THE
COMMITTEE TO ENHANCE DENNY’S
__________,
2010
Dear
Fellow Stockholder:
The
members of The Committee to Enhance Denny’s (the “Committee” or “we”) own an
aggregate of 6,245,476 shares of common stock of Denny’s Corporation (the
“Company”), representing approximately 6.5% of the outstanding common stock of
the Company. We do not believe the current Board of Directors of the
Company has acted in your best interests as discussed in further detail in the
attached Proxy Statement. We are therefore seeking your support at
the annual meeting of stockholders (the “Annual Meeting”) scheduled to be held
at [______________] located at [___] [________], [________], [_________]
[_______] on [_______], [________] [__], 2010 at [__]:[__] [_].m., local time,
for the following:
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1.
|
To
elect the Committee’s slate of three director nominees to the Board of
Directors of the Company in opposition to three of the Company’s incumbent
directors whose terms expire at the Annual Meeting,
and
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2.
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To
consider and vote on a proposal to ratify the selection of KPMG LLP as the
independent registered public accounting firm of the Company and its
subsidiaries for the year ending December [30],
2010.
|
Through
the attached Proxy Statement, we are soliciting proxies to elect not only our
three director nominees, but also the candidates who have been nominated by the
Company other than [________], [________] and [________]. This gives
stockholders the ability to vote for the total number of directors up for
election at the Annual Meeting. The names, backgrounds and
qualifications of the Company’s nominees, and other information about them, can
be found in the Company’s proxy statement. There is no assurance that
any of the Company’s nominees will serve as directors if our nominees are
elected.
We are
not seeking control of the Board of Directors. We hope that this
election contest will result in [________], [________] and [________] NOT being re-elected to the
Board of Directors and send a strong message to the remaining incumbent
directors that stockholders are not satisfied with the Company’s operating
performance and management.
We urge
you to carefully consider the information contained in the attached Proxy
Statement and then support our efforts by signing, dating and returning the
enclosed GOLD proxy card
today. The attached Proxy Statement and the enclosed GOLD proxy card are first
being furnished to the stockholders on or about [______], 2010.
If you
have already voted for the incumbent management slate you have every right to
change your vote by signing, dating and returning a later dated GOLD proxy card or by voting
in person at the Annual Meeting.
If you
have any questions or require any assistance with your vote, please contact
MacKenzie Partners, Inc., which is assisting us, at their address and toll-free
numbers listed below.
|
Thank
you for your support,
|
|
|
|
|
|
The
Committee to Enhance Denny’s
|
|
|
|
|
Jonathan
Dash
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David
Makula
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Patrick
Walsh
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If
you have any questions, require assistance in voting your GOLD proxy
card,
or
need additional copies of the Committee’s proxy materials, please
call
MacKenzie
Partners, Inc. at the phone numbers or email listed below.
105
Madison Avenue
New
York, New York 10016
(212)
929-5500 (Call Collect)
enhancedennys@mackenziepartners.com
or
CALL
TOLL FREE (800) 322-2885
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|
Important
Notice Regarding the Availability of Proxy Materials
for
the Annual Meeting
The
attached Proxy Statement and GOLD proxy card are available at
www.[_____].com
PRELIMINARY
COPY SUBJECT TO COMPLETION
DATED
MARCH 15, 2010
ANNUAL
MEETING OF STOCKHOLDERS
OF
DENNY’S
CORPORATION
_________________________
PROXY
STATEMENT
OF
THE
COMMITTEE TO ENHANCE DENNY’S
_________________________
PLEASE
SIGN, DATE AND MAIL THE ENCLOSED GOLD PROXY CARD TODAY
The
members of The Committee to Enhance Denny’s (collectively referred to herein as
the “Committee” or “we”), who are named as participants in this Proxy Statement,
are stockholders of Denny’s Corporation, a Delaware corporation (the
“Company”). We are writing to seek your support for the election of
our three director nominees to the board of directors of the Company (the
“Board”) at the annual meeting of stockholders (the “Annual Meeting”) scheduled
to be held at [______________] located at [___] [________], [________],
[_________] [_______] on [_______], [________] [__], 2010 at [__]:[__] [_].m.,
local time, including any adjournments or postponements thereof and any meeting
which may be called in lieu thereof. This Proxy Statement and the
enclosed GOLD proxy card
are first being furnished to stockholders on or about [______],
2010.
This
Proxy Statement and the enclosed GOLD proxy card are being
furnished by the Committee in connection with the solicitation of proxies from
the Company’s stockholders for the following:
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1.
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To
elect the Committee’s director nominees, Patrick H. Arbor, Jonathan Dash
and David Makula (each a “Nominee” and, collectively, the “Nominees”), to
serve as directors of the Company, in opposition to the Company’s
incumbent directors whose terms expire at the Annual Meeting,
and
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2.
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To
consider and vote on a proposal to ratify the selection of KPMG LLP as the
independent registered public accounting firm of the Company and its
subsidiaries for the year ending December [30],
2010.
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This
Proxy Statement is soliciting proxies to elect not only our three Nominees, but
also the candidates who have been nominated by the Company other than
[________], [________] and [________]. This gives stockholders who
wish to vote for our three Nominees the ability to vote for a full slate of
eight nominees in total.
The
members of the Committee are Oak Street Capital Master Fund, Ltd., a Cayman
Islands exempted company (“Oak Street Master”), Oak Street Capital Management,
LLC, a Delaware limited liability company (“Oak Street Management”), Patrick
Walsh, Dash Acquisitions LLC, a Delaware limited liability company (“Dash
Acquisitions”), Soundpost Capital, LP, a Delaware limited partnership
(“Soundpost Onshore”), Soundpost Capital Offshore, Ltd., a Cayman Islands
exempted company (“Soundpost Offshore”), Soundpost Advisors, LLC, a Delaware
limited liability company (“Soundpost Advisors”), Soundpost Partners, LP, a
Delaware limited partnership (“Soundpost Partners”), Soundpost Investments, LLC,
a Delaware limited liability company (“Soundpost Investments”), Jaime Lester,
Lyrical Opportunity Partners II, L.P., a Delaware limited partnership (“Lyrical
Onshore”), Lyrical Opportunity Partners II, Ltd., a Cayman Islands exempted
company (“Lyrical Offshore”), Lyrical Opportunity Partners II GP, L.P., a
Delaware limited partnership (“Lyrical Onshore GP”), Lyrical Corp III, LLC, a
Delaware limited liability company (“Lyrical III”), Lyrical Partners, L.P., a
Delaware limited partnership (“Lyrical Partners”), Lyrical Corp I, LLC, a
Delaware limited liability company (“Lyrical I”), Jeffrey Keswin and the
Nominees. The members of the Committee are deemed participants in
this proxy solicitation.
The
Company has set the record date for determining stockholders entitled to notice
of and to vote at the Annual Meeting as March 23, 2010 (the “Record
Date”). The mailing address of the principal executive offices of the
Company is 203 East Main Street, Spartanburg, South Carolina
29319-0001. Stockholders of record at the close of business on the
Record Date will be entitled to vote at the Annual Meeting. According
to the Company, as of the Record Date, there were [_______] shares of common
stock, par value $0.01 per share (the “Shares”), outstanding and entitled to
vote at the Annual Meeting. As of the Record Date, the members of the
Committee owned an aggregate of 6,245,476 Shares, which represents approximately
6.5% of the Shares outstanding. The Committee intends to vote such
Shares FOR the election
of the Nominees and FOR
the ratification of the selection of KPMG LLP, as described herein.
THIS
SOLICITATION IS BEING MADE BY THE COMMITTEE AND NOT ON BEHALF OF THE BOARD OF
DIRECTORS OR MANAGEMENT OF THE COMPANY. THE COMMITTEE IS NOT AWARE OF
ANY OTHER MATTERS TO BE BROUGHT BEFORE THE ANNUAL MEETING OTHER THAN AS
DESCRIBED HEREIN. SHOULD OTHER MATTERS, WHICH THE COMMITTEE IS NOT
AWARE OF A REASONABLE TIME BEFORE THIS SOLICITATION, BE BROUGHT BEFORE THE
ANNUAL MEETING, THE PERSONS NAMED AS PROXIES IN THE ENCLOSED GOLD PROXY CARD WILL VOTE ON
SUCH MATTERS IN THEIR DISCRETION.
THE
COMMITTEE URGES YOU TO SIGN, DATE AND RETURN THE GOLD PROXY CARD IN FAVOR OF
THE ELECTION OF ITS NOMINEES.
IF YOU
HAVE ALREADY SENT A PROXY CARD FURNISHED BY COMPANY MANAGEMENT OR THE BOARD, YOU
MAY REVOKE THAT PROXY AND VOTE FOR EACH OF THE PROPOSALS DESCRIBED IN THIS PROXY
STATEMENT BY SIGNING, DATING AND RETURNING THE ENCLOSED GOLD PROXY
CARD. THE LATEST DATED PROXY IS THE ONLY ONE THAT
COUNTS. ANY PROXY MAY BE REVOKED AT ANY TIME PRIOR TO THE ANNUAL
MEETING BY DELIVERING A WRITTEN NOTICE OF REVOCATION OR A LATER DATED PROXY FOR
THE ANNUAL MEETING OR BY VOTING IN PERSON AT THE ANNUAL MEETING.
Important
Notice Regarding the Availability of Proxy Materials
for
the Annual Meeting
This
Proxy Statement and GOLD proxy card are available at
www.[_____].com
IMPORTANT
Your
vote is important, no matter how many Shares you own. We urge you to
sign, date, and return the enclosed GOLD proxy card today to vote FOR the
election of our Nominees.
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·
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If your Shares are registered
in your own name, please sign and date the enclosed GOLD proxy card and
return it to the Committee, c/o MacKenzie Partners, Inc., in the enclosed
envelope today.
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If your Shares are held in a
brokerage account or bank, you are considered the beneficial owner
of the Shares, and these proxy materials, together with a GOLD voting form, are
being forwarded to you by your broker or bank. As a beneficial
owner, you must instruct your broker, trustee or other representative how
to vote. Your broker
cannot vote your Shares on your behalf without your
instructions.
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Depending
upon your broker or custodian, you may be able to vote either by toll-free
telephone or by the Internet. Please refer to the enclosed
voting form for instructions on how to vote electronically. You
may also vote by signing, dating and returning the enclosed voting
form.
|
Since
only your latest dated proxy card will count, we urge you not to return any
proxy card you receive from the Company. Even if you return the
management proxy card marked “against” or “abstain” as a protest against the
incumbent directors, it will revoke any proxy card you may have previously sent
to the Committee. Remember, you can vote for our three independent
Nominees only on our GOLD proxy card. So
please make certain that the latest dated proxy card you return is the GOLD proxy card.
If
you have any questions regarding your proxy,
or
need assistance in voting your Shares, please call:
105
Madison Avenue
New
York, New York 10016
(212)
929-5500 (Call Collect)
or
CALL
TOLL FREE (800) 322-2885
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|
REASONS
FOR OUR SOLICITATION
We
believe the Company has failed to create value for its
stockholders.
We are
one of the largest stockholders of the Company. As the beneficial
owners of an aggregate of 6,245,476 Shares, representing approximately 6.5% of
the outstanding Shares, we have one major goal: to maximize the value of the
Shares for all stockholders. We believe the Board has failed to
maximize stockholder value as a result of poor management, failed growth
strategy, high operating expenses and deficient
accountability. Specifically, our concerns include, but are not
limited to, the following:
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·
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Ceding
the #1 market position to International House of Pancakes
(“IHOP”)
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·
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Failure
to grow system-wide restaurants
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·
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Unacceptable
declines in key operating trends such as guest
traffic
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·
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Inappropriately
high general and administrative
expenses
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Imprudent
capital allocation decisions
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Lack
of accountability for management at the Board level,
and
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Extremely
poor Share price performance
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Denny’s
is a terrific iconic American brand and we believe stockholder value can be
restored with the help of our highly qualified Nominees. If elected
at the Annual Meeting, the Nominees would seek to work with the other Board
members to address the concerns outlined above and discussed in further detail
below.
POOR
SHARE PRICE PERFORMANCE
We
believe the Company’s Share price performance since it emerged from bankruptcy
in 1998 demonstrates the Company’s inability to create value for its
stockholders.
On
January 8, 1998, the day after the Company emerged from bankruptcy, its new
shares of Common Stock closed at $9.50 per Share. On December 31,
2009, the Company’s Share price closed at $2.19, resulting in a -76.9%
cumulative total stockholder return during this
period.
The
following graph compares the cumulative total stockholders’ return on the Shares
for the five fiscal years ended December 30, 2009 (December 29, 2004 to December
30, 2009) against the cumulative total return of the Russell 2000® Index and a
peer group1 selected by the Company.2
As
illustrated in this graph, during the prior five fiscal years, an investment in the Company
would have lost 51.3% of its value compared to a gain of 2.5% had the
same investment been made in the Russell 2000® Index and a loss of just 6.8% had
the investment been made in the peer group. We believe the Company’s
historically poor Share price performance demonstrates the Board’s and
management’s inability to maximize stockholder value.
1
|
The
peer group consists of 20 public companies that operate in the restaurant
industry. The peer group includes the following companies:
Burger King Holdings, Inc. (BKC), Bob Evans Farms, Inc. (BOBE), Buffalo
Wild Wings, Inc. (BWLD), Cracker Barrel Old Country Store, Inc. (CBRL),
O’Charleys Inc. (CHUX), CKE Restaurants, Inc. (CKR), California Pizza
Kitchen, Inc. (CPKI), Domino’s Pizza, Inc. (DPZ), Darden Restaurants, Inc.
(DRI), Brinker International, Inc. (EAT), DineEquity, Inc. (DIN), Jack In
The Box Inc. (JACK), Panera Bread Company (PNRA), Papa John’s
International, Inc. (PZZA), Red Robin Gourmet Burgers, Inc. (RRGB), Ruby
Tuesday, Inc. (RT), Steak 'n Shake Company (SNS), Sonic Corp. (SONC),
Texas Roadhouse, Inc. (TXRH) and Wendy’s/Arby’s Group, Inc.
(WEN).
|
2
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The graph assumes that $100 was
invested on December 29, 2004 (the last day of fiscal year 2004) in each
of the Shares, the Russell 2000® Index and the peer group and that all
dividends were reinvested. The graph is reprinted from the
Company’s Form 10-K for the year ended December 30,
2009.
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STRATEGIC
SHORTFALLS
We
believe the Company’s failure to grow the restaurant count has placed it at a
competitive disadvantage and has negatively impacted profitability.
We
believe the perennial decline in the number of Company restaurants has
significantly undermined the Company’s ability to stay competitive in the
industry and has negatively impacted profitability. According to the
Company’s public filings, the Company’s system-wide units peaked ten years ago,
at 1,822 restaurants, shortly before Nelson Marchioli was appointed CEO in
2001. Over the past decade, the Board oversaw a 15% decline in total
system-wide restaurants to 1,551 units as of December 31, 2009, based on the
Company’s public filings. This stands in stark contrast to the
Company’s closest competitor, IHOP, which during the same timeframe increased
system-wide restaurants from 922 units to 1,433 units as of the third quarter of
fiscal 2009, based on the public filings of DineEquity, Inc., the parent company
of IHOP (“DineEquity”). We believe the foregone franchise fees that
has resulted from the decline of system-wide units has impaired the Company’s
competitive position and its profitability.
We
believe declines in guest traffic and the Company’s response by raising prices
has been detrimental to the business.
We
believe the Company needs to improve critical operating trends such as guest
traffic – a key barometer of a restaurant’s health. According to data
provided during the Company’s conference calls and the Company’s public filings,
the Company served approximately 900,000 guests per day in 2005, versus only
some 725,000 per day currently, representing a 19% decline. We are
deeply concerned that if these guest traffic declines are allowed to persist,
the effect on stockholders will be dire.
We are
also concerned that management has failed to apply an effective marketing and
pricing strategy focused on delivering value to customers. While the
Company’s customer attendance has declined, management has responded by
consistently raising prices. We believe management’s pricing strategy
has been unsuccessful, particularly during the recent economic downturn when
price hikes failed to resonate with an ailing consumer and guest count losses
accelerated. We view the consistent price increases as an
unsustainable strategy. We believe management needs to align the
price of the Company’s food with its perceived value.
The
Company has recently ceded its historic leadership position in casual family
dining to IHOP.
After ten
years of pursuing a failed growth strategy, the Company recently ceded its
historic leadership in casual family dining to IHOP. Since 2000, IHOP
has more than doubled system-wide sales from approximately $1.2 billion to
approximately $2.5 billion estimated for this year, based on DineEquity’s public
filings. During this same timeframe, the Company’s system-wide sales
have been approximately flat. As a result, IHOP’s system-wide sales
have now surpassed the Company’s system-wide sales. We believe
the Company must strive to recapture its leadership position in the industry in
order to remain competitive and maximize stockholder value.
OPERATIONAL
CONCERNS
We
believe the Company has not made proper capital allocation
decisions.
One of
the main responsibilities of a board of directors of any public company is to
properly allocate capital. We believe the Company’s historical
capital allocation strategy and balance sheet management have been
inadequate. According to the Company’s public filings, the Company
invested approximately $150 million in capital expenditures, principally for
store remodeling, since 2005. We believe stockholder value was eroded
when management coupled a low return, expensive remodeling program with an
ineffective marketing strategy. Clearly, given the Company's poor
Share price performance, these significant capital expenditures failed to
produce the desired results. We believe prudent capital allocation
decisions must be made on a go forward basis in order for the Company to reclaim
its position as a leader in casual family dining.
The
Company’s general and administrative expenses have increased despite the decline
in the number of system-wide units.
We also
believe that the Board has not done an adequate job controlling
expenses. According to the Company’s public filings, management has
refranchised or closed approximately 310 locations since 2002. Based
on our research of the industry, and conservatively assuming all locations were
refranchised, we would expect general and administrative expenses to decline by
$18.6 million, or $60,000 per unit. Surprisingly,
according to the Company’s public filings, the Company’s general and
administrative expenses have actually increased by approximately $7.3 million
since 2002. We believe this is attributable to a culture of
wasteful spending at the corporate headquarters.
We
believe stockholder value will continue to deteriorate unless general and
administrative expenses are significantly reduced.
We
do not believe the Company has been responsive to the concerns of its
franchisees.
We are
aware that the Board has not been responsive to concerns expressed to it by the
Denny’s Franchisee Association. Certain large franchisees of the
Company have indicated to us that CEO Nelson Marchioli impeded their ability to
open new restaurants while IHOP continued to grow and has now surpassed the
Company in system-wide sales. We believe the Board must improve its
relations with its franchisee base in order to remain competitive and to improve
the business.
LACK
OF ACCOUNTABILITY
We
do not believe the members of the Board have a significant ownership interest in
the Company and therefore lack a meaningful economic interest in holding
management accountable.
We are
concerned that the lack of significant actual ownership of the Shares by the
members of the Board may contribute to the Board’s lack of commitment to
maximizing stockholder value.
The
following table, which is based on disclosure in the Company’s proxy statement
in connection with the 2009 Annual Meeting of Stockholders (the “2009 Proxy
Statement”), sets forth the beneficial ownership of Shares by the directors of
the Company that were up for election at the annual meeting (7 in total) as of
March 24, 2009.
Director
|
Total
|
Shares
Underlying Derivative
Securities3
|
Shares Held
Outright
|
Brenda
J. Lauderback
|
65,561
|
|
65,561
|
|
0
|
|
Nelson
J. Marchioli
|
4,316,363
|
|
3,300,067
|
|
1,016,296
|
|
Robert
E. Marks
|
188,486
|
|
133,633
|
|
54,853
|
|
Louis
P. Neeb
|
14,651
|
|
14,651
|
|
0
|
|
Donald
C. Robinson
|
832
|
|
832
|
|
0
|
|
Donald
R. Shepherd
|
181,272
|
|
136,419
|
|
44,853
|
|
Debra
Smithart-Oglesby
|
130,235
|
|
120,235
|
|
10,000
|
|
|
|
|
|
|
|
|
Total
|
4,897,400
|
|
3,771,398
|
|
1,126,002
|
|
|
|
|
|
|
|
|
Ownership
Percentage
|
4.9%
|
|
3.8%
|
|
1.2%
|
|
As
illustrated in the table above:
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·
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The
directors’ ownership of Shares held outright constituted just 1.2% of
the then outstanding Shares.
|
|
·
|
The
independent directors (all directors other than Mr. Marchioli) owned
outright an aggregate of just 109,706 Shares,
or 0.1% of the then outstanding
Shares.
|
|
·
|
Directors
Lauderback, Neeb and Robinson did not even own any
Shares outright.
|
3
|
Consists of Shares that such
individuals had the right to acquire within 60 days through the exercise
of stock options and that such individuals had the vested right to acquire
within 60 days through the conversion of deferred stock units upon
termination of service as a director of the
Company.
|
As the
owners of an aggregate of 6,245,476 Shares, constituting approximately 6.5% of
the outstanding Shares, the members of the Committee have a significant
investment in the Company. Of these Shares, 1,928,076 Shares are
owned outright by Oak Street Master and accounts managed by Oak Street
Management, which are controlled by Mr. Makula, 1,202,300 Shares are owned
outright by accounts managed by Dash Acquisitions, which is controlled by Mr.
Dash, and 65,000 Shares are owned outright by Mr. Arbor and were paid for with
his own personal funds. Our Nominees therefore have a significant
economic stake in the Company and have a vested personal interest in maximizing
stockholder value.
CEO
Nelson Marchioli has been awarded generous compensation packages despite the
Company’s strategic missteps, poor operating performance and dismal Share price
performance.
We do not
believe Nelson Marchioli has been an effective CEO of the Company. As
discussed in further detail above, the Company has endured strategic missteps
and poor operating performance during Mr. Marchioli’s
stewardship. Despite Mr. Marchioli’s lack of effectiveness, he was
awarded generous compensation packages. According to the 2009 Proxy
Statement:
|
·
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During
the three years ended December 31, 2008, Mr. Marchioli has received over $9 million in
total compensation.
|
|
·
|
Had
Mr. Marchioli’s employment with the Company been terminated as of December
31, 2008 by the Company without cause or by Mr. Marchioli for good reason,
he would have been entitled to total severance
payments and benefits valued at approximately $3.1
million.
|
|
·
|
Had
Mr. Marchioli’s employment with the Company been terminated as of December
31, 2008 as a result of his death or disability, he (or his family) would
have been entitled to total severance
payments and benefits valued at approximately $2.4
million.
|
|
·
|
Had
Mr. Marchioli’s employment with the Company been terminated as of December
31, 2008, following a change of control of the Company, by the Company
without cause or by Mr. Marchioli for good reason, he would have been
entitled to total severance
payments and benefits valued at approximately $7.6
million.
|
A public
company’s compensation program should be designed to provide a correlation
between the financial success of management and the
stockholders. During the three years Mr. Marchioli received over $9
million in total compensation,
|
·
|
Cash
Flow from Operations declined by over
50%
|
|
·
|
The
Share price declined by approximately
50%
|
We
therefore see no correlation between the Company’s poor financial and Share
price performance and Mr. Marchioli’s compensation. We believe the
generous compensation packages that have been awarded to Mr. Marchioli
demonstrates the Board’s failure to hold him accountable to the
stockholders.
OUR
PLAN TO MAXIMIZE STOCKHOLDER VALUE
If
elected at the Annual Meeting, our Nominees would seek to work with the other
Board members to address the concerns discussed above.
If
elected, our Nominees will not have the power by themselves to cause the Board
to act in any particular way. However, subject to their fiduciary
duties to the Company and stockholders under applicable law, our Nominees will
attempt to influence their fellow directors to act in a manner that we believe
is in the best interests of all stockholders. The initiatives that
our Nominees would seek to implement are as follows:
|
·
|
Create
a pay-for-performance culture that clearly and measurably aligns
management’s interests with those of
stockholders
|
|
·
|
Implement
a cost structure that provides the Company with a source of competitive
advantage, by sustainably reducing annual operating expenses by at least
$15 million
|
|
·
|
Reverse
the declining trend in guest traffic and comp store sales with more
effective marketing and an improved price-to-value relationship for the
customer
|
|
·
|
Rationalize
capital expenditures to an average of less than $10 million per
year
|
|
·
|
Halt
value-eroding sales of company-owned restaurant units at unreasonably low
prices
|
|
·
|
Refocus
marketing efforts on a consistent value message, not on marketing gimmicks
that send the wrong message and attract the wrong customer
base
|
|
·
|
Restore
system-wide unit growth through franchisee development,
and
|
|
·
|
Improve
the Company’s relationship with its
franchisees
|
Our
Nominees have the experience and qualifications to address the Company’s
strategic, operational and financial deficiencies.
Our
Nominees possess the skill sets required to address the Company’s current
needs:
|
·
|
Patrick H. Arbor is a
director of Macquarie Futures USA Inc., a Futures Commission Merchant and
clearing member of the Chicago Mercantile Exchange and other
exchanges. Mr. Arbor is a long-time member of the Chicago Board
of Trade, the world’s oldest derivatives exchange, and served as its
Chairman from 1993 to 1999. During that period, Mr. Arbor also
served on the Board of Directors of the National Futures
Association. Prior to that, he served as Vice Chairman of the
Chicago Board of Trade for three years and as a director of the Chicago
Board of Trade for ten years. Mr. Arbor’s extensive experience
serving on the Board of Directors of the Chicago Board of Trade and a
wide-range of other public and private companies has given him a strong
understanding of corporate responsibility and corporate
governance.
|
|
·
|
Jonathan Dash is the
President of Dash Acquisitions, an investment management
firm. He is a director of Western Sizzlin Corporation, a
publicly-traded restaurant chain with 102 restaurants. He
served until recently as a consultant to The Steak n Shake Company, a
publicly-traded restaurant chain with 485 restaurants. Mr. Dash
helped to revitalize the Steak n Shake brand and reverse a long history of
negative sales comparisons that culminated in double digit positive same
store sales comparisons within 18 months. Mr. Dash brings
valuable experience in the restaurant business due to his significant
roles in helping revitalize the marketing, supply chain and research and
development departments of Steak n
Shake.
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·
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David Makula is the
Founder and Managing Member of Oak Street Management, an investment
management firm. He was previously a Research Analyst with
Coghill Capital Management, LLC, an investment management
firm. He also served as an Investment Banker for Salomon Smith
Barney, where he focused on mergers and acquisitions across a variety of
sectors. Mr. Makula holds a CPA certificate from the State of
Illinois. He brings significant capital markets experience and
he will work to address the Company’s capital allocation and other
financial issues.
|
Our
Nominees have no affiliation with the Board or the management team responsible
for the Company’s existing strategy. We believe this lack of
affiliation will allow our Nominees to address the strategic, operational and
financial issues facing the Company without a bias towards preserving the
current roles of management and the Board. Further, the members of
the Committee are in a position to gain only if the long-term value of the
Company’s Shares is maximized. Therefore, our perspective is directly
aligned with other long-term stockholders of the Company.
ELECTION
OF DIRECTORS
The Board
is currently composed of eight directors whose terms expire at the Annual
Meeting. We are seeking your support at the Annual Meeting to elect
our Nominees in opposition to three of the Company’s director nominees,
[________], [________] and [________]. Your vote to elect our
Nominees will have the legal effect of replacing three incumbent directors of
the Company with our Nominees. If elected, our Nominees will
represent a minority of the members of the Board.
THE
NOMINEES
The
following information sets forth the name, age, business address, present
principal occupation, and employment and material occupations, positions,
offices, or employments for the past five years of each of the
Nominees. This information also includes for each of the Nominees the
specific experience, qualifications, attributes and skills that led the
Committee to conclude that the Nominees should serve as directors of the
Company. This information has been furnished to us by the
Nominees. The Nominees are citizens of the United States of
America.
Patrick H. Arbor (Age 73) has
served as a director of Macquarie Futures USA Inc., a Futures Commission
Merchant and clearing member of the Chicago Mercantile Exchange and other
exchanges, since September 2008. He has served as a director of First
Chicago Bank and Trust Company, a $1.2 billion community bank, since February
2008. He has also served as a director of Western New Independent
States Enterprise Fund, a public/private equity investment bank serving Belarus,
Ukraine and Moldova, since 1994. Mr. Arbor is a long-time member of
the Chicago Board of Trade (“CBOT”), the world’s oldest derivatives exchange,
serving as the organization’s Chairman from 1993 to 1999. During that
period, Mr. Arbor also served on the Board of Directors of the National Futures
Association. Prior to that, he served as Vice Chairman of the CBOT
for three years and as a director of the CBOT for ten years. Mr.
Arbor served as a director of Merriman Curhan Ford Group, Inc., a financial
services firm, from February 2001 to May 2009. He served as Chairman
of United Financial Holdings, Inc., a bank holding company, from 2000 to
September 2008. Mr. Arbor was a principal of the trading firm of
Shatkin-Arbor & Co. from 1992 to September 2008. He served as a
director of United Community Bank, a $260 million community bank, from 2000 to
September 2008. He served as a director of Rock Island Specialist
Group, Chicago Stock Exchange, from 2000 to 2004. Mr. Arbor’s other
exchange memberships include the Chicago Board Options Exchange, the Mid-America
Commodity Exchange and the Chicago Stock Exchange. Mr. Arbor’s
extensive experience serving on the Board of Directors of a wide-range of public
and private companies has given him a strong understanding of corporate
responsibility and corporate governance. Mr. Arbor received a B.S. in
Finance and Economics from Loyola University. The principal business
address of Mr. Arbor is c/o Chicago Board of Trade, 141 West Jackson Boulevard,
Suite 300, Chicago, Illinois 60604. As of the date hereof, Mr. Arbor
directly owns 65,000 Shares. For information regarding purchases and
sales during the past two years by Mr. Arbor of securities of the Company, see
Schedule
I.
Jonathan Dash (Age 30) has
served as the President of Dash Acquisitions, an investment management firm,
since April 2005. He has served since March 2006 as a director of
Western Sizzlin Corporation, a publicly-traded restaurant chain with 102
restaurants. He served as a consultant to The Steak n Shake Company,
a publicly-traded restaurant chain with 485 restaurants, from September 2008 to
March 2010. Mr. Dash, working under the Chairman and CEO, helped to
revitalize the Steak n Shake brand and reverse a long history of negative sales
comparisons that culminated in double digit positive same store sales
comparisons within 18 months. Mr. Dash brings valuable experience in
the restaurant business due to his significant roles in helping revitalize the
marketing, supply chain and research and development departments of Steak n
Shake. Mr. Dash received a B.A. in Finance from the University of
Southern California. The principal business address of Mr. Dash is
9701 Wilshire Boulevard, Suite 1110, Beverly Hills, California
90212. As of the date hereof, Mr. Dash does not directly own, and has
not purchased or sold during the past two years, any securities of the
Company. Mr. Dash, as an affiliate of Dash Acquisitions, may be
deemed to beneficially own the 1,202,300 Shares beneficially owned by Dash
Acquisitions. For information regarding purchases and sales during
the past two years by Dash Acquisitions of securities of the Company that may be
deemed to be beneficially owned by Mr. Dash, see Schedule
I.
David Makula (Age 32) is the
Founder and has served as the Managing Member of Oak Street Management, an
investment management firm, since March 2005. He was previously a
Research Analyst with Coghill Capital Management, LLC, an investment management
firm, from August 2002 to October 2004. He also served as an
Investment Banker at Salomon Smith Barney, a brokerage, investment banking and
asset management firm, from July 1999 to January 2002. He brings
significant capital market experience that will be instrumental in addressing
the Company’s capital allocation and other financial issues. Mr.
Makula received a B.S. in Accountancy from the University of Illinois at
Urbana-Champaign. He also holds a CPA certificate from the State of
Illinois. The principal business address of Mr. Makula is 111 S.
Wacker Drive, 33rd
Floor, Chicago, Illinois 60606. As of the date hereof, Mr. Makula
does not directly own, and has not purchased or sold during the past two years,
any securities of the Company. Mr. Makula, as an affiliate of Oak
Street Management, may be deemed to beneficially own the 1,928,076 Shares
beneficially owned by Oak Street Management. For information
regarding purchases and sales during the past two years by Oak Street Management
and its affiliates of securities of the Company that may be deemed to be
beneficially owned by Mr. Makula, see Schedule
I.
If
elected as a director of the Company, each of the Nominees would be an
“independent director” within the meaning of applicable NASDAQ listing standards
applicable to board composition and Section 301 of the Sarbanes-Oxley Act of
2002.
Other
than as stated herein, there are no arrangements or understandings between the
Nominees and any other member of the Committee or any other person or persons
pursuant to which the nomination described herein is to be made, other than the
consent by each of the Nominees to be named in this Proxy Statement and to serve
as a director of the Company if elected as such at the Annual
Meeting. In accordance with the By-Laws of the Company, each of the
Nominees has delivered a letter agreement to the Company representing that he
does not have and will not have any undisclosed voting commitments or other
arrangements with respect to his actions as a director of the Company and
agreeing to complete a nominee questionnaire, as may be provided from time to
time by the Company, that relates to his independence and other information
required to be included in a proxy statement of the Company pursuant to
Regulation 14A of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), or otherwise reasonably requested by the Company. None of the
Nominees is a party adverse to the Company or any of its subsidiaries or has a
material interest adverse to the Company or any of its subsidiaries in any
material pending legal proceedings.
The
Committee does not expect that the Nominees will be unable to stand for
election, but, in the event that such persons are unable to serve or for good
cause will not serve, the Shares represented by the enclosed GOLD proxy card will be voted
for substitute nominees, to the extent this is not prohibited under the By-Laws
of the Company and applicable law. In addition, the Committee
reserves the right to nominate substitute persons if the Company makes or
announces any changes to its By-Laws or takes or announces any other action that
has, or if consummated would have, the effect of disqualifying the Nominees, to
the extent this is not prohibited under the By-Laws and applicable
law. In any such case, Shares represented by the enclosed GOLD proxy card will be voted
for such substitute nominees. The Committee reserves the right to
nominate additional persons, to the extent this is not prohibited under the
By-Laws of the Company and applicable law, if the Company increases the size of
the Board above its existing size or increases the number of directors whose
terms expire at the Annual Meeting. Additional nominations made
pursuant to the preceding sentence are without prejudice to the position of the
Committee that any attempt to increase the size of the current Board constitutes
an unlawful manipulation of the Company’s corporate machinery.
YOU
ARE URGED TO VOTE FOR THE ELECTION OF THE NOMINEES ON THE ENCLOSED GOLD PROXY
CARD.
PROPOSAL
NO. 2
COMPANY
PROPOSAL TO RATIFY SELECTION OF INDEPENDENT
REGISTERED
PUBLIC ACCOUNTING FIRM
As
discussed in further detail in the Company’s proxy statement, the Audit
Committee of the Board has selected KPMG LLP as the Company’s independent
registered public accounting firm for the year 2010. The Company is
submitting the selection of KPMG LLP for ratification of and approval by the
stockholders at the Annual Meeting.
WE
DO NOT OBJECT TO THE RATIFICATION OF THE SELECTION OF KPMG LLP AS THE
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM OF THE COMPANY FOR THE YEAR
2010.
VOTING
AND PROXY PROCEDURES
Only
stockholders of record on the Record Date will be entitled to notice of and to
vote at the Annual Meeting. Each Share is entitled to one
vote. Stockholders who sell Shares before the Record Date (or acquire
them without voting rights after the Record Date) may not vote such
Shares. Stockholders of record on the Record Date will retain their
voting rights in connection with the Annual Meeting even if they sell such
Shares after the Record Date. Based on publicly available
information, we believe that the only outstanding class of securities of the
Company entitled to vote at the Annual Meeting is the Shares.
Shares
represented by properly executed GOLD proxy cards will be voted
at the Annual Meeting as marked and, in the absence of specific instructions,
will be voted FOR the
election of the Nominees to the current Board, FOR the candidates who have
been nominated by the Company other than [________], [________] and [________]
and FOR the ratification
of the selection of KPMG LLP and in the discretion of the persons named as
proxies on all other matters as may properly come before the Annual
Meeting.
According
to the Company’s proxy statement for the Annual Meeting, the current Board
intends to nominate eight candidates for election as directors at the Annual
Meeting. This Proxy Statement is soliciting proxies to elect not only
our three Nominees, but also the candidates who have been nominated by the
Company other than [________], [________] and [________]. This gives
stockholders who wish to vote for our three Nominees and such other persons the
ability to do so. Under applicable proxy rules we are required either
to solicit proxies only for our three Nominees, which could result in limiting
the ability of stockholders to fully exercise their voting rights with respect
to the Company’s nominees, or to solicit for our three Nominees and for fewer
than all of the Company’s nominees, which enables a stockholder who desires to
vote for our three Nominees to also vote for those of the Company’s nominees for
whom we are soliciting proxies. The names, backgrounds and
qualifications of the Company’s nominees, and other information about them, can
be found in the Company’s proxy statement. There is no assurance that
any of the Company’s nominees will serve as directors if our Nominees are
elected.
QUORUM
At the
Annual Meeting, a quorum, consisting of a majority of the outstanding Shares as
of the Record Date, represented in person or by proxy, will be required for the
transaction of business by stockholders. All Shares that are voted at
the Annual Meeting, including abstentions, will be counted for purposes of
determining whether a quorum has been reached.
VOTES
REQUIRED FOR APPROVAL
Election of
Directors. Directors will be elected by a plurality of the
votes cast at the Annual Meeting. The director nominees who receive
the largest number of votes cast will be elected, up to the maximum number of
directors to be elected at the Annual Meeting. A vote to “withhold
authority” for any director nominee will have no impact on the election of
directors.
Ratification of Selection of KPMG
LLP. The ratification of the selection of KPMG LLP will be
determined by a majority of the votes cast. Abstentions will have no
effect on the outcome of the vote for the ratification of the selection of KPMG
LLP.
DISCRETIONARY
VOTING
Shares
held in “street name” and held of record by banks, brokers or nominees may not
be voted by such banks, brokers or nominees unless the beneficial owners of such
Shares provide them with instructions on how to vote.
REVOCATION
OF PROXIES
Stockholders
of the Company may revoke their proxies at any time prior to exercise by
attending the Annual Meeting and voting in person (although attendance at the
Annual Meeting will not in and of itself constitute revocation of a proxy) or by
delivering a written notice of revocation. The delivery of a
subsequently dated proxy which is properly completed will constitute a
revocation of any earlier proxy. The revocation may be delivered
either to the Committee in care of MacKenzie Partners, Inc. at the address set
forth on the back cover of this Proxy Statement or to the Company at 203 East
Main Street, Spartanburg, South Carolina 29319-0001 or any other address
provided by the Company. Although a revocation is effective if
delivered to the Company, we request that either the original or photostatic
copies of all revocations be mailed to the Committee in care of MacKenzie
Partners, Inc. at the address set forth on the back cover of this Proxy
Statement so that we will be aware of all revocations and can more accurately
determine if and when proxies have been received from the holders of record on
the Record Date of a majority of the outstanding
Shares. Additionally, MacKenzie Partners, Inc. may use this
information to contact stockholders who have revoked their proxies in order to
solicit later dated proxies for the election of the Nominees.
IF
YOU WISH TO VOTE FOR THE ELECTION OF OUR THREE NOMINEES TO THE BOARD AND FOR THE
RATIFICATION OF THE SELECTION OF KPMG LLP, PLEASE SIGN, DATE AND RETURN PROMPTLY
THE ENCLOSED GOLD PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED.
SOLICITATION
OF PROXIES
The
solicitation of proxies pursuant to this Proxy Statement is being made by the
Committee. Proxies may be solicited by mail, facsimile, telephone,
telegraph, Internet, in person and by advertisements.
The
Committee has entered into an agreement with MacKenzie Partners, Inc. for
solicitation and advisory services in connection with this solicitation, for
which MacKenzie Partners, Inc. will receive a fee not to exceed $150,000
together with reimbursement for its reasonable out-of-pocket expenses, and will
be indemnified against certain liabilities and expenses, including certain
liabilities under the federal securities laws. MacKenzie Partners,
Inc. will solicit proxies from individuals, brokers, banks, bank nominees and
other institutional holders. The Committee has requested banks,
brokerage houses and other custodians, nominees and fiduciaries to forward all
solicitation materials to the beneficial owners of the Shares they hold of
record. The Committee will reimburse these record holders for their
reasonable out-of-pocket expenses in so doing. It is anticipated that
MacKenzie Partners, Inc. will employ approximately 35 persons to solicit the
Company’s stockholders for the Annual Meeting.
Each of
Oak Street Management, Dash Acquisitions, Soundpost Partners and Lyrical
Partners have agreed to pay a specified proportional share of all expenses
incurred in connection with the solicitation of proxies pursuant to the terms of
a Joint Filing and Solicitation Agreement (as discussed below). Costs
of this solicitation of proxies are currently estimated to be approximately
$[_______]. The Committee estimates that through the date hereof, its
expenses in connection with this solicitation are approximately
$[_______]. The Committee intends to seek reimbursement from the
Company of all expenses it incurs in connection with the solicitation of proxies
for the election of the Nominees to the Board at the Annual
Meeting. The Committee does not intend to submit the question of such
reimbursement to a vote of security holders of the Company.
OTHER
PARTICIPANT INFORMATION
Each
member of the Committee is a participant in this solicitation.
Oak
Street Management is the investment manager of Oak Street Master and a managed
account (the “Oak Street Account”). Mr. Makula is the sole managing
member of Oak Street Management. The principal business of Oak Street
Master is investing in securities. The principal business of Oak
Street Management is serving as the investment manager of Oak Street Master and
the Oak Street Account. The principal occupation of Mr. Makula is
serving as the managing member of Oak Street Management. The
principal business address of each of Oak Street Master, Oak Street Management
and Mr. Makula is 111 S. Wacker Drive, 33rd
Floor, Chicago, Illinois 60606.
As of the
date hereof, Oak Street Master owns directly 1,826,333 Shares and 101,743 Shares
are held in the Oak Street Account. By virtue of their relationship
with Oak Street Master and the Oak Street Account, each of Oak Street Management
and Mr. Makula may be deemed to beneficially own the Shares owned directly by
Oak Street Master and the Shares held in the Oak Street Account.
The
principal occupation of Mr. Walsh is serving as a Senior Partner of Oak Street
Management. The principal business address of Mr. Walsh is 111 S.
Wacker Drive, 33rd
Floor, Chicago, Illinois 60606. As of the date hereof, Mr. Walsh owns
directly 43,000 Shares.
Dash
Acquisitions is the investment manager of managed accounts (the “Dash
Accounts”). Mr. Dash serves as the President of Dash
Acquisitions. The principal business of Dash Acquisitions is serving
as the investment manager of the Dash Accounts. The principal
occupation of Mr. Dash is serving as the President of Dash
Acquisitions. The principal business address of each of Dash
Acquisitions and Mr. Dash is 9701 Wilshire Boulevard, Suite 1110, Beverly Hills,
California 90212.
As of the
date hereof, 1,202,300 Shares are held in the Dash Accounts. By
virtue of their relationships with the Dash Accounts, each of Dash Acquisitions
and Mr. Dash may be deemed to beneficially own the Shares held in the Dash
Accounts.
Soundpost
Advisors is the general partner of Soundpost Onshore. Soundpost
Partners is the investment manager of each of Soundpost Offshore and a managed
account (the “Soundpost Account”). Soundpost Investments is the
general partner of Soundpost Partners. Mr. Lester is the sole
managing member of Soundpost Advisors and Soundpost Investments. The
principal business of Soundpost Advisors is providing investment management
services to private individuals and institutions and serving as the general
partner of Soundpost Onshore. The principal business of Soundpost
Partners is providing investment management services to private individuals and
institutions and serving as the investment manager of each of Soundpost Offshore
and the Soundpost Account. The principal business of each of
Soundpost Onshore and Soundpost Offshore is investing in
securities. The principal business of Soundpost Investments is
serving as the general partner of Soundpost Partners. The principal
occupation of Mr. Lester is serving as the managing member of Soundpost Advisors
and Soundpost Investments. The principal business address of each of
Soundpost Onshore, Soundpost Advisors, Soundpost Partners, Soundpost Investments
and Mr. Lester is 405 Park Avenue, 6th
Floor, New York, New York 10022. The principal business address of
Soundpost Offshore is Gardenia Court, Suite 3307, 45 Market Street, Camana Bay,
P.O. Box 896, Grand Cayman, Cayman Islands, KY1-1103.
As of the
date hereof, Soundpost Onshore owns directly 1,407,587 Shares, Soundpost
Offshore owns directly 551,882 Shares and 340,531 Shares are held in the
Soundpost Account. By virtue of their relationships with Soundpost
Onshore, each of Soundpost Advisors and Mr. Lester may be deemed to beneficially
own the Shares owned directly by Soundpost Onshore. By virtue of
their relationships with Soundpost Offshore, each of Soundpost Partners,
Soundpost Investments and Mr. Lester may be deemed to beneficially own the
Shares owned directly by Soundpost Offshore. By virtue of their
relationships with the Soundpost Account, each of Soundpost Partners, Soundpost
Investments and Mr. Lester may be deemed to beneficially own the Shares held in
the Soundpost Account.
Lyrical
Onshore GP is the general partner of Lyrical Onshore. Lyrical III is
the general partner of Lyrical Onshore GP. Lyrical Partners is the
investment manager of Lyrical Offshore. Lyrical I is the general
partner of Lyrical Partners. Mr. Keswin is the sole managing member
of Lyrical III and Lyrical I. The principal business of Lyrical
Onshore GP is providing investment management services to private individuals
and institutions and serving as the general partner of Lyrical
Onshore. The principal business of Lyrical Partners is providing
investment management services to private individuals and institutions and
serving as the investment manager of Lyrical Offshore. The principal
business of each of Lyrical Onshore and Lyrical Offshore is investing in
securities. The principal business of Lyrical III is serving as the
general partner of Lyrical Onshore GP. The principal business of
Lyrical I is serving as the general partner of Lyrical Partners. The
principal occupation of Mr. Keswin is serving as the managing member of Lyrical
III and Lyrical I. The principal business address of each of Lyrical
Onshore, Lyrical Onshore GP, Lyrical III, Lyrical Partners, Lyrical I and Mr.
Keswin is 405 Park Avenue, 6th
Floor, New York, New York 10022. The principal business address of
Lyrical Offshore is c/o Ogier Fiduciary Services (Cayman) Limited, P.O. Box 1234
GT, Queensgate House, South Church Street, Grand Cayman, Cayman Islands,
KY1-1108.
As of the
date hereof, Lyrical Onshore owns directly 338,500 Shares and Lyrical Offshore
owns directly 368,600 Shares. By virtue of their relationships with
Lyrical Onshore, each of Lyrical Onshore GP, Lyrical III and Mr. Keswin may be
deemed to beneficially own the Shares owned directly by Lyrical
Onshore. By virtue of their relationships with Lyrical Offshore, each
of Lyrical Partners, Lyrical I and Mr. Keswin may be deemed to beneficially own
the Shares owned directly by Lyrical Offshore.
The
principal occupation of Mr. Arbor is serving as a director of Macquarie Futures
USA Inc., a Futures Commission Merchant and clearing member of the Chicago
Mercantile Exchange and other exchanges. The principal business
address of Mr. Arbor is c/o Chicago Board of Trade, 141 West Jackson Boulevard,
Suite 300, Chicago, Illinois 60604. As of the date hereof, Mr. Arbor
owns directly 65,000 Shares.
As of the
date hereof, the members of the Committee collectively own an aggregate of
6,245,476 Shares, constituting approximately 6.5% of the Shares
outstanding. Each member of the Committee, as a member of a “group”
with the other Committee members, for purposes of Rule 13d-5(b)(1) of the
Exchange Act, may be deemed to beneficially own the Shares owned by the other
Committee members. Each Committee member specifically disclaims
beneficial ownership of the Shares disclosed herein that he or it does not
directly own. For information regarding purchases and sales of
securities of the Company during the past two years by the members of the
Committee, see Schedule
I.
The
Shares owned collectively by the members of the Committee are held primarily in
margin accounts maintained with prime brokers, which may extend margin credit as
and when required to open or carry positions in the margin accounts, subject to
applicable federal margin regulations, stock exchange rules and the prime
brokers’ credit policies. In such instances, the positions held in
the margin accounts are pledged as collateral security for the repayment of
debit balances in the accounts.
On March
2, 2010, the members of the Committee entered into a Joint Filing and
Solicitation Agreement pursuant to which, among other things, (i) the parties
agreed to the joint filing on behalf of each of them of statements on Schedule
13D with respect to the securities of the Company; (ii) the parties agreed to
solicit proxies or written consents to elect the Nominees and to take all other
action necessary or advisable to achieve the foregoing; (iii) the parties agreed
on procedures for notifying Oak Street Management of transactions in securities
of the Company; (iv) the parties agreed on procedures for approving filings with
the SEC, press releases and stockholder communications proposed to be made or
issued by the parties; (v) each of Oak Street Management, Dash Acquisitions,
Soundpost Partners and Lyrical Partners agreed to pay a specified proportional
share of all expenses incurred by the parties in connection with their
activities that have been approved by Oak Street Management and Dash
Acquisitions; and (vi) the parties agreed that they shall be referred to as “The
Committee to Enhance Denny’s”.
Oak
Street Management, Dash Acquisitions, Soundpost Partners and Lyrical Partners
have entered into letter agreements pursuant to which they have agreed to
indemnify the Nominees and Patrick Walsh against claims arising from the
solicitation of proxies from the Company’s stockholders in connection with the
Annual Meeting and any related transactions.
Except as
set forth in this Proxy Statement (including the Schedules hereto), (i) during
the past 10 years, no participant in this solicitation has been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors); (ii)
no participant in this solicitation directly or indirectly beneficially owns any
securities of the Company; (iii) no participant in this solicitation owns any
securities of the Company which are owned of record but not beneficially; (iv)
no participant in this solicitation has purchased or sold any securities of the
Company during the past two years; (v) no part of the purchase price or market
value of the securities of the Company owned by any participant in this
solicitation is represented by funds borrowed or otherwise obtained for the
purpose of acquiring or holding such securities; (vi) no participant in this
solicitation is, or within the past year was, a party to any contract,
arrangements or understandings with any person with respect to any securities of
the Company, including, but not limited to, joint ventures, loan or option
arrangements, puts or calls, guarantees against loss or guarantees of profit,
division of losses or profits, or the giving or withholding of proxies; (vii) no
associate of any participant in this solicitation owns beneficially, directly or
indirectly, any securities of the Company; (viii) no participant in this
solicitation owns beneficially, directly or indirectly, any securities of any
parent or subsidiary of the Company; (ix) no participant in this solicitation or
any of his or its associates was a party to any transaction, or series of
similar transactions, since the beginning of the Company’s last fiscal year, or
is a party to any currently proposed transaction, or series of similar
transactions, to which the Company or any of its subsidiaries was or is to be a
party, in which the amount involved exceeds $120,000; (x) no participant in this
solicitation or any of his or its associates has any arrangement or
understanding with any person with respect to any future employment by the
Company or its affiliates, or with respect to any future transactions to which
the Company or any of its affiliates will or may be a party; and (xi) no
participant in this solicitation has a substantial interest, direct or indirect,
by securities holdings or otherwise in any matter to be acted on at the Annual
Meeting. There are no material proceedings to which any participant
in this solicitation or any of his or its associates is a party adverse to the
Company or any of its subsidiaries or has a material interest adverse to the
Company or any of its subsidiaries. With respect to each of the
Nominees, none of the events enumerated in Item 401(f)(1)-(8) of Regulation S-K
of the Exchange Act occurred during the past ten years.
OTHER
MATTERS AND ADDITIONAL INFORMATION
Other
Matters
Other
than as discussed above, the Committee is unaware of any other matters to be
considered at the Annual Meeting. However, should other matters,
which the Committee is not aware of a reasonable time before this solicitation,
be brought before the Annual Meeting, the persons named as proxies on the
enclosed GOLD proxy card
will vote on such matters in their discretion.
Stockholder
Proposals and Nominations
In order
for stockholder proposals intended to be presented at the 2011 Annual Meeting of
Stockholders of the Company (the “2011 Annual Meeting”) to be eligible for
inclusion in the Company’s proxy statement and the form of proxy for such
meeting, they must be received by the Company at its corporate address no later
than [_____], 2010. Regarding stockholder proposals intended to be
presented at the 2011 Annual Meeting but not included in the Company’s proxy
statement, including stockholder nominations of directors, pursuant to the
Company’s By-Laws, written notice of such proposals, to be timely, must be
received by the Company no more than 90 days and no less than 60 days prior to
[_____], 2011 (i.e., the first anniversary of the preceding year’s annual
meeting). In the event that the date of the 2011 Annual Meeting is
advanced more than 30 days prior to such anniversary date or delayed more than
60 days after such anniversary date, then to be timely such notice must be
received by the Company no later than the later of (i) 70 days prior to the date
of the meeting or (ii) the 10th day
following the day on which public announcement of the date of the meeting was
made. All such proposals for which timely notice is not received in
the manner described above will be ruled out of order at the meeting, resulting
in the proposal’s underlying business not being eligible for transaction at the
meeting. Such notices must contain the information specified in the
Company’s By-Laws, including information concerning the proposal or nominee and
information about the stockholder’s ownership of Shares.
The
information set forth above regarding the procedures for submitting stockholder
proposals and nominations for consideration at the 2011 Annual Meeting is based
on information contained in the Company’s proxy statement. The
incorporation of this information in this Proxy Statement should not be
construed as an admission by the Committee that such procedures are legal, valid
or binding.
Incorporation
by Reference
The
Committee has omitted from this Proxy Statement certain disclosure required by
applicable law that is already included in the Company’s proxy statement
relating to the Annual Meeting. This disclosure includes, among other
things, current biographical information on the Company’s directors, information
concerning executive compensation, and other important
information. Although the Committee does not have any knowledge
indicating that any statement made by it herein is untrue, the Committee does
not take any responsibility for the accuracy or completeness of statements taken
from public documents and records that were not prepared by or on the
Committee’s behalf, or for any failure by the Company to disclose events that
may affect the significance or accuracy of such information. See
Schedule II for information regarding persons who beneficially own more than 5%
of the Shares and the ownership of the Shares by the directors and management of
the Company.
The
information concerning the Company contained in this Proxy Statement and the
Schedules attached hereto has been taken from, or is based upon, publicly
available information.
The
Committee to Enhance Denny’s
|
|
|
[_______],
2010
|
SCHEDULE
I
TRANSACTIONS
IN SECURITIES OF DENNY’S CORPORATION
DURING
THE PAST TWO YEARS
Class
of
Security
|
Securities
Purchased/(Sold)
|
Price
Per
Share ($)
|
Date
of
Purchase/Sale
|
|
|
|
|
OAK STREET CAPITAL MASTER FUND,
LTD.
|
|
|
|
|
|
Common
Stock
|
32,726
|
|
2.5850
|
08/27/09
|
Common
Stock
|
2,000
|
|
2.5850
|
08/27/09
|
Common
Stock
|
47,310
|
|
2.6268
|
08/28/09
|
Common
Stock
|
16,700
|
|
2.5500
|
09/01/09
|
Common
Stock
|
23,655
|
|
2.6940
|
09/08/09
|
Common
Stock
|
27,534
|
|
2.7218
|
09/09/09
|
Common
Stock
|
23,655
|
|
2.7378
|
09/11/09
|
Common
Stock
|
189
|
|
2.7814
|
09/14/09
|
Common
Stock
|
9,273
|
|
2.7276
|
09/16/09
|
Common
Stock
|
4,731
|
|
2.5310
|
09/23/09
|
Common
Stock
|
18,924
|
|
2.5551
|
09/23/09
|
Common
Stock
|
4,731
|
|
2.5168
|
09/23/09
|
Common
Stock
|
4,731
|
|
2.4110
|
09/24/09
|
Common
Stock
|
4,731
|
|
2.2870
|
09/24/09
|
Common
Stock
|
4,731
|
|
2.3410
|
09/24/09
|
Common
Stock
|
28,386
|
|
2.3092
|
10/30/09
|
Common
Stock
|
494,890
|
|
2.1811
|
11/03/09
|
Common
Stock
|
94,500
|
|
2.2577
|
11/04/09
|
Common
Stock
|
5,954
|
|
2.2500
|
11/06/09
|
Common
Stock
|
40,730
|
|
2.2683
|
11/10/09
|
Common
Stock
|
155,642
|
|
2.2833
|
11/11/09
|
Common
Stock
|
47,500
|
|
2.2814
|
11/12/09
|
Common
Stock
|
23,625
|
|
2.2380
|
11/13/09
|
Common
Stock
|
94,500
|
|
2.3393
|
11/18/09
|
Common
Stock
|
118,750
|
|
2.2358
|
11/20/09
|
Common
Stock
|
47,500
|
|
2.2286
|
11/23/09
|
Common
Stock
|
21,375
|
|
2.4300
|
12/15/09
|
Common
Stock
|
11,685
|
|
2.4155
|
12/16/09
|
Common
Stock
|
9,310
|
|
2.4402
|
12/17/09
|
Common
Stock
|
95,000
|
|
2.2875
|
12/23/09
|
Common
Stock
|
47,500
|
|
2.2800
|
12/24/09
|
Common
Stock
|
95,000
|
|
2.2153
|
12/28/09
|
Common
Stock
|
47,500
|
|
2.1899
|
12/29/09
|
Common
Stock
|
23,750
|
|
2.1600
|
12/31/09
|
Common
Stock
|
380
|
|
2.4138
|
02/16/10
|
Common
Stock
|
13,015
|
|
2.5950
|
02/19/10
|
Common
Stock
|
19,208
|
|
2.6939
|
02/24/10
|
Common
Stock
|
17,512
|
|
2.7264
|
02/25/10
|
Common
Stock
|
47,500
|
|
2.7502
|
02/26/10
|
Class
of
Security
|
Securities
Purchased/(Sold)
|
Price
Per
Share ($)
|
Date
of
Purchase/Sale
|
|
|
|
OAK STREET CAPITAL MANAGEMENT,
LLC
(Through Oak Street
Account)
|
|
|
|
|
|
Common
Stock
|
1,974
|
|
2.5850
|
08/27/09
|
Common
Stock
|
2,690
|
|
2.6268
|
08/28/09
|
Common
Stock
|
950
|
|
2.5500
|
09/01/09
|
Common
Stock
|
1,345
|
|
2.6940
|
09/08/09
|
Common
Stock
|
1,566
|
|
2.7218
|
09/09/09
|
Common
Stock
|
1,345
|
|
2.7378
|
09/11/09
|
Common
Stock
|
11
|
|
2.7814
|
09/14/09
|
Common
Stock
|
527
|
|
2.7276
|
09/16/09
|
Common
Stock
|
269
|
|
2.5310
|
09/23/09
|
Common
Stock
|
1,076
|
|
2.5551
|
09/23/09
|
Common
Stock
|
269
|
|
2.5168
|
09/23/09
|
Common
Stock
|
269
|
|
2.4110
|
09/24/09
|
Common
Stock
|
269
|
|
2.2870
|
09/24/09
|
Common
Stock
|
269
|
|
2.3410
|
09/24/09
|
Common
Stock
|
1,614
|
|
2.3092
|
10/30/09
|
Common
Stock
|
28,803
|
|
2.1811
|
11/03/09
|
Common
Stock
|
5,500
|
|
2.2577
|
11/04/09
|
Common
Stock
|
346
|
|
2.2500
|
11/06/09
|
Common
Stock
|
2,370
|
|
2.2683
|
11/10/09
|
Common
Stock
|
9,058
|
|
2.2833
|
11/11/09
|
Common
Stock
|
2,500
|
|
2.2814
|
11/12/09
|
Common
Stock
|
1,375
|
|
2.2380
|
11/13/09
|
Common
Stock
|
5,500
|
|
2.3393
|
11/18/09
|
Common
Stock
|
6,250
|
|
2.2358
|
11/20/09
|
Common
Stock
|
2,500
|
|
2.2286
|
11/23/09
|
Common
Stock
|
1,125
|
|
2.4300
|
12/15/09
|
Common
Stock
|
615
|
|
2.4155
|
12/16/09
|
Common
Stock
|
490
|
|
2.4402
|
12/17/09
|
Common
Stock
|
5,000
|
|
2.2875
|
12/23/09
|
Common
Stock
|
2,500
|
|
2.2800
|
12/24/09
|
Common
Stock
|
5,000
|
|
2.2153
|
12/28/09
|
Common
Stock
|
2,500
|
|
2.1899
|
12/29/09
|
Common
Stock
|
1,250
|
|
2.1600
|
12/31/09
|
Common
Stock
|
20
|
|
2.4138
|
02/16/10
|
Common
Stock
|
685
|
|
2.5950
|
02/19/10
|
Common
Stock
|
492
|
|
2.6939
|
02/24/10
|
Common
Stock
|
921
|
|
2.7264
|
02/25/10
|
Common
Stock
|
2,500
|
|
2.7502
|
02/26/10
|
Class
of
Security
|
Securities
Purchased/(Sold)
|
Price
Per
Share ($)
|
Date
of
Purchase/Sale
|
|
|
|
|
|
|
|
Common
Stock
|
1,000
|
|
2.5629
|
08/27/09
|
Common
Stock
|
2,000
|
|
2.6564
|
08/28/09
|
Common
Stock
|
1,000
|
|
2.6129
|
08/28/09
|
Common
Stock
|
200
|
|
2.3350
|
09/24/09
|
Common
Stock
|
1,000
|
|
2.3329
|
10/30/09
|
Common
Stock
|
2,000
|
|
2.1564
|
11/03/09
|
Common
Stock
|
200
|
|
2.1750
|
11/03/09
|
Common
Stock
|
800
|
|
2.2012
|
11/03/09
|
Common
Stock
|
200
|
|
2.1750
|
11/03/09
|
Common
Stock
|
400
|
|
2.2624
|
11/09/09
|
Common
Stock
|
600
|
|
2.2683
|
11/09/09
|
Common
Stock
|
300
|
|
2.2567
|
11/09/09
|
Common
Stock
|
100
|
|
2.2101
|
11/09/09
|
Common
Stock
|
100
|
|
2.2101
|
11/09/09
|
Common
Stock
|
72
|
|
2.1829
|
11/09/09
|
Common
Stock
|
100
|
|
2.2101
|
11/09/09
|
Common
Stock
|
200
|
|
2.2451
|
11/09/09
|
Common
Stock
|
128
|
|
2.2254
|
11/09/09
|
Common
Stock
|
1,000
|
|
2.2725
|
11/10/09
|
Common
Stock
|
100
|
|
2.1601
|
11/13/09
|
Common
Stock
|
381
|
|
2.2117
|
11/13/09
|
Common
Stock
|
519
|
|
2.2165
|
11/13/09
|
Common
Stock
|
2,000
|
|
2.2264
|
11/20/09
|
Common
Stock
|
2,000
|
|
2.2364
|
11/23/09
|
Common
Stock
|
2,000
|
|
2.1965
|
11/24/09
|
Common
Stock
|
2,000
|
|
2.2464
|
12/01/09
|
Common
Stock
|
3,000
|
|
2.2776
|
12/21/09
|
Common
Stock
|
2,000
|
|
2.2664
|
12/21/09
|
Common
Stock
|
800
|
|
2.2813
|
12/21/09
|
Common
Stock
|
1,200
|
|
2.2841
|
12/21/09
|
Common
Stock
|
1,000
|
|
2.2825
|
12/21/09
|
Common
Stock
|
500
|
|
2.2755
|
12/21/09
|
Common
Stock
|
500
|
|
2.2760
|
12/21/09
|
Common
Stock
|
2,000
|
|
2.3464
|
12/21/09
|
Common
Stock
|
1,500
|
|
2.2848
|
12/21/09
|
Common
Stock
|
1,000
|
|
2.2829
|
12/22/09
|
Common
Stock
|
625
|
|
2.2283
|
12/28/09
|
Common
Stock
|
475
|
|
2.2353
|
12/28/09
|
Common
Stock
|
2,000
|
|
2.1964
|
12/29/09
|
Common
Stock
|
5,000
|
|
2.2086
|
12/31/09
|
Common
Stock
|
1,000
|
|
2.1629
|
12/31/09
|
Class
of
Security
|
Securities
Purchased/(Sold)
|
Price
Per
Share ($)
|
Date
of
Purchase/Sale
|
|
|
DASH ACQUISITIONS LLC
(Through Dash
Accounts)
|
|
|
|
|
|
Common
Stock
|
120,000
|
|
2.2982
|
12/21/09
|
Common
Stock
|
50,544
|
|
2.2925
|
12/22/09
|
Common
Stock
|
20,000
|
|
2.2789
|
12/24/09
|
Common
Stock
|
23,735
|
|
2.1800
|
12/29/09
|
Common
Stock
|
10,000
|
|
2.1680
|
12/31/09
|
Common
Stock
|
17,000
|
|
2.2300
|
01/05/10
|
Common
Stock
|
3,787
|
|
2.2100
|
01/06/10
|
Common
Stock
|
41,400
|
|
2.2410
|
01/07/10
|
Common
Stock
|
39,245
|
|
2.3140
|
01/08/10
|
Common
Stock
|
6,800
|
|
2.2770
|
01/11/10
|
Common
Stock
|
20,200
|
|
2.3293
|
01/12/10
|
Common
Stock
|
35,800
|
|
2.3172
|
01/13/10
|
Common
Stock
|
12,500
|
|
2.3100
|
01/15/10
|
Common
Stock
|
42,580
|
|
2.3400
|
01/19/10
|
Common
Stock
|
74,950
|
|
2.3700
|
01/21/10
|
Common
Stock
|
67,900
|
|
2.6500
|
02/19/10
|
Common
Stock
|
275,173
|
|
2.7500
|
02/22/10
|
Common
Stock
|
138,386
|
|
2.7700
|
02/23/10
|
Common
Stock
|
202,300
|
|
2.7200
|
02/25/10
|
|
|
|
|
|
Common
Stock
|
30,925
|
|
2.2609
|
11/25/09
|
Common
Stock
|
18,555
|
|
2.2024
|
11/27/09
|
Common
Stock
|
4,949
|
|
2.1958
|
11/30/09
|
Common
Stock
|
30,930
|
|
2.2374
|
11/30/09
|
Common
Stock
|
12,372
|
|
2.1970
|
11/30/09
|
Common
Stock
|
5,567
|
|
2.1926
|
11/30/09
|
Common
Stock
|
124
|
|
2.2475
|
12/01/09
|
Common
Stock
|
44,500
|
|
2.2689
|
12/01/09
|
Common
Stock
|
89
|
|
2.2900
|
12/01/09
|
Common
Stock
|
43,820
|
|
2.3203
|
12/02/09
|
Common
Stock
|
32,516
|
|
2.3245
|
12/02/09
|
Common
Stock
|
32,909
|
|
2.3625
|
12/03/09
|
Common
Stock
|
40,507
|
|
2.3849
|
12/03/09
|
Common
Stock
|
42,348
|
|
2.3821
|
12/03/09
|
Common
Stock
|
53,292
|
|
2.4624
|
12/04/09
|
Common
Stock
|
36,558
|
|
2.4792
|
12/04/09
|
Common
Stock
|
61,909
|
|
2.5393
|
12/07/09
|
Common
Stock
|
46,431
|
|
2.5490
|
12/07/09
|
Common
Stock
|
66,804
|
|
2.5320
|
12/07/09
|
Common
Stock
|
29,741
|
|
2.4709
|
12/08/09
|
Common
Stock
|
15,972
|
|
2.4776
|
12/08/09
|
Common
Stock
|
104,254
|
|
2.4583
|
12/09/09
|
Common
Stock
|
61,909
|
|
2.4557
|
12/09/09
|
Common
Stock
|
248
|
|
2.4200
|
12/10/09
|
Common
Stock
|
94,720
|
|
2.4412
|
12/10/09
|
Common
Stock
|
123,817
|
|
2.4325
|
12/10/09
|
Common
Stock
|
3,949
|
|
2.4344
|
12/11/09
|
Common
Stock
|
12,691
|
|
2.4433
|
12/14/09
|
Common
Stock
|
30,954
|
|
2.4419
|
12/15/09
|
Common
Stock
|
10,648
|
|
2.4328
|
12/16/09
|
Common
Stock
|
30,954
|
|
2.4391
|
12/17/09
|
Common
Stock
|
15,477
|
|
2.4236
|
12/18/09
|
Class
of
Security
|
Securities
Purchased/(Sold)
|
Price
Per
Share ($)
|
Date
of
Purchase/Sale
|
Common
Stock
|
91,479
|
|
2.2999
|
12/22/09
|
Common
Stock
|
6,191
|
|
2.2892
|
12/23/09
|
Common
Stock
|
36,846
|
|
2.2249
|
01/04/10
|
Common
Stock
|
(21,181)
|
# |
2.1900
|
01/04/10
|
Common
Stock
|
38,577
|
|
2.2351
|
01/05/10
|
Common
Stock
|
41,074
|
|
2.2188
|
01/06/10
|
Common
Stock
|
15,212
|
|
2.2481
|
01/07/10
|
Common
Stock
|
21,296
|
|
2.2957
|
01/08/10
|
Common
Stock
|
14,326
|
|
2.2912
|
01/11/10
|
Common
Stock
|
8,028
|
* |
2.4200
|
02/01/10
|
Common
Stock
|
15,300
|
|
2.5636
|
02/18/10
|
|
|
|
|
|
SOUNDPOST CAPITAL OFFSHORE,
LTD.
|
|
|
|
|
|
Common
Stock
|
10,680
|
|
2.2609
|
11/25/09
|
Common
Stock
|
6,408
|
|
2.2024
|
11/27/09
|
Common
Stock
|
1,708
|
|
2.1958
|
11/30/09
|
Common
Stock
|
10,679
|
|
2.2374
|
11/30/09
|
Common
Stock
|
4,271
|
|
2.1970
|
11/30/09
|
Common
Stock
|
1,923
|
|
2.1926
|
11/30/09
|
Common
Stock
|
42
|
|
2.2475
|
12/01/09
|
Common
Stock
|
15,363
|
|
2.2689
|
12/01/09
|
Common
Stock
|
(418)
|
|
2.2900
|
12/01/09
|
Common
Stock
|
14,941
|
|
2.3203
|
12/02/09
|
Common
Stock
|
11,226
|
|
2.3245
|
12/02/09
|
Common
Stock
|
11,221
|
|
2.3625
|
12/03/09
|
Common
Stock
|
13,812
|
|
2.3849
|
12/03/09
|
Common
Stock
|
14,439
|
|
2.3821
|
12/03/09
|
Common
Stock
|
18,170
|
|
2.4624
|
12/04/09
|
Common
Stock
|
12,465
|
|
2.4792
|
12/04/09
|
Common
Stock
|
21,108
|
|
2.5393
|
12/07/09
|
Common
Stock
|
15,831
|
|
2.5490
|
12/07/09
|
Common
Stock
|
22,778
|
|
2.5320
|
12/07/09
|
Common
Stock
|
10,140
|
|
2.4709
|
12/08/09
|
Common
Stock
|
5,446
|
|
2.4776
|
12/08/09
|
Common
Stock
|
35,546
|
|
2.4583
|
12/09/09
|
Common
Stock
|
21,108
|
|
2.4557
|
12/09/09
|
Common
Stock
|
84
|
|
2.4200
|
12/10/09
|
Common
Stock
|
32,295
|
|
2.4412
|
12/10/09
|
Common
Stock
|
42,216
|
|
2.4325
|
12/10/09
|
Common
Stock
|
1,346
|
|
2.4344
|
12/11/09
|
Common
Stock
|
4,327
|
|
2.4433
|
12/14/09
|
Common
Stock
|
10,554
|
|
2.4419
|
12/15/09
|
#
Shares transferred in a cross-trade with Soundpost Offshore.
*
Shares acquired in a cross-trade with the Soundpost
Account.
Class
of
Security
|
Securities
Purchased/(Sold)
|
Price
Per
Share ($)
|
Date
of
Purchase/Sale
|
Common
Stock
|
3,631
|
|
2.4328
|
12/16/09
|
Common
Stock
|
10,554
|
|
2.4391
|
12/17/09
|
Common
Stock
|
5,277
|
|
2.4236
|
12/18/09
|
Common
Stock
|
31,190
|
|
2.2999
|
12/22/09
|
Common
Stock
|
2,111
|
|
2.2892
|
12/23/09
|
Common
Stock
|
14,139
|
|
2.2249
|
01/04/10
|
Common
Stock
|
44,663
|
## |
2.1900
|
01/04/10
|
Common
Stock
|
14,808
|
|
2.2351
|
01/05/10
|
Common
Stock
|
15,766
|
|
2.2188
|
01/06/10
|
Common
Stock
|
5,838
|
|
2.2481
|
01/07/10
|
Common
Stock
|
8,175
|
|
2.2957
|
01/08/10
|
Common
Stock
|
5,499
|
|
2.2912
|
01/11/10
|
Common
Stock
|
14,525
|
** |
2.4200
|
02/01/10
|
Common
Stock
|
5,997
|
|
2.5636
|
02/18/10
|
|
|
|
|
|
SOUNDPOST PARTNERS, LP
(Through Soundpost
Account)
|
|
|
|
|
|
Common
Stock
|
8,395
|
|
2.2609
|
11/25/09
|
Common
Stock
|
5,037
|
|
2.2024
|
11/27/09
|
Common
Stock
|
1,343
|
|
2.1958
|
11/30/09
|
Common
Stock
|
8,391
|
|
2.2374
|
11/30/09
|
Common
Stock
|
3,357
|
|
2.1970
|
11/30/09
|
Common
Stock
|
1,510
|
|
2.1926
|
11/30/09
|
Common
Stock
|
34
|
|
2.2475
|
12/01/09
|
Common
Stock
|
12,073
|
|
2.2689
|
12/01/09
|
Common
Stock
|
329
|
|
2.2900
|
12/01/09
|
Common
Stock
|
12,021
|
|
2.3203
|
12/02/09
|
Common
Stock
|
8,822
|
|
2.3245
|
12/02/09
|
Common
Stock
|
9,028
|
|
2.3625
|
12/03/09
|
Common
Stock
|
11,112
|
|
2.3849
|
12/03/09
|
Common
Stock
|
11,617
|
|
2.3821
|
12/03/09
|
Common
Stock
|
14,620
|
|
2.4624
|
12/04/09
|
Common
Stock
|
10,029
|
|
2.4792
|
12/04/09
|
Common
Stock
|
16,983
|
|
2.5393
|
12/07/09
|
Common
Stock
|
12,738
|
|
2.5490
|
12/07/09
|
Common
Stock
|
18,326
|
|
2.5320
|
12/07/09
|
Common
Stock
|
8,159
|
|
2.4709
|
12/08/09
|
Common
Stock
|
4,382
|
|
2.4776
|
12/08/09
|
Common
Stock
|
28,600
|
|
2.4583
|
12/09/09
|
Common
Stock
|
16,983
|
|
2.4557
|
12/09/09
|
Common
Stock
|
68
|
|
2.4200
|
12/10/09
|
Common
Stock
|
25,985
|
|
2.4412
|
12/10/09
|
Common
Stock
|
33,967
|
|
2.4325
|
12/10/09
|
Common
Stock
|
1,083
|
|
2.4344
|
12/11/09
|
##
Shares acquired in a cross-trade with each of Soundpost Onshore and the
Soundpost Account.
**
Shares acquired in a cross-trade with the Soundpost
Account.
Class
of
Security
|
Securities
Purchased/(Sold)
|
Price
Per
Share ($)
|
Date
of
Purchase/Sale
|
Common
Stock
|
3,482
|
|
2.4433
|
12/14/09
|
Common
Stock
|
8,492
|
|
2.4419
|
12/15/09
|
Common
Stock
|
2,921
|
|
2.4328
|
12/16/09
|
Common
Stock
|
8,492
|
|
2.4391
|
12/17/09
|
Common
Stock
|
4,246
|
|
2.4236
|
12/18/09
|
Common
Stock
|
25,096
|
|
2.2999
|
12/22/09
|
Common
Stock
|
1,698
|
|
2.2892
|
12/23/09
|
Common
Stock
|
9,567
|
|
2.2249
|
01/04/10
|
Common
Stock
|
(23,482)
|
###
|
2.1900
|
01/04/10
|
Common
Stock
|
10,015
|
|
2.2351
|
01/05/10
|
Common
Stock
|
10,664
|
|
2.2188
|
01/06/10
|
Common
Stock
|
3,950
|
|
2.2481
|
01/07/10
|
Common
Stock
|
5,529
|
|
2.2957
|
01/08/10
|
Common
Stock
|
3,719
|
|
2.2912
|
01/11/10
|
Common
Stock
|
(22,553)
|
*** |
2.4200
|
02/01/10
|
Common
Stock
|
3,703
|
|
2.5636
|
02/18/10
|
LYRICAL OPPORTUNITY PARTNERS II,
L.P.
|
|
|
|
|
|
Common
Stock
|
6,800
|
|
2.4395
|
12/15/09
|
Common
Stock
|
14,700
|
|
2.4515
|
12/16/09
|
Common
Stock
|
36,700
|
|
2.4265
|
12/17/09
|
Common
Stock
|
10,800
|
|
2.4324
|
12/18/09
|
Common
Stock
|
21,600
|
|
2.3035
|
12/21/09
|
Common
Stock
|
47,300
|
|
2.2890
|
12/22/09
|
Common
Stock
|
146,000
|
|
2.2789
|
12/23/09
|
Common
Stock
|
22,900
|
|
2.2082
|
12/28/09
|
Common
Stock
|
24,600
|
|
2.2053
|
12/29/09
|
Common
Stock
|
6,200
|
|
2.2700
|
01/11/10
|
Common
Stock
|
900
|
|
2.2900
|
01/12/10
|
|
|
|
|
|
LYRICAL OPPORTUNITY PARTNERS II,
LTD.
|
|
|
|
|
|
Common
Stock
|
7,600
|
|
2.4395
|
12/15/09
|
Common
Stock
|
16,300
|
|
2.4515
|
12/16/09
|
Common
Stock
|
40,800
|
|
2.4265
|
12/17/09
|
Common
Stock
|
12,100
|
|
2.4324
|
12/18/09
|
Common
Stock
|
23,941
|
|
2.3035
|
12/21/09
|
Common
Stock
|
52,700
|
|
2.2890
|
12/22/09
|
Common
Stock
|
162,659
|
|
2.2789
|
12/23/09
|
Common
Stock
|
25,200
|
|
2.2082
|
12/28/09
|
Common
Stock
|
27,300
|
|
2.2053
|
12/29/09
|
|
|
|
|
|
###
Shares transferred in a cross-trade with Soundpost Offshore.
***
Shares transferred in a cross-trade with each of Soundpost Onshore and Soundpost
Offshore.
Class
of
Security
|
Securities
Purchased/(Sold)
|
Price
Per
Share ($)
|
Date
of
Purchase/Sale
|
|
|
PATRICK H. ARBOR
|
|
|
|
|
|
Common
Stock
|
600
|
|
2.3000
|
01/13/10
|
Common
Stock
|
3,400
|
|
2.3000
|
01/15/10
|
Common
Stock
|
6,000
|
|
2.2900
|
01/21/10
|
Common
Stock
|
2,000
|
|
2.2900
|
01/28/10
|
Common
Stock
|
4,800
|
|
2.6600
|
02/19/10
|
Common
Stock
|
2,200
|
|
2.6500
|
02/19/10
|
Common
Stock
|
1,000
|
|
2.7100
|
02/19/10
|
Common
Stock
|
10,000
|
|
2.7800
|
02/22/10
|
Common
Stock
|
1,000
|
|
2.7700
|
02/23/10
|
Common
Stock
|
1,000
|
|
2.7600
|
02/23/10
|
Common
Stock
|
1,000
|
|
2.7500
|
02/23/10
|
Common
Stock
|
1,000
|
|
2.7400
|
02/23/10
|
Common
Stock
|
1,000
|
|
2.7300
|
02/23/10
|
Common
Stock
|
1,000
|
|
2.7100
|
02/24/10
|
Common
Stock
|
1,000
|
|
2.7000
|
02/24/10
|
Common
Stock
|
1,000
|
|
2.6900
|
02/24/10
|
Common
Stock
|
1,000
|
|
2.6800
|
02/24/10
|
Common
Stock
|
25,000
|
|
2.7500
|
02/25/10
|
Common
Stock
|
1,000
|
|
2.7280
|
02/25/10
|
SCHEDULE
II
The
following table is reprinted from the Company’s Schedule 14A filed with
the
Securities
and Exchange Commission on April 13, 2009
Principal
Stockholders
The
following table sets forth the beneficial ownership of Common Stock by each
stockholder known by the Company as of March 24, 2009 to own more than 5% of the
outstanding shares. As of March 24, 2009, there were 96,076,172
shares of the Common Stock issued and outstanding.
|
Amount
and Nature
of
Beneficial Ownership
|
Percentage
of
Common
Stock
|
Wellington
Management Company, LLP
75 State Street
Boston, MA 02109
|
9,192,812(1)
|
9.6
|
Fidelity
Management & Research Company
(and related entities)
82 Devonshire Street
Boston, MA 02109
|
7,664,231(2)
|
8.0
|
Olstein
Capital Management, L.P.
4 Manhattanville Road
Purchase, NY 10577-2119
|
6,847,900(3)
|
7.1
|
The
Vanguard Group, Inc.
(and related entities)
100 Vanguard Blvd.
Malvern, PA 19355
|
6,792,410(4)
|
7.1
|
Morgan
Stanley
1585 Broadway
New York, NY 10036
|
6,561,294(5)
|
6.8
|
Keeley
Asset Management Corp.
(and related entities)
401 South LaSalle St.
Chicago, IL 60605
|
5,710,000(6)
|
5.9
|
Barclays
Global Investors, NA
(and related entities)
45 Fremont Street
San Francisco, CA 94105
|
5,681,713(7)
|
5.9
|
_______________
(1)
|
Based
upon the Schedule 13G/A filed with the Securities and Exchange Commission
(the “SEC”) on February 17, 2009. Wellington Management Company, LLP is
deemed to be the beneficial owner of the listed shares and to have shared
voting power with respect to 7,899,470 shares and shared investment power
with respect to 9,192,812 shares.
|
(2)
|
Based
upon the Schedule 13G/A filed with the SEC on February 17, 2009, FMR LLC
is the beneficial owner of 7,664,231 shares and has sole voting power over
2,864,115 shares and sole investment power over 7,664,231 shares. Edward
C. Johnson 3d is the beneficial owner of 7,664,231 shares and has sole
investment power over 7,664,231 shares. Fidelity Management & Research
Company (“Fidelity”), a wholly-owned subsidiary of FMR LLC and an
investment adviser, is the beneficial owner of 4,457,207 shares. Edward C.
Johnson 3d and FMR LLC, through its control of Fidelity, and the Fidelity
Funds (the “Funds”), each has sole investment power over the 4,457,207
shares owned by the Funds. Neither FMR LLC, nor Edward C. Johnson 3d,
Chairman of FMR LLC, has the sole power to vote shares owned directly by
the Funds, which power resides with the Funds’ Board of Trustees. Pyramis
Global Advisers Trust Company (“PGATC”), an indirect wholly-owned
subsidiary of FMR LLC is the beneficial owner of 3,207,024 of the shares
listed as a result of its serving as investment manager of institutional
accounts owning such shares. Edward C. Johnson 3d and FMR LLC, through its
control of PGATC, each has sole investment power over 3,207,024 shares and
sole voting power over 2,864,115 shares owned by the institutional
accounts managed by PGATC.
|
(3)
|
Based
upon the Schedule 13G filed with the SEC on March 23, 2009, Olstein
Capital Management, L.P. (“Olstein”), in its role as investment adviser to
the Olstein All Cap Value Fund and the Olstein Strategic Opportunities
Fund (each a series of the Olstein Funds, an investment company), may be
deemed to beneficially own all of the listed shares and may be deemed to
have sole voting and sole investment power with respect to such shares.
The Olstein Funds are deemed to beneficially own 6,348,900 of the listed
shares and are deemed to have sole voting and sole investment power with
respect to such shares.
|
(4)
|
Based
upon the Schedule 13G filed with the SEC on February 13, 2009. The
Vanguard Group, Inc. is deemed to be the beneficial owner of the listed
shares and to have sole voting power with respect to 102,670 shares and
sole investment power with respect to 6,792,410 shares. Vanguard Fiduciary
Trust Company (“VFTC”), a wholly-owned subsidiary of the Vanguard Group,
Inc., is the beneficial owner of 102,670 shares as a result of its serving
as investment manager of collective trust accounts and has sole voting
power with respect to such shares.
|
(5)
|
Based
upon the Schedule 13G/A filed with the SEC on February 17, 2009. Morgan
Stanley has sole voting power with respect to 6,377,599 shares, sole
investment power with respect to 6,561,294 shares and shared voting power
with respect to 2,185 shares. Morgan Stanley indicates that it files
reports solely in its capacity as the parent company of, and indirect
beneficial owner of shares held by, certain of its operating
units.
|
(6)
|
Based
upon the Schedule 13G/A filed with the SEC on February 13, 2009. Keeley
Asset Management Corp. and the Keeley Small Cap Value Fund are deemed to
be the beneficial owners of the listed shares. Keeley Asset Management
Corp. is deemed to have sole voting and sole investment power with respect
to such shares.
|
(7)
|
Based
upon the Schedule 13G/A filed with the SEC on February 5, 2009, Barclays
Global Investors, NA has sole voting power over 2,937,402 shares and sole
investment power over 3,437,547 shares. Barclays Global Fund Advisors has
sole voting power and sole investment power over 2,244,166
shares.
|
Management
The
following table sets forth, as of March 24, 2009, the beneficial ownership of
Common Stock by: (i) each current member of the Board of Directors (the “Board”)
of Denny’s Corporation, (ii) each director nominee to the Board of Denny’s
Corporation, (iii) each executive officer included in the Summary Compensation
Table elsewhere in this Proxy Statement, and (iv) all current directors and
executive officers of Denny’s Corporation as a group. Except as otherwise noted,
the persons named in the table below have sole voting and investment power with
respect to all shares shown as beneficially owned by them.
|
Amount
and Nature of Beneficial Ownership(1)(2)
|
Percentage
of Common Stock
|
Vera
K. Farris
|
181,110
|
|
*
|
|
Brenda
J. Lauderback
|
65,561
|
|
*
|
|
Nelson
J. Marchioli
|
4,316,363
|
|
4
|
.3 |
Robert
E. Marks
|
188,486
|
|
*
|
|
Michael
Montelongo
|
65,384
|
|
*
|
|
Louis
P. Neeb
|
14,651
|
|
*
|
|
Donald
C. Robinson
|
832
|
|
*
|
|
Donald
R. Shepherd
|
181,272
|
|
*
|
|
Debra
Smithart-Oglesby
|
130,235
|
|
*
|
|
F.
Mark Wolfinger
|
443,517
|
|
*
|
|
Janis
S. Emplit
|
496,720
|
|
*
|
|
Mark
E. Chmiel
|
47,768
|
|
*
|
|
Rhonda
J. Parish
|
792,630
|
|
*
|
|
Samuel
M. Wilensky
|
85,993
|
|
*
|
|
All
current directors and executive officers as a group (12
persons)
|
6,131,899
|
|
6
|
.1 |
_______________
*
|
Less
than one (1) percent.
|
(1)
|
The
Common Stock listed as beneficially owned by the following individuals
includes shares of Common Stock which such individuals have the right to
acquire (within sixty (60) days of March 24, 2009) through the exercise of
stock options: (i) Ms. Farris and Messrs. Marks and Shepherd (90,600
shares each), (ii) Ms. Lauderback and Mr. Montelongo (37,800 shares each),
(iii) Mr. Marchioli (3,300,067 shares), (iv) Mr. Neeb (6,300 shares), (v)
Ms. Smithart-Oglesby (75,600 shares), (vi) Mr. Wolfinger (396,367 shares),
(vii) Ms. Emplit 363,500 shares), (viii) Mr. Chmiel (34,368 shares), (ix)
Ms. Parish (738,700), (x) Mr. Wilensky (50,000 shares) and (xi) all
current directors and executive officers as a group (4,523,602
shares).
|
(2)
|
The
Common Stock listed as beneficially owned by the following individuals
includes shares of Common Stock which such individuals have the vested
right to acquire (within sixty (60) days of March 24, 2009) through the
conversion of deferred stock units upon termination of service as a
director of Denny’s Corporation: (i) Ms. Farris (44,463 shares), (ii) Ms.
Lauderback (27,761 shares), (iii) Mr. Marks (43,033 shares), (iv) Mr.
Montelongo (27,584 shares), (v) Mr. Neeb (8,351 shares), (vi) Mr. Robinson
(832 shares), (vii) Mr. Shepherd (45,819 shares), (viii) Ms.
Smithart-Oglesby (44,635 shares), and (ix) all current directors and
executive officers as a group (243,672
shares).
|
IMPORTANT
Tell your
Board what you think! Your vote is important. No matter
how many Shares you own, please give the Committee your proxy FOR the election of its
Nominees by taking three steps:
|
·
|
SIGNING
the enclosed GOLD
proxy card,
|
|
·
|
DATING
the enclosed GOLD
proxy card, and
|
|
·
|
MAILING
the enclosed GOLD
proxy card TODAY in the envelope provided (no postage is required if
mailed in the United States).
|
If any of your Shares are held in the
name of a brokerage firm, bank, bank nominee or other institution, only it can
vote such Shares and only upon receipt of your specific
instructions. Depending upon your broker or custodian, you may
be able to vote either by toll-free telephone or by the
Internet. Please refer to the enclosed voting form for instructions
on how to vote electronically. You may also vote by signing, dating
and returning the enclosed GOLD voting form.
If you
have any questions or require any additional information concerning this Proxy
Statement, please contact MacKenzie Partners, Inc. at the address set forth
below.
105
Madison Avenue
New
York, New York 10016
(212)
929-5500 (Call Collect)
or
CALL
TOLL FREE (800) 322-2885
|
|
PRELIMINARY
COPY SUBJECT TO COMPLETION
DATED
MARCH 15, 2010
GOLD
PROXY
Denny’s
Corporation
2010
ANNUAL MEETING OF STOCKHOLDERS
THIS
PROXY IS SOLICITED ON BEHALF OF THE COMMITTEE TO ENHANCE DENNY’S
THE
BOARD OF DIRECTORS OF DENNY’S CORPORATION
IS
NOT SOLICITING THIS PROXY
P
R
O
X
Y
The
undersigned appoints [_____] and [_____], and each of them, attorneys and agents
with full power of substitution to vote all shares of common stock of Denny’s
Corporation (the “Company”) which the undersigned would be entitled to vote if
personally present at the 2010 Annual Meeting of Stockholders of the Company
scheduled to be held at [______________] located at [___] [________],
[________], [_________] [_______] on [_______], [________] [__], 2010 at
[__]:[__] [_].m., local time, and including at any adjournments or postponements
thereof and at any meeting called in lieu thereof (the “Annual
Meeting”).
The
undersigned hereby revokes any other proxy or proxies heretofore given to vote
or act with respect to the shares of common stock of the Company held by the
undersigned, and hereby ratifies and confirms all action the herein named
attorneys and proxies, their substitutes, or any of them may lawfully take by
virtue hereof. If properly executed, this proxy will be voted as
directed on the reverse and in the discretion of the herein named attorneys and
proxies or their substitutes with respect to any other matters as may properly
come before the Annual Meeting that are unknown to The Committee to Enhance
Denny’s (the “Committee”) a reasonable time before this
solicitation.
IF
NO DIRECTION IS INDICATED WITH RESPECT TO THE PROPOSALS ON THE REVERSE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
This
proxy will be valid until the sooner of one year from the date indicated on the
reverse side and the completion of the Annual Meeting.
Important
Notice Regarding the Availability of Proxy Materials
for
the Annual Meeting
The
Committee’s Proxy Statement and this GOLD proxy card are available at
www.[_____].com
IMPORTANT:
PLEASE SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY!
CONTINUED
AND TO BE SIGNED ON REVERSE SIDE
[X]
Please mark vote as in this example
THE
COMMITTEE RECOMMENDS A VOTE “FOR” THE NOMINEES LISTED IN PROPOSAL NO. 1 AND
“FOR” PROPOSAL NO. 2
1.
|
APPROVAL
OF THE COMMITTEE’S PROPOSAL TO ELECT
DIRECTORS:
|
|
FOR
ALL
NOMINEES
|
WITHHOLD
AUTHORITY
TO
VOTE
FOR ALL
NOMINEES
|
FOR
ALL
NOMINEES
EXCEPT
|
|
|
|
|
Nominees: |
Patrick
H. Arbor
Jonathan
Dash
David
Makula
|
[ ]
|
[ ]
|
[ ]
|
The
Committee intends to use this proxy to vote (i) “FOR” Messrs. Arbor, Dash and
Makula and (ii) “FOR” the candidates who have been nominated by the Company to
serve as directors other than [________], [________] and [________] for whom the
Committee is NOT seeking authority to vote for and WILL NOT exercise any such
authority. The names, backgrounds and qualifications of the
candidates who have been nominated by the Company, and other information about
them, can be found in the Company’s proxy statement.
There
is no assurance that any of the candidates who have been nominated by the
Company will serve as directors if the Committee’s nominees are
elected.
NOTE:
If you do not wish for your shares to be voted “FOR” a particular Committee
nominee, mark the “FOR ALL NOMINEES EXCEPT” box and write the name(s) of the
nominee(s) you do not support on the line below. Your shares will be
voted for the remaining Committee nominee(s). You may also withhold
authority to vote for one or more additional candidates who have been nominated
by the Company by writing the name(s) of the nominee(s) below.
________________________________________________________________________
2.
|
APPROVAL
OF THE COMPANY’S PROPOSAL TO RATIFY THE SELECTION OF KPMG LLP AS THE
COMPANY’S REGISTERED PUBLIC ACCOUNTING
FIRM:
|
|
FOR
|
AGAINST
|
ABSTAIN
|
|
|
|
|
|
[
]
|
[
]
|
[
]
|
DATED: ____________________________
____________________________________
(Signature)
____________________________________
(Signature,
if held jointly)
____________________________________
(Title)
WHEN
SHARES ARE HELD JOINTLY, JOINT OWNERS SHOULD EACH SIGN. EXECUTORS,
ADMINISTRATORS, TRUSTEES, ETC., SHOULD INDICATE THE CAPACITY IN WHICH
SIGNING. PLEASE SIGN EXACTLY AS NAME APPEARS ON THIS
PROXY.