**Exhibit 10.12**

 

**RESTRICTEDUNIT AGREEMENT**

 

This RESTRICTED UNIT AGREEMENT, dated as ofAugust 8, 2003 (the “*Award*”),is between Riverwood Holding, Inc., a Delaware corporation (the “*Company*”), and the Grantee whose nameappears on the signature page hereof (the “*Grantee*”)under the terms of the Graphic Packaging International Corporation ExecutiveEmployment Agreement (the “*EmploymentAgreement*”) and the 2003 Riverwood Holding, Inc. Long-TermIncentive Plan (the “*Plan*”).Capitalized terms used in this Award and not otherwise defined herein have themeaning given in the Employment Agreement. If any provision of this Award(other than Sections 2 and 5) is inconsistent with any provision of thePlan (as either may be interpreted from time to time by the Board), the Planshall control.

 

1.*  Grant ofRestricted Units.*  Effectiveas of the date of the consummation of the merger (the “*Effective Date*”), the Company herebyevidences and confirms its award to the Grantee of the number of RestrictedUnits set forth on the signature page hereof, which represent the Company’scontractual obligation to deliver shares of Common Stock (the “*Shares*”) to the Grantee upon the terms setforth herein. As of the Effective Date, the Grantee shall have no rights withrespect to the shares of restricted stock in Graphic Packaging InternationalCorporation that were awarded to the Executive and set forth on Schedule Aof the Employment Agreement.

 

2.*  Vesting of Restricted Units.*  The Restricted Units shall vest 33 1/3%oneach of the first three anniversaries of the Effective Date, subject to theExecutive’s continuous employment with the Company of one of its affiliatesfrom the Effective Date through each such vesting date, *provided* that the Restricted Units shallbecome fully vested upon the first to occur of (*i*) the termination of the Executive’s employment by theCompany without Cause, due to Death or Disability, due to retirement, or if theExecutive terminates employment for Good Reason, and (*ii*) the occurrence of a Change of Control.If the Executive’s employment terminates after the first or second anniversaryof the Effective Date for reasons other than provided in clause (i) or(ii) of the preceding sentence, he shall retain the right to anyRestricted Units that have become vested and nonforfeitable, subject toSection 3, which shall be payable pursuant to Section 5.

 

3.*  Forfeiture.*  If the Executive’s employment is terminatedfor Cause on or before the date on which any Restricted Units have becomepayable pursuant to Section 5, such Restricted Units awarded to theExecutive shall be canceled and the Executive shall forfeit all rights to theRestricted Units and any Shares issuable for such Restricted Units.

 

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

 

5.*  Delivery of Shares Underlying VestedRestricted Units.*  Sharesunderlying vested Restricted Units shall be delivered on the earlier of (*i*) the third anniversary of the EffectiveDate, (*ii*) termination of theExecutive’s employment by the Company without Cause, due to Death orDisability, due to retirement, or if the Executive terminates employment forGood Reason, and (*iii*) theoccurrence of a Change of Control.

 

6.*  Representations and Warranties.*

 

(a)    *Investment Intention.* The Granteerepresents and warrants that the Restricted Units have been, and any Shareswill be, acquired by the Grantee solely for the Grantee’s own account forinvestment and not with a view to or for sale in connection with any distributionthereof. The Grantee

 

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furtherunderstands, acknowledges and agrees that none of the Restricted Units may betransferred, sold, pledged, hypothecated or otherwise disposed of except to theextent expressly permitted hereby.

 

(b)*   Ability to Bear Risk*. The Granteerepresents and warrants that (*i*)the financial situation of the Grantee is such that the Grantee can afford tobear the economic risk of holding the Restricted Units and Shares for anindefinite period and (*ii*) theGrantee can afford to suffer the complete loss of the Grantee’s investment inthe Restricted Units and Shares.

 

7.     *Miscellaneous.*

 

(a)    *Tax Withholding*. Whenever Shares or otherproperty are to be distributed in respect to any Restricted Units awardedhereunder, the Company shall have the power to withhold, or require the Granteeto remit to the Company, an amount sufficient to satisfy United States Federal,state, local and non-U.S. withholding tax requirements, including but notlimited to income, social security and employment taxes, relating to suchissuance, and the Company may defer issuance of such Shares or other propertyuntil such requirements are satisfied. The Board may, in its discretion, permitthe Grantee to elect, subject to such conditions as the Board shall impose, tosatisfy his withholding obligation hereunder with Shares or any other propertyissuable hereunder. Notwithstanding the foregoing, in the event Shares are tobe distributed pursuant to (*i*)the Company’s termination of the Executive’s employment without Cause, due toDeath or Disability, due to retirement, or (*ii*)the Executive’s termination of employment for Good Reason or (*iii*) the occurrence of a Change ofControl, the Company shall withhold from the number of Shares otherwisedeliverable enough Shares (based on the Fair Market Value at the time ofdistribution) to satisfy income and employment tax withholding requirementswith respect to such distribution and delivery.

 

(b)   *Nonassignability*. The Restricted Unitsgranted hereby are not assignable or transferable, in whole or in part, and maynot, directly or indirectly, be offered, transferred, sold, pledged, assigned,alienated, hypothecated or otherwise disposed of or encumbered (includingwithout limitation by gift, operation of law or otherwise) other than by willor by the laws of descent and distribution to the estate of the Grantee uponthe Grantee’s death.

 

(c)    *No Rights as a Stockholder*. Neither theGrantee nor any person or persons to whom the Grantee’s rights under this Awardshall have passed by will or by the laws of descent and distribution, as thecase may be, shall have any voting, dividend or other rights or privileges as astockholder of the Company with respect to any Shares corresponding to theRestricted Units granted hereby unless and until a certificate for Shares isissued in respect thereof.

 

(d)   *No Right to Continued Employment*. Nothingin the Employment Agreement or this Award shall interfere with or limit in anyway the right of the Company or any of its Subsidiaries to terminate theGrantee’s employment at any time, or confer upon the Grantee any right tocontinue in the employ of the Company or any of its Subsidiaries.

 

(e)    *Interpretation*. The Board shall have fullpower and discretion to construe and interpret the Employment Agreement, thePlan (and any rules and regulations issued thereunder) and this Award. Anydetermination or interpretation by the Board under or pursuant to this Awardshall be final and binding and conclusive on all persons affected hereby.

 

(f)    *Binding Effect; Benefits*. This Award shallbe binding upon and inure to the benefit of the Company and the Grantee andtheir respective successors and assigns. Nothing in this Award, express orimplied, is intended or shall be construed to give any person other than theCompany or the Grantee or their respective successors or assigns any legal orequitable right, remedy or claim under or in respect of any agreement or anyprovision contained herein.

 

(g)   *Amendment*. This Award may not be altered,modified, or amended except by a written instrument signed by the Company andthe Grantee.

 

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(h)   *Severability*. In the event that any one ormore of the provisions of this Award 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.

 

(i)     *Notices*. All notices and othercommunications required or permitted to be given under this Award shall be givenin the manner prescribed in the Employment Agreement.

 

(j)     *Sections and Other Headings*. The sectionand other headings contained in this Award are for reference purposes only andshall not affect the meaning or interpretation of this Award.

 

(k)    *Governing Law*. This Award shall begoverned by and construed in accordance with the laws of the State of New Yorkwithout regard to the principles of conflict of laws except to the extent thelaws of the State of Delaware specifically and mandatorily apply.

 

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IN WITNESS WHEREOF, the Company and theGrantee have executed this Award as of the date first above written.

 
|   | Riverwood Holding, Inc. |
|--------|------------------------------|
|   |                         |
|   | By:                          |   |
|   |                         | Name: |
|   |                         | Title: |
|   |                         |
|   | THE GRANTEE:                 |
|   |                         |

 

Number of Restricted Units

 

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