SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 20, 1998
(November 17, 1998)
BESTFOODS
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(Exact name of registrant as specified in its charter)
Delaware 1-4199 36-2385545
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(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
700 Sylvan Avenue
International Plaza
Englewood Cliffs, New Jersey 07632-9976
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (201) 894-4000
None
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
On November 17, 1998, the Board of Directors of Bestfoods (the "Company")
announced, effective January 4, 1999, the redemption of the rights issued under
its Rights Agreement dated as of March 19, 1991 between the Company and First
Chicago Trust Company of New York, as Rights Agent, and the issuance of new
rights under a Rights Agreement to be dated as of January 4, 1999 between the
Company and First Chicago Trust Company of New York, as Rights Agent. For
additional information regarding these items, reference is made to the Rights
Agreement to be dated as of January 4, 1999 (a copy of which is attached hereto
as Exhibit 4.1 and is incorporated herein by reference), the Summary of Rights
to Purchase Preferred Stock (a copy of which is attached hereto as Exhibit 4.2
and is incorporated herein by reference) and a press release dated as of
November 18, 1998 issued by the Company (a copy of which is attached hereto as
Exhibit 99.1 and is incorporated herein by reference).
Item 7. Financial Statements and Exhibits.
(c) Exhibits. The following exhibits are filed herewith and incorporated
herein by reference:
4.1 Rights Agreement, dated as of January 4, 1999, between Bestfoods
and First Chicago Trust Company of New York, as Rights Agent
(incorporated by reference to the Company's Registration
Statement on Form 8-A dated November 20, 1998)
4.2 Summary of Rights to Purchase Preferred Stock
99.1 Press Release dated November 18, 1998
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BESTFOODS
Date: November 20, 1998 By: /s/ Hanes A. Heller
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Name: Hanes A. Heller
Title: Vice President,
General Counsel
and Secretary
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EXHIBIT INDEX
Number Description
4.1 Rights Agreement, dated as of January 4, 1999, between Bestfoods
and First Chicago Trust Company of New York, as Rights Agent
(incorporated by reference to the Company's Registration
Statement on Form 8-A dated November 20, 1998)
4.2 Summary of Rights to Purchase Preferred Stock
99.1 Press Release dated November 18, 1998
Exhibit 4.2
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
The Board of Directors of Bestfoods has declared a dividend of one right (a
"Right") for each outstanding share of Bestfoods' Common Stock. The dividend
will be payable to shareholders of record on January 4, 1999. Generally, each
Right consists of the right to purchase, for $200 (the "Exercise Price"), 1/200
of a share of Bestfoods' Series A Junior Participating Preferred Stock (the
"Preferred Stock"). The Rights are more fully described in a Rights Agreement
between Bestfoods and First Chicago Trust Company of New York, as Rights Agent.
Distribution Date
The Rights may be exercised only if the Distribution Date occurs. The
Distribution Date is the date 10 business days after (i) the date a person or
group ("Person") announces that it has acquired 15% or more of Bestfoods'
outstanding Common Stock or (ii) the date a Person begins, or announces an
intention to begin, a tender offer for 15% or more of Bestfoods' outstanding
Common Stock, whichever occurs later.
If the Distribution Date occurs, Bestfoods will mail to shareholders of
record on such date certificates evidencing the Rights and such shareholders
will be able to transfer the Rights certificates separately from the Common
Stock certificates. Until such time, the Rights will be evidenced only by the
Common Stock certificates (which, if issued after January 4, 1999, will be
imprinted with a legend describing the Rights) and shareholders will only be
able to transfer the Rights together with the Common Stock.
"Flip-in" and "Flip-over" Features
If a Person acquires 15% or more of Bestfoods' outstanding Common Stock
without the prior approval of the Board, then the other shareholders of
Bestfoods (but not the acquiror) will be entitled to purchase, at the Exercise
Price, Common Stock of Bestfoods (or, in certain circumstances, cash, property
or other securities of Bestfoods) with a market value equal to two times the
Exercise Price. This is commonly referred to as the "flip-in" feature of the
Rights.
If a Person acquires 15% or more of Bestfoods' outstanding Common Stock
without the prior approval of the Board and then either acquires Bestfoods in a
merger or other business combination transaction or causes the sale or transfer
of 50% or more of Bestfoods' assets or earning power, then the other
shareholders of Bestfoods (but not the acquiror) will be entitled to purchase,
at the Exercise Price, common stock of such acquiror
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with a market value equal to two times the Exercise Price. This is commonly
referred to as the "flip-over" feature of the Rights.
To illustrate, if the exercise price were $250 and the current market price
of the common stock (either of Bestfoods or the acquiror, as applicable) were
$50 at the time of exercise, a holder who exercises would be entitled to receive
$500 worth of common stock (or 10 shares) for $250 (rather than just 5 shares).
Redemption or Exchange of Rights
The Rights will expire automatically in 10 years, on January 4, 2009, but
Bestfoods has the option of redeeming or exchanging the Rights prior to that
time.
Bestfoods may redeem all of the Rights at any time before a Person
announces that it has acquired 15% or more of Bestfoods' outstanding Common
Stock or, if such acquisition already has taken place, during the 10 business
day period following such acquisition. Bestfoods may extend such 10 business day
period. Each Right may be redeemed at the price of $.0001 per Right. The Rights
cannot be exercised until after the redemption period has passed. If Bestfoods
were to redeem the Rights, the Rights will no longer be exercisable and will
terminate.
Furthermore, Bestfoods may exchange all or a portion of the Rights at any
time after a Person acquires 15% or more of Bestfoods' outstanding Common Stock
at an exchange ratio of one share of Common Stock of Bestfoods (or, in certain
circumstances, cash, property or other securities of Bestfoods) per Right. If
the Board of Directors were to order the exchange of the Rights, the Rights will
no longer be exercisable and will terminate. Until a Right is exercised or
exchanged, the holder of such Right will not have any rights as a shareholder of
Bestfoods (including the right to vote or receive dividends) simply as a result
of being a holder of such Right.
Amendment
Bestfoods may amend any of the provisions of the Rights Agreement before
the earlier to occur of (i) the date a Person announces that it has acquired 15%
or more of Bestfoods' outstanding Common Stock or (ii) the Distribution Date.
Thereafter, Bestfoods may only amend the Rights Agreement to eliminate any
ambiguity or defect or to make changes that are not adverse to the interests of
holders of the Rights (other than the acquiror). However, after the earlier of
the two dates referred to above, Bestfoods may not amend the provisions of the
Rights Agreement that relate to the principal economic terms of the Rights.
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Adjustments to Exercise Price
In order to prevent dilution, Bestfoods may adjust the Exercise Price or
the number of 1/200 of a share of Preferred Stock (or, in certain circumstances,
Common Stock or other securities of Bestfoods) that may be issued upon exercise.
Such adjustment may be necessary if Bestfoods were to subdivide, combine or
reclassify the Preferred Stock or grant holders of the Preferred Stock rights or
warrants to subscribe for shares of the Preferred Stock or convertible
securities at less than the current market price of the Preferred Stock.
However, Bestfoods need not adjust the Exercise Price until the earlier of three
years or the time when cumulative adjustments require an adjustment of at least
1% in such Exercise Price.
Terms of the Preferred Stock
Each 1/200 of a share of Preferred Stock that may be issued upon exercise
of a Right is intended to be comparable to one share of Common Stock of
Bestfoods with respect to dividend, voting, liquidation and other rights. The
Preferred Stock will rank junior to all other series of Bestfoods' preferred
stock with respect to dividend payments and distributions of assets in
liquidation. The Preferred Stock will not be redeemable.
The Rights Agreement has been filed with the Securities and Exchange
Commission as an exhibit to a Registration Statement on Form 8-A dated November
20, 1998. A copy of the Rights Agreement is also available free of charge to
shareholders upon request to Bestfoods.
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Exhibit 99.1
[Bestfoods Letterhead]
Contact Hanes A. Heller (201) 894-2381
Vice President, General Counsel, and Secretary
[Bestfoods Logo]
BESTFOODS ANNOUNCES NEW SHAREHOLDER RIGHTS PLAN
ENGLEWOOD CLIFFS, NJ, November 18, 1998 - The Bestfoods Board of Directors
approved the redemption of the currently outstanding stock purchase rights under
its 1991 Shareholder Rights Plan and established a new Shareholder Rights Plan.
The new Rights Plan, to be effective on January 4, 1999, will have a term of 10
years and the exercise price of the rights will be $200 per right. Other
principal features of the Plan are unchanged from the existing one. The old
rights will be redeemed and one new right for each share of common stock will be
distributed on January 25, 1999, as a dividend to all shareholders of record on
January 4, 1999. The new rights will attach to and trade with each outstanding
share of common stock. The new Rights Plan will be reviewed periodically by the
Board's newly-formed Corporate Governance Committee to ensure that it continues
to serve the best interests of Bestfoods shareholders.
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ABOUT BESTFOODS: Bestfoods, formerly CPC International Inc., is among the
largest U.S. food companies, with sales of $8.4 billion in 1997. Best known
among Bestfoods' U.S. products are: Hellmann's and Best Foods mayonnaise and
dressings; Mazola corn oil and margarine; Skippy peanut butter; Knorr soups,
sauces, and bouillons; Entenmann's sweet baked products; Thomas' English
muffins; Arnold, Brownberry, Freihofer's, and Oroweat breads; Boboli pizza
crusts; Mueller's pasta; and Karo syrup. Bestfoods' global Knorr brand comprises
one of the world's most extensive lines of products. Bestfoods is one of the
nation's most international food companies, with operations in more than 60
countries and products marketed in 110 countries. For more information about
Bestfoods, visit the company's Web site on the Internet at:
http://www.bestfoods.com.
