**Exhibit10.8**

 

FIRST AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

ThisFIRST AMENDED AND RESTATED EMPLOYMENT AGREEMENT is entered into as ofAugust 8, 2003 by and among Riverwood International Corporation, aDelaware corporation (“Employer”), Riverwood Holding, Inc., a Delawarecorporation to be renamed Graphic Packaging Corporation (“Holding”) and DanielJ. Blount (“Executive”).

 

W I T N E S S E T H :

 

WHEREAS,Employer currently employs Executive pursuant to an Employment Agreement datedas 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 InternationalCorporation (“GPIC”) pursuant to which GPIC will become a wholly owned subsidiaryof Holding (such transaction, the “Merger”) on the Effective Date (as such termis defined in the Merger Agreement);

 

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

 

NOW,THEREFORE, in consideration of the promises and mutual covenants containedherein and for other good and valuable consideration, Employer and Executivehereby agree and the Prior Agreement is hereby amended and restated in itsentirety, as follows:

 

# 1              Agreementto Employ.  Upon the terms andsubject to the conditions of this Agreement, Employer hereby employs Executive,and Executive hereby accepts employment by Employer.

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# 2              Term; Positionand Responsibilities.

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## (a)           Term of Employment.  Unless Executive’s employment shall soonerterminate pursuant to Section 7, Employer shall employ Executive fora term commencing on the Effective Date and ending on the thirdanniversary of that date (the “Employment Period”).

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## (b)           Position and Responsibilities.  During the Employment Period, Executiveshall serve as Senior Vice President, Integration of Employer and shall have(i) responsibility for the achievement of synergies in connection with thecombination of Employer’s business with GPIC’s business following the Merger, (ii)responsibility for the operational aspects of Employer’s information technologyfunction, (iii) responsibility for the management of the integration staff ofEmployer and (iv) such other 

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## duties consistent with Executive’s title and positionas the Board of Directors of Employer (“Employer’s Board”) specifies from timeto time.  Executive shall report to theCompany’s President and Chief Executive Officer.  Executive shall devote all of his skill, knowledge and workingtime (except for (i) vacation time as set forth inSection 6(c) and absence for sickness or similar disability and (ii) tothe extent that it does not interfere with the performance of Executive’sduties hereunder, (A) such reasonable time as may be devoted toservice on boards of directors of other corporations and entities, subject tothe provisions of Section 9, and the fulfillment of civic responsibilitiesand (B) such reasonable time as may be necessary from time to timefor personal financial matters) to the conscientious performance of the dutiesand 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 withoutadditional compensation.

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# 3              BaseSalary.  As compensation for the services tobe performed by Executive during the Employment Period, Employer shall payExecutive a base salary at an annualized rate of $325,000, 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.

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

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## (a)           Synergy Achievement Award.  For each of the first three years, measuredas 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 thisSection 4(a).

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

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

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### (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 theSynergy Review Committee and the compensation committee of Employer (the“Compensation Committee”), the Synergy Achievement Award (if any) earned inrespect 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 totalsynergies achieved since the Effective Date reaches $59.1 million and (ii) thelast day of the third Award Year.

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### (v)           The Synergy Achievement Award issubject to such conditions as the Compensation Committee reasonably determinesnecessary to prevent the treatment of the Synergy Achievement Award as otherthan “performance based compensation” within the meaning ofSection 162(m)(4)(C) of the Internal Revenue Code of 1986, as amended (the“Code”).

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## (b)           Equity Awards

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### (i)            Option Exchange.  Executive shall surrender 1,200 unvestedservice options to purchase Class A Common Stock of Employer (“ServiceOptions”) and 3,000 unvested performance options to purchase Class A Common Stockof Employer (“Performance Options”) granted to Executive pursuant to theRiverwood Holding, Inc. Stock Incentive Plan (the “1996 Stock Incentive Plan”),3,277 unvested Performance Options granted to Executive pursuant to theRiverwood Holding, Inc. Supplemental Long Term Incentive Plan (the “1999 LTIP”)and 17,136 unvested Service Options granted to Executive pursuant to theRiverwood Holding, Inc. 2002 Stock Incentive Plan (the “2002 Stock Plan”) (allsuch 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 seniorexecutives of Employer and (ii) 7,384 Restricted Stock Units (the “2003Exchange Restricted Units”) pursuant to the 2003 LTIP on terms substantiallysimilar to those provided to other senior executives of Employer.

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

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# 5              EmployeeBenefits.  During the EmploymentPeriod, employee benefits, including life, medical, dental, accidental deathand dismemberment, business travel accident, prescription drug and disabilityinsurance, shall be provided to Executive in accordance with the programs ofEmployer then available to its senior executives, as the same may be amendedand 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 maybe amended and 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              Perquisites andExpenses.

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

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## (b)           Professional Development.  Employer shall reimburse Executive forreasonable expenses incurred in connection with (i) continuing education forthe maintenance of Executive’s license as a Certified Public Accountant, (ii)Executive’s participation in the “World Class” Chief Financial OfficerEducation Program and (iii) Executive’s participation in educational programsrelevant to his responsibilities for the Employer’s information technologyfunction.

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## (c)           Business Travel, Lodging, etc.  Employer shall reimburse Executive forreasonable travel, lodging, meal and other reasonable expenses incurred by himin connection with his performance of services hereunder upon submission ofevidence, satisfactory to Employer, of the incurrence and purpose of each suchexpense and otherwise in accordance with Employer’s business travelreimbursement policy applicable to its senior executives as in effect from timeto time.

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## (d)           Vacation.  During the Employment Period, Executiveshall be entitled to a number of weeks of paid vacation on an annualizedbasis, without carryover accumulation, equal to the greater of (i) fourweeks and (ii) the number of weeks of paid vacation per yearapplicable to senior executives of Employer in accordance with its vacationpolicy as in effect from time to time.

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# 7              Termination of Employment.

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## (a)           Termination Due to Death orDisability.  In the event thatExecutive’s employment hereunder terminates due to death or is terminated byEmployer due to Executive’s Disability (as defined below), no terminationbenefits shall be payable to or in respect of Executive except as provided inSection 7(f)(ii).  For purposes ofthis Agreement, “Disability” shall mean a physical or mental disabilitythat prevents or would prevent the performance by Executive of his dutieshereunder 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 such 

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## competent medical evidence as shall be presented tosuch independent physician by Executive and/or Employer or by any physician orgroup of physicians or other competent medical experts employed by Executiveand/or Employer to advise such independent physician.

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## (b)           Termination by Employer for Cause.  Executive may be terminated for Cause (asdefined below) by Employer, provided that Executive shall be permittedto attend a meeting of Employer’s Board within 30 days after delivery tohim of a Notice of Termination (as defined below) pursuant to thisSection 7(b) to explain why he should not be terminated for Cause and, iffollowing any such explanation by Executive, Employer’s Board determines thatEmployer does not have Cause to terminate Executive’s employment, any suchprior Notice of Termination delivered to Executive shall thereupon be withdrawnand of no further force or effect. “Cause” shall mean (i) the willful failure of Executivesubstantially to perform his duties hereunder (other than any such failure dueto Executive’s physical or mental illness) or other willful and material breachby Executive of any of his obligations hereunder or under any option agreementor other incentive award agreement, after a written demand for substantialperformance has been delivered, and a reasonable opportunity to cure hasbeen given, to Executive by Employer’s Board, which demand identifies inreasonable detail the manner in which Employer’s Board believes that Executivehas not substantially performed his 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 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)           Termination Without Cause.  A termination “Without Cause” shallmean a termination of employment by Employer other than due to Disabilityas described in Section 7(a) or for Cause as described inSection 7(b).

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## (d)           Termination by Executive.  Executive may terminate his employment forany reason.  A termination ofemployment by Executive for “Good Reason” shall mean a termination byExecutive of his employment with Employer within 30 days following theoccurrence, without Executive’s consent, of any of the following events: (i) theassignment to Executive of duties that are significantly different from, andthat result in a substantial diminution of, the duties that he is toassume on the date hereof, (ii) the failure of Employer to obtainthe assumption of this Agreement by any Successor (as defined below) toEmployer as contemplated by Section 14, (iii) a reduction inthe rate of Executive’s Base Salary or (iv) a material breach byEmployer of any of its obligations hereunder or by Holding of any of itsobligations under any option agreement or other incentive award agreement, providedthat, in the case of any of clauses (i), (iii) or (iv), within30 days following the occurrence of any of the events set forth therein,Executive shall have delivered written notice to Employer of his intention toterminate his employment for Good Reason, which notice specifies in reasonabledetail the

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## circumstances claimed to give rise to Executive’sright to terminate his employment for Good Reason, and Employer or Holding, asthe case may be, shall not have cured such circumstances to the reasonablesatisfaction 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 UponCertain Terminations.

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### (i)            In the event of a terminationof Executive’s employment by Employer Without Cause or a termination byExecutive of his employment for Good Reason during the Employment Period or atermination of Executive’s employment as a result of the expiration of theEmployment Period, Employer shall pay to Executive (or, following his death, toExecutive’s beneficiaries):

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#### (A)          his Base Salary, which shall bepayable 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 theeighteen month anniversary of the Date of Termination, and

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#### (B)           any earned but unpaid SynergyAchievement Awards, payable promptly following such termination of employmentand a pro rata portion of the Synergy Achievement Award (the “Pro Rata SynergyAward”) that would have been payable to Executive for the Award Year thatincludes the Date of Termination, payable promptly following the calculationthereof, less

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#### (C)           the amount, if any, paid or payableto Executive under the terms of any severance plan, policy, program or practiceof Holding, Employer or any of their respective Affiliates applicable toExecutive, 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 

 

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shall (x) continueto provide to Executive during the Severance Period the life, medical, dentaland prescription drug benefits referred to in Section 5 (the “ContinuedBenefits”) and (y) reimburse Executive for expenses incurred by himfor outplacement and career counseling services provided to Executive for anaggregate amount not in excess of the lesser 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 which Executiveperforms services, including but not limited to consulting services.

 

### (ii)           If Executive’s employment shallterminate upon his death or Disability or if Employer shall terminateExecutive’s employment for Cause or Executive shall terminate his employmentwithout Good Reason during the Employment Period, Employer shall pay Executivehis full Base Salary through the Date of Termination; plus, in the case oftermination upon Executive’s death or Disability, (i) any earned but unpaidSynergy Achievement Award and (ii) the Pro Rata Synergy Award (determined asprovided in Section 7(f)(i)) for the portion of the Award Year precedingExecutive’s Date of Termination (exclusive of any time between the onset ofa physical or mental disability that prevents the performance by Executiveof his duties hereunder and the resulting Date of Termination); plus, in thecase of termination upon Executive’s death, his full Base Salary for theremainder of the pay period in which death occurs and for one month thereafter,as provided in Section 3.

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### (iii)          Except as specifically set forth inthis Section 7(f), no benefits payable to Executive under any otherwiseapplicable plan, policy, program or practice of Employer shall be limited bythis Section 7(f), provided that (x) Executive shallnot 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)           Date of Termination.  As used in this Agreement, the term “Date ofTermination” shall mean (i) if Executive’s employment is terminatedby his death, the date of his death, (ii) if Executive’s employmentis terminated by Employer for Cause, the date on which Notice of Termination isgiven as contemplated by Section 7(e) or, if later, the date oftermination specified in such Notice, and (iii) if Executive’semployment is terminated by Employer Without Cause, due to Executive’sDisability or by Executive for any reason, the date that is 30 days afterthe date on which Notice of

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## Termination is given as contemplated bySection 7(e) or, if no such Notice is given, 30 days after the dateof termination of employment.

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## (h)           Resignation upon Termination.  Effective as of any Date of Terminationunder this Section 7 or otherwise as of the date of Executive’stermination 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.

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# 8              Unauthorized Disclosure.  During the period of Executive’s employmentwith Employer and the ten-year period following any termination of suchemployment, without the prior written consent of Employer’s Board or itsauthorized representative, except to the extent required by an order ofa court having jurisdiction or under subpoena from an appropriategovernment agency, in which event, Executive shall use his best efforts toconsult with Employer’s Board prior to responding to any such order orsubpoena, 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 organizationinformation (including but not limited to data and other information relatingto members of the Board of Directors of Holding, Employer or any of theirrespective Affiliates or to management of Holding, Employer or any of theirrespective Affiliates), operating policies or manuals, business plans,financial records, packaging design or other financial, commercial, business ortechnical information (a) relating to Holding, Employer or any oftheir respective Affiliates or (b) that Holding, Employer or any oftheir respective Affiliates may receive belonging to suppliers, customers orothers who do business with Holding, Employer or any of their respectiveAffiliates (collectively, “Confidential Information”) to any third personunless such Confidential Information has been previously disclosed to thepublic or is in the public domain (other than by reason of Executive’s breachof this Section 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 and paperboardpackaging business of Holding, 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

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# substantially similar, with respect thereto, to thepowers and authorities assigned to the Senior Vice President, Finance****or any superior executive officer ofEmployer 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 Executiveon or before the date hereof, and which Executive hereby confirms that he hasreviewed.

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# 10            Non-Solicitation of Employees.  During the period of Executive’s employmentwith Employer and, following any termination thereof, the period ending on thelast day of the Severance Period (such periods collectively, the “RestrictionPeriod”), Executive shall not, directly or indirectly, for his own account orfor the account of any other Person anywhere in the United States or Europe, (i) solicitfor employment, employ or otherwise interfere with the relationship of Holding,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 forHolding, Employer or any of their respective subsidiaries, other than any suchsolicitation or employment during Executive’s employment with Holding andEmployer on behalf of Holding, and Employer, or (ii) induce anyemployee of Holding, 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-Solicitation of Customers.  During the Restriction Period, Executiveshall not, directly or indirectly, for his own account or for the account ofany other Person anywhere in the United States or Europe, solicit or otherwiseattempt to establish any business relationship of a nature that iscompetitive with the paperboard and paperboard packaging business of Holding,Employer or any of their respective subsidiaries, as determined in good faithby Employer’s Board with any Person who is or was a customer, client ordistributor of Holding, Employer or any of their respective Affiliates at anytime during which Executive was employed by Employer (in the case of anysuch activity during such time) or during the twelve-month period preceding theDate of Termination (in the case of any such activity after the Date ofTermination), other than any such solicitation on behalf of Holding, Employeror any of their respective Affiliates during Executive’s employment withEmployer.

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# 12            Return of Documents.  In the event of the termination ofExecutive’s employment for any reason, Executive shall deliver to Employer allof (a) the property of each of Holding, Employer and theirrespective Affiliates and (b) the non-personal documents and dataof any nature and in whatever medium of each of Holding, 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” shall bedetermined as follows:  Executive shallpresent any documents or

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# data that he wishes to take with him to the chieflegal officer of Employer for his review. The chief legal officer shall make an initial determination whether anysuch documents or data are personal or non-personal, and with respect to suchdocuments or data that he determines to be non-personal, shall notify Executiveeither that such documents or data must be retained by Employer or thatEmployer must make and retain a copy thereof before Executive may takesuch documents or data with him.  Anydisputes as to the personal or non-personal nature of any such documents ordata shall first be presented to the Chairman of Employer’s Board or to anotherrepresentative designated by Employer’s Board, and if such disputes are notpromptly resolved by Executive and the Chairman or such representative, suchdisputes shall be resolved through arbitration pursuant to Section 17(b).

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# 13            Injunctive Relief with Respect toCovenants; Forum, Venue and Jurisdiction. Executive acknowledges and agrees that the covenants, obligations andagreements of Executive contained in Sections 8, 9, 10, 11, 12 and 13relate to special, unique and extraordinary matters and that a violationof any of the terms of such 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, Holding 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 and enforcementof Sections 8, 9, 10, 11, 12 and 13 insofar as such interpretationand enforcement relate to any request or application for injunctive relief inaccordance with the provisions of this Section 13, and the parties heretohereby irrevocably agree that (a) the sole and exclusiveappropriate venue for any suit or proceeding relating solely to such injunctiverelief shall be in such a court, (b) all claims with respectto any request or application for such injunctive relief shall be heard anddetermined exclusively in such a court, (c) any such courtshall have exclusive jurisdiction over the person of such parties and over thesubject matter of any dispute relating to any request or application for suchinjunctive relief, and (d) each hereby waives any and allobjections and defenses based on forum, venue or personal or subject matterjurisdiction as they may relate to an application for such injunctive relief ina suit or proceeding brought before such a court in accordance withthe provisions of this Section 13. All disputes not relating to any request or application for injunctiverelief in accordance with this Section 13 shall be resolved by arbitrationin accordance with Section 17(b).

 

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# 14            Assumption of Agreement.  Employer shall require any Successorthereto, by agreement in form and substance reasonably satisfactory toExecutive, to expressly assume and agree to perform this Agreement in the samemanner and to the same extent that Employer would be required to perform it ifno such succession had taken place. Failure of Employer to obtain such agreement prior to the effectivenessof any such succession shall be a breach of this Agreement and shall entitleExecutive to compensation from Employer in the same amount and on the sameterms as Executive would be entitled hereunder if Employer had terminatedExecutive’s employment Without Cause as described in Section 7, exceptthat for purposes of implementing the foregoing, the date on which any such successionbecomes effective shall be deemed the Date of Termination.

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# 15            Entire Agreement.  This Agreement (including the Exhibitshereto) constitutes the entire agreement among the parties hereto with respectto the subject matter hereof.  All priorcorrespondence and proposals (including but not limited to summaries ofproposed terms) and all prior promises, representations, understandings,arrangements and agreements relating to such subject matter (including but notlimited to those made to or with Executive by any other Person and thosecontained in any prior employment, consulting or similar agreement entered intoby Executive and Employer or any predecessor thereto or Affiliate thereof) aremerged 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)           Binding Effect; Assignment.  This Agreement shall be binding on and inureto the benefit of Employer, Holding and their respective successors andpermitted assigns.  This Agreement shallalso 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 heretowithout the prior written consent of the other

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## parties hereto, except as provided pursuant to thisSection 17(a).  Each of Holding 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 arbitration shall be borneby the party who incurs the expense, or, in the case of joint expenses, by bothparties in equal portions, except that, in the event Executive prevails on theprincipal issues of such dispute or controversy, all such expenses shall beborne by Employer.

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## (c)           Governing Law.  This Agreement shall be governed by andconstrued in accordance with the laws of the State of New York withoutreference 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 Holding, is approved by theBoard of Directors of Holding 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 return receiptrequested, (iii) deemed to have been received on the date ofdelivery or, if so mailed, on the third business day after the mailing thereof,and (iv) addressed as follows (or to such other address as theparty entitled to notice shall hereafter designate in accordance with the termshereof):

##  

#### (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 hisresidential 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

875 Third Avenue

New York, New York 10022

Attention:  Franci J. Blassberg, Esq.

 

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

##  

## (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 headingscontained in this Agreement are for the convenience of the parties only and arenot intended to be a part hereof or to affect the meaning orinterpretation hereof.

##  

## (k)           CertainDefinitions.

##  

“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 credit arrangement,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”:  with respect to any Person, each corporation or other Person inwhich the first Person owns or Controls, directly or indirectly, capital stockor other ownership interests representing 50% or more of the combinedvoting power of the outstanding voting stock or other ownership interests ofsuch corporation or other Person.

 

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

 

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IN WITNESS WHEREOF, Employerand Holding have duly executed this Agreement by their authorizedrepresentatives, and Executive has hereunto set his hand, in each caseeffective 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                |   |

 

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Schedule I

 

**Annual Synergy Achievement Award**

(all $ aremillions)

 

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 forsynergies between $51.6 and $54.1; 10 cents per dollar for synergies achievedbetween $54.1 and $56.6; and 20 cents per dollar for synergies achieved between$56.6 and $59.1.  For the achievement ofsynergies over $59.1, the Synergy Award Committee may, in its discretion, grantadditional awards.

 

For the first 10%increase in the first two years in synergy achieved, an additional 10% bonus onthe $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; anadditional $0.2 is earned.

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

 

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Schedule II

 

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.

 

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