Exhibit 10.12

AMENDED AND RESTATED LETTER OF AGREEMENT

BLUE RIDGE PAPER PRODUCTS INC.

Amended and Restated as of February 14, 2007

Robert M. Shanahan
21 Dianthus Drive
Asheville, North Carolina 28803

Dear Bob:

This amended and restated letter confirms the terms and conditions of your
continued employment as Vice President Manufacturing and Mill Manager of Blue
Ridge Paper Products Inc. (the “Company”):

1.                                       POSITION.  YOU ARE EMPLOYED AS VICE
PRESIDENT MANUFACTURING AND MILL MANAGER  OF THE COMPANY.  IN THAT CAPACITY, YOU
REPORT TO THE VP AND GENERAL MANAGER/PAPER OF THE COMPANY.  YOU AGREE THAT YOU
SHALL CONTINUE TO DEVOTE YOUR FULL BUSINESS TIME AND EFFORTS TO PROMOTE THE
INTERESTS OF THE COMPANY.

2.                                       TERM.  THE TERM OF YOUR CONTINUED
EMPLOYMENT PURSUANT TO THIS AMENDED AND RESTATED LETTER AGREEMENT COMMENCED ON
FEBRUARY 14, 2007 (THE “COMMENCEMENT DATE”) AND SHALL CONTINUE THROUGH AND
INCLUDING THE EARLIER OF (I) THE END OF THE TERM (AS HEREINAFTER DEFINED) OR
(II) THE DATE ON WHICH YOUR EMPLOYMENT IS TERMINATED PURSUANT TO THIS LETTER
AGREEMENT.  AS USED HEREIN, THE “TERM” SHALL MEAN THE PERIOD COMMENCING ON THE
COMMENCEMENT DATE AND ENDING ON DECEMBER 31, 2011; PROVIDED, HOWEVER, THAT
THEREAFTER THE TERM SHALL BE AUTOMATICALLY RENEWED FOR SUCCESSIVE ADDITIONAL
ONE-YEAR PERIODS UNLESS EITHER PARTY SHALL GIVE THE OTHER PARTY AT LEAST
THIRTY (30) DAYS’ PRIOR WRITTEN NOTICE OF NON-RENEWAL BEFORE THE END OF THE
THEN-CURRENT PERIOD.

3.                                       DUTIES.  YOU SHALL HAVE SUCH DUTIES AND
RESPONSIBILITIES AS ARE CONSISTENT WITH THE ROLE OF VICE PRESIDENT MANUFACTURING
AND MILL MANAGER, AND SUCH OTHER DUTIES AND RESPONSIBILITIES AS THE CEO OR BOARD
MAY REASONABLY ASSIGN YOU.

4.                                       SALARY AND BONUS.  THE COMPANY PAYS YOU
A BASE SALARY, PAYABLE IN ACCORDANCE WITH THE NORMAL PAYMENT PROCEDURES OF THE
COMPANY AND SUBJECT TO SUCH WITHHOLDINGS AND OTHER NORMAL EMPLOYEE DEDUCTIONS AS
MAY BE REQUIRED BY LAW OR ELECTED BY YOU IN ACCORDANCE WITH THE COMPANY’S
BENEFIT PLANS, AT A CURRENT ANNUAL RATE OF $189,900 (SUCH SALARY, AS THE SAME
MAY BE CHANGED FROM TIME TO TIME IN THE SOLE DISCRETION OF THE BOARD, YOUR
“SALARY”).  YOU ALSO ARE ELIGIBLE TO RECEIVE AN ANNUAL CASH BONUS PAYMENT IN
ACCORDANCE WITH THE BLUE RIDGE PAPER PRODUCTS PERFORMANCE INCENTIVE PLAN AS THE
SAME MAY BE IN EFFECT FROM TIME TO TIME IN THE SOLE DISCRETION OF THE BOARD.

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5.                                       EMPLOYEE BENEFIT PROGRAMS.  YOU ARE
ENTITLED TO PARTICIPATE DURING THE TERM IN SUCH PENSION, LIFE INSURANCE, HEALTH,
DISABILITY AND MAJOR MEDICAL INSURANCE PLANS, AND IN SUCH OTHER EMPLOYEE BENEFIT
PLANS AND PROGRAMS, FOR THE BENEFIT OF THE EMPLOYEES OF THE COMPANY, AS MAY BE
MAINTAINED FROM TIME TO TIME DURING THE TERM, IN EACH CASE, SUBJECT TO THE TERMS
AND PROVISIONS OF SUCH PLANS OR PROGRAMS.  IN ADDITION, THE COMPANY SHALL MAKE
ANNUAL CONTRIBUTIONS TO YOUR ACCOUNT UNDER THE BLUE RIDGE PAPER PRODUCTS
EMPLOYEE STOCK OWNERSHIP PLAN MAINTAINED BY THE PARENT COMPANY OF THE COMPANY,
BLUE RIDGE HOLDING CORP., IN ACCORDANCE WITH THE TERMS AND CONDITIONS THEREOF. 
YOU WILL ALSO CONTINUE TO BE ELIGIBLE TO PARTICIPATE IN THE RESTRICTED STOCK
UNIT PLAN MAINTAINED BY BLUE RIDGE HOLDING CORP. FOR THE BENEFIT OF CERTAIN
EXECUTIVE OFFICERS OF THE COMPANY IN ACCORDANCE WITH THE TERMS AND CONDITIONS
THEREOF.

6.                                       VACATION.  YOU ARE CURRENTLY ENTITLED
TO FIVE WEEKS OF PAID VACATION PER ANNUM DURING THE TERM OF YOUR EMPLOYMENT IN
ACCORDANCE WITH COMPANY POLICY.  VACATION SCHEDULING WILL BE ON A MUTUALLY
AGREEABLE BASIS, IN ACCORDANCE WITH THE COMPANY’S BUSINESS NEEDS.

7.                                       TERMINATION FOR CAUSE.  THE COMPANY MAY
TERMINATE YOUR EMPLOYMENT AT ANY TIME FOR “CAUSE” (AS DEFINED BELOW) UPON
WRITTEN NOTICE TO YOU TO TAKE EFFECT ON THE DATE SPECIFIED IN SUCH NOTICE.  IF
YOUR EMPLOYMENT IS TERMINATED BY THE COMPANY FOR CAUSE, THE COMPANY WILL PAY TO
YOU THE FOLLOWING BENEFITS WITHIN THIRTY (30) DAYS FOLLOWING THE EFFECTIVE DATE
OF SUCH TERMINATION:

(A)                                  ANY SALARY OR OTHER COMPENSATION EARNED BUT
NOT PAID TO YOU PRIOR TO THE DATE OF SUCH TERMINATION;

(B)                                 REIMBURSEMENT FOR ANY UNREIMBURSED BUSINESS
EXPENSES INCURRED THROUGH THE DATE OF SUCH TERMINATION;

(C)                                  ANY ACCRUED BUT UNUSED VACATION TIME IN
ACCORDANCE WITH COMPANY POLICY; AND

(D)                                 ALL OTHER PAYMENTS, BENEFITS OR FRINGE
BENEFITS TO WHICH YOU SHALL BE ENTITLED UNDER THE TERMS OF ANY APPLICABLE
COMPENSATION ARRANGEMENT OR BENEFIT, EQUITY OR FRINGE BENEFIT PLAN OR PROGRAM OR
GRANT OR THIS LETTER AGREEMENT (COLLECTIVELY, PARAGRAPHS 7(A) THROUGH 7(D)
HEREOF SHALL BE HEREAFTER REFERRED TO AS THE “ACCRUED BENEFITS”).

Upon the Company’s termination of your employment Cause, the Company shall have
no obligation to pay you severance of any kind, nor shall the Company have any
further obligation to pay you Salary, bonus or benefits.

For purposes of this letter agreement, “Cause” shall mean:  (i) the willful or
negligent failure or refusal by you to perform your duties hereunder; provided
that the Company shall provide you with at least 15 days’ prior written notice
of such failure or refusal and an opportunity to cure the same; (ii) the
commission by you of any material act of dishonesty or breach of trust in
connection with the performance of your duties hereunder; (iii) your being
convicted of, or pleading guilty or no contest to, any felony or any lesser
crime having as its predicate element fraud, dishonesty or misappropriation; or
(iv) a termination due to breach of

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your obligations under paragraphs 13, 14, 15, 16 or 17 of this letter agreement,
in each case, as determined in good faith by the Board.

8.                                       TERMINATION WITHOUT CAUSE.  THE COMPANY
MAY TERMINATE YOUR EMPLOYMENT AT ANY TIME WITHOUT CAUSE UPON WRITTEN NOTICE TO
YOU TO TAKE EFFECT ON THE DATE SPECIFIED IN SUCH NOTICE.  IF YOUR EMPLOYMENT IS
TERMINATED BY THE COMPANY WITHOUT CAUSE, THE COMPANY SHALL, SUBJECT TO THE
PROVISIONS OF PARAGRAPHS 24 AND 25 HEREOF, PAY OR PROVIDE THE FOLLOWING
BENEFITS:

(A)                                  THE ACCRUED BENEFITS WITHIN THIRTY (30)
DAYS FOLLOWING THE EFFECTIVE DATE OF SUCH TERMINATION;

(B)                                 THE EQUIVALENT OF YOUR AVERAGE SALARY AND
BONUS COMPENSATION (BASED ON THE LAST FIVE YEARS’ AVERAGE) (BUT NOT AS AN
EMPLOYEE), PAYABLE FOR A PERIOD OF ONE (1) YEAR FOLLOWING THE DATE OF SUCH
TERMINATION IN ACCORDANCE WITH THE NORMAL PAYROLL PRACTICES OF THE COMPANY AS IN
EFFECT FROM TIME TO TIME; AND

(C)                                  SUBJECT TO (I) YOUR TIMELY ELECTION OF
CONTINUATION COVERAGE UNDER THE CONSOLIDATED OMNIBUS BUDGET RECONCILIATION ACT
OF 1985, AS AMENDED (“COBRA”), AND (II) YOUR PAYMENT OF THE COBRA PREMIUMS
ASSOCIATED THEREWITH, CONTINUED PARTICIPATION IN THE COMPANY’S GROUP HEALTH PLAN
(TO THE EXTENT PERMITTED UNDER APPLICABLE LAW AND THE TERMS OF SUCH PLAN) WHICH
COVERS YOU FOR A PERIOD OF TWELVE (12) MONTHS, PROVIDED THAT YOU ARE ELIGIBLE
AND REMAIN ELIGIBLE FOR COBRA COVERAGE; AND PROVIDED, FURTHER, THAT IN THE EVENT
THAT YOU OBTAIN OTHER EMPLOYMENT THAT OFFERS GROUP HEALTH BENEFITS, SUCH
CONTINUATION OF COVERAGE BY THE COMPANY SHALL IMMEDIATELY CEASE;

PROVIDED, HOWEVER, THAT ANY OBLIGATIONS OF THE COMPANY TO YOU PURSUANT TO THIS
PARAGRAPH 8 SHALL TERMINATE UPON ANY MATTER CONSTITUTING CAUSE BECOMING KNOWN TO
THE COMPANY SUBSEQUENT TO SUCH TERMINATION.  EXCEPT AS SET FORTH IN THIS
PARAGRAPH 8, UPON SUCH A TERMINATION, NEITHER YOU NOR THE COMPANY SHALL HAVE ANY
FURTHER RIGHTS, OBLIGATIONS OR CLAIMS AGAINST THE OTHER EXCEPT AS SPECIFICALLY
PROVIDED UNDER THIS LETTER AGREEMENT OR IMPOSED BY LAW.

9.                                       TERMINATION WITH GOOD REASON.  YOU MAY
VOLUNTARILY TERMINATE YOUR EMPLOYMENT AT ANY TIME WITH “GOOD REASON” (AS DEFINED
BELOW) UPON WRITTEN NOTICE TO TAKE EFFECT ON THE DATE SPECIFIED IN SUCH NOTICE. 
IN THE EVENT OF ANY SUCH TERMINATION UNDER THIS PARAGRAPH 9, THE COMPANY SHALL,
SUBJECT TO THE PROVISIONS OF PARAGRAPHS 24 AND 25 HEREOF, PAY OR PROVIDE THE
FOLLOWING BENEFITS:

(A)                                  THE ACCRUED BENEFITS WITHIN THIRTY (30)
DAYS FOLLOWING THE EFFECTIVE DATE OF SUCH TERMINATION;

(B)                                 THE EQUIVALENT OF YOUR AVERAGE SALARY AND
BONUS COMPENSATION (BASED ON THE LAST FIVE YEARS’ AVERAGE) (BUT NOT AS AN
EMPLOYEE), PAYABLE FOR A PERIOD OF ONE (1) YEAR FOLLOWING THE DATE OF SUCH
TERMINATION IN ACCORDANCE WITH THE NORMAL PAYROLL PRACTICES OF THE COMPANY AS IN
EFFECT FROM TIME TO TIME; AND

(C)                                  SUBJECT TO (I) YOUR TIMELY ELECTION OF
CONTINUATION COVERAGE UNDER THE COBRA, AND (II) YOUR PAYMENT OF THE COBRA
PREMIUMS ASSOCIATED THEREWITH, CONTINUED PARTICIPATION IN THE COMPANY’S GROUP
HEALTH PLAN (TO THE EXTENT PERMITTED UNDER APPLICABLE LAW

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AND THE TERMS OF SUCH PLAN) WHICH COVERS YOU FOR A PERIOD OF TWELVE (12) MONTHS,
PROVIDED THAT YOU ARE ELIGIBLE AND REMAIN ELIGIBLE FOR COBRA COVERAGE; AND
PROVIDED, FURTHER, THAT IN THE EVENT THAT YOU OBTAIN OTHER EMPLOYMENT THAT
OFFERS GROUP HEALTH BENEFITS, SUCH CONTINUATION OF COVERAGE BY THE COMPANY SHALL
IMMEDIATELY CEASE;

PROVIDED, HOWEVER, THAT ANY OBLIGATIONS OF THE COMPANY TO YOU PURSUANT TO THIS
PARAGRAPH 9 SHALL TERMINATE UPON ANY MATTER CONSTITUTING CAUSE BECOMING KNOWN TO
THE COMPANY SUBSEQUENT TO SUCH TERMINATION.  EXCEPT AS SET FORTH IN THIS
PARAGRAPH 9, UPON SUCH A TERMINATION, NEITHER YOU NOR THE COMPANY SHALL HAVE ANY
FURTHER RIGHTS, OBLIGATIONS OR CLAIMS AGAINST THE OTHER EXCEPT AS SPECIFICALLY
PROVIDED UNDER THIS LETTER AGREEMENT OR IMPOSED BY LAW.

For purposes of this letter agreement, “Good Reason” shall mean the Company,
without your consent, (i) assigns to you duties inconsistent with your position,
title, authority or duties that results in a substantial diminution of such
position, title, authority or duties; provided that you shall provide the
Company with at least fifteen (15) days’ prior written notice of such diminution
and the Company shall not have remedied such diminution within fifteen (15) days
of receipt of such notice; or (ii) the Company materially breaches this letter
agreement and fails to cure such breach within fifteen (15) days of written
notice thereof.

10.                                 TERMINATION FOLLOWING A CHANGE OF CONTROL.

(A)                                  IF, WITHIN EIGHTEEN (18) MONTHS OF A
“CHANGE OF CONTROL” (AS DEFINED BELOW) YOUR EMPLOYMENT IS TERMINATED FOR ANY
REASON OR NO REASON BY THE COMPANY (EXCEPT A TERMINATION BY THE COMPANY FOR
CAUSE) OR FOR ANY REASON OR NO REASON BY YOU (INCLUDING ANY SUCH TERMINATION
WITHOUT GOOD REASON), THE COMPANY SHALL PAY OR PROVIDE YOU WITH THE BENEFITS SET
FORTH IN THIS PARAGRAPH 10(A), SUBJECT TO THE PROVISIONS OF PARAGRAPHS 24 AND 25
HEREOF.  NOTWITHSTANDING THE FOREGOING, YOU SHALL NOT BE ENTITLED TO RECEIVE ANY
OF THE PAYMENTS OR BENEFITS SET FORTH IN THIS PARAGRAPH 10(A) IF YOU ARE OFFERED
“COMPARABLE EMPLOYMENT” (AS DEFINED BELOW) BY THE COMPANY (OR ITS SUCCESSOR)
WITHIN SIXTY (60) DAYS FOLLOWING THE CONSUMMATION OF THE CHANGE IN CONTROL.

(I)                                     THE ACCRUED BENEFITS WITHIN THIRTY (30)
DAYS FOLLOWING THE EFFECTIVE DATE OF SUCH TERMINATION.

(II)                                  A LUMP SUM PAYMENT WITHIN THIRTY (30) DAYS
FOLLOWING THE EFFECTIVE DATE OF SUCH TERMINATION EQUAL TO THREE (3) TIMES THE
SUM OF (A) YOUR AVERAGE SALARY PLUS (B) YOUR AVERAGE BONUS COMPENSATION (EACH,
BASED ON THE LAST FIVE YEARS’ AVERAGE).

(III)                               SUBJECT TO (A) YOUR TIMELY ELECTION OF
CONTINUATION COVERAGE UNDER THE COBRA, AND (B) YOUR PAYMENT OF THE COBRA
PREMIUMS ASSOCIATED THEREWITH, CONTINUED PARTICIPATION IN THE COMPANY’S GROUP
HEALTH PLAN (TO THE EXTENT PERMITTED UNDER APPLICABLE LAW AND THE TERMS OF SUCH
PLAN) WHICH COVERS YOU FOR A PERIOD OF EIGHTEEN (18) MONTHS, PROVIDED THAT YOU
ARE ELIGIBLE AND REMAIN ELIGIBLE FOR COBRA COVERAGE; AND PROVIDED, FURTHER, THAT
IN THE EVENT THAT YOU OBTAIN OTHER EMPLOYMENT THAT OFFERS

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GROUP HEALTH BENEFITS, SUCH CONTINUATION OF COVERAGE BY THE COMPANY SHALL
IMMEDIATELY CEASE.

(B)                                 NOTWITHSTANDING ANY OTHER PROVISION OF THIS
LETTER AGREEMENT TO THE CONTRARY, TO THE EXTENT THAT YOU BECOME ENTITLED TO
CHANGE IN CONTROL SEVERANCE BENEFITS UNDER THIS PARAGRAPH 10, SUCH BENEFITS
SHALL BE IN LIEU OF, AND NOT IN ADDITION TO, THE SEVERANCE BENEFITS THAT WOULD
OTHERWISE BECOME PAYABLE PURSUANT TO THE PROVISIONS OF PARAGRAPH 7, 8, 9 OR 11
HEREOF.

(C)                                  NOTWITHSTANDING ANY OTHER PROVISION OF THIS
LETTER AGREEMENT TO THE CONTRARY, IN THE EVENT ANY PAYMENT THAT IS EITHER
RECEIVED BY YOU OR PAID BY THE COMPANY ON YOUR BEHALF OR ANY PROPERTY, OR ANY
OTHER BENEFIT PROVIDED TO YOU UNDER THIS LETTER AGREEMENT OR UNDER ANY OTHER
PLAN, ARRANGEMENT OR AGREEMENT WITH THE COMPANY OR ANY OTHER PERSON WHOSE
PAYMENTS OR BENEFITS ARE TREATED AS CONTINGENT ON A CHANGE OF OWNERSHIP OR
CONTROL OF THE COMPANY (OR IN THE OWNERSHIP OF A SUBSTANTIAL PORTION OF THE
ASSETS OF THE COMPANY) OR ANY PERSON AFFILIATED WITH THE COMPANY OR SUCH PERSON
(BUT ONLY IF SUCH PAYMENT OR OTHER BENEFIT IS IN CONNECTION WITH YOUR EMPLOYMENT
BY THE COMPANY) (COLLECTIVELY THE “COMPANY PAYMENTS”), WILL BE SUBJECT TO THE
TAX (THE “EXCISE TAX”) IMPOSED BY SECTION 4999 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE “CODE”), (AND ANY SIMILAR TAX THAT MAY HEREAFTER BE
IMPOSED BY ANY TAXING AUTHORITY), THE COMPANY PAYMENTS WILL BE AUTOMATICALLY
REDUCED TO AN AMOUNT THAT EQUALS THE PRODUCT OF 2.99 MULTIPLIED BY YOUR “BASE
AMOUNT” (AS DETERMINED IN ACCORDANCE WITH  SECTION 280G OF THE CODE AND THE
TREASURY REGULATIONS THEREUNDER), SUCH THAT YOU WILL NOT BE SUBJECT TO THE
EXCISE TAX.  UNLESS OTHERWISE ELECTED BY YOU, SUCH REDUCTION SHALL FIRST BE
APPLIED TO ANY COMPANY PAYMENT PAYABLE TO YOU UNDER THIS LETTER AGREEMENT.

(D)                                 DEFINITIONS.

(I)                                     FOR PURPOSES OF THIS LETTER AGREEMENT,
“CHANGE OF CONTROL” MEANS THE OCCURRENCE OF ONE OR MORE OF THE FOLLOWING
EVENTS:  (I) ANY DIRECT OR INDIRECT SALE, LEASE, TRANSFER, CONVEYANCE OR OTHER
DISPOSITION (OTHER THAN BY WAY OF MERGER OR CONSOLIDATION), IN ONE TRANSACTION
OR A SERIES OF RELATED TRANSACTIONS, OF ALL OR SUBSTANTIALLY ALL OF THE ASSETS
OF THE COMPANY TO ANY PERSON, OTHER THAN A TRANSACTION IN WHICH THE TRANSFEREE
IS CONTROLLED BY ONE OR MORE “PERMITTED HOLDERS” (AS HEREINAFTER DEFINED); (II)
THE COMPANY CONSOLIDATES OR MERGERS WITH OR INTO ANY PERSON OTHER THAN A
TRANSACTION IN WHICH THE SURVIVING PERSON IS CONTROLLED BY ONE OR MORE PERMITTED
HOLDERS OR ANY SUCH TRANSACTION WHERE THE VOTING STOCK OF THE COMPANY
OUTSTANDING IMMEDIATELY PRIOR TO SUCH TRANSACTION IS CONVERTED OR EXCHANGED FOR
VOTING STOCK OF THE SURVIVING PERSON CONSTITUTING A MAJORITY OF THE OUTSTANDING
SHARES OF SUCH VOTING STOCK OF SUCH SURVIVING PERSON AND ONE OR MORE PERMITTED
HOLDERS HAVE THE RIGHT TO ELECT A MAJORITY OF THE BOARD OF DIRECTORS OF SUCH
SURVIVING PERSON; (III) THE APPROVAL BY THE HOLDERS OF CAPITAL STOCK OF THE
COMPANY OF ANY PLAN OR PROPOSAL FOR THE LIQUIDATION OR DISSOLUTION OF THE
COMPANY; OR (IV) THE PERMITTED HOLDERS, OR ANY ONE OR MORE OF THEM, CEASE FOR
ANY REASON TO BE THE BENEFICIAL OWNER, DIRECTLY OR INDIRECTLY, IN THE AGGREGATE
OF AT LEAST A MAJORITY OF THE TOTAL VOTING POWER OF THE VOTING STOCK OF THE
COMPANY (OR IF THE VOTING STOCK OF

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THE COMPANY IS WHOLLY OWNED BY A PARENT HOLDING COMPANY, THE VOTING STOCK OF
SUCH PARENT HOLDING COMPANY).  FOR PURPOSES OF THIS LETTER AGREEMENT, “PERMITTED
HOLDERS” SHALL MEAN AND INCLUDE EACH OF THE BLUE RIDGE PAPER PRODUCTS EMPLOYEE
STOCK OWNERSHIP PLAN, KPS INVESTORS, LLC, KPS SPECIAL SITUATIONS FUND, L.P., KPS
SUPPLEMENTAL FUND, L.P. AND THEIR RESPECTIVE AFFILIATES.

(II)                                  FOR PURPOSES OF THIS LETTER AGREEMENT, THE
TERM “COMPARABLE EMPLOYMENT” SHALL MEAN A POSITION WITH THE COMPANY (OR ITS
SUCCESSOR) ON AND FOLLOWING A CHANGE IN CONTROL (A) WITH THE SAME OR HIGHER
SALARY, TARGET BONUS OPPORTUNITY, AND, IN THE AGGREGATE, WELFARE BENEFITS AS IN
EFFECT IMMEDIATELY PRIOR TO THE CHANGE IN CONTROL, (B) WITH THE SAME OR HIGHER
LEVEL OF DUTIES, AUTHORITIES AND RESPONSIBILITIES (EXCEPT FOR ANY REDUCTION IN
SUCH DUTIES, AUTHORITIES OR RESPONSIBILITIES THAT RESULTS SOLELY DUE TO THE
COMPANY NO LONGER HAVING ANY PUBLICLY TRADED DEBT OR EQUITY SECURITIES) AS IN
EFFECT IMMEDIATELY PRIOR TO THE CHANGE IN CONTROL, AND (C) WHICH DOES NOT
REQUIRE YOU TO RELOCATE YOUR PRINCIPAL BUSINESS LOCATION BEYOND 50 MILES FROM
YOUR PRINCIPAL BUSINESS LOCATION IMMEDIATELY PRIOR TO THE CHANGE IN CONTROL.

11.                                 TERMINATION WITHOUT GOOD REASON.  YOU MAY
VOLUNTARILY TERMINATE YOUR EMPLOYMENT WITHOUT GOOD REASON UPON PROVIDING AT
LEAST THIRTY (30) DAYS’ WRITTEN NOTICE TO THE COMPANY, OR SUCH SHORTER PERIOD AS
THE COMPANY MAY ALLOW.  IF YOUR EMPLOYMENT IS TERMINATED PURSUANT TO THIS
PARAGRAPH 11, THE COMPANY WILL PAY TO YOU THE ACCRUED BENEFITS WITHIN THIRTY
(30) DAYS FOLLOWING THE EFFECTIVE DATE OF SUCH TERMINATION.  UPON SUCH
TERMINATION, THE COMPANY SHALL HAVE NO OBLIGATION TO PAY YOU SEVERANCE OF ANY
KIND, NOR SHALL THE COMPANY HAVE ANY FURTHER OBLIGATION TO PAY YOU SALARY, BONUS
OR BENEFITS.

12.                                 TERMINATION DUE TO DEATH OR DISABILITY. 
YOUR EMPLOYMENT WITH THE COMPANY WILL TERMINATE AUTOMATICALLY UPON YOUR DEATH. 
IN ADDITION, THE COMPANY MAY TERMINATE YOUR EMPLOYMENT WITH THE COMPANY DUE TO
DISABILITY.  FOR PURPOSES OF HEREOF, “DISABILITY” SHALL BE DEFINED AS YOUR
INABILITY TO HAVE PERFORMED YOUR MATERIAL DUTIES HEREUNDER DUE TO A PHYSICAL OR
MENTAL INJURY, INFIRMITY OR INCAPACITY FOR NINETY (90) DAYS (INCLUDING WEEKENDS
AND HOLIDAYS) IN ANY 365-DAY PERIOD.  IF YOUR EMPLOYMENT IS TERMINATED PURSUANT
TO THIS PARAGRAPH 12, THE COMPANY WILL PAY TO YOU (OR YOUR ESTATE) THE ACCRUED
BENEFITS WITHIN THIRTY (30) DAYS FOLLOWING THE EFFECTIVE DATE OF SUCH
TERMINATION.  UPON SUCH TERMINATION, THE COMPANY SHALL HAVE NO OBLIGATION TO PAY
YOU (OR YOUR ESTATE) SEVERANCE OF ANY KIND, NOR SHALL THE COMPANY HAVE ANY
FURTHER OBLIGATION TO PAY YOU (OR YOUR ESTATE) SALARY, BONUS OR BENEFITS.

13.                                 NON-COMPETITION.  BY SIGNING THIS LETTER
AGREEMENT, YOU ACKNOWLEDGE AND AGREE THAT THE SERVICES YOU PERFORM FOR THE
COMPANY ARE SERVICES THAT ARE UNIQUE AND EXTRAORDINARY AND THAT, BY REASON OF
YOUR EMPLOYMENT, YOU WILL ACQUIRE AND HAVE ACCESS TO PROPRIETARY AND
CONFIDENTIAL INFORMATION, AS DEFINED HEREIN BELOW, AND TRADE SECRETS CONCERNING
THE COMPANY’S OPERATIONS, FUTURE PLANS AND METHODS OF DOING BUSINESS AND THOSE
OF THE COMPANY’S AFFILIATES.  ACCORDINGLY, YOU AGREE THAT:

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(A)                                  IN CONNECTION WITH ANY TERMINATION OF YOUR
EMPLOYMENT BY YOU PURSUANT TO THE TERMS OF THIS LETTER AGREEMENT, WHETHER WITH
OR WITHOUT GOOD REASON, THE WRITTEN NOTICE OF SUCH TERMINATION SHALL INCLUDE, TO
THE EXTENT AVAILABLE, THE NAME OF YOUR NEW EMPLOYER AND A DESCRIPTION OF YOUR
NEW POSITION, DUTIES AND RESPONSIBILITIES.

(B)                                 DURING THE TERM OF YOUR EMPLOYMENT AND
DURING THE RESTRICTIVE PERIOD, AS DEFINED BELOW, YOU WILL NOT, ABSENT PRIOR
WRITTEN CONSENT FROM THE COMPANY, DIRECTLY OR INDIRECTLY, ENGAGE IN A
COMPETITIVE BUSINESS ACTIVITY IN THE UNITED STATES.  THE TERM “COMPETITIVE
BUSINESS ACTIVITY” SHALL MEAN:

(I)                                     ENGAGING IN OR MANAGING OR DIRECTING
PERSONS ENGAGING IN THE MANUFACTURE, SALE OR DISTRIBUTION OF LIQUID PACKAGING
BOARD, INCLUDING GABLE TOP CARTONS AND/OR UNCOATED FREESHEET PAPER FOR
ENVELOPES, AND/OR ANY OTHER PRODUCT THAT THE COMPANY OR ANY “AFFILIATE” (AS
DEFINED BELOW) MANUFACTURES, SELLS OR DISTRIBUTES (“COMPETING BUSINESS”),
WHETHER INDEPENDENTLY OR AS AN EMPLOYEE, AGENT, CONSULTANT, ADVISOR, INDEPENDENT
CONTRACTOR, PROPRIETOR, PARTNER, OFFICER, DIRECTOR OR OTHERWISE;

(II)                                  ACQUIRING OR HAVING AN OWNERSHIP INTEREST
IN AN ENTITY THAT DERIVES MORE THAN 10% OF ITS GROSS REVENUE FROM ANY COMPETING
BUSINESS, EXCEPT FOR OWNERSHIP OF 1% OR LESS OF ANY ENTITY WHOSE SECURITIES ARE
FREELY TRADABLE ON AN ESTABLISHED MARKET; OR

(III)                               PARTICIPATING IN THE FINANCING, OPERATION,
MANAGEMENT OR CONTROL OF ANY FIRM, PARTNERSHIP, CORPORATION, ENTITY OR BUSINESS
DESCRIBED IN SUBPARAGRAPH (II) IMMEDIATELY ABOVE.

The term “Restrictive Period” shall mean the period beginning upon a termination
of your employment with the Company and ending on the date which is (i) in the
event that your employment is terminated pursuant to paragraphs 7 or 11, the
second anniversary of such termination or (ii) in the event that your employment
is terminated pursuant to paragraphs 8, 9, 10 or 12, the first anniversary of
such termination.

Notwithstanding the foregoing, the provisions of this paragraph 13 shall not
apply following any termination of your employment (including a termination by
the Company for Cause or by you without Good Reason) that occurs within 18
months following a Change in Control of the Company.

14.                                 NON-SOLICITATION.  DURING THE TERM OF YOUR
EMPLOYMENT AND DURING THE RESTRICTIVE PERIOD, YOU WILL NOT, EITHER FOR YOUR
BENEFIT OR FOR THE BENEFIT OF ANY OTHER PERSON OR ENTITY, DIRECTLY OR
INDIRECTLY, SOLICIT ANY CONTRACTOR OR EMPLOYEE OF THE COMPANY OR ITS AFFILIATES
TO TERMINATE HIS OR HER EMPLOYMENT OR OTHER RELATIONSHIP WITH THE COMPANY OR IT
AFFILIATES.

15.                                 NON-DISCLOSURE OF CONFIDENTIAL INFORMATION. 
BY SIGNING THIS LETTER AGREEMENT, YOU RECOGNIZE THAT YOUR SERVICES AS AN
EMPLOYEE OF THE COMPANY ARE UNIQUE SERVICES, AND THAT BY REASON OF YOUR
EMPLOYMENT YOU WILL HAVE ACCESS TO AND ACQUIRE PROPRIETARY AND OTHER
CONFIDENTIAL INFORMATION AND TRADE SECRETS CONCERNING OPERATIONS, FUTURE PLANS
AND METHODS OF DOING BUSINESS OF THE COMPANY, ITS AFFILIATES AND THEIR
RESPECTIVE CLIENTS.  ACCORDINGLY, YOU

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HEREBY COVENANT THAT YOU WILL NOT AT ANY TIME DURING YOUR EMPLOYMENT BY THE
COMPANY OR ANY TIME THEREAFTER REVEAL OR DIVULGE TO ANY PERSON, FIRM,
CORPORATION OR OTHER BUSINESS ENTITY OR USE FOR YOUR OWN PERSONAL OR BUSINESS
PURPOSES OR FOR THE PERSONAL OR BUSINESS PURPOSES OF ANY OTHER PERSON (OTHER
THAN THE COMPANY) ANY TRADE SECRETS OR CONFIDENTIAL INFORMATION OR KNOWLEDGE
RELATING TO THE BUSINESS OR BUSINESSES OF THE COMPANY, ITS AFFILIATES OR THEIR
RESPECTIVE CLIENTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
ANY INFORMATION OR KNOWLEDGE PERTAINING TO PRODUCTS, FORMULAE OR PROCESSES, AND
DEVELOPMENTS OR IMPROVEMENTS WITH RESPECT THERETO, INVENTIONS, DISCOVERIES,
TRADEMARK, PATENTS, DESIGNS, SKETCHES, MANUFACTURING, PACKAGING, MERCHANDISING,
ADVERTISING, DISTRIBUTION AND SALES METHODS, SALES AND PROFITS FIGURES,
BUDGETING MATERIALS, CUSTOMER LISTS AND RELATIONSHIPS BETWEEN THE COMPANY AND
ANY OF ITS CUSTOMERS, SUPPLIERS, ULTIMATE CONSUMERS OR AFFILIATES (COLLECTIVELY,
“CONFIDENTIAL INFORMATION”).  NOTWITHSTANDING THE FOREGOING, CONFIDENTIAL
INFORMATION SHALL NOT INCLUDE INFORMATION THAT (I) WAS, OR BECOMES THROUGH NO
BREACH OF YOUR OBLIGATIONS HEREUNDER, GENERALLY KNOWN TO THE PUBLIC; OR (II)
BECOMES KNOWN TO YOU FROM SOURCES OTHER THAN THE COMPANY UNDER CIRCUMSTANCES NOT
INVOLVING ANY BREACH OF AN AGREEMENT TO WHICH ANY SUCH SOURCE IS A PARTY.  AS
USED IN THIS LETTER AGREEMENT, THE TERM “AFFILIATE” MEANS, WITH RESPECT TO A
SPECIFIED INDIVIDUAL OR ENTITY, ANY OTHER INDIVIDUAL OR ENTITY THAT DIRECTLY OR
INDIRECTLY, THROUGH ONE OR MORE INTERMEDIARIES, CONTROLS, IS CONTROLLED BY OR IS
UNDER COMMON CONTROL WITH SUCH SPECIFIED INDIVIDUAL OR ENTITY.  AS USED IN THIS
LETTER AGREEMENT, THE TERM “CLIENT” MEANS ANY PERSON, FIRM OR CORPORATION TO
WHOM GOODS, SERVICES OR INTELLECTUAL PROPERTY ARE ACTIVELY BEING SUPPLIED BY THE
COMPANY OR AN AFFILIATE FOR COMPENSATION AT THE TIME YOU LEARN OF SUCH PERSON’S,
FIRM’S OR CORPORATION’S CONFIDENTIAL INFORMATION, OR TO WHOM THE COMPANY OR AN
AFFILIATE IS AT SUCH TIME ACTIVELY SOLICITING A BUSINESS RELATIONSHIP TO ENGAGE
IN SUCH ACTIVITIES.  YOU ACKNOWLEDGE THAT ANY MATERIALS OR DOCUMENTS RELATING TO
THE COMPANY’S CONFIDENTIAL INFORMATION, IN EXISTENCE OR DEVELOPED IN THE FUTURE,
INCLUDING ALL COPIES THEREOF, ARE PROPRIETARY TO THE COMPANY AND SHALL,
FOLLOWING THE TERMINATION OF YOUR EMPLOYMENT, REGARDLESS OF THE CIRCUMSTANCES
THEREOF OR REASONS THEREFOR, REMAIN THE COMPANY’S SOLE AND EXCLUSIVE PROPERTY
AND THAT YOU SHALL IMMEDIATELY RETURN ALL SUCH MATERIALS AND DOCUMENTS INCLUDING
ANY COPIES THEREOF TO THE COMPANY UPON ANY TERMINATION OF YOUR EMPLOYMENT OR
UPON ANY PRIOR REQUEST.

16.                                 CUSTOMER AND SUPPLIER SOLICITATION.  DURING
THE TERM OF YOUR EMPLOYMENT AND DURING THE RESTRICTIVE PERIOD, YOU SHALL NOT
DIVERT, OR ATTEMPT TO DIVERT ANY PERSON, BUSINESS OR ENTITY FROM DOING BUSINESS
WITH THE COMPANY, NOR WILL YOU ATTEMPT TO INDUCE ANY SUCH PERSON, BUSINESS OR
ENTITY TO CEASE BEING A CUSTOMER OF OR SUPPLIER TO THE COMPANY.

17.                                 NON-DISPARAGEMENT.  YOU WILL NOT, DURING
YOUR EMPLOYMENT WITH THE COMPANY OR AT ANY TIME THEREAFTER, PUBLICLY DISPARAGE
THE COMPANY, ITS AFFILIATES AND SHAREHOLDERS OR ANY OF THEIR OFFICERS,
DIRECTORS, EMPLOYEES OR AGENTS, OTHER THAN IN CONNECTION WITH DISCLOSURES
REQUIRED BY APPLICABLE LAW, REGULATION OR ORDER OF COURT OR GOVERNMENTAL AGENCY.

18.                                 REMEDY.  YOU HEREBY RECOGNIZE AND AGREE THAT
THE COMPANY WOULD NOT HAVE AN ADEQUATE REMEDY AT LAW OR IN EQUITY FOR THE BREACH
OR THREATENED BREACH BY YOU OF ANY ONE OR MORE OF THE COVENANTS SET FORTH IN
PARAGRAPHS 13, 14, 15, 16 AND 17 AND AGREE THAT, IN ADDITION TO SUCH OTHER
REMEDIES AS MAY BE AVAILABLE TO THE COMPANY, IN LAW OR IN EQUITY, THE COMPANY
MAY OBTAIN AN INJUNCTION OR RESTRAINING ORDER, WITHOUT THE POSTING OF ANY BOND
OR SECURITY AND WITHOUT THE PROOF OF SPECIAL DAMAGES, TO ENJOIN YOU FROM THE
BREACH OR THREATENED BREACH OF SUCH COVENANTS.  THE RESTRICTIONS SET FORTH IN
PARAGRAPHS 13, 14, 15, 16 AND 17 ARE CONSIDERED BY YOU

8

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AND THE COMPANY TO BE REASONABLE FOR THE PURPOSES OF PROTECTING THE BUSINESS OF
THE COMPANY.  HOWEVER, IF ANY SUCH RESTRICTION IS FOUND BY A COURT OF COMPETENT
JURISDICTION TO BE UNENFORCEABLE BECAUSE IT IS TOO BROAD, IT IS THE INTENTION OF
YOU AND THE COMPANY THAT SUCH RESTRICTION SHALL BE INTERPRETED TO BE AS BROAD AS
POSSIBLE CONSISTENT WITH ALLOWING ITS ENFORCEABILITY.

19.                                 ARBITRATION: COSTS, FEES AND EXPENSES. 
EXCEPT FOR DISPUTES WITH RESPECT TO PARAGRAPHS 13, 14, 15, 16 AND 17 HEREOF, ANY
DISPUTE RESPECTING THE MEANING AND INTENT OF THIS LETTER AGREEMENT OR ANY OF ITS
TERMS AND PROVISIONS SHALL BE SUBMITTED TO ARBITRATION IN CHARLOTTE, NORTH
CAROLINA BEFORE A SINGLE ARBITRATOR IN ACCORDANCE WITH THE COMMERCIAL RULES OF
THE AMERICAN ARBITRATION ASSOCIATION THEN IN EFFECT, AND THE ARBITRATION
DETERMINATION RESULTING FROM ANY SUCH SUBMISSION SHALL BE FINAL AND BINDING UPON
THE PARTIES HERETO.  ALL COSTS, FEES AND EXPENSES ASSOCIATED WITH ANY DISPUTE
RESPECTING THE MEANING AND INTENT OF THIS LETTER AGREEMENT OR ANY OF ITS TERMS
AND PROVISIONS SHALL BE BORNE BY THE PARTY UNSUCCESSFUL IN SUCH DISPUTE.

20.                                 SURVIVAL OF OBLIGATIONS.  YOU AGREE THAT
YOUR OBLIGATIONS UNDER PARAGRAPHS 13, 14, 15, 16 AND 17 WILL SURVIVE ANY
TERMINATION OF YOUR EMPLOYMENT.

21.                                 INDEMNIFICATION; DIRECTORS AND OFFICERS
INSURANCE.  DURING THE TERM AND FOR SO LONG THEREAFTER AS LIABILITY EXISTS WITH
REGARD TO YOUR ACTIVITIES DURING THE TERM ON BEHALF OF THE COMPANY, ITS
AFFILIATES, OR AS A FIDUCIARY OF ANY BENEFIT PLAN OF ANY OF THEM, THE COMPANY
SHALL INDEMNIFY YOU TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW (OTHER
THAN IN CONNECTION WITH YOUR GROSS NEGLIGENCE OR WILLFUL MISCONDUCT), AND SHALL
ADVANCE TO YOU REASONABLE ATTORNEYS’ FEES AND EXPENSES AS SUCH FEES AND EXPENSES
ARE INCURRED (SUBJECT TO YOUR UNDERTAKING TO REPAY SUCH ADVANCES IF IT SHALL BE
FINALLY DETERMINED BY A JUDICIAL DECISION WHICH IS NOT SUBJECT TO FURTHER APPEAL
THAT YOU WERE NOT ENTITLED TO THE REIMBURSEMENT OF SUCH FEES AND EXPENSES). 
DURING THE TERM AND THEREAFTER WHILE LIABILITY EXISTS, YOU SHALL BE ENTITLED TO
THE PROTECTION OF ANY INSURANCE POLICIES THE COMPANY SHALL ELECT TO MAINTAIN
GENERALLY FOR THE BENEFIT OF ITS DIRECTORS AND OFFICERS (“DIRECTORS AND OFFICERS
INSURANCE”) AGAINST ALL COSTS, CHARGES AND EXPENSES INCURRED OR SUSTAINED BY YOU
IN CONNECTION WITH ANY ACTION, SUIT OR PROCEEDING TO WHICH YOU MAY BE MADE A
PARTY BY REASON OF YOUR BEING OR HAVING BEEN A DIRECTOR, OFFICER OR EMPLOYEE OF
THE COMPANY OR ANY OF ITS AFFILIATES OR YOUR SERVING OR HAVING SERVED ANY OTHER
ENTERPRISE OR BENEFIT PLAN AS A DIRECTOR, OFFICER, FIDUCIARY OR EMPLOYEE AT THE
REQUEST OF THE COMPANY (OTHER THAN ANY DISPUTE, CLAIM OR CONTROVERSY ARISING
UNDER OR RELATING TO THIS LETTER AGREEMENT), PROVIDED THAT YOU SHALL, IN ALL
CASES, BE ENTITLED TO DIRECTORS AND OFFICERS INSURANCE COVERAGE NO LESS
FAVORABLE THAN THAT (IF ANY) PROVIDED TO ANY OTHER PRESENT OR FORMER DIRECTOR OR
OFFICER OF THE COMPANY.

22.                                 NO MITIGATION.   IN NO EVENT SHALL YOU BE
OBLIGATED TO SEEK OTHER EMPLOYMENT OR TAKE ANY OTHER ACTION BY WAY OF MITIGATION
OF THE AMOUNTS PAYABLE TO YOU UNDER ANY OF THE PROVISIONS OF THIS LETTER
AGREEMENT, NOR SHALL THE AMOUNT OF ANY PAYMENT HEREUNDER BE REDUCED BY ANY
COMPENSATION EARNED BY YOU AS A RESULT OF EMPLOYMENT BY A SUBSEQUENT EMPLOYER,
EXCEPT AS PROVIDED IN PARAGRAPHS 8(C), 9(C) AND 10(A)(3) HEREOF.

23.                                 SUCCESSORS AND ASSIGNS.  THIS LETTER
AGREEMENT IS PERSONAL TO EACH OF THE PARTIES HERETO.  NO PARTY MAY ASSIGN OR
DELEGATE ANY RIGHTS OR OBLIGATIONS HEREUNDER WITHOUT FIRST OBTAINING THE WRITTEN
CONSENT OF THE OTHER PARTY HERETO.  NOTWITHSTANDING THE FOREGOING, THE COMPANY
MAY ASSIGN THIS LETTER AGREEMENT TO ANY SUCCESSOR TO ALL OR SUBSTANTIALLY ALL OF
THE BUSINESS AND/OR ASSETS OF THE COMPANY, PROVIDED THAT THE COMPANY SHALL
REQUIRE SUCH SUCCESSOR

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TO EXPRESSLY ASSUME AND AGREE TO PERFORM THIS LETTER AGREEMENT IN THE SAME
MANNER AND TO THE SAME EXTENT THAT THE COMPANY WOULD BE REQUIRED TO PERFORM IT
IF NO SUCH SUCCESSION HAD TAKEN PLACE.  AS USED IN THIS AGREEMENT, “COMPANY”
SHALL MEAN THE COMPANY AND ANY SUCCESSOR TO ITS BUSINESS AND/OR ASSETS, WHICH
ASSUMES AND AGREES TO PERFORM THE DUTIES AND OBLIGATIONS OF THE COMPANY UNDER
THIS LETTER AGREEMENT BY OPERATION OF LAW OR OTHERWISE.  IN THE EVENT OF ANY
ASSIGNMENT OF THIS LETTER AGREEMENT BY THE COMPANY IN ACCORDANCE WITH THE TERMS
HEREOF, YOU SHALL BE ENTITLED TO FULL SERVICE CREDIT FOR ALL PURPOSES
(INCLUDING, BUT NOT LIMITED TO, VESTING OR ACCUMULATION OF BENEFITS AND
MEASUREMENT OF ELIGIBILITY) UNDER THE EMPLOYEE BENEFIT PLANS OF THE COMPANY’S
SUCCESSOR.

24.                                 RELEASE REQUIREMENT.  YOUR RIGHT TO RECEIVE
THE SEVERANCE PAYMENTS AND BENEFITS UNDER PARAGRAPHS 8, 9 AND 10 HEREOF (OTHER
THAN THE ACCRUED BENEFITS) SHALL BE CONDITIONED UPON YOUR EXECUTION AND
NON-REVOCATION OF A GENERAL RELEASE OF CLAIMS IN FAVOR OF THE COMPANY IN FORM
AND SUBSTANCE REASONABLY SATISFACTORY TO THE COMPANY, PROVIDED THAT ANY SUCH
RELEASE SHALL EXCEPT OUT ANY AMOUNTS OWING BY THE COMPANY TO YOU PURSUANT TO
THIS LETTER AGREEMENT, RIGHTS OF INDEMNIFICATION AND DIRECTORS AND OFFICERS
LIABILITY INSURANCE AS PROVIDED IN PARAGRAPH 21 HEREOF, AND SHALL HAVE NO
POST-EMPLOYMENT ACTIVITY LIMITATIONS BEYOND THOSE STATED IN THIS LETTER
AGREEMENT.

25.                                 TAX MATTERS.

(A)                                  WITHHOLDING.  THE COMPANY MAY WITHHOLD FROM
ANY AND ALL AMOUNTS PAYABLE UNDER THIS LETTER AGREEMENT SUCH FEDERAL, STATE AND
LOCAL TAXES AS MAY BE REQUIRED TO BE WITHHELD PURSUANT TO ANY APPLICABLE LAW OR
REGULATION.

(B)                                 SECTION 409A COMPLIANCE.

(I)                                     THE INTENT OF THE PARTIES IS THAT
PAYMENTS AND BENEFITS UNDER THIS LETTER AGREEMENT COMPLY WITH INTERNAL REVENUE
CODE SECTION 409A AND THE REGULATIONS AND GUIDANCE PROMULGATED THEREUNDER
(COLLECTIVELY “CODE SECTION 409A”) AND, ACCORDINGLY, TO THE MAXIMUM EXTENT
PERMITTED, THIS LETTER AGREEMENT SHALL BE INTERPRETED TO BE IN COMPLIANCE
THEREWITH.  IF YOU NOTIFY THE COMPANY (WITH SPECIFICITY AS TO THE REASON
THEREFORE) THAT YOU BELIEVE THAT ANY PROVISION OF THIS LETTER AGREEMENT (OR OF
ANY AWARD OF COMPENSATION, INCLUDING EQUITY COMPENSATION OR BENEFITS) WOULD
CAUSE YOU TO INCUR ANY ADDITIONAL TAX OR INTEREST UNDER CODE SECTION 409A AND
THE COMPANY CONCURS WITH SUCH BELIEF OR THE COMPANY (WITHOUT ANY OBLIGATION
WHATSOEVER TO DO SO) INDEPENDENTLY MAKES SUCH DETERMINATION, THE COMPANY SHALL,
AFTER CONSULTING WITH YOU, REFORM SUCH PROVISION TO TRY TO COMPLY WITH CODE
SECTION 409A THROUGH GOOD FAITH MODIFICATIONS TO THE MINIMUM EXTENT REASONABLY
APPROPRIATE TO CONFORM WITH CODE SECTION 409A.  TO THE EXTENT THAT ANY PROVISION
HEREOF IS MODIFIED IN ORDER TO COMPLY WITH CODE SECTION 409A, SUCH MODIFICATION
SHALL BE MADE IN GOOD FAITH AND SHALL, TO THE MAXIMUM EXTENT REASONABLY
POSSIBLE, MAINTAIN THE ORIGINAL INTENT AND ECONOMIC BENEFIT TO YOU AND THE
COMPANY OF THE APPLICABLE PROVISION WITHOUT VIOLATING THE PROVISIONS OF CODE
SECTION 409A.

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(II)                                  NOTWITHSTANDING ANY PROVISION TO THE
CONTRARY IN THIS AGREEMENT, IF YOU ARE DEEMED ON THE DATE OF TERMINATION TO BE A
“SPECIFIED EMPLOYEE” WITHIN THE MEANING OF THAT TERM UNDER CODE SECTION
409A(A)(2)(B), THEN WITH REGARD TO ANY PAYMENT OR THE PROVISION OF ANY BENEFIT
THAT IS REQUIRED TO BE DELAYED IN COMPLIANCE WITH CODE SECTION 409A(A)(2)(B),
SUCH PAYMENT OR BENEFIT SHALL NOT BE MADE OR PROVIDED (SUBJECT TO THE LAST
SENTENCE OF THIS PARAGRAPH 25(B)(II)) PRIOR TO THE EARLIER OF (A) THE EXPIRATION
OF THE SIX (6)-MONTH PERIOD MEASURED FROM THE DATE OF YOUR “SEPARATION FROM
SERVICE” (AS SUCH TERM IS DEFINED UNDER CODE SECTION 409A), AND (B) THE DATE OF
YOUR DEATH (THE “DELAY PERIOD”).  UPON THE EXPIRATION OF THE DELAY PERIOD, ALL
PAYMENTS AND BENEFITS DELAYED PURSUANT TO THIS PARAGRAPH 25(B)(II) (WHETHER THEY
WOULD HAVE OTHERWISE BEEN PAYABLE IN A SINGLE SUM OR IN INSTALLMENTS IN THE
ABSENCE OF SUCH DELAY) SHALL BE PAID OR REIMBURSED TO YOU IN A LUMP SUM, AND ANY
REMAINING PAYMENTS AND BENEFITS DUE UNDER THIS LETTER AGREEMENT SHALL BE PAID OR
PROVIDED IN ACCORDANCE WITH THE NORMAL PAYMENT DATES SPECIFIED FOR THEM HEREIN. 
NOTWITHSTANDING THE FOREGOING, TO THE EXTENT THAT THE FOREGOING APPLIES TO THE
PROVISION OF ANY ONGOING WELFARE BENEFITS TO YOU THAT WOULD NOT BE REQUIRED TO
BE DELAYED IF THE PREMIUMS THEREFORE WERE PAID BY YOU, YOU SHALL PAY THE FULL
COST OF THE PREMIUMS FOR SUCH WELFARE BENEFITS DURING THE DELAY PERIOD AND THE
COMPANY SHALL PAY YOU AN AMOUNT EQUAL TO THE AMOUNT OF SUCH PREMIUMS PAID BY YOU
DURING THE DELAY PERIOD PROMPTLY AFTER ITS CONCLUSION.

26.                                 AMENDMENT; ENTIRE AGREEMENT.  FOLLOWING YOUR
EXECUTION OF THIS LETTER AGREEMENT, NO PROVISION THEREOF MAY BE AMENDED UNLESS
SUCH AMENDMENT IS AGREED TO IN WRITING AND SIGNED BY YOU AND AN AUTHORIZED
OFFICER OF THE COMPANY.  THIS LETTER AGREEMENT CONSTITUTES THE ENTIRE AGREEMENT
BY AND BETWEEN YOU AND THE COMPANY WITH RESPECT TO THE SUBJECT MATTER HEREOF,
AND SUPERSEDES ANY AND ALL PRIOR AGREEMENTS OR UNDERSTANDINGS BETWEEN YOU AND
THE COMPANY WITH RESPECT TO THE SUBJECT MATTER HEREOF, WHETHER WRITTEN OR ORAL
(INCLUDING YOUR EMPLOYMENT LETTER AGREEMENT WITH THE COMPANY DATED JULY 16,
2001).

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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Our respective signatures below indicate our mutual assent to the terms of this
letter agreement.

 

Very truly yours,

 

 

 

Blue Ridge Paper Products Inc.

 

 

 

 

 

/s/ RICHARD A. LOZYNIAK

 

 

By:

Richard A. Lozyniak

 

Title:

Chief Executive Officer

 

 

 

 

Agreed to and accepted:

 

 

 

 

 

/s/ ROBERT M. SHANAHAN

 

 

Robert M. Shanahan

 

 

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