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): March 12, 1998
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Sweetheart Holdings Inc.
Delaware 33-64814 06-1281287
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
10100 Reisterstown Road, Owings Mills, Maryland 21117
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (410) 363-1111
N/A
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On March 12, 1998, the stockholders (the "Sweetheart Stockholders") of
Sweetheart Holdings Inc. (the "Company") (as of December 29, 1997) consummated
an Investment Agreement, dated December 29, 1997 (the "Investment Agreement")
with SF Holdings Group, Inc. ("SF Holdings") and Creative Expressions Group,
Inc., whereby SF Holdings acquired 48% of the total outstanding voting common
stock, par value $.01 per share, of the Company (the "Sweetheart Class A Common
Stock") and 100% of the total outstanding non-voting common stock, par value
$.01 per share, of the Company (the "Sweetheart Class B Common Stock" and
together with the Sweetheart Class A Common Stock the "Sweetheart Common
Stock"), representing 90% of the total outstanding common stock of the Company
(the "Sweetheart Investment").
Upon consummation of the Sweetheart Investment, the by-laws of the
Company and its subsidiaries were amended (i) to fix its board of directors at
five members, (ii) to provide for the presence of four directors to constitute a
quorum, (iii) to require approval of four directors for the following matters,
among others (a) a merger, consolidation or other combination of the Company
with or into another entity, (b) the sale of all or a material portion of the
assets of the Company, (c) the entering into of any new line of business by the
Company, (d) the issuance or repurchase by the Company of any equity securities,
(e) the incurrence by the Company of any indebtedness for money borrowed or the
refinancing of any existing indebtedness of the Company, (f) the approval of the
annual business plans and operating budgets of the Company, (g) the termination
or modification of any of the terms of the Management Services Agreement (as
defined herein), (h) the amendment or modification of any provisions of the
certificate of incorporation of the Company, (i) the selection of the Company's
chief executive officer, chief operating officer and chief financial officer,
(j) any change of independent auditors and (k) the removal of officers of the
Company.
Upon consummation of the Sweetheart Investment, Dennis Mehiel, Thomas
Uleau and Hans Heinsen, executive officers of The Fonda Group, Inc., a
wholly-owned subsidiary of SF Holdings ("Fonda"), were appointed Chief Executive
Officer, Chief Operating Officer and Chief Financial Officer, respectively, of
the Company. Pursuant to the Investment Agreement, in the event of the
disability of Dennis Mehiel, the Chief Operating Officer shall automatically
replace him as Chief Executive Officer.
In addition, upon consummation of the Sweetheart Investment, the
Company entered into an agreement with the Sweetheart Stockholders and SF
Holdings (the "Sweetheart Stockholders' Agreement"), whereby, among other
things, the Sweetheart Stockholders are entitled to nominate three members to
the board of directors of the Company and SF Holdings is entitled to nominate
two members. The Sweetheart Stockholders and SF Holdings have agreed to vote all
their shares of Sweetheart Common Stock in favor of such nominees.
Furthermore, upon consummation of the Sweetheart Investment, American
Industrial Partners Management Company, Inc. ("AIPM"), an affiliate of American
Industrial Partners, L.P. and a stockholder of the Company, assigned to SF
Holdings certain of its rights under the restated management services agreement,
dated August 31, 1993 (the "1993 Management Services Agreement"), pursuant to
which AIPM provided certain management services to the Company and received
management fees of $1.85 million per annum. Following the assignment of the 1993
Management Services Agreement, such Agreement was amended and its term was
extended through March 12, 2008 (as amended and extended, the "Management
Services Agreement"). Following the consummation of the Sweetheart Investment,
SF Holdings assigned substantially all of its rights under the Management
Services Agreement to Fonda, a wholly-owned subsidiary of SF Holdings. During
the term of the Management Services Agreement, Fonda has the right, subject to
the direction of the board of directors of the Company, to manage the Company's
day-to-day operations for and on behalf of the Company, including but not
limited to, the right to cause the Company to (i) acquire and dispose of assets;
(ii) employ, determine compensation of and terminate employees of the Company
other than the Chief Executive Officer, Chief Operating Officer and Chief
Financial Officer; and (iii) take all other actions associated with the
management of the day-to-day operations of the business of the Company.
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ITEM 7. EXHIBITS.
None.
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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 hereunto duly authorized.
March 26, 1998 SWEETHEART HOLDINGS INC.
By: /s/ Hans H. Heinsen
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Hans H. Heinsen
Chief Financial Officer and Principal
Accounting Officer
