Form 8-K
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
Date
of Report (Date of earliest event reported): April 3, 2007
BERRY
PLASTICS HOLDING CORPORATION
(Exact
name of Registrant as specified in its charter)
|
BERRY
PLASTICS
CORPORATION
(Exact
name of Registrant as specified in its charter)
|
Delaware
(State
of Incorporation)
|
Delaware
(State
of Incorporation)
|
033-75706
(Commission
File Numbers)
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35-1814673
(I.R.S.
Employer Identification No.)
|
35-1813706
(I.R.S.
Employer Identification No.)
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101
Oakley Street
Evansville,
Indiana
(Address
of principal executive offices)
|
47710
(Zip
Code)
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(812)
424-2904
(Registrant’s
telephone number, including area code)
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BPC
HOLDING CORPORATION
(Former
Name or Former Address, if Changed Since Last Report)
|
N.A.
(Former
Name or Former Address, if Changed Since Last
Report)
|
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
2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Arrangement of a Registrant.
On
April
3, 2007, Berry Plastics Group, Inc. (“Berry Group”), the ultimate parent entity
of Berry Plastics Holding Corporation (“Berry Holding”) and Berry Plastics
Corporation, and Covalence Specialty Materials Holding Corp. (“Covalence
Holding”), the ultimate parent entity of Covalence Specialty Materials Corp.
(“CSMC”), completed their previously announced stock-for-stock merger (the
“Holdco Merger”). Ira Boots is the Chairman and Chief Executive Officer, and
Brent Beeler is the Chief Operating Officer, of the combined company, which
is
now known as Berry Plastics Group, Inc. (“New Berry Group”). Kip Smith, the
former Chief Executive Officer of Covalence, will continue to run the Covalence
businesses.
Immediately
following the Holdco Merger, New Berry Group contributed Berry Holding to CSMC
(the “Contribution”). In connection therewith, certain subsidiaries of Berry
Holding became guarantors of CSMC’s Senior Subordinated Notes due 2016 (the
“Covalence Notes”) pursuant to the supplemental indenture (the “CSMC First
Supplemental Indenture”) to the indenture dated as of February 16, 2006
governing the Covalence Notes (the “CSMC Indenture”). Immediately following the
Contribution, CSMC merged (the “Opco Merger”) with and into Berry Holding (“New
Berry Holding”). In connection with the Opco Merger, New Berry Holding assumed
the obligations under the Covalence Notes pursuant to the supplemental indenture
(the “CSMC Second Supplemental Indenture”) to the CSMC Indenture and CSMC First
Supplemental Indenture.
New
Berry
Holding will remain the primary obligor in respect of Berry Holding’s Second
Priority Senior Secured Fixed Rate Notes due 2014 and Second Priority Senior
Secured Floating Rate Notes due 2014 (collectively, the “Second-Lien Notes”) and
Berry Holding’s Senior Subordinated Notes due 2016 (the “Senior Subordinated
Notes”). Following the Opco Merger, certain CSMC subsidiaries guaranteed the
Second-Lien Notes pursuant to the supplemental indenture (the “Berry Holding
Second-Lien Second Supplemental Indenture”) to the indenture and first
supplemental indenture governing the Second-Lien Notes and became a party to
the
collateral agreement covering the Second-Lien Notes (the agreement pursuant
to
which the subsidiaries became a party, the “Collateral Supplement”). Such CSMC
subsidiaries also guaranteed the Senior Subordinated Notes pursuant to the
supplemental indenture (the “Berry Holding Senior Subordinated Second
Supplemental Indenture”) to the indenture and first supplemental indenture
governing the Senior Subordinated Notes.
On
April
3, 2007, CSMC entered into, and New Berry Holding, upon the Opco Merger,
succeeded to CSMC’s rights and obligations under a (i) $400 million amended and
restated revolving credit agreement (the “Revolving Facility”) with New Berry
Group, certain domestic subsidiaries of CSMC party thereto from time to time,
Bank of America, N.A. (“Bank of America”), as collateral agent and
administrative agent, the lenders party thereto from time to time, and the
financial institutions named thereto, and a (ii) $1.2 billion second amended
and
restated term loan credit agreement (the “Term Loan Facility” and, together with
the Revolving Facility, the “Facilities”) with New Berry Group, Credit Suisse,
Cayman Islands Branch (“Credit Suisse”), as collateral and administrative agent,
the lenders party thereto from time to time, and the other financial
institutions party thereto.
Pursuant
to the Facilities, on April 3, 2007, CSMC entered into, and New Berry Holding,
upon the Opco Merger, succeeded to CSMC’s rights and obligations under (i) a
second amended and restated first lien guarantee and collateral agreement (the
“Collateral Agreement”) with New Berry Group, certain subsidiaries identified as
parties thereto, and Bank of America and Credit Suisse as collateral agents,
and
(ii) an amended and restated intercreditor agreement (the “Intercreditor
Agreement”) with New Berry Group, certain subsidiaries identified as parties
thereto, Bank of America and Credit Suisse in their capacity as first lien
agents, and Wells Fargo Bank, N.A., as trustee.
The
administrative agents and certain of the parties to the Facilities and certain
of their respective
affiliates
have performed in the past, and may perform in the future, banking, investment
banking and other advisory services for Berry Holding and its affiliates from
time to time for which they have received, and will receive, customary fees
and
expenses.
Subject
to obtaining commitments from the lenders and satisfying other conditions
specified in the Revolving Facility, the borrowers may increase the aggregate
availability under the facility by $150 million. The Revolving Facility has
an
initial term of six years and, unless extended, all outstanding borrowings
will
be due and payable on April 3, 2013.
Borrowings
under the Revolving Facility will bear interest, at the borrowers’ option,
calculated according to a base rate or a Eurodollar rate, as the case may be,
plus an applicable margin. The applicable margin for a base rate borrowing
is
0.00%. Depending on the quarterly average daily availability, the applicable
margin on a Eurodollar borrowing can range from 1.00% to 1.75%.
The
borrowers under the Revolving Facility will also be required to pay a commitment
fee equal to 0.25% per annum if the average daily amount of the aggregate
available unused commitments is less than 50% of the total commitments, and
0.30% otherwise.
The
Revolving Facility contains customary representations, warranties and covenants
for a transaction of this type. Under the Revolving Facility, New Berry Holding
must maintain a consolidated fixed charge coverage ratio of at least 1.00 to
1.00 during any period when availability under the Revolving Facility falls
below 10 percent and for ten consecutive days after availability exceeds 10
percent.
Subject
to obtaining commitments from the lenders and satisfying other conditions
specified in the Term Loan Facility, New Berry Holding may increase the
aggregate availability under the Term Loan Facility by up to an amount equal
to
the greater of (i) $600 million and (ii) an aggregate principal amount such
that
the total net first lien leverage ratio of New Berry Holding does not exceed
4.00:1.00. The Term Loan Facility has an initial term of eight years and, unless
extended, all outstanding borrowings will be due and payable on April 3, 2015.
Borrowings
under the Term Loan Facility will bear interest, calculated according to a
base
rate or a Eurodollar rate, at New Berry Holding’s option, plus an applicable
margin. The applicable margin for a base rate borrowing is 1.00%. The applicable
margin on a Eurodollar borrowing is 2.00%.
The
Term
Loan Facility contains customary representations, warranties and covenants
for a
transaction of this type. It does not include any financial maintenance
covenants.
Each
of
the Facilities contains customary events of default, including a cross default
provision and a change in control provision. In the event of a default, the
applicable administrative agent may, with the consent of the requisite lenders,
or will, at the request of requisite lenders, declare the obligations under
the
relevant Facility immediately due and payable. For certain events of default
relating to insolvency and receivership, the commitments of the lenders are
automatically terminated and all outstanding obligations become due and
payable.
As
of the
date hereof, borrowings under the Term Loan Facility total $1.2 billion. The
foregoing summary of the Facilities is not complete and is qualified in its
entirety by reference to the Revolving Facility, Term Loan Facility, the
Collateral Agreement, and the Intercreditor Agreement, copies of which are
filed
as Exhibit 10.1(a), Exhibit 10.1(b), Exhibit 1(c), and Exhibit 1(d),
respectively, to this report and are incorporated herein by reference.
The
foregoing summary of the supplemental indentures is not complete and is
qualified in its entirety by reference to the CSMC Indenture, CSMC First
Supplemental Indenture, the CSMC Second Supplemental Indenture, the Berry
Holding Second-Lien Second Supplemental Indenture, the Berry Holding Senior
Subordinated Second Supplemental Indenture, and the Collateral Supplement,
copies of which are filed as Exhibits 10.1(e), 10.1(f), 10.1(g), 10.1(h),
10.1(i) and 10.1(j) and are incorporated herein by reference.
Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory
On
April
3, 2007, in connection with the Holdco Merger, Mr. Kip Smith was appointed
President of our Covalence Division. Mr. Smith, age 51, had served as President,
Chief Executive Officer and Director of Covalence Holding since June 2006.
From
June 2005 to June 2006, Mr. Smith served as Divisional President for Hexion
Specialty Chemicals, Inc., a global manufacturer of thermoset resins. From
September 2004 to May 2005, Mr. Smith served as President and Chief Operating
Officer of Resolution Performance Products LLC, a company affiliated with Apollo
Management, L.P., that is a global supplier of epoxy resins and a global
manufacturer of versatic acids and derivatives. Resolution Performance Products
LLC combined with two other entities to form Hexion Specialty Chemicals, Inc.
From March 2004 to September 2004, Mr. Smith was retired. From February 2002
to
February 2004, Mr. Smith was Chief Executive Officer and Director of NxtPhase
Corporation, a company that develops, manufactures and markets optical sensors
and digital protection/recording solutions. NxtPhase entered into receivership
under Canadian law in March 2004. From December 2001 until January 2002, Mr.
Smith was a self-employed consultant. From September 1998 to November 2001,
Mr.
Smith served in several capacities, including President, Chief Operating Officer
and director, at Ballard Power Systems, a company that designs, developments
and
manufactures zero-emission proton exchange membrane (PEM) fuel cells. Prior
to
September 1998, Mr. Smith held various positions at The Dow Chemical Company,
serving most recently as Business Vice President—Specialty
Chemicals.
Mr.
Smith’s employment will be governed by his employment agreement with Covalence
Holding, entered into on May 26, 2006. The employment agreement provides for
an
initial term of five years. Following completion of the initial term, the term
is automatically renewed for successive one-year terms unless written notice
is
given by either party at least 90 days prior to the expiration for the
applicable term. Under the employment agreement, Mr. Smith is entitled to
receive a base salary of $600,000, which may be increased annually. Mr. Smith
is
also eligible to receive an annual targeted bonus in an amount equal to 75%
of
his annual base salary, which amount may be higher or lower based on his
performance. In addition, pursuant to the Holdco Merger, Mr. Smith’s 91,772
options to purchase Covalence Holding common stock were converted into options
to acquire common stock of New Berry Group.
Mr.
Smith’s employment agreement also provides for a severance payment equal to his
base salary, divided by 18 for 18 months following a termination of his
employment for good reason or without cause (each, as defined in the agreement).
Mr. Smith’s severance payment is increased to 24 months if his employment is
terminated for good reason or without cause within one year of a change in
control (as defined in the agreement). The employment agreement also contains
confidentiality, non-solicitation and non-competition provisions.
Mr.
Smith’s employment agreement is filed as Exhibit 10.1(k) hereto and incorporated
herein by reference.
Item
8.01 Other
Events
The
information set forth in first two paragraphs of Item 2.03 above is incorporated
by reference into this Item 2.03.
A
press
release issued by Berry Group and Covalence Holding is filed as Exhibit 99.1
hereto.
Item
9.01 Financial
Statements and Exhibits.
(d)
Exhibits.
Exhibit
No.
|
Description
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10.1(a)
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U.S.
$400,000,000 Amended and Restated Credit Agreement, dated as of April
3,
2007, by and among Covalence Specialty Materials Corp., Berry Plastics
Group, Inc., certain domestic subsidiaries party thereto from time
to
time, Bank of America, N.A., as collateral agent and administrative
agent,
the lenders party thereto from time to time, and the financial
institutions party thereto.
|
10.1(b)
|
U.S.
$1,200,000,000 Second Amended and Restated Credit Agreement, dated
as of
April 3, 2007, by and among Covalence Specialty Materials Corp.,
Berry
Plastics Group, Inc., Credit Suisse, Cayman Islands Branch, as collateral
and administrative agent, the lenders party thereto from time to
time, and
the other financial institutions party thereto.
|
10.1(d)
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Amended
and Restated Intercreditor Agreement by and among Berry Plastics
Group,
Inc., Covalence Specialty Materials Corp., certain subsidiaries identified
as parties thereto, Bank of America, N.A. and Credit Suisse, Cayman
Islands Branch as first lien agents, and Wells Fargo Bank, N.A.,
as
trustee.
|
10.1(e)
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Indenture
dated as of February 16, 2006, among Covalence Specialty Materials
Corp.,
the guarantors named therein and Wells Fargo Bank, National Association,
as trustee.
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10.1(f)
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First
Supplemental Indenture dated as of April 3, 2007, among Covalence
Specialty Materials Corp. (or its successor), the guarantors identified
on
the signature pages thereto and Wells Fargo Bank, National Association,
as
trustee.
|
10.1(g)
|
Second
Supplemental Indenture dated as of April 3, 2007, among Covalence
Specialty Materials Corp. (or its successor), Berry Plastics Holding
Corporation, the guarantors identified on the signature pages thereto
and
Wells Fargo Bank, National Association, as trustee.
|
10.1(h)
|
Second
Supplemental Indenture dated as of April 3, 2007, among Berry Plastics
Holding Corporation (or its successor), the existing guarantors identified
on the signature pages thereto, the new guarantors identified on
the
signature pages thereto and Wells Fargo Bank, National Association,
as
trustee.
|
10.1(i)
|
Second
Supplemental Indenture dated as of April 3, 2007, among Berry Plastics
Holding Corporation (or its successor), the existing guarantors identified
on the signature pages thereto, the new guarantors identified on
the
signature pages thereto and Wells Fargo Bank, National Association,
as
trustee.
|
10.1(j)
|
Supplement
No. 1 dated as of April 3, 2007 to the Collateral Agreement dated
as of
September 20, 2006 among Berry Plastics Holding Corporation, each
subsidiary identified therein as a party and Wells Fargo Bank, National
Association, as collateral agent.
|
10.1(k)
|
Employment
Agreement dated May 26, 2006 between Covalence Specialty Materials
Corp.
and Layle K. Smith
|
99.1
|
Press
release issued by Berry Group, Inc. and Covalence Specialty Materials
Holding Corporation on April 3, 2007.
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SIGNATURE
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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BERRY
PLASTICS HOLDING CORPORATION
BERRY
PLASTICS CORPORATION
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|
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Date:
April
9, 2007
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By:
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/s/
James
M. Kratochvil
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Name:
James M. Kratochvil
Title:
Executive Vice President, Chief
Financial
Officer, Treasurer and Secretary
of
the entities listed above
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Exhibit
Index
Exhibit
No.
|
Description
|
10.1(a)
|
U.S.
$400,000,000 Amended and Restated Credit Agreement, dated as of April
3,
2007, by and among Covalence Specialty Materials Corp., Berry Plastics
Group, Inc., certain domestic subsidiaries party thereto from time
to
time, Bank of America, N.A., as collateral agent and administrative
agent,
the lenders party thereto from time to time, and the financial
institutions party thereto.
|
10.1(b)
|
U.S.
$1,200,000,000 Second Amended and Restated Credit Agreement, dated
as of
April 3, 2007, by and among Covalence Specialty Materials Corp.,
Berry
Plastics Group, Inc., Credit Suisse, Cayman Islands Branch, as collateral
and administrative agent, the lenders party thereto from time to
time, and
the other financial institutions party thereto.
|
10.1(d)
|
Amended
and Restated Intercreditor Agreement by and among Berry Plastics
Group,
Inc., Covalence Specialty Materials Corp., certain subsidiaries identified
as parties thereto, Bank of America, N.A. and Credit Suisse, Cayman
Islands Branch as first lien agents, and Wells Fargo Bank, N.A.,
as
trustee.
|
10.1(e)
|
Indenture
dated as of February 16, 2006, among Covalence Specialty Materials
Corp.,
the guarantors named therein and Wells Fargo Bank, National Association,
as trustee.
|
10.1(f)
|
First
Supplemental Indenture dated as of April 3, 2007, among Covalence
Specialty Materials Corp. (or its successor), the guarantors identified
on
the signature pages thereto and Wells Fargo Bank, National Association,
as
trustee.
|
10.1(g)
|
Second
Supplemental Indenture dated as of April 3, 2007, among Covalence
Specialty Materials Corp. (or its successor), Berry Plastics Holding
Corporation, the guarantors identified on the signature pages thereto
and
Wells Fargo Bank, National Association, as trustee.
|
10.1(h)
|
Second
Supplemental Indenture dated as of April 3, 2007, among Berry Plastics
Holding Corporation (or its successor), the existing guarantors identified
on the signature pages thereto, the new guarantors identified on
the
signature pages thereto and Wells Fargo Bank, National Association,
as
trustee.
|
10.1(i)
|
Second
Supplemental Indenture dated as of April 3, 2007, among Berry Plastics
Holding Corporation (or its successor), the existing guarantors identified
on the signature pages thereto, the new guarantors identified on
the
signature pages thereto and Wells Fargo Bank, National Association,
as
trustee.
|
10.1(j)
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Supplement
No. 1 dated as of April 3, 2007 to the Collateral Agreement dated
as of
September 20, 2006 among Berry Plastics Holding Corporation, each
subsidiary identified therein as a party and Wells Fargo Bank, National
Association, as collateral agent.
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10.1(k)
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Employment
Agreement dated May 26, 2006 between Covalence Specialty Materials
Corp.
and Layle K. Smith
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99.1
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Press
release issued by Berry Group, Inc. and Covalence Specialty Materials
Holding Corporation on April 3, 2007.
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