Business Context and Reporting Period
This Form 8-K Current Report, dated August 9, 2022, is filed by Performance Food Group Company (PFGC). The filing primarily addresses significant executive officer changes, including the departure of the Chief Financial Officer and the appointment of new leadership for the Company and its subsidiary, Core-Mark Holding Company, Inc.
Key Financial Metrics
This filing does not contain financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity metrics. The document focuses exclusively on personnel changes and associated compensation arrangements.
Material Changes and Executive Appointments
- Departure of CFO: James D. Hope, Executive Vice President and Chief Financial Officer, notified the Company of his intention to retire and resign effective December 31, 2022.
- Appointment of New CFO: Patrick Hatcher was appointed as Executive Vice President and Chief Financial Officer, effective January 1, 2023. Mr. Hatcher previously served as President and Chief Operating Officer of Vistar since 2021.
- Promotion of Core-Mark CEO: Scott McPherson was appointed Executive Vice President of the Company and President and CEO of Core-Mark, effective August 10, 2022. His responsibilities now include oversight of Vistar.
Compensation, Risks, and Contingencies
James D. Hope (Retiring CFO)
- Consulting Arrangement: Mr. Hope will serve as a consultant until August 31, 2023, to assist with the transition.
- Compensation: He will receive aggregate payments of $400,000 for the consulting period, subject to the execution of a release of claims. He will also receive a cash supplement for health benefits and expense reimbursements.
- Equity and Bonus: Mr. Hope remains eligible for 50% of his fiscal 2023 annual bonus and will continue to vest in unvested equity awards. He is also eligible for "retirement" vesting of unvested awards at the conclusion of the consulting period.
- Restrictive Covenants: Subject to non-competition and non-solicitation restrictions for 12 months following the end of the consulting period.
Scott McPherson (New EVP and Core-Mark CEO)
- Employment Agreement: Entered into on September 1, 2021, with an initial two-year term that automatically extends for one-year periods.
- Compensation Structure: Includes an annual base salary of $592,251, an annual cash incentive bonus target of 100% of base salary, and an annual long-term incentive award with a target grant date value of $1,000,000.
- Severance and Vesting: As a Tier II participant in the Executive Severance Plan, his outstanding equity awards will vest if employment is terminated without cause or by him with good reason during the initial term.
- Restrictive Covenants: Subject to non-competition and non-solicitation restrictions for 18 months upon termination of employment.
Risks and Contingencies
The filing notes that there are no family relationships between the new appointees and existing directors or officers, and no material interests in transactions requiring disclosure under Item 404(a) of Regulation S-K. The primary risk relates to the transition of leadership and the execution of the consulting agreement with the departing CFO.
Investor Verification Checklist
- Verify the exact effective dates for the resignation of James D. Hope (December 31, 2022) and the appointment of Patrick Hatcher (January 1, 2023).
- Review the full text of the Consulting Agreement (Exhibit 10.1) to understand the specific conditions for the $400,000 payment and equity vesting for Mr. Hope.
- Confirm the terms of Scott McPherson's employment agreement regarding the automatic extension of the term and the specific definitions of "without cause" and "good reason" for severance eligibility.
- Monitor the transition period to ensure operational continuity at the Core-Mark and Vistar subsidiaries under the new leadership structure.