Business Context and Reporting Period
Company: Graphic Packaging Holding Company
Filing Type: Form 8-K (Current Report)
Date of Report: April 1, 2012
Event: Entry into a Material Definitive Agreement regarding executive compensation and appointment.
Key Financial Metrics
This filing does not report consolidated revenue, profit, cash flow, margins, debt, or liquidity metrics. It details specific compensation terms for a new executive appointment:
- Base Salary: Minimum of $475,000 annually.
- Deferred Compensation: One-time allocation of $1,000,000 vesting over three years.
- Target Bonus: 70% of base salary.
- Severance (Without Cause/Good Reason): One year of base salary and welfare benefits, pro-rated bonus, and up to $25,000 in outplacement services.
- Change in Control Severance: Additional 0.5 years of base salary and 1.5x target bonus.
Material Changes
Executive Appointment: Stephen Scherger has been appointed as Senior Vice President, Consumer Packaging Division, effective April 1, 2012. He replaces Mike Doss, who was promoted to Executive Vice President, Commercial Operations in January 2012.
Outlook, Risks, and Contingencies
Employment Terms: The agreement has an initial one-year term with automatic annual extensions unless terminated. It includes standard non-compete, non-solicitation, and non-interference clauses for one year post-termination.
Contingencies: Specific financial payouts are contingent upon termination due to disability, death, termination without cause, or resignation for good reason. Enhanced payouts apply if termination occurs within one year of a change in control.
Investor Verification Checklist
- Verify the impact of the $1,000,000 deferred compensation allocation on the company's current and future cash flow obligations.
- Review the full text of the Employment Agreement (Exhibit 10.1) for specific performance metrics tied to the bonus structure.
- Assess the potential liability exposure regarding change-in-control severance provisions.
- Confirm the strategic rationale for the leadership transition in the Consumer Packaging Division.