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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) December 29, 1995
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WENDY'S INTERNATIONAL, INC.
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(Exact name of registrant as specified in its charter)
Ohio 1-8116 31-0785108
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(State or other jurisdiction of (Commission File Number) (IRS Employer
incorporation) Identification No.)
4288 West Dublin-Granville Road, Dublin, Ohio 43017
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (614) 764-3100
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Not Applicable
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(Former name or former address, if changed since last report.)
Page 1 of 10
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Item 1. Changes in Control of Registrant.
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Not applicable.
Item 2. Acquisition or Disposition of Assets.
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On December 29, 1995, Wendy's International, Inc., an Ohio
corporation ("Wendy's"), completed its acquisition of 1052106 Ontario Limited,
formerly 632687 Alberta Ltd. (the "Company"), pursuant to the terms of a Share
Purchase Agreement, dated as of October 31, 1995, as amended on December 28,
1995 (the "Purchase Agreement"), by and among Wendy's, 1149658 Ontario Inc., a
Canadian subsidiary of Wendy's ("Newco"), the Company and Ronald V. Joyce
("Seller"). The following discussion is only a summary and is qualified in its
entirety by reference to the Exhibits to this Current Report on Form 8-K.
Pursuant to the Purchase Agreement, Newco acquired all of the issued
and outstanding shares of the Company from Seller in exchange for 16,450,000
Non-Voting Exchangeable Shares of Newco (the "Newco Exchangeable Shares"). In
addition, Seller received a cash payment of Cdn. $100. Each Newco
Exchangeable Share is exchangeable for one share of Wendy's common stock,
without par value ("Wendy's Common Stock"), subject to adjustment upon the
occurrence of certain events. Seller is entitled to the voting and dividend
rights attributable to one share of Wendy's Common Stock for each Newco
Exchangeable Share held by him (subject to adjustment). The amount of
consideration was determined as a result of negotiation between Wendy's and the
Company. The transaction will be accounted for as a pooling of interests.
In connection with the transaction, Wendy's assumed approximately
$105 million of indebtedness. Funds for the payment of such indebtedness are
being provided in part by application of a portion of the proceeds of the
issuance, on December 19, 1995, of $200 million aggregate principal amount of
Wendy's 6.35% Notes due December 15, 2005 and 7.00% Debentures due December 15,
2025 and in part from cash flow from combined operations, cash and investments
on hand and/or other sources of funds generally available to the Company.
In the Purchase Agreement, Wendy's has agreed to use its best efforts
to (i) appoint Seller to Wendy's Board of Directors as soon as a seat becomes
available and (ii) to make this opportunity available to Seller as soon as
possible.
In connection with the transaction, Wendy's entered into an
Amendment, dated as of December 29, 1995 (the "Rights Agreement Amendment"), to
the Rights Agreement, dated as of August 10, 1988 (the "Rights Agreement"),
between Wendy's and American Stock Transfer and Trust Company, as successor to
Morgan Shareholder Services Trust Company. The Rights Agreement Amendment
reduces the beneficial
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ownership percentage threshold in the definition of "Acquiring Person" (and in
the corresponding redemption provision) of the Rights Agreement from 20% or
more of Wendy's Common Stock then outstanding to 15% or more of Wendy's Common
Stock then outstanding.
The Company is the parent company of the Tim Hortons restaurant
chain. Tim Hortons is the second largest restaurant chain in Canada, and the
largest chain that offers coffee and fresh baked goods such as donuts, muffins,
croissants, cookies and fancy desserts. Other products offered include
sandwiches and soup. Systemwide sales were Cdn. $603.2 million in 1994. As of
October 31, 1995, there were more than 1,100 Tim Hortons restaurants in Canada,
all but approximately 38 of which were franchisee operated. There are several
versions of Tim Hortons restaurants, including stand-alone units with and
without drive-throughs, double drive-throughs, satellite units, kiosks and
carts. Tim Hortons controls a majority of the locations and leases them to
franchisees. Tim Hortons also operates six warehouses that sell and distribute
dry goods to all Tim Hortons restaurants. Royalties, rent and warehouse
operations comprise the three principal sources of income.
Management of Wendy's believes that Tim Hortons is an excellent
complement to Wendy's because consumers perceive Tim Hortons as delivering
outstanding quality. This perception is similar to consumers' perception of
Wendy's quality. In addition, the majority of Tim Hortons' sales occur at
breakfast and afternoon snack time. In contrast, the majority of Wendy's sales
normally occur at lunch and dinner.
As of December 4, 1995, Wendy's and Tim Hortons had co-developed 32
combination restaurants in Canada and one in the United States. These
restaurants contain separate kitchens for the Wendy's and the Tim Hortons
operations, with a shared dining room. In the opinion of management, sales
results of the combination restaurants have been excellent.
Tim Hortons will operate as a subsidiary of Wendy's and will execute
its existing strategies. There are numerous additional opportunities which
will be tested and explored in depth before any decision is made with respect
to the future strategic direction of Tim Hortons, such as expansion into the
U.S. or into other countries.
Copies of the Purchase Agreement; a Share Exchange Agreement, dated
as of December 29, 1995, by and among Wendy's, Newco and Seller; the provisions
attaching to the Exchangeable Shares; a Support Agreement, dated as of December
29, 1995, by and among Wendy's, Newco and Seller; an Irrevocable Trust
Agreement for the Benefit of Seller, dated as of December 29, 1995, between
Dana Klein and The Huntington Trust Company, N.A.; a Subscription Agreement,
dated as of December 29,
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1995, by and between the Irrevocable Trust for the Benefit of Ronald V. Joyce
(the "Trust") and Wendy's; a Guaranty Agreement, dated as of December 29, 1995,
by and between the Trust and Seller; an Escrow Agreement, dated as of December
29, 1995, by and among Wendy's, Newco, Seller and The Trust Company of Bank of
Montreal; and a Registration Rights Agreement, dated as of December 29, 1995,
between Wendy's and Seller; are filed as Exhibits 2.1, 2.2, 2.3, 2.4, 2.5, 2.6,
2.7, 2.8, 2.9, and 2.10, respectively, to this Current Report on Form 8-K and
are incorporated herein by reference.
Item 3. Bankruptcy or Receivership.
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Not applicable.
Item 4. Changes in Registrant's Certifying Accounts.
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Not applicable.
Item 5. Other Events.
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Item 6. Resignations of Registrant's Directors.
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Not applicable.
Item 7. Financial Statements and Exhibits.
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(a) Financial Statements of Business Acquired.
The following financial statements of 632687 Alberta
Ltd. are incorporated herein by reference to Item
7(a) of Wendy's Current Report on Form 8-K, dated
December 4, 1995:
1. The Auditor's Report, dated October 10, 1995,
and the accompanying Audited Consolidated Financial
Statements for the fiscal year ended December 31,
1994.
2. The Unaudited Consolidated Financial Statements
for the 9 months ended September 30, 1995.
(b) Pro Forma Financial Information.
The pro forma financial information for the
year-to-date period ended October 1, 1995 set forth
in Item 7(b) of Wendy's Current Report on Form 8-K,
dated December 4, 1995 is incorporated herein by
reference.
(c) Exhibits.
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Exhibit
Number Description
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2.1 Share Purchase Agreement, dated as of
October 31, 1995, by and among Wendy's
International, Inc., 1149658 Ontario Inc.,
632687 Alberta Ltd. and Ronald V. Joyce
(incorporated by reference to Exhibit 2 to
Wendy's International, Inc.'s November 9,
1995 Form 10-Q).
2.2 Amendment to the Share Purchase Agreement,
dated as of December 28, 1995, by and
among Wendy's International, Inc., 1149658
Ontario Inc., 1052106 Ontario Limited and
Ronald V. Joyce (incorporated by
reference to Exhibit 2.2 to Ronald V.
Joyce's Schedule 13D, dated January 5,
1996).
2.3 Share Exchange Agreement, dated as of
December 29, 1995, by and among Wendy's
International, Inc., an Ohio corporation,
1149658 Ontario Inc., an Ontario
Corporation and a subsidiary of Wendy's,
and Ronald V. Joyce (incorporated by
reference to Exhibit 2.3 to Ronald V.
Joyce's Schedule 13D, dated January 5,
1996).
2.4 Provisions attaching to Exchangeable
Shares (incorporated by reference to
Exhibit 2.4 to Ronald V. Joyce's Schedule
13D, dated January 5, 1996).
2.5 Support Agreement, dated as of December
29, 1995, by and among Wendy's
International, Inc., 1149658 Ontario Inc.,
and Ronald V. Joyce (incorporated by
reference to Exhibit 2.5 to Ronald V.
Joyce's Schedule 13D, dated January 5,
1996).
2.6 Irrevocable Trust Agreement for the
Benefit of Ronald V. Joyce, dated as of
December 29, 1995, between Dana Klein and
The Huntington Trust Company, N.A.
(incorporated by reference to Exhibit 2.6
to Ronald V. Joyce's Schedule 13D, dated
January 5, 1996).
2.7 Subscription Agreement, dated as of
December 29, 1995, by and between the
Irrevocable Trust for the Benefit of
Ronald V. Joyce, an Ohio Trust, and
Wendy's International, Inc. (incorporated
by reference to Exhibit 2.7 to Ronald V.
Joyce's Schedule 13D, dated January 5,
1996).
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2.8 Guaranty Agreement, dated as of December
29, 1995, by and between The Irrevocable
Trust for the Benefit of Ronald V. Joyce,
an Ohio Trust, and Ronald V. Joyce
(incorporated by reference to Exhibit 2.8
to Ronald V. Joyce's Schedule 13D, dated
January 5, 1996).
2.9 Escrow Agreement, dated as of December 29,
1995, by and among Wendy's International,
Inc., an Ohio corporation, 1149658 Ontario
Inc., Ronald V. Joyce, and The Trust
Company of Bank of Montreal, as escrow
agent (incorporated by reference to
Exhibit 2.9 to Ronald V. Joyce's Schedule
13D, dated January 5, 1996).
2.10 Registration Rights Agreement, dated as of
December 29, 1995, between Wendy's
International, Inc. and Ronald V. Joyce
(incorporated by reference to Exhibit 2.10
to Ronald V. Joyce's Schedule 13D, dated
January 5, 1996).
23 Consent of Price Waterhouse.
99.1 Auditors' Report, dated October 10, 1995
and accompanying Audited Consolidated
Financial Statements of 632687 Alberta
Limited (incorporated by reference to Item
7(a) of Wendy's International, Inc.'s
Current Report on Form 8-K, dated December
4, 1995)
99.2 Unaudited Consolidated Financial
Statements for the 9 months ended
September 30, 1995 (incorporated by
reference to Item 7(a) of Wendy's
International Inc.'s Current Report on
Form 8-K, dated December 4, 1995).
99.3 Pro forma financial information for the
year-to-date period ended October 1, 1995
(incorporated by reference to Item 7(b) of
Wendy's International Inc.'s Current
Report on Form 8-K, dated December 4,
1995).
Item 8. Change in Fiscal Year.
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Not applicable.
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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.
WENDY'S INTERNATIONAL, INC.
By: /s/ John K. Casey
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John K. Casey
Vice Chairman and Chief Financial Officer
Date: January 16, 1996
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
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<S> <C>
2.1 Share Purchase Agreement, dated as of October 31, 1995, by and among Wendy's
International, Inc., 1149658 Ontario Inc., 632687 Alberta Ltd. and Ronald V. Joyce
(incorporated by reference to Exhibit 2 to Wendy's International, Inc.'s November 9,
1995 Form 10-Q).
2.2 Amendment to the Share Purchase Agreement, dated as of December 28, 1995, by and among
Wendy's International, Inc., 1149658 Ontario Inc., 1052106 Ontario Limited and Ronald V.
Joyce (incorporated by reference to Exhibit 2.2 to Ronald V. Joyce's Schedule 13D, dated
January 5, 1996).
2.3 Share Exchange Agreement, dated as of December 29, 1995, by and among Wendy's
International, Inc., an Ohio corporation, 1149658 Ontario Inc., an Ontario Corporation
and a subsidiary of Wendy's, and Ronald V. Joyce (incorporated by reference to Exhibit
2.3 to Ronald V. Joyce's Schedule 13D, dated January 5, 1996).
2.4 Provisions attaching to Exchangeable Shares (incorporated by reference to Exhibit 2.4 to
Ronald V. Joyce's Schedule 13D, dated January 5, 1996).
2.5 Support Agreement, dated as of December 29, 1995, by and among Wendy's International,
Inc., 1149658 Ontario Inc., and Ronald V. Joyce (incorporated by reference to Exhibit
2.5 to Ronald V. Joyce's Schedule 13D, dated January 5, 1996).
2.6 Irrevocable Trust Agreement for the Benefit of Ronald V. Joyce, dated as of December 29,
1995, between Dana Klein and The Huntington Trust Company, N.A. (incorporated by
reference to Exhibit 2.6 to Ronald V. Joyce's Schedule 13D, dated January 5, 1996).
2.7 Subscription Agreement, dated as of December 29, 1995, by and between the Irrevocable
Trust for the Benefit of Ronald V. Joyce, an Ohio Trust, and Wendy's International, Inc.
(incorporated by reference to Exhibit 2.6 to Ronald V. Joyce's Schedule 13D, dated
January 5, 1996).
</TABLE>
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<TABLE>
<S> <C>
2.8 Guaranty Agreement, dated as of December 29, 1995, by and between the Irrevocable Trust
for the Benefit of Ronald V. Joyce, an Ohio Trust, and Ronald V. Joyce (incorporated by
reference to Exhibit 2.7 to Ronald V. Joyce's Schedule 13D, dated January 5, 1996).
2.9 Escrow Agreement, dated as of December 29, 1995, by and among Wendy's International,
Inc., an Ohio corporation, 1149658 Ontario Inc., Ronald V. Joyce, and The Trust Company
of Bank of Montreal, as escrow agent (incorporated by reference to Exhibit 2.8 to Ronald
V. Joyce's Schedule 13D, dated January 5, 1996).
2.10 Registration Rights Agreement, dated as of December 29, 1995, between Wendy's
International, Inc. and Ronald V. Joyce (incorporated by reference to Exhibit 2.9 to
Ronald V. Joyce's Schedule 13D, dated January 5, 1996).
23 Consent of Price Waterhouse.
99.1 Auditors' Report, dated October 10, 1995 and accompanying Audited Consolidated Financial
Statements of 632687 Alberta Limited (incorporated by reference to Item 7(a) of Wendy's
International, Inc.'s Current Report on Form 8-K, dated December 4, 1995)
99.2 Unaudited Consolidated Financial Statements for the 9 months ended September 30, 1995
(incorporated by reference to Item 7(a) of Wendy's International Inc.'s Current Report
on Form 8-K, dated December 4, 1995).
99.3 Pro forma financial information for the year-to-date period ended October 1, 1995
(incorporated by reference to Item 7(b) of Wendy's International, Inc.'s Current Report
on Form 8-K, dated December 4, 1995).
</TABLE>
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Exhibit 23
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PRICE WATERHOUSE
January 16, 1996
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in this Current Report on
Form 8-K of Wendy's International, Inc. of our report, dated October 10, 1995,
relating to the consolidated financial statements of 632687 Alberta Ltd. (the
company), which appear in the Current Report on Form 8-K of Wendy's
International, Inc. (Wendy's) dated December 4, 1995. We have not audited any
financial statements of the company subsequent to December 31, 1994. Neither
have we, in connection with our providing such consent, carried out any
procedures subsequent to December 4, 1995, the date of our prior consent given
in connection with the Registration Statement on Form S-3 (File No. 33-57101)
filed by Wendy's.
Yours very truly,
/s/Price Waterhouse
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Chartered Accountants
TORONTO, CANADA
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