EXHIBIT 10.20
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT is entered into as of this 1st day of May,
2001 by and among Riverwood International Corporation, a Delaware corporation
("Employer"), Riverwood Holding, Inc., a Delaware corporation ("Holding") and
Xxxxx X. Xxxx ("Executive").
W I T N E S S E T H :
WHEREAS, Employer desires to employ Executive as its Senior Vice
President, Human Resources 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
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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, Human Resources of
Employer and have such duties and responsibilities as are customarily assigned
to individuals serving in such position and such other duties consistent with
Executive's title and position as the Board of Directors of Employer
("Employer's Board") specifies from time to time. Executive shall report to the
Company's President and Chief Executive Officer. Executive shall devote all of
his skill, knowledge and working time (except for (i) vacation time as set forth
in Section 6(c) and absence for sickness or similar disability and (ii) to the
extent that it does not interfere with the performance of Executive's duties
hereunder, (A) such reasonable time as may be devoted to service on boards of
directors of other corporations and entities, subject to the provisions of
Section 9, and the fulfillment of civic responsibilities and (B) such reasonable
time as may be necessary from time to time for personal financial matters) to
the conscientious performance of the duties and responsibilities of such
position. If so elected or designated by the respective shareholders thereof,
Executive shall serve as a member of the Boards of Directors of Holding,
Employer and their respective Affiliates during the Employment Period without
additional compensation.
3. Base Salary. As compensation for the services to be performed
by Executive during the Employment Period, Employer shall pay Executive a base
salary at an annualized rate of $225,000, payable in installments on Employer's
regular payroll dates, and, in the event that Executive's employment hereunder
is terminated by death, for the 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 2001, Executive's aggregate annual target bonus opportunity shall be 100% 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
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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 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
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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
(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
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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.
(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
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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 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 Xxxx 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, Human
Resources 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
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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 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 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
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the Chairman of Employer's Board or to another representative designated by
Employer's Board, and if such disputes are not promptly resolved by Executive
and the Chairman or such representative, such disputes shall be resolved through
arbitration pursuant to Section 17(b).
13. Injunctive Relief with Respect to Covenants; Forum, Venue and
Jurisdiction. Executive acknowledges and agrees that the covenants, obligations
and agreements of Executive contained in Sections 8, 9, 10, 11, 12 and 13 relate
to special, unique and extraordinary matters and that a violation of any of the
terms of such covenants, obligations or agreements will cause Employer
irreparable injury for which adequate remedies are not available at law.
Therefore, Executive agrees that Employer shall be entitled to an injunction,
restraining order or such other equitable relief (without the requirement to
post bond) as a court of competent jurisdiction may deem necessary or
appropriate to restrain Executive from committing any violation of such
covenants, obligations or agreements. These injunctive remedies are cumulative
and in addition to any other rights and remedies Employer may have. Employer,
Holding and Executive hereby irrevocably submit to the exclusive jurisdiction of
the courts of the State of New York and the Federal courts of the United States
of America, in each case located in New York City, in respect of the injunctive
remedies set forth in this Section 13 and the interpretation and enforcement of
Sections 8, 9, 10, 11, 12 and 13 insofar as such interpretation and enforcement
relate to any request or application for injunctive relief in accordance with
the provisions of this Section 13, and the parties hereto hereby irrevocably
agree that (a) the sole and exclusive appropriate venue for any suit or
proceeding relating solely to such injunctive relief shall be in such a court,
(b) all claims with respect to any request or application for such injunctive
relief shall be heard and determined exclusively in such a court, (c) any such
court shall have exclusive jurisdiction over the person of such parties and over
the subject matter of any dispute relating to any request or application for
such injunctive relief, and (d) each hereby waives any and all objections and
defenses based on forum, venue or personal or subject matter jurisdiction as
they may relate to an application for such injunctive relief in a suit or
proceeding brought before such a court in accordance with the provisions of this
Section 13. All disputes not relating to any request or application for
injunctive relief in accordance with this Section 13 shall be resolved by
arbitration in accordance with Section 17(b).
14. Assumption of Agreement. Employer shall require any Successor
thereto, by agreement in form and substance reasonably satisfactory to
Executive, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that Employer would be required to perform it if
no such succession had taken place. Failure of Employer to obtain such agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle Executive to 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.
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15. Entire Agreement. This Agreement (including the Exhibit
hereto) constitutes the entire agreement among the parties hereto with respect
to the subject matter hereof. All prior correspondence and proposals (including
but not limited to summaries of proposed terms) and all prior promises,
representations, understandings, arrangements and agreements relating to such
subject matter (including but not limited to those made to or with Executive by
any other Person and those contained in any prior employment, consulting or
similar agreement entered into by Executive and Employer or any predecessor
thereto or Affiliate thereof) are merged herein and superseded hereby.
16. Indemnification. Employer hereby agrees that it shall
indemnify and hold harmless Executive to the fullest extent permitted by
Delaware law from and against any and all liabilities, costs, claims and
expenses, including all costs and expenses incurred in defense of litigation
(including attorneys' fees), arising out of the employment of Executive
hereunder, except to the extent arising out of or based upon the gross
negligence or willful misconduct of Executive. Costs and expenses incurred by
Executive in defense of such litigation (including attorneys' fees) shall be
paid by Employer in advance of the final disposition of such litigation upon
receipt by Employer of (a) a written request for payment, (b) appropriate
documentation evidencing the incurrence, amount and nature of the costs and
expenses for which payment is being sought, and (c) an undertaking adequate
under Delaware law made by or on behalf of Executive to repay the amounts so
paid if it shall ultimately be determined that Executive is not entitled to be
indemnified by Employer under this Agreement, including but not limited to as a
result of such exception.
17. Miscellaneous.
(a) Binding Effect; Assignment. This Agreement shall be binding on
and inure to the benefit of Employer, Holding and their respective successors
and permitted assigns. This Agreement shall also be binding on and inure to the
benefit of Executive and his heirs, executors, administrators and legal
representatives. This Agreement shall not be assignable by any party hereto
without the prior written consent of the other parties hereto, except as
provided pursuant to this Section 17(a). Each of Holding and Employer may effect
such an assignment without prior written approval of Executive upon the transfer
of all or substantially all of its business and/or assets (by whatever 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
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appointed by the other two arbitrators. All expenses of arbitration shall be
borne by the party who incurs the expense, or, in the case of joint expenses, by
both parties in equal portions, except that, in the event Executive prevails on
the principal issues of such dispute or controversy, all such expenses shall be
borne by Employer.
(c) Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York without
reference to principles of conflicts of laws, provided that the indemnification
provisions contained in Section 16 shall be governed by and construed in
accordance with the laws of the State of Delaware.
(d) Taxes. Employer may withhold from any payments made
under this Agreement all applicable taxes, including but not limited to income,
employment and social insurance taxes, as shall be required by law.
(e) Amendments. No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge is
approved by Employer's Board or a Person authorized thereby and is agreed to in
writing by Executive and, in the case of any such modification, waiver or
discharge affecting the rights or obligations of Holding, is approved by the
Board of Directors of Holding or a Person authorized thereby. No waiver by any
party hereto at any time of any breach by any other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No waiver of any
provision of this Agreement shall be implied from any course of dealing between
or among the parties hereto or from any failure by any party hereto to assert
its rights hereunder on any occasion or series of occasions.
(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
0000 Xxxxxxxxx Xxxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: General Counsel
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(B) if to Holding, to it at:
c/o Riverwood International Corporation
0000 Xxxxxxxxx Xxxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
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:
Xxxxxxx, Dubilier & Rice, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx X. Xxxxxx
and
Debevoise & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxx, Esq.
(h) Voluntary Agreement; No Conflicts. Executive,
Employer and Holding each represent that they are entering into this Agreement
voluntarily and that Executive's employment hereunder and each party's
compliance with the terms and conditions of this Agreement will not conflict
with or result in the breach by such party of any agreement to which he or it is
a party or by which he or it or his or its properties or assets may be bound.
(i) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
(j) Headings. The section and other headings contained in
this Agreement are for the convenience of the parties only and are not intended
to be a part hereof or to affect the meaning or interpretation hereof.
(k) Certain Definitions.
"Affiliate": with respect to any Person, means any other
Person that, directly or indirectly through one or more intermediaries,
Controls, is Controlled by, or is under common Control with the first Person,
including but not limited to a Subsidiary of the first Person, a Person of which
the first Person is a Subsidiary, or another Subsidiary of a Person of which the
first Person is also a Subsidiary.
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"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.
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:
----------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
RIVERWOOD HOLDING, INC.
By:
----------------------------------------
Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
Executive:
------------------------------------------
Xxxxx X. Xxxx
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