Exhibit 10.16

Clearwater Paper
Change of Control Plan
And
Summary Plan Description

The information contained in this Change of Control Plan and Summary Plan
Description (SPD) is effective as of the date at the bottom of this page. To
ensure that you have the most up-to-date benefit plan information, be sure to
review this Plan and SPD in combination with more recent communications to
eligible employees.

January 1, 2014

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TABLE OF CONTENTS

Section 1.Eligibility to Participate    4
Section 2.Eligibility for Severance Payments and Benefits    4
Section 3.Severance Payments and Benefits    9
Section 4.Amendment and Plan Termination    15
Section 5.Miscellaneous    15
Section 6.Administrative Information About Your Plan    20
Section 7.Your Rights and Privileges Under ERISA    21
Section 8.Other Administrative Facts    23
 

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PURPOSE
The Compensation Committee of the Board of Directors of Clearwater Paper
(“Clearwater Paper”) has adopted this Clearwater Paper Change of Control Plan
(the “Plan”) for eligible executives of Clearwater Paper and its participating
subsidiaries and affiliates (Clearwater Paper and its participating subsidiaries
and affiliates are sometimes referred to in this Plan as “Participating
Companies”). This Plan, together with the Clearwater Paper Executive Severance
Plan (the “Executive Severance Plan”), amends and supersedes the Clearwater
Paper Corporation Severance Program for Executive Employees, which program shall
have no further force or effect on and after December 13, 2012 (the “Effective
Date”).
The purpose of the Plan is to provide equitable treatment for executives whose
employment terminates following a Change of Control (as defined below)
consistent with the values and culture of Clearwater Paper, provide financial
support for such executives seeking new employment, recognize such executives’
contributions to the Participating Companies, and avoid or mitigate the
Participating Companies’ potential exposure to litigation. Clearwater Paper
further believes that the Plan will aid all of the Participating Companies in
attracting and retaining highly qualified executives who are essential to their
success.
Upon the occurrence of a Change of Control (as defined below), this Plan, and
not the Executive Severance Plan, shall govern with respect to terminations of
employment with the Participating Companies occurring during the two (2) year
period commencing on the date of such Change of Control.

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Section 1.
Eligibility to Participate

Except as provided in the following paragraph, you are eligible to participate
in the Plan if you are either (1) Clearwater Paper’s president, chief executive
officer, chief financial officer, corporate secretary, treasurer or controller,
(2) an officer of a Participating Company appointed to that position by
Clearwater Paper’s Board of Directors, or (3) an executive of Clearwater Paper
or another Participating Company who has been designated by the Compensation
Committee of Clearwater Paper’s Board of Directors (the “Compensation
Committee”) as eligible to participate in this Plan.
Notwithstanding anything contained herein, you are not eligible to participate
in the Plan and are excluded from coverage under the Plan if you are:
•
a party to an individual arrangement or a written employment agreement with
Clearwater Paper or another Participating Company containing a severance
provision other than pursuant to this Plan or the Executive Severance Plan;

•
covered by a local practice outside the United States that provides for
severance payments and/or benefits in connection with a voluntary or involuntary
termination of employment that are greater than the severance payments and/or
benefits set forth herein.

Section 2.
Eligibility for Severance Payments and Benefits

Right to Severance Payments and Benefits
You will be eligible to receive the severance payments and benefits provided by
this Plan if, during the two (2) year period commencing on the date of a Change
of Control (as defined below), your employment by Clearwater Paper or another
Participating Company is terminated for any one or more of the following
reasons:
(a)
Involuntary termination by your Participating Company other than for Cause (as
defined below).

(b)
You voluntarily terminate your employment after the occurrence of any event
constituting Good Reason (as defined below).

To qualify for severance payments and benefits under the Plan upon voluntary
termination for Good Reason, you must notify your Participating Company in
writing of termination for Good Reason specifying the event constituting Good
Reason within ninety (90) calendar days after the event. Failure for any reason
to give written notice of termination of employment for Good Reason shall be
deemed a waiver of the right to voluntarily terminate employment and claim Good
Reason under this Plan in relation to such event. The Participating Company
shall have a period of thirty (30) calendar days in which to cure the Good
Reason (the “Cure Period”). If the Good Reason is cured within the Cure Period,
you will not be entitled to severance payments and benefits hereunder. If the
Participating Company waives its right to cure or does not, within the Cure
Period, cure the Good Reason, you shall be entitled to severance payments and
benefits and your actual termination date shall be determined in the sole
discretion of the Participating Company but in no event later

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than thirty (30) calendar days from the date the Participating Company waives
its right to cure or the end of the Cure Period, whichever is earlier.
Change of Control
For purposes of this Plan, “Change of Control” shall mean the occurrence of any
of the following events:
1.
Upon consummation of a Business Combination unless, following such Business
Combination,

a.    all or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Common Stock and the
Outstanding Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock (or common equity) and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors of the corporation or other entity
resulting from such Business Combination (including a corporation or other
entity which as a result of such transaction owns Clearwater Paper either
directly or through one or more subsidiaries),
b.    no Person (excluding any corporation or other entity resulting from such
Business Combination or any employee benefit plan (or related trust) sponsored
or maintained by Clearwater Paper or a Clearwater Paper subsidiary or such other
corporation or other entity resulting from such Business Combination)
beneficially owns, directly or indirectly, 30% or more of, respectively, the
then outstanding shares of common stock (or common equity) of the corporation or
other entity resulting from such Business Combination or the combined voting
power of the then outstanding voting securities of such corporation or other
entity except to the extent that such ownership is based on the beneficial
ownership, directly or indirectly, of Outstanding Common Stock or Outstanding
Voting Securities immediately prior to the Business Combination, and
c.    at least a majority of the members of the board of directors (or similar
governing body) of the corporation or other entity resulting from such Business
Combination were members of the Board of Directors at the time of the execution
of the initial agreement, or of the action of the Board of Directors, providing
for such Business Combination; or
2.
Upon the consummation of the sale, lease or exchange of all or substantially all
of the assets of Clearwater Paper; or

3.
On the date that individuals who constitute the Incumbent Board cease for any
reason to constitute at least a majority of the Board of Directors; provided,
however, that any individual who becomes a member of the Board of Directors on
or subsequent

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to the day immediately following the Effective Date whose election, or
nomination for election by Clearwater Paper’s stockholders, was approved by a
vote of at least a majority of the members of the Board of Directors then
comprising the Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for purposes of this
proviso, any such individual whose appointment to the Board of Directors occurs
as a result of an actual or threatened election contest with respect to the
election or removal of a member or members of the Board of Directors, an actual
or threatened solicitation of proxies or consents or any other actual or
threatened action by, or on behalf of any Person other than the Incumbent Board;
or
4.
Upon the acquisition on or after the Effective Date by any Person of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of 30% or more of either:

a.    the then Outstanding Common Stock, or
b.    the combined voting power of the Outstanding Voting Securities; provided,
however, that the following acquisitions shall not be deemed to be covered by
this part 4:
(x)    any acquisition of Outstanding Common Stock or Outstanding Voting
Securities by or at the direction of Clearwater Paper or any Subsidiary,
(y)    any acquisition of Outstanding Common Stock or Outstanding Voting
Securities by any employee benefit plan (or related trust) sponsored or
maintained by Clearwater Paper or any Subsidiary, or
(z)    any acquisition of Outstanding Common Stock or Outstanding Voting
Securities by any Person pursuant to a transaction which complies with clauses
a., b. and c. of part 1 of this definition of “Change of Control,” related to
Business Combinations; or
5.
Upon the approval by the stockholders of Clearwater Paper of a complete
liquidation or dissolution of Clearwater Paper.

The following terms are used in the above definition of “Change of Control”:
“Board of Directors” means the Board of Directors of Clearwater Paper, as
constituted from time to time.
“Business Combination” means a merger or consolidation of Clearwater Paper.
“Incumbent Board” means the individuals who constituted the Board of Directors
as of the Effective Date.

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“Outstanding Common Stock” means the outstanding shares of common stock of
Clearwater Paper, par value $0.0001 per share.
“Outstanding Voting Securities” means the outstanding voting securities of
Clearwater Paper entitled to vote generally in the election of members of
Clearwater Paper’s Board of Directors.
“Person” means any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended).
Ineligibility for Severance Payments and Benefits
Notwithstanding any provision of the Plan, you shall not be eligible for
severance payments and benefits under this Plan if a Change of Control has not
occurred during the two (2) year period preceding the date of your termination
of employment, or if your termination of employment occurs by reason of any of
the following:
•
voluntary termination other than for Good Reason, including early retirement;

•
mandatory retirement from employment in accordance with your Participating
Company’s policy or statutory requirements;

•
death;

•
Disability;

•
for Cause;

•
refusal, rejecting or declining to accept a transfer to a position with
Clearwater Paper or another Participating Company, as applicable (for which you
are qualified as determined by the Participating Company by reason of knowledge,
training, and experience), provided the transfer would not constitute Good
Reason for a voluntary termination;

•
the sale of all or part of Clearwater Paper’s or another Participating Company’s
business assets (including but not limited to a Change of Control), or a
spin-off of a division (or other operating assets) of Clearwater Paper or
another Participating Company, if you are offered employment by the acquirer of
such assets or such other spun-off entity prior to or within four (4) weeks
after the date your employment with the Participating Company terminates,
regardless of whether you accept the offer, provided that the terms and
conditions of employment offered to you would not constitute Good Reason for a
voluntary termination if the acquirer or spun-off entity were a Participating
Company in this Plan;

•
upon the formation of a joint venture or other business entity in which
Clearwater Paper or another Participating Company directly or indirectly will
own some outstanding voting or other ownership interest (including but not
limited to a Change of Control) if

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you are offered employment by the joint venture entity or other business entity
prior to or within four (4) weeks of the date your employment with the
Participating Company terminates, regardless of whether you accept the offer,
provided that the terms and conditions of employment offered to you would not
constitute Good Reason for a voluntary termination if the joint venture entity
or other business entity were a Participating Company in this Plan; or
•
you are reporting to a different person.

Cause
“Cause” shall mean the occurrence of any one or more of the following:
(i)
your conviction of any felony or any crime involving fraud, dishonesty or moral
turpitude;

(ii)
your participation in a fraud or act of dishonesty against Clearwater Paper, its
subsidiaries or affiliates or any successor to Clearwater Paper that results in
material harm to the business of Clearwater Paper, its subsidiaries or
affiliates or any successor to Clearwater Paper;

(iii)
your intentional, material violation of any contract between you and Clearwater
Paper, its subsidiaries or affiliates or any successor to Clearwater Paper, or
any statutory duty you owe Clearwater Paper, its subsidiaries or affiliates or
any successor to Clearwater Paper, in either case that you do not correct within
thirty (30) days after written notice thereof has been provided to you;

(iv)
the commission by you of an act that could (either alone or with other acts) be
considered harassment or discrimination on the basis of gender, race, age,
religion, sexual orientation or other protected category; or

(v)
the commission by you of an alcohol or drug offense in violation of Clearwater
Paper’s or a subsidiary’s or affiliate’s Substance Abuse Policy for salaried
employees.

“Cause” shall be interpreted by the Plan Administrator in its sole discretion
and such interpretation shall be conclusive and binding on all parties.
Disability
“Disability” shall mean a condition pursuant to which you are
(i)    unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment which can be expected to
result in death or can be expected to last for a continuous period of not less
than 12 months; or
(ii)    by reason of any medically determinable physical or mental impairment
which can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than 3 months under an accident and health
plan covering employees of Clearwater Paper, its subsidiaries or affiliates.

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Good Reason
“Good Reason” shall mean that one or more of the following are undertaken by
Clearwater Paper, its subsidiaries or affiliates or any successor to Clearwater
Paper without your written consent:
(i)
the assignment to you of any duties or responsibilities that results in a
material diminution in your position or function; provided, however, that a
change in your title or reporting relationships shall not provide the basis for
a voluntary termination with Good Reason;

(ii)
a 10% or greater reduction by your Participating Company, other than in
connection with an across-the-board reduction applicable to other senior
executives of the Participating Company, in your base salary and/or target
bonus, and/or target long-term incentive opportunity, all as in effect
immediately prior to such reduction;

(iii)
any failure by Clearwater Paper, its subsidiaries or affiliates or any successor
to Clearwater Paper to continue in effect (or substantially replace in the
aggregate) any material benefit plan or program in which you are participating
(hereinafter referred to as “Benefit Plans”), or the taking of any action by
Clearwater Paper, its subsidiaries or affiliates or any successor to Clearwater
Paper that would adversely affect your participation in or reduce your benefits
under the Benefit Plan; provided, however, that no voluntary termination of
service with Good Reason shall be deemed to have occurred if Clearwater Paper,
its subsidiaries or affiliates or any successor to Clearwater Paper provide for
your participation in benefit plans and programs that, taken as a whole, are
comparable to the Benefit Plans;

(iv)
a relocation of your business office to a location more than 50 miles from the
location at which you perform duties, except for required travel by you on
Clearwater Paper’s, its subsidiaries’ or affiliates’ or any successor to
Clearwater Paper’s business; or

(v)
a material breach by Clearwater Paper, its subsidiaries or affiliates or any
successor to Clearwater Paper concerning the terms and conditions of your
employment.

Section 3.
Severance Payment and Benefits

You are eligible to receive the Severance Payment and benefits described in this
Section 3, provided you meet the eligibility criteria in Section 2.
Severance Payment
You shall receive a cash Severance Payment, payable in one (1) lump sum, equal
to the sum of the following:
•
2.50 times the sum of (A) your annual Base Pay (as defined below) plus (B) your
annual Base Pay multiplied by your target bonus percentage for the calendar year
of your termination as determined pursuant to Clearwater Paper’s Annual
Incentive Plan or a successor plan (the “AIP”). If your termination of
employment occurs within the thirty (30) months

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preceding the date you will attain age 65, the “2.50” multiplier in the
preceding sentence shall be replaced by a fraction, the numerator of which is
the number of full months between your termination date and the date you will
attain age 65 and the denominator of which is twelve (12).
•
A prorated AIP award for the calendar year of your termination. Such AIP award
will be determined under the terms of the AIP applicable to you for such year,
but shall be based upon your target bonus percentage under the AIP for the
calendar year of your termination. Your AIP award determined under the preceding
sentence will be multiplied by a fraction, the numerator of which is the number
of days you were employed by a Participating Company during the calendar year of
your termination and the denominator of which is 365. Notwithstanding the
foregoing, you will not be entitled to an AIP award under this paragraph if you
are entitled to an AIP award for the calendar year of your termination pursuant
to the change of control provisions of the AIP.

•
The unvested portion, if any, of your account balance under Clearwater Paper’s
401(k) Plan and your “401(k) Plan Supplemental Benefit” account balance under
Clearwater Paper’s Salaried Supplemental Benefit Plan (the “Supplemental Plan”)
or any successor plans.

•
If you participate in Clearwater Paper’s Salaried Retirement Plan (the
“Retirement Plan”) and are not vested in your accrued benefit under such plan as
of the date of your termination of employment, an amount equal to the present
value of your “Normal Retirement Benefit” under the Retirement Plan and your
“Retirement Plan Supplemental Benefit” under the Supplemental Plan. Such present
value shall be determined as of the date of your termination of employment using
the assumed discount rate applied in projecting Clearwater Paper’s pension
benefit obligations for financial reporting purposes and the RP 2000 mortality
table.

The term “Severance Pay Period” used in this Plan means the thirty (30)-month
period commencing on the date of your termination of employment. However, if
your termination of employment occurs during the thirty (30)- month period
preceding your attainment of age 65, your Severance Pay Period will be the
period between your termination date and the date you will attain age 65.
“Base Pay” means your base rate of pay as in effect at the time of your
termination of employment or, if greater, the rate in effect at the time your
Base Pay was materially reduced giving rise to your termination for Good Reason.
Your Base Pay shall be determined without reduction for salary reductions under
sections 125, 132(f), 137 or 401(k) of the Internal Revenue Code. Your Base Pay
shall not include overtime, bonuses, income from awards under Clearwater Paper’s
2008 Stock Incentive Plan or any successor plan, dividend equivalents,
benefits-in-kind, expense reimbursements, allowances (including, but not limited
to moving or car allowances) or other incentives, and any other forms of extra
compensation.
Payment of the Severance Payment is contingent upon your signing a Separation
Agreement containing a general release and allowing the general release to
become effective (see “Separation Agreement, Including General Release and
Restrictive Covenants,” below).
Nothing in this Section 3, this Plan, the Executive Severance Plan, an offer
letter from a Participating Company, a prevailing practice of a Participating
Company, or any oral statement made by or on behalf of a Participating Company
shall entitle you to receive duplicate benefits in connection with a voluntary
or involuntary termination of employment. For example, you are not eligible for

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payments and benefits under both this Plan and the Executive Severance Plan. The
obligation of the Participating Companies to make payments under this Plan shall
be expressly conditioned upon you not receiving duplicate payments.
Pay in Lieu of Notice Periods
The Severance Payment under the Plan shall be reduced by any cash payments to
which you may be entitled under any federal, state or local plant-closing or
mass layoff law (or similar or analogous) law, including, without limitation,
pursuant to the U.S. Worker Adjustment and Retraining Notification Act or any
state or local “pay in lieu of notice” law or regulation.
No Mitigation
You shall not be required to mitigate the amount of any payment provided for in
the Plan by seeking other employment and no such payment shall be offset or
reduced by the amount of any compensation or benefits provided to you in any
subsequent employment. Notwithstanding the preceding sentence, any subsidized
COBRA coverage that you are entitled to receive under this Plan following your
termination of employment will terminate no later than the date you begin new
employment (see “Continuation of Employee Benefits” below).
Debt Owed to a Participating Company
If you owe Clearwater Paper or another Participating Company money for any
reason, the Participating Company shall have the right, at its sole discretion,
to offset the amount of the debt from your Severance Payments to the fullest
extent permitted by law.
Separation Agreement, Including General Release and Restrictive Covenants
The obligation of the Participating Companies to pay the Severance Payment and
provide you benefits continuation (see “Continuation of Employee Benefits”
below), shall be and is expressly conditioned upon you timely executing a
separation agreement in a form that is satisfactory to Clearwater Paper (the
“Separation Agreement”) during the requisite time period and allowing such
Separation Agreement to become effective.
As to the Separation Agreement:
•
It shall include but not be limited to a general release of claims against
Clearwater Paper, its subsidiaries and affiliates and their respective officers,
directors, employees and agents, and shall contain certain restrictive covenants
and obligations on your part including, but not limited to, non-competition and
non-solicitation covenants for the twenty-four (24) month period commencing on
your separation date, an agreement by you not to make use of confidential or
proprietary information of Clearwater Paper or its subsidiaries of affiliates,
an agreement not to disparage or encourage or induce others to disparage
Clearwater Paper, its subsidiaries or affiliates or their respective products
for a specified period, an agreement to return Company property, and an
agreement to

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cooperate with legal matters of Clearwater Paper and its subsidiaries and
affiliates in which you might have knowledge.
•
Clearwater Paper or your Participating Company will provide a form of such
Separation Agreement not later than the date of your Separation from Service.

•
You must sign and return the Separation Agreement within the minimum time period
required by law and not revoke it during any permitted revocation period, in
order for the Separation Agreement to become effective. Otherwise, you will not
be eligible for, and neither Clearwater Paper nor any other Participating
Company shall have any obligation to pay you, any Severance Payment.

How and When Your Benefit Is Paid
The Severance Payment will be paid in one (1) lump sum.
In general, the Severance Payment, if payable, will not be made until at least
eight days after you return a signed Separation Agreement (containing the
general release) to Clearwater Paper or your Participating Company, but in no
event later than 60 days after your effective date of termination.
If you have terminated employment and completed all of the requirements to
receive a Severance Payment (including signing and delivering the Separation
Agreement within the minimum time period required by law and not revoking it
during any permitted revocation period), but you die prior to the date such
payment is made, your Severance Payment will be paid in a lump sum to your
estate.
It is possible that the Severance Payment will constitute payment of deferred
compensation under Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”). In that event, payment may be subject to the six-month delay rule
and other limitations required to comply with Code Section 409A requirements.
See “Section 409A” below.
Continuation of Employee Benefits
During the Severance Pay Period, you are not considered an employee of
Clearwater Paper or any other Participating Company for any purpose – including
eligibility under any employee benefit plan. The following benefits, however,
will continue to be available:
Health Care Plans
If you and your dependents are enrolled in Clearwater Paper’s or another
Participating Company’s group health plan on the date your employment
terminates, this coverage will terminate on that date. However, you and your
enrolled eligible dependents will be offered the opportunity to elect COBRA
continuation coverage and have the opportunity to receive reimbursements for a
portion of the cost of that coverage:

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Subsidized COBRA: If you elect COBRA continuation coverage, you will be
responsible for the timely payment of all premiums charged for the COBRA
coverage. However, if you sign and return the Separation Agreement in the
requisite time period and allow it to become effective, Clearwater Paper or your
Participating Company will reimburse you an amount equal to the amount it pays
toward the cost of the same group health plan coverage for its active senior
executives (this benefit will cease to be provided if you fail to timely pay the
entire cost of the COBRA coverage). Clearwater Paper or your Participating
Company will provide these reimbursements until the earlier of (i) the end of
your Severance Pay Period or (ii) the date you begin new employment (the
“Subsidized Benefits Period”).
This means that during the Subsidized Benefits Period, after receiving the
reimbursements, you will in effect be paying the same amount as active employees
for the same coverage rather than the standard COBRA rate. However, if under
applicable law you are eligible to (and choose to) continue your COBRA coverage
beyond the end of the Subsidized Benefits Period, you will then cease to receive
any reimbursements and will have to bear the full cost of the standard COBRA
rate.
Please note that if you do not sign and return the Separation Agreement in the
requisite time period and allow it to become effective, neither you nor your
eligible dependents will receive subsidized COBRA. In addition, the
Participating Companies reserve the right to cease providing subsidized COBRA at
any time if continuing to provide that benefit would subject the Participating
Companies to excise taxes, penalties or similar charges under applicable law. Of
course, in either event you and your eligible dependents would still be entitled
to standard COBRA.
Standard COBRA: Standard COBRA is unsubsidized COBRA, meaning you (and your
eligible dependents if they elect separately) would owe the standard COBRA rate
for COBRA coverage and will not receive any reimbursements for the cost of that
coverage. Standard COBRA will be offered only for the maximum period required by
law, which may be shorter or longer than your Subsidized Benefits Period.
Detailed information about COBRA coverage will be mailed to your home at the
time of termination.
Life Insurance
Your current level of basic life insurance coverage will continue until the end
of your Subsidized Benefits Period.
When you are terminated, if you are participating in a supplemental or dependent
life insurance plan, coverage will end on your termination date. When your
employment terminates, you may have the opportunity to elect to convert all or
part of any terminating life insurance coverage to an individual policy with the
insurer.

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Employee Assistance Program (EAP)
You may continue to participate in Clearwater Paper’s or your Participating
Company’s Employee Assistance Program during the Subsidized Benefits Period, as
long as you remain eligible for benefits under Clearwater Paper’s or your
Participating Company’s group health plan. If you elect COBRA continuation
coverage, you may continue to participate in the EAP. You will receive
additional information regarding participation at the time of your termination.
Outplacement
You will be eligible for outplacement services in accordance with Clearwater
Paper’s or your Participating Company’s outplacement services that are in effect
for executives at your level as of the date your employment ends, provided you
timely sign and return the Separation Agreement (as set forth above).
Accrued Obligations
Regardless of whether the Severance Payment is payable, you will be entitled to
receive payment of all of your earned but unpaid base salary through the date of
your termination, any bonus earned under the terms of the AIP or other governing
plan but remaining unpaid for any previously completed performance cycle, any
earned but unused vacation, and any employee benefits earned but not yet
provided under the terms of any applicable plan or program.
Other Benefits
Accrued and unused vacation days, annual and long-term incentive awards, vesting
and exercising of awards under the 2008 Stock Incentive Plan or any successor
plan, and any other bonus or incentive payments will be determined in accordance
with the applicable Participating Company plans, programs and/or policies,
except as specifically provided above under “Severance Payment” with respect to
AIP awards.
Except as specifically provided above under “Continuation of Employee Benefits,”
all benefit coverage, and eligibility to participate in Clearwater Paper’s and
other Participating Companies’ plans, will end as of your termination date.
These benefits include, but are not limited to:
•
contributions to a Dependent Care Reimbursement Account;

•
contributions to and earning service for vesting under Clearwater Paper’s 401(k)
Plan;

•
earning additional service for vesting under Clearwater Paper’s Salaried
Retirement Plan (if applicable); and

•
participation in Clearwater Paper’s or your Participating Company’s disability
plans.

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If You Are Rehired After Termination
If you are rehired by Clearwater Paper or another Participating Company during
the Severance Pay Period, you will be required to repay a prorated portion of
your Severance Payment based on the number of weeks of your Severance Pay Period
during which you are employed by Clearwater Paper or another Participating
Company.
If you are a terminated employee who is subsequently reinstated to employee
status back to the date you were terminated (including reinstatement as the
result of an appeal of a claim for disability benefits), you will have to repay
your entire Severance Payment.
Section 4.
Amendment and Plan Termination

Clearwater Paper reserves the right to terminate or amend, in whole or in part,
the Plan at any time in its sole discretion by resolution adopted by the
Compensation Committee. Clearwater Paper reserves the right to implement changes
even if they have not been reprinted or substituted in this document.
The Senior Vice President, Human Resources or Senior Vice President, General
Counsel of Clearwater Paper (or, in the event of a title change in such
position, the most senior person in Clearwater Paper’s legal or human resources
department, respectively) shall have the power and authority to amend the Plan
with respect to any amendment that (i) does not increase the benefits under the
Plan or (ii) is required to comply with new or changed legal requirements
applicable to the Plan, including but not limited to Code Section 409A.
Notwithstanding the foregoing, following a Change of Control no amendment or
termination of this Plan shall reduce any Severance Payment or any other benefit
that has become payable under this Plan or make more restrictive the eligibility
requirements for Severance Payments or benefits under this Plan.
Section 5.
Miscellaneous

Employment Status
The Plan does not constitute a contract of employment and nothing in the Plan
provides or may be construed to provide that participation in the Plan is a
guarantee of continued employment with Clearwater Paper, any other Participating
Company or any of their respective subsidiaries or affiliates.
Withholding of Taxes
Clearwater Paper or your Participating Company shall withhold from any amounts
payable under the Plan all federal, state, local or other taxes that are legally
required to be withheld.

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No Effect on Other Benefits
Neither the provisions of this Plan nor the Severance Payment and benefits
provided for hereunder shall reduce any amounts otherwise payable to you under
any incentive, retirement, stock incentive, group insurance or other benefit
plan.
Validity and Severability
The invalidity or unenforceability of any provision of the Plan shall not affect
the validity or enforceability of any other provision of the Plan, which shall
remain in full force and effect, and any prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Unfunded Obligation
All severance payments and benefits under the Plan shall constitute unfunded
obligations of the Participating Companies. Severance payments shall be made, as
due, from the general funds of the Participating Companies. The Plan shall
constitute solely an unsecured promise by the Participating Companies to provide
such benefits to you to the extent provided herein. For avoidance of doubt, any
health benefits to which you may be entitled under the Plan shall be provided
under other applicable employee benefit plans of Clearwater Paper or your
Participating Company.
Type of Plan and Governing Law
This Plan is designed to qualify as a severance pay arrangement within the
meaning of Section 3(2)(B)(i) of the Employee Retirement Income Security Act of
1974, as amended (“ERISA”), and is intended to be excepted from the definitions
of “employee pension benefit plan” and “pension plan” in ERISA pursuant to U.S.
Department of Labor Regulation Section 2510.3-2(b). The Plan and all rights
thereunder shall be governed and construed in accordance with ERISA and, to the
extent not preempted by Federal law, with the laws of the State of Washington.
Section 409A
Notwithstanding any other provision of the Plan:
Statement of Intent
To the fullest extent possible, amounts and other benefits payable under the
Plan are intended to be exempt from the definition of “nonqualified deferred
compensation” under Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”) in accordance with one or more exemptions available under
the final Treasury regulations promulgated under Code Section 409A. To the
extent that any such amount or benefit is or becomes subject to Code
Section 409A, this Plan is intended to comply with the applicable requirements
of Code Section 409A with respect to such amounts or benefits. This Plan shall
be interpreted and administered to the extent possible in a manner consistent
with the foregoing statement of intent.

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Exemptions
To the fullest extent possible, amounts and other benefits payable under the
Plan are intended to be exempt from the definition of “nonqualified deferred
compensation” under Code Section 409A including, but not limited to, being
exempt from Section 409A:
•
as short-term deferrals under Treasury Regulation Section 1.409A-1(b)(4) (in
general, a short-term deferral is an amount that is payable no later than
March 15 of the year following the year in which the amount becomes due and
payable); and

•
as payments not qualifying as short-term deferrals, to the extent that the
payments do not exceed two times the lesser of (1) your annualized rate of pay
for the prior calendar year or (2) the limitation under Code Section 401(a)(17)
for the year of your Separation from Service (as defined below) ($250,000 in
2012) and such payments are made no later than December 31 of the second
calendar year following the year of your Separation from Service (the “409A
Severance Limit”).

Separation from Service
To the extent any payment under the Plan is or may become subject to Code
Section 409A, such payment shall be made only if you in fact experience a
“separation from service” within the meaning of Code Section 409A(a)(2)(A)(i)
and final Treasury Regulation Section 1.409A-1(h) (“Separation from Service”).
The transfer of your employment among Clearwater Paper and its subsidiaries and
affiliates generally will not be deemed a Separation from Service for purposes
of Code Section 409A. Continuing to perform services for Clearwater Paper or any
of its subsidiaries or affiliates after your termination (for example, as a
consultant) may cause you to be treated as not having a Separation from Service,
depending on the level of services you continue to perform. In general, you will
not be viewed as having a Separation from Service unless your work level has
decreased to 20% or less of the level you were working prior to your
termination.
Separate Payments
If your Severance Payment becomes payable in more than one payment, each such
payment shall be deemed a separate payment for purposes of Code Section 409A.
Specified Employees
A “Specified Employee” is an employee of Clearwater Paper or one of its
subsidiaries or affiliates who is one of the top 50 highest paid employees as
determined by Clearwater Paper. Code Section 409A provides for a six-month delay
with respect to certain payments made to Specified Employees if the payments are
subject to Code Section 409A. Under the Plan, Specified Employees may receive up
to the 409A Severance Limit without regard to the six-month delay; however,
payments in excess of the 409A Severance Limit that would have been paid within
six months following the Specified Employee’s separation date will be paid the

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first business day of the seventh month following the separation date, or, if
earlier, the date of the Specified Employee’s death.
No Participating Company Liability Under Code Section 409A
In no event whatsoever shall any Participating Company be liable for any taxes,
penalties or interest that may be imposed on you pursuant to Section 409A or
under any other similar provision of state tax law, including but not limited
to, damages for failing to comply with Section 409A and/or any other similar
provision of state tax law.
Limitation on Offsets
No payment under the Plan that constitutes a deferral of compensation under Code
Section 409A may be offset against any of your indebtedness or as a result of
any other payment or benefit to you, if and to the extent that such offset would
constitute a change in the time of payment (including as a result of deemed
substitution of the indebtedness or other payment or benefit for the deferred
compensation) not compliant with Code Section 409A.
Timing of Certain Payments
If any amount payable during a fixed period (such as 60 days) following your
Separation from Service is subject to Code Section 409A and the fixed period
over which such amount is payable begins in one year and ends in a subsequent
year, payment shall commence in the subsequent year regardless of when you
return the Separation Agreement.
Possible Cap on Payments
If at any time, it shall be determined that any payment or benefit payable to
you pursuant to this Plan together with payments or benefits provided under any
other plan or agreement maintained by Clearwater Paper, any person whose actions
result in a “Change of Control” (as defined in the Change of Control Plan) or
any person affiliated with Clearwater Paper or such person (collectively, the
“Payments”) is or will become subject to the excise tax imposed by Section 4999
of the Code or any similar or successor tax on payments made in connection with
a change of control under any United States federal, state, local, foreign or
other law (“Excise Taxes”), then you will be paid either (i) the full amount of
the Payments or (ii) an amount equal to the Payments reduced by the minimum
amount necessary to prevent any portion of the Payments from being subject to
the Excise Taxes (the “Capped Payments”), whichever of the foregoing amounts
results in the receipt by you, on an after-tax basis, of the greatest amount of
Payments notwithstanding that all or some portion of the Payments may be subject
to the Excise Taxes.
For purposes of determining whether you would receive a greater after-tax
benefit from the Capped Payments than from receipt of the full amount of the
Payments, you shall be deemed to pay federal, state and local taxes at the
highest marginal rate of taxation for the applicable calendar year. If you are
determined to receive a greater after-tax benefit from the Capped Payments, the
Payments shall be reduced in a manner and order of priority that provides you
with the largest net after-tax value.

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Any such reduction shall be structured in a manner intended to comply with
Section 409A of the Code, to the extent applicable.
All computations and determinations called for by the preceding two paragraphs
shall be made and reported in writing to Clearwater Paper and you by a
third-party service provider selected by Clearwater Paper (the “Tax Advisor”),
and all such computations and determinations shall be conclusive and binding on
Clearwater Paper, all other Participating Companies and you. For purposes of
such calculations and determinations, the Tax Advisor may rely on reasonable,
good faith interpretations concerning the application of Sections 280G and 4999
of the Code. Clearwater Paper and you shall furnish to the Tax Advisor such
information and documents as the Tax Advisor may reasonably request in order to
make its required calculations and determinations. Clearwater Paper shall bear
all fees and expenses charged by the Tax Advisor in connection with its
services.
Assignment
The Plan shall inure to the benefit of and shall be enforceable by your personal
or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If you should die while any amount is still
payable to you under the Plan had you continued to live, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
the Plan to your estate in a single lump-sum within 90 days of your death. Your
rights under the Plan shall not otherwise be transferable or subject to lien or
attachment.
Other Benefits
Nothing in this document is intended to guarantee that benefit levels or costs
will remain unchanged in the future in any other plan, program or arrangement of
Clearwater Paper or its subsidiaries or affiliates. Clearwater Paper and its
subsidiaries and affiliates reserve the right to terminate, amend, modify,
suspend, or discontinue any such other plan, program or arrangement in
accordance with such plan, program and arrangement and applicable law.
Oral Statements
The payments and benefits hereunder shall supersede any oral statements made by
any employee, officer or director of Clearwater Paper or any of its subsidiaries
or affiliates regarding severance payments and benefits.
Successors and Assigns
This Plan shall be binding upon and inure to the benefit of Clearwater Paper,
the other Participating Companies and their respective successors and assigns,
and shall be binding upon and inure to the benefit of you and your legal
representatives, heirs and legatees.

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Section 6.
Administrative Information About Your Plan

Plan Administrator
The administration of the Plan is the responsibility of the Plan Administrator.
The Plan Administrator has the discretionary authority and responsibility for,
among other things, determining eligibility for benefits and construing and
interpreting the terms of the Plan. In addition, the Plan Administrator has the
authority, in its discretion, to delegate its responsibility to others. The
chart in Section 8 (“Other Administrative Facts”) contains the name and address
of the Plan Administrator.
Claim for Benefits
If you believe you are entitled to payments and benefits under the Plan, contact
the Plan Administrator in writing. A claim must be made within six (6) months of
your termination date. Any claim made beyond six (6) months after your
termination date shall be time barred and you will be expressly precluded from
receiving any severance payments and/or benefits under the Plan.
Claims Review Procedures
Only the Plan Administrator or its delegate (identified in “Other Administrative
Facts”) has the authority to decide claims. This means that if someone other
than the Plan Administrator, for example, your HR Generalist, says that you are
not eligible for severance, that statement is not a decision on a claim for
benefits – you would still have the right to make a claim and get an official
decision from the Plan Administrator or its delegate. You will be provided
written or electronic notification by the Plan Administrator or its delegate if
you are denied payments and benefits under the Plan or of any other adverse
benefit determination. The notice shall provide the specific reason(s) for the
determination and reference to the specific Plan provisions on which the
determination is based, a description of any additional material or information
necessary to perfect the claim and an explanation why such material or
information is necessary (if applicable), a description of the Plan’s appeal
procedures, including the time limits and a statement of your right to bring a
civil action following an appeal.
If a claim for benefits under the Plan is denied in full or in part or you
receive some other adverse benefit determination, you may appeal the decision to
the Plan Administrator or, following a Change of Control, to an “Appeals
Committee” appointed by Clearwater Paper and consisting of at least three (3)
current (as of the date of the Change of Control) or former Clearwater Paper
officers and directors. To appeal a decision, you must submit a written document
through the U.S. Postal Service or other courier service appealing the denial of
the claim within 60 days after the date of the claim denial. If you do not
submit an appeal within this 60 day period, you will not be entitled to appeal
the denial or adverse benefit determination. You may also include information or
other documentation in support of your claim. Upon request, you will be provided
reasonable access to and copies of, all documents, records and other information
relevant (as defined by ERISA) to your claim. You may have a qualified person
represent you during the appeal process. You will be notified of a decision
within 60 days (which may be extended to 120 days, if required) of the date your
appeal is received. If an extension of time is required by the plan, you will
receive notice of the

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reason for the extension within the initial 60-day period and a date by which
you can expect a decision.
Any decision on appeal shall be final, conclusive and binding upon all parties.
If the appeal is denied, however, you will be advised of your right to file a
claim in court.
Legal Action
You may not bring a lawsuit to recover benefits under the Plan until you have
exhausted the internal administrative process described above. No legal action
may be commenced at all unless commenced no later than one (1) year following
the issuance of a final decision on the claim for benefits, or the expiration of
the appeal decision period if no decision is issued pursuant to the Claims
Review Procedures described above. This one-year statute of limitations on suits
for all benefits shall apply in any forum where you may initiate such a suit.
Participating Companies
A complete list of the Participating Companies may be obtained from the Plan
Administrator by written request. (See the chart at the end of this section for
the name and address of the Plan Administrator.)
Section 7.
Your Rights and Privileges Under ERISA

As a participant in the Plan, you are entitled to certain rights and protection
under ERISA. ERISA provides that you shall be entitled to:
Receive Information About Your Plan and Benefits
Examine, without charge, at the Plan Administrator’s office and at other
specified locations all documents governing the Plan.
Obtain, upon written request to the Plan Administrator, copies of documents
governing the operation of the Plan and an updated summary plan description. The
Plan Administrator may make a reasonable charge for the copies.
Prudent Actions by Plan Fiduciaries
In addition to creating certain rights for you, ERISA imposes duties upon the
people who are responsible for the operation of the employee benefit plan. The
people who operate your plan, called “fiduciaries” of the plan, have a duty to
do so prudently and in the interest of you and other plan participants and
beneficiaries. No one, including your employer, or any other person, may fire
you or otherwise discriminate against you in any way to prevent you from
obtaining a welfare benefit or exercising your rights under ERISA.

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Enforce Your Rights
If your claim for a welfare benefit is denied or ignored, in whole or in part,
you have a right to know why this was done, to obtain copies of documents
relating to the decision without charge, and to appeal any denial, all within
certain time schedules.
Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request a copy of plan documents or the latest annual report
from the plan and do not receive them within 30 days, you may file suit in a
Federal court. In such a case, the court may require the Plan Administrator to
provide the materials and pay you up to $110 a day until you receive the
materials, unless the materials were not sent because of reasons beyond the
control of the administrator.
If you have a claim for benefits which is denied or ignored, in whole or in
part, you may file suit in a state or Federal court. In addition, if you
disagree with the plan’s decision or lack thereof concerning the qualified
status of a medical child support order, you may file suit in a Federal court.
If it should happen that you are discriminated against for asserting your
rights, you may seek assistance from the U.S. Department of Labor, or you may
file suit in a Federal court. The court will decide who should pay court costs
and legal fees. If you are successful, the court may order the person you sued
to pay these costs and fees. If you lose, the court may order you to pay these
costs and fees, for example, if it finds your claim is frivolous.
Assistance With Your Questions
If you have any questions about your plan, you should contact the Plan
Administrator. If you have any questions about this statement or about your
rights under ERISA, or if you need assistance in obtaining documents from the
Plan Administrator, you should contact the nearest office of the Employee
Benefits Security Administration, U.S. Department of Labor, listed in your
telephone directory or the Division of Technical Assistance and Inquiries,
Employee Benefits Security Administration, U.S. Department of Labor, 200
Constitution Avenue N.W., Washington, D.C. 20210. You may also obtain certain
publications about your rights and responsibilities under ERISA by calling the
publications hotline of the Employee Benefits Security Administration at
1-866-444-EBSA (3272) or accessing their website at http://www.dol.gov/ebsa.

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Section 8.
Other Administrative Facts

 
 
Name of Plan
 
Clearwater Paper Change of Control Plan
 
 
Type of Plan
 
Severance plan
 
 
Plan Records
 
Kept on a calendar-year basis
 
 
Plan Year
 
January 1 – December 31
 
 
Plan Funding
 

Clearwater Paper and other Participating Companies provide severance benefits
from general revenues
 
 
Plan Sponsor
 

Clearwater Paper Corporation
601 West Riverside Avenue, Suite 1100
Spokane, WA 99201
Employer identification number: 20-3594554
 
 
Plan Administrator and Named Fiduciary
 

Clearwater Paper Benefits Committee
c/o Associate General Counsel
Clearwater Paper Corporation
601 West Riverside Avenue, Suite 1100
Spokane, WA 99201
Telephone: (509) 344-5900

 
 
Agent for Service of Legal Process on the Plan
 

Legal process may be served on the Plan Administrator (c/o the Associate General
Counsel) at the address shown above. 

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