of the Company.
(e) Consents, etc. Except as set forth in Schedule 6.1(e) and except
for the filing of the Proxy Statement (as hereinafter defined) with the
Securities and Exchange Commission (the "SEC"), filings with the Federal Trade
Commission (the "FTC") and the Department of Justice ("Justice") under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 (the "Antitrust
Improvements Act") and the filing of the Articles of Merger with the Secretary
of State of Tennessee, no consent, authorization, order or approval of, or
filing or registration with, any governmental commission, board or other
regulatory body is required for or in connection with the execution and delivery
of this Agreement by the Company and the consummation by the Company of the
transactions contemplated hereby.
(f) SEC Documents. The Company has filed with the SEC all reports,
schedules, forms, statements and other documents required to be filed with the
SEC by the Securities Exchange Act of 1934, as amended (the "1934 Act"), since
January 1, 1998 through the date hereof (the "Company SEC Documents"). All of
the Company SEC Documents, as of their respective filing dates, complied as to
form in all material respects with all applicable requirements of the 1934 Act
and the rules and regulations promulgated thereunder. To the knowledge of the
executive officers of the Company, no facts or circumstances exist that would
require the Company to file a Current Report on Form 8-K to amend any previously
filed Quarterly Report on Form 10-Q or Annual Report on Form 10-K.
(g) Subsidiaries. Schedule 6.1(g) hereto sets forth each Subsidiary of
the Company ("Subsidiary" or "Subsidiaries," as the case may be). The Company
owns, directly or indirectly, all of the outstanding capital stock of each of
its Subsidiaries, free and clear of all liens, charges, pledges, security
interests or other encumbrances, and all such capital stock is duly authorized,
validly issued and outstanding, fully paid and nonassessable, and neither the
Company nor any Subsidiary has, other
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than in the ordinary and usual course of business or as shown on Schedule
6.1(g), made any material investment in, or material advances of cash or other
extension of credit to, any company other than its Subsidiaries. None of the
Subsidiaries has any commitment to issue or sell any shares of its capital stock
or any securities or obligations convertible into or exchangeable for, or giving
any person (other than the Company) any right to acquire from such Subsidiary,
any shares of its capital stock, and no such securities or obligations are
outstanding. Each Subsidiary is an entity duly organized, validly existing and
in good standing (if applicable) under the laws of its jurisdiction of
formation, has the corporation or partnership power and authority, as the case
may be, to own all of its properties and assets and to carry on its business as
it is now being conducted, and is duly qualified to do business and is in good
standing (if applicable) in each jurisdiction where such qualification is
required, except where the failure to be so organized, existing, in good
standing, qualified to do business or to have such power and authority would
not, individually or in the aggregate, have a material adverse effect on the
financial condition of the Company.
(h) Financial Statements. The Company has previously furnished CBRL
with a true and complete copy of the consolidated balance sheets of the Company
and its Subsidiaries as of December 28, 1997, December 29, 1996 and December 31,
1995 and the related consolidated statements of income, stockholders' equity and
changes in financial position for the fiscal years then ended, including the
notes thereto, certified by independent certified public accountants (the
"Audited Financial Statements"). The Audited Financial Statements have been
prepared in conformity with generally accepted accounting principles
consistently applied and present fairly the consolidated financial position of
the Company and its Subsidiaries as of such respective dates and their
consolidated results of operations for the periods then ended.
(i) Absence of Certain Changes or Events. Except as set forth in
Schedule 6.1(i), since October 4, 1998 there has not been (i) any damage,
destruction or other casualty loss with respect to property owned by the Company
or any of its Subsidiaries not covered by insurance, or any strike, work
stoppage or slowdown or other labor trouble involving the Company or any of its
Subsidiaries which, in any of such cases, materially and adversely affected, or
could affect in the future, the financial condition of the Company and its
Subsidiaries considered as a whole; (ii) any material adverse change in the
financial condition of the Company and its Subsidiaries, considered as a whole,
excluding any changes and effects resulting from changes in economic, regulatory
or political conditions or changes in conditions generally applicable to the
industries in which the Company and its Subsidiaries are involved and which do
not affect the Company in a manner materially disproportionate to the effect on
CBRL and except for any such changes or effects resulting from this Agreement,
the transactions contemplated hereby or the announcement thereof, or changes or
effects previously disclosed in writing (including all Schedules attached
hereto) by the Company to CBRL and its representatives; (iii) any issuance by
the Company or any of its Subsidiaries of any shares, options, calls or
commitments relating to shares of the Company's or its Subsidiaries' capital
stock, or any securities or obligations convertible into or exchangeable for, or
giving any person any right to acquire from the Company or any of its
Subsidiaries, any shares of the Company's or its Subsidiaries' capital stock,
other than the issuance by the company pursuant to the Stock Option Plans of
shares of Common Stock upon the exercise of options granted under such Stock
Option
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<PAGE> 12
Plans, or any redemption, purchase or other acquisition by the Company or any of
its Subsidiaries of any such shares; (iv) any split, combination or other
similar change in the outstanding shares of the Company; or (v) any declaration,
setting aside or payment of any dividend (whether in cash, capital stock or
property) with respect to the capital stock of the Company.
(j) Governmental Authorization and Compliance with Laws. Except as set
forth in Schedule 6.1(j), to the knowledge of the executive officers of the
Company, the business of the Company and its Subsidiaries has been operated in
compliance with the laws, orders, regulations, policies and guidelines of all
governmental entities, including without limitation all applicable immigration
laws (including Form I-9 completion and record-keeping), except for violations
of such laws, orders, regulations, policies and guidelines which, when
considered together, do not constitute criminal acts and do not affect
materially and adversely the financial position of the Company and its
Subsidiaries considered as a whole. Except as set forth on Schedule 6.1(j), to
the knowledge of the Company's executive officers, the Company and its
Subsidiaries have all permits, certificates, licenses, approvals and other
authorizations required in connection with the operation of their business,
except where the failure to obtain any such authorization would not constitute
criminal acts and, when taken together with all other such failures, do not
affect materially and adversely the financial condition of the Company and its
Subsidiaries considered as a whole. Except as set forth in Schedule 6.1(j), no
notice has been issued and, to the knowledge of the executive officers of the
Company, no investigation or review is pending or is contemplated or threatened
by any governmental entity (i) with respect to any alleged violation by the
Company or any of its Subsidiaries of any law, order, regulation, policy or
guideline of any governmental entity, or (ii) with respect to any alleged
failure to have all permits, certificates, licenses, approvals and other
authorizations required in connection with the operation of the business of the
Company and its Subsidiaries, which in either case will affect materially and
adversely the financial condition of the Company and its Subsidiaries considered
as a whole.
(k) Absence of Undisclosed Liabilities and Agreements. Except as set
forth in Schedule 6.1(k), the balance sheet as of December 28, 1997, included in
the Audited Financial Statements, the Annual Report on Form 10-K for the year
ended December 28, 1997 (the "Annual Report"), or any Quarterly Report on Form
10-Q for the fiscal quarters ended April, July and October 1998 (the "Quarterly
Reports"), neither the Company nor any of its Subsidiaries (i) had, as of
December 28, 1997, debts, liabilities or obligations, whether accrued, absolute,
contingent or otherwise and whether due or to become due (including without
limitation any uninsured liabilities resulting from failure to comply with any
law applicable to the conduct of its business) which are material to the
financial condition of the Company and its Subsidiaries as a whole, (ii) has
incurred since December 28, 1997 any such debts, liabilities or obligations
(other than debts, liabilities or obligations incurred in the ordinary and usual
course of business after December 28, 1997) which materially and adversely
affect the financial condition of the Company and its Subsidiaries considered as
a whole, or (iii) has, since December 28, 1997, conducted its business otherwise
than in the ordinary and usual course. To the knowledge of the executive
officers of the Company, neither the Company nor any of its Subsidiaries is in
violation of any instrument, arbitration award, judgment or decree applicable to
the Company
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<PAGE> 13
or any of its Subsidiaries or any of their property, the effect of which would
be to materially and adversely affect the financial condition of the Company and
its Subsidiaries considered as a whole.
(l) Tax Matters. To the knowledge of the executive officers of the
Company, the provisions made for taxes on the consolidated balance sheet of the
Company as of December 28, 1997 included in the Audited Financial Statements
were properly accrued for the payment of all federal, state, county and local
taxes of the Company and its Subsidiaries, whether or not disputed. There are no
agreements by the Company or any of its Subsidiaries for the extension of the
time for the assessment of any taxes, and all federal, state, county and local
taxes due and payable by the Company or any of its Subsidiaries on or before the
date of this Agreement have been paid or provided for or are not delinquent,
subject, however, to the ongoing possibility of contested assessments of
additional taxes upon audit of returns filed prior to the date hereof.
(m) Title to Properties; Absence of Liens and Encumbrances, etc. The
Company and its Subsidiaries have good title to all properties and assets owned
by them, real, personal and mixed, used in their business, free and clear of any
liens, charges, pledges, security interests or other encumbrances, except as
reflected in the Audited Financial Statements and except for such imperfections
of title and encumbrances, if any, as are not substantial in character, amount
or extent, and do not materially detract from the value, or interfere with the
present use, of the property subject thereto or affected thereby, or otherwise
materially impair the business operations of the Company and its Subsidiaries
considered as a whole. Except as set forth in Schedule 6.1(m), no lease under
which the Company or any of its Subsidiaries is the lessee will terminate as a
result of the consummation of the Merger. All leases under which the Company or
any of its Subsidiaries is the lessee of real or personal property that are
material to the conduct of the business of the Company and its Subsidiaries
considered as a whole are, to the knowledge of the Company's executive officers,
valid and binding on the lessors specified thereunder in accordance with their
respective terms and there is not under any of such leases any existing default,
or any condition, event or act which with notice of lapse of time or both would
constitute such a default, which in either case would affect materially and
adversely the financial condition of the Company and its Subsidiaries considered
as a whole.
(n) Material Contracts. Except as disclosed in the Company SEC
Documents or on Schedule 6.1(n), neither the Company nor any of its Subsidiaries
has outstanding any employment agreements or any incentive compensation,
deferred compensation, profit sharing, stock option, stock purchase, savings,
consultant, retirement, pension or other "fringe benefit" plans or arrangements
with or for the benefit of any officer, employee or other person which are not
subject to cancellation by the Company or any of its Subsidiaries, as the case
may be, without material penalty or increased cost on not more than 30 days
notice. Except as set forth on Schedule 6.1(n), in the Company SEC Documents or
for arrangements made in the ordinary course of business, neither the Company
nor any of its Subsidiaries is as of the date hereof a party to, or bound by,
any material contract of any kind to be performed after the Effective Time.
Solely for the purpose of this Section 6.1(n), the term "material contract"
shall mean any single contract pursuant to which any party thereto is obligated
to make payments aggregating more than $25,000. The Company's executive officers
have no knowledge of any defaults in any obligation to be performed by any party
to a contract or other agreement to which the Company or any of its Subsidiaries
is a party, which defaults may reasonably
9
<PAGE> 14
be expected to affect materially and adversely the financial condition of the
Company and its Subsidiaries considered as a whole. Moreover, to the knowledge
of the executive officers of the Company, there is no material default by the
Company under the Area Development Agreement, dated March 17, 1997, by and among
the Company, CMAC Incorporated, a Tennessee corporation, and Charles F.
McWhorter, Jr., and the Area Development Agreement, dated January 12, 1996 by
and among the Company, L. W. Group, Inc., a Tennessee corporation, and David K.
Wachtel, Jr. Except as disclosed on Schedule 6.1(n), there are no contracts or
options to sell or lease any material property or assets, real, personal or
mixed, of the Company or any of its Subsidiaries. To the knowledge of the
executive officers of the Company, the Company has all license or other rights
to use the software necessary for its business, free and clear of material
claims of others, and all Company computer systems and software material to its
business operations are believed by the executive officers of the Company to be
Year 2000 compliant to the extent disclosed in the Company's most recent
Quarterly Report on Form 10-Q.
(o) Litigation. Except as disclosed in the Annual Report, any of the
Quarterly Reports or on Schedule 6.1(o), (i) there is no claim, action, suit or
proceeding pending or, to the knowledge of the executive officers of the
Company, contemplated or threatened against the Company or any of its
Subsidiaries or any of their properties which, in the event of a final adverse
determination, is reasonably likely to affect materially and adversely the
financial condition of the Company and its Subsidiaries considered as a whole,
or which seeks damages in connection with any of the transactions contemplated
by this Agreement or to prohibit, restrict or delay consummation of the Merger
or any of the conditions to consummation of the Merger or to limit in any manner
the right of CBRL to control the Company or any material aspect of the business
of the Company and its Subsidiaries after the Effective Time, nor is there, to
the knowledge of the executive officers of the Company, any judgment, decree,
injunction, ruling or order of any court, governmental department, commission,
agency or instrumentality, arbitrator or any other person outstanding against
the Company or any of its Subsidiaries having any such effect; and (ii) neither
the Company nor any of its Subsidiaries is a party to or is bound by any
judgment, decree, injunction, ruling or order of any court, governmental
department, commission, agency or instrumentality, arbitrator or any other
person against the Company or any of its Subsidiaries affecting materially and
adversely the financial condition of the Company and its Subsidiaries considered
as a whole.
(p) Labor Matters and Controversies. Except as set forth on Schedule
6.1(p), the Company is not a party to any collective bargaining agreement with
respect to its employees, and, to the knowledge of the executive officers of the
Company, there are no efforts by any labor organization to gain representation
of any of the Company's employees. There are no controversies pending between
the Company or any of its Subsidiaries and any of their respective employees,
which controversies may reasonably be expected to affect materially and
adversely the financial condition of the Company and its Subsidiaries considered
as a whole.
(q) Insider Interests. Except as disclosed in the Annual Report, any of
the Quarterly Reports or on Schedule 6.1(q), no officer or director of the
Company or any of its Subsidiaries has any agreement with the Company or any of
its Subsidiaries or any interest in any property, real or personal, tangible or
intangible, including without limitation trade names or trademarks used in or
10
<PAGE> 15
pertaining to the business of the Company or any of its Subsidiaries, except for
the normal rights as a stockholder or employee.
(r) Trade Names, Trademarks, etc. Schedule 6.1(r) sets forth a list of
all United States and foreign patents, trademarks, trade names, service marks,
copyrights and applications therefor owned by the Company and its Subsidiaries
(the "Patent and Trademark Rights"). Except as set forth in Schedule 6.1(r), the
Patent and Trademark Rights are all the intellectual property rights that are
material to the operation of the business of the Company and its Subsidiaries as
currently being conducted. The Company is the owner of all title and interest in
and to each of the Patent and Trademark Rights, free and clear of all liens,
security interests, charges, encumbrances, equities and other adverse claims
known to the executive officers of the Company. There are no claims or
proceedings pending or, to the knowledge of the Company's executive officers,
threatened against the Company or any of its Subsidiaries asserting that its use
of any of the Patent and Trademark Rights infringes the rights of any other
person.
(s) Insurance. The Company and its Subsidiaries have insurance
contracts or self-insurance in full force and effect which, to the knowledge and
belief of the Company's executive officers, provide for coverages which are
usual and customary in the business of the Company and its Subsidiaries as to
amount and scope.
(t) Employee Benefit Plans and Employment Agreements.
(1) General. Except as set forth on Schedule 6.1(t), neither
the Company nor any of its Subsidiaries is a party to nor participates in or has
any liability or contingent liability with respect to:
(i) any "employee welfare benefit plan" or "employee pension
benefit plan" as those terms are respectively defined in
sections 3(1) and 3(2) of ERISA, other than a "multiemployer
plan" (as defined in section 3(37) of ERISA),
(ii) any retirement or deferred compensation plan, incentive
compensation plan, stock plan, unemployment compensation plan,
vacation pay, severance pay, bonus or benefit arrangement,
insurance or hospitalization program or any other fringe
benefit arrangements for any current or former employee,
director, consultant or agent, whether pursuant to contract,
arrangement, custom or informal understanding, which does not
constitute an "employee benefit plan" (as defined in section
3(3) of ERISA), or
(iii) any employment agreement.
(collectively, the "Benefit Plans").
(2) Plan Documents and Reports. A true, accurate and complete
copy of each of the Benefit Plans is set forth on Schedule 6.1(t), and all
contracts relating thereto, or to the funding thereof, including all trust
agreements, insurance contracts, administration contracts, investment
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management agreements, subscription and participation agreements, and
record-keeping agreements, each as in effect on the date hereof, has been
supplied to CBRL. In the case of any Benefit Plan which is not in written form,
CBRL has been supplied with a true, accurate and complete description thereof as
in effect on the date hereof. The Company will timely file with the Internal
Revenue Service all annual reports for the Benefit Plans that are required with
respect thereto, and all such reports will be made available to CBRL. None of
the Benefit Plans are "pension plans" as defined in Section 3(2) of ERISA.
(3) Compliance with Laws; Liabilities. As to all Benefit
Plans:
(i) All Benefit Plans substantially comply and have been
administered in form and in operation in all material respects
with all requirements of law applicable thereto, and the
Company has received no notice issued by any governmental
authority questioning or challenging such compliance.
(ii) All Benefit Plans that are employee pension benefit plans
(as defined in section 3(2) of ERISA) comply in form and in
operation with all applicable requirements of sections 401(a)
and 501(a) of the Internal Revenue Code (the "Code"); there
have been no amendments to such plans which are not the
subject of a determination letter issued with respect thereto
by the Internal Revenue Service; and no event has occurred
which will or could give rise to disqualification of any such
plan under such sections or to a tax under section 511 of the
Code, which event has not been timely and completely
corrected, without further liability or potential liability of
any type to the Company or the Benefit Plans under either the
Administrative Procedure Regarding Self-Correction or the
Employee Plans Compliance Resolution System, each as
established by the Internal Revenue Service.
(iii) None of the assets of any Benefit Plan is invested in
employer securities or employer real property.
(iv) There have been no "prohibited transactions" (as
described in section 406 of ERISA or section 4975 of the Code)
with respect to any Benefit Plan and neither the Company nor
any of its Subsidiaries has otherwise engaged in any
prohibited transaction.
(v) There has been no act or omission which has given rise to
or may give rise to fines, penalties, taxes, or related
charges under sections 502(c), 502(i), 502(l) or 4071 of ERISA
or Chapters 43, 47, or 68 of the Code for which the Company or
any of its Subsidiaries may be liable.
(vi) None of the payments contemplated by the Benefit Plans
would, in the aggregate, constitute excess parachute payments
as defined in section 280G of the Code (without regard to
subsection (b)(4) thereof).
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(vii) There are no actions, suits, or claims (other than
routine claims for benefits) pending or threatened involving
such Benefit Plans or the assets thereof, and no facts exist
which could give rise to any such actions, suits, or claims
(other than routine claims for benefits).
(viii) No Benefit Plan or prior Benefit Plan of the Company,
any Subsidiary or other affiliate is or ever was subject to
Title IV of ERISA.
(ix) Each Benefit Plan which constitutes a "group health plan"
(as defined in section 607(1) of ERISA or section 4980B(g)(2)
of the Code), including any Benefit Plans of current and
former affiliates which must be taken into account under
section 4980B and 414(t) of the Code or section 601 of ERISA,
have been operated in substantial compliance with applicable
law, including the group health plan continuation coverage
requirements of section 4980B of the Code and section 601 of
ERISA and the portability, certification and nondiscrimination
requirements of sections 9801 and 9802 of the Code to the
extent such requirements are applicable.
(x) Adequate accruals for all obligations under the Benefit
Plans are reflected in the Audited Financial Statements and
such obligations include a pro rated amount of the
contributions and PBGC premiums which would otherwise have
been made in accordance with past practices and applicable law
for the plan years which include the Effective Time.
(xi) Neither the Company nor any of its Subsidiaries has
liability or contingent liability under any Benefit Plan or
otherwise for providing post-retirement medical or life
insurance benefits, other than statutory liability for
providing group health plan continuation coverage under Part 6
of Title I of ERISA and section 4980B (or any predecessor
section thereto) of the Code.
(xii) There has been no act or omission that would impair the
right or ability of the Company or any of its Subsidiaries
unilaterally to amend or terminate any Benefit Plan.
(4) Multiemployer Plans. Neither the Company nor any of its
Subsidiaries contributes to, has contributed to, or has any liability or
contingent liability with respect to a multiemployer plan (as defined in section
3(37) of ERISA).
(u) Environmental Matters. Except as set forth on Schedule 6.1(u)
hereto, and to the knowledge of the executive officers of the Company:
(i) The Company has not deposited, incorporated or disposed,
or arranged for the disposal of, any Hazardous Substance (as
defined hereafter) at a location owned or operated by any
other person which could result in any liabilities, costs,
claims or damages for which the Company might be liable,
except as would not have a material adverse effect on the
financial condition of the Company; "Hazardous Substance"
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means any material or substance which is defined and/or
regulated as a hazardous substance, hazardous waste, hazardous
material, toxic substance or pollutant or contaminant by or
pursuant to any Environmental Law; the term "Environmental
Law" means all federal, state or local environmental laws,
regulations and rules relating to the generation, treatment,
storage, transportation, disposal, emission, discharge or
release of Hazardous Substances, or otherwise relating in any
way to the protection of the environment, as the same may be
amended or modified until the Effective Time;
(ii) The Company is in material compliance with all
Environmental Laws in effect as of the date hereof, and no
condition exists or event has occurred which would constitute
a material violation of any Environmental Law;
(iii) The Company is in possession of those permits required
by any applicable Environmental Law for the conduct or
operation of its business (or any part thereof), except where
the failure to be in possession of such permits would not have
a material adverse effect on the financial condition of the
Company, and is in material compliance with all of the
requirements and limitations included in such permits;
(iv) The Company has not released or discharged any Hazardous
Substances in amounts or types requiring cleanup or remedial
action, in, on, or at any property it owns or on which it
conducts business, and the executive officers of the Company
have no knowledge of any such discharges or releases by others
in, on, or at such properties;
(v) The executive officers of the Company have not received
any written or verbal notice from any governmental authority
or any other person that any aspect of its business or the
operation thereof is in violation of any Environmental Law or
environmental permit, or that the Company is responsible (or
potentially responsible) for the cleanup or remediation of any
substances at any location;
(vi) The Company has not deposited or placed or permitted to
be deposited or placed any Hazardous Substances in amounts or
types requiring cleanup or remedial action into, on, beneath,
or adjacent to any property it owns or on which it conducts
business, except as would not have a material adverse effect
on the financial condition of the Company;
(vii) The Company is not subject to any pending or threatened
litigation or proceedings in any forum, judicial or
administrative, involving a demand for damages, an order of
compliance, injunctive relief, penalties, or other potential
liability of a material nature with respect to any
Environmental Law; and
(viii) The Company has timely filed all material reports and
notifications required to be filed with respect to properties
owned by the Company or with respect to the
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<PAGE> 19
operation of its business, and has generated and maintained
all required records and data of a material nature under
applicable Environmental Laws.
SECTION 6.2 Representations and Warranties by CBRL and Cracker Barrel.
CBRL and Cracker Barrel, jointly and severally, represent and warrant to the
Company as follows:
(a) Organization and Qualification, etc. CBRL and Cracker Barrel each
is a corporation duly organized and validly existing under the laws of the State
of Tennessee, each has corporate power and authority to own all of its
properties and assets and to carry on its business as it is now being conducted.
(b) Authority Relative to Agreement. CBRL and Cracker Barrel each has
the corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby on the part of CBRL and Cracker
Barrel respectively. The execution and delivery by CBRL and Cracker Barrel of
this Agreement and the consummation by CBRL and Cracker Barrel of the
transactions contemplated on their part hereby have been duly authorized by
their respective Board of Directors. No other corporate proceedings on the part
of CBRL or Cracker Barrel are necessary to authorize the execution and delivery
of this Agreement by CBRL or Cracker Barrel or the consummation by CBRL or
Cracker Barrel of the transactions contemplated hereby. This Agreement has been
duly executed and delivered by each of CBRL and Cracker Barrel and is a valid
and binding agreement of CBRL and Cracker Barrel.
(c) Non-Contravention. The execution and delivery of this Agreement by
each of CBRL and Cracker Barrel do not, and the consummation by each of CBRL and
Cracker Barrel of the transactions contemplated hereby will not, violate any
provision of their respective Charters or Bylaws, or violate, or result, with
the giving of notice or the lapse of time or both, in a violation of, any
provision of, or result in the acceleration of or entitle any party to
accelerate (whether after the giving of notice or lapse of time or both) any
obligation under, or result in the creation or imposition of any lien, charge,
pledge, security interest or other encumbrance upon any of the property of CBRL
or Cracker Barrel pursuant to any provision of any mortgage, lien, lease, or
agreement to which CBRL or Cracker Barrel is a party or by which it is bound and
do not and will not violate or conflict with any other restriction of any kind
or character to which CBRL or Cracker Barrel is subject or by which its assets
may be bound, and the same does not and will not constitute an event permitting
termination of any mortgage, lien, lease, agreement, license or instrument to
which CBRL or Cracker Barrel is a party.
(d) Consents, etc. Except for filings with the FTC and Justice pursuant
to the Antitrust Improvements Act, and the filing of the Articles of Merger for
record with the Secretary of State of the State of Tennessee, no consent,
authorization, order or approval of, or filing or registration with, any
governmental commission, board or other regulatory body is required for or in
connection with the execution and delivery of this Agreement by each of CBRL and
Cracker Barrel and the consummation by CBRL or Cracker Barrel contemplated
hereby or thereby.
SECTION 6.3 Representations and Warranties by LRI. LRI represents and
warrants to the Company as follows:
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(a) Organization and Qualification, etc. LRI is a corporation duly
organized and validly existing under the laws of the State of Tennessee, has
corporate power and authority to own all of its properties and assets and to
carry on its business as it is now being conducted.
(b) Capital Stock. The authorized capitalization of LRI consists of
1,000 shares of Common Stock, $.01 par value per share (the "LRI Common Stock"),
of which, as of the date of this Agreement and as of the Effective Time, 1,000
shares are validly issued and outstanding, fully paid and nonassessable. CBRL
owns beneficially and of record all the issued and outstanding shares of capital
stock of LRI.
(c) Authority Relative to Agreement. LRI has the corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated on the part of LRI hereby. The execution and delivery
by LRI of this Agreement and the consummation by LRI of the transactions
contemplated on its part hereby have been duly authorized by its Board of
Directors and by CBRL as its sole stockholder. No other corporate proceedings on
the part of LRI are necessary to authorize the execution and delivery of this
Agreement by LRI or the consummation by LRI of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by LRI and is a
valid and binding agreement of LRI.
(d) Non-Contravention. The execution and delivery of this Agreement by
LRI do not, and the consummation by LRI of the transactions contemplated hereby
will not, violate any provision of the Charter or Bylaws of LRI.
(e) Consents, etc. Except for the filing of the Articles of Merger for
record with the Secretary of State of Tennessee, no consent, authorization,
order or approval of, or filing or registration with, any governmental
commission, board or other regulatory body is required for or in connection with
the execution and delivery of this Agreement and the consummation by LRI of the
transactions contemplated hereby.
(f) Other Matters. Except for this Agreement, LRI has no other material
liabilities or obligations.
ARTICLE VII
ADDITIONAL COVENANTS AND AGREEMENTS
SECTION 7.1 Conduct of Business. During the period from the date
hereof to the Effective Time:
(a) Operations in the Ordinary Course of Business. The Company shall,
and shall cause each of its Subsidiaries to, conduct its operations according to
its ordinary and usual course of business and use its best efforts to preserve
intact its business organization; keep available the services of its officers
and employees; and maintain satisfactory relationships with licensors,
suppliers, distributors, customers and others having business relationships with
it. The Company shall confer with representatives of CBRL to keep it informed
with respect to operational matters of a material nature and to report the
general status of the on-going operations of its business.
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(b) Forbearances. The Company and its Subsidiaries shall not, without
the prior written consent of CBRL, which written consent shall not be
unreasonably withheld:
(i) incur any debt, liability or obligation, direct or
indirect, whether accrued, absolute, contingent or otherwise, other than current
liabilities incurred in the ordinary and usual course of business, or pay any
debt, liability or obligation of any kind other than such current liabilities
and current maturities of existing long-term debt;
(ii) assume, guarantee, endorse or otherwise become
responsible for the obligations of any other individual, firm or corporation, or
make any loans or advances to any individual, firm or corporation, except in the
ordinary and usual course of business;
(iii) declare, set aside or pay any dividend (whether in cash,
capital stock or property) with respect to its capital stock, or declare or make
any distribution on, or redeem, purchase or otherwise acquire, any shares of
Common Stock, or split, combine or otherwise similarly change the outstanding
shares of Common Stock, or authorize the creation or issuance of or issue or
sell any shares of its capital stock or any securities or obligations
convertible into or exchangeable for, or giving any person any right to acquire
from it, any shares of its capital stock, or agree to take any such action,
except that the Company may issue shares of Common Stock upon the exercise of
options granted pursuant to its Stock Option Plans prior to the date hereof;
(iv) mortgage, pledge or otherwise encumber any material
property or asset;
(v) except as set forth on Schedule 7.1(b)(v), sell, lease,
transfer or dispose of any of its properties or assets, waive or release any
rights of material value, or cancel, compromise, release or assign any
indebtedness owed to it or any claims held by it, except in the ordinary and
usual course of business;
(vi) make any investment of a capital nature either by
purchase of stock or securities, contributions to capital, property transfers or
otherwise, or by the purchase of any property or assets of any other individual,
firm or corporation, except in the ordinary and usual course of business;
(vii) enter into or terminate any contract, agreement, plan or
lease, or make any change in any of its contracts, agreements, plans or leases
other than in the ordinary and usual course of business;
(viii) except for in the ordinary and usual course of business
or in accordance with the Company's 1998 Executive Bonus Plan, increase in any
manner the compensation or fringe benefits of any of its officers or employees
or pay or agree to pay any pension or retirement allowance not required by any
existing plan or agreement to any officer or employee other than consistent with
past practice, or commit itself to or enter into any employment agreement or any
incentive compensation, deferred compensation, profit sharing, stock option,
stock purchase, savings, consultant, retirement, pension or other "fringe
benefit" plan or arrangement with or for the benefit of any officer, employee or
other person;
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(ix) permit any material insurance policy naming it as a
beneficiary or a loss payable payee to be canceled or terminated or any of the
coverage thereunder to lapse, unless simultaneously with such termination or
cancellation replacement policies providing substantially the same coverage
(without any gap in coverage) are in full force and effect;
(x) amend the Company Charter or the Company Bylaws or the
organizational documents of any of its Subsidiaries;
(xi) enter into any collective bargaining agreement with a
labor organization; or
(xii) enter into an agreement to do any of the things
described in clauses (i) through (xi).
Notwithstanding the foregoing, for purposes of subsections (b)
(i),(v),(vi) and (vii), prior written consent of CBRL is not required for
material contracts of less that $25,000.
SECTION 7.2 Stockholders' Meeting. The Company covenants and agrees
that (i) its Board of Directors will, as soon as reasonably practicable, call a
meeting of its stockholders to consider and vote upon this Agreement and (ii)
unless inconsistent with the exercise by the Board of Directors of its fiduciary
duties, its Board of Directors will duly recommend to the Company's stockholders
that the Merger and the transactions contemplated thereby be approved.
SECTION 7.3 Proxy Statement. The Company covenants that the
information with respect to the Company, its officers and directors and its
Subsidiaries contained in the definitive proxy material that will be distributed
to the Company's stockholders in connection with the meeting of such
stockholders to approve this Agreement (the "Proxy Statement") will not, and
CBRL and Cracker Barrel covenant that the information supplied by CBRL, Cracker
Barrel and their representatives for inclusion in the Proxy Statement will not,
on the date the Proxy Statement is first mailed to stockholders, contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they are made, not misleading.
SECTION 7.4 Regulatory Consents, Authorizations, etc. Each party
hereto will use its best efforts to obtain all consents, authorizations, orders
and approvals of and make all filings and registrations with, any governmental
commission, board or other regulatory body required for, or in connection with,
the performance by it of this Agreement and the consummation by it of the
transactions contemplated hereby and will cooperate fully with the other in
assisting it to obtain such consents, authorizations, orders and approvals. No
party hereto will take any action which could reasonably be anticipated to have
the effect of delaying, impairing or impeding the receipt of any required
regulatory approvals.
SECTION 7.5 Investigation. CBRL may prior to the Effective Time make
or cause to be made such investigation of the business and properties of the
Company and its Subsidiaries and their financial and legal condition as CBRL
deems necessary or advisable to familiarize itself therewith, provided that such
investigation shall not interfere with normal operations of the Company
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or any of its Subsidiaries. The Company agrees to permit CBRL and its authorized
representatives to have or cause them to be permitted to have, after the date
hereof and until the Effective Time, full access to the premises, books and
records of the Company and its Subsidiaries at reasonable hours, and the
officers of the Company and its Subsidiaries will furnish CBRL with such
financial and operating data and other information with respect to the business
and properties of the Company and its Subsidiaries as the other shall from time
to time reasonably request. The Company will permit CBRL and its
representatives, including its auditing firm, to review the work papers of the
auditing firm of the Company relating to their examination of the financial
statements as of and for the three most recent years. No investigation by CBRL
before and after the date hereof shall affect any of the representations and
warranties made by the Company, and each such representation and warranty shall
survive any such investigation, subject to Section 10.8. CBRL covenants to
inform the Company during the course of its investigation of any apparent
breaches of representations or warranties. CBRL, Cracker Barrel and LRI covenant
and agree to hold all information received by them in connection herewith on a
confidential basis, and, should this Agreement be terminated or abandoned for
any reason, not to use or voluntarily disclose to others any such information,
to promptly return every document furnished by the Company in connection
herewith and any copies thereof they may have made and to destroy any summaries,
compilations or similar documents they may have made or derived from such
material, and to use their best efforts to have their agents promptly return
such documents and copies and to destroy such summaries, compilations or similar
documents.
SECTION 7.6 Public Announcements. CBRL, Cracker Barrel and the
Company will not issue any press release with respect to the transactions
contemplated by this Agreement or otherwise issue any written public statements
with respect to such transactions other than upon mutual agreement and
cooperation with the other party, except as may be required by applicable law or
by obligation pursuant to any listing agreement with any national securities
exchange or the Nasdaq Stock Market. The parties shall issue a joint press
release, mutually acceptable to the Company and CBRL, promptly upon execution of
this Agreement. CBRL and the Company also agree to reasonably cooperate
regarding any written communications which relate to the transactions
contemplated by this Agreement made to their employees during the period from
the date hereof until the Effective Time.
SECTION 7.7 Expenses; Certain Payments. If the Merger is consummated,
all costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
expenses. Notwithstanding the foregoing, (a) in the event that the Company
materially breaches this Agreement and the Merger is not consummated because of
such breach, the Company shall pay the reasonable costs and expenses incurred by
the counsel and accountants of CBRL, Cracker Barrel and LRI, and (b) in the
event that CBRL, Cracker Barrel or LRI, as the case may be, materially breaches
this Agreement and the Merger is not consummated because of such breach, CBRL,
Cracker Barrel and LRI shall pay the reasonable costs and expenses incurred by
the counsel and accountants of the Company; provided however, that no party
shall be required to pay the other party's costs and expenses in excess of
$500,000. The parties agree that in the event of a breach, the non-breaching
party shall also be entitled, in addition to the recovery of costs and expenses
discussed above, to any other remedies or damages, at law or in equity, that a
court of competent jurisdiction may find appropriate. If the Company shall
exercise its right to
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terminate this Agreement pursuant to Section 9.1(e) and within one year after
the date of such termination the Company executes a definitive agreement with
respect to an Alternative Transaction (as hereinafter defined), then, upon such
execution, the Company shall pay CBRL a fee in the amount of $5,500,000 in
immediately available funds.
SECTION 7.8 No Solicitation of Transactions. The Company and its
Subsidiaries, officers, directors, financial advisors and counsel will not
solicit, initiate or deliberately encourage submission of proposals or offers
from any person relating to the acquisition or purchase of a material amount of
the assets of, or any equity interest in, the Company or any merger,
consolidation, or business combination with the Company; provided, however,
that, consistent with the fiduciary obligations of the Company's directors and
officers under applicable law, the Company may participate in any unsolicited
discussions or negotiations regarding, and may furnish to any person information
or take such other action as it may deem appropriate with respect to, any of the
foregoing; and provided, further, that nothing in this Section 7.8 shall prevent
the Company from taking any position necessary in order to comply with the
filing and disclosure requirements of Schedule 14D-9, if applicable.
SECTION 7.9 Additional Agreements. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use its 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 under applicable laws and
regulations to consummate and make effective, as soon as reasonably practicable,
the transactions contemplated by this Agreement, subject, however, to the
receipt of the approval of stockholders of the Company.
SECTION 7.10 Proxy Statement. Subject to the terms and conditions
herein provided, the Company will file with the SEC as soon as practicable its
proxy material with respect to its stockholders meeting to consider approval of
the Merger, use its best efforts to resolve as promptly as practicable any
comments of the staff of the SEC to such proxy material and promptly thereafter
mail the Proxy Statement and other proxy material to its stockholders. The Proxy
Statement shall conform, at the date of mailing, as to form in all material
respects with all applicable requirements of the 1934 Act, or any regulation or
rule issued thereunder.
SECTION 7.11 Employees of the Company. CBRL shall retain all
employees of the Company who are employed at the Effective Time as
employees-at-will (except to the extent that such employees are parties to
contracts providing for other employment terms, which employees are named on
Schedule 7.11, in which case such employees shall be retained in accordance with
the terms of such contracts) and shall provide such employees with the same
customary employee benefits as the Company currently provides its existing
employees.
SECTION 7.12 Indemnification; Directors and Officers Insurance. For
six years from and after the Effective Time, CBRL agrees not to, and agrees to
cause the Surviving Corporation not to, alter the provisions of the Company
Charter and Company Bylaws relating to indemnification of officers and directors
of the Company and its Subsidiaries for acts or omissions occurring at or prior
to the Effective Time. CBRL shall cause the Surviving Corporation to provide,
for a period of six years from the Effective Time, the Company's current
directors and officers an insurance and
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indemnification policy that provides coverage for events occurring prior to the
Effective Time (the "D&O Insurance") that is not less favorable than the
Company's existing policy or, if substantially equivalent insurance coverage is
unavailable, the best available coverage; provided, however, that the Surviving
Corporation shall not be required to pay an annual premium for the D&O Insurance
in excess of 300 percent of the last annual premiums paid prior to the date
hereof, but in such case shall purchase as much coverage as possible for such
amount.
ARTICLE VIII
CONDITIONS TO THE MERGER
SECTION 8.1 Conditions to Merger Relating to CBRL, Cracker Barrel and
LRI. Consummation of the Merger is subject to the fulfillment to the reasonable
satisfaction of CBRL, prior to or on the Effective Time, of each of the
following conditions:
(a) Stockholder Approval. The adoption of this Agreement shall have
been approved by the affirmative vote, in person or by proxy, of the holders of
at least a majority of the outstanding shares of Common Stock entitled to vote
thereon, and on the Effective Time CBRL shall have been furnished with certified
copies of the resolutions adopted by the holders of shares of Common Stock.
(b) Regulatory Consents, Authorizations, etc. Except for the filing of
the Articles of Merger for record with the Secretary of State of Tennessee, all
consents, authorizations, orders and approvals of, and filings and registrations
with, any governmental commission, board or other regulatory body or any
nongovernmental third party which are required for or in connection with the
execution and delivery of this Agreement, and the consummation by each party
hereto of the transactions contemplated hereby, shall have been obtained or
made, if the failure to make such filing or registration or to obtain such
consent, authorization, order or approval would have a material and adverse
effect on the power of CBRL to conduct after the Effective Time the business
theretofore conducted by the Company and its Subsidiaries.
(c) Injunction, etc. At the Effective Time there shall be no judgment,
decree, injunction, ruling or order of any court, governmental department,
commission, agency or instrumentality outstanding against CBRL, Cracker Barrel,
LRI or the Company which prohibits, restricts or delays consummation of the
Merger or any of the conditions to the consummation of the Merger or limits in
any material respect the right of CBRL to control the Company or any material
aspect of the business of the Company and its Subsidiaries after the Effective
Time.
(d) Representations and Warranties. The representations and warranties
of the Company contained in this Agreement were true and correct in all material
respects at the date thereof and shall also be true and correct in all material
respects at and as of the Effective Time, except for changes contemplated in
this Agreement and except for the updating of the Company's disclosures made
herein that do not reflect any material adverse change to the financial
condition of the Company and its Subsidiaries considered as a whole, with the
same force and effect as if made at and as of the Effective Time, except as such
representations and warranties by their terms relate only to periods of time
prior to the Effective Time (it being understood that the determination of
whether or not representations and warranties are true in all material respects
shall be determined in light of whether
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any misrepresentations or breaches would have, or would be reasonably expected
to have, a material adverse effect on the financial condition of the Company and
its Subsidiaries considered as a whole), and the Company shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it at or prior to the
Effective Time.
(e) Certificate. The Company shall have delivered to CBRL, Cracker
Barrel and LRI a certificate, dated the Effective Time, of the President of the
Company to the effect that (i) he is familiar with the provisions of this
Agreement and (ii) the conditions specified in paragraph (d) of this Section 8.1
have been, to the best of his knowledge, satisfied.
(f) Opinion of Company's Counsel. CBRL, Cracker Barrel and LRI shall
have received an opinion or opinions, dated the Effective Time, of Waller
Lansden Dortch & Davis, A Professional Limited Liability Company, counsel to the
Company, in form and substance and with such exceptions and limitations as shall
be reasonably satisfactory to CBRL, substantially to the effect that:
(i) The Company is a corporation duly incorporated and validly
existing under the laws of the State of Tennessee, has corporate power and
authority to own its properties and assets and to carry on its business;
(ii) The authorized capital stock of the Company consists of
15,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock and,
based solely upon a review of the minute books and stock books of the Company,
the number of shares of Common Stock which are duly authorized, validly issued
and fully paid and nonassessable and the number of shares of Common Stock held
in the treasury of the Company are as stated in such opinion as of the date
thereof;
(iii) The Company has the corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated on the part of the Company hereby; the Company has taken all
necessary corporate action to authorize the execution and delivery of this
Agreement and the consummation by the Company of the transactions contemplated
hereby; and this Agreement has been duly executed and delivered by the Company
and is a valid binding agreement of the Company, subject, as to enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency and similar laws,
to moratorium laws from time to time in effect and to general principles of
equity;
(iv) The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby do not violate any provision of the Company Charter or the Company
Bylaws;
(v) Except for the filing of the Articles of Merger, each
consent, authorization, order and approval of, and filing and registration with,
any governmental commission, board or other regulatory body required to be made
or obtained by the Company for the execution and delivery of this Agreement and
the consummation by the Company of the transactions contemplated hereby has been
made or obtained;
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(vi) Each of the Subsidiaries that is formed under the laws of
Tennessee, as such Subsidiaries are set forth in Schedule 6.1(g), is an entity
duly incorporated and validly existing under the laws of Tennessee, has the
corporate power and authority to own all of its properties and assets and to
carry on its business; the Company owns directly or indirectly all of the
outstanding capital stock of each of its Subsidiaries, to the best knowledge of
such counsel, free and clear of all liens, charges, pledges, security interests
or other encumbrances, and all such capital stock is duly authorized, validly
issued and outstanding, fully paid and nonassessable;
(vii) Except as may be specified by such counsel, insofar as
such counsel knows, there is no claim, action, suit or proceeding pending or
contemplated or threatened against the Company or any of its Subsidiaries or any
of their properties, which, in the event of a final adverse determination, such
counsel believes will affect materially and adversely the financial condition of
the Company and its Subsidiaries considered as a whole, or which seeks to
prohibit, restrict or delay consummation of the Merger or any of the conditions
to the consummation of the Merger, nor, insofar as such counsel knows, is there
any judgment, decree, injunction, ruling or order of any court, governmental
department, commission, agency or instrumentality, arbitrator or any other
person outstanding against the Company or any of its Subsidiaries that such
counsel believes will in the future have any such effect; and, insofar as such
counsel knows, neither the Company nor any of its Subsidiaries is a party to or
is bound by any judgment, decree, injunction, ruling or order of any court,
governmental department, commission, agency or instrumentality, arbitrator or
any other person that such counsel believes will affect, materially and
adversely, the financial condition of the Company and its Subsidiaries
considered as a whole;
(viii) The Company has filed with the SEC all of the Company
SEC Documents required to be filed since January 1, 1998 through the date
hereof. All of the Company SEC Documents, as of their respective filing dates,
complied as to form in all material respects with all applicable requirements of
the 1934 Act and the rules and regulations promulgated thereunder.
(ix) Upon the acceptance for record of Articles of Merger with
the Secretary of State of Tennessee in accordance with Section 1.2 of this
Agreement, the Merger shall become effective.
In rendering such opinions such counsel may rely upon opinions of other
counsel and may rely upon certificates of public officials and officers of the
Company or any of its Subsidiaries as to factual matters and shall be under no
obligation to make any independent investigation as to factual matters.
(g) Letters from Accountants. CBRL, Cracker Barrel and LRI shall have
received two letters, one dated the date the Proxy Statement is mailed to the
stockholders of the Company and the other dated the Effective Time, from KPMG
Peat Marwick LLP confirming that they are independent accountants with respect
to the Company and its Subsidiaries, and stating in effect that on the basis of
a reading of the latest available interim financial statements of the Company
and its Subsidiaries, inquiries of officials of the Company and its Subsidiaries
responsible for financial and accounting matters, and a reading of the minutes
of the Company and its Subsidiaries as set forth in the minute books to a
specified day not more than five days prior to the date of delivery of such
letter, nothing came to their attention that caused them to believe that:
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(i) any unaudited financial statements of the Company and its
Subsidiaries provided to CBRL are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent with that of
the Audited Financial Statements;
(ii) for the period from December 28, 1997 to the date of the
latest available interim financial statements of the Company and its
Subsidiaries, there were any decreases, as compared to the corresponding
preceding period in the prior fiscal year and the most recent preceding fiscal
quarter, in operating revenues or net earnings; or
(iii) as of a specified date not more than five days prior to
the date of delivery of such letter, there was any change in capital stock, any
increase in consolidated long-term debt, or any decrease in consolidated net
assets, or the Company and its Subsidiaries, as compared with amounts shown on
the balance sheet as of December 28, 1997.
(h) Additional Certificates, etc. The Company shall have furnished to
CBRL such additional certificates, opinions and other documents as CBRL may have
reasonably requested as to any of the conditions set forth in this Section 8.1.
(i) Antitrust Improvements Act. The applicable waiting period under the
Antitrust Improvements Act shall have expired.
SECTION 8.2 Conditions to the Merger Relating to the Company.
Consummation of the Merger is subject to the fulfillment to the reasonable
satisfaction of the Company, prior to or on the Effective Time, of each of the
following conditions:
(a) Stockholder Approval. The adoption of this Agreement shall have
been approved by the affirmative vote, in person or by proxy, of the holders of
a majority of the outstanding shares of Common Stock entitled to vote thereon.
(b) Regulatory Consents, Authorizations, etc. Except for the filing of
the Articles of Merger with the Secretary of State of Tennessee, all consents,
authorizations, orders and approvals of, and filings and registrations with, any
governmental commission, board or other regulatory body or any nongovernmental
third party which are required for or in connection with the execution and
delivery of this Agreement and the consummation by each party thereto of the
transactions contemplated hereby shall have been obtained or made.
(c) Injunction, etc. At the Effective Time there shall be no judgment,
decree, injunction, ruling or order of any court, governmental department,
commission, agency or instrumentality outstanding against CBRL, Cracker Barrel,
LRI or the Company which prohibits, restricts or delays consummation of the
Merger or any of the conditions to the consummation of the Merger or limits in
any manner the right of CBRL to control the Company or any material aspect of
the business of the Company and its Subsidiaries after the Effective Time.
(d) Representations and Warranties. The representations and warranties
of each of CBRL, Cracker Barrel and LRI contained in this Agreement were true
and correct in all material
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respects at the date hereof and shall also be true and correct in all material
respects at and as of the Effective Time, except for changes contemplated in
this Agreement, with the same force and effect as if made at and as of the
Effective Time, except as such representations and warranties by their terms
relate only to periods of time prior to the Effective Time; and each of CBRL,
Cracker Barrel and LRI shall have performed or complied in all material respects
with all agreements and covenants required by this Agreement to be performed or
complied with by it at or prior to the Effective Time.
(e) Certificate. Each of CBRL, Cracker Barrel and LRI shall have
delivered to the Company a certificate, dated the Effective Time, of the
respective Presidents of CBRL, Cracker Barrel and LRI to the effect that (i)
they are familiar with the provisions of this Agreement and (ii) the conditions
specified in paragraph (d) of this Section 8.2 have been, to the best of their
knowledge, satisfied.
(f) Opinion of Counsel to CBRL, Cracker Barrel and LRI. The Company
shall have received an opinion, dated the Effective Time, of Baker, Donelson,
Bearman & Caldwell, counsel to CBRL, Cracker Barrel and LRI, in form and
substance and with such exceptions and limitations as shall be reasonably
satisfactory to the Company, substantially to the effect that:
(i) CBRL is a corporation duly incorporated and validly
existing under the laws of the State of Tennessee, has corporate power and
authority to own its properties and assets and to carry on its business;
(ii) CBRL has the corporate power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated on the
part of CBRL hereby; CBRL has taken all necessary corporate proceedings to
authorize the execution and delivery of this Agreement and the consummation by
it of the transactions contemplated hereby; and this Agreement has been duly
executed and delivered by CBRL and is a valid and binding agreement of CBRL,
subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency and similar laws, to moratorium laws from time to
time in effect and to general principles of equity;
(iii) The execution and delivery of this Agreement by CBRL and
the consummation by CBRL of the transactions contemplated hereby do not and will
not violate any provision of its Charter or Bylaws;
(iv) Except for the filing of the Articles of Merger with the
Secretary of State of Tennessee, each consent, authorization, order and approval
of, and filing and registration with, any governmental commission, board or
other regulatory body required to be made or obtained by CBRL for the execution
and delivery of this Agreement and the consummation by CBRL of the transactions
contemplated hereby has been made or obtained;
(v) Except as may be specified by such counsel, insofar as
such counsel knows, there is no claim, action, suit or proceeding pending or
contemplated or threatened against CBRL or any of its properties, which, in the
event of a final adverse determination, such counsel believes will affect
materially and adversely the financial condition of CBRL considered as a whole,
or which seeks to prohibit, restrict or delay consummation of the Merger or any
of the conditions to the
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consummation of the Merger, nor, insofar as such counsel knows, is there any
judgment, decree, injunction, ruling or order of any court, governmental
department, commission, agency or instrumentality, arbitrator or any other
person outstanding against CBRL that such counsel believes will in the future
have any such effect; and, insofar as such counsel knows, CBRL is not a party to
nor is bound by any judgment, decree, injunction, ruling or order of any court,
governmental department, commission, agency or instrumentality, arbitrator or
any other person that such counsel believes will affect, materially and
adversely, the financial condition of CBRL considered as a whole;
(vi) LRI is a corporation duly incorporated and validly
existing under the laws of the State of Tennessee, has corporate power and
authority to own its properties and assets and to carry on its business; the
authorized capital stock of LRI consists of 1,000 shares of LRI Common Stock,
all of which are duly authorized, validly issued, fully paid and nonassessable
and owned beneficially and of record by CBRL; LRI has the corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated on the part of LRI hereby; LRI has taken all necessary
corporate proceedings to authorize the execution and delivery of this Agreement
and the consummation by LRI of the transactions contemplated hereby; this
Agreement has been duly executed and delivered by LRI and is a valid and binding
agreement of LRI, subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency and similar laws, to moratorium laws from
time to time in effect and to general principles of equity; and the execution
and delivery of this Agreement by LRI and the consummation by LRI of the
transactions contemplated hereby do not violate its Charter or Bylaws;
(vii) Cracker Barrel is a corporation duly incorporated and
validly existing under the laws of the State of Tennessee, has corporate power
and authority to own its properties and assets and to carry on its business;
Cracker Barrel has the corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated on the part of Cracker
Barrel hereby; Cracker Barrel has taken all necessary corporate proceedings to
authorize the execution and delivery of this Agreement and the consummation by
Cracker Barrel of the transactions contemplated hereby; this Agreement has been
duly executed and delivered by Cracker Barrel and is a valid and binding
Agreement of Cracker Barrel, subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency and similar laws, to
moratorium laws from time to time in effect and to general principles of equity;
and the execution and delivery of this Agreement by Cracker Barrel and the
consummation by Cracker Barrel of the transactions contemplated hereby do not
violate its Charter or Bylaws;
(viii) Upon the acceptance for record of the Articles of
Merger with the Secretary of State of Tennessee in accordance with Section 1.2
of this Agreement, the Merger shall become effective.
In rendering such opinions such counsel may rely upon opinions of other
counsel and may rely upon certificates of public officials and officers of CBRL,
Cracker Barrel and LRI as to factual matters and shall be under no obligation to
make any independent investigation as to factual matters.
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(g) Additional Certificates, etc. CBRL and LRI shall have furnished to
the Company such additional certificates, opinions and other documents as the
Company may have reasonably requested as to any of the conditions set forth in
this Section 8.2.
(h) Antitrust Improvements Act. The applicable waiting period under the
Antitrust Improvements Act shall have expired.
(i) Investment Bankers' Opinion. On the date on which the Proxy
Statement is first mailed to stockholders of the Company and on the Effective
Time, the Company shall have received from its investment bankers a written
opinion confirming the opinion of such bankers' delivered to the Company on or
prior to the date hereof with respect to the transactions contemplated hereby (a
copy of which or a summary thereof has been delivered to CBRL).
(j) Grant of CBRL Options. CBRL shall have granted options to employees
of the Company set forth on Schedule 7.11 to purchase up to an aggregate of
250,000 shares of the Common Stock of CBRL.
ARTICLE IX
TERMINATION AND ABANDONMENT
SECTION 9.1 Termination and Abandonment. This Agreement and the Merger
may be terminated and abandoned at any time prior to the Effective Time:
(a) By mutual action of the Boards of Directors of CBRL and the
Company.
(b) By CBRL, Cracker Barrel and LRI, if the conditions set forth in
Section 8.1 shall not have been complied with or performed in any material
respect and such noncompliance or nonperformance shall not have been cured or
eliminated (or by its nature cannot be cured or eliminated) by the Company on or
before March 25, 1999.
(c) By the Company, if the conditions set forth in Section 8.2 shall
not have been complied with or performed in any material respect and such
noncompliance or nonperformance shall not have been cured or eliminated (or by
its nature cannot be cured or eliminated) by CBRL, Cracker Barrel or LRI on or
before March 25, 1999.
(d) By CBRL or the Company, if any court of competent jurisdiction or
other governmental entity shall have issued an order, decree or ruling or taken
any other action permanently enjoining, restraining or otherwise prohibiting the
Merger and such order, decree, ruling or other action shall have become final
and nonappealable.
(e) By the Board of Directors of the Company if the Company shall
receive a bona fide offer for a merger, consolidation or other business
combination involving the Company or substantially all its assets from any third
party (an "Alternative Transaction"), and the Board of Directors of the Company
shall determine, in the good faith exercise of its fiduciary duties, that the
Alternative Transaction is more advantageous in the opinion of the Board of
Directors to the
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stockholders of the Company than the consummation of the transactions
contemplated hereby; provided, however, that the Board of Directors shall not
have any such right to terminate this Agreement if the Company shall have
violated its agreements contained in Section 7.8.
SECTION 9.2 Expiration. In the event that the Merger is not
consummated pursuant to this Agreement on or before March 25, 1999, this
Agreement may be terminated and abandoned by the Company or CBRL unless the
Boards of Directors of CBRL and the Company shall have agreed in writing upon an
extension of time in which to consummate the Merger.
SECTION 9.3 Effect of Termination. In the event of the termination and
abandonment of this Agreement and the Merger, this Agreement shall thereafter
become void and have no effect, and no party hereto shall have any liability to
any other party hereto or its stockholders or directors or officers in respect
thereof, except for the obligations of CBRL in Section 7.6 hereof and the
obligations of the parties hereto in Section 7.7 hereof.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Waiver of Conditions. Any party may, at its option, waive
in writing any or all of the conditions contained herein to which its
obligations hereunder are subject, except that the conditions contained in
Sections 8.1(a), (b) and (i) and 8.2(a), (b) and (h) may not be so waived.
SECTION 10.2 Closing. The closing of this transaction shall be held at
the offices of Baker, Donelson, Bearman & Caldwell, Nashville City Center, 511
Union Street, Suite 1700, Nashville, Tennessee 37219 on the second business day
after the last of the conditions set forth in Article VIII is fulfilled or
waived or at such other time and place as the parties hereto may agree.
SECTION 10.3 Notices. All notices, requests, demands, claims and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if it is sent by
registered or certified mail, return receipt requested, postage prepaid, and
addressed to the intended recipient as set forth below:
If to the Company: Logan's Roadhouse, Inc.
565 Mariott Drive, Suite 490
Nashville, Tennessee 37214
Attention: President
Copy to: J. Chase Cole, Esquire
Waller Lansden Dortch & Davis,
A Professional Limited Liability Company
2100 Nashville City Center
Nashville, Tennessee 37219
If to CBRL or LRI: 106 Castle Heights Avenue North
Lebanon, Tennessee 37087
Attention: General Counsel
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Copy to: Robert G. McCullough, Esquire
Baker, Donelson, Bearman & Caldwell
1700 Nashville City Center
511 Union Street
Nashville, Tennessee 37219
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
SECTION 10.4 Financial Advisors. The Company represents and warrants
that no advisor, broker or finder is entitled to any brokerage or finder's fee
or other commission from it based on agreements, arrangements or undertakings
made by it in connection with the transactions contemplated hereby except that
upon consummation of the transactions contemplated hereby a fee shall be payable
by the Company to its investment banker, SunTrust Equitable Securities
Corporation. CBRL represents and warrants that no broker or finder is entitled
to any brokerage or finder's fee or other commission from CBRL based on
agreements, arrangements or undertakings made by CBRL in connection with the
transactions contemplated hereby, except that upon consummation of the
transactions contemplated hereby a fee shall be payable by CBRL to its
investment banker, J.C. Bradford & Co.
SECTION 10.5 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 10.6 Headings. The headings herein are for convenience of
reference only, do not constitute a part of this Agreement, and shall not be
deemed to limit or affect any of the provisions hereof.
SECTION 10.7 Variation and Amendment. This Agreement may be varied or
amended at any time before or after the approval of the adoption of this
Agreement by the stockholders of the Company by action of the respective Boards
of Directors of the Company, CBRL, Cracker Barrel and LRI, as the case may be,
without action by their respective stockholders.
SECTION 10.8 No Survival of Representations or Warranties. Except to
the extent expressly provided herein, none of the representations or warranties
included or provided for herein or in any schedule or certificate or other
document delivered pursuant to this Agreement shall survive the Effective Time.
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SECTION 10.9 Schedules. Any matter described or included in any
Schedule delivered herewith in response to any disclosure obligation hereunder
shall be deemed disclosed for all other purposes of this Agreement. In the
Schedules delivered herewith, the cross-references to particular provisions of
this Agreement are included therein for convenience only and shall not be deemed
a part of the Schedules delivered herewith or to affect the construction
thereof.
SECTION 10.10 Miscellaneous. This Agreement (a) constitutes the entire
agreement and supersedes all prior agreements and understandings, both written
and oral, among the parties, with respect to the subject matter hereof; (b) is
not intended to confer upon any other person any rights or remedies hereunder;
(c) shall not be assigned, by operation of law or otherwise; and (d) shall be
governed in all respects, including validity, interpretation and effect, by the
laws of the State of Tennessee.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
LOGAN'S ROADHOUSE, INC.
By: /s/ Edwin W. Moats, Jr.
---------------------------------
Attest:
/s/ David J. McDaniel
- -----------------------------------
Secretary
CBRL GROUP, INC.
By: /s/ Dan W. Evins
---------------------------------
Attest:
/s/ James F. Blackstock
- -----------------------------------
Secretary
CRACKER BARREL OLD COUNTRY
STORE, INC.
By: /s/ Dan W. Evins
---------------------------------
Attest:
/s/ James F. Blackstock
- -----------------------------------
Secretary
LRI MERGER CORPORATION
By: /s/ Ronald N. Magruder
---------------------------------
Attest:
/s/ James F. Blackstock
- -----------------------------------
Secretary
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