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
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Date of report (Date of earliest event reported) | March 23, 2015 |
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DARLING INGREDIENTS INC. |
(Exact Name of Registrant as Specified in Charter) |
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Delaware | 001-13323 | 36-2495346 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
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251 O’CONNOR RIDGE BLVD., SUITE 300, IRVING, TEXAS | 75038 |
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Registrant’s telephone number, including area code: | (972) 717-0300 |
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):
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¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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Item 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
On March 23, 2015, Darling Ingredients Inc. (the “Company”) entered into an amendment (the “Amendment”) to the Amended and Restated Employment Agreement dated as of January 1, 2009 (the “Agreement”) between the Company and Randall C. Stuewe, the Company’s Chairman and Chief Executive Officer (“Mr. Stuewe”). The Amendment eliminates a “modified single trigger” provision regarding change in control severance benefits and certain excise tax gross-up protection that had been in the Agreement.
Under the Agreement before the Amendment, Mr. Stuewe could trigger severance benefits by a voluntary termination for any reason within 90 days following a change of control of the Company. This type of severance trigger is sometimes referred to as a “modified single trigger.” As amended, following a change of control of the Company, Mr. Stuewe is now entitled to the severance benefits under the Agreement if within twelve months following such change of control, either the Company terminates Mr. Stuewe’s employment without cause or Mr. Stuewe resigns for “good reason”, as defined in the Agreement. The definition of “good reason” contained in the Agreement has been modified to eliminate the prior “modified single trigger” provision and to now be limited to the following adverse employment events or actions: (i) any material reduction in Mr. Stuewe’s base salary, (ii) assignment to Mr. Stuewe of substantial duties materially inconsistent with his position as Chief Executive Officer or his experience or his demotion to a lesser position, (iii) the Company’s failure to nominate Mr. Stuewe to the Board or removal of Mr. Stuewe from the Board (other than for cause or because of legal requirement), (iv) the Company’s failure to pay or provide any amount of compensation or any material benefit that is due pursuant to the Agreement or any plan, program, arrangement or policy with Mr. Stuewe, (v) a material increase in the indebtedness of the Company over Mr. Stuewe’s objections, (vi) any material change in the geographic location at which Mr. Stuewe must principally perform his duties for the Company, which, for purposes of the Agreement, means Mr. Stuewe’s permanent relocation to any office or location which is located outside of the Dallas/Fort Worth metropolitan area or (vii) any action or inaction that constitutes a material breach by the Company of the Agreement, including without limitation, any failure of the Company to obtain an agreement from any successor of the Company to perform the Agreement in accordance with the terms of the Agreement. A finding of good reason pursuant to the above definition is not effective unless Mr. Stuewe provides the Company with written notice within sixty calendar days of becoming aware of the facts and circumstances giving cause to the “good reason” and, if the facts and circumstances are capable of being cured, gives the Company the opportunity to cure within thirty days of the notice.
Under the Agreement before the Amendment, the Company was required to make a gross-up payment to Mr. Stuewe sufficient to cover any excise tax required by Sections 280G and 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) if he received payments in connection with a change of control of the Company triggering the excise tax. The Amendment eliminates this right to an excise tax gross-up. In lieu of the excise tax gross up, the Amendment adds a “best net” cut-back provision. Under this provision, if an excise tax would otherwise be triggered for Mr. Stuewe under Sections 280G and 4999 of the Code as a result of payments in connection with a change of control, the Company will either reduce the payments to the extent necessary to not trigger the excise tax, or take no action at all, whichever provides Mr. Stuewe with the greatest amount on an after-tax basis. In neither case will a gross-up payment be required.
The summary set forth above is not intended to be complete and is qualified in its entirety by reference to the full text of the Amendment attached hereto as Exhibit 10.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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Exhibit Number | | Description |
10.1 | | Amendment No. 1, dated as of March 23, 2015, to Amended and Restated Employment Agreement between Darling Ingredients Inc. and Randall C. Stuewe. |
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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.
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| DARLING INGREDIENTS INC. | |
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Date: March 25, 2015 | By: | /s/ John F. Sterling | |
| | John F. Sterling | |
| | Executive Vice President and General Counsel | |
EXHIBIT INDEX
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Exhibit Number | | Description |
10.1 | | Amendment No. 1, dated as of March 23, 2015, to Amended and Restated Employment Agreement between Darling Ingredients Inc. and Randall C. Stuewe. |
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AMENDMENT NO. 1
TO
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
(Randall C. Stuewe)
This Amendment No. 1 to Amended and Restated Employment Agreement, dated as of March 23, 2015 (this “Amendment No. 1”), is entered into by and among DARLING INGREDIENTS INC, a Delaware corporation (f/k/a Darling International Inc.) (“Employer” or the “Company”), and RANDALL C. STUEWE (the “Employee”), and relates to that certain Amended and Restated Employment Agreement, dated as of January 1, 2009 (the “Agreement”), between the Company and Employee. Capitalized terms not defined herein shall have the meanings ascribed to them in the Agreement.
RECITALS
WHEREAS, Section 17(a) of the Agreement provides that the Agreement may be modified only by a written instrument duly executed by both parties to the Agreement; and
WHEREAS, the Company and the Executive hereby specifically reference the Agreement and indicate their desire to amend the Agreement to modify the terms upon which the Executive may receive severance following a Change of Control, and in particular to remove provisions permitting the Executive to resign for any reason during a specified period following a Change of Control and to a Gross-Up Payment related thereto.
NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Executive agree as follows with respect to the Agreement:
AGREEMENT
1. The definition of “Good Reason” contained in Section 10(c)(i) of the Agreement shall be deleted in its entirety and replaced as follows:
(i)“Good Reason” shall mean, without the Employee’s consent, the occurrence of any of the following events or actions, provided that no finding of Good Reason shall be effective unless and until the Employee has provided the Employer, within sixty (60) calendar days of becoming aware of the facts and circumstances underlying the finding of Good Reason, with written notice thereof in accordance with Section 17(d) below stating with specificity the facts and circumstances underlying the finding of Good Reason and, if the basis is capable of being cured by the Employer, providing the Employer with an opportunity to cure the same within thirty (30) calendar days after receipt of such notice in accordance with Section 17(d):
(1) any material reduction in Employee’s Base Salary;
(2) assignment to Employee of substantial duties materially inconsistent with Employee’s position as chief executive officer or experience, or demotion to a lesser position;
(3) any failure to nominate the Employee to the Board or removal of the Employee from the Board (other than for cause or because of legal or regulatory requirements);
(4) Employer’s failure to pay or provide any amount of compensation or any material benefit which is due, owing and payable pursuant to the terms hereof or of any written plan, program, arrangement or policy of Employer;
(5) a material increase in the indebtedness of Employer over Employee’s objection;
(6) any material change in the geographic location at which the Employee must principally perform his duties for the Company, which, for purposes of this Agreement, means the Employee’s permanent relocation to any office or location which is located outside of the Dallas/Fort Worth metropolitan area; or
(7) any action or inaction that constitutes a material breach by the Company of this Agreement, including without limitation, any failure of the Company to obtain an agreement from any successor of the Company to perform this Agreement in accordance with this Agreement under Section 17(g).
2. The first paragraph of Section 11(f) of the Agreement shall be deleted in its entirety and replaced as follows:
If within twelve (12) months following a Change of Control, either Employer terminates Employee’s employment during the Employment Period without Cause or the Employee resigns for Good Reason (“Termination upon a Change of Control”), Employer shall pay Employee:
3. Section 13 shall be deleted in its entirety and replaced as follows:
13. Adjustments to Payments.
(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be determined that any payment or distribution by the Employer to Employee or for Employee’s benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise) (the “Payments”)
would be subject to the excise tax imposed by Section 4999 (or any successor provisions) of the Code, or any interest or penalty is incurred by Employee with respect to such excise tax (such excise tax, together with any such interest and penalties, is hereinafter collectively referred to as the “Excise Tax”), then the Payments shall be reduced (but not below zero) if and to the extent that such reduction would result in Employee retaining a larger amount, on an after-tax basis (taking into account federal, state and local income taxes and the imposition of the Excise Tax), than if Employee received all of the Payments. The Employer shall reduce or eliminate the Payments, by first reducing or eliminating the portion of the Payments which are not payable in cash and then by reducing or eliminating cash payments, in each case in reverse order beginning with payments or benefits which are to be paid the farthest in time from the determination.
(b) All determinations required to be made under this Section 13, including whether and when an adjustment to any Payments is required and, if applicable, which Payments are to be so adjusted, shall be made by a nationally recognized certified public accounting firm as may be designated by the Employer (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Employer and to Employee within fifteen (15) business days of the receipt of notice from Employee that there has been or will be a Payment, or such earlier time as is requested by the Employer. In the event that the Accounting Firm is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, Employee shall appoint another nationally recognized accounting firm to make the determinations required hereunder (which accounting firm shall then be referred to as the Accounting Firm hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Employer. If the Accounting Firm determines that no Excise Tax is payable by Employee, it shall furnish Employee with a written opinion that failure to report the Excise Tax on Employee’s applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Employer and Employee.
4. The last sentence of Section 17(j)(iv) of the Agreement shall be amended in its entirety to read as follows:
Any tax gross-up payments under Sections 11(e)(iv) or 11(f)(iv) of this Agreement (related to the payment of certain Cash Equivalent Payments for continuation of certain benefits following termination of employment without Cause or with Good Reason) shall be paid in no event later than the end of the calendar year following the year in which any income tax or other amount comprising the gross-up payment was remitted to the relevant taxing authority.
5. Except as set forth herein, the terms of the Agreement are unchanged and remain in full force and effect.
IN WITNESS WHEREOF, the parties hereby execute this Amendment No. 1 as of the date first written above.
DARLING INGREDIENTS INC.
By: /s/ John F. Sterling
Name: John F. Sterling
Title: Executive Vice President
EMPLOYEE
By: /s/ Randall C. Stuewe
Printed Name: Randall C. Stuewe
Darling Ingredients (NYSE:DAR)
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