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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[_] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
SUMMIT FAMILY RESTAURANTS INC
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(Name of Registrant as Specified In Its Charter)
FIRST GLOBAL SECURITIES INC
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
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EXHIBIT 99.3
NEWS RELEASE
URGENT
JULY 13, 1996 - FOR RELEASE IMMEDIATELY
Contact: Susan Trenham
(818) 406-5017 or (818) 568-8800
SALT LAKE CITY, UTAH
IRREGULARITIES OCCUR IN VOTING OF SUMMIT/CKE MERGER
The Opposition Group in the proposed merger between Summit Family
Restaurants, Inc. and CKE Restaurants, Inc. alleged that major irregularities
have occurred in the voting of the merger between Summit Family Restaurants,
Inc. and CKE Restaurants, Inc.
Susan Trenham, CEO of First Global Securities, Inc., and representative for
the group, delivered certified ballots from ADP, certified ballots from four
brokerage firms, plus ballots from certificate holders, representing
approximately 924,050 shares to the poller of the election at 9:40 a.m., July
12, 1996. At 4:00 P.M. the group was told that at least eight pages of ballots,
including one page with a block of 383,300 shares voted by Kennedy Capital
Management, Inc. and certified by ADP; and the votes cast by customers of
Merrill Lynch, Paine Webber, Prudential Bache, and Dean Witter were not in the
possession of pollers of the election and would not be counted. Summit had
received the same set of ADP ballots. Bill Fiske of Corporate Investor
Communications, Inc., solicitor for Summit, acknowledged that he had a faxed
copy and a hard copy of the same ballots; that he had calculated the votes in
the same manner as Trenham; that his totals were the same result as the
Opposition Group, and that he believed the votes to have been cast by
shareholders and delivered by Trenham.
Susan Trenham explained, "I received faxed copies of the ADP certified
ballots between 10:00 p.m. and 2:00 a.m. on the evening and morning of July 11
and July 12. I also received a handwritten tabulation of the votes. I went to
my room and retabulated the votes to be sure that my figures agreed with ADP and
so that I would know that I received all faxes. I added the Merrill Lynch, Dean
Witter, Prudential, and Paine Webber certified sheets which had been sent
separately from the ADP and tabulated the total".
The ballots were never left in the room by themselves between 2:00 a.m. and
9:40 a.m. the next morning when they were delivered to the pollers, William
Marsh and Frank O'Bara.
Trenham went on to say,
"I went down to the meeting room first without the ballots and checked to make
sure that the pollers were there and I signed in. An assistant remained in the
room with the ballots. I went back up and picked up the ballots, got on an
express elevator with a hotel employee, and took the ballots directly to the
pollers. After handing over the ballots I signed a master ballot stating I was
delivering 924,050 proxy votes. I watched as the pollers put the cards in a
brief case and the sheets into a manila folder and then into a briefcase.
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Just before the meeting I was advised that more votes were coming in via fax. I
went to make arrangements for the additional faxes to be delivered to me before
the polling ended. They were brought to me and I handed the additional faxes to
the poller who took our folder back out of the brief case. I was supposed to
speak at the meeting, which had just started, so I did not stay at the table a
second time to see that the folder was put back in the briefcase. The pollers
now acknowledge that six folders, including the Opposition Group's folder, were
left sitting on top of the table throughout the meeting, where anywhere from
twenty-five to fifty people had been standing and the pollers were engaged in
conversation. One or both pollers were observed engaged in conversation several
feet away from the table and the briefcase on more than one occasion. The
pollers also turned with their backs to the table repeatedly when people behind
them asked questions."
At 10:06 a.m. hard copies of the ADP ballots were delivered by UPS to the
hotel and signed for by Andrea Nevin. The polls were still open at that time.
Summit received a hard copy at the same time. A hotel representative took both
UPS packages to a Summit representative who held both packages until the meeting
ended. At that time the package was given to Susan Trenham. "I walked over to
the poller to exchange the hard copies for the fax copies. The poller stated
that he would not accept the hard copies because the polls were closed".
Following the meeting Trenham was advised that since it was a third party
counting the ballots that neither Summit nor the Opposition Group would be
present during the counting but that afterwards all ballots and tabulations
would be produced for inspection. The pollers took the ballots to their rooms.
Susan Trenham believed at that time that she would receive a report that votes
representing approximately 920,000 shares had been cast.
At 4:00 p.m. Susan Trenham received a conference telephone call from the
poller where the results were announced to both Summit and the Opposition Group.
The poller announced that Summit had received 3,127,308 votes in favor of the
merger and that the Opposition Group had received only 104,840 votes against.
Trenham demanded to see the ballots and the group convened at the law offices of
Kimball, Parr, Waddoups, Brown, & Gee. In reviewing the material it became clear
that eight to ten pages of ballots of the Opposition Group had disappeared.
Bill Fiske, of Corporate Communications, Inc., the solicitor for Summit,
acknowledged that he had followed the same procedure that Susan Trenham had
followed and that he had copies of the same ADP ballots, and that excluding the
Dean Witter, Merrill Lynch, Prudential Bache, and Paine Webber votes, and
certificate shareholder votes, he had calculated them in the same manner and
with the same total as Trenham. The certified copies of the four brokerage firm
ballots had not been delivered through ADP and Fiske did not have copies of
those ballots.
THE POLLERS TOOK THE POSITION THAT THE BALLOTS WERE NEVER DELIVERED TO
THEM.
The dispute over the counting of the Kennedy Capital votes in particular
had occurred three times during the week of July 12. Kennedy had repeatedly told
Trenham that they had voted their shares against the merger but they did not
show up in the numbers reported to Trenham. Finally, on Wednesday, July 10,
1996, Trenham demanded a conference call between ADP and Kennedy wherein Kennedy
stated to ADP that they had voted against the merger. ADP stated to Kennedy that
Institutional Investor Services had electronically registered Kennedy's
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vote in favor of the merger. Kennedy got in touch with Institutional Investors
who asked Kennedy to fax whether they were "For or Against" the Opposition Group
(not for or against the merger). Kennedy stated that they were for the
Opposition Group. ISS, a second time, registered the vote "For" the merger.
Finally, on Thursday, July 11, Kennedy faxed their vote against the merger
directly to ADP and it was registered.
Trenham commented, "We know that Funston Asset Management also voted
109,000 shares against the merger (and perfected their dissenter's rights) and
that did not show up anywhere in the reporting from ADP or the other brokerage
firms.
Although Trenham had been advised repeatedly that no institution would be
allowed to register their vote electronically, Trenham was advised on July 11
that ISS had, in fact, electronically registered the votes of their
institutions, all in favor of the merger, on June 24, 1996, prior to the release
of the Opposition Group's proxy material. Thus, as of July 11, the Opposition
Group realized that approximately twenty-five institutions had been voted
electronically, representing more than one million votes, even though ADP had
stated to her that institutions were not allowed to vote electronically in a
proxy contest. It is not clear at this time whether they were automatically cast
or whether they actually registered the votes.
At 7:00 a.m. on July 12, Susan Trenham spoke with Jill Lyons, Director of
Research at Institutional Stock Services, Inc. who expressed concern and anger
over what had occurred in the voting process. Lyons stated that both the Company
and ADP are supposed to notify ISS when there is a contested proxy. She stated
that the Assistant Director of Research prepared a report on June 19th based on
an uncontested proxy and made a recommendation in favor of the merger. David
Pertl, Chief Financial Officer of Summit, acknowledged that he had received a
telephone call on July 11, 1996, from ISS stating that they were upset that
Summit had not advised that it was a contested proxy. None of the Opposition
Group's proxy material was ever sent to the institutions and the institutions
were not notified that it was a contested proxy. The Opposition Group estimates
that the institutions shares represented about 1.3 million of the vote.
Prior to last week the Opposition Group had had a running battle with
Summit over shareholder information to which it was legally entitled. Summit had
demanded that Susan Trenham get a notarized statement of the purpose before
releasing the shareholder list and then initially only provided half of the
list--saying there had been a mistake in the printing of the list. Following the
printing and distribution of the Opposition Group's proxy material, Summit
notified Trenham that Summit had failed to disclose 1,000 employees who held
shares in Summit's ESOP and refused to send the Opposition Group's second proxy
card to the employees.
Trenham has already registered a complaint with regulators that Summit lied
to shareholders in their proxy material about her representation of clients and
she is considering a lawsuit for defamation, invasion of privacy, and casting in
a false light. Summit made a partial retraction in its final proxy materials but
did not correct its overall statements about either Susan Trenham or Noble
Trenham.
Trenham acknowledged that attorneys are being consulted at this time as to
whether the group will seek a temporary restraining order to stop the merger
until the matter is sorted out.
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Under the merger agreement, CKE may choose not to complete the merger if
more than ten percent of shareholders perfected Dissenter's rights. Kennedy
Capital Management, Inc, T. H. Fitzgerald, Funston Asset Management, and Susan
Broberg, among others, perfected their dissenters rights, representing more than
ten percent of the votes. It is not known at this time whether CKE will complete
the merger.
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