Exhibit 10.1

[Smurfit-Stone Container Corporation Letterhead]

May 11, 2006

Mr. Steven J. Klinger
5475 Red Bark Way
Atlanta, GA   30338

Dear Steve:

On behalf of our Board of Directors, I am pleased to offer you the position of
President and Chief Operating Officer of Smurfit-Stone Container Corporation and
its subsidiaries. In this role, you would be responsible for all of the
company’s ongoing business operations. You would report directly to me and have
your principal office in St. Louis, Missouri, and would serve on the company’s
Executive Committee.

The terms of your employment would be set forth in an Employment Agreement,
which would contain terms and conditions identical to those in place with the
Company’s Chief Financial Officer. The Employment Agreement would have an
“evergreen” term of two (2) years, and would also include customary protections
in the event of a change of control of the company and customary restrictive
covenants (non-competition and non-disclosure).

The Board of Directors has authorized me to convey its intention to provide you
with the following compensation package:

·                  Base salary of $750,000 per year;

·                  Target award level of 100% of base salary under the company’s
Management Incentive Plan, prorated and guaranteed for 2006 ($435,000);

·                  Within 30 days of your hire date, you would be awarded
300,000 stock options under the 2004 Long-Term Incentive Plan, with three-year
corporate performance targets identical to the stock options granted to senior
management in March 2006;

·                  One-time cash signing bonus of $750,000 plus an award of
75,000 restricted stock units under the 2004 Long-Term Incentive Plan, which
would vest 100% on the third anniversary (or earlier in the event of a change of
control of the company), but which could be deferred at your option, to replace
your forfeited retention bonuses from your current employer;

·                  Within 30 days of your hire date, you would be granted
150,000 stock options and 52,500 restricted stock units under the 2004 Long-Term
Incentive Plan, which vest 100% on the third anniversary, with a guaranteed 
2007 target  LTIP award of 75% of the award granted to me and anticipated future
LTIP awards at 75% of the award granted to me;

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Mr. Steven J. Klinger
Page 2

·                  Participation in all insurance and qualified retirement plans
made available to senior management from time to time, which as you know are
always subject to change.

·                  Financial and tax planning services equal to those provided
to me;

·                  Company-paid membership in one country club of your choosing
in the St. Louis area; and

·                  Payment of all expenses in connection with your relocation to
the St. Louis area, in accordance with our customary policies and procedures.

We would provide a company-paid apartment in the St. Louis area for up to two
years, after which time we would expect you to relocate to the St. Louis area.
We are willing to review this issue again at the conclusion of the initial
two-year period based on the circumstances at that time.

As a further inducement for you to join Smurfit-Stone, the company would provide
you with a supplemental non-qualified pension arrangement equivalent to that set
forth in the Officer Retirement Agreement, dated April 25, 2002 between you and
Georgia-Pacific Corporation. As is customary in these arrangements, your overall
pension benefit from Smurfit-Stone would be offset by retirement benefits
received from Georgia-Pacific. We will need to have further discussions to
tailor this benefit to your personal financial situation.

The Company will be required to promptly disclose your hiring, but will afford
you the opportunity to review and approve the press release announcing your
hiring in advance, except where, in our reasonable opinion, immediate disclosure
is required by law.

The additional terms and conditions of your employment will be set forth in your
Employment Agreement and the other documents setting forth the benefits
described above, and this letter will supplement your Employment Agreement. Your
employment would, of course, be subject to the normal pre-employment conditions
(i.e. background check, physical examination, drug test). In order for us to
begin drafting the necessary documentation and processing your employment, I
invite you to sign the extra copy of this letter and return it to me at your
earliest convenience.

 

Sincerely yours,

 

 

 

 

 

 

 

Smurfit-Stone Container Corporation

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Patrick J. Moore

 

 

 

 

Patrick J. Moore

 

 

 

 

Chairman, President and

 

 

 

 

Chief Executive Officer

 

 

 

 

 

ACCEPTED AND AGREED

 

 

 

 

THIS 11TH DAY OF MAY, 2006

 

 

 

 

 

 

 

 

 

 

 

 

 

 

/s/ Steven J. Klinger

 

 

 

 

 

 

Steven J. Klinger

 

 

 

 

 

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