Exhibit
10.20


 


EMPLOYMENT AGREEMENT


 


This EMPLOYMENT AGREEMENT is entered into as of this
30th day of September, 2002 by and among Riverwood International Corporation, a
Delaware corporation (“Employer”), Riverwood Holding, Inc., a Delaware
corporation (“Holding”) and  Robert W.
Spiller (“Executive”).


 


W I T N E S S E T H :


 


WHEREAS, Employer desires to employ Executive as its
Senior Vice President, Consumer Products Packaging 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 commencing on the date hereof and ending on
the third 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 Senior Vice President, Consumer
Products Packaging 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 $350,000,
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


 


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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.


 


(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.  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.


 


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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 the occurrence, without Executive’s consent, of any of
the


 


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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 last to occur of (1) the
last day of the Initial Term or, if applicable, the then current Additional
Term, (2) the first anniversary of the Date of Termination and (3)
and the expiration of a number of months equal to the number of years of
Executive’s service with Employer completed as 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,
accidental death and dismemberment 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.


 


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(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 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


 


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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).


 


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 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 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


 


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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 any Person who is or was a customer, client
or distributor of Holding, 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 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


 


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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 extent arising out of or


 


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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, 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.


 


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(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.


 


(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


3350 Riverwood Parkway,
S.E.


Suite 1400


Atlanta, Georgia 30339


Attention:  General Counsel


 


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(B)        
if to Holding, to it at:


 


c/o Riverwood
International Corporation


3350 Riverwood Parkway,
S.E.


Suite 1400


Atlanta, Georgia 30339


Attention:  General Counsel


 


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


 


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


919 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.


 


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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 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:

  	
   

  
	
   

  	
   

  	
  Stephen M. Humphrey

  
	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RIVERWOOD HOLDING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Stephen M. Humphrey

  
	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Executive:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Robert W.
  Spiller

  



 


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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 after one
year in position and one luncheon club.


 


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