SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
FORM 8-K
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
July 11, 1996
Date of Report (Date of earliest event reported)
WALGREEN CO.
(Exact name of registrant as specified in its charter)
Illinois 1-604 36-1924025
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
200 Wilmot Road
Deerfield, Illinois 60015
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, including area code: (847) 940-2500
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Item 5. Other Events.
On July 10, 1996, the Board of Directors of Wal-
green Co. (the "Company") declared a dividend of one pre-
ferred share purchase right (a "Right") for each outstanding
share of common stock, par value $.3125 per share (the "Com-
mon Shares"), of the Company. The dividend is payable on
August 21, 1996 (the "Record Date") to the stockholders of
record on that date. Each Right entitles the registered
holder to purchase from the Company one one-hundredth of a
share of Junior Participating Preferred Stock, Series A, par
value $.25 per share (the "Preferred Shares"), of the Com-
pany at a price of $150 per one one-hundredth of a Preferred
Share (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a
Rights Agreement (the "Rights Agreement") between the
Company and Harris Trust and Savings Bank, as Rights Agent
(the "Rights Agent").
The Rights replace preferred share purchase rights
which are currently attached to Common Shares (the "Old
Rights"), which expire on August 21, 1996. The Old Rights
were issued pursuant to a Rights Agreement, dated as of July
9, 1986, and amended as of October 18, 1988, between the
Company and the Rights Agent (the "Old Rights Plan").
Subsequent to August 21, 1996, the Old Rights Plan will be
of no effect, and no rights will be outstanding under it.
Until the earlier to occur of (i) 10 days
following a public announcement that a person or group of
affiliated or associated persons (an "Acquiring Person")
have acquired beneficial ownership of 15% or more of the
outstanding Common Shares or (ii) 10 business days (or such
later date as may be determined by action of the Board of
Directors prior to such time as any person or group of
affiliated persons becomes an Acquiring Person) following
the commencement of, or announcement of an intention to
make, a tender offer or exchange offer the consummation of
which would result in the beneficial ownership by a person
or group of 15% or more of the outstanding Common Shares
(the earlier of such dates being called the "Distribution
Date"), the Rights will be evidenced, with respect to any of
the Common Share certificates outstanding as of the Record
Date, by such Common Share certificate with a copy of a
summary of rights (the "Summary of Rights") attached
thereto.
2
The Rights Agreement provides that, until the Dis-
tribution Date (or earlier redemption or expiration of the
Rights), the Rights will be transferred with and only with
the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share
certificates issued after the Record Date upon transfer or
new issuance of Common Shares will contain a notation incor-
porating the Rights Agreement by reference. Until the Dis-
tribution Date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even
without such notation or a copy of the Summary of Rights
being attached thereto, will also constitute the transfer of
the Rights associated with the Common Shares represented by
such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the
Rights ("Right Certificates") will be mailed to holders of
record of the Common Shares as of the close of business on
the Distribution Date and such separate Right Certificates
alone will evidence the Rights.
The Rights are not exercisable until the Distribu-
tion Date. The Rights will expire on August 21, 2006 (the
"Final Expiration Date"), unless the Final Expiration Date
is extended or unless the Rights are earlier redeemed or ex-
changed by the Company, in each case, as described below.
The Purchase Price payable, and the number of Pre-
ferred Shares or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time
to time to prevent dilution.
Preferred Shares purchasable upon exercise of the
Rights will not be redeemable. Each Preferred Share will be
entitled to a minimum preferential quarterly dividend
payment of $.0625 per share but will be entitled to an
aggregate dividend of 100 times the dividend declared per
Common Share. In the event of liquidation, the holders of
the Preferred Shares will be entitled to a minimum
preferential liquidation payment of $25 per share but will
be entitled to an aggregate payment of 100 times the payment
made per Common Share. Each Preferred Share will have 1
vote, voting together with the Common Shares. Finally, in
the event of any merger, consolidation or other transaction
in which Common Shares are exchanged, each Preferred Share
will be entitled to receive 100 times the amount received
3
per Common Share. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Shares'
dividend and liquidation rights, the value of the one one-
hundredth interest in a Preferred Share purchasable upon
exercise of each Right should approximate the value of one
Common Share.
In the event that the Company is acquired in a
merger or other business combination transaction or 50% or
more of its consolidated assets or earning power are sold
after a person or group has become an Acquiring Person,
proper provision will be made so that each holder of a Right
will thereafter have the right to receive, upon the exercise
thereof at the then current exercise price of the Right,
that number of shares of common stock of the acquiring
company which at the time of such transaction will have a
market value of two times the exercise price of the Right.
In the event that any person or group of affiliated or
associated persons becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person
(which will thereafter be void), will thereafter have the
right to receive upon exercise that number of Common Shares
having a market value of two times the exercise price of the
Right.
At any time after any person or group becomes an
Acquiring Person and prior to the acquisition by such person
or group of 50% or more of the outstanding Common Shares,
the Board of Directors of the Company may exchange the
Rights (other than Rights owned by such person or group
which will have become void), in whole or in part, at an
exchange ratio of one Common Share per Right (subject to
adjustment).
With certain exceptions, no adjustment in the Pur-
chase Price will be required until cumulative adjustments
require an adjustment of at least 1% in such Purchase Price.
No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth
of a Preferred Share, which may, at the election of the Com-
pany, be evidenced by depositary receipts) and in lieu
thereof, an adjustment in cash will be made based on the
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market price of the Preferred Shares on the last trading day
prior to the date of exercise.
At any time prior to the acquisition by a person
or group of affiliated or associated persons of beneficial
ownership of 15% or more of the outstanding Common Shares,
the Board of Directors of the Company may redeem the Rights
in whole, but not in part, at a price of $.01 per Right (the
"Redemption Price"). The redemption of the Rights may be
made effective at such time on such basis with such condi-
tions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the
Redemption Price.
The terms of the Rights may be amended by the
Board of Directors of the Company without the consent of the
holders of the Rights, including an amendment to lower
certain thresholds described above to not less than the
greater of (i) the sum of .001% and the largest percentage
of the outstanding Common Shares then known to the Company
to be beneficially owned by any person or group of
affiliated or associated persons and (ii) 10%, except that
from and after such time as any person or group of
affiliated or associated persons becomes an Acquiring Person
no such amendment may adversely affect the interests of the
holders of the Rights.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to re-
ceive dividends.
The Rights have certain anti-takeover effects.
The Rights will cause substantial dilution to a person or
group that attempts to acquire the Company on terms not
approved by the Company's Board of Directors, except
pursuant to an offer conditioned on a substantial number of
Rights being acquired. The Rights should not interfere with
any merger or other business combination approved by the
Board of Directors since the Rights may be redeemed by the
Company at the Redemption Price prior to the time that a
person or group has acquired beneficial ownership of 15% or
more of the Common Shares.
5
The Rights Agreement and the press release
announcing the declaration of the Rights are attached hereto
as exhibits and are incorporated herein by reference. The
foregoing description of the Rights is qualified in its
entirety by reference to such exhibits.
Item 6. Exhibits.
1. Rights Agreement, dated as of July 10,
1996, between Walgreen Co. and Harris
Trust and Savings Bank, including the
form of Right Certificate as Exhibit A
and the Summary of Rights to Purchase
Preferred Shares as Exhibit B (incorpo-
rated herein by reference to Exhibit 1 to
the Company's Registration on Form 8-A
filed July 11, 1996 (File No. 1-604))
2. Press release dated July 10, 1996
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SIGNATURE
Pursuant to the requirements of Section 12 of the
Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the under-
signed, thereunto duly authorized.
Dated: July 11, 1996
WALGREEN CO.
By Julian A. Oettinger________
Julian A. Oettinger
Vice President, Secretary
and General Counsel
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EXHIBIT LIST
Page No.
1. Rights Agreement, dated as of July 10,
1996, between Walgreen Co. and Harris
Trust and Savings Bank, including the form
of Right Certificate as Exhibit A and the
Summary of Rights to Purchase Preferred
Shares as Exhibit B (incorporated herein
by reference to Exhibit 1 to the Company's
Registration on Form 8-A filed July 11,
1996 (File No. 1-604))
2. Press release dated July 10, 1996
8
Contact: Michael Polzin
(847) 914-2925
July 10, 1996 NYSE: WAG
FOR IMMEDIATE RELEASE INTERNET: http://www.walgreens.com
WALGREEN CO. ANNOUNCES REGULAR QUARTERLY DIVIDEND;
RENEWS PREFERRED SHARE PURCHASE RIGHTS PLAN
AND DECLARES DIVIDEND OF RIGHTS
DEERFIELD, Ill., July 10, 1996 -- The Board of Directors of Walgreen Co.
today declared a regular quarterly dividend of 11 cents per share,
payable Sept. 12, 1996, to shareowners of record Aug. 21, 1996.
Walgreens, the nation's leading drugstore chain, earlier reported sales
for the third quarter ended May 31, 1996, of $2.99 billion, up 14.2
percent from a year earlier, and net earnings of $91.6 million, up 15.9
percent from a year ago.
Also today, the Board of Directors declared a dividend distribution of
one Preferred Share Purchase Right on each outstanding share of Walgreen
common stock. The dividend distribution will be made on Aug. 21, 1996,
to the shareholders of record on that date. The rights issued in the
dividend declared today replace the rights currently attached to all
outstanding shares of Walgreen common stock, which expire on Aug. 21,
1996.
Charles R. Walgreen III, chairman of Walgreen Co., said, "We believe
that maintenance of a rights plan continues to be the best available
means of assuring that all of Walgreens shareholders receive fair and
equal treatment in the event of any proposed takeover of the company.
The rights are intended to enable all Walgreen shareholders to realize
the long-term value of their investment in the company. They will not
prevent a takeover, but should encourage anyone seeking to acquire the
company to negotiate with the board prior to attempting a takeover."
The rights will expire on Aug. 21, 2006. The rights distribution is not
taxable to shareholders. A summary of the rights will be sent to
shareholders.
Walgreen Co. is the nation's largest drugstore chain with 1995 sales of
$10.4 billion. The company operates 2,159 stores in 32 states and Puerto
Rico and is opening more than 200 stores a year. Walgreens plans to
operate 3,000 stores by the year 2000.
