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Filed pursuant to rule 424B3 Reg. 333-46368
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SUPPLEMENT TO THE JOINT PROXY STATEMENT/PROSPECTUS
FOR THE
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Special Meeting of Shareholders Special Meeting of Shareholders
of of
WHITMAN CORPORATION AND PEPSIAMERICAS, INC.
to be held on to be held on
November 30, 2000 November 30, 2000
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You recently received a joint proxy statement/prospectus dated October 26,
2000 in connection with the solicitation by the board of directors of Whitman
Corporation and the board of directors of PepsiAmericas, Inc. of proxies to be
used at special meetings of the shareholders of Whitman and PepsiAmericas,
respectively. The special meeting of shareholders of Whitman has been called for
November 30, 2000 at 9:00 a.m., local time, at the offices of Sidley & Austin,
Bank One Plaza, 10 S. Dearborn Street, 55th Floor, Chicago, Illinois 60603. The
special meeting of shareholders of PepsiAmericas has been called for
November 30, 2000 at 9:00 a.m., local time, in the Neptune and Saturn Rooms of
the Marquette Hotel, 710 Marquette Avenue, Minneapolis, Minnesota 55402 (located
on the 50th Floor of the IDS Center).
This supplement should be read in conjunction with the joint proxy
statement/prospectus. SPECIFICALLY, PLEASE REVIEW THE RISK FACTORS RELATING TO
THE MERGER DESCRIBED ON PAGE 36 OF THE JOINT PROXY STATEMENT/PROSPECTUS.
Capitalized terms in this supplement shall have the meanings ascribed to them in
the joint proxy statement/prospectus. If you need another copy of the joint
proxy statement/prospectus, please contact
GEORGESON SHAREHOLDER COMMUNICATIONS INC.
(800) 223-2064
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE COMMON STOCK TO BE ISSUED UNDER
THE JOINT PROXY STATEMENT/PROSPECTUS, DETERMINED IF THE JOINT PROXY
STATEMENT/PROSPECTUS IS ACCURATE OR COMPLETE, OR DETERMINED IF THIS SUPPLEMENT
IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
This supplement to the joint proxy statement/prospectus is dated
November 17, 2000 and is first being mailed to shareholders on or about
November 17, 2000.
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RECENT DEVELOPMENTS
Following dissemination of the joint proxy statement/prospectus of
PepsiAmericas and Whitman dated October 26, 2000, the parties to the litigation
described on page 71 of the joint proxy statement/prospectus discussed the
possibility of settling the case in exchange for defendants making additional
disclosures. As a result of those discussions, the parties have agreed to
supplement the joint proxy statement/prospectus by providing you with the
following information.
TARGETS USED TO CALCULATE CONTINGENT PAYMENTS UNDER THE CONTINGENT PAYMENT
ALTERNATIVE
The basis for the PepsiAmericas adjusted EBITDA targets used to calculate
the contingent payments under the contingent payment alternative was derived in
the following manner. As shown on page 71 of the joint proxy
statement/prospectus, the adjusted EBITDA targets for 2000, 2001 and 2002 are
$65.6 million, $76.6 million and $93.3 million, respectively. The 2000 adjusted
EBITDA target is identical to PepsiAmericas' 2000 operating plan. The 2001 and
2002 adjusted EBITDA targets build upon the 2000 adjusted EBITDA target, making
adjustments based upon what PepsiAmericas' management believed to be reasonable
assumptions for volume growth, pricing changes, cost experience and other
business and economic factors. The following sets forth the actual and projected
revenue, projected revenue growth, adjusted EBITDA and percentage adjusted
EBITDA margin for each of the years 2000-2002, and compares each of projected
revenue, adjusted EBITDA and percentage adjusted EBITDA margin with 1999 actual
results.
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(DOLLARS IN MILLIONS)
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1999 ACTUAL 2000 PLAN 2001 PLAN 2002 PLAN
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Revenue (excluding contract packaging(1))............ $533.8 $614.4 $655.4 $697.9
Projected Revenue Growth (excluding contract
packaging)......................................... -- 15.1% 6.7% 6.5%
Adjusted EBITDA(2)................................... $ 50.2 $ 65.6 $ 76.6 $ 93.3
Percentage Adjusted EBITDA Margin.................... 9.4% 10.7% 11.7% 13.4%
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(1) Contract packaging is performed by Pepsi Cola franchises at low margins.
The business is considered a method of spreading fixed manufacturing
overhead.
(2) Adjusted EBITDA means, with respect to any period, the earnings before
interest, taxes, depreciation and amortization of PepsiAmericas for that
period, calculated in accordance with past practice of PepsiAmericas and
excluding any earnings derived from acquisitions made by PepsiAmericas after
the date of the merger agreement, any costs savings or increased costs which
result from the merger and any costs or expenses incurred by PepsiAmericas
in connection with the merger. The merger agreement provides that there will
also be deducted from the calculation of adjusted EBITDA for the applicable
period (unless the Affiliated Transaction Committee of Whitman's board of
directors determines otherwise) any capital expenditures by PepsiAmericas
and any aggregate PepsiCo spend-back amounts, in each case, in excess of
certain specified amounts for the period. PepsiCo spend-back amounts are
amounts paid by PepsiCo, using their sole discretion as to amount and timing
of payments, for the distribution of PepsiCo products.
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Budgeted revenues for 1999 were $539.9 million (excluding contract
packaging). Actual revenues for 1999 were $533.8 million (excluding contract
packaging), a 1.1% unfavorable variance to budget.
PepsiAmericas does not as a matter of course make public forecasts or
projections as to future revenues or results of operations. The foregoing
information was presented to Whitman by PepsiAmericas during the course of
negotiations of the proposed merger.
The foregoing information was not prepared with a view towards public
disclosure or compliance with either the published guidelines or regulations of
the SEC regarding projections or forecasts or the American Institute of
Certified Public Accountants' Guide for Prospective Financial Statements.
The foregoing information was not prepared in accordance with generally
accepted accounting principles and was not audited or reviewed by independent
auditors nor did any independent auditors perform any services with respect
thereto.
The information, while presented with numerical specificity, was based upon
numerous estimates and other assumptions which are inherently subject to
significant business, economic and competitive uncertainties, contingencies and
risks, all of which are difficult to quantify and many of which are beyond the
control of PepsiAmericas. Accordingly, there can be no assurance that the above
projections will be realized, and it is likely that future results will vary
from those set forth above, possibly by material amounts. PLEASE REFER TO PAGE
39 OF THE JOINT PROXY STATEMENT/PROSPECTUS FOR FURTHER INFORMATION ON
FORWARD-LOOKING STATEMENTS.
Whether or not holders of PepsiAmericas common stock participating in the
contingent payment alternative receive additional shares of Whitman common stock
in 2002 and 2003 will depend on PepsiAmericas EBITDA, as adjusted, for each of
fiscal years 2001 and 2002 and for the three-year period beginning January 2,
2000. These contingent payments are described in detail on page 88 of the joint
proxy statement/prospectus under the heading "The Merger Agreement--Contingent
Payments." Assuming that none of the adjustments to EBITDA described under the
heading applies, if PepsiAmericas achieves, but does not exceed, projected
EBITDA as set forth above, the maximum number of additional shares of Whitman
common stock will be paid for 2001 and 2002 performance, respectively.
Additional shares of Whitman common stock will be paid with respect to the
three-year period beginning January 2, 2000 only if PepsiAmericas' EBITDA, as
adjusted, exceeds $235.5 million, which is the sum of PepsiAmericas' projected
EBITDA for that three year period. The maximum number of additional shares of
Whitman common stock for the period will only be paid if EBITDA, as adjusted, is
at least $247.3 million, which is $11.8 million above PepsiAmericas'
projections.
From time to time both Whitman and PepsiAmericas engage in acquisitions,
divestitures, joint ventures and other transactions with bottlers and others.
Any of these transactions completed by Whitman or PepsiAmericas in the future
could impact, either positively or negatively, the future financial performance
of Whitman generally, or PepsiAmericas as a subsidiary of Whitman. Transactions
completed by PepsiAmericas before December 31, 2002 could impact, either
positively or negatively, PepsiAmericas' EBITDA, as adjusted, for one or more of
the applicable measurement periods in a manner that could also impact the number
of additional shares of Whitman common stock, if any, issued to holders of
PepsiAmericas common stock participating in the contingent payment alternative.
CERTAIN ADDITIONAL INFORMATION REGARDING MR. DIEGO SUAREZ AND V. SUAREZ & CO.
Mr. Diego Suarez, Jr., one of the members of the PepsiAmericas special
committee, has been a director of PepsiAmericas since February 1998. As of
November 16, 2000, Mr. Suarez beneficially owned 7,400 shares of PepsiAmericas
Class B common stock. Mr. Suarez is also the Chief Executive Officer of V.
Suarez & Co., Inc., which beneficially owned 1,000,000 shares of PepsiAmericas
Class A common stock and 1,631,685 shares of PepsiAmericas Class B common stock
as of November 16, 2000.
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Dakota Holdings, LLC, Pohlad Companies, PepsiCo., Inc., and V. Suarez &
Co., Inc. constitute a "group" for purposes of Section 13(d) of the Securities
Exchange Act and the regulations thereunder and have filed a joint Schedule 13D
disclosing their ownership of PepsiAmericas common stock. Each reporting person
disclaims beneficial ownership of PepsiAmericas common stock held by the others.
Mr. Suarez and V. Suarez & Co., Inc. have announced to PepsiAmericas that
they will elect the stock alternative as the consideration for the shares of
PepsiAmericas Class A and Class B common stock beneficially owned by Mr. Suarez
and by V. Suarez & Co., Inc.
CERTAIN ADDITIONAL INFORMATION REGARDING WHITMAN CLOSING PRICES
As described in detail in the joint proxy statement/prospectus, the
consideration to be paid to PepsiAmericas shareholders in the merger will
depend, in part, on the average closing price of Whitman common stock during the
15 consecutive trading days ending on the fifth trading day immediately prior to
the earlier of the Whitman special meeting or the PepsiAmericas special meeting.
We refer to this average as the Whitman reference price.
If the merger is completed, each share of PepsiAmericas common stock will be
converted, at the election of the PepsiAmericas shareholders, into:
- $3.80 in cash, subject to increase if the Whitman reference price is
greater than $16.0738 per share or decrease if the Whitman reference price
is less than $13.1513 per share; or
- shares of Whitman common stock with a value of $3.80 (based on the Whitman
reference price), subject to increase or decrease under the circumstances
described above; or
- shares of Whitman common stock with a value of $2.80 (based on the Whitman
reference price), plus the right to receive in the future additional
shares of Whitman common stock having an aggregate value of up to $1.50
(based on the Whitman reference price) if PepsiAmericas meets the
performance levels for the years 2000 through 2002 described above and in
the joint proxy statement/prospectus, in each case subject to increase or
decrease under the circumstances described above.
The closing price of Whitman common stock on November 16, 2000, the last
date prior to the date of this supplement was $13.6875. Each of the special
meetings has been called for November 30, 2000. Accordingly, as of the close of
business on November 16, 2000, 11 of the 15 trading days used to determine the
Whitman reference price have passed. The average closing price of Whitman common
stock during those 11 trading days was $13.63. If the Whitman reference price
remains at that level, the above-referenced adjustments to the merger
consideration will not be made. There can be no assurance that the Whitman
reference price will not fall below $13.1513 per share or rise above $16.0738
per share, in which case adjustments would be made. Shareholders are reminded
that they will be able to learn the final amounts to be paid in the merger by
calling, toll free, (800) 223-2064 beginning the first trading day after the
determination of the Whitman reference price.
IMPORTANT
If you have not done so, please complete, sign and date your proxy card and
return it promptly.
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VOTING YOUR PROXY
WHITMAN. The board of directors of Whitman has not changed its
recommendation that Whitman shareholders vote for the issuance of shares of
Whitman common stock as provided by the merger agreement. If you have not
returned your proxy, please do so as soon as possible. If you have already
submitted a proxy but wish to change your vote, you may revoke your proxy at any
time before it is voted by:
- notifying in writing the Corporate Secretary of Whitman Corporation at
3501 Algonquin Road, Rolling Meadows, Illinois 60008;
- submitting a subsequently dated proxy; or
- appearing in person and voting at the special meeting if such shareholder
is a holder of record.
To vote in person at the Whitman special meeting, shareholders must attend
the meeting and cast their votes in accordance with the procedures at the
special meeting. Attendance at the special meeting will not in and of itself
constitute revocation of a proxy.
PEPSIAMERICAS. The board of directors of PepsiAmericas has not changed its
recommendation that PepsiAmericas shareholders vote for the adoption of the
merger agreement. If you have not returned your proxy, please do so as soon as
possible. If you have already submitted a proxy but wish to change your vote,
you may revoke your proxy at any time before it is voted by:
- notifying in writing the Secretary of PepsiAmericas, Inc. at 3800 Dain
Rauscher Plaza, 60 South Sixth Street, Minneapolis, Minnesota 55402;
- submitting a subsequently dated proxy; or
- appearing in person and voting at the special meeting if such shareholder
is a holder of record.
To vote in person at the PepsiAmericas special meeting, shareholders must
attend the meeting and cast their votes in accordance with the procedures at the
special meeting. Attendance at the special meeting will not in and of itself
constitute revocation of a proxy.
QUESTIONS
Whitman and PepsiAmericas have filed a joint proxy statement/prospectus and
other documents with the SEC and have mailed the joint proxy
statement/prospectus to their respective shareholders. These documents contain
important information about Whitman, PepsiAmericas and the merger. We urge you
to read the joint proxy statement/prospectus and other documents that have been
or will be filed with the SEC. You can obtain the documents free of charge at
the SEC's web site, www.sec.gov. In addition, the documents are available free
of charge by requesting them from the companies.
WHITMAN AND PEPSIAMERICAS. If you have any questions or need further
assistance in voting, you may call
GEORGESON SHAREHOLDER COMMUNICATIONS INC.
(800) 223-2064
or contact either company directly.
WHITMAN. If you are a Whitman shareholder and have any questions or need
further assistance in voting, you may contact Whitman at 3501 Algonquin Road,
Rolling Meadows, Illinois 60008, attention Charles H. Connolly, telephone
(847) 818-5014.
PEPSIAMERICAS. If you are a PepsiAmericas shareholder and have any
questions or need further assistance in voting, you may contact PepsiAmericas at
3800 Dain Rauscher Plaza, 60 South Sixth Street, Minneapolis, Minnesota 55402,
attention John F. Bierbaum, telephone (612) 661-3830.
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