Document:

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                                                                    EXHIBIT 4.01

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                          SUPPLEMENTAL INDENTURE NO. 3
                                      FROM

                              NORTHERN STATES POWER
                                     COMPANY
                            (A MINNESOTA CORPORATION)

                                       TO

                           WELLS FARGO BANK MINNESOTA,
        NATIONAL ASSOCIATION (FORMERLY, NORWEST BANK MINNESOTA, NATIONAL
                                  ASSOCIATION)

                                     TRUSTEE

                                   ----------

                                   DATED AS OF

                                  JULY 1, 2002

                            SUPPLEMENTAL TO INDENTURE
                            DATED AS OF JULY 1, 1999

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                                TABLE OF CONTENTS

<Table>
<S>                                                                                                  <C>
PARTIES         ......................................................................................1

RECITALS        ......................................................................................1

                                              ARTICLE ONE
                                  RELATION TO INDENTURE; DEFINITIONS

SECTION 1.01      Integral Part of Indenture..........................................................2
SECTION 1.02      (a)      Definitions................................................................2
                  (b)      References to Articles and Sections........................................2
                  (c)      Terms Referring to this Supplemental Indenture.............................2

                                              ARTICLE TWO
                                     8.00% NOTES, SERIES DUE 2042

SECTION 2.01      Designation and Principal Amount....................................................2
SECTION 2.02      Stated Maturity Date................................................................2
SECTION 2.03      Interest Payment Dates..............................................................2
SECTION 2.04      Office for Payment..................................................................3
SECTION 2.05      Redemption Provisions...............................................................3
SECTION 2.06      Authorized Denominations............................................................3
SECTION 2.07      Form of 8.00% Notes, Series Due 2042 ...............................................3

                                             ARTICLE THREE
                                               COVENANTS

SECTION 3.01      Limitation on Liens.................................................................3
SECTION 3.02      Certain Definitions.................................................................4

                                             ARTICLE FOUR
                                             MISCELLANEOUS

SECTION 4.01      Recitals of fact, except as stated, are statements
                  of the Company......................................................................6
SECTION 4.02      Supplemental Indenture to be construed as a part
                  of the Indenture....................................................................6
SECTION 4.03      (a)      Trust Indenture Act to control.............................................7
                  (b)      Severability of provisions contained in
                           Supplemental Indenture and Notes...........................................7
SECTION 4.04      References to either party in Supplemental Indenture
                  include successors or assigns.......................................................7
SECTION 4.05      (a)      Provision for execution in counterparts....................................7
                  (b)      Table of Contents and descriptive headings
                           of Articles not to affect meaning..........................................9

Exhibit A - Form of 8.00% Notes, Series due 2042
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         SUPPLEMENTAL INDENTURE No. 3, made as of the 1ST day of July, 2002, by
and between NORTHERN STATES POWER COMPANY, a corporation duly organized and
existing under the laws of the State of Minnesota (the "Company"), and WELLS
FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States, as trustee (the
"Trustee"):

WITNESSETH:

         WHEREAS, Xcel Energy Inc., the parent corporation of the Company ("Xcel
Energy"), has heretofore executed and delivered an Indenture (hereinafter
referred to as the "Original Indenture"), made as of July 1, 1999;

         WHEREAS, Xcel Energy has heretofore executed and delivered a
Supplemental Indenture No. 1 ("Supplemental Indenture No. 1"), made as of July
15, 1999, which created a series of Securities designated "6.875% Senior Notes,
Series due 2009";

         WHEREAS, Xcel Energy and the Company have heretofore delivered a
Supplemental Indenture No. 2 (and collectively with the Original Indenture and
Supplemental Indenture No. 1, the "Indenture"), made as of August 18, 2000,
pursuant to which the Company assumed all of the obligations of Xcel Energy
under the Indenture and Xcel Energy conveyed all of its rights and obligations
under the Indenture to the Company;

         WHEREAS, Section 2.5 of the Original Indenture provides that Securities
shall be issued in series and that a Company Order shall specify the terms of
each series;

         WHEREAS, the Company has this day delivered a Company Order setting
forth the terms of a series of Securities designated "8.00% Notes, Series due
2042" (hereinafter sometimes referred to as the "Notes due 2042");

         WHEREAS, Section 12.1 of the Original Indenture provides that the
Company and the Trustee may enter into indentures supplemental thereto for the
purposes, among others, of establishing the form of Securities or establishing
or reflecting any terms of any Security and adding to the covenants of the
Company; and

         WHEREAS, the execution and delivery of this Supplemental Indenture No.
3 (herein, "this Supplemental Indenture") have been duly authorized by a
resolution adopted by the Board of Directors of the Company (the "Board").

NOW, THEREFORE, THIS INDENTURE WITNESSETH:

         That in order to set forth the terms and conditions upon which the
Notes due 2042 are, and are to be, authenticated, issued and delivered, and in
consideration of the premises of the purchase and acceptance of the Notes due
2042 by the Holders thereof and the sum of one dollar duly paid to it by the
Trustee at the execution of this Supplemental Indenture, the receipt whereof is
hereby acknowledged, the Company

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covenants and agrees with the Trustee for the equal and proportionate benefit of
the respective Holders from time to time of the Notes due 2042, as follows:

                                   ARTICLE ONE
                       RELATION TO INDENTURE; DEFINITIONS

         SECTION 1.01 This Supplemental Indenture constitutes an integral part
of the Indenture.

         SECTION 1.02 For all purposes of this Supplemental Indenture:

         (a)      Capitalized terms used herein without definition shall have
                  the meanings specified in the Indenture;

         (b)      All references herein to Articles and Sections, unless
                  otherwise specified, refer to the corresponding Articles and
                  Sections of this Supplemental Indenture; and

         (c)      The terms "hereof," "herein," "hereby," "hereto," "hereunder"
                  and "herewith" refer to this Supplemental Indenture.

                                   ARTICLE TWO
                          8.00% NOTES, SERIES DUE 2042

         SECTION 2.01 There shall be a series of Securities designated the
"8.00% Notes, Series due 2042" (the "Notes due 2042"). The Notes due 2042 shall
be limited to $175,000,000 aggregate principal amount, plus up to an additional
$26,250,000 aggregate principal amount of Notes due 2042 pursuant to an option
granted to the underwriters, exercisable until August 8, 2002, to cover
overallotments, if any.

         SECTION 2.02 Except as otherwise provided in Section 2.05 hereof, the
principal amount of the Notes due 2042 shall be payable on the stated maturity
date of July 1, 2042.

         SECTION 2.03 The Notes due 2042 shall be dated their date of
authentication as provided in the Indenture and shall bear interest from their
date at the rate of 8.00% per annum, payable quarterly on January 1, April 1,
July 1 and October 1 of each year, commencing October 1, 2002. If any such
interest payment date falls on a day that is not a business day, then payment of
interest will be made on the next succeeding business day, except that, if such
business day is in the next succeeding calendar year, such payment shall be made
on the immediately preceding business day, in each case with the same force and
effect as if made on such date. Notwithstanding the definition of "Business Day"
contained in the Indenture, for purposes of this section, "business day" means a
day other than (1) a Saturday or a Sunday, (2) a legal holiday or a day on which
banking institutions in New York, New York are authorized or obligated by law or
executive order to close, or (3) a day on which the Trustee's Corporate Trust
Office is closed for business. The Regular Record Dates with respect to such
January 1, April 1,

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July 1 and October 1 interest payment dates shall be December 15, March 15, June
15 and September 15, respectively. Except as otherwise provided in this Section
2.03, principal and interest shall be payable to the persons and in the manner
provided in Sections 2.4 and 2.12 of the Indenture.

         SECTION 2.04 The Notes due 2042 shall be payable at the corporate trust
office of the Trustee, at the New York corporate trust office of Wells Fargo
Bank Minnesota, National Association, as co-paying agent, and at the offices of
such other paying agents as the Company may appoint by Company Order in the
future.

         SECTION 2.05 On or after July 11, 2007, the Company may redeem the
Notes due 2042 at any time, in whole or in part, at a redemption price equal to
the principal amount of such Notes due 2042 to be redeemed, plus in each case
accrued interest thereon to the date of redemption.

         The Notes due 2042 shall not be subject to any sinking fund.

         SECTION 2.06 The Notes due 2042 shall be issued in fully registered
form without coupons in denominations of $25 and integral multiples thereof.

         SECTION 2.07 The Notes due 2042 shall initially be in the form attached
as Exhibit A hereto.

                                  ARTICLE THREE
                                    COVENANTS

         SECTION 3.01 So long as there remain outstanding any Notes due 2042,
the Company will not create or suffer to be created or to exist any mortgage,
pledge, security interest, or other lien (collectively, "Lien") on any of its
utility properties or assets now owned or hereafter acquired to secure any
indebtedness, without making effective provision whereby the Notes due 2042
shall be equally and ratably secured with any and all such indebtedness and with
any other indebtedness similarly entitled to be equally and ratably secured.
However, this restriction shall not apply to or prevent the creation or
existence of:

         (1)      the Mortgage securing the Company's First Mortgage Bonds or
                  any indenture supplemental thereto subjecting any property to
                  the Lien thereof or confirming the Lien thereof upon any
                  property, whether now owned or hereafter acquired;

         (2)      Liens on property existing at the time of acquisition or
                  construction of such property (or created within one year
                  after completion of such acquisition or construction), whether
                  by purchase, merger, construction or otherwise or to secure
                  the payment of all or any part of the purchase price or
                  construction cost thereof, including the extension of any such
                  Liens to repairs, renewals, replacements, substitutions,
                  betterments, additions,

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                  extensions and improvements then or thereafter made on the
                  property subject thereto;

         (3)      any extensions, renewals or replacements (or successive
                  extensions, renewals or replacements), in whole or in part, of
                  Liens permitted by the foregoing clauses (1) and (2);

         (4)      the pledge of any bonds or other securities at any time issued
                  under any of the Liens permitted by clauses (1), (2) or (3);

         (5)      Permitted Encumbrances; or

         (6)      Liens on property of any of the Company's subsidiaries,
                  including United Power and Land Co., First Midwest Auto Park
                  Inc., NSP Nuclear Corporation and NSP Financing I.

         Further, this restriction shall not apply to or prevent the creation or
existence of leases made, or existing on property acquired, in the ordinary
course of business.

         SECTION 3.02 Certain Definitions.

         "Mortgage" means the lien of the first mortgage pursuant to the Trust
Indenture, dated as of February 1, 1937, from the Company to BNY Midwest Trust
Company, as successor trustee, as supplemented by the supplemental trust
indenture, including the Supplemental and Restated Trust Indenture, dated as of
May 1, 1988 (the "First Mortgage Indenture"), securing the Company's First
Mortgage Bonds.

         "Permitted Encumbrances" means any of the following:

         (1)      Liens of taxes, assessments or governmental charges for the
                  then current year and taxes, assessments or governmental
                  charges not then delinquent; Liens for workers' compensation
                  awards and similar obligations not then delinquent;
                  mechanics', laborers', material men's and similar Liens not
                  then delinquent; and any of such Liens, whether or not
                  delinquent, whose validity is at the time being contested in
                  good faith by the Company;

         (2)      Liens and charges incidental to construction or current
                  operations which have not at the time been filed or asserted
                  or the payment of which has been adequately secured or which,
                  in the opinion of counsel, are not material in amount;

         (3)      Liens, securing obligations neither assumed by the Company nor
                  on account of which any of them customarily pays interest
                  directly or indirectly, existing, either at the date hereof,
                  or, as to property hereafter acquired, at the time of
                  acquisition by the Company;

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         (4)      Any right which any municipal or governmental body or agency
                  may have by virtue of any franchise, license, contract or
                  statute to purchase, or designate a purchaser of or order the
                  sale of, any property of the Company upon payment of
                  reasonable compensation therefor, or to terminate any
                  franchise, license or other rights or to regulate the property
                  and business of the Company;

         (5)      The Lien of judgments covered by insurance, or upon appeal and
                  covered, if necessary, by the filing of an appeal bond, or if
                  not so covered not exceeding at any one time $1,000,000 in
                  aggregate amount;

         (6)      Easements or reservations in respect of any property of the
                  Company for the purpose of roads, pipelines, utility
                  transmission and distribution lines or other rights-of- way
                  and similar purposes, zoning ordinances, regulations,
                  reservations, restrictions, covenants, party wall agreements,
                  conditions of record and other encumbrances (other than to
                  secure the payment of money), none of which in the opinion of
                  counsel are such as to interfere with the proper operation and
                  development of the property affected thereby in the business
                  of the Company for the use intended;

         (7)      Any Lien or encumbrance, moneys sufficient for the discharge
                  of which have been deposited in trust with the Trustee
                  hereunder or with the trustee or mortgagee under the
                  instrument evidencing such Lien or encumbrance, with
                  irrevocable authority to the Trustee hereunder or to such
                  other trustee or mortgagee to apply such moneys to the
                  discharge of such Lien or encumbrance to the extent required
                  for such purpose;

         (8)      Any defects of title and any terms, conditions, agreements,
                  covenants, exceptions and reservations expressed or provided
                  in deeds or other instruments, respectively, under and by
                  virtue of which the Company has acquired any property or shall
                  hereafter acquire any property, none of which, in the opinion
                  of counsel, materially adversely affects the operation of the
                  properties of the Company;

         (9)      The pledge of cash or marketable securities for the purpose of
                  obtaining any indemnity, performance or other similar bonds in
                  the ordinary course of business, or as security for the
                  payment of taxes or other assessments being contested in good
                  faith, or for the purpose of obtaining a stay or discharge in
                  the course of any legal proceedings;

         (10)     The pledge or assignment in the ordinary course of business of
                  electricity, gas (either natural or artificial) or steam,
                  accounts receivable or customers' installment paper;

         (11)     Rights reserved to or vested in others to take or receive any
                  part of the electricity, gas (either natural or artificial),
                  steam or any by-products

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                  thereof generated or produced by or from any properties of the
                  Company or with respect to any other rights concerning
                  electricity, gas (either natural or artificial) or steam
                  supply, transportation, or storage which are in use in the
                  ordinary course of the electricity, gas (either natural or
                  artificial) or steam business;

         (12)     Any landlord's Lien;

         (13)     Liens created or assumed by the Company in connection with the
                  issuance of debt securities, the interest on which is
                  excludable from the gross income of the holders of such
                  securities pursuant to Section 103 of the Internal Revenue
                  Code of 1986, or any successor section, for purposes of
                  financing, in whole or in part, the acquisition or
                  construction of property to be used by the Company, but such
                  Liens shall be limited to the property so financed (and the
                  real estate on which such property is to be located);

         (14)     Liens affixing to property of the Company at the time a Person
                  consolidates with or merges into, or transfers all or
                  substantially all of its assets to, the Company, provided that
                  in the opinion of the Board or Company management (evidenced
                  by a certified Board resolution or an Officers' Certificate
                  delivered to the Trustee) the property acquired pursuant to
                  the consolidation, merger or asset transfer is adequate
                  security for the Lien; and

         (15)     Liens or encumbrances not otherwise permitted if, at the time
                  of incurrence and after giving effect thereto, the aggregate
                  of all such Permitted Encumbrances of the Company secured
                  thereby does not exceed 10% of Tangible Net Worth.

         "Tangible Net Worth" means (i) common stockholders' equity appearing on
the most recent balance sheet of the Company (or consolidated balance sheet of
the Company and its subsidiaries if the Company then has one or more
subsidiaries the accounts of which are consolidated with the accounts of the
Company) prepared in accordance with generally accepted accounting principles
less (ii) intangible assets (excluding intangible assets recoverable through
rates as prescribed by applicable regulatory authorities).

                                  ARTICLE FOUR
                                  MISCELLANEOUS

         SECTION 4.01 The recitals of fact herein and in the Notes due 2042
(except the Trustee's Certificate) shall be taken as statements of the Company
and shall not be construed as made by the Trustee.

         SECTION 4.02 This Supplemental Indenture shall be construed in
connection with and as a part of the Indenture.

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         SECTION 4.03

         (a)      If any provision of this Supplemental Indenture limits,
                  qualifies, or conflicts with another provision of the
                  Indenture required to be included in indentures qualified
                  under the Trust Indenture Act of 1939 (as enacted prior to the
                  date of this Supplemental Indenture) by any of the provisions
                  of Sections 310 to 317, inclusive, of said Act, such required
                  provisions shall control.

         (b)      In case any one or more of the provisions contained in this
                  Supplemental Indenture or in the Notes due 2042 issued
                  hereunder should be invalid, illegal, or unenforceable in any
                  respect, the validity, legality and enforceability of the
                  remaining provisions contained herein and therein shall not in
                  any way be affected, impaired, prejudiced or disturbed
                  thereby.

         SECTION 4.04 Whenever in this Supplemental Indenture either of the
parties hereto is named or referred to, this shall be deemed to include the
successors or assigns of such party, and all the covenants and agreements in
this Supplemental Indenture contained by or on behalf of the Company or by or on
behalf of the Trustee shall bind and inure to the benefit of the respective
successors and assigns of such parties, whether so expressed or not.

         SECTION 4.05

         (a)      This Supplemental Indenture may be simultaneously executed in
                  several counterparts, and all said counterparts executed and
                  delivered, each as an original, shall constitute but one and
                  the same instrument.

         (b)      The Table of Contents and the descriptive headings of the
                  several Articles of this Supplemental Indenture were
                  formulated, used and inserted in this Supplemental Indenture
                  for convenience only and shall not be deemed to affect the
                  meaning or construction of any of the provisions hereof.

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         IN WITNESS WHEREOF, NORTHERN STATES POWER COMPANY has caused this
Supplemental Indenture to be signed by its President or a Vice President, and
attested by its Secretary or an Assistant Secretary and WELLS FARGO BANK
MINNESOTA, NATIONAL ASSOCIATION, has caused this Supplemental Indenture to be
signed by its President, Vice President, Assistant Vice President or authorized
Corporate Trust Officer, and attested by an authorized officer, this 1st day of
July 2002.

                                          NORTHERN STATES POWER COMPANY

                                          By: /s/ Paul E. Pender
                                             -----------------------------------
                                              Paul E. Pender
                                              Vice President and Treasurer
ATTEST:

By: /s/ Nancy A. Haley
   --------------------------------
      Nancy A. Haley
      Assistant Corporate Secretary
                                          WELLS FARGO BANK MINNESOTA,
                                          NATIONAL ASSOCIATION, as Trustee

                                          By: /s/ Michael T. Lechner
                                             -----------------------------------
                                              Corporate Trust Officer
ATTEST:

/s/ Jayne Sillman
------------------------
Assistant Vice President

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                                                                       EXHIBIT A

                                     FORM OF
                          8.00% NOTES, SERIES DUE 2042

REGISTERED                                                            REGISTERED

         THIS NOTE IS A GLOBAL SECURITY REGISTERED IN THE NAME OF THE DEPOSITORY
(REFERRED TO HEREIN) OR A NOMINEE THEREOF AND, UNLESS AND UNTIL IT IS EXCHANGED
IN WHOLE OR IN PART FOR THE INDIVIDUAL NOTES REPRESENTED HEREBY, THIS GLOBAL
SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE
OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS
GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK), TO THE TRUSTEE FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS
MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN.

                          NORTHERN STATES POWER COMPANY
             (INCORPORATED UNDER THE LAWS OF THE STATE OF MINNESOTA)

                          8.00% NOTES, SERIES DUE 2042

CUSIP:  _________________                               NUMBER:

ORIGINAL ISSUE DATE(S):                                 PRINCIPAL
_____________________                                   AMOUNT(S):$

INTEREST RATE:   8.00%                                  MATURITY DATE:
                                                        July 1, 2042

         NORTHERN STATES POWER COMPANY, a corporation of the State of Minnesota
(the "Company"), for value received hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of ________DOLLARS on the Maturity Date
set forth above, and to pay interest thereon from the Original Issue Date (or if
this Global Security has two or more Original Issue Dates, interest shall,
beginning on each such Original Issue Date, begin to accrue for that part of the
principal amount to which that Original Issue Date is applicable) set forth
above or from the most recent Interest Payment Date to

<PAGE>

which interest has been paid or duly provided for, quarterly in arrears on
January 1, April 1, July 1 and October 1 in each year, commencing on October 1,
2002, at the per annum Interest Rate set forth above, until the principal hereof
is paid or made available for payment. No interest shall accrue on the Maturity
Date, so long as the principal amount of this Global Security is paid on the
Maturity Date. The interest so payable and punctually paid or duly provided for
on any such Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Note is registered at the close of business on the
Regular Record Date for such interest, which shall be the December 15, March 15,
June 15 or September 15, as the case may be, next preceding such Interest
Payment Date; provided, that the first Interest Payment Date for any part of
this Note, the Original Issue Date of which is after a Regular Record Date but
prior to the applicable Interest Payment Date, shall be the Interest Payment
Date following the next succeeding Regular Record Date; and provided, that
interest payable on the Maturity Date set forth above or, if applicable, upon
redemption or acceleration, shall be payable to the Person to whom principal
shall be payable. Except as otherwise provided in the Indenture (as defined
below), any such interest not so punctually paid or duly provided for will
forthwith cease to be payable to the Holder on such Regular Record Date and
shall be paid to the Person in whose name this Note is registered at the close
of business on a Special Record Date for the payment of such defaulted interest
to be fixed by the Trustee, notice whereof shall be given to Securityholders not
more than fifteen days or fewer than ten days prior to such Special Record Date.
On or before Noon, New York City time, or such other time as shall be agreed
upon between the Trustee and the Depository, of the day on which such payment of
interest is due on this Global Security (other than maturity), the Trustee shall
pay to the Depository such interest in same day funds. On or before Noon, New
York City time, or such other time as shall be agreed upon between the Trustee
and the Depository, of the day on which principal, and interest payable at
maturity is due on this Global Security and following receipt of the necessary
funds from the Company, the Trustee shall deposit with the Depository the amount
equal to the principal, and interest payable at maturity by wire transfer into
the account specified by the Depository. As a condition to the payment, on the
Maturity Date or upon redemption or acceleration, of any part of the principal
of this Global Security, the Depository shall surrender, or cause to be
surrendered, this Global Security to the Trustee, whereupon a new Global
Security shall be issued to the Depository.

         This Global Security is a global security in respect of a duly
authorized issue of Notes, Series due 2042 (the "Notes of this Series", which
term includes any Global Securities representing such Notes) of the Company
issued and to be issued under an Indenture dated as of July 1, 1999 between the
Company, as successor obligor, and Wells Fargo Bank Minnesota, National
Association, as successor trustee (herein called the "Trustee", which term
includes any successor Trustee under the Indenture) and indentures supplemental
thereto (collectively, the "Indenture"). Under the Indenture, one or more series
of Securities may be issued and, as used herein, the term "Securities" refers to
the Notes of this Series and any other outstanding series of Securities.
Reference is hereby made for a more complete statement of the respective rights,
limitations of rights, duties and immunities under the Indenture of the Company,
the Trustee and the

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Securityholders and of the terms upon which the Securities are and are to be
authenticated and delivered. This Global Security has been issued in respect of
the series designated on the first page hereof, which series is limited in
aggregate principal amount to $201,250,000.

         Each Note of this Series shall be dated and issued as of the date of
its authentication by the Trustee and shall bear an Original Issue Date or
Dates. Each Security or Global Security issued upon transfer, exchange or
substitution of such Security or Global Security shall bear the Original Issue
Date or Dates of such transferred, exchanged or substituted Security or Global
Security, as the case may be.

         On or after July 11, 2007, the Company may redeem the Notes of this
Series at any time, in whole or in part, at a redemption price equal to the
principal amount of such Notes of this Series to be redeemed, plus accrued
interest to the date of redemption.

         Notice of redemption will be given by mail to Holders of Notes of this
Series not less than 30 or more than 60 days prior to the date fixed for
redemption, all as provided in the Indenture. In the event of redemption of this
Global Security in part only, a new Global Security or Securities of like tenor
and series for the unredeemed portion hereof will be issued in the name of the
Securityholder hereof upon the surrender hereof.

         Interest payments for this Global Security shall be computed and paid
on the basis of a 360-day year of twelve 30-day months. In any case where any
Interest Payment Date or date on which the principal of this Global Security is
required to be paid is not a Business Day, then payment of principal or interest
need not be made on such date but may be made on the next succeeding Business
Day, except that if such Business Day is in the next succeeding calendar year,
such payment shall be made on the immediately preceding Business Day, in each
case, with the same force and effect as if made on such Interest Payment Date or
date on which the principal of this Global Security is required to be paid and,
in the case of timely payment thereof, no interest shall accrue for the period
from and after such Interest Payment Date or the date on which the principal of
this Global Security is required to be paid. For purposes of this section,
"Business Day" means a day other than (1) a Saturday or a Sunday, (2) a legal
holiday or a day on which banking institutions in New York, New York are
authorized or obligated by law or executive order to close, or (3) a day on
which the Trustee's Corporate Trust Office is closed for business.

         The Company, at its option, and subject to the terms and conditions
provided in the Indenture, will be discharged from any and all obligations in
respect of the Securities (except for certain obligations including obligations
to register the transfer or exchange of Securities, replace stolen, lost or
mutilated Securities, maintain paying agencies and hold monies for payment in
trust, all as set forth in the Indenture) if the Company deposits with the
Trustee money, U.S. Government Obligations which through the payment of interest
thereon and principal thereof in accordance with their terms will provide money,
or a combination of money and U.S. Government Obligations, in any event in an
amount sufficient, without reinvestment, to pay all the principal of and any
premium and interest

                                       3
<PAGE>

on the Securities on the dates such payments are due in accordance with the
terms of the Securities.

         If an Event of Default shall occur and be continuing, the principal of
the Securities may be declared due and payable in the manner and with the effect
provided in the Indenture.

         The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modifications of the rights and obligations of the
Company and the rights of the Securityholders under the Indenture at any time by
the Company and the Trustee with the consent of the Holders of not less than a
majority in principal amount of the outstanding Securities. Any such consent or
waiver by the Holder of this Global Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Global Security and of any
Note issued upon the registration of transfer hereof or in exchange therefor or
in lieu thereof whether or not notation of such consent or waiver is made upon
the Note.

         As set forth in and subject to the provisions of the Indenture, no
Holder of any Securities will have any right to institute any proceeding with
respect to the Indenture or for any remedy thereunder unless such Holder shall
have previously given to the Trustee written notice of a continuing Event of
Default with respect to such Securities, the Holders of not less than a majority
in principal amount of the outstanding Securities affected by such Event of
Default shall have made written request and offered reasonable indemnity to the
Trustee to institute such proceeding as Trustee and the Trustee shall have
failed to institute such proceeding within 60 days; provided, however, that such
limitations do not apply to a suit instituted by the Holder hereof for the
enforcement of payment of the principal of and interest on this Note on or after
the respective due dates expressed here.

         No reference herein to the Indenture and to provisions of this Global
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
interest on this Global Security at the times, places and rates and the coin or
currency prescribed in the Indenture.

         As provided in the Indenture and subject to certain limitations therein
set forth, this Global Security may be transferred only as permitted by the
legend hereto.

         If at any time the Depository for this Global Security notifies the
Company that it is unwilling or unable to continue as Depository for this Global
Security or if at any time the Depository for this Global Security shall no
longer be eligible or in good standing under the Securities Exchange Act of
1934, as amended, or other applicable statute or regulation, the Company shall
appoint a successor Depository with respect to this Global Security. If a
successor Depository for this Global Security is not appointed by the Company
within 90 days after the Company receives such notice or becomes aware of such
ineligibility, the Company's election to issue this Note in global form shall no
longer be effective with respect to this Global Security and the Company will
execute, and the

                                       4
<PAGE>

Trustee, upon receipt of a Company Order for the authentication and delivery of
individual Notes of this Series in exchange for this Global Security, will
authenticate and deliver individual Notes of this Series of like tenor and terms
in definitive form in an aggregate principal amount equal to the principal
amount of this Global Security.

         The Company may at any time and in its sole discretion determine that
all Notes of this Series (but not less than all) issued or issuable in the form
of one or more Global Securities shall no longer be represented by such Global
Security or Securities. In such event, the Company shall execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
individual Notes of this Series in exchange for such Global Security, shall
authenticate and deliver, individual Notes of this Series of like tenor and
terms in definitive form in an aggregate principal amount equal to the principal
amount of such Global Security or Securities in exchange for such Global
Security or Securities.

         Under certain circumstances specified in the Indenture, the Depository
may be required to surrender any two or more Global Securities which have
identical terms (but which may have differing Original Issue Dates) to the
Trustee, and the Company shall execute and the Trustee shall authenticate and
deliver to, or at the direction of, the Depository a Global Security in
principal amount equal to the aggregate principal amount of, and with all terms
identical to, the Global Securities surrendered thereto and that shall indicate
all Original Issue Dates and the principal amount applicable to each such
Original Issue Date.

         The Indenture and the Securities shall be governed by, and construed in
accordance with, the laws of the State of Minnesota.

         Unless the certificate of authentication hereon has been executed by
the Trustee, directly or through an Authenticating Agent by manual signature of
an authorized officer, this Global Security shall not be entitled to any benefit
under the Indenture or be valid or obligatory for any purpose.

         All terms used in this Global Security which are defined in the
Indenture shall have the meanings assigned to them in the Indenture unless
otherwise indicated herein.

                                       5
<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.

                                        NORTHERN STATES POWER COMPANY

                                        By:
                                           -------------------------------------
                                           Paul E. Pender

Dated:                                  Title: Vice President and Treasurer

                                        Attest:
                                               ---------------------------------
                                               Cathy J. Hart
                                        Title: Corporate Secretary

        TRUSTEE'S CERTIFICATE
          OF AUTHENTICATION

This Note is one of the Securities of the
series herein designated, described or
provided for in the within-mentioned
Indenture.

WELLS FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION, as Trustee

By:
   ---------------------------------
   Authorized Officer

                                       6
<PAGE>

                                  ABBREVIATIONS

         The following abbreviations, when used in the inscription on the face
of this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:

TEN COM -- as tenants in common          UNIF GIFT
                                         MIN ACT -- _____ Custodian ___________
                                                    (Cust)             (Minor)

TEN ENT -- as tenants by the             Under Uniform Gifts to Minors
entireties

JT TEN -- as joint tenants with          ______________________________________
right of survivorship and not as
tenants in common                        State

                      Additional abbreviations may also be
                       used though not in the above list.

                                   ----------

               FOR VALUE RECEIVED the undersigned hereby sell(s),
                         assign(s) and transfer(s) unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE

--------------------------------------------------------------------------------
                   Please print or typewrite name and address
                      including postal zip code of assignee

-------------------------------------------
the within security and all rights
thereunder, hereby irrevocably constituting
and appointing ____________ attorney to
transfer said security on the books of the
Company, with full power of substitution in
the premises.

Dated:
      ----------------------------
                                    --------------------------------------------
                                    NOTICE: The signature to this assignment
                                    must correspond with the name as written
                                    upon the face of the within instrument in
                                    every particular, without alteration or
                                    enlargement or any change whatever.

                                       7<PAGE>

                              EMPLOYMENT AGREEMENT

                                     Between

                          GRAHAM PACKAGING COMPANY L.P.

                                       And

                           The Chief Executive Officer

<PAGE>

                              EMPLOYMENT AGREEMENT

       EMPLOYMENT AGREEMENT dated as of June 27, 2002 (the "Agreement") between
Graham Packaging Company, L.P., a Delaware Limited Partnership ("Limited
Partnership", or "L.P." or "Company"), and Phillip R. Yates ("Executive").

       WHEREAS, the Company desires to continue to employ Executive as its Chief
Executive Officer and Executive desires to remain employed as the Chief
Executive Officer on the terms and subject to the conditions set forth herein:

       NOW, THEREFORE, in consideration of the promises and the mutual
agreements contained herein, the Company and Executive hereby agree as follows:

                                   Article I.

                                   DEFINITIONS

       The terms set forth below have the following meanings (such meanings to
be applicable to both the singular and plural forms, except where otherwise
expressly indicated):

1.1    "Accounting Firm" - see Exhibit A.

1.2    "Accrued Annual Bonus" means the amount of any Annual Bonus earned but
       not yet paid with respect to the Year ended prior to the Date of
       Termination. Such bonus is considered earned for a given Year as of
       December 31 of that Year.

1.3    "Accrued Base Salary" means the amount of Executive's Base Salary that is
       accrued but not yet paid as of the Date of Termination.

1.4    "Affiliate" means any Person directly or indirectly controlling,
       controlled by, or under direct or indirect common control with, the
       Company. For the purposes of this definition, the term "control" when
       used with respect to any Person means the power to direct or cause the
       direction of management or policies of such Person, directly or
       indirectly, whether through the ownership of voting securities, by
       contract or otherwise.

1.5    "Agreement" - see the recitals to this Agreement

1.6    "Agreement Date" means the date that is specified in the recitals to this
       Agreement.

                                       1
<PAGE>

1.7    "Anniversary Date" means any anniversary of the Agreement Date.

1.8    "Annual Bonus" - see Section 4.2(a).

1.9    "Annualized Total Compensation" means, as of any date, the sum of
       Executive's Base Salary as of such date and (i) if the determination is
       being made prior to the occurrence of a Change of Control, then the
       average of the Annual Bonuses earned by Executive with respect to each of
       the previously completed Years occurring during the Employment Period (up
       to a maximum of the three most recently completed Years); provided, that
       if such Termination of Employment occurs prior to the end of the first
       Year ending during the Employment Period, then an amount equal to the
       Target Annual Bonus applicable to the Year that includes such date or
       (ii) if the determination is being made following a Change of Control,
       the Target Annual Bonus applicable to the Year that includes such date.

1.10   "Base Salary" - see Section 4.1.

1.11   "Beneficial Owner" means a "beneficial owner," as such term is defined in
       Rule 13d-3 under the Exchange Act (or any successor rule thereto).

1.12   "Beneficiary" - see Section 9.3.

1.13   "Blackstone" means collectively, Blackstone Capital Partners III Merchant
       Banking Fund L.P., Blackstone Offshore Capital Partners III L.P. and
       their Affiliates (other than the Company and its Subsidiaries).

1.14   "Board" means the Board of Directors of the Company subsequent to the
       incorporation of the L.P. and the substitution of it as successor for the
       L.P. as a party to this Agreement. Prior thereto, the Board shall mean
       the General Partner (as defined in the LP Agreement).

1.15   "Cause" means any of the following:

       (a)    Executive's continuing refusal to perform his material duties or
              to follow a lawful direction of the Company, which duties and
              directions are consistent with his position;

       (b)    Executive's intentional act or acts of dishonesty that Executive
              intended to result in his personal, more-than-immaterial
              enrichment;

       (c)    Executive's documented willful malfeasance or willful misconduct
              in connection with his employment or Executive's willful and
              deliberate insubordination to directions of the Board; or

       (d)    Executive is convicted of a felony.

                                       2
<PAGE>

       "Cause" excludes:

       (x)    Any act or omission that Executive reasonably believed in good
              faith to have been in or not opposed to the interest of the
              Company (without intent of Executive to gain therefrom, directly
              or indirectly, a profit to which he was not legally entitled), or

       (y)    Any act or omission taken or omitted at the direction of a member
              of the Board.

1.16   "Change of Control" means any of the following events:

       (a)    the sale or disposition, in one or a series of transactions, of
              all or substantially all, of the assets of the Company to any one
              or more "persons" or "groups" (as such terms are defined in
              Sections 13(d)(3) or 14(d)(2) of the Exchange Act) other than
              Blackstone;

       (b)    before the effective date of an initial public offering of the
              equity securities of the Company (or of its successor after
              conversion to a corporation) (the "IPO Date"), representatives of
              Blackstone (individually or in the aggregate) cease to comprise a
              majority of the Board;

       (c)    individuals who, as of the IPO Date, constitute the Board (the
              "Incumbent Board") cease for any reason to constitute a majority
              of the members of the Board; provided that any individual who
              becomes a Director after the IPO Date whose election or nomination
              for election by the Company's Shareholders was approved by a
              majority of the members of the Incumbent Board (other than an
              election or nomination of an individual (i) who is not a
              representative of Blackstone and (ii) whose initial assumption of
              office is in connection with an actual or threatened "election
              contest" relating to the election of the Directors of the Company
              (as such terms are used in Rule 14a-11 under the Exchange Act),
              "tender offer" (as such term is used in Section 14(d) of the
              Exchange Act) or a proposed merger) shall be deemed to be members
              of the Incumbent Board; or

       (d)    any person or group, other than Blackstone, is or becomes the
              Beneficial Owner, directly or indirectly, of more than 50% of the
              total voting power of the voting stock of the Company (or any
              entity which controls the Company or which is a successor to all
              or substantially all of the assets of the Company), including by
              way of merger, consolidation, tender or exchange offer or
              otherwise and the representatives of Blackstone (individually or
              in the aggregate) cease to comprise a majority of the Board.

       Notwithstanding the foregoing, there shall not be Change of Control if,
       in advance of such event, Executive agrees in writing that such event
       shall not constitute a Change of Control.

1.17   "Code" means the Internal Revenue Code of 1986, as amended from time to
       time.

                                       3
<PAGE>

1.18   "Committee" means the Compensation Committee of the Board.

1.19   "Common Stock" means the common stock of the Company following its
       incorporation, and the equivalent L.P. units prior to its incorporation.

1.20   "Company" - see the recitals to this Agreement.

1.21   "Company Inventions" - see Section 8.2(b).

1.22   "Date of Termination" means the effective date of a Termination of
       Employment for any reason, including death or Disability, whether by
       either the Company or the Executive.

1.23   "Director" means a director of the Company subsequent to its
       incorporation or a member of the governing body of the L.P. prior to its
       incorporation.

1.24   "Disability" means the inability of Executive to perform in all material
       respects his duties and responsibilities of the Company or any
       Subsidiary, by reason of a physical or mental disability or infirmity
       which inability is reasonably expected to be permanent and has continued
       for a period of six consecutive months or for an aggregate of nine (9)
       months in any twenty-four (24) consecutive month period.

1.25   "Employment Period" - see Section 3.1.

1.26   "Exchange Act" means the Securities Exchange Act of 1934, as amended or
       any successors thereto.

1.27   "Excise Tax" - see Exhibit A.

1.28   "Executive" - see the recitals to this Agreement.

1.29   "Executive Career Transition Services" means full use of a national
       outplacement consultant (e.g., Challenger, Gray & Christmas, Inc., Right
       Associates) or other consultant mutually agreeable to the Company and
       Executive; office space, secretarial support; technological support;
       equipment and supplies of a quality substantively equal to those provided
       during the Employment Period, and continuation of expense reimbursement
       for professional and trade association participation on the same terms as
       during the Employment Period.

1.30   "Extension Date" - see Section 3.2.

1.31   "Good Reason" means the occurrence of any one or more of the following
       events unless Executive specifically agrees in writing that such event
       shall not be Good Reason:

       (a)    The failure of the Company to pay or cause to be paid Executive's
              Base Salary or Annual Bonus, when due hereunder;

                                       4
<PAGE>

       (b)    Any substantial diminution in Executive's authority or
              responsibilities from those described in Section 2.1 hereof;

       (c)    Requiring Executive to be principally based at any office or
              location more than 50 miles from the current offices of the
              Company in York, Pennsylvania;

       (d)    Any failure to nominate, elect, or retain (other than due the
              Executive's death, incapacity or resignation) Executive as Chief
              Executive Officer of the Company or as Chairman of the Board, or,
              after the IPO Date, to require him to report to anyone other than
              the Board;

       (e)    Any material reduction in Executive's Target Annual Bonus
              opportunity after a Change of Control as compared with the Annual
              Bonus earned for the preceding Year; or

       (f)    The failure of the Company, as the successor to the L.P. at the
              time of its incorporation in conjunction with the initial public
              offering, or otherwise, to assume and become a party to the
              Agreement in substitution for the L.P.;

       provided that the events described in this Section 1.31 shall constitute
       Good Reason only if the Company fails to cure such event within 30 days
       after receipt from Executive of written notice of the event that
       constitutes Good Reason; provided, further, that "Good Reason" shall
       cease to exist for an event on the 60th day following the later of its
       occurrence or Executive's knowledge thereof, unless Executive has given
       the Company written notice thereof prior to such date.

1.32   "Gross-Up Payment" - Exhibit A.

1.33   "including" means including without limitation.

1.34   "Inventions" - see Section 8.2(a).

1.35   "LP Agreement" means the Amended and Restated Agreement of Limited
       Partnership of Graham Packaging Company.

1.36   "Option" means an option to purchase shares of Common Stock.

1.37   "Payment" - see Exhibit A.

1.38   "Permitted Transferee" means the spouse of Executive, a lineal descendant
       of Executive or a spouse of a lineal descendant of Executive or a trust,
       limited partnership or other entity principally benefiting all or a
       portion of such individuals.

1.39   "Person" means any individual, sole proprietorship, partnership, joint
       venture, trust, unincorporated organization, association, corporation,
       institution, public benefit corporation, entity or government
       instrumentality, division, agency, body or department.

                                       5
<PAGE>

1.40   "Prior Inventions" - see Section 8.2(a).

1.41   "Prorata Annual Bonus" means the product of (a) the Annual Bonus
       Executive would have been entitled to receive pursuant to Section 4.2
       hereof in the Year of the Executive's Termination of Employment
       multiplied by (b) a fraction of which the numerator is the numbers of
       days that have elapsed in such Year of Termination of Employment through
       the Date of Termination and the denominator is 365.

1.42   "Restricted Period" means the eighteen month period immediately following
       a Termination of Employment for any reason; provided, however, that the
       Restricted Period shall mean the twelve month period immediately
       following a Termination of Employment due to the Company's election not
       to renew the Employment Period pursuant to Section 3.2 following the
       fourth anniversary of the Agreement Date, such that the Employment Period
       terminates on or after the fifth anniversary of the Agreement Date.

1.43   "Safe Harbor Amount" - see Exhibit A.

1.44   "Shareholder" or "Stockholder" means an owner of the Company's
       securities.

1.45   "Subsidiary" means, with respect to any Person, (a) any corporation of
       which more than 50% of the outstanding capital stock having ordinary
       voting power to elect a majority of the board of directors of such
       corporation (irrespective of whether, at the time, stock of any other
       class or classes of such corporation shall have or might have voting
       power by reason of the happening of any contingency) is at the time,
       directly or indirectly, owned by such Person, and (b) any partnership,
       limited liability company or other entity in which such Person has a
       direct or indirect interest (whether in the form of voting or
       participation in profits or capital contribution) of more than 50%.

1.46   "Target Annual Bonus" means the product of Base Salary (at a point in
       time) multiplied by 145 percent, as such percentage may be adjusted
       upwards from time to time by the Board.

1.47   "Termination For Good Reason" means a Termination of Employment during
       the Employment Period by Executive for Good Reason.

1.48   "Termination of Employment" means a termination by the Company or by
       Executive (or due to Executive's death) of Executive's employment with
       the Company or its Affiliates.

1.49   "Termination Without Cause" means a Termination of Employment during the
       Employment Period by the Company for any reason other than Cause or
       Executive's death or Disability.

1.50   "Underpayment" - see Exhibit A.

                                       6
<PAGE>

1.51   "Year" means a calendar year period ending on December 31.

                                   Article II.

                                     DUTIES

2.1    Duties. The Company shall employ Executive during the Employment Period
       as its Chief Executive Officer. During the Employment Period, Executive
       shall perform the duties assigned to him hereunder by the Board from time
       to time, shall devote his full business time, attention and effort to the
       affairs of the Company and shall use his reasonable best efforts to
       promote the interests of the Company. During the Employment Period, and
       excluding any periods of disability, vacation, or sick leave to which
       Executive is entitled, Executive agrees to devote his full attention and
       time to the business and affairs of the Company. If requested, Executive
       shall also serve as a member of the Board without additional
       compensation.

2.2    Other Activities. Executive may (i) serve on corporate, civic or
       charitable boards or committees, deliver lectures, fulfill speaking
       engagements, or teach at educational institutions, subject to the consent
       of the Board (which shall not be unreasonably withheld) and/or (ii)
       manage personal investments, provided that all such activities do not
       individually or in the aggregate significantly interfere with the
       performance of his duties under this Agreement or violate Section 8.1 of
       this Agreement. Exhibit C to this Agreement sets forth a list of
       activities currently engaged in by Executive that are hereby approved by
       the Board.

                                  Article III.

                                EMPLOYMENT PERIOD

3.1    Employment Period. Subject to Section 3.2 and the termination provisions
       hereinafter provided, the term of Executive's employment under this
       Agreement (the "Employment Period") shall begin on the Agreement Date and
       end on the Anniversary Date, or, if applicable at the end of any
       extension pursuant to Section 3.2. The employment of Executive by the
       Company shall not be terminated other than in accordance with Article
       VII.

3.2    Extensions of Employment Period. Commencing on the first Anniversary
       Date, and on each Anniversary Date thereafter, (each an "Extension Date")
       if at least 90 days before that date the Company has not delivered to
       Executive, and Executive has not delivered to Company, a written notice
       that the Employment Period will not be extended, the Employment Period
       will be automatically extended for one year from its then scheduled
       expiration date (i.e., the next occurring Extension Date).

                                       7
<PAGE>

                                   Article IV.

                                  COMPENSATION

4.1    Salary. The Company shall pay Executive in accordance with its normal
       payroll practices (but not less frequently than monthly) an annual salary
       at a rate of $461,474 per year ("Base Salary"). During the Employment
       Period, the Base Salary shall be reviewed at least annually by the
       Committee after consultation with Executive and may from time to time be
       increased as determined by the Committee. Effective as of the date of any
       such increase, the Base Salary as so increased shall be considered the
       new Base Salary for all purposes of this Agreement. Any increase in Base
       Salary shall not limit or reduce any other obligation of the Company to
       Executive under this Agreement.

4.2    Annual Bonus.

       (a)    Subject to Section 7, Executive shall be eligible to earn an
              annual cash bonus ("Annual Bonus") in accordance with the terms
              hereof for the current Year and each subsequent Year that begins
              during the Employment Period. Executive shall be eligible for an
              Annual Bonus based upon the achievement of the financial budget or
              other performance criteria established by the Board on or about
              January 15 or as soon thereafter as practicable, but in no event
              later than March 31 of such Year. The Annual Bonus shall be equal
              to the Target Annual Bonus upon full achievement of the
              performance criteria, but may be less than or more than the Target
              Annual Bonus upon lesser or greater levels of achievement.

       (b)    The Company shall pay the entire Annual Bonus that is payable with
              respect to a Year in a lump-sum cash payment as soon as
              practicable after the Committee can determine whether and the
              degree to which the performance criteria has or has not been
              achieved following the close of such Year. Any such Annual Bonus
              shall in any event be paid no later than the date annual bonuses
              are paid to the other qualifying employees of the Company.

                                   Article V.

                                 OTHER BENEFITS

5.1    Incentive, Savings and Retirement Plans. In addition to Base Salary and
       the Annual Bonus, Executive shall be entitled to participate during the
       Employment Period in all incentive, savings and retirement plans,
       practices, policies and programs that are from time to time generally
       available to other senior executives of the Company.

                                       8
<PAGE>

5.2    Welfare Benefits. During the Employment Period, Executive and/or his
       eligible dependents, as the case may be, shall be eligible for
       participation in all benefits under welfare benefit plans, practices,
       policies and programs provided by the Company (including any medical,
       prescription, dental disability, salary continuance, employee life, group
       life, dependent life, accidental death and travel accident insurance
       plans and programs) generally available to other senior executives of the
       Company.

5.3    Fringe Benefits. During the Employment Period, Executive shall be
       entitled to all fringe benefits that are from time to time generally
       available to other senior executives of the Company. The Company will
       continue its current automobile expense program as in effect on the
       Agreement Date (or establish a comparable replacement program), with such
       increases as are consistent with past practices to reflect changes in
       expenses.

5.4    Vacation. During the Employment Period, Executive shall be entitled to
       paid vacation time in accordance with the plans, practices, policies, and
       programs generally available to other senior executives of the Company,
       but in no event shall such vacation time be less than four weeks per
       calendar year.

5.5    Expenses. During the Employment Period, Executive shall be entitled to
       receive prompt reimbursement for all reasonable employment related
       expenses incurred by Executive upon the receipt by either of the Company
       of accounting in accordance with practices, policies and procedures
       generally available to other senior executives of the Company.

5.6    Office; Support Staff. During the Employment Period, Executive shall be
       entitled to an office or offices of a size and with furnishings and other
       appointments, and to secretarial and other assistance, appropriate to his
       position and duties under this Agreement.

5.7    Tax Gross-Up Payment. If it shall be determined that any payment to
       Executive pursuant to this Agreement or any other payment or benefit from
       the Company, any Affiliate, any shareholder of the Company or any other
       person would be subject to the excise tax imposed by section 4999 of the
       Code, then Executive shall receive a Gross-Up Payment pursuant to Exhibit
       A attached hereto.

                                   Article VI.

                            OTHER EXECUTIVE BENEFITS

6.1    Supplemental Retirement Benefits. Executive shall be entitled to
       participate in any other supplemental defined benefit retirement plans of
       the Company that are not qualified under Section 401 (a) of the Code,
       generally available to other senior executives of the Company. For
       purposes of such programs and for the Amended Supplemental Income Plan
       (adopted on December 23, 1997, as it may be amended from time to time),
       the Company and Executive agree that the terms and procedures of Section
       7.2(b) hereof and

                                       9
<PAGE>

       the definition of "Cause" in this Agreement shall govern and shall
       supersede any such definitions or procedures in those arrangements as
       applied to the Executive.

6.2    Non-Qualified Option Agreement. Except as provided in Sections 7.4(b) and
       7.6, this Agreement in no way modifies or limits the Non-Qualified Option
       Agreements entered into between Executive and Graham Packaging Holdings
       Company on February 2, 1998 and January 1, 1999. The Non-Qualified Option
       Agreement conveys consideration separate from and in addition to
       consideration conveyed in this Agreement, except to the extent that the
       Non-Qualified Option Agreement increases benefits under operation of this
       Agreement.

6.3    Equity Incentive Agreement. Except as provided in Sections 7.4(b) and
       7.6, this Agreement in no way modifies or limits the Equity Incentive
       Agreement entered into between Executive and the Company on February 2,
       1998. The Equity Incentive Agreement conveys consideration separate
       from and in addition to this Agreement, except to the extent that the
       Equity Incentive Agreement increases benefits under operation of this
       Agreement.

6.4    Indemnification. The Company shall, to the maximum extent permitted by
       law, and in addition to any such right granted to or available to the
       Executive under the Company's Charter, By-laws or standing or other
       resolutions, defend, indemnify and hold harmless the Executive from and
       against any and all claims made against the Executive concerning or
       relative to his service, actions or omissions on behalf of the Company as
       an officer, employee, director or agent thereof; provided, however, that
       the obligation to indemnify the Executive shall not apply to any claim
       made against the Executive that arises out of the act, omission or
       failure to act that would constitute Cause for the Executive's
       termination of employment. The Company shall, upon the Executive's
       request, promptly advance or pay any amounts for reasonable costs,
       charges, or expenses (including any legal fees and expenses incurred by
       counsel retained by the Executive) in respect of his right to
       indemnification hereunder or in furtherance of such right, subject to a
       later determination as to the Executive's ultimate right to receive
       indemnification. The Executive's right to indemnification shall survive
       until the expiration of all applicable statutes of limitations, without
       regard to the earlier termination of the Executive's employment.

                                  Article VII.

                              TERMINATION BENEFITS

7.1    Termination of Employment. The Employment Period and Executive's
       employment hereunder may be terminated by either party at any time and
       for any reason; provided that Executive will be required to give the
       Company at least 60 days' advance written notice of any resignation of
       Executive's employment. Notwithstanding any other provision of this
       Agreement, the provisions of this Article VII shall exclusively govern
       Executive's rights under this Agreement following the expiration of the
       Employment Period or if

                                       10
<PAGE>

       Executive's employment with the Company or its Affiliates is terminated
       during the Employment Period for any reason.

7.2    Termination for Cause or Other Than for Good Reason, etc.

       (a)    If the Company terminates Executive's employment during the
              Employment Period for Cause or Executive terminates his employment
              during the Employment Period other than for Good Reason, death or
              Disability, the Company shall pay to Executive immediately after
              the Date of Termination an amount equal to Executive's Accrued
              Base Salary, accrued but unpaid vacation, unpaid business expenses
              properly incurred by Executive in accordance with Company policy
              prior to the date of Executive's termination, and, if such
              Termination of Employment is by the Executive other than for Good
              Reason, death or Disability, the Accrued Annual Bonus, if any.

       (b)    Before terminating Executive's employment for Cause, the Board
              will (i) specify in writing to Executive in detail the nature of
              the act, omission, refusal, or failure that it deems to constitute
              Cause, (ii) as to clauses (a) and (c) in the definition of
              "Cause," provide Executive a reasonable opportunity to correct the
              purported problem and avoid termination for Cause, and (iii)
              provide Executive with the opportunity (after reasonable notice
              and opportunity to prepare) to appear before the Board, with or
              without legal representation, at Executive's election, to present
              arguments and evidence on his own behalf.

7.3    Termination for Death or Disability. If Executive's employment terminates
       during the Employment Period due to his death or Disability, the Company
       shall pay to Executive or his Beneficiaries, as the case may be, (i)
       immediately after the Date of Termination an amount that is equal to the
       sum of Executive's Accrued Base Salary and Accrued Annual Bonus, if any,
       accrued but unpaid vacation and unpaid business expenses properly
       incurred by Executive in accordance with Company policy prior to the date
       of Executive's termination and (ii) at the time the Annual Bonus would
       have otherwise been payable had Executive's employment not terminated, a
       Prorata Annual Bonus.

7.4    Termination Without Cause or for Good Reason. In the event of a
       Termination Without Cause or a Termination for Good Reason, the Executive
       shall receive the following:

       (a)    Immediately after the Date of Termination, a lump-sum amount equal
              to the sum of Executive's Accrued Base Salary, Accrued Annual
              Bonus, if any, accrued but unpaid vacation and unpaid business
              expenses properly incurred by Executive in accordance with Company
              policy prior to the date of Executive's termination;

       (b)    Full vesting of Options and other equity awards granted to the
              Executive that remain outstanding immediately prior to the Date of
              Termination;

                                       11
<PAGE>

       (c)    A Prorata Annual Bonus at the time the Annual Bonus would have
              otherwise been payable had Executive's employment not terminated;

       (d)    Continued monthly payment for a period of twenty-four months
              (thirty-six months if the Date of Termination is within the first
              12 months following a Change of Control) following such
              Termination of Employment of an amount equal to the quotient of
              (i) the Executive's Annualized Total Compensation divided by (ii)
              twelve; provided that the aggregate amount described in this
              clause (d) shall be reduced (but not below zero) by the present
              value of any other cash severance or cash termination benefits
              payable to Executive under any generally available or officer
              specific severance plans, programs or arrangements of the Company
              or its affiliates, other than any (i) retirement income benefit,
              (ii) benefits paid under the Supplemental Income Plan and (iii)
              equity incentives and/or options;

       (e)    The continuation of health and dental benefits to which Executive
              is entitled as of the Date of Termination for twenty-four months;
              provided that such benefits shall cease upon the Executive's being
              eligible for comparable benefits from a new employer;

       (f)    The continuation of the automobile expense program to which
              Executive is entitled as of the Date of Termination for twelve
              months; provided that such benefit ceases upon Executive's being
              eligible for comparable benefits from a new employer; and

       (g)    For a period of 12 months from the Date of Termination, but no
              later than the point at which the Executive is employed on a
              substantively full time basis, Executive Career Transition
              Services, not to exceed $45,000 in the aggregate.

7.5    Other Termination Benefits. In addition to any amounts or benefits
       payable upon a Termination of Employment hereunder, Executive shall,
       except as otherwise specifically provided herein, be entitled to any
       payments or benefits provided under the terms of any plan, policy or
       program of the Company in which Executive participates or as otherwise
       required by applicable law.

7.6    Election Not to Extend the Employment Period. If the Company elects not
       to extend the Employment Period pursuant to Section 3.2 such that the
       Employment Period terminates prior to the fifth anniversary of the
       Agreement Date, the nonextension shall be treated as a Termination
       without Cause, for purposes of Section 7.4, as of the next scheduled
       Extension Date or such earlier date as determined by Company. For the
       avoidance of doubt, an election by the Company not to extend the
       Employment Period pursuant to Section 3.2 such that the Employment Period
       terminates beyond the fifth anniversary of the Agreement Date shall not
       constitute a Termination without Cause and in such event Executive's
       termination of employment hereunder (whether or not Executive continues
       as an employee of the Company thereafter) shall be deemed to occur on the
       close of

                                       12
<PAGE>

       business on the day immediately preceding the next scheduled Extension
       Date or such earlier date as determined by Company. Upon such Termination
       of Employment, Executive shall be entitled to receive:

       (a)    Immediately after the Date of Termination, a lump-sum amount equal
              to the sum of Executive's Accrued Base Salary, Accrued Annual
              Bonus, if any, accrued but unpaid vacation and unpaid business
              expenses properly incurred by Executive in accordance with Company
              policy prior to the date of Executive's termination;

       (b)    Full vesting of Options and other equity awards granted to the
              Executive that remain outstanding immediately prior to the Date of
              Termination;

       (c)    A Prorata Annual Bonus at the time the Annual Bonus would have
              otherwise been payable had Executive's employment not terminated;

       (d)    Continued monthly payment for a period of twelve months following
              such Termination of Employment of an amount equal to the quotient
              of (i) the Executive's Annualized Total Compensation divided by
              (ii) twelve; provided that the aggregate amount described in this
              clause (d) shall be reduced (but not below zero) by the present
              value of any other cash severance or cash termination benefits
              payable to Executive under any generally available or officer
              specific severance plans, programs or arrangements of the Company
              or its affiliates, other than any (i) retirement income benefit,
              (ii) benefits paid under the Supplemental Income Plan and (iii)
              equity incentives and/or options;

       (e)    The continuation of health and dental benefits to which Executive
              is entitled as of the Date of Termination for twelve months;
              provided that such benefits shall cease upon the Executive's being
              eligible for comparable benefits from a new employer;

       (f)    The continuation of the automobile expense program to which
              Executive is entitled as of the Date of Termination for twelve
              months; provided that such benefit ceases upon Executive's being
              eligible for comparable benefits from a new employer; and

       (g)    For a period of 12 months from the Date of Termination, but no
              later than the point at which the Executive is employed on a
              substantively full time basis, Executive Career Transition
              Services, not to exceed $45,000 in the aggregate.

7.7    Continued Employment Beyond the Expiration of the Employment Period.
       Unless the parties otherwise agree in writing, continuation of
       Executive's employment with the Company beyond the expiration of the
       Employment Period shall be deemed an employment at-will and shall not be
       deemed to extend any of the provisions of this Agreement and Executive's
       employment may thereafter be terminated at will by either Executive or
       the Company; provided that the provisions of Article VIII of this
       Agreement

                                       13
<PAGE>

       shall survive any termination of this Agreement or Executive's
       termination of employment hereunder.

7.8    Board/Committee Resignation. Upon Executive's Termination of Employment
       for any reason, Executive agrees to resign, as of the date of such
       termination and to the extent applicable, from the Board (and any
       committees thereof) and the Board of Directors (and any committees
       thereof) of any of the Company's affiliates.

                                  Article VIII.

                              RESTRICTIVE COVENANTS

8.1    Non-Solicitation of Employees; Confidentiality; Non-Competition.

       (a)    Executive covenants and agrees that, at no time during the
              Employment Period nor during the Restricted Period, will
              Executive:

              (i)   Directly or indirectly employ or seek to employ any person
                    (other than his personal assistant) employed as of the date
                    of Executive's Termination of Employment or who left the
                    employment of the Company or its Affiliates coincident with,
                    or within six months prior to or after, the Executive's
                    Termination of Employment with the Company or otherwise
                    encourage or entice any such person to leave such employment
                    (provided that this Section 8.1(a)(i) shall not apply either
                    to persons who had not become employed by the Company before
                    the Date of Termination or to persons whose employment ended
                    at any time as a result of the Company's termination of
                    those individuals without cause);

              (ii)  Become employed by, enter into a consulting arrangement with
                    or otherwise agree to perform personal services for a
                    Competitor (as defined in section 8.1 (b)).

              (iii) Acquire an ownership interest, or an option to purchase an
                    ownership interest in a Competitor, other than a publicly
                    traded Competitor provided that ownership or option position
                    in such publicly traded Competitor does not exceed 5
                    percent;

              (iv)  Solicit any business of the Company on behalf of or for the
                    benefit of a Competitor; or

              (v)   Interfere with, or attempt to interfere with, business
                    relationships (whether formed before, on or after the date
                    of this Agreement) between the

                                       14
<PAGE>

                    Company or any of its affiliates and customers, clients,
                    suppliers of the Company or its Affiliates.

       (b)    For purposes of the Section, "Competitor" means any Person that
              produces blowmolded plastic containers or produces or provides any
              other product or service of the Company that represents, as of the
              Date of Termination, at least 10% of the consolidated revenues of
              the Company (including, without limitation, products or services
              that Executive is aware, as of the Date of Termination, that the
              Company had specific plans (as evidenced through the most recent
              annual corporate business plan or by resolutions of the Board) to
              produce or provide during the twelve month period following the
              Date of Termination and such products or services are reasonably
              anticipated to represent at least 10% of the consolidated revenues
              of the Company within the two years following the Date of
              Termination) that are competitive with those sold by a business
              that is being conducted by the Company or any Subsidiary at the
              time in question and was being conducted at the Date of
              Termination. Notwithstanding anything to the contrary in this
              Section, goods or services shall not be deemed to be competitive
              with those of the Company solely as a result of Executive's being
              employed by or otherwise associated with a business of which a
              unit is in competition with the Company or any Subsidiary (a
              "Competitive Unit") but as to which unit Executive does not have
              direct or indirect responsibilities for the products or services
              involved; provided, that such Competitive Unit contributes less
              than 25% of the consolidated revenues for the most recently
              completed fiscal year of such business.

       (c)    Executive covenants and agrees that at no time during the
              Employment Period nor at any time following any Termination of
              Employment will Executive communicate, furnish, divulge or
              disclose in any manner to any Person any Confidential Information
              (as defined in Section 8.1(d)) without the prior express written
              consent of the Company other than in the course of Executive's
              employment. After a Termination of Employment, Executive shall
              not, without the prior written consent of the Company, or as may
              otherwise be required by law or legal process, communicate or
              divulge such Confidential Information to anyone other than the
              Company and its designees.

       (d)    For purposes of this Section, "Confidential Information" shall
              mean financial information about the Company, contract terms with
              vendors and suppliers, customer and supplier lists and data,
              know-how, software developments, inventions, formulae, technology,
              designs and drawings, or any Company property or confidential
              information relating to research, operations, finances, current
              and proposed products and services, vendors, customers,
              advertising, costs, marketing, trading, investment, sales
              activities, promotion, manufacturing processes, or the business
              and affairs of the Company generally, or of any subsidiary or
              affiliate of the Company, trade secrets and such other
              competitively-

                                       15
<PAGE>

              sensitive information, except that Confidential Information shall
              not include any information that was or becomes generally
              available to the public (i) other than as a result of a wrongful
              disclosure by Executive, (ii) as a result of disclosure by
              Executive during the Employment Period that he reasonably and in
              good faith believes is required by the performance of his duties
              under this Agreement, or (iii) any information compelled to be
              disclosed by applicable law or administrative regulation; provided
              that Executive, to the extent not prohibited from doing so by
              applicable law or administrative regulation, shall give the
              Company written notice of the information to be so disclosed
              pursuant to clause (iii) of this sentence as far in advance of its
              disclosure as is practicable.

       (e)    Executive agrees that upon Executive's Termination of Employment
              with the Company for any reason, he will return to the Company
              immediately all memoranda, books, papers, plans, information,
              letters and other data, and all copies thereof or therefrom, in
              any way relating to the business of the Company, its affiliates
              and subsidiaries, except that he may retain only those portions of
              personal notes, notebooks and diaries that do not contain
              Confidential Information of the type described in the preceding
              sentence. Executive further agrees that he will not retain or use
              for Executive's own benefit, purposes or account or the benefit,
              purposes or account of any other person, firm, partnership, joint
              venture, association, corporation or other business designation,
              entity or enterprise, other than the Company and any of its
              Subsidiaries or Affiliates, at any time any trade names,
              trademark, service mark, other proprietary business designation,
              patent, or other intellectual property of the Company or its
              Affiliates.

8.2    Inventions.

       (a)    Prior Inventions. Executive has attached hereto, as Exhibit B, a
              list describing all inventions, works of authorship (including
              software, related items, databases, documentation, site content,
              text or graphics), developments, and improvements that relate to
              the Company's proposed or current business, services, products or
              research and development ("Inventions") that were created or
              contributed to by Executive either solely or jointly with others
              prior to Executive's employment with the Company and that relate
              to the Company's proposed or current business, services, products
              or research and development (collectively referred to as "Prior
              Inventions"); or, if no such list is attached, Executive
              represents that there are no such Prior Inventions. If in the
              course of Executive's employment with the Company, Executive uses
              or relies upon a Prior Invention in Executive's creation or
              contribution to any work of authorship, invention, product,
              service, process, machine or other property of the Company,
              Executive will inform the Company promptly and, upon request, use
              Executive's best efforts to procure any consents of third parties
              necessary for the Company's use of such Prior Invention. To the
              fullest extent permissible by law, Executive hereby grants the
              Company a non-exclusive royalty-free, irrevocable, perpetual,
              worldwide license under all of

                                       16
<PAGE>

              Executive's Prior Inventions to make, have made, copy, modify,
              distribute, use and sell works of authorship, products, services,
              processes and machines and to otherwise operate the Company's
              current and future business.

       (b)    Ownership of Inventions. Executive agrees that Executive will
              promptly make full written disclosure to the Company, and hereby
              assign to the Company, or its designee, all of Executive's right,
              title, and interest in and to any and all Inventions, whether or
              not patentable, that Executive may solely or jointly conceive or
              develop or reduce to practice, or cause to be conceived or
              developed or reduced to practice, during the period of time
              Executive is in the employ of the Company (collectively referred
              to as "Company Inventions"). Executive further acknowledges that
              all original works of authorship that are created or contributed
              to by Executive (solely or jointly with others) within the scope
              of and during the period of Executive's employment with the
              Company are to be deemed "works made for hire," as that term is
              defined in the United States Copyright Act (17 U.S.C. Section
              101), and the Company will own all right, title and interest in
              such works, including all copyright and all intellectual property
              therein shall be the sole property of the Company or its designee
              for all territories of the world in perpetuity, including any and
              all copyright registrations, copyright applications and all other
              copyrightable materials, including any renewals and extensions
              thereof, and in and to all works based upon, derived from, or
              incorporating the works covered by such copyrights and in and to
              all income, royalties, damages, claims, and payments now or
              hereinafter due or payable with respect thereto, and in all causes
              of action, either in law or in equity for past, present or future
              infringement based on said copyrights, and in and to all rights
              corresponding to the foregoing throughout the world. To the extent
              any of such works are deemed not to be "works made for hire,"
              Executive hereby assigns the copyright and all other intellectual
              property rights in such works to the Company.

       (c)    Contracts with the United States. Executive agrees to execute any
              licenses or assignments as required by any contract between the
              Company and the United States or any of its agencies.

       (d)    Maintenance of Records. Executive agrees to keep and maintain
              adequate and current written records of all Company Inventions
              made by Executive (solely or jointly with others) during the term
              and within the scope of Executive's employment with the Company.
              The records will be in the form of notes, sketches, drawings, and
              any other format that may be specified by the Company. The records
              will be available to and remain the sole property and intellectual
              property of the Company at all times.

       (e)    Further Assurances. Executive covenants to take all requested
              actions and execute all requested documents to assist the Company,
              or its designee, at the Company's expense (but without further
              remuneration), in every way to secure

                                       17
<PAGE>

              the Company's above rights in the Prior Inventions and Company
              Inventions and any copyrights, patents, mask work rights or other
              intellectual property rights relating thereto in any and all
              countries, and to pursue any patents or registrations with respect
              thereto. This covenant shall survive the termination of this
              Agreement. If the Company is unable for any other reason to secure
              Executive's signature on any document for this purpose, then
              Executive hereby irrevocably designates and appoints the Company
              and its duly authorized officers and agents as Executive's agent
              and attorney in fact, to act for and in Executive's behalf and
              stead to execute any documents and to do all other lawfully
              permitted acts in connection with the foregoing.

8.3    Injunction. Executive acknowledges that monetary damages will not be an
       adequate remedy for the Company in the event of a breach of this Article
       VIII, and that it would be impossible for the Company to measure damages
       in the event of such a breach. Therefore, Executive agrees that, in
       addition to other rights that the Company may have, the Company is
       entitled to (i) in the event of a breach by Executive of this Article VII
       that is not cured within 10 days following written notice from the
       Company to the Executive detailing such breach, cease making any payments
       or providing any benefit otherwise required by this Agreement and/or (ii)
       an injunction preventing Executive from any breach of this Article VIII.

                                   Article IX.

                                  MISCELLANEOUS

9.1    Mitigation. In no event shall Executive be obligated to seek other
       employment or take any other action to mitigate the amounts payable to
       Executive under any of the provisions of this Agreement, nor shall the
       amount of any payment hereunder be reduced by any compensation earned as
       result of Executive's employment by another employer.

9.2    Legal Fees. If Executive incurs legal or other fees and expenses in an
       effort to secure or preserve establish entitlement to compensation and
       benefits under this Agreement, the Company shall reimburse Executive for
       such fees and expenses to the extent that the Executive substantially
       prevails in such dispute.

9.3    Beneficiary. If Executive dies prior to receiving all of the amounts
       payable to him in accordance with the terms of this Agreement, such
       amounts shall be paid to one or more beneficiaries (each, a
       "Beneficiary") designated by Executive in writing to the Company during
       his lifetime, or if no such Beneficiary is designated, to Executive's
       estate. Such payments shall be made in a lump sum to the extent so
       payable and, to the extent not payable in a lump sum, in accordance with
       the terms of this Agreement. Executive, without the consent of any prior
       Beneficiary may change his designation of Beneficiary

                                       18
<PAGE>

       or Beneficiaries at any time or from time by a submitting to the Company
       a new designation in writing.

9.4    Assignment; Successors. This Agreement shall not be assignable by
       Executive. This Agreement may be assigned by the Company to a person or
       entity that is a successor in interest to substantially all of the
       business operations of the Company. Upon such assignment, the rights and
       obligations of the Company hereunder shall become the rights and
       obligations of such affiliate or successor person or entity. This
       Agreement shall be binding and inure to the benefit of Executive, his
       estates and Beneficiaries, the Company and the successors and permitted
       assigns of the Company.

9.5    Nonalienation. Benefits payable under this Agreement shall not be subject
       in any manner to anticipation, alienation, sale, transfer, assignment,
       pledge, encumbrance, charge, garnishment, execution or levy of any kind,
       either voluntary or involuntary, prior to actually being received by
       Executive or a Beneficiary, as applicable, and any such attempt to
       dispose of any right to benefits payable hereunder shall be void.

9.6    Severability. If one or more of this Agreement are declared by any court
       or government authority to be unlawful or invalid, such unlawfulness or
       invalidity shall not invalidate any part of this Agreement no declared to
       be unlawful or invalid. Any part so declared to be unlawful or invalid
       shall, if possible, be construed in a manner that will give effect to the
       terms of such part to the fullest extent possible while remaining lawful
       and valid.

9.7    Withholding Taxes. The Company may withhold from any amounts payable
       under this Agreement such Federal, state and local taxes as may be
       required to be withheld pursuant to any applicable law or regulation.

9.8    Captions. The names of the Articles and Sections of this Agreement are
       for convenience of reference only and do not constitute a part hereof.

9.9    Amendment; Waiver. This Agreement shall not be amended or modified except
       by written instrument executed by the Company and Executive. A waiver of
       any term, covenant or condition, and any waiver of any default in any
       such term, covenant or condition shall not be deemed a waiver of any
       later default thereof.

9.10   Notices. All notices hereunder shall be in writing and deliver by hand,
       by nationally-recognized delivery service that guarantees overnight
       delivery, or by first-class, registered or certified mail, return receipt
       requested, postage prepaid, addressed as follows:

       If to the Company, to:       Graham Packaging Company L.P.
                                    2401 Pleasant Valley Road
                                    York, PA  17402
                                    Attention: General Counsel

                                       19
<PAGE>

       With a copy to:              The Blackstone Group L.P.
                                    345 Park Avenue, 31st Floor
                                    New York, NY  10154
                                    Attention: Howard Lipson

       If to Executive to:

       To the most recent address of Executive set forth in the personnel
       records of the Company.

       Either party may from time to time designate a new address by notice
       given in accordance with this Section Notice shall be effective when
       actually received by the addressee.

9.11   Counterparts. This Agreement may be executed in several counterparts,
       each of which shall be deemed to be an original but all of which together
       will constitute one and the same instrument.

9.12   Entire Agreement. This Agreement forms the entire agreement between the
       parties hereto with respect to the subject matter contained in this
       Agreement.

9.13   Applicable Law. This Agreement shall be interpreted and construed in
       accordance with the laws of the Commonwealth of Pennsylvania, without
       regard to its choice of law principles.

9.14   Survival of Executive's Rights. All of Executive's rights hereunder,
       including his rights to compensation and benefits, and his obligations
       under Section 8.1 hereof, shall survive the termination of Executive's
       employment and/or the termination of this agreement.

IN WITNESS WHEREOF, the parties have executed this Agreement on the date first
above written.

                                                  Graham Packaging Company L.P.

                                                  ------------------------------
                                                  name:
                                                  title:

                                                  Executive

                                                  ------------------------------

                                       20
<PAGE>

                                                                       EXHIBIT A

                                GROSS-UP PAYMENT
                                ----------------

         (a) In the event it shall be determined that any payment or benefit
under this Agreement or any other payment or benefit from the Company, any
Affiliate, any shareholder of the Company or any other person (whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement,
or otherwise) (a "Payment") is subject to the excise tax imposed by Section 4999
of the Code or any interest or penalties are incurred by Executive with respect
to such excise tax (such excise tax, together with any such interest and
penalties, hereinafter collectively referred to as the "Excise Tax"), Executive
shall be entitled to receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by Executive of all taxes (including any interest
or penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and the Excise Tax imposed upon the Gross-Up Payment, Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments. Notwithstanding the foregoing provisions of this Exhibit A, if it
shall be determined that Executive is entitled to a Gross-Up Payment, but that
the Payment does not exceed 110% of the greatest amount that could be paid to
Executive without giving rise to any Excise Tax (the "Safe Harbor Amount"), then
no Gross-Up Payment shall be made to Executive and the amounts payable under
this Agreement shall be reduced so that the Payment, in the aggregate, is
reduced to the Safe Harbor Amount. The reduction of the amounts payable
hereunder, if applicable, shall be made by first reducing the payments under
Section 7.4(b), unless an alternative method of reduction is elected by
Executive.

         (b) All determinations required to be made under this Exhibit A,
including whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by a nationally recognized accounting firm
determined by the Company (the "Accounting Firm"), which shall provide detailed
supporting calculations both to the Company and Executive within ten business
days of the receipt of notice from Executive that there has been a Payment, or
such earlier time as is requested by the Company; provided that for purposes of
determining the amount of any Gross-Up Payment, Executive shall be deemed to pay
federal income tax at the highest marginal rates applicable to individuals in
the calendar year in which any such Gross-Up Payment is to be made and deemed to
pay state and local income taxes at the highest effective rates applicable to
individuals in the state or locality of Executive's residence or place of
employment in the calendar year in which any such Gross-Up Payment is to be
made, net of the reduction in federal income taxes that can be obtained from
deduction of such state and local taxes, taking into account limitations
applicable to individuals subject to federal income tax at the highest marginal
rates. All fees and expenses of the Accounting Firm shall be borne by the
Company. Any Gross-Up Payment, as determined pursuant to this Exhibit A, shall
be paid by the Company to Executive (or to the appropriate taxing authority on
Executive's behalf) when due. If the Accounting Firm determines that no Excise
Tax is payable by Executive, it shall so indicate in a written opinion provided
to the Executive at least 10 days prior to the unextended due date of the
Executive's tax return with respect to the Year for which the Payment is made.
Any determination by the Accounting Firm shall be binding upon the Company and
Executive. As a

<PAGE>

result of the uncertainty in the application of Section 4999 of the Code, it is
possible that the amount of the Gross-Up Payment determined by the Accounting
Firm to be due to (or on behalf of) Executive was lower than the amount actually
due ("Underpayment"). In the event that the Company exhausts its remedies
pursuant to Section (c) of this Exhibit A and Executive thereafter is required
to make a payment of any Excise Tax, the Accounting Firm shall determine the
amount of the Underpayment that has occurred and any such Underpayment
(including without limitation any related interest or penalties) shall be
promptly paid by the Company to or for the benefit of Executive.

         (c) Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of any Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after Executive is informed in
writing of such claim and shall apprise the Company of the nature of such claim
and the date on which such claim is requested to be paid; provided, that the
failure of Executive to give notice within the time frame shall not affect the
Company's obligations hereunder unless the Company is materially prejudiced by
the delayed notice. Executive shall not pay such claim prior to the expiration
of the thirty day period following the date on which it gives such notice to the
Company (or such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies Executive in writing
prior to the expiration of such period that it desires to contest such claim,
Executive shall (i) give the Company any information reasonably requested by the
Company relating to such claim, (ii) take such action in connection with
contesting such claim as the Company shall reasonably request in writing from
time to time, including, without limitation, accepting legal representation with
respect to such claim by an attorney selected by the Company, (iii) cooperate
with the Company in good faith in order to effectively contest such claim and
(iv) permit the Company to participate in any proceedings relating to such
claim; provided, however, that the Company shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold Executive harmless, on
an after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this Section (c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
Executive to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner, and Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, further, that if the Company directs Executive to pay such
claim and sue for a refund, the Company shall advance the amount of such payment
to Executive, on an interest-free basis, and shall indemnify and hold Executive
harmless, on an after-tax basis, from any Excise Tax or income tax (including
interest or penalties with respect thereto) imposed with respect to such advance
(including without limitation with respect to forgiveness of such advance
pursuant to Section (d)) or with respect to any imputed income with respect to
such advance; provided, further, that if Executive is required to extend the
statute of limitations to enable the

                                        1
<PAGE>

Company to contest such claim, Executive may limit this extension solely to such
contested amount. The Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
Executive shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority.

         (d) If, after the receipt by Executive of an amount paid or advanced by
the Company pursuant to this Exhibit A, Executive becomes entitled to receive
any refund with respect to a Gross-Up Payment, Executive shall promptly pay to
the Company the amount of such refund received (together with any interest paid
or credited thereon after taxes applicable thereto). If, after the receipt by
Executive of an amount advanced by the Company pursuant to Section (c), a
determination is made that Executive shall not be entitled to any refund with
respect to such claim and the Company does not notify Executive in writing of
its intent to contest such denial of refund prior to the expiration of thirty
days after such determination, then such advance shall be forgiven and shall not
be required to be repaid and the amount of such advance shall offset, to the
extent thereof, the amount of the Gross-Up Payment required to be paid.

                                       2

<PAGE>

                                                                       EXHIBIT C

                               LIST OF ACTIVITIES

York College of Pennsylvania
York Country Day School
Rambo Run Club
The Mercersburg Academy

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