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OMB APPROVAL
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OMB NUMBER: 3235-0102
EXPIRES: MAY 31, 2005
ESTIMATED AVERAGE BURDEN
HOURS PER RESPONSE...64.5
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14D-9
Solicitation/Recommendation Statement under Section 14(d)(4)
of the Securities Exchange Act of 1934
(AMENDMENT NO.1)
ELMER'S RESTAURANTS, INC.
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(Name of Subject Company)
ELMER'S RESTAURANTS, INC.
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(Names of Person Filing Statement)
COMMON STOCK
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(Title of Class of Securities)
2893932
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(CUSIP Number of Class of Securities)
Bruce N. Davis, CEO
Elmer's Restaurants, Inc.
11802 SE Stark Street
P.O. Box 16938
Portland, OR 97292-0938
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(Name, address, and telephone numbers of person authorized to receive
notices and communications on behalf of the persons filing statement)
[ ] Check the box if the filing relates solely to preliminary
communications made before the commencement of a tender offer.
This Amendment No. 1 amends and supplements the Schedule 14D-9 initially filed
by Elmer's Restaurants, Inc. ("Elmer's") with the Securities and Exchange
Commission on December 21, 2004 relating to the tender offer made by ERI
Acquistion Corp. ("EAC") to acquire all of the issued and outstanding common
shares of Elmer's not owned or controlled by EAC for a cash price of $7.50 per
share. Elmer's is hereby amending only those sections of the initial Schedule
14D-9 identified in this amendment and only to the extent noted in each section.
All other sections of the initial Schedule 14D-9 remain unchanged. Capitalized
terms used herein and not defined herein have the respective meanings assigned
to such terms in the Schedule 14D-9.
3. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
Section 3 is supplemented by adding the following paragraph:
Jasper's Food Management, Inc. ("Jasper's") currently provides certain
administrative and accounting services to Elmer's. Jasper's is owned by Bruce N.
Davis, William W. Service, Corydon H. Jensen and certain other principals in
EAC. Regardless of the outcome of the proposed tender offer by EAC, the business
relationship between Elmer's and Jasper's will continue on the same terms as it
existed before the tender offer was initiated.
6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
Section 6 is amended in its entirety to read as follows:
Except for the following transactions, there have been no transactions
by Elmer's, its executive officers or directors involving Elmer's securities in
the past 60 days:
o Elmer's issued an immaterial number of shares to a departing employee
pursuant to the company's stock option plan.
o Elmer's shares held by Franklin Holdings LLC were distributed to its
members (two of which are directors of Elmer's) as set forth in the
acquiring group's Schedule 13D filed November 19, 2004.
o As disclosed in the Schedule TO/13E-3, each of the following directors
and executive officers entered into an agreement with EAC on November
18, 2004 to contribute their respective shares owned or that may be
acquired in Elmer's to EAC in exchange for shares in EAC.
Name of Executive Officer/Director Number of shares Involved*
Thomas C. Connor 55,688
Bruce N. Davis 145,603
Corydon H. Jensen, Jr. 101,323
Gerald A. Scott 40,804
William W. Service 148,992
Richard C. Williams 34,092
Donald W. Woolley 55,687
Dennis M. Waldron 2,000
* Includes stock options to purchase Elmer's common stock within 60
days after November 19, 2004. The number of shares each named person
has the right to acquire is
as follows: Mr. Connor 16,476, Mr. Davis 78,829, Mr. Jensen 16,476, Mr.
Scott 25,121, Mr. Service 79,229, Mr. Williams 16,476, Mr. Woolley
16,476 and Mr. Waldron 2,000.
7. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.
Section 7 is amended in its entirety to read as follows:
Elmer's is not engaged in or undertaking any negotiations in response
to the proposed tender offer for the acquisition of its securities and has no
plans, proposals, or is involved in any negotiations for such plans or
proposals, that relate to or may result in any merger, reorganization or
liquidation of Elmer's at this time. Although not negotiating with EAC, or
entering into any agreement or understanding with EAC regarding any merger
between EAC and Elmer's, Elmer's is aware that the intent of the tender offer by
EAC is for the purpose of taking Elmer's private and Elmer's acknowledges that
to complete such transaction EAC, as the controlling shareholder of Elmer's, may
elect to merge Elmer's with and into EAC after the tender offer closes. If EAC
controls at least 90% of the outstanding voting stock of Elmer's after the close
of the tender offer, no approval by Elmer's or its remaining shareholders will
be required to complete such a merger and any remaining shareholders of Elmer's
after the close of the tender offer will no longer be shareholders in either EAC
or Elmer's in the event of a merger.
In response to the proposed tender offer by EAC, the board of directors
adopted corporate resolutions recognizing the formation of EAC as a controlling
shareholder for the purpose of taking Elmer's outside the scope of the Oregon
Business Combination Act (the "Act"). The purpose of the Act is to hinder
hostile takeovers by precluding any person owning more than 15% of the
outstanding voting securities of a company (defined in the Act as an "interested
shareholder") from completing a business combination with such company for a
period of three (3) years after becoming an interested shareholder, unless the
articles of incorporation of the company expressly state that the company is not
subject to the Act (which Elmer's articles of incorporation do not), or the
board of directors approve of the proposed business combination or approve the
transaction resulting in the creation of the "interested shareholder." EAC is
considered an "interested shareholder" under the Act. Without board action, EAC
would be precluded from completing the transaction as presented to shareholders
in its Schedule TO.
Because of the board of directors' inherent conflict of interest, the
board believes that it is in the best interest of Elmer's and the uninterested
shareholders for the uninterested shareholders to have the opportunity, without
influence from the board, to decide whether to tender their respective shares in
the tender offer. The board also believes it is important for the uninterested
shareholders to know that tendering their shares will likely result in EAC
taking Elmer's private. If a majority of the uninterested shareholders tender
their shares in the tender offer with the knowledge that the intent of the
offeror is, and the likely result of such tender of shares will be, to take
Elmer's private, then the practical effect of such tender of shares will result
in the majority of the uninterested shareholders endorsing EAC's proposal to
take Elmer's private.
The board of directors does not believe it is appropriate under the
circumstances to take a position regarding EAC's proposal and has endeavored not
to unduly influence the decision of the uninterested shareholders. By adopting
corporate resolutions recognizing the formation of EAC, the board merely
provided EAC the opportunity to effect a merger between EAC and Elmer's at the
close of the tender offer in the event the majority of the uninterested
shareholders sanction the proposed going private transaction, as evidenced by
tendering their shares in response to the tender offer.
Elmer's is not involved in, or a party to, any plans, proposals or
negotiations that relate to or may result in the purchase, sale or transfer of a
material amount of assets of Elmer's, nor is Elmer's a party to, or involved in,
any plans, proposals or negotiations that will result in a material change in
the indebtedness or capitalization of Elmer's. Elmer's currently does not pay a
dividend and it has no plans or proposals, nor is it a party to, or involved in,
any negotiations, to change its current dividend policy.
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
/s/ BRUCE N. DAVIS
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(Signature)
Bruce N. Davis, CEO and Chairman of the Board of Directors of
Elmer's Restaurants, Inc.
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(Name and Title)
January 28, 2005
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(Date)