UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report ( Date of earliest event reported): September 25, 1997
SAGEBRUSH, INC.
(Exact name of registrant as specified in its charter)
NORTH CAROLINA 0-27258 56-1875714
(State or other jurisdiction of Commission (I.R.S. Employer
incorporation or organization) File Number Identification No.)
3238 West Main Street, Claremont, N.C. 28610
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (704) 459-0821
Not Applicable
(Former name, former address and former fiscal year, if changed since last
report)
Item 5. Other Events
Sagebrush, Inc. and WSMP, Inc. have signed a letter of intent to pursue WSMP's
acquisition of Sagebrush in a stock for stock merger of the two companies. The
transaction is subject to various conditions including the approval of Sagebrush
directors and shareholders. The proposed exchange ratio is .3214 shares of WSMP
common stock for each share of Sagebrush common stock.
Item 7. Exhibits
Exhibit 10.1 Letter of intent between Sagebrush Inc. and WSMP, Inc. dated
September 25, 1997.
Exhibit 99.1 Press release announcing letter of intent dated September 26, 1997
Exhibit 99.2 Press release announcing exchange rate dated September 26, 1997
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 thereunto duly authorized.
SAGEBRUSH, INC.
Date: September 26, 1997 By: \s\ Noland M. Mewborn
Noland M. Mewborn,
Vice President, Treasurer and CFO
(Principal Financial Officer)
3
EXHIBIT 10.1
WSMP Inc
A Food Service Company
P.O. Box 399, WSMP Drive, Claremont, NC 28610
(704) 459-7626/FAX (704) 459-0733
September 25, 1997
Sagebrush, Inc.
3238 West Main Street
Claremont, North Carolina 28610
Attention: Mr. Charles F. Connor, Jr.
Chairman of the Board
-and-
Mr. L. Dent Miller
President
Gentlemen:
This will confirm our understanding concerning the proposed exchange of
shares between WSMP, Inc. ("WSMP") and the shareholders of Sagebrush, Inc.
("Sagebrush") by which WSMP will issue 0.3214 shares of its common stock (the
"WSMP Stock") to the sagebrush shareholders for each of the 6,071,200 shares
of the Sagebrush common stock outstanding (the "Sagebrush Stock"). This
exchange of shares (hereinafter, the "Transaction") shall be diligently
pursued by the parties until the Transaction is consummated or negotiations
with respect thereto are terminated. This letter does not contain all matters
upon which agreement be reached in order for the Transaction to be
consummated, but is intended solely as an outline of certain material
provisions. The terms of our understanding are as follows:
1. The exchange rate for the Sagebrush Shares is based upon a valuation of
WSMP Shares of $17.50 per share, and Sagebrush Shares at $5.625 per share
2. Matters concerning possible future service to WSMP by Messrs. Connor and
Miller are intentionally omitted herefrom, pending a review by them of
future plans and expectations. Both officers shall enter into Non-
Competition Agreements concerning their employments and livelihoods after
the completion of any service to Sagebrush or WSMP, as the case may be.
3. The Transaction is subject to WSMP receiving assurances sufficient to
itself that the Transaction may be accounted for, for financial reporting
purposes, as a pooling of interests transaction.
4. The Transaction is subject to the approval of WSMP's Board of Directors.
5. The Transaction is subject to approval of Sagebrush's Board of Directors
and Sagebrush's shareholders, and receipt by the Board of Directors of a
fairness opinion acceptable to it.
6. The Transaction is subject to the consent of WSMP's lenders.
7. The Transaction is subject to satisfactory findings from our due
diligence review.
8. The parties shall announce their intent in a joint press release attached
hereto. The parties shall cooperate in connection with any further press
releases related to the Transaction, and each party will give the other
party reasonable prior notice of any press release it intends to release.
9. The parties shall agree upon a timetable for the Transaction and filing
of a registration statement (the "Registration Statement") in the office
of the Securities and Exchange Commission (the "SEC"). Such Registration
Statement, covering the acquisition of the Sagebrush Shares and the
issuance of WSMP Shares will be carefully prepared by WSMP with the
cooperation of its legal and accounting advisors, and Sagebrush. The
Registration Statement shall be in such form as shall comply in all
material respects with the Securities Act of 1933, as amended (the
"Act"), and shall, as amended, and when the same becomes effective,
conform fully to the requirements of the Act. No filing will be made
with the SEC to which WSMP or its counsel have reasonable objections.
WSMP will comply with the applicable Blue Sky requirements.
Following your signature, the parties will cause their respective
officers, employees, counsel, agents, accountants, and other representatives
working on the Transaction to cooperate with each other with respect to the
Transaction until the Transaction is consummated or negotiations with respect
thereto are terminated.
Following your signature, until the Transaction is consummated or
negotiations with respect thereto are terminated, each party will afford to
the officers, employees, counsel, agents, investment bankers, accountants, and
other representatives of the other party working on the Transaction and
lenders and prospective lenders of each party free and full access to its
restaurants, properties, books and records, will permit them to make extracts
from and copies of such books and records, and will from time to time furnish
them such additional financial and operating data and other information as its
financial condition, results of operations, business, properties, assets,
liabilities, or future prospects as they from time to time may request. Each
party will cause its independent certified public accountants, Deloitte and
Touche, LLP ("Deloitte") to make available to the other party the work papers
relating to any audit of its financial statements. Each party will allow the
other party to do any environmental testing or other physical examinations of
assets and properties that are reasonable and necessary for its due diligence
review.
Each party shall insure that all confidential information which such
party or any of its respective officers, directors, employees, counsel,
agents, investment bankers, or accountants and, in case of WSMP, its lenders,
or prospective lenders may now possess or may hereafter create or obtain
relating to the financial condition, results of operations, business,
properties, assets, liabilities, or future prospects of the other party, any
affiliate of the other party, or any customer or supplier of such other party
or any such affiliate shall not be published, disclosed, or made accessible by
any of them to any other person or entity at any time or used by any of them,
in each case without the prior written consent of the other party; provided,
however, that the restrictions of this sentence shall not apply (a) as may
otherwise be required by law, (b) as may be necessary or appropriate in
connection with the enforcement of this Agreement, (c) to the extent such
information shall have otherwise become publicly available, or (d) as to WSMP,
to disclosure by or on its behalf to lenders, or prospective lenders or to
others whose consent may be required or desirable in connection with obtaining
the financing or consents which are required or desirable to consummate the
Transaction. Each party shall, and shall cause all of such other persons and
entities who received confidential data from it to, deliver to the other party
all tangible evidence of such confidential information to which the
restrictions of the foregoing sentence apply at such time as negotiations with
respect to the Transaction are terminated before the parties enter into any
formal agreement as contemplated by this letter of intent.
It is understood that this is a letter of intent only and while the
parties hereto agree in principle to the contents hereof and agree to proceed
in good faith to work out the details of the Transaction, neither of them
shall have any legal obligations to the other as a result of this letter
(other than those obligations contained in this paragraph or the preceding
paragraph of this letter, and the obligations contained in the preceding
paragraph and the last sentence of this paragraph shall continue to apply
after negotiations with respect to the Transaction are terminated).
Accordingly, except as set forth in the preceding sentence, this letter does
not constitute a binding agreement nor does it constitute an agreement to
enter an agreement and the terms hereof are subject to the execution and
delivery of formal agreements. This letter may not be assigned by either of
the parties hereto. Neither party shall be responsible for any of the other's
expenses in connection with the negotiations, documents, or transactions
contemplated hereby.
If this letter accurately reflects our understanding, please so indicate
by signing the original and duplicate of this letter, and returning a full
executed copy to me, so that we can promptly commence work on the formal
documents relating to the Transaction.
Very truly yours,
WSMP, INC.
BY: /s/ Matthew Hollifield
Accepted and agreed to
September 25, 1997.
SAGEBRUSH, INC.
BY: /s/ Charles F. Connor, Jr.
EXHIBIT 99.1
WSMP, Sagebrush Sign Letter of Intent For WSMP To Acquire Sagebrush
CLAREMONT, NC (SEPTEMBER 26, 1997) --- WSMP, Inc., (Nasdaq: WSMP), and
Sagebrush, Inc. (Nasdaq: SAGE), have signed a letter of intent to pursue WSMP's
acquisition of Sagebrush in a stock for stock merger of the two North
Carolina-based companies.
The pooling of interests transaction is subject to various conditions
including the approval of Sagebrush directors and shareholders. WSMP's board
of directors approved the proposed transaction in a special meeting Thursday.
This letter of intent anticipates that WSMP will issue new shares of
common stock to Sagebrush shareholders and that the combining of the two
companies will be a pooling of interest for financial statement purposes.
This letter of intent was jointly announced today by Charles F. Connor, Jr.,
chairman of the board of Sagebrush; L. Dent Miller, president and chief
executive officer of Sagebrush; James C. Richardson, Jr., vice chairman and
chief executive officer of WSMP; and David R. Clark, president and chief
operating officer of WSMP.
Sagebrush owns and operates 31 Texas-style steakhouse restaurants in
North Carolina, South Carolina, Virginia and Tennessee.
WSMP is comprised of a restaurant division and a variety of food
processing operations. Its restaurant operations include 34 company-owned and
47 franchised restaurants, with a majority of these being Western Steer(R)
Steaks, Buffet and Bakery restaurants, Prime Sirloin(R) Buffet, Bakery and
Steaks restaurants, and Bennett's(TM) Smokehouse and Saloon restaurants.
In its Mom's' Pop's(R) food processing operations, WSMP has the capacity to
produce more than four million microwaveable sandwiches per week in its
Claremont facility. It also produces packaged, refrigerated meats,
vegetables, desserts and other items targeted for the Home Meal Replacement
market. And WSMP is one of the largest country ham producers in the nation.
CONTACT:
David R. Clark, President and Chief Operating Officer, WSMP, Inc.,(704)459-7626
L. Dent Miller, President and Chief Executive Officer, Sagebrush, Inc.
(704)459-0821
EXHIBIT 99.2
WSMP, Sagebrush Stock For Stock
Merger Exchange Rate Announced
CLAREMONT, NC (SEPTEMBER 26, 1997) --- WSMP, Inc.,(Nasdaq: WSMP),
and Sagebrush, Inc. (Nasdaq: SAGE), have announced the exchange rate
established in a letter of intent to pursue WSMP's acquisition of Sagebrush in
a stock for stock merger.
Execution of the letter of intent was announced earlier today and it
anticipates that WSMP will issue new shares of common stock to Sagebrush
shareholders. The proposed exchange ratio is .3214 shares of WSMP common
stock for each share of Sagebrush common stock. The proposed pooling of
interests transaction is subject to various conditions including the approval
of Sagebrush directors and shareholders.
CONTACT:
David R. Clark, President and Chief Operating Officer, WSMP, Inc.(704)459-7626
L. Dent Miller, President and Chief Operating Officer, Sagebrush, Inc.
(704)459-0821
