Page 4 of 4 – SEC Filing
Item 1. Security and Issuer
The class of equity security to which this statement on Schedule 13D
relates is the Common Stock (the “Securities”) of Sonic Corp., a Delaware
corporation (“Sonic” or the “Issuer”). The Issuer has its principal executive
offices located at 300 Johnny Bench Drive, Oklahoma City, Oklahoma 73104.
Item 2. Identity and Background
Subparagraphs (a), (b), and (c). This statement is being filed by
Southeastern Asset Management, Inc. (“Southeastern”), an investment advisor
registered with the Securities & Exchange Commission under the Investment
Advisers Act of 1940, as amended. The address of its principal office is 6410
Poplar Avenue, Suite 900, Memphis, Tennessee 38119. Southeastern serves as an
investment advisor to various individual clients, institutions(including
qualified retirement plans), endowment funds and to Longleaf Partners Small-Cap
Fund, a series of Longleaf Partners Funds Trust, a registered investment
company organized as a Massachusetts business trust and having four series or
portfolios. Longleaf Partners Small-Cap Fund, which is a joint filer of this
Schedule 13D, may be reached c/o Southeastern Asset Management, Inc., 6410
Poplar Avenue, Suite 900, Memphis, Tennessee 38119.
The Securities of the Issuer reported in Item 5 herein were acquired
on behalf of the investment advisory clients of Southeastern Asset Management,
Inc., including Longleaf Partners Small-Cap Fund, under sole or shared
discretionary authority granted Southeastern. None of the Securities are owned
by or on behalf of Southeastern or by any of its directors or officers, or any
Trustees or officers of Longleaf.
This statement is also being filed by Mr. O. Mason Hawkins, Chairman of
the Board and Chief Executive Officer of Southeastern, in the event he could be
deemed to be an indirect beneficial owner of the Securities reported by
Southeastern through the exercise of voting control and/or dispositive power
over the Securities as the result of his official positions or ownership of
voting securities of Southeastern. Neither Southeastern nor Mr. Hawkins owns
any Securities for its or his own account and each disclaims beneficial
interest in any of the Securities reported herein.
(d) During the last five years, neither Southeastern nor Longleaf
Partners Small-Cap Fund, nor Mr. Hawkins has been convicted in any criminal
proceeding.
(e) During the last five years, Southeastern, Longleaf Partners Small-
Cap Fund, and Mr. Hawkins have not been a party to any civil or administrative
proceeding involving any alleged violations of any securities laws.
(f) Southeastern is a corporation organized and existing under the
laws of the State of Tennessee; Longleaf Partners Funds Trust, of which
Longleaf Partners Small-Cap Fund is a separate series, is organized as a
Massachusetts business trust. Mr. Hawkins is a citizen of the United States.
The names, business addresses, and principal occupations of each director and
executive officer of Southeastern, and each Trustee of Longleaf Partners
Small-Cap Fund are set forth in Schedule I.
Item 3. Source and Amount of Funds or Other Consideration
The respective investment advisory clients of Southeastern used
approximately $158,957,574 in the aggregate to purchase the Securities reported
in this filing. All assets used to purchase Securities were assets of these
respective clients and none were assets of Southeastern. In addition, none of
the proceeds used to purchase the Securities were provided through borrowings
of any nature.
Item 4. Purpose of Transaction
The Securities reported in this filing have been purchased and held
for investment purposes on behalf of client accounts over which Southeastern
has either sole or shared discretionary investment or voting power.
Southeastern may purchase additional Securities on behalf of clients in the
future, or may sell all or a part of the current holdings of the Securities.
Southeastern is engaged in the business of investment management of
its clients’ assets and pursues an investment philosophy of identifying
undervalued situations and acquiring positions in undervalued companies on
behalf of its clients. In pursuing this investment philosophy, Southeastern
analyzes the operations, capital structure and markets of companies in which
its clients invest and continuously monitors the business operations of such
companies through analysis of financial statements and other public documents,
through discussions with knowledgeable industry observers, and with management
of such companies, often at management’s invitation.
Southeastern qualifies as an institution which may elect to file
securities ownership reports required by the Securities Exchange Act of 1934 on
Schedule 13G and, as a routine matter, Southeastern utilizes Schedule 13G for
its reporting of the ownership positions held by its investment advisory
clients. As a result of investment analysis or the occurrence of events,
Southeastern may desire to participate in discussions with the particular
portfolio company’s management or with third parties about significant matters
in which Southeastern may suggest possible courses of action to assist in
building corporate intrinsic value per share or to cause the Company’s true
economic value to be recognized. In such situations, Southeastern may elect to
convert a filing on Schedule 13G to a filing on Schedule 13D in order to be
more active in corporate governance and management matters, and to have the
ability to enter into discussions with third parties concerning proposed
corporate transactions of a significant nature.
In this situation, Southeastern is switching from a filing on Schedule
13G to Schedule 13D in order to have more direct conversations with Sonic about
the pace of share repurchase and other strategic matters. While Southeastern
is supportive of the course that CEO Cliff Hudson and Sonic’s full executive
team are pursuing, we feel that this filing change will give us the flexibility
to discuss opportunities to maximize the company’s long term value per share.
We may from time to time and at any time in the future, depending on
various factors, take such actions with respect to our investment in the
Securities as we deem appropriate at the time including, but are not limited
to: (i) acquiring additional Securities and/or other equity, debt, notes, other
securities, including but not limited to derivative or other instruments that
are based upon or relate to the value of the Securities in the open market,
through private transactions or otherwise; (ii) disposing of any or all of the
Securities in the open market, through private transactions or otherwise; (iii)
entering into agreements or understandings with other shareholders or
stakeholders of Sonic with respect to the voting, holding and/or disposition of
Securities; or (iv) proposing or considering any one or more of the actions
described in subsections (a) through (j) of Item 4 of Schedule 13D. To obtain
the flexibility to discuss various alternatives, including any of the actions
or transactions enumerated in clauses a through j of Item 4 of Schedule 13D,
with the Issuer’s management or with third parties, Southeastern is converting
its ownership filing on Schedule 13G to a filing on Schedule 13D.
Item 5. Interest In Securities Of The Issuer
(a) The aggregate number and percentage of Securities to which this
Schedule 13D relates is 6,436,879 shares of the common stock of the Issuer,
constituting approximately 16.0% of the 40,250,461 shares outstanding.
Common % of outstanding
Shares Common Shares
Held
___________________________________________________________________
Voting Authority
Sole: 0 0.0%
Shared: 6,370,000* 15.8%
None: 66,879 0.2%
Total 6,436,879 16.0%
*Consists of shares owned by Longleaf Partners Small-Cap Fund, a series of
Longleaf Partners Funds Trust, an open-end management investment company
registered under the Investment Company Act of 1940.
Dispositive Authority
Sole: 66,879 0.2%
Shared: 6,370,000* 15.8%
Total 6,436,879 16.0%
*Consists of shares owned by Longleaf Partners Small-Cap Fund, a series of
Longleaf Partners Funds Trust, an open-end management investment company
registered under the Investment Company Act of 1940.
(b) Southeastern generally has the sole power to dispose of or to
direct the disposition of the Securities held for discretionary accounts of its
investment clients, and may be granted the sole power to vote or direct the
vote of such Securities; such powers may be retained by or shared with the
respective clients for shared or non-discretionary accounts. Shares held by
any Series of Longleaf Partners Funds Trust are reported in the “shared”
category.
(c) There have been no purchase or sale transactions in the
Securities during the past sixty days.
(d) The investment advisory clients of Southeastern have the sole
right to receive and, subject to notice, to withdraw the proceeds from the sale
of the Securities, and the sole power to direct the receipt of dividends from
any of the Securities held for their respective accounts. Such clients may
also terminate the investment advisory agreements without penalty upon
appropriate notice. Southeastern does not have an economic interest in any of
the Securities reported herein.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of the Issuer
The powers of disposition with respect to Securities owned by
discretionary private accounts of Southeastern are established in written
investment advisory agreements between clients and Southeastern, which are
entered into in the normal and usual course of the business of Southeastern
as a registered investment advisor and which are generally applicable to
all securities purchased for the benefit of each such discretionary private
account. There are no special or different agreements relating to the
Securities of the Issuer.
The written investment advisory agreements with clients generally
do not contain provisions relating to borrowing of funds to finance the
acquisition of the Securities, acquisition of control, transfer of
securities, joint ventures, or any of the other transactions listed in
the instructions to Item 6 of Schedule 13D other than voting of proxies.
In connection with voting, Southeastern may be allowed or directed to vote
the proxies received by accounts classified as “discretionary” or “shared”
accounts; such authority is generally retained by the clients for accounts
classified as “non-discretionary”.
Item 7. Material to be filed as an Exhibit
Schedule I. Information with Respect to Directors and Officers of Southeastern
Asset Management, Inc. and Longleaf Partners Small-Cap Fund.
Schedule II. Not applicable.
Signatures
After reasonable 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.
Dated: December 18, 2017
SOUTHEASTERN ASSET MANAGEMENT, INC.
By /s/ Andrew R. McCarroll
_______________________________
Andrew R. McCarroll
General Counsel
LONGLEAF PARTNERS SMALL-CAP FUND
By: Southeastern Asset Management, Inc.
By /s/ Andrew R. McCarroll
_______________________________
Andrew R. McCarroll
General Counsel
O. MASON HAWKINS
(Individually)
/s/ O. Mason Hawkins
_______________________________
Joint Filing Agreement
In accordance with Rule 13d-1(k) under the Securities Exchange Act
of 1934, the persons or entities named below agree to the joint
filing on behalf of each of them of this Schedule 13G with respect
to the Securities of the Issuer and further agree that this joint
filing agreement be included as an exhibit to this Schedule 13G. In
evidence thereof, the undersigned hereby execute this Agreement as
of December 18, 2017.
Southeastern Asset Management, Inc.
By /s/ Andrew R. McCarroll
__________________________________
Andrew R. McCarroll
Vice President and General Counsel
Longleaf Partners Small-Cap Fund
By: Southeastern Asset Management, Inc.
By /s/ Andrew R. McCarroll
_______________________________
Andrew R. McCarroll
Vice President & General Counsel
O. Mason Hawkins, Individually
/s/ O. Mason Hawkins
_______________________________
SCHEDULE I
Information with Respect to Executive
Officers and Directors
The following information is disclosed for each of the directors and
executive officers of Southeastern: name; business address; and present
principal occupation or employment and the name, principal business and address
of any corporation or other organization in which such employment is
conducted. Unless otherwise specified, the principal employer of each such
individual is Southeastern Asset Management, Inc. (or its affiliates), having
its principal executive offices located at 6410 Poplar Ave., Suite 900,
Memphis, Tennessee 38119. Each individual identified below is a citizen of the
United States.
To the knowledge of management of Southeastern, during the last five years,
no such person has been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors), and no such person was a party to a civil
proceeding of a judicial or administrative body of competent jurisdiction as a
result of which he/she was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities law or finding any violation with respect to
such laws.
SOUTHEASTERN ASSET MANAGEMENT, INC.
Directors
O. Mason Hawkins, CFA: Chairman of the Board and Chief Executive Officer of
Southeastern Asset Management, Inc.; Trustee and Co-Portfolio Manager of
Longleaf Partners Funds.
G. Staley Cates, CFA: Director and Vice Chairman of Southeastern Asset
Management, Inc.; Co-Portfolio Manager Longleaf Partners Funds.
Ross Glotzbach, CFA: Director and President of Southeastern Asset Management,
Inc.; Co-Portfolio Manager of Longleaf Partners Small-Cap Fund.
Josh Shores, CFA: Director and Principal of Southeastern Asset Management,
Inc.; Co-Portfolio Manager of Longleaf Partners International Fund.
Steve Fracchia: Director and Chief Operating Officer of Southeastern Asset
Management, Inc.
Other Officers
Brandon Arrindell, CFA Principal
Jim Barton, Jr., CFA Head of Portfolio Risk Management, Principal
Ryan S. Hocker, CPA Global Funds Treasurer
J. Isaac Byrd Head of Portfolio Compliance
Scott Cobb Principal
Deborah Craddock, CFA Principal
Michael Johnson Trader
Lee B. Harper Principal
Lowery H. Howell, CFA Principal
Steve McBride Assistant General Counsel
Andrew R. McCarroll General Counsel, Principal
Gwin Myerberg Global Head of Client Relations and Communications
W. Douglas Schrank Principal
Ken Siazon Principal
Gary M. Wilson, CFA Principal
Michael J. Wittke Chief Compliance Officer
LONGLEAF PARTNERS SMALL-CAP FUND
The following information is disclosed for each of the directors and
executive officers of Longleaf Partners Small-Cap Fund: name; address; and
present principal occupation or employment and the name, principal business and
address of any corporation or other organization in which such employment is
conducted. Each individual identified below is a citizen of the United States.
The address of each individual for purposes of correspondence is c/o
Southeastern Asset Management, Inc., 6410 Poplar Avenue, Suite 900, Memphis,
Tennessee 38119.
To the knowledge of management of Longleaf Partners Small-Cap Fund during the
last five years, no such person has been convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors), and no such person was
a party to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which he was or is subject to a judgment, decree
or final order enjoining future violations of, or prohibiting or mandating
activities subject to, federal or state securities law or finding any violation
with respect to such laws
Trustees
O. Mason Hawkins, CFA: Chairman of the Board and Chief Executive Officer of
Southeastern Asset Management, Inc.; Trustee and Co-Portfolio Manager of
Longleaf Partners Funds.
Chadwick H. Carpenter, Jr.: Trustee of Longleaf Partners Funds; private
Investor.
Margaret H. Child: Trustee of Longleaf Partners Funds; marketing consultant.
Daniel W. Connell, Jr.: Trustee of Longleaf Partners Funds; private investor.
Rex M. Deloach: Trustee of Longleaf Partners Funds; President, Financial
Insights, Inc.
Steven N. Melnyk: Trustee of Longleaf Partners Funds; private investor and
consultant.
C. Barham Ray: Trustee of Longleaf Partners Funds; private investor and
consultant.
Perry Steger: Chairman of the Board, Longleaf Partners Funds; President,
Steger & Bizzell Engineering, Inc.
