Exhibit 10.4


 


EMPLOYMENT
SECURITY AGREEMENT


 


THIS
EMPLOYMENT SECURITY AGREEMENT is entered into effective as of November 4,
2008, between SMURFIT-STONE CONTAINER CORPORATION, a Delaware corporation (the “Company”),
and Mack C. Jackson (the “Executive”);


 


Witnesseth
That:


 


WHEREAS, Executive is employed by the Company, and the
Company desires to provide protection to Executive in connection with any
change in control of the Company;


 


WHEREAS, Executive and the Company entered into an
Employment Security Agreement effective as of February 9, 2005, and desire
to replace such prior agreement as of the date hereof;


 


NOW, THEREFORE, it is hereby agreed by and between the
parties, for good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged, as follows:


 


1.                                      Payments
and Benefits Upon Employment Termination After a Change in Control. If
within two (2) years after a Change in Control (all capitalized terms as
defined below) or during the Period Pending a Change in Control, (i) Executive’s
employment with the Company and its Affiliates is terminated without Cause and
for a reason other than death or Disability, or (ii) Executive voluntarily
terminates such employment with Good Reason, the Company will, within 30 days
(except as otherwise expressly provided) of Executive’s Date of Termination,
make the payments and provide the benefits described below.


 


(a)                                 Cash
Payment. The Company will make a lump sum cash payment to Executive equal
to two times the Executive’s Annual Compensation.


 


(b)                                Welfare
Benefit Plans. With respect to each Welfare Benefit Plan, for the period
beginning on Executive’s Date of Termination and ending on the earlier of (i) two
years following Executive’s Date of Termination, or (ii) the date
Executive becomes covered by a welfare benefit plan or program maintained by an
entity other than the Company or an Affiliate that provides coverage or
benefits at least equal, in all respects, to such Welfare Benefit Plan,
Executive will continue to participate in such Welfare Benefit Plan on the same
basis and at the same cost to Executive as was the case immediately prior to
the Change in Control (or, if more favorable to Executive, as was the case at
any time thereafter), or, if any benefit or coverage cannot be provided under a
Welfare Benefit Plan because of applicable law or contractual provisions, the
Company will provide Executive with substantially similar benefits and coverage
for such period. The Company and Executive intend that the continued group
health benefit plan coverage period provided under Section 4980B of the
Internal Revenue Code of 1986, as amended (the “Code”) (so-called “COBRA
coverage”) will be concurrent with the continued coverage period provided for
in the preceding sentence. Executive shall report to the Company any coverage
or benefits actually received by Executive.


 


(c)                                 Equity
Awards. All stock options and restricted stock units granted under the
Smurfit-Stone Container Corporation 2004 Long Term Incentive Plan, and any
similar or successor stock plan or program, will immediately become fully
vested and exercisable upon the Change in Control.


 


2.                                      Incentive
Plans. The Company will make a lump sum cash payment to Executive within 30
days of the end of the year of a “change in control event” within the meaning
of Reg. 1.109A-3(a)(5) 


 

















 


with respect to any incentive plan whose performance
period has not ended as of a Change in Control. The Change in Control will be
treated as the end of any performance period that has not ended as of the
Change in Control.


 


(a)                                 With
respect to the Management Incentive Plan or any similar or successor plan (the “MIP”),
the Company will pay to Executive an amount determined by pro rating the
financial, strategic and performance objectives applicable to Executive under
the MIP, based on the number of days in the year prior to the Change in
Control.


 


(b)                                With
respect to any long-term incentive plan maintained by the Company (the “LTIP”)
the Company will pay to Executive an amount determined by pro rating the
financial, strategic and/or performance objectives applicable to Executive
under the LTIP, based on the number of days in the performance period prior to
the Change in Control.


 


3.                                      Change
in Control. A “Change in Control” of the Company will be deemed to occur as
of the first day that any one or more of the following conditions is satisfied:


 


(a)                                 The
“beneficial ownership” (as defined in Rule 13d-3 under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) of securities
representing more than 20 percent (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 (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the Company or
an affiliate thereof, 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 paragraph (c) of this Section will
not be a Change in Control under this paragraph (a); or


 


(b)                                Individuals
who, as of the date of the Agreement, constitute the Board of Directors (the “Incumbent
Board”) cease for any reason to constitute at least a majority of the Board of
Directors; provided, however, that any individual becoming a director
subsequent to the date hereof 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 of Directors; 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 (x) the corporation resulting from such Business
Combination (the “Surviving Corporation”), or (y) 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) beneficially 


 


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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; or


 


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


 


However, in no
event will a Change in Control be deemed to have occurred, with respect to
Executive, if Executive is part of a purchasing group that consummates the
Change in Control transaction. Executive will be deemed “part of a purchasing
group” for purposes of the preceding sentence if Executive is an equity
participant in the purchasing company or group (except:  (i) passive ownership of less than two
percent (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).


 


4.                                      Other
Definitions. For purposes of this Agreement:


 


(a)                                 “Affiliate”
shall mean any entity that is a member of a controlled group of corporations or
a group of trades or businesses under common control (each as defined in Code Section 1563),
which includes the Company.


 


(b)                                “Amount
Payable Under Any Bonus Plans” shall mean the average of the gross amounts
earned by Executive for the three complete fiscal years prior to Executive’s
Date of Termination (or, if greater, in the fiscal year prior to the Change in
Control) under the MIP, or any similar bonus plan in which Executive
participates before or after the date of this Agreement. For purposes of the
preceding sentence, if Executive’s number of full fiscal years of participation
in the MIP prior to the Change in Control is less than three, the amount under
this paragraph shall be calculated as the average of the gross annual amounts
earned by Executive over the number of full fiscal years of Executive’s
participation in the MIP prior to the Change in Control, or the number of full
fiscal years of Executive’s participation in the MIP prior to Executive’s Date
of Termination, whichever produces a higher average annual amount.


 


(c)                                 “Annual
Compensation” shall mean the sum of:  (i) Executive’s
salary at the greater of Executive’s salary rate in effect on the date of (A) the
Change in Control, or (B) Executive’s Date of Termination; and (ii) the
Amount Payable Under Any Bonus Plans in which Executive participates.


 


(d)                                “Employment
Termination” shall mean the effective date of: (i) Executive’s voluntary
termination of employment with the Company or any Affiliate with Good Reason;
or (ii) the termination of Executive’s employment by the Company or any
Affiliate without Cause. For purposes of this Agreement, Executive has
terminated employment if he has incurred a separation from service within the
meaning of Section 409A of the Code and Treasury Regulation §1.409A-1(h).


 


(e)                                 “Cause”
shall mean:  (i) Executive’s fraud
or criminal misconduct that materially injures the financial condition or
business reputation of the Company or any Affiliate; or (ii)  Executive’s
willful and continued failure to substantially perform Executive’s duties with
the Company or any Affiliate (other than any such failure resulting from
Executive’s incapacity due to physical or mental injury or illness or any such
actual or anticipated 


 


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failure after the issuance of a Notice of Termination
for Good Reason by the Executive pursuant to Section 8(a) hereof) after the
Company’s Board of Directors delivers a written demand for substantial
performance to Executive, which demand specifically identifies the manner in
which the Board believes that Executive has not substantially performed
Executive’s duties. For purposes of clauses (i) and (ii) of this definition: (x)
no act, or failure to act, on Executive’s part shall be deemed “willful” unless
done, or omitted to be done, by Executive not in good faith and without
reasonable belief that Executive’s act, or failure to act, was in the best
interest of the Company; and (y) in the event of a dispute concerning the
application of this provision, no claim by the Company that Cause exists shall
be given effect unless the Company establishes to the Board by clear and
convincing evidence that Cause exists.


 


(f)                                   “Disability”
shall be deemed the reason for the termination by the Company of Executive’s
employment, if, as a result of Executive’s incapacity due to physical or mental
illness, Executive has been absent from the full-time performance of Executive’s
duties with the Company for a period of six (6) consecutive months, the
Company has given Executive a Notice of Termination for Disability, and, within
thirty (30) days after the Company gives such Notice of Termination, Executive
has not returned to the full-time performance of Executive’s duties.


 


(g)                                “Good
Reason” shall exist if, without Executive’s express written consent:


 


(i)                                    Executive’s
assigned duties and responsibilities are significantly diminished from the
level or extent of such duties and responsibilities prior to the Change in
Control including, without limitation, any material diminution of the powers
associated with such position, or Executive’s reporting responsibilities,
titles or offices, as in effect immediately prior to the Change in Control, are
diminished;


 


(ii)                                 There
is a material reduction in Executive’s base salary or Target Bonus
Opportunities in effect as of the date of this Agreement (or as of the Change
in Control, if greater);


 


(iii)                              The
relocation of Executive’s principal place of employment to a location more than
50 miles from Executive’s principal place of employment immediately prior to
the Change in Control or the Company’s requiring Executive to be based anywhere
other than such principal place of employment (or permitted relocation thereof)
except for required travel on the Company’s business to an extent substantially
consistent with Executive’s business travel obligations immediately prior to
the Change in Control; or


 


(iv)                             The
Company fails to continue in effect any cash or stock-based incentive or bonus
plan, welfare benefit plan, or other benefit plan, program or arrangement,
unless the aggregate value (as computed by an independent employee benefits
consultant selected by the Company) of all such compensation, retirement and
benefit plans, programs and arrangements provided to Executive is not
materially less than their aggregate value as of the date of this Agreement (or
as of the Change in Control, if greater).


 


Executive shall be required to provide notice to the
Company of the existence of any of the foregoing conditions within 60 days of
the initial existence of the condition, upon the notice of which the Company
shall have a period of 30 days during which it may remedy the condition.


 


(h)                                “Period
Pending a Change in Control” will be deemed to have begun if the event set
forth in any one of the following has occurred:


 


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(i)            the
Company’s stockholders have approved any transaction described in paragraph 3(c) or
(d) above;


 


(ii)           the Company
enters into an agreement, the consummation of which would result in the
occurrence of a Change in Control;


 


(iii)          the
Company or any Person publicly announces an intention to take or to consider
taking actions that, if consummated, would constitute a Change in Control; or


 


(iv)          the Board
adopts a resolution to the effect that, for purposes of this Agreement, the
Period Pending a Change in Control has begun.


 


(i)                                    “Person”
shall have the meaning given in Section 3(a)(9) of the Exchange Act,
as modified and used in Sections 13(d) and 14(d) thereof.


 


(j)                                    “Target
Bonus Opportunities” shall mean the aggregate of all bonuses Executive is
eligible to earn, at the target level, under the MIP or any similar bonus plan
in which Executive participates before or after the date of this Agreement (or
as of the Change in Control, if greater) for the period that includes the date
of the Change in Control.


 


(j)                                    “Welfare
Benefit Plan” shall mean any welfare benefit plan maintained or contributed to
by the Company or any Affiliate, that provides health (including medical and
dental), life, accident or disability benefits or insurance, or similar
coverage, in which Executive was participating at the date of this Agreement or
the time of the Change in Control, whichever is applicable.


 


5.                                      Limitation
on Payments and Benefits. Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received or to be received
by the Executive in connection with a Change in Control or Executive’s Employment
Termination (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any Person whose actions result in a
Change in Control or any Person affiliated with the Company or such Person)
(all such payments and benefits being hereinafter called “Total Payments”)
would be an “excess parachute payment” pursuant to Code Section 280G or
any successor or substitute provision of the Code, with the effect that
Executive would be liable for the payment of the excise tax described in Code Section 4999
or any successor or substitute provision of the Code, or any interest or
penalties are incurred by Executive with respect to such Total Payments (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then, after taking into account
any reduction in the Total Payments provided by reason of Code Section 280G
in such other plan, arrangement or agreement, the cash payments provided in
Sections 1 and 2 of this Agreement shall first be reduced, and the
non-cash payments and benefits shall thereafter be reduced, to the extent
necessary so that no portion of the Total Payments is subject to the Excise Tax.
Notwithstanding the foregoing, no payments or benefits under this Agreement
will be reduced unless: (i) the net amount of the Total Payments, as so
reduced (and after subtracting the net amount of federal, state and local
income taxes on such reduced Total Payments) is greater than (ii) the
excess of (A) the net amount of such Total Payments, without reduction
(but after subtracting the net amount of federal, state and local income taxes
on such Total Payments), over (B) the amount of Excise Tax to which the
Executive would be subject in respect of such unreduced Total Payments.


 


(a)                                 Subject
to the provisions of paragraph (b) below, all determinations required to
be made under this Section, and the assumptions to be utilized in arriving at
such determinations, shall be made by the public accounting firm that serves as
the Company’s auditors (the “Accounting Firm”), which shall provide detailed
supporting calculations both to the Company and Executive within 15 business
days of the receipt of notice from the Company or Executive that there have
been Total Payments, or such earlier time as is 


 


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requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change in Control, Executive shall designate another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. If the Accounting Firm determines that no Excise Tax is
payable by Executive, it shall furnish Executive with a written opinion that
failure to report the Excise Tax on Executive’s applicable federal income tax
return would not result in the imposition of a negligence or similar penalty. Any
determination by the Accounting Firm shall be binding upon the Company and
Executive, except as provided in paragraph (b) below.


 


(b)                                As
a result of the uncertainty in the application of Code Section 280G 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 an Excise Tax, or a greater Excise Tax, is due, and thus the Company
should have made a lesser amount of Total Payment than that determined pursuant
to paragraph (a) above. Executive shall notify the Company in writing of
any claim by the IRS or other agency that, if successful, would require
Executive to pay an Excise Tax or an additional Excise Tax. If the IRS or other
agency makes a claim that, if successful, could require Executive to pay an
Excise Tax or an additional Excise Tax, the Company shall reduce or further
reduce Executive’s payments and benefits in accordance with this Section 5
to the amount necessary to eliminate such Excise Tax or additional Excise Tax. Any
reduction will be made by the end of the second calendar year following the
Change in Control.


 


(c)                                 Notwithstanding
any provision of this Agreement to the contrary, the parties agree that to the
extent Code Section 409A applies to this Agreement, the Agreement shall be
timely amended to comply with the requirements of paragraphs (2), (3), and (4) of
Code Section 409A(a), as interpreted in guidance issued by the Internal Revenue
Service. The parties further agree that this Agreement shall be administered in
all respects in accordance with Code Section 409A, and all amounts payable
hereunder shall be distributed only in compliance with the requirements of
paragraphs (2), (3), and (4) of Code Section 409A(a), including, without
limitation, the requirement of Code Section 409A(a)(2)(B)(i), requiring that
any distribution of deferred compensation (as defined in Code Section 409A and
the regulations thereunder) to a “Specified Employee” paid by reason of
separation of service cannot be made before the date which is 6 months after
the date of separation (or if earlier, the death of the employee). No
distribution under the Agreement which would fail to meet the requirements of
paragraphs (2), (3), and (4) of Code Section 409A(a) shall be made.


 


6.                                      Executive’s
Death. If Executive dies after a Change in Control and Employment
Termination, but before the complete payment of any amount or benefit required
under this Agreement, the Company will pay such amount or benefit to the
Executive’s spouse, if living, or to the Executive’s estate.


 


7.                                      Mitigation
and Set-Off. Executive shall not be required to mitigate Executive’s
damages by seeking other employment or otherwise. The Company’s obligations
under this Agreement shall not be reduced in any way by reason of any
compensation or benefits received (or foregone) by Executive from sources other
than the Company after Executive’s Employment Termination, or any amounts that
might have been received by Executive in other employment had Executive sought
such other employment. Executive’s entitlement to benefits and coverage under
this Agreement shall continue after, and shall not be affected by, Executive’s
obtaining other employment after the Executive’s Date of Termination, provided
that any such benefit or coverage shall not be furnished if Executive expressly
waives the specific benefit or coverage by giving written notice of waiver to
the Company.


 


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8.             Termination
Procedures.


 


(a)                                 Notice
of Termination. After a Change in Control, any purported termination of
Executive’s employment shall be communicated by a written “Notice of
Termination” from one party to the other in accordance with Section 18
hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a
notice that indicates the specific provision in this Agreement relied upon and
setting forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive’s employment under the provision
so indicated. Further, a Notice of Termination for Cause is required to include
a copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Company’s Board of
Directors (after reasonable notice to Executive and an opportunity for
Executive, together with Executive’s counsel, to be heard before the Board)
finding that, in the good faith opinion of the Board, the Executive was guilty
of conduct set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.


 


(b)                                Date
of Termination. “Date of Termination,” with respect to any purported
termination of Executive’s employment after a Change in Control, will mean (i) if
Executive’s employment is terminated for Disability, thirty (30) days after the
Company gives Notice of Termination (provided that Executive has not returned
to the full-time performance of Executive’s duties during such thirty (30) day
period), (ii) if Executive’s employment is terminated due to death, the
date of Executive’s death, and (iii) if Executive’s employment is
terminated for any other reason, the date specified in the Notice of
Termination (which, in the case of a termination by the Company, shall not be
less than thirty (30) days (except in the case of a termination for Cause) and,
in the case of a termination by Executive, shall not be less than fifteen (15)
days nor more than sixty (60) days, respectively, from the date such Notice of
Termination is given).


 


9.                                      Settlement
of Disputes; Arbitration.


 


(a)                                 All
claims by Executive for payments or benefits under this Agreement shall be
directed to and determined by the Company’s Board of Directors (or such
committee to which the Board delegates authority under this Section) and shall
be in writing. Any denial by the Board (or such committee) of a claim for
benefits under this Agreement shall be delivered to Executive in writing and
shall set forth the specific reasons for the denial and the specific provisions
of this Agreement relied upon. The Board (or committee) shall afford Executive
a reasonable opportunity for a review of the decision denying a claim and shall
further allow Executive to appeal the decision within sixty (60) days after the
Board (or committee) gives notice that it has denied Executive’s claim.


 


(b)                                Any
further dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in either Chicago, Illinois
or St. Louis, Missouri, as specified by Executive, in accordance with the rules of
the American Arbitration Association then in effect; provided, however, that
the evidentiary standards set forth in this Agreement shall apply. Judgment may
be entered on the arbitrator’s award in any court having jurisdiction. Notwithstanding
any provision of this Agreement to the contrary, Executive shall be entitled to
seek specific performance of Executive’s right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement.


 


10.                                Legal
Fees and Expenses. The Company shall pay to Executive all legal fees and
expenses incurred by Executive in disputing in good faith any issue hereunder relating
to the termination of Executive’s employment, in seeking in good faith to
obtain or enforce any benefit or right provided by this Agreement or in
connection with any tax audit or proceeding to the extent attributable to the
application of Code Section 4999 to any payment or benefit provided
hereunder. The Company shall make such payments within fifteen (15) business
days after delivery of 


 


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Executive’s written requests for payment accompanied
by such evidence of fees and expenses incurred as the Company reasonably may
require and no later than the end of the second calendar year following the
year in which the expenses were incurred. The parties hereby agree that a court
or arbitrator shall have the authority to award such reimbursement, in whole or
in part, upon a finding that Executive has proceeded with substantial merit and
good faith, provided that any such payment shall be made no later than the end
of the second calendar year following the year in which the expenses were
incurred.


 


11.                                Assignment;
Successors. This Agreement may not be assigned by the Company without the
written consent of Executive but the obligations of the Company under this
Agreement shall be the binding legal obligations of any successor to the
Company by merger, consolidation or otherwise, and in the event of any business
combination or transaction that results in the transfer of substantially all of
the assets or business of the Company, the Company will cause the transferee to
assume the obligations of the Company under this Agreement. This Agreement may
not be assigned by Executive during Executive’s life, and upon Executive’s
death will inure to the benefit of Executive’s heirs, legatees and legal
representatives of Executive’s estate.


 


12.                                Interpretation.
The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Missouri, without regard to the
conflict of law principles thereof. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.


 


13.                                Withholding.
The Company may withhold from any payment that it is required to make under
this Agreement amounts sufficient to satisfy applicable withholding
requirements under any federal, state or local law.


 


14.                                Amendment
or Termination. The Company and Executive may amend this Agreement at any
time by written agreement. The Company may terminate this Agreement by written
notice given to Executive at least two years prior to the effective date of
such termination, provided that, if a Change in Control occurs prior to the
effective date of such termination, the termination of this Agreement shall not
be effective and Executive shall be entitled to the full benefits of this
Agreement. Any such amendment or termination shall be made pursuant to a
resolution of the Board.


 


15.                                Indemnification.
Following Executive’s Date of Termination, the Company will:  (i) indemnify and hold harmless
Executive for all costs, liability and expenses (including reasonable attorneys’
fees) for all acts and omissions of Executive that relate to Executive’s
employment with the Company, to the maximum extent permitted by law; and (ii) continue
Executive’s coverage under the directors’ and officers’ liability coverage
maintained by the Company, as in effect from time to time, to the same extent
as other current or former senior executive officers and directors of the
Company.


 


16.                                Financing.
Cash payments under this Agreement (not including any payments made from a
qualified plan) are general obligations of the Company, and Executive shall
have only an unsecured right to payment thereof out of the general assets of
the Company. Notwithstanding the foregoing, the Company may, by agreement with
one or more trustees the Company selects, create a trust on such terms as the
Company shall determine to make payments to Executive in accordance with the
terms of this Agreement.


 


17.                                Severability.
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions of this Agreement shall be unaffected thereby and shall remain in
full force and effect.


 


18.                                Notices.
Notices given pursuant to this Agreement shall be in writing and shall be
deemed received when personally delivered, or on the date of written
confirmation of receipt by (i) overnight carrier, (ii) telecopy, (iii) registered
or certified mail, return receipt requested, addressee 


 


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only, postage prepaid, or (iv) such other method
of delivery that provides a written confirmation of delivery. Notice to the
Company shall be directed to:


 


Smurfit-Stone Container Corporation


Six Cityplace Drive


Creve Coeur,
Missouri  63141


Attention: General Counsel


 


The Company may
change the person and/or address to whom Executive must give notice under this Section by
giving Executive written notice of such change, in accordance with the procedures
described above. Notices to or with respect to Executive will be directed to
Executive, or the executors, personal representatives or distributees of a
deceased Executive, or the assignees of Executive, at Executive’s home address
on the records of the Company.


 


19.                                Entire
Agreement. This Agreement constitutes the entire understanding of Executive
and the Company with respect to the subject matter hereof and supersedes any
and all prior understandings written or oral, including but not limited to that
certain Employment Security Agreement between Executive and the Company dated
as of February 9, 2005.


 


20.                                No
Waiver. No failure or delay on the part of the Company or Executive in
enforcing or exercising any right or remedy hereunder shall operate as a waiver
thereof.


 


21.                                Counterparts.
This Agreement may be executed in one or more counterparts, all of which
together shall constitute but one Agreement.


 


IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first written above.


 


	
   

  	
   

  	
  SMURFIT-STONE
  CONTAINER CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
      /s/
  Patrick J. Moore

  
	
   

  	
   

  	
   

  	
  Patrick J. Moore

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its: 

  	
  Chairman and Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
  EXECUTIVE

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
           /s/ Mack C.
  Jackson

  	
   

  	
   

  	
   

  



 


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