Exhibit 10.2


EMPLOYMENT AGREEMENT


This
EMPLOYMENT AGREEMENT is entered into as of this 20th day of July, 2006, by and among Graphic
Packaging International, Inc., a Delaware corporation (“Employer”), Graphic
Packaging Corporation, a Delaware corporation (“GPC”) and Stephen M. Humphrey (“Executive”).


W I T N E S S E T H :


WHEREAS,
Employer desires to employ Executive 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 7 through 12, 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 6, Employer shall employ Executive pursuant to this Agreement from
January 1, 2007 until December 31, 2007. The period during which Executive is
employed pursuant to this Agreement shall be referred to as the “Employment
Period”. Unless Executive’s employment shall terminate sooner pursuant to
Section 6, Executive’s Date of Termination shall be December 31, 2007, with no
additional notice to Executive required.









 



 


(b)      Position and Responsibilities. 
During the Employment Period, Executive shall serve as Vice Chairman of
Employer and have such duties and responsibilities consistent with Executive’s
title and position and as the Board of Directors of Employer (“Employer’s Board”)
specifies from time to time. Executive shall devote his skill, knowledge and
working time necessary to the conscientious performance of the duties and
responsibilities of such position.


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 $575,000, payable in
installments on Employer’s regular payroll dates.


4.     Employee Benefits.


(a)      General.  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 4 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.


(b)      Supplemental Retirement Benefit.
Upon Executive’s retirement after December 31, 2007, or upon Executive’s
retirement (other than following a termination by Employer for Cause or by
Executive for any reason), Employer shall provide Executive with a supplemental
retirement benefit equal to the difference, if any, between (i) the combined
benefits provided for under the Riverwood International Employees Retirement
Plan and Supplemental Pension Plan, and (ii) such benefits calculated as if
Executive had 10 years service with Employer. For purposes of calculating the
benefits payable pursuant to this Section 4(b), the same assumptions,
elections, and other matters used in determining Executive’s benefit under the
Riverwood International Employees Retirement Plan shall apply.


5.     Perquisites and Expenses.


(a)      General. During the Employment Period, Executive shall be entitled to a
perquisites allowance in the amount of $20,000 on an annualized basis, to be
paid as soon as administratively practical after January 1 of each year. This
special bonus can be used by Executive for such matters to include, without limitation,
tax preparation services, financial planning services, home security services,
executive physical examination, dues of airline, luncheon, country or athletic
clubs, or automobile expenses.


(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 



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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 five weeks of paid vacation on an annualized
basis, without carryover accumulation or compensation for unused vacation.


6.     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 6(d).  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 by Employer for (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, 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, (iii) Executive’s
conviction of, or entering a plea of guilty or nolo  contendere
to, a crime that constitutes a felony, or (iv) Executive’s
material violation of the requirements of federal or state securities law,
rule or regulation, in cases involving fraud or deceit, or violation of
Employer’s insider trading policy. Any item of conduct in the previous sentence
shall constitute “Cause.” Executive’s conduct need not result in monetary or
financial loss to constitute Cause. 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 6(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.


(c)      Notice of Termination.  Any
termination by Employer pursuant to Section 6(a) or 6(b) shall be
communicated by a written Notice of Termination addressed to the other
parties to 



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this Agreement.  A ”Notice
of Termination” shall mean a notice stating that Executive’s employment
with Employer has been or will be terminated.


(d)      Payments and Benefits Upon Executive’s Death
or Disability, Termination by Employer With Cause, or Termination by Executive. The benefits provided Executive pursuant to
this Section 6(d) are made in lieu of any payments or benefits, and Executive
shall not be entitled to receive any payments or benefits, pursuant to any
plan, policy, program or practice providing any bonus or annual incentive
compensation.


(i) If Executive’s employment shall terminate upon his death or
Disability, or if Employer shall terminate Executive’s employment for Cause, or
if Executive shall terminate his employment during the Employment Period, then
Employer shall pay Executive his full Base Salary through the Date of
Termination.


(ii) Additionally, in the case of termination upon Executive’s death,
Employer shall pay Executive his full Base Salary for the remainder of the pay
period in which death occurs and for one month thereafter.


(e)      Date of Termination. 
Except as defined elsewhere in this Agreement, the term “Date of Termination”
shall mean (x) if Executive’s employment is terminated by his
death, the date of his death, (y) if Executive’s employment is
terminated by Employer for Cause, the date on which Notice of Termination is
given as contemplated by Section 6(c) or, if later, the date of
termination specified in such Notice, or (z) if Executive’s
employment is terminated 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 6(c) or, if no such Notice
is given, 30 days after the date of termination of employment.


(f)       Resignation upon Termination. 
Effective as of January 1, 2007, Executive shall resign, in writing,
from all positions then held by him with GPC’s and Employer’s Boards.


(g)      Nondisparagement. Executive agrees
not to disparage Employer, GPC, or the subsidiaries thereof, or the officers,
directors or employees of any of them, during the Employment Period or
thereafter.


7      Unauthorized Disclosure. During the period of Executive’s employment
with Employer and the three-year period following any termination of such
employment, without Employer’s prior written consent, 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 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, 



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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 7).


8.     Non-Competition. 
During the period of Executive’s employment with Employer and for one
year following the Date of Termination, Executive shall not, directly or
indirectly, become employed in a management capacity, including as a consultant
serving in a management capacity, of Caraustar Industries, Inc., Field
Container Company, L.P., MeadWestvaco Corporation, Rock-Tenn Company, the
former consumer packaging division of Smurfit-Stone Container Corporation that
was acquired by an affiliate of Texas Pacific Group, or any of their current
subsidiaries or successors.


9.     Non-Solicitation of Employees. For one year following the Date of
Termination, 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 for employment, employ or otherwise interfere with the
relationship of GPC, 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 GPC, Employer or any of their current subsidiaries, other
than any such solicitation or employment during Executive’s employment with GPC
and Employer on behalf of GPC, and Employer.


10.   Non-Solicitation of Customers.  For
one year following the Date of Termination, 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 for purposes of engaging in the manufacture, sales or
converting of paperboard and paperboard packaging with any Person who is or was
a customer, client or distributor of GPC or Employer or any of their
Affiliates at any time during which Executive was employed by Employer.


11.   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.



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12.      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 7, 8, 9, 10, 11 and 12 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, GPC and Executive hereby
irrevocably submit to the jurisdiction of the superior courts of Cobb County,
Georgia and the federal courts of the Northern District of Georgia, in respect
of the injunctive remedies set forth in this Section 12 and the
interpretation and enforcement of Sections 7, 8, 9, 10, 11 and 12 insofar
as such interpretation and enforcement relate to any request or application for
injunctive relief in accordance with the provisions of this Section 12,
and the parties hereto hereby irrevocably waive 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 12.  All disputes
not relating to any request or application for injunctive relief in accordance
with this Section 12 shall be resolved by arbitration in accordance with
Section 16(b).


13.   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.


14.   Entire Agreement.  This Agreement 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. As of January 1, 2007, this Agreement explicitly supersedes and
replaces that certain Second Amended and Restated Employment Agreement, dated
March 25, 2003, among Riverwood International Corporation, Riverwood Holding,
Inc. and Executive (the “Prior Agreement”). All obligations of Employer, GPC
and Executive pursuant to the Prior Agreement will cease as of January 1, 2007.
In consideration thereof, Employer shall pay Executive a pensionable, lump-sum
payment of $500,000, less applicable taxes, as soon as practicable after
January 1, 2007. Moreover, the parties acknowledge that execution of, and
compliance with, this Agreement shall not serve as “Good Reason” for Executive
to terminate his employment, as defined in the Employment Agreement, dated as
of March 26, 1997, among Executive, Riverwood International Corporation and
Riverwood Holding, Inc.



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15.   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 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.


16.   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 16(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 13.


(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 12) 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 Delaware without
reference to principles of conflicts of laws.


(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 or
GPC, to it at:


814
Livingston Court, S.E.


Marietta,
GA 30067


Attention:  General Counsel


(B)                   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.


(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.



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(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/ Wayne E.
  Juby

  
	
   

  	
   

  	
  Wayne E. Juby

  
	
   

  	
   

  	
  Senior Vice
  President, Human Resources

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GRAPHIC
  PACKAGING INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wayne E.
  Juby

  
	
   

  	
   

  	
  Wayne E. Juby

  
	
   

  	
   

  	
  Senior Vice
  President, Human Resources

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Executive:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Stephen M.
  Humphrey

  
	
   

  	
  Stephen M.
  Humphrey

  



 



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