Exhibit
10.8


 


FIRST AMENDED AND RESTATED EMPLOYMENT AGREEMENT


 


This
FIRST AMENDED AND RESTATED EMPLOYMENT AGREEMENT is entered into as of
August 8, 2003 by and among Riverwood International Corporation, a
Delaware corporation (“Employer”), Riverwood Holding, Inc., a Delaware
corporation to be renamed Graphic Packaging Corporation (“Holding”) and Daniel
J. Blount (“Executive”).


 


W I T N E S S E T H :


 


WHEREAS,
Employer currently employs Executive pursuant to an Employment Agreement dated
as of September 1, 1998 (the “Prior Agreement”);


 


WHERAS,
Holding entered into an Agreement and Plan of Merger (the “Merger Agreement”)
dated as of March 25, 2003 with Graphic Packaging International
Corporation (“GPIC”) pursuant to which GPIC will become a wholly owned subsidiary
of Holding (such transaction, the “Merger”) on the Effective Date (as such term
is defined in the Merger Agreement);


 


WHEREAS,
Holding, Employer and Executive desire to amend the Prior Agreement to become
effective on the Effective Date.


 


NOW,
THEREFORE, in consideration of the promises and mutual covenants contained
herein and for other good and valuable consideration, Employer and Executive
hereby agree and the Prior Agreement is hereby amended and restated in its
entirety, 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 Effective Date and ending on the third
anniversary of that date (the “Employment Period”).


 


(b)           Position and Responsibilities.  During the Employment Period, Executive
shall serve as Senior Vice President, Integration of Employer and shall have
(i) responsibility for the achievement of synergies in connection with the
combination of Employer’s business with GPIC’s business following the Merger, (ii)
responsibility for the operational aspects of Employer’s information technology
function, (iii) responsibility for the management of the integration staff of
Employer and (iv) 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 $325,000, 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.


 


4              Incentive Compensation Arrangements. 
During the Employment Period, Executive shall be entitled to the
following incentive compensation.


 


(a)           Synergy Achievement Award.  For each of the first three years, measured
as provided in Section 4(a)(ii) below, following the Effective Date (each,
an “Award Year”), the Executive shall be eligible to receive a cash bonus (the
“Synergy Achievement Award”) determined in accordance with this
Section 4(a).


 


(i)            The Synergy Achievement Award will
be administered by a committee initially consisting of B. Charles Ames, Kevin
Conway and Stephen M. Humphrey (the “Synergy Review Committee”).  Replacements for any member of the Synergy
Review Committee shall be named by the Chief Executive Officer of Employer.  For each Award Year in the Employment Period
the Synergy Review Committee shall, in its discretion, determine the value of
the synergies achieved.


 


(ii)           The first Award Year shall begin on
the first day of the calendar month in which the Effective Date occurs.  The second and third Award Years shall begin
on the first and second anniversaries, respectively, of the first day of the
first Award Year.


 


(iii)          The Synergy Achievement Award (if any)
for a given Award Year shall be calculated in accordance with Schedule I.


 


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(iv)          Unless otherwise determined by the
Synergy Review Committee and the compensation committee of Employer (the
“Compensation Committee”), the Synergy Achievement Award (if any) earned in
respect of an Award Year shall be paid to the Executive on the earlier of sixty
(60) days following (i) the last day of the Award Year in which the total
synergies achieved since the Effective Date reaches $59.1 million and (ii) the
last day of the third Award Year.


 


(v)           The Synergy Achievement Award is
subject to such conditions as the Compensation Committee reasonably determines
necessary to prevent the treatment of the Synergy Achievement Award as other
than “performance based compensation” within the meaning of
Section 162(m)(4)(C) of the Internal Revenue Code of 1986, as amended (the
“Code”).


 


(b)           Equity Awards


 


(i)            Option Exchange.  Executive shall surrender 1,200 unvested
service options to purchase Class A Common Stock of Employer (“Service
Options”) and 3,000 unvested performance options to purchase Class A Common Stock
of Employer (“Performance Options”) granted to Executive pursuant to the
Riverwood Holding, Inc. Stock Incentive Plan (the “1996 Stock Incentive Plan”),
3,277 unvested Performance Options granted to Executive pursuant to the
Riverwood Holding, Inc. Supplemental Long Term Incentive Plan (the “1999 LTIP”)
and 17,136 unvested Service Options granted to Executive pursuant to the
Riverwood Holding, Inc. 2002 Stock Incentive Plan (the “2002 Stock Plan”) (all
such unvested Service Options and Performance Options, the “Unvested Options”)
and Executive shall receive (i) 4,923 Service Options (the “New Options”)
pursuant to the 2003 Riverwood Holding, Inc. Long Term Incentive Plan (the
“2003 LTIP”), on terms substantially similar to those provided to other senior
executives of Employer and (ii) 7,384 Restricted Stock Units (the “2003
Exchange Restricted Units”) pursuant to the 2003 LTIP on terms substantially
similar to those provided to other senior executives of Employer.


 


(ii)           Unit Exchange.  Executive shall surrender 1,500 incentive
stock units granted to Executive pursuant to the 1999 LTIP and 1,800 Restricted
Stock Units granted to Executive pursuant to the 2002 Stock Plan and Executive
shall receive 3,300 restricted stock units pursuant to the 2003 LTIP (the “2003
Replacement Restricted Units” and, together with the 2003 Exchange Restricted
Units, the “New Restricted Units”) on terms substantially similar to those
provided to other senior executives of Employer.


 


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


 


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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 II hereto.


 


(b)           Professional Development.  Employer shall reimburse Executive for
reasonable expenses incurred in connection with (i) continuing education for
the maintenance of Executive’s license as a Certified Public Accountant, (ii)
Executive’s participation in the “World Class” Chief Financial Officer
Education Program and (iii) Executive’s participation in educational programs
relevant to his responsibilities for the Employer’s information technology
function.


 


(c)           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.


 


(d)           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.


 


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 


 


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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 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 or (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, 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


 


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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 or a
termination of Executive’s employment as a result of the expiration of 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
eighteen month anniversary of the Date of Termination, and


 


(B)           any earned but unpaid Synergy
Achievement Awards, payable promptly following such termination of employment
and a pro rata portion of the Synergy Achievement Award (the “Pro Rata Synergy
Award”) that would have been payable to Executive for the Award Year that
includes the Date of Termination, payable promptly following the calculation
thereof, less


 


(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 


 


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shall (x) continue
to provide to Executive during the Severance Period the life, medical, dental
and prescription drug benefits referred to in Section 5 (the “Continued
Benefits”) and (y) reimburse Executive for expenses incurred by him
for outplacement and career counseling services provided to Executive for an
aggregate amount not in excess of the lesser of (i) $25,000 and (ii)
20% of Executive’s Base Salary.


 


Executive
shall not have a duty to mitigate the costs to Employer under this
Section 7(f)(i), except that Continued Benefits shall be reduced or
canceled to the extent of any comparable benefit coverage earned by (whether or
not paid currently) or offered to Executive during the Severance Period by
a subsequent employer or other Person (as defined below) for which Executive
performs services, including but not limited to consulting services.


 


(ii)           If Executive’s employment shall
terminate upon his death or Disability or if Employer shall terminate
Executive’s employment for Cause or Executive shall terminate his employment
without Good Reason during the Employment Period, Employer shall pay Executive
his full Base Salary through the Date of Termination; plus, in the case of
termination upon Executive’s death or Disability, (i) any earned but unpaid
Synergy Achievement Award and (ii) the Pro Rata Synergy Award (determined as
provided in Section 7(f)(i)) for the portion of the Award Year preceding
Executive’s Date of Termination (exclusive of any time between the onset of
a physical or mental disability that prevents the performance by Executive
of his duties hereunder and the resulting Date of Termination); plus, in the
case of termination upon Executive’s death, his full Base Salary for the
remainder of the pay period in which death occurs and for one month thereafter,
as provided in Section 3.


 


(iii)          Except as specifically set forth in
this Section 7(f), no benefits payable to Executive under any otherwise
applicable plan, policy, program or practice of Employer 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


 


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Termination is given as contemplated by
Section 7(e) or, if no such Notice is given, 30 days after the date
of termination of employment.


 


(h)           Resignation upon Termination.  Effective as of any Date of Termination
under this Section 7 or otherwise as of the date of Executive’s
termination of employment with Employer, Executive shall resign, in writing,
from all Board memberships and other positions then held by him with Holding,
Employer and their respective Affiliates.


 


8              Unauthorized Disclosure.  During the period of Executive’s employment
with Employer and the ten-year period following any termination of such
employment, without the prior written consent of Employer’s Board or its
authorized representative, except to the extent required by an order of
a court having jurisdiction or under subpoena from an appropriate
government agency, in which event, Executive shall use his best efforts to
consult with Employer’s Board prior to responding to any such order or
subpoena, and except as required in the performance of his duties hereunder,
Executive shall not disclose any confidential or proprietary trade secrets,
customer lists, drawings, designs, information regarding product development,
marketing plans, sales plans, manufacturing plans, management organization
information (including but not limited to data and other information relating
to members of the Board of Directors of Holding, Employer or any of their
respective Affiliates or to management of Holding, Employer or any of their
respective Affiliates), operating policies or manuals, business plans,
financial records, packaging design or other financial, commercial, business or
technical information (a) relating to Holding, Employer or any of
their respective Affiliates or (b) that Holding, Employer or any of
their respective Affiliates may receive belonging to suppliers, customers or
others who do business with Holding, Employer or any of their respective
Affiliates (collectively, “Confidential Information”) to any third person
unless such Confidential Information has been previously disclosed to the
public or is in the public domain (other than by reason of Executive’s breach
of this Section 8).


 


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


 


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substantially similar, with respect thereto, to the
powers and authorities assigned to the Senior Vice President, Finance  or any superior executive officer of
Employer in the By-Laws of Employer as in effect on the date hereof,
a copy of the relevant portions of which has been delivered to Executive
on or before the date hereof, and which Executive hereby confirms that he has
reviewed.


 


10            Non-Solicitation of Employees.  During the period of Executive’s employment
with Employer and, following any termination thereof, the period ending on the
last day of the Severance Period (such periods collectively, the “Restriction
Period”), Executive shall not, directly or indirectly, for his own account or
for the account of any other Person anywhere in the United States or Europe, (i) solicit
for employment, employ or otherwise interfere with the relationship of Holding,
Employer or any of their respective subsidiaries with, any person who at any
time during the six months preceding such solicitation, employment or
interference is or was employed by or otherwise engaged to perform services for
Holding, Employer or any of their respective subsidiaries, other than any such
solicitation or employment during Executive’s employment with Holding and
Employer on behalf of Holding, and Employer, or (ii) induce any
employee of Holding, Employer or any of their respective Affiliates who is
a member of management to engage in any activity which Executive is
prohibited from engaging in under any of Sections 8, 9, 10 or 11 or
to terminate his employment with Employer.


 


11            Non-Solicitation of Customers.  During the Restriction Period, Executive
shall not, directly or indirectly, for his own account or for the account of
any other Person anywhere in the United States or Europe, solicit or otherwise
attempt to establish any business relationship of a nature that is
competitive with the paperboard and paperboard packaging business of Holding,
Employer or any of their respective subsidiaries, as determined in good faith
by Employer’s Board with any Person who is or was a customer, client or
distributor of Holding, Employer or any of their respective Affiliates 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


 


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data that he wishes to take with him to the chief
legal officer of Employer for his review. 
The chief legal officer shall make an initial determination whether any
such documents or data are personal or non-personal, and with respect to such
documents or data that he determines to be non-personal, shall notify Executive
either that such documents or data must be retained by Employer or that
Employer must make and retain a copy thereof before Executive may take
such documents or data with him.  Any
disputes as to the personal or non-personal nature of any such documents or
data shall first be presented to the Chairman of Employer’s Board or to another
representative designated by Employer’s Board, and if such disputes are not
promptly resolved by Executive and the Chairman or such representative, such
disputes shall be resolved through arbitration pursuant to Section 17(b).


 


13            Injunctive Relief with Respect to
Covenants; Forum, Venue and Jurisdiction. 
Executive acknowledges and agrees that the covenants, obligations and
agreements of Executive contained in Sections 8, 9, 10, 11, 12 and 13
relate to special, unique and extraordinary matters and that a violation
of any of the terms of such covenants, obligations or agreements will cause
Employer irreparable injury for which adequate remedies are not available at
law.  Therefore, Executive agrees that
Employer shall be entitled to an injunction, restraining order or such other
equitable relief (without the requirement to post bond) as a court of
competent jurisdiction may deem necessary or appropriate to restrain Executive
from committing any violation of such covenants, obligations or
agreements.  These injunctive remedies
are cumulative and in addition to any other rights and remedies Employer may
have.  Employer, Holding and Executive
hereby irrevocably submit to the exclusive jurisdiction of the courts of the
State of New York and the Federal courts of the United States of America,
in each case located in New York City, in respect of the injunctive
remedies set forth in this Section 13 and the interpretation and enforcement
of Sections 8, 9, 10, 11, 12 and 13 insofar as such interpretation
and enforcement relate to any request or application for injunctive relief in
accordance with the provisions of this Section 13, and the parties hereto
hereby 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).


 


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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 Exhibits
hereto) constitutes the entire agreement among the parties hereto with respect
to the subject matter hereof.  All prior
correspondence and proposals (including but not limited to summaries of
proposed terms) and all prior promises, representations, understandings,
arrangements and agreements relating to such subject matter (including but not
limited to those made to or with Executive by any other Person and those
contained in any prior employment, consulting or similar agreement entered into
by Executive and Employer or any predecessor thereto or Affiliate thereof) are
merged herein and superseded hereby.


 


16            Indemnification.  Employer hereby agrees that it shall
indemnify and hold harmless Executive to the fullest extent permitted by
Delaware law from and against any and all liabilities, costs, claims and
expenses, including all costs and expenses incurred in defense of litigation
(including attorneys’ fees), arising out of the employment of Executive
hereunder, except to the extent arising out of or based upon the gross
negligence or willful misconduct of Executive. 
Costs and expenses incurred by Executive in defense of such litigation
(including attorneys’ fees) shall be paid by Employer in advance of the final
disposition of such litigation upon receipt by Employer of (a) a
written request for payment, (b) appropriate documentation
evidencing the 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


 


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parties hereto, except as provided pursuant to this
Section 17(a).  Each of Holding and
Employer may effect such an assignment without prior written approval of
Executive upon the transfer of all or substantially all of its business and/or
assets (by whatever means), provided that the Successor to Employer
shall expressly assume and agree to perform this Agreement in accordance with
the provisions of Section 14.


 


(b)           Arbitration.  Any dispute or controversy arising under or
in connection with this Agreement (except in connection with any request or
application for injunctive relief in accordance with Section 13) shall be
resolved by binding arbitration.  The
arbitration shall be held in the city of Atlanta, Georgia and except to the
extent inconsistent with this Agreement, shall be conducted in accordance with
the Commercial Arbitration Rules of the American Arbitration Association then
in effect at the time of the arbitration, and otherwise in accordance with
principles which would be applied by a court of law or equity.  The arbitrator shall be acceptable to both
Employer and Executive.  If the parties
cannot agree on an acceptable arbitrator, the dispute shall be heard by
a panel of three arbitrators, one appointed by Employer, one appointed by
Executive, and the third appointed by the other two arbitrators.  All expenses of arbitration shall be borne
by the party who incurs the expense, or, in the case of joint expenses, by both
parties in equal portions, except that, in the event Executive prevails on the
principal issues of such dispute or controversy, all such expenses shall be
borne by Employer.


 


(c)           Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without
reference to principles of conflicts of laws, provided that the
indemnification provisions contained in Section 16 shall be governed by
and construed in accordance with the laws of 
the State of Delaware.


 


(d)           Taxes.  Employer may withhold from any payments made
under this Agreement all applicable taxes, including but not limited to income,
employment and social insurance taxes, as shall be required by law.


 


(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.


 


12

















 


(f)            Severability.  In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.


 


(g)           Notices.  Any notice or other communication required
or permitted to be delivered under this Agreement shall be (i) in
writing, (ii) delivered personally, by courier service or by
certified or registered mail, first-class postage prepaid and return receipt
requested, (iii) deemed to have been received on the date of
delivery or, if so mailed, on the third business day after the mailing thereof,
and (iv) addressed as follows (or to such other address as the
party entitled to notice shall hereafter designate in accordance with the terms
hereof):


 


(A)          If to Employer, to it at:


 


Riverwood International Corporation


814 Livingston Court


Marietta, Georgia 
30067


Attention:  General Counsel


 


(B)           if to Holding, to it at:


 


c/o Riverwood International Corporation


814 Livingston Court


Marietta, Georgia 
30067


Attention:  General Counsel


 


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


 


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


 


Clayton, Dubilier & Rice, Inc.


375 Park Avenue


New York, New York 
10152


Attention:  Mr. Kevin J. Conway


 


and


 


Debevoise & Plimpton


875 Third Avenue


New York, New York 
10022


Attention:  Franci J. Blassberg, Esq.


 


13

















 


(h)           Voluntary Agreement; No Conflicts.  Executive, Employer and Holding each
represent that they are entering into this Agreement voluntarily and that
Executive’s employment hereunder and each party’s compliance with the terms and
conditions of this Agreement will not conflict with or result in the breach by
such party of any agreement to which he or it is a party or by which he or
it or his or its properties or assets may be bound.


 


(i)            Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.


 


(j)            Headings.  The section and other headings
contained in this Agreement are for the convenience of the parties only and are
not intended to be a part hereof or to affect the meaning or
interpretation hereof.


 


(k)           Certain
Definitions.


 


“Affiliate”:  with respect to any Person, means
any other Person that, directly or indirectly through one or more
intermediaries, Controls, is Controlled by, or is under common Control with the
first Person, including but not limited to a Subsidiary of the first
Person, a Person of which the first Person is a Subsidiary, or
another Subsidiary of a Person of which the first Person is also
a Subsidiary.


 


“Control”:  with respect to any Person, means the
possession, directly or indirectly, severally or jointly, of the power to
direct or cause the direction of the management policies of such Person,
whether through the ownership of voting securities, by contract or credit arrangement,
as trustee or executor, or otherwise.


 


“Person”:  any natural person, firm, partnership,
limited liability company, association, corporation, company, trust, business
trust, governmental authority or other entity.


 


“Subsidiary”:  with respect to any Person, each corporation or other Person in
which the first Person owns or Controls, directly or indirectly, capital stock
or other ownership interests representing 50% or more of the combined
voting power of the outstanding voting stock or other ownership interests of
such corporation or other Person.


 


“Successor”: 
of a Person means a Person that succeeds to the first Person’s
assets and liabilities by merger, liquidation, dissolution or otherwise by
operation of law, or a Person to which all or substantially all the assets
and/or business of the first Person are transferred.


 


14

















 


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


 


 


	
   

  	
  RIVERWOOD INTERNATIONAL CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Wayne E. Juby

  	
   

  
	
   

  	
   

  	
  Name:  Wayne E. Juby

  
	
   

  	
   

  	
  Title: Senior Vice President, Human Resources

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RIVERWOOD HOLDING, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Wayne E. Juby

  	
   

  
	
   

  	
   

  	
  Name:  Wayne E. Juby

  
	
   

  	
   

  	
  Title:  Senior Vice President,
  Human Resources

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Executive:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Daniel J. Blount

  	
   

  



 


15

















 


Schedule I


 


Annual Synergy Achievement Award


(all $ are
millions)


 


Synergy Award Schedule


 


	
  Amount

  	
   

  	
  Percent

  	
   

  	
  Bonus

  	
   

  
	
  $

  	
  51.6

  	
   

  	
  100

  	
  %

  	
  $

  	
  2.0

  	
   

  
	
  $

  	
  46.4

  	
   

  	
  90

  	
  %

  	
  $

  	
  1.8

  	
   

  
	
  $

  	
  41.3

  	
   

  	
  80

  	
  %

  	
  $

  	
  1.6

  	
   

  
	
  $

  	
  28.4

  	
   

  	
  55

  	
  %

  	
  $

  	
  1.1

  	
   

  
	
  $

  	
  25.8

  	
   

  	
  50

  	
  %

  	
  $

  	
  1.0

  	
   

  



 


Synergy achievement over
$51.6 earns additional bonus accruing at the rate of 5 cents per dollar for
synergies between $51.6 and $54.1; 10 cents per dollar for synergies achieved
between $54.1 and $56.6; and 20 cents per dollar for synergies achieved between
$56.6 and $59.1.  For the achievement of
synergies over $59.1, the Synergy Award Committee may, in its discretion, grant
additional awards.


 


For the first 10%
increase in the first two years in synergy achieved, an additional 10% bonus on
the $2.0 target bonus will be earned.


 


	
  Year 1

  	
   

  	
  Year 2

  	
   

  	
  Year 3

  	
   

  	
  Total

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  $

  	
  18.1

  	
   

  	
  $

  	
  20.0

  	
   

  	
  $

  	
  13.5

  	
   

  	
  $

  	
  51.6

  	
   

  
												



 


•      Year 1 – Synergies achieved at $19.9; an
additional $0.2 is earned.


•      Year 2 – Synergies achieved at $22.0; an
additional $0.2 is earned.


 


16

















 


Schedule II


 


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.


 


17