UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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):

August 10, 2018 (August 8, 2018)

 

 

 

Dean Foods Company

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

1-12755

 

75-2559681

(State or other Jurisdiction
of Incorporation)

 

(Commission
File Number)

 

(IRS Employer
Identification No.)

 

2711 North Haskell Avenue, Suite 3400

Dallas, Texas 75204

(Address of principal executive offices) (Zip code)

 

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

 

 

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 ( see  General Instruction A.2. below):

 

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))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company  o

 

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.  o

 

 

 


 

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

 

(e) Compensatory Arrangements of Certain Officers

 

On August 8, 2018, the Compensation Committee of the Board of Directors of Dean Foods Company, a Delaware corporation (the “ Company ”), amended certain terms of the Company’s 2018 Short-Term Incentive Compensation Plan (the “ 2018 STI Plan ”). The amended 2018 STI Plan will apply to all plan participants, including the executive officers of the Company. Given that 2018 is an important year of transition and transformation for Dean Foods, the Company wants to ensure continued employee engagement and focus on executing on the Company’s commercial agenda, cost productivity initiatives and enterprise-wide productivity plan through the balance of the year. The amended 2018 STI Plan eliminates the requirement that a minimum adjusted operating income (“ AOI ”) be achieved in 2018 as a condition to the payout of any portion of the award related to individual performance objectives. Thus, the 2018 STI Plan, as amended, now allows a potential payout to a participant for that portion of an award earned based on his or her performance of individual objectives, without regard to the Company’s financial performance in 2018 against the minimum AOI target.

 

The 2018 STI Plan, as amended, 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

 

Exhibit
Number

 

Description

10.1

 

Dean Foods Company 2018 Short-Term Incentive Compensation Plan, as amended

 

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: August 10, 2018

DEAN FOODS COMPANY

 

 

 

 

By:

/s/ Russell F. Coleman

 

 

Russell F. Coleman

 

 

Executive Vice President, General Counsel, Corporate Secretary & Government Affairs

 

3

Exhibit 10.1

 

DEAN FOODS COMPANY CORPORATE

2018 AMENDED SHORT-TERM INCENTIVE COMPENSATION PLAN

(as amended August 8, 2018)

 

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 variable cash compensation.

 

 

 

Participants:

 

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

 

 

 

Payout Criteria:

 

The criteria for payment to Participants under this short-term incentive (“STI”) compensation plan (the “STI Plan” or “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

 

(Based on Dean Foods Adjusted Operating Income Target)

EVP, General Counsel, Corporate Secretary & Govt. Affairs

 

·  25% Individual Objectives

EVP, Supply Chain

 

 

SVP, Chief Customer, Mktg & Innovation Officer

 

 

SVP, CIO

 

 

SVP, Field Sales

 

 

SVP, Finance & CAO

 

 

SVP, Frozen

 

 

SVP, Group Sales

 

 

SVP, Human Resources

 

 

SVP, Logistics

 

 

SVP, Operations

 

 

SVP, Procurement

 

 

 

All grade 10-20 and grade 99 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 STI 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.

 

 

 

Individual Objectives:

 

Each Participant has 25% of his or her 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 against individual objectives and rating under the Performance Management Process.

 


 

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 Code).

 

 

 

 

 

“Retirement” is defined as age sixty-five (65).

 

 

 

Eligibility:

 

Eligibility is determined by salary grade in the Company, or as approved by the SVP, Human Resources, or his/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 an Unsatisfactory Performance (or equivalent) 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.

 

 

 

 

 

For a Participant receiving a Needs Improvement (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 during the Plan Year, 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 15th of the month, the incentive award will be calculated based on full month participation. If the eligibility change occurs between the 16th 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 15th of the Plan Year.

 

 

 

“Cause” Defined:

 

For purposes of this Plan, “ Cause ” means a Participant’s (i) failure to perform substantially a Participant’s duties; (ii) 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.