**Exhibit10.19**

 

EMPLOYMENT AGREEMENT

 

ThisEMPLOYMENT AGREEMENT is entered into as of September 8, 2003 by and amongGraphic Packaging International, Inc., a Delaware corporation (“Employer”),Graphic Packaging Corporation, a Delaware corporation (“GPC”) and John T.Baldwin (“Executive”).

 

W I T N E S S E T H :

 

WHEREAS,Employer desires to employ Executive as its Senior Vice President and ChiefFinancial Officer on the terms and conditions set forth herein;

 

WHEREAS,Executive desires to accept such employment on the terms and conditions setforth herein;

 

WHEREAS,each of Employer, GPC and Executive agrees that Executive will havea prominent role in the management of the business, and the development ofthe goodwill, of Employer and its Affiliates (as defined below) and willestablish and develop relations and contacts with the principal customers andsuppliers of Employer and its Affiliates in the United States and the rest ofthe world, all of which constitute valuable goodwill of, and could be used by Executiveto compete unfairly with, Employer and its Affiliates;

 

WHEREAS,(i) in the course of his employment with Employer, Executive willobtain confidential and proprietary information and trade secrets concerningthe business and operations of Employer and its Affiliates in the United Statesand the rest of the world that could be used to compete unfairly with Employerand its Affiliates; (ii) the covenants and restrictions containedin Sections 8 through 13, inclusive, are intended to protect thelegitimate interests of Employer and its Affiliates in their respectivegoodwill, trade secrets and other confidential and proprietary information; and(iii) Executive desires to be bound by such covenants andrestrictions;

 

NOW,THEREFORE, in consideration of the premises and the mutual covenants andpromises contained herein and for other good and valuable consideration,Employer, GPC and Executive hereby agree as follows:

 

# 1              Agreement to Employ.  Upon the terms and subject to the conditionsof this Agreement, Employer hereby employs Executive, and Executive herebyaccepts employment by Employer.

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# 2              Term;Position and Responsibilities.

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## (a)           Termof Employment.  Unless Executive’semployment shall sooner terminate pursuant to Section 7, Employer shallemploy Executive for a term

 

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## commencing on September 8, 2003 and ending on thethird anniversary of September 8, 2003 (the “Initial Term”).  Effective upon the expiration of the InitialTerm and of each Additional Term (as defined below), Executive’s employment hereundershall be deemed to be automatically extended, upon the same terms andconditions, for an additional period of one year (each, an “Additional Term”),in each such case, commencing upon the expiration of the Initial Term orthe then current Additional Term, as the case may be, unless Employer, at least180 days prior to the expiration of the Initial Term or such AdditionalTerm, shall give written notice (a ”Non-Extension Notice”) toExecutive of its intention not to extend the Employment Period (as definedbelow) hereunder, provided that a Non-Extension Notice shallnot constitute a notice to Executive of the termination of his employmentby Employer unless such notice specifically provides for such termination ofemployment and the specific date thereof. The period during which Executive is employed pursuant to thisAgreement, including any extension thereof in accordance with the precedingsentence, shall be referred to as the “Employment Period”.

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## (b)           Positionand Responsibilities.  During theEmployment Period, Executive shall serve as Senior Vice President and ChiefFinancial Officer of Employer and have such duties and responsibilities as arecustomarily assigned to individuals serving in such position and such otherduties consistent with Executive’s title and position as the Board of Directorsof Employer (“Employer’s Board”) specifies from time to time.  Executive shall report to the Company’sPresident 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) andabsence for sickness or similar disability and (ii) to the extentthat it does not interfere with the performance of Executive’s dutieshereunder, (A) such reasonable time as may be devoted to service onboards of directors of other corporations and entities, subject to theprovisions of Section 9, and the fulfillment of civic responsibilities and(B) such reasonable time as may be necessary from time to time forpersonal financial matters) to the conscientious performance of the duties andresponsibilities of such position.  Ifso elected or designated by the respective shareholders thereof, Executiveshall serve as a member of the Boards of Directors of GPC, Employer andtheir respective Affiliates during the Employment Period without additionalcompensation.

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# 3              Base Salary.  As compensation for the services to beperformed by Executive during the Employment Period, Employer shall payExecutive a base salary at an annualized rate of $350,000, payable ininstallments on Employer’s regular payroll dates, and, in the event thatExecutive’s employment hereunder is terminated by death, for the remainder ofthe pay period in which death occurs and for one month thereafter.  Employer’s Board shall review Executive’sbase salary annually during the period of his employment hereunder and, in itssole discretion, Employer’s Board may increase (but may not decrease) such basesalary from time to time based upon the performance of Executive, the financialcondition of Employer, prevailing industry salary levels and such other factorsas Employer’s Board shall consider relevant. (The annual base salary

 

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# payable to Executive under this Section 3, as thesame may be increased from time to time and without regard to any reductiontherefrom in accordance with the next sentence, shall hereinafter be referredto as the “Base Salary”.)  The BaseSalary payable under this Section 3 shall be reduced to the extent thatExecutive elects to defer such Base Salary under the terms of any deferredcompensation, savings plan or other voluntary deferral arrangement that may bemaintained or established by Employer.

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# 4              Incentive Compensation Arrangements. During the Employment Period, Executive shall participate in Employer’sincentive compensation programs for its senior executives existing from time totime, at a level commensurate with his position and duties with Employerand based on such performance targets as may be established from time to timeby Employer’s Board or a committee thereof.  For 2003, Executive’s actual annual bonus shall not be less than$100,000.  For 2004, Executive’saggregate annual target bonus opportunity shall be 70% of Base Salary.

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# 5              Employee Benefits.  During the Employment Period, employeebenefits, including life, medical, dental, accidental death and dismemberment,business travel accident, prescription drug and disability insurance, shall beprovided to Executive in accordance with the programs of Employer thenavailable to its senior executives, as the same may be amended and in effectfrom time to time.  Executive shall alsobe entitled to participate in all of Employer’s profit sharing, pension,retirement, deferred compensation and savings plans, as the same may be amendedand in effect from time to time, applicable to senior executives ofEmployer.  The benefits referred to inthis Section 5 shall be provided to Executive on a basis that iscommensurate with Executive’s position and duties with Employer hereunder andthat is no less favorable than that of similarly situated employees ofEmployer.

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# 6              Perquisitesand Expenses.

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## (a)           General.  During the Employment Period, Executiveshall be entitled to the perquisites set forth on Schedule I hereto.

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## (b)           BusinessTravel, Lodging, etc.  Employershall reimburse Executive for reasonable travel, lodging, meal and otherreasonable expenses incurred by him in connection with his performance ofservices hereunder upon submission of evidence, satisfactory to Employer, ofthe incurrence and purpose of each such expense and otherwise in accordancewith Employer’s business travel reimbursement policy applicable to its seniorexecutives as in effect from time to time.

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## (c)           Vacation.  During the Employment Period, Executiveshall be entitled to, (1) for the period beginning on the date hereof andending on December 31, 2003, two weeks of vacation and (2) beginning in 2004, anumber of weeks of paid vacation on an annualized basis, without carryover accumulation,equal to the greater of (i) four weeks

 

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## and (ii) the number of weeks of paidvacation per year applicable to senior executives of Employer in accordancewith its vacation policy as in effect from time to time.

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## (d)           Relocation.  Employer shallreimburse Executive for reasonable and customary relocation expenses incurredby him in connection with his move to the Atlanta, GA, area upon submission ofevidence, satisfactory to Employer, of the incurrence and purpose of suchexpenses and otherwise in accordance with Employer’s relocation policyapplicable to its senior executives as in effect from time to time.

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# 7              Terminationof Employment.

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## (a)           TerminationDue to Death or Disability.  In theevent that Executive’s employment hereunder terminates due to death or isterminated by Employer due to Executive’s Disability (as defined below), notermination benefits shall be payable to or in respect of Executive except asprovided in Section 7(f)(ii).  Forpurposes of this Agreement, “Disability” shall mean a physical or mentaldisability that prevents or would prevent the performance by Executive of hisduties hereunder for a continuous period of six months or longer.  The determination of Executive’s Disabilityshall (i) be made by an independent physician who is reasonablyacceptable to Employer and Executive (or his representative), (ii) befinal and binding on the parties hereto and (iii) be based on suchcompetent medical evidence as shall be presented to such independent physicianby Executive and/or Employer or by any physician or group of physicians orother competent medical experts employed by Executive and/or Employer to advisesuch independent physician.

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## (b)           Terminationby Employer for Cause.  Executivemay be terminated for Cause (as defined below) by Employer, providedthat Executive shall be permitted to attend a meeting of Employer’s Boardwithin 30 days after delivery to him of a Notice of Termination (asdefined below) pursuant to this Section 7(b) to explain why he should notbe terminated for Cause and, if following any such explanation by Executive,Employer’s Board determines that Employer does not have Cause to terminateExecutive’s employment, any such prior Notice of Termination delivered toExecutive shall thereupon be withdrawn and of no further force or effect.  “Cause” shall mean (i) thewillful failure of Executive substantially to perform his duties hereunder(other than any such failure due to Executive’s physical or mental illness) orother willful and material breach by Executive of any of his obligationshereunder or under any option agreement or other incentive award agreement,after a written demand for substantial performance has been delivered, anda reasonable opportunity to cure has been given, to Executive byEmployer’s Board, which demand identifies in reasonable detail the manner inwhich Employer’s Board believes that Executive has not substantially performedhis duties or has breached his obligations, (ii) Executive’sengaging in willful and serious misconduct that has caused or is reasonablyexpected to result in material injury to

 

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## Employer or any of its Affiliates or (iii) Executive’sconviction of, or entering a plea of guilty or nolocontendereto, a crime that constitutes a felony.

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## (c)           TerminationWithout Cause.  A termination“Without Cause” shall mean a termination of employment by Employer otherthan due to Disability as described in Section 7(a) or for Cause asdescribed in Section 7(b).

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## (d)           Terminationby Executive.  Executive mayterminate his employment for any reason. A termination of employment by Executive for “Good Reason” shallmean a termination by Executive of his employment with Employer within 30 daysfollowing the occurrence, without Executive’s consent, of any of the followingevents: (i) the assignment to Executive of duties that aresignificantly different from, and that result in a substantial diminutionof, the duties that he is to assume on the date hereof, (ii) thefailure of Employer to obtain the assumption of this Agreement by any Successor(as defined below) to Employer as contemplated by Section 14, (iii) areduction in the rate of Executive’s Base Salary, (iv) a materialbreach by Employer of any of its obligations hereunder or by GPC of any of itsobligations under any option agreement or other incentive award agreement or (v) deliveryto Executive of a Non-Extension Notice, provided that, in thecase of any of clauses (i), (iii) or (iv), within 30 daysfollowing the occurrence of any of the events set forth therein, Executiveshall have delivered written notice to Employer of his intention to terminatehis employment for Good Reason, which notice specifies in reasonable detail thecircumstances claimed to give rise to Executive’s right to terminate hisemployment for Good Reason, and Employer or GPC, as the case may be, shall nothave cured such circumstances to the reasonable satisfaction of Executive.

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## (e)           Notice ofTermination.  Any termination byEmployer pursuant to Section 7(a), 7(b) or 7(c), or by Executivepursuant to Section 7(d), shall be communicated by a written Noticeof Termination addressed to the other parties to this Agreement.  A ”Notice of Termination” shall meana notice stating that Executive’s employment with Employer has been orwill be terminated.

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## (f)            Payments Upon Certain Terminations.

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### (i)            In the event ofa termination of Executive’s employment by Employer Without Cause ora termination by Executive of his employment for Good Reason during theEmployment Period, Employer shall pay to Executive (or, following his death, toExecutive’s beneficiaries):

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#### (A)          his Base Salary, whichshall be payable in installments on Employer’s regular payroll dates, for theperiod  (the “Severance Period”)beginning on the Date of Termination (as defined below) and ending on the later

 

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#### to occur of (i) the last day of the Initial Term or,if applicable, the then current Additional Term and (ii) the first anniversaryof the Date of Termination, and

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#### (B)           the product of (1) the amount of incentive compensationthat would have been payable to Executive for the calendar year in which theDate of Termination occurs if Executive had remained employed for the entirecalendar year and assuming that all applicable performance targets had beenachieved, multiplied by (2) a fraction, the numerator of whichis equal to the number of days Executive is employed by Employer during thecalendar year in which the Date of Termination occurs and the denominator ofwhich is equal to, (i) if the Date of Termination occurs in 2003, 115, and (ii)if the Date of Termination occurs in a year other than 2003, 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 GPC, Employer or any of their respective Affiliatesapplicable to Executive, as in effect on the Date of Termination;

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providedthat Employer may, at any time, pay to Executive, in a single lump sum andin satisfaction of Employer’s obligations under clauses (A) and (B)of this Section 7(f)(i), an amount equal to (x) theinstallments of the Base Salary then remaining to be paid to Executive pursuantto clause (A) above, and the amount, if any, then remaining to be paid toExecutive pursuant to clause (B) above, less (y) theamount, if any, remaining to be paid to Executive pursuant to any plan, policy,program or practice identified under clause (C) above.

 

IfExecutive’s employment shall terminate and he is entitled to receive continuedpayments of his Base Salary under clause (A) of this Section 7(f)(i),Employer shall (x) continue to provide to Executive during theSeverance Period the life, medical, dental and prescription drug benefitsreferred to in Section 5 (the “Continued Benefits”) and (y) reimburseExecutive for expenses incurred by him for outplacement and career counselingservices provided to Executive for an aggregate amount not in excess of thelesser of (i) $25,000 and (ii) 20% of Executive’s Base Salary.

 

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

 

### (ii)           If Executive’semployment shall terminate upon his death or Disability or if Employer shallterminate Executive’s employment for Cause or Executive shall

 

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### terminate hisemployment without Good Reason during the Employment Period, Employer shall payExecutive his full Base Salary through the Date of Termination; plus, in thecase of termination upon Executive’s death or Disability, if, as of the Date ofTermination, Employer has achieved the pro rated performance objectives forsuch calendar year (determined as provided in Section 7(f)(i)), the ProRata Bonus for the portion of the calendar year preceding Executive’s Date ofTermination (exclusive of any time between the onset of a physical ormental disability that prevents the performance by Executive of his dutieshereunder and the resulting Date of Termination); plus, in the case oftermination upon Executive’s death, his full Base Salary for the remainder ofthe pay period in which death occurs and for one month thereafter, as providedin Section 3.

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### (iii)          Except as specificallyset forth in this Section 7(f), no benefits payable to Executive under anyotherwise applicable plan, policy, program or practice of Employer shall belimited by this Section 7(f), provided that (x) Executiveshall not be entitled to receive any payments or benefits under any such plan,policy, program or practice providing any bonus or incentive compensation (andthe provisions of this Section 7(f) shall supersede the provisions of anysuch plan, policy, program or practice), and (y) the amount, ifany, paid or payable to Executive under the terms of any such plan, policy,program or practice relating to severance shall reduce the amounts payableunder Section 7(f)(i) as provided in clause (C) thereof.

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## (g)           Dateof Termination.  As used in thisAgreement, the term “Date of Termination” shall mean (i) ifExecutive’s employment is terminated by his death, the date of his death, (ii) ifExecutive’s employment is terminated by Employer for Cause, the date on whichNotice of Termination is given as contemplated by Section 7(e) or, iflater, the date of termination specified in such Notice, and (iii) ifExecutive’s employment is terminated by Employer Without Cause, due toExecutive’s Disability or by Executive for any reason, the date that is30 days after the date on which Notice of Termination is given ascontemplated by Section 7(e) or, if no such Notice is given, 30 daysafter the date of termination of employment.

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## (h)           Resignationupon Termination.  Effective as ofany Date of Termination under this Section 7 or otherwise as of the dateof Executive’s termination of employment with Employer, Executive shall resign,in writing, from all Board memberships and other positions then held by himwith GPC, Employer and their respective Affiliates.

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# 8              UnauthorizedDisclosure.  During the period ofExecutive’s employment with Employer and the ten-year period following anytermination of such employment, without the prior written consent of Employer’sBoard or its authorized representative, except to the extent required by anorder of a court having jurisdiction or under subpoena from an appropriategovernment agency, in which event, Executive shall use his best efforts to consultwith Employer’s Board prior to responding to any such order or subpoena, andexcept as required in the performance of his duties hereunder, Executive

 

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# shall not disclose any confidential or proprietarytrade secrets, customer lists, drawings, designs, information regarding productdevelopment, marketing plans, sales plans, manufacturing plans, managementorganization information (including but not limited to data and otherinformation relating to members of the Board of Directors of GPC, Employer orany of their respective Affiliates or to management of GPC, Employer or any oftheir respective Affiliates), operating policies or manuals, business plans,financial records, packaging design or other financial, commercial, business ortechnical information (a) relating to GPC, Employer or any of theirrespective Affiliates or (b) that GPC, Employer or any of theirrespective Affiliates may receive belonging to suppliers, customers or otherswho do business with GPC, Employer or any of their respective Affiliates(collectively, “Confidential Information”) to any third person unless suchConfidential Information has been previously disclosed to the public or is inthe public domain (other than by reason of Executive’s breach of thisSection 8).

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# 9              Non-Competition.  During the period of Executive’s employmentwith Employer and, following any termination thereof, the period ending on thelater of (a) the first anniversary of the Date of Termination and (b) thelast 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, principalor stockholder (other than a holder of less than 1% of the outstandingvoting shares of any publicly held company) of, The Mead Corporation, any ofits subsidiaries or any other current or future direct competitor (or any ofsuch direct competitor’s subsidiaries or affiliates) in the paperboard andpaperboard packaging business of GPC, Employer or any of their respectivesubsidiaries, as determined in good faith by Employer’s Board.  For purposes of this Section 9, thephrase employment “in a similar executive capacity” shall mean employment inany position in connection with which Executive has or reasonably would beviewed as having powers and authorities with respect to any other Person or anypart of the business thereof that are substantially similar, with respectthereto, to the powers and authorities assigned to the Senior Vice President,Chief Financial Officer or any superior executive officer of Employer in the By-Lawsof Employer as in effect on the date hereof, a copy of the relevantportions of which has been delivered to Executive on or before the date hereof,and which Executive hereby confirms that he has reviewed.

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# 10            Non-Solicitationof Employees. During the period of Executive’s employment with Employerand, following any termination thereof, the period ending on the last day ofthe Severance Period (such periods collectively, the “Restriction Period”),Executive shall not, directly or indirectly, for his own account or for theaccount of any other Person anywhere in the United States or Europe, (i) solicitfor employment, employ or otherwise interfere with the relationship of GPC,Employer or any of their respective subsidiaries with, any person who at anytime during the six months preceding such solicitation, employment orinterference is or was employed by or otherwise engaged to perform services forGPC, Employer or any of their respective subsidiaries, other than

 

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# any such solicitation or employment during Executive’semployment with GPC and Employer on behalf of GPC, and Employer, or (ii) induceany employee of GPC, Employer or any of their respective Affiliates who isa member of management to engage in any activity which Executive isprohibited from engaging in under any of Sections 8, 9, 10 or 11 orto terminate his employment with Employer.

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# 11            Non-Solicitationof Customers.  During theRestriction Period, Executive shall not, directly or indirectly, for his ownaccount or for the account of any other Person anywhere in the United States orEurope, solicit or otherwise attempt to establish any business relationship ofa nature that is competitive with the paperboard and paperboard packagingbusiness of GPC, Employer or any of their respective subsidiaries, asdetermined in good faith by Employer’s Board with any Person who is or wasa customer, client or distributor of GPC, Employer or any of theirrespective Affiliates at any time during which Executive was employed byEmployer (in the case of any such activity during such time) or during thetwelve-month period preceding the Date of Termination (in the case of any suchactivity after the Date of Termination), other than any such solicitation onbehalf of GPC, Employer or any of their respective Affiliates duringExecutive’s employment with Employer.

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# 12            Returnof Documents.  In the event of thetermination of Executive’s employment for any reason, Executive shall deliverto Employer all of (a) the property of each of GPC, Employer andtheir respective Affiliates and (b) the non-personal documents anddata of any nature and in whatever medium of each of GPC, Employer and theirrespective Affiliates, and he shall not take with him any such property,documents or data or any reproduction thereof, or any documents containing orpertaining to any Confidential Information. Whether documents or data are “personal” or “non-personal” shallbe determined as follows:  Executiveshall present any documents or data that he wishes to take with him to thechief legal officer of Employer for his review.  The chief legal officer shall make an initial determinationwhether any such documents or data are personal or non-personal, and withrespect to such documents or data that he determines to be non-personal, shallnotify Executive either that such documents or data must be retained byEmployer or that Employer must make and retain a copy thereof beforeExecutive may take such documents or data with him.  Any disputes as to the personal or non-personal nature of anysuch documents or data shall first be presented to the Chairman of Employer’sBoard or to another representative designated by Employer’s Board, and if suchdisputes are not promptly resolved by Executive and the Chairman or suchrepresentative, such disputes shall be resolved through arbitration pursuant toSection 17(b).

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# 13            InjunctiveRelief with Respect to Covenants; Forum, Venue and Jurisdiction.  Executive acknowledges and agrees that thecovenants, obligations and agreements of Executive contained inSections 8, 9, 10, 11, 12 and 13 relate to special, unique and extraordinarymatters and that a violation of any of the terms of such

 

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# covenants, obligations or agreements will causeEmployer irreparable injury for which adequate remedies are not available atlaw.  Therefore, Executive agrees thatEmployer shall be entitled to an injunction, restraining order or such otherequitable relief (without the requirement to post bond) as a court ofcompetent jurisdiction may deem necessary or appropriate to restrain Executivefrom committing any violation of such covenants, obligations oragreements.  These injunctive remediesare cumulative and in addition to any other rights and remedies Employer mayhave.  Employer, GPC and Executivehereby irrevocably submit to the exclusive jurisdiction of the courts of theState 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 injunctiveremedies set forth in this Section 13 and the interpretation andenforcement of Sections 8, 9, 10, 11, 12 and 13 insofar as suchinterpretation and enforcement relate to any request or application forinjunctive relief in accordance with the provisions of this Section 13,and the parties hereto hereby irrevocably agree that (a) the soleand exclusive appropriate venue for any suit or proceeding relating solely tosuch injunctive relief shall be in such a court, (b) allclaims with respect to any request or application for such injunctive reliefshall be heard and determined exclusively in such a court, (c) anysuch court shall have exclusive jurisdiction over the person of such partiesand over the subject matter of any dispute relating to any request orapplication for such injunctive relief, and (d) each hereby waivesany and all objections and defenses based on forum, venue or personal orsubject matter jurisdiction as they may relate to an application for suchinjunctive relief in a suit or proceeding brought before such a courtin accordance with the provisions of this Section 13.  All disputes not relating to any request orapplication for injunctive relief in accordance with this Section 13 shallbe resolved by arbitration in accordance with Section 17(b).

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# 14            Assumptionof Agreement.  Employer shallrequire any Successor thereto, by agreement in form and substance reasonablysatisfactory to Executive, to expressly assume and agree to perform thisAgreement in the same manner and to the same extent that Employer would berequired to perform it if no such succession had taken place.  Failure of Employer to obtain such agreementprior to the effectiveness of any such succession shall be a breach ofthis Agreement and shall entitle Executive to compensation from Employer in thesame amount and on the same terms as Executive would be entitled hereunder ifEmployer had terminated Executive’s employment Without Cause as described inSection 7, except that for purposes of implementing the foregoing, thedate on which any such succession becomes effective shall be deemed the Date ofTermination.

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# 15            EntireAgreement.  This Agreement(including the Exhibit hereto) constitutes the entire agreement among theparties 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 suchsubject matter (including but not limited to

 

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# those made to or with Executive by any other Personand those contained in any prior employment, consulting or similar agreemententered into by Executive and Employer or any predecessor thereto or Affiliatethereof) are merged herein and superseded hereby.

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# 16            Indemnification.  Employer hereby agrees that it shallindemnify and hold harmless Executive to the fullest extent permitted byDelaware law from and against any and all liabilities, costs, claims andexpenses, including all costs and expenses incurred in defense of litigation(including attorneys’ fees), arising out of the employment of Executivehereunder, except to the extent arising out of or based upon the grossnegligence 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 finaldisposition of such litigation upon receipt by Employer of (a) awritten request for payment, (b) appropriate documentationevidencing the incurrence, amount and nature of the costs and expenses forwhich payment is being sought, and (c) an undertaking adequateunder Delaware law made by or on behalf of Executive to repay the amounts sopaid if it shall ultimately be determined that Executive is not entitled to beindemnified by Employer under this Agreement, including but not limited to asa result of such exception.

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# 17            Miscellaneous.

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## (a)           BindingEffect; Assignment.  This Agreementshall be binding on and inure to the benefit of Employer, GPC and theirrespective successors and permitted assigns. This Agreement shall also be binding on and inure to the benefit ofExecutive and his heirs, executors, administrators and legalrepresentatives.  This Agreement shallnot be assignable by any party hereto without the prior written consent of theother parties hereto, except as provided pursuant to thisSection 17(a).  Each of GPC andEmployer may effect such an assignment without prior written approval ofExecutive upon the transfer of all or substantially all of its business and/orassets (by whatever means), provided that the Successor to Employershall expressly assume and agree to perform this Agreement in accordance withthe provisions of Section 14.

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## (b)           Arbitration.  Any dispute or controversy arising under orin connection with this Agreement (except in connection with any request orapplication for injunctive relief in accordance with Section 13) shall beresolved by binding arbitration.  Thearbitration shall be held in the city of Atlanta, Georgia and except to theextent inconsistent with this Agreement, shall be conducted in accordance withthe Commercial Arbitration Rules of the American Arbitration Association thenin effect at the time of the arbitration, and otherwise in accordance withprinciples which would be applied by a court of law or equity.  The arbitrator shall be acceptable to bothEmployer and Executive.  If the partiescannot agree on an acceptable arbitrator, the dispute shall be heard bya panel of three arbitrators, one appointed by Employer, one appointed byExecutive, and the third appointed by the other two arbitrators.  All expenses of

 

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## arbitration shall be borne by the party who incurs theexpense, 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 suchdispute or controversy, all such expenses shall be borne by Employer.

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## (c)           GoverningLaw.  This Agreement shall begoverned by and construed in accordance with the laws of the State of New Yorkwithout reference to principles of conflicts of laws, provided that theindemnification provisions contained in Section 16 shall be governed byand construed in accordance with the laws of the State of Delaware.

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

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## (e)           Amendments.  No provision of this Agreement may bemodified, waived or discharged unless such modification, waiver or discharge isapproved by Employer’s Board or a Person authorized thereby and is agreedto in writing by Executive and, in the case of any such modification, waiver ordischarge affecting the rights or obligations of GPC, is approved by the Boardof Directors of GPC or a Person authorized thereby.  No waiver by any party hereto at any time ofany breach by any other party hereto of, or compliance with, any condition orprovision of this Agreement to be performed by such other party shall be deemeda waiver of similar or dissimilar provisions or conditions at the same orat any prior or subsequent time.  Nowaiver of any provision of this Agreement shall be implied from any course ofdealing between or among the parties hereto or from any failure by any partyhereto to assert its rights hereunder on any occasion or series of occasions.

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

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## (g)           Notices.  Any notice or other communication requiredor permitted to be delivered under this Agreement shall be (i) inwriting, (ii) delivered personally, by courier service or bycertified or registered mail, first-class postage prepaid and returnreceipt requested, (iii) deemed to have been received on the dateof delivery or, if so mailed, on the third business day after the mailingthereof, and (iv) addressed as follows (or to such other address asthe party entitled to notice shall hereafter designate in accordance with theterms hereof):

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#### (A)          If to Employer, to itat:

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Graphic Packaging International Corporation

814 Livingston Court

Marietta, Georgia  30067

Attention:  General Counsel

 

#### (B)           if to GPC, to it at:

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c/o Graphic Packaging InternationalCorporation

814 Livingston Court

Marietta, Georgia  30339

Attention:  General Counsel

 

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

####  

Copies of anynotices or other communications given under this Agreement shall also be givento:

 

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.

 

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## (h)           VoluntaryAgreement; No Conflicts.  Executive,Employer and GPC each represent that they are entering into this Agreementvoluntarily and that Executive’s employment hereunder and each party’scompliance with the terms and conditions of this Agreement will not conflictwith or result in the breach by such party of any agreement to which he or itis a party or by which he or it or his or its properties or assets may bebound.

##  

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

##  

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

##  

## (k)           Certain Definitions.

##  

“Affiliate”:  with respect to any Person, meansany other Person that, directly or indirectly through one or moreintermediaries, Controls, is Controlled by, or is under common Control with thefirst Person, including but not limited to a Subsidiary of the firstPerson, a Person of which the first Person is a Subsidiary, oranother Subsidiary of a Person of which the first Person is alsoa Subsidiary.

 

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

 

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

 

“Subsidiary”:  withrespect to any Person, each corporation or other Person in which the firstPerson owns or Controls, directly or indirectly, capital stock or otherownership interests representing 50% or more of the combined voting powerof the outstanding voting stock or other ownership interests of suchcorporation or other Person.

 

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

 

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IN WITNESS WHEREOF, Employer and GPC haveduly executed this Agreement by their authorized representatives, and Executivehas hereunto set his hand, in each case effective as of the date first abovewritten.

 
|   | GRAPHIC PACKAGING INTERNATIONAL, INC.             |
|--------|---------------------------------------------------|
|   |                                              |
|   | By:                                               |         /s/ Wayne E. Juby |   |
|   | Name:  Wayne E. Juby                         |
|   | Title:  Senior VP, Human  Resources          |
|   |                                              |
|   |                                              |
|   | GRAPHIC PACKAGING CORPORATION                     |
|   |                                              |
|   | By:                                               |         /s/ Wayne E. Juby |   |
|   | Name:  Wayne E. Juby                         |
|   | Title:  Senior VP, Human  Resources          |
|   |                                              |
|   |                                              |
|   | Executive:                                        |
|   |                                              |
|   |                                              |
|   |      /s/ John T. Baldwin |   |
|        |                                                   |  |  |  |

 

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Schedule I

 

Perquisites

 

# 1              Annualexecutive physical.

#  

# 2                                          Reimbursementup to $1,000 annually for expenses relating to income tax preparation plusadditional fees if incurred on account of job-related circumstances and thecost of representation by return preparer during any audit.

#  

# 3                                          Reimbursementfor expenses incurred for financial and estate planning services of up to$5,000 for expenses incurred in the first calendar year services are utilizedand up to $2,500 for expenses incurred in calendar years thereafter.

#  

# 4                                          Reimbursementfor initiation fees (“grossed up” for federal and state income taxes) and duesfor one luncheon or city club.

#  

# 5                                          Aftercompleting one year of service, and subject to the advance approval of thePresident and CEO, reimbursement for initiation fees (“grossed up” for federaland state income taxes) and dues for one country club.

 

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