Exhibit 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is entered
into as of this 30 th day of November, 2005 by and among
Graphic Packaging International, Inc., a Delaware corporation
(“Employer”), Graphic Packaging Corporation, a Delaware
corporation (“GPC”) and Daniel J. Blount
(“Executive”).
W I T N E S S E T H :
WHEREAS, Employer desires to employ
Executive as its Senior Vice President and Chief Financial Officer
on the terms and conditions set forth herein;
WHEREAS, Executive desires to accept
such employment on the terms and conditions set forth
herein;
WHEREAS, each of Employer, GPC 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, GPC 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 first
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 and Chief Financial
Officer of Employer and have such duties and responsibilities as
are customarily assigned to individuals serving in such position
and such other duties consistent with Executive’s title and
position as the Board of Directors of Employer
(“Employer’s Board”) specifies from time to
time. Executive shall report to the Company’s President
and Chief Executive Officer. Executive shall devote all of
his skill, knowledge and working time (except for ( i
) vacation time as set forth in Section 6(c) and
absence for sickness or similar disability and ( ii
) to the extent that it does not interfere with the
performance of Executive’s duties hereunder, ( A
) such reasonable time as may be devoted to service on boards
of directors of other corporations and entities, subject to the
provisions of Section 9, and the fulfillment of civic
responsibilities and ( B ) such reasonable time as may
be necessary from time to time for personal financial matters) to
the conscientious performance of the duties and responsibilities of
such position. If so elected or designated by the respective
shareholders thereof, Executive shall serve as a member of the
Boards of Directors of GPC, 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 $325,000, 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 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.
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4. Incentive Compensation
Arrangements .
(a) Incentive
Compensation . During the Employment Period, Executive
shall participate in Employer’s incentive compensation
programs for its senior executives existing from time to time, at
a level commensurate with his position and duties with
Employer and based on such performance targets as may be
established from time to time by Employer’s Board or
a committee thereof. For calendar year 2006,
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.
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
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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 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 GPC 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
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employment for Good Reason, and Employer or GPC,
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 first anniversary of the Date of
Termination and
( B ) the product of
(1) the amount of incentive compensation that would have been
payable to Executive for the calendar year in which the Date of
Termination occurs if Executive had remained employed for the
entire calendar year and assuming that all applicable performance
targets had been achieved, multiplied by (2) a fraction,
the numerator of which is equal to the number of days in such
calendar year that precede the Date of Termination and the
denominator of which is equal to 365 (such product, the
“Pro Rata Bonus”), less
( C ) the amount, if
any, paid or payable to Executive under the terms of any severance
plan, policy, program or practice of GPC, 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, 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
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