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
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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.
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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.
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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.
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Principal Amount at
Maturity
Held for Account of Principal Amount at Maturity
Type Holder(s) to be Tendered*
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Liquid Yield Option
Notes Due 2004 (Zero
Coupon - Subordinated)
of Shoney's, Inc.
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* 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.
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Signature(s)
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Please print name(s)
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Address
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Zip Code
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Area Code and Telephone No.
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Tax Identification or Social
Security No.
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My Account Number with You
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Date
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