Filed pursuant to Rule 424(b)(5)
Registration No. 333-71102
Prospectus Supplement to Prospectus dated October 19, 2001.
$225,000,000
WENDY'S INTERNATIONAL, INC.
6.20% Senior Notes due 2014
------------------------
We will pay interest on the notes on June 15 and December 15 of each year,
beginning on December 15, 2002. The notes will be issued only in denominations
of $1,000 and integral multiples of $1,000.
We may redeem all or a part of the notes at any time at the redemption
prices set forth in this prospectus supplement.
---------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
---------------------
Per Note Total
-------- -----
Initial public offering price............................... 99.708% $224,343,000
Underwriting discount....................................... 0.675% $ 1,518,750
Proceeds, before expenses, to us............................ 99.033% $222,824,250
The initial public offering price set forth above does not include accrued
interest, if any. Interest on the notes will accrue from June 17, 2002 and must
be paid by the purchaser if the notes are delivered after June 17, 2002.
The underwriters have agreed to reimburse us $212,625 for certain of our
expenses incurred in connection with this offering.
---------------------
The underwriters expect to deliver the notes in book-entry form only
through the facilities of The Depository Trust Company against payment in New
York, New York on June 17, 2002.
GOLDMAN, SACHS & CO.
BANC ONE CAPITAL MARKETS, INC. JPMORGAN MORGAN STANLEY
---------------------
BEAR, STEARNS & CO. INC. CREDIT SUISSE FIRST BOSTON FLEET SECURITIES, INC.
LADENBURG THALMANN & CO. INC. LEHMAN BROTHERS
---------------------
Prospectus Supplement dated June 10, 2002.
WENDY'S INTERNATIONAL, INC.
We are one of the world's largest quick-service restaurant ("QSR")
companies, with $8.3 billion in 2001 systemwide sales. We develop, operate,
franchise and license a worldwide system of restaurants that prepare, package
and sell a proprietary menu of competitively priced food items under the brand
names Wendy's(R) and Tim Hortons(R). Founded in 1969 by Dave Thomas, Wendy's is
the third largest QSR chain featuring hamburgers in the world. Founded in 1964
by Tim Horton and Ron Joyce, Tim Hortons is the largest coffee and fresh baked
goods chain in Canada. Each is a quality leader in its QSR segment and each
ranks within the top three of its segment in terms of systemwide sales, units
and market share.
Wendy's generated $6.8 billion in systemwide sales in 2001 and grew
systemwide sales at a compounded annual growth rate of 7.9% from 1991 to 2001.
Tim Hortons generated $1.5 billion in systemwide sales in 2001 and grew
systemwide sales at a compounded annual growth rate of 16.9% from 1991 to 2001.
For the year ended December 30, 2001, our total revenues were $2.4 billion,
EBITDA was $451 million, pretax income was $307 million and net income was $194
million, or $1.65 per share (diluted).
Restaurants in each system are operated by us or by our franchisees or
licensees under the terms of franchise or license agreements. Of the 8,206
Wendy's and Tim Hortons units worldwide at December 30, 2001, 1,325 restaurants,
or approximately 16%, were company-owned and operated.
RECENT DEVELOPMENTS
Acquisition of Baja Fresh
On May 31, 2002, we announced that we had signed a definitive agreement to
acquire Fresh Enterprises, Inc., the owner and operator of the Baja Fresh(R)
Mexican Grill restaurant chain, for $275 million in cash. Baja Fresh, founded in
1990, owns, operates and franchises 169 fast-casual restaurants in 16 states and
the District of Columbia. Upon completion of the transaction, which is expected
in June, Baja Fresh will become a wholly owned subsidiary. We expect to use cash
on hand and the proceeds of this offering to fund the transaction. See "Use of
Proceeds."
Investment in Cafe Express
On February 11, 2002, we acquired a 45% minority interest in Cafe Express,
a fast-casual restaurant pioneer, for $9 million in cash and our guarantee of up
to $3 million under a revolving credit facility for Cafe Express. Cafe Express
currently operates 13 restaurants in Houston and Dallas, Texas and Phoenix,
Arizona.
Redemption of Trust Preferred Securities
$200 million of trust preferred securities of Wendy's Financing I that were
convertible into our common shares at a price of $26.41 per share were called
for redemption on June 10, 2002. 99.9% of these securities were converted into
7.567 million common shares prior to the redemption date. The remaining bonds
were redeemed.
----------------------
(R) -- Baja Fresh is a registered trademark of Fresh Enterprises, Inc.
S-2
CAUTIONARY STATEMENTS
The information incorporated by reference herein contains various
"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, including those identified by the words "believes," "anticipates,"
"expects" and other similar terms. 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 from those expressed in
forward-looking statements include:
- competitive factors, such as the effectiveness of advertising and
marketing programs, pricing pressure by competitors and new product
development by us and our competitors;
- economic, market and other conditions in the countries in which we
operate that may impact consumer spending, our ability to finance new
restaurant development and improvements to existing restaurants and our
ability to acquire restaurants from and sell restaurants to franchisees;
- the impact of changing neighborhood or economic conditions where our
restaurants are located;
- government regulation;
- the impact on our business outside of the United States of international
economic and political conditions, cultural differences and consumer
preferences, currency regulations and fluctuations, diverse government
regulations and tax systems and similar matters; and
- the success of our plans to construct new restaurants, to dispose of some
company-operated restaurants to new or existing franchisees and to sell
leased properties to franchisees.
Further information on factors that could affect our financial and other results
is included in our Form 10-Q for the quarter ended March 31, 2002, filed with
the Securities and Exchange Commission.
S-3
RATIO OF EARNINGS TO FIXED CHARGES
Three Months Ended Fiscal Year Ended
--------------------- --------------------------------------------------
March 31, April 1, Dec. 30, Dec. 31, Jan. 2, Jan. 3, Dec. 28,
2002 2001 2001 2000 2000 1999 1997
---------- -------- -------- -------- ------- ------- --------
Ratio of earnings to
fixed charges......... 4.60 5.07 5.82 5.39 5.56 4.66 4.97
The ratios of earnings to fixed charges were computed by dividing earnings
by fixed charges. Earnings include income before provision for income taxes and
fixed charges, excluding capitalized interest. Fixed charges consist of interest
on all indebtedness, amortization of debt issuance costs and discount or premium
relating to any indebtedness, capitalized interest and a portion of rental
charges (after reduction for related sublease income) considered to be
representative of the interest component in the particular case. We did not have
any preferred stock dividends in any of the periods indicated, and, therefore,
the ratio of earnings to fixed charges and preferred stock dividends for each of
the periods indicated was equal to the ratio of earnings to fixed charges for
that period.
USE OF PROCEEDS
We intend to use the net proceeds from this offering (estimated to be
approximately $222,766,875) to pay a portion of the $275,000,000 purchase price
for Baja Fresh described under "Wendy's International, Inc. -- Recent
Developments." The balance of the purchase price will be paid out of cash on
hand.
S-4
CAPITALIZATION
The following table sets forth our consolidated capitalization as of March
31, 2002 (i) on an historical basis and (ii) as adjusted to reflect the
conversion and redemption of the preferred securities of Wendy's Financing I
described under "Wendy's International, Inc. -- Recent Developments," the sale
of the notes offered hereby and the application of the estimated net proceeds we
receive. It does not reflect the acquisition of Baja Fresh described under
"Wendy's International, Inc. -- Recent Developments."
As of March 31, 2002
-------------------------
Actual As adjusted
---------- -----------
(Dollars in thousands)
Cash and cash equivalents................................... $ 132,281 $ 82,125
========== ==========
Current portion of long-term obligations.................... $ 4,279 $ 4,279
Long-term obligations:
Term debt................................................. 8,463 8,463
6.35% Notes due December 15, 2005......................... 98,306 98,306
7% Debentures due December 15, 2025....................... 96,697 96,697
6.250% Senior Notes due November 15, 2011................. 198,000 198,000
6.20% Senior Notes due June 15, 2014 offered hereby....... 0 225,000
Capital leases............................................ 50,748 50,748
---------- ----------
Total long-term obligations.......................... 452,214 677,214
---------- ----------
Company-obligated mandatorily redeemable preferred
securities of Wendy's Financing I......................... 200,000 0
Shareholders' equity:
Preferred stock, Authorized:
250,000 shares; issued: none
Common stock, $.10 stated value;
Authorized: 200,000,000 shares;
Issued and Exchangeable: 140,085,000 shares and
147,652,000 shares, respectively..................... 13,434 14,191
Capital in excess of stated value......................... 507,626 702,614
Retained earnings......................................... 1,414,883 1,414,883
Translation adjustments................................... (50,287) (50,287)
---------- ----------
1,885,656 2,081,401
Treasury stock at cost: 33,277,000 shares................. (780,265) (780,265)
---------- ----------
Total shareholders' equity........................... 1,105,391 1,301,136
---------- ----------
Total capitalization.............................. $1,761,884 $1,982,629
========== ==========
S-5
DESCRIPTION OF NOTES
The $225,000,000 aggregate principal amount of 6.20% senior notes due June
15, 2014 will be issued under an indenture dated as of November 13, 2001,
between us and Bank One, National Association, as trustee. The following summary
of certain provisions of the notes and of the indenture does not purport to be
complete and is qualified in its entirety by reference to the indenture. Terms
used but not defined herein or in the accompanying prospectus have the meanings
given to them in the indenture. This description of the particular terms of the
notes supplements and, to the extent inconsistent therewith, replaces the
description of the general terms and provisions of the debt securities and the
indenture set forth in the accompanying prospectus under the heading
"Description of Debt Securities," to which description reference is hereby made.
GENERAL
The notes will be senior unsecured obligations of Wendy's International,
Inc. and will rank equally with all other senior unsecured indebtedness of
Wendy's International, Inc. from time to time outstanding. We may, from time to
time, without the consent of the holders of the notes, provide for the issuance
of other debt securities under the indenture in addition to the $225,000,000
aggregate principal amount of the notes offered hereby or increase the
$225,000,000 aggregate principal amount of the notes offered hereby by providing
for the issuance of additional notes under the indenture of the same series and
on the same terms and conditions as the notes offered hereby.
The notes will initially be limited to $225,000,000 aggregate principal
amount and will mature on June 15, 2014. The notes will bear interest at the
rate per annum shown on the front cover of this prospectus supplement. Interest
on the notes will be payable semiannually in arrears on June 15 and December 15
of each year, beginning on December 15, 2002, to the persons in whose names the
notes are registered at the close of business on June 1 or December 1, as the
case may be, next preceding such June 15 or December 15. Interest on the notes
will be computed on the basis of a 360-day year consisting of twelve 30-day
months. The notes are not entitled to any mandatory redemption or sinking fund
payments.
Pursuant to the Trust Indenture Act of 1939, as amended, if a default
occurs on the notes, Bank One, National Association will be required to resign
as trustee unless the default is cured, duly waived or otherwise eliminated
within 90 days.
OPTIONAL REDEMPTION
The notes will be redeemable, at our option, in whole at any time or in
part from time to time, on at least 30 but not more than 60 days prior notice
mailed to The Depository Trust Company ("DTC"), at a redemption price equal to
the greater of (i) 100% of the principal amount of the notes to be redeemed or
(ii) the sum of the present values of the Remaining Scheduled Payments (as
defined below) on the notes to be redeemed discounted to the date of redemption,
on a semiannual basis, at the Treasury Rate (as defined below) plus 25 basis
points, plus, in either case, accrued interest thereon to the date of
redemption; provided, however, that the installments of interest whose stated
maturity is prior to the relevant redemption date shall be payable to the
holders of record at the close of business on the relevant regular record date.
If money sufficient to pay the redemption price of and accrued interest on
all notes to be redeemed on the redemption date is deposited with the trustee on
or before the redemption date and certain other conditions are satisfied, on and
after that date interest will cease to accrue on the notes called for
redemption.
S-6
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the notes to be redeemed that would be used, at the time
of selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term
of the notes to be redeemed. "Independent Investment Banker" means one of the
Reference Treasury Dealers (as defined below) appointed by us.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
business day preceding the redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if that release (or any successor release) is not
published or does not contain those prices on that business day, (A) the average
of the Reference Treasury Dealer Quotations for the redemption date, after
excluding the highest and lowest Reference Treasury Dealer Quotations, or (B) if
the trustee obtains fewer than four Reference Treasury Dealer Quotations, the
average of all these Quotations. "Reference Treasury Dealer Quotations" means,
with respect to each Reference Treasury Dealer and any redemption date, the
average, as determined by the trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the trustee by that Reference Treasury
Dealer at 5:00 p.m. on the third business day preceding the redemption date.
"Reference Treasury Dealer" means each of Goldman, Sachs & Co., Banc One
Capital Markets, Inc., J.P. Morgan Securities Inc., Morgan Stanley & Co.
Incorporated, Bear, Stearns & Co. Inc., Credit Suisse First Boston Corporation,
Fleet Securities, Inc. and Lehman Brothers Inc. or their affiliates which are
primary U.S. Government securities dealers and their respective successors and,
at the option of Wendy's, additional Primary Treasury Dealers; provided,
however, that if any of the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"),
Wendy's shall substitute another Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to any note, the
remaining scheduled payments of the principal thereof to be redeemed and
interest thereon that would be due after the related redemption date but for the
redemption; provided, however, that, if the redemption date is not an interest
payment date with respect to the note to be redeemed, the amount of the next
succeeding scheduled interest payment thereon will be reduced by the amount of
interest accrued thereon to the redemption date. "Treasury Rate" means, with
respect to any redemption date, the rate per annum equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue, assuming a price
for the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for that redemption date.
GLOBAL SECURITIES
The notes will be issued in the form of one or more fully registered global
notes, which will be deposited with, or on behalf of, DTC and registered in the
name of the nominee of DTC. Except as described below, a global note may not be
transferred except as a whole by DTC to another nominee of DTC or to a successor
of DTC or a nominee of that successor. Transfers of a global note will be
effected only through records maintained by DTC and its participants. Beneficial
interests in global notes will be exchanged for notes in definitive form only
under limited circumstances described below.
When we issue a global note, DTC will credit, on its book-entry
registration and transfer system, the respective principal amounts of the notes
represented by that global note to the
S-7
accounts of participants. The accounts to be credited shall be designated by the
underwriters. Ownership of beneficial interests in a global note is limited to
participants that have accounts with DTC or its nominee, or persons that may
hold interests through those participants. In addition, ownership of beneficial
interests by participants in a global note will be evidenced only by, and the
transfer of that ownership interest will be effected only through, records
maintained by DTC or its nominee for a global note. So long as DTC or its
nominee is the registered owner thereof, DTC or its nominee, as the case may be,
will be considered the sole owner or holder of the notes represented by that
global note for all purposes under the indenture. Ownership of beneficial
interests in a global note by persons that hold interests through participants
will be evidenced only by, and the transfer of that ownership interest within
that participant will be effected only through, records maintained by that
participant. DTC has no knowledge of the actual beneficial owners of the notes.
Beneficial owners will not receive written confirmation from DTC of their
purchase, but beneficial owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the participants through which the beneficial owners entered the
transaction. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of those securities in definitive form. These
laws may impair the ability to transfer beneficial interests in a global note.
We will make payments of principal of, and interest on, notes represented
by a global note registered in the name of or held by DTC or its nominee to DTC
or its nominee, as the case may be, as the registered owner and holder of the
global note representing those notes. DTC has advised us that upon receipt of
any payment of principal of, or interest on, a global note, DTC will immediately
credit accounts of participants on its book-entry registration and transfer
system with payments in amounts proportionate to their respective beneficial
interests in the principal amount of that global note as shown in the records of
DTC. Payments by participants to owners of beneficial interests in a global note
held through those participants will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the sole
responsibility of those participants, subject to any statutory or regulatory
requirements that may be in effect from time to time.
Neither we, any trustee nor any of our respective agents, will be
responsible for any aspect of the records of DTC, any nominee or any participant
relating to, or payments made on account of, beneficial interests in a permanent
global debt security or for maintaining, supervising or reviewing any of the
records of DTC, any nominee or any participant relating to those beneficial
interests.
A global note is exchangeable for definitive notes registered in the name
of, and a transfer of a global note may be registered to, any person other than
DTC or its nominee, only if:
- DTC notifies us that it is unwilling or unable to continue as depositary
for that global note or at any time DTC ceases to be registered under the
Exchange Act;
- we determine in our discretion that the global note will be exchangeable
for definitive notes in registered form; or
- there shall have occurred and be continuing an event of default or an
event which, with notice or the lapse of time or both, would constitute
an event of default in respect of the notes.
Any global note that is exchangeable pursuant to the preceding sentence
will be exchangeable in whole for definitive notes in registered form, of like
tenor and of an equal aggregate principal amount as the global note. The
definitive notes will be registered by the registrar in the name or names
instructed by DTC. We expect that these instructions may be
S-8
based upon directions received by DTC from its participants with respect to
ownership of beneficial interests in the global notes.
Except as provided above, owners of the beneficial interests in a global
note will not be entitled to receive physical delivery of notes in definitive
form and will not be considered the holders of notes for any purpose under the
indenture. No global note will be exchangeable except for another global note of
like denomination and tenor to be registered in the name of DTC or its nominee.
Accordingly, each person owning a beneficial interest in a global debt security
must rely on the procedures of DTC and, if that person is not a participant, on
the procedures of the participant through which that person owns its interest,
to exercise any rights of a holder under the global note or the indenture.
We understand that, under existing industry practices, in the event that we
request any action of holders, or an owner of a beneficial interest in a global
note desires to give or take any action that a holder is entitled to give or
take under the notes or the indenture, DTC would authorize the participants
holding the relevant beneficial interests to give or take that action, and those
participants would authorize beneficial owners owning through those participants
to give or take that action or would otherwise act upon the instructions of
beneficial owners owning through them.
DTC has advised us that DTC is a limited purpose trust company organized
under the laws of the State of New York, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered under the Exchange Act. DTC was created
to hold securities of its participants and to facilitate the clearance and
settlement of securities transactions among its participants in those securities
through electronic book-entry changes in accounts of the participants, thereby
eliminating the need for physical movement of securities certificates. DTC's
participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. DTC is owned by a number
of its participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to DTC's book-entry system is also available to others, such as banks, brokers,
dealers and trust companies that clear through or maintain a custodial
relationship with a participant, either directly or indirectly. The rules
applicable to DTC and its participants are on file with the Securities and
Exchange Commission.
S-9
UNDERWRITING
We and the underwriters for the offering named below have entered into an
underwriting agreement with respect to the notes. Subject to certain conditions,
each underwriter has severally agreed to purchase the principal amount of notes
indicated in the following table.
Principal Amount
Underwriters of Notes
------------ ----------------
Goldman, Sachs & Co. ....................................... $157,500,000
Banc One Capital Markets, Inc. ............................. 15,000,000
J.P. Morgan Securities Inc. ................................ 15,000,000
Morgan Stanley & Co. Incorporated........................... 15,000,000
Bear, Stearns & Co. Inc. ................................... 4,500,000
Credit Suisse First Boston Corporation...................... 4,500,000
Fleet Securities, Inc. ..................................... 4,500,000
Ladenburg Thalmann & Co. Inc. .............................. 4,500,000
Lehman Brothers Inc. ....................................... 4,500,000
------------
Total................................................ $225,000,000
============
The underwriters are committed to take and pay for all of the notes being
offered, if any are taken.
Notes sold by the underwriters to the public will initially be offered at
the initial public offering price set forth on the cover of this prospectus. Any
notes sold by the underwriters to securities dealers may be sold at a discount
from the initial public offering price of up to 0.40% of the principal amount of
notes. Any such securities dealers may resell any notes purchased from the
underwriters to certain other brokers or dealers at a discount from the initial
public offering price of up to 0.25% of the principal amount of notes. If all
the notes are not sold at the initial public offering price, the underwriters
may change the initial public offering price and the other selling terms.
The notes are a new issue of securities with no established trading market.
We have been advised by the underwriters that the underwriters intend to make a
market in the notes but are not obligated to do so and may discontinue market
making at any time without notice. No assurance can be given as to the liquidity
of the trading market for the notes.
In connection with the offering, the underwriters may purchase and sell
notes in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by the underwriters of a greater number of
notes than they are required to purchase in the offering. Stabilizing
transactions consist of certain bids or purchases made for the purpose of
preventing or retarding a decline in the market price of the notes while the
offering is in progress.
The underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the underwriting
discount received by it because the representatives have repurchased notes sold
by or for the account of such underwriter in stabilizing or short covering
transactions.
These activities by the underwriters may stabilize, maintain or otherwise
affect the market price of the notes. As a result, the price of the notes may be
higher than the price that otherwise might exist in the open market. If these
activities are commenced, they may be discontinued by the underwriters at any
time. These transactions may be effected in the over-the-counter market or
otherwise.
S-10
Each underwriter represents, warrants and agrees that: (i) it has not
offered or sold and, prior to the expiry of a period of six months from June 17,
2002, will not offer or sell any notes to persons in the United Kingdom except
to persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted and will
not result in an offer to the public in the United Kingdom within the meaning of
the Public Offers of Securities Regulations 1995; (ii) it has only communicated
or caused to be communicated and will only communicate or cause to be
communicated any invitation or inducement to engage in investment activity
(within the meaning of Section 21 of the Financial Services and Markets Act 2000
(the "FSMA")) received by it in connection with the issue or sale of any notes
in circumstances in which Section 21(1) of the FSMA does not apply to us; and
(iii) it has complied and will comply with all applicable provisions of the FSMA
with respect to anything done by it in relation to the notes in, from or
otherwise involving the United Kingdom.
The notes may not be offered, sold, transferred or delivered in or from The
Netherlands, as part of their initial distribution or as part of any
re-offering, and neither this prospectus nor any other document in respect of
the offering may be distributed or circulated in The Netherlands, other than to
individuals or legal entities which include, but are not limited to, banks,
brokers, dealers, institutional investors and undertakings with a treasury
department, who or which trade or invest in securities in the conduct of a
business or profession.
We estimate that our share of the total expenses of the offering, excluding
underwriting discounts and commissions, will be approximately $270,000. The
underwriters have agreed to reimburse us $212,625 for certain of our expenses
incurred in connection with this offering.
We have agreed to indemnify the several underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
In the ordinary course of their respective businesses, certain of the
underwriters and their affiliates engage, and may in the future engage, in
investment banking and commercial banking transactions with us. Banc One Capital
Markets, Inc. is an affiliate of the trustee.
S-11
[THIS PAGE INTENTIONALLY LEFT BLANK]
PROSPECTUS
$500,000,000
WENDY'S INTERNATIONAL, INC.
Debt Securities, Preferred Shares, Depositary Shares
Common Shares and Warrants
----------------------
We may from time to time issue debt securities, preferred shares,
depositary shares, common shares or warrants to purchase debt securities,
preferred shares or common shares having an aggregate offering price of up to
$500,000,000 (or the equivalent in foreign denominated currency or units based
on or related to currencies). The debt securities may be either senior debt
securities or subordinated debt securities. Pursuant to this process, we may
sell securities from time to time in one or more separate offerings, in amounts,
at prices and on terms to be determined at the time of sale.
This prospectus will describe the general terms of the securities and the
general manner in which we will offer the securities. Each time we sell
securities, we will provide a prospectus supplement that will contain the
specific terms of the securities offered. The prospectus supplement will also
describe the specific manner in which we will offer the securities.
We may sell these securities to or through underwriters and also to other
purchasers or through agents. Goldman, Sachs & Co. may be one of the
underwriters. The names of the underwriters will be set forth in a prospectus
supplement.
The prospectus supplement may also add, update or change information
contained in this prospectus. You should read this prospectus, the prospectus
supplement and the additional information described under "Where You Can Find
More Information" carefully before you invest.
----------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY
BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
----------------------
GOLDMAN, SACHS & CO.
----------------------
The date of this prospectus is October 19, 2001.
WHERE YOU CAN FIND MORE INFORMATION
We have filed a registration statement with the Securities and Exchange
Commission relating to the debt securities, preferred shares, depositary shares,
common shares and warrants. This prospectus does not contain all of the
information included in the registration statement. For further information, you
should refer to the registration statement.
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy any reports, statements or other
information we file at the SEC's public reference room at 450 Fifth Street,
N.W., in Washington, D.C. 20549. You can request copies of these documents, upon
payment of a duplicating fee, by writing to the SEC. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
room. Our SEC filings are also available to the public at the SEC's web site at
http://www.sec.gov (this uniform resource locator (URL) is an inactive textual
reference only and is not intended to incorporate the SEC web site into this
prospectus).
The following documents that we have filed with the SEC are incorporated
into this prospectus by reference and considered a part of this prospectus:
- Our Annual Report on Form 10-K for the fiscal year ended December 31,
2000;
- Our Quarterly Report on Form 10-Q for the quarters ended April 1, 2001
and July 1, 2001; and
- Our Current Report on Form 8-K filed as of March 6, 2001.
Later information that we file with the SEC will update and/or supersede
this information. We are also incorporating by reference all documents that we
file with the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended, after the date of this prospectus
and prior to the termination of the offering of the debt securities.
We will provide any of the above documents (including any exhibits that are
specifically incorporated by reference in them) to each person, including any
beneficial owner, to whom a prospectus is delivered. You may request these
documents at no cost. Written or telephone requests should be directed to:
Wendy's International, Inc.
4288 West Dublin-Granville Road
Dublin, Ohio 43017-0256
Attn: Investor Relations
(614) 764-3100
----------------------
Unless the context requires otherwise, the terms "we," "us," and "our"
refers to Wendy's International, Inc. and its subsidiaries and "Wendy's" refers
to Wendy's Old Fashioned Hamburger Restaurants(R).
(R),(TM) -- Wendy's, Wendy's logos, registered trademarks and other logos
and/or slogans used herein are owned by Oldemark LLC.
(R),(TM) -- The Tim Hortons name, logos, registered trademarks and other
logos and/or slogans used herein are owned by The TDL Group Ltd. (Canada) and
T.H.D. Donut (Delaware), Inc. (U.S.).
2
WENDY'S INTERNATIONAL, INC.
We are primarily engaged in the business of operating, developing and
franchising a system of distinctive quick-service restaurants under the names
Wendy's(R) and Tim Hortons(R). At July 1, 2001, there were 5,874 Wendy's
restaurants in operation in the United States, Canada and other international
markets, of which 1,159 were operated by us and 4,715 were operated by our
franchisees. Also at July 1, 2001, there were 2,047 Tim Hortons restaurants in
Canada and the United States, of which 106 were operated by us and 1,941 were
operated by our franchisees.
Each Wendy's restaurant offers a relatively standard menu featuring
hamburgers and filet of chicken breast sandwiches, which are prepared to order
with the customer's choice of condiments. Wendy's menu also includes chicken
nuggets, chili, baked and French fried potatoes, prepared salads, desserts, soft
drinks and other non-alcoholic beverages and children's meals. In addition, the
restaurants sell a variety of promotional products on a limited basis. Each Tim
Hortons unit offers coffee, cappuccino, fresh baked goods such as donuts,
muffins, pies, croissants, tarts, cookies, cakes, bagels and in some units
sandwiches, soups and fresh-baked breads.
We are an Ohio corporation organized in 1969. Our principal executive
offices are located at 4288 West Dublin-Granville Road, Dublin, Ohio 43017-0256;
and our telephone number is (614) 764-3100.
USE OF PROCEEDS
Unless otherwise stated in the applicable prospectus supplement, we intend
to use the net proceeds from the sale of the securities for general corporate
purposes. This may include refinancing of debt, purchase of our common shares,
or capital expenditures such as the acquisition and development of restaurants,
mergers, acquisitions and other strategic investments. Specific allocations of
the proceeds for such purposes have not been made at this time.
RATIO OF EARNINGS TO FIXED CHARGES
SIX MONTHS
ENDED FISCAL YEAR ENDED
----------------- --------------------------------------------------
JULY 1, JULY 2, DEC. 31, JAN. 2, JAN. 3, DEC. 28, DEC. 29,
2001 2000 2000 2000 1999 1997 1996
------- ------- -------- ------- ------- -------- --------
Ratio of earnings to
fixed charges.......... 5.94 5.89 5.39 5.56 4.66 4.97 6.42
The ratios of earnings to fixed charges were computed by dividing earnings
by fixed charges. Earnings include income before provision for income taxes and
fixed charges, excluding capitalized interest. Fixed charges consist of interest
on all indebtedness, amortization of debt issuance costs and discount or premium
relating to any indebtedness, capitalized interest and a portion of rental
charges (after reduction for related sublease income) considered to be
representative of the interest component in the particular case. We did not have
any preferred stock dividends in any of the periods indicated, and, therefore,
the ratio of earnings to fixed charges and preferred stock dividends for each of
the periods indicated was equal to the ratio of earnings to fixed charges for
that period.
DESCRIPTION OF SECURITIES
The following is a general description of the terms and provisions of the
securities we may offer and sell by this prospectus. These summaries are not
meant to be a complete description of each security. This prospectus and any
accompanying prospectus supplement will contain the
3
material terms and conditions for each security. The prospectus supplement may
add, update or change the terms and conditions of the securities as described in
this prospectus.
DESCRIPTION OF DEBT SECURITIES
The following description discusses the general terms and provisions of the
debt securities that we may offer by this prospectus. The debt securities may be
issued as senior debt securities or subordinated debt securities. The
indebtedness represented by the senior debt securities will rank equally with
all of our other unsecured and unsubordinated debt. The indebtedness represented
by the subordinated debt securities will rank junior and be subordinate in right
of payment to the prior payment in full of our senior debt, to the extent and in
the manner set forth in the prospectus supplement for the securities. See
"-- Subordination" below.
For more information about the securities offered by us, please refer to:
- the indenture between us and Bank One, National Association, as trustee,
relating to the issuance of each series of senior debt securities by us;
- the indenture between us and Bank One Trust Company, National
Association, successor to NBD Bank, as trustee, relating to the issuance
of each series of subordinated debt securities by us.
Forms of these documents are filed as exhibits to the registration
statement. The indentures listed above are sometimes collectively referred to as
the "indentures" and individually referred to as an "indenture." The trustee
under each indenture is referred to as the "indenture trustee." The indentures
are subject to and governed by the Trust Indenture Act of 1939, and may be
supplemented or amended from time to time following their execution.
Each indenture gives us broad authority to set the particular terms of each
series of debt securities, including the right to modify certain of the terms
contained in the indenture. The particular terms of a series of debt securities
and the extent, if any, to which the particular terms of the issue modify the
terms of the applicable indenture will be described in the prospectus supplement
relating to the debt securities.
Each indenture contains the full legal text of the matters described in
this section. Because this section is a summary, it does not describe every
aspect of the debt securities or the applicable indenture. This summary is
subject to and qualified in its entirety by reference to all the provisions of
the applicable indenture, including definitions of terms used in the indenture.
We also include references in parentheses to certain sections of the indentures.
Whenever we refer to particular sections or defined terms of the indentures in
this prospectus or in a prospectus supplement, these sections or defined terms
are incorporated by reference herein or in the prospectus supplement. This
summary also is subject to and qualified by reference to the description of the
particular terms of the debt securities in the applicable prospectus supplement.
GENERAL
We may issue an unlimited amount of debt securities under each indenture in
one or more series. We need not issue all debt securities of one series at the
same time and, unless otherwise provided, we may reopen a series, without the
consent of the holders of the debt securities of that series, for issuances of
additional debt securities of that series.
The debt securities will be unsecured obligations.
Prior to the issuance of each series of debt securities, the terms of the
particular securities will be specified in a supplemental indenture or a
resolution of our board of directors or in one or
4
more officer's certificates pursuant to a board resolution. We refer you to the
applicable prospectus supplement for a description of the following terms of the
series of debt securities:
(a) the title of the debt securities;
(b) any limit on the aggregate principal amount of the debt
securities;
(c) the date or dates on which principal will be payable or how to
determine the dates;
(d) the rate or rates or method of determination of interest; the date
from which interest will accrue; the dates on which interest will be
payable, which we refer to as the "interest payment dates;" and any record
dates for the interest payable on the interest payment dates;
(e) the place of payment on the debt securities;
(f) any obligation or option we have to redeem, purchase or repay debt
securities, or any option of the registered holder to require us to redeem
or repurchase debt securities, and the terms and conditions upon which the
debt securities will be redeemed, purchased or repaid;
(g) the denominations in which the debt securities will be issuable
(if other than denominations of $1,000 and any integral multiple thereof);
(h) the currency or currencies, including composite currencies or
currency units, in which payment of the principal of (or premium, if any)
or interest, if any, on any of the debt securities will be payable if other
than the currency of the United States of America;
(i) any index, formula or other method used to determine the amount of
principal, premium, if any, or interest;
(j) if other than the entire principal amount, the portion of the
principal amount of the debt securities that will be payable if the
maturity of the debt is accelerated;
(k) the terms and conditions upon which the currency in which the debt
securities are payable may change;
(l) any event of default applicable to the debt security in addition
to those included in the applicable indenture;
(m) any covenant included for the benefit of the debt security in
addition to (and not inconsistent with) those included in the applicable
indenture;
(n) whether the debt securities are to be issued in whole or in part
in the form of one or more global debt securities and, if so, the identity
of the depositary for the global debt securities; and
(o) any other terms of the debt securities. (See Section 301.)
If the debt securities are denominated in whole or in part in any currency
other than United States dollars, if the principal of (and premium, if any) or
interest, if any, on the debt securities are to be payable in a currency or
currencies other than that in which such debt securities are to be payable, or
if any index is used to determine the amount of payments of principal of,
premium, if any, or interest on any series of the debt securities, special
Federal income tax, accounting and other considerations applicable thereto will
be described in the prospectus supplement.
PAYMENT OF DEBT SECURITIES -- INTEREST
Unless indicated differently in a prospectus supplement, we will pay
interest on the debt security on each interest payment date to the person in
whose name the debt security is
5
registered as of the close of business on the regular record date relating to
the interest payment date.
However, if we default in paying interest on a debt security, we will pay
defaulted interest in either of the two following ways:
(a) We will first propose to the indenture trustee a payment date for
the defaulted interest. Next, the indenture trustee will choose a special
record date for determining which registered holders are entitled to the
payment. The special record date will be between 10 and 15 days before the
payment date we propose. Finally, we will pay the defaulted interest on the
payment date to the registered holder of the debt security as of the close
of business on the special record date.
(b) Alternatively, we can propose to the indenture trustee any other
lawful manner of payment that is consistent with the requirements of any
securities exchange on which the debt securities are listed for trading. If
the indenture trustee thinks the proposal is practicable, payment will be
made as proposed. (See Section 307.)
PAYMENT OF DEBT SECURITIES -- PRINCIPAL
Unless we indicate differently in a prospectus supplement, we will pay
principal of and any premium on the debt securities at stated maturity, upon
redemption or otherwise, upon presentation of the debt securities at the office
of the indenture trustee, as our paying agent. Any other paying agent initially
designated for the debt securities of a particular series will be named in the
applicable prospectus supplement.
FORM; TRANSFERS; EXCHANGES
The debt securities will be issued:
(a) only in fully registered form;
(b) without interest coupons; and
(c) unless otherwise specified in a prospectus supplement, in
denominations that are integral multiples of $1,000.
You may have your debt securities divided into debt securities of smaller
denominations (of at least $1,000) or combined into debt securities of larger
denominations, as long as the total principal amount is not changed. This is
called an "exchange."
You may exchange or transfer debt securities at the office of the indenture
trustee. The indenture trustee acts as our agent for registering debt securities
in the names of holders and transferring debt securities. We may appoint another
agent or act as our own agent for this purpose. The entity performing the role
of maintaining the list of registered holders is called the "security
registrar." It will also perform transfers.
In our discretion, we may change the place for registration of transfer of
the debt securities and may remove and/or appoint one or more additional
security registrars. (See Sections 305 and 1002.)
Except as otherwise provided in a prospectus supplement, there will be no
service charge for any transfer or exchange of the debt securities, but you may
be required to pay a sum sufficient to cover any tax or other governmental
charge payable in connection with the transfer or exchange. We may block the
transfer or exchange of (a) debt securities during a period of 15 days prior to
giving any notice of redemption or (b) any debt security selected for redemption
in whole or in part, except the unredeemed portion of any debt security being
redeemed in part. (See Section 305.)
6
REDEMPTION
We will set forth any terms for the redemption of debt securities in a
prospectus supplement. Unless we indicate differently in a prospectus
supplement, and except with respect to debt securities redeemable at the option
of the registered holder, debt securities will be redeemable upon notice by mail
between 30 and 60 days prior to the redemption date. If less than all of the
debt securities of any series are to be redeemed, the indenture trustee will
select the debt securities to be redeemed. In the absence of any provision for
selection, the indenture trustee will choose a method of random selection it
deems fair and appropriate. (See Sections 1102, 1103 and 1104.)
Debt securities will cease to bear interest on the redemption date. We will
pay the redemption price and any accrued interest once you surrender the debt
security for redemption. (See Section 1106.) If only part of a debt security is
redeemed, the indenture trustee will deliver to you a new debt security of the
same series for the remaining portion without charge. (See Section 1107.)
We may make any redemption conditional upon the receipt by the paying
agent, on or prior to the date fixed for redemption, of money sufficient to pay
the redemption price. If the paying agent has not received the money by the date
fixed for redemption, we will not be required to redeem the debt securities.
(See Section 1105.)
EVENTS OF DEFAULT
Unless otherwise specified in a prospectus supplement, an "event of
default" occurs with respect to debt securities of any series if:
(a) we do not pay any interest on any debt securities of the
applicable series within 30 days of the due date (following any deferral
allowed under the terms of the debt securities and elected by us);
(b) we do not pay principal or premium on any debt securities of the
applicable series on its due date;
(c) we do not deposit any sinking fund payment when due by the terms
of the applicable security;
(d) we remain in breach of a covenant or warranty (excluding covenants
and warranties not applicable to the affected series) of the applicable
indenture for 90 days after we receive a written notice of default stating
we are in breach and requiring remedy of the breach; the notice must be
sent by either the indenture trustee or registered holders of at least 10%
of the principal amount of debt securities of the affected series;
(e) we do not pay other indebtedness in an aggregate principal amount
of $25 million or more when due and remain in default for 10 days after we
receive written notice as provided in the applicable indenture;
(f) we file for bankruptcy or other specified events in bankruptcy,
insolvency, receivership or reorganization occur; or
(g) any other event of default specified in the prospectus supplement
occurs. (See Section 501.)
No event of default with respect to a series of debt securities necessarily
constitutes an event of default with respect to the debt securities of any other
series issued under the indentures.
7
REMEDIES
ACCELERATION
If an event of default occurs and is continuing with respect to any series
of debt securities, then either the indenture trustee or the registered holders
of not less than 25% in principal amount of the outstanding debt securities of
that series may declare the principal amount of all of the debt securities of
that series to be due and payable immediately. (See Section 502.)
RESCISSION OF ACCELERATION
After the declaration of acceleration has been made and before the
indenture trustee has obtained a judgment or decree for payment of the money due
on any series of debt securities, the registered holders of not less than a
majority in aggregate principal amount of the outstanding debt securities of
that series may rescind and annul the declaration and its consequences, if
(a) we pay or deposit with the indenture trustee a sum sufficient to pay:
- all overdue interest;
- the principal and any premium which have become due other than by the
declaration of acceleration and overdue interest on these amounts;
- interest on overdue interest to the extent lawful;
- all amounts due to the indenture trustee under the indenture; and
(b) all events of default with respect to the affected series, other than
the nonpayment of the principal which has become due solely by the declaration
of acceleration, have been cured or waived as provided in the applicable
indenture. (See Section 502.)
For more information as to waiver of defaults, see "Waiver of Default and
of Compliance" below.
CONTROL BY REGISTERED HOLDERS; LIMITATIONS
Subject to the applicable indenture, if an event of default with respect to
the debt securities of any series occurs and is continuing, the registered
holders of a majority in principal amount of the outstanding debt securities of
that series will have the right to:
(a) direct the time, method and place of conducting any proceeding for
any remedy available to the indenture trustee, or
(b) exercise any trust or power conferred on the indenture trustee
with respect to the debt securities of the series.
If an event of default is continuing with respect to all the series of debt
securities, the registered holders of a majority in aggregate principal amount
of the outstanding debt securities of all the series, considered as one class,
will have the right to make such direction, and not the registered holders of
the debt securities of any one of the series.
These rights of registered holders to make direction are subject to the
following limitations:
(a) the registered holders' directions will not conflict with any law
or the applicable indenture; and
(b) the registered holders' directions may not involve the indenture
trustee in personal liability where the indenture trustee believes
indemnity is not adequate.
The indenture trustee may also take any other action it deems proper which
is consistent with the registered holders' direction. (See Sections 512 and
603.)
8
In addition, each indenture provides that no registered holder of any debt
security of any series will have any right to institute any proceeding, judicial
or otherwise, with respect to the indenture for the appointment of a receiver or
for any other remedy under the indenture unless:
(a) that registered holder has previously given the indenture trustee
written notice of a continuing event of default;
(b) the registered holders of not less than 25% in aggregate principal
amount of the outstanding debt securities of that series have made written
request to the indenture trustee to institute proceedings in respect of
that event of default and have offered the indenture trustee indemnity
satisfactory to it against costs and liabilities incurred in complying with
the request; and
(c) for 60 days after receipt of the notice, the indenture trustee has
failed to institute a proceeding and no direction inconsistent with the
request has been given to the indenture trustee during the 60-day period by
the registered holders of a majority in aggregate principal amount of
outstanding debt securities of that series.
Furthermore, no registered holder will be entitled to institute any action
if and to the extent that the action would disturb or prejudice the rights of
other registered holders. (See Sections 507 and 603.)
However, each registered holder has an absolute and unconditional right to
receive payment when due and to bring a suit to enforce that right. (See Section
508.)
NOTICE OF DEFAULT
The indenture trustee is required, under each indenture, to give the
registered holders of the debt securities notice of any default under the
indenture to the extent required by the Trust Indenture Act, unless the default
has been cured or waived; except that in the case of an event of default of the
character specified above in clause (c) under "Events of Default," no notice
shall be given to the registered holders until at least 60 days after the
occurrence thereof. (See Section 602.) The Trust Indenture Act currently permits
the indenture trustee to withhold notices of default (except for certain payment
defaults) if the indenture trustee in good faith determines the withholding of
the notice to be in the interests of the registered holders.
We will furnish the indenture trustee with an annual statement as to our
compliance with the conditions and covenants in the indentures. (See Section
1004.)
WAIVER OF DEFAULT AND OF COMPLIANCE
The registered holders of a majority in aggregate principal amount of the
outstanding debt securities of all affected series (voting as one class) may
waive, on behalf of the registered holders of all debt securities of all such
series, any past default under the applicable indenture, except a default in the
payment of principal, premium or interest, or with respect to compliance with
certain provisions of the indenture that cannot be amended without the consent
of the registered holder of each outstanding debt security. (See Section 513.)
Compliance with some of the covenants in the indentures or otherwise
provided with respect to debt securities may be waived by the registered holders
of a majority in aggregate principal amount of the affected debt securities,
considered as one class. (See Section 1010.)
COVENANTS
The covenants described below apply to any and all series of senior debt
securities unless we specify otherwise in the applicable prospectus. We will
describe any additional covenants for a particular series of senior debt
securities in the applicable prospectus supplement.
9
For your reference, we have provided a list of definitions of the
capitalized terms used in the covenants at the end of the description.
LIMITATION ON LIENS
We will not, nor will we permit any Domestic Subsidiary to, issue or assume
any indebtedness secured by a mortgage, security interest, pledge, lien or other
encumbrance (mortgages, security interests, pledges, liens or other encumbrances
are called "liens") upon any Principal Property or upon any shares of capital
stock or indebtedness of any Domestic Subsidiary (whether the Principal
Property, shares or indebtedness are now owned or are hereafter acquired),
without effectively providing that all of the debt securities issued under the
indenture are secured equally and ratably. These restrictions do not apply to
indebtedness secured by liens existing on the date of the indenture or to:
(a) liens on any property existing at the time of its acquisition;
(b) liens on property of a corporation existing at the time it is
merged into or consolidated with us or a Domestic Subsidiary or at the time
of a sale, lease or other disposition of the properties of a corporation
(or a division) as an entirety or substantially as an entirety to us or a
Domestic Subsidiary;
(c) liens on property of a corporation existing at the time it becomes
a Domestic Subsidiary;
(d) liens securing indebtedness of a Domestic Subsidiary to us or to
another Domestic Subsidiary;
(e) liens to secure all or part of the cost of acquisition,
construction, development or improvement of the underlying property;
provided that the commitment of the creditor to extend the credit secured
by the lien is obtained no later than 24 months after the later of:
- the completion of the acquisition, construction, development or
improvement of the underlying property, or
- the placing in operation of the property;
(f) liens put on any property in contemplation of its disposition;
provided we dispose of the property within 180 days after the creation of
the liens and that any indebtedness secured by the liens is without
recourse to us or any of our subsidiaries;
(g) liens in favor of the United States of America or any state, or
any department, agency or instrumentality or political subdivision thereof,
to secure certain payments;
(h) liens to secure indebtedness of joint ventures in which we or a
Domestic Subsidiary has an interest to the extent such liens are on
property or assets of, or equity interests in, the joint ventures;
(i) liens to secure indebtedness incurred for the purpose of financing
the acquisition, development or construction of restaurants; and
(j) any extension, renewal, replacement or refunding of any lien
existing on the date of the indenture or referred to in clauses (a) to (c),
(e) and (i); provided that the principal amount of indebtedness secured
thereby and not otherwise authorized by clauses (a) to (c), (e) or (i) does
not exceed the principal amount of Indebtedness, plus any premium or fee
payable in connection with any such extension, renewal, replacement or
refunding, so secured at the time of such extension, renewal, replacement
or refunding.
Notwithstanding these restrictions, we and our Domestic Subsidiaries may,
without securing the senior debt securities, issue or assume secured debt so
long as, after giving effect thereto, the aggregate amount of secured debt
incurred after the date of the indenture (not including
10
secured debt permitted under the specific exceptions listed above) and the
aggregate Attributable Value of the Sale and Leaseback Transactions entered into
after the date of the indenture (other than those permitted under the specific
exceptions listed above) does not exceed 15% of Consolidated Capitalization.
(See Section 1008.)
LIMITATION ON SALE AND LEASEBACK TRANSACTIONS
We will not, nor will we permit any Domestic Subsidiary to, enter into any
Sale and Leaseback Transaction with respect to any Principal Property, unless:
(a) we would otherwise be entitled to issue, assume or guarantee
indebtedness secured by a lien on the Principal Property without equally
and ratably securing the outstanding debt securities under the indenture;
(b) we apply, within 180 days after the effective date of the Sale and
Leaseback Transaction, an amount equal to the net available proceeds from
the sale to:
- the acquisition of Principal Properties or
- the retirement of outstanding debt securities under the indenture or
- the repayment of indebtedness other than subordinated indebtedness; or
(c) after giving effect thereto, the aggregate amount of secured debt
incurred after the date of the indenture (not including secured debt
permitted under the specific exceptions listed above) and the aggregate
Attributable Value of the Sale and Leaseback Transactions entered into
after the date of the indenture (other than those permitted under the
specific exceptions listed below) does not exceed 15% of Consolidated
Capitalization.
The foregoing restrictions will not apply to Sale and Leaseback
Transactions:
(w) providing for a lease for a term, including any renewals, of not
more than three years, by the end of which term it is intended that the use
of such Principal Property by the lessee will be discontinued;
(x) between us and a Domestic Subsidiary or between Domestic
Subsidiaries;
(y) between us or a Domestic Subsidiary and a joint venture in which
we or the Domestic Subsidiary has an interest; or
(z) primarily for the purpose of financing the acquisition,
development or construction of restaurants by our franchisees. (See Section
1009.)
DEFINITIONS USED IN THE COVENANTS
For purposes of the covenants described above:
"Attributable Value" in respect of any Sale and Leaseback Transaction
means, as of the time of determination, the lesser of:
(a) the sale price of the Principal Property so leased multiplied by a
fraction the numerator of which is the remaining portion of the base term
of the lease included in the Sale and Leaseback Transaction and the
denominator of which is the base term of the lease, and
(b) the total obligation (discounted to present value at the highest
rate of interest specified by the terms of any series of debt securities
then outstanding compounded semi-annually) of the lessee for rental
payments (other than amounts required to be paid on account of property
taxes as well as maintenance, repairs, insurance, water rates and other
items which do not constitute payments for property rights) during the
remaining portion of the base term of the lease included in the Sale and
Leaseback Transaction.
11
"Consolidated Capitalization" means our consolidated total assets less
consolidated current liabilities.
"Domestic Subsidiary" means any of our subsidiaries that owns a Principal
Property.
"Principal Property" means all restaurant or related equipment and all real
property, in each case which is owned by us or a subsidiary.
"Sale and Lease-Back Transaction" means an arrangement with any lender or
investor providing for the leasing of any Principal Property which has been or
is to be sold to the lender or investor or a person to whom the lender or
investor has advanced funds on the security of the Principal Property if the
sale is to occur more than 12 months after either:
(a) the completion of the acquisition, construction, development or
improvement of the Principal Property or
(b) the placing in operation of the Principal Property.
CONSOLIDATION, MERGER AND CONVEYANCE OF ASSETS AS AN ENTIRETY
Subject to the provisions described in the next paragraph, we will preserve
our corporate existence. (See Section 1005.)
We have agreed not to consolidate with or merge into any other entity and
not to convey, transfer or lease our properties and assets substantially as an
entirety to any entity, unless:
(a) the entity formed by the consolidation or into which we are
merged, or the entity which acquires us or which leases our property and
assets substantially as an entirety, is an entity organized and existing
under the laws of the United States of America or any State of the United
States or the District of Columbia, and expressly assumes, by supplemental
indenture, the due and punctual payment of the principal, premium and
interest on all the outstanding debt securities and the performance of all
of our covenants under the indentures,
(b) immediately after giving effect to the transactions, no event of
default, and no event which after notice or lapse of time or both would
become an event of default, will have occurred and be continuing;
(c) if, as a result of the transaction, our property or assets would
become subject to a lien that would not be permitted under the applicable
indenture, the entity formed by the consolidation or into which we are
merged causes all of the debt securities issued under the indenture to be
secured equally and ratably;
(d) all other conditions are met. (See Section 801.)
MODIFICATION OF INDENTURES
WITHOUT REGISTERED HOLDER CONSENT
Without the consent of any registered holders of debt securities, we and
the applicable indenture trustee may enter into one or more supplemental
indentures for any of the following purposes:
(a) to evidence the succession of another entity to us; or
(b) to add one or more covenants or other provisions for the benefit
of the registered holders of all or any series of debt securities, or to
surrender any right or power conferred upon us; or
(c) to add any additional events of default for all or any series of
debt securities; or
12
(d) to provide for the issuance of bearer securities; or
(e) to change or eliminate any provision of the indenture or to add
any new provision to the indenture that does not adversely affect the
interests of the registered holders; or
(f) to provide security for the debt securities of any series; or
(g) to establish the form or terms of debt securities of any series as
permitted by the indenture; or
(h) to evidence and provide for the acceptance of appointment of a
separate or successor indenture trustee; or
(i) to cure any ambiguity, defect or inconsistency or to make any
other changes that do not adversely affect the interests of the registered
holders in any material respect. (See Section 901.)
WITH REGISTERED HOLDER CONSENT
We and the applicable indenture trustee may, with some exceptions, amend or
modify any indenture with the consent of the registered holders of at least a
majority in aggregate principal amount of the debt securities of all series
affected by the amendment or modification (voting as one class). However, no
amendment or modification may, without the consent of the registered holder of
each outstanding debt security affected thereby,
(a) change the stated maturity of the principal of or interest on any debt
security (other than pursuant to the terms of the debt security), or reduce the
principal amount, interest or premium payable or change the currency in which
any debt security is payable, or impair the right to bring suit to enforce any
payment;
(b) reduce the percentages of registered holders whose consent is required
for any supplemental indenture or waiver or reduce the requirements for quorum
and voting under the indenture; or
(c) modify certain of the provisions in the indenture relating to
supplemental indentures and waivers of certain covenants and past defaults.
A supplemental indenture which changes or eliminates any provision of an
indenture expressly included solely for the benefit of registered holders of
debt securities of one or more particular series will be deemed not to affect
the rights under the indenture of the registered holders of debt securities of
any other series. (See Section 902.)
MISCELLANEOUS
The indentures provide that some debt securities, including those for which
payment or redemption money has been deposited or set aside in trust, will not
be deemed to be "outstanding" in determining whether the registered holders of
the requisite principal amount of the outstanding debt securities have given or
taken any demand, direction, consent or other action under the indenture as of
any date, or are present at a meeting of registered holders for quorum purposes.
(See Section 101.)
We will be entitled to set any day as a record date for the purpose of
determining the registered holders of outstanding debt securities of any series
entitled to give or take any demand, direction, consent or other action under
the indentures, in the manner and subject to the limitations provided in the
indentures. In some circumstances, the indenture trustee also will be entitled
to set a record date for action by registered holders. If a record date is set
for any action to be taken by registered holders of particular debt securities,
the action may be taken only by persons who are registered holders of the
respective debt securities on the record date. (See Section 104.)
13
DEFEASANCE AND COVENANT DEFEASANCE
The indentures provide, unless the terms of the particular series of debt
securities provide otherwise, that we may, upon satisfying several conditions,
cause ourselves to be:
(a) discharged from our obligations, with some exceptions, with
respect to any series of debt securities, which we refer to as
"defeasance"; and
(b) released from our obligations under specified covenants with
respect to any series of debt securities, which we refer to as "covenant
defeasance."
One condition we must satisfy is the irrevocable deposit with the indenture
trustee, in trust, of money and/or government obligations which, through the
scheduled payment of principal and interest on those obligations, would provide
sufficient moneys to pay the principal of and any premium and interest on those
debt securities on the maturity dates of the payments or upon redemption. In
addition, we must deliver to the indenture trustee an opinion of counsel
confirming that there will be no Federal income tax consequences to the holders
of the debt securities as a result of the defeasance and an officer's
certificate confirming that the securities will not be delisted.
The indentures permit defeasance with respect to any series of debt
securities even if a prior covenant defeasance has occurred with respect to the
debt securities of that series. Following a defeasance, payment of the debt
securities defeased may not be accelerated because of an event of default.
Following a covenant defeasance, payment of the debt securities may not be
accelerated by reference to the specified covenants affected by the covenant
defeasance. However, if an acceleration were to occur, the realizable value at
the acceleration date of the money and government obligations in the defeasance
trust could be less than the principal and interest then due on the respective
debt securities, since the required deposit in the defeasance trust would be
based upon scheduled cash flows rather than market value, which would vary
depending upon interest rates and other factors.
RESIGNATION AND REMOVAL OF AN INDENTURE TRUSTEE; DEEMED RESIGNATION
An indenture trustee may resign at any time by giving written notice to us.
An indenture trustee may also be removed by act of the registered holders
of a majority in principal amount of the then outstanding debt securities of any
series.
No resignation or removal of an indenture trustee and no appointment of a
successor indenture trustee will become effective until the acceptance of
appointment by a successor indenture trustee in accordance with the requirements
of the applicable indenture.
Under some circumstances, we may appoint a successor indenture trustee and,
if the successor accepts, the indenture trustee will be deemed to have resigned.
(See Section 610).
SUBORDINATION
Unless we indicate differently in a prospectus supplement, any subordinated
debt securities will be subordinated in the following manner. If our assets are
distributed upon our dissolution, winding up, liquidation or reorganization, the
payment of the principal of, premium, if any, and interest on any subordinated
debt securities will be subordinated, to the extent provided in the subordinated
debt indenture and the applicable supplemental indenture, to the prior payment
in full of all senior indebtedness, including senior debt securities. However,
our obligation to pay principal of, and premium, if any, or interest on the
subordinated debt securities will not otherwise be affected. No payment on
account of principal, premium, if any, sinking fund or interest may be made on
the subordinated debt securities at any time when there is a default in the
payment of principal, premium, if any, sinking fund or interest on senior
indebtedness. If, while we are in default on senior indebtedness, any payment is
received by the indenture trustee
14
under the subordinated debt security indenture or the holders of any of the
subordinated debt securities before we have paid all senior indebtedness in
full, the payment or distribution must be paid over to the holders of the unpaid
senior indebtedness or applied to the repayment of the unpaid senior
indebtedness. Subject to paying the senior indebtedness in full, the holders of
the subordinated debt securities will be subrogated to the rights of the holders
of the senior indebtedness to the extent that payments are made to the holders
of senior indebtedness out of the distributive share of the subordinated debt
securities.
Due to the subordination, if our assets are distributed upon insolvency,
some or all of our general creditors may recover more, ratably, than holders of
subordinated debt securities. The subordinated debt indenture or applicable
supplemental indenture may state that its subordination provisions will not
apply to money and securities held in trust under the satisfaction and
discharge, and the legal defeasance provisions of the subordinated debt
indenture.
If this prospectus is being delivered in connection with the offering of a
series of subordinated debt securities, the accompanying prospectus supplement
or the information incorporated by reference in it will set forth the
approximate amount of senior indebtedness outstanding as of a recent date.
CONVERSION RIGHTS
The terms and conditions of any debt securities being offered that are
convertible into our common shares will be set forth in a prospectus supplement.
These terms will include the conversion price, the conversion period, provisions
as to whether conversion will be mandatory, or at the option of the holder or
us, the events requiring an adjustment of the conversion price and provisions
affecting conversion in the event that the debt securities are redeemed.
GOVERNING LAW
The indentures and the related debt securities will be governed by and
construed in accordance with the laws of the State of New York.
DESCRIPTION OF CAPITAL STOCK
OUR AUTHORIZED CAPITAL STOCK
Our authorized capital stock consists of 200,000,000 common shares, without
par value, and 250,000 preferred shares, par value $1.00 per share. As of August
5, 2001, we had approximately 114,013,000 common shares and no preferred shares
outstanding.
COMMON SHARES
Holders of our common shares are entitled to:
- one vote for each share held, except that the laws of Ohio provide for
cumulative voting for the election of directors upon the previous request
of any shareholder;
- receive dividends when and if declared by the directors from funds
legally available therefor, subject to the rights of holders of preferred
shares, if any, and to restrictions contained in our long-term
indebtedness; and
- share ratably in our net assets, legally available to our shareholders in
the event of our liquidation, dissolution or winding up, after provision
for distribution to the holders of any preferred shares.
15
Holders of our common shares have no preemptive, subscription, redemption
or conversion rights. Our outstanding common shares are, and the shares which
may be issued on conversion will be, when issued, fully paid and nonassessable.
Each common share carries with it one Series A preferred share purchase
right, as described below under the caption "Shareholder Rights Plan."
PREFERRED SHARES
Our articles of incorporation authorize our board of directors to issue,
without any further vote or action by our shareholders, subject to certain
limitations prescribed by law and the rules and regulations of the New York
Stock Exchange, up to an aggregate of 250,000 preferred shares in one or more
classes or series. With respect to any classes or series, the board of directors
may determine the designation and the number of shares, preferences, limitations
and special rights, including dividend rights, conversion rights, redemption
rights and liquidation preferences. Holders of preferred shares are entitled to
one vote per share on matters to be voted upon by the holders of common shares
and preferred shares voting together as a single class, except that Ohio law
entitles the holders of preferred shares to exercise a class vote on certain
matters.
SHAREHOLDER RIGHTS PLAN
We have a shareholder rights plan under which one preferred Series A share
purchase right was distributed as a dividend for each outstanding common share.
Until the rights become exercisable, or until the earlier redemption or exchange
of the rights, we will issue one right with each newly issued common share so
that all common shares will have rights attached.
Each right will entitle the holder to buy one ten-thousandth of one of our
Series A preferred shares, at a price of $100.00 per one ten-thousandth of a
share, subject to adjustment. The rights will not be exercisable until the
earlier to occur of:
- a public announcement that, without the prior consent of the board of
directors, a person or group of affiliated or associated persons have
acquired, or obtained the right to acquire, beneficial ownership of 15%
or more of our outstanding common shares; or
- the tenth business day (or a later date set by the board of directors)
after a tender offer for our common shares is first commenced or
announced if it would result in the beneficial ownership by a person or
group of 15% or more of our outstanding common shares.
Until the rights become exercisable, they will be transferred with and only
with the common shares. Separate certificates for the rights will be issued as
soon as practicable after the rights become exercisable. Only then will the
rights begin trading separately from the common shares.
In the event we are acquired in a merger or other business combination
transaction or 50% or more of our assets or earning power is sold, each holder
of a right will have the right to receive, upon the exercise of the right at the
then current exercise price, the number of common shares of the acquiring
company which, at the time of the transaction, have a market value of two times
the exercise price of the right.
In the event that any person or group acquires, or obtains the right to
acquire, beneficial ownership of 15% or more of our outstanding common shares
without the prior approval of the board of directors, then:
- the rights beneficially owned by the acquiring person or group will be
void, and
- each other holder of a right will have the right to receive, upon
exercise, a number of our common shares having a market price of two
times the exercise price of the right.
16
Generally, we can redeem each right for $.01 at any time before a person or
group acquires, or obtains the right to acquire, beneficial ownership of 15% or
more of our outstanding common shares without the prior approval of the board of
directors. If not redeemed, the rights will expire on August 10, 2008.
ANTI-TAKEOVER EFFECTS OF ARTICLES OF INCORPORATION, CODE OF REGULATIONS AND THE
OHIO GENERAL CORPORATION LAW
There are provisions in our articles of incorporation and code of
regulations, and the Ohio Revised Code that could discourage potential takeover
attempts and make attempts by shareholders to change management more difficult.
These provisions could adversely affect the market price of our shares:
STAGGERED BOARD
The board of directors is divided into three classes, with regular
three-year staggered terms. This classification system increases the difficulty
of replacing a majority of the directors and may tend to discourage a
third-party from making a tender offer or otherwise attempting to gain control
of us. It also may maintain the incumbency of our board of directors.
SUPERMAJORITY VOTING PROVISIONS
Unless at least two-thirds (2/3) of the directors recommend the approval of
any of the following matters, the affirmative vote of at least seventy-five
percent (75%) of the outstanding shares entitled to vote is required in order
to:
- amend our articles of incorporation or code of regulations;
- approve an agreement of merger or consolidation;
- approve a combination or majority share acquisition involving the
issuance of our shares;
- sell, exchange, transfer or otherwise dispose of all, or substantially
all, our assets; or
- dissolve.
MERGER MORATORIUM STATUTE
If a person becomes the beneficial owner of 10% or more of an issuer's
shares without the prior approval of its board of directors, Chapter 1704 of the
Ohio Revised Code prohibits the following transactions for at least three years
if they involve both the issuer and either the acquirer or anyone affiliated or
associated with the acquirer:
- the disposition or acquisition of any interest in assets;
- mergers, consolidations, combinations and majority share acquisitions;
- voluntary dissolutions; and
- the issuance or transfer of shares or any rights to acquire shares in
excess of 5% of the outstanding shares.
The prohibition imposed by Chapter 1704 continues indefinitely after the
initial three-year period unless the transaction is approved by the holders of
at least two-thirds of the voting power of the issuer or satisfies statutory
conditions relating to the fairness of the consideration to be received by the
shareholders.
The Merger Moratorium Statute does not apply to a corporation if its
articles of incorporation or code of regulations so provide. We have not opted
out of the application of the Merger Moratorium Statute.
17
CONTROL SHARE ACQUISITION ACT
Section 1701.831 of the Ohio Revised Code provides that certain notice and
informational filings, and special shareholder meeting and voting procedures,
must occur prior to any person's acquisition of an issuer's shares that would
entitle the acquirer to exercise or direct the voting power of the issuer in the
election of directors within any of the following ranges:
- one-fifth or more but less than one-third of such voting power;
- one-third or more but less than a majority of such voting power;
- a majority or more of such voting power.
The Control Share Acquisition Act does not apply to a corporation if its
articles of incorporation or code of regulations so provide. We have not opted
out of the application of the Control Share Acquisition Act.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common shares is American Stock
Transfer and Trust Company, 40 Wall Street, New York, New York 10005.
DESCRIPTION OF DEPOSITARY SHARES
GENERAL
We may issue depositary shares, each of which will represent a fractional
interest of a share of a particular series of preferred shares, as specified in
the applicable prospectus supplement. We will deposit with a depositary (the
"preferred stock depositary") preferred shares of each series represented by
depositary shares. We will enter into a deposit agreement (each a "deposit
agreement") with the preferred stock depositary and holders from time to time of
the depositary receipts issued by the preferred stock depositary which evidence
the depositary shares ("depositary receipts"). Subject to the terms of the
deposit agreement, each owner of a depositary receipt will be entitled, in
proportion to the holder's fractional interest in the preferred shares, to all
the rights and preferences of the series of the preferred shares represented by
the depositary shares (including dividend, voting, conversion, redemption and
liquidation rights).
Immediately after we issue and deliver the preferred shares to a preferred
stock depositary, we will cause the preferred stock depositary to issue the
depositary receipts on our behalf. You may obtain copies of the applicable form
of deposit agreement and depositary receipt from us upon request. The statements
made in this section relating to the deposit agreement and depositary receipts
are summaries of certain anticipated provisions. These summaries are not
complete and we may modify them in a prospectus supplement. For more detail, we
refer you to the deposit agreement itself, which we will file as an exhibit to
the registration statement.
DIVIDENDS AND OTHER DISTRIBUTIONS
The preferred stock depositary will distribute all cash dividends or other
cash distributions received in respect of the preferred shares to the record
holders of depositary receipts in proportion to the number of the depositary
receipts owned by the holders, subject to the obligations of holders to file
proofs, certificates and other information and to pay certain charges and
expenses to the preferred stock depositary.
In the event of a distribution other than in cash, the preferred stock
depositary will distribute property received by it to the record holders of
depositary receipts in proportion to the number of the depositary receipts owned
by the holders, unless the preferred stock depositary determines
18
that it is not feasible to make the distribution, in which case the preferred
stock depositary may, with our approval, sell the property and distribute the
net proceeds from the sale to the holders.
No distribution will be made in respect of any depositary share that
represents any preferred share converted into other securities.
WITHDRAWAL OF STOCK
Upon surrender of the depositary receipts at the corporate trust office of
the preferred stock depositary (unless we have previously called for redemption
or converted into other securities the related depositary shares), the holders
will be entitled to delivery at that office of the number of whole or fractional
preferred shares and any money or other property represented by the depositary
shares. Holders of depositary receipts will be entitled to receive the related
preferred shares as specified in the applicable prospectus supplement, but
holders of preferred shares will not thereafter be entitled to receive
depositary shares.
REDEMPTION OF DEPOSITARY SHARES
Whenever we redeem preferred shares held by the preferred stock depositary,
the preferred stock depositary will concurrently redeem the number of depositary
shares representing preferred shares so redeemed, provided we have paid the
applicable redemption price for the preferred shares to be redeemed plus an
amount equal to any accrued and unpaid dividends to the date fixed for
redemption. The redemption price per depositary share will be equal to the
corresponding proportion of the redemption price and any other amounts per share
payable with respect to the preferred shares. If fewer than all the depositary
shares are to be redeemed, the depositary shares to be redeemed will be selected
pro rata (as nearly as may be practicable without creating fractional depositary
shares) or by any other equitable method determined by us.
From and after the date fixed for redemption:
- all dividends in respect preferred shares called for redemption will
cease to accrue;
- the depositary shares called for redemption will no longer be deemed to
be outstanding; and
- all rights of the holders of the depositary receipts evidencing the
depositary shares called for redemption will cease, except the right to
receive any moneys payable upon the redemption and any money or other
property to which the holders of the depositary receipts were entitled
upon redemption and surrender to the preferred stock depositary.
VOTING OF THE PREFERRED SHARES
Upon receipt of notice of any meeting at which the holders of the preferred
shares are entitled to vote, the preferred stock depositary will mail the
information contained in the notice of meeting to the record holders of the
depositary receipts. Each record holder of these depositary receipts on the
record date (which will be the same date as the record date for the preferred
shares) will be entitled to instruct the preferred stock depositary as to the
exercise of the voting rights pertaining to the amount of preferred shares
represented by the holder's depositary shares. The preferred stock depositary
will vote the amount of preferred shares represented by the depositary shares in
accordance with the instructions, and we will agree to take all reasonable
action necessary to enable the preferred stock depositary to do so. The
preferred stock depositary will abstain from voting the amount of preferred
shares represented by the depositary shares for which it does not receive
specific instructions from the holders of depositary receipts evidencing the
depositary shares. The preferred stock depositary will not be responsible for
any failure to carry out any instruction to vote, or for the manner or effect of
any
19
vote made, as long as the action or non-action is in good faith and does not
result from the preferred stock depositary's negligence or willful misconduct.
LIQUIDATION PREFERENCE
If we voluntarily or involuntarily liquidate, dissolve or wind up, the
holders of each depositary receipt will be entitled to the fraction of the
liquidation preference accorded each preferred share represented by the
depositary shares, as set forth in the applicable prospectus supplement.
CONVERSION OF PREFERRED SHARES
The depositary shares, as such, are not convertible into common shares or
any of our other securities or property. Nevertheless, if we so specify in the
applicable prospectus supplement relating to an offering of depositary shares,
holders may surrender depositary receipts to the preferred stock depositary with
written instructions to the preferred stock depositary to instruct us to convert
the preferred shares represented by the depositary shares into whole common
shares, other preferred shares or other securities. We have agreed that upon
receipt of the instructions and any amounts payable, we will convert the
depositary shares using the same procedures as those provided for converting
preferred shares. If the depositary shares evidenced by a depositary receipt are
to be converted in part only, the preferred stock depositary will issue a new
depositary receipt(s) for any depositary shares not converted. No fractional
common shares will be issued upon conversion, and if the conversion would result
in a fractional share being issued, we will pay an amount in cash equal to the
value of the fractional interest based upon the closing price of the common
shares on the last business day prior to the conversion.
AMENDMENT AND TERMINATION OF THE DEPOSIT AGREEMENT
We may amend the form of depositary receipt and any provision of the
deposit agreement at any time by agreement between us and the preferred stock
depositary. However, any amendment that materially and adversely alters the
rights of the holders of depositary receipts or that would be materially and
adversely inconsistent with the rights granted to the holders of the related
preferred shares will not be effective unless the holders of at least 66 2/3% of
the depositary shares evidenced by the depositary receipts then outstanding
approve the amendment. No amendment will impair the right, subject to the
exceptions set forth in the depositary agreement, of any holder of depositary
receipts to surrender any depositary receipt with instructions to deliver to the
holder the related preferred shares and all money and other property, if any,
represented by the depositary receipt, except in order to comply with law. Every
holder of an outstanding depositary receipt at the time any such amendment
becomes effective will be deemed, by continuing to hold the receipt, to consent
and agree to the amendment and to be bound by the deposit agreement as amended.
We may terminate the deposit agreement upon not less than 30 days' prior
written notice to the preferred stock depositary if a majority of each series of
preferred shares affected by the termination consents to the termination. Upon
termination, the preferred stock depositary will deliver or make available to
each holder of depositary receipts, upon surrender of the depositary receipts
held by the holder, the number of whole or fractional preferred shares
represented by the depositary shares evidenced by the depositary receipts
together with any other property held by the preferred stock depositary with
respect to the depositary receipt.
In addition, the deposit agreement will automatically terminate if:
- all outstanding depositary shares have been redeemed;
- there has been a final distribution of the related preferred shares in
connection with our liquidation, dissolution or winding up and the
distribution has been distributed to the
20
holders of depositary receipts evidencing the depositary shares
representing the preferred shares; or
- each related preferred share has been converted into our securities which
are not represented by depositary shares.
CHARGES OF PREFERRED STOCK DEPOSITARY
We will pay all transfer and other taxes and governmental charges arising
solely from the existence of the deposit agreement. In addition, we will pay the
fees and expenses of the preferred stock depositary in connection with the
performance of its duties under the deposit agreement. However, holders of
depositary receipts will pay the fees and expenses of the preferred stock
depositary for any duties requested by the holders to be performed which are
outside of those expressly provided for in the deposit agreement.
RESIGNATION AND REMOVAL OF DEPOSITARY
The preferred stock depositary may resign at any time by delivering to us
notice of its election to do so, and we may at any time remove the preferred
stock depositary. Any such resignation or removal will take effect upon our
appointment of a successor preferred stock depositary. We must appoint a
successor preferred stock depositary within 60 days after delivery of the notice
of resignation or removal, and any preferred stock depositary must be a bank or
trust company having its principal office in the United States and having a
combined capital and surplus of at least $50,000,000.
MISCELLANEOUS
The preferred stock depositary will forward to holders of depositary
receipts any reports and communications the preferred stock depositary receives
from us relating to the preferred shares.
We will not be liable, nor will the preferred stock depositary be liable,
if we are prevented from or delayed in, by law or any circumstances beyond our
control, performing our obligations under the deposit agreement. Our obligations
and the obligations of the preferred stock depositary under the deposit
agreement will be limited to performing our duties in good faith and without
negligence (only in the case of any action or inaction in the voting of
preferred shares represented by the depositary shares), gross negligence or
willful misconduct. We will not be obligated, nor will the preferred stock
depositary be obligated, to prosecute or defend any legal proceeding in respect
of any depositary receipts, depositary shares or preferred shares represented
thereby unless satisfactory indemnity is furnished to us. We may rely, and the
preferred stock depositary may rely, on written advice of counsel or
accountants, or information provided by persons presenting preferred shares
represented thereby for deposit, holders of depositary receipts or other persons
we believe in good faith to be competent to give such information, and on
documents we believe in good faith to be genuine and signed by a proper party.
DESCRIPTION OF WARRANTS
We may issue warrants to purchase debt securities ("debt warrants"),
preferred shares ("preferred share warrants"), depositary shares ("depositary
share warrants") or common shares ("common share warrants," collectively with
the debt warrants, the preferred share warrants and the depositary share
warrants ("warrants")). We may issue warrants independently or together with any
other securities we offer pursuant to a prospectus supplement and the warrants
may be attached to or separate from the securities. We will issue each series of
warrants under a separate warrant agreement that we will enter into with a bank
or trust
21
company, as warrant agent. We will set forth additional terms of the warrants
and the applicable warrant agreements in the applicable prospectus supplement.
DEBT WARRANTS
We will describe in the applicable prospectus supplement the terms of the
debt warrants being offered, the warrant agreement relating to the debt warrants
and the debt warrant certificates representing the debt warrants, including the
following:
(a) the title of the debt warrants;
(b) the aggregate number of the debt warrants;
(c) the price or prices at which the debt warrants will be issued;
(d) the designation, aggregate principal amount and terms of the debt
securities issuable upon exercise of the warrants and the procedures and
conditions relating to the exercise of the debt warrants;
(e) the designation and terms of any related debt securities with
which the debt warrants are issued, and the number of the debt warrants
issued with each security;
(f) the date, if any, on and after which the debt warrants and the
related debt securities will be separately transferable;
(g) the principal amount of debt securities purchasable upon exercise
of each debt warrant, and the price at which the principal amount of the
debt securities may be purchased upon exercise;
(h) the date on which the right to exercise the debt warrants will
commence, and the date on which the right will expire;
(i) the maximum or minimum number of the debt warrants which may be
exercised at any time;
(j) a discussion of the material United States Federal income tax
considerations applicable to the exercise of the debt warrants; and
(k) any other terms of the debt warrants and terms, procedures and
limitations relating to the exercise of the debt warrants.
Holders may exchange debt warrant certificates for new debt warrant
certificates of different denominations, and may exercise debt warrants at the
corporate trust office of the warrant agent or any other office indicated in the
applicable prospectus supplement. Prior to the exercise of their debt warrants,
holders of debt warrants will not have any of the rights of holders of the
securities purchasable upon the exercise and will not be entitled to payments of
principal, premium or interest on the securities purchasable upon the exercise.
OTHER WARRANTS
We will describe in the applicable prospectus supplement the terms of the
preferred share warrants, depositary share warrants and common share warrants
being offered, including the following:
(a) the title of the warrants;
(b) the securities for which the warrants are exercisable;
(c) the price or prices at which the warrants will be issued;
(d) if applicable, the number of the warrants issued with each
preferred share, common share or depositary share;
22
(e) any provisions for adjustment of the number or amount of preferred
shares, common shares or depositary shares receivable upon exercise of the
warrants or the exercise price of the warrants;
(f) if applicable, the date on and after which the warrants and the
related preferred shares, common shares or depositary shares will be
separately transferable;
(g) if applicable, a discussion of the material United States Federal
income tax considerations applicable to the exercise of the warrants;
(h) any other terms of the warrants, including terms, procedures and
limitations relating to the exchange and exercise of the warrants;
(i) the date on which the right to exercise the warrants will
commence, and the date on which the right will expire; and
(j) the maximum or minimum number of the warrants which may be
exercised at any time.
EXERCISE OF WARRANTS
Each warrant will entitle the holder of the warrant to purchase for cash at
the exercise price set forth in the applicable prospectus supplement the
principal amount of debt securities or preferred shares, common shares or
depositary shares being offered. Holders may exercise warrants at any time up to
the close of business on the expiration date set forth in the applicable
prospectus supplement. After the close of business on the expiration date,
unexercised warrants are void.
Holders may exercise warrants as set forth in the prospectus supplement
relating to the warrants being offered. Upon receipt of payment and the warrant
certificate properly completed and duly executed at the corporate trust office
of the warrant agent or any other office indicated in the prospectus supplement,
we will, as soon as practicable, forward the debt securities, depositary shares
or preferred shares or common shares purchasable upon the exercise. If less than
all of the warrants represented by the warrant certificate are exercised, we
will issue a new warrant certificate for the remaining warrants.
PLAN OF DISTRIBUTION
We may sell the securities from time to time in their initial offering as
follows:
- through agents;
- to dealers or underwriters for resale;
- directly to purchasers; or
- through a combination of any of these methods of sale.
In addition, we may issue the securities as a dividend or distribution or in a
subscription rights offering to our existing security holders. This prospectus
may be used in connection with any offering of our securities through any of
these methods or other methods described in the applicable prospectus
supplement.
The securities we distribute by any of these methods may be sold to the
public, in one or more transactions, either:
- at a fixed price or prices, which may be changed;
- at market prices prevailing at the time of sale;
- at prices related to prevailing market prices; or
23
- at negotiated prices.
We may solicit offers to purchase securities directly from the public from
time to time. We may also designate agents from time to time to solicit offers
to purchase securities from the public on our behalf. The prospectus supplement
relating to any particular offering of securities will name any agents
designated to solicit offers, and will include information about any commissions
we may pay the agents, in that offering. Agents may be deemed to be
"underwriters" as that term is defined in the Securities Act.
From time to time, we may sell securities to one or more dealers acting as
principals. The dealers, who may be deemed to be "underwriters" as that term is
defined in the Securities Act, may then resell those securities to the public.
We may sell securities from time to time to one or more underwriters, who
would purchase the securities as principal for resale to the public, either on a
firm-commitment or best-efforts basis. If we sell securities to underwriters, we
may execute an underwriting agreement with them at the time of sale and will
name them in the applicable prospectus supplement. In connection with those
sales, underwriters may be deemed to have received compensation from us in the
form of underwriting discounts or commissions and may also receive commissions
from purchasers of the securities for whom they may act as agents. Underwriters
may resell the securities to or through dealers, and those dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions from purchasers for whom they may act as agents.
The applicable prospectus supplement will include any required information about
underwriting compensation we pay to underwriters, and any discounts, concessions
or commissions underwriters allow to participating dealers, in connection with
an offering of securities.
If we offer securities in a subscription rights offering to our existing
security holders, we may enter into a standby underwriting agreement with
dealers, acting as standby underwriters. We may pay the standby underwriters a
commitment fee for the securities they commit to purchase on a standby basis. If
we do not enter into a standby underwriting arrangement, we may retain a
dealer-manager to manage a subscription rights offering for us.
We may authorize underwriters, dealers and agents to solicit from third
parties offers to purchase securities under contracts providing for payment and
delivery on future dates. The applicable prospectus supplement will describe the
material terms of these contracts, including any conditions to the purchasers'
obligations, and will include any required information about commissions we may
pay for soliciting these contracts.
Underwriters, dealers, agents and other persons may be entitled, under
agreements that they may enter into with us, to indemnification by us against
certain liabilities, including liabilities under the Securities Act.
Unless otherwise indicated in the applicable prospectus supplement or
confirmation of sale, the purchase price of the securities will be required to
be paid in immediately available funds in New York City.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for us by
Vorys, Sater, Seymour and Pease LLP, Columbus, Ohio. As of September 21, 2001,
members of Vorys, Sater, Seymour and Pease LLP and attorneys employed by Vorys,
Sater, Seymour and Pease LLP, together with members of their immediate families,
beneficially owned 22,349 of our common shares.
24
EXPERTS
The financial statements incorporated in this prospectus by reference to
the Annual Report on Form 10-K for the year ended December 31, 2000, have been
so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
accounting and auditing.
25
------------------------------------------------------------
------------------------------------------------------------
No dealer, salesperson or other person is authorized to give any
information or to represent anything not contained in this prospectus. You must
not rely on any unauthorized information or representations. This prospectus is
an offer to sell only the notes offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.
---------------------
TABLE OF CONTENTS
Prospectus Supplement
Page
----
Wendy's International, Inc. ............. S-2
Cautionary Statements.................... S-3
Ratio of Earnings to Fixed Charges....... S-4
Use of Proceeds.......................... S-4
Capitalization........................... S-5
Description of Notes..................... S-6
Underwriting............................. S-10
Prospectus
Where You Can Find More Information...... 2
Wendy's International, Inc. ............. 3
Use of Proceeds.......................... 3
Ratio of Earnings to Fixed Charges....... 3
Description of Securities................ 3
Description of Debt Securities........... 4
Description of Capital Stock............. 15
Description of Depositary Shares......... 18
Description of Warrants.................. 21
Plan of Distribution..................... 23
Legal Matters............................ 24
Experts.................................. 25
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
------------------------------------------------------------
$225,000,000
WENDY'S INTERNATIONAL, INC.
6.20% Senior Notes due 2014
----------------------
[Wendy's/Tim Hortons Logo]
----------------------
GOLDMAN, SACHS & CO.
BANC ONE CAPITAL MARKETS, INC.
JPMORGAN
MORGAN STANLEY
BEAR, STEARNS & CO. INC.
CREDIT SUISSE FIRST BOSTON
FLEET SECURITIES, INC.
LADENBURG THALMANN & CO. INC.
LEHMAN BROTHERS
------------------------------------------------------------
------------------------------------------------------------