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SOLICITING MATERIAL
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 3, 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
[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)
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.
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:
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[ ] 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: ____________________________________________
2) Form, Schedule or Registration Statement no.:_______________________
3) Filing Party: ______________________________________________________
4) Date Filed: ________________________________________________________
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THE SHONEY'S SHAREHOLDERS' COMMITTEE
1640 POWERS FERRY ROAD
MARIETTA, GEORGIA 30067
July 3, 1997
SEND A MESSAGE TO THE SHONEY'S BOARD THAT YOU WANT
THE OPPORTUNITY TO DECIDE UPON NEW LEADERSHIP.
Dear Fellow Shoney's Shareholder:
We are writing to introduce ourselves as the Shoney's Shareholders'
Committee, which was formed to bring new leadership to our increasingly
troubled Company. As the son and wife of Shoney's founder, Alex Schoenbaum, we
have been part of the Shoney's family for fifty years and have been in the
restaurant business our entire lives.
Together we own approximately 3.9 million shares or about 8 percent of
Shoney's outstanding common stock, making us Shoney's second largest
shareholder. We are seeking your Agent Designation to call a Special Meeting
of Shoney's shareholders. If the special meeting is called by the
shareholders, we plan to nominate a slate of nominees to replace the current
Board of Directors.
MANAGEMENT'S PERFORMANCE AND BEHAVIOR IS UNACCEPTABLE.
Over the past several years, we have grown increasingly frustrated and
disappointed with the rapid deterioration of the fundamental concept upon
which Shoney's was founded -- giving the customer quality food and service at
a reasonable price in an attractive, family-oriented atmosphere.
WORSE, WE BELIEVE SHONEY'S MANAGEMENT HAS NO WORKABLE PLAN TO COMBAT ITS
LOST MARKET SHARE, DEBT PROBLEMS AND POOR FINANCIAL PERFORMANCE.
The financial markets certainly agree with this view:
. SHONEY'S STOCK HAS LOST APPROXIMATELY 80 PERCENT OF ITS VALUE FROM
OCTOBER 1993 TO APRIL 25, 1997 (THE DAY ON WHICH WE PUBLICLY DISCLOSED
OUR CONCERNS WITH THE COMPANY'S PERFORMANCE IN A 13-D FILING).
. During this same period, the S&P 500 and the S&P Restaurants Index have
increased 63.6% and 66.8%, respectively.
. C. Stephen Lynn became Chairman of the Board in June 1995. Yet, under
his leadership, Shoney's share value has continued to decline.
SHONEY'S NEEDS NEW LEADERSHIP BEFORE IT'S TOO LATE!
Shoney's performance under current management is simply unacceptable and we
believe Shoney's may be running out of time. Nevertheless, management appears
unwilling to listen to any constructive ideas. Last month, we asked to address
the Board and management in the hopes of finding mutually acceptable solutions
to the Company's problems.
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WE WERE SHOCKED TO FIND OUR REQUEST QUICKLY REJECTED, WHICH CONFIRMED TO US
THAT SHONEY'S DESPERATELY NEEDS NEW LEADERSHIP. AFTER MANAGEMENT'S REBUFF, WE
NOW BELIEVE OUR ONLY OPTION IS TO TAKE OUR CONCERNS AND PLANS TO IMPROVE
SHONEY'S DIRECTLY TO YOU -- THE REAL OWNERS OF THE COMPANY.
MANAGEMENT HAS MANIPULATED THE CORPORATE
GOVERNANCE PROCESS AND IGNORED YOUR RIGHTS AS SHAREHOLDERS.
Regrettably, Shoney's management has done nothing but attempt to entrench
itself further. Management appears determined to continue erecting roadblocks,
despite the cost to shareholders, to prevent the real owners of Shoney's from
deciding Shoney's future. Since we filed our Agent Designation materials,
Shoney's management has:
. Hired expensive New York City lawyers to fight us at a time when the
Company can ill-afford it.
. HELD AN "EMERGENCY" BOARD MEETING TO AMEND THE COMPANY'S BYLAWS IN AN
ATTEMPT TO DELAY YOU FROM PROMPTLY CALLING A SPECIAL MEETING.
. Attempted to seize control from shareholders over setting the record and
meeting dates through adoption of certain bylaw amendments.
We have commenced litigation in an effort to invalidate these anti-
shareholder amendments. It is a basic right of shareholders to have a voice in
deciding how a company should be run and we think all Shoney's shareholders
should support their fundamental right to be heard. Send a message to Shoney's
management that you will not let them trample upon your shareholder rights.
Execute and return to us the enclosed BLUE Agent Designation card so that a
special meeting can be called.
WHY RAY SCHOENBAUM IS QUALIFIED TO LEAD A NEW SHONEY'S BOARD.
Besides being a major shareholder of Shoney's, I, Ray Schoenbaum, have also
spent 37 years in the restaurant and restaurant services businesses, beginning
my career at Shoney's in 1960. Since then, I:
. Successfully grew a Wendy's franchisee, Restaurant Systems, Inc., to
more than 30 stores and sold them to Wendy's in 1985 for $40 million.
. Developed the concept for Rio Bravo, which grew into a chain of 16
restaurants and started Ray's on the River, a restaurant in Atlanta,
both of which were sold to Applebee's International, Inc. for $70
million in 1995.
. Became (and currently serve as) a director of Applebee's and served as
director of Max & Erma's Restaurants, Inc. and chairman of Squirrel
Companies, Inc., a manufacturer of restaurant point-of-sale systems.
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WE NEED YOUR BLUE AGENT DESIGNATION CARD BY JULY 14.
As a first step in the process to replace the Board, shareholders
representing 10% or more of Shoney's outstanding shares must submit BLUE Agent
Designation cards calling for a special meeting.
We urge you to read our enclosed Agent Designation solicitation statement
carefully. It will provide you with further detail on our concerns and plans
for the Company.
PLEASE SIGN AND DATE THE ENCLOSED BLUE AGENT DESIGNATION CARD AND RETURN IT
IN THE POSTAGE PAID ENVELOPE. WE NEED YOUR AGENT DESIGNATION BY JULY 14, SO
PLEASE TAKE A MOMENT TO MAIL IT TODAY. REMEMBER -- YOU ARE AGREEING ONLY TO
HAVE A SPECIAL MEETING CALLED. AT THIS TIME, WE ARE NOT SEEKING YOUR VOTE ABOUT
WHOM TO ELECT AS DIRECTORS.
If you have questions about giving us your Agent Designation, please contact
MacKenzie Partners, Inc., which is assisting us with the call for a special
meeting, toll-free at (800) 322-2885.
Sincerely,
[SIGNATURE OF RAYMOND D. SCHOENBAUM [SIGNATURE OF BETTY J. SCHOENBAUM
APPEARS HERE] APPEARS HERE]
Raymond D. Schoenbaum Betty J. Schoenbaum
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If you have any questions or need assistance in completing the BLUE Agent
Designation card, please contact:
[LOGO OF MACKENZIE PARTNERS APPEARS HERE]
156 Fifth Avenue
New York, New York 10010
(212) 929-5500 (call collect)
or
CALL TOLL-FREE (800) 322-2885
