Exhibit 10.2


FIRST AMENDMENT

OF

EMPLOYMENT AGREEMENT OF CHARLES A. HINRICHS


This Amendment Agreement (the “Amendment”) is
effective as of July 25, 2006 the “Amendment Date”), as to the Employment
Agreement (“the Agreement”) by and between Smurfit-Stone Container Corporation
(the “Company”), and Charles A. Hinrichs (the “Executive”).


WHEREAS, the Company and the Executive entered into an
Employment Agreement effective as of April 1, 2002, (the “Employment Agreement”);
and


WHEREAS, the Company has promoted the Executive to the
position of Senior Vice President and Chief Financial Officer; and


WHEREAS, the Company and the Executive now desire to
amend the Employment Agreement to reflect the Executive’s promotion and the
other terms and conditions of this employment;


NOW THEREFORE, in
consideration of the mutual terms, convenants and conditions stated in this
Agreement, the Company and the Executive hereby agree to amend the Employment
Agreement, effective as of July 25, 2006, as follows:


1.      By
substituting the title “Senior Vice President and Chief Financial Officer”
following for the title “Vice President and Chief Financial Officer” each place
where the latter title appears in the Employment Agreement.


2.      By adding Section 6(d) to the Employment Agreement as follows:


(d)   Gross-Up Payment by the Company.   In
the event that any payment, benefit or distribution by or on behalf of the
Company to or for the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section) (the “Payments”) is (i) determined to be an “excess
parachute payment” pursuant to Code Section 280G or any successor or substitute
provision of the Code, with the effect that the Executive is liable for the
payment of the excise tax described in Code Section 4999 or any successor or
substitute provision of the Code, or (ii) determined to render the Executive
liable for the payment of the excise tax described in Code Section 409A or any
successor or substitute provision of the Code (such excise tax under such
Section 409A or excise tax under such Section 4999 being hereinafter referred
to as an “Excise Tax”), then the Company shall pay to the Executive an additional
amount (the “Gross-Up Payment”) such that the net amount retained by Executive,
after deduction of any Excise Tax on the total Payments and any federal, state 









 



and local income
and employment taxes and Excise Tax on the Gross-Up Payment, shall be equal to
the total Payments.


(i)     All
determinations required to be made under this paragraph (d), and the
assumptions to be utilized in arriving at such determination, shall be made by
the certified public accounting firm used for auditing purposes by the Company
immediately prior to the Executive’s employment termination (the “Accounting
Firm”), which shall provide detailed supporting calculations both to the
Company and the Executive. The Company shall pay all fees and expenses of the
Accounting Firm. Any determination by the Accounting Firm shall be binding upon
the Company and the Executive, except as provided in subparagraph (ii) below.


(ii)    As a
result of the uncertainty in the application of Code Sections 280G and 4999 and
Code Section 409A at the time of the initial determination by the Accounting
Firm hereunder, it is possible that the Internal Revenue Service (“IRS”) or
other agency will claim that a greater or lesser Excise Tax is due. In the
event that the Excise Tax is finally determined to be less than the amount
taken into account hereunder in calculating the Gross-Up Payment, the Executive
shall repay to the Company, at the time that the amount of such reduction in
Excise Tax is finally determined, the portion of the Gross-Up Payment attributable
to such reduction (plus that portion of the Gross-Up Payment attributable to
Excise Tax and federal, state and local income and employment taxes imposed on
the Gross-Up Payment being repaid by the Executive to the extent that such
repayment results in a reduction in Excise Tax and/or a federal, state or local
income or employment tax deduction) plus interest on the amount of such
repayment at 120% of the rate provided in Code Section 1274(b)(2)(B). In the
event that the Excise Tax is determined to exceed the amount taken into account
hereunder in calculating the Gross-Up Payment (including by reason of any
payment the existence or amount of which cannot be determined at the time of
the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties or additions payable by
the Executive with respect to such excess) at the time that the amount of such
excess if finally determined. The Executive and the Company shall each
reasonable cooperate with the other in connection with any administrative or
judicial proceedings concerning the existence or amount of liability for Excise
Tax with respect to the total Payments. The Company shall pay all fees and
expenses of the Executive relating to a claim by the IRS or other agency.


3.      By
substituting the following for Section 7(f) of the Employment Agreement:


(f)   Non-Competition.   The
Executive agrees that so long as he is employed by the Company and for a period
of two (2) years thereafter (the “Period”), he shall not, without the prior
written consent of the Company, participate or engage in, directly or
indirectly (as an owner, partner, employee, officer, director, independent
contractor, consultant, advisor or in any other capacity calling for the rendition
of services, advice, or acts of management, operation or control), any business
that, during the Period, is competitive with the Business Conducted by the
Company or any of its Affiliates within 









 



the United States, Canada, Mexico, and China
(hereinafter, the “Geographic Area”) and which business the Company was engaged
(either actively as a going concern or in the process of developing to market)
within the preceding two years of the Executive’s employment with the Company.


IN WITNESS WHEREOF, the parties have executed this
Amendment effective as of the date first above written.


	
  

  	
   

  	
  SMURFIT-STONE CONTAINER CORPORATION

  
	
   

  	
   

  	
   

  
	
  /s/ Charles A.
  Hinrichs

  	
   

  	
  By:

  	
  /s/Craig A. Hunt

  
	
  Charles A.
  Hinrichs

  	
   

  	
  Its:

  	
  Senior Vice President, General Counsel and Secretary