Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT is entered into as of August 8, 2003 by and among
Riverwood International Corporation, a Delaware corporation (“Employer”),
Riverwood Holding, Inc., a Delaware corporation (“Holding”) and Robert M. Simko
(“Executive”).

 

W I T N E S S E T H :

 

WHEREAS, Employer desires to employ Executive as its Vice President Supply Chain
Management 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, Holding 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, Holding 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

 

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COMMENCING ON THE DATE HEREOF AND ENDING ON THE SECOND 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, 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 VICE PRESIDENT SUPPLY CHAIN
MANAGEMENT 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 HOLDING, 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 $230,000, 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

 

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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.

 

4                                          INCENTIVE COMPENSATION ARRANGEMENTS.
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.

 

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.

 

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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 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

 

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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 HOLDING 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
EMPLOYMENT FOR GOOD REASON, AND EMPLOYER OR HOLDING, 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

 

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(C)                                THE AMOUNT, IF ANY, PAID OR PAYABLE TO
EXECUTIVE UNDER THE TERMS OF ANY SEVERANCE PLAN, POLICY, PROGRAM OR PRACTICE OF
HOLDING, 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 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

 

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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
HOLDING, EMPLOYER AND THEIR RESPECTIVE AFFILIATES.

 

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 HOLDING, EMPLOYER OR ANY OF THEIR RESPECTIVE
AFFILIATES OR TO MANAGEMENT OF HOLDING, 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 HOLDING, EMPLOYER OR ANY OF THEIR RESPECTIVE
AFFILIATES OR (B) THAT HOLDING, EMPLOYER OR ANY OF THEIR RESPECTIVE AFFILIATES
MAY RECEIVE BELONGING TO SUPPLIERS, CUSTOMERS OR OTHERS WHO DO BUSINESS WITH
HOLDING, 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).

 

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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 HOLDING, 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 VICE PRESIDENT, SUPPLY CHAIN MANAGEMENT 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 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 HOLDING, EMPLOYER 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 HOLDING, EMPLOYER OR ANY OF THEIR RESPECTIVE
SUBSIDIARIES, OTHER THAN ANY SUCH SOLICITATION OR EMPLOYMENT DURING EXECUTIVE’S
EMPLOYMENT WITH HOLDING AND EMPLOYER ON BEHALF OF HOLDING, AND EMPLOYER, OR
(II) INDUCE ANY EMPLOYEE OF HOLDING, 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 HOLDING, 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 HOLDING, EMPLOYER OR ANY OF THEIR
RESPECTIVE AFFILIATES

 

8

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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 HOLDING, 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 HOLDING, EMPLOYER AND THEIR
RESPECTIVE AFFILIATES AND (B) THE NON-PERSONAL DOCUMENTS AND DATA OF ANY NATURE
AND IN WHATEVER MEDIUM OF EACH OF HOLDING, 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 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, HOLDING 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

 

9

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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 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

 

10

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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, HOLDING 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 HOLDING 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.

 

11

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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 HOLDING, IS APPROVED
BY THE BOARD OF DIRECTORS OF HOLDING 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:

 

Riverwood International Corporation

814 Livingston Court

Marietta, Georgia  30067

Attention:  General Counsel

 

(B)                                IF TO HOLDING, TO IT AT:

 

c/o Riverwood International Corporation

814 Livingston Court

Marietta, Georgia  30067

Attention:  General Counsel

 

(C)                                IF TO EXECUTIVE, TO HIM AT HIS RESIDENTIAL
ADDRESS AS CURRENTLY ON FILE WITH EMPLOYER.

 

12

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Copies of any notices or other communications given under this Agreement shall
also be given to:

 

Clayton, Dubilier & Rice, Inc.

375 Park Avenue

New York, New York  10152

Attention:  Mr. Kevin J. Conway

 

and

 

Debevoise & Plimpton

875 Third Avenue

New York, New York  10022

Attention:  Franci J. Blassberg, Esq.

 

(H)                                 VOLUNTARY AGREEMENT; NO CONFLICTS.
EXECUTIVE, EMPLOYER AND HOLDING 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.

 

(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.

 

13

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“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.

 

14

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IN WITNESS WHEREOF, Employer and Holding 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.

 

 

 

RIVERWOOD INTERNATIONAL CORPORATION

 

 

 

By:

/s/ Stephen M. Humphrey

 

 

 

Name: Stephen M. Humphrey

 

 

Title: President and CEO

 

 

 

 

 

RIVERWOOD HOLDING, INC.

 

 

 

By:

/s/ Stephen M. Humphrey

 

 

 

Name: Stephen M. Humphrey

 

 

Title: President and CEO

 

 

 

 

 

Executive:

 

 

 

/s/ Robert M. Simko

 

 

15

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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 $5,000 FOR EXPENSES INCURRED
IN THE FIRST CALENDAR YEAR SERVICES ARE UTILIZED AND UP TO $2,500 FOR EXPENSES
INCURRED IN CALENDAR YEARS THEREAFTER.

 

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 COUNTRY CLUB AND ONE LUNCHEON OR CITY CLUB.

 

16

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AMENDMENT TO

EMPLOYMENT AGREEMENT

 

THIS AMENDMENT (the “Amendment”), effective as of February 1, 2006, by and
between Graphic Packaging International, Inc. f/k/a Riverwood International
Corporation (“Employer”), Graphic Packaging Corporation f/k/a Riverwood Holding,
Inc. (“Holding”) and Robert M. Simko (“Executive”), amends that certain
Employment Agreement, dated as of August 8, 2003, by and between Employer,
Holding and Executive, as follows:

 

1.               Section 2(b) of the Employment Agreement is amended by
substituting “Vice President Supply Chain Management” with “Senior Vice
President, Paperboard Operations.”

 

2.               Section 3 of the Employment Agreement is amended by
substituting “$230,000” with “$310,000.”

 

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

 

 

GRAPHIC PACKAGING INTERNATIONAL, INC.

 

 

 

 

 

By:

/s/ Stephen M. Humphrey

2/21/2006

 

 

Stephen M. Humphrey

 

 

 

President and Chief Executive Officer

 

 

 

GRAPHIC PACKAGING CORPORATION

 

 

 

 

 

By:

/s/ Stephen M. Humphrey

2/21/2006

 

 

Stephen M. Humphrey

 

 

President and Chief Executive Officer

 

 

 

EXECUTIVE

 

 

 

 

 

/s/ Robert M. Simko

2/21/2006

 

Robert M. Simko

 

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