exv10w31






Exhibit 10.31




Graphic Packaging Holding Company


Performance-Based Restricted Stock Unit Award Agreement




     THIS AGREEMENT, effective as of the Grant Date set forth on the signature page hereto,
represents the grant by Graphic Packaging Holding Company (the “Company”) to the participant named
on the signature page hereto (the “Participant”) of Performance-Based Restricted Stock Units
(“Performance RSUs”), representing the right to earn shares of the Company’s common stock or the
equivalent value thereof in cash, pursuant to the provisions of the Graphic Packaging Corporation
2004 Stock and Incentive Compensation Plan, as such plan may be amended from time to time (the
“Plan”), and subject to the terms and conditions set forth in this award agreement (this
“Agreement”).



     The parties hereto agree as follows:



     1. Defined Terms. Capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the Plan. In addition, and notwithstanding any contrary
definition in the Plan, for purposes of this Agreement:




	 	(a)	 	“Delayed 409A Settlement Date” shall mean the first day of the seventh month
following the Participant’s separation from service (or if the Participant dies during
such period, the date of the Participant’s death).
	 
	 	(b)	 	“Fair Market Value” as of a given date shall mean the closing price of the
Company’s common stock on the NYSE (or other established stock exchange or market) on
such date, or if such day is not a trading day, on the immediately preceding trading
day.
	 
	 	(c)	 	“Grant Date” means the date set forth on the signature page hereto.
	 
	 	(d)	 	“Involuntary Termination” means the involuntary termination of the
Participant’s employment by the Company or any Affiliate or Subsidiary other than for
Cause, death or Disability.
	 
	 	(e)	 	“Performance Period” means the three calendar years beginning January 1, 2009
and ending on December 31, 2011.
	 
	 	(f)	 	“Performance Year” means a given calendar year within the Performance Period.
	 
	 	(g)	 	“Pro-Rata Amount” means the number of Performance RSUs (rounded to the nearest
whole number) equal to the product of (a) the number of Performance RSUs that would
otherwise have been earned based on actual performance as of the end of last completed
Performance Year (using an average over such Performance Years if more than one), times
(b) a fraction, the numerator of which is the number of full 12-month periods between
the Grant Date and the date of termination of the Participant’s employment by reason of
death, Disability, Retirement or Involuntary Termination, and the denominator of which
is three.
	 
	 	(h)	 	“Retirement” means voluntary termination of employment after age 65, or after
age 62 with 25 years of service to the Company, its Affiliates or Subsidiaries or their
predecessors.





     2. Grant of Performance RSUs. The target number of Shares subject to this award is
shown on the signature page of this Agreement (the “Target Award”). Depending on the Company’s
level of achievement of specified performance goals for the three year period beginning January 1,
2009 and ending December 31, 2011, the Participant may earn 0% to 150% of the Target Award, in
accordance



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with the matrices attached hereto as Exhibit A (as supplemented hereafter for each new
Performance Year) and the terms
of this Agreement.




     3. Earning and Vesting of Performance RSUs. The Performance RSUs do not represent
actual shares of stock. The Performance RSUs represent the right to earn from 0% to 150% of the
Target Award, based on the Company’s achievement of performance goals as set forth on Exhibit
A hereto (as supplemented hereafter for each new Performance Year). At the end of the
Performance Period (and not later than the third anniversary of the Grant Date), the results for
each Performance Year shall be averaged to determined the overall number of Performance RSUs
earned.



     In the case of a Change of Control occurring prior to December 31, 2011, the number of
Performance RSUs earned shall be determined based on actual performance for Performance Years
completed prior to the Change of Control and based on assumed target performance for any incomplete
Performance Year in which the Change of Control occurs or for Performance Years after the Change in
Control.



     Any Performance RSUs earned will vest and become non-forfeitable on the earliest to occur of
the following (the “Vesting Date”):




	 	(a)	 	the third anniversary of the Grant Date, provided the Participant has continued
in the employment of the Company, its Affiliates, and/or its Subsidiaries through such
date, or
	 
	 	(b)	 	the occurrence of a Change of Control, provided the Participant has continued
in the employment of the Company, its Affiliates, and/or its Subsidiaries through such
date, or
	 
	 	(c)	 	as to the Pro-Rata Amount only, the termination of the Participant’s employment
due to death, Disability or Retirement, or
	 
	 	(d)	 	as to the Pro-Rata Amount only, on the 60th day after the
Participant’s Involuntary Termination; provided that the Participant shall have
executed a separation agreement including a release of claims in a form satisfactory to
the Company and the release shall have become irrevocable within such 60-day period.




If the Participant’s employment with the Company or an Affiliate or Subsidiary terminates prior to
the Vesting Date for any reason other than as described above (or in the case of the Participant’s
Involuntary Termination, if the Participant fails to execute or revokes a release of claims in a
form satisfactory to the Company within the applicable 60-day period), the Participant shall
forfeit all right, title and interest in and to the unvested Performance RSUs as of the date of
such termination (or as of the 60th day after the Participant’s Involuntary Termination,
as applicable) and the Performance RSUs will be cancelled by the Company without further
consideration or any act or action by the Participant.




     4. Settlement of Performance RSUs. The vested Performance RSUs shall be valued as of
the later of (i) the Vesting Date, or (ii) if vesting occurs by reason of the Participant’s
termination of employment other than due to death and the Participant is a “specified employee” of
the Company for purposes of Code Section 409A as of the date of such separation from service, the
Delayed 409A Settlement Date (as applicable, the “Valuation Date”), based on the Fair Market Value
of the Company’s common stock as of the Valuation Date (the “Settlement Value”). The Participant
shall be entitled to receive
2/3  of the Settlement Value in Shares (the number of Shares being
determined by dividing the Settlement Value by the Fair Market Value of the Company’s common stock
as of the Valuation Date) and 1/3 of the Settlement Value in cash. Payout of the Performance RSUs
shall be made on a date to be determined by the Company that is within 60 days after the Vesting
Date (or within 75 days after the date of Involuntary Termination, in the case of vesting under
Section 3(d)); provided, however, that if the Valuation Date is the Delayed 409A Settlement Date,
then payout of the Performance RSUs (based on the



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Settlement Value) shall be made on a date to be determined by the Company that is within 60
days after the Delayed 409A
Settlement Date.




     5. Nontransferability. The Performance RSUs may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated (a “Transfer”) other than by will or by the laws of
descent and distribution, except as provided in the Plan. The designation of a beneficiary shall
not constitute a Transfer.



     6. Limitation of Rights. The Performance RSUs do not confer to the Participant or the
Participant’s beneficiary, executors or administrators any rights of a shareholder of the Company
unless and until Shares are in fact issued to such person in connection with the Performance RSUs.
Upon conversion of the Performance RSUs into Shares, the Participant will obtain full voting and
other rights as a shareholder of the Company.



     7. Continuation of Employment. Nothing in this Agreement shall interfere with or
limit in any way the right of the Company or any Affiliate or Subsidiary to terminate the
Participant’s employment at any time, nor confer upon the Participant any right to continue in
employment of the Company or any Affiliate or Subsidiary.



     8. Payment of Taxes. The Company or any Affiliate or Subsidiary employing the
Participant has the authority and the right to deduct or withhold, or require the Participant to
remit to the employer, an amount sufficient to satisfy federal, state, and local taxes (including
the Participant’s FICA obligation) required by law to be withheld with respect to any taxable event
arising as a result of the vesting or settlement of the Performance RSUs. With respect to
withholding required upon any taxable event arising as a result of the Performance RSUs, the
employer will satisfy the tax withholding requirement on the cash portion by withholding cash equal
to the total minimum statutory tax required to be withheld, and on the Share portion by withholding
Shares having a Fair Market Value as of the date that the amount of tax to be withheld is to be
determined as nearly equal as possible to (but no more than) the total minimum statutory tax
required to be withheld The obligations of the Company under this Agreement to payout the
Performance RSUs will be conditional on such payment or arrangements, and the Company, and, where
applicable, its Affiliates or Subsidiaries will, to the extent permitted by law, have the right to
deduct any such taxes from any payment of any kind otherwise due to the Participant.



     9. Plan Controls. This Agreement and the Participant’s rights hereunder are subject
to all the terms and conditions of the Plan, as the same may be amended from time to time, as well
as to such rules and regulations as the Committee may adopt for administration of the Plan. It is
expressly understood that the Committee is authorized to administer, construe, and make all
determinations necessary or appropriate to the administration of the Plan and this Agreement, all
of which shall be final and binding upon the Participant. In the event of any actual or alleged
conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of
the Plan shall be controlling and determinative (except for any definitions of terms which are
specifically set forth herein). Any conflict between this Agreement and the terms of a written
employment agreement with the Participant shall be decided in favor of the provisions of this
Agreement.



     10. Amendment. Subject to the terms of the Plan, this Agreement may be modified or
amended by the Committee; provided that no such amendment shall materially adversely affect the
rights of the Participant hereunder without the consent of the Participant. The waiver by the
Company of breach of any provision of this Agreement by the Participant shall not operate or be
construed as a waiver of any subsequent breach by the Participant. Notwithstanding the foregoing,
the Committee shall have unilateral authority to amend the Plan and the Agreement without the
Participant’s consent to the extent necessary



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to comply with applicable law or changes to applicable law (including, but not limited to,
Code Section 409A) and related regulations or other guidance and federal securities laws.




     11. Severability. The provisions of this Agreement are severable and if any one or
more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the
remaining provisions shall nevertheless be binding and enforceable.



     12. Applicable Laws and Consent to Jurisdiction. The validity, construction,
interpretation, and enforceability of this Agreement shall be determined and governed by the laws
of the state of Delaware without giving effect to the principles of conflicts of law.



     IN WITNESS WHEREOF, the parties have executed this Agreement, effective as of the Grant
Date set forth below.



	 	 	 	 	 
	 	Graphic Packaging Holding Company


 	 
	 	By:  	/s/ Cynthia A. Baerman
 	 
	 	 	Cynthia A. Baerman 	 
	 	 	Senior Vice President, Human Resources 	 
	 
	 
	 
	 	Participant


 	 
	 	By:  	 	 
	 	 	Name:  	«First_Name» «Middle_Initial__Name» 	 
	 	 	«Last_Name» 	 
	 



Grant Date: March 4, 2009






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EXHIBIT A

Performance Goals and Payout Matrix



The Performance RSUs will be earned, in whole or in part, based on the Company’s achievement of
selected performance goals over the three-year period beginning January 1, 2009 and ending
December 31, 2011 (the “Performance Period”).



Within the first 90 days of each Performance Year, the Committee shall establish performance goals
for that Performance Year based on up to three metrics relevant to the Company’s annual business
plan, including but not limited to the following:





	 	Ø	 	Debt Reduction
	 
	 	Ø	 	Cost Reduction
	 
	 	Ø	 	Revenue from New Products
	 
	 	Ø	 	Return on Invested Capital (ROIC)




The Committee shall assign a weight to each performance metric (for a total of 100%) and approve
threshold, target and maximum payout levels for each, in accordance with the following table,
which shall be set out in a supplement to this Exhibit A for each such year (Exhibit A-2009,
Exhibit A-2010 and Exhibit A-2011):




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	AA% Weight	 	BB% Weight	 	CC% Weight
	 	 	Metric 1	 	Metric 2	 	Metric 3
	 	 	Performance	 	Performance as	 	Performance	 	Performance as	 	Performance	 	Performance as
	Payout Level	 	Requirement	 	% of Target	 	Requirement	 	% of Target	 	Requirement	 	% of Target
	0%
	 	<$XX	 	N/A	 	<$XX	 	N/A	 	<$XX	 	N/A
	50%
	 	  $XX	 	  80%	 	  $XX	 	  80%	 	  $XX	 	  80%
	100%
	 	  $YY	 	100%	 	  $YY	 	100%	 	  $YY	 	100%
	150%
	 	  $ZZ	 	120%	 	  $ZZ	 	120%	 	  $ZZ	 	120%








 




			
	*	 	Payout for performance between points is interpolated on a straight-line basis




Performance under each metric is independent of performance under the others. The results for
each metric are multiplied by the applicable weightings and then added together. Notwithstanding
the performance matrix, the Committee may make equitable adjustments to the payout level for any
metric to take into account changes in accounting principles, changes in tax laws, business
acquisitions or dispositions, unusual or non-recurring events, natural disasters or other events
that the Committee deems relevant to the achievement of targeted performance.



At the end of the Performance Period (and not later than the third anniversary of the Grant Date),
the results for each Performance Year shall be averaged to determined the overall number of
Performance RSUs earned.



In the case of a Change of Control occurring prior to December 31, 2011, the Performance Period
shall end on the date of the Change of Control. The number of Performance RSUs earned for the
shortened Performance Period shall be determined based on actual performance for Performance Years
completed prior to the Change of Control and based on assumed target performance for any
incomplete Performance Year in which the Change of Control occurs or for Performance Years after
the Change in Control.