-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Nels5jqRUghkvaGc2SwVBDoS8bW+pYjjPNQvvvu9VWpStASmzE/HlZaPM2JeVW6b Pl1RBAb0xHnqJWMUpT9wMA== 0000928385-97-001617.txt : 19971002 0000928385-97-001617.hdr.sgml : 19971002 ACCESSION NUMBER: 0000928385-97-001617 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970916 ITEM INFORMATION: ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19971001 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHOICE HOTELS FRANCHISING INC CENTRAL INDEX KEY: 0001046311 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 521209792 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-13393 FILM NUMBER: 97689331 BUSINESS ADDRESS: STREET 1: 10750 COLUMBIA PIKE CITY: SILVER SPRING STATE: MD ZIP: 20901 BUSINESS PHONE: 3019795000 MAIL ADDRESS: STREET 1: 10750 COLUMBIA PIKE CITY: SILVER SPRING STATE: MD ZIP: 20901 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 __________________ FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): September 16, 1997 ------------------ Choice Hotels Franchising, Inc. ----------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 52-1209792 --------------- ------------------- (State or Other (IRS Employer Jurisdiction of Identification No.) Incorporation) 10750 Columbia Pike Silver Spring, Maryland 20901 ------------------------------ (Address of Principal Executive Offices) (301) 979-5000 ---------------------------- (Registrant's telephone number, including area code) ITEM 5. Other Events ------------ Choice Hotels International, Inc. ("Choice") announced on September 16, 1997 that, at its Annual Meeting of Stockholders held on such date, Choice stockholders approved the separation of its franchising business from its hotel real estate business via a spin-off of its wholly owned subsidiary, Choice Hotels Franchising, Inc. ("Franchising"). The Choice Board has set October 15, 1997 as the date on which Choice stockholders of record at the close of business on October 7, 1997 (the Record Date) will receive a pro rata distribution of --- ---- Franchising common stock. The Franchising spin-off remains subject to the satisfaction or waiver prior to the Record Date of certain conditions. At the time of the Franchising spin-off, Franchising will assume the name "Choice Hotels International, Inc." and Franchising common stock is expected to trade on the New York Stock Exchange under the ticker symbol "CHH." At such time, Choice will assume the name "Sunburst Hospitality Corporation" and Sunburst common stock is expected to trade on the New York Stock Exchange under the ticker symbol "SNB". Choice also announced that its stockholders approved a one-for-three reverse stock split of Choice's common stock which will be effected immediately following the Franchising spin-off. As a result, the outstanding shares of Sunburst (formerly, Choice) common stock will be reduced from approximately 60 million shares to approximately 20 million shares. The reverse stock split will not affect Franchising which is expected to have approximately 60 million shares outstanding upon consummation of the Franchising spin-off. The press release issued by Choice and filed as Exhibit 99.1 hereto is incorporated herein by reference. Additionally, Franchising's Registration Statement on Form 10 under the Securities Exchange Act of 1934, covering Franchising common stock was declared effective by the Securities and Exchange Commission on September 26, 1997. ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits ------------------------------------------------------------------ (c) Exhibits -------- 99.1 Press Release dated September 16, 1997. ITEM 8. Change in Fiscal Year --------------------- On September 16, 1997, the Choice Board of Directors determined to change Choice's fiscal year-end from May 31 to December 31, effective December 31, 1997. Choice intends to file a Transition Report on Form 10-K for the seven month transition period ended December 31, 1997. Additionally, on September 16, 1997, the Franchising Board of Directors determined to change Franchising's fiscal year-end from May 31 to December 31, 1997. Franchising intends to file a Transition Report on Form 10-K for the seven month transition period ended December 31, 1997. 2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Choice Hotels Franchising, Inc. By: /s/ James A. MacCutcheon ------------------------------ James A. MacCutcheon Executive Vice President, Chief Financial Officer and Treasurer Date: October 1, 1997 3 EX-99.1 2 EXHIBIT 99.1 FOR IMMEDIATE RELEASE Contact: James A. MacCutcheon Executive Vice President CFO & Treasurer (301) 979-5001 A.B. Albritton Vice President, Corporate Relations (301) 979-5032 CHOICE HOTELS SHAREHOLDERS APPROVE SEPARATION OF FRANCHISING AND REAL ESTATE BUSINESSES Company Receives IRS Ruling That Spin-Off is Tax-Free to Shareholders Real Estate Company Called Sunburst Hospitality Corporation; Board of Directors Named SILVER SPRING, MD. (SEPT. 16, 1997)--Choice Hotels International, Inc. (NYSE:CHH) today announced that its Board of Directors and shareholders have approved the previously announced separation of its franchising business from its hotel real estate business through a tax-free spin-off of the franchising business to Company shareholders. The Board set Oct. 15, 1997, as the date of the distribution. On that date, Choice Hotels shareholders of record at the close of business on Oct.7, 1997, will receive one share of stock in Choice Hotels Franchising, Inc., the new franchising company, for every share of Choice Hotels common stock. At the time of the distribution, the franchising company will adopt the name Choice Hotels International, Inc. as well as the NYSE symbol "CHH," and the Company will change its name to Sunburst Hospitality Corporation and will continue to be listed on the NYSE under the new symbol "SNB." The Company has received a ruling from the Internal Revenue Service that the spin-off will be tax-free to shareholders. However, the spin- --MORE-- off remains subject to certain conditions which must be satisfied prior to the Oct. 7 record date. After completion of the spin-off, Choice Hotels International will remain the world's second-largest franchisor with 4,164 hotels open or under development, representing 355,127 rooms in 33 countries and marketed under the Comfort, Quality, Econo Lodge, Sleep Inn, Clarion, Rodeway Inn and MainStay Suites brands. In fiscal 1997, total Choice system sales were in excess of $2.7 billion and its reported revenues were approximately $430 million. Sunburst Hospitality will be Choice's largest franchisee. Choice's real estate unit, which in 1992 had a portfolio of 12 hotels, currently owns and operates a portfolio of 72 domestic hotels and another 20 hotels currently under construction or in development. All of Sunburst's hotels are flagged with Choice brands and operate in one of the three principal segments of the lodging industry: all suite, full service and limited service. On a pro forma basis, Sunburst generated approximately $168 million in revenues in fiscal 1997. Sunburst will focus on optimizing the operation performance of its existing portfolio, capitalizing on expected growth of the mid-price, extended stay all- suite segment with MainStay Suites, developing other consumer-focused products such as Sleep Inns, and pursuing opportunistic acquisitions of existing hotels. Choice Chairman Stewart Bainum, Jr., said, "The purpose of the spin-off is to create two focused companies, one in franchising and one in real estate, thereby unlocking the value in both for the near and long term. Both Choice and Sunburst, under the leadership of Bill Floyd and Don Landry respectively, are well positioned for growth and profitability in the years ahead." SUNBURST ONE-FOR-THREE REVERSE STOCK SPLIT The Board and shareholders also approved a one-for-three reverse stock split of Sunburst to be effected immediately following the Oct. 15, 1997, distribution. In the reverse stock split, each three shares of Company common stock will be exchanged for one share of Sunburst -MORE- common stock. As a result, the outstanding shares of Sunburst will be reduced from approximately 60 million to approximately 20 million. The reverse stock split will not affect the new Choice Hotels, which is expected to have approximately 60 million shares outstanding upon the spin-off. SUNBURST/CHOICE BOARDS NAMED The Company also announced that upon the spin-off, the Sunburst Board will include Stewart Bainum, Jr., Chairman and CEO of Manor Care; Stewart Bainum, Vice Chairman of Manor Care; Frederic V. Malek, Chairman of Thayer Capital Partners; Paul A. Gould, Managing Director of Allen & Company Incorporated; Donald J. Landry, proposed CEO of Sunburst; and Carole Y. Prest, Vice President, Corporate Strategic Planning of Manor Care. Bainum, Jr., Bainum and Malek will also serve on the Board of the new Choice Hotels along with James H. Rempe, Senior Vice President and General Counsel of Manor Care. The following current members of the Company's Board will resign and join the new Choice Hotels board: William R. Floyd, CEO of Choice Hotels; Barbara Bainum, President of Commonweal Foundation; Jerry Robertson, retired Executive Vice President, 3M Life Science Sector and Corporate Services; Robert C. Hazard, Jr., Chairman of Creative Hotels, LLC; and Gerald W. Petitt, President and CEO of Creative Hotels Associates, LLC. # # # -----END PRIVACY-ENHANCED MESSAGE-----