Clearwater Paper Corporation
04/04/2025 | Press release | Distributed by Public on 04/04/2025 14:35
Management Change/Compensation (Form 8-K)
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Compensation Arrangements with Certain Officers
On April 1, 2025, Clearwater Paper Corporation (the "Company") and Arsen S. Kitch entered into a new Employment Agreement (the "Agreement") effective April 1, 2025 (the "Effective Date"), pursuant to which Mr. Kitch will continue to serve as the Company's President and Chief Executive Officer. The Agreement supersedes the prior employment agreement, dated effective as of April 1, 2020, by and between the Company and Mr. Kitch. The material terms and conditions of the Agreement are summarized as follows:
The Agreement will be for a term of one year beginning on the Effective Date, with an automatic extension such that the term will thereafter be extended for one-year terms unless the Company or Mr. Kitch give notice that the term will not be extended. Mr. Kitch will continue to serve as a member of the Company's Board of Directors (the "Board") and thereafter during the term of the Agreement will be nominated for re-election as a member of the Board. The Agreement provides that Mr. Kitch will be paid an annual base salary of $1,000,000, which is unchanged from Mr. Kitch's prior year salary, as of the Effective Date, subject to adjustment based on periodic executive compensation assessments undertaken by the Compensation Committee of the Board (the "Compensation Committee"). He will be eligible for an annual bonus pursuant to the terms and conditions of the Company's annual incentive program (as described in the Company's most recent definitive proxy statement) with an initial target annual bonus of 100% of annual base salary, also unchanged from the prior year. Mr. Kitch will be eligible to receive long-term incentive awards with a target value of at least 200% of annual base salary, in accordance with the Company's long-term incentive program (as described in the Company's most recent definitive proxy statement), subject to the Board's discretion and adjustment based on periodic executive compensation assessments undertaken by the Compensation Committee. As of the Effective Date and until changed for future awards, all long-term incentive awards will be granted in the form of 70% performance shares with three-year cliff vesting and 30% time-vested restricted stock units with three-year ratable vesting.
If Mr. Kitch is terminated for any reason other than cause, death or disability, or he is terminated because the Company does not extend the term of the Agreement beyond the end of the one-year term then in effect, or he terminates his employment for good reason, he will receive (i) a cash severance payment equal to 18 months of base compensation; (ii) a pro-rated annual bonus for the termination year under the applicable bonus plan based on the Company's performance; and (iii) 18 months of continued health and welfare benefit coverage. If Mr. Kitch's employment terminates in connection with a change of control, or on or within two years after a change of control, he will receive (i) a cash severance payment equal to 2.5 times his then current base salary plus target annual incentive bonus; (ii) a pro-rated annual bonus for the termination year under the applicable bonus plan at his target amount; and (iii) 2.5 years of continued health and welfare benefit coverage. Mr. Kitch will not receive an excise tax gross-up in connection with any change of control payments. Mr. Kitch will be subject to covenants prohibiting disclosure of confidential information, solicitation of customers and employees and engaging in competitive activity for 18 months from a termination of his employment.
The above summary is qualified in its entirety by reference to the text of the Agreement, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.