Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT is entered into as of this 30th day of November, 2005
by and among Graphic Packaging International, Inc., a Delaware corporation
(“Employer”), Graphic Packaging Corporation, a Delaware corporation (“GPC”) and
Daniel J. Blount (“Executive”).

 

W I T N E S S E T H :

 

WHEREAS, Employer desires to employ Executive as its Senior Vice President and
Chief Financial Officer on the terms and conditions set forth herein;

 

WHEREAS, Executive desires to accept such employment on the terms and conditions
set forth herein;

 

WHEREAS, each of Employer, GPC and Executive agrees that Executive will have
a prominent role in the management of the business, and the development of the
goodwill, of Employer and its Affiliates (as defined below) and will establish
and develop relations and contacts with the principal customers and suppliers of
Employer and its Affiliates in the United States and the rest of the world, all
of which constitute valuable goodwill of, and could be used by Executive to
compete unfairly with, Employer and its Affiliates;

 

WHEREAS, (i) in the course of his employment with Employer, Executive will
obtain confidential and proprietary information and trade secrets concerning the
business and operations of Employer and its Affiliates in the United States and
the rest of the world that could be used to compete unfairly with Employer and
its Affiliates; (ii) the covenants and restrictions contained in Sections 8
through 13, inclusive, are intended to protect the legitimate interests of
Employer and its Affiliates in their respective goodwill, trade secrets and
other confidential and proprietary information; and (iii) Executive desires to
be bound by such covenants and restrictions;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
promises contained herein and for other good and valuable consideration,
Employer, GPC and Executive hereby agree as follows:

 

1.               Agreement to Employ.  Upon the terms and subject to the
conditions of

 

this Agreement, Employer hereby employs Executive, and Executive hereby accepts
employment by Employer.

 

2.  Term; Position and Responsibilities.

 

(a)  Term of Employment.  Unless Executive’s employment shall sooner terminate
pursuant to Section 7, Employer shall employ Executive for a term commencing on
the date hereof and ending on the first anniversary of the date hereof (the
“Initial Term”).  Effective upon the expiration of the Initial Term and of each
Additional Term (as defined below), Executive’s employment hereunder shall be
deemed to be automatically extended, upon the same terms and conditions, for an
additional period of one year (each, an “Additional Term”), in each such case,

 

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commencing upon the expiration of the Initial Term or the then current
Additional Term, as the case may be, unless Employer, at least 180 days prior to
the expiration of the Initial Term or such Additional Term, shall give written
notice (a ”Non-Extension Notice”) to Executive of its intention not to extend
the Employment Period (as defined below) hereunder, provided that
a Non-Extension Notice shall not constitute a notice to Executive of the
termination of his employment by Employer unless such notice specifically
provides for such termination of employment and the specific date thereof.  The
period during which Executive is employed pursuant to this Agreement, including
any extension thereof in accordance with the preceding sentence, shall be
referred to as the “Employment Period”.

 

(b)  Position and Responsibilities.  During the Employment Period, Executive
shall serve as Senior Vice President and Chief Financial Officer of Employer and
have such duties and responsibilities as are customarily assigned to individuals
serving in such position and such other duties consistent with Executive’s title
and position as the Board of Directors of Employer (“Employer’s Board”)
specifies from time to time.  Executive shall report to the Company’s President
and Chief Executive Officer.  Executive shall devote all of his skill, knowledge
and working time (except for (i) vacation time as set forth in Section 6(c) and
absence for sickness or similar disability and (ii) to the extent that it does
not interfere with the performance of Executive’s duties hereunder, (A) such
reasonable time as may be devoted to service on boards of directors of other
corporations and entities, subject to the provisions of Section 9, and the
fulfillment of civic responsibilities and (B) such reasonable time as may be
necessary from time to time for personal financial matters) to the conscientious
performance of the duties and responsibilities of such position.  If so elected
or designated by the respective shareholders thereof, Executive shall serve as
a member of the Boards of Directors of GPC, Employer and their respective
Affiliates during the Employment Period without additional compensation.

 

3.  Base Salary.  As compensation for the services to be performed by Executive
during the Employment Period, Employer shall pay Executive a base salary at an
annualized rate of $325,000, payable in installments on Employer’s regular
payroll dates, and, in the event that Executive’s employment hereunder is
terminated by death, for the remainder of the pay period in which death occurs
and for one month thereafter.  Employer’s Board shall review Executive’s base
salary annually during the period of his employment hereunder and, in its sole
discretion, Employer’s Board may increase (but may not decrease) such base
salary from time to time based upon the performance of Executive, the financial
condition of Employer, prevailing industry salary levels and such other factors
as Employer’s Board shall consider relevant.  (The annual base salary payable to
Executive under this Section 3, as the same may be increased from time to time
and without regard to any reduction therefrom in accordance with the next
sentence, shall hereinafter be referred to as the “Base Salary”.)  The Base
Salary payable under this Section 3 shall be reduced to the extent that
Executive elects to defer such Base Salary under the terms of any deferred
compensation, savings plan or other voluntary deferral arrangement that may be
maintained or established by Employer.

 

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4.  Incentive Compensation Arrangements.

 

(a)  Incentive Compensation.  During the Employment Period, Executive shall
participate in Employer’s incentive compensation programs for its senior
executives existing from time to time, at a level commensurate with his position
and duties with Employer and based on such performance targets as may be
established from time to time by Employer’s Board or a committee thereof.  For
calendar year 2006, Executive’s aggregate annual target bonus opportunity shall
be 70% of Base Salary.

 

5.  Employee Benefits.  During the Employment Period, employee benefits,
including life, medical, dental, accidental death and dismemberment, business
travel accident, prescription drug and disability insurance, shall be provided
to Executive in accordance with the programs of Employer then available to its
senior executives, as the same may be amended and in effect from time to time. 
Executive shall also be entitled to participate in all of Employer’s profit
sharing, pension, retirement, deferred compensation and savings plans, as the
same may be amended and in effect from time to time, applicable to senior
executives of Employer.  The benefits referred to in this Section 5 shall be
provided to Executive on a basis that is commensurate with Executive’s position
and duties with Employer hereunder and that is no less favorable than that of
similarly situated employees of Employer.

 

6.  Perquisites and Expenses.

 

(a)  General.  During the Employment Period, Executive shall be entitled to the
perquisites set forth on Schedule I hereto.

 

(b)  Business Travel, Lodging, etc.  Employer shall reimburse Executive for
reasonable travel, lodging, meal and other reasonable expenses incurred by him
in connection with his performance of services hereunder upon submission of
evidence, satisfactory to Employer, of the incurrence and purpose of each such
expense and otherwise in accordance with Employer’s business travel
reimbursement policy applicable to its senior executives as in effect from time
to time.

 

(c)  Vacation.  During the Employment Period, Executive shall be entitled to
a number of weeks of paid vacation on an annualized basis, without carryover
accumulation, equal to the greater of (i) four weeks and (ii) the number of
weeks of paid vacation per year applicable to senior executives of Employer in
accordance with its vacation policy as in effect from time to time.

 

7.  Termination of Employment.

 

(a)  Termination Due to Death or Disability.  In the event that Executive’s
employment hereunder terminates due to death or is terminated by Employer due to
Executive’s Disability (as defined below), no termination benefits shall be
payable to or in respect of Executive except as provided in Section 7(f)(ii). 
For purposes of this Agreement, “Disability” shall mean a physical or mental
disability that prevents or would prevent the performance by Executive of his
duties hereunder for a continuous period of six months or longer.  The
determination of Executive’s

 

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Disability shall (i) be made by an independent physician who is reasonably
acceptable to Employer and Executive (or his representative), (ii) be final and
binding on the parties hereto and (iii) be based on such competent medical
evidence as shall be presented to such independent physician by Executive and/or
Employer or by any physician or group of physicians or other competent medical
experts employed by Executive and/or Employer to advise such independent
physician.

 

(b)  Termination by Employer for Cause.  Executive may be terminated for Cause
(as defined below) by Employer, provided that Executive shall be permitted to
attend a meeting of Employer’s Board within 30 days after delivery to him of
a Notice of Termination (as defined below) pursuant to this Section 7(b) to
explain why he should not be terminated for Cause and, if following any such
explanation by Executive, Employer’s Board determines that Employer does not
have Cause to terminate Executive’s employment, any such prior Notice of
Termination delivered to Executive shall thereupon be withdrawn and of no
further force or effect.  “Cause” shall mean (i) the willful failure of
Executive substantially to perform his duties hereunder (other than any such
failure due to Executive’s physical or mental illness) or other willful and
material breach by Executive of any of his obligations hereunder or under any
option agreement or other incentive award agreement, after a written demand for
substantial performance has been delivered, and a reasonable opportunity to cure
has been given, to Executive by Employer’s Board, which demand identifies in
reasonable detail the manner in which Employer’s Board believes that Executive
has not substantially performed his duties or has breached his obligations,
(ii) Executive’s engaging in willful and serious misconduct that has caused or
is reasonably expected to result in material injury to Employer or any of its
Affiliates or (iii) Executive’s conviction of, or entering a plea of guilty or
nolo contendere to, a crime that constitutes a felony.

 

(c)  Termination Without Cause.  A termination “Without Cause” shall mean
a termination of employment by Employer other than due to Disability as
described in Section 7(a) or for Cause as described in Section 7(b).

 

(d)  Termination by Executive.  Executive may terminate his employment for any
reason.  A termination of employment by Executive for “Good Reason” shall mean
a termination by Executive of his employment with Employer within 30 days
following the occurrence, without Executive’s consent, of any of the following
events: (i) the assignment to Executive of duties that are significantly
different from, and that result in a substantial diminution of, the duties that
he is to assume on the date hereof, (ii) the failure of Employer to obtain the
assumption of this Agreement by any Successor (as defined below) to Employer as
contemplated by Section 14, (iii) a reduction in the rate of Executive’s Base
Salary, (iv) a material breach by Employer of any of its obligations hereunder
or by GPC of any of its obligations under any option agreement or other
incentive award agreement or (v) delivery to Executive of a Non-Extension
Notice, provided that, in the case of any of clauses (i), (iii) or (iv), within
30 days following the occurrence of any of the events set forth therein,
Executive shall have delivered written notice to Employer of his intention to
terminate his employment for Good Reason, which notice specifies in reasonable
detail the circumstances claimed to give rise to Executive’s right to terminate
his

 

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employment for Good Reason, and Employer or GPC, as the case may be, shall not
have cured such circumstances to the reasonable satisfaction of Executive.

 

(e)  Notice of Termination.  Any termination by Employer pursuant to
Section 7(a), 7(b) or 7(c), or by Executive pursuant to Section 7(d), shall be
communicated by a written Notice of Termination addressed to the other parties
to this Agreement.  A ”Notice of Termination” shall mean a notice stating that
Executive’s employment with Employer has been or will be terminated.

 

(f)  Payments Upon Certain Terminations.

 

(i)  In the event of a termination of Executive’s employment by Employer Without
Cause or a termination by Executive of his employment for Good Reason during the
Employment Period, Employer shall pay to Executive (or, following his death, to
Executive’s beneficiaries):

 

(A)  his Base Salary, which shall be payable in installments on Employer’s
regular payroll dates, for the period  (the “Severance Period”) beginning on the
Date of Termination (as defined below) and ending on the first anniversary of
the Date of Termination and

 

(B) the product of (1) the amount of incentive compensation that would have been
payable to Executive for the calendar year in which the Date of Termination
occurs if Executive had remained employed for the entire calendar year and
assuming that all applicable performance targets had been achieved, multiplied
by (2) a fraction, the numerator of which is equal to the number of days in such
calendar year that precede the Date of Termination and the denominator of which
is equal to 365 (such product, the “Pro Rata Bonus”), less

 

(C) the amount, if any, paid or payable to Executive under the terms of any
severance plan, policy, program or practice of GPC, Employer or any of their
respective Affiliates applicable to Executive, as in effect on the Date of
Termination; provided that Employer may, at any time, pay to Executive, in
a single lump sum and in satisfaction of Employer’s obligations under
clauses (A) and (B) of this Section 7(f)(i), an amount equal to (x) the
installments of the Base Salary then remaining to be paid to Executive pursuant
to clause (A) above, and the amount, if any, then remaining to be paid to
Executive pursuant to clause (B) above, less (y) the amount, if any, remaining
to be paid to Executive pursuant to any plan, policy, program or practice
identified under clause (C) above.

 

If Executive’s employment shall terminate and he is entitled to receive
continued payments of his Base Salary under clause (A) of this Section 7(f)(i),
Employer shall (x) continue to provide to Executive during the Severance Period
the life, medical, dental, and prescription drug benefits referred to in
Section 5 (the “Continued Benefits”) and (y) reimburse Executive for expenses
incurred by him for outplacement and career counseling services provided to
Executive

 

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for an aggregate amount not in excess of the lesser of (i) $25,000 and (ii) 20%
of Executive’s Base Salary.

 

Executive shall not have a duty to mitigate the costs to Employer under this
Section 7(f)(i), except that Continued Benefits shall be reduced or canceled to
the extent of any comparable benefit coverage earned by (whether or not paid
currently) or offered to Executive during the Severance Period by a subsequent
employer or other Person (as defined below) for which Executive performs
services, including but not limited to consulting services.

 

(ii)  If Executive’s employment shall terminate upon his death or Disability or
if Employer shall terminate Executive’s employment for Cause or Executive shall
terminate his employment without Good Reason during the Employment Period,
Employer shall pay Executive his full Base Salary through the Date of
Termination; plus, in the case of termination upon Executive’s death or
Disability, if, as of the Date of Termination, Employer has achieved the pro
rated performance objectives for such calendar year (determined as provided in
Section 7(f)(i)), the Pro Rata Bonus for the portion of the calendar year
preceding Executive’s Date of Termination (exclusive of any time between the
onset of a physical or mental disability that prevents the performance by
Executive of his duties hereunder and the resulting Date of Termination); plus,
in the case of termination upon Executive’s death, his full Base Salary for the
remainder of the pay period in which death occurs and for one month thereafter,
as provided in Section 3.

 

(iii)  Except as specifically set forth in this Section 7(f), no benefits
payable to Executive under any otherwise applicable plan, policy, program or
practice of Employer shall be limited by this Section 7(f), provided that
(x) Executive shall not be entitled to receive any payments or benefits under
any such plan, policy, program or practice providing any bonus or incentive
compensation (and the provisions of this Section 7(f) shall supersede the
provisions of any such plan, policy, program or practice), and (y) the amount,
if any, paid or payable to Executive under the terms of any such plan, policy,
program or practice relating to severance shall reduce the amounts payable under
Section 7(f)(i) as provided in clause (C) thereof.

 

(g)  Date of Termination.  As used in this Agreement, the term “Date of
Termination” shall mean (i) if Executive’s employment is terminated by his
death, the date of his death, (ii) if Executive’s employment is terminated by
Employer for Cause, the date on which Notice of Termination is given as
contemplated by Section 7(e) or, if later, the date of termination specified in
such Notice, and (iii) if Executive’s employment is terminated by Employer
Without Cause, due to Executive’s Disability or by Executive for any reason, the
date that is 30 days after the date on which Notice of Termination is given as
contemplated by Section 7(e) or, if no such Notice is given, 30 days after the
date of termination of employment.

 

(h)  Resignation upon Termination.  Effective as of any Date of Termination
under this Section 7 or otherwise as of the date of Executive’s termination of
employment with Employer, Executive shall resign, in writing, from all Board
memberships and other positions then held by him with GPC, Employer and their
respective Affiliates.

 

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8.  Unauthorized Disclosure.  During the period of Executive’s employment with
Employer and the ten-year period following any termination of such employment,
without the prior written consent of Employer’s Board or its authorized
representative, except to the extent required by an order of a court having
jurisdiction or under subpoena from an appropriate government agency, in which
event, Executive shall use his best efforts to consult with Employer’s Board
prior to responding to any such order or subpoena, and except as required in the
performance of his duties hereunder, Executive shall not disclose any
confidential or proprietary trade secrets, customer lists, drawings, designs,
information regarding product development, marketing plans, sales plans,
manufacturing plans, management organization information (including but not
limited to data and other information relating to members of the Board of
Directors of GPC, Employer or any of their respective Affiliates or to
management of GPC, Employer or any of their respective Affiliates), operating
policies or manuals, business plans, financial records, packaging design or
other financial, commercial, business or technical information (a) relating to
GPC, Employer or any of their respective Affiliates or (b) that GPC, Employer or
any of their respective Affiliates may receive belonging to suppliers, customers
or others who do business with GPC, Employer or any of their respective
Affiliates (collectively, “Confidential Information”) to any third person unless
such Confidential Information has been previously disclosed to the public or is
in the public domain (other than by reason of Executive’s breach of this
Section 8).

 

9.  Non-Competition.  During the period of Executive’s employment with Employer
and, following any termination thereof, the period ending on the later of
(a) the first anniversary of the Date of Termination and (b) the last day of the
Severance Period, Executive shall not, directly or indirectly, become employed
in a similar executive capacity by, engage in business with, serve as an agent
or consultant to, or become a partner, member, principal or stockholder (other
than a holder of less than 1% of the outstanding voting shares of any publicly
held company) of, The Mead Corporation, any of its subsidiaries or any other
current or future direct competitor (or any of such direct competitor’s
subsidiaries or affiliates) in the paperboard and paperboard packaging business
of GPC, Employer or any of their respective subsidiaries, as determined in good
faith by Employer’s Board.  For purposes of this Section 9, the phrase
employment “in a similar executive capacity” shall mean employment in any
position in connection with which Executive has or reasonably would be viewed as
having powers and authorities with respect to any other Person or any part of
the business thereof that are substantially similar, with respect thereto, to
the powers and authorities assigned to the Senior Vice President, Consumer
Products Packaging or any superior executive officer of Employer in the By-Laws
of Employer as in effect on the date hereof, a copy of the relevant portions of
which has been delivered to Executive on or before the date hereof, and which
Executive hereby confirms that he has reviewed.

 

10.  Non-Solicitation of Employees. During the period of Executive’s employment
with Employer and, following any termination thereof, the period ending on the
later of (a) the first anniversary of the Date of Termination and (b) the last
day of the Severance Period (such periods collectively, the “Restriction
Period”), Executive shall not, directly or indirectly, for his own account or
for the account of any other Person anywhere in the United States or Europe,
(i) solicit for employment, employ or otherwise interfere with the relationship
of GPC, Employer

 

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or any of their respective subsidiaries with, any person who at any time during
the six months preceding such solicitation, employment or interference is or was
employed by or otherwise engaged to perform services for GPC, Employer or any of
their respective subsidiaries, other than any such solicitation or employment
during Executive’s employment with GPC and Employer on behalf of GPC, and
Employer, or (ii) induce any employee of GPC, Employer or any of their
respective Affiliates who is a member of management to engage in any activity
which Executive is prohibited from engaging in under any of Sections 8, 9, 10
or 11 or to terminate his employment with Employer.

 

11.  Non-Solicitation of Customers.  During the Restriction Period, Executive
shall not, directly or indirectly, for his own account or for the account of any
other Person anywhere in the United States or Europe, solicit or otherwise
attempt to establish any business relationship of a nature that is competitive
with the paperboard and paperboard packaging business of GPC, Employer or any of
their respective subsidiaries, as determined in good faith by Employer’s Board,
with any Person who is or was a customer, client or distributor of GPC, Employer
or any of their respective Affiliates at any time during which Executive was
employed by Employer (in the case of any such activity during such time) or
during the twelve-month period preceding the Date of Termination (in the case of
any such activity after the Date of Termination), other than any such
solicitation on behalf of GPC, Employer or any of their respective Affiliates
during Executive’s employment with Employer.

 

12.  Return of Documents.  In the event of the termination of Executive’s
employment for any reason, Executive shall deliver to Employer all of (a) the
property of each of GPC, Employer and their respective Affiliates and (b) the
non-personal documents and data of any nature and in whatever medium of each of
GPC, Employer and their respective Affiliates, and he shall not take with him
any such property, documents or data or any reproduction thereof, or any
documents containing or pertaining to any Confidential Information.  Whether
documents or data are “personal” or “non-personal” shall be determined as
follows:  Executive shall present any documents or data that he wishes to take
with him to the chief legal officer of Employer for his review.  The chief legal
officer shall make an initial determination whether any such documents or data
are personal or non-personal, and with respect to such documents or data that he
determines to be non-personal, shall notify Executive either that such documents
or data must be retained by Employer or that Employer must make and retain
a copy thereof before Executive may take such documents or data with him.  Any
disputes as to the personal or non-personal nature of any such documents or data
shall first be presented to the Chairman of Employer’s Board or to another
representative designated by Employer’s Board, and if such disputes are not
promptly resolved by Executive and the Chairman or such representative, such
disputes shall be resolved through arbitration pursuant to Section 17(b).

 

13.  Injunctive Relief with Respect to Covenants; Forum, Venue and
Jurisdiction.  Executive acknowledges and agrees that the covenants, obligations
and agreements of Executive contained in Sections 8, 9, 10, 11, 12 and 13 relate
to special, unique and extraordinary matters and that a violation of any of the
terms of such covenants, obligations or agreements will cause Employer
irreparable injury for which adequate remedies are not available at law. 
Therefore, Executive agrees that Employer shall be entitled to an injunction,
restraining order or such other

 

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equitable relief (without the requirement to post bond) as a court of competent
jurisdiction may deem necessary or appropriate to restrain Executive from
committing any violation of such covenants, obligations or agreements.  These
injunctive remedies are cumulative and in addition to any other rights and
remedies Employer may have.  Employer, GPC and Executive hereby irrevocably
submit to the exclusive jurisdiction of the courts of the State of new York and
the Federal courts of the United States of America, in each case located in New
York City, in respect of the injunctive remedies set forth in this Section 13
and the interpretation and enforcement of Sections 8, 9, 10, 11, 12 and 13
insofar as such interpretation and enforcement relate to any request or
application for injunctive relief in accordance with the provisions of this
Section 13, and the parties hereto hereby irrevocably agree that (a) the sole
and exclusive appropriate venue for any suit or proceeding relating solely to
such injunctive relief shall be in such a court, (b) all claims with respect to
any request or application for such injunctive relief shall be heard and
determined exclusively in such a court, (c) any such court shall have exclusive
jurisdiction over the person of such parties and over the subject matter of any
dispute relating to any request or application for such injunctive relief, and
(d) each hereby waives any and all objections and defenses based on forum, venue
or personal or subject matter jurisdiction as they may relate to an application
for such injunctive relief in a suit or proceeding brought before such a court
in accordance with the provisions of this Section 13.  All disputes not relating
to any request or application for injunctive relief in accordance with this
Section 13 shall be resolved by arbitration in accordance with Section 17(b).

 

14.  Assumption of Agreement.  Employer shall require any Successor thereto, by
agreement in form and substance reasonably satisfactory to Executive, to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that Employer would be required to perform it if no such
succession had taken place.  Failure of Employer to obtain such agreement prior
to the effectiveness of any such succession shall be a breach of this Agreement
and shall entitle Executive to compensation from Employer in the same amount and
on the same terms as Executive would be entitled hereunder if Employer had
terminated Executive’s employment Without Cause as described in Section 7,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.

 

15.  Entire Agreement.  This Agreement (including the Exhibit hereto)
constitutes the entire agreement among the parties hereto with respect to the
subject matter hereof.  All prior correspondence and proposals (including but
not limited to summaries of proposed terms) and all prior promises,
representations, understandings, arrangements and agreements relating to such
subject matter (including but not limited to those made to or with Executive by
any other Person and those contained in any prior employment, consulting or
similar agreement entered into by Executive and Employer or any predecessor
thereto or Affiliate thereof) are merged herein and superseded hereby.

 

16.  Indemnification.  Employer hereby agrees that it shall indemnify and hold
harmless Executive to the fullest extent permitted by Delaware law from and
against any and all liabilities, costs, claims and expenses, including all costs
and expenses incurred in defense of litigation (including attorneys’ fees),
arising out of the employment of Executive hereunder, except to the

 

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extent arising out of or based upon the gross negligence or willful misconduct
of Executive.  Costs and expenses incurred by Executive in defense of such
litigation (including attorneys’ fees) shall be paid by Employer in advance of
the final disposition of such litigation upon receipt by Employer of (a) a
written request for payment, (b) appropriate documentation evidencing the
incurrence, amount and nature of the costs and expenses for which payment is
being sought, and (c) an undertaking adequate under Delaware law made by or on
behalf of Executive to repay the amounts so paid if it shall ultimately be
determined that Executive is not entitled to be indemnified by Employer under
this Agreement, including but not limited to as a result of such exception.

 

17.  Miscellaneous.

 

(a)  Binding Effect; Assignment.  This Agreement shall be binding on and inure
to the benefit of Employer, GPC and their respective successors and permitted
assigns.  This Agreement shall also be binding on and inure to the benefit of
Executive and his heirs, executors, administrators and legal representatives. 
This Agreement shall not be assignable by any party hereto without the prior
written consent of the other parties hereto, except as provided pursuant to this
Section 17(a).  Each of GPC and Employer may effect such an assignment without
prior written approval of Executive upon the transfer of all or substantially
all of its business and/or assets (by whatever means), provided that the
Successor to Employer shall expressly assume and agree to perform this Agreement
in accordance with the provisions of Section 14.

 

(b)  Arbitration.  Any dispute or controversy arising under or in connection
with this Agreement (except in connection with any request or application for
injunctive relief in accordance with Section 13) shall be resolved by binding
arbitration.  The arbitration shall be held in the city of Atlanta, Georgia and
except to the extent inconsistent with this Agreement, shall be conducted in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect at the time of the arbitration, and otherwise in
accordance with principles which would be applied by a court of law or equity. 
The arbitrator shall be acceptable to both Employer and Executive.  If the
parties cannot agree on an acceptable arbitrator, the dispute shall be heard by
a panel of three arbitrators, one appointed by Employer, one appointed by
Executive, and the third appointed by the other two arbitrators.  All expenses
of arbitration shall be borne by the party who incurs the expense, or, in the
case of joint expenses, by both parties in equal portions, except that, in the
event Executive prevails on the principal issues of such dispute or controversy,
all such expenses shall be borne by Employer.

 

(c)  Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without reference to
principles of conflicts of laws, provided that the indemnification provisions
contained in Section 16 shall be governed by and construed in accordance with
the laws of the State of Delaware.

 

(d)  Taxes.  Employer may withhold from any payments made under this Agreement
all applicable taxes, including but not limited to income, employment and social
insurance taxes, as shall be required by law.

 

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(e)  Amendments.  No provision of this Agreement may be modified, waived or
discharged unless such modification, waiver or discharge is approved by
Employer’s Board or a Person authorized thereby and is agreed to in writing by
Executive and, in the case of any such modification, waiver or discharge
affecting the rights or obligations of GPC, is approved by the Board of
Directors of GPC or a Person authorized thereby.  No waiver by any party hereto
at any time of any breach by any other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.  No waiver of any provision of this
Agreement shall be implied from any course of dealing between or among the
parties hereto or from any failure by any party hereto to assert its rights
hereunder on any occasion or series of occasions.

 

(f)  Severability.  In the event that any one or more of the provisions of this
Agreement shall be or become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall not be affected thereby.

 

(g)  Notices.  Any notice or other communication required or permitted to be
delivered under this Agreement shall be (i) in writing, (ii) delivered
personally, by courier service or by certified or registered mail, first-class
postage prepaid and return receipt requested, (iii) deemed to have been received
on the date of delivery or, if so mailed, on the third business day after the
mailing thereof, and (iv) addressed as follows (or to such other address as the
party entitled to notice shall hereafter designate in accordance with the terms
hereof):

 

(A)                If to Employer, to it at:

 

Graphic Packaging International, Inc.

814 Livingston Court, S.E.

Marietta, GA 30067

Attention:  General Counsel

 

(B)                  if to GPC, to it at:

 

Graphic Packaging Corporation

814 Livingston Court, S.E.

Marietta, GA 30067

Attention:  General Counsel

 

(C)                  if to Executive, to him at his residential address as
currently on file with Employer.

 

(h)  Voluntary Agreement; No Conflicts.  Executive, Employer and GPC each
represent that they are entering into this Agreement voluntarily and that
Executive’s employment hereunder and each party’s compliance with the terms and
conditions of this Agreement will not conflict with or result in the breach by
such party of any agreement to which he or it is a party or by which he or it or
his or its properties or assets may be bound.

 

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(i)  Counterparts.  This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which together shall constitute one
and the same instrument.

 

(j)  Headings.  The section and other headings contained in this Agreement are
for the convenience of the parties only and are not intended to be a part hereof
or to affect the meaning or interpretation hereof.

 

(k)  Certain Definitions.

 

“Affiliate”:  with respect to any Person, means any other Person that, directly
or indirectly through one or more intermediaries, Controls, is Controlled by, or
is under common Control with the first Person, including but not limited to
a Subsidiary of the first Person, a Person of which the first Person is
a Subsidiary, or another Subsidiary of a Person of which the first Person is
also a Subsidiary.

 

“Control”:  with respect to any Person, means the possession, directly or
indirectly, severally or jointly, of the power to direct or cause the direction
of the management policies of such Person, whether through the ownership of
voting securities, by contract or credit arrangement, as trustee or executor, or
otherwise.

 

“Person”:  any natural person, firm, partnership, limited liability company,
association, corporation, company, trust, business trust, governmental authority
or other entity.

 

“Subsidiary”:  with respect to any Person, each corporation or other Person in
which the first Person owns or Controls, directly or indirectly, capital stock
or other ownership interests representing 50% or more of the combined voting
power of the outstanding voting stock or other ownership interests of such
corporation or other Person.

 

“Successor”:  of a Person means a Person that succeeds to the first Person’s
assets and liabilities by merger, liquidation, dissolution or otherwise by
operation of law, or a Person to which all or substantially all the assets
and/or business of the first Person are transferred.

 

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IN WITNESS WHEREOF, Employer and GPC have duly executed this Agreement by their
authorized representatives, and Executive has hereunto set his hand, in each
case effective as of the date first above written.

 

 

 

GRAPHIC PACKAGING CORPORATION

 

 

 

 

 

By:

/s/ Stephen M. Humphrey

 

 

 

Stephen M. Humphrey

 

 

President and Chief Executive Officer

 

 

 

 

 

GRAPHIC PACKAGING INTERNATIONAL, INC.

 

 

 

 

 

By:

/s/ Stephen M. Humphrey

 

 

 

Stephen M. Humphrey

 

 

President and Chief Executive Officer

 

 

 

 

 

Executive:

 

 

 

 

 

/s/ Daniel J. Blount

 

 

Daniel J. Blount

 

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Schedule I

Perquisites

 

1.               Annual executive physical.

 

2.               Reimbursement up to $1,000 annually for expenses relating to
income tax preparation plus additional fees if incurred on account of
job-related circumstances and the cost of representation by return preparer
during any audit.

 

3.               Reimbursement for expenses incurred for financial and estate
planning services of up to $2,500 annually.

 

4.               Subject to the advance approval of the CEO, reimbursement for
initiation fees (“grossed up” for federal and state income taxes) and dues for
one luncheon or city club.

 

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