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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): February 16, 1999
CBRL GROUP, INC.
(Exact name of Registrant as specified in its Charter)
Tennessee 0-25225 62-1749513
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification Number)
incorporation)
305 Hartmann Drive, Lebanon, Tennessee 37087
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (615) 444-5533
N/A
(Former name or former address, if changed since last report)
Item 2. Acquisition of Assets
On February 16, 1999, CBRL Group, Inc. (the "Company") completed the
acquisition of Logan's Roadhouse, Inc. by the merger of Logan's
Roadhouse, Inc., a Tennessee corporation, into LRI Merger
Corporation, a wholly-owned subsidiary of CBRL Group, Inc. As of March 5, 1999,
Logan's Roadhouse, Inc. operates 45 company-owned and 5 franchised Logan's
Roadhouse(R) restaurants in 13 states: Alabama, Florida, Georgia,
Indiana, Kentucky, Louisiana, North Carolina, Ohio, Oklahoma, South Carolina,
Tennessee, Virginia and West Virginia. The restaurants feature steaks, ribs,
chicken and seafood dishes in a distinctive atmosphere reminiscent of an
American roadhouse. The Logan's Roadhouse(R) 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, they
are open 7 days a week for lunch and dinner, and they provide full
bar service.
The restaurants are constructed of rough-hewn cedar siding in
combination with bands of corrugated metal outlines in double-striped, red neon.
The interiors are decorated with hand-painted
murals depicting typical scenes from American roadhouses of the
1940s and 1950s, concrete and wooden planked floors and neon signs,
and feature Wurlitzer(TM) jukeboxes playing contemporary country
hits. The restaurants also feature a display cooking grill and an
old-fashioned meat counter displaying steaks, ribs, seafood and
salads, and include a spacious, comfortable bar area with a large-screen
television.
The merger was accomplished by payment of cash at $24 per share for
all outstanding shares of common stock of Logan's Roadhouse, Inc.
for a total consideration of approximately $179,000,000, excluding
fees and expenses. The purchase price was determined in
negotiations between the parties. Both parties to the merger
obtained fairness opinions from the separate investment bankers who
advised each of the companies with respect to the merger
transaction.
The Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act"), provides that certain business combinations
(including the Merger) may not be consummated until certain
information has been furnished to the Department of Justice (the
"DOJ") and the Federal Trade Commission (the "FTC") and certain
waiting period requirements have been satisfied. On January 5,
1999, CBRL and Logan's made their respective filings with the DOJ
and the FTC with respect to the Merger. Under the HSR Act, the
filings commenced a 30-day waiting period which expired on February
4, 1999.
The funds used by CBRL Group, Inc. for the transaction were provided
out of cash on hand and a new bank credit facility provided by
SunTrust Bank through a bank syndication managed by
SunTrust Equitable Securities as agent. The Merger will be accounted for as
a purchase under generally accepted accounting principles ("GAAP").
Logan's Common Stock was listed under the symbol "RDHS" on the
Nasdaq National Market. The closing sale price of Logan's Common
Stock as reported on the Nasdaq National Market on December 10,
1998, the last business day preceding public announcement of the
Merger, was $21.06.
With respect to its business, Logan's Roadhouse, Inc. has total
assets with a book value of approximately $88 million at October 4, 1998, much
of which is comprised of its operating properties and equipment. The
Company intends to continue the business operations of Logan's
Roadhouse without material change.
Item 5. Other Events
The registrant, at its option, reports the following information, which is
not otherwise called for by this form, that the registrant deems may be of
importance to security holders:
On February 26, 1999, the registrant announced a second stock
repurchase program involving up to 3,000,000 shares of its
capital stock. The full text of the registrant's press release
is attached as Exhibit 99.
Item 7. Financial Statements and Exhibits
(a), (b) No financial statements are required by this item with respect to the
acquisition described in Item 2 of this form under Rule 3-05 of Regulation
S-X.
(c) Exhibits
Exhibit No. Description Page
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
99 Press Release dated February 16, 1999 --
CBRL GROUP, INC. ANNOUNCES QUARTERLY
CASH DIVIDEND -- BOARD APPROVES 3.0
MILLION SHARE STOCK BUYBACK
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 thereunto duly authorized.
CBRL GROUP, INC.
Date: March 5, 1999 By: /s/ James F. Blackstock
James F. Blackstock
Vice President, General
Counsel and Secretary
Exhibit 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
TABLE OF CONTENTS
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
(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 Stockholder's 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
(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
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.
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, 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.
(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.
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.
(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 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 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 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 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 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 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).
(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" 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 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:
(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.
(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;
(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 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
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
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 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;
(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:
(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 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 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.
(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
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
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.
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.
[The remainder of this page has intentionally been left blank.]
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:_________________________
Attest:
______________________
Secretary
CBRL GROUP, INC.
By:________________________
Attest:
_______________________
Secretary
CRACKER BARREL OLD
COUNTRY STORE, INC.
By:________________________
Attest:
_______________________
Secretary
LRI MERGER CORPORATION
By:_______________________
Attest:
________________________
Secretary
Exhibit 99
NEWS RELEASE
CRACKER BARREL OLD COUNTRY STORE
P.O. Box 787
305 Hartmann Drive
Lebanon, TN 37088-0787
(615) 444-5533
Contact: Michael A. Woodhouse
Chief Financial Officer
CBRL Group, Inc.
CBRL GROUP, INC. ANNOUNCES QUARTERLY CASH DIVIDEND
__________________________________________________
BOARD APPROVES 3.0 MILLION SHARE STOCK BUYBACK
LEBANON, Tenn. (February 26, 1999) -- CBRL Group, Inc. (Nasdaq/NNM:CBRL) today
announced that the Board of Directors has declared a regular quarterly cash
dividend of $0.005 per share. This represents an indicated annual dividend
rate of $0.02 per share. The dividend is payable March 26, 1999, to
shareholders of record as of March 12, 1999.
The Company also announced that the Board of Directors has authorized the
repurchase of up to 3.0 million shares of CBRL Group's common stock. The
purchases are to be made from time to time in the open market at prevailing
market prices. This is the second stock repurchase plan approved by the
Board. As of January 31, 1999, 2.1 million shares of the 3.0 million
authorized shares under the first stock repurchase plan announced on
September 9, 1998, have been purchased. The Company had approximately 61.3
million shares outstanding as of January 31, 1999.
Headquartered in Lebanon, Tennessee, CBRL Group Inc. currently operates 383
Cracker Barrel Old Country Store(R) locations in 36 states, two Carmine's
Gourmet Markets located in Florida and 44 company-owned and five franchised
Logan's Roadhouse(R) restaurants located in 12 states.
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