SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
WHITMAN CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 13-6167838
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(State of incorporation or organization) (IRS Employer
Identification No.)
3501 Algonquin Road
Rolling Meadows, Illinois 60008
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(Address of principal executive offices) (Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class is to be registered
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Preferred Share Purchase Rights Chicago Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
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(Title of Class)
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Item 1. Description of Securities To Be Registered.
On May 20, 1999, the Board of Directors of Whitman Corporation
(the "Company") 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 the Company. 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 the Company one one-hundredth of
a share of Series A Junior Participating Preferred Stock, par value $0.01 per
share (the "Preferred Shares"), of the Company at a price of $61.25 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 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
the Company, 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
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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 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, 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 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 the
Company or other transaction or series of transactions involving the Company
which has the effect of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities of the Company 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
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upon exercise that number of Common Shares having a market value of two times
the exercise price of the Right.
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 the
Company 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 the Company, 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 the Company 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 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 receive dividends.
The Rights Agreement, dated as of May 20, 1999, between the
Company 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 2. Exhibits.
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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.
99. Press Release issued by the Company on May 20, 1999.
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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 registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized.
Dated: May 20, 1999
WHITMAN CORPORATION
By /s/ William B. Moore
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Name: William B. Moore
Title: Senior Vice President,
Secretary and General Counsel
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EXHIBIT LIST
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.
99. Press Release issued by the Company on May 20, 1999.
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WHITMAN CORPORATION
and
FIRST CHICAGO TRUST COMPANY OF NEW YORK
Rights Agent
Rights Agreement
Dated as of May 20, 1999
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions..............................................1
Section 2. Appointment of Rights Agent......................................6
Section 3. Issue of Right Certificates......................................7
Section 4. Form of Certificates............................................10
Section 5. Countersignature and Registration...............................10
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates............................................11
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights........................................................13
Section 8. Cancellation and Destruction of Right Certificates..............14
Section 9. Availability of Preferred Shares................................15
Section 10. Preferred Shares Record
Date..........................................................16
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights..............................................16
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares........................................................27
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power..............................................27
Section 14. Fractional Rights and Fractional Shares.........................29
Section 15. Rights of Action................................................31
Section 16. Agreement of Right Holders......................................32
Section 17. Right Certificate Holder Not Deemed a Stockholder...............33
Section 18. Concerning the Rights Agent.....................................33
Section 19. Merger or Consolidation or Change of Name of Rights Agent.......34
Section 20. Duties of Rights Agent..........................................35
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Page
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Section 21. Change of Rights Agent..........................................38
Section 22. Issuance of New Right Certificates..............................39
Section 23. Redemption......................................................39
Section 24. Exchange........................................................41
Section 25. Notice of Certain Events........................................43
Section 26. Notices.........................................................44
Section 27. Supplements and Amendments......................................45
Section 28. Successors......................................................46
Section 29. Benefits of this Agreement......................................46
Section 30. Severability....................................................46
Section 31. Governing Law...................................................46
Section 32. Counterparts....................................................47
Section 33. Descriptive Headings............................................47
Signatures................................................................. 52
Exhibit A - Form of Certificate of Designations
Exhibit B - Form of Right Certificate
Exhibit C - Summary of Rights to Purchase Preferred Shares
Exhibit D - Shareholder Agreement
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RIGHTS AGREEMENT
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Agreement, dated as of May 20, 1999, between Whitman Corporation, a
Delaware corporation (the "Company"), and First Chicago Trust Company of New
York (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each Common Share
(as hereinafter defined) of the Company outstanding on June 11, 1999 (the
"Record Date"), each Right representing the right to purchase one one-hundredth
of a Preferred Share (as hereinafter defined), upon the terms and subject to the
conditions herein set forth, and has further authorized and directed the
issuance of one Right with respect to each Common Share that shall become
outstanding between the Record Date and the earliest of the Distribution Date,
the Redemption Date and the Final Expiration Date (as such terms are hereinafter
defined).
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates and Associates
(as such terms is hereinafter defined) of such Person, shall be the Beneficial
Owner (as such term is hereinafter defined) of 15% or more of the Common Shares
of the Company then outstanding, but shall not include the Company, any
Subsidiary (as such term is hereinafter defined) of the Company, any employee
benefit
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plan or employee stock ownership plan of the Company or any Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to the terms of any
such plan. Notwithstanding the foregoing, no Person shall become an "Acquiring
Person" as the result of an acquisition of Common Shares by the Company which,
by reducing the number of shares outstanding, increases the proportionate number
of shares beneficially owned by such Person to 15% or more of the Common Shares
of the Company then outstanding; provided, however, that if a Person shall
become the Beneficial Owner of 15% or more of the Common Shares of the Company
then outstanding by reason of share purchases by the Company and shall, after
such share purchases by the Company, become the Beneficial Owner of any
additional Common Shares of the Company, then such Person shall be deemed to be
an "Acquiring Person". Notwithstanding the foregoing, if the Board of Directors
of the Company determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of Common Shares so that such Person
would no longer be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement. Notwithstanding anything
in this Agreement to the contrary, neither PepsiCo nor any of its Affiliates
shall be deemed to be an Acquiring Person solely by virtue of (i) the
consummation of the Merger and the transactions contemplated thereby, or (ii)
the acquisition of Common Shares pursuant to a Permitted Acquisition, but
PepsiCo shall be deemed to be an Acquiring Person if it or any of its Affiliates
becomes the Beneficial Owner of additional Common Shares other than pursuant to
a Permitted Acquisition. Notwithstanding anything in this Agreement to the
contrary, a Person who acquires Common Shares from PepsiCo or any of its
Affiliates shall
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not be deemed to be an Acquiring Person if such transfer is effected in
compliance with Section 3.4 of the Shareholder Agreement, but such Person shall
be deemed to be an Acquiring Person by reason of such transfer if such Person or
any of its Affiliates acquires the Beneficial Ownership of additional Common
Shares other than as expressly permitted under the Shareholder Agreement and
such Person would otherwise be deemed to be an Acquiring Person pursuant to the
first sentence of this paragraph (a) as a result of such acquisition.
(b) "Affiliate" and "Associate" have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as amended (the "Exchange Act") as in effect on
the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be
deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the Beneficial Owner of,
or to beneficially own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of
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such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; or (B) the right
to vote pursuant to any agreement, arrangement or understanding;
provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises solely
from a revocable proxy or consent given to such Person in response
to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to
Section 1(c)(ii)(B)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of
Beneficial Ownership to the contrary, the phrase "then outstanding,"
when used with reference to a Person's Beneficial Ownership of
securities of the Company, shall mean the number of such securities
then issued and outstanding together with the number of
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such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in New York are authorized or
obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M., New
York time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company shall
mean the shares of common stock, par value $0.01 per share, of the Company.
"Common Shares" when used with reference to any Person other than the Company
shall mean the capital stock (or equity interest) with the greatest voting power
of such other Person or, if such other Person is a Subsidiary of another Person,
the Person or Persons which ultimately control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in Section
3 hereof.
(h) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(i) "Merger" shall mean the merger of Old Whitman with and into the
Company pursuant to the Amended and Restated Contribution and Merger Agreement,
dated as of March 18, 1999, by and among PepsiCo, the Company and Old Whitman.
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(j) "Old Whitman" shall mean the former Whitman Corporation, a
Delaware corporation merged with and into the Company as of May 20, 1999.
(k) "PepsiCo" shall mean PepsiCo, Inc., a North Carolina
Corporation.
(l) "Permitted Acquisition" shall have the meaning set forth in
Section 1.1 of the Shareholder Agreement.
(m) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(n) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, par value $0.01 per share, of the Company having
the rights and preferences set forth in the Form of Certificate of Designations
attached to this Agreement as Exhibit A.
(o) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(p) "Shares Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person that an Acquiring Person has
become such.
(q) "Shareholder Agreement" shall mean the Shareholder Agreement,
dated as of May 20, 1999, by and between the Company and PepsiCo, attached
hereto as Exhibit D.
(r) "Subsidiary" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interest is owned, directly or indirectly, by such Person.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company and the holders of the Rights
(who, in accordance with Section 3 hereof, shall prior to the Distribution Date
also be the holders of the Common
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Shares) in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable.
Section 3. Issue of Right Certificates. (a) Until the earlier of
(i) the tenth day after the Shares Acquisition Date or (ii) the tenth Business
Day (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) after the date of
the commencement by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan or employee stock ownership plan of the
Company or of any Subsidiary of the Company or any entity holding Common Shares
for or pursuant to the terms of any such plan, and other than PepsiCo or any of
its Affiliates in connection with a Permitted Acquisition) of, or of the first
public announcement of the intention of any Person (other than the Company, any
Subsidiary of the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares of the Company for
or pursuant to the terms of any such plan and other than PepsiCo or any of its
Affiliates in connection with a Permitted Acquisition) to commence, a tender or
exchange offer the consummation of which would result in any Person becoming the
Beneficial Owner of Common Shares aggregating 15% or more of the then
outstanding Common Shares (including any such date which is after the date of
this Agreement and prior to the issuance of the Rights; the earlier of such
dates being herein referred to as the "Distribution Date"), (x) the Rights will
be evidenced (subject to the provisions of Section 3(b) hereof) by the
certificates for Common Shares registered in the names of the holders thereof
(which certificates in each case shall also be deemed to be Right Certificates)
and not by separate Right Certificates, and (y) the right to re-
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ceive Right Certificates will be transferable only in connection with the
transfer of Common Shares. As soon as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send) by first-class, insured, postage-prepaid mail, to each record holder of
Common Shares as of the close of business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Right Certificate,
in substantially the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right for each Common Share so held. As of the Distribution Date,
the Rights will be evidenced solely by such Right Certificates. Notwithstanding
anything in this Agreement to the contrary, a Distribution Date shall not be
deemed to have occurred solely as a result of (i) the consummation of the Merger
and the transactions contemplated thereby, or (ii) the acquisition by PepsiCo or
its Affiliates of any Common Shares pursuant to a Permitted Acquisition.
Notwithstanding anything in this Agreement to the contrary, a Distribution Date
shall not be deemed to have occurred solely as a result of the acquisition by a
Person of Common Shares from PepsiCo or any of its Affiliates if such transfer
is effected in compliance with Section 3.4 of the Shareholder Agreement, but a
Distribution Date shall be deemed to have occurred if such Person or any of its
Affiliates acquires Beneficial Ownership of additional Common Shares other than
pursuant to a Permitted Acquisition and such Person and/or its Affiliates would
otherwise be deemed to be an Acquiring Person pursuant to the first sentence of
Section 1(a) as a result of such acquisition.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Preferred Shares, in
substantially the form of Exhibit C hereto (the "Summary of Rights"), by
first-class, postage-prepaid mail, to each record
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holder of Common Shares as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company. With respect to
certificates for Common Shares outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates registered
in the names of the holders thereof together with a copy of the Summary of
Rights attached thereto. Until the Distribution Date (or the earlier of the
Redemption Date or the Final Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding on the Record Date, with or without a
copy of the Summary of Rights attached thereto, shall also constitute the
transfer of the Rights associated with the Common Shares represented thereby.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in the last
sentence of this paragraph (c)) after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement between Whitman
Corporation and First Chicago Trust Company of New York, dated as of
May 20, 1999 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at
the principal executive offices of Whitman Corporation. Under
certain circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will no longer
be evidenced by this certificate. Whitman Corporation will mail to
the holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor. As
described in the Rights Agreement, Rights issued to any Person who
becomes an Acquiring Person (as defined in the Rights Agreement)
become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced
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by such certificates alone, and the surrender for transfer of any such
certificate shall also constitute the transfer of the Rights associated with the
Common Shares represented thereby. In the event that the Company purchases or
acquires any Common Shares after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Shares shall be deemed cancelled
and retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and
the forms of election to purchase Preferred Shares and of assignment to be
printed on the reverse thereof) shall be substantially the same as Exhibit B
hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any applicable rule or regulation of
any stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Section 22 hereof, the Right
Certificates shall entitle the holders thereof to purchase such number of one
one-hundredths of a Preferred Share as shall be set forth therein at the price
per one one-hundredth of a Preferred Share set forth therein (the "Purchase
Price"), but the number of such one one-hundredths of a Preferred Share and the
Purchase Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President, any of its Vice Presidents,
or its Treasurer, either manually or by facsimile signature,
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shall have affixed thereto the Company's seal or a facsimile thereof, and shall
be attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Right Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall have signed any of
the Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the individual who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf of the
Company by any individual who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Agreement any such
individual was not such an officer.
Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates, Certificate
numbers and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. Subject
to the provisions of Section 14 hereof, at any time after the Close of Business
on the Distribution Date, and at or prior to the Close of Business on the
earlier of the Redemption Date or the Final Expiration Date, any Right
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Certificate or Right Certificates (other than Right Certificates representing
Rights that have become void pursuant to Section 11(a)(ii) hereof or that have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a Preferred Share as the Right Certificate or Right Certificates surrendered
then entitled such holder to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Right Certificate or Right
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent. Thereupon the Rights Agent shall countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates, as the case
may be, as so requested. The Company may require payment of a sum sufficient to
cover any tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Right Certificates.
Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Company will make and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen, destroyed or
mutilated.
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Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein), in whole or in
part, at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at the principal office of the Rights Agent,
together with payment of the Purchase Price for each one one-hundredth of a
Preferred Share as to which the Rights are exercised, at or prior to the
earliest of (i) the Close of Business on May 20, 2009 (the "Final Expiration
Date"), (ii) the time at which the Rights are redeemed as provided in Section 23
hereof (the "Redemption Date"), or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-hundredth of a Preferred
Share purchasable pursuant to the exercise of a Right shall initially be $61.25,
and shall be subject to adjustment from time to time as provided in Sections 11
or 13 hereof and shall be payable in lawful money of the United States of
America in accordance with paragraph (c) below.
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the shares to be purchased and an amount equal
to any applicable transfer tax required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Company, the Rights Agent shall
thereupon promptly (i) (A) requisition from any transfer agent of the Preferred
Shares certificates for the number of Preferred Shares to be purchased and the
Company hereby irrevocably authorizes any such transfer agent to comply with all
such requests, or (B) requisition from the
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depositary agent depositary receipts representing such number of one
one-hundredths of a Preferred Share as are to be purchased (in which case
certificates for the Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) when appropriate, after receipt, deliver such cash to or upon
the order of the registered holder of such Right Certificate.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued Preferred Shares
or any Preferred Shares held in its treasury, the number of Preferred Shares
that will be sufficient to permit the exercise in full of all outstanding Rights
in accordance with this Section 7.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for can-
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cellation or in cancelled form, or, if surrendered to the Rights Agent, shall be
cancelled by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the exercise thereof.
The Rights Agent shall deliver all cancelled Right Certificates to the Company,
or shall, at the written request of the Company, destroy such cancelled Right
Certificates, and, in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Availability of Preferred Shares. The Company covenants
and agrees that it will take all such action as may be necessary to ensure that
all Preferred Shares delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such Preferred Shares (subject to payment of
the Purchase Price), be duly and validly authorized and issued and fully paid
and nonassessable shares.
The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any Preferred Shares upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in respect of
any transfer or delivery of Right Certificates to a Person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or to deliver
any certificates or depositary receipts for Preferred Shares upon the exercise
of any Rights until any such tax shall have been paid (any such tax being
payable by the
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holder of such Right Certificate at the time of surrender) or until it has been
established to the Company's reasonable satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each Person in whose name
any certificate for Preferred Shares is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the Preferred
Shares represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided, however, that, if the date of such surrender and payment is a date
upon which the Preferred Shares transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares transfer books of the Company are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled to any rights of a holder of Preferred Shares for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number of Preferred Shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) sub-
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divide the outstanding Preferred Shares, (C) combine the outstanding Preferred
Shares into a smaller number of Preferred Shares or (D) issue any shares of its
capital stock in a reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of shares of capital
stock issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such Right had
been exercised immediately prior to such date and at a time when the Preferred
Shares transfer books of the Company were open, he would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision,
combination or reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
consideration to be paid for one Preferred Share as is determined from time to
time by the Board of Directors of the Company.
(ii) Subject to Section 24 of this Agreement, in the event any
Person becomes an Acquiring Person, each holder of a Right shall thereafter have
a right to receive, upon exercise thereof at a price equal to the then current
Purchase Price multiplied by the number of one one-hundredths of a Preferred
Share for which a Right is then exercisable, in accordance with the terms of
this Agreement and in lieu of Preferred Shares, such number of Common Shares of
the Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable and
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dividing that product by (y) 50% of the then current per share market price of
the Company's Common Shares (determined pursuant to Section 11(d) hereof) on the
date of the occurrence of the earlier of the events described in clauses (A) and
(B) above. In the event that any Person shall become an Acquiring Person and the
Rights shall then be outstanding, the Company shall not take any action which
would eliminate or diminish the benefits intended to be afforded by the Rights.
From and after the occurrence of such event, any Rights that are
or were acquired or beneficially owned by any Acquiring Person (or any Associate
or Affiliate of such Acquiring Person) shall be void and any holder of such
Rights shall thereafter have no right to exercise such Rights under any
provision of this Agreement. No Right Certificate shall be issued pursuant to
Section 3 that represents Rights beneficially owned by an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof; no Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be void pursuant to the preceding sentence shall be
cancelled.
(iii) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to permit the
exercise in full of the Rights in accordance with the foregoing subparagraph
(ii), the Company shall take all such action as may be necessary to authorize
additional Common Shares for issuance upon exercise of the Rights. In the event
the Company shall, after good faith effort, be unable to take all such action as
may be necessary
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to authorize such additional Common Shares, the Company shall substitute, for
each Common Share that would otherwise be issuable upon exercise of a Right, a
number of Preferred Shares or fraction thereof such that the current per share
market price of one Preferred Share multiplied by such number or fraction is
equal to the current per share market price of one Common Share as of the date
of issuance of such Preferred Shares or fraction thereof.
(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("equivalent preferred
shares")) or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred share
(or having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the then current per
share market price of the Preferred Shares (as defined in Section 11(d)) on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the number of
Preferred Shares outstanding on such record date plus the number of Preferred
Shares which the aggregate offering price of the total number of Preferred
Shares and/or equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such current market price and the denominator of which shall be the
number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially
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convertible); provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the consideration to be paid
for one Preferred Share as is determined from time to time by the Board of
Directors of the Company. In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent and holders
of the Rights. Preferred Shares owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed and,
in the event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 11(b) hereof), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the then current per share market price of the Preferred Shares on such
record date, less the fair market value (as determined in good faith by the
Board of Directors of the Company, whose determination shall be described in a
statement filed with
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<PAGE>
the Rights Agent and shall be binding on the Rights Agent and holders of the
Rights) of the portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one
Preferred Share and the denominator of which shall be such current per share
market price of the Preferred Shares; provided, however, that in no event shall
the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company to be issued
upon exercise of one Right. Such adjustments shall be made successively whenever
such a record date is fixed; and in the event that such distribution is not so
made, the Purchase Price shall again be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
per share market price" of any security (a "Security" for the purpose of this
Section 11(d)(i)) on any date shall be deemed to be the average of the daily
closing prices per share of such Security for the 30 consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date; provided,
however, that, in the event that the current per share market price of the
Security is determined during a period following the announcement by the issuer
of such Security of (A) a dividend or distribution on such Security payable in
shares of such Security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security and prior to the
expiration of 30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of
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the closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the Security
is not listed or admitted to trading on the New York Stock Exchange, as reported
in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Security is listed or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc Automated Quotation System ("NASDAQ") or such other system then in
use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Security selected by the Board
of Directors of the Company. The term "Trading Day" shall mean a day on which
the principal national securities exchange on which the Security is listed or
admitted to trading is open for the transaction of business or, if the Security
is not listed or admitted to trading on any national securities exchange, a
Business Day.
(ii) For the purpose of any computation hereunder, the "current
per share market price" of the Preferred Shares shall be determined in
accordance with the method set forth in Section 11(d)(i). If the Preferred
Shares are not publicly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the current per share market
price of the Common Shares as determined pursuant to Section 11(d)(i) hereof
(appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof), multiplied by one hundred. If
neither the Common Shares nor the Preferred Shares are
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publicly held or so listed or traded, "current per share market price" shall
mean the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one one-millionth of a
Preferred Share or one ten-thousandth of any other share or security as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii)
the date of the expiration of the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred Shares,
thereafter the number of such other shares so receivable upon exercise of any
Right shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Shares contained in Section 11(a) through (c), inclusive, and the
provisions of Sections 7, 9, 10 and 13 hereof with respect to the Preferred
Shares shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Pur-
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chase Price, the number of one one-hundredths of a Preferred Share purchasable
from time to time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-hundredths of a Preferred Share (calculated to the nearest one
one-millionth of a Preferred Share) obtained by (i) multiplying (x) the number
of one one-hundredths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment
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to be made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Right Certificates have been issued,
shall be at least 10 days later than the date of the public announcement. If
Right Certificates have been issued, upon each adjustment of the number of
Rights pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Right Certificates
on such record date Right Certificates evidencing, subject to Section 14 hereof,
the additional Rights to which such holders shall be entitled as a result of
such adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be registered in the
names of the holders of record of Right Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price and the number of one one-hundredths
of a Preferred Share which were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then par value, if
any, of the Preferred Shares issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the
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opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable Preferred Shares at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such record date of
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due bill or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Shares, issuance
wholly for cash of any Preferred Shares at less than the current market price,
issuance wholly for cash of Preferred Shares or securities which by their terms
are convertible into or exchangeable for Preferred Shares, dividends on
Preferred Shares payable in Preferred Shares or issuance of rights, options or
warrants referred to herinabove in Section 11(b), hereafter made by the Company
to holders of its Preferred Shares shall not be taxable to such stockholders.
(n) In the event that at any time after the date of this Agreement
and prior to the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares
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payable in Common Shares or (ii) effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares) into a greater or lesser number of Common
Shares, then in any such case (i) the number of one one-hundredths of a
Preferred Share purchasable after such event upon proper exercise of each Right
shall be determined by multiplying the number of one one-hundredths of a
Preferred Share so purchasable immediately prior to such event by a fraction,
the numerator of which is the number of Common Shares outstanding immediately
before such event and the denominator of which is the number of Common Shares
outstanding immediately after such event, and (ii) each Common Share outstanding
immediately after such event shall have issued with respect to it that number of
Rights which each Common Share outstanding immediately prior to such event had
issued with respect to it. The adjustments provided for in this Section 11(n)
shall be made successively whenever such a dividend is declared or paid or such
a subdivision, combination or consolidation is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 or 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate and (c) if such
adjustment occurs at any time after the Distribution Date, mail a brief summary
thereof to each holder of a Right Certificate in accordance with Section 25
hereof.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. In the event, directly or indirectly, at any time after a Person
has become an Acquiring
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Person, (a) the Company shall consolidate with, or merge with and into, any
other Person, (b) any Person shall consolidate with the Company, or merge with
and into the Company and the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part of
the Common Shares shall be changed into or exchanged for stock or other
securities of any other Person (or the Company) or cash or any other property,
or (c) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or more transactions,
assets or earning power aggregating 50% or more of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person other
than the Company or one or more of its wholly-owned Subsidiaries, then, and in
each such case, proper provision shall be made so that (i) each holder of a
Right (except as otherwise provided herein) shall thereafter have the right to
receive, upon the exercise thereof at a price equal to the then current Purchase
Price multiplied by the number of one one-hundredths of a Preferred Share for
which a Right is then exercisable, in accordance with the terms of this
Agreement and in lieu of Preferred Shares, such number of Common Shares of such
other Person (including the Company as successor thereto or as the surviving
corporation) as shall equal the result obtained by (A) multiplying the then
current Purchase Price by the number of one one-hundredths of a Preferred Share
for which a Right is then exercisable and dividing that product by (B) 50% of
the then current per share market price of the Common Shares of such other
Person (determined pursuant to Section 11(d) hereof) on the date of consummation
of such consolidation, merger, sale or transfer; (ii) the issuer of such Common
Shares shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such issuer; and (iv) such issuer shall take such steps
(including,
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but not limited to, the reservation of a sufficient number of its Common Shares
in accordance with Section 9 hereof) in connection with such consummation as may
be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to the Common Shares of
the Company thereafter deliverable upon the exercise of the Rights. The Company
shall not consummate any such consolidation, merger, sale or transfer unless
prior thereto the Company and such issuer shall have executed and delivered to
the Rights Agent a supplemental agreement so providing. The Company shall not
enter into any transaction of the kind referred to in this Section 13 if at the
time of such transaction there are any rights, warrants, instruments or
securities outstanding or any agreements or arrangements which, as a result of
the consummation of such transaction, would eliminate or substantially diminish
the benefits intended to be afforded by the Rights. The provisions of this
Section 13 shall similarly apply to successive mergers or consolidations or
sales or other transfers. Notwithstanding anything in this Agreement to the
contrary, the consummation by PepsiCo or any of its Affiliates of a Permitted
Acquisition shall not be deemed to be an event of the type described in the
first sentence of this Section 13 and shall not cause the Rights to be adjusted
or exercisable in accordance with, or any other action to be taken or obligation
to arise pursuant to, this Section 13.
Section 14. Fractional Rights and Fractional Shares. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing
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price of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing price for
any day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case, as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Rights are not listed or
admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Rights selected by the Board of Directors of the Company. If on any such
date no such market maker is making a market in the Rights, the fair value of
the Rights on such date as determined in good faith by the Board of Directors of
the Company shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-hundredth of a Preferred Share).
Fractions of Preferred Shares in integral multiples of one one-hundredth of a
Preferred Share may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an
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appropriate agreement between the Company and a depositary selected by it;
provided, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one one-hundredth of a Preferred Share, the Company shall
pay to the registered holders of Right Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one Preferred Share. For the purposes of this Section
14(b), the current market value of a Preferred Share shall be the closing price
of a Preferred Share (as determined pursuant to the second sentence of Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such
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Right Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of the obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
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Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder, and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the administration
and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense, incurred without
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
The Rights Agent shall be protected and shall incur no liability
for, or in respect of any action taken, suffered or omitted by it in connection
with, its administration of this
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Agreement in reliance upon any Right Certificate or certificate for the
Preferred Shares or Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper person or persons, or
otherwise upon the advice of counsel as set forth in Section 20 hereof.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the stock
transfer or corporate trust business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto; provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and, in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
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In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and, in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to
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the Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 11(a)(ii) hereof) or any
adjustment in the terms of the Rights (including the manner, method or amount
thereof) provided for in Section 3, 11, 13, 23 or 24, or the ascertaining of the
existence of facts that would require any such change or adjustment (except with
respect to the exercise of Rights evidenced by Right Certificates after actual
notice that such change or adjustment is required); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Preferred Shares to be issued pursuant to
this Agreement or any Right Certificate or as to whether any Preferred Shares
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
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(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Secretary or the Treasurer of the Company, and to apply
to such officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any
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such act, default, neglect or misconduct, provided that reasonable care was
exercised in the selection and continued employment thereof.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Shares or Preferred Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Shares or
Preferred Shares by registered or certified mail, and to the holders of the
Right Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for inspection by the
Company), then the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States or of the State of New York (or of any other state of the United
States so long as such corporation is authorized to do business as a banking
institution in the State of New York), in good standing, having an office in the
State of New York, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to
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supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million or (b) an Affiliate of a corporation described in clause (a)
of this sentence. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Shares or Preferred Shares, and mail a notice thereof in writing to
the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares or
other securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 23. Redemption. (a) The Board of Directors of the Company
may, at its option, at any time prior to such time as any Person becomes an
Acquiring Person, redeem all but not less than all the then outstanding Rights
at a redemption price of $0.01 per Right, appro-
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priately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). The redemption of the Rights
by the Board of Directors of the Company may be made effective at such time, on
such basis and with such conditions as the Board of Directors of the Company in
its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a) of this
Section 23, and without any further action and without any notice, the right to
exercise the Rights will terminate and the only right thereafter of the holders
of Rights shall be to receive the Redemption Price. The Company shall promptly
give public notice of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after such action of the Board of Directors ordering
the redemption of the Rights, the Company shall mail a notice of redemption to
all the holders of the then outstanding Rights at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the transfer agent for the Common Shares. Any
notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
will state the method by which the payment of the Redemption Price will be made.
Neither the Company nor any of its Affiliates or Associates may redeem, acquire
or purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof, and other
than in connection with the purchase of Common Shares prior to the Distribution
Date.
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Section 24. Exchange. (a) The Board of Directors of the Company
may, at its option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the provisions of Section
11(a)(ii) hereof) for Common Shares at an exchange ratio of one Common Share per
Right, appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or any such Subsidiary, or any entity
holding Common Shares for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to paragraph (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights shall be to receive that number of Common Shares equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice of any such exchange; provided,
however, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company promptly shall mail a notice
of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the
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holder receives the notice. Each such notice of exchange will state the method
by which the exchange of the Common Shares for Rights will be effected, and, in
the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of Section
11(a)(ii) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Shares
issued but not outstanding or authorized but unissued to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company shall
take all such action as may be necessary to authorize additional Common Shares
for issuance upon exchange of the Rights. In the event the Company shall, after
good faith effort, be unable to take all such action as may be necessary to
authorize such additional Common Shares, the Company shall substitute, for each
Common Share that would otherwise by issuable upon exchange of a Right, a number
of Preferred Shares or fraction thereof such that the current per share market
price of one Preferred Share multiplied by such number or fraction is equal to
the current per share market price of one Common Share as of the date of
issuance of such Preferred Shares or fraction thereof.
(d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of a whole Common Share. For the purposes of this
paragraph (e), the current market value of a whole Common Share shall be the
closing price of a Common Share (as determined pursuant to the second sentence
of Section
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11(d)(i) hereof) for the Trading Day immediately prior to the date of exchange
pursuant to this Section 24.
Section 25. Notice of Certain Events. (a) In case the Company
shall, at any time after the Distribution Date, propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to make
any other distribution to the holders of its Preferred Shares (other than a
regular quarterly cash dividend), (ii) to offer to the holders of the Preferred
Shares rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other securities, rights
or options, (iii) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company, or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares), then, in each such case, the Company
shall give to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, or distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice shall be so given in
the case of
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any action covered by clause (i) or (ii) above at least 10 days prior to the
record date for determining holders of the Preferred Shares for purposes of such
action, and, in the case of any such other action, at least 10 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the Common Shares and/or Preferred Shares, whichever shall be
the earlier.
(b) In case the event set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Whitman Corporation
3501 Algonquin Road
Rolling Meadows, Illinois 60008
Attention: Corporate Secretary
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
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First Chicago Trust Company of New York
525 Washington Boulevard
Third Floor, Suite 4660
Jersey City, New Jersey 07310
Attention: Corporate Actions Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company may from time
to time supplement or amend this Agreement without the approval of any holders
of Right Certificates in order to cure any ambiguity, to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, or to make any other provisions with respect to the
Rights which the Company may deem necessary or desirable, any such supplement or
amendment to be evidenced by a writing signed by the Company and the Rights
Agent; provided, however, that, from and after such time as any Person becomes
an Acquiring Person, this Agreement shall not be amended in any manner which
would adversely affect the interests of the holders of Rights. Without limiting
the foregoing, the Company may at any time prior to such time as any Person
becomes an Acquiring Person amend this Agreement to lower the thresholds set
forth in Sections 1(a) and 3(a) hereof to not less than the greater of (a) the
sum of .001% and the largest percentage of the outstanding Common Shares then
known by the Company to be beneficially owned by any Person (other than the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or any Subsidiary of the Company,
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or any entity holding Common Shares for or pursuant to the terms of any such
plan, or PepsiCo or any of its Affiliates) and (b) 10%.
Section 28. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, the Common Shares) any legal or equitable right, remedy or
claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 31. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
-46-
<PAGE>
Section 32. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
-47-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above written.
WHITMAN CORPORATION
Attest:
By /s/ William B. Moore By /s/ Martin M. Ellen
-------------------------- -------------------------
Title: Secretary Title: Senior Vice President
FIRST CHICAGO TRUST COMPANY
Attest: OF NEW YORK
By /s/ Mary E. Garcia By /s/ Joanne Gorostiola
-------------------------- -------------------------
Title: Customer Service Officer Title: Assistant Vice President
<PAGE>
Exhibit A
---------
FORM
of
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
WHITMAN CORPORATION
(Pursuant to Section 151 of the
Delaware General Corporation Law)
---------------------
Whitman Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (hereinafter called the
"Corporation"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
General Corporation Law at a meeting duly called and held on May 20, 1999:
RESOLVED, that pursuant to the authority granted to and vested in
the Board of Directors of this Corporation (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the Amended and
Restated Certificate of Incorporation, the Board of Directors hereby creates a
series of Preferred Stock, par value $0.01 per share (the "Preferred Stock"), of
the Corporation and hereby states the designation and number of shares, and
fixes the relative rights, preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
Section 1. Designation and Amount. The shares of such series shall
be designated as "Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the Series A Preferred
Stock shall be 2,000,000. Subject to Section A of Article FOURTH of the Amended
and Restated Certificate of Incorporation, such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.
A-1
<PAGE>
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and
superior to the Series A Preferred Stock with respect to dividends, the
holders of shares of Series A Preferred Stock, in preference to the
holders of Common Stock, par value $0.01 per share (the "Common Stock"),
of the Corporation, and of any other junior stock, shall be entitled to
receive, when and as declared by the Board of Directors out of funds
legally available for the purpose, cummulative dividends payable in cash
quarterly on the first days of January, April, July and October in each
year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series A
Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1 or (b) subject to the provision for
adjustment hereinafter set forth, 100 times the aggregate per share amount
of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions, other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share
of Series A Preferred Stock. In the event the Corporation shall at any
time declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the amount
to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend
of $1 per share on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares, unless the
date of issue of such shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of issue of such shares, or unless the
date of is-
A-2
<PAGE>
sue is a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends paid
on the shares of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to
100 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
shares of Common Stock (by reclassification or otherwise than by payment
of a dividend in shares of Common Stock) into a greater or lesser number
of shares of Common Stock, then in each such case the number of votes per
share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such
number by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock,
or by law or by the resolution or resolutions providing for the issue of
any series of Preferred Stock, the holders of shares of Series A Preferred
Stock and the holders of shares of Common Stock and any other capital
stock of the Corporation having general voting rights shall vote together
as one class on all matters submitted to a vote of stockholders of the
Corporation.
(C) Except as set forth herein or as otherwise provided by law, the
holders of Series A Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares
A-3
<PAGE>
of Series A Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, except dividends paid ratably on the
Series A Preferred Stock and all such parity stock on which
dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the Corporation may at any
time redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any shares
of stock ranking on a parity with the Series A Preferred Stock,
except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all holders
of such shares upon such terms as the Board of Directors, after
consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and
classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Amended and Restated Certificate of Incorporation, or in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock or as
otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made (1) to the holders of
A-4
<PAGE>
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock unless, prior
thereto, the holders of shares of Series A Preferred Stock shall have received
$100 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series A Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the aggregate amount to which holders of shares of Series A Preferred
Stock were entitled immediately prior to such event under the proviso in clause
(1) of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case each share
of Series A Preferred Stock shall at the same time be similarly exchanged or
changed into an amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. Redemption. The shares of Series A Preferred Stock
shall not be redeemable.
A-5
<PAGE>
Section 9. Rank. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets, junior to
all series of any other class of the Corporation's Preferred Stock.
Section 10. Amendment. The Amended and Restated Certificate of
Incorporation of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single class.
A-6
<PAGE>
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its Senior Vice President and attested by its
Secretary this day of ,1999.
---- -----------
-----------------------------------
Senior Vice President
Attest:
- ---------------------
Secretary
A-7
<PAGE>
Exhibit B
---------
Form of Right Certificate
Certificate No. R- Rights
------
NOT EXERCISABLE AFTER MAY 20, 2009 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.01 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE AGREEMENT.
Right Certificate
WHITMAN CORPORATION
This certifies that , or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the
Agreement, dated as of May 20, 1999 (the "Rights Agreement"), between Whitman
Corporation, a Delaware corporation (the "Company"), and First Chicago Trust
Company of New York (the "Rights Agent"), to purchase from the Company at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., New York City time, on May 20, 2009 at the
principal office of the Rights Agent, or at the office of its successor as
Rights Agent, one one-hundredth of a fully paid non-assessable share of Series A
Junior Participating Preferred Stock, par value $0.01 per share (the "Preferred
Shares"), of the Company (the "Preferred Shares"), at a purchase price of $61.25
per one one-hundredth of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-hundredths of a Preferred Share which may
be purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of May 20, 1999, based on the
Preferred Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of one one-hundredths of a
Preferred Share which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon the
happening of certain events.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggre-
B-1
<PAGE>
gate number of Preferred Shares as the Rights evidenced by the Right Certificate
or Right Certificates surrendered shall have entitled such holder to purchase.
If this Right Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a redemption
price of $0.01 per Right or (ii) may be exchanged in whole or in part for
Preferred Shares or shares of the Company's Common Stock, par value $0.01 per
share.
No fractional Preferred Shares will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share, which may, at the election
of the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Right Certificate shall
have been exercised as provided in the Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of , .
----- ------
ATTEST: WHITMAN CORPORATION
By
- ------------------------------------ -------------------------------
Countersigned:
First Chicago Trust Company of New York
By
---------------------
Authorized Signature
B-2
<PAGE>
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED hereby sells, assigns and
------------------
transfers unto
-----------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print name and address of transferee)
- --------------------------------------------------------------------------------
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ,
-------------------- ------
------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
==============================================================================
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Agreement).
---------------------------------
Signature
==============================================================================
B-3
<PAGE>
Form of Reverse Side of Right Certificate -- continued
FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if holder desires to exercise Rights
represented by the Right Certificate.)
To WHITMAN CORPORATION
The undersigned hereby irrevocably elects to exercise
Rights represented by this Right Certificate to purchase the Preferred Shares
issuable upon the exercise of such Rights and requests that certificates for
such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
- --------------------------------------------------------------------------------
(Please print name and address)
- --------------------------------------------------------------------------------
Dated: ,
-------------------- --------
-----------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of Securities
Dealers, Inc., or a commercial bank or trust company having an office or
correspondent in the United States.
==============================================================================
B-4
<PAGE>
Form of Reverse Side of Right Certificate -- continued
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
----------------------------
Signature
==============================================================================
NOTICE
------
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Agreement) and such Assignment
or Election to Purchase will not be honored.
B-5
<PAGE>
Exhibit C
---------
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On May 20, 1999, the Board of Directors of Whitman Corporation (the
"Company") 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 the Company. 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 the Company one one-hundredth of a share
of Series A Junior Participating Preferred Stock, par value $0.01 per share (the
"Preferred Shares"), of the Company at a price of $61.25 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 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 this 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 this 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.
<PAGE>
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
the Company, 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 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, 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
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
-2-
<PAGE>
be a reclassification of securities or a recapitalization or reorganization of
the Company or other transaction or series of transactions involving the Company
which has the effect of increasing by more than 1% the proportionate share of
the outstanding shares of any class of equity securities of the Company 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.
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 the Company 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 the Company, 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 the Company 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
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 receive dividends.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form 8-A
dated May 20, 1999. A
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<PAGE>
copy of the Rights Agreement is available free of charge from the Company. This
summary description of the Rights does not purport to be complete and is
qualified in its entirety by reference to the Rights Agreement, which is hereby
incorporated herein by reference.
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<PAGE>
Exhibit D
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SHAREHOLDER AGREEMENT
BY AND BETWEEN
WHITMAN CORPORATION,
A DELAWARE CORPORATION,
AND
PEPSICO, INC.,
A NORTH CAROLINA CORPORATION
DATED AS OF MAY 20, 1999
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TABLE OF CONTENTS
Page
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ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. Certain Definitions .................................... 2
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Company .......... 6
Section 2.2. Representations and Warranties of the Shareholder ...... 6
ARTICLE III
SHAREHOLDER AND COMPANY CONDUCT
Section 3.1. Acquisition of Voting Securities........................ 6
Section 3.2. Required Reduction of Ownership Percentage ............. 7
Section 3.3. Top-Up Rights .......................................... 8
Section 3.4. Transfer ............................................... 8
Section 3.5. Charter and By-Laws .................................... 9
Section 3.6. Rights Agreement........................................ 9
Section 3.7. Special Meetings Requested by the Stockholder........... 9
ARTICLE IV
BOARD COMPOSITION
Section 4.1. Board Composition....................................... 9
ARTICLE V
EFFECTIVENESS AND TERMINATION
Section 5.1. Effectiveness........................................... 10
Section 5.2. Termination............................................. 10
Section 5.3. Agreements Following Certain Acquisitions............... 10
ARTICLE VI
MISCELLANEOUS
Section 6.1. Injunctive Relief....................................... 11
Section 6.2. Successors and Assigns.................................. 11
Section 6.3. Amendments; Waiver...................................... 11
Section 6.4. Notices................................................. 11
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Page
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Section 6.5. Applicable Law.......................................... 12
Section 6.6. Headings................................................ 13
Section 6.7. Integration............................................. 13
Section 6.8. Severability............................................ 13
Section 6.9. Consent to Jurisdiction................................. 13
Section 6.10. Counterparts............................................ 13
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SHAREHOLDER AGREEMENT, dated as of May 20, 1999 (this
"Agreement"), by and between Whitman Corporation, a Delaware corporation
(formerly named Heartland Territories Holdings, Inc.) (the "Company"), and
PepsiCo, Inc., a North Carolina corporation (the "Shareholder").
W I T N E S S E T H:
WHEREAS, the Shareholder, the Company and the former Whitman
Corporation, a Delaware corporation ("Whitman"), have entered into an Amended
and Restated Contribution and Merger Agreement, dated as of March 18, 1999, (the
"Merger Agreement"), pursuant to which, among other things, certain affiliates
of the Shareholder are transferring certain assets and liabilities to the
Company in exchange for shares of Common Stock, par value $0.01 per share (the
"Common Stock"), of the Company and Whitman is being merged with and into the
Company, with the Company as the surviving corporation, and in connection
therewith, the outstanding shares of common stock of Whitman are being converted
into an equal number of shares of Common Stock of the Company (the "Merger");
WHEREAS, the execution of this Agreement upon the consummation
of the Merger (the "Closing") is a covenant of the Company and of the
Shareholder in the Merger Agreement;
WHEREAS, the Company and the Shareholder desire to establish
in this Agreement certain terms and conditions concerning the acquisition and
disposition of Voting Securities of the Company by the Shareholder, and related
provisions concerning the Shareholder's relationship with and investment in the
Company immediately following the Closing; and
WHEREAS, concurrently with the Closing, the Company and the
Shareholder are entering into a Registration Rights Agreement (the "Registration
Rights Agreement"), in the form attached to the Merger Agreement as Exhibit E.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for other good and valuable consideration,
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
Section 1.1. Certain Definitions. In addition to other terms
defined elsewhere in this Agreement, as used in this Agreement, the following
terms shall have the meanings ascribed to them below:
"Affiliate" shall mean, with respect to any person, any other
person that directly or indirectly through one or more intermediaries controls
or is controlled by or is under common
<PAGE>
control with such person. For the purposes of this definition, "control," when
used with respect to any particular person, means the power to direct the
management and policies of such person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agreement" shall have the meaning assigned to such term in
the introduction hereto.
"Beneficial Owner" (and, with correlative meanings,
"Beneficially Own" and "Beneficial Ownership") of any interest means a Person
who, together with his or its Affiliates, is or may be deemed a beneficial owner
of such interest for purposes of Rule 13d-3 or 13d-5 under the Exchange Act, or
who, together with his or its Affiliates, has the right to become such a
beneficial owner of such interest (whether such right is exercisable immediately
or only after the passage of time) pursuant to any agreement, arrangement or
understanding, or upon the exercise, conversion or exchange of any warrant,
right or other instrument, or otherwise; provided that a Person shall not be
deemed the Beneficial Owner of Voting Securities solely as a result of having
been granted a revocable proxy relating to such Voting Securities in connection
with any one special or annual meeting of shareholders of the Company (including
any postponements or adjournments thereof).
"Board" shall mean the Board of Directors of the Company in
office at the applicable time, as elected in accordance with the By-Laws.
"Buy-Back Offer" shall have the meaning set forth in Section
3.2 of this Agreement.
"By-Laws" shall mean the by-laws of the Company, in the form
specified in the Merger Agreement and attached thereto as Annex III, as they may
be amended from time to time.
"Charter" shall mean the Certificate of Incorporation of the
Company, in the form specified in the Merger Agreement and attached thereto as
Annex II, as it may be amended from time to time.
"Closing" shall have the meaning assigned in the second
recital of this Agreement.
"Commission" shall mean the United States Securities and
Exchange Commission.
"Common Stock" shall have the meaning assigned in the first
recital of this Agreement.
"Company" shall have the meaning assigned in the introduction
of this Agreement.
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"Director" shall mean any member of the Board of Directors of
the Company in office at the applicable time, as elected in accordance with the
provisions of the By-Laws.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Independent Director" shall mean any person who is both (i)
independent of and otherwise unaffiliated with any member of the Shareholder
Group, and who is not a director, officer, employee, consultant or advisor
(financial, legal or other) of any member of the Shareholder Group and has not
served in any such capacity in the previous two (2) years and (ii) not an
officer or employee, consultant or advisor (financial, legal or other) of
Whitman or the Company and has not served in any such capacity in the previous
two (2) years.
"Maximum Ownership Percentage" shall mean, calculated at a
particular point in time, a Total Ownership Percentage of 49.0%; provided that
in the event of a Permitted Acquisition which results in the Shareholder Group's
Total Ownership Percentage exceeding 49.0%, the Maximum Ownership Percentage
shall become the Shareholder Group's Total Ownership Percentage giving effect to
such Permitted Acquisition.
"Merger" shall have the meaning set forth in the first recital
of this Agreement.
"Merger Agreement" shall have the meaning set forth in the
first recital of this Agreement.
"Minimum Price" shall mean the highest average of per share
closing prices on the NYSE Composite Tape of the Voting Securities (or, if the
Voting Securities are not quoted on the NYSE Composite Tape, on the principal
United States securities exchange registered under the Exchange Act on which
such Voting Securities are listed, or, if such Voting Securities are not listed
on any such exchange, the closing sale price or bid quotation with respect to
such Voting Securities on the National Association of Securities Dealers, Inc.
Automated Quotations System or any system then in use; provided, however, if no
such quotations are available with respect to such Voting Securities, the price
of such Voting Securities shall be the public market trading value as determined
by an investment banker of nationally recognized reputation selected by the
Independent Directors) over any 20 consecutive trading day period during the 18
month period preceding the date of the first public announcement of a
Shareholder Offer.
"NYSE" shall mean the New York Stock Exchange, Inc.
"Permitted Acquisition" shall mean the acquisition of Voting
Securities pursuant to (1) a transaction or series of transactions that would
not result, individually or in the aggregate, in any member of the Shareholder
Group, singly or as part of a partnership, limited partnership, syndicate or
other 13D Group, directly or indirectly, acquiring, proposing to acquire, or
publicly announcing or otherwise disclosing an intention to propose to acquire,
or offering or agreeing to acquire, by purchase or otherwise, Beneficial
Ownership of any Security so as to cause the Shareholder Group's Total Ownership
Percentage to exceed the Maximum Ownership Percentage, (2) a Shareholder Offer
at a price which is not less than the Minimum Price, (3) a merger or other
business combination approved by a majority of the Voting Power attributable to
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Voting Securities not Beneficially Owned by the Shareholder Group, (4) a
transaction approved by a majority of the Independent Directors. For purposes of
this definition, the value of any securities offered in exchange for Voting
Securities pursuant to a Shareholder Offer shall be the average of closing
prices on the NYSE Composite Tape of such securities (or, if such securities are
not quoted on the NYSE Composite Tape, on the principal United States securities
exchange registered under the Exchange Act on which such securities are listed,
or, if such securities are not listed on any such exchange, the closing sale
price or bid quotation with respect to such security on the National Association
of Securities Dealers, Inc. Automated Quotations System or any system then in
use; provided, however, if no such quotations are available with respect to such
securities, the price of such securities shall be the public market trading
value as determined by an investment banker of nationally recognized reputation
selected by the Independent Directors) over the five consecutive trading day
period preceding the date of the first public announcement of such Shareholder
Offer.
"Permitted Significant Transferee" shall have the meaning set
forth in Section 3.4 of this Agreement.
"Person" shall mean any individual, partnership, joint
venture, corporation, trust, unincorporated organization, government or
department or agency of a government.
"Registration Rights Agreement" shall have the meaning
assigned in the third recital of this Agreement.
"Repurchase" shall have the meaning set forth in Section 3.2
of this Agreement.
"Rights Agreement" shall mean the Shareholder Rights
Agreement, dated as of the date of the Closing, attached to the Merger Agreement
as Annex V.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Shareholder" shall have the meaning assigned in the
introduction to this Agreement.
"Shareholder Affiliate" shall mean any Affiliate of the
Shareholder (other than the Company or its subsidiaries).
"Shareholder Group" shall mean the Shareholder, any
Shareholder Affiliate, any Permitted Significant Transferee and any Person with
whom the Shareholder, any Shareholder Affiliate or any Permitted Significant
Transferee is part of a 13D Group.
"Shareholder Offer" shall mean (i) a tender offer or exchange
offer by any member of the Shareholder Group for all Voting Securities not
Beneficially Owned by the Shareholder Group or (ii) a merger or other business
combination pursuant to which all Voting Securities not Beneficially Owned by
the Shareholder Group are proposed to be exchanged or converted.
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<PAGE>
"Significant Transferee" shall mean a transferee which would
have a Total Ownership Percentage of greater than 20% after giving effect to any
proposed Transfer.
"13D Group" shall mean any group of Persons acquiring,
holding, voting or disposing of any Voting Security which would be required
under Section 13(d) of the Exchange Act and the rules and regulations thereunder
to file a statement on Schedule 13D with the Commission as a "person" within the
meaning of Section 13(d)(3) of the Exchange Act; provided that a Person shall
not be deemed to be part of a 13D Group with another Person solely as a result
of having been granted a revocable proxy relating to such Person's Voting
Securities in connection with any one special or annual meeting of shareholders
of the Company (including any postponements or adjournments thereof).
"Total Ownership Percentage" shall mean, calculated at a
particular point in time, the Voting Power represented by the Voting Securities
Beneficially Owned by the Person whose Total Ownership Percentage is being
determined.
"Total Voting Power" shall mean, calculated at a particular
point in time, the aggregate Votes represented by all then outstanding Voting
Securities.
"Trading Day", with respect to a Voting Security, shall mean a
day on which the principal national securities exchange on which such Voting
Security is listed or admitted to trading is open for the transaction of
business or, if such security is not listed or admitted to trading on any
national securities exchange, any day other than a Saturday, Sunday or a day on
which banking institutions in the City of New York are authorized or obligated
to close.
"Transfer" shall mean any sale, transfer, pledge, encumbrance
or other disposition to any Person, and to "Transfer" shall mean to sell,
transfer, pledge, encumber or otherwise dispose of to any Person.
"Votes" shall mean votes entitled to be cast generally in the
election of Directors, assuming the conversion of any securities then
convertible into Common Stock or shares of any other class of capital stock of
the Company then entitled to vote generally in the election of Directors.
"Voting Power" shall mean, calculated at a particular point in
time, the ratio, expressed as a percentage, of (a) the Votes represented by the
Voting Securities with respect to which the Voting Power is being determined to
(b) Total Voting Power.
"Voting Securities" shall mean the Common Stock and shares of
any other class of capital stock of the Company then entitled to vote generally
in the election of Directors and any securities then convertible into Common
Stock or shares of any other class of capital stock of the Company then entitled
to vote generally in the election of Directors.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Company.
The Company represents and warrants to the Shareholder as of the date hereof as
follows:
(a) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware and has all necessary corporate power and authority to
enter into this Agreement and to carry out its obligations hereunder.
(b) This Agreement has been duly and validly authorized by
the Company and all necessary and appropriate action has been taken by
the Company to execute and deliver this Agreement and to perform its
obligations hereunder.
(c) This Agreement has been duly executed and delivered by
the Company and assuming due authorization and valid execution and
delivery by the Shareholder, this Agreement is a valid and binding
obligation of the Company, enforceable against it in accordance with
its terms.
Section 2.2. Representations and Warranties of the
Shareholder. The Shareholder represents and warrants to the Company as of the
date hereof as follows:
(a) The Shareholder has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of North Carolina and has all necessary corporate power and authority
to enter into this Agreement and to carry out its obligations
hereunder.
(b) This Agreement has been duly and validly authorized by
the Shareholder and all necessary and appropriate action has been taken
by the Shareholder to execute and deliver this Agreement and to perform
its obligations hereunder.
(c) This Agreement has been duly executed and delivered by
the Shareholder and assuming due authorization and valid execution and
delivery by the Company, this Agreement is a valid and binding
obligation of the Shareholder, enforceable against it in accordance
with its terms.
ARTICLE III
SHAREHOLDER AND COMPANY CONDUCT
Section 3.1. Acquisition of Voting Securities. Subject to the
provisions of this Agreement, during the term of this Agreement, the Shareholder
agrees with the Company that, without the prior approval of a majority of the
Independent Directors, the Shareholder will not, and will cause each member of
the Shareholder Group not to, take any of the following actions:
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<PAGE>
(a) singly or as part of a partnership, limited partnership,
syndicate or other 13D Group, directly or indirectly, acquire, propose
to acquire, or publicly announce or otherwise disclose an intention to
propose to acquire, or offer or agree to acquire, by purchase or
otherwise, Beneficial Ownership of any Voting Security so as to cause
the Shareholder Group's Total Ownership Percentage to exceed the
Maximum Ownership Percentage, other than pursuant to a Permitted
Acquisition;
(b) form, join or in any way participate in a 13D Group with
respect to any Voting Securities of the Company or any securities of
its subsidiaries if such 13D Group's Total Ownership Percentage would
exceed the Maximum Ownership Percentage;
(c) initiate (including by means of proposing or publicly
announcing or otherwise disclosing an intention to propose, solicit,
offer, seek to effect or negotiate) a merger, acquisition or other
business combination transaction relating to the Company (other than a
merger, acquisition or business combination of a third party (not a
member of the Shareholder Group) with the Company) which would not be,
if consummated, a Permitted Acquisition.
The Shareholder Group shall not be prohibited by the terms of
this Agreement from taking any action or exercising any right which is not
inconsistent with the terms of this Agreement, including soliciting or obtaining
the revocable proxy of any other shareholder of the Company with respect to the
election of directors or any other matter, seeking the election of new
directors, calling special meetings of shareholders of the Company, making
shareholder proposals, engaging in discussions with the Board or the management
of the Company or otherwise voting its Voting Securities in any manner in which
any member of the Shareholder Group shall determine in its sole discretion. In
addition, this section shall not be deemed to restrict Directors affiliated with
the Shareholder from participating as Board members in the direction of the
Company.
Section 3.2. Required Reduction of Ownership Percentage. (a)
If at any time the Shareholder becomes aware that the Shareholder Group's Total
Ownership Percentage exceeds the Maximum Ownership Percentage, other than as
permitted pursuant to the terms of this Agreement, then the Shareholder shall,
or shall cause the Shareholder Group to, consistent with the provisions of
Section 3.4 of this Agreement, promptly (in any event, prior to the earliest to
occur of (i) the record date for the next annual or special meeting of
shareholders of the Company, (ii) the record date for the taking of any action
of shareholders of the Company by written consent or (iii) the purchase of any
additional Voting Securities by any member of the Shareholder Group) take all
action necessary to reduce the amount of Voting Securities Beneficially Owned by
the Shareholder Group such that the Shareholder Group's Total Ownership
Percentage is not greater than the Maximum Ownership Percentage.
(b) During the term of this Agreement, if the Company
purchases shares of Common Stock from the public, whether by tender offer, open
market purchase or otherwise (a "Repurchase"), the Company shall
contemporaneously with the Repurchase offer to purchase
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<PAGE>
from the Shareholder Group, on the same terms and conditions, including price,
as in the Repurchase, a percentage of those shares of Common Stock Beneficially
Owned by the Shareholder Group equal to the percentage of shares of Common Stock
to be Repurchased from the Beneficial Owners of shares of Common Stock other
than the Shareholder Group (the "Buy-Back Offer"). The Company shall provide
notice to the Shareholder of its intention to engage in a Repurchase and of the
mechanism by which the Repurchase shall occur not less than thirty (30) days in
advance of the date on which the Repurchase is to be consummated, and the
Shareholder shall provide notice to the Company within ten (10) days of receipt
of such notice of whether the Stockholder Group intends to accept the Buy-Back
Offer.
Section 3.3. Top-Up Rights. During the term of this
Agreement, if the Shareholder Group's Total Ownership Percentage is below the
Maximum Ownership Percentage, the Shareholder Group may at its option purchase
Voting Securities from time to time in the open market or otherwise in an amount
not in excess of the amount that would cause the Shareholder Group's Total
Ownership Percentage to exceed the Maximum Ownership Percentage.
Section 3.4. Transfer. Except for any requirements of the
Securities Act applicable to such Transfer, each of the members of the
Shareholder Group may Transfer any of the Voting Securities Beneficially Owned
by such member of the Shareholder Group to any transferee which is not a
Significant Transferee without restriction, and may effect such a Transfer to a
Significant Transferee with the prior written consent of a majority of the
Independent Directors; provided, however, that each of such members of the
Shareholder Group may Transfer any of such Voting Securities to any Significant
Transferee without restriction (other than as contemplated in the last sentence
of this Section 3.4) or obtaining such consent if, at the time of such Transfer,
the Shareholder Group Beneficially Owns at least 20% of the outstanding voting
securities of such Significant Transferee and no other Person Beneficially Owns
a greater percentage of the outstanding voting securities of such Significant
Transferee than the percentage owned by the Shareholder Group (a "Permitted
Significant Transferee"). The Shareholder Group shall obtain the prior written
consent of a majority of the Independent Directors to any Transfer by the
Shareholder Group of any voting securities of a Permitted Significant Transferee
if, at the time of such Transfer, such Permitted Significant Transferee has a
Total Ownership Percentage of greater than 20% and such Transfer would result in
(x) the Shareholder Group Beneficially Owning less than 20% of the outstanding
voting securities of such Permitted Significant Transferee or (y) any other
Person Beneficially Owning a greater percentage of the outstanding voting
securities of such Permitted Significant Transferee than the percentage
Beneficially Owned by the Shareholder Group after giving effect to such
Transfer. Notwithstanding the foregoing provisions of this Section 3.4, none of
the restrictions of this Section 3.4 shall apply to (i) a Transfer by any member
of the Shareholder Group of any of the Voting Securities in a public offering
pursuant to which reasonable efforts are made to achieve a wide distribution of
such Voting Securities or (ii) a Transfer of Voting Securities among members of
the Shareholder Group, provided that any such transferee shall agree with the
Company in writing prior to each such Transfer to be bound by the terms of this
Agreement with respect to its Beneficial Ownership of Voting Securities.
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Section 3.5. Charter and By-Laws. During the term of this
Agreement the Company shall not, and the Shareholder Group shall not and shall
not facilitate any effort to, amend, alter or repeal, or propose the amendment,
alteration or repeal of, any provision of the Charter or the By-Laws in any
manner which is inconsistent with the terms of this Agreement. If at any time
during the term of this Agreement the provisions of this Agreement shall
conflict with the provisions of the Charter or the By-Laws, the parties shall
use all reasonable efforts, consistent with their fiduciary responsibilities, to
cause the provisions of the Charter and the By-Laws to be brought into
conformity with the provisions of this Agreement.
Section 3.6. Rights Agreement. During the term of this
Agreement, the Company hereby agrees not to (i) amend any provision of the
Rights Agreement in any manner which is inconsistent with the terms of this
Agreement or the Merger Agreement and which adversely affects the rights of the
Shareholder Group under the terms of this Agreement or (ii) adopt any new rights
agreement which is inconsistent with the terms of this Agreement or the Merger
Agreement and which adversely affects the rights of the Shareholder Group under
the terms of this Agreement.
Section 3.7. Special Meetings Requested by the Stockholder;
Nominations. In the event that during the term of this Agreement the Shareholder
Group requests a special meeting of the stockholders of the Company in
accordance with the By-Laws or the Shareholder Group nominates an alternative
slate of directors to the slate proposed by the Board at any annual meeting of
stockholders of the Company in accordance with the By-Laws, the Company hereby
agrees that the Company shall not, without the Shareholder's consent, from the
date of receipt of such request for a special meeting or the date of receipt of
such nomination, as the case may be, until the adjournment of the requested
special meeting or the annual meeting, as the case may be, (i) take any action
effecting a material change in its capital structure, (ii) declare or pay a
dividend (other than any regular quarterly dividend), (iii) materially increase
the compensation of any executive officer or (iv) take any material action not
in the ordinary course of business; provided that this provision shall not
restrict the ability of the Company to comply with commitments entered into
prior to the date of such request.
ARTICLE IV
BOARD COMPOSITION
Section 4.1. Board Composition. (a) As of the Effective
Time (as defined in the Merger Agreement) of the Merger, the Board shall consist
of the current directors of Whitman (not to exceed nine (9) in number) and
Robert F. Sharpe, Jr. and Karl M. von der Heyden.
(b) Upon the first retirement, resignation or other removal
from the Board of one of such nine (9) directors of Whitman as of the date of
the Merger Agreement, whether prior to, upon or following the Effective Time (as
defined in the Merger Agreement), the Company and the Shareholder hereby agree
that they shall take appropriate action to cause the Board to consist of 10
Directors.
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ARTICLE V
EFFECTIVENESS AND TERMINATION
Section 5.1. Effectiveness. This Agreement shall take
effect immediately upon the Closing and shall remain in effect until it is
terminated pursuant to Section 5.2 hereof.
Section 5.2. Termination. This Agreement shall terminate
upon the earliest to occur of the following:
(a) The Shareholder Group's Total Ownership Percentage
falling below 15% at any time.
(b) Subject to the provisions of Section 5.3, the
consummation of a Permitted Acquisition pursuant to which the
Shareholder Group becomes the Beneficial Owner of not less than 75% of
the Voting Power attributable to all Voting Securities of the Company.
(c) Two (2) years from the first date on which the following
two conditions are met: (i) the Shareholder Group has become the
Beneficial Owner of more than 55% (but less than 75%) of the Voting
Power attributable to all Voting Securities of the Company and (ii) the
Shareholder Group has consummated a Shareholder Offer at a price which
is not less than the Minimum Price pursuant to which at least 10% of
the Voting Power attributable to Voting Securities not Beneficially
Owned by the Shareholder Group prior to such Shareholder Offer were
acquired by the Shareholder Group.
(d) Mutual written agreement of the Company and the
Shareholder at any time to terminate this Agreement, which termination
shall occur at a time to be fixed in such mutual agreement.
Section 5.3. Agreements Following Certain Acquisitions.
Following the consummation of a Permitted Acquisition pursuant to which the
Shareholder Group becomes the Beneficial Owner of not less than 75% of the
Common Stock, the Company agrees that for a period of 90 days after such
Permitted Acquisition it shall not, without the Shareholder's consent, take any
action or enter into any agreement which (i) restricts the acquisition by the
Shareholder Group of any Voting Securities, notwithstanding that such
acquisition is not a Permitted Acquisition, (ii) restricts in any manner the
transfer of any such Voting Securities by the Shareholder Group, (iii) restricts
any right of the Shareholder Group under Section 3.1(c), (iv) otherwise
restricts in any manner the ability of any member of the Shareholder Group to
take any action with respect to Voting Securities, including, in the case of
clauses (i) through (iv), amending the Rights Agreement to provide for any such
restriction, (v) effects a material change in the capital structure, (vi)
declares or pays a dividend (other than any regular quarterly dividend), (vii)
materially increases the compensation of any executive officer or (viii) is a
material action not in the ordinary course of business; provided that this
provision shall not
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restrict the ability of the Company to comply with commitments entered into
prior to the date of such Permitted Acquisition.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Injunctive Relief. Each party hereto
acknowledges that it would be impossible to determine the amount of damages that
would result from any breach of any of the provisions of this Agreement and that
the remedy at law for any breach, or threatened breach, of any of such
provisions would likely be inadequate and, accordingly, agrees that each other
party shall, in addition to any other rights or remedies which it may have, be
entitled to seek such equitable and injunctive relief as may be available from
any court of competent jurisdiction to compel specific performance of, or
restrain any party from violating, any of such provisions. In connection with
any action or proceeding for injunctive relief, each party hereto hereby waives
the claim or defense that a remedy at law alone is adequate and agrees, to the
maximum extent permitted by law, to have each provision of this Agreement
specifically enforced against him or it, without the necessity of posting bond
or other security against him or it, and consents to the entry of injunctive
relief against him or it enjoining or restraining any breach or threatened
breach of such provisions of this Agreement.
Section 6.2. Successors and Assigns. This Agreement shall be
binding upon, shall inure to the benefit of and shall be enforceable by the
Company and by the Shareholder and their respective successors and permitted
assigns, and no such term or provision is for the benefit of, or intended to
create any obligations to, any other Person.
Section 6.3. Amendments; Waiver. (a) This Agreement may be
amended only by an agreement in writing executed by the parties hereto. Any
approval of an amendment of this Agreement upon the part of the Company shall
require the approval of a majority of the Independent Directors at a duly
convened meeting thereof.
(b) Either party may waive in whole or in part any benefit or
right provided to it under this Agreement, such waiver being effective only if
contained in a writing executed by the waiving party. No failure by any party to
insist upon the strict performance of any covenant, duty, agreement or condition
of this Agreement or to exercise any right or remedy consequent upon breach
thereof shall constitute a waiver of any such breach or of any other covenant,
duty, agreement or condition, nor shall any delay or omission of either party to
exercise any right hereunder in any manner impair the exercise of any such right
accruing to it thereafter. Any waiver of any benefit or right provided to the
Company under this Agreement shall require the approval of a majority of the
Board and a majority of the Independent Directors at a duly convened meeting
thereof.
Section 6.4. Notices. Except as otherwise provided in this
Agreement, all notices, requests, claims, demands, waivers and other
communications hereunder shall be in writing and shall be deemed to have been
duly given when delivered by hand, when delivered
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<PAGE>
personally or by courier, three days after being deposited in the mail
(registered or certified mail, postage prepaid, return receipt requested), or
when received by facsimile transmission if promptly confirmed by one of the
foregoing means, as follows:
If to the Shareholder:
PepsiCo, Inc.
700 Anderson Hill Road
Purchase, NY 10577
Attention: General Counsel
Fax: (914) 253-3667
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Attention: Robert A. Kindler
Fax: (212) 765-1047
If to the Company:
Whitman Corporation
3501 Algonquin Road
Rolling Meadows, Illinois 60008
Attention: General Counsel
Fax: (847) 818-5047
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, NY 10019
Attention: Seth A. Kaplan
Fax: (212) 403-2223
or to such other address or facsimile number as either party may, from time to
time, designate in a written notice given in a like manner.
Section 6.5. Applicable Law. This Agreement shall be
governed by and construed in accordance with the internal laws of the State of
Delaware without giving effect to principles of conflicts of law.
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<PAGE>
Section 6.6. Headings. The descriptive headings of the
several sections in this Agreement are for convenience only and do not
constitute a part of this Agreement and shall not be deemed to limit or affect
in any way the meaning or interpretation of this Agreement.
Section 6.7. Integration. This Agreement and the other
writings referred to herein or delivered pursuant hereto which form a part
hereof contain the entire understanding of the parties with respect to its
subject matter. This Agreement supersedes all prior agreements and
understandings between the parties with respect to its subject matter. There are
no restrictions, agreements, promises, representations, warranties, covenants or
undertakings with respect to its subject matter other than those expressly set
forth or referred to herein.
Section 6.8. Severability. If any term or provision of this
Agreement or any application thereof shall be declared or held invalid, illegal
or unenforceable, in whole or in part, whether generally or in any particular
jurisdiction, such provision shall be deemed amended to the extent, but only to
the extent, necessary to cure such invalidity, illegality or unenforceability,
and the validity, legality and enforceability of the remaining provisions, both
generally and in every other jurisdiction, shall not in any way be affected or
impaired thereby.
Section 6.9. Consent to Jurisdiction. In connection with any
suit, claim, action or proceeding arising out of this Agreement, the Shareholder
and the Company each hereby consent to the in personam jurisdiction of the
United States federal courts and state courts located in the State of Delaware;
the Shareholder and the Company each agree that service in the manner set forth
in Section 6.4 hereof shall be valid and sufficient for all purposes; and the
Shareholder and the Company each agree to, and irrevocably waive any objection
based on forum non conveniens or venue not to, appear in any United States
federal court or state court located in the State of Delaware.
Section 6.10. Counterparts. This Agreement may be executed
by the parties hereto in two or more counterparts, each of which shall be deemed
an original, but all of which together shall constitute one and the same
instrument.
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<PAGE>
IN WITNESS WHEREOF, the Company and the Shareholder have
caused this Agreement to be duly executed by their respective authorized
officers as of the date set forth at the head of this Agreement.
WHITMAN CORPORATION
By:/s/ William B. Moore
-------------------------------------
Name:
Title:
PEPSICO, INC. (on behalf of itself and
all of its affiliates who are being
issued shares of Whitman Corporation in
connection with the Merger)
By:/s/ W. Timothy Heaviside
-------------------------------------
Name:
Title:
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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
-----------------
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.
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2
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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