10-12B/A

As filed with the Securities and Exchange Commission on April 20, 2016

Registration No. 001-37586​

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 4
to
FORM 10

GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934

Ingevity Corporation

(Exact Name of Registrant as Specified in Its Charter)

Delaware	47-4027764
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

5255 Virginia Avenue North Charleston, SC	29406
(Address of Principal Executive Offices)	(Zip Code)

(843) 740-2300

(Registrant’s telephone number, including area code)

Securities to be registered pursuant to Section 12(b) of the Act:

Title of each class to be so registered	Name of each exchange on which each class is to be registered
Common Stock, par value $0.01 per share	New York Stock Exchange

Securities to be registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of  “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

☐ Large accelerated filer	☐ Accelerated filer
☑ Non-accelerated filer	☐ Smaller reporting company
(Do not check if a smaller reporting company)

INFORMATION REQUIRED IN REGISTRATION STATEMENT
CROSS-REFERENCE SHEET BETWEEN INFORMATION STATEMENT AND
ITEMS OF FORM 10

Our information statement is filed as Exhibit 99.1 to this Form 10. For your convenience, we have provided below a cross-reference sheet identifying where the items required by Form 10 can be found in our information statement. None of the information contained in the information statement shall be incorporated by reference herein or deemed to be a part hereof unless such information is specifically incorporated by reference.

Item No.	Caption	Location in Information Statement
Item 1.	Business	The following sections of our information statement are hereby incorporated by reference: “Summary,” “Risk Factors,” “Cautionary Statement for the Purposes of the ‘Safe Harbor’ Provisions of the Private Securities Litigation Reform Act of 1995,” “The Separation,” “Capitalization,” “Business,” “Certain Relationships and Related Person Transactions,” “Where You Can Find More Information” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Item 1A.	Risk Factors	The following sections of our information statement are hereby incorporated by reference: “Risk Factors” and “Cautionary Statement for the Purposes of the ‘Safe Harbor’ Provisions of the Private Securities Litigation Reform Act of 1995.”
Item 2.	Financial Information	The following sections of our information statement are hereby incorporated by reference: “Summary,” “Selected Historical Combined Financial Information of Ingevity,” “Risk Factors,” “Capitalization,” “Unaudited Pro Forma Combined Financial Statements,” “Index to Financial Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Quantitative and Qualitative Disclosures About Market Risk.”
Item 3.	Properties	The following section of our information statement is hereby incorporated by reference: “Business — Properties.”
Item 4.	Security Ownership of Certain Beneficial Owners and Management	The following section of our information statement is hereby incorporated by reference: “Stock Ownership.”
Item 5.	Directors and Executive Officers	The following section of our information statement is hereby incorporated by reference: “Management.”

Item No.	Caption	Location in Information Statement
Item 6.	Executive Compensation	The following sections of our information statement are hereby incorporated by reference: “Management,” “Compensation Discussion and Analysis,” “Executive Compensation,” and “Certain Relationships and Related Person Transactions.”
Item 7.	Certain Relationships and Related Person Transactions, and Director Independence	The following sections of our information statement are hereby incorporated by reference: “Certain Relationships and Related Person Transactions,” “Management” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Item 8.	Legal Proceedings	The following section of our information statement is hereby incorporated by reference: “Business — Legal Proceedings.”
Item 9.	Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters	The following sections of our information statement are hereby incorporated by reference: “Summary,” “The Separation,” “Dividend Policy,” “Capitalization” and “Description of Capital Stock.”
Item 10.	Recent Sales of Unregistered Securities	Not applicable.
Item 11.	Description of Registrant’s Securities to be Registered	The following sections of our information statement are hereby incorporated by reference: “Dividend Policy” and “Description of Capital Stock.”
Item 12.	Indemnification of Directors and Officers	The following sections of our information statement are hereby incorporated by reference: “Description of Capital Stock — Limitation on Liability of Directors and Indemnification of Directors and Officers.”
Item 13.	Financial Statements and Supplementary Data	The following sections of our information statement are hereby incorporated by reference: “Index to Financial Statements” and the statements referenced therein.
Item 14.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	Not applicable.
Item 15.	Financial Statements and Exhibits	The following sections of our information statement are hereby incorporated by reference: “Unaudited Pro Forma Combined Financial Statements” and “Index to Financial Statements” and the statements referenced therein.

(a)

List of Financial Statements and Schedules.

The following financial statements are included in the information statement and filed as part of this Registration Statement on Form 10:

(1)

Unaudited Pro Forma Combined Financial Statements; and

(2)

Financial Statements, including Report of Independent Registered Public Accounting Firm.

(b)

Exhibits.

The following documents are filed as exhibits hereto:

Exhibit No.	Exhibit Description
2.1	Form of Separation and Distribution Agreement between Ingevity Corporation and WestRock Company.
3.1	Form of Ingevity Corporation Amended and Restated Certificate of Incorporation.†
3.2	Form of Ingevity Corporation Amended and Restated Bylaws.†
10.1	Form of Tax Matters Agreement between Ingevity Corporation and WestRock Company.†
10.2	Form of Transition Services Agreement between Ingevity Corporation and WestRock Company.
10.3	Form of Employee Matters Agreement between Ingevity Corporation and WestRock Company.†
10.4	Form of Covington Plant Services Agreement between Ingevity Virginia Corporation and WestRock Virginia, LLC.†
10.5	Form of Covington Plant Ground Lease Agreement between Ingevity Virginia Corporation and WestRock Virginia, LLC.
10.6	Form of Crude Tall Oil and Black Liquor Soap Skimmings Agreement by and between Ingevity Corporation, WestRock Shared Services, LLC and WestRock MWV, LLC.
10.7	Form of Prospective Board Member Consulting Agreement.†
10.8	Credit Agreement, dated as of March 7, 2016, among Ingevity Corporation, as U.S. borrower, the lenders from time to time party thereto and Wells Fargo Bank, N.A., as administrative agent.†
10.9	Form of Intellectual Property Agreement by and between WestRock Company and Ingevity Corporation.
10.10	Employment Letter, dated September 18, 2015, between WestRock Company, Ingevity Corporation and John Fortson.†
10.11	Employment Letter, dated October 2, 2015, between WestRock Company, Ingevity Corporation and Katherine P. Burgeson.†
10.12	Employment Letter, dated July 24, 2015, between WestRock Company, Ingevity Corporation and Michael Wilson.†
10.13	Form of Ingevity Corporation 2016 Omnibus Incentive Plan.†
10.14	Form of Trust Agreement, between Ingevity Corporation, The Bank of New York Mellon Trust Company, N.A. and WestRock Company.†
21.1	List of Subsidiaries of Ingevity Corporation.†
99.1	Preliminary Information Statement of Ingevity Corporation, subject to completion, dated March 7, 2016.

*

To be filed by amendment.

†

Previously filed.

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized.

INGEVITY CORPORATION
By:	/s/ Katherine P. Burgeson
Name:	Katherine P. Burgeson
Title:	Senior Vice President, General Counsel and Secretary

Dated: April 20, 2016

EXHIBIT INDEX

Exhibit No.	Exhibit Description
2.1	Form of Separation and Distribution Agreement between Ingevity Corporation and WestRock Company.
3.1	Form of Ingevity Corporation Amended and Restated Certificate of Incorporation.†
3.2	Form of Ingevity Corporation Amended and Restated Bylaws.†
10.1	Form of Tax Matters Agreement between Ingevity Corporation and WestRock Company.†
10.2	Form of Transition Services Agreement between Ingevity Corporation and WestRock Company.
10.3	Form of Employee Matters Agreement between Ingevity Corporation and WestRock Company.†
10.4	Form of Covington Plant Services Agreement between Ingevity Virginia Corporation and WestRock Virginia, LLC.†
10.5	Form of Covington Plant Ground Lease Agreement between Ingevity Virginia Corporation and WestRock Virginia, LLC.
10.6	Form of Crude Tall Oil and Black Liquor Soap Skimmings Agreement by and between Ingevity Corporation, WestRock Shared Services, LLC and WestRock MWV, LLC.
10.7	Form of Prospective Board Member Consulting Agreement.†
10.8	Credit Agreement, dated as of March 7, 2016, among Ingevity Corporation, as U.S. borrower, the lenders from time to time party thereto and Wells Fargo Bank, N.A., as administrative agent.†
10.9	Form of Intellectual Property Agreement by and between WestRock Company and Ingevity Corporation.
10.10	Employment Letter, dated September 18, 2015, between WestRock Company, Ingevity Corporation and John Fortson.†
10.11	Employment Letter, dated October 2, 2015, between WestRock Company, Ingevity Corporation and Katherine P. Burgeson.†
10.12	Employment Letter, dated July 24, 2015, between WestRock Company, Ingevity Corporation and Michael Wilson.†
10.13	Form of Ingevity Corporation 2016 Omnibus Incentive Plan.†
10.14	Form of Trust Agreement, between Ingevity Corporation, The Bank of New York Mellon Trust Company, N.A. and WestRock Company.†
21.1	List of Subsidiaries of Ingevity Corporation.†
99.1	Preliminary Information Statement of Ingevity Corporation, subject to completion, dated March 7, 2016.

*

To be filed by amendment.

†

Previously filed.

EX-2.1

EXHIBIT 2.1

SEPARATION AND DISTRIBUTION AGREEMENT

BY AND BETWEEN

WESTROCK COMPANY

AND

INGEVITY CORPORATION

DATED AS OF _______, 2016

TABLE OF CONTENTS

		Page
Article I DEFINITIONS		2
Article II THE SEPARATION		13
2.1	Transfer of Assets and Assumption of Liabilities	13
2.2	SpinCo Assets; Parent Assets	15
2.3	SpinCo Liabilities; Parent Liabilities	17
2.4	Approvals and Notifications	19
2.5	Novation of Liabilities	22
2.6	Release of Guarantees	23
2.7	Termination of Agreements	24
2.8	Treatment of Shared Contracts	25
2.9	Bank Accounts; Cash Balances	26
2.10	Ancillary Agreements	27
2.11	Disclaimer of Representations and Warranties	28
2.12	SpinCo Financing Arrangements; Cash Transfers	28
2.13	Financial Information Certifications	28
2.14	Transition Representatives	28
Article III THE DISTRIBUTION		29
3.1	Sole and Absolute Discretion; Cooperation	29
3.2	Actions Prior to the Distribution	29
3.3	Conditions to the Distribution	30
3.4	The Distribution	32
Article IV MUTUAL RELEASES; INDEMNIFICATION		33
4.1	Release of Pre-Distribution Claims	33
4.2	Indemnification by SpinCo	35
4.3	Indemnification by Parent	36
4.4	Indemnification Obligations Net of Insurance Proceeds and Other Amounts	36
4.5	Procedures for Indemnification of Third-Party Claims	37
4.6	Additional Matters	39
4.7	Right of Contribution	41
4.8	Covenant Not to Sue	41
4.9	Remedies Cumulative	42
4.10	Survival of Indemnities	42
Article V CERTAIN OTHER MATTERS		42
5.1	Insurance Matters	42
5.2	Late Payments	44
5.3	Treatment of Payments for Tax Purposes	45
5.4	Inducement	45
5.5	Post-Effective Time Conduct	45

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Article VI EXCHANGE OF INFORMATION; CONFIDENTIALITY		45
6.1	Agreement for Exchange of Information	45
6.2	Ownership of Information	46
6.3	Compensation for Providing Information	46
6.4	Record Retention	46
6.5	Limitations of Liability	47
6.6	Other Agreements Providing for Exchange of Information	47
6.7	Production of Witnesses; Records; Cooperation	47
6.8	Privileged Matters	48
6.9	Confidentiality	50
6.10	Protective Arrangements	51
Article VII DISPUTE RESOLUTION		52
7.1	Good-Faith Negotiation	52
7.2	Mediation	52
7.3	Arbitration	53
7.4	Litigation and Unilateral Commencement of Arbitration	55
7.5	Conduct During Dispute Resolution Process	55
Article VIII FURTHER ASSURANCES AND ADDITIONAL COVENANTS		56
8.1	Further Assurances	56
Article IX TERMINATION		57
9.1	Termination	57
9.2	Effect of Termination	57
Article X MISCELLANEOUS		57
10.1	Counterparts; Entire Agreement; Corporate Power	57
10.2	Governing Law	58
10.3	Assignability	58
10.4	Third-Party Beneficiaries	58
10.5	Notices	59
10.6	Severability	60
10.7	Force Majeure	60
10.8	No Set-Off	60
10.9	Publicity	60
10.10	Expenses	60
10.11	Headings	61
10.12	Survival of Covenants	61
10.13	Waivers of Default	61
10.14	Specific Performance	61
10.15	Amendments	61
10.16	Interpretation	61
10.17	Limitations of Liability	62
10.18	Performance	62
10.19	Mutual Drafting	62

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SCHEDULES

Schedule 1.1	SpinCo Discontinued or Divested Businesses
Schedule 1.2	SpinCo Contracts
Schedule 1.5	Transferred Entities
Schedule 2.1(a)	Plan of Reorganization
Schedule 2.1(a)(iv)	Parent Business Discontinued Operations
Schedule 2.2(a)(v)	Real Property Interests
Schedule 2.2(a)(xiii)	SpinCo Assets
Schedule 2.2(b)(vii)	Parent Assets
Schedule 2.3(a)	SpinCo Liabilities
Schedule 2.3(b)	Parent Liabilities
Schedule 2.5(a)	Novation of SpinCo Liabilities
Schedule 2.7(b)(ii)	Intercompany Agreements
Schedule 2.8(a)	Shared Contracts
Schedule 2.15	Awards from Litigation, Tribunals and Settlements
Schedule 4.3(e)	Specified Parent Information

EXHIBITS

Exhibit A	Covington Plant Services Agreement
Exhibit B	Covington Plant Ground Lease Agreement
Exhibit C	Crude Tall Oil and Black Liquor Soap Skimmings Agreement
Exhibit D	Employee Matters Agreement
Exhibit E	Intellectual Property Agreement
Exhibit F	Amended and Restated Bylaws of Ingevity Corporation
Exhibit G	Amended and Restated Certificate of Incorporation of Ingevity Corporation
Exhibit H	Tax Matters Agreement
Exhibit I	Transition Services Agreement

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SEPARATION AND DISTRIBUTION AGREEMENT

This SEPARATION AND DISTRIBUTION AGREEMENT, dated as of ______, 2016 (this “Agreement”), is by and between WestRock Company, a Delaware corporation (“Parent”), and Ingevity Corporation, a Delaware corporation (“SpinCo”). Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Article I.

R E C I T A L S

WHEREAS, the board of directors of Parent (the “Parent Board”) has determined that it is in the best interests of Parent and its shareholders to create a new publicly traded company that shall operate the SpinCo Business;

WHEREAS, in furtherance of the foregoing, the Parent Board has determined that it is appropriate and desirable to separate the SpinCo Business from the Parent Business (the “Separation”) and, following the Separation, make a distribution, on a pro rata basis, to holders of Parent Shares on the Record Date of all the outstanding SpinCo Shares owned by Parent (the “Distribution”);

WHEREAS, SpinCo has been incorporated solely for these purposes and has not engaged in any activities except in preparation for the Separation and the Distribution;

WHEREAS, for U.S. federal income tax purposes, the contribution by Parent of the SpinCo Assets and the SpinCo Liabilities to SpinCo (the “Contribution”) and the Distribution, taken together, are intended to qualify as a transaction that is tax-free under Section 355 and 368(a)(1)(D) of the Internal Revenue Code of 1986, as amended (the “Code”);

WHEREAS, Parent has received a private letter ruling from the IRS regarding certain U.S. federal income tax matters relating to the Separation, Distribution and certain related transactions (the “IRS Ruling”);

WHEREAS, SpinCo and Parent have prepared, and SpinCo has filed with the SEC, the Form 10, which includes the Information Statement, and which sets forth disclosure concerning SpinCo, the Separation and the Distribution; and

WHEREAS, each of Parent and SpinCo has determined that it is appropriate and desirable to set forth the principal corporate transactions required to effect the Separation and the Distribution and certain other agreements that will govern certain matters relating to the Separation and the Distribution and the relationship of Parent, SpinCo and the members of their respective Groups following the Distribution.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

Article I
DEFINITIONS

For the purpose of this Agreement, the following terms shall have the following meanings:

“Action” shall mean any demand, action, claim, dispute, suit, countersuit, arbitration, inquiry, subpoena, proceeding or investigation of any nature (whether criminal, civil, legislative, administrative, regulatory, prosecutorial or otherwise) by or before any federal, state, local, foreign or international Governmental Authority or any arbitration or mediation tribunal.

“Affiliate” shall mean, when used with respect to a specified Person, a Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person. For the purpose of this definition, “control” (including with correlative meanings, “controlled by” and “under common control with”), when used with respect to any specified Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities or other interests, by contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment, undertaking or otherwise. It is expressly agreed that, prior to, at and after the Effective Time, for purposes of this Agreement and the Ancillary Agreements, (a) no member of the SpinCo Group shall be deemed to be an Affiliate of any member of the Parent Group and (b) no member of the Parent Group shall be deemed to be an Affiliate of any member of the SpinCo Group.

“Agent” shall mean the trust company or bank duly appointed by Parent to act as distribution agent, transfer agent and registrar for the SpinCo Shares in connection with the Distribution.

“Agreement” shall have the meaning set forth in the Preamble.

“Ancillary Agreement” shall mean agreements (other than this Agreement) entered into by the Parties or the members of their respective Groups (but as to which no Third Party is a party) in connection with the Separation, the Distribution, or the other transactions contemplated by this Agreement, including the Transition Services Agreement, the Tax Matters Agreement, the Employee Matters Agreement, the Intellectual Property Agreement, the Crude Tall Oil and Black Liquor Soap Skimmings Agreement, the Covington Plant Services Agreement, the Covington Plant Ground Lease Agreement and the Transfer Documents.

“Approvals or Notifications” shall mean any consents, waivers, approvals, permits or authorizations to be obtained from, notices, registrations or reports to be submitted to, or other filings to be made with, any third Person, including any Governmental Authority.

“Arbitration Request” shall have the meaning set forth in Section 7.3(a).

“Assets” shall mean, with respect to any Person, the assets, properties, claims and rights (including goodwill) of such Person, wherever located (including in the possession of vendors or other third Persons or elsewhere), of every kind, character and description, whether real, personal or mixed, tangible, intangible or contingent, in each case whether or not recorded

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or reflected or required to be recorded or reflected on the books and records or financial statements of such Person, including rights and benefits pursuant to any contract, license, permit, accounts receivable, indenture, note, bond, mortgage, agreement, concession, franchise, instrument, undertaking, commitment, understanding or other arrangement.

“Carbon Plant Real Property” shall have the meaning set forth in the Covington Plant Ground Lease Agreement.

“Cash Transfer” shall have the meaning set forth in Section 2.12(a).

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Contract” shall mean any contract, agreement, indenture, note, bond, loan, instrument, lease, (including any real property lease) conditional sale contract, purchase or sales order, mortgage, license, franchise, undertaking, commitment or other enforceable arrangement or agreement, but excluding any insurance policies and Permits.

“Contribution” shall have the meaning set forth in the Recitals.

“Covington Plant Services Agreement” shall mean the Covington Plant Services Agreement, in substantially the form of Exhibit A, to be entered into by and between Parent and SpinCo or any members of their respective Groups in connection with the Separation, the Distribution or the other transactions contemplated by this Agreement.

“Covington Plant Ground Lease Agreement” shall mean the Covington Plant Ground Lease Agreement , in substantially the form of Exhibit B, to be entered into by and between Parent and SpinCo or any members of their respective Groups in connection with the Separation, the Distribution or the other transactions contemplated by this Agreement.

“CPR” shall have the meaning set forth in Section 7.2.

“Crude Tall Oil and Black Liquor Soap Skimmings Agreement” shall mean the Crude Tall Oil and Black Liquor Soap Skimmings Agreement, in substantially the form of Exhibit C, to be entered into by and between Parent and SpinCo or any members of their respective Groups in connection with the Separation, the Distribution or the other transactions contemplated by this Agreement.

“Delayed Parent Asset” shall have the meaning set forth in Section 2.4(h).

“Delayed Parent Liability” shall have the meaning set forth in Section 2.4(h).

“Delayed SpinCo Asset” shall have the meaning set forth in Section 2.4(c).

“Delayed SpinCo Liability” shall have the meaning set forth in Section 2.4(c).

“Disclosure Document” shall mean any registration statement (including the Form 10) filed with the SEC by or on behalf of any Party or any member of its Group, and also includes any information statement (including the Information Statement), prospectus, offering

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memorandum, offering circular, periodic report or similar disclosure document, whether or not filed with the SEC or any other Governmental Authority, in each case which describes the Separation or the Distribution or the SpinCo Group or primarily relates to the transactions contemplated hereby.

“Dispute” shall have the meaning set forth in Section 7.1.

“Distribution” shall have the meaning set forth in the Recitals.

“Distribution Date” shall mean the date of the consummation of the Distribution, which shall be determined by the Parent Board in its sole and absolute discretion.

“Distribution Ratio” shall mean a number equal to [one] divided by _____.

“Effective Time” shall mean [11:59 p.m.], New York City time, on the Distribution Date.

“Employee Matters Agreement” shall mean the Employee Matters Agreement, in substantially the form attached hereto as Exhibit D, to be entered into by and between Parent and SpinCo in connection with the Separation, the Distribution and the other transactions contemplated by this Agreement.

“Environmental Law” shall mean any Law relating to pollution, protection or restoration of or prevention of harm to the environment or natural resources, including the use, handling, transportation, treatment, storage, disposal, Release or discharge of Hazardous Materials or the protection of or prevention of harm to human health and safety.

“Environmental Liabilities” shall mean all Liabilities relating to, arising out of or resulting from any Hazardous Materials, SpinCo Environmental Condition or Parent Environmental Condition (as applicable), Environmental Law or Contract relating to environmental, health or safety matters (including all corrective actions, removal, remediation or cleanup costs, investigation, monitoring and/or sampling obligations or costs, response costs, financial assurance obligations or costs, natural resources damages, property damages, personal injury damages or with any settlement, judgment or other determination of Liability and indemnity, contribution or similar obligations) and all costs and expenses, interest, fines, penalties or other monetary sanctions in connection therewith.

“Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended, together with the rules and regulations promulgated thereunder.

“Force Majeure” shall mean, with respect to a Party, an event beyond the reasonable control of such Party (or any Person acting on its behalf), which event (a) does not arise or result from the fault or negligence of such Party (or any Person acting on its behalf) and (b) by its nature would not reasonably have been foreseen by such Party (or such Person), or, if it would reasonably have been foreseen, was unavoidable, and includes acts of God, acts of civil or military authority, embargoes, epidemics, war (declared or undeclared), riots, insurrections, fires, explosions, earthquakes, floods, unusually severe weather conditions, labor problems or unavailability of parts, or, in the case of computer systems, any significant and prolonged failure

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in electrical or air conditioning equipment. Notwithstanding the foregoing, the receipt by a Party of an unsolicited takeover offer or other acquisition proposal, even if unforeseen or unavoidable, and such Party’s response thereto shall not be deemed an event of Force Majeure.

“Form 10” shall mean the registration statement on Form 10 filed by SpinCo with the SEC to effect the registration of SpinCo Shares pursuant to the Exchange Act in connection with the Distribution, as such registration statement may be amended or supplemented from time to time prior to the Distribution.

“Governmental Approvals” shall mean any Approvals or Notifications to be made to, or obtained from, any Governmental Authority.

“Governmental Authority” shall mean any nation or government, any state, municipality or other political subdivision thereof, and any entity, body, agency, commission, department, board, bureau, court, tribunal or other instrumentality, whether federal, state, local, domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory, administrative or other similar functions of, or pertaining to, government and any executive official thereof.

“Group” shall mean either the SpinCo Group or the Parent Group, as the context requires.

“Hazardous Materials” shall mean any chemical, material, substance, waste, pollutant, emission, discharge, release or contaminant that could result in Liability under, or that is prohibited, limited or regulated by or pursuant to, any Environmental Law, and any natural or artificial substance (whether solid, liquid or gas, noise, ion, vapor or electromagnetic) that could cause harm to human health or the environment, including petroleum, petroleum products and byproducts, asbestos and asbestos-containing materials, urea formaldehyde foam insulation, lead based paint, electronic, medical or infectious wastes, polychlorinated biphenyls, radon gas, radioactive substances, chlorofluorocarbons and all other ozone-depleting substances.

“Indemnifying Party” shall have the meaning set forth in Section 4.4(a).

“Indemnitee” shall have the meaning set forth in Section 4.4(a).

“Indemnity Payment” shall have the meaning set forth in Section 4.4(a).

“Information” shall mean information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data; provided that “Information” shall not include Intellectual Property (as defined in the Intellectual Property Agreement).

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“Information Statement” shall mean the information statement filed with the Securities and Exchange Commission in connection with the Distribution, as such information statement may be amended or supplemented from time to time prior to the Distribution.

“Initial Notice” shall have the meaning set forth in Section 7.1.

“Insurance Proceeds” shall mean those monies:

(a)          received by an insured from an insurance carrier; or

(b)          paid by an insurance carrier on behalf of the insured;

in any such case net of any applicable premium adjustments (including reserves and retrospectively rated premium adjustments) and net of any costs or expenses incurred in the collection thereof.

“Intellectual Property Agreement” shall mean the Intellectual Property Agreement, in substantially the form attached hereto as Exhibit E, to be entered into by and between Parent and SpinCo or any members of their respective Groups in connection with the Separation, the Distribution or the other transactions contemplated by this Agreement, and “Intellectual Property” shall have the meaning set forth in the Intellectual Property Agreement.

“IRS” shall mean the U.S. Internal Revenue Service.

“IRS Ruling” shall have the meaning set forth in the Recitals.

“Law” shall mean any national, supranational, federal, state, provincial, local or similar law (including common law), statute, code, order, ordinance, rule, regulation, treaty (including any income tax treaty), license, permit, authorization, approval, consent, decree, injunction, binding judicial or administrative interpretation, directive or other requirement, in each case, enacted, promulgated, issued or entered by a Governmental Authority.

“Liabilities” shall mean all claims, demands, debts, guarantees, assurances, commitments, liabilities, responsibilities, Losses, remediation, deficiencies, damages (including consequential damages, diminution in value and amounts paid in settlement), fines, penalties, settlements, sanctions, costs, expenses, interest and obligations of any nature or kind, whether accrued or fixed, absolute or contingent, matured or unmatured, accrued or not accrued, asserted or unasserted, liquidated or unliquidated, foreseen or unforeseen, known or unknown, reserved or unreserved, or determined or determinable, including those arising under any Law, Permit, claim (including any Third-Party Claim), Action, or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority or arbitration tribunal, those arising under or relating to any warning letter, notice of violation, cease and desist order, investigation, information request or similar enforcement or pre-enforcement action, and those arising under any contract, agreement, obligation, accounts payable, indenture, instrument, lease, promise, arrangement, release, warranty, commitment or undertaking, compliance with any product take back requirements, or any fines, damages or equitable relief that is imposed, in each case, including all costs and expenses relating thereto.

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“Linked” shall have the meaning set forth in Section 2.9(a).

“Losses” shall mean actual losses (including any diminution in value), costs, damages, penalties and expenses (including legal, consulting, expert, engineering and accounting fees and expenses and costs of investigation and litigation), whether or not involving a Third-Party Claim.

“Mediation Request” shall have the meaning set forth in Section 7.2.

“NYSE” shall mean the New York Stock Exchange.

“Parent” shall have the meaning set forth in the Preamble.

“Parent Accounts” shall have the meaning set forth in Section 2.9(a).

“Parent Assets” shall have the meaning set forth in Section 2.2(b).

“Parent Board” shall have the meaning set forth in the Recitals.

“Parent Business” shall mean all businesses, operations and activities (whether or not such businesses, operations or activities are or have been terminated, divested or discontinued) conducted at any time prior to the Effective Time by either Party or any member of its Group, other than the SpinCo Business.

“Parent Business Discontinued Operations” shall have the meaning set forth in Section 2.1(a)(iv).

“Parent Environmental Condition” shall mean any condition with respect to the environment which existed in the past, now exists or may hereafter be found to exist in, on, under, or about any real property owned, formerly owned, leased or subleased, formerly leased or subleased, or otherwise used by Parent Group, a Parent Business or a Parent Asset in Covington, Virginia but excluding the Carbon Plant Real Property (a “Parent Property” or collectively, the “Parent Properties”), including, without limitation: conditions in, on or under any improvements on the Properties (including the presence of asbestos, lead-based paint and mold); the off-site migration of Hazardous Material from the Parent Properties; the migration of Hazardous Material onto the Parent Properties; other contamination of the environment (including, without limitation, ambient air, surface or subsurface soil or strata, air, water (whether surface water or ground water) or sediments) by Hazardous Material; and impacts to or natural resource damages arising from conditions in, on or under the Parent Properties.

“Parent Environmental Liabilities” shall have the meaning set forth in Section 2.3(b)(ii).

“Parent Group” shall mean Parent and each Person that is a Subsidiary of Parent (other than SpinCo and any other member of the SpinCo Group).

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“Parent Indemnitees” shall have the meaning set forth in Section 4.2.

“Parent Liabilities” shall have the meaning set forth in Section 2.3(b).

“Parent Portion” shall have the meaning set forth in Section 2.8(a).

“Parent Shares” shall mean the shares of common stock of, par value $0.01 per share, of Parent.

“Parties” shall mean the parties to this Agreement.

“Permits” means permits, approvals, authorizations, consents, licenses, registrations or certificates issued by any Governmental Authority.

“Person” shall mean an individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated organization, a limited liability entity, any other entity and any Governmental Authority.

“Plan of Reorganization” shall have the meaning set forth in Section 2.1(a).

“Prime Rate” means the rate that Bloomberg displays as “Prime Rate by Country United States” at www.bloomberg.com/markets/rates-bonds/key-rates/ or on a Bloomberg terminal at PRIMBB Index.

“Prior Period” shall have the meaning set forth in Section 5.1(b).

“Prior Period Claims” shall have the meaning set forth in Section 5.1(b)(i).

“Privileged Information” means any information, in written, oral, electronic or other tangible or intangible forms, including any communications by or to attorneys (including attorney-client privileged communications), memoranda and other materials prepared by attorneys or under their direction (including attorney work product), as to which a Party or any member of its Group would be entitled to assert or has asserted a privilege, including the attorney-client and attorney work product privileges.

“Procedure” shall have the meaning set forth in Section 7.2.

“Real Property Interests” shall mean all interests in real property of whatever nature, including easements, whether as owner or holder of a Security Interest, lessor, sublessor, lessee, sublessee or otherwise.

“Record Date” shall mean the close of business on the date to be determined by the Parent Board as the record date for determining holders of Parent Shares entitled to receive SpinCo Shares pursuant to the Distribution.

“Record Holders” shall mean the holders of record of Parent Shares as of the Record Date.

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“Release” shall mean any release, spill, emission, discharge, leaking, pumping, pouring, dumping, injection, deposit, disposal, dispersal, leaching or migration of Hazardous Materials into the environment (including, ambient air, surface water, groundwater and surface or subsurface strata).

“Representatives” shall mean, with respect to any Person, any of such Person’s directors, officers, employees, agents, consultants, advisors, accountants, attorneys or other representatives.

“SEC” shall mean the U.S. Securities and Exchange Commission.

“Security Interest” shall mean any mortgage, security interest, pledge, lien, charge, claim, option, right to acquire, voting or other restriction, right-of-way, covenant, condition, easement, encroachment, restriction on transfer, or other encumbrance of any nature whatsoever.

“Separation” shall have the meaning set forth in the Recitals.

“Shared Contract” shall mean any Contract of any member of either Group that relates in any material respect to both the SpinCo Business and the Parent Business, including, without limitation, the Contracts set forth on Schedule 2.8(A).

“SpinCo” shall have the meaning set forth in the Preamble.

“SpinCo Accounts” shall have the meaning set forth in Section 2.9(a).

“SpinCo Assets” shall have the meaning set forth in Section 2.2(a).

“SpinCo Business” shall mean (a) the business, operations and activities of the Specialty Chemicals Division of Parent conducted at any time prior to the Effective Time by either Party or any of their current or former Subsidiaries and (b) any terminated, divested or discontinued businesses, operations and activities that, at the time of termination, divestiture or discontinuation, primarily related to the business, operations or activities described in clause (a) as then conducted, including those set forth on Schedule 1.1, excluding, in the case of each of clause (a) and (b), the business, operations and activities primarily related to the Parent Assets including the Parent Business Discontinued Operations.

“SpinCo Bylaws” shall mean the Amended and Restated Bylaws of SpinCo, substantially in the form of Exhibit F.

“SpinCo Certificate of Incorporation” shall mean the Amended and Restated Certificate of Incorporation of SpinCo, substantially in the form of Exhibit G.

“SpinCo Contracts” shall mean the Contracts to which either Party or any member of its Group is a party or by which it or any member of its Group or any of their respective Assets is bound, whether or not in writing; provided that SpinCo Contracts including the following (but excluding (x) any contract or agreement that is expressly contemplated to be retained by Parent or any member of the Parent Group from and after the Effective Time

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pursuant to any provision of this Agreement or any Ancillary Agreement or (y) any contract or agreement governing Intellectual Property):

(a)          any vendor contracts or agreements with a Third Party pursuant to which such Third Party provides information technology, human resources or financial services to either Party or any member of its Group exclusively used or exclusively held for use in the SpinCo Business as of the Effective Time;

(b)           other than any vendor contracts or agreements with a Third Party pursuant to which such Third Party provides information technology, human resources or financial services to either Party or any member of its Group (which contracts and agreements are addressed in clause (a) above to the extent that they shall constitute a SpinCo Contract), (i) any customer, distribution, supply or vendor contract or agreement entered into prior to the Effective Time exclusively related to the SpinCo Business and (ii) with respect to any customer, distribution, supply or vendor contract or agreement entered into prior to the Effective Time that relates to the SpinCo Business but is not exclusively related to the SpinCo Business, that portion of any such customer, distribution, supply or vendor contract or agreement that relates to the SpinCo Business;

(c)          other than any vendor contracts or agreements with a Third Party pursuant to which such Third Party provides information technology, human resources or financial services to either Party or any member of its Group (which contracts and agreements are addressed in clause (a) above to the extent that they shall constitute a SpinCo Contract), any license, that does not govern Intellectual Property, entered into prior to the Effective Time exclusively related to the SpinCo Business;

(d)          any contract containing any guarantee, indemnity, representation, covenant, warranty or other Liability of either Party or any member of its Group in respect of any other SpinCo Contract, any SpinCo Liability or the SpinCo Business, including any administrative or judicial order or decree, settlement agreement or other agreement with a Governmental Authority;

(e)          any contract or agreement that is otherwise expressly contemplated pursuant to this Agreement or any of the Ancillary Agreements to be assigned to, or be a contract or agreement in the name of, SpinCo or any member of the SpinCo Group;

(f)           any interest rate, currency, commodity or other swap, collar, cap or other hedging or similar agreements or arrangements related exclusively to the SpinCo Business or entered into in the name of, or expressly on behalf of any division, business unit or member of the SpinCo Group; and

(g)          any credit or other financing agreement entered into by SpinCo and/or any member of the SpinCo Group in connection with the Separation;

(h)          any other contract or agreement exclusively related to the SpinCo Business or SpinCo Assets; and

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(i)           any contracts, agreements or settlements set forth on Schedule 1.2, including the right to recover any amounts under such contracts, agreements or settlements.

“SpinCo Designees” shall mean any and all entities (including corporations, general or limited partnerships, trusts, joint ventures, unincorporated organizations, limited liability entities or other entities) set forth on Schedule 1.5 that will be members of the SpinCo Group as of immediately prior to the Effective Time.

“SpinCo Environmental Condition” shall mean any condition with respect to the environment which existed in the past, now exists or may hereafter be found to exist in, on, under, or about any real property owned, formerly owned, leased or subleased, formerly leased or subleased, or otherwise used by SpinCo, a SpinCo Business or a SpinCo Asset, including the Carbon Plant Real Property and any Third Party owned or operated location where SpinCo transported, used, treated, stored, disposed, recycled or Released any waste or any Hazardous Material, (a “Property” or collectively, the “Properties”), including, without limitation: conditions in, on or under any improvements on the Properties (including the presence of asbestos, lead-based paint and mold); the off-site migration of Hazardous Material from the Properties; the migration of Hazardous Material onto the Properties; other contamination of the environment (including, without limitation, ambient air, surface or subsurface soil or strata, air, water (whether surface water or ground water) or sediments) by Hazardous Material; and impacts to or natural resource damages arising from conditions in, on or under the Properties.

“SpinCo Environmental Liabilities” shall have the meaning set forth in Section 2.3(a)(ii).

“SpinCo Financing Arrangements” shall have the meaning set forth in Section 2.12(a).

“SpinCo Group” shall mean (a) prior to the Effective Time, SpinCo and each Person that will be a Subsidiary of SpinCo as of immediately after the Effective Time, including the Transferred Entities, even if, prior to the Effective Time, such Person is not a Subsidiary of SpinCo; and (b) on and after the Effective Time, SpinCo and each Person that is a Subsidiary of SpinCo.

“SpinCo Indemnitees” shall have the meaning set forth in Section 4.3.

“SpinCo Liabilities” shall have the meaning set forth in Section 2.3(a).

“SpinCo Permits” shall mean all Permits owned or licensed by either Party or member of its Group and exclusively used or exclusively held for use in the SpinCo Business as of the Effective Time.

“SpinCo Portion” shall have the meaning set forth in Section 2.8(a).

“SpinCo Shares” shall mean the shares of common stock, par value $0.01 per share, of SpinCo.

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“Subsidiary” shall mean, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (a) beneficially owns, either directly or indirectly, more than 50% of (i) the total combined voting power of all classes of voting securities, (ii) the total combined equity interests or (iii) the capital or profit interests, in the case of a partnership, or (b) otherwise has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.

“Tangible Information” means Information that is contained in written, electronic or other tangible forms.

“Tax” shall have the meaning set forth in the Tax Matters Agreement.

“Tax Matters Agreement” shall mean the Tax Matters Agreement, in substantially the form attached hereto as Exhibit H, to be entered into by and between Parent and SpinCo or any members of their respective Groups in connection with the Separation, the Distribution or the other transactions contemplated by this Agreement.

“Tax Return” shall have the meaning set forth in the Tax Matters Agreement.

“Third Party” means any Person other than the Parties or any members of their respective Groups.

“Third-Party Claim” shall have the meaning set forth in Section 4.5(a).

“Transfer Documents” shall have the meaning set forth in Section 2.1(b).

“Transferred Entities” shall mean the entities set forth on Schedule 1.5.

“Transition Representatives” shall have the meaning set forth in Section 2.14.

“Transition Services Agreement” shall mean the Transition Services Agreement substantially in the form of Exhibit I hereof to be entered into by and between Parent and SpinCo or any members of their respective Groups in connection with the Separation, the Distribution or the other transactions contemplated by this Agreement.

“Unreleased SpinCo Liability” shall have the meaning set forth in Section 2.5(a)(ii).

“Unreleased Parent Liability” shall have the meaning set forth in Section 2.5(b)(ii).

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Article II

THE SEPARATION

2.1          Transfer of Assets and Assumption of Liabilities.

(a)          On or prior to the Effective Time, but in any case, prior to the Distribution, in accordance with the plan and structure set forth on Schedule 2.1(a) (the “Plan of Reorganization”):

(i)          Transfer and Assignment of SpinCo Assets. Parent shall, and shall cause the applicable members of its Group to, contribute, assign, transfer, convey and deliver to SpinCo, or to the applicable SpinCo Designees, and SpinCo shall, and shall cause such SpinCo Designees to, accept from Parent and the applicable members of the Parent Group, all of Parent’s and such Parent Group member’s respective direct or indirect right, title and interest in and to all of the SpinCo Assets (it being understood that if any SpinCo Asset shall be held by a Transferred Entity or a wholly owned Subsidiary of a Transferred Entity, such SpinCo Asset may be assigned, transferred, conveyed and delivered to SpinCo as a result of the transfer of all of the equity interests in such Transferred Entity from Parent or the applicable members of the Parent Group to SpinCo or the applicable SpinCo Designee);

(ii)         Acceptance and Assumption of SpinCo Liabilities. SpinCo shall, and shall cause the applicable SpinCo Designees to, accept, assume and agree faithfully to perform, discharge and fulfill all the SpinCo Liabilities in accordance with their respective terms. SpinCo shall, and shall cause such SpinCo Designees to, be responsible for all SpinCo Liabilities, regardless of when or where such SpinCo Liabilities arose or arise, or whether the facts on which they are based occurred prior to or subsequent to the Effective Time, regardless of where or against whom such SpinCo Liabilities are asserted or determined (including any SpinCo Liabilities arising out of claims made by Parent’s or SpinCo’s respective directors, officers, employees, agents, Subsidiaries or Affiliates against any member of the Parent Group or the SpinCo Group) or whether asserted or determined prior to the date hereof, and regardless of whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud or misrepresentation by any member of the Parent Group or the SpinCo Group, or any of their respective directors, officers, employees, agents, Subsidiaries or Affiliates;

(iii)        Transfer and Assignment of Parent Assets. Parent and SpinCo shall cause SpinCo and the SpinCo Designees to contribute, assign, transfer, convey and deliver to Parent or certain members of the Parent Group designated by Parent, and Parent or such other members of the Parent Group shall accept from SpinCo and the SpinCo Designees, all of SpinCo’s and such SpinCo Designees’ respective direct or indirect right, title and interest in and to all Parent Assets held by SpinCo or a SpinCo Designee; and

(iv)        Acceptance and Assumption of Parent Liabilities. Parent shall, and shall cause certain of members of the Parent Group designated by Parent to, accept and assume and agree faithfully to perform, discharge and fulfill all of the Parent Liabilities held by Spin Co or any SpinCo Designee and set forth on Schedule 2.1(a)(iv) (“Parent Business Discontinued Operations”) and Parent and the applicable members of the Parent Group shall be responsible for all Parent Liabilities in accordance with their respective terms, regardless of when or where such Parent Liabilities arose or arise, whether the facts on which they are based occurred prior to or subsequent to the Effective Time,

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where or against whom such Parent Liabilities are asserted or determined (including any such Parent Liabilities arising out of claims made by Parent’s or SpinCo’s respective directors, officers, employees, agents, Subsidiaries or Affiliates against any member of the Parent Group or the SpinCo Group) or whether asserted or determined prior to the date hereof, and regardless of whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud or misrepresentation by any member of the Parent Group or the SpinCo Group, or any of their respective directors, officers, employees, agents, Subsidiaries or Affiliates.

(b)          Transfer Documents. In furtherance of the contribution, assignment, transfer, conveyance and delivery of the Assets and the assumption of the Liabilities in accordance with Section 2.1(a), (i) each Party shall execute and deliver, and shall cause the applicable members of its Group to execute and deliver, such bills of sale, deeds, stock powers, certificates of title, assignments of contracts and other instruments of transfer, conveyance and assignment as and to the extent necessary to evidence the transfer, conveyance and assignment of all of the right, title and interest of such Party and of the applicable members of such Party’s Group in and to such Assets to the other Party and the applicable members of its Group in accordance with Section 2.1(a), and (ii) each Party shall execute and deliver, and shall cause the applicable members of its Group to execute and deliver, to the other Party such assumptions of contracts and other instruments of assumption as and to the extent necessary to evidence the valid and effective assumption of the Liabilities by such Party and the applicable members of its Group in accordance with Section 2.1(a). All of the foregoing documents contemplated by this Section 2.1(b) shall be referred to collectively herein as the “Transfer Documents.” The Transfer Documents are intended by the parties to incorporate the steps in the Plan of Reorganization.

(c)          Misallocations. In the event that, at any time or from time to time (whether prior to, on or after the Effective Time), one Party (or any member of such Party’s Group) shall receive or otherwise possess any Asset that is allocated to the other Party (or any member of such other Party’s Group) pursuant to this Agreement or any Ancillary Agreement, such Party shall promptly transfer, or cause to be transferred, such Asset to the Party so entitled thereto (or to any member of such Party’s Group), and such Party (or member of such Party’s Group) shall accept such Asset. Prior to any such transfer, the Person receiving or possessing such Asset shall hold such Asset in trust for any such other Person. In the event that, at any time or from time to time (whether prior to, at or after the Effective Time), one Party hereto (or any member of such Party’s Group) shall receive or otherwise assume any Liability that is allocated to the other Party (or any member of such Party’s Group) pursuant to this Agreement or any Ancillary Agreement, such Party shall promptly transfer, or cause to be transferred, such Liability to the Party responsible therefor (or to any member of such Party’s Group), and such Party (or member of such Party’s Group) shall accept, assume and agree to faithfully perform such Liability in accordance with its terms. Any transfer or assumption rescinded pursuant to this Section 2.1(c) shall be treated by the Parties for all purposes as if such Asset or Liability had never been originally transferred or assumed, as the case may be, except as otherwise required by applicable Law.

(d)          Waiver of Bulk-Sale and Bulk-Transfer Laws. SpinCo hereby waives compliance by each and every member of the Parent Group with the requirements and provisions of any “bulk-sale” or “bulk-transfer” Laws of any jurisdiction that may otherwise be applicable

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with respect to the transfer or sale of any or all of the SpinCo Assets to any member of the SpinCo Group. Parent hereby waives compliance by each and every member of the SpinCo Group with the requirements and provisions of any “bulk-sale” or “bulk-transfer” Laws of any jurisdiction that may otherwise be applicable with respect to the transfer or sale of any or all of the Parent Assets to any member of the Parent Group.

(e)          Certain Matters Governed Exclusively by Employee Matters Agreement. The Employee Matters Agreement shall exclusively govern the allocation of Assets and Liabilities related to employee and employee benefits-related matters with respect to employees and former employees of members of both the Parent Group and the SpinCo Group including pension assets and liabilities (it being understood that any such Assets and Liabilities, as allocated pursuant to the Employee Matters Agreement, shall constitute Parent Assets, Parent Liabilities, SpinCo Assets or SpinCo Liabilities, as applicable, hereunder and shall be subject to Article IV hereof).

(f)          Certain Matters Governed Exclusively by Intellectual Property Agreement. The Intellectual Property Agreement shall exclusively govern the allocation of Assets and Liabilities and licenses and other matters related to Intellectual Property (as defined therein) of both the Parent Group and the SpinCo Group (it being understood that any such Assets and Liabilities, as allocated pursuant to the Intellectual Property Agreement, shall constitute Parent Assets, Parent Liabilities, SpinCo Assets or SpinCo Liabilities, as applicable, hereunder and shall be subject to Article IV hereof). In the case of any conflict between this Agreement and the Intellectual Property Agreement in relation to any matters addressed in the Intellectual Property Agreement, the Intellectual Property Agreement shall prevail.

2.2          SpinCo Assets; Parent Assets.

(a)          SpinCo Assets. For purposes of this Agreement, “SpinCo Assets” shall mean:

(i)          all issued and outstanding capital stock or other equity interests of the Transferred Entities that are owned by either Party or any members of its Group as of the Effective Time;

(ii)         all inventories, including products, goods, materials, parts, raw materials, work-in-process and supplies, exclusively related to or exclusively used in the SpinCo Business;

(iii)        all Assets of either Party or any of the members of its Group as of the Effective Time that are expressly provided by this Agreement or any Ancillary Agreement as Assets to be transferred to, or acknowledged as owned by, SpinCo or any other member of the SpinCo Group;

(iv)        all SpinCo Contracts as of the Effective Time and all rights, interests or claims of either Party or any of the members of its Group thereunder as of the Effective Time;

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(v)         all Real Property Interests in the facilities that are: (i) exclusively used or held for exclusive use in the SpinCo Business, including those listed or described on Section A of Schedule 2.2(a)(v): (ii) the Carbon Plant Real Property and any rights set forth in the Covington Lease as “Lessee’s Interests” or (iii) identified on Section B of Schedule 2.2(a)(v);

(vi)        to the extent not provided above in this Section 2.2(a), all fixtures, machinery, equipment, apparatuses, computer hardware and other electronic data processing and communications equipment, tools, instruments, furniture, office equipment, automobiles, trucks and other transportation equipment, special and general tools and other tangible personal property exclusively used in or held for exclusive use in the SpinCo Business, except as otherwise expressly provided in this Agreement or in the Transition Services Agreement;

(vii)       all deposits, prepaid expenses, letters of credit and performance and surety bonds relating exclusively to, used exclusively in, or arising exclusively from, the SpinCo Business;

(viii)      all SpinCo Permits as of the Effective Time and all rights, interests or claims of either Party or any of the members of its Group thereunder as of the Effective Time;

(ix)         all rights related to the SpinCo Portion of any Shared Contract;

(x)          all other Assets of either Party or any of the members of its Group as of the Effective Time that are exclusively related to the SpinCo Business;

(xi)         all rights, interests and claims of either Party or any of the members of its Group as of the Effective Time with respect to Information that is exclusively related to the SpinCo Assets, the SpinCo Liabilities, the SpinCo Business or the Transferred Entities; provided, however, that, subject to Section 6.1, SpinCo Assets shall not include such Information, in tangible form, that cannot, through commercially reasonable efforts on behalf of Parent or the relevant member of the Parent Group, be separated from Information that is exclusively related to the Parent Assets, the Parent Liabilities, or the Parent Business (such Information, the “SpinCo Excluded Information”);

(xii)        subject to the provisions of the applicable Ancillary Agreements, a non-exclusive right to access and use all Information that is related to, but not exclusively related to, the SpinCo Assets, the SpinCo Liabilities, the SpinCo Business or the Transferred Entities (such Information, the “Partial SpinCo Excluded Information” and, together with the SpinCo Excluded Information, the “Excluded Information”); and

(xiii)       any and all Assets set forth on Schedule 2.2(a)(xiii).

Notwithstanding the foregoing, the SpinCo Assets shall not in any event include any Asset referred to in clauses (i) through (vii) of Section 2.2(b).

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(b)          Parent Assets. For the purposes of this Agreement, “Parent Assets” shall mean all Assets of either Party or the members of its Group as of the Effective Time, other than the SpinCo Assets, it being understood that, without limiting the foregoing, the Parent Assets shall include:

(i)          all Assets that are expressly contemplated by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Assets to be retained by Parent or any other member of the Parent Group;

(ii)         all Contracts of either Party or any of the members of its Group as of the Effective Time (other than the SpinCo Contracts);

(iii)        all assets to the extent expressly set forth in the Employee Matters Agreement;

(iv)        all Permits of either Party or any of the members of its Group as of the Effective Time (other than the SpinCo Permits);

(v)         all rights, interests and claims of either Party or any of the members of its Group as of the Effective Time with respect to Information that is exclusively related to the Parent Assets, the Parent Liabilities or the Parent Business;

(vi)        subject to Sections 2.2(a)(xii) and 6.1, all Excluded Information; and

(vii)       any and all Assets set forth on Schedule 2.2(b)(vii).

2.3          SpinCo Liabilities; Parent Liabilities.

(a)          SpinCo Liabilities. For the purposes of this Agreement, “SpinCo Liabilities” shall mean the following Liabilities of either Party or any of the members of its Group for the following Liabilities (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time):

(i)          all Liabilities, excluding any SpinCo Environmental Liabilities, in each case to the extent that such Liabilities relate to, arise out of or result from the SpinCo Business or a SpinCo Asset;

(ii)         Any and all Environmental Liabilities arising from or relating in any way to an existing or former SpinCo Business or SpinCo Asset (including the Carbon Plant Real Property), including, Liabilities arising from or related to any: (a) SpinCo Environmental Condition, (b) transportation, treatment, storage, recycling or disposal (whether on-site or off-site) of any waste or any Hazardous Material, (c) any Release or threatened Release of Hazardous Materials, (d) contamination (whether on-site or off-site) of the environment, (e) violation or alleged violation of any Permits or Laws,

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including Environmental Laws, (f) a SpinCo Contract, (g) any environmental matter set forth on Schedule 2.3(a), or (h) an Action arising under Environmental Laws; (such Environmental Liabilities contemplated by this clause (ii) shall be referred to as “SpinCo Environmental Liabilities”);

(iii)        any and all Liabilities that are expressly provided by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to be assumed by SpinCo or any other member of the SpinCo Group, and all agreements, obligations and Liabilities of any member of the SpinCo Group under this Agreement or any of the Ancillary Agreements;

(iv)        all Liabilities relating to, arising out of or resulting from the SpinCo Assets, SpinCo Contracts, the SpinCo Permits or SpinCo Financing Arrangements;

(v)         any and all Liabilities set forth on Schedule 2.3(a);

(vi)        the obligations related to the SpinCo Portion of any Shared Contract;

(vii)       all Liabilities relating to, arising out of or resulting from the SpinCo Business or the SpinCo Assets or the other business, operations, activities or Liabilities referred to in clauses (i) through (vi) above;

provided that, notwithstanding the foregoing, the Parties agree that the Liabilities set forth on Schedule 2.3(b) and any Liabilities of any member of the Parent Group specifically set forth in the Ancillary Agreements and not directly in conflict with the terms of this Agreement shall not be SpinCo Liabilities but instead shall be Parent Liabilities.

(b)          Parent Liabilities. For the purposes of this Agreement, “Parent Liabilities” shall mean the following Liabilities of either Party or any of the members of its Group (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), but in all cases excluding any SpinCo Liabilities:

(i)          all Liabilities, excluding any Parent Environmental Liabilities and excluding any SpinCo Liabilities, to the extent they relate to the Parent Business or the Parent Assets including any and all Liabilities set forth on Schedule 2.3(b) and the Parent Business Discontinued Operations;

(ii)         any and all Environmental Liabilities arising from or relating in any way to an existing or former Parent Business or Parent Asset, excluding the Carbon Plant Real Property and excluding any SpinCo Environmental Liability or SpinCo Assets but including Liabilities arising from or related to any: (a) Parent Environmental Condition, (b) transportation, treatment, storage, recycling or disposal (whether on-site or off-site) of any waste or any Hazardous Material, (c) any Release or threatened Release of Hazardous Materials, (d) contamination (whether on-site or off-site) of the environment, (e) violation or alleged violation of any Permits or Laws, including Environmental Laws,

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(f) a Parent Contract, (g) any environmental matter set forth on Schedule 2.3(b), or (h) an Action arising under Environmental Laws; such Environmental Liabilities contemplated by this clause (ii) shall be referred to as “Parent Environmental Liabilities”);

(iii)        any and all Liabilities that are expressly provided by this Agreement or any Ancillary Agreement (or the Schedules hereto or thereto) as Liabilities to be assumed by Parent or any other member of the Parent Group, and all agreements, obligations and Liabilities of any member of the Parent Group under this Agreement or any of the Ancillary Agreements;

(iv)        all Liabilities relating to, arising out of or resulting from the Parent Assets, Parent Contracts, or the Parent Permits.

(v)         the obligations related to the Parent Portion of any Shared Contract;

(vi)        all Liabilities arising out of claims made by any Third Party (including Parent’s or SpinCo’s respective directors, officers, shareholders, employees and agents) against any member of the Parent Group or the SpinCo Group to the extent relating to, arising out of or resulting from the Parent Business or the Parent Assets.

For the avoidance of doubt and without limiting the foregoing, the Parties agree that neither Parent nor any member of the Parent Group shall have any obligation or responsibility of any kind or nature for Environmental Liabilities arising from or relating to the existing or former SpinCo Business or SpinCo Assets.

2.4          Approvals and Notifications.

(a)          Approvals and Notifications for SpinCo Assets. To the extent that the transfer or assignment of any SpinCo Asset, the assumption of any SpinCo Liability, the Separation, or the Distribution requires any Approvals or Notifications, the Parties shall use their commercially reasonable efforts to obtain or make such Approvals or Notifications as soon as reasonably practicable; provided, however, that, except to the extent expressly provided in this Agreement or any of the Ancillary Agreements or as otherwise agreed in writing between Parent and SpinCo, neither Parent nor SpinCo shall be obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Person in order to obtain or make such Approvals or Notifications.

(b)          Delayed SpinCo Transfers. If and to the extent that the valid, complete and perfected transfer or assignment to the SpinCo Group of any SpinCo Asset or assumption by the SpinCo Group of any SpinCo Liability would be a violation of applicable Law or require any Approvals or Notifications in connection with the Separation or the Distribution that has not been obtained or made by the Effective Time then, unless the Parties shall otherwise mutually agree in writing, the transfer or assignment to the SpinCo Group of such SpinCo Assets or the assumption by the SpinCo Group of such SpinCo Liabilities, as the case may be, shall be automatically deemed deferred and any such purported transfer, assignment or assumption shall be null and void until such time as all legal impediments are removed or such Approvals or

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Notifications have been obtained or made. Notwithstanding the foregoing, any such SpinCo Assets or SpinCo Liabilities shall continue to constitute SpinCo Assets and SpinCo Liabilities for all other purposes of this Agreement.

(c)          Treatment of Delayed SpinCo Assets and Delayed SpinCo Liabilities. If any transfer or assignment of any SpinCo Asset (or a portion thereof) or any assumption of any SpinCo Liability (or a portion thereof) intended to be transferred, assigned or assumed hereunder, as the case may be, is not consummated on or prior to the Effective Time, whether as a result of the provisions of Section 2.4(b) or for any other reason (any such SpinCo Asset (or a portion thereof), a “Delayed SpinCo Asset” and any such SpinCo Liability (or a portion thereof), a “Delayed SpinCo Liability”), then, insofar as reasonably possible and subject to applicable Law, the member of the Parent Group retaining such Delayed SpinCo Asset or such Delayed SpinCo Liability, as the case may be, shall thereafter hold such Delayed SpinCo Asset or Delayed SpinCo Liability, as the case may be, for the use and benefit of the member of the SpinCo Group entitled thereto (at the expense of the member of the SpinCo Group entitled thereto). In addition, the member of the Parent Group retaining such Delayed SpinCo Asset or such Delayed SpinCo Liability shall, insofar as reasonably possible and to the extent permitted by applicable Law, treat such Delayed SpinCo Asset or Delayed SpinCo Liability in the ordinary course of business in accordance with past practice and take such other actions as may be reasonably requested by the member of the SpinCo Group to whom such Delayed SpinCo Asset is to be transferred or assigned, or which will assume such Delayed SpinCo Liability, as the case may be, in order to place such member of the SpinCo Group in a substantially similar position as if such Delayed SpinCo Asset or Delayed SpinCo Liability had been transferred, assigned or assumed as contemplated hereby and so that all the benefits and burdens relating to such Delayed SpinCo Asset or Delayed SpinCo Liability, as the case may be, including use, risk of loss, potential for gain, and dominion, control and command over such Delayed SpinCo Asset or Delayed SpinCo Liability, as the case may be, and all costs and expenses related thereto, shall inure from and after the Effective Time to the SpinCo Group.

(d)          Transfer of Delayed SpinCo Assets and Delayed SpinCo Liabilities. If and when the Approvals or Notifications, the absence of which caused the deferral of transfer or assignment of any Delayed SpinCo Asset or the deferral of assumption of any Delayed SpinCo Liability pursuant to Section 2.4(b), are obtained or made, and, if and when any other legal impediments for the transfer or assignment of any Delayed SpinCo Asset or the assumption of any Delayed SpinCo Liability have been removed, the transfer or assignment of the applicable Delayed SpinCo Asset or the assumption of the applicable Delayed SpinCo Liability, as the case may be, shall be effected in accordance with the terms of this Agreement and/or the applicable Ancillary Agreement.

(e)          Costs for Delayed SpinCo Assets and Delayed SpinCo Liabilities. Any member of the Parent Group retaining a Delayed SpinCo Asset or a Delayed SpinCo Liability due to the deferral of the transfer or assignment of such Delayed SpinCo Asset or the deferral of the assumption of such Delayed SpinCo Liability, as the case may be, shall not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced (or otherwise made available) by SpinCo or the member of the SpinCo Group entitled to the Delayed SpinCo Asset or Delayed SpinCo Liability, other than reasonable out-of-pocket expenses, attorneys’ fees and recording or similar fees, all of which shall be promptly reimbursed

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by SpinCo or the member of the SpinCo Group entitled to such Delayed SpinCo Asset or Delayed SpinCo Liability.

(f)           Approvals and Notifications for Parent Assets. To the extent that the transfer or assignment of any Parent Asset (or a portion thereof) or the assumption of any Parent Liability (or a portion thereof) requires any Approvals or Notifications, the Parties shall use their commercially reasonable efforts to obtain or make such Approvals or Notifications as soon as reasonably practicable; provided, however, that, except to the extent expressly provided in this Agreement or any of the Ancillary Agreements or as otherwise agreed in writing between Parent and SpinCo, neither Parent nor SpinCo shall be obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Person in order to obtain or make such Approvals or Notifications.

(g)          Delayed Parent Transfers. If and to the extent that the valid, complete and perfected transfer or assignment to the Parent Group of any Parent Asset or assumption by the Parent Group of any Parent Liability would be a violation of applicable Law or require any Approval or Notification that has not been obtained or made by the Effective Time then, unless the Parties shall otherwise mutually agree in writing, the transfer or assignment to the Parent Group of such Parent Assets or the assumption by the Parent Group of such Parent Liabilities, as the case may be, shall be automatically deemed deferred and any such purported transfer, assignment or assumption shall be null and void until such time as all legal impediments are removed or such Approval or Notification has been obtained or made. Notwithstanding the foregoing, any such Parent Assets or Parent Liabilities shall continue to constitute Parent Assets and Parent Liabilities for all other purposes of this Agreement.

(h)          Treatment of Delayed Parent Assets and Delayed Parent Liabilities. If any transfer or assignment of any Parent Asset (or a portion thereof) or any assumption of any Parent Liability (or a portion thereof) intended to be transferred, assigned or assumed hereunder, as the case may be, is not consummated on or prior to the Effective Time whether as a result of the provisions of this Section 2.4(h) or for any other reason (any such Parent Asset, a “Delayed Parent Asset” and any such Parent Liability, a “Delayed Parent Liability”), then, insofar as reasonably possible, the member of the SpinCo Group retaining such Delayed Parent Asset or such Delayed Parent Liability, as the case may be, shall thereafter hold such Delayed Parent Asset or Delayed Parent Liability, as the case may be, for the use and benefit of the member of the Parent Group entitled thereto (at the expense of the member of the Parent Group entitled thereto). In addition, the member of the SpinCo Group retaining such Delayed Parent Asset or such Delayed Parent Liability shall, insofar as reasonably possible and to the extent permitted by applicable Law, treat such Delayed Parent Asset or Delayed Parent Liability in the ordinary course of business in accordance with past practice. Such member of the SpinCo Group shall also take such other actions as may be reasonably requested by the member of the Parent Group to which such Delayed Parent Asset is to be transferred or assigned, or which will assume such Delayed Parent Liability, as the case may be, in order to place such member of the Parent Group in a substantially similar position as if such Delayed Parent Asset or Delayed Parent Liability had been transferred, assigned or assumed and so that all the benefits and burdens relating to such Delayed Parent Asset or Delayed Parent Liability, and all costs and expenses related thereto, shall inure from and after the Effective Time to the Parent Group.

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(i)           Transfer of Delayed Parent Assets and Delayed Parent Liabilities. If and when the Approvals or Notifications, the absence of which caused the deferral of transfer or assignment of any Delayed Parent Asset or the deferral of the assumption of any Delayed Parent Liability, are obtained or made, and, if and when any other legal impediments for the transfer or assignment of any Delayed Parent Asset or the assumption of any Delayed Parent Liability have been removed, the transfer or assignment of the applicable Delayed Parent Asset or the assumption of the applicable Delayed Parent Liability, as the case may be, shall be effected in accordance with the terms of this Agreement and/or the applicable Ancillary Agreement.

(j)           Costs for Delayed Parent Assets and Delayed Parent Liabilities. Any member of the SpinCo Group retaining a Delayed Parent Asset or a Delayed Parent Liability due to the deferral of the transfer or assignment of such Delayed Parent Asset or the deferral of the assumption of such Delayed Parent Liability, as the case may be, shall not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced (or otherwise made available) by Parent or the member of the Parent Group entitled to the Delayed Parent Asset or Delayed Parent Liability, other than reasonable out-of-pocket expenses, attorneys’ fees and recording or similar fees, all of which shall be promptly reimbursed by Parent or the member of the Parent Group entitled to such Delayed Parent Asset or Delayed Parent Liability.

2.5          Novation of Liabilities.

(a)          Novation of SpinCo Liabilities.

(i)          Except as set forth in Schedule 2.5(a), each of Parent and SpinCo, at the request of the other, shall use its commercially reasonable efforts to obtain, or to cause to be obtained, as soon as reasonably practicable, any consent, substitution, approval or amendment required to novate or assign all SpinCo Liabilities and obtain in writing the unconditional release of each member of the Parent Group that is a party to any such arrangements, so that, in any such case, the members of the SpinCo Group shall be solely responsible for such SpinCo Liabilities; provided, however, that, except as otherwise expressly provided in this Agreement or any of the Ancillary Agreements, neither Parent nor SpinCo shall be obligated to contribute any capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any third Person from whom any such consent, substitution, approval, amendment or release is requested.

(ii)         If Parent or SpinCo is unable to obtain, or to cause to be obtained, any such required consent, substitution, approval, amendment or release as set forth in Section 2.5(a)(i) and the applicable member of the Parent Group continues to be bound by such agreement, lease, license or other obligation or Liability (each, an “Unreleased SpinCo Liability”), SpinCo shall, to the extent not prohibited by Law, as indemnitor, guarantor, agent or subcontractor for such member of the Parent Group, as the case may be, (i) pay, perform and discharge fully all the obligations or other Liabilities of such member of the Parent Group that constitute Unreleased SpinCo Liabilities from and after the Effective Time and (ii) use its commercially reasonable efforts to effect such payment, performance

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or discharge prior to any demand for such payment, performance or discharge is permitted to be made by the obligee thereunder on any member of the Parent Group. If and when any such consent, substitution, approval, amendment or release shall be obtained or the Unreleased SpinCo Liabilities shall otherwise become assignable or able to be novated, Parent shall promptly assign, or cause to be assigned, and SpinCo or the applicable SpinCo Group member shall assume, such Unreleased SpinCo Liabilities without exchange of further consideration.

(b)          Novation of Parent Liabilities.

(i)          Each of Parent and SpinCo, at the request of the other, shall use its commercially reasonable efforts to obtain, or to cause to be obtained, as soon as reasonably practicable, any consent, substitution, approval or amendment required to novate or assign all Parent Liabilities and obtain in writing the unconditional release of each member of the SpinCo Group that is a party to any such arrangements, so that, in any such case, the members of the Parent Group shall be solely responsible for such Parent Liabilities; provided, however, that, except as otherwise expressly provided in this Agreement or any of the Ancillary Agreements, neither Parent nor SpinCo shall be obligated to contribute any capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any third Person from whom any such consent, substitution, approval, amendment or release is requested.

(ii)         If Parent or SpinCo is unable to obtain, or to cause to be obtained, any such required consent, substitution, approval, amendment or release as set forth in Section 2.5(b)(i) and the applicable member of the SpinCo Group continues to be bound by such agreement, lease, license or other obligation or Liability (each, an “Unreleased Parent Liability”), Parent shall, to the extent not prohibited by Law, as indemnitor, guarantor, agent or subcontractor for such member of the SpinCo Group, as the case may be, (i) pay, perform and discharge fully all the obligations or other Liabilities of such member of the SpinCo Group that constitute Unreleased Parent Liabilities from and after the Effective Time and (ii) use its commercially reasonable efforts to effect such payment, performance or discharge prior to any demand for such payment, performance or discharge is permitted to be made by the obligee thereunder on any member of the SpinCo Group. If and when any such consent, substitution, approval, amendment or release shall be obtained or the Unreleased Parent Liabilities shall otherwise become assignable or able to be novated, SpinCo shall promptly assign, or cause to be assigned, and Parent or the applicable Parent Group member shall assume, such Unreleased Parent Liabilities without exchange of further consideration.

2.6          Release of Guarantees.   In furtherance of, and not in limitation of, the obligations set forth in Section 2.5:

(a)          On or prior to the Effective Time or as soon as practicable thereafter, each of Parent and SpinCo shall, at the request of the other Party and with the reasonable cooperation of such other Party and the applicable member(s) of such Party’s Group, use commercially reasonable efforts to (i) have any member(s) of the Parent Group removed as guarantor of or obligor for any SpinCo Liability and to complete the removal of any Security Interest on or in

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respect of any Parent Asset that may serve as collateral or security for any such SpinCo Liability; and (ii) have any member(s) of the SpinCo Group removed as guarantor of or obligor for any Parent Liability and to complete the removal of any Security Interest on or in respect of any SpinCo Asset that may serve as collateral or security for any such Parent Liability.

(b)          To the extent required to obtain a release from a guarantee of:

(i)          any member of the Parent Group, SpinCo shall execute a guarantee agreement in the form of the existing guarantee or such other form as is agreed to in writing by the relevant parties to such guarantee agreement, which agreement shall include the removal of any Security Interest on or in any Parent Asset that may serve as collateral or security for any such Parent Liability, except to the extent that such existing guarantee contains representations, covenants or other terms or provisions either (A) with which SpinCo would, after using its commercially reasonable efforts, be unable to comply or (B) which SpinCo would not, after using its commercially reasonable efforts, be able to avoid breaching; and

(ii)         any member of the SpinCo Group, Parent shall execute a guarantee agreement in the form of the existing guarantee or such other form as is agreed to in writing by the relevant parties to such guarantee agreement, which agreement shall include the removal of any Security Interest on or in any SpinCo Asset that may serve as collateral or security for any such SpinCo Liability, except to the extent that such existing guarantee contains representations, covenants or other terms or provisions either (A) with which Parent would, after using its commercially reasonable efforts, be unable to comply or (B) which Parent would not, after using its commercially reasonable efforts, be able to avoid breaching.

(c)          If Parent or SpinCo is unable to obtain, or to cause to be obtained, any such required removal or release as set forth in clauses (a) and (b) of this Section 2.6, (i) the Party or the relevant member of its Group that has assumed the Liability with respect to such guarantee shall indemnify, defend and hold harmless the guarantor or obligor for, against and from any Liability arising therefrom or relating thereto in accordance with the provisions of Article IV and shall, as agent or subcontractor for such guarantor or obligor, pay, perform and discharge fully all the obligations or other Liabilities of such guarantor or obligor thereunder; and (ii) each of Parent and SpinCo, on behalf of itself and the other members of their respective Groups, agrees not to renew or extend the term of, increase any obligations under, or transfer to a Third Party, any loan, guarantee, lease, contract or other obligation for which the other Party or a member of its Group is or may be liable unless all obligations of such other Party and the members of such other Party’s Group with respect thereto are thereupon terminated by documentation satisfactory in form and substance to such other Party.

2.7          Termination of Agreements.

(a)          Except as set forth in Section 2.7(b) and Section 2.9 in furtherance of the releases and other provisions of Section 4.1, SpinCo and each member of the SpinCo Group, on the one hand, and Parent and each member of the Parent Group, on the other hand, hereby terminate any and all agreements, arrangements, commitments or understandings, whether or not

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in writing, between or among SpinCo and/or any member of the SpinCo Group, on the one hand, and Parent and/or any member of the Parent Group, on the other hand, effective as of the Effective Time. No such terminated agreement, arrangement, commitment or understanding (including any provision thereof which purports to survive termination) shall be of any further force or effect after the Effective Time. Each Party shall, at the reasonable request of the other Party, take, or cause to be taken, such other actions as may be necessary to effect the foregoing.

(b)          The provisions of Section 2.7(a) shall not apply to any of the following agreements, arrangements, commitments or understandings (or to any of the provisions thereof): (i) this Agreement and the Ancillary Agreements and the Plan of Reorganization (and each other agreement or instrument expressly contemplated by this Agreement or any Ancillary Agreement to be entered into by any of the Parties or any of the members of their respective Groups or to be continued from and after the Effective Time); (ii) any agreements, arrangements, commitments or understandings listed or described on Schedule 2.7(b)(ii); (iii) any agreements, arrangements, commitments or understandings to which any Third Party is a party thereto; (iv) any intercompany accounts payable or accounts receivable accrued as of the Effective Time that are reflected in the books and records of the Parties or otherwise documented in writing in accordance with past practices, which shall be settled in the manner contemplated by Section 2.7(c); (v) any agreements, arrangements, commitments or understandings to which any non-wholly owned Subsidiary of Parent or SpinCo, as the case may be, is a party (it being understood that directors’ qualifying shares or similar interests will be disregarded for purposes of determining whether a Subsidiary is wholly owned); and (vi) any Shared Contracts.

(c)          All of the intercompany accounts receivable and accounts payable between any member of the Parent Group, on the one hand, and any member of the SpinCo Group, on the other hand, outstanding as of the Effective Time shall, as promptly as practicable after the Effective Time (and in any event within 90 days after the end of the month immediately following the Effective Time or such longer time as Parent may determine), be repaid, settled or otherwise eliminated by means of cash payments, a dividend, distribution, capital contribution, a combination of the foregoing, or otherwise as determined by Parent in its sole and absolute discretion.

2.8          Treatment of Shared Contracts.

(a)           The Parties shall, and shall cause the members of their respective Groups to, use their respective commercially reasonable efforts to work together (and, if necessary and desirable, to work with the third party to any Shared Contract) in an effort to divide, partially assign, modify and/or replicate (in whole or in part) the respective rights and obligations under and in respect of any Shared Contract, such that (i) a member of the Parent Group is the beneficiary of the rights and is responsible for the obligations related to that portion of such Shared Contract relating to the Parent Business (the “Parent Portion”), which rights shall be a Parent Asset and which obligations shall be a Parent Liability and (ii) a member of the SpinCo Group is the beneficiary of the rights and is responsible for the obligations related to such Shared Contract relating to the SpinCo Business (the “SpinCo Portion”), which rights shall be a SpinCo Asset and which obligations shall be a SpinCo Liability. If the Parties, or their respective Group members, as applicable, are not able to enter into an arrangement to formally divide, partially assign, modify and/or replicate such Shared Contract prior to the Effective Time as contemplated

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by the immediately preceding sentence, then the Parties shall, and shall cause their respective Group members to, use their commercially reasonable efforts to cooperate in any lawful arrangement to provide that, following the Effective Time and until the earlier of two (2) years after the Effective Time and such date as the formal division, partial assignment, modification and/or replication of such Shared Contract as contemplated by the immediately preceding sentence is effected, a member of the Parent Group shall receive the interest in the benefits and obligations of the Parent Portion under such Shared Contract and a member of the SpinCo Group shall receive the interest in the benefits and obligations of the SpinCo Portion under such Shared Contract.

(b)          Each of Parent and SpinCo shall, and shall cause the members of its Group to, (i) treat for all Tax purposes the portion of each Shared Contract inuring to its respective businesses as Assets owned by, and/or Liabilities of, as applicable, such Party, or the members of its Group, as applicable, not later than the Effective Time, and (ii) neither report nor take any Tax position (on a Tax Return or otherwise) inconsistent with such treatment (unless required by applicable Law).

(c)          Nothing in this Section 2.8 shall require any member of any Group to make any non-de minimis payment (except to the extent advanced, assumed or agreed in writing in advance to be reimbursed by any member of the other Group), incur any non-de minimis obligation or grant any non-de minimis concession for the benefit of any member of any other Group in order to effect any transaction contemplated by this Section 2.8.

2.9          Bank Accounts; Cash Balances.

(a)          Each Party agrees to take, or cause the members of its Group to take, at the Effective Time (or such earlier time as the Parties may agree in writing), all actions necessary to amend all contracts or agreements governing each bank and brokerage account owned by SpinCo or any other member of the SpinCo Group (collectively, the “SpinCo Accounts”) and all contracts or agreements governing each bank or brokerage account owned by Parent or any other member of the Parent Group (collectively, the “Parent Accounts”) so that each such SpinCo Account and Parent Account, if currently linked (whether by automatic withdrawal, automatic deposit or any other authorization to transfer funds from or to, hereinafter “Linked”) to any Parent Account or SpinCo Account, respectively, is de-Linked from such Parent Account or SpinCo Account, respectively.

(b)          It is intended that, following consummation of the actions contemplated by Section 2.9(a), after the Effective Time, there will be in place a cash management process pursuant to which the SpinCo Accounts will be managed and funds collected will be transferred into one (1) or more accounts maintained by SpinCo or a member of the SpinCo Group.

(c)          It is intended that, following consummation of the actions contemplated by Section 2.9(a), after the Effective Time, there will continue to be in place a cash management process pursuant to which the Parent Accounts will be managed and funds collected will be transferred into one (1) or more accounts maintained by Parent or a member of the Parent Group.

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(d)          With respect to any outstanding checks issued or payments initiated by Parent, SpinCo, or any of the members of their respective Groups prior to the Effective Time, such outstanding checks and payments shall be honored following the Effective Time by the Person or Group owning the account on which the check is drawn or from which the payment was initiated, respectively.

(e)          As between Parent and SpinCo (and the members of their respective Groups), all payments made and reimbursements received after the Effective Time by either Party (or member of its Group) that relate to a business, Asset or Liability of the other Party (or member of its Group), shall be held by such Party in trust for the use and benefit of the Party entitled thereto and, promptly following receipt by such Party of any such payment or reimbursement, such Party shall pay over, or shall cause the applicable member of its Group to pay over to the other Party the amount of such payment or reimbursement without right of set-off.

2.10        Ancillary Agreements.   Effective on or prior to the Effective Time, each of Parent and SpinCo shall, or shall cause the applicable members of their respective Groups to, execute and deliver all Ancillary Agreements to which it is a party. To the extent that any provision of an Ancillary Agreement expressly conflicts with any provision of this Agreement, such Ancillary Agreement shall govern and control with respect to the subject matter thereof.

2.11        Representations and Warranties.

(a)          SpinCo represents and warrants that this Agreement, including the Schedules, is a true and accurate description of all material known SpinCo Environmental Liabilities SpinCo Environmental Conditions.

(b)          EACH OF PARENT (ON BEHALF OF ITSELF AND EACH MEMBER OF THE PARENT GROUP) AND SPINCO (ON BEHALF OF ITSELF AND EACH MEMBER OF THE SPINCO GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, NO PARTY TO THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR ANY OTHER AGREEMENT OR DOCUMENT CONTEMPLATED BY THIS AGREEMENT, ANY ANCILLARY AGREEMENT OR OTHERWISE, IS REPRESENTING OR WARRANTING IN ANY WAY AS TO THE ASSETS, BUSINESSES OR LIABILITIES TRANSFERRED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS OR APPROVALS REQUIRED IN CONNECTION THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SETOFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY CLAIM OR OTHER ASSET, INCLUDING ANY ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY ASSIGNMENT, DOCUMENT OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN OR IN ANY ANCILLARY AGREEMENT, ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN “AS IS,” “WHERE IS” BASIS (AND, IN THE CASE OF

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ANY REAL PROPERTY, BY MEANS OF A QUITCLAIM OR SIMILAR FORM OF DEED OR CONVEYANCE) AND THE RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE WILL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD AND MARKETABLE TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST, AND (II) ANY NECESSARY APPROVALS OR NOTIFICATIONS ARE NOT OBTAINED OR MADE OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT COMPLIED WITH.

2.12        SpinCo Financing Arrangements; Cash Transfers.

(a)          Pursuant to the Plan of Reorganization, (i) SpinCo has entered into a credit agreement pursuant to which it shall borrow [five (5) days] prior to the Effective Time a principal amount of $ [●], million (the “SpinCo Financing Arrangements”) and (ii) SpinCo shall, without any set off of or in respect of amounts required to be transferred between the Parties pursuant to Sections 2.9(b) or Section 2.9(c), transfer to Parent the $[●] million proceeds from the SpinCo Financing Arrangement and other cash available as consideration for the transfer of SpinCo Assets to SpinCo in the Contribution pursuant to Section 2.1 (the “Cash Transfer”). Parent and SpinCo agree to take all necessary actions to assure the full release and discharge of Parent and the other members of the Parent Group from all obligations pursuant to the SpinCo Financing Arrangements as of no later than the Effective Time. The Parties agree that SpinCo or another member of the SpinCo Group, as the case may be, and not Parent or any member of the Parent Group, are and shall be responsible for all costs and expenses incurred in connection with the SpinCo Financing Arrangements.

(b)          Prior to the Effective Time, Parent and SpinCo shall cooperate in the preparation of all materials as may be necessary or advisable to execute the SpinCo Financing Arrangements.

2.13        Financial Information Certifications.   In order to enable the principal executive officer and principal financial officer of SpinCo to make the certifications required of them under Section 302 of the Sarbanes-Oxley Act of 2002, Parent, as soon as reasonably practicable following the Distribution Date and in any event prior to such time as SpinCo is required to file each quarterly report on Form 10-Q or annual report on Form 10-K in respect of any period beginning prior to and ending after the Effective Time, shall offer reasonable assistance and access in respect of an audit of SpinCo’s internal contracts, with such obligation terminating after the completion of the first audit following the Effective Time; provided, however, SpinCo shall reimburse Parent for all out of pocket costs associated with such assistance and access, and Parent shall not be required to undertake any activities which unduly disrupt Parent’s operations or financial controls.

2.14        Transition Representatives.   Prior to the Effective Time, the Parties shall each appoint a representative (the “Transition Representatives”). The Transition Representatives shall endeavor to monitor and manage their Parties’ matters related to any of the transactions contemplated by this Agreement or any Ancillary Agreements. Parent’s Transition Representative shall be the Chief Financial Officer or such other individual designated from time to time by Parent. SpinCo’s Transition Representative shall be John Fortson or such other individual designated from time to time by SpinCo.

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2.15        Awards from Litigation, Tribunals and Settlements.   The Parties shall address awards from litigation, tribunals and settlements in accordance with Schedule 2.15.

Article III

THE DISTRIBUTION

3.1          Sole and Absolute Discretion; Cooperation.

(a)          Parent shall, in its sole and absolute discretion, determine the terms of the Distribution, including the form, structure and terms of any transaction(s) and/or offering(s) to effect the Distribution and the timing and conditions to the consummation of the Distribution. In addition, Parent may, at any time and from time to time until the consummation of the Distribution, modify or change the terms of the Distribution, including by accelerating or delaying the timing of the consummation of all or part of the Distribution. Nothing shall in any way limit Parent’s right to terminate this Agreement or the Distribution as set forth in Article IX or alter the consequences of any such termination from those specified in Article IX.

(b)          SpinCo shall cooperate with Parent to accomplish the Distribution and shall, at Parent’s direction, promptly take any and all actions necessary or desirable to effect the Distribution, including in respect of the registration under the Exchange Act of SpinCo Shares on the Form 10. Parent shall select any investment bank or manager in connection with the Distribution, as well as any financial printer, solicitation and/or exchange agent and financial, legal, accounting and other advisors for Parent. SpinCo and Parent, as the case may be, will provide to the Agent any information required in order to complete the Distribution.

3.2          Actions Prior to the Distribution.   Prior to the Effective Time and subject to the terms and conditions set forth herein, the Parties shall take, or cause to be taken, the following actions in connection with the Distribution:

(a)          Notice to the NYSE. Parent shall, to the extent possible, give the NYSE not less than 10 days’ advance notice of the Record Date in compliance with Rule 10b-17 under the Exchange Act.

(b)          SpinCo Certificate of Incorporation and SpinCo Bylaws. On or prior to the Distribution Date, Parent and SpinCo shall take all necessary actions so that, as of the Effective Time, the SpinCo Certificate of Incorporation and the SpinCo Bylaws shall become the certificate of incorporation and bylaws of SpinCo, respectively.

(c)          SpinCo Directors and Officers. On or prior to the Distribution Date, Parent and SpinCo shall take all necessary actions so that as of the Effective Time: (i) the directors and executive officers of SpinCo shall be those set forth in the Information Statement made available to the Record Holders prior to the Distribution Date, unless otherwise agreed in writing by the Parties; (ii) each individual referred to in clause (i) shall have resigned from his or her position, if any, as a member of the Parent Board and/or as an executive officer of Parent; and (iii) SpinCo shall have such other officers as SpinCo shall appoint.

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(d)          NYSE Listing. SpinCo shall prepare and file, and shall use its reasonable best efforts to have approved, an application for the listing of the SpinCo Shares to be distributed in the Distribution on the NYSE, subject to official notice of distribution.

(e)          Securities Law Matters. SpinCo shall file any amendments or supplements to the Form 10 as may be necessary or advisable in order to cause the Form 10 to become and remain effective as required by the SEC or federal, state or other applicable securities Laws. Parent and SpinCo shall cooperate in preparing, filing with the SEC and causing to become effective any registration statements or amendments thereof which are required to reflect the establishment of, or amendments to, any employee compensation or benefit plans, programs or agreements necessary or advisable in connection with the transactions contemplated by this Agreement and the Ancillary Agreements. Parent and SpinCo will prepare, and SpinCo will, to the extent required under applicable Law, file with the SEC any such documentation and any requisite no-action letters which Parent determines are necessary or desirable to effectuate the Distribution, and Parent and SpinCo shall each use its reasonable best efforts to obtain all necessary approvals from the SEC with respect thereto as soon as practicable. Parent and SpinCo shall take all such action as may be necessary or appropriate under the securities or blue sky laws of the United States (and any comparable Laws under any foreign jurisdiction) in connection with the Distribution.

(f)           Availability of Information Statement. Parent shall, as soon as is reasonably practicable after the Form 10 is declared effective under the Exchange Act and the Parent Board has approved the Distribution, cause the Information Statement to be made available to the Record Holders.

(g)          The Distribution Agent. Parent shall enter into a distribution agent agreement with the Agent or otherwise provide instructions to the Agent regarding the Distribution.

(h)          Stock-Based Employee Benefit Plans. Parent and SpinCo shall take all actions as may be necessary to approve the grants of adjusted equity awards by Parent (in respect of Parent shares) and SpinCo (in respect of SpinCo shares) in connection with the Distribution in order to satisfy the requirements of Rule 16b-3 under the Exchange Act.

3.3          Conditions to the Distribution.

(a)          The consummation of the Distribution will be subject to the satisfaction, or waiver by Parent in its sole and absolute discretion, of the following conditions:

(i)          The SEC shall have declared effective the Form 10; no order suspending the effectiveness of the Form 10 shall be in effect; and no proceedings for such purposes shall have been instituted or threatened by the SEC.

(ii)         The Information Statement shall have been made available to Record Holders.

(iii)        the IRS Ruling shall not have been modified or revoked.

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(iv)        Parent shall have received an opinion from its outside counsel to the effect that the Contribution and the Distribution, taken together, shall qualify as a transaction that is described in Sections 355(a) and 368(a)(1)(D) of the Code.

(v)         The transfer of the SpinCo Assets (other than any Delayed SpinCo Asset) and SpinCo Liabilities (other than any Delayed SpinCo Liability) contemplated to be transferred from Parent to SpinCo on or prior to the Distribution Date shall have occurred as contemplated by Section 2.1, and the transfer of the Parent Assets (other than any Delayed Parent Asset) and Parent Liabilities (other than any Delayed Parent Liability) contemplated to be transferred from SpinCo to Parent on or prior to the Distribution Date shall have occurred as contemplated by Section 2.1, in each case pursuant to the Plan of Reorganization.

(vi)        The actions and filings necessary or appropriate under applicable U.S. federal, U.S. state or other securities Laws or blue sky Laws and the rules and regulations thereunder shall have been taken or made, and, where applicable, have become effective or been accepted.

(vii)       Each of the Ancillary Agreements shall have been duly executed and delivered by the applicable parties thereto.

(viii)      No order, injunction or decree issued by any Governmental Authority of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Separation, the Distribution or any of the transactions related thereto shall be in effect.

(ix)         The SpinCo Shares to be distributed to the Parent shareholders in the Distribution shall have been accepted for listing on the NYSE, subject to official notice of distribution.

(x)          Parent shall have received the proceeds from the Cash Transfers and shall be satisfied in its sole and absolute discretion that, as of the Effective Time, it shall have no further Liability whatsoever under the SpinCo Financing Arrangements.

(xi)         An independent appraisal firm acceptable to Parent shall have delivered one or more opinions to the Parent Board confirming the solvency and financial viability of Parent before the consummation of the Distribution and each of Parent and SpinCo after consummation of the Distribution, and such opinions shall be acceptable to Parent in form and substance in Parent’s sole discretion and such opinions shall not have been withdrawn or rescinded.

(xii)        No other events or developments shall exist or shall have occurred that, in the judgment of the Parent Board, in its sole and absolute discretion, makes it inadvisable to effect the Separation, the Distribution or the transactions contemplated by this Agreement or any Ancillary Agreement.

(b)          The foregoing conditions are for the sole benefit of Parent and shall not give rise to or create any duty on the part of Parent or the Parent Board to waive or not waive any

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such condition or in any way limit Parent’s right to terminate this Agreement as set forth in Article IX or alter the consequences of any such termination from those specified in Article IX. Any determination made by the Parent Board prior to the Distribution concerning the satisfaction or waiver of any or all of the conditions set forth in Section 3.3(a) shall be conclusive and binding on the Parties. If Parent waives any material condition, it shall promptly issue a press release disclosing such fact and file a Current Report on Form 8-K with the SEC describing such waiver.

3.4          The Distribution.

(a)          Subject to Section 3.3, on or prior to the Effective Time, SpinCo will deliver to the Agent, for the benefit of the Record Holders, book-entry transfer authorizations for such number of the outstanding SpinCo Shares as is necessary to effect the Distribution, and shall cause the transfer agent for the Parent Shares to instruct the Agent to distribute at the Effective Time the appropriate number of SpinCo Shares to each such holder or designated transferee or transferees of such holder by way of direct registration in book-entry form. SpinCo will not issue paper stock certificates in respect of the SpinCo Shares. The Distribution shall be effective at the Effective Time.

(b)          Subject to Sections 3.3 and 3.4(c), each Record Holder will be entitled to receive in the Distribution a number of whole SpinCo Shares equal to the number of Parent Shares held by such Record Holder on the Record Date multiplied by the Distribution Ratio, rounded down to the nearest whole number.

(c)          No fractional shares will be distributed or credited to book-entry accounts in connection with the Distribution, and any such fractional shares interests to which a Record Holder would otherwise be entitled shall not entitle such Record Holder to vote or to any other rights as a stockholder of SpinCo. In lieu of any such fractional shares, each Record Holder who, but for the provisions of this Section 3.4(c), would be entitled to receive a fractional share interest of a SpinCo Share pursuant to the Distribution, shall be paid cash, without any interest thereon, as hereinafter provided. As soon as practicable after the Effective Time, Parent shall direct the Agent to determine the number of whole and fractional SpinCo Shares allocable to each Record Holder, to aggregate all such fractional shares into whole shares, and to sell the whole shares obtained thereby in the open market at the then-prevailing prices on behalf of each Record Holder who otherwise would be entitled to receive fractional share interests (with the Agent, in its sole and absolute discretion, determining when, how and through which broker-dealer and at what price to make such sales), and to cause to be distributed to each such Record Holder, in lieu of any fractional share, such Record Holder’s or owner’s ratable share of the total proceeds of such sale, after deducting any Taxes required to be withheld and applicable transfer Taxes, and after deducting the costs and expenses of such sale and distribution, including brokers fees and commissions. None of Parent, SpinCo or the Agent will be required to guarantee any minimum sale price for the fractional SpinCo Shares sold in accordance with this Section 3.4(c). Neither Parent nor SpinCo will be required to pay any interest on the proceeds from the sale of fractional shares. Neither the Agent nor the broker-dealers through which the aggregated fractional shares are sold shall be Affiliates of Parent or SpinCo. Solely for purposes of computing fractional share interests pursuant to this Section 3.4(c) and Section 3.4(d), the

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beneficial owner of Parent Shares held of record in the name of a nominee in any nominee account shall be treated as the Record Holder with respect to such shares.

(d)          Any SpinCo Shares or cash in lieu of fractional shares with respect to SpinCo Shares that remain unclaimed by any Record Holder 180 days after the Distribution Date shall be delivered to SpinCo, and SpinCo shall hold such SpinCo Shares for the account of such Record Holder, and the Parties agree that all obligations to provide such SpinCo Shares and cash, if any, in lieu of fractional share interests shall be obligations of SpinCo, subject in each case to applicable escheat or other abandoned property Laws, and Parent shall have no Liability with respect thereto.

(e)          Until the SpinCo Shares are duly transferred in accordance with this Section 3.4 and applicable Law, from and after the Effective Time, SpinCo will regard the Persons entitled to receive such SpinCo Shares as record holders of SpinCo Shares in accordance with the terms of the Distribution without requiring any action on the part of such Persons. SpinCo agrees that, subject to any transfers of such shares, from and after the Effective Time (i) each such holder will be entitled to receive all dividends payable on, and exercise voting rights and all other rights and privileges with respect to, the SpinCo Shares then held by such holder, and (ii) each such holder will be entitled, without any action on the part of such holder, to receive evidence of ownership of the SpinCo Shares then held by such holder.

Article IV

MUTUAL RELEASES; INDEMNIFICATION

4.1          Release of Pre-Distribution Claims.

(a)          SpinCo Release of Parent. Except as provided in Sections 4.1(c) and 4.1(d), effective as of the Effective Time, SpinCo does hereby, for itself and each other member of the SpinCo Group, and their respective successors and assigns, and, to the extent permitted by Law, all Persons who at any time prior to the Effective Time have been shareholders, directors, officers, agents or employees of any member of the SpinCo Group (in each case, in their respective capacities as such), remise, release and forever discharge (i) Parent and the members of the Parent Group, and their respective successors and assigns, and (ii) all Persons who at any time prior to the Effective Time are or have been shareholders, directors, officers, agents or employees of any member of the Parent Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, and (iii) all Persons who at any time prior to the Effective Time are or have been shareholders, directors, officers, agents or employees of a Transferred Entity and who are not, as of immediately following the Effective Time, directors, officers or employees of SpinCo or a member of the SpinCo Group, in each case from: (A) all SpinCo Liabilities, (B) all Liabilities arising from or in connection with the transactions and all other activities to implement the Separation and the Distribution and (C) all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent relating to, arising out of or resulting from the SpinCo Business, the SpinCo Assets or the SpinCo Liabilities.

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(b)          Parent Release of SpinCo. Except as provided in (i) Sections 4.1(c) and 4.1(d), effective as of the Effective Time, Parent does hereby, for itself and each other member of the Parent Group and their respective successors and assigns, and, to the extent permitted by Law, all Persons who at any time prior to the Effective Time have been shareholders, directors, officers, agents or employees of any member of the Parent Group (in each case, in their respective capacities as such), remise, release and forever discharge SpinCo and the members of the SpinCo Group and their respective successors and assigns, from (A) all Parent Liabilities, (B) all Liabilities arising from or in connection with the transactions and all other activities to implement the Separation and the Distribution and (C) all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent relating to, arising out of or resulting from the Parent Business, the Parent Assets or the Parent Liabilities.

(c)          Obligations Not Affected. Nothing contained in Section 4.1(a) or 4.1(b) shall impair any right of any Person to enforce this Agreement, any Ancillary Agreement or any agreements, arrangements, commitments or understandings that are specified in Section 2.7(b) or the applicable Schedules thereto as not to terminate as of the Effective Time, in each case in accordance with its terms. Nothing contained in Section 4.1(a) or 4.1(b) shall release any Person from:

(i)          any Liability provided in or resulting from any agreement among any members of the Parent Group or the SpinCo Group that is specified in Section 2.7(b) or the applicable Schedules thereto as not to terminate as of the Effective Time, or any other Liability specified in Section 2.7(b) as not to terminate as of the Effective Time;

(ii)         any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of any Group under, this Agreement or any Ancillary Agreement;

(iii)        any Liability for the sale, lease, construction or receipt of goods, property or services purchased, obtained or used in the ordinary course of business by a member of one Group from a member of the other Group prior to the Effective Time;

(iv)        any Liability that the Parties may have with respect to indemnification or contribution or other obligation pursuant to this Agreement, any Ancillary Agreement or otherwise for claims brought against the Parties by third Persons, which Liability shall be governed by the provisions of this Article IV and Article V and, if applicable, the appropriate provisions of the Ancillary Agreements; or

(v)         any Liability the release of which would result in the release of any Person other than a Person released pursuant to this Section 4.1.

In addition, nothing contained in Section 4.1(a) shall release any member of the Parent Group from honoring its existing obligations to indemnify any director, officer or employee of SpinCo

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who was a director, officer or employee of any member of the Parent Group on or prior to the Effective Time, to the extent such director, officer or employee becomes a named defendant in any Action with respect to which such director, officer or employee was entitled to such indemnification pursuant to such existing obligations; it being understood that, if the underlying obligation giving rise to such Action is a SpinCo Liability, SpinCo shall indemnify Parent for such Liability (including Parent’s costs to indemnify the director, officer or employee) in accordance with the provisions set forth in this Article IV.

(d)          No Claims. SpinCo shall not make, and shall not permit any member of the SpinCo Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against Parent or any other member of the Parent Group, or any other Person released pursuant to Section 4.1(a), with respect to any Liabilities released pursuant to Section 4.1(a). Parent shall not make, and shall not permit any other member of the Parent Group to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification against SpinCo or any other member of the SpinCo Group, or any other Person released pursuant to Section 4.1(b), with respect to any Liabilities released pursuant to Section 4.1(b).

(e)          Execution of Further Releases. At any time at or after the Effective Time, at the request of either Party, the other Party shall cause each member of its respective Group to execute and deliver releases reflecting the provisions of this Section 4.1.

4.2          Indemnification by SpinCo.   Except as otherwise specifically set forth in this Agreement or in any Ancillary Agreement, to the fullest extent permitted by Law, SpinCo shall, and shall cause the other members of the SpinCo Group to, indemnify, defend and hold harmless Parent, each member of the Parent Group and each of their respective past, present and future directors, officers, employees and agents, in each case in their respective capacities as such, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “Parent Indemnitees”), from and against any and all Liabilities of the Parent Indemnitees relating to, arising out of or resulting from, directly or indirectly, any of the following items (without duplication):

(a)          any SpinCo Liability;

(b)          any failure of SpinCo, any other member of the SpinCo Group or any other Person to pay, perform or otherwise promptly discharge any SpinCo Liabilities in accordance with their terms, whether prior to, on or after the Effective Time;

(c)          any breach by SpinCo or any other member of the SpinCo Group of this Agreement or any of the Ancillary Agreements;

(d)          except to the extent it relates to a Parent Liability, any guarantee, indemnification or contribution obligation, surety bond or other credit support agreement, arrangement, commitment or understanding for the benefit of any member of the SpinCo Group by any member of the Parent Group that survives following the Distribution; and

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(e)          any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to all information contained in the Form 10, the Information Statement (as amended or supplemented if SpinCo shall have furnished any amendments or supplements thereto) or any other Disclosure Document, other than the matters described in clause (e) of Section 4.3.

4.3          Indemnification by Parent.   Except as otherwise specifically set forth in this Agreement or in any Ancillary Agreement, to the fullest extent permitted by Law, Parent shall, and shall cause the other members of the Parent Group to, indemnify, defend and hold harmless SpinCo, each member of the SpinCo Group and each of their respective past, present and future directors, officers, employees or agents, in each case in their respective capacities as such, and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “SpinCo Indemnitees”), from and against any and all Liabilities of the SpinCo Indemnitees relating to, arising out of or resulting from, directly or indirectly, any of the following items (without duplication):

(a)          any Parent Liability;

(b)          any failure of Parent, any other member of the Parent Group or any other Person to pay, perform or otherwise promptly discharge any Parent Liabilities in accordance with their terms, whether prior to, on or after the Effective Time;

(c)          any breach by Parent or any other member of the Parent Group of this Agreement or any of the Ancillary Agreements;

(d)          except to the extent it relates to a SpinCo Liability, any guarantee, indemnification or contribution obligation, surety bond or other credit support agreement, arrangement, commitment or undertaking for the benefit of any member of the Parent Group by any member of the SpinCo Group that survives following the Distribution; and

(e)          any untrue statement or alleged untrue statement of a material fact or omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading, with respect to statements made explicitly in Parent’s name in the Form 10, the Information Statement (as amended or supplemented if SpinCo shall have furnished any amendments or supplements thereto) or any other Disclosure Document; it being agreed that the statements set forth on Schedule 4.3(e) shall be the only statements made explicitly in Parent’s name in the Form 10, the Information Statement or any other Disclosure Document, and all other information contained in the Form 10, the Information Statement or any other Disclosure Document shall be deemed to be information supplied by SpinCo.

4.4          Indemnification Obligations Net of Insurance Proceeds and Other Amounts.

(a)          The Parties intend that any Liability subject to indemnification, contribution or reimbursement pursuant to this Article IV or Article V will be net of Insurance Proceeds or other amounts actually recovered (net of any out-of-pocket costs or expenses

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incurred in the collection thereof) from any Person by or on behalf of the Indemnitee in respect of any indemnifiable Liability. Accordingly, the amount which either Party (an “Indemnifying Party”) is required to pay to any Person entitled to indemnification or contribution hereunder (an “Indemnitee”) will be reduced by any Insurance Proceeds or other amounts actually recovered (net of any out-of-pocket costs or expenses incurred in the collection thereof) from any Person by or on behalf of the Indemnitee in respect of the related Liability. If an Indemnitee receives a payment (an “Indemnity Payment”) required by this Agreement from an Indemnifying Party in respect of any Liability and subsequently receives Insurance Proceeds or any other amounts in respect of the related Liability, then within 10 calendar days of receipt of such Insurance Payment, the Indemnitee will pay to the Indemnifying Party an amount equal to the excess of the Indemnity Payment received over the amount of the Indemnity Payment that would have been due if the Insurance Proceeds or such other amounts (net of any out-of-pocket costs or expenses incurred in the collection thereof) had been received, realized or recovered before the Indemnity Payment was made.

(b)          The Parties agree that an insurer that would otherwise be obligated to pay any claim shall not be relieved of the responsibility with respect thereto or, solely by virtue of any provision contained in this Agreement or any Ancillary Agreement, have any subrogation rights with respect thereto, it being understood that no insurer or any other Third Party shall be entitled to a “windfall” (i.e., a benefit they would not be entitled to receive in the absence of the indemnification provisions) by virtue of the indemnification and contribution provisions hereof. Each Party shall, and shall cause the members of its Group to, use commercially reasonable efforts (taking into account the probability of success on the merits and the cost of expending such efforts, including attorneys’ fees and expenses) to collect or recover any Insurance Proceeds that may be collectible or recoverable respecting the Liabilities for which indemnification or contribution may be available under this Article IV. Notwithstanding the foregoing, an Indemnifying Party may not delay making any indemnification payment required under the terms of this Agreement, or otherwise satisfying any indemnification obligation, pending the outcome of any Action to collect or recover Insurance Proceeds, and an Indemnitee need not attempt to collect any Insurance Proceeds prior to making a claim for indemnification or contribution or receiving any Indemnity Payment otherwise owed to it under this Agreement or any Ancillary Agreement.

4.5          Procedures for Indemnification of Third-Party Claims.

(a)          Notice of Claims. If, at or following the date of this Agreement, an Indemnitee shall receive notice or otherwise learn of the assertion by a Person (including any Governmental Authority) who is not a member of the Parent Group or the SpinCo Group of any claim or of the commencement by any such Person of any Action (collectively, a “Third-Party Claim”) with respect to which an Indemnifying Party may be obligated to provide indemnification to such Indemnitee pursuant to Section 4.2 or 4.3, or any other Section of this Agreement or any Ancillary Agreement, such Indemnitee shall give such Indemnifying Party written notice thereof as soon as practicable, but in any event within thirty (30) days (or sooner if the nature of the Third-Party Claim so requires) after becoming aware of such Third-

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Party Claim. Any such notice shall describe the Third-Party Claim in reasonable detail, including the facts and circumstances giving rise to such claim for indemnification, and include copies of all notices and documents (including court papers) received by the Indemnitee relating to the Third-Party Claim. Notwithstanding the foregoing, the failure of an Indemnitee to provide notice in accordance with this Section 4.5(a) shall not relieve an Indemnifying Party of its indemnification obligations under this Agreement, except to the extent to which the Indemnifying Party is actually prejudiced by the Indemnitee’s failure to provide notice in accordance with this Section 4.5(a).

(b)          Control of Defense. An Indemnifying Party may elect to defend (and seek to settle or compromise), at its own expense and with its own counsel, any Third-Party Claim; provided that, prior to the Indemnifying Party assuming and controlling defense of such Third-Party Claim, it shall first confirm to the Indemnitee in writing that, assuming the facts presented to the Indemnifying Party by the Indemnitee being true, the Indemnifying Party shall indemnify the Indemnitee for any such Liabilities to the extent resulting from, or arising out of, such Third-Party-Claim. Notwithstanding the foregoing, if the Indemnifying Party assumes such defense and, in the course of defending such Third-Party Claim, (i) the Indemnifying Party discovers that the facts presented at the time the Indemnifying Party acknowledged its indemnification obligation in respect of such Third-Party Claim were not true in all material respects and (ii) such untruth provides a reasonable basis for asserting that the Indemnifying Party does not have an indemnification obligation in respect of such Third-Party Claim, then (A) the Indemnifying Party shall not be bound by such acknowledgment, (B) the Indemnifying Party shall promptly thereafter provide the Indemnitee written notice of its assertion that it does not have an indemnification obligation in respect of such Third-Party Claim and (C) the Indemnitee shall have the right to assume the defense of such Third-Party Claim. Within 30 days after the receipt of a notice from an Indemnitee in accordance with Section 4.5(a) (or sooner, if the nature of the Third-Party Claim so requires), the Indemnifying Party shall provide written notice to the Indemnitee indicating whether the Indemnifying Party shall assume responsibility for defending the Third-Party Claim. If an Indemnifying Party elects not to assume responsibility for defending any Third-Party Claim or fails to notify an Indemnitee of its election within 30 days after receipt of the notice from an Indemnitee as provided in Section 4.5(a), then the Indemnitee that is the subject of such Third-Party Claim shall be entitled to continue to conduct and control the defense of such Third-Party Claim.

(c)          Allocation of Defense Costs. If an Indemnifying Party has elected to assume the defense of a Third-Party Claim, then such Indemnifying Party shall be solely liable for all fees and expenses incurred by it in connection with the defense of such Third-Party Claim and shall not be entitled to seek any indemnification or reimbursement from the Indemnitee for any such fees or expenses incurred by the Indemnifying Party during the course of the defense of such Third-Party Claim by such Indemnifying Party, regardless of any subsequent decision by the Indemnifying Party to reject or otherwise abandon its assumption of such defense. If an Indemnifying Party elects not to assume responsibility for defending any Third-Party Claim or fails to notify an Indemnitee of its election within 30 days after receipt of a notice from an Indemnitee as provided in Section 4.5(a), and the Indemnitee conducts and controls the defense of such Third-Party Claim and the Indemnifying Party has an indemnification obligation with respect to such Third-Party Claim, then the Indemnifying Party shall be liable for all reasonable fees and expenses incurred by the Indemnitee in connection with the defense of such Third-Party Claim.

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(d)          Right to Monitor and Participate. An Indemnitee that does not conduct and control the defense of any Third-Party Claim, or an Indemnifying Party that has failed to elect to defend any Third-Party Claim as contemplated hereby, nevertheless shall have the right to employ separate counsel (including local counsel as necessary) of its own choosing to monitor and participate in (but not control) the defense of any Third-Party Claim for which it is a potential Indemnitee or Indemnifying Party, but the fees and expenses of such counsel shall be at the expense of such Indemnitee or Indemnifying Party, as the case may be, and the provisions of Section 4.5(c) shall not apply to such fees and expenses. Notwithstanding the foregoing, but subject to Sections 6.7 and 6.8, such Party shall cooperate with the Party entitled to conduct and control the defense of such Third-Party Claim in such defense and make available to the controlling Party, at the non-controlling Party’s expense, all witnesses, information and materials in such Party’s possession or under such Party’s control relating thereto as are reasonably required by the controlling Party. In addition to the foregoing, if any Indemnitee shall in good faith determine that such Indemnitee and the Indemnifying Party have actual or potential differing defenses or conflicts of interest between them that make joint representation inappropriate, then the Indemnitee shall have the right to employ separate counsel (including local counsel as necessary) and to participate in (but not control) the defense, compromise, or settlement thereof, and the Indemnifying Party shall bear the reasonable fees and expenses of such counsel for all Indemnitees.

(e)          No Settlement. Neither Party may settle or compromise any Third-Party Claim for which either Party is seeking to be indemnified hereunder without the prior written consent of the other Party, which consent may not be unreasonably withheld, delayed or conditioned, unless such settlement or compromise is solely for monetary damages that are fully payable by the settling or compromising Party, does not involve any finding or determination of wrongdoing or violation of Law by the other Party provides for a full, unconditional and irrevocable release of the other Party from all Liability in connection with the Third-Party Claim and the settling or compromising Party does not seek indemnification from the other Party. The Parties hereby agree that if a Party presents the other Party with a written notice containing a proposal to settle or compromise a Third-Party Claim for which either Party is seeking to be indemnified hereunder and the Party receiving such proposal does not respond in any manner to the Party presenting such proposal within 30 days (or within any such shorter time period that may be required by applicable Law or court order) of receipt of such proposal, then the Party receiving such proposal shall be deemed to have consented to the terms of such proposal.

(f)           Tax Matters Agreement Governs. The above provisions of this Section 4.5 and the provisions of Section 4.6 do not apply to Taxes (Taxes being governed exclusively by the Tax Matters Agreement). In the case of any conflict between this Agreement and the Tax Matters Agreement in relation to any matters addressed by the Tax Matters Agreement, the Tax Matters Agreement shall prevail.

4.6          Additional Matters.

(a)          Timing of Payments. Indemnification or contribution payments in respect of any Liabilities for which an Indemnitee is entitled to indemnification or contribution under this Article IV shall be paid reasonably promptly (but in any event within 30 days of the final determination of the amount that the Indemnitee is entitled to indemnification or contribution

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under this Article IV)by the Indemnifying Party to the Indemnitee as such Liabilities are incurred upon demand by the Indemnitee, including reasonably satisfactory documentation setting forth the basis for the amount of such indemnification or contribution payment, including documentation with respect to calculations made and consideration of any Insurance Proceeds that actually reduce the amount of such Liabilities. The indemnity and contribution provisions contained in this Article IV shall remain operative and in full force and effect, regardless of (i) any investigation made by or on behalf of any Indemnitee, and (ii) the knowledge by the Indemnitee of Liabilities for which it might be entitled to indemnification hereunder.

(b)          Notice of Direct Claims. Any claim for indemnification or contribution under this Agreement or any Ancillary Agreement that does not result from a Third-Party Claim shall be asserted by written notice given by the Indemnitee to the applicable Indemnifying Party; provided, that the failure by an Indemnitee to so assert any such claim shall not prejudice the ability of the Indemnitee to do so at a later time except to the extent (if any) that the Indemnifying Party is prejudiced thereby. Such Indemnifying Party shall have a period of 30 days after the receipt of such notice within which to respond thereto. If such Indemnifying Party does not respond within such 30-day period, such specified claim shall be conclusively deemed a Liability of the Indemnifying Party under this Section 4.6(b) or, in the case of any written notice in which the amount of the claim (or any portion thereof) is estimated, on such later date when the amount of the claim (or such portion thereof) becomes finally determined. If such Indemnifying Party does not respond within such 30-day period or rejects such claim in whole or in part, such Indemnitee shall, subject to the provisions of Article VII, be free to pursue such remedies as may be available to such Party as contemplated by this Agreement and the Ancillary Agreements, as applicable, without prejudice to its continuing rights to pursue indemnification or contribution hereunder.

(c)          Pursuit of Claims Against Third Parties. If (i) a Party incurs any Liability arising out of this Agreement or any Ancillary Agreement; (ii) an adequate legal or equitable remedy is not available for any reason against the other Party to satisfy the Liability incurred by the incurring Party; and (iii) a legal or equitable remedy may be available to the other Party against a Third Party for such Liability, then the other Party shall use its commercially reasonable efforts to cooperate with the incurring Party, at the incurring Party’s expense, to permit the incurring Party to obtain the benefits of such legal or equitable remedy against the Third Party.

(d)          Subrogation. In the event of payment by or on behalf of any Indemnifying Party to any Indemnitee in connection with any Third-Party Claim, such Indemnifying Party shall be subrogated to and shall stand in the place of such Indemnitee as to any events or circumstances in respect of which such Indemnitee may have any right, defense or claim relating to such Third-Party Claim against any claimant or plaintiff asserting such Third-Party Claim or against any other Person. Such Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim.

(e)          Substitution. In the event of an Action in which the Indemnifying Party is not a named defendant, if either the Indemnitee or Indemnifying Party shall so request, the Parties shall endeavor to substitute the Indemnifying Party for the named defendant. If such

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substitution or addition cannot be achieved for any reason or is not requested, the named defendant shall allow the Indemnifying Party to manage the Action as set forth in Section 4.5 and this Section 4.6, and the Indemnifying Party shall fully indemnify the named defendant against all costs of defending the Action (including court costs, sanctions imposed by a court, attorneys’ fees, experts fees and all other external expenses), the costs of any judgment or settlement and the cost of any interest or penalties relating to any judgment or settlement.

4.7          Right of Contribution.

(a)          Contribution. If any right of indemnification contained in Section 4.2 or Section 4.3 is held unenforceable or is unavailable for any reason, or is insufficient to hold harmless an Indemnitee in respect of any Liability for which such Indemnitee is entitled to indemnification hereunder, then the Indemnifying Party shall contribute to the amounts paid or payable by such Indemnitee as a result of such Liability (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and the members of its Group, on the one hand, and the Indemnitee entitled to contribution, on the other hand, as well as any other relevant equitable considerations.

(b)          Allocation of Relative Fault. Solely for purposes of determining relative fault pursuant to this Section 4.7: (i) any fault associated with the business conducted with the Delayed SpinCo Assets or Delayed SpinCo Liabilities (except for the gross negligence or intentional misconduct of a member of the Parent Group) or with the ownership, operation or activities of the SpinCo Business prior to the Effective Time shall be deemed to be the fault of SpinCo and the other members of the SpinCo Group, and no such fault shall be deemed to be the fault of Parent or any other member of the Parent Group; (ii) any fault associated with the business conducted with Delayed Parent Assets or Delayed Parent Liabilities (except for the gross negligence or intentional misconduct of a member of the SpinCo Group) shall be deemed to be the fault of Parent and the other members of the Parent Group, and no such fault shall be deemed to be the fault of SpinCo or any other member of the SpinCo Group; and (iii) any fault associated with the ownership, operation or activities of the Parent Business prior to the Effective Time shall be deemed to be the fault of Parent and the other members of the Parent Group, and no such fault shall be deemed to be the fault of SpinCo or any other member of the SpinCo Group.

4.8          Covenant Not to Sue.   Each Party hereby covenants and agrees that none of it, the members of such Party’s Group or any Person claiming through it shall bring suit or otherwise assert any claim against any Indemnitee, or assert a defense against any claim asserted by any Indemnitee, before any court, arbitrator, mediator or administrative agency anywhere in the world, alleging that: (a) the assumption of any SpinCo Liabilities by SpinCo or a member of the SpinCo Group on the terms and conditions set forth in this Agreement and the Ancillary Agreements is void or unenforceable for any reason; (b) the retention of any Parent Liabilities by Parent or a member of the Parent Group on the terms and conditions set forth in this Agreement and the Ancillary Agreements is void or unenforceable for any reason, or (c) the provisions of this Article IV are void or unenforceable for any reason.

4.9          Remedies Exclusive.   The remedies provided in this Article IV or otherwise expressly set forth in the Agreement shall be the sole and exclusive remedy of the Parent Group and the SpinCo Group with respect to any and all claims related to this Agreement or the transactions contemplated hereby.

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4.10        Survival of Indemnities.   The rights and obligations of each of Parent and SpinCo and their respective Indemnitees under this Article IV shall survive (a) the sale or other transfer by either Party or any member of its Group of any assets or businesses or the assignment by it of any liabilities; or (b) any merger, consolidation, business combination, sale of all or substantially all of its Assets, restructuring, recapitalization, reorganization or similar transaction involving either Party or any of the members of its Group.

Article V

CERTAIN OTHER MATTERS

5.1          Insurance Matters.

(a)          Parent and SpinCo agree to cooperate in good faith to provide for an orderly transition of insurance coverage from the date hereof through the Effective Time. In no event shall Parent, any other member of the Parent Group or any Parent Indemnitee have Liability or obligation whatsoever to any member of the SpinCo Group in the event that any insurance policy or insurance policy related contract shall be terminated or otherwise cease to be in effect for any reason, shall be unavailable or inadequate to cover any Liability of any member of the SpinCo Group for any reason whatsoever or shall not be renewed or extended beyond the current expiration date.

(b)          From and after the Effective Time, with respect to any losses, damages and Liability incurred by any member of the SpinCo Group prior to the Effective Time (the “Prior Period”), Parent will provide SpinCo with access to, and SpinCo may make claims under, Parent’s insurance policies in place immediately prior to the Effective Time and Parent’s historical policies of insurance and/or programs of self-insurance, but solely to the extent that such policies provided coverage for members of the SpinCo Group prior to the Effective Time; provided that such access to, and the right to make claims under, such insurance policies and/or programs of self-insurance, shall be subject to the terms, conditions and exclusions of such insurance policies and/or programs of self-insurance, including but not limited to any limits on coverage or scope, any deductibles, self-insured retentions and other fees and expenses, and shall be subject to the following additional conditions:

(i)          Parent shall provide a list of any claim or potential claim for the Prior Period subject to 5.1(b) above (“Prior Period Claim”) to an administrator for SpinCo’s Prior Period Claims under Parent’s insurance policies and/or programs of self-insurance. Parent may update the list of Prior Period Claims from time to time and SpinCo shall report any Prior Period Claim to Parent, as promptly as practicable, and in any event in sufficient time so that such Prior Period Claim may be made in accordance with the Prior Period Claim reporting requirements of the applicable insurance policy;

(ii)         SpinCo and the members of the SpinCo Group shall indemnify, hold harmless and reimburse Parent and the members of the Parent Group for any deductibles, self-insured retention, administration, collateral and other fees, indemnity

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payments, settlements, judgments, legal fees, allocated claims expenses and claim handling fees and other expenses incurred by Parent or any members of the Parent Group to the extent resulting from any access to, or any Prior Period Claims made by SpinCo or any other members of the SpinCo Group under, any insurance provided pursuant to this Section 5.1(b), whether such Prior Period Claims are made by SpinCo, its employees or third Persons; and

(iii)        SpinCo shall exclusively bear (and neither Parent nor any members of the Parent Group shall have any obligation to repay or reimburse SpinCo or any member of the SpinCo Group for) and shall be liable for all excluded, uninsured, uncovered, unavailable or uncollectible amounts of all such claims made by SpinCo or any member of the SpinCo Group under the policies as provided for in this Section 5.1(b). In the event an insurance policy aggregate is exhausted, or believed likely to be exhausted, due to noticed claims, the SpinCo Group, on the one hand, and the Parent Group, on the other hand, shall be responsible for their pro rata portion of the reinstatement premium, if any, based upon the losses of such Group submitted to Parent’s insurance carrier(s) (including any submissions prior to the Effective Time). To the extent that the Parent Group or the SpinCo Group is allocated more than its pro rata portion of such premium due to the timing of losses submitted to Parent’s insurance carrier(s), the other Party shall promptly pay the first Party an amount so that each Group has been properly allocated its pro rata portion of the reinstatement premium. Subject to the following sentence, Parent may elect not to reinstate the policy aggregate. In the event that Parent elects not to reinstate the policy aggregate, it shall provide prompt written notice to SpinCo, and SpinCo may direct Parent in writing to, and Parent shall, in such case, reinstate the policy aggregate; provided that SpinCo shall be responsible for all reinstatement premiums and other costs associated with such reinstatement.

In the event that any member of the Parent Group incurs any losses, damages or Liability prior to or in respect of the period prior to the Effective Time for which such member of the Parent Group is entitled to coverage under SpinCo’s third-party insurance policies, the same process pursuant to this Section 5.1(b) shall apply, substituting “Parent” for “SpinCo” and “SpinCo” for “Parent.”

(c)          Except as provided in Section 5.1(b), from and after the Effective Time, neither SpinCo nor any member of the SpinCo Group shall have any rights to or under any of the insurance policies of Parent or any other member of the Parent Group. At the Effective Time, SpinCo shall have in effect all insurance programs required to comply with SpinCo’s contractual obligations and such other insurance policies required by Law or as reasonably necessary or appropriate for companies operating a business similar to SpinCo’s.

(d)          Neither SpinCo nor any member of the SpinCo Group, in connection with making a Prior Period Claim under any insurance policy of Parent or any member of the Parent Group pursuant to this Section 5.1, shall take any action that would be reasonably likely to (i) have a material and adverse impact on the then-current relationship between Parent or any member of the Parent Group, on the one hand, and the applicable insurance company, on the other hand; (ii) result in the applicable insurance company terminating or reducing coverage, or increasing the amount of any premium owed by Parent or any member of the Parent Group under

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the applicable insurance policy; or (iii) otherwise compromise, jeopardize or interfere in any material respect with the rights of Parent or any member of the Parent Group under the applicable insurance policy.

(e)          All payments and reimbursements by SpinCo pursuant to this Section 5.1 will be made within fifteen (15) days after SpinCo’s receipt of an invoice therefor from Parent. If Parent incurs costs to enforce SpinCo’s obligations herein, SpinCo agrees to indemnify and hold harmless Parent for such enforcement costs, including reasonable attorneys’ fees pursuant to Section 4.6(b). Parent shall retain the exclusive right to control its insurance policies and programs, including the right to exhaust, settle, release, commute, buy-back or otherwise resolve disputes with respect to any of its insurance policies and programs and to amend, modify or waive any rights under any such insurance policies and programs, notwithstanding whether any such policies or programs apply to any SpinCo Liabilities and/or Prior Period Claims SpinCo has made or could make in the future, and no member of the SpinCo Group shall erode, exhaust, settle, release, commute, buyback or otherwise resolve disputes with Parent’s insurers with respect to any of Parent’s insurance policies and programs, or amend, modify or waive any rights under any such insurance policies and programs. SpinCo shall cooperate with Parent and share such information as is reasonably necessary in order to permit Parent to manage and conduct both its approved self-insurance and insurance matters as Parent deems appropriate. Neither Parent nor any of the members of the Parent Group shall have any obligation to secure extended reporting for any claims under any Liability policies of Parent or any member of the Parent Group for any acts or omissions by any member of the SpinCo Group incurred prior to the Effective Time.

(f)           This Agreement shall not be considered as an attempted assignment of any policy of insurance or as a contract of insurance and shall not be construed to waive any right or remedy of any member of the Parent Group in respect of any insurance policy or any other contract or policy of insurance.

(g)          SpinCo does hereby, for itself and each other member of the SpinCo Group, agree that no member of the Parent Group shall have any Liability whatsoever as a result of the insurance policies and practices of Parent and the members of the Parent Group as in effect at any time, including as a result of the level or scope of any such insurance, the creditworthiness of any insurance carrier, the terms and conditions of any policy, the adequacy or timeliness of any notice to any insurance carrier with respect to any claim or potential claim or otherwise.

5.2          Late Payments.   Except as expressly provided to the contrary in this Agreement or in any Ancillary Agreement, any amount not paid when due pursuant to this Agreement or any Ancillary Agreement (and any amounts billed or otherwise invoiced or demanded and properly payable that are not paid within 30 days of such bill, invoice or other demand) shall accrue interest at a rate per annum equal to Prime Rate plus 2%.

5.3          Treatment of Payments for Tax Purposes.   For all tax purposes, the Parties agree to treat (i) any payment required by this Agreement (other than payments with respect to interest accruing after the Effective Time) as either a contribution by Parent to SpinCo or a distribution by SpinCo to Parent, as the case may be, occurring immediately prior to the

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Effective Time or as a payment of an assumed or retained Liability; and (ii) any payment of interest as taxable or deductible, as the case may be, to the Party entitled under this Agreement to retain such payment or required under this Agreement to make such payment, in either case except as otherwise required by applicable Law.

5.4          Inducement.   SpinCo acknowledges and agrees that Parent’s willingness to cause, effect and consummate the Separation and the Distribution has been conditioned upon and induced by SpinCo’s covenants and agreements in this Agreement and the Ancillary Agreements, including SpinCo’s assumption of the SpinCo Liabilities pursuant to the Separation and the provisions of this Agreement and SpinCo’s covenants and agreements contained in Article IV.

5.5          Post-Effective Time Conduct.   The Parties acknowledge that, after the Effective Time, each Party shall be independent of the other Party, with responsibility for its own actions and inactions and its own Liabilities relating to, arising out of or resulting from the conduct of its business, operations and activities following the Effective Time, except as may otherwise be provided in any Ancillary Agreement, and each Party shall (except as otherwise provided in Article IV) use commercially reasonable efforts to prevent such Liabilities from being inappropriately borne by the other Party.

Article VI

EXCHANGE OF INFORMATION; CONFIDENTIALITY

6.1          Agreement for Exchange of Information.

(a)          Subject to Section 6.9 and any other applicable confidentiality obligations, each of Parent and SpinCo, on behalf of itself and each member of its Group, agrees to use commercially reasonable efforts to provide or make available, or cause to be provided or made available, to the other Party and the members of such other Party’s Group, at any time before, on or after the Effective Time, as soon as reasonably practicable after written request therefor, any Information (or a copy thereof) (including Excluded Information) in the possession or under the control of such Party or its Group which the requesting Party or its Group requests to the extent that (i) such Information relates to the SpinCo Business, or any SpinCo Asset or SpinCo Liability, if SpinCo is the requesting Party, or to the Parent Business, or any Parent Asset or Parent Liability, if Parent is the requesting Party; (ii) such Information is required by the requesting Party to comply with its obligations under this Agreement or any Ancillary Agreement; or (iii) such Information is required by the requesting Party to comply with any obligation imposed by any Governmental Authority; provided, however, that, in the event that the Party to whom the request has been made determines that any such provision of Information could be detrimental to the Party providing the Information, violate any Law or agreement, or waive any privilege available under applicable Law, including any attorney-client privilege, then the Parties shall use commercially reasonable efforts to permit compliance with such obligations to the extent and in a manner that avoids any such harm or consequence.  The Party providing Information pursuant to this Section 6.1 shall only be obligated to provide such Information in the form, condition and format in which it then exists, and in no event shall such Party be required to perform any improvement, modification, conversion, updating or reformatting of any

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such Information, and nothing in this Section 6.1 shall expand the obligations of a Party under Section 6.4.

(b)          Without limiting the generality of the foregoing, until the first SpinCo fiscal year end occurring after the Effective Time (and for a reasonable period of time afterwards as required for each Party to prepare consolidated financial statements or complete a financial statement audit for the fiscal year during which the Distribution Date occurs), each Party shall use its commercially reasonable efforts to cooperate with the other Party’s Information requests to enable (i) the other Party to meet its timetable for dissemination of its earnings releases, financial statements and management’s assessment of the effectiveness of its disclosure controls and procedures and its internal control over financial reporting in accordance with Items 307 and 308, respectively, of Regulation S-K promulgated under the Exchange Act; and (ii) the other Party’s accountants to timely complete their review of the quarterly financial statements and audit of the annual financial statements, including, to the extent applicable to such Party, its auditor’s audit of its internal control over financial reporting and management’s assessment thereof in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, the SEC’s and Public Company Accounting Oversight Board’s rules and auditing standards thereunder and any other applicable Laws.

6.2          Ownership of Information.   The provision of any Information pursuant to Section 6.1 or Section 6.7 shall not affect the ownership of such Information (which shall be determined solely in accordance with the terms of this Agreement and the Ancillary Agreements), or constitute a grant of rights in or to any such Information.

6.3          Compensation for Providing Information.   The Party requesting Information agrees to reimburse the other Party for the reasonable costs, if any, of creating, gathering, copying, transporting and otherwise complying with the request with respect to such Information (including any reasonable costs and expenses incurred in any review of Information for purposes of protecting the Privileged Information of the providing Party or in connection with the restoration of backup media for purposes of providing the requested Information). Except as may be otherwise specifically provided elsewhere in this Agreement, any Ancillary Agreement or any other agreement between the Parties, such costs shall be computed in accordance with the providing Party’s standard methodology and procedures.

6.4          Record Retention.   To facilitate the possible exchange of Information pursuant to this Article VI and other provisions of this Agreement after the Effective Time, the Parties agree to use their commercially reasonable efforts, which shall be no less rigorous than those used for retention of such Party’s own Information, to retain all Information in their respective possession or control at the Effective Time in accordance with the policies of Parent as in effect at the Effective Time or such other policies as may be adopted by Parent after the Effective Time (provided, in the case of SpinCo, that Parent notifies SpinCo of any such change); provided, however, that in the case of any Information relating to Taxes, such retention period shall be extended to the expiration of the applicable statute of limitations (giving effect to any extensions thereof). Notwithstanding the foregoing, Section [●] of the Tax Matters Agreement will govern the retention of Tax related records, and Section 2.5 of the Employee Matters Agreement will govern the retention of employment and benefits related records.

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6.5          Limitations of Liability.   Neither Party shall have any Liability to the other Party in the event that any Information exchanged or provided pursuant to this Agreement is found to be inaccurate in the absence of gross negligence, bad faith or willful misconduct by the Party providing such Information. Neither Party shall have any Liability to any other Party if any Information is destroyed after commercially reasonable efforts by such Party to comply with the provisions of Section 6.4.

6.6          Other Agreements Providing for Exchange of Information.

(a)          The rights and obligations granted under this Article VI are subject to any specific limitations, qualifications or additional provisions on the sharing, exchange, retention or confidential treatment of Information set forth in any Ancillary Agreement.

(b)          Any Party that receives, pursuant to a request for Information in accordance with this Article VI, Tangible Information that is not relevant to its request shall, at the request of the providing Party (i) return it to the providing Party or, at the providing Party’s request, destroy such Tangible Information; and (ii) deliver to the providing Party written confirmation that such Tangible Information was returned or destroyed, as the case may be, which confirmation shall be signed by an authorized representative of the requesting Party.

6.7          Production of Witnesses; Records; Cooperation.

(a)          After the Effective Time, except in the case of an adversarial Action or Dispute between Parent and SpinCo, or any members of their respective Groups, each Party shall use its commercially reasonable efforts to make available to the other Party, upon written request, the former, current and future directors, officers, employees, other personnel and agents of the members of its respective Group as witnesses and any books, records or other documents within its control or which it otherwise has the ability to make available without undue burden, to the extent that any such person (giving consideration to business demands of such directors, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with any Action in which the requesting Party (or member of its Group) may from time to time be involved, regardless of whether such Action is a matter with respect to which indemnification may be sought hereunder. The requesting Party shall bear all costs and expenses in connection therewith.

(b)          If an Indemnifying Party chooses to defend or to seek to compromise or settle any Third-Party Claim, the other Party shall make available to such Indemnifying Party, upon written request, the former, current and future directors, officers, employees, other personnel and agents of the members of its respective Group as witnesses and any books, records or other documents within its control or which it otherwise has the ability to make available without undue burden, to the extent that any such person (giving consideration to business demands of such directors, officers, employees, other personnel and agents) or books, records or other documents may reasonably be required in connection with such defense, settlement or compromise, or such prosecution, evaluation or pursuit, as the case may be, and shall otherwise reasonably cooperate in such defense, settlement or compromise, or such prosecution, evaluation or pursuit, as the case may be.

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(c)          Without limiting the foregoing, the Parties shall cooperate and consult to the extent reasonably necessary with respect to any Actions.

(d)          The obligation of the Parties to provide witnesses pursuant to this Section 6.7 is intended to be interpreted in a manner so as to facilitate cooperation and shall include the obligation to provide as witnesses directors, officers, employees, other personnel and agents without regard to whether such person could assert a possible business conflict (subject to the exception set forth in the first sentence of Section 6.7(a)).

6.8          Privileged Matters.

(a)          The Parties recognize that legal and other professional services that have been and will be provided prior to the Effective Time have been and will be rendered for the collective benefit of each of the members of the Parent Group and the SpinCo Group, and that each of the members of the Parent Group and the SpinCo Group should be deemed to be the client with respect to such services for the purposes of asserting all privileges which may be asserted under applicable Law in connection therewith. The Parties recognize that legal and other professional services will be provided following the Effective Time, which services will be rendered solely for the benefit of the Parent Group or the SpinCo Group, as the case may be. In furtherance of the foregoing, each Party shall authorize the delivery to and/or retention by the other Party of materials existing as of the Effective Time that are necessary for such other Party to perform such services.

(b)          The Parties agree as follows:

(i)          Parent shall be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that does not relate solely to the SpinCo Business, whether or not the Privileged Information is in the possession or under the control of any member of the Parent Group or any member of the SpinCo Group. Parent shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that does not relate solely to any SpinCo Liabilities resulting from any Actions that are now pending or may be asserted in the future, whether or not the Privileged Information is in the possession or under the control of any member of the Parent Group or any member of the SpinCo Group; and

(ii)         SpinCo shall be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to the SpinCo Business and not to the Parent Business, whether or not the Privileged Information is in the possession or under the control of any member of the SpinCo Group or any member of the Parent Group. SpinCo shall also be entitled, in perpetuity, to control the assertion or waiver of all privileges and immunities in connection with any Privileged Information that relates solely to any SpinCo Liabilities resulting from any Actions that are now pending or may be asserted in the future, whether or not the Privileged Information is in the possession or under the control of any member of the SpinCo Group or any member of the Parent Group.

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(iii)        If the Parties do not agree as to whether certain Information is Privileged Information, then such Information shall be treated as Privileged Information, and the Party that believes that such Information is Privileged Information shall be entitled to control the assertion or waiver of all privileges and immunities in connection with any such Information unless the Parties otherwise agree in writing.  The Parties shall use the procedures set forth in Article VII to resolve any disputes as to whether any Information relates solely to the Parent Business, solely to the SpinCo Business, or to both the Parent Business and the SpinCo Business.

(c)          Subject to the remaining provisions of this Section 6.8, the Parties agree that they shall have a shared privilege or immunity with respect to all privileges and immunities not allocated pursuant to Section 6.8(b) and all privileges and immunities relating to any Actions or other matters that involve both Parties (or one or more members of their respective Groups) and in respect of which both Parties have Liabilities under this Agreement, and that no such shared privilege or immunity may be waived by either Party without the written consent of the other Party.

(d)          If any Dispute arises between the Parties or any members of their respective Groups regarding whether a privilege or immunity should be waived to protect or advance the interests of either Party and/or any member of their respective Groups, each Party agrees that it shall (i) negotiate with the other Party in good faith; (ii) endeavor to minimize any prejudice to the rights of the other Party; and (iii) not unreasonably withhold consent to any request for waiver by the other Party.  Further, each Party specifically agrees that it shall not withhold its consent to the waiver of a privilege or immunity for any purpose except in good faith to protect its own legitimate interests.

(e)          In the event of any adversarial Action or Dispute between Parent and SpinCo, or any members of their respective Groups, either Party may waive a privilege in which the other Party or member of such other Party’s Group has a shared privilege, without obtaining consent pursuant to Section 6.8(c); provided that such waiver of a shared privilege shall be effective only as to the use of Information with respect to the Action between the Parties and/or the applicable members of their respective Groups, and shall not operate as a waiver of the shared privilege with respect to any Third Party.

(f)           Upon receipt by either Party, or by any member of its respective Group, of any subpoena, discovery or other request that may reasonably be expected to result in the production or disclosure of Privileged Information subject to a shared privilege or immunity or as to which another Party has the sole right hereunder to assert a privilege or immunity, or if either Party obtains knowledge that any of its, or any member of its respective Group’s, current or former directors, officers, agents or employees have received any subpoena, discovery or other requests that may reasonably be expected to result in the production or disclosure of such Privileged Information, such Party shall promptly notify the other Party of the existence of the request (which notice shall be delivered to such other Party no later than five business days following the receipt of any such subpoena, discovery or other request) and shall provide the other Party a reasonable opportunity to review the Privileged Information and to assert any rights it or they may have under this Section 6.8 or otherwise, to prevent the production or disclosure of such Privileged Information.

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(g)          Any furnishing of, or access or transfer of, any Information pursuant to this Agreement is made in reliance on the agreement of Parent and SpinCo set forth in this Section 6.8 and in Section 6.9 to maintain the confidentiality of Privileged Information and to assert and maintain all applicable privileges and immunities. The Parties agree that their respective rights to any access to Information, witnesses and other Persons, the furnishing of notices and documents and other cooperative efforts between the Parties contemplated by this Agreement, and the transfer of Privileged Information between the Parties and members of their respective Groups pursuant to this Agreement, shall not be deemed a waiver of any privilege that has been or may be asserted under this Agreement or otherwise.

(h)          In connection with any matter contemplated by Section 6.7 or this Section 6.8, the Parties agree to, and to cause the applicable members of their Group to, use commercially reasonable efforts to maintain their respective separate and joint privileges and immunities, including by executing joint defense and/or common interest agreements where necessary or useful for this purpose.

6.9          Confidentiality.

(a)          Confidentiality. Subject to Section 6.10, from and after the Effective Time until the five-year anniversary of the Effective Time, each of Parent and SpinCo, on behalf of itself and each member of its respective Group, agrees to hold, and to cause its respective Representatives to hold, in strict confidence, with at least the same degree of care that applies to Parent’s confidential and proprietary Information pursuant to policies in effect as of the Effective Time, all confidential and proprietary Information concerning the other Party or any member of the other Party’s Group or their respective businesses that is either in its possession (including: (i) confidential and proprietary Information in its possession prior to the date hereof and (ii) in the case of the Parent Group, the Excluded Information) or furnished by any such other Party or any member of such Party’s Group or their respective Representatives at any time pursuant to this Agreement, any Ancillary Agreement or otherwise, and shall not use any such confidential and proprietary Information other than for such purposes as shall be expressly permitted hereunder or thereunder, except, in each case, to the extent that such confidential and proprietary Information has been (i) in the public domain or generally available to the public, other than as a result of a disclosure by such Party or any member of such Party’s Group or any of their respective Representatives in violation of this Agreement, (ii) later lawfully acquired from other sources by such Party (or any member of such Party’s Group) which sources are not themselves bound by a confidentiality obligation or other contractual, legal or fiduciary obligation of confidentiality with respect to such confidential and proprietary Information, or (iii) independently developed or generated without reference to or use of any proprietary or confidential Information of the other Party or any member of such Party’s Group. If any confidential and proprietary Information of one Party or any member of its Group is disclosed to the other Party or any member of such other Party’s Group in connection with providing services to such first Party or any member of such first Party’s Group under this Agreement or any Ancillary Agreement, then such disclosed confidential and proprietary Information shall be used only as required to perform such services.

(b)          No Release; Return or Destruction. Each Party shall not, and shall cause each member of its Group not to, release or disclose, or permit to be released or disclosed, any

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Information addressed in Section 6.9(a) to any other Person, except its Representatives who need to know such Information in their capacities as such (who shall be advised of their obligations hereunder with respect to such Information), and except in compliance with Section 6.10. Without limiting the foregoing, when any such Information is no longer needed for the purposes contemplated by this Agreement or any Ancillary Agreement, and is no longer subject to any legal hold or other document preservation obligation, each Party will promptly after request of the other Party either return to the other Party all such Information in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon) or notify the other Party in writing that it has destroyed such Information (and such copies thereof and such notes, extracts or summaries based thereon); provided, that the Parties may retain electronic back-up versions of such Information maintained on routine computer system backup tapes, disks or other backup storage devices; provided further, that any such Information so retained shall remain subject to the confidentiality provisions of this Agreement or any Ancillary Agreement.

(c)          Third-Party Information; Privacy or Data Protection Laws. Each Party acknowledges that it and members of its Group may presently have and, following the Effective Time, may gain access to or possession of confidential or proprietary Information of, or personal Information relating to, Third Parties (i) that was received under confidentiality or non-disclosure agreements entered into between such Third Parties, on the one hand, and the other Party or members of such Party’s Group, on the other hand, prior to the Effective Time; or (ii) that, as between the two Parties, was originally collected by the other Party or members of such Party’s Group and that may be subject to and protected by privacy, data protection or other applicable Laws. Each Party agrees that it shall hold, protect and use, and shall cause the members of its Group and its and their respective Representatives to hold, protect and use, in strict confidence the confidential and proprietary Information of, or personal Information relating to, Third Parties in accordance with privacy, data protection or other applicable Laws and the terms of any agreements that were either entered into before the Effective Time or affirmative commitments or representations that were made before the Effective Time by, between or among the other Party or members of the other Party’s Group, on the one hand, and such Third Parties, on the other hand.

6.10        Protective Arrangements.   In the event that a Party or any member of its Group either determines on the advice of its counsel that it is required to disclose any Information pursuant to applicable Law or receives any request or demand under lawful process or from any Governmental Authority to disclose or provide Information of the other Party (or any member of the other Party’s Group) that is subject to the confidentiality provisions hereof, such Party shall notify the other Party (to the extent legally permitted) as promptly as practicable under the circumstances prior to disclosing or providing such Information and shall cooperate, at the expense of the other Party, in seeking any appropriate protective order requested by the other Party. In the event that such other Party fails to receive such appropriate protective order in a timely manner and the Party receiving the request or demand reasonably determines that its failure to disclose or provide such Information shall actually prejudice the Party receiving the request or demand, then the Party that received such request or demand may thereafter disclose or provide Information to the extent required by such Law (as so advised by its counsel) or by lawful process or such Governmental Authority, and the disclosing Party shall promptly provide the other Party with a copy of the Information so disclosed, in the same form and format so

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disclosed, together with a list of all Persons to whom such Information was disclosed, in each case to the extent legally permitted.

Article VII

DISPUTE RESOLUTION

7.1          Good-Faith Negotiation.   Except as specifically set forth in any Ancillary Agreement, subject to Section 7.4, either Party seeking resolution of any dispute, controversy or claim arising out of or relating to this Agreement or Ancillary Agreement (including regarding whether any Assets are SpinCo Assets, any Liabilities are SpinCo Liabilities or the validity, interpretation, breach or termination of this Agreement or any Ancillary Agreement) (a “Dispute”), shall provide written notice thereof to the other Party (the “Initial Notice”), and within 30 days of the delivery of the Initial Notice, the Parties shall attempt in good faith to negotiate a resolution of the Dispute. The negotiations shall be conducted by executives who hold, at a minimum, the title of vice president and who have authority to settle the Dispute. All such negotiations shall be confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence. If the Parties are unable for any reason to resolve a Dispute within 30 days after the delivery of such notice or if a Party reasonably concludes that the other Party is not willing to negotiate as contemplated by this Section 7.1, the Dispute shall be submitted to mediation in accordance with Section 7.2.

7.2          Mediation.   Any Dispute not resolved pursuant to Section 7.1 shall, at the written request of a Party (a “Mediation Request”), be submitted to nonbinding mediation in accordance with the then current International Institute for Conflict Prevention and Resolution (“CPR”) Mediation Procedure, except as modified herein. The mediation shall be held in Atlanta, GA or such other place as the Parties may mutually agree in writing. The Parties shall have 20 days from receipt by a Party of a Mediation Request to agree on a mediator. If no mediator has been agreed upon by the Parties within 20 days of receipt by a party of a Mediation Request, then a Party may request (on written notice to the other Party), that CPR appoint a mediator in accordance with the CPR Mediation Procedure. All mediation pursuant to this clause shall be confidential and shall be treated as compromise and settlement negotiations for purposes of applicable rules of evidence, and no oral or documentary representations made by the Parties during such mediation shall be admissible for any purpose in any subsequent proceedings. No Party shall disclose or permit the disclosure of any information about the evidence adduced or the documents produced by the other Party in the mediation proceedings or about the existence, contents or results of the mediation without the prior written consent of such other Party, except in the course of a judicial or regulatory proceeding or as may be required by Law or requested by a Governmental Authority or securities exchange. Before making any disclosure permitted by the preceding sentence, the Party intending to make such disclosure shall, to the extent reasonably practicable, give the other Party reasonable written notice of the intended disclosure and afford the other Party a reasonable opportunity to protect its interests. If the Dispute has not been resolved within 60 days of the appointment of a mediator, or within 90 days after receipt by a Party of a Mediation Request (whichever occurs sooner), or within such longer period as the Parties may agree to in writing, then the Dispute shall be submitted to binding arbitration in accordance with Section 7.3.

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7.3          Arbitration.

(a)          In the event that a Dispute has not been resolved within 60 days of the appointment of a mediator in accordance with Section 7.2, or within 90 days after receipt by a Party of a Mediation Request (whichever occurs sooner), or within such longer period as the Parties may agree to in writing, then such Dispute shall, upon the written request of a Party (the “Arbitration Request”) be submitted to be finally resolved by binding arbitration pursuant to the CPR Arbitration Procedure then in effect (the “CPR Arbitration Procedure”). The arbitration shall be held in Atlanta, Georgia or such other place as the Parties may mutually agree in writing. Unless otherwise agreed by the Parties in writing, any Dispute to be decided pursuant to this Section 7.3 will be decided (i) before a sole arbitrator if the amount in dispute, inclusive of all claims and counterclaims, totals less than $2 million; or (ii) by a panel of three arbitrators if the amount in dispute, inclusive of all claims and counterclaims, totals $2 million or more.

(b)          If the arbitration is to be decided by a panel of three arbitrators, the panel will be chosen as follows: (i) within 15 days from the date of the receipt of the Arbitration Request, each Party will name an arbitrator; and (ii) the two Party-appointed arbitrators will thereafter, within 30 days from the date on which the second of the two arbitrators was named, name a third, independent arbitrator who will act as chairperson of the arbitral tribunal. In the event that either Party fails to name an arbitrator within 15 days from the date of receipt of the Arbitration Request, then upon written application by either Party, that arbitrator shall be appointed pursuant to the CPR Arbitration Procedure. In the event that the two Party-appointed arbitrators fail timely to appoint the third arbitrator, then upon written application by either Party the third, independent arbitrator will be appointed pursuant to the CPR Arbitration Procedure. If the arbitration will be before a sole independent arbitrator, then the sole independent arbitrator will be appointed by written agreement of the Parties within 15 days of the date of receipt of the Arbitration Request. If the Parties cannot timely agree to a sole independent arbitrator, then upon written application by either Party, the sole independent arbitrator will be appointed pursuant to the CPR Arbitration Procedure.

(i)          With respect to any disputes relating to Environmental Liabilities, unless both Parties otherwise agree at the time of selection, any and all arbitrators shall be attorneys with experience in Environmental Laws or technical or scientific experts, in each case, whose work relates to environmental science, remediation or pollution control issues, with relevance to the specific disputes.

(ii)         Each arbitrator shall be proficient in the English language. Each arbitrator shall be independent and impartial of the Parties to the arbitration. No arbitrator shall be an employee, officer, director, consultant, contractor or other service provider of any Party or of their respective Affiliates, or an employee, officer, director, consultant, contractor or service provider to any of the foregoing, nor shall any arbitrator have any pecuniary, economic or other interest that would be affected in any material respect by the outcome of the dispute.

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(c)          The arbitrator(s) will have the right to award, on an interim basis, or include in the final award, any relief which it deems proper in the circumstances, including money damages (with interest on unpaid amounts from the due date), injunctive relief (including specific performance) and attorneys’ fees and costs; provided that the arbitrator(s) will not award any relief not specifically requested by the Parties and, in any event, will not award any indirect, punitive, exemplary, remote, speculative or similar damages in excess of compensatory damages of the other arising in connection with the transactions contemplated hereby (other than any such Liability with respect to a Third-Party Claim). In its award the arbitrator(s) shall allocate, in the arbitrator(s) discretion, among the Parties to the arbitration all costs of the arbitration, including the fees and expenses of the arbitrator(s) and attorney’s fees, costs and expert witness expenses incurred by the Parties. Upon selection of the arbitrator(s) following any grant of interim relief by a special arbitrator or court pursuant to Section 7.4, the arbitrator(s) may affirm or disaffirm that relief, and the Parties will seek modification or rescission of the order entered by the court as necessary to accord with the decision of the arbitrator(s). The award of the arbitrator(s) shall be final and binding on the Parties, and may be enforced in any court of competent jurisdiction. The Parties hereby waive any right to refer any question of law to any court. The initiation of mediation or arbitration pursuant to this Article VII will toll the applicable statute of limitations for the duration of any such proceedings.

(d)          In order to facilitate the comprehensive resolution of related disputes and to avoid inconsistent decisions in related disputes, upon request of any Party to an arbitration proceeding commenced pursuant to this Section 7.3, any dispute, controversy or claim subsequently noticed for arbitration under the provisions of this Section 7.3 may be consolidated with the earlier-commenced arbitration proceeding, as determined within the discretion of the arbitral tribunal appointed in the first-commenced arbitration proceeding. The arbitral tribunal must not consolidate such arbitrations unless the arbitral tribunal determines that (i) there are issues of fact or law common to the proceedings, so that a consolidated proceeding would be more efficient than separate proceedings, and (ii) no Party hereto would be prejudiced as a result of such consolidation through undue delay, conflict of interest or otherwise. If the first-appointed arbitral tribunal determines that the arbitrations shall be consolidated, the first-appointed arbitral tribunal shall have jurisdiction over the consolidated arbitration to the exclusion of any other arbitrator or arbitral tribunal, and any appointment of another arbitrator in relation to the other arbitrations will be terminated. Any such termination of an arbitrator’s appointment shall be without prejudice to: (i) his entitlement to be paid his proper fees and disbursements; and (ii) the date when any claim or defense was raised for the purpose of applying any limitation bar or any similar rule or provision.

(e)          The Parties agree that the arbitration shall be kept confidential and that the existence of the proceeding and any element of it (including any pleadings, briefs or other documents submitted or exchanged, any testimony or other oral submissions, and any awards) shall not be disclosed other than to the arbitral tribunal, the CPR, the Parties, their counsel, accountants and auditors, insurers and re-insurers, and any other Person necessary to or involved in the conduct of the proceeding; provided, that, in the case of disclosure to a Person necessary to or involved in the conduct of the proceeding, only such information as is necessary to such Person’s involvement shall be disclosed. The confidentiality obligations shall not apply (i) if disclosure is required by applicable Law, stock exchange requirement to which the disclosing Party (or any of its Affiliates) is subject, or in judicial or administrative proceedings involving

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both Parties or (ii) as far as disclosure is necessary or appropriate to protect or pursue a legal right, including enforcement of an award.

(f)           Each Party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 10.5 herein for any proceeding permitted hereunder, including for proceedings regarding the recognition and enforcement of any award resulting from an arbitration brought pursuant to this Section 7.3 or any judgment, of any jurisdiction, resulting therefrom, and for enforcement of the agreement to arbitrate set forth in this Section 7.3 and Section 7.4. Nothing in this Agreement will affect the right of any Party to this Agreement to serve process in any other manner permitted by applicable Law.

(g)          All payments made pursuant to the arbitration decision or award or any judgment entered thereon shall be made in U.S. Dollars without any escrow, holdback or offset.

(h)          The CPR, the arbitral tribunal and the Parties shall endeavor to conclude any arbitration proceeding within 180 days from the date of the receipt of the Arbitration Request; provided, that, in no event shall the failure to conclude any arbitration within such time period be raised or considered as depriving the tribunal of its jurisdiction or as a defense to or argument against the enforcement of any award of the tribunal.

7.4          Litigation and Unilateral Commencement of Arbitration.   Notwithstanding the foregoing provisions of this Article VII, (a) a Party may seek preliminary provisional or injunctive judicial relief with respect to a Dispute without first complying with the procedures set forth in Section 7.1, Section 7.2 and Section 7.3 if such action is reasonably necessary to avoid irreparable damage and (b) either Party may initiate arbitration before the expiration of the periods specified in Section 7.2 and Section 7.3 if (i) such Party has submitted a Mediation Request or Arbitration Request, as applicable, and the other Party has failed, within the applicable periods set forth in Section 7.3, to agree upon a date for the first mediation session to take place within 30 days after the appointment of such mediator or such longer period as the Parties may agree to in writing or (ii) such Party has failed to comply with Section 7.3 in good faith with respect to commencement and engagement in arbitration. In such event, the other Party may commence and prosecute such arbitration unilaterally in accordance with the CPR Arbitration Procedure.

7.5          Conduct During Dispute Resolution Process.   Unless otherwise agreed in writing, the Parties shall, and shall cause their respective members of their Group to, continue to honor all commitments under this Agreement and each Ancillary Agreement to the extent required by such agreements during the course of dispute resolution pursuant to the provisions of this Article VII, unless such commitments are the specific subject of the Dispute at issue.

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Article VIII

FURTHER ASSURANCES AND ADDITIONAL COVENANTS

8.1          Further Assurances.

(a)          In addition to the actions specifically provided for elsewhere in this Agreement, each of the Parties shall use its commercially reasonable efforts, prior to, on and after the Effective Time, to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable Laws, regulations and agreements to consummate and make effective the transactions contemplated by this Agreement, the Ancillary Agreements and the Plan of Reorganization.

(b)          Without limiting the foregoing, prior to, on and after the Effective Time, each Party hereto shall cooperate with the other Party, and without any further consideration, but at the expense of the requesting Party, to execute and deliver, or use its reasonable best efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain all Approvals or Notifications of, any Governmental Authority or any other Person under any permit, license, agreement, indenture or other instrument (including any consents or Governmental Approvals), and to take all such other actions as such Party may reasonably be requested to take by the other Party from time to time, consistent with the terms of this Agreement and the Ancillary Agreements, in order to effectuate the provisions and purposes of this Agreement and the Ancillary Agreements and the transfers of the SpinCo Assets and the Parent Assets and the assignment and assumption of the SpinCo Liabilities and the Parent Liabilities and the other transactions contemplated hereby and thereby. Without limiting the foregoing, each Party will, at the reasonable request, cost and expense of the other Party, take such other actions as may be reasonably necessary to vest in such other Party good and marketable title to the Assets allocated to such Party under this Agreement or any of the Ancillary Agreements, free and clear of any Security Interest, if and to the extent it is practicable to do so.

(c)          On or prior to the Effective Time, Parent and SpinCo in their respective capacities as direct and indirect shareholders of the members of their Groups, shall each ratify any actions which are reasonably necessary or desirable to be taken by Parent, SpinCo or any of the members of their respective Groups, as the case may be, to effectuate the transactions contemplated by this Agreement and the Ancillary Agreements.

(d)          Each of Parent and SpinCo, on behalf of itself and each of the members of its Group, waives (and agrees not to assert against any of the others) any claim or demand that any of them may have against any of the others for any Liabilities or other claims relating to or arising out of: (i) the failure of SpinCo or any other member of the SpinCo Group, on the one hand, or of Parent or any other member of the Parent Group, on the other hand, to provide any notification or disclosure required under any state Environmental Law in connection with the Separation or the other transactions contemplated by this Agreement, including the transfer by any member of any Group to any member of the other Group of ownership or operational control of any Assets not previously owned or operated by such transferee; or (ii) any inadequate, incorrect or incomplete notification or disclosure under any such state Environmental Law by the applicable transferor. To the extent any Liability to any Governmental Authority or any third

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Person arises out of any action or inaction described in clause (i) or (ii) above, the transferee of the applicable Asset hereby assumes and agrees to pay any such Liability.

Article IX

TERMINATION

9.1          Termination.   This Agreement and all Ancillary Agreements may be terminated and the Distribution may be amended, modified or abandoned at any time prior to the Effective Time by Parent, in its sole and absolute discretion, without the approval or consent of any other Person, including SpinCo. After the Effective Time, this Agreement may not be terminated except by an agreement in writing signed by a duly authorized officer ofeach of the Parties.

9.2          Effect of Termination.   In the event of any termination of this Agreement prior to the Effective Time, no Party (nor any of its directors, officers, employees or agents) shall have any Liability or further obligation to the other Party by reason of this Agreement.

Article X

MISCELLANEOUS

10.1        Counterparts; Entire Agreement; Corporate Power.

(a)          This Agreement and each Ancillary Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party.

(b)          This Agreement, the Ancillary Agreements and the Exhibits, Schedules and appendices hereto and thereto contain the entire agreement between the Parties with respect to the subject matter hereof and supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Parties with respect to this Agreement or the Ancillary Agreements other than those set forth or referred to herein or therein.

(c)          Parent represents on behalf of itself and each other member of the Parent Group, and SpinCo represents on behalf of itself and each other member of the SpinCo Group, as follows:

(i)          each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement and each Ancillary Agreement to which it is a party and to consummate the transactions contemplated hereby and thereby; and

(ii)         this Agreement and each Ancillary Agreement to which it is a party has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms thereof.

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(d)          Each Party acknowledges that it and each other Party is executing certain of the Ancillary Agreements by facsimile, stamp or mechanical signature, and that delivery of an executed counterpart of a signature page to this Agreement or any Ancillary Agreement (whether executed by manual, stamp or mechanical signature) by facsimile or by email in portable document format (PDF) shall be effective as delivery of such executed counterpart of this Agreement or any Ancillary Agreement. Each Party expressly adopts and confirms each such facsimile, stamp or mechanical signature (regardless of whether delivered in person, by mail, by courier, by facsimile or by email in portable document format (PDF))made in its respective name as if it were a manual signature delivered in person, agrees that it will not assert that any such signature or delivery is not adequate to bind such Party to the same extent as if it were signed manually and delivered in person and agrees that, at the reasonable request of the other Party at any time, it will as promptly as reasonably practicable cause each such Ancillary Agreement to be manually executed (any such execution to be as of the date of the initial date thereof) and delivered in person, by mail or by courier.

10.2        Governing Law.   This Agreement and, unless expressly provided therein, each Ancillary Agreement (and any claims or disputes arising out of or related hereto or thereto or to the transactions contemplated hereby and thereby or to the inducement of any party to enter herein and therein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed by and construed and interpreted in accordance with the Laws of the State of Delaware irrespective of the choice of laws principles of the State of Delaware including all matters of validity, construction, effect, enforceability, performance and remedies.

10.3        Assignability.   Except as set forth in any Ancillary Agreement, this Agreement and each Ancillary Agreement shall be binding upon and inure to the benefit of the Parties and the parties thereto, respectively, and their respective successors and permitted assigns; provided, however, that neither Party nor any such party thereto may assign its rights or delegate its obligations under this Agreement or any Ancillary Agreement without the express prior written consent of the other Party hereto or other parties thereto, as applicable. Any purported assignment that is made in violation of the immediately preceding sentence shall be null and void. Notwithstanding the foregoing, no such consent shall be required for the assignment of a Party’s rights and obligations under this Agreement and the Ancillary Agreements (except as may be otherwise provided in any such Ancillary Agreement) in whole (i.e., the assignment of a Party’s rights and obligations under this Agreement and all Ancillary Agreements all at the same time) in connection with a change of control of a Party so long as the resulting, surviving or transferee Person assumes all the obligations of the relevant party thereto by operation of Law or pursuant to an agreement in form and substance reasonably satisfactory to the other Party. Nothing herein is intended to, or shall be construed to, prohibit either Party or any member of its Group from being party to or undertaking a change of control.

10.4        Third-Party Beneficiaries.   Except for the indemnification rights under this Agreement and each Ancillary Agreement of any Parent Indemnitee or SpinCo Indemnitee in their respective capacities as such, (a) the provisions of this Agreement and each Ancillary Agreement are solely for the benefit of the Parties and are not intended to confer upon any Person except the Parties any rights or remedies hereunder, and (b) there are no third-party beneficiaries of this Agreement or any Ancillary Agreement and neither this Agreement nor any

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Ancillary Agreement shall provide any third person with any remedy, claim, Liability, reimbursement, claim of action or other right in excess of those existing without reference to this Agreement or any Ancillary Agreement.

10.5        Notices.   All notices, requests, claims, demands or other communications under this Agreement and, to the extent, applicable and unless otherwise provided therein, under each of the Ancillary Agreements shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person or by overnight courier service, to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 10.5):

If to Parent, to:

WestRock Company

405 Thrasher Street

Norcross, Georgia 30071

Attention: Chief Financial Officer

with a copy to:

WestRock Company

405 Thrasher Street

Norcross, Georgia 30071

Attention: General Counsel

with a copy to:

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Attention:   Gregory E. Ostling

If to SpinCo, to:

Ingevity Corporation

5255 Virginia Avenue

North Charleston, SC 29406

Attention: General Counsel

with a copy (prior to the Effective Time) to:

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Attention:   Gregory E. Ostling

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A Party may, by notice to the other Party, change the address to which such notices are to be given.

10.6        Severability.   If any provision of this Agreement or any Ancillary Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof or thereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Parties.

10.7        Force Majeure.   No Party shall be deemed in default of this Agreement or, unless otherwise expressly provided therein, any Ancillary Agreement for any delay or failure to fulfill any obligation (other than a payment obligation) hereunder or thereunder so long as and to the extent to which any delay or failure in the fulfillment of such obligation is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. In the event of any such excused delay, the time for performance of such obligations (other than a payment obligation) shall be extended for a period equal to the time lost by reason of the delay. A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such event, (a) provide written notice to the other Party of the nature and extent of any such Force Majeure condition; and (b) use commercially reasonable efforts to remove any such causes and resume performance under this Agreement and the Ancillary Agreements, as applicable, as soon as reasonably practicable.

10.8        No Set-Off.   Except as set forth in any Ancillary Agreement or as otherwise mutually agreed to in writing by the Parties, neither Party nor any member of such Party’s Group shall have any right of set-off or other similar rights with respect to (a) any amounts received pursuant to this Agreement or any Ancillary Agreement; or (b) any other amounts claimed to be owed to the other Party or any member of its Group arising out of this Agreement or any Ancillary Agreement.

10.9        Publicity.   Prior to the Effective Time, each of SpinCo and Parent shall consult with each other prior to issuing any press releases or otherwise making public statements with respect to the Separation, the Distribution or any of the other transactions contemplated hereby or under any Ancillary Agreement and prior to making any filings with any Governmental Authority with respect thereto.

10.10      Expenses.   Except as otherwise expressly set forth in this Agreement or any Ancillary Agreement, or as otherwise agreed to in writing by the Parties, all costs and expenses incurred on or prior to the Effective Time in connection with the preparation, execution, delivery and implementation of this Agreement and any Ancillary Agreement, the Separation, the Form 10, the Information Statement, the plan of Separation and the Distribution and the consummation of the transactions contemplated hereby and thereby will be borne by Ingevity, and any such fees, costs and expenses incurred after the Effective Time shall be borne by the Party or its applicable Subsidiary incurring such fees, costs or expenses.

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10.11      Headings.   The article, section and paragraph headings contained in this Agreement and in the Ancillary Agreements are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement or any Ancillary Agreement.

10.12      Survival of Covenants.   Except as expressly set forth in this Agreement or any Ancillary Agreement, the covenants, representations and warranties contained in this Agreement and each Ancillary Agreement, and Liability for the breach of any obligations contained herein, shall survive the Separation and the Distribution and shall remain in full force and effect.

10.13      Waivers of Default.   Waiver by a Party of any default by the other Party of any provision of this Agreement or any Ancillary Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default, nor shall it prejudice the rights of the other Party. No failure or delay by a Party in exercising any right, power or privilege under this Agreement or any Ancillary Agreement shall operate as a waiver thereof, nor shall a single or partial exercise thereof prejudice any other or further exercise thereof or the exercise of any other right, power or privilege.

10.14      Specific Performance.   Subject to the provisions of Article VII, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement or any Ancillary Agreement, the Party or Parties who are, or are to be, thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief in respect of its or their rights under this Agreement or such Ancillary Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that the remedies at law for any breach or threatened breach, including monetary damages, are inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are waived by each of the Parties.

10.15      Amendments.   No provisions of this Agreement or any Ancillary Agreement shall be deemed waived, amended, supplemented or modified by a Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the Party against whom it is sought to enforce such waiver, amendment, supplement or modification.

10.16      Interpretation.   In this Agreement and any Ancillary Agreement, (a) words in the singular shall be deemed to include the plural and vice versa and words of one gender shall be deemed to include the other genders as the context requires; (b) the terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement (or the applicable Ancillary Agreement) as a whole (including all of the Schedules, Exhibits and Appendices hereto and thereto) and not to any particular provision of this Agreement (or such Ancillary Agreement); (c) Article, Section, Schedule, Exhibit and Appendix references are to the Articles, Sections, Schedules, Exhibits and Appendices of or to this Agreement (or the applicable Ancillary Agreement) unless otherwise specified; (d) unless otherwise stated, all references to any agreement shall be deemed to include the exhibits, schedules and annexes to such agreement; (e) the word “including” and words of similar import

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when used in this Agreement (or the applicable Ancillary Agreement) shall mean “including, without limitation,” unless otherwise specified; (f) the word “or” shall not be exclusive; (g) unless otherwise specified in a particular case, the word “days” refers to calendar days; (h) references to “business day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions are generally authorized or required by law to close in the United States or Charleston, South Carolina; (i) references herein to this Agreement or any other agreement contemplated herein shall be deemed to refer to this Agreement or such other agreement as of the date on which it is executed and as it may be amended, modified or supplemented thereafter, unless otherwise specified; and (j) unless expressly stated to the contrary in this Agreement or in any Ancillary Agreement, all references to “the date hereof,” “the date of this Agreement,” “hereby” and “hereupon” and words of similar import shall all be references to ______, 2016.

10.17      Limitations of Liability.   Notwithstanding anything in this Agreement to the contrary, neither SpinCo or any member of the SpinCo Group, on the one hand, nor Parent or any member of the Parent Group, on the other hand, shall be liable under this Agreement to the other for any indirect, punitive, exemplary, remote, speculative or similar damages in excess of compensatory damages of the other arising in connection with the transactions contemplated hereby (other than any such Liability with respect to a Third-Party Claim).

10.18      Performance.   Parent will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any Ancillary Agreement to be performed by any member of the Parent Group. SpinCo will cause to be performed, and hereby guarantees the performance of, all actions, agreements and obligations set forth in this Agreement or in any Ancillary Agreement to be performed by any member of the SpinCo Group. Each Party (including its permitted successors and assigns) further agrees that it will (a) give timely notice of the terms, conditions and continuing obligations contained in this Agreement and any applicable Ancillary Agreement to all of the other members of its Group and (b) cause all of the other members of its Group not to take any action or fail to take any such action inconsistent with such Party’s obligations under this Agreement, any Ancillary Agreement or the transactions contemplated hereby or thereby.

10.19      Mutual Drafting.   This Agreement and the Ancillary Agreements shall be deemed to be the joint work product of the Parties and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable.

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IN WITNESS WHEREOF, the Parties have caused this Separation and Distribution Agreement to be executed by their duly authorized representatives.

WESTROCK COMPANY
By:
	Name:
	Title:
INGEVITY CORPORATION
By:
	Name:
	Title:

[Signature Page to Separation and Distribution Agreement]

EX-10.2

Exhibit 10.2

FORM OF TRANSITION SERVICES AGREEMENT

This TRANSITION SERVICES AGREEMENT, dated as of _______, 2016 (this “Agreement”), is by and between WestRock Company, a Delaware corporation (“Provider”), and Ingevity Corporation, a Delaware corporation (“SpinCo”).

R E C I T A L S:

WHEREAS, the board of directors of Provider (the “Provider Board”) has determined that it is in the best interests of Provider and its stockholders to create a new publicly traded company that shall operate the SpinCo Business;

WHEREAS, in furtherance of the foregoing, the Provider Board has determined that it is appropriate and desirable to separate the SpinCo Business from the Provider Business (the “Separation”) and, following the Separation, make a distribution, on a pro rata basis, to holders of Provider Shares on the Record Date of all the outstanding SpinCo Shares owned by Provider (the “Distribution”);

WHEREAS, to effectuate the Separation and the Distribution, Provider and SpinCo have entered into a Separation and Distribution Agreement, dated as of _______, 2016 (the “Separation and Distribution Agreement”); and

WHEREAS, to facilitate and provide for an orderly transition in connection with the Separation and the Distribution, the Parties desire to enter into this Agreement to set forth the terms and conditions pursuant to which Provider shall provide Services to SpinCo for a transitional period.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

Article I
DEFINITIONS

Section 1.01.         Definitions.      For purposes of this Agreement, the following terms shall have the following meanings:

“Action” shall mean any demand, action, claim, dispute, suit, countersuit, arbitration, inquiry, subpoena, proceeding or investigation of any nature (whether criminal, civil, legislative, administrative, regulatory, prosecutorial or otherwise) by or before any federal, state, local, foreign or international Governmental Authority or any arbitration or mediation tribunal.

“Additional Service” has the meaning set forth in Section 2.02(b).

“Affiliate” has the meaning set forth in the Separation and Distribution Agreement.

“Agreement” has the meaning set forth in the Preamble.

“Ancillary Agreements” has the meaning set forth in the Separation and Distribution Agreement.

“Charge” and “Charges” have the meaning set forth in Section 2.03.

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Confidential Information” shall mean all Information that is either confidential or proprietary.

“Dispute” has the meaning set forth in Article VII of the Separation and Distribution Agreement.

“Distribution” has the meaning set forth in the Recitals.

“Distribution Date” shall mean the date of the consummation of the Distribution, which shall be determined by the Provider Board in its sole and absolute discretion.

“Effective Time” shall mean [●], New York City time, on the Distribution Date.

“Force Majeure” shall mean, with respect to a Party, an event beyond the control of such Party (or any Person acting on its behalf), which event (a) does not arise or result from the fault or negligence of such Party (or any Person acting on its behalf) and (b) by its nature would not reasonably have been foreseen by such Party (or such Person), or, if it would reasonably have been foreseen, was unavoidable, and includes acts of God, acts of civil or military authority, embargoes, epidemics, war (whether declared or not), acts of terror or sabotage, riots, insurrections, national or regional emergencies, fires, explosions, earthquakes, floods, unusually severe weather conditions, strikes, labor problems or unavailability of parts, technological disruptions, or, in the case of computer systems, any failure in electrical, telecommunications or air conditioning equipment or systems. Notwithstanding the foregoing, the receipt by a Party of an unsolicited takeover offer or other acquisition proposal, even if unforeseen or unavoidable, and such Party’s response thereto, shall not be deemed an event of Force Majeure.

“Governmental Authority” shall mean any nation or government, any state, municipality or other political subdivision thereof, and any entity, body, agency, commission, department, board, bureau, court, tribunal or other instrumentality, whether federal, state, local, domestic, foreign or multinational, exercising executive, legislative, judicial, regulatory, administrative or other similar functions of, or pertaining to, government and any executive official thereof.

“Information” shall mean information, whether or not patentable or copyrightable, in written, oral, electronic or other tangible or intangible forms, stored in any medium, including studies, reports, records, books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how, techniques, designs, specifications, drawings, blueprints, diagrams, models, prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes, computer programs or other software, marketing plans, customer names, communications by or to attorneys (including attorney-client privileged communications), memos and other materials prepared by attorneys or under their direction (including attorney work product), and other technical, financial, employee or business information or data.

“Interest Payment” has the meaning set forth in Section 4.02.

“Law” shall mean any national, supranational, federal, state, provincial, local or similar law (including common law), statute, code, order, ordinance, rule, regulation, treaty (including any income tax treaty), license, permit, authorization, approval, consent, decree, injunction, binding judicial or administrative interpretation or other requirement, in each case, enacted, promulgated, issued or entered by a Governmental Authority.

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“Level of Service” has the meaning set forth in Section 2.02(b).

“Liabilities” shall mean all debts, guarantees, assurances, commitments, liabilities, responsibilities, Losses, remediation, deficiencies, damages, fines, penalties, settlements, sanctions, costs, expenses, interest and obligations of any nature or kind, whether accrued or fixed, absolute or contingent, matured or unmatured, accrued or not accrued, asserted or unasserted, liquidated or unliquidated, foreseen or unforeseen, known or unknown, reserved or unreserved, or determined or determinable, including those arising under any Law, claim (including any Third-Party Claim), demand, Action, or order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with any Governmental Authority or arbitration tribunal, and those arising under any contract, agreement, obligation, indenture, instrument, lease, promise, arrangement, release, warranty, commitment or undertaking, or any fines, damages or equitable relief that is imposed, in each case, including all costs and expenses relating thereto.

“Losses” shall mean actual losses (including any diminution in value), costs, damages, penalties and expenses (including legal and accounting fees and expenses and costs of investigation and litigation), whether or not involving a Third-Party Claim.

“Minimum Service Period” shall mean the period commencing on the Distribution Date and ending thirty (30) days after the Distribution Date.

“Parties” shall mean the parties to this Agreement.

“Person” shall mean an individual, a general or limited partnership, a corporation, a trust, a joint venture, an unincorporated organization, a limited liability entity, any other entity and any Governmental Authority.

“Provider” has the meaning set forth in the Preamble.

“Provider Board” has the meaning set forth in the Recitals.

“Provider Business” shall mean “Parent Business” as defined in the Separation and Distribution Agreement.

“Provider Indemnitees” has the meaning set forth in Section 7.03.

“Provider Shares” shall mean the common shares, $0.01 par value, of Provider.

“Record Date” shall mean the close of business on the date to be determined by the Provider Board as the record date for determining holders of Provider Shares entitled to receive SpinCo Shares pursuant to the Distribution.

“Representatives” shall mean, with respect to any Person, any of such Person’s directors, officers, employees, agents, consultants, advisors, accountants, attorneys or other representatives.

“Separation” has the meaning set forth in the Recitals.

“Separation and Distribution Agreement” has the meaning set forth in the Recitals.

“Service Baseline Period” has the meaning set forth in Section 2.02(b).

“Service Period” means, with respect to any Service, the period commencing on the Distribution Date and ending on the earlier of (a) the date that a Party terminates the provision of

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such Service pursuant to Section 5.02 and (b) the date that is the two-year anniversary of the Distribution Date.

“Services” has the meaning set forth in Section 2.01.

“SpinCo” has the meaning set forth in the Preamble.

“SpinCo Business” has the meaning set forth in the Separation and Distribution Agreement. “SpinCo Shares” shall mean the shares of common stock, par value $0.01 per share, of SpinCo.

“Subsidiary” shall mean, with respect to any Person, any corporation, limited liability company, joint venture or partnership of which such Person (a) beneficially owns, either directly or indirectly, more than 50% of (i) the total combined voting power of all classes of voting securities, (ii) the total combined equity interests or (iii) the capital or profit interests, in the case of a partnership, or (b) otherwise has the power to vote, either directly or indirectly, sufficient securities to elect a majority of the board of directors or similar governing body.

“Tax” has the meaning set forth in the Tax Matters Agreement.

“Tax Matters Agreement” shall mean the Tax Matters Agreement to be entered into by and between Provider and SpinCo or their respective Subsidiaries in connection with the Separation, the Distribution or the other transactions contemplated by the Separation and Distribution Agreement.

“Taxing Authority” has the meaning set forth in the Tax Matters Agreement.

“Termination Charges” shall mean, with respect to the termination of any Service pursuant to Section 5.02(a)(i), the sum of (a) any and all costs, fees and expenses (other than any severance or retention costs) payable by Provider to a Third Party principally because of the early termination of such Service; provided, however, that Provider shall use commercially reasonable efforts to minimize any costs, fees or expenses payable to any Third Party in connection with such early termination of such Service; and (b) any additional severance and retention costs, if any, because of the early termination of such Service that Provider incurs to employees who had been retained primarily to provide such terminated Service (it being agreed that the costs set forth in this clause (b) shall only be the amount, if any, in excess of the severance and retention costs that Provider would have paid to such employees if the Service had been provided for the full period during which such Service would have been provided hereunder but for such early termination).

“Third Party” shall mean any Person other than the Parties or any of their Affiliates.

“Third-Party Claim” shall mean any Action commenced by any Third Party against any Party or any of its Affiliates.

“Transition Committee” has the meaning set forth in the Separation and Distribution Agreement.

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Article II
SERVICES

Section 2.01.        Services.      Commencing as of the Effective Time, Provider agrees to provide, or to cause one or more of its Subsidiaries to provide, to SpinCo, or any Subsidiary of SpinCo, the applicable services (the “Services”) set forth on Schedule 1 hereto.

Section 2.02.        Performance of Services.

(a)          Nothing in this Agreement shall require Provider to perform or cause to be performed any Service to the extent that the manner of such performance would constitute a violation of any applicable Law or violate, conflict with, result in the loss of any benefit under, or increase the costs under any existing contract or agreement with a Third Party. If Provider is or becomes aware of any such potential violation, conflict, loss of benefit or increased cost on the part of Provider or any of its Affiliates, Provider shall use commercially reasonable efforts to promptly advise SpinCo of such potential violation, conflict, loss of benefit or increased cost, and Provider and SpinCo will mutually seek an alternative that addresses such potential violation, conflict, loss of benefit or increased cost. The Parties agree to cooperate in good faith and use commercially reasonable efforts to obtain any necessary Third Party consents required under any existing contract or agreement with a Third Party to allow Provider to perform, or cause to be performed, all Services hereunder in accordance with the standards set forth in this Section 2.02. Unless otherwise agreed in writing by the Parties, all reasonable out-of-pocket costs and expenses (if any) incurred by Provider or any of its Subsidiaries in connection with obtaining any such Third Party consent that is required to allow Provider to perform or cause to be performed such Services shall be borne by SpinCo. If, with respect to a Service, the Parties, despite the use of such commercially reasonable efforts, are unable to obtain a required Third Party consent, or the performance of such Service by Provider would constitute a violation of any applicable Law or violate, conflict with, result in the loss of any benefit under or increase the costs under any existing contract or agreement with a Third Party, then Provider shall determine and adopt, subject to SpinCo’s prior written approval, a commercially reasonable alternative to the affected Services; provided, however, that if no such commercially reasonable alternative is available, Provider shall have no obligation whatsoever to perform or cause to be performed such Service.

(b)          Provider shall perform or to cause to be performed such Service with substantially the same degree of care, skill and diligence with which Provider performed analogous services for Provider or its applicable functional group or Subsidiary (collectively referred to as the “Level of Service”) consistent with past practices during the six (6) months prior to the Effective Time (the “Service Baseline Period”), including without limitation with respect to the quality and timeliness of such Services; provided that the Level of Service shall not be deemed to be a guaranty of any particular result. If SpinCo requests that Provider perform or cause to be performed any Service that exceeds the Level of Service during the Service Baseline Period, then the Parties shall cooperate and act in good faith to determine whether Provider is willing to provide such requested higher Level of Service (and, if so, the terms therefor). Furthermore, SpinCo may request additional transition services to the extent such transition services reasonably relate to the transition of the SpinCo Business (each an “Additional Service”). If the Parties determine that Provider shall provide the requested higher Level of Service or the requested

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Additional Service, then such higher Level of Service or Additional Service shall be documented in a written agreement signed by the Parties. Each amended section of Schedule 1 hereto, as agreed to in writing by the Parties, shall be deemed part of this Agreement as of the date of such written agreement and the Level of Service increases or Additional Services set forth in such written agreement shall be deemed a part of the “Services” provided under this Agreement, in each case subject to the terms and conditions of this Agreement. If there is a conflict between the immediate needs of Provider and those of SpinCo as to the use of or access to a particular Service, which conflict cannot reasonably be avoided, Provider shall have the right, in its sole discretion, to establish reasonable priorities, at particular times and under particular circumstances, as between Provider and SpinCo. In any such situation, Provider shall provide notice to SpinCo of any changes at the earliest practical opportunity.

(c)          (i) Neither Provider nor any of its Subsidiaries shall be required to perform or to cause to be performed any of the Services for the benefit of any Third Party or any other Person other than SpinCo and its Subsidiaries, and (ii) EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 2.02 OR 7.04, EACH PARTY ACKNOWLEDGES AND AGREES THAT ALL SERVICES ARE PROVIDED ON AN “AS-IS” BASIS, THAT SPINCO ASSUMES ALL RISK AND LIABILITY ARISING FROM OR RELATING TO ITS USE OF AND RELIANCE UPON THE SERVICES, AND THAT PROVIDER MAKES NO OTHER REPRESENTATIONS OR GRANTS ANY WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, WITH RESPECT TO THE SERVICES. EACH PARTY SPECIFICALLY DISCLAIMS ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

(d)          Each Party shall be responsible for its own compliance with any and all Laws applicable to its performance under this Agreement. No Party shall knowingly take any action in violation of any such applicable Law that results in Liability being imposed on the other Party.

(e)          Provider shall not be required to incur capital expenses or employ additional personnel in order to provide the Services (other than employing additional personnel in the future to replace exiting personnel providing the Services, if such replacement personnel are necessary in order for Provider to fulfill its obligations under this Agreement). Furthermore, Provider shall not be obligated to provide Services hereunder that are greater in nature and scope than the Services historically rendered by Provider in the operation of SpinCo’s business by Provider prior to the date hereof, except as may be specifically provided on the Schedules hereto or as otherwise agreed to in writing by Provider and SpinCo. Subject to the Level of Service, management of and control over the provision of the Services (including without limitation the determination or designation at any time of the employees or other resources of Provider to be used in connection with the Services) shall reside solely with Provider.

Section 2.03.        Charges for Services.      SpinCo shall pay Provider a fee (either one-time or recurring) for the Services (or category of Services, as applicable) (each fee constituting a “Charge” and, collectively, “Charges”), which Charges are based upon the cost of providing such

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Services and are set forth on Schedule A hereto. Except to the extent provided otherwise in Schedule A, Provider shall be solely responsible for the payment of out-of-pocket costs and expenses incurred by Provider or any of its Subsidiaries in connection with providing the Services, including all compensation for Provider’s personnel assigned to perform Services under this Agreement, and shall be responsible for workers’ compensation insurance, unemployment insurance, severance and other termination costs, employment taxes and all other employer payment obligations relating to Provider’s personnel, except to the extent SpinCo is responsible for Termination Charges pursuant to Section 5.02(a)(i). During the term of this Agreement, the amount of a Charge for any Service may be modified to the extent of (a) any adjustments mutually agreed to by the Parties, (b) any adjustments due to a change in Level of Service or Additional Service requested by SpinCo and agreed upon by Provider, and (c) any adjustment in the rates or charges imposed by any Third Party provider that is providing Services. Together with any invoice for Charges, Provider shall provide SpinCo with reasonable documentation, including any additional documentation reasonably requested by SpinCo to the extent that such documentation is in Provider’s or its Subsidiaries’ possession or control, to support the calculation of such Charges.

Section 2.04.        Changes in the Performance of Services.      Subject to the performance standards for Services set forth in Sections 2.02(a) and 2.02(b), Provider may make changes from time to time in the manner of performing the Services if Provider is making similar changes in performing analogous services for itself and if, to the extent practicable, Provider furnishes to SpinCo reasonable prior written notice (in content and timing) of such changes. Except as otherwise provided in Section 2.03, no such change shall materially adversely affect the timeliness or quality of, or the Charges for, the applicable Service and Provider shall be solely responsible for any increase in costs and expenses required in order for SpinCo to continue to receive and utilize the applicable Services in the same manner as SpinCo was receiving and utilizing such Service prior to such change. Upon request, SpinCo shall provide Provider with reasonable documentation, including any additional documentation reasonably requested by Provider to the extent such documentation is in SpinCo’s or its Subsidiaries’ possession or control, to support the calculation of such increase in costs and expenses.

Section 2.05.        Transitional Nature of Services.      The Parties acknowledge the transitional nature of the Services and agree to cooperate in good faith and to use commercially reasonable efforts to effectuate a smooth transition of the Services from Provider to SpinCo (or its designee). Accordingly, subject to Article V, Seller will use commercially reasonable efforts to as promptly as practicable following the date hereof make the transition of each Service to its own internal organization or to obtain alternative Service from Third Parties on or prior to the last day of the applicable Service Period.

Section 2.06.        Subcontracting.      Provider may hire or engage one or more Third Parties to perform any or all of its obligations under this Agreement; provided, however, that (a) Provider shall use the same degree of care (but at least reasonable care) in selecting each such Third Party as it would if such Third Party was being retained to provide similar services to Provider and (b) notwithstanding anything to the contrary in this Agreement but subject to Article VII, in no event shall Provider or any of its Affiliates be liable for any Liability related to, arising out of or connected with any Service provided by such Third Party. Subject to the confidentiality provisions set forth in Article VI, each Party shall, and shall cause their respective Affiliates to, provide,

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upon ten (10) business days’ prior written notice from the other Party, any Information within such Party’s or its Affiliates’ possession that the requesting Party reasonably requests in connection with any Services being provided to such requesting Party by a Third Party, including any applicable invoices, agreements documenting the arrangements between such Third Party and Provider and other supporting documentation; provided, further, however, that each Party shall make no more than one such request during any calendar quarter.

Article III
OTHER ARRANGEMENTS

Section 3.01.        Access.

(a)          Each of Provider and SpinCo shall, and shall cause its Subsidiaries to, allow the other Party and its Subsidiaries and their respective Representatives reasonable access to the facilities of such Party and its Subsidiaries that is necessary for the Parties to fulfill their obligations under this Agreement.

(b)          In addition to the foregoing right of access, Provider shall, and shall cause its Subsidiaries to, afford SpinCo, its Subsidiaries and their respective Representatives, upon reasonable advance written notice, reasonable access during normal business hours to the facilities, Information, systems, infrastructure and personnel of Provider and its Subsidiaries as reasonably necessary for SpinCo to verify the adequacy of internal controls over information technology, reporting of financial data and related processes employed in connection with the Services being provided by Provider or its Subsidiaries, including in connection with verifying compliance with Section 404 of the Sarbanes-Oxley Act of 2002; provided that (i) such access shall not unreasonably interfere with any of the business or operations of Provider or any of its Subsidiaries and (ii) in the event that Provider determines that providing such access could be commercially detrimental, violate any applicable Law or agreement or waive any attorney-client privilege, then the Parties shall use commercially reasonable efforts to permit such access in a manner that avoids each of such harm and consequence. SpinCo agrees that all of its and its Subsidiaries’ employees shall, and that it shall use commercially reasonable efforts to cause its Representatives’ employees to, when on the property of Provider or its Subsidiaries, or when given access to any facilities, Information, systems, infrastructure or personnel of Provider or its Subsidiaries, conform to the policies and procedures of Provider and its Subsidiaries, as applicable, concerning health, safety and conduct, and computer hardware, software and data security, which are made known or provided to SpinCo from time to time.

Article IV
BILLING; TAXES

Section 4.01.        Procedure.      Charges for the Services shall be charged to and payable by SpinCo. Amounts payable pursuant to this Agreement shall be paid by wire transfer (or such other method of payment as may be agreed between the Parties from time to time) to Provider (as directed by Provider), on a monthly basis in the case of recurring fees, which amounts shall be due within thirty (30) days of SpinCo’s receipt of each such invoice, including reasonable documentation pursuant to Section 2.03. All amounts due and payable hereunder shall be invoiced and paid in U.S. dollars.

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Section 4.02.        Late Payments.      Charges not paid when due pursuant to this Agreement (and any amounts billed or otherwise invoiced or demanded and properly payable that are not paid within thirty (30) days of the receipt of such bill, invoice or other demand) shall accrue interest at a rate of 12% per annum (or such lesser amount as shall be the maximum amount permitted by Law) (the “Interest Payment”).

Section 4.03.        Taxes.      Without limiting any provisions of this Agreement, SpinCo shall bear any and all Taxes and other similar charges (and any related interest and penalties) imposed on, or payable with respect to, any fees or charges, including any Charges, payable by it pursuant to this Agreement, including all sales, use, value-added, and similar Taxes, but excluding Taxes based on Provider’s net income and any excise taxes imposed under Section 4981 of the Code. Notwithstanding anything to the contrary in the previous sentence or elsewhere in this Agreement, SpinCo shall be entitled to withhold from any payments to Provider any such Taxes that SpinCo is required by applicable Law to withhold and shall pay such Taxes to the applicable Taxing Authority.

Section 4.04.        No Set-Off.      Except as mutually agreed to in writing by Provider and SpinCo, SpinCo shall not have any right of set-off or other similar rights with respect to (a) any amounts received pursuant to this Agreement or (b) any other amounts claimed to be owed to Provider or any of its Subsidiaries arising out of this Agreement.

Article V
TERM AND TERMINATION

Section 5.01.        Term.      This Agreement shall commence at the Effective Time and shall terminate upon the earlier to occur of (a) the last date on which Provider is obligated to provide any Service Party in accordance with the terms of this Agreement; (b) the mutual written agreement of the Parties to terminate this Agreement in its entirety; and (c) the date that is the [two-year]anniversary of the Distribution Date. Unless otherwise terminated pursuant to Section 5.02, this Agreement shall terminate with respect to each Service as of the close of business on the last day of the Service Period for such Service. To the extent that Provider’s ability to provide a Service is dependent on the continuation of a specified Service, Provider’s obligation to provide such dependent Service shall terminate automatically with the termination of such supporting Service.

Section 5.02.        Early Termination.

(a)          Without prejudice to SpinCo’s rights with respect to Force Majeure, SpinCo may from time to time terminate this Agreement with respect to the entirety of any individual Service but not a portion thereof:

(i)          subsequent to the end of the Minimum Service Period, for any reason or no reason, upon the giving of at least sixty (60) days’ prior written notice to Provider (it being agreed that such notice may not be delivered prior to the end of the Minimum Service Period); provided, however, that any such termination (x) may only be effective as of the last day of a month and (y) shall be subject to the obligation to pay any applicable Termination Charges pursuant to Section 5.04; or

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(ii)         if Provider has failed to perform any of its material obligations under this Agreement with respect to such Service, and such failure shall continue to be uncured for a period of at least thirty (30) days after receipt by Provider of written notice of such failure from SpinCo; provided, however, that any such termination may only be effective as of the last day of a month; and provided, further, that SpinCo shall not be entitled to terminate this Agreement with respect to the applicable Service if, as of the end of such period, there remains a good-faith Dispute between the Parties (undertaken in accordance with the terms of Article VII of the Separation and Distribution Agreement) as to whether Provider has cured the applicable failure to so perform.

(b)          Provider may terminate this Agreement with respect to any individual Service, but not a portion thereof, at any time upon prior written notice to SpinCo if SpinCo has failed to perform any of its material obligations under this Agreement relating to such Service, including making payment of Charges for such Service when due, and such failure shall continue to be uncured for a period of at least thirty (30) days after receipt by SpinCo of a written notice of such failure from Provider; provided, however, that any such termination may only be effective as of the last day of a month; and provided, further, that Provider shall not be entitled to terminate this Agreement with respect to the applicable Service if, as of the end of such period, there remains a good-faith Dispute between the Parties (undertaken in accordance with the terms of Article VII of the Separation and Distribution Agreement) as to whether SpinCo has cured the applicable failure to so perform. Schedule 1 hereto shall be updated to reflect any terminated Service.

Section 5.03.        Interdependencies.      The Parties acknowledge and agree that (a) there may be interdependencies among the Services being provided under this Agreement; (b) upon the request of either Party, the Parties shall cooperate and act in good faith to determine whether (i) any such interdependencies exist with respect to the particular Service that a Party is seeking to terminate pursuant to Section 5.02 and (ii) in the case of such termination, Provider’s ability to provide a particular Service in accordance with this Agreement would be materially and adversely affected by such termination of another Service; and (c) in the event that the Parties have determined that such interdependencies exist (and, in the case of such termination that Provider’s ability to provide a particular Service in accordance with this Agreement would be materially and adversely affected by such termination), the Parties shall negotiate in good faith to amend Schedule 1 hereto with respect to such termination of such impacted Service, which amendment shall be consistent with the terms of comparable Services.

Section 5.04.        Effect of Termination.      Upon the termination of any Service pursuant to this Agreement, Provider shall have no further obligation to provide the terminated Service, and SpinCo shall have no obligation to pay any future Charges relating to such Service; provided, however, that SpinCo shall remain obligated to Provider for (a) the Charges owed and payable in respect of Services provided prior to the effective date of termination for such Service, and (b) any applicable Termination Charges (which, in the case of each of clauses (a) and (b), shall be payable only in the event that SpinCo terminates any Service pursuant to Section 5.02(a)(i)). In connection with the termination of any Service, the provisions of this Agreement not relating solely to such terminated Service shall survive any such termination, and in connection with a termination of this Agreement, Article I, this Article V, Article VII and Article IX, all confidentiality obligations under this Agreement and Liability for all due and unpaid Charges, and Termination Charges shall continue to survive indefinitely.

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Section 5.05.        Information Transmission.      Provider, on behalf of itself and its Subsidiaries, shall use commercially reasonable efforts to provide or make available, or cause to be provided or made available, to SpinCo, in accordance with Section [•] of the Separation and Distribution Agreement, any Information received or computed by Provider for the benefit of SpinCo concerning the relevant Service during the Service Period; provided, however, that, except as otherwise agreed to in writing by the Parties (a) Provider shall not have any obligation to provide, or cause to be provided, Information in any non-standard format, (b) Provider and its Subsidiaries shall be reimbursed for their reasonable costs in accordance with Section [•] of the Separation and Distribution Agreement for creating, gathering, copying, transporting and otherwise providing such Information, and (c) Provider shall use commercially reasonable efforts to maintain any such Information in accordance with Section [•] of the Separation and Distribution Agreement.

Article VI
CONFIDENTIALITY; PROTECTIVE ARRANGEMENTS

Section 6.01.        Provider and SpinCo Obligations.      Subject to Section 6.04, until the five (5)-year anniversary of the date of the termination of this Agreement in its entirety, each of Provider and SpinCo, on behalf of itself and each of its Subsidiaries, agrees to hold, and to cause its respective Representatives to hold, in strict confidence, with at least the same degree of care that applies to Provider’s Confidential Information pursuant to policies in effect as of the Effective Time, all Confidential Information concerning the other Party or its Subsidiaries or their respective businesses that is either in its possession (including Confidential Information in its possession prior to the date hereof) or furnished by such other Party or such other Party’s Subsidiaries or their respective Representatives at any time pursuant to this Agreement, and shall not use any such Confidential Information other than for such purposes as may be expressly permitted hereunder, except, in each case, to the extent that such Confidential Information has been (a) in the public domain or generally available to the public, other than as a result of a disclosure by such Party or any of its Subsidiaries or any of their respective Representatives in violation of this Agreement; (b) later lawfully acquired from other sources by such Party or any of its Subsidiaries, which sources are not themselves bound by a confidentiality obligation or other contractual, legal or fiduciary obligation of confidentiality with respect to such Confidential Information; or (c) independently developed or generated without reference to or use of the Confidential Information of the other Party or any of its Subsidiaries. If any Confidential Information of a Party or any of its Subsidiaries is disclosed to the other Party or any of its Subsidiaries in connection with providing the Services, then such disclosed Confidential Information shall be used only as required to perform such Services.

Section 6.02.        No Release; Return or Destruction.      Each Party agrees (a) not to release or disclose, or permit to be released or disclosed, any Confidential Information of the other Party addressed in Section 6.01 to any other Person, except its Representatives who need to know such Confidential Information in their capacities as such (whom shall be advised of their obligations hereunder with respect to such Confidential Information) and except in compliance with Section 6.04, and (b) to use commercially reasonable efforts to maintain such Confidential Information in accordance with Section [•] of the Separation and Distribution Agreement. Without limiting the foregoing, when any such Confidential Information is no longer needed for the purposes contemplated by the Separation and Distribution Agreement, this Agreement or any other

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Ancillary Agreements, each Party will promptly after request of the other Party either return to the other Party all such Confidential Information in a tangible form (including all copies thereof and all notes, extracts or summaries based thereon) or notify the other Party in writing that it has destroyed such Information (and such copies thereof and such notes, extracts or summaries based thereon).

Section 6.03.        Privacy and Data Protection Laws.      Each Party shall comply with all applicable state, federal and foreign privacy and data protection Laws that are or that may in the future be applicable to the provision of the Services under this Agreement.

Section 6.04.        Protective Arrangements.      In the event that a Party or any of its Subsidiaries either determines on the advice of its counsel that it is required to disclose any Information pursuant to applicable Law or receives any request or demand under lawful process or from any Governmental Authority to disclose or provide Information of the other Party (or any of its Subsidiaries) that is subject to the confidentiality provisions hereof, such Party shall notify the other Party (to the extent legally permitted) as promptly as practicable under the circumstances prior to disclosing or providing such Information and shall cooperate, at the expense of the other Party, in seeking any appropriate protective order requested by the other Party. In the event that such other Party fails to receive such appropriate protective order in a timely manner and the Party receiving the request or demand reasonably determines that its failure to disclose or provide such Information shall actually prejudice the Party receiving the request or demand, then the Party that received such request or demand may thereafter disclose or provide Information to the extent required by such Law (as so advised by its counsel) or by lawful process of such Governmental Authority, and the disclosing Party shall promptly provide the other Party with a copy of the Information so disclosed, in the same form and format so disclosed, together with a list of all Persons to whom such Information was disclosed, in each case to the extent legally permitted.

Article VII
LIMITED LIABILITY AND INDEMNIFICATION

Section 7.01.       Limitations on Liability.

(a)          SUBJECT TO the obligation to re-perform a Service pursuant TO SECTION 7.02, THE LIABILITIES OF PROVIDER AND ITS SUBSIDIARIES AND THEIR RESPECTIVE REPRESENTATIVES, COLLECTIVELY, UNDER THIS AGREEMENT FOR ANY ACT OR FAILURE TO ACT IN CONNECTION HEREWITH (INCLUDING THE PERFORMANCE OR BREACH OF THIS AGREEMENT), OR FROM THE SALE, DELIVERY, PROVISION OR USE OF ANY SERVICES PROVIDED UNDER OR CONTEMPLATED BY THIS AGREEMENT, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR OTHERWISE, SHALL NOT EXCEED (X) IF THE SERVICES WERE PERFORMED BY PROVIDER FOR ONE YEAR OR LESS, THE AGGREGATE CHARGES PAID TO PROVIDER BY SPINCO PURSUANT TO THIS AGREEMENT OR (Y) IF THE SERVICES WERE PERFORMED BY SUCH PROVIDER FOR MORE THAN ONE YEAR, THE AGGREGATE CHARGES PAID TO PROVIDER BY SPINCO PURSUANT TO THIS AGREEMENT DURING THE TWELVE (12)-MONTH PERIOD IMMEDIATELY PRECEDING THE EVENT GIVING RISE TO SUCH LIABILITIES.

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(b)          IN NO EVENT SHALL EITHER PARTY, ITS SUBSIDIARIES OR THEIR RESPECTIVE REPRESENTATIVES BE LIABLE TO THE OTHER PARTY FOR ANY LOSS OF REVENUE OR INCOME, LOSS OF BUSINESS REPUTATION OR OPPORTUNITY, DIMINUTION IN VALUE, DAMAGES BASED ON ANY TYPE OF MULTIPLE OR ANY INDIRECT, PUNITIVE, EXEMPLARY, REMOTE, SPECIAL, INCIDENTAL, CONSEQUENTIAL, SPECULATIVE OR SIMILAR DAMAGES IN EXCESS OF COMPENSATORY DAMAGES OF THE OTHER PARTY IN CONNECTION WITH THE PERFORMANCE OF THIS AGREEMENT (OTHER THAN ANY SUCH LIABILITY OWING TO A THIRD PARTY WITH RESPECT TO A THIRD-PARTY CLAIM), AND EACH PARTY HEREBY WAIVES ON BEHALF OF ITSELF, ITS SUBSIDIARIES AND ITS REPRESENTATIVES ANY CLAIM FOR SUCH DAMAGES, WHETHER ARISING IN CONTRACT, TORT OR OTHERWISE.

(c)          Except for the obligation to re-perform a Service pursuant to Section 7.02 and as otherwise provided in Section 7.04, Provider shall not be liable for any Liabilities (including, without limitation, any Liabilities sustained by SpinCo in respect of a Third Party Claim) relating to, arising out of or resulting from the furnishing of or failure to furnish the Services, whether arising out of breach of warranty, strict liability, tort, contract or otherwise, other than any Liability OWING TO A THIRD PARTY with respect to a Third Party Claim resulting from Provider’s willful misconduct or fraud with respect to the furnishing of or failure to furnish the Services hereunder.

(d)          The limitations in Section 7.01(a) and Section 7.01(b) shall not apply in respect of any Liability arising out of or in connection with (i) either Party’s Liability for breaches of confidentiality under Article VI or (ii) willful misconduct or fraud of or by the Party to be charged.

Section 7.02.        Obligation to Re-Perform; Liabilities.     In the event of any breach of this Agreement by Provider with respect to the provision of any Services (with respect to which Provider can reasonably be expected to re-perform in a commercially reasonable manner), Provider shall (a) promptly correct in all material respects such error, defect or breach or re-perform in all material respects such Services at the request of SpinCo and at the sole cost and expense of Provider and (b) subject to the limitations set forth in Section 7.01, reimburse SpinCo and its Subsidiaries and Representatives for Liabilities attributable to such breach by Provider. Except as set forth in Section 7.04, the remedy set forth in this Section 7.02 shall be the sole and exclusive remedy of SpinCo for any such breach of this Agreement; provided, however, that the foregoing shall not prohibit SpinCo from exercising its right to terminate this Agreement in accordance with the provisions of Section 5.02(a)(ii). Any request for re-performance in accordance with this Section 7.02 by SpinCo must be in writing and specify in reasonable detail the particular error, defect or breach, and such request must be made no more than forty-five (45) days from the date on which such breach occurred.

Section 7.03.        SpinCo Indemnity.      SpinCo shall indemnify, defend and hold harmless Provider, its Subsidiaries and each of their respective Representatives, and each of the successors

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and assigns of any of the foregoing (collectively, the “Provider Indemnitees”), from and against any and all Liabilities owing to Third Parties with respect to Third Party Claims relating to, arising out of or resulting from Provider’s furnishing or failing to furnish the Services provided for in this Agreement, other than such Liabilities that relate to, arise out of or result from the willful misconduct or fraud of any Provider Indemnitee with respect to the furnishing or failure to furnish the Services provided for in this Agreement. The indemnification obligations set forth herein are the exclusive indemnification obligations and the sole and exclusive remedy with respect to the matters addressed in this Section 7.03 and are in lieu of any other indemnification obligations of SpinCo (if any) under the Separation and Distribution Agreement or any other Ancillary Agreement with respect to the matters addressed herein.

Section 7.04.        Provider Indemnity.     Provider shall indemnify, defend and hold harmless SpinCo, its Subsidiaries and each of their respective Representatives, and each of the successors and assigns of any of the foregoing, from and against any and all Liabilities owing to Third Parties with respect to Third Party Claims relating to, arising out of or resulting from the furnishing of or failure to furnish the Services provided for in this Agreement, but only to the extent that such Liabilities relate to, arise out of or result from Provider’s willful misconduct or fraud with respect to the furnishing or failure to furnish the Services provided for in this Agreement. The indemnification obligations set forth herein are the exclusive indemnification obligations and the sole and exclusive remedy with respect to the matters addressed in this Section 7.04 and are in lieu of any other indemnification obligations of Provider (if any) under the Separation and Distribution Agreement or any other Ancillary Agreement, or fraud.

Section 7.05.        Indemnification Procedures.      The procedures for indemnification set forth in Sections [•] of the Separation and Distribution Agreement shall govern claims for indemnification under this Agreement.

Article VIII
TRANSITION COMMITTEE

Section 8.01.        Establishment.     Pursuant to the Separation and Distribution Agreement, a Transition Committee is to be established by Provider and SpinCo to, among other things, monitor and manage matters arising out of or relating in any way to this Agreement. Without limiting the generality of the foregoing, each Party shall cause each member of the Transition Committee who is an employee, agent or other Representative of such Party, to work in good faith to resolve any Dispute arising out of or relating in any way to this Agreement.

Section 8.02.        Dispute Resolution.      Provider and SpinCo shall attempt in good faith to resolve any Dispute arising out of or relating to this Agreement promptly by negotiation in accordance with Article VII of the Separation and Distribution Agreement.

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Article IX
MISCELLANEOUS

Section 9.01.        Mutual Cooperation.     Each Party shall, and shall cause its Subsidiaries to, cooperate with the other Party and its Subsidiaries in connection with the performance of the Services hereunder; provided, however, that such cooperation shall not unreasonably disrupt the normal operations of such Party or its Subsidiaries; and, provided, further, that this Section 9.01 shall not require such Party to incur any out-of-pocket costs or expenses unless and except as expressly provided in this Agreement or otherwise agreed to in writing by the Parties.

Section 9.02.        Further Assurances.     Each Party shall take, or cause to be taken, any and all reasonable actions, including the execution, acknowledgment, filing and delivery of any and all documents and instruments that any other Party may reasonably request to effect the intent and purpose of this Agreement and the transactions contemplated hereby.

Section 9.03.        Audit Assistance.     Each of the Parties and their respective Subsidiaries are or may be subject to regulation and audit by a Governmental Authority (including a Taxing Authority), standards organizations, customers or other parties to contracts with such Parties or their respective Subsidiaries under applicable Law, standards or contract provisions. If a Governmental Authority, standards organization, customer or other party to a contract with a Party or its Subsidiary exercises its right to examine or audit such Party’s or its Subsidiary’s books, records, documents or accounting practices and procedures pursuant to such applicable Law, standards or contract provisions, and such examination or audit relates to the Services, then the other Party shall provide, at the sole cost and expense of the requesting Party, all assistance reasonably requested by the Party that is subject to the examination or audit in responding to such examination or audits or requests for Information, to the extent that such assistance or

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Information is within the reasonable control of the cooperating Party and is related to the Services.

Section 9.04.        Title to Intellectual Property.     Except as expressly provided for under the terms of this Agreement or the Separation and Distribution Agreement, SpinCo acknowledges that it shall acquire no right, title or interest (including any license rights or rights of use) in any intellectual property that is owned or licensed by Provider or any of its Affiliates, by reason of the provision of the Services hereunder. SpinCo shall not remove or alter any copyright, trademark, confidentiality or other proprietary notices that appear on any intellectual property owned or licensed by Provider or any of its Affiliates, and SpinCo shall reproduce any such notices on any and all copies thereof. SpinCo shall not attempt to decompile, translate, reverse engineer or make excessive copies of any intellectual property owned or licensed by Provider or any of its Affiliates, and SpinCo shall promptly notify Provider of any such attempt, regardless of whether by SpinCo or any Third Party, of which SpinCo becomes aware.

Section 9.05.        Independent Contractors.     The Parties each acknowledge and agree that they are separate entities, each of which has entered into this Agreement for independent business reasons. The relationships of the Parties hereunder are those of independent contractors and nothing contained herein shall be deemed to create a joint venture, partnership or any other relationship between the Parties. Employees performing services hereunder do so on behalf of, under the direction of, and as employees of, Provider, and SpinCo shall have no right, power or authority to direct such employees.

Section 9.06.        Counterparts; Entire Agreement; Corporate Power.

(a)          This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party.

(b)          This Agreement, the Separation and Distribution Agreement and the Ancillary Agreements and the Exhibits, Schedules and appendices hereto and thereto contain the entire agreement between the Parties with respect to the subject matter hereof, supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Parties other than those set forth or referred to herein or therein.

(c)          Provider represents on behalf of itself and, to the extent applicable, each of its Subsidiaries, and SpinCo represents on behalf of itself and, to the extent applicable, each of its Subsidiaries, as follows:

(i)          each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby; and

(ii)         this Agreement has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms hereof.

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(d)          Each Party acknowledges and agrees that delivery of an executed counterpart of a signature page to this Agreement (whether executed by manual, stamp or mechanical signature) by facsimile or by email in portable document format (PDF) shall be effective as delivery of such executed counterpart of this Agreement. Each Party expressly adopts and confirms each such facsimile, stamp or mechanical signature (regardless of whether delivered in person, by mail, by courier, by facsimile or by email in portable document format (PDF)) made in its respective name as if it were a manual signature delivered in person, agrees that it will not assert that any such signature or delivery is not adequate to bind such Party to the same extent as if it were signed manually and delivered in person and agrees that, at the reasonable request of the other Party at any time, it will as promptly as reasonably practicable cause this Agreement to be manually executed (any such execution to be as of the date of the initial date thereof) and delivered in person, by mail or by courier.

Section 9.07.        Governing Law; Waiver of Jury Trial.     This Agreement (and any claims or disputes arising out of or related hereto or to the transactions contemplated hereby or to the inducement of any Party to enter herein, whether for breach of contract, tortious conduct or otherwise and whether predicated on common law, statute or otherwise) shall be governed by and construed and interpreted in accordance with the Laws of the State of Delaware, irrespective of the choice of Laws principles of the State of Delaware, including all matters of validity, construction, effect, enforceability, performance and remedies. EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN.

Section 9.08.        Assignability.     This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns; provided, however, that neither Party may assign its rights or delegate its obligations under this Agreement without the express prior written consent of the other Party. Notwithstanding the foregoing, no such consent shall be required for the assignment of a Party’s rights and obligations under the Separation and Distribution Agreement, this Agreement and the other Ancillary Agreements in whole (i.e., the assignment of a Party’s rights and obligations under the Separation and Distribution Agreement, this Agreement and all the other Ancillary Agreements all at the same time) in connection with a change of control of a Party so long as the resulting, surviving or transferee Person assumes all the obligations of the relevant party thereto by operation of Law or pursuant to an agreement in form and substance reasonably satisfactory to the other Party. Nothing herein is intended to, or shall be construed to, prohibit either Party or any of its Subsidiaries from being party to or undertaking a change of control.

Section 9.09.        Third-Party Beneficiaries.     Except as provided in Article VII with respect to the Provider Indemnitees in their capacities as such, (a) the provisions of this Agreement are solely for the benefit of the Parties and are not intended to confer upon any other Person except the Parties any rights or remedies hereunder; and (b) there are no other third-party beneficiaries of this Agreement and this Agreement shall not provide any other Third Party with any remedy, claim, Liability, reimbursement, claim of Action or other right in excess of those existing without reference to this Agreement.

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Section 9.10.        Notices.     All notices, requests, claims, demands or other communications under this Agreement shall be in writing and shall be given or made (and shall be deemed to have been duly given or made upon receipt) by delivery in person, by overnight courier service, to the respective Parties at the following addresses (or at such other address for a Party as shall be specified in a notice given in accordance with this Section 9.10):

If to WestRock, to:

WestRock Company

504 Thrasher Street NW
Norcross, GA 30071-1967
Attention: Chief Financial Officer

(with a copy to):

WestRock Company
504 Thrasher Street NW
Norcross, GA 30071-1967
Attention: General Counsel

If to SpinCo, to:

Ingevity Corporation
5255 Virginia Avenue
North Charleston, SC 29406
Attention: General Counsel

Any Party may, by notice to the other Party, change the address to which such notices are to be given.

Section 9.11.        Severability.     If any provision of this Agreement or the application thereof to any Person or circumstance is determined by a court of competent jurisdiction to be invalid, void or unenforceable, the remaining provisions hereof, or the application of such provision to Persons or circumstances or in jurisdictions other than those as to which it has been held invalid or unenforceable, shall remain in full force and effect and shall in no way be affected, impaired or invalidated thereby. Upon such determination, the Parties shall negotiate in good faith in an effort to agree upon such a suitable and equitable provision to effect the original intent of the Parties.

Section 9.12.        Force Majeure.     No Party shall be deemed in default of this Agreement for any delay or failure to fulfill any obligation hereunder (other than the obligation to pay money) so long as and to the extent to which any delay or failure in the fulfillment of such obligations is prevented, frustrated, hindered or delayed as a consequence of circumstances of Force Majeure. In the event of any such excused delay, the time for performance (other than the obligation to pay money) shall be extended for a period equal to the time lost by reason of the delay unless this Agreement has previously been terminated under Article V or under this Section 9.12. A Party claiming the benefit of this provision shall, as soon as reasonably practicable after the occurrence of any such Force Majeure, (a) provide written notice to the other Party of the nature and extent of such Force Majeure; and (b) use commercially reasonable efforts to remove any

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such causes and resume performance under this Agreement as soon as reasonably practicable (and in no event later than the date that the affected Party resumes providing analogous services to, or otherwise resumes analogous performance under any other agreement for, itself, its Affiliates or any Third Party) unless this Agreement has previously been terminated under Article V or this Section 9.12. SpinCo shall be (i) relieved of the obligation to pay Charges for the affected Service(s) throughout the duration of such Force Majeure, (ii) free to acquire such Services from an alternative source, at SpinCo’s sole cost and expense, and without liability to Provider, for the period and to the extent reasonably necessitated by such non-performance, and (iii) entitled to permanently terminate such Service(s) if the delay or failure in providing such Services because of a Force Majeure shall continue to exist for more than thirty (30) consecutive days (it being understood that SpinCo shall not be required to provide any advance notice of such termination to Provider).

Section 9.13.        Headings.     The Article, Section and Paragraph headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

Section 9.14.        Survival of Covenants.     Except as expressly set forth in this Agreement, the covenants, representations and warranties and other agreements contained in this Agreement, and Liability for the breach of any obligations contained herein, shall survive the Effective Time and shall remain in full force and effect thereafter.

Section 9.15.        Waivers of Default.     Waiver by any Party of any default by the other Party of any provision of this Agreement shall not be deemed a waiver by the waiving Party of any subsequent or other default, nor shall it prejudice the rights of the waiving Party. No failure or delay by any Party in exercising any right, power or privilege under this Agreement shall operate as a waiver thereof, nor shall a single or partial exercise thereof prejudice any other or further exercise thereof or the exercise of any other right, power or privilege.

Section 9.16.        Specific Performance.     Subject to Section 7.02 and Article VII of the Separation and Distribution Agreement, in the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Party or Parties who are, or are to be, thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief (on an interim or permanent basis) in respect of its rights or their rights under this Agreement, in addition to any and all other rights and remedies at Law or in equity, and all such rights and remedies shall be cumulative. The Parties agree that the remedies at Law for any breach or threatened breach, including monetary damages, may be inadequate compensation for any loss and that any defense in any Action for specific performance that a remedy at Law would be adequate is waived. Any requirements for the securing or posting of any bond with such remedy are hereby waived by each of the Parties.

Section 9.17.        Amendments.     No provisions of this Agreement or any Ancillary Agreement shall be deemed waived, amended, supplemented or modified by a Party, unless such waiver, amendment, supplement or modification is in writing and signed by the authorized representative of the Party against whom it is sought to enforce such waiver, amendment, supplement or modification.

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Section 9.18.        Interpretation.     In this Agreement, (a) words in the singular shall be deemed to include the plural and vice versa and words of one gender shall be deemed to include the other genders as the context requires; (b) the terms “hereof,” “herein,” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole (including all of the Schedules, Annexes and Exhibits hereto) and not to any particular provision of this Agreement; (c) Article, Section, Exhibit, Annex and Schedule references are to the Articles, Sections, Exhibits, Annexes and Schedules to this Agreement unless otherwise specified; (d) unless otherwise stated, all references to any agreement shall be deemed to include the exhibits, schedules and annexes to such agreement; (e) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless otherwise specified; (f) the word “or” shall not be exclusive; (g) unless otherwise specified in a particular case, the word “days” refers to calendar days; (h) references to “business day” shall mean any day other than a Saturday, a Sunday or a day on which banking institutions are generally authorized or required by law to close in the United States or Atlanta, Georgia or Charleston, South Carolina; (i) references herein to this Agreement or any other agreement contemplated herein shall be deemed to refer to this Agreement or such other agreement as of the date on which it is executed and as it may be amended, modified or supplemented thereafter, unless otherwise specified; and (j) unless expressly stated to the contrary in this Agreement, all references to “the date hereof,” “the date of this Agreement,” “hereby” and “hereupon” and words of similar import shall all be references to ______, 2016.

Section 9.19.        Mutual Drafting.     This Agreement shall be deemed to be the joint work product of the Parties and any rule of construction that a document shall be interpreted or construed against a drafter of such document shall not be applicable to this Agreement.

Section 9.20.        Effect if Distribution Does Not Occur.     If the Distribution does not occur, then all actions and events that are, under this Agreement, to be taken or occur shall not be taken or occur except to the extent specifically agreed by the parties.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly authorized Representatives.

WESTROCK COMPANY
By:
	Name:
	Title:
INGEVITY CORPORATION
By:
	Name:
	Title:

[Signature Page to Transition Services Agreement]

EX-10.5

Exhibit 10.5

COVINGTON PLANT

GROUND LEASE AGREEMENT

between

WESTROCK VIRGINIA, LLC

and

INGEVITY VIRGINIA CORPORATION

Dated as of February 1, 2016

TABLE OF CONTENTS

		Page
Article 1 DEFINITIONS		1
Article 2 THE LEASE		8
Section 2.1	Leased Premises	8
Section 2.2	Carbon Plant and Mill Owner Retained Assets Excluded	8
Section 2.3	Permitted Encumbrances	9
Section 2.4	Condition of the Leased Premises	9
Article 3 EASEMENT RIGHTS		9
Section 3.1	Easement Rights Generally	9
Section 3.2	Ingevity Access Rights	9
Section 3.3	Mill Owner Access Rights	9
Section 3.4	Parking Rights	10
Section 3.5	Rail Facilities	10
Section 3.6	Continuous Assets and Party Wall	10
Section 3.7	Storm Drainage	11
Section 3.8	Wastewater Lines	11
Section 3.9	Potable Water	11
Section 3.10	Natural Gas Utility Facilities	12
Section 3.11	Unknown Other Assets	12
Section 3.12	Future Utility Facilities	12
Section 3.13	No Rights to Obstruct; Use of Property Subject to Easement Rights	13
Section 3.14	Compliance	13
Section 3.15	Exercise of Maintenance Obligations and Rights	13
Section 3.16	Mechanics’ Liens	14
Section 3.17	Right to Cure Defaults Under Article 3	14
Section 3.18	Limitations Upon Easement Rights; Reservations by the Plant Owner (including Relocations)	15
Section 3.19	Termination of Easement Rights	16
Section 3.20	Article 3 Remedies	16
Section 3.21	Actions in Connection with a Work Stoppages	16
Article 4 TERM; HOLDING OVER		17
Section 4.1	Term	17
Section 4.2	Termination	17
Section 4.3	Payment of Fair Market Value	18
Article 5 RENT		19
Section 5.1	Rent	19
Article 6 CARBON PLANT SERVICES		19
Section 6.1	Services Agreement	19

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Section 6.2	Maintenance Obligations	19
Article 7 TAXES		19
Section 7.1	Ingevity to Pay Taxes	19
Section 7.2	Taxes Defined	20
Section 7.3	Payment of Taxes	20
Section 7.4	Tax Notices	20
Article 8 USE; COMPLIANCE WITH LAWS; MECHANIC’S LIENS		20
Section 8.1	Permitted Uses	20
Section 8.2	Compliance with Laws	20
Section 8.3	Permitted Contests	21
Section 8.4	Mechanic’s Liens on Leased Premises	21
Article 9 ALTERATIONS AND ADDITIONAL IMPROVEMENTS; REPAIR AND MAINTENANCE		21
Section 9.1	Additional Improvements	21
Section 9.2	Alterations	21
Section 9.3	Repair and Maintenance	22
Article 10 INSURANCE		22
Section 10.1	Insurance	22
Article 11 WAIVER OF SUBROGATION; INDEMNIFICATION ; ENVIRONMENTAL LIABILITIES		24
Section 11.1	Limitation of Liability and Waiver of Subrogation	23
Section 11.2	Indemnification by Ingevity	24
Section 11.3	Indemnification by the Mill Owner	25
Section 11.4	Environmental Indemnities	25
Section 11.5	Remedial Action	27
Section 11.6	Future Operational Compliance	28
Section 11.7	Remedial Action Standards	28
Section 11.8	Access to Areas Outside the Affected Access Area	28
Section 11.9	Certain Assumed Environmental Liabilities	28
Article 12 CASUALTY AND CONDEMNATION		29
Section 12.1	Casualty	29
Section 12.2	Condemnation	29
Article 13 REPRESENTATIONS AND WARRANTIES		29
Section 13.1	Power and Authority of Ingevity; Enforceability	29
Section 13.2	Power and Authority of the Mill Owner; Enforceability	29
Article 14 SURRENDER		30
Section 14.1	Surrender	30

ii

Article 15 ASSIGNMENT AND SUBLETTING		31
Section 15.1	Assignment or Sublease by Ingevity	31
Section 15.2	Assignment by the Mill Owner	31
Section 15.3	Release of Liability	31
Article 16 FINANCING		31
Section 16.1	Ingevity’s Financing	31
Section 16.2	The Mill Owner’s Financing	31
Article 17 RIGHTS OF MORTGAGEE		32
Section 17.1	Performance by Mortgagee	32
Section 17.2	Rights of Mortgagee	32
Section 17.3	Notices from Mortgagee	32
Section 17.4	Notice to Mortgagee	33
Section 17.5	Nonliability for Covenants	33
Article 18 RIGHT TO CURE DEFAULTS		33
Article 19 QUIET ENJOYMENT		33
Article 20 NOTICES		33
Section 20.1	Procedures for Notice	33
Section 20.2	Change of Address	34
Article 21 EXPANSION OPTIONS		34
Section 21.1	Option to Expand the Leased Premises with the Sawdust Area	34
Section 21.2	Sawdust Area Expansion Property	35
Section 21.3	Condition of the Sawdust Area Expansion Property	35
Section 21.4	Option to Expand the Leased Premises with the Truck Shop Property	35
Section 21.5	Truck Shop Property	35
Section 21.6	Condition of the Truck Shop Property	35
Article 22 INGEVITY OPTION TO PURCHASE		35
Section 22.1	Option to Purchase	35
Section 22.2	Purchase Price	36
Section 22.3	Easement Rights to be Converted to Reciprocal Easements	36
Section 22.4	Subdivision of Truck Shop Property	36
Section 22.5	Services Agreement
Section 22.6	Termination of Lease	36
Article 23 MISCELLANEOUS		36
Section 23.1	Dispute Resolution	36
Section 23.2	Force Majeure	38
Section 23.3	Amendment; Waiver	38
Section 23.4	Entire Agreement	38
Section 23.5	Memorandum of Lease	38
Section 23.6	Estoppel Certificate	39
Section 23.7	Governing Law	39

iii

Section 23.8	Binding Agreement; Successors	39
Section 23.9	Headings	39
Section 23.10	Counterparts	39
Section 23.11	Exhibits	39
Section 23.12	Severability, etc.	39
Section 23.13	Negation of Partnership	39
Section 23.14	Third-Party Rights	39
Section 23.15	Further Assurances	39
Section 23.16	Merger of Estates	40
Section 23.17	No Presumption Against Drafter	40
Section 23.18	Conflict Between Agreements	40
JOINDER OF MILL REAL PROPERTY RECORD OWNER		43

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GROUND LEASE AGREEMENT

THIS AGREEMENT (this “Lease”) is made as and effective as of 12:01 a.m. on February 1, 2016 (the “Effective Date”) between WESTROCK VIRGINIA, LLC, a Delaware limited liability company, as landlord (the “Mill Owner”), and INGEVITY VIRGINIA CORPORATION, a Virginia corporation, as tenant (“Ingevity”), under the following circumstances:

A.           Pursuant to the Distribution Agreement of even date herewith between the Mill Owner and Ingevity, certain of the assets and liabilities of the specialty chemicals business of WestRock Company, including the Carbon Plant (as hereinafter defined) operated in conjunction with and within the Mill Owner’s paperboard and pulp mill in Covington, Virginia, are being distributed from the Mill Owner to Ingevity. Following such distribution, Ingevity will operate the Carbon Plant.

B.           The parties are entering into this Lease to set forth their agreement with respect to Ingevity’s lease of the real property within the Mill Owner’s mill complex upon which Ingevity’s Carbon Plant is located. This Lease is intended to be a transfer of all of the economic benefits and burdens of owning the real property on which the Carbon Plant is located from the Mill Owner to Ingevity and thereafter is intended to be a retention by Ingevity of such real property for U.S. federal income tax purposes.

NOW, THEREFORE, in consideration of the mutual covenants described in this Lease and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, and intending to be legally bound hereby, the Mill Owner and Ingevity agree as follows:

Article 1

DEFINITIONS

When used in this Lease, the following terms shall have the meanings indicated:

“Abandoned” means, with respect to any Easement Right established under this Lease, the relinquishment of such Easement Right by written notice of such relinquishment given by the Easement Right Holder to the Plant Owner whose property was subject to such Easement Right.

“Access” means ingress and egress for pedestrian and vehicular traffic, including cars, trucks and other vehicles, by the Easement Right Holder and its Personnel, including the nonexclusive right to use all roads, sidewalks, pathways, corridors, gates, bridges and other access ways.

“Access Area” means: (i) in the case of the Mill Real Property, the portion of the Mill Real Property as to which Ingevity has an Access Right under this Lease, and (ii) in the case of the Carbon Plant Real Property, the portion of the Carbon Plant Real Property as to which the Mill Owner has an Access Right under this Lease.

“Access Rights” means the Easement Rights described in Sections 3.2 and 3.3.

“Affiliate” means, as to any Person: (a) any subsidiary of such Person and (b) any other Person that, directly or indirectly, controls, is controlled by, or is under common control with, such Person. For the purposes of this definition, “control” means the possession of the power to direct or cause the direction of management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

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“Agent” has the meaning given that term in Section 11.1(a)(i).

“Annual Fair Market Rental Value” means the amount of annual rent which the Sawdust Area Expansion Property would bring if exposed upon the open market for a reasonable length of time, the lessor being willing but under no compulsion to lease and the lessee being willing but under no compulsion to lease, pursuant to the terms set forth in this Lease (including, without limitation, the Purchase Option and the deemed exercise of the Purchase Option at the end of the Term as provided in Section 22.1(b) for the remainder of the Term, and both parties having full knowledge as to the rights and limitations set forth in this Lease.

“Cap-Off” means to take all action necessary to shut off completely, seal and secure any Utility Facilities at the point at which such Utility Facilities intersect the common boundary line of the Mill Real Property and the Carbon Plant Real Property or, if impractical at such point, then at such other point as the parties may reasonably agree.

“Carbon Plant” means the buildings, improvements, fixtures, equipment and other assets directly or beneficially owned by Ingevity and located on the Carbon Plant Real Property, but does not include the Mill Owner Retained Assets, the Co-located Continuous Assets owned by the Mill Owner and the Mill Owner Natural Gas Utility Facilities.

“Carbon Plant Assumed Environmental Liabilities” has the meaning given that term in Section 11.9(b).

“Carbon Plant Environmental Condition” means any condition with respect to the environment which existed in the past, now exists or may hereafter be found to exist in, on, under, or about the Carbon Plant Real Property, including, without limitation: conditions in, on or under any improvements on the Carbon Plant Real Property (including the presence of asbestos, lead-based paint and mold); the off-site migration of Hazardous Substances from the Carbon Plant Real Property; the migration of Hazardous Substances onto the Carbon Plant Real Property; other contamination of the environment (including, without limitation, ambient air, surface or subsurface soil or strata, air, water (whether surface water or ground water) or sediments) by Hazardous Substances; and impacts to or natural resource damages arising from conditions in, on or under the Carbon Plant Real Property.

“Carbon Plant Real Property” means the real property owned as of the Effective Date by the Mill Owner and/or one or more of its Affiliates and located within the Mill complex in Covington, Virginia containing approximately 20 acres and being more particularly described in Exhibit A-1 attached hereto and made a part hereof (but excluding the Truck Shop Property unless and until Ingevity exercises the Truck Shop Expansion Option ) which is being leased by the Mill Owner to Ingevity pursuant to this Lease as part of the Leased Premises. If Ingevity exercises the Sawdust Area Expansion Option, the Carbon Plant Real Property shall include the Sawdust Area Expansion Property from the effective date of such expansion, and if Ingevity exercises the Truck Shop Expansion Option, the Carbon Plant Real Property shall include the Truck Shop Property from the effective date of such expansion. For purpose of the Easement Rights, the Carbon Plant Real Property includes the Carbon Plant located on the Carbon Plant Real Property.

“Carbon Plant Services” means the services to be provided by the Mill Owner to the Carbon Plant pursuant to the Services Agreement.

“Co-located Continuous Assets” has the meaning given that term in Section 3.6(a).

“Conclusion of the Escalation Process” has the meaning given that term in Section 23.1(e).

“Condemning Authority” has the meaning given that term in Section 12.2.

“Consultant” has the meaning given that term in Section 11.7.

“Construction Standards” has the meaning given that term in Section 9.1.

“Continuous Assets” means those assets, such as pipelines, pipe bridges, wires, cables, conveyors and other similar assets, that are located partially on the Mill Real Property and partially on the Carbon Plant Real Property. Those Continuous Assets that are not Mill Owner Retained Assets are owned in part by the Mill Owner and in part by Ingevity, while those Continuous Assets that are Mill Owner Retained Assets are owned solely by the Mill Owner. In the case of Continuous Assets that are Utility Facilities serving the Carbon Plant and the Mill, the main distribution lines (including, without limitation, the Mill Owner Natural Gas Utility Facilities) are owned by the Mill Owner and the dedicated lines connecting the main distribution lines to the Carbon Plant which serve only the Carbon Plant (including, without limitation, the Ingevity Natural Gas Utility Facilities), are owned by Ingevity. The

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Continuous Assets as of the Effective Date and the portions of each owned by each party are listed on Exhibit C. Exhibit C also indicates, as of the Effective Date, the Continuous Assets that are Mill Owner Retained Assets.

“Contract Manager” has the meaning given that term in Section 23.1(a).

“Default Rate” means a fixed rate equal to: (i) the three month London interbank offered rate (LIBOR) as of the date of determination, as reported in the Wall Street Journal Money Rate column (or, in the event the Wall Street Journal no longer is published, or no longer publishes such rate, such other similarly determined rate as the Mill Owner and Ingevity mutually agree), plus (ii) 5% per annum.

“Dispute” has the meaning given that term in Section 23.1(c).

“Easement Rights” means the Mill Owner Easement Rights and/or the Ingevity Easement Rights.

“Easement Right Holder” means: (i) with respect to a Mill Owner Easement Right, the Mill Owner, and (ii) with respect to an Ingevity Easement Right, Ingevity.

“Effective Date” has the meaning given that term in the preamble to this Lease.

“Emergency” means an event or occurrence that requires immediate action by either party to this Lease: (a) for the protection of persons or property; or (b) to comply with any applicable Laws to the extent that noncompliance therewith may imminently, adversely affect any of the operations, property or financial condition of either party hereto or would result, or may be asserted or alleged to result, in any criminal liability of such party.

“Environmental Claim” refers to any complaint, summons, citation, notice, directive, order, claim, litigation, investigation, notice of violation, judicial or administrative proceeding, judgment, letter or other communication from any Governmental Authority, department, bureau, office or other authority, or any third party involving violations of Environmental Laws, Handling of Hazardous Substances or Releases of Hazardous Substances.

“Environmental Condition” means any condition, known or unknown, foreseen or unforeseen, arising out of: (1) the handling, Releases, threat of Release or exposure of Persons to Hazardous Substances; (2) any violation of Environmental Laws; (3) the Handling of Hazardous Substances; and (4) any Environmental Claim.

“Environmental Indemnity Claim” has the meaning given that term in Section 11.4(c).

“Environmental Laws” means all Laws relating to public health and safety, and pollution or protection of the environment, or that classify, regulate, call for the remediation of, require reporting with respect to, or list or define air, water, groundwater, solid waste, hazardous or toxic substances, materials, wastes, pollutants or contaminants; which regulate the presence, use, manufacture, generation, handling, labeling, testing, transport, treatment, storage, processing, discharge, disposal, release, threatened release, control, or cleanup of Hazardous Substances or materials containing Hazardous Substances; or which are intended to assure the protection, safety and good health of the public. “Environmental Laws” include applicable Environmental Permits.

“Environmental Liabilities” means any Losses, including without limitation, capital costs and costs of investigation, Remedial Action or other response actions, known or unknown, foreseen or

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unforeseen, arising out of: (i) Environmental Conditions, (ii) any violation of any Environmental Law, (iii) the handling of Hazardous Substances, or (iv) any Environmental Claim; provided, however, that, for the avoidance of doubt, the foregoing shall not include any Losses after the Effective Date from increases in operating expenses of either the Mill Owner’s Business or Ingevity’s Business, including, without limitation, depreciation, wages, administration of environmental programs, chemicals, sewer fees and permit fees (it being acknowledged and agreed, however, that any fines and penalties incurred in connection with any failure to have or comply with an Environmental Permit shall constitute Environmental Liabilities hereunder).

“Environmental Permits” means any licenses, permits, quotas, authorizations, consents, orders, franchises, filings or registrations, variances, exceptions, security clearances and other approvals from any Governmental Authority under Environmental Laws including, without limitation, those that are required to generate, store, handle, transport, discharge, emit or dispose of Hazardous Substances used or generated by the party.

“Escalation Process” has the meaning given that term in Section 23.1(c).

“Excluded Removal Property” has the meaning given that term in Section 14.1.

“Executive Management” has the meaning given that term in Section 23.1(e).

“Fair Market Value of the Leased Premises” means the price at which the Leased Premises would be sold if exposed upon the open market for a reasonable length of time, the buyer being willing but under no compulsion to buy and the seller being willing but under no compulsion to sell.

“Fee Mortgage” has the meaning given that term in Section 16.2.

“Force Majeure Event” means any cause, condition or event beyond a party’s reasonable control that delays or prevents other party’s performance of its obligations hereunder, including war, acts of government, acts of public enemy, riots, civil strife, lightning, fires, explosions, storms, floods, power failures (including brown-outs, surges or other situations where the utility generates less than full power), other acts of God or nature, labor strikes or lockouts by the party employees and other similar events or circumstances; provided, however, that adverse financial or market conditions shall not constitute a Force Majeure Event.

“Governmental Authority” means any government or governmental or regulatory body thereof, or political subdivision thereof, of any country or subdivision thereof, whether national, federal, state or local, or any agency or instrumentality thereof, or any court or arbitrator (public or private).

“Handling” means any manner of generating, accumulating, storing, treating, disposing of, or transporting, as any such terms may be defined in any Environmental Law, of Hazardous Substances.

“Hazardous Materials” has the meaning given that term in the Separation Agreement.

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“Hazardous Substances” means any hazardous substance within the meaning of Section 101(14) of the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. § 9601(14) (“CERCLA”) or any chemical, pollutant, contaminant, waste or otherwise toxic, hazardous, extremely hazardous or radioactive waste, including petroleum, petroleum derivatives, petroleum by-products or other hydrocarbons, asbestos containing materials and polychlorinated biphenyls that, in each case, is regulated under any applicable Environmental Law.

“Indemnified Party” has the meaning given that term in Section 11.4(c).

“Indemnifying Party” has the meaning given that term in Section 11.4(c).

“Ingevity” has the meaning set forth in the preamble to this Lease, and includes any permitted successors as owner and operator of the Carbon Plant.

“Ingevity Easement Rights” means those certain rights with respect to the Mill Real Property granted to Ingevity pursuant to Article 3 of this Lease.

“Ingevity Indemnified Parties” has the meaning given that term in Section 11.3.

“Ingevity Natural Gas Utility Facilities” has the meaning given that term in Section 3.10(a).

“Ingevity’s Business” means the operation of the Carbon Plant as it was being operated on the Effective Date and any expansion of such business permitted under Section 8.1.

“Law” means any national, federal, state or local law (including common law), statute, constitutional provision, code, ordinance, rule, regulation, directive, concession, order or other requirement or guideline of any country or subdivision thereof.

“Leased Premises” has the meaning given that term in Section 2.1.

“Losses” means all demands, claims, causes of action, administrative orders and notices, losses, costs, fines, liabilities, penalties, damages (direct or indirect) and expenses (including, without limitation, reasonable legal, paralegal, accounting and consultant fees, amounts paid in settlement, judgments and other expenses incurred in the investigation and defense of claims and actions).

“Maintain” means to maintain, inspect, preserve, protect, repair and replace, and “Maintenance” means the maintenance (both preventive and predictive), inspection (including testing), preservation, repair and replacement.

“Mill” means the Mill Owner’s Covington, Virginia paperboard and pulp mill. The Mill does not include the Carbon Plant.

“Mill Environmental Condition” means any condition with respect to the environment which existed in the past, now exists or may hereafter be found to exist in, on, under, or about the Mill Real Property including, without limitation: conditions in, on or under any improvements on the Mill Real Property (including the presence of asbestos, lead-based paint and mold); the off-site migration of Hazardous Substances from the Mill Real Property; the migration of Hazardous Substances onto the Mill Real Property; other contamination of the environment (including, without limitation, ambient air, surface or subsurface soil or strata, air, water (whether surface water or ground water) or sediments) by Hazardous Substances; and impacts to or natural resource damages arising from conditions in, on or under the Mill Real Property.

“Mill Indemnified Parties” has the meaning given that term in Section 11.2.

“Mill Owner” has the meaning given that term in the preamble to this Lease, and includes any permitted successors as owner of the Mill Real Property and the fee interest in the Carbon Plant Real Property (other than Ingevity).

“Mill Owner Easement Rights” means those certain rights with respect to the Carbon Plant Real Property retained by the Mill Owner pursuant to Article 3 of this Lease.

“Mill Owner Natural Gas Utility Facilities” has the meaning given that term in Section 3.10(a).

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“Mill Owner Retained Assets” means: (i) any Continuous Assets that pass under, on or over the Carbon Plant Real Property and serve the Mill but do not also serve the Carbon Plant (which include, without limitation, certain pipe bridges and conveyors), and (ii) the Truck Shop Property (which, for clarity, is excluded from the Carbon Plant Real Property). The Mill Owner Retained Assets as of the Effective Date (other than the Truck Shop Property) are listed on Exhibit C.

“Mill Owner Retained Environmental Liabilities” has the meaning given that term in Section 11.9(b).

“Mill Owner’s Business” means the operation of the Mill by the Mill Owner, including the manufacture and distribution by the Mill Owner of solid bleached sulfite board and related products and related activities at the Mill unless and until Ingevity exercises the Truck Shop Expansion Option .

“Mill Real Property” means the real property on which the Mill is located. For clarity, the Mill Real Property does not include the Carbon Plant Real Property, but does include the Truck Shop Property unless and until Ingevity exercises the Truck Shop Expansion Option .

“Mortgage” has the meaning given that term in Section 16.1.

“Mortgagee” has the meaning given that term in Section 16.1.

“Non-Controlling Party” has the meaning given that term in Section 11.5.

“Non-Curable Default” has the meaning given that term in Section 17.2(c).

“Operating Council” has the meaning given that term in Section 23.1(b).

“Party Wall” means the common, or party, structural wall between the former board mill building on the Carbon Plant Real Property and the hydropulper building on the Mill Real Property.

“Permanent Closure of the Carbon Plant” means a shutdown of the Carbon Plant in which no products are being manufactured, processed or stored on a routine basis consistent with normal business practices for the Carbon Plant if such closure has exceeded, or will exceed, one year.

“Permitted Encumbrances” has the meaning given that term in Section 2.3.

“Person” means any individual, corporation, partnership, limited liability company, firm, joint venture, association, joint-stock company, trust, unincorporated organization, representative office, branch, Governmental Authority or other similar entity, other than the Mill Owner or Ingevity.

“Personnel” means the Affiliates, officers, directors, employees, agents, contractors, consultants, vendors, invitees and representatives of a party to the Agreement and of the party’s Affiliates.

“Plant Owner” means, with respect to the Carbon Plant and Ingevity’s rights in the Carbon Plant Real Property, Ingevity; and with respect to the Mill and the Mill Real Property, the Mill Owner.

“Plant Owner’s Rules and Regulations” means all reasonable rules, regulations and procedures established from time to time by a Plant Owner with respect to the exercise by the other party to this Lease and its Personnel of such other party’s Easement Rights on the Plant Owner’s property and which govern and direct safety, environmental, security and emergency matters or the conduct of any Personnel of the other party while on such property, but only if such other party has reasonable prior written notice of such rules, regulations and procedures.

“Potable Water Utility Facilities” has the meaning given that term in Section 3.9(a).

“Property” has the meaning given that term in Section 11.1(a).

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“Purchase Option” has the meaning given that term in Section 22.1.

“Purchase Option Closing” has the meaning given that term in Section 22.2(b).

“Purchase Option Exercise Notice” has the meaning given that term in Section 22.1.

“Rail Facilities” has the meaning given that term in Section 3.5.

“Release” means any spilling, leaking, pumping, pouring, emitting, discharging, injecting, dumping or disposing of Hazardous Substances into the environment, including the abandonment or discarding of barrels, containers, and other closed receptacles containing any Hazardous Substance or pollutant or contaminant.

“Relocate” means to move or otherwise change or alter the location of any Utility Facilities, other Continuous Assets or Access Area, including changing the height at or above grade or depth below grade of any such Utility Facilities or other Continuous Assets.

“Relocated Facility” has the meaning given that term in Section 3.18(b).

“Rent” has the meaning given that term in Section 5.1.

“Remedial Action” means any action to investigate, evaluate, assess, including without limitation, conducting a risk assessment of, test, monitor, remove, respond to, treat, abate, remedy, correct, clean-up or otherwise remediate, the Release or presence of any Hazardous Substance, including the imposition of engineering or institutional controls, any closure activities, post-closure or monitoring and any operation and maintenance relating to any such remedial activities or Environmental Condition.

“Remove” means to remove all or any portion of any Utility Facilities or any other personal property or improvements to real property owned by a party and located within the other party’s property as directed and approved by the Plant Owner (or, in the case of Section 14.1, the Mill Owner) in a safe and secure, workmanlike manner so that such removal will proceed diligently and continuously, without material interruption of or interference with the operations of the Plant Owner, all to the reasonable satisfaction of the Plant Owner (or, in the case of Section 14.1, the Mill Owner) and subject to all applicable Laws.

“Responsible Party” has the meaning given that term in Section 11.5.

“Restore” means to return real property and all improvements located thereon substantially to the state and condition of such real property and improvements as of the Effective Date.

“Sawdust Area Expansion Effective Date” has the meaning given that term in Section 21.2(a).

“Sawdust Area Expansion Exercise Notice” has the meaning given that term in Section 21.1.

“Sawdust Area Expansion Option” has the meaning given that term in Section 21.1.

“Sawdust Area Expansion Property” has the meaning given that term in Section 21.1.

“Separation Agreement” means the Separation and Distribution Agreement to be entered into after the Effective Date by and between WestRock Company and Ingevity Corporation.

“Services Agreement” means the Covington Plant Services Agreement between the Mill Owner and Ingevity of even date herewith, as the same may be amended from time to time.

“Storm Drainage Facilities” has the meaning given that term in Section 3.7(a).

“Taxes” has the meaning given that term in Section 7.2.

“Temporary Construction Activities” has the meaning given that term in Section 3.15(b).

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“Temporary Construction Right” has the meaning given that term in Section 3.15(b).

“Term” has the meaning given that term in Section 4.1.

“Termination Date” means the date on which this Lease terminates as provided in Section 4.1.

“Third Party Claim” has the meaning given that term in Section 11.4(c)

“Truck Shop Property” means the building used by the Mill Owner as a truck repair shop as of the Effective Date (sometimes referred to as the Auto Garage), which is more particularly described on Exhibit A-1A.

“Truck Shop Expansion Effective Date” has the meaning given that term in Section 21.5

“Truck Shop Expansion Exercise Notice” has the meaning given that term in Section 21.4

“Truck Shop Expansion Option” has the meaning given that term in Section 21.4

“Truck Shop Report” means the confidential WestRock, Covington, VA Auto Garage FEP3 Report dated September 25, 2015 prepared by Jacobs Engineering, Greenville, South Carolina.

“Utility Facilities” means any pipeline, utility line, electrical line, cable, sanitary or storm sewer, sump, pipe, conduit, duct or other line or wire that transmits or transports any Utility Product, together with: (i) all mechanical and other equipment that treats, stores, converts, adapts, pumps or vents any Utility Product and all utility poles, pipe racks, fittings, furnishings and other incidental property (whether deemed to be real property or personal property) which comprise an integral part thereof and are designed and used in connection with the transmission or transportation of such Utility Product, and (ii) any equipment or other item referred to herein as a “Utility Facility” or as “Utility Facilities.”

“Utility Product” means any gas, liquid, chemical, compound, current or impulse (whether electrical or otherwise) or other substance that it supplied or transmitted through any Utility Facilities.

“Vehicle” has the meaning given that term in Section 11.2(ii).

“Wastewater Utility Facilities” shall have the meaning set forth in Section 3.8(a).

Article 2

THE LEASE

Section 2.1           Leased Premises. The Mill Owner hereby leases the Carbon Plant Real Property to Ingevity and grants to Ingevity the Ingevity Easement Rights (the Carbon Plant Real Property and the Ingevity Easement Rights hereinafter collectively are referred to as the “Leased Premises”).

Section 2.2           Carbon Plant and Mill Owner Retained Assets Excluded. The Leased Premises do not include the Carbon Plant located on the Carbon Plant Real Property, which is owned by Ingevity. The Leased Premises also do not include: (i) the Mill Owner Retained Assets, which are located on the Carbon Plant Real Property but are owned and used exclusively by the Mill Owner, (ii) the Co-Located Continuous Assets owned by the Mill Owner and located on the Carbon Plant Real Property, or (iii) the Mill Owner Natural Gas Utility Facilities. The Carbon Plant and any other improvements now or hereafter located on the Carbon Plant Real Property (other than the Mill Owner Retained Assets and the Co-Located Continuous Assets owned by the Mill Owner and located on the Carbon Plant Real Property) are and shall remain the property of Ingevity, subject to the provisions of Article 14. Ingevity shall have the absolute and unrestricted right to remove all or any portion or portions of the Carbon Plant and any such other improvements (other than the Mill Owner Retained Assets, the Co-Located Continuous Assets owned by the Mill Owner and located on the Carbon Plant Real Property and the Mill Owner Natural Gas Utility Facilities located on the Carbon Plant Real Property) at any time during the Term; provided, however, that if Ingevity so removes any portion of the Carbon Plant prior to the end of the Term, Ingevity shall, to the extent required by Law or the Mill Owner, comply with the requirements of Section 14.1 with respect to the portion of the Carbon Plant Real Property on which such removed portion or portions of the Carbon Plant were located as if such portion of the Carbon Plant Real Property were then being surrendered to the Mill Owner pursuant to Section 14.1.

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Section 2.3           Permitted Encumbrances. The Leased Premises are leased to Ingevity by the Mill Owner subject to the following (collectively, the “Permitted Encumbrances”): (a) the Mill Owner Easement Rights, which are retained by the Mill Owner, (b) all legal highways, (c) all easements, covenants, instruments, agreements and restrictions of record on the Effective Date (other than liens securing indebtedness of the Mill Owner, judgment liens against the Mill Owner and mechanics liens created as a result of the activities of the Mill Owner for which Ingevity and its Affiliates are not responsible pursuant to the Separation Agreement), (d) all Taxes not yet due and payable, (e) any state of facts that would be disclosed by a current survey or physical inspection of the Carbon Plant and the Leased Premises, (f) all Laws with respect to the use, occupancy, subdivision or improvement of the Leased Premises, and (g) the lien of any Fee Mortgage subject to the provisions of Section 16.2.

Section 2.4           Condition of the Leased Premises. Ingevity is leasing the Leased Premises from the Mill Owner in their present condition, “AS IS,” on the Effective Date. Ingevity acknowledges that it has previously possessed the Leased Premises and is familiar with the Leased Premises and inspected the Leased Premises prior to taking possession under this Lease. Except as otherwise expressly provided in this Lease or the Services Agreement, the Mill Owner shall have no obligation to construct or install any improvements on the Leased Premises or to renovate, recondition, alter or improve the Leased Premises in any manner in connection with this Lease, and Ingevity hereby accepts the Leased Premises “as-is” on the Effective Date. There are and shall be no implied warranties of merchantability, habitability, fitness for a particular purpose or of any other kind arising out of this Lease, and there are no warranties (express or implied) given by the Mill Owner concerning the Leased Premises.

Article 3

EASEMENT RIGHTS

Section 3.1           Easement Rights Generally. During the Term, Ingevity shall have the Ingevity Easement Rights and the Mill Owner shall have the Mill Owner Easement Rights, in each case as described in this Article 3 and subject to the limitations and restrictions set forth in this Lease.

Section 3.2           Ingevity Access Rights. The Ingevity Easement Rights include a non-exclusive right of Access over the Mill Real Property, but only to the extent necessary, and only over such portions of the Mill Real Property as are reasonably necessary, to provide Access: (a) to the Carbon Plant, (b) to permit Ingevity to provide services, perform duties, obligations and responsibilities, and exercise rights under this Lease and the Services Agreement, including, without limitation, to inspect, Maintain, use and operate those Co-Located Continuous Assets for which Ingevity has rights or responsibilities under this Lease or under the Services Agreement and the Ingevity Natural Gas Utility Facilities, and (c) to inspect, Maintain, use and operate the Carbon Plant on the Carbon Plant Real Property and otherwise to conduct Ingevity’s Business on the Carbon Plant Real Property. The rights of Access described in this Section 3.2 shall be for the benefit of Ingevity and its Personnel. The rights of Access described in this Section 3.2 that relate solely to rights, duties, obligations or responsibilities of Ingevity under the Services Agreement shall terminate on such date as Ingevity no longer has the related rights, duties, obligations or responsibilities under the Services Agreement. The locations of the Ingevity Access Rights as of the Effective Date are set forth on Exhibit A-3.

Section 3.3           Mill Owner Access Rights. The Mill Owner Easement Rights shall include a non-exclusive right of Access over the Carbon Plant Real Property, but only to the extent necessary, and only over such portions of the Carbon Plant Real Property as are reasonably necessary, to provide Access: (a) to permit the Mill Owner to provide services, perform duties, obligations and responsibilities, and exercise rights under this Lease and the Services Agreement, including, without limitation, to Maintain, use and operate the Mill Owner Retained Assets, the Mill Owner Natural Gas Utility Facilities and the

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Co-Located Continuous Assets and for which the Mill Owner has rights or responsibilities under this Lease or under the Services Agreement, (b) to inspect, Maintain, use and operate the Mill on the Mill Real Property and otherwise to conduct the Mill Owner's Business on the Mill Real Property, and (c) to place temporary cranes for performing maintenance and construction work on structures located on the Mill Real Property at the locations indicated on Exhibit F. The rights of Access described in this Section 3.3 shall be for the benefit of the Mill Owner and its Personnel. The rights of Access described in this Section 3.3 that relate solely to rights, duties, obligations or responsibilities of the Mill Owner under the Services Agreement shall terminate on such date as the Mill Owner no longer has the related rights, duties, obligations or responsibilities under the Services Agreement. The locations of the Mill Owner Access Rights as of the Effective Date are set forth on Exhibit A-2.

Section 3.4           Parking Rights. Subject to Section 3.21, the Ingevity Easement Rights shall include a non-exclusive right to use the parking areas on the Mill Real Property adjacent to the Carbon Plant Real Property for purposes of parking cars, trucks and other vehicles by Ingevity and its Personnel in connection with the conduct of Ingevity’s Business. Subject to Section 3.21, the Mill Owner Easement Rights shall include a non-exclusive right to use the parking areas on the Carbon Plant Real Property for purposes of parking cars, trucks and other vehicles by the Mill Owner and its Personnel in connection with the conduct of the Mill Owner’s Business.

Section 3.5           Rail Facilities. The Carbon Plant is served by existing rail facilities located on the Mill Real Property as identified on Exhibit B (such existing rail facilities as shown on Exhibit B (including, without limitation, the railcar repair and cleaning track) and any additional or replacement rail facilities in the future located on the Mill Real Property are referred to collectively as the “Rail Facilities”). The Ingevity Easement Rights shall include a non-exclusive right to use the Rail Facilities in connection with Ingevity’s Business for the purposes of switching, railcar storage, repair and cleaning and providing railcar deliveries and shipments to and from the Carbon Plant consistent with the day-to-day manner in which the Rail Facilities in existence as of the Effective Date were being used prior to the Effective Date.

Section 3.6           Continuous Assets and Party Wall. (a) Exhibit C sets forth the ownership of the Continuous Assets (including the Mill Owner Retained Assets) as of the Effective Date and, as described on Exhibit C, each party may own all or a portion of the Continuous Assets physically located on real property owned (or, in the case of the Carbon Plant Real Property, leased) by the other party (the “Co-located Continuous Assets”).

(b)          The Ingevity Easement Rights shall include the non-exclusive right: (i) for the Co-located Continuous Assets owned by Ingevity to remain on the Mill Owner Real Property at their current location or at such other location as the parties may agree, for use by Ingevity, (ii) to inspect the Co-located Continuous Assets owned by Ingevity and located on the Mill Owner Real Property, and (iii) to Maintain the Co-located Continuous Assets owned by Ingevity and located on the Mill Owner Real Property, except to the extent otherwise provided in the Services Agreement or in any subsequent written agreement between the Mill Owner and Ingevity.

(c)          The Mill Owner Easement Rights shall include the non-exclusive right: (i) for the Mill Owner Retained Assets and the Co-located Continuous Assets owned by the Mill Owner to remain on the Carbon Plant Real Property at their current location or at such other location as the parties may agree, for use by the Mill Owner, (ii) to inspect the Mill Owner Retained Assets and the Co-located Continuous Assets owned by the Mill Owner and located on the Carbon Plant Real Property, and (iii) to Maintain the Mill Owner Retained Assets and the Co-located Continuous Assets owned by the Mill Owner and located on the Carbon Plant Real Property.

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(d)          In the event either Ingevity or the Mill Owner fails to Maintain Co-located Continuous Assets located on the other party’s property, the other party on whose property such Co-located Continuous Assets are located shall have the right to inspect, Maintain, use and operate such Co-located Continuous Assets.

(e)          The Mill Owner and Ingevity each owns separately so much of the Party Wall as stands upon the Plant Owner’s property, subject to the provisions of this Lease. The Mill Owner Easement Rights and the Ingevity Easement Rights each shall include the right to use so much of the Party Wall as is owned by the other party for any purpose not inconsistent with the joint use of the Party Wall and the other provisions of this Lease and, subject to the provisions of the Services Agreement, the right to inspect and Maintain the portion of the Party Wall on the property of the other party. In the event of any damage to or destruction of the Party Wall, the expense of any repair, reconstruction or restoration shall be borne equally by the Mill Owner and Ingevity; however, this sharing shall not be construed to release either party from any liability for damages to or destruction of the Party Wall caused by that party’s negligence or willful misconduct, and any such damages or destruction so caused shall be the responsibility of the party at fault. Neither party shall, without the consent of the other party (which consent shall not unreasonably be withheld), make or cause to be made any openings in the Party Wall, decrease or increase the thickness of the Party Wall or add to or extend the Party Wall.

Section 3.7           Storm Drainage. (a) Certain storm water Utility Facilities are located on the Mill Real Property and the Carbon Plant Real Property as described on Exhibit C (“Storm Drainage Facilities”) and are used in transporting storm water through such property to the Mill’s wastewater treatment plant. The parties’ respective ownership of the Storm Drainage Facilities is described on Exhibit C.

(b)          The Mill Owner Easement Rights and the Ingevity Easement Rights each shall include a non-exclusive right to utilize the Storm Drainage Facilities that are located on the other party’s property for the sole purpose of transporting normal discharge storm water only (not sanitary or process water) through the other party’s property to the Mill’s wastewater treatment plant or to other Storm Drainage Facilities that lead to the Mill’s wastewater treatment plant in a manner reasonably consistent with the use of the Storm Drainage Facilities as of the Effective Date.

Section 3.8           Wastewater Lines. (a) Certain wastewater Utility Facilities are located on the Mill Real Property described on Exhibit C and are used in providing wastewater services to the Mill and the Carbon Plant (such facilities are collectively referred to as the “Wastewater Utility Facilities”) and certain wastewater Utility Facilities are located on the Carbon Plant Real Property as described on Exhibit C and are used by the Mill to transport its wastewater to the wastewater treatment plant. The parties’ respective ownership of the Wastewater Utility Facilities described on Exhibit C.

(b)          The Mill Owner Easement Rights and the Ingevity Easement Rights each shall include a non-exclusive right to utilize the Wastewater Utility Facilities located on the other party’s property for the sole purpose of transporting wastewater through the other party’s property to the Mill’s wastewater treatment plant or to other Wastewater Utility Facilities that lead to the wastewater treatment plant in a manner reasonably consistent with the use of the Wastewater Utility Facilities as of the Effective Date.

Section 3.9           Potable Water. (a) Certain potable water Utility Facilities are located on the Mill Real Property described on Exhibit C and are used in supplying potable water from the local water utility to the Carbon Plant, and certain potable water Utility Facilities are located on the Carbon Plant Real Property described on Exhibit C and are used in supplying potable water from the local water utility to the Mill (such Utility Facilities are collectively referred to as the “Potable Water Utility Facilities”). The parties’ respective ownership of the Potable Water Utility Facilities described on Exhibit C.

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(b)          The Mill Owner Easement Rights and the Ingevity Easement Rights each shall include a non-exclusive right to utilize the Potable Water Utility Facilities located on the other party’s property for the sole purpose of transporting potable water from the local water utility through the other party’s property to the Easement Right Holder’s property.

Section 3.10         Natural Gas Utility Facilities. (a) Certain natural gas Utility Facilities are located on the Mill Real Property and the Carbon Plant Real Property as shown on Exhibit D and are used in supplying natural gas to the Mill and the Carbon Plant. A portion of those natural gas Utility Facilities, as indicated on Exhibit D, serve both the Mill and the Carbon Plant and are owned by the Mill Owner (the “Mill Owner Natural Gas Utility Facilities”). The remainder of the natural gas Utility Facilities shown on Exhibit D are owned by Ingevity but are located on the Mill Owner’s Property (the “Ingevity Natural Gas Utility Facilities”).

(b)          As of the Effective Date, the Mill Owner is providing natural gas service to Ingevity under the Services Agreement pursuant to a temporary exemption from regulation as a public utility granted by the Virginia regulatory authority to allow Ingevity to have constructed, at Ingevity’s expense, a 46,000 dth/day capacity direct pipeline connecting the Carbon Plant to the pipeline of the local natural gas utility. The new direct Ingevity pipeline will begin at the local natural gas utility’s gas distribution pipeline at the Mill’s metering station (where the local natural gas utility will install, at Ingevity’s expense, a separate meter for the new pipeline) and will follow the route of the Mill’s high pressure natural gas pipeline from the metering station to the intra-plant pipe bridge over the Jackson River near the Carbon Plant and will then follow the Mill low pressure line from the pipe bridge to the point at which the gas pipeline serving only the Carbon Plant splits off of the Mill low pressure line (upon completion of the new Ingevity gas pipeline, the current pipeline serving only the Carbon Plant will be disconnected from the Mill Owner's low pressure pipeline and will be connected to the new Ingevity pipeline. The portion of the new direct gas pipeline on the Mill Real Property shall be constructed in accordance with Section 3.12 and, upon completion, shall be included in the Ingevity Natural Gas Utility Facilities for purposes of this Lease.

(c)          The Ingevity Easement Rights shall include: (i) a non-exclusive right for the Ingevity Natural Gas Utility Facilities to remain on the Mill Real Property at their current location or at such other location as the parties may agree, and (ii) subject to clause (ii) of the following sentence, an exclusive right to use the Ingevity Natural Gas Utility Facilities to transport natural gas purchased by Ingevity to the Carbon Plant. The Mill Owner Easement Rights shall include: (i) a non-exclusive right for the Mill Owner Natural Gas Utility Facilities to remain on the Carbon Plant Real Property at their current location or at such other location as the parties may agree, and (ii) the right to use the Ingevity Natural Gas Utility Facilities to transport natural gas to the Carbon Plant during any period in which the Mill Owner is providing natural gas service to Ingevity under the Services Agreement.

Section 3.11         Unknown Other Assets. In the event that, after the Effective Date, the parties determine that there are other Continuous Assets or other non-Continuous Assets serving one of the parties that are completely or partially located on the other party’s property that are not covered by any of Sections 3.4 through 3.10, the parties shall reasonably negotiate to amend this Lease to accommodate, in a manner reasonably consistent with the provisions set forth in Sections 3.1 through 3.10: (i) the ownership of such other Continuous Assets or non-Continuous Assets, (ii) the continued location of such other Continuous Assets or non-Continuous Assets on the other party’s property, and (iii) the right and obligation to Access, inspect, Maintain, use and operate such other Continuous Assets or non-Continuous Assets.

Section 3.12         Future Utility Facilities. In the event that Ingevity desires to install electrical distribution Utility Facilities or natural gas Utility Facilities directly connecting the Utility Facilities on

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the Carbon Plant Real Property with Utility Facilities owned by the local public utility or utilities serving the area, then the Ingevity Easement Rights shall include the right to locate such Utility Facilities over, under and through the Mill Real Property, at a location or loctions reasonably acceptable to Ingevity and the Mill Owner, and to inspect, Maintain, use and operate such Utility Facilities to serve the Carbon Plant. The Mill Owner shall have the right to review and approve the plans and specifications for the location of such Utility Facilities on the Mill Real Property, which location shall minimize, to the extent reasonably possible, the disruption to the Mill Owner’s Business and facilities and which approval shall not be unreasonably withheld or unduly delayed. All construction of such Utility Facilities on the Mill Real Property may occur only at the locations so approved by the Mill Owner and shall be in compliance with all applicable Laws and the Construction Standards.

Section 3.13         No Rights to Obstruct; Use of Property Subject to Easement Rights. (a) Neither Plant Owner shall obstruct, or permit the obstruction of, the reasonable exercise on the Plant Owner’s property of Access Rights or other Easement Rights by the Easement Right Holder, including by permitting the storage of property of any kind or the parking of any vehicles (except to the extent of a shared parking lot), or the blockage of any Rail Facilities; provided, however, that implementation of the Plant Owner’s Rules and Regulations, with reasonable notice to the Easement Right Holder, shall not constitute obstruction of the exercise of Access Rights or other Easement Rights.

(b)          In the exercise of an Easement Right, an Easement Right Holder shall not unreasonably impair the right of the Plant Owner to use its property in any manner that does not materially impair the exercise by the Easement Right Holder of its Easement Rights. The Easement Rights granted under this Lease shall not restrict the Plant Owner from using the areas above, below or adjacent to the area covered by the other party’s Easement Rights, provided that the Plant Owner’s use of such area shall not unreasonably interfere with the beneficial use and enjoyment of the Easement Rights by the Easement Right Holder.

Section 3.14         Compliance. In the exercise of Easement Rights granted in, and in the performance of the obligations imposed by, this Lease, an Easement Right Holder shall: (a) comply with all applicable Laws; (b) comply with the Plant Owner’s Rules and Regulations; (c) comply with all applicable reasonable requirements of all insurance carriers having insurance then in effect as to which Plant Owner is a named insured and of which the Easement Right Holder has reasonable prior written notice; (d) not materially interrupt or interfere with the operations of the Plant Owner within the Plant Owner’s Property; and (e) use all Utility Facilities and Access Areas in a safe and prudent manner consistent with the purposes and capacities for which they were designed and standard industry practices.

Section 3.15         Exercise of Maintenance Obligations and Rights. (a) Whenever either the Mill Owner or Ingevity has, pursuant to the terms and conditions of this Lease, the Services Agreement or any other written agreement between them, any right or obligation to Maintain any asset, such party shall: (i) maintain and preserve such asset in good and safe operating condition and repair and in accordance with applicable Laws, (ii) complete any Maintenance as expeditiously as is reasonably feasible so as to minimize interference with the business operations of the other party, and (iii) otherwise use commercially reasonable efforts not to materially interfere with or interrupt the operations of the other party. All such Maintenance shall be completed in a good and workmanlike manner and any damages caused to the other party’s property by such Maintenance shall be restored at the sole cost and expense of the party obligated to perform such Maintenance. Without limiting the generality of the foregoing: (i) the Mill Owner and its Personnel shall have the right, at all reasonable times after prior reasonable notice to Ingevity (and at any time whatsoever in the event of any Emergency), to inspect the Utility Facilities located within the Carbon Plant Real Property that are used in connection with the supply of any Utility Product to the Mill or the provision of any service by the Mill Owner to Ingevity under the Services Agreement for any purpose whatsoever reasonably relating to the safety, protection and preservation of

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such Utility Facilities or the Mill or relating to the exercise of the Mill Owner’s rights or the performance of the Mill Owner’s obligations pursuant to the Services Agreement or this Lease; and (ii) Ingevity and its Personnel shall have the right, at all reasonable times after prior reasonable notice to the Mill Owner (and at any time whatsoever in the event of any Emergency), to inspect the Utility Facilities located within the Mill Real Property that are used in connection with the supply of any Utility Product to the Carbon Plant for any purpose whatsoever relating to the safety, protection and preservation of such Utility Facilities or the Carbon Plant or relating to the exercise of Ingevity’s rights or the performance of Ingevity’s obligations pursuant to the Services Agreement or this Lease. Notwithstanding the foregoing, each party shall have the right to: (A) reasonably limit the other party’s right to Access and inspect any areas that such party reasonably determines are confidential or secure areas, and (B) have representatives present during any inspection by the other party. Ingevity shall deliver to the Mill Owner prompt written notice of any repairs to any Utility Facilities located on the Carbon Plant Real Property required to be made by the Mill Owner under the Services Agreement, this Lease or any other written agreement between them and any repairs required to be made by Ingevity that are reasonably expected to affect the supply of Utilities to the Mill, upon Ingevity’s obtaining knowledge thereof. The Mill Owner shall deliver to Ingevity prompt written notice of any repairs to any Utility Facilities located on the Mill Real Property required to be made by Ingevity under the Services Agreement, this Lease or any other written agreement between them, and any repairs required to be made by the Mill Owner that are reasonably expected to affect the supply of Utilities to the Carbon Plant, upon the Mill Owner’s obtaining knowledge thereof.

(b)          Each party shall have a temporary and non-exclusive construction right (the “Temporary Construction Right”) across, over, on, under and through those portions of the Carbon Plant Real Property (in the case of the Mill Owner) or the Mill Real Property (in the case of Ingevity) as may be reasonably necessary in connection with the design, location, construction, installation, repair, maintenance, replacement and restoration of any component or element of any Utility Facilities located on the other party’s property, or in connection with any Maintenance on such property or on any equipment located on such property as deemed reasonably necessary or desirable by such party, including the Maintenance of buildings or other improvements along the boundary lines of the parties’ properties, and including the temporary placement, storage and depositing of soil, construction materials, vehicles and equipment associated therewith (the “Temporary Construction Activities”); provided, that a party conducting Temporary Construction Activities shall provide reasonable advance written notice to the other party and shall not unreasonably interfere with the business operations of the other party. Each party shall reasonably cooperate with the other party to determine a mutually agreeable location for such Temporary Construction Activities to the extent such activities take place on such other party’s property. Any construction completed under this Lease shall be completed with diligence and in accordance with applicable Laws and the Construction Standards.

Section 3.16         Mechanics’ Liens. An Easement Right Holder shall not permit any mechanics’ liens or similar liens to exist upon the other party’s property (including any Utility Facilities located on the other party’s property) by reason of any act or omission of the Easement Right Holder or its Personnel. If any such lien resulting from any act or omission of the Easement Holder or its Personnel shall at any time exist upon the other party’s property, the Easement Right Holder shall indemnify, defend and save the Plant Owner and the Plant Owner’s property harmless from and against such lien and all suits or judgments arising therefrom. The Easement Right Holder shall cause any such lien resulting from any act or omission of the Easement Holder or its Personnel that at any time exists upon the other party’s property to be removed of record by payment, bonding, discharge or otherwise as permitted by law within 30 days after notice by the Plant Owner to the Easement Right Holder of the existence of such lien of record.

Section 3.17         Right to Cure Defaults Under Article 3. If either party has materially breached any of its obligations under this Lease and has failed to fully cure such breach after written notice of such

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breach, the non-breaching party, in addition to the remedies set forth in Section 4.2, shall have the right, but not the obligation, exercisable upon 14 days’ prior written notice (except in the event of an Emergency, or where such breach is likely to imminently and adversely affect the business operations of the non-defaulting party, in either which case such notice shall be given as soon as reasonably possible) to the defaulting party, to cure such breach and all recurrent and related breaches without waiving or releasing the defaulting party from any liability under this Lease for such breaches. The non-breaching party shall have a temporary and non-exclusive right across, over, on, under and through those portions of the breaching party’s property, but only to the extent, reasonably necessary to cure the breach, which right shall remain in effect only for such time as is necessary to cure such breach. All sums paid, advanced or expended pursuant to this Section 3.17 and all costs and expenses incurred by the non-breaching party in connection therewith (including reasonable attorneys’ fees) shall be repaid by the breaching party, on demand. The breaching party shall have the right to have a representative present while the non-breaching party conducts any work on the breaching party’s property to cure any breach pursuant to this Section 3.17; provided, that the breaching party shall not interfere with the efforts of the non-breaching party to cure such breach.

Section 3.18         Limitations Upon Easement Rights; Reservations by the Plant Owner (including Relocations). Notwithstanding any Easement Rights created under this Lease, each party shall retain all rights to use its property, subject to the other terms and conditions of this Lease. Each Easement Right granted in this Article 3 is granted solely for the purposes expressly stated in this Article 3 and for no other purpose whatsoever, and each party hereby reserves to itself, and its successors-in-interest in and to its property, the right to use its property for any and all purposes whatsoever not inconsistent with such Easement Right and its interest in its property. Without limiting the generality of the foregoing, each party, with respect to the property owned or leased by it, reserves to itself and its successors-in-interest in and to its property the following rights and privileges:

(a)          the right to construct, reconstruct, install, use, operate, maintain, replace, remove and relocate personal property or improvements to real property within property, whether above, at or below grade (subject to Section 3.18(b)) with respect to any Utility Facilities or Access Areas on its property as to which the other party has an Easement Right pursuant to this Article 3;

(b)          with respect to those portions of any Utility Facilities or Access Area as to which the other party is granted any Easement Right pursuant to this Article 3, the right, at such other party’s sole expense, to require the Easement Right Holder to Relocate the same, or any portion thereof (whether before, during or after such Utility Facility or Access Area is Relocated, a “Relocated Facility”); provided, however, that:

(i)          the Plant Owner shall provide the Easement Right Holder at least 60 days’ prior written notice of the requirement to Relocate and shall afford to the Easement Right Holder a reasonable time period thereafter to effect such relocation;

(ii)         such relocation shall be without any material interference or interruption of the Easement Right Holder’s rights to use such Relocated Facility or any increase in the Easement Right Holder’s cost of, or the operation, Maintenance or use and enjoyment of such Relocated Facility;

(iii)        the Plant Owner shall reimburse the Easement Right Holder for all reasonable costs and expenses incurred by the Easement Right Holder in connection with such relocation;

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(iv)        whenever a Relocated Facility has been Relocated: (A) the Easement Right Holder shall have the same Easement Rights, subject to the same terms and conditions, under this Article 3 in that portion of the other party’s property within which the Relocated Facility is so Relocated as was granted in this Article 3 to the Easement Right Holder with respect to such Relocated Facility before such Relocated Facility was so Relocated; and (B) the Easement Rights with respect to such Relocated Facility prior to being relocated that were granted to the Easement Right Holder in this Article 3;

(v)         the Relocated Facility, after the Relocated Facility has been so Relocated, shall be in a condition approximately equal in quality to that before such relocation and shall be of such a nature, status, condition, capacity, level of service volume, output or composition as to provide substantially equivalent benefits to the Easement Right Holder as such Relocated Facility provided to the Easement Right Holder before such Relocated Facility was relocated;

(vi)        the Relocated Facility shall be Relocated in strict compliance with all applicable Laws; and

(vii)       after such Relocated Facility has been so Relocated, the Plant Owner and the Easement Right Holder shall enter into a written supplemental agreement in recordable form that identifies the location of such Relocated Facility within the Plant Owner’s property as so Relocated and confirms the respective rights and easements which have been terminated and created pursuant to this Section 3.18(b).

Section 3.19         Termination of Easement Rights. Any particular Easement Right (or portion thereof) shall terminate when such Easement Right has been Abandoned, and thereupon the Easement Right Holder shall no longer have the Easement Right (or portion thereof) that has been Abandoned. Effective upon such Abandonment and termination, title to any Utility Facilities associated with such Abandoned Easement Right shall revert to and/or automatically be conveyed to the Plant Owner of the property subject to such Abandoned Easement Right, and the Easement Right Holder shall have no further liability with respect to such Utility Facilities; provided, however, that the the Easement Right Holder shall, at the Easement Right Holder’s sole expense, promptly Cap-Off such Utility Facilities (or such portion or portions thereof) or shall, if requested by the Plant Owner of the property subject to such Abandoned Easement Right, Remove such Utility Facilities and Restore the property affected thereby. Each party shall, at the request of the other party, execute a recordable instrument evidencing such transfer of title to any such Abandoned Utility Facilities.

Section 3.20         Article 3 Remedies. In the event of the failure or refusal of a party to perform its obligations or covenants under this Article 3, each of such party’s lenders shall have the right (to the extent provided in an agreement between such party and such lender), but shall not be obligated, to perform such covenants or obligations, and performance by such lenders shall be deemed to be performance by such party.

Section 3.21         Actions in Connection with a Work Stoppages. Notwithstanding the other provisions of this Article 3, in the event either the Mill Owner or Ingevity reasonably determines that a risk of a strike or work stoppage affecting either the Mill or the Carbon Plant, or both, exists, it shall notify the other party in writing of such risk, and both parties shall use reasonable efforts so that, commencing as soon thereafter as is reasonably practical (and, in any event, within ten days thereafter) and through the duration of such strike or work stoppage: (i) Ingevity shall not permit its Personnel to use parking lots located on the Mill Real Property and the Mill Owner shall not allow its Personnel to use parking lots located on the Carbon Plant Real Property, (ii) the Mill Owner and Ingevity each shall cause

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its respective Personnel to use the Access route designated for that party’s use on Exhibit G and shall not permit its Personnel to use the Access route designated for the use of the other party on Exhibit G, and (iii) the Mill Owner shall open a separate gate where indicated on Exhibit G to allow Ingevity’s Personnel to Access the portion of the Carbon Plant located inside of the Mill’s security fence.

Article 4

TERM; HOLDING OVER

Section 4.1           Term. The term of this Lease (the “Term”) shall commence on the Effective Date and, unless earlier terminated pursuant to Section 4.2, shall continue until the 50th anniversary of the Effective Date.

Section 4.2           Termination. (a) This Lease may be terminated prior to the end of the Term in the following manner:

(i)          at any time by the mutual written agreement of the parties;

(ii)         as provided in Article 22, upon exercise of the Purchase Option by Ingevity;

(iii)        as provided in Section 12.1 or Section 12.2;

(iv)        upon at least six months prior written notice of termination, given at the election of Ingevity at any time following termination of the Services Agreement for any reason;

(v)         upon at least six months prior written notice of termination, given by Ingevity effective on or after the date of the Permanent Closure of the Carbon Plant;

(vi)        upon at least six months prior written notice of termination, given by the Mill Owner effective on or after the date of the Permanent Closure of the Carbon Plant (provided that such termination shall not become effective prior to the date the Carbon Plant is closed);

(vii)       by either party giving written notice to the other following a material breach by the other party (other than a breach by Ingevity of an obligation to pay any money obligation under this Lease) of any of its obligations under this Lease, if the other party has failed to fully cure such breach within 60 days after written notice of such breach; provided, however, that if there is a bona fide dispute between the parties as to whether a material breach has occurred, termination of this Lease shall not occur until the date on which it is determined, through the Escalation Process or otherwise, that a material breach has occurred and, if the breach is capable of being cured, an additional period of 60 days has passed following such determination during which the breach has not been cured;

(viii)      by the Mill Owner giving written notice to Ingevity, if Ingevity fails to pay any amount due under this Lease (including, without limitation, Taxes payable by Ingevity pursuant to Article 7) when due and such failure is not cured within 30 days following receipt of written notice from the Mill Owner; provided that if there is a bona fide dispute between the parties as to whether a payment was due, Ingevity shall not be deemed to have failed to make such payment until it is determined, through the Escalation Process or otherwise, that the payment is due and owing and an additional 30 days have passed following such determination.

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(ix)         by the Mill Owner giving written notice to Ingevity, if Ingevity defaults in the performance of a material obligation under the Services Agreement and such default continues beyond any cure period provided in the Services Agreement and is not waived by the Mill Owner, thereby giving the Mill Owner the right to terminate the Services Agreement; or

(x)          by Ingevity giving written notice to the Mill Owner, if the Mill Owner defaults in the performance of a material obligation under the Services Agreement and such default continues beyond any cure period provided in the Services Agreement and is not waived by Ingevity, thereby giving Ingevity the right to terminate the Services Agreement.

(b)          If the Mill Owner gives Ingevity written notice of termination of this Lease pursuant to any subparagraph of Section 4.2(a), Ingevity shall have the right to exercise the Purchase Option pursuant to Article 22 within 30 days after Ingevity receives such notice of termination, notwithstanding the termination of this Lease, so long as Ingevity cures, in all material respects, at or prior to the Purchase Option Closing, any material breaches by Ingevity of this Lease. Upon termination of this Lease for any reason, the other rights and obligations of the parties under this Lease (other than the rights and obligations of the parties under Articles 11, 14, 20, 22 and 23 and the right of the Mill Owner to receive payment for all amounts due under this Lease for periods prior to such termination) thereupon also shall terminate.

Section 4.3           Payment of Fair Market Value. (a) If the Mill Owner terminates this Lease pursuant to Section 4.2(a)(vi), Section 4.2(a)(vii), Section 4.2(a)(viii) or Section 4.2(a)(ix) and Ingevity does not thereafter exercise any right it may have to purchase the Leased Premises pursuant to the Purchase Option, the Mill Owner shall pay to Ingevity, within 30 days after final determination of the Fair Market Value of the Leased Premises pursuant to Section 4.3(b), an amount equal to the Fair Market Value of the Leased Premises as of the Termination Date, less all amounts due from Ingevity to the Mill Owner under this Lease with respect to periods prior to the Termination Date (including, without limitation, the amount of any unpaid claims by the Mill Owner against Ingevity for indemnification under the provisions of this Lease or the Services Agreement).

(b)          The Fair Market Value of the Leased Premises as of the Termination Date shall be determined by mutual agreement of the Mill Owner and Ingevity or, if the Mill Owner and Ingevity are unable to agree on the Fair Market Value of the Leased Premises within 60 days after the Termination Date, the Appraised Value of the Leased Premises as of the Termination Date shall be determined by appraisers selected as follows: Within 15 days after such 60 day period expires, the Mill Owner and Ingevity each shall appoint an appraiser and the Fair Market Value of the Leased Premises shall be determined by the two appraisers so appointed. If the higher of the two appraisals is no more than 10% greater than the lower appraisal, the Fair Market Value of the Leased Premises shall be the average of the two appraisals. If the higher appraisal is more than 10% greater than the lower appraisal, the two appraisers shall select a third appraiser from a list of appraisers approved by both parties (which approval shall not be unreasonably withheld). The third appraiser shall then determine the Fair Market Value of the Leased Premises as of the Termination Date. All appraisal costs and expenses shall be shared by the parties equally. All appraisers shall be qualified appraisers of industrial properties in the Virginia region The appraisers shall give prompt written notice of the determination of the Fair Market Value of the Leased Premises pursuant to this Section 4.3(b). The determination of the Fair Market Value of the Leased Premises pursuant to this Section 4.3(b) shall be conclusive and incontestably binding upon both parties and shall be enforceable in any court having jurisdiction.

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Article 5

RENT

Section 5.1           Rent. This Lease is intended to be a transfer of all of the economic benefits and burdens of owning the Carbon Plant Real Property from the Mill Owner to Ingevity (and the retention of the Carbon Plant Real Property by Ingevity for U.S. federal income Tax purposes); accordingly, Ingevity shall pay the Mill Owner for the lease of the Leased Premises an annual rental (the “Rent”) in the amount of $1.00, which shall be paid in full for the entire Term in advance and shall be included in the Mill Owner’s invoice for, and shall be paid in accordance with the payment terms for, the payment for the Carbon Plant Services under the Services Agreement for the first calendar month after the Effective Date.

Article 6

CARBON PLANT SERVICES

Section 6.1           Services Agreement. The Mill Owner shall provide to Ingevity for the benefit of the Carbon Plant and the Carbon Plant Real Property the Carbon Plant Services, and Ingevity shall pay for the Carbon Plant Services, all as provided in the Services Agreement.

Section 6.2           Maintenance Obligations. The Services Agreement provides for the allocation of responsibility to perform and pay for the costs of Maintenance of certain assets within the Mill and the Carbon Plant Real Property, including, without limitation, assets with respect to which Easement Rights are granted under this Lease, such as the Parking Areas, Railroad Spur Tracks, Co-located Continuous Assets and Utility Facilities. For so long as the Services Agreement remains in effect, the Services Agreement shall govern with respect to the allocation of responsibility to perform and pay for the costs of Maintenance of such assets. At such time as the Services Agreement no longer is in effect, the allocation of responsibility to perform and pay for the costs of Maintenance of such assets shall continue as provided under the Services Agreement immediately prior to the date the Services Agreement is no longer in effect (or in such other manner as the parties may agree in writing), and the parties shall negotiate diligently and in good faith to include such provisions in an amendment to this Lease.

Article 7

TAXES

Section 7.1           Ingevity to Pay Taxes. Ingevity shall pay all Taxes against the Carbon Plant and the Carbon Plant Real Property during the Term and a pro rata portion of the Taxes during the year in which the Effective Date occurs and the year in which this Lease expires; such pro rata share to be determined for the portion of the year following the Effective Date and as of the date this Lease terminates, respectively, in accordance with the method described in this Section 7.1. Ingevity shall not be obligated to pay any installment of any special assessment that may be assessed, levied or confirmed during the Term but does not fall due and is not required to be paid until after the expiration of this Lease, except for a pro rata share of the installment(s) becoming payable next following the expiration of this Lease. To the extent that all or part of the Carbon Plant Real Property is a separate real estate Tax parcel, Mill Owner shall cause all Tax bills to be sent by the applicable Governmental Authority directly to Ingevity or shall deliver all such Tax bills directly to Ingevity. If any of the Carbon Plant Real Property is included in a real estate Tax parcel with other land owned by the Mill Owner, Ingevity shall be required to pay only that portion of the Taxes for such real estate Tax parcel equal to the proportion that the acreage of the Carbon Plant Real Property contained in such Tax parcel bears to the total acreage contained in such real estate Tax parcel.

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Section 7.2           Taxes Defined. As used in this Lease, the term “Taxes” means: (a) all real estate taxes and assessments, whether general or special, levied upon or with respect to the Carbon Plant Real Property, (b) all fee-in-lieu of tax payments due with respect to the Carbon Plant Real Property, if any, and (c) any and all personal property taxes, improvement taxes, fee-in-lieu of tax payments, if any, and all other taxes due with respect to the Carbon Plant, in each case imposed at any time during the term of this Lease by any Governmental Authority. The term “Taxes” shall not include, and Ingevity shall not be required to pay, any franchise, estate, inheritance, transfer, income or similar tax of the Mill Owner, including, but not limited to, any income tax imposed with respect to the Mill Owner’s income from the Leased Premises.

Section 7.3           Payment of Taxes. If Taxes for the Carbon Plant Real Property are to be paid directly by Ingevity, the Taxes to be paid by Ingevity shall be paid before any delinquency can occur, provided that the Mill Owner has sent the Tax bills to Ingevity, the Tax bills are sent directly to Ingevity by the Governmental Authority as provided in Section 7.1, or Ingevity otherwise is in actual receipt of the Tax bills. Upon written request by the Mill Owner, Ingevity shall promptly provide to the Mill Owner reasonable proof of payment. Any Taxes owed by Ingevity pursuant to the last sentence of Section 7.1 shall be paid to the Mill Owner within 30 days after receipt by Ingevity of an invoice from the Mill Owner, together with a copy of the real estate Tax bill and a calculation of the Taxes due properly made in accordance with Section 7.1.

Section 7.4           Tax Notices. The Mill Owner shall promptly deliver to Ingevity any and all Tax notices or assessments the Mill Owner may receive relating to the Carbon Plant Real Property or the Carbon Plant.

Article 8

USE; COMPLIANCE WITH LAWS; MECHANIC’S LIENS

Section 8.1           Permitted Uses. During the Term, Ingevity shall use the Leased Premises solely for the purpose of operating and servicing the Carbon Plant (including, without limitation, manufacturing, producing, unloading, upgrading and reprocessing carbon and other products and the handling and storage of all equipment and materials (including inventories of raw materials, work in process, finished goods and supplies) related to such operations, services and processes and for related purposes) in substantially the same manner as it was being used on the Effective Date and for any expansion of such business that does not materially and adversely affect the operation of the Mill or the use of the Mill Owner Easement Rights. Ingevity shall not use the Leased Premises for any expansion of such business that is reasonably likely to materially and adversely affect the operation of the Mill or the use of the Mill Owner Easement Rights (including, without limitation, as a result of any material additional requirement reasonably likely to be imposed on the Mill Owner under any Environmental Law) without the prior written consent of the Mill Owner.

Section 8.2           Compliance with Laws. During the Term, Ingevity shall comply with and cause the Carbon Plant and the Carbon Plant Real Property to be in compliance with all Laws of any Governmental Authority applicable to the use of the Carbon Plant and the Carbon Plant Real Property by Ingevity. Except as otherwise provided in the Services Agreement, if any addition, alteration, change, repair or other work of any nature, structural or otherwise, shall be required or ordered or become necessary at any time during the Term because of any of these requirements, the entire expense of the same, irrespective of when the same shall be incurred or become due, shall be the sole liability of Ingevity. Notwithstanding anything herein to the contrary, in no event shall Ingevity be required to comply with any Laws, or make any addition, alteration, change, repair or other work, with respect to any

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machinery, personal property, equipment or other items which are owned by the Mill Owner and located on the Carbon Plant Real Property.

Section 8.3           Permitted Contests. Ingevity shall have the right to contest its obligations to comply with Laws as permitted by and in accordance with the Services Agreement.

Section 8.4           Mechanic’s Liens on Leased Premises. Ingevity shall not create or permit to be created or to remain, and shall promptly discharge, or cause a bond to be issued securing payment of, at its sole cost and expense, any lien, encumbrance or charge upon the Leased Premises which arises by reason of any labor or materials furnished or claimed to have been furnished to Ingevity or by reason of any construction, addition, alteration or repair of any part of the Carbon Plant or the Carbon Plant Real Property. If any mechanic’s lien is filed against the Leased Premises as a result of Ingevity’s actions or omissions, Ingevity shall either (a) pay the lien and obtain a discharge of the same or (b) furnish to the Mill Owner adequate protection against loss or damage on account of the lien by delivering to the Mill Owner a sufficient surety bond or other security reasonably satisfactory to the Mill Owner, and if Ingevity fails to do either of the foregoing, the Mill Owner may pay the lien and obtain a discharge of the same and charge the amount paid and its reasonable expenses to Ingevity as additional Rent. In connection with any work on the Carbon Plant Real Property performed by or on behalf of Ingevity, Ingevity shall comply with all mechanic’s lien Laws of the Commonwealth of Virginia, including any Law requiring notices to be posted or recorded.

Article 9

ALTERATIONS AND ADDITIONAL IMPROVEMENTS; REPAIR AND MAINTENANCE

Section 9.1           Additional Improvements. During the Term, Ingevity shall have the right to construct or cause others to construct additional improvements on the Carbon Plant Real Property without the consent of the Mill Owner (except as hereinafter provided); however, all such additional improvements shall be constructed in accordance with the following standards (the “Construction Standards”): (a) all improvements shall be constructed in a good and workmanlike manner and in compliance with industry standards for work of a comparable nature; (b) all work shall be constructed in accordance with all applicable Laws; (c) Ingevity at its expense shall obtain all necessary permits and approvals for the improvements from the governmental authorities having jurisdiction; (d) during construction, Ingevity shall maintain in force and effect builder’s risk insurance covering the improvements and liabilities arising during the construction; (e) the work shall not unreasonably interfere with the operation of the Mill or any of the Mill Owner Easement Rights in any material respect, and (f) the improvements shall be prosecuted with due diligence to completion. Notwithstanding anything herein to the contrary, the prior written consent of the Mill Owner shall be required prior to the construction of any additional improvement on the Carbon Plant Real Property that would be reasonably likely to have a material adverse effect on the Mill Owner, the Mill Owner’s Easement Rights or the operation of the Mill (including, without limitation, as a result of any material additional requirement reasonably likely to be imposed on the Mill Owner under any Environmental Law).

Section 9.2           Alterations. At any time during the Term, Ingevity shall have the right to make any alterations, modifications and replacements to any portion of the Carbon Plant, provided that the alterations, modifications and replacements shall be constructed in accordance with the Construction Standards. All additions and improvements, alterations, modifications and replacements made in accordance with Section 9.1 and this Section 9.2 shall become part of the Carbon Plant and shall remain the property of Ingevity.

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Section 9.3           Repair and Maintenance. (a)          Throughout the Term, but subject to the terms and conditions of the Services Agreement and the other provisions of this Lease, Ingevity, at its sole expense, shall keep and maintain the Carbon Plant and the Carbon Plant Real Property in such repair and condition and shall make such repairs, replacements and renewals, whether structural or non-structural, foreseen or unforeseen, ordinary or extraordinary, as Ingevity may, in its sole and absolute discretion, deem necessary or appropriate to put or maintain the Carbon Plant and the Carbon Plant Real Property in a state of repair and condition sufficient for use by Ingevity. Except to the extent provided in the Services Agreement, the Mill Owner shall not be required to maintain, repair or rebuild all or any part of the Carbon Plant or the Carbon Plant Real Property.

(b)          The Mill Owner shall maintain in accordance with the Services Agreement any non-real property assets owned by the Mill Owner which are located on the Carbon Plant Real Property.

Article 10

INSURANCE

Section 10.1         Insurance. (a) The Mill Owner and Ingevity each shall maintain, during the Term (but subject to revision at the end of the policy term of the applicable policy through review by the Operating Council), at such party’s sole expense, insurance of the following types in at least the amounts specified:

(i)          Commercial General Liability Occurrence insurance coverage with limits of liability of $1,000,000 per occurrence and $2,000,000 general aggregate. Such insurance shall include the other party, its Affiliates and their respective directors, officers and employees as additional insureds and shall include a waiver of any rights of subrogation against the other party and its directors, officers and employees.

(ii)         Commercial Automobile Liability insurance coverage for any automobile used in the performance of such party’s obligations under this Lease with limits of liability of $1,000,000 combined single limit. Such insurance shall include the other party, its Affiliates and their respective directors, officers and employees as additional insureds and shall include a waiver of any right of subrogation against the other party and its directors, officers and employees.

(iii)        Workers’ Compensation insurance coverage covering all persons providing services to the other party under this Lease. Such insurance (which may consist of a state-approved program of self-insurance) shall satisfy all applicable statutory requirements and be in accordance with the laws of the state or states in which the party is operating under this Lease, shall include an Alternate Employer Endorsement naming the other party as the alternate employer and shall include a waiver of any right of subrogation against the other party and its directors, officers and employees.

(iv)        Employer’s Liability insurance coverage with limits of: (x) bodily injury by accident — $1,000,000 each accident, (y) bodily injury by disease — $1,000,000 each employee, and (z) bodily injury by disease — $1,000,000 policy limit.

(v)         Excess Umbrella Liability insurance coverage with limits of liability of $10,000,000 per occurrence, with excess limits provided for the Commercial General Liability Occurrence, Automobile Liability and Employer’s Liability insurance coverages required under this Section 10.1. Such insurance shall include the other party, its Affiliates and their respective

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directors, officers and employees as additional insureds and shall include a waiver of any right of subrogation against the other party and its directors, officers and employees.

(b)          All insurance companies providing insurance required by this Section 10.1 must be authorized to do business in each state in which the operations of the insured party under this Lease are conducted and must be rated “A-” or better with a financial rating of “VII” or better in the most recent edition of the A.M. Best Rating Guide (or, in the event such rating guide is no longer published, or such ratings no longer are published in such rating guide, such other published rating of insurance companies as the parties mutually determine). If a captive entity is used to satisfy these insurance requirements, the captive entity shall provide a letter of good standing.

(c)          Each party shall use commercially reasonable efforts to require that all policies of insurance which such party is required to maintain under this Section 10.1 shall provide for 30 days prior written notice of cancellation or non-renewal to the other party under this Lease. Upon this Section 10 becoming effective pursuant to Section 10.1(f), each party shall provide to the other certificates evidencing all insurance coverages it is required to maintain under this Lease, and shall deliver renewal certificates within 10 days of renewal of any required insurance throughout the Term of the Lease; provided, however, that either the Mill Owner or Ingevity may, with notice to the other, satisfy such obligation by making such certificates available on the website of the party providing the certificate or an Affiliate. Any and all collateral required by an insurance carrier or a state agency and all deductibles or self-insured retentions on referenced insurance coverages must be borne by the first named insured party. The insurance required herein will not be limited by any limitations expressed in the indemnification language in this Lease or any limitation placed on the indemnity therein given as a matter of Law.

(d)          Failure of either party to maintain insurance as required by this Lease, to provide evidence of such insurance or to notify the other party of any breach by such other party of the provisions of this Section 10.1 shall not constitute a waiver of any such requirements to maintain insurance.

(e)          Each party shall be responsible for risk of loss of, and damage to, raw material, equipment or Co-located Continuous Asset of the other party in such party’s possession, custody or under its control, except to the extent that such loss or damage was caused by the acts or omissions of the other party or its agents.

(f)          Notwithstanding anything in the contrary in this Lease, so long as the Services Agreement remains in effect, the parties’ respective obligation to maintain insurance shall be governed by Article 10 of the Services Agreement and not this Section 10.1.

Article 11

WAIVER OF SUBROGATION; INDEMNIFICATION ; ENVIRONMENTAL LIABILITIES

Section 11.1         Limitation of Liability and Waiver of Subrogation. (a) Except as otherwise expressly provided in Section 11.3(ii), Section 11.3(iii), Section 11.3(iv) and Section 11.4, the Mill Owner shall not be liable to Ingevity for:

(i)          Losses to any buildings, improvements, fixtures, furnishings, equipment or other personal property (“Property”) located or found on the Carbon Plant Real Property (except for Losses to Property owned by third parties, which shall be subject to Section 11.3(v)), notwithstanding that such Losses are caused by, result from or are attributable to any act or omission of the Mill Owner or any servant, agent, employee, director, officer, subcontractor or supplier (“Agent”) of the Mill Owner;

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(ii)         any Losses arising from bodily injury or death to any employee of Ingevity occurring on the Mill Real Property, notwithstanding that such Losses are caused by, result from or are attributable to any action or omission of the Mill Owner or any Agent of the Mill Owner; and

(iii)        any Loss caused by Ingevity to Property owned by third parties.

Ingevity hereby waives all rights of subrogation against the Mill Owner with respect to the matters described in this Section 11.1(a).

(b)          Except as otherwise expressly provided in Section 11.2(ii), Section 11.2(iii), Section 11.2(iv), and Section 11.4, Ingevity shall not be liable to the Mill Owner for:

(i)          any Losses to any Property located or found on the Mill Real Property (except for Losses to Property owned by third parties, which shall be subject to Section 11.2(v)), notwithstanding that such Losses are caused by, result from or are attributable to any act or omission of Ingevity or any Agent of Ingevity;

(ii)         any Losses arising from bodily injury or death to any employee of the Mill Owner occurring on the Carbon Plant Real Property, notwithstanding that such Losses are caused by, result from or are attributable to any action or omission of Ingevity or any Agent of Ingevity; and

(iii)        any Loss caused by the Mill Owner to Property owned by third parties.

The Mill Owner hereby waives all rights of subrogation against Ingevity with respect to the matters described in this Section 11.1(b).

(c)          IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY UNDER THIS LEASE FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL, LIQUIDATED, PUNITIVE OR EXEMPLARY DAMAGES.

Section 11.2         Indemnification by Ingevity. Ingevity shall indemnify, defend and hold the Mill Owner and its Affiliates, and each of its and their respective officers, directors, employees, successors and assigns (collectively, the “Mill Indemnified Parties”) harmless, from and against all Losses (including, without limitation, any claim, demand, cause of action, or lawsuit in connection therewith) resulting from, in connection with or arising out of:

(i)          with respect to third party claims (other than third party claims of a type covered by another provision of this Article 11), the performance of this Lease by Ingevity, but only to the extent that the Mill Owner was not responsible for the subject matter of such Losses;

(ii)         except with respect to bodily injury or death to any employee of the Mill Owner caused by a vehicle subject to any Virginia statutory motor vehicle insurance law (a “Vehicle”) owned by Ingevity or a Vehicle driven by a Ingevity employee (which shall be subject to subsection (iv) of this Section 11.2), any bodily injury or death to any employee of the Mill Owner occurring on the Carbon Plant Real Property and resulting from or arising out of the gross negligence or intentional misconduct of Ingevity;

(iii)        any damage to any Property located or found on the Carbon Plant Real Property caused by a Vehicle owned by Ingevity or a Vehicle driven by an employee of Ingevity;

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(iv)        bodily injury or death to any employee of Mill Owner or to a third party (who is not an employee of Ingevity or Mill Owner) caused by a Vehicle owned by Ingevity or a Vehicle driven by a Ingevity employee; and

(v)         any damage to any Property of a third party caused by Ingevity.

except, with respect to clauses (ii) and (iii), to the extent that any such Loss is finally determined (in accordance with Section 23.1) to have arisen out of or resulted from the gross negligence or intentional misconduct of the Mill Owner or any such Affiliate, Agent, successor or assign. For purposes of this Section 11.2 and Section 11.3: (x) “intentional misconduct” means the intentional doing of something with knowledge that it is likely to result in serious injury or property damage or with reckless disregard of its probable consequences, and (y) “gross negligence” means the failure to use such care as a reasonably prudent and careful Person would use under similar circumstances when such Person has knowledge of the results of such Person’s acts or omissions and is recklessly or wantonly indifferent to the results.

Section 11.3         Indemnification by the Mill Owner. The Mill Owner shall indemnify, defend and hold Ingevity and its Affiliates, and each of their respective officers, directors, employees, successors and assigns (collectively, the “Ingevity Indemnified Parties”), harmless from and against all Losses (including, without limitation, any claim, demand, cause of action, or lawsuit in connection therewith) arising out of or resulting from:

(i)          with respect to third party claims (other than third party claims of a type covered by another provision of this Article 11), the performance of this Lease by the Mill Owner, but only to the extent that Ingevity was not responsible for the subject matter of such Losses;

(ii)         except with respect to bodily injury or death to any employee of Ingevity caused by a Vehicle owned by Mill Owner or a Vehicle driven by a Mill Owner employee (which shall be subject to subsection (v) of this Section 11.3), any bodily injury or death to any employee of Ingevity occurring on the Mill Real Property and resulting from or arising out of the gross negligence or intentional misconduct of the Mill Owner or any Agent of the Mill Owner;

(iii)        any damage to any Property located or found on the Carbon Plant Real Property caused by a Vehicle owned by the Mill Owner or a Vehicle driven by an employee of the Mill Owner;

(iv)        bodily injury or death to any employee of Ingevity or to a third party (who is not an employee of Ingevity or the Mill Owner) caused by a Vehicle owned by the Mill Owner or a Vehicle driven by any employee of the Mill Owner; and

(v)         any damage to any Property of a third party caused by the Mill Owner,

except, with respect to clauses (ii) and (iii) to the extent that any such Loss is finally determined (in accordance with Section 23.1) to have arisen out of or resulted from the gross negligence or intentional misconduct of Ingevity or any such Affiliate, Agent, successor or assign.

Section 11.4         Environmental Indemnities. (a) Except as provided in Section 11.4(c), Ingevity shall indemnify, defend and hold the Mill Indemnified Parties harmless from and against and in respect of any and all Losses resulting from, in connection with or arising out of Environmental Liabilities resulting from, in connection with or arising out of:

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(i)          events, conditions or circumstances at, in, from or on any of the Carbon Plant and/or the Carbon Plant Real Property (except as provided in Section 11.4(a)(ii) and Section 11.4(a)(iii), which address Co-Located Continuous Assets) in connection with or arising out of the operations, practices, presence, use or handling of Hazardous Substances, transfers, disposals or other activities (or omissions) of or on behalf of Ingevity first occurring after the Effective Date;

(ii)         the Release of Hazardous Substances from the Co-located Continuous Assets located in the Carbon Plant that are owned by Mill Owner, but only to the extent such Environmental Liabilities result from the actions or omissions of Ingevity, which Release first occurs after the Effective Date;

(iii)        the Release of Hazardous Substances from the Co-located Continuous Assets located in the Mill that are owned by Ingevity (except as provided in Section 11.4(b)(ii)) which Release first occurs after the Effective Date;

(iv)        the transport, disposal or arranging for disposal of Hazardous Substances first occurring after the Effective Date by or on behalf of Ingevity to any location;

(v)         the violation by Ingevity of any Environmental Law , regardless of when such violence occurred;

(vi)         the Carbon Plant Assumed Environmental Liabilities; and

(vi i )        any claim, action, suit or proceeding relating to any of the foregoing.

(b)          Except as provided in Section 11.4(c), the Mill Owner shall indemnify, defend and hold the Ingevity Indemnified Parties harmless from and against and in respect of any and all Losses resulting from, in connection with or arising out of Environmental Liabilities resulting from, in connection with or arising out of:

(i)          events, conditions or circumstances at, in, from or on the Mill and/or the Mill Real Property (except as provided in Section 11.4(b)(iii) and Section 11.4(a)(iii), which address Co-Located Continuous Assets) in connection with or arising out of the operations, practices, presence, use or Handling of Hazardous Substances, transfers, disposals or other activities (or omissions) of or on behalf of the Mill Owner first occurring after the Effective Date;

(ii)         the Release of Hazardous Substances from the Co-located Continuous Assets located in the Mill that are owned by Ingevity, but only to the extent such Environmental Liabilities result from the actions or omissions of the Mill Owner, which Release first occurs after the Effective Date;

(iii)        the Release of Hazardous Substances from the Co-located Continuous Assets located in the Carbon Plant that are owned by the Mill Owner (except as provided by Section 11.4(a)(ii)) or the Mill Owner Retained Assets which Release first occurs after the Effective Date;

(iv)        the transport, disposal or arranging for disposal of Hazardous Substances first occurring after the Effective Date by or on behalf of the Mill Owner to any location;

(v)         the violation by the Mill Owner of any Environmental Law , regardless of when such violence occurred;

(vi)         the Mill Owner Retained Environmental Liabilities; and

(vi i )        any claim, action, suit or proceeding relating to any of the foregoing.

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(c)          In the event that subsequent to the Effective Date any party or parties entitled to indemnification under this Section 11.4 (the “Indemnified Party”) asserts a claim under this Section 11.4 (an “Environmental Indemnity Claim”) on account of or in connection with any Environmental Claim against such Indemnified Party by any Person who is not a party to this Lease or an Affiliate of such a party including, without any limitation, any Governmental Authority (a “Third Party Claim”), the Indemnified Party shall give written notice thereof together with a statement of any available information regarding such claim to the party against whom the Environmental Indemnity Claim has been asserted (“Indemnifying Party”) as soon as reasonably practicable after learning of such Third Party Claim. Failure by an Indemnified Party to provide notice on a timely basis of a Third Party Claim shall not relieve the Indemnifying Party of its obligations hereunder, except that the foregoing shall not constitute a waiver by the Indemnifying Party of any claim for direct damages caused by such delay.

(d)          Notwithstanding anything in this Lease to the contrary, any matter or claim addressed by the indemnification provisions of the Separation Agreement is not intended to be addressed by this Lease. In the event of any conflict between the terms of this Lease and the indemnification provisions of the Separation Agreement with respect to an Indemnity Claim (as defined in the Separation Agreement) relating to Environmental Liabilities, the indemnification provisions of the Separation Agreement shall control.

Section 11.5         Remedial Action. If any Remedial Action is required to comply with applicable Environmental Laws (including any Remedial Action necessary to address any Environmental Condition) in connection with any matter for which an Indemnifying Party has an indemnification obligation under Section 11.4, the Indemnifying Party (or Ingevity, in the case of Remedial Action which Ingevity is required to undertake pursuant to Section 14.1) (the “Responsible Party”) shall retain primary control over such Remedial Action, including, without limitation, the right to: (i) investigate any suspected contamination or non-compliance, (ii) conduct and obtain any tests, reports, surveys and investigations, (iii) contact, negotiate or otherwise deal with Governmental Authorities, (iv) prepare any plan for such Remedial Action, and (v) promptly perform such Remedial Action. To the extent the property, operations or rights and obligations under this Lease of the Indemnified Party (the “Non-Controlling Party”) would be affected by the Remedial Action (including, without limitation, in the case of Remedial Action which Ingevity is required to conduct pursuant to Section 14.1, the Carbon Plant Real Property), the Responsible Party shall apprise the Non-Controlling Party of any information regarding the scheduling and execution of any Remedial Action and shall promptly provide the Non-Controlling Party with copies of all notices, correspondence, draft reports, submissions, work plans, and final reports and shall give the Non-Controlling Party a reasonable opportunity (at the Non-Controlling Party’s own expense) to comment on any submissions the Responsible Party intends to deliver or submit to the appropriate regulatory body prior to said submission provided; however, that the Responsible Party shall not make such submission to the appropriate regulatory body without a prior approval of the Non-Controlling Party (which consent shall not be unreasonably withheld or unduly delayed). The Non-Controlling Party may, at its own expense, hire its own consultants, attorneys or other professionals to monitor the defense, prosecution, investigation, containment and/or remediation, including any field work undertaken by the Responsible Party, and the Responsible Party shall provide the Non-Controlling Party with copies of the results of all such field work. The type of Remedial Action undertaken by the Responsible Party and the results thereof shall be subject to the approval of the Non-Controlling Party, which approval shall not be unreasonably withheld or unduly delayed. Notwithstanding the above, the Non-Controlling Party shall not take any actions that unreasonably interfere with the Responsible Party’s performance of the investigation, containment and/or remediation, nor shall the Responsible Party’s performance of the Remedial Action hereunder unreasonably interfere with the Non-Controlling Party’s operation of its business, unless otherwise required by a Governmental Authority.

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Section 11.6         Future Operational Compliance. Notwithstanding Section 11.5, in the event that: (i) under Section 11.5 one party would otherwise have control of a Remedial Action conducted under Section 11.5 for which the other party asserts an Environmental Indemnity Claim under this Lease, and (ii) such Environmental Indemnity Claim relates to the then-current or future operational compliance by the Non-Controlling Party with Environmental Laws, including, but not limited to, the possession of, and compliance with, applicable Environmental Permits, the parties shall cooperate in good faith regarding and jointly and reasonably control such Remedial Action; provided, however, that the Indemnifying Party shall, consistent with Sections 11.5 and 11.7, only be required to indemnify the Indemnified Party for Losses related to an Environmental Liability to the extent necessary to meet the minimum requirements of Environmental Law.

Section 11.7         Remedial Action Standards. In connection with any Remedial Action: (i) in which the Non-Controlling Party’s property, operations or Easement Rights under this Lease would be adversely affected and unless the parties jointly agree that a Consultant is not necessary, the Responsible Party shall retain a qualified independent environmental consultant (“Consultant”), which Consultant shall be subject to the Non-Controlling Party’s approval, such approval not to be unreasonably withheld or unduly delayed. The Responsible Party’s contract with the Consultant shall expressly state that the Non-Controlling Party may rely upon the Consultant’s work. The Responsible Party shall undertake such Remedial Action in a commercially reasonable fashion in accordance with Environmental Laws for facilities of the type being remediated such that any Remedial Action complies with only the minimum requirements of Environmental Laws and shall promptly obtain, if possible and appropriate, written notice from the appropriate regulatory body that no further investigation or remediation is necessary with respect to the matter, or, if no regulatory body is involved in such matter, either a good faith determination from the Consultant that no further investigation or remediation is required to bring the affected property that is the subject of the Remedial Action into conformance with the minimum requirements of Environmental Laws for facilities of the type being remediated or other resolution of the investigation or remediation reasonably acceptable to the Non-Controlling Party.

Section 11.8         Access to Areas Outside the Affected Access Area. The Non-Controlling Party shall grant the Responsible Party and its Consultants, or any other qualified consultant or subcontractor engaged by the Responsible Party to perform the Remedial Action, and their Agents access as reasonably necessary for the completion of the Remedial Action, subject to the following conditions: (1) the Non-Controlling Party shall receive at least five working days’ advance notice of Consultant’s or Agent’s intention to initially enter such area to conduct the remedial work; however, such time period may be shortened by agreement between the parties; and (2) the Access to such area granted by the Non-Controlling Party hereunder shall be limited to the Access reasonably necessary for the execution and supervision of the Remedial Action, and the Responsible Party shall use its commercially reasonable efforts to complete the Remedial Action in accordance with the schedule referenced in the scope of work for the Remedial Action; (3) the Responsible Party shall require the Consultants and their Agents to procure and maintain insurance consistent with industry practices; and (4) following the execution of the Remedial Action, and in no case later than 30 days after on-site activities have been completed, the Responsible Party shall undertake commercially reasonable measures (determined from the perspective of an objective, commercially reasonable person who is both paying the cost of restoration and operating the business on the property that is the subject of the Remedial Action) to return the affected property to their approximate condition prior to the taking of the Remedial Action (absent the contamination that was the subject of the Remedial Action), and arrange for the prompt removal of all equipment and materials brought to the property by the Consultants or any of their Agents during the course of the Remedial Action.

Section 11.9          Certain Assumed Environmental Liabilities. (a) Pursuant to Section 2.1(a)(ii) of the Separation Agreement, Ingevity hereby accepts, assumes and agrees to perform, discharge and fulfill all of the SpinCo Environmental Liabilities (as defined in the Separation Agreement) relating in any way to the Carbon Plant or the Carbon Plant Real Property including, without limitation, any and all SpinCo Environmental Liabilities arising from or related to any: (i) Carbon Plant Environmental Condition, (ii) transportation, treatment, storage recycling or disposal (whether on-site or off-site) of any waste or any Hazardous Materials, (iii) any Release or threatened Release of Hazardous Materials, (iv) contamination (whether on-site or off-site) of the environment, (v) violation or alleged violation of any Environmental Permits or Laws, including Environmental Laws, (vi) a SpinCo Contract (as defined in the Separation Agreement), (vii) any environmental matter set forth on Schedule 2.3(a) to the Separation Agreement, or (viii) any Action (as defined in the Separation Agreement) arising under Environmental Laws (such SpinCo Environmental Liabilities contemplated by this Section 11.9(a) being referred to as “Carbon Plant Assumed Environmental Liabilities”).

(b)          Pursuant to Section 2.1(a)(iv) of the Separation Agreement, the Mill Owner hereby accepts, assumes and agrees to perform, discharge and fulfill all of the Parent Environmental Liabilities (as defined in the Separation Agreement) relating to the Mill and the Mill Real Property (excluding any SpinCo Environmental Liabilities arising from the SpinCo Business or any SpinCo Assets (as such terms are defined in the Separation Agreement), the Carbon Plant, the Carbon Plant Real Property and any Carbon Plant Environmental Condition) including, without limitation, any and all Parent Environmental Liabilities arising from or related to any: (i) Mill Environmental Condition, (ii) transportation, treatment, storage, recycling or disposal (whether on-site or off-site) of any waste or any Hazardous Materials, (iii) any Release or threatened Release of Hazardous Materials, (iv) contamination (whether on-site or off-site) of the environment, (v) violation or alleged violation of any Environmental Permits or Laws, including Environmental Laws, (vi) a Parent Contract (as defined in the Separation Agreement), or (vii) any Action (as defined in the Separation Agreement) arising under Environmental Laws (such Parent Environmental Liabilities contemplated by this Section 11.9(b) being referred to as “Mill Owner Retained Environmental Liabilities”).

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Article 12

CASUALTY AND CONDEMNATION

Section 12.1         Casualty. If all or substantially all of the Carbon Plant is damaged or destroyed, Ingevity may, at Ingevity’s option, by notice in writing given the Mill Owner within 60 days after the occurrence of such damage or destruction, elect to terminate this Lease effective as of the date specified in such notice. Any insurance proceeds payable in connection with any damage or destruction of the Carbon Plant shall be payable to Ingevity. Upon any termination of this Lease, Ingevity shall satisfy and cause to be released any Mortgages, liens or other encumbrances placed or suffered to be placed on the Carbon Plant Real Property by Ingevity and shall surrender the Carbon Plant Real Property to the Mill Owner in accordance with Article 14. The Rent and any other charges due under this Lease shall be prorated as of the date of termination.

Section 12.2         Condemnation. (a) Unless this Lease is terminated pursuant to Section 12.2(b), if all or a portion of the Carbon Plant or the Carbon Plant Real Property is taken by condemnation or other eminent domain proceedings pursuant to any Law by a Governmental Authority (“Condemning Authority”) having the power of eminent domain, or is sold to a Condemning Authority under threat of the exercise of that power, this Lease shall continue in full force and effect and there shall be an equitable adjustment in the Rent and any other charges payable by Ingevity hereunder.

(b)          If all or substantially all of the Carbon Plant or Carbon Plant Real Property is taken by or sold to a Condemning Authority as described in Section 12.2(a), Ingevity may, at Ingevity’s option, by notice in writing given to the Mill Owner, elect to terminate this Lease. This Lease shall then terminate on the day following the vesting of title in the Condemning Authority. The Rent and any other charges under this Lease shall be prorated as of the date of termination, and upon termination Ingevity shall satisfy and cause to be released any Mortgages, liens or other encumbrances placed or suffered to be placed on the Carbon Plant Real Property by Ingevity. In the event of such termination, any award or compensation payable in connection with the taking or sale of the Carbon Plant shall be payable to the Mortgagee in the event a Mortgage is in effect, with the balance, if any, payable to Ingevity.

Article 13

REPRESENTATIONS AND WARRANTIES

Section 13.1         Power and Authority of Ingevity; Enforceability. Ingevity represents and warrants to the Mill Owner that: (i) Ingevity is a corporation duly organized and validly existing under the laws of the Commonwealth of Virginia, with the requisite authority to enter into this Lease and to perform its obligations hereunder, and (ii) this Lease has been duly authorized, executed and delivered by Ingevity and constitutes the legal, valid and binding obligation of Ingevity, enforceable against Ingevity in accordance with its terms, except as such enforceability may be limited by bankruptcy, reorganization, insolvency, moratorium, receivership or other similar laws affecting or relating to the enforcement of creditors’ rights or remedies generally and general principles of equity (whether considered at law or in equity).

Section 13.2         Power and Authority of the Mill Owner; Enforceability. The Mill Owner represents and warrants to Ingevity that: (i) the Mill Owner is a limited liability company duly organized and validly existing under the laws of the State of Delaware, with the requisite authority to enter into this Lease and to perform its obligations hereunder, and (ii) this Lease has been duly authorized, executed and delivered by the Mill Owner and constitutes the legal, valid and binding obligation of the Mill Owner, enforceable against the Mill Owner in accordance with its terms, except as such enforceability may be

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limited by bankruptcy, reorganization, insolvency, moratorium, receivership or other similar laws affecting or relating to the enforcement of creditors’ rights or remedies generally and general principles of equity (whether considered at law or in equity).

Article 14

SURRENDER

Section 14.1         Surrender. Unless this Lease is terminated as a result of the exercise of the Purchase Option, on the Termination Date, Ingevity shall surrender the Carbon Plant Real Property and any Excluded Removal Property to the Mill Owner; provided, that Ingevity shall have the right to enter the Carbon Plant Real Property subsequent to the Termination Date to fulfill Ingevity’s obligations under this Section 14.1. Unless this Lease is terminated as a result of the exercise of the Purchase Option or pursuant to Section 12.2, within one year following the Termination Date, Ingevity shall: (a) Remove from the Carbon Plant Real Property the Carbon Plant equipment and all of Ingevity’s inventory of raw materials, work in process, finished goods and supplies, equipment and machinery and all other Property as then remains on the Carbon Plant Real Property, (b) Remove from the Carbon Plant Real Property all Hazardous Materials used, stored, handled, released or disposed in, on or under the Carbon Plant Real Property and perform such Remedial Action as may be required under applicable Environmental Laws in connection with any contamination caused by Ingevity on the Carbon Plant Real Property, all in compliance with the provisions of this Lease, and (c) return the Carbon Plant Real Property to a safe condition as close to level grade as reasonably possible and in compliance with applicable Laws governing occupancy, taking into account that Ingevity shall have no obligation to Remove: (i) any Utility Facilities, Continuous Assets or Mill Owner Retained Assets, or (ii) any structure or fixture which the Mill Owner agrees in writing may remain on the Carbon Plant Real Property (and which Ingevity shall convey to the Mill Owner without further consideration, free and clear of all liens and encumbrances, upon surrender of the Carbon Plant Real Property to the Mill Owner) (collectively, the “Excluded Removal Property”). All such work to Remove and all Remedial Action required pursuant to the preceding sentence shall be performed in compliance with Sections 11.5 through 11.8 of this Lease. Ingevity shall have Access over and across the Mill Real Property beyond the above-stated one year period, not to exceed an additional three months, if necessary in order to perform the work to Remove or Remedial Action required pursuant to this Section 14.1. In the event any work to Remove or Remedial Action requires more than 15 months, Ingevity shall give 30 days written notice of a request for extension to the Mill Owner with an estimate of additional time required for completion of work, the approval of which shall not be unreasonably withheld. If Ingevity fails to so Remove any items required to be Removed by Ingevity within the periods specified in this Sectin 14.1, the Mill Owner may cause such items to be Removed, cause the Carbon Real Property to comply with Laws (including applicable Environmental Laws) and return the Carbon Plant Real Property to a safe condition, without removal of the Excluded Removal Property, all at the sole cost and expense of Ingevity, such payment to be made upon 30 days’ written notice provided to Ingevity with reasonable supporting documents for all actual expenses, plus a construction fee payable to the Mill Owner in the amount of 10% of the Mill Owner’s actual expenses. The Mill Owner shall use commercially reasonable efforts to mitigate the costs and expenses it incurs with respect to any action taken by the Mill Owner pursuant to the preceding sentence. During any time period after the Termination Date during which Ingevity has not completed the work to Remove and Remedial Action required by this Section 14.1, Ingevity shall be responsible for any and all Taxes for the Leased Premises and any and all costs otherwise payable by Ingevity under this Lease related to the Leased Premises. On or before the Termination Date, Ingevity shall cause any Mortgages, liens or encumbrances created by, through or under Ingevity to be fully released and discharged. Ingevity’s obligations under this Section 14.1 shall survive the termination of this Lease. Notwithstanding anything herein to the contrary, Ingevity shall not be required to remove any Hazardous Materials from the Carbon Plant Real Property which were placed upon the Carbon Plant Real Property

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by the Mill Owner or its Personnel, nor shall Ingevity be required to perform any Remedial Action in connection with any contamination caused by the Mill Owner or its Personnel.

Article 15

ASSIGNMENT AND SUBLETTING

Section 15.1         Assignment or Sublease by Ingevity. Except as otherwise provided in this Section 15.1, this Lease may not be assigned by Ingevity in whole or in part, nor may Ingevity sublease or license the use of all or any portion of the Leased Premises, without the prior written consent of the Mill Owner. Notwithstanding the foregoing, with prior written notice to the Mill Owner: (i) Ingevity may assign this Lease or sublease the Leased Premises to any Affiliate of Ingevity which is and at all times during the Term remains controlled by Ingevity (provided, however, that no such assignment or sublease shall relieve Ingevity of any obligations under this Lease), or (ii) Ingevity may assign this Lease to any Person that acquires all or substantially all of the assets of the Carbon Plant and that assumes all of the liabilities and obligations of Ingevity under this Lease and the Services Agreement (if the Services Agreement then is in effect). In addition, with the prior written consent of the Mill Owner (which consent shall not unreasonably be withheld), Ingevity may sublease or license the use of portions (but not all or substantially all) of the Leased Premises to Ingevity suppliers or contractors who shall be subject to all of the restrictions and requirements imposed by this Lease on Ingevity (including, without limitation, restrictions on use of the Leased Premises). Any purported assignment, transfer or sublease of this Lease by Ingevity in violation of this Section 15.1 shall be void and of no force or effect.

Section 15.2         Assignment by the Mill Owner. Except as otherwise provided in this Section 15.2, this Lease may not be assigned by the Mill Owner in whole or in part without the prior written consent of Ingevity. Notwithstanding the foregoing, the Mill Owner may assign this Lease, with prior written notice to Ingevity: (i) to any Affiliate of the Mill Owner which is and at all times during the Term remains controlled by the Mill Owner (provided, however, that no such assignment shall relieve the Mill Owner of any obligations under this Lease), or (ii) any Person that acquires all or substantially all of the assets of the Mill (including the Mill Real Property) and that assumes all of the liabilities and obligations of the Mill Owner under this Lease and the Services Agreement (if the Services Agreement then is in effect). Any purported assignment or transfer of this Lease by the Mill Owner in violation of this Section 15.2 shall be void and of no force or effect.

Section 15.3         Release of Liability. In the event of any permitted assignment of this Lease by either party (other than to an Affilate of the assignor), the assignor shall be released from its obligations hereunder if the designated assignee shall assume, in writing, all of the rights and obligations of the assigning party under this Lease.

Article 16

FINANCING

Section 16.1         Ingevity’s Financing. Ingevity shall have the right during the Term to subject the Carbon Plant and Ingevity’s leasehold interest in the Leased Premises to a mortgage, deed of trust, collateral assignment of lease, and/or security agreement (a “Mortgage,” any holder of which is referred to as a “Mortgagee”) and to any one or more extensions, modifications or renewals or replacements of a Mortgage.

Section 16.2         The Mill Owner’s Financing. The Mill Owner shall have the right to mortgage its fee simple title to the Carbon Plant Real Property and for the Mill Owner Retained assets (a “Fee

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Mortgage”), and any such mortgage shall be superior to all of the rights and interests of Ingevity under this Lease; provided that, as a condition to such Fee Mortgage being superior to this Lease with respect to the Carbon Plant Real Property, the Mill Owner shall cause the holder of such Fee Mortgage to execute and deliver to Ingevity a non-disturbance agreement with respect to this Lease in a form customarily used by institutional lenders and otherwise reasonably satisfactory to Ingevity.

Article 17

RIGHTS OF MORTGAGEE

Section 17.1         Performance by Mortgagee. At any time during the Term that a Mortgage is in effect, the Mortgagee may make any payment or perform any act required under this Lease to be made or performed by Ingevity with the same effect as if made or performed by Ingevity.

Section 17.2         Rights of Mortgagee. If Ingevity or any Mortgagee notifies the Mill Owner in writing of the existence of a Mortgage, then and thereafter so long as such Mortgage remains unsatisfied of record, the following provisions shall apply:

(a)          The Mill Owner, upon giving Ingevity any notice of any material breach of its obligations under this Lease pursuant to Section 4.2(a)(vii), (viii) or (ix) or any other notice under the provisions of or with respect to this Lease, also shall give a copy of such notice to such Mortgagee.

(b)          If Ingevity is in material breach of any of its obligations under this Lease, such Mortgagee shall, within the period provided in this Lease, have the right to remedy such breach, or cause the same to be remedied, and the Mill Owner shall accept such performance by or at the instance of such Mortgagee as if the same had been made by Ingevity.

(c)          If the period for cure of any breach by Ingevity after notice by the Mill Owner expires without the breach being cured, the Mill Owner shall give written notice to Mortgagee of such expiration and Mortgagee shall have: (i) an additional period of ten days to cure any such breach that may be cured by the payment of money, (ii) an additional period of not more than 30 days to cure any other breach, except for any breach which is personal to Ingevity and does not relate to the condition of or the use or occupancy of the Carbon Plant Real Property (a “Non-Curable Default”), so long as Mortgagee pays and/or performs all of the obligations of Ingevity during the pendency of such cure, and (iii) solely as to any Non-Curable Default, an additional period that is reasonably required to foreclose the Mortgage with due diligence so long as Mortgagee promptly commences the foreclosure of the Mortgage, diligently prosecutes to completion the foreclosure and pays and/or performs all the obligations of Ingevity during the pendency of the foreclosure.

(d)          Any Non-Curable Default shall be deemed to have been waived by the Mill Owner upon completion of foreclosure proceedings for the Mortgage or upon the acquisition of Ingevity’s interest in this Lease by Mortgagee.

Section 17.3         Notices from Mortgagee. Any notice or other communication that Mortgagee gives to the Mill Owner shall be deemed to have been duly given if sent to the Mill Owner in the manner provided in Section 20.1, with a copy to any holder of a Fee Mortgage if the address of the holder of the Fee Mortgage has been provided in writing to Mortgagee.

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Section 17.4         Notice to Mortgagee. Ingevity shall provide the Mill Owner with written notice of the name, address and facsimile number of any Mortgagee, and any notice or other communication that the Mill Owner gives to such Mortgagee shall be deemed to have been duly given if sent to such Mortgagee in the manner provided in Section 20.1 of this Lease.

Section 17.5         Nonliability for Covenants. The provisions of this Article 17 are for the benefit of any Mortgagee and may be relied upon and shall be enforceable by a Mortgagee. Neither Mortgagee nor any other holder or owner of the indebtedness secured by the Mortgage or otherwise shall be liable upon the covenants, agreements or obligations of Ingevity contained in this Lease, unless and until Mortgagee or such holder or owner acquires the interest of Ingevity under this Lease and then only for the period of its ownership.

Article 18

RIGHT TO CURE DEFAULTS

If Ingevity fails to pay any of Taxes or perform any other act required under this Lease, the Mill Owner, without waiving or releasing any obligation of Ingevity or remedy available to the Mill Owner, may (but shall be under no obligation to) upon reasonable notice to Ingevity, make the payment or perform the act for the account and at the expense of Ingevity. All sums so paid by the Mill Owner, plus interest at the Default Rate from the date that the sums were paid by the Mill Owner until such sums are paid by Ingevity to the Mill Owner, shall be paid by Ingevity to the Mill Owner within ten days after receipt of written demand for the same.

Article 19

QUIET ENJOYMENT

During the Term and subject to Ingevity’s continued compliance with the terms of this Lease, Ingevity shall peacefully and quietly hold the Leased Premises free from hindrance or molestation by the Mill Owner and others claiming by, through, or under the Mill Owner, but subject, however, to the Permitted Encumbrances and the terms of this Lease.

Article 20

NOTICES

Section 20.1         Procedures for Notice. All notices, demands orother communications required or permittd to be given or delivered under or by reason of the provisions of this Lease shall be in writing and shall be deemed to have been given when: (i) delivered personally to the recipient, (ii) sent via facsimile transmission, upon confirmation of receipt (which the issuing party shall give in good faith upon receipt), (iii) the next business day after having been sent to the recipient by reputable overnight courier service (charges prepaid), or (iv) four business days after having been mailed to the recipient by certified or registered mail, return receipt requested and postage prepaid. Such notices, demands and other communications shall be sent to the applicable address, facsimile number or email address set forth below, unless another address, facsimile number or email address has been previously specified in writing by such party:

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If to Mill Owner:	WestRock Virginia, LLC
	504 Thrasher Street
	Norcross, GA  30071
	Attention:  Chief Financial Officer
	Facsimile:  770-263-3582
With a copy to:	WestRock Company
	504 Thrasher Street
	Norcross, GA  30071
	Attention:  General Counsel
	Facsimile:  770-263-3582
And:	WestRock Virginia, LLC
	104 West Riverside Street
	Covington, VA  24426
	Attention:  Production Manager
	Facsimile:  540-969-5707
If to Ingevity:	Ingevity Virginia Corporation
	958 E. Riverside Street
	Covington, Virginia  24426
	Attention:  Plant Manager
	Facsimile:  540-969-3504
With a copy to:	Ingevity Corporation
	5255 Virginia Avenue
	North Charleston, South Carolina  29406
	Attention:  Law Department
	Facsimile:  843-746-8278

Section 20.2         Change of Address. Either party may, from time to time, change its notice address by written notice to the other party at its then current address in accordance with the provisions of this Article 20.

Article 21

EXPANSION OPTIONS

Section 21.1         Option to Expand the Leased Premises with the Sawdust Area. Ingevity shall have the option (the “Sawdust Area Expansion Option”) to add all or a portion of the real property described on Exhibit E, which is a part of the Mill Real Property (the “Sawdust Area Expansion Property”), to the Carbon Plant Real Property and the Leased Premises. Ingevity may exercise the Sawdust Area Expansion Option at any time Ingevity is not in material breach of an obligation under this Lease by: (i) giving written notice of such exercise (the “Sawdust Area Expansion Exercise Notice”) to the Mill Owner at least six months prior to the effective date of the expansion of the Carbon Plant Real Property and Leased Premises to include the Sawdust Area Expansion Property, as specified in the Sawdust Area Expansion Exercise Notice, and (ii) completing, at Ingevity’s expense and under the direction of the Mill Owner, before occupying the Sawdust Area Expansion Property, such improvements as the Mill Owner reasonably may require so that the volume and capacity of the retention area for the Mill Owner’s landfill located adjacent to the Sawdust Area Expansion Property is not diminished by reason of the lease of the Sawdust Area Expansion Property to Ingevity pursuant to Ingevity’s exercise of the Sawdust Area Expansion Option and the use of the Sawdust Area Expansion Property by Ingevity.

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Section 21.2         Sawdust Area Expansion Property. (a) If the Sawdust Area Expansion Option is exercised in accordance with Section 21.1, effective on the effective date specified in the Sawdust Area Expansion Exercise Notice (or such later date as the improvements referred to in Section 21.1 are completed) (the “Sawdust Area Expansion Effective Date”): (i) the Carbon Plant Real Property and the Leased Premises shall be expanded to include the Sawdust Area Expansion Property (subject to any Permitted Encumbrances) for all purposes of this Lease (including, without limitation, the Purchase Option), and (ii) the annual Rent payable under this Lease shall be increased by an amount equal to the Annual Fair Market Rental Value of the Sawdust Area Expansion Property, as of the Sawdust Area Expansion Effective Date, determined as provided in Section 21.2(b) (which increase shall be paid annually in advance, commencing on the Sawdust Area Expansion Effective Date, or on such later dated as the Annual Fair Market Rental Value is finally determined pursuant to Section 21.2(b), and on each subsequent anniversary of the Sawdust Area Effective Date during the remainder of the Term). The Mill Owner and Ingevity shall reasonably cooperate to cause the Sawdust Area Expansion Property to be surveyed and subdivided in accordance with applicable Law.

(b)          The Annual Fair Market Rental Value of the Sawdust Area Expansion Property as of the Sawdust Area Expansion Effective Date shall be determined by mutual agreement of the Mill Owner and Ingevity or, if the Mill Owner and Ingevity are unable to agree on such Annual Fair Market Rental Value within 60 days after the Sawdust Area Expansion Exercise Notice is given, the Annual Fair Market Rental Value shall be determined by appraisers selected as follows. Within 15 days after such 60 day period expires, the Mill Owner and Ingevity shall each appoint an appraiser and the Annual Fair Market Rental Value shall be as determined by the two appraisers so appointed. If the higher of the two appraisals is no more than 10% greater than the lower appraisal, the Annual Fair Market Rental Value shall be the average of the two appraisals. If the higher appraisal is more than 10% greater than the lower appraisal, the two appraisers shall select a third appraiser from a list of appraisers approved by both parties (which approval shall not be unreasonably withheld). The third appraiser shall then determine the Annual Fair Market Rental Value. All appraisal costs and expenses shall be shared by the parties equally. All appraisers shall be qualified appraisers of industrial properties in the Virginia region. The appraisers shall give prompt written notice of the determination of Annual Fair Market Rental Value pursuant to this Section 21.2(b). The determination of Annual Fair Market Rental Value pursuant to this Section 21.2(b) shall be conclusive and incontestably binding upon both parties and shall be enforceable in any court having jurisdiction.

Section 21.3         Condition of the Sawdust Area Expansion Property. In furtherance of Section 21.2 and not in limitation thereof, if Ingevity exercises the Expansion Option, Ingevity will lease the Sawdust Area Expansion Property from the Mill Owner in its condition, “AS IS,” as of the Sawdust Area Expansion Effective Date. Ingevity acknowledges that it is familiar with the Sawdust Area Expansion Property.

Section 21.4         Option to Expand the Leased Premises with the Truck Shop Property. Ingevity shall have the option (the “Truck Shop Expansion Option”) to add all or a portion of the Truck Shop Property to the Carbon Plant Real Property and the Leased Premises. Ingevity may exercise the Truck Shop Expansion Option at any time Ingevity is not in material breach of an obligation under this Lease by giving written notice of such exercise (the “Truck Shop Expansion Exercise Notice”) to the Mill Owner at least 24 months prior to the effective date of the expansion of the Carbon Plant Real Property and Leased Premises to include the Truck Shop Property, as specified in the Truck Shop Expansion Exercise Notice.

Section 21.5          Truck Shop Property. (a) If the Truck Shop Expansion Option is exercised in accordance with Section 21.4, effective on the date (the “Truck Shop Expansion Effective Date”) that is specified in the Truck Shop Expansion Exercise Notice (which is at least 24 months after the date the Truck Shop Expansion Exercise Notice is given) or, if earlier, the date that the Mill Owner actually vacates the Truck Shop Property: (i) the Leased Premises shall be expanded to include the Truck Shop Property (subject to any Permitted Encumbrances) for all purposes of this Lease (including, without limitation, the Purchase Option), and (ii) the Mill Owner shall convey to Ingevity by deed the buildings and improvements located on the Truck Shop Property (other than any Mill Owner Retained Assets that are located on the Truck Shop Property). If the recorded plat of the Carbon Plant Real Property has been subdivided prior to the Truck Shop Expansion Effective Date to exclude the Truck Shop Property (which the Mill Owner may elect to do, in its sole discretion) , the Mill Owner and Ingevity shall reasonably cooperate to cause the Truck Shop Property to be surveyed, if necessary, and added back to the Carbon Plant Real Property in accordance with applicable Law, effective as of the Truck Shop Expansion Effective Date.

(b)          On the Truck Shop Expansion Effective Date, in lieu of any increase in the rent payable under this Lease, Ingevity shall reimburse the Mill Owner, by wire transfer of immediately available funds, for the actual costs and expenses incurred by the Mill Owner to construct a new building, or remodel an existing building, based on the plans set forth in the Truck Shop Report, to serve as a replacement truck repair facility for the Mill and relocate equipment.

Section 21.6          Condition of the Truck Shop Property. In furtherance of Section 21.5 and not in limitation thereof, if Ingevity exercises the Truck Shop Expansion Option, Ingevity will lease the Truck Shop Property from the Mill Owner in its condition, “AS IS,” on the Truck Shop Expansion Effective Date. Ingevity acknowledges that it is familiar with the Truck Shop Property.

Article 22

INGEVITY OPTION TO PURCHASE

Section 22.1         Option to Purchase. (a) Ingevity shall have the exclusive option and right, exercisable in Ingevity’s sole discretion (the “Purchase Option”), to purchase the Carbon Plant Real Property at any time during the Term by giving written notice (the “Purchase Option Exercise Notice”) of such exercise to the Mill Owner at any time during the Term or, under the circumstances provided in Section 4.2(b), during a 30 day period following written notice of termination of this Lease given by the Mill Owner pursuant to Section 4.2(a). In connection with the exercise of the Purchase Option, Ingevity also may exercise the Sawdust Area Expansion Option and/or the Truck Shop Expansion Option (if not previously exercised), and the Carbon Plant Real Property shall be expanded to include the property subject to such exercised option or options; however, the Purchase Option Closing with respect to the property subject to either such expansion option, if exercised in connection with the Purchase Option, shall be delayed until Ingevity has satisfied all of the conditions and requirements set forth in Article 21 with respect to such option (including, without limitation, minimum notice requirements, improvement requirements and reimbusement requirements).

(b)          If Ingevity has not given the Purchase Option Exercise Notice at least 90 days prior to the 50th Anniversary of the Effective Date and this Lease has not been earlier terminated pursuant to Section 4.2(a), the Purchase Option nonetheless shall be deemed to have been exercised by Ingevity automatically, without further action by either party, and the Purchase Option Exercise Notice shall be deemed to have been given, on the day that is 90 days prior to the end of the Term.

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(c)          If Ingevity is in material breach of any of its obligations under this Lease at or after the time Ingevity exercises (or is deemed to exercise) the Purchase Option pursuant to this Section 22.1, Ingevity shall not be entitled to complete the purchase of the Leased Premises pursuant to the exercise of the Purchase Option unless Ingevity cures such breach in all material respects prior to or at the Purchase Option Closing. Neither the exercise (or deemed exercise) of the Purchase Option nor the purchase of the Leased Premises pursuant to the exercise (or deemed exercise) of the Purchase Option shall release Ingevity from any liability to the Mill Owner arising under this Lease prior to the Purchase Option Closing.

Section 22.2         Purchase Price. (a) The purchase price payable by Ingevity for the Carbon Plant Real Property shall be $1.00.

(b)          The closing of the sale of the Carbon Plant Real Property (the “Purchase Option Closing”) shall occur on a date agreed upon by the parties, but not later than 90 days after the date the Purchase Option Exercise Notice is given or deemed to be given (subject to necessary governmental approvals and other similar requirements). At such closing, Ingevity shall pay to the Mill Owner the purchase price in cash, and the Mill Owner shall convey all of its right, title and interest in the Leased Premises to Ingevity in an “AS-IS, WHERE-IS” condition and otherwise with all faults and defects as of the date of such closing, free and clear of all mortgages, security interest, liens, pledges, deeds of trust, charges, options, rights of first refusal, easements, covenants, restrictions and other encumbrances, but without any warranties of title , pursuant to a deed in substantially the form of Exhibit H . Any conveyance fee or transfer Tax payable with respect to any such conveyance shall be paid by Ingevity.

Section 22.3         Easement Rights to be Converted to Reciprocal Easements. In connection with (and as a condition to) the conveyance of Leased Premises to Ingevity following the exercise of the Purchase Option pursuant to this Article 22, the parties shall execute, deliver and record in the recording office of Allegheny County, Virginia a reciprocal easement agreement with respect to the Mill Real Property and the Carbon Plant Real Property (along with such subordination of any Mortgages on such properties as may be necessary so that such agreement is prior to and superior to any such Mortgage) containing substantially the same terms as Article 3 of this Lease (including the corresponding exhibits to this Lease referred to in Article 3), Article 11, Article 18 and Article 23 but with the Easement Rights expressed as perpetual (except as otherwise provided in Article 3) easements in real property.

Section 22.4          Subdivision of Truck Shop Property. If Ingevity has not exercised the Truck Shop Expansion Option prior to or in connection with giving the Purchase Option Exercise Notice, then prior to or at the Purchase Option Closing, Ingevity and the Mill Owner shall reasonably cooperate to cause the Truck Shop Property to be surveyed and removed from the legal subdivision that describes the Carbon Plant Real Property (unless such removal already has occurred).

Section 22.5         Services Agreement. Upon any conveyance of the Leased Premises to Ingevity pursuant to this Article 22, the Mill Owner and Ingevity shall amend the Services Agreement, effective with such conveyance, to eliminate any obligation of the Mill Owner to provide electricity to Ingevity if the continued provision of such electricity to Ingevity pursuant to the Services Agreement would subject the Mill Owner to regulation as a public utility under applicable Law.

Section 22.6         Termination of Lease. Upon the conveyance of the Leased Premises to Ingevity pursuant to this Article 22, this Lease shall terminate and both parties shall be released from all liabilities and obligations hereunder, other than with respect to: (i) any obligation of the party arising under Article 11 with respect to actions, occurrences or admissions occurring prior to such termination, or (ii) any uncured material breaches of this Agreement occurring prior to such termination.

Article 23

MISCELLANEOUS

Section 23.1         Dispute Resolution. (a) Each of the parties from time to time shall designate an individual who shall be responsible for managing such party’s relationship with the other party and will

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serve as such party’s primary representative with respect to operational matters under this Lease (a “Contract Manager”). The initial Contract Manager shall be the Production Manager of the Mill for the Mill Owner and the Plant Manager of the Carbon Plant for Ingevity. Each Contract Manager shall be authorized to act for and on behalf of the party such Contract Manager is representing with respect to all day to day matters relating to this Lease. A party shall provide as much notice as is practicable to the other party of any change in the individual who is designated by the party as its Contract Manager. Each party may rely on direction from and decisions regarding day-to-day administration of this Lease by the Contract Manager of the other party as being the directions and decisions of the party represented by such Contract Manager, subject to any direction from a party or that party’s representatives on the Operating Council to the contrary.

(b)          The Operating Council. An operating council (the “Operating Council”) consisting of the Contract Manager and two other representatives designated by each party shall have overall responsibility for assisting the parties to this Lease in the administration of this Lease. The initial members of the Operating Council shall be the Production Manager of the Mill, the Mill Manager and the Mill Owner’s Vice President of Operations for the Mill Owner and the Plant Manager of the Carbon Plant, the Services and Support Manager of the Carbon Plant and Ingevity’s Vice President of Operations for Ingevity, or in each case a reasonably equivalent position designated by the Mill Owner or Ingevity, as the case may be. In addition, each party from time to time may designate alternate representatives, who shall be authorized to participate on the Operating Council on behalf of such party in the absence of one or more of its primary representatives. Each party shall provide as much notice as is practicable to the other party of any change in its designees on the Operating Council. The Operating Council shall meet on such a schedule, and for such purposes (within the authority of the Operating Council established by this Lease), as the Operating Council shall approve. The presence of at least two representatives and/or alternates of each party at a meeting of the Operating Council shall be required for a quorum. The Operating Council shall act only at a meeting at which a quorum is present. Each party’s representatives on the Operating Council shall have, collectively, one vote, and any action shall be taken only with the affirmative vote of both parties’ representatives.

(c)          Consideration by Contract Managers. All disputes, issues, controversies or claims between the parties hereunder (“Disputes”) shall first be referred to the Contract Managers for resolution. If the Contract Managers are unable to resolve, or do not anticipate resolving, a Dispute within 10 business days (or such other period as reasonably may be approved by them) after referral of the matter to them, then the parties shall submit the Dispute to the Operating Council for resolution. The Dispute escalation process described in this Section 23.1 is referred to as the “Escalation Process.”

(d)          Escalation to Operating Council. If a Dispute has been submitted to the Operating Council for resolution, the Operating Council shall negotiate in good faith to resolve such Dispute within 10 business days (or such other period of time as may be approved by the Operating Council).

(e)          Escalation to Executive Management. If the Operating Council does not resolve a Dispute within 10 business days (or such other period of time as may be approved by the Operating Council) after referral of the matter to it, then either party may notify the other in writing that it desires to elevate such Dispute to the respective executive management of the Mill Owner, who shall be the President, Paper Solutions of the Mill Owner’s ultimate parent (as of the Effective Date, WestRock Company), or reasonably equivalent officer designated by the Mill Owner, and of Ingevity, who shall be Ingevity’s Chief Executive Officer (as of the Effective Date, D. Michael Wilson (collectively, the “Executive Management”) for resolution. Upon receipt by the other party of such written notice, the Dispute shall be so elevated and the Executive Management shall negotiate in good faith to resolve such Dispute within 10 business days (or such other period as may be approved by the Executive Management)

 37

after referral of the matter to the Executive Management (the last day of such period is referred to as the “Conclusion of the Escalation Process”).

(f)          Negotiation of Disputes. During the Escalation Process, each party’s representatives shall negotiate in good faith. The location, format, frequency, duration and conclusion of the discussions between the Contract Managers, the Operating Council and the Executive Management, respectively, shall be left to the discretion of the representatives involved. Discussions and correspondence among such representatives for purposes of these negotiations shall be treated as Confidential Information and information developed for purposes of settlement, exempt from discovery and production, which shall not be admissible in subsequent proceedings between the parties. Documents identified in or provided with such communications, which are not prepared for purposes of the negotiations, are not so exempted and may, if otherwise admissible, be admitted in evidence in such subsequent proceeding.

(g)          Participation in Escalation Process. Notwithstanding anything else in this Lease to the contrary, and except as provided below in this Section 23.1(g), the parties shall participate in the Escalation Process until the Conclusion of the Escalation Process and shall not terminate negotiations concerning resolution of the matters in Dispute until the earlier of the Conclusion of the Escalation Process or expiration or termination of this Lease (so long as termination of this Lease is not the subject of the Dispute). No party shall commence a lawsuit or seek other remedies with respect to the Dispute (including termination of this Lease) prior to the Conclusion of the Escalation Process, provided that either party is authorized to institute formal legal proceedings at any time: (i) to avoid the expiration of any applicable statute of limitations period, (ii) to preserve a superior position with respect to other creditors, or (iii) to seek an injunction to prevent irreparable harm, including in situations where the party reasonably believes that the matter involved in the Dispute may result in such party’s operations being significantly curtailed or shut down.

Section 23.2         Force Majeure. Neither party shall be liable to the other party under this Lease for any delay in or failure of performance by the party of its obligations under this Lease resulting from a Force Majeure Event if the party has used commercially reasonable efforts to perform notwithstanding the occurrence of the Force Majeure Event. Each party shall use commercially reasonable efforts to mitigate or remedy the effects of a Force Majeure Event, and if the cause of the Force Majeure Event can be minimized or remedied, the parties shall use commercially reasonable efforts to do so promptly.

Section 23.3         Amendment; Waiver. No amendment, modification or discharge of this Lease and no waiver under this Lease shall be valid or binding unless set forth in writing and duly executed by the party against whom enforcement of the amendment, modification, discharge or waiver is sought. Any such waiver shall constitute a waiver only with respect to the specific matter described in such writing and shall in no way impair the rights of the party granting such waiver in any other respect or at any other time. The failure of either party to insist in any one or more instances upon strict performance of any of the provisions of this Lease or take advantage of any of its rights hereunder shall not be construed as a waiver of any such provisions or the relinquishment of any such rights, but the same shall continue and remain in full force and effect.

Section 23.4         Entire Agreement. This instrument constitutes the entire agreement between the parties relating to the subject matter hereof and there are no agreements, understandings, conditions, representations, or warranties not expressly set forth herein.

Section 23.5         Memorandum of Lease. The full text of this Lease shall not be recorded by either party. The parties shall execute and deliver a short form memorandum of this Lease for filing and recording in the office of the official records of Alleghany County, Virginia. Such memorandum shall include reference to the Purchase Option.

 38

Section 23.6         Estoppel Certificate. At any time and from time to time, each party shall execute, acknowledge and deliver to the other, not later than 20 days after a request in writing from such othe party, a statement in writing, in a customary form reasonably satisfactory to both parties, certifying that: (i) this Lease is in full force and effect and unmodified (or if there have been modifications, that this Lease is in full force and effect as modified and stating the modifications), and (ii) the existence or non-existence of any default under this Lease, any amendment to this Lease, or any prepayment of rentals, and (iii) such other facts with respect to this Lease as may be reasonably requested.

Section 23.7         Governing Law. This Lease shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without reference to the conflicts of laws or choice of law provisions thereof.

Section 23.8         Binding Agreement; Successors. This Lease shall bind the parties to this Lease and their respective successors (including, without limitation, any successor to the Mill Owner as owner of the Mill and any successor to Ingevity as owner of the Carbon Plant) and shall bind, and inure to the benefit of, their permitted assigns under Sections 15.1 and 15.2. This Lease also shall inure to the benefit of each Person entitled to indemnification under Article 11.

Section 23.9         Headings. The section and other headings in this Lease are inserted solely as a matter of convenience and for reference, are not a part of this Lease, and shall not be deemed to affect the meaning or interpretation of this Lease.

Section 23.10        Counterparts. This Lease may be executed in two or more counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

Section 23.11         Exhibits. All exhibits to this Lease referenced herein are incorporated herein by reference.

Section 23.12         Severability, etc. Any term or provision of this Lease that is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability, without rendering invalid or unenforceable the remaining terms and provisions of this Lease or affecting the validity or unenforceability of any of the terms or provisions of this Lease in any other jurisdiction. If any term or provision of this Lease is so broad as to be invalid or unenforceable, the provision shall be interpreted to be only so broad as is valid or enforceable. Subject to the foregoing provisions of this Section 23.12, if any term or provision of this Lease is invalid or unenforceable for any reason, such circumstances shall not have the effect of rendering such term or provision invalid or unenforceable in any other case or circumstance.

Section 23.13          Negation of Partnership. Both parties shall act under this Lease solely as independent contractors and not as agents of the other party. Nothing contained in this Lease shall be construed or interpreted as creating an agency, partnership, co-partnership or joint venture relationship between the parties.

Section 23.14         Third-Party Rights. Nothing herein expressed or implied is intended or shall be construed to confer upon or give to any Person, other than the parties hereto (and, to the extent provided in Article 11, the Mill Indemnified Parties and the Ingevity Indemnified Parties, and, to the extent provided in Article 17, any Mortgagee), any right or remedies under or by reason of this Lease.

Section 23.15         Further Assurances. Each of the parties shall execute from time to time any such documents and instruments as the other party reasonably may request to further assure the Easement

 39

Rights granted in Article 3 or, to the extent provided by the terms and conditions of this Lease, to reflect any relocation, release or termination of any Easement Rights granted in Article 3 or any Utility Facilities with respect thereto.

Section 23.16         Merger of Estates. The Easement Rights created in this Lease and benefiting applicable parcels of real property described herein shall continue until terminated as provided herein, notwithstanding any merger of title (existing presently or in the future) in a common owner, and none of the parties intend that there be, and there shall not be in any event, a merger of any of the Easement Rights with the title or other interest of any owner of the real property interests described herein.

Section 23.17         No Presumption Against Drafter. Each of the parties hereto has jointly participated in the negotiation and drafting of this Lease. In the event of any ambiguity or question of intent or interpretation, this Lease shall be construed as if drafted jointly by each of the parties hereto and no presumptions or burdens of proof shall arise favoring any party by virtue of the authorship of any of the provisions of this Lease.

Section 23.18         Conflict Between Agreements. In the event of any inconsistency or conflict between the terms and provisions of this Lease and the Services Agreement or the Separation Agreement, the terms and provisions of the Services Agreement and the Separation Aggreement shall control.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first written above.

WITNESSES	WESTROCK VIRGINIA, LLC
	By:
		Name:
		Title:
	INGEVITY VIRGINIA CORPORATION
	By:
		Name:
		Title:

 41

STATE OF ___________________	)
	)
COUNTY OF _________________	)

I, _________________________, Notary Public for the State of ___________________, do hereby certify that the above-named WESTROCK VIRGINIA, LLC, a Delaware limited liability company, by ____________________________, its _________________________, did personally appear before me this day and acknowledged the due execution of the foregoing instrument.

Witness my hand and official seal this the ___ day of February, 2016.

Notary Public for __________________________________

My commission expires: ____________________________

STATE OF ___________________	)
	)
COUNTY OF _________________	)

I, _________________________, Notary Public for the State of ___________________, do hereby certify that the above-named INGEVITY VIRGINIA CORPORATION, a Virginia corporation, by ____________________________, its _________________________________, did personally appear before me this day and acknowledged the due execution of the foregoing instrument.

Witness my hand and official seal this the ___ day of February, 2016.

Notary Public for ___________________________________

My commission expires: _____________________________

 42

JOINDER OF MILL REAL PROPERTY RECORD OWNER

THIS JOINDER OF MILL REAL PROPERTY RECORD OWNER (this “Joinder”) is made and effective as of February 1, 2016 by WESTROCK MWV, LLC, a Delaware limited liability company, successor by name change, merger and conversion to West Virginia Pulp and Paper Company, Westvaco Corporation and MeadWestvaco Corporation (“WestRock MWV”), for the benefit of WESTROCK VIRGINIA, LLC, a Delaware liability company, as landlord (the “Mill Owner”), and INGEVITY VIRGINIA CORPORATION, a Virginia corporation, as tenant (“Ingevity”), under the following circumstances:

A.           The Mill Owner and Ingevity are entering into the Ground Lease (as hereinafter defined) to set forth their agreement with respect to Ingevity’s lease of the real property within the Mill Owner’s mill complex upon which Ingevity’s Carbon Plant is located. The Ground Lease is intended to be a transfer of all of the economic benefits and burdens of owning the real property on which the Carbon Plant is located from the Mill Owner to Ingevity and thereafter is intended to be a retention by Ingevity of such real property for U.S. federal income tax purposes.

B.           WestRock MWV is the record owner of the Mill Real Property (as defined in the Ground Lease) and wishes to acknowledge and agree that the Mill Real Property is bound by and subject to the Ground Lease.

NOW, THEREFORE, in consideration of the mutual covenants described in the Ground Lease and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, and intending to be legally bound hereby, WestRock MWV agrees for the benefit of Mill Owner and Ingevity as follows:

1.          Definitions. All capitalized terms used herein shall have the respective terms ascribed to them in the Covington Plant Ground Lease Agreement between the Mill Owner and Ingevity dated as of February 1, 2016 (“the Ground Lease”).

2.          Joinder. WestRock MWV hereby agrees that the Mill Real Property is subject to and bound by the Ground Lease (including, without limitation, the Ingevity Easement Rights granted pursuant to Article 3, the Sawdust Area Expansion Option and the Truck Shop Expansion Option granted pursuant to Article 21, the obligation to convert the Ingevity Easement Rights into reciprocal easements pursuant to Section 22.3 and the obligations with respect to memoranda of lease and estoppel certificates under Sections 23.5 and 23.6). WestRock MWV shall have no personal liability under the Ground Lease, and the liability of WestRock MWV under the Ground Lease is limited to the Mill Real Property. WestRock MWV shall be released from any liability under the Ground Lease upon the conveyance by WestRock MWV of the Mill Real Property.

3.          Amendment; Waiver. No amendment, modification or discharge of this Joinder and no waiver under this Joinder shall be valid or binding unless set forth in writing and duly executed by the party against whom enforcement of the amendment, modification, discharge or waiver is sought. Any such waiver shall constitute a waiver only with respect to the specific matter described in such writing and shall in no way impair the rights of the party granting such waiver in any other respect or at any other time. The failure of either party to insist in any one or more instances upon strict performance of any of the provisions of this Joinder or take advantage of any of its rights hereunder shall not be construed as a waiver of any such provisions or the relinquishment of any such rights, but the same shall continue and remain in full force and effect.

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4.          Governing Law. This Joinder shall be governed by and construed in accordance with the laws of the Commonwealth of Virginia, without reference to the conflicts of laws or choice of law provisions thereof.

5.          Binding Agreement; Successors. This Joinder shall bind the parties to this Joinder and their respective successors (including, without limitation, any successor to WestRock MWV as owner of record title to the Mill Real Property and any successor to Ingevity as owner of the Carbon Plant) and shall bind, and inure to the benefit of, their permitted assigns under Sections 15.1 and 15.2 of the Ground Lease. This Joinder also shall inure to the benefit of each Person entitled to indemnification under Article 11 of the Ground Lease.

6.          Third Party Beneficiaries. The Mill Owner and Ingevity are third party beneficiaries of this Joinder.

7.          Merger of Estates. The Easement Rights created in the Ground Lease and benefiting applicable parcels of real property described herein shall continue until terminated as provided therein, notwithstanding any merger of title (existing presently or in the future) in a common owner, and none of the parties intend that there be, and there shall not be in any event, a merger of any of the Easement Rights with the title or other interest of any owner of the real property interests described therein.

IN WITNESS WHEREOF, WestRock MWV has duly executed this Joinder as of the day and year first written above.

WITNESSES	WESTROCK MWV, LLC,
	a Delaware limited liability company
	By:
		Name:
		Title:

STATE OF GEORGIA

COUNTY OF GWINNETT, to-wit:

I, _________________________, Notary Public for the State of ___________________, do hereby certify that the above-named WESTROCK MWV, LLC, a Delaware limited liability company, by ____________________________, its _________________________, did personally appear before me this day and acknowledged the due execution of the foregoing instrument.

Witness my hand and official seal this the _____ day of _________, 2016.

NOTARY PUBLIC

My commission expires: _____________________________

Registration No.__

829201

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EX-10.6

Exhibit 10.6

CRUDE TALL OIL AND BLACK LIQUOR SOAP SKIMMINGS AGREEMENT

THIS CRUDE TALL OIL AND BLACK LIQUOR SOAP SKIMMINGS AGREEMENT (this “Agreement”) is made and entered into on ___________, 2016, (“Effective Date”), by and between WestRock Shared Services, LLC and WestRock MWV, LLC, on behalf of the affiliates of WestRock Company (“Seller”), and Ingevity Corporation, a Delaware corporation (“Buyer”). Buyer and Seller may each be referred to as a “Party” and collectively as the “Parties.”

WHEREAS, Seller produces black liquor soap skimmings (“BLSS”) and crude tall oil (“CTO”, together with BLSS, each as further described on Exhibit A, the “Products”) at certain of its mills; and

WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase from Seller, Seller’s entire production of the Products at such mills;

NOW, THEREFORE, in consideration of the covenants and agreements herein contained, and other good and valuable considerations, the receipt and sufficiency of which are hereby acknowledged, and subject to terms, provisions and conditions set forth herein, the Parties hereto agree as follows:

1. PURCHASE AND SALE

Seller agrees to sell to Buyer, and Buyer agrees to purchase and receive from Seller, except as otherwise set forth herein, one hundred percent (100%) of the output of BLSS and CTO produced and originating at Seller’s Mills (as defined in Section 1(B)), upon the terms and conditions set forth herein:

A. Quantity: (i) Notwithstanding anything in this Agreement to the contrary, in no event shall any provision in this Agreement require Seller to produce any minimum quantities of CTO or BLSS at any of the Mills (whether individually or aggregate) and the Parties agree that the volume of output of the Products will be subject to change in Seller’s sole discretion, including but not limited to, any reduction in volume that may arise as a result of any closure of or modification of any such Mill(s) or their operating processes or the volumes and types of pulp and paper products produced therein. For the purpose of this Agreement one CTO equivalent ton is defined as one short ton (2,000 pounds) of CTO or two short tons (4,000 pounds) of BLSS (each, a “CTO Equivalent Ton” and collectively, the “CTO Equivalent Tons”).

(ii) Buyer shall use commercially reasonable efforts to assist Seller to identify areas to maintain and/or improve the recovery and quality of the Products produced at the Mills in order to assist Seller in its efforts to produce the Products. Buyer’s duties relative to technical service efforts with respect to Product recovery and quality shall include, but not be limited to: (a) regular visits to Mill sites to perform analysis of current state of quality and recovery, (b) sample collection and subsequent testing of physical properties of the Products, (c) the preparation of quality reports to be distributed to each Mill at a minimum of once per calendar quarter, and (d) other activities that the Parties may mutually deem to be reasonably necessary to support the ongoing production and quality of the Products.

B. Mill locations: Seller’s and its affiliates’ mills whose Products are included in this Agreement are located at Fernandina Beach, FL; Hodge, LA; West Point, VA; Florence, SC; Panama City, FL; Hopewell, VA; Demopolis, AL; Phenix City, AL, Evadale TX, and Tres Barras, Santa Cantarina Brazil, and any New Mills whose Products are added by Seller pursuant to Section 6A below (each, a “Mill” and collectively, the “Mills”). In the event Seller sells or otherwise transfers any Mill or ceases production of Products

Page 1 of 17

at any Mill, or removes any Mill from this Agreement as set forth herein, the remaining above-named Mills and any New Mills shall be deemed the Mills for purposes of this Agreement.

C. Quality: CTO and BLSS sold hereunder is not guaranteed to meet any specifications; however, Buyer and Seller will determine whether CTO and BLSS sold hereunder: (i) meets or exceeds the minimum weighted-average quarterly (“WQA”) specifications for each Mill included in Exhibit B and (ii) meets or is less than the maximum WQA specifications for each Mill included in Exhibit B (collectively, the “Specifications” and each a “Specification”). The WQA for each Specification for each Mill will be monitored, sampled, and reported per Exhibit B at the end of each calendar quarter. If CTO or BLSS quality falls below any Specification, Seller will determine, in its sole discretion, which actions, if any, it will take to improve quality. It is understood that Seller shall have no obligation to deliver CTO or BLSS that meets or exceeds either the minimum or maximum Specifications set forth in Exhibit B.

i.           Quality parameters are set on an individual Mill basis. References below to “Moisture Content,” “Acid Number,” “Hexane Insolubles,” “Soap Number,” “Anthraquinone,” “Fiber in Soap,” and “Black Liquor,” are references to such terms associated with various Specifications as further described in Exhibit B. In the event that the WQA CTO or BLSS quality of any particular Mill (i) does not meet or exceed the minimum Specifications set forth on Exhibit B, or (ii) exceeds any of the maximum Specifications set forth on Exhibit B, as applicable, for particular shipments or tonnage of Products (“Below Standard Products”) then Seller will provide a credit memo to Buyer for use within thirty (30) days against applicable invoices from Seller (or, if this Agreement has terminated, will reimburse Buyer), as follows:

a.     Moisture Content of CTO. Seller will provide a credit for excess moisture included with CTO sold to Buyer during such calendar quarter as follows: The credit shall be based on the amount that the WQA is above the Specification maximum limit for each specific Mill. For example, if a specific Mill sells 1,000 tons that had a CTO Moisture Content WQA of thirteen percent (13%) and a moisture Specification of two percent (2%), then Seller will provide a Below Standard Product credit equal to (13% - 2%) * 1000 = 110 tons multiplied by the then-current Purchase Price of CTO as described in Exhibits C and E hereto.

b.     Acid Number for CTO and BLSS. Seller will provide a credit for the tons of Below Standard Products sold to Buyer during such calendar quarter based on the amount that the Mill specific WQA is below the applicable Acid Number minimum Specification on Exhibit B. The following calculation will apply: (Mill WQA Acid Number - Mill Acid Number Specification) divided by the Mill Acid Number Specification multiplied by the then-current CTO or BLSS Purchase Price, as applicable, multiplied by the tons delivered during the calendar quarter from the Mill = allowed $ credit. For example, if the Hopewell, VA Mill sells 1,000 tons of CTO at a Purchase Price of $300 with a WQA Acid Number of 160, the credit would be ((165-160)/165)* $300 * 1,000 = $9,091.

c.      Hexane Insolubles in CTO or BLSS. Seller will provide a credit equal to eight percent (8%) of the Purchase Price for the tons of Below Standard Product sold to Buyer during such calendar quarter by the specific Mill if the WQA of Hexane Insolubles exceeds the Specification for such Mill. Such credit, if payable, shall be limited to a maximum of thirty dollars ($30.00) per ton during the January 1, 2016 to December 31, 2020 period.  For each five (5)

Page 2 of 17

year period beginning on January 1, 2021, Buyer will calculate a new maximum per ton credit based on the average maximum credit for Hexane Insolubles agreed to by Buyer with its third party vendors in advance of such applicable time period. If no such market average credit can be established based on Buyer’s third party vendors, then the maximum credit will be eight percent (8%) of the Purchase Price for the tons of Product sold to Buyer during such calendar quarter by the specific Mill.

d.       Soap Number of CTO - Seller will provide a credit equal to eight percent (8%) of the Purchase Price for the tons of Below Standard Product sold to Buyer during such calendar quarter by the specific Mill if the WQA of the Soap Number exceeds the Specification for that Mill. Such credit, if payable, shall be limited to a maximum of thirty dollars ($30.00) per ton during the January 1, 2016 to December 31, 2020 period.  For each five (5) year period beginning on January 1, 2021, Buyer will calculate a new maximum per ton credit based on the average maximum credit for Soap Number of CTO agreed to by Buyer with its third party vendors in advance of such applicable time period. If no such market average credit can be established based on Buyer’s third party vendors, then the maximum credit will be eight percent (8%) of the Purchase Price for the tons of Below Standard Product sold to Buyer during such calendar quarter by the specific Mill.

e.       Black Liquor in BLSS. Seller will provide a credit for excess black liquor included in the tons of Below Standard Product sold to Buyer during such calendar quarter based on the amount that the WQA of Black Liquor is above the Specification maximum limit. For example, if 1000 tons of BLSS is sold that had a WQA of Black Liquor of sixteen percent (16%), then the allowed credit would be (16% - 10%) * 1000 = 60 tons multiplied by the then-current Purchase Price of BLSS.

ii.            Anthraquinone content. Seller shall not ship Products to Buyer with Anthraquinone levels exceeding 500 ppm. Buyer shall have the right to reject delivery of any load of Products that exceeds such Anthraquinone level. Upon such rejection, the Products shall, at Seller’s expense, either be returned to Seller in accordance with Seller's reasonable instructions or disposed of by Buyer in a manner authorized in advance by Seller.

iii.         Fiber in Soap. See Exhibit B.

iv.        In the event that Seller provides an individual load or loads of Products with one or more Negative Impacts (as defined below), Seller in its discretion shall do one of the following: (a) take back such load(s) with Seller reimbursing Buyer for its freight costs and third party demurrage charges incurred; (b) instruct Buyer to dispose of such loads with Seller reimbursing Buyer for its actual costs incurred for such disposal; or (c) if Buyer provides in writing the actual and reasonable costs it would incur to accept and process such load(s), then Seller may, in its sole discretion, agree to cover such costs and then allow Buyer to proceed with processing such load(s). In the event Seller elects in its sole discretion to pursue either of the foregoing options (a) or (b), Buyer shall have no responsibility for payment to Seller for such load(s). For purposes of this section, a “Negative Impact” refers to (a) a Product varying so significantly from a Specification that it would require substantial pre-processing or other extraordinary corrective measures prior to using such Product in Buyer’s typical production processes, or (b) a Product adversely affected by a temporary process change at Seller’s Mill or Mills, such as adding a pulping agent, which would result in abnormal plugging, fouling, or buildup in Buyer’s production system so as to interfere with Buyer’s standard production process.

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v.          Each Mill has the right to do its own testing to validate Buyer’s testing accuracy. In the event of a discrepancy, a mutually acceptable third-party laboratory will be used to settle the discrepancy. Each Party agrees to: (a) accept the values provided by the third party laboratory and (b) pay half of such laboratory’s charge for such testing.

vi.          Each claim for credits outlined in this Section 1 must be made in writing within sixty (60) days after close of the calendar quarter in which the applicable Products were Delivered, or such claim shall be deemed to have been waived.

D. Process Change: If Seller implements an ongoing process change at a Mill different from current operations that results in ongoing Negative Impacts, then Buyer shall have the right to discontinue such purchases of such Product from such Mill, and Seller shall have the right to sell such Product to a third party until such time as the Negative Impacts are no longer occurring, with no liability to Buyer under this Agreement or at law or in equity in connection with such process change.

E. Freight: Buyer is responsible for determining the mode of transportation and for providing suitable tank trucks, rail cars or barges for shipments of one hundred percent (100%) of the Products from the Mills. All freight charges, insurance, demurrage and all other expenses incident thereto are for Buyer’s account; provided that, if Buyer incurs third party demurrage charges due to Seller’s delay, then Seller shall reimburse Buyer for such charges. Seller will make commercially reasonable efforts to fully load tank trucks or rail cars to minimize total cost of transportation. Buyer may request and Seller shall provide a credit of one percent (1%) of the Purchase Price for each one percent (1%) of volume that each load falls below ninety five percent (95%) of the working capacity of the tank truck or rail car used to transport such load from the applicable Mill.

Buyer and Seller will work in good faith to enable transportation by barge as is appropriate and mutually agreed. The initial cost to develop and construct infrastructure for barge shipments shall be borne by Buyer and the maintenance costs for such infrastructure shall be as agreed in writing.

F. Notwithstanding the foregoing, Seller shall have no responsibility to issue credits under this Section 1 or any other compensation or reimbursement to Buyer to the extent that any failure to meet the quality requirements set forth in Exhibit B is due to quality issues with BLSS provided by Buyer to Seller for Toll Acidulation (as defined in Section 5A).

G. EXCEPT FOR SECTION 1(C)(IV), IN NO EVENT WILL THE TOTAL OF CREDITS AVAILABLE UNDER THIS SECTION 1 FOR BELOW STANDARD PRODUCTS EXCEED THE PURCHASE PRICE DESCRIBED IN SECTION 3 FOR THE APPLICABLE TONNAGE OF SUCH BELOW STANDARD PRODUCTS. THE REMEDIES SET FORTH IN THIS SECTION 1 ARE THE SOLE AND EXCLUSIVE REMEDIES TO COMPENSATE FOR, OR CORRECT THE CONDITION OF, DEFECTIVE OR NON-CONFORMING PRODUCTS, AND NO OTHER REMEDIES CONNECTED WITH THIS AGREEMENT, AT LAW, OR IN EQUITY SHALL APPLY TO SUCH MATTERS.

2. TERM

A. This Agreement shall be effective for an initial period commencing on the Effective Date until terminated as provided herein (the “Term”).

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B. Notwithstanding Section 1 or any other provision of this Agreement to the contrary, beginning January 1, 2022 through December 31, 2025, either Party may give a written notice to the other, designating one (1) Mill each (and the volume of Products it produces) that the notifying party elects to remove from the Mills that are subject to the terms, conditions, and requirements of this Agreement for the remainder of the Term (a “Mill Removal Notice”). If Buyer elects to remove any Mill from the Agreement pursuant to this Section 2B, then the Incentive Payments described in Exhibit G, Sections 1 and 3 shall not be adversely affected or reduced by such removal, and for the remainder of the Term Buyer shall include in the percentage and volume calculations of each incentive payment the volumes of Products produced by such Mill during the most recent Calendar Half prior to such removal, subject to the wind down provisions of Section 2C below.

C. Beginning January 1, 2025 and at any time thereafter, either Party may give written notice to the other Party that this Agreement will terminate five (5) years from the date of such notice (the “Agreement Termination Date”). In that event, the quantity of Products subject to this Agreement will be gradually reduced during a five (5) year period beginning one (1) year after the termination notice date and ending on the Agreement Termination Date (the “Transition Period”). The Parties shall meet at least six (6) months prior to each calendar year of the Transition Period to discuss the commercial needs of each Party in regards to this Agreement, and may mutually agree to the Mills and the quantity of Products that are released from the purchase and sale obligations set forth in this Agreement in the following year(s). In the event that the Parties do not reach such a mutual agreement, then, without limiting the first sentence of Section 1A(i) above, the following schedule of Products volumes shall be automatically released from any purchase and sale obligations set forth this Agreement during the Transition Period, subject to adjustments for opting Product volumes or mills out of this Agreement as provided in Section 2B and Exhibits C and D:

i. During the first year (“Year One”) of the Transition Period, Seller shall be obligated to supply, and Buyer shall be obligated to purchase, one hundred percent (100%) of the output of BLSS and CTO produced at Mills (such total amount of Products sold by Seller to Buyer during such year to be known as the “Year One Volume”);

ii. During the second year of the Transition Period, fifteen percent (15%) of the Year One Volume shall be released from the purchase and sale obligations set forth in this Agreement. The amount of Products released from this Agreement during such year shall be known as the “Year Two Released Volume”;

iii. During the third year (“Year Three”) of the Transition Period, the Year Two Released Volume plus an additional fifteen percent (15%) of the Year One Volume shall be released from the purchase and sale obligations in this Agreement. The total amount of Products released from this Agreement during such year shall be known as the “Year Three Released Volume”;

iv. During the fourth year (“Year Four”) of the Transition Period, the Year Three Released Volume plus an additional fifteen percent (15%) of the Year One Volume shall be released from the purchase and sale obligations in this Agreement. The total amount of Products released from this Agreement during such year shall be known as the “Year Four Released Volume”; and

v. During the fifth and final year of the Transition Period, the Year Four Released Volume plus an additional fifteen (15%) of the Year One Volume shall be released from the purchase and sale obligations in this Agreement.

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Seller shall be free to sell any volumes of released Products to any third parties. Seller shall have the right to designate in writing at least sixty (60) days prior to each year of the Transition Period the specific U.S. domestic Mill or Mills to be utilized to comprise the volume of Product released from this Agreement pursuant to this Section 2; provided that, Seller will utilize good faith efforts to match the released Product volume from an entire Mill or Mills and provided that the designation right is Seller’s decision based on its operational and economic concerns.

D. If Buyer determines to permanently shut down any CTO refinery, has not acquired or been provided the use of another CTO refinery by merger, acquisition or otherwise during the Term, and does not intend to replace such shut down refinery with another CTO refinery or refineries during the Term, then Buyer shall give at least six (6) months prior written notice to Seller describing the facility and date of such shut down (a “Shut Down Notice”). Seller shall, within ninety (90) days of receipt of a Shut Down Notice, give written notice to Buyer that Seller in its sole discretion elects to (a) remove the volume of CTO handled by the applicable refinery upon shut down and sell it to third parties, or (b) require Buyer to continue to fulfill its obligations to purchase one hundred percent (100%) of Seller’s Products under the terms of this Agreement for up to two (2) years after shut down of any such refinery and allow Buyer to distribute the volume of CTO handled by such refinery (the “Impacted Volume”) to third parties (the “Distributor Period”). Seller may terminate the Distributor Period earlier, and sell such volume of CTO to third parties, upon at least (30) days’ prior written notice to Buyer. If Seller does not terminate the Distributor Period early, then after such Distributor Period, and with at least six (6) months prior written notice to Seller, Buyer may do the following:

i. If Buyer’s Brazilian BLSS refinery was shut down, then Buyer may remove from this Agreement the Brazilian BLSS, after first ceasing to purchase any BLSS from all other suppliers for such refinery.

ii. If one of Buyer’s North American CTO refineries was shut down, then Buyer may remove from this Agreement fifty percent (50%) of the then-current annual volume of Seller’s North American CTO Equivalent Tons, after Buyer first ceases to purchase: (a) the same volume of CTO Equivalent Tons from all other suppliers in the aggregate, or (b) all Products from all other suppliers.

iii. If all of Buyer’s North American CTO refineries were shut down, then Buyer may remove from this Agreement all of Seller’s CTO Equivalent Tons.

3. PURCHASE PRICE

A. The prices for each of the Products (each a “Purchase Price”) shall be established quarterly in accordance with this Section 3. All Purchase Prices are exclusive of any applicable sales, use, VAT or similar transaction taxes, fees or impositions based on Buyer’s purchases of Products under this Agreement. Buyer shall be solely responsible for all applicable taxes in connection with its purchases of the Products, except for any taxes on income, franchise, or similar taxes on imposed on Seller’s revenues.

B. For CTO sold by Seller from its North American Mills, the Purchase Price shall be established in accordance with Exhibit C.

C. For BLSS sold by Seller from its North American Mills, the Purchase Price shall be established in accordance with Exhibit D.

D. For BLSS or CTO sold by Seller from its Brazilian Mill, the Purchase Price shall be established in accordance with Exhibit E.

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4. TERMINATION OF EXISTING AGREEMENT

The Parties acknowledge that the Crude Tall Oil and Black Liquor Soap Skimmings Agreement, dated December 6, 2006 as amended, among MeadWestvaco Corporation, Rock Tenn Mill Company and RockTenn CP, LLC, is deemed terminated and superseded by merger of these companies as of July 1, 2015.

5. TOLL ACIDULATION

A. Upon mutual written agreement by the Parties, Buyer may deliver to Seller BLSS from Buyer or Buyer’s vendors on behalf of Buyer for acidulation into CTO (“Toll Acidulation”). Buyer and Seller are not obligated to present or accept any minimum volumes for tolling but each will make commercially reasonable efforts to accommodate volume requests from the other Party when possible. From time to time, the Parties may enter into specific agreements which include volume expectations as opportunities arise.

B. Buyer shall be responsible for the costs of delivering the BLSS to the Mills for Toll Acidulation.

C. For Toll Acidulation, the price shall be established in accordance with Exhibit F.

D. Seller shall have the right to refuse to sell BLSS to Buyer from Mills with limited or no acidulation capacity, to transfer BLSS produced by Seller to alternative Mills for acidulation into CTO (“Internally Acidulated BLSS”), and to sell the resulting CTO to Buyer in accordance with the terms of this Agreement, including without limitation the pricing for CTO as set forth herein. Seller shall be responsible for handling and shipping among Seller’s facilities such Internally Acidulated BLSS in connection with Seller’s acidulation efforts. Seller shall give Buyer written notice at least sixty (60) days prior to beginning such internal acidulation efforts. Once Buyer has begun purchasing CTO from such Internally Acidulated BLSS from Seller, Seller shall give Buyer written notice at least one (1) year prior to terminating such supply of CTO, which termination shall be in Seller’s sole discretion. Such termination shall thereby obligate Buyer to resume the purchase of BLSS from the original producing Mill.

6. NEW MILL OPTION; SALE OF MILL; SALE OF BUYER; THIRD PARTY PRODUCTS

A. During the Term, in the event Seller or its affiliates enable the new production of BLSS or CTO at existing mills or acquire, construct or otherwise begin to operate additional mills which produce BLSS or CTO (each, a “New Mill”), Seller may in its discretion provide Buyer the option of adding to this Agreement the CTO or BLSS production of each New Mill, subject to any time limits as Seller may determine (the “New Mill Option”). If Seller elects to provide such option, Seller shall provide notice of availability to Buyer one hundred and eighty (180) days, or such other time as Seller may determine, prior the date of first availability of Products from such New Mill. If Seller and Buyer elect to add a New Mill to this Agreement, then for a term mutually agreed upon in writing by the Parties: (1) Buyer shall purchase one hundred percent (100%) of the output of Products produced at the New Mill; (2) the New Mill shall be added to the list of Seller’s Mills set forth in Section 1A; and (3) quality Specifications will be added to this Agreement by a mutually agreed upon written amendment, which Specifications will be based in part on the most recent six (6) months’ production from the New Mill; provided, that with respect to Seller’s Covington, VA; Tacoma, WA and La Tuque, Quebec mills, such quality Specifications are set forth on Exhibit B. For the avoidance of doubt, Seller’s decision not to add Product volumes from

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any New Mill(s) to this Agreement will not negatively impact the incentive payment set forth in Exhibit G, Section 3.

B. In the event that Seller or its affiliates sells or transfers its ownership interest in any Mill during the Term, Seller or its affiliates, as the case may be, may, subject to Section 17 below, assign this Agreement in part to the entity acquiring such Mill or may cause such entity to enter into a written agreement, pursuant to which such entity will assume all of Seller’s or its affiliates’ rights and obligations under this Agreement with respect to such Mill, except that such entity acquiring such Mill shall not be subject to Section 6A. Upon such assignment and assumption, Seller and its affiliates, as applicable, shall have no further obligations under this Agreement with respect to such Mill. For the avoidance of doubt, any sale or transfer of a Mill will not negatively impact the incentive payment set forth in Exhibit G, Section 3.

C. During the Term, and subject to Section 17 below, in the event that Buyer or its affiliates sells or transfers all or substantially all of its business to which this Agreement relates, then Buyer or its affiliate will cause the acquirer to enter into a written agreement, on and as of the consummation of that sale or transfer, pursuant to which that entity will assume all of Buyer’s rights and obligations under this Agreement. Upon such assignment and assumption, Buyer and its affiliates, as applicable, shall have no further obligations under this Agreement; provided that such acquirer meets Seller’s reasonable and standard credit requirements. If Buyer closes a facility or ceases production at such facility for any period or reason, Buyer shall give Seller first priority to continue to sell its Products to Buyer, and Buyer shall terminate or reduce supplies from its other vendors prior to reducing the amount of any supply of Products purchased from Seller under this Agreement.

D. From the Effective Date through December 31, 2021, Seller and its affiliates will not directly or indirectly purchase, utilize, process or sell CTO or BLSS from any third party unaffiliated with Seller (“Third Party Products”). From January 1, 2022 through the remainder of the Term, Seller may purchase Third Party Products, and utilize, process, or sell such Third Party Products to third parties in Seller’s sole discretion, subject to the following terms:

i.      If Seller intends to commence purchases of any Third Party Products, Seller’s Director of Procurement shall notify the CEO of Buyer of such intent prior to Seller’s first purchase of Third Party Products.

ii.     If Seller intends to commence purchases of any Third Party Products, Seller shall provide Buyer with written notice of the type of Product(s), a sample of such Third Party Products, anticipated monthly or quarterly volumes, originating mill location, Seller mill location (if third party BLSS is to be acidulated by Seller) and the anticipated time period Seller intends for the Third Party Products transactions to occur (the “Option Notice”). Buyer shall have the option to add the Third Party Products described in the Option Notice to this Agreement by notifying Seller in writing within thirty (30) days of receipt of the Option Notice. If Buyer does not provide such notice to Seller within such thirty (30) day period, or declines to exercise such option, then such Third Party Products shall not become part of this Agreement, and Seller may sell the Third Party Products described in the Option Notice to one or more third parties. Upon Seller purchasing any Third Party Products, the pricing and incentives on Exhibits C, D, E and G shall adjust, as applicable, as provided in such Exhibit(s).

iii.      For the avoidance of doubt, Third Party Products shall not be included in Products sold to Buyer under this Agreement without Buyer’s prior written consent. If Buyer elects to add the Third Party Products described in the Option Notice to this Agreement, then for the time period set forth in the Option Notice: (a) Buyer shall purchase one hundred percent (100%) of the Third Party Products identified in the Option Notice; and (b) quality

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Specifications for such Third Party Products will be added to this Agreement by a mutually agreed upon written amendment to this Agreement.

7. [RESERVED]

8. ROSIN AVAILABILITY FOR THE PRODUCTION OF ROSIN BASED SIZE

Seller acknowledges that Buyer is and intends to be a party to a marketing alliance agreement with one or more third parties that sell rosin based size. Buyer agrees to make available to its marketing alliance partner(s) tall oil rosin for the manufacture of rosin size required by Seller at competitive market prices in quantities no less than the Rosin Supply Available for Seller (as defined below). Seller acknowledges that the terms of sale of the rosin size to Seller from such third parties will be negotiated by Seller and any third parties. For purposes of this Agreement the “Rosin Supply Available for Seller” shall mean for each calendar quarter, an amount equal to the sum of: (a) 100,000 pounds and (b) the average quarterly volume of rosin required to manufacture rosin size manufactured by Buyer for Seller’s benefit during the preceding two calendar quarters. Subject to availability, Buyer will use commercially reasonable efforts to supply its marketing alliance partner(s) with Seller’s additional rosin size requirements in excess of Seller's committed rosin supply. Notwithstanding the foregoing, neither this section nor any other provision of this Agreement shall be deemed to require or commit Seller to purchase the Rosin Supply Available for Seller or any other volume of rosin size from any third party, including without limitation any third parties with whom Buyer has or intends to have a marketing alliance. This Agreement is not intended to and does not create any third party beneficiaries, and Seller may or may not decide to purchase rosin size from such third parties in Seller’s sole discretion and without liability for any expenses or costs of Buyer or any third parties in connection with such decisions.

9. PERFORMANCE INCENTIVES

Seller is eligible for certain performance incentives outlined in Exhibit G.

10. OTHER CONSIDERATIONS

A. Due to unique conditions related to the location in Panama City, Florida, Buyer may from time to time offer to Swap (as defined below) Products from the Panama City Mill with other consumers of CTO or BLSS. Buyer will make a good faith effort to make the Swap occur on an ongoing basis. Seller recognizes Buyer may not be able to come to reasonable terms and should a Swap agreement fail to be completed or fail to continue for the duration of the Term, Buyer shall bear all costs associated with the installation of equipment at Seller’s Panama City, Florida Mill required to enable the loading of BLSS into rail cars or tank trucks for delivery to Buyer; provided that, any such costs paid by Buyer will be credited against any Unique Contractual Commitment payment owed by Buyer to Seller pursuant to Exhibit J, Section 2 of this Agreement provided that such credit must be utilized within five (5) years of Buyer incurring such costs. For purposes of this Agreement, a “Swap” shall mean the trade, exchange or similar transaction between Buyer and a third party unaffiliated with Buyer of: (i) Buyer’s CTO and/or BLSS for (ii) the CTO Equivalent Ton of such third party’s CTO or BLSS.

B. Once per year during the Term: (i) Seller shall have the right to audit Buyer’s compliance with Sections 1C, 3, 9 and Exhibit J of this Agreement during the most recent twelve (12) month period and (ii) Buyer shall have the right to audit Seller’s compliance with Sections 1(first paragraph), 2B, 3D, 6D, and Exhibit H of this Agreement during the most recent twelve (12) month period.

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i. Such audit shall be conducted by means of a nationally recognized, independent accounting firm (the “Auditor”) approved by both Parties (such approval shall not be unreasonably withheld, conditioned or delayed) who shall inspect and examine the relevant books and records, including all underlying contracts, amendments, and pricing letters, of the audited Party, in order to verify compliance with the applicable Section of or Exhibit to this Agreement.

ii. The requesting Party shall notify the other Party in writing of its intent to exercise its audit rights hereunder. The Parties shall in good faith make reasonable efforts to mutually agree upon a joint letter of instruction for the Auditor which shall describe the format and procedures the Auditor shall undertake and the documents it will examine in the course of its audit. If the Parties are unable to agree on the terms of the letter of instruction, the Auditor shall make its examination and determination in accordance with written instructions provided by the requesting Party; provided that, such instructions shall request the examination to be conducted in accordance with this Section 10B. A copy of such written instruction shall be provided to the other Party no later than thirty (30) days prior to the Auditor commencing its audit; provided that, prior to commencing such audit, the Auditor shall have agreed to hold in confidence and not disclose to the requesting Party any of the audited Party’s information. No later than ten (10) days before the audit, the Auditor shall provide the audited Party with a list of documents to be made available by the audited Party and audited Party shall have the documents ready for inspection and review when the Auditor arrives to conduct the audit. In addition, the audited Party is obligated to furnish and make available to the Auditor such other information in the audited Party’s possession as is required in the Auditor’s reasonable judgment to conduct the audit. The Auditor shall have the right to discuss such information with the audited Party’s officers and employees as is required in the Auditor’s reasonable opinion to conduct the audit. The Auditor shall provide both Parties with a final written conclusion of compliance or non-compliance and the amount of the discrepancy, if any. If a discrepancy is found by the Auditor, the Auditor’s conclusion shall specify the amount owed by the applicable Party and a general statement as to the basis for the discrepancy.

iii. The Auditor’s costs and expenses associated with each such audit shall be borne by the auditing Party if such audit reveals that no refund or reimbursement is due from the audited Party. If such audit reveals an error in payment of five percent (5%) or more in any item subject to the audit, such that a refund or reimbursement is due from the audited Party, then the audited Party shall pay the Auditor’s costs and expenses.

iv. If as a result of such audit it is determined that one Party owes money to the other Party, such Party shall pay such money to the other Party within thirty (30) days of written request by the other, together with interest thereon at the prevailing prime rate as published by The Wall Street Journal newspaper currently entitled “Money Rates,” not to exceed the maximum rate allowed by applicable law. Interest shall accrue from the date of the discrepancy to the date of payment to the other Party.”

C. Seller reserves the right to install acidulation equipment and convert BLSS to CTO at any Mill at any time.

D. The Parties shall comply with the Alkaline Brine procedures set forth on Exhibit H.

E. The Parties shall comply with the Black Liquor Return procedures set forth on Exhibit I.

F. Seller shall give at least twelve (12) months’ notice prior to ceasing acidulation of BLSS into CTO for any period exceeding thirty (30) days at any Mill which formerly conducted such

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acidulation, unless such cessation is due to a force majeure event described in Section 16 below. If such Mill is still producing BLSS despite ceasing acidulation, Buyer shall be obligated to purchase BLSS from such Mill. If, pursuant to Exhibit H, a Party requires return of Alkaline Brine generated from the resulting offsite acidulation of such BLSS, Buyer shall arrange for return of the Alkaline Brine to such Mill, and Seller shall pay the transportation costs for such return during the period of cessation or the remaining portion of the Term, whichever is sooner. If such cessation of acidulation occurs without the required twelve (12) months’ notice, then Seller shall have the option in its discretion to (i) internally acidulate such BLSS at its other Mills pursuant to Section 5D above, (ii) sell such BLSS to Buyer at a distressed price of fifty percent (50%) of the then-current Purchase Price for BLSS under this Agreement, for each month that notice was delayed and less than the required twelve (12) months’ notice (the “Delay Period”), or (iii) choose to self-consume and burn such BLSS for a period of twelve (12) months, or any combination of the foregoing. At the end of the Delay Period, Buyer shall be obligated to purchase BLSS at the then-current Purchase Price for BLSS.

G. The Parties shall comply with the strategic supplier payment procedures set forth on Exhibit J.

11. DELIVERY

A. If requested by Buyer, Seller will inform Buyer of planned plant outages as well as its estimate of the quantity of CTO and/or BLSS it may have available in any succeeding calendar quarter. Seller’s estimate shall not obligate Seller to provide any minimum quantity.

B. Subject to variances in volumes of Products supplied due to planned outages, seasonality in production, changes in product grade mix, or other such general production factors, Seller shall not purposely withhold volumes from month to month in order to deliver Products in bulk at unequal intervals.

C. Title and risk of loss to all CTO and BLSS shall pass to Buyer at Seller’s Mill site when loaded in tank trucks, rail cars or barges, as mutually agreed upon (“Delivery”).

12. TERMS OF PAYMENT

A. Seller shall invoice Buyer upon Delivery of Products and Buyer shall pay each invoice within thirty (30) days of the invoice date. Each Delivery of CTO and BLSS shall constitute a separate and distinct sale, and any default by Buyer in ordering, accepting or paying for any Delivery shall not affect Seller’s right to insist upon full performance of Buyer’s obligations hereunder for the full Term. Likewise, any default by Seller in its performance hereunder shall not affect Buyer’s right to insist upon full performance of Seller’s obligations hereunder for the full Term.

B. To the extent that Buyer is more than thirty (30) days past due with payments, Buyer shall pay interest on unpaid amounts at the rate equal to the lesser of (i) then-applicable “Prime Rate” of interest per annum as published in the Wall Street Journal plus eight percent (8%), and (ii) the maximum amount permitted by applicable law. To the extent that Buyer is sixty (60) or more days past due with payments, Seller may demand a letter of credit for past due amounts. Seller may cease to ship CTO and/or BLSS to Buyer until such letter of credit or all past due payments are received, in addition to its other rights and remedies in connection with this Agreement.

C. (i) Buyer may, but shall not be obligated to, obtain a credit rating by independent, third party, credit-rating institutions. Without limiting Seller's other rights and remedies, in the

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event that Buyer obtains a credit rating and Buyer's credit rating at any time falls to or below a Moody’s Investor Services (“Moody’s”) standard rating of “B1”, or a Standard & Poor’s Financial Services LLC (“S&P”) standard rating of “B+” (each a “Minimum Credit Level”), then Seller shall have the right, in its sole discretion, on thirty (30) days’ notice to Buyer, to require Buyer either to (a) post a letter of credit in an amount necessary to cover all outstanding accounts receivable due from Buyer to Seller and all pending sales of Product by Seller to Buyer or (b) forward a cash amount equal to one hundred twenty five percent (125%) of the highest accounts receivable balance of Seller’s sales to Buyer over the previous six (6) months or one hundred twenty five percent (125%) of the forecasted accounts receivable balance, whichever is higher. Any such cash amount received by Seller from Buyer may be comingled with other funds of Seller and shall not bear interest. At Seller’s sole discretion, any such cash amounts and the proceeds of any draws under a letter of credit may be applied by Seller to outstanding accounts receivable from Buyer or held as security for Buyer’s obligations under this Agreement. Upon application of all or any portion of such cash amounts or proceeds of draws under a letter of credit to outstanding accounts receivable from Buyer, Seller shall have the right, in its sole discretion, to require Buyer to post additional letters of credit or additional cash in amounts sufficient to continue to meet the requirements of clause (a) or (b) above, as applicable. To secure Buyer’s obligations under this Agreement, Buyer hereby grants to Seller a security interest in all letters of credit, letter of credit rights and proceeds thereof and all cash amounts now or hereafter received by Seller pursuant to this Section 12C. Seller may suspend production and defer or eliminate further Deliveries and sell its Products to other buyers, in whole or in part, until such conditions are met, with a corresponding adjustment to any volume requirements or credit calculations or incentive payments under this Agreement. When both of Buyer’s credit ratings return to levels above the Minimum Credit Levels, the original payment terms of this Agreement shall be reinstituted for so long as Buyer’s credit levels remain above the Minimum Credit Levels.

(ii) In the event Buyer is unable to obtain or elects not to obtain the foregoing Moody’s or S&P credit ratings, Buyer shall provide its annual audited financial statements and its quarterly company-prepared financial statements to Seller, and any other related information reasonably requested by Seller, in order for Seller to make an informed and accurate assessment of whether Buyer meets the Seller’s typical credit requirements and whether Buyer must post a letter of credit or cash amount as described above; provided, that if Buyer does not provide such financial information, then Buyer acknowledges that Seller may, among its other rights, require Buyer to post the letter of credit or forward the cash amount described above. Buyer’s posting of such letter of credit or forwarding of such cash amount shall be absolute and necessary preconditions to Seller’s obligation to provide any Products to Buyer under this Agreement, and any failure of Buyer to satisfy such conditions will result, in Seller’s sole discretion, in (a) reduction in any amount that Seller deems appropriate to the volumes or percentage of Products sold to Buyer under this Agreement, (b) Seller having the right to sell to third parties any portion of the volumes or percentage of Products not sold to Buyer, and (c) Seller having the right to declare that Buyer’s failure is sufficient and conclusive evidence of Buyer’s insolvency and inability to pay its debts as they mature, in which case Seller shall have the right to terminate this Agreement pursuant to Section 18A below.

13. WARRANTIES

Seller represents and warrants to Buyer that (a) Seller will convey good and marketable title to the Product free and clear of any liens and encumbrances, and (b) Seller shall manufacture the Products in accordance with all applicable laws, rules and regulations. Seller MAKES NO OTHER WARRANTIES, OF ANY KIND WHATSOEVER, WHETHER EXPRESS, IMPLIED, ORAL, WRITTEN, OR OTHERWISE, INCLUDING, WITHOUT LIMITATION,

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WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE.

14. CLAIMS

All breach of warranty claims relating to any Delivery must be made in writing within thirty (30) days after close of the calendar quarter in which the CTO or BLSS, as the case may be, is received, or it shall be deemed to have been waived.

15. LIABILITY

Except as set forth in this Agreement, Seller’s liability to Buyer or anyone claiming through or on behalf of Buyer with respect to any claim or loss arising out of a breach of warranty or this Agreement shall be limited to an amount equal to (a) the applicable Purchase Price of the volume of CTO or BLSS, associated with such liability, or (b) where mutually agreed to, replacement of the CTO or BLSS in question. In no event shall EITHER party be liable for any PUNITIVE, incidental, consequential, indirect or special losses or damages (including, without limitation, lost profits, lost revenues, loss of business AND DIMUNITION OF VALUE), whether foreseeable or not AND whether OR NOT occasioned by any failure to perform or the breach of any representation, warranty, covenant or other obligation under this Agreement for any cause whatsoever. Any warranty claim shall be brought within six (6) months of the date of delivery of the relevant load(s) of Products from Seller to Buyer or thereafter be barred. For the avoidance of doubt, any warranty claim shall apply only to those warranties expressly provided for in Section 13 above.

16. FORCE MAJEURE

Seller shall not be liable for any failure to deliver or for any delay in delivery, and Buyer shall not be liable for any failure to request or take delivery or for any delay in requesting or taking delivery, when any such failure or delay shall be caused, directly or indirectly, in each case beyond the reasonable control of the party whose performance is delayed, by fire, floods, accidents, explosions, machinery breakdown, sabotage, strikes or other labor disturbances (regardless of the reasonableness of the demands of labor), civil commotions, riots, invasions, wars (present or future), acts, restraints, requisitions, regulations or directions of any government in or of the United States, Canada or Brazil, voluntary or mandatory compliance by Buyer or Seller with any request of any federal, state, or local government or any officer, department, agency or committee of such government for purposes of national defense or for materials represented to be for purposes of (directly or indirectly) producing articles for national defense or completing national defense facilities, shortages of labor, fuel, power or raw materials, inability to obtain supplies, failure of normal sources of supplies, inability to obtain or delays of transportation facilities, any act of God or any cause (whether similar or dissimilar to the foregoing), beyond the reasonable control of Buyer or Seller, as the case may be, affecting the production, Delivery, or consumption of any materials covered by this Agreement. The affected Party shall promptly notify the other Party of the occurrence of any of the foregoing and use commercially reasonable efforts to resolve such issue promptly.

17. ASSIGNMENT

This Agreement may not be assigned (by operation of law or otherwise) in whole or in part by either Party without first obtaining the written consent of the other Party thereto, which consent shall not be unreasonably delayed, conditioned, or withheld; provided, however, that either Party may assign or otherwise transfer all of its rights and obligations under this Agreement to any entity controlling, controlled by or under common control with such Party, upon prior written

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notice to the other Party. In each case of assignment the entity to which the Agreement is assigned shall accept all the duties and obligations of the assigning Party hereunder.

18. DEFAULT

A. Either Party may terminate this Agreement, immediately, upon giving written notice to the other Party, if the other Party liquidates or suspends all, or a substantial portion, of its business; dissolves or terminates its existence; becomes insolvent or unable to pay its debts as they mature; or commits any act of bankruptcy or makes any arrangement, composition or assignment for the benefit or creditors and such bankruptcy or other insolvency proceedings are not discharged within sixty (60) days of the occurrence thereof, all of which events shall be considered a breach hereunder. Upon termination, the non-defaulting Party may seek such damages to which it may be entitled at law or in equity.

B. Except as to defects in condition or nonconformance of Products, which are governed by the rights remedies set forth in Section 1 above, or Buyer’s failure to provide assurance of financial stability as set forth in Section 12C above, if either Party defaults in the performance of any material provision of this Agreement, the other Party may give notice in writing of such default and, if after thirty (30) days following the giving of such notice said default has not been rectified, the other Party may terminate this Agreement by providing written notice of termination.

C. The termination of this Agreement shall not release either Party from the obligation to pay any sum that may be owing to the other Party (whether then or thereafter due to Seller) or operate to discharge any liability that had been incurred by either Party prior to any such termination. Furthermore, the provisions in Sections 1C, 12-15, 17, 19 and 21-22 shall survive the termination or expiration of this Agreement.

19. INSURANCE AND SAFETY POLICIES

A. Each Party shall obtain, pay for and keep in force during the Term the following insurance coverage with at least the following minimum limits of coverage: (i) statutory workers’ compensation in accordance with all state and local requirements; (ii) employer’s liability with a limit of no less than $1,000,000 for one or more claims arising from each accident; (iii) commercial general liability, including coverage for completed operations (for at least two years after the performance of the Services) and contractually assumed obligations, with liability limit of no less than $1,000,000 per occurrence and $2,000,000 general aggregate; (iv) business automobile liability for all owned, non-owned and hired vehicles with bodily injury limits of no less than $1,000,000 combined single limit; and (v) excess umbrella liability coverage with a limit of no less than $5,000,000 per occurrence. Each Party shall cause its insurers to (a) waive all rights of subrogation against the other Party, its officers, directors and employees, (b) include the other Party and its affiliates as additional insureds for the coverages set forth in clauses (iii), (iv) and (v) above and (c) furnish certificates of insurance to the other Party in a form acceptable to the other Party evidencing that the above insurance is in effect and otherwise complies with the requirements of this Section. Each Party shall give the other Party at least thirty (30) days written notice of any material change or alteration in or the cancellation of any required policy of insurance. At all times during the Term, all insurance must be issued by an entity authorized to do business in the State(s) where business is transacted relating to the Products and must be rated “A-” or better with a financial rating of VIII or better in the A.M. Best Rating Guide. The carrying by each Party of the insurance required herein shall in no way be interpreted as relieving such Party of any other obligations it may have under this Agreement.

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B. As Buyer’s employees and representatives will be coming to the Mills on a recurring basis, Buyer agrees that its employees and any of its authorized subcontractors at each Mill site shall strictly abide by such Mill’s safety and security policies and procedures.

20. NOTICE

Any notice which a Party hereto is required to give or may desire to give in connection with this Agreement shall be in writing and shall either be (a) delivered in person, (b) sent standard overnight courier or (c) mailed, registered or certified mail, return receipt requested, postage prepaid and addressed to the attention of the Party intended as the recipient at the address listed below. The Party provided such written notice shall also send a contemporaneous notice by email to the recipient’s email address provided below. All such notices shall be deemed to have been received upon the date of delivery.

To Seller:

WestRock Company

3950 Shackleford Road

Duluth, GA 30096

Attn: Chief Procurement Officer

With a copy to:

WestRock Company

Attn: General Counsel

504 Thrasher Street

Norcross, Georgia 30071

Email: LegalDepartment@WestRock.com

To Buyer:

Ingevity Corporation

Attn: CTO Procurement Manager

5255 Virginia Avenue

North Charleston, SC 29406

Ingevity Corporation

Attn: General Counsel

5255 Virginia Avenue

North Charleston, SC 29406

21. Confidentiality.

Any Party receiving Confidential Information (as defined below) from the other Party shall maintain the confidential and proprietary status of such Confidential Information, keep such Confidential Information and each part thereof within its possession or under its control sufficient to prevent any activity with respect to the Confidential Information that is not specifically authorized by this Agreement, use commercially reasonable efforts, in each case, to prevent the disclosure of any Confidential Information to any other person or entity, and use commercially reasonable efforts to ensure that such Confidential Information is used only for those purposes specifically authorized herein; provided, however, that such restrictions shall not apply to any Confidential Information which is (a) independently developed by, or already in possession of, the receiving Party, as demonstrated by its written records, (b) in the public domain at the time of its receipt or thereafter becomes part of the public domain through no fault

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of the receiving Party, (c) received without an obligation of confidentiality from a third party who, to the receiving party’s knowledge, has the right to disclose such information, (d) released from the restrictions of this Section 21 by the express written consent of the other Party hereto, or (e) compelled to be disclosed by law or pursuant to a court order (the disclosing Party shall, however, use commercially reasonable efforts to obtain confidential treatment of any such disclosure). “Confidential Information” shall mean: (x) the terms and conditions of this Agreement and (y) all information and records relating to the operation of each other's business, including, without limitation, trade secrets, technical information, development, production, sales, marketing, pricing and financial details related to the refining of CTO. Each Party shall return or destroy all Confidential Information of the other Party within thirty (30) days following the termination of this Agreement for any reason, except for one (1) copy that may be retained by the recipient’s legal department for archival, compliance or enforcement purposes.

22. GOVERNING LAW

This Agreement is to be governed by and interpreted in accordance with the internal substantive laws of the Commonwealth of Virginia.  The Parties consent to and agree that venue is proper with, and any and all disputes arising out of or relating in any way to the Agreement shall be subject to, the exclusive jurisdiction of, the U.S. District Court for the Eastern District of Virginia (Richmond Division), or the Circuit Court of the County of Henrico, Virginia.  The Parties consent to the jurisdiction of such courts, agree to accept service of process by mail and waive any jurisdictional or venue defenses otherwise available. The Parties expressly reject the applicability to this Agreement of the United Nations Convention on Contracts for the International Sale of Goods.

23. WAIVER; AMENDMENT

Except as otherwise expressly provided herein, the failure or delay by either Party to exercise any of its rights hereunder shall not be construed to be a waiver of any of such rights. The provisions of this Agreement may be waived, altered, amended or supplemented, in whole or in part, only by a writing signed by both Parties. No waiver of any performance required under this Agreement shall be deemed a waiver of future compliance with all of the terms hereof.

24. ENTIRE AGREEMENT

This Agreement constitutes the entire agreement between the Parties hereto with respect to the sale and purchase of CTO and BLSS and there are no understandings, representations or warranties of any kind whatsoever with respect to such sale and purchase except as expressly herein set forth. All modifications to this Agreement shall be in writing and signed by Buyer and Seller. A failure to exercise any right hereunder with respect to any breach shall not constitute a waiver of such right with respect to any subsequent breach. Any references to “the Agreement” in the exhibits hereto are references to this Agreement.

25. COUNTERPARTS; FACSIMILE SIGNATURE

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument. A signature sent by telecopy or facsimile transmission shall be as valid and binding upon the Party as an original signature of such Party.

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the day and year first above written.

INGEVITY CORPORATION		WESTROCK SHARED
		SERVICES, LLC
By:		By:
	Name:		Name:
	Title:		Title:
		WESTROCK MWV, LLC
		By:
			Name:
			Title:

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EX-10.9

Exhibit 10.9

INTELLECTUAL PROPERTY AGREEMENT

This INTELLECTUAL PROPERTY AGREEMENT, dated as of ______, 2016 (this “Agreement”), is by and between WestRock Company, a Delaware corporation (“Parent”), and Ingevity Corporation, a Delaware corporation (“SpinCo”). Capitalized terms used herein and not otherwise defined shall have the respective meanings assigned to them in Section 1 or the Separation Agreement. SpinCo and Parent may be individually referred to herein as a “Party” and collectively as the “Parties”.

R E C I T A L S

WHEREAS, Parent and SpinCo have entered into that certain Separation and Distribution Agreement, dated as of even date herewith, (the “Separation Agreement”);

WHEREAS, the Separation Agreement sets forth the principal corporate transactions required to effect the Separation;

WHEREAS, Parent and SpinCo desire to enter into this Agreement to set forth the terms and conditions pertaining to the allocation of ownership and other rights associated with certain Intellectual Property; and

WHEREAS, this Agreement is deemed to be an Ancillary Agreement under the Separation Agreement.

NOW, THEREFORE, in consideration of the mutual agreements, provisions and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:

1.           DEFINITIONS. For the purpose of this Agreement, the following terms shall have the following meanings:

1.1          “Mill Recovery Technology/Intellectual Property” shall mean all Technology, Software and Intellectual Property directed to mill-based recovery processes that generate biorefinery materials.

1.2          “Common Information” shall mean that Information that is related to, but not dedicated to, the SpinCo Assets, the SpinCo Liabilities, the SpinCo Business or the Transferred Entities.

1.3          “Control” or “Controlled” means, with respect to Intellectual Property, that SpinCo or a member of the SpinCo Group owns such Intellectual Property, in whole or in part, and/or has the right to grant a license to Parent with respect to such Intellectual Property as set forth herein and without incurring any financial or other obligations to any other Person, subject, in each case, to the terms of any license or other agreement to which SpinCo or any of the SpinCo Group is a party that relates to any such Intellectual Property.

1.4          “Improvements” means any improvements, derivative works, enhancements, refinements, advances or other modifications with respect to any Licensed SpinCo IP (whether or not patentable or reduced to practice).

1.5          “Intellectual Property” shall mean all of the following whether arising under the Laws of the United States or of any other foreign or multinational jurisdiction: (a) patents, patent applications (including patents issued thereon) and statutory invention registrations, including reissues, divisions, continuations, continuations in part, substitutions, renewals, extensions and reexaminations of any of the foregoing, and all rights in any of the foregoing provided by international treaties or conventions, (b) trademarks, service marks, trade names, service names, trade dress, logos and other source or business identifiers, including all goodwill associated with any of the foregoing, and any and all common law rights in and to any of the foregoing, registrations and applications for registration of any of the foregoing, all rights in and to any of the foregoing provided by international treaties or conventions, and all reissues, extensions and renewals of any of the foregoing, (c) Internet domain names, accounts with Facebook, LinkedIn, Twitter and similar social media platforms, registrations and related rights, (d) copyrightable works, copyrights, moral rights, mask work rights, database rights and design rights, in each case, other than Software, whether or not registered, and all registrations and applications for registration of any of the foregoing, and all rights in and to any of the foregoing provided by international treaties or conventions, (e) confidential and proprietary information, including trade secrets, invention disclosures, processes and know-how and (f) any other intellectual property rights, in each case, other than Software. The items listed in subsections (b) and (c) of this Section 1.5 are referred to herein as “Trademark-Related IP”.

1.6          “Licensed SpinCo IP” means (i) the SpinCo Intellectual Property (excluding Trademark-Related IP), the SpinCo Software, and the SpinCo Technology, and (ii) all rights, interests and claims of either Party or any of the members of its Group as of the Effective Time with respect to Information that is exclusively related to the items of the aforementioned clause (i), in each case subject to the limitations set forth herein, and to the extent Controlled by SpinCo or any member of the SpinCo Group as of the Effective Time (including as a result of the assignments made by this Agreement). Licensed SpinCo IP shall exclude SpinCo Intellectual Property, SpinCo Software, SpinCo Technology, and Intellectual Property: (a) directed to chemically activated carbon products or any processes for manufacturing chemically activated carbon products (including, for the avoidance of doubt, activated carbon sheets); (b) directed to ex-mill processes for purifying crude tall oil and for isolating, purifying and derivatizing lignin from black liquor or any products created using any such processes; (c) licensed to Alberdingk Boley, Inc. (“ABI”), except to the extent outside the “Field,” as that term is defined in the “License Agreement” dated February 3, 2006, by and between MeadWestvaco Corporation and ABI; (d) owned by Purification Cellutions, LLC, a joint venture between MeadWestvaco Corporation and Applied Ceramics, Inc.; (e) directed to any products utilizing specialty chemicals derived from co-products of the kraft pulping process sold by SpinCo into the paper or packaging field or any processes for manufacturing such products (including, for the avoidance of doubt, paper sizing); (f) owned by a third party (including for these purposes any joint venture or partnership or similar business entity of which SpinCo is a member or in which SpinCo has an ownership interest) and not sublicensable to Parent or any member of the Parent Group by SpinCo or any member of the SpinCo Group.

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1.7          “Other IP” shall mean all Intellectual Property, other than Registrable IP, that is owned by either Party or any member of its Group as of the Effective Time.

1.8          “Parent Field” shall mean the businesses (whether or not such businesses are or have been terminated, divested or discontinued) conducted at any time prior to the Effective Time, or actively pursued at the Effective Time, by the Parent or any member of the Parent Group, outside the SpinCo Field.

1.9          “Parent IP Liabilities” means all Liabilities relating to, arising out of or resulting from exploitation by, or on behalf of the Parent Group, of: (i) Intellectual Property, Software, Technology owned by Parent Group (“Parent IP Assets”); (ii) the Information that is exclusively related to the items of the aforementioned clause (i); and (iii) all Liabilities arising from the use by the Parent Group of Common Information.

1.10        “Parent Name and Parent Marks” shall mean the names, marks, trade dress, logos, monograms, domain names and other source or business identifiers of either Party or any member of its Group using or containing “WestRock”, “MeadWestvaco” or “RockTenn” or their ticker symbols “WRK,” “MWV,” or “RKT”, either alone or in combination with other words or elements, and all names, marks, trade dress, logos, monograms, domain names and other source or business identifiers confusingly similar to or embodying any of the foregoing either alone or in combination with other words or elements, together with the goodwill associated with any of the foregoing.

1.11        “Permitted Party” shall mean a third party (a) in which Parent or other member of the Parent Group has an ownership interest of greater than fifteen percent (15%); (b) with respect to whom SpinCo has provided its consent to be a sublicensee under the Licensed SpinCo IP, such consent not to be unreasonably withheld; or (c) who conducts business, operations, or activities within the Parent Field on behalf of Parent or other member of the Parent Group.

1.12        “Pre-applied Adhesive Technology/Intellectual Property” shall mean all Technology, Software and Intellectual Property relating to the methods and processes of applying adhesives to cellulose based materials (e.g., paper, paper board, liner board and corrugated materials) and packaging, including without limitation, related machine and press manufacturing processes, and the use of such cellulose based materials with adhesives applied thereon. Pre-applied Adhesive Technology/Intellectual Property does not include (a) the chemical formulations of adhesives; (b) the chemical formulations of tackifying resins, dilutents, and plasticizers used in such adhesives; or (c) any process Technology for making adhesives.

1.13        “Registrable IP” shall mean all patents, patent applications, statutory invention registrations, registered trademarks, registered service marks, trademark and service mark applications, registered Internet domain names and copyright registrations.

1.14        “Software” shall mean any and all (a) computer programs, including any and all software implementation of algorithms, models and methodologies, whether in source code, object code, human readable form or other form, (b) databases and compilations, including any and all data and collections of data, whether machine readable or otherwise, (c) descriptions, flow charts and other work products used to design, plan, organize and develop any of the

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foregoing, (d) screens, user interfaces, report formats, firmware, development tools, templates, menus, buttons and icons and (e) documentation, including user manuals and other training documentation, relating to any of the foregoing.

1.15        “SpinCo Field” shall mean the businesses (whether or not such businesses are or have been terminated, divested or discontinued) conducted at any time prior to the Effective Time, or actively pursued at the Effective Time, by SpinCo or any member of its Group, outside the Parent Field.

1.16        “SpinCo Intellectual Property” shall mean (a) the Registrable IP set forth on Schedule 1.16 and (b) all Other IP owned by, licensed by or to, or sublicensed by or to either Party or any member of its Group as of the Effective Time that is dedicated to the SpinCo Business, including any Other IP set forth on Schedule 1.16; provided, however, that SpinCo Intellectual Property does not include any Registrable IP or Other IP that comprises (i) Mill Recovery Technology/Intellectual Property, or (ii) Pre-applied Adhesives Technology/Intellectual Property.

1.17        “SpinCo IP Assets” means all (i) SpinCo Intellectual Property, SpinCo Software, SpinCo Technology, and SpinCo IP Contracts, and (ii) all rights, interests and claims of either Party or any of the members of its Group as of the Effective Time with respect to Information that is exclusively related to the items of the aforementioned clause (i) or the SpinCo IP Liabilities.

1.18        “SpinCo IP Contracts” shall mean the following contracts and agreements to which either Party or any member of its Group is a party or by which it or any member of its Group or any of their respective Intellectual Property is bound, whether or not in writing; provided, that SpinCo IP Contracts shall not include any contract or agreement that is expressly contemplated to be retained by Parent or any member of the Parent Group from and after the Effective Time pursuant to any provision of the Separation Agreement, this Agreement or any other Ancillary Agreement:

(a) any vendor contracts or agreements with a Third Party pursuant to which such Third Party (i) grants or receives a license, permission or use right to Intellectual Property, any covenant not to sue under any Intellectual Property, or access and use rights to information technology (for example, software as a service agreements), or (ii) undertakes an obligation to assign, or has a right to be assigned, Intellectual Property to or by either Party or any member of its Group exclusively for use or in connection with the SpinCo Business as of the Effective Time;

(b) any contract or agreement pertaining primarily to Intellectual Property that is otherwise expressly contemplated pursuant to this Agreement, the Separation Agreement or any of the Ancillary Agreements to be assigned to, or be a contract or agreement in the name of, SpinCo or any member of the SpinCo Group;

(c) any other contract or agreement exclusively related to the SpinCo IP Assets; and

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(d) any contracts, agreements or settlements specifically set forth on Schedule 1.18, including the right to recover any amounts under such contracts, agreements or settlements.

1.19        “SpinCo IP Liabilities” means all Liabilities relating to, arising out of or resulting from exploitation by, or on behalf of the SpinCo Group, of: (i) the SpinCo Intellectual Property, SpinCo Software, SpinCo Technology, and SpinCo IP Contracts; (ii) the Information that is exclusively related to the items of the aforementioned clause (i); and (iii) all Liabilities arising from the use by the SpinCo Group of Common Information.

1.20        “SpinCo Name and SpinCo Marks” shall mean the names, marks, trade dress, logos, monograms, domain names and other source or business identifiers of SpinCo or any member of its Group using or containing “Ingevity” or its symbol “NGVT”, either alone or in combination with other words or elements, and all names, marks, trade dress, logos, monograms, domain names and other source or business identifiers confusingly similar to or embodying any of the foregoing either alone or in combination with other words or elements, together with the goodwill associated with any of the foregoing.

1.21        “SpinCo Software” shall mean all Software owned or licensed by either Party or member of its Group dedicated for use in the SpinCo Business as of the Effective Time; provided, however, that SpinCo Software does not include (i) any Software directed to Mill Recovery Technology/Intellectual Property, or (ii) any Software directed to Pre-applied Adhesive Technology/Intellectual Property.

1.22        “SpinCo Technology” shall mean all Technology owned or licensed by either Party or any member of its Group dedicated for use in the SpinCo Business as of the Effective Time; provided, however, that SpinCo Technology does not include any Technology that is (i) Mill Recovery Technology/Intellectual Property, or (ii) Pre-applied Adhesive Technology/Intellectual Property.

1.23        “Technology” shall mean all technology, designs, formulae, algorithms, procedures, methods, discoveries, processes, techniques, ideas, know-how, research and development, technical data, tools, materials, specifications, processes, inventions (whether patentable or unpatentable and whether or not reduced to practice), apparatus, creations, improvements, works of authorship in any media, confidential, proprietary or nonpublic information, and other similar materials, and all recordings, graphs, drawings, reports, analyses and other writings, and other tangible embodiments of the foregoing in any form whether or not listed herein, in each case only to the extent in existence as of the Effective Time, and, other than Software.

2. THE SEPARATION

2.1          Matters Governed Exclusively by this Agreement. This Agreement shall exclusively govern the allocation of Assets and Liabilities that are comprised of Intellectual Property of the Parent Group or the SpinCo Group. In the case of any conflict between the Separation Agreement and this Agreement in relation to any matters addressed herein, this Agreement shall prevail.

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2.2         Transfer of Assets and Assumption of Liabilities.

(a)          On or prior to the Effective Time, but in any case, prior to the Distribution, in accordance with the Plan of Reorganization:

(i)          Transfer and Assignment of SpinCo IP Assets. Parent shall, and shall cause the applicable members of its Group to, contribute, assign, transfer, convey and deliver to SpinCo, or to the applicable SpinCo Designees, and SpinCo shall, and shall cause such SpinCo Designees to, accept from Parent and the applicable members of the Parent Group, all of Parent’s and such Parent Group member’s respective direct or indirect right, title and interest in and to all of the SpinCo IP Assets (it being understood that if any SpinCo IP Asset shall be held by a Transferred Entity or a wholly owned Subsidiary of a Transferred Entity, such SpinCo IP Asset may be assigned, transferred, conveyed and delivered to SpinCo as a result of the transfer of all of the equity interests in such Transferred Entity from Parent or the applicable members of the Parent Group to SpinCo or the applicable SpinCo Designee); and

(ii)         Acceptance and Assumption of SpinCo IP Liabilities. SpinCo shall, and shall cause the applicable SpinCo Designees to, accept, assume and agree faithfully to perform, discharge and fulfill all the SpinCo IP Liabilities in accordance with their respective terms. SpinCo shall, and shall cause such SpinCo Designees to, be responsible for all SpinCo IP Liabilities, regardless of when or where such SpinCo IP Liabilities arose or arise, or whether the facts on which they are based occurred prior to or subsequent to the Effective Time, regardless of where or against whom such SpinCo IP Liabilities are asserted or determined (including any SpinCo IP Liabilities arising out of claims made by Parent’s or SpinCo’s respective directors, officers, employees, agents, Subsidiaries or Affiliates against any member of the Parent Group or the SpinCo Group) or whether asserted or determined prior to the date hereof, and regardless of whether arising from or alleged to arise from negligence, recklessness, violation of Law, fraud or misrepresentation by any member of the Parent Group or the SpinCo Group, or any of their respective directors, officers, employees, agents, Subsidiaries or Affiliates.

2.3          Approvals and Notifications.

(a)          Approvals and Notifications for SpinCo IP Assets. To the extent that the transfer or assignment of any SpinCo IP Asset or the assumption of any SpinCo IP Liability requires Approvals or Notifications, the Parties shall use their commercially reasonable efforts to obtain or make such Approvals or Notifications as soon as reasonably practicable; provided, however, that, except to the extent expressly provided in this Agreement or as otherwise agreed in writing between Parent and SpinCo, neither Parent nor SpinCo shall be obligated to contribute capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any Person in order to obtain or make such Approvals or Notifications.

(b)          Delayed SpinCo Transfers. If and to the extent that the valid, complete and perfected transfer or assignment to the SpinCo Group of any SpinCo IP Asset or assumption by the SpinCo Group of any SpinCo IP Liability would be a violation of applicable Law or require any Approvals or Notifications in connection with the Separation that has not been obtained or made by the Effective Time, then, unless the Parties shall otherwise mutually agree

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in writing, the transfer or assignment to the SpinCo Group of such SpinCo IP Assets or the assumption by the SpinCo Group of such SpinCo IP Liabilities, as the case may be, shall be automatically deemed deferred and any such purported transfer, assignment or assumption shall be null and void until such time as all legal impediments are removed or such Approvals or Notifications have been obtained or made. Notwithstanding the foregoing, any such SpinCo IP Assets or SpinCo IP Liabilities shall continue to constitute SpinCo IP Assets and SpinCo IP Liabilities for all other purposes of this Agreement.

(c)          Treatment of Delayed SpinCo IP Assets and Delayed SpinCo IP Liabilities. If any transfer or assignment of any SpinCo IP Asset (or a portion thereof) or any assumption of any SpinCo IP Liability (or a portion thereof) intended to be transferred, assigned or assumed hereunder, as the case may be, is not consummated on or prior to the Effective Time, whether as a result of the provisions of Section 2.3(b) or for any other reason (any such SpinCo IP Asset (or a portion thereof), a “Delayed SpinCo IP Asset” and any such SpinCo IP Liability (or a portion thereof), a “Delayed SpinCo IP Liability”), then, insofar as reasonably possible and subject to applicable Law, the member of the Parent Group retaining such Delayed SpinCo IP Asset or such Delayed SpinCo IP Liability, as the case may be, shall thereafter hold such Delayed SpinCo IP Asset or Delayed SpinCo IP Liability, as the case may be, for the use and benefit of the member of the SpinCo Group entitled thereto (at the expense of the member of the SpinCo Group entitled thereto). In addition, the member of the Parent Group retaining such Delayed SpinCo IP Asset or such Delayed SpinCo IP Liability shall, insofar as reasonably possible and to the extent permitted by applicable Law, treat such Delayed SpinCo IP Asset or Delayed SpinCo IP Liability in the ordinary course of business in accordance with past practice and take such other actions as may be reasonably requested by the member of the SpinCo Group to whom such Delayed SpinCo IP Asset is to be transferred or assigned, or which will assume such Delayed SpinCo IP Liability, as the case may be, in order to place such member of the SpinCo Group in a substantially similar position as if such Delayed SpinCo IP Asset or Delayed SpinCo IP Liability had been transferred, assigned or assumed as contemplated hereby and so that all the benefits and burdens relating to such Delayed SpinCo IP Asset or Delayed SpinCo IP Liability, as the case may be, including use, non-abandonment, avoidance from contribution to the public domain, risk of loss, potential for gain, and dominion, control and command over such Delayed SpinCo IP Asset or Delayed SpinCo IP Liability, as the case may be, and all costs and expenses related thereto, shall inure from and after the Effective Time to the SpinCo Group.

(d)          Transfer of Delayed SpinCo IP Assets and Delayed SpinCo IP Liabilities. If and when the Approvals or Notifications, the absence of which caused the deferral of transfer or assignment of any Delayed SpinCo IP Asset or the deferral of assumption of any Delayed SpinCo IP Liability pursuant to Section 2.3(b), are obtained or made, and, if and when any other legal or other impediments for the transfer or assignment of any Delayed SpinCo IP Asset or the assumption of any Delayed SpinCo IP Liability have been removed, the transfer or assignment of the applicable Delayed SpinCo IP Asset or the assumption of the applicable Delayed SpinCo IP Liability, as the case may be, shall be effected in accordance with the terms of this Agreement and/or the applicable Ancillary Agreement as soon as reasonably practicable.

(e)          Costs for Delayed SpinCo IP Assets and Delayed SpinCo IP Liabilities. Any member of the Parent Group retaining a Delayed SpinCo IP Asset or a Delayed SpinCo IP Liability due to the deferral of the transfer or assignment of such Delayed SpinCo IP Asset or the

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deferral of the assumption of such Delayed SpinCo IP Liability, as the case may be, shall not be obligated, in connection with the foregoing, to expend any money unless the necessary funds are advanced (or otherwise made available) by SpinCo or the member of the SpinCo Group entitled to the Delayed SpinCo IP Asset or Delayed SpinCo IP Liability, other than reasonable out-of-pocket expenses, attorneys’ fees and recording or similar fees, all of which shall be promptly reimbursed by SpinCo or the member of the SpinCo Group entitled to such Delayed SpinCo IP Asset or Delayed SpinCo IP Liability.

2.4          Novation of SpinCo IP Liabilities.

(a)          Except as set forth in Schedule 2.4(a), each of Parent and SpinCo, at the request of the other, shall use its commercially reasonable efforts to obtain, or to cause to be obtained, as soon as reasonably practicable, any consent, substitution, approval or amendment required to novate or assign all SpinCo IP Liabilities and obtain in writing the unconditional release of each member of the Parent Group that is a party to any such arrangements, so that, in any such case, the members of the SpinCo Group shall be solely responsible for such SpinCo IP Liabilities; provided, however, that, except as otherwise expressly provided in this Agreement or any of the Ancillary Agreements, neither Parent nor SpinCo shall be obligated to contribute any capital or pay any consideration in any form (including providing any letter of credit, guaranty or other financial accommodation) to any third Person from whom any such consent, substitution, approval, amendment or release is requested.

(b)          If Parent or SpinCo is unable to obtain, or to cause to be obtained, any such required consent, substitution, approval, amendment or release as set forth in Section 2.4(a) and the applicable member of the Parent Group continues to be bound by such agreement, lease, license or other obligation or Liability (each, an “Unreleased SpinCo IP Liability”), SpinCo shall, to the extent not prohibited by Law, as indemnitor, guarantor, agent or subcontractor for such member of the Parent Group, as the case may be, (i) pay, perform and discharge fully all the obligations or other Liabilities of such member of the Parent Group that constitute Unreleased SpinCo IP Liabilities from and after the Effective Time and (ii) use its commercially reasonable efforts to effect such payment, performance or discharge prior to any demand for such payment, performance or discharge is permitted to be made by the obligee thereunder on any member of the Parent Group. If and when any such consent, substitution, approval, amendment or release shall be obtained or the Unreleased SpinCo IP Liabilities shall otherwise become assignable or able to be novated, Parent shall promptly assign, or cause to be assigned, and SpinCo or the applicable SpinCo Group member shall assume, such Unreleased SpinCo IP Liabilities without exchange of further consideration.

2.5          Disclaimer of Representations and Warranties. EACH OF PARENT (ON BEHALF OF ITSELF AND EACH MEMBER OF THE PARENT GROUP) AND SPINCO (ON BEHALF OF ITSELF AND EACH MEMBER OF THE SPINCO GROUP) UNDERSTANDS AND AGREES THAT, EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN THE SEPARATION AGREEMENT, NO PARTY TO THIS AGREEMENT OR OTHERWISE, IS REPRESENTING OR WARRANTING IN ANY WAY AS TO THE ASSETS, BUSINESSES OR LIABILITIES TRANSFERRED OR ASSUMED AS CONTEMPLATED HEREBY OR THEREBY, AS TO ANY CONSENTS OR APPROVALS REQUIRED IN CONNECTION THEREWITH, AS TO THE VALUE OR FREEDOM FROM ANY SECURITY INTERESTS

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OF, OR ANY OTHER MATTER CONCERNING, ANY ASSETS OF SUCH PARTY, OR AS TO THE ABSENCE OF ANY DEFENSES OR RIGHT OF SETOFF OR FREEDOM FROM COUNTERCLAIM WITH RESPECT TO ANY CLAIM OR OTHER ASSET, INCLUDING ANY ACCOUNTS RECEIVABLE, OF ANY PARTY, OR AS TO THE LEGAL SUFFICIENCY OF ANY ASSIGNMENT, DOCUMENT OR INSTRUMENT DELIVERED HEREUNDER TO CONVEY TITLE TO ANY ASSET OR THING OF VALUE UPON THE EXECUTION, DELIVERY AND FILING HEREOF OR THEREOF. EXCEPT AS MAY EXPRESSLY BE SET FORTH HEREIN OR IN THE SEPARATION AGREEMENT, ALL SUCH ASSETS ARE BEING TRANSFERRED ON AN “AS IS,” “WHERE IS” BASIS AND THE RESPECTIVE TRANSFEREES SHALL BEAR THE ECONOMIC AND LEGAL RISKS THAT (I) ANY CONVEYANCE WILL PROVE TO BE INSUFFICIENT TO VEST IN THE TRANSFEREE GOOD AND MARKETABLE TITLE, FREE AND CLEAR OF ANY SECURITY INTEREST, AND (II) ANY NECESSARY APPROVALS OR NOTIFICATIONS ARE NOT OBTAINED OR MADE OR THAT ANY REQUIREMENTS OF LAWS OR JUDGMENTS ARE NOT COMPLIED WITH.

3.          LICENSES

3.1          License Grant to Parent. Subject to the terms and conditions of this Agreement, SpinCo hereby grants to each individual member of the Parent Group, on behalf of itself and the other members of the SpinCo Group, and shall cause the other members of the SpinCo Group to grant to each individual member of the Parent Group, a non-exclusive, worldwide, perpetual, irrevocable, fully paid-up, royalty-free right and license, for use in the Parent Field, to (i) use, reproduce, distribute, display, perform, make Improvements and exploit the Licensed SpinCo IP, and (ii) make, have made, use, sell, offer to sell and import any goods and services incorporating, embodying or utilizing the Licensed SpinCo IP. The foregoing license shall be transferable or sublicensable by Parent Group solely to a Permitted Party, and, subject to the restrictions herein, with any sale or transfer of a Parent business that utilizes the Licensed SpinCo IP. Any such transfer or sublicense shall require the Permitted Party or, in the case of a sale or transfer of a Parent business, the transferee, to agree pursuant to a written agreement to maintain any trade secrets and Information included in the Licensed SpinCo IP in strict confidence. Such agreement shall prohibit any further sublicensing or transfer of rights by the Permitted Party, or, in the case of a sale or transfer of a Parent business, the transferee, or any use of the Licensed SpinCo IP outside the scope of the license granted to Parent herein. Parent shall remain responsible and liable for the Permitted Parties’ exercise of any rights sublicensed hereunder and any use of the Licensed SpinCo IP by such Permitted Party outside of the permitted scope of the license. Parent shall enforce material breaches of the terms of any such sublicense of rights and notify SpinCo of any material violation thereof by a Permitted Party. If Parent enters an agreement to transfer the license granted to it under this Section 3.1 in connection with any sale or transfer of a Parent business, then SpinCo and members of the SpinCo Group shall be made third party beneficiaries under such transfer agreement to enforce breaches of the license.

3.2          License Grant to SpinCo. Subject to the terms and conditions of this Agreement, Parent hereby grants to each individual member of the SpinCo Group, on behalf of itself and the other members of the Parent Group, and shall cause the other members of the Parent Group to grant to each individual member of the SpinCo Group, a non-exclusive, worldwide, perpetual, irrevocable, fully paid-up, royalty-free right and license, solely for use in the SpinCo Field, to (i)

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use, reproduce, distribute, display, perform, make improvements and exploit Intellectual Property owned or controlled by Parent or a member of the Parent Group and currently used in the SpinCo Business, and (ii) make, have made, use, sell, offer to sell and import any goods and services incorporating, embodying or utilizing such Intellectual Property currently used in the SpinCo Business. Such license shall be transferrable subject to the foregoing restriction with any sale or transfer of a SpinCo business that utilizes such Intellectual Property, but, for the avoidance of doubt, such license shall not otherwise be sublicensable or transferable. Any transfer by SpinCo or a member of its Group shall require the transferee to agree pursuant to a written agreement to maintain any trade secrets and Information included in the transferred Intellectual Property in strict confidence. Such agreement shall prohibit any further transfer of rights by such party or any use of the transferred Intellectual Property outside the scope of the license granted to SpinCo herein. If SpinCo enters an agreement to transfer the license granted to it under this Section 3.2 in connection with any sale or transfer of a SpinCo business, then Parent and members of the Parent Group shall be made third party beneficiaries under such transfer agreement to enforce breaches of the license.

3.3          Neither Party shall make a trade secret of the other Party public or otherwise destroy or impair the trade secret status of such trade secret without the express, advance, written consent of the other Party. Any agreement by which a trade secret is transferred or sublicensed shall be subject to the same confidentiality requirements as stated herein.

3.4          No Implied Rights. As between the Parties, all right, title and interest in and to all Licensed SpinCo IP shall be owned by SpinCo and the other members of the SpinCo Group, and Parent shall not acquire, and nothing contained herein shall be construed as conferring, by implication, estoppel or otherwise, any license or other right, title or interest in or to such Licensed SpinCo IP or any other Intellectual Property owned by SpinCo or of any of its Group, except for the license granted to Parent pursuant to Section 3.1.

3.5          Improvements. For the avoidance of doubt, as between the Parties, Parent shall own all right, title and interest in and to any and all Improvements authored, developed, invented, reduced to practice or otherwise created by Parent or any member of the Parent Group and all Intellectual Property rights therein and thereto.

3.6          Enforcement of Licensed IP.

(a)          Control of Enforcement IP Actions. Except as may otherwise be mutually agreed by the Parties, as between the Parties, SpinCo shall have the right to enforce the Licensed SpinCo IP as follows:

(i)          SpinCo shall have the right, but not the obligation (through itself and/or through its designee), to control the initiation, conduct and, subject to this Section 3.6, settlement or other resolution, at its cost and expense and in its sole discretion, of any enforcement claim, demand, action, suit or proceeding, whether civil or criminal or in law or in equity (each, an “IP Action”) relating to the Licensed SpinCo IP, including the right to communicate any objection or other form of challenge to any Third Party; and

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(ii)         if SpinCo does not initiate such an IP Action itself or through its designee with respect to infringement, misappropriation or other violation of any Licensed SpinCo IP within the Parent Field by a Third Party within ninety (90) days after receipt of a written request from Parent to assume control over the enforcement of such violation of such Licensed SpinCo IP inside the Parent Field, then Parent shall have, with the prior consent of SpinCo, which will not be unreasonably withheld, the right, but not the obligation, to bring and to control such IP Action (provided that if Parent does not do so within thirty (30) days after the end of such original ninety (90) day-deadline, the right to initiate and control an IP Action shall revert back to SpinCo and shall again be subject to the terms set forth above). For avoidance of doubt, Parent shall not have any right to initiate any IP Action with respect to infringement, misappropriation or other violation of any Licensed SpinCo IP by a Third Party except within the Parent Field.

(b)          Enforcement Action Process.

(i)          The Party initiating or otherwise controlling any enforcement IP Action hereunder (the “Enforcing Party”), including the right to communicate any objection or other form of challenge to any Third Party, shall, as between the Parties, have the right to select counsel for any IP Action initiated by it or its designee pursuant to this Section 3.6. The Party that is not the Enforcing Party (the “Non-Enforcing Party”) shall, to the extent it is a necessary party to the IP Action (or is otherwise reasonably requested by the enforcing Party), join the Enforcing Party (and/or, if applicable, its designee(s)) at the Enforcing Party’s expense and agree to be represented by counsel for the Enforcing Party in any infringement or other IP Action commenced by the Enforcing Party (or its designee) and shall, upon request of the Enforcing Party, execute such documents and perform such other acts as may be reasonably required and requested by the Enforcing Party at the Enforcing Party’s expense in connection with such enforcement IP Action; provided, that the Non-Enforcing Party shall have the right to engage, at its cost and expense, independent counsel of its choice to advise such Non-Enforcing Party in connection with such assistance to the Enforcing Party.

(ii)         The Non-Enforcing Party shall cooperate with, and provide reasonable assistance to, the Enforcing Party (and its designees) in connection with any IP Action brought by the Enforcing Party (or its designee) hereunder to the extent relating to the Licensed SpinCo IP, as may be reasonably requested by the Enforcing Party, including by providing access to relevant documents and other evidence (provided that the Parties shall enter into a joint defense agreement with respect to the common interest privilege protecting such communications in a form reasonably acceptable to the Parties) and making its employees available, subject to the other Party’s reimbursement of any costs and expenses incurred by the Non-Enforcing Party in providing such assistance. The Enforcing Party shall keep the Non-Enforcing Party reasonably informed of any determinations or significant developments in any IP Action initiated by it pursuant to this Section 3.6 and, if the Non-Enforcing Party is SpinCo, then the Parent shall reasonably consult with the SpinCo and take into consideration input provided to Parent by SpinCo to the extent reasonable and provided in a timely manner.

(c)          Allocation of Costs and Recoveries. Unless otherwise mutually agreed by the Parties, (i) the costs and expenses relating to any enforcement IP Action commenced pursuant to this Section 3.6 shall be borne by the Enforcing Party; and (ii) any settlement payments or

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damages or other monetary awards (“Recoveries”) recovered in any IP Action by the Enforcing Party, itself or through its designee, pursuant to this Section 3.6, whether by judgment or settlement, shall be allocated in the following order: (A) to reimburse the Enforcing Party for any costs and expenses incurred by or on behalf of the Enforcing Party and/or its designee(s) with respect to such IP Action, (B) to reimburse the Non-Enforcing Party for any costs and expenses incurred by such Party with respect to such IP Action to the extent the Non-Enforcing Party participated in an IP Action pursuant to this Section 3.6 (and has not already been reimbursed by the Enforcing Party), including if it joins such IP Action (but excluding, for the avoidance of doubt, the cost of any counsel employed by the Non-Enforcing Party), and (C) the remainder shall be allocated to the Enforcing Party.

(d)          Settlement of Enforcement IP Action. The Enforcing Party shall not settle, or enter into a voluntary consent judgment with respect to, any enforcement IP Action under this Section 3.6 in a manner that would include any admissions of invalidity or unenforceability against the Non-Enforcing Party, or wrongdoing by the Non-Enforcing Party or any of its Group, or imposes any liability or payment or other obligation on the Non-Enforcing Party or any of its Group, without the Non-Enforcing Party’s written consent (such consent not to be unreasonably withheld, conditioned or delayed) and in any event, without notifying the Non-Enforcing Party of any such proposed settlement or voluntary consent judgment. For the avoidance of doubt, and without limiting the foregoing, as between the Parties, the Enforcing Party shall have the sole and exclusive right to settle, or enter into a voluntary consent judgment with respect to, any enforcement IP Action under this Section 3.6. For the avoidance of doubt, Parent shall not settle or enter into a voluntary consent judgment or enter into any other agreement that shall in any way impair the rights of SpinCo with respect to its Intellectual Property outside the Parent Field without SpinCo’s consent, which may be withheld in its sole option.

3.7          Bankruptcy. In the event that this Agreement is terminated or rejected by SpinCo, a member of the SpinCo Group or its receiver or trustee under applicable bankruptcy laws due to such Party’s bankruptcy, then all rights and licenses granted under or pursuant to this Agreement by SpinCo to Parent are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code (the “Code”) and any similar laws in any other country, licenses of rights to “intellectual property” as defined under the Code for purposes of Section 365(n). The Parties agree that all intellectual property rights licensed hereunder, including, without limitation, any patents or patent applications in any country of SpinCo or a member of SpinCo Group covered by the license grants under this Agreement, are part of the “intellectual property” as defined under the Code for purposes of Section 365(n) subject to the protections afforded the non-terminating Party under Section 365(n) of the Code, and any similar law or regulation in any other country.

3.8          Trademark Disclaimer. Neither Parent nor SpinCo nor any member of the Parent Group or SpinCo Group grants any right or license to the other to use any Parent Name or Parent Mark or SpinCo Name or SpinCo Mark in any manner including, without limitation, use in commerce as a trade name, trademark or other designation of origin. Notwithstanding the foregoing, it is understood that signage, letterhead, invoices, business cards, promotional materials and similar items may reference the Parent Name or Parent Mark “MeadWestvaco” and “MWV” in the same manner as used by SpinCo prior to the Effective Time, during a twelve-month phase out period as SpinCo replaces such Parent Name and Parent Mark with the SpinCo Name and SpinCo Mark.

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4.          MUTUAL RELEASES; INDEMNIFICATION

4.1          Release of Pre-Distribution Claims.

(a)          SpinCo Release of Parent. Except as provided in Sections 4.1(c) and 4.1(d), effective as of the Effective Time, SpinCo does hereby, for itself and each other member of the SpinCo Group, and their respective successors and assigns, and, to the extent permitted by Law, all Persons who at any time prior to the Effective Time have been shareholders, directors, officers, agents or employees of any member of the SpinCo Group (in each case, in their respective capacities as such), remise, release and forever discharge (i) Parent and the members of the Parent Group, and their respective successors and assigns, and (ii) all Persons who at any time prior to the Effective Time are or have been shareholders, directors, officers, agents or employees of any member of the Parent Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, and (iii) all Persons who at any time prior to the Effective Time are or have been shareholders, directors, officers, agents or employees of a Transferred Entity and who are not, as of immediately following the Effective Time, directors, officers or employees of SpinCo or a member of the SpinCo Group, in each case from (A) all SpinCo IP Liabilities and (B) all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent relating to, arising out of or resulting from the SpinCo IP Assets or the SpinCo IP Liabilities.

(b)          Parent Release of SpinCo. Except as provided in Sections 4.1(c) and 4.1(d), effective as of the Effective Time, Parent does hereby, for itself and each other member of the Parent Group, and their respective successors and assigns, and, to the extent permitted by Law, all Persons who at any time prior to the Effective Time have been shareholders, directors, officers, agents or employees of any member of the SpinCo Group (in each case, in their respective capacities as such), remise, release and forever discharge (i) SpinCo and the members of the SpinCo Group, and their respective successors and assigns, and (ii) all Persons who at any time prior to the Effective Time are or have been shareholders, directors, officers, agents or employees of any member of the SpinCo Group (in each case, in their respective capacities as such), and their respective heirs, executors, administrators, successors and assigns, and (iii) all Persons who at any time prior to the Effective Time are or have been shareholders, directors, officers, agents or employees of a Transferred Entity and who are not, as of immediately following the Effective Time, directors, officers or employees of SpinCo or a member of the SpinCo Group, in each case from (A) all Parent IP Liabilities and (B) all Liabilities arising from or in connection with actions, inactions, events, omissions, conditions, facts or circumstances occurring or existing prior to the Effective Time (whether or not such Liabilities cease being contingent, mature, become known, are asserted or foreseen, or accrue, in each case before, at or after the Effective Time), in each case to the extent relating to, arising out of or resulting from the Parent IP Assets or the Parent IP Liabilities.

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(c)          Obligations Not Affected. Nothing contained in Section 4.1(a) or Section 4.1(b) shall impair any right of any Person to enforce this Agreement. Nothing contained in Section 4.1(a) or Section 4.1(b) shall release any Person from:

(i)          any Liability, contingent or otherwise, assumed, transferred, assigned or allocated to the Group of which such Person is a member in accordance with, or any other Liability of any member of any Group under, this Agreement;

(ii)         any Liability that the Parties may have with respect to indemnification or contribution or other obligation pursuant to this Agreement for claims brought against the Parties by third Persons, which Liability shall be governed by the provisions of the Separation Agreement; or

(iii)        any Liability the release of which would result in the release of any Person other than a Person released pursuant to this Section 4.1.

In addition, nothing contained in Section 4.1(a) or Section 4.1(b) shall release any member of the Parent Group from honoring its existing obligations to indemnify any director, officer or employee of SpinCo who was a director, officer or employee of any member of the Parent Group on or prior to the Effective Time, to the extent such director, officer or employee becomes a named defendant in any Action (as defined in the Separation Agreement) with respect to which such director, officer or employee was entitled to such indemnification pursuant to such existing obligations; it being understood that, if the underlying obligation giving rise to such Action is a SpinCo IP Liability, SpinCo shall indemnify Parent for such Liability (including Parent’s costs to indemnify the director, officer or employee) in accordance with the provisions set forth in this Section 4.

(d)          No Claims. Neither Parent nor SpinCo shall make, and shall not permit any member of the Parent Group or SpinCo Group, as the case may be, to make, any claim or demand, or commence any Action asserting any claim or demand, including any claim of contribution or any indemnification, against the other Party or any other member of the Parent Group or SpinCo Group, as the case may be, or any other Person released pursuant to Section 4.1(a) or Section 4.1(b), with respect to any Liabilities released pursuant to Section 4.1(a) or Section 4.1(b).

(e)          Execution of Further Releases. At any time at or after the Effective Time, at the request of either Party, the other Party shall cause each member of its respective Group to execute and deliver releases reflecting the provisions of this Section 4.1.

4.2          Indemnification. Except as otherwise specifically set forth in this Agreement, to the fullest extent permitted by Law, SpinCo shall, and shall cause the other members of the SpinCo Group to, indemnify, defend and hold harmless the Parent Indemnitees from and against any and all Liabilities of the Parent Indemnitees relating to, arising out of or resulting from, directly or indirectly, (a) any SpinCo IP Liability, and (b) any failure of SpinCo, any other member of the SpinCo Group or any other Person to pay, perform or otherwise promptly discharge any SpinCo IP Liabilities in accordance with their terms, whether arising prior to, on or after the Effective Time. Except as otherwise specifically set forth in this Agreement, to the fullest extent permitted by Law, Parent shall, and shall cause the other members of the Parent

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Group to, indemnify, defend and hold harmless the SpinCo Indemnitees from and against any and all Liabilities of the Parent Indemnitees relating to, arising out of or resulting from, directly or indirectly, (a) any Parent IP Liability, and (b) any failure of Parent, any other member of the Parent Group or any other Person to pay, perform or otherwise promptly discharge any Parent IP Liabilities in accordance with their terms, whether arising prior to, on or after the Effective Time.

4.3          Other Terms and Conditions Incorporated by Reference. Each Party acknowledges and agrees that with respect to the indemnification obligations set forth in Section 4.2 above, the terms and conditions of Section 4.4 (Indemnification Obligations Net of Insurance Proceeds and Other Amounts) through Section 4.10 (Survival of Indemnities) of the Separation Agreement are hereby incorporated by reference and shall apply to such indemnification obligations.

5.          EXCHANGE OF INFORMATION; CONFIDENTIALITY

5.1          Agreement for Transfer and Exchange of Information.

(a)          Each of Parent and SpinCo, on behalf of itself and each member of its Group, acknowledges and agrees that, with respect to Information that it will own as a result of the Separation, each is entitled to physical possession of Information that exists in tangible and intangible form, including Software, Technology, or electronic data that may exist on hard-drives, or other electronic storage means (“Tangible/Intangible Information”). Subject to subsections (i)-(iii) of this Section 5.1(a), each Party agrees that prior to the date that is six (6) months after the Effective Time (“Delivery Date”), it will deliver possession of any Tangible/Intangible Information of the other Party that is in its possession or control to the other Party, without retaining any copies.

(i)          To the extent that any Tangible/Intangible Information of SpinCo is in the possession of Parent, is comingled, and separation is not commercially reasonable, Parent will make such Tangible/Intangible Information available to SpinCo to separate at its own expense. If SpinCo chooses to separate such Tangible/Intangible Information, then Parent will deliver possession to SpinCo of any such separated Tangible/Intangible Information within one (1) month after such separation, without retaining any copies.

(ii)         To the extent that any Tangible/Intangible Information of Parent is in the possession of SpinCo, is comingled, and separation is not commercially reasonable, SpinCo shall, at its option, (x) separate such comingled Tangible/Intangible Information at its own expense and deliver possession to Parent of any such separated Tangible/Intangible Information by the Delivery Date, without retaining any copies or (y) deliver possession of all of such comingled Tangible/Intangible Information to Parent by the Delivery Date, without retaining any copies.

(iii)        To the extent Parent is in possession of any comingled Tangible/Intangible Information, that is not separated by SpinCo pursuant to Section 5.1(a)(i), then Parent shall be entitled to maintain possession of such Tangible/Intangible Information, but (A) shall provide reasonable access to SpinCo upon SpinCo’s request, including the opportunity to make extracts or copies, and (B) Parent shall not use or otherwise access that portion of the

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comingled Tangible/Intangible Information that is the property of SpinCo, and shall retain such Tangible/Intangible Information in confidence as set forth in the Section 6.9 of the Separation Agreement. To the extent practical, SpinCo shall be entitled to redact or obscure any of SpinCo’s Tangible/Intangible Information that is so retained by Parent.

(b)          Subject to the applicable confidentiality obligations of the Separation Agreement, each of Parent and SpinCo, on behalf of itself and each member of its Group, agrees to use commercially reasonable efforts to provide or make available, or cause to be provided or made available, to the other Party and the members of such other Party’s Group, at any time before, on or after the Effective Time, as soon as reasonably practicable after written request therefor, any Information (or a copy thereof) in the possession or under the control of such Party or its Group which the requesting Party or its Group requests, in good faith in order to evaluate or use such Information for commercial purposes within the Parent Field or SpinCo Field, as appropriate, to the extent that (i) such Information relates to any SpinCo IP Asset or SpinCo IP Liability, if SpinCo is the requesting Party; (ii) such Information is necessary for Parent or any member of Parent Group to exercise its rights under the license granted in Section 3.1 of this Agreement, if Parent is the requesting Party, (iii) such Information is required by the requesting Party to comply with its obligations under this Agreement; or (iv) such Information is required by the requesting Party to comply with any obligation imposed by any Governmental Authority; provided, however, that, for any of the foregoing (i) – (iv), in the event that the Party to whom the request has been made determines that any such provision of Information could be detrimental to the Party providing the Information, violate any Law or agreement, or waive any privilege available under applicable Law, including any attorney-client privilege, then the Parties shall use commercially reasonable efforts to permit compliance with such obligations to the extent and in a manner that avoids any such harm or consequence.  The Party providing Information pursuant to this Section 5.1(b) shall only be obligated to provide such Information in the form, condition and format in which it then exists, and in no event shall such Party be required to perform any improvement, modification, conversion, updating or reformatting of any such Information, and nothing in this Section 5.1 shall expand the obligations of a Party under Section 5.4.

5.2          Ownership of Information. The provision of any Information pursuant to Section 5.1 shall not affect the ownership of such Information (which shall be determined solely in accordance with the terms of this Agreement, the Separation Agreement and the Ancillary Agreements), or constitute a grant of rights in or to any such Information (such grant of rights, to the extent they exist, are expressly addressed elsewhere in this Agreement). For the avoidance of doubt, no Party shall be required to provide to the other Party any updates, improvements, or additions to any Intellectual Property that it owns after the Effective Time.

5.3          Compensation for Providing Information. The Party requesting Information pursuant to Section 5.1(b) above agrees to reimburse the other Party for the reasonable costs, if any, of creating, gathering, copying, transporting and otherwise complying with the request with respect to such Information (including any reasonable costs and expenses incurred in any review of Information for purposes of protecting the Privileged Information of the providing Party or in connection with the restoration of backup media for purposes of providing the requested Information). Except as may be otherwise specifically provided elsewhere in this Agreement, the Separation Agreement,

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any other Ancillary Agreement or any other agreement between the Parties, such costs shall be computed in accordance with the providing Party’s standard methodology and procedures.

5.4          Other Rights and Obligations. The rights and obligations of the Parties under Section 6.4 (Record Retention), Section 6.5 (Limitation of Liability), Section 6.6 (Other Agreements Providing for Exchange of Information), Section 6.7 (Production of Witnesses; Records; Cooperation), Section 6.8 (Privileged Matters), Section 6.9 (Confidentiality), and Section 6.10 (Protective Arrangements) of the Separation Agreement are hereby incorporated into this Section 5 as if fully set forth herein. To the extent (a) Parent, or any member of the Parent Group, receives from SpinCo, or any member of the SpinCo Group, or (b) SpinCo, or any member of the SpinCo Group receives from Parent, or any member of the Parent Group, any Information that is trade secret under applicable law, the five (5) year confidentiality period of Section 6.9(a) of the Separation Agreement with respect to such Information shall be extended until such time as the received Information is no longer trade secret.

6.          FURTHER ASSURANCES AND ADDITIONAL COVENANTS

6.1          Further Assurances.

(a)          In addition to the actions specifically provided for elsewhere in this Agreement, each of the Parties shall use its commercially reasonable efforts, prior to, on and after the Effective Time, to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable Laws, regulations and agreements to consummate and make effective the transactions contemplated by this Agreement.

(b)          Without limiting the foregoing, prior to, on and after the Effective Time, each Party hereto shall cooperate with the other Party, and without any further consideration, but at the expense of the requesting Party, to execute and deliver, or use its reasonable best efforts to cause to be executed and delivered, all instruments, including instruments of conveyance, assignment and transfer, and to make all filings with, and to obtain all Approvals or Notifications of, any Governmental Authority or any other Person under any permit, license, agreement, indenture or other instrument (including any consents or Governmental Approvals), and to take all such other actions as such Party may reasonably be requested to take by the other Party from time to time, consistent with the terms of this Agreement, in order to effectuate the provisions and purposes of this Agreement and the transfers of the SpinCo IP Assets and the assignment and assumption of the SpinCo IP Liabilities and the other transactions contemplated hereby and thereby.

(c)          On or prior to the Effective Time, Parent and SpinCo in their respective capacities as direct and indirect shareholders of the members of their Groups, shall each ratify any actions which are reasonably necessary or desirable to be taken by Parent, SpinCo or any of the members of their respective Groups, as the case may be, to effectuate the transactions contemplated by this Agreement.

7.          TERMINATION

7.1          Termination. This Agreement may be terminated at any time prior to the Effective Time by Parent, in its sole and absolute discretion, without the approval or consent of

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any other Person, including SpinCo. After the Effective Time, this Agreement may not be terminated except by an agreement in writing signed by a duly authorized officer ofeach of the Parties.

7.2          Effect of Termination. In the event of any termination of this Agreement prior to the Effective Time, no Party (nor any of its directors, officers, employees or agents) shall have any Liability or further obligation to the other Party by reason of this Agreement.

8.          MISCELLANEOUS

8.1          Counterparts; Entire Agreement; Corporate Power.

(a)          This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party.

(b)          This Agreement and the Separation Agreement and the Exhibits, Schedules and appendices hereto and thereto contain the entire agreement between the Parties with respect to the subject matter hereof and supersede all previous agreements, negotiations, discussions, writings, understandings, commitments and conversations with respect to such subject matter, and there are no agreements or understandings between the Parties with respect to this Agreement.

(c)          Parent represents on behalf of itself and each other member of the Parent Group, and SpinCo represents on behalf of itself and each other member of the SpinCo Group, as follows:

(i)          each such Person has the requisite corporate or other power and authority and has taken all corporate or other action necessary in order to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby; and

(ii)         this Agreement has been duly executed and delivered by it and constitutes a valid and binding agreement of it enforceable in accordance with the terms thereof.

(d)          Each Party acknowledges that it and each other Party may execute this Agreement by facsimile, stamp or mechanical signature, and that delivery of an executed counterpart of a signature page to this Agreement (whether executed by manual, stamp or mechanical signature) by facsimile or by email in portable document format (PDF) shall be effective as delivery of such executed counterpart of this Agreement. Each Party expressly adopts and confirms each such facsimile, stamp or mechanical signature (regardless of whether delivered in person, by mail, by courier, by facsimile or by email in portable document format (PDF))made in its respective name as if it were a manual signature delivered in person, agrees that it will not assert that any such signature or delivery is not adequate to bind such Party to the same extent as if it were signed manually and delivered in person and agrees that, at the reasonable request of the other Party at any time, it will as promptly as reasonably practicable cause this Agreement to be manually executed (any such execution to be as of the date of the initial date thereof) and delivered in person, by mail or by courier.

-18-

8.2          Other Incorporated Miscellaneous Terms. The terms and conditions set forth in Section 10.2 (Governing Law) through Section 10.19 (Mutual Drafting) of the Separation Agreement are hereby incorporated into this Section 8 as if fully set forth herein.

[Remainder of page intentionally left blank]

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IN WITNESS WHEREOF, the Parties have caused this Intellectual Property Agreement to be executed by their duly authorized representatives.

WESTROCK COMPANY
By:
	Name:
	Title:
INGEVITY CORPORATION
By:
	Name:
	Title:

EX-99.1

Exhibit 99.1​

[•], 2016​

Dear WestRock Stockholder:

We are pleased to inform you of the separation of the specialty chemicals business from WestRock Company into a newly formed public company named Ingevity Corporation.

We expect that the separation of our specialty chemicals business from WestRock will result in two even stronger companies, each with compelling strategies and opportunities for profitable growth. WestRock aspires to be the premier partner and unrivaled provider of packaging solutions in consumer and corrugated markets, while Ingevity will be a leading global manufacturer of specialty chemicals and high-performance carbon materials. This action reinforces our strong commitment to creating value for our stockholders.

The separation will be completed by way of a pro rata distribution of Ingevity common stock to our stockholders of record as of the close of business, Eastern time, on [•], the record date. Each WestRock stockholder will receive [•] shares of Ingevity common stock for every [•] shares of WestRock common stock held on the record date.

We expect your receipt of shares of Ingevity common stock in the distribution to be tax-free for U.S. federal income tax purposes, except for cash received in lieu of fractional shares. You should consult your own tax advisor as to the particular tax consequences of the distribution to you, including potential tax consequences under state, local and non-U.S. tax laws.

The distribution does not require WestRock stockholder approval, nor do you need to take any action to receive your shares of Ingevity common stock. Immediately following the separation, you will own common stock in WestRock and Ingevity. Ingevity’s common stock will be listed on the New York Stock Exchange under the symbol “NGVT,” while WestRock’s common stock will continue to trade on the New York Stock Exchange under “WRK.”

The enclosed information statement, which is being made available to all WestRock stockholders as of the record date for the distribution, describes the separation and distribution in detail and contains important information about Ingevity, including its business, financial condition and operations. We urge you to carefully read this information statement in its entirety.

Yours sincerely,

Steve Voorhees
Chief Executive Officer
WestRock Company

[•], 2016​

Dear Future Ingevity Stockholder:

It is our pleasure to welcome you as a stockholder of Ingevity Corporation, formerly the specialty chemicals business of WestRock Company. Ingevity is a leading global manufacturer of specialty chemicals and high performance carbon materials. With a history of innovation spanning over 100 years, we provide innovative solutions to meet our customers’ unique and demanding requirements through specifically formulated products. Through our deep technical expertise, flexible manufacturing, distinctive chemistry and global reach we provide our customers with proprietary products that enable them to enhance their products and competitive position in the markets they serve.

Ingevity’s specialty chemicals products serve as essential inputs used in a variety of demanding applications, including asphalt paving, oil exploration and production, agrochemicals, adhesives, lubricants and printing inks. The company is also the leading global manufacturer of activated carbon used in gasoline vapor emission control systems in cars, trucks, motorcycles and boats, with over 750 million units installed globally.

Although newly independent, Ingevity, whose common stock will be listed on the New York Stock Exchange under the symbol “NGVT,” is an established, market-leading business which we have substantially grown over the last five years to approximately $1 billion in revenue.

Ingevity has delivered strong and sustained performance by focusing on specialty applications aligned with global trends in energy, infrastructure and the environment. As an independent company with a strong capital structure, we believe we can accelerate our growth while maintaining strong profitability.

We invite you to learn more about Ingevity by reviewing the enclosed information statement. We look forward to our future as an independent, publicly traded company and to your support as a holder of Ingevity common stock.

Best regards,

D. Michael Wilson
President and Chief Executive Officer
Ingevity Corporation

Information contained herein is subject to completion or amendment. A Registration Statement on Form 10 relating to these securities has been filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended.

Preliminary Information Statement
(Subject to Completion, Dated April 20, 2016)

Information Statement
Distribution of Common Stock of

Ingevity CORPORATION

This information statement is being furnished in connection with the distribution by WestRock Company (“WestRock”) to its stockholders of all of the outstanding shares of common stock of Ingevity Corporation (“Ingevity”), a wholly owned subsidiary of WestRock that will hold directly or indirectly the assets and liabilities associated with WestRock’s specialty chemicals business. To implement the distribution, WestRock will distribute all of the shares of Ingevity common stock on a pro rata basis to WestRock stockholders in a manner that is intended to be tax-free for U.S. federal income tax purposes.

You will receive [•] shares of Ingevity common stock for every [•] shares of WestRock common stock that you hold on [•], 2016 the record date for the distribution. You will receive cash in lieu of any fractional shares of Ingevity common stock that you would have received after application of the above ratio. As discussed under “The Separation and Distribution — Trading Between the Record Date and Distribution Date,” if you sell your WestRock common shares in the “regular-way” market after the record date and before the distribution, you also will be selling your right to receive shares of Ingevity common stock in connection with the separation. Ingevity expects the shares of Ingevity common stock to be distributed by WestRock to you on [•], 2016. We refer to the date of the distribution of the Ingevity common stock as the “distribution date.”

No vote or further action of WestRock stockholders is required in connection with the separation. We are not asking you for a proxy. WestRock stockholders will not be required to pay any consideration for the shares of Ingevity common stock they receive in the distribution, and they will not be required to surrender or exchange shares of their WestRock common stock or take any other action in connection with the distribution.

There is no current trading market for Ingevity common stock, although Ingevity expects that a limited market, commonly known as a “when-issued” trading market, will develop on or shortly before the record date for the distribution, and Ingevity expects “regular-way” trading of Ingevity common stock to begin on the first trading day following the completion of the distribution. Ingevity has applied to have its common stock authorized for listing on the New York Stock Exchange under the symbol “NGVT.”

In reviewing this information statement, you should carefully consider the matters described in the section entitled “Risk Factors” beginning on page [•] of this information statement.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of any of the securities of Ingevity or determined whether this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

This information statement does not constitute an offer to sell or the solicitation of an offer to buy any securities.

The date of this information statement is [•], 2016.

This information statement was first made available to WestRock stockholders on or about [•], 2016.

TABLE OF CONTENTS

​	Page
SUMMARY	​	1
Ingevity	​	1
Our Core Strengths	​	3
Our Plans for Additional Growth	​	6
The Separation	​	7
Risks Associated with Ingevity and the Separation	​	8
Corporate Information	​	10
QUESTIONS AND ANSWERS ABOUT THE SEPARATION	​	11
SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA	​	17
RISK FACTORS	​	19
General Business and Economic Risks	​	19
Risks Related to Ingevity’s Business	​	21
Risks Related to the Separation	​	28
Risks Relating to Ingevity’s Common Stock	​	32
CAUTIONARY STATEMENT FOR THE PURPOSES OF THE “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995	​	35
THE SEPARATION	​	36
Background	​	36
Reasons for the Separation	​	36
Potentially Negative Factors Considered by the Board	​	36
Internal Reorganization	​	37
The Number of Shares You Will Receive	​	37
Treatment of Fractional Shares	​	37
When and How You Will Receive the Dividend	​	37
Results of the Distribution	​	38
Market for Common Stock	​	38
Trading Between the Record Date and Distribution Date	​	38
Conditions to the Distribution	​	39
Reason for Furnishing This Information Statement	​	39
Treatment of Equity Awards	​	40
DIVIDEND POLICY	​	41
CAPITALIZATION	​	42
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS	​	43
Ingevity Corporation Unaudited Pro Forma Combined Statement of Operations Year Ended December 31, 2015	​	44
Notes to Unaudited Pro Forma Combined Statement of Operations	​	45
Ingevity Corporation Unaudited Pro Forma Combined Balance Sheets as of December 31, 2015	​	46
Notes to Unaudited Pro Forma Combined Balance Sheet	​	47
SELECTED HISTORICAL COMBINED FINANCIAL INFORMATION OF INGEVITY	​	48
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF INGEVITY	​	49
Introduction	​	49

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​	Page
Separation and Distribution	​	49
Overview	​	49
Basis of Presentation	​	50
Use of Non-GAAP Financial Measures	​	50
Drivers of Demand and Key Factors Affecting Profitability	​	51
Results of Operations	​	54
Segment Operating Results	​	57
Performance Chemicals	​	57
Performance Materials	​	59
Liquidity and Capital Resources	​	60
Current Assets and Liabilities	​	62
Contractual Obligations	​	62
New Accounting Guidance	​	63
Critical Accounting Policies	​	63
Quantitative and Qualitative Disclosures about Market Risk	​	64
BUSINESS	​	66
Ingevity	​	66
Our Core Strengths	​	67
Our Plans for Additional Growth	​	70
Segments	​	71
Performance Chemicals	​	71
Performance Materials	​	75
Capital Expenditures	​	79
Raw Materials and Energy	​	79
Environment	​	80
Intellectual Property	​	81
Research and Development	​	81
Seasonality	​	81
Employees	​	81
Properties	​	82
Legal Proceedings	​	82
MANAGEMENT	​	83
Executive Officers Following the Distribution	​	83
Board of Directors Following the Distribution	​	84
Director Independence	​	86
Committees of the Board of Directors	​	86
Compensation Committee Interlocks and Insider Participation	​	87
Corporate Governance	​	87
Board’s Role in Oversight of Risk Management	​	88
COMPENSATION DISCUSSION AND ANALYSIS	​	90
Background	​	90
Historical Compensation of Executive Officers Prior to the Separation	​	91
Potential Payments Upon Termination — Death or Disability	​	102

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​	Page
Treatment of WestRock Company Equity-Based Incentive Awards Upon the Separation	​	105
Ingevity Compensation Programs Following the Separation	​	105
STOCK OWNERSHIP	​	108
CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS	​	110
Agreements with WestRock	​	110
The Separation and Distribution Agreement	​	110
The Transition Services Agreement	​	111
Intellectual Property Agreement	​	111
The Tax Matters Agreement	​	111
The Employee Matters Agreement	​	111
Crude Tall Oil and Black Liquor Soap Skimmings Agreement	​	112
Covington Lease Agreement and Plant Services Agreement	​	112
Procedures for Approval of Related Person Transactions	​	113
CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION	​	114
DESCRIPTION OF MATERIAL INDEBTEDNESS	​	118
DESCRIPTION OF CAPITAL STOCK	​	120
General	​	120
Common Stock	​	120
Preferred Stock	​	120
Anti-Takeover Effects of Various Provisions of Delaware Law and Ingevity’s Certificate of Incorporation and Bylaws	​	121
Stock Exchange Listing	​	122
Limitation on Liability of Directors and Indemnification of Directors and Officers	​	122
Exclusive Forum	​	123
Transfer Agent and Registrar	​	123
WHERE YOU CAN FIND MORE INFORMATION	​	124
INDEX TO THE FINANCIAL STATEMENTS	​	F-1

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SUMMARY

This summary highlights selected information from this information statement relating to Ingevity, Ingevity’s separation from WestRock and the distribution of Ingevity common stock by WestRock to its stockholders. For a more complete understanding of our businesses and the separation and distribution, you should read this information statement carefully.

Except as otherwise indicated or unless the context otherwise requires, the information included in this information statement about Ingevity assumes the completion of all of the transactions referred to in this information statement in connection with the separation and distribution. Unless the context otherwise requires, references in this information statement to “Ingevity,” “we, “our,” “us” or the “company” refer to Ingevity Corporation, a Delaware corporation, and its combined subsidiaries. References to Ingevity’s historical business and operations refer to the business and operations of the specialty chemicals business of WestRock Company, or prior to the merger of MeadWestvaco Corporation and Rock-Tenn Company, which was completed on July 1, 2015, MeadWestvaco Corporation, that have been or will be transferred to Ingevity in connection with the separation and distribution.

Ingevity

Ingevity is a leading global manufacturer of specialty chemicals and high performance carbon materials. We provide innovative solutions to meet our customers’ unique and demanding requirements through proprietary formulated products. Our deep technical expertise and experience, flexible manufacturing, distinctive chemistry, global reach and focus on innovation and application development provide our customers with the ability to enhance their own products and competitive position in the markets they serve.

We participate in attractive, higher growth sectors of the global specialty chemicals industry. The broadly defined specialty chemicals industry is expected to experience a 3.6% compound annual growth rate (“CAGR”) from 2014 through 2019, according to IHS, Inc., a leading provider and analyst of industry information for, among other things, the chemicals industry (“IHS”). Ingevity seeks to target markets within that space that historically have outpaced the broader specialty chemicals market growth rate. Participation in these industry sectors require specialist knowledge and customization, resulting in more targeted, higher-margin products relative to more commoditized chemicals and basic materials.

The company’s specialty chemicals products serve as critical inputs used in a variety of high performance applications, including asphalt paving, oil exploration and production, agrochemicals, adhesives, lubricants and printing inks. The company is also the leading global manufacturer of activated carbon used in gasoline vapor emission control systems in cars, trucks, motorcycles and boats, with over 750 million units installed globally over the 30-year history of the business. Our products meet highly specialized, complex customer needs in the industries in which they are used. As customer applications become more demanding, Ingevity’s products become increasingly specialized and represent a critical component of our customers’ products, typically at a modest input cost relative to the customer’s overall product cost. This value creation — significant performance impact versus relatively low input cost — provides some measure of stability as customers may be reluctant to face the performance risk potentially associated with switching over to competitors’ offerings. Additionally, the quality and diversity of our product portfolio, and the flexibility of our manufacturing assets, gives us the capability to direct our resources towards their most profitable and attractive uses and geographies in response to changing markets.

We report in two business segments, Performance Chemicals and Performance Materials. Our Performance Chemicals segment primarily addresses applications in three product families: pavement technologies, oilfield technologies and industrial specialties. Our Performance Materials segment consists of our carbon technologies business which primarily produces automotive carbon products used in gasoline vapor emission control systems.

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The chart below illustrates our revenue by segment, product family, end use and sales by geography in 2015.

*

Based on location of customer

Performance Chemicals

Ingevity’s Performance Chemicals segment develops, manufactures and sells a wide range of specialty chemicals primarily derived from co-products of the kraft pulping process. Products include performance chemicals derived from pine chemicals used in asphalt paving, adhesives, agrochemical dispersants, printing inks, lubricants, petroleum and other diverse industrial uses. The primary raw material used in our Performance Chemicals segment is crude tall oil, or “CTO”, a co-product of the kraft pulping process, where pine is used as the source of the pulp. The CTO is separated by distillation into tall oil rosin (“TOR”), tall oil fatty acid (“TOFA”) and other biofractions. As such products are further refined or chemically modified, higher value derivative products are created, making their way into a wide variety of industrial and consumer goods.

The company’s Performance Chemicals business serves customers globally from two manufacturing locations in the United States and a third in Brazil.

In 2015, our Performance Chemicals segment delivered sales of  $711 million and Segment EBITDA of $111 million. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Ingevity” for a reconciliation of Segment EBITDA to segment profit under U.S. generally accepted accounting principles (“GAAP”).

Performance Materials

We engineer, manufacture and sell wood-based, chemically activated carbon products, produced through a highly technical and proprietary process, primarily for use in gasoline vapor emission control

2

systems in cars, trucks, motorcycles and boats. We have produced and sold activated carbon for over 100 years, including over 30 years for our automotive applications. We are the global leader in this automotive category, with over 750 million units installed globally since we entered this business. We also produce a number of other activated carbon products for the food, water, beverage and chemical purification industries, which maximizes the productivity of our manufacturing assets.

Our automotive carbon products capture gasoline vapor emissions that would otherwise be released into the atmosphere as volatile organic compounds (“VOCs”) which contain hazardous air pollutants and can photochemically react to form ozone and secondary organic aerosols which themselves lead to the formation of haze and particulate pollution. These gasoline vapor emissions (which are distinct from tailpipe emissions) are released primarily (i) during refueling, (ii) when a vehicle is parked during the daytime, as a result of the expansion of the fuel vapors in warmer daytime temperatures and (iii) as “running loss,” as a result of the expansion of vapors in the fuel tank from increased temperatures as a result of operation of the vehicle. The captured gasoline vapors are largely purged from the carbon and directed to the engine where they are used as supplemental power for the vehicle. In this way, the company’s automotive carbon products are part of a system that is both an environmental control and energy recovery application. We estimate that for 2015, the company’s products collectively prevented over 10,000 metric tons of VOC emissions each day and returned the equivalent of 3.7 million gallons of gasoline each day to supplementally power vehicles which would have otherwise been lost to the atmosphere.

We sell our automotive carbon products to over 60 customers around the globe. We are the trusted source of these products for many of the world’s largest automotive parts manufacturers, including Aisan Industry, Delphi Automotive, MAHLE, and many other large and small components manufacturers throughout the global supply chain. Our relationship with many of our customers and their customers — the vehicle manufacturers themselves (including every one of the top 15 global automotive manufacturers) — have been in place for most of our history in this application.

The company’s automotive carbon products are not a part of the automotive emissions systems that are the subject of the recent announcement by Volkswagen AG concerning the failure of certain of its diesel engine vehicles to meet certain clean air standards. The company’s carbon products capture the emission of fuel vapors from gasoline tanks, and have been in service reliably for decades. See “Core Strengths —  Unique Decades-Long Track Record of Automotive Carbon Products Meeting Emission Compliance Standards.” The Volkswagen emission systems at issue involve tailpipe emissions from their diesel vehicles, and are not at all related to capturing gasoline vapor emissions from fuel tanks.

In 2015, our Performance Materials segment provided sales of  $257 million and Segment EBITDA of $92 million. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Ingevity” for a reconciliation of Segment EBITDA to segment profit under U.S. GAAP.

Our Core Strengths

Ingevity is committed to continued value creation for its customers and stockholders by focusing on its core strengths:

Leading Global Market Positions

We are a leader in the global pine chemicals industry, further distinguished by our focus on target markets that offer the potential for profitable growth, supported by long-term secular growth trends in infrastructure preservation and development, growth in unconventional oil exploration and production and increasing global food production demands. Our products serve as critical inputs used in a variety of high performance applications, including asphalt paving, oil exploration and production, agrochemicals, lubricants and printing ink. The quality and diversity of our product portfolio, and the flexibility of our manufacturing assets, gives us the capability to direct our differentiated products towards their most profitable and attractive uses and geographies.

Ingevity is the leading global manufacturer of activated carbon used in gasoline vapor emission control systems in cars, trucks, motorcycles and boats, with over 750 million units installed globally over the 30-year history of our automotive carbon business. This business is expected to benefit from increasingly stringent

3

vehicle emission standards worldwide that the company’s products are uniquely designed and qualified to meet. The annual global sales of light duty vehicles (i.e. passenger and light commercial vehicles) that are powered with gasoline are forecast to grow from approximately 71 million to approximately 91 million vehicles (+28%) from 2014 to 2025. Most of this growth is expected to occur outside of the United States and Canada in countries and regions where gasoline vapor emission standards significantly lag the modern, highly effective standards of the United States and Canada. This provides significant upside potential in addition to the already favorable macroeconomic growth trends of the global automotive industry.

Flexible Manufacturing Capabilities Optimize Asset Utilization

The quality and diversity of our product portfolio, and the flexibility of our manufacturing assets, gives us the capability to direct our resources to their most profitable uses and geographies.

The company’s Performance Chemical assets include multipurpose chemical reactors that are capable of manufacturing products of varying chemistries that can serve multiple markets. For example, in its South Carolina facility, the newest reactor that was brought into service in 2015 is capable of producing products for asphalt, oilfield and adhesives applications, while our Louisiana assets can be redirected with relative ease among various applications including asphalt, oilfield, adhesives and inks.

The company’s carbon facilities, which primarily produce automotive carbon, are also capable of producing a number of other activated carbon products for the food, water, beverage and chemical purification industries, maximizing the productivity of these assets.

Deep Technical Expertise and Product Innovation Capability and Experience

We have deep technical expertise and market knowledge and insights, derived from customer relationships and research and development capabilities, that enable our innovation capacity. Innovation efforts are led and supported by our teams of technical experts and industry veterans, many of whom are considered the foremost experts in their fields, spread throughout our organization in key positions from product development to manufacturing and sales. Each of our business units has its own development and application laboratories that work in partnership with our customers to refine existing products and develop new innovations that will drive value for Ingevity and our customers.

With our technical expertise and product innovation capability and experience, and by working closely with our customers, our technical experts can quickly offer application solutions that address our customers’ most difficult challenges. For example, when our road contractor customers vary the aggregate and/or asphalt to be used in a particular job mix, they call on our expertise to quickly reformulate the Ingevity additive chemistry needed for the revised mix, so that they can meet the original job specifications on time, regardless of the change. Our ability to swiftly understand and address our customers’ performance needs allows Ingevity to maintain and grow its relationships with its customer base.

Unique Decades-Long Track Record of Automotive Carbon Products Meeting Emission Compliance Standards

Current U.S. federal and California regulatory standards require that gasoline vapor control devices remain effective for the entire life of the vehicles on which installed. Ingevity has a substantial, decades-long track record of providing life-of-vehicle product performance in a properly designed gasoline vapor control system. Our unique capability to engineer a very specific nanoscale porosity into the carbons on a large commercial scale allows the system designers to minimize the system’s size based on our carbons’ ability to remain highly effective over the vehicle’s lifetime. Given the imperative for automotive manufacturers to produce vehicles capable of meeting these long-term requirements, or potentially face expensive recalls and unfavorable publicity, there is an increased risk to use other producers who do not have a comparable, proven history and technical capability, particularly given the significant costs associated with non-compliance should a competitor’s offering fail to maintain effectiveness over vehicle lifetimes.

Global Manufacturing and Supply Chain Reach

We have a global reach which allows us to effectively service multinational customers through a combination of our manufacturing facilities located in the United States, China and Brazil, and local talent

4

strategically placed around the globe. In addition, our technology centers located in the United States, China, Europe and India give us the ability to service our customers throughout these regions, and provide us with market insights that allow us to develop customized solutions for local and regional markets. We serve customers in approximately 65 countries, with our global engineering, technical, sales and application knowledge teams. Our global reach enables us to more effectively serve — and be the business partner of choice to — multinational companies that look to partners who can meet their needs on a consistent basis wherever they do business.

This capability also allows us to take advantage of market trends. For example, our oilfield technology business has in the past been primarily focused on the North American market. Our global reach will allow us to pursue growth opportunities outside of the United States, particularly in the Middle East, which has not undergone as significant an output decline during the recent global slowdown in the oil and gas exploration industry.

Collaborative Customer and End User Relationships Drive Profitable Growth Opportunities

We take a partnership approach with our customers, investing resources to deeply understand their customers’ markets so that we can provide technologically advanced, tailored solutions that allow our customers to maintain a competitive advantage in the markets they serve. Our knowledge of our customers’ end markets provides us with insights that enable us to develop solutions that address opportunities or challenges and create value for our customers. For example, through our relationships with several automobile manufacturers (“OEMs”) (often, our customers’ customer), we learned that certain vehicles were having trouble passing emissions certification tests based on a small amount of VOCs migrating from the engine via the vehicles’ air intake systems. To address this issue, we developed several generations of activated carbon-based solutions (activated carbon honeycombs and engineered carbon sheets) that manage these emissions while minimizing pressure drop in the air intake system — a key performance advantage to the OEMs. This drove demand for our product by addressing the needs of our customers’ customer. We believe this approach — driving demand for our products by developing solutions for our customers’ end markets — has been and will continue to be a significant driver of profitable growth.

Education of Government and Regulatory Bodies on Scientifically Based Policies and Specifications

Many of our customers’ markets are subject to increasing regulatory standards and mandates, for example more stringent air quality standards in the case of automotive emissions or the use of recycled materials in the case of pavement technologies. With our technical expertise and experience, our teams are a valued resource and work directly with government and regulatory bodies, in support of our customers, as experts in their field to educate regulators about existing and innovative technologies that support their objectives or solve specific challenges. As the trend continues in mature and emerging markets towards more advanced solutions, we believe the ability to leverage our expertise to educate, advocate and promote sensible regulatory solutions will benefit our customers while driving incremental value within those markets. For example, Ingevity has globally recognized expertise in the highly specialized field of automotive gasoline vapor emissions. While tailpipe emissions on vehicles are well recognized, understood and regulated, gasoline vapor emissions from vehicles have been lightly regulated in many countries outside the United States and Canada. Our experts have educated authorities in other countries to help them understand and quantify the magnitude of these emissions and evaluate the highly effective solutions currently in use in the United States and Canada that can reduce these gasoline vapor emissions to “near zero” levels at a relatively low cost per vehicle.

Our work with regulators allows us then to work with our customers in order to help them respond and adapt to evolving and varying regulatory standards. For example, because of the stringent and differing regulatory compliance standards applicable to the global oilfield industry, our oilfield customers often turn to us over smaller, less sophisticated vendors in order to help them manage the complexities of compliance risk throughout the world.

Highly Engaged, Performance and Safety-driven Culture

We have assembled a highly talented, collaborative, committed and creative team which drives the success of our business. We believe in empowerment and accountability and encourage our employees to

5

think boldly. Our collective ambition is keenly focused on creating value for today and tomorrow. Further, we are committed to protecting human health and the environment while using resources in a responsible and sustainable manner: as a long-standing member of the American Chemistry Council (ACC), we subscribe to the Guiding Principles of the American Chemistry Council’s Responsible Care® program — a global chemical industry performance initiative that is implemented in the United States through the ACC. Our ISO 9001, ISO/TS 16949 and Responsible Care® Certifications are internationally recognized measures of consistent superior performance and responsibility to health, safety, security and the environment. We believe this track record is something that differentiates us from our competitors in the eyes of many of our customers.

Long-term Secured Raw Material Supply

At the time of the separation, we intend to enter into a long-term supply agreement with WestRock pursuant to which we will purchase all of the CTO output from WestRock’s existing kraft mills, subject to certain exceptions. Beginning in 2025, either party may provide a notice to the other party terminating the agreement five years from the date of such notice. Beginning one year after such notice, the quantity of products provided by WestRock under the agreement will be gradually reduced over a four-year period based on the schedule set forth in the agreement. See “Certain Relationships and Related Person Transactions — Crude Tall Oil and Black Liquor Soap Skimmings Agreement.” This agreement will include pricing terms based upon market prices. Under this agreement, based on WestRock’s current output, we expect to initially source approximately 45% to 55% of our CTO requirements for the maximum operating rates of our North American facilities. The relationship with WestRock will be strategically important to our Performance Chemicals business due to the limited supply of CTO globally, of which we believe a significant portion is already under long-term supply agreements with other consumers of CTO. We believe this increment of supply, in conjunction with other contracted sources of CTO, will allow us to serve customer demand. See also “Risk Factors — Our Performance Chemicals segment is highly dependent on CTO which is limited in supply; lack of access to sufficient CTO would impact our ability to produce CTO-based products.”

Our Plans for Additional Growth

We have a demonstrated history of profitable growth. As an independent company, we believe we can accelerate our growth while maintaining our profitability. We intend to take the following steps as a newly independent public company:

Expand Sales to Existing Customers and into New Geographies

We believe we are well positioned to organically expand our sales through a combination of continued global sales growth, leveraging our significant application knowledge to apply our existing products to new applications and capitalizing on the investments we have made in our global sales, technical centers and distribution network. Our global reach allows us to effectively compete in new geographies, delivering proven innovative solutions where opportunities to apply our technologies exist. We continue to leverage our significant application knowledge and intimate customer relationships to target opportunities where we know our products perform, creating demand for our products by driving value for our customers.

We intend to continue to strengthen our position in emerging markets such as China, India and Brazil where we believe there are significant opportunities for growth. Opportunities include the expansion of sales of our asphalt products into areas increasingly in need of newly paved roads and increased sales of carbon technology solutions driven by anticipated regulatory expansion in the global automotive vapor emissions control market. As a result, we completed the construction of a new facility in China for the global automotive emissions control market during the fourth quarter of 2015 and have continued to invest in our Brazilian performance chemicals refinery. The total project spending on the global automotive facility in China was roughly $100 million.

Increase our Offering of Specialized, Higher Margin Products

We employ a world-class team of engineering, technical, sales and application specialists, along with experienced industry professionals, which provide us with deep technical knowledge and the ability to be a

6

leading provider of specialty products in the markets we serve. We have the experience and capability to further develop and expand upon the products we currently produce, further differentiating them into higher value, increasingly specialized products, or developing new applications and end uses.

We have a history of success in such product development and differentiation. For example, our oilfield technologies business transitioned from providing basic TOFA to our customers to the development and marketing of specialized tall oil emulsifiers and corrosion inhibitors. We also grew our pavement technologies from asphalt chemicals into specialized additives used in ultra-thin paving technologies.

We believe that there is significant upside in further developing and expanding upon products produced from TOFA, displacing some of our lower margin business where we sell TOFA directly to certain customers. This will have the added benefit of improved insulation from the cyclical nature of the direct natural fats and oils market of which TOFA is a part. Over the next few years, our goal is to meaningfully increase the portion of our sales of specialized, higher value products derived from TOFA, including addressing new markets or opportunities to upgrade TOFA into product categories where we might not participate today.

Additionally, we search to supply the right chemistry for the applications within our market segments regardless of the raw materials required. Applying our unique insights into our end use applications, our team will search to find novel solutions outside of our current CTO-based materials to problems and work to create the supply chain needed to provide those products to our customers. As an example, we have developed, manufacture and sell product solutions in our asphalt business that are hydrocarbon based.

Innovate to Enable Our Customers to Adapt to Increasingly Stringent Regulatory Standards

We are a valued resource with government and regulatory agencies around the world, from California to China, including national, regional and local environmental regulatory bodies. We work directly with such bodies, in support of our customers, to help them develop sensible standards based on the availability of technological solutions that make such standards commercially achievable. As standards are adopted and become increasingly demanding, the products that can be used to achieve compliance with such standards become increasingly technologically complex to design and manufacture on a commercial level. The company’s ability to meet these complexities provides the company with a distinctive commercial edge — as our customers in many applications depend on us to help them meet their compliance standards. For example, when paving contractors were having difficulty meeting the Florida Department of Transportation’s initiative to use more recycled tire rubber, the pavement technologies group developed an innovative delivery system, and educated contractors on how to use it to achieve the desired environmental and performance benefits. We also work closely with automotive companies and their suppliers to ensure that they understand and can meet increasingly stringent vehicle emission standards.

Invest Organically and Selectively Pursue Acquisitions that Further Strengthen Our Product Portfolio

We plan to continue to invest capital organically in attractive cost reduction projects and in capacity expansions as necessary to meet demand growth.

In addition, we intend to pursue value-creating acquisitions that represent attractive opportunities in our target markets as well as in high-value niche applications which complement our current product portfolio and capabilities. Following the separation, we will continue seeking to add product lines and portfolios, as well as marketing and manufacturing alliances, that will play an important role in strengthening our leadership positions. We intend to pursue acquisitions both domestically and globally.

The Separation

Prior to the separation, we will operate as a reporting segment of WestRock, which was formed upon the combination (the “Merger”) of MeadWestvaco Corporation (“MWV”) and Rock-Tenn Company (“Rock-Tenn”). The Merger was completed on July 1, 2015.

Prior to the Merger, we operated as a reporting segment of MWV, which announced on January 8, 2015, that it intended to separate its specialty chemicals business through a pro rata distribution of common stock to its stockholders. Upon the completion of the Merger, WestRock announced its continued plans to complete the separation.

7

On [•], 2016, the WestRock board of directors approved the distribution of the issued and outstanding shares of Ingevity common stock on the basis of  [•] shares of Ingevity common stock for every [•] shares of WestRock held as of the close of business on the record date of  [•], 2016.

Reasons for the Separation

The WestRock board of directors believes that the separation of WestRock’s specialty chemicals business would be in the best interests of WestRock and its stockholders for a number of reasons, including the following:

•

Enhanced strategic and management focus.   The separation will allow Ingevity and WestRock to each more effectively pursue their distinct operating priorities and strategies and enable management of both companies to better focus on unique opportunities for long-term growth and profitability.

•

More efficient allocation of capital.   The separation will permit Ingevity and WestRock to each concentrate financial resources on its own operations, providing greater flexibility to invest capital in its businesses in a time and manner appropriate for its strategy and business needs and facilitate a more efficient allocation of capital.

•

Direct access to capital markets.   The separation will create an independent equity structure that will afford Ingevity direct access to the capital markets and will facilitate Ingevity’s ability to effect future acquisitions utilizing Ingevity’s common stock. As a result, each company will have more flexibility to capitalize on its unique growth opportunities and objectives.

•

Alignment of incentives with performance objectives.   The separation will facilitate incentive compensation arrangements for employees more directly tied to the performance of each of Ingevity’s and WestRock’s respective businesses, and enhance employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives.

Neither Ingevity nor WestRock can assure you that, following the separation, any of the benefits described above or otherwise will be realized to the extent anticipated or at all.

Risks Associated with Ingevity and the Separation

An investment in Ingevity common stock is subject to a number of risks, including risks related to Ingevity’s business, the separation and Ingevity common stock. Set forth below is a summary of some, but not all, of these risks. Please read the information in the section captioned “Risk Factors” for a more thorough description of these and other risks.

General Business and Economic Risks

•

We may be adversely affected by general global economic and financial conditions beyond our control.

•

We are exposed to risks inherent in our international sales and operations.

•

Our reported results could be adversely affected by currency exchange rates and currency devaluation could impair our competitiveness.

•

Our operations outside the United States require us to comply with a number of U.S. and foreign regulations, violations of which could have a material adverse effect on our financial condition and results of operations.

Risks Related to Ingevity’s Business

•

We are dependent on attracting and retaining key personnel.

•

Adverse conditions in the automotive market may adversely affect demand for our automotive carbon products.

8

•

If increasingly more stringent air quality standards worldwide are not adopted, our growth could be impacted.

•

The company’s printing inks business serves customers in a market that is facing declining volumes.

•

The company’s pavement technologies business is heavily dependent on government infrastructure spending.

•

The company’s oilfield technologies business is significantly affected by trends in oil and natural gas prices that affect the level of exploration, development and production activity.

•

If we are unable to adequately protect our intellectual property, we may lose significant competitive advantages.

•

Our Performance Chemicals segment is highly dependent on CTO which is limited in supply; lack of access to sufficient CTO would impact our ability to produce CTO-based products.

•

A prolonged period of low energy prices may materially impact our results of operations.

•

We face competition from producers of substitute products.

•

We are dependent upon third parties for the provision of certain critical operating services at several of our facilities.

Risks Related to the Separation

•

The combined post-separation value of WestRock and Ingevity shares may not equal or exceed the pre-separation value of WestRock common shares.

•

Ingevity has no history of operating as an independent company, and Ingevity’s historical and pro forma financial information is not necessarily representative of the results that it would have achieved as a separate, publicly traded company and may not be a reliable indicator of its future results.

•

There could be significant liability if the distribution is determined to be a taxable transaction.

•

Ingevity may not be able to engage in certain corporate actions after the separation.

•

Until the separation occurs, the terms of the separation and distribution agreement and other transaction agreements may be changed in ways which may be unfavorable to Ingevity.

•

Ingevity may not achieve some or all of the expected benefits of the separation, and the separation may adversely affect Ingevity’s business.

•

Ingevity will be dependent upon WestRock for the performance of obligations under various critical agreements that will be executed as part of the separation.

•

Challenges in the commercial and credit environments may materially adversely affect Ingevity’s ability to complete the separation and Ingevity’s future access to capital.

•

Our accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which we will be subject following the distribution.

Risks Related to Ingevity’s Common Stock

•

Ingevity cannot be certain that an active trading market for its common stock will develop or be sustained after the separation, and following the separation, Ingevity’s stock price may fluctuate significantly.

•

We cannot guarantee the timing, amount or payment of any dividend on our common stock in the future.

•

Your percentage of ownership in Ingevity may be diluted in the future.

9

•

Certain provisions in Ingevity’s amended and restated certificate of incorporation and amended and restated bylaws, and of Delaware law, may prevent or delay an acquisition of Ingevity, which could decrease the trading price of Ingevity’s common stock.

Corporate Information

Ingevity’s business originated as part of the operations of its initial parent company, Westvaco Corporation, a paper and packaging company, using co-products of the kraft pulping process, primarily CTO and lignin, as well as hardwood sawdust. Ingevity has operated as a division of Westvaco Corporation and its corporate successors, including MeadWestvaco Corporation and WestRock Company, since 1964.

Ingevity Corporation was incorporated in Delaware on March 27, 2015. The address of Ingevity’s principal executive offices is 5255 Virginia Avenue, North Charleston, South Carolina 29406. Ingevity’s telephone number after the distribution will be (843) 740-2300. Ingevity maintains an Internet site at www.ingevity.com. Ingevity’s website and the information contained in or connected to the website will not be deemed to be incorporated in this document, and you should not rely on any such information in making an investment decision.

This information statement is being furnished solely to provide information to stockholders of WestRock who will receive shares of Ingevity common stock in the distribution. It is not, and is not to be construed as, an inducement or encouragement to buy or sell any of Ingevity’s securities. The information contained in this information statement is believed by Ingevity to be accurate as of the date set forth on the cover of this information statement. Changes may occur after that date, and neither WestRock nor Ingevity will update the information except in the normal course of their respective disclosure obligations and practices, or as required by applicable law.

10

QUESTIONS AND ANSWERS ABOUT THE SEPARATION

What is the separation?

WestRock will complete the separation by distributing to its stockholders all of the shares of Ingevity common stock. Following the distribution, Ingevity will be a separate company from WestRock and WestRock will not retain any ownership interest in Ingevity.

What is Ingevity?

Ingevity is a wholly-owned direct subsidiary of WestRock whose shares will be distributed to WestRock stockholders if we complete the separation. After the distribution, Ingevity will be a separate, independent public company and will continue as a leading global manufacturer of specialty chemicals and high-performance carbon materials.

What will I receive in the distribution?

As a holder of WestRock common stock, you will retain your shares of WestRock common stock and will receive [•] shares of Ingevity common stock for every [•] shares of WestRock common stock you own as of the record date. The number of shares of WestRock common stock you own and your proportionate interest in WestRock will not change as a result of the separation. For a more detailed description, see “The Separation.”

Will Ingevity issue fractional shares of its common stock in the distribution?

No. Ingevity will not issue fractional shares of its common stock in the distribution. Fractional shares that WestRock stockholders would otherwise have been entitled to receive will be aggregated and sold in the public market by the distribution agent. The aggregate net cash proceeds of these sales will be distributed pro rata (based on the fractional share such holder would otherwise be entitled to receive) to those stockholders who would otherwise have been entitled to receive fractional shares. Recipients of cash in lieu of fractional shares will not be entitled to any interest on the amounts of payment made in lieu of fractional shares.

How will the separation affect equity awards held by WestRock employees?

Each WestRock equity-based incentive award held by Ingevity employees will remain a WestRock equity incentive award following the separation, with adjustments made to the number of shares covered and (if applicable) the per share exercise price of the award to maintain its intrinsic value. Unvested WestRock equity-based incentive awards held by our employees will vest to the extent provided in the employee matters agreement between WestRock and Ingevity. We are responsible for reimbursing WestRock for the cost of WestRock equity-based incentive awards held by our employees.

When is the record date for the distribution?

The record date for the distribution is [•], 2016.

When will the distribution occur?

We expect the distribution of our common stock to occur on [•], 2016, to holders of record of WestRock common stock at the close of business on the record date.

What are the reasons for and the benefits of separating Ingevity from WestRock?

WestRock believes that a separation will provide various benefits to both WestRock and Ingevity, including by (1) allowing Ingevity and WestRock to each more effectively pursue their distinct operating priorities and strategies and enable management of both companies to better focus on unique opportunities for

11

long-term growth and profitability; (2) permitting Ingevity and WestRock to each concentrate financial resources on its own operations, providing greater flexibility to invest capital in its businesses in a time and manner appropriate for its strategy and business needs and facilitate a more efficient allocation of capital; (3) creating an independent equity structure that will afford Ingevity direct access to the capital markets and will facilitate Ingevity’s ability to effect future acquisitions utilizing Ingevity’s common stock; and (4) facilitating incentive compensation arrangements for employees more directly tied to the performance of each of Ingevity’s and WestRock’s respective businesses, and enhance employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives.

For a more detailed discussion of the reasons for the separation, see “The Separation — Reasons for the Separation” beginning on page [•].

What are the risks associated with the separation?

There are a number of risks associated with the separation and ownership of Ingevity common stock. The risks are discussed under “Risk Factors” beginning on page [•].

What do stockholders need to do to participate in the distribution?

WestRock stockholders of record on the record date will not be required to take any action to receive Ingevity common stock in the distribution, but you are nevertheless urged to read this entire information statement carefully. No stockholder approval of the distribution is required. You are not being asked for a proxy. You do not need to pay any consideration, exchange or surrender your existing shares of WestRock common stock or take any other action to receive your Ingevity common stock. Please do not send in your WestRock common stock certificates. The distribution will not affect the number of outstanding shares of WestRock common stock or any rights of WestRock stockholders, although it will affect the market value of each outstanding share of WestRock common stock.

How will shares of Ingevity common stock be issued?

You will receive shares of Ingevity common stock through the same channels that you currently use to hold or trade shares of WestRock common stock, whether through a brokerage account, 401(k) plan or other channel. Receipt of Ingevity common stock will be documented for you in the same manner that you typically receive stockholder updates, such as monthly broker statements and 401(k) statements.

If you own shares of WestRock common stock as of the close of business on [•], 2016, the record date for the distribution, including any shares owned in certificate form, WestRock, with the assistance of Wells Fargo Shareowner Services (“WFSS”), the distribution agent, will electronically distribute shares of Ingevity common stock to you or your brokerage firm on your behalf in book-entry form. WFSS will mail you a book-entry account statement that reflects your shares of Ingevity common stock, or your bank or brokerage firm will credit your account for the shares.

12

What are the conditions to the distribution?

The distribution is subject to the satisfaction (or waiver by WestRock in its sole discretion) of the following conditions:

•

the transfer of assets and liabilities from WestRock to Ingevity shall have been completed in accordance with the separation and distribution agreement;

•

(i) the private letter ruling that WestRock received from the Internal Revenue Service (“IRS”) regarding certain U.S. federal income tax matters relating to the separation, distribution and certain related transactions, shall not have been modified or revoked; and (ii) WestRock shall have received opinions from its outside tax advisors to the effect that the distribution, together with certain related transactions, will be generally tax-free for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Internal Revenue Code (the “Code”);

•

the SEC shall have declared effective Ingevity’s registration statement on Form 10, of which this information statement forms a part, and this information statement in its final form shall have been made available to the WestRock stockholders;

•

all actions and filings necessary or appropriate under applicable U.S. federal, U.S. state or other securities laws shall have been taken and, where applicable, have become effective or been accepted by the applicable governmental authority;

•

the transaction agreements relating to the separation shall have been duly executed and delivered by the parties;

•

no order, injunction or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the separation, distribution or any of the related transactions shall be in effect; and

•

the shares of Ingevity common stock to be distributed shall have been accepted for listing on the New York Stock Exchange (“NYSE”) subject to official notice of distribution.

WestRock and Ingevity cannot assure you that any or all of these conditions will be met. In addition, WestRock can decline at any time to go forward with the separation. For a further discussion of the conditions to the distribution, see “The Separation — Conditions to the Distribution.”

Can WestRock decide to cancel the distribution of Ingevity common stock even if all the conditions have been met?

Yes. Until the distribution has occurred, WestRock has the right to terminate the distribution, even if all of the conditions are satisfied.

What if I want to sell my WestRock common stock or my Ingevity common stock?

You should consult with your financial advisors, such as your stockbroker, bank and/or tax advisor. The distribution will not result in any additional restrictions on either WestRock stock or, following the distribution and upon the commencement of trading, Ingevity stock.

13

What is “regular-way” and “ex-distribution” trading of WestRock stock?

Beginning on or shortly before the record date and continuing up to and through the distribution date, it is expected that there will be two markets in WestRock common stock: a “regular-way” market and an “ex-distribution” market. Shares of WestRock common stock that trade in the “regular-way” market will trade with an entitlement to shares of Ingevity common stock distributed pursuant to the distribution. Shares that trade in the “ex-distribution” market will trade without an entitlement to shares of Ingevity common stock distributed pursuant to the distribution.

If you decide to sell any WestRock common stock before the distribution date, you should make sure your stockbroker, bank or other nominee understands whether you want to sell your WestRock common stock with or without your entitlement to Ingevity common stock pursuant to the distribution.

Where will I be able to trade shares of Ingevity common stock?

Ingevity has applied to list its common stock on the NYSE under the symbol “NGVT.” Ingevity anticipates that trading in shares of its common stock will begin on a “when-issued” basis on or shortly before the record date and will continue up to and through the distribution date and that “regular-way” trading in Ingevity common stock will begin on the first trading day following the completion of the distribution. If trading begins on a “when-issued” basis, you may purchase or sell Ingevity common stock up to and through the distribution date, but your transaction will not settle until after the distribution date. Ingevity cannot predict the trading prices for its common stock before, on or after the distribution date.

What will happen to the listing of WestRock common shares?

Shares of WestRock common stock will continue to trade on the NYSE after the distribution, and the separation will have no effect on such listing.

Will the number of shares of WestRock common stock that I own change as a result of the distribution?

No. The number of shares of WestRock common stock that you own will not change as a result of the distribution.
   

Will the distribution affect the market price of my WestRock common stock?

Yes. As a result of the distribution, WestRock expects the trading price of WestRock common stock immediately following the distribution to be lower than the “regular-way” trading price of such shares immediately prior to the distribution because the trading price will no longer reflect the value of the specialty chemicals business. WestRock believes that over time following the separation, assuming the same market conditions and the realization of the expected benefits of the separation, WestRock common stock and Ingevity common stock should have a higher aggregate market value as compared to what the market value of WestRock common stock would be if the separation did not occur. There can be no assurance, however, that such a higher aggregate market value will be achieved. This means, for example, that the combined trading prices of one share of WestRock

14

common stock and [•] shares of Ingevity common stock after the distribution may be equal to, greater than or less than the trading price of one share of WestRock common stock before the distribution.

What are the material U.S. federal income tax consequences of the separation?

Conditions to the completion of the separation include that (i) the private letter ruling that WestRock received from the IRS regarding certain U.S. federal income tax matters relating to the separation, distribution and related transactions, shall not have been modified or revoked, and (ii) WestRock shall have received opinions from its tax advisors regarding treatment of the distribution, together with certain related transactions, under Sections 355 and 368(a)(1)(D) of the Code. Assuming that the distribution, together with certain related transactions, qualifies as a transaction that is generally tax-free under Sections 355 and 368(a)(1)(D) of the Code, then for U.S. federal income tax purposes, (i) you will not recognize any gain or loss, and no amount will be included in your income, upon your receipt of shares of Ingevity common stock pursuant to the distribution, and (ii) immediately after the distribution, the aggregate tax basis of your WestRock common stock and the Ingevity common stock that you will receive in the distribution (including fractional shares for which cash is received) will equal the aggregate basis of your WestRock common stock immediately before the distribution, allocated between the WestRock common stock and the Ingevity common stock (including fractional shares for which cash is received) in proportion to the relative fair market value of each on the distribution date. You will recognize gain or loss (if any) for U.S. federal income tax purposes with respect to cash received in lieu of fractional shares.

You should consult your own tax advisor as to the particular consequences of the distribution to you, including the applicability and effect of any U.S. federal, state and local tax laws, as well as foreign tax laws, which may result in the distribution being taxable to you. For more information regarding the tax opinion and certain U.S. federal income tax consequences of the separation, see the section entitled “Certain Material U.S. Federal Income Tax Consequences of the Distribution.”

What will Ingevity’s relationship be with WestRock following the separation?

Ingevity will enter into a separation and distribution agreement with WestRock to effect the separation and provide a framework for Ingevity’s relationship with WestRock after the separation and will enter into certain other agreements, such as a transition services agreement, intellectual property agreement, a tax matters agreement and an employee matters agreement. These agreements will provide for the separation between Ingevity and WestRock of the assets, employees, liabilities and obligations (including investments, property and employee benefits and tax-related assets and liabilities) of WestRock and its subsidiaries attributable to periods prior to, at and after Ingevity’s separation from WestRock and will govern the relationship between Ingevity and WestRock subsequent to the completion of the separation. We also intend to enter into (1) a long-term supply agreement with WestRock for the purchase and sale of CTO, (2) a long-term lease agreement pursuant to which Ingevity will lease the ground

15

underlying the Covington carbon facility from WestRock on an arm’s-length basis and (3) a separate agreement coordinating facility services at the Covington carbon facility. For additional information regarding these agreements, see the sections entitled “Risk Factors — Risks Related to the Separation” and “Certain Relationships and Related Person Transactions.”

Who will manage Ingevity after the separation?

Ingevity’s management team will include a new Chief Executive Officer and Chief Financial Officer, as well as experienced former members of WestRock’s specialty chemicals division management team who have a detailed understanding of Ingevity’s industry, assets and customers. For more information regarding Ingevity’s management, see “Management.”

Are there risks associated with owning Ingevity common stock?

Yes. Ownership of Ingevity common stock is subject to both general and specific risks related to Ingevity’s business, the industry in which it operates, its ongoing contractual relationships with WestRock and its status as a separate, publicly traded company. Ownership of Ingevity common stock is also subject to risks related to the separation. These risks are described in the “Risk Factors” section of this information statement beginning on page [•].

Who will be the distribution agent, transfer agent and registrar for the Ingevity common stock?

The distribution agent, transfer agent and registrar for Ingevity common stock will be Wells Fargo Shareowner Services. For questions relating to the transfer or mechanics of the distribution, you should contact:

Wells Fargo Shareowner Services
1110 Centre Pointe Curve, Suite 101
Mendota Heights, MN 55120
800-468-9716
651-450-4064 (Outside the United States)
www.shareowneronline.com

Where can I find more information about WestRock and Ingevity?

Before the distribution, WestRock stockholders who have questions relating to WestRock should contact:

WestRock
Investor Relations
504 Thrasher Street
Norcross, Georgia 30071
Tel: (678) 291-7901
www.WestRock.com/investor

After the distribution, Ingevity stockholders who have questions relating to Ingevity should contact:

Ingevity
Investor Relations
5255 Virginia Avenue
North Charleston, South Carolina 29406
Tel: [•]
http://www.ingevity.com/investor

16

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA

The following summary sets forth certain historical financial information of the specialty chemicals business of WestRock. The summary financial information as of December 31, 2015 and 2014 and for the years ended December 31, 2015, 2014 and 2013 is derived from the audited combined financial statements that begin on page F-1 in this information statement.

The combined financial statements as of December 31, 2015, 2014 and 2013 and for the years ended 2015, 2014 and 2013 were audited by an independent registered public accounting firm. The historical financial information below should be read in conjunction with the combined financial statements and related notes that are included in this information statement on pages noted above. The historical results do not necessarily indicate the results expected for any future period.

The unaudited pro forma combined statements of operations for the fiscal year ended December 31, 2015 give effect to the distribution as if it had occurred on January 1, the first day of fiscal year 2015. The unaudited pro forma combined balance sheet as of December 31, 2015 gives effect to the distribution as if it had occurred on December 31, 2015. The assumptions used and pro forma adjustments derived from such assumptions are based on currently available information and Ingevity believes such assumptions are reasonable under the circumstances.

The unaudited pro forma condensed combined financial statements are not necessarily indicative of Ingevity’s results of operations or financial condition had the distribution and its anticipated post-separation capital structure been completed on the dates assumed. Also, they may not reflect the results of operations or financial condition that would have resulted had Ingevity been operating as an independent, publicly traded company during such periods. In addition, they are not necessarily indicative of its future results of operations or financial condition.

You should read this summary financial data together with “Unaudited Pro Forma Combined Financial Statements,” “Capitalization,” “Selected Historical Combined Financial Information of Ingevity,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the historical combined financial statements and accompanying notes included in this information statement.

​

Years ended December 31,

In millions

Pro Forma 2015

2015

2014

2013

Statement of Operations Data:

​

​

​

​

Net sales

​

$

968

​

$

968

​

$

1,041

​

$

980

Cost of sales

​

​

690

​

​

687

​

​

718

​

​

685

Gross profit

​

​

278

​

​

281

​

​

323

​

​

295

Selling, general, and administrative expenses

​

​

121

​

​

114

​

​

112

​

​

103

Research and development

​

​

7

​

​

7

​

​

8

​

​

11

Income before income taxes

​

​

148

​

​

138

​

​

203

​

​

184

Net income

​

​

95

​

​

85

​

​

133

​

​

118

Net income attributable to the company

​

​

90

​

​

80

​

​

129

​

​

119

Earnings per share:

​

​

​

​

Basic(a)

​

​

—

​

​

​

​

​

​

​

​

​

Diluted(a)

​

​

—

​

​

​

​

​

​

​

​

​

Balance Sheet Data (at period end):

​

​

​

​

Cash and cash equivalents

​

$

50

​

$

32

​

$

20

​

$

12

Property, plant and equipment, net

​

​

438

​

​

438

​

​

410

​

​

326

Total assets

​

​

885

​

​

782

​

​

718

​

​

593

Long-term debt due after one year

​

​

576

​

​

80

​

​

86

​

​

86

Total equity

​

​

114

​

​

522

​

​

420

​

​

328

17

​	Years ended December 31,
In millions	Pro Forma 2015	2015		2014		2013
Cash Flow Data:	​	​		​		​
Cash provided by operating activities	​	​	73	​	143	​	137
Cash used in investing activities	​	​	(90)	​	(102)	​	(64)
Other Data:	​	​		​		​
Capital expenditures	​	​	102	​	101	​	63
Depreciation and amortization expense	​	​	35	​	33	​	33
Combined Adjusted EBITDA(b)	​	​	203	​	247	​	227

(a)

We have not yet finalized the distribution ratio of shares of Ingevity common stock for shares of WestRock common stock. We intend to update our pro forma basic and diluted earnings per share in an amendment to this information statement.

(b)

Non-GAAP Financial Measures:

Ingevity has presented certain financial measures, defined below, which have not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and has provided a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP. These financial measures are not meant to be considered in isolation or as a substitute for the most directly comparable financial measure calculated in accordance with GAAP. The company believes these non-GAAP measures provide investors, potential investors, securities analysts and others with useful information to evaluate the performance of the business, because such measures, when viewed together with our financial results computed in accordance with GAAP, provide a more complete understanding of the factors and trends affecting our historical financial performance and projected future results.

Ingevity uses the following non-GAAP measure: Combined Adjusted EBITDA. Combined Adjusted EBITDA is defined as net income plus provision for income taxes, interest expense, depreciation and amortization, separation costs and restructuring and other (income) charges. This non-GAAP measure is not intended to replace the presentation of financial results in accordance with GAAP and investors should consider the limitations associated with this non-GAAP measure, including the potential lack of comparability of this measure from one company to another.

Below is a reconciliation of Combined Adjusted EBITDA to net income:

​	Year Ended December 31,
In millions	2015			2014			2013
Net income	​	$	85	​	$	133	​	$	118
Income tax provision	​	​	53	​	​	70	​	​	66
Interest expense	​	​	21	​	​	16	​	​	13
Depreciation and amortization	​	​	35	​	​	33	​	​	33
Separation costs	​	$	17	​	$	—	​	$	—
Restructuring and other (income) charges, net	​	​	(8)	​	​	(5)	​	​	(3)
Combined Adjusted EBITDA	​	$	203	​	$	247	​	$	227

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RISK FACTORS

You should carefully consider each of the following risk factors and all of the other information set forth in this information statement. The risk factors generally have been separated into four groups: (1) general business and economic risks, (2) risks relating to our business, (3) risks relating to the separation and (4) risks relating to our common stock. Based on the information currently known to us, we believe that the following information identifies the most significant risk factors affecting our company in each of these categories of risks. However, the risks and uncertainties our company faces are not limited to those set forth in the risk factors described below. Additional risks and uncertainties not presently known to us or that we currently believe to be immaterial may also adversely affect our business. In addition, past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods.

If any of the following risks and uncertainties develops into actual events, these events could have a material adverse effect on our business, financial condition or results of operations. In such case, the trading price of our common stock could decline.

General Business and Economic Risks

We may be adversely affected by general global economic and financial conditions beyond our control.

Our businesses may be affected by a number of factors that are beyond our control such as general economic and business conditions, changes in tax laws or tax rates and conditions in the financial services markets including counterparty risk, insurance carrier risk, rising interest rates, inflation, deflation, fluctuations in the value of local currency versus the U.S. dollar or the impact of a stronger U.S. dollar may negatively impact our ability to compete. Macro-economic challenges, including conditions in financial and capital markets and levels of unemployment, and the ability of the United States and other countries to deal with their rising debt levels may continue to put pressure on the economy or lead to changes in tax laws or tax rates. There can be no assurance that changes in tax laws or tax rates will not have a material impact on our future cash taxes, effective tax rate or deferred tax assets and liabilities. Adverse developments in global or regional economies could drive an increase or decrease in the demand for our products that could increase or decrease our revenues, increase or decrease our manufacturing costs and ultimately increase or decrease our results of operations, financial condition and cash flows. As a result of negative changes in the economy, customers, vendors or counterparties may experience significant cash flow problems or cause consumers of our products to postpone or refrain from spending in response to adverse economic events or conditions. If customers are not successful in generating sufficient revenue or cash flows or are precluded from securing financing, they may not be able to pay or may delay payment of accounts receivable that are owed to us or we may experience lower sales volumes. Our financial condition and results of operations could be materially and adversely affected by any of the foregoing.

We are exposed to the risks inherent in international sales and operations.

In 2015, export sales from the United States made up approximately one third of our total sales, and we sell our products to customers in approximately 65 countries. We have exposure to risks of operating in many foreign countries, including:

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fluctuations in foreign currency exchange rates, including the Euro, Japanese Yen, Chinese Renminbi and Brazilian Real;

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restrictions on, or difficulties and costs associated with, the repatriation of cash from foreign countries to the United States;

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difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations;

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unexpected changes in political or regulatory environments;

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earnings and cash flows that may be subject to tax withholding requirements or the imposition of tariffs, exchange controls or other restrictions;

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political and economic instability;

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import and export restrictions and other trade barriers;

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difficulties in maintaining overseas subsidiaries and international operations;

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difficulties in obtaining approval for significant transactions;

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government limitations on foreign ownership;

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government takeover or nationalization of business; and

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government mandated price controls.

Any one or more of the above factors could adversely affect our international operations and could significantly affect our financial condition and results of operations. We have also expanded our participation in certain markets, including China and Brazil. As our international operations and activities expand, we inevitably have greater exposure to the risks of operating in many foreign countries.

Our reported results could be adversely affected by currency exchange rates and currency devaluation could impair our competitiveness.

Due to our international operations, we transact in many foreign currencies, including but not limited to the Euro, Japanese Yen, Chinese Renminbi and Brazilian Real. As a result, we are subject to the effects of changes in foreign currency exchange rates. During times of a strengthening U.S. dollar, our reported net revenues and operating income will be reduced because the local currency will be translated into fewer U.S. dollars. During periods of local economic crisis, local currencies may be devalued significantly against the U.S. dollar, potentially reducing our margin. For example, during the year ended December 31, 2015, unfavorable foreign exchange rate movements impacted net sales, translated into U.S. dollars, by $31 million or 3% of sales compared to the year ended December 31, 2014. Ingevity may enter forward exchange contracts and other financial contracts in an attempt to mitigate the impact of currency rate fluctuations. However, there can be no assurance that such actions will eliminate any adverse impact from variation in currency rates. Also, actions to recover margins may result in lower volume and a weaker competitive position, which may have an adverse effect on our profitability.

Our operations outside the United States require us to comply with a number of U.S. and foreign regulations, violations of which could have a material adverse effect on our financial condition and results of operations.

Our operations outside the United States require us to comply with a number of U.S. and international regulations. For example, our operations in countries outside the United States are subject to the United States Foreign Corrupt Practices Act (“FCPA”), which prohibits U.S. companies and their agents and employees from providing anything of value to a foreign official for the purposes of influencing any act or decision of these individuals in their official capacity to help obtain or retain business, direct business to any person or corporate entity, or obtain any unfair advantage. Our activities may create the risk of unauthorized payments or offers of payments by our employees, agents or joint venture partners that could be in violation of anti-corruption laws, even though these parties are not subject to our control. We have internal control policies and procedures and training and compliance programs for our employees and agents with respect to the FCPA. However, we cannot assure that our policies, procedures and programs always will protect us from reckless or criminal acts committed by our employees or agents. Allegations of violations of applicable anti-corruption laws may result in internal, independent or government investigations. Violations of anti-corruption laws may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could have a material adverse effect on our financial condition and results of operations.

In addition, the shipment of goods, services and technology across international borders subjects us to extensive trade laws and regulations. Our import activities are governed by the unique customs laws and regulations in each of the countries where we operate. Moreover, many countries, including the United States, control the export and re-export of certain goods, services and technology and impose related export

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recordkeeping and reporting obligations. Governments may also impose economic sanctions against certain countries, persons and entities that may restrict or prohibit transactions involving such countries, persons and entities, which may limit or prevent our conduct of business in certain jurisdictions.

The laws and regulations concerning import activity, export recordkeeping and reporting, export control and economic sanctions are complex and constantly changing. These laws and regulations can cause delays in shipments and unscheduled operational downtime. Moreover, any failure to comply with applicable legal and regulatory trading obligations could result in criminal and civil penalties and sanctions, such as fines, imprisonment, debarment from governmental contracts, seizure of shipments and loss of import and export privileges. In addition, investigations by governmental authorities as well as legal, social, economic and political issues in these countries could have a material adverse effect on our business, results of operations and financial condition. We are also subject to the risks that our employees, joint venture partners and agents outside of the United States may fail to comply with other applicable laws.

Risks Related to Ingevity’s Business

We are dependent on attracting and retaining key personnel.

The company is dependent upon its senior management, as well as upon engineering, technical, sales and application specialists, together with experienced industry professionals. Our success depends, in part, on our ability to attract, retain and motivate these key performers. Our failure to attract and retain those making significant contributions could adversely affect our financial condition and results of operations.

Adverse conditions in the automotive market may adversely affect demand for our automotive carbon products.

Sales of our automotive carbon product are tied to global automobile production levels. Automotive production in the markets we serve can be affected by macro-economic factors such as interest rates, fuel prices, consumer confidence, employment trends, regulatory and legislative oversight requirements and trade agreements. For example, the global economic downturn in 2008/2009 led to drastic reduction in vehicle sales and even greater reduction in vehicle production as OEMs right-sized their inventories to meet the lower sales volumes. Regional disruptions such as caused by the Japan earthquake and resulting tsunami in March 2011 and Hurricane Sandy in October 2012 can also significantly impact vehicles production and therefore demand for our automotive carbon.

In addition, growth in alternative vehicles, such as all-electric vehicles and hydrogen fuel cell vehicles, which lessen the use of gasoline, may also adversely affect the demand for our products.

If increasingly more stringent air quality standards worldwide are not adopted, our growth could be impacted.

Environmental standards drive the implementation of gasoline vapor emission control systems by automotive manufacturers. Given increasing societal concern over global warming and health hazards associated with poor air quality, there is growing pressure on regulators across the globe to take meaningful action. For those countries that have not significantly regulated gasoline vapor emissions, enacting more stringent regulations governing gasoline vapor emissions represents a significant upside to the company’s automotive carbon business. However, regulators may react to a variety of considerations, including economic and political, that may mean that any such more stringent regulations are delayed or shelved entirely, in one or more countries or regions. As the adoption of more stringent regulations governing gasoline vapor emissions is expected to drive significant growth in our automotive carbon business, the failure to enact such regulations will have a significant impact on the growth prospects of that business.

The company’s printing inks business serves customers in a market that is facing declining volumes.

In recent years, the use of inks in which our printing ink resins are used, such as those made for magazines and catalogues, has significantly decreased, as the printing industry has experienced a reduction in demand due to various factors including the great recession of 2008 and 2009, which severely impacted volumes, and competition from alternative sources of communication, including email, the Web, electronic readers, interactive television and electronic retailing. The impacts of these changes have led to continued intense competition and downward pricing pressures on printing inks, and therefore, our ink products.

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The company’s pavement technologies business is heavily dependent on government infrastructure spending.

A significant portion of our customer’s revenues in our pavement technologies business is derived from contracts with various foreign and U.S. governmental agencies, and therefore, when government spending is reduced, our customers’ need for our products is similarly reduced. While we do not do business directly with governmental agencies, our customers provide paving services to, for example, the governments of various jurisdictions within Europe, China, Brazil and India, and we anticipate that revenue either directly or indirectly attributable to such government spending will continue to remain a significant portion of our revenues. Government business is, in general, subject to special risks and challenges, including: delays in funding and uncertainty regarding the allocation of funds to federal, state and local agencies, delays in the expenditures and delays or reductions in other state and local funding dedicated for transportation projects; other government budgetary constraints, cutbacks, delays or reallocation of government funding; long purchase cycles or approval processes; our customers’ competitive bidding and qualification requirements; changes in government policies and political agendas; and international conflicts or other military operations that could cause the temporary or permanent diversion of government funding from transportation or other infrastructure projects.

The company’s oilfield technologies business is significantly affected by trends in oil and natural gas prices that affect the level of exploration, development and production activity.

Demand for our oilfield technologies services and products is particularly sensitive to the level of exploration, development and production activity of, and the corresponding capital spending by, oil and natural gas companies, including national oil companies. The level of exploration, development and production activity is directly affected by trends in oil and natural gas prices, which historically have been volatile. Crude oil prices have declined significantly since 2014, with West Texas Intermediate (WTI) oil spot prices declining from a high of  $108 per barrel in June 2014 to a low of  $27 per barrel in January 2016, a level which has not been experienced since 2003, and pricing is not forecasted to improve significantly during 2016. Any prolonged low pricing environment for oil and natural gas is likely to result in reduced demand for our oilfield technology products, which may have a material adverse effect on our results of operations.

In order to compete successfully, we must develop new products and technologies meeting evolving market and customer needs; disruptive technologies could reduce the demand for the company’s products.

Our industries and the end-use markets into which we sell our products experience periodic technological change and product improvement. Our future growth will depend on our ability to gauge the direction of commercial and technological progress in key end-use markets and on our ability to fund and successfully develop, manufacture and market products in such changing end-use markets. If we fail to keep pace with the evolving technological innovations in our end-use markets on a competitive basis, including with respect to innovation with regard to the development of alternative uses for, or application of, products developed that utilize such end-use products, our financial condition and results of operations could be adversely affected. Similarly, we face competition in our applications. Disruptive technology involving new or superior solutions could reduce the demand for the company’s products.

If we are unable to adequately protect our intellectual property, we may lose significant competitive advantages.

Intellectual property rights, including patents, trade secrets, confidential information, trademarks, trade names and trade dress, are important to our business. We will endeavor to protect our intellectual property rights in key jurisdictions in which our products are produced or used, in jurisdictions into which our products are imported, and in jurisdictions where our competitors have significant manufacturing capabilities. Our success will depend to a significant degree upon our ability to protect and preserve our intellectual property rights. However, we may be unable to obtain or maintain protection for our intellectual property in key jurisdictions. Although we own and have applied for numerous patents and trademarks throughout the world, we may have to rely on judicial enforcement of our patents and other proprietary rights. Our patents and other intellectual property rights may be challenged, invalidated, circumvented and rendered unenforceable or otherwise compromised. A failure to protect, defend or enforce our intellectual property could have an adverse effect on our financial condition and results of operations. Similarly, third

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parties may assert claims against us and our customers and distributors alleging our products infringe upon third party intellectual property rights.

We also rely materially upon unpatented proprietary technology, know-how and other trade secrets to maintain our competitive position. While we maintain policies to enter into confidentiality agreements with our employees and third parties to protect our proprietary expertise and other trade secrets, these agreements may not be enforceable or, even if legally enforceable, we may not have adequate remedies for breaches of such agreements. We also may not be able to readily detect breaches of such agreements. The failure of our patents or confidentiality agreements to protect our proprietary technology, know-how or trade secrets could result in significantly lower revenues, reduced profit margins or loss of market share.

If we must take legal action to protect, defend or enforce our intellectual property rights, any suits or proceedings could result in significant costs and diversion of our resources and our management’s attention, and we may not prevail in any such suits or proceedings. A failure to protect, defend or enforce our intellectual property rights could have an adverse effect on our results of operations.

Our Performance Chemicals segment is highly dependent on CTO which is limited in supply; lack of access to sufficient CTO would impact our ability to produce CTO-based products.

The availability of CTO is essential to the company’s Performance Chemicals segment. Availability of CTO is directly linked to the production output of kraft mills using pine as their source of pulp. As a result, there is a finite global supply of CTO — with global demand for kraft board driving the global supply of CTO, rather than demand for CTO itself. Most of the CTO made available for sale by its producers in North America is covered by long-term supply agreements, further constraining availability.

At the time of the separation, we intend to enter into a long-term supply agreement with WestRock pursuant to which we will purchase all of the CTO output from WestRock’s existing kraft mills, subject to certain exceptions. See “Certain Relationships and Related Person Transactions — Crude Tall Oil and Black Liquor Soap Skimmings Agreement.” This agreement will include pricing terms based on market prices. Under this agreement, based on WestRock’s current output, we expect to initially source approximately 45% to 55% of our CTO requirements for the maximum operating rates of our North American facilities. We also have agreements with other suppliers to satisfy substantially all of the balance of our expected requirements of CTO for 2016, all as described more specifically under “Business — Raw Materials and Energy.”

Pricing for the products in our agreement with WestRock will be based on the prevailing market prices of products at the time of purchase. The pricing formulas are subject to certain pricing floors as set forth in the agreement. Given the take-or-pay requirements of the agreement, in adverse market conditions we could be required to purchase CTO from WestRock at prices where our results of operations could be materially and adversely affected.

If any of our suppliers (including WestRock) fail to meet their respective obligations under our supply agreements or we are otherwise unable to procure an adequate supply of CTO, we would be unable to produce the quantity of products that we have historically produced and our results of operations would be materially and adversely affected.

Beginning in 2025, either party may provide a notice to the other party terminating the agreement five years from the date of such notice. Beginning one year after such notice, the quantity of products provided by WestRock under the agreement will be gradually reduced over a four-year period based on the schedule set forth in the agreement. In addition, from 2022 until 2025, either party may provide a one-year notice to remove a kraft mill as a supply source. The two largest kraft mills under the agreement currently are expected to supply approximately 18.5% to 20% and 16.5% to 17.5%, respectively, of the total amount of products expected to be supplied under our agreement with WestRock. If WestRock exercises its rights to terminate the agreement or remove a kraft mill as a supply source, and we are unable to arrange for a substitute supply of CTO, we would be unable to continue to produce the same quantity of products and our results of operations could be materially and adversely affected.

There are other pressures on the availability of CTO. Some pulp or paper mills may choose to consume their production of CTO to meet their energy needs rather than sell the CTO to third parties. Also, as described below, there are regulatory pressures that may incentivize suppliers of CTO to sell CTO into

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alternative fuel markets rather than to historical end users such as Ingevity. Furthermore, weather conditions have in the past and may in the future affect the availability and quality of pine trees used in the kraft pulping process and therefore the availability of CTO meeting Ingevity’s quality standards. For example, the combined impact of Hurricane Katrina in August 2005 and Hurricane Rita in September 2005 caused significant damage to forests throughout the southern United States. This significantly affected the availability and quality of the supply of CTO during late 2005 and into 2006.

The European Union’s Directive 2009/28 on the promotion of the use of energy from renewable resources (“Renewable Energy Directive” or “RED”) and similar legislation in the United States and elsewhere may incentivize the use of CTO as a feedstock for production of alternative fuels.

In December 2008, the European Union adopted the Renewable Energy Directive, which established a 20% EU-wide target for energy consumed from renewable sources relative to the EU’s gross final consumption of energy, as well as a 10% target for energy consumed from renewable sources in the transport section. In order to reach these targets, the RED established mandatory targets for each Member State and required each Member State to adopt a national renewable energy action plan setting forth measures to achieve its national targets. The RED also established sustainability criteria for biofuels, which must be satisfied in order for the consumption of a fuel to count toward a Member State’s national targets. CTO-based biofuel currently satisfies the RED’s biofuel sustainability criteria.

In spring 2015, the EU adopted amendments to the Renewable Energy Directive. RED now expressly lists CTO as a residue-type feedstock whose use in biofuel would make that biofuel eligible for double counting towards national targets of the Member States, and at least two Member States additionally have or plan fiscal incentives for the domestic marketing of CTO-based and other qualifying biofuels.

In addition to these developments in the European Union, various pieces of legislation regarding the use of alternative fuels have been introduced in the United States.

Because the supply of CTO is inherently constrained by the volume of kraft pulp processing, any diversion of CTO for production of alternative fuels would reduce the available supply of CTO as the principal raw material of the pine chemicals industry. As described above, the company is highly dependent on CTO as an essential raw material, and if the company is unable to procure an adequate supply of CTO due to competing new uses such as for biofuel production, the company’s results of operations would be materially and adversely affected.

Pricing for CTO is subject to particular pricing pressures by reason of limited supply and competing demands for end use, and we may be limited in our ability to pass on increased costs to our customers.

Pricing for CTO (which accounts for approximately 17 percent of all of our cost of sales and 41 percent of our raw materials purchases for 2015) is subject to particular pricing pressures by reasons of the limited supply elasticity of the product and competing demands for its use, all of which drive pressure on price:

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CTO is a product of the kraft pulping process, and the global supply of CTO is inherently constrained by the volume of kraft pulping processing (see “Business — Raw Materials and Energy”);

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CTO can be burned as alternative fuels, either in support of the originating pulp mill operations, by energy companies or biofuel companies; and

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Regulations or other incentives to mandate or encourage the consumption of biofuels as alternatives, including CTO.

We may not have the ability to pass through any increases in our cost of CTO to our customers in the form of price increases or other adjustments, with a resulting material adverse effect on our results of operations. Additionally, we may be placed at a competitive disadvantage relative to our competitors who rely on different primary raw materials or who have more favorable terms with their suppliers.

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We are also dependent on other raw materials, and these are also subject to pricing pressures; lack of access to these raw materials and inability to pass on price increases could adversely affect our financial condition and results of operations.

The company is dependent on other raw materials, including sawdust, phosphoric acid, ethyleneamines and lignin. Raw material costs are a significant operating expense of the company. The cost of raw materials can be volatile and subject to increases as a result of, among other things, changing economic conditions, political or policy considerations, supply and demand levels, instability in energy producing nations, and natural events such as extreme weather events or even insect infestations. Any interruption in the supply of the raw materials on which we depend, and any increases on the cost of raw materials that we are not able to pass on to customers in the form of price increases or other adjustments, may materially impact our financial condition and results of operations.

A prolonged period of low energy prices may materially impact our results of operations.

The price of energy may directly or indirectly impact demand, pricing or the profitability for certain Ingevity products. As petroleum oil prices fall or change rapidly, Ingevity products may be disadvantaged due to the fact that CTO and black liquor soap skimmings (“BLSS”) are thinly traded commodities with pricing commonly established for periods ranging from one quarter to one year periods of time. Due to this, alternative technologies which compete with product offerings provided by Ingevity may be advantaged from time to time in the market place. Protracted periods of high volatility or sustained oversupply of petroleum oil may also translate into increased competition from petroleum-based alternatives which would otherwise be consumed in petroleum transportation fuel blends. In addition, pricing for competing naturally derived oils such as palm or soybean is likely to provide further pressure on pricing of the company’s products during periods of depressed petroleum prices. See also “Risk Factors — Pricing for CTO is subject to particular pricing pressures by reason of limited supply and competing demands for end use, and we may be limited in our ability to pass on increased costs to our customers.”

We face competition from producers of substitute products.

The company faces competition from a number of products that are potential substitutes for our products. In particular, hydrocarbon and gum rosin-based products compete with TOR-based resins in the adhesives and inks markets. The price of gum rosin has a significant impact on the market price for TOR and rosin derivatives and the price of gum rosin is driven by labor rates, land leasing costs and various other factors that are not within our control. Animal and vegetable-based fatty acids compete with TOFA products in lubricant and industrial specialties. The market price for TOFA products is impacted by the prices of other fats and oils and the prices for other fats and oils is driven by actual and expected harvest rates, crude oil prices and the biofuel market.

Disruptions at any of our manufacturing facilities or within our supply chain could negatively impact our production.

An operational disruption in any of our facilities could negatively impact production and our financial results. The occurrence of a natural disaster, such as a hurricane, tropical storm, earthquake, tornado, severe weather, flood, fire or other unanticipated problems such as labor difficulties, equipment failure or unscheduled maintenance could cause operational disruptions of varied duration. These types of disruptions could materially adversely affect our financial condition and results of operations to varying degrees dependent upon the facility, the duration of the disruption, our ability to shift business to another facility or find alternative sources of materials or energy. Any losses due to these events may not be covered by our existing insurance policies or may be subject to certain deductibles.

We could be similarly adversely affected by disruptions within our supply chain and transportation network. Our products are transported by truck, rail, barge or ship by third-party providers. The costs of transporting our products could be negatively affected by factors outside of our control, including rail service interruptions or rate increases, tariffs, rising fuel costs and capacity constraints. Significant delays or increased costs affecting these transportation methods could materially affect our financial condition and results of operations. Disruptions at our suppliers could lead to short term or longer rises in raw material or energy costs and/or reduced availability of materials or energy, potentially affecting financial condition and results of operations.

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We are dependent upon third parties for the provision of certain critical operating services at several of our facilities.

We are dependent upon third parties for the provision of certain critical operating services at our Wickliffe, Kentucky and Covington, Virginia carbon facilities and at our Charleston, South Carolina performance chemicals facility.

We are dependent on the WestRock Covington, Virginia paper mill for the provision of electricity, water, compressed air, steam and wastewater treatment to our Covington carbon facility and we are similarly dependent on the KapStone Paper and Packaging Corporation (“KapStone”) North Charleston, South Carolina paper mill for the provision of water, compressed air, steam and wastewater treatment at our North Charleston performance chemicals facility. We have existing long term contractual arrangements covering these services for our North Charleston facility and will enter into new long term contractual arrangements on arms’ length commercial terms for our Covington facility. The provision of these services would be at risk if any of the counterparties were to idle or permanently shut down the associated mill, or if operations at the associated mill were disrupted due to natural or other disaster, or by reason of strikes or other labor disruptions, or if there were a significant contractual dispute between the parties.

In the event that WestRock or KapStone were to fail to provide the contracted services, we would be required to obtain these services from other third parties at an increased cost or to expend capital to provide these services ourselves. The expenses associated with obtaining or providing these services, as well as any interruption in our operations as a result of the failure of the counterparty to provide these services, may be significant and may adversely affect our financial condition and results of operations.

Furthermore, in the event that the WestRock Covington, Virginia paper mill wastewater treatment operations do not comply with permits or applicable law and WestRock is unable to determine the cause of such compliance, then we will be responsible for between 10% and 50% of the costs and expenses of such noncompliance (increasing in 10% increments per violation during each twelve (12) month period) despite representing less than 3% of the total wastewater volume. These costs and expenses may be significant and may adversely affect our financial condition and results of operations.

Additionally, our Covington carbon facility is located on real property leased from WestRock pursuant to a long-term lease agreement, and is surrounded by the WestRock paper mill, and a portion of our North Charleston performance chemicals facility is located on real property leased from KapStone and is adjacent to the KapStone paper mill. In the event we were to have a dispute with WestRock or KapStone regarding the terms of our lease agreement, or we were otherwise unable to fully access or utilize the leased property, the associated business disruption may be significant and may adversely affect our financial condition and results of operations.

We are also dependent on third parties for the disposal of brine, which results from our own conversion of BLSS into CTO. If these service providers do not perform under their contracts, the costs of disposing of brine ourselves, including, for example, the transportation costs, could be significant.

Work stoppages and other labor relations matters may have an adverse effect on our financial condition and results of operations.

A number of our employees are governed by collective bargaining agreements (“CBAs)”. From time to time the company engages in negotiations to renew CBA’s as those contracts are scheduled to expire. While the company has generally positive relations with its labor unions, there is no guarantee the Company will be able to successfully negotiate new union contracts without work stoppages, labor difficulties or unfavorable terms. If we were to experience any extended interruption of operations at any of our facilities as a result of strikes or other work stoppages, our results of operations and financial condition could be materially and adversely affected. In addition, due to the co-location of our Covington, Virginia and North Charleston, South Carolina facilities within the WestRock and KapStone facilities, a strike or work stoppage at either of those facilities could cause disruptions at our facilities, and our results of operations could be materially and adversely affected.

The collective bargaining agreement with the Covington Papers Union (“CPU”) covering certain employees in the company’s Covington, Virginia facility also covers certain employees of the WestRock Company paper mill. Similarly, the collective bargaining agreement with the International Brotherhood of

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Electrical Workers (“IBEW”) also covers employees at both facilities. The CPU agreement is scheduled to expire in December 2016 and the IBEW agreement is scheduled to expire in January 2017.

Our business involves hazards associated with chemical manufacturing, storage, transportation and disposal.

There are hazards associated with the chemicals we manufacture and the related storage and transportation of our raw materials, including common solvents, such as toluene and methanol, and reactive chemicals, such as acrylic acid, all of which fall under the OSHA Process Safety Management Code. These hazards could lead to an interruption or suspension of operations and have an adverse effect on the productivity and profitability of a particular manufacturing facility or on us as a whole. While we endeavor to provide adequate protection for the safe handling of these materials, issues could be created by various events, including natural disasters, severe weather events, acts of sabotage and performance by third parties, and as a result we could face the following potential hazards: piping and storage tank leaks and ruptures; mechanical failure; employee exposure to hazardous substances; and chemical spills and other discharges or releases of toxic or hazardous substances or gases.

These hazards may cause personal injury and loss of life, damage to property and contamination of the environment, which could lead to government fines, work stoppage injunctions, lawsuits by injured persons, damage to our public reputation and brand and diminished product acceptance. If such actions are determined adversely to us or there is an associated economic impact to our business, we may have inadequate insurance or cash flow to offset any associated costs. Such outcomes could adversely affect our financial condition and results of operations.

Regulation of exposure to certain process chemicals could require expenditures or changes to our product formulations.

Certain regulations applicable to our operations, including the Occupational Safety and Health Act and the Toxic Substances Control Act in the United States and the Registration, Evaluation and Authorization of Chemicals, or REACH, directive in Europe, prescribe limits restricting exposure to a number of chemicals used in our operations, including formaldehyde and nonylphenol, a raw material used in the manufacture of phenolic ink resins. Future studies on the health effects of chemicals used in our operations, including nonylphenol and bisphenol A, which is used in our TOR-based ink resins, may result in additional regulation or new requirements in the United States, Europe and elsewhere, which might further restrict or prohibit the use of, and exposure to, these chemicals. Additional regulation of or requirements for these or other chemicals could require us to change our operations, and these changes could affect the quality or types of products we manufacture and/or materially increase our costs.

The company’s operations are subject to a wide range of general and industry specific environmental laws and regulations.

The company’s operations are subject to a wide range of general and industry-specific environmental laws and regulations, including for example related to bisphenol A, formaldehyde and air emissions. Changes in environmental laws and regulations, or their application, could subject the company to significant additional capital expenditures and operating expenses in future years. However, any such changes are uncertain and, therefore, it is not possible for the company to predict with certainty the amount of additional capital expenditures or operating expenses that could be necessary for compliance with respect to any such changes.

We are subject to cyber-security risks related to our intellectual property and certain other data.

We use information technologies to retain certain of our intellectual property, as well as to securely manage operations and various business functions. Our systems are potentially subject to attempts by third parties to access information or to disrupt our systems. Despite our security design and controls, and those of our third party providers, we could become subject to cyber-attacks which could result in operational disruptions or the misappropriation of sensitive data. There can be no assurance that such disruptions or misappropriations and the resulting repercussions will not be material to our financial condition or results of operations.

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We are dependent on certain customers.

We have certain large customers in particular businesses, the loss of which could have a material adverse effect on the segment’s sales and, depending on the significance of the loss, our results of operations, financial condition or cash flows. Sales to the company’s ten largest customers (across both segments) accounted for 37% of total sales for 2015. One customer, the Flint Group, accounted for more than 10% of total sales for 2015, with no other customer accounting for more than 6% of total sales. With some exceptions, our business with those large customers is based primarily upon individual purchase orders. As such, our customers could cease buying our products from us at any time, for any reason, with little or no recourse. If a major customer or multiple smaller customers elected not to purchase products from us, our business prospects, financial condition and results of operations would be materially adversely affected.

The inability to make or effectively integrate future acquisitions may affect our results.

As part of our growth strategy, we may pursue acquisitions of complementary businesses and product lines or invest in joint ventures. The ability to grow through acquisitions or other investments depends upon our ability to identify, negotiate, complete and integrate suitable acquisitions or joint venture arrangements. If we fail to successfully integrate acquisitions into our existing business, our financial condition and results of operations could be adversely affected.

Risks Related to the Separation

The combined post-separation value of WestRock and Ingevity shares may not equal or exceed the pre-separation value of WestRock common shares.

As a result of the distribution, WestRock expects the trading price of WestRock common shares immediately following the distribution to be lower than the “regular-way” trading price of such shares immediately prior to the distribution because the trading price will no longer reflect the full value of the specialty chemicals business. There can be no assurance that the aggregate market value of the WestRock common shares and the Ingevity common stock following the separation will be higher or lower than the market value of WestRock common shares would have been if the separation did not occur.

Ingevity has no history of operating as an independent company, and Ingevity’s historical and pro forma financial information is not necessarily representative of the results that it would have achieved as a separate, publicly traded company and may not be a reliable indicator of its future results.

The historical information about Ingevity in this information statement refers to Ingevity’s business as operated by and integrated with WestRock. Ingevity’s historical and pro forma financial information included in this information statement is derived from the consolidated financial statements and accounting records of WestRock. Accordingly, the historical and pro forma financial information included in this information statement does not necessarily reflect the financial condition, results of operations or cash flows that Ingevity would have achieved as a separate, publicly traded company during the periods presented or those that Ingevity will achieve in the future, including as a result of the factors described below:

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Prior to the separation, Ingevity’s business has been operated by WestRock as part of its broader corporate organization, rather than as an independent company. WestRock or one of its affiliates performed various corporate functions for Ingevity, such as information technology, legal, treasury, accounting, auditing, human resources, public affairs and finance. Ingevity’s historical and pro forma financial results reflect allocations of corporate expenses from WestRock for such functions and could be less than the expenses Ingevity would have incurred had it operated as a separate publicly traded company.

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Currently, Ingevity’s business is integrated with the other businesses of WestRock. Historically, Ingevity has shared economies of scope and scale in costs, employees, vendor relationships and customer relationships. Although Ingevity will enter into transition agreements with WestRock, these arrangements may not fully capture the benefits that Ingevity has enjoyed as a result of

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being integrated with WestRock and may result in Ingevity paying higher charges than in the past for these services. This could have an adverse effect on Ingevity’s results of operations and financial condition following the completion of the separation.

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Generally, Ingevity’s working capital requirements and capital for its general corporate purposes, including acquisitions and capital expenditures, have historically been satisfied as part of the corporate-wide cash management policies of WestRock. Following the completion of the separation, Ingevity may need to obtain additional financing from banks, through public offerings or private placements of debt or equity securities, strategic relationships or other arrangements, which may or may not be available and may be more costly.

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After the completion of the separation, the cost of capital for Ingevity’s business may be higher than WestRock’s cost of capital prior to the separation.

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Ingevity’s historical financial information does not reflect the debt that it will incur as part of the separation.

Other significant changes may occur in Ingevity’s cost structure, management, financing and business operations as a result of operating as a company separate from WestRock. For additional information about the past financial performance of Ingevity’s business and the basis of presentation of the historical combined financial statements and the unaudited pro forma combined financial statements of Ingevity’s business, see “Unaudited Pro Forma Combined Financial Statements,” “Selected Historical Combined Financial Information of Ingevity” “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Ingevity” and the historical financial statements and accompanying notes included elsewhere in this information statement.

There could be significant liability if the separation, distribution and/or certain related transactions are determined to be taxable.

WestRock received a private letter ruling from the IRS on January 4, 2016, regarding certain U.S. federal income tax matters relating to the separation, distribution and certain related transactions. Conditions to the distribution include that (i) the private letter ruling received from the IRS regarding certain U.S. federal income tax matters relating to the separation, distribution and certain related transactions shall not have been modified or revoked, and (ii) WestRock shall have received opinions from its outside tax advisors regarding the qualification of the distribution, together with certain related transactions, as a transaction that is tax-free for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code. The private letter ruling and opinions will be based on and will rely on, among other things, certain facts, assumptions, representations, statements and undertakings from WestRock and Ingevity regarding the past and future conduct of the companies’ respective businesses and other matters. If any of these facts, assumptions, statements, representations or undertakings is, or becomes, inaccurate or incomplete, or if WestRock or Ingevity breaches any of its respective covenants in the separation documents, the IRS private letter ruling and/or the opinion of counsel may be invalid and the conclusions reached therein could be jeopardized.

Notwithstanding the IRS private letter ruling and the opinion of counsel, the IRS could determine that the separation should be treated as a taxable transaction if it determines that any of these representations, assumptions or undertakings upon which such IRS private letter ruling or opinion was based are incorrect or have been violated or if it disagrees with the conclusions in the opinion of counsel. The IRS private letter ruling does not address all of the issues that are relevant to determining whether the separation, distribution and certain related transactions will be generally tax-free for U.S. federal income tax purposes, and any opinion of outside counsel or other external tax advisor represents the judgment of such counsel or advisor, which is not binding on the IRS or any court. Accordingly, notwithstanding receipt of the IRS private letter ruling and the tax opinions referred to above, there can be no assurance that the IRS will not assert that the separation, distribution and/or certain related transactions do not qualify for tax-free treatment for U.S. federal income tax purposes or that a court would not sustain such a challenge.

If the distribution and/or certain related transactions failed to qualify as a transaction that is generally tax-free under Sections 368(a)(1)(D) and 355 of the Code, in general, WestRock would recognize taxable gain as if it had sold the Ingevity common stock in a taxable sale for its fair market value, WestRock

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stockholders who receive Ingevity common stock in the distribution would be subject to tax as if they had received a taxable distribution equal to the fair market value of such shares and we could incur significant liabilities. For more information, please refer to “Certain Material U.S. Federal Income Tax Consequences of the Distribution.”

Ingevity may not be able to engage in certain corporate actions after the separation.

To preserve the tax-free treatment to WestRock of the separation and the distribution, under the tax matters agreement that Ingevity will enter into with WestRock, Ingevity and its subsidiaries will be restricted from taking or failing to take any action that prevents the distribution and/or certain related transactions from being tax-free for U.S. federal income tax purposes. Under the tax matters agreement, prior to or on the 25-month anniversary of the distribution date, Ingevity will be prohibited, except in certain circumstances, from:

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entering into any transaction resulting in the acquisition of 50% or more of its stock (by vote or value, taking into account the stock indirectly acquired by Rock-Tenn stockholders in the Merger) or a substantial portion of its assets, whether by merger or otherwise;

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merging, consolidating, dissolving or liquidating, or permitting any of its subsidiaries to merge, consolidate, dissolve or liquidate;

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issuing equity securities beyond certain thresholds;

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taking any action affecting the relative voting rights of Ingevity stock;

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redeeming or repurchasing its capital stock beyond certain thresholds; and

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ceasing to actively conduct certain businesses.

These restrictions may limit Ingevity’s ability to pursue certain strategic transactions or other transactions that it may believe to be in the best interests of its stockholders or that might increase the value of its business. In addition, under the tax matters agreement, Ingevity will be required to indemnify WestRock against any of WestRock’s tax liabilities as a result of the acquisition of Ingevity’s stock or assets, even if Ingevity did not participate in or otherwise facilitate the acquisition. For more information, see “Certain Relationships and Related Person Transactions — The Tax Matters Agreement.”

We will be subject to continuing contingent tax-related liabilities of WestRock following the distribution.

Under the Code, each corporation that was a member of WestRock's consolidated tax reporting group during any taxable period or portion of any taxable period ending on or before the effective time of the distribution is severally liable for the U.S. federal income tax liability of the entire consolidated tax reporting group for such taxable period. In connection with the separation, we will enter into a Tax Matters Agreement with WestRock that will allocate the responsibility for prior period taxes of WestRock's consolidated tax reporting group between us and WestRock. If WestRock were unable to pay any prior period taxes for which it is responsible, however, we could be required to pay the entire amount of such taxes, and such amounts could be significant. The Tax Matters Agreement generally gives WestRock discretion to handle consolidated tax returns and audits for pre-distribution periods in a manner which may be unfavorable to us and which may result in additional tax costs to us. For a more detailed description of the Tax Matters Agreement, see “Certain Relationships and Related Person Transactions — The Tax Matters Agreement.”

Until the separation occurs, the terms of the separation may be changed in ways which may be unfavorable to Ingevity.

Until the separation occurs, Ingevity will be a wholly owned subsidiary of WestRock. Accordingly, WestRock will effectively have the sole and absolute discretion to determine and change the terms of the separation, including the establishment of the record date for the distribution and the distribution date. These changes could be unfavorable to Ingevity.

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Ingevity may not achieve some or all of the expected benefits of the separation, and the separation may adversely affect Ingevity’s business.

Ingevity may not be able to achieve the full strategic and financial benefits expected to result from the separation, or such benefits may be delayed or not occur at all. The separation and distribution are expected to provide the following benefits, among others:

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enhanced strategic and management focus;

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more efficient allocation of capital;

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direct access to capital markets; and

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alignment of incentives with performance objectives.

Ingevity may not achieve these and other anticipated benefits for a variety of reasons, including, among others: (a) the separation will require significant amounts of management’s time and effort, which may divert management’s attention from operating and growing Ingevity’s business; (b) following the separation, Ingevity may be more susceptible to market fluctuations and other adverse events than if it were still a part of WestRock; (c) following the separation, Ingevity’s business will be less diversified than WestRock’s business prior to the separation; and (d) the other actions required to separate WestRock’s and Ingevity’s respective businesses could disrupt Ingevity’s operations. If Ingevity fails to achieve some or all of the benefits expected to result from the separation, or if such benefits are delayed, the business, financial conditions and results of operations of Ingevity could be adversely affected.

Ingevity will be dependent upon WestRock for the performance of obligations under various critical agreements that will be executed as part of the separation.

In connection with the separation, Ingevity and WestRock will enter into a separation and distribution agreement and will also enter into various other agreements, including a transition services agreement, intellectual property agreement, a tax matters agreement, and an employee matters agreement. These transaction agreements will determine the allocation of assets and liabilities between the companies following the separation for those respective areas, will include any necessary indemnifications related to liabilities and obligations and will provide for certain important services to be performed between the companies. Ingevity will rely on WestRock to satisfy its performance and payment obligations under these agreements. If WestRock is unable or unwilling to satisfy its obligations under these agreements, including its indemnification obligations, Ingevity could incur operational difficulties or losses. If Ingevity does not have in place its own systems and services, or if Ingevity does not have agreements with other providers of these services once the transition services agreement expires, Ingevity may not be able to operate its business effectively and its profitability may decline. Ingevity is in the process of creating its own, or engaging third parties to provide, systems and services to replace many of the systems and services that WestRock currently provides to Ingevity. However, Ingevity may not be successful in implementing these systems and services or in transitioning data from WestRock’s systems to Ingevity. For more information, please see “Risk Factors — Our Performance Chemicals segment is highly dependent on CTO which is limited in supply; lack of access to sufficient CTO would impact our ability to produce CTO-based products” and “Risk Factors — We are dependent upon third parties for the provision of certain critical operating services at several of our facilities.”

Challenges in the commercial and credit environments may materially adversely affect Ingevity’s ability to complete the separation and Ingevity’s future access to capital.

Ingevity’s ability to issue debt or enter into other financing arrangements on acceptable terms could be materially adversely affected if there is a material decline in the demand for Ingevity’s products or in the solvency of its customers or suppliers or if other significantly unfavorable changes in economic conditions occur. Volatility in the world financial markets could increase borrowing costs or affect Ingevity’s ability to gain access to the capital markets, which could have a material adverse effect on Ingevity’s competitive position, business, financial condition, results of operations and cash flows.

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Our accounting and other management systems and resources may not be adequately prepared to meet the financial reporting and other requirements to which we will be subject following the distribution.

Our financial results previously were included within the consolidated results of WestRock, and our reporting and control systems were appropriate for those of subsidiaries of a public company. Prior to the distribution, we were not directly subject to reporting and other requirements of the Exchange Act and Section 404 of the Sarbanes-Oxley Act of 2002. Following the distribution, we are subject to such reporting and other requirements, which require, among other things, annual management assessments of the effectiveness of our internal controls over financial reporting and a report by our independent registered public accounting firm addressing these assessments. These and other obligations place significant demands on our management, administrative and operational resources, including accounting and IT resources.

To comply with these requirements, we have upgraded and continue to upgrade our systems, including computer hardware infrastructure, implementation of additional financial and management controls, reporting systems and procedures, and we continue to hire additional accounting, finance and IT staff. If we are unable to upgrade our financial and management controls, reporting systems, IT and procedures in a timely and effective fashion, our ability to comply with our financial reporting requirements and other rules that apply to reporting companies could be impaired. Any failure to achieve and maintain effective internal controls could have an adverse effect on our business, financial condition, results of operations and cash flows.

Risks Relating to Ingevity’s Common Stock

Ingevity cannot be certain that an active trading market for its common stock will develop or be sustained after the separation, and following the separation, Ingevity’s stock price may fluctuate significantly.

A public market for Ingevity common stock does not currently exist. Ingevity anticipates that on or prior to the record date for the distribution, trading of shares of its common stock will begin on a “when-issued” basis and will continue through the distribution date. However, Ingevity cannot guarantee that an active trading market will develop or be sustained for its common stock after the separation, nor can Ingevity predict the prices at which shares of its common stock may trade after the separation. Similarly, Ingevity cannot predict the effect of the separation on the trading prices of its common stock or whether the combined market value of the shares of Ingevity common stock and the WestRock common shares will be less than, equal to or greater than the market value of WestRock common shares prior to the separation.

The market price of Ingevity common stock may fluctuate significantly due to a number of factors, some of which may be beyond Ingevity’s control, including:

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actual or anticipated fluctuations in Ingevity’s operating results;

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changes in earnings estimated by securities analysts or Ingevity’s ability to meet those estimates;

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the operating and stock price performance of comparable companies;

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changes to the regulatory and legal environment under which Ingevity operates; and

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domestic and worldwide economic conditions.

We cannot guarantee the timing, amount or payment of any dividends on our common stock in the future.

The payment and amount of any dividend will be subject to the sole discretion of our post-distribution, independent board of directors and will depend upon many factors, including our financial condition and prospects, our capital requirements and access to capital markets, covenants associated with certain of our debt obligations, legal requirements and other factors that our board of directors may deem relevant, and there can be no assurances that we will pay a dividend. For more information, see the section entitled “Dividend Policy.”

Your percentage of ownership in Ingevity may be diluted in the future.

In the future, your percentage ownership in Ingevity may be diluted because of equity issuances for acquisitions, capital market transactions or otherwise, including equity awards that Ingevity will be granting

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to Ingevity’s directors, officers and certain employees. Certain of Ingevity’s employees will have options to purchase shares of its common stock after the distribution as a result of conversion of their WestRock stock options (in whole or in part) to Ingevity stock options. Ingevity anticipates its compensation committee will grant additional stock options or other stock-based awards to certain employees after the distribution. Such awards will have a dilutive effect on Ingevity’s earnings per share, which could adversely affect the market price of Ingevity’s common stock. From time to time, Ingevity will issue additional options or other stock-based awards to certain employees under Ingevity’s employee benefits plans.

In addition, Ingevity’s amended and restated certificate of incorporation will authorize Ingevity to issue, without the approval of Ingevity’s stockholders, one or more classes or series of preferred stock having such designation, powers, preferences and relative, participating, optional and other special rights, including preferences over Ingevity’s common stock respecting dividends and distributions, as Ingevity’s board of directors generally may determine. The terms of one or more classes or series of preferred stock could dilute the voting power or reduce the value of Ingevity’s common stock. For example, Ingevity could grant the holders of preferred stock the right to elect some number of Ingevity’s directors in all events or on the happening of specified events or the right to veto specified transactions. Similarly, the repurchase or redemption rights or liquidation preferences Ingevity could assign to holders of preferred stock could affect the residual value of the common stock. For more information, see the section entitled “Description of Capital Stock.”

Certain provisions in Ingevity’s amended and restated certificate of incorporation and amended and restated bylaws, and of Delaware law, may prevent or delay an acquisition of Ingevity, which could depress the trading price of Ingevity’s common stock.

Ingevity’s amended and restated certificate of incorporation and amended and restated bylaws will contain, and Delaware law contains, provisions that are intended to deter coercive takeover practices and inadequate takeover bids by making such practices or bids unacceptably expensive to the bidder and to encourage prospective acquirers to negotiate with Ingevity’s board of directors rather than to attempt a hostile takeover. These provisions include, among others:

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the inability of Ingevity’s stockholders to act by written consent;

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rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings;

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the right of Ingevity’s board to issue preferred stock without stockholder approval;

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the ability of Ingevity’s remaining directors to fill vacancies on Ingevity’s board of directors;

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the division of Ingevity’s board of directors into three classes of directors, which classification will terminate beginning at the company’s 2019 annual meeting;

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the inability of Ingevity’s stockholders to remove directors other than for cause while the board is classified; and

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the requirement that the affirmative vote of holders of at least 75% of Ingevity’s outstanding voting stock is required to amend certain provisions of Ingevity’s amended and restated certificate of incorporation and amended and restated bylaws.

In addition, because Ingevity has not chosen to be exempt from Section 203 of the Delaware General Corporation Law (the “DGCL”), this provision could also delay or prevent a change of control that you may favor. Section 203 provides that, subject to limited exceptions, persons that acquire, or are affiliated with persons that acquire, more than 15% of the outstanding voting stock of a Delaware corporation shall not engage in any business combination with that corporation, including by merger, consolidation or acquisitions of additional shares, for a three-year period following the date on which that person or its affiliates becomes the holder of more than 15% of the corporation’s outstanding voting stock.

Ingevity believes these provisions will protect its stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with Ingevity’s board of directors and by providing Ingevity’s board of directors with more time to assess any acquisition proposal. These provisions are not intended to make Ingevity immune from takeovers. However, these provisions will apply even if the

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offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that Ingevity’s board of directors determines is not in the best interests of Ingevity and Ingevity’s stockholders. These provisions may also prevent or discourage attempts to remove and replace incumbent directors.

In addition, an acquisition or further issuance of Ingevity’s stock could trigger the application of Section 355(e) of the Code. For a discussion of Section 355(e), see “Certain Material U.S. Federal Income Tax Consequences of the Distribution.” Under the tax matters agreement, Ingevity would be required to indemnify WestRock for the resulting tax, and this indemnity obligation might discourage, delay or prevent a change of control that you may consider favorable. For more information, see “Certain Relationships and Related Person Transactions — The Tax Matters Agreement.”

Ingevity’s amended and restated bylaws will designate the state courts within the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by Ingevity’s stockholders, which could discourage lawsuits against Ingevity and Ingevity’s directors and officers.

Ingevity’s amended and restated bylaws will provide that unless the board of directors otherwise determines, a state court within the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of Ingevity, any action asserting a claim of breach of a fiduciary duty owed by any director of officer of Ingevity to Ingevity or Ingevity’s stockholders, creditors or other constituents, any action asserting a claim against Ingevity or any director or officer of Ingevity arising pursuant to any provision of the DGCL, or Ingevity’s amended and restated certificate of incorporation or bylaws, or any action asserting a claim against Ingevity or any director or officer of Ingevity governed by the internal affairs doctrine. However, if no state court located within the State of Delaware has jurisdiction, the action may be brought in the federal district court for the District of Delaware. Although Ingevity’s amended and restated bylaws will include this exclusive forum provision, it is possible that a court could rule that this provision is inapplicable or unenforceable. This exclusive forum provision may limit the ability of Ingevity’s stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with Ingevity or Ingevity’s directors or officers, which may discourage such lawsuits against Ingevity and Ingevity’s directors and officers. Alternatively, if a court were to find this exclusive forum provision inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings described above, Ingevity may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect Ingevity’s business, financial condition or results of operations.

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CAUTIONARY STATEMENT FOR THE PURPOSES OF THE “SAFE HARBOR”
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995

Certain statements in this information statement and other materials WestRock or Ingevity have filed or will file with the SEC and made elsewhere by management contain “forward-looking statements” within the meaning of the Securities Exchange Act of 1934, as amended and the Private Securities Litigation Reform Act of 1995 that reflect our current expectations, beliefs, plans or forecasts with respect to, among other things, future events and financial performance. Forward-looking statements are often characterized by words or phrases such as “may,” “will,” “could,” “should,” “would,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “prospects,” “potential” and “forecast,” and other words, terms and phrases of similar meaning. Forward-looking statements involve estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties. We caution readers that a forward-looking statement is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking statement. In addition to any such risks, uncertainties and other factors discussed elsewhere herein, risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied by the forward-looking statements include, but are not limited to:

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the results and impacts of the merger of MeadWestvaco and Rock-Tenn;

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we may be adversely affected by general economic and financial conditions beyond our control;

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we are exposed to risks related to our international sales and operations;

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our reported results could be adversely affected by currency exchange rates and currency devaluation could impair our competitiveness;

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our operations outside the United States require us to comply with a number of U.S. and foreign regulations, violations of which could have a material adverse effect on our financial condition and results of operations;

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we are dependent upon attracting and retaining key personnel;

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adverse conditions in the automotive market may adversely affect demand for our automotive carbon products;

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if increasingly more stringent air quality standards worldwide are not adopted, our growth could be impacted;

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the company’s printing inks business serves customers in a market that is facing declining volumes;

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our Performance Chemicals segment is highly dependent on CTO which is limited in supply;

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lack of access to sufficient CTO would impact our ability to produce CTO-based products;

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if WestRock exercises certain rights to terminate our supply agreement with them or to remove a kraft mill as a supply source, and we are unable to obtain a substitute supply of CTO, our ability to produce CTO-based products will be affected;

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a prolonged period of low energy prices may materially impact our results of operations;

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we are dependent upon third parties for the provision of certain critical operating services at several of our facilities;

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the occurrence of a natural disaster, such as a hurricane, winter or tropical storm, earthquake, tornado, flood, fire or other unanticipated problems such as labor difficulties, equipment failure or unscheduled maintenance and repair, which could result in operational disruptions of varied duration;

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our ability to protect our intellectual property and other proprietary information;

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government policies and regulations, including, but not limited, to those affecting the environment, climate change, tax policies and the chemicals industry; and

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losses due to lawsuits arising out of environmental damage or personal injuries associated with chemical manufacturing.

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THE SEPARATION

Background

On January 8, 2015, MWV announced that it intended to separate its specialty chemicals business through a pro rata distribution of common stock to its stockholders. Prior to the separation, but following the announcement of the separation, MWV entered into an Amended and Restated Business Combination Agreement, dated March 9, 2015, with Rock-Tenn Company whereby Rock-Tenn and MWV agreed to become wholly owned subsidiaries of a newly formed company, WestRock Company (the “Merger”). The Merger was completed on July 1, 2015. Upon the completion of the Merger, WestRock announced its continued plans to pursue the separation.

On [•], 2016, the WestRock board of directors approved the distribution of all of the issued and outstanding shares of Ingevity common stock on the basis of  [•] shares of Ingevity common stock for every [•] shares of WestRock held as of the close of business on the record date of  [•].

At [•] Eastern Time, on [•], 2016, the distribution date, each WestRock stockholder will receive [•] shares of Ingevity common stock for every [•] shares of WestRock held as of the close of business on the record date for the distribution, as described below. WestRock stockholders will receive cash in lieu of any fractional shares of Ingevity common stock that they would have received after application of this ratio. You will not be required to make any payment, surrender or exchange your WestRock common shares or take any other action to receive your shares of Ingevity’s common stock in the distribution. The distribution of Ingevity’s common stock as described in this information statement is subject to the satisfaction or waiver of certain conditions. For a more detailed description of these conditions, see “The Separation — Conditions to the Distribution.”

Reasons for the Separation

The WestRock board of directors believes that the separation of WestRock’s specialty chemicals business would be in the best interests of WestRock and its stockholders for a number of reasons, including the following:

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Enhanced strategic and management focus.   The separation will allow Ingevity and WestRock to each more effectively pursue their distinct operating priorities and strategies and enable management of both companies to better focus on unique opportunities for long-term growth and profitability.

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More efficient allocation of capital.   The separation will permit Ingevity and WestRock to each concentrate financial resources on its own operations, providing greater flexibility to invest capital in its businesses in a time and manner appropriate for its strategy and business needs and facilitate a more efficient allocation of capital.

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Direct access to capital markets.   The separation will create an independent equity structure that will afford Ingevity direct access to the capital markets and will facilitate Ingevity’s ability to effect future acquisitions utilizing Ingevity’s common stock. As a result, each company will have more flexibility to capitalize on its unique growth opportunities and objectives.

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Alignment of incentives with performance objectives.   The separation will facilitate incentive compensation arrangements for employees more directly tied to the performance of each of Ingevity’s and WestRock’s respective businesses, and enhance employee hiring and retention by, among other things, improving the alignment of management and employee incentives with performance and growth objectives.

Neither Ingevity nor WestRock can assure you that, following the separation, any of the benefits described above or otherwise will be realized to the extent anticipated or at all.

Potentially Negative Factors Considered by the Board

The WestRock board of directors also considered a number of potentially negative factors in evaluating the separation, including the loss of synergies and joint purchasing power and increased costs resulting from operating as a separate public entity, one-time costs of the separation, the risk of not

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realizing the anticipated benefits of the separation and limitations placed upon Ingevity as a result of any tax matters agreement. The WestRock board of directors concluded that the potential benefits of the separation outweighed these factors.

Internal Reorganization

Prior to the distribution, WestRock will complete an internal corporate reorganization to transfer to Ingevity the businesses and assets that are part of its specialty chemicals business that are not already owned by Ingevity to Ingevity.

The Number of Shares You Will Receive

At [•] Eastern Time, on [•], 2016, the distribution date, each WestRock stockholder will receive [•] shares of Ingevity common stock for every [•] shares of WestRock held as of the close of business of NYSE on [•], 2016, the record date.

Treatment of Fractional Shares

WestRock will not distribute any fractional shares of Ingevity common stock to its stockholders. Instead, as soon as practicable on or after the distribution date, the distribution agent will aggregate fractional shares of our common stock held by holders of record into whole shares, sell them in the open market at the prevailing market prices and then distribute the aggregate sale proceeds ratably to WestRock stockholders who would otherwise have received fractional shares of our common stock. The amount of this payment will depend on the prices at which the distribution agent sells the aggregated fractional shares of our common stock in the open market shortly after the distribution date. The distribution agent will, in its sole discretion, without any influence by WestRock or Ingevity, determine when, how, through which broker-dealer and at what price to sell the whole shares. The distribution agent is not, and any broker-dealer used by the distribution agent will not be, an affiliate of either WestRock or Ingevity. Ingevity will be responsible for payment of any brokerage fees, which we do not expect to be material to us. Your receipt of cash in lieu of fractional shares of our common stock generally will result in a taxable gain or loss for U.S. federal income tax purposes, as described in more detail under “Certain Material U.S. Federal Income Tax Consequences of the Distribution.”

When and How You Will Receive the Dividend

With the assistance of WFSS, WestRock expects to distribute Ingevity common stock on [•], 2016, the distribution date, to all holders of outstanding WestRock common shares as of the close of business on [•], 2016, the record date. WFSS, which currently serves as the transfer agent and registrar for WestRock’s common shares, will serve as the settlement and distribution agent in connection with the distribution and the transfer agent and registrar for Ingevity common stock.

If you own WestRock common shares as of the close of business on the record date, Ingevity’s common stock that you are entitled to receive in the distribution will be issued electronically, as of the distribution date, to you in direct registration form or to your bank or brokerage firm on your behalf. If you are a registered holder, WFSS will then mail you a direct registration account statement that reflects your shares of Ingevity common stock. If you hold your shares through a bank or brokerage firm, your bank or brokerage firm will credit your account for the shares. “Direct registration form” refers to a method of recording share ownership when no physical share certificates are issued to stockholders, as is the case in this distribution. If you sell WestRock common shares in the “regular-way” market up to and including the distribution date, you will be selling your right to receive shares of Ingevity common stock in the distribution.

Commencing on or shortly after the distribution date, if you hold physical share certificates that represent your WestRock common shares and you are the registered holder of the shares represented by those certificates, the distribution agent will mail to you an account statement that indicates the number of shares of Ingevity’s common stock that have been registered in book-entry form in your name.

Most WestRock stockholders hold their common shares through a bank or brokerage firm. In such cases, the bank or brokerage firm would be said to hold the shares in “street name” and ownership would be recorded on the bank or brokerage firm’s books. If you hold your WestRock common stock through a

37

bank or brokerage firm, your bank or brokerage firm will credit your account for the Ingevity common stock that you are entitled to receive in the distribution. If you have any questions concerning the mechanics of having shares held in “street name,” please contact your bank or brokerage firm.

Results of the Distribution

After the separation, Ingevity will be an independent, publicly traded company. The actual number of shares to be distributed will be determined by WestRock at the close of business on [•], 2016, the record date for the distribution, and will reflect any exercise of WestRock options between the date the WestRock board of directors declares the distribution and the record date for the distribution. The distribution will not affect the number of outstanding WestRock common shares or any rights of WestRock stockholders. WestRock will not distribute any fractional shares of Ingevity common stock.

Ingevity will enter into a separation and distribution agreement and other related agreements with WestRock before the distribution to effect the separation and provide a framework for Ingevity’s relationship with WestRock after the separation. These agreements will provide for the allocation between WestRock and Ingevity of WestRock’s assets, liabilities and obligations (including employee benefits, intellectual property and tax-related assets and liabilities) attributable to periods prior to Ingevity’s separation from WestRock and will govern the relationship between WestRock and Ingevity after the separation. For a more detailed description of these agreements, see “Certain Relationships and Related Person Transactions.”

Market for Common Stock

There is currently no public trading market for Ingevity’s common stock. Ingevity has applied to list its common stock on the NYSE under the symbol “NGVT”. Ingevity has not and will not set the initial price of its common stock. The initial price will be established by the public markets. Ingevity cannot predict the price at which its common stock will trade after the distribution. In fact, the combined trading prices, after the separation, of the shares of Ingevity common stock that each WestRock stockholder will receive in the distribution and the WestRock common shares held at the record date for the distribution may not equal the “regular-way” trading price of a WestRock share immediately prior to the distribution. The price at which Ingevity common stock trades may fluctuate significantly, particularly until an orderly public market develops. Trading prices for Ingevity common stock will be determined in the public markets and may be influenced by many factors. See “Risk Factors — Risks Related to Ingevity’s Common Stock.”

Trading Between the Record Date and Distribution Date

Beginning on or shortly before the record date for the distribution and continuing up to and including through the distribution date, WestRock expects that there will be two markets in WestRock common shares: a “regular-way” market and an “ex-distribution” market. WestRock common shares that trade on the “regular-way” market will trade with an entitlement to Ingevity common shares distributed pursuant to the separation. WestRock common shares that trade on the “ex-distribution” market will trade without an entitlement to Ingevity common stock distributed pursuant to the distribution. Therefore, if you sell WestRock common shares in the “regular-way” market up to and including through the distribution date, you will be selling your right to receive Ingevity common stock in the distribution. If you own WestRock common shares at the close of business on the record date and sell those shares on the “ex-distribution” market up to and including through the distribution date, you will receive the shares of Ingevity common stock that you are entitled to receive pursuant to your ownership as of the record date of the WestRock common shares.

Furthermore, beginning on or shortly before the record date for the distribution and continuing up to and including the distribution date, Ingevity expects that there will be a “when-issued” market in its common stock. “When-issued” trading refers to a sale or purchase made conditionally because the security has been authorized but not yet issued. The “when-issued” trading market will be a market for Ingevity common stock that will be distributed to holders of WestRock common shares on the distribution date. If you owned WestRock common shares at the close of business on the record date for the distribution, you would be entitled to Ingevity common stock distributed pursuant to the distribution. You may trade this

38

entitlement to shares of Ingevity common stock, without the WestRock common shares you own, on the “when-issued” market. On the first trading day following the distribution date, “when-issued” trading with respect to Ingevity common stock will end, and “regular-way” trading will begin.

Conditions to the Distribution

Ingevity has announced that the distribution will be effective at [•], Eastern time, on [•], which is the distribution date, provided that the following conditions shall have been satisfied (or waived by WestRock in its sole discretion):

•

the transfer of assets and liabilities from WestRock to Ingevity shall have been completed in accordance with the separation and distribution agreement;

•

(i) the private letter ruling received by WestRock from the IRS regarding certain U.S. federal income tax matters relating to the separation, distribution and certain related transactions shall not have been modified or revoked, and (ii) WestRock shall have received opinions from its outside tax advisors to the effect that the distribution, together with certain related transactions, will be generally tax-free for U.S. federal income tax purposes under Sections 355 and 368(a)(1)(D) of the Code;

•

the SEC shall have declared effective Ingevity’s registration statement on Form 10, of which this information statement forms a part, and this information statement in its final form shall have been made available to the WestRock stockholders;

•

all actions and filings necessary or appropriate under applicable U.S. federal, U.S. state or other securities laws shall have been taken and, where applicable, have become effective or been accepted by the applicable governmental authority;

•

the transaction agreements relating to the separation shall have been duly executed and delivered by the parties;

•

no order, injunction or decree issued by any court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the separation, distribution or any of the related transactions shall be in effect;

•

the shares of Ingevity common stock to be distributed shall have been accepted for listing on with NYSE subject to official notice of distribution; and

•

certain other conditions to be identified in an amendment to this information statement.

WestRock will have the sole and absolute discretion to determine (and change) the terms of, and whether to proceed with, the distribution and, to the extent it determines to so proceed, to determine the record date for the distribution and the distribution date and the distribution ratio. WestRock will also have sole discretion to waive any of the conditions to the distribution. WestRock does not intend to notify its stockholders of any modifications to the terms of the separation that, in the judgment of its board of directors, are not material. For example, the WestRock board of directors might consider material such matters as significant changes to the distribution ratio, the assets to be contributed or the liabilities to be assumed in the separation. To the extent that the WestRock board of directors determines that any modifications by WestRock materially change the material terms of the distribution, WestRock will notify WestRock stockholders in a manner reasonably calculated to inform them about the modification as may be required by law, by, for example, publishing a press release, filing a current report on Form 8-K or circulating a supplement to this information statement.

Reason for Furnishing this Information Statement

This information statement is being furnished solely to provide information to WestRock’s stockholders that are entitled to receive shares of our common stock in the distribution. This information statement is not, and is not to be construed as, an inducement or encouragement to buy, hold or sell any of

39

our securities. We believe that the information in this information statement is accurate as of the date set forth on the cover. Changes may occur after that date and neither WestRock nor we undertake any obligation to update the information except in the normal course of our respective public disclosure obligations.

Treatment of Equity Awards

Each WestRock equity-based incentive award held by Ingevity employees will remain a WestRock equity incentive award following the separation, with adjustments made to the number of shares covered and (if applicable) the per share exercise price of the award to maintain its intrinsic value. Unvested WestRock equity-based incentive awards held by our employees will vest to the extent provided in the employee matters agreement between WestRock and Ingevity. We are responsible for reimbursing WestRock on an ongoing basis for the cost of WestRock equity-based incentive awards held by our employees based on the fair market value of a WestRock share on the vesting date in the case of restricted stock units and performance stock units, and, in the case of stock options or stock appreciation rights, based on the difference between the per share exercise price and the fair market value of a WestRock share on the exercise date. WestRock and Ingevity will cooperate so that the value of any tax benefit realized by WestRock in connection with the vesting or exercise of WestRock equity awards held by Ingevity employees will be transferred to Ingevity.

See “Certain Relationships and Related Person Transactions — The Employee Matters Agreement” for more information.

40

DIVIDEND POLICY

The payment and amount of any dividend will be subject to the sole discretion of our post-distribution, independent board of directors and will depend upon many factors, including our financial condition and prospects, our capital requirements and access to capital markets, covenants associated with certain of our debt obligations, legal requirements and other factors that our board of directors may deem relevant, and there can be no assurances that we will pay a dividend or continue to pay a dividend in the future.

41

CAPITALIZATION

The following table, which you should read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Ingevity,” “Unaudited Pro Forma Combined Financial Statements” and the historical combined financial statements and accompanying notes included elsewhere in this Information Statement, sets forth our cash and cash equivalents and combined capitalization as of December 31, 2015 on an historical basis and on a pro forma basis after giving effect to the planned transactions to be effected prior to the distribution of Ingevity Corporation common stock to the stockholders of WestRock.

​	As of December 31, 2015
In millions	Historical			Pro Forma
Cash and cash equivalents	​	$	32	​	$	50
Debt, including current and long-term:	​	​	​	​
Notes payable and current maturities of long-term debt	​	​	9	​	​	9
Long-term debt due after one year	​	​	80	​	​	576
Total debt	​	​	89	​	​	585
Equity:	​			​
Common stock	​	​	—	​	​	—
Capital in excess of par value	​	​	—	​	​	126
Net parent investment	​	​	534	​	$	—
Accumulated other comprehensive (loss) income	​	​	(17)	​	​	(17)
Noncontrolling interests	​	​	5	​	​	5
Total equity	​	​	522	​	​	114
Total capitalization	​	$	611	​	$	699

42

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

The following Unaudited Pro Forma Combined Financial Statements are derived from the historical combined financial statements of Ingevity, prepared in accordance with U.S. generally accepted accounting principles, which are included elsewhere in this information statement.

The Unaudited Pro Forma Combined Statement of Operations for the fiscal year ended December 31, 2015 give effect to the distribution as if it had occurred on January 1, the first day of fiscal year 2015. The Unaudited Pro Forma Combined Balance Sheet as of December 31, 2015 gives effect to the distribution as if it had occurred on December 31, 2015. These Unaudited Pro Forma Combined Financial Statements include adjustments required by SEC Staff Accounting Bulletin Topic 1:B-3 and Article 11 of SEC Regulation S-X, including the following:

a.

the inclusion of total long-term indebtedness ranging between $555 million and $605 million with a weighted-average interest rate between 2.7% and 3.1%;

b.

the expected distribution to WestRock ranging between $375 million and $500 million;

c.

the pro-rata distribution of approximately [•] million shares of Ingevity common stock to WestRock stockholders; and

d.

the net assets related to a defined benefit pension plan and the liability related to a non-qualified retirement plan that were not included in the Ingevity Audited Combined Financial Statements.

Ingevity’s historical combined financial statements included elsewhere in this information statement include allocations for certain expenses and support functions historically provided by WestRock, such as business shared services, and other selling, general and administrative costs that benefit Ingevity. Effective with the separation, we will assume responsibility for all of these functions and related costs. Ingevity will incur incremental costs as an independent public company, including costs to replace services previously provided by WestRock as well as other stand-alone costs. In total, we estimate that these costs will range from $2 million to $4 million before-tax annually, over and above amounts currently included in the Unaudited Pro Forma Combined Statement of Operations. Due to the scope and complexity of these activities, the amount and timing of these incremental costs could vary and, therefore, are not included within the Unaudited Pro Forma Combined Financial Statements.

After the separation, subject to the terms of the Separation and Distribution Agreement, all costs and expenses related to ongoing support of a stand-alone company, including certain one-time separation costs incurred after the distribution date, will be our responsibility. No pro forma adjustments have been made to our statement of operations to reflect these costs.

43

Ingevity Corporation

Unaudited Pro Forma Combined Statement of Operations
Year Ended December 31, 2015
(In millions except share and per share data)

​	Ingevity		Pro Forma Adjustments			​	Pro Forma
Net sales	​	968	​	$	—	​	​	$	968
Cost of sales	​	687	​	​	3	(A)	​	​	690
Gross profit	​	281	​	​	(3)	​	​	​	278
Selling, general and administrative expenses	​	114	​	​	7	(A)	​	​	121
Separation costs	​	17	​	​	(17)	(B)	​	​	—
Interest expense	​	21	​	​	(3)	(C)	​	​	18
Other (income) expense, net	​	(9)	​	​	—	​	​	​	(9)
Income before income taxes	​	138	​	​	10	​	​	​	148
Provision for income taxes	​	53	​	​	—	(D)	​	​	53
Net income	​	85	​	​	10	​	​	​	95
Less: Net income (loss) attributable to noncontrolling interests, net of taxes	​	5	​	​	—	​	​	​	5
Net income attributable to the company	​	80	​	$	10	​	​	$	90
Unaudited pro forma earnings per share:	​		​			​	​
Basic	​	​	​	​	​	(E)	​	$	—
Diluted	​	​	​	​	​	(F)	​	$	—
Average number of shares used in calculating unaudited pro forma earnings per share:	​		​			​	​
Basic	​	​	​	​	​	(E)	​	​	—
Diluted	​	​	​	​	​	(F)	​	​	—

See accompanying notes to Unaudited Pro Forma Combined Statements of Operations.

44

Notes to Unaudited Pro Forma Combined Statements of Operations

(A)

We have entered into agreements to obtain audit and certain compliance functions as a stand-alone public company as well as compensation agreements with certain members of our executive team. Prior to the completion of the separation, we will also enter into agreements to obtain insurance coverage according to quotations we have received based on our individual loss history, credit profile and selected insurance coverage. These expenses will represent recurring costs in excess of the amounts historically allocated to Ingevity.

In addition, at the completion of the separation we will enter into a new raw material supply agreement with WestRock for the purchase of black liquor soap skimmings (“BLSS”) and crude tall oil (“CTO”). We have historically obtained BLSS and CTO from WestRock under previously existing supply agreements. We have evaluated the new agreement and its impact on our pro forma income statement. The pro forma adjustment also includes incremental costs of less than $1 million associated with this new agreement calculated by applying the new agreement’s pricing and incentive terms to the actual purchased volumes in 2015.

(B)

Represents the elimination of  $17 million of non-recurring expenses directly related to transaction costs incurred during the year ended December 31, 2015 in connection with the separation from WestRock, primarily related to professional fees associated with separation activities within the finance, tax and legal functions.

(C)

Represents adjustments to interest expense and amortization of debt issuance costs related to our target pro forma long-term indebtedness net of pro forma interest income. As described in balance sheet Note (D), we expect to incur total long-term indebtedness ranging between $555 million and $605 million. We expect the weighted-average interest rate on the debt to be between 2.7% and 3.1%. For purposes of this calculation, we assumed a target long-term indebtedness of approximately $580 million consisting of borrowings under a secured term loan facility, amounts drawn on a secured revolving credit facility, and existing debt as well as $4 million of debt issuance costs and a weighted-average interest rate of 2.9%. Interest expense may be higher or lower if our actual interest rate or credit ratings change. A change in assumed interest rates of 12.5 basis points would change the pro forma annual interest expense by $0.6 million. The below table presents the impact on pro forma interest expense:

In millions	Year ended December 31, 2015
Pro forma interest expense on assumed pro forma indebtedness within interest expense:	​	$	18

(D)

After the effects of the pro forma adjustments, our applicable effective tax rate for the year ended December 31, 2015 is 36%. The effective tax rate of Ingevity could be different (either higher or lower) depending on activities subsequent to the distribution.

(E)

The estimated number of shares of Ingevity common stock used to compute basic earnings per share is based on the weighted-average WestRock basic shares outstanding for the year ended December 31, 2015 assuming an assumed distribution ratio of one share of Ingevity common stock for every [•] shares of WestRock common stock.

(F)

The unaudited pro forma diluted earnings per common share and pro forma weighted-average diluted shares outstanding give effect to the potential dilution from common shares related to stock-based awards granted to our employees under WestRock’s stock-based compensation programs. This calculation may not be indicative of the dilutive effect that will actually result from Ingevity’s stock-based awards issued in connection with the adjustment of outstanding WestRock stock-based awards or the grant of new stock-based awards. The number of dilutive shares of common stock underlying Ingevity’s stock-based awards issued in connection with the adjustment of outstanding WestRock stock-based awards will not be determined until the distribution date or shortly thereafter. For the purposes of preparing the unaudited pro forma diluted earnings per common share and pro forma weighted-average diluted shares, we believe an estimate based on applying the distribution ratio described in Note (E) above to the weighted-average WestRock diluted shares outstanding for the year ended December 31, 2015 provides a reasonable approximation of the potential dilutive effect of the stock-based awards.

45

Ingevity Corporation

Unaudited Pro Forma Combined Balance Sheet
As of December 31, 2015
(In millions except share and per share data)

​	Ingevity			Pro Forma Adjustments			​	Pro Forma
Assets	​			​			​	​
Cash and cash equivalents	​	$	32	​	$	18	(A), (D)	​	$	50
Accounts receivable, net	​	​	96	​	​	—	​	​	​	96
Inventories, net	​	​	151	​	​	—	​	​	​	151
Prepaid and other current assets	​	​	20	​	​	—	​	​	​	20
Current assets	​	​	299	​	​	18	​	​	​	317
Property, plant and equipment, net	​	​	438	​	​	—	​	​	​	438
Goodwill	​	​	12	​	​	—	​	​	​	12
Other intangibles, net	​	​	10	​	​	—	​	​	​	10
Restricted cash	​	​	—	​	​	80	(D)	​	​	80
Other assets	​	​	23	​	​	5	(E)	​	​	28
Total assets	​	$	782	​	$	103	​	​	$	885
Liabilities and Equity	​			​			​	​
Accounts payable	​	$	65	​	$	—	​	​	$	65
Accounts payable due to WestRock	​	​	—	​	​	9	(B)	​	​	9
Accrued expenses	​	​	13	​	​	—	​	​	​	13
Accrued payroll and employee benefits	​	​	10	​	​	—	​	​	​	10
Notes payable	​	​	9	​	​	—	​	​	​	9
Current liabilities	​	​	97	​	​	9	​	​	​	106
Long-term debt	​	​	80	​	​	496	(D)	​	​	576
Deferred income taxes	​	​	76	​	​	2	(C)	​	​	78
Other liabilities	​	​	7	​	​	4	(E)	​	​	11
Total liabilities	​	​	260	​	​	511	​	​	​	771
Commitments and contingencies	​			​			​	​
Net parent investment/stockholders’ equity	​	$	534	​	$	(534)	(A), (B), (E), (F)	​	$	—
Common stock	​	​	—	​	​	—	(G)	​	​	—
Capital in excess of par value	​	​	—	​	​	126	(G)	​	​	126
Accumulated other comprehensive (loss) income	​	​	(17)	​	​	—	​	​	​	(17)
Total net parent investment/stockholders’ equity before noncontrolling interests	​	​	517	​	​	(408)	​	​	​	109
Noncontrolling interests	​	​	5	​	​	—	​	​	​	5
Total net parent investment/stockholders’ equity and noncontrolling interests	​	​	522	​	​	(408)	​	​	​	114
Total liabilities and net parent investment/stockholders’ equity	​	$	782	​	$	103	​	​	$	885

See accompanying notes to Unaudited Pro Forma Combined Balance Sheet.

46

Notes to Unaudited Pro Forma Combined Balance Sheet

(A)

Reflects the proceeds of the debt described in balance sheet Note (D) less the anticipated cash distribution to WestRock and restricted cash described in balance sheet Note (D). We expect the distribution to WestRock to be a cash payment ranging between $375 million and $500 million in total value. For purposes of preparing the unaudited pro forma combined financial statements, we have assumed that we will distribute a cash payment of  $398 million.

(B)

Reclassification of accounts payable due to WestRock from net parent investment to reflect the commercial agreement between the parties. Additionally, amount includes expected costs incurred by WestRock associated with equity-based incentive awards held by our employees. See “Treatment of Equity Awards” included within “The Separation” Section on page 40 within this Information Statement for more information.

(C)

Reflects the tax effects of the pro forma adjustments at the applicable income tax rate. The effective tax rate of Ingevity could be different (either higher or lower) depending on activities subsequent to the distribution. The impacts of pro forma adjustments on long-term deferred tax assets and liabilities were offset against existing long-term deferred tax assets and liabilities reflected in our historical Combined Balance Sheet based on jurisdiction. The offset to this adjustment is net parent investment.

(D)

We expect total pro forma long-term indebtedness ranging between $555 million and $605 million to be incurred by Ingevity. Proceeds from our pro forma long-term indebtedness will be used to fund our distribution to WestRock described in balance sheet Note (A), a deposit ranging between $50 million and $80 million will be held in escrow restricted for repayment of the portion of our existing debt that we will retain, and cash needs of the business. For purposes of preparing the unaudited pro forma combined financial information, we have assumed an amount to be held in escrow of  $80 million, a target long-term indebtedness of approximately $580 million, consisting of borrowings under a secured term loan facility, amounts drawn on a secured revolving credit facility and existing debt, as well as $4 million of debt issuance costs. The debt issuance costs are shown as a reduction of the outstanding long-term debt as of December 31, 2015, consistent with the treatment prescribed under Accounting Standards Update (ASU) No. 2015-03, “Interest — Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs.” The Company adopted this new accounting standard on January 1, 2016.

(E)

Reflects the addition of net pension plan assets and non-qualified retirement plan liabilities that will be transferred to Ingevity by WestRock as part of the separation. These net pension plan assets and non-qualified retirement plan liabilities are excluded from the historical Combined Balance Sheet. The benefit plan expenses associated with these liabilities are included in the Ingevity’s historical Combined Statements of Operations. The offset to this adjustment is net parent investment.

(F)

Reflects the pro forma recapitalization of our equity. As of the distribution date, WestRock’s net investment in our business will be exchanged to reflect the distribution of our shares of common stock to WestRock stockholders. WestRock stockholders will receive shares of our common stock based on an assumed distribution ratio of one share of Ingevity common stock for every [•] shares of WestRock common stock.

(G)

Represents the elimination of WestRock’s net investment and adjustments to capital in excess of par to reflect the following:

Reclassification of WestRock’s net investment	$	534
Distribution of cash to WestRock as described in Note A	​	(398)
Accounts payable due to WestRock under commercial agreement described in balance sheet Note B	​	(9)
Additional deferred tax assets and liabilities described in balance sheet Note C	​	(2)
Addition of net pension plan assets and retirement plan liability described in balance sheet Note E	​	1
Total net parent investment/shareholders’ equity	​	126
Shares of Ingevity common stock	​	—
Total capital in excess of par value	$	126

47

SELECTED HISTORICAL COMBINED FINANCIAL INFORMATION OF INGEVITY

The following table sets forth selected historical financial information of Ingevity. The selected combined financial information as of December 31, 2015 and 2014 and for the years ended December 31, 2015, 2014 and 2013 are derived from the company’s audited combined financial statements that are included within this information statement beginning on page F-1.

The combined financial statements as of December 31, 2015, 2014 and 2013 for the years ended 2015, 2014, 2013 and 2012 were audited by an independent registered public accounting firm. Information as of December 31, 2011 and 2010 and for the years ended December 31, 2011 and 2010 are unaudited and have been prepared on a consistent basis with the audited combined financial statements. The selected historical financial information below should be read in conjunction with the combined financial statements and related notes that are included in this proxy statement/ prospectus-information statement on pages noted above. The historical results do not necessarily indicate the results expected for any future period.

The selected combined financial data presented below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Ingevity” and the combined financial statements and accompanying notes included elsewhere in this information statement.

​

Years ended December 31,

In millions

2015

2014

2013

2012

2011

2010

Statement of Operations Data:

​

​

​

​

​

​

Net sales

​

$

968

​

$

1,041

​

$

980

​

$

939

​

$

811

​

$

676

Gross Profit

​

​

281

​

​

323

​

​

295

​

​

297

​

​

260

​

​

182

Interest Expense

​

​

21

​

​

16

​

​

13

​

​

12

​

​

12

​

​

12

Income before income taxes

​

​

138

​

​

203

​

​

184

​

​

189

​

​

173

​

​

114

Net income

​

​

85

​

​

133

​

​

118

​

​

122

​

​

114

​

​

76

Net income attributable to the company

​

​

80

​

​

129

​

​

119

​

​

119

​

​

110

​

​

73

Unaudited pro forma earnings per share:

​

​

​

​

​

​

Basic(a)

​

​

—

​

​

​

​

​

Diluted(a)

​

​

—

​

​

​

​

​

Balance Sheet Data (at period end):

​

​

​

​

​

​

Working capital (Current Assets Less Current Liabilities)

​

$

202

​

$

132

​

$

122

​

$

110

​

$

85

​

$

69

Current ratio

​

​

3.1

​

​

1.9

​

​

2.2

​

​

2.1

​

​

2.0

​

​

1.9

Property, plant and equipment, net

​

​

438

​

​

410

​

​

326

​

​

300

​

​

265

​

​

257

Total assets

​

​

782

​

​

718

​

​

593

​

​

550

​

​

484

​

​

451

Capital lease obligations due after one year

​

​

80

​

​

86

​

​

86

​

​

86

​

​

86

​

​

86

Total equity

​

​

522

​

​

420

​

​

328

​

​

294

​

​

242

​

​

213

Other Data:

​

​

​

​

​

​

Capital expenditures

​

​

102

​

​

101

​

​

63

​

​

40

​

​

29

​

​

22

Depreciation and amortization expense

​

​

35

​

​

33

​

​

33

​

​

32

​

​

29

​

​

30

(a)

We have not yet finalized the distribution ratio of shares of Ingevity common stock for shares of WestRock common stock. We intend to update our pro forma basic and diluted earnings per share in an amendment to this information statement.

48

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS OF INGEVITY

The following discussion and analysis of our financial condition and results of operations and quantitative and qualitative disclosures about market risk should be read in conjunction with our historical combined financial statements and accompanying notes and the unaudited pro forma combined financial statement, each included elsewhere in this Information Statement.

The financial information discussed below and included elsewhere in this Information Statement may not necessarily reflect what our financial condition, results of operations or cash flow would have been had we been a stand-alone company during the periods presented or what our financial condition, results of operations and cash flows may be in the future.

Introduction

Management’s discussion and analysis of Ingevity’s results of operations and financial condition (“MD&A”) is provided as a supplement to the Annual Combined Financial Statements and the related notes included elsewhere herein to help provide an understanding of our financial condition, changes in financial condition and results of our operations.

Forward-looking statements are based on certain assumptions and expectations of future events which may not be accurate or realized. Forward-looking statements also involve risks and uncertainties, many of which are beyond Ingevity’s control. Some of the important factors that could cause Ingevity’s actual results to differ materially from those projected in any such forward-looking statements are set forth in the section entitled “Risk Factors” included within this Information Statement.

Separation and Distribution

Prior to the separation, we operated as a reporting segment of WestRock, which was formed upon the combination (the “Merger”) of MWV and Rock-Tenn. The Merger was completed on July 1, 2015.

Prior to the Merger, we operated as a reporting segment of MWV. On January 8, 2015, MWV announced that it intended to separate its specialty chemicals business through a pro rata distribution of common stock to its stockholders. Upon the completion of the Merger, WestRock announced its continued plans to complete the separation.

On [•], 2016, the WestRock board of directors approved the distribution of all of the issued and outstanding shares of Ingevity common stock on the basis of  [•] share[s] of Ingevity common stock for every [•] share[s] of WestRock held as of the close of business on the record date of  [•], 2016.

Overview

Ingevity is a leading global manufacturer of specialty chemicals and high performance carbon materials. Ingevity participates in attractive, higher growth sectors of the global specialty chemicals industry. Our specialty chemicals products serve as critical inputs used in a variety of high performance applications, primarily in three product families: pavement technologies, oilfield technologies and industrial specialties. We are also the leading global manufacturer of activated carbon used in gasoline vapor emission control systems in cars, trucks, motorcycles and boats, with over 750 million units installed globally over the 30-year history of this business. We report in two business segments, Performance Chemicals and Performance Materials.

The Performance Chemicals segment develops, manufactures and sells a wide range of specialty chemicals primarily derived from co-products of the kraft pulping process. Products include performance chemicals derived from pine chemicals used in asphalt paving, adhesives, agrochemical dispersants, publication inks, lubricants, petroleum and other diverse industrial uses. The Performance Chemicals segment serves customers globally from its manufacturing operations in the United States and Brazil.

The Performance Materials segment primarily produces automotive carbon products used in gasoline vapor emission control systems in cars, trucks, motorcycles and boats. The automotive carbon products capture gasoline vapor emissions that would otherwise be released into the atmosphere as volatile organic

49

compounds (“VOCs”) which contain hazardous air pollutants. Ingevity’s automotive carbon products are typically part of vehicle-based control systems which capture gasoline vapor emissions. The stored vapors are then largely purged from the carbon and directed to the engine where they are used as supplemental power for the vehicle. The Performance Materials segment serves customers globally from its manufacturing operations in the United States and China.

Basis of Presentation

References to Ingevity’s historical business and operations refer to the business and operations of the specialty chemicals business of WestRock Company, or prior to the merger of MWV and Rock-Tenn, which was completed on July 1, 2015, the Specialty Chemicals Business of MWV. The historical business and operations have been or will be transferred to Ingevity in connection with the separation and distribution.

These combined financial statements include all majority-owned or controlled entities of WestRock related to its specialty chemicals business (the “company”), and all significant inter-company transactions have been eliminated. The company does not operate as a separate, stand-alone entity and is comprised of certain WestRock wholly owned legal entities for which the company is the sole business and components of legal entities in which the company operates in conjunction with other WestRock businesses. For purposes of this discussion, the term “WestRock” herein also refers to the legacy operations of MWV prior to the consummation of the Merger.

These combined financial statements include allocated expenses associated with centralized WestRock support functions including legal, accounting, tax, treasury, internal audit, information technology, human resources and other services. The costs associated with these functions generally include all payroll and benefit costs as well as related overhead costs. These combined financial statements also include allocated costs associated with WestRock’s office facilities, corporate insurance coverage and medical, pension, post-retirement and other health plan costs attributed to the company’s employees participating in WestRock’s sponsored plans. Allocations are generally based on a number of utilization measures including employee count and proportionate effort. In situations in which determinations based on utilization are impracticable, WestRock and the company use other methods and criteria such as net sales which are believed to result in reasonable estimates of costs attributable to the company. All such amounts have been assumed to have been immediately settled by the company to WestRock in the period in which the costs were recorded in the combined financial statements. Such amounts are included in net cash provided by operating activities in the combined statements of cash flows.

The company and WestRock management believes the related-party allocations included in these combined financial statements have been made on a reasonable basis. However, these combined financial statements may not necessarily be indicative of the results of operations that would have been obtained if the company had operated as a separate entity during the periods presented. Actual costs that may have been incurred if the company had been a stand-alone business would depend on a number of factors, including organizational structure and what functions were outsourced or performed by employees, as well as strategic decisions made in areas such as information technology and infrastructure. Consequently, Ingevity’s future earnings if operated as an independent business could include items of income and expense that are materially different from what is included in these Combined Statements of Operations. Accordingly, the combined financial statements for the periods presented are not necessarily indicative of the company’s future results of operations, financial position and cash flows.

Use of Non-GAAP Financial Measures

Ingevity has presented certain financial measures, defined below, which have not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and has provided a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP. These financial measures are not meant to be considered in isolation or as a substitute for the most directly comparable financial measure calculated in accordance with GAAP. The company believes these non-GAAP measures provide investors, potential investors, securities analysts and others with useful information to evaluate the performance of the business, because such measures, when viewed together with our financial results computed in accordance with GAAP, provide a more complete understanding of the factors and trends affecting our historical financial performance and projected future results.

50

Ingevity uses the following non-GAAP measures: Combined Adjusted EBITDA and Segment EBITDA. Combined Adjusted EBITDA is defined as net income plus provision for income taxes, interest expense, depreciation and amortization, separation costs and restructuring and other (income) charges. Segment EBITDA is defined as segment profit plus depreciation and amortization.

These non-GAAP measures are not intended to replace the presentation of financial results in accordance with GAAP and investors should consider the limitations associated with these non-GAAP measures, including the potential lack of comparability of these measures from one company to another. Reconciliations of Combined Adjusted EBITDA and Segment EBITDA to net income and segment profit, respectively, are set forth within this section.

Combined Adjusted EBITDA

​	Years ended December 31,
In millions	2015			2014			2013
Net income	​	$	85	​	$	133	​	$	118
Provision for income taxes	​	​	53	​	​	70	​	​	66
Interest expense	​	​	21	​	​	16	​	​	13
Depreciation and amortization	​	​	35	​	​	33	​	​	33
Separation costs	​	​	17	​	​	—	​	​	—
Restructuring and other (income) charges	​	​	(8)	​	​	(5)	​	​	(3)
Combined Adjusted EBITDA	​	$	203	​	$	247	​	$	227

Segment EBITDA

Performance Chemicals

​	Years ended December 31,
​	2015			2014			2013
Segment Profit	​	$	87	​	$	124	​	$	126
Depreciation and amortization	​	​	24	​	​	23	​	​	23
Segment EBITDA	​	$	111	​	$	147	​	$	149

Performance Materials

​	Years ended December 31,
​	2015			2014			2013
Segment Profit	​	$	81	​	$	90	​	$	68
Depreciation and amortization	​	​	11	​	​	10	​	​	10
Segment EBITDA	​	$	92	​	$	100	​	$	78

Drivers of Demand and Key Factors Affecting Profitability

Drivers of demand and key factors affecting our profitability differ by segment. In Performance Chemicals, drivers of demand are specific to the various markets. In pavement technologies, demand is influenced by long-term secular growth trends in infrastructure preservation and development. In the United States, for example, which has a very established road system, the trend towards preservation of existing roads compared to construction of new roads has been positive for Ingevity due to our development of innovative chemistries for such applications. Additionally, secular trends in paving are driving the use of more recycled content in roads to both lower construction costs and prolong the life of the road. Ingevity has developed innovative chemistries for these applications as well. In oilfield technologies, demand is influenced by growth in unconventional oil exploration, drilling and production. Current oil prices and the corresponding reduction in exploration, drilling and production have negatively impacted demand for our oilfield technologies products, though there are opportunities for us to continue to innovate and provide innovative chemistries for our customers in the more challenging economic environment as our products aid in reducing the net cost of producing a barrel of oil. Demand in the

51

industrial specialties market is driven by levels of global agricultural activity, volume needs from the global graphic arts industry and general industrial production that requires adhesives, metalworking and fuel additives. Global macroeconomic demand factors as well as the strengthening of the U.S. dollar relative to the Euro have put pressure on demand in this market.

Profitability in Performance Chemicals is impacted by sales volume, price and mix of products sold, a secure and stable supply of CTO at appropriate market prices, hydrocarbon-based raw material prices, refinery and post refinery asset operating rates, foreign exchange rates, level of expense investment to serve and develop innovative solutions for our customers and successfully serving new and existing markets that value the company’s ability to meet specialized, complex customer needs. Headwinds in foreign exchange, specifically the strengthening of the U.S. dollar relative to the Euro, as well as headwinds in oil pricing as it relates to our sales in that market and pressure in our industrial specialties end markets have been partially offset by positive demand in our pavement technologies market, stable supply and declining price of CTO, and price declines in other, hydrocarbon based raw materials corresponding to reduced oil prices.

In Performance Materials, demand is a function of global vehicle sales and the impact that increasingly stringent emission standards have on the volume and type of products our customers utilize in their gasoline vapor emission control systems. Increased global vehicle sales and continuing regulatory trends, especially in the NAFTA region, has had a positive effect on our sales and product mix in our automotive market and will continue to positively impact our results. Global macroeconomic weakness in the near term could have a negative impact on vehicle sales and thus our automotive product sales.

Profitability in Performance Materials is impacted by sales volume, price and mix of products sold, the price of raw materials, primarily sawdust and phosphoric acid, the cost of natural gas used to fuel the carbon activation process, the ability to control the yields and technical characteristics of our products during manufacturing, foreign exchange rates and our level of expense investment to serve and develop innovative solutions for our customers. Growth in global vehicle sales and more stringent regulatory standards positively impact volumes, mix and content per vehicle. The cost of recent reinvestment in the business, primarily the expansion of our manufacturing facilities and the greenfield facility startup in China, has partially offset the favorable profit impact of this growth. We expect favorable profitability trends to continue now that the greenfield facility is commercialized.

Business Outlook

We expect revenue to decline in 2016 compared to 2015, as ongoing negative pricing and mix issues in the Performance Chemicals’ industrial specialties and oilfield technologies product families, and foreign exchange impacts outweigh volume and price gains in Performance Materials and in Performance Chemicals’ pavement technologies market. We expect our 2016 Combined Adjusted EBITDA to be flat to slightly negative compared to 2015. This is driven by expected incremental costs to be incurred as an independent public company, including costs to replace services previously provided by WestRock as well as other stand-alone costs, and ongoing pressure on pricing and mix in our Performance Chemicals’ industrial specialties and oilfield technologies segments. Offsetting these additional incremental public company costs are cost savings driven by a series of implemented cost reduction initiatives and incremental margin due to growth in our Performance Materials’ and Performance Chemicals’ pavement technologies markets. The cost reduction initiatives include reductions in selling, general and administrative costs, supply chain spending reduction initiatives, plant spending reductions, and control of costs related to being a stand-alone, public company. Additionally we will begin to see benefits from our major capital expansion projects that took place in 2014 and 2015. As these projects are reaching completion in early 2016, we expect a reduction in capital spending versus the prior two years.

Performance Chemicals

Demand in the industrial specialties market is driven by levels of global agricultural activity, volume needs from the global graphic arts industry, and general industrial production that requires adhesives, metalworking and fuel additives. Global macroeconomic demand factors as well as the strengthening of the U.S. dollar relative to the Euro have put pressure on demand in this market.

Demand for our oilfield technologies services and products is particularly sensitive to the level of exploration, development and production activity of, and the corresponding capital spending by, oil and

52

natural gas companies, including national oil companies. The level of exploration, development and production activity is directly affected by trends in oil and natural gas prices, which historically have been volatile. Crude oil prices have declined significantly since 2014, with West Texas Intermediate (WTI) oil spot prices declining from a high of  $108 per barrel in June 2014 to a low of  $27 per barrel in January 2016, a level which has not been experienced since 2003, and pricing is not forecasted to improve significantly during 2016. Any prolonged low pricing environment for oil and natural gas is likely to result in reduced demand for our oilfield technology products, which may have a material adverse effect on our results of operations.

Demand in pavement technologies is influenced by long-term secular growth trends in infrastructure preservation and development. In the United States, for example, which has a very established road system, the trend towards preservation of existing roads compared to construction of new roads has been positive for Ingevity due to our development of innovative chemistries for such applications. Additionally, secular trends in paving are driving the use of more recycled content in roads to both lower construction costs and prolong the life of the road. Ingevity has developed innovative chemistries for these applications as well.

Profitability in Performance Chemicals is impacted by sales volume, price and mix of products sold, a secure and stable supply of CTO at appropriate market prices, hydrocarbon-based raw material prices, refinery and post-refinery asset operating rates, foreign exchange rates, level of expense investment to serve and develop innovative solutions for our customers and successfully serving new and existing markets that value the company’s ability to meet specialized, complex customer needs. Headwinds in foreign exchange, specifically the strengthening of the U.S. dollar relative to the Euro, as well as headwinds in oil pricing as it relates to our sales in that market and pressure in our industrial specialties end markets have been partially offset by positive demand in our pavement technologies market, stable supply and declining price of CTO, and price declines in other hydrocarbon-based raw materials corresponding to reduced oil prices.

Performance Materials

Demand is a function of global vehicle sales and the impact that increasingly stringent emission standards have on the volume and type of products our customers utilize in their gasoline vapor emission control systems. Increased global vehicle sales and continuing regulatory trends, especially in the NAFTA region, has had a positive effect on our sales and product mix in our automotive market and will continue to positively impact our results. Global macroeconomic weakness in the near term could have a negative impact on vehicle sales and thus our automotive product sales.

Profitability in Performance Materials is impacted by sales volume, price and mix of products sold, the price of raw materials, primarily sawdust and phosphoric acid, the cost of natural gas used to fuel the carbon activation process, the ability to control the yields and technical characteristics of our products during manufacturing, foreign exchange rates and our level of expense investment to serve and develop innovative solutions for our customers. Growth in global vehicle sales and more stringent regulatory standards positively impact volumes, mix and content per vehicle. The cost of recent reinvestment in the business, primarily the expansion of our manufacturing facilities and the greenfield facility startup in China, and headwinds in foreign exchange, specifically the strengthening of the U.S. dollar relative to the Japanese Yen, has partially offset the favorable profit impact of this growth. We expect favorable profitability trends to continue now that the greenfield facility is commercialized.

53

Results of Operations

For the Years Ended December 31, 2015, 2014 and 2013

The following table presents the combined statements of operations of the company for the years ended December 31, 2015, 2014 and 2013 as reported in accordance with accounting principles generally accepted in the United States.

​	Years ended December 31,
In millions	2015			2014			2013
Net sales	​	$	968	​	$	1,041	​	$	980
Cost of sales	​	​	687	​	​	718	​	​	685
Gross Profit	​	​	281	​	​	323	​	​	295
Selling, general and administrative expenses	​	​	114	​	​	112	​	​	103
Separation costs	​	​	17	​	​	—	​	​	—
Interest expense	​	​	21	​	​	16	​	​	13
Other (income) expense, net	​	​	(9)	​	​	(8)	​	​	(5)
Income before income taxes	​	​	138	​	​	203	​	​	184
Provision for income taxes	​	​	53	​	​	70	​	​	66
Net income	​	​	85	​	​	133	​	​	118
Less: Net income (loss) attributable to noncontrolling interests, net of taxes	​	​	5	​	​	4	​	​	(1)
Net income attributable to the company	​	$	80	​	$	129	​	$	119
Combined Adjusted EBITDA(1)	​	$	203	​	$	247	​	$	227

(1)

Combined Adjusted EBITDA is defined as net income plus provision for income taxes, interest expense, depreciation and amortization, separation costs and restructuring and other (income) charges.

Comparison of Years Ended December 31, 2015 and 2014

The table below shows the 2015 combined net sales and percentage variances from 2014:

In millions

2015 Net Sales

Percentage change vs. prior year

Currency effect

Price/Mix

Volume

Other

Combined

​

$

968

​

(7)%

​

(3)%

​

(2)%

​

(2)%

​

—%

Sales were $968 million and $1,041 million for the years ended December 31, 2015 and 2014, respectively. The sales decrease in 2015 was driven by foreign exchange of  $31 million (three percent of sales) due to the devaluation of the Euro, Japanese Yen and Brazilian Real versus the U.S. Dollar and unfavorable pricing and mix of  $24 million in performance chemicals (two percent of sales) in the rubber, publication inks, and adhesives markets and certain industrial specialties and oilfield technologies products due to pricing pressure from competitive materials partially offset by favorable pricing and mix of  $5 million in performance materials resulting in an overall reduction in sales by two percent as compared to 2014. Overall, volume declined $23 million (two percent of sales) due to volume declines in process purification markets, oilfield and certain industrial specialties markets that were partially offset by volume growth in high value strategic markets for pavement due to sales penetration and market growth and performance materials due to strength in the NAFTA automotive market and continued regulatory trends.

Cost of sales were $687 million (71% of sales) and $718 million (69% of sales) for the years ended December 31, 2015 and 2014, respectively. The $31 million decrease in cost of sales was due to a decrease of $18 million due to a two percent decline in sales volume, a decrease of  $17 million due to the devaluation of the Euro and Brazilian Real versus the U.S. Dollar, and $20 million due to lower input costs related to CTO, other petroleum-based raw materials, freight and energy. These decreases were partially offset by $24 million due to unfavorable productivity related to significantly higher planned maintenance outages, particularly in the fourth quarter, higher costs related to the startup of the new Performance Materials plant in China, higher depreciation and amortization with higher capital expenditures, and other manufacturing related spending.

54

Selling, general and administrative expenses were $114 million (12% of sales) and $112 million (11% of sales) for the years ended December 31, 2015 and 2014, respectively. The increase of  $2 million was primarily driven by higher employee costs compared to 2014.

Separation costs of  $17 million were one-time expenses related to the spin-off of the business from WestRock. See Note 12 within the Combined Financial Statements within this Information Statement for more information.

Interest expense was $21 million and $16 million for the years ended December 31, 2015 and 2014, respectively. Interest expense consisted of  $8 million and $6 million related to capital lease obligations and $13 million and $10 million in allocated interest expense from WestRock for the years ended December 31, 2015 and 2014, respectively.

Other income, net was $9 million and $8 million for the years ended December 31, 2015 and 2014, respectively, and consisted of the following:

​	Years ended December 31,
In millions	2015			2014
Foreign currency exchange losses (income)	​	$	1	​	$	1
Royalty and sundry income(1)	​	​	(2)	​	​	(4)
Restructuring and other (income) charges, net(2)	​	​	(8)	​	​	(5)
Other (income) expense, net	​	$	(9)	​	$	(8)

(1)

Primarily represents royalty income for technology licensing.

(2)

See below for more information regarding the company’s restructuring and other (income) charges, net.

​	Years ended December 31,
In millions	2015			2014
Restructuring and other (income) charges, net	​			​
Gain on sale of assets and businesses	​	$	(12)	​	$	(5)
Insurance and legal settlements	​	​	—	​	​	—
Asset write-downs	​	​	4	​	​	—
Total restructuring and other (income) charges, net	​	$	(8)	​	$	(5)

2015 activities

During 2015, the company sold its 60 percent interest in a subsidiary in China for cash proceeds of  $11 million and recorded a gain on the sale of the subsidiary of  $11 million. Prior to its sale this subsidiary operated under the company’s Performance Materials operating segment. The additional $1 million of income relates to an additional gain on the 2014 sale of Performance Materials’ air purification business as noted below.

As part of a plan that was implemented to restructure a portion of the Company’s operations, we recorded an impairment of  $4 million to write down inventory and property, plant and equipment associated with certain manufacturing operations of the Company’s Performance Chemicals segment.

2014 activities

The company made a strategic decision to sell its Performance Materials’ air purification business. During 2014, the company sold the net working capital and associated customer list related to the air purification business and recorded a $5 million gain on sale.

The company’s effective tax rate was 38% and 35% for the years ended December 31, 2015 and 2014, respectively. The differences in these effective rates compared to the combined statutory rates were primarily due to non-deductible transaction costs in 2015.

55

Adjusted EBITDA was $203 million and $247 million for years ended December 31, 2015 and 2014, respectively. This decrease of  $44 million was primarily driven by declines in segment EBITDA in Performance Chemicals of  $36 million and in Performance Materials of  $8 million. See Segment Operating Results section below for more information on the results of operations for each of the company’s operating segments.

Comparison of Years Ended December 31, 2014 and 2013

The table below shows the 2014 combined net sales and percentage variances from 2013:

In millions

2014 Net Sales

Percentage change vs. prior year

Currency effect

Price/Mix

Volume

Other

Combined

​

$

1,041

​

6%

​

(1)%

​

1%

​

6%

​

—%

Sales were $1,041 million and $980 million for the years ended December 31, 2014 and 2013, respectively. The sales increase in 2014 was driven by $60 million in volume growth (six percent of sales) in pavement, inks, adhesives, oilfield, other industrial specialties and automotive emissions markets due to market growth and share gains in those markets. Pricing and product mix improved by $6 million (one percent of sales) from gains in high value strategic markets for pavement, inks, adhesives, automotive emissions and process purification due to changes in customer mix and price. These increases were partially offset by negative pricing and product mix in certain industrial specialties and oilfield technologies products. These gains were partially offset by unfavorable foreign currency exchange of  $5 million (one percent of sales) due to the devaluation of the Japanese Yen and the Brazilian Real versus the U.S. Dollar compared to 2013.

Cost of sales were $718 million (69% of sales) and $685 million (70% of sales) for the years ended December 31, 2014 and 2013, respectively. Cost of sales increased by $33 million primarily driven by $40 million due to six percent higher volume, $12 million due to input cost inflation related to raw materials, freight and energy compared to 2013. These increases were partially offset by $16 million in productivity improvements and $3 million due to a depreciation in the Brazilian Real versus the U.S. dollar compared to 2013.

Selling, general and administrative expenses were $112 million (11% of sales) and $103 million (11% of sales) for the years ended December 31, 2014 and 2013, respectively. Selling, general and administrative expenses increased $9 million primarily driven by $6 million in higher employee costs primarily driven by higher incentive compensation and investments in sales and technical support capabilities, $2 million in higher commissions due to higher sales in pavement technologies, and $2 million in higher travel, entertainment and consulting expenses partially offset by a decrease in legal spending and other costs of  $1 million compared to 2013.

Interest expense was $16 million and $13 million for the years ended December 31, 2014 and 2013, respectively. Interest expense consisted of  $6 million and $7 million related to capital lease obligations and $10 million and $6 million in allocated interest expense from WestRock for the years ended December 31, 2014 and 2013, respectively.

Other income, net was $8 million and $5 million for the years ended December 31, 2014 and 2013, respectively, and consisted of the following:

​	Years ended December 31,
In millions	2014			2013
Foreign currency exchange losses (income)	​	$	1	​	$	—
Royalty and sundry income(1)	​	​	(4)	​	​	(2)
Restructuring and other (income) charges, net(2)	​	​	(5)	​	​	(3)
Other (income) expense, net	​	$	(8)	​	$	(5)

(1)

Primarily represents royalty income for technology licensing.

56

(2)

See below for more information regarding the company’s restructuring and other (income) charges, net.

​	Years ended December 31,
In millions	2014			2013
Restructuring and other (income) charges, net	​			​
Gain on sale of assets and businesses	​	$	(5)	​	$	—
Insurance and legal settlements	​	​	—	​	​	(13)
Asset write-downs	​	​	—	​	​	10
Total restructuring and other (income) charges, net	​	$	(5)	​	$	(3)

2014 activities

The company made a strategic decision to sell its Performance Materials’ air purification business. During 2014, the company sold the net working capital and associated customer list related to the air purification business and recorded a $5 million gain on sale.

2013 activities

During 2013, the company incurred pre-tax charges of  $10 million ($6 million attributable to the company and $4 million associated with noncontrolling interests) in connection with certain asset write-downs at one of the company’s Performance Materials’ foreign manufacturing locations.

The company’s Performance Chemical operating segment benefited from favorable non-recurring insurance and legal settlements during 2013.

The company’s effective tax rate was 35% and 36% for the years ended December 31, 2014 and 2013, respectively. The differences in these effective rates compared to the combined statutory rates were primarily due to the mix and levels of domestic versus foreign earnings. In 2014, Ingevity recorded a tax provision of $70 million, reflecting an increase of  $4 million from 2013 primarily due to an increase in earnings. The decrease in the effective tax rate to 35% in 2014 compared to 36% in 2013 was primarily due to the increase in a valuation allowance in 2013 partially offset by an increased benefit recognized in 2014 relating to IRC Section 199 deductions.

Combined Adjusted EBITDA was $247 million and $227 million for the years ended December 31, 2014 and 2013, respectively. This increase of  $20 million was primarily driven by improvements in segment EBITDA in Performance Materials of  $22 million and a slight decline in segment EBITDA Performance Chemicals of  $2 million. See “Segment Operating Results” section below for more information on the results of operations for each of the company’s operating segments.

Segment Operating Results

In addition to the information discussed above, the following sections discuss the results of operations for each of the company’s segments. The company’s segments are (i) Performance Chemicals and (ii) Performance Materials.

In general, the accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies in the Annual Combined Financial Statements.

Performance Chemicals

​	Years ended December 31,
In millions	2015			2014			2013
Net sales	​	$	711	​	$	792	​	$	759
Segment profit	​	​	87	​	​	124	​	​	126
Plus: Depreciation and amortization	​	​	24	​	​	23	​	​	23
Segment EBITDA	​	$	111	​	$	147	​	$	149

57

Comparison of Years Ended December 31, 2015 and 2014

In millions

2015 Net Sales

Percentage change vs. prior year

Currency effect

Price/Mix

Volume

Other

Performance Chemicals

​

$

711

​

(10)%

​

(3)%

​

(3)%

​

(4)%

​

—%

Segment sales for the Performance Chemicals segment were $711 million and $792 million for the years ended December 31, 2015 and 2014, respectively. The sales decrease was driven by $28 million (three percent of sales) of unfavorable foreign currency exchange due to the devaluation of the Euro and Brazilian Real versus the U.S. Dollar and $24 million (three percent of sales) of unfavorable pricing and product mix in the rubber, publication inks, and adhesives markets and certain other industrial specialties and oilfield technologies products. Volume declined by $29 million (four percent of sales) driven by unfavorable volume in oilfield and certain industrial specialties markets partially offset by volume growth in high value strategic markets for pavement, adhesives, and agrochemicals markets compared to 2014.

Segment EBITDA for Performance Chemicals segment was $111 million and $147 million for the years ended December 31, 2015 and 2014, respectively. Segment EBITDA decreased primarily due to $24 million from unfavorable pricing and product mix in the rubber, publication inks, and adhesives markets and certain industrials specialties and oilfield technologies products, $9 million from unfavorable foreign currency exchange due to the devaluation of the Euro and Brazilian Real versus the U.S. Dollar, $7 million from lower sales volume, and $14 million from unfavorable productivity, higher costs related to higher planned maintenance downtime, costs from continued investments in sales and technical support capabilities, and investments in product development and innovation. These decreases were partially offset by $18 million of deflation on CTO and other petroleum-based raw materials compared to 2014.

Comparison of Years Ended December 31, 2014 and 2013

In millions

2014 Net Sales

Percentage change vs. prior year

Currency effect

Price/Mix

Volume

Other

Performance Chemicals

​

$

792

​

4%

​

—%

​

—%

​

5%

​

(1)%

Segment sales for the Performance Chemicals segment were $792 million and $759 million for the years ended December 31, 2014 and 2013, respectively. The sales increase in 2014 was driven by $39 million (five percent of sales) of volume growth in pavement, inks, adhesives, oilfield and other industrial specialties markets. These gains were partially offset by unfavorable foreign currency exchange of  $3 million (less than one percent of sales) due to the devaluation of the Brazilian Real versus the U.S. Dollar. Pricing and product mix was unfavorable by $3 million (less than one percent of sales) due to certain industrial specialties and oilfield technologies standard product offerings partially offset by improvements from gains in the pavement, inks and adhesives markets compared to 2013.

Segment EBITDA for Performance Chemicals segment was $147 million and $149 million for the years ended December 31, 2014 and 2013, respectively. Segment profit decreased in 2014 primarily due to $10 million of CTO and other pine-based raw material input cost increases and other input cost inflation primarily related to energy, $3 million from unfavorable pricing and product mix within industrial specialty markets and $5 million from continued investments in sales and technical support capabilities and investments in product development and innovation. These decreases were partially offset by $9 million from higher volumes and $7 million manufacturing productivity associated with higher plant operating rates compared to 2013.

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Performance Materials

​	Years ended December 31,
In millions	2015			2014			2013
Net sales	​	$	257	​	$	249	​	$	221
Segment profit	​	​	81	​	​	90	​	​	68
Depreciation and Amortization	​	​	11	​	​	10	​	​	10
Segment EBITDA	​	$	92	​	$	100	​	$	78

Comparison of Years Ended December 31, 2015 and 2014

In millions

2015 Net Sales

Percentage change vs. prior year

Currency effect

Price/Mix

Volume

Other

Performance Materials

​

$

257

​

3%

​

(1)%

​

2%

​

2%

​

—%

Segment sales for the Performance Materials segment were $257 million and $249 million for the years ended December 31, 2015 and 2014, respectively. The sales increase in 2015 was driven by $6 million (two percent of sales) in volume improvements in the automotive emissions market due to strength in the NAFTA market and continued regulatory trends partially offset by declines in process purification markets and $5 million (two percent of sales) in pricing and mix improvements from gains in the automotive emissions market. These gains were partially offset by $3 million (one percent of sales) of unfavorable foreign currency exchange due to the devaluation of the Japanese Yen and the Euro versus the U.S. Dollar compared to 2014.

Segment EBITDA for the Performance Materials segment was $92 million and $100 million for the years ended December 31, 2015 and 2014, respectively. Segment EBITDA was down by $8 million primarily due to $13 million from unfavorable productivity related to higher planned maintenance outages and project expenses incurred during the construction of our greenfield plant in China, and $3 million from unfavorable foreign currency exchange due to the devaluation of the Japanese Yen and Euro versus the U.S. Dollar which was partially offset by $5 million in favorable pricing and mix in automotive emissions and $3 million in favorable volume compared to 2014.

Comparison of Years Ended December 31, 2014 and 2013

In millions

2014 Net Sales

Percentage change vs. prior year

Currency effect

Price/Mix

Volume

Other

Performance Materials

​

$

249

​

13%

​

(1)%

​

4%

​

10%

​

—%

Segment sales for the Performance Materials segment were $249 million and $221 million for the years ended December 31, 2014 and 2013, respectively. The sales increase in 2014 was driven by $22 million (ten percent of sales) in volume growth in the automotive emissions market partially offset by volume declines in process purification markets. Revenue benefited by $8 million (four percent of sales) in pricing and product mix improvements in both the automotive emissions and process purification markets. These gains were partially offset by $2 million (one percent of sales) of unfavorable foreign currency exchange due to the devaluation of the Japanese Yen versus the U.S. Dollar compared to 2013.

Segment EBITDA for the Performance Materials segment was $100 million and $78 million for the years ended December 31, 2014 and 2013, respectively. Segment EBITDA increased in 2014 primarily due to $10 million from higher volumes in automotive emissions, $9 million from favorable productivity, including savings from cost reduction initiatives and increased plant throughput and operating rates and $8 million from favorable pricing and product mix in automotive emissions and process purification markets compared to 2013. These benefits were partially offset by $3 million of inflation on raw materials and other input costs and $2 million from unfavorable foreign currency exchange due to the devaluation of the Japanese Yen versus the U.S. Dollar compared to 2013.

59

Liquidity and Capital Resources

Historically, the primary source of liquidity for Ingevity’s business is the cash flow provided by operations which has historically been transferred to WestRock to support its overall cash management strategy. Prior to separation, transfers of cash to and from WestRock have been reflected in Net Parent Investment in the historical Combined Balance Sheets, Statements of Cash Flows and Statements of Changes in Net Parent Investment. We expect WestRock to continue to fund us with cash as needed through the date of the separation.

Cash and cash equivalents totaled $32 million at December 31, 2015. Cash equivalents are comprised of short-term investments in U.S. and Brazilian government securities. Management continuously monitors deposit concentrations and the credit quality of the financial institutions that hold the company’s cash and cash equivalents, as well as the credit quality of its insurance providers, customers and key suppliers.

Due to the global nature of the company’s operations, a portion of its cash is held outside the United States. We believe that our foreign holdings of cash will not have a material adverse impact on our liquidity. The company does not currently expect to repatriate cash earnings from its foreign operations in order to fund U.S. operations. If these earnings were distributed, such amounts would be subject to U.S. federal income tax at the statutory rate less the available foreign tax credits, if any, and potentially subject to withholding taxes in the various jurisdictions.

Separation and Distribution impact on liquidity

We do not expect the financing transactions, we have entered (as described below) or will enter into in connection with the separation, including the payment of the dividend, distribution or other cash transfer to WestRock, to impact our cash flow requirements for 2016 or the foreseeable future. We expect to deleverage by using free cash flow to repay outstanding borrowings associated with the separation. In addition, we expect our operating free cash flows combined with cash on hand to be sufficient to meet our working capital needs. We believe these sources will be sufficient to fund our planned operations, and in meeting our interest, dividend and contractual obligations.

Revolving Credit and Term Loan Facility

On March 7, 2016 we entered into a credit agreement governing a senior secured multi-currency revolving credit facility (the “Revolving Credit Facility”), which provides for maximum borrowings of  $400 million for the company, with a €100 million subfacility for a Belgian subsidiary borrower of Ingevity (the “Belgian Borrower”) subject to certain additional conditions on the initial funding date. The Revolving Credit Facility allows for borrowings in U.S. dollars, euros and Japanese yen, with certain sub-limits. The Revolving Credit Facility has a letter of credit sub-limit of  $75 million and a swingline facility sub-limit of approximately $40 million. The Revolving Credit Facility will be available, subject to certain customary conditions, on and after the initial funding date, which is expected to be up to 10 business days prior to or substantially concurrently with the separation from WestRock. The Revolving Credit Facility can be utilized for working capital and other general corporate purposes, and is expected to be drawn up to $225 million on the distribution date.

We also, on March 7, 2016, entered into a senior secured term loan facility (the “Term Loan Facility” and together with the Revolving Credit Facility, the “Facilities”) of  $300 million, the proceeds of which, together with the funding date draw under the Revolving Credit Facility, we expect will be used to pay a dividend, distribution or other cash transfer of up to $500 million to WestRock or one of its subsidiaries prior to the consummation of the separation and distribution and to pay fees and expenses associated with the Facilities and the separation. The term loan will be funded subject to certain additional conditions on the funding date.

The Facilities mature on the five-year anniversary of the initial funding date of the Facilities. The Term Loan Facility amortizes at a rate equal to 0 percent per annum during the first year after the funding date, 5 percent per annum during the second and third years after the funding date and 10 percent per annum during the fourth and fifth years after the funding date, with the balance due at maturity. The Term Loan Facility will require the proceeds of certain asset sales and casualty events to be applied to prepay the loans under the Term Loan Facility, subject to certain thresholds, exceptions and reinvestment rights.

60

The interest rates per annum applicable to the loans under the Facilities are based on a fluctuating rate of interest measured by reference to, at the borrowers’ election, either (1) an adjusted London inter-bank offered rate (LIBOR) plus a borrowing margin, or (2) an alternate base rate plus a borrowing margin. The borrowing margin for the Facilities is subject to adjustment based on the company’s consolidated total leverage ratio, and is between 1.25% and 2.00% in the case of LIBOR loans and between 0.25% and 1.00% in the case of base rate loans.

Customary fees will be payable in respect of both Facilities. The Revolving Credit Facility fees will include (i) commitment fees, based on a percentage of the daily unused portions of the facility ranging from 0.15% to 0.30%, and (ii) customary letter of credit fees. These fees are expected to be capitalized and amortized over the term of the Facilities.

The Facilities include financial covenants requiring the company to maintain on a consolidated basis, as of the end of each fiscal quarter, a maximum total leverage ratio of 3.75 to 1.00, which may be increased to 4.25 to 1.00 under certain circumstances and a minimum interest coverage ratio of 3.00 to 1.00, in each case, as of the first fiscal quarter ending after the funding date. The Facilities include customary events of default including non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations or warranties, cross default to certain other material indebtedness, bankruptcy and insolvency events, invalidity or impairment of guarantees or security interests, material judgments and change of control.

For a further description of the above mentioned financing arrangements, see “Description of Material Indebtedness” within this Information Statement.

Cash flow comparison of Years Ended December 31, 2015, 2014 and 2013

​	Years ended December 31,
In millions	2015			2014			2013
Net cash provided by operating activities	​	$	73	​	$	143	​	$	137
Net cash used in investing activities	​	​	(90)	​	​	(102)	​	​	(64)
Net cash provided by (used in) financing activities	​	​	27	​	​	(31)	​	​	(79)

Operating activities

During 2015, cash flow from operations decreased primarily due to lower year-over-year cash earnings as well as net increases in working capital compared to 2014. During 2014, cash flow increased due to higher year-over-year cash earnings, which was partially offset by net increases in working capital compared to 2013. Working capital increases are driven primarily by increases in inventory balances offset by increases in accounts payable when compared to 2013.

Investing activities

For all periods, the cash used in investing activities are primarily attributable to capital expenditures. In 2015 and 2014, capital spending included base maintenance capital supporting ongoing operations and significant growth spending primarily related to the construction of an activated carbon manufacturing facility in China and new derivative equipment in Charleston supporting the adhesives, pavement and oilfield markets.

​	December 31,
In millions	2015			2014
Maintenance capital expenditures	​	$	33	​	$	28
Safety, health and environment	​	​	12	​	​	11
Growth and cost improvement capital expenditures	​	​	57	​	​	62
Total capital expenditures	​	$	102	​	$	101

Projected 2016 capital expenditures are expected to be $65 million to $80 million.

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Financing activities

As WestRock manages the company’s cash and financing arrangements, all excess cash generated through earnings is remitted to WestRock and all sources of cash are funded by WestRock.

Cash provided by financing activities in 2015 was $27 million and was driven by cash provided by WestRock of  $30 million. Cash used in financing activities in 2014 was $31 million and was driven by excess cash remitted to WestRock of  $31 million. Cash used in financing activities in 2013 was $79 million and was driven primarily by excess cash remitted to WestRock of  $70 million and distributions to noncontrolling interests of  $8 million.

Current Assets and Liabilities

​	December 31,
In millions	2015			2014
Cash and cash equivalents	​	$	32	​	$	20
Accounts receivable, net	​	​	96	​	​	108
Inventories	​	​	151	​	​	130
Prepaid and other current assets	​	​	20	​	​	13
Total current assets	​	$	299	​	$	271

Current assets as of December 31, 2015 increased $28 million compared to December 31, 2014 primarily due to increases in cash and inventories. Accounts receivable, net as of December 31, 2015 decreased $12 million consistent with the lower revenues in 2015 compared to 2014. Inventories increased by $21 million, driven by higher raw materials, including CTO, as well as higher finished goods supporting automotive emissions and pavement technologies year over year growth as well as seasonality in the pavement technologies market.

​	December 31,
In millions	2015			2014
Accounts payable	​	$	65	​	$	105
Accrued expenses	​	​	13	​	​	13
Accrued payroll and employee benefits	​	​	10	​	​	18
Notes payable	​	​	9	​	​	3
Total current liabilities	​	$	97	​	$	139

Current liabilities as of December 31, 2015 decreased by $42 million compared to December 31, 2014 primarily driven by decreases in accounts payable partially offset by increases in notes payable. Accounts payable decreased $40 million primarily due to decreases in fourth quarter 2015 capital expenditures when compared to the fourth quarter of 2014. Notes payable increased $6 million due to an increase in borrowing related to the funding of the construction of our new Chinese activated carbon manufacturing facility.

Contractual Obligations

The company enters into various contractual obligations throughout the year. Presented below are the contractual obligations of the company as of December 31, 2015, and the time period in which payments under the obligations are due. Disclosures related to capital lease obligations are included in Note 9 of Notes to Combined Financial Statements. Also included below are disclosures regarding the amounts due under purchase obligations. A purchase obligation is defined as an agreement to purchase goods or services that is enforceable and legally binding on the company and that specifies all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. The company has included in the below disclosure all normal and recurring purchase orders, take-or-pay contracts, supply arrangements as well as other purchase commitments that management believes meet the above definition of a purchase obligations.

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​

Payments due by period

In millions

Total

Less than 1 yr – 2016

1 – 3 yrs 2017 – 2018

3 – 5 yrs 2019 – 2020

More than 5 yrs 2021 and beyond

Contractual obligations:

​

​

​

​

​

Capital lease obligations(1)

​

$

150

​

$

6

​

$

12

​

$

12

​

$

120

Operating lease obligations

​

​

33

​

​

10

​

​

14

​

​

7

​

​

2

Purchase obligations

​

​

158

​

​

158

​

​

—

​

​

—

​

​

—

Total

​

$

341

​

$

174

​

$

26

​

$

19

​

$

122

(1)

Amounts include the interest payments under the capital lease as well as the principle payment due in 2027.

New Accounting Guidance

Refer to the Note 3 to the Combined Financial Statements included within this Information Statement beginning on page F-1 for a full description of recent accounting pronouncements including the respective expected dates of adoption and expected effects on the company’s Combined Financial Statements.

Critical Accounting Policies

Our principal accounting policies are described in Note 2 to the Combined Financial Statements included within this Information Statement beginning on page F-1. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of some assets and liabilities and, in some instances, the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Management believes the accounting policies discussed below represent those accounting policies requiring the exercise of judgment where a different set of judgments could result in the greatest changes to reported results.

Revenue recognition:   The company recognizes revenues at the point when title and the risk of ownership passes to the customer. Substantially all of the company’s revenues are generated through product sales and shipping terms generally indicate when title and the risk of ownership have passed. Revenue is recognized at shipment for sales where shipping terms are FOB (freight on board) shipping point unless risk of loss is maintained under freight terms. For sales where shipping terms are FOB destination, revenue is recognized when the goods are received by the customer. The company provides allowances for estimated returns and other customer credits such as discounts and volume rebates, when the revenue is recognized, based on historical experience, current trends and any notification of pending returns.

Accounts receivable and allowance for doubtful accounts:   Accounts receivable, net on the Combined Balance Sheets are comprised of both trade receivable and non-trade receivable balances less allowances for doubtful accounts. Trade receivable consist of amounts owed to the company from customer sales and are recorded at the invoiced amounts when revenue is recognized and generally do not bear interest. Non-trade receivables represent $3 million and $6 million at December 31, 2015 and 2014, respectively. The allowance for doubtful accounts is the company’s best estimate of the amount of probable loss in the existing accounts receivable. The company determines the allowance based on historical write-off experience, current collection trends, and external business factors such as economic factors, including regional bankruptcy rates, and political factors. Past due balances over a specified amount are reviewed individually for collectability. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. Accounts receivables have been reduced by an allowance for doubtful accounts of $0.1 million and $0.5 million at December 31, 2015 and 2014, respectively.

Concentration of credit risk:   The financial instruments that potentially subject the company to concentrations of credit risk are accounts receivable. The company limits its credit risk by performing ongoing credit evaluations and, when necessary, requiring letters of credit, guarantees or collateral. The company had accounts receivable from its largest customer of  $24 million and $20 million as of

63

December 31, 2015 and 2014, respectively. Sales to this customer, which are included in the Performance Chemicals segment, were 11 percent, 11 percent and 10 percent of total net sales for the years ended December 31, 2015, 2014 and 2013, respectively. No other customers individually accounted for greater than 10 percent of the company’s combined net sales.

Impairment of long-lived assets:   The company periodically evaluates whether current events or circumstances indicate that the carrying value of its long-lived assets, including intangible assets, to be held and used may not be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived asset, or the appropriate grouping of assets, is compared to carrying value to determine whether impairment exists.

If an asset is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. The company reports an asset to be disposed of at the lower of its carrying value or its estimated net realizable value.

Income taxes:   As a division of WestRock, the company is not an income tax payer in the United States as its domestic results and related tax obligations, if any, are included in the tax returns of WestRock. The income tax provision included in these combined financial statements related to domestic income was calculated on a separate return basis, as if the company was a separate taxpayer and the resulting current tax receivable or liability, including any liabilities related to uncertain tax positions, was settled with WestRock through equity.

In tax jurisdictions located in Brazil and China, the operations of the company are conducted by discrete legal entities, each of which files separate tax returns. All resulting current income tax assets and liabilities are reflected in the combined balance sheets of the company.

Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities for each segment. Deferred tax assets and liabilities reflect the enacted tax rates in effect for the years the differences are expected to reverse. The company evaluates the need for a deferred tax asset valuation allowance by assessing whether it is more likely than not that it will realize its deferred tax assets in the future.

Quantitative and Qualitative Disclosures about Market Risk

Foreign currency exchange rate risk

The company has foreign-based operations, primarily in Europe, South America and Asia, which accounted for approximately 35 percent of its 2015 net sales. The company’s significant operations outside the United States have designated the local currency as their functional currency. The primary currencies for which the company has exchange rate exposure is the U.S. dollar versus the euro, the Brazilian real, the Japanese yen and the Chinese yuan. In addition, certain of the company’s domestic operations have sales to foreign customers. In the conduct of its foreign operations, the company also makes inter-company sales. All of this exposes the company to the effect of changes in foreign currency exchange rates. Our earnings are therefore subject to change due to fluctuations in foreign currency exchange rates when the earnings in foreign currencies are translated into U.S. dollars. We do not hedge this translation impact on earnings. The U.S. dollar versus the euro is the company’s most significant foreign currency exposure. A hypothetical 10 percent change in the average euro to U.S. dollar exchange rates during the year ended December 31, 2015, would have changed the company’s net sales and income before income taxes by approximately $10 million or one percent and $4 million or three percent, respectively.

Flows of foreign currencies into and out of the company’s operations are generally stable and regularly occurring and are recorded at fair market value in the company’s financial statements. The company’s foreign currency management policy permits it to enter into foreign currency hedges when these flows exceed a threshold, which is a function of these cash flows and forecasted annual operations. There were no foreign currency derivative contracts outstanding at December 31, 2015.

Concentration of credit risk

The financial instruments that potentially subject the company to concentrations of credit risk are accounts receivable. The company limits its credit risk by performing ongoing credit evaluations, and when

64

necessary, requiring letters of credit, guarantees or collateral. The company had accounts receivable relating to its largest customer of  $24 million and $20 million as of December 31, 2015 and 2014, respectively.

Commodity price risk

A portion of our manufacturing costs include purchased raw materials, which are commodities whose prices fluctuate as market supply and demand fundamentals change. Accordingly, product margins and the level of our profitability tend to fluctuate with the changes in these commodity prices. The cost of energy is a manufacturing cost that is exposed to commodity pricing. The company’s energy costs are diversified among electricity, steam and natural gas, with natural gas comprising our largest energy input.

Crude tall oil price risk

Our results of operations are directly affected by the cost of our raw materials, particularly crude tall oil (“CTO”). Pricing for CTO (which accounts for approximately 17 percent of all of our cost of sales and 41 percent of our raw materials purchases for 2015) is subject to particular pricing pressures by reasons of the limited supply elasticity of the product and competing demands for its use, all of which drive pressure on price. Our gross profit and margins could be adversely affected by changes in the cost of CTO if we are unable to pass the increases on to our customers. CTO is a thinly traded commodity with pricing commonly established for periods ranging from one quarter to one year periods of time. The company tries to protect against such pricing fluctuations through various business strategies. Based on average pricing during the year ended December 31, 2015, a hypothetical unfavorable 10 percent change in the market price for CTO would have resulted in additional costs of sales of approximately $12 million or two percent, which we may or may not have been able to pass on to our customers.

Natural gas price risk

Natural gas is our largest form of energy purchases constituting approximately one percent of our cost of goods sold for the year ended December 31, 2015. Increases in natural gas costs, unless passed on to our customers, would adversely affect our results of operations. If natural gas prices increase significantly, our business or results of operations may be adversely affected. For the year ended December 31, 2015 a hypothetical unfavorable 10 percent change in natural gas pricing would have resulted in an additional cost of sales of approximately $1 million.

In order to better predict and control the future cost of natural gas consumed at the company’s plants, the company may engage in financial hedging of future gas purchase prices. Gas usage is relatively predictable month-by-month. The company hedges primarily with financial instruments that are priced based on New York Mercantile Exchange (NYMEX) natural gas futures contracts. There are no natural gas derivatives contracts outstanding at December 31, 2015.

Interest Rate Risk

At the time of the separation we expect that approximately $500 million of our borrowings will include a variable interest rate component. As a result, we expect to be subject to interest rate risk with respect to such floating-rate debt. A 100 basis point increase in the variable interest rate component of our borrowings would increase our annual interest expense by approximately $5 million or 24 percent.

65

BUSINESS

Ingevity

Ingevity is a leading global manufacturer of specialty chemicals and high performance carbon materials. We provide innovative solutions to meet our customers’ unique and demanding requirements through proprietary formulated products. Our deep technical expertise and experience, flexible manufacturing, distinctive chemistry, global reach and focus on innovation and application development provide our customers with the ability to enhance their own products and competitive position in the markets they serve.

Ingevity’s specialty chemicals products serve as critical inputs used in a variety of high performance applications, including asphalt paving, oil exploration and production, agrochemicals, adhesives, lubricants and printing inks. The company is also the leading global manufacturer of activated carbon used in gasoline vapor emission control systems in cars, trucks, motorcycles and boats, with over 750 million units installed globally over the 30-year history of this business. Our products meet highly specialized, complex customer needs in the industries in which they are used. As customer applications become more demanding, Ingevity’s products become increasingly specialized and represent a critical component of our customers’ products, typically at a modest input cost relative to the customer’s overall product cost. This value creation  — significant performance impact versus relatively low input cost — provides some measure of stability as customers may be reluctant to face the performance risk potentially associated with switching over to competitors’ offerings.

With a history of innovation spanning 100 years, we have grown into a global leader in the markets we serve with nearly $1 billion in sales, serving customers in approximately 65 countries from our United States, Brazil and China manufacturing facilities. Our global engineering, technical, sales and application support teams closely collaborate with our customers, and, importantly, with their customers. With our deep technical expertise and experience in our customers’ applications and end markets, we have the capacity and flexibility to anticipate and respond to changing market conditions and customer demands to develop proactive solutions which provide our customers — and therefore us — with a distinct competitive advantage. Additionally, the quality and diversity of our product portfolio, and the flexibility of our manufacturing assets, gives us the capability to direct our resources towards their most profitable and attractive uses and geographies in response to changing markets.

We participate in attractive, higher growth sectors of the global specialty chemicals industry. The broadly defined specialty chemicals industry is expected to experience a 3.6% CAGR from 2014 through 2019, according to IHS. Ingevity focuses on targeted markets within that space that are expected to outpace the broader specialty chemicals market growth rate, supported by long-term secular growth trends in infrastructure preservation and development, growth in unconventional oil exploration and production and increasing global food production demands. We also participate in more commoditized sectors, where we sell our functional chemistries, including TOFA and biofractions directly into the marketplace without differentiation, and where we sell certain activated carbons for use in some purification processes. Additionally, the company’s proprietary automotive carbon business, which engineers, manufactures and sells wood-based activated carbon used in gasoline vapor emission control systems, is expected to benefit from increasingly stringent vehicle emission standards worldwide that the company’s products are uniquely designed and qualified to meet. The annual global sales of light duty vehicles (i.e. passenger and light commercial vehicles) that are powered with gasoline are forecast to grow from approximately 71 million to approximately 91 million vehicles (+28%) from 2014 to 2025. Most of this growth is expected to occur outside of the United States and Canada in countries and regions where gasoline vapor emission standards significantly lag the modern, highly effective standards of the United States and Canada. This provides significant upside potential in addition to the already favorable macroeconomic growth trends of the global automotive industry.

We report in two business segments, Performance Chemicals and Performance Materials. Our Performance Chemicals segment primarily addresses applications in three product families: pavement technologies, oilfield technologies and industrial specialties. Our Performance Materials segment consists of our carbon technologies business which primarily produces automotive carbon products used in gasoline vapor emission control systems.

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The chart below illustrates our revenue by segment, product family and sales by geography in 2015. For more information about the company’s U.S. and foreign operations, see Note 15 of Notes to the Combined Financial Statements beginning on page F-1 included within this Information Statement.

*

Based on location of customer

Our Core Strengths

Ingevity is committed to continued value creation for its customers and stockholders by focusing on its core strengths:

Leading Global Market Positions

We are a leader in the global pine chemicals industry, further distinguished by our focus on target markets that offer the potential for profitable growth, supported by long-term secular growth trends in infrastructure preservation and development, growth in unconventional oil exploration and production and increasing global food production demands. Our products serve as critical inputs used in a variety of high performance applications, including asphalt paving, oil exploration and production, agrochemicals, lubricants and printing inks. The quality and diversity of our product portfolio, and the flexibility of our manufacturing assets, gives us the capability to direct our differentiated products towards their most profitable and attractive uses and geographies.

Ingevity is the leading global manufacturer of activated carbon used in gasoline vapor emission control systems in cars, trucks, motorcycles and boats, with over 750 million units installed globally over the 30-year history of our automotive carbon business. This business is expected to benefit from increasingly stringent vehicle emission standards worldwide that the company’s products are uniquely designed and qualified to meet. The annual global sales of light duty vehicles (i.e. passenger and light commercial vehicles) that are powered with gasoline are forecast to grow from approximately 71 million to approximately 91 million

67

vehicles (+28%) from 2014 to 2025. Most of this growth is expected to occur outside of the United States and Canada in countries and regions where gasoline vapor emission standards significantly lag the modern, highly effective standards of the United States and Canada. This provides significant upside potential in addition to the already favorable macroeconomic growth trends of the global automotive industry.

Flexible Manufacturing Capabilities Optimize Asset Utilization

The quality and diversity of our product portfolio, and the flexibility of our manufacturing assets, gives us the capability to direct our resources to their most profitable uses and geographies.

The company’s Performance Chemical assets include multipurpose chemical reactors that are capable of manufacturing products of varying chemistries that can serve multiple markets. For example, in its South Carolina facility, the newest reactor that was commissioned in 2015 is capable of producing products for asphalt, oilfield and adhesives applications, while our Louisiana assets can be redirected with relative ease among various applications including asphalt, oilfield, adhesives and inks.

The company’s carbon facilities, which primarily produce automotive carbon, are also capable of producing a number of other activated carbon products for the food, water, beverage and chemical purification industries, maximizing the productivity of these assets.

Deep Technical Expertise and Product Innovation Capability and Experience

We have deep technical expertise and market knowledge and insights, derived from customer relationships and research and development capabilities, that enable our innovation capacity. Innovation efforts are led and supported by our teams of technical experts and industry veterans, many of whom are considered the foremost experts in their fields, spread throughout our organization in key positions from product development to manufacturing and sales. Each of our business units has its own development and application laboratories that work in partnership with our customers to refine existing products and develop new innovations that will drive value for Ingevity and our customers.

With our technical expertise and product innovation capability and experience, and by working closely with our customers, our technical experts can quickly offer application solutions that address our customers’ most difficult challenges. For example, when our road contractor customers vary the aggregate and/or asphalt to be used in a particular job mix, they call on our expertise to quickly reformulate the Ingevity additive chemistry needed for the revised mix, so that they can meet the original job specifications on time, regardless of the change. Our ability to swiftly understand and address our customers’ performance needs allows Ingevity to maintain and grow its relationships with its customer base.

Unique Decades-Long Track Record of Automotive Carbon Products Meeting Emission Compliance Standards

Current U.S. federal and California regulatory standards require that gasoline vapor control devices remain effective for the entire life of the vehicles on which installed. Ingevity has a substantial, decades long track record of providing life-of-vehicle product performance in a properly designed gasoline vapor control system. Our unique capability to engineer a very specific nanoscale porosity into the carbons on a large commercial scale allows the system designers to minimize the system’s size based on our carbons’ ability to remain highly effective over the vehicle’s lifetime. Given the imperative for automotive manufacturers to produce vehicles capable of meeting these long-term requirements, or potentially face expensive recalls and unfavorable publicity, there is an increased risk to use other producers who do not have a comparable, proven history and technical capability, particularly given the significant costs associated with non-compliance should a competitor’s offering fail to maintain effectiveness over vehicle lifetimes.

Global Manufacturing and Supply Chain Reach

We have a global reach which allows us to effectively service multinational customers through a combination of our manufacturing facilities located in the United States, China and Brazil and local talent strategically placed around the globe. In addition, our technology centers located in the United States, China, Europe and India give us the ability to service our customers throughout these regions, and provide us with market insights that allow us to develop customized solutions for local and regional markets. We

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serve customers in approximately 65 countries, with our global engineering, technical, sales and application support teams. Our global reach enables us to more effectively serve — and be the business partner of choice to — multinational companies that look to partners who can meet their needs on a consistent basis wherever they do business.

This capability also allows us to take advantage of market trends. For example, our oilfield technology business has in the past been primarily focused on the North American market. Our global reach will allow us to pursue growth opportunities outside of the United States, particularly in the Middle East, which has not undergone as significant an output decline during the recent global slowdown in the oil and gas exploration industry.

Collaborative Customer and End User Relationships Drive Profitable Growth Opportunities

We take a partnership approach with our customers, investing resources to deeply understand their customers’ markets so that we can provide technologically advanced, tailored solutions that allow our customers to maintain a competitive advantage in the markets they serve. Our knowledge of our customers’ end markets provides us with insights that enable us to develop solutions that address opportunities or challenges and create value for our customers. For example, through our relationships with several automobile manufacturers (“OEMs”) (often, our customers’ customer), we learned that certain vehicles were having trouble passing emissions certification tests based on a small amount of VOCs migrating from the engine via the vehicles’ air intake systems. To address this issue, we developed several generations of activated carbon-based solutions (activated carbon honeycombs and engineered carbon sheets) that manage these emissions while minimizing pressure drop in the air intake system — a key performance advantage to the OEMs. This drove demand for our product by addressing the needs of our customers’ customer. We believe this approach — driving demand for our products by developing solutions for our customers’ end markets — has been and will continue to be a significant driver of profitable growth.

Education of Government and Regulatory Bodies on Scientifically Based Policies and Specifications

Many of our customers’ markets are subject to increasing regulatory standards and mandates, for example more stringent air quality standards in the case of automotive emissions or the use of recycled materials in the case of pavement technologies. With our technical expertise and experience, our teams are a valued resource and work directly with government and regulatory bodies, in support of our customers, as experts in their field to educate regulators about existing and innovative technologies that support their objectives or solve specific challenges. As the trend continues in mature and emerging markets towards more advanced solutions, we believe the ability to leverage our expertise to educate, advocate and promote sensible regulatory solutions will benefit our customers while driving incremental value within those markets. For example, Ingevity has globally recognized expertise in the highly specialized field of automotive gasoline vapor emissions. While tailpipe emissions on vehicles are well recognized, understood and regulated, gasoline vapor emissions from vehicles have been lightly regulated in many countries outside the United States and Canada. Our experts have educated authorities in other countries to help them understand and quantify the magnitude of these emissions and evaluate the highly effective solutions currently in use in the United States and Canada that can reduce these gasoline vapor emissions to “near zero” levels at a relatively low cost per vehicle.

Our work with regulators allows us then to work with our customers in order to help them respond and adapt to evolving and varying regulatory standards. For example, because of the stringent and differing regulatory compliance standards applicable to the global oilfield industry, our oilfield customers often turn to us over smaller, less sophisticated vendors in order to help them manage the complexities of compliance risk throughout the world.

Highly Engaged, Performance and Safety-driven Culture

We have assembled a highly talented, collaborative, committed and creative team which drives the success of our business. We believe in empowerment and accountability and encourage our employees to think boldly. Our collective ambition is keenly focused on creating value for today and tomorrow. Further, we are committed to protecting human health and the environment while using resources in a responsible and sustainable manner: as a long-standing member of the American Chemistry Council (ACC), we

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subscribe to the Guiding Principles of the American Chemistry Council’s Responsible Care® program — a global chemical industry performance initiative that is implemented in the United States through the ACC. Our ISO 9001, ISO/TS 16949 and Responsible Care® Certifications are internationally recognized measures of consistent superior performance and responsibility to health, safety, security and the environment. We believe this track record is something that differentiates us from our competitors in the eyes of many of our customers.

Long-term Secured Raw Material Supply

At the time of the separation, we intend to enter into a long-term supply agreement with WestRock pursuant to which we will purchase all of the CTO output from WestRock’s existing kraft mills, subject to certain exceptions. Beginning in 2025, either party may provide a notice to the other party terminating the agreement five years from the date of such notice. Beginning one year after such notice, the quantity of products provided by WestRock under the agreement will be gradually reduced over a four-year period based on the schedule set forth in the agreement. In addition, from 2022 until 2025, either party may provide one-year notice to remove a kraft mill as a supply source. The two largest kraft mills under the agreement currently are expected to supply approximately 18.5% to 20% and 16.5% to 17.5%, respectively, of the total amount of products expected to be supplied under our agreement with WestRock. See “Certain Relationships and Related Person Transactions — Crude Tall Oil and Black Liquor Soap Skimmings Agreement.” In the event that WestRock exercises its right to terminate our supply agreement with them or remove a kraft mill as a supply source, we may be able to obtain substitute supplies of CTO from other suppliers, spot purchases or a new contract with WestRock. This agreement will include pricing terms based on market prices. Under this agreement, based on WestRock’s current output, we expect to initially source approximately 45% to 55% of our CTO requirements for the maximum operating rates of our North American facilities. The relationship with WestRock will be strategically important to our Performance Chemicals business due to the limited supply of CTO globally, of which we believe a significant portion is already under long-term supply agreements with other consumers of CTO. We believe this increment of supply, in conjunction with other contracted sources of CTO, will initially allow us to serve customer demand. See also “Risk Factors — Our Performance Chemicals segment is highly dependent on CTO which is limited in supply; lack of access to sufficient CTO would impact our ability to produce CTO-based products.”

Our Plans for Additional Growth

We have a demonstrated history of profitable growth. As an independent company, we believe we can accelerate our growth while maintaining our profitability. We intend to take the following steps as a newly independent public company:

Expand Sales to Existing Customers and into New Geographies

We believe we are well positioned to organically expand our sales through a combination of continued global sales growth, leveraging our significant application knowledge to apply our existing products to new applications and capitalizing on the investments we have made in our global sales, technical centers and distribution network. Our global reach allows us to effectively compete in new geographies, delivering proven innovative solutions where opportunities to apply our technologies exist. We continue to leverage our significant application knowledge and intimate customer relationships to target opportunities where we know our products perform, creating demand for our products by driving value for our customers.

We intend to continue to strengthen our position in emerging markets such as China, India and Brazil where we believe there are significant opportunities for growth. Opportunities include the expansion of sales of our asphalt products into areas increasingly in need of newly paved roads and increased sales of carbon technology solutions driven by anticipated regulatory expansion in the global automotive vapor emissions control market. As a result, we completed a new facility in China for the global automotive emissions control market during the fourth quarter of 2015 and have continued to invest in our Brazilian performance chemicals refinery. The total project spending on the global automotive facility in China was roughly $100 million.

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Increase our Offering of Specialized, Higher Margin Products

We employ a world-class team of engineering, technical, sales and application specialists, along with experienced industry professionals, which provide us with deep technical knowledge and the ability to be a leading provider of specialty products in the markets we serve. We have the experience and capability to further develop and expand upon the products we currently produce, further differentiating them into higher value, increasingly specialized products, or developing new applications and end uses.

We have a history of success in such product development and differentiation. For example, our oilfield technologies business transitioned from providing basic TOFA to our customers to the development and marketing of specialized tall oil emulsifiers and corrosion inhibitors. We also grew our pavement technologies from asphalt chemicals into specialized additives used in ultra-thin paving technologies.

We believe that there is significant upside in further developing and expanding upon products produced from TOFA, displacing some of our lower margin business where we sell TOFA directly to certain customers. This will have the added benefit of improved insulation from the cyclical nature of the direct natural fats and oils market of which TOFA is a part. Over the next few years, our goal is to meaningfully increase the portion of our sales of specialized, higher value products derived from TOFA, including addressing new markets or opportunities to upgrade TOFA into product categories where we might not participate today.

Additionally, we search to supply the right chemistry for the applications within our market segments regardless of the raw materials required. Applying our unique insights into our end use applications, our team will search to find novel solutions outside of our current CTO-based materials to problems and work to create the supply chain needed to provide those products to our customers. As an example, we have developed, manufacture and sell product solutions in our asphalt business that are hydrocarbon based.

Innovate to Enable Our Customers to Adapt to Increasingly Stringent Regulatory Standards

We are a valued resource with government and regulatory agencies around the world, from California to China, including national, regional and local environmental regulatory bodies. We work directly with such bodies, in support of our customers, to help them develop sensible standards based on the availability of technological solutions that make such standards commercially achievable. As standards are adopted and become increasingly demanding, the products that can be used to achieve compliance with such standards become increasingly technologically complex to design and manufacture on a commercial level. The company’s ability to meet these complexities provides the company with a distinctive commercial edge — as our customers in many applications depend on us to help them meet their compliance standards. For example, when paving contractors were having difficulty meeting the Florida Department of Transportation’s initiative to use more recycled tire rubber, the pavement technologies group developed an innovative delivery system, Evoflex RMA, and educated contractors on how to use it to achieve the desired environmental and performance benefits. We also work closely with automotive companies and their suppliers to ensure that they understand and can meet increasingly stringent vehicle emission standards.

Invest Organically and Selectively Pursue Acquisitions that Further Strengthen Our Product Portfolio

We plan to continue to invest capital organically in attractive cost reduction projects and in capacity expansions as necessary to meet demand growth.

In addition, we intend to pursue value-creating acquisitions that represent attractive opportunities in our target markets as well as in high-value niche applications which complement our current product portfolio and capabilities. Following the separation, we will continue seeking to add product lines and portfolios, as well as marketing and manufacturing alliances, that will play an important role in strengthening our leadership positions. We intend to pursue acquisitions both domestically and globally.

Segments

Performance Chemicals

Ingevity’s Performance Chemicals segment develops, manufactures and sells a wide range of specialty chemicals primarily derived from co-products of the kraft pulping process. Products include performance chemicals derived from pine chemicals used in asphalt paving, adhesives, agrochemical dispersants, printing

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inks, lubricants, oilfield exploration and production and other diverse industrial uses. Our application expertise is often called upon to provide unique solutions to our customers that maximize resource efficiency. We have a broad and diverse customer base in this segment. In 2015, our top ten customers accounted for approximately 43% of our segment revenue; the next 100 customers made up approximately 37% of our segment revenue.

The primary raw material used in our Performance Chemicals segment is CTO. Our flexible manufacturing processes allow us to take advantage of our steady availability of CTO supply and respond to changing customer and market demands, which enables us to fully utilize our manufacturing assets.

The company’s Performance Chemicals business serves customers globally from two manufacturing locations in the United States and a third in Brazil.

In 2015, our Performance Chemicals segment delivered sales of  $711 million and Segment EBITDA of $111 million. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Ingevity” for a reconciliation of Segment EBITDA to segment profit under U.S. generally accepted accounting principles (“GAAP”).

Production

Most of our performance chemicals are derived from CTO, a co-product of the kraft pulping process, where pine is used as the source of the pulp. CTO is produced by acidulating black liquor soap skimmings, which is recovered during the kraft pulping process. The CTO is further separated by distillation into TOR or TOFA and other biofractions. As such products are further refined or chemically modified, higher value derivative products are created, making their way into a wide variety of industrial and consumer goods. The company also produces performance chemicals derived from lignin, also a co-product of the kraft pulping process. TOR and TOFA are sold directly to customers in some instances, or, along with lignin, further refined or chemically modified into higher value derivative products.

Our differentiated performance chemicals are engineered to meet specific industry standards and customer requirements. Examples of the company’s products and their primary end uses or applications are illustrated in following graphic:

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Pavement Technologies

Our pavement technologies group supplies a broad line of innovative additives, systems and technologies for road construction, resurfacing, preservation, maintenance and recycling globally. As a specialty asphalt additive supplier for over 50 years, we have a long history of work with transportation agencies, university research consortiums, paving contractors and asphalt refiners around the world to design, develop and implement innovative additives and novel paving systems that protect existing roadways and enhance the performance of new road construction.

Our pavement technologies team combines broad downstream technical, application and construction experience with a strong direct sales and marketing presence. Our combined expertise in the disciplines of chemistry and civil engineering provides a comprehensive understanding of the relationship between molecular structure of our chemistries and their impact on the performance of pavement systems. This allows us to develop products customized to local markets and consistently deliver cost-effective solutions for our clients. We also introduce and commercialize new technologies globally through consultative relationships with ministries and departments of transportation to stimulate customer demand for our products.

We supply over 100 asphalt additive products and technologies to approximately 500 customers under numerous well-known industry brands such as Evotherm®, Ralumac® and Indulin®. Technology centers located in the United States, China, Europe and India give us the ability to service our customers throughout these regions, and provide us with market insights that allow us to develop customized solutions for local and regional markets.

We are a global leader in the rapidly expanding Warm Mix Asphalt (“WMA”) enhanced paving segment with our Evotherm® family of products, with over 50,000 miles of Evotherm® asphalt having been placed into service in the United States. Evotherm’s® unique chemistry allows paving at temperatures up to 100 degrees Fahrenheit lower than traditional hot mix asphalt (which typically runs between 300 and 325 degrees Fahrenheit), and lower than temperatures achieved by competing WMA technologies. The product, which is added during the mixing of rock aggregate and liquid asphalt, requires no other modification to the paving process. Performance benefits of the Evotherm® product include extending the paving season into colder weather conditions, enabling service to more distant jobsites, accelerating project completion and improving worker safety. According to industry standard predictive lab tests, roads constructed with Evotherm® technology have improved aggregate adhesion properties and longer pavement life. Evotherm® carries environmental benefits as well, reducing production-related CO2 emissions up to 30 – 35% and lowering jobsite emissions by reducing the fumes typically associated with hot mix asphalt paving. Evotherm® also delivers significant savings per ton of mix, making this an attractive product during times of constrained municipal resources and budgets.

According to the National Asphalt Paving Association, WMA paving technology is used annually in 30% of all new highway construction in the U.S. The relevant advantages of WMA paving, and of Evotherm® in particular, are expected to lead to growth, both in the United States and internationally. The product is already gaining market acceptance in China and Europe, with 15,000 kilometers placed in service in each region. We believe additional growth opportunities exist in Europe, Latin America and elsewhere in Asia, addressable through our existing distribution capabilities in each of these regions.

Customers

We supply over 100 asphalt additive products and technologies to approximately 500 customers under numerous well-known industry brands such as Evotherm®, Ralumac® and Indulin®. Technology centers located in the United States, China, Europe and India create market insights for product development customized to local and regional markets.

Competition

We compete on the basis of deep knowledge of our customers’ business and extensive insights into road building technologies and trends globally. We use these strengths to develop consultative relationships with government departments of transportation, facilitating new technology introduction into key markets around the world. Our combined expertise in the disciplines of chemistry and civil engineering provides a

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comprehensive understanding of the relationship between molecular structure of our chemistries and their impact on the performance of pavement systems. This allows us to develop products customized to local markets and consistently deliver cost-effective solutions for our clients. Our competitors in pavement technology include AkzoNobel, Arkema and ArrMaz, as well as other competitors.

Oilfield Technologies

Our oilfield technologies group produces and sells a wide-range of innovative specialty chemical products for the global oilfield industry, including well service additives and chemical solutions for production and downstream applications.

Well Service Additives.   Our well service additive products are formulated to increase emulsion stability and aid in fluid loss control for oil-based drilling fluids. Other additives include rheology modifiers, which are used to improve the viscosity properties of oil-based fluids, and are typically used in deep water or cold temperature applications and wetting agents, which provide improved wetting of solids and aid in the efficiency of the drilling process. This family of products aids in accessing difficult to reach oil and gas reserves, both on and offshore around the globe.

Production and Downstream.   Our production and downstream products serve as corrosion inhibitors or their components. Crude oil and natural gas production is characterized by variable production rates and unpredictable changes due to the nature of the produced fluids including but not limited to water and salt content. Our corrosion inhibitors maximize production rates by reducing equipment downtime from corrosion of key equipment and pipe.

Customers

We sell our oilfield technologies to over 60 customers around the globe. Our relationships with our top ten customers have been in place for more than ten years, and we work extremely closely with our customers on their product requirements.

Competition

We compete on the basis of our ability to understand our customers’ applications and deliver solutions that aid in their improvement of the exploration and production of oil and gas for the end users. Additionally, this application expertise coupled with our strong understanding of CTO based chemistry allows for rapid development of solutions to challenges in the field. Our scale and flexibility of manufacturing are the final piece that helps deliver the creativity, expedience and peace of mind the customers in oilfield require from their best suppliers. Our competitors include Georgia-Pacific, Lamberti, Kraton and several others.

Industrial Specialties

Our industrial specialties group manufactures specialty chemicals — including adhesive tackifiers, agrochemical dispersants, lubricant additives, corrosion inhibitors and ink resins — used in industrial settings. Our technical expertise and formulation capabilities allow us to develop innovative products to meet our customers’ various needs.

Adhesives.   We are a leading global supplier of tackifier resins which provide superior adhesion to difficult-to-bond materials to the adhesives industry. Adhesive applications for our products include construction, product assembly, packaging, pressure sensitive labels and tapes, hygiene and road markings.

Agrochemicals.   We produce dispersants for crop protection products as well as other naturally derived products for agrochemicals. Crop protection formulations are highly engineered, highly regulated and cover a range of different formulation types, from liquids to solids. We deliver a wide range of dispersants that are high performing and consistent. In addition, our crop protection products are approved for use as inert ingredients in agrochemicals by regulatory agencies throughout the world.

Lubricants.   We supply lubricant additives and corrosion inhibitors for the metalworking and fuel additives markets. Our lubricant products are multi-functional additives which contribute to lubricity, wetting, corrosion inhibition, emulsification and general performance improvement. Our products are also valued because of their ease in handling, robust performance and improved formulation stability.

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Printing Inks.   We are a leading supplier of ink resins from renewable resources to the global graphic arts industry for the preparation of printing inks. Our products improve gloss, drying speed, viscosity, adhesion and rub resistance of the finished ink to the substrate. We produce a wide array of resins, typically specifically tailored to a customer’s use, which can vary by application, pigment type, end use, formulation and manufacturing and printing process.

Intermediates.   Our functional chemistries are sold across a diverse range of industrial markets including, among others, paper chemicals, textile dyes, rubber, cleaners, mining and nutraceuticals.

Customers

We sell our industrial specialty chemicals to approximately 500 customers around the globe. We have an over twenty-year relationship with many of our significant customers in this business. We work extremely closely with our customers on their product requirements. Our sales to the Flint Group accounted for more than 10% of the Company’s total sales for 2015.

Competition

In industrial specialties, our customers select the product that provides the best balance of performance, consistency and price. Reputation and commitment to our customer’s industry are also valued by our customers and allow us to win business when other factors are equal. In our adhesives business, our products compete against other tackifiers, including other TOR-based tackifiers as well as tackifiers produced from gum rosin and hydrocarbon starting materials. In addition, the choice of polymer used in an adhesive formulation drives the selection of tackifier. In agrochemicals, the selection of a dispersant is made early in the product development cycle and the formulator has a choice among Ingevity’s sulfonated lignin products, lower quality lignosulfonates and other surfactants such as naphthalene sulfonates. In lubricants, we compete against other producers of distilled tall oil and additives. In inks, our products compete against other resins that can be derived from TOR, gum rosin and, to a lesser extent, hydrocarbon sources. In our intermediates business, our TOFA competes against widely available fats and oils derived from soy, rapeseed, palm, cotton and tallow sources.

Competitors are different depending on the product, application and region and include Kraton, Georgia-Pacific, Eastman Chemical, ExxonMobil, Borregaard, Lawter, Respol/Forchem, as well as several others.

Performance Materials

We engineer, manufacture and sell wood-based, chemically activated carbon products, produced through a highly technical and proprietary process primarily for use in gasoline vapor emission control systems in cars, trucks, motorcycles and boats. We have produced and sold activated carbon for over 100 years, including over 30 years for our automotive application. We are the global leader in this automotive category, with over 750 million units installed globally since we entered this business. We also produce a number of other activated carbon products for the food, water, beverage and chemical purification industries, to maximize the productivity of our manufacturing assets.

Our automotive carbon products capture gasoline vapor emissions that would otherwise be released into the atmosphere as volatile organic compounds (“VOCs”) which contain hazardous air pollutants and can photochemically react to form ozone and secondary organic aerosols which themselves lead to the formation of haze and particulate pollution. These gasoline vapor emissions (which are distinct from tailpipe emissions) are released primarily (i) during refueling, (ii) when a vehicle is parked during the daytime, as a result of the expansion of the fuel tank in warmer daytime temperatures and (iii) as “running loss”, as a result of the expansion of vapors in the fuel tank from increased temperatures as a result of operation of the vehicle.

The company’s automotive carbon products are typically part of vehicle based gasoline vapor emissions control systems which can range from systems equipped with an approximately one liter carbon canister that captures one day of diurnal parking emissions, to more sophisticated Onboard Refueling Vapor Recovery (“ORVR”), running loss and multiday diurnal parking systems with a two to three liter carbon canister that captures over 98% of the gasoline vapor emissions.

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The captured gasoline vapors are then largely purged from the carbon and directed to the engine where they are used as supplemental power for the vehicle. In this way, the company’s automotive carbon products are part of a system that is both an environmental control and energy recovery application. We estimate that for 2015 the company’s products collectively prevented over 10,000 metric tons of VOC emissions each day and returned the equivalent of 3.7 million gallons of gasoline each day to supplementally power vehicles which would have otherwise been lost to the atmosphere.

Environmental standards drive the implementation of gasoline vapor emission control systems by automotive manufacturers. While tailpipe emissions on vehicles are well recognized, understood and regulated, gasoline vapor emissions from vehicles have been lightly regulated in many countries outside the United States and Canada. For those countries that have not significantly regulated gasoline vapor emissions, enacting more stringent regulations represents a low-cost, high-return opportunity to address their air quality issues. The annual global sales of light duty vehicles (i.e. passenger and light commercial vehicles) that are powered with gasoline are forecast to grow from approximately 71 million to approximately 91 million vehicles (+28%) from 2014 to 2025. Most of this growth is expected to occur outside of the United States and Canada in countries and regions where gasoline vapor emission standards significantly lag the modern, highly effective standards of the United States and Canada. Adoption of modern gasoline vapor emission standards in these regions would have significant, positive environmental and energy efficiency impacts and provide significant upside growth potential for the company’s automotive carbon products.

The United States and Canada have led the world in recognizing and addressing the harm to air quality caused by gasoline vapor emissions, and have recently enacted regulatory standards that will further reduce these emissions to “near zero” levels by 2022 and will result in significant increases in the use of our patented canister “scrubber” technologies over the next several years. Other countries have significantly lagged in the adoption of regulatory standards that would reduce these gasoline vapor emissions, focusing instead on regulating the more “visible” tailpipe emissions. These other countries are using a gasoline vapor emission standard that is functionally equivalent to a 1981 U.S. regulatory standard. As a result, in Europe, Asia and South America, gasoline vapor emissions are the primary source of automotive VOC emissions. In China alone, hydrocarbon emissions from gasoline vapor emissions sources on an automobile are five to ten times higher than from the tailpipe.

As recognized experts in the field of gasoline vapor emission control, Ingevity has been working with regulatory bodies and relevant third parties in China, Japan, Mexico, Brazil and the European Union to help them understand and move towards more effective regulatory standards similar to those in place in the United States and Canada. Regulatory indications of adoption and implementation of more stringent vapor emissions standards outside of the United States and Canada include the following:

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On September 2, 2013, the Beijing Environmental Pollution Bureau (“EPB”) declared “war on pollution” and released a detailed plan to reduce pollution and improve air quality. The primary goal is to reduce Beijing’s 2017 particulate matter (PM2.5) levels by 25% from a 2012 baseline. Stated in the EPB’s plan is that by 2015, they will complete an ORVR standard and implementation plan for gasoline vehicles. Ingevity believes that implementation could be delayed until 2017. Beijing EPB published draft test procedures for public comment in late 2015 that included provisions for both ORVR and a 48-hour diurnal and hot soak test that is based upon the U.S. Tier 2 requirements. Beijing EPB stated their intended implementation date for the new standards is December 1, 2017. These changes should result in an increase in size of the system

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from an approximately 0.5 – 1 liter carbon canister that captures one day of diurnal parking emissions, to a more sophisticated ORVR and multiday diurnal parking system with a two to three liter carbon canister containing a higher performance carbon product.

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The European Commission (“EC”) is considering incrementally more stringent gasoline vapor emission regulations with its Euro 6c standards. A working group was established by the EC that has outlined increasing the stringency of their current standards to a 2-day diurnal parking emission standard that would generally increase canister volumes from 0.5 – 1 to 1.5 liters. Ingevity believes the test procedures and standards will be finalized by the middle of 2016 and implemented within the Euro 6c standards package.

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Sao Paulo is experiencing tremendous ozone problems and needs VOC reductions for improvement. CONAMA is the national authority with responsibility for establishing new vehicle emissions standards in Brazil and is presided over by the Minister of Environment. Sao Paulo’s CETESB, the technical arm under the Secretary of the Environment, desires to have CONAMA add ORVR to the next phase of vehicle standards, called Proconve 7. They must first get an approval and recommendation from AEA (Brazil’s Association of Automotive Engineers) and ABNT (Brazil Association for Technical Norms) before also seeking alignment with IBAMA. AEA has been working to finalize a set of test procedures that includes ORVR for addition to Proconve 7, and adding ORVR to Proconve 7 is likely in our view. The target date for Proconve 7 implementation is 2019, but this date could slip as a result of the economic problems currently facing Brazil. Brazil’s tailpipe standards are similar to U.S. Tier 2 but corrected for the high ethanol content of Brazilian fuels. Due to CETESB’s strong preference for ORVR and its low overall cost, Ingevity believes that Proconve 7 could implement by 2020.

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South Korea is currently phasing in some U.S. Tier 2 diurnal parking emission standards, which generally require activated carbon canister volumes greater than 1.3 liters and an increased use of pelletized carbon. In 2018, South Korea will begin phasing in portions of the U.S. Tier 3 “near zero” full vehicle diurnal parking emission standards that will favor the use of low emission and air induction system diurnal parking emission activated carbon technologies.

See also “Risk Factors — Adverse conditions in the automotive market may adversely affect demand for our automotive carbon products,” and “Risk Factors — If increasingly more stringent air quality standards worldwide are not adopted, our growth could be impacted.”

Current regulatory standards in the United States and Canada require that gasoline vapor control devices remain effective for the entire life of the vehicles on which installed. The end of lifetime requirements for most vehicles is 10 years or 120,000 miles, but will increase to 15 years or 150,000 miles for a large segment of these U.S. vehicles. Ingevity has a substantial, decades long track record of providing life-of-vehicle product performance based on our unique capability to engineer a very specific nanoscale porosity into the carbons on a large commercial scale. Given the imperative for automotive manufactures to produce vehicles capable of meeting these long term requirements, or potentially face expensive recalls and unfavorable publicity, there is an increased risk to use other producers who do not have a comparable, proven history, particularly given the significant costs associated with non-compliance should a competitor’s offering fail to maintain effectiveness over vehicle lifetimes. Additionally, because these gasoline vapor control systems are certified as “environmental devices” for models currently in production, it is difficult and costly to replace the company’s products within the vehicle’s control system with a competitive product during the vehicle’s model/platform production life due to the high cost of recertification.

As a result of decades of innovation and production, Ingevity is able to produce products that are effective in smaller amounts than competitors’ offerings, meaning less product is required — which results in savings through the use of a smaller and less costly canister in the overall emissions control system. Continued innovation and manufacturing know how should allow this edge to continue even as competitors improve their product offerings.

Furthermore, Ingevity is further uniquely positioned to capitalize on the opportunity afforded by the adoption of these modern vapor emission regulatory standards, which will, as a practical matter (given current technology), require manufacturers of light duty vehicles in these countries to incrementally install

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advanced gasoline vapor control technology with carbon capable of meeting the new regulatory standards. Based on the regulatory trends and expected growth in vehicles, Ingevity management estimates that the market for its automotive emissions products could double within the next five to seven years. Ingevity, through its proprietary technology, trade secrets and confidential manufacturing know-how, has unparalleled capability and expertise to manufacture the high performance carbon products required to meet these regulatory standards, as well as more stringent standards likely to be imposed in the years to come. These same capabilities and expertise will enable Ingevity to maintain its position in the United States and Canada markets as they advance their standard to “near zero” gasoline vapor emission levels.

The company also produces a number of other activated carbon products for the food, water, beverage and chemical purification industries, to maximize the productivity of our manufacturing assets.

The company’s automotive carbon products are not a part of the automotive emissions systems that are the subject of the announcement by Volkswagen AG concerning the failure of certain of its diesel engine vehicles to meet certain clean air standards. The company’s carbon products capture the emission of fuel vapors from gasoline tanks, and have been in service reliably for decades. See “Core Strengths — Unique Decades-Long Track Record of Automotive Carbon Products Meeting Emission Compliance Standards.” The Volkswagen emission systems at issue involve tailpipe emissions from their diesel vehicles, and are not at all related to capturing gasoline vapor emissions from fuel tanks.

In 2015, our Performance Materials segment provided sales of  $257 million and Segment EBITDA of $92 million. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Ingevity” for a reconciliation of Segment EBITDA to segment profit under U.S. GAAP.

Production

Activated carbon is an amorphous form of carbon characterized by a high volume of nanoscale pores. “Activation” refers to the process of developing these pores. The size, shape and volume of the pore structure and the surface chemistry of the pore are critical for driving performance in various applications.

Activated carbons are typically produced from either a thermal or chemical process utilizing a wide variety of carbonaceous raw materials. The thermal process, the most widely used activation process, uses rotary kilns or multi-hearth furnaces to carbonize and activate the raw material. This process operates at a much higher temperature and at a lower yield than the chemical activation process. Typical raw materials include bituminous coal, lignite and coconuts. Thermally activated carbons are usually used for “catch and dispose” applications, whereby the carbon is used to capture certain compounds and the carbon product is then disposed of or regenerated.

Ingevity employs a more specialized activation process, whereby chemical catalysts (most often phosphoric acid or zinc chloride) and various heating methods are used to facilitate the development of porosity. This process operates at a lower temperature and typically has higher yields than a thermal process. Carbons produced by this method typically have larger pores than thermally activated carbons and can be used in both “catch and dispose” applications and “catch and release” applications, whereby the carbon is used to capture and temporarily hold on to certain compounds which are then released in a controlled manner under specific operating conditions.

We use hardwood sawdust to produce chemically activated carbon, which, because of its higher pore volume, pore structure and high surface area, is well-matched for a variety of applications and ideally suited for the “catch and release” automotive application of capturing and reusing gasoline vapor emissions.

Customers

We sell our automotive products to over 60 customers around the globe. We are the trusted source of these products for many of the world’s largest automotive parts manufacturers, including Aisan Industry, Delphi Automotive, MAHLE, and many other large and small components manufacturers throughout the global supply chain. Our relationship with many of our customers and their customers — the vehicle manufacturers themselves (including every one of the top 15 global automotive manufacturers) — have been in place for most of our history in this application. Ingevity also produces activated carbon products for the food, water, beverage and chemical purification industries, which are sold to nearly 90 customers throughout the world.

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The company operates primarily through a direct sales force in North America as well as its other major markets and also has a smaller, focused network of agents and distributors that have established a strong direct sales and marketing presence.

Competition

In automotive carbon, Ingevity has a unique decades-long track record of providing life-of-vehicle performance, with over 750 million units installed. Given the imperative for automotive manufacturers to produce vehicles for the United States and Canadian markets capable of meeting life-of-vehicle emission standards, or potentially face expensive recalls and unfavorable publicity, our automotive carbon products provide our customers the low-risk choice in this high performance application. Our competitors in the automotive application include Cabot Corp. and Kuraray, among others. Our process purification business competes mainly in the United States in the food, beverage, chemical and water purification applications. Our competitors in this segment include Cabot, Calgon Carbon, Osaka Gas/Jacobi Carbons and several domestic U.S. manufacturers and distributors of imported products.

Capital Expenditures

On average steady-state required spending on continuity capital (e.g., maintenance, HS&E and regulatory) for the business is estimated to be equal to or slightly less than annual Depreciation and Amortization (“D&A”) expense. In any given year, however, continuity capital spending can vary from the average significantly given the nature of some required projects. In addition to continuity capital spending, we would expect to invest additional capital as attractive opportunities for high rate of return cost reduction or expansionary projects warrant. This spending amount may also vary significantly on a year to year basis depending on factors such as timing of project spending and the opportunities at hand.

Raw Materials and Energy

Performance Chemicals.   The primary raw material used in our performance chemicals segment is CTO, a co-product of the kraft pulping process, where pine is used as the source of the pulp. CTO is produced by acidulating BLSS, which is recovered during the kraft pulping process. The CTO is separated by distillation into TOR, TOFA and other biofractions. Consumers of CTO can purchase BLSS from pulping mills that do not have acidulation capacity (in which case the BLSS will need to be acidulated into CTO), and purchase CTO from pulping mills that do have acidulation capacity.

The availability of CTO is directly linked to the production output of kraft mills using pine as their source of pulp. As a result, there is a finite global supply of CTO — with global demand for kraft pulp driving the global supply of CTO, rather than demand for CTO itself. Most of the CTO made available for sale by its producers is covered by long-term supply agreements, further constraining availability.

At the time of the separation, we intend to enter into a long-term supply agreement with WestRock pursuant to which we will purchase all of the CTO output from WestRock’s existing kraft mills, subject to certain exceptions. Beginning in 2025, either party may provide a notice to the other party terminating the agreement five years from the date of such notice. Beginning one year after such notice, the quantity of products provided by WestRock under the agreement will be gradually reduced over a four-year period based on the schedule set forth in the agreement. In addition, from 2022 until 2025, either party may provide one-year notice to remove a kraft mill as a supply source. The two largest kraft mills under the agreement currently are expected to supply approximately 18.5 to 20% and 16.5% to 17.5%, respectively, of the total amount of products expected to be supplied under our agreement with WestRock. See “Certain Relationships and Related Person Transactions — Crude Tall Oil and Black Liquor Soap Skimmings Agreement.” This agreement will include pricing terms based on market prices. The company also has agreements with other suppliers to satisfy substantially all of the balance of our expected requirements of CTO for 2016.

We believe that we are well positioned to initially have sufficient CTO required for our operations. However, if any of our suppliers (including WestRock) fail to meet their respective demands under our supply agreements or we are otherwise unable to procure an adequate supply of CTO, we would be unable to produce the quantity of products that we have historically produced. In addition, if WestRock exercises

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its rights to terminate the agreement or remove a kraft mill as a supply source, and we are unable to arrange a substitute supply of CTO, we would be unable to continue to produce the same quantity of products. In the event that WestRock exercises its right to terminate our supply agreement with them or remove a kraft mill as a supply source, we may be able to obtain substitute supplies of CTO from other suppliers, spot purchases or a new contract with WestRock. Additionally, there are other pressures on the availability of CTO. Some kraft pulp mills may choose to consume their production of CTO to meet their energy needs rather than sell the CTO to third parties. Furthermore, weather conditions have in the past and may in the future affect the availability and quality of pine trees used in the kraft pulping process and therefore the availability of CTO meeting the company’s quality standards. See “Risk Factors — Our Performance Chemicals segment is highly dependent on CTO which is limited in supply; lack of access to sufficient CTO would impact our ability to produce CTO-based products.”

Also, regulatory incentives and mandates in Europe for the use of biofuel have placed additional pressure on CTO availability. See “Risk Factors — The European Union’s directive on the promotion of the use of energy from renewable resources and similar legislation in the United States and elsewhere may incentivize the use of CTO as a feedstock for production of alternative fuels.”

Finally, CTO as a raw material is subject to significant pricing pressures. See “Risk Factors — Pricing for CTO is subject to particular pricing pressures by reason of limited supply and competing demands for end use, and we may be limited in our ability to pass on increased costs to our customers,” and “Risk Factors — The company’s oilfield technologies business is significantly affected by trends in oil and natural gas prices that affect the level of exploration, development and production activity.”

The other key raw materials used in the Performance Chemicals business are nonylphenol, pentaerythritol and ethylene amines. These are sourced where possible through multiple suppliers to protect against supply disruptions and to maintain competitive pricing.

Performance Materials.   The primary raw material (by volume) used in in the manufacture of our activated carbon is hardwood sawdust. Sawdust is readily available, and is sourced through multiple suppliers to protect against supply disruptions and to maintain competitive pricing.

We also consume phosphoric acid, which is used to chemically activate the hardwood sawdust. This phosphoric acid is sourced through multiple suppliers to protect against supply disruptions and to maintain competitive pricing. The market price of phosphoric acid is affected by the global agriculture market as the majority of global phosphate rock production is used for fertilizer production and only a portion of that production is used to manufacture purified phosphoric acid. In the recent past, there have been price run-ups in phosphoric acid due to increased phosphate rock demands in global agriculture, which have in turn negatively affected our business.

Energy.   Our manufacturing processes require a significant amount of energy. In particular, the company is dependent on natural gas to fuel its carbon activation processes and is therefore subject to the market fluctuations in the price of natural gas. Although the company believes that it currently has a stable supply of and infrastructure for natural gas sufficient for its operations, we are subject to volatility in the market price of natural gas.

Environment

The company’s operations are subject to extensive regulation by federal, state and local authorities, as well as regulatory authorities with jurisdiction over foreign operations of the company, including relating to the discharge of materials into the environment and the handling, disposal and clean-up of waste materials, and otherwise relating to the protection of the environment. It is not possible to quantify with certainty the material effects that compliance with these may have upon the capital expenditures, earnings or competitive position of the company, but it is anticipated that such compliance will not have a material adverse effect on any of the foregoing. For a further discussion, see “Risk Factors — Our business involves hazards associated with chemical manufacturing, storage, transportation and disposal,” and “Risk Factors — The company’s operations are subject to a wide range of general and industry specific environmental laws and regulations.” Environmental regulation and legal proceedings have the potential for involving significant costs and liability for the company.

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Intellectual Property

Intellectual property, including patents, closely guarded trade secrets and highly proprietary manufacturing know-how, as well as other proprietary rights, is a critical part of maintaining our technology leadership and competitive edge. Our business strategy includes filing patent and trademark applications where appropriate for proprietary developments, as well as protecting our trade secrets. We work actively to create, protect and enforce our intellectual property rights. The protection afforded by the company’s patents and trademarks varies based on country, scope and coverage, as well as the availability of legal remedies. Although our intellectual property taken as a whole is material to the business, other than our “canister bleed emissions” patent, which is part of our automotive business, there is no individual patent or trademark the loss of which could have a material adverse effect on the business. Our Evotherm® Warm Mix Asphalt technology is supported by numerous global patents. See “Risk Factors — If we are unable to adequately protect our intellectual property, we may lose significant competitive advantages,” and “Risk Factors — We are subject to cyber-security risks related to our intellectual property and certain other data.”

Research and Development

We employ a world-class team of engineering and scientific professionals, many of whom hold Ph.D. degrees and are considered some of the foremost experts in their fields, with deep knowledge of our customers’ markets. We spent $7 million, $8 million and $11 million for the years ended December 31, 2015, 2014 and 2013, respectively, on research and development which were expensed as incurred.

Seasonality

There are a variety of seasonal dynamics that impact our businesses, though none materially affect financial results, except in the case of the pavement technologies business, where roughly 75% of its revenue is generated between April and September. From a supply perspective, this seasonality is effectively managed through pre-season inventory build then active inventory management throughout the year.

Employees

We currently employ approximately 1,500 employees, of whom 76% are employed in the United States and 24% are employed internationally. Approximately 34% are represented by labor unions, domestic and international, under various collective bargaining agreements. We engage in negotiations with labor unions for new collective bargaining agreements from time to time based upon expiration dates of agreements and statutory requirements. We consider our relationships with employees to be generally good.

The collective bargaining agreement with the Covington Paperworkers Union (“CPU”) covering certain employees in the company’s Covington, Virginia facility also covers production employees of the adjoining WestRock Company paper mill. Similarly, there is a collective bargaining agreement with the International Brotherhood of Electrical Workers (“IBEW”) for WestRock Covington hourly employees that affects certain hourly employees working at the company’s Covington facility. The CPU agreement has been extended until December 2016 and the IBEW agreement has been extended until January 2017. The manner in which these current shared collective bargaining arrangements will be separated and what new terms may be included in any new contracts that may be negotiated, has not been fully determined. See “Risk Factors — Work stoppages and other labor relations matters may have an adverse effect on our financial condition and results of operations.”

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Properties

We are headquartered in North Charleston, South Carolina and operate manufacturing facilities in the United States, Brazil and China and warehouse and distribution facilities globally. The following locations represent the principal properties of Ingevity.

​	Own / Lease	Functional Use
North Charleston, South Carolina	Own	Corporate Headquarters; Application Labs; Performance Chemicals Manufacturing
Covington, Virginia	Lease	Performance Materials Manufacturing
DeRidder, Louisiana	Lease(1)	Performance Chemicals Manufacturing
Duque de Caxias, Rio de Janeiro, Brazil(2)	Own	Performance Chemicals Manufacturing
Palmeira, Santa Catarina, Brazil	Own	Performance Chemicals Manufacturing
Waynesboro, Georgia	Own (JV)	Performance Materials Manufacturing
Wickliffe, Kentucky	Own	Performance Materials Manufacturing
Wujiang, People’s Republic of China	Lease	Performance Materials Manufacturing
Zhuhai, People’s Republic of China	Lease	Performance Materials Manufacturing

(1)

This is a capital lease with the Industrial Development Board of the City of DeRidder, Louisiana, Inc.

(2)

During the first quarter of 2016 we decided to exit our manufacturing site in Duque de Caxias, Rio de Janeiro, Brazil.

Legal Proceedings

We are from time to time, involved in routine litigation incidental to our operations. None of the litigation in which we are currently involved, individually or in the aggregate, is material to our combined financial condition, liquidity or results of operations nor are we aware of any material pending or contemplated proceedings.

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MANAGEMENT

Executive Officers Following the Distribution

The following individuals currently serve as our executive officers and are expected to continue to serve following the separation. After the separation, none of these individuals will continue to be executive officers or employees of WestRock.

Name	Age	Position
D. Michael Wilson	53	President and Chief Executive Officer
John C. Fortson	48	Executive Vice President, Chief Financial Officer and Treasurer
Edward A. Rose	54	Executive Vice President and President of Performance Chemicals
S. Edward Woodcock, Jr.	50	Senior Vice President and President of Performance Materials
Katherine Pryor Burgeson	58	Senior Vice President, General Counsel and Secretary

Mr. Wilson serves as President and Chief Executive Officer of Ingevity. Mr. Wilson came to Ingevity from Albemarle Corporation, where he served as Executive Vice President of Albemarle and President of Albemarle’s Performance Chemicals business in 2015. Mr. Wilson served as President of Albemarle’s Catalyst Solutions business from September 2013 through 2014 and held a variety of business unit leadership roles at FMC Corporation over the course of over fifteen years, including group head of Industrial Chemicals from 2003 to 2010, and President of the Specialty Chemicals group from 2011 to 2013. Prior to FMC Corporation, Mr. Wilson served various roles at Wausau Papers and Rexam. He holds a bachelor of science degree in chemistry from the University of North Carolina and a master of business administration from the Kenan-Flagler Business School at the University of North Carolina. With three decades of global manufacturing experience and more than 15 years in the chemicals industry, Mr. Wilson is a proven leader with a strong background in business operations and a track record of achieving growth through strategic positioning and mergers and acquisitions. Mr. Wilson will also serve on the Board of Directors as a director.

Mr. Fortson serves as Executive Vice President, Chief Financial Officer and Treasurer of Ingevity. Mr. Fortson came to Ingevity from AAR Corporation where he previously served as Vice President, Finance since May 2013, and became Vice President, Chief Financial Officer and Treasurer in July 2013. Prior to joining AAR Corporation, Mr. Fortson was a Managing Director in the Investment Banking Department of Bank of America Merrill Lynch working in the firm’s New York, London and Chicago offices. Mr. Fortson is a graduate of the United States Military Academy at West Point and has a master’s in business administration from Duke University’s Fuqua School of Business. Mr. Fortson spent seven years as an infantry officer in the U.S. Army. His last assignment was as a parachute rifle company commander in the 82nd Airborne Division.

Mr. Rose serves as Executive Vice President and President of the Performance Chemicals segment of Ingevity. Mr. Rose previously served as President of WestRock’s (previously Westvaco’s, and later, MeadWestvaco’s) Specialty Chemicals Division, a position he held since 2010. From 2004 to 2009, he served as Vice President, Resins Polymers and Coating for MeadWestvaco. Over the course of 31 years with the business, Mr. Rose has led teams in business development and strategy, including new product development, bolt-on acquisitions and strategic alliances. He has held various roles as development engineer, national sales manager, business development manager, industry manager, marketing manager and group manager. He holds a bachelor of science degree in civil engineering from Clemson University.

Mr. Woodcock serves as Senior Vice President and President of Ingevity’s Performance Materials. He served as vice president of MeadWestvaco’s, and later, WestRock’s Carbon Technologies business from 2010 to 2015 after holding multiple positions of increasing responsibility within that business, most recently global business director, Automotive. During his 27-year career with the company, Mr. Woodcock has held various roles including business director, Automotive, for the Asia-Pacific region, worldwide marketing manager for the chemical division’s non-U.S. business, area sales manager for Latin America, and technical manager for the Process Technology business. At various stages of his career, he has had direct responsibility for products from each of our businesses. Mr. Woodcock holds a bachelor of science degree in chemical engineering from the University of Virginia.

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Ms. Burgeson serves as Senior Vice President, General Counsel and Secretary of Ingevity. Ms. Burgeson came to Ingevity from WestRock, where she served as Associate General Counsel, a position she held since July 1, 2015. Prior to the merger of MeadWestvaco Corporation and Rock-Tenn Company which resulted in the formation of WestRock, Ms. Burgeson served as Deputy General Counsel of MeadWestvaco, where she was lead legal counsel for commercial, corporate and mergers and acquisition-related matters. Ms. Burgeson joined Westvaco Corporation, MeadWestvaco’s predecessor in 2000. Prior to joining Westvaco, Ms. Burgeson was a partner at Cummings & Lockwood in Stamford, Connecticut. Ms. Burgeson began her legal career as an associate at Shearman & Sterling. Ms. Burgeson received her J.D. from Fordham University School of Law and her B.A. from Trinity College in Hartford, Connecticut.

Board of Directors Following the Distribution

The following table sets forth information as of March 4, 2016, regarding those individuals who are expected to serve on the Company’s board of directors following the separation. All of the nominees will be presented to WestRock Company, as the Company’s sole shareholder, for election prior to the separation.

Name	Age	Position
Richard B. Kelson	69	Chairman of the Board of Directors
Jean S. Blackwell	61	Director
Luis Fernandez-Moreno	53	Director
J. Michael Fitzpatrick	69	Director
Frederick J. Lynch	50	Director
Daniel F. Sansone	63	Director
D. Michael Wilson	53	Director, Chief Executive Officer

Mr. Kelson is the Chairman, President, and CEO of ServCo LLC, where he has served in that capacity since July 2009. Mr. Kelson also served as Alcoa’s Executive Vice President and CFO for nearly a decade, retiring in 2006 as Chairman’s Counsel. Prior to that, he was Alcoa, Inc.’s Executive Vice President – Environment, Health and Safety and General Counsel, and a member of the Executive Counsel, the senior leadership group that provides strategic direction for the company. He also served as an Operating Advisor with Pegasus Capital Advisors, L.P., a private equity fund manager from September 2006 through March 2010. Mr. Kelson served as a member of the Board of Directors of MeadWestvaco Corporation, and its predecessor, Westvaco Corporation, from 2001 to 2015, and has served as a member of the Board of Directors of PNC Financial Services Group, Inc. since 2002, Anadigics, Inc. from February 2015 to March 2016, and Commercial Metals Company since 2010, where he is lead director. He served as a Director of Lighting Science Group Corporation from October 2007 through March 2010. He was a member of the Board of Trustees at Carnegie Mellon University from 2000 to 2006 and serves on the board of the University of Pittsburgh Law School Board of Visitors. Mr. Kelson was a member of the Board of Directors for the non-profit KaBOOM, Inc. from April 2008 to November 2014, where he served as Chairperson of that board from November 2008 to November 2013.

Ms. Blackwell has served as a member of the Board of Directors and member of the Audit and Nominating and Governance Committees of Celanese Corporation, a global technology and specialty materials company, since March 2014. She has also served as a member of the Board of Directors of Essendant Inc. (formerly United Stationers Inc.), a leading national wholesale distributor of business products, since May 2007. She is currently Chair of the Governance Committee and a member of the Finance Committee at Essendant. She previously served as a member of the Board of Directors and Chairperson of the Audit Committee of Phoenix Companies, Inc., a life insurance company, from April 2004 to November 2009. Ms. Blackwell served as CEO of Cummins Foundation and Executive Vice President of Corporate Responsibility of Cummins Inc. from March 2008 until her retirement in March 2013. At Cummins Inc. she previously served as Executive Vice President and CFO from 2003 to 2008, Vice President, Cummins Business Services from 2001 to 2003, Vice President, Human Resources from 1998 to 2001, and Vice President and General Counsel from 1997 to 1998. Prior to joining Cummins, Ms. Blackwell served as the Budget Director for the State of Indiana from 1993-1995, and as the Executive

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Director of the Indiana State Lottery Commission from 1991-1992. Prior to her service on the State Lottery Commission, Ms. Blackwell was a partner at Bose McKinney & Evans LLP, where she practiced in the area of financial and real estate transactions. Ms. Blackwell has in-depth knowledge of the business operations of a publicly-traded company from her long tenure at Cummins and a strong financial acumen from her senior management experience. She has a thorough understanding of public company financial reporting and is well-versed in internal controls.

Mr. Fernandez-Moreno has been Senior Vice President of Ashland Inc., a specialty chemical company, since October 2013 and President of its Chemicals Group since April 2015. He previously served as President of Ashland Specialty Ingredients from October 2013 until April 2015. From November 2012 to October 2013, he was President of Ashland Water Technologies. Mr. Fernandez-Moreno served as Executive Vice President of HTH Water Products & Wood Protection for Arch Chemicals, Inc., from September 2010 until October 2011. Prior to joining Arch Chemicals, Mr. Fernandez-Moreno spent approximately 25 years at Rohm & Haas Company until it was acquired by Dow Chemical Company, after which he managed the newly-formed Dow Coatings Materials business until August 2010. Mr. Fernandez-Moreno has a successful history leading complex global businesses and has experience in the development and implementation of merger and acquisitions plans, including successful acquisitions, joint ventures, and divestitures.

Dr. Fitzpatrick is an independent member of the Board of Directors of McCormick & Company, a manufacturer of spices, herbs and flavorings, and serves on its Audit Committee. Dr. Fitzpatrick has served as a director since November 2001. Dr. Fitzpatrick has also served as a director of NOVOLEX, a privately held company, since 2013. Dr. Fitzpatrick has been an Executive Advisor Partner at Wind Point Partners since March 2005, and was Chairman and Chief Executive Officer of Citadel Plastics Holdings, Inc., a plastics manufacturer, from March 2007 to 2012. Previously, Dr. Fitzpatrick spent thirty years with Rohm & Haas Company, serving most recently as President and COO until 2005. Dr. Fitzpatrick served on the Board of Directors of Carpenter Technology Corporation from 1996 to 2006, and on the Board of Directors of SPX Corporation from February 2007 to 2010. Dr. Fitzpatrick’s qualifications include senior executive experience at a publicly-traded multinational company, general management experience in international operations, a high level of financial literacy, and extensive experience in mergers and acquisitions.

Mr. Lynch has served as President of Masonite International Corporation, a global manufacturer of interior doors and entry door systems, since July 2005 and Chief Executive Officer since May 2007. He has served on the Masonite International Corporation Board of Directors since June 2006. Mr. Lynch joined Masonite from Alpharma Inc., where he served as President of the human generics division and Senior Vice President of global supply chain from 2003 to 2006. Prior to joining Alpharma in 2003, Mr. Lynch spent nearly 18 years at Honeywell International Inc., most recently as Vice President and General Manager of its specialty chemical business. Mr. Lynch has extensive global operating experience in midsize to Fortune 100 multinational manufacturing corporations.

Mr. Sansone served as Executive Vice President of Strategy at Vulcan Materials Company from January 2014 to December 2014. Vulcan, an S&P 500 company, is the largest U.S. producer of construction aggregates and a major producer of ready-mixed concrete, asphalt mix and cement. At Vulcan he served as Executive Vice President and CFO from February 2010 to January 2014 and Senior Vice President and CFO from May 2005 to January 2010. From May 1997 to May 2005, he served as President of one of Vulcan’s significant operating divisions. Mr. Sansone joined Vulcan in February 1988 as Corporate Controller after serving as Director of Finance, Europe at Monroe Auto Equipment and in various roles at FMC Corporation and Kraft Incorporated. Mr. Sansone is a proven business leader with four decades of broad domestic and international experience in finance and general management in major public corporations.

Upon completion of the separation, Ingevity’s board of directors will initially be divided into three classes, with Class I comprised of two directors, Class II comprised of two directors and Class III comprised of three directors. The directors designated as Class I directors will have terms expiring at the first annual meeting of stockholders following the distribution, which Ingevity expects to hold in 2017. The directors designated as Class II directors will have terms expiring at the following year’s annual meeting of

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stockholders, which Ingevity expects to hold in 2018, and the directors designated as Class III directors will have terms expiring at the following year’s annual meeting of stockholders, which Ingevity expects to hold in 2019. Commencing with the first annual meeting of stockholders following the distribution, directors elected to succeed those directors whose terms then expire shall be elected for a term of office to expire at the 2019 annual meeting of stockholders. Beginning at the 2019 annual meeting, all of our directors will stand for election each year for annual terms, and our board will therefore no longer be divided into three classes.

At any meeting of stockholders for the election of directors at which a quorum is present, the election will be determined by a majority of the votes cast by the stockholders entitled to vote in the election, except that in the case of a contested election, the election will be determined by a plurality of the votes cast by the stockholders entitled to vote in the election.

Director Independence

We expect that a majority of our board of directors will meet the criteria for independence as defined by the rules of the NYSE.

We expect that our board of directors will determine the independence of directors annually based on a review by the directors and the Nominating and Governance Committee (“N&G Committee”). In determining whether a director is independent, we expect that the board of directors will determine whether each director meets the objective standards for independence set forth in the rules of the NYSE.

Committees of the Board of Directors

Following the distribution, the standing committees of our board of directors will include an Executive Committee, Audit Committee, Compensation Committee and the N&G Committee, each as further described below. Following our listing on the NYSE and in accordance with the transition provisions of the rules of the NYSE applicable to companies listing in conjunction with a spin-off transaction, each of these committees will, by the date required by the rules of the NYSE, be composed exclusively of directors who are independent. Other committees may also be established by the board of directors from time to time.

Executive Committee.   The members of the Executive Committee are expected to be Mr. Kelson, Ms. Blackwell, Mr. Fitzpatrick and Mr. Lynch. It is expected that Mr. Kelson will be the chairman of the Executive Committee. This committee will have the ability to exercise all the authority of the board in the management of Ingevity, except for matters expressly reserved by law for board action.

Audit Committee.   The members of the Audit Committee are expected to be Ms. Blackwell, Mr. Fitzpatrick, Mr. Fernandez-Moreno and Mr. Sansone. It is expected that Ms. Blackwell will be the chairman of the Audit Committee. The Audit Committee will have the responsibility, among other things, to review and monitor (1) the integrity of the financial statements of the company and internal controls over financial reporting, (2) the performance of the company’s internal audit function and independent auditors, including the independence and qualifications of the company’s independent auditors, (3) the compliance by the company with legal and regulatory requirements, (4) the company’s financial management and resources and (5) specific financial strategy initiatives as requested by the board or management. The responsibilities of the Audit Committee, which are anticipated to be modeled as a combination of the responsibilities of WestRock’s Audit and Finance Committees, will be more fully described in our Audit Committee charter. The Audit Committee charter will be posted on our website at www.ingevity.com and will be available in print to any stockholder that requests it. Further, the board of directors is expected to determine that Ms. Blackwell and Mr. Sansone possess accounting or related financial management expertise within the meaning of the NYSE listing standards and that each qualifies as an “audit committee financial expert” as defined under the applicable SEC rules.

Compensation Committee.   The members of the Compensation Committee are expected to be Mr. Lynch, Mr. Kelson, Ms. Blackwell and Mr. Sansone. It is expected that Mr. Lynch will be the chairman of the Compensation Committee. The Compensation Committee will have the responsibility of assisting the Board in fulfilling its responsibilities with respect to compensation of the company’s executives and non-employee directors and will have oversight of matters relating to the company’s equity compensation and employee benefits plans. The Compensation Committee (1) considers and approves all compensation

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and benefits, as well as goals and objectives, underlying such compensation for the company’s executive officers, (2) reviews compensation of the company’s non-employee directors, (3) approves plans for cash and equity compensation and sets the overall compensation strategy and compensation policies for the company’s executives and non-employee directors and (4) monitors compliance of such plans and policies with SEC rules. The responsibilities of the Compensation Committee, which are anticipated to be substantially identical to the responsibilities of WestRock’s Compensation Committee, will be more fully described in the Compensation Committee charter. The Compensation Committee charter will be posted on our website at www.ingevity.com and will be available in print to any stockholder that requests it. Each member of the Compensation Committee will be a non-employee director.

Nominating and Governance Committee.   The members of the N&G Committee are expected to be Mr. Fitzpatrick, Mr. Kelson, Mr. Lynch and Mr. Fernandez-Moreno. It is expected that Mr. Fitzpatrick will be the chairman of the N&G Committee. The N&G Committee is responsible for studying and making recommendations concerning the qualifications of all directors, and selecting and recommending candidates for election and re-election to the board of directors and persons to fill vacancies on the board of directors. The N&G Committee also reviews and considers other matters of corporate governance, including trends and emerging expectations, as well as best practices. In advising the board of directors and management, the N&G Committee may consider a range of governance matters, including board structure, board composition, committees and criteria for committee appointment, board meeting policies and the ongoing relationship between the board of directors and management. The N&G Committee also oversees the development of the company’s board leadership succession plan. The responsibilities of the N&G Committee, which are anticipated to be substantially identical to the responsibilities of WestRock’s Nominating and Governance Committee, will be more fully described in the N&G Committee charter. The N&G Committee charter will be posted on our website at www.ingevity.com and will be available in print to any stockholder that requests it.

Compensation Committee Interlocks and Insider Participation

During the company’s fiscal year ended December 31, 2015, Ingevity was not an independent company, and did not have a compensation committee or any other committee serving a similar function. Decisions as to the compensation of those who currently serve as Ingevity’s executive officers were made by WestRock, as described in the section of this information statement captioned “Compensation Discussion and Analysis.”

Corporate Governance

Stockholder Recommendations for Director Nominees.   Ingevity’s amended and restated bylaws will contain provisions that address the process by which a stockholder may nominate an individual to stand for election to the board of directors. Ingevity expects that the board of directors will adopt a policy concerning the evaluation of stockholder recommendations of board candidates by the N&G Committee.

Corporate Governance Guidelines.   The board of directors is expected to adopt a set of corporate governance guidelines in connection with the separation to assist it in guiding Ingevity’s governance practices. These practices will be regularly re-evaluated by the N&G Committee in light of changing circumstances in order to continue serving the company’s best interests and the best interests of its stockholders.

This assessment will address the candidate’s qualifications in light of the needs of the board and the company at that time given the current mix of director attributes. The company’s corporate governance guidelines are expected to contain specific criteria for board and board committee membership. In accordance with the corporate governance guidelines, the board of directors will strive to select as candidates for board membership a mix of individuals who represent diverse experience, background and thought at policy-making levels that are relevant to the company’s activities as well as other characteristics that will contribute to the overall ability of the board to perform its duties and meet changing conditions. The corporate governance guidelines will also provide that each director must meet the following criteria:

•

Be free of conflicts of interest and other legal and ethical issues that would interfere with the proper performance of the responsibilities of a director (recognizing that some directors may also be executive officers of our company).

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•

Be committed to discharging the duties of a director in accordance with the corporate governance guidelines and applicable law.

•

Be willing and able to devote sufficient time and energy to carrying out his or her duties effectively and be committed to serve on the board for an extended period of time.

•

Have sufficient experience to enable the director to meaningfully participate in deliberations of the board and one or more of its committees and to otherwise fulfill his or her duties.

The corporate governance guidelines are also expected to provide that any director who has a significant change in his or her full-time job responsibilities must give prompt written notice to the board of directors, specifying the details, and must submit to the board of directors a letter of resignation from the board of directors and from each committee of the board of directors on which the director serves. Submission of a letter of resignation provides the board of directors the opportunity to review the continued appropriateness of the director’s membership on the board of directors and committees of the board of directors under the circumstances. The board of directors may reject or accept the letter of resignation due to change in job responsibilities as it deems to be appropriate.

The N&G Committee will consider each candidate’s independence, as defined in the corporate governance guidelines and in the corporate governance standards of the NYSE. A high level of commitment will be expected from directors and consideration will be given to a candidate’s service on other boards and board committees to ensure that the candidate has sufficient time to effectively serve the company.

Board Leadership Structure.   There will be no fixed policy on whether the roles of chairman of the board of directors and chief executive officer should be separate or combined. This decision will be made in the best interests of Ingevity considering the circumstances at the time. Ingevity’s corporate governance guidelines are expected to provide that when the chairman is not an independent director, the independent directors will also select from among themselves a director to serve as a lead independent director. The lead independent director, if any, will (i) preside at all meetings of the board of directors at which the Chairman is not present, including executive sessions of the non-management directors; (ii) serve as liaison between the Chairman and the non-management directors; (iii) have authority to call meetings of the non-management directors; and (iv) perform such other functions as the board of directors may direct.

Board’s Role in Oversight of Risk Management

The board of directors is expected to have responsibility for the oversight of risk management at the company and to implement its oversight function both as a whole and through delegation to its committees. The board of directors and its committees will receive regular reports from members of senior management on areas of material risk to the company, including operational, financial, strategic, competitive, reputational, legal and regulatory risks, and how those risks are managed.

Various aspects of the board of directors’ risk oversight will be delegated to its committees, which will meet regularly and report back to the full board. The following committees are expected to play significant roles in carrying out the risk oversight function:

•

The Audit Committee will oversee risks related to the company’s financial statements, the financial reporting and disclosure processes, the financial and other internal controls, accounting and legal matters. The Audit Committee will select and retain the company’s independent auditor and will also oversee the internal audit function. The company’s independent outside auditors and the vice president of the company’s internal audit department will be expected to regularly identify and discuss with the Audit Committee risks and related mitigation measures that may arise during their regular reviews of the company’s financial statements and audit work. The Audit Committee will meet separately on a regular basis with representatives of the independent auditing firm and the vice president of the company’s internal audit department. The Audit Committee will also be expected to review management’s annual capital expenditure plans and management’s assessment of the company’s capital structure, including dividend policies and stock repurchase programs,

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debt capacity, liquidity and refinancing risk. The Audit Committee will review financing and liquidity initiatives to be proposed by management for board action and will review steps taken by management to ensure compliance with the company’s financial management policies.

•

The Compensation Committee will be expected to evaluate the risks and rewards associated with the company’s compensation philosophy and programs. The Compensation Committee will review and approve compensation programs with features designed to reward long-term achievement and discourage excessive short-term risk taking. It is expected that an independent executive compensation consulting firm hired by the Compensation Committee will advise the committee with respect to executive compensation practices and programs, including the risks associated with each of them.

•

The N&G Committee will monitor our corporate governance practices against applicable requirements, including those of the NYSE, and against evolving developments and will be responsible for our codes of conduct and ethics, including the code of business conduct applicable to the company’s employees. The N&G Committee will also consider issues associated with the independence of the company’s board members.

The company’s general counsel will be expected to inform each committee and the board of directors of relevant legal and compliance issues, and each committee will also have access to the company’s outside counsel when they deem it advisable. Each committee will have the authority to engage such independent counsel as the committee deems necessary to carry out its duties and responsibilities.

Annually, the company’s CEO and other senior executives, as deemed appropriate by management or the board members, will make a presentation to our board of directors about risks associated with our business and how the company manages and mitigates those risks. Because overseeing risk is an ongoing process, the board of directors also will be expected to discuss risk throughout the year at other meetings in relation to proposed actions or discussions with respect to various aspects of our operations.

Policies on Business Ethics.   In connection with the separation, Ingevity is expected adopt a Code of Conduct that requires all of its business activities to be conducted in compliance with laws, regulations and ethical principles and values. The Ingevity Code of Conduct will apply to all Ingevity directors and employees worldwide, including the CEO and the CFO. These policies and principles will support the company’s core values of integrity, respect for the individual, commitment to excellence and teamwork.

The Code of Conduct will be posted on our website at www.ingevity.com and will be available in print to any stockholder that requests it. Any future changes or amendments to the Code of Conduct and any waiver of the Code of Conduct that applies to our CEO, CFO, principal accounting officer or member of the board of directors, will be posted on the company’s website at www.ingevity.com.

Procedures for Treatment of Complaints Regarding Accounting, Internal Accounting Controls and Auditing Matters.   In accordance with the Sarbanes-Oxley Act of 2002, Ingevity expects that its Audit Committee will adopt procedures for the receipt, retention and treatment of complaints regarding accounting, internal accounting controls and auditing matters and to allow for the confidential, anonymous submission by employees and others of concerns regarding questionable accounting or auditing matters.

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compensation discussion and analysis

This section presents information concerning compensation arrangements for Ingevity’s named executive officers. Ingevity’s named executive officers are the individuals who will be Ingevity’s chief executive officer, chief financial officer and the three most highly compensated Ingevity executive officers based on their compensation at WestRock (and as applicable MWV) during the calendar year ending December 31, 2015. We provide historical information concerning the compensation of the Ingevity named executive officers who are listed below:

•

D. Michael Wilson — President and Chief Executive Officer

•

John C. Fortson — Executive Vice President, Chief Financial Officer and Treasurer

•

Edward A. Rose — Executive Vice President and President of Performance Chemicals

•

Katherine Pryor Burgeson — Senior Vice President, General Counsel and Secretary

•

S. Edward Woodcock, Jr. — Senior Vice President and President of Performance Materials

Background

Ingevity is not yet an independent company, and does not have a compensation committee or any other committee serving a similar function. Therefore, decisions as to the compensation of those who currently serve as Ingevity’s executive officers were made by WestRock since the Merger and by MWV prior to the Merger. Following the Separation, the compensation philosophy of Ingevity and compensation decisions for Ingevity’s executive officers will be made by the Compensation Committee. In addition, following the Separation, the Compensation Committee will review the impact of the Separation on all aspects of compensation and determine, in its sole discretion, whether to make appropriate adjustments to compensation to reflect the Separation. Each of Ingevity’s five named executive officers is currently, and was as of December 31, 2015, an executive of WestRock.

Three of Ingevity’s named executive officers (Ms. Burgeson and Messrs. Rose and Woodcock) served as executives of MWV prior to the Merger. Therefore, the historic compensation information provided below for each of Ms. Burgeson and Messrs. Rose and Woodcock for the fiscal years 2014 and 2013 reflects the compensation each earned at MWV according to its legacy compensation and benefit plans and agreements (“MWV Legacy Programs”). The initial compensation of Ms. Burgeson and Messrs. Rose and Woodcock for the calendar year 2015 was set by MWV prior to the Merger pursuant to the MWV Legacy Programs; provided that the compensation of Ms. Burgeson and Messrs. Rose and Woodcock was subsequently adjusted by WestRock to reflect each executive officer’s role at Ingevity. Messrs. Rose and Woodcock have historically worked exclusively for the Specialty Chemicals division of MWV and will work for Ingevity in the roles of Executive Vice President of Performance Chemicals and Senior Vice President of Performance Materials, respectively. Ms. Burgeson worked in the legal department at the parent company MWV, and then WestRock, until November 1, 2015, at which time she was named Senior Vice President, General Counsel and Secretary of Ingevity.

Both Mr. Wilson and Mr. Fortson joined WestRock in 2015 after the Merger. Accordingly, the compensation reported in the tables below for both Messrs. Wilson and Fortson was determined by WestRock according to its current compensation programs and philosophy while taking into account the transitional nature of the year in anticipation of the Separation.

In connection with the Merger, WestRock assumed the sponsorship of each of the MWV Legacy Programs as well as any rights and obligations of MWV under such MWV Legacy Programs. For details on how the Merger impacted specific awards originally granted by MWV, see “Historical Compensation of Executive Officers Prior to the Separation — Grants of Plan Based Awards in 2015” below.

The Ingevity named executive officers were compensated largely in accordance with WestRock’s compensation philosophy and structure, although due to the Merger in July of 2015 and in anticipation of the Separation, the 2015 fiscal year was not a typical year. After the Separation, the compensation of the Ingevity named executive officers will likely remain in place for the immediate future and any changes in the compensation philosophy and structure will be subject to the review and approval of the Compensation Committee.

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Historical Compensation of Executive Officers Prior to the Separation

The following tables provide information concerning historical compensation paid to each of the Ingevity named executive officers. Amounts presented for fiscal 2013 and 2014 were paid to the named executive officers by MWV prior to the Merger. Amounts presented for the year 2015 were paid by MWV until the closing of the Merger on July 1, 2015 and by WestRock following the closing of the Merger through December 31, 2015. Amounts presented herein do not necessarily reflect the compensation that these individuals will receive following the Separation as employees of Ingevity.

Prior to the Merger, MWV fiscal years ended on December 31. For 2015, WestRock operated on a September 30 fiscal year end. Since Ingevity will also operate on a December 31 fiscal year end, for the purposes of comparison, the amounts reported for 2015 are reported as of the end of the calendar year.

Summary Compensation Table.

The following table presents information concerning total compensation paid to Ingevity’s named executive officers.

Name and Principal Position	Year		Salary(1)			Bonus(2)			Stock Awards(3)			Option Awards(3)			Non-Equity Incentive Plan Compensation(4)			Change in Pension Value & Non-qualified Deferred Comp Earnings(5)			All Other Compensation(6)			Total
D. Michael Wilson President & CEO	​	2015	​	$	266,667	​	$	500,000	​	$	0	​	$	0	​	$	0	​	$	0	​	$	22,917	​	$	789,584
John C. Fortson EVP, CFO & Treasurer	​	2015	​	$	95,000	​	$	250,000	​	$	0	​	$	0	​	$	0	​	$	0	​	$	11,813	​	$	356,813
Edward A. Rose EVP & President of Perf. Chemicals	​	2015	​	$	379,166	​	$	0	​	$	199,874	​	$	0	​	$	203,500	​	$	378,846	​	$	34,716	​	$	1,196,102
	​	2014	​	$	326,000	​	$	0	​	$	209,957	​	$	82,953	​	$	284,625	​	$	755,432	​	$	20,185	​	$	1,679,152
	​	2013	​	$	298,940	​	$	0	​	$	205,448	​	$	90,036	​	$	150,000	​	$	144,004	​	$	25,220	​	$	913,648
Katherine Pryor Burgeson SVP, Gen’l Counsel & Secretary	​	2015	​	$	312,966	​	$	50,000	​	$	185,636	​	$	77,322	​	$	148,721	​	$	159,025	​	$	24,963	​	$	958,812
	​	2014	​	$	312,966	​	$	0	​	$	192,370	​	$	82,459	​	$	122,526	​	$	387,147	​	$	14,713	​	$	1,112,181
	​	2013	​	$	312,966	​	$	0	​	$	171,207	​	$	69,132	​	$	25,000	​	$	0	​	$	22,945	​	$	601,250
S. Edward Woodcock, Jr. SVP & President of Perf. Materials	​	2015	​	$	243,127	​	$	0	​	$	87,616	​	$	0	​	$	98,929	​	$	125,024	​	$	18,159	​	$	572,855
	​	2014	​	$	216,758	​	$	0	​	$	44,863	​	$	0	​	$	114,255	​	$	331,445	​	$	11,886	​	$	719,207
	​	2013	​	$	206,855	​	$	0	​	$	61,433	​	$	24,887	​	$	60,617	​	$	25,467	​	$	13,802	​	$	393,061

(1)

Mr. Wilson’s annualized salary is prorated based on his date of hire of September 1, 2015 and Mr. Fortson’s annualized salary is prorated based on his date of hire of October 12, 2015. The amounts included in this column represent salary for each Ingevity named executive officer before compensation reduction payments under the Ingevity Corporation Retirement Plan. The Ingevity Corporation Retirement Plan is a plan qualified under Section 401(a) of the Internal Revenue Code.

(2)

As a part of their hiring packages, Mr. Wilson received a one-time cash bonus of  $500,000 and Mr. Fortson received a one-time cash bonus of  $250,000. As a part of her new employment arrangement with Ingevity, Ms. Burgeson received a one-time cash bonus of  $50,000.

(3)

In the columns “Stock Awards” and “Option Awards,” SEC regulations require us to disclose the aggregate grant date fair value of the award of stock or options measured in dollars and calculated in accordance with ASC 718. For grants of restricted stock and stock units, the fair value per share is equal to the closing sale price of WestRock’s common stock or MWV’s common stock (as applicable) on the NYSE on the dates of the applicable grants. For stock options granted in 2015, the fair value per share is based on certain assumptions which are explained in Note 15 to WestRock financial statements included in WestRock’s annual report on Form 10-K for the fiscal year ended September 30, 2015. For options granted in 2014 and 2013, the fair value per share is based on certain assumptions which are explained in Note K to MWV’s financial statements included in MWV’s annual report on Form 10-K for the fiscal year ended December 31, 2014.

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(4)

Amounts shown in this column include payments made to the Ingevity named executive officers under the annual performance bonus program.

(5)

This column shows the increase from December 31, 2014 to December 31, 2015 in the actuarial present value of accumulated benefits for each Ingevity named executive officer who participates in the MWV Pension Plan (as defined below) and Retirement Restoration Plan (as defined below). It does not include any above-market or preferential earnings on deferred compensation, as we do not provide above-market or preferential earnings on the deferred compensation of our named executive officers. The amounts set forth in this column were calculated using the assumptions from WestRock’s annual report on Form 10-K for the fiscal year ended September 30, 2015. The discount rates used as of December 31, 2013, December 31, 2014 and December 31, 2015 were 4.88%, 4.03% and 4.48%, respectively, for both the MWV Pension Plan and the Retirement Restoration Plan. The post-retirement mortality assumptions used for the MWV Pension Plan as of December 31, 2015 were based on the adjusted Society of Actuaries RP-2014 table and a future mortality improvement scale based on Social Security Administration data and assumptions. The RP-2014 table was adjusted to substitute the Social Security Administration mortality improvement assumptions after 2012, to reflect white collar life expectancies, and to reflect that WestRock’s white collar male and female populations have 106% and 113% higher mortality experience, respectively, than otherwise expected using these assumptions.

The amounts shown in this column for 2015 are derived as follows:

​	D. Michael Wilson			John C. Fortson			Edward Rose			Katherine Pryor Burgeson			S. Edward Woodcock, Jr.
Financial Planning/​ Counseling(1)	​	$	0	​	$	0	​	$	650	​	$	0	​	$	0
Qualified Savings Plan Contributions(2)	​	$	13,333	​	$	5,307	​	$	10,600	​	$	10,600	​	$	10,600
Non-Qualified Savings Plan Contributions(3)	​	$	0	​	$	0	​	$	22,252	​	$	13,169	​	$	6,736
Life Insurance Premiums(4)	​	$	1,018	​	$	453	​	$	1,214	​	$	1,194	​	$	823
Relocation Expenses	​	$	8,566	​	$	6,053	​	​	N/A	​	​	N/A	​	​	N/A
Total Other Compensation	​	$	22,917	​	$	11,813	​	$	34,716	​	$	24,963	​	$	18,159

(1)

Reimbursement for financial planning

(2)

Annual contribution by WestRock (or, if prior to the Merger, MWV) to qualified 401(k) savings plan

(3)

Annual contribution by WestRock (or, if prior to the Merger, MWV) to non-qualified deferred compensation plan

(4)

Annual life insurance premium paid by WestRock (or, if prior to the Merger, MWV).

(5)

Reimbursement for relocation expenses including temporary housing and commuting expenses.

Grants of Plan Based Awards in 2015

The table below shows the cash and equity awards that were granted to each of the named executive officers during 2015 under various plans. See the footnote disclosures below for a description of each such award and its treatment as a result of the Merger, as applicable.

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​

​

​

Estimated Possible Payouts Under Non- Equity Incentive Plan Awards

Estimated Future Payouts Under Equity Incentive Plan Awards

All Other Stock Awards or Units (# of awards)

All Other Option Awards (# of awards)

Exercise or Base Price of Option Awards ($)

Grant Date Fair Market Value of Stock & Option Awards ($)

Name

Grant Date

Threshold ($)

Target ($)

Maximum ($)

Threshold (# of awards)

Target (# of awards)

Maximum (# of awards)

D. Michael Wilson

​

​

​

​

​

​

​

​

​

​

​

​

Spin-Off Bonus(1)

​

—

​

$

533,333

​

​

—

​

​

​

​

​

​

​

​

John C. Fortson

​

​

​

​

​

​

​

​

​

​

​

​

Spin-Off Bonus(2)

​

—

​

$

182,875

​

​

—

​

​

​

​

​

​

​

​

Edward A. Rose

​

​

​

​

​

​

​

​

​

​

​

Annual Perf. Bonus(3)

​

​

​

$

125,000

​

$

240,000

​

$

480,000

​

​

​

​

​

​

​

Incentive Comp. Award(4)

​

​

​

​

—

​

$

200,000

​

​

—

​

​

​

​

​

​

​

RSUs(5)

​

2/23/2015

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

2,861

​

​

​

​

​

​

$

199,874

Katherine Pryor Burgeson

​

​

​

​

​

​

​

​

​

​

Annual Perf. Bonus(3)

​

​

​

$

72,000

​

$

144,000

​

$

288,000

​

​

​

​

​

​

​

Spin-Off Bonus(6)

​

​

​

​

—

​

$

72,000

​

​

—

​

​

​

​

​

​

​

Options(7)

​

2/23/2015

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

624

​

$

54.76

​

$

17,959

Options(8)

​

8/5/2015

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

3,285

​

$

62.75

​

$

66,258

PSUs(9)

​

2/23/2015

​

​

​

​

​

​

​

​

​

​

—

​

746

​

—

​

​

​

​

​

​

​

​

$

46,812

PSUs(10)

​

8/5/2015

​

​

​

​

​

​

​

​

​

​

1,233

​

2,465

​

4,930

​

​

​

​

​

​

​

​

$

154,679

S. Edward Woodcock, Jr.

​

​

​

​

​

​

​

​

​

​

Annual Perf. Bonus(3)

​

​

​

$

68,750

​

$

137,500

​

$

275,000

​

​

​

​

​

​

​

RSUs(5)

​

2/23/2015

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

1,255

​

​

​

​

​

​

$

87,616

Incentive Comp. Award(4)

​

​

​

​

—

​

$

87,500

​

​

—

​

​

​

​

​

​

​

(1)

As a part of his sign on package, WestRock set Mr. Wilson’s participation level in the annual performance bonus program at a threshold payout of 50%, target payout of 100% and maximum payout of 200% of his base pay of  $800,000. For the time period between his start date (September 1, 2015) and the Separation, his annual performance bonus will be pro-rated and paid out at such time assuming target performance. The amount listed above assumes the Separation will occur on May 2, 2016.

(2)

As a part of his sign on package, WestRock set Mr. Fortson’s participation level in the annual performance bonus program at a threshold payout of 35%, target payout of 70% and maximum payout of 140% of his base pay of  $475,000. For the time period between his start date (October 12, 2015) and the Separation, his annual performance bonus will be pro-rated and paid out at such time assuming target performance. The amount listed above assumes the Separation will occur on May 2, 2016.

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(3)

For the 2015 performance period, MWV approved an annual incentive award program based on the attainment of pre-established performance goals as follows: Earnings Before Interest and Taxes (“EBIT”) (weighted at 50%) and Revenue (weighted at 50%). Due to the Merger, awards under this program were prorated to reflect the six-month period from January 1 through June 30, the last day prior to completion of the Merger. Award payments were made based on MWV’s actual achievement of 140% of target performance. For the post-Merger period (July 1 through December 31), WestRock approved a program using the following pre-established performance metrics: Operating EBIT (weighted at 80%); Safety TWCC (weighted at 10%) and Safety LDW (weighted at 10%). Only Messrs. Rose and Woodcock received payments for the post-Merger period based on the achievement of the two safety goals.

(4)

These service-based cash awards were granted to Mr. Rose and Mr. Woodcock by MWV on February 23, 2015. These awards will vest in full on the third anniversary of the grant date, provided the grantee continues to be employed by Ingevity.

(5)

These restricted stock units were granted to Mr. Rose and Mr. Woodcock by MWV on February 23, 2015. On July 1, 2015, following the Merger, the units underlying these awards were converted into WestRock units at a ratio of 1 to 0.78. The grant date fair value of the award is based on the closing price of MWV common stock on February 23, 2015, or $54.76 per share, and the number of MWV restricted stock units originally granted by MWV on that date (3,650 shares for Mr. Rose and 1,600 shares for Mr. Woodcock). The restricted stock units are subject to three year cliff vesting upon the third anniversary of the original grant date, subject to continued employment through the vesting date.

(6)

As a part of her employment terms, WestRock set Ms. Burgeson’s participation level in the Annual Performance Bonus program at a target payout of 45% of her base pay of  $320,000. For the time period October 1, 2015 and the Separation, her Annual Performance Bonus will be pro-rated and paid out at such time assuming target performance. The amount listed above assumes the Separation will occur on May 2, 2016.

(7)

These options were awarded by MWV prior to the Merger on February 23, 2015. On that date Ms. Burgeson was granted options to purchase 4,800 shares of MWV stock at an exercise price of $54.76 per share, the closing stock price of MWV common stock on the grant date. Following the Merger, this option award was prorated through the closing of the Merger and converted to options to purchase 624 shares of WestRock common stock and the exercise price was adjusted to $70.21. These options have a 10-year term and vested in full on February 23, 2016.

(8)

These options were granted to Ms. Burgeson by WestRock in light of the forfeited portion of the options originally granted by MWV on February 23, 2015. They have a 9.5-year term and vest in one-third increments on each of February 23, 2016, February 23, 2017 and February 23, 2018.

(9)

This long-term performance-based restricted stock unit award (PSU) was granted to Ms. Burgeson by MWV prior to the Merger on February 23, 2015. At the time the PSU was originally granted, the target amount was 3,390 shares of MWV common stock (with a threshold of 1,695 shares and a maximum of 6780 shares) and was subject to the successful attainment of a pre-established economic profit performance goal. On July 1, 2015, the effective date of the Merger, the award amount was prorated based on the number of months completed from January 1, 2015 through the closing of the Merger. Based on this proration, out of the 3,390 MWV shares in the original award, 2,837 MWV shares were forfeited, resulting in a new target amount of 444 shares of WestRock using a conversion ratio of  .78 WestRock shares for each MWV share. This converted award was then deemed earned based on MWV’s actual performance from January 1, 2015 through the effective time of the Merger at 168% of target performance, resulting in 746 shares of WestRock and will vest based on the executive’s continued employment through February 22, 2018. The grant date value of the award listed in the table is based on 746 WestRock shares at $62.75, the WestRock per share price as of July 1, 2015.

(10)

This long-term performance-based restricted stock unit award was granted to Ms. Burgeson by WestRock in light of the forfeited portion of the performance-based restricted stock unit award originally granted by MWV on February 23, 2015. The performance conditions for this award are

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based on a pre-determined cash flow per share performance metric to be achieved over the performance period beginning July 1, 2015 through December 31, 2017. The grant date value of the award assumes target performance and is based on the closing price of WestRock common stock on the grant date, or $62.75 per share.

Treatment of Outstanding MWV Equity Awards at the time of the Merger.

Each MWV restricted stock unit award granted to the Ingevity named executive officers, other than the 2015 MWV PSU Award (as defined below), that was outstanding immediately prior to the effective time of the Merger was converted at the effective time of the Merger into a WestRock restricted stock unit award relating to the number of shares of WestRock common stock (rounded up to the nearest whole share) determined by multiplying the number of shares of MWV common stock subject to the MWV restricted stock award by 0.78. Performance-based MWV restricted stock unit awards were deemed earned at target performance and the related WestRock restricted stock unit awards remain subject to any applicable time-based vesting criteria. For a description of the treatment of the MWV performance-based restricted stock award granted to Ms. Burgeson on February 23, 2015 (the “2015 MWV PSU Award”), see footnote 9 to the Grants of Plan Based Awards Table above.

Each MWV option award granted to the Ingevity named executive officers, other than the 2015 MWV Option Award (as defined below), that was outstanding immediately prior to the effective time of the Merger was converted at the effective time of the Merger into an option to purchase a number of shares of WestRock common stock (rounded down to the nearest whole share) determined by multiplying the number of shares of MWV common stock subject to the MWV option award by 0.78, with an exercise price (rounded up to the nearest whole cent) determined by dividing the exercise price of the MWV option award immediately prior to the merger by 0.78. For a description of the treatment of the MWV option award granted to Ms. Burgeson on February 23, 2015 (the “2015 MWV Option Award”), see footnote 7 to the Grants of Plan Based Awards Table above.

Outstanding Equity Awards at December 31, 2015

The following table summarizes stock-based compensation awards outstanding as of December 31, 2015. The following table provides information concerning unexercised options, and other stock-based awards that have not vested, and equity incentive plan awards for each named executive officer outstanding as of December 31, 2015. We computed the market value of stock awards by multiplying the closing sale price of WestRock common stock on December 31, 2015 by the number of shares of stock or the amount of equity incentive plan awards, respectively.

95

​

Option Awards

Stock Awards

​

Number of Securities Underlying Unexercised Options

Number of Securities Underlying Unexercised Unearned Options (d)

Option Exercise Price (e)

Option Expiration Date (f)

Number of Shares of Stock that Have Not Yet Vested (g)

Market Value of Unvested Shares of Stock ($) (h)

Equity Incentive Plan Awards: Number of Unearned, Unvested Units or Shares (i)

Plan Awards Payout Value of Unearned, Unvested Units or Shares ($)(6) (j)

Name (a)

Exercisable (b)

Unexercisable (c)

D. Michael Wilson

​

​

​

​

​

​

​

​

​

John C. Fortson

​

​

​

​

​

​

​

​

​

Edward A. Rose

​

4,446

​

—

​

—

​

$

35.04

​

6/25/2022

​

​

​

​

​

​

​

​

​

​

​

​

2,473

​

2,473(1)

​

—

​

$

43.04

​

2/25/2023

​

​

​

​

​

​

​

​

​

​

​

​

2,379

​

4,758(2)

​

—

​

$

46.02

​

2/24/2024

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

12,910(7)

​

$

588,954

​

​

Katherine Pryor Burgeson

​

4,381

​

—

​

—

​

$

26.48

​

2/22/2020

​

​

​

​

​

6,619

​

—

​

—

​

$

32.62

​

2/28/2021

​

​

​

​

​

​

12,224

​

—

​

—

​

$

35.04

​

6/25/2022

​

​

​

​

​

​

6,183

​

—

​

—

​

$

43.04

​

2/25/2023

​

​

​

​

​

​

6,536

​

—

​

—

​

$

46.02

​

2/24/2024

​

​

​

​

​

​

—

​

624(3)

​

—

​

$

70.21

​

2/23/2025

​

​

​

​

​

​

—

​

3,285(4)

​

—

​

$

62.75

​

2/23/2025

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

9,185(8)

​

$

419,020

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

2,500

​

$

114,050

S. Edward Woodcock, Jr.

​

4,396

​

​

​

​

​

$

35.04

​

6/22/2022

​

​

​

​

​

1,485

​

741(5)

​

—

​

$

43.04

​

2/25/2023

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

​

3,860(9)

​

$

176,093

​

​

(1)

Remaining unexercisable options become exercisable on February 25, 2016.

(2)

One-third of the options became exercisable on February 24, 2015, one-third of the options became exercisable on February 24, 2016 and one-third become exercisable on February 24, 2017.

(3)

These options vested in full on February 23, 2016.

(4)

These options vest in one-third increments on each of February 23, 2016, February 23, 2017 and February 23, 2018.

(5)

These options vested in full on February 25, 2016.

(6)

This table reflects award values as of December 31, 2015. Market and payout values based on stock price of  $45.62, which was the closing price of the WestRock’s stock on December 31, 2015.

(7)

5,256 RSUs vested in full on February 25, 2016. 4,753 RSUs will vest in full on February 24, 2017 and 2,901 RSUs will vest in full on February 23, 2018.

(8)

4,380 RSUs vested in full on February 25, 2016. 4,355 RSUs will vest in full on February 24, 2017 and 450 RSUs will vest in full on February 23, 2018.

(9)

1,572 RSUs vested in full on February 25, 2016. 1,016 RSUs will vest in full on February 24, 2017 and 1,272 RSUs will vest in full on February 23, 2018.

(10)

This PSU award granted in August of 2015 is subject to three year cliff vesting on the third anniversary of the award date, February 23, 2018; see footnotes 9 and 10 to the Grants of Plan Based Awards in 2015 Table for a description of the performance criteria attached to such award.

96

Option Exercises and Stock Vested during 2015

The following table provides information concerning exercises of options during the year 2015, including the number of securities for which the options were exercised and the aggregate dollar value realized upon exercise of options. None of the Ingevity named executive officers had stock awards vest during 2015.

​	Option Awards
Name	Number of Shares Acquired on Exercise (#)		Value Realized Upon Exercise(1) ($)
D. Michael Wilson	​	0	​	$	0
John C. Fortson	​	0	​	$	0
Edward A. Rose	​	0	​	$	0
Katherine Pryor Burgeson	​	0	​	$	0
S. Edward Woodcock, Jr.	​	3,058	​	$	77,796

(1)

The value realized is calculated by determining the difference between the market price of the underlying securities at exercise and the exercise price.

Retirement Plans

MWV Pension Plan.   In connection with the Merger, effective July 2, 2015, the RockTenn Pension Plan and MWV Pension Plan merged into the WestRock Company Consolidated Pension Plan (the “Pension Plan”). Messrs. Rose and Woodcock and Ms. Burgeson participate in the legacy MWV portion of the Pension Plan’s defined benefit plan for former MWV salaried and nonunion hourly employees (the “MWV Pension Plan”). Effective as of December 31, 2015, WestRock froze benefit accruals under the Pension Plan, generally. WestRock will continue to maintain the frozen Pension Plan and no Pension Plan liabilities will be transferred to Ingevity. Following the Separation, Ingevity will not maintain any pension plans for its salaried and nonunion hourly employees.

The MWV Pension Plan is a qualified retirement plan that covers all salaried employees of Ingevity who were employees of MWV before the Merger. One element of the retirement benefit applicable to Messrs. Rose and Woodcock and Ms. Burgeson under the MWV Pension Plan (which we refer to as the “Final Average Pay Benefit”) provides an unreduced benefit payable at age 65 (or 62 if the employee has 20 years of service) that is equal to 1.6% of his or her final average earnings (or pay) times years of benefit service (up to a maximum of 40 years), minus his primary social security benefit multiplied by 1.25% times years of benefit service (up to a maximum of 40 years of service). The formula for determining the Final Average Pay Benefit is illustrated below:

Final average pay generally includes all income reported on Form W-2 but excludes long-term incentive compensation, severance pay, and retention and hiring bonuses. Final average pay includes the participant’s highest 5 years of pay within the last 10 year period.

Effective January 1, 2015, MWV added a supplemental cash balance benefit to the MWV Pension Plan (which we refer to as the “Retirement Plus Benefit”) for all salaried employees, which was funded by company contributions equal to 4% of each participant’s eligible compensation, which contributions were made in lieu of contributions to the participants’ 401(k) plans. The Retirement Plus Benefit was terminated effective as of December 31, 2015 for all participants of the MWV Pension Plan.

The compensation committee of the WestRock board of directors (the “WestRock compensation committee”) determined that there will be no further pension accruals under other components of the MWV Pension Plan for salaried and nonunion hourly employees after December 31, 2015, unless, on December 31, 2015, a participant is at least age 50 years old and the sum of his or her age and service equal

97

at least 75, in which case pension benefits under the MWV Pension Plan will continue to accrue for 5 additional years to December 31, 2020, or earlier upon such participant’s termination of employment with Ingevity. Messrs. Rose and Woodcock each qualify for this additional accrual period under the MWV Pension Plan.

No employee’s compensation for purposes of the Pension Plan includes amounts in excess of the compensation limit under the Code. This limit is periodically adjusted for inflation by the United States Secretary of the Treasury and this limit, as adjusted, was $255,000 for calendar year 2013, was $260,000 for calendar year 2014, was $265,000 for 2015 and will be $265,000 for 2016.

MWV Retirement Restoration Plan.   Ms. Burgeson and Messrs. Rose and Woodcock also participate in a non-qualified retirement restoration plan (which we refer to as the “Retirement Restoration Plan”) that mirrors the benefits provided under the MWV Pension Plan following the same formulas but recognizing compensation in excess of the limits set forth under the Code limit as described above. Benefits under this plan attributable to the Retirement Plus Benefit are payable in either annuity or lump sum form.

The following table illustrates the actuarial present value as of December 31, 2015 of benefits accumulated by Ms. Burgeson and Messrs. Rose and Woodcock under the MWV Pension Plan and the Retirement Restoration Plan using the methodology required by the SEC pursuant to the Financial Accounting Standards Board’s Accounting Standard’s Codification 715, “Compensation — Retirement Benefits,” at the earliest unreduced retirement age under the plan. As new hires and in anticipation of the Separation, Mr. Wilson and Mr. Fortson did not participate in the Pension Plan or the retirement restoration plan during 2015.

Name	Plan Name	Number of Years of Credited Service (#)		Present Value of Accumulated Benefit(1) ($)			Payments During Last Fiscal Year ($)
Edward A Rose	MWV Pension Plan	​	31.583	​	$	1,258,251	​	$	0
​	Restoration Plan	​	31.583	​	$	1,999,477	​	$	0
Katherine Pryor Burgeson	MWV Pension Plan	​	15.5	​	$	784,066	​	$	0
​	Restoration Plan	​	15.5	​	$	1,145,351	​	$	0
S. Edward Woodcock, Jr.	MWV Pension Plan	​	27.5	​	$	923,239	​	$	0
​	Restoration Plan	​	27.5	​	$	314,399	​	$	0

(1)

The amounts set forth in this column were calculated using the assumptions from the corresponding end-of-year disclosure. Accrued benefits payable at age 62 were determined as of the end of the calendar year using compensation data through December 31. The accrued benefits were discounted back to the disclosure date with the discount rate only. Each participant is assumed to work until age 62 and then retire. The discount rates used as of December 31, 2015 were 4.48% for the MW Pension Plan and 7.10% for the Retirement Restoration Plan. The post-retirement mortality assumptions used as of December 31, 2015 were based on the adjusted Society of Actuaries RP-2014 Annuitant table and a future mortality improvement scale based on the Social Security Administration’s data and assumptions. The RP-2014 table was adjusted to substitute the Social Security Administration mortality improvement assumptions after 2012, to reflect white collar life expectancies, and to reflect that WestRock’s white collar male and female populations have 106% and 113% higher mortality experience, respectively, than otherwise expected using these assumptions.

Non-qualified Deferred Compensation

MeadWestvaco Deferred Income Plan.   MWV maintained a non-qualified deferred compensation plan that permitted executives to voluntarily defer up to 80% of base salary and annual incentive cash compensation. In fiscal year 2015, Ms. Burgeson and Messrs. Rose and Woodcock each participated in the plan. Following the Merger, WestRock assumed the sponsorship of the MWV deferred compensation plan

98

as well as any rights and obligations of MWV under such plan. As new hires and in anticipation of the Separation, Mr. Wilson and Mr. Fortson did not participate in the MWV Deferred Income Plan during 2015. Following the Separation, Ingevity will maintain a deferred compensation plan substantially similar in design to the MWV Deferred Income Plan.

The plan also operates as an excess benefit plan enabling employees to defer salary and company matching contributions in excess of Internal Revenue Code limits that apply to MWV’s qualified 401(k) plan. Any amounts contributed by executives may be allocated towards notional accounts into a broad range of investment funds as directed by the participant except with respect to company matching contributions, which are automatically invested in a company “phantom” stock fund. There is no guaranteed investment return with respect to any of the funds. Executives may choose to receive a distribution of their account balance in the year after termination of employment, or early or normal retirement in either a lump sum or installment payments. Limited in-service withdrawals are permitted based on future dates specified in advance by participants and evidenced by written distribution elections.

The investment funds available to an executive under the deferred income plan generally mirror the investment options available to all employees who participate in the company’s broad based qualified 401(k) savings plan, plus three additional funds which are available to investors.

Non-qualified Deferred Compensation at 2015 Calendar Year End

The table below presents information on Ms. Burgeson’s and Messrs. Rose’s and Woodcock’s non-qualified deferred compensation plan accounts for 2015.

Name	Executive Contributions in 2015			Registrant Contributions in 2015(1)			Aggregate Earnings in 2015			Aggregate Withdrawals/​ Distributions			Aggregate Balance at 2015 Year-End
Edward A. Rose	​	$	155,137	​	$	22,252	​	$	(9,221)	​	$	0	​	$	332,765
Katherine Pryor Burgeson	​	$	40,584	​	$	13,169	​	$	(54,322)	​	$	0	​	$	1,182,200
S. Edward Woodcock, Jr.	​	$	11,339	​	$	6,734	​	$	(23)	​	$	0	​	$	21,181

(1)

Amounts shown as Registrant Contributions in 2015 are also included as 2015 compensation in the Summary Compensation Table, in the “All Other Compensation” column. Full company match provided relative to annual incentive award if Internal Revenue Code limitations prevented executive from deferring applicable portion of the incentive award.

Potential Payments Upon Termination and Change of Control

The table below reflects the amount of compensation that would have become payable to each of the named executive officers under existing plans and arrangements if the named executive officer’s employment had terminated on December 31, 2015. These benefits are in addition to benefits available prior to the occurrence of any termination of employment (including benefits under then-exercisable options) and benefits available to all salaried employees, such as distributions under the company’s retirement savings plan, early retirement subsidy and accrued vacation pay.

Employment Letter Severance Commitments.   For a description of the potential cash severance benefits payable to Messrs. Wilson, Fortson and Ms. Burgeson, see “Compensation Discussion and Analysis — Employment Letters,” which details the terms and conditions under which severance is payable.

Change of Control Severance Pay Plan.   During 2015, Messrs. Rose and Woodcock were covered by the Change of Control Severance Pay Plan for Salaried and Non-Union Hourly Employees, a broad-based severance plan (the “MWV Merger-Related Severance Plan”) covering all salaried and non-union hourly employees in the event of an “involuntary termination of employment” (including a “constructive termination”) other than on account of death, disability or absent “misconduct.” As a part of her employment arrangement with Ingevity, Ms. Burgeson waived her rights to severance that she may have had in connection with her employment with WestRock or MWV. The MWV Merger-Related Severance Plan was established for the purpose of providing enhanced financial assistance to those employees experiencing an “involuntary” or “constructive” termination of employment within two years following the “change of

99

control” resulting from the Merger. This plan was the only plan in effect applicable to Messrs. Rose and Woodcock during 2015, as a result of the Merger. It is not an Ingevity severance plan and will not apply with respect to any termination of an Ingevity named executive officer after the effective time of the Separation.

Under the MWV Merger-Related Severance Plan in the event of an involuntary or constructive termination following a change of control, a lump sum cash amount is payable equal to 104 weeks for Mr. Rose and 78 weeks for Mr. Woodcock of each executive’s base salary in effect at the time of termination, plus any actual incentive compensation paid in the current or year prior to termination, whichever is greater, (and for Mr. Woodcock, such amount shall be multiplied by 120%). Each executive is also entitled to receive a cash lump sum payment in lieu of health care continuation coverage for a period of 104 weeks in the case of Mr. Rose and 78 weeks in the case of Mr. Woodcock.

Name	Benefit	Before Change of Control, Termination w/o Cause			After Change of Control, Termination w/o Cause
D. Michael Wilson	Severance(1)(2)	​	$	3,200,000	​	$	4,800,000
​	Stock Options(3)	​	​	N/A	​	​	N/A
​	RSUs & PSUs(4)	​	​	N/A	​	​	N/A
​	Incentive Compensation Award(5)	​	​	N/A	​	​	N/A
​	Post-Termination Health Care(6)	​	​	N/A	​	​	N/A
​	Total value:	​	$	3,200,000	​	$$	4,800,000
John C. Fortson	Severance(1)(2)	​	$	1,211,250	​	$	1,615,000
​	Stock Options(3)	​	​	N/A	​	​	N/A
​	RSUs & PSUs(4)	​	​	N/A	​	​	N/A
​	Incentive Compensation Award(5)	​	​	N/A	​	​	N/A
​	Post-Termination Health Care(6)	​	$	0	​	$	0
​	Total value:	​	$	1,211,250	​	$	1,615,000
Edward A. Rose	Severance(1)(2)	​	$	1,684,250	​	$	1,684,250
​	Stock Options(3)	​	$	4,477	​	$	4,477
​	RSUs & PSUs(4)	​	$	456,602	​	$	456,602
​	Incentive Compensation Award(5)	​	$	200,000	​	$	200,000
​	Post-Termination Health Care(6)	​	$	34,156	​	$	34,156
​	Total value:	​	$	2,379,485	​	$	2,379,485
Katherine Pryor Burgeson	Severance(1)(2)	​	$	696,000	​	$	928,000
​	Stock Options(3)	​	$	0	​	$	0
​	RSUs & PSUs(4)	​	$	310,128	​	$	546,787
​	Incentive Compensation Award(5)	​	​	N/A	​	​	N/A
​	Health Care(6)	​	$	0	​	$	0
​	Total value:	​	$	1,006,128	​	$	1,474,787
S. Edward Woodcock, Jr.	Severance(1)(2)	​	$	837,421	​	$	837,421
​	Stock Options(3)	​	$	1,912	​	$	1,912
​	RSUs & PSUs(4)	​	$	118,060	​	$	118,060
​	Incentive Compensation Award(5)	​	$	132,500	​	$	132,500
​	Health care(6)	​	$	18,441	​	$	18,441
​	Total value:	​	$	1,108,334	​	$	1,108,334

100

(1)

The numbers in this column assume an involuntary termination of employment absent “Cause” as defined in the respective employment offer letters for Ms. Burgeson and Messrs. Wilson and Fortson. Each employment offer letter provides for the payment of the named executive officer’s base salary and target bonus for a period of 18 months in the case of Mr. Fortson and Ms. Burgeson, and 24 months in the case of Mr. Wilson. Such payments are to be made in equal monthly installments over the severance period beginning 30 days following the executive’s termination of employment. For a more detailed discussion of such employment offer letter terms see “Compensation Discussion and Analysis — Employment Letters.” With respect to Messrs. Rose and Woodcock, the numbers in this column represent payment in the event of involuntary termination of employment absent “misconduct” or a “constructive termination” payable under the MWV Merger-Related Severance Plan, which provides for enhanced severance in the amount of  (a) for Mr. Woodcock 78 weeks of base and bonus, multiplied by 120% and (b) for Mr. Rose, 104 weeks of base and bonus; such amount generally to be paid in a single lump sum.

(2)

The numbers in this column assume an involuntary termination of employment absent “cause” or the executive’s resignation for “good reason” during the one-year period following a change of control as described in the respective employment offer letters for Ms. Burgeson and Messrs. Wilson and Fortson. The payment is equal to three times the executive’s annual base salary and target bonus in the case of Mr. Wilson, and two times the executive’s annual base salary and target bonus in the case of Mr. Fortson and Ms. Burgeson; all such payments are made in equal monthly installments over the severance period beginning 30 days following the executive’s termination of employment. In the case of Messrs. Rose and Woodcock, the numbers in this column reflect the same payments described in Footnote 1 above, given that the only severance plan in effect for such executives as of December 31, 2015 was the MWV Merger Related Severance Plan providing for enhanced severance assuming a qualifying involuntary termination following the Merger.

(3)

These values cover only grants made to the named executive officers in 2013, 2014 and 2015; since no awards were made to Messrs. Wilson and Fortson during this period, an N/A appears beside their names. As a result of the Merger, and in accordance with the terms and conditions of Ms. Burgeson’s August 2015 grant all options vest and become immediately exercisable in the event of an involuntary termination of employment without “cause” on December 31, 2015. These values represent the intrinsic value of the unvested option and assume a stock price of  $45.62, which was the closing price of WestRock’s stock price on the assumed termination date, December 31, 2015. As of December 31, 2015, certain unvested options had an exercise price that was greater than the closing price of WestRock’s stock price on such date, and, as a result, the value of any accelerated vesting of such options as of December 31, 2015 was $0. In the event of a resignation with “good reason” or a “constructive termination” prior to or following a change of control, all outstanding, unvested options held by the named executive officers would be forfeited.

(4)

These values cover only grants made to the named executive officers in 2013, 2014 and 2015; since no awards were made to Messrs. Wilson and Fortson during this period, an N/A appears beside their names. As a result of the Merger, in the case of an involuntary termination of employment absent “cause”, all RSU awards (including dividend equivalents) granted by MWV prior to the Merger vest in full on the date of termination. With respect to Ms. Burgeson’s August 2015 PSU award, in the event of an involuntary termination of employment absent “cause,” (a) no accelerated vesting is reflected in the pre-change of control column as PSUs are forfeit in the event of such a termination prior to the first anniversary of the grant date of such awards and (b) the post-change of control column reflects accelerated vesting based on double trigger vesting terms, assuming target performance with respect to the PSU award. The values set forth in the table above assume a stock price of  $45.62, which was the closing price of WestRock’s stock price on the assumed termination date, December 31, 2015. In the event of a resignation with “good reason” or a “constructive termination” prior to or following a change of control, all outstanding, unvested RSUs and PSUs held by the named executive officers would be forfeited.

(5)

Only Messrs. Rose and Woodcock received 2014 and 2015 Incentive Compensation Awards so an N/A appears beside the names of other named executive officers. As a result of the Merger, the values in the

101

table above reflect full vesting in the event of an involuntary termination of employment absent “cause” following a change of control. In the event of a resignation with “good reason” or a “constructive termination” prior to or following a change of control, all outstanding Incentive Compensation Awards would be forfeited.

(6)

These values reflect the payment due under the terms of the MWV Merger-Related Severance Plan, which provides for a single lump sum payment to Messrs. Rose and Woodcock, representing continued health care COBRA coverage for the two-year severance period.

Potential Payments Upon Termination – Death or Disability(1)

The table below shows the value of any option awards as well as service and performance-based restricted stock unit awards made in 2013, 2014 and 2015 that would vest in the event of termination of employment due to death or disability assuming a December 31, 2015 termination date. Named executive officers are eligible for disability compensation under the company’s disability benefit plans and death benefits under applicable life insurance plans offered by the company to all full-time salaried employees.

​

D. Michael Wilson

John C. Fortson

Edward Rose

Katherine Pryor Burgeson

S. Edward Woodcock, Jr.

Stock Options(2)

​

N/A

​

N/A

​

$

4,477

​

$

0

​

$

1,912

RSUs(3)

​

N/A

​

N/A

​

$

493,248

​

$

310,128

​

$

118,060

Incentive Compensation (Cash) Awards(4)

​

N/A

​

N/A

​

$

200,000

​

​

N/A

​

$

132,500

(1)

These amounts represent the full value of equity compensation associated with a termination due to death or disability on December 31, 2015; all equity is based on a stock price of  $45.62, which was the closing price of WestRock’s stock on December 31, 2015.

(2)

This represents the intrinsic value of unvested options that would vest due to death or disability on December 31, 2015. Values represent awards made in 2013, 2014 and 2015. Since no option awards were made to Messrs. Wilson and Fortson, an N/A appears by their names. As of December 31, 2015, certain unvested options had an exercise price that was greater than the closing price of WestRock’s stock price on such date, and, as a result, the value of any accelerated vesting of such options as of December 31, 2015 was $0.

(3)

This represents the value of 2013, 2014 and 2015 service-based restricted stock units that would vest in full (including dividend equivalents) upon a termination by reason of death or disability following the Merger. For Ms. Burgeson, her 2015 PSU grant would be forfeited because a termination by reason of death or disability on December 31, 2015 precedes the first anniversary date of the date of grant. Since no such awards were made to Messrs. Wilson and Fortson, an N/A appears by their names.

(4)

Since no Incentive Compensation Awards were made to Messrs. Wilson and Fortson or Ms. Burgeson, an N/A appears beside their names. For Messrs. Rose and Woodcock the 2014 and 2015 awards vest in full upon a termination by reason of death or disability following the Merger.

Employment Letters

Employment Letter with Michael Wilson

On July 27, 2015, WestRock entered into an employment arrangement with Michael Wilson that became effective as of September 1, 2015 and which includes the following terms. Mr. Wilson will serve as the Chief Executive Officer of Ingevity with an annual base salary of  $800,000 and a target annual bonus of 100% of annual base salary. His 2015 annual bonus for the period beginning September 1, 2015 and ending with the Separation will be prorated assuming target performance. In addition to Mr. Wilson’s base salary and annual bonus, he will be eligible for welfare and retirement benefits commensurate with all benefits offered to other Ingevity employees.

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In the event that WestRock determines not to complete the Separation, and Mr. Wilson voluntarily chooses to terminate his employment with WestRock within 60 days thereafter, he will receive $3,200,000, payable in 24 equal monthly installments beginning 30 days after his termination of employment, unless a delay is required by Internal Revenue Code Section 409A.

The employment offer letter terms also provide that beginning in 2017, Mr. Wilson’s annual long-term incentive award will be delivered in the form of restricted stock units, which may be subject to the satisfactory performance of pre-approved company performance metrics, and options. It is anticipated that the annual grant would have a target value of 200% of Mr. Wilson’s base salary and would be subject to a vesting period of three to five years, with the mix of equity subject to change by the Compensation Committee. The performance-based multipliers for restricted stock may range from 0% to 200%, as determined by the level of achievement of applicable performance goals for the performance period attached to each long-term award.

The offer letter further provides that Mr. Wilson will receive a long-term incentive award with a target value equal to $2,000,000, at the time of the Separation, which will be delivered in the form of service-based restricted stock units, performance-based restricted stock units and options. Mr. Wilson will also receive an award of service-based restricted stock units with a value of  $1,000,000 effective as of the date of the Separation (the “Spin-Off RSU Grant”), which will vest ratably over the first, second and third anniversary of the executive’s employment commencement date. Mr. Wilson received a one-time bonus of  $500,000 paid during 2015 (subject to repayment under certain circumstances) to assist in transition expenses associated with his relocation to Charleston, South Carolina from Malvern, Pennsylvania, as well as a Guaranteed Buy Out (GBO) relocation package under the Ingevity relocation policy generally available to all employees. In addition, Mr. Wilson is eligible to receive reimbursement for reasonable commuting expenses during his initial year of employment.

Severance and Change of Control Severance for Mr. Wilson

The terms of Mr. Wilson’s offer letter also provide that in the event his employment is terminated without “cause” before January 1, 2019, he will be entitled to severance pay in the amount of 24 months of his then current base salary and target annual bonus for such period.

Mr. Wilson’s offer letter also provides that his Spin-Off RSU Grant will fully vest in the event his employment is terminated by WestRock or Ingevity without “cause.”

His offer letter further provides that in the event of a termination of employment by WestRock or Ingevity without “cause” or a resignation by Mr. Wilson for “good reason” within twelve months following a change of control, (i) all long-term incentive awards granted to Mr. Wilson during the initial 12 months after he commenced employment with WestRock will vest at target and (ii) if such change of control occurs on or before January 1, 2019, he will be entitled to severance pay in an amount equal to three years of his then current base salary and annual target bonus for such period.

Payment of any severance as reflected in Mr. Wilson’s offer letter will be made over the period of time used to calculate his severance (i.e., two or three years) in accordance with Internal Revenue Code Section 409A and will be payable only after the execution of an agreement of release of claims by him against Ingevity or any of its successors.

Employment Letter with John Fortson

On September 15, 2015, WestRock entered into an employment arrangement with John Fortson that became effective as of October 12, 2015 and which includes the following terms. Mr. Fortson will serve as Chief Financial Officer of Ingevity with an annual base salary of  $475,000 and a target annual bonus of 70% of annual base salary. His 2015 annual bonus for the period beginning October 12, 2015 and ending with the Separation will be prorated assuming target performance. In addition to Mr. Fortson’s base salary and annual bonus, he will be eligible for welfare and retirement benefits commensurate with all benefits offered to other Ingevity employees.

In the event that WestRock determines not to complete the Separation, and Mr. Fortson voluntarily chooses to terminate his employment with WestRock within 60 days thereafter, he will receive $1,638,750, payable in twelve equal monthly installments beginning 30 days after his termination of employment, unless a delay is required by Internal Revenue Code Section 409A.

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The employment offer letter also provides that beginning in 2017, Mr. Fortson’s annual long-term incentive award will be delivered in the form of restricted stock units, which may be subject to the satisfactory performance of pre-approved company performance metrics, and options. It is anticipated that the annual grant would have a target value of 175% of Mr. Fortson’s base salary and would be subject to a vesting period of three to five years, with the mix of equity subject to change by the Compensation Committee. The performance-based multipliers for restricted stock units may range from 0% to 200%, as determined by the level of achievement of applicable performance goals for the performance period attached to each long-term award.

The offer letter further provides that Mr. Fortson will receive a long-term incentive award with an estimated target value equal to $1,000,000 at the time of the Separation, which will be delivered in the form of service-based restricted stock units, performance-based restricted stock units and options. Mr. Fortson will also receive an award of service-based restricted stock units with a value of  $750,000 effective as of the Separation date, which will vest ratably over the first, second and third year anniversary dates of his employment commencement date. Mr. Fortson also received a one-time bonus of  $250,000 paid during 2015 (subject to repayment under certain circumstances) to assist in transition expenses associated with his relocation to Charleston South Carolina from Northfield, Illinois, as well as a Guaranteed Buy Out (GBO) relocation package under the Ingevity relocation policy generally available to all employees.

Employment Letter with Katherine P. Burgeson

On October 8, 2015, WestRock entered into an employment arrangement with Kathy Pryor Burgeson that became effective as of November 1, 2015 and which includes the following terms. Ms. Burgeson will serve as General Counsel and Secretary of Ingevity with an annual base salary of  $320,000 and a target annual bonus of 45% of annual base salary. Her 2015 annual bonus for the period beginning October 1, 2015 and ending with the Separation will be prorated assuming target performance. In addition to Ms. Burgeson’s base salary and annual bonus, she will also be eligible for welfare and retirement benefits commensurate with all benefits offered to other Ingevity employees. The letter provides further that as a condition of Ms. Burgeson’s acceptance of her position with Ingevity she waives any right to severance in connection with her employment with WestRock or MWV.

In the event that WestRock determines not to complete the Separation, and Ms. Burgeson voluntarily chooses to terminate her employment with WestRock within 60 days thereafter, she will receive a severance payment equal to $719,822 payable in 12 equal monthly installments beginning 30 days after her termination of employment, unless a delay in payment is required by Internal Revenue Code Section 409A.

The employment offer terms also provide that, beginning in 2017, Ms. Burgeson’s annual long-term incentive will be delivered in the form of restricted stock units, which may be subject to the satisfactory performance of pre-approved company performance metrics, and options. It is anticipated that the annual grant would have a value of 85% percent of Ms. Burgeson’s base salary and would be subject to a vesting period of three to five years, with the mix of equity subject to change by the Compensation Committee. The performance-based multipliers for restricted stock units may range from 0% to 200%, as determined by the level of achievement of applicable performance goals for the performance period attached to each long-term award.

The employment offer terms also provides that at the time of Separation, Ms. Burgeson will receive a long-term incentive award with an estimated target value equal to $270,000, to be delivered in the form of service-based and performance-based restricted stock units and options. Ms. Burgeson also received a one-time bonus of  $50,000 during 2015 (subject to repayment under certain circumstances) to assist in transition expenses associated with her relocation to Charleston, South Carolina from Richmond, Virginia, as well as a Guaranteed Buy Out (GBO) relocation package under the Ingevity relocation policy generally available to all employees.

Severance & Change of Control Severance for Mr. Fortson and Ms. Burgeson

The terms of each offer letter for Mr. Fortson and Ms. Burgeson also provide that in the event the executive’s employment is terminated without “cause” before January 1, 2019, the executive will be entitled to severance pay in the amount of 18 months of his or her then current base salary and target annual bonus for such period.

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The offer letters further provide that in the event that a change of control, if the executive is terminated by WestRock or Ingevity without “cause” or the executive resigns with “good reason” during the 12 month period following such change of control, (i) all long-term incentive awards granted to each executive during the initial 12 months after each executive commenced employment with WestRock will vest at target, and (ii) if such change of control occurs on or before January 1, 2019, each executive will be entitled to severance pay in an amount equal to 24 months of his or her then current base salary and annual target bonus for such period.

Payment of any severance pay as reflected in each offer letter will be made over the period of time used to calculate the executive’s severance (e.g., 18 or 24 months) in accordance with Internal Revenue Code Section 409A and will be payable only after the execution of an agreement of release of claims by the executive against Ingevity or any of its successors.

Treatment of WestRock Company Equity-Based Incentive Awards Upon the Separation.

WestRock equity-based incentive awards held by Ingevity employees will remain WestRock equity incentive awards following the separation. The number of shares covered by, and, in the case of stock options and stock appreciation rights, the per share exercise price of, WestRock equity-based incentive awards will be adjusted to reflect the separation and to maintain the intrinsic value of the WestRock equity-based incentive awards immediately prior to and immediately following the separation, subject to rounding.

Any WestRock stock option or stock appreciation right that is unvested immediately prior to the separation and is held by an Ingevity employee will vest in full upon the occurrence of the separation. WestRock restricted stock units that were granted prior to 2015 that are unvested immediately prior to the separation and are held by an Ingevity employee will vest in full upon the occurrence of the separation. WestRock restricted stock units that were granted in 2015 that are unvested immediately prior to the separation and are held by an Ingevity employee will vest on a pro-rata basis upon the occurrence of the separation, with vesting of any performance stock units based on the achievement of target goals.

Under the terms of the employee matters agreement between WestRock and Ingevity, Ingevity is responsible for reimbursing WestRock on an ongoing basis for the cost of WestRock equity-based incentive awards held by Ingevity employees based on the fair market value of a WestRock share on the vesting date in the case of restricted stock units and performance stock units, and, in the case of stock options or stock appreciation rights, based on the difference between the per share exercise price and the fair market value of a WestRock share on the exercise date. WestRock and Ingevity will cooperate so that the value of any tax benefit realized by WestRock in connection with the vesting or exercise of WestRock equity awards held by Ingevity employees will be transferred to Ingevity.

Ingevity Compensation Programs Following the Separation

In connection with the Separation, Ingevity expects to adopt benefit plans and executive compensation plans and policies (some of which are already in place, as described below). We anticipate that, immediately after the Separation, Ingevity’s compensation philosophy and executive compensation plans and policies will be similar to WestRock’s, and will be comprised of base salaries, an annual performance-based bonus or short term incentive program, long-term incentive awards and retirement benefits. Following the Separation, the Compensation Committee may consider and further develop Ingevity’s compensation policies, practices and procedures, consistent with Ingevity’s business needs and goals, as appropriate.

Ingevity’s compensation plans and policies are currently being determined and many have not been finalized. Information regarding Ingevity’s compensation programs that have not been finalized will be included in subsequent amendments to this information statement if and as they are finalized prior to the Separation.

The following summarizes the principal components of Ingevity’s compensation plans and policies that have been determined, and that we expect to apply to Ingevity’s named executive officers.

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Ingevity Omnibus Incentive Plan

We expect to adopt an incentive plan (the “Ingevity Omnibus Incentive Plan”) prior to the Separation for the purpose of allowing us to grant equity-based and cash-based incentive awards to our eligible employees following the Separation.

We expect the following limitations to apply under the plan:

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Maximum number of shares underlying awards that may be granted: 4,000,000

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Maximum number of shares that may be granted pursuant to incentive stock options: 4,000,000

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No participant (other than a non-employee director) may be granted during any calendar year:

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stock options and stock appreciation rights covering in excess of 50,000 shares

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performance-based awards (other than stock options and SARs) intended to qualify under Section 162(m) of the tax code covering in excess of 100,000 shares

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No participant who is a non-employee director may be granted during any calendar year stock-based awards having a fair market value in excess of  $250,000 on the date of grant.

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No employee may be granted during any calendar year cash awards, restricted stock unit awards or performance unit awards that may be settled solely in cash having a value determined on the grant date in excess of  $4,000,000.

The foregoing share limits are subject to adjustment in certain circumstances to prevent dilution or enlargement.

We expect the terms of the Ingevity Omnibus Incentive Plan to allow us to grant stock options (including incentive stock options), stock appreciation rights (“SARs”), restricted stock, restricted stock units (including performance-vested restricted stock units (“PSUs”)), and cash awards (including short term incentives/bonuses) intended to qualify for the performance-based compensation exemption to the $1 million deduction limit under Section 162(m) of the Internal Revenue Code. However, we will reserve the right to grant awards that do not qualify for this exemption, and in some cases, the exemption may cease to be available for some or all awards that otherwise would so qualify. Performance goals to be included in the Plan that the Committee may use in connection with performance awards may include financial and market related metrics. All of our employees would be eligible for awards under the plan. Restricted stock, restricted stock units, PSUs and other full-value awards would count as two shares against the share reserve, while stock options and SARs would count as one share. Shares subject to Replacement Awards that were expired, forfeited or otherwise terminated without the issuance of shares would not be recycled back into the share reserve.

The Compensation Committee would have broad authority to grant awards and otherwise administer the Ingevity Omnibus Incentive Plan. The plan would become effective upon the effective time of the Separation and would continue in effect for a period of 10 years thereafter, unless earlier terminated by our board of directors. Our board of directors would have the authority to amend the plan in such respects as it deemed desirable, provided that any amendments that would increase the share reserve (other than pursuant to a recapitalization event described above), expand the class of persons eligible to participate in the plan or the types of awards available for grant under the plan, or that would otherwise be considered a material modification for purposes of applicable tax or securities laws or exchange listing requirements, would require the approval of our stockholders.

Ingevity Retirement Savings Plan

In preparation for the Separation, Ingevity adopted a qualified 401(k) savings plan effective as of January 1, 2016, as its primary retirement vehicle for all employees including Ingevity’s named executive officers. The savings plan formula permits an employee who contributes six percent of pay to receive a one-hundred percent matching contribution on such amount (excluding bargained hourly employees eligible to participate in the plan and to whom a different formula applies). Employee and matching contributions under the savings plan are one-hundred percent vested immediately. The plan also provides for a non-elective employer contribution in the amount of three percent of pay, which vests upon the

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completion of three years of service. In addition, certain grandfathered participants who were participants in the legacy MWV defined benefit plan (including Ingevity’s named executive officers) are eligible for a transition contribution in the amount of ten percent of pay if they were at least age fifty and their age and years of service equaled 75 as of December 31, 2015. Messrs. Rose and Woodcock are eligible to receive this transition contribution, which will be made each year as soon as administratively practicable following the end of each plan year until the earlier of December 31, 2020 or the year in which he retires. The plan offers a broad range of investment vehicles into which plan participants may direct their account balances.

Ingevity Deferred Compensation Plan

In preparation for the Separation, Ingevity also adopted a non-qualified deferred compensation plan effective as of January 1, 2016, that with respect to earnings and benefits, exceed Internal Revenue Code limits on qualified plan benefits and mirror the benefit formulas under the savings plan described above. Employees eligible to participate in this plan include only those participants considered to be a select group of highly paid management employees, including Ingevity’s named executive officers. This plan provides for the same matching contribution formula as the qualified plan described above and also permits executives to defer base salary and annual incentive cash compensation. Similar to the qualified savings plan, the plan offers executives a choice of conventional investment vehicles with no assurance of any particular rate of return and does not guarantee an above market rate of return. The plan also includes a real estate investment trust and a natural resources investment fund not available to qualified 401(k) saving plan participants.

Consulting Agreements with Prospective Board Members

Ingevity has entered into consulting agreements with each prospective non-employee member of the board of directors. Pursuant to the agreements, each prospective member of the board of directors received a lump sum cash payment on March 1, 2016 equal to $18,750 for prospective non-employee directors and $62,500 for the prospective Chairman. The agreements provide for the prospective non-employee directors to engage in advance planning activities with Ingevity management prior to their election to the board. The agreements terminate upon the effective date of the separation, or, if the separation has not occurred by May 30, 2016, on such date.

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STOCK OWNERSHIP

As of the date of this information statement, all of the outstanding shares of Ingevity’s common stock are owned by WestRock. The following tables provide information with respect to the expected beneficial ownership of Ingevity common stock by (1) each of Ingevity’s directors, (2) each officer named in the Summary Compensation Table, (3) all of Ingevity’s executive officers and directors nominees as a group, and (4) each of our stockholders who we believe will be a beneficial owner of more than 5% of Ingevity outstanding common stock based on current publicly available information. We based the share amounts on each person’s beneficial ownership of WestRock common stock as of  [•], 2016, and applying the distribution ratio of  [•] shares of our common stock for every share of WestRock common stock, unless we indicate some other date or basis for the share amounts in the applicable footnotes.

Except as otherwise noted in the footnotes below, each person or entity identified below has sole voting and investment power with respect to such securities. Following the distribution, Ingevity will have outstanding an aggregate of approximately [•] million shares of common stock based upon approximately [•] shares of WestRock common stock outstanding on [•], 2016, excluding treasury shares and assuming no exercise of WestRock options, and applying the distribution ratio of  [•] share of our common stock for every share of WestRock common stock held as of the record date for the distribution.

To the extent our directors and executive officers own WestRock common stock at the record date for the distribution, they will participate in the distribution on the same terms as other holders of WestRock common stock.

Security Ownership of Certain Beneficial Owners

The following table reports the number of shares of Ingevity common stock that Ingevity expects will be beneficially owned, immediately following the completion of the distribution, by each person who will beneficially own more than 5% of Ingevity’s common stock. The table is based upon information available as of  [•], 2016, as to those persons who beneficially own more than 5% of WestRock’s common stock.

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership		Percent of Class
[   ]	​	[         ]	​	[      ]

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Security Ownership of Executive Officers and Directors

The following table sets forth information, immediately following the completion of the separation calculated as of  [•], 2016, regarding (1) each expected director, director nominee and named executive officer of Ingevity and (2) all of Ingevity’s expected directors and executive officers as a group. The address of each director, director nominee and executive officer shown in the table below is c/o Ingevity Corporation, Attention: Secretary, 5255 Virginia Avenue, North Charleston, South Carolina 29406.

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership		Exercisable Stock Options		Percent of Class
Richard B. Kelson	​	[         ]	​	[         ]	​	[         ]
Jean S. Blackwell	​		​		​
Luis Fernandez-Moreno	​		​		​
J. Michael Fitzpatrick	​		​		​
Frederick J. Lynch	​		​		​
Daniel F. Sansone	​		​		​
D. Michael Wilson	​		​		​
John C. Fortson	​		​		​
Edward Rose	​		​		​
S. Edward Woodcock, Jr.	​		​		​
Katherine Pryor Burgeson	​		​		​
All directors and officers as a group (11 persons)	​		​		​

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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

Agreements with WestRock

Following the separation and distribution, Ingevity and WestRock will operate separately, each as an independent public company. Ingevity will enter into a separation and distribution agreement with WestRock, which is referred to in this information statement as the “separation agreement” or the “separation and distribution agreement.” In connection with the separation, Ingevity will also enter into various other agreements to effect the separation and provide a framework for its relationship with WestRock after the separation, such as a transition services agreement, intellectual property agreement, a tax matters agreement, an employee matters agreement, a lease agreement and plant services agreement with respect to Ingevity’s operations adjoining WestRock’s Covington, Virginia facility and a long-term supply agreement for CTO. These agreements will provide for the allocation between Ingevity and WestRock of WestRock’s assets, employees, liabilities and obligations (including its investments, property and employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after Ingevity’s separation from WestRock and will govern certain relationships between Ingevity and WestRock after the separation. The agreements listed above are filed, or will be, as exhibits to the registration statement on Form 10 of which this information statement is a part.

The summaries of each of the agreements listed above are qualified in their entireties by reference to the full text of the applicable agreements, which are incorporated by reference into this information statement. When used in this section, “distribution date” refers to the date on which WestRock distributes Ingevity’s common stock to the holders of WestRock common shares.

The Separation and Distribution Agreement

Ingevity intends to enter into a separation and distribution agreement with WestRock prior to the distribution of our common stock to WestRock stockholders. The separation and distribution agreement will set forth our agreements with WestRock regarding the principal actions needed to be taken in connection with our separation from WestRock. It will also set forth other agreements that govern certain aspects of our relationship with WestRock following the separation.

Transfer of Assets and Assumption of Liabilities.   The separation and distribution agreement will identify certain transfers of assets and assumptions of liabilities, comprising the internal reorganization, that are necessary in advance of our separation from WestRock so that each of Ingevity and WestRock retains both the assets of, and the liabilities associated with, their respective businesses. The separation and distribution agreement will also provide for the settlement or extinguishment of certain liabilities and other obligations between Ingevity and WestRock.

Effective on the distribution date, all agreements, arrangements, commitments and understandings, including all intercompany accounts payable or accounts receivable, including intercompany indebtedness and intercompany work orders, between us and our subsidiaries and other affiliates, on the one hand, and WestRock and its other subsidiaries and affiliates, on the other hand, will terminate, except for certain agreements and arrangements, which are intended to survive the distribution.

Conditions to the Distribution.   The separation and distribution agreement will provide that the distribution is subject to satisfaction (or waiver by WestRock) of certain conditions. For further information regarding these conditions, see “The Separation — Conditions to the Distribution” beginning on page [•]. WestRock has the sole and absolute discretion to determine (and change) the terms of, and to determine whether to proceed with, the separation and, to the extent it determines to so proceed, to determine the record date for the distribution, the distribution date and the distribution ratio. The separation and distribution agreement will provide that the separation may be terminated, and the separation may be modified or abandoned, at any time prior to the distribution date.

The separation and distribution agreement will also contain certain provisions governing, among other things, the allocation of legal claims and liabilities, the release of claims between the parties and indemnification obligations following the separation. Additional descriptions of the material terms of the separation and distribution agreement will be included in an amendment to this information statement.

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The Transition Services Agreement

Ingevity and WestRock will enter into a transition services agreement prior to the distribution pursuant to which WestRock and its subsidiaries will provide, on an interim, transitional basis, various services to Ingevity. The agreed upon charges for such services will be generally intended to allow the servicing party to recover all out-of-pocket costs and expenses of providing such services. Additional descriptions of the material terms of the transition services agreement will be included in an amendment to this information statement.

The Tax Matters Agreement

Prior to the distribution, Ingevity and WestRock will enter into a tax matters agreement that will govern the parties’ respective rights, responsibilities and obligations with respect to taxes, tax attributes, tax refunds, the preparation and filing of tax returns, the control of audits and other tax proceedings and assistance and cooperation in respect of tax matters.

In addition, the tax matters agreement will impose certain restrictions on Ingevity and its subsidiaries (including restrictions on share issuances, business combinations, sales of assets and similar transactions) that will be designed to preserve the qualification of the distribution and certain related transactions under Sections 355 and certain other relevant provisions of the Code. The tax matters agreement will provide special rules that allocate tax liabilities in the event the distribution and/or certain related transactions, does not so qualify. In general, under the tax matters agreement, each party is expected to be responsible for any taxes imposed on, and certain related amounts payable by, WestRock or Ingevity that arise from the failure of the distribution and/or certain related transactions, to qualify under Sections 355 and certain other relevant provisions of the Code, to the extent that the failure to so qualify is attributable to actions, events or transactions relating to such party’s respective stock, assets or business, or a breach of the relevant representations, warranties or covenants made by that party in the tax matters agreement.

The Intellectual Property Agreement

Ingevity and WestRock will enter into an intellectual property agreement pursuant to which WestRock will convey to Ingevity the intellectual property, software and technology dedicated to Ingevity’s business. WestRock will also grant to Ingevity a non-exclusive, worldwide, perpetual, irrevocable, fully paid-up, royalty-free right and license, solely for use in Ingevity’s field, to (1) use, reproduce, distribute, display, perform, make improvements and exploit intellectual property owned or controlled by WestRock and currently used in Ingevity’s business, and (2) make, have made, use, sell, offer to sell and import any goods and services incorporating, embodying or utilizing WestRock’s intellectual property currently used in Ingevity’s business. Ingevity’s license will be transferrable with any sale or transfer of an Ingevity business that utilizes the intellectual property, but the license is not otherwise sublicensable or transferable.

Ingevity will also grant back to WestRock a non-exclusive, worldwide, perpetual, irrevocable, fully paid-up, royalty-free right and license, for use in WestRock’s field, to (1) use, reproduce, distribute, display, perform, make improvements and exploit Ingevity’s intellectual property, and (2) make, have made, use, sell, offer to sell and import any goods and services incorporating, embodying or utilizing Ingevity’s intellectual property. The license to WestRock will be transferable or sublicensable solely to certain permitted parties, and with any sale or transfer of WestRock’s business that utilizes Ingevity’s intellectual property.

The Employee Matters Agreement

Prior to the distribution, Ingevity and WestRock will enter into an employee matters agreement with WestRock that will set forth our agreements with WestRock as to certain employment, compensation and benefits matters. The employee matters agreement will provide for the allocation and treatment of assets and liabilities arising out of employee compensation and benefit programs in which our employees participated prior to the distribution. In connection with the distribution, Ingevity will provide benefit plans and arrangements in which our employees will participate going forward. Generally, Ingevity will assume or retain sponsorship of, and liabilities relating to employees who will be transferred to us from WestRock in connection with the distribution.

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In particular, we will assume all liabilities for the benefits accrued by our employees who participate in a WestRock qualified defined benefit pension plan applicable to bargained hourly employees and WestRock will transfer to our newly established defined benefit pension plan assets corresponding to those liabilities. In addition, we will reimburse WestRock for liabilities relating to the participation of our employees and former employees under WestRock retiree medical plans. And we will be responsible for reimbursing WestRock for the cost of WestRock equity-based incentive awards held by Ingevity employees. We will also adopt and assume any collective bargaining, works council or other labor union contract or labor arrangement covering any of our employees and recognize the works councils, labor unions and other employee representatives that are party to such arrangements.

Crude Tall Oil and Black Liquor Soap Skimmings Agreement

Ingevity will enter into a long-term supply agreement with affiliates of WestRock whereby Ingevity will agree to purchase the entire output of CTO and BLSS (together, the “products”) from WestRock’s existing kraft mills. Under the agreement, WestRock is not required to produce any minimum quantity of the products, but also may not sell the products to third parties, subject to certain allowances including those described below. Pricing for the products based on the weighted average price we pay for CTO and BLSS purchased from other vendors. The pricing formulas are subject to certain pricing floors as set forth in the agreement.

The initial term of the agreement shall begin on the effective date and, beginning in 2025, either party may provide a notice to the other party terminating the agreement five years from the date of such notice. Beginning one year after such notice, the quantity of products provided by WestRock under the agreement will be gradually reduced over a four-year period based on the schedule set forth in the agreement. In addition, either party may terminate the agreement immediately upon the other party’s bankruptcy, liquidation or insolvency or upon a breach of any material provision of the agreement if, after thirty (30) days’ notice of such breach is given, such breach is not cured. From 2022 until 2025, either party may provide one-year notice to remove a kraft mill as a supply source. The two largest kraft mills under the agreement currently are expected to supply approximately 18.5% to 20.0% and 16.5% to 17.5%, respectively, of the total amount of products expected to be supplied under our agreement with WestRock.

Covington Lease Agreement and Plant Services Agreement

Affiliates of Ingevity and WestRock will enter into a fifty (50)-year lease and corresponding plant services agreement with respect to WestRock’s paperboard and pulp mill located in Covington, Virginia (the “Covington Mill”) where Ingevity currently operates a plant manufacturing its activated carbon product (the “Plant”). Pursuant to the lease, WestRock will transfer all of the economic benefits and burdens of the real property on which the Plant is located to Ingevity in exchange for the payment of nominal annual rent and all taxes against the property. The lease also provides for certain easement rights for Ingevity and WestRock to access parts of the Covington Mill and leased property, as necessary, to conduct their respective businesses and fulfill their obligations under the plant services agreement.

Under the lease, Ingevity has the right to purchase the leased property at any time during the term for one (1) dollar. Ingevity also has the right to expand the lease, upon notice, to include (1) a sawdust storage area, in exchange for an increase in annual rent equal to the fair market rental value of such area and/or (2) a truck repair facility property and the buildings located thereon, in exchange for the payment of WestRock’s actual costs and expenses incurred in constructing or remodeling a replacement truck repair facility and relocating equipment to such facility. If Ingevity exercises its option to expand the leased property to include either or both of the sawdust storage area or truck repair facility, such additional properties shall become subject to Ingevity’s one (1) dollar purchase right with respect to the leased property.

In connection with the lease, affiliates of Ingevity and WestRock will also enter into a fifty (50)-year plant services agreement whereby WestRock will provide certain essential services and utilities to the Plant, including, but not limited to, steam, wastewater treatment, electricity, compressed air, fire, emergency and security, sawdust procurement, medical, and interim natural gas supply. Ingevity will pay for the services and utilities on a monthly basis at rates generally based upon the cost of the services and WestRock’s and Ingevity’s relative use of such services and utilities. The parties will also share responsibility under the agreement to maintain and repair certain continuous or jointly used assets. The plant services agreement may

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be extended by mutual agreement of the parties beyond the initial term for additional five (5)-year renewal terms and certain indvidual services may be terminated early by either party upon written notice according to the specific terms of the agreement. In the event of a permanent closure of the Plant at any time following the exercise of Ingevity’s purchase option under the lease agreement, WestRock shall have the option to purchase the Plant and related property for the fair market value of such assets and property. Alternatively, in the event of a permanent closure of the Covington Mill or a discontinuance of maintenance or operation of critical services equipment by WestRock, Ingevity shall have the right to operate critical services equipment used by WestRock to provide services and utilities under the plant services agreement. Ingevity’s rights with respect to the interim operation of WestRock’s critical services equipment shall continue until the earlier of: (i) the date WestRock resumes operation of the equipment and provides the services and utilities to Ingevity under the plant services agreement, (ii) the date Ingevity is able to provide the services and utilities for itself or obtain the services and utilities from another source, (iii) the date WestRock is able to prove that operation of such critical services equipment by Ingevity will unreasonably interfere with WestRock’s ability to sell the Covington Mill or (iv) five years after WestRock gives notice to Ingevity of its intent to cease providing the services and utilities under the plant services agreement.

Procedures for Approval of Related Person Transactions

Our board recognizes that related person transactions can present potential or actual conflicts of interest and create the appearance that company decisions are based on considerations other than the best interests of the company and its stockholders. Prior to the spin-off, the board intends to delegate authority to the N&G Committee to review and approve related person transactions, and the N&G Committee will adopt a written policy and procedures for the review, approval or ratification of related person transactions.

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CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION

The following is a discussion of certain material U.S. federal income tax consequences of the distribution to “U.S. holders” (as defined below) of WestRock common stock. This summary is based on the Code, U.S. Treasury Regulations promulgated thereunder, rulings and other administrative pronouncements issued by the IRS, and judicial decisions, all as in effect on the date of this information statement, and all of which are subject to differing interpretations and change at any time, possibly with retroactive effect. This discussion applies only to U.S. holders of shares of WestRock common stock who hold such shares as a capital asset within the meaning of Section 1221 of the Code (generally, property held for investment). This discussion is based upon the assumption that the distribution, together with certain related transactions, will be consummated in accordance with the separation and distribution agreement and the other separation-related agreements and as described in this information statement. This summary is for general information only and is not tax advice. It does not discuss all aspects of U.S. federal income taxation that may be relevant to particular holders in light of their particular circumstances or to holders subject to special rules under the Code (including, but not limited to, insurance companies, tax-exempt organizations, financial institutions, broker-dealers, partners in partnerships (or entities or arrangements treated as partnerships for U.S. federal income tax purposes) that hold WestRock common stock, pass-through entities (or investors therein), traders in securities who elect to apply a mark-to-market method of accounting, shareholders who hold WestRock common stock as part of a “hedge,” “straddle,” “conversion,” “synthetic security,” “integrated investment” or “constructive sale transaction,” individuals who receive shares of WestRock or Ingevity common stock upon the exercise of employee stock options or otherwise as compensation, holders who are liable for the alternative minimum tax or any holders who actually or constructively own 5% or more of WestRock common stock). This discussion also does not address any tax consequences arising under the unearned Medicare contribution tax pursuant to the Health Care and Education Reconciliation Act of 2010, nor does it address any tax considerations under state, local or foreign laws or U.S. federal laws other than those pertaining to the U.S. federal income tax.

If a partnership, including for this purpose any entity or arrangement that is treated as a partnership for U.S. federal income tax purposes, holds WestRock common stock, the tax treatment of a partner in such partnership will generally depend upon the status of the partner and the activities of the partnership. Holders of WestRock common stock that are partnerships and partners in such partnerships should consult their own tax advisors about the U.S. federal income tax consequences of the distribution.

For purposes of this discussion, a “U.S. holder” is any beneficial owner of WestRock common stock that is, for U.S. federal income tax purposes:

•

an individual who is a citizen or a resident of the United States;

•

a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized under the laws of the United States, any state thereof or the District of Columbia;

•

an estate, the income of which is subject to U.S. federal income taxation regardless of its source; or

•

a trust, (i) if a court within the United States is able to exercise primary supervision over its administration and one or more United States persons have the authority to control all of its substantial decisions or (ii) that has a valid election in place under applicable Treasury Regulations to be treated as a United States person.

THE FOLLOWING DISCUSSION IS A SUMMARY OF CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION UNDER CURRENT LAW AND IS FOR GENERAL INFORMATION ONLY. ALL HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE DISTRIBUTION TO THEM, INCLUDING THE APPLICATION AND EFFECT OF U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS.

WestRock received a private letter ruling from the IRS on January 4, 2016, regarding certain U.S. federal income tax matters relating to the separation, distribution and certain related transactions. Conditions to the distribution include that (i) the private letter ruling that WestRock received from the IRS

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regarding certain U.S. federal income tax matters relating to the separation, distribution and related transactions shall not have been modified or revoked, and (ii) WestRock shall have received opinions from its tax advisors, reasonably satisfactory to WestRock, regarding the qualification of the distribution, together with certain related transactions, as a transaction that is generally tax-free, for U.S. federal income tax purposes, under Sections 355 and 368(a)(1)(D) of the Code. The IRS private letter ruling and any opinion of outside counsel will be based upon and rely on, among other things, certain facts and assumptions, as well as certain representations, statements and undertakings of WestRock and Ingevity, including those relating to the past and future conduct of WestRock and Ingevity. If any of these facts, assumptions, representations, statements or undertakings is, or becomes, inaccurate or incomplete, or if WestRock or Ingevity breaches any of its respective covenants contained in any of the separation-related agreements or documents relating to any tax opinion, the IRS private letter ruling and/or any opinion of outside counsel may be invalid and the conclusions reached therein could be jeopardized.

Notwithstanding the IRS private letter ruling and any opinion of counsel, the IRS could determine that the distribution should be treated as a taxable transaction for U.S. federal income tax purposes if it determines that any of the facts, assumptions, representations, statements or undertakings upon which the IRS private letter ruling or any opinion was based is false or has been violated, or if it disagrees with the conclusions in any such opinion. The IRS private letter ruling will not address all of the issues that are relevant to determining whether the separation, distribution and certain related transactions will be generally tax-free for U.S. federal income tax purposes, and an opinion of outside counsel or other external tax advisor represents the judgment of such counsel or advisor which is not binding on the IRS or any court. Accordingly, notwithstanding receipt of the IRS private letter ruling and the tax opinions referred to above, there can be no assurance that the IRS will not assert that the separation, distribution and/or certain related transactions do not qualify for tax-free treatment for U.S. federal income tax purposes or that a court would not sustain such a challenge. If the IRS were successful in any such challenge, WestRock, Ingevity and WestRock shareowners could be subject to significant U.S. federal income tax liability. See “— Certain Material U.S. Federal Income Tax Consequences if the Distribution is Taxable” below.

Certain Material U.S. Federal Income Tax Consequences if the Distribution Qualifies as a Transaction That is Generally Tax-Free Under Sections 355 and 368(a)(1)(D) of the Code.

Assuming the distribution, together with certain related transactions, qualifies as a transaction that is generally tax-free, for U.S. federal income tax purposes, under Sections 355 and 368(a)(1)(D) of the Code, the U.S. federal income tax consequences of the distribution generally will be as follows:

•

no gain or loss will be recognized by, and no amount will be includible in the income of WestRock as a result of the distribution, other than gain or income arising in connection with certain internal restructurings undertaken in connection with the distribution and with respect to any “excess loss account” or “intercompany transaction” required to be taken into account by WestRock under U.S. Treasury regulations relating to consolidated federal income tax returns;

•

no gain or loss will be recognized by (and no amount will be included in the income of) U.S. holders of WestRock common stock, upon the receipt of shares of Ingevity common stock in the distribution, except with respect to any cash received in lieu of fractional shares of Ingevity common stock (as described below);

•

the aggregate tax basis of the WestRock common stock and the Ingevity common stock received in the distribution (including any fractional share interest in Ingevity common stock for which cash is received) in the hands of each U.S. holder of WestRock common stock immediately after the distribution will equal the aggregate basis of WestRock common stock held by the U.S. holder immediately before the distribution, allocated between the WestRock common stock and the Ingevity common stock (including any fractional share interest in Ingevity common stock for which cash is received) in proportion to the relative fair market value of each on the date of the distribution; and

•

the holding period of the Ingevity common stock received in the distribution by each U.S. holder of WestRock common stock (including any fractional share interest in Ingevity common stock for which cash is received) will generally include the holding period at the time of the distribution for the WestRock common stock with respect to which the distribution is made.

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A U.S. holder who receives cash in lieu of a fractional share of Ingevity common stock in the distribution will be treated as having sold such fractional share for cash, and will recognize capital gain or loss in an amount equal to the difference between the amount of cash received and such U.S. holder’s adjusted tax basis in such fractional share. Such gain or loss will be long-term capital gain or loss if the U.S. holder’s holding period for its WestRock common stock exceeds one year at the time of the distribution.

If a U.S. holder of WestRock common stock holds different blocks of WestRock common stock (generally shares of WestRock common stock acquired on different dates or at different prices), such holder should consult its tax advisor regarding the determination of the basis and holding period of shares of Ingevity common stock received in the distribution in respect of particular blocks of WestRock common stock.

Certain Material U.S. Federal Income Tax Consequences if the Distribution is Taxable.

As discussed above, notwithstanding receipt by WestRock of an opinion of counsel, the IRS could assert that the distribution does not qualify for tax-free treatment for U.S. federal income tax purposes. If the IRS were successful in taking this position, the consequences described above would not apply and WestRock, Ingevity and WestRock shareowners could be subject to significant U.S. federal income tax liability. In addition, certain events that may or may not be within the control of WestRock or Ingevity could cause the distribution and/or certain related transactions not to qualify for tax-free treatment for U.S. federal income tax purposes. Depending on the circumstances, Ingevity may be required to indemnify WestRock for taxes (and certain related losses) resulting from the distribution and/or certain related transactions not qualifying as tax-free for U.S. federal income tax purposes.

If the distribution fails to qualify as a tax-free transaction for U.S. federal income tax purposes, in general, WestRock would recognize taxable gain as if it had sold the Ingevity common stock in a taxable sale for its fair market value (unless WestRock and Ingevity jointly make an election under Section 336(e) of the Code with respect to the distribution, in which case, in general, (i) the WestRock group would recognize taxable gain as if Ingevity had sold all of its assets in a taxable sale in exchange for an amount equal to the fair market value of the Ingevity common stock and the assumption of all of Ingevity liabilities and (ii) Ingevity would obtain a related step up in the basis of its assets) and WestRock shareowners who receive shares of Ingevity common stock in the distribution would be subject to tax as if they had received a taxable distribution equal to the fair market value of such shares.

Even if the distribution, together with certain related transactions, were to otherwise qualify as tax-free, for U.S. federal income tax purposes, under Sections 355 and 368(a)(1)(D) of the Code, WestRock could still realize taxable gain under Section 355(e) of the Code if the distribution were later deemed to be part of a plan (or series of related transactions) pursuant to which one or more persons acquire, directly or indirectly, shares representing a 50% or greater interest (by vote or value) in WestRock or Ingevity, taking into account the stock indirectly acquired by Rock-Tenn stockholders in the Merger. For this purpose, any acquisitions of WestRock or Ingevity shares within the period beginning two years before the distribution and ending two years after the distribution, including the acquisition of such shares pursuant to the Merger, are presumed to be part of such a plan, although WestRock or Ingevity may be able to rebut that presumption.

In connection with the distribution, WestRock and Ingevity will enter into a tax matters agreement pursuant to which Ingevity will be responsible for certain liabilities and obligations following the distribution. In general, under the terms of the tax matters agreement, if the distribution and/or certain related transactions were to fail to qualify as a transaction that is generally tax-free, for U.S. federal income tax purposes, under Sections 355 and 368(a)(1)(D) of the Code (including as a result of Section 355(e) of the Code) and if such failure were the result of actions taken after the distribution by WestRock or Ingevity, the party responsible for such failure will be responsible for all taxes imposed on WestRock and Ingevity to the extent such taxes result from such actions. However, if such failure were the result of any acquisition of Ingevity shares or assets, or of any of Ingevity’s representations, statements or undertakings being incorrect, incomplete or breached, Ingevity generally would be responsible for all taxes imposed as a result of such acquisition or breach. For a discussion of the tax matters agreement, see “Certain Relationships and Related Person Transactions — The Tax Matters Agreement.” The indemnification obligations of

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Ingevity to WestRock under the tax matters agreement are not expected to be limited in amount or subject to any cap. If Ingevity is required to pay any taxes or indemnify WestRock and its subsidiaries and their respective officers and directors under the circumstances set forth in the tax matters agreement, Ingevity may be subject to substantial liabilities.

Backup Withholding and Information Reporting.

Payments of cash to U.S. holders of WestRock common stock in lieu of fractional shares of Ingevity common stock may be subject to information reporting and backup withholding (currently, at a rate of 28%), unless such U.S. holder delivers a properly completed IRS Form W-9 certifying such U.S. holder’s correct taxpayer identification number and certain other information, or otherwise establishes an exemption from backup withholding. Backup withholding is not an additional tax. Any amounts withheld under the backup withholding rules may be refunded or credited against a U.S. holder’s U.S. federal income tax liability provided that the required information is timely furnished to the IRS.

THE FOREGOING DISCUSSION IS A SUMMARY OF CERTAIN MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE DISTRIBUTION UNDER CURRENT LAW AND IS FOR GENERAL INFORMATION ONLY. ALL HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR TAX CONSEQUENCES OF THE DISTRIBUTION TO THEM, INCLUDING THE APPLICATION AND EFFECT OF U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX LAWS.

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DESCRIPTION OF MATERIAL INDEBTEDNESS

From and after the separation, each of Ingevity and WestRock Company will generally, pursuant to the separation and distribution agreement and other agreements we will enter into with WestRock or its subsidiaries, be responsible for the debts, liabilities and obligations related to the businesses it owns and operates following completion of the spin-off. See “Certain Relationships and Related Person Transactions — Agreements with WestRock.”

Revolving Credit and Term Loan Facilities

In connection with the spin-off, we have entered into a credit agreement governing a senior secured multi-currency revolving credit facility (the “Revolving Credit Facility”), which provides for maximum borrowings of  $400 million for Ingevity, with a €100 million subfacility for a Belgian subsidiary borrower of Ingevity (the “Belgian Borrower”) subject to certain additional conditions on the initial funding date. The Revolving Credit Facility allows for borrowings in U.S. dollars, euros and Japanese yen, with certain sub-limits. The Revolving Credit Facility has a letter of credit sub-limit of  $75 million and a swingline facility sub-limit of approximately $40 million. The Revolving Credit Facility will be available, subject to certain customary conditions, on and after the initial funding date for working capital and other general corporate purposes, and is expected to be drawn up to $225 million at closing.

lngevity has also entered into a senior secured term loan facility (the “Term Loan Facility” and together with the Revolving Credit Facility, the “Facilities”) of  $300 million, the proceeds of which, together with the funding date draw under the Revolving Credit Facility, we expect will be used to pay a dividend, distribution or other cash transfer of up to $500 million to WestRock or one of its subsidiaries prior to the consummation of the spin-off and to pay fees and expenses associated with the Facilities and the spin-off. The term loan will be funded subject to certain additional conditions on the funding date. We do not expect the financing transactions we have entered or will enter into in connection with the spin-off, including the payment of the dividend, distribution or other cash transfer to WestRock, to impact our cash flow requirements for 2016. We expect our operating free cash flows combined with cash on hand to be sufficient to meet our working capital needs.

The Facilities are documented in a credit agreement, dated March 7, 2016, which allows funding up to 10 business days prior to or substantially concurrently with the spin-off. Such credit agreement is included with this filing as Exhibit 10.8. The Facilities have the terms described below, qualified in their entirety by reference to the actual terms of the credit agreement.

Maturity; Amortization and Prepayments

The Facilities mature on the five-year anniversary of the initial funding date of the Facilities. The Term Loan Facility amortizes at a rate equal to 0% per annum during the first year after the funding date, 5% per annum during the second and third years after the funding date and 10% per annum during the fourth and fifth years after the funding date, with the balance due at maturity. The Term Loan Facility will require the proceeds of certain asset sales and casualty events to be applied to prepay the loans under the Term Loan Facility, subject to certain thresholds, exceptions and reinvestment rights.

Guarantees; Security

All domestic obligations of Ingevity under the Facilities will be unconditionally guaranteed by, subject to certain exceptions, each of its existing and future direct and indirect domestic subsidiaries. In addition, the obligations of the Belgian Borrower under the Revolving Credit Facility will be guaranteed by Ingevity’s existing and future direct and indirect subsidiaries organized in Belgium and by Ingevity and its existing and future direct and indirect domestic subsidiaries, in each case subject to certain exceptions. The Facilities will be secured by a first priority security interest in substantially all tangible and intangible assets of Ingevity and each guarantor, subject to certain exceptions.

Interest; Fees

The interest rates per annum applicable to the loans under the Facilities are based on a fluctuating rate of interest measured by reference to, at the borrowers’ election, either (1) an adjusted London inter-bank offered rate (LIBOR) plus a borrowing margin, or (2) an alternate base rate plus a borrowing margin. The

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borrowing margin for the Facilities is subject to adjustment based on Ingevity’s consolidated total leverage ratio, and is between 1.25% and 2.00% in the case of LIBOR loans and between 0.25% and 1.00% in the case of base rate loans.

Customary fees will be payable in respect of both Facilities. The Revolving Credit Facility fees will include (i) commitment fees, based on a percentage of the daily unused portions of the facility ranging from 0.15% to 0.30%, and (ii) customary letter of credit fees.

Representations and Warranties; Covenants

The Facilities contain various representations and warranties and restrictive covenants that, among other things and subject to specified exceptions, restrict the ability of Ingevity and its restricted subsidiaries to incur indebtedness (including guarantees), grant liens, make investments, make dividends or distributions with respect to capital stock, make prepayments on other indebtedness, engage in mergers or change the nature of their business. In addition, the Facilities include financial covenants requiring Ingevity to maintain on a consolidated basis, as of the end of each fiscal quarter, a maximum total leverage ratio of 3.75 to 1.00, which may be increased to 4.25 to 1.00 under certain circumstances and a minimum interest coverage ratio of 3.00 to 1.00, in each case, as of the first fiscal quarter ending after the funding date.

The Facilities contain certain affirmative covenants, including reporting requirements such as delivery of financial statements, certificates and notices of certain events, maintaining insurance, and providing additional guarantees and collateral in certain circumstances.

Events of Default

The Facilities include customary events of default including non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations or warranties, cross default to certain other material indebtedness, bankruptcy and insolvency events, invalidity or impairment of guarantees or security interests, material judgments and change of control.

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DESCRIPTION OF CAPITAL STOCK

Ingevity’s certificate of incorporation and bylaws will be amended and restated prior to the separation. The following is a summary of the material terms of Ingevity’s capital stock that will be contained in the amended and restated certificate of incorporation and amended and restated bylaws. The summaries and descriptions below do not purport to be complete statements of the relevant provisions of the certificate of incorporation or of the bylaws to be in effect at the time of the distribution, which you must read for complete information on Ingevity’s capital stock as of the time of the distribution. The amended and restated certificate of incorporation and amended and restated bylaws, each in a form expected to be in effect at the time of the distribution, are included as exhibits to Ingevity’s registration statement on Form 10, of which this information statement forms a part. Ingevity will include its amended and restated certificate of incorporation and amended and restated bylaws, as in effect at the time of the distribution, in a Current Report on Form 8-K filed with the SEC. The summaries and descriptions below do not purport to be complete statements of the DGCL.

General

Prior to the distribution, our board of directors and WestRock, as our sole stockholder, will approve and adopt our amended and restated certificate of incorporation and amended and restated bylaws. Under our amended and restated certificate of incorporation, authorized capital stock will consist of  [•] million shares of our common stock, par value $0.01 per share, and [•] million shares of our preferred stock, par value $0.01 per share.

Common Stock

We estimate that approximately [•] shares of our common stock will be issued and outstanding immediately after the separation, based on the number of shares of WestRock common stock that we expect will be outstanding as of the record date. The actual number of shares of our common stock outstanding following the separation will be determined on [•], 2016, the record date.

Dividend Rights.   Subject to the rights, if any, of the holders of any outstanding series of our preferred stock, holders of our common stock will be entitled to receive dividends out of any of our funds legally available when, as and if declared by our board of directors.

Voting Rights.   Each holder of our common stock is entitled to one vote per share on all matters on which stockholders are generally entitled to vote. Our amended and restated certificate of incorporation does not provide for cumulative voting in the election of directors.

Liquidation.   If we liquidate, dissolve or wind up our affairs, holders of our common stock are entitled to share proportionately in the assets of Ingevity available for distribution to stockholders, subject to the rights, if any, of the holders of any outstanding series of our preferred stock.

Other Rights.   All of our outstanding shares of common stock are fully paid and nonassessable, and the shares of common stock we will issue in connection with the distribution also will be fully paid and nonassessable. The holders of our common stock have no preemptive rights and no rights to convert their common stock into any other securities, and our common stock is not subject to any redemption or sinking fund provisions.

Preferred Stock

Under our amended and restated certificate of incorporation and subject to the limitations prescribed by law, our board of directors may issue our preferred stock in one or more series, and may establish from time to time the number of shares to be included in such series and may fix the designation, powers, privileges, preferences and relative participating, optional or other rights, if any, of the shares of each such series and any qualifications, limitations or restrictions thereof. See “— Anti-Takeover Effects of Various Provisions of Delaware Law and Ingevity’s Certificate of Incorporation and Bylaws.”

Our preferred stock will, if issued, be fully paid and nonassessable. When and if we issue preferred stock, we will establish the applicable preemptive rights, dividend rights, voting rights, conversion privileges, redemption rights, sinking fund rights, rights upon voluntary or involuntary liquidation, dissolution or winding up and any other relative rights, preferences and limitations for the particular preferred stock series.

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Anti-Takeover Effects of Various Provisions of Delaware Law and Ingevity’s Certificate of Incorporation
and Bylaws

Provisions of the DGCL and Ingevity’s amended and restated certificate of incorporation and amended and restated bylaws could make it more difficult to acquire Ingevity by means of a tender offer, a proxy contest or otherwise, or to remove incumbent officers and directors. These provisions, including those summarized below, may discourage certain types of coercive takeover practices and takeover bids that Ingevity’s board of directors may consider inadequate and to encourage persons seeking to acquire control of Ingevity to first negotiate with Ingevity’s board of directors. Ingevity believes that the benefits of increased protection of its ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure it outweigh the disadvantages of discouraging takeover or acquisition proposals because, among other things, negotiation of these proposals could result in an improvement of their terms.

Delaware Anti-Takeover Statute.   Ingevity will be subject to Section 203 of the DGCL, an anti-takeover statute. In general, Section 203 of the DGCL prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interested stockholder” for a period of three years following the time the person became an interested stockholder, unless the business combination or the acquisition of shares that resulted in a stockholder becoming an interested stockholder is approved in a prescribed manner. Generally, a “business combination” includes a merger, asset or stock sale or other transaction resulting in a financial benefit to the interested stockholder. Generally, an “interested stockholder” is a person who, together with affiliates and associates, owns (or within three years prior to the determination of interested stockholder status did own) 15% or more of a corporation’s voting stock. The existence of this provision would be expected to have an anti-takeover effect with respect to transactions not approved in advance by Ingevity’s board of directors, including discouraging attempts that might result in a premium over the market price for the shares of common stock held by Ingevity’s stockholders.

Classified Board.   Upon completion of the separation, Ingevity’s board of directors will initially be divided into three classes, with Class I comprised of two directors, Class II comprised of two directors and Class III comprised of three directors. The directors designated as Class I directors will have terms expiring at the first annual meeting of stockholders following the distribution, which Ingevity expects to hold in 2017. The directors designated as Class II directors will have terms expiring at the following year’s annual meeting of stockholders, which Ingevity expects to hold in 2018, and the directors designated as Class III directors will have terms expiring at the following year’s annual meeting of stockholders, which Ingevity expects to hold in 2019. Commencing with the first annual meeting of stockholders following the distribution, directors elected to succeed those directors whose terms then expire shall be elected for a term of office to expire at the 2019 annual meeting of stockholders. Beginning at the 2019 annual meeting, all of our directors will stand for election each year for annual terms, and our board will therefore no longer be divided into three classes.

At any meeting of stockholders for the election of directors at which a quorum is present, the election will be determined by a majority of the votes cast by the stockholders entitled to vote in the election, with directors not receiving a majority of the votes cast required to tender their resignations for consideration by the board, except that in the case of a contested election, the election will be determined by a plurality of the votes cast by the stockholders entitled to vote in the election. Before Ingevity’s board is declassified, it would take at least two elections of directors for any individual or group to gain control of Ingevity’s board. Accordingly, while the classified board is in effect, these provisions could discourage a third party from initiating a proxy contest, making a tender offer or otherwise attempting to gain control of Ingevity.

Removal.   Ingevity’s amended and restated certificate of incorporation and amended and restated bylaws will provide that (i) prior to the board being fully declassified as discussed above, stockholders may remove Ingevity’s directors only for cause, and that (ii) after the board has been fully declassified, stockholders may remove Ingevity’s directors with or without cause. Removal will require the affirmative vote of holders of a majority of Ingevity’s voting stock.

Size of Board and Vacancies.   Ingevity’s amended and restated bylaws will provide that the number of directors will be fixed exclusively by the board of directors. Any vacancies created on its board of directors resulting from any increase in the authorized number of directors or the death, resignation, retirement, disqualification, removal from office or other cause will be filled by a majority of the board of directors then in office, even if less than a quorum is present, or by a sole remaining director. Any director appointed

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to fill a vacancy on Ingevity’s board of directors will be appointed until the next annual meeting and until his or her successor has been elected and qualified.

Stockholder Action by Written Consent.   Ingevity’s amended and restated certificate of incorporation will expressly eliminate the right of its stockholders to act by written consent. Stockholder action may only take place at an annual or a special meeting of Ingevity stockholders.

Requirements for Advance Notification of Stockholder Nominations and Proposals.   Ingevity’s amended and restated bylaws will establish advance notice procedures with respect to stockholder proposals and nomination of candidates for election as directors other than nominations made by or at the direction of its board of directors or a committee of its board of directors.

No Cumulative Voting.   The DGCL provides that stockholders are denied the right to cumulate votes in the election of directors unless the company’s certificate of incorporation provides otherwise. Ingevity’s amended and restated certificate of incorporation will not provide for cumulative voting.

Undesignated Preferred Stock.   The authority that Ingevity’s board of directors will possess to issue preferred stock could potentially be used to discourage attempts by third parties to obtain control of Ingevity through a merger, tender offer, proxy contest or otherwise by making such attempts more difficult or more costly. Ingevity’s board of directors may be able to issue preferred stock with voting rights or conversion rights that, if exercised, could adversely affect the voting power of the holders of common stock.

Amendments to Bylaws.   Ingevity’s amended and restated bylaws will provide that certain bylaw provisions may only be amended by Ingevity’s board of directors or by the affirmative vote of holders of 75% of Ingevity’s voting stock then outstanding.

Amendments to Charter.   Ingevity’s amended and restated certificate of incorporation will provide that certain of its provisions may only be amended by the affirmative vote of holders of 75% of Ingevity’s voting stock then outstanding.

Stock Exchange Listing

We intend to apply for authorization to list Ingevity common stock on the NYSE under the ticker symbol “NGVT”.

Limitation on Liability of Directors and Indemnification of Directors and Officers

Elimination of Liability of Directors.   The DGCL authorizes corporations to limit or eliminate the personal liability of directors to corporations and their stockholders for monetary damages for breaches of directors’ fiduciary duties as directors, and Ingevity’s amended and restated certificate of incorporation will include such an exculpation provision. Ingevity’s amended and restated certificate of incorporation will provide that, to the fullest extent permitted by the DGCL, no director will be personally liable to us or to our stockholders for monetary damages for breach of fiduciary duty as a director. While Ingevity’s amended and restated certificate of incorporation will provide directors with protection from awards for monetary damages for breaches of their duty of care, it will not eliminate this duty. Accordingly, Ingevity’s amended and restated certificate of incorporation will have no effect on the availability of equitable remedies such as an injunction or rescission based on a director’s breach of his or her duty of care. The provisions of Ingevity’s amended and restated certificate of incorporation described above apply to an officer of Ingevity only if he or she is a director of Ingevity and is acting in his or her capacity as director, and do not apply to officers of Ingevity who are not directors.

Indemnification of Directors, Officers and Employees.   Our amended and restated bylaws will require us to indemnify any person who was or is a party or is threatened to be made a party to, or was otherwise involved in, a legal proceeding by reason of the fact that he or she is or was a director, officer or employee of Ingevity or, while a director, officer or employee of Ingevity, is or was serving at our request in a fiduciary capacity with another enterprise (including any corporation, partnership, limited liability company, joint venture, trust, association or other unincorporated organization or other entity and any employee benefit plan, to the fullest extent authorized by the DGCL, as it exists or may be amended, against all expense, liability and loss (including attorneys’ fees, judgments, fines, U.S. Employee Retirement

122

Income Security Act of 1974, as amended, excise taxes or penalties and amounts paid in settlement by or on behalf of such person) actually and reasonably incurred in connection with such service. We will be authorized under our amended and restated bylaws to carry directors’ and officers’ insurance protecting us, any director, officer or employee of ours or, against any expense, liability or loss, whether or not we would have the power to indemnify the person under the DGCL. We may, to the extent authorized from time to time, indemnify any of our agents to the fullest extent permitted with respect to directors, officers and employees in our amended and restated bylaws.

The limitation of liability and indemnification provisions in our amended and restated certificate of incorporation and amended and restated bylaws may discourage stockholders from bringing a lawsuit against our directors for breach of fiduciary duty. These provisions also may reduce the likelihood of derivative litigation against our directors and officers, even though such an action, if successful, might otherwise benefit us and our stockholders. In addition, your investment in our common stock may be adversely affected to the extent we pay the costs of settlement and damage awards under these indemnification provisions.

By its terms, the indemnification that will be provided for in Ingevity’s amended and restated bylaws is not exclusive of any other rights that the indemnified party may be or become entitled to under any law, agreement, vote of stockholders or directors, provisions of Ingevity’s amended and restated certificate of incorporation or amended and restated bylaws or otherwise. Any amendment, alteration or repeal of our amended and restated bylaws’ indemnification provisions is, by the terms of Ingevity’s amended and restated bylaws, prospective only and will not adversely affect the rights of any indemnity in effect at the time of any act or omission occurring prior to such amendment, alteration or repeal.

Exclusive Forum

Ingevity’s amended and restated bylaws will provide that unless Ingevity consents in writing to the selection of an alternative forum, the state courts located within the State of Delaware will be the sole and exclusive forum for any derivative action or proceeding brought on behalf of Ingevity, any action asserting a claim of breach of a fiduciary duty owed by any director or officer or other employee of Ingevity to Ingevity or Ingevity’s stockholders, any action asserting a claim against Ingevity or any director or officer or other employee of Ingevity arising pursuant to any provision of the DGCL or Ingevity’s amended and restated certificate of incorporation or amended and restated bylaws (as either may be amended from time to time), or any action asserting a claim against Ingevity or any director or officer or other employee of Ingevity governed by the internal affairs doctrine. However, if no state court within the State of Delaware has jurisdiction, the action may be brought in the federal district court for the District of Delaware.

Transfer Agent and Registrar

The registrar and transfer agent for our common stock is Wells Fargo Shareowner Services.

123

WHERE YOU CAN FIND MORE INFORMATION

We have filed a registration statement on Form 10 with the SEC with respect to the shares of our common stock that WestRock stockholders will receive in the distribution. This information statement is a part of that registration statement and, as allowed by SEC rules, does not include all of the information you can find in the registration statement or the exhibits to the registration statement. For additional information relating to Ingevity and the distribution, reference is made to the registration statement and the exhibits to the registration statement. Statements contained in this information statement as to the contents of any contract or document referred to are not necessarily complete and in each instance, if the contract or document is filed as an exhibit to the registration statement, we refer you to the copy of the contract or other document filed as an exhibit to the registration statement. Each such statement is qualified in all respects by reference to the applicable document.

Following the distribution, we will file annual, quarterly and special reports, proxy statements and other information with the SEC. We intend to furnish our stockholders with annual reports containing consolidated financial statements audited by an independent registered public accounting firm. The registration statement is, and any of these future filings with the SEC will be, available to the public over the Internet on the SEC’s website at www.sec.gov. You may read and copy any filed document at the SEC’s public reference rooms in Washington, D.C. at 100 F Street, N.E., Washington, D.C. 20549, at the SEC’s regional offices in New York at 233 Broadway, New York, New York 10279, and in Chicago at Citicorp Center, 500 W. Madison Street, Suite 1400, Chicago, Illinois 60661. Please call the SEC at 1-800-SEC-0330 for further information about the public reference rooms.

Ingevity maintains an Internet site at www.ingevity.com. Ingevity’s website and the information contained therein or connected thereto shall not be deemed to be incorporated herein, and you should not rely on any such information in making an investment decision.

124

INGEVITY CORPORATION

INDEX TO FINANCIAL STATEMENTS

Ingevity Corporation	​
Report of Independent Registered Public Accounting Firm	F-2
Combined Statements of Operations for the Years Ended December 31, 2015, 2014 and 2013	F-3
Combined Statements of Comprehensive Income for the Years Ended December 31, 2015, 2014 and 2013	F-4
Combined Balance Sheets as of December 31, 2015 and 2014	F-5
Combined Statements of Change in Net Parent Investment for the Years Ended December 31, 2015, 2014 and 2013	F-6
Combined Statements of Cash Flows for the Years Ended December 31, 2015, 2014 and 2013	F-7
Notes to the Combined Financial Statements	F-8

F-1

Report of Independent Registered Public Accounting Firm

To Stockholders and Board of Directors of WestRock Company:

In our opinion, the accompanying combined balance sheets and the related combined statements of operations, comprehensive income, changes in net parent investment and cash flows present fairly, in all material respects, the financial position of the Ingevity Corporation at December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2015 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP
Richmond, Virginia

March 7, 2016, except for the subsequent event discussed in Note 17 to the combined financial statements, as to which the date is March 30, 2016.

F-2

INGEVITY CORPORATION

Combined Statements of Operations

​	Years ended December 31,
In millions	2015			2014			2013
Net sales	​	$	968	​	$	1,041	​	$	980
Cost of sales	​	​	687	​	​	718	​	​	685
Gross Profit	​	​	281	​	​	323	​	​	295
Selling, general and administrative expenses	​	​	114	​	​	112	​	​	103
Separation costs	​	​	17	​	​	—	​	​	—
Interest expense	​	​	21	​	​	16	​	​	13
Other (income) expense, net	​	​	(9)	​	​	(8)	​	​	(5)
Income before income taxes	​	​	138	​	​	203	​	​	184
Provision for income taxes	​	​	53	​	​	70	​	​	66
Net income	​	​	85	​	​	133	​	​	118
Less: Net income (loss) attributable to noncontrolling interests, net of taxes	​	​	5	​	​	4	​	​	(1)
Net income attributable to the company	​	$	80	​	$	129	​	$	119

The accompanying notes are an integral part of these combined financial statements.

F-3

INGEVITY CORPORATION

Combined Statements of Comprehensive Income

​	Years ended December 31,
In millions	2015			2014			2013
Net income	​	$	85	​	$	133	​	$	118
Other comprehensive income (loss), net of tax:	​			​			​
Foreign currency translation adjustment(1)	​	​	(10)	​	​	(6)	​	​	(6)
Derivative instruments:	​			​			​
Unrealized gain (loss), net	​	​	(1)	​	​	(1)	​	​	1
Reclassifications of deferred derivative instruments (gain) loss, included in net income(2)	​	​	1	​	​	—	​	​	—
Net unrealized gain (loss) on derivative instruments	​	​	—	​	​	(1)	​	​	1
Other comprehensive income (loss), net of tax	​	​	(10)	​	​	(7)	​	​	(5)
Comprehensive income	​	​	75	​	​	126	​	​	113
Less: Comprehensive income (loss) attributable to noncontrolling interests, net of taxes	​	​	5	​	​	4	​	​	(1)
Comprehensive income attributable to the company	​	$	70	​	$	122	​	$	114

(1)

Income taxes are not provided on the equity in undistributed earnings of our foreign subsidiaries or affiliates since it is our intention that such earnings will remain invested in those affiliates permanently.

(2)

Amounts reflected in “Cost of sales” on the Combined Statements of Operations.

The accompanying notes are an integral part of these combined financial statements.

F-4

INGEVITY CORPORATION

Combined Balance Sheets

​	Unaudited Pro Forma As of December 31, 2015			December 31,
In millions				2015			2014
Assets	​			​			​
Cash and cash equivalents	​	$	32	​	$	32	​	$	20
Accounts receivable, net	​	​	96	​	​	96	​	​	108
Inventories, net	​	​	151	​	​	151	​	​	130
Prepaid and other current assets	​	​	20	​	​	20	​	​	13
Current assets	​	​	299	​	​	299	​	​	271
Property, plant and equipment, net	​	​	438	​	​	438	​	​	410
Goodwill	​	​	12	​	​	12	​	​	13
Other intangibles, net	​	​	10	​	​	10	​	​	13
Other assets	​	​	23	​	​	23	​	​	11
Total assets	​	$	782	​	$	782	​	$	718
Liabilities and Equity	​			​			​
Accounts payable	​	$	65	​	$	65	​	$	105
Accrued expenses	​	​	13	​	​	13	​	​	13
Accrued payroll and employee benefits	​	​	10	​	​	10	​	​	18
Notes payable	​	​	9	​	​	9	​	​	3
Cash distribution to parent	​	​	398	​	​	—	​	​	—
Current liabilities	​	​	495	​	​	97	​	​	139
Capital lease obligations	​	​	80	​	​	80	​	​	86
Deferred income taxes	​	​	76	​	​	76	​	​	67
Other liabilities	​	​	7	​	​	7	​	​	6
Total liabilities	​	​	658	​	​	260	​	​	298
Commitments and contingencies (Note 11)	​			​			​
Net parent investment:	​			​			​
Net parent investment	​	​	136	​	​	534	​	​	424
Accumulated other comprehensive loss	​	​	(17)	​	​	(17)	​	​	(7)
Total net parent investment before noncontrolling interests	​	​	119	​	​	517	​	​	417
Noncontrolling interests	​	​	5	​	​	5	​	​	3
Total net parent investment and noncontrolling interests	​	​	124	​	​	522	​	​	420
Total liabilities and net parent investment	​	$	782	​	$	782	​	$	718

The accompanying notes are an integral part of these combined financial statements.

F-5

INGEVITY CORPORATION

Combined Statements of Changes in Net Parent Investment

In millions

Net Parent Investment

Accumulated other comprehensive income (loss)

Noncontrolling interests

Total

Balance at December 31, 2012

​

$

277

​

$

5

​

$

12

​

$

294

Net income

​

​

119

​

​

—

​

​

(1)

​

​

118

Other comprehensive income, net of tax

​

​

—

​

​

(5)

​

​

—

​

​

(5)

Noncontrolling interest distributions

​

​

—

​

​

—

​

​

(8)

​

​

(8)

Purchase of noncontrolling interest

​

​

—

​

​

—

​

​

(1)

​

​

(1)

Transactions with parent

​

​

(70)

​

​

—

​

​

—

​

​

(70)

Balance at December 31, 2013

​

$

326

​

$

—

​

$

2

​

$

328

Net income

​

​

129

​

​

—

​

​

4

​

​

133

Other comprehensive income, net of tax

​

​

—

​

​

(7)

​

​

—

​

​

(7)

Noncontrolling interest distributions

​

​

—

​

​

—

​

​

(3)

​

​

(3)

Transactions with parent

​

​

(31)

​

​

—

​

​

—

​

​

(31)

Balance at December 31, 2014

​

$

424

​

$

(7)

​

$

3

​

$

420

Net income

​

​

80

​

​

—

​

​

5

​

​

85

Other comprehensive income, net of tax

​

​

—

​

​

(10)

​

​

—

​

​

(10)

Noncontrolling interest distributions

​

​

—

​

​

—

​

​

(3)

​

​

(3)

Transactions with parent

​

​

30

​

​

—

​

​

—

​

​

30

Balance at December 31, 2015

​

$

534

​

$

(17)

​

$

5

​

$

522

The accompanying notes are an integral part of these combined financial statements.

F-6

INGEVITY CORPORATION

Combined Statements of Cash Flows

​	Years ended December 31,
In millions	2015			2014			2013
Operating activities:	​			​			​
Net income	​	$	85	​	$	133	​	$	118
Adjustments to reconcile net income to cash provided by operating activities:	​			​			​
Depreciation and amortization	​	​	35	​	​	33	​	​	33
Deferred income taxes	​	​	10	​	​	2	​	​	2
Impairment/loss on sale of assets	​	​	4	​	​	1	​	​	11
Changes in operating assets and liabilities:	​			​			​
Accounts receivable, net	​	​	9	​	​	(9)	​	​	(11)
Inventories, net	​	​	(25)	​	​	(29)	​	​	(20)
Prepaid and other current assets	​	​	(7)	​	​	—	​	​	2
Accounts payable	​	​	(22)	​	​	10	​	​	14
Accrued expenses	​	​	—	​	​	6	​	​	(4)
Accrued payroll and employee benefit costs	​	​	(8)	​	​	5	​	​	2
Changes in other operating assets and liabilities, net	​	​	(8)	​	​	(9)	​	​	(10)
Net cash provided by operating activities	​	​	73	​	​	143	​	​	137
Investing activities:	​			​			​
Capital expenditures	​	​	(102)	​	​	(101)	​	​	(63)
Proceeds from sale of subsidiary	​	​	11	​	​	—	​	​	—
Other investing activities, net	​	​	1	​	​	(1)	​	​	(1)
Net cash used in investing activities	​	​	(90)	​	​	(102)	​	​	(64)
Financing activities:	​			​			​
Termination of capital lease obligations	​	​	(6)	​	​	—	​	​	—
Changes in notes payable and other short-term borrowings, net	​	​	6	​	​	3	​	​	—
Purchase of noncontrolling interests	​	​	—	​	​	—	​	​	(1)
Noncontrolling interest distributions	​	​	(3)	​	​	(3)	​	​	(8)
Transactions with Parent, net	​	​	30	​	​	(31)	​	​	(70)
Net cash provided (used) in financing activities	​	​	27	​	​	(31)	​	​	(79)
Increase (decrease) in cash and cash equivalents	​	​	10	​	​	10	​	​	(6)
Effect of exchange rate changes on cash	​	​	2	​	​	(2)	​	​	2
Cash and cash equivalents	​			​			​
At beginning of period	​	​	20	​	​	12	​	​	16
At end of period	​	$	32	​	$	20	​	$	12
Supplemental cash flow information:	​			​			​
Cash paid for interest	​	$	7	​	$	7	​	$	7
Purchases of property, plant and equipment in accounts payable	​	$	2	​	$	16	​	$	—

The accompanying notes are an integral part of these combined financial statements.

F-7

Notes to the Combined Financial Statements

Note 1:   Basis of combination and presentation

On January 8, 2015 MeadWestvaco Corporation (“MWV”) announced that its board of directors approved a plan to fully separate its Specialty Chemicals business from the rest of the company. The separation is expected to be executed by means of a tax-free spinoff of the Specialty Chemicals business to MWV stockholders. The spinoff is expected to be completed around mid-2016.

On July 1, 2015, Rock-Tenn Company (“Rock-Tenn”) and MWV completed a strategic combination of their respective businesses, forming WestRock Company (“WestRock”). The business currently conducted by WestRock is the combined businesses conducted by Rock-Tenn and MWV prior to the combination. The merger consideration was $8,287 million. In connection with the merger, Rock-Tenn stockholders received in the aggregate approximately 130.4 million shares of WestRock Common Stock and approximately $668 million in cash. At the effective time of the merger, each share of common stock of MWV issued and outstanding immediately prior to the merger was converted into the right to receive 0.78 shares of WestRock Common Stock. In the aggregate, MWV stockholders received approximately 131.2 million shares of WestRock Common Stock. Included in the merger consideration is approximately $211 million related to outstanding MWV equity awards that were replaced with WestRock equity awards with identical terms.

Basis of Presentation

These combined financial statements include all majority-owned or controlled entities of WestRock related to its Specialty Chemicals business, Ingevity (the “company”), and all significant inter-company transactions are eliminated. The company does not operate as a separate, stand-alone entity and is comprised of certain WestRock wholly owned legal entities for which the company is the sole business and components of legal entities in which the company operates in conjunction with other WestRock businesses.

For purposes of these combined financial statements, the term “WestRock” herein refers to the legacy operations of MWV, and its subsidiaries, prior to the merger with Rock-Tenn and the combined operations of Rock-Tenn and MWV subsequent to the merger. References to the company’s historical business and operations refer to the business and operations of the Specialty Chemicals business of WestRock, or prior to the merger of MWV and Rock-Tenn, MWV, that have been or will be transferred to Ingevity. The Company has elected not to apply pushdown accounting related to the merger of MWV and Rock-Tenn in these combined financial statements. As a result, the impact of the merger of MWV and Rock-Tenn and the associated accounting are not included within these combined financial statements.

The company is a manufacturer, marketer and distributor of specialty chemicals derived from sawdust and co-products of the papermaking process in North America, Europe, South America and Asia. The company’s products include performance chemicals derived from pine chemicals used in publication inks, asphalt paving and adhesives as well as in the agricultural, paper and petroleum industries. The company also produces activated carbon products used in gasoline vapor emission control systems for cars, trucks, motorcycles and boats, as well as applications for water, food, beverage and chemical purification. The company’s segments are (i) Performance Chemicals and (ii) Performance Materials.

Unaudited Pro Forma Balance Sheet

At or prior to the spinoff, the company intends to distribute an estimated $398 million to WestRock. The accompanying unaudited pro forma balance sheet as of December 31, 2015 gives effect to the $398 million expected cash distribution.

Reclassifications

Certain prior year amounts have been reclassified to conform to the current year presentation.

Note 2:   Summary of significant accounting policies

Related-party transactions:   These combined financial statements include allocated expenses associated with centralized WestRock support functions including legal, accounting, tax, treasury, internal

F-8

audit, information technology, human resources and other services. The costs associated with these functions generally include all payroll and benefit costs as well as related overhead costs. These combined financial statements also include allocated costs associated with WestRock’s office facilities, corporate insurance coverage and medical, pension, post-retirement and other health plan costs attributed to the company’s employees participating in WestRock’s sponsored plans. Allocations are generally based on a number of utilization measures including employee count and proportionate effort. In situations in which determinations based on utilization are impracticable, WestRock and the company use other methods and criteria such as net sales which are believed to result in reasonable estimates of costs attributable to the company. Such allocated expenses are components of net income in the Combined Statement of Operations and are therefore included as a component of net cash provided by (or used in) operating activities in the Combined Statement of Cash Flows. All such amounts have been assumed to have been immediately settled by the company to WestRock in the period in which the costs were recorded in the combined financial statements.

The company and WestRock management believe the related-party allocations included in these combined financial statements have been made on a reasonable basis. However, these combined financial statements may not necessarily be indicative of the results of operations that would have been obtained if the company had operated as a separate entity during the periods presented. Actual costs that may have been incurred if the company had been a stand-alone business would depend on a number of factors, including organizational structure and what functions were outsourced or performed by employees, as well as strategic decisions made in areas such as information technology and infrastructure. Consequently, the company’s future earnings if operated as an independent business could include items of income and expense that are materially different from what is included in the Combined Statements of Operations. Accordingly, the combined financial statements for the periods presented are not necessarily indicative of the company’s future results of operations, financial position and cash flows.

Net parent investment:   The company’s net parent investment on the Combined Balance Sheets, which includes retained earnings, represents WestRock’s interest in the recorded net assets of the company and is presented as “Equity” in lieu of stockholders’ equity. All significant transactions between the company and WestRock have been included in the accompanying combined financial statements. Transactions with WestRock are reflected in the accompanying Combined Statements of Changes in Equity as “Transactions with WestRock” and in the accompanying Combined Balance Sheets within “Equity.” The transactions with WestRock have been considered cash receipts and payments for the purposes of the Combined Statements of Cash Flows and are reflected in financing activities in the accompanying Combined Statements of Cash Flows.

The net parent investment is affected by the company’s operating results, expense allocations from WestRock and cash transfers between the company and WestRock, including settlement of intercompany transactions and amounts paid or received related to interest and domestic income taxes, as WestRock manages all treasury and domestic tax activities of the company. Central treasury activities include the investment of surplus cash and foreign currency risk management. All WestRock funding to the company since inception has been accounted for as capital contributions from WestRock and all cash remittances from the company to WestRock have been accounted for as distributions to WestRock.

In addition, interest expense associated with WestRock’s debt has been allocated to the company based upon average net assets of the company as a percentage of average net assets plus average consolidated debt not attributable to other operations of WestRock. The company believes this method of allocating interest expense produces reasonable results because average net assets is a significant factor in determining the amount of WestRock borrowings. Interest expense allocated to the company’s Combined Statements of Operations was $13 million, $10 million and $6 million for the years ended December 31, 2015, 2014 and 2013, respectively. No WestRock corporate-level debt has been allocated to the company’s Combined Balance Sheets.

Earnings per share data has not been presented in the accompanying Combined Financial Statements because the company does not operate as a separate legal entity with its own capital structure.

F-9

Estimates and assumptions:   The preparation of these combined financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of certain assets and liabilities and, in some instances, the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates.

Translation of foreign currencies:   The local currency is the functional currency for all of the company’s significant operations outside the United States (“U.S.”). The assets and liabilities of the company’s foreign subsidiaries are translated into U.S. dollars using period-end exchange rates, and adjustments resulting from these financial statement translations are included in accumulated other comprehensive income in the Combined Balance Sheets. Revenues and expenses are translated at average rates prevailing during each period.

Cash equivalents:   Highly liquid securities with an original maturity of three months or less are considered to be cash equivalents. As of December 31, 2015 and 2014, the company’s cash equivalents were primarily invested in U.S. government securities.

Accounts receivable and allowance for doubtful accounts:   Accounts receivable, net on the Combined Balance Sheets are comprised of trade receivable less allowances for doubtful accounts. Trade receivable consist of amounts owed to the company from customer sales and are recorded at the invoiced amounts when revenue is recognized and generally do not bear interest. The allowance for doubtful accounts is the company’s best estimate of the amount of probable loss in the existing accounts receivable. The company determines the allowance based on historical write-off experience, current collection trends, and external business factors such as economic factors, including regional bankruptcy rates, and political factors. Past due balances over a specified amount are reviewed individually for collectability. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. Allowance for doubtful accounts at December 31, 2015 and 2014, respectively were $0.1 million and $0.5 million.

Concentration of credit risk:   The financial instruments that potentially subject the company to concentrations of credit risk are accounts receivable. The company limits its credit risk by performing ongoing credit evaluations and, when necessary, requiring letters of credit, guarantees or collateral. The company had accounts receivable from its largest customer of  $24 million and $20 million as of December 31, 2015 and 2014, respectively. Sales to this customer, which are included in the Performance Chemicals segment, were 11 percent, 11 percent and 10 percent of total net sales for the years ended December 31, 2015, 2014 and 2013, respectively. No other customers individually accounted for greater than 10 percent of the company’s combined net sales.

Inventories, net:   Inventories are valued at the lower of cost or market. Cost is determined using the last-in, first-out method (“LIFO”) for substantially all raw materials, finished goods and production materials of U.S. manufacturing operations. Cost of all other inventories, including stores and supplies inventories and inventories of non-U.S. manufacturing operations, is determined by the first-in, first-out or average cost methods.

Property, plant and equipment:   Owned assets are recorded at cost. Also included in the cost of these assets is interest on funds borrowed during the construction period. When assets are sold, retired or disposed of, their cost and related accumulated depreciation are removed from the combined balance sheet and any resulting gain or loss is reflected in cost of sales. Repair and maintenance costs that materially add to the value of the asset or prolong its useful life are capitalized and depreciated based on the extension of the useful life; general costs of maintenance and repairs are charged to expense.

Depreciation:   The cost of plant and equipment is depreciated, utilizing the straight-line method, over the estimated useful lives of the assets, the majority of which range from 20 to 40 years for buildings and leasehold improvements and 5 to 30 years for machinery and equipment. The following table provides the detail behind the useful lives and proportion of our machinery and equipment (“M&E”) in each useful life category.

F-10

Percent of M&E Cost	Depreciable Life in Years	Types of Assets
68%	20	Production vessels and kilns, storage tanks, piping
10%	15	Control systems, instrumentation, metering equipment
9%	25 to 30	Blending equipment, storage tanks, piping, shipping equipment and platforms, safety equipment
7%	5 to 10	Production control system equipment and hardware, laboratory testing equipment
6%	40	Machinery & equipment support structures and foundations

Impairment of long-lived assets:   The company periodically evaluates whether current events or circumstances indicate that the carrying value of its long-lived assets, including intangible assets, to be held and used may not be recoverable. If such circumstances are determined to exist, an estimate of undiscounted future cash flows produced by the long-lived asset, or the appropriate grouping of assets, is compared to carrying value to determine whether impairment exists.

If an asset is determined to be impaired, the loss is measured based on quoted market prices in active markets, if available. If quoted market prices are not available, the estimate of fair value is based on various valuation techniques, including a discounted value of estimated future cash flows. The company reports an asset to be disposed of at the lower of its carrying value or its estimated net realizable value.

Goodwill and other intangible assets:   Goodwill represents the excess of cost of an acquired business over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination. The company reviews the recorded value of goodwill at least annually at October 1, or sooner if events or changes in circumstances indicate that the fair value of a reporting unit is below its carrying value. If goodwill is required to be tested for impairment, a two-step process is utilized. The first step is to identify a potential impairment and the second step is to measure the amount of the impairment loss, if any. The second step is not necessary unless an impairment indicator is identified in step one. Goodwill is deemed to be impaired after step two if the carrying amount of a reporting unit’s goodwill exceeds its estimated fair value.

The fair value of each reporting unit is estimated primarily using an income approach, specifically the discounted cash flow method. The following assumptions are key to the company’s income approach: 1). business projections; 2). growth rates; 3). discount rates; 4). tax rates.

Other intangible assets are comprised of finite-lived intangible assets consisting primarily of brand, representing trademarks, trade names and know-how, customer contracts and relationships. Other intangible assets are amortized over their estimated useful lives which range from 5 to 20 years. See Note 7 for further information.

Capitalized software:   Capitalized software for internal use is included in other assets on the Combined Balance Sheets. Capitalized software is amortized using the straight-line over the estimated useful lives ranging from 1 to 7 years. The company records software development costs in accordance with the accounting guidance provided by the Financial Accounting Standards Board.

Environmental and legal liabilities:   Environmental expenditures that increase useful lives of assets are capitalized, while other environmental expenditures are expensed. Liabilities are recorded when remedial efforts are probable and the costs can be reasonably estimated. The company recognizes a liability for other legal contingencies when a loss is probable and reasonably estimable. Liabilities recorded for claims are limited to pending cases based on the company’s historical experience, consultation with outside counsel and consultation with an actuarial specialist concerning the feasibility of reasonably estimating liabilities associated with claims that may arise in the future. The company recognizes insurance recoveries when collection is reasonably assured. Third-party fees for legal services are expensed as incurred.

Revenue recognition:   The company recognizes revenues at the point when title and the risk of ownership passes to the customer. Substantially all of the company’s revenues are generated through product sales and shipping terms generally indicate when title and the risk of ownership have passed. Revenue is recognized at shipment for sales where shipping terms are FOB (freight on board) shipping point

F-11

unless risk of loss is maintained under freight terms. For sales where shipping terms are FOB destination, revenue is recognized when the goods are received by the customer. The company provides allowances for estimated returns and other customer credits such as discounts and volume rebates, when the revenue is recognized, based on historical experience, current trends and any notification of pending returns.

Shipping and handling costs:   Shipping and handling costs are classified as a component of cost of sales. Amounts billed to a customer in a sales transaction related to shipping and handling are classified as revenue.

Research and development:   Included in selling, general and administrative expenses are expenditures for research and development of  $7 million, $8 million and $11 million for the years ended December 31, 2015, 2014 and 2013, respectively, which were expensed as incurred.

Income taxes:   As a division of WestRock, the company is not an income tax payer in the United States as its domestic results and related tax obligations, if any, are included in the tax returns of WestRock. The income tax provision included in these combined financial statements related to domestic income was calculated on a separate return basis, as if the company was a separate taxpayer and the resulting current tax receivable or liability, including any liabilities related to uncertain tax positions, was settled with WestRock through equity.

In tax jurisdictions located in Brazil and China, the operations of the company are conducted by discrete legal entities, each of which files separate tax returns. All resulting current income tax assets and liabilities are reflected in the combined balance sheets of the company.

Deferred income taxes are recorded for temporary differences between financial statement carrying amounts and the tax basis of assets and liabilities for each segment. Deferred tax assets and liabilities reflect the enacted tax rates in effect for the years the differences are expected to reverse. The company evaluates the need for a deferred tax asset valuation allowance by assessing whether it is more likely than not that it will realize its deferred tax assets in the future.

Pension and postretirement benefits:   The employees of the company are participants in various defined benefit pension and postretirement benefit plans (“the Plans”) sponsored by WestRock and the related assets and liabilities are combined with those related to other WestRock businesses. Significantly all expense was allocated in shared entities and reported within costs of sales and selling, general and administrative expenses in the Combined Statements of Operation. The company has considered the Plans to be part of a multi-employer plan with the other businesses of WestRock. The expense related to the current employees of the company as well as the expense related to retirees of the company are included in the Combined Financial Statements (see Note 11 for further information).

Share-based compensation:   The company records compensation expense from equity awards granted by WestRock for graded and cliff vesting awards on a straight-line basis over the vesting period, which is generally three years. Substantially all compensation expense related to share-based awards is recorded as a component of selling, general and administrative expenses in the Combined Statements of Operations (see Note 10 for further information).

Operating segments:   The company’s operating segments are Performance Chemicals and Performance Materials. The company’s operating segments were determined based upon the nature of the products produced, the nature of the production process, the type of customer for the products, the similarity of economic characteristics, and the manner in which management reviews results. The company’s chief operating decision maker evaluates the business at the segment level when making decisions about allocating resources and assessing performance of the company as a whole. The company evaluates sales in a format consistent with its reportable segments: (1) Performance Chemicals, which includes specialty pine-based chemical co-products derived from the kraft pulping process and (2) Performance Materials, which includes wood-based, chemically activated carbon products. Each segment operates as a portfolio of various end uses for the relevant raw material used in that segment. Business decisions are made and performance is generally measured based upon the total mix of end uses each raw material is being directed at in the segment. As a result of the breadth and diversity of these products, it is impracticable to provide revenue information by product line. For more information on the company’s operating segments see Note 15.

F-12

Note 3:   New accounting guidance

On February 25, 2016, the Financial Accounting Standards Board (FASB) issued its new lease accounting guidance in Accounting Standards Update (ASU) 2016-02 “Leases.” Under the new guidance, lessees will be required to recognize for all leases (with the exception of short-term leases) a lease liability, which is a leessee’s obligation to make lease payments arising from a lease measured on a discounted basis and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The new standard is effective for the fiscal year beginning after December 15, 2018, including interim periods within those fiscal years. We are evaluating the effect the guidance will have on our consolidated financial statements.

In November 2015, the FASB issued ASU 2015-17 “Balance Sheet Classification of Deferred Taxes”. The amendment requires deferred tax assets and liabilities, along with related valuation allowances, to be classified as non-current on the balance sheet. As a result, each tax jurisdiction will now only have one net non-current deferred tax asset or liability. The new guidance does not change the existing requirement that prohibits offsetting deferred tax liabilities from one jurisdiction against deferred tax assets of another jurisdiction. This standard is applicable for fiscal years beginning after December 15, 2016 and for interim periods within those years and early adoption is permitted. We early adopted ASU 2015-17 effective December 31, 2015 on a prospective basis. Adoption of this ASU resulted in a reclassification of our net current deferred tax asset to the net non-current deferred tax asset in our Consolidated Balance Sheet as of December 31, 2015. No prior periods were retrospectively adjusted. For more information on deferred taxes, see Note 14.

In April 2015, the FASB issued ASU 2015-03 “Interest — Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs.” The amendments in this new standard require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this standard. This standard is applicable for fiscal years beginning after December 15, 2015 and for interim periods within those years and early adoption is permitted. We have adopted this standard in the first quarter of 2016. This amendment will be applied on a retrospective basis. however, we do not currently have any debt issuance costs.

In February 2015, the FASB issued ASU 2015-02 “Consolidation — Amendments to the Consolidation Analysis,” which amends certain provisions of ASC 810 “Consolidation.” The amendment requires the consideration of additional criteria in (i) the analysis and determination of whether limited partnerships and similar legal entities are variable interest entities or voting interest entities and (ii) primary beneficiary determinations. The ASU also eliminates certain fees from the consolidation analysis of reporting entities that are involved with variable interest entities. The ASU is effective for annual periods, and for interim periods within those annual periods, beginning after December 15, 2015. The company adopted these provisions on January 1, 2016. The impact of adoption did not have a material effect on the company’s combined financial statements.

In May 2014, the FASB issued ASU 2014-09 which is codified in ASC 606 “Revenue from Contracts with Customers” and supersedes both the revenue recognition requirement to ASC 605 “Revenue Recognition” and most industry-specific guidance. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the five steps set forth in ASC 606. An entity must also disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers, including qualitative and quantitative information about contracts with customers, significant judgments and changes in judgments, and assets recognized from the costs to obtain or fulfill a contract. The ASU was scheduled to be effective for annual reporting periods, and for interim reporting periods within those annual reporting periods, beginning after December 15, 2016. However, in July 2015, the FASB voted to amend ASU 2014-09 by approving a one (1)-year deferral of the effective date. As a result, the company expects to adopt these provisions on January 1, 2018, including interim periods subsequent to the adoption date, which can be applied using a full retrospective or modified retrospective approach. The company is currently evaluating the impact of these provisions.

F-13

There were no other accounting standards issued that had or are expected to have a material impact on the company’s financial position or results of operations.

Note 4:   Fair value measurements

The following information is presented for assets and liabilities that are recorded in the Combined Balance Sheets at fair value at December 31, 2015 and 2014, measured on a recurring basis. There were no significant transfers of assets and liabilities that are recorded at fair value between Level 1 and Level 2 during 2015 and 2014.

In millions

Level 1(1)

Level 2(2)

Level 3(3)

Total

December 31, 2015

​

​

​

​

Recurring fair value measurements:

​

​

​

​

Cash equivalents

​

$

10

​

$

—

​

$

—

​

$

10

December 31, 2014

​

​

​

​

Recurring fair value measurements:

​

​

​

​

Natural gas hedge liability(a)

​

$

—

​

$

(2)

​

$

—

​

$

(2)

Cash equivalents

​

​

6

​

​

—

​

​

—

​

​

6

(1)

Quoted prices in active markets for identical assets.

(2)

Quoted prices for similar assets and liabilities in active markets.

(3)

Significant unobservable inputs.

(a)

Natural gas hedge instruments are valued using models with market inputs such as NYMEX natural gas futures contract pricing.

At December 31, 2015, the book value of capital lease obligations was $80 million and the fair value was estimated to be $89 million. The fair value of the company’s capital lease obligations is based on the period-end quoted market prices for the obligations, using Level 1 inputs.

Note 5:   Inventories

Inventories are comprised of:

​	December 31,
In millions	2015			2014
Raw materials	​	$	41	​	$	36
Production materials, stores and supplies	​	​	11	​	​	10
Finished and in process goods	​	​	119	​	​	112
Inventories valued at current costs	​	​	171	​	​	158
Less: Excess of cost over LIFO cost	​	​	(20)	​	​	(28)
Inventories, net	​	$	151	​	$	130

Approximately 76 percent and 78 percent of inventories at December 31, 2015 and 2014, respectively, are valued using the LIFO method. There was no impact on pre-tax income for LIFO layer decrements for the years ended December 31, 2015, 2014 and 2013, respectively.

F-14

Note 6:   Property, plant and equipment, net

Property, plant and equipment consist of the following:

​	December 31,
In millions	2015			2014
Machinery and equipment	​	$	658	​	$	637
Buildings and leasehold equipment	​	​	64	​	​	67
Land and land improvements	​	​	18	​	​	24
Construction in progress	​	​	143	​	​	122
Total cost	​	​	883	​	​	850
Less: accumulated depreciation	​	​	(445)	​	​	(440)
Property, plant and equipment, net(1)	​	$	438	​	$	410

(1)

Includes capital leases related to the company’s Wickliffe, Kentucky manufacturing facility of (a) machinery and equipment of  $13 million and $16 million, net of accumulated depreciation of  $71 million and $68 million, and (b) buildings of  $3 million and $3 million, net of accumulated depreciation of  $3 million and $3 million at December 31, 2015 and 2014, respectively. Also includes capital leases related to the company’s DeRidder, Louisiana manufacturing facility of machinery and equipment of  $19 million and $21 million, net of accumulated depreciation of  $14 million and $12 million at December 31, 2015 and 2014, respectively. Amortization expense associated with these capital leases are included within depreciation expense. The payments remaining under these capital leases obligations are included within Note 9.

Depreciation expense was $28 million, $27 million and $26 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Note 7:   Goodwill and other intangible assets

The company defines its reporting units as its operating segments, and has assigned its goodwill balance to these reporting units based primarily on specific identification of goodwill acquired by reporting unit. In 2015 and 2014, the company performed impairment tests for goodwill and determined that no goodwill impairment existed and the fair value of each reporting unit substantially exceeded its carrying value.

The changes in the carrying amount of goodwill by operating segment for the years ended December 31, 2015 and 2014 are as follows:

​	Operating Segments						​	​	​
In millions	Performance Chemicals			Performance Materials			Total
Balance, December 31, 2013	​	$	9	​	$	4	​	$	13
Foreign currency translation	​	​	—	​	​	—	​	​	—
Balance, December 31, 2014	​	$	9	​	$	4	​	$	13
Foreign currency translation	​	​	(1)	​	​	—	​	​	(1)
Balance, December 31, 2015	​	$	8	​	$	4	​	$	12

F-15

All of the company’s other intangible assets are related to the Performance Chemicals operating segment. The following table summarizes intangible assets:

​	December 31, 2015									December 31, 2014
In millions	Gross carrying amount			Accumulated amortization			Net			Gross carrying amount			Accumulated amortization			Net
Brands(1)	​	$	14	​	$	11	​	$	3	​	$	14	​	$	10	​	$	4
Customer contracts and relationships	​	​	28	​	​	21	​	​	7	​	​	28	​	​	19	​	​	9
Other	​	​	1	​	​	1	​	​	—	​	​	1	​	​	1	​	​	—
​	​	$	43	​	$	33	​	$	10	​	$	43	​	$	30	​	$	13

(1)

Represents trademarks, trade names and know-how.

The company recorded intangible amortization expense of  $3 million for the years ended December 31, 2015, 2014 and 2013, respectively. Based on the current carrying values of intangible assets, estimated amortization expense for the next five years is as follows: 2016 — $3 million, 2017 — $2 million, 2018 — $2 million, 2019 — $2 million and 2020 — $1 million.

Note 8:   Allocated costs and related-party transactions

As described in the Note 2, the Combined Statements of Operations include allocations from WestRock as summarized below:

​	December 31,
In millions	2015			2014			2013
Cost of sales	​	$	10	​	$	10	​	$	11
Selling, general and administrative expenses	​	​	17	​	​	18	​	​	17
Interest expense	​	​	13	​	​	10	​	​	6
Total allocated cost(1)	​	$	40	​	$	38	​	$	34

(1)

Allocated costs represent costs necessary to support the company’s operations which include governance and corporate functions such as information technology, accounting, human resources, accounts payable and other direct services including the interest on WestRock debt incurred to provide such services.

The company and WestRock management believe the related-party allocations included in these combined financial statements have been made on a reasonable basis. However, these combined financial statements may not necessarily be indicative of the results of operations that would have been obtained if the company had operated as a separate entity during the periods presented. Actual costs that may have been incurred if the company had been a stand-alone business would depend on a number of factors, including organizational structure and what functions were outsourced or performed by employees, as well as strategic decisions made in areas such as information technology and infrastructure. Management of the Company has determined it is not practicable to determine these stand-alone costs for the periods presented. Consequently, the company’s future earnings if operated as an independent business could include items of income and expense that are materially different from what is included in these combined statements of income. Accordingly, the Combined Financial Statements for the periods presented are not necessarily indicative of the company’s future results of operations, financial position and cash flows.

The company purchases certain raw materials from WestRock that are included in cost of sales. Total purchases for the years ended December 31, 2015, 2014 and 2013 were $35 million, $22 million and $21 million, respectively.

F-16

Note 9:   Commitments and contingencies

Lease commitments

The company leases a variety of assets for use in its operations. Leases for administrative offices, manufacturing plants and storage facilities generally contain options, which allow the company to extend lease terms for periods up to 25 years or to purchase the properties. Certain leases provide for escalation of the lease payments as maintenance costs and taxes increase.

Minimum rental payments pursuant to agreements as of December 31, 2015 under operating leases that have non-cancelable lease terms in excess of 12 months and under capital leases are as follows:

In millions	Operating leases			Capital leases
2016	​	$	10	​	$	6
2017	​	​	8	​	​	6
2018	​	​	6	​	​	6
2019	​	​	4	​	​	6
2020	​	​	3	​	​	6
Later years	​	​	2	​	​	120
Minimum lease payments	​	$	33	​	​	150
Less: amount representing interest	​	​	​	​	​	(70)
Capital lease obligations	​	​	​	​	$	80

Rental expense pursuant to operating leases was $16 million, $16 million and $14 million for the years ended December 31, 2015, 2014 and 2013, respectively.

Capital leases

The capital lease obligations consist of  $80 million and $86 million at December 31, 2015 and 2014, respectively owed to the city of Wickliffe, KY, associated with the company’s Performance Materials site. During the fourth quarter of 2015 we repaid $6 million in capital lease obligation which were prepayable at the company’s option. The $80 million principal payment on the remaining capital lease obligation is due at maturity in 2027. The interest rate on the $80 million capital lease obligation is 7.67%. Interest payments are payable semi-annually.

We have a $28 million capital lease obligation due in 2017, for certain assets located at the company’s Performance Chemicals, DeRidder, Louisiana site. The lease is with the Industrial Development Board of the City of DeRidder Louisiana (“City”). The City financed the acquisition of these assets by issuing a series of industrial development revenue bonds. The bonds were purchased by the company and the obligations under the capital lease remain with the company. Accordingly, we offset the capital lease obligation and bonds on our Combined Balance Sheets. The leased assets are presented within property, plant and equipment on the Combined Balance Sheets, see Note 6 for more information.

Legal Proceedings

We are, from time to time, involved in routine litigation incidental to our operations. None of the litigation in which we are currently involved, individually or in the aggregate, is material to our combined financial condition, liquidity or results of operations nor are we aware of any material pending or contemplated proceedings.

Note 10:   Share-based compensation

Total pre-tax share-based compensation expense included in the company’s combined statements of operations was $2 million for the year ended December 31, 2015 and $1 million for the years ended December 31, 2014 and 2013, respectively.

F-17

Certain employees of the company participate in WestRock’s 2005 Performance Incentive Plan, as amended and restated (the “Plan”). There were an aggregate of 33 million shares reserved under the Plan for the granting of stock options, stock appreciation rights (“SARs”), restricted stock and restricted stock units. At December 31, 2015, there were approximately 6 million shares available for grant under this plan.

The vesting of awards granted may be conditioned upon either a specified period of time or the attainment of specific performance goals as determined by the plan.

In March 2014, MWV paid a special dividend of  $1.00 per share and pursuant to existing anti-dilution provisions in MWV’s equity plans, the number of outstanding stock options and SARs as well as the exercise prices were modified. The objective of the modification was to maintain the fair value of these equity awards subsequent to the special dividend. There was no incremental compensation expense recorded as a result of these modifications.

Stock options and stock appreciation rights

Stock options and SARs become exercisable in one-third increments on each anniversary of the award date and are fully exercisable after the third anniversary and expire no later than 10 years from the date of grant. The exercise price of all stock options equals the market price of the company’s stock on the date of grant.

The fair value of stock option and SAR awards is determined using a lattice-based option valuation model. Lattice-based option valuation models utilize ranges of assumptions over the expected term of the options and SARs. Expected volatilities are based on the historical and implied volatility of WestRock’s stock. The company and WestRock use historical data to estimate option and SAR exercises and employee terminations within the valuation model. The expected term of options and SARs granted is derived from the output of the valuation model and represents the period of time that options and SARs granted are expected to be outstanding. The risk-free rate for the period within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The company and WestRock measure compensation expense related to the SARs at the end of each period.

Changes in the fair value of options (in the event of an award modification) and SARs are reflected as an adjustment to compensation expense in the periods in which the changes occur.

A summary of the assumptions is as follows:

Lattice-based option valuation assumptions	2015		2014		2013
Weighted-average fair value of stock options granted during the period	​	29.4	​	9.8	​	8.7
Weighted-average fair value of SARs granted during the period	​	—	​	—	​	—
Expected dividend yield for stock options	​	2.40%	​	2.79%	​	2.91%
Expected dividend yield for SARs	​	0.00%	​	0.00%	​	0.00%
Expected volatility	​	23.50%	​	32.00%	​	32.00%
Average risk-free interest rate for stock options	​	1.30%	​	1.57%	​	0.94%
Average risk-free interest rate for SARs	​	0.00%	​	0.00%	​	0.00%
Average expected term for stock options and SARs (in years)	​	3.7	​	7.2	​	6.9

F-18

The following table summarizes stock option and SAR activity:

Shares in thousands

Options

Weighted average exercise price

SARs

Weighted average exercise price

Weighted average remaining contractual term

Aggregate intrinsic value (in millions)

Outstanding at December 31, 2012

​

309

​

$

22.57

​

7

​

$

28.76

​

​

$

3

Granted

​

26

​

​

34.34

​

—

​

​

—

​

​

​

​

Exercised

​

(133)

​

​

18.39

​

(3)

​

​

29.33

​

​

​

2

Canceled

​

(1)

​

​

27.39

​

—

​

​

—

​

​

​

​

Outstanding at December 31, 2013

​

201

​

​

26.85

​

4

​

​

28.40

​

​

​

2

Granted

​

18

​

​

35.89

​

—

​

​

—

​

​

​

​

Exercised

​

(70)

​

​

25.84

​

(1)

​

​

27.33

​

​

​

1

Canceled

​

(1)

​

​

27.95

​

—

​

​

—

​

​

​

​

Adjustment due to special dividend

​

5

​

​

n/a

​

—

​

​

n/a

​

​

​

​

Outstanding at December 31, 2014

​

153

​

​

27.55

​

3

​

​

32.43

​

​

​

3

Granted

​

14

​

​

54.76

​

—

​

​

—

​

​

​

​

Exercised

​

(47)

​

​

25.26

​

(2)

​

​

32.22

​

​

​

​

Cancelled

​

—

​

​

—

​

—

​

​

—

​

​

​

​

Outstanding at December 31, 2015

​

120

​

​

37.92

​

1

​

​

35.04

6.6 years

​

​

1

Exercisable at December 31, 2015

​

100

​

​

35.81

​

1

​

​

35.04

6.4 years

​

​

1

Exercisable at December 31, 2014

​

80

​

​

24.45

​

2

​

​

31.55

6.5 years

​

​

2

At December 31, 2015, unrecognized pre-tax compensation cost related to nonvested stock options and SARs was not significant. Pre-tax compensation expense for stock options and SARs and the tax benefit associated with this expense for the years ended December 31, 2015, 2014 and 2013 were not significant.

F-19

Restricted stock units

A restricted stock unit is the right to receive a share of WestRock stock. Employee restricted stock units vest over a three to five-year period. Awards granted in 2015, 2014 and 2013 consisted of both service-based restricted stock units and performance-based restricted stock units. Under the employee plans, the grantee of the restricted stock units is entitled to receive dividends, but will forfeit the accrued stock and accrued dividends if the individual holder separates from WestRock during the vesting period or if predetermined goals are not accomplished. The fair value of each restricted stock unit is the closing market price of the WestRock’s stock on the date of grant, and the compensation expense is charged to operations over the vesting period.

The following table summarizes restricted stock unit activity:

Shares in thousands	Shares		Average grant date fair market value
Outstanding at December 31, 2012	​	59	​	$	25.18
Granted	​	34	​	​	34.34
Forfeited	​	(1)	​	​	29.43
Released	​	(12)	​	​	21.43
Net adjustment for performance-based units	​	(29)	​	​	26.97
Outstanding at December 31, 2013	​	51	​	​	31.07
Granted	​	36	​	​	35.89
Forfeited	​	(1)	​	​	34.24
Released	​	(10)	​	​	27.90
Net adjustment for performance-based units	​	8	​	​	28.65
Outstanding at December 31, 2014	​	84	​	​	33.21
Granted	​	33	​	​	61.58
Forfeited	​	—	​	​	—
Released	​	(21)	​	​	50.96
Outstanding at December 31, 2015	​	96	​	$	61.62

At December 31, 2015, there was approximately $1 million of unrecognized pre-tax compensation cost related to non-vested restricted stock units, which is expected to be recognized over a weighted-average period of one year. Pre-tax compensation expense for restricted stock units was $1 million for the years ended December 31, 2015 and December 31, 2014 and was not significant for the year ended December 31, 2013. The tax benefit associated with this expense for the years ended December 31, 2015, 2014 and 2013 was not significant.

Note 11:   Pension and post-retirement benefits

WestRock offers various long-term benefits to its employees. Where permitted by applicable law, WestRock reserves the right to change, modify or discontinue the Plans.

WestRock offers plans that are shared amongst its businesses, including the company. In these cases, the participation of employees in these plans is reflected in the combined financial statements as though the company participates in a multi-employer plan with the other businesses of WestRock. Assets and liabilities of such plans are retained by WestRock. Further information on the WestRock plan is discussed in WestRock’s Annual Report on Form 10-K for the year ended September 30, 2015.

Pension costs recorded by the company for the years ended December 31, 2015, 2014 and 2013 were $8 million, $5 million and $5 million, respectively.

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Note 12:   Business separation

In connection with the separation and distribution of the company from WestRock as further described in Note 1, the company has incurred $17 million of pre-tax separation costs during the year ended December 31, 2015. These costs were primarily related to professional fees associated with separation activities within the finance, tax and legal functions. No such charges were incurred during the years ended December 31, 2014 and 2013, respectively.

Note 13:   Other (income) expense, net

Components of other (income) expense, net are as follows:

​	Years ended December 31,
In millions	2015			2014			2013
Foreign currency exchange losses (income)	​	$	1	​	$	1	​	$	—
Royalty and sundry income(1)	​	​	(2)	​	​	(4)	​	​	(2)
Restructuring and other (income) charges, net(2)	​	​	(8)	​	​	(5)	​	​	(3)
Other (income) expense, net	​	$	(9)	​	$	(8)	​	$	(5)

(1)

Primarily represents royalty income for technology licensing.

(2)

See below for more information regarding the company’s restructuring and other (income) charges, net.

Restructuring and other (income) charges, net

We continually perform strategic reviews and assess the return on the company’s operations which sometimes results in a plan to restructure the business. The cost and benefit of these strategic restructuring initiatives are recorded as restructuring and other (income) charge, net recorded within Other (income) expense, net on our Combined Statement of Operations. These costs are excluded from our operating segment results.

We record an accrual for severance and other non-recurring costs under the provisions of the relevant accounting guidance. Additionally, in some restructuring plans write-downs of long-lived assets may occur. Two types of assets are impacted: assets to be disposed of by sale and assets to be abandoned. Assets to be disposed of by sale are measured at the lower of carrying amount or estimated net proceeds from the sale. Assets to be abandoned with no remaining future service potential are written down to amounts expected to be recovered. The useful life of assets to be abandoned that have a remaining future service potential are adjusted and depreciation is recorded over the adjusted useful life. The table below provides detail of the restructuring and other (income) charges incurred.

​	Years ended December 31,
In millions	2015			2014			2013
Restructuring and other (income) charges, net	​			​			​
Gain on sale of assets and businesses	​	$	(12)	​	$	(5)	​	$	—
Insurance and legal settlements	​	​	—	​	​	—	​	​	(13)
Asset write-downs	​	​	4	​	​	—	​	​	10
Total restructuring and other (income) charges, net	​	$	(8)	​	$	(5)	​	$	(3)

2015 activities

During 2015, the company sold its 60 percent interest in a subsidiary in China for cash proceeds of  $11 million and recorded a gain on the sale of the subsidiary of  $11 million. Prior to its sale this subsidiary operated under the company’s Performance Materials operating segment. Additionally, the company recognized income of  $1 million associated with the sale of its Performance Materials’ air purification business from 2014.

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As part of a plan that was implemented to restructure a portion of the company’s operations, we recorded an impairment of  $4 million to write down inventory and property, plant and equipment associated with certain manufacturing operations of the company’s Performance Chemicals segment.

2014 activities

The company made a strategic decision to sell its Performance Materials’ air purification business. During 2014, the company sold the net working capital and associated customer list related to the air purification business and recorded a $5 million gain on sale.

2013 activities

During 2013, the company incurred pre-tax charges of  $10 million ($6 million attributable to the company and $4 million associated with noncontrolling interests) in connection with certain asset write-downs at one of the company’s Performance Materials’ foreign manufacturing locations.

The company’s Performance Chemical operating segment benefited from favorable non-recurring insurance and legal settlements during 2013.

Note 14:   Income Taxes

Earnings from continuing operations before income taxes are comprised of the following:

​	Years ended December 31,
In millions	2015			2014			2013
U.S. Earnings	​	$	146	​	$	202	​	$	185
Foreign Earnings	​	​	(8)	​	​	1	​	​	(1)
​	​	$	138	​	$	203	​	$	184

The significant components of the income tax provision are as follows:

​	Years ended December 31,
In millions	2015			2014			2013
Current	​			​			​
U.S. federal	​	$	35	​	$	59	​	$	54
State and local	​	​	5	​	​	8	​	​	7
Foreign	​	​	3	​	​	1	​	​	3
​	​	​	43	​	​	68	​	​	64
Deferred	​			​			​
U.S. federal	​	​	8	​	​	2	​	​	2
State and local	​	​	2	​	​	—	​	​	—
Foreign	​	​	—	​	​	—	​	​	—
Provision for deferred income taxes	​	​	10	​	​	2	​	​	2
Income tax deferral attributable to continuing operations	​	$	53	​	$	70	​	$	66

The company recorded zero, $(1) million and $1 million of deferred tax (benefit) expense in components of other comprehensive income during the years ended December 31, 2015, 2014 and 2013, respectively.

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The following table summarizes the major differences between taxes computed at the U.S. federal statutory rate and the actual income tax provision attributable to operations:

​	Years ended December 31,
In millions	2015			2014			2013
Income tax provision computed at the U.S. federal statutory rate of 35 percent	​	$	49	​	$	71	​	$	64
State and local income taxes, net of federal benefit	​	​	5	​	​	5	​	​	4
Foreign income tax rate differential	​	​	—	​	​	—	​	​	—
Changes in valuation allowance	​	​	1	​	​	1	​	​	3
IRC Section 199 deduction	​	​	(3)	​	​	(6)	​	​	(4)
Noncontrolling interest in consolidated partnership	​	​	(2)	​	​	(1)	​	​	(1)
Nondeductible expenses & other adjustments	​	​	3	​	​	—	​	​	—
Income tax provision attributable to continuing operations	​	$	53	​	$	70	​	$	66
Effective tax rate attributable to continuing operations	​	​	38%	​	​	35%	​	​	36%

The current and non-current deferred tax assets and liabilities are as follows:

​	December 31,
In millions	2015			2014
Deferred tax assets:	​			​
Accounts receivable	​	$	—	​	$	1
Accrued restructuring	​	​	2	​	​	3
Employee benefits	​	​	3	​	​	3
Intangibles	​	​	3	​	​	3
Investment in partnership	​	​	—	​	​	1
Net operating losses	​	​	5	​	​	1
Other	​	​	1	​	​	2
Deferred tax assets	​	​	14	​	​	14
Valuation allowance	​	​	(7)	​	​	(5)
Total net deferred tax assets	​	$	7	​	$	9
Deferred tax liabilities:	​			​
Fixed assets	​	$	(82)	​	$	(72)
Inventory	​	​	(1)	​	​	(2)
Total deferred tax liabilities	​	$	(83)	​	$	(74)
Net deferred tax liability	​	$	(76)	​	$	(65)
Included in the combined balance sheets:	​			​
Current net deferred tax asset	​	$	—	​	$	1
Non-current net deferred tax asset	​	​	—	​	​	1
Non-current net deferred tax liability	​	​	(76)	​	​	(67)
Net deferred liability	​	$	(76)	​	$	(65)

The company has foreign tax net operating loss carry-forwards which are available to reduce future taxable income in these jurisdictions. The company’s valuation allowance against deferred tax assets relates to certain foreign jurisdictions, which include net operating losses.

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At December 31, 2015 and 2014, no deferred income taxes have been provided for the company’s share of undistributed net earnings of foreign operations due to management’s intent to reinvest such amounts indefinitely. The determination of the amount of such unrecognized tax liability is not practicable because of the complexities with its hypothetical calculation. Those cumulative earnings, including foreign currency translation adjustments, totaled $(3) million and $6 million for the years ended December 31, 2015 and 2014, respectively.

The company has operations in multiple areas of the world and is subject, at times, to tax audits in these jurisdictions. These tax audits by their nature are complex and can require several years to resolve. The final resolution of any such tax audits could result in either a reduction in the company’s accruals or an increase in its income tax provision, both of which could have an impact on the results of operations in any given period. With a few exceptions, MWV is no longer subject to U.S. federal, state and local or foreign income tax examinations by tax authorities that would relate to the company for years prior to 2011. During 2013, MWV settled audits with the Internal Revenue Service for tax years 2009-2010. It is anticipated that audits in certain foreign jurisdictions and certain domestic states will be completed in 2016 or thereafter.

The company applies the provisions of ASC 740 as it relates to uncertain tax positions. This interpretation prescribes a comprehensive model for how a company should recognize, measure, present and disclose in its financial statements uncertain tax positions that the company has taken or expects to take on a tax return. ASC 740 states that a tax benefit from an uncertain tax position may be recognized only if it is “more likely than not” that the position is sustainable, based on its technical merits. The tax benefit of a qualifying position is the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement with a taxing authority having full knowledge of all relevant information.

The company has a liability for unrecognized tax benefits, including penalties and interest, of $1 million at December 31, 2015 and 2014, respectively. The company recognizes interest accrued related to unrecognized tax benefits and penalties as income tax expense.

Note 15:   Segment information

The company’s operating segments are (i) Performance Chemicals and (ii) Performance Materials, a description of both operating segments is included below.

Performance Chemicals

The Performance Chemicals segment manufacturers and sells products that are derived from crude tall oil (“CTO”) and lignin that are extracted from the kraft papermaking process. These materials are processed to make specialty chemicals that are used in the papermaking, adhesives, publication inks, rubber, asphalt, oilfield, bio-fuels, agriculture, dyestuffs and other industrial applications. The CTO-based products are produced by fractionating the CTO through a bio-refinery into intermediate products. The intermediates are either sold off or further processed into different specialty formulations to create increased value. It is the strategy of the business to further process all refinery intermediate products into innovative, specialty formulations.

Performance Materials

The Performance Materials segment manufactures and sells activated carbon products in the form of powder, granular, extruded pellets or structured honeycombs which target gasoline vapor emission control within the automotive industry as well as the food, water, beverage and chemical purification industries. In addition, extruded pellets and structured honeycomb products are used for air emissions control, corrosion protection and odor reduction. The Specialty Chemicals business has produced and sold activated carbon for over 100 years. Its branded Nuchar products are designed to meet the most stringent technical requirements of the applications where they are used. The history of expertise, manufacturing knowledge and technical capabilities allows us to design the porous carbon structure to be the optimal size for the molecules that need to be adsorbed in the noted applications. The products are uniquely designed to adsorb (catch and retain) and adsorb/desorb (catch and release) depending on the need of the application requirements.

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​	Years ended December 31,
In millions	2015			2014			2013
Net sales	​			​			​
Performance Chemicals	​	$	711	​	$	792	​	$	759
Performance Materials	​	​	257	​	​	249	​	​	221
Total net sales	​	$	968	​	$	1,041	​	$	980
Segment operating profit(1)	​			​			​
Performance Chemicals	​	​	87	​	​	124	​	​	126
Performance Materials	​	​	81	​	​	90	​	​	68
Total segment operating profit	​	​	168	​	​	214	​	​	194
Separation costs(2)	​	​	(17)	​	​	—	​	​	—
Restructuring and other income (charges)(3)	​	​	8	​	​	5	​	​	3
Interest expense	​	​	(21)	​	​	(16)	​	​	(13)
Provision for income taxes	​	​	(53)	​	​	(70)	​	​	(66)
Net income attributable to noncontrolling interests	​	​	(5)	​	​	(4)	​	​	1
Net income attributable to the Company	​	$	80	​	$	129	​	$	119

(1)

Segment operating profit is defined as segment revenue less segment operating expenses (segment operating expenses consist of costs of sales, selling, general and administrative expenses and other (income) expense, net). We have excluded the following items from segment operating profit: interest expense associated with corporate debt facilities, income taxes, gains (or losses) on divestitures of businesses, restructuring and other (income) charges and separation costs.

(2)

See Note 12 for more information on separation costs.

(3)

Information about how restructuring and other charges (income) relate to our businesses at the segment level is discussed in Note 13.

​	Depreciation and amortization									Capital expenditures
​	Years ended December 31,									Years ended December 31,
In millions	2015			2014			2013			2015			2014			2013
Performance Chemicals	​	$	24	​	$	23	​	$	23	​	$	37	​	$	35	​	$	26
Performance Materials	​	​	11	​	​	10	​	​	10	​	​	65	​	​	66	​	​	37
Total	​	$	35	​	$	33	​	$	33	​	$	102	​	$	101	​	$	63

​	Years ended December 31,
In millions	2015			2014			2013
Net Sales(1)	​			​			​
North America	​	$	633	​	$	695	​	$	678
Asia Pacific	​	​	149	​	​	151	​	​	122
Europe, Middle East and Africa	​	​	156	​	​	154	​	​	132
South America	​	​	30	​	​	41	​	​	48
Net sales	​	$	968	​	$	1,041	​	$	980

F-25

​	December 31,
In millions	2015			2014			2013
Property, plant and equipment, net	​			​			​
North America	​	$	339	​	$	295	​	$	268
Asia Pacific	​	​	77	​	​	94	​	​	40
Europe, Middle East and Africa	​	​	1	​	​	1	​	​	1
South America	​	​	21	​	​	20	​	​	17
Property, plant and equipment, net	​	$	438	​	$	410	​	$	326

​	December 31,
​	2015		2014		2013
Total assets	​		​		​
Performance Chemicals	​	421	​	414	​	374
Performance Materials	​	358	​	300	​	216
Total segment assets(2)	​	779	​	714	​	590
Corporate and other	​	3	​	4	​	3
Total assets	​	782	​	718	​	593

(1)

Net sales by region are presented based on the shipped to location.

(2)

Segment assets exclude assets not specifically managed as part of one specific segment herein referred to as “Corporate and other.”

Note 16:   Supplemental Information

The following tables includes details of prepaid and other current assets, other assets, accrued expenses and other liabilities as presented on the Combined Balance Sheets:

Prepaid and other current assets:

​	December 31,
In millions	2015			2014
Income and value added tax receivables	​	​	9	​	​	1
Prepaid freight and supply agreements	​	​	2	​	​	2
Non-trade receivables	​	​	3	​	​	6
Advances to suppliers	​	​	1	​	​	1
Other	​	​	5	​	​	3
​	​	$	20	​	$	13

Other assets:

​	December 31,
In millions	2015			2014
Deferred compensation arrangements	​	​	3	​	​	2
Capitalized software, net	​	​	5	​	​	—
Prepaid supply agreements	​	​	3	​	​	6
Land-use rights	​	​	6	​	​	—
Other	​	​	6	​	​	3
​	​	$	23	​	$	11

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Accrued expenses:

​	December 31,
In millions	2015			2014
Accrued interest	​	​	3	​	​	4
Income and value added tax payables	​	​	1	​	​	1
Accrued freight	​	​	2	​	​	2
Other	​	​	7	​	​	6
​	​	$	13	​	$	13

Other liabilities:

​	December 31,
In millions	2015			2014
Deferred compensation arrangements	​	​	3	​	​	2
Other	​	​	4	​	​	4
​	​	$	7	​	$	6

Note 17:   Subsequent Events

In connection with the preparation of the combined financial statements and in accordance with U.S. GAAP, these financial statements reflect the Company’s evaluation of subsequent events through March 30, 2016, the date the financial statements were available to be issued.

Revolving Credit and Term Loan Facility

On March 7, 2016 we have entered into a credit agreement governing a senior secured multi-currency revolving credit facility (the “Revolving Credit Facility”), which provides for maximum borrowings of  $400 million for the company, with a €100 million subfacility for a Belgian subsidiary borrower of Ingevity (the “Belgian Borrower”) subject to certain additional conditions on the initial funding date. The Revolving Credit Facility allows for borrowings in U.S. dollars, euros and Japanese yen, with certain sub-limits. The Revolving Credit Facility has a letter of credit sub-limit of  $75 million and a swingline facility sub-limit of approximately $40 million. The Revolving Credit Facility will be available, subject to certain customary conditions, on and after the initial funding date, which is expected to be up to 10 business days prior to or substantially concurrently with the separation from WestRock. The Revolving Credit Facility can be utilized for working capital and other general corporate purposes, and is expected to be drawn up to $225 million on the distribution date.

We have also, on March 7, 2016, entered into a senior secured term loan facility (the “Term Loan Facility” and together with the Revolving Credit Facility, the “Facilities”) of  $300 million, the proceeds of which, together with the funding date draw under the Revolving Credit Facility, we expect will be used to pay a dividend, distribution or other cash transfer of up to $500 million to WestRock or one of its subsidiaries prior to the consummation of the separation and distribution and to pay fees and expenses associated with the Facilities and the separation. The term loan will be funded subject to certain additional conditions on the funding date.

The Facilities mature on the five-year anniversary of the initial funding date of the Facilities. The Term Loan Facility amortizes at a rate equal to 0 percent per annum during the first year after the funding date, 5 percent per annum during the second and third years after the funding date and 10 percent per annum during the fourth and fifth years after the funding date, with the balance due at maturity. The Term Loan Facility will require the proceeds of certain asset sales and casualty events to be applied to prepay the loans under the Term Loan Facility, subject to certain thresholds, exceptions and reinvestment rights.

F-27

The interest rates per annum applicable to the loans under the Facilities are based on a fluctuating rate of interest measured by reference to, at the borrowers’ election, either (1) an adjusted London inter-bank offered rate (LIBOR) plus a borrowing margin, or (2) an alternate base rate plus a borrowing margin. The borrowing margin for the Facilities is subject to adjustment based on the company’s consolidated total leverage ratio, and is between 1.25% and 2.00% in the case of LIBOR loans and between 0.25% and 1.00% in the case of base rate loans.

Customary fees will be payable in respect of both Facilities. The Revolving Credit Facility fees will include (i) commitment fees, based on a percentage of the daily unused portions of the facility ranging from 0.15% to 0.30%, and (ii) customary letter of credit fees. These fees are expected to be capitalized and amortized over the term of the Facilities.

The Facilities include financial covenants requiring the company to maintain on a consolidated basis, as of the end of each fiscal quarter, a maximum total leverage ratio of 3.75 to 1.00, which may be increased to 4.25 to 1.00 under certain circumstances and a minimum interest coverage ratio of 3.00 to 1.00, in each case, as of the first fiscal quarter ending after the funding date. The Facilities include customary events of default including non-payment of principal, interest or fees, violation of covenants, inaccuracy of representations or warranties, cross default to certain other material indebtedness, bankruptcy and insolvency events, invalidity or impairment of guarantees or security interests, material judgments and change of control.

F-28