UNITED STATES

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 3, 2016 (March 2, 2016)

 

 

Dean Foods Company

(Exact name of registrant as specified in charter)

 

Delaware

 

1-12755

 

75-2559681

(State or other jurisdiction of
incorporation)

 

(Commission
File Number)

 

(IRS Employer
Identification No.)

 

2711 North Haskell Ave., Suite 3400
Dallas, TX 75204

 

(Address of principal executive offices)(Zip Code)

 

 

Registrant’s telephone number, including area code:   (214) 303-3400

 

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:

 

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


 

Item 5.02                                            Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

(b) Departure of Directors

 

On March 2, 2016, Mr. Hector M. Nevares, a director of Dean Foods Company (the “Company”), informed the Board of Directors of his decision not to stand for re-election at the Company’s 2016 Annual Meeting of Stockholders.  Mr. Nevares will retire from the Board, effective upon the expiration of his term at the Company’s 2016 Annual Meeting of Stockholders.  Mr. Nevares currently serves on the Company’s Audit Committee and Nominating/Corporate Governance Committee.  A press release announcing his planned retirement was issued on March 2, 2016 and is filed herewith as Exhibit 99.1 to this Current Report on Form 8-K.

 

(e) Compensatory Arrangements of Certain Officers

 

Short-Term Incentive Compensation Plan

 

On March 2, 2016, the Compensation Committee (the “Committee”) of the Board of Directors of the Company established objectives for 2016 short-term incentive payments payable in 2017 to the executive officers and other employees of the Company under the Company’s 2016 Short-Term Incentive Compensation Plan.

 

Short-term incentive payments for executive officers for 2016 will be paid based on the achievement of Company financial performance objectives for 75% of the target payment and each executive officer’s individual performance objectives for the remaining 25%. The payout factor for both the financial performance component and the individual performance component of short-term incentive compensation for each executive officer ranges from zero to 200% of that officer’s target payment, depending on actual performance in 2016 against the financial performance objectives established by the Committee and the officer’s performance rating for 2016, respectively. The performance rating is determined by the achievement of the individual performance objectives established by the Committee. The maximum total payout for any executive officer under the formulas above is 200% of the executive officer’s target incentive opportunity.

 

The key Company financial performance objective for 2016 is targeted consolidated adjusted operating income. The individual performance objectives include the achievement of strategic goals based on each executive officer’s area of responsibility. The portion of the 2016 Short-Term Incentive Compensation Plan applicable to the Company’s executive officers is attached to this Form 8-K as Exhibit 10.1, and this description is qualified entirely by reference thereto.

 

Item 9.01                                            Financial Statements and Exhibits.

 

(d) Exhibits

 

10.1

 

Dean Foods Company 2016 Short-Term Incentive Compensation Plan

99.1

 

Dean Foods Company press release dated March 2, 2016

 

2


 

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: March 3, 2016

DEAN FOODS COMPANY

 

 

 

By:

 /s/ Kristy N. Waterman

 

 

Kristy N. Waterman
Vice President, Chief Counsel — Corporate and
Deputy Corporate Secretary

 

3


 

EXHIBIT INDEX

 

Exhibit No.

 

Description

 

 

 

10.1

 

Dean Foods Company 2016 Short-Term Incentive Compensation Plan

99.1

 

Dean Foods Company press release dated March 2, 2016.

 

4

Exhibit 10.1

 

DEAN FOODS CORPORATE

2016 SHORT-TERM INCENTIVE COMPENSATION PLAN

 

Purpose:

 

To (i) align employee variable cash compensation with the annual objectives of the Company, (ii) motivate employees to create sustained shareholder value, and (iii) attract talent and retain key employees with competitive cash compensation.

 

 

 

Participants:

 

Employees of Dean Foods who are in positions to influence and/or control results of the Corporation and/or their specific areas of responsibility are eligible to participate.

 

 

 

Payout Criteria:

 

The criteria for payment to Participants under this Plan and the weighting of such criteria is based on performance against financial targets, individual target incentive percentages, and performance against individual objectives as set forth below. Depending on the Participant’s role in the organization, Individual Objectives may be based on corporate, functional, business unit, or individual objectives and will be noted as Individual Objectives in the Components.

 

Participant Group

 

Components

CEO

 

- 75% Financial Objectives

EVP, CFO

 

 

EVP, COO

 

75% = Dean Foods Adjusted Operating Income

EVP, General Counsel & Secretary

 

 

EVP, Chief HR Officer

 

- 25% Individual Objectives

EVP, Supply Chain

 

 

SVP, CIO

 

 

SVP, Chief Customer Officer

 

 

SVP, Finance & CAO

 

 

SVP, Logistics

 

 

SVP, Procurement

 

 

 

 

 

All Corporate Staff not covered by another STI plan

 

 

 

Payout Scales:

 

The financial payout factor is 0% - 200% based on actual performance against approved financial objectives. The individual objective factor is 0% - 200% of actual performance against approved individual objectives. Payments under the Dean Foods Short-Term Incentive Compensation Plan are variable in nature and are not guaranteed.

 

 

 

Financial Objectives Performance Payout Factor:

 

Approved financial objectives and the range of performance for each objective for the Plan Year along with the corresponding payout factor scale based on actual performance will be included in the Administrative Guidelines for the Plan. The STI Plan Year is the same as the Dean Foods fiscal year.

 

1


 

Individual Objectives

 

Each Plan Participant has 25% of their STI target calculated against the attainment of certain specified individual objectives as determined by the Participant’s supervisor and / or Compensation Committee of the Board of Directors. Actual earned awards are based on the individual’s performance rating under the Performance Management Process and the determination of final percentage targets against which the 25% will apply.

 

 

 

Adjustment of Targets / Actuals:

 

Upon the recommendation of the CEO, the Compensation Committee may (but has no obligation to) adjust the criteria, targets, actuals, or payout scale upon the occurrence of extraordinary events or circumstances. Significant acquisitions or dispositions of assets or companies or issuances or repurchases of common stock or other equity interests may, at the Compensation Committee’s discretion, result in an adjustment to the Dean Foods financial target or plan-specific financial target.

 

 

 

Determination of Individual Target Incentive:

 

Individual target incentives for specific positions are included in the Dean Foods Compensation Program. The Company may make adjustments to an individual’s target incentive based on market conditions or business requirements, as necessary.

 

 

 

Definitions:

 

“Disability” is defined as permanent and total disability (within the meaning of Section 22(e)(3) of the Internal Revenue Service Code (“Code”).

 

 

 

 

 

“Retirement” is defined as (i) age fifty-five (55), so long as the Participant has completed at least ten (10) years of continuous service immediately prior to retirement, or (ii) age sixty-five (65).

 

 

 

Eligibility:

 

Eligibility is determined by salary grade in the Company, or as approved by the Executive Vice President Human Resources, or her designate. Participants must be employed by the Company on the last working day of the Plan Year in order to be eligible to receive an incentive award, except as otherwise provided by State law.

 

 

 

 

 

A Participant is disqualified from receiving any incentive award (financial and / or individual) under the Plan if: (1) the Participant receives a Significantly Below Target (or equivalent) performance rating for the plan year or (2) the Participant is terminated for Cause, as defined below, at any point during the Plan year or between the last working day of the Plan Year and the date the incentive award is paid, except as otherwise provided by State law.

 

2


 

 

 

For a Participant receiving a Below Target (or equivalent) performance rating for the plan year, the sum of the financial and individual award cannot exceed 100% of the Participant’s target incentive.

 

 

 

 

 

If a Participant dies, becomes disabled, or retires prior to the payment of awards or if a Participant’s job is eliminated and such job elimination makes the Participant eligible to receive benefits under a Company severance plan or policy, the Participant may receive a payout, at the time other incentive awards are paid, based on actual time in the position and actual results of the company.

 

 

 

 

 

Eligibility and individual target amounts may be prorated. A Participant’s year-end base salary will be used to calculate the incentive award in the case of those individuals actively employed by the Company on the last working day of the Plan Year. A Participant’s base salary at the time of death, disability, retirement, or job elimination will be used to calculate the prorated incentive award in those specific circumstances. All proration of incentive awards will be calculated based on whole month participation. If an employee becomes eligible to participate in the Plan, transfers between Plans, changes target participation in the Plan, or becomes ineligible to participate in the Plan between the first day of the month and the 15 th of the month, the incentive award will be calculated based on full month participation. If the eligibility change occurs between the 16 th of the month and the end of the month, the incentive award will be calculated beginning with the full calendar month following the change. There will be no award made for employees hired after December 15 th of the Plan Year.

 

 

 

“Cause” Defined:

 

For purposes of this Plan, “ Cause ” means a Participant’s (i) willful failure to perform substantially a Participant’s duties; (ii) willful or serious misconduct that has caused, or could reasonably be expected to result in, material injury to the business or reputation of the Company; (iii) conviction of, or entering a plea of guilty or nolo contendere to, a crime constituting a felony; (iv) breach of any written covenant or agreement with the Company, any material written policy of the Company or any Company code of conduct or code of ethics, or (v) failure to cooperate with the Company in any internal investigation or administrative, regulatory or judicial proceeding.

 

 

 

Repayment Provision:

 

All Plan participants agree and acknowledge that this Plan is subject to the policies that the Compensation Committee of the Dean Foods Board of Directors may adopt from time to time, with respect to the repayment to the Company of any plan benefit received, including “clawback” policies.

 

3

Exhibit 99.1

 

Dean Foods Announces Hector M. Nevares Will Not Stand for Re-Election to Board of Directors

 

Dallas, Texas, March 2, 2016

 

Dean Foods Company (NYSE: DF) today announced that director Hector M. Nevares notified the Company of his decision not to stand for re-election to the Board of Directors at the 2016 Annual Meeting of Stockholders.  He plans to retire from the Board effective upon the expiration of his current term at the 2016 Annual Meeting.

 

“Hector has been instrumental in providing strategic advice, business expertise and oversight on behalf of our shareholders for over 20 years,” said Gregg Tanner, Chief Executive Officer. “In addition, his extensive knowledge of the dairy industry has helped guide Dean Foods through significant changes over the years.  I’m sure I speak for all employees when I say that we sincerely thank him for his service and leadership,” concluded Tanner.

 

“On behalf of the Company and my fellow directors, I thank Hector for his guidance and valuable contributions to Dean Foods.  We wish him and his family the very best” said Jim Turner, Non-Executive Chairman of the Board.

 

Mr. Nevares, age 65, joined the Dean Foods Board of Directors in 1994 and served as a vice chairman of the Board from 1996 until 2001. He is currently a member of, and until his retirement will continue to serve on, the Board’s Audit Committee and Nominating/Corporate Governance Committee.

 

About Dean Foods

 

Dean Foods ®  is a leading food and beverage company and the largest processor and direct-to-store distributor of fresh fluid milk and other dairy and dairy case products in the United States. Headquartered in Dallas, Texas, the Dean Foods portfolio includes DairyPure ® , the country’s first and largest fresh, white milk national brand, and TruMoo ® , the leading national flavored milk brand, along with well-known regional dairy brands such as Alta Dena ® , Berkeley Farms ® , Country Fresh ® , Dean’s ® , Garelick Farms ® , LAND O LAKES ® * milk and cultured products*, Lehigh Valley Dairy Farms ® , Mayfield ® , McArthur ® , Meadow Gold ® , Oak Farms ® , PET ® **, T.G. Lee ® , Tuscan ®  and more. In all, Dean Foods has more than 50 national, regional and local dairy brands and private labels. Dean Foods also makes and distributes ice cream, cultured products, juices, teas, and bottled water. Almost 17,000 employees across the country work every day to make Dean Foods the most admired and trusted provider of wholesome, great-tasting dairy products at every occasion. For more information about Dean Foods and its brands, visit www.deanfoods.com.

 

*

 

The LAND O LAKES brand is owned by Land O’Lakes, Inc. and is used by license.

**

 

PET is a trademark of The J.M. Smucker Company and is used by license.

 

CONTACT: Corporate Communications, Jamaison Schuler, +1-214-721-7766; or Investor Relations, Sherri Baker, +1-214-303-3438