Exhibit 10.8

 

AMENDED AND RESTATED

EXECUTIVE RETIREMENT AGREEMENT

 

This Amended and Restated Executive Retirement Agreement (the “Agreement”) by
and between Steven J. Klinger (the “Executive”) and Smurfit-Stone Container
Corporation (the “Company”) shall be deemed to have been made and entered into
as of the date of the order of confirmation entered by the United States
Bankruptcy Court for the District of Delaware with respect to the Company’s plan
of reorganization in the matter of In re: Smurfit-Stone Container Corp., Case
No. 09-10235 (BLS) (such cases, the “Chapter 11 Cases” and such plan, the “Plan
of Reorganization”), and shall become effective as of the effective date of the
Plan of Reorganization (the “Effective Date”).

 

WHEREAS, the Executive is and will be rendering valuable services to the Company
and its Affiliates, and the Company desires to receive the benefit of the
Executive’s continued loyalty, service and counsel and to provide the Executive
and/or the Executive’s eligible beneficiaries with benefits in the event of the
Executive’s retirement or death;

 

WHEREAS, the Company and the Executive are parties to that certain Amended and
Restated Employment Agreement effective as of the Effective Date of the
Company’s Plan of Reorganization (the “Employment Agreement”);

 

WHEREAS, the Company and the Executive are parties to the Executive Retirement
Agreement entered into on October 2, 2006, which was amended effective as of
January 1, 2009 (the “Predecessor Retirement Agreement”), which the Company did
not assume pursuant to the Plan of Reorganization; and

 

WHEREAS, the Company and the Executive desire to enter into the Agreement and,
in so doing, to amend and restate the Predecessor Retirement Agreement in its
entirety;

 

NOW, THEREFORE, in consideration of the promises and mutual agreements contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by both parties, the parties hereby
agree as follows:

 

1.                                      Definitions

 

For purposes of this Agreement, the capitalized terms in this Agreement shall
have the meanings set forth below:

 

(a)                                 Actuarial Equivalent.  The term “Actuarial
Equivalent” shall mean a benefit of equivalent value determined using the
“applicable mortality table” and the “applicable interest rate” prescribed under
Section 417(e)(3) of the Code or any successor provision of the Code as of the
November 1 preceding the Plan Year in which the distribution is made.

 

(b)                                 Affiliate.  The term “Affiliate” shall mean
(A) any entity that directly or indirectly, is controlled by the Company,
(B) any entity in which the Company has a significant equity interest, (C) the
parent entity of the Company, and (D) any entity that is

 

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under common control with the Company.  For purposes of this Agreement, an
Affiliate shall be considered an Affiliate only for periods during which the
Affiliate meets this definition of Affiliate.

 

(c)                                  Annuity Equivalent.  The term “Annuity
Equivalent” of a given benefit shall mean an Actuarial Equivalent benefit in the
Normal Form determined as of the Executive’s Retirement Benefit commencement
date and based on the statutory restrictions on qualified plan benefits (if
applicable) as in effect on the Executive’s Termination Date.

 

(d)                                 Average Monthly Cash Salary.  The term
“Average Monthly Cash Salary” shall mean the greater of (i) the Executive’s
total Cash Salary for the highest four (4) consecutive calendar years during the
last ten (10) calendar years of employment with the Company and its Affiliates
divided by 48, or (ii) the Executive’s average monthly Cash Salary for the last
forty-eight (48) calendar months of employment with the Company and its
Affiliates (or, if fewer, all calendar months of his or her employment with the
Company and its Affiliates which immediately precede the Executive’s Termination
Date.

 

(e)                                  Beneficiary.  The term “Beneficiary” shall
mean the Executive’s Spouse at the time of the Participant’s death unless prior
to his death, (i) the Executive has designated in writing another
person(s) (which may include a trust or the Executive’s estate) as Beneficiary,
and (ii) his Spouse at the time of such designation has consented in writing to
such other Beneficiary.  If no Beneficiary has been effectively designated by
the Executive at the time of his or her death and if the Executive has no Spouse
at that time, any amounts payable to the Executive under this Agreement at the
time of his death shall be payable to the Executive’s estate.

 

(f)                                   Cash Salary.  The term “Cash Salary” shall
mean base salary and annual incentive bonuses paid by the Company or its
Affiliates, and any such cash salary or annual incentive bonus which the
Executive elected to defer, and excludes, without limitation, severance payments
or any payment made upon the termination of the Executive’s employment
(regardless of whether such payment is characterized as a severance payment),
compensation under any long-term incentive program, any bonus (other than the
annual incentive bonus), and any other incentive compensation.  For purposes of
this Agreement, the annual incentive bonus shall be counted in the year in which
such annual incentive bonus is paid.

 

(g)                                  Disabled.  The term “Disabled” shall mean
“totally disabled” as defined under the long-term disability plan in effect
generally for salaried employees of the Company at the Executive’s Termination
Date (regardless of whether the Executive actually participates in that plan at
the time), as determined by the administrator of such plan.

 

(h)                                 Normal Form.  The term “Normal Form” shall
mean a single life annuity.

 

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(i)                                     Retirement Benefit.  The term
“Retirement Benefit” shall mean a Full or Vested Retirement Benefit, as
applicable, provided pursuant to the terms of this Agreement.

 

(j)                                    Service.  The term “Service” shall mean a
period of unbroken employment with the Company and/or its Affiliates and shall
include the Executive’s service with the Company and/or its Affiliates from the
date on which the Company hired the Executive through and including the
effective termination date of his employment with the Company and any and all
Affiliate(s) (including without limitation the Executive’s employment prior to
the commencement of the Company’s Chapter 11 Cases), provided however that
employment with any Affiliate shall be counted only for periods during which
such entity (if any) satisfies the definition of Affiliate set forth in
Paragraph 1(b) above.

 

(k)                                 Spouse.  The term “Spouse” shall mean the
person to whom the Executive is married (if any), as determined as of any date
under applicable state law.

 

(l)                                     Termination Date.  The term “Termination
Date” shall mean the date the Executive incurs a separation from service with
the Company and its affiliates (whether or not incorporated) that are under
common control with the Company within the meaning of Section 414(c) of the
Code, except that 50% shall be substituted for the 80% ownership level of such
Code section.  For purposes of this Agreement, the Executive’s employment with
the Company and its Affiliates “terminates” if the Executive has incurred a
“separation from service.”  For purposes of this Agreement, “separation from
service” shall have the meaning of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), and Treasury Regulation § 1.409A-1(h).

 

2.                                      Full Retirement Benefit

 

(a)                                 The Executive shall be entitled to receive a
Full Retirement Benefit if the Executive’s employment with the Company and its
Affiliates terminates after the Executive having completed at least fifteen (15)
years of Service, for reasons other than having become disabled.

 

(b)                                 The Full Retirement Benefit shall commence
on the first day of the seventh (7th) full month following the Executive’s
Termination Date and shall be paid in five (5) substantially equal annual
installments, the last four (4) annual installment payments to be made on the
successive anniversary dates of the original installment payment.

 

(c)                                  The Full Retirement Benefit payable shall
be calculated as follows:

 

(1)                                 Determine a benefit based on a monthly
amount that equals fifty percent (50%) of the Executive’s Average Monthly Cash
Salary, payable in the Normal Form;

 

(2)                                 Subtract $30,678; and

 

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(3)                                 Determine the single sum amount that is the
Actuarial Equivalent of the Executive’s benefit resulting from the calculations
above.

 

3.                                      Vested Retirement Benefit

 

(a)                                 The Executive shall be entitled to receive a
Vested Retirement Benefit if the Executive’s employment with the Company and its
Affiliates terminates for reason other than the Executive having become
disabled, and such termination occurs prior to the Executive having completed
fifteen (15) years of Service.

 

(b)                                 The Vested Retirement Benefit shall commence
on the later of (i) the first day of the seventh (7th) full month following the
Executive’s Termination Date or (ii) the Executive’s attainment of the age of
sixty-two (62) years, and shall be paid in five (5) substantially equal annual
installments, the last four (4) annual installment payments to be made on the
successive anniversary dates of the original installment payment.

 

(c)                                  The Vested Retirement Benefit payable shall
be calculated as follows:

 

(1)                                 Determine the monthly amount under Paragraph
2(c)(1);

 

(2)                                 Subtract $30,678;

 

(3)                                 Multiply the result by a fraction, the
numerator of which shall equal the number of the Executive’s completed years of
Service at the Termination Date or fifteen (15), whichever is less, and the
denominator of which shall be fifteen (15); and

 

(4)                                 Determine the single sum amount that is the
Actuarial Equivalent of the Executive’s benefit resulting from the calculations
above.

 

4.                                      Disability Retirement Benefit

 

(a)                                 The Executive shall be entitled to receive a
Disability Retirement Benefit if the Executive’s employment with the Company and
its Affiliates terminates prior to the Executive’s attainment of the age of
sixty-two (62) by reason of the Executive having become Disabled, and (ii) the
Executive has completed at least one (1) year of Service (but has not completed
at least 15 years of service).

 

(b)                                 The Disability Retirement Benefit shall
commence on the first day of the seventh (7th) full month following the
Executive’s Termination Date and shall be paid in five (5) substantially equal
annual installments, the last four (4) annual installment payments to be made on
the successive anniversary dates of the original installment payment.

 

(c)                                  The Disability Retirement Benefit payable
shall be calculated as follows:

 

(1)                                 Determine the Executive’s Full Retirement
Benefit as provided in Paragraph 2(c)(1);

 

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(2)                                 Multiply the result in subparagraph (1) by
the appropriate early retirement commencement percentage as indicated below:

 

Age of the Executive

 

 

At Termination

 

 

Because of

 

 

Disability

 

Percentage

61

 

94%

60

 

88%

59

 

82%

58

 

76%

57

 

70%

56

 

64%

55

 

58%

54 and prior

 

50%

 

(3)                                 Subtract $30,678; and

 

(4)                                 Determine the single sum amount that is the
Actuarial Equivalent of the Executive’s benefit resulting from the calculations
in paragraphs (1), (2) and (3) immediately above.

 

5.                                      Pre-Retirement Survivor Benefits

 

(a)                                 A Pre-Retirement Survivor Benefit shall be
paid to the Executive’s Beneficiary in accordance with this Paragraph 5 in the
event of the Executive’s death prior to the commencement of his Full or Vested
Retirement Benefit and after the Executive has completed at least one (1) year
of Service.  The Pre-Retirement Survivor Benefit shall be paid to the
Executive’s Beneficiary in a single sum on the first day of the month following
the Executive’s date of death.

 

(b)                                 The Pre-Retirement Survivor Benefit shall be
calculated as follows:

 

(1)                                 Determine the Executive’s Full Retirement
Benefit or Vested Retirement Benefit, whichever applies based upon the
Executive’s years of Service at the time of his death and as if the Executive
had survived to age 62; and

 

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(2)                                 Multiply the result by the appropriate early
percentage as indicated below:

 

Age of the Executive

 

 

At Death

 

Percentage

62 or older

 

50%

61

 

47%

60

 

44%

59

 

41%

58

 

38%

57

 

35%

56

 

32%

55

 

29%

54 and prior

 

25%

 

6.                                      Post-Retirement Survivor Benefit

 

In the event of the Executive’s death after payment to him of his Retirement
Benefit has commenced, the remaining installments payable to the Executive shall
be paid to his Beneficiary in a single sum on the first day of the month
following the Executive’s date of death.

 

7.                                      Source of Benefits

 

Nothing contained in this Agreement and no action taken pursuant to the
provisions of this Agreement shall create or be construed to create a trust of
any kind, or a fiduciary relationship between the Company and the Executive, or
the Executive’s spouse, or any other person.  This Agreement does not create any
escrow account, trust fund or any other form of asset segregation.  Any
Retirement Benefits due under the provisions of this Agreement shall be paid
from the general assets of the Company, except that in the discretion of the
Company, any Retirement Benefit payment may be made from a grantor trust, if
any, established by the Company for such purpose.

 

8.                                      Restrictive Covenants

 

The Executive agrees that Section 8 (“Restrictive Covenants”) of his Employment
Agreement, which is herein incorporated into this Agreement by reference, will
apply to this Agreement.  The Executive further agrees that if the Executive
violates any provision of Section 8 of the Employment Agreement, the Executive
will not be eligible to receive, and will not receive, any payments and benefits
under this Agreement.

 

9.                                      Assignment; Successors

 

This Agreement shall inure to the benefit and be binding upon the Company and
its successors.  The Company may not assign this Agreement without the
Executive’s written consent, except that the Company’s obligations under this
Agreement shall be the binding legal obligations of any successor to the Company
by sale, and in the event of any transaction that results in the transfer of
substantially all of the assets or business of the Company, the Company

 

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will use its best efforts to cause the transferee to assume the obligations of
the Company under this agreement.  The Executive may not assign this Agreement
during his life.  Upon the Executive death this Agreement will inure to the
benefit of the Executive’s heirs, legatees, and legal representatives of the
Executive’s estate.

 

10.                               Other Benefit Plans

 

The Retirement Benefits provided for by this Agreement shall not constitute
“compensation” for purposes of computing compensation for any benefit plan
maintained by the Company or its Affiliates.

 

11.                               Enforcement

 

All actions for the enforcement of any rights under, or interpretation of, this
Agreement shall be brought in courts within Cook County, Illinois, and the
Executive hereby consents and submits to the venue and jurisdiction of any
local, state, or federal court located within Cook County, Illinois (to the
extent that jurisdictional requirements permit).  The laws of the State of
Illinois shall govern the validity, interpretation, construction and performance
of this Agreement, without regard to the conflict of laws principles and shall
be liberally construed to maximize protection of the Company’s rights in its
trade secrets and confidential information.

 

12.                               Compliance with Code Section 409A

 

It is intended that this Agreement comply with the requirements of
Section 409A(a)(2) through (4) of the Code and all regulations and guidance
issued thereunder.  This Agreement shall be interpreted for all purposes in
accordance with this intent and may be amended by the Company at any time if
such amendment is deemed, in the Company’s sole discretion, necessary to satisfy
this intent.

 

13.                               Notices

 

Notices given pursuant to this Agreement shall be in writing and shall be deemed
received when personally delivered, or on the date of written confirmation of
receipt by (i) overnight carrier, (ii) telecopy, (iii) registered or certified
mail, return receipt requested, addressee only, postage prepaid, or (iv) such
other method of delivery that provides a written confirmation of delivery. 
Notice to the Company shall be directed to:

 

Smurfit-Stone Container Corporation
Six CityPlace Drive
Creve Coeur, Missouri 63141
Attention: General Counsel

 

The Company may change the person and/or address to whom the Executive must give
notice under this Paragraph by giving the Executive written notice of such
change, in accordance with the procedures described above.  Notices to or with
respect to the Executive shall be directed to the Executive, or to the
Executive’s executors, personal representatives or distributes, if the Executive
is deceased, or the assignees of the Executive, at the Executive’s home address
on the records of the Company.

 

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14.                               Withholding

 

The Company may withhold from any payment that it is required to make under this
Agreement amounts sufficient to satisfy applicable withholding requirements
under any federal, state or local law.

 

15.                               Amendment

 

This Agreement may be amended at any time by written agreement between the
Company and the Executive.

 

16.                               Severability

 

Each provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law.  The Executive and the Company agree
that in the event that any provision of this Agreement is found to be
unreasonable or otherwise unenforceable by a court, it is the purpose and intent
of the parties that any such provision be deemed modified or limited, so that as
modified or limited, such provision may be enforced to the fullest extent
possible.  If any provision of this Agreement is held invalid or unenforceable
for any reason (after any such modification or limitation pursuant to the
preceding sentence, as applicable), such provision will be effective only to the
extent of such invalidity or unenforceability without invalidating the remainder
of such provision or the remaining provisions of this Agreement.

 

17.                               Entire Agreement

 

Except as otherwise provided herein, this Agreement embodies the entire
agreement and understanding of the parties hereto with regard to the matters
described herein and supersedes any and all prior and/or contemporaneous
agreements and understandings, oral or written, between said parties regarding
such matters, provided that nothing herein shall limit or otherwise affect any
provision of the Employment Agreement or any Emergence Equity Grant Award
Agreement.  In the event of any conflict between any provision of this Agreement
and the Employment Agreement, the provisions of the Employment Agreement shall
govern.  In the event of any conflict between any provision of this Agreement
and an Emergence Equity Grant Award Agreement, the provisions of the Emergence
Equity Grant Award shall govern.  The Executive and the Company acknowledge and
agree that this Agreement amends and restates the Predecessor Retirement
Agreement in its entirety and that as of the Effective Date the provisions of
this Agreement shall replace each and every provision of the Predecessor
Retirement Agreement, at which time the provisions of the Predecessor Retirement
Agreement shall be null and void, and shall be of no further force or effect. 
Any party’s failure to enforce this Agreement in the event of one or more events
which violate this Agreement shall not constitute a waiver of any right to
enforce this Agreement against subsequent violations.

 

18.                               Consultation With Counsel

 

The Executive acknowledges that he has had a full and complete opportunity to
consult with counsel of the Executive’s own choosing concerning the terms,
enforceability and implications of this Agreement, and the Company has made no
representations or warranties to

 

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the Executive concerning the terms, enforceability or implications of this
Agreement other than as are reflected in this Agreement.

 

19.                               No Waiver

 

No failure or delay by the Company or the Executive in enforcing or exercising
any right or remedy hereunder shall operate as a waiver thereof.  No
modification, amendment, or waiver of this Agreement nor consent to any
departure by the Executive from any of the terms or conditions thereof, shall be
effective unless in writing and signed by the Chairman of the Company’s Board of
Directors.  Any such waiver or consent shall be effective only in the specific
instance and for the purpose for which given.

 

20.                               Effect on Other Obligations

 

This Agreement shall supplement the Employment Agreement, the provisions of
which shall continue in full force and effect.  Except as otherwise provided in
a writing signed by the Executive and a duly authorized member of the Company’s
Board of Directors, the payments and benefits herein provided to be paid to the
Executive by the Company shall be made without regard to, and in addition to any
other payments or benefits required to be paid the Executive at any time
hereafter under the terms of the Employment Agreement or under any other policy
of the Company relating to compensation, or retirement or other benefits. 
Except as otherwise provided in a writing signed by the Executive and a duly
authorized member of the Company’s Board of Directors, no payments or benefits
provided the Executive hereunder shall be reduced by any amount the Executive
may earn or receive from employment with another employer or from any other
source.

 

21.                               Survival

 

All Paragraphs of this Agreement survive beyond the term of the Executive’s
employment with the Company except as otherwise specifically stated.

 

22.                               Headings

 

The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning thereof.

 

23.                               Counterparts

 

The parties may execute this Agreement in one or more counterparts, all of which
together shall constitute one Agreement.

 

24.                               Term of Employment

 

Nothing in this Agreement shall be construed as providing a term of employment
or guaranteeing the Executive employment with the Company for any length or time
or in a particular position(s).

 

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IN WITNESS WHEREOF, Smurfit-Stone Container Corporation has caused this
Agreement to be executed by its duly authorized executive and the Executive has
hereunto set his/her hand as of the date first above written.

 

 

SMURFIT-STONE CONTAINER CORPORATION

 

 

 

 

 

 

By:

/s/ Ralph F. Hake

 

 

 

 

 

 

 

Title:

Chairman

 

 

 

 

 

 

 

Date:

June 30, 2010

 

 

 

 

 

 

 

EXECUTIVE

 

 

 

 

 

 

/s/ Steven J. Klinger

 

Steven J. Klinger

 

 

 

 

 

 

June 30, 2010

 

Date Signed

 

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