KapStone Paper and Packaging Corporation (NYSE:KS) Files An 8-K Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain OfficersItem 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Compensatory Arrangements.
As previously disclosed, on January28, 2018, KapStone Paper and Packaging Corporation, a Delaware corporation (“KapStone”), WestRock Company, a Delaware corporation (“WestRock”), Whiskey Holdco,Inc., a Delaware corporation and a newly formed wholly-owned subsidiary of WestRock (“Holdco”), Kola Merger Sub,Inc., a Delaware corporation and a newly formed wholly-owned subsidiary of Holdco (“Company Merger Sub”), and Whiskey Merger Sub,Inc., a Delaware corporation and a newly formed wholly-owned subsidiary of Holdco (“Parent Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). to the Merger Agreement, and subject to the terms and conditions thereof, WestRock will acquire all of the outstanding shares of KapStone through a transaction in which: (i)Parent Merger Sub will merge with and into WestRock, with WestRock surviving such merger (the “WestRock Merger”) as a wholly-owned subsidiary of Holdco, and (ii)Company Merger Sub will merge with and into KapStone, with KapStone surviving such merger as a wholly-owned subsidiary of Holdco (the “KapStone Merger” and, together with the WestRock Merger, the “Mergers”).
In connection with the Mergers, on March23, 2018, KapStone entered into change in control severance agreements (the “Severance Agreements”) with each of Andrea K. Tarbox and Randy J. Nebel that provide for the severance payments and benefits described below upon a termination of employment by KapStone or any of its affiliates without “cause” or a resignation by the executive officer for “good reason” (in each case as defined in the applicable Severance Agreement) during the one-year period following the effective time of the Mergers. The benefits and payments described below are contingent upon the executive officer’s execution and non-revocation of a release of claims in favor of KapStone and its affiliates (which release will include an employee and customer non-solicitation obligation lasting for six months following the date of termination). If the Mergers are not successfully completed for any reason, the executive officers will not be entitled to any payment or benefit under the Severance Agreements.
to the Severance Agreements, each eligible executive officer would receive a cash severance payment, payable in a lump sum within 60 days following the date of termination, in an amount equal to a fixed amount not to exceed two times the sum of his or her (i)annual base salary plus (ii)target annual bonus. For the number of months immediately following an eligible executive officer’s date of termination (not to exceed 12 months) determined by dividing (i)the lump sum cash severance payment payable under the Severance Agreement by (ii)the executive officer’s average monthly base salary in effect as of the date of termination (such quotient to be rounded down to the nearest whole number), such eligible executive officer (and their eligible dependents) would receive health insurance benefits substantially similar to those provided to active employees immediately prior to the date of termination. During this period, such executive officer will be responsible for the payment of premiums for such benefits in the same amount as active employees. Such health insurance benefits would cease if and to the extent the executive officer becomes eligible for similar benefits by reason of new employment.
Copies of the Severance Agreements are attached as Exhibits 10.1 and 10.2 to this Current Report on Form8-K and are incorporated by reference herein. The foregoing summary of the Severance Agreements does not purport to be complete and is qualified in its entirety by reference to the Severance Agreements.
Item 8.01. Other Events.
On March 28, 2018, Holdco filed a Registration Statement on Form S-4 (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the solicitation of proxies for the special meeting of KapStone’s stockholders, at which KapStone’s stockholders will vote to approve the adoption of the Merger Agreement, among other proposals.
Additional Information Regarding the Transaction and Where to Find It
This Current Report on Form8-K does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. This Current Report on Form8-K is being filed in respect of the proposed merger transaction involving KapStone, WestRock, Holdco, Company Merger Sub and Parent Merger Sub. The proposed merger will be submitted to KapStone’s stockholders for their consideration. In connection therewith, on March 28, 2018, the parties filed the Registration Statement, which included a document that serves as a prospectus with respect to the shares that may be issued by Holdco in the proposed merger and a proxy statement of KapStone (the “proxy statement/prospectus”) and when declared effective will be mailed to KapStone’s stockholders. However, such documents are not currently available. BEFORE MAKING ANY VOTING OR ANY INVESTMENT DECISION,INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS FILED OR TO BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders may obtain free copies of the Registration Statement and the definitive proxy statement/prospectus, any amendments or supplements thereto and other documents containing important information about each of KapStone, WestRock and Holdco, once such documents are filed with the SEC, through the