sec document
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant / /
Filed by a Party other than the Registrant /X/
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/X/ Soliciting Material Under Rule 14a-12
FRIENDLY ICE CREAM CORPORATION
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(Name of Registrant as Specified in Its Charter)
THE LION FUND L.P.
BIGLARI CAPITAL CORP.
WESTERN SIZZLIN CORP.
SARDAR BIGLARI
PHILIP L. COOLEY
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(Name of Persons(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials:
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/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
2
The Lion Fund L.P. (the "Lion Fund"), together with the other
participants named herein, is filing materials contained in this Schedule 14A
with the Securities and Exchange Commission ("SEC") in connection with the
anticipated solicitation of proxies for the election of two nominees as
directors at the 2007 annual meeting of stockholders (the "Annual Meeting") of
Friendly Ice Cream Corporation ("Friendly"). The Lion Fund has not yet filed a
proxy statement with the SEC with regard to the Annual Meeting.
Item 1: Sardar Biglari intends to mail the following letter to the
shareholders of Friendly:
THE LION FUND, L.P.
9311 SAN PEDRO AVENUE, SUITE 1440
SAN ANTONIO, TEXAS 78216
TELEPHONE (210) 344-3400
FAX (210) 344-3411
SARDAR BIGLARI, CHAIRMAN
January 8, 2007
Dear Fellow Shareholder:
On January 2, 2007, Donald Smith, Chairman of Friendly Ice Cream Corp.,
issued another letter that we believe was intended to misinform you. I am not
surprised: Mr. Smith and the board will take any action necessary that would
divert your attention from the company's dismal performance. Mr. Smith, along
with the board, has failed to create shareholder value since Friendly's went
public a decade ago at $18 per share.
In his letter, Mr. Smith neglects to tell shareholders that we recently
proposed just one change to Friendly's corporate governance -- to declassify the
staggered board -- but the board rejected our idea of putting the suggestion to
shareholder vote; instead it opted to protect its interests, not yours.
Shareholders are the true owners of Friendly's; consequently, they should decide
whether or not an entrenched board is good policy. Clearly, the board does not
want to be held accountable.
We believe the board will continue to make decisions to protect its own
best interests at the expense of the shareholders' well-being. The cost of an
entrenched board imposes a heavy burden on Friendly's value. Since we disclosed
our large ownership in the company, its stock price has risen to a level
reflecting the expectation that positive change is in the offing. While we
cannot promise future returns, we can guarantee we will do our best to create
shareholder value by seeking to institute corporate governance reform, improved
operational performance, and improved financial performance -- all revisions
which promote the right behavior -- thereby putting the shareholders first.
Furthermore, we are seeking just two board seats to serve the best
interests of all shareholders. We don't want unequal footing with other
shareholders. Mr. Smith does. For instance, he is permitted to purchase more
than 15% of the company without triggering the company's "poison pill" rights
plan. We will continue to share with you other decisions made by the board
designed to provide immunity not accountability, and in the process to
disenfranchise us shareholders.
We lack confidence in the current board but have confidence that you
will support our position when we seek your votes to bring much needed
independent thought and demanding, impartial financial discipline.
Sincerely,
/s/ Sardar Biglari
-------------------------------
Sardar Biglari
Enclosure: my public statement of January 2, 2007 communicating my
thoughts regarding the board's proposal and our position
THIS COMMUNICATION IS NOT A SOLICITATION OF A PROXY WHICH MAY BE DONE ONLY
PURSUANT TO A DEFINITIVE PROXY STATEMENT. STOCKHOLDERS ARE ADVISED TO READ THE
PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY
THE LION FUND L.P., BIGLARI CAPITAL CORP., WESTERN SIZZLIN CORP., SARDAR BIGLARI
AND PHILIP L. COOLEY FROM THE STOCKHOLDERS OF FRIENDLY ICE CREAM CORPORATION,
FOR USE AT ITS 2007 ANNUAL MEETING OF STOCKHOLDERS WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. WHEN COMPLETED, A DEFINITIVE
PROXY STATEMENT AND A FORM OF PROXY WILL BE MAILED TO STOCKHOLDERS OF FRIENDLY
ICE CREAM CORPORATION AND WILL BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND
EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV. IN ADDITION, COPIES OF THE
PROXY STATEMENT AND OTHER DOCUMENTS WILL BE PROVIDED WITHOUT CHARGE UPON
REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO OUR PROXY SOLICITOR, MORROW &
CO., INC. AT ITS TOLL-FREE NUMBER (800) 607-0088. THE PARTICIPANTS IN THE PROXY
SOLICITATION ARE ANTICIPATED TO BE THE LION FUND L.P., BIGLARI CAPITAL CORP.,
WESTERN SIZZLIN CORP., SARDAR BIGLARI AND PHILIP L. COOLEY (THE "PARTICIPANTS").
INFORMATION REGARDING THE PARTICIPANTS, INCLUDING THEIR DIRECT OR INDIRECT
INTERESTS, BY SECURITY HOLDINGS OR OTHERWISE, IS CONTAINED IN THE SCHEDULE 13D
FILED BY THEM WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 7, 2006 WITH
RESPECT TO FRIENDLY ICE CREAM CORPORATION, AS AMENDED. THAT SCHEDULE 13D, AS
AMENDED, IS CURRENTLY AVAILABLE AT NO CHARGE ON THE SECURITIES AND EXCHANGE
COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV. AS OF JANUARY 8, 2007, EACH OF THE
PARTICIPANTS MAY BE DEEMED TO BENEFICIALLY OWN 1,182,488 SHARES OF COMMON STOCK
OF FRIENDLY ICE CREAM CORPORATION. EACH OF THE PARTICIPANTS DISCLAIMS BENEFICIAL
OWNERSHIP OF SUCH SHARES EXCEPT TO THE EXTENT OF HIS/ITS PECUNIARY INTEREST
THEREIN.
PRESS RELEASE
SARDAR BIGLARI ISSUES STATEMENT; LION FUND GROUP AND FRIENDLY ICE CREAM CORP.
UNABLE TO REACH AGREEMENT ON BOARD SEATS
ROANOKE, Va., Jan. 2 /PRNewswire-FirstCall/ -- Sardar Biglari, Chairman of The
Lion Fund, L.P. and Western Sizzlin Corp. (OTC Bulletin Board: WSZL - News),
issued the following statement:
On September 20, 2006, we asked the Friendly Ice Cream Corp. (Amex: FRN - News)
for two board seats in order for us to serve the best interests of all
shareholders. Three months later, on December 20, 2006, the company offered us
two board seats with a major restriction which would limit our ability to act in
the best interests of the company's stockholders. In light of the company's poor
performance and total disregard for proper corporate governance, we cannot
accept restrictions on our ability to hold the existing board and its management
accountable for the company's performance. Nevertheless, on December 21, 2006,
we informed the company that we would accept its offer, but only if the board
agreed to place a binding management proposal on the 2007 annual meeting agenda
to declassify the board, that is, to make the election of the entire board a
yearly occurrence. This change would represent a significant start towards
improving the corporate governance of the company and making the board
answerable to the stockholders, the true owners of the company.
Research indicates that a classified board diminishes the value of a company
because that system obstructs directors' accountability to shareholders.
Unfortunately, earlier today, the board rejected our recommendation with no
clear explanation of its refusal to declassify the staggered board -- another
marker of its poor business judgment.
The cost of an entrenched board is weighing heavily on Friendly's value. If the
board were concerned about acting in the best interest of shareholders, it would
have already acted on our previous request to grant us two board seats without
restrictions, or the board would have accepted our recommendation to put the
declassification of the board to a binding shareholder proposal. Either action
would have avoided a costly and distracting proxy battle, which as a last resort
we are now forced to wage. We are confident that stockholders will support
constructive change when we seek their votes in 2007 to elect our director
nominees. No rhetoric can overcome the record of this board. We own; we care.
THIS COMMUNICATION IS NOT A SOLICITATION OF A PROXY WHICH MAY BE DONE ONLY
PURSUANT TO A DEFINITIVE PROXY STATEMENT. STOCKHOLDERS ARE ADVISED TO READ THE
PROXY STATEMENT AND OTHER DOCUMENTS RELATED TO THE SOLICITATION OF PROXIES BY
THE LION FUND L.P., BIGLARI CAPITAL CORP., WESTERN SIZZLIN CORP., SARDAR BIGLARI
AND PHILIP L. COOLEY FROM THE SHAREHOLDERS OF FRIENDLY ICE CREAM CORPORATION,
FOR USE AT ITS 2007 ANNUAL MEETING OF STOCKHOLDERS WHEN THEY BECOME AVAILABLE
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. WHEN COMPLETED, A DEFINITIVE
PROXY STATEMENT AND A FORM OF PROXY WILL BE MAILED TO STOCKHOLDERS OF FRIENDLY
ICE CREAM CORPORATION AND WILL BE AVAILABLE AT NO CHARGE AT THE SECURITIES AND
EXCHANGE COMMISSION'S WEBSITE AT HTTP://WWW.SEC.GOV. IN ADDITION, COPIES OF THE
PROXY STATEMENT AND OTHER DOCUMENTS WILL BE PROVIDED WITHOUT CHARGE UPON
REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO OUR PROXY SOLICITOR, MORROW &
CO., INC. AT ITS TOLL-FREE NUMBER (800) 607-0088. THE PARTICIPANTS IN THE PROXY
SOLICITATION ARE ANTICIPATED TO BE THE LION FUND L.P., BIGLARI CAPITAL CORP.,
WESTERN SIZZLIN CORP., SARDAR BIGLARI AND PHILIP L. COOLEY (THE "PARTICIPANTS").
INFORMATION REGARDING CERTAIN OF THE PARTICIPANTS, INCLUDING THEIR DIRECT OR
INDIRECT INTERESTS, BY SECURITY HOLDINGS OR OTHERWISE, IS CONTAINED IN THE
SCHEDULE 13D FILED BY THEM WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST
7, 2006 WITH RESPECT TO FRIENDLY ICE CREAM CORPORATION, AS AMENDED, MOST
RECENTLY ON DECEMBER 18, 2006. THAT SCHEDULE 13D, AS AMENDED, IS CURRENTLY
AVAILABLE AT NO CHARGE ON THE SECURITIES AND EXCHANGE COMMISSION'S WEBSITE AT
HTTP://WWW.SEC.GOV. AS OF JANUARY 2, 2007, EACH OF THE PARTICIPANTS MAY BE
DEEMED TO BENEFICIALLY OWN 1,182,388 SHARES OF COMMON STOCK OF FRIENDLY ICE
CREAM CORPORATION. EACH OF THE PARTICIPANTS DISCLAIMS BENEFICIAL OWNERSHIP OF
SUCH SHARES EXCEPT TO THE EXTENT OF HIS/ITS PECUNIARY INTEREST THEREIN.
Source: Western Sizzlin Corp.
* * * *
CERTAIN INFORMATION CONCERNING THE PARTICIPANTS
The Lion Fund L.P. (the "Lion Fund"), together with the other
participants named herein, intends to make a preliminary filing with the
Securities and Exchange Commission ("SEC") of a proxy statement and an
accompanying proxy card to be used to solicit votes for the election of its
director nominees at the 2007 annual meeting of stockholders of Friendly Ice
Cream Corporation, a Massachusetts corporation (the "Company").
THE LION FUND ADVISES ALL STOCKHOLDERS OF THE COMPANY TO READ THE PROXY
STATEMENT AND OTHER PROXY MATERIALS AS THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION. SUCH PROXY MATERIALS WILL BE AVAILABLE AT NO
CHARGE ON THE SEC'S WEB SITE AT HTTP://WWW.SEC.GOV. IN ADDITION, THE
PARTICIPANTS IN THE PROXY SOLICITATION WILL PROVIDE COPIES OF THE PROXY
STATEMENT WITHOUT CHARGE UPON REQUEST. REQUESTS FOR COPIES SHOULD BE DIRECTED TO
THE PARTICIPANTS' PROXY SOLICITOR, MORROW & CO., AT ITS TOLL-FREE NUMBER: (800)
607-0088.
The participants in the proxy solicitation are anticipated to be The
Lion Fund L.P., a Delaware limited partnership, Biglari Capital Corp., a Texas
corporation, Western Sizzlin Corp., a Delaware corporation, Sardar Biglari and
Philip L. Cooley (the "Participants").
Each of the Participants may be deemed to be the beneficial owner of
1,182,488 shares of Common Stock of the Company. The Participants specifically
disclaim beneficial ownership of such shares of Common Stock except to the
extent of their pecuniary interest therein.