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
WHITMAN CORPORATION
(Exact name of registrant as specified in its charter)
Date of Report (Date of earliest event reported):
May 20, 1999
Delaware
(State or other jurisdiction of incorporation)
333-76549 13-6167838
(Commission File No.) (IRS Employer Identification No.)
3501 Algonquin Road 60008
Rolling Meadows, Illinois (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code:
(847) 818-5000
Heartland Territories Holdings, Inc.
(Former name or Former Address, if changed since last report)
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Item 2. ACQUISITION OR DISPOSITION OF ASSETS.
On May 20, 1999, pursuant to the Amended and Restated
Contribution and Merger Agreement (the "Merger Agreement"), dated as of
March 18, 1999, among Whitman Corporation ("Old Whitman"), PepsiCo, Inc.
("PepsiCo") and Heartland Territories Holdings, Inc. ("New Whitman"), Old
Whitman was merged with and into New Whitman, with New Whitman as the surviving
corporation and with New Whitman acquiring all assets of Old Whitman.
Simultaneously with the merger, the name of Heartland Territories Holdings,
Inc., defined herein as "New Whitman", was changed to Whitman Corporation. Under
the terms of the Merger Agreement, each share of Old Whitman common stock was
exchanged for one share of New Whitman common stock, with a total of
approximately 88 million shares of New Whitman common stock issued to former
holders of Old Whitman common stock. In addition, up to approximately 11.5
million shares of New Whitman common stock may be issued in the future upon
exercise of options granted under Old Whitman's stock incentive plans. PepsiCo,
as the holder of 54.0 million shares of New Whitman common stock and 794,115
shares of Old Whitman common stock prior to the merger, now holds 54,794,115
shares of New Whitman common stock, representing approximately 38.7% of the New
Whitman common stock currently outstanding.
New Whitman's Registration Statement on Form S-4 (Registration
No. 333-76549), which was declared effective by the Securities and Exchange
Commission on April 19, 1999 (the "Registration Statement"), and which is hereby
incorporated by reference herein, sets forth certain information regarding the
merger, Old Whitman, PepsiCo and New Whitman, including, but not limited to, a
description of the assets involved, the nature and amount of consideration paid,
the method used for determining the amount of such consideration, the nature of
any material relationships between PepsiCo and Old Whitman or any officer or
director of Old Whitman or any associate of any such officer or director, the
nature of the business of Old Whitman and PepsiCo and the intended structure and
operation of the company created in the merger.
The press release announcing the closing of the merger is
filed herewith as Exhibit 99.1 and is hereby incorporated herein by reference.
ITEM 5. OTHER EVENTS.
On May 20, 1999, the Board of Directors of New Whitman
declared a dividend of one preferred share purchase right (a "Right") for each
outstanding share of common stock, par value $0.01 per share (the "Common
Shares"), of New Whitman. The dividend is payable on June 11, 1999, (the "Record
Date") to the stockholders of record on that date. Each Right entitles the
registered holder to purchase from New Whitman one one-hundredth of a share of
Series A Junior Participating Preferred Stock, par value $0.01 per share (the
"Preferred Shares"), of New Whitman at a price of $61.25 per one one-hundredth
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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 New Whitman and First Chicago Trust Company of New
York, as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (subject
to certain exceptions) (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 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 such 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 certificates with a copy
of a Summary of Rights attached thereto.
The Rights Agreement provides that, until the Distribution
Date, 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 incorporating the Rights
Agreement by reference. Until the Distribution 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 Distribution Date.
The Rights will expire on May 20, 2009 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed by
New Whitman, in each case, as described below.
The Purchase Price payable, and the number of Preferred Shares
or other securities or property issuable, upon exercise of the Rights are
subject to adjustment from time to time to prevent dilution (i) in the event of
a stock dividend on, or a subdivision, combination or reclassification of, the
Preferred Shares, (ii) upon the grant to holders of the Preferred Shares of
certain rights or warrants to subscribe for or purchase Preferred Shares at a
price, or securities convertible into Preferred Shares with a conversion price,
less than the then current market price of the Preferred Shares or (iii) upon
the distribution to holders of
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the Preferred Shares of evidences of indebtedness or assets (excluding regular
periodic cash dividends paid out of earnings or retained earnings or dividends
payable in Preferred Shares) or of subscription rights or warrants (other than
those referred to above).
The number of outstanding Rights and the number of one
one-hundredths of a Preferred Share issuable upon exercise of each Right are
also subject to adjustment in the event of a stock split of the Common Shares or
a stock dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
Preferred Shares purchasable upon exercise of the Rights are
not redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 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 $100 per share plus an amount equal to
accrued and unpaid dividends thereon but will be entitled to an aggregate
payment of 100 times the payment made per Common Share. Each Preferred Share
will have 100 votes, 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 per Common Share. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Shares' dividend,
liquidation and voting rights, the value of the one one-hundredth interest in a
Preferred Share purchasable upon exercise of each Right hold approximate the
value of one Common Share.
In the event that, after a person or a group has become an
Acquiring Person, New Whitman is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold or transferred (subject to certain exceptions), 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 (i) any person becomes an Acquiring Person
or (ii) during such time as there is an Acquiring Person, there shall be a
reclassification of securities or a recapitalization or reorganization of New
Whitman or other transaction or series of transactions involving New Whitman
which has the effect of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities of New Whitman or any
of its subsidiaries beneficially owned by the 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.
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At any time after the acquisition by a person or group of
affiliated or associated persons of beneficial ownership of 15% or more of the
outstanding Common Shares and prior to the acquisition by such person or group
of 50% or more of the outstanding Common Shares, the Board of Directors of New
Whitman may exchange the Rights (other than Rights owned by such person or group
which 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 Purchase Price
will be required until cumulative adjustments require an adjustment of at least
1% of 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 New Whitman, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
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 New Whitman may redeem the
Rights in whole, but not in part, at a price of $0.01 per Right (the "Redemption
Price"). The redemption of the Rights may be made effective at such time on such
basis and with such conditions 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 New Whitman 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 New Whitman 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 New Whitman, including, without limitation,
the right to vote or to receive dividends.
The Rights Agreement, dated as of May 20, 1999, between New
Whitman and First Chicago Trust Company of New York, as Rights Agent, specifying
the terms of the Rights and the press release announcing the declaration of the
Rights are incorporated herein by reference as Exhibits 4 and 99 hereto,
respectively. The foregoing description of the Rights is qualified in its
entirety by reference to such exhibits.
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Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Pursuant to General Instruction B.3 of Form 8-K, the financial
statements of Old Whitman have not been included herein. Those
financial statements, which were previously reported in Old
Whitman's Annual Report on Form 10-K for the fiscal year ended
January 2, 1999, and Amendment No.1 to such Form 10-K filed on
April 16, 1999, have been incorporated by reference in New
Whitman's Registration Statement on Form S-4 filed with the
Securities and Exchange Commission on April 19, 1999 (Reg. No.
333-76549).
(b) Pursuant to General Instruction B.3 of Form 8-K, the pro forma
financial information has not been included herein. The pro
forma financial information of New Whitman and Old Whitman was
previously reported in New Whitman's Registration Statement on
Form S-4 filed with the Securities and Exchange Commission on
April 19, 1999.
(c) Exhibits.
4. Rights Agreement, dated as of May 20, 1999, between
Whitman Corporation and First Chicago Trust Company
of New York which includes the form of Certificate of
Designations of Series A Junior Participating
Preferred Stock of Whitman Corporation setting forth
the terms of the Series A Junior Participating
Preferred Stock, par value $0.01 per share, as
Exhibit A, the form of Right Certificate as Exhibit B
and the Summary of Rights to Purchase Preferred
Shares as Exhibit C. (Incorporated by reference to Form
8-A filed May 20, 1999)
99.1 Text of Press Release dated May 20, 1999 relating to
the closing of the merger and the authorization of the
rights.
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SIGNATURE
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.
Dated: May 20, 1999
WHITMAN CORPORATION
By: /s/ William B. Moore
-----------------------------
Name: William B. Moore
Title: Senior Vice President, Secretary
and General Counsel
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EXHIBIT LIST
No.
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4. Rights Agreement, dated as of May 20, 1999, between Whitman
Corporation and First Chicago Trust Company of New York which
includes the form of Certificate of Designations of Series A
Junior Participating Preferred Stock of Whitman Corporation
setting forth the terms of the Series A Junior Participating
Preferred Stock, par value $0.01 per share, as Exhibit A, the
form of Right Certificate as Exhibit B and the Summary of Rights
to Purchase Preferred Shares as Exhibit C. (Incorporated by
reference to Form 8-A filed May 20, 1999)
99.1 Text of Press Release dated May 20, 1999 relating to the closing
of the merger and the authorization of the Rights.
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NEWS RELEASE
WHITMAN
Whitman Corporation
3501 Algonquin Road
Rolling Meadows, IL. 60008
(847) 818-5000
FOR IMMEDIATE RELEASE
SHAREHOLDERS APPROVE TRANSACTION WITH PEPSICO
---------------------------------------------
BOARD NAMED
-----------
DIVIDEND DECLARED
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CHICAGO (May 20, 1999) -- Whitman Corporation announced today
that at a special shareholder meeting held in New York City, shareholders
approved the merger of Whitman and a subsidiary of PepsiCo Inc., which
establishes a new business relationship with PepsiCo. As a result of the merger,
PepsiCo will own approximately 39 percent of Whitman and the public shareholders
of Whitman will own the remaining 61 percent.
Under the terms of the previously announced proposal, Whitman
has acquired Pepsi franchises in the central part of the United States, as well
as PepsiCo's operations in Hungary, Czech Republic, the Republic of Slovakia,
and the balance of Poland. In turn, Whitman previously transferred to PepsiCo
its operations in Princeton, W.V. and Marion, VA., along with its operations in
the St. Petersburg area of Russia, and the rights to distribute Pepsi-Cola
products in Belarus. Whitman also reacquired PepsiCo's 20 percent minority
interest in Pepsi-Cola General Bottlers.
With this transaction, Whitman's revenues will increase by
approximately 40 percent on a pro forma basis. The company will account for
approximately 17 percent of Pepsi's case volume in the United States.
-more-
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Whitman's new Board will have 11 directors. They include
Whitman's nine current directors: Bruce S. Chelberg, Herbert M. Baum, Richard G.
Cline, Pierre S. du Pont, Archie R. Dykes, Charles W. Gaillard, Jarobin Gilbert,
Jr., Victoria B. Jackson, and Charles S. Locke, together with Karl M. von der
Heyden, PepsiCo's Vice Chairman, and Robert F. Sharpe, Jr., PepsiCo's Senior
Vice President, Public Affairs and General Counsel.
Following the shareholder meeting, the Board declared a
dividend of one cent per share of common stock, payable July 1, 1999 to
shareholders of record on June 11, 1999, for an implied annual rate of four
cents per share.
The Board also adopted a new Rights Plan, under which each
shareholder will acquire one preferred share purchase right for each share of
common stock held on June 11, 1999.
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