This excerpt taken from the CSAR 10-Q filed May 10, 2006.
In April 2006, the Company entered into an option agreement with Cascades, Inc. regarding certain components of Rittman paper machines numbers 2 and 3 (the Rittman Equipment) and the Rittman customer list. The exercise price of the option is $500 thousand. Should Cascades exercise its option regarding the Rittman Equipment, Caraustar would evaluate its options regarding how best to effectuate the sale of the remaining components of the Rittman paper machine and the remaining Rittman assets. Depending on the disposition of those assets, certain state and/or federal environmental obligations related to the Companys landfill or other portions of the property on which the Rittman facility is situated may be triggered and/or accelerated. As of May 9, 2006 the Company estimated that future costs related to the Companys environmental obligations on that property could be an additional $1.5 million which might be triggered or accelerated; however, this amount and the timing of the costs could vary depending upon a state and/or federal assessment of the site.
This excerpt taken from the CSAR 10-Q filed Nov 8, 2005.
On November 7, 2005 the Company amended its existing Change in Control Severance Agreements with its named Executives in connection with the Compensation and Benefits Committees (of the Companys Board of Directors) annual review of agreements with management. The Change in Control Severance Agreements generally afford the Company continuity of operations in the event of a change in control, which may otherwise result in the departure or distraction of management personnel to the detriment of the Company and its shareholders.
The amendments will, in the event that the there is a change in control precipitating the termination of an Executives employment, additionally require the Company to: issue cash payments to Senior Management for projected incentive plan payments equal to the average annual incentive bonus paid to the Executive in the last two years; continue health and welfare benefits to the Executive and the Executives dependents on substantially the same basis as the health and welfare benefits offered to the Executive immediately before termination; and ensure compliance with Internal Revenue Code Section 280 G.
On November 7, 2005 the Company amended its Supplemental Executive Retirement Plan (SERP) in connection with the Compensation and Benefits Committees (of the Companys Board of Directors) annual review of agreements with management. The SERP generally supplements the Companys other retirement benefits by providing to certain Executives additional retirement benefits to which they otherwise would be entitled under the registrants pension plan in the absence of limitations imposed by the Internal Revenue Code.
The November 7th amendments will: ensure compliance with Internal Revenue Code Section 409A; diminishing risks for Executives in the Plan, caused in part by the Companys decision to freeze its qualified defined benefits plan as of January 1, 2005, by adding optional forms of payment; and clarify certain plan provisions to conform with procedures and calculations under the Companys defined contribution plan and more clearly define the operation of the plan.
This excerpt taken from the CSAR 10-Q filed Aug 5, 2005.
On July 14, 2005, the Compensation and Employee Benefits Committee of the Companys Board of Directors approved an increase, effective August 1, 2005, in the base salary of the Companys President and Chief Executive Officer, Mr. Michael J. Keough, from $550,000 to $575,000.
On August 5, 2005, the Company entered into a consulting agreement with Thomas V. Brown, its immediate past president. The agreement provides that Mr. Brown will serve as a consultant for a term of one year, through July 31, 2006, unless such term is extended by mutual agreement. Mr. Brown will be paid a base rate, subject to adjustment for additional work, of $8,100 per month for services provided pursuant to the agreement. Mr. Brown has agreed to certain restrictions during the term of the agreement and for three years after, including: disclosures of confidential information; and solicitation of the Companys customers and employees. For further information regarding this agreement, see attached consulting agreement filed herewith as an exhibit.