SECURITIES AND EXCHANGE COMMISSION
o
Exchange Act of 1934 (Amendment No. )xþ
Filed by a Party other than the Registranto oPreliminary Proxy Statemento oConfidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)14a-6(e)(2))þ xDefinitive Proxy Statemento Definitive Additional Materials o Soliciting Material under Rule 14a-12Pursuant to §240.14a-12þ xNo fee required. o oFee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. (1) (1)Title of each class of securities to which transaction applies: (2) Aggregate number of securities to which transaction applies: (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): (4) Proposed maximum aggregate value of transaction: (5) Total fee paid: o Fee paid previously with preliminary materials. o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) (1)Amount Previously Paid: (2) Form, Schedule or Registration Statement No.: (3) Filing Party: (4) Date Filed: 
7, 200620062007 Annual Meeting of Stockholders, to be held at the Wyndham ViningsRenaissance Waverly Hotel, 2857 Paces Ferry Road,2450 Galleria Parkway, Atlanta, Georgia 30339, on Tuesday, May 16, 2006,15, 2007, at 10:00 a.m. local time.gives certainprovides compensation and other information about the management and Board of Directors of Graphic Packaging Corporation.
Jeffrey H. CoorsExecutive Chairman of the Board
of
Annual Meeting of Stockholders
of
Graphic Packaging CorporationDateDate: May 16, 200615, 2007 Time: 10:00 a.m. local time Place: Wyndham ViningsRenaissance Waverly Hotel 2857 Paces Ferry Road
2450 Galleria Parkway
Atlanta, Georgia 30339 • To elect three Class IIII Directors to serve a three-year term and until the 20092010 Annual Meeting of Stockholders; and • To transact any other business that may be properly brought before the Annual Meeting. 20, 200619, 2007 are entitled to notice of and to vote at the Annual Meeting of Stockholders and at any adjournment thereof.
Senior Vice President, General
Counsel and Secretary7, 200617, 2007
1 3 3 7 11 11 1017 142422 26 29 30 31 3332 3332 34 3534 36
for the
Annual Meeting of Stockholders
May 15, 2007May 16, 200620062007 Annual Meeting of Stockholders to be held at the Wyndham ViningsRenaissance Waverly Hotel, located at 2857 Paces Ferry Road,2450 Galleria Parkway, Atlanta, Georgia 30339, on Tuesday, May 16, 2006,15, 2007, at 10:00 a.m. local time (the “Annual Meeting”). This Proxy Statement and the enclosed proxy card will first be sent on or about April 11, 200617, 2007 to the Company’s stockholders of record as of the close of business on March 20, 200619, 2007 (the “Record Date”). References in this Proxy Statement to “Graphic Packaging,” “we,” “us,” and “our” or similar terms are to Graphic Packaging Corporation.198,698,698200,625,243 shares of the Company’s common stock outstanding and entitled to vote. Stockholders are entitled to one vote for each share held on all matters to come before the Annual Meeting.cardscard provided by their bank or brokerage firm. Please check the voting instruction card to determine Internet voting availability.cardscard provided by their bank or brokerage firm. Please check the voting instruction card to determine telephone voting availability.cardscard provided by their bank or brokerage firm and mailing them in the accompanying pre-addressed envelope.11, 2006.10, 2007. If you do not send instructions, the trustee will vote the number of shares equal to the share equivalents credited to your account in the same proportion that it votes shares for which it did receive timely instructions.11, 2006,10, 2007, by filing either a written notice of revocation or a properly completed and signed proxy card bearing a later date with the trustee. Your voting instructions will be kept confidential by the trustee.
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GRAPHIC PACKAGING INTERNATIONAL CORPORATION Jeffrey H. Coors (who serves as Executive Chairman of the Board), John D. Beckett, G. Andrea Botta, Kevin J. Conway, Jeffrey H. Coors (who serves as Vice Chairman of the Company), William R. Fields, Stephen M. Humphrey, Harold R. Logan, Jr., John R. Miller (who serves as the non-executive Chairman of the Board), David W. Scheible (who serves as President and Chief Executive Officer of the Company) and Robert W. Tieken. Mr. Stephen M. Humphrey served as a member of the Board through December 31, 2006.
3 • A Director who is an employee of the Company, or whose immediate family member serves as one of the Company’s executive officers, may not be deemed independent until three years after the end of such employment relationship. • A Director who receives, or whose immediate family member receives, more than $100,000 per year in direct compensation from the Company, other than Board and committee fees and pension or other forms of deferred compensation for prior service, may not be deemed independent until three years after he or she ceases to receive more than $100,000 per year in such compensation. Compensation received by an immediate family member for service as one of the Company’s non-executive employees will not be considered in determining independence under this test. • A Director who is affiliated with or employed by, or whose immediate family member is affiliated with or employed in a professional capacity by, the Company’s present or former internal or external auditor may not be deemed independent until three years after the end of the affiliation or the employment or auditing relationship. • A Director who is employed, or whose immediate family member is employed, as an executive officer of another company where any of the Company’s current executive officers serve on that company’s compensation committee may not be deemed independent until three years after the end of such service or the employment relationship. • A Director who is an executive officer, general partner or employee, or whose immediate family member is an executive officer or general partner, of an entity that makes payments to, or receives payments from the Company for property or services in an amount which, in any single fiscal year, exceeds the greater of $1 million or 2% of such other entity’s consolidated gross revenues, may not be deemed independent until three years after falling below that threshold. HumphreyScheible are not considered independent because they serve as executive officers of the Company and Mr. Conway is not considered independent because of his status as a principal of Clayton, Dubilier & Rice, Inc. (“CD&R”), an investment banking firm that provided certain services to the Company in connection with the Merger and manages Clayton, Dubilier & Rice Fund V Limited Partnership (the “CD&R Fund”), the holder of approximately 17% of the Company’s common stock.stock and a party to the Stockholders Agreement dated March 25, 2003 among the Company, the Coors family stockholders and certain related family trusts, the CD&R Fund and EXOR Group, S.A.
4seventhirteen meetings in 2005.2006.2005.2006.20052006 annual meeting of stockholders, except for Mr. Martin D. Walker, who retired from the Board on June 30, 2005.stockholders.20052006 and will continue to do so without any member of management being present. Mr. Miller, as thenon-executive Chairman of the Board and Chairman of the Nominating and Corporate Governance Committee, acted as presiding Director at each executive session during 2005.2006. • the integrity of the Company’s financial statements; • compliance with legal and regulatory requirements; • systems of internal accounting and financial controls; • the performance of the annual independent audit of the Company’s financial statements; • the Company’s independent auditor’s qualifications and independence; and • the performance of the internal audit function.function; and• the review and approval or ratification (if appropriate) of transactions with related parties.
5fifteennine meetings during 2005.2006. • reviewing and making recommendations as to the compensation of the President and Chief Executive Officer, the four other most highly-compensated executive officerssenior executives of the Company who report to the Chief Executive Officer and any other individualsemployee whose compensation the Compensation and Benefits Committee anticipates may become subject to Section 162(m) of the Internal Revenue Code (the “Code”);annual base salary exceeds $250,000; • approving any equity compensation awards to those of the Company’s Directors who are employees and to other individuals who are “officers” for purposes of Section 16 of the Exchange Act; and • administering the Company’s short- and long-term incentive plans. BeckettFields serving as Chairman. All of these directors are “independent directors,” as defined by Section 303A of the NYSE’s Listed Company Manual.2005.2006.Beckett, Botta, Conway, Coors, Fields, Miller and Tieken, with Mr. Miller serving as Chairman. Messrs. Beckett, Botta, Fields, Miller and Tieken are each “independent directors,” as defined by Section 303A of the NYSE’s Listed Company Manual. As discussed above, Messrs. Conway and Coors are not “independent directors.”seventwo meetings during 2005.2006.
6CEOevaluation of the Chief Executive Officer’s performance and senior management succession planning, and Board committees and compensation. You may find a copy of the Corporate Governance Guidelines on the Company’s website at www.graphicpkg.com in the Investor Relations section under Corporate Governance.Directors.directors. A copy of the Code of Business Conduct and Ethics is available on the Company’s website at www.graphicpkg.com in the Investor Relations section under Corporate Governance.IIII Directors are: G. Andrea Botta, William R. FieldsKevin J. Conway, Jeffrey H. Coors and Harold R. Logan, Jr.Robert W. Tieken.IIII nominee will serve three consecutive years with his term expiring in 2009,2010, and until a successor is elected and qualified. The election of each nominee requires the affirmative vote of the holders of the plurality of the shares of the Company’s common stock cast in the election of Directors. If at the time of the Annual Meeting any of these nominees is unable or unwilling to serve as a Director for any reason, which is not expected to occur, the persons named as proxies will vote for such substitute nominee or nominees, if any, as shall be designated by the Board. See “Certain Relationships and Related Transactions — Stockholders Agreement” for information regarding rights that certain stockholders have to designate nominees for director and the obligations of certain stockholders to vote for certain nominees.
7IIII Nominees for Election as Directors — Term to Expire in 20092010G. Andrea BottaKevin J. Conway, 52, has been a member of the Company’s Board and a member of the Boards of Directors of the Company’s subsidiaries GPI Holding, Inc. and Graphic Packaging International, Inc. since 1996. Mr. Botta is the President of Glenco LLC, a private investment company. From 1999 to January 2006, Mr. Botta served as a managing director of Morgan Stanley. Before joining Morgan Stanley, he was president7of EXOR America, Inc. (formerly IFINT-USA, Inc.) from 1993 until September 1999 and for more than five years prior thereto, Vice President of Acquisitions of IFINT-USA, Inc.William R. Fields, 56,48, has been a member of the Company’s Board and a member of the Board of Directors of the Company’s subsidiaries GPI Holding, Inc. andsubsidiary Graphic Packaging International, Inc. since July 2005.1995. Mr. Fields is Chairman of Intersource Co., Ltd., a China-based sourcing and product development company. Prior to joining Intersource Co., Ltd. in 2005, Mr. Fields served as Chairman and Chief Executive Officer of Factory 2 U Stores for three years and as Chairman and Chief Executive Officer of APEC China Asset Management Ltd. from 1999 to 2002.Harold R. Logan, Jr., 61, has been a member of the Company’s Board and the Boards of Directors of the Company’s subsidiaries GPI Holding, Inc. and Graphic Packaging International, Inc. since the closing of the Merger in 2003. From 2001 until the closing of the Merger, Mr. Logan served as one of the directors of GPIC. Mr. LoganConway is a director and Chairmanprincipal of the Finance Committee of TransMontaigne, Inc.,CD&R, a transporter of refined petroleum products, and was a director, Executive Vice President, and Chief Financial Officer of TransMontaigne, Inc. from 1995 to 2002. Mr. Logan served as a director and Senior Vice President, Finance of Associated Natural Gas Corporation, a natural gas and crude oil company, from 1987 to 1994. He also serves asNew York-based private investment firm, a director of Suburban Propane Partners, Hart Energy Publishing, LLC, The Houston Exploration CompanyCD&R Investment Associates II, Inc. (“Associates II”), a Cayman Islands exempted company that is the managing general partner of CD&R Associates V Limited Partnership, a Cayman Islands exempted limited partnership (“Associates V”), the general partner of CD&R, and Rivington Capital Advisors LLC.Information Concerning Continuing DirectorsClass I Directors — Term to Expire in 2007a limited partner of Associates V.61, has been the Company’s Executive62, was named Vice Chairman and a member of the Company’s Board and the Boards of Directors of the Company’s subsidiaries GPI Holding, Inc.Company and Graphic Packaging International, Inc. sinceon August 8, 2006. Mr. Coors continues to serve as a member of the Board of Directors of such companies and served as Executive Chairman from the closing of the Merger in 2003.August 2003 until August 8, 2006. Mr. Coors was Chairman of GPIC from 2000 and until the closing of the Merger, and was its Chief Executive Officer and President from GPIC’s formation in 1992 and until the closing of the Merger. Mr. Coors served as Executive Vice President of the Adolph Coors Company from 1991 to 1992 and as its President from1985-1989, as well as at Coors Technology Companies as its President from 1989 to 1992.Kevin J. Conway, 47, has been a member of the Company’s Board and a member of the Boards of Directors of the Company’s subsidiaries GPI Holding, Inc. and Graphic Packaging International, Inc. since 1995. Mr. Conway is a principal of CD&R, a New York-based private investment firm, a director of CD&R Investment Associates II, Inc. (“Associates II”), a Cayman Islands exempted company that is the managing general partner of CD&R Associates V Limited Partnership, a Cayman Islands exempted limited partnership (“Associates V”), the general partner of CD&R, and a limited partner of Associates V.66,67, has been a member of the Company’s Board and the BoardsBoard of Directors of the Company’s subsidiaries GPI Holding, Inc. andsubsidiary Graphic Packaging International, Inc. since September 2003. Mr. Tieken served as the Executive Vice President and Chief Financial Officer of The Goodyear Tire & Rubber Company from May 1994 to June 2004. From 1993 until May 1994, Mr. Tieken served as Vice President-Finance for Martin Marietta Corp.Corporation. Mr. Tieken serves as a member of the Board of Directors of SIRVA, Inc. a global provider of moving and relocation services, and as its interim Chief Executive Officer. Nominees for Election as Directors — Term to Expire in 200867,68, has been a member of the Company’s Board and the BoardsBoard of Directors of the Company’s subsidiaries GPI Holding, Inc. andsubsidiary Graphic Packaging International, Inc. since the closing of the Merger in 2003. From 1993 until the closing of the Merger, Mr. Beckett served as one of the directors of GPIC. He has been Chairman of the R. W.R.W. Beckett Corporation, a manufacturer of components for oil and gas heating appliances, since 1965 and from 1965 until 2001, Mr. Beckett also served as its President.Stephen M. HumphreyJohn R. Miller, 61, has been69, was named the Company’s President and Chief Executive Officer, a membernon-executive Chairman of the Company’s Board of Directors and a member of the Boards of Directors of the Company’s subsidiaries8GPI Holding, Inc.Company and Graphic Packaging International, Inc. since 1997. From 1994 through 1996, Mr. Humphrey was Chairman, Presidenton August 8, 2006 and Chief Executive Officer of National Gypsum Company, a manufacturer and supplier of building products and services. From 1981 until 1994, Mr. Humphrey was employed by Rockwell International Corporation, a manufacturer of electronic industrial, automotive products, telecommunications systems and defense electronics products and systems, where he held a number of key executive positions.John R. Miller, 68, has been a member of the Company’s Board and a member of thesuch Boards of Directors of the Company’s subsidiaries GPI Holding, Inc. and Graphic Packaging International, Inc. since 2002. Mr. Miller is Chairman of the Board of SIRVA, Inc., a global provider of moving and relocation services. He has been a director of Cambrex Corporation, a global diversified life science company since 1998, and since 1985, a director of Eaton Corporation, a global diversified industrial manufacturer. From 2000 to 2003, Mr. Miller served as Chairman, President and Chief Executive Officer of Petroleum Partners, Inc., a provider of outsourcing services to the petroleum industry. He formerly served as President and Chief Operating Officer of The Standard Oil Company and Chairman of the Federal Reserve Bank of Cleveland.
8serveserved on the Board as a Director Emeritus. In such capacity, they have the right to attend Board meetings and to receive copies of all written materials provided to the Board, but do not have any right to vote on any matter presented to the Board.Compensation of DirectorsEach Director who is not an officer or employee of the Company receives an annual cash retainer fee of $20,000, payable in quarterly installments. In addition, each non-employee Director receives $1,500 per Board meeting attended and $1,000 per committee meeting attended. The Audit Committee chairman and each of the other Committee chairmen receive a further retainer fee of $10,000 and $5,000, respectively, payable in equal quarterly installments. In addition to the retainers and meeting fees, each non-employee Director receives an annual grant of shares of restricted stock with a value of $40,000 on the date of grant. Non-employee Directors have the option to defer all or part of the cash and equity compensation payable to them in the form of phantom stock.Directors who are officers or employees do not receive any additional compensation for serving as a Director. Pursuant to the terms of Mr. Conway’s employment with CD&R, he has assignedWilliam K. Coors resigned from his right to receive compensation for his serviceposition as a Director to CD&R. The Company reimburses all Directors for reasonable and necessary expenses they incur in performing their duties as Directors.Emeritus on March 13, 2007. • the highest personal and professional integrity, • commitment to driving the Company’s success; • an ability to provide informed and thoughtful counsel on a range of issues; and • exceptional ability and judgment.
9 Fees Earned or Paid Stock in Cash Awards Total ($) ($)(1) ($) John D. Beckett 48,875 40,000 88,875 G. Andrea Botta(2) 47,500 40,000 87,500 Kevin J. Conway 41,500 40,000 81,500 William R. Fields 49,625 40,000 89,625 Harold R. Logan 51,000 40,000 91,000 John R. Miller 95,174 40,000 135,174 Robert W. Tieken 59,500 40,000 99,500 (1) The dollar value of stock awards set forth in this column is equal to the compensation cost recognized during 2006 for financial statement purposes in accordance with Financial Accounting Standard 123R. (2) Mr. Botta has elected to defer receipt of all cash and stock compensation payable to him in the form of phantom shares. Cash compensation is converted to phantom shares based on the closing price of the Company’s common stock on the first trading day following the end of the quarter. Awards of common stock are converted to phantom shares on aone-for-one basis. At December 31, 2006, Mr. Botta held a total of 58,991 shares of phantom stock.
10
John D. Beckett
G. Andrea Botta
Harold R. Logan, Jr.
11Air Products and Chemicals, Inc. Ecolab Inc. Ryerson Tull, Inc. Armstrong World Industries, Inc. Flowserve Corporation The Scotts Miracle-Gro Company Ball Corporation FMC Corporation Sonoco Products Company Bausch & Lomb Incorporated Johns Manville Steelcase Inc. BorgWarner Inc. Kennametal Inc. Thomas & Betts Corporation Briggs & Stratton Corporation Maytag Corporation Tupperware Corporation Church & Dwight Company, Inc. Milacron Inc. UST Inc. C.R. Bard, Inc. Molson Coors Brewing Company Wm. Wrigley Jr. Company Cooper Cameron Corporation PACCAR Inc Worthington Industries, Inc. Donaldson Company, Inc. • Base salary • Short-term cash incentives • Long-term incentives, consisting of Service Restricted Stock Units (Service RSUs) and Performance Restricted Stock Units (Performance RSUs) • Welfare benefits • Perquisites • Retirement benefits • Termination pay
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15• The 2004 Plan provides that if a participant’s employment is terminated for any reason except Cause within six months prior to achange-in-control or within twelve months subsequent to suchchange-in-control, the participant will have until the earlier of (i) twelve months following such termination, or (ii) expiration of the option, to exercise such option. • The 2003 Riverwood Holding, Inc. Long-Term Incentive Plan provides that outstanding options will be either cancelled in exchange for a payment in cash of an amount equal to (i) the excess of the value assigned to shares in the transaction constituting thechange-in-control over (ii) the exercise price, or exchanged for an alternative award with substantially equivalent economic value. • The Riverwood Holding, Inc. 2002 Stock Incentive Plan provides that outstanding options will be cancelled in exchange for a payment equal to (i) the excess of the value assigned to shares in the transaction constituting thechange-in-control over (ii) the exercise price, and that such payment be made in cash or in shares of the stock of the new company, if such shares are publicly-traded. • The Riverwood Holding, Inc. Supplemental Long-Term Incentive Plan and the Riverwood Holding, Inc. Stock Incentive Plan provide that outstanding options may be either cancelled in exchange for a payment equal to (i) the excess of the value assigned to shares in the transaction constituting achange-in-control over (ii) the exercise price, or if the transaction constituting achange-in-control is accounted for under the “pooling of interests” method, exercised by the holder or exchanged for fully-exercisable options to purchase the common stock of the new company, provided such opportunity is made available by the new company and that such substitute options have substantially equivalent economic value. • The Graphic Packaging Equity Incentive Plan provides only for full vesting of stock options and other awards upon achange-in-control.
16ChiefPrincipal Executive Officer (Mr. Humphrey), Principal Financial Officer (Mr. Blount) and the Company’s fourthree other most highly paid executive officers (collectively, the “Named Executive Officers”) for the three fiscal yearsyear ended December 31, 2005.2006. Long Term Compensation Awards Annual Compensation(1) Restricted Securities Payouts All Other Annual Stock Underlying LTIP Other Year Salary ($) Bonus ($) Compensation ($)(2) Units ($) Options (#) Payouts ($) Compensation ($) 2005 1,000,000 500,000 208,823 (3) — — — — President and Chief 2004 987,500 982,563 208,473 (3) — — — — Executive Officer 2003 937,450 570,544 206,935 (3) 1,365,478 (4)(5) 228,150 — — 2005 596,200 223,595 — — — — 20,525 (6) Executive Chairman 2004 573,500 427,974 — — — — 20,325 (6) 2003 220,238 (7) 370,185 — 1,543,672 (4)(8) 1,603,489 1,300,000 19,325 (6) 2005 525,000 196,901 111,625 (9) — — — 10,925 (10) Chief Operating Officer 2004 457,500 373,919 — — — — 10,413 (10) 2003 166,667 (11) 233,450 — 1,259,140 (4)(12) 163,710 1,125,000 8,787 (10) 2005 325,000 3,120,188 (13) — 43,740 (14) — — 8,400 (15) Senior Vice President 2004 325,000 200,000 — — — — — and Chief Financial 2003 316,477 92,525 — 783,269 (16) 74,879 — — Officer 2005 354,167 123,938 (17) — — — — 9,436 (18) Senior Vice President, 2004 308,333 259,250 — — — — 9,038 (18) Consumer Packaging 2003 125,000 (19) 149,588 92,734 (20) 966,103 (4)(21) 82,765 1,085,500 7,968 (18) Division Change in Pension Value and Non-Equity Nonqualified Incentive Deferred Stock Plan Compensation All Other Salary Bonus Awards Compensation Earnings Compensation Total Year ($) ($)(1) ($)(2)(3) ($)(4) ($)(5) ($) ($) 2006 1,058,333 — 2,635,041 1,050,000 326,106 213,516 (6) 5,282,996 President and
Chief Executive Officer 2006 600,511 31,000 300,158 277,891 552,463 24,552 (7) 1,786,575 Vice Chairman 2006 550,000 43,500 411,605 412,500 73,749 11,325 1,502,679 Chief Operating Officer 2006 393,750 19,725 310,614 275,625 76,975 9,298 1,085,987 Senior Vice President and
Chief Financial Officer 2006 350,000 11,988 362,051 245,000 136,031 16,812 1,121,882 Senior Vice President, Beverage (1) InAmounts shown in this column reflect payments in lieu of perquisites and guaranteed car allowance payments.(2) The dollar value of RSUs set forth in this column is equal to the compensation cost recognized during 2006 for financial statement purposes in accordance with the rulesFinancial Accounting Standard 123R (“FAS 123R”), except no assumptions for forfeitures were included. This valuation method values RSUs granted during 2006 and previous years. A discussion of the SEC,assumptions used in calculating the
17compensation cost is set forth in Note 6 of the Notes to Consolidated Financial Statements included in the Company’s Annual Report onForm 10-K for the year ended December 31, 2006. (3) Information regarding the number of RSUs granted to our named executives during 2006 is set forth in the table does not include(i) medical, dental, group life insurance, relocation or other benefits that are available to all salaried employeesGrants of Plan-Based Awards for 2006 Table. The Grants of Plan-Based Awards for 2006 Table also sets forth the aggregate grant date fair value of the RSUs granted during 2006 computed in accordance with FAS 123R.(4) The amounts set forth in this column were earned during 2006 and (ii) certain perquisites and personal benefits that do not exceedpaid in early 2007 under our 2006 MIP.(5) The amounts set forth in this column reflect the lesseraggregate increase in the present value of $50,000 or 10%each of the Named Executive Officer’s salary and bonus shown in the table.Officers’ respective accumulated benefits under our pension plans. (2)Except as otherwise noted, amounts shown consist of certain perquisites, none of which had a value exceeding 25% of the total value of all perquisites provided.(3)(6)Includes $12,323, $11,973 and $10,435 of perquisites in 2005, 2004 and 2003, respectively, plus $196,500, in each year, which is the amount of interest that would have been paid on the $5.0 million non-interest bearing loan made to Mr. Humphrey, had such loan borne interest at 3.93% per annum, the applicable federal rate aton December 19, 2001, the timedate on which the loan was extended. Seeextended (see “Certain Relationships and Related Transactions — Management Indebtedness” for additional information on the loan made to Mr. Humphrey in November 1999.1999). The amount also includes a gift of appreciation upon retirement from the Board of Directors (and related taxgross-up), club dues and tax preparation and estate planning services paid by the Company. (4)(7)The valueIncludes executive life insurance premiums of the restricted stock units equals the number of such units granted, multiplied by the price of the Company’s common stock ($3.99) on August 8, 2003, the date of grant. One-third of these restricted stock units vest on each of the first three anniversaries of the date of grant, subject to the Named Executive Officer’s continuous employment. No dividend equivalents are payable with respect to the restricted stock units.10(5)As of December 31, 2005, Mr. Humphrey held 228,150 restricted stock units with an aggregate market value of $520,182.(6)The amounts shown include (i)$12,125, matching contributions on behalf of Mr. Coors to the Company’s 401(k) savings planPlan and a gift of $8,400, $8,200 and $7,200 in 2005, 2004 and 2003, respectively; and (ii) $12,125 for executive life insurance premiumsappreciation upon retirement as Executive Chairman of the Board of Directors (and related taxgross-up) paid by the CompanyCompany. All Other Grant Stock Date Fair Awards: Value of Estimated Future Payouts Number Stock Estimated Possible Payouts Under Equity Incentive Shares of and Under Non-Equity Incentive Plan Awards(1) Plan Awards(2) of Stock Option Grant Threshold Target Maximum Threshold Target Maximum or Units Awards(3) Date ($) ($) ($) ($) (#) (#) (#) ($) 02/15/2006 0 1,050,000 2,100,000 President and 02/15/2006 389,301 (4) 1,043,327 Chief Executive Officer 02/15/2006 0 389,301 545,021 1,043,327 04/07/2006 143,678 344,827 05/16/2006 158,046 (5) 535,776 02/15/2006 0 277,891 555,782 Vice Chairman 02/15/2006 0 412,500 825,000 Chief Operating Officer 02/15/2006 163,136 (4) 437,204 02/15/2006 0 163,136 228,390 437,204 02/15/2006 0 275,625 551,250 Senior Vice President and 02/15/2006 84,746 (4) 227,119 Chief Financial Officer 02/15/2006 0 84,746 118,644 227,119 05/16/2006 9,900 (5) 33,561 02/15/2006 0 245,000 490,000 Senior Vice President, 02/15/2006 74,153 (4) 198,730 Beverage 02/15/2006 74,153 103,814 198,730 05/16/2006 31,350 (5) 106,277 (1) The amounts set forth in each of 2005, 2004these columns reflect the threshold, target and 2003.maximum cash payments that could have been earned during 2006 under the 2006 MIP. (7)(2)Mr. Coors was appointed Executive Chairman effective August 8, 2003.The amounts set forth in these columns reflect the threshold, target and maximum number of RSUs that could have been earned during 2006 based upon the achievement of performance goals by the Company
18under the 2006 long-term incentive program (“2006 LTIP”). The amount of such awards will be determined and grants of such RSUs will be made before June 2007. (8)As of December 31, 2005, Mr. Coors held 574,005 restricted stock units with an aggregate market value of $1,308,731.(9)Includes Mr. Scheible’s perquisite allowance of $28,500, car allowance of $15,000, and $39,921 of relocation benefits, together with $28,204 of related tax payments.(10)Amounts shown include (i) matching contributions on behalf of Mr. Scheible to the Company’s 401(k) savings plan of $8,400, $8,200 and $7,200 in 2005, 2004 and 2003, respectively, and (ii) $2,525, $2,213 and $1,587 for executive life insurance premiums paid by the Company in 2005, 2004 and 2003, respectively.(11)Mr. Scheible was appointed as Executive Vice President, Commercial Operations effective August 8, 2003.(12)As of December 31, 2005, Mr. Scheible held 315,574 restricted stock units with an aggregate market value of $719,509.(13)Includes $3,075,000 paid to Mr. Blount as a special bonus for achieving certain integration goals following the Merger (the “Integration Award”), and a discretionary bonus of $45,188 for 2005.(14)(3)The value of the restricted stock units equalsamounts set forth in this column reflect the number of such unitsRSUs granted multiplied by the Company’s common stock price ($4.86) on March 16, 2005, the date of grant. One third of these restricted stock units vest on each of the first three anniversaries of the date of grant, and they are payable two years thereafter following a mandatory holding period. No dividend equivalents are payable with respect to the restricted stock units. As of December 31, 2005, Mr. Blount held 171,504 restricted stock units with an aggregate market value of $391,029.(15)The amount shown represents a matching contribution on behalf of Mr. Blount to the Company’s 401(k) savings plan.(16)The value of the restricted stock units equals the number of such units granted, multiplied by theclosing price of the Company’s common stock ($4.82) on October 6, 2003, the date of grant. One-thirdFor estimated future awards, the amounts set forth in this column represent the value of these restricted stock units vest on August 8, 2004, one-third on August 8, 2005 and one-third on August 8, 2006, subject to Mr. Blount’s continued employment. No dividend equivalents are payable with respect toawards at the restricted stock units.target level as of February 15, 2006. (17)(4)In addition toThese amounts reflect the amount shown, Mr. Sturdivant was awarded an additional $123,938 retention bonus payable on March 1, 2007 if Mr. Sturdivant continues to be employed bynumber of RSUs granted during 2006 as Service RSUs under the Company through such date.2006 LTIP. (18)(5)TheThese amounts shown include (i) matching contributions on behalfreflect the number of Mr. Sturdivant toRSUs earned during 2005 based upon the Company’s 401(k) savings planachievement of $8,400, $8,200 and $7,200 in 2005, 2004 and 2003, respectively, and (ii) $1,036, $838 and $768 for executive life insurance premiums paidperformance goals by the Company inunder the 2005 2004 and 2003, respectively.(19)Mr. Sturdivant was appointed Senior Vice President Universal Packaging Division effective August 8, 2003.(20)Includes Mr. Sturdivant’s perquisite allowance of $28,500, a car allowance of $15,000 and $49,234 of relocation benefits.(21)As of December 31, 2005, Mr. Sturdivant held 242,131 restricted stock units with an aggregate market value of $552,059.long-term incentive program.1120052005,2006, none of the Named Executive Officers received grants of stock options or stock appreciation rights.Aggregated Option Exercises in 2005Stock Awards. In 2006, the Compensation and Fiscal Year-End Option ValuesBenefits Committee and the Board approved grants of RSUs under the 2004 Plan to our Named Executive Officers. These grants included Service RSUs that vest over a period of service and Performance RSUs that were based upon accomplishment of certain performance metrics.NoneThe Service RSUs granted vest in three equal increments on the first, second and third anniversary of the date of grant and are payable 50% in shares of the Company’s common stock and 50% in cash two years thereafter upon the termination of a mandatory holding period. The Performance RSUs vest in full on the second anniversary of the date of grant and are payable 50% in shares of the Company’s common stock and 50% in cash two years thereafter upon the termination of a mandatory holding period.
19exercised any options during 2005. The following table provides information concerningat the unexercised options held by eachend of the Named Executive Officers on December 31, 2005.fiscal 2006. Number of Securities Value of Unexercised Shares Value Underlying Unexercised In-the-Money Options at Acquired on Realized Options at Fiscal Year-End Fiscal Year-End ($)(1) Exercise (#) ($) Exercisable Unexercisable(2) Exercisable Unexercisable(2) Stephen M. Humphrey — — 6,798,186 (3) 0 0 0 Jeffrey H. Coors — — 1,603,489 0 215,250 0 David W. Scheible — — 163,710 0 0 0 Daniel J. Blount — — 189,304 0 0 0 Donald W. Sturdivant — — 82,765 0 0 0 Option Awards Stock Awards Equity Incentive Equity Plan Incentive Awards: Plan Market Awards: or Payout Number of Value of Unearned Unearned Number of Shares, Shares, Securities Units Units Underlying or Other or Other Unexercised Option Rights Rights Options Exercise Option That Have That Have (#) Price Expiration Not Vested Not Vested Exercisable ($) Date (#) ($) 864,675 (1) 3.28 03/31/2007 158,046 (7) 684,339 President and Chief Executive Officer 1,081,675 (2) 4.93 03/31/2007 389,301 (8) 1,685,673 517,779 (3) 6.57 05/07/2009 143,678 (9) 622,126 1,081,675 (4) 6.57 03/31/2010 228,150 (5) 6.57 08/08/2013 6,503,948 (6) 7.88 01/01/2012 300,000 1.56 08/08/2013 Vice Chairman 10,406 7.06 08/08/2013 523,872 7.56 08/08/2013 60,638 9.11 08/08/2013 545,700 10.17 08/08/2013 8,768 10.48 08/08/2013 27,285 10.58 08/08/2013 4,860 10.65 08/08/2013 9,182 13.21 08/08/2013 112,778 13.38 08/08/2013 163,710 7.56 08/08/2013 163,136 (8) 706,379 Chief Operating Officer 73,008 6.57 06/11/2009 9,900 (7) 42,867 Senior Vice President and 41,417 6.57 06/30/2009 84,746 (8) 366,950 Chief Financial Officer 74,879 6.57 08/08/2013 6,000 (10) 25,980 60,840 6.57 06/04/2009 31,350 (7) 135,746 Senior Vice President, Beverage 69,039 6.57 06/30/2009 19,000 (10) 82,270 80,613 6.57 08/08/2013 74,153 (8) 321,082 (1) Includes 215,670 options held for the benefit of former spouse. (2) Includes 432,670 options held for the benefit of former spouse. (3) Includes 207,112 options transferred to former spouse. (4) Includes 432,670 options transferred to former spouse. (5) Includes 60,840 options transferred to former spouse. (6) Includes 2,130,754 options transferred to former spouse. (7) These RSUs vest on May 16, 2008. (8) These RSUs vest in three equal annual installments beginning on February 15, 2007. (9) These RSUs vest in three equal annual installments beginning on April 7, 2007 (10) These RSUs vest in two equal annual installments beginning on March 16, 2007.
20 Option Awards Stock Awards Number of Value of Number of Value of Shares Shares Shares Shares Acquired Realized on Acquired Realized on on Exercise Exercise on Vesting Vesting (#) ($)(1) (#) ($)(2) 217,000 837,349 114,075 396,981 President and Chief Executive Officer — — 128,962 448,788 Vice Chairman — — 105,192 366,068 Chief Operating Officer — — 57,168 195,705 Senior Vice President and Chief Financial Officer — — 94,169 317,448 Senior Vice President, Beverage (1) Options exercised for the benefit of former spouse. (2) The dollar amounts set forth under this heading are calculatedvalue realized on the vesting of RSUs is based on a price of $2.28 per share, the closing price of the Company’s common stock on December 30, 2005 (the last trading daythe date of vesting. As described in the Compensation Discussion and Analysis, certain RSUs are not payable until the expiration of a mandatory two-year holding period that follows the date of full vesting of the year) on the NYSE.(2)On December 8, 2005, the vesting of all of the unvested stock options granted to employees of the Company was accelerated so that such options vested immediately. This action affected 1,253,112 stock options granted to Mr. Humphrey and 24,960 stock options granted to Mr. Blount and was done to save the Company approximately $3.2 million of compensation expense after January 2006 when Statement of Financial Accounting Standards No. 123R,Accounting for Stock-Based Compensation, becomes effective and requires the expensing of all unvested stock options.(3)On July 19, 2005, the Compensation and Benefits Committee approved the amendment of certain stock option agreements covering options granted to employees of the Company during 1996 and 1997. The amendment (i) extended the termination date by three years for a maximum13-year term and (ii) increased the time period after retirement to exercise such options to a maximum of three years (not to exceed the13-year term). This action affected 1,081,675 stock options previously granted to Mr. Humphrey.grant.PlansBenefits at Fiscal Year-End 2006 Table Number Present Payments of Years Value of During Credited Accumulated Last Service Benefit Fiscal Year (#) ($)(1) ($) Riverwood International Employees Retirement Plan 9 912,292 0 President and Chief Riverwood International Supplemental Retirement Plan 9 917,360 0 Executive Officer Graphic Packaging International, Inc. Supplemental Executive Pension Plan 22 (2) 5,000,000 0 Riverwood International Employees Retirement Plan 38 0 0 Vice Chairman Riverwood International Supplemental Retirement Plan 38 516,841 0 Graphic Packaging Retirement Plan 36 (4) 956,615 0 Graphic Packaging Supplemental Retirement Plan 36 (4) 1,831,969 0 Riverwood International Employees Retirement Plan 7 25,469 0 Chief Operating Officer Riverwood International Supplemental Retirement Plan 7 99,782 0 Graphic Packaging Retirement Plan 5 (4) 70,497 0 Graphic Packaging Supplemental Retirement Plan 5 (4) 90,239 0 Riverwood International Employees Retirement Plan 8 185,943 0 Senior Vice President and Riverwood International Supplemental Retirement Plan 8 424,321 0 Chief Financial Officer Riverwood International Employees Retirement Plan 25 748,052 0 Senior Vice President, Riverwood International Supplemental Retirement Plan 25 217,006 0 Beverage (1) The valuation method and assumptions used in calculating the present value of the accumulated benefits is set forth in Note 9 of the Notes to Consolidated Financial Statements included in the Company’s Annual Report onForm 10-K for the year ended December 31, 2006.
21(2) Mr. Humphrey’s benefit under the Graphic Packaging International, Inc. Supplemental Executive Pension Plan is to be paid in a lump sum. The amount of such benefit is capped at $5,000,000 and would have been forfeited if Mr. Humphrey’s employment had terminated before March 31, 2007. (3) Mr. Coors is eligible for early retirement as of December 31, 2006. (4) Mr. Coors and Mr. Scheible were transferred to the Riverwood International Employees Retirement Plan and the Riverwood International Supplemental Retirement Plan from the Graphic Packaging Retirement Plan and the Graphic Packaging Supplemental Retirement Plan as of December 31, 2004. Benefits under the Graphic Packaging Retirement Plan and the Graphic Packaging Supplemental Retirement Plan were frozen as of the date of transfer. GPICGraphic Packaging Retirement Plan (as defined below)(the “GPIC Retirement Plan”) are participants in the Riverwood International Employees Retirement Plan (the “Employees Retirement Plan”). Pension benefits under this plan are limited in accordance with the provisions of the Internal Revenue Code (the “Code”) governing tax-qualified pension plans. The Company also maintains the Riverwood International Supplemental Retirement Plan for participants in the Employees Retirement Plan that provides for payment to participants of retirement benefits equal to the excess of the benefits that would have been earned by each participant had the limitations of the Code not applied to the Employees Retirement Plan and the amount actually earned by such participant under such plan. Messrs. Humphrey, Coors, Humphrey, Scheible, Blount and SturdivantSchmal are each eligible to participate in these pension plans. Benefits under the Riverwood International Supplemental Retirement Plan are not pre-funded; such benefits are paid by the Company or through the retirement plan through a qualified supplemental employee’s retirement plan.The Pension Plan Table below sets forth the estimated annual benefits payable upon retirement, including amounts attributable to the Supplemental Plan, for specified five-year average remuneration levels and years of service.12Pension Plan Table Years of Service 5 10 15 20 25 30 35 40 $ 125,000 7,914 15,828 23,742 31,657 39,571 47,485 55,399 63,712 $ 150,000 9,664 19,328 28,992 38,657 48,321 57,985 67,649 77,624 $ 175,000 11,414 22,828 34,242 45,657 57,071 68,485 79,899 91,537 $ 200,000 13,164 26,328 39,492 52,657 65,821 78,985 92,149 105,449 $ 225,000 14,914 29,828 44,742 59,657 74,571 89,485 104,399 119,362 $ 250,000 16,664 33,328 49,992 66,657 83,321 99,985 116,649 133,274 $ 275,000 18,414 36,828 55,242 73,657 92,071 110,485 128,899 147,189 $ 300,000 20,164 40,328 60,492 80,657 100,821 120,985 141,149 161,099 $ 400,000 27,164 54,328 81,492 108,657 135,821 162,985 190,149 216,749 $ 500,000 34,164 68,328 102,492 136,657 170,821 204,985 239,149 272,399 $ 600,000 41,164 82,328 123,492 164,657 205,821 246,985 288,149 328,049 $ 700,000 48,164 96,328 144,492 192,657 240,821 288,985 337,149 383,699 $ 800,000 55,164 110,328 165,492 220,657 275,821 330,985 386,149 439,349 $ 900,000 62,164 124,328 186,492 248,657 310,821 372,985 435,149 494,999 $1,000,000 69,164 138,328 207,492 276,657 345,821 414,985 484,149 550,649 $1,100,000 76,164 152,328 228,492 304,657 380,821 456,985 533,149 606,299 $1,200,000 83,164 166,328 249,492 332,657 415,821 498,985 582,149 661,949 $1,300,000 90,164 180,328 270,492 360,657 450,821 540,985 631,149 717,599 $1,400,000 97,164 194,328 291,492 388,657 485,821 582,985 680,149 773,249 $1,500,000 104,164 208,328 312,492 416,657 520,821 624,985 729,149 828,899 $1,600,000 111,164 222,328 333,492 444,657 555,821 666,985 778,149 884,549 $1,700,000 118,164 236,328 354,492 472,657 590,821 708,985 827,149 940,199 $1,800,000 125,164 250,328 375,492 500,657 625,821 750,985 876,149 995,849 $1,900,000 132,164 264,328 396,492 528,657 660,821 792,985 925,149 1,051,499 $2,000,000 139,164 278,328 417,492 556,657 695,821 834,985 974,149 1,107,149 Mr. Blount’s Integration Award,certain other bonus awards, but excludes payments under any equity incentive plan or long-term incentive plan, allplan.which are disclosed in the Summary Compensation Table. HadDecember 31, 2006, Messrs. Humphrey, Coors, Humphrey, Scheible, Blount and Sturdivant retired as of December 31, 2005, their respective five-year average remuneration, for purposes of the table set forth above, would have been as follows: Jeffrey H. Coors, $641,703; Stephen M. Humphrey, $1,398,733; David W. Scheible, $503,283; Daniel J. Blount, $1,048,006; and Donald W. Sturdivant, $339,356.On December 31, 2005, Messrs. Coors, Humphrey, Scheible, Blount and SturdivantSchmal had the following completed years of credited service underset forth above in the retirement plan: Jeffrey H. Coors, 37; Stephen M. Humphrey, 8; David W. Scheible, 6; Daniel J. Blount, 7; and Donald W. Sturdivant, 6.Pension Benefit Table. Estimated benefits have been calculated on the basis of a straight-life annuity form of payment and are not subject to a reduction to reflect the payment of Social Security benefits or other offset amounts. The years of service calculated for Messrs. Coors Scheible and SturdivantScheible include years of service credited under the GPIC Retirement Plan described below. Messrs. Coors Scheible and SturdivantScheible participated in the GPIC Retirement Plan until January 1, 2005 when they were transferred into the Employees Retirement Plan.iswas to be paid13continuescontinued to be employed by the Company or one of its affiliates through such date. Mr. Humphrey met his service requirement and the benefit under the Supplemental Executive Pension Plan was paid. The benefit payablepaid under the plan iswas not pre-funded and the plan iswas intended to be a nonqualified, deferred compensation plan. The benefit payable under this plan is not included in the pension plan table set forth above.
22GPIC Retirement Plan.The Company’s U.S. salaried employees who (i) were previously employed by GPIC, (ii) satisfy the service eligibility criteria and (iii) do not participate in the Employees Retirement Plan participate in the Graphic Packaging Retirement Plan (the “GPIC Retirement Plan”). Pension benefits under the GPIC Retirement Plan are limited in accordance with the provisions of the Code governing tax qualified pension plans. GPIC also maintained the Graphic Packaging Excess Benefit Plan (formerlyfollowing table sets forth information relating to the ACX Technologies, Inc. Excess Benefit Plan) andDeferred Compensation Plan. Mr. Coors is the Graphic Packaging Supplemental Retirement Plan (formerlyonly Named Executive Officer who participates in this plan. Aggregate Aggregate Earnings in Balance at Last Fiscal Last Fiscal Year Year-End ($)(1) ($) — — President and Chief Executive Officer 383,595 (2) 810,228 Vice Chairman — — Chief Operating Officer — — Senior Vice President and Chief Financial Officer — —— Senior Vice President, Beverage (1) No amounts reported in this table are reported as compensation in the Summary Compensation table. (2) This amount represents the difference in the closing price of the Company’s common stock from December 31, 2005 to December 31, 2006 multiplied by 187,120, the number of RSUs that represent Mr. Coors’ deferred compensation. Such compensation is now payable in shares of the Company’s common stock. Supplemental Retirement Plan) that provided the benefits that were not payable from the qualified retirement plan becauseDeferred Compensation Plan, certain executives could defer up to 100% of limitationsany amounts he or she was entitled to receive under the Code. Noneannual incentive and long-term incentive plans. Amounts contributed under this plan could be invested in a GPIC stock fund or a cash fund. Mr. Coors made all of the Company’s Named Executive Officers participated inhis deferrals into the GPIC Retirement Plan during 2005.Equitystock fund. The ACX Technologies, Inc. Deferred Compensation Plan Informationwas closed to new deferrals in August 2003.2005,2006, with respect to the Company’s compensation plans under which equity securities are authorized for issuance: (a) (b) (c) Number of Securities Weighted- Number of Securities Remaining to be Issued Upon Average Available for Future Issuance Exercise of Exercise Price of Under Equity Compensation Outstanding Options, Outstanding Options, Plans (Excluding Securities Warrants and Rights Warrants and Rights Reflected in Column(a)) 19,532,852 (2) $ 6.84 (3) 15,169,861 Equity compensation plans not approved by stockholders — — — Total 19,532,852 (2) $ 6.84 (3) 15,169,861 Number of Securities Number of Securities Remaining to be Issued Upon Weighted-Average Available for Future Issuance Exercise of Exercise Price of Under Equity Compensation Outstanding Options, Outstanding Options, Plans (Excluding Securities Warrants and Rights Warrants and Rights Reflected in Column(a)) (#) ($) (#) Equity compensation plans approved by stockholders(1) 17,513,423 (2) 6.97 14,044,346 Equity compensation plans not approved by stockholders — — — Total 17,513,423 (2) 6.97 14,044,346 (1) These plans are the Graphic Packaging Corporation 2004 Stock and Incentive Compensation Plan (the “2004 Plan”), the 2003 Riverwood Holding, Inc. Long-Term Incentive Plan, the 2003 Riverwood Holding, Inc. Directors Stock Incentive Plan, the Riverwood Holding, Inc. 2002 Stock Incentive Plan, the Riverwood Holding, Inc. Supplemental Long-Term Incentive Plan, the 1996 SIP, the Graphic Packaging Equity Incentive Plan, and the Graphic Packaging Equity Compensation Plan for Non-Employee Directors. With the exception of the 2004 Plan, each of these plans has been amended to provide that no additional awards will be granted thereunder. (2) Includes an aggregate of 15,944,33814,886,487 stock options, 3,557,413 restricted stock units2,567,945 RSUs and 31,10158,991 shares of phantom stock. (3) Weighted-average exercise price of outstanding options; excludes restricted stock unitsRSUs and shares of phantom stock.
23CONTRACTSAGREEMENTS AND TERMINATION OF EMPLOYMENT ANDCHANGE IN CONTROL ARRANGEMENTSAgreement with Stephen M. HumphreyAgreementsThe Company has an employment agreement dated March 25, 2003, with its President and Chief Executive Officer, Stephen M. Humphrey. The agreement has a term of four years and provides that Mr. Humphrey will serve as President and Chief Executive Officer of the Company and its subsidiaries, GPI Holding, Inc. and Graphic Packaging International, Inc.14Pursuant to this agreement, Mr. Humphrey’s base salary was $950,000 from April 1, 2003 to March 31, 2004, and increased to no less than $1,000,000 per year thereafter. On April 7,July 20, 2006, the Board of Directors approved an increase in Mr. Humphrey’s base salary to $1,050,000 per year, retroactive to November 1, 2005. During the employment term, Mr. Humphrey is eligible for an annual target bonus of 100% of base salary (with a maximum annual bonus opportunity equal to 200% of base salary) and welfare benefits including life, medical, dental, accidental death and dismemberment, business travel accident, prescription drug and disability insurance. Mr. Humphrey is also eligible to participate in all of the profit sharing, pension, retirement, deferred compensation and savings plans applicable to the Company’s executive officers.If Mr. Humphrey’s employment is terminated without cause or he terminates his employment for good reason, Mr. Humphrey will be entitled to receive (in addition to accrued amounts of salary, bonus and other compensation) the following severance benefits:• base salary for the shorter of the remainder of the employment term or three years;• a pro rata bonus for the year in which his employment is terminated, provided that applicable performance objectives have been achieved;• continued life, medical, dental, accidental death and dismemberment and prescription drug insurance benefits for as long as base salary is paid; and• reimbursement for outplacement and career counseling services in an amount not to exceed the lesser of $25,000 or 20% of base salary.A termination is for “cause” under Mr. Humphrey’s agreement if it is due to Mr. Humphrey’s:• willful failure substantially to perform his duties (other than due to physical or mental illness) or other willful and material breach of any of his obligations under the agreement, after a demand for substantial performance is delivered and a reasonable opportunity to cure is given;• engaging in willful and serious misconduct that has caused or would reasonably be expected to result in material injury to the Company or its affiliates; or• conviction of, or entering a plea of nolo contendere to, a felony.A termination is for “good reason” under Mr. Humphrey’s agreement if it is within 30 days of any of the following:• the assignment of duties that are significantly different from and that result in a substantial diminution of his duties at the commencement of the employment term;• the Company’s failure to require a successor to assume the agreement;• a reduction in his base salary; or• the Company’s breach of any of its obligations under the agreement, the option agreement with Mr. Humphrey or any other incentive award agreement granted to Mr. Humphrey.Upon his retirement, Mr. Humphrey will be entitled to a supplemental retirement benefit equal to the difference between the benefits provided under the Employees Retirement Plan and Supplemental Pension Plan and the benefits he would have received under such plans if he had ten years of service with the Company. Mr. Humphrey will not receive this benefit if his employment is terminated due to death, disability or cause, or if he terminates his employment without good reason or retires before the end of the employment term.In addition to this supplemental retirement benefit, Mr. Humphrey will receive a benefit equal to the amount he would be paid for an additional 22 years of service under the Employees Retirement Plan, up to a maximum of $5,000,000. Such benefit is to be paid in a lump sum payment on March 31, 2007, if Mr. Humphrey continues to be employed by the Company or one of its affiliates through such date.The agreement also amends the vesting schedule of special performance options granted to Mr. Humphrey under a Management Stock Option Agreement dated January 1, 2002. Pursuant to the terms of his employment15agreement, one-third of the special performance options granted under the option agreement vested one-third on August 8, 2003 and on August 8, 2005. The remainder will vest on August 8, 2006.Pursuant to the terms of his employment agreement, 1,140,750 of the unvested performance options granted to Mr. Humphrey under stock incentive plans were exchanged for 228,150 new stock options and 342,225 restricted units. One-third of these options and restricted units, as well as the other unvested performance options held by Mr. Humphrey, vested on August 8, 2004 and August 8, 2005. The remainder will vest on August 8, 2006.The agreement also provides that Mr. Humphrey may not work for a competitor of the Company for a period of one year after his employment is terminated or the end of his severance period, whichever is later. Mr. Humphrey is also prohibited from soliciting employees of the Company for three years after his termination.Employment Agreement with Jeffrey H. CoorsJeffrey H. Coors, who was GPIC’s President and Chief Executive Officer, entered into an employment agreement with GPIC dated March 25, 2003. Under Mr. Coors’ employment agreement, he serves as the Company’s Executive Chairman and as the Executive Chairman of the Company’s subsidiaries, GPI Holding, Inc. and Graphic Packaging International, Inc. The agreement has a term of three years beginning on August 8, 2003 and provides for an annual base salary of $555,000, which salary will be reviewed annually.Under the terms of his agreement, Mr. Coors participates in short-term incentive plans existing from time to time and other incentive plans, in each case as determined by the Compensation and Benefits Committee. He also participates in savings and retirement plans and welfare benefit plans sponsored by the Company. In connection with the Merger, on August 8, 2003, Mr. Coors received the following compensation and benefits from GPIC:• all cash target amounts under GPIC’s long-term incentive plans that were not previously paid or had not expired, regardless of whether the performance targets for those plans had been achieved;• the conversion of certain options previously granted under GPIC’s equity incentive plan or long-term incentive plans, which options were immediately exercisable and will remain exercisable until August 8, 2013; and• restricted stock units representing the right to receive shares of the Company’s common stock, one-third of which vested on August 8, 2004 and August 8, 2005. The remainder will vest August 8, 2006. However, the restricted shares vest in full immediately if: (1) Mr. Coors’ employment is terminated without cause, due to death, disability or retirement, or he terminates employment for good reason; or (2) upon a change of control.Pursuant to these provisions, Mr. Coors received a cash payment of approximately $1.1 million and options worth approximately $0.4 million (based on the difference between the exercise price of the option and GPIC’s common stock price of $3.99 per share on August 8, 2003), and 386,885 shares of GPIC restricted stock were converted into restricted stock units convertible into shares of the Company’s common stock.If, during the term of his employment agreement, the Company terminates the employment of Mr. Coors without cause or Mr. Coors terminates his employment for good reason, he would be entitled to receive (in addition to accrued amounts of salary, bonus and other compensation), the following amounts and benefits:• the greater of the amount of his highest bonus under the Company’s bonus plan, or any comparable bonus under any predecessor or successor plan, for the last three full fiscal years, and the annual bonus paid or payable to him under the Company’s short-term incentive plan or plans;• a lump sum in cash equal to three times:– his highest annual base salary for any of the past three years;16– an amount equal to his highest base salary during any of the past three years multiplied by the highest percentage payout of bonus under a short-term incentive plan paid or accrued during any of the past three years; and– the highest one-year cash equivalent amount of fringe benefits paid in any of the past three years;• any benefits due under any supplemental executive retirement plan in accordance with the provisions of the plan, with the amount of benefits to be adjusted to reflect five additional years of service and five additional years of age (with such additional years of service to decrease by one for each year of employment following the merger);• welfare benefits for him and his family for three years or, if earlier, until he receives such benefits through subsequent employment; and• outplacement services for one year (with a cost not to exceed $15,000).For purposes of Mr. Coors’ employment agreement, a termination is for “cause” if it is due to Mr. Coors’:• willful and continued failure to perform substantially his duties (other than due to physical or mental illness), after a written demand for substantial performance is delivered; or• willful engagement in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company.For purposes of Mr. Coors’ employment agreement, a termination is for “good reason” if it is within 90 days of any of the following and without Mr. Coors’ consent:• material diminution of his title, responsibilities and duties;• failure to pay compensation;• failure to pay thegross-up described below;• purported termination of employment otherwise than as expressly permitted by the agreement; or• mandatory relocation, other than in connection with a promotion, of Mr. Coors’ principal office to a location more than 35 miles from the location of such office on August 8, 2003.If any payments that resulted from the Merger or from the termination of Mr. Coors’ employment without cause or for good reason constitute an excess parachute payment (as defined under Section 280G(b)(2) of the Code), he is entitled to receive a fullgross-up payment to compensate him for the amount of the tax owed.Under the terms of his employment agreement, Mr. Coors is prohibited from engaging in any of the following activities, both during the term of his employment with the Company and for a period of two years thereafter if his employment is terminated for any reason before the end of the three-year term:• directly or indirectly owning, managing, operating, lending money to or participating in the ownership, management, operation or control of, or serving as a director, officer, employee, partner, consultant, agent or independent contractor with a business or organization in the printing and packaging business in a capacity that assists such competitor in a material respect in the printing and packaging business in the geographic areas where the Company or any of its subsidiaries or affiliates operate;• owning a controlling interest in a business that competes in a material respect in the printing or packaging business in the geographic areas where the Company or any of its subsidiaries or affiliates operate; or• soliciting or interfering with the Company’s suppliers, customers or employees or any of its subsidiaries or affiliates.The employment agreement provides, however, that Mr. Coors will not be in violation of the foregoing by virtue of the fact that he owns 5% or less of the outstanding common stock of a corporation, if such stock is17listed on a national securities exchange, is reported on NASDAQ or is regularly traded in theover-the-counter market.Employment Agreement with David W. ScheibleDavid W. Scheible, who was GPIC’s Chief Operating Officer entered into an employment agreement with GPIC dated as of March 25, 2003. Under Mr. Scheible’s agreement, he served as the Executive Vice President of Commercial Operations until his promotion to Chief Operating Officer of the Company and its subsidiaries, GPI Holding, Inc. and Graphic Packaging International, Inc., effective October 1, 2004. The employment agreement has a term of three years beginning August 8, 2003 and provides for an annual base salary of $420,000, which salary will be reviewed annually.Under the terms of the agreement, Mr. Scheible participates in short-term incentive plans existing from time to time and other incentive plans, in each case as determined by the Compensation and Benefits Committee at a level commensurate with other similarly situated executives of the Company. He also participates in savings and retirement plans and welfare benefit plans sponsored by the Company.In connection with the Merger, on August 8, 2003, Mr. Scheible received the following compensation and benefits from GPIC:• all cash target amounts under GPIC’s long-term incentive plans that were not previously paid or had not expired, regardless of whether the performance targets for those plans had been achieved;• the conversion of certain options previously granted under GPIC’s equity incentive plan or long-term incentive plans, which options were immediately exercisable and will remain exercisable until August 8, 2013; and• restricted stock units representing the right to receive shares of the Company’s common stock, one-third of which vested on August 8, 2004 and August 8, 2005. The remainder will vest on August 8, 2006. However, the restricted shares vest in full immediately if: (1) Mr. Scheible’s employment is terminated without cause, due to death, disability or retirement, or he terminates employment for good reason; or (2) upon a change of control.Pursuant to these provisions, Mr. Scheible received a cash payment of approximately $875,000 and 413,710 options worth approximately $606,875 (based on the difference between the exercise price of the option and GPIC’s common stock price of $3.99 per share on August 8, 2003), and 315,574 shares of GPIC restricted stock were converted into restricted stock units convertible into shares of the Company’s common stock.If, during the term of his employment agreement the Company terminates the employment of Mr. Scheible without cause or Mr. Scheible terminates his employment for good reason, Mr. Scheible would be entitled to receive (in addition to accrued amounts), the following amounts and benefits:• the greater of the amount of his highest bonus under the Company’s bonus plan, or any comparable bonus under any predecessor or successor plan, for the last three full fiscal years, and the annual bonus paid or payable to him under the Company’s short-term incentive plan or plans;• a lump sum in cash equal to three times:– his highest annual base salary for any of the past three years;– an amount equal to his highest base salary during any of the past three years multiplied by the highest percentage payout of bonus under a short-term incentive plan paid or accrued during any of the past three years; and– the highest one-year cash equivalent amount of fringe benefits paid in any of the past three years;• any benefits due under any supplemental executive retirement plan in accordance with the provisions of the plan, with the amount of benefits to be adjusted to reflect five additional years of service and five18additional years of age (with such additional years of service to decrease by one for each year of employment following the merger);• welfare benefits for him and his family for three years or, if earlier, until he receives such benefits through subsequent employment; and• outplacement services for one year (with a cost not to exceed $15,000).For purposes of Mr. Scheible’s employment agreement, a termination is for “cause” if it is due to Mr. Scheible’s:• willful and continued failure to perform substantially his duties (other than due to physical or mental illness), after a written demand for substantial performance is delivered; or• willful engagement in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company.For purposes of Mr. Scheible’s employment agreement, a termination is for “good reason” if it is within 90 days of any of the following and without Mr. Scheible’s consent:• material diminution of his title, responsibilities and duties;• failure to pay compensation;• failure to pay thegross-up described below;• purported termination of employment otherwise than as expressly permitted by the agreement; or• mandatory relocation, other than in connection with a promotion, of Mr. Scheible’s principal office to a location more than 35 miles from the location of such office on August 8, 2003.If any payments that resulted from the Merger or from the termination of Mr. Scheible’s employment without cause or for good reason constitute an excess parachute payment (as defined under Section 280G(b)(2) of the Code), he is entitled to receive a fullgross-up payment to compensate him for the amount of the tax owed.Under the terms of his employment agreement, Mr. Scheible is prohibited from engaging in any of the following activities, both during the term of his employment with the Company and for a period of two years thereafter if his employment with the Company is terminated for any reason before the end of the three-year term:• directly or indirectly owning, managing, operating, lending money to or participating in the ownership, management, operation or control of, or serving as a director, officer, employee, partner, consultant, agent or independent contractor with a business or organization in the printing and packaging business in a capacity that assists such competitor in a material respect in the printing and packaging business in the geographic areas where the Company or any of its subsidiaries or affiliates operate;• owning a controlling interest in a business that competes in a material respect in the printing or packaging business in the geographic areas where the Company or any of its subsidiaries or affiliates operate; or• soliciting or interfering with the Company’s suppliers, customers or employees or any of its subsidiaries or affiliates.The employment agreement provides, however, that Mr. Scheible will not be in violation of the foregoing by virtue of the fact that he owns 5% or less of the outstanding common stock of a corporation, if such stock is listed on a national securities exchange, is reported on NASDAQ or is regularly traded in theover-the-counter market.19Employment Agreement with Daniel J. BlountThe Company entered into a new Employment Agreementemployment agreement with Daniel J.each of the Named Executive Officers. Each of the agreements with Messrs. Scheible, Blount effective November 30, 2005. Pursuant to such agreement, Mr. Blount will continue to serve as the Company’s Senior Vice President and Chief Financial Officer. The agreementSchmal has an initial term of one year beginning on July 20, 2006 (except for Mr. Scheible, whose term begins on August 8, 2006), and then automatically extends upon the same terms and conditions for an additional term of one year, unlessone-year periods until terminated by the Company provides written notice of its desire notor the Named Executive Officer. Mr. Humphrey’s employment pursuant to extend thehis agreement at least 180 days priorbegins on January 1, 2007 and terminates on December 31, 2007. Mr. Coors’ employment pursuant to the expirationhis agreement begins on August 8, 2006 and terminates on December 31, 2007.then current term.The agreementagreements provides for athe minimum base salary of $325,000set forth in the table below and for Mr. Blount’s participationthe right to participate in the Company’s incentive compensation programs for senior executives at a level commensurate with histhe Named Executive Officer’s position and duties with the Company and based on such performance targets as may be established from time to time by the Company’s Board of Directors or a Committeecommittee thereof. For fiscal 2006, Mr. Blount’sEach of the agreements provide for an annual target bonus opportunity isfor 2006 equal to the percentage of base salary set at 70%forth in the table below.his base salary.the agreements specifies that during the executive’s employment, the Company shall provide certain employee benefits, including life, medical, dental, accidental death and dismemberment, business travel accident, prescription drug and disability insurance in accordance with the programs of the Company then available to its senior executives. The executives are also entitled to participate in all of the Company’s profit sharing, pension, retirement, deferred compensation and savings plans applicable to senior executives, as such plans may be amended and in effect from time to time.Mr. Blount’shis employment without cause, or Mr. Blountany of them terminates his employment for good reason, the agreement providesagreements provide for severance of: • base salary and for a period ending on the first anniversary of the date of termination (on the second anniversary with respect to Mr. Scheible);• welfare benefits for a period ending on the first anniversary of the date of termination; • a pro-rata incentive bonus for the year in which termination occurs, assuming that all performance targets had been achieved as of the date of termination;• the amount, if any, payable under the terms of any severance plan, policy or program in effect on the date of termination;termination (multiplied by two with respect to Mr. Scheible); and • outplacement and career counseling services with a value not in excess of the lesser of $25,000 and 20% of Mr. Blount’s base salary.$25,000.The agreement alsoSee “Potential Payments Upon Termination Without Cause or for Good Reason.”Mr. Blountthe Named Executive Officers may not work for a competitor of the Company for a period of one year after his employment terminates or(two years with respect to Mr. Scheible). Each of the end of his severance period, whichever is later. Mr. Blountexecutives is also prohibited from (i) employing or soliciting employees of the Company for employment, (ii) interfering with the Company’s relationship with its employees or (iii) soliciting or
24or the end of his severance period, whichever is later.(two years with respect to Mr. Scheible).Employment Agreement with Donald W. SturdivantSpecific terms for each of the employment agreements are set forth below: Annual Annual Base Target Salary Bonus ($) (%) 575,000 — President and
Chief Executive Officer 575,000 — Vice Chairman 550,000 75 % Chief Operating Officer(1) 700,000 100 % 400,000 70 % Senior Vice President and
Chief Financial Officer 350,000 70 % Senior Vice President, Beverage Donald W. Sturdivant, who was the President of GPIC’s Universal Packaging Division, entered into an employment agreement with GPIC dated as of March 25, 2003. Under Mr. Sturdivant’s agreement, he served as Senior Vice President, Universal Packaging Division until January 2006, when he assumed broader responsibilities as the Senior Vice President, Consumer Packaging Division. The employment agreement has a term of three years beginning August 8, 2003 and provides for an annual base salary of $300,000, which will be reviewed annually.Under the terms of the agreement, Mr. Sturdivant participates in short-term incentive plans existing from time to time at a level commensurate with other similarly situated executives of the Company. After August 8, 2006, Mr. Sturdivant will also be eligible to participate in other incentive plans existing from time to time at a level commensurate with other similarly situated executives. He also participates in savings and retirement plans and welfare benefit plans sponsored by the Company.In connection with the Merger, on August 8, 2003, Mr. Sturdivant received the following compensation and benefits from GPIC:(1) • all cashMr. Scheible’s agreement specifies that no later than January 1, 2007, he shall be promoted from the position of Chief Operating Officer to President and Chief Executive Officer. This promotion occurred on January 1, 2007. At the time of such promotion, Mr. Scheible’s base salary was increased to $700,000 and his annual target amounts under GPIC’s long-term incentive plans that were not previously paid or had not expired, regardless of whether the performance targets for those plans had been achieved;bonus opportunity was changed to 100%. Stephen M. Jeffrey H. David W. Daniel J. Michael R. Humphrey Coors Scheible Blount Schmal Cash Severance(1) — — $ 1,925,000 $ 680,000 $ 595,000 Value of Outstanding Equity Awards $ 3,900,047 $ 831,000 $ 706,379 $ 435,797 $ 539,098 Company-Paid Portion of Welfare Benefits — — 14,445 11,201 10,913 Outplacement Services(2) — — $ 25,000 $ 25,000 $ 25,000 Total $ 3,900,047 $ 831,000 $ 2,670,824 $ 1,151,998 $ 1,170,011 2025• the conversion of certain options previously granted under GPIC’s equity incentive plan or long-term incentive plans, which options were immediately exercisable and will remain exercisable until August 8, 2013; and• restricted stock units representing the right to receive shares of the Company’s common stock, one-third of which vested on August 8, 2004 and August 8, 2005, with the remainder vesting in equal increments on August 8, 2006. However, the restricted shares vest in full immediately if (1) Mr. Sturdivant’s employment is terminated without cause, due to death, disability or retirement, or he terminates employment for good reason; or (2) upon a change of control.Pursuant to these provisions, Mr. Sturdivant received a cash payment of approximately $600,000 and 200,000 options worth approximately $485,500 (based on the difference between the exercise price of the option and GPIC’s common stock price of $3.99 per share on August 8, 2003), and 242,131 shares of GPIC restricted stock were converted into restricted stock units convertible into shares of the Company’s common stock.If, during the term of his employment agreement the Company terminates the employment of Mr. Sturdivant without cause or Mr. Sturdivant terminates his employment for good reason, Mr. Sturdivant would be entitled to receive (in addition to accrued amounts), the following amounts and benefits:(1) • the greaterThis amount assumes payout of the amount of his highest bonusamounts under the Company’s bonus plan, or any comparable bonus under any predecessor or successor plan, for the last three full fiscal years, and the annual bonus paid or payable to him under the Company’s short-term incentive plan or plans;MIP at target level. • a lump sum in cash equal to two times:(2) – his highest annual base salary for anyThese amounts represent the maximum value of the past three years;– an amount equal to his highest base salary during any of the past three years multiplied by the highest percentage payout of bonus under a short-term incentive plan paid or accrued during any of the past three years; and– the highest one-year cash equivalent amount of fringe benefits paid in any of the past three years;• welfare benefits for him and his family for two years or, if earlier, until he receives such benefits through subsequent employment; and• outplacement services for one year (with a cost not to exceed $15,000).allowed under the employment agreements.For purposes of Mr. Sturdivant’s employment agreement, a termination is for “cause” if it is due to Mr. Sturdivant’s:• willful and continued failure to perform substantially his duties (other than due to physical or mental illness), after a written demand for substantial performance is delivered; or• willful engagement in illegal conduct or gross misconduct that is materially and demonstrably injurious to the Company.For purposes of Mr. Sturdivant’s employment agreement, a termination is for “good reason” if it is within 90 days of any of the following and without Mr. Sturdivant’s consent:• material diminution of his title, responsibilities and duties;• failure to pay compensation;• failure to pay thegross-up described below;• purported termination of employment otherwise than as expressly permitted by the agreement; or• mandatory relocation, other than in connection with a promotion, of Mr. Sturdivant’s principal office to a location more than 35 miles from the location of such office on August 8, 2003.21If any payments that resulted from the Merger or from the termination of Mr. Sturdivant’s employment without cause or for good reason constitute an excess parachute payment (as defined under Section 280G(b)(2) of the Code), he is entitled to receive a fullgross-up payment to compensate him for the amount of the tax owed.Under the terms of his employment agreement, Mr. Sturdivant is prohibited from engaging in any of the following activities, both during the term of his employment with the Company and for a period of two years thereafter if his employment with the Company is terminated for any reason before the end of the three-year term:• directly or indirectly owning, managing, operating, lending money to or participating in the ownership, management, operation or control of, or serving as a director, officer, employee, partner, consultant, agent or independent contractor with a business or organization in the printing and packaging business in a capacity that assists such competitor in a material respect in the printing and packaging business in the geographic areas where the Company or any of its subsidiaries or affiliates operate;• owning a controlling interest in a business that competes in a material respect in the printing or packaging business in the geographic areas where the Company or any of its subsidiaries or affiliates operate; or• soliciting or interfering with the Company’s suppliers, customers or employees or any of its subsidiaries or affiliates.The employment agreement provides, however, that Mr. Sturdivant will not be in violation of the foregoing by virtue of the fact that he owns 5% or less of the outstanding common stock of a corporation, if such stock is listed on a national securities exchange, is reported on NASDAQ or is regularly traded in theover-the-counter market.
2622for so long as Stephen M. Humphrey serves as the Chief Executive Officer the Stockholders Agreement provides that he will be nominated for election to the Board at any meeting of the stockholders at which Directors of his class are to be elected.and Mr. Botta serves on the Board as EXOR’s designee.designee and David W. Scheible, the Company’s current Chief Executive Officer serves on the Board. At such time as Mr. Humphrey is no longer Chief Executive Officer, he will similarly resign upon receipt of notice from the Nominating and Corporate Governance Committee and, in any event, no later than 120 days after ceasing to serve as Chief Executive Officer.of Mr. Humphrey (for so long as he isthe Chief Executive Officer)Officer and each of the parties’ designees to the Board, and to take all other steps within such stockholder’s power to ensure that the composition of the Board is as contemplated by the Stockholders Agreement. As long as the Coors family representative, the CD&R Fund or EXOR, as the case may be, has the right to designate a person for nomination for election to the Board, at any time at which the seat occupied by such party’s designee becomes vacant as a result of death, disability, retirement, resignation, removal or otherwise, such party will be entitled to designate for appointment by the remaining Directors an individual to fill such vacancy and to serve as a Director.theindependent Directors designated by the CD&R Fund and the Coors family representative and one independent Director.Director or such other members as the CD&R designee and the Coors family representative shall mutually agree. Each member of the Audit Committee shall meet the requirements for membership of an Audit Committee under applicable law and exchange listing requirements. The Audit Committee will have the authority, at its discretion, to invite the Director designated by EXOR to attend meetings of the Audit Committee as a non-voting observer.Director.Director or such other members as the CD&R designee and the Coors family representative shall mutually agree. None of the Company’s employees (other than Mr. Coors) will serve on this committee. The Director designated
27Directors.Directors or such other members as the CD&R designee and the Coors family representative shall mutually agree. None of the Company’s employees (other than Mr. Coors) will serve on this committee.23Transfer Restrictions. The parties to the Stockholders Agreement had agreed not to transfer any of the Company’s shares of common stock during the restricted period (defined below), except for transfers to certain affiliated permitted transferees that agreed to be bound by the Stockholders Agreement, and a sale to the public pursuant to an effective registration statement filed under the Securities Act of 1933 (the “Securities Act”). The “restricted period” began on August 8, 2003 and ended on February 8, 2005.effectaffect the registration under the Securities Act of all or part of such holders’ registrable securities. Upon receiving such request, the Company is required to give prompt written notice of such requested registration to all holders of registrable securities and to use its reasonable best efforts to effectaffect the registration under the Securities Act of 1933, as amended, of all registrable securities that the Company has been requested to register. After the expiration of 180 days after the closing of an initial secondary offering, holders of 5% or more of the Company’s outstanding shares of common stock may again request that the Company effectaffect the registration under the Securities Act of all or part of such holders’ registrable securities.effectaffect registration of registrable securities, the Company is not required to effect such registration if such requests relate to less than 15% of the outstanding shares of common stock or, without the approval of the Board, more than 25% of the outstanding shares. Any request for registration of registrable securities after the first two requests will be subject to a minimum offering size of 5% of the outstanding shares of the Company’s common stock. The Company will pay all expenses in connection with the first four successfully effected registrations requested. The Amended and Restated Registration Rights Agreement also provides that, with certain exceptions, the parties thereto have certain incidental registration rights in the event that the Company at any time proposes to register any of its equity securities and the registration form to be used may be used for the registration of securities otherwise registrable under the Amended and Restated Registration Rights Agreement.
28242005,2006, other than payments earned by Mr. Conway for service as a Director, which Mr. Conway assigned to CD&R.If payment on the note is not made when due, the payment will bear interest, payable on demand, equal to 5.93% per year. The note will be forgiven and will not have to be repaid if, on or before March 26, 2007, Mr. Humphrey terminates his employment for “good reason,”repaid the Company terminates Mr. Humphrey’s employment without “cause” or because of his “disability,”loan in each case as definedfull in his employment agreement, or Mr. Humphrey’s employment terminates because of his death. As of April 1, 2006, $5.0 million remained outstanding under the note.March 2007.Directorsdirectors and the modification or renewal of any such existing personal loans. The Company has not granted any new personal loans to or for the benefit of the executive officers or Directorsdirectors or modified or renewed the loan to Mr. Humphrey since the effective date of such provision.H.J. Coors, Melissa E. Coors and Christian Coors Ficeli are co-trusteesdirectors of one or moreAdolph Coors Co., LLC, a Wyoming limited liability company that serves as the sole trustee of seven of the Coors family trusts. Collectively, William K. Coors, Jeffrey H. Coors, the Coors family trusts and along with Holland Coors, are co-trustees of the Adolph Coors Foundation. Collectively, these individuals, the family trusts and the foundationFoundation own approximately 31% of the Company’s outstanding common stock. In addition, one of those trusts owns approximately 30% of the voting common stock of Molson Coors Brewing Company (formerly, the Adolph Coors Company) and a related entity owns 100% of CoorsTek, Inc. (“CoorsTek”).and Peter H. Coors and William Grover Coors are brothers. Jeffrey H. Coors is the Company’s ExecutiveVice Chairman and a member of the Board and of the Board of Directors of the Company’s subsidiaries, GPI Holding, Inc. andsubsidiary Graphic Packaging International, Inc. J. BradfordTimothy I. Coors is the son of Jeffrey H. Coors and an employee of the Company. J. Bradford Coors and Douglas M. Coors are the sons of Joseph Coors, Jr., and an employeeemployees of CoorsTek. Melissa E. Coors and Christian Coors Ficeli are Peter H. Coors’ daughters and employees of Molson Coors Brewing Company. Peter G. Coors is the son of Peter H. Coors and an employee of Coors. Peter J. Coors is the son of Peter H. Coors and an employee of Molson Coors Brewing Company. William K. Coors isserved as a Director Emeritus on the Company’s Board.Board until March 13, 2007. Peter H. Coors is an executive officer and Directordirector of Molson Coors Brewing Company. John K. Coors is an executive officer and Directordirector of CoorsTek. The Company, Molson Coors Brewing Company
2925Jeffrey H. Coors’ son, Timothy Coors, is an employee of the Company working at its facility in Ft. Smith, Arkansas. In 2005, Mr. Timothy Coors’ compensation totaled $68,400.new supply agreement, effective April 1, 2004, with Coors Brewing Company (now a subsidiary of Molson Coors Brewing Company) that expires on December 31, 2006.2007. The Company continues to sell packaging products to Coors Brewing Company; such sales accounted for approximately $84.3$74.0 million of the Company’s consolidated net sales for the year ended December 31, 2005.2006.inof Golden Properties, Ltd., a limited partnership in which Coors Brewing Company is the limited partner. Before the Merger, Golden Equities, Inc. was a subsidiary of GPIC. The partnership owns, develops, operates and sells certain real estate previously owned directly by Coors Brewing Company or Adolph Coors Company. Coors BrewingAs of December 31, 2006, the Company owed Golden Properties, Ltd. approximately $2.7 million of debt and accrued interest. The Company received a cash distribution of $484,000capital of $2.4 million in March 2006.2006, as well as approximately $400,000 as a distribution of earnings.effectaffect the spin-off and contractually provided for the distribution of the CoorsTek common stock to GPIC’s stockholders, the allocation to CoorsTek of certain assets and liabilities and the transfer to and assumption by CoorsTek of those assets and liabilities. In the distribution agreement, CoorsTek agreed to repay all outstanding intercompany debt owed by CoorsTek to GPIC together with a special dividend. The total amount of the repayment and the special dividend was $200 million. Under the distribution agreement, GPIC and CoorsTek each agreed to retain, and to make available to the other, books and records and related assistance for audit, accounting, claims defense, legal, insurance, tax, disclosure, benefit administration and other business purposes. CoorsTek also agreed to indemnify GPIC if the CoorsTek spin-off is taxable under certain circumstances or if GPIC incurred certain liabilities. The tax sharing agreement defines the parties’ rights and obligations with respect to deficiencies and refunds of federal, state and other taxes relating to the CoorsTek business for tax years preceding the CoorsTek spin-off and with respect to certain tax attributes of CoorsTek after the CoorsTekspin-off.REPORT OF THE COMPENSATION AND BENEFITS COMMITTEEThe main responsibilities of the Compensation and Benefits Committee are to establish the Company’s general compensation philosophy, to oversee the development and implementation of compensation programs and to balance appropriately the competing factors that influence management compensation. These factors include pay for performance, short-term and long-term focus, and internal and external measures of success. An increasingly important aspect of the program is the retention of key executives in an extremely challenging business environment. The goal is a program that drives stockholder value and encourages key members of management to remain with the Company.The Compensation and Benefits Committee independently retains a compensation consultant to assist the committee in its deliberations regarding executive compensation. The consultant provides market data and assists in program design.26Elements of the Executive Pay ProgramThe three key elements of the Company’s executive compensation program, as well as the compensation philosophy for each element are discussed below.Salary. The Compensation and Benefits Committee sets executive salaries between the 50th and 75th percentiles of a general industry peer group composed of manufacturing companies of a similar size to the Company. The decision to set salaries at up to the 75th percentile reflects the fact that bonus payouts under the short-term incentive plan require significant improvements in performance. This is discussed further below.Actual changes to base salaries occur on a non-regular basis that is generally at least 12 months after the most recent prior adjustment for the individual. Base salary changes take into account market data for similar positions, the executive’s experience and time in position, any changes in responsibilities and individual performance.Short-Term Incentives. The Company’s short-term incentive plan, the Management Incentive Plan (the “MIP”) provides cash awards based upon the accomplishment by the Company of performance thresholds established at the beginning of each year. The Compensation and Benefits Committee sets performance goals that require superior performance when compared to similar companies, and analysis indicates that in prior years, goals have been set at or above the 75th percentile of industry performance. As a result, should the Company reach its goals, the plan will pay at approximately the 75th percentile of the market in base salary plus bonus. Should the Company fail to reach the goals, however, the MIP will pay out to a lesser degree. Payouts are discretionary if the threshold goals are not met.For 2005, target payout amounts under the MIP were established based on the Company’s achievement of earnings before interest expense, income taxes, depreciation, amortization and other non-cash charges (“EBITDA”) and free cash flow performance thresholds. Under the MIP for 2005, EBITDA was weighted 67% and free cash flow was weighted 33%. The Company did not achieve its EBITDA or free cash flow performance thresholds for 2005. Based on the performance of the Company’s executives in managing an extremely difficult operating environment and given retention concerns, however, the Compensation and Benefits Committee decided to award discretionary payouts equal to 50% of target payout amounts to each of the Named Executive Officers.Payouts under the MIP for 2006 will be determined based solely on the Company’s achievement of EBITDA. To encourage management to fully attain its 2006 performance goals, the Compensation and Benefits Committee increased the threshold amount at which payments under the MIP will begin to be earned from 85.0% to 93.4% of the plan amount.Long-Term Incentives. During 2004, the Compensation and Benefits Committee developed a new long-term incentive program under the Graphic Packaging Corporation 2004 Stock and Incentive Compensation Plan (the “2004 Plan”) designed to meet various goals, including paying for performance, aligning the long-term interests of management with stockholders and promoting an ownership mindset. The program provides flexibility to the Compensation and Benefits Committee to assess the Company’s performance and reward outstanding achievements by management. No long-term incentive grants were made during 2004 as the program was being developed.In March 2005, the Compensation and Benefits Committee approved grants of restricted stock units to members of management under the 2004 Plan. These grants, which were the only long-term incentive grants made during 2005, made up the first portion of a long-term incentive program comprised of restricted stock units that vest over a period of service (the “Service RSUs”) and additional restricted stock units that the Compensation and Benefits Committee intends to grant in mid-2006 if the Company meets certain performance metrics (“Performance RSUs”). Together, the Service RSUs and the Performance RSUs are intended to provide a long-term incentive award at approximately the 50th percentile of the Company’s peer group, subject to upward and downward adjustment by the Compensation and Benefits Committee at the time of the Performance RSU grants based upon the Company’s actual performance.27The Service RSUs granted vest in three equal increments on the first, second and third anniversary of the date of grant and are payable 50% in shares of the Company’s common stock and 50% in cash two years thereafter upon the termination of a mandatory holding period. The Performance RSUs, if granted as originally planned, will vest in full on the second anniversary of the date of grant and are payable 50% in shares of the Company’s common stock and 50% in cash two years thereafter upon the termination of a mandatory holding period.Messrs. Coors, Scheible and Sturdivant did not receive any restricted stock unit awards in 2005 because, in connection with the Merger, each had previously received a three-year award of restricted stock units under the 2003 Riverwood Holding, Inc. Long-Term Incentive Plan to replace prior long-term incentive awards made at GPIC. Mr. Humphrey also did not receive an award of restricted stock units in 2005, as the Compensation and Benefits Committee was still in the process of evaluating and establishing a comprehensive compensation plan for Mr. Humphrey.PerquisitesExecutives are provided perquisites as part of the Company’s overall executive compensation program. These perquisites generally include reimbursements for financial counseling and tax preparation, an annual executive physical, social club membership fees and, if appropriate, perquisites related to relocation. Certain executive officers, including Messrs. Coors, Scheible and Sturdivant are provided different perquisites as stipulated in their employment agreements. These perquisites include flexible perquisite and car allowances, and additional executive life insurance.Basis for Chief Executive Officer CompensationDuring 2005, the Company paid Mr. Humphrey $1,000,000 in salary pursuant to the terms of his employment agreement dated March 31, 2003. Mr. Humphrey’s base salary was determined when the contract was signed, and is slightly above the 75th percentile of the general industry manufacturing market for companies near the Company’s size (per the Company’s executive compensation philosophy as noted above.) The Company also paid Mr. Humphrey a discretionary cash bonus of $500,000 for 2005. As discussed above underShort-Term Incentives, such discretionary bonus was paid based on Mr. Humphrey’s performance in managing the Company in an extremely difficult operating environment, although the Company did not achieve its pre-established performance thresholds.For 2006 and future years, Mr. Humphrey’s contract sets his target bonus at 100% of base salary, with a maximum bonus opportunity equal to 200% of base salary. The total of Mr. Humphrey’s base salary and target bonus is at the 75th percentile of the market.No long-term incentive grants were made to Mr. Humphrey in 2005. However, during the fourth quarter of 2005 and the first months of 2006, the Compensation and Benefits Committee spent considerable time considering Mr. Humphrey’s overall compensation arrangements. With the assistance of a compensation consultant and legal counsel, the Compensation and Benefits Committee considered Mr. Humphrey’s past and anticipated future compensation and retirement benefits, including the $5 million loan the Company had previously made to Mr. Humphrey, which is due in 2007. Based upon Mr. Humphrey’s accomplishments in leading the Company through extraordinarily challenging times, including rapid inflation of input costs due to the unexpected rise in petroleum prices, and the desire to retain Mr. Humphrey’s services, the Committee concluded that Mr. Humphrey should be granted an increase in annual salary to $1,050,000 (effective November 2005) and a grant of 143,678 restricted stock units. In addition, the Board determined that an additional retirement benefit, payable only if Mr. Humphrey continues his employment through the expiration of his current employment agreement, was an appropriate method to reward and retain Mr. Humphrey. Accordingly, in early April 2006, the independent members of the Board of Directors, acting upon the recommendation of the Compensation and Benefits Committee, established the Graphic Packaging International, Inc. Supplemental Executive Pension Plan for Mr. Humphrey. Pursuant to this plan, Mr. Humphrey will receive a benefit equal to the amount that he would be paid for an additional 22 years of service under the Employees Retirement Plan, up to a maximum of $5 million. Such benefit is to be paid in a lump sum28payment on March 31, 2007, if Mr. Humphrey continues to be employed by the Company or one of its affiliates through such date.Income Tax Deductibility of Executive CompensationSection 162(m) of the Internal Revenue Code (the “Code”) limits the deductibility of certain executives’ compensation that exceeds $1 million per year, unless the compensation is paid under a performance-based plan, as defined in the Code, which has been approved by stockholders. The Company has obtained stockholder approval of the 2004 Plan. However, because the Compensation and Benefits Committee’s policy is to maximize long-term stockholder value, tax deductibility is only one factor considered in setting compensation.SummaryWe believe that the policies and programs described in this report appropriately balance the various factors that influence management compensation in a manner that serves the best interests of the Company’s stockholders. The Compensation and Benefits Committee regularly tests the Company’s executive pay plans and policies and will modify them as necessary to continue to achieve the appropriate balance of factors.John D. Beckett (Chairman)G. Andrea BottaWilliam R. FieldsHarold R. Logan, Jr.(Chairman), Botta, Fields and Logan wereare the members of the Compensation and Benefits Committee until July 2005, when Mr. Fields joined the Committee. None of the current members of the Compensation and Benefits Committee is or during 20052006 was an officer or employee of the Company or any of its subsidiaries.subsidiary. Mr. Coors, the Company’s ExecutiveVice Chairman, serves on the Board of Directors of R.W. Beckett Corporation. Mr. Beckett is the Chairman of the R.W. Beckett Corporation. The Company did no business with R.W. Beckett Corporation in 20052006 and does not anticipate doing any business with R.W. Beckett Corporation in 2006.29TOTAL RETURN TO STOCKHOLDERSThe following graph compares the total returns (assuming reinvestment of dividends) of the Company’s common stock, the Standard & Poor’s 500 Stock Index and the Dow Jones U.S. Container & Packaging Index. The graph assumes $100 invested on August 11, 2003 (the first day of public trading in the Company’s common stock) in the Company’s common stock and each of the indices. The stock price performance on the following graph is not necessarily indicative of future stock price performance.
08/11/03 12/31/03 12/31/04 12/31/05 Graphic Packaging Corporation $ 100.00 $ 99.02 $ 175.61 $ 55.61 S&P 500 Index $ 100.00 $ 114.21 $ 126.63 $ 132.85 DJ U.S. Container & Packaging Index $ 100.00 $ 118.85 $ 140.22 $ 137.50
30and Director-nominee, (iii) each Named Executive Officer and (iv) the Directors and executive officers as a group. Unless otherwise noted, such information is provided as of April 1, 20062007 and the beneficial owners listed have sole voting and investment power with respect to the number of shares shown. An asterisk in the percent of class column indicates beneficial ownership of less than one percent. Number of Shares Percentage 51,211,864 25.77 % 64,025,627 31.89 % 62,103,999 31.25 % 34,222,500 17.22 % 34,222,500 17.22 % 11,291,400 5.68 % 10,545,400 5.31 % 6,988,311 3.40 % 73,265 * G. Andrea Botta 5,264 * Kevin J. Conway 0 * William R. Fields 0 * 39,728 * John R. Miller 23,167 * Robert W. Tieken 21,207 * 378,327 * 346,270 * 247,911 * 73,441,643 35.00 % Number of Shares Percentage Grover C. Coors Trust(1) 51,211,864 25.50 % Jeffrey H. Coors(1)(2) 64,071,970 31.62 % Clayton, Dubilier & Rice Fund V Limited Partnership(3) 34,222,500 17.04 % EXOR Group S.A.(4) 34,222,500 17.04 % HWH Investment Pte. Ltd.(5) 10,545,400 5.25 % Stephen M. Humphrey(6) 5,896,730 2.86 % John D. Beckett(7) 81,426 * G. Andrea Botta(8) 68,991 * Kevin J. Conway 0 * William R. Fields 11,799 * Harold R. Logan, Jr.(9) 51,527 * John R. Miller 34,966 * Robert W. Tieken 33,006 * Daniel J. Blount(10) 378,954 * David W. Scheible(11) 403,954 * Michael R. Schmal(12) 458,211 * All Directors and executive officers as a group (16 persons)(13) 72,540,556 34.56 % (1) Under the trust agreement evidencing the Grover C. Coors Trust (the “Coors Trust”), the affirmative vote of a majority of the trustees is required to determine how shares of stock held by the Coors Trust will be voted or to dispose of any shares of stock held by the Coors Trust; therefore, none of the trustees of the Coors Trust is deemed to have beneficial ownership of shares held by the Coors Trust by virtue of the trust agreement (although Jeffrey H. Coors and William K. Coors are deemed to have beneficial ownership of the shares held by the Coors Trust pursuant to the Stockholders Agreement). The trustees of the Coors Trust are William K. Coors, Jeffrey H. Coors, John K. Coors, Joseph Coors, Jr. and Peter H. Coors. The business address for the Grover C. Coors Trust is Coors Family Trusts, Mailstop VR 900, Post Office Box 4030, Golden, Colorado 80401.(2)Pursuant to the Stockholders Agreement, certain members of the Coors family and related trusts that are parties thereto, including the Grover C. Coors Trust, Jeffrey H. Coors and William K. Coors, have designated and appointed Jeffrey H. Coors and, in case of his inability to act, William K. Coors as theirattorney-in-fact to perform all obligations under the Stockholders Agreement, including but not limited to, voting obligations with respect to the election of directors. The parties to the Stockholder Agreement retain voting power with regard to all other matters and sole dispositive power over such shares. The business address for William K. Coors and Jeffrey H. Coors is Graphic Packaging Corporation, 814 Livingston Court, Marietta, Georgia 30067.31(3)(2)The amount shown includes (i) 53,429 shares held in joint tenancy with spouse, (ii) 104,848140,848 stock units held in the Company’s 401(k) savings plan, (iii) 250 shares held by GPIC’s Payroll Stock Ownership Plan, (iv) 500 shares held by Jeffrey H. Coors Family, Ltd., (v) 1,726,652 shares held by the May Kistler Coors Trust dated September 24, 1965, as to which Jeffrey H. Coors has voting and investment power with William K. Coors, Joseph Coors, Jr., John K. Coors and Peter H. Coors, as co-trustees, (vi) 30,000 shares held by Mr. Coors’ wife, and (vii) an aggregate of 59,672,62361,552,966 shares attributable to Mr. Coors solely by virtue of the Stockholders Agreement. The amount shown also includes 1,603,489 shares subject to stock options exercisable within 60 days and 445,043 restricted stock units187,120 RSUs that are vested within 60 days.(4)The amount shown includes (i) 153,691 shares held by Mr. William Coors’ spouse, (ii) 1,726,652 shares held by the May Kistler Coors Trust dated September 24, 1965, as to which William K. Coors has voting and investment power with Jeffrey H. Coors, Joseph Coors, Jr., John K. Coors and Peter H. Coors, as co-trustees, and (iii) an aggregate of 60,220,443 shares attributable to Mr. Coors solely by virtue of the Stockholders Agreement. The amount shown also includes 3,213 shares subject to stock options exercisable within 60 days.(5)(3)Associates V is the general partner of the CD&R Fund and has the power to direct the CD&R Fund as to the voting and disposition of its shares of the Company’s common stock. Associates II is the managing general partner of Associates V and has the power to direct Associates V as to its direction of the CD&R Fund’s voting and disposition of shares. No person controls the voting and dispositive power of Associates II with respect to the shares owned by CD&R. Each of Associates V and Associates II expressly disclaims beneficial ownership of the shares owned by the CD&R Fund. The business address for each of
31the CD&R Fund, Associates V and Associates II is 1403 Foulk Road, Suite 106, Wilmington, Delaware 19803. (6)(4)Giovanni Agnellie C.S.A.P.A.Z., an Italian company, is the beneficial owner of more than 60%essentially all of the equity interests of EXOR Group S.A. The business address for EXOR Group S.A. is22-24, Boulevard Royal, L-2449 Luxembourg. (7)The business address for The 1818 Fund II, L.P. is c/o Brown Brothers Harriman & Co., 140 Broadway, 16th Floor, New York, NY 10005.(8)(5)The beneficial owner of HWH Investment Pte. Ltd. is Government of Singapore Investment Corporation (Ventures) Pte Ltd, which is beneficially owned by Minister for Finance Inc. of the Government of Singapore. The business address for HWH Investment Pte. Ltd. is 250 North Bridge168 Robinson Road, #37-01 Capital Tower, Singapore 179101, Republic of Singapore.068912. The number of shares beneficially owned is as of December 31, 2005 according to Amendment No. 1 to Schedule 13G/A filed with the SEC on February 14,15, 2006. (9)(6)The amount shown includes 6,798,1865,500,176 shares subject to stock options exercisable within 60 days and 114,075 restricted stock units177,660 RSUs that are vested within 60 days. (10)The amount shown includes 5,638 shares subject to stock options exercisable within 60 days.(11)(7)The amount shown includes 2,000 shares subject to stock options exercisable within 60 days. (12)(8)The amount shown includes 4,23563,727 RSUs that are vested within 60 days, although such RSUs are not payable until Mr. Botta’s retirement as a director of the Company(9) The amount shown includes 2,000 shares subject to stock options exercisable within 60 days. (10) The amount shown includes 189,304 shares subject to stock options exercisable within 60 days and 34,249 RSUs that are vested within 60 days. (11) The amount shown includes 4,253 stock units held in the Company’s 401(k) savings plan, 163,710 shares subject to stock options exercisable within 60 days and 210,382 restricted stock units54,379 RSUs that are vested within 60 days. (13)(12)The amount shown includes 189,304210,492 shares subject to stock options exercisable within 60 days and 111,336 restricted stock units43,718 RSUs that are vested within 60 days. (14)(13)The amount shown includes 2,851 stock units held in the Company’s 401(k) savings plan, 82,7658,330,502 shares subject to stock options that are exercisable within 60 days and 161,420 restricted stock units705,596 RSUs that are vested within 60 days.(15)The amount shown includes 9,714,915 shares subject to stock options exercisable within 60 days and 1,432,579 restricted stock units that are vested within 60 days.3220052006 and Form 5 and amendments thereto furnished to the Company with respect to 2005,2006, and written representations from the Company’s reporting persons, the Company believes that the its officers, Directors and beneficial owners have complied with all filing requirements under Section 16(a) applicable to such persons.the Securities Act or the Exchange Act, and it is not to be otherwise deemed filed under either such Act.whichwhom is an “independent director,” as defined by Section 303A of the NYSE Listed Company Manual. Each of the members of the Audit Committee is financially literate and each qualifies as an “audit committee financial expert” under federal securities laws. The Audit Committee’s purposes are to assist the Board in overseeing: (a) the quality and integrity of our financial statements; (b) the qualifications and independence of our independent auditors; and (c) the performance of our internal audit function and independent auditors. • reviewed and discussed the audited financial statements with management;
32 • discussed with the independent auditors the matters required to be discussed with audit committees by the Statement on Auditing Standards No. 61, as amended, as adopted by the Public Company Accounting Oversight Board in Rule 3200T; and • received the written disclosures and the letter from our independent auditors required by Independence Standards Board Standard No. 1, as adopted by the Public Company Accounting Oversight Board in Rule 2600T, and has discussed with theour independent auditors their independence.2005.2006.
Harold R. Logan, Jr.
John R. Miller20052006 and December 31, 20042005 by our independent auditors, PricewaterhouseCoopers LLP (“PWC”), are as follows: Year Ended Year Ended December 31, December 31, 2005 2004 2006 2005 (In millions) (In millions) Audit Fees $ 5.2 $ 3.8 $ 3.2 $ 5.2 Audit-Related Fees 0.1 0.3 — 0.1 Tax Fees 0.1 0.0 — 0.1 All Other Fees 0.0 0.1 — 0.0 Total $ 5.4 $ 4.2 $ 3.2 $ 5.4 3320052006 and December 31, 2004,2005, for the reviews of the financial statements included in our quarterly reports onForm 10-Q during 20052006 and 2004,2005, and for services that are normally provided by the independent auditors in connection with statutory and regulatory filings or engagements for the relevant fiscal years.Fees”Fees,” or “Tax Fees.”PWCPricewaterhouseCoopers as well as the fees charged for such services. The Audit Committee may delegate pre-approval authority for such services to one or more members, whose decisions are then presented to the full Audit Committee at its scheduled meetings. In 20042006 and 2005, all of the audit and non-audit services provided by our independent public accountant were pre-approved by the Audit Committee in accordance with the Audit Committee Charter.
332006.2007. PWC has served continuously in such capacity since June 2002.3420072008 annual meeting of stockholders, and you wish to have the proposal included in the proxy statement for that meeting, you must submit the proposal in writing to the Company’s Corporate Secretary at 814 Livingston Court, Marietta, Georgia 30067. The Corporate Secretary must receive this proposal no later than December 12, 2006.18, 2007.20072008 annual meeting of stockholders, without including the proposal in the proxy statement, or if you want to nominate one or more Directors, you must provide written notice to the Company’s Corporate Secretary at the address above. The Corporate Secretary must receive this notice not earlier than January 17, 2007,15, 2008, and not later than February 16, 2007.14, 2008. However, if the date of the 20072008 annual stockholders meeting is advanced by more than 30 days or delayed by more than 70 days from the anniversary date of the Annual Meeting, then such proposal must be submitted by the later of the 90th90th day before such Annual Meeting or the 10th10th day following the day on which public announcement of the date of such meeting is first made.
34 • as to each proposed nominee for election as a Director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of Directors, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act andRule 14a-8 thereunder, including such person’s written consent to being named in the proxy statement as a nominee and to serving as a Director if elected; • as to any other proposal, a brief description of the proposal (including the text of any resolution proposed for consideration), the reasons for such proposal and any material interest in such proposal of such stockholder and of any beneficial owner on whose behalf the proposal is made; and • as to the stockholder giving the notice and any beneficial owner on whose behalf the nomination or proposal is made: –• the name and address of such stockholder and beneficial owner, as they appear on the Company’s books; –• the class and number of shares of the Company’s common stock that are owned beneficially and of record by such stockholder and such beneficial owner; –• a representation that the stockholder is a holder of record of the Company’s common stock entitled to vote at such meeting and intends to appear in person or by proxy at the meeting to propose such business or nomination; and –• a representation whether the stockholder or the beneficial owner, if any, intends or is part of a group that intends: (a) to deliver a proxy statementand/or form of proxy to holders of at least the percentage of the Company’s outstanding capital stock required to approve or adopt the proposal or elect the nominee;and/or (b) otherwise to solicit proxies from stockholders in support of such proposal or nomination. will be presented at the meeting as were brought before the meeting in accordance with the procedures described above.above will be presented at the meeting. Except as otherwise provided by law, the Company’s Restated Certificate of Incorporation or Amended and Restated By-Laws, the Chairman of the35Annual Meetingannual meeting of stockholders to present the nomination or proposal, notwithstanding that the Company may have received proxies with respect ofto such vote.
3520052006 Annual Report to Stockholders accompanies this Proxy Statement. The Company’s Annual Report onForm 10-K for the fiscal year ended December 31, 20052006 is included in the Annual Report to Stockholders and is available without charge upon written request addressed to Graphic Packaging Corporation, Investor Relations, 814 Livingston Court, Marietta, Georgia 30067. The Company will also furnish any exhibit to the Annual Report onForm 10-K for the fiscal year ended December 31, 2005,2006, if specifically requested.7, 200617, 2007
36
ANNUAL MEETING OF STOCKHOLDERS16, 200615, 2007
10:00 a.m. (local time)WYNDHAM VININGSRENAISSANCE WAVERLY HOTEL2857 Paces Ferry Road2450 Galleria Parkway
Atlanta, Georgia 30339
Graphic Packaging CorporationGraphic Packaging Corporation
814 Livingston Court, Marietta, Georgia 30067 proxy 20, 2006,19, 2007, with all of the powers which the undersigned would possess if personally present at the Annual Meeting of Stockholders of Graphic Packaging Corporation (the “Company”), to be held at 10:00 a.m. (local time) on May 16, 2006,15, 2007, at the Wyndham ViningsRenaissance Waverly Hotel, located at 2857 Paces Ferry Road,2450 Galleria Parkway, Atlanta, Georgia 30339, or any adjournment thereof.THlSTHIS PROXY BY PHONE OR INTERNET, OR BY MARKING, DATING, SIGNING AND RETURNING THlSTHIS PROXY CARD IN THE ACCOMPANYING ENVELOPE. TO VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS’ RECOMMENDATIONS, SIGN ON THE REVERSE SIDE. NO BOXES NEED TO BE CHECKED.COMPANY #—– TOLL FREE —– 1-800-560-1965 —– QUICK *** EASY *** IMMEDIATE• Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a week, until 12:00 p.m. (CT) on May 15, 2006.14, 2007. • Please have your proxy card and the last four digits of your Social Security Number or Tax Identification Number available. Follow the simple instructions the voice prompt provides you. —– http://www.eproxy.com/gpk/ —– QUICK *** EASY *** IMMEDIATE• Use the Internet to vote your proxy 24 hours a day, 7 days a week, until 12:00 p.m. (CT) on May 15, 2006.14, 2007. • Please have your proxy card and the last four digits of your Social Security Number or Tax Identification Number available. Follow the simple instructions to obtain your records and create an electronic ballot.
òPlease detach hereò 1. Election of directors: 01 G. Andrea BottaKevin J. Conway o Vote FOR o Vote WITHHELD from 02 William R. FieldsJeffrey H. Coors all nominees from all nominees 03 Harold R. Logan, Jr.Robert W. Tieken (except as marked) (Instructions: To withhold authority to vote for any indicated nominee, write the number(s) of the nominee(s) in the box provided to the right.)
write the number(s) of the nominee(s) in the box provided to the right.) Address Change? Mark Box o Indicate changes below: Date Address Change? Mark Box o Indicate changes below: Date Signature(s) in Box Please sign exactly as your name(s) appears on Proxy. If held in joint tenancy, all persons should sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the proxy.