**Exhibit 10.13**

 

**MANAGEMENTSTOCK OPTION AGREEMENT**

 

This MANAGEMENT STOCK OPTION AGREEMENT, datedas of [           ] (the “*Management Stock Option Agreement*”), isbetween Graphic Packaging Corporation, a Delaware corporation (the “*Company*”), and the Grantee whose nameappears on the signature page hereof (the “*Grantee*”)under the terms of the 2003 Riverwood Holding, Inc. Long-Term IncentivePlan (the “*Plan*”). Capitalizedterms used in this Management Stock Option Agreement and not otherwise definedherein have the meaning given in the Plan. If any provision of this ManagementStock Option Agreement is inconsistent with any provision of the Plan (aseither may be interpreted from time to time by the Board), the Plan shallcontrol.

 

1.     *Confirmation of Grant; Option Price.*  Effective as of the date hereof, the Companyhereby evidences and confirms its award to the Grantee of Options to purchaseShares in the Company, the number of which is set forth on the signature pagehereof, at an option price of [       ]per share (the “*Option Price*”).The Options are not intended to be incentive stock options under the U.S.Internal Revenue Code of 1986, as amended.

 

2.     *Vesting; Exercisability.*  The Options shall vest and becomeexercisable 331/3% on each of the first three anniversaries of [           ] (the “*Effective Date*”), subject to the Grantee’s continuousemployment with the Company or one of its affiliates from the Effective Datethrough each such vesting date and subject to Sections 3(b) and 7 hereof.

 

3.     *Termination of Options.*

 

(a)*   Normal Termination Date*. Unless anearlier termination of employment shall occur as specified in subsection (b),the Options shall terminate and be canceled on the tenth anniversary of theEffective Date (the “*Normal Termination Date*”).

 

(b)*   Termination of Employment*. Unlessotherwise determined by the Committee, in the event the Grantee’s employmentterminates by reason of a Qualifying Termination of Employment, the Grantee (orthe Grantee’s beneficiary or legal representative) may exercise any Options(regardless of whether then exercisable) until the earlier of (*a*) the twelve-month anniversary ofthe date of such termination of employment and (*b*) the date such Options would otherwise expire but for theoperation of this Section 3(b). Unless otherwise determined by theCommittee, in the event a Grantee’s employment terminates for any reason otherthan a Qualifying Termination of Employment or Cause, the Grantee may exerciseany Option that is exercisable at the time of such termination of employmentuntil the earlier of (*a*) the30-day anniversary of the date of such termination of employment and (*b*) the date such Options would otherwiseexpire but for the operation of this Section 3(b), and any Option that isnot then exercisable shall be forfeited and cancelled as of the date of suchtermination of employment. In the event that a Grantee’s employment isterminated for Cause or the Committee determines that circumstances exist suchthat the Grantee’s employment could have been terminated for Cause, any Optionsgranted to such Grantee, whether or not then vested, shall be forfeited andcancelled as of the date of such termination of employment.

 

4.*     Restrictions on Exercise;Non-Transferability of Options.*

 

(a)*   Restrictions on Exercise*. The Optionsmay be exercised only with respect to full shares of Common Stock. Nofractional shares of Common Stock shall be issued. Notwithstanding any otherprovision of this Management Stock Option Agreement, the Options may not beexercised in whole or in part, and no certificates representing Shares shall bedelivered, unless all applicable U.S. federal, state and local and non-U.S. taxwithholding requirements shall have been satisfied. The Company may, ifrequested by the Grantee, withhold Shares to satisfy the minimum applicablewithholding requirements, subject to the provisions of the Plan and any rulesadopted by the Board regarding compliance with applicable law.

 

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(b)*   Non-Transferability of Options*.The Options may be exercised only by the Grantee or by the Grantee’s estate.The Options are not assignable or transferable, in whole or in part, and theymay not, 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, *provided*that the deceased Grantee’s beneficiary or the representative of the Grantee’sestate shall acknowledge and agree in writing, in a form reasonably acceptableto the Company, to be bound by the provisions of this Management Stock OptionAgreement and the Plan as if such beneficiary or the estate were the Grantee.

 

5.     *Manner of Exercise.*  To the extent that any of the Options shallhave become and remain vested and exercisable as provided in Section 2,such Options may be exercised in accordance with the terms of the Plan and anyrules adopted by the Committee from time to time.

 

6.     *Grantee’s Representations, Warranties and Covenants.*

 

(a)*   Investment Intention*. The Granteerepresents and warrants that the Options have been, and any Exercise Shareswill be, acquired by the Grantee solely for the Grantee’s own account for investmentand not with a view to or for sale in connection with any distribution thereof.The Grantee agrees that the Grantee will not, directly or indirectly, offer,transfer, sell, pledge, hypothecate or otherwise dispose of all or any of theOptions or any of the Exercise Shares (or solicit any offers to buy, purchaseor otherwise acquire or take a pledge of all or any of the Options or any ofthe Exercise Shares), except in compliance with the Securities Act and therules and regulations of the Commission thereunder, and in compliance withapplicable state securities or “blue sky” laws and non-U.S. securities laws.

 

(b)*   Ability to Bear Risk*. The Granteecovenants that the Grantee will not exercise all or any of the Options unless (*i*) the financial situation of the Granteeis such that the Grantee can afford to bear the economic risk of holding theExercise Shares for an indefinite period and (*ii*)the Grantee can afford to suffer the complete loss of the Grantee’s investmentin the Exercise Shares.

 

7.     *Change in Control.*

 

(a)*   Accelerated Vesting and Payment*.Subject to the provisions of Sections 7(b) below, in the event of a Change inControl, each Option shall, at the discretion of the Committee either(i) vest and become fully exercisable regardless of the vesting andexercise schedule otherwise applicable to such Option or (i) be canceledin exchange for a payment in cash of an amount equal to the excess, if any, ofthe Change in Control Price over the Exercise Price.

 

(b)*   Alternative Awards*. NotwithstandingSection 7(a), no cancellation, acceleration of exercisability, vesting,cash settlement or other payment shall occur with respect to an Option if theCommittee reasonably determines in good faith prior to the occurrence of aChange in Control that such Option shall be honored or assumed, or new rightssubstituted therefor (such honored, assumed or substituted award an “*Alternative Award*”), by the Grantee’s NewEmployer (or the parent or a Subsidiary of such New Employer) immediatelyfollowing the Change in Control, *provided*that such Alternative Award (i) is based on stock which is or will be,within 60 days of the Change in Control, traded on an establishedsecurities market; (ii) provides Grantee with rights and entitlementssubstantially equivalent to or better than the rights, terms and conditionsapplicable under the Option; (iii) has substantially equivalent economicvalue to the Option (determined at the time of the Change in Control); and(iv) vests and becomes fully exercisable and transferable in the eventthat Grantee’s employment is involuntarily terminated or terminated by Granteefollowing a material reduction in the Grantee’s base salary or a Grantee’sincentive compensation opportunity or a material reduction in the Grantee’sresponsibilities, in either case without the Grantee’s written consent.

 

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8.     *Miscellaneous.*

 

(a)*   Waiver; Amendment*.

 

(i)*   Waiver*. Any party hereto orbeneficiary hereof may by written notice to the other parties (*A*) extend the time for the performance ofany of the obligations or other actions of the other parties under thisManagement Stock Option Agreement, (*B*)waive compliance with any of the conditions or covenants of the other partiescontained in this Management Stock Option Agreement and (*C*) waive or modify performance of any ofthe obligations of the other parties under this Management Stock OptionAgreement. Except as provided in the preceding sentence, no action takenpursuant to this Management Stock Option Agreement, including, withoutlimitation, any investigation by or on behalf of any party or beneficiary,shall be deemed to constitute a waiver by the party or beneficiary taking suchaction of compliance with any representations, warranties, covenants or agreementscontained herein. The waiver by any party hereto or beneficiary hereof of abreach of any provision of this Management Stock Option Agreement shall notoperate or be construed as a waiver of any preceding or succeeding breach andno failure by a party or beneficiary to exercise any right or privilegehereunder shall be deemed a waiver of such party’s or beneficiary’s rights orprivileges hereunder or shall be deemed a waiver of such party’s orbeneficiary’s rights to exercise the same at any subsequent time or timeshereunder.

 

(ii)*  Amendment*. This Management StockOption Agreement may not be altered, modified, or amended except by a writteninstrument signed by the Company and the Grantee.

 

(b)*   Nonassignability*. Neither thisManagement Stock Option Agreement nor any right, remedy, obligation orliability arising hereunder or by reason hereof shall be assignable by theCompany or the Grantee without the prior written consent of the other parties.

 

(c)*   No Rights as a Stockholder*. TheGrantee shall have no voting or other rights as a stockholder of the Companywith respect to any Shares covered by the Options until the exercise of theOptions and the issuance of a certificate or certificates to the Grantee forsuch Shares. No adjustment shall be made for dividends or other rights forwhich the record date is prior to the issuance of such certificate orcertificates.

 

(d)*   No Right to Continued Employment*.Nothing in this Management Stock Option Agreement shall interfere with or limitin any way 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 shallhave full power and discretion to construe and interpret the Plan (and anyrules and regulations issued thereunder) and this Management Stock OptionAgreement. Any determination or interpretation by the Board under or pursuantto this Management Stock Option Agreement shall be final and binding andconclusive on all persons affected hereby.

 

(f)*    Delegation by the Board*. All ofthe powers, duties and responsibilities of the Board specified in thisManagement Stock Option Agreement may, to the full extent permitted byapplicable law, be exercised and performed by any duly constituted committeethereof to the extent authorized by the Board to exercise and perform suchpowers, duties and responsibilities.

 

(g)*   Binding Effect; Benefits*. ThisManagement Stock Option Agreement shall be binding upon and inure to thebenefit of the parties to this Management Stock Option Agreement and theirrespective successors and assigns. Nothing in this Management Stock OptionAgreement, express or implied, is intended or shall be construed to give anyperson other than the Company or the Grantee or their respective successors orassigns any legal or equitable right, remedy or claim under or in respect ofany agreement or any provision contained herein.

 

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(h)*   Severability*. In the event thatany one or more of the provisions of this Restricted Unit Agreement shall be orbecome invalid, illegal or unenforceable in any respect, the validity, legalityand enforceability of the remaining provisions contained herein shall not beaffected thereby.

 

(i)*    Notices*. All notices and othercommunications required or permitted hereunder shall be in writing and shall bedeemed given when (*a*) deliveredpersonally, (*b*) sent by certifiedor registered mail, postage prepaid, return receipt requested or (*c*) delivered by overnight courier(provided that a written acknowledgment of receipt is obtained by the overnightcourier) to the party concerned at the address indicated below or to suchchanged address as such party may subsequently give notice of:

 
| If to the Company: |   | Graphic Packaging Corporation

814 Livingston Court

Marietta, Georgia 30067 |
|--------------------|--------|------------------------------------------------------------------------------|
|               |   |                                                                         |
| Attention:         |   | General Counsel;  Chairman, Compensation Committee                           |
|               |   |                                                                         |
| If to Grantee:     |   | at the home address of Grantee on the  records of the Company                |

 

(j)*    Governing Law*. This ManagementStock Option Agreement shall be governed by and construed in accordance withthe laws of the State of New York without regard to the principles of conflictof laws except to the extent the laws of the State of Delaware specifically andmandatorily apply.

 

(k)*   Section and Other Headings, etc*.The section and other headings contained in this Management Stock OptionAgreement are for reference purposes only and shall not affect the meaning orinterpretation of this Management Stock Option Agreement.

 

(l)*    Counterparts*. This ManagementStock Option Agreement may be executed in any number of counterparts, each ofwhich shall be deemed to be an original and all of which together shallconstitute one and the same instrument.

 

(m)*  Capital Adjustments*. The number andprice of the Shares covered by the Options shall be proportionately adjusted bythe Board to reflect any stock dividend, stock split or share combination ofthe Common Stock or any recapitalization of the Company. Subject to anyrequired action by the stockholders of the Company and Section 7 hereof,in any merger, consolidation, reorganization, exchange of shares, liquidationor dissolution, the Options shall pertain to the securities and other property,if any, that a holder of the number of shares of Common Stock covered by theOptions would have been entitled to receive in connection with such event.

 

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IN WITNESS WHEREOF, the Company and theGrantee have executed this Management Stock Option Agreement as of the datefirst above written.

 
|   | Graphic Packaging Corporation |
|--------|-------------------------------|
|   |                          |
|   | By:                           |   |
|   | Name:                         |
|   | Title:                        |
|   |                          |
|   | THE GRANTEE:                  |
|   |                          |
|   | [Grantee]                     |
|   |                          |
|   | By:                           |   |
|   |                          | Name: |

 
| Total Number of Shares |
|------------------------|
| of Common Stock for    |
| the Purchase of Which  |
| Options Have Been      |
| Granted:               | [Options] |

 

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