-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, GB1lFi+ljGrFlk5vlTR8zJzDFh2oVS0SbuLJZygOQ0ARjC0/YYh+o8iNToTxLFDU GjPIHwOIvsMSU/cxvtsh0w== 0000899243-99-000420.txt : 19990310 0000899243-99-000420.hdr.sgml : 19990310 ACCESSION NUMBER: 0000899243-99-000420 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19990302 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990309 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LANDRYS SEAFOOD RESTAURANTS INC CENTRAL INDEX KEY: 0000908652 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-EATING PLACES [5812] IRS NUMBER: 740405386 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-22150 FILM NUMBER: 99560131 BUSINESS ADDRESS: STREET 1: 1400 POST OAK BLVD STREET 2: STE 1010 CITY: HOUSTON STATE: TX ZIP: 77056 BUSINESS PHONE: 7138501010 8-K 1 FORM 8-K (TERMINATION) ================================================================================ 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): MARCH 2, 1999 ---------------------- LANDRY'S SEAFOOD RESTAURANTS, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) ---------------------- DELAWARE 000-22150 74-0405386 - -------------- ------------ ------------------- (STATE OF (COMMISSION (IRS EMPLOYEE INCORPORATION) FILE NUMBER) IDENTIFICATION NO.) ---------------------- 1400 POST OAK BLVD. SUITE 1010 HOUSTON, TEXAS 77056 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (713) 850-1010 ---------------------- ================================================================================ ITEM 5. OTHER EVENTS. On March 2, 1999, Landry's Seafood Restaurants, Inc. ("Landry's" or the "Company") announced that it signed a definitive Agreement and Plan of Merger (the "Merger Agreement") by and among Landry's, Consolidated Restaurant Companies, Inc. ("CRC"), Landry's Acquiror Subsidiary, Inc. ("Acquiror"), and the John R. Cracken Premarital Trust (the "Cracken Trust"), The Katemcy Trust (the "Katemcy Trust"), E. Gene Street ("Street") and Stephen P. Hartnett ("Hartnett" and collectively with the Cracken Trust, the Katemcy Trust and Street the "CRC Stockholders") providing for the merger of Acquiror with and into CRC (the "Merger"). In connection with entering into the Merger Agreement, Landry's had proposed entering into certain related transactions including a proposed Standstill Agreement applicable to the CRC Stockholders with respect to certain prohibited actions regarding Landry's following the Merger and their receipt of equity of Landry's pursuant thereto; a Registration Rights Agreement providing certain registration rights to the CRC Stockholders with respect to their shares of Landry's common and preferred stock proposed to be issued to them in the Merger; Employment Agreements with certain principals of CRC regarding proposed positions with Landry's following the Merger; Non-Competition Agreements with Messrs. Fertitta, Schunthal and West, the Chief Executive Officer, Vice President and General Counsel, and Vice President and Chief Financial Officer, respectively of Landry's in connection with their proposed termination of certain positions with Landry's following the Merger; an Asset Purchase Agreement relating to the proposed purchase from Landry's of certain assets located primarily in Houston, Kemah and Galveston, Texas by Tilman J. Fertitta, Chairman of the Board, President and Chief Executive Officer of Landry's; and a Redemption Agreement relating to Landry's proposed purchase of certain of its shares of common stock owned by an affiliate of Mr. Fertitta's (collectively the "Transactions"). Landry's established a special committee of independent Directors of the Board of Directors (the "Special Committee") to review and determine whether the Merger and the Transactions were fair and in the best interests of the stockholders of Landry's. Such Special Committee retained independent counsel, an independent financial advisor and an independent compensation consultant to advise the Special Committee with respect to the Merger and the Transactions. Based on its analyses as well as, among other things, the opinions and reports of its financial advisors and compensation consultants that the Merger and the Transactions were fair to the stockholders of Landry's from a financial point of view, the Special Committee determined that the Merger Agreement and the related Transactions were fair to, and in the best interest of, the Landry's stockholders. As a result, the Special Committee recommended the Merger and the Transactions to the full Board of Directors of Landry's. The Board of Directors, based upon, among other things, the recommendation of the Special Committee and the receipt of an opinion by its financial advisor that the Merger was fair to Landry's and its stockholders from a financial point of view, approved the Merger Agreement and the Transactions. Subsequent to entering into the Merger Agreement, the reaction of the market and Landry's stockholders caused each of the parties to reconsider the proposed business combination. On March 7, 1999, the Special Committee and the full Board of Directors determined that it was in the best interests of Landry's and its stockholders not to proceed with the Merger and the Transactions, and approved the execution of termination agreements pursuant to which, among other things, the Merger Agreement and all related agreements and the Transactions would be terminated. The termination agreement relating to the merger (the "Termination Agreement") provides, among other things, for (i) the termination of the Merger Agreement and the related agreements as well as the termination and abandonment of the Merger and the related Transactions; (ii) the reimbursement by Landry's of $550,000 of CRC's reasonable expenses incurred in connection with CRC having negotiated, entered into and terminated the Merger Agreement, the related agreements and the Transactions, (iii) the payment by Landry's to CRC of a termination fee of $6,450,000 in the event that, within nine months of the date of the Termination Agreement, Landry's or any of its subsidiaries (x) entered into or is subject to a tender or exchange offer, merger, consolidation or other business combination in which a person or entity other than CRC acquires 20% or more Landry's as a result of such transaction; (y) sells all or substantially all of Landry's assets in a single transaction or in a series of related transactions; or (z) as a result of such transaction or related transactions 10% or more of Landry's capital stock is sold and there is a "Management Change" such that any person who is an officer, director or affiliate of the recipient of the Landry's capital stock became Chairman of the Board, Chief Executive Officer, Chief Operating Officer or President of Landry's or persons related to the recipient holds two seats on the Board of Directors of Landry's or a majority of Landry's Board prior to the transaction ceases to be a majority; (iv) the release by Landry's of claims against CRC and the release by CRC of claims against Landry's, in each case arising out of the Merger Agreement, the related agreements and the Transactions through the date of the Termination Agreement; (v) the indemnification of CRC by Landry's and the indemnification of Landry's by CRC, in each case for damages arising in connection with the Merger Agreement, the related agreements and the Transactions or a breach by the other party of any representation or warranty made by such other party in the Termination Agreement; and (vi) the termination of the standstill provisions applicable to CRC with respect to Landry's set forth in a Confidentiality Agreement entered into by Landry's and CRC prior to the date of the Merger Agreement. The foregoing is a summary of certain provisions of the Termination Agreement. Such summary is not complete and is qualified in its entirety by reference to the Termination Agreement filed as Exhibit 10.1 hereto and incorporated herein by reference. 2 On March 2, 1999, Landry's issued a press release describing the original transaction and on March 8, 1999 Landry's issued further press releases announcing the termination of the Merger Agreement. As of March 8, 1999 there were no further discussions among the parties and none were expected to be held. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits 10.1 Termination Agreement by and among CRC, Landry's, Acquiror, the Cracken Trust, the Katemcy Trust, Street, and Hartnett 10.2 Press Release dated March 2, 1999. 10.3 Press Release dated March 8, 1999. 10.4 Press Release dated March 8, 1999. 3 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. LANDRY'S SEAFOOD RESTAURANTS, INC. (Registrant) By: /s/ Tilman J. Fertitta -------------------------------------------- Tilman J. Fertitta, Dated: March 8, 1999 President and Chief Executive Officer 4 EX-10.1 2 TERMINATION AGREEMENT Exhibit 10.1 TERMINATION AGREEMENT --------------------- This TERMINATION AGREEMENT, dated as of March 7, 1999 (this "Agreement"), is entered into by and among Consolidated Restaurant Companies, Inc., a Delaware corporation ("CRC"), Landry's Seafood Restaurants, Inc., a Delaware corporation ("Landry's"), Landry's Acquiror Subsidiary, Inc., a Delaware corporation and a wholly owned subsidiary of Landry's ("Sub"), The John Cracken Premarital Trust, a trust formed under the law of Texas (the "Cracken Trust"), The Katemcy Trust, a trust formed under the laws of Texas (the "Harkey Trust" and, together with the Cracken Trust, the "Trusts"), E. Gene Street, sole and separate property, and Stephen P. Hartnett (such last four parties being hereinafter referred to collectively as the "CRC Stockholders"). WITNESSETH ---------- WHEREAS, the parties hereto have entered into an Agreement and Plan of Merger, dated as of March 2, 1999, the "Merger Agreement") pursuant to which Sub would merge with and into CRC (the "Merger"); WHEREAS, in connection and concurrently with the Merger Agreement, Landry's has entered into certain Guarantee Agreements by and between Landry's and each of John D. Harkey, Jr. and John R.W. Cracken, sole and separate property (the "Guarantee Agreement") and has contemplated entering into certain other agreements, namely (i) a Standstill Agreement by and between Landry's and the CRC Stockholders (the "Standstill Agreement"), (ii) a Registration Rights Agreement by and between Landry's and the CRC Stockholders (the "Registration Rights Agreement"), (iii) certain Employment Agreements by and between Landry's and the following members and principals of the senior management of CRC: Messrs. Cracken, Harkey and Street (the "Employment Agreements" and, collectively with the Merger Agreement, the Standstill Agreement, the Registration Rights Agreement, the Employment Agreements and the Guarantee Agreements, the "Transaction Agreements"); WHEREAS, the parties hereto desire that the Merger and the other transactions contemplated by the Transaction Agreements not be consummated and, accordingly, that the Transaction Agreements be terminated; WHEREAS, it is the intention of the parties hereto that the Transaction Agreements shall be terminated and of no further force and effect and that they shall have no further obligations or liabilities to each other with respect thereto, except only as expressly set forth in this Agreement; WHEREAS, concurrently herewith, Landry's is entering into a Termination Agreement to terminate (i) an Asset Purchase and Sale Agreement by and among Landry's and certain of its subsidiaries and Hospitality Entertainment, LLC ("Hospitality") (the "Asset Purchase Agreement"), (ii) certain Non-Competition Agreements and Consulting and Non-Competition Agreements by and between Landry's and the following members of its current senior Page 1 management: Messrs. Fertitta, Scheinthal and West (the "Non-Compete Agreements"), and (iii) a Redemption Agreement by and between Landry's and Hospitality (the "Redemption Agreement" and, collectively with the Asset Purchase Agreement and the Non-Compete Agreements, the "Ancillary Agreements"). NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto hereby agree as follows: 1. Defined Terms. Capitalized terms that are used but not defined herein shall have the meaning ascribed to such terms in the Merger Agreement. 2. Termination. The parties hereto hereby agree that, pursuant to Section 8.01(a) of the Merger Agreement, the Merger Agreement is hereby terminated effective immediately and each of the other Transaction Agreements (or, in the case of each Transaction Agreement that has not yet been entered into, the obligation of any party to enter into such Transaction Agreement) is hereby terminated effective immediately. Notwithstanding anything to the contrary set forth in the Transaction Agreements, each Transaction Agreement shall be void and of no further force and effect and the parties hereto shall have no further liabilities or obligations to each other thereunder or with respect thereto, except only as expressly set forth herein. 3. Expenses. Each of Landry's and Sub, on the one hand, and CRC and the CRC Stockholders, on the other hand, shall bear its own costs and expenses, fees and charges incurred in connection with this Agreement and the Transaction Agreements; provided, however, that Landry's shall reimburse CRC and the CRC Stockholders for (i) $50,000 for third-party copying costs incurred by CRC upon the request of and in connection with Landry's due diligence activities at the offices of CRC and (ii) $500,000 for a portion of all other costs and expenses incurred by CRC in connection with this Agreement and the Transaction Agreements, and the transactions contemplated hereby and thereby, including, without limitation, the termination hereby of the transactions contemplated by the Transaction Agreements (in aggregate, the "Termination Cost Payment"). 4. Subsequent Transactions. (i) In the event that Landry's enters into, or Landry's capital stock becomes subject to, a Subsequent Transaction on or prior to the date that is nine months after the date of this Agreement, then Landry's shall promptly pay to CRC the amount of $6,450,000 (the "Subsequent Transaction Amount"), which the parties acknowledge is a reasonable estimate (albeit a low estimate) as of the date of this Agreement of the unreimbursed costs and expenses (including, without limitation, indirect and opportunity costs) that Page 2 CRC has incurred as a result of negotiating and entering into the Merger Agreement and the other Transaction Agreements. "Subsequent Transaction" shall mean any tender or exchange offer, merger, consolidation or other business combination involving Landry's or any of Landry's subsidiaries (whether or not Landry's or any of Landry's subsidiaries is the surviving person in such transaction) or one or more related sales or purchases of all or substantially all of the Acquiring Company Assets; provided, that "Subsequent Transaction" shall not mean any such transaction (or series of related transactions) in which (i) less than 20% of Landry's capital stock (on a fully diluted basis, taking into account, without limitation, all contemplated conversions or exchanges (whether or not then effective)) is involved and no Management Change (as defined below) occurs in connection therewith or (ii) less than 10% of Landry's capital stock (on a fully diluted basis, taking into account, without limitation, all contemplated conversions or exchanges (whether or not then effective)) is involved. A "Management Change" shall mean that (x) a person who during the prior two years has served as an officer, director, employee, partner or Affiliate of (or who has been in any manner selected or nominated by) the recipient of Landry's capital stock or an Affiliate thereof in the subject transaction (collectively, a "Related Person") becomes either the Chairman of the Board, Chief Executive Officer, President or Chief Operating Officer of Landry's within six months after the consummation of the subject transaction and/or (y) two Related Persons become members of the Board of Directors of Landry's within nine months of the consummation of the subject transaction and/or (z) a majority of the members of Landry's Board of Directors immediately prior to the consummation of the subject transaction cease to constitute (other than due to their death or disability) a majority of the members of such Board at any time within one year of the subject transaction. (ii) If Landry's fails to promptly pay the Subsequent Transaction Amount (if so required by this Section) and, in order to obtain such Subsequent Transaction Amount, CRC commences an action in arbitration that results in a judgment against Landry's, Landry's shall pay to CRC the costs and expenses (including attorneys' fees) of CRC in connection with such action in arbitration, together with interest on the Subsequent Transaction Amount at the rate of 10.0% per annum. (iii) In support of the Subsequent Transaction Amount, the parties acknowledge that, as a result of the termination of the Merger Agreement, CRC has endured losses from, at least, each of the following: (i) damage to CRC's current strong reputation as a consolidator in the casual-dining restaurant Page 3 segment, (ii) a loss of opportunities, for making further acquisitions in calendar year 1999 in the casual-dining segment, both items (i) and (ii) resulting from the (x) the stigma of a large, highly-publicized "failed" transaction, (y) confusion among potential acquisition candidates, investment bankers and brokers as to CRC's continuing status as a consolidator, and (z) the substantial effort and capital committed during the first several months of 1999 to close the transactions contemplated by the Merger Agreement; and (iii) a loss of business in their 113 restaurants, caused in part by the potential departure of their most talented and mobile employees among their work force of 7,800 resulting from the uncertainty of those employees' future resulting from these transactions. The parties further agree that the damages that would be caused from the above to CRC are uncertain, but that the amount of $6,450,000 is eminently reasonable, as contemplated by Brazen v. Bell Atlantic Corp., 695 A.2d 43, 47-50 (Del. Supr. 1997). CRC acknowledges that, absent breach by Landry's or Sub of its obligations hereunder, it shall not seek reimbursement for any such damages other than through the payment of the Termination Cost Payment and other than in connection with any Subsequent Transaction (through the payment of the Subsequent Transaction Amount). 5. Indemnification. (i) CRC shall, pursuant to the terms of this Section 5, forever indemnify, defend and hold harmless Landry's, its subsidiaries and any of their respective directors, officers, stockholders, employees, representatives, Affiliates, partners, attorneys, agents, successors and assigns (collectively, the "Landry's Group") from and against all demands, claims, actions or causes of action, assessments, losses, damages, liabilities, costs and expenses including, without limitation, interest, penalties and reasonable attorneys' fees and expenses, after deducting any insurance proceeds received by the Landry's Group in connection therewith (collectively "Landry's Group Damages"), asserted against, resulting to, imposed upon or incurred by the Landry's Group or any member thereof, directly or indirectly, by reason of or resulting from (i) any breach of any representation, warranty, covenant or agreement of CRC contained in or made pursuant to this Agreement or (ii) any claim by CRC (or its subsidiaries or Affiliates) or by CRC's (or its subsidiaries' or its Affiliates') past, present or future directors, officers, employees, partners, creditors, stockholders, representatives, attorneys, agents, successors and assigns (in each case in their capacities as such) arising out of or relating to the transactions contemplated by the Transaction Agreements and/or the Ancillary Agreements. Page 4 (ii) Landry's shall, pursuant to the terms of this Section 5, forever indemnify, defend and hold harmless CRC, its subsidiaries and any of their respective directors, officers, stockholders, employees, representatives, Affiliates, partners, attorneys, agents, successors and assigns (collectively, the "CRC Group") from and against all demands, claims, actions or causes of action, assessments, losses, damages, liabilities, costs and expenses including, without limitation, interest, penalties and reasonable attorneys' fees and expenses, after deducting any insurance proceeds received by the CRC Group in connection therewith (collectively "CRC Group Damages"), asserted against, resulting to, imposed upon or incurred by the CRC Group or any member thereof, directly or indirectly, by reason of or resulting from (i) any breach of any representation, warranty, covenant or agreement of Landry's contained in or made pursuant to this Agreement or (ii) any claim by Landry's (or its subsidiaries or Affiliates) or by Landry's' (or its subsidiaries' or its Affiliates') past, present or future directors, officers, employees, partners, creditors, stockholders, representatives, attorneys, agents, successors and assigns (in each case in their capacities as such) arising out of or relating to the transactions contemplated by the Transaction Agreements and/or the Ancillary Agreements. (iii) The obligations and liabilities of the parties with respect to indemnification claims shall be subject to the following terms and conditions: (a) The indemnified party shall give the indemnifying party prompt notice of any claim (which claim shall be made in good faith only), which notice shall include, in reasonable detail, the facts and circumstances surrounding the claim and the amount of damages actually sustained therefrom, although the failure of the indemnified party to give notice promptly shall not relieve the indemnifying party from its indemnity obligations hereunder (except to the extent that the indemnified party is able to prove that the amount of damages increased as a result of the failure by the indemnified party to give the notice promptly); (b) The indemnified party shall provide the indemnifying party with notice of any proposed settlement or compromise of such claim (as far in advance of the actual settlement or compromise of the claim as is reasonably practicable); provided, that if such claim is settled without the indemnifying party's consent (which consent shall not be unreasonably withheld), the indemnified party's Group shall be deemed to have waived all rights hereunder for indemnification arising out of such claim; Page 5 (c) As soon as practicable after the delivery of notice of the claim, the indemnified party shall provide the indemnifying party with its actual damages, supported by receipts and other reasonably required documentation. The indemnifying party shall have 30 days from receipt of the indemnified party's list of damages to respond to the indemnified party with acceptance of the proposed damages amount or a counter-proposal relating thereto; provided, that if the indemnifying party does not respond within such 30 days, the indemnified party shall be entitled to have its proposed damages paid by the indemnified party. In cases where the parties otherwise agree on the damages, the indemnified party shall be entitled to have its proposed damages paid by the indemnifying party. If the indemnifying party submits a counter-proposal regarding damages that is not accepted by the indemnified party within 15 days following the indemnified party's receipt of such counter-proposal, either or both of the indemnified party or the indemnifying party may submit such matter to arbitration under the provisions of Section 9 hereof. After receiving any ruling by the arbitrators made pursuant to Section 9 hereof, the indemnifying party shall be liable for the amount determined by the arbitrators. (iv) Any indemnifying party hereunder shall be required to make payments to any indemnified party hereunder, in accordance with the foregoing provisions, whether or not the matter requiring indemnification has been concluded by such time (i.e., payments shall be made from time to time as the related damages are incurred). (v) If the indemnification provided for in this Section 5 is held by a court of competent jurisdiction by final, non-appealable judgment to be unavailable to an indemnified party with respect to any loss, liability, claim, damage, or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the matters that resulted in such loss, liability, claim, damage, or expense as well as any other relevant equitable considerations. 6. Releases. (i) In consideration of the payment and benefits provided in this Agreement and other good and valuable consideration, the adequacy of which is hereby Page 6 acknowledged, each of CRC and the CRC Stockholders hereby voluntarily, knowingly, willingly, irrevocably and unconditionally releases each of Landry's and Sub, together with each of their respective subsidiaries and Affiliates, and each of their respective officers, directors, employees, representatives, attorneys and agents and each of their (and their subsidiaries' and Affiliates') respective predecessors, successors, and assigns (collectively, the "Releasees"), from any and all charges, complaints, claims, liabilities, obligations, losses, damages, promises, agreements, causes of action, rights, costs, debts and expenses of any nature whatsoever, known or unknown (other than with respect to the obligations of Landry's and Sub expressly set forth in this Agreement), against them which CRC and the CRC Stockholders and their respective subsidiaries, Affiliates, officers, directors, employees, stockholders, representatives, attorneys, agents, partners, trustees (and, in the case of the Trusts, beneficiaries), predecessors, successors and assigns ever had, now have, or hereafter can, shall, or may have (in each case in their capacity as such, whether directly, indirectly, derivatively, or otherwise) by reason of any matter, fact, or cause whatsoever arising with respect to the Transaction Agreements, the Ancillary Agreements or otherwise from the beginning of time to the date of this Agreement. By signing this Agreement, CRC and the CRC Stockholders admit that they have read this Agreement, understand it is a legally binding agreement and that they were advised to review it with legal counsel of their choice. (ii) In consideration of the benefits provided in this Agreement and for other good and valuable consideration, the adequacy of which is hereby acknowledged, each of Landry's and Sub hereby voluntarily, willingly, irrevocably, and unconditionally releases each of CRC and the CRC Stockholders, together with CRC's subsidiaries and Affiliates and each of their respective Releasees, from any and all charges, complaints, claims, liabilities, obligations, losses, damages, promises, agreements, causes of action, rights, costs, debts and expenses of any nature whatsoever, known or unknown (other than with respect to the obligations of CRC and the CRC Stockholders expressly set forth in this Agreement) against them which Landry's and Sub and their respective subsidiaries, Affiliates, officers, directors, employees, stockholders, representatives, attorneys, agents, partners, trustees (and in the case of any trusts, beneficiaries) predecessors, successors and assigns ever had, now have, or hereafter can, shall, or may have (in each case in their capacity as such, whether directly, indirectly, derivatively, or otherwise) by reason of any matter, fact, or cause whatsoever arising with respect to the Transaction Agreements, the Ancillary Agreements or otherwise from the beginning of time to the date of this Agreement. By signing this Agreement, Landry's and Sub admit Page 7 that they have read this Agreement, understand it is a legally binding agreement and that they were advised to review it with legal counsel of their choice. (iii) The parties agree that, except as set forth below, the terms of the Mutual Confidentiality Agreement dated February 16, 1999 between CRC and Landry's (the "Confidentiality Letter") shall survive the releases set forth above; provided that the obligations of CRC and CRC's Representatives set forth in the last paragraph on page 3 of the Confidentiality Letter (which paragraph carries over to the next page of the Confidentiality Letter) are hereby terminated. 7. Press Release. CRC does not object to the release by Landry's of the statement attached hereto as Exhibit A. 8. Mutual Non-Disparagement. Each of CRC, the CRC Stockholders and Landry's agrees that it shall not (and each of CRC and Landry's agrees that it shall cause its respective subsidiaries, Affiliates, directors, officers, representatives, attorneys and agents to not) disparage the business reputation of Landry's and its management (in the case of CRC) or CRC and its management (in the case of Landry's). 9. Governing Law. (i) THE INTERPRETATION, PERFORMANCE AND ENFORCEMENT OF THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF. (ii) Any controversy or claim (including, without limitation, whether any controversy or claim is subject to arbitration) among two or more of the parties hereto arising out of or relating to this Agreement, or the breach thereof, shall be settled by binding arbitration administered by the American Arbitration Association (the "AAA") under its Commercial Arbitration Rules ("Rules"), and shall be held in Dallas, Texas. Any dispute submitted for arbitration shall be referred to a panel of three arbitrators. The party or parties submitting ("Submitting Party") the intention to arbitrate (the "Submission") shall nominate one arbitrator. Within 30 days of receipt of the Submission, the party or parties receiving the Submission ("Answering Party") shall nominate one arbitrator. If the Answering Party fails to timely nominate an arbitrator, then the second arbitrator shall be appointed by the AAA in accordance with the Rules. If the arbitrator chosen by the Submitting Party and the arbitrator chosen by or selected for the Answering Party can agree upon a neutral arbitrator Page 8 within fifteen (15) days of the choice or selection of the Answering Party's arbitrator, then such individual shall serve as the third arbitrator. If no such agreement is reached, a third neutral arbitrator shall be appointed by the AAA in accordance with the Rules. The parties agree that they shall consent to an expedited proceeding under the Rules, to the full extent the AAA can accommodate such a request. The ruling of the arbitrators shall be binding and conclusive upon all parties hereto and any other Person with an interest in the matter. The arbitration provision set forth in this Section shall be a complete defense to any suit, action or other proceeding instituted in any court by any party hereto regarding any controversy or claim (including, without limitation, whether any controversy or claim is subject to arbitration) arising out of or relating to this Agreement, or the breach thereof; provided, however, that (i) any of the parties may request a Texas State District Court in Dallas County, Texas, to provide interim injunctive relief in aid of arbitration hereunder or to prevent a violation of this Agreement pending arbitration hereunder (and any such request shall not be deemed a waiver of the obligations to arbitrate set forth in this Section), (ii) any ruling on the award rendered by the arbitrators may be entered as a final judgment in (and only in) a Texas State District Court in Dallas County, Texas (and each of the parties hereto irrevocably submits to the jurisdiction of such court for such purposes) and (iii) application may be made by a party to any court of competent jurisdiction wherever situated for enforcement of any such final judgment and the entry of whatever orders are necessary for such enforcement. (iii) In any proceeding with respect hereto, all direct, reasonable costs and expenses (including, without limitation, AAA administration fees and arbitrator fees) incurred by the parties to the proceeding shall, at the conclusion of the proceeding, be paid by the party incurring same. 10. Exclusive Agreement; Amendment. This Agreement supersedes all prior agreements (whether written or oral) among the parties hereto with respect to the subject matter hereof, and is intended as a complete and exclusive statement of the terms of the agreement among the parties hereto with respect thereto. This Agreement may not be modified, amended, altered or supplemented except by a written instrument executed and delivered by each of the parties hereto. SIGNATURE PAGE FOLLOWS. Page 9 IN WITNESS WHEREOF, this Agreement shall become effective as of the date first written above once this Agreement has been duly executed and delivered by the undersigned and the Transaction Cost Payment has been paid in full. LANDRY'S SEAFOOD RESTAURANTS, INC. By:__________________________________________ Name: Title: LANDRY'S ACQUIROR SUBSIDIARY, INC. By:__________________________________________ Name: Title: THE JOHN CRACKEN PREMARITAL TRUST By:__________________________________________ Michael D. Ginsberg Trustee THE KATEMCY TRUST By:__________________________________________ John D. Harkey, Jr. Trustee E. GENE STREET, SOLE AND SEPARATE PROPERTY _____________________________________________ E. Gene Street, Sole and Separate Property STEPHEN P. HARTNETT _____________________________________________ Stephen P. Hartnett CONSOLIDATED RESTAURANT COMPANIES, INC. By:__________________________________________ Title: EX-10.2 3 3/2/99 PRESS RELEASE EXHIBIT 10.2 FOR IMMEDIATE RELEASE - --------------------- LANDRY'S SEAFOOD TO ACQUIRE CONSOLIDATED RESTAURANT COMPANIES HOUSTON (March 2, 1999) - Landry's Seafood Restaurants, Inc. (Nasdaq: LDRY) today announced it has signed a definitive agreement to acquire all of the common stock of Consolidated Restaurant Companies, Inc. (CRC), a Dallas-based privately held company. CRC owns or franchises more than 150 casual-dining facilities in 21 states and Canada. The combined company will have 291 restaurants in 30 states and $550 million in pro-forma sales. The merger will create one of the nation's leading multi-unit restaurant chains, bringing under one roof such well-known casual and full-service dining concepts as Joe's Crab Shack, Landry's Seafood, The Crab House, El Chico, Good Eats, Cantina Laredo, Cool River and Spaghetti Warehouse. According to the terms of the merger agreement, Landry's will issue approximately $84 million in a combination of additional shares of common stock and a new Series A Contingent Dividend Preferred Stock, and will assume approximately $80 million of CRC's net debt. Tilman J. Fertitta, chairman of the board of Landry's Seafood, said, "This transaction significantly broadens our portfolio of restaurant concepts and diversifies our revenue stream. We will expand from our seafood concept base to encompass the Italian, Mexican and American Grill platforms. Landry's will be a larger company with a stronger and more stable cash flow. Most importantly, the transaction will enhance our position as a national powerhouse, well-positioned to compete with the larger national chains in the full-service and casual dining-segments of the restaurant business." E. Gene Street, president and chief executive officer of CRC and founder of the Black-eyed Pea restaurants and other successful casual-dining restaurant concepts, will become chief executive officer of the combined company. In January 1999, Mr. Street won the prestigious Multi-Concept Operator of the Year Award from Restaurant Business magazine. Wallace A. Jones, president and chief executive officer of El Chico/Spaghetti Warehouse, will become president and chief operating officer of the combined company. Mr. Fertitta will remain chairman of the board of directors. "We have put in place a plan to regain revenue growth and to improve margins here at Landry's. I am convinced that Gene and his team are the right individuals to help us build on this plan and to continue to grow this company," Mr. Fertitta concluded. Concurrent with the transaction, Mr. Fertitta will purchase from the combined company certain non-core assets located in primarily in Kemah and Galveston County, Texas. The boards of directors of both companies have unanimously approved the agreement. The transaction is subject to customary regulatory approval. The parties expect the transaction to close by the end of the first quarter of 1999. After the merger, three representatives of CRC, Mr. John R.W. Cracken, Mr. John D. Harkey, Jr., and Mr. Street, will be appointed to the Landry's board, and the two current independent directors will remain. Four additional independent directors will be selected to sit on the Landry's board. At that time, the Landry's board will consist of ten directors: six independent, three representatives of CRC, and Mr. Fertitta as chairman. This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current plans and expectations of Landry's, and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward- looking statements. Important factors that could cause actual results to differ include, among others, risks associated with the absence of a combined operating history, Landry's acquisition strategy, the integration of acquisitions, the availability of additional capital, variations in stock prices and interest rates, competition and fluctuations in quarterly operating results and other risks and uncertainties described in Landry's filings with the Securities and Exchange Commission. Landry's expressly disclaims any intent or obligation to update these forward-looking statements. # # # Contact: - -------- Tilman J. Fertitta President & CEO Landry's Seafood 713-850-1010 EX-10.3 4 3/8/99 PRESS RELEASE EXHIBIT 10.3 LANDRY'S SEAFOOD RESTAURANTS, INC. AND CONSOLIDATED RESTAURANT COMPANIES, INC. AGREE TO END MERGER Houston, Texas March 8, 1999 Houston, Texas --- (NASDAQ - "LDRY") Landry's Seafood Restaurants, Inc. ("Landry's") and Consolidated Restaurant Companies, Inc. ("CRC") announced today their agreement to end plans to merge the two companies and all related transactions. Tilman J. Fertitta, Chairman of the Board, President and Chief Executive Officer of Landry's stated that after announcing the proposed merger on March 2, 1999, the reaction of the market and Landry's stockholders caused each of the parties to reconsider the proposed business combination. Mr. Fertitta stated he intends to continue discussions with CRC to explore whether a possible transaction on different terms might be structured that might be advantageous to Landry's and its stockholders. Landry's decision to terminate the proposed business combination was approved by the Special Committee of independent directors that had been previously formed to consider the fairness of the proposed merger and all related transactions and by the full Board of Directors. This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current plans and expectations of Landry's and involve risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward- looking statements. Important factors that could cause actual results to differ include, among others, the fact that there is no assurance that any restructured transaction will be consummated, the risks associated with the ability of Landry's to continue its expansion strategy, changes in cost of food, labor and employee benefits, the ability of Landry's to acquire prime locations, general market conditions, competition and pricing, all of which involves risks and uncertainties that could cause actual future activities and results of operations to be materially different from those set forth in the forward- looking statements. Landry's expressly disclaims any intent or obligation to update these forward-looking statements. For more information, contact Tilman J. Fertitta, Chairman of the Board, President and Chief Executive Officer of Landry's Seafood Restaurants, Inc. at (713) 850-1010. EX-10.4 5 2ND 3/8/99 PRESS RELEASE EXHIBIT 10.4 LANDRY'S SEAFOOD RESTAURANTS, INC. CALLS OFF MERGER WITH CONSOLIDATED RESTAURANT COMPANIES, INC. Houston, Texas March 8, 1999 Houston, Texas--(NASDAQ-"LDRY") Landry's Seafood Restaurants, Inc. ("Landry's") announced today all further discussions had ended with Consolidated Restaurant Companies, Inc. regarding a proposed merger as well as all other related transactions. Tilman J. Fertitta, Chairman of the Board, President and Chief Executive Officer of Landry's stated that after announcing the proposed merger on March 2, 1999, the reaction of the market and Landry's stockholders caused each of the parties to reconsider the proposed business combination. Mr. Fertitta stated that "I have always tried to represent our stockholders in doing what was best from the long term future of Landry's and this at present seems to be to refocus on Landry's core business, improve profitability and try to enhance stockholder values." Mr. Fertitta continued, "I have always tried to maximize the value of the Company for our stockholders and while I believed there were positives to be achieved through this merger, our stockholders have spoken and we have listened. We have some very positive and exciting things going on at Landry's. We have commenced a national marketing campaign for our Joe's Crab Shack restaurants and are very encouraged by the initial results." "Over the last few days, I have come to realize how much Landry's, Landry's stockholders, and Landry's employees mean to me and how important the creation, running the day-to-day operations, and growth of this Company into one of the most successful restaurant chains has been a part of my life," Mr. Fertitta concluded. Landry's operates over 146 restaurants in 30 states under the names Landry's Seafood House, Joe's Crab Shack, The Crab House, Willie G's, Rusty Pelican, Cadillac Bar and the Kemah Boardwalk with 1998 sales of approximately $400 million and approximately 15 restaurant openings slated for 1999. This press release contains forward-looking statements within the meaning of the Private Securities Reform Act of 1995. These statements are based on current plans and expectations of Landry's and involve risks and uncertainties that could cause actual future activities and result of operations to be materially different from those set forth in the forward-looking statements. Important factors that could cause actual results to differ include, among others, the risks associated with the ability of Landry's to continue its expansion strategy, changes in cost of food, labor and employee benefits, the ability of Landry's to acquire prime locations, general market conditions, competition and pricing, all of which involves risks and uncertainties that could cause actual future activities and result of operations to be materially different from those set forth in the forward-looking statements. For more information, contact Tilman J. Fertitta, Chairman of the Board, President and Chief Executive Officer of Landry's Seafood Restaurants, Inc. at 713-850-1010. -----END PRIVACY-ENHANCED MESSAGE-----