<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
SHONEY'S, INC.
--------------
(Name of issuer)
Common Stock, $1.00 Par Value
-----------------------------
(Title of class of securities)
825039100
-------------------------
(CUSIP Number)
Mr. Raymond D. Schoenbaum
1640 Powers Ferry Road
Building Two, Suite 100
Marietta, Georgia 30067-6050
(770) 612-2456
(Name, address and telephone number of person
authorized to receive notices and communications)
Copy to:
Mr. John D. Capers, Jr.
King & Spalding
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1763
June 16, 1997
----------------
(Date of event which requires filing of this statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box: [_]
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
* The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 (the "Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following pages)
<PAGE>
CUSIP NO. 825039100
1. NAME OF REPORTING PERSON
S.S. OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Betty J. Schoenbaum
###-##-####
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [_]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
PF, OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF 7. SOLE VOTING POWER 2,703,388
SHARES
BENEFICIALLY 8. SHARED VOTING POWER 691,092
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER 2,703,388
REPORTING
PERSON
WITH 10. SHARED DISPOSITIVE POWER 691,092
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,394,480
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.0% (based on 48,551,609 shares outstanding on March 28, 1997)
14. TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 2 of 16 Pages
Exhibit Index on Page 10
<PAGE>
CUSIP NO. 825039100
1. NAME OF REPORTING PERSON
S.S. OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Raymond D. Schoenbaum
###-##-####
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [_]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
PF, OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
NUMBER OF 7. SOLE VOTING POWER 272,311
SHARES
BENEFICIALLY 8. SHARED VOTING POWER 235,750
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER 272,311
REPORTING
PERSON
WITH 10. SHARED DISPOSITIVE POWER 235,750
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
508,061
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [X]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
1.0% (based on 48,551,609 shares outstanding on March 28, 1997)
14. TYPE OF REPORTING PERSON*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 3 of 16 Pages
Exhibit Index on Page 10
<PAGE>
CUSIP NO. 825039100
1. NAME OF REPORTING PERSON
S.S. OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Schoenbaum Corporation
88-0354486
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [_]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
PF, OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada, U.S.A.
NUMBER OF 7. SOLE VOTING POWER 2,703,388
SHARES
BENEFICIALLY 8. SHARED VOTING POWER -0-
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER 2,703,388
REPORTING
PERSON
WITH 10. SHARED DISPOSITIVE POWER -0-
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,703,388
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.6% (based on 48,551,609 shares outstanding on March 28, 1997)
14. TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 4 of 16 Pages
Exhibit Index on Page 10
<PAGE>
CUSIP NO. 825039100
1. NAME OF REPORTING PERSON
S.S. OR IRS IDENTIFICATION NO. OF ABOVE PERSON
Schoenbaum Ventures L.P.
88-0328974
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [_]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
PF, OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [_]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Nevada, U.S.A.
NUMBER OF 7. SOLE VOTING POWER 2,703,388
SHARES
BENEFICIALLY 8. SHARED VOTING POWER -0-
OWNED BY
EACH 9. SOLE DISPOSITIVE POWER 2,703,388
REPORTING
PERSON
WITH 10. SHARED DISPOSITIVE POWER -0-
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,703,388
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [_]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.6% (based on 48,551,609 shares outstanding on March 28, 1997)
14. TYPE OF REPORTING PERSON*
PN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
Page 5 of 16 Pages
Exhibit Index on Page 10
<PAGE>
Item 4. Purpose of Transaction.
As indicated in a Schedule 13D filed by Betty J. Schoenbaum, Raymond D.
Schoenbaum, Schoenbaum Corporation and Schoenbaum Ventures L.P. (the "Reporting
Persons") on April 25, 1997 and as amended on June 2, 1997, the Reporting
Persons have been disappointed with the performance of Shoney's, Inc. (the
"Issuer") and the Issuer's stock price in recent years.
Based on the Reporting Persons' review of the Issuer, the Reporting
Persons believe that the Issuer is at a critical juncture and that the actions
to be taken by the Issuer's Board of Directors (the "Board") to address the
current situation will play a crucial role in determining the Issuer's future.
For this reason, Raymond D. Schoenbaum, on behalf of the Reporting Persons,
requested by letter to the Board dated June 2, 1997 that he be allowed to
address the Board at its two-day retreat in mid-June in order to discuss the
Issuer's current situation as well as to provide concrete alternatives for
addressing the Issuer's problems. The Board, however, responded in a manner
which the Reporting Persons believe demonstrates a lack of understanding of the
urgency of the Issuer's situation and the lack of leadership under current
management. Rather than providing Raymond D. Schoenbaum, as a representative of
an 8% shareholder, with the opportunity to meet with the Board for a short time
at some point during the Board's two-day retreat, the Board suggested that the
Reporting Persons submit their suggestions in writing, after which the Board
would "consider a time in the future" for Raymond D. Schoenbaum to meet with the
Board or "a committee of the Board." Because of the Issuer's continued poor
performance and the Board's refusal to meet with Raymond D. Schoenbaum at the
June Board meeting despite the urgency of the situation, the Reporting Persons
have concluded that the Board does not appreciate the need for a significant
change in the direction of Shoney's and the Reporting Persons believe that they
are left with no alternative but to present their case directly to the
shareholders and owners of the Issuer.
As a result, Raymond D. Schoenbaum and Betty J. Schoenbaum (the
"Shoney's Shareholders' Committee") have determined to seek agent designations
to call a special meeting of the shareholders of the Issuer to act on proposals
that would result in the removal of all of the members of the current Board and
replace them with nominees of the Shoney's Shareholders' Committee. The Shoney's
Shareholders' Committee has filed preliminary solicitation materials with the
Securities and Exchange Commission (the "Commission") pursuant to Section 14(a)
of the Securities Exchange Act of 1934 (the "Act") relating to a proposed
solicitation of agent designations to authorize the designated agents to (i)
call a special meeting, (ii) set the place, date and time of the special meeting
and (iii) exercise all rights of the shareholders giving their authorization to
the designated agents incidental to calling and convening the special meeting.
The Shoney's Shareholders' Committee intends to proceed with the solicitation of
agent designations as soon as is practicable after the Commission completes its
review of the preliminary solicitation materials pursuant to Regulation 14A
promulgated under the Act. Under the Issuer's Bylaws and Tennessee law, a
special meeting of the shareholders may be called at any time by the holder or
holders of not less than one-tenth (1/10) of all the shares entitled to vote at
the meeting.
In addition, the Shoney's Shareholders' Committee has also filed
preliminary proxy solicitation materials with the Commission pursuant to Section
14(a) of the Act in connection with their proposals to be considered at the
special meeting. If a special meeting is held, the Shoney's Shareholders'
Committee intends to ask the shareholders of the Issuer to consider and vote on
the proposals set forth below:
1. A proposal to repeal any and all amendments made by the Board to the
Bylaws as filed with the Commission as Exhibits 3(ii) and 4.2 to the
Issuer's Quarterly Report on Form 10-Q for the quarter ended
February 18, 1996 (the "Bylaws") , other than those provisions which
were duly approved by the shareholders and those provisions which
under Tennessee law cannot be repealed by the shareholders, and to
provide that, without the approval of the shareholders, the Board
may not thereafter amend any section of the Bylaws affected by such
repeal or adopt any
Page 6 of 16 Pages
Exhibit Index on Page 10
<PAGE>
new Bylaw provision in a manner which serves to reinstate any
repealed provision or any similar provision (the "Bylaws Repeal
Resolution");
2. A proposal to amend Article III, Section 1 of the Bylaws to fix the
number of directors at seven, and provide that, without the approval
of the shareholders, the Board may not thereafter amend or repeal
such Section or adopt any new Bylaw provision which is inconsistent
in any manner with such Section (the "Size of Board Resolution");
3. A proposal to amend Article III, Section 3 of the Bylaws to provide
that the directors may be elected by the shareholders at annual
meetings and special meetings of the shareholders, and provide that,
without the approval of the shareholders, the Board may not
thereafter amend or repeal such Section or adopt any new Bylaw
provision which is inconsistent in any manner with such Section (the
"Election Procedure Resolution");
4. A proposal to remove all of the members of the Board, including
without limitation, any of the following who are members of the
Board as of the special meeting: Dennis C. Bottorff, Carole F.
Hoover, Victoria B. Jackson, C. Stephen Lynn, Jeffry F. Schoenbaum,
B. Franklin Skinner and Cal Turner, Jr.; provided, however, that if,
notwithstanding the Omnibus Resolution (as defined below), any
nominees of the Shoney's Shareholders' Committee have been elected
to the Board prior to the time this Resolution is adopted, such
nominees of the Shoney's Shareholders' Committee shall not be
removed from the Board (the "Director Removal Resolution");
5. A proposal to elect the seven nominees of the Shoney's Shareholders'
Committee, and all other persons nominated by the Shoney's
Shareholders' Committee (the "Nominees"), to fill all vacancies on
the Board for the balance of the terms of the present directors and
until their successors are elected and qualified (the "Election of
Directors Resolution");
6. A proposal to set forth the following order in which the resolutions
would be voted upon by the shareholders (the "Omnibus Resolution"):
1. The Omnibus Resolution;
2. The Bylaws Repeal Resolution;
3. The Size of Board Resolution;
4. The Election Procedure Resolution;
5. The Director Removal Resolution; and
6. The Election of Directors Resolution; and
7. Proposals to take any and all other actions incidental to the
removal and replacement of the members of the Board.
The details regarding the special meeting proposals, including the
specific text thereof, will be set forth in the proxy materials of the Shoney's
Shareholders' Committee to be distributed in connection with the special
meeting. Although the Reporting Persons do not presently expect any other
proposed matters to be included in the notice
Page 7 of 16 Pages
Exhibit Index on Page 10
<PAGE>
of the special meeting (the "Special Meeting Notice"), the Shoney's
Shareholders' Committee specifically reserves the right to include in the
Special Meeting Notice such other matters as they may deem necessary, advisable
or appropriate.
Pursuant to the Bylaws, a quorum shall be deemed constituted at a
special meeting if holders of not less than a majority of the shares of the
Issuer's common stock (the "Common Stock") outstanding and entitled to vote at
such special meeting are present in person or by proxy. In order for the
proposals to be adopted, if a quorum is present at the special meeting, a
majority of the votes cast by the shareholders of the Issuer must be in favor of
each proposal. If the shareholders are entitled to vote to elect new directors,
directors will be elected by a vote of a plurality of the shares of the Common
Stock represented by holders present at the meeting in person or by proxy. Once
elected to the Board, each director will serve until the next annual meeting and
thereafter until his or her successor has been elected and qualified or until
his or her earlier death, resignation, retirement, disqualification or removal.
Item 7. Material to be filed as Exhibits.
1. Joint Filing Agreement (Pursuant to Rule 13d-1(f))
2. Letter to the Board of Directors of the Issuer from Raymond D.
Schoenbaum dated June 2, 1997
3. Letter to Raymond D. Schoenbaum from the Board of Directors of the
Issuer dated June 5, 1997
4. Letter to the Board of Directors of the Issuer from Raymond D.
Schoenbaum dated June 16, 1997
Page 8 of 16 Pages
Exhibit Index on Page 10
<PAGE>
SIGNATURE
---------
After reasonable inquiry and to the best of our knowledge and belief,
the undersigned certify that the information set forth in this statement is
true, complete and correct.
Dated: June 16, 1997
*
-------------------------------
Betty J. Schoenbaum
/s/ Raymond D. Schoenbaum
-------------------------------
Raymond D. Schoenbaum
Schoenbaum Corporation
By: *
----------------------------
Betty J. Schoenbaum,
President
Schoenbaum Ventures L.P.
By: Schoenbaum Corporation,
General Partner
By: *
----------------------------
Betty J. Schoenbaum,
President
* By: /s/ Raymond D. Schoenbaum
------------------------------
Raymond D. Schoenbaum, pursuant to
the Joint Filing Agreement dated
April 25, 1997
Page 9 of 16 Pages
Exhibit Index on Page 10
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit Description
- ------- -----------
<S> <C>
1. Joint Filing Agreement (Pursuant to Rule 13d-1(f))
2. Letter to the Board of Directors of Shoney's, Inc.
from Raymond D. Schoenbaum dated June 2, 1997
3. Letter to Raymond D. Schoenbaum from the Board of
Directors of Shoney's, Inc. dated June 5, 1997
4. Letter to the Board of Directors of Shoney's, Inc.
from Raymond D. Schoenbaum dated June 16, 1997
</TABLE>
Page 10 of 16 Pages
Exhibit Index on Page 10
<PAGE>
EXHIBIT 1
Joint Filing Agreement
(Pursuant to Rule 13d-1(f))
In accordance with Rule 13d-1(f) promulgated under the Securities Exchange
Act of 1934, as amended, the persons named below agree to the joint filing on
behalf of each of them of a Statement on Schedule 13D (including amendments
thereto) with respect to the Common Stock of Shoney's, Inc., and further agree
that this Joint Filing Agreement be included as an exhibit to such joint filing.
Each party to this Joint Filing Agreement expressly authorizes Raymond D.
Schoenbaum to file on such party's behalf any and all amendments to such
Statement. Each such party undertakes to notify Raymond D. Schoenbaum of any
changes giving rise to an obligation to file an amendment to Schedule 13D and it
is understood that in connection with this Statement and all amendments thereto
each such party shall be responsible only for information supplied by such
party.
In evidence thereof, the undersigned, being duly authorized, hereby execute
this Agreement this 25th day of April, 1997.
/s/ Betty J. Schoenbaum
-------------------------------
Betty J. Schoenbaum
/s/ Raymond D. Schoenbaum
-------------------------------
Raymond D. Schoenbaum
Schoenbaum Corporation
By: /s/ Betty J. Schoenbaum
-------------------------
Betty J. Schoenbaum,
President
Schoenbaum Ventures L.P.
By: Schoenbaum Corporation,
General Partner
By: /s/ Betty J. Schoenbaum
--------------------------
Betty J. Schoenbaum,
President
Page 11 of 16 Pages
Exhibit Index on Page 10
<PAGE>
EXHIBIT 2
June 2, 1997
Board of Directors of Shoney's, Inc.
1727 Elm Hill Pike
Nashville, Tennessee 37210
Re: Meeting of the Shoney's, Inc. Board of Directors
------------------------------------------------
Ladies and Gentlemen:
As you know from our SEC filing last month, my mother and I are disappointed
with Shoney's performance and the performance of Shoney's stock price in recent
years. As one of the largest shareholders of Shoney's, we are obviously
concerned about the significant loss in market value that has been suffered by
all of Shoney's shareholders in recent years. Moreover, we regard Shoney's as a
legacy created by my father Alex, who founded the company in 1947, and, on a
personal note, it has been very distressing to us to watch Shoney's struggle in
recent years.
As we indicated in our SEC filing, we are in the process of evaluating
various possible alternatives with respect to our investment in Shoney's.
During this process, we have been reviewing in detail the publicly available
data regarding the business, financial condition and operating results of
Shoney's, and we have had the opportunity to discuss this publicly available
data with certain members of Shoney's management. This process is ongoing, and,
while at this time we have not decided on a course of action, we expect to make
further progress during the next two weeks.
Based on our review thus far, we believe that Shoney's is at a critical
juncture and that the actions to be taken by Shoney's Board to address the
current situation will play a crucial role in determining Shoney's future. For
this reason, I would like to meet with the Board at its meeting on June 17, 1997
to discuss Shoney's current situation and our concerns regarding the company's
future. By that time, we expect to be far enough along in our evaluation process
to present to you some concrete alternatives for addressing Shoney's current
problems.
We believe that this exchange of information and ideas will be very useful
to the Board as it gathers information and formulates a plan to address Shoney's
situation in a manner which is beneficial to all of Shoney's shareholders. In
light of the company's recent performance, the Board will be faced with some
difficult decisions in the time ahead. My successful experiences in the family
and casual restaurant industry, including most recently my founding and
development of Ray's on
Page 12 of 16 Pages
Exhibit Index on Page 10
<PAGE>
the River and the Rio Bravo restaurant chain which I sold to Applebees in 1995,
have provided me with valuable skills which I believe I can use to assist you as
you deal with Shoney's current situation.
Please let us know as soon as possible whether you will honor our request to
meet with you at the Board's meeting. We look forward to your response.
Sincerely,
/s/ Raymond D. Schoenbaum
------------------------------
Raymond D. Schoenbaum
Page 13 of 16 Pages
Exhibit Index on Page 10
<PAGE>
EXHIBIT 3
June 5, 1997
Mr. Raymond D. Schoenbaum
1640 Powers Ferry Road
Building Two, Suite 100
Marietta, Georgia 30067-6050
Dear Raymond:
On behalf of the Board of Directors, I acknowledge receipt of your letter dated
June 2, 1997. We share your concerns regarding the loss of market value that
all of us as Shoney's shareholders have experienced. We believe that we have
the proper business strategy and management team in place to improve the
performance of the Company. As with all business turnarounds, time and patience
are needed before one can determine whether the business judgment of the
leadership is proven correct.
We appreciate your offer to present to the Board on June 17 some concrete
alternatives for addressing what you view to be Shoney's current situation.
Unfortunately, as you may know, our next Board meeting has been planned for many
months as part of a working retreat meeting and the agenda is full without any
available open time for you to make your requested presentation. However, we
encourage you to submit your concrete alternatives in writing to us before that
meeting so that your ideas may be taken into account in our discussions. After
we have had the opportunity to review your alternatives, we will consider a time
in the future when you could personally discuss those with the Board or a
committee of the Board.
Management of Shoney's has consistently welcomed discussions with you and have
talked with you on a number of occasions recently to exchange information and
ideas. We continue to believe such meetings are mutually beneficial and hope
that you will continue to provide us with the benefit of your ideas.
God bless,
/s/ C. Stephen Lynn
- ------------------------
C. Stephen Lynn
Page 14 of 16 Pages
Exhibit Index on Page 10
<PAGE>
EXHIBIT 4
June 16, 1997
Board of Directors of Shoney's, Inc.
1727 Elm Hill Pike
Nashville, Tennessee 37210
Re: Meeting of the Shoney's, Inc. Board of Directors
------------------------------------------------
Ladies and Gentlemen:
My mother and I were surprised and disappointed by your letter in which you
rejected our request to address the Board at its two-day retreat in mid-June to
discuss Shoney's current situation and possible alternatives for resolving
Shoney's problems. We found it disturbing that you refused to meet with a
representative of shareholders holding approximately 8% of Shoney's stock,
particularly one who is interested in working with, and has the experience to
help, the Board in addressing Shoney's problems.
We also were surprised by the Board's suggestion that we submit our
proposals in writing after which the Board would "consider a time in the future"
for us to meet with the Board "or a committee of the Board." We believe that
this statement demonstrates a lack of understanding of the urgency of Shoney's
situation and the lack of leadership under current management. We had expected
that, in order to address Shoney's current problems, the Board would be
interested in obtaining as much information and as many ideas as soon as
possible. Instead, rather than taking a small amount of time during the Board's
two-day retreat to discuss our concerns, the Board's response appears designed
only to delay our requested meeting to discuss with you the crucial issues
facing Shoney's.
As we stated in our June 2 letter, we continue to believe that Shoney's is
at a critical juncture. We, as Shoney's shareholders, have endured many years of
poor financial performance. Over the last several years, Shoney's shareholders
have provided you with time and have patiently given you the opportunity to
revitalize Shoney's. The result of this patience has been a substantial erosion
in the stock price. Despite this record, the Board continues to state that it
has the "proper business strategy and management team." After two years under
the current management, however, Shoney's condition has not only failed to
improve, but, in fact, has deteriorated. As a result, we believe that Shoney's
shareholders no longer have the "time", nor should we be asked to have the
"patience", that you request.
Because of Shoney's continued poor performance and the Board's refusal to
meet with me at the June Board meeting despite the urgency of the present
situation, we feel that we are left with no alternative but to present our case
directly to the shareholders. We have filed documents today with Shoney's and
with the SEC for the purpose of calling a special meeting to remove the
Page 15 of 16 Pages
Exhibit Index on Page 10
<PAGE>
current members of the Board and replace them with our nominees, who would
intend to put in place a new management team committed to addressing Shoney's
condition with the urgency it requires.
We believe Shoney's is running out of time and that its long term viability
is threatened. We need to take decisive action now to ensure the long term
survival of the company for the benefit of its shareholders.
Sincerely,
/s/ Raymond D. Schoenbaum
------------------------------
Raymond D. Schoenbaum
Page 16 of 16 Pages
Exhibit Index on Page 10
