Item 1.01. Entry into a Material Definitive Agreement.
On
On the terms and subject to the conditions set forth in the Merger Agreement, at
the effective time of the First Merger (the "First Effective Time"), each share
of common stock, par value
At the First Effective Time, each outstanding time-based restricted stock unit of Core-Mark held by a nonemployee Company director will be converted into the right to receive the Merger Consideration. Each outstanding time-based restricted stock unit of Core-Mark (other than those held by nonemployee directors of Core-Mark) and performance-based restricted stock unit of Core-Mark will be converted at such time into a corresponding restricted stock unit relating to the number of shares of Company Common Stock as determined based on an exchange ratio set forth and in accordance with the terms set forth in the Merger Agreement, in each case, that is governed by the same terms and conditions as were applicable to such restricted stock unit of Core-Mark immediately prior to the First Effective Time (with those performance-based restricted stock units of Core-Mark granted in the year in which the First Effective Time occurs converting into Company time-based restricted stock units at the greater of (i) the target level of performance or (ii) the actual level of performance as of the First Effective Time, and with those performance-based restricted stock units of Core-Mark granted prior to the year in which the First Effective Time occurs converting into Company time-based restricted stock units at the actual level of performance). Any accrued but unpaid dividend equivalents in respect of the converted Core-Mark time- and performance-based units will be assumed by the Company.
In connection with the Mergers, the Company and Core-Mark will prepare, and the Company will file a registration statement on Form S-4 (the "Registration Statement"), which will include a prospectus with respect to the shares of Company Common Stock to be issued in connection with the First Merger and a proxy statement for Core-Mark's stockholders to solicit the approval of Core-Mark stockholders to adopt the Merger Agreement.
The consummation of the Mergers is subject to certain conditions, including
(i) the adoption of the Merger Agreement by Core-Mark stockholders, (ii) the
shares of Company Common Stock to be issued in connection with the First Merger
being approved for listing on the
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The Company and Core-Mark each made customary representations, warranties and covenants in the Merger Agreement, including the obligation of the Company and Core-Mark to use their respective commercially reasonable efforts to conduct their respective businesses in the ordinary course of business and to refrain from taking specified actions without the consent of the other party.
Prior to the effective time of the Second Merger (the "Second Effective Time"), PFG has agreed to take all actions necessary so that, upon the Second Effective Time, the size of the board of directors of PFG (the "Company Board") shall increase by at least one seat and at least one member of the board of directors of Core-Mark (the "Core-Mark Board") shall be appointed to the Company Board, as selected by mutual agreement of the Company and Core-Mark, subject to certain terms in the Merger Agreement.
The Company has agreed to take all actions necessary to obtain
The Merger Agreement also contains a customary covenant restricting Core-Mark's ability to solicit competing acquisition proposals, but the Core-Mark Board is permitted to consider unsolicited competing acquisition proposals in accordance with the terms and conditions of the Merger Agreement.
The Merger Agreement contains certain termination rights for both the Company
and Core-Mark, including (i) if the Mergers are not consummated on or before
The Merger Agreement may also be terminated (i) by the Company within 10 business days after a change in the Core-Mark Board's recommendation to stockholders to adopt the Merger Agreement (a "Core-Mark Change in Recommendation") or if Core-Mark willfully and materially breaches its nonsolicitation obligations in the Merger Agreement and fails to cure such breach within certain specified periods and (ii) by Core-Mark, subject to compliance with certain terms of the Merger Agreement, in order to enter into a definitive agreement with respect to a superior proposal.
Core-Mark will be required to pay the Company a termination fee of
The Company will be required to pay Core-Mark a termination fee of
The foregoing description of the Merger Agreement, the Mergers and the transactions contemplated thereby is not complete and is subject to, and qualified in its entirety by reference to, the full text of the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and is incorporated . . .
Item 7.01. Regulation FD Disclosure.
On
In addition, on
The information under this Item 7.01, along with Exhibit 99.1 and Exhibit 99.2 attached hereto, are being furnished and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. Exhibit Number Description 2.1 Agreement and Plan of Merger, dated as ofMay 17, 2021 , by and amongPerformance Food Group Company ,Longhorn Merger Sub I, Inc. ,Longhorn Merger Sub II, LLC and Core-Mark Holding Company, Inc.* 99.1 Press Release ofPerformance Food Group Company and Core-Mark Holding Company, Inc., datedMay 18, 2021 99.2 Investor Presentation ofPerformance Food Group Company , datedMay 18, 2021 104 Cover page Interactive Data File (embedded within Inline XBRL document)
* Schedules (as similar attachments) have been omitted from this filing pursuant
to Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule will be
furnished to the
Forward-Looking Statements
This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, integration of our acquisition of Reinhart and other non-historical statements. You can identify these forward-looking statements by the use of words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "could," "seeks," "projects," "predicts," "intends," "plans," "estimates," "anticipates" or the negative version of these words or other comparable words.
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Such forward-looking statements are subject to various risks and
uncertainties. The following factors, in addition to those discussed under the
section entitled Item 1A. Risk Factors in the PFG's Annual Report on Form 10-K
for the fiscal year ended
• the material adverse impact the COVID-19 pandemic has had and is expected to continue to have on the global markets, the restaurant industry, and our business specifically; • competition in our industry is intense, and we may not be able to compete successfully; • we operate in a low margin industry, which could increase the volatility of our results of operations; • we may not realize anticipated benefits from our operating cost reduction and productivity improvement efforts; • our profitability is directly affected by cost inflation and deflation and other factors; • we do not have long-term contracts with certain of our customers; • group purchasing organizations may become more active in our industry and increase their efforts to add our customers as members of these organizations; • changes in eating habits of consumers; • extreme weather conditions; • our reliance on third-party suppliers; • labor relations and cost risks and availability of qualified labor; • volatility of fuel and other transportation costs; • inability to adjust cost structure where one or more of our competitors successfully implement lower costs; • we may be unable to increase our sales in the highest margin portion of our business; • changes in pricing practices of our suppliers; • our growth strategy may not achieve the anticipated results; • risks relating to acquisitions, including the risk that we are not able to realize benefits of acquisitions or successfully integrate the businesses we acquire; • environmental, health, and safety costs; • the risk that we fail to comply with requirements imposed by applicable law or government regulations; • a portion of our sales volume is dependent upon the distribution of cigarettes and other tobacco products, sales of which are generally declining; • if the products we distribute are alleged to cause injury or illness or fail to comply with governmental regulations, we may need to recall our products and may experience product liability claims; • our reliance on technology and risks associated with disruption or delay in implementation of new technology; • costs and risks associated with a potential cybersecurity incident or other technology disruption; • product liability claims relating to the products we distribute and other litigation; • adverse judgements or settlements;
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• negative media exposure and other events that damage our reputation; • decrease in earnings from amortization charges associated with acquisitions; • impact of uncollectibility of accounts receivable; • difficult economic conditions affecting consumer confidence; • risks relating to federal, state, and local tax rules; • the cost and adequacy of insurance coverage; • risks relating to our outstanding indebtedness; • our ability to raise additional capital; • our ability to maintain an effective system of disclosure controls and internal control over financial reporting; • the possibility that the expected synergies and value creation from the acquisition of Reinhart will not be realized or will not be realized within the expected time period; and • the following risks related to the proposed acquisition of Core-Mark ( the "Core-Mark Transaction"): • the risk thatU.S. federal antitrust clearance or other approvals required for the Core-Mark Transaction may be delayed or not obtained or are obtained subject to conditions that are not anticipated that could require the exertion of management's time and the Company's resources or otherwise have an adverse effect on the Company; • the possibility that conditions to the consummation of the Core-Mark Transaction, including approval by Core-Mark shareholders, will not be satisfied or completed on a timely basis and accordingly the Core-Mark Transaction may not be consummated on a timely basis or at all; • uncertainty as to the expected financial performance of the combined company following completion of the Core-Mark Transaction; • the possibility that the expected synergies and value creation from the Core-Mark Transaction will not be realized or will not be realized within the expected time period; • the exertion of the Company management's time and the Company's resources, and other expenses incurred and business changes required, in connection with complying with the undertakings in connection withU.S. federal antitrust clearance or other third-party consents or approvals for the Core-Mark Transaction; • the risk that unexpected costs will be incurred in connection with the completion and/or integration of the Core-Mark Transaction or that the integration of Core-Mark will be more difficult or time consuming than expected; • availability of debt financing for the Core-Mark Transaction and our refinancing plans on terms that are favorable to us; • a downgrade of the credit rating of the Company's indebtedness, which could give rise to an obligation to redeem existing indebtedness; • potential litigation in connection with the Core-Mark Transaction may affect the timing or occurrence of the Core-Mark Transaction or result in significant costs of defense, indemnification and liability; • the inability to retain key personnel; • the possibility that competing offers will be made to acquire Core-Mark; • disruption from the announcement, pendency and/or completion of the Core-Mark Transaction, including potential adverse reactions or changes to business relationships with customers, employees, suppliers or regulators, making it more difficult to maintain business and operational relationships; and • the risk that, following the Core-Mark Transaction, the combined company may not be able to effectively manage its expanded operations.
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Accordingly, there are or will be important factors that could cause actual
outcomes or results to differ materially from those indicated in these
statements. These factors should not be construed as exhaustive and should be
read in conjunction with the other cautionary statements that are included in
this release and in our filings with the
Important Additional Information and Where to Find It
In connection with the proposed transaction, the Company intends to file with
the
Participants In The Solicitation
The Company and its directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from the stockholders of Core-Mark in connection with the proposed transaction.
Information about the directors and executive officers of the Company is set
forth in its (i) Form 10-K for the fiscal year ended
Investors may obtain additional information regarding the interest of such
participants by reading the Form S-4, the Proxy Statement and other materials to
be filed with the
No Offer or Solicitation
This communication is for informational purposes only and does not constitute, or form a part of, an offer to sell or the solicitation of an offer to sell or an offer to buy or the solicitation of an offer to buy any securities, and there shall be no sale of securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.
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