UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 2)
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended December 31, 2009
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from
to
.
|
* Commission file number 001-15531
|
LANDRYS
RESTAURANTS, INC.
(Exact Name of the Registrant as Specified in Its Charter)
|
|
|
DELAWARE
|
|
76-0405386
|
(State or Other Jurisdiction of
Incorporation or Organization)
|
|
(IRS Employer
Identification No.)
|
|
|
1510 WEST LOOP SOUTH
HOUSTON, TX 77027
|
|
77027
|
(Address of Principal Executive Offices)
|
|
(Zip Code)
|
(713)
850-1010
(Registrants Telephone Number, Including Area Code)
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
|
|
|
Common Stock, par value $.01 per Share
|
|
New York Stock Exchange
|
(Title of Class)
|
|
(Name of Exchange on Which Registered)
|
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes
¨
No
x
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)
of the Exchange Act. Yes
¨
No
x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past
90 days. Yes
x
No
¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such
files). Yes
¨
No
¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained
herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
x
Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of large accelerated filer and accelerated filer and smaller reporting
company in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated
filer
¨
Accelerated filer
x
Non-accelerated
filer
¨
Smaller reporting filer
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Act). Yes
¨
No
x
Aggregate market value of voting stock held by non-affiliates of the Registrant as of June 30, 2009 was $61,704,166.
For purposes of the determination of the above stated amount, only Directors and Executive Officers are presumed to be affiliates, but neither the registrant nor any such persons concedes they are affiliates of the registrant.
As of August 16, 2010, there were 16,235,207 shares of the registrants common stock outstanding.
EXPLANATORY NOTE
On April 30, 2010, we filed Amendment No. 1 on Form 10-K/A (Amendment No. 1) for the purpose of amending the
items under Part III of our Form 10-K filed on March 16, 2010 for the fiscal year ended December 31, 2009. Upon reviewing Amendment No. 1, we discovered that we failed to include as an exhibit to Amendment No. 1 the certification required
by Section 906 of the Sarbanes-Oxley Act of 2002. We are filing this Amendment No. 2 on Form 10-K/A for the sole purpose of including the certification required by Section 906 of the Sarbanes-Oxley Act of 2002. No other information in Amendment
No. 1 is amended hereby.
ITEM 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
The following information is set forth with respect to our Directors:
|
|
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Positions
|
|
Director
Since
|
|
Term
Expires
|
Tilman J. Fertitta (2)
|
|
52
|
|
President, Chief Executive Officer and Director
|
|
1993
|
|
2010
|
Steven L. Scheinthal (2)
|
|
48
|
|
Executive Vice President and General Counsel,
Secretary and Director
|
|
1993
|
|
2010
|
Kenneth Brimmer (1)
|
|
54
|
|
Director
|
|
2004
|
|
2010
|
Michael S. Chadwick (1)
|
|
58
|
|
Director
|
|
2001
|
|
2010
|
Richard H. Liem
|
|
56
|
|
Executive Vice President, Chief Financial
Officer and Director
|
|
2009
|
|
2010
|
Joe Max Taylor (1)
|
|
77
|
|
Director
|
|
1993
|
|
2010
|
(1)
|
Member of Audit Committee
|
(2)
|
Member of Executive Committee
|
Mr. Fertitta
has served as our President and Chief Executive Officer since 1987. In 1988, he became the
controlling stockholder and assumed full responsibility for all of our operations. Prior to serving as our President and CEO, Mr. Fertitta devoted his full time to the control and operation of a hospitality and development company.
Mr. Fertitta serves on numerous boards and charitable organizations.
Mr. Scheinthal
has
served as our Executive Vice President or Vice President of Administration, General Counsel and Secretary since September 1992. He devotes a substantial amount of time to lease and contract negotiations and is primarily responsible for our
compliance with all federal, state and local ordinances. Prior to joining us, he was a partner in the law firm of Stumpf & Falgout in Houston, Texas. Mr. Scheinthal represented us for approximately five years before becoming part of
our company. He has been licensed to practice law in the state of Texas since 1984.
Mr. Brimmer
is the CEO and Chairman of the Board of STEN Corporation. Mr. Brimmer has been CEO of STEN Corporation since October 2003 and has been a director of STEN Corporation since February 1998. Mr. Brimmer has also been Chief Manager of
Brimmer Company, LLC, a private investment company since December 2001. From April 2000 until June 2003, he served as Chairman and Director of Active IQ Technologies, Inc. and was CEO from April 2000 until December 2001. Previously, Mr. Brimmer
was President of Rainforest Cafe, Inc. from April 1997 until April 2000 and was Treasurer from its inception in 1995 until April 2000. Prior to that, Mr. Brimmer was employed by Grand Casinos, Inc. and its predecessor from 1990 until April
1997. Mr. Brimmer also is a director and serves on both the Audit and Compensation Committees of Hypertension Diagnostics, Inc. He has a degree in accounting and worked as a CPA in the audit division of Arthur Andersen & Co. from 1977
through 1981. Mr. Brimmer was elected to our Board of Directors in 2004. Mr. Brimmers extensive restaurant and casino background, as well as his leadership abilities bring valuable skill and experience to our Board.
Mr. Chadwick
has been engaged in the commercial and investment banking businesses since 1975. From 1988 to
1994, Mr. Chadwick was President of Chadwick, Chambers & Associates, Inc., a private merchant
2
investment banking firm in Houston, Texas, which he founded in 1988. From 1994 to 2009, Mr. Chadwick was Senior Vice President and a Managing Director in the Corporate Finance Group of
Sanders Morris Harris, an investment banking and financial advisory firm. In 2010, Mr. Chadwick joined Growth Capital Partners, a boutique investment and merchant banking firm serving the middle market. Mr. Chadwick was elected to our
Board of Directors in 2001. Mr. Chadwicks extensive experience in the commercial and investment banking field provides a valuable resource to our Board.
Mr. Liem
serves as Executive Vice President and Chief Financial Officer and has served as Senior Vice
President of Finance since June 2004. He started with us in 1999 as the Vice President of Accounting and Corporate Controller. Mr. Liem joined us from Carrols Corporation, a restaurant company located in Syracuse, NY, where he was the Vice
President of Financial Operations from 1994 to 1999. He was with the audit division of Price Waterhouse, L.L.P. from 1983 to 1994. Mr. Liem is a certified public accountant.
Mr. Taylor
was formerly the chief law enforcement administrator for Galveston County, Texas. He has served as
a Director and Executive Committee member of American National Insurance Company, a publicly-traded insurance company, for ten years and served on the Board of Directors of Moody Gardens, a hospitality and entertainment complex located in Galveston,
Texas. Mr. Taylor was elected to our Board of Directors in 1993. He served on our Audit Committee from 1993 through 2004 and rejoined the Audit Committee in May 2009. Mr. Taylors leadership skills provide a critical skill set and
resource to our Board.
EXECUTIVE OFFICERS
In addition to Messrs. Fertitta, Scheinthal and Liem, for which information is provided above, the following persons are
executive officers:
|
|
|
|
|
|
|
Name
|
|
Age
|
|
Position
|
|
Officer
Since
|
Jeffrey L. Cantwell
|
|
45
|
|
Senior Vice President of Development
|
|
2006
|
K. Kelly Roberts
|
|
51
|
|
Chief Administration OfficerHospitality and Gaming
Division
|
|
2007
|
Mr. Cantwell serves as Senior Vice President of Development and has served as Vice President of Development, and
Director of Design and Construction. He was promoted to an executive officer in 2006. He has been employed by us since his graduation from Southwest Texas State University in June, 1992. While in college, he worked in many of our restaurants and
developed a significant understanding of restaurant operations.
Mr. Roberts serves as Chief
Administration OfficerHospitality and Gaming Division and has served as Chief Financial OfficerHotel Division and ControllerHotel Division. He has been employed by the Company since 1996. He has over 25 years experience in the
hospitality business in finance and operations working for various hotel chains and independent management companies. He also currently serves on the executive board of The Greater Houston Convention and Visitors Bureau.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our directors, executive officers and holders of more
than 10% of our common stock to file with the Securities and Exchange Commission (SEC) initial reports of ownership and reports of changes in ownership of common stock. We believe, based solely on a review of the copies of such reports
furnished to us and on representations from our existing directors and executive officers, that all existing directors and executive officers and holders of more than 10% of our common stock subject to the reporting requirements of
Section 16(a) have filed on a timely basis all reports required during, or with respect to, the year ended December 31, 2009.
3
Board Leadership and its Role in Risk Management
We are led by Mr. Fertitta. Mr. Fertitta has served as our Chairman and Chief Executive Officer since 1993. Our
non-management directors meet regularly in executive session. Mr. Fertitta, as our CEO and largest stockholder, has a working knowledge of our day-to-day operations and issues that face us. As such, our Board believes that Mr. Fertitta is
the best person to lead and guide the Board of Directors. We therefore believe this leadership structure, with a combined Chairman/CEO position and experienced independent directors, benefits us by providing a strong, unified leadership for our
management team and Board and is the optimal structure for us and our stockholders.
While the full Board of
Directors oversees our management of risks, our management team is responsible for the day-to-day risk management process. The Audit Committee reviews with management, as well as internal and external auditors, our business risk management process,
including the adequacy of our overall control environment and controls in selected areas representing significant financial and business risk. The Audit Committee reviews reports from management at least quarterly regarding managements
assessment of various risks and considers the impact of risk on our financial position and the adequacy of our risk-related internal controls. Our Audit Committee also considers risks that could be implicated by our compensation programs, and our
Board annually reviews the effectiveness of our leadership structure. In addition, our Audit Committee as well as senior management reports regularly to the full Board of Directors.
Codes of Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics that is applicable to all of our Directors, officers and other
employees. The Code is posted under the Corporate Governance portion of the Investor Relations section on our website at
www.LandrysRestaurants.com
and is available to any stockholder upon request. We have also adopted a Code of Ethics
Statement by the CEO and senior financial officers, which is filed with the SEC as an exhibit to our 2003 Annual Report on Form 10-K. If there are any changes or waivers of the Code of Business Conduct and Ethics which applies to the CEO and senior
financial officers, we will disclose it on our website in the same location. Our Code of Business Conduct and Ethics or Code of Ethics Statement can also be obtained free of charge by directing a written request to Steven L. Scheinthal, Secretary,
Landrys Restaurants, Inc., 1510 West Loop South, Houston, Texas, 77027.
Director Independence
For a director to be deemed independent, each independent director must meet the independence requirements of
the NYSE and applicable state and federal law, including the rules and regulations of the SEC, including the following requirements:
|
|
|
No director who is an employee, or whose immediate family member is an executive officer of the Company is independent until three years after the
end of such employment relationship.
|
|
|
|
No director who receives, or whose immediate family member receives, more than $120,000 per year in direct compensation from the Company, other than
director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service), is independent until three years after he or she ceases to receive more
than $120,000 per year in such compensation.
|
|
|
|
No director who is affiliated with or employed by, or whose immediate family member is affiliated with or employed in a professional capacity by, a
present or former internal or external auditor of the Company is independent until three years after the end of the affiliation or the employment of such auditing relationship.
|
|
|
|
No director who is employed, or whose immediate family member is employed, as an executive officer of another company where any of the
Companys present executives serve on that companys Compensation Committee is independent until three years after the end of such service or the employment relationship.
|
4
|
|
|
No director who is an executive officer or an employer, or whose immediate family member is an executive officer, of a company that makes payments
to, or receives payments from, the Company for property or services in an amount which, in any single fiscal year, exceeds the greater of $1 million, or 2% of such other companys consolidated gross revenues, is independent until three years
after falling below such threshold.
|
The definition of independence and compliance with
these guidelines will be reviewed periodically by the Board. The Board believes that directors who are also employees of the Company should be limited only to those officers whose positions make it appropriate for them to sit on the Board.
Our Board of Directors has affirmatively determined that the following majority of directorsKenneth
Brimmer, Michael S. Chadwick and Joe Max Taylorqualified as independent under the NYSE standards for 2009, as well as the Companys standards for director independence.
Executive Sessions of the Board of Directors
Non-Employee Directors have the right to meet in executive sessions prior to or after scheduled meetings of the Board of
Directors. Unless otherwise designated, Joe Max Taylor serves as the presiding director at each such executive session.
Communications with Directors
The Board of Directors has adopted corporate governance guidelines that provide that our security holders and other
interested parties may communicate with one or more of our Directors, including the Non-Employee Directors, by mail in care of: Steven L. Scheinthal, Secretary, Landrys Restaurants, Inc., 1510 West Loop South, Houston, Texas 77027. Such
communications should specify the intended recipient or recipients. All such communications, other than unsolicited commercial solicitations, will be forwarded to the appropriate director or directors for review.
Controlled Company Exemption
Our Board of Directors has determined that the Company is a Controlled Company as defined by the NYSE rules
because Mr. Tilman J. Fertitta holds more than 50% of our voting power. In 2009, we exercised our rights under this exemption and as a result, do not require that a majority of our Board of Directors be composed of independent directors,
and we no longer maintain a Nominating Committee and Compensation Committee. We still maintain an independent Audit Committee in order to fully satisfy the rules of the SEC and NYSE.
COMMITTEES OF THE BOARD OF DIRECTORS
We have an Executive Committee, an Audit Committee and a Governance Committee. We have reviewed our Committee structures
in order to fully satisfy the existing rules of the SEC and NYSE and believe that they satisfy all of such rules. A copy of the Audit Committee Charter is available under the Corporate Governance portion of the Investor Relations section of our
website at
www.LandrysRestaurants.com
.
There were four meetings of the Audit Committee and eleven
meetings of the Companys Board of Directors held during 2009. All of the current Board members attended 100% of the meetings of the Board and of the committees of the Board on which they were members. It is the policy of the Board that, to the
extent possible, all Directors attend the Annual Meeting of Stockholders. All Directors attended the 2009 Annual Meeting of Stockholders.
The Audit Committee consists of three independent directors. The members of the Audit Committee are Michael Chadwick
(Chairman), Kenneth Brimmer and Joe Max Taylor. The Audit Committees primary purpose
5
is to assist the Board of Directors oversight of (a) the integrity of our financial statements and disclosures; (b) our compliance with legal and regulatory requirements;
(c) the independent auditors qualifications and independence; and (d) the performance of our internal audit and independent auditors. The Audit Committee has the sole authority to appoint and terminate our independent auditors. Our
Board of Directors has determined that Mr. Chadwick, Chairman of the Audit Committee, is an audit committee financial expert as described in Item 401(h) of the SECs Regulation S-K. In addition, the Board of Directors has
determined that each member of the Audit Committee is independent, as independence for audit committee members is defined in the listing standards of the NYSE. The Audit Committee is established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act. The Corporate Governance Committee consists of one independent Non-Employee Director, Mr. Taylor. The Corporate Governance Committee is charged with identifying and making recommendations to the Board of Directors
regarding the Companys corporate governance.
Nomination Process
The Company is a Controlled Company as such term is defined under the rules of the NYSE (due to the level of
stock ownership of Mr. Tilman J. Fertitta). The Company does not have a standing nominating committee as the Board believes such a committee would not materially enhance the nominating process. Instead, the Companys Board of
Directors relies on the expertise of the Board as a whole in choosing its director candidates with diverse backgrounds that can best represent stockholders through sound judgment. The Companys Directors are familiar with each other through
their Board service and as a result has not established criteria or guidelines in considering Board nominees. Each of the Directors is also highly experienced and knowledgeable in business and board affairs. Should the Company or the Board determine
in the future that additional or other Board nominees are advisable, it is likely that a variety of sources would be consulted for possible candidates, including the Directors of the Company, various advisors to the Company, and possibly one or more
search firms. The process by which a stockholder of the Company may suggest a nominee for Director of the Company can be found below.
Stockholder nominations for Director should be made in writing to Mr. Steven L. Scheinthal, Secretary,
Landrys Restaurants, Inc., 1510 West Loop South, Houston, Texas 77027. In order to nominate a Director at the Annual Meeting, we require that a stockholder follow the procedures set forth herein. In order to recommend a nominee for a Director
position, a stockholder must be a stockholder of record at the time he, she or it gives notice of recommendation and must be entitled to vote for the election of Directors at the meeting at which such nominee will be considered. Stockholder
recommendations must be made pursuant to written notice delivered to the Secretary at our principal executive offices (i) in the case of a nomination for election at an annual meeting, not less than 60 days prior to the first anniversary of the
date of our notice of annual meeting for the preceding years annual meeting; and (ii) in the case of a special meeting at which Directors are to be elected, not later than the close of business on the later of the 90th day prior to such
special meeting or the tenth day following the day on which public announcement is first made of the date of the meeting and of the nominees proposed by the Board of Directors to be elected at the special meeting. In the event that the date of the
annual meeting is changed by more than 30 days from the anniversary date of the preceding years annual meeting, the stockholder notice described above will be deemed timely if it is received not later than the close of business on the later of
the 90th day prior to such annual meeting or the tenth day following the day on which public announcement of the date of such meeting is first made.
The stockholder notice must set forth the following:
|
|
|
As to each person the stockholder proposes to nominate for election as a Director, all information relating to such person that would be required to
be disclosed in solicitations of proxies for the election of such nominees as Directors pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the Exchange Act), and such persons written consent to serve
as a Director if elected; and
|
|
|
|
As to the nominating stockholder and the beneficial owner, if any, on whose behalf the nomination is made, such stockholders and beneficial
owners, name and address as they appear on our books, the
|
6
|
class and number of shares of our common stock which are owned beneficially and of record by such stockholder and such beneficial owner, and an affirmative statement of whether either such
stockholder or such beneficial owner intends to deliver a proxy statement and form of proxy to a sufficient number of stockholders to elect such nominee or nominees.
|
In addition to complying with the foregoing procedures, any stockholder nominating a Director must also comply with all
applicable requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder.
ITEM 11.
|
EXECUTIVE COMPENSATION
|
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis explains the philosophy underlying our compensation strategy and the
fundamental elements of compensation paid to our Chief Executive Officer, Chief Financial Officer, and other individuals, whom we refer to as executive officers, included in the Summary Compensation Table. Specifically, this Compensation
Discussion and Analysis addresses the following:
|
|
|
Objectives of our compensation programs;
|
|
|
|
What our compensation programs are designed to reward;
|
|
|
|
Elements of our compensation program and why we pay each element;
|
|
|
|
How we determine each element of compensation; and
|
|
|
|
Other important compensation policies affecting the executive officers.
|
Objectives of Our Compensation Program.
Our business strategy is to develop and operate a diversified restaurant,
hospitality and entertainment company offering customers unique dining, leisure and entertainment experiences. We believe that this strategy creates a loyal customer base, generates a high level of repeat business and provides superior returns to
our investors. Our compensation program is designed to attract, retain and motivate employees in order to effectively execute our business strategy.
What Our Compensation Program Is Designed to Reward.
Our compensation program is designed to reward performance of
executive officers that contributes to the achievement of our business strategy on both a short-term and long-term basis. We reward qualities that we believe help achieve our strategy such as teamwork, individual performance in light of general
economic and industry specific conditions, individual performance that supports our core values, resourcefulness, the ability to manage our business, level of job responsibility and tenure with us.
Elements of Our Compensation Program and Why We Pay Each Element
. The Board believes that the compensation
packages for executive officers should consist of the following components:
|
|
|
annual incentive bonus;
|
|
|
|
long-term equity awards;
|
|
|
|
broad-based employee benefits.
|
7
We pay base salary in order to recognize each executive officers
unique value and historical contributions to our success in light of salary norms in the industry and the general marketplace, to match competitors for executive talent, to provide executives with regularly-paid income, and to reflect position and
level of responsibility.
We include an annual cash bonus as part of our compensation program because we
believe this element of compensation helps to motivate management to achieve key corporate objectives by rewarding the achievement of these objectives. We also provide an annual cash bonus in order to be competitive from a total remuneration
standpoint.
Long-term equity-based incentive compensation in the form of options and restricted stock is an
element of our compensation policy because we believe it aligns executives interests with the interests of our stockholders, rewards long-term performance, is required in order for us to be competitive from a total remuneration standpoint, to
encourage executive retention, and to give executives the opportunity to share in our long-term performance. These types of awards also provide a form of compensation that we believe is transparent and easy for stockholders to understand.
Deferred compensation benefits are intended to promote retention by providing a long-term savings opportunity
on a tax-efficient basis.
We provide perquisites to our executive officers, since we believe this
compensation helps us achieve our compensation objectives of recruiting and retaining executive officers and generally allows our executives to work more efficiently and protects the well being of our executives.
We offer broad-based employee benefits such as payment of insurance premiums in order to provide a competitive
remuneration package and as an essential component of recruiting and retaining executive talent.
How We Determine Each
Element of Compensation
Role of Our Board and CEO.
The Board reviews and approves our executive
compensation strategy and principles to ensure that they are aligned with our business strategy and objectives, stockholder interests, desired behaviors and corporate culture. The primary responsibilities of the Board concerning its oversight of
executive compensation are to:
|
|
|
conduct an annual review of all compensation elements for our executive officers;
|
|
|
|
review the performance of the CEO and meet to discuss the findings of the review; and
|
|
|
|
review and approve our management development and succession planning practices and strategies.
|
The Board considers multiple factors when it determines the amount of total direct compensation (the sum of base salary,
incentive bonus and long-term compensation delivered through equity awards) to award to executive officers each year. Among these factors are:
|
|
|
how proposed amounts of total direct compensation to our executives compare to amounts paid to similar executives both for the prior year and over a
multi-year period;
|
|
|
|
internal pay equity considerations; and
|
|
|
|
broad trends in executive compensation generally.
|
The Board relies upon its judgment in making compensation decisions, after reviewing our performance and carefully
evaluating an executives performance during the year. The Board generally does not adhere to rigid formulas or necessarily react to short-term changes in business performance in determining the amount and mix
8
of compensation elements. We incorporate flexibility into our compensation programs and in the assessment process to respond to and adjust for the evolving business environment. As a result, the
Board has not adopted any policy or guidelines for allocating compensation between long-term and currently paid out compensation, between cash and non-cash compensation, or among different forms of non-cash compensation.
In addition, the CEO recommends to the Board annual pay increases, annual bonus amounts and long-term incentive grants
for other executive officers. To assist it in carrying out its responsibilities, the Board may also receive reports and recommendations from outside compensation consultants, and may consult with its own legal, accounting or other advisors. However,
to date the Board has not used independent legal or accounting advisors. The Board has the sole authority, to the extent deemed necessary and appropriate, to retain and terminate any compensation consultants, outside counsel or other advisors,
including having the sole authority to approve the firms or advisors fees and other retention. During 2009, the Board did not retain a compensation consultant.
Benchmarking.
The Board does not use benchmarking to set executive compensation. However, the Board does utilize
survey data and publicly available information to evaluate compensation for specific positions when necessary.
Base Salary.
Base salaries for executive officers are reviewed on an annual basis and at the time of promotion or
other change in responsibilities. Increases in salary are based on cost of living adjustments as well as subjective evaluation of such factors as the level of responsibility, individual performance, our overall performance, level of pay both of the
executive in question and other similarly situated executives pay levels within the Company.
The base salary
for our CEO was established in an employment agreement we entered into with him in 2003 which was renewed in 2008. The initial base salary under the employment contract was based on a previous report prepared by Pearl Meyer & Partners (an
independent compensation consultant) and factors taken into account in determining the CEOs base salary were his leadership position with the Company, his level of responsibility and the integral, dynamic role he plays in guiding the Company.
Since 2003, his base salary has increased based primarily on cost of living increases as well as the other factors set forth under Base Salary above. The CEOs base salary was $1,500,000 for 2009. The CEO has not had an increase in
his base salary in three years.
The Board discusses the remaining executive officers base salaries with
the CEO, who presents his suggestions for adjustment, if necessary. For 2009, the base salaries of the executive officers named in the Summary Compensation Table, whom we sometimes refer to as the named executive officers, were the same
as was paid to the named executive officers in 2008. In addition, the Board has the discretion to periodically approve additional salary adjustments it feels are warranted based on general compensation changes within the industry, individual
performance or significant changes in duties and responsibilities and input from the CEO.
Annual Bonus.
Executive officers, senior management and other personnel have the potential to receive a significant portion of their annual cash compensation as a cash bonus. Annual bonuses are generally granted based on each executive officers base
salary, tenure, individual performance and our financial and market performance. The Board does not establish any particular guidelines or financial measures. Rather, the Board prefers to make a subjective determination after considering all
measures collectively but bases much of its determination upon input from the CEO. The Board approves each annual bonus. Typically, bonuses are awarded for prior year results in the following year, when actual results for the entire year are known.
When considering whether to award 2009 bonuses, in addition to the above factors, the Board in particular
considered the executive officers continued performance and outstanding contribution with respect to the Companys financial performance in 2009 given the difficult economic environment that existed during the year.
9
Long-Term Incentive Compensation.
The Board administers our incentive
plans and performs functions that include selecting award recipients, determining the timing of grants and assigning the number of shares awarded, fixing the time and manner in which awards are exercisable, setting option exercise prices and vesting
and expiration dates, and from time to time adopting rules and regulations for carrying out the purposes of our plans. For compensation decisions regarding the grant of equity compensation to executive officers, the Board typically considers the
competitive environment associated with longer-term compensation and recommendations from our CEO.
Except as
set forth under the CEOs employment agreement, we have no set formula for the granting of equity awards to individual executives or employees. Nor do we have any program, plan or obligation that requires us to grant equity compensation on
specified dates. However, our Board does follow a policy of not granting equity incentives when material non-public information exists that may affect the short-term price of our stock. Our Board did not award any equity compensation to any
executive officer in 2009. Information about unvested restricted stock and outstanding options held by our named executive officers and directors is contained in the Outstanding Equity Awards at December 31, 2009 and Director
Compensation tables.
Deferred Compensation Plan.
Executive officers and our most highly
compensated senior management are eligible to participate in our deferred compensation plan, which provides an opportunity for eligible employees to defer up to 90% of their annual base salary and 100% of bonus compensation into an account that will
be credited with earnings at the same rate as one or more investment indices chosen by the employees, which are similar to the investment funds available under our 401(k) plan. We also make a matching contribution of up to 30%, depending on the
position of the employee with us.
Perquisites.
We also provide certain personal benefits to executive
officers, which are reflected in the All Other Compensation column of the Summary Compensation Table. These benefits include executive life and disability insurance and a car allowance. We believe these benefits are reasonable, competitive and
consistent with our overall executive compensation program. Under a program to enhance the safety and effectiveness of management in support of our business and operations, corporate-owned aircraft is made available for essential business trips and
other company activities. The CEO and other members of management, with the approval of the CEO, are permitted limited personal use of the corporate-owned aircraft. Also, the CEO is provided security services, including home security systems and
monitoring and personal security services. These security services are provided for our benefit, and the Board considers the related expenses to be appropriate business expenses rather than personal benefits. In general, the perquisites our CEO is
entitled to receive are contained in his employment agreement and are described in more detail under Employment Agreements and Potential Payments Upon Termination or Change of Control.
Broad-Based Employee Benefits.
Our executive officers are eligible to participate in company-sponsored benefit
programs on the same terms and conditions as those generally provided to our employees. We believe that the offering of broad-based employee benefits to our executive officers is essential to achieving our goal of recruiting and retaining executive
talent. These benefits include basic health benefits, dental benefits, disability protection, life insurance, and similar programs. The cost of company-sponsored benefit programs are negotiated by us with the providers of such benefits and the
executive officers contribute to the cost of the benefits. We have a 401(k) plan and make annual matching contributions to the 401(k) plan on behalf of eligible employees. These contributions are discretionary and historically limited to 25% on up
to 5% of contributed funds.
Other Compensation Policies Affecting the Executive Officers
Compliance with Section 162(m) of the Internal Revenue Code
. Section 162(m) disallows a federal income
tax deduction to publicly held companies for certain compensation paid to our CEO and four other most highly compensated executive officers to the extent that compensation exceeds $1 million per executive officer covered by Section 162(m) in
any fiscal year. The limitation applies only to compensation that is not considered performance based as defined in the Section 162(m) rules.
10
In designing our compensation programs, the Board considers the effect of
Section 162(m) together with other factors relevant to our business needs. We have historically taken, and intend to continue taking, appropriate actions, to the extent we believe desirable, to preserve the deductibility of annual incentive and
long-term performance awards. However, the Board has not adopted a policy that all compensation paid must be tax-deductible and qualified under Section 162(m).
We believe that the 2009 base salaries and annual bonuses paid to the individual executive officers covered by
Section 162(m) will not exceed the Section 162(m) limit and will be fully deductible under Section 162(m), except for a portion paid to the CEO.
Other compensation paid to the executive officers covered by Section 162(m) that is not considered
performance-based is not deductible to the extent that it, together with other non-performance based compensation, exceeds $1 million in any fiscal year. For fiscal 2009, these amounts included the CEOs income imputed for personal
use of corporate aircraft and life insurance premiums paid by us.
Stock Ownership Requirements.
The
Board does not maintain a policy relating to stock ownership guidelines or requirements for our executive officers because the Board does not feel that it is necessary to impose such a policy on our executive officers. If circumstances change, the
Board will review whether such a policy is appropriate for executive officers.
Financial Restatement.
In the event of a material restatement of our financial results, we believe it would be prudent to carefully review the facts and circumstances that caused the restatement before determining the appropriate course of action. Upon completion of an
investigation of the facts and circumstances surrounding a material restatement, we would consider: (1) whether any compensation was paid or awarded on the basis of having achieved performance targets, (2) whether a particular employee or
officer was engaged in misconduct that contributed to the restatement, and (3) whether the compensation paid to the employee or officer would have been reduced had the financial results been properly reported. If it is determined that an
employee or officer did engage in misconduct, the Board would take action as it deems appropriate.
Employment Agreements.
In general, our executive officers do not have employment, severance or change-of-control
agreements. Our executive officers serve at the will of the Board, which enables us to terminate their employment with discretion as to the terms of any severance arrangement. This is consistent with our compensation philosophy. However, in 2003, we
determined that the loss of our CEOs services could materially and adversely affect our business, financial condition and development. Accordingly, we entered into an employment agreement with our CEO. In 2007, neither the Board nor the CEO
elected to terminate the employment agreement, and as a result, according to its terms, in 2008, it automatically renewed for another five (5) year term. This employment agreement contains change of control provisions that provide for severance
benefits upon a change of control. The provisions of this employment agreement are discussed more under the caption Employment Agreements and Potential Payments Upon Termination or Change of Control below.
Assessment of Risk
The Board is aware of the need to take risk into account when making compensation decisions. By design, our compensation
program for executive officers is designed to avoid excessive risk taking. In particular, incentive awards are not locked in to specific metrics, but rather, after review of performance relative to these metrics, the Compensation Committee
determines final incentive awards in their discretion.
11
COMPENSATION REPORT
The Board of Directors oversees our executive compensation program in a manner that serves our interests and those of our
shareholders. Our management has prepared the Compensation Discussion and Analysis of the compensation program for named executive officers. The Board has reviewed and discussed the Compensation Discussion and Analysis for fiscal year 2009 (included
in this Form 10-K/A) with our management. Based on this review and discussion, the Board approved the inclusion of this Compensation Discussion and Analysis in this Form 10-K/A for filing with the SEC.
|
Board of Directors
|
|
Tilman J. Fertitta, Chair
|
12
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth in summary, compensation paid by us and our subsidiaries for the years ended
December 31, 2009, 2008 and 2007 to our CEO, CFO and our other most highly compensated executive officers whose cash compensation exceeded $100,000:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name and Principal Position
|
|
Year
|
|
Salary ($)
|
|
Bonus
($) (1)
|
|
Stock Awards
($)
|
|
Option
Awards
($)
|
|
All
Other
Compen-
sation
($)
(2)
|
|
Total ($)
|
Tilman J. Fertitta,
President and Chief Executive Officer
|
|
2009
2008
2007
|
|
1,500,000
1,500,000
1,500,000
|
|
1,585,000
|
|
|
|
|
|
1,458,974
2,061,238
2,271,223
|
|
2,958,974
3,561,238
5,356,223
|
|
|
|
|
|
|
|
|
Richard H. Liem,
Executive Vice President and Chief Financial Officer
|
|
2009
2008
2007
|
|
308,654
308,654
300,000
|
|
250,000
|
|
|
|
|
|
28,365
44,865
46,365
|
|
337,019
353,519
596,365
|
|
|
|
|
|
|
|
|
Steven L. Scheinthal,
Executive Vice President, Secretary and General Counsel
|
|
2009
2008
2007
|
|
375,950
375,950
365,000
|
|
415,000
|
|
|
|
|
|
52,240
75,578
72,650
|
|
428,190
451,528
852,650
|
|
|
|
|
|
|
|
|
Jeffrey L. Cantwell,
Senior Vice President of Development
|
|
2009
2008
2007
|
|
257,214
257,214
250,000
|
|
100,000
100,000
|
|
|
|
|
|
14,935
23,196
25,571
|
|
372,149
280,410
375,571
|
|
|
|
|
|
|
|
|
K. Kelly Roberts,
Chief Administration OfficerHospitality and Gaming
Division
|
|
2009
2008
2007
|
|
216,058
216,058
210,000
|
|
100,000
100,000
|
|
|
|
|
|
12,115
19,526
15,806
|
|
328,173
235,584
325,806
|
(1)
|
A bonus was paid in 2008 to reflect accomplishments in 2007. No bonuses were paid for 2008 or 2009 to certain executive officers.
|
(2)
|
See the 2009 All Other Compensation table below for additional information.
|
13
2009 All Other Compensation
The following table describes each component of the All Other Compensation column in the Summary Compensation Table. All
numbers are in dollars.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name of Executive
|
|
Deferred
Compensation
(1)
|
|
Life
Insurance
Premiums
(2)
|
|
Personal
Use of
Corporate
Aircraft
(3)
|
|
Auto
Expense
(4)
|
|
Use of
Company
Personnel
(5)
|
|
Security
(6)
|
|
Other (7)
|
Tilman J. Fertitta
|
|
|
|
|
$
|
293,219
|
|
$
|
26,649
|
|
|
|
|
$
|
32,000
|
|
$
|
289,559
|
|
$
|
1,458,974
|
|
|
|
|
|
|
|
|
Richard H. Liem
|
|
|
|
|
$
|
4,365
|
|
|
|
|
$
|
24,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven L. Scheinthal
|
|
|
|
|
$
|
28,371
|
|
|
|
|
$
|
17,708
|
|
|
|
|
|
|
|
$
|
6,161
|
|
|
|
|
|
|
|
|
Jeffery L. Cantwell
|
|
|
|
|
$
|
2,935
|
|
|
|
|
$
|
12,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
K. Kelly Roberts
|
|
$
|
12,462
|
|
$
|
3,115
|
|
|
|
|
$
|
9,000
|
|
|
|
|
|
|
|
|
|
(1)
|
This column reports our contribution under our deferred compensation plan.
|
(2)
|
This column reports the dollar value of any life insurance premium paid by the Company on behalf of the named executive officers.
|
(3)
|
This column includes the incremental cost for the executive officers personal use of our aircraft. The calculation includes the variable costs
incurred as a result of personal flight activity such as: trip related maintenance, aircraft fuel, satellite communications, landing fees and any travel expenses for the flight crew. It excludes non-variable costs, such as hangar expense, ongoing
maintenance, purchase and lease costs of the aircraft, exterior paint, interior refurbishment and regularly scheduled inspections, which would have been incurred regardless of whether there was any personal use of aircraft. The incremental cost
incurred by us has been determined to be approximately $2,100 per flight hour based on the foregoing incremental costs. On certain occasions when Mr. Fertitta is traveling for business purposes family members will travel with him and there is
no incremental cost to the Company.
|
(4)
|
This column reports the incremental cost to the Company for automobile expenses for the named executive officers. Although Mr. Fertittas
employment agreement provides that the Company is to furnish him with an automobile, he did not have a Company car, and the Company did not pay any automobile related expenses on his behalf.
|
(5)
|
Represents the incremental cost to the Company with respect to use of Company personnel provided to Mr. Fertitta under his employment
agreement.
|
(6)
|
This column reports the actual cost of providing security services to Mr. Fertitta as provided for in his employment agreement. Under our
executive security program, Mr. Fertitta has been provided security services, including home security systems and monitoring and personal security services. We provide these security services for our benefit and consider the related expenses to
be appropriate business expenses.
|
(7)
|
This column reports the total amount of other benefits provided, none of which individually exceeded the greater of $25,000 or 10% of the total
amount of these benefits for the named executive (except as otherwise described herein). With respect to Mr. Fertitta, these amounts represent: (a) supplemental medical reimbursement, (b) dockage fees and other nominal miscellaneous
expenses, (c) membership fees and dues for country clubs, (d) administrative support services and financial service fees for tax preparation, estate planning and legal or financial advice to which Mr. Fertitta is entitled under his
employment agreement, and (e) the Companys expense for the excise tax gross-up on restricted stock awards to Mr. Fertitta in the amount of $1,387,031. All Other Compensation does not include contributions and matching
contributions to charities in accordance with Mr. Fertittas employment agreement.
|
GRANTS OF
PLAN-BASED AWARDS
There were no equity or stock option grants in 2009 to any of the executive officers
named in the Summary Compensation Table.
14
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2009
The following table contains information with respect to outstanding equity awards at our fiscal year end on
December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
Name
|
|
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
|
|
Number of
Securities
Underlying
Unexercised
Options (#)
Unexercisable
|
|
Option
Exercise
Price
($)
|
|
Option
Expiration
Date
|
|
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
|
|
Market Value
of Shares or
Units of Stock
That Have Not
Vested
($)
(1)
|
Tilman J. Fertitta (2)
|
|
100,000
|
|
|
|
7.00
|
|
4/7/2010
|
|
775,000
|
|
16,499,750
|
|
|
250,000
|
|
|
|
8.50
|
|
3/16/2011
|
|
|
|
|
|
|
300,000
|
|
|
|
18.00
|
|
7/22/2012
|
|
|
|
|
|
|
250,000
|
|
|
|
27.50
|
|
6/8/2014
|
|
|
|
|
|
|
|
|
|
|
|
Richard H. Liem (3)
|
|
25,000
|
|
|
|
27.50
|
|
6/8/2014
|
|
6,000
|
|
127,740
|
|
|
|
|
|
|
|
Steven L. Scheinthal (4)
|
|
40,000
|
|
|
|
27.50
|
|
6/8/2014
|
|
8,000
|
|
170,320
|
|
|
|
|
|
|
|
Jeffrey L. Cantwell (5)
|
|
15,000
|
|
|
|
27.50
|
|
6/8/2014
|
|
1,714
|
|
36,491
|
|
|
|
|
|
|
|
K. Kelly Roberts (6)
|
|
|
|
5,000
|
|
15.80
|
|
1/1/2014
|
|
1,142
|
|
24,313
|
(1)
|
The market value was determined using $21.29, the closing stock price of our common stock on the NYSE on December 31, 2009, the last day of
trading in 2009.
|
(2)
|
The vesting dates and amounts for unvested stock awards for Mr. Fertitta are: 100,000 on 1/1/13, 100,000 on 1/1/14, 100,000 on 1/1/15, 100,000
on 1/1/16 and 100,000 on 1/1/17 for a total of 500,000 shares and 275,000 shares of restricted stock vest on 1/1/13. The 100,000 of options set to expire on 4/7/2010, expired unexercised.
|
(3)
|
The vesting dates and amounts for unvested options and stock awards for Mr. Liem are: 6,000 shares of restricted stock vest in equal yearly
installments of 3,000 commencing on 4/6/10.
|
(4)
|
The vesting dates and amounts for unvested options and stock awards for Mr. Scheinthal are: 8,000 shares of restricted stock vest in equal
yearly installments of 4,000 commencing on 4/6/10.
|
(5)
|
The vesting dates and amounts for unvested stock awards for Mr. Cantwell are: 1,714 shares of restricted stock which vest in equal yearly
installments of 857 commencing on 4/6/10.
|
(6)
|
The vesting dates and amounts for unvested options and stock awards for Mr. Roberts are: 5,000 options which vest in equal yearly installments
of 1,000 commencing on 1/1/10 and 1,142 shares of restricted stock which vest in equal yearly installments of 571 commencing on 4/6/10.
|
OPTION EXERCISES AND STOCK VESTED 2009
The following table contains information with respect to options exercised and stock acquired on vesting by the executive
officers named above during the fiscal year ended December 31, 2009.
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
Stock Awards
|
Name
|
|
Number of
Shares
Acquired on
Exercise
(#)
|
|
Value
Realized
on
Exercise
($) (1)
|
|
Number of
Shares
Acquired
on
Vesting
(#)
|
|
Value
Realized on
Vesting ($)
|
Tilman J. Fertitta
|
|
|
|
|
|
|
|
|
Richard H. Liem
|
|
|
|
|
|
3,000
|
|
17,490
|
Steven L. Scheinthal
|
|
50,000
|
|
140,037
|
|
4,000
|
|
23,320
|
Jeffery L. Cantwell
|
|
1,400
|
|
4,340
|
|
857
|
|
4,996
|
K. Kelly Roberts
|
|
5,000
|
|
26,800
|
|
571
|
|
3,329
|
15
(1)
|
Reflects the difference between the market value of the shares at the exercise date and the option exercise price multiplied by the number of shares
acquired on exercise.
|
NON-QUALIFIED DEFERRED COMPENSATION
The following table contains information with respect to the non-qualified deferred compensation plan by the executive
officers named above during the fiscal year ended December 31, 2009.
|
|
|
|
|
|
|
|
|
Name
|
|
Executive
Contributions
in 2009
($) (1)
|
|
Aggregate
Earnings
in 2009
($)
|
|
Aggregate
Withdrawals/
Distributions
($)
|
|
Aggregate
Balance at
December 31,
2009
($) (2)
|
Tilman J. Fertitta
|
|
|
|
14,977
|
|
|
|
60,343
|
|
|
|
|
|
Richard H. Liem
|
|
|
|
48,853
|
|
|
|
241,928
|
|
|
|
|
|
Steven L. Scheinthal
|
|
|
|
24,321
|
|
127,196
|
|
92,639
|
|
|
|
|
|
Jeffrey L. Cantwell
|
|
|
|
16,159
|
|
121,306
|
|
58,236
|
|
|
|
|
|
K. Kelly Roberts
|
|
12,462
|
|
23,248
|
|
|
|
106,130
|
(1)
|
Amounts in the Executive Contributions in 2009 column are included in either the Salary or Bonus column in the
Summary Compensation Table, as applicable.
|
(2)
|
All amounts shown were previously reported as compensation to each executive officer in the Summary Compensation Table for previous years, except
Mr. Roberts who was not listed in the Summary Compensation Table prior to 2006. Total contributions to him prior to 2006 were $20,720.
|
The following describes the material features of our non-qualified deferred compensation plan in which the executive
officers participate.
The deferred compensation plan went into effect in 2004. Executive contributions are
made from base salary or bonus. Under the deferred compensation plan, a participant receives his prior deferrals and vested matching contributions, along with any accumulated earnings thereon, following his termination of employment, disability (as
defined by the plan), death (in which case the designated beneficiary will receive the benefit), or, possibly, upon a change of control. The Participant may elect to defer a minimum of $2,000 of base salary and/or bonus, and is subject to a maximum
contribution of 90% of the participants base salary and 100% of the bonus.
We have hired Clark
Consulting to help manage the deferred compensation plan. Clark Consulting has set up an investment vehicle, similar to our 401(k) plan offered to non-executives. The deferred compensation plan allows the participants to allocate and/or reallocate
the balance in their account daily among available measurement funds. Therefore, the annual earnings will be dependant upon the portfolio selections made by each participant. During 2009, there was a selection of 14 funds available with a combined
average return of 28.31%. During 2009, the best performing fund was Janus Aspen Forty Instl with an annual return of 46.33%. The worst performing fund in 2009 was the PIMCO VIT Real Return Adm with an annual return of 14.06%. The Maxim Money Market
had a return of .01%.
We have the discretion to make matching contributions to a participants account.
In 2009, due to the national economic recession, we elected not to make a matching contribution.
The deferred
compensation plan allows participants to elect the form in which the retirement benefit will be paid (lump-sum or installments). The participant has the opportunity to change the form of the retirement benefit payment subject to certain
requirements.
16
We have adopted a rabbi trust to protect the assets of the
deferred compensation plan.
EMPLOYMENT AGREEMENTS AND POTENTIAL PAYMENTS UPON
TERMINATION OR CHANGE OF CONTROL
Effective January 1, 2003, we entered into an employment agreement with Tilman Fertitta, our CEO, that sets forth
the general terms and conditions of his employment for the term commencing January 1, 2003. The initial term of the contract expired at the end of 2007 and automatically renewed in 2008 for an additional period of five years.
Under the agreement, Mr. Fertitta agrees to serve as our President, CEO and Chairman of the Board for an annual base
salary of not less than $1,250,000. The Board is required to review Mr. Fertittas salary at least annually to determine if any salary increases are warranted. The agreement provides that Mr. Fertitta shall be entitled to participate
in any cash bonus programs established by the Company, and in the absence of a cash bonus program, to receive an annual bonus as determined by the Board and in the range of up to two times Mr. Fertittas base salary. The Agreement provides
that:
|
|
|
Mr. Fertitta is eligible to participate in the Companys deferred compensation plans,
|
|
|
|
Mr. Fertitta is entitled to an automobile and payment or reimbursement of all operating and maintenance costs,
|
|
|
|
the Company will provide an annual expense and/or administrative or support/personnel allowance and will pay or reimburse Mr. Fertitta for
annual financial service fees for tax preparation, estate planning and legal or financial advice,
|
|
|
|
the Company will reimburse Mr. Fertitta for all reasonable business expenses, including travel, business entertainment and membership fees and
dues for country clubs Mr. Fertitta deems necessary to carry out his duties under the employment agreement,
|
|
|
|
the Company will provide Mr. Fertitta with the use of Company transportation and dockage fees,
|
|
|
|
Mr. Fertitta is entitled to life insurance and other insurance benefits as approved by the Board and provided to other executive officers of
the corporation as well as payment or reimbursement of medical expenses or charges not otherwise paid for by Company-provided insurance,
|
|
|
|
the Company shall provide for the security of Mr. Fertitta, and
|
|
|
|
for each year of the agreement, the Company shall make charitable contributions to charities of Mr. Fertittas choice of at least $500,000
as well as match Mr. Fertittas charitable contributions in an amount not to exceed $250,000 per year.
|
In addition, the agreement grants to Mr. Fertitta the right to receive stock options and 500,000 shares of
restricted stock, to be issued in the amount of 100,000 shares a year over the primary term of the agreement and which vests 10 years from the effective date of the grant. Beginning in 2006, the Company adopted a general policy to grant restricted
stock in lieu of options due to the many variables in valuing option awards. In connection with this new policy, the Company amended the employment agreement effective March 14, 2006. Previously, the employment agreement provided that
Mr. Fertitta was entitled to an aggregate of 800,000 stock options over the term of the agreement, of which 250,000 were issued in 2004. After it was determined to be in the Companys best interest to issue restricted stock rather than
options, the Company, based on the recommendation of Pearl Meyer & Partners, issued 275,000 shares of restricted stock to the CEO in place of the remaining 550,000 options. The conversion factor was determined based on a report by Pearl
Meyer & Partners. The restricted stock will not vest until seven years from the date of the grant.
In the event Mr. Fertittas employment is terminated as a result of his death or disability (as defined in the
employment agreement), he, or his legal representative, is entitled to receive all compensation he would
17
otherwise have been entitled to receive throughout the remaining term of the employment period as well as other death or disability benefits we provide. In addition, any stock options or
restricted stock immediately vest. In the event Mr. Fertittas employment is terminated (i) by him other than for good reason, or (ii) by us for cause, Mr. Fertitta will receive all accrued compensation and other amounts
owed to him as of the date of termination. In the event Mr. Fertittas employment is terminated (i) by us other than for cause, (ii) by Mr. Fertitta for good reason or (iii) within one year of a change in control, all
of Mr. Fertittas stock options and restricted stock immediately vest and Mr. Fertitta is entitled to receive, among other things, (a) a lump sum payment of $5,000,000 in consideration of his agreement not to compete with us,
(b) an amount equal to three times 180% of his base salary, (c) an additional lump sum payment necessary to pay the life insurance policy and (d) a continuation of certain other benefits.
The Company does not have employment agreements with any of its other executive officers.
Potential Payments on Termination Following a Change in Control
As described above, our CEO is party to an employment agreement with us and each executive officer is a party to equity
award agreements relating to options and restricted stock granted and various plans. These agreements and plans provide that an executive officer is entitled to additional consideration in the event of a termination event. The following sets forth
the incremental compensation that would be payable by us to each of our executive officers in the event of the executive officers termination of employment with us under various scenarios, which we refer to as termination events,
including the executive officers voluntary resignation, involuntary termination for cause, involuntary termination without cause, termination by the executive for good reason, termination in connection with a change in control, termination in
the event of disability, termination in the event of death, and termination in the event of retirement. In accordance with applicable SEC rules, the following discussion assumes:
|
(a)
|
that the termination event in question occurred on December 31, 2009, the last business day of 2009; and
|
|
(b)
|
with respect to calculations based on our stock price, we used $21.29, which was the reported closing price of our common stock on December 31,
2009.
|
The analysis contained in this section does not consider or include payments made to
an executive officer with respect to contracts, agreements, plans or arrangements to the extent they do not discriminate in scope, terms or operation, in favor of our executive officers and that are available generally to all salaried employees. The
actual amounts that would be paid upon an executive officers termination of employment can only be determined at the time of such executive officers termination. Due to the number of factors that affect the nature and amount of any
compensation or benefits provided upon the termination event, any actual amounts paid or distributed may be higher or lower than reported below. Factors that could affect these amounts include the timing during the year of any such event, our stock
price at such time and the executive officers age and service.
18
Tilman J. Fertitta
. In addition to the amounts listed below,
Mr. Fertitta is entitled to all accrued compensation, unreimbursed expenses and other benefits through the date of termination in the event of his termination.
|
|
|
|
|
|
|
|
|
|
|
|
Element
|
|
Involuntary
Termination without
Cause or for Good
Reason
($)
|
|
|
Termination
Following a Change
in Control
($)
|
|
|
Termination in the
Event of Disability
($)
|
|
|
Termination in the
Event of Death
($)
|
Cash
|
|
7,119,055
|
(1)
|
|
7,119,055
|
(1)
|
|
5,890,110
|
|
|
5,890,110
|
Severance Payment (2)
|
|
8,100,000
|
|
|
8,100,000
|
|
|
|
|
|
|
Health & Security
|
|
See
|
(3)
|
|
See
|
(3)
|
|
See
|
(3)
|
|
|
Stock Option Awards (4)
|
|
4,184,500
|
|
|
4,184,500
|
|
|
4,184,500
|
|
|
4,184,500
|
Restricted Stock Awards (5)
|
|
16,499,750
|
|
|
16,499,750
|
|
|
16,499,750
|
|
|
16,499,750
|
280G Excise Gross-Up (6)
|
|
20,592,848
|
|
|
20,592,848
|
|
|
11,863,744
|
|
|
11,863,744
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
56,496,153
|
|
|
56,496,153
|
|
|
38,438,104
|
|
|
38,438,104
|
(1)
|
In the case of a termination without cause, for good reason or following a change of control, includes a lump sum payment in the amount of
$5,000,000 in exchange for Mr. Fertittas agreement not to compete or solicit employees. The balance of the cash proceeds represents payments on Mr. Fertittas life insurance policy, the value of administrative support services
and financial service fees, for tax preparation, estate planning and legal or financial advice to which Mr. Fertitta is entitled under his employment agreement, use of Company transportation and dockage fees, and membership fees and dues for
country clubs, all of which Mr. Fertitta is entitled to for a period of five years following the termination event.
|
(2)
|
Under Mr. Fertittas employment agreement, he is entitled to a severance payment equal to three times 180% of his base salary at the rate
in effect immediately prior to the termination event.
|
(3)
|
Under Mr. Fertittas employment agreement, in the case of a termination without cause, for good reason or following a change of control,
the Company is obligated to maintain group life insurance, accidental death and dismemberment insurance, hospitalization, surgical, and other insurance coverage in effect immediately prior to the termination event as well as supplemental medical
reimbursement and maintain personal security for Mr. Fertitta until the later of Mr. Fertittas death, his wifes death or until all of his children reach the age of 25 or complete college. In the case of a termination in the
event of disability or death, Mr. Fertitta is entitled to benefits at least equal to the most favorable benefits provided by the Company to the estates and beneficiaries of other executive level employees of the Company under plans, programs,
practices and policies relating to death or disability benefits. In 2009, the approximate cost of the Company provided health insurance and medical expense reimbursement to Mr. Fertitta was $19,645. The cost to us for security services to
Mr. Fertitta in 2009 was $289,559.
|
(4)
|
Represents immediate vesting of all stock options. The closing price of the Companys common stock on the NYSE on December 31, 2009, was
$21.29 per share.
|
(5)
|
Represents immediate vesting of all restricted stock awards. The closing price of the Companys common stock on the NYSE on December 31,
2009, was $21.29 per share.
|
(6)
|
In the case of a termination without cause, for good reason or following a change of control, represents excise tax gross-up under Section 280G
and 4999 of the Internal Revenue Code for all amounts payable to Mr. Fertitta in connection with a termination. In the case of a termination in the event of disability or death, represents excise tax gross-up for amounts payable in connection
with the vesting of stock options and restricted stock.
|
19
Richard H. Liem
. Mr. Liem does not have an employment agreement.
Therefore, he is not entitled to any compensation payable or benefits upon a termination event except as provided in his equity award agreements.
|
|
|
|
|
|
|
Element
|
|
Termination in
Connection with
Change in Control
($)
|
|
Termination in the
Event of Disability
($)
|
|
Termination in the
Event of Death
($)
|
Stock Option Awards
|
|
0
|
|
0
|
|
0
|
Restricted Stock Awards
|
|
127,740
|
|
127,740
|
|
127,740
|
|
|
|
|
|
|
|
Total
|
|
127,740
|
|
127,740
|
|
127,740
|
Steven L. Scheinthal
. Mr. Scheinthal does not have an employment agreement. Therefore, he is not entitled to
any compensation payable or benefits upon a termination event except as provided in his equity award agreements.
|
|
|
|
|
|
|
Element
|
|
Termination in
Connection with
Change in Control
($)
|
|
Termination in the
Event of Disability
($)
|
|
Termination in the
Event of Death
($)
|
Stock Option Awards
|
|
0
|
|
0
|
|
0
|
Restricted Stock Awards
|
|
170,320
|
|
170,320
|
|
170,320
|
|
|
|
|
|
|
|
Total
|
|
170,320
|
|
170,320
|
|
170,320
|
Jeffery L. Cantwell
. Mr. Cantwell does not have an employment agreement. Therefore, he is not entitled to any
compensation payable or benefits upon a termination event except as provided in his equity award agreements.
|
|
|
|
|
|
|
Element
|
|
Termination in
Connection with
Change in Control
($)
|
|
Termination in the
Event of Disability
($)
|
|
Termination in the
Event of Death
($)
|
Stock Option Awards
|
|
0
|
|
0
|
|
0
|
Restricted Stock Awards
|
|
36,491
|
|
36,491
|
|
36,491
|
|
|
|
|
|
|
|
Total
|
|
36,491
|
|
36,491
|
|
36,491
|
K. Kelly Roberts
. Mr. Roberts does not have an employment agreement. Therefore, he is not entitled to any
compensation payable or benefits upon a termination event except as provided in his equity award agreements.
|
|
|
|
|
|
|
Element
|
|
Termination in
Connection with
Change in Control
($)
|
|
Termination in the
Event of Disability
($)
|
|
Termination in the
Event of Death
($)
|
Stock Option Awards
|
|
27,450
|
|
27,450
|
|
27,450
|
Restricted Stock Awards
|
|
36,470
|
|
36,470
|
|
36,470
|
|
|
|
|
|
|
|
Total
|
|
63,920
|
|
63,920
|
|
63,920
|
20
COMPENSATION OF DIRECTORS 2009
Our Directors who are not executive officers received Directors fees of $36,000 for 2009, plus the expenses
incurred by them on our behalf. Non-employee directors also receive $1,000 for each Audit Committee meeting attended. In addition, Messrs. Chadwick (Chairman) and Brimmer served on our Special Committee to review and consider
Mr. Fertittas going private offer that was made in 2009 and were paid $60,000 each, for their service. In addition, Mr. Taylor earned compensation for serving on the Governance Committee and for consulting and governmental support
services prior to his appointment as an Audit Committee member which amount is reflected in the All Other Compensation column. The Board of Directors obtained shareholder approval in 2006 to provide for the issuance of shares of restricted stock
upon a non-employee directors election to the Board. In 2009, the non-employee directors each received 1,000 shares of restricted stock. None of the directors have any perquisites over $10,000.
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Fees Earned
or Paid
in
Cash
($)
|
|
Stock
Awards
($) (1)
|
|
Option
Awards
($)(2)
|
|
All Other
Compensation
($)
|
|
Total
($)
|
Michael S. Chadwick (3)
|
|
100,000
|
|
21,290
|
|
|
|
|
|
121,290
|
Joe Max Taylor (4)
|
|
79,000
|
|
21,290
|
|
|
|
20,000
|
|
120,290
|
Kenneth Brimmer (5)
|
|
101,000
|
|
21,290
|
|
|
|
|
|
122,290
|
(1)
|
Calculations based on the closing price of the Companys common stock on the NYSE on December 31, 2009 of $21.29 per share.
|
(2)
|
No option awards were issued in 2009.
|
(3)
|
At December 31, 2009, Mr. Chadwick had 16,000 options which were exercisable and 500 vested shares of restricted stock and 1,000 shares
which vest on 5/7/10 and 5/7/11.
|
(4)
|
At December 31, 2009, Mr. Taylor had 3,200 options which were exercisable and restricted stock of 1,000 shares which vest on 5/7/10 and
5/7/11.
|
(5)
|
At December 31, 2009, Mr. Brimmer had 10,000 options which were exercisable and 3,000 vested shares of restricted stock and 1,000 shares
which vest on 5/7/10 and 5/7/11.
|
COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
We are a Controlled Company as such term is defined under the rules of the NYSE and no longer have a compensation
committee. Our Board of Directors is now responsible for establishing executive compensation. None of our executive officers served as a director of another corporation whose executive officers served on our Board of Directors. None of our executive
officers served as a member of the compensation committee (or other board committee performing equivalent functions, or in the absence of any such committee, the entire Board of Directors) of another corporation whose executive officers served as
one of our Directors.
21
ITEM 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL HOLDERS AND MANAGEMENT
|
The following table sets forth, as of April 10, 2010, certain information regarding the beneficial ownership of our
common stock by (a) each person we know to own beneficially more than five percent of the outstanding shares of our common stock, (b) each of our directors, (c) each executive officer named in the Summary Compensation Table below, and
(d) all of our executive officers and directors as a group. Unless otherwise indicated, each of the stockholders has sole voting and investment power with respect to the shares beneficially owned. As of April 10, 2010, there were
16,236,435 shares of common stock outstanding. The address of each of Messrs. Fertitta, Scheinthal, Liem, Chadwick, Taylor, Brimmer, Cantwell and Roberts is 1510 West Loop South, Houston, Texas 77027.
|
|
|
|
|
|
Name of Beneficial Owner
|
|
Shares Beneficially
Owned
|
|
|
|
Number
|
|
Percent
|
|
Executive Officers and Directors
|
|
|
|
|
|
Tilman J. Fertitta (1)
|
|
9,694,155
|
|
56.9
|
%
|
Richard H. Liem (2)(3)
|
|
31,000
|
|
*
|
|
Steven L. Scheinthal (2)(3)
|
|
48,000
|
|
*
|
|
Jeffrey L. Cantwell (2)(3)
|
|
16,714
|
|
*
|
|
Kenneth Brimmer (2)(4)
|
|
14,713
|
|
*
|
|
Michael S. Chadwick (2)(4)
|
|
17,500
|
|
*
|
|
Joe Max Taylor (2)(4)
|
|
4,200
|
|
*
|
|
K. Kelly Roberts (2)(3)
|
|
2,713
|
|
*
|
|
5% owners
|
|
|
|
|
|
Dimensional Fund Advisors, LP (5)
|
|
1,433,178
|
|
8.8
|
%
|
Pershing Square Capital Management, L.P. (6)
|
|
1,544,255
|
|
9.5
|
%
|
UBS AG (7)
|
|
1,096,885
|
|
6.8
|
%
|
All executive officers and directors as a group (8 persons) (8)
|
|
9,828,995
|
|
57.3
|
%
|
(1)
|
Includes 800,000 shares subject to options owned by Mr. Fertitta that are immediately exercisable or will become exercisable within 60 days and
775,000 shares of restricted stock, 500,000 shares of which vest ten years from the effective date of grant and 275,000 shares of which vest seven years from the effective date of grant. 100,000 options expired unexercised on 4/7/10.
|
(2)
|
Includes 25,000; 40,000; 15,000; 10,000; 16,000; 3,200 and 1,000 shares subject to options, respectively, for the persons named in the above table,
which are exercisable within 60 days.
|
(3)
|
Includes restricted stock issued on April 6, 2006 which vests 20% a year over five years from the effective date of grant6,000 shares for
Mr. Liem, 8,000 shares for Mr. Scheinthal, 1,714 shares for Mr. Cantwell and 1,713 shares for Mr. Roberts.
|
(4)
|
Includes 1,500, 1,000 and 4,000 shares of restricted stock for Messrs. Chadwick, Taylor and Brimmer, respectively. 1,000 shares of the
restricted stock for each of the above named directors vest in equal annual installments on 5/7/10 and 5/7/11. All other shares are vested.
|
(5)
|
The address of Dimensional Fund Advisors Inc. is Palisades West, Building One, 6300 Bee Cave Road, Austin, Texas 78746. The information set forth
herein has been compiled from filings made with the SEC on Schedule 13G filed on February 10, 2010.
|
(6)
|
The address of Pershing Square Capital Management, L.P. is 888 Seventh Avenue,
42
nd
Floor, New York, New York 10019. The information set
forth herein has been compiled from filings made with the SEC on Schedule 13D on November 20, 2009.
|
(7)
|
The address of UBS AG is Bahnhofstrasse 45, P.O. Box CH-8021, Zurich, Switzerland. The information set forth herein has been complied from filings
made with the SEC on Schedule 13G filed on February 11, 2010.
|
(8)
|
Includes 910,200 shares subject to options for all officers and directors as a group which are, or will become exercisable within 60 days and
798,927 shares of restricted stock. See footnotes (1), (2), (3) and (4) above.
|
22
Equity Compensation Plan Information
The following table provides information as of December 31, 2009 regarding the number of shares of Common Stock that
may be issued under our equity compensation plans.
|
|
|
|
|
|
|
|
Plan Category
|
|
Number of securities
to be issued upon
exercise of
outstanding
options,
warrants and rights
|
|
Weighted average
exercise price of
outstanding options,
warrants and rights
|
|
Number of securities
remaining available for
future issuance under equity
compensation
plans
(excluding securities
reflected in column (a))
|
|
|
(a)
|
|
(b)
|
|
(c)
|
Equity compensation plans approved by the stockholders (1)
|
|
533,703
|
|
$
|
23.08
|
|
797,000
|
Equity compensation plans not approved by the stockholders (2)
|
|
603,200
|
|
$
|
13.82
|
|
207,745
|
|
|
|
|
|
|
|
|
Total
|
|
1,136,903
|
|
$
|
18.16
|
|
1,004,745
|
|
|
|
|
|
|
|
|
(1)
|
We have the following compensation plans under which awards have been issued or are authorized to be issued, which were adopted with stockholder
approval:
|
|
(a)
|
The Landrys Restaurants, Inc. 2002 Employee/Rainforest Conversion Plan authorizes the issuance of up to 2,162,500 shares. This plan allows
awards of non-qualified stock options, which may include stock appreciation rights, to our consultants, employees and non-employee directors. The plan is administered by our Board of Directors. Terms of the award, such as vesting and exercise price,
are to be determined by the Board of Directors and set forth in the grant agreement for each award.
|
|
(b)
|
We maintain two stock option plans, which were originally adopted in 1993, (the Stock Option Plans), as amended, pursuant to which options were
granted to our eligible employees and non-employee directors or our subsidiaries for the purchase of an aggregate of 2,750,000 shares of common stock. Options are no longer issued under either plan, however, options previously issued under the stock
option plans are still outstanding.
|
|
(c)
|
We also maintain the 1995 Flexible Incentive Plan, which was adopted in 1995, (Flex Plan), as amended, for key employees of the Company. Under the
Flex Plan eligible employees received stock options, stock appreciation rights, restricted stock, performance awards, performance stock and other awards, as defined by the Board of Directors or an appointed committee. The aggregate number of shares
of common stock issued under the Flex Plan (or with respect to which awards may be granted) were not in excess of 2,000,000 shares. Options are no longer issued under the Flex Plan; however, options previously issued are still outstanding.
|
(2)
|
We have the following compensation plans under which awards have been issued or are authorized to be issued, which were adopted without stockholder
approval:
|
|
(a)
|
The Landrys Restaurants, Inc. 2003 Equity Incentive Plan authorizes the issuance of up to 700,000 shares. This plan allows awards of both
qualified and non-qualified stock options, restricted stock, cash equivalent values, and tandem awards to employees. The plan is administered by our Board of Directors. Terms of the award, such as vesting and exercise price, are to be determined by
the Board of Directors and set forth in the grant agreement for each award.
|
|
(b)
|
On July 22, 2002, we issued options to purchase an aggregate of 437,500 shares under individual stock option agreements with individual members
of senior management. Options under these agreements were granted at market price and expire ten years from the date of grant. 302,400 options are still outstanding and are all vested.
|
|
(c)
|
On July 22, 2002, we issued options to purchase an aggregate of 6,000 shares to our non-employee directors. Options under these agreements were
granted at market price and expire ten years from the date of grant. These options are all vested.
|
|
(d)
|
On March 16, 2001, we issued options to purchase an aggregate of 387,500 shares to our senior management under individual stock option
agreements with individual members of senior management. Options under these agreements were granted at $8.50 and expire ten years from the date of grant. 261,300 options are still outstanding and are all vested.
|
23
|
(e)
|
On March 16 and September 13, 2001, options to purchase an aggregate of 240,000 shares were issued to certain of our individual employees,
under individual option grant agreements. Options under these agreements were granted at $8.50 and $15.80, respectively, expire ten years from the date of grant, and are all vested.
|
|
(f)
|
In addition, we have issued pursuant to an employment agreement, over its five year term, 775,000 shares of restricted stock, 500,000 shares which
vest 10 years from the grant date, and 275,000 shares which vest 7 years from the grant date. In addition, 250,000 stock options have also been granted pursuant to the employment agreement.
|
|
(g)
|
In April 2006, 102,000 restricted common shares were issued to key employees vesting ratably over five years and 8,000 restricted common shares were
granted to non-employee directors vesting ratably over two years.
|
|
(h)
|
In January 2007, 3,335 restricted common shares were issued to a key employee vesting ratably over five years and on September 27, 2007, 4,000
restricted common shares were granted to non-employee directors vesting ratably over two years.
|
ITEM 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
|
Our policy is, to the extent practicable, to avoid transactions (except those which are employment related) with officers,
directors, and affiliates. In any event, any such transactions will be entered into on terms which we believe are no less favorable to us than could be obtained from third parties, and such transactions will be approved by a majority of our
disinterested directors.
In 1996, we entered into a Consulting Service Agreement (the Agreement)
with Fertitta Hospitality, LLC (Fertitta Hospitality), which is jointly owned by our Chairman and Chief Executive Officer and his wife. Pursuant to the Agreement, we provided to Fertitta Hospitality management and administrative
services. Under the Agreement, we received a fee of $2,500 per month plus the reimbursement of all out-of-pocket expenses and such additional compensation as agreed upon. In 2003, a new agreement was signed (Management Agreement).
Pursuant to the Management Agreement, we receive a monthly fee of $7,500, plus reimbursement of expenses. The Management Agreement provides for a renewable three-year term.
In 1999, we entered into a ground lease and purchase option with 610 Loop Venture, LLC, a company wholly owned by our
Chairman and Chief Executive Officer, on land owned by us adjacent to our corporate headquarters. Under the terms of the ground lease, 610 Loop Venture paid us base rent of $12,000 per month plus pro-rata real property taxes and insurance. In 2009,
610 Loop Venture exercised its purchase option and acquired the land from us for approximately $1.8 million.
In 2002, we entered into an $8,000 per month, 20 year, with option renewals, ground lease agreement with Fertitta
Hospitality for a new Rainforest Cafe on prime waterfront land in Galveston, Texas. The annual rent is equal to the greater of the base rent or percentage rent up to six percent, plus taxes and insurance. In 2009, 2008 and 2007, we paid base and
percentage rent aggregating $434,000, $561,000 and $573,000, respectively.
As permitted by the employment
contract between us and the Chief Executive Officer, charitable contributions were made by us to a charitable Foundation that the Chief Executive Officer served as Trustee in the amount of $130,000, $98,000 and $99,000 in 2009, 2008 and 2007,
respectively. The contributions were made in addition to the normal salary and bonus permitted under the employment contract.
We, on a routine basis, hold or host promotional events, training seminars and conferences for our personnel. In
connection therewith, we incurred in 2009, 2008 and 2007 expenses in the amount of $20,850, $29,000 and $47,432, respectively, at resort hotel properties owned by our Chief Executive Officer and managed by us.
Landrys and Fertitta Hospitality jointly sponsored events and promotional activities in 2009, 2008 and 2007 which
resulted in shared costs and use of our personnel or Fertitta Hospitality employees and assets.
24
The foregoing agreements were entered into between related parties and were
not the result of arms-length negotiations. Accordingly, the terms of the transactions may have been more or less favorable than might have been obtained from unaffiliated third parties.
ITEM 14.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
REPORT OF THE AUDIT COMMITTEE
FOR THE YEAR ENDED DECEMBER 31, 2009
The Audit Committee is composed of three Non-Employee Directors and acts under a written charter adopted by the Board of
Directors. The Audit Committee has the sole responsibility for the appointment and retention of the Companys independent registered public accounting firm (independent auditors) and the approval of all audit and engagement fees.
The Audit Committee meets periodically with management, the internal auditors and the independent auditors regarding accounting policies and procedures, audit results and internal accounting controls. The internal auditors and the independent
auditors have free access to the Audit Committee, without managements presence to discuss the scope and results of their audit work. The Companys management is primarily responsible for the Companys financial statements and the
quality and integrity of the reporting process, including establishing and maintaining the systems of internal controls over financial reporting and assessing the effectiveness of those controls. The independent auditors, Grant Thornton LLP
(GT), are responsible for auditing those financial statements and internal controls over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States) and for expressing an opinion
on the conformity of the financial statements with accounting principles generally accepted in the United States as well as reporting on the effectiveness of the Companys internal controls over financial reporting. On behalf of the Board of
Directors, the Audit Committee monitors the Companys financial reporting processes and systems of internal control, the independence and the performance of the independent accountants, and the performance of the internal auditors.
Management has represented to the Audit Committee that the Companys consolidated financial statements were prepared
in accordance with generally accepted accounting principles, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Audit Committee has discussed with the
independent accountants their evaluation of the accounting principles, practices and judgments applied by management, and the Audit Committee has discussed any items required to be communicated to it by the independent accountants in accordance with
standards established by the American Institute of Certified Public Accountants.
In fulfilling its oversight
responsibilities, the Audit Committee has reviewed and discussed the audited financial statements for the year ended December 31, 2009, and matters related to Section 404 of the Sarbanes-Oxley Act of 2002 with the Companys management
and representatives of GT. The Audit Committee discussed with GT the matters required to be discussed by Statement on Auditing Standards No. 61,
Communication with
Audit Committees,
as amended. In addition, the Audit Committee
discussed with GT their independence from the Company and its management, including the matters in the written disclosures required by Public Company Accounting Oversight Board (PCAOB) Rule 3526, Communication with Audit Committees
Concerning Independence, and has received from GT the written disclosure required by the PCAOB.
Based on the
reviews and discussions described above, the Audit Committee has recommended to the Companys Board of Directors that the Companys audited financial statements be included in the Companys Annual Report on Form 10-K for the year
ended December 31, 2009.
|
Audit Committee
|
|
Michael S. Chadwick, Chairman
|
Kenneth Brimmer
|
Joe Max Taylor
|
25
The Audit Committee has again retained GT as the Companys independent
registered public accounting firm for the fiscal year ending December 31, 2010.
Audit Fees
During the years ended December 31, 2009 and December 31, 2008, the aggregate fees billed by GT for the audit of
the Companys financial statements and for such year and for the reviews of the Companys interim financial statements were $950,547 and $1,000,812, respectively.
Audit-Related Fees
The Company paid Audit-Related Fees for the fiscal year ended December 31, 2009 to GT in the amount of $295,025. The
Company paid Audit-Related Fees for the fiscal year ended December 31, 2008 to GT in the amount of $100,421.
Tax Fees
The Company did not pay any fees for professional services rendered by GT for tax compliance, tax advice
and tax planning for the fiscal years ended December 31, 2009 or 2008.
All Other Fees
The Company did not pay any fees for services rendered by GT not reportable as Audit Fees, Audit-Related Fees or Tax Fees
for the fiscal years, ended December 31, 2009 or 2008.
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee annually reviews and pre-approves the audit, review, attest and permitted non-audit
services to be provided during the next audit cycle by the independent registered public accounting firm. To the extent practicable, at the same meeting the Audit Committee also reviews and approves a budget for each of such services. Services
proposed to be provided by the independent registered public accounting firm that have not been pre-approved during the annual review and the fees for such proposed services must be pre-approved by the Audit Committee. Additionally, fees for
previously approved services that are expected to exceed the previously approved budget must also be approved by the Audit Committee.
All requests or applications for the independent registered public accounting firm to provide services to the Company
must be submitted to the Audit Committee by the independent registered public accounting firm and management and state as to whether, in their view, the request or application is consistent with applicable laws, rules and regulations relating to
independent registered public accounting firm independence. In the event that any member of management or the independent registered public accounting firm becomes aware that any services are being, or have been, provided by the independent
registered public accounting firm to the Company without the requisite pre-approval, such individual must immediately notify the Chief Financial Officer, who must promptly notify the Chairman of the Audit Committee and appropriate management so that
prompt action may be taken to the extent deemed necessary or advisable.
All of the services provided by the
Companys independent registered public accounting firm during 2009 were pre-approved by the Audit Committee.
26
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned hereunto duly authorized in the City of Houston, State of Texas, on the
3
rd
day of September, 2010.
|
L
ANDRY
S
R
ESTAURANTS
, I
NC
.
|
|
/s/ Tilman J.
Fertitta
|
Tilman J. Fertitta
Chairman of the Board, President and
Chief Executive Officer
|
|
|
|
|
|
Name
|
|
Title
|
|
Date
|
|
|
|
/s/ Tilman J.
Fertitta
Tilman J. Fertitta
|
|
Chairman, President, Chief
Executive Officer and Director
(Principal Executive Officer)
|
|
September 3, 2010
|
|
|
|
/s/ Rick H.
Liem
Rick H. Liem
|
|
Executive Vice President, Chief
Financial Officer and Director
(Principal Financial Officer and
Principal Accounting Officer)
|
|
September 3, 2010
|
|
|
|
/s/ Steven L.
Scheinthal
Steven L. Scheinthal
|
|
Executive Vice President,
Secretary, General Counsel and
Director
|
|
September 3, 2010
|
|
|
|
/s/ Michael S.
Chadwick
Michael S. Chadwick
|
|
Director
|
|
September 3, 2010
|
|
|
|
/s/ Joe Max
Taylor
Joe Max Taylor
|
|
Director
|
|
September 3, 2010
|
|
|
|
/s/ Kenneth
Brimmer
Kenneth Brimmer
|
|
Director
|
|
September 3, 2010
|
27
EXHIBIT INDEX
|
|
|
Exhibit
No.
|
|
Exhibit
|
*31.1
|
|
Certification of Chief Executive Officer pursuant to rule 13a-14(a)
|
|
|
*31.2
|
|
Certification of Chief Financial Officer pursuant to rule 13a-14(a)
|
|
|
*32
|
|
Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b)
|
28
Landrys Restaurants (NYSE:LNY)
Historical Stock Chart
From May 2024 to Jun 2024
Landrys Restaurants (NYSE:LNY)
Historical Stock Chart
From Jun 2023 to Jun 2024