Habit Restaurants DEFA14AAdditional proxy soliciting materials

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE

SECURITIES EXCHANGE ACT OF 1934

(Amendment No.    )

Filed by the Registrant  ☒                             Filed by a party other than the Registrant  ☐

Check the appropriate box:

The Habit Restaurants, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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On January 5, 2020, The Habit Restaurants, Inc., a Delaware corporation (“Habit” or the “Company”), YUM! Brands, Inc., a North Carolina corporation (“Parent”), and YEB Newco Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”), providing for the merger of Merger Sub with and into the Company, with the Company surviving the Merger as a wholly-owned subsidiary of Parent (collectively, the “Merger”). The parties publicly announced the Merger on January 6, 2020.

In connection with the Merger, on February 4, 2020, Habit filed with the Securities and Exchange Commission (“SEC”) a Preliminary Proxy Statement pursuant to Section 14(a) of the Securities Exchange Act of 1934 (the “Preliminary Proxy Statement”). On February 19, 2020, Habit filed with the SEC a Definitive Proxy Statement pursuant to Section 14(a) of the Securities Exchange Act of 1934 (“the Definitive Proxy Statement” and, together with the Preliminary Proxy Statement, the “Proxy Statement”). Habit commenced mailing the Definitive Proxy Statement to the Company’s stockholders on or about February 19, 2020.

Following the Proxy Statement, as of the date hereof, purported Company stockholders have filed eleven actions in connection with the Merger and the associated disclosures made in the Proxy Statement. On February 5, 2020, a purported stockholder filed a complaint in the United States District Court for the Southern District of New York, captionedGottlieb v. The Habit Restaurants, Inc., et al., Civil Action No.1:20-cv-00966, against the Company and the members of the Company’s Board of Directors. On February 11, 2020, a purported stockholder filed a complaint in the United States District Court for the Southern District of New York, captionedMorris v. The Habit Restaurants, Inc., et al., Civil Action No.1:20-cv-01182, against the Company and the members of the Company’s Board of Directors. On February 11, 2020, a purported stockholder filed a putative class action complaint in the United States District Court for the District of Delaware, captionedSmith v. The Habit Restaurants, Inc., et al., Civil Action No.1:20-cv-00203, against the Company and the members of the Company’s Board of Directors. On February 12, 2020, a purported stockholder filed a complaint in the United States District Court for the Southern District of New York, captionedAvila v. The Habit Restaurants, Inc., et al., Civil Action No.1:20-cv-01248, against the Company and the members of the Company’s Board of Directors. On February 12, 2020, a purported stockholder filed a complaint in the United States District Court for the Southern District of New York, captionedSterner v. The Habit Restaurants, Inc., et al., Civil Action No.1:20-cv-01251, against the Company and the members of the Company’s Board of Directors. On February 13, 2020, a purported stockholder filed a putative class action complaint in the United States District Court for the Central District of California, captionedShudic v. The Habit Restaurants, Inc., et al., Civil Action No.8:20-cv-00294, against the Company and the members of the Company’s Board of Directors. On February 20, 2020, a purported stockholder filed a complaint in the United States District Court for the Central District of California, captionedGrijalva v. The Habit Restaurants, Inc., et al., Civil Action No.2:20-cv-01661, against the Company and the members of the Company’s Board of Directors. On February 21, 2020, a purported stockholder filed a complaint in the United States District Court for the District of New Jersey, captionedRestivo v. The Habit Restaurants, Inc., et al., Civil Action No.2:20-cv-01927, against the Company and the members of the Company’s Board of Directors. On February 24, 2020, a purported stockholder filed a putative class action complaint in the Delaware Court of Chancery, captionedBounds & Co. v. The Habit Restaurants, Inc., et al., C.A. No. 2020-0124 (Del. Ch.), against the Company and the members of the Company’s Board of Directors. On February 24, 2020, a purported stockholder filed a putative class action complaint in the United States District Court for the Central District of California, captionedStein v. The Habit Restaurants, Inc., et al., Civil Action No.2:20-cv-01763, against the Company and the members of the Company’s Board of Directors. On February 26, 2020, a purported stockholder filed a complaint in the United States District Court for the Central District of California, captionedAntalan v. The Habit Restaurants, Inc., et al., Civil Action No.2:20-cv-01850, against the Company and the members of the Company’s Board of Directors.

The complaints in these eleven actions (collectively, the “Merger Litigation”) allege, among other things, that the Company and the members of the Company’s Board of Directors violated Sections 14(a) and 20(a) of the Exchange Act, andRule 14a-9 promulgated under the Exchange Act, and breached their fiduciary duties, by misstating or omitting certain allegedly material information in the Proxy Statement filed with the SEC regarding the Merger. The complaints seek, among other things, injunctive relief preventing the consummation of the Merger, rescissory damages or rescission in the event of consummation of the Merger, declaratory relief related to the disclosures in the Proxy Statement, and certain fees and expenses.

The parties to the Merger Litigation subsequently engaged inarm’s-length negotiations to attempt to resolve the claims asserted in the Merger Litigation, and reached an agreement whereby the Company would file on a Current Report on Form8-K certain supplemental disclosures regarding the Merger. The Company and Company’s Board of Directors believe that the allegations and claims asserted in the Merger Litigation lack merit, and that the supplemental disclosures set forth herein are not required or necessary under applicable laws. However, solely in order to avoid the risk of the Merger Litigation delaying or otherwise adversely affecting the Merger and to minimize the costs, risks, and uncertainties inherent in defending the Merger Litigation, the Company hereby voluntarily amends and supplements the Proxy Statement, as set forth herein. The Company and the Company’s Board of Directors deny any liability or wrongdoing in connection with the Proxy Statement, and nothing contained herein should be construed as an admission of the legal necessity or materiality under applicable laws of any of the supplemental disclosures.

These supplemental disclosures will not affect the consideration to be paid to Company stockholders in connection with the Merger or the timing of the special meeting of the Company’s stockholders (the “Special Meeting”) scheduled for March 18, 2020, at 9:00 a.m. Pacific Time, at 18700 MacArthur Blvd. Irvine, CA 92612. The Company’s Board of Directors continues to recommend that Habit’s stockholders vote “FOR” the proposal to adopt the Merger Agreement; “FOR” the proposal to approve, by advisory(non-binding) vote, certain compensation arrangements that may be paid or become payable to Habit’s named executive officers that is based on or otherwise related to the Merger Agreement and the transactions contemplated by the Merger Agreement; and “FOR” the proposal to approve the adjournment of the special meeting to a later date or dates, if necessary or appropriate, to solicit additional proxies if there are insufficient votes to approve the adoption of the Merger Agreement at the time of the Special Meeting.

Supplemental Disclosures to Proxy Statement in Connection with the Merger Litigation

The additional disclosures (the “Supplemental Disclosures”) contained herein supplement the disclosures contained in the Proxy Statement and should be read in conjunction with the disclosures contained in the Proxy Statement, which in turn should be read in its entirety. To the extent that information set forth in the Supplemental Disclosures differs from or updates information contained in the Proxy Statement, the information contained herein shall supersede or supplement the information contained in the Proxy Statement. All page references are to the Definitive Proxy Statement and capitalized terms used, but not otherwise defined herein, shall have the meanings ascribed to them in the Definitive Proxy Statement.

“On June 20, 2019, the Board of Directors held a special meeting with representatives of Ropes & Gray LLP (“Ropes & Gray”) in attendance. During theThe Board of Directors called that meeting,in order for Russell W. Bendel, the Company’s chief executive officer,briefedto brief the Board of Directors on recent feedback that he had received from various unaffiliated, long-term stockholders with whom the Company had a generally positive relationship. Mr. Bendel noted that, in light of challenges in the market and the Company’s performance, among other considerations, theseThe unaffiliated stockholders hadexpressed a desire for the Company to consider potential strategic alternative transactions.no affiliation with Company management orKarpReilly and were passive investors with the same interests in any proposed transaction as all Class A common stockholders. Mr. Bendel noted that, in light of challenges in the market and the Company’s performance, among other considerations, these stockholders had expressed a desire for the Company to consider potential strategic alternative transactions. The Board of Directors discussed, among other topics, the importance of maximizing stockholder value andthe in-depth experience of several members of the Board of Directors with different types of strategic transactions. Representatives of Ropes & Gray then made a presentation to the Board of Directors regarding the directors’ fiduciary duties with respect to a potential strategic transaction, and the Board of Directors and Ropes & Gray discussed related considerations. After discussion regarding those issues, the Board of Directors agreed to consider potential strategic alternative transactions and proceeded to discuss next steps, including the potential engagement of a financial advisor. In light of confidentiality concerns, the Board of Directors also expressed interest in initially approaching only one advisor. After discussion, members of the Board of Directors agreed that Piper Sandler would be a strong candidate to advise the Company on potential strategic alternative transactions, given its industry expertise, historical knowledge of the Company, and experience advising public companies. The Board of Directors directed Messrs. Bendel and Reilly to contact Piper Sandler to request a proposal and presentation regarding potential strategic alternative transactions to be given to the Board of Directors during its regularly scheduled July 2019 meeting.”

“Following execution of the engagement agreement, Piper Sandler approached eighty-five potential buyers, comprised of a mix of strategic and financial buyers. After that initial outreach, the Company executed confidentiality agreements, which included a standstill provision, with forty-eight potential buyers. Under the terms of the confidentiality agreements executed with all potential buyers, the standstill provision automatically terminated and became of no further force or effect if the Company entered into a definitive agreement with respect to, or recommended that the Company’s stockholders accept or approve, a transaction involving the acquisition of all or a majority of the Company’s outstanding equity securities or all or substantially all of the Company’s assets (whether by merger, consolidation, business combination, tender or exchange offer, recapitalization, restructuring, sale, equity issuance or otherwise).”

“As of the date of this proxy statement, Parent has informed the Company that none of the Company’s executive officers have entered into any agreement, arrangement or understanding with Parent, the Surviving Corporation or their affiliates regarding employment following the Effective Time. It is possible that Parent may enter into employment or consultancy, compensation, severance or other employee or consultant benefits arrangements with the Company’s executive officers and certain other key employees in the future, but there can be no assurance that any parties will reach any such agreement.The final bid Parent submitted on December 18, 2019 stated Parent’s expectation that the Company’s executive officers would continue in their roles with the Company after the Effective Time, as well as Parent’s expectation that it would finalize retention agreements with the Company’s executive officers prior to completion of any transaction. However, prior to execution of the Merger Agreement on January 5, 2020, the Company’s executive officers did not have any discussions with Parent regarding employment offers or any terms of their potential employment following the Effective Time.”

Cautionary Statement Regarding Forward-Looking Statements

Certain statements in this communication contain “forward-looking statements” within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995. In some cases, words such as “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “may,” “will,” “would,” “could,” “should,” “seeks,” “estimates” and variations on these words and similar expressions may identify such forward-looking statements, although not all forward-looking statements contain these words. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements are based on current expectations, estimates, assumptions, or projections concerning future results or events, including, without limitation, the projected closing date for the transaction, the anticipated benefits of the transaction, and the future earnings and performance of Parent or any of its businesses. Forward-looking statements are neither predictions nor guarantees of future events, circumstances, or performance and are inherently subject to known and unknown risks, uncertainties and assumptions that could cause actual results to differ materially from those indicated by those statements. We cannot assure you that any of the expectations, estimates, or projections expressed herein will be achieved. Numerous factors related to the transaction could cause actual results and events to differ materially from those expressed or implied by forward-looking statements, including, without limitation: the risk that the proposed transaction may not be completed in a timely manner or at all; the failure to satisfy any of the conditions to the consummation of the proposed transaction, including the adoption of the merger agreement by the shareholders of the Company; the timing to consummate the proposed transaction; the occurrence of any event, change, or other circumstance that could give rise to the termination of the merger agreement between the parties; the effect of the pendency of the proposed transaction on Parent and the Company’s business relationships, operating results and business generally; the risk that the proposed transaction may disrupt current plans and operations and the potential difficulties in employee retention as a result of the proposed transaction; the ability to achieve the synergies and value creation contemplated; Parent’s ability to promptly and effectively integrate the Company’s businesses; the risk that revenues following the transaction may be lower than expected; the risk that operating costs and business disruption (including, without limitation, difficulties in maintaining relationships with employees and suppliers) may be greater than expected; the assumption of unexpected risks and liabilities; the outcome of any legal proceedings that have been or may be instituted related to the proposed transaction; the diversion of and attention of management of both Parent and the Company on transaction-related issues; the success of Parent’s refranchising strategy; and the other factors discussed in “Risk Factors” in Parent’s Annual Report on Form10-K for the fiscal year ended December 31, 2019, the Company’s Annual Report on Form10-K for the fiscal year ended December 25, 2018 and subsequent filings with the SEC made by both Parent and the Company, which are available athttp://www.sec.gov. Parent and the Company assume no obligation to update the information in the communication, except as otherwise required by law. Accordingly, you should not place undue reliance on these forward-looking statements.

Additional Information and Where to Find It

In connection with the proposed Merger, the Company filed with the SEC a Definitive Proxy Statement on Schedule 14A on February 19, 2020 and began mailing the Definitive Proxy Statement and proxy card on or around February 19, 2020. The proxy statement contains important information about the proposed Merger and related matters.STOCKHOLDERS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN CONNECTION WITH THE MERGER THAT THE COMPANY WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE COMPANY, THE MERGER, AND THE OTHER TRANSACTIONS CONTEMPLATED BY THE MERGER AGREEMENT THAT HOLDERS OF THE COMPANY’S SECURITIES SHOULD CONSIDER BEFORE MAKING ANY DECISION REGARDING VOTING. This communication is not a substitute for the Proxy Statement or for any other document that the Company may file with the SEC and send to the Company’s stockholders in connection with the proposed Merger. The proposed Merger will be submitted to Company stockholders for their consideration.

Stockholders and security holders of the Company will be able to obtain the proxy statement, as well as other filings containing information about the Company and the proposed Merger, without charge, at the SEC’s website (http://www.sec.gov). Copies of the proxy statement can also be obtained, without charge, by contacting the Company’s Investor Relations at HabitIR@habitburger.com or (949)943-8692, or by going to the Company’s Investor Relations page on its website at http://ir.habitburger.com/investor-overview.

Participants in the Solicitation

The Company and certain of its directors, executive officers and employees may be deemed to be participants in the solicitation of proxies in respect of the proposed Merger. Information regarding the interests of the Company’s directors and executive officers and their ownership of shares of the Company’s common stock is set forth in the Company’s Annual Report on Form10-K for the fiscal year ended December 25, 2018, which was filed with the SEC on March 1, 2019, and in the Company’s proxy statement on Schedule 14A, which was filed with the SEC on April 23, 2019, and the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on February 19, 2020 in connection with the proposed Merger, and certain of its Current Reports on Form8-K. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests in the proposed Merger, by security holdings or otherwise, will be contained other relevant materials to be filed with the SEC in connection with the proposed Merger. Free copies of these documents may be obtained as described in the preceding paragraph.