-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SC06pbWJYc9Skt+CLdtCCMgW4DH4c17QGmzSc0u7cpnMqqVLBpVMlmdwqxHGvU3r JsWVyqehjfgyJX9gxXUGPg== 0000899647-97-000001.txt : 19970529 0000899647-97-000001.hdr.sgml : 19970529 ACCESSION NUMBER: 0000899647-97-000001 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970515 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970528 SROS: AMEX FILER: COMPANY DATA: COMPANY CONFORMED NAME: RIVIERA HOLDINGS CORP CENTRAL INDEX KEY: 0000899647 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 880296885 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11711 FILM NUMBER: 97615042 BUSINESS ADDRESS: STREET 1: 2901 LAS VEGAS BLVD SOUTH CITY: LAS VEGAS STATE: NV ZIP: 89109 BUSINESS PHONE: 7027949527 MAIL ADDRESS: STREET 1: 2901 LAS VEGAS BLVD S CITY: LAS VEGAS STATE: NV ZIP: 89109 8-K 1 RIVIERA 8 K FILING SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 Date of Report (Date of earliest event reported): May 15, 1997 RIVIERA HOLDINGS CORPORATION (exact name of registrant as specified in its charter) Nevada 000-21430 88-0296885 (State of (Commission (IRS Employer Incorporation) File Number) Identification No.) 2901 Las Vegas Boulevard Las Vegas, Nevada 89109 (Address of principal office) (Zip code) Registrant's Telephone number, (702) 794-9527 including area code Item 5 - Other Events See attached Press Release and non-binding Letter of Intent, dated May 15, 1997, between the registrant and Allen E. Paulson. Item 7 - Financial Statements and Exhibits A. Press Release, dated May 15, 1997. B. Letter of Intent, dated May 15, 1997, between the registrant and Allen E. Paulson SIGNATURE Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: May 23, 1997 RIVIERA HOLDINGS CORPORATION By: /s/ Duane Krohn Duane Krohn Treasurer and CFO EX-20 2 PRESS RELEASE Riviera Holdings Corporation 2901 Las Vegas Boulevard South Las Vegas, NV 89109 Investor Relations: (800)362 1468 Fax: (702) 794-9442 Hotel: (702) 734-5110 TRADED: AMEX-RIV AT THE COMPANY: AT FRB SAN FRANCISCO: FOR MR. PAULSON: Duane Krohn, Treasurer Bonnie McBride (analysts) Brian McCarthy, Esq. and CFO Dick Strasbaugh (general info) Skadden, Arps, Slate (702) 794-9527 Frank Thorsberg (media) Meagher & Flom John Wishon, Secretary (415) 986-1591 (213) 687-5070 and General Counsel (702) 794-9504 FOR IMMEDIATE RELEASE THURSDAY, MAY 15, 1997 RIVIERA SIGNS NON-BINDING LETTER OF INTENT TO MERGE LAS VEGAS, NV - May 15, 1997 - Riviera Holdings Corporation (RHC) and Allen E. Paulson announced today that they had signed a non-binding letter of intent which contemplates the merger of a new corporation owned by Mr. Paulson into RHC. At the closing of the merger, (1) each RHC stockholder would receive $15 per share, plus an amount equal to 7 percent per annum thereon from June 1, 1997 to the closing and (2) RHC would become wholly owned by Mr. Paulson. Any transaction is subject to, among other things, completion of satisfactory due diligence, negotiation and execution of a definitive agreement between RHC and Mr. Paulson, and negotiation and execution of definitive option and voting agreements between Mr. Paulson and certain institutional shareholders which own approximately 58 percent of the shares of RHC common stock. Among the other conditions to closing the merger are RHC shareholder, Nevada Gaming and other licensing approvals. No assurance can be given that the merger agreement will be executed or the merger will be consummated. "The management team is looking forward to the prospect of working with Mr. Paulson to grow the Riviera and other gaming prospects," said Riviera Chairman and Chief Executive Officer William L. Westerman. Riviera Holdings Corp. operates the Riviera Hotel and Casino, and through its wholly-owned subsidiary Riviera Gaming Management (RGM), operates the Four Queens Hotel and Casino. Riviera Holdings Corporation is traded on the American Stock Exchange under the symbol RIV. For more information on Riviera Holdings Corporation, dial 1-800-PRO-INFO, code RIV EX-10 3 LETTER OF INTENT BETWEEN RHC AND ALLEN PAULSON May 15, 1997 Mr. Allen E. Paulson Del Mar Country Club 6001 Clubhouse Drive Rancho Santa Fe, CA 92067 Dear Mr. Paulson: This letter of intent will set forth the principal business terms (the "Terms") upon which a subsidiary of your newly-formed Nevada corporation ("Newco") proposes to merge (the "Merger") into Riviera Holdings Corporation ("RHC"), whereby on the "Closing Date" (hereinafter defined) all holders of shares of RHC common stock (the "Shares") would receive in cash the "Per Share Purchase Price" (hereinafter defined). 1. "Per Share Purchase Price" means an amount per Share equal to $15.00 plus an amount equal to 7% per annum of such $15.00 amount from June 1, 1997 to the Closing Date. 2. "Closing Date" means 10:00 A.M. Pacific Time on the fifth business day following satisfaction of all conditions specified in the "Merger Agreement" (hereinafter defined), including receipt of all Nevada gaming, liquor and other regulatory approvals necessary to consummate the Merger (the "Approvals"), provided RHC may terminate the Merger Agreement (unless otherwise provided for in the Merger Agreement) if the Closing Date shall not have occurred by April 1, 1998 for any reason (other than a material breach by RHC of its obligations under the Merger Agreement). 3. "Merger Agreement" means an agreement containing customary representations, agreements and conditions and embodying the Terms. 4. Stock Options and Employee Stock Purchase Plan Shares. (a) RHC has furnished Newco with a list of (i) the Shares ("Option Shares") issuable upon exercise of all outstanding options (the "Options") and (ii) the Shares issued or issuable under RHC's Employee Stock Purchase Plan Shares ("Purchase Plan Shares"). (b) Under RHC's Non-Qualified Stock Option Plan For Non-Employee Directors ("Directors Plan"), on May 12, 1997, options (the "Directors Options") to purchase 2,000 Shares will be issued to the persons previously identified to you with an exercise price equal to the closing price of RHC's common stock on May 12, 1997. (c) On the Closing Date, RHC will cancel the Options by paying in cash an amount equal to the difference between the exercise price of the Options and the Merger Per Share Purchase Price multiplied by the number of Option Shares on the basis of 100% vesting. Under the terms of the Employee Stock Purchase Plan, RHC is required to refund the original purchase price ($11.25 per Share in the case of Purchase Plan Shares issued in 1996) to an employee who so requests. RHC intends to offer a small number of Purchase Plan Shares at 85% of fair market value to Riviera employees who were not eligible in 1996. Purchase Plan Shares will be treated similarly to all other outstanding shares except, for administrative convenience, Purchase Plan Shares will be cashed out on the Closing Date by RHC netting the spread between the Purchase Plan Share Purchase Price against the Merger Per Share Purchase Price after deduction of any loan balance of an employee. (d) If there is a closing under a Development and Operating Agreement between Eagle Gaming, L.P. ("Eagle") and RHC's indirectly held subsidiary, Riviera Gaming Management of Colorado, Inc. ("RGMC"), whereby Riviera Blackhawk, LLC ("RBL") is established, (i) RHC will be obligated to issue to Ladenburg, Thalmann & Co. five-year warrants to purchase 100,000 shares of RHC's common stock at a price equal to 120% of the closing market price of RHC's common stock on the American Stock Exchange on the date of such closing and (ii) RHC may be required to issue Shares to Eagle upon exercise by Eagle of a "Put" if RHC indirectly owns 100% of RBL or after giving effect to such Put, RHC and Newco will seek to mutually agree upon cash payments in lieu of such warrants and RHC Shares issuable upon exercise of such Put. 5. Issuance of Additional Common Stock or Stock Options; No Distributions. Except as specified in Paragraph 4 above, prior to the Closing Date or earlier termination of the Merger Agreement, RHC will not issue or repurchase (or enter into any commitment to do so) any additional Shares, options or warrants or other instruments representing an equity interest in RHC, and RHC will not make any distributions of any kind to its shareholders. 6. Escrow; Liquidated Damages; Funds at Closing. (a) Upon the execution of the Merger Agreement, Newco will deposit in cash or letters of credit containing terms acceptable to RHC in escrow (the "Escrow") $14,745,000 ($3 per share x 4,915,000 shares outstanding) plus (i) an amount equal to 7% per annum on $73,725,000 from June 1, 1997 to such execution date, and (ii) $426,605 (.0058 x $73,725,000) on each monthly anniversary of such execution date until the Closing Date or the date the Merger Agreement is terminated; provided there shall be deducted from the foregoing (i) any amount set aside by Newco or Mr. Allen E. Paulson pursuant to any separate agreement (the "Separate Agreements") with Morgens, Waterfall, Sun Life or Keyport Life (the "Major RHC Shareholders") with respect to their share interests in RHC and (ii) amounts required to be deposited with respect to the Shares beneficially owned by Newco or Mr. Paulson (collectively "Paulson Ownership"). (b) The shareholders of RHC (excluding the Paulson Ownership) shall be entitled to receive the Escrow pro-rata, if Newco shall fail to close and pay by April 1, 1998 for any reason other than: (i) a breach by RHC of its representations and warranties or obligations under the Merger Agreement, (ii) the transaction is enjoined pursuant to a final non-appealable order, (provided RHC, Newco and their affiliates shall have used their best efforts to have such injunction lifted), (iii) assuming the accuracy of the following representation and performance by Mr. Paulson of the following agreement, Newco/Mr. Paulson have not obtained all necessary Approvals by April 1, 1998: (A) Mr. Paulson represents that he has discussed in detail with his Nevada gaming counsel his background and knows of no reason why he should not be able to obtain all necessary Approvals prior to April 1, 1998; and (B) Mr. Paulson agrees that he will pursue licensure vigorously and will give complete and prompt attention to requests of Nevada regulatory authorities for information and will do nothing which might delay receipt of all necessary Approvals, (iv) In addition, the parties will seek to mut- ually agree as to the effect on the Escrow of the death or disability of Mr. Paulson prior to the Closing Date. (c) At the Closing Date the Escrow will be released to Newco, and Newco must have, in cash, an amount equal to the aggregate Per Share Purchase Price, multiplied by the number of outstanding RHC Shares, minus (i) the Escrow and (ii) the amounts held pursuant to the Separate Agreements and the Paulson Ownership. In addition on the Closing Date RHC will pay approximately $12 million in cash as previously identified to you and Newco shall have irrevocable commitments sufficient to cover Puts by the holders of all $100 million of RHC's 11% Mortgage Notes by reason of the change in control contemplated by the Merger or have made other arrangements satisfactory to RHC. 7. RHC Operations. RHC has furnished Newco with its confidential monthly projections of RHC's consolidated results of operations for the twelve months ended March 31, 1998. Newco will have the right to terminate the Merger Agreement if RHC's actual consolidated results of operations through the Closing Date constitute a "Material" adverse change compared to the Projected Results for the same period. For purposes of the foregoing, "Material" shall mean a decline in EBITDA of 7.5% or more. 8. Indemnification. Newco will be given an opportunity to conduct such due diligence with respect to RHC as Newco reasonably deems appropriate and may condition its obligation to close under the Merger Agreement upon any material breach by RHC of its representations or agreements under the Merger Agreement, provided, however, that upon consummation of the Merger, (i) none of the directors, officers, employees or shareholders of RHC ("Indemnitees") will be liable to Newco (or anyone claiming rights through Newco) for breach of such representations and agreements and (ii) Newco will hold the Indemnitees harmless against any loss, liability, cost or expense including counsel fees which arises out of the operation of RHC or any of its subsidiaries through the Closing or by reason of the Merger. 9. Cooperation. RHC and Newco will cooperate on the following matters: (a) The calling of a Special Meeting of RHC shareholders to approve the Merger, together with the preparation of a proxy statement with respect thereto to be furnished to the shareholders of RHC; provided, however, that it shall be a condition to the Merger that the holders of at least 70% of the RHC Shares entitled to vote on the Merger shall have approved the Merger. (b) Engagement by RHC of an investment banker to give a fairness opinion as to the Merger; (c) The preparation and filing of a notification and report form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976; (d) The obtaining of all necessary Approvals; (e) The continued employment of key management personnel of RHC; and (f) All other matters contemplated by the transaction, including the refinancing of the 11% Mortgage Notes. 10. No Shop; RHC board Fiduciary Duty; First Refusal; Break-Up Fee. (a) Upon the execution of the Merger Agreement following approval by RHC's Board, RHC will not actively seek to enter into a merger or similar transaction ("Alternative Transaction") with a third party, subject, however, to the fiduciary duty of RHC's board to entertain an Alternative Transaction, if the same will provide RHC's shareholders with a per share purchase price which is higher (the amount of such excess in the per share purchase price being referred to as the "Spread") than the Per Share Purchase Price. (b) Newco shall have the right (the "First Refusal Right") for 30 days after receipt of notice of an Alternative Transaction and by written notice to RHC's Board to increase the Per Share Purchase Price in the amount of the Spread. The First Refusal Right shall expire on the earliest to occur of (i) termination of the Merger Agreement or (ii) April 1, 1998 (unless otherwise extended under the terms of the Merger Agreement). (c) If Newco shall fail to exercise its First Refusal Right (i) at the Closing of an Alternative Transaction, RHC will pay Newco and/or Mr. Paulson an aggregate amount equal to 3% of the purchase price for the equity of RHC which is paid in the Alternative Transaction and (ii) upon the execution by RHC of definitive agreements with respect to an Alternative Transaction or the approval or recommendation of an Alternative Transaction by RHC's Board of Directors, directly or indirectly, RHC will reimburse Newco and Mr. Paulson for the documented out-of-pocket expenses in connection with the transaction contemplated by this letter of intent and the Merger, which shall have been incurred from April 15, 1997. 11. Publicity. Neither RHC nor Newco will make any public announcement about the Merger or related matters without the prior approval of the other party, subject, however, to RHC's obligation as a public company to make public disclosure of certain matters. In such event, Newco's counsel will be given prior notice and the ability to comment on RHC's announcement, to the extent practicable. 12. Confidentiality. Newco and its authorized representatives shall keep all information supplied or made available to Newco in confidence and shall not disclose the same to any party other than its employees and advisors on a need to know basis and only for purposes of evaluating the transaction described in this letter. Newco will not use such information except for evaluating such transaction. If the Merger is not consummated, Newco shall return to RHC any information provided to Newco. 13. Expenses. Each of the parties will bear its own e xpenses except as otherwise provided in Paragraph 10(c) above. 14. No Obligation. Except as specified in Paragraphs 11, 12 and 13 above, this letter of intent is not meant to be binding upon the parties hereto. Neither RHC nor Newco will be under any obligation to the other for whatever reason, including any fact or circumstance which may have been or may be made or become available to Newco or Paulson with respect to RHC or any other fact or circumstance, unless and until the Merger Agreement is executed and delivered by the parties thereto. Any transaction would be subject to, among other things, completion of due diligence satisfactory to Newco, negotiation and execution of the Merger Agreement, shareholder approval and receipt of all other material consents, including an option and voting agreement from the Major RHC Shareholders. If the foregoing is in accordance with your understanding, please sign and return the enclosed copy prior to the close of business on May 15, 1997. Very truly yours, NEWCO RIVIERA HOLDINGS CORPORATION By:__________________________ ____________________________ Allen E. Paulson William L. Westerman, Chairman and Chief Executive Officer -----END PRIVACY-ENHANCED MESSAGE-----