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| DF > SEC Filings for DF > Form 8-K on 17-Oct-2012 | All Recent SEC Filings |
17-Oct-2012
Entry into a Material Definitive Agreement, Results of Operations and Financial Con
On October 12, 2012, The WhiteWave Foods Company ("WhiteWave"), a wholly-owned subsidiary of Dean Foods Company ("Dean Foods"), which subsidiary has filed a registration statement on Form S-1 relating to the proposed initial public offering of approximately 12% of WhiteWave's Class A common stock (the "IPO"), entered into a Credit Agreement, with the subsidiary guarantors identified therein, Bank of America, N.A., as administrative agent, JPMorgan Chase Bank, N.A., as syndication agent, and the other lenders party thereto (the "WhiteWave Credit Agreement").
The initial credit extensions under the WhiteWave Credit Agreement are subject
to certain conditions precedent, including (a) completion of the IPO and the
related contribution of Dean Foods' WhiteWave-Alpro business to WhiteWave,
(b) WhiteWave's consolidated net leverage ratio shall not exceed 3.65 to 1.00 on
a pro forma basis and (c) WhiteWave and its subsidiaries shall have been
released from their obligations as guarantors of Dean Foods' indebtedness,
including the Dean Foods senior credit facility and senior notes.
Subject to the terms and conditions set forth in the WhiteWave Credit Agreement, the lenders have provided WhiteWave the following senior secured credit facilities (the "Credit Facilities") in an initial aggregate principal amount of $1.35 billion: (a) a five-year revolving credit facility in the amount of up to $850 million (the "Revolving Credit Facility"), (b) a five-year term loan A-1 facility in the amount of $250 million (the "Term Loan A-1 Facility") and (c) a seven-year term loan A-2 facility in the amount of $250 million (the "Term Loan A-2 Facility"). Under the WhiteWave Credit Agreement, WhiteWave also has the right to request an increase of the aggregate commitment under the Revolving Credit Facility and to request incremental term loans under the Term Loan A-1 Facility or Term Loan A-2 Facility by up to $500,000,000, subject to specified conditions including the receipt of lender commitments. The Revolving Credit Facility will be available for the issuance of up to $75 million of letters of credit and up to $75 million for swing line loans.
Loans under the Credit Facilities will bear interest, at the election of WhiteWave, at either the base rate (as defined in the WhiteWave Credit Agreement) or LIBOR, plus the applicable interest rate margin for the applicable credit facility. The Term Loan A-1 Facility and the Revolving Credit Facility will initially bear interest at either LIBOR plus 1.75% or the base rate plus 0.75%, and the Term Loan A-2 Facility will initially bear interest at either LIBOR plus 2.00% or the base rate plus 1.00%, and, in each case, will be subject to adjustment based on WhiteWave's consolidated net leverage ratio. The WhiteWave Credit Agreement requires amortization payments in quarterly installments of the following annual percentages of outstanding term loan principal: (a) for the Term Loan A-1 Facility, 5% in year 1, 5% in year 2, 7.5% in year 3, 7.5% in year 4 and 10% in year 5, and (b) for the Term Loan A-2 Facility, 1% per year. Subject to certain exceptions and conditions described in greater detail in the WhiteWave Credit Agreement, WhiteWave will be obligated to prepay the Credit Facilities with the net cash proceeds of certain asset sales and with casualty and insurance proceeds.
The proceeds of the Credit Facilities will be used: (a) to repay amounts outstanding under intercompany notes owed to Dean Foods upon completion of the IPO, (b) to finance WhiteWave's working capital needs, and (c) for general corporate purposes of WhiteWave and its subsidiaries in the ordinary course of business, including acquisitions.
The Credit Facilities will be guaranteed by WhiteWave's existing and future domestic material restricted subsidiaries (as defined in the WhiteWave Credit Agreement), which will be substantially all of WhiteWave's wholly-owned U.S. subsidiaries (the "Guarantors"). The Credit Facilities will be secured by a first priority perfected security interest in substantially all of the assets of WhiteWave and the Guarantors, whether consisting of personal, tangible or intangible property, including a pledge of, and a perfected security interest in, (a) all of the shares of capital stock of the Guarantors and (b) 66% of the shares of the capital stock of all first-tier foreign subsidiaries that are restricted subsidiaries, in each case subject to certain exceptions set forth in the WhiteWave Credit Agreement.
Attached as Exhibit 99.1 is a release of Dean Foods preliminary financial
results for its WhiteWave-Alpro segment for the third quarter of 2012, issued
October 17, 2012. This release shall not be deemed "filed" for the purposes of
Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise
incorporated by reference into any filing pursuant to the Securities Act of
1933, or the Securities Exchange Act of 1934, as amended, except as otherwise
expressly stated in such filing.
The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
(e) On September 14, 2012, Dean Foods, as the sole stockholder of WhiteWave, approved The WhiteWave Foods Company 2012 Stock Incentive Plan (the "2012 SIP"). Pursuant to the 2012 SIP, WhiteWave may make awards to its executive officers, non-employee directors, consultants and other WhiteWave employees, including Messrs. Gregg Engles and Blaine McPeak. As set forth in Dean Foods' Current Report on Form 8-K, filed with the Securities and Exchange Commission (the "SEC") on September 18, 2012, it is expected that in connection with the IPO Messrs. Engles and McPeak will be granted certain awards of WhiteWave stock options and WhiteWave restricted stock units ("RSUs") under the 2012 SIP. A summary of the material terms of the 2012 SIP is set forth below. The description of the 2012 SIP is qualified in its entirety by reference to the full text of the 2012 SIP, which is attached hereto as Exhibit 10.2 to this Current Report on Form 8-K and incorporated by reference herein.
The purposes of the 2012 SIP are to attract and retain WhiteWave's non-employee directors, consultants, executive personnel, and other key employees of outstanding ability, to motivate them by means of performance-related incentives, and to enable them to participate in WhiteWave's growth and financial success. Eligibility to participate in the 2012 SIP is limited to WhiteWave's employees (including officers and directors who are employees), non-employee directors, and consultants, and employees, non-employee directors, and consultants of WhiteWave's subsidiaries.
Until such time as WhiteWave's board of directors determines to constitute a compensation committee, the 2012 SIP will be administered by WhiteWave's independent directors within the parameters initially established by Dean Foods and the Compensation Committee of the Dean Foods Board of Directors (the "DF Compensation Committee"), except that the DF Compensation Committee and the independent directors of the WhiteWave board will administer the 2012 SIP and determine any grants to be awarded under it prior to the completion of the IPO. Following the constitution of a compensation committee of WhiteWave's board of directors, all references in this section to "WhiteWave's independent directors" shall be deemed to refer to WhiteWave's compensation committee.
WhiteWave's independent directors will, from time to time, determine the specific persons to whom awards under the 2012 SIP will be granted, the extent of any such awards, and the terms and conditions of each award. WhiteWave's independent directors may delegate this authority, in their discretion, to WhiteWave's Chief Executive Officer or other officers, but may only delegate authority with respect to grants to individuals who are not executive officers of WhiteWave and only to the extent that such delegation is permitted under applicable law. WhiteWave's independent directors or their designee, pursuant to the terms of the 2012 SIP, also will make all other necessary decisions and interpretations under the 2012 SIP.
Under the 2012 SIP, WhiteWave's independent directors may grant awards of various types of equity-based compensation, including stock options, stock appreciation rights, restricted stock and restricted stock units, performance shares and performance units, and other types of equity-based awards.
Only WhiteWave Class A common stock, par value $0.01 per share ("Class A common stock"), may be awarded under the 2012 SIP. The maximum number of shares of Class A common stock that will be available to be awarded under the 2012 SIP is 20,000,000 shares. The maximum number of shares of Class A common stock that may be issued under the 2012 SIP with respect to incentive stock options is 1,000,000 shares. In addition, no participant may be granted awards of restricted stock, restricted stock units, performance shares, and performance units covering more than 2,000,000 shares of Class A common stock in any calendar year, and no participant may be granted options and SARs covering more than 2,000,000 shares of Class A common stock in any calendar year. These limits may be modified upon certain corporate events, including recapitalizations, in order to preserve, or prevent the enlargement of, benefits or potential benefits under the 2012 SIP, as may the awards themselves. If, following completion of the IPO, Dean Foods determines to effect a spin-off or other disposition of all or a portion of its ownership interest in WhiteWave, these limits will not apply with respect to awards that may be made under the 2012 SIP in replacement of then outstanding awards in respect of Dean Foods common stock outstanding immediately prior to the distribution or disposition. No more than $10,000,000 may be paid to any one participant with respect to cash-based awards made during a calendar year.
WhiteWave's independent directors may grant awards of performance shares or performance units under the 2012 SIP based upon the achievement of specified performance objectives or the occurrence of other events, such as a change in control, as determined by the independent directors in their discretion. The independent directors have the authority to determine other terms and conditions of the performance shares and performance units, including conditioning payment on the participant's completing a minimum period of service following the grant date. Participants may not transfer any shares underlying such awards before they vest. WhiteWave's independent directors may also grant performance awards under the 2012 SIP. Performance awards may be payable in cash or in shares of Class A common stock, and may relate to a single-year performance period, such as an annual bonus award, or multi-year periods.
WhiteWave's independent directors may establish performance goals applicable to any award, including performance awards, performance shares, and performance units. When establishing a performance goal, the independent directors will determine the performance period over which performance against the goal will be measured and the amount of cash or number or value of shares of Class A common stock that may be earned based on the level of the performance goal achieved. Additional provisions that relate to the setting of the performance goal, certifying achievement of performance against the goal and the amount earned, and exercising negative discretion to reduce the amount earned and that apply to awards made to executive officers are intended to meet the tax deductibility rules for "performance-based" compensation under Section 162(m) of the Code.
The 2012 SIP provides that the independent directors may base the performance goals upon the relative or comparative attainment of one or more of the following performance criteria (whether in absolute terms or relative to the performance of one or more similarly situated companies or a published index covering the performance of a number of companies): total shareholder return, stock price, operating earnings or margins, net earnings, earnings per share, EBITDA, net sales, return on equity, income, market share, return on investment, return on capital employed, working capital, return on invested capital, level of expenses, revenue, cash flow, and, in the case of persons who are not executive officers, such other criteria as may be determined by the independent directors. Performance criteria may be established on a company-wide basis or with respect to one or more business units, divisions, or subsidiaries. When establishing performance criteria for a performance period, the independent directors may exclude any or all charges or costs associated with restructurings of WhiteWave or any subsidiary, discontinued operations, other unusual or non-recurring items, the cumulative effects of accounting changes, or such other objective factors as the independent directors deem appropriate.
Unless otherwise determined by the independent directors or provided in an employment or individual severance agreement, if a participant's service is terminated by reason of death, disability, or retirement during the performance period, but at least one year into the performance period, the participant will be entitled to a distribution of the same number of performance awards or performance shares, as well as the value of performance units (without proration) that would have been payable for the performance period had his service continued until the end of the performance period. If a participant's service is terminated for any other reason, performance awards, performance shares, and the value of performance units relating to the relevant performance period will be immediately forfeited and cancelled (unless otherwise determined by the independent directors or provided in an employment or individual severance agreement), and, in any event, all such performance awards, performance shares, and the value of performance units will be immediately forfeited and cancelled upon termination of service for cause.
The independent directors may grant awards of restricted stock and RSUs under the 2012 SIP. Restricted stock and RSUs are forfeitable until they vest, and the participant may not transfer the restricted stock before it vests. Unless otherwise determined by WhiteWave's independent directors, restricted stock and RSUs will vest ratably over three years on each anniversary of the date of grant (subject to the participant's continued service with WhiteWave) or upon satisfaction of any additional conditions to vesting, such as the achievement of specified performance objectives or changes in control, as determined by the independent directors in their discretion. RSUs may be settled in cash or shares of Class A common stock. Unless otherwise determined by the independent directors or provided in an award, employment or individual severance agreement, if a participant's service is terminated by reason of death, disability, or retirement during the restricted period, a pro rata portion of any restricted stock or RSUs held by the participant will vest and no longer be forfeitable based on the number of full calendar months of the participant's service relative to the number of months in the restricted period at the date of termination. If a participant's service is terminated for any other reason, any restricted stock or RSUs held by the participant will be immediately forfeited . . .
(d) Exhibits
10.1 Credit Agreement, dated as of October 12, 2012, among The WhiteWave Foods
Company, the subsidiary guarantors identified therein, Bank of America,
N.A., as administrative agent, JPMorgan Chase Bank, N.A., as syndication
agent, and the other lenders party thereto
10.2 The WhiteWave Foods Company 2012 Stock Incentive Plan
99.1 Press Release issued October 17, 2012
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Statement On The WhiteWave Foods Company Registration Statement
A registration statement relating to securities of The WhiteWave Foods Company has been filed with the U.S. Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy these securities be accepted before the time the registration statement becomes effective. This Current Report on Form 8-K shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
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