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SECURITIES AND EXCHANGE COMMISSION
Washington, D.S. 20549
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FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
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Date of Report (date of earliest event reported): August 20, 2001
SHONEY'S, INC.
(Exact name of registrant as specified in its charter)
Tennessee 0-4377 62-0799798
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
1727 Elm Hill Pike, Nashville, TN 37210
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (615) 391-5201
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ITEM 5. OTHER EVENTS.
On March 7, 1988, the Board of Directors of Shoney's, Inc., a Tennessee
corporation (the "Company"), declared a dividend of one right (a "Right") for
each four outstanding shares of common stock, par value $1.00 per share
("Common Stock"), of the Company held of record at the close of business on
March 15, 1988 (the "Record Time"), or issued thereafter and prior to the
Distribution Date (as hereinafter defined) and thereafter pursuant to options
and convertible securities outstanding at the Distribution Date. The Rights
were issued pursuant to a Rights Agreement, dated as of March 7, 1988 (the
"Rights Agreement"), between the Company and Citizens and Southern Trust
Company (Georgia), National Association, as Rights Agent. On March 1, 1989,
the Rights Agreement was amended to adjust the Purchase Price (as hereinafter
defined) as a result of a plan of recapitalization and on March 15, 1993, the
Rights Agreement was further amended to increase the Purchase Price and to
formalize the appointment of the successor Rights Agent, Harris Trust and
Savings Bank.
On May 25, 1994, the Company and Harris Trust and Savings Bank, as
Rights Agent, amended and restated the Rights Agreement in its entirety (the
"1994 Rights Agreement"). Thereafter, the 1994 Rights Agreement was amended
(the "Amendments"): (a) as of April 18, 1995 to include a procedure to
consider the possible redemption of the Rights in the event that a Qualified
Offer is received by the Company; (b) as of June 14, 1996 to revise the
definition of "Acquiring Person"; and (c) as of April 20, 1998 to increase
the beneficial ownership required to qualify as an Acquiring Person from 10%
to 20% or more of the outstanding shares of the Company's Common Stock and to
exclude the Company and certain of its affiliates from the definition of
Acquiring Person.
Harris Trust and Savings Bank subsequently resigned as Rights Agent and
the Company appointed Registrar and Transfer Company as successor Rights
Agent (the "Rights Agent"). The Company and the Rights Agent then entered
into an Amended and Restated Rights Agreement, dated as of December 4, 2000,
but effective as of August 8, 2001 (the "Restated Rights Agreement") solely
to formalize the appointment of Registrar and Transfer Company as Rights
Agent and to consolidate the Amendments to the 1994 Rights Agreement.
Effective as of August 20, 2001, the Company and the Rights Agent entered
into Amendment 1 to Amended and Restated Rights Agreement ("Amendment 1 to
Restated Rights Agreement"), to reflect an adjustment to the price at which
holders may purchase securities issuable upon exercise of one whole Right
from $60.00 to $20.00. The terms of the Rights, as so amended, are summarized
herein. All terms not otherwise defined herein shall have the meanings
ascribed thereto in the Restated Rights Agreement, as amended.
Each Right entitles its registered holder to purchase from the Company,
after the Distribution Date, one share of Common Stock, for $20.00 (the
"Purchase Price"), subject to adjustment. The Rights will be evidenced by
the Common Stock certificates until the close of business on the earlier of
(either, the "Distribution Date"): (i) the tenth business day (or such later
date as the Board of Directors of the Company may from time to time fix by
resolution adopted prior to the Distribution Date that would otherwise have
occurred) after the date on which any Person commences a tender or exchange
offer which, if consummated, would result in such Person's holding 30% or
more of the Common Stock, and (ii) the tenth day after the first date
(the "Flip-in Date") of public announcement by the Company that such Person
has become an Acquiring Person (as defined below), other than as a result of
a Flip-over Transaction or Event (as defined below); provided that if a
tender or exchange offer referred to in clause (i) is cancelled, terminated
or otherwise withdrawn prior to the Distribution Date without the purchase of
any shares of stock pursuant thereto, such offer shall be deemed never to
have been made. The Restated Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the
Common Stock. Common Stock certificates issued before the Distribution Date
shall evidence one Right for each four shares of Common Stock represented
thereby and shall contain a legend incorporating by reference the terms of
the Restated Rights Agreement (as such may be amended from time to time).
Notwithstanding the absence of the aforementioned legend or the existence of
an earlier form of legend, certificates evidencing shares of Common Stock
outstanding on or prior to August 8, 2001 shall also evidence one Right for
each four shares of Common Stock evidenced thereby. Promptly following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of Common Stock at the
Distribution Date.
An Acquiring Person is any Person having Beneficial Ownership of 20% or
more of the outstanding shares of Common Stock other than: (i) any Person
who is the Beneficial Owner of 20% or more of the outstanding shares of
Common Stock on the date of the 1994 Rights Agreement or who shall become the
Beneficial Owner of 20% or more of the outstanding shares of Common Stock
solely as a result of an acquisition by the Company of shares of Common
Stock, until such time hereafter or thereafter as such Person shall become
the Beneficial Owner (other than by means of a stock dividend or stock split)
of any additional shares of Common Stock, (ii) any Person who is the
Beneficial Owner of 20% or more of the outstanding shares of Common Stock but
who acquired Beneficial Ownership of shares of Common Stock without any plan
or intention to seek or affect control of the Company, if such Person
promptly enters into an irrevocable commitment promptly to divest, and
thereafter promptly divests (without exercising or retaining any power,
including voting, with respect to such shares), sufficient shares of Common
Stock (or securities convertible into, exchangeable into or exercisable for
Common Stock) so that such Person ceases to be the Beneficial Owner of 20% or
more of the outstanding shares of Common Stock, or (iii) any Person who
Beneficially Owns shares of the Common Stock consisting solely of one or more
of (A) shares of Common Stock Beneficially Owned pursuant to the grant or
exercise of an option granted to such Person by the Company in connection
with an agreement to merge with, or acquire, the Company at a time at which
there is no Acquiring Person, (B) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock),
Beneficially Owned by such Person or its Affiliates or Associates at the time
of grant of such option or (C) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock) acquired
by Affiliates or Associates of such Person after the time of such grant
which, in the aggregate, amount to less than 1% of the outstanding shares of
Common Stock. In addition, the Company, any wholly-owned Subsidiary of the
Company and any employee stock ownership or other employee benefit plan of
the Company or a wholly-owned Subsidiary of the Company shall not be an
Acquiring Person.
The Rights will not be exercisable until the Business Day following the
Distribution Date. The Rights will expire on the earliest of: (a) the
Exchange Time (as defined below),
(b) the close of business on May 25, 2004, (c) the date on which the Rights
are redeemed as described below and (d) upon the merger of the Company into
another corporation pursuant to an agreement entered into when there is no
Acquiring Person (in any such case, the "Expiration Time").
The Purchase Price and the number of Rights outstanding, or in certain
circumstances the securities purchasable upon exercise of the Rights, are
subject to adjustment from time to time to prevent dilution in the event of
a Common Stock dividend on, or a subdivision or a combination into a smaller
number of shares of, Common Stock, or the issuance or distribution of any
securities or assets in respect of, in lieu of or in exchange for Common
Stock.
In the event that prior to the Expiration Time a Flip-in Date occurs,
the Company shall take such action as shall be necessary to ensure and
provide that each Right (other than Rights Beneficially Owned by the
Acquiring Person or any Affiliate or Associate thereof, which Rights shall
become void) shall constitute the right to purchase from the Company, upon
the exercise thereof in accordance with the terms of the Restated Rights
Agreement, as amended, that number of shares of Common Stock of the Company
having an aggregate Market Price on the date of the public announcement of an
Acquiring Person's becoming such (the "Stock Acquisition Date") that gave
rise to the Flip-in Date equal to twice the Purchase Price for an amount in
cash equal to the then current Purchase Price. In addition, to the extent
not prohibited by applicable law, the Board of Directors of the Company may,
at its option, at any time after a Flip-in Date, elect to exchange all (but
not less than all) of the then outstanding Rights (other than Rights
Beneficially Owned by the Acquiring Person or any Affiliate or Associate
thereof, which Rights become void), and if there shall be insufficient
authorized but unissued shares of Common Stock to permit the exercise in full
of the Rights, each Right shall automatically be exchanged for shares of
Common Stock at an exchange ratio of four shares of Common Stock per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date of the Distribution Date (the "Exchange
Ratio"). Immediately upon such action by the Board of Directors (the
"Exchange Time"), the right to exercise the Rights will terminate and each
Right will thereafter represent only the right to receive a number of shares
of Common Stock equal to the Exchange Ratio.
In the event that prior to the Expiration Time the Company enters into,
consummates or permits to occur a transaction or series of transactions after
the time an Acquiring Person has become such in which, directly or
indirectly, (i) the Company shall consolidate or merge or participate in a
binding share exchange with any other Person if, at the time of the
consolidation, merger or share exchange or at the time the Company enters
into an agreement with respect to such consolidation, merger or share
exchange, the Acquiring Person controls the Board of Directors of the Company
and any term of or arrangement concerning the treatment of shares of capital
stock in such merger, consolidation or share exchange relating to the
Acquiring Person is not identical to the terms and arrangements relating to
other holders of Common Stock or (ii) the Company shall sell or otherwise
transfer (or one or more of its subsidiaries shall sell or otherwise
transfer) assets (A) aggregating more than 50% of the assets (measured by
either book value or fair market value) or (B) generating more than 50% of
the operating income or cash flow, of the Company and its subsidiaries (taken
as a whole) to any other Person (other than the Company or one or more of its
wholly owned subsidiaries) or to two or more such Persons which are
affiliated or otherwise acting in concert, if, at the time of such sale or
transfer of assets or at the time the Company (or any such subsidiary) enters
into an agreement with respect to such sale or transfer, the Acquiring Person
controls the Board of Directors of the Company (a "Flip-over Transaction or
Event"), the Company shall take such action as shall be necessary to ensure,
and shall not enter into, consummate or permit to occur such Flip-over
Transaction or Event until it shall have entered into a supplemental
agreement with the Person engaging in such Flip-over Transaction or Event or
the parent corporation thereof (the "Flip-over Entity"), for the benefit of
the holders of the Rights, providing, that upon consummation or occurrence of
the Flip-over Transaction or Event (i) each Right shall thereafter constitute
the right to purchase from the Flip-over Entity, upon exercise thereof in
accordance with the terms of the Restated Rights Agreement, as amended, that
number of shares of common stock of the Flip-over Entity having an aggregate
Market Price on the date of consummation or occurrence of such Flip-over
Transaction or Event equal to twice the Purchase Price for an amount in cash
equal to the then current Purchase Price and (ii) the Flip-over Entity shall
thereafter be liable for, and shall assume, by virtue of such Flip-over
Transaction or Event and such supplemental agreement, all the obligations and
duties of the Company pursuant to the Restated Rights Agreement, as amended.
For purposes of the foregoing description, the term "Acquiring Person" shall
include any Acquiring Person and its Affiliates and Associates counted
together as a single Person.
The Board of Directors of the Company may, at its option, at any time
prior to the close of business on the Flip-in Date, redeem all (but not less
than all) of the then outstanding Rights at a price of $.01 per Right (the
"Redemption Price"), as provided in the Restated Rights Agreement.
Immediately upon the action of the Board of Directors of the Company electing
to redeem the Rights, without any further action and without any notice, the
right to exercise the Rights will terminate and each Right will thereafter
represent only the right to receive the Redemption Price in cash for each
Right so held.
In the event the Company shall receive a Qualified Offer (as hereinafter
defined), the Board of Directors of the Company shall either (i) within 60
days of receipt of the Qualified Offer either redeem the Rights or approve an
alternative transaction which the Board of Directors of the Company has
determined to be financially superior for the holders of shares of Common
Stock other than the Person making the Qualified Offer and its Affiliates or
(ii) call a special meeting of shareholders at which the shareholders shall
vote on whether to redeem the Rights, which the Board of Directors of the
Company shall do if a majority of the outstanding shares not Beneficially
Owned by the person making the Qualified Offer votes affirmatively to request
the Board to redeem the Rights. A "Qualified Offer" is a tender offer (i)
made in accordance with applicable law, (ii) for all outstanding shares at
the same price per share, (iii) for cash on a fully-financed basis or for
non-cash consideration consisting solely of New York Stock Exchange listed
securities offered on a basis that will afford holders of Shares tax-deferred
treatment, (iv) not subject to financing, funding or due diligence conditions
and (v) as to which a nationally recognized investment banking firm selected
by the Company has not opined is inadequate.
The holders of Rights will, solely by reason of their ownership of
Rights, have no rights as shareholders of the Company, including, without
limitation, the right to vote or to receive dividends.
The Company issued a Press Release in connection with the transactions
described herein. The Press Release is filed herewith as Exhibit 99 and is
incorporated herein by this reference. The Restated Rights Agreement (which
includes as Exhibit A thereto the forms of Rights Certificate and Election to
Exercise), and Amendment 1 to Restated Rights Agreement are incorporated
herein by this reference. The foregoing description is qualified in its
entirety by reference to the Restated Rights Agreement (and such exhibit
thereto) and the Amendment 1 to Restated Rights Agreement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements: None.
(b) Pro Forma Financial Information: None.
(c) Exhibits: See Exhibit Index immediately following the signature page
hereto.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August 20, 2001 SHONEY'S, INC.
By: /s/ F. E. McDaniel, Jr.
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Name: F.E. McDaniel, Jr.
Title: Secretary, Treasurer and General
Counsel
EXHIBIT INDEX
Exhibit No. Description Page No.
4.1 Amended and Restated Rights Agreement,
dated as of December 4, 2000, and
effective as of August 8, 2001, between
Shoney's, Inc. and Registrar and Transfer
Company, as Rights Agent (including as
Exhibit A thereto the forms of Rights
Certificate and Election to Exercise),
filed as Exhibit 1 to Amendment No. 6 to
the Company's Registration Statement on
Form 8-A (No. 001-10208), filed with the
Commission on August 20, 2001, and
incorporated herein by this reference.
4.2 Amendment No. 1 to Amended and Restated
Rights Agreement, dated as of August 20,
2001, by and between Shoney's, Inc. and
Registrar and Transfer Company, as Rights
Agent, filed as Exhibit 2 to Amendment No.
6 to the Company's Registration Statement
on Form 8-A (No. 001-10208), filed with
the Commission on August 20, 2001, and
incorporated herein by this reference.
99 Press Release dated August 8, 2001.