UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
FOR ANNUAL AND TRANSITION REPORTS PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended October 29,
2000
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the Transition Period from _____ to _____
Commission File Number: 0-4377
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SHONEY'S, INC.
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(Exact Name of Registrant as Specified in its Charter)
Tennessee 62-0799798
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1727 Elm Hill Pike, Nashville, TN 37210
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (615) 391-5201
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Securities Registered Pursuant to Section 12(b) of the Act: None
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Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, par value $1 per share
Common Stock Purchase Rights
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No .
--- ---
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-
K or any amendment to Form 10-K. [ ]
As of January 22, 2001, there were 47,650,194 shares of Shoney's, Inc.,
$1 par value common stock held by non-affiliates with an aggregate market
value of $36,481,000.
As of January 22, 2001, there were 51,693,846 shares of Shoney's, Inc.,
$1 par value common stock outstanding.
Documents incorporated by reference: None
Pursuant to General Instruction G(3) of Form 10-K and Rule 12b-15 of the
Securities Exchange Act of 1934, as amended, this Amendment (this
"Amendment") to the Form 10-K of Shoney's, Inc. (the "Company"), filed with
the Securities and Exchange Commission on January 29, 2001 (the "Form 10-K"),
is being filed to include information with respect to Items 10, 11, 12 and 13
of Part III of the Form 10-K. Parts I, II and IV of the Form 10-K hereby are
incorporated by reference in their entirety as if copied herein verbatim.
The forward-looking statements included in this Amendment and the Form
10-K relating to certain matters involve risks and uncertainties, including
the ability of management to successfully implement its strategy for
improving Shoney's Restaurants performance, the ability of management to
effect asset sales consistent with projected proceeds and timing
expectations, the results of pending and threatened litigation, adequacy of
management personnel resources, shortages of restaurant labor, commodity
price increases, product shortages, adverse general economic conditions,
adverse weather conditions that may affect the Company's markets, turnover
and a variety of other similar matters. Forward looking statements generally
can be identified by the use of forward looking terminology such as "may,"
"will," "expect," "intend," "estimate," "could," "anticipate," "believe," or
"continue" (or the negative thereof) or similar terminology. Actual results
and experience could differ materially from the anticipated results or other
expectations expressed in the Company's forward-looking statements as a
result of a number of factors, including but not limited to those discussed
in Part II, Item 7 of the Form 10-K under the caption "Risk Factors".
Forward-looking information provided by the Company pursuant to the safe
harbor established under the Private Securities Litigation Reform Act of 1995
should be evaluated in the context of these factors. In addition, the Company
disclaims any intent or obligation to update these forward-looking
statements.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
DIRECTORS
The following sets forth the names, ages and backgrounds of all
directors of the Company and all nominees for director of the Company. The
Company currently has nine directors, all of which will be standing for re-
election except for Carroll D. Shanks.
- - J. MICHAEL BODNAR Age - 56
President and Chief Executive Officer Director since 1997
Shoney's, Inc.
Mr. Bodnar was named President and Chief Executive Officer of the
Company in November 1997. See "Certain Transactions." Mr. Bodnar was elected
to the Board of Directors in August 1997 pursuant to the Settlement
Agreement entered into between the Company and Raymond D. Schoenbaum and
Betty J. Schoenbaum. Mr. Bodnar has served as President of Bodnar Investment
Group, Inc., a real estate investment company focusing primarily on the
restaurant industry, since 1984. From January 1986 through May 1996, Mr.
Bodnar served as President of Triangle Management Group, Inc., a restaurant
management company.
- - STEPHEN E. MACADAM Age - 40
Executive Vice President-Containerboard & Director since 1999
Packaging/Purchasing
Georgia-Pacific Corporation
2
Mr. Macadam has served as Executive Vice President of Containerboard &
Packaging/ Purchasing for Georgia-Pacific Corporation since August 2000.
From March 1998 through August 2000, Mr. Macadam was the Senior Vice
President of Containerboard & Packaging for Georgia-Pacific Corporation.
From 1988 to February 1998, Mr. Macadam was a principal with McKinsey &
Company, Inc.
- - JEFFRY F. SCHOENBAUM Age - 53
Private Investor Director since 1996
Mr. Schoenbaum is a private investor and serves as Vice President of
Nurad Investments, Inc., which was formed in 1987 to manage the historic
redevelopment of commercial properties in Sarasota and Tampa, Florida. He
also serves as a member of the board of directors of the Schoenbaum Family
Foundation. Mr. Schoenbaum is the brother of Raymond D. Schoenbaum.
- - RAYMOND D. SCHOENBAUM Age - 54
Chairman of the Board Director since 1997
Shoney's, Inc.
Since April 1995, Mr. Schoenbaum has been President of Schoenbaum
Limited, a restaurant management company. Mr. Schoenbaum also has served
since March 1996 as the President and Chief Executive Officer of Just Having
Fun Restaurants, Inc., a restaurant company currently developing a new
restaurant concept in Atlanta, Georgia. From June 1984 to March 1995, he
served as the Chairman of the Board of Innovative Restaurant Concepts, Inc.,
a restaurant management company which owned and operated Rio Bravo, Ray's on
the River and Green Hills Grille restaurants. Mr. Schoenbaum sold this
company to Applebee's International, Inc. in March 1995. Mr. Schoenbaum was
a member of the board of directors of Applebee's International, Inc. from
March 1995 to August 1997. He also serves as a member of the board of
directors of the Schoenbaum Family Foundation. Mr. Schoenbaum was elected to
the Board of Directors of the Company in August 1997 pursuant to the
Settlement Agreement between the Company and Raymond D. Schoenbaum and Betty
J. Schoenbaum. In June 1998, Mr. Schoenbaum was elected Vice Chairman of the
Board and became Chairman of the Board effective January 1999. Mr.
Schoenbaum is the brother of Jeffry F. Schoenbaum.
- - WILLIAM A. SCHWARTZ Age - 62
President and Chief Executive Officer Director since 1997
FMB Enterprises, Inc.
Mr. Schwartz is President and Chief Executive Officer of FMB
Enterprises, Inc., which he founded in 1988. FMB Enterprises, Inc. is a
general partner in Capital Cable, L.P., which owns and operates several cable
television systems and manages a large portfolio of investments. Since 1990,
Mr. Schwartz has been involved in the ownership and operation of television
stations, serving as Chief Executive Officer of Cannell Communications, L.P.
from February 1990 to December 1995 and as Chief Executive Officer of First
Media Television, L.P. from January 1995 through November 1997. From
September 1985 to December 1987, Mr. Schwartz was President and Chief
Operating Officer of Cox Enterprises, Inc., a large diversified media
company. Mr. Schwartz was elected to the Board of Directors of the Company
in August 1997 pursuant to the Settlement Agreement between the Company and
Raymond D. Schoenbaum and Betty J. Schoenbaum.
3
- - CARROLL D. SHANKS Age - 73
Retired Vice Chairman Director since 1997
American General Life & Accident Insurance Company
Mr. Shanks retired in December 1992 as Vice Chairman of American General
Life & Accident Insurance Company. Mr. Shanks has served as a member of the
board of directors of Bank of America, a subsidiary of Bank of America, N.A.,
since May 1992. From April 1993 until June 1996, Mr. Shanks was a member of
the board of directors of American Progressive Corporation, an insurance
company. Mr. Shanks will not stand for re-election to the Company's Board of
Directors at the 2001 Annual Meeting of Shareholders.
- - FELKER W. WARD, JR. Age - 67
Chairman of the Board and Director since 1998
Chief Executive Officer
Pinnacle Investment Advisors, Inc.
Mr. Ward has served as Chairman of the Board and Chief Executive Officer
of Pinnacle Investment Advisors, Inc., an investment advisor, since its
formation in April 1994. From December 1992 to July 1996, Mr. Ward also
served as Chairman of Ward Bradford & Co., L.P., a financial services
company. Since 1979, Mr. Ward has served as the President and Vice Chairman
of Concessions International, Inc., an owner and operator of food, beverage,
gift and duty-free shops in airports. Mr. Ward has served on the board of
directors of Abrams Industries, Inc., a nonresidential construction company,
fixture manufacturer and property management company, since 1990 and on the
respective boards of directors of Fidelity National Corporation, a bank
holding company, since 1997, AGL Resources Inc., a natural gas distributing
utility, since 1988, and Smith Garden Products, Inc. since 1997.
- - WILLIAM M. WILSON Age - 52
President Director since 1997
Cherokee Equity Corporation
Mr. Wilson, since 1984, has served as President of Cherokee Equity
Corporation, an investment holding company. Since 1979, Mr. Wilson also has
served as President of Cherokee Properties, Inc., a real estate investment
company.
- - JAMES D. YANCEY Age - 59
President and Chief Operating Officer Director since 1998
Synovus Financial Corp.
Mr. Yancey served as Vice Chairman of Synovus Financial Corp., a
financial services company, from March 1992 until February 1998, at which
time he became President and Chief Operating Officer. He also has served as
a director of Synovus Financial Corp. since 1978.
EXECUTIVE OFFICERS
The information set forth under "Executive Officers of the Registrant"
in Part I of the Form 10-K is incorporated herein by this reference as if set
forth herein verbatim.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires our
directors and executive officers and persons who own more than 10% of a
registered class of our equity securities to file with the SEC reports of
ownership and changes in ownership of our common stock. Directors, executive
officers and greater than 10% shareholders are required by SEC regulations to
furnish us with copies of all Section 16(a) forms they file. Based solely on
a review of the copies of these reports furnished to us or written
representations that no other reports were required, we believe that during
fiscal year 2000 all of our directors, executive officers and greater than
10% beneficial owners complied with these requirements, with the exception of
Betty J. Marshall, our former Senior Vice President-Corporate Communications
and Community Relations, who inadvertently failed to file a Form 4 to report
three open market sales of our common stock, which she later reported on Form
5 which also was filed late.
ITEM 11. EXECUTIVE COMPENSATION.
COMPENSATION OF MOST HIGHLY COMPENSATED EXECUTIVE OFFICERS
The following tables discuss the compensation earned by our Chief
Executive Officer and our four most highly compensated executive officers in
fiscal years 2000, 1999 and 1998. Fiscal year 1999 included 53 weeks
compared to 52 weeks for fiscal years 2000 and 1998.
SUMMARY COMPENSATION TABLE
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
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RESTRICTED
OTHER ANNUAL STOCK SECURITIES ALL OTHER
NAME AND FISCAL SALARY BONUS COMPENSATION AWARDS UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) ($)(1) ($) OPTIONS ($)
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J. Michael Bodnar(2) 2000 500,000 175,000 30,938(3) 55,000(4) ---- 49,707(5)
President and 1999 509,615 70,000 30,938 55,000 ---- 44,278
Chief Executive Officer 1998 452,567 300,000 ---- ---- 1,000,000 79,117
Haney A. Long, Jr. 2000 203,077 232,599 ---- ---- ---- ----
President and 1999 203,846 82,640 ---- ---- 10,000 2,145
Chief Operating Officer- 1998 196,538 172,800 ---- ---- 102,500 7,488
Commissary Operations, Inc.
Ronald E. Walker 2000 230,279 202,499 ---- ---- 25,000 4,997(6)
President and 1999 213,096 223,991 ---- ---- 50,000 4,658
Chief Operating Officer- 1998 185,600 207,520 ---- ---- 122,500 3,934
Captain D's, Inc.
David L. Gilbert 2000 182,148 214,113 ---- ---- 75,000 4,066(7)
Executive Vice President, 1999 176,346 35,495 ---- ---- 75,000 5,000
Chief Administrative Officer 1998 109,058 26,600 ---- ---- 50,000 65,066
and Assistant Secretary
Richard D. Schafstall(8) 2000 143,262 168,294 ---- ---- 100,000 8,344(9)
Senior Vice President,
Secretary and General Counsel
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5
(1) As to "Other Annual Compensation", although executive officers
receive perquisites and other personal benefits (e.g., automobiles
furnished by Shoney's), the aggregate amount of such perquisites or
other personal benefits does not exceed the lesser of $50,000 or 10%
of the annual salary and bonus for any of the persons listed in the
Summary Compensation Table.
(2) The 1998 compensation amounts set forth for Mr. Bodnar represent
partial year compensation.
(3) Represents tax equalization bonus paid with respect to the receipt
of restricted shares by Mr. Bodnar pursuant to his employment
agreement which expired as of December 31, 2000.
(4) Represents the value of 40,000 shares received by Mr. Bodnar pursuant
to his employment agreement, with a fair market value on the date of
distribution of $55,000 ($1.38 per share).
(5) Represents insurance premiums ($41,193) and professional financial
services fees ($8,514) paid on Mr. Bodnar's behalf pursuant to his
employment agreement.
(6) Represents amounts paid pursuant to our restaurant group ownership
plans established in prior years, in which partnerships composed of
employees have acquired up to a 30% interest in groups of
restaurants.
(7) Represents tuition reimbursement ($3,466) and professional financial
services fees ($600) paid on Mr. Gilbert's behalf.
(8) The 2000 compensation amounts set forth for Mr. Schafstall represent
partial year compensation.
(9) Represents relocation expenses paid on Mr. Schafstall's behalf.
OPTION GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
VALUE AT ASSUMED
% OF TOTAL ANNUAL RATES OF STOCK
NUMBER OF OPTIONS PRICE APPRECIATION FOR
SECURITIES GRANTED TO EXERCISE OPTION TERM
UNDERLYING EMPLOYEES OR BASE ---------------------
OPTIONS IN FISCAL PRICE EXPIRATION
NAME GRANTED YEAR ($/SH)(1) DATE 5%($) 10%($)
- ---- ------- ---- --------- ---- ----- ------
Mr. Walker 25,000 1.40% $1.0625 02/23/2010 $16,705 $ 42,334
Mr. Gilbert 75,000 4.19% $1.0625 02/23/2010 $50,115 $127,001
Mr. Schafstall 100,000 5.59% $1.125 02/01/2010 $70,751 $179,296
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(1) The exercise price of the options granted is at least 100% of the
fair market value of the shares on the date of grant. The options
vest (become exercisable) at a cumulative rate of 20% per year and
in full after five years.
6
AGGREGATED FISCAL YEAR-END OPTION VALUES
NUMBER OF SECURITIES UNDERLYING
UNEXERCISED OPTIONS AT
FISCAL YEAR-END
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NAME EXERCISABLE UNEXERCISABLE
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Mr. Bodnar 500,000 500,000
Mr. Long 92,547 74,500
Mr. Walker 84,000 138,500
Mr. Gilbert 35,000 165,000
Mr. Schafstall 0 100,000
The Company has never awarded stock appreciation rights to any employee,
has no long-term incentive plans, as that term is defined in SEC regulations,
and has no defined benefit or actuarial plans covering any of its employees.
In addition, no named executive officer exercised an option in fiscal 2000 or
held an option that had any value as of the 2000 fiscal year-end.
EMPLOYMENT CONTRACTS AND OTHER AGREEMENTS WITH NAMED EXECUTIVE OFFICERS
The Company does not have any employment contracts with its named
executive officers. The Company has management retention agreements with
Messrs. Bodnar, Schafstall, Walker, Gilbert and Long. Each management
retention agreement provides for the payment of two times the sum of the
respective base salary and incentive plan payments of the executive officer
in the event of termination without "good cause" (as defined in the
agreement) or resignation for a "good reason" (as defined in the agreement)
within a two-year period following a change in control. The payment is to be
made over a period of three years. The agreements also provide that these
officers and their families will continue to be covered by our welfare plans
for three years following termination of employment as set forth above and
all stock options granted to these officers shall become completely vested.
The agreements also contain confidentiality and non-compete covenants.
DIRECTOR COMPENSATION
Directors who also are officers do not receive additional compensation
for service on the Board. Directors who are not officers receive a quarterly
retainer of $4,000 in addition to $1,000 plus expenses for each Board or
committee meeting they attend. Pursuant to the Company's Share Compensation
Arrangement for Non-Employee Directors, at least 35% or, at an individual
director's election, up to 100% of a director's quarterly fees is to be paid
in shares of our stock rather than in cash. The Share Compensation
Arrangement expires, however, upon 250,000 shares having been issued pursuant
thereto. We anticipate the expiration of the Share Compensation Arrangement
to occur in the first quarter of fiscal year 2001. Accordingly, that portion
of first quarter fees paid in shares of the Company's stock will be prorated
among the participating directors.
In addition, non-employee directors receive an option for 5,000 shares
upon their election to the Board pursuant to the Shoney's, Inc. Director's
Stock Option Plan. Non-employee directors are awarded
7
an additional option for 5,000 shares on the fifth anniversary of the grant
of their most recent option under this plan. As of the end of the Company's
2000 fiscal year, there were 7 participants under this plan who held options
covering an aggregate of 35,000 shares at exercise prices ranging from $2.25
to $9.50 per share. During the Company's 2000 fiscal year, there were no
exercises of options granted under this plan.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The following persons served on the Management Development and
Compensation Committee of the Company's Board of Directors during the 2000
fiscal year. No member of this Committee has been an officer or employee of
the Company at any time and no member has any relationship with either the
Company or the officers of the Company requiring disclosure under applicable
regulations of the SEC.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
This table shows how much of the Company's common stock is owned by
persons, other than directors and executive officers of the Company, who, as
of February 2, 2001, were known to management to be the beneficial owners of
more than 5% of our outstanding common stock. We have no other class of
equity securities outstanding.
NAME AND ADDRESS OF BENEFICIAL OWNER SHARES BENEFICIALLY OWNED PERCENT OF CLASS
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R.L. Danner 4,249,303(1) 8.2%
2 International Plaza, Suite 510
Nashville, TN 37217
Chase Manhattan Corporation 4,243,459(2) 8.2%
270 Park Avenue
New York, NY 10017
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(1) Includes 83,068 shares owned by Mr. Danner's wife and 7,101 shares
held by Mr. Danner's wife as custodian for their son. Mr. Danner has
sole voting and dispositive power over 4,159,134 shares and shared
voting and dispositive power over 90,169 shares. The information
regarding shares beneficially owned is based on the Schedule 13D
filed by Mr. Danner with the SEC on April 18, 1997.
(2) Chase Manhattan Bank Delaware, Chase Manhattan Private Bank, National
Association, and Chase Manhattan Bank are subsidiaries of Chase
Manhattan Corporation, a holding company. Chase Manhattan
Corporation has disclaimed beneficial ownership of all 4,243,459
shares. Chase Manhattan Bank Delaware has sole voting power over
3,098,730 shares, shared voting power over 308,508 shares, sole
dispositive power over 3,116,338 shares and shared dispositive power
over 290,900 shares. Chase Manhattan Private Bank, National
Association, has shared voting and dispositive power over 432,902
shares and sole dispositive power over 343,319 shares. Chase
Manhattan Bank has shared dispositive power over 60,000 shares. The
information regarding shares beneficially owned is based upon the
Schedule 13G jointly filed by Chase Manhattan Corporation, Chase
Manhattan Bank Delaware, Chase Manhattan Private Bank, National
Association, and Chase Manhattan Bank with the SEC on February 14,
2000.
8
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth the number of shares of the Company's
common stock directly or indirectly beneficially owned, as of February 2,
2001, by all directors and nominees for director, the Company's chief
executive officer and the Company's four most highly compensated executive
officers other than the chief executive officer who were serving as executive
officers at the end of the 2000 fiscal year, and by all current directors and
executive officers as a group, together with the percentage of the
outstanding shares of the Company's common stock which such ownership
represents. Unless otherwise indicated, beneficial ownership consists of
sole voting and dispositive power based on 51,693,846 shares of common stock
issued and outstanding as of February 2, 2001.
PERCENT OF
NAME OF BENEFICIAL OWNER SHARES BENEFICIALLY OWNED (1) CLASS
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J. Michael Bodnar 686,857(2) 1.33%
David L. Gilbert 253,073 *
Haney A. Long, Jr. 149,218 *
Stephen E. Macadam 39,650 *
Richard D. Schafstall 69,868 *
Jeffry F. Schoenbaum 609,030(3) 1.18%
Raymond D. Schoenbaum 1,711,309 3.31%
William A. Schwartz 43,450 *
Carroll D. Shanks 44,924 *
Ronald E. Walker 270,993 *
Felker W. Ward, Jr. 64,243 *
William M. Wilson 58,041 *
James D. Yancey 121,663(4) *
All current directors and executive 4,421,699 8.50%
officers as a group (16 persons)
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* Less than 1%.
(1) Includes shares subject to options to purchase shares which are
exercisable or become exercisable within 60 days of February 2, 2001,
and are held by the following persons: David L. Gilbert (45,000),
Haney A. Long, Jr. (92,547), Stephen E. Macadam (1,000), Jeffry F.
Schoenbaum (5,000), Raymond D. Schoenbaum (20,000), William A.
Schwartz (3,000), Carroll D. Shanks (3,000), Ronald E. Walker
(84,000), Felker W. Ward, Jr. (2,000), William M. Wilson (3,000) and
James D. Yancey (3,000). Such shares are deemed to be outstanding
for the purpose of computing the percentage of outstanding shares
owned by such person, but are not deemed to be outstanding for the
purpose of computing the percentage owned by any other person.
(2) Includes 586,857 shares owned directly and 100,000 shares owned
indirectly by Mr. Bodnar.
(3) Includes 17,340 shares held by Chase Manhattan Bank as custodian for
Mr. Schoenbaum's children, 2,953 shares held by Mr. Schoenbaum's
wife, 432,902 shares held in a trust for the benefit of Mr.
Schoenbaum, 18,478 shares held in a revocable trust with Mr.
Schoenbaum and his wife as co-trustees, and 35,750 shares owned by
the Schoenbaum Family Foundation, of which Mr. Schoenbaum is a
director. Mr. Schoenbaum disclaims beneficial ownership of the
shares owned by the Schoenbaum Family Foundation.
(4) Includes 18,663 shares owned by Mr. Yancey's wife.
9
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Except as disclosed under Item 11 hereof, and except as set forth below,
the Company's executive officers, directors and director nominees did not
have significant business relationships with the Company which would require
disclosure under applicable SEC regulations and no such transactions are
anticipated during the 2001 fiscal year.
The Company leases real estate for the operation of the Texarkana,
Arkansas Shoney's restaurant from PAB Realty, of which Mr. Bodnar is a 50%
owner. The lease provides for annual rental of $70,800, plus additional rent
equal to 5.5% of the restaurant's gross sales over a level determined in
accordance with the lease. The lease expires on April 30, 2007, but the
Company has the option to extend the lease term for up to two additional
five-year periods. During the 2000 fiscal year, the Company paid PAB Realty
aggregate rent of $70,800. The Company considers this lease to be comparable
in terms to other leases with unaffiliated third parties.
Stephen C. Sanders, who was an executive officer during part of fiscal
year 2000, indirectly operates three franchised Shoney's restaurants. When
Mr. Sanders was employed by the Company in 1998, his retention of these
franchises was reviewed and approved by the Company's Audit Committee. The
restaurants are operated pursuant to standard franchise agreements that would
be entered into with unaffiliated third parties. In addition, these units
purchase goods and equipment from the Company at the same prices and upon the
same terms as those given to other unaffiliated franchisees. During the 2000
fiscal year, Mr. Sanders' restaurants paid royalties to the Company in the
amount of $156,824 and made purchases from the Company in the amount of
$1,777,068. It is anticipated that such payments and purchases will continue
throughout the terms of the franchise agreements which expire (with the
option of the franchisee to renew for an additional 20-year term) in 2008,
2014 and 2015, respectively.
Mr. Sanders also received a lump sum severance payment of $150,000, plus
vacation pay for five weeks unused vacation time in the amount of $28,846,
all pursuant to the terms of the Severance Agreement and Release entered into
between Mr. Sanders and the Company.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, and Rule 12b-15 promulgated thereunder, Shoney's, Inc.
has duly caused this Amendment 1 to Form 10-K to be signed on its behalf by
the undersigned, thereunto duly authorized, on this 26th day of February,
2001.
SHONEY'S, INC.
By: /s/ James M. Beltrame
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Name: James M. Beltrame
--------------------------
Title: Chief Financial Officer
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