Exhibit 10.18


 


RESTRICTED UNIT AGREEMENT


 


This RESTRICTED UNIT AGREEMENT,
dated as of August 8, 2003 (the “Restricted
Unit Agreement”), is between Graphic Packaging Corporation, a
Delaware corporation (formerly Riverwood Holding, Inc.) (the “Company”), and the Grantee whose name
appears on the signature page hereof (the “Grantee”)
under the terms of the 2003 Riverwood Holding, Inc. Long-Term Incentive
Plan (the “Plan”) and the Second
Amended and Restated Employment Agreement dated as of March 24, 2003 among
Riverwood International Corporation (renamed Graphic Packaging
International, Inc.), Riverwood Holding, Inc. (renamed Graphic
Packaging Corporation) and Grantee (the “Employment
Agreement”). Capitalized terms used in this Restricted Unit
Agreement and not otherwise defined herein have the meaning given in the
Employment Agreement or in the Plan. If any provision of this Restricted Unit
Agreement is inconsistent with any provision of the Plan (as either may be
interpreted from time to time by the Board), the Plan shall control.


 


1.   Grant of Restricted Units.   Effective as of the date hereof, the
Company hereby evidences and confirms its award to the Grantee of the number of
Restricted Units set forth on the signature page hereof, which represent the
Company’s contractual obligation to deliver shares of Common Stock (the “Shares”) to the Grantee upon the terms set
forth herein.


 


2.   Vesting of Restricted Units.   The Restricted Units shall vest 33 1/3%
on each of the first three anniversaries of the Effective Date, subject to the
Grantee’s continuous employment with the Company or one of its affiliates from
the Effective Date through each such vesting date, provided that, if, on or prior to the third anniversary of
the Effective Date, (x) the Grantee’s employment is terminated by reason
of a Qualifying Termination of Employment or (y) the CD&R Fund and, if
applicable, its Affiliates effect a sale or other disposition of all of the
Common Stock then held by the CD&R Fund and (ii) thereafter, the
Grantee’s employment is terminated by the Company other than for Cause or by
the Grantee for Good Reason or (z) there is a Change in Control, all
Restricted Units held by the Grantee as of the effective date of such
Qualifying Termination of Employment, termination under the foregoing
clause (y)(ii) or Change in Control, whichever is applicable, shall
become immediately 100% vested and exercisable. If the Grantee’s employment
terminates after the first or second anniversary of the Effective Date for
reasons other than provided in clause (x) or (y)(ii) of the preceding
sentence, he shall retain the right to any Restricted Units that have become
vested and nonforfeitable, subject to Section 3, which shall be payable
pursuant to Section 5.


 


3.   Forfeiture.   If the Grantee’s employment is terminated
for Cause on or before the date on which any Restricted Units have become
payable pursuant to Section 5, such Restricted Units awarded to the
Grantee shall be canceled and the Grantee shall forfeit all rights to the Restricted
Units and any Shares issuable for such Restricted Units.


 


4.   Dividend Equivalents.   If the Company pays any cash dividend on
the Common Stock before the shares underlying the Restricted Units are
delivered to the Grantee pursuant to Section 5, the Grantee will be
credited on the record date established for such dividend with a number of
Restricted Units equal to the greatest whole number which may be obtained by
dividing (i) the value of such
dividend by (ii) the Fair Market
Value of a Share on such date. Any such additional Restricted Units shall
become vested and nonforfeitable, if at all, on the same terms and conditions
as are applicable in respect of the Restricted Units.


 


5.   Delivery of Shares Underlying
Vested Restricted Units.  
Shares underlying vested Restricted Units shall be delivered on the
earlier of (i) the third
anniversary of the Effective Date, (ii)
a Qualifying Termination of Employment, and (iii)
the occurrence of a Change of Control.


 


6.   Representations and
Warranties.


 


(a)           Investment Intention.
The Grantee represents and warrants that the Restricted Units have been, and
any Shares will be, acquired by the Grantee solely for the Grantee’s own
account for


 

















 


investment and not with a view to or for sale in connection with any
distribution thereof. The Grantee further understands, acknowledges and agrees
that none of the Restricted Units may be transferred, sold, pledged,
hypothecated or otherwise disposed of except to the extent expressly permitted
hereby.


 


(b)           Ability to Bear Risk.
The Grantee represents and warrants that (i)
the financial situation of the Grantee is such that the Grantee can afford to
bear the economic risk of holding the Restricted Units and Shares for an
indefinite period and (ii) the
Grantee can afford to suffer the complete loss of the Grantee’s investment in
the Restricted Units and Shares.


 


7.   Miscellaneous.


 


(a)           Tax Withholding.
Whenever Shares or other property are to be distributed in respect to any
Restricted Units awarded hereunder, the Company shall have the power to
withhold, or require the Grantee to remit to the Company, an amount sufficient
to satisfy United States Federal, state, local and non-U.S. withholding tax
requirements, including but not limited to income, social security and
employment taxes, relating to such issuance, and the Company may defer issuance
of such Shares or other property until such requirements are satisfied. The
Board may, in its discretion, permit the Grantee to elect, subject to such
conditions as the Board shall impose, to satisfy his withholding obligation
hereunder with Shares or any other property issuable hereunder. Notwithstanding
the foregoing, in the event Shares are to be distributed pursuant to (i) the Company’s termination of the
Grantee’s employment without Cause, due to death or Disability, due to
retirement, or (ii) the Grantee’s
termination of employment for Good Reason or (iii)
the occurrence of a Change of Control, the Company shall withhold from the
number of Shares otherwise deliverable enough Shares (based on the Fair Market
Value at the time of distribution) to satisfy income and employment tax
withholding requirements with respect to such distribution and delivery.


 


(b)           Nonassignability.
The Restricted Units granted hereby are not assignable or transferable, in
whole or in part, and may not, directly or indirectly, be offered, transferred,
sold, pledged, assigned, alienated, hypothecated or otherwise disposed of or
encumbered (including without limitation by gift, operation of law or
otherwise) other than by will or by the laws of descent and distribution to the
estate of the Grantee upon the Grantee’s death.


 


(c)           No Rights as a
Stockholder. Neither the Grantee nor any person or persons to whom
the Grantee’s rights under this Restricted Unit Agreement shall have passed by
will or by the laws of descent and distribution, as the case may be, shall have
any voting, dividend or other rights or privileges as a stockholder of the
Company with respect to any Shares corresponding to the Restricted Units
granted hereby unless and until a certificate for Shares is issued in respect
thereof.


 


(d)           No Right to Continued
Employment. Nothing in this Restricted Unit Agreement shall
interfere with or limit in any way the right of the Company or any of its
Subsidiaries to terminate the Grantee’s employment at any time, or confer upon
the Grantee any right to continue in the employ of the Company or any of its
Subsidiaries.


 


(e)           Interpretation.
The Board shall have full power and discretion to construe and interpret the
Plan (and any rules and regulations issued thereunder) and this Restricted Unit
Agreement. Any determination or interpretation by the Board under or pursuant
to this Restricted Unit Agreement shall be final and binding and conclusive on
all persons affected hereby.


 


(f)            Delegation by the
Board. All of the powers, duties and responsibilities of the Board
specified in this Restricted Unit Agreement may, to the full extent permitted
by applicable law, be exercised and performed by any duly constituted committee
thereof to the extent authorized by the Board to exercise and perform such
powers, duties and responsibilities.


 


(g)           Binding Effect;
Benefits. This Restricted Unit Agreement shall be binding upon and
inure to the benefit of the Company and the Grantee and their respective
successors and assigns. Nothing in


 


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this Restricted Unit Agreement, express or implied, is intended or
shall be construed to give any person other than the Company or the Grantee or
their respective successors or assigns any legal or equitable right, remedy or
claim under or in respect of any agreement or any provision contained herein.


 


(h)           Amendment.
This Restricted Unit Agreement may not be altered, modified, or amended except
by a written instrument signed by the Company and the Grantee.


 


(i)            Severability.
In the event that any one or more of the provisions of this Restricted Unit
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.


 


(j)            Notices.
All notices and other communications required or permitted hereunder shall be
in writing and shall be deemed given when (a)
delivered personally, (b) sent by
certified or registered mail, postage prepaid, return receipt requested or (c) delivered by overnight courier
(provided that a written acknowledgment of receipt is obtained by the overnight
courier) to the party concerned at the address indicated below or to such
changed address as such party may subsequently give notice of:


 




	
  If to the Company:

  	
   

  	
  Graphic Packaging Corporation

  814 Livingston Court

  Marietta, Georgia 30067

  
	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  General Counsel;

  Chairman, Compensation Committee

  
	
   

  	
   

  	
   

  
	
  If to Grantee:

  	
   

  	
  at the home address of Grantee on the

  records of the Company

  






 


(k)           Governing Law.
This Restricted Unit Agreement shall be governed by and construed in accordance
with the laws of the State of New York without regard to the principles of
conflict of laws except to the extent the laws of the State of Delaware
specifically and mandatorily apply.


 


(l)            Sections and Other
Headings. The section and other headings contained in this
Restricted Unit Agreement are for reference purposes only and shall not affect
the meaning or interpretation of this Restricted Unit Agreement.


 


(m)          Counterparts.
This Restricted Unit Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.


 


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IN WITNESS WHEREOF, the Company
and the Grantee have executed this Restricted Unit Agreement as of the date
first above written.


 


	
   

  	
  Graphic
  Packaging CorpOration

  
	
   

  	
  By:

  	
  /s/ Wayne E. Juby

  	
   

  
	
   

  	
   

  	
  Name: Wayne E. Juby

  
	
   

  	
   

  	
  Title: Senior Vice President, Human
  Resources

  
	
   

  	
   

  	
   

  
	
   

  	
  THE GRANTEE:

  
	
   

  	
   

  
	
   

  	
  Stephen M. Humphrey

  
	
   

  	
  /s/ Stephen M. Humphrey

  	
   

  
	
   

  	
   

  	
   

  
	
  Number of Restricted Units 342,225

  	
   

  



 


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