Prestige Brands Holdings, Inc. Form 8-K filed January 19, 2007
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): January
12, 2007
PRESTIGE
BRANDS HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
001-32433
|
20-1297589
|
|
(State
or other jurisdiction
|
(Commission
File Number)
|
(IRS
Employer
|
|
of
incorporation)
|
|
Identification
No.)
|
90
North Broadway, Irvington, New York 10533
(Address
of principal executive offices, including Zip Code)
(914)
524-6810
(Registrant’s
telephone number, including area code)
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:
[
]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
[
]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Item
1.01 Entry into a Material Definitive Agreement.
Second
Supplemental Indenture
On
January
15, 2007, Prestige Brands Holdings, Inc. (the “Company”) entered into (i) a
Second Supplemental Indenture, dated as of December 19, 2006 (the “Second
Supplemental Indenture”), by and among Prestige Brands, Inc. (“PBI”), U.S. Bank,
National Association (the “Trustee”), the Company, Dental Concepts LLC (“Dental
Concepts”) and Prestige International Holdings, LLC (“PIH”); and (ii) a Guaranty
Supplement, dated as of December 19, 2006 (the “Indenture Guaranty Supplement”).
Each of PBI, Dental Concepts and PIH is a wholly-owned subsidiary of the
Company. The Second Supplemental Indenture supplements and amends the Indenture,
dated as of April 6, 2004, by and among PBI, the Trustee and the guarantors
parties thereto, as supplemented and amended by the Supplemental Indenture
dated
as of October 6, 2004 by and among PBI, the Trustee and Vetco, Inc.
(collectively, the “Indenture”), which provided for the issuance of PBI’s 9 ¼%
Senior Subordinated Notes due 2012 (the “Indenture Notes”). As of January 15,
2007, approximately $128,913,750 is outstanding (including accrued interest
of
$2,913,750) under the Indenture Notes and the Indenture. The Indenture Notes
bear interest at the rate of 9 ¼% interest per annum. Interest on the Indenture
Notes are payable on April 15 and October 15 of each year until the Indenture
Notes mature on April 15, 2012 or are otherwise earlier redeemed or accelerated.
Additional interest shall be payable on any defaulted interest under the
Indenture Notes. Future payments due under the Indenture Notes may be, or in
certain cases will be, accelerated if an Event of Default (as defined in the
Indenture) occurs. The Indenture is filed as Exhibit 4.1 to PBI’s Registration
Statement on Form S-4 filed with the Commission on July 6, 2004.
Pursuant
to
the terms of the Second Supplemental Indenture and the Indenture Guaranty
Supplement, each of the Company, Dental Concepts and PIH agreed to guaranty
all
of PBI’s obligations set forth in the Indenture Notes and the Indenture.
The
Second
Supplemental Indenture also amended the covenant requiring Prestige Brands
International, LLC (“Prestige Brands International”) to file periodic reports
with the Commission pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”). So long as the Company or any
other guarantor is required to file periodic reports under Section 13 or 15(d)
of the Exchange Act that are substantially the same as the periodic reports
that
would otherwise be required to be filed pursuant to the Indenture by Prestige
Brands International with the SEC, Prestige Brands International shall not
be
required to file such reports with the Commission.
Supplement
to Credit Agreement
On
January
15, 2007, the Company, PIH and Dental Concepts entered into a Joinder Agreement,
dated as of December 19, 2006 (the “Joinder Agreement”), and a Guaranty
Supplement, dated as of December 19, 2006 (the “Credit Agreement Guaranty
Supplement”),
each in favor of Citicorp North America, Inc., as Administrative Agent
(“Citicorp”). Pursuant to the terms of the Joinder Agreement and the Credit
Agreement Guaranty Supplement, each of the Company, Dental Concepts and PIH
agreed to become a party to the Pledge and Security Agreement, dated as of
April
6, 2004 (the “Security Agreement”), by PBI and certain of its affiliates in
favor of Citicorp, and the Guaranty, dated as of April 6, 2004 (the “Credit
Agreement Guaranty”), among certain affiliates of PBI and acknowledged by
Citicorp. The Security Agreement and the Credit Agreement Guaranty secure the
performance by PBI of its obligations under the Credit Agreement, dated as
of
April 6, 2004 (the “Credit Agreement”), as amended, among PBI, Prestige Brands
International, the Lenders (as defined in the Credit Agreement), the Issuers
(as
defined in the Credit Agreement) and Citicorp, Bank of America, N.A., as
Syndication Agent, and Merrill Lynch Capital, a division of Merrill Lynch
Business Financial Services Inc., as Documentation Agent, by granting security
interests to Citicorp in collateral owned by PBI and certain of its affiliates
and providing guaranties of such obligations by certain of PBI’s affiliates to
Citicorp.
As
of January
15, 2007, approximately $348,786,541 of Tranche B Loans (as defined in the
Credit Agreement) is outstanding (including accrued interest of $3,549,041)
under the Credit Agreement and the promissory notes executed in connection
therewith (the “Bank Notes”). The Bank Notes bear interest at variable rates in
accordance with the terms of the Credit Agreement and such interest and any
applicable amortization payments are generally paid quarterly. The Tranche
B
Loans mature on April 6, 2011 unless they are prepaid or accelerated in
accordance with the terms of the Credit Agreement. Additional interest in the
amount of 2% shall be payable by PBI under certain circumstances upon the
occurrence of an Event of Default (as defined in the Credit Agreement). Future
payments due under the Bank Notes may be, or in certain cases will be,
accelerated if an Event of Default occurs. The Credit Agreement is filed as
Exhibit 10.1 to the Company’s Form S-1 filed with the Commission on July 28,
2004.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
Reference
is
hereby made to the disclosures in Item 1.01 above of this Form 8-K which is
incorporated herein by reference.
Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
On
January
12, 2007, Peter C. Mann, the Chairman of the Board, Acting Chief Executive
Officer and President of the Company resigned from such positions effective
as
of January 19, 2007. Notwithstanding the resignation by Mr. Mann from his
positions as Chairman of the Board, Acting Chief Executive Officer and
President, Mr. Mann will remain a member of the Board of Directors of the
Company. Effective as of January 19, 2007, Mr. Mann’s salary will be reduced to
$225,000 per annum and shall be payable in accordance with the terms of the
Senior Management Agreement, dated as of March 21, 2006, by and among the
Company, PBI and Mr. Mann.
On
January 12, 2007, the Company entered into an Employment Agreement (the
“Employment Agreement”), effective as of January 19, 2007 (the “Effective
Date”), with Mark Pettie. Subject to the terms and conditions of the Employment
Agreement, Mr. Pettie shall serve as the Company’s Chairman of the Board and
Chief Executive Officer through March 31, 2008. Pursuant to the terms of the
Employment Agreement, Mr. Pettie’s base salary shall be $425,000 per annum,
subject to periodic review by the Board of Directors of the Company, which
first
such review shall take place during or before April 2008.
During
the term of the Employment Agreement, Mr. Pettie shall be entitled to
participate in all incentive, savings and retirement plans, practices, policies
and programs applicable generally to senior executive officers of the Company,
and on the same basis as such senior executive officers, except as to benefits
that are specifically applicable to Mr. Pettie pursuant to his Employment
Agreement. With regard to the Company’s annual bonus plan, Mr. Pettie shall be
entitled to an annual bonus (including a guaranteed prorated target bonus of
no
less than $62,877 for the fiscal year ending March 31, 2007 based upon days
of
service from the Effective Date through March 31, 2007), the amount of which
shall be determined by the Company’s Compensation Committee. During the term of
the Employment Agreement, Mr. Pettie’s annual target (subject to such
performance and other criteria as may be established by the Company’s
Compensation Committee) bonus shall be no less than 75% of base salary and
the
maximum bonus shall be no less than 150% of base salary; provided, that any
bonus payable for the fiscal year ending March 31, 2008 shall be reduced by
any
amounts paid to Mr. Pettie as a retention bonus in accordance with the terms
of
the Employment Agreement.
Pursuant
to the terms of the Employment Agreement, Mr. Pettie and his eligible dependents
shall be eligible for participation in, and shall receive all benefits under,
the Company’s welfare benefit plans, practices, policies and programs. Mr.
Pettie shall also be entitled to receive executive perquisites, fringe and
other
benefits as are provided to the senior most executives and their families under
any of the Company’s plans and/or programs and such other benefits as are
customarily available to the Company’s senior executives. In addition, Mr.
Pettie shall also receive, to the extent he continues to be employed by the
Company on the relevant dates, a retention bonus in the amount of $75,000 on
each of April 1, 2007 and 2008. Furthermore, beginning April 2007, Mr. Pettie
shall participate to the same extent as other senior executives in awards under
the Company’s 2005 Long-Term Equity Incentive Plan (“LTIP”). Mr. Pettie’s LTIP
award shall have at the time of grant a value of 150% of Mr. Pettie’s total cash
compensation during the fiscal year immediately preceding the date of the LTIP
award. In April 2007, the Company shall grant a LTIP award, consisting of
restricted stock, with a value of $1,125,000, subject to the terms and
conditions of the LTIP. Any future LTIP awards to Mr. Pettie beginning April
1,
2008 shall be determined in accordance with the prevailing practice applicable
to senior executives. Upon a Change in Control (as defined in the LTIP), all
awards to Mr. Pettie under the LTIP vest with no requirement that Mr. Pettie’s
employment with the Company has terminated. In addition to the foregoing, upon
receipt of appropriate written documentation, the Company will reimburse Mr.
Pettie up to
$15,000
for reasonable and customary legal fees and expenses incurred by him with
respect to the negotiation and execution of the Employment Agreement.
The
Employment Agreement may be terminated (i) by the Company for Cause (as defined
in the Employment Agreement), without Cause or due to Mr. Pettie’s Disability
(as defined in the Employment Agreement); (ii) by Mr. Pettie for Good Reason
(as
defined in the Employment Agreement) or no reason; or (iii) upon the death
of
Mr. Pettie.
In
the
event the Company terminates Mr. Pettie’s employment for Cause, the Company
shall have no liability to Mr. Pettie other than his accrued base salary through
the date of termination and any other applicable benefits. In the event the
Employment Agreement is terminated due to Mr. Pettie’s death or Disability, or
Mr. Pettie terminates the Employment Agreement without Good Reason, the Company
shall have no liability to Mr. Pettie other than the payment of Accrued
Obligations (as defined in the Employment Agreement) and any other applicable
benefits. With regard to a termination of the Employment Agreement due to the
death or Disability of Mr. Pettie, any award granted under the LTIP shall
immediately vest upon Mr. Pettie’s death or Disability.
In
the
event Mr. Pettie is terminated by the Company without Cause, or Mr. Pettie
terminates the Employment Agreement for Good Reason, the Company shall pay
to
Mr. Pettie (i) cash in an aggregate amount equal to the sum of (a) Mr. Pettie’s
base salary through the date of termination; (b) any accrued expenses and
vacation pay; and (c) any deferred compensation, as applicable; (ii) in
installments ratably over 12 months in accordance with the Company’s normal
payroll practices (or in a lump sum with the consent of Mr. Pettie), the
aggregate amount equal to the sum of (a) Mr. Pettie’s base salary in effect as
of the date of termination; and (b) Mr. Pettie’s Applicable Annual Bonus (as
defined in the Employment Agreement); and (iii) cash in the aggregate amount
equal to the Prorated Unvested LTIP Award Value (as defined below) for each
LTIP
award; provided, that with respect to clause (iii), such termination occurs
prior to March 31, 2010. In addition to the foregoing, Mr. Pettie shall be
entitled to participate in the Company’s life, medical and disability insurance
programs on the same basis as an active employee of the Company for up to 12
months after the date of termination. Thereafter, Mr. Pettie shall be entitled
to continuation of benefits pursuant to the provisions of COBRA. “Prorated
Unvested LTIP Award Value” shall equal the product of (i) a fraction, the
numerator of which shall be the number 1 if Mr. Pettie has been employed for
12
months or less from the applicable grant date of the LTIP award in question
(the
“Grant Date”), the number 2 if Mr. Pettie has been employed for more than 12
months but less than 24 months from the Grant Date, and the number 3 if Mr.
Pettie has been employed for more than 24 months from the Grant Date, and the
denominator of which shall be the number 3; multiplied by (ii) the value (based,
in the case of restricted stock, upon the closing market price of the Company’s
common stock on the day prior to the date of termination of employment) of
the
unvested portion of each LTIP award.
The
Employment Agreement also contains certain confidentiality, non-competition
and
non-solicitation provisions as well as other provisions that are customary
for
an executive employment agreement.
Mr.
Pettie, who is 50 years old, served as the President, Dairy Foods Group for
Conagra Foods from 2005 to 2006 where he was responsible for all aspects of
marketing, finance, sales, operations, research and development and human
resources. From 1981 to 2004, Mr. Pettie held various positions of increasing
responsibility at Kraft Foods and was appointed Executive Vice President/General
Manager of Kraft Foods’ Coffee Division in 2002. As the Executive Vice
President/General Manager of Kraft Foods’ Coffee Division, Mr. Pettie was
responsible for all aspects of sales, marketing, strategy, finance, operations,
green coffee procurement and human resources for the division. Mr. Pettie
received a M.B.A. from Cornell University and a B.S. from the State University
of New York at Binghamton.
Item
7.01 Regulation FD Disclosure.
On
January 12, 2007, the Company issued a press release announcing the resignation
of Mr. Mann as Chairman of the Board, Acting Chief Executive Officer and
President and the appointment of Mr. Pettie as Chairman of the Board and Chief
Executive Officer, which is furnished to the Commission as Exhibit 99.1 to
this
Current Report on Form 8-K and is incorporated herein as if copied verbatim.
Item
9.01 Financial Statements and Exhibits.
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Exhibit
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Description
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99.1
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Press
Release dated January 12, 2007.
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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.
| Dated: January 19, 2007 |
PRESTIGE
BRANDS HOLDINGS, INC.
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By: /s/
Charles N. Jolly |
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Name: Charles N.
Jolly |
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Title: General Counsel and
Secretary |
EXHIBIT
INDEX
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Exhibit
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Description
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99.1
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Press
Release dated January 12, 2007.
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