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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
May 10, 2000
Commission file number 1-13163
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TRICON GLOBAL RESTAURANTS, INC.
(Exact name of registrant as specified in its charter)
North Carolina 13-3951308
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(State or other jurisdiction of (IRS Employer
of incorporation or organization) Identification No.)
1441 Gardiner Lane, Louisville, Kentucky 40213
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (502) 874-8300
Former name or former address, if changed since last report: N/A
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Item 5. OTHER EVENTS
On May 10, 2000, TRICON Global Restaurants, Inc. issued a press
release announcing that it has reached an agreement with Burger
King Corporation regarding the AmeriServe debtor-in-possession
Credit Facility and that AmeriServe has made a claim in
Bankruptcy Court seeking payment of fees for distribution
services rendered to TRICON-owned restaurants prior to the
AmeriServe bankruptcy filing. A copy of such press release is
attached hereto as Exhibit 99 and incorporated herein by
reference.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99 Press release dated May 10, 2000 from TRICON Global
Restaurants, Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TRICON GLOBAL RESTAURANTS, INC.
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(Registrant)
Date: May 15, 2000 /s/ Matthew M. Preston
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Matthew M. Preston
Assistant Secretary
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Exhibit 99
TRICON AND BURGER KING AGREE TO RESTRUCTURE
DEBTOR-IN-POSSESSION CREDIT FACILITY
LOUISVILLE, KY, May 10, 2000 -- Tricon Global Restaurants, Inc. (NYSE:YUM)
announced today that it has reached an agreement with Burger King Corp.
regarding the $150 million Debtor-in-Possession credit facility ("DIP Facility")
the two companies made available to AmeriServe following its Chapter 11
Bankruptcy filing on January 31, 2000.
Under the new agreement, Burger King will buy out its $50 million share
of the DIP Facility. This buy-out will consist of a cash payment to Tricon, and
an assignment to Tricon of Burger King's funded portion of its $50 million
obligation. Tricon has agreed to assume the full $150 million commitment under
the DIP Facility - of which approximately $80 million was funded as of the end
of April 2000. Tricon has reached an agreement to assign $30 million of its
commitment under the DIP Facility to a third party, as previously disclosed.
"We are pleased to have resolved our inter-creditor issues with Burger
King in a manner satisfactory to both parties," said Aylwin Lewis, Executive
Vice President of Tricon. "Burger King's transition from AmeriServe, their $50
million commitment, along with our assumption of the $150 million
debtor-in-possession financing commitment, should permit AmeriServe to focus on
a long-term solution that is in our mutual best interests," Lewis added.
Tricon expects the solution to involve either the restructuring of
AmeriServe into a financially viable, stand-alone entity or the sale of the
AmeriServe business to another distributor or strategic buyer acceptable to the
Tricon System. Tricon continues to work closely with AmeriServe, its suppliers
and the purchasing cooperative for the Tricon system to ensure that restaurants
continue to receive supplies in a timely and cost effective manner. To date,
Tricon has not experienced any significant service interruptions. Tricon will
continue to purchase inventory for its U.S. System restaurants directly from
suppliers during the bankruptcy reorganization process.
The Company also said, as expected, AmeriServe has made a claim in
Bankruptcy Court seeking payment for fees (including the cost of inventory) for
distribution services rendered to Tricon-owned restaurants prior to the
AmeriServe bankruptcy filing. Tricon has accrued for, but withheld payment of
these fees - which total approximately $100 million - and has asserted a
recoupment defense due to certain costs and damages incurred by Tricon as a
result of AmeriServe's failure to comply with certain terms of its distribution
contract with Tricon. The Company believes that its position on the recoupment
has significant legal merit and intends to vigorously assert this defense.
Should we not prevail in the lawsuit, the $100 million is not an additional
exposure to Tricon. "AmeriServe's claim to recover these fees has no substantive
impact on our relationship with AmeriServe. We remain fully committed to
AmeriServe as it is reorganized through the bankruptcy process," said Lewis.
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Tricon Global Restaurants, Inc. (NYSE:YUM), based in Louisville, KY is
the world's largest restaurant owner with almost 30,000 company-owned,
franchised and licensed restaurants in over 100 countries and territories. The
company's brands - KFC, Pizza Hut and Taco Bell, are the global leaders of the
chicken, pizza and Mexican-style restaurant categories, respectively. Total
worldwide system retail sales for the brands were nearly $22 billion in 1999.
This announcement contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These "forward-looking"
statements reflect management's expectations and are based upon currently
available data; however, actual results are subject to future events and
uncertainties, which could cause actual results to differ from those projected
in these statements. Factors that can cause actual results to differ materially
include economic and political conditions in the countries and territories where
Tricon operates, the impact of such conditions on consumer spending and currency
exchange rates, pricing pressures resulting from competitive discounting, new
product and concept development by Tricon and other food industry competitors,
the success of our refranchising strategy, fluctuations in commodity prices,
supplier contracts, ongoing business viability of our key distributor, the
ability to secure alternative distribution to our restaurants at competitive
rates, and actuarially determined casualty loss estimates. Further information
on factors that could effect Tricon's financial and other results are included
in the company's Forms 10-Q and 10-K, filed with the Securities and Exchange
Commission.
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