Exhibit (a)(1)(A)

Offer to Purchase for Cash

Any and All Issued and Outstanding Shares of Common Stock

of

RUTH’S HOSPITALITY GROUP, INC.

at

$21.50 Per Share

by

RUBY ACQUISITION CORPORATION

an indirect, wholly owned subsidiary of

DARDEN RESTAURANTS, INC.

 

Ruby Acquisition Corporation (“Purchaser” or “we”), a Delaware corporation and an indirect, wholly owned subsidiary of Darden Restaurants, Inc., a Florida corporation (“Parent”), is offering to purchase, subject to certain conditions, including the satisfaction of the Minimum Condition (as defined below), any and all of the issued and outstanding shares of common stock, par value $0.01 per share, of Ruth’s Hospitality Group, Inc., a Delaware corporation (“Ruth’s” or the “Company” and such shares, the “Shares”), at a price of $21.50 per Share, without interest (the “Offer Price”), net to the seller in cash, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in this Offer to Purchase (this “Offer to Purchase”) and in the related Letter of Transmittal (the “Letter of Transmittal” and which, together with this Offer to Purchase and other related materials, as each may be amended or supplemented from time to time, constitutes the “Offer”).

We are making the Offer pursuant to the Agreement and Plan of Merger, dated as of May 2, 2023 (as it may be amended from time to time, the “Merger Agreement”), by and among the Company, Parent and Purchaser. The Merger Agreement provides, among other things, that, as soon as practicable following the consummation of the Offer, Purchaser will be merged with and into the Company (the “Merger”) without a vote of the stockholders of the Company to adopt the Merger Agreement and consummate the Merger in accordance with Section 251(h) of the General Corporation Law of the State of Delaware (as amended, the “DGCL”), with the Company continuing as the surviving corporation (the “surviving corporation”) in the Merger and thereby becoming an indirect, wholly owned subsidiary of Parent.

As a result of the Merger, each Share issued and outstanding immediately prior to the effective time of the Merger (the “effective time”) (other than Shares that are (i) held by a holder who is entitled to demand appraisal and who has (or for which the “beneficial owner” (as defined in Section 262(a) of the DGCL) has) properly exercised appraisal rights with respect thereto in accordance with, and who has (and, to the extent applicable, for which the applicable beneficial owner has) complied with, Section 262 of the DGCL with respect to any such Shares held by such holder (the “Dissenting Company Shares”) or (ii) held by the Company as treasury stock or owned by Parent, Purchaser or any of Parent’s other subsidiaries (including Shares acquired pursuant to the Offer (the “Owned Company Shares”)) will be cancelled and automatically converted into the right to receive the Offer Price in cash (without interest and less any applicable withholding taxes), which we refer to as the “Merger Consideration.” Shares described in clauses (i) and (ii) above, which we refer to as “Excluded Shares,” will be cancelled at the effective time and will not be exchangeable for the Merger Consideration. The Dissenting Company Shares will entitle their holders only to the rights granted to them under Section 262 of the DGCL. Following the Merger, the Company will cease to be a publicly traded company.

Under no circumstances will interest be paid on the Offer Price for the Shares, regardless of any extension of the Offer or any delay in making payment for the Shares.

The board of directors of the Company (the “Company Board”) has unanimously (i) determined and declared that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are advisable and in the best interests of the Company and its stockholders, (ii) approved the execution, delivery and performance by the Company of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger, (iii) resolved to recommend that the Company’s stockholders accept the Offer and tender their shares to Purchaser pursuant to the Offer and (iv) agreed and authorized that the Merger be governed by Section 251(h) of the DGCL (such recommendation, the “Company Board Recommendation”).

The Offer is not subject to any financing condition. The Offer is conditioned upon, among other things, the satisfaction of the Minimum Condition and the HSR Condition (each as defined below). The “Minimum Condition” requires that the number of Shares validly tendered (and not validly withdrawn) prior to the Offer Expiration Time (as defined below), together with any Shares owned by Parent, Purchaser or any of their affiliates, represents at least one more Share than 50% of the total number of Shares outstanding as of one minute after 11:59 p.m., New York City time, on Tuesday, June 13, 2023 (the “Offer Expiration Time,” unless Purchaser extends the period during which the Offer is open in accordance with the Merger Agreement, in which event “Offer Expiration Time” will mean the latest time and date at which the Offer, as so extended by Purchaser, will expire). The “HSR Condition” requires that any waiting period (including all extensions thereof) applicable to the consummation of the Offer and the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, will have expired or been terminated. The Offer is also subject to other conditions described in Section 15 — “Conditions of the Offer.” Except as described in Section 11 — “The Merger Agreement; Other Agreements,” if at the otherwise scheduled Offer Expiration Time, all of the Offer conditions have not been satisfied or waived (to the extent waiver is permitted under the Merger Agreement and applicable law), Parent will cause Purchaser to and Purchaser will extend the Offer for one or more occasions in consecutive increments of up to ten business days, or for such longer or shorter period as the Company, Purchaser and Parent may agree, in order to permit satisfaction of such Offer conditions.

A summary of the principal terms of the Offer appears under the heading “Summary Term Sheet.” You should read this entire Offer to Purchase, the Letter of Transmittal and the other documents to which this Offer to Purchase refers carefully before deciding whether to tender your Shares in the Offer.

May 16, 2023

 

IMPORTANT

If you desire to tender all or any portion of your Shares to Purchaser pursuant to the Offer, you should either (i) complete and sign the Letter of Transmittal for the Offer, which is enclosed with this Offer to Purchase, in accordance with the instructions contained in the Letter of Transmittal, with any required signature guarantees if the Letter of Transmittal so requires, and mail or deliver the Letter of Transmittal and any other required documents to American Stock Transfer & Trust Company, LLC, in its capacity as depositary for the Offer (the “Depositary”), and deliver the certificates for your Shares to the Depositary along with the Letter of Transmittal, or tender your Shares by book-entry transfer by following the procedures described in Section 3 — “Procedures for Tendering Shares,” or (ii) request that your broker, dealer, commercial bank, trust company or other nominee effect the transaction for you. If you hold Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must contact that institution in order to tender your Shares pursuant to the Offer. If you are a record holder but your stock certificate is not available or you cannot deliver it to the Depositary before the Offer Expiration Time, you may be able to tender your Shares using the enclosed Notice of Guaranteed Delivery as described in Section 3 — “Procedures for Tendering Shares.”

* * * * *

Questions and requests for assistance regarding the Offer or any of the terms thereof may be directed to Okapi Partners LLC, which is the information agent for the Offer (the “Information Agent”), at the address and telephone number set forth for the Information Agent below and on the back cover of this Offer to Purchase. Additional copies of this Offer to Purchase, the related Letter of Transmittal and other materials related to the Offer may also be obtained for free from the Information Agent. Additionally, copies of this Offer to Purchase, the related Letter of Transmittal and any other materials related to the Offer may be obtained at the website maintained by the U.S. Securities and Exchange Commission (the “SEC”) at www.sec.gov. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance.

This Offer to Purchase and the Letter of Transmittal contain important information, and you should read both carefully and in their entirety before making a decision with respect to the Offer.

This transaction has not been approved or disapproved by the SEC or any state securities commission, nor has the SEC or any state securities commission passed upon the fairness or merits of such transaction or upon the accuracy or adequacy of the information contained in this Offer to Purchase or the Letter of Transmittal. Any representation to the contrary is unlawful.

The Information Agent for the Offer is:

 

Okapi Partners LLC

1212 Avenue of the Americas, 17th Floor

New York, New York 10036

Bankers and Brokers Call: (212) 297-0720

Others Call Toll Free: (844) 202-6026

Email: info@okapipartners.com

 

TABLE OF CONTENTS

 

SUMMARY TERM SHEET			1
INTRODUCTION			9
THE TENDER OFFER			12
1.  Terms of the Offer			12
2.  Acceptance for Payment and Payment for Shares			14
3.  Procedures for Tendering Shares			15
4.  Withdrawal Rights			18
5.  Certain United States Federal Income Tax Consequences			18
6.  Price Range of Shares; Dividends			22
7.  Certain Information Concerning the Company			22
8.  Certain Information Concerning Parent, Purchaser and Certain Related Parties			23
9.  Source and Amount of Funds			24
10.  Background of the Offer; Past Contacts or Negotiations with the Company			25
11.  The Merger Agreement; Other Agreements			29
12.  Purpose of the Offer; Plans for the Company			60
13.  Certain Effects of the Offer			62
14.  Dividends and Distributions			62
15.  Conditions of the Offer			63
16.  Certain Legal Matters; Regulatory Approvals			64
17.  Fees and Expenses			67
18.  Miscellaneous			68
SCHEDULE I			69

 

SUMMARY TERM SHEET

The following are some Offer terms and questions that you, as a stockholder of the Company, may have and answers to those questions. This summary term sheet highlights selected information from this Offer to Purchase and may not contain all of the information that is important to you and is qualified in its entirety by the more detailed descriptions and explanations contained in this Offer to Purchase, the Letter of Transmittal and other related materials. To better understand the Offer and for a complete description of the legal terms of the Offer, you should read this Offer to Purchase, the Letter of Transmittal and other related materials carefully and in their entirety. The information concerning the Company contained herein and elsewhere in the Offer to Purchase has been provided to Parent and Purchaser by the Company or has been taken from, or is based upon, publicly available documents or records of the Company on file with the U.S. Securities and Exchange Commission (the “SEC”) or other public sources at the time of the Offer. Parent and Purchaser have not independently verified the accuracy and completeness of such information. Questions or requests for assistance may be directed to the Information Agent at the address and telephone numbers set forth for the Information Agent on the back cover of this Offer to Purchase. Unless otherwise indicated in this Offer to Purchase or the context otherwise requires, all references in this Offer to Purchase to “we,” “our” or “us” refer to Purchaser.

 

Securities Sought:		Subject to certain conditions, including the satisfaction of the Minimum Condition (as described below), any and all of the issued and outstanding shares of common stock, par value $0.01 per share, of the Company (the “Shares”). See Section 1 — “Terms of the Offer.”
Price Offered Per Share:		$21.50 per Share, without interest (the “Offer Price”), net to the seller in cash, less any applicable withholding taxes. See Section 1 — “Terms of the Offer.”
Offer Expiration Time:		One minute after 11:59 p.m., New York City time, on Tuesday, June 13, 2023 (as it may be extended in accordance with the terms of the Merger Agreement, the “Offer Expiration Time”). See Section 1 — “Terms of the Offer.”
Withdrawal Rights:		You can withdraw your Shares at any time prior to one minute after 11:59 p.m., New York City time, on Tuesday, June 13, 2023, unless the Offer is extended, in which case you can withdraw your Shares by the then extended expiration time and date. You can also withdraw your Shares at any time after Saturday, July 15, 2023, which is the 60th day after the date of commencement of the Offer, unless such Shares have already been accepted for payment by Purchaser pursuant to the Offer and not validly withdrawn. See Section 4 — “Withdrawal Rights.”
Purchaser:		Ruby Acquisition Corporation, a Delaware corporation and an indirect, wholly owned subsidiary of Darden Restaurants, Inc., a Florida corporation. See Section 8 — “Certain Information Concerning Parent, Purchaser and Certain Related Parties.”

Who is offering to buy my Shares?

Ruby Acquisition Corporation, or “Purchaser” or “we,” a Delaware corporation and an indirect, wholly owned subsidiary of Darden Restaurants, Inc., a Florida corporation (“Parent”), is offering to purchase any and all of the issued and outstanding Shares upon the terms and subject to the conditions contained in this Offer to Purchase and the Letter of Transmittal. Purchaser was formed for the sole purpose of making the Offer and completing the process by which Purchaser will be merged with and into the Company. See “Introduction” and Section 8 — “Certain Information Concerning Parent, Purchaser and Certain Related Parties.”

 

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What securities are you offering to purchase?

We are making an offer to purchase any and all of the issued and outstanding Shares on the terms and subject to the conditions set forth in this Offer to Purchase and the Letter of Transmittal. See “Introduction” and Section 1 — “Terms of the Offer.”

How much are you offering to pay and what is the form of payment?

We are offering to pay $21.50 per Share, without interest, net to the seller in cash, less any applicable withholding taxes, upon the terms and subject to the conditions contained in this Offer to Purchase and the Letter of Transmittal. See “Introduction” and Section 1 — “Terms of the Offer.”

Will I have to pay any fees or commissions?

If you are the record owner of your Shares and you tender your Shares to us in the Offer, you will not have to pay brokerage fees, commissions or similar expenses. If you own your Shares through a broker or other nominee and your broker or other nominee tenders your Shares on your behalf, your broker or other nominee may charge you a fee for doing so. You should consult your broker or other nominee to determine whether any charges will apply. See “Introduction” and Section 1 — “Terms of the Offer.”

Why are you making the Offer?

We are making the Offer because we and Parent want to acquire the entire equity interest in the Company. The Offer, as the first step in the acquisition of the Company, is intended to facilitate the acquisition of any and all issued and outstanding Shares. We are making the Offer pursuant to the Agreement and Plan of Merger, dated as of May 2, 2023 (as it may be amended from time to time, the “Merger Agreement”), by and among the Company, Parent and Purchaser. The Merger Agreement provides, among other things, that as soon as practicable following the consummation of the Offer, Purchaser will be merged with and into the Company (the “Merger”) in accordance with Section 251(h) of the General Corporation Law of the State of Delaware (as amended, the “DGCL”), with the Company continuing as the surviving corporation (the “surviving corporation”) in the Merger and thereby becoming an indirect, wholly owned subsidiary of Parent. Following the Merger, the Company will cease to be a publicly traded company. See “Introduction” and Section 12 — “Purpose of the Offer; Plans for the Company.”

Is there an agreement governing the Offer?

Yes. The Company, Parent and Purchaser have entered into the Merger Agreement, which provides, among other things, for the terms and conditions of the Offer and the Merger. See “Introduction” and Section 11 — “The Merger Agreement; Other Agreements.”

What does the Company Board think of the Offer?

The Company Board has unanimously (i) determined and declared that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are advisable and in the best interests of the Company and its stockholders, (ii) approved the execution, delivery and performance by the Company of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger, (iii) resolved to recommend that the Company’s stockholders accept the Offer and tender their shares to Purchaser pursuant to the Offer and (iv) agreed and authorized that the Merger be governed by Section 251(h) of the DGCL (such recommendation, the “Company Board Recommendation”).

See “Introduction,” Section 10 — “Background of the Offer; Past Contacts or Negotiations with the Company” and Section 11 — “The Merger Agreement; Other Agreements.” A more complete description of the

 

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reasons for the Company Board’s approval of the Offer and the Merger is set forth in the Company’s Solicitation/Recommendation Statement on Schedule 14D-9 (which, together with any exhibits and annexes attached thereto, we refer to as the “Schedule 14D-9”) that is being mailed to all the Company stockholders together with this Offer to Purchase.

What are the most significant conditions to the Offer?

The Offer is conditioned upon, among other things, the satisfaction or waiver (to the extent waiver is permitted under the Merger Agreement and applicable law) by Parent or Purchaser of the following conditions (except that the Minimum Condition, the Termination Condition, the HSR Condition and the Legal Restraint Condition (each as defined below) may not be waived):

 

•

the number of Shares validly tendered (and not validly withdrawn) prior to the Offer Expiration Time but excluding Shares tendered pursuant to guaranteed delivery procedures that have not yet been “received,” as such terms are defined by Section 251(h) of the DGCL, together with any Shares owned by Parent, Purchaser or any of their affiliates, represents at least one more Share than 50% of the total number of Shares outstanding as of the Offer Expiration Time (the “Minimum Condition”);

 

•

the absence, since the date of the Merger Agreement, of a Company Material Adverse Effect (as defined in the Merger Agreement) that is continuing;

 

•

the accuracy of the Company’s representations and warranties (subject to customary materiality qualifiers);

 

•

the Company’s performance and compliance in all material respects with all covenants, obligations and agreements required to be performed or complied with by it under the Merger Agreement at or prior to the Offer Expiration Time;

 

•

the receipt by Parent and Purchaser from the Company of a certificate signed by an executive officer of the Company certifying that certain conditions have been satisfied;

 

•

the expiration or termination of any waiting period (and any extension thereof) applicable to the consummation of the Offer and the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (such Act, the “HSR Act” and such condition, the “HSR Condition”);

 

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the absence of any federal, state, local, foreign or multinational law, rule or regulation or order, judgment or injunction, whether civil, criminal or administrative (whether temporary, preliminary or permanent), by any governmental authority of competent jurisdiction that prohibits, restricts, enjoins or otherwise makes illegal the consummation of the Offer or the Merger and is continuing in effect (the “Legal Restraint Condition”); and

 

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the Merger Agreement shall not have been terminated in accordance with its terms (the “Termination Condition”).

Except as described in Section 11 — “The Merger Agreement; Other Agreements,” if at the otherwise scheduled Offer Expiration Time, all of the Offer conditions have not been satisfied or waived by Parent or Purchaser (to the extent waiver is permitted under the Merger Agreement and applicable law), Purchaser will (and Parent will cause Purchaser to) extend the Offer on one or more occasions in consecutive increments of up to ten business days (or such longer or shorter period as may be agreed by the Company, Purchaser and Parent).

Subject to the applicable rules and regulations of the SEC and the terms of the Merger Agreement, any of the conditions to the Offer may be waived by Parent and Purchaser in whole or in part, at any time and from time to time, in their sole discretion, except that Parent and Purchaser are not permitted to waive the Minimum Condition, the HSR Condition, the Legal Restraint Condition or the Termination Condition. See Section 1 — “Terms of the Offer,” Section 11 — “The Merger Agreement; Other Agreements — Terms and Conditions of the Offer” and Section 15 — “Conditions of the Offer.”

 

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Is the Offer subject to any financing condition?

No. There is no financing condition to the Offer. See “Introduction,” Section 1 — “Terms of the Offer” and Section 9 — “Source and Amount of Funds.”

Do you have the financial resources to pay for all of the Shares that you are offering to purchase in the Offer?

Yes. We estimate that the maximum amount of funds needed to (i) complete the Offer, the Merger and the transactions contemplated by the Merger Agreement, including the funds needed to purchase all Shares tendered in the Offer and to pay the Company stockholders whose Shares are converted into the right to receive a cash amount equal to the Offer Price in the Merger, (ii) pay for fees and expenses incurred by Parent (and, to the extent unpaid as of the effective time, the Company) related to the Offer and the Merger, (iii) pay for the amounts in respect of outstanding Company equity awards and (iv) repay certain existing indebtedness of the Company and its subsidiaries will be approximately $760 million.

Parent has and will have available to it, through a variety of sources, including cash on hand and sources of immediately available credit, funds necessary to satisfy all of Purchaser’s payment obligations under the Merger Agreement. Neither the consummation of the Offer nor the consummation of the Merger is conditioned upon Parent’s or Purchaser’s receipt of any financing.

Is your financial condition relevant to my decision to tender in the Offer?

No, we do not think that the financial condition of Purchaser, Parent or their respective affiliates is relevant to your decision whether to tender Shares and accept the Offer because:

 

•

the Offer is being made for any and all issued and outstanding Shares solely for cash;

 

•

the consummation of the Offer (or the Merger) is not subject to any financing condition;

 

•

we, through Parent, have and will have sufficient funds available to us to consummate the Offer and the Merger; and

 

•

if Purchaser consummates the Offer, Purchaser will acquire all remaining Shares for the same cash price in the Merger (i.e., the Offer Price).

See Section 9 — “Source and Amount of Funds.”

Can the Offer be extended and under what circumstances can or will the Offer be extended?

We have agreed in the Merger Agreement that Purchaser will (and Parent will cause Purchaser to) extend the Offer (i) for any minimum period required by any applicable rule, regulation, interpretation or position of the SEC or its staff or of the Nasdaq Global Select Market (“Nasdaq”) or its staff or as may be necessary to resolve any comments of the SEC or the staff of Nasdaq, as applicable to the Offer, the Schedule 14D-9 or the Offer documents; and (ii) if at the then-scheduled Offer Expiration Time, any of the Offer conditions has not been satisfied or waived by Parent or Purchaser (to the extent waiver is permitted under the Merger Agreement and applicable law), (x) extend the Offer on one or more occasions, in consecutive periods of up to ten business days each (or for such longer or shorter period as the Company, Purchaser and Parent may agree) or (y) if the then-scheduled Offer Expiration Time is ten or fewer business days before the Termination Date (as defined below), extend the Offer until 11:59 p.m., New York City time, on the day before the Termination Date (or such other date and time as the parties may agree); provided, however, that without the Company’s written consent, Purchaser shall not extend the Offer, and without Parent’s prior written consent, Purchaser shall not be required to extend the Offer, in each case, beyond the earlier of (1) November 2, 2023 (the “Termination Date”; provided, however, that if as of the Termination Date the HSR Condition and the Legal Restraint Condition (in the case of

 

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the Legal Restraint Condition, solely with respect to a law or order relating to antitrust laws) shall not have been satisfied or validly waived by Parent or Purchaser, to the extent waivable in accordance with the terms of the Merger Agreement and applicable law by Parent or Purchaser, then the Termination Date shall automatically be extended until 11:59 p.m., New York City time, on March 4, 2024, and all references to the Termination Date in the Merger Agreement will be as so extended), or (2) the valid termination of the Merger Agreement in accordance with its terms; provided, however, that, in the case of clause (1), if at the Termination Date or any time thereafter Parent is not then permitted to terminate the Merger Agreement pursuant to its terms, Purchaser shall be required to (and Parent shall cause Purchaser to) extend the Offer beyond the Termination Date.

See “Introduction,” Section 1 — “Terms of the Offer” and Section 11 — “The Merger Agreement; Other Agreements — The Merger Agreement — The Offer” for more details on our ability to extend the Offer.

How will I be notified if the Offer is extended?

If we extend the Offer, we will inform American Stock Transfer & Trust Company, LLC (the “Depositary”), of that fact and will make a public announcement of the extension not later than 9:00 a.m., New York City time, on the next business day after the day of the previously scheduled Offer Expiration Time. See Section 1 — “Terms of the Offer.”

Will there be a subsequent offering period?

No. Pursuant to Section 251(h) of the DGCL, we expect the Merger to occur as promptly as practicable following the consummation of the Offer without a subsequent offering period.

How long do I have to decide whether to tender in the Offer?

You will have until the Offer Expiration Time to decide whether to tender your Shares in the Offer, unless we extend the Offer pursuant to the terms of the Merger Agreement or the Offer is earlier terminated. If you cannot deliver everything required to make a valid tender to the Depositary prior to such time, you may be able to use a guaranteed delivery procedure, which is described in Section 3 — “Procedures for Tendering Shares.” Shares tendered pursuant to guaranteed delivery procedures but not yet “received” (as defined in Section 251(h) of the DGCL) will be excluded in calculating whether the Minimum Condition has been satisfied. You are encouraged to deliver your Shares and other required documents to make a valid tender by the Offer Expiration Time. Please give your broker, dealer, commercial bank, trust company or other nominee instructions in sufficient time to permit such nominee to tender your Shares by the Offer Expiration Time. See Section 2 — “Acceptance for Payment and Payment of Shares” and Section 3 — “Procedures for Tendering Shares.”

How do I tender my Shares?

If you hold your Shares directly as the registered owner, you can (i) tender your Shares in the Offer by delivering the certificates representing your Shares, together with a completed and signed Letter of Transmittal, with any required signature guarantees, and any other documents required by the Letter of Transmittal, to the Depositary or (ii) tender your Shares by following the procedure for book-entry transfer set forth in Section 3 of this Offer to Purchase, no later than the Offer Expiration Time. If you are the registered owner but your stock certificate is not available or you cannot deliver it to the Depositary before the Offer expires, you may have a limited amount of additional time by having a broker, a bank or other fiduciary that is an eligible institution guarantee that the missing items will be delivered to the Depositary within two Nasdaq trading days using the enclosed Notice of Guaranteed Delivery. For the tender to be valid, however, the Depositary must receive the missing items within that two trading-day period, and for the tender to be counted toward satisfaction of the Minimum Condition, the Shares must be “received” (as defined in Section 251(h) of the DGCL) by the Depositary prior to the Offer Expiration Time.

 

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If you hold your Shares in street name through a broker, dealer, commercial bank, trust company or other nominee, you must contact the institution that holds your Shares and give instructions that your Shares be tendered. You should contact the institution that holds your Shares for more details. See “Introduction” and Section 3 — “Procedures for Tendering Shares.”

Until what time may I withdraw previously tendered Shares?

Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Offer Expiration Time. Thereafter, tenders of Shares are irrevocable, except that, pursuant to Section 14(d)(5) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), they may also be withdrawn after Saturday, July 15, 2023, which is the 60th day after the date of the commencement of the Offer, unless such Shares have already been accepted for payment by Purchaser pursuant to the Offer and not validly withdrawn. If you tendered your Shares by giving instructions to a broker, dealer, commercial bank, trust company or other nominee, you must instruct that nominee to arrange for the withdrawal of your Shares. See “Introduction” and Section 4 — “Withdrawal Rights.”

How do I withdraw previously tendered Shares?

To withdraw any of your previously tendered Shares, you must deliver a written (or, with respect to Eligible Institutions (as defined below), a facsimile transmission) notice of withdrawal, with the required information to the Depositary while you still have the right to withdraw such Shares. If you tendered your Shares by giving instructions to a broker, dealer, commercial bank, trust company or other nominee, you must instruct that nominee to arrange for the withdrawal of your Shares. See “Introduction” and Section 4 — “Withdrawal Rights.”

If I tender my Shares, when and how will I get paid?

If the conditions to the Offer as set forth in Section 15 — “Conditions of the Offer” are satisfied or waived (to the extent waiver is permitted under the Merger Agreement and applicable law) and Purchaser accepts your Shares validly tendered in the Offer for payment, we will pay you an amount equal to the number of Shares you validly tendered in the Offer multiplied by $21.50 in cash, without interest, less any applicable withholding taxes, promptly (and in any event within two business days) following the Acceptance Time (as defined below). See Section 2 — “Acceptance for Payment and Payment of Shares.”

If I decide not to tender, how will the Offer affect my Shares?

If you decide not to tender your Shares pursuant to the Offer and the Merger occurs as described herein, you will receive as a result of the Merger the same amount of cash per Share as if you had tendered your Shares pursuant to the Offer, without interest and less any applicable withholding taxes.

Subject to certain conditions, if we purchase Shares in the Offer, we are obligated under the Merger Agreement to cause the Merger to occur.

Because the Merger will be governed by Section 251(h) of the DGCL, assuming the requirements of Section 251(h) of the DGCL are met, no stockholder vote by the stockholders of the Company will be required in connection with the consummation of the Merger. We do not expect there to be significant time between the consummation of the Offer and the consummation of the Merger. See Section 13 — “Certain Effects of the Offer.”

Will the Offer be followed by a Merger if all the Shares are not tendered?

If the Offer is consummated and Purchaser acquires a majority of the outstanding Shares, then, in accordance with the terms of the Merger Agreement, the Company will complete the Merger without a vote of the stockholders to adopt the Merger Agreement and will consummate the Merger pursuant to Section 251(h) of the DGCL. Pursuant to the Merger Agreement, if the Minimum Condition is not satisfied, Purchaser is not required to pay for and may delay the acceptance for payment of any Shares tendered.

 

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Pursuant to the Merger Agreement, as soon as practicable following the consummation of the Offer, and in any event on the same date as the Acceptance Time, Purchaser will be merged with and into the Company, with the Company continuing as the surviving corporation in the Merger and thereby becoming an indirect, wholly owned subsidiary of Parent. At the effective time of the Merger (the “effective time”), each Share issued and outstanding immediately prior to the effective time of the Merger (other than Shares that are (i) held by a holder who is entitled to demand appraisal and who has (or for which the “beneficial owner” (as defined in Section 262(a) of the DGCL) has) properly exercised appraisal rights with respect thereto in accordance with, and who has (and, to the extent applicable, for which the applicable beneficial owner has) complied with, Section 262 of the DGCL with respect to any such Shares held by such holder (the “Dissenting Company Shares”) or (ii) held by the Company as treasury stock or owned by Parent, Purchaser or any of Parent’s other subsidiaries (including Shares acquired pursuant to the Offer (the “Owned Company Shares”)) will be cancelled and automatically converted into the right to receive the Offer Price in cash (without interest and less any applicable withholding taxes), which we refer to as the “Merger Consideration.” Shares described in clauses (i) and (ii) above, which we refer to as “Excluded Shares,” will be cancelled at the effective time and will not be exchangeable for the Merger Consideration. Dissenting Company Shares will entitle their holders only to the rights granted to them under Section 262 of the DGCL. Following the Merger, the Company will cease to be a publicly traded company. See “Introduction” and Section 11 — “The Merger Agreement; Other Agreements.”

Upon the successful consummation of the Offer, will the Company continue as a public company?

If the Offer is consummated, the Merger will be completed promptly after, and in any event on the same date as, the Acceptance Time, subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement. As a result, the Shares will no longer meet the requirements for continued listing on Nasdaq because the only stockholder will be Parent. Parent intends to cause the Company to delist the Shares from Nasdaq as promptly as practicable after the effective time. In addition, Parent intends and will cause the Company to terminate the registration of the Shares under the Exchange Act as soon as practicable after consummation of the Merger and the requirements for termination of registration are met. See Section 12 — “Purpose of the Offer; Plans for the Company” and Section 13 — “Certain Effects of the Offer.”

Are appraisal rights available in either the Offer or the Merger?

No appraisal rights will be available to you in connection with the Offer. However, if we accept Shares in the Offer and the Merger is completed, stockholders or beneficial owners who have demanded appraisal of such person’s Shares will be entitled to appraisal rights in connection with the Merger with respect to Shares not tendered in the Offer if such stockholders or beneficial owners properly perfect their right to seek appraisal under the DGCL. See Section 16 — “Certain Legal Matters; Regulatory Approvals — Dissenters’ Rights.”

What is the market value of my Shares as of a recent date?

The Offer Price of $21.50 per Share represents a premium of approximately 34% to the unaffected closing price of the Company’s stock on May 2, 2023, the last full trading day prior to the public announcement of the execution of the Merger Agreement. On May 15, 2023, the last full trading day before Purchaser commenced the Offer, the closing price of the Shares reported on Nasdaq was $21.38 per Share. See Section 6 — “Price Range of Shares; Dividends.”

What will happen to my equity awards in the Offer?

The Offer is being made only for Shares and not for outstanding equity awards granted by the Company. Holders of outstanding equity awards granted by the Company under a Company equity award plan will receive payment for such equity awards following the effective time as provided in the Merger Agreement without participating in the Offer.

 

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Pursuant to the Merger Agreement, at the effective time, except as may otherwise be agreed in writing by the Company, Parent and the holder thereof, each (i) award of restricted stock of the Company (each, an “RSA”) outstanding as of immediately prior to the effective time, whether vested or unvested, will automatically, without any action on the part of Parent, Purchaser, the Company or the holder thereof, be fully vested, cancelled and converted into and will become the right to receive an amount in cash, without interest thereon (but subject to applicable withholding), equal to the product obtained by multiplying (A) the Merger Consideration by (B) the total number of Shares subject to such RSA; (ii) time-vested restricted stock unit of the Company (each, an “RSU”) outstanding as of immediately prior to the effective time, whether vested or unvested, will automatically, without any action on the part of Parent, Purchaser, the Company or the holder thereof, be fully vested, cancelled and converted into and will become the right to receive an amount in cash, without interest thereon (but subject to applicable withholding), equal to the product obtained by multiplying (A) the Merger Consideration by (B) the total number of Shares subject to such RSU; (iii) performance-based restricted stock unit of the Company and market stock unit of the Company (each, a “PSU”) outstanding as of immediately prior to the effective time, whether vested or unvested, will automatically, without any action on the part of Parent, Purchaser, the Company or the holder thereof, be fully vested, cancelled and converted into and will become the right to receive an amount in cash, without interest thereon (but subject to applicable withholding), equal to the product obtained by multiplying (A) the Merger Consideration by (B) the total number of Shares subject to such PSU, with the achievement of the performance-based vesting metrics applicable to each PSU based on achievement of the applicable performance metrics as specified in the applicable award agreement; and (iv) each deferred stock unit of the Company credited to a director’s stock deferral account pursuant to an election to defer a grant of restricted stock units (each, a “DSU”) outstanding as of immediately prior to the effective time, whether vested or unvested, will automatically, without any action on the part of Parent, Purchaser, the Company or the holder thereof, be fully vested, cancelled and converted into and will become the right to receive an amount in cash, without interest thereon (but subject to applicable withholding), equal to the product obtained by multiplying (A) the Merger Consideration by (B) the total number of DSUs credited to the holder’s account. See “Section 11 — “The Merger Agreement; Other Agreements.”

What are the United States federal income tax consequences of the Offer and the Merger?

In general, the receipt of cash by you in exchange for your Shares pursuant to the Offer or the Merger will be a taxable transaction for United States federal income tax purposes. If you are a United States Holder (as defined below) who receives cash for Shares pursuant to the Offer or pursuant to the Merger, you will recognize gain or loss, if any, equal to the difference between the amount of cash received and your adjusted tax basis in the Shares tendered or exchanged therefor. A non-United States Holder (as defined below) generally will not be subject to U.S. federal income tax with respect to Shares tendered for cash in the Offer or exchanged for cash pursuant to the Merger unless such non-United States Holder has certain connections to the United States.

You are urged to consult your tax advisor about the particular tax consequences to you of tendering your Shares in the Offer or exchanging your Shares in the Merger in light of your particular circumstances (including the application and effect of any federal, state, local or non-U.S. laws). See Section 5 — “Certain United States Federal Income Tax Consequences” for a discussion of certain United States federal income tax consequences of tendering Shares pursuant to the Offer or exchanging Shares in the Merger.

Who should I talk to if I have additional questions about the Offer?

You can call Okapi Partners LLC, the Information Agent, toll free, at (844) 202-6026. See the back cover of this Offer to Purchase.

 

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INTRODUCTION

To the Holders of Ruth’s Hospitality Group, Inc. Shares of Common Stock:

Ruby Acquisition Corporation (“Purchaser” or “we”), a Delaware corporation and an indirect, wholly owned subsidiary of Darden Restaurants, Inc., a Florida corporation (“Parent”), is offering to purchase, subject to certain conditions, including the satisfaction of the Minimum Condition, any and all of the issued and outstanding shares of common stock, par value $0.01 per share, of Ruth’s Hospitality Group, Inc., a Delaware corporation (the “Company” and such shares, the “Shares”), at a price of $21.50 per Share, without interest (the “Offer Price”), net to the seller in cash, upon the terms and subject to the conditions set forth in this Offer to Purchase (this “Offer to Purchase”) and in the related Letter of Transmittal (the “Letter of Transmittal” and which, together with this Offer to Purchase and other related materials, as each may be amended or supplemented from time to time, constitutes the “Offer”). The Offer and withdrawal rights will expire at one minute after 11:59 p.m., New York City time, on Tuesday, June 13, 2023 (the “Offer Expiration Time,” unless the Offer is extended, in which event the term “Offer Expiration Time” means the latest time and date on which the Offer, as so extended, expires), unless the Offer is earlier terminated. See Section 1 — “Terms of the Offer.”

Tendering stockholders who are record owners of their Shares and tender directly to American Stock Transfer & Trust Company, LLC, which is the depositary for the Offer (the “Depositary”), will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 5 of the Letter of Transmittal, stock transfer taxes with respect to the purchase of Shares by Purchaser pursuant to the Offer. Stockholders who hold their Shares through a broker or other nominee should consult such institution as to whether it charges any service fees. Parent or Purchaser will pay all charges and expenses of the Depositary and Okapi Partners LLC, which is the information agent for the Offer (the “Information Agent”), incurred in connection with the Offer. See Section 17 — “Fees and Expenses.”

The Offer is not subject to any financing condition. The Offer is conditioned upon, among other things, the satisfaction of the Minimum Condition and the HSR Condition. The “Minimum Condition” requires that the number of Shares validly tendered (and not validly withdrawn) prior to the Offer Expiration Time, together with any Shares owned by Parent, Purchaser or any of their affiliates, represents at least one more Share than 50% of the total number of Shares outstanding as of the Offer Expiration Time. The “HSR Condition” requires that any waiting period (including all extensions thereof) applicable to the consummation of the Offer and the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), will have expired or been terminated. The Offer is also subject to other conditions described in Section 15 — “Conditions of the Offer.” Subject to the terms of the Merger Agreement (as defined below), if at the otherwise scheduled Offer Expiration Time, all of the Offer conditions have not been satisfied or waived by Parent or Purchaser (to the extent waiver is permitted under the Merger Agreement and applicable law), Parent will cause Purchaser to and Purchaser will extend the Offer for one or more occasions in consecutive increments of up to ten business days each (or for such longer or shorter period as the Company, Purchaser and Parent may agree) in order to permit satisfaction of such Offer conditions.

Subject to the applicable rules and regulations of the SEC and the terms of the Merger Agreement, any of the conditions to the Offer may be waived by Parent and Purchaser in whole or in part, at any time and from time to time, in their sole discretion, except that Parent and Purchaser are not permitted to waive the Minimum Condition, the HSR Condition, the Legal Restraint Condition or the Termination Condition. See Section 1 — “Terms of the Offer” and Section 15 — “Conditions of the Offer.”

We are making the Offer pursuant to the Agreement and Plan of Merger, dated as of May 2, 2023 (as it may be amended from time to time, the “Merger Agreement”), by and among the Company, Parent and Purchaser. The Merger Agreement provides, among other things, that as soon as practicable following the consummation of the Offer, Purchaser will be merged with and into the Company (the “Merger”) under the General Corporation Law of the State of Delaware (the “DGCL”), with the Company continuing as the surviving corporation in the

 

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Merger and thereby becoming an indirect, wholly owned subsidiary of Parent. See “Introduction” and Section 1 — “Terms of the Offer.”

Section 251(h) of the DGCL provides that, subject to certain statutory requirements, if following consummation of a tender offer for a publicly listed Delaware corporation, the stock irrevocably accepted for purchase pursuant to such tender offer and “received” (as defined in Section 251(h) of the DGCL) by the depositary prior to the expiration of such tender offer, plus the stock otherwise owned by the consummating corporation or its affiliates, equals at least the percentage of the stock, and of each class or series thereof, of the target corporation that would otherwise be required to adopt a merger agreement under the DGCL and the target corporation’s certificate of incorporation, the corporation consummating such tender offer merges with or into such target corporation, and each outstanding share of each class or series of stock (other than “excluded stock” as defined in Section 251(h) of the DGCL) that is the subject of such tender offer and is not irrevocably accepted for purchase in the offer is to be converted in such merger into the right to receive the same amount and kind of consideration to be paid for shares of such class or series of stock irrevocably accepted for purchase in such tender offer, the consummating corporation may effect a merger without a vote of the stockholders of the target corporation. Accordingly, if the Offer is consummated and the number of Shares validly tendered in accordance with the terms of the Offer and not validly withdrawn prior to the Offer Expiration Time, together with any Shares owned by Purchaser or its affiliates, represents at least one more Share than 50% of the total number of Shares outstanding as of the Offer Expiration Time, the Company does not anticipate seeking the approval of its remaining public stockholders before effecting the Merger. Section 251(h) also requires that the merger agreement provide that such merger be effected promptly following the consummation of the tender offer. Therefore, the parties have agreed that, subject to the conditions specified in the Merger Agreement, the Merger will become effective promptly after (and on the same day as) the consummation of the Offer after the satisfaction or waiver of the conditions to the Merger set forth in the Merger Agreement, without a vote of the stockholders of the Company, in accordance with Section 251(h) of the DGCL. See Section 11 — “The Merger Agreement; Other Agreements.”

As a result of the Merger, each Share issued and outstanding immediately prior to the effective time (other than Shares that are (i) held by a holder who is entitled to demand appraisal and who has (or for which the “beneficial owner” (as defined in Section 262(a) of the DGCL) has) properly exercised appraisal rights with respect thereto in accordance with, and who has (and, to the extent applicable, for which the applicable beneficial owner has) complied with, Section 262 of the DGCL with respect to any such Shares held by such holder (the “Dissenting Company Shares”) or (ii) held by the Company as treasury stock or owned by Parent, Purchaser or any of Parent’s other subsidiaries (including Shares acquired pursuant to the Offer (the “Owned Company Shares”)) will be cancelled and automatically converted into the right to receive the Offer Price in cash (without interest and less any applicable withholding taxes), which we refer to as the “Merger Consideration.” Shares described in clauses (i) and (ii) above, which we refer to as “Excluded Shares,” will be cancelled at the effective time and will not be exchangeable for the Merger Consideration. Dissenting Company Shares will entitle their holders only to the rights granted to them under Section 262 of the DGCL. Following the Merger, the Company will cease to be a publicly traded company. See Section 11 — “The Merger Agreement; Other Agreements” and Section 12 — “Purpose of the Offer; Plans for the Company.”

The Company Board has unanimously (i) determined and declared that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are advisable and in the best interests of the Company and its stockholders, (ii) approved the execution, delivery and performance by the Company of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger, (iii) resolved to recommend that the Company’s stockholders accept the Offer and tender their shares to Purchaser pursuant to the Offer and (iv) agreed and authorized that the Merger be governed by Section 251(h) of the DGCL (such recommendation the “Company Board Recommendation”).

 

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A more complete description of the Company Board’s reasons for authorizing and approving the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, is set forth in the Solicitation/Recommendation Statement on Schedule 14D-9 that is being furnished by the Company to its stockholders in connection with the Offer together with this Offer to Purchase. The Company’s stockholders should carefully read the information set forth in the Schedule 14D-9, including the information set forth under the sub-headings “Background of the Offer and Merger” and “Reasons for Recommendation.” See Section 11 — “The Merger Agreement; Other Agreements — The Merger Agreement — Company Board Recommendation; Company Board Recommendation Change; Intervening Event Fiduciary Exception.”

The Company has informed Purchaser that 32,119,114 Shares were issued and outstanding as of May 15, 2023.

The Merger is subject to the satisfaction or waiver of certain conditions, including there being no court or other governmental authority of competent jurisdiction having enacted, issued, promulgated, enforced or entered (and continuing in effect) any federal, state, local, foreign or multinational law, rule or regulation or order, judgment or injunction, whether civil, criminal or administrative (whether temporary, preliminary or permanent) that prohibits, restricts, enjoins or otherwise makes illegal the consummation of the Offer or the Merger and is continuing in effect. In addition, Purchaser must have irrevocably accepted for payment all Shares validly tendered and not validly withdrawn pursuant to the Offer.

Pursuant to the Merger Agreement, as of the effective time, the directors of Purchaser as of immediately prior to the effective time will become the directors of the surviving corporation, and the officers of Purchaser as of immediately prior to the effective time will become the officers of the surviving corporation. See Section 11 — “The Merger Agreement; Other Agreements — The Merger Agreement — Structure of the Merger; Certificate of Incorporation; Bylaws; Directors and Officers.”

No appraisal rights are available in connection with the Offer. However, if we accept Shares in the Offer and the Merger is completed, stockholders and beneficial owners who have demanded appraisal of such person’s Shares may be entitled to appraisal rights in connection with the Merger if they do not tender Shares in the Offer and comply with the applicable procedures set forth in Section 262 of the DGCL. Such stockholders or beneficial owners will not be entitled to receive the Offer Price, but instead will be entitled to only those rights provided under Section 262 of the DGCL. Stockholders or beneficial owners must properly perfect their right to seek appraisal under the DGCL in connection with the Merger in order to exercise appraisal rights. See Section 16 — “Certain Legal Matters; Regulatory Approvals — Dissenters’ Rights.”

Certain United States federal income tax consequences of the tender of Shares in the Offer and the exchange of Shares pursuant to the Merger are described in Section 5 — “Certain United States Federal Income Tax Consequences.”

This Offer to Purchase, the Letter of Transmittal and other documents to which this Offer to Purchase refers contain important information that should be read carefully before any decision is made with respect to the Offer.

 

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THE TENDER OFFER

 

1.	Terms of the Offer.

The Offer and withdrawal rights will expire at one minute after 11:59 p.m., New York City time, on Tuesday, June 13, 2023, unless the Offer is extended or earlier terminated in accordance with the terms of the Merger Agreement.

Upon the terms and subject to the satisfaction, or to the extent permitted, waiver of the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), Purchaser will promptly after (in any event, no later than one business day immediately after) the Offer Expiration Time, irrevocably accept for payment all Shares validly tendered and not validly withdrawn prior to the Offer Expiration Time (as described under Section 4 — “Withdrawal Rights”), and will pay for such Shares promptly (and in any event within two business days) after the Acceptance Time (as defined below).

The date and time of Purchaser’s acceptance for payment of all Shares validly tendered and not validly withdrawn pursuant to the Offer is referred to as the “Acceptance Time.”

The Offer is not subject to any financing condition. The Offer is conditioned upon, among other things, the satisfaction of the Minimum Condition and the HSR Condition. The Offer is also subject to other conditions described in Section 15 — “Conditions of the Offer.” Subject to the applicable rules and regulations of the SEC and the terms and conditions of the Merger Agreement, any of the conditions to the Offer may be waived by Parent and Purchaser in whole or in part, at any time and from time to time, in their sole discretion, except that Parent and Purchaser are not permitted to waive the Minimum Condition, the HSR Condition, the Legal Restraint Condition or the Termination Condition. See Section 15 — “Conditions of the Offer.”

We expressly reserve the right, in our sole discretion, subject to the terms and conditions of the Merger Agreement and the applicable rules and regulations of the SEC, not to accept for payment any Shares if, at the Offer Expiration Time, any of the conditions to the Offer have not been satisfied. See Section 15 — “Conditions of the Offer.” Under certain circumstances, we may terminate the Merger Agreement and the Offer. See Section 11 — “The Merger Agreement; Other Agreements — Termination.”

Pursuant to the Merger Agreement, we may extend the Offer beyond its initial Offer Expiration Time. We have agreed in the Merger Agreement that Purchaser will, and Parent will cause Purchaser to, extend the Offer (i) for any minimum period required by any applicable rule, regulation, interpretation or position of the SEC or its staff or of the Nasdaq Global Select Market (“Nasdaq”) or its staff or as may be necessary to resolve any comments of the SEC or the staff of Nasdaq, as applicable to the Offer, the Schedule 14D-9 or the Offer documents; and (ii) if at the then-scheduled Offer Expiration Time, any of the Offer conditions has not been satisfied or waived by Parent or Purchaser (to the extent waiver is permitted under the Merger Agreement and applicable law), (x) extend the Offer on one or more occasions, in consecutive periods of up to ten business days each (or for such longer or shorter period as the Company, Purchaser and Parent may agree) or (y) if the then-scheduled Offer Expiration Time is ten or fewer business days before the Termination Date, extend the Offer until 11:59 p.m., New York City time, on the day before the Termination Date (or such other date and time as the parties may agree); provided, however, that without the Company’s written consent, Purchaser shall not extend the Offer, and without Parent’s prior written consent, Purchaser shall not be required to extend the Offer, in each case, beyond the earlier of (1) November 2, 2023 (the “Termination Date”; provided, however, that if as of the Termination Date the HSR Condition or the Legal Restraint Condition (as defined below) (in the case of the Legal Restraint Condition, solely with respect to a law or order relating to antitrust laws) shall not have been satisfied or validly waived by Parent or Purchaser, to the extent waivable in accordance with the terms of the Merger Agreement and applicable law by Parent or Purchaser, then the Termination Date shall automatically be extended until 11:59 p.m., New York City time, on March 4, 2024, and all references to the Termination Date in the Merger Agreement will be as so extended), or (2) the valid termination of the Merger Agreement in

 

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accordance with its terms; provided, however, that, in the case of clause (1), if at the Termination Date or any time thereafter Parent is not then permitted to terminate the Merger Agreement pursuant to its terms, Purchaser shall be required to (and Parent shall cause Purchaser to) extend the Offer beyond the Termination Date. See “Section 11 — “The Merger Agreement; Other Agreements — The Merger Agreement — The Offer” for more details on our ability to extend the Offer.

Pursuant to the Merger Agreement, Parent and Purchaser expressly reserve the right at any time to waive, in whole or in part, any Offer condition (other than the Minimum Condition, the HSR Condition, the Legal Restraint Condition and the Termination Condition), to increase the Offer Price or modify the terms of the Offer, in each case only in a manner not inconsistent with the Merger Agreement, except that Parent and Purchaser are not permitted (without the prior written consent of the Company) to (i) reduce the number of Shares subject to the Offer, (ii) reduce the Offer Price, (iii) directly or indirectly amend, modify, supplement or waive the Minimum Condition or the Termination Condition, (iv) directly or indirectly amend, modify or supplement any Offer condition, (v) directly or indirectly amend, modify or supplement any other term of the Offer in any individual case in any manner that is adverse to the holders of Shares or that would, individually or in the aggregate, reasonably be expected to prevent or materially delay the consummation of the Offer or the Merger or impair the ability of Parent, Purchaser or the Company to consummate the Offer or the Merger, (vi) terminate the Offer or accelerate, extend or otherwise change the Offer Expiration Time (except as expressly required or permitted by the Merger Agreement), (vii) change the form of consideration payable in the Offer or (viii) provide for any “subsequent offering period” (or any extension thereof) within the meaning of Rule 14d-11 promulgated under the Exchange Act. The Offer may not be terminated prior to its scheduled Offer Expiration Time (as extended and re-extended in accordance with the Merger Agreement), unless the Merger Agreement is terminated in accordance with the terms thereof.

If, subject to the terms of the Merger Agreement, we make a material change in the terms of the Offer or the information concerning the Offer or if we waive a material condition of the Offer, we will disseminate additional tender offer materials and extend the Offer if and to the extent required by Rules 14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which the Offer must remain open following material changes in the terms of the Offer or information concerning the Offer, other than a change in price or a change in percentage of securities sought, will depend upon the facts and circumstances, including the relative materiality of the terms or information changes. In the SEC’s view, an offer to purchase should remain open for a minimum of five business days from the date the material change is first published, sent or given to stockholders, and with respect to a change in price or a change in percentage of securities sought, a minimum ten business day period generally is required to allow for adequate dissemination to stockholders and investor response. Accordingly, if, prior to the Offer Expiration Time, Purchaser decreases the number of Shares being sought or changes the Offer Price, and if the Offer is scheduled to expire at any time earlier than the tenth business day from the date that notice of such increase or decrease is first published, sent or given to stockholders, the Offer will be extended at least until the expiration of such tenth business day.

If, at or before the Offer Expiration Time, we increase the consideration being paid for Shares accepted for payment in the Offer, such increased consideration will be paid to all stockholders whose Shares are purchased in the Offer, whether or not such Shares were tendered before the announcement of the increase in consideration.

If we extend the Offer, are delayed in our acceptance for payment of or payment (whether before or after our acceptance for payment for Shares) for Shares or are unable to accept Shares for payment pursuant to the Offer for any reason, then, without prejudice to our rights under the Offer, the Depositary may retain tendered Shares on our behalf, and such Shares may not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights as described under Section 4 — “Withdrawal Rights” or the Offer is withdrawn or terminated or the Merger Agreement is terminated pursuant to its terms. However, our ability to delay the payment for Shares that we have accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires us to promptly pay the consideration offered or return the securities deposited by or on behalf of stockholders promptly after the termination or withdrawal of the Offer.

 

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Any extension, delay, termination, waiver or amendment of the Offer will be followed as promptly as practicable by public announcement thereof, such announcement in the case of an extension to be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Offer Expiration Time. Subject to applicable law (including Rules 14d-4(d), 14d-6(c) and 14e-1 under the Exchange Act, which require that material changes be promptly disseminated to stockholders in a manner reasonably designed to inform them of such changes) and without limiting the manner in which Purchaser may choose to make any public announcement, Purchaser will have no obligation to publish, advertise or otherwise communicate any such public announcement other than by issuing a press release to a national news service. As used in this Offer to Purchase, “business day” means any day other than Saturday or Sunday or a day on which commercial banks are authorized or required by law to be closed in New York, New York.

Under no circumstances will interest be paid on the Offer Price for the Shares, regardless of any extension of the Offer or any delay in making payment for the Shares.

As soon as practicable following the consummation of the Offer and subject to the satisfaction or waiver (to the extent waiver is permitted under the Merger Agreement and applicable law) of certain conditions as described under Section 15 — “Conditions of the Offer,” Purchaser will complete the Merger without a vote of the stockholders of the Company to adopt the Merger Agreement and consummate the Merger in accordance with Section 251(h) of the DGCL.

The Company has provided Purchaser with the Company’s stockholder list and security position listings for the purpose of disseminating the Offer to Purchase, Letter of Transmittal and other Offer related materials to holders of Shares. This Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of Shares whose names appear on the Company’s stockholder list and will be furnished, for subsequent transmittal to beneficial owners of Shares, to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing.

 

2.	Acceptance for Payment and Payment for Shares.

Subject to the satisfaction or waiver (to the extent waiver is permitted under the Merger Agreement and applicable law) of all the conditions to the Offer set forth in Section 15 — “Conditions of the Offer,” we will, promptly after (in any event, no later than one business day immediately after) the Offer Expiration Time, irrevocably accept for payment all Shares tendered (and not validly withdrawn) pursuant to the Offer and, promptly after the Acceptance Time (and in any event within two business days), pay for such Shares.

In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (i) certificates representing such Shares or confirmation of the book-entry transfer of such Shares into the Depositary’s account at The Depository Trust Company (“DTC”) pursuant to the procedures set forth in Section 3 — “Procedures for Tendering Shares,” (ii) a Letter of Transmittal, duly completed and validly executed in accordance with the instructions thereto, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message (as defined below) in lieu of the Letter of Transmittal), and (iii) any other documents required by the Letter of Transmittal or any other customary documents required by the Depositary. See Section 3 — “Procedures for Tendering Shares.”

For purposes of the Offer, if and when Purchaser gives oral or written notice to the Depositary of its acceptance for payment of such Shares pursuant to the Offer, then Purchaser has accepted for payment and thereby purchased Shares validly tendered and not validly withdrawn pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for the tendering stockholders for purposes of receiving payments from us and transmitting such payments to the tendering stockholders. Under no circumstances will interest be paid on the Offer Price for Shares, regardless of any extension of the Offer or any delay in payment for Shares.

 

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If any tendered Shares are not accepted for payment pursuant to the terms and conditions of the Offer for any reason, or if certificates are submitted for more Shares than are tendered, certificates for such unpurchased Shares will be returned (or new certificates for the Shares not tendered will be sent), without expense to the tendering stockholder (or, in the case of Shares tendered by book-entry transfer into the Depositary’s account at DTC pursuant to the procedures set forth in Section 3 — “Procedures for Tendering Shares,” such Shares will be credited to an account maintained with DTC) promptly following the expiration or termination of the Offer.

 

3.	Procedures for Tendering Shares.

Valid Tender of Shares

Except as set forth below, to validly tender Shares pursuant to the Offer, a properly completed and duly executed Letter of Transmittal in accordance with the instructions set forth in the Letter of Transmittal, with any required signature guarantees, or an Agent’s Message in connection with a book-entry delivery of Shares, and any other documents required by the Letter of Transmittal and any other customary documents required by the Depositary, must be received by the Depositary at its address set forth on the back cover of this Offer to Purchase prior to the Offer Expiration Time and either (a) certificates representing Shares tendered must be delivered to the Depositary or (b) such Shares must be properly delivered pursuant to the procedures for book-entry transfer described below and a confirmation of such delivery received by the Depositary (which confirmation must include an Agent’s Message if the tendering stockholder has not delivered a Letter of Transmittal), in each case, prior to the Offer Expiration Time. The term “Agent’s Message” means a message, transmitted by DTC to, and received by, the Depositary and forming a part of a Book-Entry Confirmation (as defined below), which states that DTC has received an express acknowledgment from the participant in DTC tendering the Shares which are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that Purchaser may enforce such agreement against the participant.

Book-Entry Transfer

The Depositary will take steps to establish and maintain an account with respect to the Shares at DTC for purposes of the Offer. Any financial institution that is a participant in DTC’s systems may make a book-entry transfer of Shares by causing DTC to transfer such Shares into the Depositary’s account in accordance with DTC’s procedures for such transfer. However, although delivery of Shares may be effected through book-entry transfer, either the Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees, or an Agent’s Message in lieu of the Letter of Transmittal, and any other required documents must, in any case, be transmitted to and received by the Depositary at its address set forth on the back cover of this Offer to Purchase prior to the Offer Expiration Time. The confirmation of a book-entry transfer of Shares into the Depositary’s account at DTC as described above is referred to herein as a “Book-Entry Confirmation.”

Delivery of documents to DTC in accordance with DTC’s procedures does not constitute delivery to the Depositary.

Guaranteed Delivery

If you wish to tender Shares pursuant to the Offer and cannot deliver such Shares and all other required documents to the Depositary by the Offer Expiration Time or cannot complete the procedure for delivery by book-entry transfer on a timely basis, you may nevertheless tender such Shares if all of the following conditions are met:

 

•

such tender is made by or through an Eligible Institution (as defined below);

 

•

a properly completed and duly executed Notice of Guaranteed Delivery in the form provided by us with this Offer to Purchase is received by the Depositary (as provided below) by the Offer Expiration Time; and

 

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•

the Certificates for all such validly tendered Shares (or a confirmation of a book-entry transfer of such Shares into the Depositary’s account at DTC), together with a properly completed and duly executed Letter of Transmittal (or an Agent’s Message) and any other required documents, are received by the Depositary within two Nasdaq trading days after the date of execution of the Notice of Guaranteed Delivery.

The Notice of Guaranteed Delivery may be transmitted by overnight courier or mail to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the Notice of Guaranteed Delivery. Shares tendered by a Notice of Guaranteed Delivery will not be deemed validly tendered for purposes of satisfying the Minimum Condition unless Shares underlying such Notice of Guaranteed Delivery are “received” (as defined in Section 251(h) of the DGCL) by the Depositary prior to the Offer Expiration Time.

Signature Guarantees and Stock Powers

Except as otherwise provided below, all signatures on a Letter of Transmittal must be guaranteed by a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a member in good standing of a recognized Medallion Program approved by the Securities Transfer Association, Inc., including the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Program and the Stock Exchanges Medallion Program (each, an “Eligible Institution”). Signatures on a Letter of Transmittal need not be guaranteed (i) if the Letter of Transmittal is signed by the registered owner(s) (which term, for purposes of this section, includes any participant in any of DTC’s systems whose name appears on a security position listing as the owner) of Shares tendered therewith and such registered owner has not completed the box entitled “Special Payment Instructions” or the box entitled “Special Delivery Instructions” on the Letter of Transmittal or (ii) if such Shares are tendered for the account of an Eligible Institution. See Instructions 1, 5 and 6 of the Letter of Transmittal. If the certificates for Shares are registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made or certificates for Shares not tendered or not accepted for payment are to be returned to a person other than the registered owner of the certificates surrendered, then the tendered certificates must be registered or accompanied by appropriate stock powers, in either case, signed exactly as the name or names of the registered owner(s) or holder(s) appear on the certificates, with the signatures on the certificates or stock powers guaranteed as described above. See Instructions 1, 5 and 6 of the Letter of Transmittal.

If certificates representing Shares are forwarded separately to the Depositary, a properly completed and duly executed Letter of Transmittal must accompany each delivery of certificates.

THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC, IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER. DELIVERY OF ALL SUCH DOCUMENTS WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION). IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT BY PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

Other Requirements

Notwithstanding any provision of the Merger Agreement to the contrary, Purchaser will pay for Shares tendered (and not validly withdrawn) pursuant to the Offer only after timely receipt by the Depositary of (i) certificates for (or a timely Book-Entry Confirmation with respect to) such Shares, (ii) a Letter of Transmittal, properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message in lieu of the Letter of Transmittal), and (iii) any other documents required by the

 

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Letter of Transmittal or any other customary documents required by the Depositary. Accordingly, tendering stockholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares are actually received by the Depositary. Under no circumstances will Purchaser pay interest on the purchase price of Shares, regardless of any extension of the Offer or any delay in making such payment. If your Shares are held in street name (i.e., through a broker, dealer, commercial bank, trust company or other nominee), your Shares can be tendered by your nominee by book-entry transfer through DTC.

Binding Agreement

Purchaser’s acceptance for payment of Shares tendered pursuant to one of the procedures described above will constitute a binding agreement between the tendering stockholder and Purchaser upon the terms and subject to the conditions of the Offer.

Appointment as Proxy

By executing and delivering a Letter of Transmittal as set forth above (or, in the case of a book-entry transfer, by delivery of an Agent’s Message in lieu of a Letter of Transmittal), the tendering stockholder irrevocably appoints Purchaser’s designees as such stockholder’s proxies, each with full power of substitution, to the full extent of such stockholder’s rights with respect to the Shares tendered by such stockholder and accepted for payment by Purchaser and with respect to any and all other Shares or other securities issued or issuable in respect of such Shares on or after the date of the Merger Agreement. All such proxies and powers of attorney will be considered coupled with an interest in the tendered Shares. Such appointment is effective when, and only to the extent that, Purchaser accepts for payment Shares tendered by such stockholder as provided herein. Upon the effectiveness of such appointment, all prior powers of attorney, proxies and consents given by such stockholder will be revoked, and no subsequent powers of attorney, proxies and consents may be given (and, if given, will not be deemed effective). Our designees will, with respect to the Shares or other securities and rights for which the appointment is effective, be empowered to exercise all voting and other rights of such stockholder as they, in their sole discretion, may deem proper at any annual, special, adjourned or postponed meeting of the stockholders of the Company, by written consent in lieu of any such meeting or otherwise. Purchaser reserves the right to require that, in order for Shares to be deemed validly tendered, immediately upon Purchaser’s payment for such Shares, Purchaser must be able to exercise full voting, consent and other rights to the extent permitted under applicable law with respect to such Shares and other securities, including voting at any meeting of stockholders or executing a written consent concerning any matter.

Determination of Validity

All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by Purchaser in its sole and absolute discretion, which determination will be final and binding, subject to the rights of the tendering holders of Shares to challenge Purchaser’s determination in a court of competent jurisdiction. Purchaser reserves the absolute right to reject any and all tenders determined by Purchaser not to be in proper form or the acceptance for payment of or payment for which may, in Purchaser’s opinion, be unlawful. Purchaser also reserves the absolute right to waive any defect or irregularity in the tender of any Shares of any particular stockholder whether or not similar defects or irregularities are waived in the case of any other stockholder. No tender of Shares will be deemed to have been validly made until all defects and irregularities relating thereto have been cured or waived. None of Parent, Purchaser or any of their respective affiliates or assigns, the Depositary, the Information Agent, or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Purchaser’s interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto and any other documents related to the Offer) will be final and binding, subject to the rights of the tendering holders of Shares to challenge Purchaser’s determination in a court of competent jurisdiction.

 

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Information Reporting and Backup Withholding

Payments made to stockholders of the Company in the Offer or the Merger generally will be subject to information reporting and may be subject to backup withholding. To avoid backup withholding, U.S. stockholders that do not otherwise establish an exemption should complete and return the U.S. Internal Revenue Service (the “IRS”) Form W-9 included in the Letter of Transmittal, certifying that (i) such stockholder is a United States person, (ii) the taxpayer identification number provided by such stockholder is correct and (iii) such stockholder is not subject to backup withholding. Foreign stockholders should submit a properly completed and signed appropriate IRS Form W-8, a copy of which may be obtained from the Depositary or the IRS website at www.irs.gov, to avoid backup withholding. Such stockholders are urged to consult their own tax advisors to determine which Form W-8 is appropriate.

Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against a stockholder’s United States federal income tax liability, provided the required information is timely furnished in the appropriate manner to the IRS.

 

4.	Withdrawal Rights.

Except as otherwise provided in this Section 4, or as provided by applicable law, tenders of Shares made pursuant to the Offer are irrevocable. Shares tendered pursuant to the Offer may be withdrawn at any time prior to one minute after 11:59 p.m., New York City time, on Tuesday, June 13, 2023, unless the Offer is extended, in which case you can withdraw your Shares at any time prior to the then extended date. You can also withdraw your Shares at any time after Saturday, July 15, 2023, which is the 60th day after the date of commencement of the Offer, unless such Shares have already been accepted for payment by Purchaser pursuant to the Offer and not validly withdrawn.

For a withdrawal of Shares to be effective, a written (or, with respect to Eligible Institutions, a facsimile transmission) notice of withdrawal must be timely received by the Depositary at the address set forth on the back cover page of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of such Shares, if different from that of the person who tendered such Shares. If certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfer as set forth in Section 3 — “Procedures for Tendering Shares,” any notice of withdrawal must also specify the name and number of the account at DTC to be credited with the withdrawn Shares.

Withdrawals of Shares may not be rescinded. Any Shares validly withdrawn will thereafter be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be re-tendered by again following one of the procedures described in Section 3 — “Procedures for Tendering Shares” at any time prior to the Offer Expiration Time.

We will determine, in our sole discretion, all questions as to the form and validity (including time of receipt) of any notice of withdrawal and our determination will be final and binding. None of Parent, Purchaser, the Depositary, the Information Agent or any other person will be under any duty to give notice of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification.

 

5.	Certain United States Federal Income Tax Consequences.

The following is a summary of certain United States federal income tax consequences to beneficial owners of Shares upon the tender of Shares for cash pursuant to the Offer and the exchange of Shares for cash pursuant

 

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to the Merger. This summary is general in nature and does not discuss all aspects of United States federal income taxation that may be relevant to a holder of Shares in light of its particular circumstances. In addition, this summary does not describe any tax consequences arising under the laws of any state, local or non-U.S. jurisdiction, does not consider the tax on “net investment income” under Section 1411 of the United States Internal Revenue Code of 1986, as amended (the “Code”) or the alternative minimum tax provisions of the Code, and does not consider any aspects of United States federal tax law other than income taxation. This summary deals only with Shares held as capital assets within the meaning of Section 1221 of the Code (generally, property held for investment), and does not address tax considerations applicable to any owner of Shares that may be subject to special treatment under the United States federal income tax laws, including:

 

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a bank or other financial institution;

 

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a tax-exempt organization;

 

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a retirement plan or other tax-deferred account;

 

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a partnership, an S corporation or other pass-through entity for United States federal income tax purposes (or an investor in a partnership, S corporation or other pass-through entity for United States federal income tax purposes);

 

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an insurance company;

 

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a mutual fund;

 

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a real estate investment trust;

 

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a dealer or broker in stocks and securities;

 

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a trader in securities that elects to apply a mark-to-market method of tax accounting;

 

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a holder of Shares that received the Shares through the exercise of an employee stock option, through a tax qualified retirement plan or otherwise as compensation;

 

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a person that has a functional currency other than the United States dollar;

 

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a person that holds the Shares as part of a straddle, constructive sale, conversion or other integrated transaction;

 

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a person subject to special tax accounting rules (including rules requiring recognition of gross income based on a taxpayer’s applicable financial statement);

 

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dissenting stockholders;

 

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a United States expatriate, including former citizens or residents of the United States;

 

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controlled foreign corporations;

 

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passive foreign investment companies;

 

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corporations that accumulate earnings to avoid United States federal income tax;

 

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holders that own an equity interest in Parent following the Merger; or

 

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a person that holds or has held, directly or pursuant to attribution rules, more than 5 percent of the Shares at any time during the five-year period ending on the date of the consummation of the Offer or the Merger, as applicable.

If a partnership (including any entity or arrangement treated as a partnership) for United States federal income tax purposes holds Shares, the tax treatment of an owner that is a partner (including any owner of an interest in an entity or arrangement treated as a partnership for United States federal income tax purposes) in the partnership generally will depend upon the status of the partner and the activities of the partner and the partnership. Such owners are urged to consult their own tax advisors regarding the tax consequences of tendering the Shares in the Offer or exchanging their Shares pursuant to the Merger.

 

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This summary is based on the Code, the U.S. Department of Treasury regulations promulgated under the Code (the “Treasury Regulations”), and rulings and judicial decisions, all as in effect as of the date of this Offer to Purchase, and all of which are subject to change or differing interpretations at any time, with possible retroactive effect. We have not sought, and do not intend to seek, any ruling from the IRS with respect to the statements made and the conclusions reached in the following summary, and no assurance can be given that the IRS will agree with the views expressed herein, or that a court will not sustain any challenge by the IRS in the event of litigation.

The discussion set out in this Offer to Purchase is intended only as a summary of the material United States federal income tax consequences to an owner of Shares. We urge you to consult your own tax advisor with respect to the specific tax consequences to you in connection with the Offer and the Merger in light of your own particular circumstances, including federal estate, gift and other non-income tax consequences, and tax consequences under state, local or non-U.S. tax laws.

United States Holders

For purposes of this discussion, the term “United States Holder” means a beneficial owner of Shares that is, for United States federal income tax purposes:

 

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an individual who is a citizen or resident of the United States;

 

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a corporation (or any other entity or arrangement treated as a corporation for United States federal income tax purposes) organized in or under the laws of the United States or any state thereof or the District of Columbia;

 

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an estate or trust the income of which is subject to United States federal income taxation regardless of its source; or

 

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a trust that (1) is subject to the primary supervision of a U.S. court and the control of one or more “United States persons” (within the meaning of Section 7701(a)(30) of the Code), or (2) has a valid election in effect to be treated as a United States person for U.S. federal income tax purposes.

Payments with Respect to Shares

The tender of Shares in the Offer for cash or the exchange of Shares pursuant to the Merger for cash will be a taxable transaction for United States federal income tax purposes, and a United States Holder who receives cash for Shares pursuant to the Offer or pursuant to the Merger will recognize gain or loss, if any, equal to the difference between the amount of cash received and the holder’s adjusted tax basis in the Shares tendered or exchanged therefor. Gain or loss will be determined separately for each block of Shares (i.e., Shares acquired at the same cost in a single transaction). Such gain or loss will be capital gain or loss, and will be long-term capital gain or loss if such United States Holder’s holding period for the Shares is more than one year at the time of the exchange. Long-term capital gain recognized by a non-corporate United States Holder generally is subject to tax at a lower rate than short-term capital gain or ordinary income. The deductibility of capital losses is subject to limitations.

Backup Withholding Tax

Proceeds from the tender of Shares in the Offer or the exchange of Shares pursuant to the Merger generally will be subject to backup withholding tax at the applicable rate (currently 24%) unless the applicable United States Holder or other payee provides a valid taxpayer identification number and complies with certain certification procedures (generally, by providing a properly completed IRS Form W-9) or otherwise establishes an exemption from backup withholding tax. Any amounts withheld under the backup withholding tax rules from a payment to a United States Holder will be allowed as a credit against the United States Holder’s United States federal income tax liability and may entitle the United States Holder to a refund, provided that the required

 

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information is timely furnished to the IRS. Each United States Holder should complete and sign the IRS Form W-9, which will be included with the Letter of Transmittal to be returned to the Depositary, to provide the information and certification necessary to avoid backup withholding, unless an exemption applies and is established in a manner satisfactory to the Depositary.

Non-United States Holders

The following is a summary of the material United States federal income tax consequences that will apply to a non-United States Holder of Shares. The term “non-United States Holder” means a beneficial owner of Shares that is neither a United States Holder nor a partnership for United States federal income tax purposes (including any entity or arrangement treated as a partnership for United States federal income tax purposes).

Payments with Respect to Shares

Payments made to a non-United States Holder with respect to Shares tendered for cash in the Offer or exchanged for cash pursuant to the Merger generally will be exempt from United States federal income tax, with the following exceptions:

 

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If the non-United States Holder is an individual who was present in the United States for 183 days or more in the taxable year of the exchange and certain other conditions are met, such non-United States Holder will be subject to tax at a flat rate of 30% (or such lower rate as may be specified under an applicable income tax treaty) on any gain from the exchange of the Shares, net of applicable United States-source losses from sales or exchanges of other capital assets recognized by the holder during the year.

 

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If the gain is “effectively connected” with the non-United States Holder’s conduct of a trade or business in the United States (and, if required by an applicable income tax treaty, is attributable to a United States permanent establishment of the non-United States Holder), the non-United States Holder will generally be subject to tax on the net gain derived from the sale as if it were a United States Holder. In addition, if such non-United States Holder is a non-U.S. corporation for United States federal income tax purposes, it may be subject to an additional “branch profits tax” at a 30% rate (or at a lower rate if such non-United States Holder is eligible for the benefits of an income tax treaty that provides for a lower rate).

 

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If the Shares constitute a United States real property interest (“USRPI”) by reason of the Company’s status as a United States real property holding corporation (“USRPHC”) for U.S. federal income tax purposes and one or more other conditions are satisfied, the non-United States Holder may be subject to tax on any gain from the exchange of the Shares under the Foreign Investment in Real Property Tax Act (FIRPTA) regime. We believe that the Company is not currently, has not been during the preceding five years and prior to or at the time of the Merger does not expect to become, a USRPHC. Because the determination of whether the Company is a USRPHC depends on the fair market value of the Company’s USRPIs relative to the fair market value of the Company’s non-USRPIs and other business assets, there can be no assurance that the Company is not or will not become a USRPHC. A non-United States holder should consult its own tax advisor about the consequences that could result if the Company is or were to become a USRPHC.

Backup Withholding Tax

A non-United States Holder may be subject to backup withholding tax with respect to the proceeds from the disposition of Shares pursuant to the Offer or pursuant to the Merger unless, generally, the non-United States Holder certifies under penalties of perjury on an appropriate IRS Form W-8 that such non-United States Holder is not a United States person, or the non-United States Holder otherwise establishes an exemption in a manner satisfactory to the Depositary.

 

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Any amounts withheld under the backup withholding tax rules will be allowed as a refund or a credit against the non-United States Holder’s United States federal income tax liability, provided the required information is timely furnished to the IRS. Each non-United States Holder should complete and sign the appropriate IRS Form W-8, which will be requested in the Letter of Transmittal to be returned to the Depositary, to provide the information and certification necessary to avoid backup withholding, unless an exemption applies and is established in a manner satisfactory to the Depositary.

The foregoing summary does not discuss all aspects of United States federal income taxation that may be relevant to particular holders of Shares. You are urged to consult your own tax advisor about the particular tax consequences to you of tendering your Shares in the Offer or exchanging your Shares pursuant to the Merger under any federal, state, local, non-U.S. or other laws.

 

6.	Price Range of Shares; Dividends.

The Shares trade on Nasdaq under the symbol “RUTH.” The Company has advised us that, as of May 15, 2023, 32,119,114 Shares were issued and outstanding. The following table sets forth the high and low intraday sale prices per Share for each fiscal quarter of the Company indicated below, as reported on Nasdaq:

 

		High				Low
2023
Second Quarter (through May 15, 2023)		$	21.50			$	15.25
First Quarter		$	19.99			$	15.04
2022
Fourth Quarter		$	21.13			$	14.65
Third Quarter		$	20.36			$	15.16
Second Quarter		$	23.28			$	15.95
First Quarter		$	24.93			$	17.97
2021
Fourth Quarter		$	22.32			$	16.45
Third Quarter		$	23.75			$	17.85
Second Quarter		$	28.73			$	22.01
First Quarter		$	26.87			$	15.95

The Offer Price of $21.50 per Share represents a premium of approximately 34% to the unaffected closing price of the Company’s stock on May 2, 2023, which was the last full trading day prior to the public announcement of the execution of the Merger Agreement. On May 15, 2023, the last full trading day before Purchaser commenced the Offer, the closing price of the Shares reported on Nasdaq was $21.38 per Share. Stockholders are urged to obtain current market quotations for Shares before making a decision with respect to the Offer.

The Merger Agreement provides that from the date of the Merger Agreement until the effective time, except as required or contemplated by the Merger Agreement, required by law or order or with the written consent of Parent, the Company will not accept, declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any shares of its capital stock or other equity or voting interests other than with respect to dividends and distributions by a direct or indirect wholly owned subsidiary of the Company to its direct or indirect parent.

 

7.	Certain Information Concerning the Company.

Except as specifically set forth herein, the information concerning the Company contained in this Offer to Purchase has been taken from, or is based upon, information furnished by the Company or its representatives or upon publicly available documents and records on file with the SEC and other public sources. The summary

 

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information set forth below is qualified in its entirety by reference to the Company’s public filings with the SEC (which may be obtained and inspected as described below) and should be considered in conjunction with the more comprehensive financial and other information in such reports and other publicly available information. Neither Parent nor Purchaser has any knowledge that would indicate that any statements contained in this Offer to Purchase based on such filings and information is untrue. However, neither Parent nor Purchaser assumes any responsibility for the accuracy or completeness of the information concerning the Company, whether furnished by the Company or contained in such filings, or for any failure by the Company to disclose events that may have occurred or that may affect the significance or accuracy of any such information but which are unknown to Parent or Purchaser.

General. The following description of the Company and its business has been taken from the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2022, and is qualified in its entirety by reference to such Annual Report on Form 10-K.

The Company develops and operates fine dining restaurants under the trade name Ruth’s Chris Steak House. As of December 25, 2022, there were 154 Ruth’s Chris Steak House restaurants, including 77 Company-owned restaurants, three restaurants operating under contractual agreements and 74 franchisee-owned restaurants, including 23 international franchisee-owned restaurants in Aruba, Canada, China, Hong Kong, Indonesia, Japan, Mexico, Philippines, Singapore and Taiwan. All Company-owned restaurants are located in the United States.

The Company’s principal executive offices are located at 1030 W. Canton Avenue, Suite 100, Winter Park, Florida 32789. The telephone number of the Company at its principal executive offices is (407) 333-7440.

Available Information. The Shares are registered under the Exchange Act. Accordingly, the Company is subject to the information reporting requirements of the Exchange Act and is required to file periodic reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. Information as of particular dates concerning the Company’s directors and officers, their remuneration, stock options and other equity awards granted to them, the principal holders of the Company’s securities, any material interests of such persons in transactions with the Company and other matters is required to be disclosed in proxy statements. Such reports, proxy statements and other information are available on www.sec.gov.

The Company’s Financial Projections. The Company provided Parent with certain internal financial projections as described in the Schedule 14D-9, which will be filed by the Company with the SEC and is being mailed to the Company’s stockholders contemporaneously with this Offer to Purchase.

 

8.	Certain Information Concerning Parent, Purchaser and Certain Related Parties.

Purchaser. Ruby Acquisition Corporation, a Delaware corporation, is an indirect, wholly owned subsidiary of Parent and was formed solely for the purpose of facilitating the acquisition of the Company by Parent. To date, Purchaser has not carried on any activities other than those related to its formation, the Offer and the Merger. Upon consummation of the proposed Merger, Purchaser will merge with and into the Company and will cease to exist, with the Company continuing as the surviving corporation. The business address for Purchaser is: 1000 Darden Center Drive, Orlando, Florida 32837. The business telephone number for Purchaser is (407) 245-4000.

Parent. Darden Restaurants, Inc., a Florida corporation, owns and operates more than 1,850 full-service dining restaurants in the United States and Canada under the trade names Olive Garden^®, LongHorn Steakhouse^®, Cheddar’s Scratch Kitchen^®, Yard House^®, The Capital Grille^®, Seasons 52^®, Bahama Breeze^®, Eddie V’s Prime Seafood^® and The Capital Burger^®. As of February 26, 2023, through subsidiaries, Parent owned and operated all of its restaurants in the United States and Canada, except for two joint venture restaurants managed by Parent and 34 franchised restaurants. Parent also has 32 franchised restaurants in operation located in Latin America, the Caribbean, and Asia. The business address for Parent is: 1000 Darden Center Drive, Orlando, Florida 32837. The business telephone number for Parent is (407) 245-4000.

 

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Additional Information. The name, citizenship, business address, present principal occupation or employment and material occupations, positions, offices or employment for the past five years of each of the directors and executive officers of Parent and Purchaser are listed in Schedule I to this Offer to Purchase.

During the last five years, none of Parent or Purchaser, or to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase (i) has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (ii) was a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining such person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of such laws.

Except as provided in the Merger Agreement or as otherwise described in this Offer to Purchase, (i) none of Parent or Purchaser, or to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase or any associate or majority-owned subsidiary of Parent or Purchaser, or any of the persons so listed, beneficially owns or has any right to acquire, directly or indirectly, any Shares and (ii) none of Parent, Purchaser, or, to the best knowledge of Parent and Purchaser, any of the persons referred to in Schedule I hereto nor any director, executive officer or subsidiary of any of the foregoing, has effected any transaction in respect of any Shares during the past two years. Except as provided in the Merger Agreement or as otherwise described in this Offer to Purchase, none of Parent or Purchaser, or, to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase, has any material contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company (including, but not limited to, any material contract, arrangement, understanding or relationship concerning the transfer or the voting of any such securities, joint ventures, loan or option arrangements, puts or calls, guaranties of loans, guaranties against loss or the giving or withholding of proxies, consents or authorizations).

Except as set forth in this Offer to Purchase, none of Parent or Purchaser, or, to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I hereto, has had any business relationship or transaction with the Company or any of its executive officers, directors or affiliates that is required to be reported under the rules and regulations of the SEC applicable to the Offer.

Except as set forth in this Offer to Purchase, there have been no negotiations, transactions or material contracts between Parent or Purchaser, or to the best knowledge of Parent and Purchaser, any of the persons listed in Schedule I to this Offer to Purchase, on the one hand, and the Company or its affiliates, on the other hand, concerning a merger, consolidation, acquisition, tender offer or other acquisition of securities of the Company, an election of directors or a sale or other transfer of a material amount of assets of the Company during the past two years.

Available Information. Pursuant to Rule 14d-3 under the Exchange Act, we have filed with the SEC a Tender Offer Statement on Schedule TO (as amended, the “Schedule TO”), of which this Offer to Purchase forms a part, and exhibits to the Schedule TO. The Schedule TO and the exhibits thereto, as well as other information filed by Parent and Purchaser with the SEC, are available on the SEC website at www.sec.gov. Additional copies of this Offer to Purchase, the related Letter of Transmittal and other materials related to the Offer may also be obtained for free from the Information Agent.

 

9.	Source and Amount of Funds.

We estimate that the maximum amount of funds needed to (i) complete the Offer, the Merger and the transactions contemplated by the Merger Agreement, including the funds needed to purchase all Shares tendered in the Offer and to pay the Company stockholders whose Shares are converted into the right to receive a cash amount equal to the Offer Price in the Merger, (ii) pay for fees and expenses incurred by Parent (and, to the extent unpaid as of the effective time, the Company) related to the Offer and the Merger, (iii) pay for the amounts

 

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in respect of outstanding Company equity awards and (iv) repay certain existing indebtedness of the Company and its subsidiaries will be approximately $760 million.

Parent has and will have available to it, through a variety of sources, including cash on hand and sources of immediately available credit, funds necessary to satisfy all of Purchaser’s payment obligations under the Merger Agreement. Parent may obtain a term loan or other financing in connection with the transactions contemplated by the Merger Agreement, but neither the consummation of the Offer nor the consummation of the Merger is conditioned upon Parent’s or Purchaser’s receipt of any financing.

 

10.	Background of the Offer; Past Contacts or Negotiations with the Company.

The information set forth below regarding the Company was provided by the Company, and none of Parent, Purchaser nor any of their respective affiliates take any responsibility for the accuracy or completeness of any information regarding meetings or discussions in which Parent, Purchaser or their respective affiliates or representatives did not participate.

Background of the Offer

The following is a description of significant contacts between representatives of Parent, on the one hand, and representatives of the Company, on the other hand, that resulted in the execution of the Merger Agreement and commencement of the Offer. For a review of the Company’s activities relating to the contacts leading to the Merger Agreement, please refer to the Schedule 14D-9, which has been filed by the Company with the SEC and is being mailed to the Company’s stockholders with this Offer to Purchase.

From time to time in the ordinary course of business, the management and board of directors of Parent (the “Parent Board”) evaluate various business opportunities in an effort to enhance stockholder value and to complement and enhance Parent’s existing businesses. As part of this process, Parent’s management and the Parent Board consider potential strategic transactions, including potential acquisitions.

On January 13, 2022, a representative of Jefferies LLC (“Jefferies”), the Company’s financial advisor, contacted a representative of Parent to discuss whether Parent would be interested in a potential acquisition of the Company. Parent indicated that it may be interested in exploring an acquisition of the Company. Shortly thereafter, a representative of Parent’s then financial advisor contacted a representative of Jefferies, indicating that Parent was interested in exploring an acquisition of the Company.

On January 19, 2022, a representative of Jefferies contacted a representative of Parent’s then financial advisor to discuss next steps for providing Parent with access to certain information.

Thereafter on January 19, 2022, Parent entered into a confidentiality agreement with the Company. The confidentiality agreement contained a customary standstill provision that permitted Parent to make acquisition proposals at any time after the Company entered into a definitive agreement with a third party providing for a change of control transaction of the Company. After entry into the confidentiality agreement, Parent and its representatives were provided access to select business diligence information to facilitate a proposal.

From January 19, 2022, until the termination of discussions between Parent and the Company on April 1, 2022, representatives of Parent engaged in high-level financial due diligence of the Company, which included participation in numerous calls and meetings with Company senior management and representatives of Jefferies, and review of financial information and documents.

On February 2, 2022, the Parent Board held a special meeting, which was attended by members of Parent management and representatives of Parent’s then financial advisor, to discuss the potential acquisition of the Company. The Parent Board agreed with Parent management’s proposal to deliver to the Company a non-binding indication of interest regarding an acquisition of the Company.

 

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On February 3, 2022, Parent submitted a letter to the Company setting forth a non-binding indication of interest to acquire the Company for $23.50 per share in cash (the “February 2022 Proposal”). The proposed purchase price per Share in the February 2022 Proposal represented a premium of approximately 15% to the closing price of the Company’s common stock on February 2, 2022, the day prior to the submission of the February 2022 Proposal.

On February 11, 2022, a representative of Jefferies contacted a representative of Parent’s then financial advisor and conveyed the Company Board’s feedback that the February 2022 Proposal was not sufficiently attractive to the Company’s stockholders, but that the Company Board was willing to provide Parent with access to additional due diligence material to support an increase in the offer price. The representative of Parent’s then financial advisor indicated that Parent would engage in additional due diligence in order to determine whether to increase its offer price. Following this discussion, Parent and its representatives were provided access to a virtual dataroom.

On February 22, 2022, representatives of Parent attended a presentation by Company senior management.

On March 7, 2022, Parent submitted a letter to the Company setting forth a non-binding indication of interest to acquire the Company for $23.75 per Share in cash (the “March 2022 Proposal”). The proposed purchase price per share in the March 2022 Proposal represented a premium of approximately 1% to the closing price of the Company’s common stock on March 4, 2022.

On March 10, 2022, representatives of Jefferies communicated to representatives of Parent’s then financial advisor the Company Board’s feedback that the March 2022 Proposal was insufficient, citing the need for a transaction to have a high likelihood of obtaining stockholder approval, and that the Company would require a per share price that represented at least a “double digit premium” to the then-current trading price of the Company’s common stock. Parent’s representative indicated that Parent was not prepared to increase its offer price at that time but was willing to engage in additional diligence to potentially support an increase in the offer price.

On March 17, 2022, Cheryl Henry, CEO of the Company, and Rick Cardenas, incoming CEO of Parent, met in person to discuss the status of due diligence and discussions between the parties. In the course of that conversation, the parties discussed the recent increase in the Company’s stock price and whether the premium of the March 2022 Proposal over the Company’s current stock price would be sufficient to make obtaining approval of a transaction by the Company’s stockholders likely.

On March 28, 2022, representatives of Jefferies conveyed the Company Board’s counterproposal to a representative of Parent’s then financial advisor. Parent’s representative indicated that Parent would not be willing to offer a material increase, if any, to the price set forth in the March 2022 Proposal.

On April 1, 2022, representatives of Parent’s then financial advisor informed representatives of Jefferies that, in light of market conditions and other factors, including the Company’s current trading price and need for a sufficient premium to make stockholder approval of a transaction likely, Parent had determined not to proceed with exploring the potential transaction at that time. Subsequently, on April 27, 2022, the Company requested that Parent destroy confidential information received from the Company in accordance with the January 19, 2022 confidentiality agreement.

On September 20 and 21, 2022, the Parent Board held a regularly scheduled meeting to discuss, among other things, merger and acquisition activity in the restaurant industry and various potential acquisition opportunities for Parent, including the Company.

On January 9, 2023, at an industry conference, a representative of Parent indicated to representatives of Jefferies that Parent would still be interested in exploring an acquisition of the Company if the Company indicated an interest in doing so.

 

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On February 24, 2023, representatives of Jefferies had telephonic discussions with Raj Vennam, Chief Financial Officer of Parent, to inquire about Parent’s interest in exploring a potential acquisition of the Company. In the course of those conversations, Mr. Vennam indicated that the Company’s 2022 actual performance, current macroeconomic conditions and challenges affecting the Company’s industry would need to be reflected in any acquisition proposal that Parent might make. Mr. Vennam also expressed Parent’s willingness to speak directly with representatives of the Company regarding a potential acquisition of the Company.

On March 2, 2023, Ms. Henry and Robin Selati, Lead Independent Director of the Company Board, had a telephonic discussion with Mr. Cardenas and Mr. Vennam. In the course of that conversation, Mr. Cardenas indicated Parent’s interest in exploring a potential acquisition of the Company and requested access to certain high-level financial due diligence. Mr. Cardenas also indicated the need to keep the number of individuals with knowledge of a potential transaction small to minimize the potential for leaks and disruption to each party’s business. Mr. Selati concurred that discussions regarding a potential acquisition would have to be on a short timeframe to avoid the increased potential for distraction and leaks.

On March 8, 2023, Parent entered into a new confidentiality agreement with the Company to facilitate further discussion, substantially on the same terms as the prior confidentiality agreement entered into on January 19, 2022. The confidentiality agreement contained a customary standstill provision that permitted Parent to make acquisition proposals at any time after the Company entered into a definitive agreement with a third party providing for a change of control transaction of the Company. Following execution of the confidentiality agreement, Parent and its representatives were provided access to a virtual dataroom, and certain high-level financial due diligence, including the Company’s unaudited non-public prospective financial information for 2023 (the “2023 Budget”). The Company’s actual results for 2022 and the prospective financial information for 2023 in the 2023 Budget were lower than the corresponding information provided to Parent in connection with Parent’s 2022 acquisition proposals.

In advance of the Parent Board’s regularly scheduled meeting on March 21 and 22, 2023, Mr. Cardenas informed each of the members of the Parent Board that Parent management was in discussion with representatives of the Company regarding a potential acquisition of the Company. Following discussion at the meeting, the Parent Board agreed with Parent management’s proposal to deliver to the Company a non-binding indication of interest regarding an acquisition of the Company.

On March 29, 2023, Parent submitted a letter to the Company setting forth a non-binding indication of interest to acquire the Company for $21.00 per share in cash (the “March 29 Proposal”). The proposed purchase price per share in the March 29 Proposal represented a premium of approximately 29% to the closing price of the Company’s common stock on March 29, 2023.

On March 31, 2023, representatives of Jefferies conveyed to representatives of Parent the Company Board’s counterproposal of a price of $22.25 per share in cash, representing a 35% premium to the closing price of the Company’s common stock on March 30, 2023.

Thereafter on March 31, 2023, a representative of Parent informed a representative of Jefferies that Parent was willing to increase its offer price to $21.50 per share in cash (the “March 31 Proposal”), indicating that this represented Parent’s best and final offer. The proposed purchase price per share in the March 31 Proposal represented a premium of approximately 31% to the closing price of the Company’s common stock on March 31, 2023. The offer price set forth in the March 31 Proposal was conditioned on completion of confirmatory diligence without material negative findings.

Throughout March and April 2023 and until the execution of the Merger Agreement on May 2, 2023, representatives of Parent engaged in due diligence of the Company, which included participation in numerous calls and meetings with Company senior management and representatives of Jefferies, and review of select business diligence information and documents.

 

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On April 5, 2023, representatives of Kirkland & Ellis LLP (“Kirkland”), the Company’s outside legal counsel, sent a draft of the Merger Agreement to representatives of Hunton Andrews Kurth LLP (“Hunton”), Parent’s outside legal counsel. The draft merger agreement provided for, among other things, a termination fee equal to 2.5% of transaction equity value, payable if, among other things, the Merger Agreement is terminated by the Company to accept and enter into an agreement with respect to a Superior Proposal (as defined below).

Thereafter on April 5, 2023, Mr. Cardenas and Ms. Henry met in-person to discuss the status of due diligence and transaction negotiations and next steps, as well as numerous operational and integration matters relevant if the proposed transaction were consummated. During this meeting, Mr. Cardenas expressed Parent’s view that Company operators and key Company personnel, including Ms. Henry, remaining with the Company for some period of time following closing would be important for the success of the transaction from Parent’s perspective. No specific terms regarding post-closing employment or compensation were discussed.

On April 13, 2023, representatives of Hunton, on behalf of Parent, sent a revised draft of the Merger Agreement to representatives of Kirkland, which draft included a termination fee equal to 3.5% of transaction equity value, and certain changes to Parent’s benefit resulting in greater closing conditionality. The April 13th draft also noted Parent’s expectation that the Company’s directors and executive officers would enter into tender and support agreements.

On April 17, 2023, representatives of Kirkland and Hunton had a telephonic discussion to discuss open issues in the Merger Agreement.

On April 18, 2023, the Parent Board held a special meeting at which Parent management provided an update to the Parent Board regarding the potential acquisition of the Company, including with respect to, among other things, the status of discussions, the results of due diligence findings, updated financial analyses of the Company and the proposed transaction, the anticipated purchase price and potential synergies. The Parent Board agreed with Parent management’s proposal to continue pursuing the proposed transaction.

On April 19, 2023, representatives of Kirkland, on behalf of the Company, sent representatives of Hunton a revised draft of the Merger Agreement. The revised draft, among other things, included a termination fee equal to 3.0% of transaction equity value, and numerous revisions to the terms of the Merger Agreement that would enhance closing certainty.

On April 24, 2023, representatives of Hunton, on behalf of Parent, sent a revised draft of the Merger Agreement to representatives of Kirkland, which, among other terms, provided for a termination fee equal to 3.5% of transaction equity value, and certain changes to Parent’s benefit resulting in greater closing conditionality. Representatives of Hunton, on behalf of Parent, also sent an initial draft of the Tender and Support Agreement to representatives of Kirkland, pursuant to which, among other things, the Company’s directors and executive officers would each agree to tender his or her Shares and otherwise support a transaction with Parent.

Between April 24, 2023, and May 2, 2023, representatives of Kirkland, representatives of Hunton and members of management of each of the Company and Parent and representatives of Jefferies had multiple conversations to resolve outstanding issues under the Merger Agreement and exchanged multiple drafts.

Between April 25 and May 1, 2023, Mr. Cardenas and Ms. Henry had telephonic and in-person discussions on multiple occasions. In the course of these discussions, Mr. Cardenas and Ms. Henry discussed the status of negotiations regarding the proposed transaction, as well as numerous operational and integration matters relevant if the proposed transaction were consummated, and the timing of announcement of the proposed transaction. Mr. Cardenas and Ms. Henry also discussed potential post-closing employment and compensation arrangements for Company operators and key Company personnel, including Ms. Henry. Mr. Cardenas restated Parent’s view that Ms. Henry remaining with the Company for some period of time following closing would be important for the success of the transaction from Parent’s perspective, and outlined that Ms. Henry’s post-closing compensation would be materially lower than her current compensation as the chief executive officer of a

 

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publicly-traded company. On May 1, 2023, Ms. Henry confirmed to Mr. Cardenas that, given its importance to Parent, she was prepared to continue to lead the Company as President of the Ruth’s Chris brand following closing on the terms described in Section 11 “The Merger Agreement; Other Agreements.”

On April 26 and 27, 2023, Mr. Vennam had several discussions with a representative of Jefferies regarding Parent’s due diligence findings and transaction status and timing, during which Mr. Vennam indicated that Parent’s willingness to proceed with the potential acquisition at a price of $21.50 per share was now conditioned on the Company’s suspension of quarterly dividends for shares of the Company’s common stock between signing and closing of a potential transaction. Members of Parent’s management also relayed its position with regard to the dividend to members of Company senior management, and representatives of Hunton relayed Parent’s position to representatives of Kirkland.

On April 27, 2023, Kirkland sent a revised draft of the Tender and Support Agreement to Hunton. The revised draft Tender and Support Agreement provided that the tender and support obligations therein would terminate if the Company Board changed its recommendation with respect to the transaction. Over the course of the next week through May 2, 2023, representatives of Kirkland and Hunton continued to negotiate and finalize the Tender and Support Agreement and the Merger Agreement.

On May 1, 2023, representatives of Kirkland and Hunton finalized the terms of the Merger Agreement, and agreed, on behalf of the Company and Parent, respectively, upon a termination fee equal to 3.35% of the Company’s total equity value.

On May 2, 2023, the Parent Board held a special meeting, which was attended by members of Parent management and representatives of Hunton. After presentations from Parent management and a review of the directors’ fiduciary duties and the provisions of the Merger Agreement from representatives of Hunton, the Parent Board unanimously approved the execution, delivery and performance by Parent and Purchaser of the Merger Agreement and the Tender and Support Agreement.

Thereafter on May 2, 2023, each of the Company, Parent and Purchaser executed and delivered the Merger Agreement.

On the morning of May 3, 2023, prior to market open, Parent and the Company issued a joint press release announcing the proposed transaction.

Past Contacts, Transactions, Negotiations and Agreements

For information on the Merger Agreement and the other agreements between the Company and Purchaser and their respective related parties, see Section 8 — “Certain Information Concerning Parent, Purchaser and Certain Related Parties” and Section 11 — “The Merger Agreement; Other Agreements.”

 

11.	The Merger Agreement; Other Agreements.

The Merger Agreement

The following is a summary of certain provisions of the Merger Agreement. This summary of the Merger Agreement has been included to provide the Company’s stockholders with information regarding its terms. It is not intended to provide any other factual disclosures about Parent, Purchaser, the Company or their respective affiliates, and it is not intended to modify or supplement any rights or obligations of the parties under the Merger Agreement or any factual disclosures about the Company or the transactions contemplated in the Merger Agreement contained in public reports filed by the Company with the SEC. This summary does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed as Exhibit (d)(1) to the Schedule TO and is incorporated herein by reference. Copies of the Merger Agreement and the Schedule TO, and any other filings that we make with the SEC with respect to the Offer or

 

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the Merger, may be obtained in the manner set forth in Section 8 — “Certain Information Concerning Parent, Purchaser and Certain Related Parties.” Stockholders and other interested parties should read the Merger Agreement for a more complete description of the provisions summarized below. Capitalized terms used in this section and not otherwise defined have the respective meanings set forth in the Merger Agreement.

The assertions embodied in the representations and warranties contained in the Merger Agreement are qualified by information in a confidential disclosure schedule delivered by the Company to Parent in connection with the Merger Agreement (which we refer to as the “Company Disclosure Letter”). Moreover, certain representations and warranties in the Merger Agreement were made as of a specified date, may be subject to a contractual standard of materiality different from what might be viewed as material to stockholders, or may have been used for the purpose of allocating risk between the parties to the Merger Agreement. Accordingly, the representations and warranties contained in the Merger Agreement and summarized in this Offer to Purchase should not be relied on by any persons as characterizations of the actual state of facts and circumstances of the Company, Parent or Purchaser at the time they were made and the information in the Merger Agreement should be considered in conjunction with the entirety of the factual disclosure about the Company in the Company’s public reports filed with the SEC. Information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding the Offer, the Merger, the Company, Parent, Purchaser, their respective affiliates and their respective businesses that are contained in, or incorporated by reference into, the Schedule TO and related exhibits, including this Offer to Purchase, and the Schedule 14D-9, which will be filed with the SEC on May 16, 2023, as well as in the Company’s other public filings.

The Offer

The Merger Agreement provides that, subject to the satisfaction of the Minimum Condition and the HSR Condition and the satisfaction or waiver (to the extent waiver is permitted under the Merger Agreement and applicable law) of the other conditions that are described in Section 15 — “Conditions of the Offer,” Purchaser will, and Parent will cause Purchaser to, accept for payment, and pay for, all Shares validly tendered and not validly withdrawn promptly following the applicable Offer Expiration Time. The initial Offer Expiration Time will be one minute after 11:59 p.m. (at 12:00 midnight), New York City time, on Tuesday, June 13, 2023.

Terms and Conditions of the Offer. The obligations of Purchaser to, and of Parent to cause Purchaser to, accept for purchase and pay for any Shares validly tendered (and not validly withdrawn) pursuant to the Offer are subject to the prior satisfaction or waiver (to the extent waiver is permitted under the Merger Agreement and applicable law) of the conditions set forth in Section 15 — “Conditions of the Offer.” The conditions to the Offer will be in addition to, and not a limitation of, the rights of Parent and Purchaser to extend, terminate or modify the Offer in accordance with the Merger Agreement and applicable law. The conditions to the Offer are for the sole benefit of Parent and Purchaser, and Parent and Purchaser may waive, in whole or in part, any condition to the Offer at any time and from time to time, in their sole discretion, other than the Minimum Condition, the HSR Condition, the Legal Restraint Condition or the Termination Condition, which, in each case, may be waived by Parent and Purchaser with the prior written consent of the Company. Parent and Purchaser expressly reserve the right at any time, to waive, in whole or in part, any Offer condition (other than the Minimum Condition, the HSR Condition, the Legal Restraint Condition and the Termination Condition), to increase the Offer Price or modify the terms of the Offer, in each case only in a manner not inconsistent with the Merger Agreement, except that Parent and Purchaser are not permitted (without the prior written consent of the Company) to (i) reduce the number of Shares subject to the Offer, (ii) reduce the Offer Price, (iii) directly or indirectly amend, modify, supplement or waive the Minimum Condition or the Termination Condition, (iv) directly or indirectly amend, modify or supplement any Offer condition, (v) directly or indirectly amend, modify or supplement any other term of the Offer in any individual case in any manner that is adverse to the holders of Shares or that would, individually or in the aggregate, reasonably be expected to prevent or materially delay the consummation of the Offer or the Merger or impair the ability of Parent, Purchaser or the Company to consummate the Offer or the Merger, (vi) terminate the Offer or accelerate, extend or otherwise change the Offer Expiration Time (except as

 

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expressly required or permitted by the Merger Agreement), (vii) change the form of consideration payable in the Offer or (viii) provide for any “subsequent offering period” (or any extension thereof) within the meaning of Rule 14d-11 promulgated under the Exchange Act.

Extensions of the Offer

The Merger Agreement requires that Purchaser will, and Parent will cause Purchaser to, extend the Offer (i) for any minimum period required by any applicable rule, regulation, interpretation or position of the SEC or its staff or of the Nasdaq Global Select Market (“Nasdaq”) or its staff or as may be necessary to resolve any comments of the SEC or the staff of Nasdaq, as applicable, to the Offer, the Schedule 14D-9 or the Offer documents; and (ii) if at the then-scheduled Offer Expiration Time, any of the Offer conditions has not been satisfied or waived by Parent or Purchaser (to the extent waiver is permitted under the Merger Agreement and applicable law), (x) extend the Offer on one or more occasions, in consecutive periods of up to ten business days each (or for such longer or shorter period as the Company, Purchaser and Parent may agree) or (y) if the then-scheduled Offer Expiration Time is ten or fewer business days before the Termination Date, extend the Offer until 11:59 p.m., New York City time, on the day before the Termination Date (or such other date and time as the parties may agree); provided, however, that without the Company’s written consent, Purchaser shall not extend the Offer, and without Parent’s prior written consent, Purchaser shall not be required to extend the Offer, in each case, beyond the earlier of (1) November 2, 2023 (the “Termination Date”; provided, however, that if as of the Termination Date the HSR Condition and the Legal Restraint Condition (as defined below) (in the case of the Legal Restraint Condition, solely with respect to a law or order relating to antitrust laws) shall not have been satisfied or validly waived by Parent or Purchaser, to the extent waivable in accordance with the terms of the Merger Agreement and applicable law by Parent or Purchaser, then the Termination Date shall automatically be extended until 11:59 p.m., New York City time, on March 4, 2024, and all references to the Termination Date in the Merger Agreement will be as so extended), or (2) the valid termination of the Merger Agreement in accordance with its terms; provided, however, that, in the case of clause (1), if at the Termination Date or any time thereafter Parent is not then permitted to terminate the Merger Agreement pursuant to its terms, Purchaser shall be required to (and Parent shall cause Purchaser to) extend the Offer beyond the Termination Date.

Structure of the Merger; Certificate of Incorporation; Bylaws; Directors and Officers

The Closing of the Merger will take place promptly following (but in any event on the same date as) the Offer Acceptance Time (as defined in the Merger Agreement), except if certain conditions set forth in the Merger Agreement are not satisfied or, to the extent permitted under the Merger Agreement and by applicable law, waived as of such date, in which case the Closing will take place no later than the first business day on which all such conditions are satisfied or, to the extent permitted under the Merger Agreement and by applicable law, waived, unless (a) the Merger Agreement has been terminated pursuant to its terms or (b) another time or date is agreed to in writing by the parties to the Merger Agreement. At the effective time, the Company, Parent and Purchaser will consummate the Merger, whereby Purchaser will be merged with and into the Company, and the Company will survive the Merger as an indirect, wholly owned subsidiary of Parent. At the effective time, all of the property, rights, privileges, immunities, powers and franchises of the Company and Purchaser will vest in the surviving corporation, and all debts, liabilities, restrictions and duties of the Company and Purchaser will become the debts, liabilities, restrictions and duties of the surviving corporation, all as provided under the DGCL, including Section 251(h) thereof.

As of the effective time, (i) the certificate of incorporation of the surviving corporation shall be amended and restated in its entirety as set forth in Exhibit A attached to the Merger Agreement and, as so amended, shall be the certificate of incorporation of the surviving corporation until thereafter amended as provided by the DGCL and such certificate of incorporation; and (ii) the bylaws of the surviving corporation will be amended and restated as a result of the Merger to be the same as the bylaws of Purchaser in effect immediately before the effective time, except that references to Purchaser’s name will automatically be amended and will become references to the name of the Company, until thereafter amended as provided by the DGCL, the certificate of incorporation and such bylaws (subject to the terms of the Merger Agreement).

 

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The directors and officers of Purchaser immediately prior to the effective time will be the directors and officers of the surviving corporation. Such directors and officers will hold office until their respective successors are duly elected or appointed and qualified or until the earlier of their death, resignation or removal, in each case as provided in the organizational documents of the surviving corporation.

The Merger Agreement provides the Merger will be effected pursuant to Section 251(h) of the DGCL and will be effected without a vote on the adoption of the Merger Agreement by the stockholders of the Company.

Effect of the Merger on the Shares

At the effective time, each share of common stock of Purchaser that is issued and outstanding as of immediately prior to the effective time will automatically be cancelled and converted into one validly issued, fully paid and nonassessable share of common stock of the surviving corporation.

At the effective time, each Share issued and outstanding immediately prior to the effective time (other than any such Shares that are Dissenting Company Shares or Owned Company Shares), will be automatically cancelled, extinguished and converted into the right to receive the Merger Consideration in accordance with the terms of the Merger Agreement. Excluded Shares will be cancelled at the effective time and will not be exchangeable for Merger Consideration. Dissenting Company Shares will entitle their holders only to the rights granted to them under Section 262 of the DGCL (as further described in Section 16 — “Certain Legal Matters; Regulatory Approvals — Dissenters’ Rights”).

Appraisal Rights

Notwithstanding anything to the contrary in the Merger Agreement, if required by the DGCL (but only to the extent required thereby), any Dissenting Company Shares shall, by virtue of the Merger, automatically be cancelled and shall cease to exist, and such Dissenting Company Shares will not be converted into, or represent the right to receive, the Merger Consideration pursuant to the Merger Agreement, and instead, holders of the Dissenting Company Shares will be entitled only to receive payment of the appraised value of such Dissenting Company Shares in accordance with the provisions of Section 262 of the DGCL, subject to any required withholding, unless and until any such holder fails to perfect or effectively withdraws or loses their rights to appraisal and payment under the DGCL; provided that, if, after the effective time, any such holder fails to perfect, effectively withdraws or loses such holder’s right to appraisal pursuant to Section 262 of the DGCL, such holder’s Dissenting Company Shares will thereupon be treated as if they had been converted into, at the effective time, and will represent only the right to receive the Merger Consideration in accordance with the Merger Agreement, without interest thereon, subject to any required withholding, and the surviving corporation will remain liable for payment of the Merger Consideration for such holder’s Dissenting Company Shares in accordance with the Merger Agreement. At the effective time, all of the Dissenting Company Shares will automatically be cancelled and extinguished and any holder of the Dissenting Company Shares will cease to have any rights with respect thereto, except for the rights provided in Section 262 of the DGCL and as provided in the previous sentence. Prior to the effective time, the Company will give Parent (i) reasonably prompt notice of any demands received by the Company for appraisal of Shares and any withdrawals of such demands and (ii) the opportunity to participate in all negotiations and proceedings with respect to such demands. Prior to the effective time, the Company will not, except with the prior written consent of Parent, make any payment with respect to any demands for appraisal, or settle or offer to settle any such demands, waive any stockholder’s failure to comply with the DGCL or agree to do any of the foregoing.

Treatment of the Company Equity Awards

At the effective time, except as may otherwise be agreed in writing by the Company, Parent and the holder thereof, each award of restricted stock of the Company (each, an “RSA”) outstanding as of immediately prior to the effective time, whether vested or unvested, will automatically, without any action on the part of Parent,

 

32

Purchaser, the Company or the holder thereof, be fully vested, cancelled and converted into and will become the right to receive an amount in cash, without interest thereon (but subject to applicable withholding), equal to the product obtained by multiplying (i) the Merger Consideration by (ii) the total number of Shares subject to such RSA.

At the effective time, except as may otherwise be agreed in writing by the Company, Parent and the holder thereof, each time-vested restricted stock unit of the Company (each, an “RSU”) outstanding as of immediately prior to the effective time, whether vested or unvested, will automatically, without any action on the part of Parent, Purchaser, the Company or the holder thereof, be fully vested, cancelled and converted into and will become the right to receive an amount in cash, without interest thereon (but subject to applicable withholding), equal to the product obtained by multiplying (i) the Merger Consideration by (ii) the total number of Shares subject to such RSU.

At the effective time, except as may otherwise be agreed in writing by the Company, Parent and the holder thereof, each (i) performance-based restricted stock unit of the Company and (ii) market stock unit of the Company (each, a “PSU”) outstanding as of immediately prior to the effective time, whether vested or unvested, will automatically, without any action on the part of Parent, Purchaser, the Company or the holder thereof, be fully vested, cancelled and converted into and will become the right to receive an amount in cash, without interest thereon (but subject to applicable withholding), equal to the product obtained by multiplying (i) the Merger Consideration by (ii) the total number of Shares subject to such PSU, with the achievement of the performance-based vesting metrics applicable to each PSU based on achievement of the applicable performance metrics as specified in the applicable award agreement.

At the effective time, each deferred stock unit of the Company credited to a director’s stock deferral account pursuant to an election to defer a grant of restricted stock units (each, a “DSU”) outstanding as of immediately prior to the effective time, whether vested or unvested, will automatically, without any action on the part of Parent, Purchaser, the Company or the holder thereof, be fully vested, cancelled and converted into and will become the right to receive an amount in cash, without interest thereon (but subject to applicable withholding), equal to the product obtained by multiplying (i) the Merger Consideration by (ii) the total number of DSUs credited to the holder’s account.

As promptly as reasonably practicable, but in any event no later than five business days, after the Closing, the applicable holders of RSAs, RSUs, PSUs and DSUs will receive a payment from the Company or the surviving corporation, through its payroll system or payroll provider, of all amounts required to be paid to such holders in respect of the RSAs, RSUs, PSUs and DSUs that are cancelled and converted pursuant to the Merger Agreement; provided, that, to the extent any such amounts relate to a RSU, PSU or DSU that is nonqualified deferred compensation subject to Section 409A of the Code, the surviving corporation will pay such amounts at the earliest time permitted under the terms of the applicable agreement, plan or arrangement relating to such RSU, PSU or DSU that will not trigger a tax or penalty under Section 409A of the Code.

Prior to the effective time, the Company Board (or a committee thereof) will take, or cause to be taken, all actions reasonably necessary, including to adopt any resolutions, to effect the cancellation and conversion of RSAs, RSUs, PSUs and DSUs upon the effective time, which actions or resolutions will provide that such RSAs, RSUs, PSUs and DSUs will terminate conditioned upon, and effective immediately after, the effective time and the holders thereof will be entitled only to the amount specified in the Merger Agreement in respect thereof.

Exchange of Certificates

Prior to the Offer Acceptance Time, Parent will (i) select a nationally recognized bank or trust company reasonably acceptable to the Company to act as agent (the “Depositary”) for the holders of Shares to receive the Offer Price to which such holders will become entitled pursuant to the Merger Agreement and to act as an agent (the “Payment Agent”) for the holders of Shares to receive the Merger Consideration to which such holders will

 

33

become entitled pursuant to Merger Consideration; and (ii) enter into a payment agent agreement with the Payment Agent, in form and substance reasonably acceptable to the Company. Parent has selected American Stock Transfer & Trust, LLC, as the Depositary and the Payment Agent.

Promptly after (and in any event no later than the earlier of (i) the effective time and (ii) the second business day after the Offer Acceptance Time) the Offer Acceptance Time, Parent shall deposit (or cause to be deposited) with the Depositary, by wire transfer of immediately available funds, for payment to the holders of Shares, an amount of cash equal to the aggregate Merger Consideration to which such holders become entitled pursuant to the terms of the Merger Agreement (together with the amount deposited to pay holders of Shares entitled to receive the Offer Price, the “Payment Fund”).

To the extent that (i) there are any losses with respect to any investments of the Payment Fund; (ii) the Payment Fund diminishes for any reason below the level required for the Payment Agent to promptly pay the cash amounts contemplated by the Merger Agreement; or (iii) all or any portion of the Payment Fund is unavailable for Purchaser or Parent (or the Payment Agent on behalf of Purchaser or Parent), as applicable, to promptly pay the cash amounts contemplated by the Merger Agreement for any reason, Parent will, or after the effective time will cause the surviving corporation to, promptly replace or restore the amount of cash in the Payment Fund so as to ensure that the Payment Fund is at all times fully available for distribution and maintained at a level sufficient for the Payment Agent to make the payments contemplated by the Merger Agreement. The Payment Fund will not be used for any purpose other than the payment to holders of Shares as contemplated by the Merger Agreement.

Promptly following the effective time (and in any event within three business days after the effective time), Parent and the surviving corporation will cause the Payment Agent to mail to each holder of record as of immediately prior to the effective time (other than Owned Company Shares) of one or more certificates that immediately prior to the effective time represented issued and outstanding Shares (other than Owned Company Shares) (the “Certificates” (if any)) (i) a letter of transmittal in customary form (which will specify that delivery will be effected, and risk of loss and title to the Certificates will pass, only upon delivery of the Certificates to the Payment Agent), and (ii) instructions for effecting the surrender of the Certificates in exchange for the Merger Consideration payable with respect to the Shares formerly represented thereby pursuant to the Merger Agreement. Upon surrender of Certificates for cancellation to the Payment Agent, together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, the holders of such Certificates will be entitled to receive in exchange therefor an amount in cash equal to the product obtained by multiplying (x) the aggregate number of Shares represented by such Certificates by (y) the Merger Consideration, and the Certificates so surrendered will forthwith be cancelled. Notwithstanding anything to the contrary in the Merger Agreement, no record holder of uncertificated Shares as of immediately prior to the effective time (the “Uncertificated Shares”) will be required to deliver a Certificate or an executed letter of transmittal to the Payment Agent in order to receive the payment that such holder is entitled to receive pursuant to the Merger Agreement with respect of such Uncertificated Shares. In lieu thereof, such record holder of Uncertificated Shares, upon receipt of an Agent’s Message by the Payment Agent (or such other evidence, if any, of transfer as the Payment Agent may reasonably request), will be entitled to receive in exchange therefor an amount in cash equal to the product obtained by multiplying (1) the aggregate number of Shares represented by such holder’s transferred Uncertificated Shares by (2) the Merger Consideration, and the transferred Uncertificated Shares will be cancelled. No interest will be paid or accrued for the benefit of holders of the Certificates or Uncertificated Shares on the Merger Consideration payable upon the surrender of such Certificates and transfer of Uncertificated Shares pursuant to the Merger Agreement. Until so surrendered or transferred, outstanding Certificates and Uncertificated Shares will be deemed from and after the effective time to evidence only the right to receive the Merger Consideration payable in respect thereof pursuant to the Merger Agreement.

Prior to the effective time, Parent and the Company will cooperate and use commercially reasonable efforts to establish procedures with the Payment Agent and DTC with the objective that the Payment Agent will transmit to DTC or its nominee on the Closing Date an amount in cash, by wire transfer of immediately available funds,

 

34

equal to (i) the number of Shares (other than Owned Company Shares and Dissenting Company Shares) held of record by DTC or such nominee immediately prior to the effective time multiplied by (ii) the Merger Consideration.

If payment of the Merger Consideration is to be made to a person other than the person in whose name the surrendered Certificate or transferred Uncertificated Share in exchange therefor is registered, it will be a condition of payment that (i) the person requesting such exchange present proper evidence of transfer or will otherwise be in proper form for transfer, and (ii) the person requesting such payment will have paid any transfer and other taxes required by reason of the payment of the Merger Consideration to a person other than the registered holder of such Certificate or Uncertificated Share surrendered or will have established to the reasonable satisfaction of the surviving corporation that such tax either has been paid or is not applicable.

Subject to applicable law, none of the Payment Agent, Parent, the surviving corporation or any other party to the Merger Agreement will be liable to a holder of Shares for any amount properly paid to a public official pursuant to any applicable abandoned property, escheat or similar law.

Any portion of the Payment Fund that remains undistributed to the holders of the Certificates or Uncertificated Shares on the date that is one year after the effective time will be delivered to Parent (or to the surviving corporation as directed by Parent) upon demand, and any holders of Shares that were issued and outstanding immediately prior to the Merger who have not theretofore surrendered or transferred their Certificates or Uncertificated Shares representing such Shares for exchange pursuant to the Merger Agreement will thereafter look for payment of the Merger Consideration payable in respect of the Shares represented by such Certificates or Uncertificated Shares solely to Parent (subject to abandoned property, escheat or similar law), as general creditors thereof, for any claim to the Merger Consideration to which such holders may be entitled pursuant to the Merger Agreement. Any amounts remaining unclaimed by holders of any such Certificates or Uncertificated Shares five years after the effective time, or at such earlier date as is immediately prior to the time at which such amounts would otherwise escheat to, or become property of, any governmental authority will, to the extent permitted by applicable law, become the property of the surviving corporation free and clear of any claims or interest of any such holders (and their successors, assigns or personal representatives) previously entitled thereto.

Each of the Payment Agent, the Company and the surviving corporation will be entitled to deduct and withhold (or cause to be deducted and withheld) from any cash amounts otherwise payable under the Merger Agreement to any holder or former holder of Shares, RSAs, RSUs, PSUs and DSUs such amounts as are required to be deducted or withheld therefrom pursuant to any law in respect of taxes. To the extent that such amounts are so deducted or withheld, and timely paid over to the appropriate governmental authority, such amounts will be treated for all purposes under the Merger Agreement as having been paid to the person in respect of whom such deduction or withholding was made.

Representations and Warranties; Material Adverse Effect

The Merger Agreement contains representations and warranties of the Company and of Parent and Purchaser.

Subject to certain exceptions in the Merger Agreement, in the Company Disclosure Letter and as disclosed in the reports, schedules, forms, statements and other documents filed by the Company with the SEC or furnished by the Company to the SEC as publicly available, in each case, on or after March 5, 2021, and at least one business day prior to May 2, 2023, the Merger Agreement contains representations and warranties of the Company as to, among other things:

 

•

organization, requisite power and authority to carry on its business and good standing and qualification to do business;

 

35

•

corporate authority to execute and deliver the Merger Agreement, perform its covenants and obligations and consummate the Offer, the Merger and the other transactions contemplated by the Merger Agreement;

 

•

enforceability of the Merger Agreement;

 

•

Company board approval, fairness opinion of the Company’s financial advisor and applicable anti-takeover statutes or regulations;

 

•

absence of conflicts and required consents or notices;

 

•

requisite governmental approvals;

 

•

authorized share capital of the Company, issued and outstanding equity of the Company and other matters regarding capitalization;

 

•

the Company’s subsidiaries;

 

•

reports, forms, documents and financial statements of the Company required to be filed or furnished with the SEC by the Company since March 5, 2021, through May 2, 2023, and the design, establishment and maintenance of certain disclosure controls and procedures and internal control over financial reporting;

 

•

absence of liabilities required to be reflected on the Company’s balance sheet;

 

•

absence of certain events or changes in the business of the Company from December 25, 2022 to May 2, 2023, including an absence of a Company Material Adverse Effect (as defined below);

 

•

material contracts and validity thereof;

 

•

real estate owned or leased by the Company;

 

•

compliance with environmental laws, permits issued pursuant to such environmental laws and absence of lawsuits against the Company pertaining to such environmental laws;

 

•

ownership and use of intellectual property;

 

•

cybersecurity and data privacy matters;

 

•

tax returns, filings and other tax matters;

 

•

employee benefit plans, employee relations and related labor matters;

 

•

compliance with applicable laws and permits;

 

•

litigation against or involving the Company;

 

•

insurance matters;

 

•

compliance with anti-money laundering, anti-corruption or similar laws;

 

•

compliance with economic sanctions and export controls;

 

•

the Company’s top suppliers;

 

•

quality and safety of the Company’s food and beverage products;

 

•

absence of affiliate transactions;

 

•

broker’s fees and expenses; and

 

•

franchise matters.

Subject to certain exceptions in the Merger Agreement, the Merger Agreement also contains representations and warranties of Parent and Purchaser as to, among other things:

 

•

organization, requisite power and authority to carry on its business and good standing and qualification to do business;

 

36

•

corporate authority to execute and deliver the Merger Agreement, perform its covenants and obligations and consummate the Offer, the Merger and the other transactions contemplated by the Merger Agreement;

 

•

absence of conflicts and required consents or notices;

 

•

requisite governmental approvals;

 

•

litigation against or involving Parent or Purchaser;

 

•

ownership of any Shares;

 

•

broker’s fees and expenses;

 

•

capitalization and operations of Purchaser;

 

•

absence of Parent vote or approval; and

 

•

available funds.

Some of the representations and warranties in the Merger Agreement are qualified by materiality qualifications or, with respect to the Company, a “Company Material Adverse Effect” qualification.

For purposes of the Merger Agreement, a “Company Material Adverse Effect” means any change, event, effect, development, condition, occurrence or circumstance that, individually or in the aggregate, has a material adverse effect on the business, assets, properties, financial condition or results of operations of the Company and its subsidiaries, taken as a whole, provided that, none of the following will be deemed to be or constitute a Company Material Adverse Effect or be taken into account when determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur (subject to the limitations set forth below):

 

•

changes in general economic conditions, or changes in conditions in the global, international or United States economy generally;

 

•

changes in conditions in the financial markets, credit markets or capital markets, including (A) changes in interest rates or credit ratings; (B) changes in exchange rates for the currencies of any country; or (C) any suspension of trading in securities (whether equity, debt, derivative or hybrid securities) generally on any securities exchange or over-the-counter market;

 

•

changes in conditions in the industries in which the Company and its subsidiaries conduct business (including supply chain delays and increases in raw material prices);

 

•

changes in regulatory, legislative or political conditions (including civil unrest, protests and public demonstrations, any government responses thereto (e.g., curfews) and any escalation or worsening thereof);

 

•

any geopolitical conditions, outbreak of hostilities, acts of war (whether or not declared), sabotage, cyber-attack (including by means of cyber-intrusion or other cyber-security breach), terrorism or military actions (including any escalation or general worsening of any such hostilities, acts of war, sabotage, cyberterrorism, terrorism or military actions);

 

•

earthquakes, volcanic activity, hurricanes, tsunamis, tornadoes, mudslides, wild fires or other natural disasters, weather conditions and other force majeure events;

 

•

any (A) epidemic, pandemic or disease outbreak (including the COVID-19 pandemic), human health crises or other force majeure events, in each case, including any worsening thereof, or (B) law or mandate, directive, pronouncement, guideline or recommendation issued by a governmental authority, the Centers for Disease Control and Prevention, the World Health Organization or industry group providing for business closures, “sheltering-in-place,” curfews or other restrictions that relate to, or

 

37

arise out of, an epidemic, pandemic or disease outbreak (including the COVID-19 pandemic) or any change in such law or directive, pronouncement or guideline or interpretation thereof or any material worsening of such conditions (including any COVID-19 measures);

 

•

the negotiation, execution, delivery or performance of the Merger Agreement, or the announcement of the Merger Agreement or the pendency of the Offer, the Merger and the other transactions contemplated by the Merger Agreement, including the impact thereof on the relationships, contractual or otherwise, of the Company and its subsidiaries with customers, suppliers, lenders, lessors, business partners, franchisees, employees, regulators, governmental authorities, vendors or any other person (provided that this bullet will not apply in connection with any breach of or inaccuracy in any representation or warranty set forth in the Merger Agreement expressly addressing the consequences of the negotiation, execution, delivery, performance or the announcement of the Merger Agreement and the transactions contemplated by the Merger Agreement, or the purposes of certain Offer conditions set forth in the Merger Agreement solely as it relates to such representations and warranties);

 

•

the compliance by any party with the terms of the Merger Agreement, including any action taken or refrained from being taken pursuant to or in accordance with the Merger Agreement;

 

•

any action taken or refrained from being taken, in each case to which Parent has expressly approved, consented to or requested in writing following May 2, 2023;

 

•

changes or proposed changes in GAAP or other accounting standards or in any applicable laws (or the enforcement, implementation or interpretation of any of the foregoing);

 

•

changes in the price or trading volume of the Shares, in and of itself (it being understood that the underlying cause of such change may be taken into consideration when determining whether a Company Material Adverse Effect has occurred, unless otherwise contemplated by the exceptions to this definition);

 

•

any failure, in and of itself, by the Company and its subsidiaries to meet (A) any internal or public estimates or expectations of the Company’s revenue, earnings or other financial performance or results of operations for any period or (B) any budgets, plans, projections or forecasts of its revenues, earnings or other financial performance or results of operations (it being understood that the underlying cause of any such failure described in the foregoing clauses (A) or (B) may be taken into consideration when determining whether a Company Material Adverse Effect has occurred or would reasonably be expected to occur, unless otherwise excluded by the exceptions to this definition);

 

•

the availability or cost of equity, debt or other financing to Parent or Purchaser;

 

•

any government shutdown or slowdown;

 

•

any Transaction Litigation (as defined below);

 

•

the identity of, or any facts or circumstances relating to, Parent, Purchaser, or the respective affiliates of the foregoing, the respective financing sources of or investors in the foregoing, or the respective plans or intentions of the foregoing, with respect to the Company or its business; or

 

•

any breach by Parent or Purchaser of the Merger Agreement;

except, in each case of the first, second, third, fourth, fifth, sixth, seventh, eleventh and fifteenth bullet points above, any such change, event, effect, development, condition, occurrence or circumstance shall be taken into account to the extent that such change, event, effect, development, occurrence or circumstance has had, or would reasonably be expected to have, a disproportionate adverse effect on the Company relative to other companies operating in the same segment of the restaurant industry (and conducting operations in the same geographic locations) in which the Company and its subsidiaries operate, in which case only the incremental disproportionate adverse impact may be taken into account in determining whether a Company Material Adverse Effect has occurred.

 

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Conduct of Business Pending the Merger

The Merger Agreement provides that, except (a) as expressly contemplated by the Merger Agreement, (b) as set forth in the Company Disclosure Letter, (c) as required by applicable law, including any COVID-19 measures, (d) for any COVID-19 reasonable response or (e) as approved by Parent in writing (which approval will not be unreasonably withheld, conditioned or delayed), during the period from May 2, 2023, until the earlier to occur of the termination of the Merger Agreement pursuant to its terms and the effective time (the “Pre-Closing Period”), the Company will, and will cause each of its subsidiaries to, use its reasonable best efforts to (i) conduct its business in all material respects in the ordinary course of business consistent with past practices (taking into account any COVID-19 reasonable responses), and (ii) preserve intact in all material respects its current business organization, ongoing businesses and significant relationships with Company franchisees and the franchise system as a whole, top suppliers of the Company and other persons with whom the Company or its subsidiaries have material business dealings; provided that no action or inaction by the Company or its subsidiaries with respect to matters addressed by any provision in the following paragraph will be deemed a breach of this sentence unless such action would constitute a breach of such relevant provision in the following paragraph.

Further, the Merger Agreement also provides that, during the Pre-Closing Period, except (i) as expressly contemplated by the Merger Agreement, (ii) as set forth in the Company Disclosure Letter, (iii) as required by applicable law, including any COVID-19 measures, (iv) for any COVID-19 reasonable response or (v) as approved by Parent in writing (which approval will not be unreasonably withheld, conditioned or delayed), the Company will not, and will not permit any of its subsidiaries to:

 

•

amend the organizational documents of the Company or any of its subsidiaries (other than any immaterial amendments to the organizational documents of any subsidiary of the Company);

 

•

propose or adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of the Company or any of its subsidiaries;

 

•

issue, sell, deliver, grant, pledge, dispose of or encumber, or agree or commit to issue, sell, deliver, grant, pledge, dispose of or encumber, any Company securities, except (i) in accordance with the terms of any employment agreements or any award agreements with respect to, and upon the exercise or settlement of, RSAs, RSUs, PSUs or DSUs, in each case, in effect on May 2, 2023, as permitted by their existing terms; (ii) up to 15,000 Shares underlying new grants of RSAs, RSUs or PSUs to employees of the Company and its subsidiaries made in connection with new hires or promotions only in the ordinary course of business consistent with past practice; and (iii) as contemplated by the terms of the Merger Agreement;

 

•

except for transactions solely among the Company and its subsidiaries or solely among the Company’s subsidiaries, reclassify, split, combine, subdivide or redeem, repurchase, purchase or otherwise acquire or amend the terms of, directly or indirectly, any of its capital stock or other equity or voting interest, other than (i) the withholding of Shares to satisfy the exercise price or tax obligations incurred in connection with the settlement of RSAs, RSUs, PSUs or DSUs or (ii) the acquisition by the Company of RSAs, RSUs, PSUs or DSUs in connection with the forfeiture of such awards, in each case, in accordance with their respective terms;

 

•

(i) establish a record date for, declare, set aside or pay any dividends on, or make any other distribution (whether in cash, shares or other equity or property, including any combination thereof) in respect of any shares of capital stock or other equity or voting interest or make any other actual, constructive or deemed distribution in respect of the shares of capital stock or other equity or voting interest, except for cash dividends made by any direct or indirect wholly owned subsidiary of the Company to the Company or one of its other wholly owned subsidiaries, or (ii) pledge or encumber any shares of its capital stock or other equity or voting interest;

 

•

(i) incur, assume or suffer to exist any indebtedness, except (A) for trade payables incurred in the ordinary course of business, (B) for loans or advances to direct or indirect wholly owned subsidiaries of

 

39

the Company and (C) for indebtedness under the Company credit agreement, not to exceed an aggregate principal amount of $25,000,000 outstanding at any given time; (ii) make any loans, advances or capital contributions to, or investments in, any other person, except for (1) extensions of credit to Company franchisees and (2) advances to directors, officers and other employees, in each case of clauses (1) and (2) in the ordinary course of business consistent with past practice; or (iii) mortgage or pledge any assets, tangible or intangible, or create or suffer to exist any lien thereupon;

 

•

(i) enter into, adopt, materially amend, materially modify or terminate any material Company employee benefit plan or other employment or compensatory plan, policy, program, agreement or arrangement (an “Employee Plan”); (ii) increase the compensation, bonus, severance, retention or termination pay payable or that could become payable to any current or former directors, officers or employees, or pay any benefit not provided under any Employee Plan as in effect as of May 2, 2023; or (iii) grant, amend or modify any equity or equity-based awards (other than as permitted by the terms of the Merger Agreement), except, in each case, (A) to the extent required by applicable law or pursuant to any Employee Plan or contract in effect on May 2, 2023, in each case, in accordance with their existing terms; (B) in conjunction with actions taken in the ordinary course of business consistent with past practice for any employee below the level of Vice President; (C) in conjunction with annual renewal or plan design changes for the Employee Plans that provide health or other welfare benefits that are made in the ordinary course of business consistent with past practice; (D) in conjunction with new hires or promotions and changes in job position or status of any current employee below the level of Vice President; or (E) in connection with certain exceptions set forth in the Company Disclosure Letter; provided, however, that in no event shall the Company or its subsidiaries enter into any employment agreement without the prior written approval of Parent (which approval shall not be unreasonably withheld, conditioned or delayed);

 

•

settle any pending or threatened legal proceeding, except for the settlement of any legal proceeding against the Company or its subsidiaries that (i) is for solely monetary payments of no more than $250,000 individually and $1,000,000 in the aggregate; (ii) does not impose any material non-monetary obligations on the Company or its subsidiaries; (iii) is Transaction Litigation and settled in compliance with the terms of the Merger Agreement; or (iv) involves any dispute between one or more of Parent or Purchaser, on the one hand, and the Company, on the other hand;

 

•

materially change the Company’s or its subsidiaries’ methods, principles or practices of financial accounting or annual accounting period, except as required by GAAP or Regulation S-X of the Exchange Act (or any interpretation thereof), or by and governmental authority;

 

•

(i) except in the ordinary course of business consistent with past practice, make, revoke or change any tax election, change any method of tax accounting, file any amended tax return or take action to surrender any claim for a refund of taxes that, in each case, individually or in the aggregate, would materially and adversely affect the tax liability of the Company or any subsidiary, (ii) change the entity classification of any subsidiary of the Company or (iii) consent to any extension or waiver of the limitation period applicable to any material tax claim or assessment (other than any automatic extension of time in which to file a tax return);

 

•

incur or commit to incur any capital expenditures in excess of $500,000 individually or $2,000,000 in the aggregate other than (i) consistent with the Company’s capital expenditure budget for the fiscal year 2023, (ii) pursuant to obligations imposed by any contract in effect as of the date of this Agreement or (iii) emergency capital expenditures that are necessary to maintain the operations of the Company’s business and properties as currently conducted; provided that to the extent reasonably practicable the Company shall consult with Parent prior to incurring any emergency capital expenditures in excess of $100,000, individually;

 

•

enter into, modify in any material respect, amend in any material respect or terminate (other than any material contract, real property lease or other restaurant lease that has expired in accordance with its terms) or waive any material rights under any material contract, real property lease or other restaurant

 

40

lease except, in each case, (i) in the ordinary course of business consistent with past practice or (ii) for renewals of any material contract (other than any Company franchise agreements) on substantially similar terms;

 

•

(i) enter into any new franchise agreement with a new franchisee, (ii) renew any existing franchise agreement, subject to certain exceptions, (iii) modify in any material respect, amend in any material respect or terminate any franchise agreement except, in each case, (A) in the ordinary course of business consistent with past practice or (B) if such amendment or modification would not extend the term of such franchise agreement and would be on terms more favorable to the Company than the form of franchise agreement or deviations therefrom provided to Parent prior to May 2, 2023, or (iv) modify a franchise disclosure document or any other materials that were created for or are used in connection with the offering or selling of any franchise or entering into any development agreement;

 

•

make any material change to the terms of the Company’s or any of its subsidiaries’ system-wide or region-wide policies with respect to Company franchisees, including any existing or new policies relating to (i) system-wide or region-wide Company franchisee rent, royalty or other fees and charges, or maintenance of advertising funds, (ii) system-wide or region-wide franchisee incentives or franchisee economic assistance or (iii) system-wide or region-wide mandates relating to equipment, hardware or software; except, in each case, for updates to existing system-wide or region-wide policies in the ordinary course of business consistent with past practice;

 

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other than with respect to the matters set forth in the seventh bullet point in this section, engage in any transaction with, or enter into any agreement, arrangement or understanding with, any affiliate of the Company or other person covered by Item 404 of Regulation S-K promulgated by the SEC that would be required to be disclosed pursuant to Item 404;

 

•

acquire (by merger, consolidation or acquisition of stock or assets) any other person, or any material equity interest therein or assets thereof in any one transaction or series of related transactions, other than acquisitions (i) of raw materials, supplies, equipment or inventory from vendors or suppliers for consumption or use in the ordinary course of business consistent with past practice or (ii) that do not exceed $100,000 in the aggregate;

 

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lease, acquire or sell, or enter into any contract to lease, acquire or sell, any real property or any interest therein outside the ordinary course of business consistent with past practice for an aggregate payment that exceeds $100,000 in any one transaction or series of related transactions, in each case, without good faith consultation with Parent;

 

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sell, assign, license, lease, transfer, abandon or otherwise dispose of, or create any lien on (other than certain permitted liens), or otherwise dispose of, any of the Company’s or its subsidiaries’ tangible assets, other than such sales, assignments, licenses, leases, transfers, liens or other dispositions (i) in the ordinary course of business consistent with past practice, (ii) that are sales or other dispositions of equipment that is no longer used by the Company or its subsidiaries in the operation of their respective businesses or (iii) that have neither a fair market value of the assets nor an aggregate purchase price that exceeds $100,000 in any one transaction or series of related transactions;

 

•

sell, assign, lease, license, sublicense, terminate, abandon, waive, allow to lapse or otherwise transfer or dispose of, or create or incur any lien (other than certain permitted liens) on or grant any interest in or rights with respect to, any material intellectual property of the Company (except for licenses contained in Company franchise agreements with Company franchisees and non-exclusive licenses, in each case, entered into or granted in the ordinary course of business consistent with past practice);

 

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fail to use reasonable best efforts to maintain in full force and effect material insurance policies covering the Company and its subsidiaries and their respective directors, officers, properties, assets and businesses in a form and amount consistent with past practice in all material respects;

 

•

establish, adopt, enter into or amend any collective bargaining agreement (or recognize or certify any labor union, labor organization, works council or group of employees as the bargaining representative for any employees of the Company or any of its subsidiaries);

 

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•

implement any employee layoffs that trigger the Worker Adjustment and Retraining Notification Act; or

 

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agree, resolve or commit to take any of the actions prohibited by this paragraph.

No Solicitation; Acquisition Proposal

Except as permitted by the Merger Agreement, during the Pre-Closing Period, the Company and its subsidiaries will not, and will not instruct, authorize or knowingly permit any of their representatives to, directly or indirectly, (i) solicit, initiate, propose or knowingly induce the making, submission or announcement of, or knowingly encourage, facilitate or assist, any proposal or offer that constitutes or could reasonably be expected to lead to, an Acquisition Proposal (as defined below); (ii) furnish to any person (other than Parent, Purchaser or any designees of Parent or Purchaser) any non-public information relating to the Company or any of its subsidiaries or afford to any person access to the business, properties, assets, books, records or other non-public information, or to any personnel, of the Company or any of its subsidiaries, in any such case or with the intent to induce the making, submission or announcement of, or with the intent to encourage, facilitate or assist, or the making of any proposal or offer that could reasonably be expected to lead to, an Acquisition Proposal; (iii) participate or engage in discussions or negotiations with any person with respect to an Acquisition Proposal (or inquiries, proposals or offers or other efforts that could reasonably be expected to lead to an Acquisition Proposal by such person), in each case, other than informing such persons of the existence of the provisions contained in the Merger Agreement; (iv) approve, endorse or recommend an Acquisition Proposal; (v) enter into any letter of intent, memorandum of understanding, merger agreement, acquisition agreement, or other contract with respect to an Acquisition Proposal (each, an “Alternative Acquisition Agreement”), other than an Acceptable Confidentiality Agreement (as defined below); (vi) grant any waiver or release under or fail to enforce any standstill, confidentiality or similar agreement of the Company or any of its subsidiaries or any anti-takeover laws unless the Company Board (or a committee thereof) first determines in good faith (after consultation with its financial advisors and outside legal counsel) that the failure to take such action would reasonably be likely to be inconsistent with its fiduciary duties under applicable law; or (vii) resolve, propose or agree to do any of the foregoing. Except as permitted by the Merger Agreement, the Company and its subsidiaries will, and will use its reasonable best efforts to cause their respective representatives to, immediately following the execution of the Merger Agreement, (x) cease any solicitations, discussions, communications or negotiations with any person in connection with an Acquisition Proposal, (y) terminate all access of any person and its representatives to any electronic data room maintained by the Company in connection with its consideration of an Acquisition Proposal and (z) request in writing that each person (other than Parent and its representatives) promptly return or destroy, in accordance with the terms of any applicable confidentiality agreement, all non-public information furnished to such person or its representatives by or on behalf of the Company or any of its representatives prior to May 2, 2023, in connection with such person’s consideration of any Acquisition Proposal. For purposes of this section, the term “person” means any person or “group,” as defined in Section 13(d) of the Exchange Act, other than, with respect to the Company, Parent or its subsidiaries or representatives. The Company agrees that any breach of the terms of the Merger Agreement by any of its representatives (other than any independent contractor or employee of the Company or any of its subsidiaries who is not an officer of the Company or any of its subsidiaries) will be deemed to be a breach of the Merger Agreement by the Company.

Under the Merger Agreement an “Acquisition Proposal” means any bona fide written offer or proposal from any person (other than an offer or proposal by Parent or Purchaser) or group, relating to any (i) direct or indirect purchase or other acquisition (whether in a single transaction or a series of related transactions) by any person or group, whether from the Company or any other person(s), of Shares representing more than 20% of the Shares outstanding after giving effect to the consummation of such purchase or other acquisition, including pursuant to a tender offer or exchange offer by any person or group that, if consummated in accordance with its terms, would result in such person or group beneficially owning more than 20% of the Shares outstanding after giving effect to the consummation of such tender or exchange offer; (ii) direct or indirect purchase or other acquisition (whether in a single transaction or a series of related transactions) by any person or group, or stockholders of any such

 

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person or group, of more than 20% of the consolidated assets of the Company and its subsidiaries taken as a whole (measured by the fair market value thereof as of the date of such purchase or acquisition); or (iii) merger, consolidation, business combination, recapitalization, reorganization, liquidation, dissolution or other transaction (involving the Company or any of its subsidiaries pursuant to which any person or group, or stockholders of any such person or group, would hold Shares or other voting or equity securities of the Company representing more than 20% of the Shares outstanding after giving effect to the consummation of such transaction.

Receipt of Acquisition Proposal

Notwithstanding anything to the contrary in the Merger Agreement, at any time prior to the Offer Acceptance Time, the Company and the Company Board (or a committee thereof) may, directly or indirectly through one or more of their representatives, participate or engage in discussions or negotiations, furnish any non-public information relating to the Company or any of its subsidiaries to, or afford access to the business, properties, assets, books, records or other non-public information, or to any personnel, of the Company or any of its subsidiaries pursuant to an Acceptable Confidentiality Agreement to, any person or its representatives that has made or delivered to the Company an unsolicited Acquisition Proposal after May 2, 2023, and otherwise facilitate such Acquisition Proposal or assist such person (and its representatives and financing sources) with such Acquisition Proposal if requested by such person, in each case with respect to an Acquisition Proposal that was not the result of a material breach of the terms of the non-solicitation covenants and that the Company Board (or a committee thereof) has determined in good faith (after consultation with its financial advisors and outside legal counsel) either constitutes a Superior Proposal (as defined below) or could reasonably be expected to lead to a Superior Proposal and that failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under applicable law; provided that, subject to applicable law, the Company will provide to Parent and Purchaser any material non-public information or data that is provided to any person given such access that was not previously made available to Parent or Purchaser prior to or promptly following the time it is provided to such person. It is understood and agreed that any contacts, disclosures, discussions or negotiations permitted under this section of the Merger Agreement, by itself, will not constitute a Company Board Recommendation Change (as defined below) or otherwise constitute a basis for Parent to terminate the Merger Agreement.

Under the Merger Agreement, a “Superior Proposal” means any Acquisition Proposal (with all references to “20%” in the definition of Acquisition Proposal being deemed to be references to “50%”) on terms that the Company Board (or a committee thereof) has determined in good faith (after consultation with its financial advisors (in the case of financial matters) and outside legal counsel) (i) if consummated, would be more favorable, from a financial point of view, to the Company stockholders than the Offer, the Merger and the other transactions contemplated by the Merger Agreement (taking into account any legal, regulatory, financial, timing, financing and other aspects of such proposal that the Company Board (or a committee thereof) considers relevant) and (ii) is reasonably likely to be, and reasonably capable of being, consummated in accordance with its terms.

Under the Merger Agreement, an “Acceptable Confidentiality Agreement” means any confidentiality agreement with the Company that contains terms that are no less favorable, in the aggregate, to the Company than those contained in the Confidentiality Agreement (as defined below) (provided that, for the avoidance of doubt, any such confidentiality agreement need not contain any “standstill” or similar provision or otherwise prohibit the making of any Acquisition Proposal, and may expressly permit compliance by the Company with its obligations under the Merger Agreement).

Notice of Acquisition Proposal

From May 2, 2023, until the earlier to occur of the termination of the Merger Agreement pursuant to its terms and the Offer Acceptance Time, the Company will, as promptly as reasonably practicable (and, in any event, within 24 hours), notify Parent if any Acquisition Proposal is received from any person or any non-public

 

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information is requested from, or any discussions or negotiations are sought to be initiated or continued with, the Company, any of the Company’s subsidiaries or any of the Company’s representatives, in each case, for the purpose of making an Acquisition Proposal or that would reasonably be expected to lead to an Acquisition Proposal. Such notice must include (i) the identity of the person or group making such Acquisition Proposal, (ii) the material terms and conditions of such Acquisition Proposal or information request (including copies of any material written correspondence and any proposals, offers, requests, draft agreements, commitment letters or similar material documents relating to such Acquisition Proposal provided by such person or group) and (iii) whether the Company has provided any Company information to such person or group.

From and after May 2, 2023, the Company will keep Parent reasonably informed on a reasonably prompt basis, of any material developments, discussions or negotiations regarding any Acquisition Proposal (including any material changes thereto) and provide any information and documents required to be provided to Parent pursuant to the Merger Agreement (including any material modifications thereto and copies of any proposal or offer, including proposed agreements relating to such Acquisition Proposal provided by such person after the Company provides its initial notice of such Acquisition Proposal).

Company Board Recommendation; Company Board Recommendation Change; Intervening Event Fiduciary Exception

The Company Board has unanimously (i) determined and declared that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are advisable and in the best interests of the Company and its stockholders, (ii) approved the execution, delivery and performance by the Company of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger, (iii) resolved to recommend that the Company’s stockholders accept the Offer and tender their shares to Purchaser pursuant to the Offer and (iv) agreed and authorized that the Merger be governed by Section 251(h) of the DGCL (such recommendation the “Company Board Recommendation”).

Except as permitted under the Merger Agreement, during the Pre-Closing Period, neither the Company Board nor any committee thereof will (i) (A) fail to make or withhold, withdraw, amend or modify, or publicly propose to withhold, withdraw, amend or modify, the Company Board Recommendation in a manner adverse to Parent or Purchaser; (B) adopt, approve or recommend, or publicly propose to adopt, approve or recommend, to the Company stockholders an Acquisition Proposal; (C) fail to recommend against acceptance of any tender offer or exchange offer for Shares from any person or group (other than Parent or Purchaser) within ten business days after commencement of such offer by filing a Schedule 14D-9 pursuant to Rule 14e-2 and Rule 14d-9 promulgated under the Exchange Act; or (D) fail to publicly reaffirm the Company Board Recommendation within ten business days of Parent’s written request to do so following the public announcement of any Acquisition Proposal (or, if earlier, at least two business days prior to the then-scheduled Offer Acceptance Time, if such Acquisition Proposal has been publicly disclosed at least three business days prior to the then-scheduled Offer Expiration Time); provided that the Company shall not be required to make such public reaffirmation more than one time in respect of each Acquisition Proposal or each material publicly announced or disclosed modification thereto (any action described in clauses (A), (B), (C) or (D) a “Company Board Recommendation Change”); (ii) resolve or publicly propose to take any action described in clause (i); or (iii) approve, recommend, cause or permit, or publicly propose to approve, recommend, cause or permit, the Company or any of its subsidiaries to enter into an Alternative Acquisition Agreement.

Notwithstanding anything to the contrary set forth in the Merger Agreement, at any time prior to the Offer Acceptance Time:

 

•

Intervening Event. The Company Board (or a committee thereof) may effect a Company Board Recommendation Change in response to an Intervening Event (as defined below) if the Company Board (or a committee thereof) determines in good faith (after consultation with its financial advisors and outside legal counsel) that the failure to do so would be reasonably likely to be inconsistent with its

 

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fiduciary duties under applicable law; provided that the Company Board (or a committee thereof) will not effect such a Company Board Recommendation Change unless:

 

•

the Company has provided prior written notice to Parent at least four business days in advance to the effect that the Company Board (or a committee thereof) intends to effect a Company Board Recommendation Change, which notice will specify the basis for such Company Board Recommendation Change, including a reasonably detailed description of the facts and circumstances relating to such Intervening Event;

 

•

during such four business day period, if requested by Parent in good faith, the Company and its representatives shall have engaged in good faith negotiations with Parent regarding any modifications to the terms and conditions of this Agreement proposed by Parent in order to cause such Company Board Recommendation Change to cease to be necessary; and

 

•

the Company Board shall have considered any written proposals for modifications to the Merger Agreement that may be proposed by Parent in a form that is binding on Parent subject only to execution by the Company and, at the end of such four business day period, shall have determined in good faith (after consultation with its financial advisors and outside legal counsel) that (1) after giving effect to such modifications proposed by Parent, such changes would not change the determination of the Company Board of the need for a Company Board Recommendation Change, and (2) the failure to make the Company Board Change Recommendation would still reasonably be likely to be inconsistent with the Company Board’s fiduciary duties under applicable law; or

 

•

Superior Proposal. If the Company receives an Acquisition Proposal that did not result from a material breach of the Merger Agreement and that the Company Board (or a committee thereof) has determined in good faith (after consultation with its financial advisors and outside legal counsel) constitutes a Superior Proposal, then the Company Board (or a committee thereof) may (1) effect a Company Board Recommendation Change with respect to such Acquisition Proposal; or (2) cause the Company to terminate the Merger Agreement pursuant to its terms in order to enter into an Alternative Acquisition Agreement with respect to such Acquisition Proposal; provided that the Company Board (or a committee thereof) will not take any action described in the foregoing clauses (1) and (2) unless:

 

•

the Company Board (or a committee thereof) determines in good faith (after consultation with its financial advisors and outside legal counsel) that the failure to do so would be reasonably likely to be inconsistent with its fiduciary duties under applicable law (which determination shall not constitute a Company Board Recommendation Change or termination); and

 

•

the Company has provided prior written notice (the “Determination Notice”) to Parent at least four business days in advance (it being understood that any material revision, amendment, update or supplement to the terms or conditions of such Superior Proposal shall be deemed to constitute a new Superior Proposal and shall require a new notice but with an additional minimum of three business days (instead of at least four business days) period from the date of such notice) (any such notice period, the “Notice Period”), which notice shall not constitute a Company Board Recommendation Change or termination, to the effect that the Company Board (or a committee thereof) intends to take the actions described in foregoing clauses (1) or (2), including (y) the identity of the person or group making such Acquisition Proposal and (z) the material terms and conditions of such Superior Proposal or information request (including copies of any material written correspondence and any proposals, offers, requests, draft agreements, commitment letters or similar material documents relating to such Superior Proposal); (ii) during the Notice Period, if requested by Parent in good faith, the Company and its representatives shall have engaged in good faith negotiations with Parent regarding any modifications to the terms and conditions of this Agreement proposed by Parent in order to cause such Superior Proposal to no longer constitute a Superior Proposal; and (iii) the Company Board shall have considered any written proposals for modifications to this Agreement that may be proposed by Parent in a form that is binding on Parent subject only to execution by the Company and shall have determined in good faith (after

 

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consultation with its financial advisors and outside legal counsel) that (y) after giving effect to such modifications proposed by Parent in a form that is binding on Parent subject only to execution by the Company, such Superior Proposal still constitutes a Superior Proposal, and (z) the failure to make the Company Board Change Recommendation would still reasonably be likely to be inconsistent with the Company Board’s fiduciary duties under applicable law.

Under the Merger Agreement, an “Intervening Event” means any means any material change, development, event, effect or circumstance or change in circumstances or facts that was not known to or reasonably foreseeable by the Company Board on May 2, 2023 (or if known to the Company Board, the consequences of which were not known to or reasonably foreseeable by the Company Board as of May 2, 2023), which change, development, event, effect or circumstance or change in circumstances or facts becomes known to the Company Board prior to the Offer Acceptance Time; provided, however, that in no event shall any of the following, alone or in combination, constitute an Intervening Event: (i) the receipt, existence or terms of an Acquisition Proposal or any matter relating thereto or consequence thereof, (ii) changes in the trading price or trading volume of the Shares, in and of itself (it being understood that the facts or occurrences giving rise or contributing to such changes may be taken into account the extent otherwise permitted by this definition), (iii) meeting or exceeding any published analyst estimates or expectations of the Company’s revenue, earnings or other financial performance or results of operations for any period, in and of itself, or exceeding the Company’s internal or external budgets, plans or forecasts of its revenues, earnings or other financial performance or results of operations, in and of itself (it being understood that the facts or occurrences giving rise or contributing to the Company meeting or exceeding such estimates, projections, budgets, plans or forecasts may be taken into account to the extent otherwise permitted by this definition), or (iv) any consequence to the extent arising as a result of the Company’s breach of any covenant, agreement or obligation in the Merger Agreement to be performed by it.

Additional Covenants

Efforts to Complete the Merger; Regulatory Approvals

Each of Parent and Purchaser, on the one hand, and the Company, on the other hand, will (and will cause its respective affiliates, if applicable, to), to the extent required, (i) file with the Federal Trade Commission (the “FTC”) and the Antitrust Division of the U.S. Department of Justice (the “DOJ”) a Notification and Report Form relating to the Merger Agreement and the Offer, the Merger and the other transactions contemplated by the Merger Agreement as required by the HSR Act within ten business days following May 2, 2023; and (ii) as promptly as practicable following May 2, 2023, file such notification filings, forms and submissions, including any draft notifications in jurisdictions requiring pre-notification, with any governmental authority as are required by other applicable antitrust laws in connection with the Merger Agreement and the transactions contemplated by the Merger Agreement. Each of Parent and the Company will (A) cooperate and coordinate (and will cause their respective affiliates to cooperate and coordinate) with the other in the making of such filings; (B) supply the other (or cause the other to be supplied) with any information that may be required in order to make such filings; (C) subject to the Merger Agreement, make (or cause to be made) an appropriate response to any request or requirement for additional information by the FTC, the DOJ or the governmental authorities of any other applicable jurisdiction; and (D) take (and cause their affiliates to take) all action necessary, proper or advisable to (1) cause the expiration or termination of the applicable waiting periods pursuant to the HSR Act and any other antitrust laws applicable to the Merger Agreement or the Offer, the Merger and the other transactions contemplated by the Merger Agreement; and (2) obtain any required consents pursuant to the HSR Act and any antitrust laws applicable to the Merger Agreement or the Offer, the Merger and the other transactions contemplated by the Merger Agreement, in the case of each of clauses (1) and (2), as promptly as reasonably practicable and in any event prior to the Termination Date. Each of Parent and Purchaser (and their respective affiliates, if applicable), on the one hand, and the Company (and its affiliates, if applicable), on the other hand, will promptly inform the other of any material communication from any governmental authority regarding the Offer, the Merger and the other transactions contemplated by the Merger Agreement in connection with such filings. If any party to the Merger Agreement or affiliate thereof receives any comments or a request for additional information or documentary material from any governmental authority with respect to the Offer, the

 

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Merger and the other transactions contemplated by the Merger Agreement pursuant to the HSR Act or any other antitrust laws applicable to the Offer, the Merger and the other transactions contemplated by the Merger Agreement, then such party will make (or cause to be made), as promptly as practicable and after consultation and cooperation with the other parties in accordance with the Merger Agreement, an appropriate response to such request. Neither party will stay, toll or extend any applicable waiting period under the HSR Act, pull and refile under the HSR Act, or enter into any timing or other agreement or understanding with any governmental authority with respect to the HSR Act or any other antitrust laws applicable to the Offer, the Merger and the other transactions contemplated by the Merger Agreement without the consent of the other party, which will not be unreasonably conditioned or withheld.

Each party will (and will cause its respective subsidiaries and affiliates to, if applicable) use reasonable best efforts to cause the expiration or termination of any applicable waiting periods pursuant to the HSR Act and any other applicable antitrust laws as promptly as practicable and in any event prior to the Termination Date. Without limiting the foregoing, if and to the extent necessary to obtain expiration or termination of any applicable waiting periods pursuant to the HSR Act and any other antitrust laws applicable to the Merger Agreement or clearance of the transactions as promptly as practicable and in any event prior to the Termination Date, each of Parent and Purchaser shall (and shall cause their respective affiliates to, if applicable) offer, negotiate, commit to and effect, by consent decree, hold separate order or otherwise, and take all actions necessary to avoid or eliminate each and every impediment under the HSR Act and any other antitrust laws, including (i) the sale, divestiture, transfer, license, disposition or holding separate (through the establishment of a trust or otherwise), of any and all of the capital stock or other equity or voting interest, assets (whether tangible or intangible), rights, properties, products or businesses of the Company and its subsidiaries; (ii) the termination, modification, or assignment of existing relationships, joint ventures, Contracts, or obligations of the Company and its subsidiaries; (iii) the modification of any course of conduct regarding future operations of the Company and its subsidiaries; and (iv) any other restrictions on the activities of the Company and its subsidiaries, including the freedom of action of the Company and its subsidiaries with respect to, or their ability to retain, one or more of their respective operations, divisions, businesses, product lines, customers, assets or rights or interests or any other restriction on the activities of Parent and Purchaser (and their respective affiliates, if applicable) customarily associated with a sale or divestiture of assets (to the extent in connection with the divestiture of assets of the Company or its subsidiaries) (any such action or limitation described in clauses (i) through (iv), a “Restriction”); provided that (A) nothing shall require (1) Parent or any of its subsidiaries or the Company or any of its subsidiaries to take, accept or agree to any Restriction unless the effectiveness of such Restriction is conditioned upon the closing of the transactions contemplated by the Merger Agreement, (2) Parent or any of its subsidiaries or the Company or any of its subsidiaries to offer, commit to or effect any Restriction that, individually or in the aggregate with all other Restrictions, would be material (including with respect to the number of restaurants owned by the Company and its subsidiaries or the revenue expected to be generated by the Company and its subsidiaries) to the Company and its subsidiaries, taken as a whole (without giving effect to the Merger) or (3) Parent or any of its Affiliates to take, accept or agree to any Restriction other than (x) solely with respect to the Company and its subsidiaries or (y) customarily associated with a sale or divestiture of assets (to the extent in connection with the divestiture of assets of the Company or its subsidiaries); and (B) in no event shall the Company or its subsidiaries agree to any Restriction relating to any consents, approvals or clearances under any antitrust law without the prior written consent of Parent.

In furtherance and not in limitation of the foregoing, the Company, Parent and Purchaser will (and will cause their respective subsidiaries to), subject to any restrictions under applicable laws, (i) promptly notify the other parties to the Merger Agreement of, and, if in writing, furnish the others with copies of (or, in the case of oral communications, advise the others of the contents of) any material communication received by such person from a governmental authority or intervening party in connection with the Offer, the Merger and the other transactions contemplated by the Merger Agreement and permit the other parties to review and discuss in advance (and to consider in good faith any comments made by the other parties in relation to) any proposed draft notifications, formal notifications, filing, submission or other written communication (and any analyses, memoranda, white papers, presentations, correspondence or other documents submitted therewith) made in

 

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connection with the Offer, the Merger and the other transactions contemplated by the Merger Agreement to a governmental authority; (ii) keep the other parties informed with respect to the status of any such submissions and filings to any governmental authority in connection with the Offer, the Merger and the other transactions contemplated by the Merger Agreement and any developments, meetings or discussions with any governmental authority or intervening party in respect thereof, including with respect to (A) the receipt of any non-action, action, clearance, consent, approval or waiver, (B) the expiration of any waiting period, (C) the commencement or proposed or threatened commencement of any investigation, litigation or administrative or judicial action or legal proceeding under applicable laws, including any proceeding initiated by a private party, and (D) the nature and status of any objections raised or proposed or threatened to be raised by any governmental authority or intervening party with respect to the Offer, the Merger and the other transactions contemplated by the Merger Agreement; and (iii) not independently participate in any meeting, hearing, proceeding or discussions (whether in person, by telephone or otherwise) with or before any governmental authority or intervening party in respect of the Offer, the Merger and the other transactions contemplated by the Merger Agreement without giving the other parties reasonable prior notice of such meeting or substantive discussions and, unless prohibited by such governmental authority, the opportunity to attend or participate. However, each of the Company, Parent and Purchaser may designate any non-public or competitively sensitive information (including trade secrets) provided to any governmental authority as restricted to “outside counsel only” and any such information shall not be shared with employees, officers or directors or their equivalents of Parent or Purchaser, without approval of the Company, if the Company is providing the non-public or competitively sensitive information, or to the Company, without approval of Parent, if Parent or Purchaser is providing the non-public or competitively sensitive information; provided that each of the Company, Parent and Purchaser may redact any valuation and related information before sharing any information provided to any governmental authority with another party on an “outside counsel only” basis, and that the Company, Parent and Purchaser shall not in any event be required to share information that is entitled to legal privilege with the other parties, even on an “outside counsel only” basis, where this would cause such information to cease to be entitled to legal privilege.

If any administrative or judicial action or legal proceeding is instituted (or threatened to be instituted) by any person challenging the transactions contemplated by the Merger Agreement as violative of any applicable law, each of Parent, Purchaser and the Company will, and will cause their respective affiliates to, cooperate and use their commercially reasonable efforts to contest and resist any such action or legal proceeding, including any action or legal proceeding that seeks a temporary restraining order or preliminary injunction that would prohibit, prevent or restrict consummation of the transactions contemplated by the Merger Agreement.

Parent and Purchaser also agreed that, during the Pre-Closing Period, Parent and Purchaser shall not, and shall cause their respective subsidiaries not to, acquire or agree to acquire (by stock purchase, merger, consolidation, purchase of assets, license or otherwise) an ownership interest in any other business enterprise or assets that would reasonably be expected to prevent or materially delay the expiration or termination of any waiting period pursuant to the HSR Act or any other antitrust laws applicable to the Merger Agreement or the transactions contemplated by the Merger Agreement, the receipt of any clearance pursuant to any other laws applicable to the Merger Agreement or the transactions contemplated by the Merger Agreement, or the consummation of the transactions contemplated by the Merger Agreement.

Section 16 Matters

Prior to the effective time, the Company will be permitted to take all such actions as may be reasonably necessary or advisable to cause the transactions contemplated by the Merger Agreement, and any dispositions of equity securities of the Company (including derivative securities) (including the disposition, cancellation or deemed disposition and cancellation of Shares, RSAs, RSUs, PSUs or DSUs) in connection with the transactions contemplated by the Merger Agreement by each individual who is a director or executive officer of the Company, to be exempt pursuant to Rule 16b-3 under the Exchange Act.

 

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Indemnification and Insurance

Parent and its subsidiaries shall (and Parent shall cause the surviving corporation and its subsidiaries to) honor and fulfill, in all respects, the obligations of the Company and its subsidiaries (i) pursuant to the organizational documents of the Company and its subsidiaries, as in effect on May 2, 2023, and (ii) under any indemnification agreements in effect on such date between the Company and any of its subsidiaries or affiliates, on the one hand, and any of their respective current or former directors, officers, employees or agents (and any person who becomes a director, officer, employee or agent of the Company or any of its subsidiaries prior to the effective time), on the other hand (each, together with such person’s heirs, executors and administrators, an “Indemnified Person” and, collectively, the “Indemnified Persons”), arising out of or relating to actions or omissions in their capacity as such occurring up to and including the effective time, including in connection with the approval of the Merger Agreement and the transactions contemplated by the Merger Agreement. In addition, during the period commencing at the effective time and ending on the sixth anniversary of the effective time, Parent will (and Parent will cause the surviving corporation’s and its subsidiaries’ to) cause the organizational documents of the surviving corporation and its subsidiaries to contain provisions with respect to indemnification, exculpation and the advancement of expenses of the Indemnified Persons that are at least as favorable as the indemnification, exculpation and advancement of expenses provisions set forth in the organizational documents of the subsidiaries of the Company, as of May 2, 2023. During such six-year period, such provisions may not be repealed, amended or otherwise modified in any manner that would be adverse to any Indemnified Person except as required by applicable law.

Without limiting the generality of the previous paragraph, during the period commencing at the effective time and ending on the sixth anniversary of the effective time, Parent and its subsidiaries will, and Parent will cause the surviving corporation to indemnify and hold harmless, to the fullest extent permitted by applicable law, each current or former director or officer of the Company and its subsidiaries from and against any costs, fees and expenses, judgments, fines, penalties, losses, claims, damages, liabilities and amounts paid in settlement or compromise in connection with any legal proceeding, whether civil, criminal, administrative or investigative, whenever asserted, to the extent that such legal proceeding arises, directly or indirectly, out of or pertains, directly or indirectly, to (i) the fact that, at or prior to the effective time, such person is or was a director or officer of the Company or any of its subsidiaries, is or was serving at the request of the Company or any of its subsidiaries as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise, including service with respect to an employee benefit plan; (ii) any action or omission, or alleged action or omission, in such person’s capacity as a director or officer of the Company or any of its subsidiaries at or prior to or at the effective time; and (iii) the transactions contemplated by the Merger Agreement, as well as any actions taken by the Company, Parent or Purchaser with respect thereto, except that if, at any time prior to the sixth anniversary of the effective time, any current or former director or officer of the Company and its subsidiaries delivers to Parent a written notice asserting a claim for indemnification pursuant to this paragraph, then the claim asserted in such notice will survive the sixth anniversary of the effective time until such claim is fully and finally resolved. In the event of any such legal proceeding, Parent and its subsidiaries will, and Parent will cause the surviving corporation to, advance all fees and expenses (including reasonable attorneys’ fees and investigation expenses) as incurred by such person in the defense of such legal proceeding; provided that such person agrees in advance to return any such funds if a court of competent jurisdiction determines in a final, nonappealable judgment that such person is not ultimately entitled to indemnification. Notwithstanding anything to the contrary in the Merger Agreement, none of Parent, the surviving corporation nor any of their respective affiliates will settle or otherwise compromise or consent to the entry of any judgment with respect to, or otherwise seek the termination of, any legal proceeding for which indemnification may be sought by a current or former director or officer of the Company and its subsidiaries pursuant to the Merger Agreement unless such settlement, compromise, consent or termination includes an unconditional release of the applicable person from all liability arising out of such legal proceeding. Any determination required to be made with respect to whether the conduct of any current or former director or officer of the Company and its subsidiaries complies or complied with any applicable standard will be made by independent legal counsel selected by the surviving corporation (which counsel will be reasonably acceptable to such Indemnified Person), the fees and expenses of which will be paid by the surviving corporation.

 

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During the period commencing at the effective time and ending on the sixth anniversary of the effective time, the surviving corporation will (and Parent will cause the surviving corporation to) maintain in effect the Company’s directors’ and officers’ liability insurance in effect at the Closing (“D&O Insurance”) in respect of acts or omissions occurring at or prior to the effective time on terms (including with respect to coverage, conditions, retentions, limits and amounts) that are equivalent to those of the D&O Insurance. In satisfying its obligations pursuant to the first sentence of this paragraph, the surviving corporation will not be obligated to pay annual premiums in excess of 300% of the amount paid by the Company for coverage for its last full fiscal year (such 300% amount, the “Maximum Annual Premium”). If the annual premiums of such insurance coverage exceed the Maximum Annual Premium, then the surviving corporation shall be obligated to obtain a policy with the greatest coverage available for a cost not exceeding the Maximum Annual Premium from an insurance carrier with the same or better credit rating as the Company’s existing directors’ and officers’ liability insurance carrier as of the Closing. In lieu of the foregoing obligations, prior to the effective time the Company may purchase, after prior consultation with Parent, a prepaid “tail” policy with respect to the D&O Insurance from an insurance carrier with the same or better credit rating as the Company’s directors’ and officers’ liability insurance carrier as of the Closing so long as the cost for such “tail” policy does not exceed the Maximum Annual Premium. If the Company elects to purchase such a “tail” policy prior to the effective time, the surviving corporation shall (and Parent shall cause the surviving corporation to) maintain such “tail” policy in full force and effect for a period of no less than six years after the effective time and continue to honor its obligations thereunder. If the Company is unable to obtain the “tail” policy and Parent or the surviving corporation are unable to obtain the insurance described in this paragraph for an annual premium less than or equal to the Maximum Annual Premium, Parent shall cause the surviving corporation to instead obtain as much comparable insurance as possible for an annualized premium equal to the Maximum Annual Premium.

Employee Matters

Under the Merger Agreement, Parent acknowledges that a “change of control” (or similar phrase) within the meaning of each applicable Employee Plan will occur as of the effective time. Subject to the terms of the Merger Agreement, nothing will prohibit the surviving corporation from amending or terminating any such Employee Plans or compensation or severance arrangements in accordance with their terms, to comply with terms of the Merger Agreement or as required pursuant to applicable law.

Notwithstanding anything to the contrary set forth in the Merger Agreement, each individual who is an employee of the Company or any of its subsidiaries immediately prior to the effective time and continues to be an employee of Parent or one of its subsidiaries (including the surviving corporation) immediately following the effective time (a “Continuing Employee”) (i) who is a party to an employment agreement and (ii) whose employment agreement provides an entitlement to a pro-rata bonus upon a qualifying termination of employment (such Continuing Employee, an “Applicable Employee”) will receive: (A) the Prorated Bonus (as defined below); (B) to the extent such Applicable Employee’s employment is terminated due to a qualifying termination, any Remaining Bonus (as defined below) ((A) and (B), collectively, the “Applicable Employee Bonus”); and (C) to the extent such Applicable Employee’s employment is terminated due to a qualifying termination, an amount, if any, equal to (x) the pro-rata bonus such Applicable Employee would be entitled to under his or her employment agreement minus (y) the Applicable Employee Bonus that was paid. Prior to the effective time, the Company shall amend the Bonus Program to eliminate the pro-rata bonus payable to an Applicable Employee upon a Change in Corporate Control pursuant to Section 16 of the Bonus Program unless such Applicable Employee enters into an amendment to his or her employment agreement to effectuate the preceding sentence.

From the effective time through December 31 of the year in which the effective time occurs (the “Continuation Period”), the surviving corporation and its subsidiaries shall (and Parent shall cause the surviving corporation and its subsidiaries to) provide each Continuing Employee with an annual base salary or base wage rate, as applicable, that is no less favorable than that provided to such Continuing Employee as of the effective time. From the end of the Continuation Period through the first anniversary of the effective time, the surviving corporation and its subsidiaries shall (and Parent shall cause the surviving corporation and its subsidiaries to)

 

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provide each Continuing Employee total compensation, consisting of salary or wages plus a target bonus opportunity under Parent’s bonus plan as then in effect plus an equity grant (if any) that, considered in the aggregate, is consistent with the total compensation proved to similarly situated employees of Parent and its subsidiaries.

During the Continuation Period, the surviving corporation and its subsidiaries shall (and Parent shall cause the surviving corporation and its subsidiaries to) provide each Continuing Employee who is not a participant in the Company’s Home Office Bonus Program (the “Bonus Program”) at the effective time with a cash incentive opportunity no less favorable than that in effect at the effective time.

The surviving corporation and its subsidiaries shall (and Parent shall cause the surviving corporation and its subsidiaries to) provide each Continuing Employee who is a participant in the Bonus Program at the effective time (the “HQ Employees”) with payments under the Bonus Program for the year in which the effective time occurs as follows: (A) pay to each HQ Employee, within thirty (30) days following the effective time, a prorated bonus payable to such HQ Employee (at the target level), with such proration based on the relative portion of the year during which such Continuing Employee was employed with the Company or its affiliates prior to the effective time (the “Prorated Bonus”), and (B) pay to each HQ Employee who remains employed with Parent, the surviving corporation or their respective affiliates through the end of the Continuation Period, no later than March 15 after such date, an amount equal to (x) 100% of the bonus payable to such Continuing Employee under the Bonus Program for such year (at the target level) minus (y) the Prorated Bonus of such HQ Employee (the “Remaining Bonus”). Notwithstanding the foregoing, if an HQ Employee’s employment is terminated without “Cause” or due to the HQ Employee’s resignation with “Good Reason” (as each term is defined in the Company Disclosure Letter) during the Continuation Period, Parent shall, or shall cause the surviving corporation to, pay to such HQ Employee at the same time as if such HQ Employee had remained employed through the end of the Continuation Period, a prorated portion of the Remaining Bonus that would otherwise be paid if such HQ Employee had remained employed through the end of the Continuation Period, with such proration based on the number of days such HQ Employee was employed with the Company, Parent, the surviving corporation or any of their respective affiliates following the effective time.

During the Continuation Period, the surviving corporation and its subsidiaries shall (and Parent shall cause the surviving corporation and its subsidiaries to) continue to provide to each Continuing Employee with such employee benefits, excluding severance, as such Continuing Employee is entitled as of immediately prior to the effective time in accordance the terms of the applicable Employee Plans as in effect immediately prior to the effective time.

From the end of the Continuation Period until the first anniversary of the effective time, the surviving corporation and its subsidiaries shall (and Parent shall cause the surviving corporation and its subsidiaries to) provide each Continuing Employee with employee benefits that are substantially comparable in the aggregate to those provided to other similarly situated employees of Parent and its subsidiaries.

To the extent that any Employee Plans or any employee benefit plans sponsored by the surviving corporation and its subsidiaries are made available to any Continuing Employee at or after the effective time (the “New Plans”), each Continuing Employee will receive credit for all service with the Company and its subsidiaries before the effective time for purposes of eligibility to participate, vesting and entitlement to benefits where length of service is relevant (including for purposes of vacation or other paid time off accrual and severance entitlement), except that such service need not be credited to the extent that it would result in duplication of coverage or benefits for the same period of service. In addition, (i) each such Continuing Employee will be immediately eligible to participate, without any waiting period, in any and all New Plans to the extent that such waiting period was satisfied under a similar or comparable Company employee benefit plan in which such Continuing Employee participated immediately before the effective time (such plans, collectively, the “Old Plans”); (ii) for purposes of each New Plan providing life insurance, medical, dental, pharmaceutical, vision or disability benefits to any Continuing Employee, the surviving corporation shall cause all waiting periods, pre-existing condition exclusions, evidence of insurability requirements and actively-at-work or similar

 

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requirements of such New Plan to be waived for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such Continuing Employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan; and (iii) credit the accounts of such Continuing Employees pursuant to any New Plan that is a flexible spending plan with any unused balance in the account of such Continuing Employee. Any vacation or paid time off accrued but unused by a Continuing Employee as of immediately prior to the effective time shall be credited to such Continuing Employee following the effective time, and shall be subject to the Company’s accrual limits and other forfeiture provisions through the end of the Continuation Period. From and after the effective time, the surviving corporation and its subsidiaries shall (and Parent shall cause the surviving corporation and its subsidiaries to) provide severance benefits to each Continuing Employee in accordance with Parent’s severance plans as provided to the Company by Parent.

Transaction Litigation

During the period from May 2, 2023, until the earlier to occur of the termination of the Merger Agreement pursuant to terms thereof and the effective time, the Company will provide Parent with prompt notice of any legal proceeding commenced or threatened against a party to the Merger Agreement or any of its subsidiaries or affiliates (or their respective directors, members, managers, partners or officers) or otherwise relating to, involving or affecting such party or any of its subsidiaries or affiliates, in each case in connection with, arising from or otherwise relating to the Offer, the Merger and the other transactions contemplated by the Merger Agreement, other than any legal proceeding that is (i) solely among all or some of the parties to the Merger Agreement and (ii) related to the Merger Agreement or the Offer, the Merger and the other transactions contemplated by the Merger Agreement (collectively, the “Transaction Litigation”) (including by providing copies of all pleadings with respect thereto) and keep Parent reasonably informed with respect to the status thereof. The Company will (a) give Parent the opportunity to participate in (but not control) the defense, settlement or prosecution of any Transaction Litigation and (b) consult with Parent with respect to the defense, settlement and prosecution of any Transaction Litigation. The Company may not compromise, settle or come to an arrangement regarding, or agree to compromise, settle or come to an arrangement regarding, any Transaction Litigation unless Parent has consented thereto in writing (which consent will not be unreasonably withheld, conditioned or delayed).

Stock Exchange Delisting

Prior to the effective time, the Company will cooperate with Parent and use its reasonable best efforts to take, or cause to be taken, all actions and do, or cause to be done, all things reasonably necessary, proper or advisable on its part pursuant to applicable law and the rules and regulations of Nasdaq to cause (a) the delisting of the Shares from Nasdaq as promptly as practicable after the effective time and (b) the deregistration of the Shares pursuant to the Exchange Act as promptly as practicable after such delisting.

Conditions of the Offer

See “Section 15 — Conditions of the Offer.”

Conditions to the Merger

The respective obligations of Parent, Purchaser and the Company to consummate the transactions contemplated by Merger Agreement are subject to the satisfaction or waiver (where permissible pursuant to applicable law) at or prior to the effective time of each of the following conditions:

 

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Purchaser (or Parent on Purchaser’s behalf) will have accepted for payment all of the Shares validly tendered pursuant to the Offer and not validly withdrawn; and

 

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no governmental authority of competent jurisdiction will have enacted, issued, promulgated, enforced or entered any federal, state, local, foreign or multinational law, rule or regulation or order, judgment

 

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or injunction, whether civil, criminal or administrative (whether temporary, preliminary or permanent), that prohibits, restricts, enjoins or otherwise makes illegal the consummation of the Offer or the Merger and is continuing in effect.

Termination

The Merger Agreement may be validly terminated only as follows:

 

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at any time prior to the Offer Acceptance Time by mutual written agreement of Parent and the Company;

 

•

by either Parent or the Company, if any (i) permanent injunction or other judgment or order issued by any court or other legal or regulatory restraint or prohibition preventing the consummation of the Merger or the Offer is in effect that, in each case, prohibits, makes illegal or enjoins the consummation of the Merger or the Offer and has become final and non-appealable; or (ii) law or final, non-appealable Order applicable to the Merger or the Offer prohibits, makes illegal or enjoins the consummation of the Merger or the Offer;

 

•

by either Parent or the Company, at any time prior to the Offer Acceptance Time, if the Closing has not occurred by 11:59 p.m., New York City time, on November 2, 2023 (the “Termination Date”; provided, however, that if as of the Termination Date the HSR Condition and the Legal Restraint Condition (in the case of the Legal Restraint Condition, solely with respect to a law or order relating to antitrust laws) shall not have been satisfied or validly waived by Parent or Purchaser, to the extent waivable in accordance with the terms of the Merger Agreement and applicable law by Parent or Purchaser, then the Termination Date shall automatically be extended until 11:59 p.m., New York City time, on March 4, 2024, and all references to the Termination Date in the Merger Agreement will be so extended); provided, further, that the right to terminate the Merger Agreement pursuant to this bullet point will not be available (i) to the Company, if Parent has the right to terminate the Merger Agreement pursuant to the fifth bullet point of this section, (ii) to Parent, if the Company has the right to terminate the Merger Agreement pursuant to the sixth bullet point of this section, or (iii) to any party whose action or failure to act (which action or failure to act constitutes a breach by such party of the Merger Agreement) has been the primary cause of, or primarily resulted in, either (A) the failure to satisfy the conditions to the obligations of the terminating Party to consummate the Merger prior to the Termination Date, or (B) the failure of the effective time to have occurred prior to the Termination Date;

 

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by Parent, at any time prior to the Offer Acceptance Time, if the Company or the Company Board (i) has failed to include the Company Board Recommendation in the Schedule 14D-9 when mailed, or (ii) has effected a Company Board Recommendation Change;

 

•

by Parent, at any time prior to the Offer Acceptance Time, if the Company has breached or failed to perform in any material respect any of its representations, warranties, covenants or other agreements contained in the Merger Agreement, which breach or failure to perform would result in a failure of the Company Representations Condition (as defined below) or the Obligations Condition (as defined below) of the Merger Agreement except that if such breach is capable of being cured by the Termination Date, Parent shall not be entitled to terminate the Merger Agreement prior to the delivery by Parent to the Company of written notice of such breach, delivered at least thirty days prior to such termination, stating Parent’s intention to terminate the Merger Agreement pursuant to this bullet point and the basis for such termination, it being understood that Parent shall not be entitled to terminate the Merger Agreement if such breach has been cured prior to termination (to the extent capable of being cured); provided that Parent will not have the right to terminate the Merger Agreement pursuant to this bullet point if it is then in breach of any representations, warranties, covenants or other agreements contained in the Merger Agreement such that the Company has the right to terminate the Merger Agreement pursuant to the sixth bullet point in this section;

 

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•

by the Company, at any time prior to the Offer Acceptance Time, if Parent or Purchaser has breached or failed to perform in any material respect any of its respective representations, warranties, covenants or other agreements contained in the Merger Agreement, which breach or failure to perform would reasonably be expected to, individually or in the aggregate, prevent or materially delay the consummation of the transactions contemplated by the Merger Agreement or have a material adverse effect on the ability of Parent or Purchaser to perform their respective covenants and obligations under the Merger Agreement or to consummate the transactions contemplated by the Merger Agreement, except that if such breach is capable of being cured by the Termination Date, the Company shall not be entitled to terminate the Merger Agreement pursuant to this bullet point prior to the delivery by the Company to Parent of written notice of such breach, delivered at least thirty days prior to such termination, stating the Company’s intention to terminate the Merger Agreement pursuant to this bullet point and the basis for such termination, it being understood that the Company shall not be entitled to terminate the Merger Agreement if such breach has been cured prior to termination (to the extent capable of being cured); provided that the Company will not have the right to terminate the Merger Agreement pursuant to this bullet point if it is then in breach of its representations, warranties, covenants or other agreements contained in the Merger Agreement such that Parent has the right to terminate the Merger Agreement pursuant to the fifth bullet point in this section;

 

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by the Company, if Purchaser fails to commence the Offer within ten business days after May 2, 2023; provided that the Company may not terminate the Merger Agreement pursuant to this bullet point if such failure to commence the Offer is principally caused by the material breach by the Company of any covenant or obligation of the Company set forth in the Merger Agreement;

 

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by the Company, at any time prior to the Offer Acceptance Time, in order to enter into an Alternative Acquisition Agreement providing for a Superior Proposal in accordance with the Merger Agreement; provided that the Company will pay, or cause to be paid, to Parent in immediately available funds the Company Termination Fee (as defined below) in accordance with the Merger Agreement prior to or concurrently with such termination; or

 

•

by the Company (i) if following the expiration of the Offer, Parent or Purchaser will have failed to accept for payment all Shares validly tendered (and not validly withdrawn) pursuant to the Offer within the period specified in the Merger Agreement or (ii) if following the Offer Acceptance Time, Parent or Purchaser will have failed to purchase all Shares validly tendered (and not validly withdrawn) pursuant to the Offer within the period specified in the Merger Agreement.

Expenses

Except as set forth in the Merger Agreement, all fees and expenses incurred in connection with the Merger Agreement and the Offer, the Merger and the other transactions contemplated by the Merger Agreement will be paid by the party incurring such fees and expenses whether or not the Offer, the Merger and the other transactions contemplated by the Merger Agreement are consummated. For the avoidance of doubt, Parent or the surviving corporation will be responsible for all fees and expenses of the Payment Agent.

Company Payment

If (i) the Merger Agreement is validly terminated pursuant to the third bullet point in the Termination section above (but in the case of a termination by the Company, only if at such time Parent would not be prohibited from terminating the Merger Agreement pursuant to the third bullet point); (ii) following the execution and delivery of the Merger Agreement and prior to such termination of the Merger Agreement, an Acquisition Proposal will have been publicly announced and not withdrawn or otherwise abandoned; and (iii) within twelve months following such termination of the Merger Agreement, either (1) an Acquisition Proposal is consummated or (2) the Company enters into a definitive agreement providing for the consummation of an Acquisition Proposal (which Acquisition Proposal need not be the same Acquisition Proposal referenced in clause (ii)) and such Acquisition Proposal is subsequently consummated, then the Company will promptly (and

 

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in any event within three business days) after such consummation pay, or cause to be paid, to Parent $23,900,000 (the “Company Termination Fee”) by wire transfer of immediately available funds to an account or accounts designated in writing by Parent. For purposes of this paragraph, all references to “20%” in the definition of “Acquisition Proposal” will be deemed to be references to “50%.”

If the Merger Agreement is validly terminated pursuant to the fourth bullet point in the Termination section above, then the Company must promptly (and in any event within three business days) following such termination pay, or cause to be paid, to Parent the Company Termination Fee by wire transfer of immediately available funds to an account or accounts designated in writing by Parent.

If the Merger Agreement is validly terminated pursuant to the eighth bullet point in the Termination section above, then the Company must prior to or concurrently with such termination pay, or cause to be paid, to Parent the Company Termination Fee by wire transfer of immediately available funds to an account or accounts designated in writing by Parent.

The parties to the Merger Agreement acknowledge and agree that in no event will the Company be required to pay the Company Termination Fee on more than one occasion, whether or not the Company Termination Fee may be payable pursuant to more than one provision of the Merger Agreement at the same or at different times and upon the occurrence of different events.

Amendment; Extension; Waiver

Subject to applicable law and subject to the other provisions of the Merger Agreement, the Merger Agreement may be amended by Parent, Purchaser, and the Company at any time prior to the Offer Acceptance Time by execution of an instrument in writing signed on behalf of each of Parent, Purchaser and the Company (pursuant to authorized action by the Company Board (or a committee thereof)).

At any time and from time to time prior to the Offer Acceptance Time, Parent and the Company may, to the extent legally allowed and except as otherwise set forth in the Merger Agreement:

 

•

extend the time for the performance of any of the obligations or other acts of the other party or parties, as applicable;

 

•

waive any inaccuracies in the representations and warranties of the other party or parties contained in the Merger Agreement or in any document delivered pursuant to the Merger Agreement; and

 

•

subject to the requirements of applicable law, waive compliance by the other party or parties to the Merger Agreement with any of the agreements or conditions contained therein applicable to such party (it being understood that Parent and Purchaser will be deemed to be a single party solely for purposes of any such waiver).

Any agreement on the part of a party to any such extension or waiver will be valid only if set forth in an instrument in writing signed by such party. Any delay in exercising any right pursuant to the Merger Agreement will not constitute a waiver of such right.

Limitations on Remedies

Except in the case of fraud or a willful breach, Parent’s receipt of the Company Termination Fee to the extent owed pursuant to the Merger Agreement will be the sole and exclusive remedy of Parent and Purchaser and each of their respective affiliates against (A) the Company, its subsidiaries and each of their respective affiliates; and (B) the former, current and future holders of any equity, controlling persons, directors, officers, employees, agents, attorneys, affiliates, members, managers, general or limited partners, stockholders and assignees of each of the Company, its subsidiaries and each of their respective affiliates (collectively, the “Company Related Parties”) in respect of the Merger Agreement, any agreement executed in connection with the transactions contemplated thereby and, upon payment of such amount (to the extent owed), none of the Company Related Parties will have any further liability or obligation to Parent or Purchaser relating to or arising out of the

 

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Merger Agreement, any agreement executed in connection with the Merger Agreement, or the transactions contemplated thereby (except that the parties (or their affiliates) will remain obligated with respect to the Confidentiality Agreement and the Merger Agreement, as applicable).

Specific Performance

The parties to the Merger Agreement acknowledge and agree that (i) irreparable damage for which monetary damages, even if available, would not be an adequate remedy would occur in the event that the parties do not perform the provisions of the Merger Agreement (including any party failing to take such actions as are required of it thereunder in order to consummate the transactions contemplated by the Merger Agreement) in accordance with its specified terms or otherwise breach such provisions; (ii) the parties will be entitled, in addition to any other remedy to which they are entitled at law or in equity, to an injunction, specific performance and other equitable relief to prevent breaches (or threatened breaches) of the Merger Agreement and to enforce specifically the terms and provisions thereof; (iii) certain provisions of the Merger Agreement are not intended to and do not adequately compensate Parent and Purchaser for the harm that would result from a breach of the Merger Agreement by the Company, and will not be construed to diminish or otherwise impair in any respect Parent’s or Purchaser’s right to an injunction, specific performance and other equitable relief; and (iv) the right of specific enforcement is an integral part of the Offer, the Merger and the other transactions contemplated by the Merger Agreement and without that right, neither the Company nor Parent would have entered into the Merger Agreement.

The parties to the Merger Agreement agree not to raise any objections, on the basis that monetary damages would be a sufficient remedy, to (i) the granting of an injunction, specific performance or other equitable relief to prevent or restrain breaches or threatened breaches of the Merger Agreement by the Company, on the one hand, or Parent and Purchaser, on the other hand; and (ii) the specific performance of the terms and provisions of the Merger Agreement to prevent breaches or threatened breaches of, or to enforce compliance with, the covenants, obligations and agreements of Parent and Purchaser pursuant to the Merger Agreement. Any party seeking an injunction or injunctions to prevent breaches of the Merger Agreement and to enforce specifically the terms and provisions of the Merger Agreement will not be required to provide any bond or other security in connection with such injunction or enforcement, and each party irrevocably waives any right that it may have to require or request the obtaining, furnishing or posting of any such bond or other security. The parties further agree that (x) by seeking the remedies provided for in the Merger Agreement, a party will not in any respect waive its right to seek any other form of relief that may be available to a party under the Merger Agreement, and (y) nothing set forth in the Merger Agreement will require any party to institute any legal proceeding for (or limit any party’s right to institute any legal proceeding for) specific performance prior to or as a condition to exercising any termination right under the Merger Agreement (or prevent a party from pursuing damages after such termination), nor will the commencement of any legal proceeding pursuant to the Merger Agreement or anything set forth in the Merger Agreement restrict or limit any party’s right to terminate the Merger Agreement in accordance with the terms of the Merger Agreement or pursue any other remedies under the Merger Agreement that may be available then or thereafter.

Governing Law

The Merger Agreement and all actions, proceedings or counterclaims (whether based on contract, tort or otherwise) based on, arising out of or relating to the Merger Agreement or the actions of Parent, Purchaser or the Company in the negotiation, administration, performance and enforcement thereof, will be governed by, and construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of laws provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

Jurisdiction

Each of the parties to the Merger Agreement (i) irrevocably consents to the service of the summons and complaint and any other process (whether inside or outside the territorial jurisdiction of the Chosen Courts (as

 

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defined below)) in any legal proceeding based on, arising out of or relating to the Merger Agreement or the Offer, the Merger and the other transactions contemplated by the Merger Agreement, for and on behalf of itself or any of its properties or assets, in accordance with the notice requirements of the Merger Agreement or in such other manner as may be permitted by applicable law, and nothing in this section will affect the right of any party to serve legal process in any other manner permitted by applicable law; (ii) irrevocably and unconditionally consents and submits itself and its properties and assets in any legal proceeding to the exclusive general jurisdiction of the Court of Chancery of the State of Delaware and any state appellate court therefrom within the State of Delaware (or, if the Court of Chancery of the State of Delaware declines to accept jurisdiction over a particular matter, any other state or federal court within the State of Delaware) (the “Chosen Courts”) in the event that any dispute or controversy based on, arises out of or relating to the Merger Agreement or the Offer, the Merger and the other transactions contemplated by the Merger Agreement; (iii) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request from any court, including the Chosen Courts; (iv) agrees that any legal proceeding based on, arising out of or relating to the Merger Agreement or the Offer, the Merger or any other transaction contemplated by the Merger Agreement will be brought, tried and determined only in the Chosen Courts; (v) waives any objection that it may now or hereafter have to the venue of any such legal proceeding in the Chosen Courts or that such legal proceeding was brought in an inconvenient or otherwise improper court and agrees not to plead or argue the same; and (vi) agrees that it will not bring any legal proceeding based on, arising out of or relating to the Merger Agreement or the Offer, the Merger or any other transaction contemplated by the Merger Agreement in any court other than the Chosen Courts. Each of Parent, Purchaser and the Company agrees that a final judgment in any legal proceeding in the Chosen Courts will be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by applicable law.

Other Agreements

Confidentiality Agreement

On March 8, 2023, the Company and Parent entered into a confidentiality agreement (the “Confidentiality Agreement”). Under the terms of the Confidentiality Agreement, Parent agreed to, among other things, (i) use the confidential information solely for the purpose of evaluating, negotiating and/or implementing a possible negotiated transaction between the Company and Parent; (ii) only provide such confidential information to Parent’s representatives who needed such confidential information for the purpose of evaluating, negotiating and implementing the transaction, who were informed by Parent of the confidential nature of the confidential information and of their obligations under the Confidentiality Agreement, and who were instructed that such information was to be kept confidential and not to be used for any purpose other than the evaluation, negotiation and implementation of the transaction; and (iii) not disclose to any person the existence of the Confidentiality Agreement, the fact that confidential information was made available to Parent or its representatives, the evaluation of the potential transaction, the fact that discussions or negotiations were taking place regarding the potential transaction, and any of the terms, conditions or other facts with respect to the potential transaction being contemplated by the parties, including, without limitation, the status or termination thereof.

Under the terms of the Confidentiality Agreement, Parent also agreed, among other things, to certain “standstill” provisions for the benefit of the Company that expire eighteen months from the date of the Confidentiality Agreement, including restrictions that provide that Parent and its affiliates will not, directly or indirectly, without the prior written invitation of the Company, (i) acquire, offer or propose (except a nonpublic proposal to the Company’s board of directors that would not require the Company or any other person to make any public announcement or other disclosure with respect thereto) to acquire, solicit an offer to sell or agree to acquire, directly or indirectly, alone or in concert with others, by purchase or otherwise, (A) any economic interest in, or any direct or indirect right to direct the voting or disposition of any securities of the Company, whether or not any of the foregoing would give rise to beneficial ownership (as such term is used in Rule 13d-3 and Rule 13d-5 under the Exchange Act), (B) any other direct or indirect interest in any securities of the Company or any direct or indirect rights, warrants or options to acquire, or securities convertible into or exchangeable for, any securities of the Company, (C) any contracts or rights in any way related to the acquisition

 

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or price of securities or interests of the Company (whether beneficially, constructively or synthetically through any derivative or trading position or otherwise) (each of clauses (B) and (C), “Derivative Securities”) or (D) any material assets, indebtedness or properties of the Company; (ii) make, or in any way participate in, directly or indirectly, alone or in concert with others, any “solicitation” of “proxies” (as such terms are used in the proxy rules of the Securities and Exchange Commission promulgated pursuant to Section 14 of the Exchange Act) or seek to advise or influence in any manner whatsoever any person with respect to the voting of any voting securities of the Company, or seek the consent of any person with respect to any securities or interests of the Company; (iii) form, join or any way participate in a “group” within the meaning of Section 13(d)(3) of the Exchange Act with respect to any voting securities of the Company or otherwise in connection with any of the actions prohibited by the terms of the Confidentiality Agreement; (iv) arrange, or in any way participate, directly or indirectly, in any financing for the purchase of any securities or interests of the Company or any Derivative Securities; (v) make any public announcement with respect to, or solicit or submit a proposal for, or offer of (with or without conditions), any merger, consolidation, business combination, tender or exchange offer, recapitalization, reorganization, purchase or license of a material portion of the assets or properties of, or other similar extraordinary transaction involving, the Company, its affiliates or its or their respective securities or interests, except a nonpublic proposal to the Company’s board of directors that would not require the Company or any other person to make any public announcement or other disclosure with respect thereto; (vi) otherwise seek, alone or in concert with others, to control, change or influence the management, board of directors or policies of the Company or nominate any person as a director who is not nominated by the then-incumbent directors, or convene a meeting of the shareholders of the Company or propose any matter to be voted upon by the shareholders of the Company; (vii) make any request or proposal to amend, waive or terminate any of the standstill provisions set forth in this paragraph; (viii) announce an intention to do, or enter into any arrangement or understanding or discussions with any other person(s) to do, any of the actions restricted or prohibited by the terms of the Confidentiality Agreement; or (ix) take any action that might result in the Company having to make public announcement regarding any of the matters referred to in this paragraph. The Confidentiality Agreement provided that the “standstill” provisions would not prevent the Company or its affiliates or representatives from making a competing proposal with respect to a potential transaction if, at any time from and after the date of the Confidentiality Agreement, a third party enters into a definitive agreement with the Company to acquire (or publicly offers to acquire in an offer that has been recommended by the Company’s board of directors) more than 50% of the outstanding capital stock of the Company or more than 50% of the consolidated assets of the Company.

This summary of the Confidentiality Agreement is only a summary and is qualified in its entirety by reference to the Confidentiality Agreement, which is filed as Exhibit (d)(2) to the Schedule TO and is incorporated herein by reference.

Tender and Support Agreement

Concurrently with the execution of the Merger Agreement, Parent, Company and Purchaser entered into a Tender and Support Agreement (as it may be amended from time to time, the “Tender and Support Agreement”), dated as of May 2, 2023, with certain officers and directors of the Company (collectively, the “Supporting Stockholders”), pursuant to which the Support Stockholders agreed to tender Shares representing approximately 4.4% of the Company’s outstanding Shares. Parent and Purchaser expressly disclaim beneficial ownership of all Shares covered by the Tender and Support Agreement.

The Tender and Support Agreement provides that, as promptly as practicable after, but in no event later than the later of (a) ten business days after the later of (i) the commencement (within the meaning of Rule 14d-2 under the Exchange Act) of the Offer or (ii) the date of delivery of the letter of transmittal with respect to the Offer or, with respect to shares held in “street name”, the date of delivery of materials from the applicable nominee or broker providing executable instructions regarding tendering into the Offer (but in any event prior to the expiration of the Offer) or (b) in the case of any Shares acquired following May 2, 2023, as promptly as reasonably practicable after the acquisition of such Shares, as the case may be (but, if such Shares are acquired prior to the expiration of the Offer, in no event later than the expiration of the Offer), the Supporting

 

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Stockholders will tender into the Offer, and not withdraw, all outstanding Shares each Supporting Stockholder owns of record or beneficially (within the meaning of Rule 13d-3 under the Exchange Act) as of the date of the Tender and Support Agreement or that the Supporting Stockholders acquires record ownership or beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of after such date during the Support Period (as defined below) (collectively, the “Subject Shares”).

During the period from May 2, 2023, until the termination of the Tender and Support Agreement (the “Support Period”), the Supporting Stockholders have agreed, in connection with any annual or special meeting of stockholders of the Company, however called, including any adjournment or postponement thereof, or any action proposed to be taken by written consent (if permitted at such time) of the Company’s stockholders, to (a) appear at such meeting or otherwise cause all such Subject Shares to be counted as present thereat for purposes of determining a quorum; and (b) be present (in person or by proxy) and vote (or cause to be voted), or deliver (or cause to be delivered) a written consent (if permitted at such time) with respect to, all of its Subject Shares (i) against any Acquisition Proposal (other than the Merger), (ii) against any change in membership of the Company Board that is not recommended or approved by the Company Board, and (iii) against any other proposed action, agreement or transaction involving the Company that would reasonably be expected to impede, interfere with, delay, postpone, adversely affect or prevent the consummation of the Offer, the Merger or the transactions contemplated by the Merger Agreement, including (x) any extraordinary corporate transaction, such as a merger, consolidation or other business combination involving the Company (other than the Merger); (y) a sale, lease, license or transfer of a material amount of assets (including, for the avoidance of doubt, intellectual property rights) of the Company or any reorganization, recapitalization or liquidation of the Company; or (z) any change in the present capitalization of the Company or any amendment or other change in the Company’s organizational documents.

During the Support Period, the Supporting Stockholders have further agreed not to, directly or indirectly, (a) create or permit to exist any lien, other than certain permitted liens, on any of the Supporting Stockholders’ Subject Shares, (b) transfer, sell (including short sell), assign, hedge, pledge, grant an option or other a participation interest in, hypothecate or otherwise dispose of, or enter into any derivative arrangement with respect to (collectively, “Transfer”), any of the Supporting Stockholders’ Subject Shares, or any right or interest therein, (c) enter into any contract with respect to any Transfer of the Supporting Stockholders’ Subject Shares or any interest therein, (d) grant or permit the grant of any proxy, power of attorney or other authorization or consent in or with respect to any of the Supporting Stockholders’ Subject Shares, (e) deposit or permit the deposit of any of the Supporting Stockholders’ Subject Shares into a voting trust or enter into a voting agreement or arrangement with respect to any of the Supporting Stockholders’ Subject Shares, (f) take or permit any other action that would in any way restrict, limit, impede, delay or interfere with the compliance with the Supporting Stockholders’ obligations under the Tender and Support Agreement in any material respect, or have the effect of preventing or disabling the Supporting Stockholders from complying with any of their obligations under the Tender and Support Agreement or (g) agree or commit to take any of the actions referred to in the foregoing clauses (a) through (f). The restrictions on Transfer are subject to certain customary exceptions.

During the Support Period, the Supporting Stockholders, solely in their capacities as stockholders of the Company, will not, and will direct their representatives, directors and officers involved in the transactions contemplated by the Merger Agreement not to, directly or indirectly: (i) solicit, initiate, propose or knowingly induce the making, submission or announcement of, or knowingly encourage, facilitate or assist, any proposal or offer that constitutes or could reasonably be expected to lead to, an Acquisition Proposal, (ii) furnish to any person (other than Parent, Purchaser or any designees of Parent or Purchaser) any non-public information relating to the Company or any of its Subsidiaries or afford to any person access to the business, properties, assets, books, records or other non-public information, or to any personnel, of the Company or any of its Subsidiaries, in any such case with the intent to induce the making, submission or announcement of, or with the intent to encourage, facilitate or assist, an Acquisition Proposal or any inquiries or the making of any proposal or offer that could reasonably be expected to lead to an Acquisition Proposal, (iii) participate or engage in discussions or negotiations with any person with respect to an Acquisition Proposal by such person (or inquiries, proposals or

 

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offers or other efforts that could reasonably be expected to lead to an Acquisition Proposal by such person), in each case, other than informing such persons of the existence of the provisions contained in this paragraph, (iv) approve, endorse or recommend an acquisition proposal, (v) enter into any alternative acquisition agreement, or (vi) resolve, propose or agree to do any of the foregoing.

The Tender and Support Agreement terminates upon the earliest of (i) the valid termination of the Merger Agreement in accordance with its terms, (ii) the effective time, (iii) the occurrence of a Company Board Recommendation Change or (iv) any amendment or change to the Merger Agreement or the Offer that decreases the amount, or changes the form or terms, of consideration payable to all stockholders of the Company pursuant to the terms of the Merger Agreement

This summary and description of the Tender and Support Agreement does not purport to be complete and is qualified in its entirety by reference to the Tender and Support Agreement, which is filed as Exhibit (d)(3) to the Schedule TO, which is incorporated herein by reference.

Potential Future Arrangements

It is currently expected that the Company will enter into an employment agreement with Cheryl Henry, current Chairperson of the Board, President and Chief Executive Officer of the Company, that will be effective as of the effective time. Under the expected agreement, Ms. Henry will remain employed with the Company and (i) have the title of Brand President, (ii) receive a base salary of $550,000, (iii) in lieu of continued participation in the Company’s Home Office Bonus Program for the remainder of 2023, receive a target annual bonus equal to 70% of her base salary, which will be earned based on the achievement of Parent financial objectives, but with a guaranteed payment of at least the pro-rata portion of $385,000 for the period of active employment, provided the terms of the bonus plan are met, and including a pro-rata payment if she is terminated due to death or disability, (iv) receive a Parent Long Term Incentive stock award with a target value of $750,000 that vests on varying pro-rata or full terms if she is terminated without cause or due to death or disability, and (v) vest in her right to receive the severance benefits (excluding the prorated share of her Home Office Bonus for the year of termination, which will be forfeited) pursuant to her current employment agreement, a portion of which will be paid in a cash lump sum immediately following the closing, and the change in control payment pursuant to her current employment agreement.

To the knowledge of Parent and Purchaser, except for certain agreements described in the Schedule 14D-9, no material employment, equity contribution or other agreement, arrangement or understanding between any executive officer or director of the Company, on the one hand, and Parent, Purchaser or the Company, on the other hand, existed as of the date of the Merger Agreement, and neither the Offer nor the Merger is conditioned upon any executive officer or director of the Company entering into any such agreement, arrangement or understanding.

 

12.	Purpose of the Offer; Plans for the Company.

Purpose of the Offer. We are making the Offer because we want to acquire the entire equity interest in the Company. The Offer, as the first step in the acquisition of the Company, is intended to facilitate the acquisition of any and all issued and outstanding Shares.

Purchaser intends to consummate the Merger promptly after the Offer Acceptance Time. The purpose of the Merger is to acquire all outstanding Shares not tendered and purchased pursuant to the Offer. Following the consummation of the Offer and subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement, Purchaser will be merged with and into the Company. Following the effective time, the separate corporate existence of Purchaser will cease and the Company will continue as the surviving corporation and an indirect, wholly-owned subsidiary of Parent.

All Shares acquired by Purchaser pursuant to the Offer will be retained by Purchaser pending the Merger. If you sell your Shares in the Offer, you will cease to have any equity interest in the Company or any right to

 

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participate in its earnings and future growth. If you do not tender your Shares, but the Merger is consummated, you will also no longer have an equity interest in the Company. Similarly, after selling your Shares in the Offer or upon consummation of the Merger, you will not bear the risk of any decrease in the value of the Company.

Stockholder Approval. If the Offer is consummated and as a result the Shares irrevocably accepted for purchase in the Offer, together with the Shares otherwise owned by Purchaser and its affiliates, represent a majority of the outstanding Shares, the Company does not anticipate seeking the approval of its remaining public stockholders before effecting the Merger. Section 251(h) of the DGCL provides that, subject to certain statutory requirements, if following consummation of a successful tender offer for a public corporation, the stock irrevocably accepted for purchase in the offer and “received” (as defined in Section 251(h) of the DGCL) by the depository for the offer prior to the expiration of such offer, together with the stock otherwise owned by the acquirer or its affiliates, equals at least the amount of shares of each class of stock of the target corporation that would otherwise be required to approve a merger involving the target corporation, and the other stockholders receive the same consideration for their stock in the Merger as was payable in the tender offer, the acquirer can effect a merger without the action of the other stockholders of the target corporation. Therefore, the parties have agreed that, subject to the conditions specified in the Merger Agreement, the Merger will become effective promptly after (but on the same day as) the consummation of the Offer after the satisfaction or waiver of the conditions to the Merger set forth in the Merger Agreement, without a vote of the Company’s stockholders, in accordance with Section 251(h) of the DGCL.

Plans for the Company. If we accept Shares for payment pursuant to the Offer, we will obtain control over the management of the Company and the Company Board shortly thereafter.

As of the effective time, (i) the certificate of incorporation of the surviving corporation shall be amended and restated in its entirety as set forth in Exhibit A attached to the Merger Agreement and, as so amended, shall be the certificate of incorporation of the surviving corporation until thereafter amended as provided by the DGCL and such certificate of incorporation; and (ii) the bylaws of the surviving corporation will be amended and restated as a result of the Merger to be the same as the bylaws of Purchaser in effect immediately before the effective time, except that references to Purchaser’s name will automatically be amended and will become references to the name of the Company, until thereafter amended as provided by the DGCL, the certificate of incorporation and such bylaws (subject to the terms of the Merger Agreement); and (iii) the directors of Purchaser immediately prior to the effective time will be the directors of the surviving corporation and the officers of Purchaser immediately prior to the effective time will be the officers of the surviving corporation. Such directors and officers will hold office until their respective successors are duly elected or appointed and qualified or until the earlier of their death, resignation or removal in accordance with the certificate of incorporation and bylaws of the surviving corporation.

Immediately following the consummation of the Merger, Parent intends to cause the Company to delist the Shares from Nasdaq. Parent intends to cause the Company to terminate the registration of the Shares under the Exchange Act as soon as practicable after consummation of the Merger as the requirements for termination of registration are met.

Parent and Purchaser are conducting a detailed review of the Company and, among other things, its assets, corporate structure, capitalization, indebtedness, operations, properties, policies and management, and will consider which changes would be desirable in light of the circumstances that exist upon completion of the Offer and the Merger. Parent and Purchaser will continue to evaluate the business and operations of the Company during the pendency of the Offer and after the consummation of the Offer and the Merger and will take such actions as they deem appropriate under the circumstances then existing. Thereafter, Parent intends to review such information as part of a comprehensive review of the Company’s business, operations, capitalization, indebtedness and management. Possible changes could include changes in the Company’s business, operations, capitalization, indebtedness and management. Plans may change based on further analysis and Parent, Purchaser and, after completion of the Offer and the Merger, the reconstituted Company Board, reserve the right to change their plans and intentions at any time, as deemed appropriate.

 

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Except as disclosed in this Offer to Purchase, Parent and Purchaser do not have any present plan or proposal that would result in the acquisition by any person of additional securities of the Company, the disposition of securities of the Company, an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the Company or the purchase, sale or transfer of a material amount of assets of the Company.

To the knowledge of Parent and Purchaser, except for certain agreements described in the Schedule 14D-9, no material employment, equity contribution or other agreement, arrangement or understanding between any executive officer or director of the Company, on the one hand, and Parent, Purchaser or the Company, on the other hand, existed as of the date of the Merger Agreement, and neither the Offer nor the Merger is conditioned upon any executive officer or director of the Company entering into any such agreement, arrangement or understanding.

 

13.	Certain Effects of the Offer.

Market for the Shares. If the Offer is consummated, Purchaser will complete the Merger as soon as practicable after (but in any event on the same date as) the Offer Acceptance Time, subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement. As a result, there will be no market for the Shares following consummation of the Offer.

Nasdaq Listing. If the Offer is consummated, Purchaser will complete the Merger as soon after the consummation of the Offer, subject to the satisfaction or waiver of certain conditions set forth in the Merger Agreement. As a result, the Shares will no longer meet the requirements for continued listing on Nasdaq because there will only be a single holder of the Shares, which will be a subsidiary of Parent. Immediately following the consummation of the Merger, Parent intends to cause the Company to delist the Shares from Nasdaq.

Exchange Act Registration. The Shares are currently registered under the Exchange Act. Such registration may be terminated upon application of the Company to the SEC if the Shares are neither listed on a national securities exchange nor held by 300 or more holders of record. Termination of registration of the Shares under the Exchange Act would substantially reduce the information required to be furnished by the Company to its stockholders and to the SEC and would make certain provisions of the Exchange Act no longer applicable to the Company, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement of furnishing a proxy statement pursuant to Section 14(a) of the Exchange Act in connection with stockholders’ meetings and the related requirement of furnishing an annual report to stockholders and the requirements of Rule 13e-3 under the Exchange Act with respect to “going private” transactions. In addition, the ability of “affiliates” of the Company and persons holding “restricted securities” of the Company to dispose of such securities pursuant to Rule 144 promulgated under the Securities Act of 1933, as amended, may be impaired or eliminated. We intend and will cause the Company to terminate the registration of the Shares under the Exchange Act as soon after consummation of the Merger as the requirements for termination of registration are met.

Margin Regulations. The Shares are currently “margin securities” under the Regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), which has the effect, among other things, of allowing brokers to extend credit on the collateral of the Shares. Depending upon factors similar to those described above regarding the market for the Shares and stock quotations, it is expected that, following consummation of the Offer, the Shares would no longer constitute “margin securities” for the purposes of the margin regulations of the Federal Reserve Board and, therefore, could no longer be used as collateral for loans made by brokers.

 

14.	Dividends and Distributions.

As discussed in Section 11 — “The Merger Agreement; Other Agreements,” the Merger Agreement provides that from the date of the Merger Agreement until the earlier of the effective time or the termination of the Merger Agreement in accordance with its terms, except as required by the Merger Agreement, required by

 

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law or order or consented to in writing by Parent, the Company will not declare, set aside for payment or pay any dividend on, or make any other distribution in respect of, any Shares or other equity or voting interests.

 

15.	Conditions of the Offer.

The Offer is not subject to any financing condition. Notwithstanding any other provisions of the Offer but subject to the terms of the Merger Agreement, Purchaser is not required to accept for purchase or, subject to any applicable rules and regulations of the SEC (including Rule 14e-1(c) under the Exchange Act), pay for any Shares validly tendered (and not validly withdrawn) in the Offer, if any of the conditions set forth below have not been satisfied or waived in writing by Parent:

 

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the Minimum Condition has been satisfied;

 

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since May 2, 2023, there has not occurred and is not continuing any Company Material Adverse Effect (the “Material Adverse Effect Condition”);

 

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(i) the representations and warranties set forth in Section 3.6(a), Section 3.6(b)(A) and Section 3.6(d) of the Merger Agreement shall be true and correct in all respects as of the Offer Expiration Time as if made at and as of the Offer Expiration Time (except to the extent that any such representation and warranty expressly speaks as of a specific date, in which case such representation and warranty shall be true and correct in all respects as of such specified date), except for such failures to be true and correct that are de minimis; (ii) the representations and warranties set forth in Section 3.1, Section 3.2, Section 3.3, Section 3.4(a)(i), Section 3.6(b)(C), Section 3.6(c) (other than the last sentence thereof), Section 3.6(e), the first sentence of Section 3.7(b), Section 3.7(c) and Section 3.28 that (A) are not qualified by Company Material Adverse Effect or other materiality qualifiers shall be true and correct in all material respects as of the Offer Expiration Time as if made at and as of the Offer Expiration Time (except to the extent that any such representation and warranty expressly speaks as of a specific date, in which case such representation and warranty shall be true and correct in all material respects as of such specified date); or (B) are qualified by Company Material Adverse Effect or other materiality qualifiers shall be true and correct in all respects (without disregarding such Company Material Adverse Effect or other materiality qualifiers qualifications) as of the Offer Expiration Time as if made at and as of the Offer Expiration Time (except to the extent that any such representation and warranty expressly speaks as of a specific date, in which case such representation and warranty shall be true and correct in all respects as of such specified date); and (iii) other than the representations and warranties set forth in Section 3.1, Section 3.2, Section 3.3, Section 3.4(a)(i), Section 3.6(a), Section 3.6(b)(A) and (C), Section 3.6(c) (other than the last sentence thereof), Section 3.6(d), Section 3.6(e), the first sentence of Section 3.7(b), Section 3.7(c) and Section 3.28, the representations and warranties of the Company set forth in this Agreement shall be true and correct (without giving effect to any materiality or Company Material Adverse Effect qualifications set forth therein) as of the Offer Expiration Time as if made at and as of the Offer Expiration Time (except to the extent that any such representation and warranty expressly speaks as of a specific date, in which case such representation and warranty shall be true and correct as of such specified date), except for such failures to be true and correct that have not had, and would not reasonably be expected to have, a Company Material Adverse Effect (the “Company Representations Condition”);

 

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the Company shall have performed and complied in all material respects with the covenants, obligations and agreements in the Merger Agreement required to be performed and complied with by it at or prior to the Offer Expiration Time (the “Obligations Condition”);

 

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Parent and Purchaser shall have received a certificate of the Company, validly executed for and on behalf of the Company signed by an authorized executive officer of the Company, dated as of the date on which the Acceptance Time occurs, certifying that the conditions set forth in Company Representation Condition, the Obligations Condition and Material Adverse Effect Condition have been satisfied;

 

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the HSR Condition has been satisfied;

 

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no governmental authority of competent jurisdiction has enacted, issued, promulgated, enforced or entered any federal, state, local, foreign or multinational law, rule or regulation or order, judgment or injunction, whether civil, criminal or administrative (whether temporary, preliminary or permanent), that prohibits, restricts, enjoins or otherwise makes illegal the consummation of the Offer or the Merger and is continuing in effect; and

 

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the Termination Condition has been satisfied.

The conditions to the Offer must be satisfied or waived (to the extent waiver is permitted under the Merger Agreement and applicable law) on or prior to the Offer Expiration Time.

The conditions described above are in addition to, and not a limitation of, the rights and obligations of Parent and Purchaser to extend, terminate or modify the Offer pursuant to the terms of the Merger Agreement.

The conditions described above are for the sole benefit of Parent and Purchaser and may be waived by Parent and Purchaser in whole or in part, at any time and from time to time in their sole discretion, except that Parent and Purchaser are not permitted to waive the Minimum Condition, the HSR Condition, the Legal Restraint Condition or the Termination Condition. The failure by Parent or Purchaser at any time to exercise any of the foregoing rights will not be deemed a waiver of any such right, the waiver of any such right with respect to particular facts and circumstances will not be deemed a waiver with respect to any other facts and circumstances and each such right will be deemed an ongoing right that may be asserted at any time and from time to time.

 

16.	Certain Legal Matters; Regulatory Approvals.

General

Except as described in this Section 16, Purchaser is not aware of any pending legal proceeding relating to the Offer. Except as described in this Section 16, based on its examination of publicly available information filed by the Company with the SEC and other publicly available information concerning the Company, Purchaser is not aware of any governmental license or regulatory permit that appears to be material to the Company’s business that might be adversely affected by Purchaser’s acquisition of Shares as contemplated herein or of any approval or other action by any governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for the acquisition or ownership of Shares by Purchaser or Parent as contemplated herein. Should any such approval or other action be required, Purchaser currently contemplates that, except as described below under “State Takeover Statutes,” such approval or other action will be sought. While Purchaser does not currently intend to delay acceptance for payment of Shares tendered pursuant to the Offer pending the outcome of any such matter, there can be no assurance that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that if such approvals were not obtained or such other actions were not taken, adverse consequences might not result to the Company’s business, or certain parts of the Company’s business might not have to be disposed of, any of which could cause Purchaser to elect to terminate the Offer without the purchase of Shares thereunder under certain conditions. See Section 15 — “Conditions of the Offer.”

State Takeover Statutes

A number of states (including Delaware, where the Company is incorporated) have adopted takeover laws and regulations which purport, to varying degrees, to be applicable to attempts to acquire securities of corporations which are incorporated in such states or which have substantial assets, stockholders, principal executive offices or principal places of business therein. The Company has expressly elected to be governed by Section 203 of the DGCL, which generally prevents a Delaware corporation from engaging in a “business combination” (defined to include mergers and certain other actions) with an “interested stockholder” (including a

 

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person who owns or has the right to acquire 15% or more of a corporation’s outstanding voting stock) for a period of three years following the date such person became an “interested stockholder” unless, among other things, the “business combination” is approved by the board of directors of such corporation before such person became an “interested stockholder.” The Company Board approved the Merger Agreement and the Tender and Support Agreement and the transactions contemplated therein, and the restrictions on “business combinations” described in Section 203 are inapplicable to the Merger Agreement, the Tender and Support Agreement and the transactions contemplated therein.

The Company has represented to us in the Merger Agreement that no other “moratorium,” “control share acquisition,” “fair price” or other anti-takeover laws and regulations apply or will apply to the Company pursuant to the Merger Agreement or the Merger or the Offer. Purchaser has not attempted to comply with any other state takeover statutes in connection with the Offer or the Merger. Purchaser reserves the right to challenge the validity or applicability of any state law allegedly applicable to the Offer, the Merger, the Merger Agreement or the transactions contemplated thereby, and nothing in this Offer to Purchase or any action taken in connection herewith is intended as a waiver of that right. In the event that it is asserted that one or more takeover statutes apply to the Offer or the Merger, and it is not determined by an appropriate court that such statute or statutes do not apply or are invalid as applied to the Offer, the Merger, or the Merger Agreement, as applicable, Purchaser may be required to file certain documents with, or receive approvals from, the relevant state authorities, and Purchaser might be unable to accept for payment or purchase Shares tendered pursuant to the Offer or be delayed in continuing or consummating the Offer. In such case, Purchaser may not be obligated to accept for purchase, or pay for, any Shares tendered. See Section 15 —”Conditions of the Offer.”

The Company, directly or through subsidiaries, conducts business in a number of states throughout the United States, some of which have enacted takeover laws, and we do not know whether any of these laws will, by their terms, apply to the Offer or the Merger and have not attempted to comply with any state anti-takeover laws or regulations other than as described above. Should any person seek to apply any state takeover law, we will take such action as then appears desirable, which may include challenging the validity or applicability of any such statute in appropriate court proceedings. In the event any person asserts that the takeover laws of any state are applicable to the Offer or the Merger, and an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer or the Merger, we may be required to file certain information with, or receive approvals from, the relevant state authorities. In addition, if enjoined, we may be unable to accept for payment any Shares tendered pursuant to the Offer, or be delayed in continuing or consummating the Offer and the Merger. In such case, we may not be obligated to accept for purchase, or pay for, any Shares tendered in the Offer. See Section 15 — “Conditions of the Offer.”

Dissenters’ Rights.

No appraisal rights are available in connection with the Offer and stockholders who tender their Shares in the Offer will not have appraisal rights in connection with the Merger with respect to such tendered Shares. However, if Purchaser purchases Shares in the Offer and the Merger is consummated, stockholders as of immediately prior to the effective time who have not properly tendered their Shares in the Offer (or, if tendered, who have validly and subsequently withdrawn such Shares prior to the Offer Acceptance Time) and who have not otherwise waived appraisal rights, and who otherwise comply with the applicable procedures under Section 262 of the DGCL, will be entitled to seek appraisal of their Shares and to receive payment in cash for the fair value of their Shares, exclusive of any element of value arising from the accomplishment or expectation of the Merger, as determined by the Delaware Court of Chancery (the “Delaware Court”), together with interest, if any, to be paid upon the amount determined to be the fair value of such Shares. These rights are known as appraisal rights under Delaware law. The “fair value” of such Shares as determined by the Delaware Court may be greater than, the same as, or less than the Offer Price.

The following is a brief summary of the appraisal rights of stockholders under Section 262 of the DGCL in connection with the Merger, assuming that the Merger is consummated in accordance with Section 251(h) of the

 

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DGCL. The full text of Section 262 of the DGCL may be accessed without subscription or cost at the Delaware Code Online (available at http://delcode.delaware.gov/title8/c001/sc09/index.html#262). In the event of any inconsistency between the information contained in this summary and the actual text of Section 262 of the DGCL, the actual text of Section 262 of the DGCL controls. All references in Section 262 of the DGCL and in this summary to a “stockholder” or a “holder of Shares” are to the record holder of Shares immediately prior to the effective time as to which appraisal rights are asserted. Failure to follow any of the procedures of Section 262 of the DGCL may result in loss or waiver of appraisal rights under Section 262 of the DGCL. Any stockholder or beneficial owner who desires to exercise his, her or its appraisal rights, or preserve the ability to do so, should review carefully Section 262 of the DGCL and is urged to consult his, her or its legal advisor before electing or attempting to exercise such rights. A person having a beneficial interest in Shares held of record in the name of another person, such as a broker or nominee, must act promptly to cause the record holder to follow the steps set forth in Section 262 of the DGCL and summarized below properly and in a timely manner to perfect appraisal rights. The following summary does not constitute legal or other advice, nor does it constitute a recommendation to exercise appraisal rights under Section 262 of the DGCL, and is qualified in its entirety by reference to, Section 262 of the DGCL.

Under Section 262 of the DGCL, where a merger is approved under Section 251(h), either a constituent corporation before the effective date of the merger, or the surviving corporation within 10 days thereafter, is required to notify each of the holders of any class or series of stock of such constituent corporation who are entitled to appraisal rights of the approval of the merger or consolidation and that appraisal rights are available for any or all shares of such class or series of stock of such constituent corporation, and is required to include in such notice either a copy of Section 262 or information directing the stockholder to a publicly available electronic resource at which Section 262 may be accessed without subscription or cost.

As described more fully in the Schedule 14D-9, if a stockholder or beneficial owner elects to exercise appraisal rights under Section 262 of the DGCL and the Merger is consummated pursuant to Section 251(h) of the DGCL, such stockholder or beneficial owner must do all of the following:

 

•

within the later of the consummation of the Offer, which will occur on the date on which Purchaser irrevocably accepts for purchase the Shares validly tendered in the Offer, and twenty days after the date of mailing of the notice of appraisal rights in the Schedule 14D-9 (which date of mailing is May 16, 2023), demand in writing the appraisal of such stockholder’s Shares, which demand must be sent to the Company at the address indicated in the Schedule 14D-9 and reasonably inform the Company of the identity of the stockholder and that the stockholder is demanding appraisal for such Shares;

 

•

not tender such stockholder’s or beneficial owner’s Shares in the Offer or otherwise vote in favor of or consent to the Merger;

 

•

continuously hold of record or beneficially own, as applicable, the Shares from the date on which the written demand for appraisal is made through the effective date of the Merger; and

 

•

comply with the procedures of Section 262 of the DGCL.

In addition, one of the ownership thresholds must be met and a stockholder or beneficial owner or the surviving corporation must file a petition in the Delaware Court demanding a determination of the value of the stock of all persons entitled to appraisal within 120 days after the effective time. The surviving corporation is under no obligation to file any such petition and has no intention of doing so. If the Merger is consummated pursuant to Section 251(h) of the DGCL, Parent will cause the surviving corporation to deliver an additional notice of the effective date of the Merger within ten days after the closing of the Merger to all the Company’s stockholders who demanded appraisal in writing (in accordance with the first bullet above), as required by Section 262(d)(2) of the DGCL. However, only stockholders who have made a written demand in accordance with the first bullet above will receive such notice of the effective date of the Merger. If the Merger is consummated pursuant to Section 251(h) of the DGCL, a failure to make a written demand for appraisal in accordance with the time periods specified in the first bullet above (or to take any of the other steps specified in the above bullets or summarized below) may result in a loss of appraisal rights.

 

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The foregoing summary of the rights of the Company’s stockholders to seek appraisal rights under Delaware law does not purport to be a complete statement of the procedures to be followed by stockholders desiring to exercise appraisal rights and is qualified in its entirety by reference to Section 262 of the DGCL. The preservation and proper exercise of appraisal rights requires adherence to the applicable provisions of the DGCL. Failure to timely and properly comply with the procedures of Section 262 of the DGCL may result in the loss of appraisal rights. The Schedule 14D-9 constitutes the formal notice by the Company to its stockholders of appraisal rights in connection with the Merger under Section 262 of the DGCL.

Appraisal rights cannot be exercised at this time. The information provided above is for informational purposes only with respect to your alternatives if the Merger is completed. If you tender (and do not validly withdraw prior to the Offer Expiration Time) your Shares in the Offer, you will not be entitled to exercise appraisal rights with respect to your Shares but, instead, upon the terms and subject to the conditions to the Offer, you will receive the Offer Price for your Shares.

Antitrust Compliance

Parent and the Company filed Premerger Notification and Report Forms with the FTC and the DOJ relating to Parent’s proposed acquisition of the Company on May 15, 2023. Consequently, the required waiting period with respect to the Offer will expire at 11:59 p.m., New York City time, on May 30, 2023, unless the waiting period is extended.

Under the provisions of the HSR Act applicable to the Offer, the acquisition of Shares pursuant to the Offer may be consummated following the expiration of a 15-day waiting period after the filing by Parent of its Premerger Notification and Report Form with respect to the Offer, unless Parent receives a request for additional information or documentary material from the DOJ or the FTC. Parent may also withdraw its Premerger Notification and Report Form on or before the last day of the 15-day waiting period and refile the Form within two business days of withdrawal, which would initiate a new 15-day waiting period. If, within the applicable waiting period, either the DOJ or the FTC requests additional information or documentary material concerning the Offer, the waiting period will be extended through the 10th day after the date of substantial compliance by Parent with such request. Complying with a request for additional information or documentary material may take a significant amount of time.

At any time before or after Parent’s acquisition of Shares pursuant to the Offer, the DOJ or the FTC could take such action under the antitrust laws as either deems necessary or desirable in the public interest, including seeking to enjoin the purchase of Shares pursuant to the Offer, or seeking the divestiture of Shares acquired by Parent or the divestiture of substantial assets of the Company or its subsidiaries or Parent or its subsidiaries. State attorneys general may also bring legal action under both state and federal antitrust laws, as applicable. Private parties may also bring legal action under the antitrust laws under certain circumstances. There can be no assurance that a challenge to the Offer on antitrust grounds will not be made or, if such a challenge is made, the result thereof.

Legal Proceedings Relating to the Tender Offer. As of the date of this Offer to Purchase, there are currently no legal proceedings pending relating to the Offer or the Merger.

 

17.	Fees and Expenses.

We have retained the Depositary, the Payment Agent and the Information Agent in connection with the Offer. Each of the Depositary, the Payment Agent and the Information Agent will receive customary compensation, reimbursement for reasonable out-of-pocket expenses and indemnification against certain liabilities in connection with the Offer, including liabilities under the United States federal securities laws.

 

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As part of the services included in such retention, the Information Agent may contact holders of Shares by personal interview, mail, electronic mail, telephone and other methods of electronic communication, and may request brokers, dealers, commercial banks, trust companies and other nominees to forward the Offer materials to beneficial holders of Shares.

Except as set forth above, we will not pay any fees or commissions to any broker or dealer or other person for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies will upon request be reimbursed by us for customary mailing and handling expenses incurred by them in forwarding the offering material to their customers.

 

18.	Miscellaneous.

The Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, “blue sky” or other applicable laws of such jurisdiction. However, Purchaser may, in its discretion, take such action as it may deem necessary to make the Offer comply with the laws of any such jurisdiction and extend the Offer to holders of Shares in such jurisdiction in compliance with applicable laws. In those jurisdictions where applicable laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by Purchaser.

Purchaser and Parent have filed with the SEC the Schedule TO (including exhibits) in accordance with the Exchange Act, furnishing certain additional information with respect to the Offer and may file amendments thereto. If the Offer is completed, Purchaser will file a final amendment to the Schedule TO reporting promptly the results of the Offer pursuant to Rule 14d-3 under the Exchange Act. A copy of the Schedule TO and any amendments thereto (including exhibits) may be examined and copies may be obtained from the SEC in the manner set forth in Section 7 — “Certain Information Concerning the Company — Available Information.”

No person has been authorized to give any information or make any representation on behalf of Parent or Purchaser not contained in this Offer to Purchase or in the Letter of Transmittal and, if given or made, that information or representation must not be relied upon as having been authorized. Neither delivery of this Offer to Purchase nor any purchase pursuant to the Offer will, under any circumstances, create any implication that there has been no change in the affairs of Parent, Purchaser, the Company or any of their respective subsidiaries since the date as of which information is furnished or the date of this Offer to Purchase.

 

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SCHEDULE I

INFORMATION RELATING TO PARENT AND PURCHASER

1. Purchaser

Purchaser, a Delaware corporation, was formed on April 26, 2023, solely for the purpose of completing the proposed Offer and Merger and has conducted no business activities other than those related to the structuring and negotiation of the Offer and the Merger. Purchaser is an indirect, wholly owned subsidiary of Parent. The business address for Purchaser is: 1000 Darden Center Drive, Orlando, Florida 32837. The business telephone number for Purchaser is (407) 245-4000.

Directors and Executive Officers of Purchaser

The name, position, business address, citizenship, present principal occupation or employment and material occupations, positions, offices or employment for the past five years of each of the directors and executive officers of Purchaser are set forth below. Except as otherwise indicated, all directors and executive officers listed below are citizens of the United States. The principal office address of each such director and executive officer is 1000 Darden Center Drive, Orlando, Florida 32837. The telephone number at the principal office is (407) 245-4000. Directors are identified by an asterisk.

 

Name and Position		Present Principal Occupation or Employment; Material Positions Held During the Last Five Years; Citizenship (if not United States)
Matthew R. Broad*   President and Sole Director		Mr. Broad is the President and Sole Director of the Board of Directors of Purchaser. Mr. Broad has served as Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary of Parent since 2015.
Rajesh Vennam   Treasurer		Mr. Vennam is Treasurer of Purchaser. Mr. Vennam has served as Senior Vice President, Chief Financial Officer of Parent since December 2022. Prior to that, he served as Senior Vice President, Chief Financial Officer and Treasurer of Parent since January 2021. He served as Senior Vice President, Corporate Finance and Treasurer of Parent since September 2020 and Senior Vice President, Finance and Analytics of Parent from May 2016 through September 2020.
John W. Madonna   Secretary		Mr. Madonna is Secretary of Purchaser. Mr. Madonna has served as Senior Vice President, Corporate Controller of Parent since 2016.

2. Parent

Parent, a Florida corporation, owns and operates more than 1,850 full-service dining restaurants in the United States and Canada under the trade names Olive Garden^®, LongHorn Steakhouse^®, Cheddar’s Scratch Kitchen^®, Yard House^®, The Capital Grille^®, Seasons 52^®, Bahama Breeze^®, Eddie V’s Prime Seafood^® and The Capital Burger^®. As of February 26, 2023, through subsidiaries, Parent owned and operated all of its restaurants in the United States and Canada, except for two joint venture restaurants managed by Parent and 34 franchised restaurants. Parent also has 32 franchised restaurants in operation located in Latin America, the Caribbean, and Asia. The business address for Parent is: 1000 Darden Center Drive, Orlando, Florida 32837. The business telephone number for Parent is (407) 245-4000.

 

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Directors and Executive Officers of Parent

The name, position, business address, citizenship, present principal occupation or employment and material occupations, positions, offices or employment for the past five years of each of the directors and executive officers of Parent are set forth below. The principal office address of each such director and executive officer is 1000 Darden Center Drive, Orlando, Florida 32837. The telephone number at the principal office is (407) 245-4000. Except as otherwise indicated, all directors and executive officers listed below are citizens of the United States. Directors are identified by an asterisk.

 

Name and Position		Present Principal Occupation or Employment; Material Positions Held During the Last Five Years; Citizenship (if not United States)
Margaret Shân Atkins*   Director		Ms. Atkins has been a director of Parent since 2014. Ms. Atkins is a retired consumer and retail executive. Ms. Atkins has been a director of SpartanNash Company, a national grocery wholesaler/retailer and distributor of food products to the worldwide U.S. military commissary system, since 2003, and Aurora Cannabis, Inc., one of the world’s largest and leading cannabis companies, since 2019. Ms. Atkins previously served as a director of SunOpta, Inc., a North American manufacturer of natural and organic food products, from 2014 to 2019, and LSC Communications, Inc., a leading provider of long and short-run printing services to the book, catalog and magazine publishing industries, from 2016 to 2021. Ms. Atkins is a citizen of the United States, Canada and the United Kingdom.
Ricardo (Rick) Cardenas*   President, Chief Executive Officer and Director		Mr. Cardenas was named President and Chief Executive Officer and elected to the Board of Directors effective May 2022. Prior to that, Mr. Cardenas served as President and Chief Operating Officer since January 2021 and Senior Vice President, Chief Financial Officer since 2016. Mr. Cardenas has been a director of Tractor Supply Company, an operator of retail farm and ranch stores, since 2019.
Juliana L. Chugg*   Director		Ms. Chugg has been a director of Parent since 2022. Ms. Chugg is the retired Executive Vice President and Chief Brand Officer of Mattel, Inc., a leading global toy company and owner of a portfolio of children’s and family entertainment franchises, a position she held from 2015 through 2018. Ms. Chugg has been a director of VF Corporation, one of the world’s largest apparel, footwear and accessories companies, since 2009, and MasterBrand, Inc., a manufacturer of residential cabinets, since 2022. Previously, Ms. Chugg was a director of Caesars Entertainment, Inc., a global leader in gaming and hospitality, from December 2018 through August 2020, and Kontoor Brands, Inc., a global lifestyle apparel company, from May 2019 through December 2021. Ms. Chugg is an Australian and British citizen, and is a U.S. Permanent Resident.
James P. Fogarty*   Director		Mr. Fogarty has been a director of Parent since 2014. Mr. Fogarty has been the CEO at FULLBEAUTY Brands, Inc., a privately-held branded multi-channel retailer focused on fashion apparel and home goods for plus-sized women and men, since June 2019. Mr. Fogarty previously served as a director of Assertio Therapeutics, Inc. (formerly known as Depomed Inc.), a specialty pharmaceutical company, and as Chairman of the Board from 2016 to 2020 through its merger with Zyla Life Sciences.

 

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Name and Position		Present Principal Occupation or Employment; Material Positions Held During the Last Five Years; Citizenship (if not United States)
Cynthia T. Jamison*   Director		Ms. Jamison has been a director of Parent since 2014. Ms. Jamison is a retired turnaround CFO. Ms. Jamison is the Non-Executive Chairman of the Board for Big Lots, Inc., a discount retailer, where she has been a director since 2015, and has been a director at The ODP Corporation, the parent of Office Depot, Inc., a global supplier of office products and services, since 2013. She was the Non-Executive Chairman of the Board for Tractor Supply Company, an operator of retail farm and ranch stores, until May 11, 2023, and was a director from 2002 through that date. She holds the designation of Certified Public Accountant (Illinois); in addition, she is an NACD Fellow and a frequent faculty member at NACD Master Classes. Ms. Jamison recently completed a four-year appointment to the Financial Accounting Standards Advisory Council (FASAC), an Advisory Board to FASB.
Eugene I. Lee, Jr.*   Chairman of the Board of Directors		Mr. Lee has been a director of Parent since 2015 and Chairman of the Board of Parent since January 2021. He was Executive Chairman of the Board of Directors of Parent from May 2022 to September 2022, after serving as President and CEO since 2015. Mr. Lee retired as Parent’s President and CEO in 2022. Mr. Lee is the independent Chair of the Board of Directors of Advance Auto Parts, Inc., a leading automotive aftermarket parts provider in North America, and has been a director since 2015.
Nana Mensah*   Director		Mr. Mensah has been a director of Parent since 2016. He has also been the Chairman and Chief Executive Officer of ‘XPORTS, Inc., a privately-held company that exports food packaging and food processing equipment to distributors and wholesalers outside of the United States, since 2005.
William S. Simon*   Director		Mr. Simon has been a director of Parent since 2014, and previously served as a director from 2012 until 2014 and rejoined in October 2014. Mr. Simon has been Senior Advisor to KKR & Co., an investment firm, since 2014, and President of WSS Venture Holdings, LLC, a consulting and investment company, since 2014. Mr. Simon has served as a director of HanesBrands Inc., a global manufacturer of apparel, since 2021. Mr. Simon previously served as a director of Anixter International, Inc., a global distributor of communication and security products, electrical wire and cable, from 2019 to 2020, Chico’s FAS, Inc., an apparel retailer, from 2016 to 2021, GameStop Corp., a global video game retailer, from 2020 to 2021,  Academy Sports and Outdoors, Inc., a premier sports, outdoor and lifestyle retailer, from 2020 to 2021, and Equity Distribution Acquisition Corp., a special purpose acquisition company, from 2020 to 2022.
Charles M. Sonsteby*   Director		Mr. Sonsteby is currently the Lead Independent Director of Parent and has been a director since 2014. Mr. Sonsteby is the retired Vice Chairman of The Michaels Companies, Inc., the largest arts and crafts specialty retailer in North America and parent company of Michaels Stores, Inc., a role he held from June 2016 until his retirement in October 2017. Mr. Sonsteby has been a director of Valvoline, Inc., a producer and distributor of industrial and automotive lubricants and automotive chemicals, since 2016.

 

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Name and Position		Present Principal Occupation or Employment; Material Positions Held During the Last Five Years; Citizenship (if not United States)
Timothy J. Wilmott*   Director		Mr. Wilmott has been a director of Parent since 2018. Mr. Wilmott is the retired Chief Executive Officer of Penn National Gaming, Inc., an operator or owner of gaming and racing facilities and video gaming terminal operations with a focus on slot machine entertainment, a role he held from 2013 until his retirement in December 2019. Mr. Wilmott was a director of Penn National Gaming, Inc., from 2014 to 2019.
Matthew R. Broad   Senior Vice President, General Counsel, Chief Compliance Officer and Corporate Secretary		See above.
Todd A. Burrowes   President, LongHorn Steakhouse		Todd A. Burrowes has served as President, LongHorn Steakhouse since 2015.
Susan M. Connelly   Senior Vice President, Chief Communications and Public Affairs Officer		Ms. Connelly has served as Senior Vice President, Chief Communications and Public Affairs Officer since 2019. She served as Senior Vice President, Communications and Corporate Affairs from 2015 to 2019.
Daniel J. Kiernan   President, Olive Garden		Mr. Kiernan has served as President, Olive Garden since 2018.
Sarah H. King   Senior Vice President, Chief People and Diversity Officer		Ms. King has served as Senior Vice President, Chief People and Diversity Officer since May 2021, prior to which she served as Senior Vice President, Chief Human Resources Officer since 2017.
John W. Madonna   Senior Vice President, Corporate Controller		See above.
M. John Martin   President, Specialty Restaurant Group		Mr. Martin has served as President, Specialty Restaurant Group since August 2020, prior to which he served as President of Seasons 52 since 2018, President of Eddie V’s since 2014 and President of The Capital Grille since 2004.
Douglas J. Milanes   Senior Vice President, Chief Supply Chain Officer		Mr. Milanes has served as Senior Vice President, Chief Supply Chain Officer since 2015.
Richard L. Renninger   Senior Vice President, Chief Development Officer		Richard L. Renninger has been Senior Vice President, Chief Development Officer since 2016.
Rajesh Vennam   Senior Vice President, Chief Financial Officer		See above.

 

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The Letter of Transmittal, certificates for Shares and any other required documents should be sent by each stockholder of the Company or such stockholder’s broker, dealer, commercial bank, trust company or other nominee to the Depositary as follows:

The Depositary for the Offer is:

 

By Mail or Overnight Courier:

American Stock Transfer & Trust Company, LLC

Operations Center

Attn: Reorganization Department

6201 15th Avenue

Brooklyn, New York 11219

Any questions or requests for assistance may be directed to the Information Agent at its telephone number and location listed below. Requests for additional copies of this Offer to Purchase and the Letter of Transmittal may be directed to the Information Agent at its telephone number and location listed below. You may also contact your broker, dealer, commercial bank or trust company or other nominee for assistance concerning the Offer.

The Information Agent for the Offer is:

 

Okapi Partners LLC

1212 Avenue of the Americas, 17th Floor

New York, New York 10036

Bankers and Brokers Call: (212) 297-0720

Others Call Toll Free: (844) 202-6026

Email: info@okapipartners.com

Exhibit (a)(1)(B)

LETTER OF TRANSMITTAL

To Tender Shares of Common Stock

of

RUTH’S HOSPITALITY GROUP, INC.

at

$21.50 net per share in cash

Pursuant to the Offer to Purchase, dated May 16, 2023

by

RUBY ACQUISITION CORPORATION,

an indirect, wholly owned subsidiary of

DARDEN RESTAURANTS, INC.

 

The Depositary for the Offer is:

American Stock Transfer & Trust Company

By Mail or Overnight Courier:

American Stock Transfer & Trust Company, LLC

Operations Center

Attn: Reorganization Department

6201 15th Avenue

Brooklyn, New York 11219

For assistance, please call the Information Agent:

Bankers and Brokers Call (212) 297-0720 and

Others Call Toll Free at (844) 202-6026

Delivery of this Letter of Transmittal to an address other than as set forth above will not constitute a valid delivery to the Depositary (as defined below). If you are delivering via mail, you must sign this Letter of Transmittal in the appropriate space provided therefor below, with signature guaranteed, if required, and complete the Internal Revenue Service (the “IRS”) Form W-9 included in this Letter of Transmittal, if required. Stockholders who are foreign persons should submit a properly completed and executed IRS Form W-8BEN or other appropriate IRS Form W-8. Failure to provide the information on IRS Form W-9 or an appropriate IRS Form W-8, as applicable, may subject you to United States federal income tax backup withholding on any payments made to you pursuant to the Offer (as defined below). The instructions set forth in this Letter of Transmittal should be read carefully before you tender any of your Shares (as defined below) into the Offer.

DESCRIPTION OF SHARES TENDERED

 

Name(s) and Address(es) of Registered Owner(s) (Please fill in, if blank, exactly as name(s) appear(s) on certificate(s))		Shares Tendered (attach additional list if necessary)
		**Certificated Shares
		Certificate Number(s)*		Total Number of Shares Represented by Certificate(s)*		Number of Shares Tendered**		Book Entry Shares Tendered
		Total Shares
		*   Need not be completed by book-entry stockholders. **   Unless otherwise indicated, it will be assumed that all Shares     represented by certificates described above are being tendered     hereby.

☐ If any certificate(s) representing shares of stock that you own have been lost or destroyed, check this box and see Instruction 9. Please fill out the remainder of this Letter of Transmittal and indicate here the number of shares of stock represented by the lost or destroyed certificates.                          (Number of Shares)

The Offer is being made to all holders of Shares. However, the Offer is not being made to (and no tenders will be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, “blue sky” or other laws of such jurisdiction. Purchaser may, in its discretion, take such action as it deems necessary to make the Offer to holders of Shares in any such jurisdiction in compliance with such applicable laws. In any jurisdictions where applicable laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by Purchaser.

This Letter of Transmittal is to be used by stockholders of Ruth’s Hospitality Group, Inc., a Delaware corporation (the “Company”), if certificates (“Certificates”) for shares of common stock, par value $0.01 per share, of the Company (the “Shares”) are to be forwarded herewith or, unless an Agent’s Message (as defined in Section 3 of the Offer to Purchase, dated May 16, 2023 (the “Offer to Purchase”)) is utilized, if delivery of Shares is to be made by book-entry transfer to an account maintained by the Depositary at The Depositary Trust Company (“DTC”) (as described in Section 2 of the Offer to Purchase and pursuant to the procedures set forth in Section 3 thereof).

Stockholders whose Certificates are not immediately available, or who cannot complete the procedure for book-entry transfer on a timely basis, or who cannot deliver all other required documents to the Depositary prior to the Expiration Time, may nevertheless tender their Shares according to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. See Instruction 2 below. Delivery of documents to DTC does not constitute delivery to the Depositary.

 

☐	CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH DTC AND COMPLETE THE FOLLOWING (NOTE THAT ONLY FINANCIAL INSTITUTIONS THAT ARE PARTICIPANTS IN DTC MAY DELIVER SHARES BY BOOK-ENTRY TRANSFER):

Name of Tendering Institution:                                                                                                                                                    

DTC Account Number:                                                                       Transaction Code Number:                                             

 

☐	CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:

Name(s) of Tendering Stockholder(s):                                                                                                                                       

Window Ticket Number (if any) or DTC Account Number:                                                                                                      

Date of Execution of Notice of Guaranteed Delivery:                                                                                                                

Name of Eligible Institution that Guaranteed Delivery:                                                                                                             

NOTE: SIGNATURES MUST BE PROVIDED BELOW.

PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY.

 

2

Ladies and Gentlemen:

The undersigned hereby tenders to Ruby Acquisition Corporation, a Delaware corporation (“Purchaser”), and an indirect, wholly owned subsidiary of Darden Restaurants, Inc., a Florida corporation (“Parent”), the above described shares of common stock, par value $0.01 per share (the “Shares”), of Ruth’s Hospitality Group, Inc., a Delaware corporation (the “Company”), pursuant to Purchaser’s offer to purchase each issued and outstanding Share that is validly tendered and not properly withdrawn, at a price of $21.50 per Share, without interest, net to the seller in cash, less any applicable withholding taxes, upon the terms and subject to the conditions (including the Minimum Condition) described in the Offer to Purchase, dated May 16, 2023 (the “Offer to Purchase”), and in this Letter of Transmittal (the “Letter of Transmittal” which, together with the Offer to Purchase, as each may be amended and supplemented from time to time, collectively constitute the “Offer”), receipt of which is hereby acknowledged.

Upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms of any such extension or amendment), and effective upon acceptance for payment of the Shares tendered herewith and not validly withdrawn on or prior to the Offer Expiration Time (as defined in the Offer to Purchase) in accordance with the terms of the Offer, the undersigned hereby sells, assigns and transfers to or upon the order of Purchaser all right, title and interest in and to all of the Shares that are being tendered hereby (and any and all dividends, distributions, rights, other Shares or other securities issued or issuable in respect thereof on or after the date hereof (collectively, “Distributions”)) and irrevocably constitutes and appoints Purchaser the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares (and any and all Distributions), with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest in the Shares tendered by this Letter of Transmittal), to (i) deliver Certificates for such Shares (and any and all Distributions) or transfer ownership of such Shares (and any and all Distributions) on the account books maintained by The Depositary Trust Company (“DTC”) or otherwise held in book-entry form, together, in any such case, with all accompanying evidences of transfer and authenticity, to or upon the order of Purchaser, (ii) present such Shares (and any and all Distributions) for transfer on the books of the Company and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares (and any and all Distributions), all in accordance with the terms and subject to the conditions of the Offer.

By executing this Letter of Transmittal (or taking action resulting in the delivery of an Agent’s Message, as defined in Section 3 of the Offer to Purchase), the undersigned hereby irrevocably appoints each of the designees of Purchaser the attorneys-in-fact and proxies of the undersigned, each with full power of substitution, to (i) vote at any annual or special meeting of Company stockholders or any adjournment or postponement thereof or otherwise in such manner as each such attorney-in-fact and proxy or its, his or her substitute shall in its, his or her sole discretion deem proper with respect to, (ii) execute any written consent concerning any matter as each such attorney-in-fact and proxy or its, his or her substitute shall in its, his or her sole discretion deem proper with respect to and (iii) otherwise act as each such attorney-in-fact and proxy or its, his or her substitute shall in its, his or her sole discretion deem proper with respect to, all of the Shares (and any and all Distributions) tendered hereby and accepted for payment by Purchaser. This appointment will be effective if and when, and only to the extent that, Purchaser accepts such Shares for payment pursuant to the Offer. This power of attorney and proxy are irrevocable and are granted in consideration of the acceptance for payment of such Shares in accordance with the terms of the Offer. Such acceptance for payment shall, without further action, revoke any prior powers of attorney and proxies granted by the undersigned at any time with respect to such Shares (and any and all Distributions), and no subsequent powers of attorney, proxies, consents or revocations may be given by the undersigned with respect thereto (and, if given, will not be deemed effective). Purchaser reserves the right to require that, in order for the Shares to be deemed validly tendered, immediately upon Purchaser’s acceptance for payment of such Shares, Purchaser or its designees must be able to exercise full voting, consent and other rights with respect to such Shares (and any and all Distributions), including voting at any meeting of Company stockholders.

The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer any and all Shares tendered hereby (and all Distributions) and that, when the same are accepted for payment by Purchaser, Purchaser will acquire good, marketable and unencumbered title to such Shares (and all Distributions), free and clear of all liens, restrictions, charges and encumbrances, and the same will not be subject to any adverse claims. The undersigned hereby represents and warrants that the undersigned is the registered owner of the Shares, or the Certificate(s) have been endorsed to the undersigned in blank, or the undersigned is a participant in DTC whose name appears on a security position listing as the owner of the Shares. The undersigned will, upon request, execute and deliver any additional documents deemed by the Depositary or Purchaser to be necessary or desirable to complete the sale, assignment and transfer of any and all Shares tendered hereby (and all Distributions). In addition, the undersigned shall promptly remit and transfer to the

 

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Depositary for the account of Purchaser all Distributions in respect of any and all Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance and transfer or appropriate assurance thereof, Purchaser shall be entitled to all rights and privileges as owner of each such Distribution and may deduct from the purchase price of Shares tendered hereby the amount or value of such Distribution as determined by Purchaser in its sole discretion.

It is understood that the undersigned will not receive payment for the Shares unless and until the Shares are accepted for payment and until the Certificate(s) owned by the undersigned are received by the Depositary at the address set forth above, together with such additional documents as the Depositary may require, or, in the case of Shares held in book-entry form, ownership of Shares is validly transferred on the account books maintained by DTC, and until the same are processed for payment by the Depositary.

IT IS UNDERSTOOD THAT THE METHOD OF DELIVERY OF THE SHARES, THE CERTIFICATE(S) AND ALL OTHER REQUIRED DOCUMENTS (INCLUDING DELIVERY THROUGH DTC) IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER AND THAT THE RISK OF LOSS OF SUCH SHARES, CERTIFICATE(S) AND OTHER DOCUMENTS SHALL PASS ONLY AFTER THE DEPOSITARY HAS ACTUALLY RECEIVED THE SHARES OR MATERIALS (INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION (AS DEFINED IN THE OFFER TO PURCHASE)). IF DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT ALL SUCH DOCUMENTS BE SENT BY PROPERLY INSURED REGISTERED MAIL WITH RETURN RECEIPT REQUESTED. DELIVERY WILL BE DEEMED EFFECTIVE AND RISK OF LOSS AND TITLE WILL PASS FROM THE TENDERING STOCKHOLDER ONLY WHEN RECEIVED BY THE DEPOSITARY. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

All authority herein conferred or agreed to be conferred shall not be affected by, and shall survive, the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, successors and assigns of the undersigned. Except as stated in the Offer to Purchase, this tender is irrevocable.

The undersigned understands that the valid tender of Shares pursuant to any of the procedures described in the Offer to Purchase and in the Instructions hereto will constitute the undersigned’s acceptance of the terms and conditions of the Offer. Purchaser’s acceptance of such Shares for payment will constitute a binding agreement between the undersigned and Purchaser upon the terms and subject to the conditions of the Offer (and if the Offer is extended or amended, the terms of or the conditions of any such extension or amendment). The undersigned recognizes that under certain circumstances set forth in the Offer, Purchaser may not be required to accept for exchange any Shares tendered hereby.

Unless otherwise indicated under “Special Payment Instructions,” Purchaser will issue the check for the purchase price of all of the Shares purchased and, if appropriate, return any Certificates not tendered or accepted for payment in the name(s) of the registered holder(s) appearing above under “Description of Shares Tendered.” Similarly, unless otherwise indicated under “Special Delivery Instructions,” Purchaser will mail the check for the purchase price of all Shares purchased and, if appropriate, return any Certificates not tendered or not accepted for payment (and any accompanying documents, as appropriate) to the address(es) of the registered holder(s) appearing above under “Description of Shares Tendered.” In the event that the boxes entitled “Special Payment Instructions” and “Special Delivery Instructions” are both completed, Purchaser will issue the check for the purchase price of all Shares purchased and, if appropriate, return any Certificates not tendered or not accepted for payment (and any accompanying documents, as appropriate) in the name(s) of, and deliver such check and, if appropriate, return any such Certificates (and any accompanying documents, as appropriate) to, the person(s) so indicated. Unless otherwise indicated herein in the box entitled “Special Payment Instructions,” Purchaser will credit any Shares tendered herewith by book-entry transfer that are not accepted for payment by crediting the account at DTC. The undersigned recognizes that Purchaser has no obligation, pursuant to the “Special Payment Instructions,” to transfer any

 

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Shares from the name of the registered holder thereof if Purchaser does not accept for payment any of such Shares so tendered.

 

 

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IMPORTANT — STOCKHOLDERS SIGN HERE

(U.S. Holders Also Please Complete IRS Form W-9 Below)

(Non-U.S. Holders Please Obtain and Complete IRS Form W-8BEN or Other IRS Form W-8)

Must be signed by registered holder(s) exactly as name(s) appear(s) on Certificate(s) or on a security position listing or by person(s) authorized to become registered holder(s) by Certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or other person acting in a fiduciary or representative capacity, please set forth full title and see Instruction 5.

 

Signature(s) of Holder(s) of Shares
Dated:

Name(s):
(Please print)

Capacity (full title) (See Instruction 5):

Address:

(Including Zip Code)

Area Code and Telephone No.:

Tax Identification or Social Security No. (See IRS Form W-9 included herein):

GUARANTEE OF SIGNATURE(S) (IF REQUIRED—SEE INSTRUCTIONS 1 AND 5)

Authorized Signature:

Dated:

Name:

 

Name of Firm:

Address:

(Including Zip Code)
Place medallion guarantee in space below:

 

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INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

1. Guarantee of Signatures. Signatures on all Letters of Transmittal must be guaranteed by a financial institution that is a member of a Securities Transfer Association approved medallion program such as STAMP, SEMP or MSP (an “Eligible Institution”), except in cases where securities are surrendered (i) by a registered holder of the securities who has not completed either the box entitled “Special Payment/Issuance Instructions” or the box entitled “Special Delivery Instructions” on the Letter of Transmittal or (ii) for the account of an Eligible Institution. See Instruction 6.

2. Requirements of Tender. No alternative, conditional or contingent tenders will be accepted. In order for Shares to be validly tendered pursuant to the Offer, one of the following procedures must be followed:

For Shares held as physical certificates, the Certificates representing tendered Shares, a properly completed and duly executed Letter of Transmittal, together with any required signature guarantees, and any other documents required by this Letter of Transmittal, must be received by the Depositary at its addresses set forth on the front page of this Letter of Transmittal before the Expiration Time.

For Shares held in book-entry form, either a properly completed and duly executed Letter of Transmittal, together with any required signature guarantees, or an Agent’s Message in lieu of this Letter of Transmittal, and any other required documents, must be received by the Depositary at its addresses set forth on the front page of this Letter of Transmittal, and such Shares must be delivered according to the book-entry transfer procedures (as set forth in Section 3 of the Offer to Purchase) and a timely confirmation of a book-entry transfer of Shares into the Depositary’s account at DTC (a “Book-Entry Confirmation”) must be received by the Depositary, in each case before the Expiration Time.

Stockholders whose Certificates are not immediately available, or who cannot complete the procedure for delivery by book-entry transfer on a timely basis or who cannot deliver all other required documents to the Depositary prior to the Expiration Time may tender their Shares by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase. Pursuant to such procedure: (i) such tender must be made by or through an Eligible Institution, (ii) a properly completed and duly executed notice of guaranteed delivery (a “Notice of Guaranteed Delivery”), substantially in the form made available by Purchaser, must be received by the Depositary prior to the Expiration Time and (iii) Certificates (or a Book-Entry Confirmation) evidencing all tendered Shares, in proper form for transfer, in each case together with this Letter of Transmittal, properly completed and duly executed, together with any required signature guarantees, or, in the case of book-entry transfers of Shares, either this Letter of Transmittal or an Agent’s Message in lieu of this Letter of Transmittal, and any other documents required by this Letter of Transmittal, must be received by the Depositary within two Nasdaq Global Select Market trading days after the date of execution of such Notice of Guaranteed Delivery. A Notice of Guaranteed Delivery may be delivered by overnight courier or mailed to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in the form of Notice of Guaranteed Delivery made available by Purchaser. In the case of Shares held through DTC, the Notice of Guaranteed Delivery must be delivered to the Depositary by a participant in DTC by means of the confirmation system of DTC.

The term “Agent’s Message” means a message transmitted by DTC to, and received by, the Depositary and forming part of a Book-Entry Confirmation that states that DTC has received an express acknowledgment from the participant in DTC tendering the Shares that are the subject of such Book-Entry Confirmation that such participant has received and agrees to be bound by the terms of this Letter of Transmittal and that Purchaser may enforce such agreement against the participant.

The method of delivery of Shares, the Certificate(s), this Letter of Transmittal and all other required documents, including delivery through DTC, is at the election and risk of the tendering stockholder. Shares will be deemed delivered (and the risk of loss of Certificates will pass) only when actually received by the Depositary (including, in the case of a book-entry transfer, by Book-Entry Confirmation). If delivery is by mail, then registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery.

No fractional Shares will be purchased. By executing this Letter of Transmittal, the tendering stockholder waives any right to receive any notice of the acceptance for payment of Shares.

3. Inadequate Space. If the space provided on the Letter of Transmittal is inadequate, the certificate numbers and the number of shares should be listed on a separate schedule to be attached hereto.

 

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4. Partial Tenders (Not Applicable to Stockholders who Tender by Book-Entry Transfer). If fewer than all Shares represented by any Certificate delivered to the Depositary are to be tendered, fill in the number of Shares that are to be tendered in the applicable row of the column entitled “Number of Shares Tendered.” In such case, a new certificate for the remainder of Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the appropriate box on this Letter of Transmittal, as promptly as practicable following the expiration or termination of the Offer. All Shares represented by Certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated.

5. Special Payment and Delivery Instructions. If a check is to be issued for the purchase price of any Shares tendered by this Letter of Transmittal in the name of, and, if appropriate, Certificates for Shares not tendered or not accepted for payment are to be issued to, any person(s) other than the signer of this Letter of Transmittal or if a check and, if appropriate, such Certificates are to be returned to any person(s) other than the person(s) signing this Letter of Transmittal or to an address other than that shown in this Letter of Transmittal, then the appropriate boxes on this Letter of Transmittal must be completed. Except as otherwise provided in this Instruction 5, Purchaser or any successor entity thereto will pay all stock transfer taxes with respect to the transfer and sale of any Shares to it pursuant to the Offer. If, however, payment of the purchase price is to be made to, or if Certificates for Shares not tendered or not accepted for payment are to be registered in the name of, any person(s) other than the registered holder(s), or if tendered Certificates for Shares are registered in the name of any person(s) other than the person(s) signing this Letter of Transmittal, the amount of any stock transfer taxes (whether imposed on the registered holder(s) or such other person(s)) payable on account of the transfer to such other person(s) will be deducted from the purchase price of such Shares purchased unless evidence satisfactory to Purchaser of the payment of such taxes, or exemption therefrom, is submitted.

6. Signatures on Letter of Transmittal; Stock Powers and Endorsements.

(a) Exact Signatures. If this Letter of Transmittal is signed by the registered holder(s) of Shares tendered hereby, then the signature(s) must correspond with the name(s) as written on the face of such Certificates for such Shares without alteration, enlargement or any change whatsoever.

(b) Holders. If any Shares tendered hereby are held of record by two or more persons, then all such persons must sign this Letter of Transmittal.

(c) Different Names on Certificates. If any Shares tendered hereby are registered in different names on different Certificates, then it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of Certificates.

(d) Endorsements. If this Letter of Transmittal is signed by the registered holder(s) of Shares tendered hereby, then no endorsements of Certificates for such Shares or separate stock powers are required unless payment of the purchase price is to be made, or Certificate for Shares not tendered or not purchased are to be returned, in the name of any person other than the registered holder(s). Signatures on any such Certificates or stock powers must be guaranteed by an Eligible Institution.

If this Letter of Transmittal is signed by a person other than the registered holder(s) of Shares tendered hereby, then Certificates for such Shares must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on such Certificates for such Shares. Signature(s) on any such Certificates or stock powers must be guaranteed by an Eligible Institution. See Instruction 1.

If this Letter of Transmittal or any Certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other legal entity or other person acting in a fiduciary or representative capacity, then such person should so indicate when signing, and proper evidence satisfactory to the Depositary of the authority of such person so to act must be submitted. Proper evidence of authority includes a power of attorney, a letter of testamentary or a letter of appointment.

7. IRS Form W-9. Please follow instructions contained within the IRS Form W-9. If you are a foreign person, you must provide a properly completed and executed IRS Form W-8BEN or other appropriate IRS Form W-8, which you can obtain from the Depositary.

 

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8. Questions and Requests for Additional Copies. The Information Agent may be contacted at the address and telephone number set forth on the last page of this Letter of Transmittal for questions and/or requests for additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance. Such copies will be furnished promptly at Purchaser’s expense.

9. Lost, Destroyed or Stolen Certificates. If any stock certificates have been lost, stolen or destroyed, please so indicate on the front of the Letter of Transmittal, and additional paperwork will be sent to you to replace the lost, stolen or destroyed certificates.

Certificates evidencing tendered Shares, or a Book-Entry Confirmation into the Depositary’s account at DTC, as well as this Letter of Transmittal, properly completed and duly executed, with any required signature guarantees, or an Agent’s Message (if utilized in lieu of this Letter of Transmittal in connection with a book-entry transfer), and any other documents required by this Letter of Transmittal, must be received before the Expiration Time, or the tendering stockholder must comply with the procedures for guaranteed delivery.

All questions as to the validity, form and eligibility of any surrender of certificates will be determined by the Purchaser, and such determination shall be final and binding. Purchaser reserves the right to waive any irregularities or defects in the surrender of any certificates. A surrender will not be deemed to have been made until all irregularities have been cured or waived. Neither the Depositary nor Purchaser is under any obligation to waive or to provide any notification of any irregularities or defects in the surrender of any Certificates, nor shall the Depositary or Purchaser be liable for any failure to give such notification.

 

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Form  W-9   (Rev. October 2018) Department of the Treasury Internal Revenue Service		Request for Taxpayer Identification Number and Certification   u Go to www.irs.gov/FormW9 for instructions and the latest information.		Give Form to the requester. Do not send to the IRS.

Print or type See Specific Instructions on page 3.

1  Name (as shown on your income tax return). Name is required on this line; do not leave this line blank.

2  Business name/disregarded entity name, if different from above

3  Check appropriate box for federal tax classification of the person whose name is entered on line 1. Check only one of the following seven boxes.

4 Exemptions (codes apply only to certain entities, not individuals; see instructions on page 3):   Exempt payee code (if any)                        Exemption from FATCA reporting code (if any)                                        (Applies to accounts maintained outside the U.S.)

☐  Individual/sole proprietor or        single-member LLC

☐

C Corporation

☐

S Corporation

☐

Partnership

☐

Trust/estate

☐ Limited liability company. Enter the tax classification (C=C corporation, S=S corporation, P=Partnership) u                                   Note: Check the appropriate box in the line above for the tax classification of the single-member owner. Do not check LLC if the LLC is classified as a single-member LLC that is disregarded from the owner unless the owner of the LLC is another LLC that is not disregarded from the owner for U.S. federal tax purposes. Otherwise, a single-member LLC that is disregarded from the owner should check the appropriate box for the tax classification of its owner.   ☐ Other (see instructions) u

5  Address (number, street, and apt. or suite no.) See instructions.

Requester’s name and address (optional)

6  City, state, and ZIP code

7  List account number(s) here (optional)

Part I		Taxpayer Identification Number (TIN)

Enter your TIN in the appropriate box. The TIN provided must match the name given on line 1 to avoid backup withholding. For individuals, this is generally your social security number (SSN). However, for a resident alien, sole proprietor, or disregarded entity, see the instructions for Part I, later. For other entities, it is your employer identification number (EIN). If you do not have a number, see How to get a TIN, later.

Social security number

-

-

or

Note: If the account is in more than one name, see the instructions for line 1. Also see What Name and Number To Give the Requester for guidelines on whose number to enter.

Employer identification number

-

Part II		Certification

Under penalties of perjury, I certify that:

 

1.

The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and

 

2.

I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and

 

3.

I am a U.S. citizen or other U.S. person (defined below); and

 

4.

The FATCA code(s) entered on this form (if any) indicating that I am exempt from FATCA reporting is correct.

Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return. For real estate transactions, item 2 does not apply. For mortgage Interest paid, acquisition or abandonment of secured property, cancellation of debt, contributions to an individual retirement arrangement (IRA), and generally, payments other than interest and dividends, you are not required to sign the certification, but you must provide your correct TIN. See the instructions for Part II, later.

 

Sign Here		Signature of     U.S. person  u		Date   u

 

General Instructions

Section references are to the Internal Revenue Code unless otherwise noted.

Future developments. For the latest information about developments related to Form W-9 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/FormW9.

Purpose of Form

An individual or entity (Form W-9 requester) who is required to file an information return with the IRS must obtain your correct taxpayer identification number (TIN) which may be your social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN), to report on an information return the amount paid to you, or other amount reportable on an information return. Examples of information returns include, but are not limited to, the following.

• Form 1099-INT (interest earned or paid)

 

• Form 1099-DIV (dividends, including those from stocks or mutual funds)

• Form 1099-MISC (various types of income, prizes, awards, or gross proceeds)

• Form 1099-B (stock or mutual fund sales and certain other transactions by brokers)

• Form 1099-S (proceeds from real estate transactions)

• Form 1099-K (merchant card and third party network transactions)

• Form 1098 (home mortgage interest), 1098-E (student loan interest), 1098-T (tuition)

• Form 1099-C (canceled debt)

• Form 1099-A (acquisition or abandonment of secured property)

Use Form W-9 only if you are a U.S. person (including a resident alien), to provide your correct TIN.

If you do not return Form W-9 to the requester with a TIN, you might be subject to backup withholding. See What is backup withholding, later.

 

 

 

		Cat. No. 10231X		Form W-9 (Rev. 10-2018)

 

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Form W-9 (Rev. 10-2018)		Page 2

 

 

 

11

Form W-9 (Rev. 10-2018)		Page 3

 

 

 

12

Form W-9 (Rev. 10-2018)		Page 4

 

 

The following chart shows types of payments that may be exempt from backup withholding. The chart applies to the exempt payees listed above, 1 through 13.

 

IF the payment is for . . .		THEN the payment is exempt for . . .
Interest and dividend payments		All exempt payees except for 7
Broker transactions		Exempt payees 1 through 4 and 6 through 11 and all C corporations. S corporations must not enter an exempt payee code because they are exempt only for sales of noncovered securities acquired prior to 2012.
Barter exchange transactions and patronage dividends		Exempt payees 1 through 4
Payments over $600 required to be reported and direct sales over $5,000 1		Generally, exempt payees 1 through 52
Payments made in settlement of payment card or third party network transactions		Exempt payees 1 through 4

1	See Form 1099-MISC, Miscellaneous Income, and its instructions.

2

However, the following payments made to a corporation and reportable on Form 1099-MISC are not exempt from backup withholding: medical and health care payments, attorneys’ fees, gross proceeds paid to an attorney reportable under section 6045(f), and payments for services paid by a federal executive agency.

Exemption from FATCA reporting code. The following codes identify payees that are exempt from reporting under FATCA. These codes apply to persons submitting this form for accounts maintained outside of the United States by certain foreign financial institutions. Therefore, if you are only submitting this form for an account you hold in the United States, you may leave this field blank. Consult with the person requesting this form if you are uncertain if the financial institution is subject to these requirements. A requester may indicate that a code is not required by providing you with a Form W-9 with “Not Applicable” (or any similar indication) written or printed on the line for a FATCA exemption code.

A—An organization exempt from tax under section 501(a) or any individual retirement plan as defined in section 7701(a)(37)

B—The United States or any of its agencies or instrumentalities

C—A state, the District of Columbia, a U.S. commonwealth or possession, or any of their political subdivisions or instrumentalities

D—A corporation the stock of which is regularly traded on one or more established securities markets, as described in Regulations section 1.1472-1(c)(1)(i)

E—A corporation that is a member of the same expanded affiliated group as a corporation described in Regulations section 1.1472-1(c)(1)(i)

F—A dealer in securities, commodities, or derivative financial instruments (including notional principal contracts, futures, forwards, and options) that is registered as such under the laws of the United States or any state

G—A real estate investment trust

H—A regulated investment company as defined in section 851 or an entity registered at all times during the tax year under the Investment Company Act of 1940

I—A common trust fund as defined in section 584(a)

J—A bank as defined in section 581

K—A broker

L—A trust exempt from tax under section 664 or described in section 4947(a)(1)

M—A tax exempt trust under a section 403(b) plan or section 457(g) plan

Note: You may wish to consult with the financial institution requesting this form to determine whether the FATCA code and/or exempt payee code should be completed.

Line 5

Enter your address (number, street, and apartment or suite number). This is where the requester of this Form W-9 will mail your information returns. If this address differs from the one the requester already has on file, write NEW at the top. If a new address is provided, there is still a chance the old address will be used until the payor changes your address in their records.

Line 6

Enter your city, state, and ZIP code.

Part I. Taxpayer Identification Number (TIN)

Enter your TIN in the appropriate box. If you are a resident alien and you do not have and are not eligible to get an SSN, your TIN is your IRS individual taxpayer identification number (ITIN). Enter it in the social security number box. If you do not have an ITIN, see How to get a TIN below.

If you are a sole proprietor and you have an EIN, you may enter either your SSN or EIN.

If you are a single-member LLC that is disregarded as an entity separate from its owner, enter the owner’s SSN (or EIN, if the owner has one). Do not enter the disregarded entity’s EIN. If the LLC is classified as a corporation or partnership, enter the entity’s EIN.

Note: See What Name and Number To Give the Requester, later, for further clarification of name and TIN combinations.

How to get a TIN. If you do not have a TIN, apply for one immediately. To apply for an SSN, get Form SS-5, Application for a Social Security Card, from your local SSA office or get this form online at www.SSA.gov. You may also get this form by calling 1-800-772-1213. Use Form W-7, Application for IRS Individual Taxpayer Identification Number, to apply for an ITIN, or Form SS-4, Application for Employer Identification Number, to apply for an EIN. You can apply for an EIN online by accessing the IRS website at www.irs.gov/ Businesses and clicking on Employer Identification Number (EIN) under Starting a Business. Go to www.irs.gov/Forms to view, download, or print Form W-7 and/or Form SS-4. Or, you can go to www.irs.gov/OrderForms to place an order and have Form W-7 and/or SS-4 mailed to you within 10 business days.

If you are asked to complete Form W-9 but do not have a TlN, apply for a TlN and write “Applied For” in the space for the TIN, sign and date the form, and give it to the requester. For interest and dividend payments, and certain payments made with respect to readily tradable instruments, generally you will have 60 days to get a TIN and give it to the requester before you are subject to backup withholding on payments. The 60-day rule does not apply to other types of payments. You will be subject to backup withholding on all such payments until you provide your TIN to the requester.

Note: Entering “Applied For” means that you have already applied for a TIN or that you intend to apply for one soon.

Caution: A disregarded U.S. entity that has a foreign owner must use the appropriate Form W-8.

Part II. Certification

To establish to the withholding agent that you are a U.S. person, or resident alien, sign Form W-9. You may be requested to sign by the withholding agent even if item 1, 4, or 5 below indicates otherwise.

For a joint account, only the person whose TIN is shown in Part I should sign (when required). In the case of a disregarded entity, the person identified on line 1 must sign. Exempt payees, see Exempt payee code, earlier.

Signature requirements. Complete the certification as indicated in items 1 through 5 below.

1. Interest, dividend, and barter exchange accounts opened before 1984 and broker accounts considered active during 1983. You must give your correct TIN, but you do not have to sign the certification.

2. Interest, dividend, broker, and barter exchange accounts opened after 1983 and broker accounts considered inactive during 1983. You must sign the certification or backup withholding will apply. If you are subject to backup withholding and you are merely providing your correct TIN to the requester, you must cross out item 2 in the certification before signing the form.

3. Real estate transactions. You must sign the certification. You may cross out item 2 of the certification.

4. Other payments. You must give your correct TIN, but you do not have to sign the certification unless you have been notified that you have previously given an incorrect TIN. “Other payments” include payments made in the course of the requester’s trade or business for rents, royalties, goods (other than bills for merchandise), medical and health care services (including payments to corporations), payments to a nonemployee for services, payments made in settlement of payment card and third party network transactions, payments to certain fishing boat crew members and fishermen, and gross proceeds paid to attorneys (including payments to corporations).

 

 

13

Form W-9 (Rev. 10-2018)		Page 5

 

 

 

14

The Depositary for the Offer is:

 

By Mail or Overnight Courier:

American Stock Transfer & Trust Company, LLC

Operations Center

Attn: Reorganization Department

6201 15th Avenue

Brooklyn, New York 11219

Questions and requests for assistance may be directed to the Information Agent at the address and telephone number set forth below. Additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and other tender offer materials may also be obtained from the Information Agent. You may also contact your broker, dealer, commercial bank, trust company or other nominee for assistance.

The Information Agent for the Offer is:

 

Okapi Partners LLC

1212 Avenue of the Americas, 17th Floor

New York, New York 10036

Bankers and Brokers Call: (212) 297-0720

Others Call Toll Free: (844) 202-6026

Email: info@okapipartners.com

 

Exhibit (a)(1)(C)

NOTICE OF GUARANTEED DELIVERY

For Tender of Shares of Common Stock

of

RUTH’S HOSPITALITY GROUP, INC.

at

$21.50 net per share in cash

Pursuant to the Offer to Purchase, dated May 16, 2023

by

RUBY ACQUISITION CORPORATION,

an indirect, wholly owned subsidiary of

DARDEN RESTAURANTS, INC.

 

This Notice of Guaranteed Delivery, or one substantially in the form hereof, must be used to accept the Offer (as defined below) if (i) certificates representing shares of common stock, par value $0.01 per share (the “Shares”), of Ruth’s Hospitality Group, Inc., a Delaware corporation, are not immediately available, (ii) the procedure for book-entry transfer cannot be completed prior to the Offer Expiration Time or (iii) time will not permit all required documents to reach American Stock Transfer & Trust Company, LLC (the “Depositary”) prior to the Offer Expiration Time. This Notice of Guaranteed Delivery may be delivered by overnight courier or mailed to the Depositary. See Section 3 of the Offer to Purchase (as defined below).

The Depositary for the Offer is:

American Stock Transfer & Trust Company

By Mail or Overnight Courier:

American Stock Transfer & Trust Company, LLC

Operations Center

Attn: Reorganization Department

6201 15th Avenue

Brooklyn, New York 11219

FACSIMILE: (718) 234-5001

CONFIRM: (718) 921-8317

The above number is for confirmation of facsimiles only. Do NOT call this number for questions on the Offer. All questions on the Offer should be directed to the Information Agent listed in the Offer to Purchase.

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.

THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN ELIGIBLE INSTITUTION (AS DEFINED IN SECTION 3 OF THE OFFER TO PURCHASE) UNDER THE INSTRUCTION THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE APPROPRIATE LETTER OF TRANSMITTAL.

The Eligible Institution that completes this Notice of Guaranteed Delivery must communicate the guarantee to the Depositary and must deliver the Letter of Transmittal (as defined below) or an Agent’s Message (as defined in Section 3 of the Offer to Purchase) and certificates for Shares (or Book-Entry Confirmation, as defined in Section 3 of the Offer to Purchase) to the Depositary within the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution.

Ladies and Gentlemen:

The undersigned represents that the undersigned owns and hereby tenders to Ruby Acquisition Corporation, a Delaware corporation and an indirect, wholly owned subsidiary of Darden Restaurants, Inc., a Florida corporation, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 16, 2023 (as it may be amended or supplemented from time to time, the “Offer to Purchase”), and the related letter of transmittal (as it may be amended or supplemented from time to time, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”), receipt of which is hereby acknowledged, the number of Shares specified below, pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.

 

Number of Shares and Certificate No(s): (if available)

Check here if Shares will be tendered by book-entry transfer. ☐

Name of Tendering Institution:
DTC Account Number:
Dated:
Name(s) of Record Holder(s):
(Please type or print)

Address(es):
		(Zip Code)
Area Code and Tel. No.
		(Daytime telephone number)
Signature(s):

GUARANTEE

(Not to be used for signature guarantee)

The undersigned, an Eligible Institution, hereby guarantees delivery to the Depositary, at its address set forth above, of certificates representing the Shares tendered hereby, in proper form for transfer, or a Book-Entry Confirmation of the Shares tendered hereby into the Depositary’s account at The Depository Trust Company (pursuant to the procedures set forth in Section 3 of the Offer to Purchase), in each case, together with a properly completed and duly executed Letter of Transmittal and any required signature guarantees, or, in the case of book-entry transfers of Shares, either such Letter of Transmittal or an Agent’s Message in lieu of such Letter of Transmittal, and any other documents required by the Letter of Transmittal, all within two Nasdaq Global Select Market trading days after the date of execution of this Notice of Guaranteed Delivery.

 

Name of Firm:

Address:

(Zip Code)

Area Code and Telephone No.:

(Authorized Signature)

Name:

(Please type or print)

Title:

Date:

NOTE:

DO NOT SEND CERTIFICATES REPRESENTING TENDERED SHARES WITH THIS NOTICE. CERTIFICATES REPRESENTING TENDERED SHARES SHOULD BE SENT WITH YOUR PROPERLY COMPLETED AND DULY EXECUTED LETTER OF TRANSMITTAL.

Exhibit (a)(1)(D)

Offer To Purchase

All Outstanding Shares of Common Stock

of

RUTH’S HOSPITALITY GROUP, INC.

at

$21.50 net per share in cash

Pursuant to the Offer to Purchase, dated May 16, 2023

by

RUBY ACQUISITION CORPORATION,

an indirect, wholly owned subsidiary of

DARDEN RESTAURANTS, INC.

 

May 16, 2023

To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

We have been engaged by Ruby Acquisition Corporation, a Delaware corporation (“Purchaser”) and an indirect, wholly owned subsidiary of Darden Restaurants, Inc., a Florida corporation (“Parent”), to act as Information Agent in connection with Purchaser’s offer to purchase any and all of the issued and outstanding shares of common stock, par value $0.01 per share, of Ruth’s Hospitality Group, Inc., a Delaware corporation (the “Company” and such shares, the “Shares”), at a price of $21.50 per Share, without interest (the “Offer Price”), net to the seller in cash, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated May 16, 2023 (together with any amendments or supplements thereto, the “Offer to Purchase”), and the related Letter of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”) enclosed herewith. Please furnish copies of the enclosed materials to those of your clients for whom you hold Shares registered in your name or in the name of your nominee.

THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY RECOMMENDED THAT COMPANY STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER.

The Offer not subject to any financing condition. The conditions to the Offer are described in Section 15 of the Offer to Purchase.

For your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of your nominee, we are enclosing the following documents:

1. The Offer to Purchase;

2. The Letter of Transmittal for your use in accepting the Offer and tendering Shares and for the information of your clients, together with the included Internal Revenue Service Form W-9;

3. A form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients’ instructions with regard to the Offer;

4. Notice of Guaranteed Delivery to be used to accept the Offer if certificates representing the Shares and all other required documents cannot be delivered to American Stock Transfer & Trust Company, LLC (the “Depositary”), prior to the Offer Expiration Time, if the procedure for delivery by book-entry transfer cannot be completed prior to the Offer Expiration Time, or if time will not permit all required documents to reach the Depositary prior to the Offer Expiration Time;

5. Return envelope for your use addressed to the Depositary at: American Stock Transfer & Trust Company, LLC Operations Center, Attn: Reorganization Department, 6201 15th Avenue, Brooklyn, New York 11219; and

6. The Company’s Solicitation/Recommendation Statement on Schedule 14D-9, dated May 16, 2023.

We urge you to contact your clients as promptly as possible. Please note that the Offer and withdrawal rights will expire at one minute following 11:59 p.m., New York City time, on Tuesday, June 13, 2023, unless the Offer is extended or earlier terminated (such date and time, as it may be extended, the “Offer Expiration Time”).

The Offer is being made in connection with the Agreement and Plan of Merger, dated as of May 2, 2023 (together with any amendments or supplements thereto, the “Merger Agreement”), by and among the Company, Parent and Purchaser, pursuant to which, as soon as practicable following the consummation of the Offer and upon the satisfaction or waiver of certain conditions, Purchaser will be merged with and into the Company (the “Merger”) without a vote of the stockholders of the Company to adopt the Merger Agreement and consummate the Merger in accordance with Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), with the Company continuing as the surviving corporation (the “surviving corporation”) in the Merger and thereby becoming a wholly owned subsidiary of Parent.

As a result of the Merger, each Share issued and outstanding immediately prior to the effective time of the Merger (the “effective time”) (other than Shares that are (i) held by a holder who is entitled to demand appraisal and who has (or for which the “beneficial owner” (as defined in Section 262(a) of the DGCL) has) properly exercised appraisal rights with respect thereto in accordance with, and who has (and, to the extent applicable, for which the applicable beneficial owner has) complied with, Section 262 of the DGCL with respect to any such Shares held by such holder (the “Dissenting Company Shares”) or (ii) held by the Company as treasury stock or owned by Parent, Purchaser or any of Parent’s other subsidiaries (including Shares acquired pursuant to the Offer)) will be cancelled and automatically converted into the right to receive the Offer Price in cash (without interest and less any applicable withholding taxes), which we refer to as the “Merger Consideration.” Shares described in clauses (i) and (ii) above will be cancelled at the effective time and will not be exchangeable for the Merger Consideration. The Dissenting Company Shares will entitle their holders only to the rights granted to them under Section 262 of the DGCL. Following the Merger, the Company will cease to be a publicly traded company.

THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY RECOMMENDED THAT COMPANY STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER.

For Shares to be properly tendered pursuant to the Offer, (a) the share certificates or confirmation of receipt of such Shares under the procedure for book-entry transfer, together with a properly completed and duly executed Letter of Transmittal, including any required signature guarantees, or, in the case of book-entry transfers, either such Letter of Transmittal or an Agent’s Message (as defined in Section 3 of the Offer to Purchase) in lieu of such Letter of Transmittal, and any other documents required in the Letter of Transmittal, must be timely received by the Depositary or (b) the tendering stockholder must comply with the guaranteed delivery procedures, all in accordance with the Offer to Purchase and the Letter of Transmittal.

Except as set forth in the Offer to Purchase, Purchaser will not pay any fees or commissions to any broker or dealer or other person, other than to us, as the Information Agent, and the Depositary, for soliciting tenders of Shares pursuant to the Offer. Purchaser will, however, upon request, reimburse brokers, dealers, commercial banks, trust companies and other nominees for customary mailing and handling expenses incurred by them in forwarding the offering material to their customers. Purchaser will pay all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 5 of the Letter of Transmittal.

Any inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed materials may be obtained from, the undersigned at the address and telephone numbers set forth below.

Very truly yours,

Okapi Partners LLC

Nothing contained herein or in the enclosed documents shall render you the agent of Parent, Purchaser, the Information Agent or the Depositary or any affiliate of any of them or authorize you or any other person to use any document or make any statement on behalf of any of them in connection with the Offer other than the enclosed documents and the statements contained therein.

 

Okapi Partners LLC

1212 Avenue of the Americas, 17th Floor

New York, New York 10036

Bankers and Brokers Call: (212) 297-0720

Others Call Toll Free: (844) 202-6026

Email: info@okapipartners.com

Exhibit (a)(1)(E)

Offer To Purchase

All Outstanding Shares of Common Stock

of

RUTH’S HOSPITALITY GROUP, INC.

at

$21.50 net per share in cash

Pursuant to the Offer to Purchase, dated May 16, 2023

by

RUBY ACQUISITION CORPORATION,

an indirect, wholly owned subsidiary of

DARDEN RESTAURANTS, INC.

 

May 16, 2023

To Our Clients:

Enclosed for your consideration are the Offer to Purchase, dated May 16, 2023 (the “Offer to Purchase”), and the related Letter of Transmittal (the “Letter of Transmittal” and which, together with the Offer to Purchase, as each may be amended or supplemented from time to time, constitute, the “Offer”) in connection with the offer by Ruby Acquisition Corporation, a Delaware corporation (“Purchaser”) and an indirect, wholly owned subsidiary of Darden Restaurants, Inc. (“Parent”), to purchase, subject to certain conditions, including the satisfaction of the Minimum Condition, as defined in the Offer to Purchase, any and all of the issued and outstanding shares of common stock, par value $0.01 per share, of Ruth’s Hospitality Group, Inc., a Delaware corporation (the “Company” and such shares, the “Shares”), at a price of $21.50 per Share, without interest (the “Offer Price”), net to the seller in cash, less any applicable withholding taxes, upon the terms and subject to the conditions set forth in the Offer to Purchase.

THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY RECOMMENDED THAT COMPANY STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES IN THE OFFER.

We or our nominees are the holder of record of Shares held for your account. A tender of such Shares can be made only by us as the holder of record and pursuant to your instructions. The Letter of Transmittal accompanying this letter is furnished to you for your information only and cannot be used by you to tender Shares held by us for your account.

We request instructions as to whether you wish for us to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the enclosed Offer to Purchase and the Letter of Transmittal.

Please note carefully the following:

1. The offer price for the Offer is $21.50 per Share, without interest, net to you in cash, less any applicable withholding taxes.

2. The Offer is being made for any and all issued and outstanding Shares.

3. The Offer is being made in connection with the Agreement and Plan of Merger, dated as of May 2, 2023 (together with any amendments or supplements thereto, the “Merger Agreement”), by and among the Company, Parent and Purchaser, pursuant to which, as soon as practicable following the consummation of the Offer and upon the satisfaction or waiver of certain conditions, Purchaser will be merged with and into the Company (the “Merger”) without a vote of the stockholders of the Company to adopt the Merger Agreement and consummate the Merger in accordance with Section 251(h) of the General Corporation Law of the State of Delaware (the “DGCL”), with the Company continuing as the surviving corporation (the “surviving corporation”) in the Merger and thereby becoming an indirect, wholly owned subsidiary of Parent. As a result of the Merger, each Share issued and outstanding immediately prior to the effective time of the Merger (the “effective time”) (other than Shares that are (i) held by a holder who is entitled to demand appraisal and who has (or for which the “beneficial owner” (as defined in Section 262(a) of the DGCL) has) properly exercised appraisal rights with respect thereto in accordance with, and who has (and, to the extent applicable, for which the applicable beneficial owner has) complied with, Section 262 of the DGCL with respect to any such Shares held by such holder (the “Dissenting Company Shares”) or (ii) held by the Company as treasury stock or owned by Parent, Purchaser or any of Parent’s other subsidiaries (including Shares acquired pursuant to the Offer)) will be cancelled and automatically converted into the right to receive the Offer Price in cash (without interest and less any applicable withholding taxes), which is referred to as the “Merger Consideration.” Shares described in clauses (i) and (ii) above will be cancelled at the effective time and will not be exchangeable for the Merger Consideration. The Dissenting Company Shares will entitle their holders only to the rights granted to them under Section 262 of the DGCL. Following the Merger, the Company will cease to be a publicly traded company.

4. The Offer and withdrawal rights will expire at one minute after 11:59 p.m., New York City time, on Tuesday, June 13, 2023 (the “Offer Expiration Time,” unless Purchaser shall have extended the period during which the Offer is open in accordance with the Merger Agreement, in which event “Offer Expiration Time” will mean the latest time and date at which the Offer, as so extended by Purchaser, will expire).

5. The Offer is not subject to any financing condition. The Offer is subject to the conditions described in Section 15 of the Offer to Purchase. If at the otherwise scheduled Offer Expiration Time, any of the Offer conditions shall not have been satisfied or waived (to the extent waiver is permitted under applicable law and under the Merger Agreement), Parent will cause Purchaser to and Purchaser will extend the Offer on one or more occasions in consecutive increments of up to ten business days each (or for such longer or shorter period as may be agreed by the Company, Purchaser and Parent) in order to permit satisfaction of such Offer Conditions.

6. The Board of Directors of the Company has unanimously recommended that Company stockholders accept the Offer and tender their shares in the Offer.

7. Tendering stockholders who are record owners of their Shares and who tender directly to American Stock Transfer & Trust Company, the depositary for the Offer, will not be obligated to pay brokerage fees, commissions or similar expenses or, except as otherwise provided in Instruction 5 of the Letter of Transmittal, stock transfer taxes with respect to the purchase of Shares by Purchaser pursuant to the Offer.

If you wish to have us tender any or all of your Shares, then please so instruct us by completing, executing, detaching and returning to us the Instruction Form on the detachable part hereof. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, then all such Shares will be tendered unless otherwise specified on the Instruction Form.

Your prompt action is requested. Your Instruction Form should be forwarded to us in ample time to permit us to submit the tender on your behalf before the Offer Expiration Time.

The Offer is being made to all holders of Shares. However, the Offer is not being made to (and no tenders will be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, “blue sky” or other laws of such jurisdiction. Purchaser may, in its discretion, take such action as it deems necessary to make the Offer to holders of Shares in any such jurisdiction in compliance with such applicable laws. In any jurisdictions where applicable laws require the Offer to be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by Purchaser.

INSTRUCTION FORM

With Respect to the

Offer To Purchase

All Outstanding Shares of Common Stock

of

RUTH’S HOSPITALITY GROUP, INC.

at

$21.50 net per share in cash

Pursuant to the Offer to Purchase, dated May 16, 2023

by

RUBY ACQUISITION CORPORATION,

an indirect, wholly owned subsidiary of

DARDEN RESTAURANTS, INC.

The undersigned acknowledge(s) receipt of your letter and the enclosed Offer to Purchase, dated May 16, 2023 (as it may be amended or supplemented from time to time, the “Offer to Purchase”), and the related Letter of Transmittal (as it may be amended or supplemented from time to time, and together with the Offer to Purchase, the “Offer”), in connection with the offer by Ruby Acquisition Corporation, a Delaware corporation (“Purchaser”) and an indirect, wholly owned subsidiary of Darden Restaurants, Inc., a Florida corporation, to purchase all of the shares of common stock, par value $0.01 per share (the “Shares”), of Ruth’s Hospitality Group, Inc., a Delaware corporation, that are issued and outstanding at a price of $21.50 per Share, in cash, without interest, less any applicable withholding taxes, upon the terms and subject to the conditions of the Offer.

The undersigned hereby instruct(s) you to tender to Purchaser the number of Shares indicated below or, if no number is indicated, all Shares held by you for the account of the undersigned, upon the terms and subject to the conditions set forth in the Offer. The undersigned understands and acknowledges that all questions as to the validity, form and eligibility (including time of receipt) and acceptance for payment of any tender of Shares made on behalf of the undersigned will be determined by Purchaser in its sole discretion.

ACCOUNT NUMBER:                                                                  

NUMBER OF SHARES BEING TENDERED HEREBY:                                                                                   SHARES*

The method of delivery of this document is at the election and risk of the tendering stockholder. If delivery is by mail, then registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery by the Offer Expiration Time (as defined in the Offer to Purchase).

 

Dated:
						Signature(s)
						Please Print Name(s)
Address(es):
(Include Zip Code)

Area Code and Telephone No.

Tax Identification or Social Security No.

 

*	Unless otherwise indicated, it will be assumed that all Shares held by us for your account are to be tendered.

Exhibit (a)(1)(F)

This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer is made solely by the Offer to Purchase and the related Letter of Transmittal (each as defined below) and any amendments or supplements thereto, and is being made to all holders of Shares. The Offer is not being made to (and no tenders will be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of the Offer or the acceptance thereof would not be in compliance with the securities, “blue sky” or other laws of such jurisdiction. Purchaser (as defined below) may, in its discretion, take such action as it deems necessary to make the Offer to holders of Shares in any such jurisdiction in compliance with such applicable laws. In those jurisdictions where applicable laws require that the Offer be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction to be designated by Purchaser.

Notice of Offer to Purchase

All Outstanding Shares of Common Stock

of

RUTH’S HOSPITALITY GROUP, INC.

at

$21.50 net per share in cash

Pursuant to the Offer to Purchase, dated May 16, 2023

by

RUBY ACQUISITION CORPORATION,

an indirect, wholly owned subsidiary of

DARDEN RESTAURANTS, INC.

Ruby Acquisition Corporation, a Delaware corporation (“Purchaser”), is offering to purchase any and all of the issued and outstanding shares of common stock, par value $0.01 per share, of Ruth’s Hospitality Group, Inc., a Delaware corporation (the “Company” and such shares, the “Shares”), at a price of $21.50 per Share, without interest (the “Offer Price”), net to the seller in cash, less any applicable withholding taxes, upon the terms and subject to the conditions described in the Offer to Purchase, dated May 16, 2023 (together with any amendments or supplements thereto, the “Offer to Purchase”), and in the related Letter of Transmittal (together with any amendments or supplements thereto, the “Letter of Transmittal” and, together with the Offer to Purchase, the “Offer”). Purchaser is an indirect, wholly owned subsidiary of Darden Restaurants, Inc., a Florida corporation (“Parent”).

The Offer is being made pursuant to the Agreement and Plan of Merger, dated as of May 2, 2023 (as it may be amended from time to time, the “Merger Agreement”), by and among the Company, Parent and Purchaser. The Merger Agreement provides, among other things, that, as soon as practicable following the consummation of the Offer and upon the satisfaction or waiver of certain conditions, Purchaser will be merged with and into the Company (the “Merger”) without a vote of the stockholders of the Company to adopt the Merger Agreement and consummate the Merger in accordance with Section 251(h) of the General Corporation Law of the State of Delaware (as amended, the “DGCL”), with the Company continuing as the surviving corporation (the “surviving corporation”) in the Merger and thereby becoming an indirect, wholly owned subsidiary of Parent. As a result of the Merger, each Share issued and outstanding immediately prior to the effective time of the Merger (the “effective time”) (other than Shares that are (i) held by a holder who is entitled to demand appraisal and who has (or for which the “beneficial owner” (as defined in Section 262(a) of the DGCL) has) properly exercised appraisal rights with respect thereto in accordance with, and who has (and, to the extent applicable, for which the applicable beneficial owner has) complied with, Section 262 of the DGCL with respect to any such Shares held by such holder (the “Dissenting Company Shares”) or (ii) held by the Company as treasury stock or owned by Parent, Purchaser or any of Parent’s other subsidiaries (including Shares acquired pursuant to the Offer) will be cancelled and automatically converted into the right to receive the Offer Price in cash (without interest and less any applicable withholding taxes), which is referred to as the “Merger Consideration.” Shares described in clauses (i) and (ii) above will be cancelled at the effective time and will not be exchangeable for the Merger Consideration. The Dissenting Company Shares will entitle their holders only to the rights granted to them under Section 262 of the DGCL. Following the Merger, the Company will cease to be a publicly traded company.

Tendering stockholders who have Shares registered in their names and who tender directly to American Stock Transfer and Trust Company, LLC (the “Depositary”) will not be obligated to pay brokerage fees or commissions or, except as set forth in the Letter of Transmittal, transfer taxes on the purchase of Shares by Purchaser pursuant to the Offer. Stockholders who hold their Shares through a broker or bank should consult with such institution as to whether it charges any service fees or commissions.

 

The Offer is not subject to any financing condition. The Offer is conditioned upon, among other things, (a) the Merger Agreement not having been validly terminated in accordance with its terms (the “Termination Condition”) and (b) the satisfaction of:

(i) the Minimum Condition (as defined below);

(ii) the absence, since the date of the Merger Agreement, of a Company Material Adverse Effect (as defined in the Merger Agreement) that is continuing;

(iii) the accuracy of the Company’s representations and warranties (subject to customary materiality qualifiers);

(iv) the Company’s performance and compliance in all material respects with all covenants, obligations and agreements required to be performed or complied with by it under the Merger Agreement at or prior to the Offer Expiration Time;

(v) the receipt by Parent and Purchaser from the Company of a certificate signed by an executive officer of the Company certifying that certain conditions have been satisfied;

(vi) the HSR Condition (as defined below); and

(vii) the Legal Restraint Condition (as defined below).

The “Minimum Condition” requires that the number of Shares validly tendered (and not validly withdrawn) prior to the Offer Expiration Time, together with any Shares owned by Parent, Purchaser or any of their affiliates, represents at least one more Share than 50% of the total number of Shares outstanding as of the Offer Expiration Time. The “HSR Condition” requires that any waiting period (including all extensions thereof) applicable to the consummation of the Offer and the Merger under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, will have expired or been terminated. The “Legal Restraint Condition” requires the absence of any federal, state, local, foreign or multinational law, rule or regulation or order, judgment or injunction, whether civil, criminal or administrative (whether temporary, preliminary or permanent), by any governmental authority of competent jurisdiction that prohibits, restricts, enjoins or otherwise makes illegal the consummation of the Offer or the Merger and is continuing in effect. The Offer is also subject to other conditions described in the Offer to Purchase.

The Board of Directors of the Company unanimously (i) determined and declared that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are advisable and in the best interests of the Company and its stockholders, (ii) approved the execution, delivery and performance by the Company of the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger, (iii) resolved to recommend that the Company’s stockholders accept the Offer and tender their shares to Purchaser pursuant to the Offer and (iv) agreed and authorized that the Merger be governed by Section 251(h) of the DGCL.

The Company will file a Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule 14D-9”) with the United States Securities and Exchange Commission (the “SEC”) and disseminate the Schedule 14D-9 to the Company’s stockholders with the Offer to Purchase. The Schedule 14D-9 will include a description of the Company Board of Directors’ reasons for authorizing and approving the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, and therefore stockholders are encouraged to review the Schedule 14D-9 carefully and in its entirety.

The Merger Agreement contains provisions to govern the circumstances in which Purchaser may extend the Offer beyond its initial Offer Expiration Time. Purchaser has agreed in the Merger Agreement that Purchaser will extend the Offer (i) for any minimum period required by any applicable rule, regulation, interpretation or position of the SEC or its staff or of the Nasdaq Global Select Market (“Nasdaq”) or its staff or as may be necessary to resolve any comments of the SEC or the staff of Nasdaq, as applicable to the Offer, the Schedule 14D-9 or the Offer documents; and (ii) if at the then-scheduled Offer Expiration Time, any of the Offer conditions has not been satisfied or waived by Parent or Purchaser (to the extent waiver is permitted under the Merger Agreement and applicable law), (x) extend the Offer on one or more occasions, in consecutive periods of up to ten business days each (or for such longer or shorter period as the Company, Purchaser and Parent may agree) or (y) if the then-scheduled Offer Expiration Time is ten or fewer business days before the Termination Date (as defined below), extend the Offer until 11:59 p.m., New York City time, on the day before the Termination Date (or such other date and time as the parties may agree); provided, however, that without the Company’s written consent, Purchaser shall not extend the Offer, and without Parent’s prior written consent, Purchaser shall not be required to extend the Offer, in each case, beyond the earlier of (1) November 2, 2023 (the “Termination Date”; provided, however, that if as of the Termination Date the HSR Condition or the Legal Restraint Condition (in the case of the Legal Restraint Condition, solely with respect to a law or order relating to antitrust laws) shall not have been satisfied or validly waived by Parent or Purchaser, to the extent waivable in accordance with the terms of the Merger Agreement and applicable laws by Parent or Purchaser, then the Termination Date shall automatically be extended until 11:59 p.m., New York City time, on March 4, 2024, and all references to the Termination Date in the Merger Agreement will be as so extended), or (2) the valid termination of the Merger Agreement in accordance with its terms; provided, however, that, in the case of clause (1), if at the Termination Date or any time thereafter Parent is not then permitted to terminate the Merger Agreement pursuant to its terms, Purchaser shall be required to (and Parent shall cause Purchaser to) extend the Offer beyond the Termination Date.

The purpose of the Offer and the Merger is for Purchaser and Parent to acquire the entire equity interest in the Company. Pursuant to the Merger Agreement, as soon as practicable following the consummation of the Offer, Purchaser will be merged with and into the Company, with the Company continuing as the surviving corporation in the Merger and thereby becoming an indirect, wholly owned subsidiary of Parent. No appraisal rights are available to holders of Shares in connection with the Offer. However, if Purchaser accepts Shares in the Offer and the Merger is completed, stockholders and beneficial owners may be entitled to appraisal rights in connection with the Merger if they do not tender Shares in the Offer and comply with the applicable procedures described under Section 262 of the DGCL. Such stockholders and beneficial owners will not be entitled to receive the Offer Price, but instead will be entitled only to those rights provided under Section 262 of the DGCL. Stockholders or beneficial owners must properly perfect their right to seek appraisal under the DGCL in connection with the Merger in order to exercise appraisal rights as further detailed in the Offer to Purchase.

Pursuant to the Merger Agreement, Parent and Purchaser expressly reserve the right at any time to waive, in whole or in part, any Offer condition (other than the Minimum Condition, the HSR Condition, the Legal Restraint Condition and the Termination Condition), to increase the Offer Price or modify the terms of the Offer, in each case only in a manner not inconsistent with the Merger Agreement, except that Parent and Purchaser are not permitted (without the prior written consent of the Company) to (i) reduce the number of Shares subject to the Offer, (ii) reduce the Offer Price, (iii) directly or indirectly amend, modify, supplement or waive the Minimum Condition or the Termination Condition, (iv) directly or indirectly amend, modify or supplement any Offer condition, (v) directly or indirectly amend, modify or supplement any other term of the Offer in any individual case in any manner that is adverse to the holders of Shares or that would, individually or in the aggregate, reasonably be expected to prevent or materially delay the consummation of the Offer or the Merger or impair the ability of Parent, Purchaser or the Company to consummate the Offer or the Merger, (vi) terminate the Offer or accelerate, extend or otherwise change the Offer Expiration Time (except as expressly required or permitted by the Merger Agreement), (vii) change the form of consideration payable in the Offer or (viii) provide for any “subsequent offering period” (or any extension thereof) within the meaning of Rule 14d-11 promulgated under the Exchange Act. The Offer may not be terminated prior to its scheduled Offer Expiration Time (as extended and re-extended in accordance with the Merger Agreement), unless the Merger Agreement is terminated in accordance with the terms thereof.

Any extension, delay, termination, waiver or amendment of the Offer will be followed as promptly as practicable by public announcement thereof, such announcement in the case of an extension to be made no later than 9:00 a.m., New York City time, in accordance with the public announcement requirements of Rules 14d-3(b)(1), 14d-4(d), 14d-6(c) and l4e-1(d) under the Exchange Act.

For purposes of the Offer, Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not validly withdrawn, if and when Purchaser gives oral or written notice to the Depositary of its acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with

the Depositary, which will act as agent for the tendering stockholders for purposes of receiving payments from Purchaser and transmitting such payments to the tendering stockholders. Under no circumstances will interest be paid on the Offer Price for Shares, regardless of any extension of the Offer or any delay in payment for Shares.

Notwithstanding any provision of the Merger Agreement to the contrary, Purchaser will pay for Shares tendered (and not validly withdrawn) pursuant to the Offer only after timely receipt by the Depositary of (i) certificates for (or a timely confirmation of a book-entry transfer of Shares (a “Book-Entry Confirmation”) into the Depositary’s account at The Depository Trust Company (“DTC”) with respect to) such Shares, (ii) a Letter of Transmittal, properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message (as defined in the Offer to Purchase) in lieu of the Letter of Transmittal), and (iii) any other documents required by the Letter of Transmittal or any other customary documents required by the Depositary. Accordingly, tendering stockholders may be paid at different times depending upon when certificates for Shares or Book-Entry Confirmations with respect to Shares are actually received by the Depositary.

Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Offer Expiration Time. Thereafter, tenders of Shares are irrevocable, except that, pursuant to Section 14(d)(5) of the Exchange Act, they may also be withdrawn after Saturday, July 15, 2023, which is the 60th day after the date of the commencement of the Offer, unless such Shares have already been accepted for payment by Purchaser pursuant to the Offer and not validly withdrawn. If you tendered your Shares by giving instructions to a broker, dealer, commercial bank, trust company or other nominee, you must instruct that nominee to arrange for the withdrawal of your Shares.

For a withdrawal of Shares to be effective, a written (or, with respect to Eligible Institutions (as defined in the Offer to Purchase), a facsimile transmission) notice of withdrawal must be timely received by the Depositary at the address set forth on the back cover page of the Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of such Shares, if different from that of the person who tendered such Shares. If certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and the signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution, unless such Shares have been tendered for the account of an Eligible Institution. If Shares have been tendered pursuant to the procedure for book-entry transfer, any notice of withdrawal must also specify the name and number of the account at DTC to be credited with the withdrawn Shares.

All questions as to the validity, form, eligibility (including time of receipt) and acceptance of any tender of Shares will be determined by Purchaser in its sole and absolute discretion, which determination will be final and binding, subject to the rights of the tendering holders of Shares to challenge Purchaser’s determination in a court of competent jurisdiction. Purchaser reserves the absolute right to reject any and all tenders determined by Purchaser not to be in proper form or the acceptance for payment of or payment for which may, in Purchaser’s opinion, be unlawful. Purchaser also reserves the absolute right to waive any defect or irregularity in the tender of any Shares of any particular stockholder whether or not similar defects or irregularities are waived in the case of any other stockholder. No tender of Shares will be deemed to have been validly made until all defects and irregularities relating thereto have been cured or waived. None of Parent, Purchaser or any of their respective affiliates or assigns, the Depositary, Okapi Partners LLC (the “Information Agent”), or any other person will be under any duty to give notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification. Purchaser’s interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto and any other documents related to the Offer) will be final and binding, subject to the rights of the tendering holders of Shares to challenge Purchaser’s determination in a court of competent jurisdiction.

The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 under the Exchange Act is contained in the Offer to Purchase and is incorporated herein by reference.

The Company has provided Purchaser with the Company’s stockholder list and security position listings for the purpose of disseminating the Offer to Purchase, Letter of Transmittal and other Offer-related materials to holders of Shares. The Offer to Purchase and the related Letter of Transmittal will be mailed to record holders of Shares whose names appear on the Company’s stockholder list and will be furnished, for subsequent transmittal to beneficial owners of Shares, to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing.

In general, the receipt of cash by you in exchange for your Shares pursuant to the Offer or the Merger will be a taxable transaction for United States federal income tax purposes. You are urged to consult your tax advisor about the particular tax consequences to you of tendering your Shares in the Offer or exchanging your Shares in the Merger in light of your particular circumstances (including the application and effect of any federal, state, local or non-U.S. laws). For a more complete description of the U.S. federal income tax consequences of the Offer and the Merger, see the Offer to Purchase.

The Offer to Purchase, the related Letter of Transmittal and the Company’s Solicitation/Recommendation Statement on Schedule 14D-9 (which contains the recommendation of the Company Board of Directors and the reasons therefor) contain important information and should be read carefully and in their entirety before any decision is made with respect to the Offer.

Questions and requests for assistance may be directed to the Information Agent at the address and telephone numbers set forth below. Requests for copies of the Offer to Purchase and the related Letter of Transmittal and other tender offer materials may be directed to the Information Agent or to brokers, dealers, commercial banks or trust companies. Such copies will be furnished promptly at Purchaser’s expense. Except as set forth in the Offer to Purchase, neither Purchaser nor Parent will pay any fees or commissions to any broker or dealer or any other person for soliciting tenders of Shares pursuant to the Offer.

The Information Agent for the Offer is:

 

Okapi Partners LLC

1212 Avenue of the Americas, 17th Floor

New York, New York 10036

Bankers and Brokers Call: (212) 297-0720

Others Call Toll Free: (844) 202-6026

Email: info@okapipartners.com

May 16, 2023

Exhibit (d)(2)

CONFIDENTIALITY AGREEMENT

March 8, 2023

In connection with a possible negotiated transaction (the “Transaction”) between Ruth’s Hospitality Group, Inc., a Delaware corporation (together with its subsidiaries, “RHGI” or the “Disclosing Party”), and Darden Restaurants, Inc., a Florida corporation (together with its subsidiaries, the “Receiving Party”, and each of RHGI and the Receiving Party individually referred to as a “Party”, and collectively, the “Parties”), RHGI may disclose and/or deliver (or cause to be disclosed and/or delivered) to the Receiving Party certain information about itself and its affiliates, including about its and its affiliates’ ownership structure, properties, employees, finances, businesses and operations.

1. The term “Confidential Information” means any and all information communicated in writing, orally, by electronic or magnetic or any other media, by visual observation or by any other means, before, on or after the date of this confidentiality agreement (this “Agreement”), whether or not labeled as confidential, which is disclosed or otherwise provided by, or on behalf or at the request of, the Disclosing Party, to the Receiving Party or to the Receiving Party’s Representatives (as hereinafter defined). Confidential Information shall also be deemed to include (i) all notes, reports, analyses, compilations, studies, interpretations or other materials, whether prepared by the Receiving Party, or by its Representatives, that contain, reflect or are derived or based (in whole or in part) upon any Confidential Information; (ii) proprietary information of the Disclosing Party or its affiliates that is disclosed hereunder; and (iii) information disclosed by the Disclosing Party or its affiliates which relates to current, planned or proposed products, marketing and business plans, methods of doing business, forecasts, projections and analyses, financial information, and joint venture, vendor and customer information. Confidential Information does not include, however, any information that (A) is in the possession of the Receiving Party or its Representatives at the time of disclosure as shown by the Receiving Party’s files and records immediately prior to the time of disclosure; (B) prior to or after the time of disclosure becomes part of the general public knowledge or literature, not as a result of any direct or indirect action or omission of the Receiving Party or its Representatives; (C) is obtained by the Receiving Party on a non-confidential basis from a source other than the Disclosing Party or its Representatives, which source is not known by the Receiving Party, after due inquiry, to be bound by contractual, legal, or fiduciary obligations; (D) has been previously approved by the Disclosing Party, in writing, for release by the Receiving Party; or (E) the Receiving Party can document was independently developed by the Receiving Party or its Representatives without use of or reference to the Disclosing Party’s Confidential Information.

2. The Confidential Information of the Disclosing Party shall remain the property of the Disclosing Party. No rights to use, license or otherwise exploit the Confidential Information of the Disclosing Party are granted to the Receiving Party or its Representatives, by implication or otherwise. The Receiving Party and its Representatives shall not by virtue of this Agreement or the disclosure and/or its or their use of the Confidential Information acquire any rights with respect thereto, all of which rights shall remain exclusively with the Disclosing Party. Each of the Parties acknowledges that certain Confidential Information of the Disclosing Party may be information to which attorney-client privilege and/or work product privilege attaches and agrees that access to such Confidential Information is being provided solely for the purposes set out in this Agreement and that such access is not intended, and shall not constitute, a waiver of any privilege or any right to assert or claim privilege. To the extent that there is any waiver of privilege, it is intended to be a limited waiver in respect of the Receiving Party or its applicable Representative solely for the purpose, and on the terms and conditions, set out in this Agreement. The Receiving Party or its applicable Representative shall, at the request and expense of the Disclosing Party, claim or assert (or cooperate in the claim or assertion of) privilege in respect of such Confidential Information of the Disclosing Party.

3. Unless otherwise agreed to in writing by the Disclosing Party, the Receiving Party hereby agrees that the Confidential Information of the Disclosing Party shall be used solely for the purpose of evaluating, negotiating and/or implementing the Transaction and for no other competitive or other purpose, and that such information shall be kept confidential by the Receiving Party and its Representatives; provided, however, that any such

information may be disclosed by the Receiving Party to its affiliates and its and their respective officers, directors, employees, accountants, attorneys and financial advisors and, with the prior written consent of the Disclosing Party, consultants and potential debt financing sources (such Persons hereinafter collectively being referred to as “Representatives”). The term “Person” as used in this Agreement shall be broadly interpreted to include, without limitation, any individual, corporation, company, group, partnership, other entity (whether governmental or non-governmental), the media or the public. The Receiving Party agrees that Confidential Information of the Disclosing Party shall only be provided to its Representatives who need such Confidential Information for the purpose of evaluating, negotiating and implementing the Transaction, who have been informed by the Receiving Party of the confidential nature of the Confidential Information and of their obligations under this Agreement, and who have been instructed that such information is to be kept confidential and shall not be used for any purpose other than the evaluation, negotiation and implementation of the Transaction. The Receiving Party shall be responsible for any breach of any provision of this Agreement applicable to its Representatives that receive Confidential Information.

4. Without the prior written consent of RHGI, neither the Receiving Party nor any of its Representatives acting on its behalf shall have any discussions or communications with respect to the Transaction with any Person (including any potential debt financing source that is not an approved Receiving Party’s Representative in its capacity as such and any potential equity financing source) other than the Receiving Party’s Representatives acting in their capacity as such, in each case, including, without limitation, regarding partnering or the making of any joint proposal. The Receiving Party further agrees that neither it nor any of its Representatives acting at its direction or on its behalf shall enter into any exclusivity, lock-up, dry-up or other agreement, arrangement or understanding, whether written or oral, with any Person (including, without limitation, any financing source (or any affiliate thereof)) or that could reasonably be expected to limit, restrict, restrain or otherwise impair in any manner, directly or indirectly, the ability of such Person to serve as a financing source to any other Person with respect to a transaction involving RHGI. The Receiving Party represents and warrants that neither the Receiving Party nor any of its Representatives acting at its direction or on its behalf have entered into any agreement, arrangement or understanding of the type contemplated by this Section 4.

5. It is understood and agreed that the Disclosing Party may, from time to time, determine that disclosure of certain of its competitively sensitive Confidential Information to the Receiving Party and/or certain of its Representatives may be inappropriate, in which case such competitively sensitive Confidential Information may, at the Disclosing Party’s discretion, be made available to the Receiving Party or its Representatives only in accordance with additional procedures mutually agreed by the Parties in writing to permit disclosure of such competitively sensitive Confidential Information in an appropriate manner.

6. Given the nature of the Confidential Information, the Transaction Information (as hereinafter defined) and the Parties’ current discussions, the Receiving Party acknowledges that the Disclosing Party would be irreparably damaged by any unauthorized disclosure or use of any Confidential Information or Transaction Information and monetary damages would not be a sufficient remedy for any breach or threatened breach of this Agreement. Without prejudice to the rights and remedies otherwise available to the Disclosing Party, the Disclosing Party shall be entitled, without the requirement of a posting of a bond or other security, to equitable relief, including an injunction or specific performance, in the event of any breach or threatened breach of the provisions of this Agreement. Such remedies shall not be deemed to be exclusive remedies but shall be in addition to all other remedies available at law or equity to the Disclosing Party.

7. Except with the prior written consent of RHGI or as required by law or regulation (except for such a requirement that arises from the Receiving Party’s or its Representatives’ breach of this Agreement), neither the Receiving Party nor any of its Representatives may disclose to any other Person the existence of this Agreement, the fact that Confidential Information has been made available to the Receiving Party or its Representatives, the evaluation by the Parties of the potential Transaction, the fact that discussions or negotiations are taking place between the Parties regarding the potential Transaction, and any of the terms, conditions or other facts with respect to the potential Transaction being contemplated by the Parties, including, without limitation, the status or termination thereof (collectively, the “Transaction Information”). In the event that disclosure of any Transaction Information or Confidential Information is determined by the Receiving Party’s legal counsel to be

required by law or regulation, the Receiving Party or its applicable Representative shall, to the extent practicable and legally permissible, (i) provide the Disclosing Party with prompt prior notice and a reasonable opportunity to make such disclosure itself or comment on the proposed disclosure, and (ii) reasonably consult with the Disclosing Party in any attempt it may make to obtain a protective order or other appropriate assurance that confidential treatment shall be afforded to such Transaction Information or Confidential Information. If a protective order or other appropriate assurance is not obtained, the Receiving Party agrees to only disclose that portion of the Transaction Information or Confidential Information determined, in consultation with the Receiving Party’s legal counsel, is required to be disclosed. Except with the prior written consent of the Receiving Party or as required by law, regulation or stock exchange requirement, RHGI agrees it shall not, and shall direct its Representatives not to, disclose to any other Person (other than its Representatives) the Receiving Party’s identity by name as being involved in discussions or negotiations concerning the potential Transaction or any of the terms, conditions or other facts with respect to the potential Transaction being contemplated by the Parties.

8. The Disclosing Party may elect by notifying the Receiving Party in writing at any time to terminate further access to its Confidential Information. Following any such written notice, the Receiving Party and its Representatives agree (i) to promptly (and in any event within 5 business days of such notice) return or destroy (and upon request, confirm in writing such return or destruction to the Disclosing Party) all Confidential Information of the Disclosing Party and its affiliates and any other material containing or reflecting any of the Confidential Information in its possession or its Representatives’ possession, (ii) not to retain any copies, extracts or other reproductions in whole or in part, mechanical or electronic, of such written material, and (iii) to destroy all computer records, documents, memoranda, notes and other writings prepared by the Receiving Party or its Representatives based on the Confidential Information of the Disclosing Party or any of its affiliates; provided, however, that the Receiving Party and its Representatives that receive Confidential Information shall be entitled to retain one copy of all such Confidential Information in restricted access legal files or pursuant to automatic electronic archiving and back-up procedures for use solely in connection with any litigation, arbitration or regulatory action; provided, further, that any Confidential Information so retained shall remain subject to the confidentiality obligations hereunder for so long as it so retained, notwithstanding any termination of this Agreement pursuant to Section 20.

9. The Receiving Party agrees that it is not entitled to rely on the accuracy or completeness of the Confidential Information and that the Receiving Party shall be entitled to rely solely on such representations and warranties as may be made in any definitive transaction agreement providing for the Transaction, subject to the terms and conditions of such agreement. Accordingly, the Receiving Party acknowledges that, except as may be provided in such agreement, neither the Disclosing Party nor any of its Representatives makes any express or implied representation or warranty as to the accuracy or completeness of any of the Confidential Information. The Receiving Party agrees that, other than as may be set forth in any definitive transaction agreement providing for the Transaction, neither the Disclosing Party nor any of its Representatives shall have any liability to the Receiving Party or its Representatives resulting from the use of the Confidential Information or any errors therein or omissions therefrom.

10. The Parties agree that, unless and until a definitive transaction agreement is entered into between the Parties with respect to the Transaction, neither Party nor any of its Representatives shall be under any legal obligation of any kind whatsoever with respect to the Transaction by virtue of this Agreement or any other written or oral expression, except, in the case of this Agreement, with respect to the matters specifically agreed to herein. Except for the matters set forth in this Agreement or in any such definitive transaction agreement, neither Party shall be entitled to rely on any statement, promise, agreement or understanding, whether oral or written, any custom, usage of trade, course of dealing or conduct. Each Party reserves the right to reject any and all proposals made by the other Party or any of its Representatives with regard to the Transaction and to terminate discussions and negotiations at any time for any reason or no reason. Without limiting the generality of the foregoing, the Receiving Party acknowledges and agrees that RHGI shall be entitled to conduct any process with respect to the Transaction or similar or other transaction involving RHGI as it may, in its sole discretion, determine (including, without limitation, by negotiating with any other party and/or entering into a definitive agreement relating to or providing for any such transaction without prior notice to the Receiving Party or any other Person).

11. The Receiving Party agrees that all (i) communications regarding the Confidential Information or the potential Transaction, (ii) requests for additional information regarding the potential Transaction, (iii) requests for facility tours or management meetings, (iv) discussions or questions regarding procedures related to the potential Transaction and (v) all other communications regarding the potential Transaction shall be submitted or directed to the Persons specifically designated in writing by RHGI (the “Contact Persons”). Without RHGI’s prior written consent, and without limiting the foregoing, neither the Receiving Party nor any of its Representatives shall make any contact of any nature regarding the Transaction or any other potential transaction between the Parties (including, in each case, inquiries or requests concerning Confidential Information) with any supplier, customer, labor union, landlord, lessor, bank, other lender or any other Person having a commercial relationship with RHGI or any of its affiliates. Until notified otherwise by RHGI, the Contact Persons shall be the individuals at Jefferies LLC and Kirkland & Ellis LLP as may be indicated to the Receiving Party from time to time.

12. The Receiving Party agrees that for a period of eighteen (18) months from the date of this Agreement, neither the Receiving Party nor any of its affiliates (as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or any of its or their Representatives acting on its or their behalf, shall, unless specifically invited in writing by RHGI’s board of directors, directly or indirectly, in any manner:

a. acquire, offer or propose (except a nonpublic proposal to RHGI’s board of directors that would not require RHGI or any other person to make any public announcement or other disclosure with respect thereto) to acquire, solicit an offer to sell or agree to acquire, directly or indirectly, alone or in concert with others, by purchase or otherwise, (i) any economic interest in, or any direct or indirect right to direct the voting or disposition of any securities of RHGI, whether or not any of the foregoing would give rise to beneficial ownership (as such term is used in Rule 13d-3 and Rule 13d-5 under the Exchange Act), (ii) any other direct or indirect interest in any securities of RHGI or any direct or indirect rights, warrants or options to acquire, or securities convertible into or exchangeable for, any securities of RHGI, (iii) any contracts or rights in any way related to the acquisition or price of securities or interests of RHGI (whether beneficially, constructively or synthetically through any derivative or trading position or otherwise) (each of clauses (ii) and (iii), “Derivative Securities”) or (iv) any material assets, indebtedness or properties of RHGI;

b. make, or in any way participate in, directly or indirectly, alone or in concert with others, any “solicitation” of “proxies” (as such terms are used in the proxy rules of the Securities and Exchange Commission promulgated pursuant to Section 14 of the Exchange Act) or seek to advise or influence in any manner whatsoever any Person with respect to the voting of any voting securities of RHGI, or seek the consent of any Person with respect to any securities or interests of RHGI;

c. form, join or any way participate in a “group” within the meaning of Section 13(d)(3) of the Exchange Act with respect to any voting securities of RHGI or otherwise in connection with any of the actions prohibited by this Section 12;

d. arrange, or in any way participate, directly or indirectly, in any financing for the purchase of any securities or interests of RHGI or any Derivative Securities;

e. make any public announcement with respect to, or solicit or submit a proposal for, or offer of (with or without conditions), any merger, consolidation, business combination, tender or exchange offer, recapitalization, reorganization, purchase or license of a material portion of the assets or properties of, or other similar extraordinary transaction involving, RHGI, its affiliates or its or their respective securities or interests, except a nonpublic proposal to RHGI’s board of directors that would not require RHGI or any other Person to make any public announcement or other disclosure with respect thereto;

f. otherwise seek, alone or in concert with others, to control, change or influence the management, board of directors or policies of RHGI or nominate any Person as a director who is not nominated by the then-incumbent directors, or convene a meeting of the shareholders of RHGI or propose any matter to be voted upon by the shareholders of RHGI;

g. make any request or proposal to amend, waive or terminate any provision of this Section 12;

h. announce an intention to do, or enter into any arrangement or understanding or discussions with any other Person(s) to do, any of the actions restricted or prohibited by this Section 12; or

i. take any action that might result in RHGI having to make a public announcement regarding any of the matters referred to in this Section 12.

The Receiving Party represents and warrants to RHGI that, as of the date hereof, it, together with its affiliates, does not own (whether beneficially, constructively or synthetically through any derivative, hedging or trading position or otherwise) any securities of RHGI (including its common stock) or Derivative Securities. Notwithstanding anything in this Section 12 to the contrary, if at any time a third party enters into a definitive agreement with RHGI to acquire (or publicly offers to acquire in an offer that has been recommended by RHGI’s board of directors) more than 50% of the outstanding capital stock of RHGI or more than 50% of the consolidated assets of RHGI, from and after the date thereof nothing in this Section 12 shall prevent the Receiving Party or its affiliates or Representatives from making a competing proposal with respect to a potential Transaction.

13. The Receiving Party agrees that for a period of eighteen (18) months from the date of this Agreement, neither the Receiving Party nor any of its affiliates, or any of its or their Representatives acting on its or their behalf, shall solicit for employment or hire (i) any executive officer of RHGI or other employee of RHGI or its affiliates having a title of vice president or above or (ii) any other employee of RHGI or its affiliates who (x) comes in contact with the Receiving Party or its Representatives in connection with the Receiving Party’s evaluation of the potential Transaction, (y) with respect to whom the Receiving Party or its Representatives receive information in connection with the Receiving Party’s evaluation of the potential Transaction or (z) becomes known to the to the Receiving Party in connection with the Receiving Party’s evaluation of the Transaction, in each case of the foregoing clauses (i) and (ii), without RHGI’s prior written consent; provided, however, that the foregoing shall not prohibit any general advertisement or general solicitation (or hiring as a result thereof) that is not specifically targeted at such Persons.

14. The Receiving Party hereby acknowledges that it is aware, and shall advise each of its Representatives who are informed as to the matters that are the subject of this Agreement, that (i) the Confidential Information being furnished to the Receiving Party and the Transaction Information contains or may itself be material, non-public information concerning the Disclosing Party and (ii) the United States securities laws, including Section 10(b) of the Exchange Act, and Rule 10b-5 promulgated thereunder, prohibit any Person who or that has received from an issuer material, non-public information from purchasing or selling securities of such issuer or from communicating such information to any other Person under circumstances in which it is reasonably foreseeable that such Person is likely to purchase or sell such securities.

15. This Agreement shall be governed and construed in accordance with the laws of the State of Delaware, without regard to conflicts-of-law principles. Each Party hereby irrevocably and unconditionally (i) consents to submit to the exclusive jurisdiction of the courts of the State of Delaware and of the United States of America located in the State of Delaware for any action, suit or proceeding arising out of or relating to this Agreement (and each Party hereby irrevocably and unconditionally agrees not to commence any such action, suit, or proceeding except in such courts), (ii) waives any objection to the laying of venue of any such action, suit or proceeding in any such courts and (iii) waives and agrees not to plead or claim that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. EACH PARTY AND EACH OF ITS REPRESENTATIVES BOUND TO THE TERMS HEREOF HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY AND ALL RIGHTS TO A JURY TRIAL IN RESPECT OF ANY CLAIM OR CAUSE OF ACTION IN ANY COURT IN ANY JURISDICTION BASED UPON OR ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY AMENDMENT HEREOF.

16. The provisions of this Agreement shall be binding solely upon and inure to the benefit of the Parties hereto and their respective Representatives, affiliates, successors and permitted assigns. Neither Party may assign any or all rights, power, privileges and obligations under this Agreement without the other Party’s prior written consent.

17. This Agreement represents the entire understanding and agreement of the Parties hereto and may be modified only by a separate written agreement executed by the Parties expressly modifying this Agreement. This Agreement supersedes and cancels any and all prior agreements and understandings between the parties hereto, express or implied, relating to the confidential treatment of information in respect of a Transaction.

18. In the event that any provision or portion of this Agreement is determined to be invalid or unenforceable for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect to the fullest extent permitted by law, and such invalid or unenforceable term or provision shall be deemed replaced by a term or provision that is valid and enforceable and that comes closest to expressing the Parties’ intention with respect to such invalid or unenforceable term or provision.

19. The failure or refusal by either Party to insist upon strict performance of any provision of this Agreement or to exercise any right in any one or more instances or circumstances shall not be construed as a waiver or relinquishment of such provision or right, nor shall such failures or refusals be deemed a custom or practice contrary to such provision or right.

20. This Agreement shall terminate upon the earlier to occur of (i) the closing of the Transaction, and (ii) three (3) years after the date hereof; provided, however, that no such termination of this Agreement shall relieve any Party from any liability relating to any breach of this Agreement.

21. This Agreement may be executed in any number of counterparts, each of which when so executed shall be deemed an original, but such counterparts shall together constitute one and the same agreement.

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first written above.

 

Ruth’s Hospitality Group, Inc.						Darden Restaurants, Inc.
Name:		/s/ Kristy Chipman				Name:		/s/ Raj Vennam
Title:		EVP, Chief Financial Officer/COO				Title:		SVP, Chief Financial Officer

[Signature Page to Confidentiality Agreement]