10-K/A: Pactiv Evergreen Files Amendment No. 1 to Form 10-K, Addressing Part III Information Following Merger Agreement

Pactiv Evergreen Inc. files an amendment to its annual report to include information required by Part III of Form 10-K, related to directors, executive officers, compensation, and related matters, due to the pending merger with Novolex Holdings, LLC.

Summary

• Pactiv Evergreen Inc. filed Amendment No. 1 to its Annual Report on Form 10-K to include information required by Part III of Form 10-K.
• The amendment is being filed because the company expects the merger with Novolex to be consummated before it would ordinarily file a definitive proxy statement in relation to the election of directors for 2025.
• The amendment includes information on directors, executive officers, corporate governance, executive compensation, security ownership, related transactions, and accounting fees.
• The company's common stock is registered on The Nasdaq Stock Market LLC under the trading symbol PTVE.
• As of February 20, 2025, there were 180,630,534 shares of the company's common stock outstanding.
• The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant on June 28, 2024, was $453,012,703.
• Pactiv Evergreen shareholders will receive $18.00 per share in the merger with Novolex, representing a 49% premium to the two-month unaffected volume weighted average trading price on December 2, 2024.

Sentiment

Score: 6

Explanation: The sentiment is neutral. While the merger provides a premium, the company's financial performance in 2024 was below target. The document primarily provides factual information.

Positives

• The merger agreement provides a significant premium to shareholders.
• The company has implemented various compensation practices and policies to promote sound governance.
• The company has stock ownership guidelines in place for executives and directors.
• The company has a clawback policy applicable to executive officers.
• The company offers retirement and welfare benefits to employees, including a 401(k) plan and a nonqualified deferred compensation plan.

Negatives

• The company's Adjusted EBITDA and Free Cash Flow performance did not meet the target levels set in the 2024 AIP.
• The company's net (loss) income was $(133) million in 2024.
• Valaris Limited, where Jonathan H. Baksht previously served as CFO, filed for Chapter 11 financial restructuring in 2020.

Risks

• The company's reliance on related-party transactions could pose potential conflicts of interest.
• The company's tax matters agreements with RCP and Graham Packaging could result in indemnification claims.
• The company's participation in certain insurance policies arranged by Rank could be subject to termination if the company ceases to be an affiliate of Rank.

Future Outlook

The Company now expects the Merger to be consummated before it would ordinarily file a definitive proxy statement in relation to the election of directors for 2025.

Industry Context

The document provides insight into executive compensation and governance practices within the packaging industry, particularly in the context of a pending merger. The peer group analysis offers a glimpse into how Pactiv Evergreen benchmarks its compensation against similar companies in the houseware and specialties, metal and glass containers, paper packaging and paper products industries.

Comparison to Industry Standards

• The document references a peer group of companies including AptarGroup, Inc., Berry Global Group, Inc., Crown Holdings, Inc., Graphic Packaging Holding Company, and Silgan Holdings Inc., among others.
• The company uses market data from Pearl Meyer to ensure continued alignment with its goals and shareholders interests.
• The company's compensation program emphasizes a pay-for-performance compensation philosophy so that attainment of enterprise-wide, operating segment and individual performance goals are rewarded.

Related Party Transactions

• Pactiv LLC has supply arrangements with RCP, charging RCP $326.4 million and being charged $77.4 million during 2024.
• Pactiv LLC and RCP have a warehousing and freight services agreement, with Pactiv LLC charging RCP $11.7 million during 2024.
• Pactiv Evergreen Services Inc. has an Information Technology Services Agreement with RCP.
• Pactiv Evergreen has IT License Usage Agreements with Rank and Graham Packaging, receiving $4.8 million in 2024.
• Pactiv Evergreen Services Inc. has an IT License Usage Agreement with Rank and RCP, receiving $1.5 million in 2024.
• RCP leases its corporate headquarters from Pactiv LLC, with Pactiv LLC charging RCP $2.1 million in 2024.
• Pactiv Evergreen has Tax Matters Agreements with RCP and Graham Packaging.
• Pactiv Evergreen has an Investment Advisory Agreement with Rank Treasury Limited, with Rank charging Pactiv Evergreen $1.4 million in 2024.
• Pactiv Evergreen has an Insurance Sharing Agreement with Rank, with Aon paying $11.6 million to Rank Captive Insurance LLC.

Stakeholder Impact

• Shareholders will receive $18.00 per share in the merger with Novolex.
• Employees may be affected by the merger and any subsequent restructuring.
• The company's performance and compensation practices may impact employee morale and retention.
• Customers and suppliers may be affected by changes in the company's operations and strategy following the merger.

Next Steps

• Consummation of the merger with Novolex.
• Final reconciliation of the 2024 AIP payments to the NEOs.
• Settlement of the 2022 PSUs.

Key Dates

Keywords

merger, executive compensation, corporate governance, directors, Novolex, Pactiv Evergreen, Form 10-K, related party transactions, equity incentive plan, AIP, LTIP