Partners' Capital (Deficit)

6 Months Ended

Jun. 30, 2011

23.

Partners’ Capital (Deficit)

As part of the IPO, the Graham Family entered into an Exchange Agreement. Under the Exchange Agreement, the Graham Family and certain permitted transferees may, subject to specific terms, exchange their limited partnership units in the Company for shares of GPC’s common stock at any time and from time to time on a one-for-one basis, subject to customary conversion rate adjustments for splits, stock dividends and reclassifications. Under this Exchange Agreement, entities controlled by the Graham Family and certain of their permitted transferees exercised their rights in the first quarter of 2010 to exchange 1,324,900 limited partnership units of the Company for 1,324,900 shares of GPC’s common stock. Additionally, under this Exchange Agreement, entities controlled by the Graham Family and certain of their permitted transferees exercised their rights in January 2011 to exchange 1,766,681 limited partnership units of the Company for 1,766,681 shares of GPC’s common stock, in May 2011 to exchange 1,000,000 limited partnership units of the Company for 1,000,000 shares of GPC’s common stock, and in June 2011 to exchange 839,082 limited partnership units of the Company for 839,082 shares of GPC’s common stock. Holdings issued an aggregate of 1,324,000, 1,766,681, 1,000,000 and 839,082 limited partnership units to GPC in consideration for the corresponding number of limited partnership units surrendered and extinguished as a result of each of such exchanges, respectively. The Company has also entered into Management Exchange Agreements which provide for similar rights to management to exchange limited partnership units of the Company obtained on exercise of outstanding options for shares of GPC’s common stock.

As of June 30, 2011:

•

GPC owns 65,731,352 limited partnership units, representing a 93.3% ownership in the Company, and its wholly-owned subsidiary, BCP/Graham Holdings L.L.C., is the sole general partner and owns 2,023,472 general partnership units, representing a 2.9% ownership in the Company;

•

the Graham Family owns an aggregate of 2,657,358 limited partnership units, representing a 3.8% ownership in the Company; and

•

a former employee owns 35,167 limited partnership units, representing a less than 0.1% ownership in the Company.

The Sixth Amended and Restated Limited Partnership Agreement also provides that for so long as the Graham Family retains at least one-third of their partnership interests held as of February 2, 1998 (or equivalent common stock of GPC for which such partnership interests have been or are eligible to be exchanged), they are entitled to an advisory fee of $1.0 million annually for ongoing management and advisory services.

- Definition

The entire disclosure for the formation, structure, control and ownership of the partnership. Disclosures related to accounts comprising partners' capital. Includes balances of general partners' capital account, limited partners' capital account, preferred partners' capital account and total partners' capital account and units outstanding; accumulated other comprehensive income; amount and nature of changes to amount of partner's capital and units outstanding by class, rights and privileges for each class of units; distribution policies and distributions paid by unit class; impact of and correction of an error in previously issued financial statements; limitations of partners' liability; redemption, conversion and distribution policies; and deferred compensation related to the issuance of units.

+ References+ Details

GRAHAM PACKAGING HOLDINGS CO 10-Q