July 24, 2012

Kristopher J. Matula
9474 Fox Hill Circle N.
Germantown, TN 38139

 
Re: Separation Agreement

Dear Mr. Matula:
 
As has been mutually agreed upon by you and Buckeye Technologies Inc. (the
“Company”), your employment with the Company will cease effective August 31,
2012 (the “Termination Date”). This Separation Agreement (the “Agreement”) sets
forth the conditions of your termination of employment with the Company and its
affiliates and the associated compensation and benefits which you will be
provided.

I.           Termination of Employment

1.  
Your last day of active employment will be the Termination Date. In anticipation
of your departure, you will be deemed to have resigned from any and all officer
positions with the Company and any subsidiaries or affiliates of the
Company, effective at the close of business on August 7, 2012.  You will also be
deemed to resign from the Board of Directors of the Company and from any
position you hold on the boards of directors and boards of managers of any
subsidiaries or affiliates of the Company, effective at the close of business on
August 7, 2012.

2.  
All restricted stock granted to you under the Buckeye Technologies Inc.
Restricted Stock Plan, will be forfeited on the Termination Date with no further
compensation due to you.

3.  
Your active health care coverage will go through the end of the month in which
your Termination Date occurs. At the end of this period you will be responsible
for maintaining COBRA continuation coverage, if you choose to continue in the
plan.

 
 
4.  
You will be paid any salary and other compensation due through the Termination
Date (including (a) any unpaid portion of the bonus you are entitled to under
the All-Employee Bonus Plan for the fiscal year ended June 30, 2012, (b) any
unpaid portion of the bonus you would have been entitled to under the At Risk
Compensation Bonus Plan with respect to the fiscal year ended June 30, 2012, as
if you had remained employed through the date payments are made pursuant to such
plan, such amount, if any, to be paid at the time bonuses under such plan would
be paid to other active participants and (c) any unpaid portion of the amount
you would have been entitled to under the Retirement Replacement Plan with
respect to the fiscal year ended June 30, 2012, as if you had remained employed
through the date payments are made pursuant to such plan, such amount, if any,
to be paid at the time payments under such plan would be paid to other active
participants) and you will receive an amount which represents your accrued, but
unused, vacation entitlement as of the Termination Date.

5.  
Except as specifically set forth in the Agreement, all other payments and
benefits, including without limitation, your participation in the Buckeye
Technologies Inc. Retirement Replacement Plan and your participation in any
other Company bonus plan, will cease after the Termination Date per normal
procedures.  We will arrange for you to talk with a representative of the Human
Resources Department who will review with you the accrued benefits to which you
are entitled.

 
 

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II.           Separation Benefits and Release of Claims

In light of your past service to the Company and in consideration of your timely
execution of a general release substantially in the form attached as Exhibit A,
which becomes effective within 30 days following the Termination Date (the
“Release”), the Company has agreed to provide you with certain payments and
benefits to which you would not otherwise be entitled.  Please note, if you fail
to timely execute the Release, the terms and conditions detailed in Section I
above will continue to apply, but you will not be entitled to any of the
payments and benefits set forth in this Section II.

You acknowledge that the separation payments and benefits set forth in this
Section II exceed those which the Company is required to provide to terminated
employees.  Accordingly, subject to the timely execution and effectiveness of
the Release, you will receive the following:

1.  
The Company will pay you a lump sum separation payment in the amount of
$970,000, less withholdings required by state and federal laws.  You will be
paid this amount as soon as practicable following the date on which the Release
becomes timely effective.

2.  
Any options granted to you under the Buckeye Technologies Inc. 2007 Omnibus
Incentive Compensation Plan (the “2007 Plan”) on July 20, 2010 and July 26,
2011, which would otherwise be unvested as of the Termination Date, shall become
fully vested and exercisable as of the Termination Date.  All time-vested
restricted stock (but not performance shares), granted to you under the 2007
Plan on July 20, 2010 and July 26, 2011, which would otherwise be unvested as of
the Termination Date, shall become fully vested and free from forfeiture
restrictions as of the Termination Date.

3.  
All of your outstanding options including those that are vested and exercisable
as of the Termination Date, and those which become vested pursuant to Section
II.2 above will, notwithstanding any provision to the contrary in the 2007 Plan,
the Second Amended and Restated 1995 Incentive and Nonqualified Stock Option
Plan for Management Employees of Buckeye Technologies Inc. and/or any option
award agreement, remain outstanding and exercisable until the earlier of: (a)
the second anniversary of the Termination Date or (b) the original expiration
date of such option.

4.  
For the purposes of your Performance Shares awards (as defined under the 2007
Plan), your termination of employment will be treated as a retirement.

 
 
 
*
2010 Performance Shares - As of your Termination Date, 72.35% (793 days of
employment over the 1,096 day vesting period) of the target Performance Shares
awarded to you on July 20, 2010 (the “2010 Performance Shares”) (11,757 shares)
will remain outstanding and will vest and be paid, if at all, based on the
Company’s performance over the three year performance cycle as compared to the
performance targets as set forth in the applicable Performance Award
Agreement.  Payment, if any, will be made at the same time as payment is made to
active employees at the end of such performance cycle.  The remaining 27.65% of
your target 2010 Performance Share award (4,493 shares) will be forfeited as of
the Termination Date with no further compensation due to you.  By illustration,
if the Company’s performance over the applicable performance period results in
50% of the target 2010 Performance Share award being earned, then you will
receive 5,878 shares (11,757 times 50%).

 
*
2011 Performance Shares - As of your Termination Date, 39.05% (428 days of
employment over the 1,096 day vesting period) of the target Performance Shares
awarded to you on July 26, 2011 (the “2011 Performance Shares”) (2,338 shares)
will remain outstanding and will vest and be paid, if at all, based on the
Company’s performance over the three year performance cycle as compared to the
performance targets as set forth in the applicable Performance Award
Agreement.  Payment, if any, will be made at the same time as payment is made to
active employees at the end of such performance cycle.  The remaining 60.95% of
your target 2011 Performance Share award (3,651 shares) will be forfeited as of
the Termination Date with no further compensation due to you.  By illustration,
if the Company’s performance over the applicable performance period results in
50% of the target 2011 Performance Share award being earned, then you will
receive 1,169 shares (2,338 times 50%).

 
 

 
 
 

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5.  
To receive (or to continue to) receive any of the payments or benefits provided
under this Section II, you: (i) must return all Company property upon the
Company’s request, including but not limited to, credit cards, computer, and
office equipment, etc., prior to your Termination Date; and (ii) agree to
continue to abide by the terms of the Non-Compete Agreement between the Company
and you, dated as of October 1, 1999 (the

 
“Non-Compete Agreement”).  Please note if you violate any of the terms of the
Non-Compete Agreement, the Company will have no obligation to continue to pay or
provide any of the amounts or benefits under this Section II.

The payments and benefits provided hereunder are intended to be exempt from
Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”)
as short-term deferrals and accordingly are not subject to the six month delay
under Section 409A.  The payments and benefits provided hereunder will neither
commence or be made, as applicable, until and unless the Release becomes timely
effective within the 30 day period following the Termination Date.  As such
period ends in the current calendar year, payments will be made as set forth
above (in the unlikely event such 30 day period ends in a calendar year after
the year in which the Termination Date occurs, the payments and benefits
provided hereunder shall commence or be made no earlier than the first day of
such later calendar year).

III.           Miscellaneous

The Company may withhold from any amounts payable under this Agreement such
federal, state or local income taxes it determines may be appropriate.

We advise that you consult with an attorney before you sign this Agreement.  It
is understood that any attorney’s fees incurred will be at your expense.  You
hereby acknowledge that you are acting of your own free will, that you have been
afforded a reasonable time to read and review the terms of this Agreement, and
that you are voluntarily executing this Agreement with full knowledge of its
provisions and effects.

By your signature below, you also confirm that you have relied on no promises or
representations made to you by the Company or its affiliates or anyone acting
by, for, or on behalf of the Company or its affiliates in deciding to sign this
Agreement, other than as set forth in this Agreement, and that the only money
and benefits offered in exchange for your signing this Agreement and the Release
are those set forth in this Agreement.

This Agreement may be executed in one or more counterparts each of which shall
be deemed an original instrument, but all of which together shall constitute but
one and the same Agreement.  This Agreement shall be governed by the laws of the
State of Tennessee without regard to the conflict of law principles of any
jurisdiction.

If you agree to these terms, please sign the acknowledgment which appears below
on the enclosed copy of this letter and return it to Sheila Jordan Cunningham,
Senior Vice President and General Counsel.

Sincerely,
BUCKEYE TECHNOLOGIES INC.
 

/s/ Sheila Jordan Cunningham
Sheila Jordan Cunningham
Senior Vice President, General Counsel

 
 
 

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ACKNOWLEDGMENT AND AGREEMENT
 
I have read the foregoing terms and conditions.  I fully understand them and
have had the opportunity to have any questions answered by Company personnel and
to consult with attorneys and advisors of my own choice.  After due
consideration, I hereby accept and agree to all of the terms and conditions set
forth above.

/s/ Kristopher J. Matula
                       Kristopher J. Matula

Date: July 24, 2012

 
 

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EXHIBIT A
General Release
 

IN CONSIDERATION of the payments, benefits, terms and conditions contained in
the Separation Agreement by and between KRISTOPHER J. MATULA (the “Executive”)
and BUCKEYE TECHNOLOGIES INC. (the “Company”), dated July 24, 2012 (the
“Separation Agreement”); and for other good and valuable consideration, the
receipt of which is hereby acknowledged, the Executive, on behalf of himself and
his heirs, executors, administrators, and assigns, hereby fully and
unconditionally releases and discharges the Company, and any entity related to
the Company, in the past or present, including without limitation the Company’s
predecessors, successors, parents, subsidiaries, affiliates and their respective
past or present officers, directors, and employees; any entity providing
insurance in the past or present to the Company, its subsidiaries or affiliates;
and/or any person or entity who acted on behalf of the Company, its subsidiaries
or affiliates or on instructions of the Company, its subsidiaries or affiliates
(collectively the “Releasees”) from any and all claims, losses, liabilities,
demands, causes of action, fees, including attorney’s fees, compensation, back
pay, and/or front pay, employment or re-employment, and any other obligation and
liability, including but not limited to, all causes of action arising out or in
any way related to his employment by the Company or its affiliates, or his
termination of employment, whether arising under Title VII of the Civil Rights
Act of 1964, as amended, the Federal Americans With Disabilities Act, the Age
Discrimination in Employment Act of 1967, as amended, the Tennessee Human Rights
Act, 42 U.S.C. Section 1981, the Family and Medical Leave Act, and/or any other
federal, state or local statute, ordinance, or regulation, or common law
governing employment and employment discrimination, including retaliatory
discharge, actions based on misrepresentation, breach of contract or agreement,
defamation, intentional infliction of emotional distress, wrongful discharge,
discharge in violation of public policy, workers’ compensation retaliation,
invasion of privacy, interference with prospective economic advantage,
interference with contractual relations, negligence, all express, implied or
other warranty claims and any claims directly or indirectly relating to loss or
destruction of evidence, intentional or otherwise (the “Release”).  The
Executive hereby acknowledges that he has received all of the leave from work
for family and/or personal medical reasons and/or other benefits to which he
believes he is entitled under the Company’s policy and the Family and Medical
Leave Act of 1993 (“FMLA”), as amended.  The Company has no pending request for
FMLA leave from the Executive.  The Release is not to be construed as an
admission of any violation of any federal, state or local statute, ordinance or
regulation or of any duty owed by the Company or any of its affiliates to the
Executive; and the Executive hereby acknowledges that there have been no such
violations and the Company has not mistreated him in any way on account of any
illness or injury to him or any member of his family.  The Executive hereby
further acknowledges that he has received all of the monetary compensation,
including hourly wages, salary and/or overtime compensation, to which he
believes he is entitled under the Fair Labor Standards Act, as amended.  This
Release does not apply to (i) any claims which cannot be released by private
agreement, (ii) any of the Company’s obligations to the Executive under any tax
qualified pension plan of the Company, (iii) any rights of the Executive under
any applicable directors’ and officers’ liability insurance policies maintained
by the Company or (iv) amounts due under the Separation Agreement.

Because this Release includes a release and waiver as to rights or claims under
the Age Discrimination in Employment Act, the Executive’s signature below
acknowledges that this Release complies with the Older Worker Benefit Protection
Act of 1990 (“OWBPA”), and further acknowledges that he confirms, understands,
and agrees to the terms and conditions of this Release; that these terms are
written in lay person terms, that he understands the terms of the Release and
that the Executive has been fully advised of his rights to seek the advice and
assistance of consultants, including an attorney, as well as tax advisors, to
review this Release.  The Executive’s signature below also acknowledges that the
Executive does not waive any rights or claims under the Age Discrimination in
Employment Act that may arise after the date this Release is signed by the
Executive.

 
 

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The Executive understands that he has up to twenty-one (21) days to consider
whether to sign this Release.  By executing this Release on the date shown
below, he voluntarily elects to forego any remaining portion of the twenty-one
day waiting period.  The Executive’s  signature also acknowledges that, in
compliance with the OWBPA, he has been fully advised by the Company of his right
to revoke and nullify this Release, which right must be exercised, if at all,
within seven (7) days of the date of his signature. This Release will not become
effective or enforceable until the expiration of the seven day period.  Any
revocation of this Release must be in writing and delivered to the company as
follows:

Sheila Jordan Cunningham
Senior Vice President, General Counsel
Buckeye Technologies Inc.
1001 Tillman Street
P.O. Box 80407
Memphis, Tennessee 38108

THE EXECUTIVE ALSO AFFIRMS THAT HE HAS BEEN FREE TO DISCUSS THIS MATTER
PRIVATELY AND THOROUGHLY WITH AN ATTORNEY OF HIS CHOICE, AND THAT HE FULLY
UNDERSTANDS THE MEANING AND INTENT OF THIS RELEASE, INCLUDING, BUT NOT LIMITED
TO ITS FINAL AND BINDING  EFFECTS.

INTENDING TO BE LEGALLY BOUND, I hereby set my hand below:
 

 
 
_______________________
KRISTOPHER J. MATULA
 
 
Date: _________________________

 
 
 

 
 

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