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EXHIBIT 10.13
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of July 14, 1997 by and among Riverwood
International Corporation, a Delaware corporation ("Employer"), Riverwood
Holding, Inc., a Delaware corporation ("Holding") and Xxxxxx X. Xxxxxx
("Executive").
W I T N E S S E T H :
WHEREAS, Employer desires to employ Executive and Executive desires to
become an Executive of Employer;
WHEREAS, Employer and Executive desire to set forth the terms and
provisions of the such employment (the "Agreement").
NOW, THEREFORE, in consideration of the promises and mutual covenants
contained herein and for other good and valuable consideration, Employer 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 July 14, 1997 (the "Effective Time") and ending on July
13, 2000 (the "Initial Term"). Effective upon the expiration of the Initial
Term, Executive's employment hereunder shall be deemed to be automatically
extended, upon the same terms and conditions, for additional periods 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 any Additional Term, shall give written notice (a "Nonrenewal
Notice") to Executive of its intention not to renew such employment. 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 will serve as Senior Vice President and Chief Financial
Officer of Employer with such duties and responsibilities as are customarily
assigned to individuals serving in such position, and such other duties
consistent with Executive's position as the Board of Directors of Employer
("Employer's Board") specifies from time to time. Executive will devote all of
his skills, knowledge and working time (except for (i) vacation time as set
forth in Section 6(c) hereof 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 and
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the fulfillment of civic responsibilities and (B) reasonable time as may be
necessary from time to time for personal financial matters to the conscientious
performance of the duties of such position or positions.
3. Base Salary. As compensation for the services to be performed
by Executive during the Employment Period, Employer will pay Executive an
annual base salary of $265,000.00 and, in the event that 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 will review Executive's
Base Salary annually during the period of his employment hereunder and, in the
discretion of 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 maintained
or established by Employer. Employer shall pay Executive the Base Salary in
semi-monthly installments, or in such other installments as may be mutually
agreed upon by Employer and Executive.
4. Incentive Compensation Arrangements.
(a) Incentive Compensation. During the Employment
Period, Executive shall participate in Employer's incentive compensation
programs for its executive officers existing from time to time, at a level
commensurate with his position and duties with Employer, which programs shall
provide an annual target bonus of 100% of Base Salary, based on such
performance targets as may be established from time to time by Employer's Board
or a committee thereof. For calendar year 1997 the incentive compensation shall
not be less than $100,000 and shall be paid during the first quarter of 1998.
If Employer's actual financial performance for 1997 results in a calculation of
a higher award than the minimum guaranteed for 1997, Executive will be paid the
greater reward.
For the 1998 incentive year and thereafter, Executive's annual
incentive compensation opportunity will be contingent upon whether Executive
elects to make a meaningful investment in Holding Common Stock as defined in
Section 4(c), generally defined as 50% or more of the maximum equity
participation offered in Section 4(c). If Executive participates at a
meaningful investment level, Executive's annual incentive compensation
opportunity will remain at 100% of Executive's Base Salary. If Executive elects
not to invest or if the investment is less than meaningful, Executive's annual
incentive compensation opportunity shall change to 60% prospectively from the
date the opportunity to purchase shares is offered pursuant to Section 4(c).
Notwithstanding the aforesaid until Executive is offered the opportunity to
purchase shares under Section 4(c), Executive's annual target award will remain
at 100% of Executive's Base Salary.
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(b) Special Incentive Plan. Executive will participate
in a special EBITDA improvement plan. The award opportunity will range from $0
to $250,000 with payment depending upon Executive's achieving certain financial
and non-financial improvement objectives mutually agreed between Executive and
Employer and approved by the Compensation and Benefits Committee of the
Employer's Board of Directors during the first 90 days after Executive's
initial Employment Date. Specific Corporate performance improvement criteria
may include, but not be limited to: EBITDA achievement, cost reduction, cash
generation, business process simplification, SAP implementation, and people and
organizational development. The Performance period will be the 1998 and 1999
business years. One half of the Special Incentive Plan will be based upon
EBITDA achievement and will be paid during the first quarters of the years 1999
and 2000. The second half of the Special Incentive Plan for non-financial
objectives shall be determined, calculated and awarded upon completion and
review with the Compensation and Benefits Committee. If there is a change of
control prior to the dates on which the Special Incentive Plan award could be
earned, and if executive is on the payroll immediately preceding the change of
control, then the Special Incentive Plan award shall be paid by employer and
such payment shall be guaranteed by Holding. The amount to be paid shall assume
all targets were achieved.
(c) Opportunity to Purchase Shares. (i) Executive shall
be granted non-qualified stock options to purchase up to an aggregate of 30,000
shares of Class A Common Stock of Holding, par value $.01 per share (the
"Common Stock"). There shall be granted 7,500 Special Options, up to 15,000
Service Options and up to 7,500 Performance Options. The terms and conditions
of Executive's purchase of any Shares, including the right of first refusal of
Holding with respect to such Shares and the right of Holding and certain of its
affiliates to re-purchase such Shares from Executive under certain
circumstances, shall be set forth in the Riverwood Holding, Inc. Stock
Incentive Plan (the "Stock Incentive Plan"), a separate Management Stock
Subscription Agreement, substantially in the form attached hereto as Exhibit A,
to be entered into between Holding and Executive (the "Subscription Agreement")
and the Registration and Participation Agreement referred to herein.
Notwithstanding any other provision herein, no provision hereof shall be deemed
to constitute an offer to sell any Common Stock or any interest therein within
the meaning of the Securities Act of 1933, as amended, or any state securities
laws. The per share exercise price for the Common Stock covered by the Special
Options, Services Options and Performance Options shall be:
Maximum Maximum Maximum Per Share
Number of Shares Number of Shares Number of Shares Exercise Price
Covered by Covered by Covered by
Special options Service options Performance options
7,500 15,000 7,500 $100
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(c) Service and Performance Options. (ii) Upon the purchase of
the Shares pursuant to Section 4(c)(i), Executive shall be granted
non-qualified stock options to purchase additional shares of the Common Stock
at an exercise price per share equal to $100, each such option to be granted
pursuant to the terms of the Stock Incentive Plan and to have a ten year term,
as follows: (i) Executive shall be granted options (the "Service Options") to
purchase up to 15,000 shares of Common Stock (or, if less, a number of shares
of Common Stock equal to the product of (x) the number of Shares purchased by
Executive pursuant to Section 4(c)(i), multiplied by (y) two) and (ii)
Executive shall be granted options (the "Performance Options"), and together
with the Service Options, the ("Options") to purchase up to 7,500 additional
shares of Common Stock (or, if less, one-half of the number of shares of Common
Stock covered by the Service Options granted to Executive pursuant to this
Section 4(c)(ii). The Service Options granted hereby shall vest and become
exercisable (A) as to 40% of the Shares subject thereto on the first
anniversary of the Grant Date and (B) as to 20% of the Shares subject thereto
on each of the second, third and fourth anniversaries of the Grant Date,
respectively and the Performance Options shall generally become vested, in
full, on the earlier of (A) the date the Company achieves the Cumulative EBITDA
target provided for under the terms of the Option Agreement (as defined below)
and (B) nine years and six months following the date of grant, subject, in each
such case, to Executive's continuous employment through the applicable vesting
date. The terms and conditions of the Options (including those described
herein) shall be set forth in the Stock Incentive Plan and a separate
Management Stock Options Agreement, substantially in the form attached hereto
as Exhibit B, to be entered into by Executive and Holding (the "Option
Agreement"). The Board of Directors of the Company as of the date hereof has
not made a final determination defining the Cumulative EBITDA Target but once
established for all other equity participants, it shall be used to determined
the vesting of Performance Options.
5. Executive Benefits. During the Employment Period, employee
benefits, including life, medical, dental, accidental death and dismemberment,
business travel accident, prescription drug and disability insurance, will be
provided to Executive in accordance with the programs of Employer then
available to senior executive employees, 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 the Company hereunder and that is no less
favorable than that of similarly situated senior executives of Employer.
6. Perquisites and Expenses.
(a) General. During the Employment Period, Executive
shall be entitled to participate in all special benefit or perquisite programs
generally available from time to time to senior executive officers of Employer,
on the terms and conditions then prevailing under each such program. Without
duplicating the foregoing, during the twelve-month period immediately following
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the commencement of the Initial Term, 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 senior executives
as in effect from time to time.
(c) Vacation. Executive shall be entitled to not less
than four (4) weeks vacation, without carryover accumulation.
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 the performance by Executive of his
duties hereunder lasting for a continuous period of six months or longer. The
determination of Executive's Disability shall be made by an independent
physician who is reasonably acceptable to Employer and Executive and shall be
final and binding and shall be based on such competent medical evidence as
shall be presented to it by Executive 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" by Employer; provided, however, that Executive and/or
his representative shall be permitted to attend a meeting of Employer's Board
within thirty days after delivery to him of a Notice of Termination 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 physical or mental illness) or other willful and material breach
by Executive of any of his obligations hereunder or under any other material
agreements entered into by and between Employer and Executive, after a demand
for substantial performance is delivered (specifying in reasonable detail the
failure to perform or breach) is delivered to Executive, and upon the
recommendation of the CEO, a reasonable opportunity to cure is given to
Executive, (ii) Executive's engaging in willful and serious misconduct that has
caused or would reasonably be expected to result in material injury to Employer
or any of its affiliates, or (iii) Executive's conviction of, or entering a
plea of nolo contendere to, a crime that constitutes a felony.
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(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 defined 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 of employment by Executive within 30
days following the occurrence of any of the following events without
Executive's consent: (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 at the Effective Time. This Section 7(d)(i) shall
not apply where the Executive is assigned to another position under the same
compensation terms and conditions, (ii) the failure of Employer to obtain the
assumption of this Agreement by any successor as contemplated by Section 14,
(iii) a reduction of Executive's Base Salary, (iv) the assignment of Executive
to a principal office located beyond a 50-mile radius of Executive's current
work place, (v) a material breach by Employer of any of its obligations
hereunder or by the company under the Subscription Agreement or the Option
Agreement or (vi) delivery to executive of a Nonrenewal Notice, provided in the
case of any of clauses (i), (iii) or (v), Executive has delivered written
notice of his intention to terminate his employment for "Good Reason",
specifying the provisions hereof on which Executive will rely, and Employer or
Holding, as the case may be, shall have had a reasonable opportunity to cure.
(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 hereunder 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 beneficiary) the
total of: (A) his Base Salary for the period (the "Severance Period") beginning
on the Date of Termination and ending on the last to occur of (x) the last day
of the Initial Term or, if applicable, the then current Additional Term, or (y)
the first anniversary of the Date of Termination or (z) the expiration of a
number of months equal to the number of completed years of service with the
Company and its predecessors completed by Executive as of his Date of
Termination and (B) if, as of the Date of Termination, the Company has achieved
the performance objectives established under the Company's annual incentive
compensation plan for the calendar year that includes the Date of Termination,
pro rated on the basis of the fraction described in the immediately following
clause (B)(2) hereof, an amount, payable in one lump sum as soon as reasonably
practicable following receipt by Employer of Employer's or Holding's financial
statements for such calendar year (accompanied by an audit report of its
accountants) through the Date of Termination, equal to the product of (1) the
amount of incentive compensation that would have been payable to Executive for
such calendar year under the annual incentive compensation plan had he remained
employed for the
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entire calendar year, 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) any amount paid or payable to Executive under the
terms of any severance plan or program of Holding, Employer or any of their
respective subsidiaries 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 clause (A) 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 or program identified under clause (C) above. If Executive's employment
shall terminate and he is entitled to receive salary continuation payments
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 offered to Executive during the Severance Period by a
subsequent employer. Any benefits payable to Executive under any otherwise
applicable plans, policies and practices of Employer shall not be limited by
this provision.
(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, the pro rata amount of incentive compensation
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) that would have been payable to Executive if he
had remained employed for the entire calendar year and assuming that all
applicable performance targets had been achieved, 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 hereof. Any benefits payable to or in respect of Executive under
any otherwise applicable plans, policies and practices of Employer shall not be
limited by this provision.
(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 or, if later, the date of termination specified in such Notice, as
contemplated by Section 7(e), and (iii) if Executive's employment is terminated
by Employer Without Cause, due to Executive's Disability or by Executive for
any reason, 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.
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(h) Resignation from Board Memberships. 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 then held by him on the Boards of Holding,
Employer or any of their respective subsidiaries.
8. Unauthorized Disclosure. 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 competent jurisdiction or under subpoena
from an appropriate government agency, in which event, Executive will 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, or as may be required to defend himself in any arbitration,
government hearing or court proceeding, 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 data and
other information relating to members of Employer's Board, the Board of
Directors of Holding and management of Employer or Holding), operating policies
or manuals, business plans, financial records, packaging design or other
financial, commercial, business or technical information relating to Holding,
Employer or any of their respective subsidiaries or affiliates that Holding,
Employer or any of their respective subsidiaries or affiliates may receive
belonging to suppliers, customers or others who do business with Holding,
Employer or any of their respective subsidiaries or affiliates (collectively,
"Confidential Information") to any third person, other than Executive's Legal
Counsel, 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
and the one year period following any termination of Executive's employment
(such periods referred to collectively as the "Restriction Period"), Executive
shall not, directly or indirectly, engage in, become employed by, serve as an
agent or consultant to, or become a partner, principal or stockholder (other
than a holder of less than 1% of the outstanding voting shares of any publicly
held company) of The Xxxx Corporation, any of its subsidiaries or any other
current or future direct competitor (or any of such direct competitor's
subsidiaries or affiliates) of Holding, Employer or any of their respective
subsidiaries, as determined in good faith by Employer's Board.
10. Non-Solicitation of Executives. During the Restriction
Period, Executive shall not, directly or indirectly, for his own account or for
the account of any other person or entity with which he is or shall become
associated in any capacity, (a) 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 (b) induce any Executive of Holding, Employer or any of their
respective subsidiaries who is a member
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of management to engage in any activity which Executive is prohibited from
engaging in under any of Sections 8, 9, 10 or 11 hereof or to terminate his
employment with Employer.
11. Non-Solicitation of Customers. During the Restriction Period,
Executive shall not, directly or indirectly, solicit or otherwise attempt to
establish for himself or any other person, firm or entity any business
relationship of a nature that is competitive with the business or relationship
of Holding, Employer or any of their respective subsidiaries with any person,
firm or corporation which during the twelve-month period preceding the date his
employment with Holding, Employer and their respective subsidiaries terminates
was a customer, client or distributor of Holding, Employer or any of their
respective subsidiaries, other than any such solicitation during Executive's
employment with Holding or Employer on behalf of Holding or Employer.
12. Return of Documents. In the event of the termination of
Executive's employment for any reason, Executive will deliver to Employer all
of Holding's, Employer's or any of their respective subsidiaries' property and
Holding's, Employer's or any of their respective subsidiaries' non-personal
documents and data of any nature and in whatever medium pertaining to
Executive's employment with Holding, Employer or any of their respective
subsidiaries, and he will not take with him any such property, documents or
data of any description or any reproduction thereof, or any documents
containing or pertaining to any Confidential Information. Executive shall have
access to returned documents should Executive require their use for purposes of
litigation or arbitration.
13. Injunctive Relief with Respect to Covenants. Executive
acknowledges and agrees that the covenants and obligations of Executive with
respect to noncompetition, nonsolicitation, confidentiality and Employer
property relate to special, unique and extraordinary matters and that a
violation of any of the terms of such covenants and obligations 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
the covenants and obligations referred to in this Section 13. These injunctive
remedies are cumulative and in addition to any other rights and remedies
Employer may have at law or in equity. If Employer does not prevail in
obtaining any such injunctive relief, Employer shall reimburse the Executive
for any legal expenses incurred by him in defending the imposition of such
injunctive relief.
14. Assumption of Agreement. Employer will require any successor
(by purchase, merger, consolidation or otherwise) to all or substantially all
of the business and/or assets of Employer, 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 terminated his employment
Without Cause as contemplated by Section 7, except that for purposes of
implementing
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the foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination.
15. Entire Agreement. Except as otherwise expressly provided
herein, this Agreement (including the Exhibits hereto) constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof,
and all promises, representations, understandings, arrangements and prior
agreements relating to such subject matter (including, without limitation,
those made to or with Executive by any other person or entity and the Prior
Agreement) are merged herein and superseded hereby.
16. Indemnification. Employer 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
without limitation all costs and expenses incurred in defense of litigation,
including attorneys' fees, arising out of being an Employee and/or Officer of
Employer hereunder, except to the extent arising out of or based upon the gross
negligence or willful misconduct of Executive. Costs and expenses incurred by
Executive in defense of litigation, including attorneys' fees, shall be paid by
Employer in advance of the final disposition of such litigation upon receipt of
an undertaking by or on behalf of Executive to repay such amount if it shall
ultimately be determined that Executive is not entitled to be indemnified by
Employer under this Agreement.
17. Miscellaneous.
(a) Binding Effect. This Agreement shall be binding on
and inure to the benefit of Employer and its 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.
(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 Voluntary Labor
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 each of the parties and the third appointed by
the other two arbitrators. All expenses or 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 the Employer.
(c) Governing Law. This Agreement shall be governed by
and constructed in accordance with the laws of the State of New York without
reference to principles of conflict of laws.
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(d) Taxes. Employer may withhold from any payments made
under the Agreement all federal, state or other applicable 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 effecting the rights or obligations of Holding, is approved by the
Board of Directors of Holding or such officer of Holding as may be specifically
designated for such purpose by such Board of Directors. 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 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 or Holding, to it as:
Riverwood International Corporation
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
(B) if to Executive, to him at the address listed
on the signature page hereof.
Copies of any notices or other communications given under this Agreement shall
also be given to:
Xxxxxxx, Dubilier & Rice, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx X. Xxxxxx
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and
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
(h) Survival. Sections 8, 9, 10, 11, 12, 13, 14, 15, 16,
17, and, if Executive's employment terminates in a manner giving rise to a
payment under Section 7(f), Section 7(f) shall survive the termination of the
employment of Executive hereunder.
(i) 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 of
such party of any agreement to which it is a party or by which it may be bound.
(j) 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.
(k) 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.
(l) Authorization. Employer warrants that Xxxxxxx X.
Xxxxxxxx, President and Chief Executive Officer, is authorized to enter into
this Employment Agreement.
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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 HOLDING, INC. RIVERWOOD INTERNATIONAL
CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------- -------------------------------------
Xxxxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer President and Chief Executive Officer
Executive:
/s/ Xxxxxx X. Xxxxxx
------------------------------------------
Xxxxxx X. Xxxxxx
Riverwood International Corporation
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
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