Document:

<PAGE>   1
                                                                  EXHIBIT 10.16

                              EMPLOYMENT AGREEMENT

             This EMPLOYMENT AGREEMENT is entered into as of this 1st day of
September, 1998 by and among Riverwood International Corporation, a Delaware
corporation ("Employer"), Riverwood Holding, Inc., a Delaware corporation
("Holding") and Daniel J. Blount ("Executive").

                             W I T N E S S E T H :

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

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

             WHEREAS, each of Employer, Holding and Executive agrees that
Executive will have a prominent role in the management of the business, and the
development of the goodwill, of Employer and its Affiliates (as defined below)
and will establish and develop relations and contacts with the principal
customers and suppliers of Employer and its Affiliates in the United States and
the rest of the world, all of which constitute valuable goodwill of, and could
be used by Executive to compete unfairly with, Employer and its Affiliates;

             WHEREAS, (i) in the course of his employment with Employer,
Executive will obtain confidential and proprietary information and trade
secrets concerning the business and operations of Employer and its Affiliates
in the United States and the rest of the world that could be used to compete
unfairly with Employer and its Affiliates; (ii) the covenants and restrictions
contained in Sections 8 through 13, inclusive, are intended to protect the
legitimate interests of Employer and its Affiliates in their respective
goodwill, trade secrets and other confidential and proprietary information; and
(iii) Executive desires to be bound by such covenants and restrictions;

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

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

<PAGE>   2

             2. Term; Position and Responsibilities.

             (a) Term of Employment. Unless Executive's employment shall sooner
terminate pursuant to Section 7, Employer shall employ Executive for a term
commencing on the date hereof and ending on the third anniversary of the date
hereof (the "Initial Term"). Effective upon the expiration of the Initial Term
and of each Additional Term (as defined below), Executive's employment
hereunder shall be deemed to be automatically extended, upon the same terms and
conditions, for an additional period of one year (each, an "Additional Term"),
in each such case, commencing upon the expiration of the Initial Term or the
then current Additional Term, as the case may be, unless Employer, at least 180
days prior to the expiration of the Initial Term or such Additional Term, shall
give written notice (a "Non-Extension Notice") to Executive of its intention
not to extend the Employment Period (as defined below) hereunder, provided that
a Non-Extension Notice shall not constitute a notice to Executive of the
termination of his employment by Employer unless such notice specifically
provides for such termination of employment and the specific date thereof. The
period during which Executive is employed pursuant to this Agreement, including
any extension thereof in accordance with the preceding sentence, shall be
referred to as the "Employment Period".

             (b) Position and Responsibilities. During the Employment Period,
Executive shall serve as Vice President and Chief Financial Officer of Employer
and have such duties and responsibilities as are customarily assigned to
individuals serving in such position and such other duties consistent with
Executive's title and position as the Board of Directors of Employer
("Employer's Board") specifies from time to time. Executive shall report to the
Company's President and Chief Executive Officer. Executive shall devote all of
his skill, knowledge and working time (except for (i) vacation time as set
forth in Section 6(c) and absence for sickness or similar disability and (ii)
to the extent that it does not interfere with the performance of Executive's
duties hereunder, (A) such reasonable time as may be devoted to service on
boards of directors of other corporations and entities, subject to the
provisions of Section 9, and the fulfillment of civic responsibilities and (B)
such reasonable time as may be necessary from time to time for personal
financial matters) to the conscientious performance of the duties and
responsibilities of such position. If so elected or designated by the
respective shareholders thereof, Executive shall serve as a member of the
Boards of Directors of Holding, Employer and their respective Affiliates during
the Employment Period without additional compensation.

             3. Base Salary. As compensation for the services to be performed
by Executive during the Employment Period, Employer shall pay Executive a base
salary at an annualized rate of $200,000, payable in installments on Employer's
regular payroll dates, and, in the event that Executive's employment hereunder
is terminated by death, for the

                                       2
<PAGE>   3

remainder of the pay period in which death occurs and for one month thereafter.
Employer's Board shall review Executive's base salary annually during the
period of his employment hereunder and, in its sole discretion, Employer's
Board may increase (but may not decrease) such base salary from time to time
based upon the performance of Executive, the financial condition of Employer,
prevailing industry salary levels and such other factors as Employer's Board
shall consider relevant. (The annual base salary payable to Executive under
this Section 3, as the same may be increased from time to time and without
regard to any reduction therefrom in accordance with the next sentence, shall
hereinafter be referred to as the "Base Salary".) The Base Salary payable under
this Section 3 shall be reduced to the extent that Executive elects to defer
such Base Salary under the terms of any deferred compensation, savings plan or
other voluntary deferral arrangement that may be maintained or established by
Employer.

             4. Incentive Compensation Arrangements.

             (a) Incentive Compensation. During the Employment Period,
Executive shall participate in Employer's incentive compensation programs for
its senior executives existing from time to time, at a level commensurate with
his position and duties with Employer and based on such performance targets as
may be established from time to time by Employer's Board or a committee
thereof. For 1998, Executive's aggregate annual target bonus opportunity shall
be 70% of Base Salary, provided that Executive's actual annual bonus for 1998
shall be not less than $60,000. For each subsequent year in the Employment
Period, Executive's aggregate annual target bonus opportunity shall be 70% of
Base Salary; provided that with respect to the year in the Employment Period in
which Executive is offered shares of Common Stock pursuant to Section 4(b) and
each subsequent such year in the Employment Period, Executive=s annual target
bonus opportunity Period shall be 60% of Base Salary, unless Executive
purchases 50% or more of the shares of Common Stock so offered to Executive, in
which case Executive=s annual target bonus opportunity shall be 100% of Base
Salary.

             (b) Opportunity to Purchase Shares. Executive will be given the
opportunity to purchase up to 5,000 shares (the "Shares") of the Class A Common
Stock of Holding, par value $.01 per share (the "Common Stock"), for a per
share purchase price equal to the fair market value of such Shares at the time
they are so offered to Executive, but in no event will Holding be required to
offer to sell or to sell any Shares to Executive at any time at which making
such an offer or selling any such Shares would violate any applicable
securities law. The terms and conditions of Executive's purchase of any Shares,
including the restrictions on transfer of the Shares, the right of first
refusal of Holding with respect to such Shares, the right of Holding to
repurchase all or a portion of such Shares from Executive following any
termination of Executive's employment and the applicable repurchase price and
the respective tag along and drag along rights of Executive and Holding, shall
be set forth in a separate Management Stock Subscription

                                       3
<PAGE>   4

Agreement, in the form customarily used by Holding for such purpose, to be
entered into by and between Parent and Executive.

             (c) Options. For each Share that Executive purchases pursuant to
Section 4(b), Executive shall be granted non-qualified stock options (the
"Service Options") to purchase two shares of Common Stock, and non-qualified
stock options (the "Performance Options" and, together with the Service
Options, the "Options") to purchase an additional one share of Common Stock.
Each Option shall be granted to Executive pursuant to and in accordance with
the terms of the Riverwood Holding, Inc. Stock Incentive Plan and shall
otherwise be subject to the terms and conditions (which shall include those
described in this Section 4(b)) set forth in a separate Management Stock Option
Agreement, in the form customarily used for such purpose, to be entered into by
Executive and Holding (the "Option Agreement").

             The per share exercise price for the Common Stock covered by the
Service Options and the Performance Options shall be the fair market value of
such shares at the time of grant, as determined in accordance with the
Riverwood Holding, Inc. Stock Incentive Plan.

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

             6. Perquisites and Expenses.

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

             (b) Business Travel, Lodging, etc. Employer shall reimburse
Executive for reasonable travel, lodging, meal and other reasonable expenses
incurred by him in connection with his performance of services hereunder upon
submission of evidence, satisfactory to Employer, of the incurrence and purpose
of each such expense and

                                       4
<PAGE>   5

otherwise in accordance with Employer's business travel reimbursement policy
applicable to its senior executives as in effect from time to time.

             (c) Vacation. During the Employment Period, Executive shall be
entitled to a number of weeks of paid vacation on an annualized basis, without
carryover accumulation, equal to the greater of (i) four weeks and (ii) the
number of weeks of paid vacation per year applicable to senior executives of
Employer in accordance with its vacation policy as in effect from time to time.

             7. Termination of Employment.

             (a) Termination Due to Death or Disability. In the event that
Executive's employment hereunder terminates due to death or is terminated by
Employer due to Executive's Disability (as defined below), no termination
benefits shall be payable to or in respect of Executive except as provided in
Section 7(f)(ii). For purposes of this Agreement, "Disability" shall mean a
physical or mental disability that prevents or would prevent the performance by
Executive of his duties hereunder for a continuous period of six months or
longer. The determination of Executive's Disability shall (i) be made by an
independent physician who is reasonably acceptable to Employer and Executive
(or his representative), (ii) be final and binding on the parties hereto and
(iii) be based on such competent medical evidence as shall be presented to such
independent physician by Executive and/or Employer or by any physician or group
of physicians or other competent medical experts employed by Executive and/or
Employer to advise such independent physician.

             (b) Termination by Employer for Cause. Executive may be terminated
for Cause (as defined below) by Employer, provided that Executive shall be
permitted to attend a meeting of Employer's Board within 30 days after delivery
to him of a Notice of Termination (as defined below) pursuant to this Section
7(b) to explain why he should not be terminated for Cause and, if following any
such explanation by Executive, Employer's Board determines that Employer does
not have Cause to terminate Executive's employment, any such prior Notice of
Termination delivered to Executive shall thereupon be withdrawn and of no
further force or effect. "Cause" shall mean (i) the willful failure of
Executive substantially to perform his duties hereunder (other than any such
failure due to Executive's physical or mental illness) or other willful and
material breach by Executive of any of his obligations hereunder or under the
Option Agreement, after a written demand for substantial performance has been
delivered, and a reasonable opportunity to cure has been given, to Executive by
Employer's Board, which demand identifies in reasonable detail the manner in
which Employer's Board believes that Executive has not substantially performed
his duties or has breached his obligations, (ii) Executive's engaging in
willful and serious misconduct that has caused or is reasonably

                                       5
<PAGE>   6

expected to result in material injury to Employer or any of its Affiliates or
(iii) Executive's conviction of, or entering a plea of guilty or nolo
contendere to, a crime that constitutes a felony.

             (c) Termination Without Cause. A termination "Without Cause" shall
mean a termination of employment by Employer other than due to Disability as
described in Section 7(a) or for Cause as described in Section 7(b).

             (d) Termination by Executive. Executive may terminate his
employment for any reason. A termination of employment by Executive for "Good
Reason" shall mean a termination by Executive of his employment with Employer
within 30 days following the occurrence, without Executive's consent, of any of
the following events: (i) the assignment to Executive of duties that are
significantly different from, and that result in a substantial diminution of,
the duties that he is to assume on the date hereof, (ii) the failure of
Employer to obtain the assumption of this Agreement by any Successor (as
defined below) to Employer as contemplated by Section 14, (iii) a reduction in
the rate of Executive's Base Salary, (iv) a material breach by Employer of any
of its obligations hereunder or by Holding of any of its obligations under the
Option Agreement or (v) delivery to Executive of a Non-Extension Notice,
provided that, in the case of any of clauses (i), (iii) or (iv), within 30 days
following the occurrence of any of the events set forth therein, Executive
shall have delivered written notice to Employer of his intention to terminate
his employment for Good Reason, which notice specifies in reasonable detail the
circumstances claimed to give rise to Executive's right to terminate his
employment for Good Reason, and Employer or Holding, as the case may be, shall
not have cured such circumstances to the reasonable satisfaction of Executive.

             (e) Notice of Termination. Any termination by Employer pursuant to
Section 7(a), 7(b) or 7(c), or by Executive pursuant to Section 7(d), shall be
communicated by a written Notice of Termination addressed to the other parties
to this Agreement. A "Notice of Termination" shall mean a notice stating that
Executive's employment with Employer has been or will be terminated.

             (f) Payments Upon Certain Terminations.

             (i) In the event of a termination of Executive's employment by
Employer Without Cause or a termination by Executive of his employment for Good
Reason during the Employment Period, Employer shall pay to Executive (or,
following his death, to Executive's beneficiaries):

             (A) his Base Salary, which shall be payable in installments on
       Employer's regular payroll dates, for the period (the "Severance
       Period") beginning on the Date

                                       6
<PAGE>   7

       of Termination (as defined below) and ending on the last to occur of (1)
       the last day of the Initial Term or, if applicable, the then current
       Additional Term, (2) the first anniversary of the Date of Termination
       and (3) and the expiration of a number of months equal to the number of
       years of Executive's service with Employer completed as of the Date of
       Termination and

             (B) the product of (1) the amount of incentive compensation that
       would have been payable to Executive for the calendar year in which the
       Date of Termination occurs if Executive had remained employed for the
       entire calendar year and assuming that all applicable performance
       targets had been achieved, multiplied by (2) a fraction, the numerator
       of which is equal to the number of days in such calendar year that
       precede the Date of Termination and the denominator of which is equal to
       365 (such product, the "Pro Rata Bonus"), less

             (C) the amount, if any, paid or payable to Executive under the
       terms of any severance plan, policy, program or practice of Holding,
       Employer or any of their respective Affiliates applicable to Executive,
       as in effect on the Date of Termination;

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

             If Executive's employment shall terminate and he is entitled to
receive continued payments of his Base Salary under clause (A) of this Section
7(f)(i), Employer shall (x) continue to provide to Executive during the
Severance Period the life, medical, dental, accidental death and dismemberment
and prescription drug benefits referred to in Section 5 (the "Continued
Benefits") and (y) reimburse Executive for expenses incurred by him for
outplacement and career counseling services provided to Executive for an
aggregate amount not in excess of the lesser of (i) $25,000 and (ii) 20% of
Executive's Base Salary.

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

                                       7
<PAGE>   8

defined below) for which Executive performs services, including but not limited
to consulting services.

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

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

             (g) Date of Termination. As used in this Agreement, the term "Date
of Termination" shall mean (i) if Executive's employment is terminated by his
death, the date of his death, (ii) if Executive's employment is terminated by
Employer for Cause, the date on which Notice of Termination is given as
contemplated by Section 7(e) or, if later, the date of termination specified in
such Notice, and (iii) if Executive's employment is terminated by Employer
Without Cause, due to Executive's Disability or by Executive for any reason,
the date that is 30 days after the date on which Notice of Termination is given
as contemplated by Section 7(e) or, if no such Notice is given, 30 days after
the date of termination of employment.

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

                                       8
<PAGE>   9

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

             9. Non-Competition. During the period of Executive's employment
with Employer and, following any termination thereof, the period ending on the
later of (a) the first anniversary of the Date of Termination and (b) the last
day of the Severance Period, Executive shall not, directly or indirectly,
become employed in an executive capacity by, engage in business with, serve as
an agent or consultant to, or become a partner, member, principal or
stockholder (other than a holder of less than 1% of the outstanding voting
shares of any publicly held company) of, any Person that competes or has a
reasonable potential for competing, anywhere in the United States or Europe,
with any part of the business of Employer or any of its Affiliates that relates
to producing, marketing, manufacturing, designing or installing packaging or
paper products, machines or related materials. Whether any such Person so
competes or so has a reasonable potential for competing shall be determined in
good faith by Employer's Board. For purposes of this Section 9, the phrase
employment "in an executive capacity" shall mean employment in any position in
connection with which Executive has or reasonably would be viewed as having
powers and authorities with respect to any other Person or any part of the
business thereof that are substantially similar, with respect thereto, to the
powers and authorities assigned to the Senior Vice President, Paperboard
Operations or any superior executive officer of Employer in the By-Laws of
Employer as in effect on the date hereof, a copy of the relevant portions of
which has been delivered to Executive on or before the date hereof, and which
Executive hereby confirms that he has reviewed.

                                       9
<PAGE>   10

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

             11. Non-Solicitation of Customers. During the Restriction Period,
Executive shall not, directly or indirectly, for his own account or for the
account of any other Person anywhere in the United States or Europe, solicit or
otherwise attempt to establish any business relationship of a nature that is
competitive with the business or relationship of Holding, Employer or any of
their respective Affiliates with any Person throughout the world which is or
was a customer, client or distributor of Holding, Employer or any of their
respective Affiliates at any time during which Executive was employed by
Employer (in the case of any such activity during such time) or during the
twelve-month period preceding the Date of Termination (in the case of any such
activity after the Date of Termination), other than any such solicitation on
behalf of Holding, Employer or any of their respective Affiliates during
Executive's employment with Employer.

             12. Return of Documents. In the event of the termination of
Executive's employment for any reason, Executive shall deliver to Employer all
of (a) the property of each of Holding, Employer and their respective
Affiliates and (b) the non-personal documents and data of any nature and in
whatever medium of each of Holding, Employer and their respective Affiliates,
and he shall not take with him any such property, documents or data or any
reproduction thereof, or any documents containing or pertaining to any
Confidential Information. Whether documents or data are "personal" or
"non-personal" shall be determined as follows: Executive shall present any
documents or data that he wishes to take with him to the chief legal officer of
Employer for his review.

                                       10
<PAGE>   11

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

             13. Injunctive Relief with Respect to Covenants; Forum, Venue and
Jurisdiction. Executive acknowledges and agrees that the covenants, obligations
and agreements of Executive contained in Sections 8, 9, 10, 11, 12 and 13
relate to special, unique and extraordinary matters and that a violation of any
of the terms of such covenants, obligations or agreements will cause Employer
irreparable injury for which adequate remedies are not available at law.
Therefore, Executive agrees that Employer shall be entitled to an injunction,
restraining order or such other equitable relief (without the requirement to
post bond) as a court of competent jurisdiction may deem necessary or
appropriate to restrain Executive from committing any violation of such
covenants, obligations or agreements. These injunctive remedies are cumulative
and in addition to any other rights and remedies Employer may have. Employer,
Holding and Executive hereby irrevocably submit to the exclusive jurisdiction
of the courts of the State of New York and the Federal courts of the United
States of America, in each case located in New York City, in respect of the
injunctive remedies set forth in this Section 13 and the interpretation and
enforcement of Sections 8, 9, 10, 11, 12 and 13 insofar as such interpretation
and enforcement relate to any request or application for injunctive relief in
accordance with the provisions of this Section 13, and the parties hereto
hereby irrevocably agree that (a) the sole and exclusive appropriate venue for
any suit or proceeding relating solely to such injunctive relief shall be in
such a court, (b) all claims with respect to any request or application for
such injunctive relief shall be heard and determined exclusively in such a
court, (c) any such court shall have exclusive jurisdiction over the person of
such parties and over the subject matter of any dispute relating to any request
or application for such injunctive relief, and (d) each hereby waives any and
all objections and defenses based on forum, venue or personal or subject matter
jurisdiction as they may relate to an application for such injunctive relief in
a suit or proceeding brought before such a court in accordance with the
provisions of this Section 13. All disputes not relating to any request or
application for injunctive relief in accordance with this Section 13 shall be
resolved by arbitration in accordance with Section 17(b).

                                       11

<PAGE>   12

             14. Assumption of Agreement. Employer shall require any Successor
thereto, by agreement in form and substance reasonably satisfactory to
Executive, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that Employer would be required to perform it if
no such succession had taken place. Failure of Employer to obtain such
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement and shall entitle Executive to compensation from Employer in
the same amount and on the same terms as Executive would be entitled hereunder
if Employer had terminated Executive's employment Without Cause as described in
Section 7, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination.

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

             16. Indemnification. Employer hereby agrees that it shall
indemnify and hold harmless Executive to the fullest extent permitted by
Delaware law from and against any and all liabilities, costs, claims and
expenses, including all costs and expenses incurred in defense of litigation
(including attorneys' fees), arising out of the employment of Executive
hereunder, except to the extent arising out of or based upon the gross
negligence or willful misconduct of Executive. Costs and expenses incurred by
Executive in defense of such litigation (including attorneys' fees) shall be
paid by Employer in advance of the final disposition of such litigation upon
receipt by Employer of (a) a written request for payment, (b) appropriate
documentation evidencing the incurrence, amount and nature of the costs and
expenses for which payment is being sought, and (c) an undertaking adequate
under Delaware law made by or on behalf of Executive to repay the amounts so
paid if it shall ultimately be determined that Executive is not entitled to be
indemnified by Employer under this Agreement, including but not limited to as a
result of such exception.

             17. Miscellaneous.

             (a) Binding Effect; Assignment. This Agreement shall be binding on
and inure to the benefit of Employer, Holding and their respective successors
and permitted assigns. This Agreement shall also be binding on and inure to the
benefit of Executive

                                       12

<PAGE>   13

and his heirs, executors, administrators and legal representatives. This
Agreement shall not be assignable by any party hereto without the prior written
consent of the other parties hereto, except as provided pursuant to this
Section 17(a). Each of Holding and Employer may effect such an assignment
without prior written approval of Executive upon the transfer of all or
substantially all of its business and/or assets (by whatever means), provided
that the Successor to Employer shall expressly assume and agree to perform this
Agreement in accordance with the provisions of Section 14.

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

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

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

             (e) Amendments. No provision of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is approved
by Employer's Board or a Person authorized thereby and is agreed to in writing
by Executive and, in the case of any such modification, waiver or discharge
affecting the rights or obligations of Holding, is approved by the Board of
Directors of Holding or a Person authorized thereby. No waiver by any party
hereto at any time of any breach by any other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No waiver of any

                                       13
<PAGE>   14

provision of this Agreement shall be implied from any course of dealing between
or among the parties hereto or from any failure by any party hereto to assert
its rights hereunder on any occasion or series of occasions.

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

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

             (A) If to Employer, to it at:

                 Riverwood International Corporation
                 3350 Cumberland Circle
                 Suite 1400 Atlanta, Georgia 30339
                 Attention: General Counsel

             (B) if to Holding, to it at:

                 c/o Riverwood International Corporation
                 3350 Cumberland Circle
                 Suite 1400
                 Atlanta, Georgia 30339
                 Attention: General Counsel

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

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

                 Clayton, Dubilier & Rice, Inc.
                 375 Park Avenue
                 New York, New York  10152

                                       14
<PAGE>   15

                 Attention:  Mr. Kevin J. Conway

                               and

                 Debevoise & Plimpton
                 875 Third Avenue
                 New York, New York  10022
                 Attention:  Franci J. Blassberg, Esq.

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

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

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

             (k) Certain Definitions.

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

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

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

                                       15
<PAGE>   16

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

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

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

                                RIVERWOOD INTERNATIONAL CORPORATION

                                By: /s/ Stephen M. Humphrey
                                   --------------------------------------------
                                   Name: Stephen M. Humphrey
                                   Title: President and Chief Executive Officer

                                RIVERWOOD HOLDING, INC.

                                By: /s/ Stephen M. Humphrey
                                   --------------------------------------------
                                   Name: Stephen M. Humphrey
                                   Title: President and Chief Executive Officer

                                Executive:

                                /s/ Daniel J. Blount
                                --------------------
                                Daniel J. Blount

                                       16

<PAGE>   17

                                                                     Schedule I

                                  Perquisites

1.           Annual executive physical.

2.           Reimbursement up to $1,000 annually for expenses relating to
             income tax preparation plus additional fees if incurred on account
             of job-related circumstances and the cost of representation by
             return preparer during any audit.

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

4.           Subject to the advance approval of the CEO, reimbursement for
             initiation fees ("grossed up" for federal and state income taxes)
             and dues for one luncheon or city club.<PAGE>   1
                                                                  EXHIBIT 10.17

                              EMPLOYMENT AGREEMENT

         This EMPLOYMENT AGREEMENT is entered into as of this 1st day of
November, 1998 by and among Riverwood International Corporation, a Delaware
corporation ("Employer"), Riverwood Holding, Inc., a Delaware corporation
("Holding") and Steven D. Saucier ("Executive").

                             W I T N E S S E T H :

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

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

         WHEREAS, each of Employer, Holding and Executive agrees that Executive
will have a prominent role in the management of the business, and the
development of the goodwill, of Employer and its Affiliates (as defined below)
and will establish and develop relations and contacts with the principal
customers and suppliers of Employer and its Affiliates in the United States and
the rest of the world, all of which constitute valuable goodwill of, and could
be used by Executive to compete unfairly with, Employer and its Affiliates;

         WHEREAS, (i) in the course of his employment with Employer, Executive
will obtain confidential and proprietary information and trade secrets
concerning the business and operations of Employer and its Affiliates in the
United States and the rest of the world that could be used to compete unfairly
with Employer and its Affiliates; (ii) the covenants and restrictions contained
in Sections 8 through 13, inclusive, are intended to protect the legitimate
interests of Employer and its Affiliates in their respective goodwill, trade
secrets and other confidential and proprietary information; and (iii) Executive
desires to be bound by such covenants and restrictions;

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

           Agreement to Employ. Upon the terms and subject to the conditions of
this Agreement, Employer hereby employs Executive, and Executive hereby accepts
employment by Employer.
<PAGE>   2

         2.      Term; Position and Responsibilities.

         (a) Term of Employment. Unless Executive's employment shall sooner
terminate pursuant to Section 7, Employer shall employ Executive for a term
commencing on the date hereof and ending on the third anniversary of the date
hereof (the "Initial Term"). Effective upon the expiration of the Initial Term
and of each Additional Term (as defined below), Executive's employment
hereunder shall be deemed to be automatically extended, upon the same terms and
conditions, for an additional period of one year (each, an "Additional Term"),
in each such case, commencing upon the expiration of the Initial Term or the
then current Additional Term, as the case may be, unless Employer, at least 180
days prior to the expiration of the Initial Term or such Additional Term, shall
give written notice (a "Non-Extension Notice") to Executive of its intention
not to extend the Employment Period (as defined below) hereunder, provided that
a Non-Extension Notice shall not constitute a notice to Executive of the
termination of his employment by Employer unless such notice specifically
provides for such termination of employment and the specific date thereof. The
period during which Executive is employed pursuant to this Agreement, including
any extension thereof in accordance with the preceding sentence, shall be
referred to as the "Employment Period".

         (b) Position and Responsibilities. During the Employment Period,
Executive shall serve as Senior Vice President, Paperboard Operations of
Employer and have such duties and responsibilities as are customarily assigned
to individuals serving in such position and such other duties consistent with
Executive's title and position as the Board of Directors of Employer
("Employer's Board") specifies from time to time. Executive shall report to the
Company's President and Chief Executive Officer. Executive shall devote all of
his skill, knowledge and working time (except for (i) vacation time as set
forth in Section 6(c) and absence for sickness or similar disability and (ii)
to the extent that it does not interfere with the performance of Executive's
duties hereunder, (A) such reasonable time as may be devoted to service on
boards of directors of other corporations and entities, subject to the
provisions of Section 9, and the fulfillment of civic responsibilities and (B)
such reasonable time as may be necessary from time to time for personal
financial matters) to the conscientious performance of the duties and
responsibilities of such position. If so elected or designated by the
respective shareholders thereof, Executive shall serve as a member of the
Boards of Directors of Holding, Employer and their respective Affiliates during
the Employment Period without additional compensation.

         3.      Base Salary. As compensation for the services to be performed
by Executive during the Employment Period, Employer shall pay Executive a base
salary at an annualized rate of $225,000, payable in installments on Employer's
regular payroll dates, and, in the event that Executive's employment hereunder
is terminated by death, for the

                                       2
<PAGE>   3

remainder of the pay period in which death occurs and for one month thereafter.
Employer's Board shall review Executive's base salary annually during the
period of his employment hereunder and, in its sole discretion, Employer's
Board may increase (but may not decrease) such base salary from time to time
based upon the performance of Executive, the financial condition of Employer,
prevailing industry salary levels and such other factors as Employer's Board
shall consider relevant. (The annual base salary payable to Executive under
this Section 3, as the same may be increased from time to time and without
regard to any reduction therefrom in accordance with the next sentence, shall
hereinafter be referred to as the "Base Salary".) The Base Salary payable under
this Section 3 shall be reduced to the extent that Executive elects to defer
such Base Salary under the terms of any deferred compensation, savings plan or
other voluntary deferral arrangement that may be maintained or established by
Employer.

         Following the conclusion of Executive's first month of employment,
Executive shall receive a one-time signing bonus of $50,000.

         4.      Incentive Compensation Arrangements.

         (a) Incentive Compensation. During the Employment Period, Executive
shall participate in Employer's incentive compensation programs for its senior
executives existing from time to time, at a level commensurate with his
position and duties with Employer and based on such performance targets as may
be established from time to time by Employer's Board or a committee thereof.
For 1999, Executive's aggregate annual target bonus opportunity shall be 60% of
Base Salary, provided that Executive's actual annual bonus for 1999 shall be
not less than 30% of his Base Salary; provided, further, that if Executive
commits to purchase 50% or more of the shares of Common Stock offered to
Executive pursuant to Section 4(b) below by December 1, 1999, Executive's
annual target bonus opportunity for the year in which such purchase occurs and
each subsequent year during the Employment Period shall be 100% of Base Salary
and for 1999 and 2000 shall be not less than $200,000.

         (b) Commitment to Purchase Shares.

             (i)   Executive will be given the opportunity to commit to purchase
         by no later than May 1, 2001, a minimum of 3,750 and no more than
         7,500 shares of the Class A Common Stock of Holding, par value $.01
         per share (the "Common Stock"), at a purchase price per share of $100
         (the "Per Share Price"). Executive must commit to such purchase by no
         later than December 1, 1999 (the shares of Common Stock that Executive
         so commits to purchase, the "Equity Commitment"). In no event,
         however, will Holding be required to offer to sell or to sell any
         Shares to Executive at any time at which making

                                       3
<PAGE>   4

         such an offer or selling any such Shares would violate any applicable
         securities law. The terms and conditions of Executive's purchase of
         any Shares, including the restrictions on transfer of the Shares, the
         right of first refusal of Holding with respect to such Shares, the
         right of Holding to repurchase all or a portion of such Shares from
         Executive following any termination of Executive's employment and the
         applicable repurchase price and the respective tag along and drag
         along rights of Executive and Holding, shall be set forth in a
         separate Management Stock Subscription Agreement, in the form
         customarily used by Holding for such purpose, to be entered into by
         and between Parent and Executive.

              (ii)    On the date the Company pays its annual bonus each of 1999
         and 2000, Executive shall, and hereby agrees to, apply the lesser of
         (A) the after-tax proceeds to him of such annual bonus payment less
         an amount sufficient to cover any income or employment tax
         consequences of his purchase of the Shares pursuant to this paragraph
         in the event his purchase price is less than the fair market value of
         the Shares at the time of purchase (such tax calculations to be
         determined by an accountant or other advisor to the Executive and as
         if Executive is subject to the highest marginal income tax rates for
         federal, state and local tax purposes that are applicable to Executive
         at such time (and taking into account the deductibility of state and
         local income taxes for federal income tax purposes), and including,
         FICA/FUTA and all other similar taxes and (B) the aggregate purchase
         price of such shares of his Equity Commitment that he has remain
         unpurchased, to the purchase of any shares of his Equity Commitment
         that he has not previously purchased. If, after application of the
         available proceeds of Executive's annual bonus with respect to 1999
         and 2000 as provided in the preceding sentence, there remains any
         portion of Executive's Equity Commitment that he has not purchased,
         Executive shall purchase such remaining portion by no later than May
         1, 2001. If Executive's employment terminates for any reason prior to
         his satisfaction of his entire Equity Commitment, any remaining Equity
         Commitment shall be cancelled.

              (iii)    In the event of a Change in Control (as defined in the
         Stock Incentive Plan referred to in Section 4(c) below) prior to the
         date Executive has purchases all shares of his Equity Commitment, (i)
         Executive's obligation to purchase any remaining shares of his Equity
         Commitment shall terminate and (ii) Executive shall receive from
         Employer a payment equal to the product of (A) the excess, if any, of
         the Per Share Price over the Change in Control Price (as defined in
         the Stock Incentive Plan) and (2) the number of shares remaining
         unpurchased in his Equity Commitment on the date of such Change in
         Control.

                                       4
<PAGE>   5

         (c) Options. For each Share that Executive commits to purchase
pursuant to Sections 4(b), Executive shall be granted non-qualified stock
options (the "Service Options") to purchase two shares of Common Stock, and
non-qualified stock options (the "Performance Options" and, together with the
Service Options, the "Options") to purchase an additional one share of Common
Stock. In addition, Executive will an award of options and supplemental
guaranteed payment agreement under the Company's Supplemental Long-Term
Incentive Plan. Such awards pursuant to and in accordance with the terms of the
Riverwood Holding, Inc. Stock Incentive Plan and Supplemental Long-Term
Incentive Plan and shall otherwise be subject to the terms and conditions
(which shall include those described in this Section 4(b)) set forth in a
separate agreements, in the form customarily used for such purpose, to be
entered into by Executive and Holding. The per share exercise price for the
options shall be the Per Share Price.

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

         6.      Perquisites and Expenses.

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

         (b) Business Travel, Lodging, etc. Employer shall reimburse Executive
for reasonable travel, lodging, meal and other reasonable expenses incurred by
him in connection with his performance of services hereunder upon submission of
evidence, satisfactory to Employer, of the incurrence and purpose of each such
expense and otherwise in accordance with Employer's business travel
reimbursement policy applicable to its senior executives as in effect from time
to time.

         (c) Vacation. During the Employment Period, Executive shall be entitled
to a number of weeks of paid vacation on an annualized basis, without carryover
accumulation, equal to the greater of (i) four weeks and (ii) the number of
weeks of paid

                                       5
<PAGE>   6

vacation per year applicable to senior executives of Employer in accordance
with its vacation policy as in effect from time to time.

         7.      Termination of Employment.

         (a) Termination Due to Death or Disability. In the event that
Executive's employment hereunder terminates due to death or is terminated by
Employer due to Executive's Disability (as defined below), no termination
benefits shall be payable to or in respect of Executive except as provided in
Section 7(f)(ii). For purposes of this Agreement, "Disability" shall mean a
physical or mental disability that prevents or would prevent the performance by
Executive of his duties hereunder for a continuous period of six months or
longer. The determination of Executive's Disability shall (i) be made by an
independent physician who is reasonably acceptable to Employer and Executive
(or his representative), (ii) be final and binding on the parties hereto and
(iii) be based on such competent medical evidence as shall be presented to such
independent physician by Executive and/or Employer or by any physician or group
of physicians or other competent medical experts employed by Executive and/or
Employer to advise such independent physician.

         (b) Termination by Employer for Cause. Executive may be terminated for
Cause (as defined below) by Employer, provided that Executive shall be
permitted to attend a meeting of Employer's Board within 30 days after delivery
to him of a Notice of Termination (as defined below) pursuant to this Section
7(b) to explain why he should not be terminated for Cause and, if following any
such explanation by Executive, Employer's Board determines that Employer does
not have Cause to terminate Executive's employment, any such prior Notice of
Termination delivered to Executive shall thereupon be withdrawn and of no
further force or effect. "Cause" shall mean (i) the willful failure of
Executive substantially to perform his duties hereunder (other than any such
failure due to Executive's physical or mental illness) or other willful and
material breach by Executive of any of his obligations hereunder or under any
option agreement or other incentive award agreement, after a written demand for
substantial performance has been delivered, and a reasonable opportunity to
cure has been given, to Executive by Employer's Board, which demand identifies
in reasonable detail the manner in which Employer's Board believes that
Executive has not substantially performed his duties or has breached his
obligations, (ii) Executive's engaging in willful and serious misconduct that
has caused or is reasonably expected to result in material injury to Employer
or any of its Affiliates or (iii) Executive's conviction of, or entering a plea
of guilty or nolo contendere to, a crime that constitutes a felony.

                                       6
<PAGE>   7

         (c) Termination Without Cause. A termination "Without Cause" shall mean
a termination of employment by Employer other than due to Disability as
described in Section 7(a) or for Cause as described in Section 7(b).

         (d) Termination by Executive. Executive may terminate his employment
for any reason. A termination of employment by Executive for "Good Reason"
shall mean a termination by Executive of his employment with Employer within 30
days following the occurrence, without Executive's consent, of any of the
following events: (i) the assignment to Executive of duties that are
significantly different from, and that result in a substantial diminution of,
the duties that he is to assume on the date hereof, (ii) the failure of
Employer to obtain the assumption of this Agreement by any Successor (as
defined below) to Employer as contemplated by Section 14, (iii) a reduction in
the rate of Executive's Base Salary, (iv) a material breach by Employer of any
of its obligations hereunder or by Holding of any of its obligations under any
option agreement or other incentive award agreement or (v) delivery to
Executive of a Non-Extension Notice, provided that, in the case of any of
clauses (i), (iii) or (iv), within 30 days following the occurrence of any of
the events set forth therein, Executive shall have delivered written notice to
Employer of his intention to terminate his employment for Good Reason, which
notice specifies in reasonable detail the circumstances claimed to give rise to
Executive's right to terminate his employment for Good Reason, and Employer or
Holding, as the case may be, shall not have cured such circumstances to the
reasonable satisfaction of Executive.

         (e) Notice of Termination. Any termination by Employer pursuant to
Section 7(a), 7(b) or 7(c), or by Executive pursuant to Section 7(d), shall be
communicated by a written Notice of Termination addressed to the other parties
to this Agreement. A "Notice of Termination" shall mean a notice stating that
Executive's employment with Employer has been or will be terminated.

         (f) Payments Upon Certain Terminations.

         (i)   In the event of a termination of Executive's employment by
Employer Without Cause or a termination by Executive of his employment for Good
Reason during the Employment Period, Employer shall pay to Executive (or,
following his death, to Executive's beneficiaries):

         (A) his Base Salary, which shall be payable in installments on
     Employer's regular payroll dates, for the period (the "Severance Period")
     beginning on the Date of Termination (as defined below) and ending on the
     last to occur of (1) the last day of the Initial Term or, if applicable,
     the then current Additional Term, (2) the first anniversary of the Date of
     Termination and (3) and the expiration of a number of

                                       7
<PAGE>   8

     months equal to the number of years of Executive's service with Employer
     completed as of the Date of Termination and

         (B) the product of (1) the amount of incentive compensation that
     would have been payable to Executive for the calendar year in which the
     Date of Termination occurs if Executive had remained employed for the
     entire calendar year and assuming that all applicable performance targets
     had been achieved, multiplied by (2) a fraction, the numerator of which
     is equal to the number of days in such calendar year that precede the Date
     of Termination and the denominator of which is equal to 365 (such product,
     the "Pro Rata Bonus"), less

         (C) the amount, if any, paid or payable to Executive under the terms
     of any severance plan, policy, program or practice of Holding, Employer or
     any of their respective Affiliates applicable to Executive, as in effect
     on the Date of Termination;

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

         If Executive's employment shall terminate and he is entitled to
receive continued payments of his Base Salary under clause (A) of this Section
7(f)(i), Employer shall (x) continue to provide to Executive during the
Severance Period the life, medical, dental, accidental death and dismemberment
and prescription drug benefits referred to in Section 5 (the "Continued
Benefits") and (y) reimburse Executive for expenses incurred by him for
outplacement and career counseling services provided to Executive for an
aggregate amount not in excess of the lesser of (i) $25,000 and (ii) 20% of
Executive's Base Salary.

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

                                       8
<PAGE>   9

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

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

         (g) Date of Termination. As used in this Agreement, the term "Date of
Termination" shall mean (i) if Executive's employment is terminated by his
death, the date of his death, (ii) if Executive's employment is terminated by
Employer for Cause, the date on which Notice of Termination is given as
contemplated by Section 7(e) or, if later, the date of termination specified in
such Notice, and (iii) if Executive's employment is terminated by Employer
Without Cause, due to Executive's Disability or by Executive for any reason,
the date that is 30 days after the date on which Notice of Termination is given
as contemplated by Section 7(e) or, if no such Notice is given, 30 days after
the date of termination of employment.

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

         8.      Unauthorized Disclosure. During the period of Executive's
employment with Employer and the ten-year period following any termination of
such employment, without the prior written consent of Employer's Board or its
authorized representative,

                                       9
<PAGE>   10

except to the extent required by an order of a court having jurisdiction or
under subpoena from an appropriate government agency, in which event, Executive
shall use his best efforts to consult with Employer's Board prior to responding
to any such order or subpoena, and except as required in the performance of his
duties hereunder, Executive shall not disclose any confidential or proprietary
trade secrets, customer lists, drawings, designs, information regarding product
development, marketing plans, sales plans, manufacturing plans, management
organization information (including but not limited to data and other
information relating to members of the Board of Directors of Holding, Employer
or any of their respective Affiliates or to management of Holding, Employer or
any of their respective Affiliates), operating policies or manuals, business
plans, financial records, packaging design or other financial, commercial,
business or technical information (a) relating to Holding, Employer or any of
their respective Affiliates or (b) that Holding, Employer or any of their
respective Affiliates may receive belonging to suppliers, customers or others
who do business with Holding, Employer or any of their respective Affiliates
(collectively, "Confidential Information") to any third person unless such
Confidential Information has been previously disclosed to the public or is in
the public domain (other than by reason of Executive's breach of this Section
8).

         9.      Non-Competition. During the period of Executive's employment
with Employer and, following any termination thereof, the period ending on the
later of (a) the first anniversary of the Date of Termination and (b) the last
day of the Severance Period, Executive shall not, directly or indirectly, become
employed in a similar executive capacity by, engage in business with, serve as
an agent or consultant to, or become a partner, member, principal or stockholder
(other than a holder of less than 1% of the outstanding voting shares of any
publicly held company) of, The Mead Corporation, any of its subsidiaries or any
other current or future direct competitor (or any of such direct competitor's
subsidiaries or affiliates) in the paperboard and paperboard packaging business
of Holding, Employer or any of their respective subsidiaries, as determined in
good faith by Employer's Board. For purposes of this Section 9, the phrase
employment "in a similar executive capacity" shall mean employment in any
position in connection with which Executive has or reasonably would be viewed as
having powers and authorities with respect to any other Person or any part of
the business thereof that are substantially similar, with respect thereto, to
the powers and authorities assigned to the Senior Vice President, Paperboard
Operations or any superior executive officer of Employer in the By-Laws of
Employer as in effect on the date hereof, a copy of the relevant portions of
which has been delivered to Executive on or before the date hereof, and which
Executive hereby confirms that he has reviewed.

                                       10
<PAGE>   11

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

         11.     Non-Solicitation of Customers. During the Restriction Period,
Executive shall not, directly or indirectly, for his own account or for the
account of any other Person anywhere in the United States or Europe, solicit or
otherwise attempt to establish any business relationship of a nature that is
competitive with the paperboard and paperboard packaging business of Holding,
Employer or any of their respective subsidiaries, as determined in good faith by
Employer's Board any Person who is or was a customer, client or distributor of
Holding, Employer or any of their respective Affiliates at any time during which
Executive was employed by Employer (in the case of any such activity during such
time) or during the twelve-month period preceding the Date of Termination (in
the case of any such activity after the Date of Termination), other than any
such solicitation on behalf of Holding, Employer or any of their respective
Affiliates during Executive's employment with Employer.

         12.     Return of Documents. In the event of the termination of
Executive's employment for any reason, Executive shall deliver to Employer all
of (a) the property of each of Holding, Employer and their respective Affiliates
and (b) the non-personal documents and data of any nature and in whatever medium
of each of Holding, Employer and their respective Affiliates, and he shall not
take with him any such property, documents or data or any reproduction thereof,
or any documents containing or pertaining to any Confidential Information.
Whether documents or data are "personal" or "non-personal" shall be determined
as follows: Executive shall present any documents or data that he wishes to take
with him to the chief legal officer of Employer for his review. The chief legal
officer shall make an initial determination whether any such documents or data
are personal or non-personal, and with respect to such documents or data that he
determines to be non-personal, shall notify Executive either that such documents
or data must be retained by Employer or that Employer must make and retain a
copy thereof before Executive may take such documents or data with him. Any
disputes as to the personal or non-personal nature of any such documents or data
shall first be presented to

                                       11
<PAGE>   12

the Chairman of Employer's Board or to another representative designated by
Employer's Board, and if such disputes are not promptly resolved by Executive
and the Chairman or such representative, such disputes shall be resolved
through arbitration pursuant to Section 17(b).

         13.     Injunctive Relief with Respect to Covenants; Forum, Venue and
Jurisdiction. Executive acknowledges and agrees that the covenants, obligations
and agreements of Executive contained in Sections 8, 9, 10, 11, 12 and 13 relate
to special, unique and extraordinary matters and that a violation of any of the
terms of such covenants, obligations or agreements will cause Employer
irreparable injury for which adequate remedies are not available at law.
Therefore, Executive agrees that Employer shall be entitled to an injunction,
restraining order or such other equitable relief (without the requirement to
post bond) as a court of competent jurisdiction may deem necessary or
appropriate to restrain Executive from committing any violation of such
covenants, obligations or agreements. These injunctive remedies are cumulative
and in addition to any other rights and remedies Employer may have. Employer,
Holding and Executive hereby irrevocably submit to the exclusive jurisdiction of
the courts of the State of New York and the Federal courts of the United States
of America, in each case located in New York City, in respect of the injunctive
remedies set forth in this Section 13 and the interpretation and enforcement of
Sections 8, 9, 10, 11, 12 and 13 insofar as such interpretation and enforcement
relate to any request or application for injunctive relief in accordance with
the provisions of this Section 13, and the parties hereto hereby irrevocably
agree that (a) the sole and exclusive appropriate venue for any suit or
proceeding relating solely to such injunctive relief shall be in such a court,
(b) all claims with respect to any request or application for such injunctive
relief shall be heard and determined exclusively in such a court, (c) any such
court shall have exclusive jurisdiction over the person of such parties and over
the subject matter of any dispute relating to any request or application for
such injunctive relief, and (d) each hereby waives any and all objections and
defenses based on forum, venue or personal or subject matter jurisdiction as
they may relate to an application for such injunctive relief in a suit or
proceeding brought before such a court in accordance with the provisions of this
Section 13. All disputes not relating to any request or application for
injunctive relief in accordance with this Section 13 shall be resolved by
arbitration in accordance with Section 17(b).

         14.     Assumption of Agreement. Employer shall require any Successor
thereto, by agreement in form and substance reasonably satisfactory to
Executive, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that Employer would be required to perform it if
no such succession had taken place. Failure of Employer to obtain such agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle Executive to

                                       12
<PAGE>   13

compensation from Employer in the same amount and on the same terms as
Executive would be entitled hereunder if Employer had terminated Executive's
employment Without Cause as described in Section 7, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Date of Termination.

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

         16.     Indemnification. Employer hereby agrees that it shall indemnify
and hold harmless Executive to the fullest extent permitted by Delaware law from
and against any and all liabilities, costs, claims and expenses, including all
costs and expenses incurred in defense of litigation (including attorneys'
fees), arising out of the employment of Executive hereunder, except to the
extent arising out of or based upon the gross negligence or willful misconduct
of Executive. Costs and expenses incurred by Executive in defense of such
litigation (including attorneys' fees) shall be paid by Employer in advance of
the final disposition of such litigation upon receipt by Employer of (a) a
written request for payment, (b) appropriate documentation evidencing the
incurrence, amount and nature of the costs and expenses for which payment is
being sought, and (c) an undertaking adequate under Delaware law made by or on
behalf of Executive to repay the amounts so paid if it shall ultimately be
determined that Executive is not entitled to be indemnified by Employer under
this Agreement, including but not limited to as a result of such exception.

         17.     Miscellaneous.

         (a)  Binding Effect; Assignment. This Agreement shall be binding on and
inure to the benefit of Employer, Holding and their respective successors and
permitted assigns. This Agreement shall also be binding on and inure to the
benefit of Executive and his heirs, executors, administrators and legal
representatives. This Agreement shall not be assignable by any party hereto
without the prior written consent of the other parties hereto, except as
provided pursuant to this Section 17(a). Each of Holding and Employer may
effect such an assignment without prior written approval of Executive upon the
transfer of all or substantially all of its business and/or assets (by whatever

                                       13
<PAGE>   14

means), provided that the Successor to Employer shall expressly assume and
agree to perform this Agreement in accordance with the provisions of Section
14.

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

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

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

         (e)    Amendments. No provision of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is approved
by Employer's Board or a Person authorized thereby and is agreed to in writing
by Executive and, in the case of any such modification, waiver or discharge
affecting the rights or obligations of Holding, is approved by the Board of
Directors of Holding or a Person authorized thereby. No waiver by any party
hereto at any time of any breach by any other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No waiver of any
provision of this Agreement shall be implied from any course of dealing between
or among the parties hereto or from any failure by any party hereto to assert
its rights hereunder on any occasion or series of occasions.

                                       14
<PAGE>   15

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

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

         (A) If to Employer, to it at:

             Riverwood International Corporation
             3350 Cumberland Circle
             Suite 1400
             Atlanta, Georgia  30339
             Attention:  General Counsel

         (B) if to Holding, to it at:

             c/o Riverwood International Corporation
             3350 Cumberland Circle
             Suite 1400
             Atlanta, Georgia  30339
             Attention:  General Counsel

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

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

             Clayton, Dubilier & Rice, Inc.
             375 Park Avenue
             New York, New York  10152
             Attention:  Mr. Kevin J. Conway

                       and

                                       15
<PAGE>   16

             Debevoise & Plimpton
             875 Third Avenue
             New York, New York  10022
             Attention:  Franci J. Blassberg, Esq.

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

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

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

         (k) Certain Definitions.

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

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

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

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

                                       16
<PAGE>   17

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

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

                              RIVERWOOD INTERNATIONAL CORPORATION

                              By:/s/ Stephen M. Humphrey
                                 -----------------------
                               Name: Stephen M. Humphrey
                               Title: President and Chief Executive Officer

                              RIVERWOOD HOLDING, INC.

                              By:/s/ Stephen M. Humphrey
                                 -----------------------
                               Name: Stephen M. Humphrey
                               Title: President and Chief Executive Officer

                              Executive:

                              /s/ Steven D. Saucier
                              ----------------------
                              Steven D. Saucier

                                       17
<PAGE>   18

                                                                     Schedule I

                                  Perquisites

1.         Annual executive physical.

2.         Reimbursement up to $1,000 annually for expenses relating to income
           tax preparation plus additional fees if incurred on account of
           job-related circumstances and the cost of representation by return
           preparer during any audit.

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

4.         Subject to the advance approval of the CEO, reimbursement for
           initiation fees ("grossed up" for federal and state income taxes) and
           dues for one country club and one luncheon or city club.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00003-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00003-of-00352.parquet"}]]