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SCHEDULE 14A
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [ ]
Filed by a Party other than the Registrant [x]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Definitive Proxy Statement
[x] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
Frisch's Restarurants, Inc.
___________________________________________________________
(Name of Registrant as Specified In Its Charter)
Jerry L. Ruyan and Barry S. Nussbaum
___________________________________________________________
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
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[ ] $500 per each party to the controversy pursuant to Exchange
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[ ] Fee computed on table below per Exchange Act Rules 14a-
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_____________________________________________________
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state how it was determined.
[ ] Check box if any part of the fee is offset as provided by
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WOLVERINE PARTNERS
Barry S. Nussbaum
Jerry L. Ruyan
Dear Fellow Frisch's Shareholder:
By now you should have received our proxy materials seeking to
elect four independent nominees to the Board of Directors of
Frisch's Restaurants, Inc., and our corporate governance propos-
als that will increase your shareholder rights. The reason for
our solicitation is simple -- we believe that new direction is
needed at Frisch's, AND NEEDED NOW.
HOW LONG CAN WE AFFORD TO WAIT?
The shareholders of Frisch's have watched helplessly as Frisch's
stock price has eroded from over $20 per share during 1990 to as
low as $7-5/8 on 2/2/96. During the same time frame, the S&P
restaurant index appreciated 187%. (The recent price increase
over the past 7 months coincided with our significant stock
purchases.) Even more troublesome is that the stock price
decline has taken place during a period of continued sales
growth. We believe there is something fundamentally wrong at
Frisch's. IT'S A COMPANY WITHOUT DIRECTION.
THE PROBLEM
Let's take a look at management's track record - a picture is
worth a thousand words:
[Graph depicting net sales of Frisch's Restaurants, Inc.
1990 $144.0 million
1991 $142.4 million
1992 $135.4 million
1993 $146.8 million
1994 $158.0 million
1995 $161.4 million
1996 $165.4 million]
[Graph depicting earnings per share of Frisch's Restaurants,
Inc.
1990 $0.45
1991 $0.47
1992 $0.77
1993 $0.78
1994 $0.74
1995 $0.38
1996 $0.34]
[Graph depicting Frisch's Restaurants, Inc. comparison of total
return to the S&P Restaurants Index
Frisch's Restaurants, Inc. S&P Restaurant Index
__________________________ ____________________
1991 $100 $100
1992 $202 $131
1993 $179 $141
1994 $154 $173
1995 $104 $206
1996 $138 $257]
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WE BELIEVE THAT OUR NOMINEES CAN PROVIDE THE DIRECTION NEEDED TO
GUIDE FRISCH'S RESTAURANTS BACK TO PROSPERITY BY IMPLEMENTING A
THREE POINT PLAN.
THE SOLUTION
We have identified the problem, now we need your assistance in
obtaining the solution. Our solution is made up of a 3 point
action plan. We are calling on all shareholders to unite and
help us bring Frisch's back to prosperity by voting the BLUE
proxy card.
POINT ONE -- CORPORATE GOVERNANCE OVERHAUL
We are asking shareholders to support two fundamental changes at
Frisch's upcoming annual meeting. The first change we are
seeking is to eliminate the classified board. A classified
board, often referred to as a staggered board, has director terms
that are offset so shareholders do not vote for all board members
at the same time. It is a well-known fact that a staggered board
may discourage an unsolicited bidder from making an acquisition
offer for your company because the bidder could not take over the
entire board all at once. This simply entrenches management and
gives them another weapon to hide behind. A management team
committed to the shareholders does not need this anti-takeover
device. In addition, shareholders need the ability, on an annual
basis, to voice their disapproval to an ineffective board. Only
four years ago when General Motors was under intense pressure
from institutional stockholders, Craig Maier, Frisch's President
and CEO, stated in THE WALL STREET JOURNAL "Mr. Stempel (GM's
CEO) should have stepped down long ago, but now it's time for
GM's longtime directors to resign. If they've been part of this
whole mess, it's their responsibility. If I'd been a board
member for 10 years, I'd probably fire Stempel and resign my-
self." Perhaps Mr. Maier and the current board should heed their
own advice.
We are also seeking to require that a majority of the directors
at Frisch's and a majority of each committee of the directors be
composed of non-management directors. We find it shocking that
the compensation committee for Jack Maier, Craig Maier and the
rest of management is composed of a committee comprised of Jack
Maier, Craig Maier and a long-term Company employee Louis Ullman.
Shareholders deserve a Board of Directors that is working for
them without any family or business ties to the Company.
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The Board and management of Frisch's reads like the Maier family
tree. The Chairman of the Board is Jack Maier. His son Craig is
President, CEO and a Board member. Craig's brother Scott runs
the hotel operations, his sister Karen runs the marketing for the
entire Company and his other sister Linda works in the Frisch's
corporate office. Finally, Jack's wife, and Craig's mother,
Blanch, is also on the Board. Frisch's is a public company owned
by the shareholders and should not be run as the Maier employment
agency. In this day and age, a public company should not have
family members supervising family members as well as setting
their own executive compensation.
We feel that these corporate governance changes are necessary to
maximize the value of your stock and to insure representation of
YOUR interests.
POINT TWO - IMPLEMENT POINT OF SALE SYSTEM
Independent restaurant consultants have indicated that a point of
sale ("POS") system should be able to increase earnings by
approximately 3% to 5% of sales (year ending sales in fiscal 1996
were $165 million). Simply put, the present antiquated account-
ing system allows for very little accountability. Without a POS
system, a restaurant chain needs a daily manual audit to monitor
current inventory, check for mistakes on orders, taxes, food
costs, and to preclude theft.
This is why virtually every nationwide restaurant chain in the
country (except Frisch's) has implemented a POS system company-
wide. In addition, food costs can be reduced up to 10% with
integration of the POS system with a food costing software
system. This is accomplished by knowing what the company is
ordering, selling and what is left in inventory on a daily basis.
Since 1992, the Company has been promising that they would
implement a POS system. As recently as June, we met with Craig
Maier and he stated that the POS had only been installed in 3 of
the Company's 103 restaurants and they were unable to make the
system work acceptably. THIS IS INEXCUSABLE BECAUSE THERE IS NO
SINGLE FACTOR THAT WILL HAVE A GREATER IMPACT ON LONG-TERM
PROFITABILITY THAN IMPLEMENTING THIS SYSTEM.
POINT THREE - SALE OF NON CORE ASSETS
The current management has accumulated a number of assets that do
not fit into the business plan and which do not produce profits
for the stockholders. Ask yourself this question, WHY DOES A
RESTAURANT COMPANY OWN A STAKE IN A PROFESSIONAL BASEBALL TEAM, A
HORSE FARM AND TWO HOTELS?
The investment in the Cincinnati Reds produces no
revenue for the Company and can be sold for approxi-
mately $8 million.* Now that a new stadium has been
approved, the value of the Reds may have increased
dramatically and should be realized immediately. How
can management continue to justify paying debt service
that facilitates maintaining the Company's 6.66% owner-
ship in the Reds?
The Company owns the Frisch's horse farm which produces
very little profit and can be sold for approximately
$1.5 million.* Until a few years ago, the horse farm
stabled the Maier family's personal horses.
The Company's hotels can be sold for approximately $15
to $20 million.* These hotels should be sold before
management has a chance to dump more money into the
buildings. A $20 million asset should be earning at
least a 15% return and even though the hotels have
never made that kind of return, Mr. Maier refuses to
list them for sale. Instead, he wants to spend even
more Company money for additional renovations. THIS
MATH JUST DOESN'T ADD UP.
*Values provided by Craig Maier, President & CEO
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The sale of these assets can produce approximately $24.5 million
to $29.5 million. We could use the proceeds of the asset sales
to pay all of the Company's burdensome, long-term debt, buy back
as much as $9 million of stock, or further profitably expand the
restaurant business. THIS MATH DOES ADD UP -- TO A HIGHER STOCK
PRICE.
Although current management has represented that they have put
the horse farm up for sale, in face to face meetings with Craig
Maier and Louis Ullman, they have refused to list any of the
assets for sale. Not only will we list the assets for sale, we
will actively advertise and solicit offers in an attempt to
exceed the above stated values. WE DO NOT BELIEVE IN FIRE SALES,
so it may take some time to sell these assets. This is why we
must begin this process immediately.
CHANGE IS NEEDED NOW
We believe our director nominees and our shareholder proposals
will provide shareholders with leadership and an opportunity to
maximize the value of their shares.
Please sign and return the enclosed BLUE proxy card today. If
you have any questions, please feel free to call us at:
Barry Nussbaum
(888) 481-4814
Jerry Ruyan
(800) 205-0407
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YOUR VOTE IS EXTREMELY IMPORTANT
1. Please SIGN, MARK, DATE and MAIL your BLUE proxy card in the
enclosed postage-paid envelope. If you wish to vote for our
Nominees, you must submit the enclosed BLUE proxy card and
must NOT submit Frisch's proxy card, even if you wish to
vote for any of Frisch's Nominees.
2. If you have already voted Frisch's proxy card, you have
every legal right to change your mind and vote FOR our
Nominees on the BLUE proxy card. Only your latest dated
proxy card will count.
3. If your shares are held for you by a bank or brokerage firm,
only your bank or broker can vote your shares and only
after receiving your instructions. Please call your bank or
broker and instruct your representative to vote FOR our
Nominees on the BLUE proxy card.
4. Time is short. Please vote today!
If you have questions or need assistance in voting your shares or
in changing your vote, please contact Beacon Hill Partners, Inc.
at the toll-free number listed below.
BEACON HILL PARTNERS
90 Broad Street
New York, New York 10004
(212) 843-8500 (call Collect)
or
Call toll-free (800) 755-5001
