SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14 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 Com-
mission Only (as permitted by
Rule 14a-6(e)(2)
[ ] Definitive Proxy Statement
[X] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
SHONEY'S, INC.
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
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.
[X] 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: $125
(2) Form, Schedule or Registration Statement No.: Schedule 14A
(3) Filing Party: Shoney's, Inc.
(4) Date Filed: March 13, 1995
<PAGE>
SHONEY'S,
INC.
March 31, 1995
To Our Shareholders:
The Board of Directors (the "Board") of Shoney's, Inc. (the
"Company") is pleased to provide you with this supplemental proxy
information (the "Supplement") in connection with its solicitation of
proxies from holders of the Company's shares of $1.00 par value common
stock (the "Shares") to be voted at the Company's 1995 Annual Meeting
of Shareholders (the "Annual Meeting") to be held in the fifth floor
auditorium of the First American Center, Nashville, Tennessee, on
Tuesday, April 18, 1995, beginning at 9:00 a.m. (Central Daylight
Time), and at any adjournments or postponements thereof.
The first date on which this Supplement is being sent or given
to shareholders is on or about March 31, 1995. The Supplement should
be read in conjunction with the Proxy Statement dated March 13, 1995
(the "Proxy Statement"), which you already have received and to which
you should refer. This information does not replace the Proxy
Statement, but merely supplements it. Any capitalized terms not
defined in this Supplement have the meanings given them in the Proxy
Statement.
AMENDMENT TO SHAREHOLDERS RIGHTS PLAN
The Board of Directors and management of the Company recently
have had discussions concerning the Company's Amended and Restated
Rights Agreement dated as of May 25, 1994 (the "Rights Plan") with
certain institutional shareholders and with Institutional Shareholder
Services, Inc. ("ISS"), a nationally recognized firm that advises many
institutional shareholders concerning matters of shareholder interest.
The Rights Plan is the subject of Shareholder Proposal Number
3 (discussed at pages 17-21 of the Proxy Statement). That proposal,
if adopted, would recommend that the Board redeem the Rights issued
pursuant to the Rights Plan and adopt a policy that no future Rights
Plan would be adopted without prior shareholder approval. As explained
in the Proxy Statement, the Board opposes that proposal.
Responsive to the comments of certain of its institutional
shareholders, and following discussions with ISS, the Board has
determined to amend the Rights Plan to respond to the institutional
shareholders' concerns while preserving the effectiveness and
responsiveness of the Rights Plan to the needs and rights of all of the
Company's shareholders.
The amendments to the Rights Plan which have been approved by
the Board, to be adopted immediately after the Annual Meeting, are as
follows:
1. SHAREHOLDER VOTE ON A QUALIFIED OFFER.
a. If a "qualified offer" (described below) is received,
the Board will either: (i) redeem the Rights outstanding under the
Rights Plan or approve a superior alternative transaction within 60
days after the receipt of the "qualified offer"; or (ii) submit to a
binding vote of shareholders the redemption of the outstanding Rights
(and, accordingly, the elimination of the Rights Plan).
b. If a majority of the disinterested shareholders
(meaning those who do not have an interest in or are not a part of the
group making the "qualified offer") vote affirmatively for the
redemption of the Rights, the Board will do so and will terminate the
Rights Plan.
c. A "qualified offer" is a tender offer made in
accordance with applicable law: (i) to purchase all of the then
outstanding Shares at the same price, (ii) for cash on a fully financed
basis or for non-cash consideration consisting of New York Stock
Exchange listed securities offered on a basis that would afford the
Company's shareholders tax-deferred treatment, (iii) not subject to
financing, funding or due diligence conditions, and (iv) which a
nationally recognized investment banking firm selected by the Company
has not opined is inadequate.
<PAGE>
2. SHAREHOLDER VOTE IN 1996.
In addition to amending the Rights Plan as stated above, the
Board has agreed to submit the continuation of the amended Rights Plan
to a shareholder vote, on an advisory basis, at the 1996 Annual Meeting
of Shareholders, provided that ISS continues to support the amended
Rights Plan. Shareholders will receive proxy materials in connection
with that meeting, which will again describe the Rights Plan and the
specific matter upon which shareholders will be asked to vote.
3. AGREEMENT NOT TO OPT IN TO THE CONTROL SHARE STATUTE.
The Board also has agreed not to "opt in" to the Tennessee
Control Share Acquisition Act (T.C.A. Sections 48-35-301 ET SEQ.) at any
time during which the Rights Plan is in effect. Opting in to that Act
would have the effect of removing the voting rights of "control shares"
acquired under certain circumstances.
DISCUSSION
The Board believes that the amendments to the Rights Plan will
continue to prevent abusive takeover tactics, but also will make it
clear that the Rights Plan will not serve as an impediment to a lawful,
fully priced offer for all of the Company's Shares.
Your Board is pleased to report that based upon the amendments
to the Rights Plan discussed above, ISS has determined to advise its
institutional shareholder clients to vote AGAINST Shareholder Proposal
Number 3, and thus in favor of the retention of the Rights Plan as
amended. Like ISS, your Board believes that any legitimate shareholder
rights issues raised in that Proposal have been answered by the
amendments to the Rights Plan.
ACCORDINGLY, YOUR BOARD OF DIRECTORS URGES YOU TO MAIL YOUR
PROXY MARKED TO VOTE AGAINST SHAREHOLDER PROPOSAL NUMBER 3 AT THE
EARLIEST POSSIBLE DATE. IF YOU ALREADY HAVE SUBMITTED A PROXY AND WISH
TO RESUBMIT IT, PLEASE CONTACT THE COMPANY AT THE TELEPHONE NUMBER
PROVIDED BELOW, AND YOU WILL BE FURNISHED A NEW PROXY CARD. BE SURE
TO DATE THE PROXY THE DATE YOU SIGN THE NEW CARD. IF YOU WISH TO
ATTEND THE MEETING AND VOTE IN PERSON, YOU ARE INVITED TO DO SO. WE
WOULD APPRECIATE YOUR LETTING US KNOW IF YOU PLAN TO ATTEND THE MEETING
SO THAT WE MAY HAVE ADEQUATE FACILITIES FOR YOUR COMFORT.
OTHER INFORMATION
Your Board would further note that on March 28, 1995, the
proponent of Shareholder Proposal Number 3 sent an unsolicited letter
to the Board offering to serve as Chief Executive Officer and Chairman
of the Board of the Company. In January 1995, the Board appointed a
Search Committee to identify the best available candidate to fill that
position. The Search Committee is on schedule in its process and has
interviewed several qualified candidates. The Committee will report
its recommendation to the full Board when it has completed its
assignment.
On behalf of the Board, I thank you for your participation as
a shareholder in the governance of your Company.
Very truly yours,
/s/ Taylor H. Henry
Taylor H. Henry
Chairman of the Board
Chief Executive Officer
TELEPHONE FOR ADDITIONAL PROXY CARD: 615-231-2347 or 1-800-626-5630
(Ext. 2347)
