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SOLICITING MATERIAL
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 27, 1997
SCHEDULE 14A INFORMATION
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 [X]
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
[ ] Definitive Additional Materials
[X] 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)
RAYMOND D. SCHOENBAUM and BETTY J. SCHOENBAUM
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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] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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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:
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[ ] Check box if any part of the fee is offset as provided by Exchange Act
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CONTACT:
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FOR INVESTORS: FOR MEDIA:
Stanley J. Kay, Jr. Joele Frank/Matthew Sherman
MacKenzie Partners, Inc. Abernathy MacGregor Group
(212) 929-5940 (212) 371-5999
FOR IMMEDIATE RELEASE:
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THE SHONEY'S SHAREHOLDERS' COMMITTEE RESPONDS TO SHONEY'S, INC.
ATLANTA, GEORGIA (June 27, 1997) -- Raymond D. Schoenbaum, on behalf of
The Shoney's Shareholders' Committee, made the following statement in response
to Shoney's, Inc.'s [NYSE: SHN] seeking a declaratory judgment in the Tennessee
Chancery Court, Nashville, with respect to the Company's Board of Directors'
adoption of certain Bylaw amendments:
"Yesterday's action is not unexpected given that the current Board and
management have already demonstrated that they are attempting to manipulate the
corporate governance process for their own benefit. Shoney's is at a critical
juncture, and the long-term viability of the Company is in danger. Indeed, in
a filing with the Securities and Exchange Commission two days ago, Shoney's
stated that it does not expect its cash flow from operations, supplemented by
its available lines of credit, to be sufficient to meet its required debt and
litigation payments and cash interest expense due in the next twelve months and
provide cash needed for capital expenditures. Rather than filing unnecessary
litigation and wasting corporate assets to defend their manipulation of the
rules, we believe that the appropriate course of action is to let the real
owners of Shoney's decide as soon as possible the future direction of our
Company.
"Shoney's shareholders do not have the time or the patience for the type
of manipulation reflected in the adoption of the Bylaw amendments and the
institution of this litigation. Shoney's is running out of time, and the
shareholders must be permitted to take decisive action as soon as possible to
ensure the long term survival of the Company for the benefit of all its
constituencies."
The Bylaw amendments, which were adopted after Raymond D. Schoenbaum
delivered a demand to call a special meeting, purport to eliminate the right of
Shoney's shareholders to set the date, time and place of a special meeting. In
addition, the amendments purport to establish lengthy time frames relating to
the call of a special meeting and the giving of notice of a special meeting,
which would ostensibly permit the Board to substantially delay the date of a
special meeting. The amendments also seek to permit the current officers and
employees of Shoney's to serve as inspectors of election at the special meeting.
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Raymond D. Schoenbaum has been actively involved in the restaurant
industry since 1974, and he has extensive experience in the business, including
substantial experience in the full service dining industry and in the quality
fast food market. From 1974 to 1985, Raymond D. Schoenbaum successfully grew a
Wendy's franchisee (Restaurants Systems, Inc.) to in excess of 30 stores which
he sold to Wendy's in 1985 for approximately $40 million. Between 1985 and 1995
he developed and operated Ray's on the River and Rio Bravo, a successful chain
of casual restaurants. In 1995, Raymond D. Schoenbaum sold Ray's on the River
and Rio Bravo to Applebee's International Inc. for approximately $70 million,
and became a director of Applebee's following the sale. In addition, Raymond D.
Schoenbaum has been involved with the turnaround of companies in the restaurant
and restaurant services industries, including Squirrel Companies, Inc., a
manufacturer of restaurant point-of-source computer equipment, as the former
chairman of the board, and Max & Erma's Restaurants, Inc., as a former member of
the board and largest shareholder.
# # #
INFORMATION REGARDING PARTICIPANTS
AND CERTAIN OTHER PERSONS
Raymond D. Schoenbaum has his principal business address at 1640 Powers Ferry
Road, Building Two, Suite 100, Marietta, Georgia 30067. Betty J. Schoenbaum
has her principal residential address at 5541 Gulf of Mexico Drive, Longboat
Key, Florida 34228. Raymond D. Schoenbaum is a private investor. Betty J.
Schoenbaum is not employed. As of the date hereof, Raymond D. Schoenbaum is
deemed to own beneficially (as that term is defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) 508,061 shares
of Common Stock of Shoney's, which constitutes approximately 1.0% of the
outstanding shares of Common Stock (based on information provided by Shoney's in
its quarterly report on Form 10-Q for the quarter ended May 11, 1997). As of the
date hereof, Betty J. Schoenbaum is deemed to own beneficially 3,394,480 shares
of Common Stock of Shoney's, which constitutes approximately 7.0% of the
outstanding shares of Common Stock (based on information provided by Shoney's in
its quarterly report on Form 10-Q for the quarter ended May 11, 1997). As of the
date hereof, Raymond D. Schoenbaum and Betty J. Schoenbaum are deemed to own
beneficially 3,866,791 shares of Common Stock of Shoney's, which constitutes
approximately 8.0% of the outstanding shares of Common Stock (based on
information provided by Shoney's in its quarterly report on Form 10-Q for the
quarter ended May 11, 1997).
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In connection with Montgomery Securities' engagement as financial advisor to the
Shoney's Shareholders' Committee, the Committee anticipates that certain
employees of Montgomery Securities may communicate in person, by telephone or
otherwise with a limited number of institutions, brokers or other persons who
are shareholders for the purpose of assisting in the solicitation. Montgomery
Securities will not receive any fee for, or in connection with, such
solicitation activities apart from the fees they are otherwise entitled to
receive under their engagement. The principal business address of Montgomery
Securities is 600 Montgomery Street, San Francisco, California 94111. In the
ordinary course of its business, Montgomery Securities maintains customary
arrangements and may effect transactions in the securities of the Company for
the accounts of its customers. As a result of its engagement by the Shoney's
Shareholders' Committee, Montgomery Securities restricted its proprietary
trading in the securities of Shoney's as of June 16, 1997 (although it may still
execute trades for customers on an unsolicited agency basis). As of June 12,
1997, Montgomery Securities did not beneficially own any Common Stock of
Shoney's, and held of record 10,312 shares of Common Stock for customer
accounts.
In addition, Howard E. Sachs, John S. Ellis and W. Douglas Benn, advisors to
Raymond D. Schoenbaum, may assist in soliciting Agent Designations, although
none of them nor the Shoney's Shareholders' Committee admits that any of them is
a "participant", as defined in Schedule 14A promulgated by the Securities and
Exchange Commission under the Exchange Act. Mr. Sachs has his principal
business address at 1901 Powers Ferry Road, Suite 260, Atlanta, Georgia 30339.
As of the date hereof, Mr. Sachs was the beneficial owner of 5,250 shares of
Common Stock of Shoney's. Mr. Ellis has his principal business address at 1640
Powers Ferry Road, Building Two, Suite 100, Marietta, Georgia 30067. As of the
date hereof, Mr. Ellis did not own beneficially or of record any shares of
Common Stock. Mr. Benn has his principal business address at 1640 Powers Ferry
Road, Building Two, Suite 100, Marietta, Georgia 30067. As of the date hereof,
Mr. Benn did not own beneficially or of record any shares of Common Stock.
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