GRAPHIC PACKAGING CORPORATION
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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):
July 9, 2007
GRAPHIC PACKAGING CORPORATION
(Exact name of registrant as specified in its charter)
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| Delaware
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1-13182
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58-2205241 |
| (State or other jurisdiction
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(Commission File Number)
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(IRS Employer |
| of incorporation)
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Identification No.) |
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| 814 Livingston Court, Marietta, Georgia
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30067 |
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(Zip Code) |
Registrant’s telephone number, including area code (770) 644-3000
Not Applicable
(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:
x 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 1.01 Entry into a Material Definitive Agreement.
Transaction Agreement and Agreement and Plan of Merger
On July 9, 2007, Graphic Packaging Corporation, a Delaware corporation (the “Company”),
entered into a Transaction Agreement and Agreement and Plan of Merger (“Transaction Agreement”) by
and among the Company, Bluegrass Container Holdings, LLC, a Delaware limited liability company
(“BCH”), TPG Bluegrass IV, L.P., a Delaware limited partnership (“TPG IV”), TPG Bluegrass IV-AIV 2,
L.P., a Delaware limited partnership (“TPG IV-AIV”), TPG Bluegrass V, L.P., a Delaware limited
partnership (“TPG V”), TPG Bluegrass V-AIV 2, L.P., a Delaware limited partnership (“TPG V-AIV”),
Field Holdings, Inc., a Delaware corporation (“Field Holdings”), TPG FOF V-A, L.P., a Delaware
limited partnership (“FOF V-A”), TPG FOF V-B, L.P., a Delaware limited partnership (“FOF V-B”), BCH
Management, LLC, a Delaware limited liability company (together with Field Holdings, TPG IV, TPG
IV-AIV, TPG V, TPG V-AIV, FOF V-A, FOF V-B and any transferee of their interests in BCH, the
“Sellers”), New Giant Corporation, a Delaware corporation and wholly-owned subsidiary of the
Company (“Newco”), and Giant Merger Sub, Inc., a Delaware corporation and a wholly-owned subsidiary
of Newco (“Merger Sub”). The Transaction Agreement provides for the combination of the Company and
Altivity Packaging, LLC, a wholly-owned subsidiary of BCH, under the terms described herein and in
the Transaction Agreement attached hereto.
Under the terms of the Transaction Agreement, Merger Sub will be merged with and into the
Company (the “Merger”), and the Company will become a wholly-owned subsidiary of Newco. As a
result of the Merger, each issued and outstanding share of the Company’s common stock will be
converted into the right to receive one newly issued share of Newco common stock.
The Transaction Agreement also provides for each Seller to exchange BCH equity interests owned
by each Seller for newly issued shares of Newco common stock (the “Exchange,” and together with the
Merger, the “Transaction”). Newco will issue an aggregate of 139,445,038 shares of Newco common
stock in the Exchange to the Sellers for all of the equity interests of BCH. The total number of
shares of Newco common stock issued to Sellers is expected to constitute 40.61% of the total number
of shares of Newco common stock on a fully diluted basis, and the total number of shares of Newco
common stock issued to Giant stockholders is expected to constitute 59.39% of the total number of
shares of Newco common stock on a fully diluted basis.
The Transaction
Agreement contains customary representations and warranties by each party
thereto and covenants relating to the conduct of the Company’s
BCH’s business between the execution of
the Transaction Agreement and closing. In addition, under the terms of the Transaction Agreement,
the Company has agreed, among other things, not to (i) solicit proposals relating to alternative
business combination transactions; (ii) subject to certain exceptions relating to the Board of
Directors’ fiduciary duties, enter into discussions or an agreement concerning or provide
information in connection with any proposals for alternative business combination transactions; or
(iii) waive any standstill agreement.
The affirmative vote of a majority of the issued and outstanding shares of Company common
stock is required to approve the Merger, and under the terms of the Transaction Agreement, the
Company is required to call a meeting of the stockholders of the Company to vote on the approval of
the Merger as promptly as reasonably practicable. As more fully described below, stockholders of
the Company representing approximately 65% of the issued and outstanding shares of the Company have
entered into a voting agreement (the “Voting Agreement”) pursuant to which they have agreed to vote
their shares of the Company’s common stock in favor of the Merger. The Voting Agreement is
described in more detail below.
The Board of Directors may change its recommendation that stockholders vote in favor of the
Merger if there exists a superior proposal for an alternative business combination transaction with
the Company and the Board of Directors concludes (after consultation with its legal advisors) that
failure to change its recommendation would be reasonably expected to violate its fiduciary duties.
In addition
to the approval of the Company’s stockholders, the consummation
of the Transaction is
subject to other customary conditions, including the expiration or termination of applicable
waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and
required approvals of the German Cartel Office, and registration of the shares of Newco common
stock to be issued in the Merger under the Securities Act of 1933, as amended (the “Securities
Act”).
The Transaction Agreement provides certain termination rights to both the Company and a
representative of Sellers that include, among others, the right to terminate if: (i) the Company
breaches its non-solicitation obligations; (ii) the Board of Directors adversely changes its
recommendation that stockholders vote in favor of the Transaction; (iii) the Company’s stockholders
fail to approve the Transaction; or (iv) the Transaction does not close by March 31, 2008 (which
date may be extended to May 31, 2008 under certain circumstances). If the Transaction Agreement
is terminated, the Company may be required to pay BCH a termination fee of $35,000,000 under
certain circumstances.
The foregoing summary of the Transaction Agreement is qualified in its entirety by reference
to the text of the Transaction Agreement, which is attached hereto as Exhibit 2.1 and incorporated
herein by reference.
The Transaction Agreement has been included to provide investors and security holders with
information regarding its terms. It is not intended to provide any other factual information about
the Company, BCH or the Sellers. The representations, warranties and covenants contained in the
Transaction Agreement were made only for purposes of that agreement and as of specific dates, were
solely for the benefit of the parties to the Transaction Agreement, may be subject to limitations
agreed upon by the contracting parties, including being qualified by confidential disclosures made
for the purposes of allocating contractual risk between the parties to the Transaction Agreement
instead of establishing these matters as facts, and may be subject to standards of materiality
applicable to the contracting parties that differ from those applicable to investors. Investors are
not third-party beneficiaries under the Transaction Agreement and should not rely on the
representations, warranties and covenants or any descriptions thereof as characterizations of the
actual state of facts or condition of the Company, BCH or the Sellers, or any of their respective
subsidiaries or affiliates. Moreover, information concerning the subject matter of the
representations and warranties may change after the date of the Transaction Agreement, which
subsequent information may or may not be fully reflected in the Company’s public disclosures.
Voting Agreement
Concurrent with the execution of the Transaction Agreement, stockholders of the Company
representing approximately 65% of the issued and outstanding shares of Company common stock entered
into the Voting Agreement with BCH and the Company pursuant to which such stockholders agreed,
among other things, to vote their shares of Company common stock (i) in favor of the adoption of
the Transaction Agreement and the Merger; (ii) against any action that is in opposition to Merger
or the obligations of the Company under the Transaction Agreement; and (iii) against any
alternative business combination transaction and against any other action that would reasonably be
expected to adversely affect the Merger or the other transactions contemplated by the Transaction
Agreement.
In the event that the Company’s Board of Directors changes its recommendation that
stockholders vote in favor of the Merger in respect of a superior proposal for an alternative
business combination transaction, then the stockholders subject to the Voting Agreement have agreed
to vote 32% of the total number of outstanding shares of the Company’s common stock in favor of the
Merger. In addition, each stockholder subject to the Voting Agreement has agreed to vote its
remaining shares in a manner that is proportionate to the manner in which all other issued and
outstanding shares of the Company’s common stock not subject to the Voting Agreement are voted.
The Voting Agreement will terminate: (i) upon the closing of the Transactions; (ii) upon
termination of the Transaction Agreement in accordance with its terms; or (iii) if the parties
agree to any amendment or change to the Transaction Agreement that changes the form or reduces the
amount of consideration to be paid in the Merger.
The foregoing summary of the Voting Agreement is qualified in its entirety by reference to the
text of the Voting Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by
reference.
Rights Agreement Amendment
Immediately prior to the Company’s execution of the Transaction Agreement, the Company
executed an amendment (the “Rights Agreement Amendment”) to the Rights Agreement, dated as of
August 7, 2003 (the “Rights Agreement”) between the Company and Wells Fargo Bank Minnesota,
National Association (now known as Wells Fargo Bank, National Association). The Rights Agreement
Amendment provides that the Transaction and the Voting Agreement will not trigger the rights
provided in the Rights Agreement.
The foregoing summary of the Rights Agreement Amendment is qualified in its entirety by
reference to the text of the Rights Agreement Amendment, which is attached hereto as Exhibit 4.1
and incorporated herein by reference.
Stockholders Agreement
In connection with the Transaction, Newco entered into a Stockholders Agreement dated as of
July 9, 2007, which will become effective upon the closing of the Transaction (the “Stockholders
Agreement”), with certain Coors family stockholders (“Family Stockholders”), Clayton, Dubilier &
Rice Fund V Limited Partnership (the “CDR Fund”), EXOR Group S.A. (“EXOR”) and certain Sellers (the
Family Stockholders, CDR Fund, Exor and such Sellers, the “Covered Stockholders”) that, among other
things, (i) provides certain Covered Stockholders the right to designate members of Newco’s Board
of Directors; (ii) restricts the ability of the Covered Stockholders to transfer their shares of
Newco common stock; and (iii) limits the Covered Stockholders from acquiring additional shares of
Newco common stock and from taking certain other actions with respect to Newco.
Under the terms of the Stockholders Agreement, each of the Family Stockholders, the CDR Fund
and Exor, respectively, are entitled to designate one individual for nomination to the Newco Board
of Directors for so long as each group has not sold shares to below 3% of the fully diluted shares
of Newco common stock. Certain Sellers affiliated with TPG Capital (the “TPG Entities”) are
entitled to designate three individuals for nomination to the Newco Board of Directors so long as
they have not sold shares to below 20% of the fully diluted shares of Newco common stock in the
aggregate; two individuals if the TPG Entities have not sold shares to below than the lesser of (i)
16% of the fully diluted shares of Newco common stock in the aggregate or (ii) the percentage of
Newco common stock then held by the Family Stockholders, but not less than 10%; and one individual
for so long as TPG Entities have not sold shares to below 3% of the fully diluted outstanding
shares of Newco common stock. The chief executive officer of Newco will also be nominated for
election to the Newco Board of Directors.
Upon consummation of the Merger, Newco’s Board of Directors will consist of 13 members, which
will include seven of the nine current members of the Company’s Board of Directors. John R. Miller
will be the non-executive chairman of the Board of Directors of Newco, and each of G. Andrew Botta,
Jeffrey H. Coors, Kevin J. Conway, Harold R. Logan, Jr., David W. Scheible, and Robert W. Tieken
will become members of the Board of Directors of Newco. George Bayly, the current interim chief
executive officer of Altivity Packaging LLC, will also become a member of the Board of Directors of
Newco. The TPG Entities have the right to designate three additional directors, not yet
identified, to Newco’s Board of Directors, as described in the preceding paragraph. Additionally,
each of the Company and the TPG Entities (as a group) has the right to select one independent
director to the Newco Board of Directors, subject to the reasonable consent of the TPG Entities or
the Company, as applicable.
The Covered Stockholders are generally restricted from transferring their shares until the
expiration of a lock-up period of 180 days after closing of the Transaction. Following the lock-up
period, the Covered Stockholders may transfer their shares: (i) to Newco, if approved by the Newco
Board of Directors; (ii) to each such Covered Stockholder’s affiliates or other permitted
transferees; (iii) pursuant to a public offering; or (iv) pursuant to a transfer made in accordance
with Rule 144 of the Securities Act or that is exempt from the registration requirements of the
Securities Act to any person so long as such transferee would not own in excess of 5% of the fully
diluted shares of Newco common stock.
The Covered Stockholders are also subject to standstill provisions that generally restrict
them from acquiring any additional equity securities of Newco (or any rights to purchase equity
securities) that would increase such Covered Stockholder’s beneficial ownership of Newco common
stock on a percentage basis greater than the percentage held as of the closing. Once TPG Entities
transfer Newco common stock such that their aggregate percentage holdings of the outstanding Newco
common stock drops below 25%, and then below 15%, they may not acquire beneficial ownership on a
percentage basis of shares greater than that percentage.
The foregoing summary of the Stockholders Agreement is qualified in its entirety by reference
to the text of the Stockholders Agreement, which is attached hereto as Exhibit 4.2 and incorporated
herein by reference.
Registration Rights Agreement
In connection with the Transaction, Newco entered into a Registration Rights Agreement (the
“Registration Rights Agreement”), dated as of July 9, 2007, which will become effective upon the
closing of the Transaction, with the Covered Stockholders and certain other stockholders pursuant to which Newco agreed, upon the
request of the Covered
Stockholders, to register with the SEC the shares of Newco common stock held by the Covered
Stockholders under certain circumstances and subject to various limitations, but in no event
earlier than 180 days following the closing of the Transaction. The Covered Stockholders will also
be entitled to typical “piggyback” registration rights on registrations by Newco. Newco is
generally obligated to pay the expenses related to such registrations, except in the cases where
the Covered Stockholder requesting registration have refused to proceed with the transaction.
The foregoing summary of the Registration Rights Agreement is qualified in its entirety by
reference to the text of the Registration Rights Agreement which is attached hereto as Exhibit 4.3
and incorporated herein by reference.
Financing Transaction
The Company has obtained a debt financing commitment letter with Goldman Sachs Credit Partners
L.P., JPMorgan Chase Bank, N.A. and J.P. Morgan Securities Inc., and Bank of America, N.A. and Banc
of America Securities LLC that provides for the necessary funds to refinance certain
indebtedness of BCH and the Company in connection with the Transaction.
Information Concerning Forward-Looking Statements
Certain statements of expectations, plans and projections with respect to the Company, Newco and the
Transaction
in this filing constitute “forward-looking statements” as defined in the Private Securities
Litigation Reform Act of 1995. Such statements are based on currently available operating,
financial and competitive information and are subject to various risks and uncertainties that could
cause actual results to differ materially from historical experience and present expectations.
These risks and uncertainties include, but are not limited to the risk that stockholder or
regulatory approvals required to complete the merger are not obtained or that the Transaction may not otherwise be completed. Additional information regarding these and other
risks is contained in Graphic Packaging Corporation’s filings with the Securities and Exchange
Commission.
Important Additional Information will be Filed with the SEC
In connection with the proposed transaction, the Company expects that Newco will file with the
SEC a Registration Statement on Form S-4 that will include a proxy statement of the Company that
also constitutes a prospectus of Newco. The Company will mail the proxy statement/prospectus to
its stockholders. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS
REGARDING THE PROPOSED TRANSACTION IF AND WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION.
Security holders and other interested parties may obtain a free copy of the proxy
statement/prospectus (if and when available) and other related documents filed by the Company and
Newco with the SEC at the SEC’s web site at www.sec.gov. The proxy statement/prospectus (if and
when it becomes available) and the other documents may also be obtained for free by accessing the
Company’s web site at http://www.graphicpkg.com.
The Company, its directors and executive officers, other members of management and employees
may be deemed to be participants in the solicitation of proxies from the Company stockholders in
respect of the proposed transaction. You can find information about the Company’s executive
officers and directors in the Company’s Annual Report on Form 10-K filed with the SEC on March 2,
2007 and definitive Proxy Statement filed with the SEC on April 18, 2007. You can obtain free
copies of these documents and of the proxy statement/prospectus (when it becomes available) from
the Company by contacting its investor relations department. You may also obtain free copies of
these documents by accessing the Company’s web site or the SEC’s web site at the addresses
previously mentioned.
Additional information regarding the interests of such potential participants in the
solicitation will be included in the proxy statement/prospectus and the other relevant documents
filed with the SEC when they become available. This report shall not constitute an offer to sell or
the solicitation of an offer to buy any securities, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration
or qualification under the securities laws of any such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the requirements of Section 10 of the
Securities Act.
Item 3.03 Material Modification to Rights of Security Holders.
The discussion of the Rights Agreement Amendment in Item 1.01 is incorporated herein by
reference.
Item 8.01 Other Events
On July 10, 2007 the Company issued a press release announcing that it entered into the Merger
Agreement, provided a related presentation to investors and distributed a letter and list of
frequently asked questions to employees. A copy of these communications are furnished as Exhibits
99.1- 99.4 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| 2.1 |
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Transaction Agreement and Agreement and Plan of Merger dated as of July 9, 2007, by and among
the Company, Bluegrass Container Holdings, LLC, TPG Bluegrass IV,
L.P., TPG Bluegrass IV –
AIV 2, L.P., TPG Bluegrass V, L.P., TPG Bluegrass V – AIV 2,
L.P., TPG FOF V – A, L.P., TPG FOF
V – B, L.P., BCH Management, LLC, Field Holdings, Inc., New Giant Corporation and Giant Merger
Sub, Inc. |
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| 4.1 |
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Amendment to Rights Agreement, dated as of August 7, 2003, between the Company and Wells
Fargo Bank, National Association (formerly known as Wells Fargo Bank Minnesota, National
Association) |
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| 4.2 |
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Stockholders Agreement dated as of July 9, 2007, by and among New Giant Corporation, the
persons listed on the signature pages thereto as Family Stockholders, Clayton, Dubilier & Rice
Fund V Limited Partnership, EXOR Group S.A., TPG Bluegrass IV, L.P., TPG Bluegrass IV, Inc.,
TPG Bluegrass IV – AIV 2, L.P., TPG Bluegrass V, L.P., TPG Bluegrass V, Inc., TPG Bluegrass V
– AIV 2, L.P., TPG FOF V – A, L.P. and TPG FOF V – B, L.P., and Field Holdings, Inc. |
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| 4.3 |
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Registration Rights Agreement dated as of July 9, 2007, by and among New Giant Corporation,
the persons listed on Schedule I thereto as Family Stockholders, any of the persons listed on
Schedule I thereto as “Astros Stockholders,” Clayton, Dubilier & Rice Fund V Limited
Partnership, EXOR Group S.A., TPG Bluegrass IV, L.P., TPG Bluegrass IV, Inc., TPG Bluegrass
IV – AIV 2, L.P., TPG Bluegrass V, L.P., TPG Bluegrass V, Inc.,
TPG Bluegrass V – AIV 2,
L.P., BCH Management, LLC, TPG FOF V – A, L.P., TPG FOF V – B, L.P. |
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| 10.1 |
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Voting Agreement dated as of July 9, 2007, by and among BCH, the persons listed on the
signature pages thereto as a Family Stockholder, Clayton, Dubilier & Rice Fund V Limited
Partnership, EXOR Group S.A., and, solely for the purposes of Section 5.2 thereof, the
Company. |
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| 99.1 |
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Press Release, dated July 10, 2007 |
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| 99.2 |
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Investor Presentation, dated July 10, 2007 |
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| 99.3 |
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Employee Letter, dated July 10, 2007 |
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| 99.4 |
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List of Frequently Asked Questions, dated July 10, 2007 |
SIGNATURES
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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GRAPHIC PACKAGING CORPORATION
(Registrant) |
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Date: July 10, 2007
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By: |
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/s/ Stephen A. Hellrung |
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Name: |
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Stephen A. Hellrung |
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Title: |
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Senior Vice President, General
Counsel and Secretary |
EXHIBIT INDEX
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| Exhibit No. |
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Description |
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2.1
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Transaction Agreement and Agreement and Plan of Merger dated as of July 9, 2007, by and
among the Company, Bluegrass Container Holdings, LLC, TPG Bluegrass IV, L.P., TPG Bluegrass IV
– AIV 2, L.P., TPG Bluegrass V, L.P., TPG Bluegrass V – AIV 2, L.P., TPG FOF V – A, L.P., TPG
FOF V – B, L.P., BCH Management, LLC, Field Holdings, Inc., New Giant Corporation and Giant
Merger Sub, Inc. |
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4.1
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Amendment to Rights Agreement, dated as of August 7, 2003, between the Company and Wells
Fargo Bank, National Association (formerly known as Wells Fargo Bank Minnesota, National
Association) |
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4.2
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Stockholders Agreement dated as of July 9, 2007, by and among New Giant Corporation, the
persons listed on the signature pages thereto as Family Stockholders, Clayton, Dubilier & Rice
Fund V Limited Partnership, EXOR Group S.A., TPG Bluegrass IV, L.P., TPG Bluegrass IV, Inc.,
TPG Bluegrass IV – AIV 2, L.P., TPG Bluegrass V, L.P., TPG Bluegrass V, Inc., TPG Bluegrass V
– AIV 2, L.P., TPG FOF V – A, L.P. and TPG FOF V – B, L.P., and Field Holdings, Inc. |
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4.3
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Registration Rights Agreement dated as of July 9, 2007, by and among New Giant Corporation,
the persons listed on Schedule I thereto as Family Stockholders, any of the persons listed on
Schedule I thereto as “Astros Stockholders,” Clayton, Dubilier & Rice Fund V Limited
Partnership, EXOR Group S.A., TPG Bluegrass IV, L.P., TPG Bluegrass IV, Inc., TPG Bluegrass
IV – AIV 2, L.P., TPG Bluegrass V, L.P., TPG Bluegrass V, Inc.,
TPG Bluegrass V – AIV 2,
L.P., BCH Management, LLC, TPG FOF V – A, L.P., TPG FOF V – B, L.P. |
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10.1
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Voting Agreement dated as of July 9, 2007, by and among BCH, the persons listed on the
signature pages thereto as a Family Stockholder, Clayton, Dubilier & Rice Fund V Limited
Partnership, EXOR Group S.A., and, solely for the purposes of Section 5.2 thereof, the
Company. |
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99.1
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Press Release, dated July 10, 2007 |
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99.2
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Investor Presentation, dated July 10, 2007 |
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99.3
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Employee Letter, dated July 10, 2007 |
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99.4
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List of Frequently Asked Questions, dated July 10, 2007 |