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



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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).


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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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