Exhibit
10.1


 


SMURFIT-STONE CONTAINER CORPORATION


2009 MANAGEMENT INCENTIVE PLAN


(Effective April 28, 2009)


 


ARTICLE I

PURPOSE OF THE PLAN


 


The Smurfit-Stone Container Corporation 2009 Management Incentive Plan
(the “Plan”) is hereby established by the Compensation Committee of
Smurfit-Stone Container Corporation, effective as of April 28, 2009.  The Plan is designed to drive the Company’s
financial performance to meet or exceed the Company’s short-term financial and
operational goals by providing Employees with annual, semi-annual and, with
respect to the Tier 4 Employees identified in Section 4.3, quarterly
performance-based incentive payments for the attainment of those short-term
goals.  Payments under the Plan are
intended to be exempt from section 409A of the Internal Revenue Code of 1986,
as amended, as “short-term deferrals” within the meaning of Treasury Regulation
section 1.409A-1(b)(4).  The Plan shall
not create any contractual right of any individual to any Award prior to the
payment of such award.


 


ARTICLE II

DEFINITIONS


 


For
purposes of this Plan, the following terms, when capitalized, shall have the
meanings set forth below:


 


Section 2.1.   “Annual MIP Award” means the
cash incentive bonus awarded to an Employee under the Plan after the end of the
Plan Year, which bonus is subject to the Company Achievement of the Annual
Performance Target and/or any other objective criteria established by the
Committee.


 


Section 2.2.   “Annual Performance Target”
means the Company’s financial and/or operational goals for the Plan Year, as
established by the Committee.


 


Section 2.3.   “Award” means an Annual MIP
Award and/or a Semi-annual MIP Award, as the case may be.


 


Section 2.4.   “Base Pay” means, for
purposes of the Semi-annual MIP Award, the Employee’s base salary in effect on
the last day of the Performance Period, and in the case of the Annual MIP
Award, the Employee’s base salary in effect on the last day of the Plan
Year.  Base Pay does not include any
bonuses, incentive pay or other supplemental pay or benefits, in each case, as
determined by the Committee.


 


Section 2.5.   “Cause” shall mean: (a) the
refusal or continued failure by the Employee to perform substantially all his
or her duties with the Company (other than any failure resulting from
incapacity due to physical or mental illness) after the Company provides the
Employee a demand for substantial performance identifying in reasonable detail
the manner in which the Employee has not substantially performed his or her
duties; (b) a plea of guilty or nolo contendere by the Employee, or
conviction of the Employee, for a felony; or (c) the determination by the
Committee in its sole discretion that the Employee has engaged in: (1) 


 

















 


illegal conduct or gross misconduct in
connection with the Employee’s job duties or the business of the Company; (2) a
material breach of any written policy of the Company; (3) fraud or
material dishonesty in connection with the business of the Company; or (4) any
violation of a statutory or common law duty of loyalty to the Company.


 


Section 2.6.   “Change in Control” means the
occurrence of any one or more of the following:


 


(a)   The “beneficial ownership” of securities representing more than
20% of the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the election of directors (the “Company
Voting Securities”) is accumulated, held or acquired by a Person (as defined in
Section 3(a)(9) of the Exchange Act, as modified, and used in
Sections 13(d) and 14(d) thereof) other than the Company, any trustee
or other fiduciary holding securities under an employee benefit plan of the
Company, any corporation owned, directly or indirectly, by the Company’s
stockholders in substantially the same proportions as their ownership of stock
of the Company; provided, however, that any acquisition from the Company or any
acquisition pursuant to a transaction that complies with clauses (i), (ii) and
(iii) of subparagraph (c) of this definition will not be a Change in
Control under this subparagraph (a), and provided further that immediately
prior to such accumulation, holding or acquisition, such person was not a
direct or indirect beneficial owner of 20% or more of the Company Voting
Securities; or


 


(b)   Individuals who, as of January 1, 2009, constitute the Board
of Directors (the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board; provided, however, that an individual becoming a
director subsequent to that date whose election, or nomination for election by
the Company’s stockholders, was approved by a vote of at least a majority of
the directors then comprising the Incumbent Board will be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or


 


(c)   Consummation by the Company of a reorganization, merger or
consolidation, or sale or other disposition of all or substantially all of the
assets of the Company or the acquisition of assets or stock of another entity
(a “Business Combination”), in each case, unless immediately following such
Business Combination: (i) more than 60% of the combined voting power of
then outstanding voting securities entitled to vote generally in the election
of directors of (A) the corporation resulting from such Business
Combination (the “Surviving Corporation”), or (B) if applicable, a
corporation that as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or
more subsidiaries (the “Parent Corporation”), is represented, directly or
indirectly, by Company Voting Securities outstanding immediately prior to such
Business Combination (or, if applicable, is represented by shares into which
such Company Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportions as their ownership, immediately prior to
such Business Combination, of the Company Voting Securities; (ii) no
person (excluding any employee benefit plan (or related trust) of the Company
or such corporation resulting from such Business Combination) 


 


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beneficially owns, directly or indirectly, 20% or more of
the combined voting power of the then outstanding voting securities eligible to
elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) except to the extent that such
ownership of the Company existed prior to the Business Combination; and (iii) at
least a majority of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation)
were members of the incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination;


 


(d)   Approval by the Company’s stockholders of a complete liquidation
or dissolution of the Company;


 


(e)   The consummation of a reorganization under the U.S. Bankruptcy
Code; or


 


(f)    The consummation of a complete liquidation or dissolution of the
Company under the U.S. Bankruptcy Code.


 


However, in no event will a Change in Control be deemed to
have occurred, with respect to an Employee’s Award, if the Employee is part of
a purchasing group that consummates the Change in Control transaction.  An Employee will be deemed “part of a
purchasing group” for purposes of the preceding sentence if the Employee is an
equity participant in the purchasing company or group (except: (i) passive
ownership of less than 2% of the stock of the purchasing company; or (ii) ownership
of equity participation in the purchasing company or group that is otherwise
not significant, as determined prior to the Change in Control by a majority of
the non-employee continuing directors).


 


Section 2.7.   “Committee” means the
Compensation Committee of the Company, or any successor thereto or delegate
thereof with the authority to act on behalf of the Committee with respect to
this Plan.


 


Section 2.8.   “Company” means the
Smurfit-Stone Container Corporation and includes any successor thereto,
including pursuant to a plan of reorganization under the U.S. Bankruptcy Code.


 


Section 2.9.   “Company Achievement” means (a) the
percentage of the Annual Performance Target achieved by the Company in the Plan
Year or (b) the percentage of the Semi-annual Performance Target achieved
by the Company in a Performance Period, as the case may be, and, in each case,
as determined by the Committee.


 


Section 2.10. “Disability”
means an individual’s
long-term disability as defined under the long-term disability plan of the
Company that covers that individual; or if the individual is not covered by
such a long-term disability plan, an individual’s disability as defined for
purposes of eligibility for a disability award under the Social Security Act.


 


Section 2.11. “Employee”
means an individual who is (a) a regular part-time or full-time employee
of the Company or one
of its subsidiaries or affiliates, other than an individual
classified by his or her Company as a contractor or intern, and (b) designated
by the Committee as eligible to participate in the Plan.


 


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Section 2.12. “Good Reason” shall mean, in the case of
an Employee who is designated as a Tier 1 Employee in the individual’s
Incentive Statement for the Plan Year (“Tier 1 Employee”), the occurrence of any of the following
without the Employee’s express written consent: (i) any reduction in
either the Employee’s Base Pay or Target Incentive under this Plan as set forth
in the Incentive Statement provided to the Employee; (ii) the Company’s
failure to maintain retirement, health and welfare benefits plans, and
compensation plans under which the Employee is eligible to receive benefits
substantially similar in value in the aggregate to the benefits the Employee
was eligible to receive under the retirement plans, health and welfare benefits
plans, and compensation plans maintained by the Company as in effect on January 1,
2009; (iii) the Company’s requiring the Employee to be based anywhere more
than fifty (50) miles from where the Employee’s principal place of employment
was located as of January 1, 2009; (iv) a change in the duties or
reporting responsibilities of the Employee that is inconsistent in any
substantial adverse respect with such Employee’s position, duties or
responsibilities as in effect on January 1, 2009; and (v) failure by
the Company to obtain an agreement to assume all of the obligations of the
Company hereunder upon a Change in Control pursuant to Section 2.6(a)-(c) from
any entity that is or will be the successor entity to the Company (including
pursuant to any merger, consolidation or sale of all or substantially all of
the assets of the Company).


 


Section 2.13. “Incentive
Statement” means a letter or other writing (including in
electronic format) provided by the Company to an Employee that sets forth the
Annual and/or Semi-annual MIP Awards that an Employee may earn under the Plan
(or otherwise describes an Employee’s eligibility to participate in the Plan),
that also may describe the performance metrics applicable to an Employee and
any and all other objective performance criteria applicable to such Employee,
in each case as established by the Committee.


 


Section 2.14. “Payment Date” means the date on which an
Award is paid to an Employee.


 


Section 2.15. “Performance Period” means (i) January 1
through June 30, 2009, (ii) July 1 through December 31,
2009, or (iii) with respect to the Tier 4 Employees identified in Section 4.3,
each calendar quarter in 2009, as the case may be.


 


Section 2.16. “Plan Year” means the one year
period commencing on January 1, 2009, and ending on December 31,
2009.


 


Section 2.17. “Retirement” means an Employee’s voluntary
termination of employment with the Company pursuant to the retirement plan(s) applicable
to such Employee.


 


Section 2.18. “Semi-annual MIP Award” means the cash
incentive bonus awarded to an Employee under the Plan after the end of each
Performance Period, which bonus is subject to the Company Achievement of the
applicable Semi-annual Performance Target and/or any other objective criteria
established by the Committee.


 


Section 2.19. “Semi-annual Performance Target” means the Company’s
financial and/or operational goals for the Performance Period of January 1
through June 30, 2009, or July 1 through December 31, 2009, as
the case may be, as established by the Committee.


 


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Section 2.20. “Target Incentive” means the
percentage of an Employee’s Base Pay, as determined by the Committee based on
the Employee’s position and as reflected in the Employee’s Incentive Statement,
that he or she will receive in the Plan Year if Company Achievement of each of
the Annual and Semi-annual Performance Targets (and of any other objective
performance criteria established by the Committee) is equal to 100%.


 


ARTICLE III


AWARD ELIGIBILITY


 


Section 3.1.   Eligibility.


 


(a)   Subject to Section 3.2, an individual
shall be eligible to receive a Semi-annual MIP Award for a Performance Period
if he or she:


 


(1)                    (i) with respect to the
Performance Period ending June 30, 2009, was employed on or before March 31, or (ii) with
respect to the Performance Period ending December 31, 2009, was employed
on or before September 30, 2009;


 


(2)                    was designated as an
eligible Employee for the Performance Period; and


 


(3)                    is an Employee on the last
day of, or dies during, the Performance Period,


 


in
all cases as determined by the Committee. 
A Semi-annual MIP Award may be prorated, at the sole discretion of the
Committee, to the extent the individual has not been employed as an Employee
for the entirety of such Performance Period.


 


(b)   Subject to Section 3.2, an individual
shall be eligible to receive an Annual MIP Award for the Plan Year only if he
or she:


 


(1)                    was employed on or before September 30, 2009;


 


(2)                    was designated as an
eligible Employee for the Plan Year; and


 


(3)                    is an Employee on the last
day of, or dies during, the Plan Year,


 


in
all cases as determined by the Committee. 
The Annual MIP Award may be prorated, at the sole discretion of the
Committee, to the extent the individual has not been employed as an Employee
for the entirety of each Performance Period in the Plan Year.


 


(c)   In the event an Employee transfers into or
otherwise assumes another position that participates in the Plan, the Committee
retains the sole discretion to determine what adjustments, if any, will be made
to the Employee’s Target Incentive.


 


(d)   The Committee retains the discretion to
reduce or eliminate an Award for any Employee whose performance does not
consistently meet expectations.


 


Section 3.2.   Ineligibility / Termination
of Employment.


 


(a)   Notwithstanding anything herein to the contrary, if,
prior to the last day of a Performance Period (in the case of a Semi-annual MIP
Award), the employment of an Employee is terminated (1) by the Company
without Cause (including due to a reduction in force), (2) by reason of
death, Disability, or Retirement, or (3) in the case of a Tier 1 Employee,
voluntarily by the Employee for Good Reason, such Employee shall be eligible to
receive a Semi-annual MIP 


 


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Award for such
Performance Period that shall be prorated both on the basis of the full
calendar months worked therein during which such Employee shall have been
employed by the Company and based on the Company’s actual performance during
such Performance Period; provided, however, that such Employee shall not be
eligible to receive such a prorated Semi-annual MIP Award unless he or she was employed as
an Employee for at least three full calendar months within such Performance
Period and, with
respect to the Performance Period ending June 30, 2009, was employed as an
Employee on or after April 28, 2009; provided, further, that
such an Employee will not be eligible to receive any payment (prorated or
otherwise) based on (i) the Annual MIP Award or (ii) any amount that
is attributable to Company Achievement that exceeds a Semi-annual Performance
Target, including but not limited to the Surplus Award (as defined in Section 5.1).


 


(b)   Notwithstanding anything herein to the contrary,
except as otherwise determined by the Committee, if, prior to the date on which
the payment of an Award is made, an Employee (i) is terminated by the
Company for Cause, (ii) in the case of a Tier 1 Employee, voluntarily
quits or resigns without Good Reason, or (iii) in the case of a an
Employee who is designated as a Tier 2, Tier 3 or Tier 4/ESIP Employee in the
individual’s Incentive Statement for the Plan Year (respectively, “Tier 2,” “Tier
3,” or “Tier 4/ESIP Employee”), voluntarily quits or resigns for any reason,
such Employee shall not be eligible to receive any additional unpaid amounts
under the Plan (even if such termination occurs subsequent to the last day of a
Performance Period and/or Plan Year), including any unpaid Surplus Award.


 


(c)   Notwithstanding anything herein to the contrary, if a
material “Event of Default” (as defined in the Amended and
Restated Credit Agreement dated as of February 25, 2009, as amended, or “DIP
Credit Agreement,” to which the Company is a party) has occurred and is continuing at the time any Awards
would otherwise be payable under this Plan, the Company shall not pay, and an
Employee shall not have any right, title or interest in or to, any such Awards unless and until such
Event of Default is cured.


 


ARTICLE IV

CALCULATION OF AWARD


 


Section 4.1.   Performance Targets.  The Committee shall establish Annual and
Semi-annual Performance Targets for the Plan Year.  Each of the Annual and Semi-annual
Performance Targets shall include a threshold level of performance below which
no Award payment shall be made, levels of performance at which specified
percentages of the target Award shall be paid, and a maximum level of
performance above which no additional Award shall be paid.


 


Section 4.2.   Semi-annual Cycle.  The Plan will operate on a semi-annual cycle,
such that the Company’s Annual Performance Target will be apportioned into two
Semi-Annual Performance Targets, one for each Performance Period in the Plan
Year.  An Employee is eligible to receive
a Semi-annual MIP Award after the end of each Performance Period subject to the
Company Achievement of the Semi-annual Performance Targets and any other
applicable objective performance criteria established by the Committee.  An Employee is eligible to receive 


 


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an Annual MIP Award after the end of the Plan
Year subject to the Company Achievement of the Annual Performance Target and
any other applicable objective performance criteria established by the
Committee.


 


Section 4.3.   Special Rules Applicable
to Certain Tier 4 Employees.


 


(a)  Certain Tier 4 Employees (“ESIP B Employees”)
shall receive performance targets  based on key performance indicators by plant or
area.  For all such ESIP B Employees, the Plan will operate on a
quarterly cycle.  The Committee shall establish
for these ESIP B Employees an Annual Performance Target (whether based on the
performance indicators for their respective plants and/or areas), which will be
apportioned into four quarterly Performance Targets, one for each calendar
quarter in the Plan Year.  These ESIP B
Employees are eligible to receive a quarterly MIP Award after the end of each
calendar quarter subject to the achievement of the applicable quarterly
Performance Target and any other applicable objective performance criteria
established by the Committee.


 


(b)  Payment of
quarterly MIP Awards to these ESIP B Employees for each calendar quarter, less
withholding taxes and other applicable withholdings, shall be made not later
than 45 days following the last day of the calendar quarter to which such Award
relates.


 


(c)  To the extent
not inconsistent with the foregoing, these ESIP B Employees and the provision
of their MIP Awards shall be subject to each of the provisions set forth in the
Plan; provided, however, that the Plan provisions as applied to the these ESIP
B Employees and to their MIP Awards shall be read by substituting the term “quarterly”
for “Semi-annual,” and, notwithstanding anything herein to the contrary, these
ESIP B Employees shall not be eligible to receive an Annual MIP Award.


 


Section 4.4.   Awards.  The Company shall provide an Incentive
Statement to each Employee as soon as practicable after April 22,
2009.  The Incentive Statement shall
explain the Annual and Semi-annual MIP Awards that the Employee is eligible to
earn throughout the Plan Year (or shall otherwise describe such Employee’s
eligibility to participate in the Plan) and shall describe the Annual and
Semi-annual Performance Targets applicable throughout the Plan Year as well as
any other objective performance criteria applicable to the individual Employee,
as established by the Committee.  Subject
to the requirements of Sections 3.1 and 3.2 above, payment of a Semi-annual MIP
Award shall be made only if and to the extent that a pre-determined threshold
percentage of the Semi-annual Performance Targets with respect to such
Performance Period is attained, and all other objective performance criteria
applicable to the Employee have been met. 
Similarly, subject to the requirements of Sections 3.1 and 3.2 above,
payment of an Annual MIP Award shall be made only if and to the extent that a
pre-determined threshold percentage of the Annual Performance Target is
attained, and all other objective performance criteria applicable to the
Employee have been met.  Unless otherwise
provided in an Employee’s Incentive Statement, the actual amount of the Annual
and/or Semi-annual MIP Awards payable to an Employee under the Plan shall be
determined as a percentage of the Employee’s Target Incentive, which percentage
shall vary depending upon the extent to which the Annual and/or Semi-annual
Performance Targets have been attained and all other objective performance
criteria applicable have been met.


 


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Section 4.5.   Emergence from Bankruptcy /
Liquidation.  In the
event that during the Plan Year the United States Bankruptcy Court for the
District of Delaware presiding over In re: Smurfit-Stone Container Corp.,
Case No. 09-10235 (BLS), confirms a plan of reorganization for the Company
pursuant to Section 2.6(e) and the Company fails to assume the Plan
following or in connection with the confirmation of such a plan of
reorganization, or the Company consummates a liquidation pursuant to Section 2.6(d) or
(f), then each Employee shall receive a Semi-annual MIP Award for the
Performance Period in which the plan of reorganization is confirmed or the
liquidation is consummated and an Annual MIP Award, which Awards shall be (i) prorated
on the basis of the full calendar months during which such Employee shall have
been employed by the Company during such Performance Period and the Plan Year
and (ii) based on the Company’s actual performance measured as a
percentage of the Company’s financial/operational targets through the date of
reorganization or liquidation.


 


ARTICLE V

PAYMENT OF AWARDS


 


Section 5.1.   Time of Payment.  Payment of the Semi-annual MIP Award for the
Performance Period ending June 30, 2009, less withholding taxes and other
applicable withholdings, shall be made not later than 45 days after June 30.  Payment of the Semi-annual MIP Award for
Performance Period ending December 31, 2009, and the Annual MIP Award,
less withholding taxes and other applicable withholdings, shall be made within
a reasonable period after the end of the Plan Year, but in no event later than March 15,
2010.  Notwithstanding any of the
foregoing, any portion of the Semi-annual MIP Award for the Performance Period
ending June 30, 2009, that is attributable to and payable for Company
Achievement that exceeds the Semi-annual Performance Target for that
Performance Period (“Surplus Award”) shall be paid with the Semi-annual MIP
Award for the Performance Period ending December 31, 2009, and the Annual
Award.


 


Section 5.2.   Form of Payment.  Awards shall be paid in the form of a lump
sum cash payment.


 


ARTICLE
VI

ADMINISTRATION


 


Section 6.1.   The Plan shall be
administered by the Committee, which shall have full power and authority to
interpret, construe and administer the Plan in accordance with the provisions
set forth herein, including without limitation the authority to: (i) select
the Employees to whom Awards may from time to time be granted hereunder; (ii) determine
the terms and conditions of each Award, consistent with the terms of the Plan;
and (iii) determine the Award formula for every Employee in each
Performance Period, including adjusting or eliminating Awards, subject to the
Company Achievement and the Company’s satisfaction of any and all other
objective performance criteria established by the Committee.  In this connection, the Committee may
delegate to any corporation, committee or individual(s), regardless of whether
any such individuals are employees of the Company, the duty to act for the
Committee hereunder.


 


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Section 6.2.   Decisions of the Committee
shall be final, conclusive and binding on all persons or entities, including
the Company and any Employee.  A majority
of the members of the Committee may determine its actions.


 


Section 6.3.   No officer or employee of
the Company shall be liable to any person for any action taken or omitted in
connection with the interpretation and administration of the Plan unless
attributable to his or her own willful misconduct or lack of good faith.


 


Section 6.4.   The expenses of
administering the Plan shall be paid by the Company and shall not be charged
against the Plan.


 


ARTICLE
VII

MISCELLANEOUS


 


Section 7.1.   Successors.  All
obligations of the Company under the Plan will be binding on any successor to
the Company, whether the existence of the successor results from a Change in
Control as described in Section 2.6(a) (relating to the accumulation
of Company Voting Securities), Section 2.6(b) (relating to a
reconstitution of the Board), Section 2.6(c) (relating to a merger,
consolidation, or sale of the Company’s assets), or otherwise; provided,
however, that following or in connection with any Change in Control pursuant to Section 2.6(e) (relating
to the consummation of a reorganization under the U.S. Bankruptcy Code), if the
Company fails to assume the Plan, then it shall payout any Awards subject to Section 4.5,
and after such payouts the Plan and all of the Company’s obligations hereunder
shall terminate; provided, further, that following any Change in Control pursuant to Section 2.6(d) or
(f) (relating to the consummation of a complete liquidation or dissolution
of the Company pursuant to stockholder approval or under the Bankruptcy Code)
and the payout of any Awards subject to Section 4.5, the Plan and all of the Company’s
obligations hereunder shall terminate.


 


Section 7.2.   Nontransferability.  No Award
payable hereunder, nor any right to receive any future Award hereunder, may be
assigned, alienated, sold, transferred, anticipated, pledged, encumbered, or
subjected to any charge or legal process, and if any such attempt is made, or a
person eligible for any Award hereunder becomes bankrupt, the Award under the
Plan which would otherwise be payable with respect to such person may be
terminated by the Committee which, in its sole discretion, may cause the same
to be held or applied for the benefit of one or more of the dependents of such
person or make any other disposition of such Award that it deems appropriate.


 


Section 7.3.   Beneficiary Designation.  Each Employee
may, from time to time, name any beneficiary or beneficiaries (who may be named
contingently or successively) to whom any Award under the Plan is to be paid in
case the Employee should die before receiving any or all of his or her
Award.  Each beneficiary designation will
revoke all prior designations by the same Employee with respect to this Plan,
must be in a form prescribed by the Committee, and must be made during the
Employee’s lifetime.  If the Employee’s
designated beneficiary predeceases the Employee or no beneficiary has been
designated, any Award remaining unpaid at the Employee’s death may, in the sole
discretion of the Committee, (i) be paid to the Employee’s estate or to
one or more of the dependents of the Employee or (ii) be disposed of in
any other 


 


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manner that the Committee deems appropriate.


 


Section 7.4.   Claim to Awards and
Employment Rights.  Nothing in
this Plan shall require the Company to segregate or set aside any funds or
other property for purposes of paying all or any portion of an Award
hereunder.  No person shall have any
right, title or interest in or to any Award hereunder (or any portion of such
award, including but not limited to any Surplus Award) prior to the actual
payment thereof, nor to any property of the Company.  Eligibility for an Award in one year or
Performance Period does not entitle an individual to be eligible for an Award
in any other year or Performance Period. 
Neither the adoption of the Plan nor the continued operation thereof
shall confer upon any Employee any right to continue in the employ of the
Company or shall in any way affect the right and power of the Company to
dismiss or otherwise terminate the employment of any Employee at any time for
any reason, with or without cause.


 


Section 7.5.   Income Tax
Withholding/Rights of Offset.  The Company shall have the right to deduct
and withhold from all Awards all federal, state and local taxes as may be
required by law.  In addition to the
foregoing, the Company shall have the right to set off against the amount of
any Award which would otherwise be payable hereunder, the amount of any debt,
judgment, claim, expense or other obligation owed at such time by the Employee
to the Company, as permitted by law.


 


Section 7.6.   Effective Date
of Plan.  The Plan shall take effect on April 28,
2009.


 


Section 7.7.   Termination of Plan.  The
Plan may be terminated at any time and for any reason by the Committee.  However, subject to the requirements Sections
4.5 and 7.1, upon the Court’s confirmation of a plan of reorganization, if the
Company fails to assume the Plan following or in connection
with the confirmation of such a plan of reorganization, the Plan and all of the Company’s
obligations hereunder shall terminate.


 


Section 7.8.   Severability.  If any provision of the Plan is held illegal
or invalid for any reason, the illegality or invalidity will not affect the
remaining parts of the Plan, and the Plan will be construed and enforced as if
the illegal or invalid provision had not been included.


 


Section 7.9.   Governing Law.  All questions pertaining to the construction,
validity and effect of the Plan shall be determined in accordance with the laws
of the State of Delaware.


 


IN WITNESS WHEREOF, the
Compensation Committee of Smurfit-Stone Container Corporation has caused this
instrument to be executed by its duly authorized member on this 28th day of April, 2009.


 




	
   

  	
  SMURFIT-STONE CONTAINER
  CORPORATION COMPENSATION COMMITTEE

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William D. Smithburg

  
	
   

  	
   

  






 


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