Item 2.01. Completion of Acquisition or Disposition of Assets.
On September 1, 2021 (the “Closing Date”), Performance Food Group Company, a Delaware corporation (the “Company”), completed the previously announced acquisition of Core-Mark Holding Company, Inc., a Delaware corporation (“Core-Mark”), pursuant to the Agreement and Plan of Merger, dated as of May 17, 2021 (the “Merger Agreement”), by and among the Company, Longhorn Merger Sub I, Inc., a Delaware corporation and a direct, wholly owned subsidiary of the Company (“Merger Sub I”), Longhorn Merger Sub II, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of the Company (“Merger Sub II”), and Core-Mark. Pursuant to the Merger Agreement, on the Closing Date, Merger Sub I merged with and into Core-Mark (the “First Merger”), with Core-Mark continuing as the surviving corporation of the First Merger and a direct, wholly owned subsidiary of the Company (the “Surviving Corporation”). After the effective time of the First Merger (the “Effective Time”), the Surviving Corporation merged with and into Merger Sub II (the “Second Merger” and, together with the First Merger, the “Mergers”), with Merger Sub II continuing as the surviving entity of the Second Merger and a direct, wholly owned subsidiary of the Company. As a result of the Mergers, Core-Mark became a wholly owned subsidiary of the Company on the Closing Date.
Pursuant to the Merger Agreement and by virtue of the First Merger, at the Effective Time, each share of common stock, par value $0.01 per share, of Core-Mark (the “Core-Mark Common Stock”) issued and outstanding immediately prior to the Effective Time (other than any shares of Core-Mark Common Stock owned, directly or indirectly, by the Company, Core-Mark (including as treasury stock or otherwise), Merger Sub I, Merger Sub II, and any shares of Core-Mark Common Stock as to which appraisal rights have been properly exercised) was automatically canceled and converted into the right to receive (i) 0.44 (such ratio, the “Exchange Ratio”) validly issued, fully paid and nonassessable shares of the common stock, par value $0.01 per share, of the Company (“Company Common Stock”) and (ii) $23.875 in cash, without interest (the “Per-Share Cash Amount” and, collectively, the “Merger Consideration”).
At the Effective Time, each outstanding time-based restricted stock unit of Core-Mark (each, an “RSU”) held by a non-employee director, whether vested or unvested, was cancelled and converted into the right to receive the Merger Consideration. Additionally, at the Effective Time, each other outstanding RSU, whether vested or unvested, was converted into a restricted stock unit relating to a number of shares of Company Common Stock equal to the number of shares of Core-Mark Common Stock subject to the RSU multiplied by the sum of (i) the Exchange Ratio, plus (ii) the quotient of the Per-Share Cash Amount divided by the volume weighted average sale price of Company Common Stock for the ten (10) full consecutive trading days ending on and including the business day prior to the Effective Time (the “Stock Award Exchange Ratio”) and otherwise subject to the same terms and conditions (including the vesting schedule and termination-related vesting provisions) applicable immediately prior to the Effective Time.
At the Effective Time, each outstanding performance-based restricted stock unit of Core-Mark (each, a “PSU”), whether vested or unvested, was converted into a corresponding time-based restricted stock unit subject to the same terms and conditions (including with respect to termination-related vesting provisions applicable immediately prior the Effective Time, provided that the performance-based vesting conditions no longer apply), and relating to a number of shares of Company Common Stock equal to the product of (i) for PSUs granted during the 2021 calendar year, (A) the number of shares of Core-Mark Common Stock subject to such PSU immediately prior to the Effective Time that would have vested based on the achievement of the greater of (1) the applicable performance at the target level and (2) the actual level of performance as of the Closing Date, based on the achievement of the applicable performance metrics applied on a pro rata basis with respect to the applicable performance period as determined in good faith by Core-Mark’s board of directors, multiplied by (B) the Stock Award Exchange Ratio, and (ii) for PSUs granted prior to the 2021 calendar year, (A) the number of shares of Core-Mark Common Stock subject to such PSU immediately prior to the Effective Time based on the achievement of the applicable performance metrics at the actual level of performance and as determined in good faith and consistent with past practice by Core-Mark’s board of directors, multiplied by (B) the Stock Award Exchange Ratio, and in each case of the foregoing clauses (i) and (ii), with any fractional shares rounded to the nearest whole share.
The foregoing description of the Merger Agreement does not purport to be 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 filed as Exhibit 2.1 to this Current Report on Form 8-K and incorporated by reference in this Item 2.01.
