SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. _____)
SHONEY'S, INC.
--------------
(Name of Subject Company (Issuer))
SHONEY'S, INC.
--------------
(Name of Filing Person (Issuer))
LIQUID YIELD OPTION NOTES DUE 2004
(Zero Coupon - Subordinated)
8-1/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2002
---------------------------------------------------
(Title of Classes of Securities)
825039 AC 4
872623 AA 1
(CUSIP Number of Classes of Securities)
V. Michael Payne Gary M. Brown
Senior Vice President and Controller Yopp & Sweeney, PLC
SHONEY'S, INC. Bank of America Plaza
1727 Elm Hill Pike 414 Union Street, Suite 1100
Nashville, Tennessee 37210 Nashville, Tennessee 37219
(615) 231-2332 (615) 313-3325
- -----------------------------------------------------------------------
(Name, Address and Telephone Numbers of Persons Authorized to
Receive Notices and Communications on Behalf of Filing Persons)
CALCULATION OF FILING FEE
-------------------------
TRANSACTION VALUATION(1) AMOUNT OF FILING FEE
$ 44,548,140 $ 8,910
(1) For purposes of calculating the filing fee pursuant to Rule 0-11 of
the Securities Exchange Act of 1934, the market value of the Liquid Yield
Option Notes Due 2004 (Zero Coupon - Subordinated) and the 8-1/4% Convertible
Subordinated Debentures Due 2002 proposed to be acquired is based on the
amount of cash to be paid for such securities.
[ ] Check the box if any part of the fee is offset as provided by Rule
0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration
number, or the Form or Schedule and the date of its filing.
Amount Previously Paid: Filing Party:
Form or Registration No.: Date Filed:
[ ] Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to
which the statement relates:
[ ] third-party tender offer subject to Rule 14d-1.
[ X ] issuer tender offer subject to Rule 13e-4.
[ X ] going-private transaction subject to Rule 13e-3.
[ ] amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting
the results of the tender offer: [ ]
INTRODUCTORY STATEMENT
This Issuer Tender Offer Statement on Schedule TO (the "Statement") is
being filed with the Securities and Exchange Commission (the "Commission") by
Shoney's, Inc., a Tennessee corporation (the "Company"), in connection with
tender offers (each, a "Tender Offer" and, collectively, the "Tender Offers")
by the Company for any and all of its Liquid Yield Option Notes Due 2000
(Zero Coupon - Subordinated) (the "LYONs") and any and all of its 8-1/4%
Convertible Subordinated Debentures Due 2002 (the "Debentures"). Copies of
the Purchase Offer and Consent Solicitation Statement (the "Offer to
Purchase") and Letters of Transmittal are attached hereto as Exhibits (a)(1),
(a)(2) (a)(3) and (a)(4), respectively. Pursuant to General Instruction F to
Schedule TO, information contained in the Offer to Purchase is hereby
incorporated by reference in the answers to items of this Statement.
ITEM 1. SUMMARY TERM SHEET.
The information set forth in the Offer to Purchase under the caption
"Summary Term Sheet" is incorporated herein by reference.
ITEM 2. SUBJECT COMPANY INFORMATION.
(a) NAME AND ADDRESS. The name of the Company is Shoney's, Inc., which
is the issuer of the LYONs and the Debentures subject to the Tender
Offers. The Company's principal executive offices are located at
1727 Elm Hill Pike, Nashville, Tennessee 37210. The telephone number
for the Company is (615) 391-5201. Reference is made to the
information set forth in the Offer to Purchase under the caption "The
Company," which information is incorporated herein by reference.
(b) SECURITIES. The securities which are the subject of the Tender
Offers are the Liquid Yield Option Notes Due 2004 (Zero Coupon -
Subordinated) and the 8-1/4% Convertible Subordinated Debentures Due
2002 of the Company. As of March 24, 2000, there was outstanding
$$177,358,000 in aggregate principal amount at maturity of the LYONs
(with an accreted value as of such date of $126,629,558) and
$51,563,000 in principal amount of Debentures. Reference is made to
the information set forth on the cover page of the Offer to Purchase
and in the Offer to Purchase under the caption "Description of the
Notes," which information is incorporated herein by reference.
(c) TRADING MARKET AND PRICE. The LYONs currently are listed for
quotation on the New York Stock Exchange ("NYSE") under the symbol
"SHN0D04." The Debentures currently are quoted in the over-the
counter market. Reference is made to the information set forth in the
Offer to Purchase under the captions "Description of the
Notes - Market and Trading Information," which information is
incorporated herein by reference.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
This is an issuer tender offer and the Company is the only filing
person. The information set forth in response to Item 2(a) of this Statement
is incorporated herein by reference.
ITEM 4. TERMS OF THE TRANSACTION.
(a) Material Terms.
(1) TENDER OFFERS
(i)-(ii) The information set forth on the cover of the Offer to
Purchase and in the Offer to Purchase under the caption "The
Tender Offers and Consent Solicitations - Purpose" is
incorporated herein by reference.
(iii) The information set forth on the cover of the Offer to
Purchase and in the Offer to Purchase under the caption "The
Tender Offers and Consent Solicitations - Extension,
Amendment and Termination of Tender Offers and Consent
Deadlines" is incorporated herein by reference.
(iv) Not applicable.
(v) The information set forth in the Offer to Purchase under the
caption "The Tender Offers and Consent Solicitations -
Extension, Amendment and Termination of Tender Offers and
Consent Deadlines" is incorporated herein by reference.
(vi) The information set forth in the Offer to Purchase under the
caption "The Tender Offers and Consent Solicitations -
Withdrawal and Revocation Rights" is incorporated herein by
reference.
(vii) The information set forth in the Offer to Purchase under the
captions "The Tender Offers and Consent Solicitations -
Procedures for Tendering Notes and Delivering Consents, -
Withdrawal and Revocation Rights and - Acceptance for
Payment and Payment for the Notes" is incorporated herein by
reference.
(viii) The information set forth in the Offer to Purchase under the
caption "The Tender Offers and Consent Solicitations -
Acceptance for Payment and Payment for the Notes" is
incorporated herein by reference.
3
(ix) Not applicable.
(x) The information set forth in the Offer to Purchase under the
caption "Special Factors - Adverse Effect of Proposed
Amendments on Holders who do not Tender" and "Proposed
Amendments to the Indentures" is incorporated herein by
reference.
(xi) Not applicable.
(xii) The information set forth in the Offer to Purchase under the
caption "Certain U.S. Federal Income Tax Consequences" is
incorporated herein by reference.
(2) MERGERS OR SIMILAR TRANSACTIONS.
Not applicable.
(b) PURCHASES.
To the best knowledge of the Company, no LYONs or Debentures are to be
purchased from any officer, director or affiliate of the Company.
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS. Not
Applicable.
ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
(a) PURPOSES. The information set forth in the Offer to Purchase under
the caption "The Tender Offers and Consent Solicitations - Purpose"
is incorporated herein by reference.
(b) USE OF SECURITIES. The information set forth in the Offer to
Purchase under the caption "The Tender Offers and Consent
Solicitations - Purpose" is incorporated herein by reference.
(c) PLANS.
(1) The information set forth in the Offer to Purchase under the
captions "Special Factors - Proposed Restructuring and
Refinancing" and "The Company - Planned Reorganization" is
incorporated herein by reference.
(2) The information set forth in the Offer to Purchase under the
captions "Special Factors - Proposed Restructuring and
Refinancing" and "The Company - Planned Reorganization" is
incorporated herein by reference.
4
(3) The information set forth in the Offer to Purchase under the
captions "Special Factors - Proposed Restructuring and
Refinancing" and "The Company - Planned Reorganization" is
incorporated herein by reference.
(4) Not applicable.
(5) The information set forth in the Offer to Purchase under the
captions "Special Factors - Proposed Restructuring and
Refinancing" and "The Company - Planned Reorganization" is
incorporated herein by reference.
(6) If the Tender Offer is successful, the LYONs will cease to
be traded on the NYSE and the Debentures no longer will be
traded in the over-the-counter market. There are no plans,
however, to cause the Company's common stock, into which the
LYONs and the Debenture are both convertible, to cease to
trade on the NYSE. The information set forth in the Offer
to Purchase under the captions "Special Factors - Reduced
Liquidity of the Notes" and "Description of the Notes -
Market and Trading Information" is incorporated herein by
reference.
(7) The information set forth in response to Item 6(c)(6) of
this Statement is incorporated herein by reference.
(8) Not applicable.
(9) Not applicable.
(10) The information set forth in the Offer to Purchase under the
caption "The Company - Planned Reorganization" is
incorporated herein by reference.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) SOURCE OF FUNDS. The information set forth in the Offer to Purchase
under the caption "The Company - Source and Amount of Funds" is
incorporated herein by reference.
(b) CONDITIONS. The information set forth in the Offer to Purchase under
the captions "The Tender Offers and Consent Solicitations -
Conditions" and "The Company - Source and Amount of Funds" is
incorporated herein by reference.
(c) EXPENSES. Not required by Schedule TO.
5
(d) BORROWED FUNDS.
(1)-(2) The information set forth in the Offer to Purchase under the
caption "The Company - Source and Amount of Funds" is
incorporated herein by reference.
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
(a) SECURITIES OWNERSHIP. Not applicable.
(b) SECURITIES TRANSACTIONS. Not applicable.
ITEM 9. PERSONS/ASSETS RETAINED, EMPLOYED, COMPENSATED OR USED.
The information set forth in the Offer to Purchase under the captions
"Dealer Manager, Depositary and Information Agent" and "Miscellaneous" is
incorporated herein by reference.
ITEM 10. FINANCIAL STATEMENTS.
The information set forth in the Offer to Purchase under the captions
"Financial Information" is incorporated herein by reference.
In addition, the financial statements contained in the Company's Annual
Report on Form 10-K for the fiscal year ended October 31, 1999, filed with
the Commission on January 31, 2000, and the Company's Quarterly Report on
Form 10-Q for the fiscal quarter ended February 20, 2000, filed with the
Commission on March 22, 2000, which are listed in the Offer to Purchase under
the caption "Incorporation of Information by Reference" are incorporated
herein by reference.
ITEM 11. ADDITIONAL INFORMATION.
(a) AGREEMENTS, REGULATORY REQUIREMENTS AND LEGAL PROCEEDINGS.
(1) None other than previously disclosed.
(2) The only regulatory requirements that must be met are those
imposed by applicable securities laws.
(3) Not applicable.
(4) Not applicable.
(5) Not applicable.
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(b) OTHER MATERIAL INFORMATION. The information set forth in the Offer
to Purchase and the Letters of Transmittal, copies of which are
attached hereto as Exhibits (a)(1), (a)(2) (a)(3) and (a)(4),
respectively, is incorporated herein by reference.
ITEM 12. EXHIBITS.
(a) (1) Purchase Offer and Consent Solicitation Statement dated
March 27, 2000.
(2) Form of Letter of Transmittal - Liquid Yield Option Notes
(Tender Only)
(3) Form of Letter of Transmittal - Liquid Yield Option Notes
(Tender and Consent)
(4) Form of Letter of Transmittal - 8-1/4% Convertible
Subordinated Debentures
(5) Notice of Guaranteed Delivery and Consent - Liquid Yield
Option Notes
(6) Notice of Guaranteed Delivery and Consent - 8-1/4%
Convertible Subordinated Debentures
(7) Form of Letter to Broker, Dealers, Commercial Banks, Trust
Companies and Other Nominees (LYONS - Tender Only)
(8) Form of Letter to Broker, Dealers, Commercial Banks, Trust
Companies and Other Nominees (LYONS - Tender and Consent).
(9) Form of Letter to Broker, Dealers, Commercial Banks, Trust
Companies and Other Nominees (Debentures).
(10) Form of Letter to Clients (LYONS - Tender Only).
(11) Form of Letter to Clients (LYONS - Tender and Consent).
(12) Form of Letter to Clients (Debentures).
(13) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(14) Press Release, dated March 27, 2000.
(b) None
(c) None
7
(d) None
(e) Not required by Schedule TO
(f) None
(g) None
(h) None
ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.
The LYONs are deemed "equity securities" because they are convertible
into the Company's common stock. The LYONs currently are listed on the NYSE.
Because the Tender Offer has either the reasonable likelihood or purpose of
causing the LYONs to no longer be listed on the NYSE, this transaction is
technically deemed to constitute a "going-private transaction." As such, the
following sets forth that information required by Schedule 13E-3 that has not
already been set forth in Items 1-12 above. The information set forth in the
Offer to Purchase is incorporated herein by reference to the items required
by Schedule 13E-3.
ITEM 2 OF SCHEDULE 13E-3.
(a) DIVIDENDS ON NOTES. Not applicable.
(b) PRIOR PUBLIC OFFERINGS OF THE NOTES. Not applicable.
(c) PRIOR PURCHASES OF THE NOTES. Not applicable.
ITEM 4 OF SCHEDULE 13E-3.
(a) DIFFERENT TERMS. The terms or arrangements that treat any Holder of
LYONs or Debentures different from other Holders of LYONs or
Debentures are set forth in the Offer to Purchase under the captions
"Special Factors - Adverse Effect of Proposed Amendments on Holders
Who Do Not Tender," "Proposed Amendments to the Indentures" and "The
Tender Offers and Consent Solicitations" which are incorporated
herein by this reference.
(b) APPRAISAL RIGHTS. Holders of LYONs and Debentures do not have
appraisal rights in connection with this transaction. See the
discussion in the Offer to Purchase under the caption "The Tender
Offers and Consent Solicitations - Absence of Appraisal Rights,"
which is incorporated herein by reference.
8
(c) PROVISIONS FOR UNAFFILIATED SECURITY HOLDERS. The Company has not
made and does not intend to make any provision in connection with the
Tender Offers to grant unaffiliated security holders access to the
Company's corporate files or to obtain counsel or appraisal services
at the Company's expense.
(d) ELIGIBILITY FOR LISTING OR TRADING. Not applicable.
ITEM 5 OF SCHEDULE 13E-3. None, except as disclosed in information
incorporated by reference.
ITEM 7 OF SCHEDULE 13E-3.
(a) PURPOSES. The information set forth in the Offer to Purchase under
the captions "Special Factors" and "The Tender Offers and Consent
Solicitations - Purpose" is incorporated herein by reference.
(b) ALTERNATIVES. Not applicable.
(c) REASONS. The information set forth in the Offer to Purchase under
the captions "Special Factors," "The Company - Planned
Reorganization" and "The Tender Offers and Consent Solicitations -
Purpose" is incorporated herein by reference.
(d) EFFECTS. The information set forth in the Offer to Purchase under
the captions "Special Factors," "The Tender Offers and Consent
Solicitations," "Proposed Amendments to the Indentures" and "Certain
U.S. Federal Income Tax Consequences" is incorporated herein by
reference.
ITEM 8 OF SCHEDULE 13E-3.
(a) FAIRNESS. The information set forth in the Offer to Purchase under
the captions "Special Factors" and "The Tender Offers and Consent
Solicitations - Purpose" is incorporated herein by reference.
(b) FACTORS CONSIDERED IN DETERMINING FAIRNESS. The information set
forth in the Offer to Purchase under the captions "Special Factors"
and "The Tender Offers and Consent Solicitations - Purpose" is
incorporated herein by reference.
(c) APPROVAL OF SECURITY HOLDERS. The information set forth in the Offer
to Purchase under the captions "Special Factors" and "The Tender
Offers and Consent Solicitations -Conditions" is incorporated herein
by reference.
(d) UNAFFILIATED REPRESENTATIVE. The information set forth in the Offer
to Purchase under the caption "Special Factors" is incorporated
herein by reference.
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(e) APPROVAL OF DIRECTORS. The Rule 13e-3 transaction has been approved
by a majority of the Company's non-employee directors.
(f) OTHER OFFERS. Not applicable.
ITEM 9 OF SCHEDULE 13E-3.
(a) REPORT, OPINION OR APPRAISAL. The Company has not received any
report, opinion or appraisal from an outside party that is materially
related to the Rule 13e-3 transaction. The information set forth in
the Offer to Purchase under the caption "Special Factors" is
incorporated herein by reference.
(b) PREPARER AND SUMMARY OF THE REPORT, OPINION OR APPRAISAL. Not
applicable.
(c) AVAILABILITY OF DOCUMENTS. Not applicable.
ITEM 10 OF SCHEDULE 13E-3.
Set forth below is a reasonably itemized list of the expenses the
Company has incurred or expects to incur in connection with this transaction.
The company has paid or will be responsible for paying all of these expenses.
<TABLE>
<S> <C>
Fees to Dealer-Manager $ 2,300,000
Fees to Information Agent 10,000
Fees to Depositary 15,000
Printing and Mailing Expenses 25,000
Legal and Accounting Fees 120,000
Miscellaneous 30,000
-----------
Total $ 2,500,000
===========
</TABLE>
ITEM 12 OF SCHEDULE 13E-3.
(a) INTENT TO TENDER OR VOTE IN A GOING-PRIVATE TRANSACTION. Not
applicable. To the knowledge of the Company, no executive officer,
director, affiliate or subsidiary beneficially owns any of the
subject securities.
(b) RECOMMENDATIONS OF OTHERS. Not applicable.
10
ITEM 14 OF SCHEDULE 13E-3.
Directors, officers and regular employees of the Company (who will not
be specifically compensated for such services), and the Dealer Manager may
contact Holders by mail, telephone, telex, telegram messages, mailgram
messages, datagram messages and personal interviews regarding the Tender
Offers and may request brokers, dealers and other nominees to forward the
Purchase Offer and Consent Solicitation Statement and related materials to
beneficial owners of Notes.
ITEM 16 OF SCHEDULE 13E-3.
The Exhibits required by Schedule 13E-3 to be attached hereto, along
with the exhibits required by Schedule TO, are listed in Item 12 of Schedule
TO above.
11
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this Statement is true, complete and
correct.
SHONEY'S, INC.
By: /s/ V. Michael Payne
----------------------------------
V. Michael Payne
Title: Senior Vice President and Controller
Date: March 27, 2000
12
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- ------ ------------------------------------------------------------------
(a)(1) Purchase Offer and Consent Solicitation Statement dated March 27,
2000.
(2) Form of Letter of Transmittal - Liquid Yield Option Notes (Tender
Only).
(3) Form of Letter of Transmittal - Liquid Yield Option Notes (Tender and
Consent).
(4) Form of Letter of Transmittal - 8-1/4% Convertible Subordinated
Debentures.
(5) Notice of Guaranteed Delivery and Consent - Liquid Yield Option
Notes.
(6) Notice of Guaranteed Delivery and Consent - 8-1/4% Convertible
Subordinated Debentures.
(7) Form of Letter to Broker, Dealers, Commercial Banks, Trust Companies
and Other Nominees (LYONs - Tender Only).
(8) Form of Letter to Broker, Dealers, Commercial Banks, Trust Companies
and Other Nominees (LYONs - Tender and Consent).
(9) Form of Letter to Broker, Dealers, Commercial Banks, Trust Companies
and Other Nominees (Debentures).
(10) Form of Letter to Clients (LYONs - Tender Only).
(11) Form of Letter to Clients (LYONs - Tender and Consent).
(12) Form of Letter to Clients (Debentures).
(13) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(14) Press Release, dated March 27, 2000.
(b) None
(c) None
13
(d) None
(e) Not required by Schedule TO
(f) None
(g) None
(h) None
14
PURCHASE OFFER AND CONSENT SOLICITATION STATEMENT
SHONEY'S, INC.
Offers to Purchase for Cash Any and All of the Outstanding
<TABLE>
<S><C>
8-1/4% Convertible Subordinated Debentures Due 2002, CUSIP No. 872623 AA 1 and
Liquid Yield Option Notes Due 2004 (Zero Coupon - Subordinated), CUSIP No. 825039 AC 4
and Consent Solicitation with respect to the related Indentures
- --------------------------------------------------------------------------------------
THESE OFFERS WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON APRIL 24, 2000, UNLESS
EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE "EXPIRATION DATE"). HOLDERS
OF NOTES MUST TENDER THEIR NOTES ON OR PRIOR TO THE EXPIRATION DATE TO RECEIVE THE
TENDER OFFER CONSIDERATION. THE CONSENT SOLICITATION WITH RESPECT TO THE TPI
DEBENTURES WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON APRIL 10, 2000, UNLESS
EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE "TPI CONSENT DEADLINE"). THE
CONSENT SOLICITATION WITH RESPECT TO THE LYONS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON THE 10TH CALENDAR DAY AFTER THE LYONS CONSENT SOLICITATION MATERIALS RECEIVE
REGULATORY CLEARANCE AND ARE MAILED IN DEFINITIVE FORM TO REGISTERED HOLDERS OF THE
LYONS, UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE "LYONS CONSENT
DEADLINE") (THE TPI CONSENT DEADLINE AND THE LYONS CONSENT DEADLINE BEING SOMETIMES
REFERRED TO AS THE "APPLICABLE CONSENT DEADLINE" OR COLLECTIVELY AS THE "CONSENT
DEADLINES"). TO RECEIVE A CONSENT PAYMENT, HOLDERS MUST, PRIOR TO THE APPLICABLE
CONSENT DEADLINE, TENDER THEIR NOTES AND CONSENT TO THE PROPOSED AMENDMENTS AND NOT
REVOKE SUCH CONSENTS.
- --------------------------------------------------------------------------------------
Shoney's, Inc., a Tennessee corporation (the "Company"), upon the terms and
subject to the conditions set forth in this Purchase Offer and Consent Solicitation
Statement (as it may be amended or supplemented, the "Statement") and the accompanying
Letters of Transmittal (each, a "Letter of Transmittal") (the Statement and each
Letter of Transmittal being sometimes referred to herein as an "Offer"), hereby offers
to purchase for cash any and all of the following debt securities (collectively, the
"Notes"): the 8-1/4% Convertible Subordinated Debentures Due 2002 originally issued by
TPI Enterprises, Inc. ("TPI") and subsequently assumed by the Company (the "TPI
Debentures") at a price of $235.00 per $1,000 principal amount of any TPI Debenture
purchased (the "Debenture Purchase Price"), and the Liquid Yield Option Notes Due 2004
(Zero Coupon - Subordinated) issued by the Company (the "LYONs") at a price of $235.00
per $1,000 of accreted value as of March 27, 2000 ("Accreted Value") of any LYON
purchased (the "LYONs Purchase Price"). Each of the Offers is sometimes referred to
as a "Tender Offer" and collectively, as the "Tender Offers". The Debenture Purchase
Price and the LYONs Purchase Price each may be referred to individually or
collectively as the "Tender Offer Consideration." NOTE THAT ONLY THE TENDER OFFER
CONSIDERATION WILL BE PAID AND THAT NO ADDITIONAL PAYMENT WILL BE MADE ON ACCOUNT OF
ACCRUED INTEREST.
The LYONs and the TPI Debentures are convertible into the Company's $1.00 par
value common stock (the "Shares"). The LYONs are convertible at a rate of 29.349
Shares per $1,000 principal amount at maturity. The TPI Debentures are convertible
into 50.508 Shares per $1,000 principal amount. The Shares presently are traded on
the New York Stock Exchange ("NYSE") under the symbol "SHN". On March 24, 2000, the
last reported sales price of the Shares on the NYSE was $1.00. As of March 24, 2000,
there were outstanding $177,358,000 in principal amount at maturity of LYONs (with an
aggregate accreted value as of that date of $126,629,558) and $51,563,000 in principal
amount of TPI Debentures. SEE "SPECIAL FACTORS" AND "CERTAIN FEDERAL INCOME TAX
CONSEQUENCES" FOR CERTAIN MATTERS THAT SHOULD BE CONSIDERED BY HOLDERS IN EVALUATING
THE TENDER OFFERS AND SOLICITATION.
In conjunction with the Tender Offers, the Company hereby solicits (the
"Solicitation") consents ("Consents") of registered holders of the Notes ("Holders")
to certain proposed amendments to the indentures pursuant to which the Notes were
issued. Subject to the terms and conditions set forth in the Offers, the Company will
pay to each Holder $15.00 for each $1,000 principal amount at maturity of the TPI
Debentures and $15.00 for each $1,000 of the Accreted Value of LYONs for which
Consents are validly delivered prior to the Applicable Consent Deadline and not
validly revoked (the "Consent Payment"), with such payment to be made on the Payment
Date (as defined herein) if, but only if, the Notes with respect to which such
Consents were delivered are accepted for payment pursuant to the Tender Offers. Also,
Holders of LYONs may not consent to the proposed amendments until the LYONs consent
form receives regulatory clearance and is mailed in definitive form to LYONs Holders,
which is expected to occur on or shortly after April 6, 2000. If Notes are not
properly tendered pursuant to the Tender Offers on or prior to the Applicable Consent
Deadline, the Holders will not receive the Consent Payment, even if the proposed
amendments become effective. If the requisite number of Consents are received, the
proposed amendments will be effective as to all Notes, including those that are not
purchased in the Tender Offers.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE TRANSACTIONS, PASSED UPON THE MERITS
OR FAIRNESS OF THESE TRANSACTIONS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS
STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
</TABLE>
_______________________
THE DEALER MANAGER FOR THE TENDER OFFERS IS:
BANC OF AMERICA SECURITIES LLC
March 27, 2000
IMPORTANT INFORMATION
Any Holder desiring to tender Notes and Consent to the Proposed
Amendments (as defined herein) should either (a) in the case of a Holder who
holds physical certificates evidencing such Notes, complete and sign the
applicable Letter of Transmittal and, in the case of Holders of LYONs, the
related Consent form (which will be provided after the Company receives
regulatory clearance) (or facsimile thereof) in accordance with the
instructions therein (including any applicable signature guarantee
requirements) and send or deliver the manually signed Letter of Transmittal
and, in the case of Holders of LYONs, the related Consent form (or a manually
signed facsimile thereof), together with certificates evidencing such Notes
and any other required documents, to The Bank of New York, as Depositary (the
"Depositary"), or (b) in the case of a Holder who holds Notes in book-entry
form, request such Holder's broker, dealer, commercial bank, trust company or
other nominee to effect such transactions for such Holder. A beneficial
owner who has Notes registered in the name of a broker, dealer, commercial
bank, trust company or other nominee must contact that broker, dealer,
commercial bank, trust company or other nominee if the beneficial owner
desires to tender the Notes so registered and Consent to the Proposed
Amendments. See "The Tender Offers and Consent Solicitations-Procedures for
Tendering Notes and Delivering Consents".
_____________________
HOLDERS OF LYONS SHOULD USE THE BLUE LETTER OF TRANSMITTAL IN ORDER TO TENDER
THEIR LYONS - HOLDERS OF LYONS WILL NOT BE ABLE TO CONSENT TO THE PROPOSED
AMENDMENTS TO THE LYONS INDENTURE (AS DEFINED HEREIN) UNTIL THE LYONS CONSENT
SOLICITATION MATERIALS RECEIVE REGULATORY CLEARANCE AND ARE MAILED IN
DEFINITIVE FORM TO SUCH HOLDERS, WHICH IS EXPECTED TO OCCUR ON OR SHORTLY
AFTER APRIL 6, 2000
HOLDERS OF TPI DEBENTURES SHOULD USE THE YELLOW LETTER OF TRANSMITTAL IN
ORDER TO BOTH TENDER THEIR TPI DEBENTURES AND CONSENT TO THE PROPOSED
AMENDMENTS TO THE TPI INDENTURE (AS DEFINED HEREIN)
_____________________
FORWARD LOOKING STATEMENTS
Certain statements contained in, or incorporated by reference into, this
Statement may be considered forward looking statements within the meaning
Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). These forward looking statements are based largely on the
expectations of the Company and are subject to a number of risks and
uncertainties, many of which are beyond the control of the Company. Actual
results could differ materially from these forward-looking statements as a
result of certain factors, included but not limited to those described in the
Annual Report on Form-10-K of the Company for the year ended October 31,
1999, which is incorporated herein by reference.
_____________________
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THE OFFER AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED. THIS STATEMENT AND ANY RELATED DOCUMENTS DO NOT CONSTITUTE
AN OFFER TO BUY OR THE SOLICITATION OF AN OFFER TO SELL NOTES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL. IN THOSE
JURISDICTIONS WHERE THE SECURITIES, BLUE SKY OR OTHER LAWS REQUIRE THE OFFER
TO BE MADE BY A LICENSED BROKER OR DEALER, THE OFFER SHALL BE DEEMED TO BE
MADE ON BEHALF OF THE COMPANY BY THE DEALER MANAGER OR ONE OR MORE REGISTERED
BROKERS OR DEALERS LICENSED UNDER THE LAWS OF SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS STATEMENT AND RELATED DOCUMENTS NOR ANY PURCHASE OF NOTES
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION
CONTAINED HEREIN OR THEREIN IS CURRENT AS OF ANY TIME SUBSEQUENT TO THE DATE
OF SUCH INFORMATION.
SUMMARY TERM SHEET
The following summarizes in a question and answer format the material
terms of the tender offers and the consent solicitations. You should
carefully read this entire document, as well as all appendices and related
documents, however, for more detailed information and instructions.
* WHAT NOTES ARE THE SUBJECT OF THE TENDER OFFERS AND CONSENT
SOLICITATIONS? (COVER PAGE, PAGE 16)
The notes that are the subject of the tender offers and consent
solicitations are the Liquid Yield Option Notes Due 2004 (Zero Coupon -
Subordinated) issued by Shoney's, Inc. and the 8-1/4% Convertible
Subordinated Debentures Due 2002, originally issued by TPI Enterprises, Inc.
and assumed by Shoney's, Inc. in 1996. As of March 24, 2000, there was
outstanding $177,358,000 in aggregate principal amount at maturity of the
LYONs (with an accreted value as of such date of $126,629,558) and
$51,563,000 in aggregate principal amount of the TPI debentures.
* WHO IS OFFERING TO BUY THE NOTES AND SOLICITING THE CONSENTS? (COVER
PAGE, PAGE 16)
Shoney's, the company that issued or, in the case of the TPI debentures,
assumed the notes, is offering to purchase for cash all of the outstanding
notes. In connection with those tender offers, Shoney's also is requesting
consents to amend the indentures under which the notes were issued.
* WHY IS SHONEY'S OFFERING TO PURCHASE THE NOTES AND SOLICITING THE
CONSENTS? (PAGES 6, 16)
We intend to restructure our operations and refinance substantially all
of our existing senior indebtedness. A major element of this restructuring
plan is the separation of our "Shoney's" and "Captain D's" restaurant
operations, which are to be separately financed with their own new senior
indebtedness. The purpose of the tender offers and consent solicitations is
to acquire all of the outstanding notes in connection with that refinancing
and to obtain greater financial and operational flexibility. We intend to
effect the restructuring and debt refinancing regardless of the outcome of
the tender offers and consent solicitations.
* HOW MUCH IS SHONEY'S OFFERING TO PAY FOR THE NOTES? (COVER PAGE, PAGE
16)
We are offering to pay $235.00 per $1,000 of the accreted value as of
March 27, 2000 of any LYON purchased and $235.00 per $1,000 principal amount
of any Debenture purchased. We also are offering to pay a "consent payment"
of $15.00 per $1,000 principal amount at maturity of any Debenture and
$15.00 per $1,000 of the accreted value as of March 27, 2000 of any LYON that
is purchased pursuant to the tender offers and for which a consent is timely
given to approve the adoption of the proposed amendments to the indentures
under which the notes were issued.
i
* WHAT IS THE MARKET VALUE OF THE NOTES? (PAGE 27)
During the quarter ended February 20, 2000, the LYONs traded at values
between $120.00 and $225.00 per $1,000 principal amount at maturity. The
last reported trade of the LYONs on March 23, 2000 was at $126.25 per $1,000
principal amount at maturity. There is no established reporting or trading
system for the TPI debentures and we are unable to determine the trading
history of the TPI debentures. We believe that the trading in both the LYONs
and the TPI debentures has been limited and sporadic. The total LYONs
purchase price and consent payment of $250.00 per $1,000 of accreted value
equals $178.62 per $1,000 of principal amount at maturity.
* WHEN AND HOW WILL PAYMENT BE MADE? (COVER PAGE, PAGE 20)
Notes purchased will be paid for in same-day funds on the second
business day after the date on which the tender offers end, or as soon as
practicable after the tender offers end. Assuming the tender offers are not
extended, the payment date is expected to be April 26, 2000.
* DOES SHONEY'S HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT? (PAGE 8)
We currently are engaged in discussions with Banc of America Securities
LLC with respect to senior secured financing of approximately $250 million.
Although we believe this financing will be available to us, we cannot assure
you of that or what the terms of the financing might be.
* HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFERS? (COVER
PAGE, PAGE 17)
You must tender your notes no later than 11:59 p.m., New York City time,
on April 24, 2000, or on a later date if we extend the tender offers.
* IF I TENDER MY NOTES, WILL I BE PAID MY ACCRUED INTEREST? (COVER
PAGE, PAGE 16)
No. Tendering noteholders will receive only the tender offer payment
and the consent payment.
* WHEN MUST I TENDER MY NOTES IN ORDER TO BE ELIGIBLE TO RECEIVE THE
CONSENT PAYMENT? (COVER PAGE, PAGE 17)
We have established consent deadlines which you must meet to be eligible
to receive the consent payment. If you are a TPI debenture holder, you will
be eligible to receive the consent payment if you tender your TPI debentures
no later than 5:00 p.m., New York City time, on April 10, 2000, unless
extended. If you hold LYONs, you must submit a separate consent form to be
eligible to receive the consent payment. We can not send you that consent
form until we receive regulatory clearance, which we expect to receive on or
shortly after April 6, 2000. At that time, we will send the consent form to
the LYONs holders. If you are a LYONs holder, you will be eligible to
receive the consent payment if you deliver your consent form and tender your
LYONs no later than 5:00 p.m., New York City time, on the tenth calendar day
after the date on which we
ii
mail the consent form. We expect to mail the consent form and other
solicitation materials regarding the LYONs on or shortly after April 6, 2000.
We anticipate extending these consent deadlines only if we have not received
the necessary tenders and consents by these deadlines. Any extension of
either of these deadlines will be for a specified time period.
* CAN I TENDER MY NOTES WITHOUT CONSENTING TO THE PROPOSED AMENDMENTS
TO THE INDENTURES? (PAGE 17)
No, if you are a holder of TPI debentures. TPI debenture holders who
tender their TPI debentures in the offer will be considered to have delivered
a corresponding consent.
LYONs holders may tender their LYONs prior to receiving a consent form
without consenting to the proposed amendments. If you do so and you wish to
receive the consent payment, then you must deliver the consent form, after
you receive it, before the applicable consent deadline. You will not receive
a consent payment if you fail to timely return the consent form. LYONs
holders who have not tendered their LYONs prior to being sent a consent form
may not tender their LYONs without delivering the consent form. In that
case, you must deliver your consent form and tender your LYONs before the
consent deadline if you wish to receive the consent payment. If you fail to
do so, you will not receive a consent payment.
* CAN I CONSENT TO THE PROPOSED AMENDMENTS TO THE INDENTURES WITHOUT
TENDERING MY NOTES? (PAGE 17)
No. Holders may not deliver consents without also tendering their notes
in the offer. However, Holders may withdraw tendered notes after the
applicable consent deadline and on or before the date on which the offer
ends.
* WHAT ARE THE SIGNIFICANT CONDITIONS TO THE OFFERS? (PAGE 18)
The tender offers are conditioned on, among other things:
* " at least a majority in aggregate principal amount at
maturity of LYONs and at least a majority in aggregate
principal amount of TPI debentures being validly tendered
and not withdrawn;
* " at least 90% of the aggregate principal amount at maturity
of the LYONs and the TPI debentures, treated as a single
class, being validly tendered and not withdrawn;
* " receipt of valid and unrevoked consents to the proposed
amendments from holders of at least a majority in principal
amount at maturity of the outstanding LYONs and at least a
majority in principal amount of the outstanding TPI
debentures; and
* " our receipt of suitable financing for the tender offers
and the refinancing of substantially all of our other
existing indebtedness.
iii
* CAN THE OFFERS OR CONSENT DEADLINES BE EXTENDED, AND UNDER WHAT
CIRCUMSTANCES? (PAGE 21)
Yes. We have the right to extend the offers or the consent deadlines at
any time by giving written notice to The Bank of New York, the Depositary.
* HOW WILL I BE NOTIFIED IF THE OFFERS ARE EXTENDED? (PAGE 21)
If we extend the tender offers or the consent deadlines, we will
publicly announce the extension no later than 9:00 a.m., New York City time,
on the first business day after the previously scheduled offer expiration
time or the applicable consent deadline, as the case may be.
* HOW DO I TENDER MY NOTES AND DELIVER MY CONSENT? (PAGE 21)
There are three ways for you to tender your notes and deliver your
consent:
* " send or deliver to The Bank of New York the certificates
for your notes, the completed and signed BLUE Letter of
Transmittal for LYONs or YELLOW Letter of Transmittal for
TPI debentures, both of which are included with this
document, and any other required documents. A LYONs holder
wishing to consent also must deliver to The Bank of New York
the separate consent form that we will provide after we
receive regulatory clearance, together with any other
required documents;
* " for notes held in "street" name, tender your notes and
deliver consents by requesting your broker, dealer,
commercial bank, trust company or other nominee to effect
the transaction. This is the only method which may be used
to tender notes and deliver consents with respect to notes
held in "street" name; or
* " tender your notes and deliver consents through The
Depository Trust Company pursuant to its Automated Tender
Offer Program.
* DO I HAVE TO PAY A COMMISSION IF I TENDER MY NOTES? (PAGE 16)
No. No commissions are payable by holders to Banc of America Securities
LLC, the dealer manager, D. F. King & Co., Inc., the information agent or The
Bank of New York, the depositary.
* HOW DO I WITHDRAW TENDERED NOTES? (PAGE 20)
You may withdraw any notes that you tender at any time before the
applicable tender offer ends, as well as at any time after 40 business days
after the date of this document unless we already had accepted the notes. To
do so, you must provide The Bank of New York a proper written or facsimile
notice of withdrawal. You may not rescind a withdrawal of tendered notes.
However, you may retender your notes by following the proper tender
procedures.
iv
* HOW DO I REVOKE MY CONSENT TO THE PROPOSED AMENDMENTS TO THE
INDENTURES? (PAGE 21)
You may revoke your consent at any time before the applicable consent
deadline by properly withdrawing your tendered notes. You may not revoke
your consent after the applicable consent deadline or without withdrawing
your tendered notes. You may not rescind a revocation of a consent.
* WHAT WILL HAPPEN TO NOTES NOT TENDERED IN THE OFFER? (PAGES 3, 28)
Notes not tendered in the offer will remain outstanding. If the
proposed amendments to the indentures are approved and implemented,
substantially all restrictive covenants and certain other provisions of the
indentures will be deleted or amended with respect to any notes that remain
outstanding. In addition, the trading market for any notes not tendered may
be significantly more limited.
* WHAT ARE THE PROPOSED AMENDMENTS TO THE INDENTURES? (PAGES 28, A-1
AND B-1)
The proposed amendments would delete most of the restrictive covenants
currently contained in the indentures, such as requirements to maintain
properties and pay certain taxes and limitations on our ability to make
certain restricted payments and undertake certain investments,
consolidations, mergers and sales and leases of all or substantially all of
our properties and assets.
* CAN I STILL CONVERT MY NOTES INTO SHONEY'S STOCK? (PAGES 25, 26)
Yes, until your right to withdraw has expired. LYONs are convertible
into Shoney's stock at the rate of 29.349 shares per $1,000 in principal
amount at maturity. The TPI debentures are convertible into Shoney's stock
at the rate of 50.508 shares per $1,000 in principal amount. Shoney's stock
currently is listed on the New York Stock Exchange under the symbol "SHN".
As of March 24, 2000, the last reported sales price of the stock was $1.00.
Based on that price, each $1,000 of principal amount at maturity of LYONs
would convert into Shoney's stock with a market value of $29.35 and each
$1,000 of principal amount of TPI debentures would convert into Shoney's
stock with a market value of $50.51.
* WHAT ARE THE MATERIAL FEDERAL INCOME TAX CONSEQUENCES IF I TENDER MY
NOTES? (PAGE 29)
Sales of notes pursuant to the offers generally will be taxable for
United States federal income tax purposes. A holder selling notes in the
offer generally will recognize capital gain or loss equal to the difference
between the amount of cash received, other than amounts received attributable
to accrued interest, which will be taxed as accrued interest, and the
holder's adjusted tax basis in the notes sold at the time of sale. The
adjusted tax basis generally will equal the cost of the notes to the holder,
plus the amount of any original issue discount and market discount previously
taken into income by the holder, less the amount of any amortizable bond
premium previously amortized by the holder with respect to the notes.
v
If, however, the holder purchased notes at a market discount, the tax
treatment will be different than that just described. Subject to a statutory
de minimis exception, notes have market discount if they were purchased at an
amount less than the adjusted issue price or less than the stated redemption
price at maturity. In general, unless the holder has elected to include
market discount in income currently as it accrues, any gain realized by a
holder on the sale of notes having market discount in excess of a de minimis
amount will be treated as ordinary income to the extent of the gain
recognized or the portion of the market discount that has accrued while the
notes were held by the holder, whichever is less.
The proposed amendments should not constitute a "significant
modification" of the notes under applicable Treasury regulations. This means
that a holder who does not tender notes in the offer will not recognize any
gain or loss for U.S. federal income tax purposes upon the adoption of the
proposed amendments to the Indentures. In addition, the holder will have the
same adjusted tax basis and holding period in the notes after the adoption of
the proposed amendments that the holder had in the notes immediately before
the adoption. If alternatively the proposed amendments are treated as a
"significant modification" of the notes, the adoption of the proposed
amendments would result in a "deemed exchange". This means that the notes
would be considered to have been exchanged for different notes. In such
case, it is possible that a non-tendering U.S. holder would recognize gain or
loss on the deemed exchange. See "Certain U.S. Federal Income Tax
Consequences".
* WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER? (PAGE 31)
You may contact D. F. King & Co., Inc., the information agent, at (888)
242-8157 if you have any questions or requests for assistance or for
additional copies of this document, the Letters of Transmittal and Consent or
related documents. You also may contact Banc of America Securities LLC, the
dealer manager, at (704) 388-4813 (collect) or (888) 292-0070 (toll free) or
your broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the terms of the offer and the solicitation of consents
to the proposed amendments to the indenture. The addresses of these
representatives can be found on the back cover of this document.
* IS SHONEY'S MAKING ANY RECOMMENDATION ABOUT THE OFFER? (PAGE 5)
No. We express no opinion and remain neutral with respect to whether
holders should tender notes in response to the tender offers and consent
solicitations. Holders should determine whether or not to accept the tender
offers and consent solicitations based upon their own assessment of current
market value, liquidity needs and investment objectives.
vi
TABLE OF CONTENTS
SUMMARY TERM SHEET ........................................................i
AVAILABLE INFORMATION .....................................................1
INCORPORATION OF INFORMATION BY REFERENCE .................................2
SPECIAL FACTORS ...........................................................3
Adverse Effect of Proposed Amendments on Holders who do not Tender ......3
Proposed Restructuring and Refinancing ..................................3
Reduced Liquidity of the Notes ...........................................3
Operating History; Repayment of Notes Uncertain .........................4
Certain Bankruptcy Considerations .......................................4
Fairness ................................................................5
THE COMPANY ...............................................................6
General .................................................................6
Planned Reorganization ..................................................6
Source and Amount of Funds ..............................................8
FINANCIAL INFORMATION .....................................................9
Unaudited Pro Forma Consolidated Condensed Financial Statements .........9
Financial Ratios .......................................................15
THE TENDER OFFERS AND CONSENT SOLICITATIONS ..............................16
Purpose .................................................................16
Terms ..................................................................16
Conditions .............................................................18
Acceptance for Payment and Payment for the Notes .......................20
Withdrawal and Revocation Rights .......................................20
Extension, Amendment and Termination of Tender Offers and
Consent Deadlines......................................................21
Procedures for Tendering Notes and Delivering Consents .................21
Need for Guarantee of Signature ........................................23
Book-Entry Delivery of the Notes .......................................23
Guaranteed Delivery ....................................................23
Absence of Appraisal Rights ............................................24
DESCRIPTION OF THE NOTES .................................................25
Liquid Yield Option Notes Due 2004 ......................................25
8-1/4% Convertible Subordinated Debentures Due 2002 .....................26
Market and Trading Information ..........................................27
PROPOSED AMENDMENTS TO THE INDENTURES ....................................28
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES .............................29
DEALER MANAGER, DEPOSITARY AND INFORMATION AGENT .........................31
MISCELLANEOUS ............................................................32
ANNEX A .................................................................A-1
ANNEX B ..................................................................B-1
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Exchange
Act and, in accordance therewith, files reports, proxy statements and other
documents and information with the Securities and Exchange Commission (the
"Commission"). The Company also has filed with the Commission an Issuer
Tender Offer Statement on Schedule TO (the "Tender Offer Statement") under
the Exchange Act, which includes certain of the information contained in this
Statement and certain other information relating to the Tender Offers. Such
reports, proxy statements and other documents and information may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the regional offices of the Commission located at 7 World
Trade Center, Suite 1300, New York, New York 10048 and Citicorp Center, Suite
1400, 500 West Madison Street, Chicago, Illinois 60661. Copies of such
material can be obtained from the Public Reference Section of the Commission
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549. The Commission also maintains a Web Site located at
http://www.sec.gov that contains reports, proxy and the aforementioned
statements and other information regarding registrants that have filed
electronically with the Commission, including the Company. The Company's
Shares and LYONs are listed and traded on the New York Stock Exchange and
such reports, proxy statements and other documents and information concerning
the Company are also available for inspection at the offices of the New York
Stock Exchange, 20 Broad Street, New York, New York 10005.
Copies of the Indentures (as defined) pursuant to which the LYONs and the
TPI Debentures were issued also are available from the Company upon request.
Requests for such copies should be directed to the Information Agent or the
Dealer Manager at the addresses and telephone numbers set forth herein.
THE LYONS HOLDERS SHOULD READ THE DEFINITIVE CONSENT SOLICITATION MATERIAL
WHICH WE WILL PROVIDE AFTER THAT MATERIAL RECEIVES REGULATORY CLEARANCE.
THIS MATERIAL, WHICH WE EXPECT TO PROVIDE ON OR SHORTLY AFTER APRIL 6, 2000,
WILL CONTAIN IMPORTANT INFORMATION. THIS MATERIAL, ONCE AVAILABLE, WILL BE
FILED WITH THE COMMISSION AND IT, AS WELL AS ANY OTHER MATERIAL FILED WITH
THE COMMISSION, WILL BE AVAILABLE FOR FREE ON THE COMMISSION'S WEB SITE,
WHICH IS REFERENCED ABOVE.
1
INCORPORATION OF INFORMATION BY REFERENCE
The following documents of the Company have been filed with the
Commission and are incorporated herein by reference:
(i) the Company's Tender Offer Statement on Schedule TO filed
with the Commission on March 27, 2000;
(ii) the Company's Annual Report on Form 10-K for the fiscal year
ended October 31, 1999 filed with the Commission on January
31, 2000; and
(iii) the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended February 20, 2000 filed with the Commission on
March 22, 2000.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date hereof and prior to the
Expiration Date shall be deemed to be incorporated by reference into this
Statement and to be a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Statement to the extent that a statement contained
herein or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Statement. The Company
will provide without charge to each person, including any beneficial owner to
whom this Statement has been delivered, upon written or oral request of such
person, a copy of any and all of the documents referred to above that have
been or may be incorporated by reference herein other than exhibits to such
documents (unless such exhibits are specifically incorporated by reference
herein). Requests for such copies should be directed to Richard D.
Schafstall, Senior Vice President, General Counsel and Secretary, Shoney's,
Inc., 1727 Elm Hill Pike, Nashville, Tennessee 37210; (615) 231-2253.
2
SPECIAL FACTORS
In deciding whether to participate in the Tender Offers and
Solicitation, each Holder should consider carefully, in addition to the other
information contained or incorporated by reference herein, the information
appearing in the Company's Annual Report on Form 10-K for the year ended
October 31, 1999 and in the Quarterly Report on Form 10-Q for the quarter
ended February 20, 2000, under the caption "Risk Factors" in "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
which information is incorporated into this Statement by reference. Each
Holder also should consider the following factors when making a decision
about whether or not to tender Notes pursuant to the Tender Offers.
ADVERSE EFFECT OF PROPOSED AMENDMENTS ON HOLDERS WHO DO NOT TENDER.
Notes not repurchased pursuant to the Tender Offers will remain outstanding.
If the Proposed Amendments become operative, certain of the principal
restrictive covenants contained in the Indentures will be amended or
eliminated. The Indentures, as so amended, will continue to govern the terms
of the Notes that remain outstanding under each Indenture after consummation
of the Tender Offers. The elimination (or, in certain cases, the amendment)
of those restrictive covenants and other provisions would permit the Company,
insofar as the Indentures are concerned, to, among other things, incur
indebtedness, pay dividends or make other restricted payments, incur liens or
make investments that otherwise would not have been permitted under the
Indentures. It is possible that any such actions that the Company would be
permitted to take as a result of the Proposed Amendments effected by the
Supplemental Indentures will adversely affect the interests of non-tendering
Holders. See "Proposed Amendments to the Indentures".
PROPOSED RESTRUCTURING AND REFINANCING. Whether or not the Tender
Offers and Solicitation are consummated, the Company intends to restructure
its operations and refinance substantially all of its existing senior
indebtedness (the "Reorganization"). A major element of the Reorganization
is the separation of the Company's "Shoney's" and "Captain D's" restaurant
operations. Each of these operations would then be separately financed with
new indebtedness, all of which would be senior to the Notes and secured by
all of such operation's assets. The Reorganization also may restrict the
ability of such operations to make cash payments to the Company. See "--
Operating History; Repayment of Notes Uncertain" and "The Company-Planned
Reorganization". The new indebtedness would be used for general corporate
purposes, including working capital and capital expenditures.
REDUCED LIQUIDITY OF THE NOTES. The LYONs currently are listed on the
New York Stock Exchange and the TPI Debentures currently are traded over-the-
counter. Trading in both has been limited. There can be no assurance that
any trading market will exist for either the LYONs or the TPI Debentures
following consummation of the Tender Offers. The extent of the public market
for the Notes following a consummation of the Tender Offers would depend on
the number of Holders that remain at such time, the interest in maintaining
markets in the Notes on the part of securities firms and other factors. An
issue of security with a smaller float may trade at lower prices than would
a comparable issue of securities with a
3
greater float. Accordingly, the market price for Notes that are not tendered
in the Tender Offers may be adversely affected to the extent that the amount
of Notes purchased pursuant to the Tender Offers reduces the float. The
reduced float also may have the effect of causing the trading prices of the
Notes that are not tendered or purchased to be more volatile.
OPERATING HISTORY; REPAYMENT OF NOTES UNCERTAIN. The Company has
experienced significant losses in recent years and, as of February 20, 2000,
had an accumulated deficit of approximately $338 million. Accordingly, there
can be no assurance that the Company will achieve profitability at a level
sufficient to assure repayment of the Notes that remain outstanding following
the Tender Offers. In addition, upon the effectiveness of the Proposed
Amendments, certain covenants will be eliminated which may adversely affect
the market price for the Notes. In addition, the Indentures pursuant to
which the Notes are issued impose no restrictions on the ability of the
Company or its subsidiaries to incur senior indebtedness which would be
expressly or effectively senior to the Notes. The existence of current or
future indebtedness of the Company or its subsidiaries may make repayment of
the Notes upon maturity less probable. As described above, we intend to
restructure our operations, including issuing new indebtedness at the
subsidiary level and refinancing the Company's senior indebtedness. In
addition, substantially all of the assets of the Company currently are
pledged or mortgaged to secure indebtedness of the Company and its
subsidiaries and may be pledged or mortgaged to secure future indebtedness of
the Company and its subsidiaries. All such secured indebtedness is
effectively senior to the Notes. Accordingly, there is no direct access to
assets of the Company or its subsidiaries in the event of a non-payment of
the Notes and there can be no assurance that the Company will have sufficient
cash on hand or available from the liquidation of other assets, or that other
sources of funding will be available, to pay interest on the TPI Debentures
prior to maturity, or principal on either the TPI Debentures or the LYONs at
maturity.
CERTAIN BANKRUPTCY CONSIDERATIONS. Any payments made to Holders in
consideration for their Notes also may be subject to challenge as a
preference if such payments: (a) are made within ninety (90) days of a
bankruptcy filing by the Company (or within one (1) year in the case of
Holders who are determined to be insiders of the Company); (b) are made when
the Company is insolvent; and (c) permit the Holders to receive more than
they otherwise might receive in a liquidation under applicable bankruptcy
laws. If such payments were deemed to be a preference, the full amount of
such payments could be recovered by the Company as a debtor in possession or
by the Company's trustee in bankruptcy, and the Holder would be entitled to
assert claims in respect of the Notes against the Company in its
reorganization or bankruptcy case. The Company does not believe that it is
currently insolvent, will be insolvent after giving effect to the Tender
Offers or will be insolvent within one (1) year, although for purposes of the
preference laws described above, the Company would be presumed insolvent for
the ninety (90) days preceding a bankruptcy or reorganization case.
4
FAIRNESS. The Tender Offers have been unanimously approved by the
Company's Board of Directors. A condition of the Tender Offers is that at
least 51% of the Holders of each of the TPI Debentures and the LYONs consent
to the Proposed Amendments. The Company has not retained and does not intend
to retain any unaffiliated representative to act solely on behalf of the
unaffiliated Holders for purposes of negotiating the terms of the Tender
Offers and/or preparing a report concerning the fairness of the Tender
Offers. The Company has not received any report, opinion or appraisal from
an outside party that is materially related to the Tender Offers.
The Company determined that this was an appropriate time to offer to
purchase the Notes in view of the proposed restructuring of the Company's
operations and the incurrence of significant new senior indebtedness. The
Company is not making a recommendation whether holders should tender Notes.
Holders should determine whether to accept the tender offers based upon their
own assessment of current market value, liquidity needs and investment
objectives. In some cases, the Tender Offer Consideration may be in excess
of recent prevailing market prices. In making the Tender Offers, the factors
considered by the Company were the additional indebtedness that is proposed
to be incurred that would be senior to the Notes, the opportunity to retire
indebtedness at a discount and increase the operational and financial
flexibility of the Company, the operating history of the Company and the
recent prevailing market prices of the Notes. See "-Proposed Restructuring
and Refinancing" and "-Operating History; Repayment of Notes Uncertain."
5
THE COMPANY
GENERAL. As of February 20, 2000, Shoney's, Inc. operated and
franchised a chain of 1,102 restaurants in 28 states, including 641 company-
owned and 461 franchised restaurants. The diversified food service chain
consists of three restaurant divisions: Shoney's Restaurants, Captain D's and
a Casual Dining Group. Shoney's Restaurants are family dining restaurants
offering full table service and a broad menu, and Captain D's are quick-
service restaurants specializing in seafood. The Casual Dining Group
consisted of two restaurant concepts: Fifth Quarter, a steakhouse concept,
and Pargo's, a contemporary casual dining restaurant featuring a wide variety
of fresh, made-from-scratch dishes. Effective March 1, 2000, the Company
sold the assets and operations comprising the Pargo's restaurants for
$10,780,000 plus the assumption by the buyer of certain liabilities. The
Company also owns Commissary Operations, Inc. ("COI") which operates three
distribution centers that support the Company's operations and those of its
franchised restaurants. COI also includes a food processing facility for
ground beef, steaks, and soup products. The Company's fiscal year ends on the
last Sunday in October. Fiscal year 1999 included 53 weeks compared to 52
weeks for fiscal 1998 and 1997.
PLANNED REORGANIZATION. Given the recent operating history of the
Company's restaurants, the Company intends to restructure its operations and
refinance substantially all of its senior indebtedness. A major element of
this restructuring plan is the separation of the Company's "Shoney's" and
"Captain D's" restaurant operations. Each of these operations then would be
separately financed with new senior secured indebtedness. The Tender Offers
and the retirement of the Notes pursuant to the Tender Offers are part of the
Reorganization. However, the Company intends to undertake the
Reorganization, as described below, whether or not the Tender Offers and
Solicitations are consummated.
The following sets forth the existing corporate and operating structure
of the Company, including a description of owned and leased "Shoney's" and
"Captain D's" restaurants:
<TABLE>
<S><C>
[---------------------------------------------]
[ SHONEY'S, INC. ]
-------[ (32 owned Shoney's; 53 leased Shoney's) ]------
| [(15 owned Captain D's; 86 leased Captain D's)] |
| ----------------------------------------------- |
| | |
| | |
- -------------------------- ------------------------ ----------------------
[ TPI RESTAURANTS, INC. ] [ ] [ ]
[ ] [ SHN INVESTMENTS, LLC ] [ COMMISSARY ]
[ (31 leased Shoney's) ] [ ] [ OPERATIONS, INC. ]
[ (31 leased Captain D's ] [ ] [ ]
- ------------------------- ------------------------ ----------------------
| |
| |
- -------------------------- -------------------------
[ TPI PROPERTIES, INC. ] [ SHN PROPERTIES, LLC ]
[ ] [ ]
[ (18 owned Shoney's) ] [ (130 owned Shoney's) ]
[ (25 owned Captain D's ] [(205 owned Captain D's)]
- -------------------------- ------------------------
</TABLE>
6
To accommodate the new financing, the Company, as a part of the
Reorganization, intends to:
* Merge TPI Restaurants, Inc. into Shoney's, Inc.
* Undertake reorganizations at the subsidiary level that will
result in TPI Properties, Inc. (which will be converted to
a limited liability company and renamed "Shoney's
Properties, LLC") owning 146 Shoney's restaurants and SHN
Properties LLC (which will be renamed "D's Properties, LLC")
owning 230 Captain's D's restaurants;
* Create a new Captain D's operating company ("Captain D's,
Inc.") at the level where SHN Investments currently appears;
* Transfer (by lease, license or otherwise) from Shoney's,
Inc. to Captain D's, Inc. the following: 15 owned and 86
leased Captain D's restaurants, all Captain D's equipment,
trademarks, franchises and other general intangibles
comprising the Company's "Captain D's" business; and
* Transfer from TPI Restaurants, Inc. to the new Captain D's,
Inc. 31 leased Captain D's restaurants and related
equipment.
After these steps and changing the names of certain of the subsidiary
corporations, the resulting corporate structure of the Company with respect
to the Company's owned and leased "Shoney's" and "Captain D's" restaurants
would be as follows:
<TABLE>
<S><C>
[--------------------------------------------]
[ SHONEY'S, INC. ]
-------[ (34 owned Shoney's; 84 leased Shoney's) ]-------
| ---------------------------------------------- |
| | |
| | |
| | |
- -------------------------- -------------------------- ----------------------
[SHONEY'S PROPERTIES, LLC] [ CAPTAIN D'S, INC. ] [ ]
[ ] [ ] [ COMMISSARY ]
[ (146 owned Shoney's) ] [ (15 owned Captain D's) ] [ OPERATIONS, INC. ]
[ ] [(117 leased Captain D's)] [ ]
- ------------------------- -------------------------- ----------------------
|
|
-------------------------
[ D'S PROPERTIES, LLC ]
[
[(230 owned Captain D's)]
[ ]
-------------------------
</TABLE>
7
The Reorganization results in the Company's "Shoney's" operations being
within Shoney's, Inc., and Shoney's Properties, LLC ("Shoney's Properties")
and the Company's "Captain D's" operations being within Captain D's, Inc. and
D's Properties, LLC ("D's Properties").
The Company intends to refinance its existing indebtedness and pay the
Tender Offer Consideration with new senior secured financing of approximately
$250 million. The Company expects that this financing would restrict the
ability of its subsidiaries to make payments to Shoney's, Inc. other than for
goods and services that are provided on an arms-length basis. Accordingly,
the creditors of Shoney's (which would include any Notes that remain
outstanding after the Tender Offers) would not have direct access to the
assets of its subsidiaries. In addition, any Notes that remain outstanding
following the Tender Offers will be subordinate to all of this planned senior
secured indebtedness.
SOURCE AND AMOUNT OF FUNDS. The total amount of funds required by the
Company to pay the Tender Offer Consideration (assuming all Notes are
tendered prior to the Applicable Consent Deadline) and refinance
substantially all of its remaining indebtedness is estimated to be
approximately $250 million (the "New Financing"). The Company has retained
Banc of America Securities LLC to assist it with restructuring its balance
sheet and related indebtedness. We currently are engaged in discussions with
Banc of America Securities LLC with respect the proposed New Financing.
Although we have not received any lending commitment, we believe that the New
Financing will be available to us.
No assurance, however, can be given that the New Financing will be
available or received by the Company upon satisfactory terms. Consummation
of the Tender Offers is contingent upon, among other things, the Company
receiving debt financing in an amount necessary to (a) pay the Tender Offer
Consideration; (b) refinance substantially all of the remaining indebtedness
of the Company; and (c) pay fees and expenses associated with the foregoing,
all on terms acceptable to the Company.
To the extent that the proceeds of the New Financing are not used to
retire the LYONs and TPI Debentures, the Company intends to use any such
remaining proceeds for general corporate purposes, including working capital
and capital expenditures.
8
FINANCIAL INFORMATION
Unaudited Pro Forma Consolidated Condensed Financial Statements
(in thousands except principal and accreted amounts)
The following unaudited pro forma consolidated condensed balance sheet
as of February 20, 2000 gives effect to new debt proceeds totaling $250 million
and the application of the estimated proceeds, net of finance charges and
expenses, to the purchase of all outstanding LYONs and TPI Debentures at prices
of $250 per $1000 of Accreted Value (in the case of the LYONs) and $250 per
$1,000 principal amount (in the case of the TPI Debentures), respectively, and
the repayment of existing bank debt as described in Summary Term Sheet of this
Statement, as if all such transactions had been completed as of February 20,
2000.
The following unaudited pro forma consolidated condensed statement of
operations for the year ended October 31, 1999 gives effect to the following
transactions as if all such transactions had been completed as of October 26,
1998 and the following unaudited pro forma consolidated condensed statement of
operations for the sixteen week period ended February 20, 2000, gives effect
to the following transactions as if all such transactions had been completed
as of November 1, 1999:
* the receipt of new debt proceeds totaling $250 million and the
application of the estimated net proceeds thereof to the purchase of
LYONs and TPI Debentures and repayment of existing bank debt as
described in Summary Term Sheet of this Statement.
The pro forma consolidated condensed financial information presented
herein does not purport to represent what the Company's results of operations
or financial position would have been had such transactions in fact occurred
at the beginning of the periods presented or to project results of operations
in any future period. The unaudited pro forma consolidated condensed financial
statements should be read in conjunction with our Consolidated Financial
Statements and related Notes thereto incorporated by reference in this
Statement.
9
SHONEY'S, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
Pro Forma
(in thousands) Historical Pro Forma Historical
2/20/00 Adjustments 2/20/00
----------- ----------- ----------
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 8,856 $ 240,500 (a)
(232,728) (b) $ 16,628
Accounts and notes receivable, net 9,183 9,183
Inventories 46,507 46,507
Prepaid expenses 3,489 3,489
Net current assets held for sale 20,574 20,574
-------- -------- --------
Total current assets 88,609 7,772 96,381
Net Property Plant & Equipment 279,469 279,469
Other assets:
Goodwill, net 19,053 19,053
Deferred charges and other
intangible assets 5,783 9,500 (a)
(5,202) (b) 10,081
Other 4,038 4,038
-------- -------- --------
$ 396,952 $ 12,070 $ 409,022
======== ======== ========
LIABILITIES AND COMMON
STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 28,519 $ 28,519
Other accrued liabilities 61,671 (1,487) (b)
17,024 (b) 77,208
Reserve for litigation
settlements 3,873 3,873
Debt and capital leases
due within one year 29,190 (26,744) (b) 2,446
-------- -------- --------
Total current liabilities 123,253 (11,207) 112,046
Long-term senior debt and capital
lease obligations 186,025 250,000 (a)
(159,172) (b) 276,853
Zero coupon subordinated
convertible debentures 125,684 (125,684) (b) 0
Subordinated convertible debt 49,327 (49,327) (b) 0
Reserve for litigation settlements 136 136
Other liabilities 62,497 62,497
Shareholders' deficit:
Common stock 50,515 50,515
Additional paid-in capital 137,794 137,794
Accumulated deficit (338,279) 107,460 (b) (230,819)
-------- -------- --------
Total shareholders' deficit (149,970) 107,460 (42,510)
-------- -------- --------
$ 396,952 $ 12,070 $ 409,022
======== ======== ========
</TABLE>
See notes to unaudited pro forma consolidated condensed balance sheet.
10
SHONEY'S, INC.
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED CONDENSED BALANCE SHEET
(In thousands, except principal and accreted amounts)
(a) Reflects $240,500 of new debt proceeds, net of debt issuance costs of
$9,500.
(b) Reflects the application of the new debt proceeds for the acquisition
of $125,684 accreted value of subordinated zero coupon debentures, due
2004 for an aggregate price of $250 per $1,000 of accreted value
(inclusive of consent payment for the proposed adjustments to the
related indenture) or $31,421 and the acquisition of 51,563 units of
$1,000 principal amount of TPI subordinated convertible debentures, due
2002 for an aggregate price of $250 per unit (inclusive of consent
payment for the proposed adjustments to the related indenture and
accrued interest of $1,487) or $12,891, the payment of expenses of
$2,500, the application of the new debt proceeds to repay outstanding
balances under the existing bank debt facility of $185,916 and the
write off of unamortized debt issue costs of $5,202. Also reflects
extraordinary gain in shareholders' deficit resulting from the
transactions adjusted for income tax provision of $17,024 related to
the extraordinary gain.
11
SHONEY'S, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED OCTOBER 31, 1999
(In thousands, except per share data)
<TABLE>
<CAPTION>
Pro Forma
Historical Pro Forma Historical
10/31/99 Adjustments 10/31/99
----------- ----------- ----------
<S> <C> <C> <C>
Total Revenues $ 999,373 $ 999,373
Costs and expenses
Cost of sales 872,376 872,376
General and administrative expenses 77,389 77,389
Impairment of long-lived assets 18,424 18,424
Interest expense 42,159 $ (10,449) (a) 31,710
Restructuring expenses 4,486 4,486
Litigation settlement 14,500 14,500
--------- -------- ---------
Total costs and expenses 1,029,334 (10,449) 1,018,885
Loss before income taxes
and extraordinary item (29,961) 10,449 (19,512)
Benefit from income taxes (1,135) 0 (b) (1,135)
--------- -------- ---------
Net loss before extraordinary item $ (28,826) $ 10,449 $ (18,377)
========= ======== =========
Earnings per common share
Basic:
Net loss before
extraordinary item ($0.58) $0.21 ($0.37)
========= ======== =========
Diluted:
Net loss before
extraordinary item ($0.58) $0.21 ($0.37)
========= ======== =========
Weighted average shares outstanding
Basic 49,339,259 49,339,259
Diluted 49,339,259 49,339,259
</TABLE>
See notes to unaudited pro forma consolidated statements of operations.
12
SHONEY'S, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIXTEEN WEEKS ENDED FEBRUARY 20, 2000
(In thousands, except per share data)
<TABLE>
<CAPTION>
Pro Forma
Historical Pro Forma Historical
2/20/00 Adjustments 2/20/00
----------- ----------- ----------
<S> <C> <C> <C>
Total Revenues $ 251,636 $ 251,636
Costs and expenses
Cost of sales 224,862 224,862
General and administrative expenses 18,875 18,875
Interest expense 11,762 $ (3,567) (a) 8,195
-------- -------- ---------
Total costs and expenses 255,499 (3,567) 251,932
Loss before income taxes and
extraordinary item (3,863) 3,567 (296)
Provision for income taxes 112 0 (b) 112
--------- -------- ---------
Net loss before extraordinary item $ (3,975) $ 3,567 $ (408)
========= ======== =========
Earnings per common share
Basic:
Net loss before
extraordinary item ($0.08) $0.07 ($0.01)
========= ======== =========
Diluted:
Net loss before
extraordinary item ($0.08) $0.07 ($0.01)
========= ======== =========
Weighted average shares outstanding
Basic 50,028,705 50,028,705
Diluted 50,028,705 50,028,705
</TABLE>
See notes to unaudited pro forma consolidated statements of operations.
13
SHONEY'S, INC.
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands)
(a) Reflects the inclusion of the interest expense and amortization of
deferred financing costs related to the new debt, assuming a 10.4%
interest rate, and the elimination of interest expense associated with
the subordinated convertible debentures, due 2002 and the subordinated
zero coupon debentures, due 2004 and the repayment of the existing bank
debt facility with the net proceeds of the new debt.
(b) Reflects no income tax provision applied to the adjusted loss before
income taxes due to a decrease in the valuation allowance for deferred
tax assets during the sixteen weeks ended February 20, 2000 and the
year ended October 31, 1999.
Note:The unaudited pro forma consolidated condensed statements of
operations exclude the effects of the extraordinary gain of $107,460
resulting from the purchase of the notes (net of expenses) pursuant to
the tender offers at a substantial discount to their related principal
amount ($128,199), the write-off of unamortized debt issue costs
($5,202), the write-off of accrued interest ($1,487) and the related tax
effects ($17,024).
14
FINANCIAL RATIOS
<TABLE>
<CAPTION>
Year Ended Sixteen Weeks Ended
October 25, October 31, February 16, February 20,
1998 1999 1999 2000
------------------------ ----------------------------
<S> <C> <C> <C> <C>
Ratio of earnings
to fixed charges (1) -- -- -- --
Pro forma
ratio of earnings
to fixed charges (1) -- -- -- --
Book value per
common share $ (2.97)
Pro forma book value
per common share $ (0.84)
(1) The ratio of earnings to fixed charges is calculated by dividing
earnings by fixed charges. For this purpose, "earnings" means income
(loss) before provision (benefit) for income taxes and extraordinary
items plus fixed charges (other than capitalized interest). "Fixed
charges" means total interest whether capitalized or expensed
(including the portion of rent expense representative of interest
costs) on outstanding debt plus (i) debt related fees and (ii)
amortization of deferred financing costs. Earnings were inadequate to
cover fixed charges in the fiscal years ended October 31, 1999 and
October 25, 1998 by $29,961 and $79,492, respectively. Earnings were
inadequate to cover fixed charges for sixteen weeks ended February 20,
2000 and February 16, 1999 by $3,863 and $15,895, respectively. On a
pro forma basis, earnings were inadequate to cover fixed charges for
the fiscal year ended October 31,1999 and the sixteen weeks ended
February 20, 2000 by $19,512 and $296, respectively.
15
THE TENDER OFFERS AND CONSENT SOLICITATIONS
PURPOSE. The purpose of the Tender Offers is to enable the Company to
eliminate or reduce the debt evidenced by the Notes. All of the Notes
purchased by the Company upon the consummation of the Tender Offers will be
retired by the Company. The purpose of the Solicitation is to increase the
Company's financial and operating flexibility by eliminating or reducing the
restrictions contained in the Indentures.
The Tender Offers also may give Holders who are considering the sale of
all or some of their Notes the opportunity to sell their Notes for a higher
price than may have been available on the open market immediately prior to
the announcement of the Tender Offers and without the usual transaction costs
associated with market sales. No commissions are payable to either the
Dealer Manager, the Information Agent or the Depositary by Holders who tender
their Notes in the Tender Offers. There may be adverse consequences to the
Holders of Notes who do not tender them in the Tender Offers. See "Special
Factors-Adverse Effect of Proposed Amendments on Holders Who Do Not Tender".
Under the terms of the Tender Offers, Notes acquired by the Company will
be purchased by the Company at a substantial discount to their stated
principal amount. Accordingly, if the Company acquires all $177,358,000
principal amount at maturity of the LYONs currently outstanding and all
$51,563,000 principal amount of the TPI Debentures currently outstanding, the
Company will recognize an extraordinary gain after giving effect to
unamortized debt issuance costs and transaction costs, of approximately
$107.5 million. Such extraordinary gain represents the excess of the stated
principal or accreted value amount of the Notes over their respective
purchase prices, net of expenses. As of February 20, 2000, the Company had,
for federal income tax purposes, an accumulated net operating loss carry-
forward of approximately $67 million. Transaction costs with respect to the
Tender Offers are expected to be approximately $2.5 million. The total
amount of funds required by the Company to pay the Tender Offer Consideration
and the Consent Payment and to pay fees and expenses relating to the Tender
Offers and Solicitation will be approximately $46.8 million. The Company
expects to obtain such funds from the New Financing. See "The Company-Source
And Amount Of Funds".
TERMS. Upon the terms and subject to the conditions set forth in the
Offers, the Company is offering to purchase any and all outstanding:
TPI Debentures for a cash purchase price of $235.00 per
$1,000 principal amount (the "Debenture Purchase Price");
and
LYONs for a cash purchase price of $235.00 per $1,000 of
Accreted Value as of March 27, 2000 (the "LYONs Purchase
Price").
The Company also is soliciting Consents to approve the adoption of
certain proposed amendments to the Indentures under which the Notes were
issued (the "Proposed
16
Amendments") and is offering to pay $15.00 per $1,000 principal amount at
maturity of any TPI Debenture and $15.00 per $1,000 of the Accreted Value as
of March 27, 2000 of any LYON (each, a "Consent Payment") that is purchased
pursuant to the Tender Offers and for which a Consent is received prior to
the Applicable Consent Deadline upon the terms and subject to the conditions
set forth in the Offer as it may be amended from time to time (the
"Solicitation"). The total LYONs purchase price and consent payment of
$250.00 per $1,000 of accreted value equals $178.62 per $1,000 in principal
amount at maturity. Holders of LYONs must deliver a separate Consent form
which they will receive from the Company following regulatory clearance.
Holders of TPI Debentures who tender their TPI Debentures in the Tender
Offers will be deemed to have delivered a corresponding Consent, and Holders
may not deliver Consents without tendering their Notes in the Tender Offers,
except by a withdrawal of their Notes after the Applicable Consent Deadline.
See "Proposed Amendments To The Indentures".
IN ORDER TO RECEIVE BOTH THE TENDER OFFER CONSIDERATION AND
THE CONSENT PAYMENT FOR ANY NOTES TENDERED,
HOLDERS MUST TENDER SUCH NOTES AND DELIVER CONSENTS
ON OR PRIOR TO THE APPLICABLE CONSENT DEADLINE.
The time by which Holders of TPI Debentures must tender Notes in order
to be eligible to receive the Consent Payment will be 5:00 p.m., New York
City time, on April 10, 2000, unless extended (such time and date, as the
same may be extended, the "TPI Consent Deadline"). The Company must receive
regulatory clearance prior to furnishing holders of LYONs with a form by
which they can Consent to the Proposed Amendments. The Company expects to
receive regulatory clearance on or shortly after April 6, 2000. At that
time, a Consent form will be furnished to LYONs Holders. In order for a
LYONs Holder to be eligible to receive a Consent Payment, the LYONs Holder
must deliver a Consent and tender the Holder's Notes no later than 5:00 p.m.,
New York City time, on the tenth calendar day following the date on which
regulatory clearance is received, unless extended (the "LYONs Consent
Deadline"). We expect the LYONs Consent Deadline to be April 16, 2000,
unless extended.
The Company anticipates that it will extend the initial Consent
Deadlines if, and only if, it has not received tenders and consents from
Holders of at least a majority of the outstanding principal amount at
maturity of each of the TPI Debentures and the LYONs by the initial Consent
Deadlines. The Company reserves the right to extend either Applicable Consent
Deadline without extending the other. Any such extension will be for a
specified time period and will be announced in a press release. Holders who
tender Notes after the Applicable Consent Deadline will not receive the
Consent Payment.
The time by which Holders must tender Notes in order to be eligible to
have their Notes purchased pursuant to the Tender Offers will be 11:59 p.m.,
New York City time, on April 24, 2000, unless extended (such time and date,
as the same may be extended, the
17
"Expiration Date"). Any such extension will be announced in a press release.
See "-Extension, Amendment and Termination of Tender Offers and Consent
Deadlines".
The Tender Offers are conditioned upon, among other things, receipt by
the Depositary of valid and unrevoked Consents from Holders (the "Consent
Condition") of at least (a) $88,680,000 principal amount at maturity of the
outstanding LYONs and (b) $25,782,000 principal amount of the outstanding TPI
Debentures. See "-Conditions". As of March 24, 2000, $177,358,000 of
aggregate principal amount at maturity of the LYONs (with an accreted value
on such date of $126,629,558) and $51,563,000 of aggregate principal amount
of TPI Debentures are outstanding for purposes of determining whether the
Consent Condition has been satisfied.
Notes purchased pursuant to the Tender Offers will be paid for in same-
day funds on the Payment Date, which will be the second business day after
the date on which the Tender Offers expire, or as soon as practicable
thereafter. See "-Acceptance for Payment and Payment for the Notes".
Under United States federal tax laws, the Depositary may be required to
withhold 31% of the amount of any payments made to certain Holders pursuant
to the Tender Offers. See "Certain U.S. Federal Income Tax Consequences".
CONDITIONS. The Tender Offers and Solicitation and the payment of the
Tender Offer Consideration and Consent Payments are conditioned upon each of
the following:
(1) satisfaction of the Consent Condition;
(2) at least a majority in aggregate principal amount at maturity of
LYONs and at least a majority in principal amount of TPI Debentures being
validly tendered and not withdrawn;
(3) at least 90% of the combined aggregate principal amount of the
Notes being validly tendered and not withdrawn;
(4) execution by the trustee under each of the Indentures (the
"Trustee") of the Supplemental Indentures implementing the Proposed
Amendments;
(5) receipt by the Company of debt financing sufficient to (a) pay the
Tender Offer Consideration and Consent Payments; (b) refinance substantially
all of the remaining indebtedness of the Company; and (c) pay fees and
expenses associated with the foregoing, all on terms acceptable to the
Company (or the Company being satisfied that such financing will be received
substantially concurrently with the Expiration Date (the "Funding
Condition"));
(6) no statute, rule, regulation, judgment, order, stay, decree or
injunction shall have been threatened, proposed, sought, promulgated,
enacted, entered, enforced, or deemed
18
to be applicable by any court or governmental regulatory or administrative
agency, authority or tribunal, domestic or foreign, which, in the sole
judgment of the Company, would or might directly or indirectly prohibit,
prevent, restrict or delay consummation of the Tender Offers or Solicitation
or that could have a material adverse effect upon the Company;
(7) there shall not have occurred (a) any general suspension of,
shortening of hours for or limitation on prices for trading in securities on
the New York Stock Exchange or in the over-the-counter market (whether or not
mandatory); (b) any significant adverse change in the price of the LYONs or
the TPI Debentures or in the United States' securities or financial markets;
(c) a significant impairment in the trading market for debt securities; (d)
a declaration of a banking moratorium or any suspension of payments in
respect of banks by federal or state authorities in the United States
(whether or not mandatory); (e) a commencement of a war, armed hostilities or
other national or international crisis; (f) any limitation (whether or not
mandatory) by any governmental authority on, or other event having a
reasonable likelihood of affecting, the extension of credit by banks or other
lending institutions in the United States; (g) any significant change in
United States currency exchange rate or a suspension of, or limitation on,
the markets therefor (whether or not mandatory); or (h) in the case of any of
the foregoing existing at the time of the commencement of the Tender Offers,
a significant acceleration or worsening thereof;
(8) the Trustee under the Indentures shall not have objected in any
respect to, or taken any action that could, in the sole judgment of the
Company, adversely affect the consummation of the Tender Offers or the
Solicitation or the Company's ability to effect any of the Proposed
Amendments, or shall have taken any action that challenges the validity or
effectiveness of the procedures used by the Company in soliciting the
Consents to the Proposed Amendments (including the form thereof) or in the
making of the Tender Offers or the Solicitation or the acceptance of or
payment for any of the LYONs, the TPI Debentures or any of the Consents; and
(9) there shall not have occurred or be likely to occur any event or
series of events that, in the sole judgment of the Company, would or might
prohibit, prevent, restrict or delay consummation of the Tender Offers and
Solicitation or that will, or is reasonably likely to, impair the
contemplated benefits to the Company of the Tender Offers and Solicitation,
or otherwise result in the consummation of the Tender Offers and Solicitation
not being or not being reasonably likely to be in the best interest of the
Company.
The foregoing conditions are for the sole benefit of the Company and may
be asserted by the Company regardless of the circumstances (including any
action or inaction by the Company) giving rise to such condition or may be
waived by the Company in whole or in part at any time and from time to time
in its sole discretion. If any condition to the Tender Offers and
Solicitation is not satisfied or waived by the Company prior to the
Expiration Date, the Company reserves the right (but shall not be obligated),
subject to applicable law, (i) to terminate the Tender Offers and
Solicitation and return the tendered Notes to the tendering Holders; (ii) to
waive all unsatisfied conditions and accept for payment and purchase all
Notes that are validly tendered (and not withdrawn) prior to the Expiration
Date; (iii) to extend such
19
Tender Offers and retain the Notes that have been tendered during the period
for which the Tender Offers and, if applicable, Solicitation are extended; or
(iv) to amend the Tender Offers and Solicitation. The failure by the
Company at any time to exercise any of the foregoing rights will not be
deemed a waiver of or otherwise affect any other rights and each such right
will be deemed an ongoing right which may be asserted at any time and from
time to time. Any determination by the Company concerning the events
described above will be final and binding upon all parties.
ACCEPTANCE FOR PAYMENT AND PAYMENT FOR THE NOTES. Upon the terms and
subject to the conditions of the Tender Offers, the Company will accept for
payment all Notes that are validly tendered pursuant to the Tender Offers
prior to the Expiration Date and not validly withdrawn. For purposes of the
Tender Offers, the Company will be deemed to have accepted for payment
tendered Notes if, as and when the Company gives oral or written notice to
the Depositary of its acceptance for payment of such Notes. Payment for Notes
accepted for payment pursuant to the Tender Offers will be made by deposit of
funds with the Depositary, which will act as agent for the tendering Holders
for the purpose of receiving payments from the Company and transmitting such
payments to the tendering Holders. Notes purchased pursuant to the Tender
Offers and payments for valid Consents not withdrawn will be paid for in
same-day funds on the second business day after the Expiration Date, or as
soon as practicable thereafter.
WITHDRAWAL AND REVOCATION RIGHTS. Tenders of Notes may be withdrawn at
any time prior to the Expiration Date and, unless accepted by the Company,
any time after 40 business days after the date hereof. A valid withdrawal of
tendered Notes will constitute the concurrent valid revocation of such
Holder's related Consent, once given. If the Tender Offers are terminated
without any Notes being purchased thereunder, the Notes tendered pursuant to
the Tender Offers will be promptly returned to the tendering Holder.
For a withdrawal of Notes to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the Depositary
at its address set forth on the back cover of this Statement. The withdrawal
notice must specify the name of the person who tendered the Notes to be
withdrawn; must contain a description of the Notes to be withdrawn, the
certificate numbers shown on the particular certificates evidencing such
Notes and the aggregate principal amount represented by such Notes; and must
be signed by the Holder of such Notes in the same manner as the original
signature on the Letter of Transmittal (including any required signature
guarantees) or be accompanied by evidence satisfactory to the Company that
the person withdrawing the tender has succeeded to the beneficial ownership
of the Notes. In addition, the notice of withdrawal must specify, in the case
of Notes tendered by delivery of certificates for such Notes, the name of the
registered Holder (if different from that of the tendering Holder) or, in the
case of Notes tendered by book-entry transfer, the name and number of the
account at DTC to be credited with the withdrawn Notes. The signature on the
notice of withdrawal must be guaranteed by an Eligible Institution (as
defined herein) unless such Notes have been tendered for the account of an
Eligible Institution (as defined herein). If certificates for the Notes to be
withdrawn have been delivered or otherwise identified to the
20
Depositary, a signed notice of withdrawal will be effective immediately upon
receipt by the Depositary of written or facsimile transmission notice of
withdrawal even if physical release is not yet effected.
Withdrawal of tenders of Notes may not be rescinded, and any Notes
properly withdrawn will thereafter be deemed not validly tendered for
purposes of the Tender Offers. Properly withdrawn Notes may, however, be
retendered by again following one of the procedures described in "-Procedures
For Tendering Notes And Delivering Consents" below at any time prior to the
Expiration Date.
Consents may be withdrawn at any time prior to the Applicable Consent
Deadline. To withdraw a Consent, a Holder must withdraw the corresponding
tendered Notes in the manner set forth above. Consents may not be withdrawn
without a withdrawal of the corresponding tendered Notes. A withdrawal of a
Consent may not be rescinded.
Withdrawals of Notes and revocation of Consents can only be accomplished
in accordance with the foregoing procedures.
EXTENSION, AMENDMENT AND TERMINATION OF TENDER OFFERS AND CONSENT
DEADLINES. The Company expressly reserves the right, at any time or from
time to time, regardless of whether or not the conditions set forth in "-
Conditions" shall have been satisfied, subject to applicable law, (i) to
extend either Applicable Consent Deadline (either alone or together) and/or
the Expiration Date for the Tender Offers; (ii) to amend the Tender Offers
and Solicitation in any respect; or (iii) to terminate the Tender Offers and
Solicitation prior to the Expiration Date and return the Notes tendered
pursuant thereto, in each case by giving written notice of such extension,
amendment or termination to the Depositary. Any extension, amendment or
termination will be followed as promptly as practicable by public
announcement thereof, with the announcement in the case of an extension to be
issued no later than 9 a.m., New York City time, on the first business day
after the previously scheduled Consent Deadlines or Expiration Date, as the
case may be. Without limiting the manner in which the Company may choose to
make any public announcement, the Company shall have no obligation to
publish, advertise or otherwise communicate any such public announcement
other than by issuing a release to the Dow Jones News Service.
The Company, in its sole discretion, shall decide whether to exercise
its right to extend the Consent Deadlines or Expiration Date for the Tender
Offers. Tendered Notes may be withdrawn at any time on or prior to the
Expiration Date and, unless accepted for payment, at any time after 40
business days following the date hereof See "-Withdrawal and Revocation
Rights".
PROCEDURES FOR TENDERING NOTES AND DELIVERING CONSENTS. For a Holder to
validly tender Notes pursuant to the Tender Offers, a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantee, or (in the case of a book-entry transfer for which
acceptance is being electronically transmitted through the
21
Automatic Tender Offer Program ("ATOP")) an Agent's Message in lieu of the
Letter of Transmittal, and any other required documents, must be received by
the Depositary at its address set forth on the back cover of this Statement
prior to the Expiration Date (or, for Holders desiring to receive the Consent
Payment, prior to the Consent Deadlines). For Holders of the TPI Debentures,
the tender of their Notes will be deemed to be their delivery of Consents
with respect to such Notes. In addition, prior to the Expiration Date, either
(a) certificates for tendered Notes must be received by the Depositary at
such address or (b) such Notes must be transferred pursuant to the procedures
for book-entry transfer described below (and a confirmation of such tender
must be received by the Depositary, including an Agent's Message if the
tendering Holder has not delivered a Letter of Transmittal and Consent). In
order for LYONs Holders to Consent and receive the Consent Payment, such
Holders must send the Consent form (or facsimile thereof) that they will
receive following regulatory clearance duly executed, with any required
signature guarantee, and any other required documents, to the Depositary at
the address set forth on the back cover of this Statement for receipt by the
Depositary prior to the LYONs Consent Deadline. The term "Agent's Message"
means a message, transmitted by DTC to and received by the Depositary and
forming a part of a book-entry confirmation, which states that DTC has
received an express acknowledgment from the tendering participant, which
acknowledgment states that such participant has received and agrees to be
bound by the Letter of Transmittal (and in the case of the LYONs, the
separate Consent) and that the Company may enforce such Letter of Transmittal
(and in the case of the LYONs, the separate Consent) against such
participant.
If the Notes are held of record in the name of a person other than the
signer of the Letter of Transmittal, or if certificates for unpurchased Notes
are to be issued to a person other than the registered Holder, the
certificates must be endorsed or accompanied by appropriate bond powers, in
either case signed exactly as the name of the registered Holder appears on
the certificates, with the signature on the certificates or bond powers
guaranteed as described below.
The tender of Notes pursuant to the Tender Offers by one of the
procedures set forth above will constitute (a) an agreement between the
tendering Holder and the Company in accordance with the terms and subject to
the conditions of the Tender Offers and (b) in the case of the TPI
Debentures, the Consent of the tendering Holder to the Proposed Amendments.
The delivery of Consents by Holders of LYONs pursuant to the Solicitation in
accordance with one of the procedures set forth above will constitute the
Consent of the delivering Holder to the Proposed Amendments.
The method of delivery of the applicable Letter of Transmittal,
certificates for Notes and all other required documents is at the election
and risk of the tendering Holder. If a Holder chooses to deliver by mail, the
recommended method is by registered mail with return receipt requested,
properly insured. In all cases, sufficient time should be allowed to ensure
timely delivery.
All questions as to the form of documents and validity, eligibility
(including time of receipt), acceptance for payment and withdrawal of
tendered Notes or Consents will be
22
determined by the Company, in its sole discretion, and its determination will
be final and binding. The Company reserves the absolute right to reject any
and all tenders of Notes or deliveries of Consents that it determines are not
in proper form or the acceptance for payment of or payment for which may, in
the opinion of its counsel, be unlawful. The Company also reserves the
absolute right in its sole discretion to waive any of the conditions of the
Tender Offers or Solicitation or any defect or irregularity in the tender of
Notes or deliveries of Consents of any particular Holder, whether or not
similar conditions, defects or irregularities are waived in the case of other
Holders. The Company's interpretation of the terms and conditions of the
Tender Offers and Solicitation (including the instructions in the Letters of
Transmittal) will be final and binding. None of the Company, the Depositary,
the Dealer Manager, the Information Agent, the Trustee or any other person
will be under any duty to give notification of any defects or irregularities
in tenders or any notices of withdrawal or will incur any liability for
failure to give any such notification.
NEED FOR GUARANTEE OF SIGNATURE. Signatures on a Letter of Transmittal
and Consent must be guaranteed by a recognized participant (a "Medallion
Signature Guarantor") in the Securities Transfer Agents Medallion Program,
unless the Notes tendered thereby are tendered (or, in the case of the
separate LYONs Consent, are delivered) (a) by the registered Holder of such
Notes and that Holder has not completed either of the boxes entitled "Special
Issuance/Delivery Instructions" on the Letter of Transmittal or (b) for the
account of a firm that is a member of a registered national securities
exchange or the National Association of Securities Dealers, Inc. or is a
commercial bank or trust company having an office in the United States (each,
an "Eligible Institution").
BOOK-ENTRY DELIVERY OF THE NOTES. Within two business days after the
date of this Statement, the Depositary will establish an account with respect
to the Notes at DTC for purposes of the Tender Offers. Any financial
institution that is a participant in the DTC system may make book-entry
delivery of Notes by causing DTC to transfer such Notes into the Depositary's
account in accordance with DTC's procedure for such transfer. Although
delivery of Notes may be effected through book-entry at DTC, the Letter of
Transmittal (or facsimile thereof), with any required signature guarantees,
or (in the case of a book-entry transfer) an Agent's Message in lieu of the
Letter of Transmittal, and any other required documents, must be transmitted
to and received by the Depositary prior to the Expiration Date (or, for
Holders desiring to receive the Consent Payment, at or prior to the Consent
Deadline) at its address set forth on the back cover of this Statement.
Delivery of such documents to DTC does not constitute delivery to the
Depositary.
GUARANTEED DELIVERY. If a Holder desires to tender Notes pursuant to
the Tender Offers after the Applicable Consent Deadline and such Holder's
certificates are not immediately available or time will not permit all
required documents to reach the Depositary on or prior to the Expiration
Date, or such Holder cannot complete the procedures for book-entry transfer
on a timely basis, such Notes may nevertheless be tendered provided that all
of the following conditions are satisfied:
23
(a) The tender is made by or through an Eligible Institution;
(b) On or prior to the Expiration Date, the Depositary receives from
such Eligible Institution at the address for the Depositary set forth on the
back cover of this Statement, a properly completed and duly executed Notice
of Guaranteed Delivery and Consent (by mail, hand delivery or facsimile).
Such Notice of Guaranteed Delivery and Consent shall (i) be substantially in
the form made available by the Company; (ii) set forth the name and address
of the Holder; (iii) describe the Notes and the principal amount of the Notes
tendered, (iv) state that the tender is being made thereby and (v) guarantee
that, within three New York Stock Exchange trading days after the date of
execution of such Notice of Guaranteed Delivery and Consent, a duly executed
Letter of Transmittal (or a manually signed facsimile thereof) with any
required signature guarantees or an Agent's Message in lieu of the Letter of
Transmittal together with the certificates representing such Notes (or
appropriate book-entry confirmation) and any other documents required by the
Letter of Transmittal and the instructions thereto will be deposited by the
Eligible Institution with the Depositary; and
(c) The certificates for the tendered Notes in proper form for
transfer (or confirmation of book-entry transfer into the Depositary's
account at DTC), together with a properly completed and duly executed Letter
of Transmittal (or a manually signed facsimile thereof) with any required
signature guarantees, or confirmation of a book-entry transfer of such Notes
into the Depositary's account with DTC as described above, including an
Agent's Message in connection therewith, and all other documents required by
the Letter of Transmittal and the instructions thereto, are received by the
Depositary within three New York Stock Exchange trading days after the
execution of such Notice of Guaranteed Delivery and Consent.
This procedure may be used only after the expiration of the Applicable
Consent Deadline. In all cases, payment for Notes tendered and accepted for
payment pursuant to the Tender Offers will be made only after timely receipt
by the Depositary of certificates for such Notes or confirmation of book-
entry transfer into the Depositary's account at DTC, a properly completed and
duly executed Letter of Transmittal (or manually signed facsimile thereof)
with any required signature guarantees, or Agent's Message and any other
documents required by the Letter of Transmittal.
ABSENCE OF APPRAISAL RIGHTS. Holders of the Notes do not have any
appraisal or dissenters' rights under the Tennessee Business Corporation Act
or the Indentures in connection with the Tender Offers. The Company intends
to conduct the Tender Offers in accordance with applicable law.
24
DESCRIPTION OF THE NOTES
LIQUID YIELD OPTION NOTES DUE 2004. The following summary of certain
terms of the LYONs does not purport to be complete and is qualified in its
entirety by reference to the LYONs certificates.
Note $177,358,000 outstanding aggregate principal amount
at maturity of Liquid Yield Option Notes Due 2004
(Zero Coupon - Subordinated)
Issuer Shoney's, Inc.
Interest Zero coupon (accretion rate of 8.50% per annum).
Maturity April 11, 2004
Conversion Convertible at the Holder's option into Shares at
anytime prior to the close of business on the final
maturity date of the LYONs, unless previously
redeemed or repurchased, at a conversion rate of
29.349 Shares per $1,000 principal amount at
maturity of LYONs (equivalent to a conversion price
of $34.07 in principal amount per Share).
Optional Redemption The LYONs are redeemable on at least 32 days' nor
more than 60 days' notice at the option of the
Company, in whole or in part, at anytime at the
redemption prices set forth in the LYONs.
Repurchase at Option
of Holders Upon a
Change of Control None.
Ranking The LYONs are subordinate to all existing and
future Senior Indebtedness (as defined in the LYONs
Indenture) of the Company. As of February 20,
2000, the Senior Indebtedness (as defined in the
LYONs Indenture) of the Company was approximately
$215.2 million. The LYONs Indenture contains no
limitations on the incurrence of additional Senior
Indebtedness or other indebtedness by the Company
or any of its subsidiaries.
25
8-1/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2002. The following
summary of certain terms of the TPI Debentures does not purport to be
complete and is qualified in its entirety by reference to the TPI Debentures.
Notes $51,563,000 outstanding aggregate principal amount
of 8-1/4% Convertible Subordinated Debentures Due
2002.
Issuer Shoney's, Inc. (assumed from TPI Enterprises, Inc.)
Guarantor TPI Restaurants, Inc. (which is intended to be
merged into Shoney's, Inc, the issuer)
Interest Payable semi-annually on January 15 and July 15 of
each year at a rate of 8-1/4% per annum.
Maturity July 15, 2002
Conversion Convertible at the Holder's option into Shares at
anytime prior to the close of business on the final
maturity date of the TPI Debentures, unless
previously redeemed or repurchased, at an adjusted
conversion rate of 50.508 Shares per $1,000
principal amount of TPI Debentures (equivalent to a
conversion price of $19.80 principal amount per
Share).
Optional Redemption The TPI Debentures are redeemable on at least 30
days' nor more than 60 days' notice at the option
of the Company, in whole or in part, at anytime at
the redemption prices set forth in the TPI
Indenture.
Repurchase Upon a
Change of Control In the event a Change of Control (as defined in the
TPI Indenture) occurs, each Holder of a TPI
Debenture may require that the Company repurchase
all or a portion of such debenture for cash at a
repurchase price of 100% of the principal amount of
the TPI Debentures to be repurchased plus accrued
and unpaid interest to the repurchase date, as
provided in the TPI Indenture.
Ranking The TPI Debentures are subordinate to all existing
and future Senior Indebtedness (as defined in the
TPI Indenture) of the Company and the Guarantor.
As of February 20, 2000, the Senior Indebtedness
(as defined in the TPI Indenture) of the Company
and Guarantor was approximately $340.9 million. The
Indenture contains no limitations on the incurrence
of additional
26
Senior Indebtedness or other indebtedness by the
Company, Guarantor or any of their respective
subsidiaries. The Company believes that the TPI
Debentures are subordinate to the LYONs.
MARKET AND TRADING INFORMATION. The LYONs currently are listed and
traded on the New York Stock Exchange. The TPI Debentures currently are
traded over-the-counter. There is not an established reporting system or
trading market for trading in the TPI Debentures. Accordingly, Banc of
America Securities LLC has advised the Company that there is no practical way
to determine the trading history of the TPI Debentures. However, the Company
believes that trading in the LYONs and TPI Debentures has been limited and
sporadic. Although the Company expects any untendered Notes to continue to
be traded after the consummation of the Tender Offers, to the extent that the
Notes are traded, the prices of Notes may fluctuate depending on the trading
volume and the balance between buy and sell orders. The Company believes
that the trading market for the Notes that remain outstanding after the
Tender Offers will be very limited. See "Special Factors-Reduced Liquidity
of the Notes".
The Shares into which the Notes are convertible currently are traded on
the New York Stock Exchange under the symbol "SHN". On March 24, 2000, the
last reported sales price of the Shares on the New York Stock Exchange was
$1.00.
The following table sets forth certain information relating to the
trading history of the LYONs and the Shares during the last two fiscal years
and for the sixteen week period ended February 20, 2000. YOU ARE URGED TO
OBTAIN A CURRENT QUOTATION.
</TABLE>
<TABLE>
<CAPTION>
SHARES LYONs (1)
----------------------------------------
High Low High Low
---- --- ---- ---
<S> <C> <C> <C> <C>
2000
First Quarter $1.56 $1.00 22.500 12.000
1999
First Quarter $3.63 $1.31 34.500 22.000
Second Quarter $2.94 $1.81 25.000 21.000
Third Quarter $2.50 $2.00 28.000 22.125
Fourth Quarter $2.50 $1.44 23.875 19.000
1998
First Quarter $5.00 $3.00 44.500 40.000
Second Quarter $5.88 $3.63 48.000 39.500
Third Quarter $5.06 $2.75 48.250 42.000
Fourth Quarter $3.44 $1.50 44.125 23.500
</TABLE>
- ------------------------
[FN]
(1) Source - Bloomberg: NYSE Quotes. Prices represent percentage of
principal amount at maturity.
</FN>
27
The Company and its affiliates, including its executive officers and
directors, will be prohibited under applicable federal securities law from
repurchasing additional Notes outside of the Tender Offers until at least the
10th business day after the Expiration Date. Following such time, if any
Notes remain outstanding, the Company may purchase additional Notes in the
open market, in private transactions, through a subsequent tender offer, or
otherwise, any of which may be consummated at purchase prices higher or lower
than that offered in the Tender Offers described in this Statement. The
decision to repurchase additional Notes, if any, will depend upon many
factors, including the market price of the Notes, the results of the Tender
Offers, the business and financial position of the Company, and general
economic and market conditions. Any such repurchase may be on the same terms
or on terms more or less favorable to Holders than the terms of the Tender
Offers as described in this Statement.
PROPOSED AMENDMENTS TO THE INDENTURES
GENERAL. The LYONs are issued pursuant to an indenture dated April 1,
1989 by and between the Company and The Bank of New York, successor to Sovran
Bank/Central South, as trustee (the "LYONs Indenture"). The TPI Debentures
are issued pursuant to an indenture dated as of July 15, 1992, as amended by
a First Supplemental Indenture dated as of September 9, 1996 (as amended, the
"TPI Indenture"), between and among the Company, TPI and The Bank of New
York, as trustee. The LYONs Indenture and TPI Indenture are referred to
collectively in this Statement as the "Indentures".
The Proposed Amendments would be set forth in supplemental indentures to
each of the Indentures (the "Supplemental Indentures"). The Supplemental
Indentures would be executed promptly following satisfaction of the Consent
Condition; however, the Supplemental Indentures will provide that the
Proposed Amendments will not become operative unless and until validly
tendered Notes are purchased pursuant to the Tender Offers. The execution and
delivery of the applicable Letter of Transmittal and Consent by a Holder
tendering Notes (or separate Consent in the case of a LYONs Holder) will
constitute the Consent of such Holder to the Proposed Amendments. Holders
who tender their TPI Debentures will be deemed to deliver a corresponding
Consent to the Proposed Amendments. Such Holders may not deliver a separate
Consent. Holders of LYONs must deliver a separate Consent form which the
Company will provide following regulatory clearance.
If Notes are not purchased pursuant to the Tender Offers (or if the
Consent Condition is not satisfied), the Proposed Amendments will not become
operative.
If the Tender Offers are consummated and the Proposed Amendments become
effective, the Proposed Amendments will be binding on all non-tendering
Holders. The modification or elimination of restrictive covenants and other
provisions pursuant to the Proposed Amendments may be adverse to the
interests of non-tendering Holders. See "Special Factors-Adverse Effect of
Proposed Amendments on Holders Who Do Not Tender".
28
PROPOSED AMENDMENTS. The full text of the proposed substantive
amendments to the LYONs Indenture and the TPI Indenture are set forth,
respectively, in Annex A and Annex B hereto. The Supplemental Indentures
will contain other modifications to certain other sections of the Indentures
to conform those sections to the proposed amendments set forth in Annex A and
Annex B. Copies of the proposed Supplemental Indentures may be obtained from
the Information Agent.
CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
THE FOLLOWING SUMMARY IS A GENERAL DISCUSSION OF CERTAIN UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES APPLICABLE UNDER CURRENT LAW TO THE SALE OF
NOTES PURSUANT TO THE TENDER OFFERS BY A "U.S. HOLDER" (WHICH, FOR PURPOSES
OF THE OFFER, MEANS A HOLDER OF NOTES THAT IS (A) AN INDIVIDUAL CITIZEN OR
RESIDENT OF THE UNITED STATES, (B) A CORPORATION ORGANIZED IN OR UNDER THE
LAWS OF THE UNITED STATES OR ANY POLITICAL SUBDIVISION THEREOF OR (C)
OTHERWISE SUBJECT TO UNITED STATES FEDERAL INCOME TAX ON A NET INCOME BASIS
IN RESPECT OF THE NOTES). THE DISCUSSION DOES NOT DEAL WITH SPECIAL CLASSES
OF HOLDERS, SUCH AS DEALERS IN SECURITIES OR CURRENCIES, TRADERS IN
SECURITIES ELECTING TO MARK-TO-MARKET, BANKS, FINANCIAL INSTITUTIONS,
INSURANCE COMPANIES, TAX-EXEMPT ORGANIZATIONS, HOLDERS THAT ARE NOT U.S.
HOLDERS, PERSONS HOLDING NOTES AS A POSITION IN A "STRADDLE" OR CONVERSION
TRANSACTION, OR AS PART OF A "SYNTHETIC SECURITY" OR OTHER INTEGRATED
FINANCIAL TRANSACTION OR PERSONS THAT HAVE A FUNCTIONAL CURRENCY OTHER THAN
THE U.S. DOLLAR. IN ADDITION, THE DISCUSSION DOES NOT DESCRIBE ANY TAX
CONSEQUENCES ARISING OUT OF THE LAWS OF ANY STATE OR LOCAL OR FOREIGN
JURISDICTION. THIS DISCUSSION ASSUMES THAT THE NOTES ARE HELD AS "CAPITAL
ASSETS" WITHIN THE MEANING OF SECTION 1221 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED. THE COMPANY HAS NOT SOUGHT ANY RULING FROM THE INTERNAL
REVENUE SERVICE (THE "IRS") WITH RESPECT TO THE STATEMENTS MADE AND THE
CONCLUSIONS REACHED IN THIS DISCUSSION, AND THERE CAN BE NO ASSURANCE THAT
THE IRS WILL AGREE WITH SUCH STATEMENTS AND CONCLUSIONS.
Sales of Notes pursuant to the Tender Offers by U.S. Holders will be
taxable transactions for United States federal income tax purposes. Subject
to the discussion of the market discount rules set forth below, a U.S. Holder
selling Notes pursuant to the Tender Offers will recognize capital gain or
loss in an amount equal to the difference between the amount of cash received
(other than amounts received attributable to accrued interest, which will be
taxed as such) and the U.S. Holder's adjusted tax basis in the Notes sold at
the time of sale. A U.S. Holder's adjusted tax basis in Notes generally will
equal the cost of the Notes to such U.S. Holder, increased by the amount of
any original issue discount and market discount previously taken into income
by the U.S. Holder, and reduced by the amount of any amortizable bond premium
previously amortized by the U.S. Holder with respect to the Notes. Capital
gain of a non-corporate U.S. Holder is generally subject to a maximum tax rate
of 20 percent in respect of property held for more than one year. The
deductibility of capital losses is limited.
29
An exception to the capital gain treatment described above may apply to
a U.S. Holder who purchased Notes at a "market discount." Subject to a
statutory de minimis exception, Notes have market discount if they were
purchased at an amount less than the adjusted issue price, in the case of the
LYONs, or less than the stated redemption price at maturity, in the case of the
TPI Debentures. In general, unless the U.S. Holder has elected to include
market discount in income currently as it accrues, any gain realized by a U.S.
Holder on the sale of Notes having market discount in excess of a de minimis
amount will be treated as ordinary income to the extent of the lesser of (i)
the gain recognized or (ii) the portion of the market discount that has
accrued (on a straight-line basis or, at the election of the U.S. Holder, on
a constant yield basis) while such Notes were held by the U.S. Holder.
In the case of a U.S. Holder who does not tender its Notes pursuant to
the Tender Offers, the adoption of the Proposed Amendments should not result
in a deemed exchange of the Notes because the Proposed Amendments should not
constitute a "significant modification" to the terms of the Notes for U.S.
federal income tax purposes as defined in applicable Treasury Regulations. In
such case, a Holder who does not tender its Notes pursuant to the Tender
Offers will not recognize any gain or loss for U.S. federal income tax
purposes upon the adoption of the Proposed Amendments and will have the same
adjusted tax basis and holding period in the Notes after the adoption of the
Proposed Amendments that such Holder had in the Notes immediately before such
adoption.
Alternatively, if the adoption of the Proposed Amendments would result
in a deemed exchange of Notes for new Notes ("New Notes"), it is unclear
whether the deemed exchange would constitute a tax-free recapitalization
involving an exchange of "securities." If such a deemed exchange did
constitute a recapitalization: (i) a non-tendering U.S. Holder generally
would not recognize gain or loss as a result of the deemed exchange, (ii) a
non-tendering U.S. Holder's adjusted tax basis in the New Notes generally
would equal such holder's adjusted tax basis in the Notes deemed to have been
exchanged in connection with the deemed exchange and (iii) a non-tendering
U.S. Holder's holding period in the New Notes generally would include such
holder's holding period for the Notes deemed to have been exchanged in
connection with the deemed exchange.
If such a deemed exchange did not qualify as a tax-free
recapitalization, a non-tendering U.S. Holder would recognize taxable gain
(or loss) equal to the excess (or shortfall) of (i) the "issue price" of the
New Notes (other than any portion thereof attributable to accrued but unpaid
interest on the Notes) over (ii) such holder's adjusted tax basis in the
Notes. The issue price of the New Notes would equal their fair market value
on the date of the deemed exchange, provided that the New Notes are
considered "publicly traded" as defined for these purposes. Any recognized
gain would be treated as ordinary income to the extent of any accrued but
unrecognized market discount. In addition, if such deemed exchange did not
qualify as a tax-free recapitalization: (i) a non-tendering U.S. Holder's
adjusted tax basis in the New Notes would equal the issue price of the New
Notes and (ii) a non-tendering U.S. Holder would have a new holding period in
the New Notes commencing on the day after the deemed exchange.
30
Subject to a statutory de minimis exception, if the issue price of the
New Notes is less than their stated principal amount, the New Notes would
have original issue discount (OID) for U.S. federal income tax purposes, and
each non-tendering U.S. Holder (whether a cash or accrual basis taxpayer)
would be required to include such OID in ordinary income as it accrues under
a constant yield method without regard to the receipt of cash payments
attributable to such income.
Sales of Notes pursuant to the Tender Offers by U.S. Holders generally
will be subject to information reporting requirements. In addition, certain
U.S. Holders who fail to complete the Substitute Form W-9 included in the
Letters of Transmittal and Consent may be subject to backup withholding tax
at a rate of 31% with respect to payments the U.S. Holder receives pursuant
to the Tender Offers. Backup withholding tax is not an additional federal
income tax. Rather, the federal income tax liability of persons subject to
backup withholding tax will be offset by the amount of tax withheld. If
backup withholding tax results in an overpayment of federal income taxes, a
refund may be obtained from the IRS provided the required information is
furnished. Certain U.S. Holders (including, among others, corporations) are
not subject to these backup withholding tax and reporting requirements.
ALL HOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO
DETERMINE THE TAX CONSEQUENCES OF THE TENDER OFFERS IN THEIR
PARTICULAR CIRCUMSTANCES, INCLUDING THE APPLICATION OF
FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS.
DEALER MANAGER, DEPOSITARY AND INFORMATION AGENT
DEALER MANAGER. Banc of America Securities LLC is acting as the Dealer
Manager for the Company in connection with the Tender Offers and Solicitation
and has provided certain financial advisory services to the Company in
connection with the Tender Offers and Solicitation. The Company will pay the
Dealer Manager's reasonable and customary compensation for such services,
plus reimbursement for reasonable out-of-pocket expenses. The Company has
agreed to indemnify the Dealer Manager and financial advisor, including
liabilities under federal securities laws. At any time, the Dealer Manager
may trade the Notes for its own account or for the accounts of customers and,
accordingly, may hold a long or short position in the Notes. All inquiries
and correspondence addressed to the Dealer Manager relating to the Tender
Offers and Solicitation should be directed to the address or telephone number
set forth on the back cover of this Statement.
The Dealer Manager and its affiliates have in the past provided banking
and investment banking services to the Company for which it has received
customary compensation. From time to time, the Dealer Manager and its
affiliates may provide other services to the Company and its affiliates.
DEPOSITARY. The Depositary for the Tender Offers and Solicitation is
The Bank of New York. All deliveries, correspondence and questions sent or
presented to the Depositary
31
relating to the Tender Offers and the Solicitation should be directed to the
address or telephone number set forth on the back cover of this Statement.
The Company will pay the Depositary reasonable and customary compensation for
its services in connection with the Tender Offers and Solicitation, plus
reimbursement for reasonable out-of-pocket expenses. The Company will
indemnify the Depositary against certain liabilities and expenses in
connection therewith, including liabilities under the federal securities
laws.
INFORMATION AGENT. D.F. King & Co., Inc. is acting as the Information
Agent for the Company in connection with the Tender Offers and Solicitation.
The Company will pay the Information Agent reasonable and customary
compensation for such services, plus reimbursement for reasonable out-of-
pocket expenses. All inquiries and correspondence addressed to the
Information Agent relating to the Tender Offers and Solicitation should be
directed to the address or telephone number set forth on the back cover of
this Statement.
Brokers, dealers, commercial banks and trust companies will be
reimbursed by the Company for customary mailing and handling expenses
incurred by them in forwarding material to their customers. The Company will
not pay any fees or commissions to any broker, dealer or other person (other
than the Dealer Manager) in connection with the solicitation of tenders of
Notes or Consents pursuant to the Tender Offers.
None of the Dealer Manager, the Information Agent or the Depositary
assume any responsibility for the accuracy or completeness of the information
concerning the Company or their respective affiliates contained in this
Statement or for any failure by the Company to disclose events that may have
occurred and may affect the significance or accuracy of such information.
MISCELLANEOUS
Directors, officers and regular employees of the Company (who will not
be specifically compensated for such services) and the Dealer Manager may
contact Holders by mail, telephone, telex, telegram messages, mailgram
messages, datagram messages and personal interviews regarding the Tender
Offers and may request brokers, dealers and other nominees to forward this
Statement and related materials to beneficial owners of Notes.
The Company is not aware of any jurisdiction where the making of the
Tender Offers are not in compliance with the laws of such jurisdiction. If
the Company becomes aware of any jurisdiction where the making of the Tender
Offers or the Solicitation would not be in compliance with such laws, the
Company will make a good faith effort to comply with any such laws or seek to
have such laws declared inapplicable to the Tender Offers or the
Solicitation. If, after such good faith effort, the Company cannot comply
with any such applicable laws, the Tender Offers or Solicitation will not be
made to (nor will tenders be accepted from or on behalf of) the Holders
residing in such jurisdiction.
32
ANNEX A
TEXT OF LYONS INDENTURE PROVISIONS AND PROPOSED AMENDMENTS.
THIS ANNEX SHOWS THE SUBSTANTIVE CHANGES WHICH WILL BE MADE TO THE LYONS
INDENTURE UPON THE EFFECTIVENESS OF THE PROPOSED AMENDMENTS. THIS SCHEDULE
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FORM OF FIRST SUPPLEMENTAL
INDENTURE TO THE LYONS INDENTURE AND TO THE LYONS INDENTURE. CAPITALIZED
TERMS USED BUT NOT DEFINED SHALL HAVE THE MEANINGS ASSIGNED TO THEM IN THE
FIRST SUPPLEMENTAL INDENTURE. HOLDERS MAY REQUEST COPIES OF THE LYONS
INDENTURE AND/OR THE FORM OF FIRST SUPPLEMENTAL INDENTURE FROM THE
INFORMATION AGENT.
TEXT OF COVENANTS OF THE LYONS INDENTURE TO BE DELETED
Pursuant to the Proposed Amendments, the following sections of the LYONs
Indenture (together with references thereto and definitions used exclusively
therein) will be deleted in their entirety, unless otherwise specified. All
references to the Corporation in the following sections of the LYONs
Indenture are to the Company.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01. WHEN CORPORATION MAY MERGE OR TRANSFER ASSETS.
The Corporation shall not consolidate with or merge into, or convey,
transfer or lease all or substantially all its assets to, another
person unless (i) the resulting, surviving or transferee person (if
not the Corporation) shall be a person organized and existing under
the laws of the United States or any state thereof or the District
of Columbia and such entity shall assume by supplemental indenture
all the obligations of the Corporation under the Securities and this
Indenture, (ii) immediately after giving effect to such transaction,
no Default shall have occurred and be continuing and (iii) the
Corporation shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture
comply with this Indenture.
The successor shall be substituted for the Corporation, and
thereafter all obligations of the Corporation under the Securities
and this Indenture shall terminate except for obligations the
Corporation may have under a supplemental indenture pursuant to
Section 11.14. In connection with a lease of assets under this
Section 5.01, the predecessor person shall not be discharged of its
obligations under the Securities and this Indenture.
PROPOSED AMENDMENTS TO THE LYONS INDENTURE
AMENDMENTS TO ARTICLE 5, SUCCESSOR CORPORATION
(a) From and as of the Operational Time, Section 5.01 of the
Indenture, WHEN CORPORATION MAY MERGE OR TRANSFER ASSETS, shall be amended to
read in its entirety as follows:
"[Intentionally Omitted.]"
A-1
ANNEX B
TEXT OF TPI INDENTURE PROVISIONS AND PROPOSED AMENDMENTS.
THIS ANNEX SHOWS THE SUBSTANTIVE CHANGES WHICH WILL BE MADE TO THE TPI
INDENTURE UPON THE EFFECTIVENESS OF THE PROPOSED AMENDMENTS. THIS SCHEDULE
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FORM OF SECOND SUPPLEMENTAL
INDENTURE TO THE TPI INDENTURE AND TO THE TPI INDENTURE. CAPITALIZED TERMS
USED BUT NOT DEFINED SHALL HAVE THE MEANINGS ASSIGNED TO THEM IN THE SECOND
SUPPLEMENTAL INDENTURE. HOLDERS MAY REQUEST COPIES OF THE TPI INDENTURE
AND/OR THE FORM OF SECOND SUPPLEMENTAL INDENTURE FROM THE INFORMATION AGENT.
TEXT OF COVENANTS OF THE TPI INDENTURE TO BE DELETED
Pursuant to the Proposed Amendments, the following sections of the TPI
Indenture (together with references thereto and definitions used exclusively
therein) will be deleted in their entirety, unless otherwise specified. All
references to the Company in the following sections of the TPI Indenture are
to the Company, and all references to the Guarantor in the following sections
of the TPI Indenture are to TPI Restaurants, Inc.
SECTION 601
[Unnumbered first paragraph, and numbered first, second, third, and
fourth paragraphs, to remain]
(5) a default under any bond, debenture, note or other evidence
of Indebtedness for money borrowed by the Company or any of its
Significant Subsidiaries or under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the
Company or any Significant Subsidiary, whether such Indebtedness now
exists or shall hereafter be created, which default shall have
resulted in the maturity of $5,000,000 or more of such Indebtedness
becoming or being declared due and payable prior to the date on which
it would otherwise have become due and payable, without such
acceleration having been rescinded or annulled or such Indebtedness
having been discharged within a period of 10 days after there shall
have been given, by registered or certified mail, to the Company and
the Guarantor by the Trustee or to the Company and the Guarantor and
the Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities a written notice specifying such default and
requiring the Company to cause such acceleration to be rescinded,
annulled or discharged and stating that such notice is a "Notice of
Default" hereunder; provided, how-ever, that, subject to the
provisions of Sections 701 and 702, the Trustee shall not be deemed
to have knowledge of such default unless either (A) a Responsible
Officer of the Trustee shall have actual knowledge of such default
or (B) the Trustee shall have received written notice thereof from
the Company, the Guarantor, from any Holder, from the holder of any
such Indebtedness or from the trustee under any such mortgage,
indenture or other instrument; or
(6) a final judgment which, together with other out-standing
final judgments. entered against the Company and/or any of its
Significant Subsidiaries, exceeds an
B-1
aggregate of $5,000,000 (not covered by valid and collectible
insurance from solvent unaffiliated insurers) shall be entered
against the Company and/or any of its Significant Subsidiaries and
within 60 days after entry thereof such judgment shall not have been
satisfied or discharged or execution thereof stayed pending appeal
or, within 60 days after the expiration of any such stay, such judg-
ment shall not have been satisfied or discharged; or
[numbered seventh, eighth, and ninth paragraphs to remain]
SECTION 901.
SECTION 901. COMPANY MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and the Company shall not
permit any Person to consolidate with or merge into the Company or
convey, transfer or lease its proper-ties and assets substantially
as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance or transfer, or which leases, the properties
and assets of the Company substantially as an entirety shall be a
corporation, partnership or trust, shall be organized and validly
existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by
an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of (and premium, if any) and interest on all
the Securities and the performance or observance of every other
covenant of this Indenture on the part of the Company to be performed
or observed and shall have provided for conversion rights in
accordance with Section 1311;
(2) immediately after giving effect to such transaction and treating
any Indebtedness which becomes an Obligation of the Company or a
Subsidiary as a result of such transaction as having been incurred
by the Company or such Subsidiary at the time of such transaction,
no Event of Default, and no event which, after notice or lapse of
time or both, would become an Event of Default, shall have happened
and be continuing;
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such
supple-mental indenture comply with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with; and
(4) the Guarantor has (i) delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that the
Guarantee remains in full force and effect or (ii) in the case of
consolidation or a merger by the Company with, or conveyance,
transfer or lease of the Company's properties and assets
substantially as an entirety to
B-2
the Guarantor, directly assumed as obligor the obligations of the
Company under this Indenture.
SECTION 902
SECTION 902. SUCCESSOR SUBSTITUTED FOR COMPANY.
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any conveyance, transfer or lease
of the properties and assets of the Company substantially as an
entirety in accordance with Section 901, the successor Person formed
by such consolidation or into which the Company is merged or to which
such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor Person
shall be relieved of all obligations and covenants under this
Indenture and the Securities.
SECTION 903
SECTION 903. GUARANTOR MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
The Guarantor shall not consolidate with or merge into any other
Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and the Guarantor shall
not permit any Person to consolidate with or merge into the Guarantor
or convey, transfer or lease its properties and assets substantially
as an entirety to the Guarantor, unless:
(1) in case the Guarantor shall consolidate with or merger into
another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the Person formed by such
consolidation or into which the Guarantor is merged or the Person
which acquires by conveyance or transfer or which leases, the
properties and assets of the Guarantor substantially as an entirety
shall be a corporation, partnership or trust, organized and validly
existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by
an indenture supplemental hereto, executed and delivered by the
Guarantor and the Company to the Trustee, in form satisfactory to the
Trustee, the Guarantees endorsed on the Securities and the
performance of every covenant of this Indenture on the part of the
Guarantor to be performed or observed;
(2) immediately after giving effect to such transaction and
treating any Indebtedness which becomes an obligation of the
Guarantor or a Subsidiary as a result of such transaction as having
been incurred by the Guarantor or such Subsidiary at the time of such
transaction, no Event of Default, and no event which, after notice
or lapse of time or both, would become an Event of Default, shall
have happened and be continuing; and
(3) the Guarantor has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
B-3
transaction, such supplemental indenture comply with this Article
and that all conditions precedent herein provided for relating to
such transaction have been complied with.
SECTION 904
SECTION 904. SUCCESSOR SUBSTITUTED FOR GUARANTOR.
Upon any consolidation of the Guarantor with, or merger of the
Guarantor into, any other Person or any conveyance, transfer or
lease of the properties and assets of the Guarantor substantially as
an entirety in accordance with Section 903, the successor Person
formed by such consolidation or into which the Guarantor is merged
or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power
of, the Guarantor under this Indenture with the same effect as if
such successor Person had been named as the Guarantor herein, and
thereafter, except in the case of a lease, the predecessor Person
shall be relieved of all obligations and covenants under this
Indenture and the Guarantee.
SECTION 1105.
SECTION 1105. EXISTENCE.
Subject to Article Nine, each of the Company and the Guarantor
will do or cause to be done all things necessary to preserve and keep
in full force and effect their respective existence, rights (charter
and statutory), corporate licenses and corporate franchises;
provided, however, that neither the Company nor the Guarantor shall
be required to preserve any such right or franchise if the Board of
Directors shall deter-mine that the preservation thereof is no longer
desirable in the conduct of the business of the Company or the
Guarantor, as the case may be, and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 1106.
SECTION 1106. MAINTENANCE OF PROPERTIES, ETC.
The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and
supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Company may be
necessary so that the business carried on in connection therewith may
be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any of such properties
if such discontinuance is, in the judgment of the Company (i)
desirable in the conduct of its business or the business of any
Subsidiary and (ii) not disadvantageous in any material respect to
the Holders.
The Company and the Guarantor shall maintain with financially
sound and reputable insurers such insurance as may be required by law
and such other insurance to such extent and against such hazards and
liabilities, and with such deductible or self-insured retention
limitations, as is customarily maintained by companies similarly
situated.
B-4
SECTION 1107.
SECTION 1107. PAYMENT OF TAXES AND OTHER CLAIMS.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes,
assessments and governmental charges levied or imposed upon the
Company or any Subsidiary or upon the income, profits or property of
the Company or any Subsidiary, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien
upon the property of the Company or any Subsidiary; provided,
however, that the Company shall not be required to pay or discharge
or cause to be paid or discharged any such tax, assessment, charge
or claim whose amount, applicability or validity is being contested
in good faith by appropriate proceedings.
SECTION 1108.
SECTION 1108. LIMITATIONS ON RESTRICTED PAYMENTS AND INVESTMENTS.
The Company shall not make, or permit any of its Subsidiaries
to make, directly or indirectly, any Restricted Payment or
Investment in any Person, provided that the foregoing provisions
shall not be violated by reason of:
(a) Investments by the Company or any Subsidiary in cash or
Cash Equivalents;
(b) Investments by the Company or any Subsidiary in the
Restaurant Business (including, without limitation, the Enterprises
Guaranty and the Guarantee);
(c) The repurchase, redemption, retirement, defeasance or other
acquisition or retirement for value of Restaurants Notes or the
Securities by the Company or any Subsidiary, or the making of Consent
Payments;
(d) The repurchase, redemption, defeasance or other acquisition
or retirement for value of Common Stock of the Company, Subordinated
Indebtedness of the Company or Subordinated Indebtedness of the
Guarantor in an aggregate amount not to exceed 100% of the gross
proceeds received by the Company or the Guarantor from the issuance
subsequent to the date of this Indenture (other than to the Company
or any Subsidiary) of Common Stock of the Company, Subordinated
Indebtedness of the Company and Subordinated Indebtedness of the
Guarantor;
(e) (i) Investments by the Company or any Subsidiary in Maxcell
and the utilization by Maxcell of such proceeds in connection with
the FCC Permits, and (ii) Investments by the Company or any
Subsidiary in TPI Entertainment, and the utilization by TPI
Entertainment of such proceeds in connection with the business of
EEP; provided, however, that the aggregate amount of Investments made
by the Company and its Subsidiaries pursuant to this clause (e)
shall not at any time outstanding exceed $4,000,000 in the aggregate
which amount shall be calculated to equal (x) the sum of (A) cash or
Cash Equivalents in Maxcell or TPI Entertainment on the date of this
Indenture and (B) Investments made pursuant to clause (i) or (ii)
above, minus (y) cash or Cash Equivalents returned to the Company or
such Subsidiary, in the form of a dividend, principal repayment or
otherwise, by Maxcell or TPI Entertainment;
B-5
provided, further, that the expenditure of cash or Cash Equivalents
by Maxcell or TPI Entertainment in connection with the FCC Permits
or the business of EEP will not be deemed to be an Investment
pursuant to this clause(e);
(f) Investments by the Company or any of its Subsidiaries
received by the Company or any Subsidiary as consideration for any
sale or exchange of EEP, TPI Entertainment, Maxcell, or any other
assets of the Company or any of its Subsidiaries;
(g) The renewal or replacement of (i) the pledge by TPI
Enterprises of the Capital Stock of TPI Entertainment to secure
Indebtedness of EEP or (ii) the guarantee by TPI Entertainment of
Indebtedness of EEP;
(h) Restricted Payments or Investments by the Company or any
Subsidiary pursuant to any employee benefit or savings plan (in
existence or which may be adopted) or any employment or termination
arrangement; or
(i) Investments by the Company in U.S. Government Obligations
pursuant to Article Five of this Indenture.
SECTION 1109.
SECTION 1109. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES.
The Company shall not, and shall not permit any Subsidiary to,
create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Existing Subsidiary
to (a) pay to the Company dividends or make to the Company any other
distributions on such Subsidiary's Capital Stock or pay, directly
or indirectly, to the Company any Indebtedness owed to the Company,
(b) make any loans or advances to the Company or (c) transfer to the
Company any of its property or assets; except for such encumbrances
or restrictions existing under or by reason of (i) applicable law,
(ii) the Bank Credit Agreement or any other encumbrances or
restrictions substantially similar to the Bank Credit Agreement
contained in any replacement or refinancing of the Bank Credit
Agreement, this Indenture, or the Restaurants Notes Indenture, (iii)
customary provisions restricting subletting and assignment of any
lease governing a leasehold interest of an Existing Subsidiary, (iv)
agreements entered into in the ordinary course of the Company or any
Existing Subsidiary's business restricting assignment of such
agreements, (v) customary restrictions on dispositions of real
property interests, or (vi) any restrictions with respect to an
Existing Subsidiary imposed pursuant to an agreement which has been
entered into for the sale or disposition of any of the capital stock
or assets of such Existing Subsidiary pending the closing of such
sale or disposition; provided the provisions contained in this
Section 1109 shall not be violated if such encumbrance or restriction
expressly permits the transfer of funds by an Existing Subsidiary to
the Company sufficient to satisfy when due all payment Obligations
of the Company or the Guarantor in respect of the Securities
including, without limitation, the payment of principal, premium, if
any, interest or the Repurchase Price or the Redemption Price.
B-6
SECTION 1110.
SECTION 1110. SALE OF ASSETS.
The Company shall cause the net proceeds received by any
Subsidiary upon the sale, lease, conveyance or other disposition by
such Subsidiary of all or a portion of the EEP Partnership Interest
or the FCC Permits to be transferred to the Company promptly
following such Subsidiary's receipt thereof, except to the extent
that the transfer of all or a portion of such net proceeds is
prohibited by or would require a guarantee of the Company pursuant
to (i) an agreement entered into by the Company or any Subsidiary
prior to the date of this Indenture or (ii) the provisions of any
contract or other agreement relating to such sale, lease, conveyance
of other disposition requiring the Company or any such Subsidiary to
establish an escrow to make other similar provision for a purchase
price adjustment, indemnity or other similar payment.
SECTION 1111.
SECTION 1111. LIMITATION ON TRANSFER OF ASSETS TO SUBSIDIARIES.
Neither the Company nor the Guarantor shall transfer, whether
by way of sale (including sale and leaseback transactions), lease or
other disposition, any of their respective assets to any Subsidiary
(other than the Guarantor) unless after giving effect to such
transfer the PP&E Amount exceeds $120,000,000.
PROPOSED AMENDMENTS TO THE TPI INDENTURE
AMENDMENTS TO ARTICLE SIX
(a) From and as of the Operational Time, Section 6.01 of the Indenture
shall be amended to read in its entirety as follows:
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and
whether it shall be occasioned by the provisions of Article Fourteen
or be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order,
rule or regulation of any administrative or governmental body):
(1) default in the payment of any interest upon any Security
when it becomes due and payable, and the continuance of such default
for a period of 30 days; or
(2) default in the payment of the principal of (or premium, if
any, on) any Security at its Maturity; or
(3) default in the payment of the Repurchase Price (as defined
in Section 1501 in respect of any Security on the Repurchase Date (as
defined in Section 1501) therefor in accordance with the provisions
of Article Fifteen; or
(4) default in the performance, or breach, of any covenant or
agreement of the Company or the Guarantor in this Indenture (other
than a covenant or agreement a default in performance or breach of
which is specifically addressed elsewhere in this Indenture) when
such default or
B-7
breach shall have continued for a period of 60 days after there has
been given, by registered or certified mail, to the Company and the
Guarantor by the Trustee or to the Company and the Guarantor and the
Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder; or
(5) "[Intentionally Omitted.]"
(6) "[Intentionally Omitted.]"
(7) the entry by a court having jurisdiction in the premises
of (A) a decree or order for relief in respect of the Company or any
Significant Subsidiary in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization
or other similar law or (B) a decree or order adjudging the Company
or any Significant Subsidiary a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any
Significant Subsidiary under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any
Significant Subsidiary, as the case may be, or of any substantial
part of its property, or ordering the winding up or liquidation of
its affairs, and the continuance of any such decree or order for
relief or any such other decree or order unstayed and in effect for
a period of 60 consecutive days; or
(8) the commencement by the Company or any Significant
Subsidiary of a voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding, to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree
or order for relief in respect of the Company or any Significant
Subsidiary in an involuntary case or proceeding under any
organization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against the Company or
any Significant Subsidiary, or the filing by the Company or any
Significant Subsidiary of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law,
or the consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official
of the Company or any Significant Subsidiary, as the case may be, or
of any substantial part of their property, or the making by the
Company or any Significant Subsidiary of an assignment for the
benefit of creditors, or the admission by it in writing of its
inability to pay its debts generally as they become due, or the
taking of corporate action by the Company or any Subsidiary, as the
case may be, in furtherance of such action; or
(9) the Guarantee shall for any reason (other than pursuant to
its terms) cease to be in full force and effect.
(b) From and as of the Operational Time, Section 901 of the Indenture
shall be amended to read in its entirety as follows:
"[Intentionally Omitted.]"
B-8
(c) From and as of the Operational Time, Section 902 of the Indenture
shall be amended to read in its entirety as follows:
"[Intentionally Omitted.]"
(d) From and as of the Operational Time, Section 903 of the Indenture
shall be amended to read in its entirety as follows:
"[Intentionally Omitted.]"
(e) From and as of the Operational Time, Section 904 of the Indenture
shall be amended to read in its entirety as follows:
"[Intentionally Omitted.]"
(f) From and as of the Operational Time, Section 1105 of the Indenture
shall be amended to read in its entirety as follows:
"[Intentionally Omitted.]"
(g) From and as of the Operational Time, Section 1106 of the Indenture
shall be amended to read in its entirety as follows:
"[Intentionally Omitted.]"
(h) From and as of the Operational Time, Section 1107 of the Indenture
shall be amended to read in its entirety as follows:
"[Intentionally Omitted.]"
(i) From and as of the Operational Time, Section 1108 of the Indenture
shall be amended to read in its entirety as follows:
"[Intentionally Omitted.]"
(j) From and as of the Operational Time, Section 1109 of the Indenture
shall be amended to read in its entirety as follows:
"[Intentionally Omitted.]"
(k) From and as of the Operational Time, Section 1110 of the Indenture
shall be amended to read in its entirety as follows:
"[Intentionally Omitted.]"
(l) From and as of the Operational Time, Section 1111 of the Indenture
shall be amended to read in its entirety as follows:
"[Intentionally Omitted.]"
B-9
In order to tender, a Holder must send or deliver a properly completed
and signed Letter of Transmittal, certificates for Notes and any other
required documents to the Depositary at its address set forth below or tender
pursuant to DTC's Automated Tender Offer Program.
THE DEPOSITARY FOR THE TENDER OFFERS IS:
THE BANK OF NEW YORK
Reorganization Department
101 Barclay Street, Floor 7 East
New York, New York 10286
Attn.: Kin Lau
BY FACSIMILE FOR ELIGIBLE INSTITUTIONS
(212) 815-6339
To Confirm by Telephone: (212) 815-3750
Any questions or requests for assistance or for additional copies of
this Statement, the Letters of Transmittal or related documents may be
directed to the Information Agent at its telephone number set forth below.
A Holder may also contact the Dealer Manager at its telephone number set
forth below or such Holder's broker, dealer, commercial bank, trust company
or other nominee for assistance concerning the Tender Offers.
THE INFORMATION AGENT FOR THE TENDER OFFERS IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Banks and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: (888) 242-8157
THE DEALER MANAGER FOR THE TENDER OFFERS IS:
BANC OF AMERICA SECURITIES LLC
100 North Tryon Street, 7th Floor
Charlotte, North Carolina 28255
Attention: High Yield Special Products
(704) 388-4813 (Collect)
(888) 292-0070 (Toll-Free)
LETTER OF TRANSMITTAL
To Tender
Liquid Yield Option Notes Due 2004 (Zero Coupon - Subordinated)
CUSIP No. 825039 AC 4
of
SHONEY'S, INC.
Pursuant to the Purchase Offer and Consent Solicitation Statement
Dated March 27, 2000
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
BY MAIL, OVERNIGHT COURIER OR HAND:
101 Barclay Street
Floor 7 East
New York, New York 10286
Attn: Reorganization Section, Kin Lau
By Facsimile for Eligible Institutions: (212) 815-6339
To Confirm by Telephone: (212) 815-3750
- ----------------------------------------------------------------------------
THIS OFFER WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON APRIL 24, 2000,
UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE "EXPIRATION
DATE"). HOLDERS OF LYONS MUST TENDER THEIR LYONS ON OR PRIOR TO THE
EXPIRATION DATE TO RECEIVE THE TENDER OFFER CONSIDERATION. THE CONSENT
SOLICITATION WITH RESPECT TO THE LYONS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON THE 10TH CALENDAR DAY AFTER THE LYONS CONSENT SOLICITATION MATERIALS
RECEIVE REGULATORY CLEARANCE AND ARE MAILED IN DEFINITIVE FORM TO REGISTERED
HOLDERS OF THE LYONS, UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE
EXTENDED, THE "LYONS CONSENT DEADLINE"). TO RECEIVE THE CONSENT PAYMENT,
HOLDERS OF LYONS MUST TENDER THEIR LYONS AND PROVIDE THEIR CONSENTS TO THE
PROPOSED AMENDMENTS (AND NOT HAVE REVOKED SUCH CONSENTS) AT OR PRIOR TO THE
LYONS CONSENT DEADLINE. HOLDERS OF LYONS WILL NOT BE ABLE TO CONSENT TO THE
PROPOSED AMENDMENTS TO THE LYONS INDENTURE UNTIL THE LYONS CONSENT
SOLICITATION MATERIALS RECEIVE REGULATORY CLEARANCE AND ARE MAILED IN
DEFINITIVE FORM TO SUCH HOLDERS, WHICH IS EXPECTED TO OCCUR ON OR SHORTLY
AFTER APRIL 6, 2000.
- -----------------------------------------------------------------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA A FAX NUMBER OTHER THAN AS
LISTED ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
CAPITALIZED TERMS USED HEREIN AND NOT DEFINED SHALL HAVE THE MEANING
ASCRIBED TO THEM IN THE PURCHASE OFFER AND CONSENT SOLICITATION STATEMENT.
THIS LETTER OF TRANSMITTAL MAY BE USED TO TENDER LYONS; HOWEVER, IT
WILL NOT CONSTITUTE A CONSENT TO THE PROPOSED AMENDMENTS. IN ORDER TO CONSENT
TO THE PROPOSED AMENDMENTS, A HOLDER MUST COMPLETE THE FORM OF CONSENT IN
DEFINITIVE FORM WHICH WILL BE DISTRIBUTED TO HOLDERS OF LYONS UPON RECEIPT OF
REGULATORY CLEARANCE.
By execution hereof, the undersigned acknowledges receipt of the Purchase
Offer and Consent Solicitation Statement dated March 27, 2000 (as the same may
be amended from time to time, the "Purchase Offer") of Shoney's, Inc., a
Tennessee corporation (the "Company"), and this Letter of Transmittal and
instructions thereto (the "Letter of Transmittal"), which together constitute
the offer to purchase (the "Offer") by the Company for all of its outstanding
Liquid Yield Option Notes due 2004 (Zero Coupon - Subordinated)(the "LYONs"),
upon the terms and subject to the conditions set forth in the Purchase Offer.
The Offer is conditioned on, among other things, the receipt of the
requisite number of Consents at or prior to 11:59 P.M., New York City time, on
the Expiration Date and such Consents having not been revoked as more fully
described in the Purchase Offer under the caption "The Tender Offers and
Consent Solicitations --Terms and --Conditions". HOLDERS OF LYONS WILL NOT BE
ABLE TO CONSENT TO THE PROPOSED AMENDMENTS TO THE LYONS INDENTURE UNTIL THE
LYONS CONSENT SOLICITATION MATERIALS RECEIVE REGULATORY CLEARANCE AND ARE
MAILED IN DEFINITIVE FORM TO SUCH HOLDERS, WHICH IS EXPECTED TO OCCUR ON OR
SHORTLY AFTER APRIL 6, 2000. The Company reserves the right to waive any one
or more of the conditions to the Offer. A Supplemental Indenture will be
executed upon the satisfaction of the Consent Condition and, upon such
execution, the Supplemental Indenture will become effective. The Supplemental
Indenture will provide that the Proposed Amendments will not become operative
unless and until validly tendered LYONs are purchased pursuant to the Offer.
If the Offer is terminated or withdrawn, or if no LYONs are purchased pursuant
to the Offer for any reason, then the Proposed Amendments contained in the
Supplemental Indenture will not become operative. The Purchase Offer enclosed
herewith contains a more complete description of the Offer and the related
solicitation of consents and the conditions thereof.
THE INSTRUCTIONS CONTAINED HEREIN AND IN THE PURCHASE OFFER (AS DEFINED
BELOW) SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be completed by a Holder if (i)
certificates representing LYONs are to be physically delivered to the
Depositary herewith by such Holder or (ii) tender of LYONs is to be made by
book-entry transfer to the Depositary's account at DTC pursuant to the
procedures set forth under the caption "The Tender Offers and Consent
Solicitations--Book-Entry Delivery of the Notes" and instructions are not
being transmitted through the DTC Automated Tender Offer Program ("ATOP").
Holders of LYONs who are tendering by book-entry transfer to the
Depositary's account at DTC can execute their tender through ATOP. DTC
participants that are accepting the Offer may transmit their acceptance to DTC,
which will verify the acceptance and execute a book-entry delivery to the
Depositary's account at DTC. DTC will then send an Agent's Message to the
Depositary for its acceptance. Delivery of the Agent's Message by DTC will
satisfy the terms of the Offer in lieu of execution and delivery of a Letter
of Transmittal by the participant identified in the Agent's Message.
Accordingly, THIS LETTER OF TRANSMITTAL NEED NOT BE COMPLETED BY A HOLDER
TENDERING THROUGH ATOP.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
Your bank or broker can assist you in completing this form. The
instructions included with this Letter of Transmittal must be followed.
Questions and requests for assistance or for additional copies of the Purchase
Offer, this Letter of Transmittal may be directed to the Information Agent.
See Instruction 12 below.
2
- -----------------------------------------------------------------------------
TENDER OF LYONs
- -----------------------------------------------------------------------------
[ ] CHECK HERE IF CERTIFICATES REPRESENTING TENDERED LYONs ARE ENCLOSED
HEREWITH.
[ ] CHECK HERE IF TENDERED LYONs ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH DTC AND COMPLETE
THE FOLLOWING:
Name of Tendering Institution:_______________________________________________
Account Number:______________________________________________________________
Transaction Code Number:_____________________________________________________
[ ] CHECK HERE IF TENDERED LYONS ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY PREVIOUSLY DELIVERED TO THE DEPOSITARY AND
COMPLETE THE FOLLOWING:
Name of Registered Holder(s):________________________________________________
Window Ticket No. (if any):__________________________________________________
Date of Execution of Notice of Guaranteed Delivery:__________________________
Name of Eligible Institution that Guaranteed Delivery:_______________________
If Delivered by Book-Entry Transfer:
Name of Tendering Institution:_______________________________________
Account Number with DTC:_____________________________________________
Transaction Code Number:_____________________________________________
- -----------------------------------------------------------------------------
3
List below the LYONs to which this Letter of Transmittal relates. If the
space provided is inadequate, list the certificate numbers and principal
amounts at maturity on a separately executed schedule and affix the schedule
to this Letter of Transmittal. Tenders of LYONs will be accepted only in
principal amounts at maturity equal to $1,000 or integral multiples thereof.
No alternative, conditional or contingent tenders will be accepted.
<TABLE>
<CAPTION>
<S><C>
- -------------------------------------------------------------------------------------------------
DESCRIPTION OF LYONs
- -------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED
HOLDER(S) OR NAME OF DTC PARTICIPANT AGGREGATE
AND PARTICIPANT'S DTC ACCOUNT NUMBER PRINCIPAL PRINCIPAL AMOUNT AT
IN WHICH LYONS ARE HELD CERTIFICATE AMOUNT AT MATURITY MATURITY
(PLEASE FILL IN BLANK) NUMBER(S)* REPRESENTED TENDERED**
____________________________________ ----------- ------------------ -------------------
- -------------------------------------------------------------------------------------------------
TOTAL PRINCIPAL AMOUNT AT MATURITY OF LYONs
- -------------------------------------------------------------------------------------------------
* Need not be completed by Holders tendering by book-entry transfer.
- -------------------------------------------------------------------------------------------------
** Unless otherwise specified, it will be assumed that the entire aggregate principal amount at
maturity represented by the LYONs described above is being tendered.
- -------------------------------------------------------------------------------------------------
</TABLE>
The names and addresses of the registered Holders should be printed, if
not already printed above, exactly as they appear on the certificates
representing LYONs tendered hereby.
4
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Shoney's, Inc. (the "Company"), upon
the terms and subject to the conditions set forth in its Purchase Offer and
Consent Solicitation Statement dated March 27, 2000 (the "Purchase Offer"),
receipt of which is hereby acknowledged, and in accordance with this Letter of
Transmittal, the principal amount at maturity of LYONs indicated in the table
above entitled "Description of LYONs" under the column heading "Principal
Amount at Maturity Tendered" (or, if nothing is indicated therein, with
respect to the entire aggregate principal amount at maturity represented by
the LYONs described in such table). The undersigned acknowledges and agrees
that the tender of LYONs made hereby may not be withdrawn, except in accordance
with the procedures set forth in the Purchase Offer. Terms used herein and not
defined herein shall have the meanings ascribed to them in the Purchase Offer.
Subject to, and effective upon, the acceptance for purchase of, and
payment for, the principal amount at maturity of LYONs tendered herewith in
accordance with the terms and subject to the conditions of the Offer, the
undersigned hereby sells, assigns and transfers to, or upon the order of, the
Company, all right, title and interest in and to all of the LYONs tendered
hereby. The undersigned hereby irrevocably constitutes and appoints the
Depositary the true and lawful agent and attorney-in-fact of the undersigned
(with full knowledge that the Depositary also acts as the agent of the Company)
with respect to such LYONs, with full powers of substitution and revocation
(such power of attorney being deemed to be an irrevocable power coupled with
an interest), to (i) present such LYONs and all evidences of transfer and
authenticity to, or transfer ownership of such LYONs on the account books
maintained by DTC to, or upon the order of, the Company, (ii) present such
LYONs for transfer of ownership on the books of the Company, and (iii) receive
all benefits and otherwise exercise all rights of beneficial ownership of such
LYONs.
The undersigned acknowledges and agrees that a tender of LYONs pursuant to
any of the procedures described in the Purchase Offer and in the instructions
hereto and an acceptance of such LYONs by the Company will constitute a binding
agreement between the undersigned and the Company upon the terms and subject
to the conditions of the Offer. For purposes of the Offer, the undersigned
understands that validly tendered LYONs (or defectively tendered LYONs with
respect to which the Company has, or has caused to be, waived such defect)
will be deemed to have been accepted if, as and when the Company gives oral or
written notice thereof to the Depositary.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the LYONs
tendered hereby and that when such tendered LYONs are accepted for purchase
and payment by the Company, the Company will acquire good title thereto, free
and clear of all liens, restrictions, charges and encumbrances and not subject
to any adverse claim or right. The undersigned will, upon request, execute and
deliver any additional documents deemed by the Depositary or by the Company to
be necessary or desirable to complete the sale, assignment and transfer of the
LYONs tendered hereby.
All authority conferred or agreed to be conferred by this Letter of
Transmittal shall not be affected by, and shall survive, the death or
incapacity of the undersigned, and any obligation of the undersigned hereunder
shall be binding upon the heirs, executors, administrators, trustees in
bankruptcy, personal and legal representatives, successors and assigns of the
undersigned.
The undersigned understands that, under certain circumstances and subject
to the certain conditions of the Offer (each of which the Company may waive)
set forth in the Purchase Offer, the Company may not be required to accept for
purchase any of the LYONs tendered (including any LYONs tendered after the
Expiration Date). Any LYONs not accepted for purchase will be returned
promptly to the undersigned at the address set forth above unless otherwise
indicated under "A. Special Issuance/Delivery Instructions" below.
The undersigned understands that the delivery and surrender of the LYONs
is not effective, and the risk of loss of the LYONs does not pass to the
Depositary, until receipt by the Depositary of this Letter of Transmittal, or a
facsimile hereof, properly completed and duly executed, together with all
accompanying evidences of authority and any other required
5
documents in form satisfactory to the Company. All questions as to the form of
all documents and the validity (including time of receipt) and acceptance of
tenders and withdrawals of LYONs and deliveries and revocations of Consents
will be determined by the Company, in its sole discretion, which determination
shall be final and binding.
Unless otherwise indicated herein under "A. Special Issuance/Delivery
Instructions," the undersigned hereby request(s) that any LYONs representing
principal amounts at maturity not tendered or not accepted for purchase be
issued in the name(s) of, and delivered to, the undersigned (and in the case of
LYONs tendered by book-entry transfer, by credit to the account of DTC). Unless
otherwise indicated herein under "B. Special Payment Instructions," the
undersigned hereby request(s) that any checks for payment to be made in respect
of the LYONs tendered hereby in connection with the Offer be issued to the
order of, and delivered to, the undersigned.
In the event that the "A. Special Issuance/Delivery Instructions" box is
completed, the undersigned hereby request(s) that any LYONs representing
principal amounts at maturity not tendered or not accepted for purchase be
issued in the name(s) of, and be delivered to, the person(s) at the address(es)
therein indicated. The undersigned recognizes that the Company has no
obligation pursuant to the "A. Special Issuance/Delivery Instructions" box to
transfer any LYONs from the names of the registered holder(s) thereof if the
Company does not accept for purchase any of the principal amount at maturity
of such LYONs so tendered. In the event that the "B. Special Payment
Instructions" box is completed, the undersigned hereby request(s) that payment
to be made in respect of the LYONs tendered hereby be issued in the name(s) of,
and be delivered to, the person(s) at the address(es) therein indicated.
6
<PAGE>
<TABLE>
<S><C>
- ------------------------------------------------- -----------------------------------------------
[ A. SPECIAL ISSUANCE/DELIVERY ] [ B. SPECIAL PAYMENT ]
[ INSTRUCTIONS ] [ INSTRUCTIONS ]
[ (See instructions 3, 4, 7 and 9) ] [ (See Instruction and 9) ]
[_____________________________________________ ] [ -------------------------------------------- ]
[ To be completed ONLY if LYONs in a principal ] [ To be completed ONLY if payment is to be ]
[ amount at maturity not tendered or not ] [ made in the name of someone other than ]
[ accepted for purchase are to be issued in ] [ the person(s) whose signature(s) appears ]
[ the name of someone other than the person(s) ] [ within this Letter of Transmittal or sent ]
[ whose signature(s) appear(s) within this ] [ to an address different from that shown ]
[ Letter of Transmittal or sent to an address ] [ in the box entitled "Description of LYONs" ]
[ different from that shown in the box entitled ] [ within this Letter of Transmittal. ]
[ "Description of LYONs " within this Letter ] [ ]
[ of Transmittal, or if LYONs tendered by book- ] [ Name_______________________________________ ]
[ entry transfer that are not accepted for ] [ (Please Print) ]
[ purchase are to be credited to an account ] [ ]
[ maintained at DTC other than the one ] [ Address____________________________________ ]
[ designated above. ] [ ]
[ ] [ ]
[ ] [ ___________________________________________ ]
[ Name________________________________________ ] [ (Zip Code) ]
[ (Please Print) ] [ ]
[ ] [ ___________________________________________ ]
[ Address_____________________________________ ] [ (Tax Identification or Social ]
[ ] [ Security Number) ]
[ ____________________________________________ ] [ ]
[ (Zip Code) ] [ ___________________________________________ ]
[ ] [ (See Substitute Form W-9 herein ]
[ ____________________________________________ ] [ ]
[(Tax Identification or Social Security Number) ] [ ]
[ (See Substitute Form W-9 herein) ] ------------------------------------------------
[ ]
[ Credit unpurchased LYONs by book-entry ]
[ transfer to the DTC account set forth below: ]
[ ]
[ ____________________________________________ ]
[ PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN ]
[ ]
[ ]
[ SIGNATURE GUARANTEE (See Instruction 3 below) ]
[ Certain Signatures Must be Guaranteed by a ]
[ Medallion Signature Guarantor. ]
[ ]
[ ]
[ ____________________________________________ ]
[ (Name of Medallion Signature Guarantor) ]
[ ]
[ ____________________________________________ ]
[ ]
[ ____________________________________________ ]
[ ]
[ ____________________________________________ ]
[ (Address, including Zip Code, and Telephone ]
[ Number, including Area Code, of Firm) ]
[ ]
[ ____________________________________________ ]
[ (Authorized Signature) ]
[ ]
[ ____________________________________________ ]
[ (Printed Name) ]
- ------------------------------------------------
</TABLE>
7
<TABLE>
<S><C>
PLEASE SIGN HERE
(To be completed by all tendering Holders of LYONs regardless of whether LYONs are being physically delivered
herewith, unless an Agent's Message is delivered in connection with a book-entry transfer of such LYONs)
By completing, executing and delivering this Letter of Transmittal, the undersigned hereby tenders the
principal amount at maturity of the LYONs listed in the box above labeled "Description of LYONs " under the
column heading "Principal Amount at Maturity Tendered" (or, if nothing is indicated therein, with respect to
the entire aggregate principal amount at maturity represented by the LYONs described in such box).
This Letter of Transmittal must be signed by the registered Holder(s) exactly as the name(s) appear(s) on
certificate(s) representing LYONs or, if tendered by a participant in DTC, exactly as such participant's name
appears on a security position listing as the owner of such LYONs. If signature is by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, please set forth the full title and see Instruction 4.
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
Signature(s) of Registered Holder(s) or Authorized Signatory
(See guarantee requirement below)
Dated________________________________________________________________________________________________________
Name(s)______________________________________________________________________________________________________
(Please Print)
Capacity_____________________________________________________________________________________________________
Address______________________________________________________________________________________________________
(Zip Code)
Area Code and
Telephone
Number_______________________________________________________________________________________________________
Tax Identification or
Social Security
No.__________________________________________________________________________________________________________
COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9
Medallion Signature Guarantee
(If Required--See Instructions 3 and 4)
Authorized
Signature____________________________________________________________________________________________________
Print Name
And Title____________________________________________________________________________________________________
Name
of Firm _____________________________________________________________________________________________________
[Place Seal Here]
Address______________________________________________________________________________________________________
(Zip Code)
Dated________________________________________________________________________________________________________
</TABLE>
8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND LYONS OR BOOK-ENTRY
CONFIRMATIONS; GUARANTEED DELIVERY PROCEDURES; WITHDRAWAL OF TENDER. To
tender LYONs in the Offer, physical delivery of the LYONs or a confirmation of
any book-entry transfer into the Depositary's account with DTC of LYONs
tendered electronically, as well as a properly completed and duly executed
copy (or facsimile) of this Letter of Transmittal with any required signature
guarantees (or Agent's Message (as defined below) in connection with a book-
entry transfer), and any other documents required by this Letter of
Transmittal must be received by the Depositary at its address set forth herein
at or prior to 11:59 P.M., New York City time, on the Expiration Date. HOLDERS
OF LYONS WILL NOT BE ABLE TO CONSENT TO THE PROPOSED AMENDMENTS TO THE LYONS
INDENTURE UNTIL THE LYONS CONSENT SOLICITATION MATERIALS RECEIVE REGULATORY
CLEARANCE AND ARE MAILED IN DEFINITIVE FORM TO SUCH HOLDERS, WHICH IS EXPECTED
TO OCCUR ON OR SHORTLY AFTER APRIL 6, 2000. No Consent Payment will be paid
to Holders who deliver their Consents after the LYONs Consent Deadline. The
method of delivery of this Letter of Transmittal, LYONs and all other required
documents to the Depositary is at the election and risk of the tendering
Holder(s). If such delivery is by mail, it is suggested that Holders use
properly insured registered mail, return receipt requested, and that the
mailing be made sufficiently in advance of the Expiration Date to permit
delivery to the Depositary at or prior to such time. Except as otherwise
provided below, the delivery will be deemed made when actually received or
confirmed by the Depositary. This Letter of Transmittal and LYONs should be
sent only to the Depositary and not to the Company, the Trustee, the Dealer
Manager or the Information Agent.
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Depositary and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgement from the
participant in DTC tendering the LYONs, that such participant has received and
agrees to be bound by the terms of this Letter of Transmittal and the Company
may enforce such agreement against the participant.
If, after the LYONs Consent Deadline and prior to the Expiration Date,
Holders desire to tender LYONs pursuant to the Offer and (i) such LYONs are not
lost, but are not immediately available, (ii) time will not permit this Letter
of Transmittal, such LYONs or other required documents to reach the Depositary
at or prior to 11:59 P.M., New York City time, on the Expiration Date or (iii)
the procedures for book-entry transfer cannot be completed at or prior to
11:59 P.M., New York City time, on the Expiration Date, such Holders may
effect a tender of such LYONs and delivery of Consents to the Proposed
Amendments in accordance with the guaranteed delivery procedures set forth in
the Purchase Offer under the caption "The Tender Offers and Consent
Solicitations-Guaranteed Delivery."
Pursuant to the guaranteed delivery procedures:
(a) such tender must be made by or through an Eligible Institution
(defined as an institution that is a member of a registered national securities
exchange or the National Association of Securities Dealers, Inc. or is a
commercial bank or trust company having an office in the United States);
(b) at or prior to 11:59 P.M., New York City time, on the Expiration
Date, the Depositary must have received from such Eligible Institution, at the
address of the Depositary set forth herein, a properly completed and duly
executed Notice of Guaranteed Delivery (by mail, hand delivery or facsimile),
substantially in the form provided by the Company, setting forth the name(s)
and address(es) of the Holder(s), a description of the LYONs and the principal
amount of LYONs being tendered and stating that the tender is being made
thereby and guaranteeing that, within three New York Stock Exchange trading
days after the date of the Notice of Guaranteed Delivery, a properly completed
and duly executed Letter of Transmittal, or a facsimile thereof, with any
required signature guarantees or an Agent's Message, together with the LYONs
(or confirmation of book-entry transfer of such LYONs into the Depositary's
account with DTC as described above) and any other documents required by this
Letter of Transmittal and the instructions hereto will be deposited by such
Eligible Institution with the Depositary; and
(c) this Letter of Transmittal, or facsimile hereof, properly completed
and duly executed, with any required signature guarantees, or an Agent's
Message, and all physically delivered LYONs in proper form (or confirmation of
book-entry transfer of such LYONs into the Depositary's account with DTC as
described above, including an Agent's Message in connection therewith) and all
other required documents must be received by the Depositary within three New
York Stock Exchange trading days after the date of the Notice of Guaranteed
Delivery.
9
HOLDERS SHOULD NOTE THAT THE FOREGOING PROCEDURES ARE NOT AVAILABLE UNTIL
AFTER THE LYONS CONSENT DEADLINE AND THAT TENDERS PURSUANT TO THE GUARANTEED
DELIVERY PROCEDURES WILL NOT BE ACCEPTED PRIOR TO THAT TIME OR ENTITLE A HOLDER
TO RECEIVE A CONSENT PAYMENT.
Tenders of LYONs may be withdrawn at any time prior to the Expiration Date
and, unless accepted by the Company, any time after 40 business days after the
date of the Purchase Offer by written notice of withdrawal received by the
Depositary, delivery by mail or facsimile, which notice must be received by the
Depositary at its address set forth herein at or prior to 11:59 P.M., New York
City time, on the Expiration Date. To be effective, notice of withdrawal of
tendered LYONs must (i) be received by the Depositary at or prior to 11:59
P.M., New York City time, on the Expiration Date at its address set forth
herein, (ii) describe the LYONs to be withdrawn, (iii) specify the name of the
person who deposited the LYONs to be withdrawn (the "Depositor"), the name in
which the LYONs are registered (or, if tendered by book entry transfer, the
name of the participant in DTC whose name appears on a security position
listing as the owner of such LYONs) if different from that of the Depositor,
(iv) contain the certificate numbers shown on the LYONs, (v) state the
principal amount of LYONs to be withdrawn and (vi) be signed by the Holder in
the same manner as the original signature on this Letter of Transmittal
(including any required signature guarantee(s)) or be accompanied by evidence
satisfactory to the Company that the person withdrawing the tender has
succeeded to be beneficial ownership of the LYONs. If LYONs have been delivered
or otherwise identified (through confirmation of book-entry transfer of such
LYONs) to the Depositary, the name of the Holder and the LYONs withdrawn must
also be furnished to the Depositary as aforesaid prior to the physical release
of the withdrawn LYONs (or, in the case of LYONs transferred by book-entry
transfer, the name and number of the account at DTC to be credited with
withdrawn LYONs).
2. CONSENT TO PROPOSED AMENDMENTS; REVOCATION OF CONSENTS. THE CONSENT
SOLICITATION WITH RESPECT TO THE LYONS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY
TIME, ON THE 10TH CALENDAR DAY AFTER THE LYONS CONSENT SOLICITATION MATERIALS
RECEIVE REGULATORY CLEARANCE AND ARE MAILED IN DEFINITIVE FORM TO REGISTERED
HOLDERS OF THE LYONS, UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE
EXTENDED, THE "LYONS CONSENT DEADLINE"). IN ORDER TO RECEIVE THE CONSENT
PAYMENT, HOLDERS OF LYONS MUST TENDER THEIR LYONS AND PROVIDE THEIR CONSENTS
TO THE PROPOSED AMENDMENTS (AND NOT HAVE REVOKED SUCH CONSENTS) AT OR PRIOR TO
THE LYONS CONSENT DEADLINE. HOLDERS OF LYONS WILL NOT BE ABLE TO CONSENT TO THE
PROPOSED AMENDMENTS TO THE LYONS INDENTURE UNTIL THE LYONS CONSENT SOLICITATION
MATERIALS RECEIVE REGULATORY CLEARANCE AND ARE MAILED IN DEFINITIVE FORM TO
SUCH HOLDERS, WHICH IS EXPECTED TO OCCUR ON OR SHORTLY AFTER APRIL 6, 2000.
LYONs Holders who have not tendered their LYONs prior to being sent a consent
form may not tender their LYONs without delivering the consent form. LYONs
Holders who have not tendered their Consents with respect to tendered LYONs
prior to the LYONs Consent Deadline will not receive the Consent Payment. In
accordance with the Purchase Offer, all properly completed and executed Letters
of Transmittal and Consents related to such LYONs so tendered consenting to the
Proposed Amendments that are received by the Depositary at or prior to 5:00
P.M., New York City time, on the LYONs Consent Deadline will be counted as
Consents with respect to the Proposed Amendments unless properly revoked prior
to expiration of the LYONs Consent Deadline. To revoke a Consent, a Holder
must withdraw the corresponding tendered LYONs in the manner set forth above.
3. SIGNATURE GUARANTEES. No signature guarantee is required if: (i)
this Letter of Transmittal is signed by the registered holder(s) of the LYONs
tendered herewith (or by a participant in DTC whose name appears on a security
position listing as the owner of LYONs) and the payments for the LYONs to be
purchased, or any LYONs for principal amounts not tendered or not accepted for
purchase are to be issued, directly to such registered holder(s), (or, if
signed by a participant in DTC, and LYONs for principal amounts not tendered or
not accepted for purchase are to be credited to such participant's account at
DTC) and the "Special Issuance/Delivery Instructions" box of this Letter of
Transmittal has not been completed; or (ii) such LYONs are tendered for the
account of an Eligible Institution. In all other cases, all signatures on
Letters of Transmittal must be guaranteed by a Medallion Signature Guarantor
(defined as a recognized participant in the Securities Transfer Agents
Medallion Program).
4. SIGNATURES ON LETTER OF TRANSMITTAL, INSTRUMENTS OF TRANSFER AND
ENDORSEMENTS. If this Letter of Transmittal is signed by the registered Holders
of the LYONs tendered hereby, the signatures must correspond with the name(s)
as written on the face of the certificate(s) without alteration, enlargement or
any change whatsoever. If this Letter of Transmittal is signed by a
participant in DTC whose name is shown on a security position listing as the
owner of the LYONs tendered hereby, the signature must correspond with the name
shown on the security position listing as the owner of such LYONs.
10
If any of the LYONs tendered hereby are registered in the name of two or
more Holders, all such Holders must sign this Letter of Transmittal. If any of
the LYONs tendered hereby are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any LYONs or instrument of transfer is
signed by a trustee, executor, administrator, guardian, attorney-in-fact,
agent, officer of a corporation or other person acting in a fiduciary or
representative capacity, such person should so indicate when signing, and
proper evidence satisfactory to the Company of such person's authority to so
act must be submitted.
When this Letter of Transmittal is signed by the registered Holders of the
LYONs tendered hereby, no endorsements of LYONs or separate instruments of
transfer are required unless payment is to be made, or LYONs not tendered or
purchased are to be issued, to a person other than the registered Holders, in
which case signatures on such LYONs or instruments of transfer must be
guaranteed by a Medallion Signature Guarantor.
IF THIS LETTER OF TRANSMITTAL IS SIGNED OTHER THAN BY THE REGISTERED
HOLDERS OF THE LYONS TENDERED HEREBY, SUCH LYONS MUST BE ENDORSED OR
ACCOMPANIED BY APPROPRIATE INSTRUMENTS OF TRANSFER, IN ANY CASE SIGNED EXACTLY
AS THE NAME OR NAMES OF THE REGISTERED HOLDERS APPEAR ON THE LYONS AND
SIGNATURES ON SUCH LYONS OR INSTRUMENTS OF TRANSFER ARE REQUIRED AND MUST BE
GUARANTEED BY A MEDALLION SIGNATURE GUARANTOR, UNLESS THE SIGNATURE IS THAT OF
AN ELIGIBLE INSTITUTION.
5. DELIVERY OF LETTER OF TRANSMITTAL AND LYONS CERTIFICATES. This
Letter of Transmittal is to be used if (i) certificates evidencing LYONs are to
be forwarded herewith or (ii) LYONs are to be delivered by book-entry transfer
pursuant to the procedure set forth under the caption "The Tender Offers and
Consent Solicitations-Book-Entry Delivery of the Notes." Certificates
evidencing all physically tendered LYONs, or a confirmation of a book-entry
transfer into the Depositary's account at DTC of all LYONs delivered by
book-entry transfer as well as a properly completed and duly executed Letter
of Transmittal (or facsimile thereof) with any required signature guarantees
and any other documents requested by this Letter of Transmittal, must be
received by the Depositary at one of its addresses set forth herein, prior to
11:59 p.m., New York City time, on the Expiration Date. If certificates
evidencing LYONs are forwarded to the Depositary in multiple deliveries, a
properly completed and duly executed Letter of Transmittal must accompany each
such delivery.
No alternative, conditional or contingent tenders will be accepted. All
tendering Holders, by execution of this Letter of Transmittal (or a manually
signed facsimile hereof), waive any right to receive any notice of the
acceptance of their LYONs for purchase.
6. INADEQUATE SPACE. If the space provided under "Description of
LYONs" is inadequate, the information should be continued on a separate
signed list and attached to this Letter of Transmittal.
7. PARTIAL TENDERS AND UNPURCHASED LYONS (NOT APPLICABLE TO HOLDERS
WHO TENDER BY BOOK-ENTRY TRANSFER). If only a portion (in an integral portion
of $1,000 only) of the principal amount at maturity of any LYON is to be
tendered, fill in the portion of the principal amount at maturity of such LYON
to be tendered in the column entitled "Principal Amount at Maturity Tendered."
If the tendered portion of the LYON so tendered is purchased, the LYON will be
split into two LYONs (in denominations of $1,000 or an integral multiple
thereof), the aggregate principal amount at maturity of which will equal the
principal amount at maturity of such original LYON. The Depositary will then
return to the tendering Holder a new LYON, in the principal amount at maturity
of the portion of such original LYON not tendered and purchased, unless
otherwise specified in the "A. Special Issuance/Delivery Instructions" box in
this Letter of Transmittal. The entire principal amount at maturity evidenced
by a certificate for LYONs will be deemed tendered unless otherwise indicated.
8. TRANSFER TAXES. Except as set forth in this Instruction 8, the
Company will pay or cause to be paid any transfer taxes with respect to the
transfer and sale of LYONs to it, or to its order, pursuant to the Offer. If
payment is to be made to, or if LYONs not tendered or purchased are to be
registered in the name of, any persons other than the registered owners, or if
tendered LYONs are registered in the name of any persons other than the persons
signing this Letter of Transmittal, the amount of any transfer taxes (whether
imposed on the registered Holder or such other person) payable on
11
account of the transfer to such other person will be deducted from the
payment unless satisfactory evidence of the payment of such taxes or
exemption therefrom is submitted.
9. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If payment for any
LYONs tendered hereby is to be made, or certificates evidencing LYONs not
tendered or not purchased is (are) to be issued, in the name of a person
other than the person(s) signing this Letter of Transmittal or if payment in
the name of the person(s) signing this Letter of Transmittal or any such
certificate is to be sent to someone other than the person(s) signing this
Letter of Transmittal or to the person(s) signing this Letter of Transmittal
but at an address other than that shown in the box entitled "Description of
LYONs" on this Letter of Transmittal, the appropriate boxes captioned "A.
Special Issuance/Delivery Instructions" and "B. Special Payment Instructions"
on this Letter of Transmittal must be completed.
10. IRREGULARITIES. The Company will determine, in its sole
discretion, all questions as to the validity, form, eligibility (including
time of receipt), acceptance for payment and withdrawal of any tender of
LYONs and its determination shall be final and binding on all parties. The
Company reserves the absolute right to reject any and all tenders of LYONs
determined by it not to be in the proper form or the acceptance of or payment
for which may be unlawful. The Company also reserves the absolute right to
waive any of the conditions of the Purchase Offer or any defect or
irregularity in the tender of any particular LYONs, whether or not similar
conditions, defects or irregularities are waived in the case of other LYONs,
and the Company's interpretation of the terms and conditions of the Purchase
Offer (including these instructions) shall be final and binding on all
parties. No tender of LYONs will be deemed to be validly made until all
defects and irregularities have been cured or waived. Unless waived, all
defects or irregularities in connection with tenders must be cured within
such time as the Company shall determine. None of the Company, the Dealer
Manager, the Depositary, the Information Agent nor any other person is or
will be obligated to give notice of defects or irregularities in tenders or
any notices of withdrawal, nor shall any of them incur any liability for
failure to give any such notice.
11. SUBSTITUTE FORM W-9. Each tendering Holder (or other payee) is
required to provide the Depositary with a correct taxpayer identification
number ("TIN"), generally the Holder's Social Security or federal employer
identification number, and with certain other information, on Substitute Form
W-9, which is provided under "Important Tax Information" below, and to
certify that the Holder (or other payee) is not subject to backup
withholding. Failure to provide the information on the Substitute Form W-9
may subject the tendering Holder (or other payee) to a $50 penalty imposed by
the Internal Revenue Service and 31% federal income tax backup withholding on
any payment. The box in Part 3 of the Substitute Form W-9 may be checked if
the tendering Holder (or other payee) has not been issued a TIN and has
applied for a TIN or intends to apply for a TIN in the near future. If the
box in Part 3 is checked and the Depositary is not provided with a TIN by the
time of payment, the Depositary will withhold 31% on all such payments, if
any, until a TIN is provided to the Depositary.
12. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or
requests for assistance or additional copies of the Purchase Offer or this
Letter of Transmittal may be directed to the Information Agent at its
telephone number set forth on the last page hereof. A Holder may also contact
the Dealer Manager at its telephone number set forth below or such Holder's
broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
13. WAIVER OF CONDITIONS. The Company expressly reserves the
absolute right, in its sole discretion, to waive any of the conditions to the
Offer or the Solicitation in the case of any LYONs tendered and Consents
delivered, in whole or in part, at any time and from time to time.
12
IMPORTANT TAX INFORMATION
Under U.S. federal income tax law, a Holder whose tendered LYONs are
accepted for payment is required to provide the Depositary with such Holder's
current TIN on Substitute Form W-9 below, or, alternatively, to establish
another basis for an exemption from backup withholding. If such Holder is an
individual, the TIN is his or her Social Security number. If the Depositary
is not provided with the correct TIN, the Holder or other payee may be
subject to a $50 penalty imposed by the Internal Revenue Service. In
addition, any payment made to such Holder or other payee with respect to
LYONs purchased pursuant to the Offer may be subject to 31% backup
withholding tax.
Certain Holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that Holder must submit to the Depositary a properly
completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under
penalties of perjury, attesting to that individual's exempt status. A Form W-
8 can be obtained from the Depositary. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions.
If backup withholding applies, the Depositary is required to withhold
31% of any payment made to the Holder or other payee. Backup withholding is
not an additional tax. Rather, the federal income tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld.
If withholding results in an overpayment of taxes, a refund may be obtained
from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on any payment made to a Holder or other
payee with respect to LYONs purchased pursuant to the Offer, the Holder is
required to notify the Depositary of the Holder's current TIN (or the TIN of
any other payee) by completing the form below, certifying that the TIN
provided on Substitute Form W-9 is correct (or that such Holder is awaiting
a TIN), and that (i) the Holder is exempt from backup withholding, (ii) the
Holder has not been notified by the Internal Revenue Service that the Holder
is subject to backup withholding as a result of failure to report all
interest or dividends or (iii) the Internal Revenue Service has notified the
Holder that the Holder is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Holder is required to give the Depositary the TIN (e.g., Social
Security number or Employer Identification Number) of the record owner of the
LYONs. If the LYONs are registered in more than one name or are not
registered in the name of the actual owner, consult the enclosed "Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9"
for additional guidance on which number to report.
13
<TABLE>
<S><C>
- ------------------------------------------------------------------------------------------
PAYER'S NAME: SHONEY'S, INC.
- ------------------------------------------------------------------------------------------
SUBSTITUTE Part 1--PLEASE PROVIDE YOUR TIN IN ________________________
Form W-9 THE BOX AT RIGHT AND CERTIFY BY Social Security Number
SIGNING AND DATING BELOW.
OR
Department of the
Treasury ________________________
Internal Revenue Service Employer
Identification Number(s)
Part 2--Certification--Under Part 3--
of Perjury, I certify that: [ ] Awaiting TIN
(1) The number shown on this
form is my correct taxpayer
identification number (or I
am waiting for a number to be
used for me), and
Payer's Request for (2) I am not subject to backup
Taxpayer Identification withholding because: (a) I am
Number ("TIN") and exempt from backup withholding,
Certifications or (b) I have not been notified
by the Internal Revenue Service
(IRS) that I am subject to backup
withholding as a result of a
failure to report all interest and
dividends, or (c) the IRS has
notified me that I am no longer
subject to backup withholding.
Certification Instructions--You must cross out item (2) above
if you have been notified by the IRS that you are currently
subject to backup withholding because of underreporting
interest or dividends on your tax return.
Name___________________________________________________________
Address________________________________________________________
(include zip code)
Signature__________________________Date________________________
- ------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE INTERNAL REVENUE SERVICE AND BACKUP WITHHOLDING OF 31% OF
ANY CASH PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER
ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF THE SUBSTITUTE FORM W-9.
<TABLE>
<S><C>
- -----------------------------------------------------------------------------
CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (1) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration office or (2)
I intend to mail or deliver an application in the near future. I understand
that if I do not provide a taxpayer identification number by the time of
payment, 31% of all reportable cash payments made to me thereafter will be
withheld until I provide a taxpayer identification number to the payer and
that, if I do not provide my taxpayer identification number within sixty days,
such retained amounts shall be remitted to the IRS as backup withholding.
Signature_____________________________________________Date__________________
- -----------------------------------------------------------------------------
</TABLE>
14
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR FACSIMILE THEREOF), PROPERLY
COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES
AND CERTIFICATES RELATING TO THE LYONS OR CONFIRMATION OF BOOK-ENTRY TRANSFER
AND ALL OTHER REQUIRED DOCUMENTS) MUST BE RECEIVED BY THE DEPOSITARY ON OR
PRIOR TO THE EXPIRATION DATE FOR HOLDERS WISHING TO TENDER THEIR LYONS.
THE CONSENT SOLICITATION WITH RESPECT TO THE LYONS WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON THE 10TH CALENDAR DAY AFTER THE LYONS CONSENT
SOLICITATION MATERIALS RECEIVE REGULATORY CLEARANCE AND ARE MAILED IN
DEFINITIVE FORM TO REGISTERED HOLDERS OF THE LYONS, UNLESS EXTENDED (SUCH
TIME AND DATE, AS IT MAY BE EXTENDED, THE "LYONS CONSENT DEADLINE"). IN
ORDER TO RECEIVE THE CONSENT PAYMENT, HOLDERS OF LYONS MUST TENDER THEIR
LYONS AND PROVIDE THEIR CONSENTS TO THE PROPOSED AMENDMENTS (AND NOT HAVE
REVOKED SUCH CONSENTS) AT OR PRIOR TO THE LYONS CONSENT DEADLINE. HOLDERS OF
LYONS WILL NOT BE ABLE TO CONSENT TO THE PROPOSED AMENDMENTS TO THE LYONS
INDENTURE UNTIL THE LYONS CONSENT SOLICITATION MATERIALS RECEIVE REGULATORY
CLEARANCE AND ARE MAILED IN DEFINITIVE FORM TO SUCH HOLDERS, WHICH IS
EXPECTED TO OCCUR ON OR SHORTLY AFTER APRIL 6, 2000.
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
BY MAIL, OVERNIGHT COURIER OR HAND:
101 Barclay Street
Floor 7 East
New York, New York 10286
Attn: Reorganization Section, Kin Lau
By Facsimile for Eligible Institutions: (212) 815-6339
To Confirm by Telephone: (212) 815-3750
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Bankers and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: (888) 242-8157
THE DEALER MANAGER FOR THE OFFER IS:
BANC OF AMERICA SECURITIES LLC
100 North Tryon Street, 7th Floor
Charlotte, North Carolina 28255
Attn: High Yield Special Products
Collect: (704) 388-4813
Toll Free: (888) 292-0070
15
LETTER OF TRANSMITTAL AND CONSENT
To Tender and to Consent in Respect
of
Liquid Yield Option Notes Due 2004 (Zero Coupon - Subordinated)
CUSIP N0. 825039 AC 4
of
SHONEY'S, INC.
Pursuant to the Purchase Offer and Consent Solicitation Statement
dated March 27, 2000
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
BY MAIL, OVERNIGHT COURIER OR HAND:
101 Barclay Street
Floor 7 East
New York, New York 10286
Attn: Reorganization Section, Kin Lau
By Facsimile for Eligible Institutions: (212) 815-6339
To Confirm by Telephone: (212) 815-3750
- -----------------------------------------------------------------------------
THIS OFFER WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON APRIL 24, 2000,
UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE "EXPIRATION
DATE"). HOLDERS OF LYONS MUST TENDER THEIR LYONS ON OR PRIOR TO THE
EXPIRATION DATE TO RECEIVE THE TENDER OFFER CONSIDERATION. THE CONSENT
SOLICITATION WITH RESPECT TO THE LYONS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON _________, 2000, UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY
BE EXTENDED, THE "LYONS CONSENT DEADLINE"). TO RECEIVE A CONSENT PAYMENT,
HOLDERS OF LYONS MUST TENDER THEIR LYONS AND PROVIDE THEIR CONSENTS TO THE
PROPOSED AMENDMENTS (AND NOT HAVE REVOKED SUCH CONSENTS) AT OR PRIOR TO THE
LYONS CONSENT DEADLINE.
- -----------------------------------------------------------------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL AND CONSENT TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA A FAX NUMBER
OTHER THAN AS LISTED ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
CAPITALIZED TERMS USED HEREIN AND NOT DEFINED SHALL HAVE THE MEANING
ASCRIBED TO THEM IN THE PURCHASE OFFER AND CONSENT SOLICITATION STATEMENT.
By execution hereof, the undersigned acknowledges receipt of the
Purchase Offer and Consent Solicitation Statement dated March 27, 2000 (as
the same may be amended from time to time, the "Purchase Offer") of Shoney's,
Inc., a Tennessee corporation (the "Company"), and this Letter of Transmittal
and Consent and instructions thereto (the "Letter of Transmittal and
Consent"), which together constitute (i) the offer to purchase (the "Offer")
by the Company for all of its outstanding Liquid Yield Option Notes due 2004
(Zero Coupon - Subordinated) (the "LYONs"), upon the terms and subject to the
conditions set forth in the Purchase Offer, and (ii) the Company's
solicitation (the "Solicitation") of consents (the
"Consents") from holders of the LYONs (each, a "Holder" and, collectively,
the "Holders") to certain proposed amendments described in the Purchase Offer
(the "Proposed Amendments") to the Indenture dated as of April 1, 1989,
between the Company and The Bank of New York, as successor to Sovran
Bank/Central South, as trustee (the "Trustee"), pursuant to which the LYONs
were issued (the "Indenture"). Holders who tender LYONs pursuant to the
Offer after the first distribution of definitive consent solicitation
material for the LYONs are obligated to consent to the Proposed Amendments.
The Offer is conditioned on, among other things, the receipt of the
requisite number of Consents at or prior to 11:59 P.M., New York City time,
on the Expiration Date and such Consents having not been revoked as more
fully described in the Purchase Offer under the caption "The Tender Offers
and Consent Solicitations -Terms and -Conditions." The Company reserves the
right to waive any one or more of the conditions to the Offer. A First
Supplemental Indenture will be executed upon the satisfaction of the Consent
Condition and, upon such execution, the First Supplemental Indenture will
become effective. The First Supplemental Indenture will provide that the
Proposed Amendments will not become operative unless and until validly
tendered LYONs are purchased pursuant to the Offer. If the Offer is
terminated or withdrawn, or if no LYONs are purchased pursuant to the Offer
for any reason, then the Proposed Amendments contained in the Supplemental
Indenture will not become operative. The Purchase Offer enclosed herewith
contains a more complete description of the Offer and related solicitation of
Consents and the conditions thereof.
THE INSTRUCTIONS CONTAINED HEREIN AND IN THE PURCHASE OFFER (AS DEFINED
BELOW) SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND CONSENT
IS COMPLETED.
This Letter of Transmittal and Consent is to be completed by a Holder if
(i) certificates representing LYONs are to be physically delivered to the
Depositary herewith by such Holder or (ii) tender of LYONs is to be made by
book-entry transfer to the Depositary's account at DTC pursuant to the
procedures set forth under the caption "The Tender Offers and Consent
Solicitations-Book-Entry Delivery of the Notes" and instructions are not
being transmitted through the DTC Automated Tender Offer Program ("ATOP").
Holders of LYONs who are tendering by book-entry transfer to the
Depositary's account at DTC can execute their tender through ATOP. DTC
participants that are accepting the Offer may transmit their acceptance to
DTC, which will verify the acceptance and execute a book-entry delivery to
the Depositary's account at DTC. DTC will then send an Agent's Message to the
Depositary for its acceptance. Delivery of the Agent's Message by DTC will
satisfy the terms of the Offer in lieu of execution and delivery of a Letter
of Transmittal and Consent by the participant identified in the Agent's
Message. Accordingly, this Letter of Transmittal and Consent need not be
completed by a Holder tendering through ATOP.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
Your bank or broker can assist you in completing this form. The
instructions included with this Letter of Transmittal and Consent must be
followed. Questions and requests for assistance or for additional copies of
the Purchase Offer, this Letter of Transmittal and Consent and the Notice of
Guaranteed Delivery and Consent may be directed to the Information Agent.
See Instruction 12 below.
2
- ----------------------------------------------------------------------------
TENDER OF LYONs AND CONSENT TO AMENDMENTS
- -----------------------------------------------------------------------------
[ ] CHECK HERE IF CERTIFICATES REPRESENTING TENDERED LYONs ARE ENCLOSED
HEREWITH.
[ ] CHECK HERE IF TENDERED LYONs ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH DTC
AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution:______________________________________________
Account Number:_____________________________________________________________
Transaction Code Number:____________________________________________________
[ ] CHECK HERE IF TENDERED LYONS ARE BEING DELIVERED PURSUANT TO A NOTICE
OF GUARANTEED DELIVERY AND CONSENT PREVIOUSLY DELIVERED TO THE
DEPOSITARY AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s):_______________________________________________
Window Ticket No. (if any):_________________________________________________
Date of Execution of Notice of Guaranteed Delivery and Consent:_____________
Name of Eligible Institution that Guaranteed Delivery:______________________
If Delivered by Book-Entry Transfer:
Name of Tendering Institution:_________________________________________
Account Number with DTC:_______________________________________________
Transaction Code Number:_______________________________________________
- -----------------------------------------------------------------------------
HOLDERS WHO TENDER LYONS IN THE OFFER AFTER THE FIRST DISTRIBUTION OF
DEFINITIVE CONSENT SOLICITATION MATERIAL FOR THE LYONS ARE OBLIGATED TO
CONSENT TO THE PROPOSED AMENDMENTS. DELIVERY OF LYONS BY BOOK-ENTRY TRANSFER
OR PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND CONSENT WILL BE DEEMED TO
CONSTITUTE A CONSENT TO THE PROPOSED AMENDMENTS WITH RESPECT TO SUCH LYONS
TENDERED.
3
List below the LYONs to which this Letter of Transmittal and Consent
relates. If the space provided is inadequate, list the certificate numbers
and principal amounts at maturity on a separately executed schedule and affix
the schedule to this Letter of Transmittal and Consent. Tenders of LYONs
will be accepted only in principal amounts at maturity equal to $1,000 or
integral multiples thereof. No alternative, conditional or contingent tenders
will be accepted.
<TABLE>
<S><C>
- -------------------------------------------------------------------------------------------------------
DESCRIPTION OF LYONs
- -------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT
AT MATURITY
TENDERED PRIOR TO
THE FIRST
DISTRIBUTION OF
NAME(S) AND ADDRESS(ES) OF DEFINITIVE CONSENT
REGISTERED HOLDER(S) OR NAME PRINCIPAL AMOUNT SOLICITATION
OF DTC PARTICIPANT AND AGGREGATE AT MATURITY MATERIAL FOR
PARTICIPANT'S DTC ACCOUNT PRINCIPAL TENDERED AND AS TO LYONS FOR WHICH
NUMBER IN WHICH LYONS ARE HELD CERTIFICATE AMOUNT AT MATURITY WHICH CONSENTS ARE CONSENTS ARE TO BE
(PLEASE FILL IN BLANK) NUMBER(S)* REPRESENTED GIVEN** GIVEN
- ------------------------------ ----------- ------------------ ------------------- ------------------
- -------------------------------------------------------------------------------------------------
TOTAL PRINCIPAL AMOUNT AT MATURITY OF LYONs
- -------------------------------------------------------------------------------------------------
* Need not be completed by Holders tendering by book-entry transfer.
- -------------------------------------------------------------------------------------------------
** Unless otherwise specified, it will be assumed that the entire aggregate principal amount at
maturity represented by the LYONs described above is being tendered and a Consent with respect
thereto will be given. A Holder tendering LYONs after the first distribution of definitive
consent solicitation material for the LYONs is required to Consent to the Proposed Amendments
with respect to all LYONs tendered by such Holder except for LYONs tendered prior to the first
distribution of definitive consent solicitation material for the LYONs
- -------------------------------------------------------------------------------------------------
</TABLE>
The names and addresses of the registered Holders should be printed, if
not already printed above, exactly as they appear on the certificates
representing LYONs tendered hereby.
4
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Shoney's, Inc. (the "Company"), upon the
terms and subject to the conditions set forth in its Purchase Offer and Consent
Solicitation Statement dated March 27, 2000 (the "Purchase Offer"), receipt of
which is hereby acknowledged, and in accordance with this Letter of Transmittal
and Consent, the principal amount at maturity of LYONs indicated in the table
above entitled "Description of LYONs" under the column heading "Principal
Amount at Maturity Tendered and as to which Consents are Given" or delivers
consents with respect to the principal amount at maturity of LYONs indicated
in the table above entitled "Description of LYONs" under the column heading
"Principal Amount at Maturity Tendered Prior to the First Distribution of
Definitive Consent Solicitation Material For LYONs and as to which Consents
are Given" (or, if nothing is indicated therein, tenders and delivers consents
with respect to the entire aggregate principal amount at maturity represented
by the LYONs described in such table) and consents to the Proposed Amendments
with respect thereto. The undersigned acknowledges and agrees that the tender
of LYONs made hereby may not be withdrawn, nor may the Consent made hereby be
revoked, except in accordance with the procedures set forth in the Purchase
Offer. Terms used herein and not defined herein shall have the meanings
ascribed to them in the Purchase Offer.
Subject to, and effective upon, the acceptance for purchase of, and
payment for, the principal amount at maturity of LYONs tendered herewith in
accordance with the terms and subject to the conditions of the Offer, the
undersigned hereby sells, assigns and transfers to, or upon the order of, the
Company, all right, title and interest in and to all of the LYONs tendered
hereby. The undersigned hereby irrevocably constitutes and appoints the
Depositary the true and lawful agent and attorney-in-fact of the undersigned
(with full knowledge that the Depositary also acts as the agent of the Company)
with respect to such LYONs, with full powers of substitution and revocation
(such power of attorney being deemed to be an irrevocable power coupled with
an interest), to (i) present such LYONs and all evidences of transfer and
authenticity to, or transfer ownership of such LYONs on the account books
maintained by DTC to, or upon the order of, the Company, (ii) present such
LYONs for transfer of ownership on the books of the Company, (iii) receive all
benefits and otherwise exercise all rights of beneficial ownership of such
LYONs, and (iv) deliver to the Company and the Trustee this Letter of
Transmittal and Consent as evidence of the undersigned's consent to the
Proposed Amendments and as certification that the Consent Condition has been
satisfied, all in accordance with the terms and conditions of the Offer as
described in the Purchase Offer.
The undersigned acknowledges and agrees that, by the execution and
delivery hereof, the undersigned is consenting to the Proposed Amendments
(with respect to the principal amount at maturity of LYONs tendered hereby or
tendered prior to the first distribution of definitive consent solicitation
material for the LYONs and for which consents are being given hereby) as
permitted by the Indenture relating to the LYONs and hereby also consents to
the execution of the Supplemental Indenture effecting such Proposed
Amendments. The undersigned acknowledges and agrees that the Consent provided
hereby shall remain in full force and effect unless and until such Consent is
revoked in accordance with the procedures set forth in the Purchase Offer and
that after the Trustee receives notice from the Company of satisfaction of
the Consent Condition in accordance with the Indenture and the Supplemental
Indenture is executed, such Consent may not be revoked (and agrees that it
will not attempt to do so).
If the undersigned is not the registered Holder of the LYONs listed in
the box above labeled "Description of LYONS" under the column heading
"Principal Amount at Maturity Tendered and as to which Consents are Given" or
under the column heading "Principal Amount at Maturity Tendered Prior to the
First Distribution of Definitive Consent Solicitation Material for LYONs and
as to which Consents are Given" (or, if nothing is indicated in such columns,
with respect to the entire aggregate principal amount at maturity represented
by the LYONs described in such table), such registered Holder's legal
representative or attorney-in-fact, then in order to validly consent, the
undersigned has obtained a properly completed irrevocable proxy that
authorizes the undersigned (or the undersigned's legal representative or
attorney-in-fact) to deliver a Consent in respect of such LYONs on behalf of
the Holder thereof, and such proxy is being delivered with this Letter of
Transmittal and Consent.
The undersigned acknowledges and agrees that a tender of LYONs pursuant
to any of the procedures described in the Purchase Offer and in the
instructions hereto and an acceptance of such LYONs by the Company will
constitute a binding
5
agreement between the undersigned and the Company upon the terms and subject
to the conditions of the Offer. For purposes of the Offer, the undersigned
understands that validly tendered LYONs (or defectively tendered LYONs with
respect to which the Company has, or has caused to be, waived such defect)
will be deemed to have been accepted if, as and when the Company gives oral
or written notice thereof to the Depositary. For purposes of the
Solicitation, Consents received by the Depositary will be deemed to have been
accepted if, as and when the Company gives written notice to the Trustee of
the receipt by the Depositary of at least a majority in aggregate principal
amount at Maturity of the LYONs and a Supplemental Indenture is executed.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the LYONs
tendered hereby and that when such tendered LYONs are accepted for purchase
and payment by the Company, the Company will acquire good title thereto, free
and clear of all liens, restrictions, charges and encumbrances and not
subject to any adverse claim or right. The undersigned will, upon request,
execute and deliver any additional documents deemed by the Depositary or by
the Company to be necessary or desirable to complete the sale, assignment and
transfer of the LYONs tendered hereby, to perfect the undersigned's Consent
to the Proposed Amendments or to complete the execution of the Supplemental
Indenture.
All authority conferred or agreed to be conferred by this Letter of
Transmittal and Consent shall not be affected by, and shall survive, the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, executors, administrators,
trustees in bankruptcy, personal and legal representatives, successors and
assigns of the undersigned.
The undersigned understands that, under certain circumstances and
subject to the certain conditions of the Offer (each of which the Company may
waive) set forth in the Purchase Offer, the Company may not be required to
accept for purchase any of the LYONs tendered (including any LYONs tendered
after the Expiration Date). Any LYONs not accepted for purchase will be
returned promptly to the undersigned at the address set forth above unless
otherwise indicated under "A. Special Issuance/Delivery Instructions" below.
The undersigned understands that the delivery and surrender of the LYONs
is not effective, and the risk of loss of the LYONs does not pass to the
Depositary, until receipt by the Depositary of this Letter of Transmittal and
Consent, or a facsimile hereof, properly completed and duly executed,
together with all accompanying evidences of authority and any other required
documents in form satisfactory to the Company. All questions as to the form
of all documents and the validity (including time of receipt) and acceptance
of tenders and withdrawals of LYONs and deliveries and revocations of
Consents will be determined by the Company, in its sole discretion, which
determination shall be final and binding.
Unless otherwise indicated herein under "A. Special Issuance/Delivery
Instructions," the undersigned hereby request(s) that any LYONs representing
principal amounts at maturity not tendered or not accepted for purchase be
issued in the name(s) of, and delivered to, the undersigned (and in the case
of LYONs tendered by book-entry transfer, by credit to the account of DTC).
Unless otherwise indicated herein under "B. Special Payment Instructions,"
the undersigned hereby request(s) that any checks for payment to be made in
respect of the LYONs tendered hereby in connection with the Offer be issued
to the order of, and delivered to, the undersigned.
In the event that the "A. Special Issuance/Delivery Instructions" box is
completed, the undersigned hereby request(s) that any LYONs representing
principal amounts at maturity not tendered or not accepted for purchase be
issued in the name(s) of, and be delivered to, the person(s) at the
address(es) therein indicated. The undersigned recognizes that the Company
has no obligation pursuant to the "A. Special Issuance/Delivery Instructions"
box to transfer any LYONs from the names of the registered holder(s) thereof
if the Company does not accept for purchase any of the principal amount at
maturity of such LYONs so tendered. In the event that the "B. Special Payment
Instructions" box is completed, the undersigned hereby request(s) that
payment to be made in respect of the LYONs tendered hereby be issued in the
name(s) of, and be delivered to, the person(s) at the address(es) therein
indicated.
6
<TABLE>
<S><C>
- ------------------------------------------------- -----------------------------------------------
[ A. SPECIAL ISSUANCE/DELIVERY ] [ B. SPECIAL PAYMENT ]
[ INSTRUCTIONS ] [ INSTRUCTIONS ]
[ (See Instructions 3, 4, 7 and 9) ] [ (See Instruction 9) ]
[_____________________________________________ ] [____________________________________________ ]
[ To be completed ONLY if LYONs in a principal ] [To be completed ONLY if payment is to be ]
[ amount at maturity not tendered or not ] [made in the name of someone other than the ]
[ accepted for purchase are to be issued in the ] [person(s) whose signature(s) appears within ]
[ name of someone other than the person(s) whose] [this Letter of Transmittal and Consent or ]
[ signature(s) appear(s) within this Letter of ] [sent to an address different from that shown ]
[ Transmittal and Consent or sent to an address ] [in the box entitled "Description of LYONs" ]
[ different from that shown in the box entitled ] [within this Letter of Transmittal and Consent.]
[ "Description of LYONs " within this Letter of ] [ ]
[ Transmittal and Consent, or if LYONs tendered ] [ Name_______________________________________ ]
[ by book-entry transfer that are not accepted ] [ (Please Print) ]
[ for purchase are to be credited to an account ] [ ]
[ maintained at DTC other than the one ] [ Address____________________________________ ]
[ designated above. ] [ ]
[ ] [ ]
[ ] [ ___________________________________________ ]
[ Name________________________________________ ] [ (Zip Code) ]
[ (Please Print) ] [ ]
[ ] [ ___________________________________________ ]
[ Address_____________________________________ ] [ (Tax Identification or Social ]
[ ] [ Security Number) ]
[ ____________________________________________ ] [ ]
[ (Zip Code) ] [ ___________________________________________ ]
[ ] [ (See Substitute Form W-9 herein ]
[ ____________________________________________ ] [ ]
[(Tax Identification or Social Security Number) ] [ ]
[ (See Substitute Form W-9 herein) ] ------------------------------------------------
[ ]
[ Credit unpurchased LYONs by book-entry ]
[ transfer to the DTC account set forth below: ]
[ ]
[ ____________________________________________ ]
[ PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN ]
[ ]
[ ]
[ SIGNATURE GUARANTEE (See Instruction 3 below) ]
[ Certain Signatures Must be Guaranteed by a ]
[ Medallion Signature Guarantor. ]
[ ]
[ ]
[ ____________________________________________ ]
[ (Name of Medallion Signature Guarantor) ]
[ ]
[ ____________________________________________ ]
[ ]
[ ____________________________________________ ]
[ ]
[ ____________________________________________ ]
[ (Address, including Zip Code, and Telephone ]
[ Number, including Area Code, of Firm) ]
[ ]
[ ____________________________________________ ]
[ (Authorized Signature) ]
[ ]
[ ____________________________________________ ]
[ (Printed Name) ]
- ------------------------------------------------
</TABLE>
7
- -----------------------------------------------------------------------------
PLEASE SIGN HERE
(To be completed by all tendering Holders of LYONs regardless of whether
LYONs are being physically delivered herewith, unless an Agent's
Message is delivered in connection with a book-entry transfer of such LYONs)
By completing, executing and delivering this Letter of Transmittal and
Consent, the undersigned hereby tenders, and consents to the Proposed
Amendments (and to execution of the Supplemental Indenture effecting the
Proposed Amendments) with respect to the principal amount at maturity of the
LYONs listed in the box above labeled "Description of LYONs " under the
column heading "Principal Amount at Maturity Tendered and as to which
Consents are Given" or under the column heading "Principal Amount at Maturity
Tendered Prior to the First Distribution of Definitive Consent Solicitation
Material for LYONs and as to which Consents are Given" (or, if nothing is
indicated in such columns, with respect to the entire aggregate principal
amount at maturity represented by the LYONs described in such box).
This Letter of Transmittal and Consent must be signed by the registered
Holder(s) exactly as the name(s) appear(s) on certificate(s) representing
LYONs or, if tendered by a participant in DTC, exactly as such participant's
name appears on a security position listing as the owner of such LYONs. If
signature is by trustees, executors, administrators, guardians, attorneys-in-
fact, officers of corporations or other acting in a fiduciary or
representative capacity, please set forth the full title and see Instruction
4.
___________________________________________________________________________
___________________________________________________________________________
Signature(s) of Registered Holder(s) or Authorized Signatory
(See guarantee requirement below)
Dated______________________________________________________________________
Name(s)____________________________________________________________________
(Please Print)
Capacity___________________________________________________________________
Address____________________________________________________________________
(Zip Code)
Area Code and
Telephone
Number_____________________________________________________________________
Tax Identification or
Social Security
No.________________________________________________________________________
COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9
Medallion Signature Guarantee
(If Required--See Instructions 1 and 3)
Authorized
Signature__________________________________________________________________
Print Name and Title_______________________________________________________
Name of
Firm ______________________________________________________________________
[Place Seal Here]
Address (including zip code) and
Telephone Number (including area code)_____________________________________
Dated______________________________________________________________________
- -----------------------------------------------------------------------------
8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CONSENT AND LYONS OR
BOOK-ENTRY CONFIRMATIONS; GUARANTEED DELIVERY PROCEDURES; WITHDRAWAL OF
TENDER. To tender LYONs in the Offer and to deliver Consents in the
Solicitation, physical delivery of the LYONs or a confirmation of any book-
entry transfer into the Depositary's account with DTC of LYONs tendered
electronically, as well as a properly completed and duly executed copy (or
facsimile) of this Letter of Transmittal and Consent with any required
signature guarantees (or Agent's Message (as defined below) in connection
with a book-entry transfer), and any other documents required by this Letter
of Transmittal and Consent, must be received by the Depositary at its address
set forth herein at or prior to 11:59 P.M., New York City time, on the
Expiration Date; provided, however, that no Consent Payment will be paid to
Holders who deliver their Consents after the LYONs Consent Deadline. The
method of delivery of this Letter of Transmittal and Consent, LYONs and all
other required documents to the Depositary is at the election and risk of the
tendering Holders. If such delivery is by mail, it is suggested that Holders
use properly insured registered mail, return receipt requested, and that the
mailing be made sufficiently in advance of the Expiration Date or the LYONs
Consent Deadline, as the case may be, to permit delivery to the Depositary at
or prior to such time. Except as otherwise provided below, the delivery will
be deemed made when actually received or confirmed by the Depositary. This
Letter of Transmittal and Consent and LYONs should be sent only to the
Depositary and not to the Company, the Trustee, the Dealer Manager or the
Information Agent.
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Depositary and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgement from the
participant in DTC tendering the LYONs, that such participant has received
and agrees to be bound by the terms of this Letter of Transmittal and Consent
and the Company may enforce such agreement against the participant.
If, after the LYONs Consent Deadline and prior to the Expiration Date,
Holders desire to tender LYONs pursuant to the Offer and (i) such LYONs are
not lost, but are not immediately available, (ii) time will not permit this
Letter of Transmittal and Consent, such LYONs or other required documents to
reach the Depositary at or prior to 11:59 P.M., New York City time, on the
Expiration Date or (iii) the procedures for book-entry transfer cannot be
completed at or prior to 11:59 P.M., New York City time, on the Expiration
Date, such Holders may effect a tender of such LYONs and delivery of Consents
to the Proposed Amendments in accordance with the guaranteed delivery
procedures set forth in the Purchase Offer under the caption "The Tender
Offers and the Consent Solicitations--Guaranteed Delivery."
Pursuant to the guaranteed delivery procedures:
(a) such tender must be made by or through an Eligible Institution
(defined as an institution that is a member of a national securities exchange
or the National Association of Securities Dealers, Inc. or is a commercial
bank or trust company having an office in the United States);
(b) at or prior to 11:59 P.M., New York City time, on the Expiration
Date, the Depositary must have received from such Eligible Institution, at
the address of the Depositary set forth herein, a properly completed and duly
executed Notice of Guaranteed Delivery and Consent (by mail, hand delivery or
facsimile), substantially in the form provided by the Company, setting forth
the name(s) and address(es) of the Holder(s), a description of the LYONs and
the principal amount of LYONs being tendered and with respect to which a
Consent is being delivered and stating that the tender is being made thereby
and guaranteeing that, within three New York Stock Exchange trading days
after the date of the Notice of Guaranteed Delivery and Consent, a properly
completed and duly executed Letter of Transmittal and Consent, or a facsimile
thereof, with any required signature guarantees, or an Agent's Message,
together with the LYONs (or confirmation of book-entry transfer of such LYONs
into the Depositary's account with DTC as described above) and any other
documents required by this Letter of Transmittal and Consent and the
instructions hereto will be deposited by such Eligible Institution with the
Depositary; and
(c) this Letter of Transmittal and Consent, or facsimile hereof,
properly completed and duly executed, with any required signature guarantees,
or an Agent's Message, and all physically delivered LYONs in proper form (or
confirmation of book-entry transfer of such LYONs into the Depositary's
account with DTC as described above, including an Agent's Message in
connection therewith) and all other required documents must be received by
the Depositary within three New York Stock Exchange trading days after the
date of the Notice of Guaranteed Delivery and Consent.
9
HOLDERS SHOULD NOTE THAT THE FOREGOING PROCEDURES ARE NOT AVAILABLE
UNTIL AFTER THE LYONS CONSENT DEADLINE AND THAT TENDERS PURSUANT TO THE
GUARANTEED DELIVERY PROCEDURES WILL NOT BE ACCEPTED PRIOR TO THAT TIME OR
ENTITLE A HOLDER TO RECEIVE A CONSENT PAYMENT.
Tenders of LYONs may be withdrawn at any time prior to the Expiration
Date and unless accepted by the Company, any time after 40 business days
after the date of the Purchase Offer, by written notice of withdrawal
received by the Depositary, delivery by mail or facsimile, which notice must
be received by the Depositary at its address set forth herein at or prior to
11:59 P.M., New York City time, on the Expiration Date. To be effective,
notice of withdrawal of tendered LYONs must (i) be received by the Depositary
at or prior to 11:59 P.M., New York City time, on the Expiration Date at its
address set forth herein, (ii) describe the LYONs to be withdrawn, (iii)
specify the name of the person who deposited the LYONs to be withdrawn (the
"Depositor"), the name in which the LYONs are registered (or, if tendered by
book entry transfer, the name of the participant in DTC whose name appears on
a security position listing as the owner of such LYONs) if different from
that of the Depositor, (iv) state the principal amount of LYONs to be
withdrawn, (v) contain the certificate numbers shown on the LYONs, and (vi)
be signed by the Holder in the same manner as the original signature on this
Letter of Transmittal and Consent (including any required signature
guarantee(s)) or be accompanied by evidence satisfactory to the Company that
the person withdrawing the tender has succeeded to be beneficial ownership of
the LYONs. If LYONs have been delivered or otherwise identified (through
confirmation of book-entry transfer of such LYONs) to the Depositary, the
name of the Holder and the LYONs withdrawn must also be furnished to the
Depositary as aforesaid prior to the physical release of the withdrawn LYONs
(or, in the case of LYONs transferred by book-entry transfer, the name and
number of the account at DTC to be credited with withdrawn LYONs).
2. CONSENT TO PROPOSED AMENDMENTS; REVOCATION OF CONSENTS. In
accordance with the Purchase Offer, all properly completed and executed
Letters of Transmittal and Consents consenting to the Proposed Amendments
that are received by the Depositary at or prior to 5:00 P.M., New York City
time, on the LYONs Consent Deadline will be counted as Consents with respect
to the Proposed Amendments unless the Depositary receives, prior to execution
of the Supplemental Indenture, a written notice of revocation of such
Consents as described in the Purchase Offer. To revoke a consent, a Holder
must withdraw the corresponding tendered LYONs in the manner set forth above.
3. SIGNATURE GUARANTEES. No signature guarantee is required if: (i)
this Letter of Transmittal and Consent is signed by the registered holder(s)
of the LYONs tendered herewith (or by a participant in DTC whose name appears
on a security position listing as the owner of LYONs) and the payments for
the LYONs to be purchased and Consent Payments to be made, or any LYONs for
principal amounts not tendered or not accepted for purchase are to be issued,
directly to such registered holder(s), (or, if signed by a participant in
DTC, and LYONs for principal amounts not tendered or not accepted for
purchase are to be credited to such participant's account at DTC) and the
"Special Issuance/Delivery Instructions" box of this Letter of Transmittal
and Consent has not been completed; or (ii) such LYONs are tendered for the
account of an Eligible Institution. In all other cases, all signatures on
Letters of Transmittal and Consents accompanying LYONs must be guaranteed by
a Medallion Signature Guarantor (defined as a recognized participant in the
Securities Transfer Agents Medallion Program).
4. SIGNATURES ON LETTER OF TRANSMITTAL AND CONSENT, INSTRUMENTS OF
TRANSFER AND ENDORSEMENTS. If this Letter of Transmittal and Consent is
signed by the registered Holders of the LYONs tendered hereby, the signatures
must correspond with the name(s) as written on the face of the certificate(s)
without alteration, enlargement or any change whatsoever. If this Letter of
Transmittal and Consent is signed by a participant in DTC whose name is shown
on a security position listing as the owner of the LYONs tendered hereby, the
signature must correspond with the name shown on the security position
listing as the owner of such LYONs.
If any of the LYONs tendered hereby are registered in the name of two or
more Holders, all such Holders must sign this Letter of Transmittal and
Consent. If any of the LYONs tendered hereby are registered in different
names on several certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal as there are different
registrations of certificates.
If this Letter of Transmittal and Consent or any LYONs or instrument of
transfer is signed by a trustee, executor, administrator, guardian, attorney-
in-fact, agent, officer of a corporation or other person acting in a
fiduciary or representative capacity, such person should so indicate when
signing, and proper evidence satisfactory to the Company of such person's
authority to so act must be submitted.
10
When this Letter of Transmittal and Consent is signed by the registered
Holders of the LYONs tendered hereby, no endorsements of LYONs or separate
instruments of transfer are required unless payment is to be made, or LYONs
not tendered or purchased are to be issued, to a person other than the
registered Holders, in which case signatures on such LYONs or instruments of
transfer must be guaranteed by a Medallion Signature Guarantor.
IF THIS LETTER OF TRANSMITTAL AND CONSENT IS SIGNED OTHER THAN BY THE
REGISTERED HOLDERS OF THE LYONS TENDERED HEREBY, SUCH LYONS MUST BE ENDORSED
OR ACCOMPANIED BY APPROPRIATE INSTRUMENTS OF TRANSFER, AND A DULY COMPLETED
PROXY ENTITLING THE SIGNER TO CONSENT WITH RESPECT TO SUCH LYONS ON BEHALF OF
SUCH REGISTERED HOLDERS, IN ANY CASE SIGNED EXACTLY AS THE NAME OR NAMES OF
THE REGISTERED HOLDERS APPEAR ON THE LYONS AND SIGNATURES ON SUCH LYONS OR
INSTRUMENTS OF TRANSFER ARE REQUIRED AND MUST BE GUARANTEED BY A MEDALLION
SIGNATURE GUARANTOR, UNLESS THE SIGNATURE IS THAT OF AN ELIGIBLE INSTITUTION.
5. DELIVERY OF LETTER OF TRANSMITTAL AND CONSENT AND LYONS
CERTIFICATES. This Letter of Transmittal and Consent is to be used if (i)
certificates evidencing LYONs are to be forwarded herewith or (ii) LYONs are
to be delivered by book-entry transfer pursuant to the procedure set forth
under the caption "The Tender Offers and Consent Solicitations-Book-Entry
Delivery of the Notes." Certificates evidencing all physically tendered
LYONs, or a confirmation of a book-entry transfer into the Depositary's
account at DTC of all LYONs delivered by book-entry transfer as well as a
properly completed and duly executed Letter of Transmittal and Consent (or
facsimile thereof) with any required signature guarantees and any other
documents requested by this Letter of Transmittal and Consent, must be
received by the Depositary at one of its addresses set forth herein, prior to
11:59 P.M., New York City Time, on the Expiration Date. If certificates
evidencing LYONs are forwarded to the Depositary in multiple deliveries, a
properly completed and duly executed Letter of Transmittal and Consent must
accompany each such delivery.
No alternative, conditional or contingent tenders will be accepted. All
tendering Holders, by execution of this Letter of Transmittal and Consent (or
a manually signed facsimile hereof), waive any right to receive any notice of
the acceptance of their LYONs for purchase.
6. INADEQUATE SPACE. If the space provided under "Description of
LYONs" is inadequate, the information should be continued on a separate
signed list and attached to this Letter of Transmittal and Consent.
7. PARTIAL TENDERS AND UNPURCHASED LYONS (NOT APPLICABLE TO HOLDERS
WHO TENDER BY BOOK-ENTRY TRANSFER). If only a portion (in an integral
portion of $1,000 only) of the principal amount at maturity of any LYON is to
be tendered, fill in the portion of the principal amount at maturity of such
LYON to be tendered in the column entitled "Principal Amount at Maturity
Tendered." If the tendered portion of the LYON so tendered is purchased, the
LYON will be split into two LYONs (in denominations of $1,000 or an integral
multiple thereof), the aggregate principal amount at maturity of which will
equal the principal amount at maturity of such original LYON. The Depositary
will then return to the tendering Holder a new LYON, in the principal amount
at maturity of the portion of such original LYON not tendered and purchased,
unless otherwise specified in the "A. Special Issuance/Delivery Instructions"
box in this Letter of Transmittal and Consent. The entire principal amount at
maturity evidenced by a certificate for LYONs will be deemed tendered unless
otherwise indicated.
8. TRANSFER TAXES. Except as set forth in this Instruction 8, the
Company will pay or cause to be paid any transfer taxes with respect to the
transfer and sale of LYONs to it, or to its order, pursuant to the Offer. If
payment is to be made to, or if LYONs not tendered or purchased are to be
registered in the name of, any persons other than the registered owners, or
if tendered LYONs are registered in the name of any persons other than the
persons signing this Letter of Transmittal and Consent, the amount of any
transfer taxes (whether imposed on the registered Holder or such other
person) payable on account of the transfer to such other person will be
deducted from the payment unless satisfactory evidence of the payment of such
taxes or exemption therefrom is submitted.
9. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If payment for any
LYONs tendered hereby is to be made, or certificates evidencing LYONs not
tendered or not purchased is (are) to be issued, in the name of a person
other than the person(s) signing this Letter of Transmittal and Consent or if
payment in the name of the person(s) signing this Letter of Transmittal and
Consent or any such certificate is to be sent to someone other than the
person(s) signing this Letter of Transmittal and Consent or to the person(s)
signing this Letter of Transmittal and Consent but at an address other than
that
11
shown in the box entitled "Description of LYONs" on this Letter of
Transmittal and Consent, the appropriate boxes captioned "A. Special
Issuance/Delivery Instructions" and "B. Special Payment Instructions" on this
Letter of Transmittal and Consent must be completed.
10. IRREGULARITIES. The Company will determine, in its sole
discretion, all questions as to the validity, form, eligibility (including
time of receipt), acceptance for payment and withdrawal of any tender of
LYONs and its determination shall be final and binding on all parties. The
Company reserves the absolute right to reject any and all tenders of LYONs
determined by it not to be in the proper form or the acceptance of or payment
for which may be unlawful. The Company also reserves the absolute right to
waive any of the conditions of the Purchase Offer or any defect or
irregularity in the tender of any particular LYONs, whether or not similar
conditions, defects or irregularities are waived in the case of other
tendered LYONs) and the Company's interpretation of the terms and conditions
of the Purchase Offer (including these instructions) shall be final and
binding on all parties. No tender of LYONs will be deemed to be validly made
until all defects and irregularities have been cured or waived. Unless
waived, all defects or irregularities in connection with tenders must be
cured within such time as the Company shall determine. None of the Company,
the Dealer Manager, the Depositary, the Information Agent nor any other
person is or will be obligated to give notice of defects or irregularities in
tenders or any notice of withdrawal, nor shall any of them incur any
liability for failure to give any such notice.
11. SUBSTITUTE FORM W-9. Each tendering Holder (or other payee) is
required to provide the Depositary with a correct taxpayer identification
number ("TIN"), generally the Holder's Social Security or federal employer
identification number, and with certain other information, on Substitute Form
W-9, which is provided under "Important Tax Information" below, and to
certify that the Holder (or other payee) is not subject to backup
withholding. Failure to provide the information on the Substitute Form W-9
may subject the tendering Holder (or other payee) to a $50 penalty imposed by
the Internal Revenue Service and 31% federal income tax backup withholding on
any payment. The box in Part 3 of the Substitute Form W-9 may be checked if
the tendering Holder (or other payee) has not been issued a TIN and has
applied for a TIN or intends to apply for a TIN in the near future. If the
box in Part 3 is checked and the Depositary is not provided with a TIN by the
time of payment, the Depositary will withhold 31% on all such payments, if
any, until a TIN is provided to the Depositary.
12. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or
requests for assistance or additional copies of the Purchase Offer or this
Letter of Transmittal and Consent may be directed to the Information Agent at
its telephone number set forth on the last page hereof. A Holder may also
contact the Dealer Manager at its telephone number set forth below or such
Holder's broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
13. WAIVER OF CONDITIONS. The Company expressly reserves the
absolute right, in its sole discretion, to waive any of the conditions to the
Offer or the Solicitation in the case of any LYONs tendered and Consents
delivered, in whole or in part, at any time and from time to time.
12
IMPORTANT TAX INFORMATION
Under U.S. federal income tax law, a Holder whose tendered LYONs are
accepted for payment is required to provide the Depositary with such Holder's
current TIN on Substitute Form W-9 below, or, alternatively, to establish
another basis for an exemption from backup withholding. If such Holder is an
individual, the TIN is his or her Social Security number. If the Depositary
is not provided with the correct TIN, the Holder or other payee may be
subject to a $50 penalty imposed by the Internal Revenue Service. In
addition, any payment made to such Holder or other payee with respect to
LYONs purchased pursuant to the Offer may be subject to 31% backup
withholding tax.
Certain Holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that Holder must submit to the Depositary a properly
completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under
penalties of perjury, attesting to that individual's exempt status. A Form W-
8 can be obtained from the Depositary. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions.
If backup withholding applies, the Depositary is required to withhold
31% of any payment made to the Holder or other payee. Backup withholding is
not an additional tax. Rather, the federal income tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld.
If withholding results in an overpayment of taxes, a refund may be obtained
from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on any payment made to a Holder or other
payee with respect to LYONs purchased pursuant to the Offer, the Holder is
required to notify the Depositary of the Holder's current TIN (or the TIN of
any other payee) by completing the form below, certifying that the TIN
provided on Substitute Form W-9 is correct (or that such Holder is awaiting
a TIN), and that (i) the Holder is exempt from backup withholding, (ii) the
Holder has not been notified by the Internal Revenue Service that the Holder
is subject to backup withholding as a result of failure to report all
interest or dividends or (iii) the Internal Revenue Service has notified the
Holder that the Holder is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Holder is required to give the Depositary the TIN (e.g., Social
Security number or Employer Identification Number) of the record owner of the
LYONs. If the LYONs are registered in more than one name or are not
registered in the name of the actual owner, consult the enclosed "Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9"
for additional guidance on which number to report.
13
<TABLE>
<S><C>
- ------------------------------------------------------------------------------------------
PAYER'S NAME: SHONEY'S, INC.
- ------------------------------------------------------------------------------------------
SUBSTITUTE Part 1--PLEASE PROVIDE YOUR TIN IN ________________________
Form W-9 THE BOX AT RIGHT AND CERTIFY BY Social Security Number
SIGNING AND DATING BELOW.
OR
Department of the
Treasury ________________________
Internal Revenue Service Employer
Identification Number(s)
Part 2--Certification--Under Part 3--
of Perjury, I certify that: [ ] Awaiting TIN
(1) The number shown on this
form is my correct taxpayer
identification number (or I
am waiting for a number to be
used for me), and
Payer's Request for (2) I am not subject to backup
Taxpayer Identification withholding because: (a) I am
Number ("TIN") and exempt from backup withholding,
Certifications or (b) I have not been notified
by the Internal Revenue Service
(IRS) that I am subject to backup
withholding as a result of a
failure to report all interest and
dividends, or (c) the IRS has
notified me that I am no longer
subject to backup withholding.
Certification Instructions--You must cross out item (2) above
if you have been notified by the IRS that you are currently
subject to backup withholding because of underreporting
interest or dividends on your tax return.
Name___________________________________________________________
Address________________________________________________________
(include zip code)
Signature__________________________Date________________________
- ------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE INTERNAL REVENUE SERVICE AND BACKUP WITHHOLDING OF 31%
OF ANY CASH PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF THE SUBSTITUTE FORM W-9.
<TABLE>
<S><C>
- -----------------------------------------------------------------------------
CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered
an application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration office or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all reportable cash payments made to me thereafter
will be withheld until I provide a taxpayer identification number to the
payer and that, if I do not provide my taxpayer identification number within
sixty days, such retained amounts shall be remitted to the IRS as backup
withholding.
Signature_____________________________________________Date__________________
- -----------------------------------------------------------------------------
</TABLE>
14
IMPORTANT: THIS LETTER OF TRANSMITTAL AND CONSENT (OR FACSIMILE THEREOF),
PROPERLY COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE
GUARANTEES AND CERTIFICATES RELATING TO THE LYONS OR CONFIRMATION OF BOOK-
ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) MUST BE RECEIVED BY THE
DEPOSITARY ON OR PRIOR TO THE LYONS CONSENT DEADLINE FOR HOLDERS WISHING TO
RECEIVE THE CONSENT PAYMENT AND ON OR PRIOR TO THE EXPIRATION DATE FOR
HOLDERS WISHING TO TENDER THEIR LYONS.
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
BY MAIL, OVERNIGHT COURIER OR HAND:
101 Barclay Street
Floor 7 East
New York, New York 10286
Attn: Reorganization Section, Kin Lau
By Facsimile for Eligible Institutions: (212) 815-6339
To Confirm by Telephone: (212) 815-3750
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Bankers and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: (888) 242-8157
THE DEALER MANAGER FOR THE OFFER IS:
BANC OF AMERICA SECURITIES LLC
100 North Tryon Street, 7th Floor
Charlotte, North Carolina 28255
Attn: High Yield Special Products
Collect: (704) 388-4813
Toll Free: (888) 292-0070
15
LETTER OF TRANSMITTAL AND CONSENT
To Tender and to Consent in Respect
of
8-1/4% Convertible Subordinated Debentures due 2002
CUSIP No. 872623 AA 1
of
SHONEY'S, INC.
Pursuant to the Purchase Offer and Consent Solicitation Statement
Dated March 27, 2000
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
BY MAIL, OVERNIGHT COURIER OR HAND:
101 Barclay Street
Floor 7 East
New York, New York 10286
Attn: Reorganization Section, Kin Lau
By Facsimile for Eligible Institutions: (212) 815-6339
To Confirm by Telephone: (212) 815-3750
- -----------------------------------------------------------------------------
THIS OFFER WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON APRIL 24, 2000,
UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE "EXPIRATION
DATE"). HOLDERS OF DEBENTURES MUST TENDER THEIR DEBENTURES ON OR PRIOR TO
THE EXPIRATION DATE TO RECEIVE THE TENDER OFFER CONSIDERATION. THE CONSENT
SOLICITATION WITH RESPECT TO THE DEBENTURES WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON APRIL 10, 2000, UNLESS EXTENDED (SUCH TIME AND DATE, AS IT
MAY BE EXTENDED, THE "TPI CONSENT DEADLINE"). TO RECEIVE A CONSENT PAYMENT,
HOLDERS OF DEBENTURES MUST TENDER THEIR DEBENTURES AND PROVIDE THEIR CONSENTS
TO THE PROPOSED AMENDMENTS (AND NOT HAVE REVOKED SUCH CONSENTS) AT OR PRIOR
TO THE TPI CONSENT DEADLINE.
- ----------------------------------------------------------------------------
DELIVERY OF THIS LETTER OF TRANSMITTAL AND CONSENT TO AN ADDRESS OTHER
THAN AS SET FORTH ABOVE, OR TRANSMISSION OF INSTRUCTIONS VIA A FAX NUMBER
OTHER THAN AS LISTED ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
CAPITALIZED TERMS USED HEREIN AND NOT DEFINED SHALL HAVE THE MEANING
ASCRIBED TO THEM IN THE PURCHASE OFFER AND CONSENT SOLICITATION STATEMENT.
By execution hereof, the undersigned acknowledges receipt of the
Purchase Offer and Consent Solicitation Statement dated March 27, 2000 (as
the same may be amended from time to time, the "Purchase Offer") of Shoney's,
Inc., a Tennessee corporation (the "Company"), and this Letter of Transmittal
and Consent and instructions thereto (the "Letter of Transmittal"), which
together constitute (i) the offer to purchase (the "Offer") by the Company
for all its outstanding 8-1/4% Convertible Subordinated Debentures due July
15, 2002 (the "Debentures"), originally issued by TPI Enterprises, Inc. and
subsequently assumed by the Company, upon the terms and subject to the
conditions set forth in the Purchase Offer, and (ii)
the Company's solicitation (the "Solicitation") of consents (the "Consents")
from holders of the Debentures (each, a "Holder" and, collectively, the
"Holders") to certain proposed amendments described in the Purchase Offer
(the "Proposed Amendments") to the Indenture dated as of July 15, 1992, as
amended by a First Supplemental Indenture dated as of September 6, 1996
between and among the Company (as successor to TPI Enterprises, Inc.), TPI
Restaurants, Inc., as guarantor, and The Bank of New York, as trustee (the
"Trustee"), pursuant to which the Debentures were issued (the "Indenture").
Holders who tender Debentures pursuant to the Offer are obligated to consent
to the Proposed Amendments.
The Offer is conditioned on, among other things, the receipt of the
requisite number of Consents at or prior to 11:59 P.M., New York City time,
on the Expiration Date and such Consents having not been revoked as more
fully described in the Purchase Offer under the caption "The Tender Offers
and Consent Solicitations-Terms and -Conditions." The Company reserves the
right to waive any one or more of the conditions to the Offer. A
Supplemental Indenture will be executed upon the satisfaction of the Consent
Condition and, upon such execution, the Supplemental Indenture will become
effective. The Supplemental Indenture will provide that the Proposed
Amendments will not become operative unless and until validly tendered
Debentures are purchased pursuant to the Offer. If the Offer is terminated
or withdrawn, or if no Debentures are purchased pursuant to the Offer for any
reason, then the Proposed Amendments contained in the Supplemental Indenture
will not become operative. The Purchase Offer enclosed herewith contains a
more complete description of the Offer and related solicitation of Consents
and the conditions thereof.
THE INSTRUCTIONS CONTAINED HEREIN AND IN THE PURCHASE OFFER (AS DEFINED
BELOW) SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL AND CONSENT
IS COMPLETED.
This Letter of Transmittal and Consent is to be completed by a Holder if
(i) certificates representing Debentures are to be physically delivered to
the Depositary herewith by such Holder or (ii) tender of Debentures is to be
made by book-entry transfer to the Depositary's account at DTC pursuant to
the procedures set forth under the caption "The Tender Offers and Consent
Solicitations--Book-Entry Delivery of the Notes" in the Purchase Offer and
instructions are not being transmitted through the DTC Automated Tender Offer
Program ("ATOP").
Holders of Debentures who are tendering by book-entry transfer to the
Depositary's account at DTC can execute their tender through ATOP. DTC
participants that are accepting the Offer may transmit their acceptance to
DTC, which will verify the acceptance and execute a book-entry delivery to
the Depositary's account at DTC. DTC will then send an Agent's Message to the
Depositary for its acceptance. Delivery of the Agent's Message by DTC will
satisfy the terms of the Offer in lieu of execution and delivery of a Letter
of Transmittal and Consent by the participant identified in the Agent's
Message. Accordingly, this Letter of Transmittal and Consent need not be
completed by a Holder tendering through ATOP.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
Your bank or broker can assist you in completing this form. The
instructions included with this Letter of Transmittal and Consent must be
followed. Questions and requests for assistance or for additional copies of
the Purchase Offer, this Letter of Transmittal and Consent and the Notice of
Guaranteed Delivery and Consent may be directed to the Information Agent.
See Instruction 12 below.
2
- -----------------------------------------------------------------------------
TENDER OF DEBENTURES AND CONSENT TO AMENDMENTS
[ ] CHECK HERE IF CERTIFICATES REPRESENTING TENDERED DEBENTURES ARE
ENCLOSED HEREWITH.
[ ] CHECK HERE IF TENDERED DEBENTURES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH DTC
AND COMPLETE THE FOLLOWING:
Name of Tendering Institution:_______________________________________________
Account Number:______________________________________________________________
Transaction Code Number:_____________________________________________________
[ ] CHECK HERE IF TENDERED DEBENTURES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY AND CONSENT PREVIOUSLY DELIVERED TO THE
DEPOSITARY AND COMPLETE THE FOLLOWING:
Name of Registered Holder(s):________________________________________________
Window Ticket No. (if any):__________________________________________________
Date of Execution of Notice of Guaranteed Delivery and Consent:______________
Name of Eligible Institution that Guaranteed Delivery:_______________________
If Delivered by Book-Entry Transfer:
Name of Tendering Institution:__________________________________________
Account Number with DTC:________________________________________________
Transaction Code Number:________________________________________________
- -----------------------------------------------------------------------------
HOLDERS WHO TENDER DEBENTURES IN THE OFFER ARE OBLIGATED TO CONSENT TO THE
PROPOSED AMENDMENTS. DELIVERY OF DEBENTURES BY BOOK-ENTRY TRANSFER OR
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY AND CONSENT WILL BE DEEMED TO
CONSTITUTE A CONSENT TO THE PROPOSED AMENDMENTS WITH RESPECT TO SUCH
DEBENTURES TENDERED.
3
List below the Debentures to which this Letter of Transmittal and
Consent relates. If the space provided is inadequate, list the certificate
numbers and principal amounts on a separately executed schedule and affix the
schedule to this Letter of Transmittal and Consent. Tenders of Debentures
will be accepted only in principal amounts equal to $1,000 or integral
multiples thereof. No alternative, conditional or contingent tenders will be
accepted.
<TABLE>
<S><C>
- -------------------------------------------------------------------------------------------------
DESCRIPTION OF DEBENTURES
- -------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED
HOLDER(S) OR NAME OF DTC PARTICIPANT AGGREGATE PRINCIPAL AMOUNT
AND PARTICIPANT'S DTC ACCOUNT NUMBER PRINCIPAL TENDERED AND
IN WHICH LYONS ARE HELD CERTIFICATE AMOUNT AS TO WHICH
(PLEASE FILL IN BLANK) NUMBER(S)* REPRESENTED CONSENTS ARE GIVEN**
____________________________________ ----------- ------------------ --------------------
- -------------------------------------------------------------------------------------------------
TOTAL PRINCIPAL AMOUNT OF DEBENTURES
- -------------------------------------------------------------------------------------------------
* Need not be completed by Holders tendering by book-entry transfer.
- -------------------------------------------------------------------------------------------------
** Unless otherwise specified, it will be assumed that the entire aggregate principal amount
represented by the Debentures described above is being tendered and a Consent with respect
thereto will be given. A tendering Holder is required to Consent to the Proposed Amendments
with respect to all Debentures tendered by such Holder.
- -------------------------------------------------------------------------------------------------
</TABLE>
The names and addresses of the registered Holders should be printed, if
not already printed above, exactly as they appear on the certificates
representing Debentures tendered hereby.
4
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
Ladies and Gentlemen:
The undersigned hereby tenders to Shoney's, Inc. (the "Company"), upon
the terms and subject to the conditions set forth in its Purchase Offer and
Consent Solicitation Statement dated March 27, 2000 (the "Purchase Offer"),
receipt of which is hereby acknowledged, and in accordance with this Letter
of Transmittal and Consent, the principal amount of Debentures indicated in
the table above entitled "Description of Debentures" under the column heading
"Principal Amount Tendered and as to which Consents are Given" (or, if
nothing is indicated therein, with respect to the entire aggregate principal
amount represented by the Debentures described in such table) and consents to
the Proposed Amendments with respect to the aggregate principal amount of
such Debentures. The undersigned acknowledges and agrees that the tender of
Debentures made hereby may not be withdrawn (nor may the Consent made hereby
be revoked) except in accordance with the procedures set forth in the
Purchase Offer. Terms used herein and not defined herein shall have the
meanings ascribed to them in the Purchase Offer.
Subject to, and effective upon, the acceptance for purchase of, and
payment for, the principal amount of Debentures tendered herewith in
accordance with the terms and subject to the conditions of the Offer, the
undersigned hereby sells, assigns and transfers to, or upon the order of, the
Company, all right, title and interest in and to all of the Debentures
tendered hereby. The undersigned hereby irrevocably constitutes and appoints
the Depositary the true and lawful agent and attorney-in-fact of the
undersigned (with full knowledge that the Depositary also acts as the agent
of the Company) with respect to such Debentures, with full powers of
substitution and revocation (such power of attorney being deemed to be an
irrevocable power coupled with an interest), to (i) present such Debentures
and all evidences of transfer and authenticity to, or transfer ownership of
such Debentures on the account books maintained by DTC to, or upon the order
of, the Company, (ii) present such Debentures for transfer of ownership on
the books of the Company, (iii) receive all benefits and otherwise exercise
all rights of beneficial ownership of such Debentures, and (iv) deliver to
the Company and the Trustee this Letter of Transmittal and Consent as
evidence of the undersigned's consent to the Proposed Amendments and as
certification that the Consent Condition has been satisfied, all in
accordance with the terms and conditions of the Offer as described in the
Purchase Offer.
The undersigned acknowledges and agrees that, by the execution and
delivery hereof, the undersigned is consenting to the Proposed Amendments
(with respect to the principal amount of Debentures tendered hereby) as
permitted by the Indenture relating to the Debentures and hereby also
consents to the execution of the Supplemental Indenture effecting such
Proposed Amendments. The undersigned acknowledges and agrees that the Consent
provided hereby shall remain in full force and effect unless and until such
Consent is revoked in accordance with the procedures set forth in the
Purchase Offer and that after the Trustee receives notice from the Company of
satisfaction of the Consent Condition in accordance with the Indenture and
the Supplemental Indenture is executed, such Consent may not be revoked (and
agrees that it will not attempt to do so).
If the undersigned is not the registered Holder of the Debentures listed
in the box above labeled "Description of Debentures" under the column heading
"Principal Amount Tendered and as to which Consents are Given" or such
registered Holder's legal representative or attorney-in-fact, then in order
to validly consent, the undersigned has obtained a properly completed
irrevocable proxy that authorizes the undersigned (or the undersigned's legal
representative or attorney-in-fact) to deliver a Consent in respect of such
Debentures on behalf of the Holder thereof, and such proxy is being delivered
with this Letter of Transmittal and Consent.
The undersigned acknowledges and agrees that a tender of Debentures
pursuant to any of the procedures described in the Purchase Offer and in the
instructions hereto and an acceptance of such Debentures by the Company will
constitute a binding agreement between the undersigned and the Company upon
the terms and subject to the conditions of the Offer. For purposes of the
Offer, the undersigned understands that validly tendered Debentures (or
defectively tendered Debentures with respect to which the Company has, or has
caused to be, waived such defect) will be deemed to have been accepted if, as
and when the Company gives oral or written notice thereof to the Depositary.
For purposes of the Solicitation, Consents received by the Depositary will be
deemed to have been accepted if, as and when the Company gives written notice
to the Trustee of the receipt by the Depositary of at least a majority in
aggregate principal amount of the Debentures and a Supplemental Indenture is
executed.
5
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Debentures
tendered hereby and to give the Consent contained herein, and that when such
tendered Debentures are accepted for purchase and payment by the Company, the
Company will acquire good title thereto, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claim
or right. The undersigned will, upon request, execute and deliver any
additional documents deemed by the Depositary or by the Company to be
necessary or desirable to complete the sale, assignment and transfer of the
Debentures tendered hereby, to perfect the undersigned's Consent to the
Proposed Amendments or to complete the execution of the Supplemental
Indenture.
All authority conferred or agreed to be conferred by this Letter of
Transmittal and Consent shall not be affected by, and shall survive, the
death or incapacity of the undersigned, and any obligation of the undersigned
hereunder shall be binding upon the heirs, executors, administrators,
trustees in bankruptcy, personal and legal representatives, successors and
assigns of the undersigned.
The undersigned understands that, under certain circumstances and
subject to the certain conditions of the Offer (each of which the Company may
waive) set forth in the Purchase Offer, the Company may not be required to
accept for purchase any of the Debentures tendered (including any Debentures
tendered after the Expiration Date). Any Debentures not accepted for
purchase will be returned promptly to the undersigned at the address set
forth above unless otherwise indicated under "A. Special Issuance/Delivery
Instructions" below.
The undersigned understands that the delivery and surrender of the
Debentures is not effective, and the risk of loss of the Debentures does not
pass to the Depositary, until receipt by the Depositary of this Letter of
Transmittal and Consent, or a facsimile hereof, properly completed and duly
executed, together with all accompanying evidences of authority and any other
required documents in form satisfactory to the Company. All questions as to
the form of all documents and the validity (including time of receipt) and
acceptance of tenders and withdrawals of Debentures and deliveries and
revocations of Consents will be determined by the Company, in its sole
discretion, which determination shall be final and binding.
Unless otherwise indicated herein under "A. Special Issuance/Delivery
Instructions," the undersigned hereby request(s) that any Debentures
representing principal amounts not tendered or not accepted for purchase be
issued in the name(s) of, and delivered to, the undersigned (and in the case
of Debentures tendered by book-entry transfer, by credit to the account of
DTC). Unless otherwise indicated herein under "B. Special Payment
Instructions," the undersigned hereby request(s) that any checks for payment
to be made in respect of the Debentures tendered hereby in connection with
the Offer be issued to the order of, and delivered to, the undersigned.
In the event that the "A. Special Issuance/Delivery Instructions" box is
completed, the undersigned hereby request(s) that any Debentures representing
principal amounts not tendered or not accepted for purchase be issued in the
name(s) of, and be delivered to, the person(s) at the address(es) therein
indicated. The undersigned recognizes that the Company has no obligation
pursuant to the "A. Special Issuance/Delivery Instructions" box to transfer
any Debentures from the names of the registered holder(s) thereof if the
Company does not accept for purchase any of the principal amount of such
Debentures so tendered. In the event that the "B. Special Payment
Instructions" box is completed, the undersigned hereby request(s) that
payment to be made in respect of the Debentures tendered hereby be issued in
the name(s) of, and be delivered to, the person(s) at the address(es) therein
indicated.
6
<TABLE>
<S><C>
- ------------------------------------------------- ----------------------------------------------------
[ A. SPECIAL ISSUANCE/DELIVERY ] [ B. SPECIAL PAYMENT ]
[ INSTRUCTIONS ] [ INSTRUCTIONS ]
[ (See instructions 3, 4, 7 and 9) ] [ (See Instruction 9) ]
[_____________________________________________ ] [ ________________________________________________ ]
[ To be completed ONLY if Debentures in a ] [ To be completed ONLY if payment is to be made ]
[ principal amount not tendered or not ] [ in the name of someone other than the ]
[ accepted for purchase are to be issued in ] [ person(s) whose signature(s) appear(s) within ]
[ the name of someone other than the person(s) ] [ this Letter of Transmittal and Consent or ]
[ whose signature(s) appear(s) within this ] [ sent to an address different from that shown ]
[ Letter of Transmittal and Consent or sent to ] [ in the box entitled "Description of Debentures" ]
[ an address different from that shown in the ] [ within this Letter of Transmittal and Consent. ]
[ box entitled "Description of Debentures" in ] [ ]
[ within this Letter of Transmittal, or if the ] [ Name_______________________________________ ]
[ Debentures tendered by book-entry transfer ] [ (Please Print) ]
[ that are not accepted for purchase are to be ] [ ]
[ credited to an account maintained at DTC ] [ Address____________________________________ ]
[ other than the one designated above. ] [ ]
[ ] [ ]
[ ] [ ___________________________________________ ]
[ Name________________________________________ ] [ (Zip Code) ]
[ (Please Print) ] [ ]
[ ] [ ___________________________________________ ]
[ Address_____________________________________ ] [ (Tax Identification or Social ]
[ ] [ Security Number) ]
[ ____________________________________________ ] [ ]
[ (Zip Code) ] [ ___________________________________________ ]
[ ] [ (See Substitute Form W-9 herein ]
[ ____________________________________________ ] [ ]
[(Tax Identification or Social Security Number) ] [ ]
[ (See Substitute Form W-9 herein) ] ---------------------------------------------------
[ ]
[ Credit unpurchased Debentures by book-entry ]
[ transfer to the DTC account set forth below: ]
[ ]
[ ____________________________________________ ]
[ PLEASE COMPLETE SUBSTITUTE FORM W-9 HEREIN ]
[ ]
[ ]
[ SIGNATURE GUARANTEE (See Instruction 3 below) ]
[ Certain Signatures Must be Guaranteed by a ]
[ Medallion Signature Guarantor. ]
[ ]
[ ]
[ ____________________________________________ ]
[ (Name of Medallion Signature Guarantor) ]
[ ]
[ ____________________________________________ ]
[ ]
[ ____________________________________________ ]
[ ]
[ ____________________________________________ ]
[ (Address, including Zip Code, and Telephone ]
[ Number, including Area Code, of Firm) ]
[ ]
[ ____________________________________________ ]
[ (Authorized Signature) ]
[ ]
[ ____________________________________________ ]
[ (Printed Name) ]
- ------------------------------------------------
</TABLE>
7
<TABLE>
<S><C>
PLEASE SIGN HERE
(To be completed by all tendering Holders of Debentures regardless of whether Debentures are
being physically delivered herewith, unless an Agent's Message is delivered in connection
with a book-entry transfer of such Debenture)
By completing, executing and delivering this Letter of Transmittal and Consent, the undersigned hereby
tenders, and consents to the Proposed Amendments (and to the execution of the Supplemental Indenture effecting
the Proposed Amendments) with respect to, the principal amount of the Debentures listed in the box above labeled
"Description of Debentures" under the column heading "Principal Amount Tendered as to which Consents are Given"
(or, if nothing is indicated therein, with respect to the entire aggregate principal amount represented by the
Debentures described in such box).
This Letter of Transmittal and Consent must be signed by the registered Holder(s) exactly as the name(s)
appear(s) on certificate(s) representing Debentures or, if tendered by a participant in DTC, exactly as such
participant's name appears on a security position listing as the owner of such Debentures. If signature is by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting
in a fiduciary or representative capacity, please set forth the full title and see Instruction 4.
_____________________________________________________________________________________________________________
_____________________________________________________________________________________________________________
Signature(s) of Registered Holder(s) or Authorized Signatory
(See guarantee requirement below)
Dated________________________________________________________________________________________________________
Name(s)______________________________________________________________________________________________________
(Please Print)
Capacity_____________________________________________________________________________________________________
Address______________________________________________________________________________________________________
(Zip Code)
Area Code and
Telephone
Number_______________________________________________________________________________________________________
Tax Identification or
Social Security
No.__________________________________________________________________________________________________________
COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9
Medallion Signature Guarantee
(If Required--See Instructions 3 and 4)
Authorized
Signature____________________________________________________________________________________________________
Print Name
And Title____________________________________________________________________________________________________
Name
of Firm _____________________________________________________________________________________________________
[Place Seal Here]
Address______________________________________________________________________________________________________
(Zip Code)
Dated________________________________________________________________________________________________________
</TABLE>
8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
AND THE SOLICITATION
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CONSENT AND DEBENTURES
OR BOOK-ENTRY CONFIRMATIONS; GUARANTEED DELIVERY PROCEDURES; WITHDRAWAL OF
TENDER. To tender Debentures in the Offer and to deliver Consents in the
Solicitation, physical delivery of the Debentures or a confirmation of any
book-entry transfer into the Depositary's account with DTC of Debentures
tendered electronically, as well as a properly completed and duly executed
copy (or facsimile) of this Letter of Transmittal and Consent with any
required signature guarantees (or Agent's Message (as defined below) in
connection with a book-entry transfer), and any other documents required by
this Letter of Transmittal and Consent (or Agent's Message (as defined below)
in connection with a book-entry transfer), and any other documents required
by this Letter of Transmittal and Consent, must be received by the Depositary
at its address set forth herein at or prior to 11:59 P.M., New York City
time, on the Expiration Date; provided, however, that no Consent Payment will
be paid to Holders who deliver their Consents after the TPI Consent Deadline.
The method of delivery of this Letter of Transmittal and Consent, Debentures
and all other required documents to the Depositary is at the election and
risk of tendering Holders. If such delivery is by mail, it is suggested that
Holders use properly insured registered mail, return receipt requested, and
that the mailing be made sufficiently in advance of the Expiration Date or
the TPI Consent Deadline, as the case may be, to permit delivery to the
Depositary at or prior to such time. Except as otherwise provided below, the
delivery will be deemed made when actually received or confirmed by the
Depositary. This Letter of Transmittal and Consent and Debentures should be
sent only to the Depositary and not to the Company, the Trustee, the Dealer
Manager or the Information Agent.
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Depositary and forming a part of a book-entry confirmation,
which states that DTC has received an express acknowledgement from the
participant in DTC tendering the Debentures, that such participant has
received and agrees to be bound by the terms of this Letter of Transmittal
and Consent and the Company may enforce such agreement against the
participant.
If, after the TPI Consent Deadline and prior to the Expiration Date,
Holders desire to tender Debentures pursuant to the Offer and (i) such
Debentures are not lost, but are not immediately available, (ii) time will
not permit this Letter of Transmittal and Consent, such Debentures or other
required documents to reach the Depositary at or prior to 11:59 P.M., New
York City time, on the Expiration Date or (iii) the procedures for book-entry
transfer cannot be completed at or prior to 11:59 P.M., New York City time,
on the Expiration Date, such Holders may effect a tender of such Debentures
and delivery of Consents to the Proposed Amendments in accordance with the
guaranteed delivery procedures set forth in the Purchase Offer under the
caption "The Tender Offers and the Consent Solicitations--Guaranteed
Delivery."
Pursuant to the guaranteed delivery procedures:
(a) such tender must be made by or through an Eligible Institution
(defined as an institution that is a member of a national securities exchange
or the National Association of Securities Dealers, Inc. or is a commercial
bank or trust company having an office in the United States);
(b) at or prior to 11:59 P.M., New York City time, on the Expiration
Date, the Depositary must have received from such Eligible Institution, at
the address of the Depositary set forth herein, a properly completed and duly
executed Notice of Guaranteed Delivery and Consent (by mail, hand delivery or
facsimile), substantially in the form provided by the Company, setting forth
the name(s) and address(es) of the Holder(s), a description of the Debentures
and the principal amount of Debentures being tendered and with respect to
which a Consent is being delivered and stating that the tender is being made
thereby and guaranteeing that, within three New York Stock Exchange trading
days after the date of the Notice of Guaranteed Delivery and Consent, a
properly completed and duly executed Letter of Transmittal and Consent, or a
facsimile thereof, with any required signature guarantees, or an Agent's
Message, together with the Debentures (or confirmation of book-entry transfer
of such Debentures into the Depositary's account with DTC as described above)
and any other documents required by this Letter of Transmittal and Consent
and the instructions hereto will be deposited by such Eligible Institution
with the Depositary; and
9
(c) this Letter of Transmittal and Consent, or facsimile hereof,
properly completed and duly executed with any required signature guarantees,
or an Agent's Message, and all physically delivered Debentures in proper form
(or confirmation of book-entry transfer of such Debentures into the
Depositary's account with DTC as described above, including an Agent's
Message in connection therewith) and all other required documents must be
received by the Depositary within three New York Stock Exchange trading days
after the date of the Notice of Guaranteed Delivery and Consent.
HOLDERS SHOULD NOTE THAT THE FOREGOING PROCEDURES ARE NOT AVAILABLE
UNTIL AFTER THE TPI CONSENT DEADLINE AND THAT TENDERS PURSUANT TO THE
GUARANTEED DELIVERY PROCEDURES WILL NOT BE ACCEPTED PRIOR TO THAT TIME OR
ENTITLE A HOLDER TO RECEIVE A CONSENT PAYMENT.
Tenders of Debentures may be withdrawn at any time prior to the
Expiration Date and unless accepted by the Company, any time after 40
business days after the date of the Purchase Offer by written notice of
withdrawal received by the Depositary, delivery by mail or facsimile hand
delivery, which notice must be received by the Depositary at its address set
forth herein at or prior to 11:59 P.M., New York City time, on the Expiration
Date. To be effective, notice of withdrawal of tendered Debentures must (i)
be received by the Depositary at or prior to 11:59 P.M., New York City time,
on the Expiration Date at its address set forth herein, (ii) describe the
Debentures to be withdrawn, (iii) specify the name of the person who
deposited the Debentures to be withdrawn (the "Depositor"), the name in which
the Debentures are registered (or, if tendered by book entry transfer, the
name of the participant in DTC whose name appears on a security position
listing as the owner of such Debentures) if different from that of the
Depositor, (iv) contain the certificate numbers shown on the Debentures, (v)
state the principal amount of Debentures to be withdrawn and (vi) be signed
by the Holder in the same manner as the original signature on this Letter of
Transmittal and Consent (including any required signature guarantee(s)) or be
accompanied by evidence satisfactory to the Company that the person
withdrawing the tender has succeeded to the beneficial ownership of the
Debentures. If Debentures have been delivered or otherwise identified
(through confirmation of book-entry transfer of such Debentures) to the
Depositary, the name of the Holder and the Debentures withdrawn must also be
furnished to the Depositary as aforesaid prior to the physical release of the
withdrawn Debentures (or, in the case of Debentures transferred by book-entry
transfer, the name and number of the account at DTC to be credited with
withdrawn Debentures).
2. CONSENT TO PROPOSED AMENDMENTS; REVOCATION OF CONSENTS. In
accordance with the Purchase Offer, all properly completed and executed
Letters of Transmittal and Consents consenting to the Proposed Amendments
that are received by the Depositary at or prior to 5:00 P.M., New York City
time, on the TPI Consent Deadline will be counted as Consents with respect to
the Proposed Amendments unless the Depositary receives, prior to execution of
the Supplemental Indenture, a written notice of revocation of such Consents
as described in the Purchase Offer. To revoke a Consent, a Holder must
withdraw the corresponding tendered Debentures in the manner set forth above
3. SIGNATURE GUARANTEES. No signature guarantee is required if: (i)
this Letter of Transmittal and Consent is signed by the registered holder(s)
of the Debentures tendered herewith (or by a participant in DTC whose name
appears on a security position listing as the owner of Debentures) and the
payments for the Debentures to be purchased and Consent Payments to be made,
or any Debentures for principal amounts not tendered or not accepted for
purchase are to be issued, directly to such registered holder(s), (or, if
signed by a participant in DTC, and Debentures for principal amounts not
tendered or not accepted for purchase are to be credited to such
participant's account at DTC) and the "Special Issuance/Delivery
Instructions" box of this Letter of Transmittal and Consent has not been
completed; or (ii) such Debentures are tendered for the account of an
Eligible Institution. In all other cases, all signatures on Letters of
Transmittal and Consents accompanying Debentures must be guaranteed by a
Medallion Signature Guarantor (defined as a recognized participant in the
Securities Transfer Agents Medallion Program).
4. SIGNATURES ON LETTER OF TRANSMITTAL AND CONSENT, INSTRUMENTS OF
TRANSFER AND ENDORSEMENTS. If this Letter of Transmittal and Consent is
signed by the registered Holders of the Debentures tendered hereby, the
signatures must correspond with the name(s) as written on the face of the
certificate(s) without alteration, enlargement or any change whatsoever. If
this Letter of Transmittal and Consent is signed by a participant in DTC
whose name is shown on a security position listing as the owner of the
Debentures tendered hereby, the signature must correspond with the name shown
on the security position listing as the owner of such Debentures.
10
If any of the Debentures tendered hereby are registered in the name of
two or more Holders, all such Holders must sign this Letter of Transmittal
and Consent. If any of the Debentures tendered hereby are registered in
different names on several certificates, it will be necessary to complete,
sign and submit as many separate Letters of Transmittal and Consent as there
are different registrations of certificates.
If this Letter of Transmittal and Consent or any Debentures or
instrument of transfer is signed by a trustee, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, such person should so
indicate when signing, and proper evidence satisfactory to the Company of
such person's authority to so act must be submitted.
When this Letter of Transmittal and Consent is signed by the registered
Holders of the Debentures tendered hereby, no endorsements of Debentures or
separate instruments of transfer are required unless payment is to be made,
or Debentures not tendered or purchased are to be issued, to a person other
than the registered Holders, in which case signatures on such Debentures or
instruments of transfer must be guaranteed by a Medallion Signature
Guarantor.
IF THIS LETTER OF TRANSMITTAL AND CONSENT IS SIGNED OTHER THAN BY THE
REGISTERED HOLDERS OF THE DEBENTURES TENDERED HEREBY, SUCH DEBENTURES MUST BE
ENDORSED OR ACCOMPANIED BY APPROPRIATE INSTRUMENTS OF TRANSFER, AND A DULY
COMPLETED PROXY ENTITLING THE SIGNER TO CONSENT WITH RESPECT TO SUCH
DEBENTURES ON BEHALF OF SUCH REGISTERED HOLDERS, IN ANY CASE SIGNED EXACTLY
AS THE NAME OR NAMES OF THE REGISTERED HOLDERS APPEAR ON THE DEBENTURES AND
SIGNATURES ON SUCH DEBENTURES OR INSTRUMENTS OF TRANSFER AND PROXY ARE
REQUIRED AND MUST BE GUARANTEED BY A MEDALLION SIGNATURE GUARANTOR, UNLESS
THE SIGNATURE IS THAT OF AN ELIGIBLE INSTITUTION.
5. DELIVERY OF LETTER OF TRANSMITTAL AND CONSENT AND DEBENTURES
CERTIFICATES. This Letter of Transmittal and Consent is to be used if (i)
certificates evidencing Debentures are to be forwarded herewith or (ii)
Debentures are to be delivered by book-entry transfer pursuant to the
procedure set forth under the caption "The Tender Offers and Consent
Solicitations-Book-Entry Delivery of the Notes." Certificates evidencing all
physically tendered Debentures, or a confirmation of a book-entry transfer
into the Depositary's account at DTC of all Debentures delivered by book-
entry transfer as well as a properly completed and duly executed Letter of
Transmittal and Consent (or facsimile thereof) with any required signature
guarantees and any other documents requested by this Letter of Transmittal
and Consent, must be received by the Depositary at one of its addresses set
forth herein, prior to 11:59 P.M. New York City time on the Expiration Date.
If certificates evidencing Debentures are forwarded to the Depositary in
multiple deliveries, a properly completed and duly executed Letter of
Transmittal and Consent must accompany each such delivery.
No alternative, conditional or contingent tenders will be accepted. All
tendering Holders, by execution of this Letter of Transmittal and Consent (or
a manually signed facsimile hereof), waive any right to receive any notice of
the acceptance of their Debentures for purchase.
6. INADEQUATE SPACE. If the space provided under "Description of
Debentures" is inadequate, the information should be continued on a separate
signed list and attached to this Letter of Transmittal and Consent.
7. PARTIAL TENDERS AND UNPURCHASED DEBENTURES (NOT APPLICABLE TO
HOLDERS WHO TENDER BY BOOK-ENTRY TRANSFER). If only a portion (in an
integral portion of $1,000 only) of the principal amount of any Debenture is
to be tendered, fill in the portion of the principal amount of such Debenture
to be tendered in the column entitled "Principal Amount Tendered and as to
which Consents are Given." If the tendered portion of the Debenture so
tendered is purchased, the Debenture will be split into two Debentures (in
denominations of $1,000 or an integral multiple thereof), the aggregate
principal amount of which will equal the principal amount of such original
Debenture. The Depositary will then return to the tendering Holder a new
Debenture, in the principal amount of the portion of such original Debenture
not tendered and purchased, unless otherwise specified in the "A. Special
Issuance/Delivery Instructions" box in this Letter of Transmittal and
Consent. The entire principal amount evidenced by a certificate for
Debentures will be deemed tendered unless otherwise indicated.
8. TRANSFER TAXES. Except as set forth in this Instruction 8, the
Company will pay or cause to be paid any transfer taxes with respect to the
transfer and sale of Debentures to it, or to its order, pursuant to the
Offer. If payment is to be made to, or if Debentures not tendered or
purchased are to be registered in the name of, any persons other than the
registered
11
owners, or if tendered Debentures are registered in the name of any persons
other than the persons signing this Letter of Transmittal and Consent, the
amount of any transfer taxes (whether imposed on the registered Holder or
such other person) payable on account of the transfer to such other person
will be deducted from the payment unless satisfactory evidence of the payment
of such taxes or exemption therefrom is submitted.
9. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If payment for any
Debentures tendered hereby is to be made, or certificates evidencing
Debentures not tendered or not purchased is (are) to be issued, in the name
of a person other than the person(s) signing this Letter of Transmittal and
Consent or if payment in the name of the person(s) signing this Letter of
Transmittal and Consent or any such certificate is to be sent to someone
other than the person(s) signing this Letter of Transmittal and Consent or to
the person(s) signing this Letter of Transmittal and Consent but at an
address other than that shown in the box entitled "Description of Debentures"
on this Letter of Transmittal and Consent, the appropriate boxes captioned
"A. Special Issuance/Delivery Instructions" and "B. Special Payment
Instructions" on this Letter of Transmittal and Consent must be completed.
10. IRREGULARITIES. The Company will determine, in its sole
discretion, all questions as to the validity, form, eligibility (including
time of receipt), acceptance for payment and withdrawal of any tender of
Debentures and its determination shall be final and binding on all parties.
The Company reserves the absolute right to reject any and all tenders of
Debentures determined by it not to be in the proper form or the acceptance of
or payment for which may be unlawful. The Company also reserves the absolute
right to waive any of the conditions of the Purchase Offer or any defect or
irregularity in the tender of any particular Debentures, whether or not
similar conditions, defects or irregularities are waived in the case of other
tendered Debentures, and the Company's interpretation of the terms and
conditions of the Purchase Offer (including these instructions) shall be
final and binding on all parties. No tender of Debentures will be deemed to
be validly made until all defects and irregularities have been cured or
waived. Unless waived, all defects or irregularities in connection with
tenders must be cured within such time as the Company shall determine. None
of the Company, the Dealer Manager, the Depositary, the Information Agent nor
any other person is or will be obligated to give notice of defects or
irregularities in tenders or any notice of withdrawal, nor shall any of them
incur any liability for failure to give any such notice.
11. SUBSTITUTE FORM W-9. Each tendering Holder (or other payee) is
required to provide the Depositary with a correct taxpayer identification
number ("TIN"), generally the Holder's Social Security or federal employer
identification number, and with certain other information, on Substitute Form
W-9, which is provided under "Important Tax Information" below, and to
certify that the Holder (or other payee) is not subject to backup
withholding. Failure to provide the information on the Substitute Form W-9
may subject the tendering Holder (or other payee) to a $50 penalty imposed by
the Internal Revenue Service and 31% federal income tax backup withholding on
any payment. The box in Part 3 of the Substitute Form W-9 may be checked if
the tendering Holder (or other payee) has not been issued a TIN and has
applied for a TIN or intends to apply for a TIN in the near future. If the
box in Part 3 is checked and the Depositary is not provided with a TIN by the
time of payment, the Depositary will withhold 31% on all such payments, if
any, until a TIN is provided to the Depositary.
12. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Any questions or
requests for assistance or additional copies of the Purchase Offer or this
Letter of Transmittal and Consent may be directed to the Information Agent at
its telephone number set forth on the last page hereof. A Holder may also
contact the Dealer Manager at its telephone number set forth below or such
Holder's broker, dealer, commercial bank, trust company or other nominee for
assistance concerning the Offer.
13. WAIVER OF CONDITIONS. The Company expressly reserves the
absolute right, in its sole discretion, to waive any of the conditions to the
Offer or the Solicitation in the case of any Debentures tendered and Consents
delivered, in whole or in part, at any time and from time to time.
12
IMPORTANT TAX INFORMATION
Under U.S. federal income tax law, a Holder whose tendered Debentures
are accepted for payment is required to provide the Depositary with such
Holder's current TIN on Substitute Form W-9 below, or, alternatively, to
establish another basis for an exemption from backup withholding. If such
Holder is an individual, the TIN is his or her Social Security number. If the
Depositary is not provided with the correct TIN, the Holder or other payee
may be subject to a $50 penalty imposed by the Internal Revenue Service. In
addition, any payment made to such Holder or other payee with respect to
Debentures purchased pursuant to the Offer may be subject to 31% backup
withholding tax.
Certain Holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and
reporting requirements. In order for a foreign individual to qualify as an
exempt recipient, that Holder must submit to the Depositary a properly
completed Internal Revenue Service Form W-8 (a "Form W-8"), signed under
penalties of perjury, attesting to that individual's exempt status. A Form W-
8 can be obtained from the Depositary. See the enclosed "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9" for
additional instructions.
If backup withholding applies, the Depositary is required to withhold
31% of any payment made to the Holder or other payee. Backup withholding is
not an additional tax. Rather, the federal income tax liability of persons
subject to backup withholding will be reduced by the amount of tax withheld.
If withholding results in an overpayment of taxes, a refund may be obtained
from the Internal Revenue Service.
PURPOSE OF SUBSTITUTE FORM W-9
To prevent backup withholding on any payment made to a Holder or other
payee with respect to Debentures purchased pursuant to the Offer, the Holder
is required to notify the Depositary of the Holder's current TIN (or the TIN
of any other payee) by completing the form below, certifying that the TIN
provided on Substitute Form W-9 is correct (or that such Holder is awaiting
a TIN), and that (i) the Holder is exempt from backup withholding, (ii) the
Holder has not been notified by the Internal Revenue Service that the Holder
is subject to backup withholding as a result of failure to report all
interest or dividends or (iii) the Internal Revenue Service has notified the
Holder that the Holder is no longer subject to backup withholding.
WHAT NUMBER TO GIVE THE DEPOSITARY
The Holder is required to give the Depositary the TIN (e.g., Social
Security number or Employer Identification Number) of the record owner of the
Debentures. If the Debentures are registered in more than one name or are not
registered in the name of the actual owner, consult the enclosed "Guidelines
for Certification of Taxpayer Identification Number on Substitute Form W-9"
for additional guidance on which number to report.
13
<TABLE>
<S><C>
- ------------------------------------------------------------------------------------------
PAYER'S NAME: SHONEY'S, INC.
- ------------------------------------------------------------------------------------------
SUBSTITUTE Part 1--PLEASE PROVIDE YOUR TIN IN ________________________
Form W-9 THE BOX AT RIGHT AND CERTIFY BY Social Security Number
SIGNING AND DATING BELOW.
OR
Department of the
Treasury ________________________
Internal Revenue Service Employer
Identification Number(s)
Part 2--Certification--Under Part 3--
of Perjury, I certify that: [ ] Awaiting TIN
(1) The number shown on this
form is my correct taxpayer
identification number (or I
am waiting for a number to be
used for me), and
Payer's Request for (2) I am not subject to backup
Taxpayer Identification withholding because: (a) I am
Number ("TIN") and exempt from backup withholding,
Certifications or (b) I have not been notified
by the Internal Revenue Service
(IRS) that I am subject to backup
withholding as a result of a
failure to report all interest and
dividends, or (c) the IRS has
notified me that I am no longer
subject to backup withholding.
Certification Instructions--You must cross out item (2) above
if you have been notified by the IRS that you are currently
subject to backup withholding because of underreporting
interest or dividends on your tax return.
Name___________________________________________________________
Address________________________________________________________
(include zip code)
Signature__________________________Date________________________
- ------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY
IMPOSED BY THE INTERNAL REVENUE SERVICE AND BACKUP WITHHOLDING OF 31%
OF ANY CASH PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE
REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
NOTE: YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX
IN PART 3 OF THE SUBSTITUTE FORM W-9.
<TABLE>
<S><C>
- -----------------------------------------------------------------------------
CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (1) I have mailed or delivered
an application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration office or
(2) I intend to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification number by the
time of payment, 31% of all reportable cash payments made to me thereafter
will be withheld until I provide a taxpayer identification number to the
payer and that, if I do not provide my taxpayer identification number within
sixty days, such retained amounts shall be remitted to the IRS as backup
withholding.
Signature_____________________________________________Date__________________
- -----------------------------------------------------------------------------
</TABLE>
14
IMPORTANT: THIS LETTER OF TRANSMITTAL AND CONSENT (OR FACSIMILE THEREOF),
PROPERLY COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE
GUARANTEES AND CERTIFICATES RELATING TO THE DEBENTURES OR CONFIRMATION OF
BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) MUST BE RECEIVED BY THE
DEPOSITARY ON OR PRIOR TO THE TPI CONSENT DEADLINE FOR HOLDERS WISHING TO
RECEIVE THE CONSENT PAYMENT AND ON OR PRIOR TO THE EXPIRATION DATE FOR
HOLDERS WISHING TO TENDER THEIR DEBENTURES.
THE DEPOSITARY FOR THE OFFER IS:
THE BANK OF NEW YORK
BY MAIL, OVERNIGHT COURIER OR HAND:
101 Barclay Street
Floor 7 East
New York, New York 10286
Attn: Reorganization Section, Kin Lau
By Facsimile for Eligible Institutions: (212) 815-6339
To Confirm by Telephone: (212) 815-3750
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Bankers and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: (888) 242-8157
THE DEALER MANAGER FOR THE OFFER IS:
BANC OF AMERICA SECURITIES LLC
100 North Tryon Street, 7th Floor
Charlotte, North Carolina 28255
Attn: High Yield Special Products
Collect: (704) 388-4813
Toll Free: (888) 292-0070
15
NOTICE OF GUARANTEED DELIVERY AND CONSENT
to Tender and Give Consent in Respect of
LIQUID YIELD OPTION NOTES DUE 2004 (ZERO COUPON - SUBORDINATED)
CUSIP NO. 825039 AC 4
of
SHONEY'S, INC.
- -----------------------------------------------------------------------------
THE OFFER WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON APRIL 24, 2000,
UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE "EXPIRATION
DATE"). HOLDERS OF LYONS MUST TENDER THEIR LYONS ON OR PRIOR TO THE
EXPIRATION DATE TO RECEIVE THE TENDER OFFER CONSIDERATION. THE CONSENT
SOLICITATION WITH RESPECT TO THE LYONS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON _______________, 2000, UNLESS EXTENDED (SUCH TIME AND DATE, AS
IT MAY BE EXTENDED, THE "LYONS CONSENT DEADLINE"). TO RECEIVE A CONSENT
PAYMENT, HOLDERS OF LYONS MUST TENDER THEIR LYONS AND PROVIDE THEIR CONSENTS
TO THE PROPOSED AMENDMENTS (AND NOT HAVE REVOKED SUCH CONSENTS) AT OR PRIOR
TO THE LYONS CONSENT DEADLINE.
- -----------------------------------------------------------------------------
As set forth under the caption "The Tender Offers and Consent
Solicitations-Guaranteed Delivery" in the Purchase Offer and Consent
Solicitation Statement by Shoney's, Inc. dated March 27, 2000 (the "Purchase
Offer") and the related Letter of Transmittal and Consent (as it may be
supplemented or amended from time to time, the "Letter of Transmittal and
Consent," and together with the Purchase Offer, the "Offer") to purchase all
of the outstanding LYONs (as defined below), this form may be used to
purchase LYONs pursuant to the Offer after the LYONs Consent Deadline if
certificates representing LYONs are not immediately available or the
certificates representing LYONs and all other required documents cannot be
delivered to the Depositary on or prior to the Expiration Date (as defined in
the Purchase Offer) or if timely compliance with the procedures for delivery
by book-entry transfer of LYONs is not possible. Such properly completed and
duly executed form must be delivered (via mail, hand delivery or facsimile)to
and received by the Depositary on or prior to 11:59 P.M., New York City time,
on the Expiration Date at the address below and must include a guarantee by
an Eligible Institution.
The terms and conditions of the Offer are incorporated by reference in
this Notice of Guaranteed Delivery and Consent. Capitalized terms used, but
not defined, in this Notice of Guaranteed Delivery and Consent which are
defined in the Offer have the respective meanings set out in the Offer.
THE DEPOSITARY FOR THE OFFER IS
THE BANK OF NEW YORK
BY MAIL, OVERNIGHT COURIER OR HAND:
101 Barclay Street
Floor 7 East
New York, New York 10286
Attn: Reorganization Section, Kin Lau
By Facsimile for Eligible Institutions: (212) 815-6339
To Confirm by Telephone: (212) 815-3750
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Bankers and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: (800) 242-8157
DELIVERY OF THIS INSTRUMENT TO THE DEPOSITARY AT AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY AND
CONSENT OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
HOLDERS SHOULD NOTE THAT THE PROCEDURES DESCRIBED HEREIN ARE NOT AVAILABLE
UNTIL AFTER THE LYONS CONSENT DEADLINE AND THAT TENDERS PURSUANT TO THE
GUARANTEED DELIVERY PROCEDURES WILL NOT BE ACCEPTED PRIOR TO THAT TIME OR
ENTITLE A HOLDER TO RECEIVE A CONSENT PAYMENT,
This form is not to be used to guarantee signatures. If a signature on
a Letter of Transmittal is required to be guaranteed by an Eligible
Institution under the instructions thereto, such signature guarantee must
appear in the applicable space provided in the signature box in the Letter of
Transmittal.
2
TO: SHONEY'S, INC.
AND TO: THE BANK OF NEW YORK, AS DEPOSITARY
The undersigned hereby tenders to Shoney's, Inc. upon the terms and
subject to the conditions set forth in the Offer, receipt of which is hereby
acknowledged, the principal amount at maturity of Liquid Yield Option Notes
Due 2004 (Zero Coupon - Subordinated) (the "LYONs"), pursuant to the
guaranteed delivery procedure set forth in the Purchase Offer under the
caption "The Tender Offers and Consent Solicitations-Guaranteed Delivery."
IF PRIOR TO THE EXPIRATION DATE, ANY HOLDER TENDERS LYONS BY SUBMITTING A
NOTICE OF GUARANTEED DELIVERY AND CONSENT SUCH HOLDER WILL BE DEEMED, BY
ACCEPTANCE OF THE OFFER, TO CONSENT TO THE PROPOSED AMENDMENTS WITH RESPECT
TO ALL SUCH TENDERED LYONS.
3
- -----------------------------------------------------------------------------
______________________________________ ___________________________________
______________________________________ ___________________________________
Certificate Nos. (if available)
___________________________________
___________________________________
Name(s) of Holder(s)
(Please Type or Print)
______________________________________ Address(es) of Holder(s):
Aggregate Principal Amount at Maturity
of LYONs Tendered
____________________________________
_____________________________________
_____________________________________
Postal/Zip Code
Telephone No.:
(_______)____________________________
(Area Code)
____________________________________
Signature(s)
____________________________________
Date
_________________________________________________________________________
Check box if LYONs will be delivered by
book-entry transfer: [ ]
____________________________________
Transaction Code Number
____________________________________
Name of Tendering Institution
____________________________________
Account No.
- ----------------------------------------------------------------------------
4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, in the case of Letters of Transmittal being submitted
to the Depositary, a member in good standing of the Securities Transfer
Agents Medallion Program in the United States or any other bank, broker,
dealer, credit union, savings association or other entity that is an
"eligible guarantor institution," as such term is defined in Rule l7Ad-15
under the Securities Exchange Act of 1934, guarantees to deliver to the
Depositary either the certificates evidencing all tendered LYONs, in proper
form, or to deliver LYONs pursuant to the procedures for book-entry transfer
in the Depositary's account at The Depository Trust Company, together with
the Letter of Transmittal (or a facsimile thereof), properly completed and
duly executed, with any required signature guarantees, or an Agent's Message
(as defined in the Purchase Offer), and any other required documents, to the
principal office of the Depositary as set forth in the Letter of Transmittal,
at or before 11:59 p.m. (New York City time) within three New York Stock
Exchange trading days of the date of the execution of the Notice of
Guaranteed Delivery and Consent.
- -----------------------------------------------------------------------------
____________________________________ ________________________________
Name of Firm Authorized Signature
___________________________________
Address Title__________________________
____________________________________
Postal/Zip Code Name___________________________
(Please Type or Print)
____________________________________
Telephone No. (including Area Code)
Dated:______________________,2000
- ----------------------------------------------------------------------------
NOTE: DO NOT SEND CERTIFICATES FOR DEBENTURES WITH THIS NOTICE.
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL
5
NOTICE OF GUARANTEED DELIVERY AND CONSENT
to Tender and Give Consent in Respect of
8-1/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2002
CUSIP NO. 872623 AA 1
of
SHONEY'S, INC.
- -----------------------------------------------------------------------------
THE OFFER WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON APRIL 24, 2000,
UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE "EXPIRATION
DATE"). HOLDERS OF DEBENTURES MUST TENDER THEIR DEBENTURES ON OR PRIOR TO
THE EXPIRATION DATE TO RECEIVE THE TENDER OFFER CONSIDERATION. THE CONSENT
SOLICITATION WITH RESPECT TO THE DEBENTURES WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON APRIL 10, 2000, UNLESS EXTENDED (SUCH TIME AND DATE, AS IT
MAY BE EXTENDED, THE "TPI CONSENT DEADLINE"). TO RECEIVE A CONSENT PAYMENT,
HOLDERS OF DEBENTURES MUST TENDER THEIR DEBENTURES AND PROVIDE THEIR CONSENTS
TO THE PROPOSED AMENDMENTS (AND NOT HAVE REVOKED SUCH CONSENTS) AT OR PRIOR
TO THE TPI CONSENT DEADLINE.
- ----------------------------------------------------------------------------
As set forth under the caption "The Tender Offers and Consent
Solicitations-Guaranteed Delivery" in the Purchase Offer and Consent
Solicitation Statement by Shoney's, Inc. dated March 27, 2000 (as it may be
supplemented or amended from time to time, the "Purchase Offer") and the
related Letter of Transmittal and Consent (as it may be supplemented or
amended from time to time, the "Letter of Transmittal and Consent," and
together with the Purchase Offer, the "Offer") to purchase all of the
outstanding Debentures (as defined below), this form may be used to tender
Debentures pursuant to the Offer after the TPI Consent Deadline if
certificates representing Debentures are not immediately available or the
certificates representing Debentures and all other required documents cannot
be delivered to the Depositary on or prior to the Expiration Date (as defined
in the Purchase Offer) or if timely compliance with the procedures for
delivery by book-entry transfer of Debentures is not possible. Such properly
completed and duly executed form must be delivered (via mail, hand delivery
or facsimile) to and received by the Depositary on or prior to 11:59 P.M.,
New York City time, on the Expiration Date at the address below and must
include a guarantee by an Eligible Institution.
The terms and conditions of the Offer are incorporated by reference in
this Notice of Guaranteed Delivery and Consent. Capitalized terms used, but
not defined, in this Notice of Guaranteed Delivery and Consent which are
defined in the Purchase Offer have the respective meanings set out in the
Purchase Offer.
THE DEPOSITARY FOR THE OFFER IS
THE BANK OF NEW YORK
BY MAIL, OVERNIGHT COURIER OR HAND:
101 Barclay Street
Floor 7 East
New York, New York 10286
Attn: Reorganization Section, Kin Lau
By Facsimile for Eligible Institutions: (212) 815-6339
To Confirm by Telephone: (212) 815-3750
THE INFORMATION AGENT FOR THE OFFER IS:
D.F. KING & CO., INC.
77 Water Street
New York, New York 10005
Bankers and Brokers Call Collect: (212) 269-5550
All Others Call Toll-Free: (888) 242-8157
DELIVERY OF THIS INSTRUMENT TO THE DEPOSITARY AT AN ADDRESS OTHER THAN AS SET
FORTH ABOVE, OR TRANSMISSION OF THIS NOTICE OF GUARANTEED DELIVERY AND
CONSENT OTHER THAN AS SET FORTH ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
HOLDERS SHOULD NOTE THAT THE PROCEDURES DESCRIBED HEREIN ARE NOT AVAILABLE
UNTIL AFTER THE TPI CONSENT DEADLINE AND THAT TENDERS PURSUANT TO THE
GUARANTEED DELIVERY PROCEDURES WILL NOT BE ACCEPTED PRIOR TO THAT TIME OR
ENTITLE A HOLDER TO RECEIVE A CONSENT PAYMENT,
This form is not to be used to guarantee signatures. If a signature on
a Letter of Transmittal is required to be guaranteed by an Eligible
Institution under the instructions thereto, such signature guarantee must
appear in the applicable space provided in the signature box in the Letter of
Transmittal.
2
TO: SHONEY'S, INC.
AND TO: THE BANK OF NEW YORK, AS DEPOSITARY
The undersigned hereby tenders to Shoney's, Inc. (the "Company") upon
the terms and subject to the conditions set forth in the Offer, receipt of
which is hereby acknowledged, the principal amount of 8-1/4% Convertible
Subordinated Debentures Due 2002 (the "Debentures") specified below and
Consents relating thereto, pursuant to the guaranteed delivery procedure set
forth in the Purchase Offer under the caption "The Tender Offers and Consent
Solicitations-Guaranteed Delivery."
IF PRIOR TO THE EXPIRATION DATE, ANY HOLDER TENDERS DEBENTURES BY SUBMITTING
A NOTICE OF GUARANTEED DELIVERY AND CONSENT SUCH HOLDER WILL BE DEEMED, BY
ACCEPTANCE OF THE OFFER, TO CONSENT TO THE PROPOSED AMENDMENTS WITH RESPECT
TO ALL SUCH TENDERED DEBENTURES.
3
- -----------------------------------------------------------------------------
______________________________________ ___________________________________
______________________________________ ___________________________________
Certificate Nos. (if available)
___________________________________
___________________________________
Name(s) of Holder(s)
(Please Type or Print)
________________________________________ Addresses of Holder(s):
Aggregate Principal Amount of Debentures
Tendered
____________________________________
_____________________________________
_____________________________________
Postal/Zip Code
Telephone No.:
(_______)____________________________
(Area Code)
____________________________________
Signature(s)
____________________________________
Date
_________________________________________________________________________
Check box if Debentures will be delivered by
Book-entry transfer: [ ]
____________________________________
Transaction Code Number
____________________________________
Name of Tendering Institution
____________________________________
Account No.
- ----------------------------------------------------------------------------
4
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
The undersigned, in the case of Letters of Transmittal being submitted
to the Depositary, a member of a registered national securities exchange or
the National Association of Securities Dealers, Inc. or a commercial bank or
trust company having an office in the United States, guarantees to deliver to
the Depositary either the certificates evidencing all tendered Debentures, in
proper form, or to deliver Debentures pursuant to the procedures for book-
entry transfer in the Depositary's account at The Depository Trust Company,
together with the Letter of Transmittal and Consent (or a facsimile thereof),
properly completed and duly executed, with any required signature guarantees,
or an Agent's Message (as defined in the Purchase Offer), and any other
required documents, to the principal office of the Depositary as set forth in
the Letter of Transmittal, within three New York Stock Exchange trading days
of the date of the execution of the Notice of Guaranteed Delivery and
Consent.
- -----------------------------------------------------------------------------
____________________________________ ________________________________
Name of Firm Authorized Signature
___________________________________
Address Title:_________________________
____________________________________
Postal/Zip Code Name___________________________
(Please Type or Print)
____________________________________
Telephone No. (including Area Code)
Dated:______________________,2000
- ----------------------------------------------------------------------------
NOTE: DO NOT SEND CERTIFICATES FOR DEBENTURES WITH THIS NOTICE.
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL
5
SHONEY'S, INC.
Offer to Purchase for Cash and Solicitation of Consents
Relating to its
LIQUID YIELD OPTION NOTES DUE 2004 (ZERO COUPON - SUBORDINATED)
CUSIP NO. 825039 AC 4
- -----------------------------------------------------------------------------
THIS OFFER WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON APRIL 24, 2000,
UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE "EXPIRATION
DATE"). HOLDERS OF LYONS MUST TENDER THEIR LYONS ON OR PRIOR TO THE
EXPIRATION DATE TO RECEIVE THE TENDER OFFER CONSIDERATION. THE CONSENT
SOLICITATION WITH RESPECT TO THE LYONS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON THE 10TH CALENDAR DAY AFTER THE LYONS CONSENT SOLICITATION
MATERIALS RECEIVE REGULATORY CLEARANCE AND ARE MAILED IN DEFINITIVE FORM TO
REGISTERED HOLDERS OF THE LYONS, UNLESS EXTENDED (SUCH TIME AND DATE, AS IT
MAY BE EXTENDED, THE "LYONS CONSENT DEADLINE"). TO RECEIVE A CONSENT
PAYMENT, HOLDERS OF LYONS MUST TENDER THEIR LYONS AND PROVIDE THEIR CONSENTS
TO THE PROPOSED AMENDMENTS (AND NOT HAVE REVOKED SUCH CONSENTS) AT OR PRIOR
TO THE LYONS CONSENT DEADLINE. HOLDERS OF LYONS WILL NOT BE ABLE TO CONSENT
TO THE PROPOSED AMENDMENTS TO THE LYONS INDENTURE UNTIL THE LYONS CONSENT
SOLICITATION MATERIALS RECEIVE REGULATORY CLEARANCE AND ARE MAILED IN
DEFINITIVE FORM TO SUCH HOLDERS, WHICH IS EXPECTED TO OCCUR ON OR SHORTLY
AFTER APRIL 6, 2000.
- -----------------------------------------------------------------------------
March 27, 2000
TO BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
Shoney's, Inc., a Tennessee corporation (the "Company"), is offering to
purchase for cash, on the terms and subject to the conditions set forth in
the Purchase Offer and Consent Solicitation Statement dated March 27, 2000
(as it may be supplemented or amended from time to time, the "Purchase
Offer") and the related Letter of Transmittal (as it may be supplemented or
amended from time to time, the "Letter of Transmittal," and, together with
the Purchase Offer, the "Offer"), all of its outstanding Liquid Yield Option
Notes Due 2004 (Zero Coupon - Subordinated) (the "LYONs"). Enclosed for
your consideration are copies of the Purchase Offer and Letter of
Transmittal. Capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to them in the Purchase Offer.
In conjunction with the Offer, the Company also is soliciting consents
(the "Solicitation") from holders of the LYONs (each, a "Holder" and,
collectively, the "Holders") of at least a majority of the aggregate
principal amount at maturity of the outstanding LYONs (the "Consents") to the
proposed amendments described in the Purchase Offer (the "Proposed
Amendments") to the Indenture dated as of April 1, 1989, between the Company
and The Bank of New York, as successor to Sovran Bank/Central South, as
trustee, pursuant to which the LYONs were issued (the "Indenture"). The
Proposed Amendments would remove limitations on the ability of the Company to
consolidate with or merge into, or to convey, transfer or lease all or
substantially all its assets to, another person. HOLDERS OF LYONS CAN NOT
CONSENT TO THE PROPOSED AMENDMENTS TO THE LYONS INDENTURE UNTIL THE LYONS
CONSENT SOLICITATION MATERIALS RECEIVE REGULATORY CLEARANCE AND ARE MAILED IN
DEFINITIVE FORM TO SUCH HOLDERS, WHICH IS EXPECTED TO OCCUR ON OR SHORTLY
AFTER APRIL 6, 2000.
For your information and for forwarding to your clients for whom you hold the
LYONs registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. The Purchase Offer;
2. A Letter of Transmittal for the LYONs for your use and for
the information of your clients, together with Guidelines
for Certification of Taxpayer Identification Number on
Substitute Form W-9 providing information relating to backup
U.S. federal income tax withholding;
3. A printed form of letter, including a Letter of
Instructions, which may be sent to your clients for whose
accounts you hold LYONs registered in your name or in the
name of your nominee, with space provided for obtaining such
clients' instructions with regard to the Offer; and
4. A return envelope addressed to The Bank of New York, the
Depositary.
DTC participants will be able to execute tenders and, after the LYONs
solicitation materials receive regulatory clearance and are mailed in
definitive form to the LYONs Holders, deliver Consents through the DTC
Automated Tender Offer Program.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE TO OBTAIN
THEIR INSTRUCTIONS.
Any inquiries you may have with respect to the Offer should be addressed
to D.F. King & Co., Inc., the Information Agent for the Offer, or Banc of
America Securities LLC, the Dealer Manager for the Offer, at their respective
addresses and telephone numbers as set forth on the back cover of the
enclosed Purchase Offer. Additional copies of the enclosed materials may be
obtained from the Information Agent or the Dealer Manager.
Very truly yours,
SHONEY'S, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF THE COMPANY, THE DEALER MANAGER, THE INFORMATION AGENT OR THE
DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE
ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER
THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
IMPORTANT: THE LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF), WITH ANY
REQUIRED SIGNATURE GUARANTEES, TOGETHER WITH THE LYONS AND ALL OTHER REQUIRED
DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY AND CONSENT, MUST BE RECEIVED
BY THE DEPOSITARY AT OR PRIOR TO 11:59 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE IN ORDER FOR HOLDERS TO RECEIVE THE TENDER OFFER
CONSIDERATION. IN ORDER TO RECEIVE THE CONSENT PAYMENT, HOLDERS OF LYONS MUST
TENDER THEIR LYONS AND PROVIDE THEIR CONSENTS TO THE PROPOSED AMENDMENTS (AND
NOT HAVE REVOKED SUCH CONSENTS) AT OR PRIOR TO THE LYONS CONSENT DEADLINE.
HOLDERS OF LYONS CAN NOT CONSENT TO THE PROPOSED AMENDMENTS TO THE LYONS
INDENTURE UNTIL THE LYONS CONSENT SOLICITATION MATERIALS RECEIVE REGULATORY
CLEARANCE AND ARE MAILED IN DEFINITIVE FORM TO SUCH HOLDERS, WHICH IS
EXPECTED TO OCCUR ON OR SHORTLY AFTER APRIL 6, 2000.
2
SHONEY'S, INC.
Offer to Purchase for Cash and Solicitation of Consents
Relating to its
LIQUID YIELD OPTION NOTES DUE 2004 (ZERO COUPON - SUBORDINATED)
CUSIP NO. 825039 AC 4
- -----------------------------------------------------------------------------
THIS OFFER WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON APRIL 24, 2000,
UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE "EXPIRATION
DATE"). HOLDERS OF LYONS MUST TENDER THEIR LYONS ON OR PRIOR TO THE
EXPIRATION DATE TO RECEIVE THE TENDER OFFER CONSIDERATION. THE CONSENT
SOLICITATION WITH RESPECT TO THE LYONS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON ___________________, 2000, UNLESS EXTENDED (SUCH TIME AND DATE,
AS IT MAY BE EXTENDED, THE "LYONS CONSENT DEADLINE"). TO RECEIVE A CONSENT
PAYMENT, HOLDERS OF LYONS MUST TENDER THEIR LYONS AND PROVIDE THEIR CONSENTS
TO THE PROPOSED AMENDMENTS (AND NOT HAVE REVOKED SUCH CONSENTS) AT OR PRIOR
TO THE LYONS CONSENT DEADLINE.
- -----------------------------------------------------------------------------
______, 2000
TO BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
Shoney's, Inc., a Tennessee corporation (the "Company"), is offering to
purchase for cash, on the terms and subject to the conditions set forth in
the Purchase Offer and Consent Solicitation Statement dated March 27, 2000
(as it may be supplemented or amended from time to time, the "Purchase
Offer") and the related Letter of Transmittal and Consent (as it may be
supplemented or amended from time to time, the "Letter of Transmittal and
Consent," and, together with the Purchase Offer, the "Offer"), all of its
outstanding Liquid Yield Option Notes due 2004 (Zero Coupon - Subordinated)
(the "LYONs"). Enclosed for your consideration are copies of the Purchase
Offer and Letter of Transmittal and Consent. Capitalized terms used herein
and not otherwise defined herein shall have the meanings ascribed to them in
the Purchase Offer.
In conjunction with the Offer, the Company also is soliciting consents
(the "Solicitation") from holders of the LYONs (each, a "Holder" and,
collectively, the "Holders") of at least a majority of the aggregate
principal amount at maturity of the outstanding LYONs (the "Consents") to the
proposed amendments described in the Purchase Offer (the "Proposed
Amendments") to the Indenture dated as of April 1, 1989, between the Company
and The Bank of New York as successor to Sovran Bank/Central South, as
trustee, pursuant to which the LYONs were issued (the "Indenture"). The
Proposed Amendments would remove limitations on the ability of the Company to
consolidate with or merge into, or to convey, transfer or lease all or
substantially all its assets to, another person.
For your information and for forwarding to your clients for whom you
hold the LYONs registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. The Purchase Offer;
2. A Letter of Transmittal and Consent for the LYONs for your
use and for the information of your clients, together with
Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 providing information relating
to backup U.S. federal income tax
withholding. This Letter of Transmittal and Consent is for
use (i) in tendering LYONs and delivering Consents with
respect thereto after the first distribution of definitive
consent solicitation material for the LYONs and (ii)
delivering Consents with respect to LYONs tendered prior to
the first distribution of definitive consent solicitation
material;
3. A printed form of letter, including a Letter of
Instructions, which may be sent to your clients for whose
accounts you hold LYONs registered in your name or in the
name of your nominee, with space provided for obtaining such
clients' instructions with regard to the Offer; and
4. A Notice of Guaranteed Delivery and Consent to be used in
tendering LYONs if certificates for the LYONs are not lost
but are not immediately available, or if the procedure for
book-entry transfer cannot be completed on or before the
Expiration Date.
5. A return envelope addressed to The Bank of New York, the
Depositary.
DTC participants will be able to execute tenders and deliver Consents
through the DTC Automated Tender Offer Program.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE TO OBTAIN
THEIR INSTRUCTIONS.
Any inquiries you may have with respect to the Offer should be addressed
to D.F. King & Co., Inc., the Information Agent for the Offer, or Banc of
America Securities LLC, the Dealer Manager for the Offer, at their respective
addresses and telephone numbers as set forth on the back cover of the
enclosed Purchase Offer. Additional copies of the enclosed materials may be
obtained from the Information Agent or the Dealer Manager.
Very truly yours,
SHONEY'S, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF THE COMPANY, THE DEALER MANAGER, THE INFORMATION AGENT OR THE
DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE
ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER
THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
IMPORTANT: THE LETTER OF TRANSMITTAL AND CONSENT (OR A FACSIMILE THEREOF),
WITH ANY REQUIRED SIGNATURE GUARANTEES, TOGETHER WITH THE LYONS AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY AT OR PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE LYONS CONSENT DEADLINE IN ORDER FOR HOLDERS
TO RECEIVE THE CONSENT PAYMENT. THE LETTER OF TRANSMITTAL AND CONSENT (OR A
FACSIMILE THEREOF), TOGETHER WITH THE LYONS AND ALL OTHER REQUIRED DOCUMENTS
OR THE NOTICE OF GUARANTEED DELIVERY AND CONSENT, MUST BE RECEIVED BY THE
DEPOSITARY AT OR PRIOR TO 11:59 P.M., NEW YORK CITY TIME, ON THE EXPIRATION
DATE IN ORDER FOR HOLDERS TO RECEIVE THE TENDER OFFER CONSIDERATION.
2
SHONEY'S, INC.
Offer to Purchase for Cash and Solicitation of Consents
Relating to its
8-1/4 % CONVERTIBLE SUBORDINATED DEBENTURES DUE 2002
CUSIP NO. 872623 AA 1
- -----------------------------------------------------------------------------
THIS OFFER WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON APRIL 24, 2000,
UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE "EXPIRATION
DATE"). HOLDERS OF DEBENTURES MUST TENDER THEIR DEBENTURES ON OR PRIOR TO
THE EXPIRATION DATE TO RECEIVE THE TENDER OFFER CONSIDERATION. THE CONSENT
SOLICITATION WITH RESPECT TO THE DEBENTURES WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON APRIL 10, 2000, UNLESS EXTENDED (SUCH TIME AND DATE, AS IT
MAY BE EXTENDED, THE "TPI CONSENT DEADLINE"). TO RECEIVE A CONSENT PAYMENT,
HOLDERS OF DEBENTURES MUST TENDER THEIR DEBENTURES AND PROVIDE THEIR CONSENTS
TO THE PROPOSED AMENDMENTS (AND NOT HAVE REVOKED SUCH CONSENTS) AT OR PRIOR
TO THE TPI CONSENT DEADLINE.
- -----------------------------------------------------------------------------
March 27, 2000
TO BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
Shoney's, Inc., a Tennessee corporation (the "Company"), is offering to
purchase for cash, on the terms and subject to the conditions set forth in
the Purchase Offer and Consent Solicitation Statement dated March 27, 2000
(as it may be supplemented or amended from time to time, the "Purchase
Offer") and the related Letter of Transmittal and Consent (as it may be
supplemented or amended from time to time, the "Letter of Transmittal and
Consent," and, together with the Purchase Offer, the "Offer"), all of its
outstanding 8 1/4% Convertible Subordinated Debentures due July 15, 2002 (the
"Debentures"). Enclosed for your consideration are copies of the Purchase
Offer and Letter of Transmittal and Consent. Capitalized terms used herein
and not otherwise defined herein shall have the meanings ascribed to them in
the Purchase Offer.
In conjunction with the Offer, the Company also is soliciting consents
(the "Solicitation") from holders of the Debentures (each, a "Holder" and,
collectively, the "Holders") of at least a majority of the aggregate
principal amount at maturity of the outstanding Debentures (the "Consents")
to the proposed amendments described in the Purchase Offer (the "Proposed
Amendments") to the Indenture dated as of July 15, 1992, as amended by a
First Supplemental Indenture dated as of September 6, 1996, between and among
the Company (as successor to TPI Enterprises, Inc.), TPI Restaurants, Inc.,
as guarantor, and The Bank of New York, as trustee (the "Trustee"), pursuant
to which the Debentures were issued (the "Indenture"). The Proposed
Amendments would: (i) eliminate substantially all of the covenants in the
Indenture other than the covenants requiring payment of interest on and
principal of the Debentures when due, requiring the maintenance of an office
for purposes of making payment on the Debentures, providing for certain
duties on the paying agent for the Debentures and requiring the Company and
the Guarantor to make certain certifications to the Trustee, (ii) remove
limitations on the ability of the Company and the Guarantor to consolidate
with or merge into, or to sell, convey, transfer, lease or otherwise dispose
of its properties and assets substantially as an entirety to, another Person
(as defined in the Indenture) or to permit another Person to consolidate with
or merge into, or to sell, convey, transfer, lease or otherwise dispose of
its properties and assets substantially as an entirety to the Company and the
Guarantor, and (iii) eliminate certain Events of Default under the Indenture.
For your information and for forwarding to your clients for whom you
hold the Debentures registered in your name or in the name of your nominee,
we are enclosing the following documents:
1. The Purchase Offer;
2. A Letter of Transmittal and Consent for the Debentures for
your use and for the information of your clients, together
with Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 providing information relating
to backup U.S. federal income tax withholding;
3. A printed form of letter, including a Letter of
Instructions, which may be sent to your clients for whose
accounts you hold Debentures registered in your name or in
the name of your nominee, with space provided for obtaining
such clients' instructions with regard to the Offer; and
4. A Notice of Guaranteed Delivery and Consent to be used in
tendering Debentures if certificates for the Debentures are
not lost but are not immediately available, or if the
procedure for book-entry transfer cannot be completed on or
before the Expiration Date.
5. A return envelope addressed to The Bank of New York, the
Depositary.
DTC participants will be able to execute tenders and deliver Consents
through the DTC Automated Tender Offer Program.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE TO OBTAIN
THEIR INSTRUCTIONS.
Any inquiries you may have with respect to the Offer should be addressed
to D.F. King & Co., Inc., the Information Agent for the Offer, or Banc of
America Securities LLC, the Dealer Manager for the Offer, at their respective
addresses and telephone numbers as set forth on the back cover of the
enclosed Purchase Offer. Additional copies of the enclosed materials may be
obtained from the Information Agent or the Dealer Manager.
Very truly yours,
SHONEY'S, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
THE AGENT OF THE COMPANY, TPI RESTAURANTS, INC., THE DEALER MANAGER, THE
INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOU OR ANY OTHER PERSON TO
USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION
WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS
CONTAINED THEREIN.
IMPORTANT: THE LETTER OF TRANSMITTAL AND CONSENT (OR A FACSIMILE THEREOF),
WITH ANY REQUIRED SIGNATURE GUARANTEES, TOGETHER WITH THE DEBENTURES AND ALL
OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY AT OR PRIOR TO
5:00 P.M., NEW YORK CITY TIME, ON THE TPI CONSENT DEADLINE IN ORDER FOR
HOLDERS TO RECEIVE THE CONSENT PAYMENT. THE LETTER OF TRANSMITTAL AND
CONSENT (OR A FACSIMILE THEREOF), TOGETHER WITH THE DEBENTURES AND ALL OTHER
REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY AND CONSENT, MUST BE
RECEIVED BY THE DEPOSITARY AT OR PRIOR TO 11:59 P.M., NEW YORK CITY TIME, ON
THE EXPIRATION DATE IN ORDER FOR HOLDERS TO RECEIVE THE TENDER OFFER
CONSIDERATION.
2
SHONEY'S, INC.
Offer to Purchase for Cash and Solicitation of Consents
Relating to its
LIQUID YIELD OPTION NOTES DUE 2004 (ZERO COUPON - SUBORDINATED)
CUSIP NO. 825039 AC 4
- -----------------------------------------------------------------------------
THIS OFFER WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON APRIL 24, 2000,
UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE "EXPIRATION
DATE"). HOLDERS OF LYONS MUST TENDER THEIR LYONS ON OR PRIOR TO THE
EXPIRATION DATE TO RECEIVE THE TENDER OFFER CONSIDERATION. THE CONSENT
SOLICITATION WITH RESPECT TO THE LYONS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON THE 10TH CALENDAR DAY AFTER THE LYONS CONSENT SOLICITATION
MATERIALS RECEIVE REGULATORY CLEARANCE AND ARE MAILED IN DEFINITIVE FORM TO
REGISTERED HOLDERS OF THE LYONS, UNLESS EXTENDED (SUCH TIME AND DATE, AS IT
MAY BE EXTENDED, THE "LYONS CONSENT DEADLINE"). TO RECEIVE A CONSENT PAYMENT,
HOLDERS OF LYONS MUST TENDER THEIR LYONS AND PROVIDE THEIR CONSENTS TO THE
PROPOSED AMENDMENTS (AND NOT HAVE REVOKED SUCH CONSENTS) AT OR PRIOR TO THE
LYONS CONSENT DEADLINE. HOLDERS OF LYONS WILL NOT BE ABLE TO CONSENT TO THE
PROPOSED AMENDMENTS TO THE LYONS INDENTURE UNTIL THE LYONS CONSENT
SOLICITATION MATERIALS RECEIVE REGULATORY CLEARANCE AND ARE MAILED IN
DEFINITIVE FORM TO SUCH HOLDERS, WHICH IS EXPECTED TO OCCUR ON OR SHORTLY
AFTER APRIL 6, 2000.
- -----------------------------------------------------------------------------
March 27, 2000
TO OUR CLIENTS:
Shoney's, Inc., a Tennessee corporation (the "Company"), is offering to
purchase for cash, on the terms and subject to the conditions set forth in
the Purchase Offer and Consent Solicitation Statement dated March 27, 2000
(as it may be supplemented or amended from time to time, the "Purchase
Offer") and the related Letter of Transmittal (as it may be supplemented or
amended from time to time, the "Letter of Transmittal," and, together with
the Purchase Offer, the "Offer"), all of its outstanding Liquid Yield Option
Notes Due 2004 (Zero Coupon - Subordinated) (the "LYONs"). Enclosed for your
consideration are copies of the Purchase Offer and Letter of Transmittal.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings ascribed to them in the Purchase Offer.
In conjunction with the Offer, the Company also is soliciting consents
(the "Solicitation") from holders of the LYONs (each, a "Holder" and,
collectively, the "Holders") of at least a majority of the aggregate
principal amount at maturity of the outstanding LYONs (the "Consents") to the
proposed amendments described in the Purchase Offer (the "Proposed
Amendments") to the Indenture dated as of April 1, 1989, between the Company
and The Bank of New York, as successor to Sovran Bank/Central South, as
trustee, pursuant to which the LYONs were issued (the "Indenture"). The
Proposed Amendments would remove limitations on the ability of the Company to
consolidate with or merge into, or to convey, transfer or lease all or
substantially all its assets to, another person. HOLDERS OF LYONS CAN NOT
CONSENT TO THE PROPOSED AMENDMENTS TO THE LYONS INDENTURE UNTIL THE LYONS
CONSENT SOLICITATION MATERIALS RECEIVE REGULATORY CLEARANCE AND ARE MAILED IN
DEFINITIVE FORM TO SUCH HOLDERS, WHICH IS EXPECTED TO OCCUR ON OR SHORTLY
AFTER APRIL 6, 2000.
This material is being forwarded to you as the beneficial owner of LYONs
held by us for your account but not registered in your name. The accompanying
Letter of Transmittal is furnished to you for informational purposes only and
may not be used by you to tender LYONs held by us for your account. A tender
of such LYONs may be made only by us as the registered Holder and only
pursuant to your instructions.
Accordingly, we request instructions as to whether you wish us to tender
with respect to the LYONs held by us for your account. If you wish to have us
tender your LYONs pursuant to the Offer, please so instruct us by completing,
executing and returning to us the instruction form that appears on the next
page.
IMPORTANT: THE LETTER OF TRANSMITTAL (OR A FACSIMILE THEREOF), WITH ANY
REQUIRED SIGNATURE GUARANTEES, TOGETHER WITH THE LYONS AND ALL OTHER REQUIRED
DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY AND CONSENT, MUST BE RECEIVED
BY THE DEPOSITARY AT OR PRIOR TO 11:59 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE IN ORDER FOR HOLDERS TO RECEIVE THE TENDER OFFER
CONSIDERATION. IN ORDER TO RECEIVE THE CONSENT PAYMENT, HOLDERS OF LYONS MUST
TENDER THEIR LYONS AND PROVIDE THEIR CONSENTS TO THE PROPOSED AMENDMENTS (AND
NOT HAVE REVOKED SUCH CONSENTS) AT OR PRIOR TO THE LYONS CONSENT DEADLINE .
HOLDERS OF LYONS CAN NOT CONSENT TO THE PROPOSED AMENDMENTS TO THE LYONS
INDENTURE UNTIL THE LYONS CONSENT SOLICITATION MATERIALS RECEIVE REGULATORY
CLEARANCE AND ARE MAILED IN DEFINITIVE FORM TO SUCH HOLDERS, WHICH IS
EXPECTED TO OCCUR ON OR SHORTLY AFTER APRIL 6, 2000.
2
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Offer by Shoney's, Inc. with
respect to its Liquid Yield Option Notes Due 2004 (Zero Coupon -
Subordinated).
THIS WILL INSTRUCT YOU TO TENDER THE PRINCIPAL AMOUNT AT MATURITY OF
LIQUID YIELD OPTION NOTES DUE 2004 (ZERO COUPON - SUBORDINATED) HELD BY YOU
FOR THE ACCOUNT OF THE UNDERSIGNED PURSUANT TO THE TERMS AND CONDITIONS SET
FORTH IN THE PURCHASE OFFER AND CONSENT SOLICITATION STATEMENT DATED MARCH
27, 2000, AND THE RELATED LETTER OF TRANSMITTAL.
- -----------------------------------------------------------------------------
Principal Amount at
Maturity
Held for Account of Principal Amount at Maturity
Type Holder(s) to be Tendered*
- -----------------------------------------------------------------------------
Liquid Yield Option
Notes Due 2004 (Zero
Coupon - Subordinated)
of Shoney's, Inc.
- -----------------------------------------------------------------------------
* Unless otherwise indicated, the entire principal amount at maturity
indicated in the box entitled "Principal Amount at Maturity Held for Account
of Holder(s)" will be tendered.
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Signature(s)
- -----------------------------------------------------------------------------
Please print name(s)
- -----------------------------------------------------------------------------
Address
- -----------------------------------------------------------------------------
Zip Code
- -----------------------------------------------------------------------------
Area Code and Telephone No.
- -----------------------------------------------------------------------------
Tax Identification or Social
Security No.
- -----------------------------------------------------------------------------
My Account Number with You
- -----------------------------------------------------------------------------
Date
- ----------------------------------------------------------------------------
3
SHONEY'S, INC.
Offer to Purchase for Cash and Solicitation of Consents
Relating to its
LIQUID YIELD OPTION NOTES DUE 2004 (ZERO COUPON - SUBORDINATED)
CUSIP NO. 825039 AC 4
- -----------------------------------------------------------------------------
THIS OFFER WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON APRIL 24, 2000,
UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE "EXPIRATION
DATE"). HOLDERS OF LYONS MUST TENDER THEIR LYONS ON OR PRIOR TO THE
EXPIRATION DATE TO RECEIVE THE TENDER OFFER CONSIDERATION. THE CONSENT
SOLICITATION WITH RESPECT TO THE LYONS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON ________________, 2000, UNLESS EXTENDED (SUCH TIME AND DATE, AS
IT MAY BE EXTENDED, THE "LYONS CONSENT DEADLINE"). TO RECEIVE A CONSENT
PAYMENT, HOLDERS OF LYONS MUST TENDER THEIR LYONS AND PROVIDE THEIR CONSENTS
TO THE PROPOSED AMENDMENTS (AND NOT HAVE REVOKED SUCH CONSENTS) AT OR PRIOR
TO THE LYONS CONSENT DEADLINE.
- -----------------------------------------------------------------------------
______, 2000
TO OUR CLIENTS:
Shoney's, Inc., a Tennessee corporation (the "Company"), is offering to
purchase for cash, on the terms and subject to the conditions set forth in
the Purchase Offer and Consent Solicitation Statement dated March 27, 2000
(as it may be supplemented or amended from time to time, the "Purchase
Offer") and the related Letter of Transmittal and Consent (as it may be
supplemented or amended from time to time, the "Letter of Transmittal and
Consent," and, together with the Purchase Offer, the "Offer"), all of its
outstanding Liquid Yield Option Notes (Zero Coupon - Subordinated) due 2004
(the "LYONs"). Enclosed for your consideration are copies of the Purchase
Offer and Letter of Transmittal and Consent. Capitalized terms used herein
and not otherwise defined herein shall have the meanings ascribed to them in
the Purchase Offer.
In conjunction with the Offer, the Company also is soliciting consents
(the "Solicitation") from holders of the LYONs (each, a "Holder" and,
collectively, the "Holders") of at least a majority of the aggregate
principal amount at maturity of the outstanding LYONs (the "Consents") to the
proposed amendments described in the Purchase Offer (the "Proposed
Amendments") to the Indenture dated as of April 1, 1989, between the Company
and The Bank of New York, as successor to Sovran Bank/Central South, as
trustee, pursuant to which the LYONs were issued (the "Indenture"). The
Proposed Amendments would remove limitations on the ability of the Company to
consolidate with or merge into, or to convey, transfer or lease all or
substantially all its assets to, another person.
This material is being forwarded to you as the beneficial owner of LYONs
held by us for your account but not registered in your name. The accompanying
Letter of Transmittal and Consent is furnished to you for informational
purposes only and may not be used by you to tender LYONs held by us for your
account. A tender of such LYONs may be made only by us as the registered
Holder and only pursuant to your instructions.
Accordingly, we request instructions as to whether you wish us to tender
and deliver a Consent with respect to the LYONs held by us for your account.
If you wish to have us tender your LYONs (and deliver a corresponding
Consent)
pursuant to the Offer, please so instruct us by completing, executing and
returning to us the instruction form that appears on the next page. If you
have previously tendered LYONs prior to the first distribution of definitive
consent solicitation material for the LYONs and wish to deliver a consent
with respect to such tendered LYONs, you also must instruct us by completing,
executing and returning to us the instruction form that appears on the next
page.
IMPORTANT: THE LETTER OF TRANSMITTAL AND CONSENT (OR A FACSIMILE THEREOF),
WITH ANY REQUIRED SIGNATURE GUARANTEES, TOGETHER WITH THE LYONS AND ALL OTHER
REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY AT OR PRIOR TO 5:00
P.M., NEW YORK CITY TIME, ON THE LYONS CONSENT DEADLINE IN ORDER FOR HOLDERS
TO RECEIVE THE CONSENT PAYMENT. THE LETTER OF TRANSMITTAL AND CONSENT (OR A
FACSIMILE THEREOF), WITH ANY REQUIRED SIGNATURE GUARANTEES, TOGETHER WITH THE
LYONS AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE OF GUARANTEED DELIVERY
AND CONSENT, MUST BE RECEIVED BY THE DEPOSITARY AT OR PRIOR TO 11:59 P.M.,
NEW YORK CITY TIME, ON THE EXPIRATION DATE IN ORDER FOR HOLDERS TO RECEIVE
THE TENDER OFFER CONSIDERATION.
2
<PAGE>
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Offer by Shoney's, Inc. with
respect to its Liquid Yield Option Notes Due 2004 (Zero Coupon -
Subordinated).
THIS WILL INSTRUCT YOU TO TENDER THE PRINCIPAL AMOUNT AT MATURITY OF
LIQUID YIELD OPTION NOTES DUE 2004 (ZERO COUPON - SUBORDINATED) HELD BY YOU
FOR THE ACCOUNT OF THE UNDERSIGNED (AND TO DELIVER A CORRESPONDING CONSENT)
PURSUANT TO THE TERMS AND CONDITIONS SET FORTH IN THE PURCHASE OFFER AND
CONSENT SOLICITATION STATEMENT DATED MARCH 27, 2000, AND THE RELATED LETTER
OF TRANSMITTAL AND CONSENT.
<TABLE>
<S><C>
- --------------------------------------------------------------------------------------------------
Principal
Amount at
Maturity
Tendered Prior
to the
Distribution of
Principal Definitive
Amount at Consent
Maturity to be Solicitation
Principal Amount at Tendered and as Material for
Maturity to which LYONs and for
Held for Account of Consents are to Which Consents
Type Holder(s) be Given* are to be Given*
- --------------------------------------------------------------------------------------------------
Liquid Yield Option Notes Due 2004
(Zero Coupon - Subordinated of
Shoney's, Inc.
- --------------------------------------------------------------------------------------------------
*Unless otherwise indicated, the entire principal amount at maturity indicated in the box entitled
"Principal Amount at Maturity Held for Account of Holder(s)" will be tendered (and a Consent with
respect thereto) will be given. A tendering Holder is required to Consent to the Proposed
Amendments with respect to all LYONs tendered by such Holder, except for LYONs tendered prior to
the first distribution of definitive consent solicitation material for the LYONs.
- --------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------
Signature(s)
- --------------------------------------------------------------------------------------------------
Please print name(s)
- --------------------------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------------------------
Zip Code
- --------------------------------------------------------------------------------------------------
Area Code and Telephone No.
- --------------------------------------------------------------------------------------------------
Tax Identification or Social
Security No.
- --------------------------------------------------------------------------------------------------
My Account Number with You
- --------------------------------------------------------------------------------------------------
Date
- --------------------------------------------------------------------------------------------------
</TABLE>
3
SHONEY'S, INC.
Offer to Purchase for Cash and Solicitation of Consents
Relating to its
8-1/4 % CONVERTIBLE SUBORDINATED DEBENTURES DUE 2002
CUSIP NO. 872623 AA 1
- -----------------------------------------------------------------------------
THIS OFFER WILL EXPIRE AT 11:59 P.M., NEW YORK CITY TIME, ON APRIL 24, 2000,
UNLESS EXTENDED (SUCH TIME AND DATE, AS IT MAY BE EXTENDED, THE "EXPIRATION
DATE"). HOLDERS OF DEBENTURES MUST TENDER THEIR DEBENTURES ON OR PRIOR TO
THE EXPIRATION DATE TO RECEIVE THE TENDER OFFER CONSIDERATION. THE CONSENT
SOLICITATION WITH RESPECT TO THE DEBENTURES WILL EXPIRE AT 5:00 P.M., NEW
YORK CITY TIME, ON APRIL 10, 2000, UNLESS EXTENDED (SUCH TIME AND DATE, AS IT
MAY BE EXTENDED, THE "TPI CONSENT DEADLINE"). TO RECEIVE A CONSENT PAYMENT,
HOLDERS OF DEBENTURES MUST TENDER THEIR DEBENTURES AND PROVIDE THEIR CONSENTS
TO THE PROPOSED AMENDMENTS (AND NOT HAVE REVOKED SUCH CONSENTS) AT OR PRIOR
TO THE TPI CONSENT DEADLINE.
- -----------------------------------------------------------------------------
March 27, 2000
TO OUR CLIENTS:
Shoney's, Inc., a Tennessee corporation (the "Company"), is offering to
purchase for cash, on the terms and subject to the conditions set forth in
the Purchase Offer and Consent Solicitation Statement dated March 27, 2000
(as it may be supplemented or amended from time to time, the "Purchase
Offer") and the related Letter of Transmittal and Consent (as it may be
supplemented or amended from time to time, the "Letter of Transmittal and
Consent," and, together with the Purchase Offer, the "Offer"), all of its
outstanding 8-1/4% Convertible Subordinated Debentures due July 15, 2002 (the
"Debentures"). Enclosed for your consideration are copies of the Purchase
Offer and Letter of Transmittal and Consent. Capitalized terms used herein
and not otherwise defined herein shall have the meanings ascribed to them in
the Purchase Offer.
In conjunction with the Offer, the Company also is soliciting consents
(the "Solicitation") from holders of the Debentures (each, a "Holder" and,
collectively, the "Holders") of a majority of the aggregate principal amount
of the outstanding Debentures (the "Consents") to the proposed amendments
described in the Purchase Offer (the "Proposed Amendments") to the Indenture
dated as of July 15, 1992, as amended by First Supplemental Indenture dated
as of September 6, 1996, between and among the Company (as successor to TPI
Enterprises, Inc.), TPI Restaurants, Inc., as guarantor, and The Bank of New
York, as trustee, pursuant to which the Debentures were issued (the
"Indenture"). The Proposed Amendments would (i) eliminate substantially all
of the covenants in the Indenture other than the covenants requiring payment
of interest on and principal of the Debentures when due, requiring the
maintenance of an office for purposes of making payment on the Debentures,
providing certain duties on the paying agent for the Debentures and requiring
the Company and the Guarantor to make certain certifications to the Trustee,
(ii) remove limitations on the ability of the Company and the Guarantor to
consolidate with or merge into, or to sell, convey, transfer, lease or
otherwise dispose of its properties and assets substantially as an entirety
to, another Person (as defined in the Indenture) or to permit another Person
to consolidate with or merge into, or to sell, convey, transfer, lease or
otherwise dispose of its properties and assets
substantially as an entirety to the Company and the Guarantor, and (iii)
eliminate certain Events of Default under the Indenture.
This material is being forwarded to you as the beneficial owner of
Debentures held by us for your account but not registered in your name. The
accompanying Letter of Transmittal and Consent is furnished to you for
informational purposes only and may not be used by you to tender Debentures
held by us for your account. A tender of such Debentures may be made only by
us as the registered Holder and only pursuant to your instructions.
Accordingly, we request instructions as to whether you wish us to tender
and deliver a Consent with respect to the Debentures held by us for your
account. If you wish to have us tender your Debentures (and deliver a
corresponding Consent) pursuant to the Offer, please so instruct us by
completing, executing and returning to us the instruction form that appears
on the next page.
IMPORTANT: THE LETTER OF TRANSMITTAL AND CONSENT (OR A FACSIMILE THEREOF),
WITH ANY REQUIRED SIGNATURE GUARANTEES, TOGETHER WITH THE DEBENTURES AND ALL
OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY AT OR PRIOR TO
5:00 P.M., NEW YORK CITY TIME, ON THE TPI CONSENT DEADLINE IN ORDER FOR
HOLDERS TO RECEIVE THE CONSENT PAYMENT. THE LETTER OF TRANSMITTAL AND
CONSENT (OR A FACSIMILE THEREOF), WITH ANY REQUIRED SIGNATURE GUARANTEES,
TOGETHER WITH THE DEBENTURES AND ALL OTHER REQUIRED DOCUMENTS OR THE NOTICE
OF GUARANTEED DELIVERY AND CONSENT, MUST BE RECEIVED BY THE DEPOSITARY AT OR
PRIOR TO 11:59 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE IN ORDER FOR
HOLDERS TO RECEIVE THE TENDER OFFER CONSIDERATION.
2
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter and the enclosed
material referred to therein relating to the Offer by Shoney's, Inc. with
respect to its 8-1/4% Convertible Subordinated Debentures due 2002.
THIS WILL INSTRUCT YOU TO TENDER THE PRINCIPAL AMOUNT OF 8-1/4%
CONVERTIBLE SUBORDINATED DEBENTURES DUE 2002 HELD BY YOU FOR THE ACCOUNT OF
THE UNDERSIGNED (AND TO DELIVER A CORRESPONDING CONSENT) PURSUANT TO THE
TERMS AND CONDITIONS SET FORTH IN THE PURCHASE OFFER AND CONSENT SOLICITATION
STATEMENT DATED MARCH 27, 2000, AND THE RELATED LETTER OF TRANSMITTAL AND
CONSENT.
- -----------------------------------------------------------------------------
Principal Amount Principal Amount to be Tendered
Held for Account of and as to which Consents
Type Holder(s) are to be Given*
- -----------------------------------------------------------------------------
8-1/4% Convertible
Subordinated
Debentures due 2002
of Shoney's, Inc.
- -----------------------------------------------------------------------------
* Unless otherwise indicated, the entire principal amount indicated in the
box entitled "Principal Amount Held for Account of Holder(s)" will be
tendered and a Consent with respect thereto will be given. A tendering
Holder is required to Consent to the Proposed Amendments with respect to
all Debentures tendered by such Holder.
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Signature(s)
- -----------------------------------------------------------------------------
Please print name(s)
- -----------------------------------------------------------------------------
Address
- -----------------------------------------------------------------------------
Zip Code
- -----------------------------------------------------------------------------
Area Code and Telephone No.
- -----------------------------------------------------------------------------
Tax Identification or Social
Security No.
- -----------------------------------------------------------------------------
My Account Number with You
- -----------------------------------------------------------------------------
Date
- ----------------------------------------------------------------------------
3
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER--Social Security numbers have nine digits separated by two hyphens:
i.e., 000-00-0000. Employer Identification numbers have nine digits
separated by only one hyphen: i.e., 00-0000000. The table will help
determine the number to give the payer.
<TABLE>
<S><C>
- -------------------------------------------------------------------------------------------------
FOR THIS TYPE OF ACCOUNT: GIVE THE FOR THIS TYPE OF ACCOUNT: GIVE THE
SOCIAL SECURITY EMPLOYER
NUMBER OF-- IDENTIFICATION
NUMBER OF--
- -------------------------------------------------------------------------------------------------
1. An individual's account The individual 8. Sole proprietorship account The owner(4)
- -------------------------------------------------------------------------------------------------
2. Two or more individuals The actual owner of 9. A valid trust, estate or Legal entity
(joint account) the account or, if pension trust (Do not furnish
combined funds, the the identifying
first individual on number of the
the account(1) personal
representative
or trustee
unless the
legal entity
itself is not
designated in
the account
title.)(5)
- -------------------------------------------------------------------------------------------------
3. Husband and wife The actual owner of 10. Corporate account The corporation
(joint account) the account or, if
joint funds, the
first individual on
the account(1)
- -------------------------------------------------------------------------------------------------
4. Custodian account of a The minor(2) 11. Religious, charitable, The organization
minor (Uniform Gift to or educational
Minors Act) organization account
- -------------------------------------------------------------------------------------------------
5. Adult and minor (joint The adult or, if the 12. Partnership account held The partnership
account) minor is the only in the name of the
contributor, the business
minor(1)
- -------------------------------------------------------------------------------------------------
6. Account in the name of The ward, minor, or 13. Association, club or The organization
guardian or committee incompetent other tax-exempt
for a designated ward, person(3) organization
minor, or incompetent
person
- -------------------------------------------------------------------------------------------------
7. a. The usual revocable The grantor- 14. A broker or registered The broker or
savings trust account trustee(1) nominee nominee
(grantor is also
trustee)
- -------------------------------------------------------------------------------------------------
b. So-called trust The actual owner(1) 15. Account with the Department The public
account that is not of Agriculture in the name entity
a legal or valid trust of a public entity (such
under State law as a State or local
government, school
district or prison) that
receives agricultural
program payments
- -------------------------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such person's social
security number.
(4) Show the name of the owner. If the owner does not have an employer identification number,
furnish such person's social security number.
(5) List first and circle the name of the legal trust, estate or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
- -------------------------------------------------------------------------------------------------
</TABLE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or
Form SS-4, Application for Employer Identification Number, at the local
office of the Social Security Administration or the Internal Revenue Service
and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on interest, dividends,
and broker transactions payments include the following:
* A corporation.
* A financial institution.
* An organization exempt from tax under section 501(a), or an
individual retirement plan, or a custodial account under Section
403(b)(7).
* The United States or any agency or instrumentality thereof.
* A State, The District of Columbia, a possession of the United
States, or any political subdivision or instrumentality thereof.
* A foreign government, a political subdivision of a foreign
government, or any agency or instrumentality thereof.
* An international organization or any agency or instrumentality
thereof.
* A registered dealer in securities or commodities registered in the
U.S., or a possession of the U.S.
* A real estate investment trust.
* A common trust fund operated by a bank under section 584(a).
* An entity registered at all times under the Investment Company Act
of 1940.
* A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
* Payments to nonresident aliens subject to withholding under section
1441.
* Payments to partnerships not engaged in a trade or business in the
U.S. and which have at least one nonresident partner.
* Payments of patronage dividends where the amount renewed is not paid
in money.
* Payments made by certain foreign organizations.
* Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
* Payments of interest on obligations issued by individuals.
NOTE: You may be subject to backup withholding if this interest is
$600 or more and is paid in the course of the payer's trade or
business and you have not provided your correct taxpayer
identification number to the payer.
* Payments of tax-exempt interest (including exempt-interest dividends
under section 852).
* Payments described in section 6049(b)(5) to non-resident aliens.
* Payments on tax-free covenant bonds under section 1451.
* Payments made by certain foreign organizations.
* Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER, IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE-Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers must
generally withhold 31% of taxable interest, dividend, and certain other
payments to a payee who does not furnish a taxpayer identification number to
a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. - If you
fail to furnish your taxpayer identification number to a payer, you are
subject to a penalty of $50 for each such failure unless your failure is due
to reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. - If you
make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION - Falsifying certifications
or affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
SHONEY'S, INC. COMMENCES
TENDER OFFER AND CONSENT SOLICITATION FOR
LIQUID YIELD OPTION NOTES DUE 2004 AND
8-1/4% CONVERTIBLE SUBORDINATED DEBENTURES DUE 2002
Nashville, March 27, 2000 /PRNewswires/ -- Shoney's, Inc. (NYSE: SHN)
("Shoney's") today announced the commencement of a cash tender offer to
purchase any and all of the outstanding $177 million principal amount at
maturity of its Liquid Yield Option Notes due 2004 and $52 million principal
amount of its 8-1/4% Convertible Subordinated Debentures due 2002
(collectively, the "Securities").
The purchase price for the Securities tendered pursuant to the tender offer
shall be equal to, in the case of the LYONs, $235 per $1,000 of accreted value
of the LYONs as of March 27, 2000 and, in the case of the debentures, $235 per
$1,000 of the principal amount of the debentures. The tender offer will expire
at 11:59 P.M., New York City time, on April 24, 2000, unless extended. Holders
of the Securities must tender their Securities on or prior to the expiration
date in order to receive the purchase price. The tender offer is subject to the
satisfaction of certain conditions, including receipt of financing and the
valid tender of at least 90% of the aggregate principal amount of the
Securities outstanding.
In conjunction with the tender offer, Shoney's is soliciting consents of
registered holders of Securities to certain proposed amendments to the
indentures pursuant to which the Securities were issued. Shoney's will pay to
holders who validly consent to the proposed amendments on or prior to 5:00
P.M., New York City time, on the Consent Date, an amount in cash equal to $15
per $1,000 accreted value of the LYONs as of March 27, 2000 or per $1,000
principal amount of the debentures for which consents have been validly
delivered and not validly revoked, with such payment to be made on the date
that the Securities are accepted for payment pursuant to the tender offer. The
"Consent Date" with respect to the debentures will be 5:00 P.M., New York City
time, on April 10, 2000 and with respect to the LYONs will be 5:00 P.M., New
York City time, on the 10th calendar day after the LYONs consent solicitation
materials receive regulatory clearance and are mailed in definitive form to
registered holders of the LYONs.
Banc of America Securities LLC is acting as the dealer manager and D.F. King
& Co., Inc. is acting as information agent in connection with the tender offer
and consent solicitation for the Securities. The depositary for the tender
offer and consent solicitation is The Bank of New York. Copies of the Offer
to Purchase and Consent Solicitation Statement may be obtained from the
information agent at (888) 242-8157. Additional information concerning the
terms of the tender offer may be obtained by contacting Banc of America
Securities LLC at (888) 292-0070 (toll free) or (704) 388-4813 (collect).
Shoney's owns, operates, and franchises approximately 1,100 restaurants in 28
states including Shoney's Restaurants, Captain D's Seafood Restaurants and
Fifth Quarter Restaurants.
This release contains forward-looking statements. There are certain important
factors that could cause results to materially differ from those anticipated
from the statements above. Additional information that could potentially
affect the Company's financial results may be found in the Company's filings
with the Securities and Exchange Commission.
Contact: /CONTACT: Mike Payne, SVP & Corporate Controller, Shoney's (615) 231-
2332 or Andrew Karp, Managing Director, Banc of America Securities LLC (704)
388-4813 or (888) 292-0070.
