Document:

Exhibit
10.19

 

RIVERWOOD HOLDING, INC.

2002 STOCK INCENTIVE PLAN

 

Section
1.  Purpose

 

The purpose of this Riverwood Holding, Inc. 2002 Stock
Incentive Plan is to foster and promote the long-term financial success of the
Company and the Subsidiaries and to increase materially stockholder value by (a)
motivating superior performance by participants in the Plan, (b)
providing participants in the Plan with an ownership interest in the Company
and (c) enabling the Company and the Subsidiaries to attract and retain
the services of an outstanding management team upon whose judgment, interest
and special effort the successful conduct of its operations is largely
dependent.

 

Section
2.  Definitions

 

2.1.                              Definitions.  Whenever used herein, the following terms
shall have the respective meanings set forth below:

 

(a)                                  “Affiliate”
means, with respect to any person, any other person controlled by, controlling
or under common control with such person.

 

(b)                                 “Award
Agreement” means the agreement evidencing the grant of any Incentive Award
under the Plan, including a Subscription Agreement, an Option Agreement or
Restricted Stock Unit Agreement.

 

(c)                                  “Board”
means the Board of Directors of the Company.

 

(d)                                 
“CD&R Fund” means the Clayton, Dubilier & Rice Fund V Limited Partnership,
a Cayman Islands exempted limited partnership, and any successor investment
vehicle managed by Clayton, Dubilier & Rice, Inc.

 

(e)                                  “Cause”
shall mean, unless otherwise provided in an Award Agreement, (i) the
willful failure of the Participant to perform substantially his
employment-related duties, (ii) the Participant’s willful or serious
misconduct that has caused or could reasonably be expected to result in
material injury to the business or reputation of the Company or any Subsidiary,
(iii) the Participant’s conviction of, or entering a plea of guilty or nolo
contendere to, a crime constituting a felony or (iv) the breach
by the Participant of any written covenant or agreement with the Company or any
Subsidiary not to disclose any information pertaining to the Company or any
Subsidiary, not to compete or interfere with the Company or any Subsidiary or
relating to the take-along rights described in Section 10.3 hereof; provided
that, with respect to any Participant who is party to

 

 

an employment or individual severance agreement with
the Company or RIC, “Cause” shall have the meaning, if any specified in such
agreement.

 

(f)                                    “Change
in Control” means the first to occur of the following events after the
Effective Date:

 

(i)                                     the
acquisition by any person, entity or “group” (as defined in Section 13(d)
of the Securities Exchange Act of 1934, as amended), other than the Company,
the Subsidiaries, any employee benefit plan of the Company or the Subsidiaries,
the CD&R Fund, any Investor or any Affiliate of the CD&R Fund or of an
Investor, of 50% or more of the combined voting power of the Company’s or RIC’s
then outstanding voting securities;

 

(ii)                                  the
merger or consolidation of the Company or RIC, as a result of which persons who
were stockholders of the Company or RIC, as the case may be, immediately prior
to such merger or consolidation, do not, immediately thereafter, own, directly
or indirectly, more than 50% of the combined voting power entitled to vote
generally in the election of directors of the merged or consolidated company;

 

(iii)                               the
liquidation or dissolution of the Company or RIC other than a liquidation of
RIC into the Company or into any Subsidiary; and

 

(iv)                              the
sale, transfer or other disposition of all or substantially all of the assets of
the Company or RIC to one or more persons or entities that are not, immediately
prior to such sale, transfer or other disposition, Affiliates of the Company,
RIC, the CD&R Fund or any Investor.

 

(g)                                 “Change
in Control Price” means the price per share of Common Stock paid in conjunction
with any transaction resulting in a Change in Control (as determined in good
faith by the Board if any part of such price is payable other than in cash).

 

(h)                                 “Committee”
means the Compensation and Benefits Committee of the Board (or such other
committee of the Board which shall have jurisdiction over the compensation of
officers).

 

(i)                                     “Common
Stock” means the Class A Common Stock, par value $.01 per share, of the
Company.

 

(j)                                     “Company”
means Riverwood Holding, Inc., a Delaware corporation formerly known as New
River Holding, Inc., and any successor thereto.

 

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(k)                                  “Effective
Date” means January 1, 2002.

 

(l)                                     “Employee”
means any executive officer or other key management employee of the Company.

 

(m)                               “Extraordinary
Termination” means a termination of a Participant’s employment with the Company
and the Subsidiaries by reason of the Participant’s death, Permanent Disability
or Retirement.

 

(n)                                 “Fair
Market Value” means, as of any date, the fair market value on such date per
share of Common Stock as determined in good faith by the Executive Committee of
the Board.  In making a determination of
Fair Market Value, the Executive Committee shall give due consideration to such
factors as it deems appropriate, including, without limitation, the earnings
and certain other financial and operating information of the Company and the
Subsidiaries in recent periods, the potential value of the Company and the
Subsidiaries as a whole, the future prospects of the Company and the
Subsidiaries and the industries in which they compete, the history and
management of the Company and the Subsidiaries, the general condition of the
securities markets, the fair market value of securities of companies engaged in
businesses similar to those of the Company and the Subsidiaries and a valuation
of the Common Stock, which shall be performed, with respect to each fiscal year
by an independent valuation firm chosen by the Executive Committee.  Notwithstanding the foregoing, following a
Public Offering, Fair Market Value shall mean the average of the high and low
trading prices for a share of Common Stock on the primary national exchange
(including NASDAQ) on which the Common Stock is then traded on the trading day
immediately preceding the date as of which such Fair Market Value is
determined.  The determination of Fair
Market Value will not give effect to any restrictions on transfer of the shares
of Common Stock or the fact that such Common Stock would represent a minority
interest in the Company.

 

(o)                                 “Incentive
Award” means an award of Options or Restricted Stock Units granted pursuant to
the terms and conditions of the Plan.

 

(p)                                 “Investors”
means each of the investors who purchased shares of Common Stock or shares of
Class B Common Stock of the Company concurrently with the consummation of the
merger contemplated by the Merger Agreement, and their “specified affiliates”,
within the meaning of the Stockholders Agreement of the Company, as amended
from time to time.

 

(q)                                 “Merger
Agreement” means the Agreement and Plan of Merger, dated as of October 25,
1995, among CDRO Acquisition Corporation, an indirect,

 

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wholly owned subsidiary of the Company, RIC Holding, Inc.
a wholly owned subsidiary of the Company, and Riverwood International
Corporation.

 

(r)                                    “New
Employer” means a Participant’s employer, or the parent or a subsidiary of such
employer, immediately following a Change in Control.

 

(s)                                  “Option”
means the right granted to a Participant under the Plan to purchase a stated
number of shares of Common Stock at a stated price, not less than Fair Market
Value on the date of grant, for a specified period of time.

 

(t)                                    “Option
Agreement” means an agreement between the Company and the Participant setting
forth the terms and conditions of any Options granted hereunder, which
agreement shall, unless the Board otherwise determines, be substantially in the
form attached hereto as Exhibit B.

 

(u)                                 “Participant”
means any Employee designated by the Board to participate in the Plan.

 

(v)                                 “Permanent
Disability” means, unless otherwise provided in an Award Agreement, a physical
or mental disability or infirmity that prevents the performance of a
Participant’s employment-related duties lasting (or likely to last, in the
judgment of the Board) for a period of six months or longer and within 30 days
after RIC notifies the Participant in writing that it intends to replace him,
the Participant shall not have returned to the performance of his
employment-related duties on a full-time basis.  The Board’s reasoned and good faith judgment of Permanent
Disability shall be final, binding and conclusive and shall be based on such
competent medical evidence as shall be presented to it by such Participant
and/or by any physician or group of physicians or other competent medical
expert employed by the Participant, the Company or RIC to advise the Board;
provided that, with respect to any Participant who is a party to an employment
or individual severance agreement with the Company or RIC, “Permanent
Disability” shall have the meaning, if any, assigned in such agreement to such
term or to a similar term such as “Disability” or “Disabled”.

 

(w)                               “Plan”
means this Riverwood Holding, Inc. 2002 Stock Incentive Plan, as the same may
be amended from time to time.

 

(x)                                   “Public
Offering” means the first day as of which sales of Common Stock are made to the
public in the United States pursuant to an underwritten public offering of the
Common Stock led by one or more underwriters at least one of which is an
underwriter of nationally recognized standing.

 

(y)                                 “Registration
and Participation Agreement” means the Registration and Participation
Agreement, dated as of March 27, 1996, among the Company

 

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and certain stockholders of the Company, as the same
may be amended from time to time.

 

(z)                                   “Restricted
Stock Unit” means the right granted to a Participant under the Plan to receive
one share of Common Stock on a deferred basis in accordance with the terms and
conditions of the Plan.

 

(aa)                            “Restricted
Stock Unit Agreement” means an agreement between the Company and the
Participant setting forth the terms and conditions of any Restrictive Stock
Units granted hereunder, which agreement shall, unless the Board otherwise
determines, be substantially in the form attached hereto as Exhibit C.

 

(bb)                          “Retirement”
means a Participant’s retirement from active employment with the Company and
the Subsidiaries at or after age 65.

 

(cc)                            “RIC”
means Riverwood International Corporation, a Delaware corporation formerly
known as Riverwood International USA, Inc., and any successor thereto.

 

(dd)                          “Subscription
Agreement” means the management stock subscription agreement entered into by
the Company and a Participant setting forth the terms and conditions of any
award of Common Stock by such Participant under the Plan which agreement shall,
unless the Board otherwise determines, be substantially in the form attached
hereto as Exhibit A.

 

(ee)                            “Subsidiary”
means any corporation or other person, a majority of whose outstanding voting
securities or other equity interests is owned, directly or indirectly, by the
Company.

 

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2.2.                              Gender
and Number.  Except when otherwise
indicated by the context, words in the masculine gender used in the Plan shall
include the feminine gender, the singular shall include the plural, and the
plural shall include the singular.

 

Section
3.  Eligibility and Participation

 

Participants in the Plan shall be those Employees
selected by the Board to participate in the Plan from time to time.  The selection of an Employee as a
Participant shall neither entitle such Employee to nor disqualify such Employee
from participation in any other award or incentive plan.

 

Section
4.  Powers of the Board

 

4.1.                              
Power to Grant and Establish Terms of Awards.  The Board shall, subject to the terms of the Plan, determine the
Participants to whom Incentive Awards shall be granted and the terms and
conditions of such Incentive Awards, provided that nothing in the Plan shall
limit the right of members of the Board who are Employees to receive Incentive
Awards hereunder.

 

4.2.                              Administration.  The Board shall be responsible for the
administration of the Plan.  Any
authority exercised by the Board under the Plan shall be exercised by the Board
in its sole discretion.  The Board, by
majority action thereof, is authorized to prescribe, amend and rescind rules
and regulations relating to the administration of the Plan, to provide for
conditions and assurances deemed necessary or advisable to protect the
interests of the Company and the Subsidiaries, and to make all other
determinations necessary or advisable for the administration and interpretation
of the Plan or to carry out its provisions and purposes.  Determinations, interpretations or other
actions made or taken by the Board pursuant to the provisions of the Plan shall
be final, binding and conclusive for all purposes and upon all persons.

 

4.3.                              Delegation
by the Board.  All of the powers,
duties and responsibilities of the Board specified in the Plan may, to the full
extent permitted by applicable law, be exercised and performed by the Committee
or any other duly constituted committee of the Board, in any such case, to the
extent authorized by the Board to exercise and perform such powers, duties and
responsibilities.

 

Section
5.  Shares Subject to Plan

 

5.1.                              Number.  Subject to the provisions of
Section 5.3, the maximum number shares of Common Stock subject to
Incentive Awards under the Plan (including shares that become available for
grant pursuant to Section 5.2) may not exceed, in the aggregate 658,353
shares.  The shares of Common Stock to
be delivered under the Plan

 

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may consist, in whole or in part, of Common Stock held in treasury or
authorized but unissued shares of Common Stock, not reserved for any other
purpose.

 

5.2.                              Canceled,
Terminated or Forfeited Awards.  Any
shares of Common Stock subject to any portion of an Incentive Award which for
any reason expires, or is canceled, terminated, forfeited or otherwise settled,
in whole or in part, without the issuance of such shares of Common Stock, shall
again be available for award under the Plan, subject to the maximum limitation
specified in Section 5.1.

 

5.3.                              Adjustment
in Capitalization.  The number of
shares of Common Stock available for issuance upon exercise or settlement of
Incentive Awards under the Plan, the number and class of any outstanding
Restricted Stock Units, and the number, class and exercise price of any
outstanding Options, may be adjusted by the Board, in its sole discretion, if
it shall deem such an adjustment to be necessary or appropriate to reflect any
Common Stock dividend, stock split or share combination or any
recapitalization, merger, consolidation, exchange of shares, liquidation or
dissolution of the Company.

 

Section
6.  Terms of Options

 

6.1.                              Grant
of Options.  Options may be granted
to Participants at such time or times as shall be determined by the Board.  Each Option granted to a Participant shall
be evidenced by an Option Agreement that shall specify the number of shares of
Common Stock that may be purchased pursuant to such Option, the exercise price
at which a share of Common Stock may be purchased pursuant to such Option, the
duration of such Option and such other terms and conditions consistent with the
Plan as the Board shall determine, including customary representations,
warranties and covenants with respect to securities law matters.  Unless otherwise determined by the Board,
such Option Agreement shall also state that the holder thereof is entitled to
the benefits of and shall be bound by the obligations set forth in the
Registration and Participation Agreement, dated as of March 27, 1996 and as the
same may be amended from time to time, among the Company and certain
stockholders of the Company, to the extent set forth therein.

 

6.2.                              Option
Price.  The exercise price per share
of Common Stock to be purchased upon exercise of an Option (the “Option
Price”) shall be determined by the Board but shall not be less than the
Fair Market Value on the date the option is granted.

 

6.3.                              Exercise
of Options.

 

(a)                                  Unless
otherwise provided by the Board in the Option Agreement evidencing such Award,
subject to the continuous employment of the Participant with the Company or one
of the Subsidiaries, Options granted to a Participant shall become one-third
vested on the second anniversary of the date of grant and

 

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vested as to the remaining two-thirds on the third
anniversary of the date of grant, provided that in all events 100% of
such Options shall become vested (i) at the time and under the
circumstances described in Sections 8.1 or 9, if applicable, or (ii)(x)
in the event that the CD&R Fund and, if applicable, its Affiliates effect a
sale or other disposition of all of the Common Stock then held by the CD&R
Fund and its Affiliates to one or more persons other than any person who is an
Affiliate of the CD&R Fund and (y) thereafter, the Participant’s
employment with the Company and the Subsidiaries is terminated by the Company
other than for Cause or, to the extent provided in the Award Agreement
evidencing such Options, by the Participant for “good reason” (as defined in
such Option Agreement) (a “Disposition Transaction and Termination”), as of the
date of such termination.

 

(b)                                 Notwithstanding
any other provision herein, the Board may accelerate the vesting or exercisability
of any Option, all Options or any class of Options, at any time and from time
to time.  On or before the date upon
which any Employee will exercise any exercisable Option, the Company and such
Employee shall enter into a Subscription Agreement with respect to the Common
Stock to be purchased upon exercise of such Option.  Notwithstanding any other provision of the Plan, no Option shall
be exercisable for more than 10 years after the date on which it is granted.

 

6.4.                              Payment.  The Board shall establish procedures
governing the exercise of Options, which procedures shall generally require
that written notice of the exercise thereof be given and that the exercise
price thereof be paid in full in cash or cash equivalents, including by
personal check, at the time of exercise. 
The exercise price of any Options exercised at any time following a
Public Offering may be paid in full or in part in the form of shares of Common
Stock that have been owned by the Participant for at least six months, based on
the Fair Market Value of such shares of Common Stock on the date of exercise,
subject to such rules and procedures as may be adopted by the Board and, if the
Board deems it necessary or appropriate, subject to shareholder approval of the
Plan.  Subject to Section 6.3, as soon
as practicable after receipt of a written exercise notice and payment in full
of the exercise price of any Options, the Company shall deliver to the
Participant a certificate or certificates representing the shares of Common
Stock acquired upon the exercise thereof, bearing appropriate legends if
applicable.

 

Section
7.  Restricted Stock Units

 

7.1.                              Grant
of Restricted Stock Units. 
Restricted Stock Units may be granted to Participants at such time or
times as shall be determined by the Board.  Each Restricted Stock Unit granted to a Participant shall be
evidenced by a Restricted Stock Unit Agreement that shall specify the terms and
conditions of such Restricted Stock Units consistent with the Plan as the Board
shall determine, including customary

 

8

 

representations, warranties and covenants with respect to securities
law matters and such other terms and conditions as the Board shall
determine.  Unless otherwise determined
by the Board, such Restricted Stock Unit Agreement shall also state that in
respect of any shares of Common Stock delivered to the Participant in respect
of any Restricted Stock Units, such Participant shall be entitled to certain of
the benefits (relating to the right to participate in certain sales and
purchases of Common Stock by Investors) set forth in the Registration and
Participation Agreement and shall be bound by the obligations set forth in such
Registration and Participation Agreement, in each case, to the extent set forth
therein and in the Restricted Stock Unit Agreement.

 

7.2.                              Vesting
of Restricted Stock Units.

 

(a)                                  In
General.  Unless otherwise provided
by the Board in the Restricted Stock Unit Agreement evidencing such Award,
subject to the continuous employment of the Participant with the Company or one
of the Subsidiaries, Restricted Stock Units shall become fully vested on the
second anniversary of the date of grant, provided that in all events
100% of the Restricted Stock Units shall become vested (i) at the time
and under the circumstances described in Sections 8.1 or 9, if applicable, or (ii)
(x) in the event that the CD&R Fund and, if applicable, its
Affiliates effect a sale or other disposition of all of the Common Stock then
held by the CD&R Fund and its Affiliates to one or more persons other than
any person who is an Affiliate of the CD&R Fund and (y) thereafter,
the Participant’s employment with the Company and the Subsidiaries is
terminated by the Company other than for cause or, to the extent provided in the
Award Agreement evidencing such Restricted Stock Units, by the Participant for
“good reason” (as defined in such Restricted Stock Unit Agreement) (“a
Disposition and Transaction and Termination”), as of the date of such
termination.

 

(b)                                 Issuance.  In the event that Restricted Stock Units
become vested as a result of Sections 7.2(a) or 8.1, the Company shall at the
discretion of the Board (i) deliver to the Participant the number of
shares of Common Stock underlying the Restricted Stock Units that have become
so vested and, on or before the date such shares are delivered to the
Participant, the Company and such Participant shall enter into a Subscription
Agreement with respect to the Common Stock to be so awarded or (ii) pay
to the Participant cash in an amount equal to the product of (x) the
number of shares underlying the Restricted Stock Units that have become so
vested and (y) the Fair Market Value as of the vesting date per share,
such payment to be made as promptly practicable following the determination of
such Fair Market Value.  Notwithstanding
the foregoing, in the event of a Change of Control, any Restricted Stock Units
that become vested as a result shall be cancelled in exchange for a payment in
an amount equal to the product of (i) the Change in Control Price
multiplied by (ii) the number of shares of Common Stock covered by the
Restricted Stock Units that have become so

 

9

 

vested, and the remainder of such Restricted Stock
Unit shall be cancelled. 
Notwithstanding the preceding sentence, if so determined by the Board
(as constituted immediately prior to the Change of Control), such payment may
be made in shares of the stock of the New Employer having an aggregate fair
market value (as determined by the Board in good faith) equal to such amount, provided
that such shares of common stock of the New Employer are of a class that is
publicly traded.  Such payment shall be
payable in full, as soon as reasonably practicable, but in no event later than 30
days, following the Change in Control.

 

(c)                                  Power
to Accelerate.  Notwithstanding any
other provision herein, the Board may accelerate the payment of any Restrictive
Stock Unit at any time and from time to time, on such terms and conditions as
the Board may determine.

 

Section
8.  Termination of Employment

 

8.1.                              Extraordinary
Termination.  Unless otherwise
provided in the Option Agreement or otherwise determined by the Board, in the
event that a Participant’s employment with the Company and the Subsidiaries
terminates by reason of an Extraordinary Termination, then all Options or
Restricted Stock Units granted to such Participant shall become fully vested as
of the date of such termination.  Any
such Option shall be exercisable and remain exercisable solely until the first
to occur of (i) the one year anniversary of the date of the
Participant’s termination of employment or (ii) the expiration of the
term of any such Option.  All Options
that are not exercised within the period described in the preceding sentence
shall terminate and be canceled upon the expiration of such period.  The shares of Common Stock or payment
related to any Restricted Stock Units held by a Participant at the time of an
Extraordinary Termination shall be issued to such Participant upon such
Extraordinary Termination as provided in Section 7.2.

 

8.2.                              Termination
for Cause.  Unless otherwise
provided in the Award Agreement or otherwise determined by the Board, in the
event that a Participant’s employment with the Company and the Subsidiaries is
terminated by the Company or a Subsidiary for Cause, any Options (whether or
not then vested or exercisable) held by and any Restricted Stock Units granted
to such Participant shall terminate and be canceled immediately upon such
termination of employment.

 

8.3.                              Other
Termination of Employment.  Unless
otherwise provided in the Award Agreement or otherwise determined by the Board
at the time of grant, the Board shall provide in the Option Agreement
evidencing options granted hereunder that, in the event that a Participant’s
employment with the Company and the Subsidiaries terminates for any reason
other than (i) an Extraordinary Termination or (ii) for Cause,
any Options then held by such Participant that have become vested on or prior
to the date of such termination shall, subject to Section 8.4, remain
exercisable until the first to occur

 

10

 

of (x) the 60th day after the expiration of the period, if any,
specified in such Participant’s Option Agreement during which the Company or
the CD&R Fund has a right to purchase such Options from the Participant or
(y) the expiration of the term of such Option.  Any Options held by the Participant that are not vested Options
or Restricted Stock Units that are not vested as of the date of the
Participant’s termination of employment shall terminate and be canceled
immediately upon such termination, and any vested Options that are not
exercised within the period described in the preceding sentence shall terminate
and be canceled upon the expiration of such period.  The shares of Common Stock related to any vested Restricted Stock
Units held by the Participant shall be issued to such Participant upon
Participant’s termination of employment pursuant to Section 7.2.

 

8.4.                              Certain
Rights upon Termination of Employment Prior to Public Offering.  Unless otherwise provided in the Award
Agreement or otherwise determined by the Board at the time of grant, the Board
shall provide in each Award Agreement evidencing Incentive Awards granted
hereunder that, upon a termination of a Participant’s employment with the
Company and the Subsidiaries prior to a Public Offering for any reason, the
Company and the CD&R Fund and its Affiliates shall have successive rights
to repurchase for cash any vested Options or shares of Common Stock (including
shares issued with respect to Restricted Stock Units as provided in Section
7.2) then held by the Participant, and, upon an Extraordinary Termination, the
Participant shall have the right to require the Company to repurchase shares of
Common Stock then owned by him (provided the Participant has held such shares
of Common Stock for at least six months), for a repurchase price per share
equal to the Fair Market Value, reduced in the case of any Options by the
exercise price per share of Common Stock for such Option, and upon such
additional terms and conditions as are set forth in such Award Agreement.

 

Section
9.  Change in Control

 

9.1.                              Accelerated
Vesting and Payment.

 

Options.  Unless otherwise provided in the Award
Agreement or otherwise determined by the Board at the time of grant, in the
event of a Change in Control, each outstanding Option (regardless of whether
such Option is at such time otherwise vested or exercisable), without regard to
this Section 9.1, shall be canceled in exchange for a payment in an amount
equal to the product of (i) the excess, if any, of the Change in Control
Price over the Option Price, multiplied by (ii) the number of shares of
Common Stock covered by such Option.  Notwithstanding
the preceding sentence, if so determined by the Board (as constituted
immediately prior to the Change of Control), such payment may be made in shares
of the stock of the New Employer having an aggregate fair market value (as
determined by the Board in good faith) equal to such amount, provided
that such shares of common stock of the New Employer are of a class that is

 

11

 

publicly traded. 
Such payment shall be payable in full, as soon as reasonably
practicable, but in no event later than 30 days, following the Change in
Control.

 

9.2.                              Restricted
Stock Units.  In the event of a
change in Control, all outstanding Restricted Stock Units shall become fully
vested.

 

9.3.                              
Certain Take-Along Rights Prior to a Public Offering.  Unless otherwise determined by the Board at
time of grant, the Board shall provide in each Subscription Agreement
evidencing Incentive Awards granted hereunder that, upon certain transactions
constituting a Change in Control, the Participant will be required to sell
shares of Common Stock then owned by him, for a cash payment per share of
Common Stock equal to the Change in Control Price, and upon such additional
terms and conditions as are set forth in such Subscription Agreement.

 

Section
10.  Amendment, Modification, and
Termination of the Plan

 

The Board at any time may terminate or suspend the
Plan, and from time to time may amend or modify the Plan.  No amendment, modification, termination or
suspension of the Plan shall in any manner adversely affect any Incentive Award
theretofore granted under the Plan, without the consent of the Participant
holding such Incentive Award. 
Shareholder approval of any such amendment, modification, termination or
suspension shall be obtained to the extent mandated by applicable law, or if
otherwise deemed appropriate by the Board.

 

Section
11.  Miscellaneous Provisions

 

11.1.                        Nontransferability of
Incentive Awards.  No Incentive
Awards granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of
descent and distribution.  All rights
with respect to any Incentive Award granted to a Participant under the Plan
shall be exercisable during his lifetime only by such Participant.  Restrictions, if any, on the transfer of
Common Stock awarded upon exercise of any Options or pursuant to Section 7.1 of
the Plan shall be set forth in the applicable Award Agreement evidencing such Incentive
Award, including without limitations, restrictions described in Section 8.4
herein.

 

11.2.                        Beneficiary Designation.  Each Participant under the Plan may from
time to time name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any benefit under the Plan is to be paid
or by whom any right under the Plan is to be exercised in case of his
death.  Each designation will revoke all
prior designations by the same Participant, shall be in a form prescribed by
the Board and will be effective only when filed by the Participant in writing
with the Board during his or her lifetime. 
In the absence of any such designation, benefits remaining unpaid or

 

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Options or Restricted Stock Units outstanding at the Participant’s
death shall be paid to or exercised by the Participant’s surviving spouse, if
any, or otherwise to or by his or her estate.

 

11.3.                        No Guarantee of Employment
or Participation.  Nothing in the
Plan shall interfere with or limit in any way the right of the Company or any
Subsidiary to terminate any Participant’s employment at any time and for any
reason, nor confer upon any Participant any right to continue in the employ of
the Company or any Subsidiary.  No Employee
shall have a right to be selected as a Participant, or, having been so
selected, to receive any Incentive Awards under the Plan.

 

11.4.                        Tax Withholding.  The Company and the Subsidiaries shall have
the power to withhold, or require a Participant to remit to the Company or a
Subsidiary promptly upon notification of the amount due, an amount determined
by the Company or such Subsidiary to be sufficient to satisfy all Federal,
state, local and foreign withholding tax requirements in respect of any
Incentive Award and the Company may (or may cause a Subsidiary to) defer
payment of cash or issuance or delivery of Common Stock until such requirements
are satisfied.  The Board may permit or
require a Participant to satisfy his tax withholding obligation hereunder in
such other manner, subject to such conditions, as the Board shall determine.

 

11.5.                        Indemnification.  Each person who is or shall have been a
member of the Committee or the Board shall be indemnified and held harmless by
the Company and RIC to the fullest extent permitted by law against and from any
loss, cost, liability or expense (including any related attorney’s fees and
advances thereof) in connection with, based upon or arising or resulting from
any claim, action, suit or proceeding to which he may be made a party or in
which he may be involved by reason of any action taken or failure to act under
or in connection with the Plan or any Award Agreement and from and against any
and all amounts paid by him in settlement thereof, with the Company’s approval,
or paid by him in satisfaction of any judgment in any such action, suit or
proceeding against him, provided he shall give the Company an opportunity, at
its own expense, to handle and defend the same before he undertakes to handle
and defend it on his own behalf.  The
foregoing right of indemnification shall not be exclusive and shall be
independent of any other rights of indemnification to which such persons may be
entitled under the Company’s or RIC’s Articles of Incorporation or By-laws, by
contract, as a matter of law or otherwise.

 

11.6.                        No Limitation on
Compensation.  Nothing in the Plan
shall be construed to limit the right of the Company to establish other plans
or to pay compensation to its employees in cash or property, in a manner which
is not expressly authorized under the Plan.

 

13

 

11.7.                        Requirements of Law.  The granting of Incentive Awards and the
issuance of shares of Common Stock pursuant to the Plan shall be subject to all
applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national or foreign securities exchanges as may be
appropriate or required, as determined by the Board.  Notwithstanding any other provision of the Plan or any Award
Agreement, no Incentive Awards shall be granted under the Plan, and no shares
of Common Stock shall be issued upon exercise of, or otherwise in connection
with, any Incentive Award granted under the Plan, if such grant or issuance
would result in a violation of applicable law, including the federal securities
laws and any applicable state or foreign securities laws.

 

11.8.                        Governing Law.  The Plan, and all agreements hereunder,
shall be construed in accordance with and governed by the laws of the State of
New York, except to the extent that the corporate law of the State of Delaware
specifically and mandatorily applies.

 

11.9.                        No Impact On Benefits.  Incentive Awards granted under the Plan are
not compensation for purposes of calculating an Employee’s rights under any
employee benefit plan, except to the extent provided in any such plan.

 

11.10.                  Freedom of Action.  Subject to Section 10, nothing in the
Plan or any Award Agreement shall be construed as limiting or preventing the
Company or any Subsidiary from taking any action with respect to the operation or
conduct of its business that it deems appropriate or in its best interest.

 

11.11.                  Term of Plan.  The Plan shall be effective as of the
Effective Date.  The Plan shall expire
on the tenth anniversary of the Effective Date (except as to Incentive Awards outstanding
on that date), unless sooner terminated pursuant to Section 10.

 

11.12.                  No Right to Particular Assets.  Nothing contained in this Plan and no action
taken pursuant to this Plan shall create or be construed to create a trust of
any kind or any fiduciary relationship between the Company and the
Subsidiaries, on the one hand, and any Participant or executor, administrator
or other personal representative or designated beneficiary of such Participant,
on the other hand, or any other persons. 
Any reserves that may be established by the Company or any Subsidiary in
connection with this Plan shall continue to be held as part of the general
funds of the Company or such Subsidiary, and no individual or entity other than
the Company or such Subsidiary shall have any interest in such funds until paid
to a Participant.  To the extent that
any Participant or his executor, administrator or other personal
representative, as the case may be, acquires a right to receive any payment
from the Company or any Subsidiary pursuant to this Plan, such right shall be
no greater than the right of an unsecured general creditor of the Company or
such Subsidiary.

 

14

 

11.13.                  Notices.  Each Participant shall be responsible for furnishing
the Board with the current and proper address for the mailing of notices and
delivery of agreements and shares of Common Stock.  Any notices required or permitted to be given shall be deemed
given if directed to the person to whom addressed at such address and mailed by
regular United States mail, first-class and prepaid.  If any item mailed to such address is returned as undeliverable
to the addressee, mailing will be suspended until the Participant furnishes the
proper address.

 

11.14.                  Severability of Provisions.  If any provision of this Plan shall be held
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provisions hereof, and this Plan shall be construed and enforced as
if such provision had not been included.

 

11.15.                  Incapacity.  Any benefit payable to or for the benefit of
a minor, an incompetent person or other person incapable of receiving such
benefit shall be deemed paid when paid to such person’s guardian or to the
party providing or reasonably appearing to provide for the care of such person,
and such payment shall fully discharge the Committee, the Company and other
parties with respect thereto.

 

11.16.                  No Rights as Stockholder.  No Participant shall have any voting or
other rights as a stockholder of the Company with respect to any Common Stock
covered by any Incentive Award until the issuance of a certificate or
certificates to the Participant for such Common Stock.  No adjustment shall be made for dividends or
other rights for which the record date is prior to the issuance of such
certificate or certificates.

 

11.17.                  Headings and Captions.  The headings and captions in this Plan are
provided for reference and convenience only, shall not be considered part of
this Plan and shall not be employed in the construction of this Plan.

 

Approved by the Board of Directors as of November 14,
2001.

 

15Exhibit
10.20

 

EMPLOYMENT AGREEMENT

 

This EMPLOYMENT AGREEMENT is entered into as of this
30th day of September, 2002 by and among Riverwood International Corporation, a
Delaware corporation (“Employer”), Riverwood Holding, Inc., a Delaware
corporation (“Holding”) and  Robert W.
Spiller (“Executive”).

 

W I T N E S S E T H :

 

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

 

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

 

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

 

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

 

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

 

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

 

2.  Term; Position and Responsibilities.

 

(a)  Term of
Employment.  Unless Executive’s
employment shall sooner terminate pursuant to Section 7, Employer shall
employ Executive for a term commencing on the date hereof and ending on
the third anniversary of the date hereof (the “Initial Term”).  Effective upon the expiration of the Initial
Term and of

 

 

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

 

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

 

3.  Base
Salary.  As compensation for the
services to be performed by Executive during the Employment Period, Employer
shall pay Executive a base salary at an annualized rate of $350,000,
payable in installments on Employer’s regular payroll dates, and, in the event
that Executive’s employment hereunder is terminated by death, for the remainder
of the pay period in which death occurs and for one month thereafter.  Employer’s Board shall review Executive’s
base salary annually during the period of his employment hereunder and, in its
sole discretion, Employer’s Board may increase (but may not decrease) such base
salary from time to time based upon the performance of Executive, the financial
condition of Employer, prevailing industry salary levels and such other factors
as Employer’s Board shall consider relevant. 
(The annual base salary payable to Executive under this
Section 3, as the same may be increased from time to time and without
regard to any reduction therefrom in accordance with the next

 

2

 

sentence, shall hereinafter be referred to as the “Base Salary”.)  The Base Salary payable under this Section 3
shall be reduced to the extent that Executive elects to defer such Base Salary
under the terms of any deferred compensation, savings plan or other voluntary
deferral arrangement that may be maintained or established by Employer.

 

4.  Incentive
Compensation Arrangements.

 

(a)  Incentive Compensation.  During the Employment Period, Executive
shall participate in Employer’s incentive compensation programs for its senior
executives existing from time to time, at a level commensurate with his
position and duties with Employer and based on such performance targets as may
be established from time to time by Employer’s Board or a committee
thereof.  Executive’s aggregate annual
target bonus opportunity shall be 70% of Base Salary.

 

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

 

6.  Perquisites
and Expenses.

 

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

 

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

 

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

 

3

 

7.  Termination
of Employment.

 

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

 

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

 

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

 

(d)  Termination
by Executive.  Executive may
terminate his employment for any reason. 
A termination of employment by Executive for “Good Reason” shall
mean a termination by Executive of his employment with Employer within
30 days following the occurrence, without Executive’s consent, of any of
the

 

4

 

following events: (i) the assignment to Executive of duties
that are significantly different from, and that result in a substantial
diminution of, the duties that he is to assume on the date hereof, (ii) the
failure of Employer to obtain the assumption of this Agreement by any Successor
(as defined below) to Employer as contemplated by Section 14, (iii) a
reduction in the rate of Executive’s Base Salary, (iv) a material
breach by Employer of any of its obligations hereunder or by Holding of any of
its obligations under any option agreement or other incentive award agreement
or (v) delivery to Executive of a Non-Extension Notice, provided
that, in the case of any of clauses (i), (iii) or (iv), within
30 days following the occurrence of any of the events set forth therein,
Executive shall have delivered written notice to Employer of his intention to
terminate his employment for Good Reason, which notice specifies in reasonable
detail the circumstances claimed to give rise to Executive’s right to terminate
his employment for Good Reason, and Employer or Holding, as the case may be,
shall not have cured such circumstances to the reasonable satisfaction of
Executive.

 

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

 

(f)  Payments
Upon Certain Terminations.

 

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

 

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

 

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

 

5

 

(C) the
amount, if any, paid or payable to Executive under the terms of any severance
plan, policy, program or practice of Holding, Employer or any of their
respective Affiliates applicable to Executive, as in effect on the Date of
Termination; provided that Employer may, at any time, pay to Executive,
in a single lump sum and in satisfaction of Employer’s obligations under
clauses (A) and (B) of this Section 7(f)(i), an amount equal to
(x) the installments of the Base Salary then remaining to be paid
to Executive pursuant to clause (A) above, and the amount, if any, then
remaining to be paid to Executive pursuant to clause (B) above, less
(y) the amount, if any, remaining to be paid to Executive pursuant
to any plan, policy, program or practice identified under clause (C)
above.

 

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

 

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

 

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

 

6

 

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

 

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

 

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

 

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

 

7

 

others who do business with Holding, Employer or any of their
respective Affiliates (collectively, “Confidential Information”) to any third
person unless such Confidential Information has been previously disclosed to
the public or is in the public domain (other than by reason of Executive’s
breach of this Section 8).

 

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

 

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

 

11.  Non-Solicitation
of Customers.  During the
Restriction Period, Executive shall not, directly or indirectly, for his own
account or for the account of

 

8

 

any other Person anywhere in the United States or Europe, solicit or
otherwise attempt to establish any business relationship of a nature that
is competitive with the paperboard and paperboard packaging business of
Holding, Employer or any of their respective subsidiaries, as determined in
good faith by Employer’s Board any Person who is or was a customer, client
or distributor of Holding, Employer or any of their respective Affiliates at
any time during which Executive was employed by Employer (in the case of
any such activity during such time) or during the twelve-month period preceding
the Date of Termination (in the case of any such activity after the Date of
Termination), other than any such solicitation on behalf of Holding, Employer
or any of their respective Affiliates during Executive’s employment with
Employer.

 

12.  Return
of Documents.  In the event of the
termination of Executive’s employment for any reason, Executive shall deliver
to Employer all of (a) the property of each of Holding, Employer
and their respective Affiliates and (b) the non-personal documents
and data of any nature and in whatever medium of each of Holding, Employer and
their respective Affiliates, and he shall not take with him any such property,
documents or data or any reproduction thereof, or any documents containing or
pertaining to any Confidential Information. 
Whether documents or data are “personal” or “non-personal” shall be
determined as follows:  Executive shall
present any documents or data that he wishes to take with him to the chief
legal officer of Employer for his review. 
The chief legal officer shall make an initial determination whether any
such documents or data are personal or non-personal, and with respect to such
documents or data that he determines to be non-personal, shall notify Executive
either that such documents or data must be retained by Employer or that
Employer must make and retain a copy thereof before Executive may take
such documents or data with him.  Any
disputes as to the personal or non-personal nature of any such documents or
data shall first be presented to the Chairman of Employer’s Board or to another
representative designated by Employer’s Board, and if such disputes are not
promptly resolved by Executive and the Chairman or such representative, such
disputes shall be resolved through arbitration pursuant to Section 17(b).

 

13.                                 Injunctive
Relief with Respect to Covenants; Forum, Venue and Jurisdiction.  Executive acknowledges and agrees that the
covenants, obligations and agreements of Executive contained in
Sections 8, 9, 10, 11, 12 and 13 relate to special, unique and
extraordinary matters and that a violation of any of the terms of such
covenants, obligations or agreements will cause Employer irreparable injury for
which adequate remedies are not available at law.  Therefore, Executive agrees that Employer shall be entitled to an
injunction, restraining order or such other equitable relief (without the
requirement to post bond) as a court of competent jurisdiction may deem
necessary or appropriate to restrain Executive from committing any violation of
such covenants, obligations or agreements. 
These injunctive remedies are cumulative and in addition to any other
rights and remedies Employer may have. 
Employer, Holding and Executive hereby irrevocably submit to the
exclusive jurisdiction of the courts of

 

9

 

the State of New York and the Federal courts of the United States
of America, in each case located in New York City, in respect of the
injunctive remedies set forth in this Section 13 and the interpretation
and enforcement of Sections 8, 9, 10, 11, 12 and 13 insofar as such
interpretation and enforcement relate to any request or application for
injunctive relief in accordance with the provisions of this Section 13,
and the parties hereto hereby irrevocably agree that (a) the sole
and exclusive appropriate venue for any suit or proceeding relating solely to
such injunctive relief shall be in such a court, (b) all
claims with respect to any request or application for such injunctive relief
shall be heard and determined exclusively in such a court, (c) any
such court shall have exclusive jurisdiction over the person of such parties
and over the subject matter of any dispute relating to any request or
application for such injunctive relief, and (d) each hereby waives
any and all objections and defenses based on forum, venue or personal or
subject matter jurisdiction as they may relate to an application for such
injunctive relief in a suit or proceeding brought before such a court
in accordance with the provisions of this Section 13.  All disputes not relating to any request or
application for injunctive relief in accordance with this Section 13 shall
be resolved by arbitration in accordance with Section 17(b).

 

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

 

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

 

16.                                 Indemnification.  Employer hereby agrees that it shall
indemnify and hold harmless Executive to the fullest extent permitted by
Delaware law from and against any and all liabilities, costs, claims and
expenses, including all costs and expenses incurred in defense of litigation
(including attorneys’ fees), arising out of the employment of Executive
hereunder, except to the extent arising out of or

 

10

 

based upon the gross negligence or willful misconduct of
Executive.  Costs and expenses incurred
by Executive in defense of such litigation (including attorneys’ fees) shall be
paid by Employer in advance of the final disposition of such litigation upon
receipt by Employer of (a) a written request for payment, (b) appropriate
documentation evidencing the incurrence, amount and nature of the costs and
expenses for which payment is being sought, and (c) an undertaking
adequate under Delaware law made by or on behalf of Executive to repay the
amounts so paid if it shall ultimately be determined that Executive is not
entitled to be indemnified by Employer under this Agreement, including but not
limited to as a result of such exception.

 

17.                                 Miscellaneous.

 

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

 

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

 

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

 

11

 

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

 

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

 

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

 

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

 

(A)                If to Employer, to
it at:

 

Riverwood International
Corporation

3350 Riverwood Parkway,
S.E.

Suite 1400

Atlanta, Georgia 30339

Attention:  General Counsel

 

12

 

(B)        
if to Holding, to it at:

 

c/o Riverwood
International Corporation

3350 Riverwood Parkway,
S.E.

Suite 1400

Atlanta, Georgia 30339

Attention:  General Counsel

 

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

 

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

 

Clayton, Dubilier &
Rice, Inc.

375 Park Avenue

New York, New York 10152

Attention:  Mr. Kevin J. Conway

 

and

 

Debevoise & Plimpton

919 Third Avenue

New York, New York 10022

Attention:  Franci J. Blassberg, Esq.

 

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

 

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

 

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

 

13

 

(k)                                  Certain
Definitions.

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

	
   

  	
  RIVERWOOD INTERNATIONAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Stephen M. Humphrey

  
	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  RIVERWOOD HOLDING, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Stephen M. Humphrey

  
	
   

  	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Executive:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Robert W.
  Spiller

  

 

15

 

Schedule I

 

Perquisites

 

1.                                       Annual
executive physical.

 

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

 

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

 

4.                                       Subject
to the advance approval of the CEO, reimbursement for initiation fees (“grossed
up” for federal and state income taxes) and dues for one country club after one
year in position and one luncheon club.

 

16

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