UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Sections 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event
reported): October 16, 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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(I.R.S. Employer |
| of incorporation)
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Identification No.) |
814 Livingston Court
Marietta, Georgia 30067
(Address of principal executive offices)
(Zip Code)
(770) 644-3000
(Registrant’s telephone number, including area code)
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:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
o 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.
On
October 16, 2007, Graphic Packaging International Holding Sweden
AB (the “Seller”), an indirect
wholly-owned subsidiary of Graphic Packaging Corporation, entered into a Sale and Purchase
Agreement with Lagrummet December nr 1031 Aktiebolag, a company organized under the laws of Sweden
that will be renamed Fiskeby International Holding AB (the
“Purchaser”), and simultaneously completed the transactions
contemplated by such agreement. Pursuant to such Purchase
and Sale Agreement, the Purchaser will acquire all of the outstanding shares of Graphic Packaging
International Sweden AB (the “Company”). The Company and its subsidiaries are in the business of
developing, manufacturing and selling paper and packaging boards made from recycled fiber.
The Sale and Purchase Agreement specifies that the purchase price is $8.6 million and contains
customary representations and warranties of the Seller, including representations as to corporate
existence and power, due authorization, ownership of the shares of the Company, ownership and
capitalization of the Company’s subsidiaries, the accounts of the Company, the absence of certain
events between December 31, 2006 and the date of the Sale and Purchase Agreement, material
contracts, intellectual property, insurance, employment agreements and labor matters, accounts
receivable and inventory, title to assets, litigation, taxes, compliance with law and environmental
matters. The Sale and Purchase Agreement contains indemnification
provisions for certain losses incurred by the Purchaser resulting
from a breach of the warranties of the Seller. The Seller does not
have liability unless the loss for a breach of a warranty exceeds
$60,000 and until the total amount of all losses for breaches exceeds
$600,000. The Sale and Purchase Agreement also contains specific indemnification provisions with
respect to environmental and tax matters pursuant to which the Seller agrees to indemnify the
Company for any environmental liability arising out of or relating to the operation or ownership of
the properties and the business prior to the date of the agreement up to an amount of $3.0 million.
In the event of any environmental liability exceeding such amount, the Seller and the Purchaser
share the amount of such loss equally, up to a total environmental liability amount of $14.2
million. The Seller also agrees to indemnify the Purchaser against all tax obligations that relate
to or arise out of the ownership and operation of the business of the Company prior to the date of
the Sale and Purchase Agreement. The Seller’s liability for all
losses incurred by the Purchaser resulting from breaches of the
warranties or resulting from environmental claims is limited to the
purchase price.
The Sale and Purchase Agreement requires Graphic Packaging Corporation to provide certain
transition services with respect to information technology to the Company for a period of 60 days.
Graphic Packaging Corporation has also agreed to provide certain technical assistance services to the mill
pursuant to a Technical Assistance Agreement for a period of three
years after the sale, and entered into a Supply Agreement pursuant to which it will purchase its requirements for coated
recycled board in the European Union from the Purchaser at competitive prices.
The
Purchaser is affiliated with Jeffrey H. Coors, the Vice Chairman and a member of the Board
of Directors of Graphic Packaging Corporation. The Seller undertook
the sale of the Company to the Purchaser after a thorough exploration
of strategic alternatives with respect to the Company. The
transactions contemplated by the Sale and Purchase Agreement were
approved by the Audit Committee of the Board of Directors of Graphic
Packaging Corporation pursuant to its Policy Regarding Related Party
Transactions and by the full Board of Directors other than
Mr. Coors.
Item 2.06 Material Impairments.
In connection with the consummation of the sale of the Company to the Purchaser and the
preparation of financial statements for the quarter ended September 30, 2007, Graphic Packaging
Corporation will recognize a loss related to the assets of approximately $25 million.
Graphic Packaging Corporation is currently in the process of determining how much of such loss may
be attributable to impairment of the Company’s assets and business.