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EXHIBIT 10.25

ATTACHMENT / HOLD AGREEMENT

 

This agreement (“Agreement”) is made
and entered into as of February
2, 2018 between The Manuscript Productions, LLC
(“Company”), on the one hand, and Idc2, Inc.
(“Lender”) f/s/o Nick Cassavetes
(“Artist”), in connection with Artist’s directing
services in connection with a proposed feature film project
currently entitled “MANUSCRIPT” (the
“Project”) based on a screenplay of the same name
written by Louis Rosenberg and Joe Rosenbaum
(“Screenplay”). Company and Artist are sometimes
hereinafter collectively referred to as the “Parties”.
In consideration of the mutual promises set forth herein, the
Parties agree as follows:

 

1. Term: The term (“Initial
Term”) of this Agreement shall be the period beginning as of
the date of Artist’s signature of this Agreement including
Exhibit A - Certificate of Authorship attached hereto and
incorporated by reference herein and ending ten (10) business days
following the delivery of the Director’s Pass (as defined
below). At Company’s sole election, at any time prior to the
expiration of the Initial Term, Company shall have the option
(“Extension Option”) to extend the Initial Term until
April 30, 2018 (“Extension Term”), provided that
notwithstanding the foregoing, the Extension Term shall be extended
by one additional day beyond April 30, 2018 for each day after
February 28, 2018 that Artist has not delivered the
Director’s Pass to Company. The Initial Term, the Extension
Term (if exercised) and any extension thereof (as set forth
herein), if applicable, shall be collectively referred to herein as
the “Term.”

 

2. Development, Production and
Distribution of the Project: Company may (in Company’s
sole discretion) finance the Project independently or,
alternatively, may submit the Project to third party
studios/buyers/financiers (“Third Parties”) during the
Term for the development, production and/or other exploitation of
the Project. Artist acknowledges and agrees that he shall have no
independent right to shop the Project to any Third Parties without
Company’s prior written approval in Company’s sole
discretion. During the Term, Artist hereby agreed to perform a
director’s pass of the Screenplay (“Director’s
Pass”), which shall be due to Company on February 28,
2018.

 

3. Compensation: Two Hundred Fifty
Thousand Dollars ($250,000) payable to Lender on execution of this
Agreement and Exhibit A (“Initial Hold Fee”). The
Initial Hold Fee shall be fully applicable against the following
compensation which shall be provided for in a director agreement to
be negotiated in good faith with Lender and Artist. Provided
Company elects to extend the Initial Term into the Extension Term
then Company shall pay Lender an additional Two Hundred Fifty
Thousand Dollars ($250,000) (“Second Hold Fee”), which
shall be paid within three (3) business days of Company’s
exercise of the Extension Option by written notification to Lender
and/or Artist. The Initial Hold Fee and Second Hold Fee shall be
collectively referred to herein as the “Hold
Fee”.

 

(a) Fixed Compensation. Company
shall pay to Lender an amount equal to Two Million Dollars (US
$2,000,000.00) less all sums (including, without limitation, the
Hold Fee) previously paid to Lender (“Director Fee”)
payable on a customary 20/60/10/10 schedule.

 

(b) Contingent Compensation. In
addition to the Fixed Compensation, and subject to Lender and
Artist not being in uncured material breach, Lender shall be
entitled to receive an amount equal to seven and one-half percent
(7.5%) of one hundred percent (100%) of the “Net
Profits,” however such may be set forth and defined in the
directing agreement between Company and Lender for the services of
Artist (the “Contingent Compensation”), provided such
definition shall be no less favorable than that for any other
non-financing profit participant on the Picture.

 

1

 

 

(c) Awards Bonuses. Subject to
Lender and Artist not being in uncured material breach, in the
event. In the event that the Picture is nominated for a Golden
Globe award for “Best Picture”, Lender shall receive a
single bonus of Seventy-Five Thousand Dollars
($75,000);

 

(a) In the event that
the Picture is nominated for an Academy Award for “Best
Picture”, Lender shall receive a single bonus of Seventy-Five
Thousand Dollars ($75,000);

 

(b) In the event that
the Picture wins the Golden Globe award for “Best
Picture”, Lender shall receive a single bonus of One Hundred
Fifty Thousand Dollars ($150,000);

 

(c) In the event that
the Picture wins the Academy Award for “Best Picture”,
Lender shall receive a single bonus of One Hundred Fifty Thousand
Dollars ($150,000);

 

(d) Box Office Bonuses. Upon
further condition that the Picture is released to the general
public, and subject to Lender and Artist not being in uncured
material breach, Company shall pay Lender a “Box Office
Bonus” at such time, if ever, as the U.S. Theatrical Box
Office Gross Receipts of the Picture (hereafter
“USDBO”) reach each of the following amounts, as
reported by Variety (or, if Variety ceases to exist, as reported by
the equivalent thereof, as determined by Company in Company’s
sole reasonable discretion):

 

(a) $100,000 at
$50,000,000 USDBO

 

(b) An additional
$100,000 at $55,000,000 USDBO

 

(c) An additional
$100,000 at $60,000,000 USDBO

 

(d) An additional
$100,000 for each additional $5,000,000 earned in cumulative USDBO,
it being agreed that Lender’s Box Office Bonuses hereunder
shall not exceed, in the aggregate, $500,000.

 

For
clarity, the Box Office Bonuses shall be applicable against, and in
reduction of, the Contingent Compensation, and vice versa. All such
Box Office Bonuses due hereunder, if any, shall be payable to
Lender not later than thirty (30) days following the date that each
applicable USDBO has been reported in the applicable issue of
Variety (or, if Variety ceases to exist, the equivalent thereof, as
set forth above).

 

4. Attachment: During Term, if the
Project is financed independently and/or set up with a Third Party,
(i) Company shall be attached as the production company, and (ii)
Artist shall be attached as director. Company and Artist shall
negotiate directly with the Third Party (or, as applicable,
Company) in connection with their respective services and/or the
acquisition of the Project. The Parties agree to support each other
to achieve satisfaction with each of their respective agreements
consistent with this Agreement; provided that the Parties shall act
reasonably and in good faith, taking into consideration their
respective precedents and stature in the entertainment industry,
and shall not act to frustrate the intentions of the Parties and/or
the purpose and intent of this Agreement. The Project may not be
set up with a Third Party during the Term without the attachment of
Company and Lender/Artist.

 

5. Pay-or-Play Right. Company will
have the exclusive right, by electing in writing, to engage Lender
and Artist on a “pay or play” basis, pursuant to the
terms and conditions of this Agreement, in connection with the
Picture at any time prior to the expiration of the Term
(“Pay-or-Play Right”). Upon exercising the Pay-or-Play
Right, Artist’s services shall be exclusive to Company
(subject to Company’s customary exclusivity language) and
within three (3) business days from the date of exercise, Company
shall deposit the Director Fee less the Hold Fee in an escrow
account held by William Morris Endeavor Agency. If Company does not
exercise the Pay-or-Play Right prior to the expiration of the Term,
Lender and Artist shall have no further obligations to Company
following the expiration of the Term.

 

 

 

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6. Third-Party Projects. Lender
shall immediately (i.e., no more than one business day) provide
Company with written notice (“Third Party Notice”) of
any offers to Artist during the Term that would or might, in
Company’s sole judgment, cause Artist to be unavailable to
render directing services for the Picture. The
Third Party Notice will specify the identity of the third party
making the conflicting offer, the name and nature of the project,
the anticipated period that the services will comprise and the
nature of services to be rendered by Artist.

 

7. No Assignment: Lender/Artist
shall not assign, delegate or otherwise transfer this Agreement
without the prior written consent of the other. Company and any
subsequent assignee may freely assign this Agreement and grant the
rights obtained hereunder, in whole or in part, to any person, firm
or corporation, provided that Company shall remain secondarily
liable unless such assignee is a major studio, mini-major studio,
television studio or network (as such terms are customarily
understood in the United States motion picture and television
industries) or other financially responsible party. Notwithstanding
the foregoing, either Party may assign this Agreement to any
parent, subsidiary, or affiliate entity of such party without
obtaining approval.

 

8. No Waiver: The failure of any
Party to enforce at any time any of the provisions hereof shall not
be construed to be a waiver of such provisions, or of such
Party’s rights thereafter to enforce any such
provisions.

 

9. No Modification: This Agreement
may not be modified or changed except by a writing signed by both
of the Parties.

 

10. Further Instruments: Each Party
agrees to execute and deliver such further instruments and writings
consistent herewith as may be required or reasonably desired to
effectuate the purposes and intent of this Agreement.

 

11. Warranties/Indemnities:

 

(a) Lender/Artist. Lender and
Artist hereby represent that the Director’s Pass and the
materials and elements therein are or will be written solely by and
be wholly original with Artist, has not been exploited in any
manner and/or medium, and does not and will not infringe upon the copyright of
any person or entity, constitute a libel or slander of any person
or entity, or infringe upon or violate the right of privacy or any
other right of any person or entity, and is not and will not be
based in whole or in part on the life of any real person except as
approved in writing in advance by Company.

 

(b) Company. Company hereby
represents that Company holds the sole rights, title, and interest
in and to the Screenplay. Company shall indemnify and defend Artist
against any and all liability, damages, costs and expenses
(including reasonable outside attorneys' fees and costs), in
connection with any third party claim or action arising out of: (i)
material supplied to Artist by Company for incorporation into
Artist's work or incorporated into Artist's work; (ii) changes to
the Director’s Pass made by or at Company’s request or
direction; or (iii) arising out of the development, production,
distribution, and exploitation of the Picture.

 

 

 

3

 

 

(c) Joint. Each Party hereto
represents and warrants that (with respect to their contributions,
where relevant): (i) such Party has the full right and authority to
enter into this Agreement, to grant the rights herein granted and
to perform such Party's obligations hereunder; (ii) such Party has
not heretofore authorized or permitted the performance,
development, production, distribution or other exploitation of any
motion picture, television, radio, dramatic or other version or
adaptation of the Project; (iii) to the best of each Party's
knowledge in the exercise of reasonable prudence, there is no
outstanding claim or litigation pending against the content,
authorship, title or ownership of the Project or any part thereof
or the rights herein; (iv) no Party has assigned or licensed to any
other person or entity or in any manner encumbered or hypothecated
any of the rights herein granted with respect to the Project nor
has any Party agreed to do so, except as provided by this
Agreement; and (v) no Party hereto has made or assumed and will not
hereafter make or assume any commitment, agreement, grant or
obligation that will or might conflict with such Party's
obligations hereunder. Each Party shall indemnify the other against
any liability, damages, costs and expenses (including reasonable
outside attorneys' fees and costs) incurred by reason of any claim
arising in connection with any breach or alleged breach of their
respective covenants, representations, warranties or agreements
herein.

 

12. Notices: All notices and other
communications under this Agreement shall be made in writing and
shall be delivered by hand or sent by fax, electronic mail, or sent
by prepaid express mail or reputable overnight courier service, and
shall be deemed given one (1) day after being delivered by fax or
electronic mail accompanied by first class mail, or express mailed
or couriered, and three (3) business days after mailing to the
Parties, at the following addresses (or at such other address for a
Party as shall be specified by like notice):

	
 

	

If to Company: 

	

Cohen & Gardner, LLP

	
 

	
 

	

345 N. Maple Drive

	
 

	
 

	

Ste. 181

	
 

	
 

	

Beverly Hills, CA 90210

	
 

	
 

	

Attn.: Jonathan M. Gardner, Esq.

	
 

	
 

	
 

	
 

	

If to Artist:

	

c/o: William Morris Endeavor Entertainment

	
 

	
 

	

9601 Wilshire Blvd. 8th Floor

	
 

	
 

	

Beverly Hills, CA 90210

	
 

	
 

	

Attention: Danny Greenberg

	
 

	
 

	

Email: DGreenberg@wmeentertainment.com

	
 

	
 

	
 

	
 

	
With a copy to:
	

LBI Entertainment
	
 

	

	

2000
Avenue of the Stars

	
 

	

	

3rd
Floor, North Tower

	
 

	

	

Century
City, CA 90067

	
 

	

	

Attn:
Chuck Pacheco

	
 

	

	

Email: cmp@lbient.com

	
 

	

	

 

	
 

	
 

	
Morris
Yorn Barnes Levine Krintzman

	
 

	
 

	
Rubenstein
Kohner & Gellman LLP

	
 

	
 

	
3rd
Floor, North Tower

	
 

	
 

	
Century
City, CA 90067

	
 

	
 

	
Attn:
Ryan Goodell

	
 

	
 

	

Email: rg@morrisyorn.com

 

13. No Agency: This Agreement is
not intended, nor shall it be deemed or construed, to create a
relationship of principal and agent or partnership or joint venture
between the Parties and neither Party shall have any power or
authority to enter into any agreement on behalf of the other Party
or to otherwise bind or obligate the other Party in any manner
whatsoever.

 

14. Insurance: Company agrees to
cover Artist and Lender as additional insureds under Company's
errors and omissions policy applicable to the Picture, but only
with respect to claims or liabilities arising out of the
Director’s Pass and subject to the terms, conditions and
restrictions of such policy and endorsements thereto.

 

 

 

4

 

 

15. No Injunctive Relief/No
Obligation: Any remedies Artist may have against Company in
connection with the Project shall be limited to the right to
recover damages, if any, in an action at law, and Artist hereby
waives any right or remedy in equity, including, without
limitation, the right to seek injunctive relief. Nothing contained
in this Agreement shall be construed as requiring the Parties to
exercise or exploit, or continue to exercise or exploit, any of the
rights herein granted. Company has no financial obligations under
this agreement other those specifically outlined. Company has no
obligation to to develop, finance, or produce picture.

 

16. Arbitration: This Agreement
shall be governed by the laws of the State of California applicable
to agreements entered into and to be wholly performed therein
without regard to its choice of laws principles. In the event the
Parties are unable to informally resolve any dispute
(“Dispute”), then such Dispute shall be submitted to
final and binding arbitration with an arbitrator experienced in
entertainment matters. The arbitration shall be initiated and
conducted at the Los Angeles Office of JAMS, or its successor,
according to the JAMS Comprehensive (for claims over Two Hundred
Fifty Thousand Dollars [$250,000]) or JAMS Streamlined (for claims
under Two Hundred Fifty Thousand Dollars [$250,000]) Arbitration
Rules and Procedures, except as modified herein, including the
Optional Appeal Procedure and Expedited Arbitration Rules, in
effect at the time the request for arbitration is made. Unless the
Parties agree otherwise, the neutral arbitrator and the members of
any appeal panel shall be former or retired judges or justices of
any California state or federal court with experience in matters
involving the entertainment industry, who shall serve as the sole
neutral, independent and impartial arbitrator. The arbitration must
be initiated by the party seeking arbitration within the
limitations period provided under California law for the claim
being asserted, and this Agreement shall not be interpreted as
altering or extending any statutes of limitation that would
otherwise be applicable if a claim were being filed in a court of
law. The arbitrator shall follow California law and the California
Rules of Evidence in adjudicating the Dispute. In any arbitration
arising out of or related to this Agreement, the arbitrator(s) may
not award any punitive or exemplary damages and the parties waive
any right to recover such damages. Within thirty (30) days from the
date the final award is rendered, either party may request an
appeal from the arbitrator’s decision by giving proper notice
to the other party or parties and JAMS that an appeal is sought.
Appeals shall be heard and decided by a panel of three (3) neutral
arbitrators, not to include the arbitrator. If no party gives
notice of an appeal within the required thirty-day period, the
arbitrator’s decision shall be considered final. If there is
an appeal, the decision of the majority of the panel shall
constitute the final arbitration decision. If either party refuses
to perform any or all of its obligations under the final
arbitration award (following appeal, if applicable) within thirty
(30) days of such award being rendered, then the other party may
enforce the final award in any court of competent jurisdiction in
Los Angeles County. The party seeking enforcement shall be entitled
to an award of all costs, fees and expenses, including reasonable
outside attorneys’ fees, incurred in enforcing the award, to
be paid by the party against whom enforcement is ordered. The
parties shall otherwise be responsible for payment of all of their
own costs, fees and expenses, including attorneys’ fees, of
arbitrating any Dispute. In the event of conflicting arbitration
provisions between this Agreement and other documents between the
parties hereto, the provisions of this paragraph will control. To
the extent that there is any disagreement about the arbitrability
of a Dispute, the determination of arbitrability shall be made in
accordance with the Federal Arbitration Act. Any Dispute or portion
thereof, or any claim for a particular form of relief (not
otherwise precluded by any other provision of this Agreement), that
may not be arbitrated pursuant to applicable state or federal law
may be heard only in a court of competent jurisdiction in Los
Angeles County applying California law without regard to its choice
of laws principles.

 

 

 

 

5

 

 

17. Miscellaneous: This Agreement
is not for the benefit of any third party, whether or not referred
to herein. Captions and organization are for convenience only and
shall not be used to construe meaning. All remedies shall be
cumulative and pursuit of any one shall not waive any other. If
there is any conflict between any provision of this Agreement and
any present or future statute, law, ordinance, regulation or
collective bargaining agreement, the latter shall prevail;
provided, that the provision hereof so affected shall be limited
only to the extent necessary and no other provision shall be
affected. This Agreement may be executed in one or more
counterparts, including without limitation a counterpart bearing a
facsimile signature or signature sent via electronic mail, each of
which shall be deemed to be an original and all of which together
shall constitute a single instrument.

 

 

[Signatures
on Following Page]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6

 

 

The
Parties indicate their consent to be bound by the terms and
conditions of this Agreement by signing below.

 

	

AGREED & ACCEPTED:

	

  
 

	

IDC2, INC.

	
 

	
 

	
By:

	
/s/ Nick
Cassavetes
	
 

	

	
Its:

	

President

	
 

	
 

	

ARTIST:

	
 

	
 

	

/s/ Nick Cassavetes

	

NICK CASSAVETES

	
 

	
 

	

THE MANUSCRIPT PRODUCTIONS, LLC

	
 

	
 

	
By:

	

/s/
Mike Witherill

	
 

	
 

	
Date:

	

February 7, 2018

 

 

 

7

 

 

EXHIBIT A –
CERTIFICATE
OF AUTHORSHIP

 

This certificate (“Certificate”) sets forth the terms
whereby for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Nick Cassavetes
(“Artist”), hereby certifies that Artist is rendering
services to The Manuscript Productions, LLC (“Company”)
in connection with the motion picture tentatively entitled
“THE MANUSCRIPT” (the “Picture”), and that
all such services and the results and proceeds thereof rendered by
Artist including, without limitation, all material of whatsoever
kind of nature (including, but not limited to, all literary or
dramatic materials, ideas, suggestions, themes, plots, stories,
characterizations, dialogue, titles, “gags,” and all
other allied and ancillary rights thereto) (all such material,
services, and the results and process thereof, collectively
“Material”) other than assigned material and material
in the public domain, if any, were and/or will be solely created by
Artist and all rights in the Material and all parts and elements
thereof shall be prepared by Artist as work specifically ordered or
commissioned for use as a part of a motion picture and, as such,
shall be a “work made for hire” within the meaning of
the United States Copyright Law, with Company being deemed the sole
author or the Material and the owner of all rights of every kind or
nature whatsoever therein, whether now known or hereafter devised
(including, but not limited to, all rights comprised in the
copyrights, neighboring rights, trademarks and any and all other
ownership and exploitation rights in the Material now or hereafter
recognized in any and all territories and jurisdictions including,
by way of illustration, production, reproduction, distribution,
adaptation, performance, fixation, rental and lending rights,
exhibition, broadcast and all other rights of communication to the
public), with the right to make all uses of the Material throughout
the universe in perpetuity in any and all media now known or
hereafter devised and all changes in the Material as Company deems
necessary or desirable in connection with the production,
distribution, exploitation and advertising of the Picture, and to
the extent that such Material may be deemed not to constitute a
work-for-hire, Artist hereby irrevocably grants and assigns
exclusively to Company all right, title and interest in and to the
product of such services and Material, including without limitation
all copyright and rental, lending, neighboring and other similar
rights to which Artist may now be or hereafter become entitled in
connection with such Material, the Picture or any elements thereof,
with the exclusive right to use such product and all rights derived
therefrom in all languages and media now or hereafter known
throughout the universe in perpetuity. Artist expressly
acknowledges and agrees that the compensation payable to Artist for
Artist’s services includes full and proper equitable
remuneration with respect to any right (including any rental,
lending, neighboring and other similar rights) to which Artist may
now be or hereafter become entitled in connection with the
production and/or exploitation of the Picture or any rights
therein.

 

Without limitation, Company or Company’s assignee shall have
the right to revise, change, modify, dramatize, fictionalize, add
material and/or remove material from the Material as Company shall
in its sole discretion deem appropriate, and to use, exploit and
advertise the Material and the Picture, in any form, manner and
media, whether now known or hereafter devised, without any
obligation whatsoever to or Artist or any person or entity claiming
through Artist or on Artist’s behalf. Without limiting the
generality of the foregoing, Company shall have all artistic
control over and the right to add to, subtract from or otherwise
modify the product of the services of Artist in any manner (or to
refrain from using the services of Artist and such product in the
Picture or elsewhere); and Artist hereby waives any rights
of droit
moral or similar rights or law
in any country of the world which Artist may have, and agrees not
to institute or permit any action or lawsuit on the ground that the
Picture in any way constitutes an infringement of any of
Artist’s droit moral.

 

Company shall have no obligation actually to use Artist's services
or use any of the results and proceeds thereof, or to exercise any
of the rights granted to Company hereunder, or to produce, or
exploit the Picture, or to continue production, or exploitation, if
commenced. Artist hereby grants to Company forever and throughout
the universe the right to use the name of Artist and the voice,
photographs, likeness and biographical information of Artist in
connection with the exercise of the rights granted hereunder,
including without limitation advertising and publicity for the
Picture, provided that no such use shall be an endorsement of any
product or service.

 

Artist agrees to indemnify and hold harmless Company and
Company’s officers, employees, assignees and licensees from
and against any and all claims, losses, damages, costs and
expen7ses (collectively, “Claims”) (including
reasonable outside attorneys’ fees and expenses) incurred by
Artist and arising out of a breach by Artist of any representation,
warranty or agreement.

 

 

8

 

 

Artist recognizes that in the event of any breach by Company of its
obligations to Artist, the damage (if any), caused to Artist is not
irreparable or sufficient to entitle Artist to injunctive or other
equitable relief. Artist, therefore, agree that Artist’s
rights and remedies shall be limited to the right, if any, to
obtain damages at law and Artist shall not have the right to
terminate or rescind this Certificate, or to enjoin or restrain the
distribution, exhibition, advertising or other exploitation of the
Picture or any rights related thereto (it being agreed that neither
the expiration of this Certificate nor any other termination
thereof shall affect the ownership by Company of the product of
Artist’s services or any other rights granted to Company, or
any warranty, indemnity or undertaking Artist’s part in
connection with such product or other rights).

 

Company’s rights in the product of Artist’s services
may be freely assigned and licensed and any such assignment or
license shall be binding upon Artist and inure to the benefit of
any such assignee, provided that Company shall remain secondarily
liable unless such assignee is a major studio, mini-major studio,
television studio or network (as such terms are customarily
understood in the United States motion picture and television
industries) or other financially responsible party. This
Certificate shall be construed in accordance with the laws of the
State of California applicable to agreements entirely made and
performed therein, without regard to the principles of conflicts of
laws. Artist hereby agrees to execute such documents consistent
herewith and take such further actions as may be reasonably
required by Company to effectuate the purposes hereof, it being
agreed that if Artist fails to execute any such document or take
such action within five (5) business days following receipt of
Company’s written request therefor, Company shall have the
right to execute said document or take such action in
Artist’s name, place and stead, and Company is hereby
irrevocably appointed Artist’s attorney-in-fact for such
purposes, which power is coupled with an interest. Company shall
provide to Artist a copy of any document so executed by Company,
provided that any casual or inadvertent failure to do so shall not
constitute a breach hereof.

 

This Certificate is signed in connection with an agreement between
Company and Idc2, Inc. for the services of Artist with respect to
Artist’s directing services for the Picture
(“Agreement”). Any conflict between this Certificate
and the Agreement shall be controlled by the Agreement, but solely
to the extent required to resolve any such discrepancy. This
Certificate may be executed in one or more counterparts, each of
which shall constitute an original, and all of which taken together
shall be deemed to constitute one and the same instrument. This
Certificate may be executed and delivered by facsimile or
electronic transmission with the same force and effect as if it
were executed and delivered by the parties simultaneously in the
presence of one another, and signatures on a facsimile or
electronic copy hereof shall be deemed authorized original
signatures.

 

[Signatures
on Following Page]

 

 

 

 

9

 

 

	

Dated as of
 

	
 2/27/2018

	
 

	
 

	
 

	

/s/ Nick Cassavetes

	

NICK CASSAVETES

	
 

	
 

	
 

	

THE MANUSCRIPT PRODUCTIONS, LLC

	
 

	
 

	
 

	
By:

	

 /s/ Mike
Witherill

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10Exhibit 10.1

 

CHANGE IN CONTROL SEVERANCE AGREEMENT

 

THIS AGREEMENT, effective March 23, 2018, is made by and between KapStone Paper and Packaging Corporation, a Delaware corporation, and Randy Nebel (the “Employee”).

 

WHEREAS, the Company entered into the Agreement and Plan of Merger, dated January 28, 2018, among KapStone Paper and Packaging Corporation, WestRock Company, Whiskey Holdco, Inc., Whiskey Merger Sub, Inc. and Kola Merger Sub, Inc. (the “Merger Agreement”), which provided for certain mergers (the “Mergers”) that, if consummated, will result in the Company becoming a wholly-owned subsidiary of Whiskey Holdco, Inc.;

 

WHEREAS, the Company considers it essential to the best interests of its stockholders to foster the continued employment of key personnel; and

 

WHEREAS, the Company recognizes that, both before and after the closing of the Mergers (such closing, the “Change in Control”), uncertainty and questions regarding the Change in Control may result in the departure or distraction of key personnel to the detriment of the Company and its stockholders; and

 

WHEREAS, the Company has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of the Company’s key personnel, including the Employee, to their assigned duties without distraction in the face of uncertainty arising from the potential Change in Control;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Employee hereby agree as follows:

 

1.             Defined Terms.  The definitions of capitalized terms used in this Change in Control Severance Agreement (“Agreement”) are provided in Section 14.

 

2.             Severance Payments.  If within one year following the Change in Control, the Employee’s employment is terminated by the Company or any of its Affiliates without Cause or by the Employee for Good Reason, then the Company will pay the Employee the amounts, and provide the Employee the benefits, described in subsection 2.1 and subsection 2.2 of this Section 2 (“Severance Payments”), provided that Employee complies with the requirements of Section 5 regarding execution and delivery of a general release.  The payments described in this Section 2 are in addition to the Accrued Benefits (which, for the avoidance of doubt, will be provided to the Employee upon any termination of employment and without regard to whether the Employee executes a release).

 

2.1          The Company will pay to the Employee a lump sum cash severance payment equal to $1,028,000.  Subject to the provisions of Section 13, the payment provided for in this subsection 2.1 will be made on or before the second regularly scheduled payroll date following the effective date of the release described in Section 5 and in any event no later than March 15 of the year following the year in which the termination of employment occurs.

 

 

2.2          For the number of months immediately following the Date of Termination (not to exceed 12 months) determined by dividing (i) the lump sum cash change in control severance payment payable to the Employee under subsection 2.1 of this Agreement by (ii) the Employee’s average monthly base salary in effect as of the Date of Termination (such quotient to be rounded down to the nearest whole number), the Company will provide the Employee and the Employee’s eligible dependents with health insurance benefits substantially similar to those provided to active employees of the Company immediately prior to the Date of Termination; provided, however, that (x) the Employee’s and the Employee’s qualified dependents’ COBRA eligibility period will include the period during which the Company is providing benefits under this subsection 2.2, (y) the Employee will be responsible for the payment of premiums for such benefits in the same amount as active employees of the Company and (z) such benefits will cease if and to the extent the Employee becomes eligible for similar benefits by reason of new employment.

 

3.             Section 280G.

 

3.1          Notwithstanding any other provisions of this Agreement, in the event that any payment or benefit received or to be received by the Employee (including any payment or benefit received in connection with the Change in Control or the termination of the Employee’s employment, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits, including the Severance Payments, referred to as the “Total Payments”) would be subject (in whole or part) to any excise tax imposed under section 4999 of the Code (an “Excise Tax”), then, after taking into account any reduction in the Total Payments provided by reason of section 280G of the Code in such other plan, arrangement or agreement, the Total Payments will be reduced to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax, but only if (A) the net amount of the Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (B) the net amount of the Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on the Total Payments and the amount of Excise Tax to which the Employee would be subject with respect to such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).  Such reduction shall be achieved by first reducing or eliminating the portion of the Total Payments that are payable in cash and then reducing or eliminating the non-cash portion of the Total Payments, in each case in reverse order beginning with payments and benefits which are to be paid or provided the furthest in time from the date of the determination described in subsection 3.2 below.

 

3.2          For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, the following portions of the Total Payments will not be taken into account: (i) the portion that the Employee waives at the time and in the manner as not to constitute a “payment” within the meaning of section 280G(b) of the Code and (ii) the portion that the Employee and WestRock Company agree (or, if Employee and WestRock Company do not agree, that, in the opinion of tax counsel

 

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reasonably acceptable to the Employee and WestRock Company (“Tax Counsel”) and selected by Deloitte (the “Accounting Firm”)) does not constitute a “parachute payment” within the meaning of section 280G(b)(2) of the Code (including by reason of section 280G(b)(4)(A) of the Code).  In calculating the Excise Tax, no portion of the Total Payments will be taken into account that the Employee and WestRock Company agree (or, in the event that the Employee and WestRock Company do not agree, that, in the opinion of Tax Counsel) constitutes reasonable compensation for services actually rendered, within the meaning of section 280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such reasonable compensation.  The value of any non-cash benefit or any deferred payment or benefit included in the Total Payments will be determined by the Accounting Firm in accordance with the principles of sections 280G(d)(3) and (4) of the Code.

 

3.3          At the time that payments are made under this Agreement, the Company will provide the Employee with a written statement setting forth the manner in which the payments were calculated and the basis for the calculations, including without limitation any opinions or other advice the Company has received from Tax Counsel, the Accounting Firm or other advisors or consultants (and any such opinions or advice that are in writing will be attached to the statement).  If the Employee objects in writing to the Company’s calculations, the Company and Employee will cooperate in good faith to resolve such objection, and if applicable, the Company will pay to the Employee the portion of the Severance Payments (up to 100%) as the Company and Employee reasonably determine is necessary to result in the proper application of subsection 3.1 of this Section 3.

 

4.             Termination Procedures.

 

4.1          Notice of Termination.  Within one year following the Change in Control, any purported termination of the Employee’s employment without Cause or for Good Reason will be communicated by written Notice of Termination from the Employee to the Company or the Company to the Employee, as applicable, in accordance with Section 8.  For purposes of this Agreement, a “Notice of Termination” means a notice that indicates whether the termination of the Employee’s employment is without Cause or for Good Reason and sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee’s employment.  In addition, if the Employee purports that the Employee has Good Reason to terminate employment, the Employee must also deliver Notice of Termination in accordance with the requirements set forth in Section 14(H).

 

4.2          Date of Termination.  “Date of Termination,” with respect to any purported termination of the Employee’s employment within one year following a Change in Control means the date specified in the Notice of Termination.  In the case of a termination by the Employee for Good Reason, the Date of Termination may not be earlier than the end of the cure period described in the definition of “Good Reason” or later than 60 days from the date that Notice of Termination is given.

 

5.             Requirement of Release.  Notwithstanding anything in this Agreement to the contrary, the Employee will not be entitled to the Severance Payments unless, within 45 days after the Date of Termination, the Employee signs and returns a release of claims and restrictive

 

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covenant agreement (“Release”) in the form attached to this Agreement as Exhibit A (and does not subsequently revoke the Release in accordance with its terms).  If the Release does not become effective and non-revocable in accordance with the terms of the foregoing sentence, the Company’s obligations to provide Severance Payments will cease immediately.

 

6.             No Mitigation.  The Company agrees that the Employee is not required to seek other employment or to attempt in any way to reduce the Severance Payments.  No payment or benefit provided for in this Agreement will be reduced by any compensation earned by the Employee as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Employee to the Company, or otherwise.

 

7.             Successors; Binding Agreement.

 

7.1          In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.

 

7.2          This Agreement will inure to the benefit of and be enforceable by the Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  If the Employee dies while any amount would still be payable to the Employee under this Agreement (other than amounts that, by their terms, terminate upon the death of the Employee) if the Employee had continued to live, all such amounts, unless otherwise provided in this Agreement, will be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Employee’s estate.

 

7.3          No Severance Payments will be payable under this Agreement unless there has been a termination of the Employee’s employment with the Company within one year following a Change in Control.  This Agreement will be null and void and of no effect if the Change in Control does not occur.

 

8.             Notices.  For the purpose of this Agreement, notices and all other communications provided for in the Agreement must be in writing and will be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed, if to the Employee, to the most recent address shown in the personnel records of the Company and, if to the Company, to the address set forth below, or to such other address as either party may have furnished to the other in writing in accordance with this Section 8, except that notice of change of address is effective only upon actual receipt:

 

To the Company:

 

KapStone Paper and Packaging Corporation

1101 Skokie Boulevard

Suite 300

Northbrook, Illinois  60062

 

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Attn: General Counsel

 

9.             Miscellaneous; Amendment of Related Agreements.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Employee and such officer as may be specifically designated by the Board.  No waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack of compliance with, any condition or provision of this Agreement to be performed by such other party will be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  This Agreement supersedes any other agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof that have been made by either party; provided, however, that this Agreement will supersede any agreement setting forth the terms and conditions of the Employee’s employment with the Company only in the event that, following a Change in Control, the Employee’s employment with the Company is terminated by the Company other than for Cause or by the Employee for Good Reason.  The validity, interpretation, construction and performance of this Agreement will be governed by the laws of the State of Illinois.  All references to sections of the Code will be deemed also to refer to any successor provisions to such sections.  Any payments provided for hereunder will be paid net of any applicable withholding required under federal, state or local law and any additional withholding to which the Employee has agreed.  The obligations of the Company and the Employee under this Agreement that by their nature may require either partial or total performance after the expiration of the Term (including, without limitation, those under Section 2) will survive such expiration.

 

10.          Validity.  The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, which will remain in full force and effect.

 

11.          Counterparts.  This Agreement may be executed in several counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument.

 

12.          Settlement of Disputes; Arbitration.

 

12.1        All claims by the Employee for benefits under this Agreement will be directed to and determined by the Company and will be in writing.  Any denial by the Company of a claim for benefits under this Agreement will be delivered to the Employee in writing and will set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon.  The Company will afford a reasonable opportunity to the Employee for a review of the decision denying a claim and will further allow the Employee to appeal to the Board (or its designee) a decision of the Company within 60 days after notification by the Company that the Employee’s claim has been denied.  Notwithstanding the above, in the event of any dispute, any decision by the Company hereunder will be subject to a de novo review by the arbitrator.

 

12.2        Any further dispute or controversy arising under or in connection with this Agreement will be settled exclusively by binding and non-appealable arbitration in the State of Illinois in accordance with the rules of the American Arbitration Association then

 

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in effect.  Judgment may be entered on the arbitrator’s award in any court having jurisdiction.

 

13.          Section 409A.  This Agreement is intended to comply with the requirements of section 409A of Code, and will be interpreted and construed consistently with such intent.  All references in this Agreement to the Employee’s termination of employment refer to the Employee’s separation from service within the meaning of section 409A of the Code.  Payments provided pursuant to Section 2 of this Agreement are intended to be exempt from section 409A of the Code to the maximum extent possible, under either the separation pay exemption pursuant to Treasury regulation §1.409A-1(b)(9)(iii) or as short-term deferrals pursuant to Treasury regulation §1.409A-1(b)(4).  Each payment and benefit provided under this Agreement will constitute a “separately identified” amount within the meaning of Treasury regulation §1.409A-2(b)(2).  Any payment that is deferred compensation subject to section 409A of the Code, conditioned upon the Employee’s execution of a release, and to be paid during a designated period that begins in one taxable year and ends in a second taxable year will be paid in the second taxable year.  In the event the terms of this Agreement would subject the Employee to taxes or penalties under section 409A of the Code (“409A Penalties”), the Company and the Employee will cooperate diligently to amend the terms of the Agreement to avoid such 409A Penalties, to the extent possible; provided that in no event will the Company be responsible for any 409A Penalties that arise in connection with any amounts payable under this Agreement.  Notwithstanding any other provision in this Agreement, if the Employee is a “specified employee,” as defined in section 409A of the Code, as of the date of termination, then to the extent any amount payable under this Agreement (i) constitutes the payment of nonqualified deferred compensation, within the meaning of section 409A of the Code, (ii) is payable upon the Employee’s separation from service, within the meaning of section 409A of the Code, and (iii) would be payable prior to the six-month anniversary of the Employee’s separation from service, payment of such amount will be delayed until the earlier to occur of (a) the six-month anniversary of the date of such separation from service or (b) the date of the Employee’s death.  Any amount of expenses eligible for reimbursement, or in-kind benefit provided, during a calendar year will not affect the amount of expenses eligible for reimbursement, or in-kind benefit to be provided, during any other calendar year.  Any reimbursement will be made no later than the last day of the calendar year following the calendar year in which the expenses to be reimbursed were incurred.  The right to any reimbursement or in-kind benefit pursuant to this Agreement will not be subject to liquidation or exchange for any other benefit.

 

14.          Definitions.  For purposes of this Agreement, the following terms will have the meanings indicated below;

 

(A)          “Accrued Benefits” means (i) earned but unpaid salary, (ii)  accrued but unused vacation pay, (iii) any employee benefits to which the Employee is entitled under any employee benefit or compensation plan maintained by the Company or its Affiliates (other than any severance plan), and (iv) reimbursement for any incurred, but unreimbursed business expenses.

 

(B)          “Affiliate” means, with respect to any entity, any other entity that, at the time of determination, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the first-referenced entity.

 

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(C)          “Base Amount” has the meaning set forth in section 280G(b)(3) of the Code.

 

(D)          “Board” means the Board of Directors of the Company.

 

(E)           “Cause” means the occurrence of any of the following with respect to the Employee: (i) conviction by a court of competent jurisdiction of a felony (other than a traffic violation); (ii) refusal or failure to perform duties where such failure or refusal is materially detrimental to the business or reputation of any member of the Holdco Group (as defined below), except during periods of physical or mental incapacity, and unless remedied within thirty days after receipt of written notice thereof by the applicable member of the Holdco Group; and (iii) willful misconduct or gross negligence with respect to the individual’s duties that is materially detrimental to the business or reputation of any member of the Holdco Group, unless remedied (if capable of being remedied) within thirty days after receipt of written notice thereof by the applicable member of the Holdco Group.

 

(F)           “Code” means the Internal Revenue Code of 1986, as amended.

 

(G)          “Company” means KapStone Paper and Packaging Corporation and any successor to its business and/or assets (including, for purposes of this Agreement, Whiskey Holdco, Inc.) that assumes and agrees to perform this Agreement by operation of law, or otherwise.

 

(H)          “Good Reason” means the occurrence of any of the following with respect to the Employee: (i) material diminution of authority, duties or responsibilities (or authorities, duties or responsibilities of the supervisor to whom the Employee reports); (ii) diminution in base salary or incentive compensation opportunities; (iii) the relocation of the Employee’s principal place of employment by more than 50 miles (unless the new place of employment is closer to the individual’s primary residence); and (iv) the material breach of any agreement between the Company or any of its Affiliates and the Employee.  Notwithstanding the foregoing, Good Reason will not exist unless (A) the Employee gives Notice of Termination to the Company or its applicable Affiliate of the Employee’s termination of employment within 30 days after the occurrence of the circumstances constituting Good Reason, and the Company or its applicable Affiliate has failed within 30 days after receipt of such notice (the “Cure Period”) to cure the circumstances constituting Good Reason, and (B) the Employee’s “separation from service” (within the meaning of section 409A of the Code) occurs no later than the day that is 30 days following the last day of the Cure Period (assuming no cure has occurred).

 

(I)            “Holdco Group” means, collectively, (i) the Company, (ii) any of the Company’s current or future direct or indirect subsidiaries or parents (a “Company Parent”) and (iii) any other direct or indirect subsidiary of any Company Parent, including, for the avoidance of doubt, WestRock Company and

 

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its direct or indirect subsidiaries, including, in each case, any successor to any such entity.

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

	
 
    	
KAPSTONE   PAPER AND PACKAGING CORPORATION
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Matthew Kaplan
    
	
 
    	
Name:   Matthew Kaplan
    
	
 
    	
Its:   Chief Executive Officer
    
	
 
    	
 
    
	
 
    	
Randy   Nebel
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
/s/ Randy   Nebel
    

 

Signature Page to Change in Control Severance Agreement

 

 

EXHIBIT A

 

FORM OF RELEASE AGREEMENT

 

[to be attached]

 

 

RELEASE AGREEMENT

 

This RELEASE AGREEMENT (“Agreement”) is entered into by and between KapStone Paper and Packaging Corporation (together with its affiliates, including WestRock Company and its subsidiaries, the “Employer”) and NAME (“Employee”).  In consideration of the mutual covenants, conditions and promises set forth in this Agreement, and other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the undersigned parties agree as follows:

 

I.                                        Definitions

 

For purposes of this Agreement, the following Definitions will apply:

 

A.                                    Administrative Proceeding.  An “Administrative Proceeding” includes any charge or complaint or other action instituted with a federal, state, or local governmental agency other than the U.S. Equal Employment Opportunity Commission (“EEOC”).

 

B.                                    Change in Control Severance Agreement.  The “Change in Control Severance Agreement” is the agreement to which this Agreement is attached.

 

C.                                    Effective Date.  The “Effective Date” of this Agreement is the eighth (8th) day after Employee’s execution of this Agreement, as set forth in Paragraph II.D(4) below, provided that Employee does not exercise Employee’s right to revoke as set forth in that paragraph.

 

D.                                    Released Parties.  The “Released Parties” are the Employer and its present or former officers, directors, employees, agents, affiliated companies, subsidiaries, shareholders, partners, attorneys, predecessors, successors and assigns.

 

E.                                     Releasing Parties.  The “Releasing Parties” are the Employee and Employee’s attorneys, heirs, executors, administrators, representatives, agents, successors, and assigns.

 

F.                                      Severance Payments.  The “Severance Payments” are the payments payable under Section 2 of the Change in Control Severance Agreement.

 

G.                                    Termination Date.  The “Termination Date” will be DOT.

 

II.                                   Terms

 

A.                                    Timeframe and Method of Accepting the Agreement.  Employee agrees and understands that, to be effective, Employee must return this Agreement within forty-five (45) days after the Termination Date.  Employer may reject Employee’s signed Agreement if it is not post-marked and deposited in the U.S. Mail on or before the forth-fifth (45th) day following the Termination Date, addressed to the following address: [             ].  Following the Effective Date, upon receipt of Employee’s signed Agreement, and provided that Employee complied with the requirements set forth in this Agreement, Employer will mail Employee a copy of the fully executed agreement and process the Severance Payments described in the Change in Control Severance Agreement.

 

B.                                    Return of Employer Property.  If Employee has not already done so, Employee will return and give to the Employer as soon as possible, but no later than seven (7) days after the Termination Date, all keys, access cards, electronics, storage media, machinery and confidential or proprietary documents related to Employer business or customer information and which are in Employee’s possession, or under Employee’s direction or control.  Except as permitted in Paragraph II.F(2), below, Employee also agrees that Employee will not retain or convey to any other person or entity any copies or originals of Employer property.

 

 

Employee also agrees to immediately cease the use of all Employer-issued credit cards and to make payment of any and all outstanding balances in accordance with cardholder agreements and the time limitations contained therein.  No later than fourteen (14) days after the Termination Date, Employee will submit to Employer all expense statements and receipts related to any Employer-authorized expenses, and, if charged to Employer credit cards, to use any reimbursement payments for the purpose of paying such charges.

 

C.                                    Severance Payments.  In consideration for Employee’s execution of this Agreement, and Employee’s release of all claims as set forth below, the Employer will provide to Employee the Severance Payments as set forth in the Change in Control Severance Agreement.  The Severance Payments are contingent upon Employee’s execution of this Agreement, Employee’s not exercising Employee’s right to revoke, and Employee’s compliance with all of the terms of this Agreement.

 

D.                                    Acknowledgements.  Employee acknowledges that Employee has read and understands this Agreement, and Employee specifically acknowledges the following:

 

(1) That Employee is hereby advised by the Employer to consult with an attorney, and has had the opportunity to consult with an attorney, before signing this Agreement; and

 

(2)  That Employee has forty-five (45) days to decide whether to sign this Agreement; and

 

(3) That Employee is waiving, among other claims, age discrimination claims under the Age Discrimination in Employment Act (“ADEA”), 29 U.S.C. §621, et seq., and all amendments thereto; and

 

(4)  That if Employee signs this Agreement, Employee has seven (7) days in which to revoke Employee’s signature, and that this Agreement will not become effective or enforceable until after the Effective Date (in other words, the revocation period must have expired, and Employee must not have exercised Employee’s right to revoke).  Specifically, Employee understands that Employee will not receive the Severance Payments until after the Effective Date.  To revoke this Agreement, Employee must send a written notice via U.S. Mail to [             ], and that written notice of revocation must be post-marked and deposited in the U.S. Mail on or before the seventh (7th) day after Employee’s signing of this Agreement; and

 

(5)  That, by signing this Agreement, Employee is not waiving or releasing any claims based on actions or omissions that occur after the date of Employee’s signing of this Agreement.

 

E.                                     Release.  Except as set forth herein, Employee agrees and understands that this is a complete and general release.  In exchange for the Severance Payments as set forth in the Change in Control Severance Agreement, the Releasing Parties unconditionally release, acquit, covenant not to sue and forever discharge the Released Parties from any and all claims, actions, complaints, grievances and causes of action (hereinafter collectively referred to as “claims”), whether known or unknown, which Employee may have arising out of or in 

 

	
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connection with Employee’s employment or termination of Employee’s employment, through the date on which Employee signs this Agreement.

 

This release includes, but is not limited to, the following claims:  Title VII of the Civil Rights Act of 1964; the Americans with Disabilities Act; the Employee Retirement Income Security Act (except such rights as may be vested under any retirement plan sponsored by the Employer); the Lilly Ledbetter Fair Pay Act; the Family Medical Leave Act; the Fair Labor Standards Act; the Age Discrimination in Employment Act (“ADEA”); the Uniformed Services Employment and Reemployment Rights Act; [           ](1); any claims for wrongful discharge, discrimination, retaliation, harassment, breach of contract, intentional or negligent infliction of emotional distress, defamation, or interference with contract; any claims for failure to pay wages, vacation pay, personal pay, sick pay, separation pay, or benefits; any claims for continued employment; any claims for liquidated damages and/or punitive damages; and any other cause of action based on the common law or federal, state, or other governmental statute, law, regulation or ordinance.  [Accordingly, Employee further waives any rights under Section 1542 of the Civil Code of the State of California or any similar statute.  Section 1542 states:

 

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH, IF KNOWN TO HIM OR HER, MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”](2)

 

Employee further represents and agrees that Employee has not and will not, nor has had anyone on Employee’s behalf (including but not limited to the Releasing Parties), filed a lawsuit or instituted any other legal or Administrative Proceeding (as defined in Paragraph I.E above) as to any matter based upon, arising out of, or related to Employee’s employment, compensation during employment, or termination of Employee’s employment.  Nothing in this Agreement shall be construed to prevent Employee from filing or participating in a charge of discrimination filed with the Equal Employment Opportunity Commission (“EEOC”).  If Employee files a charge with the EEOC that would otherwise have been released by this Paragraph, Employee may be limited to non-monetary relief.

 

Employee and the Employer understand that this release does not apply to, without duplication, (i) Employee’s accrued rights (other than accrued rights to cash severance payments) under any employee benefit plan, program, policy, agreement or arrangement (including under the 2018 Management Incentive Plan or similar short-term incentive arrangement or any Success Bonus letter agreement); (ii) Employee’s rights to any accrued but unpaid base salary or accrued but unused vacation; and (iii) Employee’s rights to indemnification pursuant to the applicable policies of the Employer in connection with Employee’s role as an officer or employee of the Employer.

 

Employee further agrees that this Agreement may be used as an affirmative defense and complete bar to any claim, lawsuit, charge, or any other type of action that Employee, or someone on his/her behalf (including but not limited to the Releasing Parties), may file.  Moreover, Employee expressly waives Employee’s right to recovery of any type, including damages, reinstatement or attorneys’ fees, in any administrative or court action, whether federal, state, local or whether brought by Employee or on Employee’s behalf, related to any of the matters actually released herein.  Employee also waives and gives up any right to become, and promise not to consent to become, a member of any class or collective action in a case in which claims are asserted against any Released Party.  If Employee is made a member of a class or collective action in any proceeding without the Employer’s prior consent, Employee agrees to opt out of the class or collective action at the first opportunity.

 

(1)  NTD: To be modified to include relevant state laws based on location of Employee.

(2)  NTD: To be included for Employees located in CA only.

 

	
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F.                                      Communications to Third Parties.

 

(1).                              Employee will not speak in a derogatory manner concerning the Employer, its directors, officers, agents or employees to any person who is not a party to this Agreement. In the event that an employer or prospective employer contacts the Employer for a job reference or referral concerning Employee, the Employer will instruct its employees, agents or representatives with responsibility for making such reference or referral to provide only Employee’s dates of employment and position(s) held, consistent with the Employer’s normal policy and practice.

 

(2).                              It will not be a violation of this Paragraph of this Agreement for the Employee or the Employer to provide truthful information, or actual or true copies of documents to the applicable state unemployment agency, or to other government agencies in connection with an investigation, or in response to a subpoena or other valid legal process.

 

G.                                    Confidentiality.  Employee agrees that Employee will not disclose the contents of this Agreement, including the amount of monetary payment, to anyone other than Employee’s attorneys, financial advisers, or Employee’s spouse or registered domestic partner, or pursuant to an appropriate order from a court or other entity with competent jurisdiction.  Before disclosing the contents of this Agreement to any person described above, Employee will obtain the agreement of that person not to disclose the contents of the Agreement without prior written consent of the Employer or as required by court order, statute, law or regulation or as authorized in Paragraph II.F(2).  The Employer, and its officers, directors, agents and management-level employees, will have the right to discuss Employee’s employment and this Agreement among themselves.

 

In addition, Employee acknowledges that Employee has held positions of trust and confidence with the Employer, and that during the course of Employee’s employment Employee has received or been exposed to material and other information concerning its customers or clients; its sales, marketing and financial information; its trade secrets and other information which is proprietary in nature, confidential to the Employer, and not generally available to the public or to the Employer’s competitors, and which, if used or divulged against the Employer’s best interests would irreparably damage its ability to compete in the marketplace (“Confidential Information”).  Employee further agrees not to possess, use or disclose to any person or entity any Confidential Information without the prior, written consent of the Employer, or except as may be required by court order, statute, law or regulation, or as authorized in Paragraph II.F(2), above.

 

Notwithstanding the foregoing, Employee acknowledges that Employee has the right, without notice to or authorization from the Employer, to communicate and cooperate in good faith with any federal, state, or local governmental agency or commission (“Government Agency”) for the purpose of (i) reporting a possible violation of any U.S. federal, state, or local law or regulation, (ii) participating in any investigation or proceeding that may be conducted or managed by any Government Agency, including by providing documents or other information, or (iii) filing a charge or complaint with a Government Agency.

 

H.                                   Non-Solicitation.  Employee agrees that during Employee’s employment with Employer and for a period of six (6) months following the Termination Date, regardless of whether the employment ends voluntarily or involuntarily, Employee (on Employee’s own behalf or that of any other person or entity) shall not directly or indirectly:

 

(1).                              recruit, attempt to recruit, solicit, knowingly induce or knowingly influence any person who is an employee of Employer, to discontinue, reduce, reject or otherwise change in any manner adverse

 

	
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to the interests of Employer the nature or extent of their employment relationship; provided that nothing herein shall prohibit Employee from placing advertisements for employment or making general solicitations not specifically targeting any such person (provided that this exception relating to advertisements for employment and general solicitations shall not permit Employee to actively participate in any recruiting process specifically targeting any person known to be an employee of Employer); or

 

(2).                              (i) solicit or attempt to solicit any customer of Employer with whom Employee had substantial contact while Employee was employed by Employer for purposes of providing products or services that are competitive with those provided by Employer; or (ii) knowingly induce any customer of Employer with whom Employee had substantial contact while Employee was employed by Employer to breach any written agreement or contract with the Employer; provided that neither (i) nor (ii) of this Paragraph II.H.(2) will restrict Employee’s activities during the six (6) month period following the Termination Date with respect to any such customer that is no longer a customer of Employer on the Termination Date.

 

Notwithstanding anything in this Agreement or in any other agreement between Employee and Employer to the contrary, Employee’s breach of the obligations set forth in this Paragraph II.H. shall not give rise to any right of Employer to exercise any right of offset against any amounts to which Employee may be, or may become, entitled under any applicable long-term incentive plan or short-term incentive plan.

 

I.                                        Obligation to Cooperate and Assist.  Employee agrees to cooperate in good faith with the Employer to assist it with any information or matter which is within Employee’s knowledge as a result of Employee’s employment with the Employer, including but not limited to making Employee reasonably available for interview by the Employer’s attorneys, or providing truthful testimony without the necessity of a subpoena or compensation, in any pending or future legal matter in which the Employer is a party, provided, however, that it will not be a breach of this Agreement for Employee to request a subpoena if Employee’s then-employer desires or requests it.  In such instances, the Employer will pay all reasonable travel expenses associated with such cooperation, and will attempt to schedule such matters at the convenience of the Employee.

 

J.                                        Entire Agreement; Modification.  The parties agree that this Agreement and the Change in Control Severance Agreement together constitute the entire agreement between the parties with respect to the subject matter discussed herein.  This Agreement overrides and replaces all prior negotiations and terms proposed or discussed, whether in writing or orally, about the subject matter of this Agreement, with the exception of any non-competition agreement, confidentiality agreement or other obligation which, by its terms or by operation of law, survives the termination of Employee’s employment.  In such event, the confidentiality and non-solicitation obligations of this Agreement will supplement, but not replace, such agreement or agreements.  No modification of this Agreement will be valid unless it is in writing identified as an Amendment to the Agreement and is signed by Employee and an authorized executive of the Employer.

 

K.                                    Governing Law and Venue.  This Agreement is governed by and construed in accordance with the laws of the state of [        ].

 

L.                                     Assignment of Rights.  Employee agrees that the Employer may assign its rights and privileges under this Agreement without Employee’s express consent and Employer’s rights under this Agreement will automatically inure to the benefit of any successor of Employer.

 

M.                                 Remedies for Breach.

 

	
(Please   initial)
    	
 
    
	
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Company   Representative
    	
 
    	
 
    
				

 

5

 

(1)  ADEA.  In the event that the Releasing Parties bring and prevail in an action against the Released Parties based on an ADEA claim released in Paragraph II.E, the Released Parties will be entitled to offset any recovery by the amounts paid under this Agreement or the amount recovered by the Releasing Parties, whichever is less.  In the event that the Released Parties prevail in such an action, the Released Parties will be entitled to all remedies authorized by applicable law.

 

(2)  All Other Claims.  In the event that the Releasing Parties bring an action against the Released Parties based on any other claim released in Paragraph II.E, the Released Parties may, at their option, and as applicable: (a) stop making payments that would otherwise have been due under this Agreement; (b) demand the return of any payments that have been made under this Agreement; (c) plead this Agreement in bar to any such action; or (d) seek any and all remedies available, including but not limited to injunctive relief and monetary damages, costs and reasonable attorneys’ fees.

 

(3)  Breach by the Employer.  In the event that the Released Parties breach this Agreement, the Releasing Parties will be entitled to bring an action for breach of this Agreement but not for any claims released by Paragraph II.E.  In the event that the Releasing Parties prevail in such an action, they will be entitled to recover (as appropriate and applicable) monetary damages, injunctive relief, costs and reasonable attorneys’ fees.

 

N.                                    Severability.  Each provision of this Agreement is intended to be severable.  If any court of competent jurisdiction determines that any provision of this Agreement is invalid, illegal or unenforceable in any respect, the rest of the Agreement will remain in force.

 

EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS CAREFULLY READ THIS RELEASE AGREEMENT, AND KNOWS AND UNDERSTANDS ITS CONTENTS, AND VOLUNTARILY SIGNS IT OF EMPLOYEE’S OWN FREE WILL.

 

	
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Company   Representative
    	
 
    	
 
    
				

 

6

 

IN WITNESS WHEREOF, the parties sign this Agreement on the dates indicated below with the intent to be bound by its terms and conditions.

 

	
DATED:
    	
 
    	
 
    	
SIGNED:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
EMPLOYEE
    
	
 
    	
 
    
	
STATE OF                       
    	
)
    	
 
    
	
 
    	
) ss.
    	
 
    
	
COUNTY OF                   
    	
)
    	
 
    
						

 

SUBSCRIBED AND SWORN to before me this        day of                  , 2018, by                                                , who executed the foregoing Release and acknowledged that such execution was made freely.

 

Witness my hand and official seal.

 

	
 
    	
 
    
	
 
    	
Notary   Public
    
	
 
    	
 
    
	
My   commission expires:
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
KAPSTONE   PAPER AND PACKAGING CORPORATION
    
	
 
    	
 
    
	
 
    	
 
    
	
DATED:
    	
 
    	
 
    	
By:
    	
 
    
	
 
    	
 
    	
[              ]
    
	
 
    	
 
    
	
 
    	
 
    
					

 

	
(Please   initial)
    	
 
    
	
Employee
    	
 
    	
 
    
	
Company Representative
    	
 
    	
 
    
				

 

7

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