UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported):
September 24, 2019 (
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including
area code: (
Not Applicable.
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth
company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Jody Macedonio has stepped down as the Executive Vice President, Chief Financial Officer of Dean Foods Company (the “Company”), effective September 24, 2019. In connection with her departure, Ms. Macedonio will receive compensation and benefits pursuant to that certain Letter Agreement regarding Severance Benefits, dated January 9, 2018, between the Company and Ms. Macedonio. Ms. Macedonio’s departure is not related to any issues regarding the integrity of the Company’s financial statements or accounting policies and practices.
The Company has appointed Gary Rahlfs to serve as the Company’s Interim Chief Financial Officer, effective immediately. Mr. Rahlfs, 52, has served as the Company’s Senior Vice President, Finance & Strategy since May 2019. From March 2018 to May 2019, Mr. Rahlfs served as the Chief Financial Officer/Vice Chancellor for Finance at the University of North Texas. From 1994 until February 2017, Mr. Rahlfs was employed at PepsiCo, Inc., where he held several positions, including Vice President Finance, Global Groups for PepsiCo, Chief Financial Officer – PepsiCo Foods Canada, and Vice President Sales Finance – Frito-Lay US-South Division.
The Company previously entered into a letter agreement with Mr. Rahlfs, dated May 8, 2019 (the “Offer Letter”), a copy of which is attached to this report as Exhibit 10.1 and incorporated herein by reference. Under the terms of the Offer Letter, Mr. Rahlfs is entitled to an initial annual base salary of $350,000 and is eligible to participate in the Company’s Short-Term Incentive Plan with a cash incentive payment target equal to 50% of his annualized base salary. The foregoing description of the Offer Letter is a summary and is qualified in its entirety by reference to the copy of the Offer Letter attached hereto as Exhibit 10.1 and incorporated herein by reference.
In addition, Russell Coleman has stepped down as the Executive Vice President, General Counsel, Corporate Secretary and Government Affairs of the Company, effective September 24, 2019. In connection with his departure, Mr. Coleman will receive compensation and benefits pursuant to the Company’s Amended and Restated Executive Severance Pay Plan.
The Company also entered into an amendment to the letter agreement with Mr. Beringause, dated September 24, 2019 (the “Amended Offer Letter”), a copy of which is attached to this report as Exhibit 10.2 and incorporated herein by reference. The Amendment extends the time that the Compensation Committee has to determine the EBITDA target for the performance vesting stock options to be granted to Mr. Beringause in connection with his offer of employment by the Company.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
10.1 | Offer Letter dated May 8, 2019 between Dean Foods Company and Gary Rahlfs. |
10.2 | Amendment to Offer Letter, dated September 24, 2019, by and between Dean Foods Company and Eric Beringause. |
104 | Cover Page Interactive Data File included as Exhibit 101 (embedded within the Inline XBRL document) |
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.
Date: September 24, 2019 | DEAN FOODS COMPANY | |
By: | ||
/s/ Kristy N. Waterman | ||
Kristy N. Waterman | ||
Senior Vice President, General Counsel & Corporate Secretary |
Exhibit 10.1
May 8, 2019
Gary Rahlfs
Dear Gary:
I am pleased to offer you the position of Senior Vice President – Finance & Strategy (Grade 99) for Dean Foods Company. This position will report to Jody Macedonio, Executive Vice President – Chief Financial Officer, and will be based out of our Corporate Headquarters in Dallas, Texas. We look forward to having you join our team on May 28, 2019.
Here are the specifics of your assignment:
Base Salary
You will be paid $14,583.33 on a semi-monthly basis, less payroll taxes and applicable withholdings. Your salary will be reviewed annually (next in March 2020).
Annual Incentive Opportunity
As a Grade 99 executive, you will be eligible to earn an annual incentive as a participant in the Dean Foods Corporate Short-Term Incentive (STI) Plan with a 2019 target amount equal to 50% of your annualized base salary, subject to the achievement of certain financial targets as well as your performance against certain individual objectives. For the 2019 plan year, your STI payment will not be prorated and will be guaranteed at target ($175,000). The STI payment will be calculated with your annual base salary as of 12/31.
Annual Long-Term Incentive Compensation
You will be eligible for consideration for future Long-Term Incentive (LTI) grants under the Dean Foods Long Term Incentive Program. The exact amount and nature of any future long-term incentive awards will be determined by the Dean Foods Compensation Committee.
One-Time New Hire Long-Term Incentive Award
You will be eligible for a one-time prorated new hire grant under the Dean Foods Long-Term Incentive Program. The target value of your one-time grant will be $166,667.00, and will be delivered 100% in Restricted Stock Units (RSUs). We anticipate this grant will be effective on or around 6/1/2019; however, pursuant to our Long-Term Incentive Plan Guidelines, the stock price used for purposes of converting your award to shares (or target shares) will be the closing price on the date that the Compensation Committee approved the award (5/8/2019). You will receive additional details regarding your grant within 90 days of your hire date.
Paid Time Off (PTO)
You will be granted twenty (20) days of PTO per year. For 2019, your PTO will be prorated based on your actual start date. Unused PTO is not carried forward from year to year unless required by state law.
Benefits Plan
You will soon be receiving an overview of the health and welfare benefits program. Your eligibility begins on the first day of the month following 60 calendar days of employment; please note that you must complete the health and welfare benefits enrollment process within 45 days of your hire date. Once hired, if you have questions regarding the health and welfare benefits programs or eligibility, please call the Dean Foods Benefits Service Center at 877-224-4909 or go online to www.deanfoods.mercerhrs.com.
Your eligibility for 401(k) benefits will begin on the first day of the month following 60 calendar days of employment. You will receive information regarding these benefits approximately two weeks prior to your eligibility. For questions regarding 401(k) programs or eligibility, please call Fidelity Investments at 800-835-5095.
COBRA Support
Should you elect COBRA (health insurance) coverage from your previous employer, Dean Foods will reimburse you, grossed up for taxes, for your COBRA premiums (less your comparable Dean Foods contribution) until you become eligible for Dean Foods benefits (first of the month following 60 days of employment).
Supplemental Executive Retirement Plan
You will be covered by the Dean Foods Supplemental Executive Retirement Plan (SERP) under the plan rules. The SERP is a non-qualified retirement plan that provides an annual Company contribution (currently 4% of eligible excess compensation) to executives whose eligible compensation exceeds the annual IRS-mandated limit for qualified retirement plans. Company contributions are made in June/July for the prior year period. You will receive additional information upon receiving your first plan contribution.
Executive Physical
You will be eligible for a Company-paid Executive Physical every calendar year with the Cooper Institute in Dallas, Texas. To schedule your physical, call 972.560.3227 and reference Dean Foods.
Insider Trading
As a Senior Vice President, you will have access to sensitive business and financial information. Accordingly, from time to time and in accordance with the company's Insider Trading Policy, you will be prohibited from trading Dean Foods’ securities (or, in some circumstances, the securities of companies doing business with Dean Foods).
Change-In-Control Provisions
You will be provided a Change in Control agreement comparable to that currently provided to other Dean Foods Senior Vice Presidents.
New Hire Process
This offer of employment is contingent upon your submission to and successful completion of a background check and drug screen. By signing this offer letter, you represent that there is no agreement or promise in place between you and any other company (for example, a non-competition agreement) that would prohibit you from working for Dean Foods. You are also required to comply with the Dean Foods Code of Ethics as a condition of employment, and you understand and agree that you are not to use or disclose the confidential or proprietary information of any prior employer while performing your job with Dean Foods. You also agree that to the extent you have any prohibitions on solicitation of customers or employees from your prior employer, you agree that you will honor those provisions for the allotted time in any relevant agreements.
Conclusion
Gary, I am very excited about the opportunities at Dean Foods and very excited to have you be a part of our team. I am confident that with your experience, skills, vision and standards, you will make significant contributions to our company in the years to come.
Best regards,
/s/ Jose Motta | |
Jose Motta | |
SVP, Human Resources | |
Dean Foods |
2
Agreed and accepted: | |
/s/ Gary Rahlfs | |
Gary Rahlfs | |
March 8, 2019 | |
Date |
cc. David Bruns
Jody Macedonio
Jose Motta
3
Exhibit 10.2
AMENDMENT TO OFFER LETTER
This Amendment to Offer Letter, dated to be effective as of September 24, 2019 (the “Amendment”), amends the Offer Letter dated July 23, 2019 (the “Offer Letter”) between Eric Beringause (“Beringause”) and Dean Foods Company, a Delaware corporation (the “Company”).
WHEREAS, Beringause was retained under the Offer Letter by the Company to serve as its President and Chief Executive Officer; and
WHEREAS, the Parties desire to amend the Offer Letter to clarify certain terms relating to an inducement grant to be made to Beringause.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and in the Offer Letter, the receipt and sufficiency of which are hereby acknowledged, Beringause and the Company hereby agree as follows:
1. The section of the Offer Letter entitled “Inducement Grant” is hereby deleted in its entirety and replaced with the following revised section:
“Inducement Grant
You will receive an Inducement Grant consisting of Performance Vesting Stock Options (the “Performance Options”). The total number of Performance Options will be equal to $3,000,000.00 divided by the Company’s closing stock price one business day before your Start Date. The exercise price for the Performance Options shall be equal to the Company’s closing stock price one business day before your Start Date.
The Performance Options shall vest as follows:
· | 50% of the Performance Options will vest based on the Company’s attainment of an EBITDA target for the 2020 calendar year, such EBITDA target to be established and approved by the Compensation Committee not later than March 15, 2020; and | |
· | 50% of the Performance Options will vest based on the Company’s attainment of an EBITDA target for the 2021 calendar year, such EBITDA target to be established and approved by the Compensation Committee not later than March 15, 2020. |
The total number of Performance Options that will vest at the end of each annual measurement period will be calculated using a 2:1 leverage factor on EBITDA actually delivered versus the corresponding EBITDA target, starting with a minimum amount of Performance Options equivalent to 50% of the total stock options originally granted. The maximum number of shares that could potentially be delivered under the Inducement Grant is equivalent to the total Performance Options originally granted. You will receive additional details regarding your grant not later than March 30, 2020.”
2. Any capitalized terms not defined herein shall be given the meanings assigned to them in the Offer Letter.
3. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original but both of which together shall constitute one and the same instrument. The facsimile or e-mail transmission of any signed original counterpart of this Amendment, and transmission or re-transmission of any signed facsimile or e-mail transmission, shall be the same as delivery of an original. At the request of either party, the parties hereto will confirm facsimile and e-mail transmitted signatures by signing an original document for delivery between them.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to be effective as of the date specified above, regardless of the date of execution.
DEAN FOODS COMPANY | ||
By: | /s/ Kristy N. Waterman | |
Kristy N. Waterman Senior Vice President, General Counsel & Corporate Secretary |
||
/s/ Eric Beringause | ||
ERIC BERINGAUSE |
Cover |
Sep. 23, 2019 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Amendment Flag | false |
Document Period End Date | Sep. 23, 2019 |
Entity File Number | 1-12755 |
Entity Registrant Name | Dean Foods Company |
Entity Central Index Key | 0000931336 |
Entity Tax Identification Number | 75-2559681 |
Entity Incorporation, State or Country Code | DE |
Entity Address, Address Line One | 2711 North Haskell Ave. |
Entity Address, Address Line Two | Suite 3400 |
Entity Address, City or Town | Dallas |
Entity Address, State or Province | TX |
Entity Address, Postal Zip Code | 75204 |
City Area Code | 214 |
Local Phone Number | 303-3400 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Title of 12(b) Security | Common Stock, $.01 par value |
Trading Symbol | DF |
Security Exchange Name | NYSE |
Entity Emerging Growth Company | false |
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